As rising gasoline prices threaten to put the brakes on consumers’ plan to travel for the Memorial Day weekend, various promotions are cropping up nationwide to help ease the pain at the pump.

For instance, in Chattanooga, Tennessee, the BI-LO chain of grocery stores is planning to give away $25 in free gas to the first 200 people who show up at a certain BP gas station later today.

A local radio station will announce the gas station where the cards are to be given out, and BI-LO is expecting a stampede of customers.

BI-LO’s “Free Gas Friday” is kicks off a loyalty promotion running through July 29 at the chain’s 31 Chattanooga grocery stores. As part of that promotion, shoppers can earn tokens that can be exchanged for a $25 gas card. There are no limits to the number of gas cards a customer can earn in the reward program.

“Consumers have been shocked and are frustrated” as gas prices rose, said Joyce Smart, BI-LO director of public relations.

BI-LO, based in Greenville, South Carolina, operates more than 200 supermarkets in the U.S. Southeast.

Check out Dillard’s plunging profit.

In case you missed it, the department store chain operator reported a 94 percent drop in quarterly profit after the closing bell on Thursday.

“The weak economic conditions, particularly in Florida, made it extremely difficult to achieve profitable sales levels,” Chief Executive William Dillard said in a statement.

If you didn’t know Dillard’s was reporting earnings on Thursday, you weren’t alone.

The company didn’t disclose that they planned to report until less than three hours before they released results. To put it in perspective, if you gave your doctor that little notice before canceling your check up, you would still have to pay for the appointment.

While the vast majority of public companies give at least several days notice for when they plan to report earnings and often have the date on their public calendars months in advance, Dillard’s typically does not.

The retailer also shuns other modern investor-friendly practices like making executives available to answer analysts’ questions in a quarterly conference call.

But the company has been right on top of the trend of department stores getting clobbered by the weak economy. The stock is down 54 percent since the end of June, compared with the 42 percent drop by rival Macy’s and 32 percent drop by Nordstrom.

Dillard’s spokeswoman Julie Bull did not return a call seeking comment on the company’s communications policies.

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Sales Everywhere: Designer Stores Join the Markdown Race  (WWD) 
 

Check out McDonald’s Corp’s long-awaited switch to trans fat-free cooking oil in the United States and Canada.

Jim Skinner, CEO at the Golden Arches, said the world’s largest hamburger chain finished dumping the oil with artery-clogging trans fats during the last few months. Speaking to investors at the company’s annual meeting, he also promised that pies and other baked goods would also be trans fat-free by year end. 

McDonald’s was among the first fast-food purveyor to vow to stop using trans fats, but it lagged the competition when it came to putting its money where its mouth is.

The company had its reasons. It said it was insuring a consistent taste for its french fries and looking for a supplier that could deliver enough trans fat-free oil to meet its needs.

Meanwhile, No. 3 hamburger chain Wendy’s was the first fast-food seller to swap to trans fat-free cooking oil in 2006. Yum Brands Inc’s U.S. KFC and Taco Bell chains completed their switch last year.

Burger King, the No. 2 hamburger chain, has promised to dump trans fat-containing frying oil by the end of this year. Until that happens, you can check out its nutritional charts to see how much trans fat it is serving up with your Whopper and fries.

For all the fuss made over the trans fat issue, you would have expected attendees of McDonald’s annual meeting to let up a cheer. Not so. Individual investors lodged new demands and divided into two camps: doggie happy meals vs.  kitty happy meals.
 

Also in the basket:

McDonald’s absorbs some costs to keep consumers

Hormel quarterly profit up 14 percent; shares fall

Children’s Place posts higher quarterly profit 

Ann Taylor outlook disappoints; shares fall
 

The average price for gasoline soared 6.9 cents over the last week to a record of $3.79 a gallon. That means the national price for regular, self-service gasoline is now up 57 cents from a year ago, according to data relased by the federal Energy Information Administration on Monday.

