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Retail sales September 2020

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Consumers spent at a much faster pace than expected in September, with retail sales rising 1.9% in a sign that the U.S. economy’s biggest driver remains healthy.

Economists surveyed by Dow Jones expected sales to rise 0.7%, up from a 0.6% rise in August.

Excluding autos, the gain amounted to 1.5%, which also was better than the 0.4% estimate.

Clothing and accessories led the gains, rising by 11%, while sporting goods, music and books jumped 5.7%. Electronics and appliances was the only major sector that was negative, dropping 1.6% from the August levels.

Markets reacted positively to the news, with Dow futures implying an opening gain of about 126 points.

However, economists expect that number to turn around when third-quarter growth is announced at the end of the month, with the Atlanta Fed’s GDPNow tracker pointing to a 35.2% increase. That would be more than double any single-quarter growth going back to at least 1947.

Beyond that, concerns are rising that the fourth quarter could see a marked slowdown as virus cases continue to rise. The holiday shopping season will be a key for what kind of momentum the U.S. sees as the calendar turns into 2021.

A drop in electronics sales could be seen as one harbinger of a slowdown. The September 2020 total also represented a decline of 6.4% from the pace of a year ago.

This is breaking news. Please check back for updates.


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Bed Bath & Beyond plans to scale back coupons to boost profits

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Soon, you might not be seeing as many Bed Bath & Beyond coupons showing up in your mailbox.

For better or for worse, the big-box retailer is known for its frequent coupons, sent in the mail and via email, to lure customers into stores by promising 15% or 20% discounts off bedding and other home accessories.

But in a bid to boost profits and be more competitive on pricing with competitors, the company is planning to scale that back.

“Today, we have an overreliance on the coupon,” Chief Merchandising Officer Joe Hartsig said Wednesday during a virtual meeting with investors.

Bed Bath & Beyond said it has studied 405 million shoppers’ baskets and 285,000 items, and found that 40% of its promotions were deemed “ineffective” and unnecessary.

It said it has seen 1.4 million new customers this year — in large part due to the coronavirus pandemic and people looking to stock up on cleaning supplies or to spruce up their homes. It said those new customers are six years younger, on average, and are 20% less likely to use a coupon, giving the company even more reason to scale its promotions back.

One analyst, though, cautioned that the retailer needs to be careful not to upset those people who are the most dependent on the coupons.

“Financially, this is a necessary move as coupons erode margins,” said Neil Saunders, managing director of GlobalData Retail. “However, many Bed Bath & Beyond customers love coupons, so scaling them back may have an impact on shopper numbers and sales.”

“This is very much like ending an addition: It’s sensible and brings benefits in the longer term, but it may hurt in the short term,” Saunders added.

The shift is part of Bed Bath & Beyond’s broader turnaround strategy, to boost sales and profits in the coming years. In laying out a three-year road map Wednesday, the company offered fresh financial targets. It expects same-store sales — which track revenue online and at stores open for at least 12 months — to be “stable” in fiscal 2021, and rise in the low-to-mid single digits by 2023.

It plans to make $1 billion to $1.5 billion in capital investments over the next three years, to remodel stores and upgrade its e-commerce operations, among other initiatives.

Bed Bath & Beyond shares were falling more than 11% Wednesday, amid a broader market sell-off. Its stock has run up more than 38% this year, giving it a market cap of $2.7 billion.


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Covid cases, hospitalizations continue to surge as U.S. reaches ‘critical point’ in pandemic

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Emergency Medical Technicians (EMT) arrive with a correctional patient at North Shore Medical Center where the coronavirus disease (COVID-19) patients are treated, in Miami, Florida, U.S. July 14, 2020.

Maria Alejandra Cardona | Reuters

The United States is reporting another record-high average number of new cases of the coronavirus as a top health official warned Wednesday that the country is at a “critical point.”

The U.S. reported 73,240 new cases on Tuesday, bringing the seven-day average of new cases up to about 71,832, a fresh record and an increase of more than 20% compared with a week ago, according to a CNBC analysis of data collected by Johns Hopkins University.

