Where You Are: Home > News & Press > Advertiser Tidbits

Advertiser Tidbits for the week of 9/07/04

Automotive:

• Cars.com is ramping up its advertising expenditures to coincide with the fall car-buying season. The campaign, composed mostly of 30-second spots, is mostly appearing on cable, including a sponsorship of ESPN’s SportsCenter.
• Auto sales for August fell a total of 12.4%, 5% when adjusted for the fewer selling days this year. “There’s a clear slowing in the rate of growth in the economy,” said GM’s Paul Bellew. “We have seen some impact.” GM plans to cut production by 6.9% in the fourth quarter. In some additional results for August (adjusted), Mazda was off 20%; Kia, -8%; Audi, -15%; Hyundai, +1%; Subaru, -13%; Suzuki, +60%; Porsche, +21%; and Isuzu, -5%. The three top-selling vehicles of the month were trucks, Ford’s F-Series, Chevy’s Silverado and Dodge’s Ram. Toyota’s Camry was the best-selling car.
• One company taking advantage of bad news is LoJack whose revenues are expected to increase 20% this year as a result of increases in car thefts. The company offers a radio transmitter for $695 that notifies the police in the event of a theft. The device has a 90% recovery rate.

Retailing:

• Circuit City and Verizon Wireless have expanded their relationship, and the latter will open store-within-a-store units in almost all of the retailers’ 600+ locations.
• While there have been some good results from the sporting goods retail industry, Sports Authority said quarterly same-stores sales fell 3.8%. Totals include both the former Gart Sports units and the old Sports Authority locations.
• Aaron Rents is acquiring Home Express, operator of 21 stores in South Carolina and four in North Carolina. Aaron says the Carolinas are an increasingly important market for it.
• The Associated Press reports Sony is currently in discussions with Wal-Mart and Costco to increase its sales via mass-merchandiser outlets. Previously, the company has mostly done its business through consumer electronics stores like Best Buy and Circuit City. U.S. sales account for about 26% of Sony’s global revenue. The discounters have had a positive effect on sales of Sony’s Korean and Chinese rivals, according to the AP.
• Some more retail results from a generally disappointing August: Talbots’ comps were down 4.6%, Dillard’s was off 5%, Chico’s was up 3.6%, and Christopher & Banks was down 6%. CBS MarketWatch reports teenager-oriented chains generally outperformed the rest of the market, with chains like American Eagle, Pacific Sunwear and Bebe producing an average 5.6% same-store boost. The International Council of Shopping Centers computes the full same-store retail market at up just 1.1%.
• The acquisition of Mervyn’s by a private investment firm has been completed and the company is now independent. It says it has an “opportunity to differentiate itself within the mid-level retail market.”
• In quarterly results, Burlington Coat Factory was up 2.9% in comp stores. June was up just 1.6%, but July and August rose 4.0% and 3.5% respectively.

Drug Store & Supermarket Chains:

• Albertson’s says that extra promotions, intended to entice people back to stores after the California strike, cut into the company’s earnings. Because of the residual effects of the work stoppage, comparable store sales at the chain declined 1.3%. Excluding the California operations, comp sales rose 0.2%.
• A number of advertisers are getting involved in the Rock the Vote campaign, which encourages young people to vote. 7-Eleven will distribute voter registration cards in both English and Spanish at kiosks in some of its stores, along with in-store coupons for savings on Sunkist, 7Up, and its own Super Big Gulp drinks.
• Piggly Wiggly Carolina Co. plans to offer biometric payment technologies in all of its 120 supermarkets soon. The company has begun testing the system that lets customers pay for their orders with the touch of a finger. The service is already available in all 176 Bi-Lo stores in the Northeast. “It’s doing surprisingly well, “ says a Piggly Wiggly exec. “The (customers) were a bit hesitant at first, but more and more of them have been able to grasp the concept each week.”
• In retail drugs, Walgreen comps were up 9.7% last month, and Long’s was up 1.3%.

