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Advertiser Tidbits for the week of 1/17/05

Automotive:

• The Wall Street Journal says that DaimlerChrysler’s Smart car may never be introduced in this country. The two-seat model, ForTwo would have to be completely redesigned in order to satisfy U.S. environmental standards, and the car, which appears to be very popular in Europe, is still not making any money for the company. Daimler is still saying the brand will be launched here in 2006, but also noted that such plans are subject to change.
• A few tidbits from the Detroit Auto Show: Although we’ve reported Chrysler will abandon the coupe (2-door) market, General Motors says “coupes are here to stay” and it will still make them. Volvo will introduce a new smaller model, the C30, late next year. Honda has raised its expectations for ‘05 and now projects a 7.6% increase to 1.5 million units.
• Chrysler racked up record Certified Used Vehicle sales for 2004, up 23%, and capped off with a 69% year-over-year increase in December. But that news apparently was not enough to put Chrysler chief Dieter Zetsche in a good mood as he spoke to auto analysts this week. He wants to raise the carmaker’s share of the U.S. market from last year’s 12.8% to 14% this year, a goal he calls “achievable.” To do that, he says, “We need a distribution system that is world-class, and we do not have that now.” Specifically, he wants to decrease the number of dealers, up the number of cars sold per dealer, upgrade stores and put all of the company’s nameplates, Chrysler, Dodge and Jeep under the same roof.
• Toyota has announced it is pulling the Echo from its vehicle lineup in ‘06. It is slated to be replaced by two European-style small cars.

Retailing:

• Men’s Wearhouse will build a chain of stand-alone dry-cleaning stores, an offshoot of an activity it’s gotten into via its tuxedo-rental business.
• Ultimate Electronics has filed for Chapter 11 bankruptcy protection, saying current stores will remain open for business as usual.
• Apple is introducing a new Mini Mac, CPU without a keyboard, priced under $500 and a new iPod starting at $99.
• Jennifer Convertibles comp store revenue was down 7.5% in its latest fiscal quarter. Jennifer opened one new store in the quarter, but closed four.
• Pier 1 CFO Gary Turner told analysts this week that the main cause of the chain’s 8.8% drop in December same store sales was the decision to replace TV with magazine inserts. “We feel the impact from the inserts lasted a maximum of four or five days,” he says. “We’re wondering just how many people saw them.”
• Home Depot’s CEO says ‘05 will be “a good year, not a great year.” It’s expecting to open 146 new stores this year, plus get a 4-7% same-store sales gain from those that are currently operating.
• Although there still could be a hostile takeover bid coming from Blockbuster, Hollywood Entertainment has agreed to sell to a smaller rival, Movie Gallery. The two combined would still be smaller than Blockbuster is now.
• Eddie Bauer Inc. is closing 23 of its under-performing locations.
• CIBA Vision has bought a spot in the Super Bowl, and says it wants to reach women with that effort, to highlight its new 02optix contact lens. Assuming it paid the average $2.4 million, the spot will be about 7% of CIBA’s annual budget.

Drug Store & Supermarket Chains:

• CVS same store sales were up 4.5% in December; merchandise sales rose only 0.8%.
• Albertson’s has already converted some of its locations in Texas and Louisiana to its limited-assortment Super Saver brand, and now it will spread the idea out to 11 units in Florida. The company says it’s looking for more appropriate locations where, based on “our own demographic profile, we think the stores would work the best.”
• Delhaize reported same store sales in the U.S. were up 1.5% in 2004. The company is converting 12 more Food Lions to Harveys this year.
• 7-Eleven same-store merchandise sales were up 5.6% in December.

