Stores Struggle to Find Workers Amid Retail ‘Armageddon’

By Thomson/Reuters – Re-Blogged From Newsmax

U.S. retailers are finding it increasingly difficult to hire employees for stores and for middle and higher management as low pay and a feeling of uncertainty clouds the industry following a spate of bankruptcies and store closures.

Retailers including Macy’s Inc. and J.C. Penney have said they will hire the same or fewer seasonal workers for the holidays this year than last, while some, like Wal-Mart Stores Inc., have chosen not to hire temporary workers at all.

Image: Help Wanted: Stores Struggle to Find Workers Amid Retail 'Armageddon'
(Ronfromyork/Dreamstime)
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I Know What the Economy Did Last Summer Part 2: The Real Estate Rollover

By David Haggith – Re-Blogged From Great Recession Blog

In fact, I knew what the economy did last summer before summer even began. Since the beginning of the year, I have been writing that it appeared housing was reaching a new bubblicious peak and that the real estate market was getting ready to roll over. Just before the start of the summer, I confirmed that prediction by saying that it looked like that process had begun. I anticipate it will be a slow turnover at first, just as it was in 2007, which did not reach free fall until late in 2008. Likewise, I anticipate the present decline will not reach free fall until 2018.

While housing played out about as I expected this summer (see below), the more obvious collapse right now is developing in metropolitan commercial real estate, particularly in retail space due to the retail apocalypse. Even longtime commercial real-estate mogul Sam Zell warned last week that he would not consider investing any capital in retail real estate. In Zell’s words, the real estate landscape looks “like a falling knife.”

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Amazon to Test Own Delivery Service to Rival FedEx, UPS

By Spencer Soper (at Bloomberg) _ Re-Blogged From Newsmax

Amazon.com Inc. is experimenting with a new delivery service intended to make more products available for free two-day delivery and relieve overcrowding in its warehouses, according to two people familiar with the plan, which will push the online retailer deeper into functions handled by longtime partners United Parcel Service Inc. and FedEx Corp.

The service began two years ago in India, and Amazon has been slowly marketing it to U.S. merchants in preparation for a national expansion, said the people, who asked not to be identified because the U.S. pilot project is confidential. Amazon is calling the project Seller Flex, one person said. The service began on a trial basis this year in West Coast states with a broader rollout planned in 2018, the people said. Amazon declined to comment.

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Amazon Is Subduing Inflation

By Edward Yardeni – Re-Blogged From Newsmax

“World’s Greatest Price Wrecker” is a moniker that seems appropriate for Amazon, especially after the price cuts it announced earlier this week at its new subsidiary, Whole Foods.

However, the phrase actually dates back to the 1930s.

It was used in ads by Michael J. Cullen, who’s widely credited with having had the idea for supermarkets. During an era of mom-and-pop enterprises, the suggestion of “monstrous” stores, with plenty of parking, separate departments, self-service, discount pricing, and high-volume sales was revolutionary.

When Cullen’s idea was ignored by his then-employer Kroger Grocery & Baking Co., he struck out and opened King Kullen on Long Island. Ads for the new enterprise cried out: “King Kullen: World’s Greatest Price Wrecker.” King Kullen continues today as a family-controlled operation on Long Island with 32 locations.

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Macy’s, Kohl’s Sales Declines Renew Fears of Retail Apocalypse

From Thomson/Reuters – Re-Blogged From Newsmax

Shares of department store chains Macy’s Inc. and Kohl’s Corp. tumbled on Thursday as the companies reported a drop in quarterly same-store sales, stoking concerns that their turnaround may still be a long way off.

While the declines in same-store sales were not as bad as feared, gross margins at both the companies slipped as they continued to rely on discounts and promotions to woo customers back to their stores.

Image: Macy's, Kohl's Sales Declines Renew Fears of Retail Apocalypse
Dean-Neitman/Dreamstime

 

Macy’s gross margins fell to 40.3 percent from 40.9 percent a year earlier, while those of Kohl’s fell to 39.4 percent from 39.5 percent.  Continue reading

Amazon’s Whole Foods Conquest Is a ‘Game Changer’

By Mark Lennihan – Re-Blogged From Newsmax

CNBC’s Jim Cramer says Amazon.com Inc.’s purchase of Whole Foods is a “game changer” for the food industry.

Amazon.com Inc said on Friday it would buy U.S. organic supermarket chain Whole Foods Market Inc for $13.7 billion, including debt, marking the internet retailer’s largest deal and biggest foray into the brick-and-mortar retail sector, Reuters reported.

“This is such a game changer. … They will now dominate food within the next two years,” the “Mad Money” host said on CNBC’s “Squawk on the Street.”

“I’m taking down numbers for everybody who sells food. Everybody. Because you can’t compete [with] Amazon. They will not let you compete,” Cramer said, noting Amazon can now “change the whole paradigm.”  Continue reading

Supermarket Meltdown as Global Deep-Discounters Promise Price War in Stagnating US Market

By Wolf Richter – Re-Blogged From Wolf Street

Aldi’s $5 billion bet at a brutal time.

Today, Albertson’s explained in an amended S-4 filing for a debt exchange offering just how tough things have gotten for traditional supermarket chains.

As is so often the case, there is a private equity angle to it. Albertson’s was acquired in a 2005 LBO by a group of PE firms led by Cerberus. In January 2015, it acquired Safeway to eliminate some competition. It then wanted to sell its shares to the public. But in October 2015, as brick-and-mortar retail began to melt down, it scrapped its IPO.

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