Wages Rise for U.S. Workers November 20, 2006
Posted by Tim Raines in: business, construction, real estate, retail, finance, management , add a commentFor the first time in years, paychecks in the U.S. rose faster than the cost of living. The pay increase amounts to four percent over the past twelve months, a gain that hasn’t been seen since 1997.
From Christian Science Monitor:
“The striking feature of this expansion has been that … real wages for the typical worker haven’t risen that much,” says Richard Berner, US economist at the investment bank Morgan Stanley in New York. But with real incomes rising, he says, “you get a picture of an economy that can weather this housing storm.”
The risk of recession hasn’t disappeared, he and other economists say. But with a fairly tight job market and low unemployment, many expect that paychecks will keep rising solidly in 2007.
Add fewer layoffs this year and the economy might just have something to be thankful about this Thursday.
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Federated Sells Bridal Business November 17, 2006
Posted by Tim Raines in: business, retail, finance , add a commentFederated Department Stores has agreed to sell its Bridal Group to two separate transactions for a total of $850 million.
Leonard Green & Partners LP, a private equity firm, will purchase the David’s Bridal chain and the Priscilla of Boston chain, totaling 279 stores for $750 million.
In a separate transaction, Men’s Wearhouse Inc. will acquire After Hours Formalwear, the nation’s largest tuxedo rental chain, for $100 million.
Both transactions are expected to close in the first quarter of 2007.
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Nonresidential Construction Still Growing November 16, 2006
Posted by Tim Raines in: business, construction, public utilities, real estate, retail, finance, architecture , add a commentDespite lackluster sales in the residential arena, nonresidential construction spending has risen for 15th consecutive month, leading to an overall construction spending increase of 6.6 percent in the first 9 months of 2006 over the same period last year.
From Architectural Record via BusinessWeek:
Hotels and resort-related construction spending saw a 48 percent gain over the first nine months of last year; retail stores, shopping centers and malls were up 37 percent; hospital spending grew 25 percent; and manufacturing increased by 23 percent. Multifamily construction, meanwhile, was up 18 percent year-to-date, as a surge in rental facilities is offsetting a dip in condominium building.
Highway and street construction, meanwhile, rose 16 percent year-to-date over 2005, while educational construction increased by 7 percent. Other positive growth areas include sewage and waste disposal and transportation facilities. Nearly all of these categories are expected to grow in 2007, due to a fundamentally strong economy.
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Retailers Struggle With Limited PS3 Supplies
Posted by Tim Raines in: wholesale, business, manufacturing, retail , add a commentRetailers frustrated with Sony’s tiny allotments of PlayStation 3 consoles are beginning to fight back.
Abt Electronics has chosen to completely ignore Friday’s launch instead of disappointing customers, staying open late and dealing with near-riots.
From TWICE magazine:
“We looked into buying truckloads through a distributor,” said president Mike Abt, who ultimately decided to pre-sell his limited allotment in July and pull any mention of PlayStation from ads. “We’re very disappointed in the allocations,” he said. “We’re not taking orders and we’re not talking about it”– an ironic twist, given that Sony’s largest-ever in-store shop will open within Abt’s showroom on the day PS3 debuts.
Circuit City is holding midnight launch events at six stores in some of the major markets, including giveaways and radio coverage. Best Buy, who appears to have the largest inventory of the consoles, will also keep select stores open until 1:00 am for the launch.
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Wal-Mart Expects a Merry Christmas November 14, 2006
Posted by Tim Raines in: wholesale, business, retail, finance, marketing , add a commentWal-Mart showed a better-than-expected quarterly profit of 11.5 percent and gave a fourth quarter profit forecast that was close to Wall Street expectations.
The world’s largest retailer said price cuts on toys and electronics are already drawing customers and expects them to drive better holiday (or should we say “Christmas”) sales.
From Reuters:
Chief Executive Officer Lee Scott said third-quarter U.S. sales were softer than planned, but holiday season price cuts should boost fourth-quarter demand.
“This season, no one will doubt Wal-Mart’s leadership on price and value,” he said.
On a recorded message detailing third-quarter results and fourth-quarter plans, Scott said specials such as a $398 laptop computer sold out quickly, and he vowed the “most aggressive pricing strategy ever” for the holiday season.
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Home Depot Forecasts Tough Year Ahead
Posted by Tim Raines in: business, construction, retail, finance , add a commentThe nation’s leading home improvement retailer said its per-share profit could shrink 12 - 16 percent in the fourth quarter and more weakness is expected next year as the U.S. housing market continues to struggle.
From Reuters:
In home improvement, “I don’t think we’ve seen the bottom yet,” Home Depot Chairman Robert Nardelli told analysts during a conference call after finance chief Carol Tome gave the fourth-quarter forecast.
“I don’t see anything that suggests it’s going to get significantly better in ‘07,” Nardelli added.
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Cars Are Cheapest Since 1980
Posted by Tim Raines in: business, manufacturing, retail, transportation, finance , add a commentAccording to Comerica Bank’s “Auto Affordability Index”, it now takes 23.6 weeks—slightly longer than in 1980— of America’s median family income to purchase a new car.
