Best Buy and The Carphone Warehouse Group have partnered to form a new company comprised of Carphone Warehouse’s retail business and Carphone Warehouse’s share of pre-existing joint projects with Best Buy (Best Buy Mobile vignettes and Geek Squad services in the UK and Spain).

• Carphone Warehouse’s retail business includes more than 2,400 stores in 9 European countries under the Carphone Warehouse and Phone House banners; Web and direct businesses; insurance operations; and Carphone Warehouse’s airtime reselling business.
• Best Buy is to acquire a 50% stake in the new company for USD2.142 billion; Carphone Warehouse will own the other 50%.
• Best Buy already holds a 2.9% stake in Carphone Warehouse.
• The transaction is subject to Carphone Warehouse shareholders’ approval at the company’s general meeting, which will take place by early August 2008.

The new retail venture plans to:

• Grow Carphone Warehouse’s retail business in existing European markets; accelerate the trend toward mobile and fixed line connectivity; private label growth; and joint purchasing and sourcing.
• Roll out Best Buy stores, services, and websites in select European markets beginning in 2009.
• Leverage Carphone Warehouse’s expertise in sourcing mobility products, bundling services, and operating smaller stores in Best Buy’s North American operations.

Best Buy announced it has formed a strategic partnership with Kitchen Tune-Up, a home improvement franchise that specializes in installing and restoring wooden kitchen cabinets.

• Best Buy and Kitchen Tune-Up have agreed to a cross-referral program.
• Best Buy’s Certified Appliance Specialists will recommend Kitchen Tune-Up to shoppers who wish to purchase new kitchen appliances to refresh their kitchens.

Best Buy announced the grand opening of a new store in Riverbank, California on May 10, 2008.

On May 10, 2008, Best Buy will operate 942 stores in 49 states and Puerto Rico.

BJ’s announced sales of USD744.5 million for the four weeks ended May 3, 2008, a 20.4% increase over numbers reported for April 2007. 

• Comparable club sales (comps) rose 17.8%, including a contribution from gasoline sales of 550 basis points (bp).
  • Comps benefitted 400 bp from one extra sales day during April 2008, as the Easter holiday occurred during the month of March 2008.
• Strong comps were seen in all regions, the strongest being Upstate New York.
• Comps were strong during all four weeks, the highest in weeks one, two, and four. The increase in weeks one and two were primarily due to better weather and the Easter shift; the strong performance in week four was due to strength in perishable foods, health & beauty aids, and consumer packaged goods.
• Excluding gasoline sales, both average basket and traffic increased 3% and 10%, respectively. The latter was positively impacted approximately 400 bp for the additional sales day.
• Food and general merchandise sales grew 16% and 7%, respectively. 
• Strong comps came from bakery, candy, coffee, dairy, health & beauty, household chemicals, juices, fresh meat, frozen, lawn & garden, oils & shortenings, pet foods, prepared foods, produce, paper goods, toys, and trash bags & wraps; categories with weaker comps included cigarettes, prerecorded video, residential furniture, and tires.

Q1 2008 sales grew 12.3% to USD2,258 million. 

• Comps increased 9.6% and were benefitted 390 bp by gasoline sales.

On May 8, 2008, BJs operated 177 warehouse clubs in 16 states.

Verizon Wireless has partnered with BJ’s to set up in-club kiosks in the Atlanta, Georgia area; to date, seven kiosks have been set up.

• Verizon will be responsible for the operation and maintenance of the kiosks, including hiring and training staff, inventory, displays, and providing any signage.
• BJ’s members will have access to all the services provided at Verizon stores, including account look-up and bill pay.

Costco reported April 2008 net sales of USD5.54 billion for the four-week period ended May 4, 2008, a 12% increase over numbers reported for the same period last year.

• Comparable club sales (comps) rose 7% in the US and 14% internationally for a total company increase of 8%.
  • US comps benefitted from significant gas inflation (17% year-over-year); excluding this impact, US comps would have been 5%. Foreign exchange rates, especially in Canada, benefitted international comps; on a local currency basis, international comps would have risen 6%.
• Average transaction and traffic grew 4.5% and approximately 3.5%, respectively.
• Comps benefitted gasoline inflation and foreign exchange rates by 175 basis points (bp) and 160 bp, respectively; cannibalization negatively impacted comps 90 bp.
• Categories with the highest comps included, within food and sundries, deli, cooler, candy, and foods (high single-digit growth); within hardlines, automotive, office supplies, and health & beauty aids; majors posted a negative performance impacted by softer year-over-year television sales (as a result of both lower units and lower dollars), however strength was seen in navigational devices and digital cameras; within softlines, small appliances, and men’s and women’s apparel had strong performances; and within fresh foods, produce, service deli, and bakery led the way, however all fresh food areas were positive. Weaker comps were seen in tobacco, which accounted for approximately -35 bp of the comps decrease; within softlines, media, home furnishings, and jewelry performed weakly.
• Gas stations, optical, and food courts were the strongest performing ancillary businesses—particularly gas stations.
• On a regional basis, strength was seen in the Southeast, the Midwest, the Northeast, and Texas; California continues to lag compared to other US regions, however its April comps were up a couple percentage points compared to its year-to-date performance. Korean, Taiwan, and Japan were the strongest international markets.

