Asda was the cheapest for the overall shop, at £42.90, narrowly beating Lidl by just 17p – the cost of a tube of value brand toothpaste. Only Sainsbury's (£48.16) was more expensive than Aldi, at £46.39.The interesting turnabout was:
The no-frills stores have – perhaps turning popular preconceptions on their head – defended their prices, saying it is about value for money and shoppers have to take quality into account.
New York's circulation will fall to 400,000 from 425,000, while the magazine's introductory subscription price is jumping to $24.97 from $19.97.While raising subscription prices may seem counterintuitive in the face of declining circulation, the idea (don't know if it works or not) is to make the remaining circulation more attractive to advertisers. And, of course, to cut costs.
The next page of content is headlined "Scope," with the explanatory subhead "news, scoops and the globe at a glance," which is pretty much what Meacham had said Newsweek was not going to cover anymore. But never mind the headline. Most of the page is a picture of Miss California in a white bikini. I know she's Miss California because of a quote from Donald Trump just over her right shoulder, with the added information that he had "allowed [her] to keep her crown." Her breasts are covered by a table of contents of the Scope section. These contents include "InternationaList" (short dispatches from foreign parts; no list that I can see); a source-greaser (flattering profile of a figure who may prove useful) about CIA director Leon Panetta; something called the "Indignity Index," described as "an unscientific appraisal of dubious public behavior" (comedian Wanda Sykes gets a 12 for a rude joke about Rush Limbaugh, Keifer Sutherland gets a 68 for some kind of unpleasant encounter at a party); a short, serious essay by Melinda Gates about building institutions in underdeveloped countries to help poor people save money; and so on.The newsweeklies, as I noted last year, have dumbed themselves down to the level of People. It doesn't appear that this makeover has changed much. My comment back then stands: "Newsweek trying to reposition itself as intelligent reading seems to me kind of like Lindsay Lohan trying to rebrand herself as Grace Kelly -- it's a worthy effort, but unlikely to succeed."
I say "and so on" as if there is some pattern or similarity here. But the only thing these various features have in common is nothing more about Miss California. It's been said that the test of a newsmagazine is whether you would grab it if you'd been trapped in a coal mine for a week and had one hour to catch up. And after a week trapped in a coal mine, perhaps an hour with a picture of Miss California in a bikini will be more useful than any explanation of why she's in the news. But the new Newsweek maintains the same irritating practice as the old one of half-explaining, which is no use either to those who already know the story or to those who don't.
Intel offered about $37 million in rebates over 2 1/2 years to Samsung and Trigem on the condition that they wouldn't buy from Advanced Micro, according to commission's statement.The EU has just handed down a fine that makes Korea's look like chump change:
The European Union fined Intel Corp. a record euro1.06 billion ($1.44 billion) on Wednesday, ordering the world's biggest computer chip maker to stop illegal sales tactics that shut out its Silicon Valley rival AMD.The findings are detailed in the article linked, and are too lengthy to quote here, but they are similar to the Korean case:
Wrapping up an eight-year probe, the EU says Intel gave rebates to manufacturers Acer, Dell, HP, Lenovo and NEC for buying all or almost all their x86 computer processing units, or CPUs, from Intel and paid them to stop or delay the launch of personal computers based on AMD chips.Intel has denied the validity of the findings and says they will appeal within the next sixty days.
[EU Competition Commissioner] Kroes said she hoped the administration of President Barack Obama would join Europe in subjecting corporations to closer anti-trust scrutiny.
This week, one of America's top antitrust officials, Christine Varney, signaled a return to tougher enforcement as the Obama administration dropped a strict interpretation of antitrust rules that saw regulators shun major action against monopolies over the last eight years.
Kroes said Varney's words gave her hope that current "close cooperation" and information exchanges with the Federal Trade Commission "could go in a very positive way" in the future.
"The more competition authorities are joining us in our philosophy, the better it is for it is a global world," she said. "The more who are doing the job ... and with the same approach then the better it is."
Over the past year, about a half dozen retailers have done so, but they mainly are specialty retailers such as AnnTaylor Stores Corp., Guess Inc., Bebe Stores Inc., Cache Inc. and Pacific Sunwear of California Inc. Analysts say many of the stores acted because their comparable-store-sales were deteriorating and it is more of a cost drain compared to better-capitalized large retailers.But what will all us nerds do if we can’t obsess over monthly sales figures?
Macy's Inc., among the biggest retailers in the nation, stopped dispensing same-store-sales figures in February 2008 but started again last October.
French retail giant Carrefour is negotiating to buy Russian supermarket chain Sedmoi Kontinent for 1.25 billion dollars (938 million euros), the daily Kommersant reported.Russia could be an interesting market to watch, since my first thought when I saw this article was, "Hey, didn't I see something a few weeks ago about Walmart planning to enter Russia?" As a matter of fact, I had:
The paper, quoting an unnamed senior Western investment banker close to the talks, said Carrefour would formally submit its bid on May 15 under the terms of a preliminary agreement signed in April.
The paper said the French retailer would pay 1.25 billion dollars to acquire 75 percent of Sedmoi Kontinent and 100 percent of Mkapital, the firm managing the real estate holdings of the Russian supermarket chain.
Reports of out Russia suggest Wal-Mart Stores Inc. may be in negotiations to buy a controlling stake in one of the country's leading “hypermarket” big box retailers. An article in the Kommersant newspaper said the ownership stake in Lenta could approach 51%. This follows similar reports in July 2008.As the quote indicates, Walmart has been looking at Russia for a while. Presumably they'll take the leap soon, especially now that Carrefour has gone first.
Still, any efforts to push their presence out into the regions by Wal-Mart, Tesco or Metro may put them into competition with domestic heavyweight and serial acquirer Aeon.Carrefour pulled out of Japan a few years ago, and Walmart has struggled there.
"Aeon's strategy has been one of looking at M&A as a platform for sales volume expansion," says Larke. "It's seen what the large overseas competition have done and come to the conclusion that sales volume is the way to go."
In the past three years it - or its affiliates - have on average conducted a merger, private placement or capital tie-up with another retailer every two and a half months, according to data from CapitalIQ.
Under the new state law, retailers doing business in Maryland -- as well as state officials -- can sue manufacturers that impose minimum-pricing agreements. The law also covers transactions in which consumers in Maryland buy goods on the Internet, even when the retailer is based out of state. That could potentially affect manufacturers throughout the country.The article says that several other states are considering such legislation, but I doubt there will be any need. Senator Herb Kohl's subcommittee begins hearings next month on a bill to overturn Leegin at the federal level, and that will preempt any state actions.
The process was erratic, labor intensive and costly. In 1930, Americans spent 21% of their disposable income on groceries. By 1940, that percentage dropped to 16%. Today, that figure is less than 6%--thanks to innovations in food distribution, mass merchandising and price competition that began in the 1930s.A sidelight not mentioned in the story is that supermarkets spread so fast and destroyed the existing small retailers so quickly that only six years later, in 1936, congress felt it necessary to try to save the small retailers by passing the Robinson-Patman Act. Didn't work, did it?
"Supermarkets made it possible to achieve economies of scale at a lower cost to consumers," says Leslie G. Sarasin, chief executive of the Food Marketing Institute. "Americans were able to spend more of their disposable income on cars, education, clothing. They effectively created America's middle class."
