October Retail Sales
February 19, 2007

Tesco - Green Strategy for US

Economic Notes:

This Weeks Leads:



Gross Taxable Retail Sales – October 2006

  • The “Top Ten” represent 44% of the State- Wide market.
  • The “Top Twenty-Five” represent 2/3rds of all retail sales.
  • State-wide March increases were 13.4%
  • The “Top 20%” gainers include:
    1. South Jordan +69.9%
    2. Lehi +49.9%
    3. Vernal +35.7%
    4. Draper +25.6%
    5. American Fork +24.1%
  • The “Bottom 10%” include:
    1. Blanding - 15.4%
    2. Montecello -11.5%
    3. Springdale -7.6%

October 06 Retail Sales – Top 25 Cities (Large Monthly Filers Only)

Rank (05) CityOctober 2006 (000) % Change 06/05Mkt Share October 06 (% of State Total)
1Salt Lake City$366,030+4.1% 11.5%
2(2) Orem$145,178+7.9 %4.5%
3(3) Sandy$143,726+9. 7%4.5%
4(6)West Valley$141,703+20.0% 4.4%
5(7)South Salt Lake$128,693+21.9% 4.0%
6(5) Murray$128,086+1 0.5%4.0%
7(8)West Jordan$92,176+11.1% 2.9%
8(4)St George$90,7943.0% 2.9%
9(9) Ogden$90,646+9. 8%2.9%
10(11) Layton$89,16913.0 %2.8%
11(10) Provo$86,374+6.9 %2.7%
12(13) Riverdale$51,463+ 14.8%1.6%
13(12) Logan$51,270+7.2 %1.6%
14(14) Midvale$49,223+ 16.8%1.5%
15(15)American Fork$45,665+24.1% 1.4%
16(16)Cedar City$40,727+11.0% 1.3%
17(17) Draper$39,754+25. 6%1.2%
18(20) Vernal$38,858+35. 7%1.2%
19(18) Taylorsville$35,087 +14.7%1.1%
20(19) Lindon$34,906+15. 4%1.1%
21(26)South Jordan$32,724+69.9% 1.0%
22(22) Lehi$30,652 +59.9%1.0%
-(-)Cottonwood Heightsnana na
23(21) Bountiful$27,333+1 0.9%0.9%
24(24)Park City$24,478+22.9% 0.8%

  • The “Top 5” Major Sectors represent 50% of the market.
  • State-wide October increases were 13.4% - The “Top 5” gainers include:
    1. Construction +76.2%
    2. Services - Health +60.6%
    3. Retail Misc. Sales +34.5%
    4. Transportation +29.6%
    5. Wholesale Durable Goods +29.2%
  • Categories with declining sales were led by:
    1. Private Vehicle Sales -44.0%
    2. Mining -19.5%
    3. Services - Education -19.5%

Source: Utah State Tax Commission

Mall Shooting Spree Raises Security Questions

In perhaps the deadliest incident ever at a U.S. mall, six people were killed Monday at Trolley Square, a 239,000-square-foot mall in Salt Lake City owned and managed by real estate investment firm ScanlanKemperBard (SKB) Companies.

Sulejmen Talovic, 18, entered the mall with a .38 caliber pistol, a shotgun, a backpack full of ammunition and a bandoleer of shotgun shells. He walked through the center firing randomly and killed five and wounded four before being fatally shot by police. The incident could have been a lot worse if off- duty police officer Kenneth Hammond had not been at the property. Armed with a .45-caliber handgun, Hammond exchanged fire with Talovic and held him at bay until the local SWAT team arrived. Talovic was killed in the ensuing gunfight.

Mall security, however, seems to not have played a role in stopping the shooting.

But if it’s like most of the industry, security guards at the mall were probably under-paid, under-trained and ill-equipped to deal with the incident.

“Some shopping centers will just hire two guard service people to patrol the property and don’t really give them any direction; they just tell them to wander around the area,” says Chris McGoey, founder of Los Angeles-based McGoey Security Consulting and publisher of retailtrafficmag.com/DOJreport.pdf">“An Assessment of the Preparedness of Large Retail Malls to Prevent and Respond to Terrorist Attacks”, shows that filling mall security guard positions remains a low priority. A survey of 120 mall security directors indicates that 60.2 percent said that training for security staff at their center has not improved since 9/11 and another 94 percent said that there was no change in hiring requirements for security officers.

