Check out consumer product powerhouses including Procter & Gamble, Kraft and Colgate, inundating Wall Street with quarterly reports on Wednesday.

The reports largely showed that the companies are finding successful ways to navigate the consumer spending slowdown and the commodity price surge that has raised their cost of doing business.

P & G, world’s largest consumer products maker, with brands ranging from Pampers diapers to Olay skin-care products, posted higher quarterly profit. It said cost controls helped offset soaring prices for oil and other commodities.

Kraft, whose brands that include Oreo cookies and Oscar Mayer lunch meat, reported a drop in quarterly profit as the largest North American food maker company was hit by soaring costs for oil and ingredients such as wheat, and spending on new products and marketing. But the results were better than analysts were expecting as price increases and new products lifted sales.

Colgate-Palmolive posted a higher-than-expected quarterly profit, boosted by strong sales outside the United States and higher prices that helped offset soaring commodity costs. 

And Kellogg, the world’s largest breakfast cereal maker, posted higher-than expected profits as price increases helped offset soaring commodity costs.  The maker of Frosted Flakes and Keebler cookies also raised its dividend and stood by its full-year earnings forecast, though it said it expects commodity costs to rise more than originally planned. 

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Reynolds American profit disappoints, stock dips

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OfficeMax net up on one-time gain; sales fall

(Photo: Reuters)

Check out those federal rebate checks.
 
Tax rebates began arriving in U.S. consumers’ bank accounts this week as part of Washington’s $152 billion stimulus package.  (Direct deposits this week and paper checks next week.)

Retailers have various strategies for attracting those rebate dollars. Many of them are offering 10 percent bonuses when the checks are converted to store discounts.

Then there is Wal-Mart, which will cash the checks for free. That’s it. Cashing the checks for free. No bonus, like Kroger or Supervalu are offering. Just cashing the checks for free.

Of course, unlike other retailers, Wal-Mart will cash the checks free without requiring a purchase in the store. Obviously, if you have to put the funds from your rebate onto a Kroger or RadioShack gift card, you would spend the money in those stores.

“We’ll focus on providing real, long-term value on the items that matter and put shoppers in control of their own spending,” said John Fleming, executive vice president and chief merchandising officer, Wal-Mart Stores, U.S.

So you don’t have to spend the money at Wal-Mart. But once you cash the check there, the company is also cutting prices on everyday items like shampoo, lunch meat and cereal to coincide with the checks arriving.

Overall, Customer Growth Partners estimates that $40 billion of the rebate payments will be spent by consumers. The rest will be used for debt reduction and savings. But that, along with $15 billion in cash flow from consumers no longer paying to heat their homes as that season ends, could add $55 billion in retail spending in the coming months, the research firm said.

“One swallow does not a summer make, but our visits to the malls and the Big Boxers over the past week showed the strongest traffic of the year, now that heating bills are paid off,” Customer Growth Partners President Craig Johnson said.  “And at least at the Apple stores and some teen Apparel players — and of course at Costco and Wal-Mart — we’re seeing the biggest crowds since Christmas.”

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The convoluted history of attempted deals in the candy industry are enough to make an Oompa-Loompa's head spin, but Mars' $23 billion takeover of Wrigley may force rivals to reassess their options for consolidation, Bill Wrigley Jr said on Monday.

(The deal also proved that Warren Buffett "chews gum and identifies value at the same time," as the FT's Alphaville blog noted.)

"There have been lots of rumors in the confectionary space over the past few years, and very recently, and no one can say exactly what's going to happen ... but I think it's likely that we'll see more consolidation," Wrigley said on a conference call. "The folks at Hershey, the folks at Cadbury, the folks maybe at Nestle have to think about what they want to do in this space and will evaluate their opportunities."

The deal between Mars, the world's biggest chocolate maker, and Wrigley, the biggest gum maker, will push Cadbury off the world's top spot in confectionery just as the London-based group is planning a demerger of its soft drinks business. Analysts predicted that the Mars-Wrigley deal will prompt Cadbury to re-start talks with the U.S.'s biggest chocolate maker Hershey Co.

Previously in the candy wars, Nestle -- which, by the way, owns the Willy Wonka candy brand -- combined with Cadbury for a bid for Hershey. Wrigley also made a run. The controlling Hershey Trust pushed for a sale, only to pull back later after pressure from community groups at its headquarters in Pennsylvania.

