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Advertiser Tidbits for the week of 2/13/06

Automotive:

• Jeep could have a problem meeting its launch target for the new 2007 Wrangler–a supplier, Haden Prism, declared Chapter 7 bankruptcy and closed operations last Friday. It will take Jeep a couple of weeks to get a new supplier on line, according to The Car Connection.
• French carmaker Renault reports it has no plans to reenter the U.S. market until at least the end of 2009.

Retailing:

• The unseasonably warm weather (Weather Trends International said last month was the warmest January in 112 years) has hurt sales of items like shovels and snow blowers, but has been an unexpected benefit to some other retailers such as nurseries, who are seeing some business much earlier in the year than usual. Reuters reports some chains like Home Depot have changed displays, bringing out items like lawn tractors and some home improvement products like exterior paint, moving winter merchandise out of key locations. Some merchants are resisting, believing it will have to get cold eventually this winter.
• Wal-Mart already has almost 3,200 stores in the United States, but the company says there is room for about 1,500 new locations. Additionally, 1,800 of its existing Supercenters will be remodeled over the next 18 months. In January, the retail behemoth opened 69 Wal-Marts and Sam’s Clubs, a company record.
• The International Council of Shopping Centers reported that chain store sales rose 2% last week as shoppers stocked up on items for their Super Bowl parties. Sales were up 3.8% compared to the year before.
• JC Penney is about to launch one of the biggest advertising campaigns in its 103-year history. The media blitz starts 3/2 with the unveiling of the chain’s renovated New York City store. TV spots are unveiled at the Academy Awards on 3/5. The effort is designed to give stores a hipper, younger image.
• Lithia Motors saw a 1.8% rise in same-store revenues in 2005, but said those sales declined in the fourth quarter. The problem was with new car sales, which declined 2%; used car sales were up 8%, finance/insurance sales rose 4% and parts/service sales increased 9%. AutoNation did not even disclose its same store sales, but noted that it had suffered disruption from Hurricane Wilma, and that “the auto retail sales environment was challenging in the fourth quarter.”
• Haverty Furniture January same-store sales were essentially flat, down 0.1%.
• Talbots is buying the struggling J. Jill chain of women’s fashion stores.
• Hibbett Sporting Goods’ January same store sales were up 5%, while fourth quarter comps rose 2.5%.
• Boscov’s is buying 10 Federated locations, including two Kaufmann’s in the Pittsburgh area, three Macy’s in Maryland and five Strawbridges in and around Philadelphia.
• Tractor Supply saw its same store sales rise 10% in the fourth quarter, and its profit jump 40%. The company expects to open 78 to 80 new stores in 2006, and relocate another 19.
• Best Buy says it will open between 75 and 80 stores over the next year; same store sales were up in the “low double-digits” for January.
• Rumors are that Pier 1 may be a takeover target. The chain apparently believes it; it has taken measures to prevent a hostile bid.

Fast Food & Restaurant Chains:

• Comp sales were also strong, for the most part, in January at Yum! Brands. Taco Bell was up 11% and KFC, up 8%. But the overall results were dragged down by Pizza Hut’s 4% decline in comps. Bob Evans also had positive comps, +4%, with sibling chain Mimi’s up 2.2%.
• More results indicating a great time for the restaurant business: Brinker International said its comps were up 6.7% in January, led by a 7.2% increase at Chilli’s and an 8.2% rise at Maggiano’s. Macaroni Grill was up 4.6% and On the Border, up 5.7%.
• CKE Restaurants turned its fortunes around big time in the four-week period ending 1/30. Carl’s Jr. reported a 5.8% rise in same store sales and at Hardee’s the increase was 12.4%. The company attributed the results to “successful product introductions, our efforts to broaden our brands’ appeal and favorable weather in our markets.”
• Big Boy International has signed two new franchisees, BBB Restaurants, San Bernadino, and QSC Corp. of Northridge, who have agreed to open 56 new units over the next ten years in Southern California.
• Carl’s Jr. says that a lot of its recent success is due to the introduction of a number of new menu items. So, of course, it has more on the way, including a new flavor of cream shakes and malts featuring Oreo cookies.
• Arby’s is introducing Healthy Kid’s Meal Options, including a crustless Market Fresh Mini Sandwich. The chain also is offering a new line of interactive, educational Kids Meal toys and a Dream Big sweepstakes.
• McDonald’s reported a 9.7% jump in same store sales in the U.S. for January, helped by strong demand for breakfast, expanded hours, gift cards and mild weather.
• Starbucks, which has had success selling CDs at its many locations, will soon begin selling movies as well. It’s first foray into the movie business is Akeelah and the Bee, starring Angela Bassett, being released in April.

