Walmart to hire more than 50,000 for U.S. holiday rush

BENTONVILLE, Ark., Fri Sep 21, 2012 – Wal-Mart Stores Inc. plans to hire more than 50,000 seasonal employees to work at its Walmart stores in the United States, slightly more than it did last year, as it gets ready for the winter holiday season, its busiest time of year.

The world’s largest retailer also said on Friday that it would give current workers the chance to work more hours during the season. Some Walmart workers have said that they are not given the opportunity to work as many hours as they would like.

“We know many customers are continuing to struggle as a result of the economy and high unemployment levels, but they have shown us that they’re resilient. They’re committed to giving their families a memorable Christmas,” Walmart U.S. COO Gisel Ruiz said in a statement.

Walmart did not say how many seasonal workers it hired for the 2011 holiday season, but the plan to hire more than 50,000 is up slightly from last year. The company is trying to improve the level of service at its thousands of stores, where shoppers often complain that they have to wait in long lines to pay.

Retailers typically add seasonal staff in the weeks leading up to the holiday shopping season in order to work in stores and to help in other areas, such as distribution and fulfilling online orders.

Earlier this week, department store chain Kohl’s Corp said it planned to increase its holiday season hiring by more than 10 percent. Kohl’s said on Tuesday that it plans to hire more than 52,700 people for the holiday season to work in stores and support its online business.

Retailers to tout size in absence of substance in TV aisles

NEW YORK, Thu Sep 13, 2012 – Television retailers are going to have one simple message for shoppers this coming holiday season: Supersize it.

The lack of anything really new to tout means that mass merchants, online and specialty retailers will try to get people to trade in that once fancy 42-inch flat screen TV for one that is 60- or even 90-inches, and at lower prices that wouldn’t have been fathomable a couple of years ago.

The only problem: If consumers play hard to get, then margins – for manufacturers and to some extent, retailers – could get slammed.

The margin pressure “is being felt on all sides,” said Ben Arnold, NPD Group’s director of industry analysis, adding that manufacturers are being squeezed harder.

On average, a 50- to 52-inch LCD TV is expected to sell at $829 this year versus $1370 last year. But the price of a 50-inch LCD TV could fall to as low as $529 or even $499 on Black Friday, the kickoff to the biggest selling season of the year, said Tamaryn Pratt, principal of Quixel Research.

While retailers can try to combat the profit hit by selling more high-margin installation services or TV accessories, manufacturers have fixed production costs to meet no matter what they earn on the televisions they sold, Arnold added.

Top retailers Best Buy, Amazon.com, Wal-Mart and Target told Reuters they were planning to carry a bigger assortment of large screen TVs this year.

That is different from what they have done in the past few years when they played up features like 3-D technology and the ability to directly stream online content, to win shoppers.

“There is nothing out there that consumers are saying, you know what, I need to get rid of the TV I have and buy this new thing,” said Frank DeMartin, Vice President, Retail & Distribution Sales, Mitsubishi Electric Visual Solutions America. “This is why the TV business is in a bit of a plateau.”

Data from NPD DisplaySearch on Tuesday showed that global TV shipments fell for the second straight quarter, declining 8 percent in the second quarter of 2012 from the year-ago period.

Sears posts big net loss, to sell some stores

HOFFMAN ESTATES, Ill. — Sears Holdings Corp reported a big quarterly net loss as the U.S. retailer struggled to woo shoppers in the key holiday selling season.

The operator of Sears department stores and the Kmart discount chain also reached a deal to sell 11 stores to General Growth Properties Inc and decided to separate Sears Hometown and outlets businesses and some hardware stores.

The dismal results come at a time when business lenders such as CIT Group Inc. keep Sears on a tight leash, adding to problems plaguing the company.

Sales at the company have fallen every year since it was formed by hedge fund manager Edward Lampert through the merger of two of the most iconic American chains in an $11 billion deal in 2005.

Sears reported a net loss of $2.4 billion after a number of charges, compared with a profit of $374 million a year earlier.

Target adjusted profit rises for holiday quarter

MINNEAPOLIS –– Target Corp. posted a higher adjusted quarterly profit as the retailer’s sales rose during the holiday season.

Target earned $981 million, or $1.45 per share, in the fiscal fourth quarter, compared with a profit of $1.04 billion, or $1.45, a year earlier. Excluding certain costs, adjusted profit per share came to $1.49, compared to $1.38 a year earlier.

