IGA Nielsen Perspective

Learn What You Can Expect from the Back to School Selling Season

A message to IGA Retailers from...
The Nielsen Company
Kathy Tyburowski
Nielsen Client Service Manager for IGA

With American consumer confidence seemingly stuck in neutral, the back to school season can offer an insightful view into the state of consumer spending, as well as a precursor to what retailers can expect for the upcoming holiday season. While many consumers view back to school shopping as required rather than discretionary spending, Nielsen is predicting only an extremely modest sales increase for this year's Back to School season—a sure sign that U.S. consumers are still feeling the weight of a stubbornly weak labor market.

Our forecasts see a modest increase in dollar sales on Back to School items—up 1.7 percent to $2.6 billion—with unit sales projected to drop. All findings point to one thing: Retailers who offer strong discounts and appeal to consumers' desire for savings and value will be this year's Back to School winners.

Check out the study guide below to learn what you can expect from the Back to School selling season:

• Critical Season for Retailers: The July to September Back to School season is important for the office/school supply category, generating nearly 40 percent of annual dollar sales and more than 50 percent of annual unit sales for the $7 billion office/school supply category.
• Units on the Decline: Nielsen forecasts Back to School unit sales for the office/school supply category to drop 5.25 percent to 1.04 billion.
• Early Shoppers: Many prices for Back to School items are up in 2010 compared to 2009. Nielsen's research shows that the lowest prices will be available to shoppers in July (down 55 percent) and August (down 50 percent).
• Bring Me Some Water: Nielsen forecasts bottled water, a related Back to School category, to grow 3.57 percent on a dollar basis, outpacing juice sales.
• Back to School Winners: Gains are expected for supercenters, dollar stores, drug stores, and to a lesser extent, club and grocery stores.

Please don't hesitate to contact me with any questions about this or any other seasonal selling opportunity.

Thanks,

Kathy Tyburowski
Kathy.Tyburowski@nielsen.com

Retail News

Dean Foods Co. is seeing differences in weekly milk buying trends for the first time in 30 years, with sales spiking at the beginning of the month but trailing off by the end of the month when some households reportedly run out of money, reported The Dallas Morning News. Full Story (Free Registration Required)

Whole Foods Market plans to open about 48 stores through 2014. Full Story

Fresh & Easy Neighborhood Market was No. 2 on the STORES Hot 100 Retailers report. Amazon.com ranked No. 6, CVS Caremark is No. 11 and Dollar General is No. 13. Full Story, Full List

Starbucks VIA Ready Brew reached $100 million in global sales, and accounts for approximately 30% of market share in the premium single serve/pod category. Starbucks anticipates the number of non-Starbucks stores carrying VIA will increase by approximately 3,000 by the end of fiscal year 2011, bringing the total points of distribution to about 40,000 locations nationwide. Full Story

Landshire Inc. will be the primary packaged sandwich company for all of the approximately 600 ExxonMobil-owned and -operated convenience stores across the U.S., reported CSP Daily News. Full Story

Wal-Mart Stores is scouring the Sacramento area for places it could try out a new concept for smaller discount stores selling only supermarket fare, according to real estate sources, reported The Sacramento Bee. Full Story (Free Registration Required)

Alimentation Couche-Tard Inc.'s increased tender offer for Casey's General Stores Inc. is garnering less support from shareholders, due to a "Dutch action" recapitalization plan, The Wall Street Journal reported, citing an analyst who follows Couche-Tard, reported Convenience Store News. Full Story

Three new Weis Markets stores will incorporate technologies and systems reducing store refrigerant charges (usage) to 50% less than a typical supermarket. Full Story

Executives on the Move: Jones Soda Co. named Mike Spear Marketing Director. Full Story ... Mi Pueblo Food Centers named Rich Donckers president, reported Supermarket News. Full Story