Security guards typically earn between $8.50 and $14 an hour, McGoey says. “Plus, security officers get a lot of verbal abuse, some people can’t stand on their feet all day long and some aren’t comfortable with confrontation,” McGoey says.

The Department of Justice report found that less than one in 10 centers had any age requirements for the job. A little more than 4 percent of respondents require that applicants be at least 18 years of age; 3.6 percent request that applicants be 21. In addition, less than 47.1 percent of those surveyed required a high school diploma or a higher level of education, and even fewer (12.7 percent) required previous experience in security, military service or law enforcement.

“We would all like to have the best qualified people for the job, but the pay scale that exists does not allow us to hire the best people and there is a limited group of [candidates] who can do this job,” says Jonathan Lusher principal consultant and executive vice president with IPC International Corp., a Bannockburn, Ill.-based security firm Lusher.

Malls have seen a rash of high-profile incidents lately. Two young men have been arrested and charged for a fatal shooting that occurred at the Boynton Beach Mall in Florida on Christmas Eve. The alleged gunman, witnesses said, fired at least six bullets before they cornered and arrested him in the women's department of Dillard's. The second man has been charged as an accessory after the fact and resisting an officer without violence. The mall was evacuated and closed. It reopened the day after Christmas.

Source: Retail Traffic

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  • Tesco - Green Strategy for US
  • Tesco, the UK supermarket chain, is to wrap itself emphatically in green as it enters the US grocery market this year, overtaking even leading organic and natural competitors in its enthusiasm for the colour.

    The retailer will launch a network of small “neighbourhood market” stores under a green- shaded “Fresh & Easy” logo, abandoning both the name Tesco and its traditional corporate colours of red, white and blue.

    About half of the facade of the new Fresh & Easy stores will consist of a green panel surrounding high windows, according to plans seen by the FT (see below).

    Tesco’s enthusiasm for the colour out-greens both Whole Foods Market and Wild Oats, the more upmarket leading US organic and natural grocers.

    Green also dominates on Tesco’s freshandeasy.com US corporate website, and colours the new business cards of its US executives.

    Tesco says the US store format “is dedicated to environmentally friendly business practices”.

    It is adding solar panels to some of its stores and it has announced plans to build a $13m solar panel array to provide power for its distribution centre being built in Riverside, California, which is believed to be the world’s largest.

    At a store level, “waste will be minimised by recycling or reusing all shipping materials and energy consumption will be reduced with modified fridges and lighting”, it says. And in what may be an optimistic gesture, some of its stores in car-obsessed Los Angeles will feature bicycle racks by the main entrance.

    Sir Terry Leahy, Tesco’s chief executive, last month set out ambitious targets for the retailer on carbon emission transparency and other issues, noting that the US operation “is also placing a big emphasis on reducing energy and carbon emissions”.

    The company is planning scores of stores in southern California, Arizona and Nevada. With about 10,000 sq ft of sales space, the stores will be about a third of the size of even the smallest traditional US supermarkets, offering a focused selection of fresh and packaged food in an easy-in-easy-out format.

    Tim Mason, head of Tesco’s US operation, said the stores, located close to high-density housing, had been “designed to draw customers back to their local neighbourhoods”.

    Tesco has yet to say how many stores will be in its first wave of openings. However, it has applied for licences to sell alcohol in more than 40 locations in the three states.

    Tesco’s stress on sustainability mirrors a similar push by Wal-Mart, the largest US retailer, which is seeking proposals for a potentially massive solar power project covering stores in five states.

    Whole Foods, Staples and Walgreens are also pursuing solar power initiatives at their stores.

