Shop Talk
Retailers, consumers and prices
Jack is Back!
By Shivani Singh
Jack Box, hamburger chain Jack in the Box’s snowman-faced mascot, is alive and kicking.
Last month, the mascot was hit by a bus in an advertising spot aired during the Super Bowl. The campaign continued online for a month, with a cliff-hanger that left fast-food fans wondering whether Jack would survive. Following some intrigue involving corporate underlings, Jack woke up last week to take back the reins of the company and launch its new logo that blows up the word ‘Jack,’ which is how most customers refer to the fast-food chain. The post-Super Bowl viral campaign targeted the company’s core audience of mostly 18- to 34-year-olds, who used YouTube, Facebook and Twitter to cook up millions of hits, Chief Marketing Officer Terri Graham told Reuters. The multichannel campaign was also supported by coupons. On Tuesday, the company gave a free soda and small fries to people who printed a coupon on the ‘Hang In there Jack’ site. Restaurants saw an increase in traffic on the days the coupons were offered, the company said.
Fast-food companies have been quicker than other restaurant operators to embrace technology and social media. Rival Burger King made a splash earlier this year with its Facebook campaign that gave a free Whopper to users who dumped 10 friends. The next phase of the Jack in the Box campaign is scheduled for March 16, when the company debuts a new website where users can sign up to get Jack do their dirty work — whether it’s calling in sick or breaking up with a girlfriend or boyfriend.
(Photos\Jack in the Box)
Moody’s Bottom (Restaurant and Retail) Rung
Why do this? The Wall Street Journal offers some possibilities:
“Sounds like Moody’s may be trying to get out in front on defaults, given they were perhaps a little behind on subprime mortgages and commercial mortgage-backed securities,” said David Resnick, managing director at investment banking firm Rothschild Inc. which works on many corporate bankruptcies and restructurings.
Moody’s and credit-rating rival Standard & Poor’s were criticized by the Senate in hearings late last year about the effectiveness of the ratings agencies.
The Journal also says Moody’s enters risky territory by naming some companies that say they are in, as the paper put it, decent fiscal health.
That said, here are the restaurants, retailers and food companies on that list, along with their probability of default rating and outlook (don’t worry about the debt specific ratings – they’re all different ways of saying “junk”):
* Arby’s Restaurant Group Inc (B3, negative) * Barney’s New York Inc (Caa1, negative) * BCBG Max Azria Group Inc (Caa3, negative) * Beverages & More Inc (Caa1, negative) * Blockbuster Inc (Caa1, negative) * Bon-Ton Stores Inc (B3, negative) * Brookstone Company Inc (Caa2, negative) * Burlington Coat Factory Warehouse Corp (B3, negative) * Center Cut Hospitality Inc (B3, negative) * Chiquita Brands International Inc (B3, negative) * Claire’s Stores Inc (Caa3, negative) * Destination Maternity Corp (B3, negative) * Dole Food Company Inc (Caa1, negative) * Duane Reade Inc (Caa2, stable) * Eddie Bauer Inc (Caa2, negative) * El Pollo Loco Inc (Caa1, negative) * Finlay Fine Jewelry Corp (Caa3, negative) * Gold Toe Moretz Holdings Corp (Caa3, negative) * Guitar Center Holdings Inc (Caa1, stable) * Harry & David (Caa3, negative) * Krispy Kreme Doughnut Corp (Caa3, negative) * Loehmann’s Capital Corp (Caa2, negative) * MAPCO Express Inc (B3, negative) * Mattress Holdings Corp (Caa1, rating under review) * Michaels Stores Inc (B3, negative) * NBC Acquisition Corp (B3, negative) * Oriental Trading Company Inc (Caa3, rating under review) * OSI Restaurant Partners Inc (Ca, rating under review) * Perkins & Marie Callender’s Inc (Caa3, negative) * Quiksilver Inc (B3, negative) * Rafaella Apparel Group Inc (Caa1, negative) * Rare Restaurant Group LLC (Caa2, negative) * Real Mex Restaurants Inc (Caa2, negative) * Rite Aid Corp (Caa2, negative) * Roundy’s Supermarkets Inc (B3, negative) * Sagittarius Restaurants LLC (Caa1, stable) * Sbarro Inc (Ca, negative) * St. John Knits International Inc (B3, rating under review) * TSA Stores Inc (B3, negative) (Photos\Reuters)
Krispy Creame? Seriously? Dole Food? uh. Time must indeed be bad. The good thing is that all these companies can come back from the brink with some slimming down and creative marketing.
No tug-of-war between grocers and food makers-Kroger CEO
Costs for ingredients like rice, wheat and oil are falling, so why are prices for breakfast cereals like Rice Krispies and Special K still rising?
If you want an answer to this question, you aren’t the only one.
Food companies like Kellogg Co, which makes the products mentioned above, say the higher prices are justified because while commodity price inflation has eased amid a global economic downturn, commodity prices remain well above historical averages.
But CEOs of grocery chains like Safeway and Kroger say those higher prices are increasingly out of whack with their own lower-priced private label products.
