Financial turbulence boosts private label in soft drink sector
(AFN) The global economic downturn has presented the perfect conditions for private label products to flourish, according to a new report from beverage research agency Canadean. (Click HERE for full story.)

Fry's, Safeway gird for strike
(Arizona Daily Star) Two of Arizona's largest grocery chains have taken steps to hire temporary workers as a strike deadline looms with the union that represents many of their hourly employees. (Click HERE for full story.)

The accidental hero
(Submitted by Stephen Ceranowicz,  Director of Business Development, SUPERVALU, Eden Prairie, MN)
(Yahoo! Finance) Stuart Frankel isn't what you'd call a power player in the world of franchising. Five years ago he owned two small Subway sandwich shops at either end of Miami's Jackson Memorial Hospital. (Click HERE for full story.)

In Japan, even the barcodes are well designed
(Fast Company) Barcodes grace almost every product for sale. Given how much package real estate they command, why shouldn't they look cool? (Click HERE for full story.)

The sad illusion of happy customers
(The Los Angeles Times) Customer satisfaction has become such a scarce commodity in the business world, it's now a selling point at a time when companies are increasingly desperate for shoppers' dollars. (Click HERE for full story.)

Guru for Sears, Kmart offers West Coast perspective
(Chicago Tribune) John Goodman, the new executive in charge of Sears and Kmart's apparel and home goods divisions, has held just about every job in the industry, from buyer at Bloomingdale's to launcher of Banana Republic, Gap and Old Navy outlet stores. (Click HERE for full story.)

Grocers irked to find out soy milk nonorganic
(Submitted by Nicole Stefanov, Senior Business Manager, Safeway, Pleasanton, CA)
(Star-Telegram) Organic-food shoppers are making a rude discovery at their grocers’ refrigerated display case. (Click HERE for full story.)

Supermarkets wage price war with toy soldiers and Christmas pudding
(The Times) Families are about to reap the benefits of a supermarket price war in time for Christmas. (Click HERE for full story.)

US retailers set to post first quarterly gains in two years
(The Wall Street Journal) U.S. retailers, led by sector giant Wal-Mart Stores Inc. (WMT), are expected to post their first increase in quarterly profits in over two years, thanks to easier comparisons, steps to control inventories and improved consumer spending.

The improved bottom-line results, after two months of sales increases, would stand in stark contrast to recent quarters, when profits, which are heavily dependent on consumer spending habits, were battered by the global recession. A profit increase will also set retailers apart from most other sectors of the Standard & Poor's 500, which reported profit declines for the three-month period.

Overall, 122 retailers are expected to post an average 2.1% increase in their third-quarter results, the first gain since the first quarter of 2007, according to research firm Retail Metrics. Excluding Wal-Mart, profit likely climbed only 0.6%, Retail Metrics data showed.

As the U.S. unemployment rate climbed to 10.2% and consumer confidence declined over the last two years, discounters led by Wal-Mart cut prices to attract new and higher-income shoppers seeking bargains, analysts said. Analysts on average expect Wal-Mart's third-quarter sales may have risen to $99.88 billion from $98 billion, according to Thomson Reuters.

Wal-Mart, which kicks off major retailer results with its report on Thursday, is expected to report that its profit rose to 81 cents a share from 80 cents a share a year earlier, according to Thomson Reuters. The company has forecast profit of 78 cents to 82 cents a share.

With the holiday season drawing near, Wal-Mart has fought price wars on items including books, DVDs, electronics and toys against competition from Target Corp. (TGT), Amazon.com Inc. (AMZN), Best Buy Co. (BBY) and closely held Toys "R" Us Inc. The Bentonville, Ark.-based retailer has also said it plans to roll out weekly promotions to keep pressure on rivals.