Fiscal year-to-date sales for the 35 weeks ended May 4, 2008 were USD46.88 billion, a 12% increase over numbers reported for the same period in 2007.

• Comps rose 5% in the US and 17% internationally for a total company increase of 8%.

On May 8, 2008, the company operated 536 warehouses, including 392 in the US and Puerto Rico, 75 in Canada, 19 in the UK, 6 in Korea, 5 in Taiwan, 8 in Japan, and 31 through a joint venture in Mexico. 

• Costco plans to open an additional 12 to 13 new warehouses, including 5 relocations, by the end of its 2008 fiscal year on August 31, 2008.

CVS announced plans to phase out all toxic chemicals from its private label brands, an initiative enacted in tandem with the release of its first Corporate Social Responsibility report. The retailer will also prompt its manufacturing partners to come up with similar non-toxic alternatives.

Family Dollar reported sales for April 2008 of USD516 million, a 7.2% increase over numbers reported for April 2007. Results for April 2008 were positively impacted by the early Easter holiday, which fell in March this year and added one extra day of sales for the April four-week period.

For the four-week April 2008 period:

• Total sales were strongest in the consumables category. Weaker categories included apparel and home products.
• Comparable store sales (comps) increased 4.3% year-over-year.

For the year-to-date period, total sales decreased 0.2% year-over-year to USD4.7 billion. Comps decreased 0.5%.

For the May 2008 period, Family Dollar expects comps to increase 0% to 2%.

On May 3, 2008, Family Dollar operated 6,539 stores including 12 stores opened during the April 2008 period.

Home Depot announced store closings and changes to its store opening plan and capital expenditure budget.

• The retailer announced that it will close 15 underperforming US stores in Indiana, Kentucky, Louisiana, Minnesota, New Jersey, New York, North Dakota, Ohio, Vermont, and Wisconsin.
  • The retailer will incur a USD186 million charge including USD11 million in inventory markdowns and USD8 million in severance.
• Home Depot will not go forward with approximately 50 planned US stores currently in the pipeline.
  • The retailer will incur a charge of USD400 million due to ongoing obligations and other costs associated with these locations.
• Starting in FY 2009, the retailer plans to grow square footage by 1.5% per year.
• Home Depot will reduce new store capital spending by approximately USD1 billion from FY 2009 through FY 2011.

In FY 2008, Home Depot still plans to open 55 new stores, including 36 in the US. The capital expenditure budget for 2008 is USD2.3 billion, down from USD3.6 billion in FY 2007.

Kohl’s reported sales for the four-week period ended May 3, 2008 of USD1.227 billion, a 12% increase over numbers reported for the same period in 2007.

• Comparable store sales (comps) increased 3.5%.
• The categories posting the strongest performance were children’s and men’s; weaker sales were seen in home.
• Regions posting the strongest comps were the Northeast, the Midwest, and the mid-Atlantic.

For the combined March/April period, sales increased 0.4% to USD2.653 billion.

• Comps decreased 7.7%.

Q1 2008 sales grew 1.5% to USD3.624 billion.

• Comps decreased 6.7%.
• The strongest category during Q1 was accessories; weaker sales were seen in home.
• On a regional basis, the Northeast led the company.

On May 8, 2008, Kohl’s operated 957 stores in 47 states.

Kroger announced plans to expand its tax refund and economic stimulus bonus program. The retailer will now offer a 10% bonus to any shopper with a loyalty card who purchases a Kroger gift card for a minimum of USD300. Those shoppers loading USD300 will receive an extra USD30, USD600 will receive an extra USD60, and USD1,200 will receive an extra USD120.

Previously, Kroger had announced a similar program that allowed shoppers to receive a 10% bonus if they converted their economic stimulus check to a Kroger gift card. The expanded program allows shoppers who were not eligible for stimulus payments to participate in the program.

OfficeMax announced it has partnered with TerraCycle to offer seven new TerraCycle products.

• The new environmentally preferable products from TerraCycle that OfficeMax will sell include binders, pencil cases, trash cans, and cleaners for kids and adults.
• TerraCycle is an eco-capitalist company that manufactures and packages products entirely from waste to reduce the amount of garbage that ends up in landfills.
• The new line at OfficeMax will be TerraCycle’s first line of office products.