Target expects to earn between $4.55 and $4.75 per share this year, excluding the costs of its entry into Canada. That includes 97 cents to $1.07 per share for the first quarter.

Target previously said that sales rose 3.3 percent to $20.94 billion. Sales at stores open at least a year, or same-store sales, rose 2.2 percent, down from a 2.4 percent rise during the prior holiday season.

The average amount spent per transaction at those established stores rose 1.8 percent as shoppers bought more items and prices were higher.

Wal-Mart holiday profit just short of Wall Street forecasts

BENTONVILLE, Ark. – Wal-Mart Stores Inc’s. fourth-quarter profit came in just short of Wall Street’s expectations, sending its shares down 2.6 percent, as it cut prices to win over U.S. shoppers during the holiday season.

Walmart U.S., the biggest division of the world’s largest retailer, has been lowering prices, bringing back a wider variety of items and focusing on a low-price message to woo shoppers on limited budgets who started to shop at dollar stores and elsewhere in recent years. Traffic at those stores rose after six quarterly declines.

Walmart U.S. posted a 1.5 percent increase in sales at stores open at least a year. It was the second quarter in a row that Walmart U.S. same-store sales rose after nine consecutive quarterly declines.

However, operating income growth at Walmart U.S. grew at a slower rate than sales. Gross profit margin declined as the company made investments in its pricing strategy.

The rise in sales was also not as strong as analysts expected. Wal-Mart expected Walmart U.S. same-store sales would be flat to up 2 percent, compared with a 1.8 percent drop a year earlier. Analysts on average had expected a rise of 1.8 percent, according to Thomson Reuters data.

Shares of Wal-Mart, which were up 4.6 percent so far this year through Friday’s closing price of $62.48, fell $1.65, or 2.6 percent, to $61.20 in premarket trading.

Wal-Mart earned $5.19 billion, or $1.51 per share from continuing operations attributable to the company, up from $5.02 billion, or $1.41 per share, a year earlier.

Returns of holiday gifts purchased online to hit record

NEW YORK ― After the holiday party comes the hangover for retailers: handling millions of returns this week.

With a Christmas season that has seen record e-commerce sales coming to a close, returns should hit an all-time high on Tuesday for United Parcel Service

.The delivery company expects to handle more than 550,000 returns on Tuesday, a record, and up almost 8 percent from a year earlier. Several other days during the first week of 2012 will also top half a million returns, UPS said.

“This will definitely be the busiest year for returns,” Ken Burkeen, marketing director of the retail and consumer products division at UPS, told Reuters.

The good news for retailers is that most of the jump is simply a reflection of the explosive growth in e-commerce this Christmas season: U.S. online sales were up 15 percent between Nov. 1 and Dec. 26, according to data firm comScore.

Burkeen said UPS expects returns to rise 7.7 percent, meaning returns as a percentage of total sales have actually dipped despite more customer-friendly return policies.

A lot of that has to do with how much better web sites have gotten, including the ability to rotate the image of a product 360 degrees.

Diana Ku, a 25-year-old elementary school teacher from the San Francisco area, said she buys more from Nordstrom Inc., in part because of the quality of the photography on the upscale department store chain’s web site.

Such improvements to many e-commerce sites have lowered the risk for a customer like Ku of placing an order only to open a package and find the item wasn’t what she was expecting.

Ku has yet to return a product she bought online this holiday period. “I do return quite a lot normally, but I didn’t this year,” she said.

It’s expensive for retailers to take back products they have already sold, check they are still in good condition, repackage them and integrate them back into inventory for resale.

Kurt Salmon retail strategist Al Sambar said that the returned items often end up in the discount bin, meaning a further danger to margins during a holiday season that has already seen steep discounting.

But retailers have found that easier returns policies, online or off, can be good business.

Nordstrom this year stopped taking $6 off of refunds on returns when an item bought online is mailed back. Kohl’s Corp., a mid-priced department store chain, has long been praised by retail strategists for its policy of accepting returns without receipts.

Even when returns spike, that can be good news. If shoppers know they can bring products back to stores or mail them back to online retailers, they are likely to buy more from that retailer.

“Making it easier to return increases loyalty and doesn’t increase returns per se,” said Fiona Dias, chief strategy officer for ShopRunner, a company that manages returns and shipping for the e-commerce sites of retailers including American Eagle Outfitters and Toys R Us.

