Thu, Sep. 15, 9:02 AM
- Retail sales fell in August on a month-over-month comparison. The drop wasn't a large surprise considering the onslaught of warnings from the retail sector on store traffic.
- 8 out of the 13 retail categories showed negative growth during the month, with the largest drops recorded in the building material/garden equipment/supplies dealers and miscellaneous store retailers categories. The broad weakness turned on its head the argument that money freed up from a lower level of auto sales would be funneled into other consumer purchases.
- Food services and drinking places showed a +0.9% M/M and +5.8% Y/Y increase in a somewhat surprising result considering the harsh read from Black Box Intelligence on August same-store sales in the restaurant sector BITE. Is the discrepancy an indication that independent restaurants are taking market share?
- On a year-over-year basis, retail sales were up 1.9%. As expected the Amazon-influenced nonstore retailers category did the heavy lifting with an 11% gain. Larger U.S. retail chains (WMT, SPLS, TGT, BBY, DG, COST, KR, WBA, CVS, LOW, HD, SWY) have been raising the issue of pricing pressure in recent conference presentations and guidance updates which could be a nagging sales deflator for the balance of the year.
- Previously: Retail sales disappoint in August (Sept. 15)
- Retail ETFs: XLP, XLY, VDC, XRT, VCR, RTH, RETL, FXG, PBJ, IYK, FXD, IYC, RHS, FDIS, PEJ, FSTA, PSL, SCC, RCD, UCC, PEZ, PMR, PSCC, UGE, PSCD, SZK, BITE, CNDF, CNSF, IBUY, JHMC, JHMS.
Nov. 11, 2015, 8:59 AM
- Grocer Safeway's (NYSE:SWY) much-ballyhooed initiative to build medical clinics in its supermarkets in which they would offer blood tests by diagnostics upstart Theranos is apparently DOA. The clinics, numbering about 800 and costing $350M to set up, are now used primarily for delivering flu shots and travel-related vaccines after Theranos kept delaying the roll-out of its tests and backed away from its plan to place its analyzers in each clinic, opting instead to ship the blood samples to a central location for testing.
- Safeway's interest in providing wellness services was driven by then-CEO Steven Burd who retired in 2013. The plan was to establish upscale clinics in stores that would house Theranos' analyzers which would provide rapid test results from finger-stick samples.
- The initial phase of the project ran into difficultly when comparative blood testing was performed at the headquarters clinic. Both finger stick and venous samples were taken from employee volunteers which gave them the impression that the finger stick samples were a work in progress. Not helping matters was a male volunteer who received a PSA result that indicated the presence of prostate cancer but came back normal when retested by another lab.
- The project has been dormant for more than a year. CEO Elizabeth Holmes has ceased interacting with Safeway executives and has delegated the management of the relationship to President and COO Sunny Balwani.
- Theranos' deal with Walgreens Boots Alliance (NASDAQ:WBA) to establish blood-testing centers in its stores is on hold (41 current locations) until questions about its technology are answered.
- Previously: Walgreens halts openings of new Theranos centers (Oct. 24)
- Previously: Theranos chief Holmes says technology sound (Oct. 21)
May 14, 2015, 9:47 PM
- Consolidation in the grocery industry could pick up even more, observes Supermarket News.
- A large merger between Albertsons and Safeway (NYSE:SWY) has been followed by talks between Delhaize (NYSE:DEG) and Ahold (OTCQX:AHONY).
- The increased push by Wal-Mart and Target in the sector has added pressure to leverage store growth through M&A.
- "There is mounting pressure in the supermarket industry to consolidate operations to drive better purchasing power and leverage distribution and technology platforms," notes Wolfe Research.
- Kroger (NYSE:KR) is seen as a likely candidate to look for a chain to acquire.
- Previously: Ahold, Delhaize confirm merger talks (May 12)
- Grocery stocks: RNDY, SVU, VLGEA, WFM, CASY, IMKTA, OTCPK:PUSH, TFM, SFM, WMK.
Jan. 30, 2015, 9:09 AM
- Safeway (NYSE:SWY) and Albertsons complete their merger after working out a deal with the FTC to divest stores.
- The combination of the two chains created a network of 2,230 stores and 27 distribution facilities in the U.S.
- Safeway shareholders will receive $34.92 in cash consisting of funds from the acquisition by Cerberus, real estate asset sales, and dividends.
- Shares of SWY will no longer trade on the NYSE.
- Previously: Safeway and Albertsons work out deal with FTC (Jan. 27 2015)
Jan. 27, 2015, 2:07 PM
- The FTC approved the merger between Safeway (SWY +0.4%) and Albertsons after the companies agreed to shed 168 stores.
- The local markets impacted by the store sales are in Texas, Arizona, California, Montana, Nevada, Washington, Oregon, and Wyoming.
- Buyers for the stores have already been lined up, led by private Haggen Holdings which will snap up 146 Albertsons and Safeway outlets.
Jan. 21, 2015, 7:37 AM
- Grocery store chains stand to lose from the decision by the Supreme Court to reject a case on the swipe fee cap, according to analysts.
- Almost 70% of purchases in grocery stores are paid for by consumers with credit or debit cards.
- Operating margins in the industry tend to be very low.
- In some cases, the interchange fee which goes to the processing bank is higher than the profit margin on the grocery item.
- Trade groups repping the grocery industry wanted a cap of $0.07-$0.12, instead of the $0.21 approved by the Fed.
