Shop Talk

Retailers, consumers and prices

Check Out Line: Data dump

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food.jpgCheck out the latest retail scanner data.
 
The data, compiled by ACNielsen, show what consumers are buying and what they are taking a pass on.
 
According to J.P. Morgan’s take, the data show that shoppers are still scouring stores for ways to save money.
 
“The general themes remain consistent this month: sales growth is being driven by price, private label is gaining both dollar and volume share, and volumes continue to decline overall (likely due in part to a migration from measured channels to unmeasured channels such as Walmart),” J.P. Morgan analysts said in a research note.
 
Oh, that last part might be a bit important – that bit about unmeasured channels.
 
Not all stores are measured by Nielsen and competitor IRI. And some of those stores are the ones consumers are heading to in droves in what many economists say is a U.S. recession. Think Walmart and dollar stores, for example.
 
Some food companies say they expect to ship fewer products after raising prices in a weak economy. Hershey said yesterday that it expects volume to fall, for example.
 
That said, sales are still up for many food makers, helped by sharp price increases put in place to combat commodity costs that soared to unprecedented levels.
 
But lower-priced private-label products (or store brands) are also gaining market share. So the balancing act continues as food makers try to keep prices high but at the same time, need to ensure the price hikes don’t result in too much lost volume.

In yet another twist, many commodity prices are now falling. That could lead to lower prices from store brands as retailers try to get more customers in the stores and lure them with lower prices.
 
Also in the basket:
 
Housing starts plunge
 
Mexico’s Modelo not looking to buy back stake
 
Sonic posts lower quarterly profit

 (Reuters photo)

Check Out Line: Battling booksellers

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books.jpgCheck out those coupons from Borders.
 
In a new report, J.P. Morgan analyst Charles Grom begins tracking the promotional cadence at book sellers. Grom said he is keeping a close eye on discounts and promotions as the price war among book retailers extends into the first half of 2008 and Borders prepares to launch its own e-commerce site.
 
 
The view so far?  “Borders is still clearly focused on driving the top line, perhaps at the expense of margins, as it remains the most promotional retailer in bookselling today,” Grom wrote.
 
Borders averages about two coupons per week, with spikes in broad-based discounts during the holiday, quarter-end and month-end periods, Grom said. The company put more promotional focus on specific categories in February and March.
 
Barnes & Noble’s rewards program, unlike Borders’, is subscription based, with members paying $25 and receiving discounts,
 
“As such, Barnes & Noble’s direct marketing campaign serves more as a reminder of discounts rather than a limited time offer,” Grom said. But he added that he’s seen some special offers from Barnes over the past several weeks, including a 40-percent discount on kids’ books.
 
Grom sees the pace of discounts at Borders continuing in the first half as it ramps up e-commerce sales and faces macroeconomic headwinds.
 
Also in the basket:
 
The latest in fashion: pink slips (NYTimes)
 
Wendy’s reports lower quarterly same-store sales
 
Constellation Brands profit tops view

 (Photo: Reuters)

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