Winn-Dixie plans to become more promotional in an effort to drive the top line after a fourth quarter that included a 5.2% decline in identical-store sales.

According to Peter Lynch, chairman and chief executive officer, “We made the decision in the fourth quarter not to chase sales, and I think that hurt us a little bit. What he have done is take a strategic look at a few departments and while we don’t plan to over-promote, we think we can jump-start sales.”

He said sales trends during the first eight weeks of the first quarter “have significantly improved, and we have additional sales initiatives we’re implementing to build on the improvement so far.”

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Sales and Marketing Agencies Expand in Down Economy

Source: SupermarketNews.com

While food retailers and their suppliers have been resilient in the weak economy, one would be hard-pressed to say they have thrived.  

That description, however, does fit the sales and marketing agencies that act as go-betweens among retailers and vendors.

Following the path predicted in a 2006 report by the Grocery Manufacturers Association, sales agencies have benefited from a shift toward outsourcing a variety of the functions that traditionally had been performed by suppliers.

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Walmart will bring back thousands of items previously cut through Project Impact, scrap the deep “Rollbacks” it tried in April and May and reduce ad spending to “historical levels” as new U.S. President William Simon wastes no time reversing much of what his predecessor did.

Moves such as returning merchandise displays to the “Action Alley” aisles of Walmart stores have already resulted in better customer traffic and sales in July than during the prior two months of the just-completed fiscal second quarter, said Mr. Simon on a pre-recorded Aug. 17 earnings call. He assumed his current post in July as his predecessor, Vice Chairman Eduardo Castro-Wright, moved to new duties overseeing global e-commerce and sourcing.

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Despite some faint glimpses of economic recovery, shoppers overall remain frugal, and their attitudes are reflected in the extensive product-sales data from Chicago-based SymphonyIRI Group.

Overall, the data show that supermarkets and product suppliers have been able to provide effective solutions for consumers feeling the economic pinch, while at the same time meeting increased demand for lifestyle products that impact health and wellness.

In a recent Times & Trends report, SymphonyIRI Group noted that some shopper behaviors picked up during the recession are lingering, such as creating a shopping list ahead of time and sticking to it.

“Though the economy is showing signs of brightening, ongoing consumer research indicates that ‘pre-planned shopping’ will remain firmly entrenched throughout 2010, and beyond,” IRI said in the report.

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Kroger is reportedly expanding its Mirra natural beauty line launched late last year.  Kroger is said to support the line with national inserts and coupons this fall, according to reports. 

Kroger says Mirra is turning in double-digit sales increases. The retailer continues to promote the line on its website with $5 off the purchase of any two products.

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Specialty food retailers like Trader Joe’s and Whole Foods Market have seen greater growth in store-brand sales between 2005 and 2009 than traditional supermarkets, according to a report by Packaged Facts.  It found that private-label growth among traditional grocers was modest at a compound annual rate of 4% during the time period. Trader Joe’s and Whole Foods’ store brands grew at a CAGR of 14%.

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U.S. cereal makers are locked in a price war, and their battle for market share is hurting profits and threatening to persist into next year.

It’s unclear who will buckle first.

In an interview with MarketWatch, Kellogg Chief Executive David Mackay said supermarket chains and other retailers were using cereal to draw shoppers into their stores, just as cheap milk and meats were dangled in front of consumers earlier this year. Weak cereal prices forced Kellogg to cut its 2010 profit- and sales-growth targets.

He said the price war — which has effectively erased the price gap between brand-name cereals and store brands — could end as early as October or as late as December.

“It’s not something good for the category,” Mackay said. “Our approach going forward is to take a very responsible and reasoned approach to what we do from a promotional perspective.”

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Target Corp.’s remodeling program to add fresh produce at its general merchandise stores and its new credit card discount are exceeding expectations, according to a key retail analyst.

In a note published Wednesday, Citi Investment Research Deborah Weinswig wrote that Target is confident that both initiatives will drive profitability, based on a recent meeting with management. She reiterated her “Buy” rating on the stock.

“While the apparent pause in the economic recovery has caused management to plan their business more cautiously for (the second half), we believe that stronger sales in apparel and continued momentum with (the remodel) should result in strong earnings growth,” Weinswig wrote.

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Cravings and fun atmospheres drive consumers to restaurants rather than the local supermarket when time-starved families need a solution to the age-old question, “What’s for dinner?” according to a new report from The NPD Group.

The market research firm found that nearly two-thirds of prepared foods sold at retail come from traditional supermarkets, but there are advantages that restaurants can leverage to prevent further erosion in their takeout-meal market share from what NPD calls food stores.

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As the economic downturn has persisted, marketers have comforted themselves with the thought that a lot of pent-up demand must be accumulating. But a survey issued this month by Deloitte and the Harrison Group gives reason to wonder whether this reservoir of demand actually exists.

From a marketer’s point of view, one of the poll’s findings is particularly alarming in this regard: 65 percent of respondents agreed with the statement, “Even though I am spending less on products now, it doesn’t feel like I’m sacrificing that much.”

Moreover, many get positive satisfaction from their careful spending. Seventy-nine percent endorsed the statement, “I feel a lot smarter now about the way I shop vs. two years ago.” There’s even an air of sport about econ-omizing: 81 percent agreed that “It’s fun to see how much money I can save by using coupons or my shopper loyalty card.”

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