Best Buy announced this week it is reorganizing around a regional structure and has named a new leadership team (Figure 1). The new team will oversee operations in the Americas, Europe, and Asia, effective Monday, March 1, 2010. Most of the changes are in title only; the only new hire is Carol Surface from PepsiCo International who was named last week as Best Buy’s Chief Human Resources Officer.

Changes include:

• Shari Ballard and Mike Vitelli will jointly lead the Americas region as President, Americas, with Ballard assuming oversight of Mexico and Vitelli assuming oversight of Canada.
  • Both executives will keep their current US responsibilities despite their added roles. Ballard is now executive vice president of retail channel management, while Vitelli is executive vice president of customer operating groups.
• Scott Wheway, CEO of Best Buy Europe, will continue to lead Best Buy's joint venture with Carphone Warehouse.
• Kal Patel will lead Best Buy's businesses in Turkey and China as President, Asia.
  • Patel is currently executive vice president of emerging businesses and will retain those duties.
• Sean Skelly, who most recently served as president of Best Buy's international retail operations, will now help build out the company's global Web strategy.

Figure 1: Best Buy Regional Executive Leadership

Source: Kantar Retail research, company reports

Big Lots has released its Q4 and Full Year 2009 results for the period ended January 30, 2010. Highlights include:

Q4 2009

• Sales increased 7.0% to USD 1.46 billion.
• Same store sales increased 5.1% over the prior period.
• Gross margin increased 90 bp to 41.3% of sales.
• SGA as a percentage of sales fell 70 bp to 28.5%.
• Operating profit increased 190 bp to 11.6% of sales.

FY 2009

• Sales increased 0.7% to USD 4.73 billion.
• Same store sales increased 1.8% over the prior period.
• Gross margin increased 60 bp to 40.6% of sales.
• SGA as a percentage of sales fell 40 bp to 32.4%.
• Operating profit increased 140 bp to 6.9% of sales.
• Opened 52 new stores during the year for a total of 1,361 locations.

Big Lots stated it plans on having 1,500 stores by the end of 2012.

BJ’s reported sales of USD 755.2 million for the four-week period ended February 27, 2010, a 12.8% increase over numbers reported for February 2009. 

• Excluding gas, comparable club sales (comps) grew 3.9%; gasoline sales would have otherwise benefitted comps 360 basis points (bp).  
• Comps increased in all regions, the greatest of which were the Southeast and upstate New York regions; the mid-Atlantic and metro New York posted the smallest comps gain.
• Excluding gasoline, traffic increased approximately 3%; average transaction grew approximately 1%.
• Food sales increased approximately 7%, while general merchandise sales declined 1%.  
• Strong comps were seen in bakery, breakfast foods, cigarettes, computers, dairy, deli, frozen foods, furniture, housewares, juices, produce, small appliances, and snacks.
• Weaker performances were seen in books, household chemicals, DVDs, televisions, and trash bags.

On March 4, 2010, BJ's operated 187 warehouse clubs in 15 US states.

BJ’s reported results for its Q4 2009 period, including a sales increase of 9.4% to USD 2.74 billion.

• Comparable store sales (comps) grew 4.6%, including a positive contribution from gas sales of 230 basis points (bp).

For the fiscal 2009 period, sales increased 1.6% to USD 9.95 billion.

• Comps decreased 1.9%, including a negative contribution from the sale of gasoline of 560 bp.
  • Excluding the impact of gas, comps would have increased by 4%.

The retailer currently operates 187 BJ's Wholesale clubs in 15 US states.

Costco reported sales of USD 5.61 billion for the four-week period ended February 28, 2010, up 11% from the same four-week period a year ago.

• Comparable club sales (comps) were up 5% in the US and 26% internationally, for a total company increase of 9%.
  • Excluding foreign currencies and gas inflation, comps would have increased 2% in the US and 10% internationally for a total company increase of 4%.
• Average transaction size was up 5%, while traffic was up 4%.
• In the US, the strongest performing regions were the Midwest and Southeast, followed by the Northwest. California improved slightly. The weakest regions were the Northeast due in part to snow.
• Internationally, Canada increased in the high single-digits in local currency; the remainder of the countries posted, on average, mid-teen comp gains.

