Check out a flood of fresh trouble.
 
Consumers are already being clobbered by soaring food and fuel prices, and that has kept them from shopping for things like clothes.
 
But the floods in the Midwest over the past week are likely to make things even tougher on consumers. The floods have hit millions of acres of soybean and corn farms, removing more supply from an already tight market.
 
That is likely to add more to inflation, meaning less money in shoppers wallets, analysts said.
 
“CPI readings for the remainder of 2008 will be slightly higher than otherwise,” Citigroup economist Steven Wieting said in a  report. “This reduces real incomes and can also affect financial market expectations at the margin.”

The consumer price index, or CPI, measures the change in prices that consumers pay for goods and services.
 
So much for the rebate bump.
 
Also in the basket:
 
Staples win EU okay for Corp Express takeover
 
General Mills sees 2008 earnings above targets
 
Same-sex marriages boost California stores (WWD)

(Photo: Reuters)

When you eat candy, are you a Controller, or an Engaged Exploring Muncher?
 
Those are just two of the six categories of candy-eaters Hershey has identified as it tries to better focus on the U.S. candy consumer.
 
As described by CEO David West at an analyst meeting Tuesday, an “Engaged Exploring Muncher” eats twice the normal amount of candy, chooses from a wide menu of brands and is the least concerned about price.
 
It is also the most profitable segment, which is kind of the point for Hershey as it tries to figure out which consumers to target as it looks to turn around declining market share.
 
“Loyal Indulgers,” meanwhile, are older consumers who are loyal to brands they have known for a long time. “Practical Value Seekers” like candy, but are looking for a combination of price and value. They also represent the largest segment of candy eaters.
 
Smaller segments are “Controllers” and “Detached Occasionalists” who eat less candy because of health concerns or just because they aren’t interested in candy.
 
The last segment is “Confection Loving Moderators.” They like candy, but try to be disciplined in what they eat.
 
So, which one are you? Be honest.

(Photo: Reuters)

Check out a bunch of retail executives talking about the state of the industry, economy and the outlook for holiday shopping.
 
It’s the Reuters Consumer and Retail Summit, being held this week in New York, featuring top executives from Borders, Best Buy, Toys “R” Us, Jones Apparel, Perry Ellis and others.
 
The executives meet with Reuters reporters as most retailers are struggling to attract consumers that have been clobbered by $4-a-gallon gasoline, falling home prices, a credit crunch and rising food costs.
 
Sales got a bit of a boost in May as consumers started to spend their tax rebates. But analysts say that bump could be fleeting, with consumers still under pressure after the rebates have been spent.
 
To find out what retailers think, check out the Retail Summit page all week.
 
Also in the basket:
 
InBev cautions Bid about striking Modelo deal
 
Trust chairman sees change, but no sale, at Hershey
 
CostPlus rejects Pier 1 acquisition offer
 
Starbucks says international growth to cushion U.S. weakness
(Photo: Reuters)

Check out inflation.
 
That $4-a-gallon gasoline really drives up consumer prices. The Consumer Price Index rose 0.6 percent in May, the largest increase since November. Year-over-year, consumer inflation was up 4.2 percent.
 
The so-called “core” index, which excludes food and energy, rose only 0.2 percent in May and 2.3 percent year-over-year.
 
But most consumers eat, drive and use heat or air conditioning. So soaring prices for energy and rising food prices — up 0.3 percent in May and 5.1 percent year-over-year — cut into what consumers can spend on clothes, home goods and other discretionary items. 
 
It also could mute the impact of the tax rebates consumers are receiving.
 
“Consumers are spending more to buy food and energy,” Lindsey Piegza, market analyst at FTN Financial, said. “The tax rebate is just offering them a cushion. They are not buying wide-screen televisions.”
 
Also in the basket:
 
Anheuser in talks with Grupo Modelo (WSJ, subscription required)
 
Battling a bumpy road” economic downturn (WWD)

Higher price for Anheuser not a sure thing

Budweiser could pay price for being “America’s Beer”

 (Photo: Reuters)

Check out Staples, the successful hunter.
 
The NBA Finals are still going on at the arena that sports its name, but the office supply retailer is already a winner. 
 
It took $2.65 billion, but Staples finally convinced Dutch office supplies wholesaler Corporate Express to accept a buyout offer.
 
Analysts see the deal as making strategic sense in the face of a slow U.S. economy, with big cost savings to be reaped.
 
Corporate Express gets about 50 percent of its revenue in the U.S. and activist investors had put pressure on the company due to poor performance in that market.
 
But Corporate Express tried to play defense, making its own deal to buy French rival Lyreco, a deal that now goes by the wayside at the cost of a 30 million euro break up fee.
 
Also in the basket:
 
Profits in hand, wealthy family cuts tobacco tie (N.Y. Times)
 
Squeezing big-box retailing into small city spaces (N.Y. Times)

 (Photo: Staples.com)

Check out that foam-rubber t-shirt!?!
 
Hasbro is putting the Nerf brand everywhere with a series of licensing deals announced today at the International Licensing Show in New York.
 
Among the deals is one for Nerf apparel with Fortune Fashion. The plan calls for an array of t-shirts for tween boys this summer, with an array of other items such as hoodies and track pants to follow. (Okay, the clothes will probably not be made of the same stuff as a Nerf ball).
 
Video game maker Electronic Arts will also come out with the “N-Strike” video game bundle for the Nintendo Wii, combining the fun of shooting foam-rubber weapons with the uber-popular video game. So your fake digital avatar can use your fake foam-rubber gun to shoot at fake stuff on your real television.
 