Three dozen states reported that the average number of people currently hospitalized with Covid-19 rose by at least 5% over the past week, according to data from the Covid Tracking Project, which tracks testing, hospitalization and other data on the outbreak. Cases are up by at least that amount in 45 states, according to Johns Hopkins data.

“As the nation did after Memorial Day, we are at another critical point in the pandemic response,” Adm. Brett Giroir, assistant secretary of health who leads the government’s testing effort, said Wednesday on NBC’s “TODAY” show. “Cases are going up in most states across the country. Hospitalizations are up, although we’re still tens of thousands of hospitalizations below where we were in July, but that is rising. And we are starting to see the increase in deaths.”

Giroir acknowledged that increased testing alone cannot explain the surge in cases, even as President Donald Trump attributes the surge to testing and continues to downplay the outbreak.

Giroir went on to emphasize that “we can control the virus” by following public health measures like social distancing, mask wearing, avoiding crowded gatherings and with the frequent washing of hands.

The surge in cases and hospitalizations is beginning to overwhelm some hospitals in parts of the country. The Salt Lake Tribune reported over the weekend that the Utah Hospital Association is asking the governor to allow its members to ration care. And in Texas, El Paso County Judge Ricardo Samaniego issued a curfew on Sunday to protect “overwhelmed and exhausted” hospitals and workers.

Public health specialists and epidemiologists have warned for months that the virus would likely surge as the weather turned colder in the fall and winter. That’s largely because people are more likely to stay indoors in colder weather and because some epidemiologists believe the virus can spread more easily through colder, drier air.

Dr. Bill Schaffner, an epidemiologist at Vanderbilt University, told CNBC this week that the outbreak will likely worsen this winter.

Giroir said the administration is “taking this very seriously,” adding that if people fail to abide by public health guidance, “it may force local officials or government officials in the states to have more draconian measures, because cases will go up if we don’t make a change.”

“We have the tools to combat this,” he said. “We can control it. This is a very important time to do it.”

His comments come days after White House chief of staff Mark Meadows said Sunday that the U.S. is not going to contain the pandemic.

“We’re not going to control the pandemic,” Meadows told CNN. “We are going to control the fact that we get vaccines, therapeutics and other mitigations.”

Pressed on why the U.S. can’t make efforts to control the pandemic, Meadows said, “Because it is a contagious virus just like the flu.”

Giroir emphasized on Wednesday that the U.S. has more tools to lessen the weight of the virus, such as additional testing that can help catch cases earlier, before people become severely sick. Scientists have also found a number of drugs to be helpful in the treatment of Covid-19, including the antiviral remdesivir and the steroid dexamethasone.

No vaccine has been authorized by the Food and Drug Administration yet, but Giroir said one is coming this year and it will help end the pandemic. Public health specialists, though, say a vaccine will not bring an abrupt end to the outbreak, especially as it’s not known how effective one might be.

“There is the sense in the general population that if we get a vaccine and get vaccinated, that’s like putting on a suit of armor,” said Schaffner, the epidemiologist at Vanderbilt. “That’s not going to be the case.”


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Boeing CEO says ‘very close to finish line’ on getting 737 Max flight ban lifted

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Dave Calhoun, Chairman of Boeing.

Adam Jeffery | CNBC

Boeing‘s CEO, Dave Calhoun, on Wednesday said the company is “getting very close to the finish line” of the worldwide grounding of its 737 Max plane, which hasn’t flown passengers since March 2019 following two deadly crashes.

Boeing in July said it expected regulators to sign off on the plane in the fourth quarter. One of its biggest U.S. customers, American Airlines, has the jet in its schedule for several flights at the end of the year but other customers don’t expect to fly it until next year.

Regulators are at the tail end of their review of the planes, but they have not yet formally signed off. Once that happens, airlines will have to train 737 pilots, a process that is expected to include computer-based training and aircraft simulator sessions.

“The Max has cost us a lot of money and we’ve had to sort of up the ante with respect to liquidity to make up for the fact that we couldn’t ship the world’s most popular airplane,” Calhoun told CNBC in an interview.

The ban has prevented Boeing from shipping the planes, devastating its sales as manufacturers get the bulk of aircrafts’ cost upon delivery.


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