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Advertiser Tidbits for the week of 10/04/04

Automotive:

• Auto analysts are saying that increased incentives on U.S. makes and an uptick in business of foreign brands should help lift sales for September. That’s the good news. The bad news---U.S. automakers are expected to once again lose share.
• Toyota is launching its new campaign this week, replacing the “Get the Feeling” tag line it’s used for three years with “Moving Forward.” The Detroit News reports the new campaign is fully integrated with Toyota’s ethnic marketing, with spots tailored to specific models that do well with some ethnic groups. Along with spots aimed at African-Americans, commercials for some vehicles were done in Spanish and Chinese, each with slight variations in the “Moving Forward” tagline.
• The News also notes several carmakers will play the “Made in U.S.A.” card in upcoming campaigns. It’s not just the domestic Big 3, but also Toyota and Honda (each of which have 8 plants here), draping themselves in the flag.
• It looks like all those “72-hour sales” car dealers ran this week to close out the ‘04s were mostly successful. Some analysts think the annualized sales rate could have risen to as much as 18 million units. We’ll have the monthly sales reports for you early next week.
• Toyota plans to double the number of hybrid Prius cars it allocates to the U.S. market next year, to about 100,000. Customers are now waiting months for the vehicles.

Retailing:

• Wal-Mart is sticking with its September forecast of +2% to +4% same store sales growth. Categories doing well for the month include bedding, electronics, food, pet supplies and sporting goods.
• Lowe’s will continue its rapid expansion, planning 150 more new stores in fiscal ‘05, and at least the same the following year. Its in-store priorities are to build up installed sales, special order sales, and commercial business customers.
• Lowe’s large expansion plans will bring the chain into Wisconsin, Maine and Minnesota for the first time by the end of 2005, putting the retailer in all 50 states.
• Christopher & Banks reported some bad numbers for September that hopefully will not presage more bad news when others report next week. Same-store sales were down 5%. The company says it did better in the West, where temperatures were cooler.
• Christopher & Banks has agreed to buy Gilmore Bros. Inc, owner of 20 Acom women’s apparel stores in nine states.
• Tractor Supply Company may have been one of the weather winners--same store sales were up 10.1% last quarter, with “emergency response products” strong in the Southeast.

Drug Store & Supermarket Chains:

• The Delhaize Group, parent of Food Lion and Hannaford, has purchased the 19-store Victory Super Markets chain, based in New England. The stores are likely to be merged into the Hannaford nameplate.
• 7-Eleven is testing a more upscale format at a number of its Austin, TX locations. The emphasis will be on more fresh foods, bakery goods and salads.

Fast Food & Restaurant Chains:

• A J.P. Morgan analyst says McDonald’s and/or Arby’s parent Triarc may be interested in acquiring Krispy Kreme Doughnuts. Krispy Kreme, once on fire, recorded a 55% drop in second quarter earnings, and is being investigated by the SEC for accounting irregularities. McDonald’s already sells Krispy Kreme doughnuts at some of its Canadian locations.
• In a shocker, Wendy’s reported negative same stores sales for September. Those sales declined 1.4%, a fact that company attributes to damage from the various Florida hurricanes. Tim Horton’s, based mainly in northern states, saw its comp sales rise 8.1% to 8.4%.
• A number of Blimpie franchisees have filed an arbitration grievance against the parent company saying that recent changes made by the new president are hurting franchisee profits, reducing local advertising payouts and weakening the brand.
• Franchise agreements have been signed to develop 18 Johnny Carino’s Italian Restaurants in Washington and Oregon. Carino’s parent Fired Up Inc. is based in Austin, TX.
• Outback says same store sales were up just 1.2% in September, adversely affected by the Florida hurricanes. Carrabba’s Italian Grill was up 1.8% while comp sales at Fleming’s steakhouses rose 11.6%

Telecommunications:

• Although AT&T said it was exiting the consumer phone business a while ago, that seems to have been for traditional telephony, not the Internet. The company now says it will sell its CallVantage VoIP service at Circuit City stores in 39 states, covering about 80% of that chain’s locations.
• Verizon has begun offering a new phone bundle that includes unlimited voice over internet protocol (VoiP) service and DSL for a monthly charge of $60. Verizon’s VoiP service is marketed under the name VoiceWing.

Other Categories:

• U.S. Airways told the bankruptcy court that there is a “high probability” that it have to liquidate its assets by mid-February if its request for temporary pay cuts for its employees is not approved.
• Kraft is adding a South Beach Diet seal of approval to a number of its current products, including Jello sugar free, Crystal Light, Louis Rich turkey, Light ‘n Lively cottage cheese and Planters nuts.
• Harrah’s and Caesars will sell four casinos (East Chicago, Atlantic City and two in Tunica), to Colony Capital to allow them to proceed with their merger plans.
• Although some other soft drink bottlers have been a tad bearish recently, Pepsi Bottling Group said profit last quarter grew 4.4% helped by price and volume improvement. Mountain Dew was particularly good to the company, benefiting from its Pitch Black brand extension.
• Online travel site Orbitz is talking to Cendent Corp., parent of Avis and Coldwell Banker, about a merger.
• The Army National Guard is launching a new $42 million campaign looking for new recruits. Print and web ads come first this Friday, with TV planned for January. The campaign was created by Laughlin, Marinaccio & Owens, Arlington, VA.
• Six Flags Great Adventure, located in Jackson, NJ, announced it would have the tallest and fastest roller coaster in the world for the 2005 season. The coaster, called Kinga Ka, is the central attraction of a new area in the park called The Golden Kingdom.
• Mrs. Paul’s seaford is getting its first TV campaign in ten years. FCB, NY is creating the $15 million effort. The company spent about $300K on all advertising last year.
• General Mills is announcing plans to convert all its cereals into whole grain products, considered healthier than many current ingredients. Flavor is expected to remain unchanged.
• Advertising Age reports that the recent labor problems on Broadway may have had a positive impact on TV advertising. The new union contract lowers the talent payments for use in TV commercials, both in New York and for touring companies that play all over the country.
• Merck has pulled arthritis medicine Vioxx off the market, and, obviously, has pulled marketing dollars for that product as well. The company will be placing some ads about the withdrawal, says a Merck spokesperson, but expect Pfizer to step up spending on Celebrex and Bextra as alternatives.
• Giant Food of Landover, MD, is launching its own line of organic and natural foods called Nature’s Promise. A total of 90 new products will be available by early next year.
• Like Florida, Ft. Lauderdale is working to bring back visitors after the four hurricanes that hit the state this summer. The city has allocated an emergency budget of $300,000 for radio and TV spots in markets like Boston, Chicago, New York, Philadelphia and Washington, DC. $4 million is being budgeted for 2005.
• A group of Gulf of Mexico shrimpers are putting together an ad campaign touting the superiority of their products, Wild American Shrimp, to farm-bred shrimp.

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