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Advertiser Tidbits for the week of 11/22/04

Automotive:

• General Motors is claiming that its increased inventories are just a “seasonal swing” and not a major concern. The carmaker now has 824,000 light trucks on lots, up 7.9% from 10/1, and 391,400 cars, up 7.2%. On the other hand, CarMax is finding the used car business better than it had anticipated. The company has raised its expectation of comp sales from the previous -8% to -2% to an increase of 2% to 3%. Some of the sales are attributed to recovery from those lost during the severe weather of August and early September in Florida and the Southeast.
• Automotive News reports the Big 3 carmakers are offering extra incentives, between $500 and $1500, to buyers who finance through their “captive” finance companies such as GMAC. Captives have lost share to banks and credit unions as some buyers are choosing cash-back incentives over low-interest financing with the captives. Bonuses vary by region and model.
• Isuzu has been looking for a cash infusion and Mitsubishi Corp. (an investor in Mitsubishi Motors, but not the same company), is buying stock that could eventually make it Isuzu’s largest shareholder. Isuzu has also asked General Motors, its current largest shareholder, for more help.
• Chrysler is considering putting Jeep back into the pickup business, with a new model called the Gladiator, which would be the first pickup for Jeep since the 1992 Comanche. One Chrysler exec said, “We haven’t done enough with Jeep. We are going to do an awful lot with Jeep in a very short time.”
• In the past, BMW has stayed away from end-of-the-year sales pushes, but Adweek reports the company is trying such a tactic this year. It’s not been a great year for BMW; sales have been down about 5% Y-T-D.

Retailing:

• Dillard’s, one of the least TV-friendly of the department store chains, continues to have tough times. Comp store sales in its just-completed quarter were down 4%.
• J. C. Penney’s holiday buy uses 15” spots to pitch its gift cards, but more-traditional 30” commercials for more general ads about its merchandise.
• Despite the statement from the parties that the Sears and Kmart names will both continue, many are saying that Kmart is likely to eventually disappear from the retail landscape. There are economies of marketing and advertising to be gained from one nameplate, and the Kmart brand is already weak. Sears is not much better, but recent results indicate that its sponsorship of Extreme Makeover: Home Edition is paying off. The Detroit News, Kmart’s home town newspaper, says the plan is to convert hundreds of Kmarts to Sears right away. Also, exclusive brands like Martha Stewart and Land’s End are likely to soon show up in both chains.
• Sears, which had positive comp sales in October after several months in the red, is giving its new ad deal with Ty Pennington some of the credit for the turnaround. Pennington started appearing in Sears’ ads in September, and the company has done a placement deal in Extreme Makeover: Home Edition.
• There’s been some thought the summer’s gas price increases hurt discount retailers more than upscale chains--here’s some evidence that bears that out. Nordstrom reported an 8.1% same-store increase for its latest quarter, but Big Lots’ comps were down 1.4%.
• Lowe’s reported a 5.2% comp store sales increase for the third quarter, which pulls it down a little bit to +6.6% for the first nine months. During the quarter, it opened 35 news stores, and expects to finish the year with 140 new locations.
• Regis Corp., consolidator of hair-salon chains, is buying out the Hair Club for Men and Women.
• 84 Lumber had record sales in the third quarter. It plans to open 50 new stores over the next few years, and despite its focus on professional home contractors instead of consumers, it is sponsoring the PGA Tour and underwriting a golf tournament and various pro golfers.
• Dick’s Sporting Goods had a 1.5% same-store sales increase in its latest quarter, but a total sales increase of 60% due to the acquisition of Galyan’s. So far, 16 former Galyan’s have been re-named as Dick’s, allowing the company “to begin leveraging advertising in overlap markets.”
• Wickes Furniture is revving up expansion plans in existing markets like Chicago, Southern California, Minneapolis and Portland, OR. But the two remaining locations in Pittsburgh are scheduled to close before the end of the year.
• Breaking with tradition, Wal-Mart will not release specific “Black Friday” sales results this year.

Drug Store & Supermarket Chains:

• Supermarket News reports the first food/general merchandise superstore under the Kroger Marketplace name has now opened in Columbus, with more to come next year. To better compete with Wal-Mart and Target, Kroger is bringing east a concept it’s been using under the Fry’s Marketplace and Smith’s Marketplace names out West.

Fast Food & Restaurant Chains:

• Wendy’s is trying to makeover its Baja Fresh chain, which got into trouble almost from the moment it was purchased by the larger chain. A new interior design, which features warmer colors, and a updated menu are part of the changes.
• Subway will take its toasted sandwich offering nationwide by the end of the year.
• Jack in the Box had a good quarter and notes it is the first major quick-serve chain to offer reloadable gift cards at virtually all its locations. Same-store sales were up 4.1%, and the company credits new products for much of the increases.
• Montana Mills Bread Co., a Panera competitor now owned by Krispy Kreme, is being sold to an actual Montana company, Great Harvest Bread Co.
• Boulder-based Noodles & Co. has signed franchise agreements for 14 new locations in Wisconsin, Iowa and Illinois.
• Wendy’s next campaign will once again feature founder Dave Thomas. His philosophies of “Just be nice,” and “Don’t cut corners,” will be highlighted.
• Schlotzsky’s, in Chapter 11 since August, has announced that it will sell virtually all of its assets in an auction.

Other Categories:

• Wrigley will buy the Life Savers and Altoids brands from Kraft for about $1.5 billion, beating out several other potential buyers including Hershey, Mars, Nestle, and Cadbury Schweppes. The Wall Street Journal says the fact Kraft would sell two such healthy brands shows how important mega-chains like Wal-Mart and Kroger have become--Kraft feels it needs to concentrate on segments where it is dominant, which it is not in candy.
• The FDA has ordered Pfizer to pull its ad campaign that indicated that Viagra could restore a man’s sex life to what it was when he was young. The ads also did not disclose any side effects for the medication.
• The National Auctioneers Association says its members are doing very well this year, with gross revenue up 13.5% over the first three quarters of last year. You can find NAA members in your market by going to www.auctioneers.org, and doing a search by city name or zip code.
• There’s been a belief that low-carb diets are starting to lose their popularity, but the company that markets the Atkins Diet says the dropoff has been seasonal, and expects it to pick up again after the holidays. In a related note, former CNN health reporter Kit Carney is now spokesperson for NutriSys-tem, and will star in an infomercial for them.
• Pepsi and AMF Bowling Worldwide have signed an agreement making Pepsi the bowling centers’ official beverage supplier. Very often such agreements include marketing/advertising support.
• Add Continental to the list of airlines trying to get some relief from employees. The company said it will lose “hundreds of millions of dollars” and needs to “adjust its costs.”
• The Franco-American brand name, in existence since 1887, will be retired by owner Campbell’s, and SpaghettiOs and the other variations will become Campbell’s-branded products.
• Harrah’s acquired the Horseshoe brand earlier this year when it bought three casinos, and it will now re-brand (plus expand) its casino in Council Bluffs, Iowa, as a Horseshoe property.

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