"While we'll push back a little, what a vendor decides to do with pricing is their decision, but they also own the volume result," Kroger Chief ExecutiveDavid Dillon said at a Barclays Capital conference.
Currently, more than 60 percent of U.S. Twitter users fail to return the following month, or in other words, Twitter’s audience retention rate, or the percentage of a given month’s users who come back the following month, is currently about 40 percent. For most of the past 12 months, pre-Oprah, Twitter has languished below 30 percent retention.That doesn't mean that Twitter will not be successful. If thirty to forty percent of users remain active, and if the application continues its spread to the point that just about everybody tries, then it will be huge. If, however, the anti-hype from the Twitter Quitters begins to discourage new trials, then there will be a problem. We'll keep watching (and even tweeting).
Feesers filed its complaint against Michael Foods and Sodexho on March 17, 2004, alleging price discrimination in violation of the Robinson-Patman Act. A three-week bench trial took place in early 2008 before Judge Sylvia Rambo in the federal district court in Harrisburg, which resulted in the April 27, 2009 decision.This law blog quotes attorneys for the two sides, who disagree (no surprise) as to the importance of the decision:
At trial, Michael Foods and Sodexho argued that Feesers and Sodexho were not in "actual competition" for purposes of the Robinson-Patman Act because Sodexho provides food management services to its customers, whereas Feesers is a food distributor. The court found, however, that both Feesers and Sodexho procure and distribute food for the same institutional customers and, thus, are in actual competition for the same food dollar.
Although the injunctions issued by the district court are binding only as to Michael Foods and Sodexho, it is now clear that price discrimination by food suppliers against distributors such as Feesers and in favor of large-volume food management companies and GPOs such as Sodexho will not be tolerated by the courts.
Kessler [Feeser's attorney] told us Wednesday that the decision could have a major impact on the food distribution industry. In recent years, he explained, food management companies like Sodexo--which provide procurement and management services for cafeterias at schools, hospitals, and prisons--have used their large client base as leverage to extract better pricing deals from suppliers. That's hurt distributors like Feesers. "Sodexho [said to its clients], 'We don't compete with distributors so you can give huge discounts,' " Kessler told us.The decision is here.
Peggy Zwisler of Latham & Watkins, who represented Michael Foods at trial, disputed Kessler's view of Judge Rambo's opinon. She told us it's "very fact specific" and does not have broad implications. She also said that Michael Foods has "strong grounds for appeal" and it intends to do so.
“Competitive injury” is established prima facie by proof of “a substantial price discrimination between competing purchasers over time.” In order to establish a prima facie violation of section 2(a), Feesers does not need to prove that Michael Foods’ price discrimination actually harmed competition, i.e., that the discriminatory pricing caused Feesers to lose customers to Sodexho. Rather, Feesers need only prove that (a) it competed with Sodexho to sell food and (b) there was price discrimination over time by Michael Foods. This evidence gives rise to a rebuttable inference of “competitive injury” under § 2(a). The inference, if it is found to exist, would then have to be rebutted by defendants’ proof that the price differential was not the reason that Feesers lost sales or profits.
"I'd like to capitalize on the store's strong points, but I honestly don't know what they are," Day said. "Every location is full of bizarre adapters, random chargers, and old boom boxes, and some sales guy is constantly hovering over you. It's like walking into your grandpa's basement. You always expect to see something cool, but it never delivers."But Day may be having the last laugh:
Added Day: "I may never know the answer. No matter how many times I punch the sales figures into this crappy Tandy desk calculator, it just doesn't add up."
Net income rose to $43.1 million, or 34 cents a share, from $38.8 million, or 30 cents a share, a year earlier. Revenue grew 5.6% to $1 billion.The numbers may be inflated by sales of digital converters, but anybody who's showing good increases right now is doing something right.
Analysts had, on average, been expecting Ft. Worth-based RadioShack to earn 20 cents a share on revenue of $944.8 million, according to consensus estimates derived in a FactSet Research survey.
... for 395 newspapers reporting this spring, daily circulation fell 7% to 34,439,713 copies, compared with the same March period in 2008. On Sunday, for 557 newspapers, circulation was down 5.3% to 42,082,707.Well, at least things can't get any worse than this. Right?
The first panel will be moderated by Pauline Ippolito, Acting Director of the FTC’s Bureau of Economics, and will examine empirical evidence on the effects of RPM. Specifically, it will review existing empirical studies of RPM, or studies of other vertical restraints that might inform the thinking on RPM. The panel also will explore potential future research in light of possible testable hypotheses underlying the competitive effects of RPM.The sessions will be of value to manufacturers who wish to establish minimum pricing rules for their resellers, although it's quite possible the rules might change again very soon.
The second panel, to be moderated by Laurel Price, Attorney Advisor to FTC Commissioner Pamela Jones Harbour, will examine the legal and business history of the use of RPM in the United States. It will explore how RPM has been treated in this country historically, as well as the legal and business management doctrines related to RPM.
The third panel, also to be moderated by Price, will examine “rule of reason analyses” after the Supreme Court’s landmark Leegin decision, and will assess guidance provided by the Leegin Court regarding the analysis of RPM.
Not only have private label brands been gaining share for the past decade, experts say these gains are the single-biggest problem facing branded packaged goods players. House brands, once a staple of lower-income households, now enjoy roughly equal penetration among demographic segments. Improvements in quality and packaging have helped removed the stigma attached to buying a no-name product.The recession has accelerated the growth of private label, but it is a long term trend that was happening before the recession and will (presumably) continue, though at perhaps a reduced rate, when the recession is over. The increasing concentration of retail, and the increasing power of the surviving retailers, virtually ensures it.
American Greetings is selling its retail store operations to Schurman, which operates Papyrus card and gift retail stores. Schurman will operate stores under the American Greetings, Carlton Cards and Papyrus brands. Schurman paid American Greetings approximately $6 million for its retail business.American Greeting is a pretty well-known name -- I'm surprised to see that their retail business is worth only $6mil. But then, I also don't remember having seen any of their stores recently (if ever) -- which may be a clue as to why they are exiting the business. This would seem to be one of those "concentrate on your core business" moves.
The card companies also announced that American Greetings purchased the wholesale division of Schurman, which supplies Papyrus brand greeting cards to specialty, grocery and other retailers. Following the close of the deal, American Greetings will become responsible for service to those accounts where Papyrus brand products are sold.
American Greetings paid approximately $18 million dollars as consideration for the wholesale division of Schurman.
“The addition of the Papyrus brand to the American Greetings family provides the opportunity to serve a consumer with distinct tastes—a consumer who appreciates the Papyrus approach to design and quality,” says American Greetings CEO Zev Weiss.
"The rating actions reflect Standard & Poor's deepening concern about the impact of the U.S. recession on the increasingly troubled department store sector," Standard & Poor's credit analyst Diane Shand writes in her reports, "which has felt the full brunt of the declining U.S. economy and weakening consumer confidence in 2008. We believe lower consumer spending and declining mall traffic will affect the sales and profits of the department store operators this year," Shand writes, "and that recovery will be slow."I'm not a market analyst (as a glance at my portfolio would quickly prove), but I certainly agree that "recovery will be slow" for the department store sector, since their problems pre-date the recession and will continue after the recession is over.
