FINANCE

IBM to acquire DemandTec

BY Katherine Boccaccio

San Mateo, Calif. — IBM and DemandTec announced Thursday that the two companies have entered into a definitive merger agreement for IBM to acquire DemandTec in a deal worth approximately $440 million.

IBM said the acquisition of DemandTec will extend its Smarter Commerce initiative by adding cloud-based price, promotion and other merchandising and marketing analytics to help companies better define the best price points and product mix based on customer buying trends.

“IBM Smarter Commerce is redefining how brands buy, market, sell and service their customers in ways that their customers want,” said Craig Hayman, General Manager of Industry Solutions at IBM. “Bringing science to the art of pricing and promotion is a big part of this strategy, and the combination of DemandTec and IBM will help marketing and sales executives in retail and other industries drive more revenue and increase profitability.”

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OPERATIONS

U.S. consumer confidence holds at recession levels

BY Katherine Boccaccio

Washington, D.C. — A report released Thursday said that consumer confidence in the U.S. was little changed for a second week, holding at a level typically reached during past recessions.

The Bloomberg Consumer Comfort Index was at minus 50.3 in the period ended Dec. 4, after a reading of minus 50.2 the prior week. The gauge has been at minus 50 or worse for 11 of the past 12 weeks.

An unexpected decline in unemployment last month coupled with growing payrolls may be preventing household confidence from sinking even deeper. “Consumer confidence appears to be stabilizing, albeit near historically low levels,” said Joseph Brusuelas, a senior economist at Bloomberg L.P. in New York. “However, that stabilization is quite tenuous.”

The Bloomberg comfort index, which began in December 1985, has averaged minus 46.8 this year compared with minus 45.7 for all of 2010 and minus 47.9 in 2009, the worst full-year reading on record, the report showed.

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OPERATIONS

Consumer report: Holiday retail season starts strong, led by personal electronics

BY Katherine Boccaccio

Yonkers, N.Y. — Despite flagging consumer confidence, December’s Consumer Reports Index, a measure of overall consumer financial health, showed that the holiday season is off to a good start, with excellent activity in November and the prospect of a strong December.

The Past 30-Day Retail Index for December was 13.9, up from 12.4 a year ago, and planned spending for December was also strong at 12.7 compared to 11.8 last year. Among the categories comprising the Retail Index, the largest gains were in personal electronics.

Though there has been no improvement in Consumer Sentiment or in the financial difficulties faced by consumers, overall, measures are fairly stable.

"It may be this relative stability in contrast to the gloom of the past several years, that is causing consumers to cast off the restraint of the seasons gone by and ‘celebrate’ with some serious shopping," said Ed Farrell, director of the Consumer Reports National Research Center.

December’s Consumer Reports Sentiment Index, which measures how consumers are doing financially versus a year ago, was unchanged at 45.4 from 45.0 the prior month.

The Consumer Reports Employment Index declined to 49.6 from 50.6 last month, with past 30-day job losses (5.7%) outpacing job gains (4.9%). This setback reversed three straight periods of an improving employment picture. Households earning $50,000 or more remained in positive territory (over 50), while those in households earning less than $50,000 lost ground (49.0).

Taking a closer look at the categories comprising the Consumer Reports Past 30-Day Retail Index, the gain in November spending was the result of an increase in personal electronics (31.4%), up from 21.2% last month.

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