Costco Lowers Profit Forecast on Markdowns
here last week lowered earnings expectations for the fourth quarter because of declining margins and higher markdowns on hardlines, principally electronics and furniture. Earnings per share for the period, which ended Aug. 30, are expected to be between 68 cents and 71 cents, compared with forecasts of 71 cents to 74 cents the company issued at the end of the third quarter, Richard Galanti, chief financial officer, said. Noting that fiscal 2006 is a 53-week year, Galanti said sales through the first 52 weeks of the year were up 11% to $57.8 billion, with comps up 7% in the U.S.
Teamsters Urge Kroger to Stay in Michigan DC
DETROIT - Representatives of Teamsters Union Local 337 met with representatives of Kroger Co. here last week to try to resolve differences that have resulted in a six-week-old consumer boycott by the union against the chain's Michigan stores. The boycott - in the form of handbills that ask consumers to shop elsewhere - began after Kroger disclosed plans to move its perishables operation from a Supervalu-run facility it owns in Livonia, Mich., to a Kroger warehouse in Delaware, Ohio, a move the union said could cost its members 500 jobs. Local 337 spokesman Bob Barns told SN that Kroger may be eligible for funds from Michigan's Economic Development Council to help employers retain jobs in the state.
Korean Grocers Sue Wal-Mart, Andrew Young
LOS ANGELES - The California Korean-American Grocers Association here has filed suit against Wal-Mart Stores and Andrew Young, former chairman of Working Families for Wal-Mart, charging them with libel over comments Young made about Korean grocers, according to published reports. Young resigned from Wal-Mart the day after the Los Angeles Sentinel, a newspaper serving the African American community here, quoted him as saying "Jews, Koreans and Arabs" have ripped off African American consumers by "overcharging us [and] selling us stale bread and bad meat and wilted vegetables." A Wal-Mart spokesman told SN the company had not yet seen the suit, "but the fact is, Ambassador Young made statements that do no reflect the opinion of our company." The suit seeks $7.5 million plus unspecified punitive damages, according to the Los Angeles Times.
Chains Complete Pilot of Data Sync for Meats
LAWRENCEVILLE, N.J. - GS1 US here and the Meat and Poultry Business to Business Data Standards Organization said they have successfully completed a data-synchronization pilot of variable-measure meat and poultry items using the Global Data Synchronization Network. Retailer participants included Supervalu and Wegmans Food Markets; suppliers included Perdue and Tyson Foods; and 1SYNC and Agentrics served as the data pools. The retailers were able to successfully receive Catalog Item Notification messages from the producers for variable-measure meat and poultry products for both the item and case level.
Dollar General Rethinks Strategies as Profits Fall
GOODLETSVILLE, Tenn. - Citing uncertainty concerning a reassessment of its real estate and inventory strategies, Dollar General here last week withdrew its previous earnings guidance for the year. The retailer said it was considering aggressively marking down unsold seasonal items; it also said a reassessment of real estate strategies could impact the rate of store closings, relocations and remodels. The news came as Dollar General posted a 40% earnings decline sparked by low demand for higher-margin items like clothing and home goods and poor back-to-school sales. Overall sales of $2.3 billion in the quarter ending Aug. 4 increased by 9%, but earnings fell to $45.5 million.