As more stores have closed, mall vacancies are at their highest point in almost a decade, according to Reis, a research company, which said the vacancy rate at the end of 2008 was 7.1 percent, compared with 5.8 percent at the end of 2007.Down 97% -- sounds like some of my investments.
That has left many of the roughly 1,500 malls in the United States groping for a solution — any solution — to their woes. Some have converted retail space into office space. Others have drastically lowered rents for prized tenants, agreeing to cut deals to keep revenue flowing. Some have simply gone dark.
Shares in General Growth, which closed on Wednesday at $1.05, have fallen 97 percent over the past 12 months.
Trendy vendor and possible competitor Wet Seal reported that its net revenue fell to $593 million last year from $611 million in 2007. Clothing retailers like Ann Taylor, Eddie Bauer and Gap have shuttered stores across the nation of late. And retailers like Meryvn’s and Steve & Barry’s declared bankruptcy last year.But the store owners are undetered:
“It’s the best time to enter. From here, it’s all up,” Armando Dollero said as he toured the 6,300-square-foot store on opening day.Good luck to them. I love that attitude.
The recession is also forcing customers to exchange expensive name brands for cheaper retailers, Carlo Dollero said.
“We’re getting a market we didn’t have before,” he said, adding that sales in Mexico shot up 42 percent last year compared to 2007.
These days, many fashion brands are effecting their own pushback, demanding to be left out of department stores' sales. "All our brands are taking great care to ensure that what happened in November will not happen again," says Paola Milani, a spokeswoman for Gucci Group, which owns Bottega Veneta, Yves Saint Laurent, Gucci and other brands. "The idea is to maintain pricing coherence in the regions in which our products are sold regardless of channel of distribution." [ ... ]One wonders if that will be legal if the Leegin decision is repealed, as Senator Kohl is demanding.
Saks, which was a leader in last fall's discounting, declined to comment. But this week, notices for Saks's 25% off "Friends and Family" sale exclude, in the teensy fine print, more than 40 top luxury brands, including Gucci, Cartier, Chanel, Loro Piana, Oscar de la Renta, Zegna and Christian Louboutin.
Her company depends on department stores for 70% of its revenue, which was $273 million in 2008. But she would like to whittle that share down to 50%.Probably not a bad idea anyway, considering the current state of department stores. Another variation is opening leased departments within the d-stores.
To that end, Eileen Fisher will open six new stores of its own this year in the U.S. -- slightly accelerated from an average of five new stores per year -- and is launching a costly new technology platform for Internet sales that will offer greater flexibility, allowing online customers to pick up items in stores, for instance.
Telesto Ventures said it would not build vehicles and would only keep a skeletal design crew on hand to adapt models from other automakers to a Saturn look. It also said it would focus future models on fuel-efficient and electric vehicles from other automakers.I wish them well, and I find it fascinating to watch the concept of private label spread into areas where one could never have imagined.
While such a business model doesn't exist today, Telesto's backers say the global overcapacity among automakers and the growing number of start-up firms in China and elsewhere would give the reformulated Saturn several possible sources of new vehicles.
Finding automakers to work with "is not a tremendous concern," said John Pappanastos, a group spokesman. "It would allow manufacturers not in the United States to launch without incurring the largest expense they would otherwise face, setting up a distribution network."
Young & Rubicam, looking to snag more revenue in one of the few ad sectors still growing despite the recession, is forming an alliance with Mars Advertising, a specialist in pitching products to consumers while they're busy shopping.Traditional ad agencies, finding their business shrinking as a result of the decline of traditional media, are following the money into in-store marketing. Y&R is just the latest of several firms to enter the field.
Y&R faces stiff competition in the in-store sector, where some of its rivals were faster to bulk up. Publicis Groupe's Saatchi & Saatchi, for example, purchased in-store marketing firm Thompson Murray in 2004. Now named Saatchi X, the firm has 15 offices around the world and works for marketers such as Procter & Gamble, Wal-Mart Stores and PepsiCo's Frito-Lay.It's good to see the ad agencies catch on (if belatedly) to what we've all known for a decade or more. It remains to be seen if they understand the dynamics of trade promo. It's a little different from competing for Golden Lions at Cannes.
"The pass delivers songs, video footage and photos, but spaces out the offering over several weeks in the hope of holding consumers' attention and justifying the premium price."The music industry is flailing about, looking for new revenue streams. It may be that producing value-added bundles of this sort might be one way out of their dilemma. Interestingly, their problem has been caused by the collapse of bundled deals -- albums -- that they have been offering for generations. Downloads have de-bundled albums, and consumers are choosing to buy the one or two songs per album that they care about and ignore the useless filler songs that the record companies had been forcing their customers to pay for.
Polaroid Corp., the twice-bankrupt pioneer of instant photography whose brand name may be its most valuable asset, must try again to auction off its assets after failing to win a judge’s approval for a $56.3 million sale.Fifty-six million. Wow.
... Acer could pass second-place Dell in number of computers shipped this year—and close in on HP. Acer "has a strong chance of overtaking HP," wrote analyst Gokul Hariharan of JPMorgan Chase in a report earlier this month.This is based on unit volume, not sales, and many of the units are low-priced netbooks. But it's impressive nonetheless. They have moved up by cutting costs to be the bone (their overhead costs are barely half of Dell's and HP's), and doing the same with their prices.
Acer's new ultrathin laptop will have a starting price of $650, compared with $1,800 for a similar HP Voodoo Envy and $2,000 for a Dell Adamo. "They're changing customers' perception of what you should pay for a computer," says Richard Shim, an analyst with the research firm IDC.So Acer is taking the low end of the market, but also attacking their rivals on the high end.
Many U.S. apparel makers are ditching acquisitions and store expansion plans to conserve cash amid the consumer-spending downturn. But VF Corp. is taking a reverse tack to survive the turmoil.In a recession, it's possible to grab market share as competitors retrench. Companies that do so often come out the recession stronger than ever.
The largest apparel maker in the world by revenue, VF is continuing to add new retail stores and plans to snap up new brands, said Chief Executive Eric Wiseman.
The Greensboro, N.C., company plans to open at least 70 new boutiques world-wide this year, Mr. Wiseman said in an interview. It is committed to a five-year plan that began in 2007 to reduce its reliance on flagging department stores.
Last year, it opened 89 new stores and drew 16% of revenue from its own outlets. It aims to boost direct sales to 22% of revenue by 2012, Mr. Wiseman said. The stores also showcase its brands, which include Nautica, The North Face, Lee Jeans and Vans.
Its expansion plans are a contrast to those of rivals such as J. Crew Group Inc., which has said it is revisiting all store openings. Jones Apparel Group Inc., which owns brands such as Anne Klein, Nine West and Jones New York, said it was "substantially" paring back its store expansion plans. And Liz Claiborne Inc. is postponing store openings until the economy improves.Of course, expanding in a tight credit market requires having manageable debts, and the article notes that "VF has no long-term debt coming due until the fall of 2010."
