Friday, February 29, 2008

iTunes is #2 music retailer

iTunes is now outselling Target and Best Buy, moving into second place in the music retailing biz.

The survey, compiled by New York-based market researcher NPD Group, showed that Cupertino, Calif.-based Apple Inc.’s online iTunes music store edged to the number-two music retailer, ranking behind Bentonville, Ark.-based Wal-Mart Stores Inc.

According to NPD, legal downloading accounts for 10% of music sales in the US.

FTC chair resigning to join P&G

Deborah Platt Majoras, who has chaired the Federal Trade Commission for the past four years is resigning.

Majoras, 44, will join Procter & Gamble in June as vice president and general counsel, with primary responsibility for its global antitrust and litigation practice areas, company spokeswoman Robyn Schroeder said.

The White House has not named a replacement, FTC spokeswoman Nancy Judy said. A successor will likely be one of the two other Republican commissioners, William E. Kovacic and J. Thomas Rosch. Commissioner Pamela Jones Harbour is an independent, and Jonathan Leibowitz is the panel's lone Democrat.

The FTC is the agency responsible for enforcing the Robinson-Patman Act. The amount of time they spend doing so can be judged from the fact that it is totally unmentioned in the Washington Post article I've linked to.

How Is Wal-Mart Like Booze? -- Part 2

About a year ago, I did a post with this title, the point of which was that a little bit of Wal-Mart might be good for you, but going overboard can leave you with quite a hangover.

Cott is learning the lesson the hard way. Wal-Mart has apparently decided to switch out its soft drink assortment, bringing in more Cadbury Schweppes (RC, Diet Rite, etc) and less Sam's Club. A bit unusual, when mostly we hear about more private label rather than less. But not something earth-shattering -- unless you're Cott, and you make Sam's Club, and Wal-Mart is 40% of your volume.

Shares in Cott Corp. were crushed yesterday, after the company confirmed Wal-Mart Stores Inc. will reduce the amount of shelf space it devotes to the company's carbonated soft drinks.

The company's stock dived about 38% on the Toronto Stock Exchange to $2.50. The drop came on the heels of a 20% decline the previous day amid rumours the Arkansas-based retailing giant would cut space and marketing support for Cott brands.

Wednesday, February 27, 2008

EU continuing on Intel probe

The European Union is continuing with its investigation of Intel:

Electricals giant DSGi had its headquarters in Hemel Hempstead raided yesterday, as part of the European Union's investigation of chipmaker Intel.

The EU is investigating allegations that Intel abused its dominance of the market for central processing units.

Intel's own offices in Munich and other retailers' offices were also raided. The investigators are looking for information related to allegations of excessive rebates.

Similar investigations are in progress in Korea and Japan, and a lawsuit has been brought in the US by AMD. In addition, last month the state Attorney General in New York served a subpoena for a state investigation:
Attorney General Andrew M Cuomo of New York issued a wide-ranging subpoena to the Intel Corporation on Thursday as part of an investigation into whether the company violated federal or state antitrust laws in the way it priced and sold microprocessors.

The investigation follows a preliminary look at Intel by Mr. Cuomo’s office over several months and is the latest in a string of legal challenges the company has faced around the world.

Coupon boss indicted

The former head of International Outsourcing Services, the big El Paso coupon clearing house, has been indicted.

For years, Chris Balsiger ran the nation's biggest clearinghouse of discount coupons redeemed by consumers at supermarkets. But he still didn't care too much for the industry.

"It's a lying, cheating, dirty business," he says.

Now the 54-year-old multimillionaire is facing a 27-count federal indictment, charged with leading a scheme that bilked some of the nation's largest coupon-issuers out of at least $250 million. He denies the charges.
He's also being sued by several grocery/CPG companies, including Kraft and Pepsico.

Some of the things they are alleged to have done (such as "gang-cutting") are things I have heard about for years from friends in that side of the business (I have very limited experience with couponing). The article linked here has a lot of fascinating information, like throwing coupons into a cement mixer to make them look used.

Fresh & Easy not meeting goals?

This isn't the first time I've heard about it, but this Supermarket News report seems pretty credible.
... the 52 Fresh & Easy stores that have opened since November are averaging weekly sales volumes of $50,000 to $60,000, or about $5 a square foot — below the goal of $200,000 a week and $14-$22 in sales per square foot the company had projected. A spokesman for Fresh & Easy declined comment when contacted by SN. Prevor said the volume estimates are based on discussions with competitors, vendors, industry observers and Fresh & Easy store managers, "who all confirm each other."
Nonetheless, they are still planning to open 18 stores in the SF area, although they may be delaying the opening a bit, and there's even a rumor they may come to Chicago, although I'm not sure I take it too seriously.

I doubt Tesco will be too greatly discouraged by a slow start. I can't imagine they came in for anything other than the long haul.

Update 2/28: Financial Times reports that Tesco is denying any problems:
Tesco said in a statement on Tuesday that the stores were “proving very popular”. It added: “What we are seeing is growing sales, growing customer numbers.”
The FT report also quotes another analyst as saying the Fresh & Easy stores are short of goal, but this analyst's numbers are wildly different from the one quoted above:
He wrote in a note to clients that the 50 stores opened so far around Los Angeles, Las Vegas and Phoenix could be averaging sales of $170,000 a week, against what he said were planned initial sales of $200,000.
$170k a week is certainly short of goal, but it's also a heck of a lot better than the $50k-$60k the other guy is claiming. Damages my faith in analysts, because one or both of these guys is way off.

End of the road for the Albuquerque Tribune

Another one bites the dust. The Albuquerque Tribune has ceased publication. I was surprised to learn it was still around -- a city the size of ABQ can't support two papers (at the end, circulation had dropped below 10,000). The Cincinnati Post went under as of New Years Day, and I'm sure most of the rest of #2 papers in mid-sized markets will be gone soon.

I understand The owners of the Chicago Sun-Times are having a hard time finding buyers, although I believe Chicago is still big enough for two papers, at least for a while.

Dillards seeking a niche

Dillards has decided to build smaller stores, and seek a more fashionable customer base.
As part of its turnaround strategy, Little Rock, Ark.-based department store chain Dillard's plans to offer more fashionable merchandise in smaller stores, in hopes of positioning itself above Macy's and Belk, and below Nordstrom and Bloomingdale's, according to
The new stores will be around 170,000 square feet, compared to current stores of 200,000 (which doesn't seem like much of a change to me), and will be located in "lifestyle centers" instead of traditional malls.
The company is "trying to evolve from moderate to better prices and update from traditional, basic product to more enticing fashion assortments," said William T. Dillard III ...
They're planning nine new stores this year. I wish them well, but how big a niche is there "above Macy's and Belk, and below Nordstrom and Bloomingdale's"?