Today in retail, CVS relies on tech and robotics as its store count declines and it focuses on post-COVID efficiencies, while the fashion industry is preparing for the holiday shopping season now. Plus, Murphy USA reports first-quarter growth as fuel prices continue to rise.
CVS Leans on Tech, Robotics to Drive Post-COVID Efficiencies as Store Count Declines
With its COVID-19 vaccine and testing franchise on the decline, the nation’s largest pharmacy retailer said Wednesday (May 4) that it was looking for ways to deploy new tech to help streamline connectivity with customers while also helping to boost sales and profitability.
Although the $125 billion Rhode Island-based healthcare provider now generates about two-thirds of its sales and profits from its healthcare and pharmacy benefit businesses, its chain of 9,900 stores in 49 states is still a growing operation, albeit one that CVS is continuing to shrink.
For the three months ending March 31, CVS said its Retail/Long Term Care division revenues rose 9% to $25.4 billion, 80% of which came from the pharmacy or “back of store” and just 14%, or $5 billion, generated by traditional “front of store” merchandise sales.
Kohl’s Advisory Firm Urges Shareholders to Keep Current Board of Directors
Kohl’s shareholders should vote to retain all 13 of the company’s nominees for director at next week’s annual shareholder meeting May 11, proxy advisory firm Glass Lewis said in a company press release Tuesday (May 3).
The vote will come as Kohl’s considers whether to sell some or all of the department store’s operations to outside bidders or focus on making changes internally to turn the company around. Glass Lewis noted the transparency of the board’s review of its future strategy as one reason to keep them in place for another term.
“In our view, and contrary to the dissident’s assertions, the company has been reasonably transparent regarding various key aspects of the sale process, and we see no substantive evidence to suggest the board is not actively soliciting/entertaining any and all credible offers,” Glass Lewis wrote, according to the release.
Murphy USA Continues Growth as Consumers Pay More at the Pump
At a time when inflation and rising fuel prices are leading to consumer belt-tightening and investor anxiety, gas-and-go store company Murphy USA has found a way to buck the trend, watching its stock price rise from less than $170 per share in early March to more than $245 per share early Wednesday (May 4).
Murphy’s total retail gallons increased 7.8% to 1.1 billion gallons in Q1 2022 compared to Q1 2021, while same-store sales volumes increased 3.8%, according to a press release. Merchandise sales were up 18.4% year over year to $175.7 million in the first quarter, with food and beverage comprising 14.6%, up from 11.5% in 2021.
The company opened six new Murphy Express stores and one QuickChek store in the first quarter of 2022, increasing the store count to 1,686 as of the end of March, the release stated. There are 17 new Murphy Express stores, two new QuickChek stores, and 17 raze-and-rebuild Murphy USA stores under construction.
Sluggish Sales Prompt Alibaba to Go After Thrifty Shoppers
Chinese technology firm Alibaba Group is trying to regroup and regain its financial footing by focusing its eCommerce efforts on its Taobao Deals app, which reaches an estimated 930 million people in third-tier cities, the Financial Times reported on Wednesday (May 4).
Alibaba launched the Taobao Deals app in March 2020 to target bargain hunters, a segment of shoppers that is quickly growing. The company previously focused on wealthier first- and second-tier cities with its main eCommerce platform Taobao and its high-end marketplace Tianmao.
Third-tier cities generally have a GDP between $18 billion and $67 billion, with each having a population of 150,000 to 3 million people, according to a South China Morning Post report. There are 71 cities in the third-tier classification, whereas first and second tiers combined have under 50. Consumption in the lower-tier cities in China is anticipated to go up to an estimated $6.9 trillion in 2030 from $2.3 trillion in 2017, according to Morgan Stanley, per FT.
Apparel Industry CFOs Use Tech, Intuition to Complete Holiday Purchases 8 Months Early
Anticipating the next movement of the customer and building up relationships with the big brands is important for any retailer.
That’s especially true when your business is selling footwear, apparel, accessories and home products from consumer brands. Joseph Falcão, chief financial officer (CFO) at Orva, told PYMNTS that the company had already bought goods for the next holiday season — the lead times are that long.
Falcão joined the 70-year-old business turned eCommerce platform on March 30 in the newly created role of CFO. His agenda includes doubling the revenue by creating sound processes, systems, speed and agility by using a better technology stack, including machine learning (ML) and artificial intelligence (AI) that will help spot common trends and patterns and anticipate what the customers want.