Remaining Aggressive On Price 

 "We expect Wal-Mart to remain aggressive on price throughout the holiday season, particularly in key holiday items" such as toys and electronics, said Robert Drbul, a Barclays Capital analyst. "We believe that Wal-Mart is well positioned to continue to take advantage of the challenging macroeconomic environment as well as maintain gains during an economic recovery."

Still, while it's expected to continue to gain share, analysts said Wal-Mart's results, especially in the United States, will likely reflect some headwinds. Barclays Capital's Drbul estimated the retailer's third-quarter same-store sales in the Unites States to be at the low end of its forecast range of flat to up 2% because of the impact of food deflation.

J.P. Morgan's Charles Grom's sales forecast for the company's U.S. namesake chain was even more pessimistic: he estimated a 1% decline. As signs of an economic recovery make consumers more comfortable about spending, Wal-Mart also may be in for a tougher fight to sustain its lead, analysts said. As an example, retailers' fourth-quarter profits, against even easier comparisons from a year earlier, are expected to surge 26%. But excluding Wal-Mart, earnings will likely jump 37% instead as Wal-Mart's gain trails that of the broader markets, Retail Metrics data showed.

Wal-Mart's rival Target also has stepped up efforts to change perceptions that its goods are much pricier than Wal-Mart's, analysts said. Target, which reports next week, also has increased its fresh food offerings to lure more consumers seeking staples.

The same-store sales gap between Wal-Mart and Target should be at its narrowest since early 2008 as Target improves its results, Sanford C. Bernstein & Co. analyst Colin McGranahan said in a report.

"We continue to prefer Target as the more leveraged play on a discretionary recovery," McGranahan said.

Wal-Mart shares have declined about 7% this year, compared with the 44% increase of the S&P Retail Index and 45% gain at Target. Retailers of apparel and other discretionary merchandise such as Nordstrom Inc. (JWN), which posted a surprise gain in its October sales last week, have more than doubled during the same time. Wal-Mart has stopped reporting its monthly sales.

Thinking Urban Markets

To keep the new customers it has attracted, Wal-Mart is accelerating remodeling of its stores to make it easier for consumers to shop. It has made a push on social networking sites and is working with Internet portals such as Yahoo and Google to make sure its products come up near appropriate content search. Wal-Mart has also advertised during NFL and World Series games to broaden its reach. Chief Executive Mike Duke is studying expanding in metropolitan markets, where Wal-Mart has fewer stores.

The company also plans to buy more products directly from manufacturers and make its supply chain more efficient to generate savings that it could use to cut prices further. Gross margin is expected to be flat at 24.1% as Wal-Mart controls inventory better to offset an "aggressive price-leadership strategy," Barclays' Drbul said.

The company also will remodel its Sam's Club wholesale club chain and is allocating more space to faster-growing and more profitable categories such as fresh foods. Outside of the U.S., Wal-Mart, like Costco Wholesale Corp. (COST) and others with overseas operations, is likely going to benefit as the U.S. dollar declines against other foreign currencies, boosting translated international results, analysts said.

Kroger to open new Marketplace stores in Fort Worth, Frisco

(Dallas Morning News) A Kroger store combining groceries and general merchandise is nearing completion in Frisco and the chain is turning its attention next to Tarrant County's Alliance Town Center. (Click HERE for full story.)

Longs buys 2 old Star Markets
(Pacific Business News) CVS, the Mainland company that owns the 45 Longs Drug Stores in Hawaii, has acquired two former Star Market stores on Oahu and will convert them to Longs. (Click HERE for full story.)

Black Friday: Walmart to open 24 hours on Thanksgiving to prepare for crowds
(The Baltimore Sun) What are your plans after eating that big meal on Thanksgiving Day? (Click HERE for full story.)

J.C. Penney testing Sephora kiosks
(McClatchy-Tribune News Service/TradingMarkets.com) J.C. Penney is testing Sephora kiosks in 20 smaller markets. (Click HERE for full story.)

