Check out the latest data that could help erase some inflation worries.

U.S. consumer prices rose at a slower-than-expected pace in May, despite higher gasoline costs.  Also, consumer prices have fallen over the past 12 months by the most since 1950, according to new data from the Labor Department.

The Consumer Price Index edged up 0.1 percent in May after being flat in April, below market expectations for a 0.3 percent increase.  Compared to the same period last year, consumer prices fell 1.3 percent, the largest decline since April 1950.

Which prices fell?  Among the declines, apparel and food each fell 0.2 percent and tobacco (which was being advertised at this Hess station recently) fell 0.3 percent.  Shoppers are paying more for items such as gasoline and prescription drugs.

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(Reuters photo)

This Saturday, Lee Scott will retire as CEO of Wal-Mart, the world’s biggest retailer, and Mike Duke will step in to the CEO shoes on Sunday.

Since the management change was announced in November, ShopTalk is fairly certain that Duke has come up with a pretty long list of things to do in his first few months as CEO.

But Reuters talked to analysts and investors about what they want Duke to focus on.

Some said Duke should continue the turnaround started by Scott, looking to boost results in its existing U.S. stores by slowing the opening of new ones.

Others said Duke needs to focus on building loyalty among the new shoppers that it has attracted during the recession to help keep its sales momentum going when times get better.

Another issue for Duke will be to find ways to spur strong sales in its grocery business as it looses the boost created last year from soaring food inflation.

If you could add to Duke’s to-do list, what would you want him to focus on?

(Photo/Reuters: Duke jokes with comedian Sinbad at the Wal-Mart Annual Shareholders Meeting in Fayetteville in 2007)

Thanksgiving dinner promises to take a bigger bite of your wallet this year.

“Thanksgiving food prices are up about 6 percent compared to last year,” said Corinne Alexander, a Purdue University agricultural economist.

Alexander said grocery store prices are increasing at a pace of 7.6 percent, compared with restaurants’ rise of 4.5 percent.

Still, consumers planning to have a traditional Thanksgiving meal at home should find bargains on several holiday staples, including the symbol of the season: turkey.

The estimated wholesale price for turkey is 3 cents to 7 cents per pound higher than in 2007, driven by higher export demand for U.S. turkeys.

Still, Alexander said “turkey is a favorite loss leader item for grocery stores, where they’ll offer you a coupon or a discount to give you a really great price on turkey,” Alexander said.

Grocers typically offer virtually free turkey in hope that shoppers will pick up the remaining fixings for their meals at the same time.

Alexander said cranberries and sweet potatoes — also Thanksgiving staples — should be a bargain this year.

But she predicts that ham will be more expensive, even as other experts expect ample supplies and declining exports to push prices lower.

Pass the stuffing!

(Photo\Reuters)

The latest example of U.S. inflation seems likely to come from 99 Cents Only Stores, the Western retailer that stocks everything from canned beans to cleaning supplies, party favors and fresh vegetables — all for 99 cents or under.
    
On Monday, the City of Commerce, California-based company, with 277 stores in California, Texas, Arizona and Nevada, will announce what it calls “its first change to its price policy since its founding over 25 years ago.” The Los Angeles Times said this was most likely a precursor to price hikes.

99 Cents Only Stores isn’t fessing up just yet, but chances are prices won’t be getting any lower, given the rising price of food staples like milk, eggs and bread that the company sells.
    
The company’s most recent ad announces deals like 99 cent cantaloupes, Hannah Montana notebooks, microwave popcorn and reading glasses.
    
99 Cents Only Stores posted a net loss of $1.51 million in its most recent quarter despite a 4 percent rise in sales from a year-ago net profit of $2.96 million. Profit was hurt by rising operating expenses and higher cost of sales.

“We would like to assure our wonderful customers that they can continue to depend on 99 Cents Only Stores to have the best values on quality merchandise including food and other basic household items,” said Chief Executive Eric Schiffer in a statement.

The big question: If prices rise, what happens to the store’s name?

Check out what it costs National Football League fans to attend games.

The latest NFL season got under way Thursday night as the defending Super Bowl champion New York Giants opened their season with a win (pictured right). For their fans, there were some changes that affected their wallets.

The average ticket price to attend an NFL game rose almost 8 percent to $72.20, according to Team Marketing Report, a Chicago-area sports marketing firm. And if a family of four wants to take in a game played by the Giants, get ready to shell out almost $500 for tickets, beers, hot dogs and other items.

The increases are de rigueur nowadays as the various North American leagues continue to report record attendance and revenues, but cracks may be starting to appear as some fans have begun dialing back spending amid high prices for gasoline and food, and rising unemployment.

As long as the market will bear it, however, fans of the NFL and other professional sports will have to budget for the increases if they want their game-day fix.

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(Photo: Reuters)

Check out the fading influence of tax rebate checks.

