Shop Talk

Retailers, consumers and prices

Check Out Line: Consumers beware! Rising prices even at Wal-Mart


walmart1Check out rising prices even at Wal-Mart.

Pressures created by rising costs have caused even the world’s largest retailer, known for its ”rollback” discounts, to boost the prices that consumers pay for groceries.
Wal-Mart Stores raised average prices on supermarket items by about 6 percent in a month, according to a recent J.P. Morgan study in Virginia that compared the prices of 31-item goods sold at its supercenters, and at supermarket rivals Kroger, Safeway, Harris Teeter and Whole Foods.
Specifically, the study found that prices at a supercenter in Virginia rose 5.8 percent, the most significant sequential increase since JP Morgan started price comparisons in January 2009.
While the world’s largest retailer remains the cheapest among supermarkets, rivals such as Kroger and Safeway are gaining ground, according to J.P. Morgan.
Rising costs of raw materials and oil are pressuring companies to pass on costs to consumers with higher prices.

Indeed, clothes makers such as Nike, VF Corp and Hanesbrands are facing the same conundrum. And British baker Greggs said soaring wheat prices were set to push up costs, emphasizing a theme that may be repeated for such food makers as General Mills, Kellogg, Kraft and Sara Lee.

However, the timing is not good as the state of the U.S. economy is still uncertain and unemployment remains stubbornly high, leading many consumers to still be wary about spending. U.S. retailers in July posted weaker-than-expected sales  despite increased discounting.
Also in the basket:

Wendy’s/Arby’s to expand into Russia

ScottsMiracle-Gro posts bigger Q3 profit

Fossil Q2 tops estimates; raises FY10 view

Hanesbrands to buy Gear For Sports for $55 mln

Lone Star’s BI-LO up for sale – source

(Reuters photo)

Check Out Line: America loves smoothies


FOOD MCDONALDSCheck Out Americans’ growing appetite for McDonald’s smoothies.

We’re all caffeine-fueled coffee maniacs, so it’s no surprise the restaurants’ new line of espresso-based coffee and Frappe drinks from the McCafe line performed well.

But the world’s biggest hamburger chain reported new fruit smoothies released in July also helped it to better-than-expected sales for the month at stores open at least a year.

Check Out Line: Parents want back-to-school bargains


Check Out how and where parents plan to shop for back to school items.

Parents really put a crimp in retailers’ July sales, holding off on shopping to see what markdowns they could snag this month. As we wrote yesterday, July same-store sales missed the mark in part because cash-strapped parents – and all shoppers for that matter – were being careful with their money, as angst seems to have come over consumers again. And who can blame them- the U.S. economy shed 131,000 jobs last month.

According to the Accenture Back-to-School Shopping Survey last week of 502 parents of school-age kids, shoppers want only one thing this season: bargains, bargains and more bargains.

Check Out Line: Frugality — Part Two?


shopCheck out the apparent return of the frugalista.

Worries about stubbornly high U.S. unemployment and a tempermental economic recovery has shoppers reeling in spending on all but the essentials.

The 28 retailers tracked by Thomson Reuters reported an overall 2.9 percent rise in July sales at stores open at least one year, missing Wall Street forecasts of 3.1 percent. Seventeen of those retailers reported lower-than-expected sales, while nine — including Macy’s and Kohl’s — beat estimates.

Check Out Line: Polo earnings nothing to sneeze at


Check out consumer priorities. RESULTS-RALPHLAUREN/

U.S. shoppers may be buying fewer items at the drug store, but that’s not the case at clothing outlet stores.

Drugstore chain operator Walgreen Co posted weaker-than-expected sales for July, hurt by sales of less-expensive generic drugs and as people spent less than-expected on non-prescription items.

Starbucks testing green coffee drinks


refreshersStarbucks will begin testing summer drinks with a base of green, unroasted coffee in San Diego today as it works on new products to drive sales and put more distance between itself and rivals like McDonald’s — which is rolling out the kinds of drinks that Starbucks built its business on.

The drinks, called “Refreshers,” will be offered in cool lime and very berry hibiscus flavors. They are made with fruit and are low in calories and caffeine, said Julie Felss Masino, Starbucks’ vice president of global beverage. 

Check Out Line: Modest gains expected for U.S. retailers


shop1Check out the modest gains expected for U.S. retailers in July.

U.S. retailers look set to report a small improvement in same-store sales for July as anxious consumers cut back on spending and big chains returned to discounting to lure them into stores.

Analysts are expecting same-store sales growth of 3.1 percent, compared with a decline of 5.1 percent last year, with department stores and discounters showing the biggest gains, according to Thomson Reuters.

Check Out Line: SYMS is nation’s hottest retailer


FandECheck Out STORES Magazine’s 2010 Hot 100 Retailers list.

The top spot goes to off-price retailer SYMS, based in Secaucus, New Jersey. The chain, known for the slogan “An educated consumer is our best customer,” bought 20 Filene’s Basement locations last year, and now offers discount designer clothes for women and men. Other off-price chains who made the top 100 list include Citi Trends (#10), Ross Stores (#21) and TJ Maxx operator TJX (#29).

The annual list ranked the fastest-growing retail chains in the United States, based on increases in year-over-year domestic sales between 2008 and 2009. The list was compiled by Kantar Retail on behalf of STORES Media, which is the publishing and communications group of the National Retail Federation (NRF).

Check Out Line: Reading the earnings tea leaves


beam1Check out the latest batch of quarterly earnings to parse in the consumer world.

Fortune Brands and Newell Rubbermaid both posted a stronger-than-expected quarterly profit and raised their full-year forecasts despite talk of “headwinds” in the second half of the year by the former and a “lackluster economy” by the latter.

Consumer goods maker Fortune Brands said its results were helped by double-digit sales growth for its home and security products. The maker of Jim Beam bourbon, Titleist golf balls and Moen faucets cited headwinds for the rest of the year higher but  still raised its profit outlook.

What’s a nurdle? Well, Colgate and Glaxo are sparring over the word


nurdle1To paraphrase William Shakespeare, would a nurdle by any other name still be a nurdle? 

For those who don’t know, a nurdle — a wave-like gob of toothpaste applied on a toothbrush —  is at the center of a trademark lawsuit filed by consumer product company Colgate-Palmolive against rival GlaxoSmithKline.