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Morningstar names Costco’s Jim Sinegal CEO of the Year

BY Alaric DeArment

CHICAGO — Investment research firm Morningstar has named the outgoing CEO of Costco Wholesale as its 2011 CEO of the Year, the company said Wednesday.

Costco CEO Jim Sinegal, who retired on New Year’s Day, received the recognition for what Morningstar called his "exemplary corporate stewardship, independent thinking" and creating "lasting value for shareholders."

"This year’s nominees have each added intrinsic value to the companies they run," Morningstar chief equities strategist and editor Paul Larson said. "James Sinegal, who has served as CEO since co-founding Costco in 1983, has created and maintained value for all company stakeholders during his tenure."

The retailer announced Sinegal’s plan to step down in September, with COO Craig Jelinek replacing him.

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Economic approach leads to declines

BY Barbara White-Sax

Sales of household cleaning products have seen a decline over the last four years, according to a recent study by Mintel — a trend the market research company expected will continue until 2015.

Mintel attributed the dip in sales to consumers cleaning their homes on an as-needed basis and taking a more economy-focused approach to the category. Cleaning cloths/wipes, furniture polish and floor cleaners have had the best growth. Sales of green products slowed, but still show promise.

  

The article above is part of the DSN Category Review Series. For the complete Household Cleaning Sell-Through Report, including extensive charts, data and more analysis, click here.

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Report: Retail utilization of FSI promotional vehicle up; overall FSI utilization down

BY Michael Johnsen

MINNEAPOLIS — Despite an overall decrease in free standing insert coupon activity, retailer promotion pages within the FSI vehicles recorded a 30.7% increase to more than 17 billion pages in 2011, continuing the significant annual increases in retailer promotion activity, which began in 2007, Kantar Media reported Wednesday.

Overall, the number of free-standing insert coupons distributed through 2011 dropped 6.5% compared with 2010. This decline in FSI coupon activity followed two consecutive years of annual increases of 8% in 2009 and 7.2% in 2010.

Walmart took the top spot from Dollar General with a 746.1% increase to 3.9 billion pages. Dollar General, in the second spot, was up 23.5% to 2.8 billion pages, while Target dropped to third having remained flat at 2.2 billion pages. Other retailers ranked by FSI coupon activity, in order, included Walgreens, PetSmart, CVS/pharmacy, Family Dollar, PETCO, Kroger (banner) and Kmart.

Retailer promotion events continued to evolve as a promotion tactic in 2011. Seven-out-of-9 areas reported by Kantar Media increased the use of retailer promotion pages in 2011, including frozen products, personal care and healthcare product areas. The number of manufacturers utilizing this tactic increased 16.9% in 2011 and has more than doubled since 2007.  

“Consumer packaged goods manufacturers continue to include FSI coupons as part of their marketing mix to reach millions of households with a relevant brand message and purchase incentive during a specific week,” stated David Hamric, general manager at Kantar Media Marx. “Increasingly, manufacturers and retailers are participating in cooperative events to influence [shoppers] on their path-to-purchase, making FSI coupons an important lead indicator of competitive promotion tactics, creative brand messaging and retailer promotion alignment.”

FSI coupon support was included as part of 291 new product introductions during this period, down from 344 during 2010. “FSI coupons continue to be an important advertising and promotion vehicle to create brand awareness and to incent trial purchasing for new product introductions,” Hamric noted.  

In 2011, the frequency of FSI events declined slightly, with activity occurring on 47 of 52 weeks. The “pre-Mother’s Day” promotion week of May 1 had the greatest activity with a weighted average circulation of 156 pages. Oct. 2 was the second most heavily weighted week with a total of 137 pages, followed by the “pre-Labor Day” promotion week of Aug. 28 with 126 pages.

During 2011, more than $421 billion in consumer incentives were delivered via FSI coupons, down 6.7% from 2010. And for the first time in at least the last 10 years, FSI coupon average face value did not increase. At $1.55, average face value dropped 20 basis points versus 2010. Average expiration continued a steady downward trend with a decrease to 8.1 weeks, down 5.2% versus a year ago. These trends indicate that manufacturers are managing their financial exposure by maintaining current offer values, reducing the number of coupons distributed and shortening the length of time that these offers are available in the market.

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