(Remember: For listing of retailer mentioned on this page, click on *Whole Foods Market* in text.)
Another Marketing ‘Bullseye” for Target
*Target, Minneapolis, is famous for its fashion statement and image; so it may not be surprising to see this strategy in its latest back-to-school promotion, “hello super student,” a 36 full-page (plus a 16 half-page insert as a birthday party planner) all for kids. It’s chock full of colorful illustrations, promoting school supplies, clothing, games, books, toys, dolls, bedding, etc. Nothing especially different here, except there’s also foods that kids like, some pharmacy and over-the-counter analgesics and bandages, plus wipes, plates and cups, tissues, and other sundries.
What strikes our interest is the fact that all of it has the Target magic touch, so to speak. Children in action (not just posing) and sprinkled throughout the promotion piece some of Target’s private labels, i.e., Target glue; Mossimo, xhilaration & Cherokee apparel; Market pantry fresh apples, raisins, honey graham teddy bears; and some Target exclusives. (Target has an exclusive on a full line of Camp Rock brand tween merchandise, inspired by the Disney Channel original movie, Camp Rock. Only Disney stores can carry some of these products.)
We like Target’s style: Products that are exciting and suggest fun. We like Target’s positioning of its own brands—mixed right in with all the other exciting products promoted in this promotional effort. Target hit the bulleye with this effort and to seal the deal, attached more than $50 in coupons (17 total) neatly folded into a sticky-note size on the back page. The coupon offers, of course, include some private label items, such as $5 off Cherokee/xhilaration/Mossimo kids apparel or 70 cents off Market Pantry granola/cereal bars or fruit snacks.
Cigarettes, Beer in Just 90 Seconds—And Now Much More!
The convenience store industry is changing dramatically from its stereotyped image of a hit-and-run visit for tobacco and a beverage. Just released, the 2008 Foodservice Survey of some 100 convenience store operators (41% single store owners, 59% with two or more stores), conducted by “Convenience Store News,” showed an 11% gain in foodservice sales, surpassing the sales growth of all other categories in this market segment. The c-store business already has embraced foodservice, offering: sandwiches, hot dogs, pizza, chicken, bakery items, salads, etc. But the real excitement behind this news, we believe, is the growing significance of private label in these stores. No better proof can be found than at *7-Eleven, Dallas, the market leader.
This chain already has begun rolling out its 7-Eleven Select range of food, beverages, and non-food products, products you would find in any supermarket. Now, the Internet blog, Fresh & Easy Buzz (no relation to Tesco’s Fresh & Easy business in the U.S.) reports that 7-Eleven in September 2008 will introduce into the Florida market a new higher quality line of prepared foods, under its Signature 7 brand. This will include specialty sandwiches, ethnic foods (Asian, Hispanic), salads, fresh fruit parfaits, desserts, beverages, and other ready-to-eat/ready-to-heat prepared foods some featuring a localized flavor, targeting Hispanic markets, for example.
In doing some research on the internet, we find that this company’s food show, under the University of 7-Eleven, this year has previewed some of its latest food ideas, some with a regional flavor: hot dogs imprinted with the 7-Eleven logo, burritos with green chili, chicken pesto croissants, guava-based pastries, different sandwiches (Cuban, Philly Cheese Steak), etc. While 7-Eleven customers may spend more time at the store’s gas pump, filling up on less expensive gasoline; their 90-second hit-and-run inside the store very well may be extended, as the food selection in 7-Eleven stores grows.
Somerfield, Going, Going, Gone to The Co-Op Group
After considering an auction early this year, the equity owners of the troubled UK convenience store operator, *Somerfield, operator of some 880 local grocery outlets and generating net sales in excess of $8 billion, in July 2008, agreed to sell Somerfield for just over $3 billion in cash ( but debt free) to *The Co-operative Group in the UK. With approval from the Office of Fair Trade, expected within six months, Co-Op Group will then operate more than 3,000 grocery stores and realize net sales of some $16 billion, making it a market leader in the c-store segment in the United Kingdom and the fifth largest food retailer there, commanding an 8% market share. Co-Op stands to benefit by extending its Co-Op concept into new markets and realize greater purchasing leverage. That will improve its Co-Op brand turnover as well.
