Contributing Member of the Consumer Goods & Services Councils

GLG News by this Author

PEPSI OFFER TO BUY ALL SHARES OF 2 MAIN BOTTLERS GREAT FOR PEPSI

April 21, 2009

Analysis of:Pepsi Offers to Buy All Shares of 2 Main Bottlers | www.nytimes.com

Pepsi's offer will help it have more control over what ultimately will end up on shelf. Pepsi will have consistency of product variety more closely lined to trends. Pepsi will be able to leverage advertising spend across U.S

It's easy to be scrooge on this years Christmas retail expectations.

November 5, 2007

Analysis of:Why Fed Cut Won't Save Christmas | money.cnn.com

Retail sales only chance this Christmas selling season is inflation.  Costs are rising at such a fast rate retailers are stumbling over eaxh other to raise prices and maintain commitments to the street.  Commoditiy cost across the board have gone up.  Weather alone across different sections of the States can be blamed.  Bush administration policy on Ethanol is driving corn prices through the roof leading to increases in corn, feed for cattle and gas itself.  Energy speculation on war pressures is driving the cost of home heating oil through the roof.  If a consumer has to pay more to drive with a gallon of gas, or drink a gallon of milk,  somewhere something has to give.  This year it will be less giving which will correlate to slower retail sales for this Christmas.

Walmart will not drive down banking costs.

November 1, 2007

Analysis of:At Wal-Mart, a Back Door Into Banking | www.nytimes.com

Walmarts attempted  entry into banking was strategic as they usually are.  They send up trial balloons to get resistance and craft their plan of attack to dominate any category they enter. Using the example of grocery retail, grocers have realized they cannot compete with Walmart on price because of Walmarts scale.  Grocery retailers have the actually acquiesced some categories to Walmart and figured out any sales they receive will be at a higher margin which has been a good business decision. Therefore prices do not go down in the Walmart world, they actually go up except for the top 20% of each item that is consequently priced for competition. The other 80% goes up. As far as being a threat, that is real.  The real threat is that Walmart will directly affect something that financial service industry has traditionally made very high margins on.  The financial services then must raise prices on other products to make up for lost margin in the area Walmart is trying to compete.

"Cost Push" s fundamental to Inflation in Consumer Product Industry.

November 1, 2007

Analysis of:Kellogg's downgraded by Citigroup | www.marketwatch.com

Ingredient cost have been rising for several years now in Consumer products.  We have seen natural disasters, weather, and government policy( corn/ehtanol)  dictate inflationary pressure on cost of goods. Companies have done all they can to take other costs out of the system before passing on increase in costs to customers/consumers. There is no room left.  The continued pressure on price will cause prices to go up and then on a macro scale will cause trade/ consumer spending to go down. It is this scenario that will allow companies to maintain bottom lines. Any significant deviation in either of these areas will result in CPG companies bottom lines to be negatively affected by rising commodity costs.

Macy's and Tommy is WIN/WIN!

November 1, 2007

Analysis of:MACY'S AND TOMMY HILFIGER SIGN STRATEGIC ALLIANCE AGREEMENT | www.retail-merchandiser.com

Any time you can expand your brand it is a good short term benefit to sales as well as your bottom line.  That is exactly what the agreement between Tommy Hilfiger and Macy's does.  The immediate implications then become an increase in sales and market share, therefore there is no reason it shouldn't be done.       The key is what was the cost of the agreement.  If it is not excessive it will allow Tommy the benefit of increased critical mass against their base in all measurable categories important to Wall Street.      Again if not excessive they can continue to pursue present marketing strategies as well as new ones in mass media and the Macy's stores themselves.  It is truly win/win. 

The imact of consoidations in the beer industry is bad for consumers.

October 25, 2007

Analysis of:Why Consolidation Storm is Brewing in Beer Industry | online.wsj.com

First of all beer giants such as Bud, Coors and Miller Light are beginning to seriously feel the effects of the smaller brewers.  They are impacting the sales growth of the major brands, therebye impacting profits. Secondly the consolidations will affect quality much like Chryslers aquisition of Mercedes Benz.  Its just not the same high quality vehicle anymore. Thirdly, once completed the aquistions will drive the price up to consumers as these giants know price elasticity better than anyone and will make consumers pay a premium to buy smaller successsful brands or trade back to traditonal brands.   

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