Advertiser Tidbits for the week of 10/11/04

Automotive:

• With Toyota’s Prius hybrid selling as fast as they can be brought into the country, Honda is doubling its sales goal for its own hybrids, to about 45,000 next year. The Detroit News says about 53,000 hybrids have been sold in the U.S. this year and dealers have “long waiting lists” for the models. Honda introduces a gas-electric version of the Accord in December.
• Mitsubishi is trying to placate its dealers by telling them that measures are being taken to turn around the brand’s fortunes. It’s adding a pickup to the lineup in the 2006 model year, launching a campaign touting the company’s warranty program this month, providing more competitive consumer loans and beginning a certified used car program. Still, the company warns, there is “no quick fix.”
• Average incentives on automotive actually fell a bit in September, to $3,120 per vehicle, with Big 3 incentives averaging $4,045. The 6-years, no interest deals some customers took at the end of the month turned out to be a little cheaper for the carmakers since there was no “cash back” in those deals. Meanwhile, Ford raised the cash back incentive on leftover ‘04 F-150s, in a new offer that lasts until January.
• Audi has begun offering 0% loans for its certified used A6s, hoping to stoke interest in the model.

Retailing:

• Although the upper-end Saks Fifth Avenue division has been outpacing its middle-range siblings, Saks, Inc. will close eight of its Fifth Avenue stores, along with 3 Off 5th outlets. The stores to be close accounted for 7% of Fifth Avenue’s square footage, but less than 4% of revenue.
• RadioShack and Sam’s Clubs are teaming up with the former placing wireless kiosks in the latter’s 542 locations. RadioShack sells Sprint PCS, T-Mobile, and Cingular wireless service and accessories.
• Dillard’s is launching a new line of women’s sportswear called Reba, after Reba McEntire. The chain hasn’t been known for its TV advertising, but perhaps with the star of a primetime series involved that will change.
• Circuit City is launching its own rewards credit card, earning points with each purchase toward a 5% discount on future buys.
• Wal-Mart will open 40-45 new discount stores and 245-250 new supercenters next year, about half new locations and half expansion or relocations of existing stores. Sam’s Club will open 30-40 stores, about half in new locations. And W-M is expanding its Neighborhood Market concept with 25-30 new units in the next year. But it notes current earnings will be at the low end of its estimates, with gas prices still a big concern.
• Here’s an interesting twist on the “nothing over $1” concept that has been so successful the last couple of years. Chain Store Age reports California’s Ironwood Furnishings is planning to open its first retail store, Nothing Over $99 Furniture and Accessories.
• Tweeter Home Entertainment was down 3.5% in total quarterly comps, but did a slightly better minus 1.8% excluding Florida.
• Toys ‘R’ Us is going on the offensive for the holiday season. It intends to make the shopping experience “magical” and is “not going to be embarrassed by price.” The company expects to benefit from a number of exclusive toys that will not be found at rival Wal-Mart. Plus, it says that this will be a good year in general because there are “a lot more good toys” than in previous years.
• Sears is transforming many of its locations into a “multicultural format” that is targeted toward Hispanic, black and Asian customers. 97 of its stores located in markets with 60% minority shoppers, are getting the redo, which includes changes in in-store posters, models of color and brand new product lines.
• Costco plans a “more aggressive” expansion program next year, and will open 34 new stores then, compared to just 20 in the current year. Comps in the most recent quarter have been up 8%.
• We’ll be getting the flood of September retail reports imminently, but Big Lots reported early and the news wasn’t good. Comps were down 2.1%.
• Cracker Barrel has signed a deal to become the first presenting sponsor of the Grand Ole Opry, including sponsor mentions during performances.

Drug Store & Supermarket Chains:

• Long’s Drug reported a 1.7% same-store sales increase for September.
• CVS has created a major TV campaign for those markets where Eckerd stores are being converted to its own banner. The tagline, “CVS/pharmacy: Expect something different,” ties into the company’s loyalty card, Extra-Care.
• Rite Aid says same store sales rose just 2% in September, though front-end sales did better, up 3.3%.
• Walgreen was the first of the retail drug chains to report its September results: Comp store sales were up 9.3%, with total sales up 13.2%. Pharmacy sales continue to drive results-- comp pharmacies were up 11.0%, while comp front-end sales rose a more-modest 6.3%.