On March 3, 2010, Costco operated 413 warehouses in the US and Puerto Rico, 77 in Canada, 21 in the UK, 7 in Korea, 6 in Taiwan, 9 in Japan, 32 in Mexico, and 1 in Australia.

Costco reported results for its twelve-week second quarter including sales of USD 18.36 billion, an 11% increase over results reported for the comparable period in 2009.

• Comparable store sale (comps) grew 5% in the US and 26% internationally, for a total company increase of 9%.
  • Excluding the benefits of gas inflation and foreign currency strength, comps would have grown 2% in the US and 10% internationally, for a total company increase of 3%.
• Net income increased 25% to USD 299 million.

Net sales for the first half of fiscal 2010 grew 8% to USD 35.28 billion.

• Comps grew 3% in the US and 19% internationally, for a total company increase of 6%.
  • Excluding the benefits of gas inflation and foreign currency strength, comps would have grown 2% in the US and 9% internationally, for a total company increase of 3%.
• Net income increased 13% USD 565 million.

On March 3, 2010, Costco operated 566 warehouses, including 413 in the United States and Puerto Rico, 77 in Canada, 21 in the United Kingdom, 7 in Korea, 6 in Taiwan, 9 in Japan, 1 in Australia and 32 in Mexico.

In collaboration with several universities, CVS Caremark is developing research to understand consumers’ adherence to prescriptions and medication selection from a behavioral economics and social marketing perspective. This effort, called the Behavior Change Research Partnership, is led by academics at Carnegie Mellon, Dartmouth University, and the University of Pennsylvania. Its goal is to help consumers make healthful choices by developing more sophisticated communication, incentives, and educational material.

Family Dollar reported preliminary results for the second quarter 2010 ended February 27, 2010.

• Net sales increased 4.9% to USD 2.09 billion.
• Comps increased 3.6% over the prior period.
• Opened 43 stores in the quarter for a total of 6,689 stores at the end of the period.
• Strong results reported in Seasonal, Home, and Consumable categories.

Family Dollar will report full Q2 2010 results on April 7, 2010.

Kohl’s reported sales for the four-week period ended February 27, 2010 of USD 1.084 billion, a 7.8% increase over numbers reported for the same period in 2009.

• Comparable store sales (comps) increased 3.7%.
• The West and the Southeast were the strongest performing regions.
• The categories posting the strongest comps were home and accessories.

On February 27, 2010, Kohl’s operated 1,058 stores in 49 states.

The “Health Matters at Kroger” initiative is currently being tested at 23 stores in central Kentucky. The initiative consists of several components:

• A shelf tag system based on the NuVal program, which uses a proprietary algorithm to rate items on a 1-100 scale according to their nutritional value.
• A health station that allows shoppers to check such health indicators as blood exygen, blood pressure, body mass index, pulse, and weight. Shoppers can track their progress at a dedicated website as well.
• Store tours conducted by registered dieticians.
• Monthly events such as “Healthier Meal Maker” and “Cruising the Aisles with Kroger” to educate shoppers.

Publix has announced its earnings results for the fourth quarter and full fiscal year ended on December 26, 2009.

Q4 2009 Results

• Overall sales were USD 6.1 billion, an increase of 1.0%.
• Comparable store (comps) sales decreased 2.5%.
• Net income increased 14.1% to USD 284.2 million.

FY 2009 Results

• Overall sales increased 1.6% to USD 24.3 billion.
• Comps increased 3.2%.
• Net income was USD 1.2 billion, a 6.6% increase over 2008.
• Gross profit as a percentage of sales grew to 27.7%, up from 26.9% in 2008.
• Operating and administrative (O&A) expenses as a percentage of sales was 21.6%, up from 21.1% in 2008.

