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August retail sales rise

BY Allison Cerra

WASHINGTON Advance estimates of U.S. retail and food services sales for August rose 0.4% to $363.7 billion from July, and 3.6% above the same period last year, the Census Bureau reported Tuesday.

Total sales for the June through August 2010 period were up 4.7% from the year-ago period. Sales at grocery stores totaled about $43.83 million, up from $42.79 million in August 2009. Health and personal care stores also gained momentum, earning $22.07 million for the month, compared with $21.11 million in August 2009. Although estimates for pharmacies and drug stores are not available in the Census Bureau’s report, sales in July totaled nearly $18.6 million, up from nearly $18.2 million in July 2009.

These estimates are adjusted for seasonal variations and holiday and trading-day differences, but not for price changes.

In response to the sales report release, the National Retail Federation said retailers’ aggressive promotions and state sales tax holidays aided sales during the summer, otherwise known as back-to-school season.

While NRF’s 2010 Back to School survey — which was released in July — projected back-to-school spending to hit $55.12 billion this year, the lobbying group noted that shoppers still are cautious.

“Most Americans are in a much better financial position than a year ago, but they are still spending cautiously, looking for bargains and comparing prices before buying,” said NRF president and CEO Matthew Shay. “After leveraging aggressive promotions to bring in back-to-school shoppers, retailers are putting the finishing touches on promotions and pricing for the upcoming holiday season.”

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Value, deals favorite BTS subjects

BY DSN STAFF

Parents may spend a bit more freely for back-to-school this year, but value still is the name of the game. Nielsen predicted an “extremely modest” sales increase for the back-to-school season, due mostly to an increase in prices compared with last year. Nielsen forecasted unit sales for the office/school supply category to drop 5.25% to 1.04 billion.

Average amount U.S. families intended to spend on supplies

Source: National Retail Federation; BIGresearch Consumer Intentions and Actions Survey
YEAR AVERAGE AMOUNT
2010 $96.39
2009 82.62
2008 98.37

Supercenters, dollar stores and drug stores likely are to see gains in the category, according to Nielsen. “Those retailers offering strong discounts and appealing to customers’ desire for savings and value will be this year’s back-to-school winners,” said James Russo, Nielsen’s VP global consumer insights. “The drug channel may do better in the back half of the season as planning becomes less of a motivator and impulse shopping takes over.”

Cost-conscious consumers will be looking for deals and coupons, and manufacturers are planning to deliver. “We expect consumers to be focused on value,” said Tim Koletsos, director of stationery marketing at BIC Consumer Products USA. “Couponing continues to be a big focus for BIC, and during 2010, you’ll see an expanded presence.”

%of consumers planning to spend at least $250 on BTS shopping

Source: PriceGrabber.com
SCHOOL %OF CONSUMERS
Elementary 52%
Middle/junior high 62
High school 50
College/junior college 67

While BIC’s Koletsos expected such value products as ballpoint pen and mechanical pencil multipacks to have strong sales, he anticipated consumer demand for products that are new and different. “Fashion-barreled mechanical pencils continue to be extremely popular with students of all ages,” he said. Large ballpoint pens, which provide a bold and smooth gel-like writing experience, are an emerging category trend.

Newell Rubbermaid’s new Sharpie Liquid Pencil, which writes like a pen but erases like a pencil, should be a big hit this season as well.

There’s also room for fashion on every school-supply shopping list. “Kids expect their supplies to incorporate the trendiest colors and patterns, and their supplies function in much the same way as their clothes and accessories,” said Denise Sada, marketing manager at Mead. This year, Sada expected geometric patterns and bold florals to return as big fashion influences.

Peace signs also are a big fashion symbol this year, according to April Whitlock, a spokeswoman for Carolina Pad. The company’s Dreamsicle collection has been popular with mass-market consumers.

Students also are embracing recycled products. Mead is offering 100% recycled notebooks and folders, both with 30% post-consumer waste. Carolina Pad’s popular eco-friendly line, Sasquatch, has fresh, updated looks this year.

Paper Mate also has introduced a pen and mechanical pencil that is made with a majority of biodegradable components, which will naturally decompose in the soil or home compost in a year. The pen comes in black, blue, red or purple ink and retails for $2.50.

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Sustaining the environment, restoring idealism

BY Rob Eder

A certain literary hero of mine might have called it “Fear and Loathing in San Diego.” Stranded at the airport bar for the better part of nine hours while JetBlue drove down a new part from Los Angeles International Airport for our plane’s public address system—without which Flight 188 to New York’s John F. Kennedy Airport “wasn’t going nowhere,” as Lenny the flight attendant explained—I tried with Martha Stewart-like resolve to just focus on my notes from NACDS’ Pharmacy and Technology Conference and the ice at the bottom of my glass, while the crazy woman from Chicago rambled on about hurricanes. Her purple-stained lips suggested it could have been the wine talking, but she claimed to work for the Federal Emergency Management Agency, and that in that capacity, she too might soon be heading to New York.

“They say Earl could be a ‘Category 5’ by the time it hits New York,” she said. “If that were to happen, the subway tunnels would all fill with seawater and downtown would be underwater.”

Great. Nothing quite takes your mind off the status of your flight delay like a little light conversation about the potentiality for the quasi-biblical destruction of your hometown.

To cheer myself up, I read a cover story in The Atlantic about how Israel likely would attack Iran’s nuclear weapons-making capabilities by about January. To be sure, whenever I finally did get home, the world still was going to be a big, scary place. The only consolation is that you can still get a burger and a beer at 5 a.m. in New York City.

Ironically, it’s my work as the editor of Drug Store News that often shatters my cynical delusions of a world gone to hell in a bucket, restoring the idealism of my youth. Retail pharmacy and the consumer packaged goods industry’s response to events like Katrina, and more recently the earthquake in Haiti, are classic examples of good companies doing good work. Then there’s stuff like Procter & Gamble’s recent Future Friendly initiatives—the most recent of which the company unveiled during a special Sept. 2 conference call with business reporters—which demonstrates how a good company can do good while doing good work.

The overarching goal of the Future Friendly program is to make green products more user-friendly for mainstream consumers by redesigning P&G brands to save water or energy, or to reduce waste. Phase one of the program featured the launch of such products as Tide Coldwater and Cascade ActionPacs, and a considerable PR investment to educate consumers on what’s in it for them. For instance, washing laundry in cold water can cut energy usage by as much as 80% per load.

Now P&G is gearing up for a February 2011 re-launch of its powder detergent brands, including Tide and Gain, aiming to compact the size of its packaging by one-third. That will amount to savings of 28% less corrugated cardboard, or roughly 68 million sq. ft.; 6%, or 5,900, fewer trucks on the road; and 5% to 8% less fuel, or as much as 890,000 gallons of diesel. For consumers, the new packages are easier to carry and store. The products also represent brands that consumers know and understand, versus some unknown name they have never heard of—an important sell for retailers, too.

In all, P&G expected the changes to drive growth of 2% to 4% in the powder detergent category.

These kinds of efforts give a new meaning to the concept of “sustainability” because they aim to make saving the planet a sustainable effort by making it good business to do so. That, along with a good burger and a beer, can be a hell of a consolation at 5 a.m. for a journalist who’s just happy to be home.

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