Where You Are: Home > News > '05 Advertiser Tidbits

Advertiser Tidbits for the week of 6/06/05

Automotive:

• A lot of GM and Ford’s problems in May came from the decline in sales of SUVs, a drop off that is described in a new J.D. Power & Associates study. That report, looking at April sales, found that traditional SUVs captured only 12.1% of the U.S. market of new vehicle sales, the lowest mark since March of 1996. Those SUVs sat on dealer lots for an average of 79 days before being sold in April, compared to the 48 days that car-based crossover vehicles were waiting to be purchased. May’s 8% drop off in overall vehicle sales came despite a 2.4% increase in the average incentive offered, compared to May 2004.
• With GM and Ford responding by hiking incentives, USA Today says the “incentive war could be back on.” Edmunds.com says the average incentive was $2,566, with Chrysler offering the most, $3,884. GM’s average was $3,729 and Ford’s $2,939. European makes offered an average $1,877; Japanese companies averaged $1,108 and Korean cars averaged $1,809.

Retailing:

• The International Council of Shopping Centers says that May retail sales rose 2.9%, a good result, it says, considering the cold weather in much of the country. Discount stores were up an average 2.7%, department stores gained 1.3%, while apparel stores rose just 0.1%. Furniture stores on average had a tough month, down 7.7%, year-to-year.
• Wal-Mart already is reporting its sales were up 2.5% for May, towards the low end of the 2-4% range it had forecast.
• Sears is rapidly moving Craftsman tools into Kmart locations, to have them available in time for Father’s Day.
• Best Buy stores in 12 markets are getting the store-within-a-store concepts Best Buy for Business, catering to small business customers and Magnolia Home Theater, targeting people wanting state of the art home theaters. Forty-five current locations in Baltimore, Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, San Francisco and Washington, DC. are set to open the new showrooms this Friday.
• Lowe’s told its stockholders it will continue to expand, adding stores in both big and small markets, but changing merchandise to meet the needs of each store’s customer base. It also hopes to differentiate by offering more exclusive products.
• In the first of the retail results, Kohl’s says that its comparable store sales in May were up just 0.2%, which was in line with the company’s expectations.
• Rex Stores has had several poor quarters, but after closing many units it was up 7% in remaining comp stores for its latest fiscal quarter. High-end TVs drove the increase, with appliances also up.

Drug Store & Supermarket Chains:

• CVS reported a 5.8% increase in comp store sales for May, led by a 7.9% jump in pharmacy sales. Long’s Drugs was also positive for the month, up 0.4%, though front end sales fell 1.2%.
• Walgreen was the first of the drug retailers to report May sales; total sales grew 13.5% with comps up 8.8%. Pharmacy sales were hot again, up 15.2% in total.
• Wild Oats Markets has opened a store-within-a-store boutique in a Stop & Shop in Massachusetts. It will test 3-5 such units before deciding if the effort should expand.
• Bankrupt Winn Dixie has asked for a four-month extension to put together a reorganization plan.
• After a slow start at its California properties, Cedar Fair says Y-T-D through May is now up 5% in total revenue. Average per capita spending once inside, and out-of-park revenues such as in its hotels, have driven the revival.

Fast Food & Restaurant Chains:

• The original founder of Chuck E. Cheese has a new idea and will open a test unit in Los Angeles this fall. It’s called uWink, and restaurant tables will have touch-screen gaming consoles that allow them to play games, surf the internet, or watch videos, as well as ordering food and drinks. If successful, it could roll out as early as next year. As well as starting Chuck E. Cheese, Nolan Bushnell was also the inventor of Pong, the first video game.
• Restaurant Business says industry consultant Technomic now calculates its category was up 5.4% in 2004, much better than expected. Traffic growth, new units, and menu price increases all worked together to bring up the numbers. And Technomic says this year should be even better, up more than 6%.
• Triarc, parent of Arby’s, is buying that chain’s biggest franchisee, RTM Restaurant Group, which operates 775 restaurants around the country. Arby’s and RTM will be consolidated as Arby’s Restaurant Group, headquartered in Atlanta. Restaurant Business says Arby’s may eventually be spun off of Triarc.
• Panera Bread, which had slowed down while the Atkins Diet was peaking, is roaring ahead now that the low-carb craze has slowed down. Total systems same-store sales were up 10.3% in its latest month, with franchisees outpacing company-owned stores.
• Even though Sizzler USA has been bought by an Australian concern, Nation’s Restaurant News says current Sizzler marketing will be “business as usual” as its launches a new campaign this week.
• Cracker Barrel’s comp restaurant sales were up 2.6%, mainly due to higher prices on the menu. Carl’s Jr.’s comps were up 1.5% in May, but Hardee’s was off 1% up against a tough comparison to last May’s 11.8% rise. Papa John’s same store sales rose 3.7% for the month.

Financial Services:

• Wells Fargo has unveiled lower online trading fees for its customers who keep minimal balances with its banking unit. The move is expected to spark a price war in the industry.
• Citicorp is buying the credit card operations of Federated Department Stores and its upcoming merger partner May Dept. Stores.

Telecommunications

• SBC Communications is going to offer high speed internet access for $14.95 per month, much lower than the price offered by cable companies. For instance, Time Warner charges $39.95 and Comcast, $42.95.
• Shareholders are expected to approve Sprint’s merger with Nextel next month, and regulatory approval to get the deal done during the third quarter is also seen on track.

Other Categories:

• Condoms are now ready for primetime, with NBC clearing a Trojan campaign for post-10PM, and the WB accepting the product for its 9-10PM shows. The client spent about $6.5 million last year, but is expected to increase the budget now that it’s cleared some of the nets.
• Coke’s rollout of the Rockstar energy drink is moving ahead in CCE markets, but prior distribution agreements in parts of the West and Northwest will stay in place.
• The Supreme Court has remanded two cases concerning industry check-offs back to lower courts for reconsideration after its ruling last week that compulsory contributions to the beef campaign were constitutional. The cases involved the pork industry’s “the other white meat” campaign and the dairy industry’s Got Milk? effort.

NOTE: Content copyright © 2005 by Cable Spots, the daily fax newsletter and used by the CAB with permission. Contact Cable Spots at 1-888-884-2630 or visit their web site to subscribe for daily business and industry news updates.

Top of Page