Publix operates 1,014 supermarkets in Alabama, Florida, Georgia, South Carolina, and Tennessee.

Rite Aid reported a 2.4% decrease in total drugstore sales to USD 25.6 for the fiscal year ended February 27, 2010. Comparable store sales (comps) fell 0.9%, with front end comps declining 2.9% and pharmacy comps increasing 0.1%. Prescription revenue comprised 67.9% of total drugstore sales, and third-party prescription revenue was 96.2% of pharmacy sales.

For the five weeks ended February 27, 2010, Rite Aid reported total drugstore sales of USD 2.4 billion, a 4.5% decrease over last year.

Additional results for the period:

• Same store sales decreased 3.2% in February.
• Front-end same store sales and pharmacy same store sales each decreased 3.2% in the period. New generic introductions negatively impacted pharmacy same store sales by 206 basis points (bp).
• Comp store prescriptions filled declined 3.4% over this period last year.
• Prescription revenue was 67.9% of total sales; third-party prescription sales were 95.8% of pharmacy sales.

For the fourth quarter ended February 27, 2010, Rite Aid reported total sales decreased 3.7% year-over-year to USD 6.4 billion.

Additional results for the quarter:

• Same store sales decreased 2.4%.
• Front-end same store sales decreased 2.6%.
• Pharmacy same store sales increased 2.4%.
• Comp store prescriptions filled fell 1.7% versus this period last year.
• Prescription revenue was 66.6% of total sales; third-party prescription sales were 96.0% of pharmacy sales.

As of February 27, 2010, Rite Aid operated 4,780 stores compared to 4,901 stores in the prior-year period. Further details on the retailer’s fourth quarter and fiscal year results are to be released April 1, 2010.

From March 1 to April 24, 2010, Rite Aid will host a chainwide drawing for eight winners to receive a year’s worth of free gas, valued at USD 2,600. Customers enter by transferring their prescriptions to Rite Aid. In addition, each prescription transferred with a select coupon will receive a USD 25 Rite Aid gift card.

Safeway has announced its membership with The Sustainability Consortium, the first US grocery retailer to do so. The Consortium researches the lifecycles of various grocery items to develop new strategies and processes with the goal of creating a more sustainable supply chain. Safeway will utilize the findings to develop its supply chain policy and support sustainable purchasing and manufacturing practices.

Sam’s Club has added a 2008 Spanish red wine, called Infinite, to its private label roster (pictured below). It will sell for about USD 8 a bottle. This blended Tempranillo and Cabernet Sauvignon wine is made by Bodegas Torres. The winery is on The Drinks Business’ “Green List” for its sustainability efforts around reducing CO₂ emissions and environmental awareness promotions.

Source: Samsclub.com

Sears Holdings has opened a new apparel office in San Francisco, California. This office will include merchandising positions across the Sears and Kmart apparel formats. 

Supervalu has debuted its WholeCare Pet line of private label pet food and supplies. The assortment comprises approximately 100 SKUs and provides savings of approximately 15%-30% over comparable branded items while offering equal or superior quality. An integrated marketing campaign consisting of in-store, circular-based, and direct mail advertising is accompanying the launch.

The Whole Care Pet line replaces Supervalu’s existing private label pet product lines, Happy Trails and NutriPlan, and joins the retailer’s array of existing private label brands including Baby Basics, Culinary Circle, Equaline, Homelife, Java Delight, Shoppers Value, Stockman & Dakota, Stone Ridge Creamery, and Wild Harvest.

Formerly known as “C2,” Target has renamed its largest corporate office in India to the “Gregg W. Steinhafel Center.”

• According to Lalit Ahuja, Target India President, this move was made to underscore Target’s commitment in its Indian operations.

There are 2,100 members of the Target India team.

In a month-long promotion, Walmart.com is offering discounts on 500 of its traditional and contemporary children’s books. Prices will go as low as USD 3, including complimentary shipping. The promotion’s announcement is timed with the National Education Association’s Read Across America Day.