Denton Record-Chronicle (Denton, Tex.), Vol. 111, No. 127, Ed. 1 Sunday, December 7, 2014 Page: 37 of 44
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Denton Record-Chronicle
BUSINESS
Sunday, December 7, 2014
3D
Seasonal flavors bring sales boon
Ted S. Warren/AP
A sign at a Starbucks store advertises the 30th anniversary of Starbucks’ Christmas Blend coffee, in Seattle on Nov. 24. Starbucks is one of many businesses
that roll out a number of limited-time flavors around the holidays.
NEW YORK (AP) - lisa
Hanock-Jasie turns into a coffee
fiend during the holidays, main-
ly because she loves the pepper-
mint lattes.
“I love the warmth of the cup
in my hand, the aroma just
makes me feel happy and calm
and good,” said Hanock-Jasie, a
59-year-old resident of New
York City. “It makes you feel
warm and fuzzy inside.”
Those kinds of emotions
have turned the last few months
of the year into a flavor derby,
with companies putting ever-ex-
panding variations of cinna-
mon, gingerbread and pepper-
mint in everything from pump-
kin pie ChapStick to pepper-
mint Pringles.
It’s not just snacks and
drinks, either. Candles, lip balms
and lotions let you literally bathe
in holiday spirit — or at least
smell like you did.
Consider the proliferation of
pumpkin spice products, now as
much a sign of fall as college
football and the leaves turning
color. According to the industry
tracker Technomic, there were
199 pumpkin-flavored items at
the country’s 500 biggest restau-
rant and coffee chains this fall.
That’s up 58 percent from the
126 just two years ago.
Limited-time flavors are a
proven way to attract customers
throughout the year, of course;
the McRib likely wouldn’t have
its mythical status if it were a fix-
ture on McDonald’s menu. But
flavors like candy cane and gin-
gerbread are particularly popu-
lar because of the power that
scents and flavors have to evoke
time spent with loved ones.
“It’s about the emotions it
triggers,” said Tawana Burnett,
senior marketing director for
ChapStick, which this year in-
troduced a pumpkin pie flavor
for the holidays, in addition to its
candy cane variety.
Companies don’t disclose ex-
actly how much seasonal offer-
ings drive sales, but the prolifer-
ation is an indicator of how in-
dispensable they’ve become to
stay competitive. For some
shoppers, that peppermint mo-
cha (don’t forget the red cup) or
gingerbread cake can become its
own tradition.
Starbucks, for instance,
planned to make its eggnog
latte, which was introduced in
1986, available only in the
Northwest this year. But after an
outpouring of complaints by
customers in other parts of the
country, the coffee chain decided
to make it available nationally.
A drawback of that kind of
success is the imitation it invites.
Starbucks CEO Howard Schultz
has noted the popularity of the
chain’s Pumpkin Spice Latte
since its introduction in 2003
has helped spawn a new catego-
ry-
Last year, even McDonald’s
joined the ranks of chains offer-
ing a pumpkin spice drink.
As such, companies are try-
ing to stand out with new flavors
or twists on traditional offerings.
This year, Starbucks intro-
duced a Chestnut Praline latte,
bringing its number of holiday
drinks up to five — the most ev-
er. IHOP is introducing Pump-
kin Cheesecake and Caramel
Bon Bon pancakes, as well as
bringing back its Raspberry
White Chocolate Chip pancakes.
Dunkin’ Donuts is offering
Sugar Cookie and Snickerdoo-
dle Cookie lattes, in addition to
Peppermint Mocha. John Cos-
tello, president of global market-
ing and innovation at Dunkin’
Brands, said it’s a way to keep
the chain “top of mind during a
hectic holiday season.”
The need to come up with
new flavors also speaks to the
seemingly endless appetite for
different tastes.
“It’s an overall trend around
the sophistication of palates.
[People] are more accepting of
different flavors and different
flavor combinations,” said Mark
Miller, who heads the Pringles
business at Kellogg.
It’s why Pringles introduced
three seasonal flavors in 2012,
including White Chocolate Pep-
permint.
They were so popular Prin-
gles expanded to five flavors this
year, including Milk Chocolate
and Tortilla Cinnamon Sugar.
The thought of such flavors
on chips might make some gag,
but Miller said they’re meant in
part to be a conversation piece.
“Especially around the holi-
days, consumers are expecting a
whole lot of fun,” he said.
Four retailers could use some holiday cheer
Damian Dovarganes/AP file photo
A man dressed as Santa Claus greets shoppers outside the J.C. Penney store at the Glendale
Galleria shopping mall in Glendale, Calif., on Nov. 28.
By Anne D’linnocenzio
AP Retail Writer
NEW YORK - The holiday
shopping season is always a
make-or-break period for strug-
gling retailers.
But this year, the fight to grab
shoppers has intensified, mak-
ing it difficult for stores to use
the season that accounts for
about 20 percent of the retail in-
dustry’s annual sales to bounce
back.
Stores face cautious shoppers
who are juggling stagnant wages
and higher costs for food and
health care. And Web-sawy cus-
tomers are using information
easily available on their smart-
phones to hold out for ever-bet-
ter deals. All of that means that
stores have had to discount
more — and earlier — this holi-
day shopping season.
“If you’re a retailer on the
edge, it’s harder to maintain
your viability and return to prof-
itability because of the intense
promotional environment,” said
Ken Perkins, president of Retail-
Metrics LLC, a retail research
firm.
He expects fourth-quarter
earnings for the 123 retailers he
tracks will rise 7.7 percent, down
from a projected 16 percent in-
crease in June.
Here, four retailers with
years of sales declines that could
use a good holiday season:
Sears Holdings Corp.