Fast Food & Restaurant Chains:

• USA Today says McDonald’s is eyeing the coffee business for its latest breakthrough-it will start testing higher-priced “premium” coffee, and should roll out the product to all regions either late this year or sometime next year.
• Also in the restaurant business, Frisch’s reported a 3.2% same-store increase in its Big Boy units, but a 5.9% decline at its Golden Corral locations. Smith & Wollensky continues in good shape. Its monthly comp sales were up 21.1%, but the fiscal month included an extra week. Excluding that week, they were still up 5.0%.
• Bob Evans continued its trend of poor same-store sales, down 4.9% in December. But IHOP was up 4.3% in same-stores last quarter, and California Pizza Kitchen, which has been doing exceptionally well lately, continued that trend with a 7.7% gain.
• Sunrise Advertising, Cincinnati, handles Orlando-based Tex-Mex chain Tijuana Flats is expanding beyond Florida, building franchised locations in Kentucky, Georgia, Indiana, Alabama and Tennessee.
• Buffalo Wild Wings’ December same store sales rose 7% at company-owned locations and up 3% at franchised units. Applebee’s comps were up 1.3% last month and IHOP recorded a 4.3% jump for the third quarter.

Financial Services:

• Regions Bank, which took over Union Planters Bank last year, has started a name change campaign in some Florida markets and will roll it out to some Midwest markets later this month and some other Southern markets in the second quarter. Luckie & Co., Birmingham, handles.
• General Motors is warning investors its profits will fall this year. Health-care costs are a major expense at the corporate level, but lower earnings from the GMAC finance arm (which includes heavily-advertised Ditech.com) will result from rising interest rates.
• Wayne Brady stars in a number of spots for Fifth Third Bancorp breaking next week.

Telecommunications:

• Alltel made it official, announcing it would buy Western Wireless, which owns the Cellular One brand. The deal will make Alltel the fifth-largest wireless operator in a consolidating business.

Other Categories:

• Advertising Age says Kraft will “heavily support” the launch of a line of 26 convenience foods based on the South Beach Diet.
• Coke is expected to launch a lime-flavored brand extension as early as next month. And Beverage Digest says Coke has trademarked the name Vault for a product to compete with Mt. Dew that should go into test in some markets later this year.
• Right after Anheuser-Busch announced negative numbers for the fourth quarter, Coors said its business was good, with sales volume to wholesalers up 4.2%. Wholesaler sales to retailers were up a smaller 0.8%, but the company says that’s because distributors built up their inventory to reach about the same level as at the end of ‘03. In a related note, The Wall Street Journal says there are “renewed doubts” about the Coors/Molson merger actually taking place, with shareholder opposition growing.
• Pfizer is pulling its ads for Listerine because of what a judge calls “misleading claims” about its ability to fight plaque and gingivitus.
• For the first time ever, Disneyland is allowing its one-day admission tickets to be sold off-site. Vons and Pavilions in Southern California just began offering the tickets and Vons in Fresno and Las Vegas will have them available soon.
• Kraft will phase out its snack food advertising targeted to kids under 12. It expects to spend all the allocated budgets, however, redeployed towards older demos.
• The Atlanta Journal-Constitution says Coke has been “tinkering with” a coffee-flavored cola, and might use the brand name of Blak if its decides to market the drink. Pepsi tried one in 1996 that failed.
• 24 Hour Fitness health clubs signed Lance Armstrong to be its spokesman, and will utilize his name as part of the title at some of its locations.
• SABMiller, the South African company that purchased Miller Brewing, says it may make a bid for Molson if that brewer’s merger with Coors does not happen, a distinct possibility considering the problems that have arisen in getting the deal past both boards of directors.
• U.S. Airways has gotten financial commitments that will keep it in the air until at least June when it hopes to emerge from bankruptcy.
• Kellogg will not follow Kraft’s lead in cutting back kids’ advertising. It says it advertises to kids “in a responsible manner” with accurate portrayal of products in age-appropriate language.
• Southwest Airlines is starting a code-share arrangement with ATA that will allow it to send it passengers from Chicago to several new airports, including ones in New York, Boston, and Washington.
• American Pride Seafoods has made a licensing deal with Disney and will introduce a line of frozen seafood featuring characters like Mickey Mouse, The LIttle Mermaid, and Peter Pan.
• Pepsi is starting a new promotion to push its Smart Spot products, those that meet more stringent nutritional criteria than the company’s other products. Meredith Viera of The View is the leading talent in the effort.
• Coors has increased its offer for Molson, trying to win over some shareholders who have been campaigning against the proposed deal.

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