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Advertiser Tidbits for the week of 3/21/05

Automotive:

• Automotive News reports Honda is off to a good start with its Ridgeline pickup, and some dealers already have a waiting list. Honda launched the car with a teaser spot in the Super Bowl, and put it on sale at the end of February. Its goal is 50,000 units this year.
• Honda, looking at declines for its Accord and Civic models has declined to offer customer incentives as yet, but is providing up to $600 per car in dealer rewards for sales of those cars.
• AutoExec says, that despite auto dealers’ certified used car sales going up 7% last year, total used sales by new car dealers were actually down 1.3%. It’s felt new car incentives caused many customers to switch to new vehicles.
• While Ford may be having troubles overall, its Mustang is going great guns. The automaker is boosting production on the popular model. The company reiterated its already-lowered guidance for the first quarter, predicting a profit for the period.
• Toyota has signed a large sponsorship deal with the National Basketball Association that will see the automaker have a presence in programming on NBA-TV and on NBA-themed programming on ABC, TNT and ESPN starting next season.
• Continuing a trend we have been reporting on, full-sized SUVs lost 1.2 share points in the U.S. auto market over the last two months, according to Edmunds.com. And gas prices also appear to have finally affected the large pick-up models as well. Those vehicles lost 2 share points of the market over the same period.

Retailing:

• Wal-Mart says its March same store sales are looking as good if not better than its February mark of +4.1%.
• After Wal-Mart said on Monday that March was looking good so far, Target reiterated its own optimism, saying its 6-8% same-store projection was in line. Analysts think the early Easter will make March a strong retail month.
• Kmart, which measures success a little differently than other retailers, says it’s pleased with the 4.5% decline in same store sales during the fourth quarter, because that’s much better than last year’s 12.8% decline. In fact, the company’s net income increased to $309 million from 2004’s $270 million.
• Women’s Wear Daily reports that Sears is shopping around the Land’s End division that it bought just three years ago. And the price is now $1.2 billion, down from the $1.9 billion that Sears paid.
• Sam’s Club and GE Consumer Finance are launching a new credit card that gives Sam’s Club members cash back on purchases.
• After a number of years of disappointing sales, Pier 1 has decided to turn away from celebrities in its ads in favor of more focus on its products. Stores are also being revamped, becoming more organized and less cluttered, and adding more upscale merchandise. A new campaign, featuring the tagline "Life More Interesting" just began.
• Ross Stores was disappointed in its fourth quarter because of "in-store merchandise imbalances," that resulted in flat same store sales. But the company’s new chain dd DISCOUNTS is meeting with favorable customer response. The first of ten current stores with the new format were opened in the quarter in California, and the company expects to eventually have as many as 500 locations.
• A consortium of Bain Capital, Kohlberg Kravis Roberts, and Vornado will team up to buy the entire Toys R Us portfolio of businesses, not just the toy chain which was on the block. Business Week is suggesting that the investors who purchased the Toys ‘R’ Us chain may be more interested in the real estate below the stores than the stores themselves. Which means that a round of closings is likely.
• With the luxury retail market continuing to be hot, Nieman Marcus put itself up for sale.
• Radio Shack plans to close up to 50 company-owned stores this year, but will add as many as 150 kiosks, especially at its current Sam’s Club and Sprint locations.
• S&K Famous Brands same store sales were up 4.5% in 2004.
• Stein Mart completed its fiscal year with a 9.1% comp store sales increase. Expansion plans are modest this year, just a net addition of six new units to add to the current 261.
• Duckwall-ALCO is closing 12 under-performing Duckwalls and 8 ALCOs in the next three months.
• With the mergers of department store chains, Simon Property Group, owner and operator of numerous shopping malls, is preparing for possible anchor vacancies. The company is thinking about a mixed use, perhaps building high-rise residential towers where the anchor stores are right now. Another possibility - self storage facilities. Simon is also looking to sell the rights to build office space, and other developments on top of current malls.