“If retailers make it difficult to return, the customer is left with an overall bad taste in their mouth about the brand.”

Amazon may benefit as digital goods sales jump

SEATTLE, Wash. ― Digital goods are the fastest-growing category online this holiday, led by e-books, suggesting Amazon.com Inc’s strategy of blanketing the world with cheap e-readers and tablet computers may be producing some early gains.

Sales of digital goods, which also include music and videos, are up about 30 percent this holiday season, compared to the same period last year, according to comScore data.

That is ahead of sales of consumer electronics and jewelry and watches, which are up about 25 percent versus last year’s holiday season, and apparel and accessories, which are growing in line with overall e-commerce at roughly 15 percent, comScore data show.

The only other holiday season that digital goods grew the fastest was in 2006, when sales jumped 83 percent from a smaller base, according to comScore. At that time, Apple Inc’s iTunes music store drove a lot of the growth of the category.

“Music is a much more stable market at this point. The real new growth is coming from e-books,” said Andrew Lipsman of comScore.

“The increased proliferation of devices, such as tablets and e-readers, has led to more forms of digital content being downloaded,” he added. “People are downloading e-books in a way they had not previously.”

Amazon launched its $199 Kindle Fire tablet ahead of the holidays and slashed prices on its range of Kindle e-readers.

Earlier this month, Amazon said customers were buying more than one million Kindles a week and analysts at Goldman Sachs estimate the company will sell 14 million units during the fourth quarter.

Amazon priced these products aggressively and many analysts estimate the company is making little or no profit on the devices. Instead, Amazon is hoping to make money from higher sales of digital goods, according to Aaron Kessler, an analyst at Raymond James.

“Tablets and Kindles are selling a lot this season and that should ultimately benefit Amazon’s digital sales,” he said.

Still, a lot of these devices were bought as gifts this holiday, so the full impact on digital content sales will probably not come until Christmas Day and the weeks that follow, Kessler added.

FedEx sees record holiday volume, adding workers

MEMPHIS, Tenn. ― FedEx Corp. expects a 12 percent jump in holiday shipments this year and will add about 20,000 workers to handle the record volume driven by online shopping.

The surge is driven by a combination of gradual economic improvement and ever-increasing Internet sales, analysts said.

“This is slightly better than we anticipated,” and suggests some restocking by retailers as well as more online shopping by consumers, said Dahlman Rose & Co. analyst Jason Seidl.

“The economy right now is not as bad as some people had feared, though I wouldn’t say it’s going great guns, and this is also an indication that a lot of retailers kept inventories low and the consumer is not totally in the dumps,” he added.

FedEx shares were up 3.5 percent on Monday after the company detailed its holiday expectations.

Retailers and manufacturers have been keeping inventories lean because of low consumer confidence. Demand that develops closer to the holidays this year now will most likely be delivered by FedEx and United Parcel Service, which offer fast shipment options.

FedEx said it will add about 20,000 seasonal workers to help handle the volume surge, up from 17,000 last year.

“Peak season” shipping, in which goods are moved here from Asia in the fall for the holidays, was dulled this year because companies are not keeping excess goods on their shelves due to the sour mood of the consumer.

U.S. gross domestic product grew at an annual rate of 1.3 percent in the second quarter, underscoring the tepid pace of economic recovery.

FedEx’s forecast “is a combination of maybe the economy is a little better than we thought, and that this really speaks to the growth of on-line shopping,” said BB&T Capital Markets analyst Kevin Sterling.

“Inventories are extremely lean, so any pulse of demand has got to come by airfreight, and that’s right in the wheelhouse for FedEx and UPS,” said Sterling, based in Richmond, Va.

And e-commerce is showing no signs of abating, which plays into the hands of FedEx and UPS, the two largest package delivery companies, which move goods faster than ship or rail.

“The buzzword this year is M-commerce, or mobile commerce,” in which convenience-seeking consumers order products via their mobile phones, further boosting online sales, Sterling added.

FedEx said it delivers 61 percent of its packages in two days or less, for example.

FedEx expects to deliver more than 260 million packages globally between Thanksgiving and Christmas, up 12 percent from a year earlier.

Apparel, consumer electronics, luxury goods, books and other items from big Internet retailers will account for a large portion of holiday volume, the company said on Monday.