ICSC: August same-store sales climb
Same-store sales for chain stores in the United States rose 1.7 percent in August on a year-over-year basis, according to the International Council of Shopping Centers. That’s a smaller gain than was forecast last month, when ICSC chief economist and research director Michael Niemira predicted same-store sales would rise 2 percent.
“The [slower] August sales pace was touched by weakness in the economy, cold and wet weather, a later start to the school year and lean inventories,” Niemira said in a statement. “For the industry as a whole, we expect September sales to post an increase of about 2 percent.”
The ICSC tally, jointly produced with financial firm UBS, would have been unchanged from a year ago if not for a strong performance from Walmart, the trade group noted.
The world’s largest retailer beat Wall Street predictions for August sales, as consumers nationwide sought out bargains. Same-store sales rose 3 percent at the retailer, higher than the 1 percent to 2 percent gains Walmart had predicted.
“The underlying business performance for Walmart U.S. continued to show strength, and the improved relative performance has resulted in market share gains,” said Eduardo Castro-Wright, Walmart U.S. president and CEO.
Total company sales rose 8.7 percent to $30.68 billion from $28.22 billion in the year-ago period.
As indicated by the ICSC report, other retailers did not fare as well as Walmart. August same-store sales fell 2.1 percent at Target. The retailer blamed weakness in home products, as well as apparel and accessories, for the decline. The Minneapolis-based company saw net sales rise 3.1 percent to $4.85 billion compared with $4.71 billion last year.
Warehouse retailer Costco saw a bigger jump in same-store sales during the month, up 9 percent. Total revenue jumped 12 percent to $5.41 billion from $4.84 billion a year earlier.
Costco’s strong performance was in large part attributed to fuel sales — without gasoline-price inflation, same-store sales would have risen 6 percent at the retailer. Additionally, the company saw a weaker performance in international sales, primarily due to currency fluctuations.
The ICSC predicts that same-store sales for all U.S. chain stores will rise by 2 percent in September.
Independents capitalize on impulse items
Lauren Wagner, supervisor, category management for Do it Best, has a simple definition for the term “impulse item:” “something you don’t know you need until you see it.”
Falling into this category is a wide variety of products, most of them relatively small, inexpensive and easy to throw in with an order at the checkout counter. Examples include super glue, painter’s tape, night light bulbs — even ice cream — items that can be marketed on counter displays, dump bins, endcaps and clip strips. Major hardware co-ops and wholesalers have stepped up their impulse item programs in recent years, trying to capitalize on these last-minute sales.
“We’re really trying to bring the point across to members that this is an area they need to focus on,” Wagner said. “The margins are good — 50 percent or better on clip strips — and there’s quite a good turnover rate.”
Do it Best also offers “Problem Solver” planograms for each of the four seasons, including garden gloves and glass cleaner for spring; bleach pens and mosquito repellent for summer; chore gloves and lawn and leaf bags for fall; and extension cords and storm window kits for winter. The co-op also put together a series of planograms that represent the co-op’s best $1 programs, including “best of” hand tools, “best of” paint accessories and “best of” winter car care. Do it Best encourages members to market these not only as $1 items but as “10 for $10.”
“Like one sees in the grocery industry, this multiple price point really does encourage shoppers to buy in multiples of 10,” Wagner said.
Orgill also recently “reenergized” its impulse item program, according to Brett Hammers, vp-marketing. The product catalog contains more than 500 skus of clip strip, dump bin and endcap merchandise and bucket displays to help the store capture impulse sales at the product display and the point of purchase.
“We’re selling water, Gatorade, candy and other products, and we’ve expanded the program to include several drop-ship programs,” Hammers said at the company’s fall market in Chicago last month. “The nice thing is you can get into it easily. It’s more driven by customer demand than anything.”
True Value offers more than 200 planograms with more than 800 impulse items under its Visual Merchandising program, including batteries, candy, magazines, light bulbs, tape and flashlights. According to Rick Suptic, True Value’s planogram manager, industry studies have shown that items merchandised on endcaps can show a 25 percent increase in sales; items stationed at well-maintained checkouts can show an increase of more than 30 percent; and items placed in dump bins can produce a sales increase of more than 400 percent.
“We are continually updating our Visual Merchandising program and our offerings with new products and visually appealing displays, allowing our retailers easy access to the latest impulse ideas,” Suptic said.
Griffin Ace Hardware, a chain of three stores in Southern California, has two shelves of impulse items in the front of the store that vp-merchandising Kelly Hollingsworth changes frequently. There are practical products like batteries, light bulbs and tape, as well as fun novelty items like playing cards and cell phone cases — most of the items retailing for under $3. There are also six to eight clip strips at the front of each aisle related to the corresponding merchandise in those categories.
Absecon Do it Best Hardware in Absecon, N.J., carries impulse items near the main checkout counter as well, including candy, cold drinks and dollar store items. Because the store is located in a shore area, it also carries sunglasses, hats, bandanas and other related products.
“Actually, we find that the front counter is a great spot to add some extra dollars to the sale,” said owner Marilyn Weisman. “We show those inexpensive knives, the floral tools for ladies, new items, seasonal items, bug sprays, charcoal lighter, anything that the customer might have forgotten.”
Wagner believes impulse items — if done correctly — can account for 7 percent to 8 percent of a store’s sales. “They help build the average sale — and sales in general,” she said. “In challenging economic times, it’s an opportunity to continue sales as usual by looking outside the realm of traditional products.”
Menards recalls cordless screwdrivers
Menards has agreed to the recall of about 42,000 MasterForce 3.6-volt cordless screwdrivers due to an overheating problem.
The product reportedly can overheat and ignite during charging, posing a fire and burn hazard to consumers, due to a lack of overheating protection around the screwdriver’s lithium battery.
There have been three reports of fires and one report of a consumer suffering burns on the hand. Another consumer has reported suffering temporary hearing loss.
The recalled cordless screwdrivers are green and gray in color. They were manufactured in China and sold in Menards stores from Apirl 2007 through May 2008. The screwdrivers retailed for around $30.