Wednesday, August 15, 2007

Mid-Week Natural~Specialty Foods Roundup

Business News Briefs:

Wal-Mart says core-shoppers pressed for cash..Wal-Mart CEO Lee Scott says the mega-retailer's core shoppers, lower to middle income consumers, are having a tougher time making ends meet financially, especially towards the end of month. The company attributes this to flat wages, higher energy costs, the housing slump and rising mortgage defaults. Shoppers are making fewer shopping trips based on these factors resulting in lower quarterly sales at Wal-Mart, Scott told Wall Street analysts. Wal-Mart attributed their lower than expected profits (their sales were still up over 40% though) in the latest quarter to shoppers having less money available to spend do to these current economic factors presently operating in the U.S economy.

Wal-Mart still reported a huge 49% increase in second quarter sales led by strong sales increases in it's grocery and pharmacy areas.

Whole Foods/Wild Oats buyout...The U.S. Federal Trade Commission has revealed documents that show some of Whole Foods Markets, Inc.plans if it's $565 million purchase of Wild Oats Markets, Inc. gets approved. An article today by the Associated Press details some of those more interesting facts and plans, including the fact that the opening of a Whole Foods retail store near an existing Wild Oats store can cut sales at the Wild Oats store by as much as 30%. The documents also reveal Whole Foods' has set ground rules to many of it's suppliers baring them from selling product directly to Wal-Mart. You can read today's Associated Press story here:

Natural~Specialty News, Information and Analysis:

Starbucks goes retail...Mega-coffee guru Starbucks is further diversifying and branching out. It will began marketing a line of premium "drinking chocolate nuggets" in the fall at supermarkets, natural foods stores and other retail formats. Starbucks already has a branded retail presence in these formats with it's chilled coffee drinks, a joint-venture with PepsiCo, Inc. Starbucks also owns Tazo Tea, a brand of specialty tea sold in supermarkets and natural foods stores. Starbucks also plans to roll out a line of chocolate candies next spring. The line will include a coffee-infused premium dark chocolate bar, milk chocolate squares with flecks of chai tea, and an espresso truffle. Starbucks is says it will use only cocoa which is farmed using sustainable farming practices and will follow Fair Trade-type standards designed to boost the income of its cocoa growers while at the same time being environmentally responsible. Starbucks has teamed up with Hershey Co. to produce the chocolate products. You can read more here:

Analysis: Starbucks' entry into the premium chocolate market makes good since. The retail chocolate category is experiencing mega-growth. Respected researcher Packaged Facts predicts a total category increase of $2 billion from 2006-2007, for total category sales of $18 billion in 2007. The 2006 sales were $16 billion. A summary of Packaged Fact's study is here:

Premium, dark and natural chocolate are leading the categories' mega-growth. Starbucks has the overall brand equity--and the tie-in of coffee and chai tea with the chocolate makes good marketing sense because it comes from Starbucks, the coffee and tea master-purveyor. Starbucks already has a chocolate line which they sell exclusively in their cafes, so consumers are already familiar with the coffee chain's brand to a certain degree in the chocolate category. This gives Starbucks an advantage over other companies in entering a new category at retail such as chocolate and confection.

Happy retail birthday...Seattle, Washington's Pikes Peek Public Market celebrates its 100th anniversary this week. Pikes Peek market is a wonderful urban marketplace which has inspired natural foods and supermarket retailers in terms of making their own stores more user friendly. Pikes Peek also is a pioneer in offering natural and organic produce and other products for sale. It's also one of the originators in promoting sales of products by local artisan specialty foods producers. If it is local, unique, just harvested, baked or produced, you can find it at Pikes Peek Public Market. Pikes is a combination European marketplace and farmer's market in design. But it's far more than just that: It's a social place where people love to just hang out, shop, meet friends, and enjoy urban life. Pikes Peek Market is the perfect example of combining the social aspects of life with shopping, creating an environment that is both good for consumers and good for merchants.

Today's edition of the San Diego Union Tribune has an article on Pike's 100 year anniversary. You can read the story here:

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