“We have seen some price declines,” Kroger Chief Executive David Dillon said on a conference call, but he said prices for national brands were not in step with a broader fall in commodity costs.
Dillon said sales of national brands were ho-hum, while sales of Kroger’s store brands are rising enough to hit historic highs.
“That’s going to continue as long as that kind of price differential exists,” said Dillon, who expects national brand sellers to discount via promotions before they cut prices.
Whole Foods selling 13 stores in settlement
Natural and organic food grocer Whole Foods will sell 13 stores as part of a settlement that ends an antitrust battle with U.S. regulators over its acquisition of rival Wild Oats.
Is your store on the list?
- 7133 N. Oracle Rd., Tucson, AZ
- 8688 E. Raintree Dr., Scottsdale, AZ
- 2584 Baseline Rd., Boulder, CO
- 1651 Broadway St., Boulder, CO
- 3180 New Center Pt., Colorado Springs, CO
- 5910 S. University Blvd., Littleton, CO
- 9229 N Sheridan Blvd., Westminster, CO
- 340 N. Main St., West Hartford, CT
- 4301 Main St., Kansas City, MO
- 1090 St. Francis Dr., Santa Fe, NM
- 7250 W. Lake Mead Blvd., Las Vegas, NV
- 19440 N.W. Cornell Rd., Hillsboro, OR
- 6930 S. Highland Dr., Salt Lake City, UT
(Photo\Mike Blake, Reuters)
I would have liked to have seen a greater impact on Whole Foods from this settlement – apparently these were underperforming stores for them – what kind of punishment is that? I do think its unfortunate that the stores will simply close – its not like Wild Oats is going to reopen. So in the end its the consumer that suffers – either to the highly marked up foods at Whole Foods or because they now have one less place to shop for organics. Consumers need to learn their options for organic foods: farmer’s markets, local health food stores, and shopping online (www.shoporganic.com for one) are all good options.
Hansen selling beauty in a can
By Shivani Singh
Hansen Natural, the maker of Monster energy drinks and caffeine-free sodas, is betting that woman will splurge on its new ”Self Beauty Elixir.”
As the stress of rising unemployment and falling home prices take their toll, the drink maker believes that members of the fairer sex will seek refuge in the 35-calorie drink that comes in exotic flavors like Blushing Berry, Pink Lemonade and Tropical Bliss.
Made with 30 percent fruit juice, the elixir also contains antioxidant-rich vitamins A, C and E, which are touted for their health benefits.
“Our new product offering is a convenient, affordable and guiltless indulgence that provides the luxury experience to women in search of additional options to simplify or diversify their daily beauty and diet regimen,” said Jaime Phan, senior brand manager at Hansen.
The move comes as PepsiCo is targeting women with a new line of snacks. Women, who do most of the grocery shopping, have experienced fewer job losses than men in this recession.
I can’t wait to try it. It sounds like a great product. I’ll try anything fortified beverage to avoid taking my nasty biotin supplement pills. Finally a beverage made for women!
Free resumes from FedEx Office
On March 10, the company that bought copy shop Kinko’s will print 25 free resumes on high-quality paper when customers stop in at any of the 1,600-plus FedEx Office Print and Ship Centers in the United States.
“We understand that the economy has affected many people in a very profound way, and we want to help,” Brian Philips, president and CEO of FedEx Office, told Reuters. “In January, nearly 600,000 people found themselves out of work. I understand that in February, by the time they add up the numbers, it could be worse.”
Philips, who said hard copy resumes have not fallen out of favor despite the growth of online job search sites, admitted that there is nothing to stop a job hunter from getting free resumes at more than one of its stores.
“We weren’t worried so much about people going to multiple stores and gaming the system. We just want to make sure people have access to this service in a time of need.”
Some FedEx employees may be in line for the free printing services.
FedEx Freight, a unit of FedEx Corp, last month announced it was cutting 900 jobs at 130 locations. In December, the corporation said it was suspending its 401(k) match and forcing its salaried workers to take at least a 5 percent pay cut.
This is a totally awesome thing that FEDEX is doing and I hope that they will be on a hiring spree soon. So many logistics companies are laying off and I heard that they offer some of the best benefits and jobs for their employees. They go above and beyond in their training. They care about their employees and staff. Compared to what I heard about some other companies I would work for FEDEX in a heartbeat.
Haagen-Dazs (hearts) honeybees
Ice cream seller Haagen-Dazs is investing a half-million dollars to save the honeybees – and to save us from a future of feeding on gruel.
Honeybees, which 60 Minutes called the “unsung heroes of the food chain,” are threatened in many parts of the world, putting food supplies in danger.
Bees pollenate one-third of all of the natural foods we eat. Just imagine a world without nuts, fruits, vegetables, flowers and even meat and milk from cattle that eat bee-pollenated alfalfa.
“Without bees and other pollinators, the things we that would be left with are corn, rice and wheat,” Diana Cox-Foster, an entomology professor at Pennsylvania State University, said in this video created for Haagen-Dazs.