Although the luxury sector has been one of the hardest hit in all of retail, Mr. Wiseman said that he is looking to buy more contemporary apparel brands. Earlier this month, VF spent $208 million to acquire the shares it didn't already own and debt of Mo Industries Holdings Inc., which owns Ella Moss and Splendid, makers of $100 t-shirts sold at Barneys New York.These may or may not be good moves. Time will tell. But what I like is that VF seems to be a company that is looking beyond the recession and adopting a strategy to maximize the recovery.
"We know the challenges of the upscale department stores," said Mr. Wiseman. Nevertheless, he defends his strategy, arguing that, for now, VF can capture consumers at lower- and mid-tier retailers, but "when they shift back up to luxury we can catch them there as well."
Cardin's Newspaper Revitalization Act would allow newspapers to operate as nonprofits for educational purposes under the U.S. tax code, giving them a similar status to public broadcasting companies.Senator Cardin says that the "bill was aimed at preserving local and community newspapers, not conglomerates which may also own radio and TV stations." According to other things I've read, though, it is not the smaller local independents that are hurting the worst, because they are not facing as much competition as the big metro dailies, and they are not over-extended financially as the chains are.
Under this arrangement, newspapers would still be free to report on all issues, including political campaigns. But they would be prohibited from making political endorsements.
Advertising and subscription revenue would be tax exempt, and contributions to support news coverage or operations could be tax deductible.
A group of financial wizards looked into their crystal ball Tuesday and saw some good news.We'd all rather that the recession ends tomorrow, of course, but year-end doesn't seem all that far away.
The recession will ease by the end of this year and companies will begin adding workers, signaling the end of the worst economic downturn since the Great Depression.
For the past two weeks, the percentage of respondents in The Gallup Poll who say the economy is getting better has been steadily ticking up. Monday through Wednesday, 29% took the optimistic view — the highest number since July 2007.And finally, more specific to our business, we see Wall Street rallying on good news from consumer products companies and retailers:
Better-than-expected earnings from big consumer brands Best Buy, ConAgra Foods and Dr Pepper Snapple Group sent the Dow Jones industrial average up more than 174 points Thursday to its highest level in six weeks. It has surged 21 percent since hitting a nearly 12-year low on March 9.Put it all together and we get ... nothing definite, but perhaps some reason for cautious optimism.
Discount Pricing of Consumer Goods: The Subcommittee will continue its examination of the elimination of the nearly century-old ban against manufacturers setting a minimum retail price as a result of the 2007 Supreme Court decision in the Leegin case. Allowing retail price maintenance has the potential to seriously harm discount pricing and retail competition. Senator Kohl intends to seek passage of the Discount Pricing Consumer Protection Act (S. 148), his bill to restore the ban on vertical price fixing.There are few guarantees in life, but I'll be shocked if this doesn't pass.
NSI Marketing Services (NSI), the St. Louis based channel marketing services firm, that provides technology-enabled marketing administration, communication and research solutions, has acquired privately-held CoAMS, Inc. In announcing the acquisition, Mark Mantovani, President and Chief Executive Officer of NSI, called the event “pivotal” as it “brings together two established firms with long track records in providing first-class channel marketing services to world-class clients.”NSI was formerly known as The National System. They have a variety of channel marketing services, to which CoAMS' administrative offerings would seem a good complement.
The government's stimulus plan won't work as planned if we don't get consumers spending again. But in the nearly $800 billion package, there is one thing missing that would surely help accomplish this: advertising. To get people spending again, and the economy moving, the government needs to provide help for businesses in America to advertise their products and services.The author says that companies should receive a tax credit for advertising.
The acquisition — which consists primarily of FGI’s client and supplier contracts and “other assets” — comes immediately after the two companies agreed to settle their lawsuit in midtrial over whether Rupert Murdoch’s News America had sabotaged FGI’s business by lying to its customers and hacking into its computers.
Coupon use rose 15 percent in the last three months of 2008, compared with the same period of 2007, said Charlie Brown, vice president of marketing at NCH, the redemption unit of Livonia, Mich.-based Valassis ...Apparently the percentage of coupons redeemed must also be increasing, since manufacturers produced only 5% more coupons. Low redemption rates are one of the biggest complaints I usually hear from manufacturers. NCH, of course, is quick to rattle off the benefits of coupons:
Larson rattled off the grocery coupon's various effects: They draw attention to a product, lower its price for past buyers and attract new ones, generate consumer "pull" during soft sales periods, remind even nonclippers of the product's existence, create a marketing synergy benefit when coupled with in-store specials, and they limit growth of private-label competitors.
For starters, the store is only one level and 122,000 square feet - smaller than a typical store - making it easier to shop, she said.In terms of size and the single-story layout, Macy's seems to be taking a cue from Kohl's. Additional stores of this type are coming soon to Texas, Idaho, and Montana.
It's also designed with four entryways and extra-large dressing rooms featuring waiting areas with televisions. The store also features price-checking stations where customers can scan merchandise.
"One of our competitors (think funny-sounding European name) recently announced they will be downsizing their pints from 16 to 14 ounces to cover increased ingredient and manufacturing costs and help improve their bottom line," the statement said. "We understand that in today's hard economic times businesses are feeling the pinch. We also understand that many of you are also feeling the same, and think now more than ever you deserve your full pint of ice cream."I can see Ben & Jerry's having some fun with this, but I guess Haagen-Dazs has found itself caught between rising commodity costs and retailers who won't accept price increases. Cutting down sizes has been a traditional method of avoiding price increases, but it's one thing to shrink a candy bar or fill a cereal box a bit less full, and quite another to redefine accepted units of measure.
According to Bloom, CVS shoppers had for years expressed a desire to purchase high-end cosmetics and skin-care products in a convenient location with great service. CVS certainly had enough convenient locations—60% of the female population in the U.S. lives within five miles of one of its 6,800 stores. The key was convincing the top brands to work with CVS. "Health and beauty is important to us, but suppliers have refused to sell us whole classes of products," says CVS CFO David Rickard.In the course of the video interview attached to the article, a CVS exec refers to the "Lauder Lipstick Index" as part of the justification for the new stores. I had heard the term a couple times recently, but wasn't clear just what it was, so I did a bit of research: It's an idea, proposed by Leonard Lauder, head of the Estee Lauder company, in 2002, that consumers will cut back on big-ticket items in a recession, but will compensate by splurging on a few small "affordable luxuries". Thus a woman might make herself feel better about canceling a proposed winter holiday by buying an upscale lipstick from Estee Lauder.
Bloom enticed vendors with a retail environment that looks nothing like a CVS drugstore—white tiled floors, brushed-metal walls, and sea-foam color accents. (The stores measure between 2,500 and 4,000 square feet and are connected to adjacent CVS stores via a breezeway.)
The retailer said that the stores were in “strongly Hispanic neighbourhoods” and would feature a “new lay-out, signing and product assortment designed to make them even more relevant to local Hispanic customers”. The staff will also be bilingual.
Wal-Mart’s Sam’s Club warehouse store also plans to open a 143,000 sq ft Hispanic-focused store called Más Club in Houston this year.
Other supermarket chains (e.g., Publix, HEB) are opening similar stores, and a great many retailers, including Walmart, are customizing some of their stores to reflect the demographics of their area. It probably is relevant, as well, that the head guy at Walmar's US stores was formerly the head of Walmart Mexico.