Drug Store & Supermarket Chains:

• Kroger says it will use its financial strength to fight back against supercenters, and is now segmenting customers bases to target and connect with the best customers. The company, which is number one or number two in 40 of the 52 major markets in which it operates, introduced 765 different private label items last year. Its CFO said, “We have over 13 years of experience competing with Wal-Mart supercenters, so we have a pretty good game plan in place.”
• Berkeley, CA-based Grocery Outlet, the "extreme value" supermarket chain, is expanding, building six new stores in Oregon, Idaho, Nevada and Washington state.

Fast Food & Restaurant Chains:

• Hardee’s has moved from turnaround mode to “turned around,” says the chain’s chief, Andrew Puzder. As such, it is expected to begin to expand in the next three to five years, by that time adding about 50 locations a year, according to the St. Louis Post-Dispatch.
• In Blimpie’s version of a healthy meal, veggie burger Gardenburger is being added to the menu of over 1,600 of the chain’s restaurants.
• Hardee’s, home of the Thickburger, is diversifying that product, now offering a Frisco Thickburger, along the lines of the previously discontinued Frisco Burger.
• Casper, WY-based Taco John’s, with 400 locations, is switching its beverage business to Pepsi from Coke.
• Checkers Drive-In Restaurants had a very healthy fourth quarter with company-owned same store sales up 12.3% and franchised locations recording an 8.3% jump. The CEO attributes the success to “a keen understanding of our customer base.”

Financial Services:

• Charles Schwab is suing TD Waterhouse over its current commercials, which Schwab says inaccurately charge it’s a high-priced firm with bad service.
• Also debuting a new campaign in the NCAA is Hartford Financial Services, which is bringing back its stag icon, though this time in computer generated form.

Telecommunications:

• Qwest is raising its bid again in the battle with Verizon to buy MCI.

Other Categories:

• PepsiCo has announced it intends to treat Diet Pepsi as its flagship brand from now on, relegating regular Pepsi to a secondary role. It’s a surprising move, but not unsupported, considering the rise in diet beverage volume and decline in non-diet drinks. The shift in focus will mean a doubling of the marketing budget for Diet Pepsi, and a slight decline in the Pepsi budget. According to The Wall Street Journal, the target customer for Diet Pepsi will be broadened to include everyone, including teenagers and Baby Boomers, while Pepsi will not be marketed to soda drinkers younger than 25, Latinos, African-Americans and sports fans.
• In other soft drink news, PepsiCo intends to reintroduce Pepsi One without television support; it will be relying on promotional events, online films, posters and even trading cards, says the NY Times. Speaking of Coke, it has applied for a trademark on the name Coca-Cola Zero, indicating it intends to expand its own line of diet drinks.
• And 7Up says that, unlike the last 15 years, its volume sales this year will not decline.
• Cedar Fair announced year-end results for its amusement parks. Same park revenues were up 2%, as a 3% increase in in-park spending and a 4% increase in out-of-park (hotel) revenues made up for a 3% decrease in attendance. If the weather holds up this year, the company is expecting 6-8% revenue growth.
• JetBlue Airways has passed Southwest Airlines in the latest J.D. Power & Associates 2005 Airline Satisfaction Index Study. Delta, Alaska, AirTran and Continental also ranked above the industry average. Northwest customers were least satisfied, followed by America West, United, US Airways and American.
• Athletic shoe maker New Balance is upping its ad spending, embarking on its biggest ever campaign, worth about $20 million. TV ads premiered in college basketball last weekend.
• AstraZeneca is the latest D-T-C advertiser to run afoul of the government, as the FDA ordered it to pull its commercials for “misleading claims” that Crestor is “clearly the best.”
• Kemps Ice Cream and Pillsbury have signed a licensing deal to introduce a premium line of Pillsbury-branded ice cream. The famous Doughboy will be used in the advertising.

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