    Source: The Financial Times Limited 2007

  • Economic Notes:
    • International Trade (FT900)
    • The nominal U.S. trade deficit in goods and services widened by 5.3% in December. The U.S. trade deficit came in at $61.2 billion, $3.1 billion more than November's revised $58.1 billion, according to the Bureau of Economic Analysis. In December, both exports and imports increased, while imports increased more than exports. The goods deficit with China, however, narrowed 17.1% to $19.0 billion. Crude oil prices increased in December, which in turn increased the nation's total import bill for energy- related petroleum products to $20.9 billion.
    • China
    • China surpassed Mexico as the second-largest U.S. trading partner in 2006, according to a Feb. 14 report by the U.S. Commerce Department. The U.S. trade deficit with China -- now a record $232.5 billion -- was around 30 percent of the total $763.6 billion trade deficit. Many members of the Democratic-controlled Congress blame China's currency practices and government subsidies for the increasing deficit, and will increase pressure on the Bush administration to take action.
    • MBA Mortgage Applications Survey
    • Mortgage demand increased 1.5% in the week ending February 9. Purchase applications decreased 1.0% and refinance applications increased 4.5%. The market is flat, but weather and timing suggest the real story will not be revealed until the end of the month.
    • Treasury Budget
    • The unified surplus for January was $38.2 billion, slightly smaller than the CBO’s preliminary estimate of a $40 billion surplus. The federal government has run a deficit of $42.2 billion through the first four months of fiscal year 2007; this is 57% smaller than the deficit at the same point in fiscal year 2006.
    • Treasury International Capital Flows
    • Total net foreign purchases of long-term U.S. securities in December was $15.6 billion, from a revised $68.4 billion in November. However, on balance, there was a total net outflow from U.S. assets worth $11 billion, which was the first net sell- off since June 2005. This is significantly lower than the average through 2006 and suggests that there may be some moderation in appetite for U.S. assets.
    • Risk of Recession
    • The Moody’s Economy.com probability of recession dipped in January to 15%, from December’s downwardly revised 20%. Further improvements in equity markets and consumer confidence in January helped depress recession risks. Unemployment insurance claims have also moderated some. The yield curve remained inverted in January, although the spread narrowed some, and average hours worked slipped. The chance of the economy being in recession in six months remains elevated but modest.
    • NAR Metro Prices
    • Reflecting the fourth quarter y/y decline in the national median price, house prices are depreciating in nearly half of the metro areas covered by the NAR’s regional sales release. Topping the list are Florida MSAs, with double-digit declines of near 20% in Sarasota and Palm Bay. Sales are also slowing considerably, with half of the states posting a 10% or greater decline in existing home sales.
    • NAHB Housing Market Index
    • Homebuilder optimism increased five points to 40 in February. Overall, the index is up noticeably in every component, but traffic of prospective buyers is still only 31.
    • Chain Store Sales
    • Chain store sales fell 0.8% in the week ending February 10, according to the ICSC. Year-over-year growth dipped to 3.9%, the slowest growth since the start of January
    • Retail Sales (MARTS)
    • Total retail sales were unchanged in January, below expectations. Non-auto sales rose 0.3%, closer to expectations.
    • Business Employment Dynamics
    • During the second quarter of 2006, the economy created 7.8 million jobs at new and expanding establishments, while 7.3 million were lost at closing and contracting establishments. More jobs were created but more were also lost than in the previous quarter. The gain rate rose to 6.9% from 6.7%, but was lower than in 2005. However, the loss rate, though higher than in the first quarter, was also lower in 2005
    • Oil and Gas Inventories
    • Crude oil inventories declined by 0.6 million barrels for the week ending February 9, according to the Energy Information Administration. Distillate inventories fell by 3 million barrels, less than expected. Gasoline stocks fell by 2 million barrels, also below expectations. Refinery activity weakened further last week. The report will put some bearish pressure on energy
    • Weekly Natural Gas Storage Report
    • Underground storage of natural gas decreased by 259 billion cubic feet during the week ending February 9. This was slightly larger than expectations calling for a 253 Bcf draw. Inventories are now 14.7% above the five-year average. This report is likely to have a neutral to modestly bullish effect on prices