... IRI's research found that by the end of last year, more than three-quarters -- 76% -- of consumers were making their purchase decisions at home, up from 60% in the first quarter.Just because people put together a shopping list at home, of course, does not mean that they follow it when they get to the store and see something they want. It does make sense, however, that people are more cautious in a recession, and will likely make fewer impulse purchases.
The FTC said the settlement substantially restores competition that was eliminated by Whole Foods' acquisition of Wild Oats, its closest rival.It does nothing of the sort, of course. It's unlikely that there will be many bidders for the locations to be sold, given the current glut of retail space. It's possible somebody will buy the Wild Oats name, but in reality there never was a competition deficit in the space -- Whole Foods' most serious competitor was not Wild Oats, it was the growing organic aisles/sections in every supermarket chain in the country.
The results have been impressive: Over the past year, our in‐store execution has grown to nearly double the industry average. Incremental sales assure us that we are on a good path to improving our customers’ shopping experience.The lesson here, I think, is not a new one. Information is only valuable if it is used. Walmart, for whatever reason, decided that the information it gained from tagging displays was not of sufficient value to use their resources to act on it. Walgreen felt differently. The numbers seem to support Walgreen's approach, but perhapr Walmart was looking at very different numbers from their efforts.
"Triplefin constantly works with our clients to make it transparent and easy for their staff, customers and other authorized users to create, execute and manage promotions," stated Jill Hein, Business Development Account Manager of Triplefin. "Triplefin has been a leader in promotion technology and execution for e-Commerce, DTC and retail channels, but it lacked a truly best-in-class technology for retail trade-spend. Flintfox is the answer, and I am very excited about the integration of Flintfox into Triplefin's Salefish technology platform," concluded Jill.Flintfox had had a relationship with Kineticsware before that company ran into financial problems.
Couldn't possibly tell you if it's true or not, but it's an interesting look. Not that anybody would ever hire me to do a graphics job for them.According to Information Resources, Inc., the Chicago-based market research firm, private label accounts for 17.6% of dollars and 22.5% of units at Wal-Mart. One securities analyst — Deborah Weinswig of Citigroup — has been quoted as saying that private label might skyrocket to 40% of dollars at Wal-Mart within the next three years. She figures that if Wal-Mart carries the top three branded products in a given category, it could substitute one of them with its own brand.Even if, as the article argues, the 40% number is too high, if 30% or so is more like it, that still means major food brands will lose ten to fifteen share points at the world's biggest retailer. What is that going to mean to them?
So Wal-Mart went deep on benchmarking its competition to understand where the product range started and stopped within a given category. Then it worked to achieve a clear offering — paring down to the right number of SKUs so that categories weren’t diluted and fuzzy. With SKUs cut by 10% to 50%, Wal-Mart has been able to achieve higher sales. Fleming says he hasn’t yet seen departments that have lost sales from SKU cuts.I'd hate the be the #3 brand at Wal-Mart right now.
Between 2008 and 2013, local ad spending will decline at a 1.4 percent compound annual rate to $144.4 billion. In contrast, the share of interactive ad spending will more than double from 9 percent in 2008 to 22.2 percent in 2013.The question for many traditional media (especially newspapers) will be whether they can grab a significant portion of the online growth. In a great many markets, the newspaper web site is the leading local site, but newspapers have not grabbed as big a piece of online revenues as they would like.
Traditional media -- including newspapers, direct, broadcast, Yellow Pages, out of home, cable TV and magazines -- are forecast to decrease from $141.3 billion in 2008 to $112.4 billion in 2013.I'm curious how much of the loss of revenue in local advertising is traceable to funding moving to in-store promotion.
Saks said it was expecting its vendors to provide products at price points more in line with the current climate.The Q4 price cuts, as much as 70%, caused Saks' margins to drop from 37% to 20%, at the same time sales were dropping 15%, Lower margins on lower sales is a nasty combo.
World's premier toy company Mattel is expected to open its first Barbie flagship store in Shanghai next month in Shanghai, the country's economic hub, in hope of a market expansion in China when its global sales contracted.A number of major brands and retailers seem to be looking at international expansion as a way of growing through the hard times. Mattel's sales in 2008 were down 1%, but Q4 was down 11%. Mattel has been in China for seven years now, according to the article, but this is their first major store.
The 3,500 square meter, six-floor Barbie flagship store along Shanghai's trendy Huaihai Road, is expected to open on March 7 to celebrate the brand's 50th anniversary, said Julia Jensen, Mattel's vice president of Public Relation and Communication International said in an e-mail to Xinhua.
"The market positioning of Barbie is quite different from Chinese toy brands. I don't think the flagship store would have much impact on the sales of Chinese toys," said Xie Min, the business department head of Huaihai Youth Articles Store, several hundred meters away from the pink Barbie flagship.
"China's toy market has long seen foreign brands including Winnie the Pooh and Mickey. Compared with them, Barbie is still less competitive in terms of its franchisers and product chain," says Xie.
K-C officially defines shopper marketing as "integrated-marketing programs based on a deep understanding of shopper attitudes and behaviors designed to build equity for the brand and differentiate the retailer while the consumer is in shopper mode and prepared to make a purchase," said Mark Scott, VP-sales and shopper marketing.It's often said that "you can't manage what you can't measure." It's equally true that you can't measure what you can't define. I've written before that I see Shopper Marketing as being the nexus of trade promo and brand advertising which, if correct, would mean that such promotions would need to be measured in ways similar to traditional media (e.g., reach and frequency), and also in trade promo terms (volume lift, incremental profit, etc).
"Not a lot of papers are operating at a loss," said John Morton, the veteran industry analyst. "There are roughly 1,400 daily newspapers. We only hear about the top markets. That leaves at least 1,300 papers out there."
Publicly owned newspapers averaged an operating profit of 10.8% in the first three quarters of last year, Mr. Morton said. That's not the margin enjoyed by newspapers when they were monopolies, but it's not nothing either.
Ten percent plus is better than the oil companies were doing when gas was at four bucks (something to think about the next time a paper runs an editorial denouncing "excessive profits"). The problem is that it's only half what profits were when projections were made justifying, for example, the $13 billion debt from the buyout of the Tribune Company (now in bankruptcy).
Ad Age has some interesting stats. For example, Lee Enterprises, which just reported a loss of $889 million, actually had a 20.8% operating profit; the loss was from write-downs on the value of holdings. Even Tribune Co. made a modest 5.4%.
So, once again, gloomy as the picture is for newspapers, the business is not going to disappear. The fundamentals are sound, and after the weakest players are eliminated and the rest downsized, the survivors will likely prosper.
"Our products don't deliver value [just] because the prices on the shelves are lower," A.G. Lafley, chief executive of Procter & Gamble Co., told analysts and investors at a conference here.
Like several other industry executives who spoke at the event, Mr. Lafley said his company doesn't plan to roll back the significant price increases it has made over the past several months.
There also is a report in the article that Safeway suspended shipments from P&G in late December, but that appears to have been an inventory decision, rather than part of the pricing fight.
Executives from Clorox, Nestle, and Kimberley-Clark are also quoted as saying they will hold on to their price hikes.
The new mantra for one of America's oldest retail categories: When the economy rebounds, everything will go back to the way it was.It's probably true. For those chains that survive the recession, things will return to normal. "Normal" for this channel, however, is a long, slow decline. In the almost forty years I've been observing department stores (my first job in this business was in the advertising department of Goldwaters in Phoenix) I have watched them go through several economic cycles. In each recession, they hit a bottom that was a bit lower than the last time; in each recovery they reach a top that was a bit lower.
