“Walgreen CEO Is Out as Top Shareholder Pessina Takes Over” by Michelle Fay Cortez at Bloomberg. “Walgreen Chief Executive Officer Greg Wasson will retire, clearing the way for top shareholder Stefano Pessina to tighten his grip amid a merger with his European retailer Alliance Boots GmbH…Pessina, 73, will be acting CEO while the company searches for a successor…The move makes almost a clean-sweep of Walgreen’s former executives.” Read more

 

“How Wal-Mart Made Its Crumbling China Business Look So Good for So Long” by Renee Dudley & Liza Lin at Bloomberg. “The practices — including bulk sales to other retailers and some sales allegedly booked when no merchandise left the shelves — made business appear strong even as retail transactions slowed and unsold inventory piled up, these people and documents say. Wal-Mart said in August that it was unhappy with inventory growth internationally.” Read more

 

Walmart CEO Appears on CBS This Morning  See the interview

 

“Walmart CEO: We’ll Do Away With Minimum Wage Pay In New Year” by Clare O’Connor at Forbes. “We’re going to make changes in a few months that will create a situation where no Walmart associate in the United States makes federal minimum wage,” McMillon told ‘CBS This Morning’ co-host Charlie Rose in a rare, fairly wide-ranging sit-down discussion. “We’ll be ahead of that with our starting wage.” Read more

 

“Another top executive leaves Walmart U.S. at height of holiday season” by Phil Wahba at Fortune. “Operating Officer Gisel Ruiz (will) be leaving to go to Walmart International, and be replaced immediately by Judith McKenna, a 20-year Wal-Mart veteran who most recently served as chief development officer for Walmart U.S.” Read more

 

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“Dot-Com Survivor BuildDirect Bets The House To Battle Lowe’s and Home Depot” by Ryan Mac at Forbes. “The company, which sells hardwood flooring, patio furniture and marble tile, has been on a start-and-stop schlep through the dot-com bubble, the housing collapse and plenty of skepticism. After 15 years BuildDirect is finally the overnight success story CEO Booth and cofounder Rob Banks envisioned it would be.” Read more

 

Women’s Wear Daily: “Ten of Tomorrow – Marvin Ellison, J.C. Penney” by David Moin. “I was surprised they were in such great moods,” despite working the holiday. Plus, they started at 5 p.m. versus 8 p.m. a year ago. Management debated when to open, Ellison said, yet associates “really petitioned us to open at 5. They wanted to win.” He came and went through Penney’s stores unannounced. “I still have the luxury of being able to walk around the stores pretty anonymously. They don’t recognize me.” Read more

 

“Target to Make No Harm-No Foul Argument in Breach Suit” by Andrew Harris at Bloomberg. “A victory for Target would also benefit retailers including Home Depot that face lawsuits after an explosion of hacking intrusions. Judges in previous cases found that the mere risk of identity theft alone isn’t enough, without proof of actual or imminent financial loss, for cases to proceed in federal court.” Read more

 

NY Times: “Online Deals for Holiday Shopping: Buyer Beware” by Farhad Manjoo. “So far this year, The Wirecutter and The Sweethome have researched 54,000 holiday deals. They’ve found that only a bit more than 300 of them — less than 1 percent — are worth your time. “When we find a deal that we think is good, it’s a needle in a haystack,” Ms. Cheng said.” Read more

 

“Walmart cashier helps customer buy groceries” by Marty Casper at News 10 ABC. “I felt really bad for him,” she said. “I didn’t want him to go home and not have something that he really needed to eat.” Instead, Karpen took $40 out of her own pocket for the man to use toward his groceries. “He didn’t quite realize what happened,” she said. Her manager, Jamie Cobb was stunned. “When I heard that I just couldn’t believe that,” she said.” See the video / Read more

 

— SEEKING INPUT: What do you like about this tipsheet? What do you dislike? Email info@eyeonretail.net with some thoughts on how to improve this morning rundown. 

 

Heard on Costco’s Q1 Earnings Call

Richard Galanti:

New stores

We opened eight new locations during the first quarter, which ended November 23rd, six in the U.S., our seventh location in Australia and our second location in Leone, Mexico.

We have no openings plan for Q2, for all of fiscal ’15 however, we have a current plan of 31 new locations, 18 of which will be in the U.S., three each in Japan and Mexico, two each in Australia and Korea, and one each in Canada, U.K. and Taiwan.

Australia is what two-thirds of the size population wise as Canada, where we have 90 or so units, we have seven in Australia. I’m not suggesting we are going to have 45 in Australia anytime soon. But certainly we will get more than seven.

Japan is certainly a bigger market for us. We’ve got 23, I believe, 22 or 23. We should have a lot more than that.

International

Better performing countries were Canada, Taiwan and Mexico.

LivingSocial

In early September for eight days we ran a nationwide promotion for new members on LivingSocial. It was a good value and we felt worked pretty well, but we will continue to look and see what we want to do going forward, no plans at this point.

Costco Online

We’re now in four countries, U.S., Canada, U.K. and Mexico. For the quarter, sales and profit were up over the year. E-commerce sales were up 20%, up 19% on a comp basis.

International online: stay tuned, maybe one additional country by fiscal year end ‘15

Google Shopping Express test

It’s too early to completely tell but we’re seeing some increased overall spend and it’s been a good partner to work with Google. 

Alibaba

It’s great but it’s new and we’ll see where it goes from here but certainly get our name noted a little bit over there as well.

Category Comps

Food and sundries: up in the mid-single digits. Candy, deli and spirits were up with the relative standouts.

Hardlines: up in the mid-single digits for the quarter. Electronics, came in high-single digits range. Better performing departments within hardlines was hardware, sporting goods and tires.

Within mid single-digit softlines, domestic, apparel and home furnishings were the standouts.

Fresh foods: comps were in the high singles, with meat department being the standout there.

I think in the last two years, we’ve little more than doubled organic sales from the low billions to closing in on $3 billion currently. 

 

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