Drug Store & Supermarket Chains:

• Safeway has opened the prototype for a new supermarket format in Boulder, CO. The Lifestyle Store, meant to compete with the Whole Foods chain, which not coincidentally is headquartered in Boulder, has a strong emphasis on organic, natural and fresh foods. While the Colorado store is not likely to be rolled out nationally as is, the company is “looking at the many individual components that comprise that shopping experience to see what might make sense in other store locations around the country.”
• Tesco, one of the most successful supermarket chains in the U.K., is putting its foot into the retail waters in this country. Its first convenience store is set to open in 2007 on the West Coast; plans are to spend $435 million annually to establish a presence in the U.S.
• Ashville-based Ingles Markets seems to have the knack for competing in the supermarket business. It always beats the industry in same store sales and the latest quarter was no exception. The company said this week that successful holiday promotions in November and December helped it to a 9.8% same store sales increase in its first quarter, ending 12/24.
• Roundy’s Supermarkets, based in Milwaukee, could be up for sale in the next year. The CEO said yesterday that all options are on the table.
• Marsh Supermarkets is cutting back its headquarters staff and closing eight stores in Indiana by the end of the month. The company put itself up for sale in November, but apparently has received no acceptable offers.
• Wild Oats Markets reported a 13% rise in comp store sales for the first quarter ending 12/27. The company has recently signed leases for 10 new stores, including in new markets like Richmond, VA, Reno, NV, and Honolulu, HI.
• Publix Super Markets is opening medical clinics in its stores in Atlanta, Miami, Orlando and Tampa in the first quarter.
• Longs Drug Stores were up 2.2% in comp stores last month.

Telecommunications:

• AT&T is firing the latest salvo in the high-speed price wars, putting pressure on other DSL providers and on cable by bringing prices down to $12.99 monthly on a yearlong deal ordered over the web.

Other Categories:

• The Children’s Advertising Review Unit (CARU) of the Council of Better Business Bureau will hold a “complete review” of its children’s ad rules. Recommendations for changes are expected in 90 to 120 days. A former FTC official will oversee the review.
• The Wall Street Journal reports the nuclear-power industry is about to start an advertising campaign to improve its image and eventually get more nuclear power facilities approved. The Nuclear Energy Institute represents owners of 103 current nuclear power plants.
• At least two companies plan to introduce new ad campaigns during the Winter Olympics. Visa, which is jettisoning its “Everything You Want to Be” tagline, introduces its new one, “Life Takes Visa,” on NBC’s telecasts of the Games. And, in the first effort for Volkswagen from Crispin Porter, the automaker launches its new video-game-style mascot “Fast.”
• Both Pepsi and Coke posted decent quarters this week. Pepsi said its revenues were up 10% on a 7% increase in volume; strong results came from non-carbonated beverages, Frito-Lay and Quaker Foods. Coke’s North American revenues rose 8% on a 3% increase in volume. Non-carbonated beverage sales were the strongest, up 10% in the quarter. Profit fell 28%, however, because of increased marketing expenditures.
• Coca-Cola Enterprises reported a 2.5% rise in volume in the fourth quarter and a 4% rise in pricing; the company said it was “not satisfied” with the performance.
• Anheuser-Busch is introducing the first line extension to Michelob Ultra, Ultra Amber with a new deep amber color.
• Pepsi plans to launch a line of Ben & Jerry’s dairy milk shakes later this year.
• Some rare good news from the toy industry; Hasbro’s quarterly profit was up largely from Star Wars merchandise. But the games segment of its business remains weak.
• Ocean Spray is introducing its first diet drink, Diet Ocean Spray, in March.
• Royal Caribbean Cruise Lines has ordered the largest and most expensive cruise ship ever, tentatively called Genesis. The ship, accommodating 5,400 guests and costing $1 billion to build, is set for a Fall 2009 delivery.
• Pfizer is said to be contemplating the sale of its over-the-counter drug unit; that division includes Listerine, Visine and Lubriderm products.

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