Wednesday, September 17, 2008
Thom Forbes, September 17, 2008, 10:00 AM
  • Private Labels Lift Kroger Profit The Wall Street Journal

    Kroger -- which operates more than 2,400 supermarkets under banners such as Smith's and King Soopers -- says sales of store brands accounted for a record 26% of its grocery revenue in the quarter. Store brands are generally cheaper than national brands but carry higher profit margins for grocers.

    "In this economy, customers are much more willing to try a private-label item, and we're seeing signs that this is happening more and more as the year progresses," says Kroger CEO David Dillon. Kroger posted a 3.4% increase in its fiscal second-quarter profit.

    In another sign of how the weak economy is changing shoppers' behavior, Kroger has experienced "noticeable improvement" in sales at its discount-oriented stores, such as Food 4 Less, in the past three to six months. Dillon also believes Kroger sales are getting a boost from shoppers deciding to eat more meals at home, a trend that has prompted some casual-dining chains to file for bankruptcy-court protection in recent months. Read the whole story...

  • Dell's Stock Plummets As Business Model Runs Out Of Steam Austin American-Statesman

    Dell's stock price fell to levels it hasn't seen in more than a decade Tuesday -- a fresh reminder of the growing pains that the company faces as it expands beyond Michael Dell's innovative direct model.

    A decade ago, the business model and the company were darlings of Wall Street but the model has run out of steam in the past three years, largely because of the rising popularity of notebook computers and increasing sales to home users and customers in emerging markets such as China and India.

    Those new growth engines of the PC industry have lessened the advantage of Dell's build-to-order, quick-delivery operation, and they have forced the company to reshape its model into one that more and more resembles the way its rivals go about their business. Computer makers are in a fight to see which company can better execute on the details.

    "A couple years ago, you might have said [Hewlett-Packard] has no competitive advantage in PCs because they can't direct-build like Dell does," said Louis Miscioscia, an analyst at Cowen and Co., a research firm and investment bank. "But the market has changed." Read the whole story...

  • DeGeneres Will Pitch For CoverGirl Ad Age

    Confirming a deal that was rumored in the New York Post last week, Ellen DeGeneres says that she will be the new face of CoverGirl cosmetics. She will first appear in campaign for the Procter & Gamble brand breaking in the January issue of Us Weekly. She joins a high-powered lineup of pitchwomen for the brand that includes Rihanna, Drew Barrymore and Queen Latifah.

    "I am here to set the record straight right now," Degeneres said on her syndicated TV show Tuesday. "I am the new face of CoverGirl." She went on to do some mock poses as a model and to air some behind-the-scenes footage from a CoverGirl shoot.

    After initially declining to confirm or deny DeGeneres' upcoming role with the brand a week ago, P&G sprang into action quickly, highlighting today's announcement on the home page of its web site and sending out a text-message blast urging people who've signed up to receive news on the campaign to watch the show. Read the whole story...

  • At Zappos, Employees Who Don't Buy In Can Cash Out Business Week

    Billion-dollar e-tailer Zappos's breathless pursuit of the ultimate customer experience is the stuff of legend. It offers extremely fast shipping at no cost and will cover the return shipping if you are dissatisfied for any reason at any time. Customer service reps are given a lot of leeway to make sure every customer is an enthusiastic customer.

    When Zappos hires new employees, it puts them through an intensive four-week training program, immersing them in the company's culture, strategy, and processes. Then, about one week in, Zappos makes what it calls "The Offer," telling newbies: "If you quit today, we will pay you for the amount of time you have worked, plus a $2,000 bonus." Only 2% to 3% take the offer.

    Zappos is acting on the understanding that the character of a company can be the most powerful yet most difficult competitive advantage to develop and maintain. "The Offer" suggests a rare company that believes if you really want to amaze your customers, a great way to start is to amaze your employees and inspire them to amaze everyone who comes in contact with your enterprise. Read the whole story...

  • Lévy Sees New Revenue Sources For Music Business Financial Times

    Vivendi CEO Jean Bernard Lévy believes his group will soon see strong revenue growth from its Universal Music Group division -- home of Amy Winehouse, Metallica and McFly -- thanks to new means of raising money from the sale of music. He cites Nokia's plan to charge a premium for handsets that include its Comes With Music service that allows consumers to download unlimited music tracks to their handset for a year.

    Other innovations with potential to increase revenue included possible future deals with companies such as Apple as well as existing arrangements with the social networking site MySpace, announced last spring.

    Until now, the decline of CD sales in the face of an upsurge of digital downloading, mostly illicit, had led to a decline in global recorded music sales from $36.9 billion in 2000 to $29.9 billion last year. In a recent speech, new media expert Clay Shirky described the music industry as "the skull on a pikestaff as a warning to others about how not to deal with the Internet." Read the whole story...

  • FDA Bans Imports Of 28 Indian-Made Generic Drugs The Washington Post

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  • Home Depot Hopes Price Cuts Repair Image MSNBC/AP

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  • Reebok Joins Race Against Nike For Women's Market Brand Republic

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