Including finance charges, the average passenger vehicle sold in the third quarter of this year cost $26,500, about five percent less than the same time last year. During the same time period, average family income in the U.S. has risen about five percent.
From CNNMoney.com:
Improved productivity in the auto industry has combined with intense competitive pressures to drive the cost of a new car downward since its high in 1994, said Dana Johnson, chief economist at Comerica.
“It’s a pretty happy story for the consumer,” said Johnson.
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Acetaminophen Recall Causes a Headache for Tylenol November 13, 2006
Posted by Tim Raines in: wholesale, business, manufacturing, retail, marketing , add a commentTylenol has the makings of a huge problem on its hands.
Perrigo makes acetaminophen for a large number of retailers and has recently decided on a recall due to problems that allowed bits of metal to be mixed in with some of its product.
The recall itself was obviously a huge problem for McNeil Consumer Healthcare, makers of Tylenol, as people generally associate acetaminophen with the Tylenol brand name. Radio spots and website alerts from the company are already pointing out that Perrigo was the company affected and bottles of Tylenol are safe.
Add to that the tampering that took place with Tylenol in 1982, and the company’s got a real PR problem on its hands.
And then Seth Godin went and pointed out what would be the straw that broke the camel’s back if I worked for the company:
A quick search on Google News for “acetaminophen” turns up the result shown above, complete with a picture of Tylenol. The search engine, of course, isn’t trying to make things worse for Tylenol; it’s just doing what many consumers do—associating acetaminophen with Tylenol.
How will McNeil’s marketing and PR departments recover from these unfair associations? Stay tuned.
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Wal-Mart Troubles with Nazi T-Shirts
Posted by Tim Raines in: business, retail, marketing , add a commentWal-Mart has been caught selling t-shirts that carry a Nazi SS logo, apparently inadvertently.
I stopped in at Wal-Mart today after I got off work. I had to pick up a few things. As I was walking past the men’s clothing area, something caught my eye. I noticed something weird over at a wall of t-shirts. One of the t-shirts had a design on it that looked remarkably like something related to Nazis. Specifically, the Totenkopf or “Death’s Head”.
I took a picture of it with my camera phone.
The Death’s Head symbol was worn by the members of the German Nazi SS. The Totenkopf on the Wal-Mart t-shirt looks very similar to the divisional insignia of the 3rd SS Division Totenkopf. As you can see, It’s almost an exact copy.
Neo-Nazi’s sometimes use the Totenkopf image because it is not as easily identifiable as other Nazi symbols such as the swastika. You might see one of these tattooed on someone’s arm while standing in line at Burger King and think it’s just an poorly done pirate skull. It’s not.
Is Wal-Mart purposely trying to sell clothing with Nazi symbols on it? I doubt it. They wont even sell CD’s with bad words on them. I doubt someone at Wal-Mart corporate headquarters in Bentonville, Arkansas decided to sell clothing with Nazi symbols on it.
Whoever designed this shirt had to know where the skull image came from. I have no idea what the date 1978 refers to.
Walmart has acknowledged their mistake with this reply (via The Allen Almanac):
We were not aware of the origins of the image until this morning when we learned about it through the blog Bent Corner.
We are deeply sorry that this happened, and we are in the process of pulling all of these t-shirts from our stores.
Respect for the individual is a core value of our company and we would never have placed this t-shirt on our shelves had we known the origin and significance of this emblem.
We are reviewing our product review process in an effort to ensure this never happens again.
Obviously, this was not done by Wal-Mart on purpose, but this is the kind of mistake that can sink a company—especially a small one.
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“Merry Christmas” is Back in Retail November 10, 2006
Posted by Tim Raines in: wholesale, business, retail, marketing , 2 commentsTaking a step back from the trend in recent years Wal-Mart and other big retailers, including Kohl’s and Macy’s, are bringing “Christmas” back into their marketing.
Mounting criticism that resulted from eliminating or de-emphasizing Christmas in the stores’ advertising has resulted in a change in plans.
From the Associated Press:
“We learned a lesson from that. Merry Christmas is now part of the vocabulary here at Wal-Mart,” said Linda Blakley, a Wal-Mart spokeswoman. Wal-Mart said Thursday that it will launch its first Christmas-specific TV ad in several years, feature Christmas shops, previously called Holiday Shops, and increase the number of seasonal merchandise labeled “Christmas” instead of “holiday” by 60 percent.
Macy’s is adding Christmas signage in all of its department stores and Kohl’s is playing up Christmas this year in its TV, print and radio advertising, according to Vicki Shamion, a Kohl’s spokeswoman.
Not everyone, of course, is following suit. Best Buy’s advertising, for example, continues to omit any reference to Christmas. Dawn Bryant, a company spokeswoman says, “We are going to continue to use the term holiday because there are several holidays throughout that time period, and we certainly need to be respectful of all of them.”
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