Tax rebate checks helped boost June retail sales but their influence appears to have petered out by July, according to data released by the Commerce Department on Wednesday.

The figures showed that total sales at U.S. retailers declined 0.1 percent in July, which was in line with forecasts made by Wall Street economists. A big reason for the drop was a fall off in auto sales. Auto and auto parts sales fell 2.4 percent in the month, their biggest drop since April, and were off a whopping 10.5 percent from year-ago levels. 

But excluding autos, retail sales were up 0.4 percent in July. That was roughly in line with forecasts, but down from a 0.9 percent rise in June. 

Economists said before the numbers were released that spending has been supported by government stimulus checks but that the stimulus effect was waning in July because most of the checks already have been issued. Meanwhile, prices for many food items are on the rise and there was only a slight moderation in gasoline prices during the month. 

The Commerce Department said gasoline sales in July were up 0.8 percent after a 4 percent June jump. But reflecting higher prices, gasoline sales were 24.6 percent higher than in July last year. 

Excluding gasoline, retail sales in July fell 0.2 percent after a 0.1 percent June decline.

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(Photo: Reuters)

Check out more signs of consumers being put in a vise.
 
Personal income rose 0.1 percent in June, the Commerce Department said. That was the lowest rise since April 2007.
 
And in fact, if it were not for the economic stimulus checks some consumers received in June, disposable income would have shrunk, the department said.
 
Meanwhile, costs continued to rise. The personal consumption expenditures price index — an inflation gauge — rose at its highest year-over-year pace since May 1991.
 
Consumer spending rose 0.6 percent in June, but actually fell 0.2 percent accounting for inflation. So consumers are spending more to get less.
 
Oh, and one more thing on the gloomy economic front, Challenger, Gray & Christmas Inc said planned layoffs at U.S. companies rose 26 in July from June.
 
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(Photo: Reuters)

Check out how international sales and the weak dollar continue to lift quarterly results at U.S. companies.

Second-quarter profit at cosmetics firm Avon Products Inc more than doubled, as demand in Latin America and other overseas markets more than made up for sagging U. S. results.

Office Depot posted a 6 percent drop in North American retail sales, but a 13 percent rise in international sales during in its most recent quarter.

Still, investors are wondering when and if the United States’ economic malaise will spread to markets like Europe, Asia and Latin America.

Some cracks are already showing. Britain’s stressed housing market is putting pressure on consumer spending and Spain has reported a plunge in June retail sales amid a severe economic slowdown.

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(Photo: REUTERS/Jo Yong-Hak)

Check out the demise of the dollar menu as we know it?
 
McDonald’s, dealing with rising commodity costs in the U.S., said it is looking at changes to its popular Dollar Menu, which accounts for about 14 percent of U.S. sales.
 
“What fits on that menu will look different than now because it has to be profitable,” said McDonald’s Chief Operating Officer Ralph Alvarez on a conference call with analysts.
 
“We’ve got to make sure we’re pricing smart, not just pricing low. We’ll make the move at some point,” Alvarez said.
 
The comments from Alvarez come two months after Chief Executive Jim Skinnner said the company was willing to absorb some rising costs in order to ensure customer loyalty.
 
“This is not the time to be passing that on to consumers. They have long memories,” Skinner said.
 
One analyst said the popular double-cheeseburger could disappear from the Dollar Menu.
 
But pegging an offering, or even a business, to the dollar can prove to be a dicey proposal. The dollar has weakened and costs have gone up. Most “dollar” stores, for example, stopped capping prices at one dollar years ago.
 
But analysts do not see McDonald’s straying too far from the dollar.
 
“We do not expect McDonald’s to abandon the dollar price point, but rather evolve the menu with either new products at a near-dollar price point or adjust the pricing of select products that have seen significant cost pressures,” Goldman Sachs analyst Steven Kron said in a research note.
 
Perhaps calling it the “Mighty close (to a) Dollar Menu” would solve the problem. To long? Well, that could always be shortened to “McDollar Menu.”
 
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(Photo: Reuters)

Check out the earnings warning from Costco.
 
Warehouse clubs were supposed to be benefiting from the weak economy and soaring gas prices as consumers, hit by rising food costs and gasoline prices, looked to save money.
 
But it turns out that benefit might only be on the sales side, not the bottom line.
 
Costco said Wednesday that quarterly profit would be well below analysts’ estimates.
 
“Factors negatively affecting our fourth-quarter earnings outlook arise largely from inflation, particularly as to energy costs,” Chief Financial Officer Richard Galanti said in a statement.
 
The company is making less money on its gasoline operations and margins on its merchandise were also down as it tried to maintain prices that would attract customers, Costco said.
 
Warehouse clubs and discounters had been some of the better retail sales performers in recent months.

So is Costco’s warning specific to the company, or is the lower-priced part of the retail spectrum taking a hit now, too?
 
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(Photo: Reuters)