Women clicking to earn virtual dollars
(Brandweek) Women are jumping at the chance to earn online points and virtual dollars, according to a new report from online marketing firm Q Interactive. (Click HERE for full story.)

PayPal grabs higher share at online retail sites: comScore
(MediaPost News) Heading into another cutthroat holiday shopping season, etailers need all the help they can get. (Click HERE for full story.)

The great outdoors
(OMMA) Consumers are spending more on outdoor living items, giving a much-needed boost to category retailers and marketers this year, according to Research and Markets' "Outdoor Living Trend Report 2009," released Sept. 1. (Click HERE for full story.)

Catering to the recession mentality
(The Wall Street Journal) The recession may be over but companies that cater to consumers believe people are digging in for a long, frugal winter.

That’s why Clorox Co. is keeping the price steady on a new improved trash bag that grips the top of the garbage can. Clorox says it wants to highlight the bags’ “greater value.”

Similarly, Campbell Soup Co. recently reduced the promoted price of its V8 beverages in some markets to 2 for $5 from 2 for $6. Burger King Holdings Inc. is selling double cheeseburgers for just a dollar.

Glimmers of recovery in housing starts, manufacturing and auto sales have yet to reassure many consumers who are spooked by 10.2% unemployment, determined to save more and skeptical of sunny forecasts. The Conference Board recently said its consumer confidence index fell almost six points in October from September.

The retail picture is improving, but haltingly. The Federal Reserve said household spending “appears to be expanding but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth and tight credit.” A new holiday poll of consumers by consulting firm Deloitte LLP says 74% intend to buy items on sale and 54% intend to use more coupons. (Many retailers are increasing their ad spending ahead of the holidays to grab a bigger share of gift-giving dollars. Please see Advertising Column, page B5.)

For manufacturers and retailers, there’s reason for both hope and discouragement in consumers like Terrence Burrell. The 34-year-old in Temple Hills, Md., who works for a general contractor, has been shopping for a 52-inch LCD television for more than a year. Prices have fallen, so he figures he can shell out $1,500 for a TV instead of having to pay the $1,700 he had once expected. “With a major purchase like this, I want to find the right deal (and) the time is perfect now,” he says. A company will ring up a sale, but it won’t be as profitable as it might have been.

Pricing is perhaps where companies are finding consumers at their most grudging. Procter & Gamble Co. and other major makers of household staples, while vowing to resist price wars, say they plan to flood stores with enhanced versions of existing products. After nearly a decade of introducing increasingly expensive items, P&G’s new products will span a wider range of prices, most notably at the low end. Among its efforts, P&G is paring the price of its Cheer detergent to reposition it as a “value” brand.

Beauty products maker Estee Lauder Cos. Inc. recently reported better-than-expected results in a sign that consumers are starting to boost discretionary spending. But Estee Lauder CEO Fabrizio Freda told analysts it’s “prudent to remain cautious in our outlook” because of high unemployment and weak consumer sentiment. As a result, Mr. Freda said Estee Lauder’s holiday gift sets will offer wider price ranges to give consumers greater choice.

Airlines, seeing modest but hopeful signs of bookings in coming weeks, have been emboldened to raise some fares. But at the same time, some have offered fare sales over the holidays, hoping to stimulate further demand. Few airlines expect to increase the number of flights or seats they have on offer later this year and into 2010.

In a telling sign, revenue at the nation’s largest retailer, Wal-Mart Stores Inc., for the 12 months ending in January 2010 is expected to grow by only 1% to 2%—far less than the 5% to 7% the company projected a year ago. “Our customers are under financial pressure and that impacts the way customers spend and think,” Mike Duke, the retailer’s chief executive, told Wall Street analysts last month.

Walmart recently unveiled a list of 100 toys available at its stores for $10, reduced prices on several more expensive toys and slashed to $10 the prices on 10 highly anticipated books available for pre-order on its Web site in November, a move that set off a price war as Amazon.com Inc. and Target Corp. followed suit.