And finally, if Cadbury cannot hammer out a Hershey deal, it might face a bid itself from the likes of Kraft Foods Inc as North America's biggest food group could be interested in expanding its European Suchard chocolate unit.

Representatives of the Lollypop Guild were not immediately available for comment.

Further reading:

Mars and Buffett to buy Wrigley for $23 billion

Cadbury eyes Hershey as Mars chews up Wrigley

Photo: Yahoo Movies/Warner Home Video

Check Out investors waking up to a sweet deal on Monday morning.

M&M’s maker Mars Inc and Berkshire Hathaway Inc are buying Wm Wrigley Jr Co, the largest U.S. chewing gum maker, for $23 billion.
 
The deal will create a confectionary giant, bringing together Wrigley’s Altoids, Extra and Eclipse brands, with Mars’ M&M’s, Snickers, Starburst and Twix.

The newly announced deal could trigger a renewed push toward consolidation in the global candy business.
 
One potential deal that has been discussed previously, and could invite fresh interest, is that between London-based Cadbury Schweppes, known for its Dairy Milk chocolate, and Trident gum brands, and top U.S. chocolate maker Hershey Co.

The two companies are reported to have talked in the past, though the Hershey Trust, which controls about 78 percent of Hershey’s voting shares, has said Pennsylvania law requires it to maintain control of Hershey.

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(Photo: Reuters)

American small business owners are a resolute lot, pushing ahead with plans to grow their operations despite losing a large chunk of sales to soaring energy costs, an American Express OPEN survey showed on Friday.

Ironically, most are also day-dreamers who look on the bright side , the survey added.

Although only 45 percent of U.S. small business owners are optimistic, — a sharp drop from 2004 – more than 70 percent plan to grow their businesses over the next six months, the survey said. Half of them are willing to take on added financial risk to get it done.

It’s not surprising then that the survey showed nearly 9 of 10 small business owners describe themselves as “seeing the glass half-full.” And despite the growing economic uncertainty throughout the nation, the survey said 75 percent of small business owners would still recommend a friend or family member become an entrepreneur.

Nevertheless, some small business owners see the glass half-empty.

Retail business owners have the most negative outlook, with nearly half expecting the economic environment to hurt their prospects, the survey said. One in five small businesses in states located in the northern midwest think they’re in jeopardy of going under.

And 56 percent of small businesses are having cash flow problems, according to the survey.

Check out upcoming earnings and what they might say about food costs.
 
Food inflation is one of many factors putting pressure on U.S. consumers. (Housing, the credit crunch and soaring gasoline prices are some of the others.) But so far, big packaged food companies have been sticking to the mantra that consumers are willing to pay a little more for their wares as long as perceive they are getting a benefit in return.

Next week promises to offer snapshots on how rising food costs may be affecting consumer behavior. That’s because both Kraft, the largest North American food company, and Kellogg, the largest cereal maker, are slated to report earnings.
Kraft gave reporters a preview this week of new products they are launching, and none seemed to be geared to consumers trying to cut back on spending.
 
But grocery store operators seem to know that many consumers are scrambling to pay for necessities like food these days. Both Kroger and Supervalu are offering bonuses for consumers who turn their tax rebate checks onto gift cards to be used in the store. (Those rebate checks also are expected to start coming next week.)
 
So the question is, are things different this time around? Will the rising cost of fuel and food and an economy that might be in recession cause consumers to trade down to store brands and other cheaper alternatives?
 
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Rising food prices are “global crisis”: U.N. chief
 
Charming Shoppes exploring alternatives on non-core assets
 
Protest-hit Carrefour cancels China sales plan
 
Plastic bottle scare is a boon for some (N.Y. Times)

(Photo: Reuters)

Food costs have been soaring worldwide, spurred by increased demand in emerging markets like China and India; competition with biofuels; high oil prices and market speculation. 

That situation has sparked food riots in several African countries, Indonesia, and Haiti. United Nations Secretary-General Ban Ki-moon has warned that higher food prices could hurt global growth and security.

But the effect of rising prices took a surprising turn this week– at least a surprising turn by U.S. standards — when it comes to sales of rice.

Rice prices in particular have surged this year as exporters curb supplies. Trade bans on rice have been put in place by India, the world’s second largest exporter in 2007, and Vietnam, the third biggest, in hopes of cooling domestic prices.