Manufacturer News

Smucker's sales increased from $632 million in fiscal year 2000 to $4.6 billion in 2010 and profits grew more than 10-fold, from $36 million to $494 million. Coffee has become the company's biggest segment. Looking ahead, Smucker projects sales growth of about 6% a year, roughly half from existing brands and half from acquisitions. More deals are likely, reported CNNMoney.com. Full Story, Full Release

FPL Food LLC will open a facility in South Carolina's Lexington County. Full Story

PepsiCo's Cheetos generates about $4 billion in annual retail sales around the world. Meanwhile, Wise Foods produces 15 million-lbs. of Cheez Doodles annually. Herr Foods' Nottingham, PA-based plant manufacturers about 1,200-lbs. of Cheese Curls each hour, reported The New York Times on the Web. Full Story (Free Registration Required)

Coffee companies are searching for ways to make the packaging of single use coffee pods greener, including more use of biodegradable packaging, programs to recycle the pods or making the coffee filters themselves reusable, reported The New York Times on the Web. Full Story (Free Registration Required)

New Product News: Comax is releasing several Greek yogurt flavors, reported Food Navigator USA. Full Story ... Agri Beef Co.'s Snake River Farms brand introduced a four-item sausage line made from Berkshire/Kurobuta pork, reported Meat & Poultry. Full Story (Free Registration Required) ... Kalsec introduced a black carrot extract, reported Food Navigator. Full Story

Somersault Snack Co.'s sunflower seed-based Somersaults will be distributed in all 469 Caribou Coffee Company locations. Full Story

Sharpie will introduce Liquid Pencils in September. Full Story

Foodservice News

Tasti D-Lite will roll out breakfast at all of its locations by this fall. Currently available in 50 outlets, products offered include parfaits, fresh-baked goods and hot granola, as well as a line of hot beverages, including coffee, tea and hot chocolate, reported Nation's Restaurant News. Full Story (Free Registration Required)

Extreme Pita plans to enter the St. Louis market with local franchisees by the end of the year. Eventually, the company wants to open 15 local shops, reported St. Louis Business Journal. Full Story (Free Registration Required)

Fazoli's is planning a St. Louis-area expansion of up to seven new company-owned restaurants. The company is also completing a $450,000 conversion to a new design at all of its current St. Louis-area restaurants, which includes meals delivered to tables and the use of plates, silverware and glassware, reported St. Louis Business Journal. Full Story (Free Registration Required)

Chicago-area families eat dinner together at home five nights per week, according to a Tribune/WGN poll, reported Chicago Tribune. Full Story (Free Registration Required)

Jamba, Inc. sold seven restaurants in Las Vegas, NV to Fine Concepts, LLC CEO Jeffrey Fine, a multi-concept owner and operator of stores throughout the Las Vegas Valley. The agreement includes a commitment to expand the Jamba Juice brand by developing eight additional stores in the Las Vegas market, with expansion into non-traditional venues like casinos. Full Story

Health News

Nine states reported an obesity prevalence of 30% or more, tripling between 2007 and 2009, according to a CDC Vital Signs report. The report also finds no state met the nation's Healthy People 2010 goal to lower obesity prevalence to 15%, with data showing a 1.1% increase, or an additional 2.4 million people, in the self-reported prevalence of obesity among adults aged 18 and over. Full Story

Washington News

USDA is proposing to establish definitions for the terms "common cultivar" and "common food crop" in response to recent amendments to the Lacey Act. The amendments expanded its protections to a broader range of plant species, extended its reach to encompass products that derive from illegally harvested plants and require that importers submit a declaration at the time of importation for certain plants and plant products. USDA will also provide guidance in the form of a list of examples of plant taxa or commodities that qualify for exemption from the provisions of the Act as common cultivars and common food crops. Full Notice

The House Committee on Energy and Commerce and its Subcommittee on Oversight and Investigations launched an investigation into the Kellogg Company, reported Food Production Daily. Full Story

In an action initiated by FDA, the U.S. Department of Justice is seeking a permanent injunction against NY Gourmet Salads, Inc. and Leonard F. Spada, the company's president. The complaint charges the defendants with violating the Federal Food, Drug, and Cosmetic Act. Full Story

