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BulldogCarlos

BulldogCarlos
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  • Steady And Disappointing - July Jobs [View article]
    I agree with your assessment about how a weak labor market is adversely affecting the economy and creating structural problems. Add to that the investments in tech companies that effectively cannibalize jobs from the "old economy" by making these mature industries more "efficient" (read: fewer workers). Sure, the Fed is still looking to combat deflation with low interest rates, but too much of that money is being squandered on stock buybacks and other non-productive pursuits relative to creating jobs and growing our economy.
    Aug 2 06:14 PM | 1 Like Like |Link to Comment
  • Family Dollar/Dollar Tree Combination Still Too Small To Survive [View article]
    You fail to factor in the breadth and convenience factors that this consolidation creates. 13,000 stores--the largest footprint among the discount chain. And I don't believe it's sustainable for Amazon to ship a box of pencils or a bottle of shampoo to its Amazon Prime clientele. That's where these smaller dollar stores shine; they're in the neighborhood and they're cheap.

    From a secular standpoint, discount retailers will shine because wage growth is stagnant and disposable income is nill. The Target and Walgreen folks will continue to trade down to the dollar alternatives.

    Lastly, and unfortunately, many poor customers DON'T compare prices and bargain shop. They buy stuff from the closest place because they have to walk or bus there, another advantage from that large footprint.
    Aug 1 02:24 PM | Likes Like |Link to Comment
  • Ensign Group's Model Still Works [View article]
    Methinks the recent run-up in price is related to the Veterans Administration scandal, that the market sees Ensign as a beneficiary of more business as the federal government rushes to provide immediate attention to the affected veterans.
    May 30 11:00 AM | Likes Like |Link to Comment
  • Stepping-down retail trend appears to be in action [View news story]
    As I've commented in the past, consumers don't have much discretionary income, so look for the dollar stores to stay strong. The days of feeling flush and bypassing K-Mart for JC Penneys (or Macy's if you were really high on the hog) are over. Same phenomenon with dining. Just had a well-regarded, high-end steak house convert to a "tavern" concept that offers cheaper eats. And this is in Marin County, one of the richest counties in the United States!!!
    Aug 20 05:26 PM | Likes Like |Link to Comment
  • More on June Retail Sales: Strength in autos buoys the June number while demand for building materials & garden equipment (HD, LOW, WMT), as well as sales at grocery stores (KR, SVU, SWY) and restaurants looks weak. As Bloomberg notes, receipts at restaurants and bars had their worst drop in more than five years. [View news story]
    As I've noted with the dollar stores, I believe the problem is wage stagnation. Consumer discretionary, including the restaurant and bar tabs, is getting squeezed big time. Another culprit is health insurance. Damned if you do, damned if you don't. And, of course, union membership is dwindling, so workers have little chance of extracting more dollars from their employers. I think a deflationary cycle is in our midst.
    Jul 15 08:42 PM | Likes Like |Link to Comment
  • The dollar store conundrum: Though Family Dollar's (FDO) FQ3 earnings report and guidance came in slightly above expectations, the numbers highlighted a disturbing trend for the sector (DG, DLTR, FIVE) with lower-margin consumables sales growing while higher-margin discretionary sales fall. [View news story]
    Discretionary is getting dinged by low (no) wage inflation. Look for the dollar stores to benefit when shoppers trade down from the supermarkets and buy more of their consumables at the dollar-store alternatives. Also: Don't forget office supplies! Lots of mom and pop businesses eschewing Staples and Office Depot for dollar-store bargains. I'm still quite bullish on this sector.
    Jul 10 03:38 PM | Likes Like |Link to Comment
  • Retail watch: Walgreen's (WAG -7%) FQ3 earnings report may have tipped off a disturbing industry trend, according to analysts. Front-end sales dropped 3.9% during the quarter as the pattern of soft traffic for the drugstore sector (RAD, CVS) continues. Though the dollar store group (DLTR, DG, FDO) has been a competitive threat for items such as toiletries and greeting cards, it's the grocery sector (SWY, KR, SVU) which may taken the bigger slice of the consumables pie. [View news story]
    Walgreen's and CVS are too expensive compared to the Dollar Stores. Look for ones like Dollar Tree, with its foray into food, to attract budget-constrained shoppers. Stagnant wages will keep this company a player for some time...
    Jun 25 09:25 PM | Likes Like |Link to Comment
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