Shop Talk

Retailers, consumers and prices

Check Out Line: Signs of stability at Coach

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coach1Check out signs of stabilizing demand at U.S. handbag and accessories maker Coach.

The leather goods company posted a lower quarterly profit, but said business was stabilizing at its North American stores at pre-December levels. The company has refrained from deep profit-sapping discounts in a strategy that has preserved the status of its brand but hurt sales.

Chief Executive Lew Frankfort said consumers have some optimism that the worst of the uncertainty is behind them and Coach has greater visibility into how shoppers will behave in the coming months.

Coca-Cola also reported a lower profit, but its results met analysts’ expectations. That came a day after rival PepsiCo posted a better-than-expected quarterly profit and offered $6 billion to buy the remaining stakes in its two largest bottlers as it seeks to better control its distribution and cut costs.

Soft drink sales fizzle

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Are you drinking fewer soft drinks these days?  It appears many Americans are, with the volume of carbonateUSA/d soft drinks sold in the United States down 3 percent in 2008, according to Beverage Digest.

Last year’s fall, combined with smaller drops in the previous three years, means that the growth seen in 1997 through 2004 has been wiped out.  Coca-Cola and PepsiCo each lost a little bit of market share, while No. 3 player Dr Pepper Snapple saw its market share rise to 15.3 percent from 15 percent.  Coca-Cola is still the leader, with 42.7 percent of the market (down from 42.8 percent).  PepsiCo‘s got 30.8 percent (down from 31.1 percent).

Hansen selling beauty in a can

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By Shivani Singh

Hansen Natural, the maker of Monster energy drinks and caffeine-free sodas, is betting that woman will splurge on its new ”Self Beauty Elixir.”

As the stress of rising unemployment and falling home prices take their toll, the drink maker believes that members of the fairer sex will seek refuge in the 35-calorie drink that comes in exotic flavors like Blushing Berry, Pink Lemonade and Tropical Bliss.

Check Out Line: Thirsty for growth

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USA/Check Out liquid assets losing some steam.
 
While companies in every sector have been hit in the downturn, people still have to drink; especially when times are tough and they may reach for a little pick-me-up at a bar or a convenience store. That should help brewers and soda makers, right?  Well, sort of.

MillerCoors, the combined U.S. operations of Molson Coors Brewing Co and SABMiller Plc, said quarterly net profit jumped 16.5 percent as it cut costs and raised prices. MillerCoors, the No. 2 U.S. beer company with brands such as Miller Lite and Coors Light, said sales rose 3.1 percent to $1.74 billion.  Still, the U.S. beer category softened during the fourth quarter. A big reason the company did well was because it raised prices.
 
Molson Coors, meanwhile, said its fourth-quarter results were hit by slowing beer sales, higher commodity costs and that pesky foreign currency. The company’s worldwide beer volume rose 4 percent for the year, but fell 4.2 percent in the fourth quarter on a proforma basis. Fourth-quarter profit dropped 44.1 percent.

Check Out Line: So, what’s the consumer up to these days?

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pepsi.jpgCheck out the latest peeks into consumer behavior.
 
You know how when there is a huge news event, people stay home to watch it unfold on TV and order pizza?
 
Well, apparently that doesn’t happen when the major news event is a meltdown in the U.S. financial system.
 
Domino’s reported a dip in quarterly profit on Tuesday, with U.S. sales down 6.1 percent at restaurants open at least a year.
 
The credit crunch has also made it harder for the company to open new restaurants, overhaul existing ones and turn over poor performing franchisees, CEO David Brandon said.
 
Less pizza being sold also means less need to wash it down with Pepsi. PepsiCo missed Wall Street earnings expectations, hurt by disappointing U.S. soft drink sales.
 
Pepsi trades in brand names, like Cheetos and Tropicana. But brand names are coming under fire from thrifty shoppers seeking private-label products.
 
Just ask Supervalu. The grocery chain operator also posted lower profit as consumers traded down to lower-cost store brands.
 
So, to paraphrase John Belushi’s Greek diner owner, “No Coke! No Pepsi! Sam’s Choice.”
 
Also in the basket:
 
Thriftiness on special in aisle 5 (N.Y. Times)
 
Credit crunch raises pressure on U.S. textile industry (WWD, subscription only)
 
Cadbury cuts more jobs as Q3 sales rise 6 pct

(Reuters photo)

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