On Thursday, Wal-mart said it was selling 10 of the top DVDs available for preorder in November and December for $10 on its Web site. The titles include “Star Trek,” “Angels and Demons” and “Julie & Julia.” The company has promised to become even more aggressive on price cuts in the coming year. Once again, Target and Amazon lowered prices on the same titles.

There are some companies—particularly e-commerce and some electronics companies—that are more optimistic. EBay Inc., thinking consumers might be willing to spend more, is launching its first ad campaign in 18 months. Apple Inc. and Amazon.com Inc. forecast higher fourth-quarter sales, and Amazon said it’s beefing up inventories and adding staff for the holiday crush. Many consumer electronics sales appear to have bottomed out and are now climbing.

Other retailers anticipating better times tend to be discounters, such as footwear retailer DSW Inc., which recently said it expects per-share earnings to be nearly twice what it expected earlier this year; and some high-end stores, such as Nordstrom Inc., are being aided by affluent consumers buoyed by recent stock market gains.

Bargain-hunting remains the operative shopping mode, though. Supermarkets usually benefit during downturns as people turn away from restaurants and buy more food to prepare at home. But coupon-clippers are making it tough to boost margins. Kroger Co., the country’s No. 2 supermarket chain by revenue, recently downgraded its 2009 earnings-per-share guidance. “Customers are buying more of what they need and less of what they want,” Kroger chief operating officer Rodney McMullen told investors.

Carrie Isaac, a stay-at-home mom who blogs about finding bargains in Colorado Springs, Colo., says she uses coupons and buys only the necessities. “I’ve been more creative cooking with what we have on hand,” she says. “There used to be meals I wouldn’t make without sour cream, but now I make them without it,” she says, referring to Mexican dishes.

Restaurants have been offering discounts and promotions for months, in many cases without luring additional customers. Market research firm NPD Group doesn’t expect restaurant traffic to grow until the second half of next year.

DineEquity Inc.’s Applebee’s chain, which has been experiencing declining same-store sales, is now offering two entrees for $20. Julia Stewart, DineEquity’s chairman and chief executive, said in an interview that the promotions will continue even as the economy improves. “Consumers will literally shop our menu and a competitor’s menu,” Ms. Stewart said. “If they have $20 to spend, trust me, they will only spend $20.”

GM, Kellogg, Nestle beat to the tweet as squatters take over twitter names

(Ad age) On Twitter’s @Hyundai page, there is a collection of 140-character blasts in English and Korean about oysters, cellphones and the Yankees. (Click HERE for full story.)

New Giant Eagle Market District store is a foodie fun park
(Submitted by Amy Dieschbourg, Business Manager, Giant Eagle, Pittsburgh, PA)
(Pittsburgh Post-Gazette) Got roller skates? Toss them in the trunk when you head west to check out the new Market District Supermarket. (Click HERE for full story.)

Kraft in hostile bid for Cadbury
(BBC) US food company Kraft has launched a £9.8bn ($16.4bn) hostile bid for UK confectioner Cadbury. (Click HERE for full story.)

Hy-Vee CEO wins state Retailer of Year award

(WCF Courier) More than 400 grocery industry leaders attended the 16th Annual Iowa Grocery Industry Association Hall of Fame Dinner Tuesday at the Sheraton West Des Moines Hotel, where the IGIA honored its Retailer of the Year, Supplier of the Year and Lifetime Achievement Award winners. (Click HERE for full story.)

Jones Soda takes turkey soda vegan for the holidays
(Promo) Jones Soda caters to a market with adventurous and exotic tastes, and that’s reflected in this year’s Thanksgiving promotion. (Click HERE for full story.)

Dollar General dresses up for its debut
(The Wall Street Journal) The year’s most widely anticipated new U.S. stock is scheduled to make its debut this week, with discount retailer Dollar General Corp. trading on the New York Stock Exchange Friday under the symbol DG.

The company, which began in 1955 as one store in Kentucky, has swelled to more than 8.500 locations in the U.S. selling items ranging from groceries to sweatpants at $10 or less.

Through the worst of the economic downturn through 2008 and 2009, Dollar General did nothing but grow: Its sales, same store sales, total number of stores, and profits all rose. “It’s playing into strong growth fundamentals in a challenging market, and it’s in an industry segment that’s growing well,” says Scott Cutler, who heads NYSE Euronext’s listings business in the Americas. “I don’t know if they could have chosen a better time to go out.”

Dollar is betting that it will hang on to the legions of shoppers it has cultivated during the economic slowdown. The company is in its 20th consecutive year of same-store sales growth -- a period of both highs and lows in the economy -- and says its research indicates that the “vast majority” of new and existing customers plan to keep shopping there even after the economy recovers.

Morningstar Inc. analysts have labeled the initial public offering “high interest,” a term used sparingly by the research firm this fall.

Not everyone is convinced that Dollar General, which has plenty of discount store competition, can keep up its current growth rate, however. Sales grew 10% in 2008 and 13% in the first half of 2009; same-store sales grew 9% and 11% for each period, respectively.

“The economy is not getting worse, and unemployment has probably peaked. Stability in the economic environment is not going to provide a tailwind for their sales going forward,” says Eric Levine, director of retail and apparel research at Research Edge.

What Dollar and other competitors believe, adds Mr. Levine, is that “the middle income customer started to shop at deep discount stores” during the downturn. But “we contend that when consumers have more money in their pockets, they are less likely to shop in those channels” because the experience isn’t as pleasant as in more moderate and higher-priced channels.

Still, Mr. Levine and others say Dollar has made great improvements to its business over the last two years, a time that coincided with its ownership under private-equity firm Kohlberg Kravis Roberts & Co. During that period, it has added new private-label items, streamlined its inventory process, and refined its store site selection process, opening 207 new stores and relocating or remodeling 404 existing stores in 2008.

When KKR and co-investors including Goldman Sachs Group Inc. bought Dollar, they put down $2.8 billion in equity and borrowed the rest, so the company’s debt load weighed in at a hefty $4.1 billion as of July. In September, the investors received a special dividend of $239 million; no dividends will be paid out to anyone else once the company is public again.

Elsewhere in the IPO market: Value shopping seems to be the theme of the week, with a $122 million IPO set for discount apparel retailer Rue21 Inc. The stock is set to trade Friday on the Nasdaq under the symbol RUE.

Marketers serve super-cheap Thanksgiving fare
(Marketing Daily) This Thanksgiving, it looks like many consumers will come to the table grateful for food bargains, as marketers turn the spotlight on cheap eats. (Click HERE for full story.)

Cooking network coming to checkout screens
(Retail Customer Experience)  Premier Retail Networks, Inc. (PRN) and Rouxbe Video Technologies Inc., an online cooking school, announced an agreement to present customized cooking programming produced in HD by Rouxbe for display on PRN’s Checkout TV network and TV Wall network of HDTV screens in retail stores nationwide. (Click HERE for full story.)

Social media users talk brands
(Brandweek) Social media sites are on their way to becoming a brand’s best advertising medium, according to a new study. (Click HERE for full story.)

Sweetbay hopes customers gobble up its deep-fried frozen turkeys
(The Tampa Tribune) Each Thanksgiving season, a few unlucky Americans manage to burn down their houses trying to deep-fry a turkey. (Click HERE for full story.)

Sedano’s supermarkets expanding to Orlando
(The Miami Herald) For the first time in the company’s history, Sedano’s Supermarkets is expanding outside of South Florida. (Click HERE for full story.)

Coupon use continues resurgence
(Brandweek) Although economic recovery finally seems to be taking root in the U.S., consumers remain cautious when it comes to spending their money. (Click HERE for full story.)