Holiday Season: News and Notes
Thanksgiving is about a week away and according to IBISWorld Forecasts consumer spending on Thanksgiving is projected to increase 2.6 percent from 2009, totaling $6.7 billion. Food is expected to account for two-thirds of that spending. Turkeys, of course, make up the bulk of food purchases at $3.5 billion. IBISWorld says that lower turkey production in the farming industry will mean higher prices this year. As a result, turkey sales are expected to grow 4.1 percent, driven by the higher prices. No word on how the supermarket promotions that say “spend a certain amount and get a free turkey” factor into these numbers.
Canned pumpkin sales are expected to rise 10.7 percent this year to $125.5 million. IBISWorld says there was a canned pumpkin shortage in 2009 so it expects consumers to stock up this year. Canned pumpkin shortage? Who knew?
- Black Friday sales are expected to increase 1.9 percent to $11.7 billion. The overall weekend expenditure will grow by 3.4 percent to $41.7 billion.
- Cyber Monday sales are expected to increase 13.2 percent.
- Walmart announced that most stores will open its doors at midnight as Thanksgiving night turns into Black Friday morning. Dubbed Walmart Open House, the chain says it is offering big savings on toys, apparel, and home goods. Then, beginning at 5 a.m., Walmart will kick off its electronics event, including incredible prices on HDTVs, laptops, gaming systems, and cameras. Walmart’s press release says this new strategy of opening at midnight is to keep consumers from waiting outside in the cold. However, it is more likely a move to improve safety.
Store Check: Toy Displays at the Drug Chains
As part of our continuing Store Check series, this week we visit drug chains Walgreens, CVS, and Rite Aid. Walgreens has historically made a big investment in the toy industry and it’s obvious when you walk the store. In the front of the store, there’s a Paper Jamz promotion near the register. Walk to the back of the store and there is a full aisle of toys. However, rather than setting up the aisles by product category, Walgreens sets up the aisles by price. It is a clever strategy for a drug chain. There is a $9.99 section, which is mostly games and vehicles. There’s a $13.99 section, which offers a “buy-two-toys, get-one-toy-free” promotion. There is also a $19.99 section featuring Hot Wheels and Disney Princess. Walgreens also had large selection of Beanie Babies, Disney Plush, and Pillow Pets. The toy aisle appeared to be 75 –80 percent branded toys and 20 percent private label. There was also an additional toy aisle near the giftwrap section that featured games, activity toys, Barbie, the Zhu Zhu line, Disney Princess, and more. The odd thing that stood out in Walgreens is that the hottest toys were still stacked on the highest shelves.
CVS only devoted one square block to toys. There were some Discovery Kids items, but the majority of the display featured private label items. There was an endcap of Kung Zhu. Rite Aid had only one row of toys, mainly private label merchandise. After walking the three chains, it’s obvious why Walgreens sells so many more toys than its competitors.
Rise in Private Label Continues
The Private Label Manufacturers Associations (PLMA) says that nearly 1 out of 4 products bought in U.S. supermarkets last year was a store brand. PLMA says that store brands accounted for almost 90 percent of all new revenue in the channel.
In drug stores, private label dollar share was 14.1 percent and unit share was 16.3 percent. Private label was responsible for more than half of all sales gains, according to PLMA.
Among all retail outlets, which combine point-of-sale data for supermarkets, drug stores, and mass merchandisers, there were similar advances with all-time highs posted in dollar share at 17 percent, and unit share at 21.8 percent. Store brands contributed 63 percent of additional dollar revenue, says PLMA. The PLMA Show takes place this week, www.plma.com.
Spin Master’s Anton Rabie Is Dancing with the Stars
On Thursday November 4, Spin Master’s Anton Rabie was one of five dancers to participate in Baycrest Dancing with Our Stars—Season 2. The purpose of this event is to raise funds for Baycrest Centre of Innovations in Aging. The event was hosted by comedian Howie Mandel. Bruno Tonioli from Dancing with the Stars, attended as a celebrity judge. Spin Master is happy to report that Anton, along with the other four dancers, raised more than $2 million for Baycrest, which provides critical funding for research and care initiatives in Baycrest’s Centre for Innovations in Aging. He practiced around the clock with his professional dancing partner Tanya.
Walmart Reports Third Quarter Results
Walmart Stores, Inc., reported financial results for the quarter ended October 31, 2010. Net sales for the third quarter of fiscal year 2011 were $101.2 billion, an increase of 2.6 percent from $98.7 billion in the third quarter last year. Income from continuing operations attributable to Walmart for the quarter was $3.4 billion, up from $3.2 billion in the third quarter last year.
Diluted earnings per share from continuing operations attributable to Walmart for the third quarter of fiscal year 2011 were $0.95, including a tax benefit of $191 million, or approximately $0.05. The tax benefit is due to favorable adjustments to current transfer pricing policies after negotiations with a foreign tax jurisdiction during the third quarter. This $0.95 compares to an adjusted diluted EPS of $0.82 in the third quarter last year.
“Walmart performed well in the third quarter, and we delivered solid earnings per share growth for our shareholders,” said Mike Duke, Wal-Mart Stores, Inc. president and CEO, in a statement. “Our company now has delivered four consecutive quarters of operating expense leverage, and we continue to grow operating income faster than sales.”
Walmart continues to expand its ability to reach more customers around the world through new units and multi-channel initiatives. The company added almost 10 million square feet of retail space this quarter, with 37 percent of the square footage growth in Walmart International. International net sales grew more than 9 percent this quarter compared to last year’s third quarter.
Additional earnings highlights include: that the company is raising its full-year EPS guidance to a range of $4.08 to $4.12, from its previous range of $3.95 to $4.05.
Walmart U.S. comparable store sales declined 1.3 percent in the third quarter 13-week period ended October 29, 2010. Sam’s Club posted a comparable sales increase, without fuel, of 2.4 percent for the same period.
Year to date, the company has returned $14.3 billion to shareholders through dividends and share repurchase.
Telemundo Jewelry Line Unveiled Last Week
Telemundo, the NBC Universal Television Consumer Products Group and The Richline Group have introduced Todo por un Beso, (anything for a kiss), the latest collection from Telemundo jewelry by designer Udi Behr. It was unveiled last week.