retail news in context, analysis with attitude

US News & World Report has a story about what it describes as the “better run firms” that seem to be not just surviving the recession, but actually thriving in tough times. Part of the reason is that they have done things right, but it also is because weaker companies have made mistakes by expanding too fast, taking on too much debt, or not having a diversified enough offering.

Among the companies that are identified as toughing out the recession with better results, according to the magazine, are:

• Amazon: “This premier online retailer is gaining from the pain at the mall,” US News writes. “While overall retail spending has fallen, online sales have kept growing, as thrifty consumers search for the lowest price on the Web and even try to save gas money by shopping from home. In its quest to become an online megastore, Amazon has expanded way beyond books and music and acquired other online retailers. The competition is tough, but by most measures Amazon is poised to become the Walmart of the Web (even more, perhaps, than walmart.com).”

• Dollar Tree: “A share of stock in this discount chain might make a much better present than a gift certificate to the store: The share price has risen an astounding 108 percent since the recession began. A poor economy is obviously a boon for stores that sell really cheap stuff, and most ‘dollar’ stores have been thriving. Dollar Tree, with more than 3,400 stores, isn't the biggest discount variety chain, but it has tried to offset its bargain-basement image with an upbeat ambience and frozen foods in some locations. Even if the economy recovers, analysts figure that the coming surge in baby-boomer retirements, with many living on fixed incomes, will mean a rich future for Dollar Tree.”

• Staples: “Just about every company can get by with fewer paper clips, which makes it tough to sell office supplies when companies are slashing costs,” US News writes. “Profits are down, but the world's biggest office-products company has been growing by adding new stores and expanding popular services like printing and copying. The 2008 acquisition of Corporate Express helps expand Staples' presence in Europe and Canada. Staples also has one of the busiest websites in the world, which helps offset weak retail sales.”
KC's View:
In all these cases, it seems to me, the companies have been focused on just on shoring up the present tactics but also thinking strategically for the long-term. That’s smart.