Kmart has taken its shoe business in-house and is introducing low-priced sneakers endorsed by NBA player Al Harrington and women's shoes aimed at attracting the "frugalista," a retail executive said Wednesday.
"We were neglecting to serve our Hispanic and African-American customers," said Nick Grayston, who served as CEO of Foot Locker's U.S. business before becoming president of footwear for Hoffman Estates-based Sears Holdings Corp. last June.
"We've injected some fashion in our shoes, which had been sadly lacking," he said.
They have a line of men's/boy's sneakers endorsed by Harrington (of whom I've never heard, but I'll assume he's a mildly big deal), priced as low as $19.99 -- which seems to be taking a page out of Steve & Barry's book.
National numbers are not yet in, but regional Girl Scout councils nationwide are seeing the impact of the down economy, as well as bad winter weather, in declines as large as 19% in pre-order sales, which took place January through early February.I will do my duty to jump-start the economy by buying a couple extra boxes of Thin Mints.
The move is a sign of the deeper role consumer-technology companies are playing in the retail business, despite the many risks of straying from their traditional businesses of making hardware and software. Apple, of Cupertino, Calif., encountered widespread skepticism when it first began opening its own retail stores in 2001. [...]As retailers become their own suppliers through private labeling, and as the number of potential channel partners shrinks through consolidation, it seems inevitable that we will see more suppliers playing retailer.
At the same time, some large electronics retailers have fallen on hard times amidst the weakening economy. CompUSA Inc. last year closed most of its retail stores, while Circuit City Stores Inc. is in the process of shutting down all of its stores and laying off more than 30,000 employees.
Unilever spokeswoman Aurelie Gerth said Delhaize, which had already removed 70 other Unilever goods before October, refused to buy all the brands the company offered and wouldn’t guarantee new products would get shelf space. Though talks continue, there’ll “probably not be a solution this week,” she said.Throwing out one of the world's leading CPG companies seems like a pretty bold step, and one suspects Unilever won't be out for long. But I was struck by this step that Delhaize has taken:
“We didn’t agree to their terms, so they refused to grant us discounts,” said Delhaize spokeswoman Liesbeth Rogiers. “That would really boost our purchasing prices and we can’t and won’t pass those on to our customers.”
Delhaize plans to sell the remaining Unilever products it has in stock, and has put up signs in its stores directing shoppers to alternative brands and private labels, Rogiers said.In regard to food prices in general, a bit of perspective might be in order. This item from WomensDay has, among other things, comparative prices (adjusted for inflation) for food products -- in the 1950s, a dozen eggs cost the equivalent of $5.29, and in the '70s a pound of round steak was $9.33. The next time I gripe about prices, I'll try to keep those in mind.
The Procter & Gamble Co. (P&G), a pioneer in the use of Electronic Product Code (EPC) technologies in the supply chain, has ceased placing EPC tags on promotional displays bound for Wal-Mart's RFID-enabled stores.Although I haven't followed the subject closely, from the early days of RFID I have thought that its most significant application, from a trade promo standpoint, was in tracking displays for purposes of compliance monitoring. The article seems to support this view, quoting a P&G exec: "... the work we conducted with Wal-Mart has shown that this use of the EPC can deliver improved promotional effectiveness, better sales and, most importantly, higher shopper satisfaction."
P&G's managers, the contract manufacturer explains, "were asked to put the tag on and absorb the cost of that, and I think they felt Wal-Mart should be doing more to live up to their end of the bargain. Why put the tag on if Wal-Mart's not going to act on the data?"P&G of course is not going to say anything like that. But they seem to hint at it:
"We've been working on these applications for close to 10 years. We have learned that to secure sustainable benefits, the use of EPC requires deep levels of collaboration between the manufacturer and the retailer, and a commitment to use the actionable visibility provided by the EPC to change business processes. "Hmmm ... Walmart not collaborative?
LAS VEGAS -- Lisa Howfield, general manager of KVBC, the NBC affiliate here, watched last year as the broadcast-television business began to shrink. She started cutting. She combined departments. She made do with old equipment, and did away with luxuries like yearly sales getaways.To the combination of media fragmentation exacerbated by the economic and advertising downturn, you can now add the threat (beginning to be openly discussed by network honchos) that the networks may decide they don't really need local affiliates, given the levels of cable/satellite penetration. Why, the networks are asking themselves, should we split the (shrinking) ad revenues with the affiliates, when most of their viewers are watching us on cable? Why not just switch our programming to cable and keep all that lovely money for ourselves?
In December and January, she laid off 15 employees, or 6% of her staff. After the weatherman left last month, one of the morning news anchors took on both jobs. "It's like a bad roller-coaster ride," says Ms. Howfield. Her station's full-day viewership is down 7.7% this TV season from the same period last year, according to Nielsen Co., and Ms. Howfield expects her ad revenue in 2009 will be down 30% from 2008.
But analysts say they're already seeing an increase in so-called promotional dollars, or money that vendors give to retailers to subsidize temporary discounts like two-for-one offers.I have ever since been musing on that sidelight, and wondering whether it might in fact be a key component of the story. This is, I hasten to say, pure speculation, and I have no way of knowing whether it has any foundation in fact.
When Saks Fifth Avenue slashed prices by 70% on designer clothes before the holiday season even began, shoppers stampeded. "It was like the running of the bulls," says Kathryn Finney, who says she was knocked to the floor in New York's flagship store by someone lunging for a pair of $535 Manolo Blahnik shoes going for $160.Other high-end retailers followed suit, as did many of the designers who have their own retail outlets. But will consumers who grow accustomed to designer shoes at $160 be willing to pay $535 again when the recovery comes?
Saks' deep, mid-November markdowns were the first tug on a thread that's now unraveling long-established rules of the luxury-goods industry. The changes are bankrupting some firms, toppling longstanding agreements on pricing and distribution, and destroying the very air of exclusivity that designers are trying to sell.
... New York design house Derek Lam, which is known for cocktail dresses that sell from $1,200 to $3,500, is opening its own New York store next month. To protect itself against other retailers' discounts, it's thinking about creating "special editions" of its lines that wouldn't be sold in Saks and other retailers.In hindsight, Saks admits that it may have over-reacted.
"We didn't need to do what we did in accessories," Mr. Frasch says. High-end shoes and handbags would probably have sold out, even at higher prices, because shoppers see them as more practical wardrobe updates than another new outfit.
The retailer is still not out of the woods. Saks shares were recently trading at $2.72, down from $22 in December 2007. In mid-January, it laid off 1,100 people, or 9% of its work force, and could close some stores.
This year, Saks is spending about 20% less on merchandise to keep inventories lower, but Mr. Frasch acknowledges the number is only a guess. The luxury-goods business is "absolutely flying blind," he says.
His boss, Mr. Sadove, agrees. "One of the big questions that people are asking," he says, is: "Will people ever buy at full price again?"
I'll be interested to see if the Saks approach or the Abercrombie & Fitch approach (refusing to cut price) is more successful.
