The Times and the Financial Times reported Friday that the new British regulations, which are expected to include a rule requiring banks to ring-fence their retail operations to shield them from investment banking, could mean that the retail side would fall short of HSBC’s profit targets.

If that happens, The Times quoted HSBC CEO Stuart Gulliver as saying “we might have to think about, do we sell it?”

In the past year, HSBC has sold 28 non-strategic businesses that did not meet profit targets business card. The latest disposal was of operations in Colombia, Peru, Uruguay and Paraguay.

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The idea of the strategy, which was rolled out on Feb. 1, is to discourage shoppers from waiting for the nearly 600 sales Penney used to offer each year. But the move has backfired: It seems many faithful Penny customers have stopped shopping altogether.

The company, which is based in Plano, Texas, lost $163 million, or 75 cents a share, in the three months ended April 28. That’s down from a profit of $64 million, or 28 cents a share, in the year-ago period.

Revenue dropped 20 percent to $3.15 billion, below the penny loss on revenue of $3.45 billion Wall Street had expected. Revenue at stores opened at least a year _ a figure the retail industry uses to measure a company’s health _ fell 18.9 percent. That’s much steeper drop than the 11.4 percent drop analysts polled by FactSet had been forecasting.

“Consumers want deals, and they’re willing to wait for them,” said C. Britt Beemer, chairman of America’s Research Group, a consumer research firm. “When you train customers to shop at big discounts, that customer is not going to change.”

Penney’s disappointing results are the first glimpse into how the bold pricing strategy is playing out with customers. They underscore how difficult it is for a company to fundamentally change the way customers behave. Industry watchers Penney’s has an uphill battle in attempting to shift the mindset of U.S. shoppers, who increasingly have become accustomed to and spoiled by fat discounts during the economic downturn.

The pricing plan is the riskiest move yet by new CEO Ron Johnson _ a former Apple Inc. executive who started in November _ to transform every aspect of the department-store chain from the brands it carries to the way it positions them in stores. Penney has said for months that it will take time for the pricing plan to work, but the poor results put more pressure on Johnson to convince investors that he’s on the right path.

Investors had put a lot of faith in Johnson, who was the mastermind behind Apple’s successful retail stores and who also spearheaded the cheap chic strategy at Target in the 1990s. But they’ve soured on the plan recently.

Penney shares soared 24 percent to about $43 after Johnson laid out his pricing strategy in late January. But since the middle of February _ after the plan was rolled out in stores_ investors have become increasingly nervous, sending shares back down to trade around $34. After the company reported its disappointing first-quarter results after the markets closed, Penney’s shares fell 12 percent to $29.30 in after-hours trading.

Wall Street analysts and others in the retail industry are carefully watching how Penney fares. If the new pricing takes off, other chains could follow. Indeed, many clothing chains have been trying to figure out how to wean shoppers off of the big discounts that became commonplace during the Great Recession.

“This is an ambitious task. If Penney succeeds, (stores) will have to decide whether they’ll follow,” said Chris Donnelly, managing director of Accenture’s retail practice. “If not, they’ll have to make adjustments to their promotional pricing to compete.”

Analysts say part of the problem with the pricing plan is that it hasn’t been communicated well to consumers. As part of the plan, Penney got rid of its hundreds of sales and rolled out a three-tier pricing strategy: everyday prices that are about 40 percent less than what they were a year ago, one monthlong sale each month on select items and clearance events during the first and third Friday of each month. The company also hired talk show host Ellen DeGeneres to star in TV ads that aim to educate shoppers on the new switch.

But some observers say the ads and other marketing messages, which mimic rival Target’s whimsical style, have been too confusing. In one ad, for instance, a dog donning a birthday hat jumps through a hula hoop that a young girl is holding over and over again. The message: “No more jumping through hoops. No coupon clipping. No door busting. Just great prices from the start.”

“I do think they’re trying to be too cute and entertaining,” said Laura Ries, president of Atlanta-based brand strategy firm Ries and Ries, which has worked with such names as Walt Disney and Microsoft. “I think a more direct message would work better.”

Analysts say that Penney will have an easier time conveying the everyday pricing plan once shoppers start to see new brands and other changes that Penney is making in the store. In August, the chain plans to add 100 little shops within its stores that will either focus on one brand or a variety of labels. The shops, which include new brands such as Martha Stewart and designer Nanette Lepore, will replace the sea of clothing racks that have become typical in department stores. Penney also plans spots in its stores called Town Squares that will offer services and advice.

“I am rooting for Ron Johnson to hit a home run,” said Ronald Friedman, the head of the retail group at Marcus LLP, an accounting firm that works with clothing companies. “But it won’t happen overnight. This is a process. It will take between 12 to 18 months.”

