Retailers, consumers and prices
Check Out Line: Consumers spending again, just not drinking much
Check out Constellation Brands’ lack of optimism.
Even though shoppers are returning in droves to malls to buy clothes and shoes, based on retailers’ boffo business in March, they are more sober -literally- in their spending on booze.
Constellation, which makes Robert Mondavi wine and owns the Svedka vodka brand, managed to squeeze out a bigger operating profit during its fourth quarter, despite a 3.5 percent drop in sales. It also owns half of a joint venture that imports beers like Corona, but said those sales fell 4 percent.
CEO Rob Sands apparently found little to toast about as he looks ahead. The company gave a disappointing profit forecast partly because of how dodgy the economic recovery is and how weak imported beer sales look to remain.
His caution appears to be well placed. A study by business advisory firm AlixPartners conducted in February and released on Friday found that about 89 percent of U.S. consumers (sample size of 1,000) plan on spending the same or less on booze in 2010.
It’s enough to make a CEO cry in his (imported) beer.
Also in the basket:
Couche-Tard to buy Casey’s for about $1.9 bln
Strong U.S. earnings seen, but may be priced in
Toys R Us still being evaluated for IPO