The National Confectioners Association favors voluntary listing of calories front-of-pack rather than introducing a scale or rating system, and urged FDA to take into account "confectionery-specific issues," reported Food Navigator USA. Full Story

California organic almond producers can move ahead with their challenge to federal requirements that they pasteurize or chemically treat their crop, according to an appellate court ruling, reported The Fresno Bee. Full Story

FNS is inviting comments on a proposed information collection, "In-Depth Case Studies of Advanced Supplemental Nutrition Assistance Program (SNAP) Modernization Initiatives," and is a revision of a currently approved data collection entitled "Enhancing Food Stamp Certification: Food Stamp Modernization Efforts." This data collection will allow for the analyses of the potential impact of advanced modernization efforts on program outcomes in selected states. Full Notice

APHIS is adding new approved phytosanitary treatment schedules to the Plant Protection and Quarantine Treatment Manual for sweet cherries imported from Australia into the U.S., and adding a new approved irradiation dose for Mediterranean fruit fly of 100 gray to the treatment manual. Full Notice

Ugo. DiLullo & Sons issued a voluntary recall of approximately 148,000-lbs. of canned meatball products because the products have the potential to contain undeclared egg. Full Story

Global News

Archer Daniels Midland Company will construct a soybean plant in Paraguay with an anticipated daily crush capacity of 3,300 metric tons, increasing its South American oilseed crush capacity by more than 25%. Construction is expected to be complete in 2012. Full Story

PepsiCo, Inc. will invest $3 million over the next three years to create the Agricultural Development Center of Peru, which will focus on the development of new varieties of potatoes and other tubers and roots. Full Story

The UK's Department for Business will bring forward new legislation to set up the Groceries Code Adjudicator (GCA), which will reside within the Office of Fair Trading. The GCA will have the power to receive complaints about the way supermarkets interact with their primary suppliers from anyone in the supply chain at home or overseas, and deal with them anonymously. Full Story

Kellogg's will reduce the sugar content in a range of its cereals by 15% in the UK, reported BBC News. Full Story

UK food processors and supermarkets should voluntarily do more to improve country-of-origin labeling on food products, stated Jim Paice, Minister of State at the Department for Environment, Food and Rural Affairs, reported Meat & Poultry. Full Story (Free Registration Required)

The UK's Food Standards Agency is investigating reports that products from the offspring of cloned animals entered the UK food chain. Full Story

Market News

M&M Produce Inc. will build a new tomato facility at the Connecticut Regional Produce Market, reported The Produce News. Full Story

Heat is accelerating the pace of the Eastern apple deals, and drought could affect sizing and heat coloring in some areas, reported The Packer Online. Full Story (Subscription Required)

Olive growers in California expect a near record crop this year. The California Olive Committee estimates farmers will pick almost 92 million tons of olives. That would be four times the amount harvested last year, which was the second lowest production in history, reported California Farm Bureau.

A late start to California grape deals could mean huge volumes later this summer. Chuck Olsen Co. began shipping flames and summer royals July 26, about three weeks later than normal. The company reported good color, high sugar levels, good flavor and a normal mix of sizes, reported The Packer Online. Full Story (Subscription Required)

The number of days that reached freezing temperatures in Florida significantly increased over time in five of the seven biogeographic regions, claims a study published in PLoS ONE. Full Study

RMA submitted an information collection requirement to the Office of Management and Budget for review and clearance, intending to collect information for purposes of the development of risk management tools to analyze producer risks associated with the employment of seasonal labor in three Florida selected specialty crops: citrus, tomatoes and strawberries. Full Notice

New Leaf Food Safety Solutions LLC developed SmartWash, a food wash solution, reported The Produce News. Full Story

An EPA regulation established tolerances for residues of halosulfuron-methyl in or on multiple commodities, and removes the existing tolerance on bean, snap, succulent at 0.05 parts per million (ppm), superseded by the tolerance of 0.05 ppm on pea and bean, succulent shelled, subgroup 6B. Full Notice