FINANCE

Starbucks to pay $2.3 billion to Kraft

BY Staff Writer

New York — Starbucks Coffee Company said it would pay Kraft Foods $2.79 billion to settle a dispute over the coffee-shop chain’s bagged-coffee business.

The payment, ordered by an arbitrator, consists of $2.23 billion in damages and $557 million in interest and attorneys’ fees. The company said it has adequate liquidity, both in the form of cash on hand and borrowing capacity, to fund the payment and will book it as a charge to its fiscal 2013 operating expenses.

Starbucks’ dispute with Kraft began in March 2011, when Starbucks prematurely scrapped a contract with Kraft that permitted Kraft to sell bagged Starbucks coffee in grocery stores.

Starbucks left little doubt it did not agree with the outcome.

"We strongly disagree with the arbitrator’s conclusion," said Troy Alstead, CFO, Starbucks, in a statement. "We believe Kraft did not deliver on its responsibilities to our brand under the agreement."

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MARKETING/SOCIAL MEDIA

PlayNetwork to provide music to Levi’s in 1,500 stores worldwide

BY Marianne Wilson

Seattle — PlayNetwork, a leader in branded entertainment media experiences, announced it is providing music programming and installing state-of-the-art media systems for the Levi’s brand in 1,500 stores around the globe, including all U.S. locations.

"The songs we chose for Levi’s embody the brand’s pioneering spirit and push its rich cultural heritage even further," said Spencer Manio, PlayNetwork’s lead senior music supervisor for Levi’s. "The music you’ll hear ranges from 1940s blues to 1990s garage bands to up-and-coming artists, but each song was specifically chosen to create an emotional connection between Levi’s and its fans."

Levi’s has a long-standing reputation for aligning itself with progressive artists, ideas, and cultural movements. The company has also used music in their marketing and advertising strategy to connect with people in new and surprising ways.

To develop a new program that continues that legacy, PlayNetwork immersed itself in the Levi’s brand, decoding all aesthetic facets from design, texture, lighting, decor, energy, color, and overall experience of the retail stores. This process, paired with PlayNetwork’s music industry knowledge and relationships with leading media labels, helped create a program that is already resonating with customers.

“I’ve heard people say that they can’t leave the store yet because they’re waiting to hear what song will play next," said Chad Hinson, senior director of global brand creative at Levi’s. "Together, the Levi’s Global Brand Environment team and PlayNetwork have created music programs that are hopefully turning people on to new music, as well as re-familiarizing them with timeless classics."


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NRF: Holiday gift card spending to reach all-time high

BY Marianne Wilson

Washington, D.C. – Eight-in-10 (80.6%) shoppers will purchase gift cards this holiday season, according to the National Retail Federation’s Gift Card Spending Survey conducted by Prosper Insights & Analytics. Holiday shoppers will spend an average of $163.16 on gift cards, up 4.0% over the $156.86 they spent last year and the highest amount in the survey’s 11-year history. Total spending on gift cards will reach $29.8 billion.

Consumers will also spend more on the cards they buy: those planning to buy gift cards will spend an average $45.16 per card, up from $43.75 last year and another survey high.

Shoppers older than 65 years old will spend the most on gift cards at an average of $175.96, followed by 35-44 year olds who will spend $171.15 on average. Additionally, men will spend nearly $20 more than women on gift cards this holiday season ($171.35 versus $155.42 respectively).

Department stores (40.3%) and restaurants (34.2%) will be the top choices for those giving gift cards.

Additionally, 20.1% will purchase gift cards from an electronic store and 12.7% will head to an online merchant. With gas prices hovering around $3.19, some may see relief at the pump this holiday season from their friends or family members.

According to the survey, 12% of shoppers will buy gift cards from gas stations, up from 11% last year and the highest amount seen in five years.


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