retail news in context, analysis with attitude

• The New York Times this morning reports on how retailers “are playing a multiples game to entice shoppers to buy more than their shopping lists dictate. The old gimmick — buy one, get one free — has been expanded to include some pricing equations worthy of Isaac Newton, or at least of middle-school math class.

“Using buying patterns detected from loyalty cards, receipts and other research, grocery chains are searching for the multiples sweet spot: The current Pathmark circular advertises Bush’s baked beans at three for $5 and Yoplait yogurt at 10 for $6. At Cub Foods, Sprite 12-packs are on sale at three for $11.97. Kroger has lemonade, socks and Kroger gummi bears candy on sale at 10 for $10.”

The story goes on: “Grocery stores have always offered deals, of course. But grocery chain executives say that in this economy, with people visiting stores less frequently, spending less per trip and sticking to their shopping lists more closely, the competition to offer compelling deals is stronger than ever.”

• The National Grocers Association (NGA), in public comments filed with the Federal Trade Commission (FTC) on July 13, 2011, requested the withdrawal of the Interagency Working Group's Proposed Nutritional Principles and limits on food marketing.  Peter J. Larkin, President and CEO of the National Grocers Association said, "This is just another example of unnecessary regulatory overreach at a time when the food industry has taken giant steps in providing consumers with nutritional information and healthy food choices."

The comments come as coalition of food companies, including General Mills, ConAgra Foods and Kellogg, is proposing new advertising standards that will result in a further reduction in advertising of so-called “unhealthy foods” to children, a move is seen as an effort to avert the imposition of mandated guidelines by the federal government.

• The National Grocers Association (NGA) also announced that the inaugural NGA Sales, Operations and Profitability (SOP) Conference, scheduled to take place at the Broadmoor Hotel in Colorado Springs, August 20-21 has been postponed. 
 
"While we have received very positive feedback about the conference program, we were also hearing from members about late summer vacation plans, difficulty justifying travel to Colorado Springs for a day and a half event and several business related conflicts that were limiting our ability to meet the minimum attendance threshold required for us to conduct the event" said Peter Larkin, N.G.A. President and CEO. "NGA and our Board of Directors felt it would be best if we postponed the event until we were able to build an adequate audience for the talented speakers and panelists lined up to talk about key issues facing independent grocers in today's competitive environment."

The conference may be rescheduled as a stand-alone event later in the year or a decision could be made to fold the SOP conference content into The N.G.A. Show in Las Vegas next February 12-15, 2012.

• The Wall Street Journal reports that Ralcorp Holdings “is splitting up its Post Foods cereal and private-label food businesses, throwing a curveball into ConAgra Foods Inc.'s attempt to buy the entire company.

“Ralcorp late Thursday disclosed a proposed tax-free spin-off into two publicly traded companies owned by Ralcorp's current shareholders.

“The transaction is structured to avoid a big tax bill for Ralcorp. Selling Post Foods could have resulted in a tax bill of up to $1 billion, a person familiar with the matter said, so Ralcorp never put the business up for sale ... The move comes as ConAgra has a $4.9 billion offer to buy Ralcorp in its entirety on the table. Ralcorp rejected the offer in May. Aside from reiterating its interest last month, ConAgra hasn't countered with another offer.”
KC's View: