Advertiser Tidbits for the week of 11/15/04

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Advertiser Tidbits for the week of 11/15/04

Automotive:

If the year ends the way it has gone so far, Ford will exit 2004 with an 18.4% share of the U.S. car market, its lowest since 1928. Bill Ford says he will regain share with the new product introductions coming in 2005, but observers say consumers should expect some great deals before the end of the year from both Ford and General Motors trying to recover some of the lost territory.
Subaru is calling its new crossover vehicle the B9X: Its set to debut at the Detroit Auto Show in January.
Toyota has sold over 79,000 Scions through October, and the only reason it won’t reach 100,000 is “we won’t have enough cars,” per a Toyota exec. Still, the brand is such a success, it’s raising the goal to 125,000 units next year, up from 100,000.
April 15, 2005 will be the date the new Lexus hybrid goes on sale. Toyota says it already has more than 9500 orders.
You have to give General Motors credit for creativity when it comes to incentives. The same company that introduced the overnight test drive has a new offer: Consumers who buy a car or truck this month at 0% can buy another one in the next ten years at the same rate.
Audi is expected to double the number of models it offers over the next five years, from the current 20 to about 40 by the end of the decade.
General Motors has enlisted CNBC talk show host Suze Orman as spokesperson for its latest incentive deal, in which current buyers can be assured of getting the same financing deal they get now on their next GM car.
In that tight race to be the number one auto brand name in U.S. sales, Ford widened its lead over Chevy to 23,083 at the end of October. But that’s a very small gap, and either or both may yet decide to put on an all-court press at year’s end to win the title.
According to just-auto.com, General Motors, Ford and Chrysler ended last month with the highest combined inventories for October in more than a decade, leading the site to predict a new round of incentives to clear dealership lots. GM, itself, had a 95-day supply of unsold vehicles at the end of the month, compared to the 61-day inventory at the end of September. And, says just-auto, GM’s share of the U.S. market fell to 25.4% in October, from 31.4% just the month before.

Retailing:

Outdoor chain Gander Mountain blamed warm weather for a 7.5% decline in same store sales for the third quarter. The company now expects comps for the year to be down about 0.7%, after an 11.5% rise last year.
Harris Teeter same store sales rose 3% in the fiscal year ending in October. Comps rose 4.9% in the last quarter. The company says the success of its private label brands contributed to its good results.
Lucy Activewear, with only 15 stores right now, intends to double its units and relaunch the ecommerce business that was its foundation.
It’s still early in the month, but Wal-Mart says it’s on track so far to deliver the 2-4% same-store sales increase it has forecast. Bedding, women’s clothing, and pet supplies are the hot sellers.
May Department Stores reported a 3.4% decline in same-store sales for the latest quarter, even excluding the 15 stores it has up for sale. On the positive side, it says the integration of the Marshall Field’s stores it bought is on schedule.
Menswear retailer JoS. A. Bank has launched a national branding campaign on TV and in magazines. About a month ago, the company, which operates 255 stores in 37 states, started selling its goods on home-shopping channel QVC, saying it was trying to reach a whole new demographic: women who buy clothes for men.
Kohl’s reported an 18.7% increase in net income for the most recent quarter. Comp sales increased just 1.2%, but the company is pleased with the response to the introduction of new clothing lines.
Spiegel has taken its Eddie Bauer chain off the market after receiving no acceptable bids since it was put up for auction in April.
The Jones Apparel Group is buying Barney’s, which currently operates in 21 locations and is looking for markets in which to expand.
Blockbuster has made an offer to buy out competitor Hollywood Entertainment.
Tweeter Home Entertainment Group is moving to change the name of all its stores to its own name. That means that banners like Sound Advice, HiFi Buys, Hillcrest High Fidelity and Showcase Home Entertainment are disappearing over the next 18 months. A new ad campaign, with the tagline “We Can Untangle Your Mind,” will focus on the chain’s new philosophy of offering advice and products on electronic “solutions.” The emphasis is on expertise and service. Tweeter is cutting back its print advertising and spending half of its 2005 marketing budget on TV and radio. Campaigns are being created by Boston-based PARTNERS+simons.
Pep Boys had had a tough time a few years ago, but seems to have turned thing around nicely, with a 4.1% comp store increase in the latest quarter. Comp merchandise sales were up 5.1%, but service revenue was flat.
Vornado Realty, a real estate investment trust (REIT) based in New York, has purchased a 4.3% stake in Sears. That doesn’t sound very momentous, but the International Council of Shopping Centers says the REIT may want to force Sears to sell off some of its mall-based stores in order to “unlock” the value of the real estate below, i.e. put the property to more productive use.

