Shop Talk

Retailers, consumers and prices

Check Out Line: Beware the ides of rising costs for food companies

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gis1Check out fears of rising costs for U.S. food companies.

Rising commodity costs and promotional discounts are pressuring profit margins for food companies and analysts said more may be on the horizon.

General Mills, whose brands include Cheerios, Green Giant and Haagen-Dasz, said on Tuesday that the gross margin in its most recent quarter was flat, excluding higher ad costs and other items.

On Thursday, General Mills said it expects pricing and promotions to look the same over the next six months as they have the prior half year. It also sees some players in the sector moderating their promotional activity as commodity costs rise and sees raising list prices in some categories after that. 

The company’s comments were seen as a harbinger of things to come, especially since its 2011 earnings forecast missed Wall Street estimates.

Check Out Line: A basket full of profits

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Check out today’s earnings-palooza.

Two retailers topped analysts’ expectations after a strong holiday-season showing, while ConAgra Foods was helped by a makeover of its consumer foods segment.

USA-HOLIDAYSALES/Best Buy’s better-than-expected profit was helped by demand for devices such as notebook computers.  The company’s 12 percent revenue jump came even as Walmart and other chains stepped up their electronics push for the holidays.  Of course, this was also the first winter that they didn’t have to compete against the brick and mortar Circuit City stores.

Check Out Line: The Swiss drinks fight

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Check out the battle brewing between iced tea and hot cocoa.

ConAgra Foods filed a suit against Dean Foods over the common look of their “Swiss” drink packaging.  ConAgra asserts that Dean’s Swiss Premium iced teas infringe its trademark for Swiss Miss hot cocoa products, Reuters’ Jonathan Stempel reports.

The beverages taste different, but they do seem to have some similar looks when it comes to their labels.  Perhaps that confuses some shoppers into thinking that the Swiss Premium sugar-sweetened teas come from the same company as those packets of hot cocoa mix.

Check Out Line: Better than expected

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Check out the trifecta of profits that topped Wall Street views.

Expectations have been pretty low for the consumer and retail sector given the tough economy, cash-strapped consumers and the overall funk in the market keeping shoppers away.

On Thursday, a few companies managed to beat expectations.  Is it a signal that things are finally picking up?

Wal-Mart donates food, cash to fight hunger

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Wal-Mart is partnering with Feeding America, the largest charitable hunger-relief organization in the United States, to provide 70 million meals annually to families and individuals who are struggling to put food on the table during the toughest economic downturn in decades.

The move from the world’s largest retailer comes as U.S. food banks are seeing donations fall short of demand.

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