Fast Food & Restaurant Chains:

• Pending approval from the bankruptcy court, Sydran, Burger King’s second-largest franchisee, will sell 226 locations to Strategic Restaurants Acquisition Corp. Sydran currently operates in eight widely dispersed states from California to Florida.
• IHOP will remodel all 1,167 units in the next few years, trying to capture a more contemporary look, according to Nation’s Restaurant News. Don’t worry, though, the distinctive blue roofs will stay.
• Wendy’s will install new doubled-sided grills in all of its units in the next three year, which will reduce cooking time by about two-thirds. In a separate note, Wendy’s is testing an entree-sized fruit salad in three areas, Pittsburgh, Portland, OR, and Virginia Beach.
• Bob Evans Farms, which has had a string of poor sales reports, had more bad news in September. Same-store sales were down 4.6%. At least sibling Mimi’s Cafe had a bit better news; same-store sales at the much smaller chain were up 5.4%.
• Darden Restaurants reported same store sales at Olive Garden rose between 5% and 6% in September. Such sales at Red Lobster were flat, not great, but a big improvement from recent performances.
• Yum Brands reported its quarterly results, with KFC up 2% in same-store sales, Taco Bell and Pizza Hut each up 5%. It was the first positive quarter for KFC since 2002. During the period, Yum opened 129 multibrand locations, bringing the year’s total up to 383. Yum has said multibrand locations are its plan now, in a wide variety of combinations including secondary chains Long John Silver and A&W.
• Thanks to the success of its Paradise Pancakes promotion, says IHOP, its third quarter same store sales rose a robust 5.6%.
• Another company in expansion mode is CiCi’s Pizza, which has just over 500 units now and wants to get to over 1000 within five years. It’s just signed several development deals worth about 75 new locations into several Northeast, Southeast, and Midwestern markets.
• Citing great success when it introduced Texas Chicken earlier this year, Church’s Chicken is bringing the product back for another limited run. It’s pre-marinated and coated with a different blend of seasoning and spices than Church’s normal product.
• Denny’s had a great month, comps up 7.0%.
• McAlister Corp., based in Ridgeland, MS, has signed franchise agreements that will see the development of 36 McAlister’s Deli locations in North Carolina, Texas, Oklahoma and Mississippi. The chain presently has 141 locations in 17 states.

Telecommunications:

• Denying rumors that have been circulating, both SBC Communications and BellSouth say they are not interested in buying any long-distance companies like AT&T or MCI.
• SBC Communications is announcing new technology called Unified Communications that puts home and wireless voicemail, e-mail, and incoming fax messages into one place that can be accessed via the Internet or phone. Verizon has started something similar called Iobi in the Northeast that melds some mailboxes and also allows customers to redirect calls from a home phone to cell, or vice-versa.

Financial Services:

• Ameriquest has expanded its relationship with the NFL, and, among other things, will sponsor the halftime show at next year’s Super Bowl.

Other Categories:

• Anheuser-Busch next month launches a new flavored, caffeinated beer called B-to-the-E. The drink was created, says a company spokesperson, “for the 21-27-year-old contemporary adult consumer, specifically in mind for those who are looking for that latest drink to keep up with their fast-paced lifestyle.”
• Dollywood, based in Pigeon Forge, TN, is adding 10 new rides in 2005, adding ride capacity of 2000 visitors per hour.
• The Federal Trade Commission has charged the makers and agencies for CortiSlim and CortiStress with making false claims.
• Barnes & Noble will spin off the GameStop video game chain. And Diageo will sell off some of its stake in General Mills, which it acquired when the Mills bought Pillsbury.
• Birds Eye has changed its packaging to highlight the “fresh-picked” aspect of its vegetables. And it intends a “major public relations” campaign to get people to add vegetables to their diets.
• Despite still expecting a mid-single digit sales increase for the current quarter, La-Z-Boy is backing off previous profit projections. It’s blaming raw materials costs, especially on steel, and suggesting resistance to “pricing adjustments” at retail.

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