While Big Brands Hike Prices, Retailers Lower Their Prices
Bad news comes this month (July) for brand-loyal customers of Tide laundry detergent, Coca-Cola, Huggies diapers, Jimmy Dean sausages, Kraft cheese, Kellogg cereals, etc.. The brand manufacturers of those big brands, i.e., P&G, Coke, Kimberly-Clark, Sara Lee, Kraft, and Kellogg’s, respectively, have just announced significant price hikes for their products.
P&G plans to boost prices up as high as 16%, its highest hike in 18 months, for brands like Tide, Head & Shoulders shampoo, Gillette shaving cream, and Ivory soap. (Its last price increase was 4 to 8%.) Coke’s biggest bottler, Coca-Cola Enterprises, plans to edge its prices up by “a percentage in the mid-single digit to high-single digit range,” according to an Associated Press report (July 18). Kimberly-Clark, too, has similar plans, raising its prices for Huggies, Pull-Ups training pants, Cottonelle and Scott bathroom tissues, Viva towels, and Kleenex facial tissues, 6 to 8%.
In a report in the Financial Times (July 21), prices on Sara Lee’s meat lines reportedly will be hiked “up to a fifth later this year.” FT also notes Kraft Foods, which already boosted prices this year up by 12 to 13%, indicates that some of its cheese categories now could climb by 25%. Kellogg’s also has planned prices hikes “by a few percent,” while, FT, adds, ConAgra Foods also plans more price increases, after imposing a 5% increase in March 2008.
Higher costs of plastic, energy, paper, commodity, and other raw materials have forced these price increases. Meantime, retailers are doing just the opposite, that is, lowering their prices, as cited on our Editorial on page 1 of this news page. The latest initiative comes as a surprise, from a specialty food chain nicknamed, “Whole Paycheck,” according to one trade magazine report. There’s no argument that *Whole Foods Market* , Austin, TX, is expensive; but its latest nationwide promotion, launched on July 17 and called “The Real Deal,” tells consumers: “Hot to milk your back to school dollar for all it’s worth, go organic but don’t go broke, and grill out without getting burned.” In a quarterly 28-page value guide, The Real Deal features meal plans and recipes on a budget, department-specific tips and savings, numerous 365 Everyday Value product deals, and statements about its commitment to quality standards. In fact, many of the suggested recipes include Whole Foods’ own brand, 365 Everyday Value products. Additionally, $1 off coupons on selected 365 Everyday Value items are offered among numerous manufacturer’s coupons.
“Product of the Year” Survey Deadline: July 31+
A new U.S. survey, based on feedback from 100,000 consumers, will choose the “Product of the Year” for a consumer packaged goods product—food to health and beauty care to pet food, etc—voted on the basis of innovation. This year, for the first time, the Product of the Year opinion poll will debut in the United States. Organizers of this consumer survey, have in the past picked winners from survey results collected at their offices located in 20 European countries. The new U.S. research effort will be conduced by TNS Market Research and coordinated by the Product of the Year USA office in New York. Adweek Media serves as the exclusive media partner for the U.S. survey. Overseas submissions in the past have come from major brand companies, and those who have won this distinction and have featured the POY logo on their packaging and advertising reportedly have experienced sales increases of 10 to 15%, according to the organizers.
Deadline for this year’s survey is July 31, 2008, but will be extended for entries submitted in August. Retailers, who have innovative private label products, may wish to participate by contacting the organizers at www.productoftheyearusa.com. While participation is free and the participants receive a free report of the results, the finalist, chosen by a jury of industry professionals, must pay a fee of $25,000. This fee, says the organizers, pays for itself in the next step in the form of a detailed consumer research report by TNS, valued at $80,000. For details, visit the website.
POY plans to expand its survey to Canada, South Africa and India this year and into Japan and Australia in 2009.
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