- Previously: Supreme Court passes on looking at swipe fees cap (Jan. 20 2015)
- Grocery store stocks: IMKTA, NGVC, TFM, SFM, SWY, DEG, SFS, WFM, SVU, KR, CASY, WMK, VLGEA.
Jan. 9, 2015, 8:35 AM
- The House passed a bill to redefine a full-time worker under the Affordable Care Act to 40 hours a week from 30 hours.
- The legislation could impact millions of workers as companies adjust hours and employee policies around the issue.
- The measure was passed by a vote total of 252-172.
- Senate Majority Leader Mitch McConnell has indicated the bill will see a vote in his chamber.
- The White House has threatened to veto the bill on its view it will reduce the number of workers covered by healthcare.
- Most industry groups within the restaurant and food industry have issued support for the legislation.
- Related stocks: CAKE, CBRL, CMG, DNKN, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, BDL, NATH, LUB, QSR, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN, CASY, IMKTA, SFS, KR, WMK, SVU, WFM, SWY, VLGEA, TFM,NGVC, BIG, ZU, TUES, WMT, PSMT, COST, TGT, DLTR, BURL, FDO, DG, FRED, WBA, RAD, CVS, HABT, NDLS, PBPB.
Dec. 22, 2014, 1:48 PM
- The breakdown of stores to be divested by Safeway (SWY +0.6%) and Albertsons leans to the Albertsons side.
- 111 Albertsons outlets are scheduled to be sold and 57 Safeway-owned stores (Safeway, Tom Thumb, Vons) will be unloaded.
- Analysts think the level of store reductions will be enough to satisfy regulators.
- Previously: Safeway, Albertsons to sell 168 stores to gain antitrust approval for merger (Dec. 20, 2014)
Dec. 20, 2014, 9:05 AM
- Safeway (NYSE:SWY) and Albertsons have agreed to sell 168 stores across eight states, mostly in the western U.S., in a bid to gain merger approval from U.S. antitrust regulators.
- The companies, which together own ~2,400 stores, say they expect the buyers to hire most, if not all existing store workers.
- The biggest beneficiary of the deal appears to be the Haggen chain, which is purchasing 146 stores and adding ~$750M in sales.
Dec. 15, 2014, 9:10 AM
- Safeway (NYSE:SWY) declares $0.23/share quarterly dividend, in line with previous.
- Forward yield 2.66%
- Payable Jan. 2; for shareholders of record Dec. 26; ex-div Dec. 23.
Dec. 6, 2014, 10:24 AM
- Grocery delivery upstart Instacart is raising $100M from new and old investors at a pricing which gives the company a $2B valuation and plenty of cash to fund expansion.
- Sequoia Capital and Andreessen Horowitz have added to their original investments, reports Re/code.
- Instacart, which was started by a former Amazon supply chain engineer, delivers groceries from participating stores to consumers in larger markets within an hour.
- Major retail chains such as Whole Foods Markets (NASDAQ:WFM), Kroger (NYSE:KR), and Costco (NASDAQ:COST) are participating in Instacart's expansion - perhaps playing a little defense against Amazon Fresh (NASDAQ:AMZN) which also has growth plans.
- What to watch: Instacart's simple business model of a personal shopper army and vibrant website contrasts sharply with the distribution/branding might of Amazon Fresh (AMZN), but could end up in the same razor-thin margin predicament ($5.99 for one-hour delivery?). Meanwhile, old-school Kroger (KR) has recorded 44 straight quarters of positive comps and just raised its full-year profit guidance off of solid store execution.
- Related grocery stocks: SVU, SWY, RNDY, SFM, OTCQB:PUSH, TFM, WMT.
Oct. 28, 2014, 11:32 AM
- Redbook notes the timing of Halloween on a Friday is giving a boost to merchandise sales related to the holiday as more consumers prep for parties and celebrations.
- Both Redbook and ICSC's weekly read on retail store sales showed year-over-year improvement with Halloween sales a factor.
- Stores have also been extending their hours to draw in more shoppers.
- Looking for a Halloween boost: DLTR, DG, FDO, KR, SVU, SWY, WMT, TGT, HSY, KRFT, CVS, RAD, WAG, MDLZ.
Oct. 15, 2014, 6:44 AM
- Safeway (NYSE:SWY): Q3 EPS of -$0.09 may not be comparable to consensus of $0.16.
- Revenue of $8.31B (+2.7% Y/Y) misses by $140M.
Oct. 6, 2014, 7:57 AM| Oct. 6, 2014, 7:57 AM | 25 Comments
Sep. 23, 2014, 8:10 AM
- Halloween spending by consumers in the U.S. is expected to rise to $11.3B this year, according to an estimate from ICSC.
- Discount stores (DG, DLTR, FDO) and grocery stores (KR, SVU, SWY, WMT, TGT) are expected to keep a lion's share of the costume spend with shoppers indicating price and the ability to touch costumes as the biggest factors in deciding where to shop.
- Halloween is one of the few calendar events where online has stayed more of a bit player with only an estimated 7% share of purchases.
Sep. 22, 2014, 7:50 AM
- Safeway (NYSE:SWY) announces it's soliciting consent for holders of senior notes due in 2016, 2017, and 2019 for a proposed amendment relating to the bonds.
- The company wants to strike the obligation to purchase the bonds after closing its merger with Albertson's.
- A consent fee would be paid to holders under the proposed amendment.