Dell likely not sweating Wal-Mart’s custom PCs

Filed under: Retail |

Wal-Mart Stores Inc. will start selling build-your-own-computer components in more than one-third of its U.S. stores this month.
While the discount retailer has been blamed for bankruptcies in sectors ranging from groceries to toys, analysts say it is unlikely that Wal-Mart will pose much of a threat to the likes of Dell Inc.
Dell offers a much wider selection and sells mostly to businesses rather than individuals.
Wal-Mart made its jump into the computer market when it sold laptop computers for $398 on the day after Thanksgiving.
Currently, Wal-Mart offers only prepackaged bundles of personal computers and accessories at most of its stores. Shoppers soon will be able to choose among components including central processing units, monitors, keyboards and mice. The components can be combined to create customized packages that customers can take home immediately.
In a recent news report, a spokeswoman said Wal-Mart began testing build-your-own computer counters in about 20 locations last year, and is introducing them in 1,200 of its 3,200 U.S. discount stores.
The retailer expects to have build-your-own computers in 1,400 stores by the end of the year.
Wal-Mart has been adding upscale merchandise such as flat-panel televisions and fashionable clothing in the hope of enticing customers to buy more than just food and commodity items, which carry low profit margins.
Warm April brings biggest retail sales in two years
Apparel retailers bounced back from disappointing March sales last month. Meteorologists said this was the warmest April in 58 years, with a national average temperature 11 percent above normal.
As consumers shrugged off soaring gasoline prices and bought spring clothing, Easter candy and other goods, U.S. retailers reported their biggest monthly sales gains in two years.
Wal-Mart Stores Inc. posted its largest monthly sales gain since August 2003, while Costco Wholesale Corp., Talbots Inc. and Limited Brands Inc. each beat Wall Street expectations.
Overall, sales rose 6.6 percent at stores open at least a year – a key retail measure known as same-store sales – marking the biggest monthly gain since March 2004, according to research firm Retail Metrics. Sixty-three percent of retailers posted better-than-expected sales.
Analysts had predicted 5.9 percent growth, in part because Easter fell three weeks later this year than in 2005, which shifted some demand into April instead of March.
The sales jump allowed many retailers to wrap up their fiscal first quarters on a strong note. J.C. Penney Co. Inc., Children’s Place Retail Stores Inc. and Ross Stores Inc. were among the chains forecasting better-than-expected quarterly profit.
Most retailers forecast smaller gains for May, however, as consumers wrestle with gasoline prices above $3 per gallon in many U.S. cities, as well as rising interest rates.
Wal-Mart, the world’s largest retailer, reported that its April same-store sales rose 6.8 percent, and it forecast growth between 2 percent and 4 percent for May.
Wal-Mart’s closest rival, Target Corp., said its April same-store sales rose 10.4 percent, near the middle of its forecast, but slightly above Wall Street expectations. For May, Target expects growth of 4 percent to 6 percent.
J.C. Penney posted a 2.6 percent April same-store sales increase, but raised its first-quarter profit forecast to 88 cents a share, above Wall Street expectations of 80 cents.
Warehouse club operator Costco’s same-store sales rose 7 percent, beating Wall Street expectations of a 5.5 percent gain.
Limited Brands, which owns its namesake stores as well as Express and Victoria’s Secret, reported a 9 percent same-store sales increase, far above expectations of 5.3 percent growth. It expects May same-store sales to show a percentage increase in the mid-single digits.
Talbots posted a strong 10.8 percent same-store sales gain, well ahead of expectations of 2.4 percent growth.
Women’s clothing retailer Chico’s FAS Inc. was among the few disappointments, posting same-store sales growth of 5.4 percent. Analysts had expected a 7.8 percent increase. The retailer blamed a few fashion mistakes and said it probably should have had more color.
Pets kickoff event at Shops at Briargate
Pet owners will no longer have to leave their pets at home when shopping at The Promenade Shops at Briargate. The official “Bark at Briargate” kickoff will be from 11 a.m. to 2 p.m. June 10 in the southeast parking lot.
Everyone and their pets are welcome at the free event, which will include giveaways and demonstrations. Canine Companions for Independence, Petco, Wag n’ Wash and Le Pooch Connection will participate.
Information about adopting pets will be available from the Humane Society of the Pikes Peak Region and Colorado All-Breed Rescue.
KSPZ will sponsor a celebrity dog wash. Pet stores, veterinarians, dog trainers, food suppliers and others will be present. There will be an agility/obstacle course demonstration and dog training tips available.
The “Pet Friendly” message will continue throughout the year with select restaurants opening their patios for dining with pets. Also, many stores will set out drinking bowls near their doors and waste stations will be placed throughout the shopping center.
Joan Johnson covers retail for the Colorado Springs Business Journal.