Industry News & Expert Views

Home Depot Posts Big Sales Gains, but No Guidance, Spooking Investors

By Sheridan Fifer

Home Depot posted another stellar quarter, sharing the welcome news with investors that revenue grew by almost $22 billion; however, the home improvement retailer declined to issue guidance on the year ahead. The reason: too many wild cards. Home Depot president Ted Decker cited the pandemic, vaccine distribution, fiscal policy, and the economy as factors that will boost or damage consumer spending in ways the retailer can't foresee. The lack of guidance caused shares to fall in price as investors questioned whether Home Depot can keep what it has won once the pandemic is over. But CEO Craig Menear sounded a note of optimism, pointing to the huge gains Home Depot has made this year. 

“For context, it took us 19 years as a company to achieve the first $20 billion in total sales, and we outgrew that in this year alone,” Home Depot CEO Craig Menear told analysts during an earnings call shortly after 9am.

Read the full story at Quartz.

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Macy's Sees First Profit Since Pandemic Began

By Sheridan Fifer

For the first time since the beginning of the coronavirus pandemic, Macy's has turned a profit. True, it wasn't spectacular, and compared to last year's figures, it appears downright dismal, but it is a sign of recovery for the retailer as it emerges from the huge losses inflicted by mass store closings and changed shopper habits. Macy's made $160 million in the 13 weeks ending January 30. During the same period a year ago, it made $340 million. But it was enough to beat Wall Street's expectations. For Macy's, it seems, the worst may be behind it. 

Neil Saunders, managing director at GlobalData Retail, said in a note to clients that the results were a "marked improvement" and show that Macy's is "slowly climbing its way out of the depths."

Read the full story at CNN Business.

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Lowe's Prepares for Weakened Demand Post-Pandemic

By Sheridan Fifer

While Lowe's ranks among the pandemic's retail winners, the home improvement retailer isn't betting on do-it-yourself, stay-at-home trends to continue indefinitely. Instead, CEO Marvin Ellison points to the retailer's turnaround strategy, whose implementation was in full swing when the pandemic struck. The initiatives included a redesigned website, improvements to stores, and supply chain investments. The gains Lowe's has made in the last year are a reflection of those efforts, and not just of Lowe's essential retailer status or of homebound consumers looking for a project, according to Ellison. And Lowe's has a plan to capitalize on those gains with or without the shopping trends and consumer habits created by the pandemic. 

“We believe that 2020 was not an anomaly,” he said, adding that it plans to gain market share even as the pandemic wanes.

Read the full story at CNBC.

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Instacart Expands Beyond Groceries

By Sheridan Fifer

As Instacart builds on its pandemic gains, the delivery company is striking new deals to expand beyond grocery. The latest is a partnership with Walgreens for same-day delivery of over-the-counter medications, beauty products, and more from the drugstore chain. Instacart will begin delivering orders from Walgreens stores in Illinois before expanding its service to nearly 8,000 Walgreens stores across the country. 

With the shift to online shopping accelerated by the pandemic, Instacart has found itself in higher demand than ever. Accordingly, the delivery company has added hundreds of thousands of new workers, continued to add retail partners, and diversified its service to offer delivery of more than just groceries. 

Instacart is competing against Amazon and other delivery platforms like Postmates, DoorDash and Shipt, which is owned by Target. Teaming up with Walgreens helps Instacart continue to try to become an alternative to Amazon.

Read the full story at CNN Business.

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Walmart Reportedly Slows the Pace of Expansion Into Healthcare

By Sheridan Fifer

In 2018, Walmart had a plan for a $3 billion net investment in healthcare clinics, which would number 4,000 by the year 2029. The plan had strong backing in the person of Greg Foran, formerly Walmart's U.S. CEO. He left the retailer in 2019. Now, Walmart is reportedly reassessing the ambitious pace of its healthcare expansion. The retailer currently operates 20 clinics, with at least 15 more planned for the year 2021. The complexity of the industry and the demands of a global pandemic may be causing Walmart to rethink the scope of its commitment. According to Insider, the decelerated push into healthcare comes as a relief to some of Walmart's team members even as it frustrates others. 

Walmart didn't comment on whether the rollout was slowing, but said it continued to "experiment" with Walmart Health centers and that the pandemic had reaffirmed its commitment to healthcare.

Read the full story at Insider.

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Amazon Tries Its Hand at Crowdfunding

By Sheridan Fifer

Amazon introduced its own crowdfunding platform last week, and a few days later, it already looks like a success. Build It is a Kickstarter-type platform for potential Amazon products. Amazon debuts a concept that will only be built and sold if it garners enough support in the form of preorders within thirty days. The first of these products was an Alexa-connected Smart Sticky Note Printer. Just three days after Amazon introduced it for preorder, the printer met its goal. The Smart Sticky Note Printer will begin shipping to those who preordered it at the special Build It price sometime between July and September. Two other potential products are also currently up for funding on Build It: the Smart Nutrition Scale and the Smart Cuckoo Clock. 

Three days in, Amazon’s bet to piggy-back on the hype of crowdfunding campaigns appears to be working.

Read the full story at GeekWire.

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Consumers' Expectation of Fast, Free Shipping Puts Pressure on Retailers

By Sheridan Fifer

Thanks in large part to the ubiquity of Amazon, consumers now expect fast and free shipping, and the cost of fulfilling that expectation is rising. Shipping companies are introducing surcharges along with annual increases; for example, FedEx has announced peak surcharges on certain shipments from customers who have a weekly volume of more than 30,000 packages. To cope with the rising expense and complexity of online order fulfillment, retailers are turning to alternative delivery methods, including curbside pickup, buy online, pick up in store, and third-party delivery companies. 

Consumers expect fast and free shipping, but that is an increasing burden for many retailers, especially those that were hurt by extended shutdowns during the Covid-19 pandemic.

Read the full story at CNBC.

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Walmart Raises Wages to Average Over $15 an Hour; Minimum Remains the Same

By Sheridan Fifer

On Thursday, Walmart announced that 425,000 associates will receive a raise in pay, which will have the effect of raising Walmart's average wage to over $15 an hour. Walmart's minimum starting wage will remain at $11 an hour.

Walmart has faced pressure to raise wages, especially as rivals such as Amazon and Target raise theirs. In 2020, Target raised its starting hourly wage to $15.

CEO Doug McMillon has said that he supports a higher federal minimum wage (which currently stands at $7.25 an hour), but not the movement to raise it to $15 an hour. He wants to offer Walmart associates a true career path, in which pay is tied to responsibility and tenure. 

“What we’re trying to do is put together the opportunity for our associates to climb a ladder,” he said. He noted that he began at Walmart as an hourly worker.

Read the full story at CNBC.

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