    Source: Economy.com, Financial Times

  • This Weeks Leads:
    • Amazing Jake’s
    • Amazing Jake’s / Newmark Entertainment trades as Amazing Jake’s.
    • The two-unit chain operates locations in Mesa, AZ and Aurora, CO.
    • The family- themed restaurant and entertainment concept occupies a space of 60,000 sq.ft. to 85,000 sq.ft. in freestanding locations, malls, lifestyle and power centers.
    • Plans call for 20 to 25 openings nationwide during the coming 18 months.
    • For details, contact
      • Aaron Browning,
      • Amazing Jake's,
      • 95 Enterprise, Suite 340,
      • Aliso Viejo, CA 92656;
      • 949-305-4800 Ext. 107,
      • Fax 949- 305-0840;
      • Email: abrowning@amazingjakes.com;
      • Web site: www.amazingjakes.com
    • Florsheim
    • Weyco Group, Inc. trades as Florsheim.
    • The 32-unit chain operates locations throughout CA, FL, GA, IL, LA, MA, MD, MN, NJ, NV, NY, PA and TX.
    • The stores, selling high end men’s shoes and leather accessories, occupy spaces of 1,250 sq.ft. to 1,500 sq.ft. in malls and outlet centers.
    • Plans call for five openings nationwide during the coming 18 months.
    • Typical leases run 10 years.
    • Competition is cited as Johnson & Murphy.
    • For details, contact
      • Tim Then,
      • Weyco Group, Inc.,
      • 333 West Estabrook Boulevard,
      • Glen Dale, WI 53212;
      • 414-908-1600,
      • Fax 414-908- 1601
    • Planet West
    • Glamour West, Inc. trades as Planet West.
    • The 23-unit chain operates locations throughout CA.
    • The beauty supply stores occupy spaces of 1,400 sq.ft. to 1,500 sq.ft. in malls, power, specialty and strip centers.
    • Growth opportunities are sought throughout the existing market during the coming 18 months. T
    • ypical leases run five years. A vanilla shell and specific improvements are required.
    • Preferred demographics include a population of 20,000 within one mile earning $70,000 as the average household income.
    • Competition is cited as Pure Beauty.
    • For details, contact
      • Bahman Fakhimi,
      • Glamour West, Inc.,
      • 3199-A Red Hill Avenue,
      • Costa Mesa, CA 92626;
      • 949- 752-1885,
      • Fax 949-752-1887;
      • Web site: www.planetbeauty.com
    • The Bombay Co.
    • The Bombay Co. operates 500 locations nationwide and in Canada.
    • The home furnishings and accessories stores occupy spaces of 4,500 sq.ft. to 9,000 sq.ft. in lifestyle, outlet, specialty and strip centers.
    • Plans call for five to 10 openings nationwide and in Canada during the coming 18 months.
    • Typical leases run 10 years.
    • For more information, contact
      • Paul Myrick,
      • The Bombay Co.,
      • 550 Bailey Avenue, Suite 700,
      • Fort Worth, TX 76107;
      • 817-347-8273,
      • Fax 817-877-5073;
      • Email: pmyrick@us.bombayco.com;
      • Web site: www.bombayco.com.
    • Giffords Ice Cream & Candy Co.
    • Giffords Ice Cream & Candy Co. operates four locations throughout Washington, DC.
    • The ice cream and candy stores occupy spaces of 750 sq.ft. to 1,400 sq.ft. in lifestyle and entertainment centers.
    • Plans call for 10 to 15 openings throughout existing markets during the coming 18 months.
    • The company is in the early stages of franchising and plans an expansion in the Mid-Atlantic region after two years.
    • For more information, contact
      • Neal Lieberman,
      • Giffords Ice Cream & Candy Co.,
      • 8810 Brookville Road,
      • Silver Springs, MD 20910,
      • 800-708-1938, 866-217- 9818;
      • Web site: www.giffords.com.
    • Black & Decker Factory Outlet
    • Black & Decker U.S. Inc. trades as Black & Decker Factory Outlet.
    • The 34-unit chain operates locations nationwide.
    • The home improvement stores occupy spaces of 4,500 sq.ft. in outlet centers.
    • Growth opportunities are sought nationwide during the coming 18 months.
    • For details, contact
      • Scott Johnson,
      • Black & Decker U.S. Inc.,
      • 701 East Joppa Road R670,
      • Townson, MD 21286;
      • 410-847-6853,
      • Fax: 410-847-6890;
      • Email: scott.Johnson@bdk.com
      • Web site: www.blackanddecker.com.

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