With personal income stagnating, consumers are finding it hard to offset the ongoing spike in gas prices.

According to the latest Discover U.S. Spending Monitor, which polls consumers on their spending habits, 54 percent of consumers are cutting back on basic living expenses, like grocery shopping, to compensate for the high cost of gas. 

Nearly 55 percent are cutting back on discretionary spending, like eating out and going to the movies. 

High gasoline prices have soured economic sentiment. Seventy-four percent of consumers think the U.S. economy is getting worse – up two and a half points from the week before, according to the survey. 

In addition, nearly 54 percent think that their personal finances are deteriorating.   

Meanwhile, the Deloitte Research Leading Index of Consumer Spending has reached its lowest level since 2001. The index tracks consumer cash flow as an indicator of future consumer spending.

“This significant drop in the Index gives us empirical data of what many have long suspected,” said Carl Steidtmann, chief economist with Deloitte Research and author of the monthly index. “The current economic downturn is as significant as anything we have seen since the last recession.”  

Deloitte said retailers are now trying to aggressively court consumers to get them to spend their tax rebate checks in their stores.

But unless they sell food of fuel, retailers could face big challenges in that arena.

According to the most recent survey by the National Retail Federation,  U.S. consumers will use much of their tax rebate money to pay for increasingly expensive gas and groceries, rather than spend it on electronics or clothes. 

(Photo: Reuters — “A man walks beneath a sign advertising the price of gasoline at a filling station in San Francisco, California on April 28, 2008)

Check out a busy day for retailers as earnings — or losses – poured in from BJ’s Wholesale, Talbots, Charming Shoppes and Brown Shoe. 

The “flight to necessities” by the U.S. consumer was on display as BJ’s  — which sells food and fuel — posted a 26 percent jump in quarterly profit.

But for businesses steeped in discrection, the quarter was no cakewalk.  Talbots posted sharply lower quarterly net profit; Charming Shoppes reported a quarterly loss and Brown Shoe posted a lower first-quarter profit.

With the U.S. environment a tough one to navigate, retailers are looking to add or subtract businesses to put themselves in a better position. 

Spectrum Brands announced plans to sell its global pet supply business to a subsidiary of Salton Inc; the Wall Street Journal reported that Barnes and Noble Inc is looking into a possible bid for competitor Borders Group; and Dutch office supplier Corporate Express is seeking to buy French rival Lyreco for 1.4 billion euros ($2.2 billion), as it fends off a hostile bid from U.S. rival Staples.

(Photos: Reuters)

Walk down the chocolate aisle in a grocery store, and the premium names leap out at you: Lindt, Ghirardelli, M&M’s.…
 
That’s right, M&M’s. Mars Snackfood U.S. is using the M&M’s brand — a well-known mass candy brand — to launch a new entry in the fast-growing premium chocolate market.
 
Dove is usually the Mars brand most associated with premium chocolate. M&M’s are more known as the candy that doesn’t get kids’ hands messy, because it melts in their mouths.
 
But Mars said that this summer it is launching M&M’s Premiums, a take on traditional M&M’s with a thinner candy shell and flavors like mocha and raspberry almond … not exactly kid’s stuff.
 
The price isn’t exactly for kids, either. A six-ounce package will be priced at $3.99, or 66.5 cents an ounce. In contrast, a 1.69-ounce bag of standard M&M’s costs 79 cents, or 46.7 cents an ounce, according to Mars.
 
The premium chocolate segment has well outpaced growth in regular chocolate in the United States.
 
But tell us, is a premium M&M what you are looking for?
 
And speaking of what consumers may or may not be looking for, how about chewing gum made with tree bark extract.
 
Wrigley, which is being bought by Mars, is including magnolia bark extract in its Eclipse gum and mint, which Wrigley says kills the germs that cause bad breath. Twelve pellets of the gum will be priced at $1.09.