The move follows an August announcement by P&G that it was seeking franchisees to expand the car wash centers throughout Ohio and Kentucky, including with locations in the Dayton area. At the time it operated two local operations – in Deerfield Township and Evendale – and offered services at Fountain Square garage in downtown Cincinnati.On the one hand, using the Mr. Clean name on car washes certainly sounds like a natural brand extension. On the other, going into the car wash business seems rather distant from P&G's core competencies. On the third hand, who am I to question P&G?
Now, Mr. Clean Car Wash operates 16 locations, including the two corporate-owned sites. Three other franchised locations are in the works.
[Chrysler] has urged its dealers to take on more inventory in February and March as it looks to boost revenue ahead of a first quarter deadline to secure additional government aid and prove that it is viable.The problem for the dealers is that they already have an average of five months inventory on their lots.
Automakers book revenue when vehicles are shipped to dealers, not when they are sold to customers.
Toy maker Mattel, Inc., which posted a 49 percent drop in fourth-quarter profit, said its focus this year will be "cost and spending reductions." It added that it's cutting back on underperforming products. Whether that means fewer choices with Barbie or Hot Wheels isn't clear yet. [...]Another way we will see fewer choices is likely to be retailers cutting not just assortments (carrying a dress in three colors instead of five), but also cutting suppliers and brands:
The caution can already be seen in the lean assortment of spring items in stores like Banana Republic and AnnTaylor, which have empty space in areas once teeming with tables of merchandise.
"How many different brands of men's black shoes do we need?" is one example of the questions Macy's is asking itself, Chief Executive Terry J. Lundgren told the The Associated Press this week after the chain announced it was cutting 7,000 jobs. "We have to do a better job in turning our inventory," he added.
Researchers from Ohio State University and Illinois State University tested how touching an item before buying affects how much they are willing to pay for an item. A simple experiment with an inexpensive coffee mug revealed that in many cases, simply touching the coffee mug for a few seconds created an attachment that led people to pay more for the item.
The results, which were published recently in the journal Judgment and Decision Making, found that people become personally attached to the mug within the first 30 seconds of contact.
Handling the mug increased the value of the mug by significant percentages, based on what participants were willing to pay in an auction setting.
Not definitive, of course, because it's just one study. But it seems intuitively reasonable, and has implications for online and bricks & mortar marketers.
The retailer will eliminate its current structure -- a relic of its May Co. acquisition that had stand-alone divisions such as Macy's Central and Macy's Florida -- and streamline functions into two corporate offices. Marketing, merchandise planning, buying and stores' senior management will be located in New York, while finance, human resources, legal and real estate will be housed in Cincinnati.That's cool. But this is just an extension of a change they announced a year ago, and that I commented on last April. They don't exactly turn on a dime, do they?
It was different and it was fun. This was a case where the medium was at least a big part of the message. The content was important, of course, but it was also an opportunity for all of us to try out a new medium and see whether it can be an effective way to communicate.
GM and Chrysler "have implemented wholesale incentive programs where they basically say to get the incentives for the inventory you want, you have to buy more inventory," AutoNation Chief Executive Mike Jackson said Thursday in a conference call to discuss fourth-quarter financial results.The manufacturers want dealers to order as many cars as they did last year, but AutoNation is forecasting a 24% sales decrease.
"I think this is the wrong thing to do," Jackson said. "We are not playing that game."
[...]
"The channel is full, and they are trying to stuff more in," he said.
But analysts say they're already seeing an increase in so-called promotional dollars, or money that vendors give to retailers to subsidize temporary discounts like two-for-one offers.The Cincinnati Enquirer carried a similar article, noting that Walmart is talking tough:
"We worked with them when raw-material costs rose," said John Simley, a Wal-Mart spokesman. "Now that they've dropped, we want to see prices come back down. Our suppliers know we are the advocate of the consumer."
"Because of what's happened, retailers are being more conservative with inventory, and so the need to have that panicked price-cutting is lessened," says Wells. And in addition to better inventory management, adds an NRF spokesperson, stores are "trying to be efficient as possible, to do more with less in their advertising, and sometimes changing their merchandising mix."
The venerable humor magazine today announced that starting with issue #500 in April, it will move to a quarterly publication schedule from its current monthly. The magazine’s version for younger readers, MAD Kids will cease publication with the issue on sale February 17th, while the final issue of MAD Classics will go on sale March 17th. Both of the spinoff magazines launched in 2005. Circulation numbers for the magazines were not readily available.Just about every item I've seen on this has some variation on "What, me worry?" in the header or text. It is worrying (to work it in here, as well) that the economy has damaged even such an institution. Though, in reality, it is probable that (as with many/most recent victims in media and retail) the economy has merely sped up Mad's partial demise. When I was a kid, I read Mad religiously (if that's the right term), but how many kids are doing so today? Times change, and media changes with it.
Handling the news with style typical of MAD, Editor John Ficarra said, “The feedback we've gotten from readers is that only every third issue of MAD is funny, so we've decided to just publish those."
"While the industry as a whole is very supportive of the syndicated service, many clients, in the face of the current economic environment, are not in a position to fully fund a syndicated service at this time."I hope the initiative is revived. Although I was initially skeptical about it, I eventually came around to the view that it would provide valuable data, and now I'm disappointed not to see that data, and (more importantly) not to see how it is used to improve targeting of in-store promotions.Nielsen said it will keep providing custom work measuring and analyzing shopper marketing "until a syndicated service is financially viable for many of our clients."
... the cost of PRISM data, which an executive for a consortium member said ranges from the low to mid-six figures annually (and up to seven figures for bigger marketers), is particularly daunting in the current economy.A million-dollar (to choose the higher end of the range) expenditure to measure and improve the effectiveness of a billion-dollar expenditure seems quite reasonable to me. But again we are playing by different rules today.
About 42% of GameStop's overall gross profits come from its secondhand business, compared with half that level for new games. "When you consider that most retailers operate on single-digit margins, it's astronomical," said Evan Wilson, an industry analyst with Pacific Crest.The big contribution to the bottom line is due to the margins on used products -- typically the used games are sold for double what the store gives the former owner (and that payment is in credit toward future purchases). Thus GameStop averages 48% on used product, compared to 20% on new games and a miserable 7% on new consoles.
... Macy's, Saks Fifth Avenue, Dillards and Sears have considerable brand strength, though they didn't make the list. All have the opportunity to capitalize on their brand to improve their financials.But the most glaring omission was ...
Traditional grocery earned the weakest customer loyalty scores. Over-reliance on discounts, rewards and promotions undermines any move toward a meaningful proposition and results in low brand strength.If customer loyalty is a key measure of brand strength (and most would agree it is) then it's hard to argue that supermarkets have strong brands. Interbrand notes that further undermining the brand names of the leading chains is their multiple banners (Kroger includes Ralph's, Fry's, etc). And they also mention how excessive reliance on promotional funding can undercut branding:
The grocery sector also often misses out on opportunities for product differentiation, since small entrepreneurial manufacturers can’t afford to supply supermarkets due to the cost of supporting their promotions and the payment of slotting fees. In the U.S., there are a trillion dollars moving from the manufacturer to the grocer every year. As long as their vendors continue to pay for play, supermarkets may see no need to understand and serve the shoppers in their stores.That last sentence sounds a bit harsh (and that's the first time I've heard that trade promo equals a trillion (!) a year in the supermarket channel alone), but I do agree that supermarkets harm themselves by locking out smaller suppliers, who could help them create a brand difference. Unfortunately, they're now hooked on trade promo, which is the difference between profit and loss, and kicking the habit (or even cutting back substantially) might be too tough a challenge.