Worried that rice prices may soar beyond affordable levels and worried that shortages abroad would be replicated at home, U.S. shoppers began buying up large quantities of rice.

The move caused warehouse club operators Costco and Sam’s Club, which sell large bags of the staple item and have lots of small restaurant owners as their customers, to limits sales of rice.

Wal-Mart’s Sam’s Club warehouse chain said it was limiting sales of 20-pound (9 kg), bulk bags of Jasmine, Basmati, and long grain white rice to four bags per customer per visit, at all of its locations. It cited “recent supply and demand trends.”

Costco’s CEO Jim Sinegal said he thought the sudden surge in buying was being triggered by constant media reports highlighting food shortages and rising prices. He said the warehouse club was trying not to limits sales of the items.

“If it’s a Chinese restaurant who buys from us all the time we can’t tell them, ‘Why don’t you try french fries this week?” he said, “They need rice.”

If it does run out of supply, Sinegal said Costco is usually back in stock by the next day.

“We don’t want to create a panic situation,” he said.

Tell us … Have you been stocking up on certain items amid rising prices?

(Reuters photo and graphic)

Check out Sharper Image Corp — the struggling maker of $240 shavers and $170 toothbrushes — looking to follow in the footsteps of Wendy’s International Inc.

Wendy’s, the No. 3 U.S. hamburger chain behind McDonald’s Corp and Burger King Holdings Inc, sold itself on Thursday to the investment arm of billionaire investor Nelson Peltz in a deal valued at about $2.4 billion.

Sharper Image, whose expensive gadgets have fallen out of favor in a weak economic environment, put itself up for sale in a bid to survive just two months after filing for Chapter 11 bankruptcy protection.

It may be on the block for a while. After Wendy’s put itself on the block in June,  money to finance such deals has dried up as the U.S. housing meltdown and global credit crisis have pinched big banks and other sources of cash.

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Whirlpool sets new price increases due to higher costs

Coke Enterprises sees ‘08 sales volumes rising

Safeway profit boosted by fuel, Easter

Check out the Easter haircuts.
 
While the early Easter this year threw off results at many retailers, the holiday haircut was apparently still in fashion.
 
Regis, which runs Supercuts and other salon chains, posted its biggest same-store sales increase in eight years, helped at least somewhat by the early Easter, which moved into the company’s fiscal third quarter this year.
 
The company said the majority of the sales increase came from price increases. (That shave and a haircut definitely costs more than two bits.)
 
But it also cited the earlier Easter as boosting sales, which helped lead to more than a tripling of profits.
 
Nothing beats the feeling of a fresh haircut.
 
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Philip Morris Int’l profit up, raises forecast
 
Playing Exclusives Game: Results Can Be Win-Win But Brands Face Pitfalls (WWD)
 
Pepsi Bottling profit falls; affirms outlook

P.F. Chang’s 1st-quarter profit falls

(Photo: Reuters)

Check Out a few bright spots in consumerville. 

McDonald’s posted a higher-than-expected quarterly profit on Tuesday, boosted by strong overseas sales. Coach also reported a higher-than-expected profit, helped by higher sales at stores in North America and Japan.

But the impact of a weak U.S. consumer and a weak U.S. economy was clearly on display as the earnings report began to  roll in this week.

Late on Monday, furniture maker and retailer Ethan Allen said its quarterly profit tumbled nearly 50 percent, hurt by restructuring charges and the weak economy. 

“Sales in March particularly slowed down due to broader economic concerns raised by the extraordinary intervention of the Federal Reserve to stabilize financial institutions, and to some extent due to Easter falling in March this year,” said Farooq Kathwari, the company’s chief executive.

McDonald’s sales fell slightly in March at U.S. restaurants open at least 13 months, prompting cautious investors to send its shares down 2 percent in premarket electronic trading.

There was also caution in the air at handbag retailer Coach.

“Due to the continued uncertainty in the economic backdrop, we believe that it’s prudent to wait until our fourth-quarter report to offer guidance for the upcoming fiscal year,” Coach’s Chief Executive Lew Frankfort said in a statement.

But Ethan Allen tried to infuse at least one positive note into its report:

“With a relatively calmer economic environment in April, and Easter behind us, the decline in sales so far has been considerably reduced,” the CEO said.

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Sherwin-Williams posts lower quarterly profit

Kimberly-Clark sales up; interest expense hits net

(Photos: Reuters)