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Supervalu reports earnings increase despite sales drop

BY Michael Johnsen

MINNEAPOLIS Supervalu on Wednesday reported a third-quarter drop of 4.7 percent in net sales of $10.2 billion, but record net earnings of $141 million show an increase of 25 percent compared to the year-ago period.

“Our third-quarter results continue to benefit from the transformational acquisition in 2006 as we deliver the sixth straight quarter of double-digit earnings per share growth,” stated Jeff Noddle, Supervalu chairman and chief executive officer. We are pleased with our overall results, despite some headwind from softer than expected retail sales in the quarter.”

Supervalu’s third quarter of fiscal 2008 ended Dec. 1, 2007, and included 12 weeks of combined results compared to the third quarter of fiscal 2007 which included 13 weeks of acquired operations. The estimated sales impact of one less week of acquired operations in the third quarter of fiscal 2008 is approximately $500 million.

In addition, third-quarter fiscal 2008 and third-quarter fiscal 2007 results included after-tax charges for one-time acquisition-related costs of $7 million and $10 million, respectively. When adjusting for the one-time acquisition costs in both years and the one extra week in the prior year quarter, diluted earnings per share increased 23 percent, the company stated.

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IRI study shows half of consumers consider environmental issues when shopping

BY Michael Johnsen

CHICAGO Approximately 50 percent of U.S. consumers consider at least one “green” factor in selecting consumer packaged goods items and choosing where to shop for those products, according to a recently released survey conducted by Information Resources, Inc.

The 22,000 U.S. consumers surveyed were asked to determine the impact of four key sustainability features in their product and store selection—organic, eco-friendly products, eco-friendly packaging and fair treatment of employees and suppliers. One-fifth of those surveyed were determined to be “sustainability driven,” taking at least two sustainability factors into account when making their selections.

“Sustainability has evolved from a niche segment concern to a major factor influencing purchasing and shopping behavior across a sizable consumer base,” stated Andrew Salzman, IRI chief marketing officer. “Our survey indicates that consumers are focused more and more on the social and environmental impact of their CPG purchases, creating a viable and growing U.S. market for sustainable products and packaging with the potential to mirror well-developed markets in Europe and Japan. U.S. retailers and manufacturers are beginning to respond to that demand,” he said.

“Consumers aged 55 and older are the real driving force behind this expansion,” Salzman added. “Generally, with the time to seek out specialty items and the resources to afford premium priced products, aging consumers are a critical target market today. As sustainable products and packaging become more widely available, we anticipate that the market will expand across consumer segments.”

Among the IRI results highlighting the evolution of sustainability factors in consumer decision-making:

  • Approximately 30 percent look for eco-friendly products and packaging in their brand selection;
  • Up to one-quarter of those surveyed consider fair trade practices along with eco-friendly or organic designations in selecting a shopping destination;
  • Nearly 40 percent of consumers search specifically for organic products

“Currently, organic products are scoring extremely well with consumers,” says Salzman. “Benefiting from the winning combination of a ‘better for you’ association and a ‘better for the environment’ attribute, the organic designation has moved to the front of consumer consciousness.”

Once dominated by niche manufacturers and specialty retailers, CPG industry leaders now maintain a sizable stake in the organics market and with leading retailers. This includes Safeway and Kroger with their highly successful organic private label lines. Several leading manufacturers are also beginning to offer organic versions of favorite products, such as Kraft’s organic Wheat Thins and Chips Ahoy.

Among non-food items, the IRI study highlights replacement of chemical-based items with eco-friendly products as an emerging sustainability category. One example is green laundry detergent. Though currently just 2 percent of the total detergent market, the growing demand for biodegradable, non-toxic and plant-based products is reflected in a 66 percent increase in green product sales during the past year within a category that has overall flat sales.

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Kimberly-Clark calls new Cottonelle campaign its largest non-traditional marketing drive ever

BY Tara Smith

DALLAS Kimberly-Clark Corp. on Monday announced it is launching the largest non-traditional marketing campaign in its history to help drive further growth for its Cottonelle brand.

The campaign, “Be Kind to Your Behind,” debuts this month and integrates experiential marketing, branded Web sites, Internet advertising, bus and train station ads, in-store promotions, redesigned product packaging and public relations activities, as well as traditional TV and print advertising. In addition, the campaign will use the iconic Cottonelle puppy across all communications channels to embody the brand’s key benefits of soft, soothing comfort.

The campaign kicked off Monday in the United States and Canada and in March the company will roll out the Cottonelle Comfort Haven. The Haven features a puppy-themed bus that will travel to major metropolitan cities across North America with four themed comfort areas offering consumers access to massages, yoga and a sweepstakes promotion. Kimberly-Clark plans to launch the “Be Kind to Your Behind” campaign throughout Europe in the summer of 2008 under multiple brands, also using the iconic puppy.

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