Shop Talk

Retailers, consumers and prices

Starbucks drive thru menu getting makeover

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thissbuxStarbucks’ drive thru menus are getting a facelift — as the cafe chain takes a page from the fast-food industry’s playbook.

At the end of August, the menu boards at Starbucks’ 2,600-plus drive thrus in the United States and Canada will have more pictures and fewer words. Fast-food chains like McDonald’s, which has been going after the Seattle coffee company’s core business with espresso drinks, frappes and smoothies,  commonly use simple, photo-based menus to tempt diners.

“People eat with their eyes,” said Clarice Turner, Starbucks’ senior vice president in charge of the menu makeover.

To make room for the additional photos and larger print, the number of items featured on the new menus will be cut from about 75 to around 25. Despite that, everything available inside the cafe will still be available in the drive thru lane, Turner said.

Diners say Olive Garden, Papa John’s are tops

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papajohnsPapa John’s and Olive Garden got top marks in their respective restaurant categories in the University of Michigan’s 2010 American Customer Satisfaction Index, while McDonald’s and Chili’s Grill & Bar were laggards.

Papa John’s took the lead in the limited-service category from Domino’s Pizza. Notably, this year’s win for Papa John’s came as Domino’s was getting a sales bump from its reformulated pizza recipe and crowing about how its new pies were beating rivals in taste tests. 

from Dhanya Skariachan:

Check Out Line: A mixed bag of consumer news

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Mixed bag

Check out

a mixed bag of results from the consumer world.

Investors looking for yet another clue to gauge the strength of the U.S. consumer spending recovery might find some solace in online retailer Overstock's results and women's apparel retailer Ann Taylor's strong first-quarter outlook.

Overstock, which sells excess inventories of clothing, accessories, furniture and other items, recorded a 42 percent rise in quarterly sales, while Ann Taylor forecast a same-store sales rise of 11 percent in its latest first quarter.

Check Out Line: Consumers spending again?

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GERMANY/Check Out home-related retailers Sears Holdings and Williams-Sonoma reporting better-than-expected quarterly results. Does this mean consumers are feathering their nests again?

Somewhat, according to Barclays analyst Michael Lasser, who said Williams-Sonoma’s results were “an indication that upper-income consumers are spending a bit more, which is not surprising given the rally in the stock market and the stabilization in the housing market.”

Check Out Line: Frugal fatigue?

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bootsplaid1Check out what women buy when they get tired of being a frugalista: boots, plaid and outerwear. 

Those were some of the products that helped October U.S. retail sales improve from a year ago, when the unfolding financial meltdown had shoppers fearing a second Great Depression.

The U.S. recession ends, but not for you

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unclesambegsTalk about a disconnect.

Experts say U.S. economic growth has returned, signaling the end of the longest and deepest recession since the Great Depression.

But the good news for Wall Street — where shares have been running up — is showing no signs of trickling down to Main Street, where unemployment is flirting with 10 percent, foreclosures continue to rise and record numbers of families now depend on government-issued food stamps to make ends meet.

Check Out Line: Retail profits surprise, but still down

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Check out the Retail Metrics earnings snapshot. ARCANDOR/

About two-thirds of the way through the second-quarter earnings season, retailers are beating earnings expectations by 5.1 percent on average, the research firm said.

But those were pretty low expectations and earnings are still down 6.4 percent compared with a year earlier. It is even worse when Wal-Mart is excluded. Then earnings are down 9.8 percent, Retail Metrics said.

Check Out Supervalu’s shopper woes

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Check Out Supervalu’s troubles from consumer thrift.USA-COSTCO/

The third-largest  U.S. supermarket operator, with about 2,500 stores, said that its earnings in the first quarter, which ended on June 20, were hurt by a “tougher than expected business environment.” Its results would be much below analysts’ expectations, the grocer said.

“Since providing guidance on our fourth quarter earnings call, consumers have become more value focused and cautious in their spending, which has pressured sales and margins greater than anticipated,” Supervalu’s CEO Craig Herkert said in a statement.

Consumer bankruptcy filings jump in May

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GM/More Americans filed for bankruptcy in May, slammed by job losses and home forclosures, according to the latest data from the American Bankruptcy Institute.

More than 124,800 people sought protection from their creditors in bankruptcy court, up 37 percent from last year.

Check Out Line: No discounts? no customers

Check out Abercrombie & Fitch’s falling profits.

 

The company played a remix of “Cold as Ice” as hold music for its conference call with analysts. It’s hard to tell if it is supposed to be ironic, or if the company is just tone deaf. 
 
The latter could be possible, as Abercrombie has decided to tune out consumer’s expectations that retailers will offer discounts to try to get them in the door.
 
In November, CEO Mike Jeffries said the short-term relief provided by promotions would have the affect of damaging the brand in the long term.  He defended the strategy again on Friday, though the company has cut some prices at its Hollister and abercrombie chains.
 
But if people stop going to your store, do they eventually forget about your brand?
 
Abercrombie’s same-store sales fell 25 percent in the key fourth quarter. Of course, refusing to discount (other than on clearance items) protects profits. Or maybe not. Net income fell 68 percent, though some of the decline was related to a new employment agreement for the CEO.
 
Also in the basket:
 
PepsiCo Q4 profit falls, but matches Wall St view
 
Sears launching online service to connect clients, contractors (Chicago Tribune)
 
Starbucks to sell instant coffee
 
Microsoft to open own stores, take on Apple

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