Fast Food & Restaurant Chains:

• Bromley Communications, the Hispanic agency for Burger King, has a new idea. It’s created some spots targeted at Hispanics that will run in English-language programs that comp high in Hispanics. The San Antonio Business Journal says shows like Smackdown, George Lopez, America’s Most Wanted, and One On One are being used, and BK’s director of multi-cultural marketing said the company “recognizes that a large numbers of Hispanics are tuning in Fox, NBC, and ABC.”
• Arby’s has signed franchise agreements that will see thirty new locations in Nebraska, Iowa, Illinois, Wisconsin, Virginia and North Carolina. Checkers/Rally franchisee National Restaurant Development Inc. plans to open 20 more locations in Los Angeles, Nashville and Phoenix over the next five years.
• Papa John’s continued to struggle; its system-wide comps were down 1.2%.
• Perkin’s Restaurants same-store sales were down 0.5% in the latest quarter, with the number of customers down 3.5%, but average check up 3%.
• Roy Rogers, once a major fast-food chain but now down to just 55 locations, is starting a new tag line, “Real Food. Real Choices,” to position itself a “cut above” competitors, according to Nation’s Restaurant News. Tandem Associates of Blue Bell, PA, is its new agency.
• In yet more restaurant news, Toys ‘R’ Us stores are now selling the Subway Artist Play Set, in which kids can play with plastic food and become “sandwich artists.”
• And in one last fast-food note, Stores magazine reports some McDonald’s restaurants are experimenting with remote call centers as much as a thousand miles away from the store, to take orders at the drive-in lane. It’s believed the system can produce faster production of the customers’ orders, and actually save the store some money in labor costs.
• Wendy’s reported an August same-store sales increase of 2.8% at company-owned stores, with franchisees up about half that, partially attributable to the hurricane which closed about 100 stores for a while. And the much-smaller Tim Horton’s subsidiary continues to show great results: same-store sales there were up 10.4% for the month.
• Applebee’s has a “reason” for disappointing results that can only be used every other year. It says the Olympics hurt its sales for the 4-week period ended 8/22, and it predicted the second week of the games would also be a bad week.
• We’ve already reported that Ruby Tuesday, one of Applebee’s competitors, which has long had a negative feeling towards advertising, breaks its first national campaign next month. The New York Times says these and other chains like Friday’s are fighting for bigger shares of a $32.2 billion market that grew by 7% last year.

Other Categories:

• We reported last week that The Richards Group had taken over creative duties for Greyhound. Advertising Age says the 90-year old brand will test new creative concepts starting next month, trying to reach younger riders and to overcome negative images of “tacky” terminals and “road worn vehicles.” One ad exec says Greyhound “suffers not from bad marketing but from no marketing.”
• Harrah’s and Caesars have to divest four of their casinos in order to receive governmental approval of their merger. Going on the block are the Atlantic City Hilton, Harrahs’ in Tunica, MS and East Chicago, IN, and a Bally’s casino in Tunica.
• Could it be the end for Hostess Twinkies? Parent Interstate Bakeries, which also produces Wonder Bread, is in financial difficulties and could soon declare bankruptcy. The New York Daily News says the company is another victim of the low carb craze.
• Washington Redskins owner Daniel Snyder has notified the SEC of his intention to “influence management” of Six Flags Inc. He has already purchased about 9% of the company’s stock, and could be ready to buy a controlling stake.
• Tyson Foods says soft demand has led to lower projections of yearly profit projections.
• Labatt USA and Beck’s North America have combined operations into a new company called InBev USA, which will handle distribution of those two brands plus some smaller ones in the U.S. Belgian beer Stella Artois will become a high priority for growth as it goes to full national distribution next year.
• Clorox is introducing a new garbage bag that resists punctures or tears from even sharp objects. The Glad ForceFlex will be supported by the company’s biggest launch budget ever, $60 million, says Advertising Age.
• Coke has decided to change the name of Diet Sprite to Diet Sprite Zero and give the brand a new look. The changes are meant to make the brand hipper.
• Savvier, Inc., has agreed to pay back $2.6 million to the customers of the BodyFlex weight loss system, which the Federal Trade Commission had charged was guilty of deceptive advertising. The FTC said the BodyFlex infomercial was one of the most-heavily run last year, with at least 2000 airings between March and September.

NOTE: Content copyright © 2004 by Cable Spots, the daily fax newsletter and used by the CAB with permission. Contact Cable Spots at 1-888-884-2630 or visit their web site to subscribe for daily business and industry news updates.

Top of Page