retail news in context, analysis with attitude

…with brief, occasional, italicized and sometimes gratuitous commentary…

• Here’a a story that has sort of been under my radar - Catalina Marketing, founded in 1983 and a mainstay of the supermarket checkout experience as it facilitated the delivery of coupons, has filed for bankruptcy protection.

According to Bloomberg, “The company, which filed for Chapter 11 protection in Delaware, said it has an agreement with over 90 percent of its most senior lenders that would cut its debt by about $1.6 billion. The court-supervised restructuring will allow the business to continue operating while aiming to trim the company’s debt load to around $280 million of secured debt upon emergence, from $1.9 billion, according to court filings.”

The story notes that Catalina, currently owned by a pair of private equity firms, has suffered as “marketing dollars have become scarce, and the company has been shifting its focus to digital apps that zero in on individual users to customize discounts based on their past purchases. It’s also tracking consumer habits for use by retailers and packaged-goods companies, saying it possesses ‘the largest shopper history database in the world’ - a potentially valuable asset for creditors.”


• The Wall Street Journal this morning reports that food manufacturers are “devising more-expensive sizes and flavors” as a way of raising prices at a time when there is significant pressure on them to keep their prices down.

And so, Mondelez International comes up with fudge-dipped Oreo Thins Bites, Hershey develops new stand-up pouches of candy, and Kellogg develops Eggo waffles flavored with imported vanilla - all of which they can charge more for, allowing them to generate greater margins on new items that they can’t get on legacy products.

The Journal writes that “Food makers and grocers are used to tough negotiations over what to charge shoppers. Stores want a tight lid on prices. That said, grocers and other retailers have proven more amenable to higher prices on new flavors or styles of an existing product than to raising prices on familiar packaged foods, whose sales have fallen. Amazon.com Inc. has been pressing brands to rethink their packaging and product varieties to make online sales more profitable.”


• The Atlanta Business Journal reports that Coca-Cola has made an investment in restaurant tech company Omnivore, described as focusing on an "end-to-end suite of solutions" that will “help optimize the digital restaurant experience, such as online ordering, paying at the table, third-party delivery, kiosk/digital menus and analytics. The financing will be used to accelerate current development and growth of proprietary Omnivore products that minimize friction for restaurant brands, third-party technologies, and POS companies.”


Business Insider reports that “in a rare national advisory, the top US public health official warned Americans of the dangers of e-cigarettes like the Juul, a popular device that lets users inhale nicotine vapor without burning tobacco.

“US Surgeon General Jerome Adams said in the advisory on Tuesday that e-cigs like the Juul are a particular danger to kids and teens and called for fresh measures to halt their rising popularity … The advisory singles out Juul multiple times, saying the sleek devices are popular among teens because they're easy to conceal and don't emit much odor. It tells parents, health professionals, and teachers to be on the lookout for all forms of nicotine-delivery devices, including e-cigs.”

And, the special circle of hell, reserved for people who sell this crap to kids in the hope that they get addicted, gets a little larger.


• A survey of attendees at a CEO Summit hosted the Yale School of Management’s Chief Executive Leadership Institute (CELI) revealed that approximately 50 percent of them believe that the US will be in recession by the end of 2019.

There are a lot of other conclusions from the survey, which you can read about here if you’re interested.
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