Today, 8:03 AM
- A light bulb has gone off with some large retail chains such as Wal-Mart (NYSE:WMT) and TJX Companies (NYSE:TJX) which have hiked low-level wages in order to improve employee retention rates.
- The math as compiled by Bloomberg is pretty compelling: The average retail sales worker makes $21,140 a year, while it costs $3,400 in training costs to replace them. At a high turnover rate it becomes more economical to lift wages.
- The development is interesting to economists pondering the future impact of Wal-Mart's (10% of all retail sales in the U.S.) new wage structure on U.S. unemployment rates.
- Related stocks: YUM, MCD, KR, TGT, SHLD, HD, WBA, LOW, GPS, JCP, BLMN.
Yesterday, 12:44 PM
- Strong reports from Kroger and Delhaize are helping to provide a lift for the grocery store sector.
- Earlier this week, privately-owned Publix reported comparable-store sales rose 6.4% in Q4.
- Comps are on the rise and margin gains are being squeezed out by operators off of the sales leverage.
- Solid gains for the day on strong volume are being seen up and down the group: Kroger (NYSE:KR) +4.9%, Whole Foods Market (NASDAQ:WFM) +1.6%, Supervalu (NYSE:SVU) +1.5%, Delhaize (NYSE:DEG) +3.7%, The Fresh Market (NASDAQ:TFM) +1.2%, Ingles Markets (NASDAQ:IMKTA) +2.3%, Fairway Group (NASDAQ:FWM) +2.6%, Roundy's (NYSE:RNDY) +14.9%.
Yesterday, 12:03 PM
- Kroger (KR +5.2%) jets higher on strong volume after another powerful earnings report.
- The company reported identical-supermarket sales rose by 6% (ex-fuel) during the quarter.
- Key acquisitions Harris Teeter and Vitacost also paid off.
- Kroger sees identical-supermarket sales growth of 3% to 4% next year.
- Victory lap: The death-by-Walmart argument that was thrown around on Kroger a few years ago appears to be soundly defeated.
- Shares of Kroger hit an all-time high of $74.32 earlier today.
- Previously: Kroger beats by $0.14, beats on revenue
Yesterday, 9:15 AM
Yesterday, 8:42 AM
Wed, Mar. 4, 5:30 PM
Fri, Feb. 13, 11:31 AM
- Dennis Ruhl of the JPMorgan Intrepid Value fund sees some potential bargains hatching in the slumping energy sector, and he particularly favors ConocoPhillips (NYSE:COP).
- Ruhl says COP looks better than its energy peers from a momentum standpoint, and likes that the company was one of the first to cut capex in response to the collapse in energy prices and has done so aggressively.
- COP trades at just 1.5x book value vs. the energy sector average of 1.8x and the S&P 500's 2.8x; the stock boasts a 4.3% dividend yield, which Ruhl believes is safe.
- The fund manager's other four favorite value picks are ANTM, NOC, HPQ and KR.
Fri, Jan. 30, 3:26 PM
- Products from PepsiCo (PEP -2.1%) will be on full display this Super Bowl Sunday - before, during, and after the mammoth TV event.
- The company plans to run 11 Mountain Dew Kickstart spots during the extended SB pre-game show.
- Doritos and Gatorade will have their usual high-visibility presence, while Tostitos gets its introduction to the spectacle.
- A lead-in commercial just before the Pepsi-sponsored halftime show has a chance to be one of the most watch commercials of the game.
- In an appeal to millennials, the company is running a student cooking competition using PepsiCo products and unloading massive marketing efforts around the crowdsourced Crash the Super Bowl competition.
- One group that doesn't mind the significant efforts of PepsiCo to generate Super Bowl buzz is C-stores (KR, CASY, PTRY, OTCPK:ANCUF, CST, MUSA).
- Traffic to C-stores this weekend is forecast to be up over 8% Y/Y.
- Mountain Dew Kickstart Ad
- PepsiCo Super Bowl teaser ad
Wed, Jan. 21, 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.
Fri, Jan. 16, 1:51 PM
Fri, Jan. 9, 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.
Tue, Jan. 6, 4:16 PM
- GasBuddy.com projects gas prices will average $2.64 per gallon in 2015.
- Most economists see a boost in U.S. retail spending from the gas savings with the exception of regions highly dependent upon the energy industry.
- While some Q4 reports from restaurant chains and retailers may show a marginal lift in sales due to the drop in gas prices, insiders think quantifying the impact will be more art than science.
- The following sub-sectors have been tapped by analysts as potential under-the-radar beneficiaries of the gas price effect.
- C-stores:KR, CASY, PTRY, OTCPK:ANCUF, CST, MUSA.
- Theme parks: SIX, FUN, DIS, CMCSA, PLAY.
- Beverages: KO, PEP, COT, DPS, BUD, SAM, BREW, TAP, MNST.
Fri, Jan. 2, 11:26 AM
Dec. 11, 2014, 9:30 AM
- Retail sales struck their biggest gain since March on broad strength.
- What's working: Strong growth was seen in auto parts (PBY, ORLY, AZO, AAP, MNRO) with the broad parts category showing year-over-year sale growth of over 8% in November. Sales were up 6.8% Y/Y for health and personal care stores (ULTA, SBH, CVS, WAG, RAD) during the month.
- What's not working: Department stores (DDS, M, SSI, BONT, SHLD, JCP, KSS, JWN) went backwards with sales off 1.1% from a year ago. No surprise, but sales at gas stations (CASY, KR, PTRY) also fell off from a year ago.
- Retail ETFs: XLY, XRT, VCR, RTH, RETL, IYK, FXD, IYC, FDIS, SCC, UCC, PMR, UGE, RCD, SZK.
Dec. 10, 2014, 10:22 AM
- The S&P 500 Retail ETF (NYSEARCA:XRT) is up 0.3% today despite the negative action in the broader market.
- A forecast for sustained lower oil prices is the major reason for the upswing.
- Top 20 XRT holdings showing gains: Limited Brands (LB +0.6%), Whole Foods Markets (WFM +0.4%), Casey's General Stores (CASY +0.3%), Ross Stores (ROST +0.7%), Kroger (KR +0.9%), Advance Auto Parts (AAP +0.4%), Target (TGT +0.4%), Zumiez (ZUMZ +0.3%), CST Brands (CST +1.3%).
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.
KR vs. ETF Alternatives
Kroger Co operates retail food and drug stores, multi-department stores, jewelry stores, and convenience stores throughout the United States. It also manufactures and processes some of the food for sale in its supermarkets.
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