Retailers, consumers and prices
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.
But it’s not just chicken producers feeling the crunch of the recession.
Reuters reporter Bob Burgdorfer wrote this week that Americans are eating more hamburgers and fewer steaks as the economy wallows in recession — leading to huge losses at U.S. feedyards that fatten the cattle for steaks.
Home Depot said it is gearing up for spring with a wide assortment of lawn equipment and fertilizer products, looking to cash in should consumers cancel their contracts with professional landscaping companies.
Check out the not-so-chipper news in the retail world.
Restaurant chain Burger King reported lower profits and cut its full-year forecast due to the currency fluctuations, while cosmetics and perfume companies Estee Lauder and Elizabeth Arden rang up lower, albeit better-than-expected, profits and said they would cut jobs.
Indeed, retailers overall posted the second weakest monthly same-store sales performance since Thomson Reuters began tracking the data in 2000 as heavy job losses, weakness in the U.S. housing sector and the still-tight credit markets have many consumers closing their wallets.
When Ronald Reagan, an avid lover of jelly beans, was sworn in as president of the United States in 1981, over three tons of Jelly Belly candies were consumed during the festivities. Likewise in 2009, after Barack Obama assumed the position, his preferred bottled beverage, Honest Tea, seems to be getting a boost.
The 44th president is an open fan of Honest Teas, and even stocked his favorite flavors — Green Dragon Tea and Black Forest Berry — in the White House refrigerator, said the company’s co-founder and CEO Seth Goldman.
The drugstore chain confounded some investor expectations by staying in house and naming President Greg Wasson as its next CEO.
After looking for months at external candidates, it said Wasson will take over Feb. 1. The news was somewhat unexpected as Walgreen had hired a search firm and looked at several outside candidates. Some analysts had suggested Walgreen needed to bring in an outsider to shake things up.
Borders dumped Chief Executive George Jones less than three years after he joined the No. 2 U.S. specialty bookseller, replacing him with a private equity executive with experience turning around ailing companies. The company, which reported a sales decline of almost 12 percent during the holiday shopping season, also named a new chief financial officer as well as replacing its executive vice president for merchandising and marketing.
In November, Borders said it was no longer pursuing a possible sale of the company even as it posted a larger-than-expected operating loss.
Check Out mixed news on the retail sales front.
The retail data service of MasterCard Advisors said U.S. retail sales fell as much as 4 percent during the holiday season. SpendingPulse tracks sales activity in the MasterCard payments network and couples that with estimates for other payment forms.
Check Out unemployment’s strain on consumers’ wallets.
The U.S. Commerce Department said consumer spending contracted 0.6 percent in November, the fifth-straight monthly fall. Incomes shrank 0.2 percent. A separate report showed initial claims for jobless benefits last week reached the highest level in 26 years.
The recession, corporate cutbacks and lower demand for big-ticket items are not stopping LG Electronics from expanding its U.S. appliance business.
Regional chain hhgregg is accepting Circuit City gift cards for purchases of electronics, appliances and mattresses at its stores. The Circuit City gift card value, when verified, will be good toward up to 20 percent of the hhgregg purchase price.