“If we don’t have them, we’re going to be eating gruel,” said Maryann Frazier, a senior extension associate in Penn State’s entomology department.
Billions of bees in the United States and Europe have disappeared. Scientists in the United States say that colony collapse disorder, a mysterious syndrome , has wiped out more than a third of American hives in 2008 on top of similar losses in 2007.
Haagen-Dazs just gave a second $250,000 donation to honeybee researchers at Penn State and the University of California, Davis.
Any time there are efforts to support wildlife; plant, animal or insect, I am proud to be a supporter. While I understand that Natural Selection requires certain species to go extinct now and then, I also loathe the idea that human consumption could not only lead to certain extinctions, but also ignore them. The attitude that the earth and it’s resources are there strictly to support human life is egotistical to the point of disgust… for me. But, then, I’m just an environmentalist buffalo…
Dump the Sanka, seize the Starbucks Via?
Now that Starbucks is in the instant coffee business, will you mix up a cup?
CEO Howard Schultz wants to introduce Americans to Via — the company’s own instant brew — and he promises it is better than that jarred stuff your parents drink. It’s so good, he says, that it will help the slumping company grab a share of the $17 billion global instant coffee market now dominated by brands like Sanka and Nescafe.
“This is 100 percent arabica Starbucks coffee, the same exact coffee that goes into the 50 million cups we sell every week,” Howard Schultz told Reuters in an interview.
“The reason why instant has such a bad name is that it doesn’t taste very good. It’s not fresh coffee, it’s usually chemically treated,” said Schultz, who added that Via replicates the taste of Starbucks brewed coffee.
Before the product even hit shelves, critics were opining on Starbucksgossip.com.
BOSTON STARBUCKS REBEL said: “To the ‘instant-coffee consumer’ that is appears Howard is reaching out to, $1 a cup is way too expensive. To the ‘Starbuck’s Snobby Consumer’ instant coffee is a no-go. So who is going to buy this stuff? Roughly the same number of people who consistently buy freeze-dried entrees for their mountaineering adventures. The ‘Premium’ instant coffee market is anything but $17B.”
Will you seize the Via the next time you reach for a brew?
I am a barista at SBUX. Some people underestimate our desire for the best after all we were trained by the best! We want the best, expect the best, strive for the best.
Uncle Howie said something along the lines of “if it didn’t meet our standards, we wouldn’t put our name on it.” Very true. I tried the VIA a few days ago in a store meeting and I love it! I love the idea of it: I can carry a ‘cup of coffee’ in my purse, ready for me at any time! And the taste was great! a lot of people have been throwing it into the pile of all instant coffees. But don’t knock it ’til you try it.
Furthermore, the Instant Coffee is patented. No one else can replicate it and it’s different from everyone else’s. That should say something!
Give it a try! For the fun of it, I would recommend getting two cups of coffee at SBUX. Don’t let yourself know which one is Instant and which one is Brewed (mark the bottom of the cup so you can look afterwards) and I’ll bet you’ll be surprised and delighted! 
Love? Try Aisle 5
Need a mate this Valentine’s Day? Whole Foods wants to help.
The high-end seller of organic, natural and gourmet food has been throwing singles’ mixers in stores around the country as Valentine’s Day approaches.
The chain’s hometown of Austin hosted an event called “Check Out” and to give us a flavor of the evening, it supplied this picture:
Here’s how it billed that free, Feb. 11 event:
If you want a “healthy relationship,” where better to look than Whole Foods Market? Stroll the aisles and taste decadent chocolates and champagne, flirt over fondue, sample perfect recipes for romantic dinners for two, and mingle on the patio with your new friends. You might just find a date for Valentine’s Day!
Several stores in the Southern United States hosted repeat events called Kiss A Fish (a monkfish, that is), Get Some (lobster) Tail! — The parentheses are mine.
Starbucks eyes breakfast bargains, dumps the jet
Once upon a time, Starbucks had nowhere to go but up.
My, how times have changed.
Chief Executive Howard Schultz in July said the upscale coffee chain would not combine menu items and sell them at a discount, a move made popular by fast-food chains like McDonald’s.
“We’re not going to go down the fast-food lane,” Schultz told investors back then — when the company’s business was hitting the skids in a housing-led slowdown.
On the heels of news that McDonald’s will finish adding McCafes to U.S. stores by the middle of the year, Shultz is now touting a plan to offer several “breakfast pairings” at “attractive price points” beginning in March.
“The question of value often gets tied to the competition. How are we competing with (quick-service restaurants)? How can a premium brand be competitive when customers are trading down on everything from houses and travel to clothing and lunches out?” said Schultz. “We will combine our breakfast strengths with a value proposition that challenges misperceptions about our every day affordability.”
As it pays the price for its expansion exuberance, Starbucks is slashing another 300 namesake cafes around the world, bringing its closures to 1,000, cutting thousands of jobs and putting its brand new Gulfstream jet on the blocks.
Expanding the selection for the night business is a great idea. Our neighborhood coffee shop offers beer and wine and the occasional folk singer at night. They fill out 2 floors of tables on most nights.
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