“This makes it the first time that Hasbro has put a forceful effort behind the licensing program supporting Nerf,” said Bryony Bouyer, senior vice president of licensing at Hasbro.
 
We’re guessing Hasbro could use some help in its push to expand the Nerf name. What would you like to see rendered in Nerf?
 
Also in the basket:
 
Dubai World buys Wal-Mart property firm Gazeley
 
Constellation sells some wine brands

(Photo: Reuters)

Check out the loss of more retail jobs. 

Another 27,000 retail jobs disappeared in May, according to the U.S. government’s monthly employment report. That makes 152,000 retail jobs eliminated since the beginning of the year.
 
Overall, nonfarm payrolls fell by 49,000. But even more worrisome for the economy and for retailers could be the jump in the unemployment rate to 5.5 percent. That half-point jump was the largest such move in 22 years and brought the unemployment rate to its highest level in 3-1/2 years.
 
Retailer’s May sales reports yesterday were mostly better than expected, causing some analysts to think they could signal the beginning of a consumer turnaround.
 
But others said it just showed a blip in spending that was caused by the tax rebate checks consumers have begun to receive. 
 
Economic concerns could still linger after all that stimulus money is gone, they say, and things could get worse if consumers, already hit by $4-a-gallon gasoline, soaring food prices and falling home values really start to worry about their jobs.

Wonder how a half-point jump in the unemployment number plays into that?
 
Meanwhile, to take your mind of the jobs report, there’s always the company pep rally that masquerades as the Wal-Mart annual meeting. The world’s-largest retailer flies in employees from all around the world to help pack the basketball arena at the University of Arkansas, where stars entertain the crowd (this year’s acts include Miley Cyrus), everybody does the Wal-Mart cheer, and, oh yeah, shareholders get to ask questions.
 
Also in the basket:
 
New Wal-Mart director may herald changing of the guard (Wall Street Journal, subscription required)
 
Target grows makeup artist brands, adds testers (WWD)

 (Photos: Reuters)

Check out how Tiffany sparkles overseas.
 
Forget the United States (where Tiffany does not expect sales to improve until later this year). They are still buying baubles in Europe.
 
Sales in Europe rose 30 percent in the first quarter. And that was on a CONSTANT CURRENCY basis. No help from the weak dollar in that number. The company added four more stores, which helped, as did the 12 percent increase in same store sales.
 
Asia also saw a 10 percent increase in sales on a constant currency basis.
 
The U.S. consumer may be under pressure. But apparently there are still sales and profits to be mined overseas.
 
Also in the basket:
 
April personal spending up, flat after inflation 
 
J Crew cuts year earnings outlook, shares drop 15 pct

NexCen cuts 25 pct of New York workforce, mulls options 

Coach’s gateway to growth in China (WWD)

(Photo: Reuters)

Check out sluggish sales and high gasoline prices.
 
According to the International Council of Shopping Centers, chain-store sales were flat in the week ending May 24, compared with a week earlier, and were up only 1.5 percent year-over-year.
 
“Consumers remain cautious in their discretionary spending as a result of the record high gasoline prices,” said Michael Niemira, ICSC chief economist.
 
Gas costs cutting into consumer discretionary spending isn’t a new thought. But ICSC takes a stab at quantifying the effect, estimating that current gas prices — well over $4 a gallon in some places — are cutting demand at chain stores by nearly 1 percentage point.
 
Niemira also said a consumer tax rebate tracking survey is showing a “low propensity” to spend the recent tax rebate checks. That stimulus package might not be so stimulating.
 
Some retailers have been able to manage through the weakness. American Eagle Outfitters, for example, used cost-cutting and inventory reductions to post better-than-expected first quarter profit on Wednesday.
 
Others have have had more difficulty. Chico’s posted a sharp drop in quarterly profit, the latest example of weakness in  the women’s apparel sector.
 
Also in the basket:
 
Lululemon’s incoming CEO advocates measured mantra (WWD)
 
Polo Ralph Lauren profit tops view; shares jump
 
Dollar Tree profit rises more than 14 percent
 
Coca-Cola Enterprises sees 2nd-qtr profit down
 
For Coors Light, a Night Out That Begins on MySpace (N.Y. Times)

 (Photo: Reuters)

Check out InBev looking at a nice, cold Bud.

Belgian business newspaper De Tijd reported on Tuesday that InBev’s board of directors was about to decide whether to allow its advisers to start negotiating with Anheuser-Busch, the maker of Budweiser and other beers.

The Financial Times reported Friday that InBev was considering a $65-a-share bid for BUD and a source close to the situation confirmed for Reuters on Friday that a bid was being prepared.

In an industry already going through several hook-ups — Molson Coors and SABMiller combining U.S. operations, Carlsberg and Heineken taking apart Scottish & Newcastle — Anheuser-Busch could be an attractive option for InBev as last call approaches.

The company dominates the U.S. market, after all, nevermind the fact that demand for domestic beer has been sluggish.

That flaw may not repel other suitors, either. The FT’s Alphaville blog suggests that Diageo and Heineken could both come after Anheuser-Busch.

Meanwhile, an InBev takeover of Anheuser-Busch would also roil the Mexican beer market, as Reuters’ Chris Aspin explains.  

Also in the basket:
 
Target launches Sami Hayek for Target line
 
Potential buyers lining up to bid on Blass (WWD, subscription required)

(Photo: Anheuser-Busch)