Changes in the Retail Scene

Changes in the Retail Scene
Wal-Mart has reduced its capital expenditures in the United States which indicates a reduction in new store additions/expansions. This seems to indicate that Wal-Mart is conceding that they are approaching a saturation point in the United States. For Wal-Mart, this likely signals a greater focus on improving current store results while looking for international opportunities. With that said, Wal-Mart has had modest success at best abroad.

Wal-Mart's competitors, including Target and Costco, enjoyed Wall Street gains due to this news. It may also result in a little bit of relief for smaller players as they may not get squeezed too much more by new Wal-Marts appearing on every corner. Of course, a slow in capital expenditures means they are only adding 600 stores in the next year, with the focus on Supercenters. So, grocery particularly, can't get too comfortable.

Looking at the upcoming holiday season, Wal-Mart seems to be the main significant retail player that is "struggling"--relatively speaking of course. I suspect this is because their core customer base is most impacted by the energy prices that are still far from modest. It seems like the mid-market players are better protected given that their customers have a little more disposable income. We'll see who the winners and losers are come January.

Source: brettdalybusiness.blogspot.com

'Student missionary dies in Peru bus accident'

RICHMOND, Va. - Gregory Gomez IV, 22, a student missionary serving in Peru for the summer through the International Mission Board (IMB), was killed in a bus accident July 5.

Source: www.biblicalrecorder.org

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'Report: Religious giving tops $100 billion in 2007'

Giving to religious charities and congregations passed the $100 billion mark for the first time in 2007, according to a recent report by the Giving USA Foundation.

Source: www.biblicalrecorder.org

The U.S. Dollar Weakens Further
For the first time in three decades, the Canadian dollar caught up to the American dollar. Due to problems in the housing and credit sectors, the Federal Reserve was forced to cut its interest rate by a half percent. Consequently, it made other currencies more attractive to investors. While it's good for what remains of the manufacturing sector, imports--which make up much of what people buy these days--and international trips are becoming even more costly. With the increasing cost of imports, inflation becomes a real threat.

This illustrates the adverse effects of this nation's deficit; hopefully international investors will continue to fund it. Retailers that depend heavily on imports and target price sensitive customers have reason for concern. It could be a difficult holiday season for them. Then again, this rate cut may keep some of those customers from losing their homes. Of course, inflation can drive up long-term mortgage rates anyway. So there's no guarantee there either.

Source: brettdalybusiness.blogspot.com

Update on book tour and live workshops: Bay Area, Portland, Seattle, Chicago and Wash DC now live!
For those of you who have not been following my updates on Twitter, I wanted to let you know that I have finalized details for a live one-day workshop in a number of cities across the U.S.  Registrations are pouring in, and I am beyond excited to meet many of you in person in your [...]
Source: www.escapefromcubiclenation.com

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Source: www.biblicalrecorder.org

Sears: Another Rough Holiday Season
Well, I posted in December and mentioned I was impressed with Sears' holiday marketing campaign. With a dip in holiday sales and the "release" of CEO Aylwin Lewis, it's clear that it didn't do the trick. Of course, Sears is hardly the only retailer that had a rough holiday season, but same store sales have been falling for some time now.

So, first off, was the campaign a failure? I don't necessarily think so. Unfortunately, marketing--by itself--cannot save a retailer. It has to be backed by a differentiated offering and superior customer experience. I think Sears did some things well this holiday season, but they still aren't capitalizing on their strongest brands while some stores need upgrading.

I think the "Can Sears be Saved" article in Forbes offers a pretty good analysis. Maybe the "Wish Book" campaign can still do this--it's just a case of better highlighting the brands. Then again, it might be easier to reposition the respective brands as category leaders by really focusing on them and making Sears the true background story--not that Sears needs another change in marketing strategy.

Assuming Lampert is serious about retail, it should be interesting to observe. They still have a powerful enough portfolio of brands to make a comeback, but the longer they take to get serious, the harder it's going to be.

Source: brettdalybusiness.blogspot.com

The Weak Dollar & the Deficit: A Recipe for Disaster?
The New York Times recently published an interesting editorial regarding the weak American dollar. Interest rates are becoming particularly difficult to forecast of late, and the erratic market activity isn't helping. Governmental spending has led to a massive deficit in recent years. The obvious to way to fix the problem is through boosting savings, which would of course require the current administration to end certain tax cuts and reign in spending. So, instead, they've let the dollar slide.

On the bright side, a weaker dollar results in more affordable American imports. But, it's critical for that weaker dollar to be teamed with a positive savings rate. Unfortunately, that's not the case. As long as the United States is forced to look abroad to fund its debts, there's the risk that they'll require a higher interest rate thanks to the weaker dollar and the added risk that comes with it. A higher interest rate could be a crushing blow to the domestic economy. It would cripple business and consumer spending.

So, in a nutshell, as long as our deficit is significant, there's the risk creditors will require more interest to continue to fund our spending. Consequently, the Federal Reserve won't have much say when it comes to interest rates. That's just how it goes when you spend more than you have--you lose the perks that come with responsible spending. Clearly, it's vital not to roll the dice like this, so hopefully we'll see a shift in policy in the near future.

Source: brettdalybusiness.blogspot.com