Mixed message seen in retail comps
Top-line retail same-store sales held steady with a 5.7% gain in May, but showed the effects of plans by shoppers to curb spending, according to Kantar Retail.
The sales-weighted composite for the 26 retailers reporting — most of them apparel retailers — was up slightly from the 5.4% gain for the combined March–April period, which eliminates the impact of the Easter calendar shift. The result was down from April’s 8.7% same-store sales gain, which was pumped up by a late Easter. The result was better than the 2.7% gain in May 2010.
The results do not include Walgreens, which reports Friday. The calculations also no longer include Walmart, which stopped reporting monthly results in April 2009.
Apparel stores took the brunt of weaker spending plans; they significantly lagged the overall results. The results were led by the Food, Drug and Mass retailers — particularly Costco and BJ’s, which benefited from higher fuel prices. Department stores held up well, particularly upscale department stores, which benefit from upper-income households less affected by rising prices.
“Spring storms also affected the retail numbers, but there is little doubt that the strongest headwinds slowing sales are from higher prices for food and especially fuel,” said Frank Badillo, senior economist. “Shoppers are stepping up their response as inflation persists, and discretionary purchases from apparel to homegoods are most susceptible in the months ahead.”
Plastic packaging hurt by oil prices
According to an article in the New York Times, Home Depot’s executive VP merchandising Craig Menear is among those encouraging alternatives to expensive plastic packages.
Plastic packaging known as clamshells — the kind that usually require cutting tools to open — are being affected by the price of oil. The article reports Wal-Mart has pledged to reduce its packaging by 5% in the five years ending 2013.
At Home Depot, Menear said most of the Atlanta-based retailers are working on ways to cut costs and waste from packaging, the article reported.
While plastic packaging is unfriendly to the environment, it has been described as an effective deterrent to shoplifting.
Home Depot extends dividend streak
As The Home Depot holds its annual shareholders meeting today, it announced its 97th consecutive cash dividend.
The company announced that its board of directors declared a first-quarter cash dividend of 25 cents per share. The dividend is payable on June 30 to shareholders of record on the close of business on June 16. The dividend — the same amount it paid last quarter — marks the 97th consecutive quarter Home Depot has paid a cash dividend.
The company’s shareholders meeting takes place today at the Cobb Galleria Centre in Atlanta.