Economy
02 October 2022
The Week Ahead: Earnings from Levi's and Conagra, Jobs report
Here's a look at what's happening in ecommerce and retail from Oct. 3-7.
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Welcome to a new week, and a new quarter. For retail and ecommerce, it's the kickoff of the biggest three months of the year. The holidays are high time for shopping, bringing opportunities to end the calendar year strong, and forge relationships with new customers for the next one.
This week, Target is kicking off the season early with Deal Days, a discount event held online and in-store from Oct. 6-8.
Here’s a look at what else is coming up this week:
Industry events
DX3 USA: The Canada-born retail, marketing and technology event makes a US debut with a virtual event. Speakers include leaders from Amazon, Boxed, Indochino, Stitch Fix and more. Oct. 3-4
Signed, Sealed, Delivered: Insights into the 2022 Holiday Season: At a virtual event, journalists from Industry Dive covering retail, marketing and more offer perspective on the upcoming holiday season, supply chain disruptions, consumer spending and payment innovation. Oct. 6, 2-4:30 p.m.
Economic Indicators
Jobs are the focus of data being reported by the federal government this week. Following the Federal Reserve’s latest move to increase interest rates, economists will be looking for signs of any softening in what has been a historically tight market. When it comes to consumer spending, low unemployment is typically a positive indicator, since holding a job typically mean a person has more income to spend on goods.
- The Job Openings and Labor Turnover Survey (JOLTs) will provide a view of activity in the labor market for September. Tuesday, Oct. 4, 10 a.m.
- The monthly jobs report from the US Labor Department updates the number of new jobs lost and gained across the economy, as well as the unemployment rate for September. As of August, the unemployment rate stood at 3.7%, the highest since February. Friday, Oct. 7, 8:30 a.m.
- Consumer credit: The Federal Reserve will provide data on consumer credit and household debt for August. Friday, Oct. 7, 3 p.m.
Earnings
The following companies in retail, ecommerce and consumer goods will report quarterly earnings this week:
- Wednesday, Oct. 5: Helen of Troy (owner of Braun, Vicks and oXo)
- Thursday, Oct. 6: Levi Strauss, McCormick & Company, Conagra Brands (owner of Slim Jim, Duncan Hines, Reddi Whip), Constellation Brands (owner of Corona beer, Svedka Vodka).
- Friday, Oct. 7: Tilray Brands
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Marketing
09 June
'There's a lot of ways to frame value'
Campbell Soup Company CEO Mark Clouse offered thoughts on messaging amid inflationary shifts in consumer behavior.
Photo by Kelly Common on Unsplash
After months of elevated inflation and interest rate hikes that have the potential to cool demand, consumers are showing more signs of shifting behavior.
It’s showing up in retail sales data, but there’s also evidence in the observations of the brands responsible for grocery store staples.
The latest example came this week from Campbell Soup Company. CEO Mark Clouse told analysts that the consumer continues to be “resilient” despite continued price increases on food, but found that “consumers are beginning to feel that pressure” as time goes on.
This shows up in the categories they are buying. Overall, Clouse said Campbell sees a shift toward shelf-stable items, and away from more expensive prepared foods.
There is also change in when they make purchases. People are buying more at the beginning of the month. That’s because they are stretching paychecks as long as possible.
These shifts change how the company is communicating with consumers.
Clouse said the changes in behavior are an opportunity to “focus on value within our messaging without necessarily having to chase pricing all the way down.”
“No question that it's important that we protect affordability and that we make that relevant in the categories that we're in," Clouse said. "But I also think there's a lot of ways to frame value in different ways, right?”
A meal cooked with condensed soup may be cheaper than picking up a frozen item or ordering out. Consumers just need a reminder. Even within Campbell’s own portfolio, the company can elevate brands that have more value now, even if they may not always get the limelight.
The open question is whether the shift in behavior will begin to show up in the results of the companies that have raised prices. Campbell’s overall net sales grew 5% for the quarter ended April 30, while gross profit margins held steady around 30%. But the category-level results were more uneven. U.S. soup sales declined 11%, though the company said that was owed to comparisons with the quarter when supply chains reopened a year ago and expressed confidence that the category is seeing a longer-term resurgence as more people cook at home following the pandemic. Snacks, which includes Goldfish and Pepperidge Farm, were up 12% And while net sales increased overall, the amount of products people are buying is declining. Volumes were down 7%.
These are trends happening across the grocery store. Campbell is continuing to compete. It is leading with iconic brands, and a host of different ways to consume them. It is following that up with innovation that makes the products stand out. Then, it is driving home messaging that shows consumers how to fit the products into their lives, and even their tightening spending plans.
Campbell Soup is more than 150 years old, and has seen plenty of difficult economic environments. It is also a different business today, and will continue to evolve. At the end of the day, continued execution is what’s required.
“If it's good food, people are going to buy it, especially if it's a great value,” Clouse said.
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