(Reuters photo of M&M’s, the old school version)

Check out the other discounter.
 
The wisdom in the struggling U.S. economy is that discounters are doing well as consumers trade down to try to save some money. It has worked for Wal-Mart, which saw first quarter profit rise 7 percent, while same-store sales rose 2.9 percent.
 
Not so much for Target, though.
 
That discount retailer today posted a 7.5 percent decline in net income for the quarter and its same-store sales dipped 0.7 percent and were weaker than the company had expected.
 
For a time, Target attracted customers with an approach that became known as “cheap chic,” with designers like Isaac Mizrahi developing exclusive clothing lines for it. At the same time, Wal-Mart has stumbled with its own attempts to upgrade its apparel offerings.
 
But even before the economy went south, Wal-Mart refocused on offering lower-priced value, a move that has helped the company in an economy that many say is in a recession.
 
Meanwhile, sales are falling short of Target’s target. And  Mizrahi has left to become creative director at Liz Claiborne.
 
Right now, it looks like the dog days for Target, while Wal-Mart sports a smiley face.
 
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Home Depot posts quarterly loss 
 
Saks Inc posts higher quarterly profit 
 

(Photo: Reuters)

Check out those furrowed consumer brows.

In April, 24.5 percent of American consumers postponed a major purchase — an item of $500 or more – citing worries over higher gas prices, job security, credit card debt and the wait for a tax refund, according to a survey conducted by America’s Research Group.

That’s a big shift from a year ago, when almost 23 percent delayed a major purchase, saying they “did not want to spend the money right now.”

“This year most consumers did not even try to shop,” said C. Britt Beemer, founder and CEO of ARG. “They just stayed home to save on gas prices.” 

That new consumer mindset is a negative sign for retailers at least into 2009, Beemer said.

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Lowe’s posts lower net, cuts year forecast

Dillard’s to open only four stores in 2009

 (Photo: Reuters)

First it was too bitter, now it’s too mild.

Will Starbucks ever get it just right with the coffee testers at Consumer Reports?

In March 2007, the magazine blasted Starbucks’ drip java for being too burnt and bitter, and said fast-food vendor McDonald’s had a superior brew.

In April this year, Starbucks rolled out Pike Place Roast, its new everyday brew, saying it had a “smooth, welcoming taste.”

In its latest missive, Consumer Reports  took a decidedly more tepid stance on Starbucks’ new joe. 

The magazine’s testers found Pike Place to be “a smooth cup of coffee with some bitterness, but not particularly complex.” Because the flavor is so mild, the tasters said,  adding cream, milk or sweeteners might overwhelm the coffee.

Do you agree with the Consumer Reports’ testers?

(Photo: Reuters)

What does gas at $4.50 a gallon mean for some mall-based department stores?

A downgrade by Goldman Sachs.

Goldman sharply raised its forecast for oil prices in the second half of this year, saying it expects U.S. crude to average $141 a barrel, up from a previous projection of $107. Goldman also forecasts prices will rise further next year to average $148.

That is not good news for retailers.

“Higher energy spending in the second half is likely setting the stage for a more challenging backdrop for consumer discretionary sectors, particularly for the department store stocks,” Goldman noted.

Goldman downgraded JC Penney and Nordstrom to ”neutral” from “buy.” It swapped its conviction list “buy” designation on Kohl’s with Wal-Mart. It upgraded off-price retailer TJX to “buy” from “neutral.”

Goldman also cut its second half same-store sales estimates for JC Penney, Kohl’s, Nordstrom and Macy’s.

“We believe companies will face an uphill battle against escalating energy prices offset by easier top-line compares and the anniversary of 2007’s extremely warm Fall season,” Goldman said about the second half of the year. ”In the end, we believe energy and constrained cash flow will win this tug-o-war causing same store sales to re-decelerate as the second half progresses.”
 
(Photo: Reuters)