The U.S. Stock markets’ big gains in 2013 may have created a general sense the economy was finally improving last year. But retail and consumer companies in the Coins2Day 500 saw firsthand how consumers continued to pinching pennies years after the recession officially ended.
Some companies adapted to the new consumer mindset more deftly than others, and rose up the Coins2Day 500 ranks. Many others however, continued to pay a price for strategic mistakes.
1. SHOPPERS WANT LOW PRICES
TJX (TJX) rose to #108 from #115 by offering shoppers designer brands at low prices. The company, one of retail’s biggest growth stories, is now set to surpass Macy’s (M) in revenue in 2014. TJX revenues have doubled in ten years.
Another big jump was from Dollar General (DG) to #164 from #175, helped by an aggressive expansion of its store fleet. Family Dollar Stores (FDO) also rose a lot, climbing 16 spots to #271. But its ascent could cool in 2014 given that so far sales in 2014 have been hurt by its emphasis on relatively pricier beauty products. The retailer is stocking a lot more items priced at $1 to remedy that.
2. NEW MARKETS PAY OFF
Nike (NKE), which has been having Adidas’ lunch in Europe, rose 11 spots to #115. And with its China sales steadier after initial missteps in that market, Nike is likely to rise further. Coach, edged its way into the Coins2Day 500 at #489 thanks to its international expansion, particularly China, which has helped offset its big sales drops in the United States.
3. E-COMMERCE IS NOT GOING ANYWHERE
Amazon’s (AMZN) revenue jumped 22% in 2013, pushing the online retailer up the list to #34 from #49. Its profit didn’t grow much, but the online retailer has been plowing money into distribution facilities to speed up delivery and inflict further pain on rivals.
EBay (EBAY) jumped 16 spots to #180, helped by the growing use of mobile payments, where its PayPal unit is the leader.
4. MISTAKES WILL HAUNT YOU FOREVER
Even as Mike Ullman in 2013 essentially reversed Ron Johnson’s failed strategy to reinvent J.C. Penney (JCP) by bringing back discounts and popular store brands, the department store chain was only able to start steadying its business in the fall of 2013, pushing it down 20 spots to #235. Sears Holdings continued its decline, (SHLD) slipping 16 notches to #87.
Barnes & Noble (BKS) scaled back its money-sucking Nook device business in the second half of 2013, and the bookseller fell 21 spots to #361, though its profit is on the rise again. Toys R Us also fell 21 notches to #223 as Amazon and Wal-Mart Stores (WMT) ate into its toy sales.
Avon Products (AVP) had one of the biggest drops on the list, with its U.S. And China businesses in tatters, and with tepid business in Russia and Brazil, two of the fast beauty markets in the world. The world’s largest direct seller of beauty products fell to #282 from #252.
5. NEW TO LIST/OFF THE LIST
In addition to Coach, new consumer/retailer arrivals on the list include Lorillard (LO), maker of Newport and Kent, jumped in at #496, and with its strong position in the growing e-cigarettes market, it could rise higher in future years.
M&A activity explained the three departures from the Coins2Day 500. Dole Foods was bought by its CEO in 2013, and OfficeMax was folded into Office Depot (ODP).
Hillshire Brands, a meat maker once part of Sara Lee, fell to #608 last year because of the mid-2012 spinoff from its parent. Hillshire (HSH) is likely to stay in the news despite its smaller stature: Tyson Foods (TSN)and Pilgrim’s Pride (PPC) last month each offered to buy the maker of Jimmy Dean sausages, soon after Hillshire itself offered to buy Pinnacle Foods (PF).