Drug Store & Supermarket Chains:

CVS same-store sales were up 5.4% for October. The company’s overall sales were up 30.3%, but that includes the recently-acquired Eckerd units. Year-to-date same-stores are now up 5.8%.
7-Eleven same-store sales for last month, excluding gas, were up 3.8%. Gas sales, of course, were enormous, up 37.8%.
Food Lion is acquiring 10 Winn-Dixie supermarkets in North Carolina and Virginia.
Food Lion will begin a relaunch of its third market, Greensboro, NC, over the next several weeks. Raleigh and Charlotte relaunches have both been successful, says the company. Execs note that “In the future, we expect to see a ramping up of the speed in which we do these market relaunches.” Food Lion also announced that 12 more of its namesake stores in southern Georgia and northern Florida will switch to the Harvey’s banner next year.

Fast Food & Restaurant Chains:

McDonald’s continues its torrid same store sales pace. It was up 7.5% in October, on top of last year’s 15.1% increase. The credit, says the company, goes to “our intense focus on operational excellence and leadership marketing.”
Captain D’s opened 19 units in fiscal year 2004 and has agreements for another 36. It is specifically looking for partners in new markets including Detroit, Cleveland, Pittsburgh, Chicago and Buffalo.
Restauranteur Cosi reported same store sales rose 6.9% in the third quarter, but still the company’s loss widened to $4 million because of costs associated with store closings and other one time charges. Bob Evans did not do as well. Comps there were down 3.5% for the quarter. CKE announced its October same store sales were up 5.6% at Carl’s Jr. and up 3.5% at Hardee’s.
Panera Bread’s same store sales were up 5.1% in October.

Telecommunications:

As the telecom business works its way out of recession; Nortel is breaking its first TV campaign in over three years. The Richards Group is the agency.
Elton John will be the star of XM Satellite Radio’s new campaign that breaks next month. Sir Elton will also star in some exclusive specials that will only appear on XM.

Financial Services:

H&R Block is not buying its usual spots in the Super Bowl this year, saying the date (2/6; it was 2/1 last year) was just a little late in reaching “the right person at the right time.”

Other Categories:

Beverage Digest says Pepsi next year will launch Flavor Splash from Aquafina, fruit flavored still water products. A sparkling version of Aquafina is also coming, as is Gatorade Endurance, for “high-intensity” occasions. The Atlanta Journal Constitution points out that Coke’s sales volume fell 5% for the first nine months of this year, bringing its share of the market down by 0.9 points. That means that Pepsi is only 1 share point behind. According to the paper, Coke’s volume declines are the result of price increases. Its prices are up 5.8% this year, the highest in the industry.
Cadbury’s Nantucket Nectars is getting a relaunch next year as an organic juice drink line.
How big is the DVD business becoming? Shrek 2 went on sale last week, and sold over 12 million units, worth $185 million in retail, in just its first three days on the market.
Bumble Bee will introduce a new ready-to-eat tuna steak dinner, to be heated in a microwave.
Sara Lee has launched a new line of fortified wholegrain breads, under the Earth Grains Extra Fiber brand.
Independence Air parent Flyi, Inc, the former Atlantic Coast Airlines, says it is close to a Chapter 11 bankruptcy if it cannot renegotiate some airplane leases.
NASCAR will end its self-imposed ban on hard-liquor advertising, and will allow marketers to have logos on sponsored cars starting next year.
Cedar Fair will build a multi-million dollar water park at its Geauga Lake facility located near Cleveland. Wildwater Kingdom will be one of the largest water parks in the country, and its first phase will be open next season.

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