FINANCE

PwC: CPG retailers and providers use IT to connect with customers

BY Dan Berthiaume

Washington, D.C. — Retailers and consumer packaged goods (CPG) companies are increasingly using technology to better connect with customers and drive profits, according to a new study from the Grocery Manufacturers Association and PwC US.

Results of “Growth Strategies: Unlocking the Power of the Consumer” indicate that despite generally slowing retail net sales growth in 2012, food, beverage and household products companies experienced positive net sales growth of 7%t, 5.5% and 3.2%, respectively.

Specific findings relating to how CPG retailers and providers are leveraging technology to reach consumers include:

  • In 2013, more than 40% of CPG companies expect to sell products directly to consumers, up from 24% in 2012.
  • Fifty-two percent of U.S. consumers are already buying directly online from brands they trust.
  • Top-performing companies in the CPG sector achieve success by identifying their consumers, engaging with them and focusing on innovation that directly reaches them.

"Both the U.S. and global economies are marginally stronger than they were last year, and the continued slow recovery has led to correspondingly modest growth for the CPG industry," said Lisa Feigen Dugal, PwC’s North American advisory leader, retail and consumer industry. "To drive profitability, providing consumers with the core product may not be enough. Today’s consumers want solutions, they want experiences and value. CPG’s and retailers can address this emergence through social media, innovation and direct-to-consumer channels, which will help them understand the wants, needs and values of their consumers."

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FINANCE

Burlington Coat Factory stays cool during Q1

BY Staff Writer

Burlington, N.J. — Burlington Coat Factory credited the unusually cold winter experienced by many parts of the country, which dampened the first quarter results of many retailers, for helping to drive its strong financial performance during the first quarter.

The retailer reported net income of $11.1 million, a substantial improvement from $842,000 in the first quarter of the prior year, primarily driven by sales growth and improved gross margin rate which was in turn partially offset by increased selling and administrative expenses.

Meanwhile, net sales increased 8.4% to roughly $1.1 billion, compared to $982 million the previous year. Same-store sales increased 3.4%.

“We are very pleased with our $10.3 million increase in adjusted net Income during the quarter, which was driven by our 8.4% overall sales growth and, most important, our 3.4% comparative store sales increase,” said Tom Kingsbury, president and CEO of Burlington Coat Factory. “We continue to stay focused on delivering more fresh values to our customers on a daily basis.

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OPERATIONS

Starbucks counts calories

BY Dan Berthiaume

Seattle — Starbucks Coffee Company will start including calorie information on menu boards in all U.S.-based corporate and licensed stores on June 25. The retailer will post calorie counts to accompany each beverage listed on the menu boards, as well as on tags to accompany food in the bakery case. All calorie counts will reflect the item as made by standard recipe and will not include potential extra calories resulting from whipped cream, different types of milk or sweetener, or other customer options.

“Menu-labeling is yet another step to extend our commitment to wellness, ensuring our customers and partners (employees) have the information they need to make informed decisions and understand all the ways that they can customize their Starbucks beverages to be within their desired calorie range,” said Mary Wagner, senior VP of global R&D at Starbucks.

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