GLG News by Warehouse Club Retail Experts

Rick SheaPresidentShea Marketing Consulting Inc.

Ralcorp to Purchase Post cereals ?

November 5, 2007

Analysis of:Kraft Near Deal to Sell Post to Ralcorp | biz.yahoo.com

Ralcorp's potential pucrhase of Post cereals for $2.8 billion dollars will shake up the cereal category and provide another stronger competitor to General Mills and Kellogg's.The winner will be Ralcorp if they can successfully integrate Post and leverage their brands to strengthen their private label sales.The losers will be Malt-O-Meal and Quaker as both brands will be under further pressure in a consoildated category.  For Kraft Foods it means their divestiture strategy will speed up and provide them additional dollars to pursue acquisitions.Kraft's growth startegy is predicated on shifting their portfolio to focus on more international growth and focusing on the key snacks,beverages and possibly confections in markets outside the US.

Rick SheaPresidentShea Marketing Consulting Inc.

Are All Food Companies Hostage to Commodity Prices in 2008 ?

November 2, 2007

Analysis of:Kellogg's 3Q profit up,warns on 2008 | biz.yahoo.com

Wheat prices are up 100% in 12 month's. Dairy prices continue to climb, increasing the costs of most food manufacturers.Is this a temporary phenomenon or is food inflation here to stay ?  Both Kellogg's and Kraft have provided disappointing guidance in the last few weeks blaming wheat and dairy along with other commodity prices as the chief culprits.Does this mean all food companies will underperform for the next year or two ? What companies are best positioned to withstand the increasing cost pressures ?

Rick SheaPresidentShea Marketing Consulting Inc.

Can food companies survive the large increases in commodity costs ?

October 24, 2007

Analysis of:Kellogg's downgraded by Citigroup | www.marketwatch.com

Commodity cost increases (wheat,corn,oil,sugar) are causing havoc with food and CPG companies bottom lines.The significant upward pressures of wheat (+100% latest 12 months) specifically impact all cereal,baking, pasta and many other food companies profits. The key questions surrounding these increases include: 1) Are companies able to take pricing to offset this increase in costs? 2) What companies will benefit the most and be hurt the most by rising commodities ? 3) What impact will it have on consumer sales if companies pass through the cost increases? 4) What % of their total P & L is tied to commodities and can they offset the increases with savings and productivity in other places ?

Rick SheaPresidentShea Marketing Consulting Inc.

Will Wonder Bread Survive?

October 11, 2007

Analysis of:Interstate Bakeries Says Unions Only Looking Out For Their Own Interests | www.topix.com

Interstate Bakeries and its unions are locked in a negotiating stalemate  over employee jobs and compensation.Specifically, IBC's management is looking for job cuts and lower costs from the unions to make the company more cost competitive.The unions obviously are seeking to minimize impact on its members and disagree with IBC's strategic plan to reorganize the company.The results will likely determine if IBC can survive and exit bankruptcy.

Howard JacksonPresidentHSA Consulting, Inc

WSJ quotes HSA Consulting Principal Re: Wal-Mart's Competitive Position in a Changing World

October 7, 2007

Analysis of:Wal-Mart Era Wanes Amid Big Shifts in Retail | online.wsj.com

Lead Wall Street Journal article published October 3, 2007 reviewing the changing retail competitive landscape. HSA Consulting Competing retailers have identified strategies to defeat low prices: - marketing non competing services such as PetSmart (on site Pet hotels, grooming, and vet services) - marketing non competing skus (Best Buy Magnolia brand, range extensions) - private label and licensing programs

Rick SheaPresidentShea Marketing Consulting Inc.

Where's Kraft Foods Volume Growth ?

September 14, 2007

Analysis of:Kraft Boosts Outlook | biz.yahoo.com

Kraft Foods has reported some progress in their recent quarterly earnings but the jury is still out on whether they can show sustainable sales and growth.Kraft has underperformed its food company peers over the last few years primarily because they have gotten away from what made them successful: new products and innovation and world class marketing.  If you look at what's been successful in the last few years in CPG food its been competitors & retailers embracing the natural & organic food trend and stronger focus on catering to the alternate channels (Walmart,Target,Warehouse clubs and even drug & convenience stores). Kraft has yet to devise a strategy that taps into these growing segments and growing customers.Until they do any volume growth will only be temporary and will be unsustainable. 

Martin BrillManaging PartnerSweetwater Consulting LLC

Vera Wang's New Line Is The Most Expensive Apparel Brand At Kohl's

August 27, 2007

Analysis of:Vera Wang Set to Dress Up Kohl's | online.wsj.com

1.In department stores, it is very rare that the most expensive line in a department ever does well. 2. It is unlikely that the typical Kohl's customer ever heard of Vera Wang. 3. Kohl's advertising campaign on this brand does not speak to their moderate customer base. 4. Vera Wang's designer line will not suffer and she will make some very nice short term money until Kohl's management recognizes its strategic mistake.

Jason KraOwnerTotal Sports Resources

Kohls will surely succeed w/ Vera as they did w/ Chaps & Daisy

August 3, 2007

Analysis of:Vera Wang Set to Dress Up Kohl's | online.wsj.com

    Relevant names but private label control will generate sure results for kohls in this new brand.  branded product created specifically for Kohls is like branded retail w/ a private label mentality of control.  This will be a huge success for Kohls and will follow other names as Chaps, and Daisy Fuentas which have been launched into kohls over the past few years 

Martin BrillManaging PartnerSweetwater Consulting LLC

Abercombie & Fitch Apparel Is A Natural Fit For Europe

July 18, 2007

Analysis of:A&F sets sights on Europe | www.retailingtoday.com

The Abercrombie & Fitch brand is percieved as edgy, sexy and contemporary American fashion, making it a perfect candidate for European expansion. The company is growing its top line by inceasing square footage in the U. S. as comp store sales have been generally flat. The London store concept was based on the unique New york flagship store on fifth avenue and will be the model for the new stores throughout Europe.

Martin BrillManaging PartnerSweetwater Consulting LLC

Undeterred by Foul Weather and the Economy, Guess Continues Spectacular Growth

June 11, 2007

Analysis of:Guess Steps on the Gas: Overseas Drive Helps Company's Growth Soar | www.wwd.com

With almost flawless execution of their global retail strategy and powerful brand extensions, Guess continues its dramatic growth in revenue and profit. Offering no excuses about the weather, high gasoline prices and a soft housing market, Guess reported that U.S. same-store sales for their first quarter grew 13.6 percent awhile total company earnings increased 71.9 percent. Wholesale revenues at Guess grew 77 percent, in spite of the brands rapid expansion of their own retail stores and growing Internet business. The experienced and talented upper management of the company was able to change the business model from a wholesale department store resource to a leading global retail brand in six years. Guess is established as a fashion leader in the “contemporary” fashion segment and its well merchandised product assortments uniquely position the brand for further global expansion.

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