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A spokesman for the Atlanta-based company says the drinks will be tested in only four markets for a limited time.

The drinks will be called “Sprite Select” and “Fanta Select” and will have half the calories of regular. They will be made with a blend of sugar and other artificial sweeteners, including Truvia.

PepsiCo Inc. earlier this year launched its Pepsi Next, which has half the calories of regular payday loans online.

Coca-Cola and PepsiCo have tried at mid-calorie drinks in the past. In 2001, Coke rolled out “C2″ and Pepsi in 2004 introduced its “Pepsi Edge.” Both were taken off the market because of poor sales.

The new Coca-Cola tests were first reported by industry publication Beverage Digest.

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The median sales price increased from a year earlier in 74 of 146 metropolitan areas measured, the National Association of Realtors said in a report today. In the fourth quarter, only 29 areas had gains.

The U.S. housing market is showing signs of bottoming as improving employment and record-low mortgage rates boost demand while inventories of available properties tighten. At the end of March, 2.37 million previously owned homes were available for sale, 22 percent fewer than a year earlier, the Realtors said.

]]> http://businesstorrents.com/home-prices-rise-in-half-of-us-cities-as-markets-stabilize-bloomberg/feed/ http://businesstorrents.com/australias-trade-gap-more-than-doubles-to-162-billion-bloomberg/ http://businesstorrents.com/australias-trade-gap-more-than-doubles-to-162-billion-bloomberg/#comments Tue, 08 May 2012 03:16:04 +0000 Avensis http://businesstorrents.com/australias-trade-gap-more-than-doubles-to-162-billion-bloomberg/ Australia recorded its third consecutive trade deficit in March as a 5 percent rise in imports outpaced export growth in an economy driven by the mining industry.

Imports outpaced exports by A$1.587 billion ($1.62 billion), from a revised A$754 million deficit in February, the Bureau of Statistics said in a report in Sydney today. The median estimate in a Bloomberg News survey of 20 economists was for a deficit of A$1.3 billion.

The data add to pressure on central bank Governor Glenn Stevens to extend interest-rate cuts as the economy slows and inflation eases, and traders are betting on another cut next month. Stevens last week reduced rates by half a percentage point to a two-year low of 3.75 percent and the central bank revised its export outlook lower in a quarterly statement.

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Wait it out. "More and more merchants are trying to create a sense of urgency to get you to buy now," says Duquesne marketing professor Audrey Guskey.

Think Groupon-esque daily bargains and flash sales, or one-day sales that tend to happen, well, every week. More often than not, you’re not really getting a bargain, says Guskey.

Force yourself to wait a day or a week and you’ll likely find that your impulse to buy the unnecessary will subside.

Check the unit price. Packaging has always been the silent salesperson, but now some brands are changing sizes to make it seem as if you’re getting a better value, says Christopher Elliott, author of "Scammed."

For example, you may see a $10 18-pack of soap being touted as "50% more" than its competitor’s $6 12-pack. But do the math: Yes, the 18-pack is 50% more soap, but you’re paying more per bar.

Know when to go generic. Drugs, batteries, canned food — the store brand is just as good.

Pony up for a name brand only for a category of product where the technology gets better over time, such as disposable razors, says University of North Carolina marketing professor Jan-Benedict Steenkamp free 3-in-1 credit report.

Check the tech. In the store use RedLaser, a price-comparison app that tells you the cheapest price available online and in brick-and-mortar stores nearby.

At home install InvisibleHand, an add-on for your web browser that scours the web for the best price on any product you’re currently shopping for online.

Don’t be shy. Ask for a discount on everything, from your Internet service to appliances in chain stores.

Start by putting out an offer; research shows that first movers often come out ahead in a negotiation, because the initial number acts like an anchor, pulling human judgment toward it.

Then don’t argue; that’ll get your opponent thinking of counterarguments, say researchers in Israel. Let the other party come back with a counteroffer.

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Do you know a Money Hero? MONEY magazine is celebrating people, both famous and unsung, who have done extraordinary work to improve others’ financial well-being. Nominate your Money Hero.  

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It will be Treasury’s third sale of AIG stock. The sale is expected to raise around $6 billion. AIG said it planned to purchase $2 billion of the amount put up for sale. The new offering follows Treasury sales of $5 one hour payday loan.8 billion in AIG common stock in May 2011 and $6 billion in March of this year.

Treasury and the Federal Reserve stepped in with $182 billion to rescue New York-based AIG from collapse. Treasury still owns about 70 percent of AIG’s common stock.

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