I've often advanced this theory (as have others), which says that we are moving toward a retail landscape in which there will be only two significant outlets in each channel. I've used as examples:It's certainly beginning to look like the betting should be on the Walmart Variant.
- Best Buy/Circuit City
- Home Depot/Lowe's
- Barnes & Noble/Borders
- Target/Wal-Mart
- Kroger/Super-Valu
- etc.
There are a corollary and a variant to this theory. The Manufacturers’ Corollary holds that there will be only two suppliers in each product category. The logic behind this is that suppliers will have to be large enough to deal with the retail giants, and is supported by the tendency of the retailers to want to improve efficiency by winnowing their supplier base. Supporters of this corollary point to P&G’s acquisition of Gillette. They argue that P&G was already bigger than its competitors, so the acquisition was not intended primarily to strengthen their hand vis-Ã -vis Unilever, but rather its purpose was to allow them to sit at the table with Wal-Mart as equals.
Which brings up the Wal-Mart Variant to the Two-Per-Channel Theory. It holds that the final two in each channel will be:
- Best Buy/Wal-Mart
- Home Depot/Wal-Mart
- Barnes & Noble/Wal-Mart
- Target/Wal-Mart
- Kroger/Wal-Mart
- etc.
Leibowitz, a Democratic commissioner with broad Capitol Hill experience, is expected to be named to head the FTC, at first in an acting capacity, the sources said. Commissioner William Kovacic, a Republican, now holds that job.
The five-person FTC also has an open seat.
The rumors go on to say that Einer Elhauge, a Harvard law professor who has advised the new president, will be appointed to head the Justice Department's antitrust division.
Borders Group announced Monday that it has shaken up its top management, as well as a double-digit drop in holiday sales from a year ago and a potential delisting from the New York Stock Exchange.Some are pointing to Marshall's experience as a turnaround specialist in his previous roles. No doubt that's the big reason for his appointment, but I can't help noting that he will probably bring a CPG/food mindset to the book biz, helping to further the convergence of retail practices.
Ron Marshall, who is a founder and principal of Wildridge Capital Management and a longtime retail executive, will replace George Jones as Borders’s chief executive. Mr. Marshall, 54, will also serve as a director. Borders also named a new chief financial officer, chief administrative officer and a new top executive for merchandising and marketing.
"There is a huge potential in the Asian-American market," Fang said. "But we're facing the difficulties and the reality of the newspaper environment and the economic environment."Somebody will serve the needs of this big and growing market, but it probably will not be in the same format.
Food/beverage firms +0.52%Another important point was that the food/beverage companies were more likely to use ROI measures to determine proper spending levels (48% to 35%), while the non-food companies were more likely to set their spending in comparison to competitors (26% to 14%).
Non-food CPGs –5.02%
Dow Jones Industrial Average –4.72%
Use of predictive simulation and optimization tools is also linked to faster evaluation of promotion performance among food & beverage firms … For food & beverage companies in particular, this is associated with significantly faster promotion analysis times – a mean of 25 days, versus 35 days for consumer products firms who use the same tools. Notably, food & beverage manufacturers that use predictive simulation tools are able to drive post-event performance analysis time down from a mean of 44 days for non-users – a time savings of nearly 43%.
I find it interesting that use of the tools makes no difference to the non-food companies in terms of speed of analysis, while it makes a huge difference to the food companies. It was outside the area of this study, but it would be good as a follow-up to determine what the differences are in how the companies use the tools. There are several important summary points, and again I’ll suggest that you access the full webinar and/or white paper, but this one sentence says it all, I think: “The study findings suggest that the use of predictive technologies paired with the proper focus and discipline can help make the use of trade dollars far more effective.”
NexCen wanted to unload Bill Blass from its books months ago but only just now made the sale. And like every pair of Manolos in this town, they had to mark it waaaaay down to get it out the door. Though NexCen sought $25 million for the designer business in September, they sold it for a mere $10 million. The lucky buyer is Peacock International Holdings LLC, a men's dress shirt and neckwear company.When Blass retired and sold the company less than a decade ago, it was doing $700 million annually. The article doesn't say what sales are now, but given that the ready-to-wear line has been shut down, it would seem likely that sales are a fraction of that.
The latest poll from Pew Research Center says that more people cite the internet as their prime source of news than newspapers.Clothing makers, balking at the deep holiday discounts offered by retailers such as Macy’s Inc., may force department stores to eat more of the markdowns.Some analysts are saying that stores used to guarantees of 40% may have to settle for 35%, and that mid-range stores like Penney may see their guarantees cut from 35% to 30%. The cuts could save suppliers a billion or more. There may be some interesting conversations at the NRF meeting next month.
Liz Claiborne Inc., HMS Productions Inc. and a raft of apparel companies plan to push back at the retailers who have slashed some prices by 70 percent amid what’s shaping up as the worst holiday shopping season in four decades.
Consistent and balanced enforcement of our nation’s antitrust laws, including the Robinson-Patman Act, is especially important to ensure a level competitive playing field for entrepreneurial businesses. N.G.A. encourages you to appoint a Chairman of the Federal Trade Commission and Assistant Attorney General for Antitrust that will enforce the law in a consistent and balanced manner. A level playing field provides the appropriate marketplace environment where diversity thrives and consumers are well served with an abundance of choices.I have mixed feelings on R-P enforcement: I agree with the NGA that there are serious abuses in trade promo and other channel practices, but I have doubts about R-P itself, which surely ranks among the most poorly-written major pieces of legislation ever (in the famous Fred Meyer decision, the Supreme Court wrote, "Conceding that the Robinson-Patman amendments by no means represent an exemplar of legislative clarity ..."). It's tough to comply with a law that no one quite understands.
For 2009, sales growth for the year (excluding automobiles and gasoline) is forecast to approach 2% growth compared with the 2.3% average growth for 2008 through November, based on data reported by the U.S. Department of Commerce.I wonder if it's realistic to expect to regain 5% annual growth in retail sales -- GDP growth and income growth were both below 5% over the recent past, so is such a figure sustainable for retail sales over the long haul? I'm not an economist, but it seems like perhaps we should recalibrate our expectations -- both as consumers and as marketers.
TNS Retail Forward anticipates a rebound to occur in 2010 and gain momentum through 2013, when annual increases in sales will again approach the 5% average growth rate of the past 10 years.
"It's dead, this is it, this is the last Christmas, without a doubt," said Kugler, 34, a Burbank businessman. "I was the last one buying VHS and the last one selling it, and I'm done. Anything left in warehouse we'll just give away or throw away."The real interest in the article is simply reading about somebody who sees opportunity where the rest of us see a product that is far enough past the end of its lifecycle that it has started smelling a bit. He unabashedly describes himself as a bottom-feeder, but his bottom-feeding has done quite well for him: "I'm not sure a lot of people are going to miss VHS," he said, "but it's been good to us." And he's looking forward to reprising his success as DVDs are replaced by Blu-Ray.
