Shop Talk

Retailers, consumers and prices

As downturn takes toll, food bank volunteers become clients

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foodThe longest recession since the Great Depression has taken an exacting toll on Americans and their ability to put food on the table. Families who once considered themselves solidly middle class are now signing up for food stamps or turning to food banks to feed themselves in the face of lost jobs or cut wages.

“These are our neighbors, our friends, the people we go to church with,” said Margaret McKenna, president of the Walmart Foundation, of the number of Americans who are going hungry. “This is not like this is the other, people we don’t know. These are people we do know.”

Food stamp enrollment has reached record numbers, while a  survey by Feeding America, the nation’s largest domestic hunger relief organization, found that 99 percent of participating food banks reported a surge in demand for emergency food assistance in the past year. Ninety-eight percent of food banks said that demand is being driven by first time users.

Jean Osborn, 61, who lives in Bluffton, Indiana with her 76-year-old husband, knows what it means to lose her footing in this economy. Osborn can no longer work due to health issues and her husband supports them with a factory job that pays $33,000 a year — an income level that means the couple does not qualify for many government benefits.

Food sellers: I’m no Twit!

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grocerylist1Just when it seems like everyone is using Twitter, we learn that is not really the case. 

A panel discussion on Thursday at the CIES World Food Business Summit in New York featured four prominent industry leaders: Sara Lee CEO Brenda Barnes, Cargill CEO Greg Page, Kraft CEO Irene Rosenfeld and Jeff Noddle, executive chairman of grocery chain Supervalu. The conversation turned to how the panelists’ companies would stay relevant with the next generation of consumers.

Check Out Line: Tale of two trends for General Mills

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Check Out quarterly results at General Mills.hamburger

The maker of Progresso soups, Hamburger Helper and Green Giant frozen vegetables posted a disappointing profit for its fiscal third quarter. Even its slightly higher full-year outlook is below Wall Street’s expectations.

But here’s an interesting twist — the company saw strong sales of cereals, soups, frozen vegetables and refrigerated dough during the quarter, in a continuing trend whereby consumers are eating more meals at home to save some money in the recession. But while that helped sales in the U.S. retail segment, the bakery and food service segment languished, as consumer thrift led to fewer trips to restaurants and cafeterias.

Check Out Line: There’s a lot to digest …

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Check Out the lineup at Reuters Food and Agriculture Summit 2009.USA-COSTCO/

Executives from various food firms are slated to speak at the Reuters Summit in Chicago beginning today, with the first handful of executives from companies such as Wal-Mart Stores, Campbell Soup and Hormel.

With the economy front and center, executives are expected to discuss the tug of war to keep food prices at current levels, even as they fight hard to entice shoppers to buy their products on a tight household budget.

Whole Foods selling 13 stores in settlement

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wholefoodsflag1Natural 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)

Check Out Line: Too Many Chickens

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VENEZUELA/Check out more grim news on the jobs front, from the food sector.

Pilgrim’s Pride became the latest consumer-related company to cut jobs when it said on Friday that it plans to idle three U.S. plants because of an oversupply of chicken and weak consumer demand. The plants, in Georgia, Louisiana and Arkansas, employ about 3,000 people, or about 7 percent of the company’s U.S. workers.

The chicken producer, which is fighting to emerge from Chapter 11 bankruptcy protection, said the closings were needed to reduce production of low-value meat that is draining its finances. 

Check Out Line: Food vs foreign currency

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Check Out Sara Lee and Kraft Foods joining the “stronger dollar” bandwagon. KRAFT/

Both food makers cut their profit forecasts for the current year, citing the pain they expect from the stronger U.S. dollar decreasing the value of sales from international markets.

Check Out Line: Sales up at Burger King, profit misses view

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Check Out Burger King missing Wall Street views but saying sales grew 12 percent worldwide, with sales at restaurants open at least a year up 3 percent in the United States and Canada.

Lower-cost fast-food chains have benefited in the economic downturn, while higher-priced sit-down restaurant chains like Applebee’s and Chili’s Grill & Bar have been hit particularly hard, as consumers slash discretionary spending to adjust to falling home prices, a credit crunch and higher food and fuel costs.

McDonald’s banking on consumers lovin’ new packaging

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McDonald’s is banking on diners lovin’ its new global packaging that will emphasize the hamburger chain’s products and food over the lifestyle of its customers.

The new wrappers, boxes and other containers will now carry photographs and graphics of food and ingredients, as well as playful stories and information about the products. The new packaging is meant to build brand loyalty with the 56 million customers served daily, even as McDonald’s has seen an increase in demand for its low-priced menu items amid the weak U.S. economy.

Check Out Line: Yummy profits for food companies

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Check Out the joy at Kraft and Kellogg.

Both Kraft, the largest North American food maker and Kellogg, the world’s largest cereal company, posted third-quarter profits that topped Wall Street’s expectations thanks to price increases and new items. The results are yet another nod to the fact that while you may shun clothes, jewelry or furniture during crunch times, you still gotta eat.

But Chief Executive Irene Rosenfeld of Kraft, with brands from its namesake cheese and Maxwell House coffee to Oreo cookies and Toblerone chocolates, warned that tight credit conditions could cause some retailers to liquidate their inventories, which could affect product shipments in the fourth quarter.

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