The problems: The Hoff-
man, Illinois-based company,
which operates Kmart and
Sears, has been struggling for
years as it faces increasingly stiff
competition from Wal-Mart,
Target and Home Depot. Critics
say Sears has failed to update
shabby and tired stores.
Billionaire hedge fund man-
ager Edward Lampert, now
chairman and CEO, combined
Sears and Kmart in 2005, about
two years after he helped bring
Kmart out of bankruptcy. But
that merger hasn’t been success-
ful, and the company’s financial
results keep worsening.
The company on Thursday
said its revenue fell 13 percent in
the third quarter. In the first
three quarters of the year, Sears
has lost $1.6 billion.
It’s on track to lose money for
four straight years and record
eight straight years of falling rev-
enue when it reports its annual
results early next year.
The fix: To raise money,
Lampert is dosing weak stores,
cutting inventory and selling as-
sets to raise cash to keep the com-
pany afloat Year-to-date, the
company has dosed 129 stores
and for the full year it expects to
dose a total of 235 stores. That’s
resulting in several thousand job
cuts. At the same time, Sears says
it is shifting its focus from run-
ning a store network to operating
an online and offline business tied
together by its Shop Your Way
loyalty program
The prospects: Brian Sozzi,
CEO and chief equities strate-
gies at Belus Capital Advisors,
says crowds at both chains were
thin over the Thanksgiving
weekend. And the latest third-
quarter results will likely make it
critical for Sears to keep selling
assets and stores to prop up its
operations.
Sozzi believes that by 2017,
the company will operate about
900 stores, half its current size.
The financial maneuvers “are
basically enabling [Sears] to
tread water on the operating
losses,” said Everscore ISI’s Greg
Melich.
Radioshack Corp.
The problems: Long
known as a destination for bat-
teries and obscure electronic
parts, RadioShack’s problem
has been that the functions of so
many products it sold have been
taken up by smartphones.
So it sought to remake itself
as a specialist in wireless devices
and accessories. But growth in
that business is slowing because
more people have smartphones
and see fewer reasons to up-
grade.
RadioShack’s shares are now
trading below $1. It warned in
September that it might need to
file for Chapter 11 bankruptcy,
which wasn’t unexpected. It
bought some more time soon af-
ter by restructuring part of its
debt with lenders.
The fix: RadioShack’s turn-
around efforts have included
cutting costs, renovating and
closing stores, and shuffling
management. The Fort Worth-
based company has tried to up-
date its image and work on add-
ing new products, including pri-
vate brands and exclusive items.
RadioShack disclosed plans
in March that it intended to
close 1,100 stores, or about a fifth
of its U.S. locations. It didn’t
specify the number of job cuts.
The prospects: Radio-
Shack has been fighting with its
lenders during the holidays,
which is hampering its efforts to
restructure the business and
close some of its stores to help
raise cash. This week the lenders
notified RadioShack of alleged
breaches to a $250 million loan
and want the company to pre-
pay some of its debt, along with
other fees. RadioShack says that
is unreasonable.
“I think they’re going to close,
but it’s about doing it on an or-
derly basis,’’says David Tawil, co-
founder and portfolio manager
of Maglan Capital, which fol-
lows distressed companies.
Aeropostale Inc.
The problems: Teen retail-
er Aeropostale reported a wid-
ening loss and falling sales on
Thursday, and its forecast for the
holiday quarter mostly fell short
of analysts’ predictions.
Aeropostale, like many tradi-
tional teen destinations includ-
ing Abercrombie & Fitch and
American Eagle Outfitters, has
struggled with changing fashion
tastes among teens. Those
chains face intense competition
from fast-fashion retailers like
Forever 21 and H&M, which of-
fer a wide and quickly changing
array of clothing at low prices.
Aeropostale thrived during
the depths of the recession be-
cause of its affordable logoed T-
shirts and pants. But fashions
with brand logos have lost their
appeal, and the trendier items
that have replaced them have
not excited shoppers.
The fix: In August, Aeropos-
tale reinstated its former CEO
Julian Geiger. But Geiger told
investors this week that the
chain went too far to try to be
trendy in its quest to rival fast-
fashion chains. “I still believe
that while [teens] strive for in-
dividuality ... there’s still a uni-
form that they wear that makes
them cool and fit in,” he said.
In May, Aeropostale an-
nounced it would close 125 of its
mall-based RS. from Aeropos-
tale stores by the end of its fiscal
year. It didn’t specify how many
job cuts are associated with the
closures, but it’s also cutting 100
corporate jobs.
The prospects: Aeropos-
tale’s “path to reclaiming rele-
vance among teens continues to
be an uphill battle,” said Randal
J. Konik, a Jefferies analyst.
J.C. Penney Co.
The problems: J.C. Penney
is still trying to recover from a
botched transformation plan
spearheaded by former CEO
Ron Johnson that sent its sales
in a free fall and resulted in
mounting losses.
Mike Ullman returned to the
CEO job in April 2013 and has
stabilized the business by restor-
ing discounts and basic mer-
chandise. But it’s now up to
Marvin Ellison, who will take
over Ullman’s job in August, to
remake it as a shopping destina-
tion.
The fix: In October, Ullman
laid out a strategy to improve
productivity, expand e-com-
merce and spruce up some de-
partments that it said would
boost sales to $14.5 billion by fis-
cal 2017. That’s still well below
the $17.23 billion it generated
before the sales plunge. It re-
mains to be seen whether it will
further pare down its fleet,
which totals about 1,100 stores.
In its latest round of layoffs in
January, it closed 33 underper-
forming stores and laid off
2,000 employees.
The prospects: Analysts
are closely watching how Pen-
ney fares this holiday season af-
ter growth has slowed in an im-
portant sales measurement. A
slow holiday season would make
investors less confident in their
business.
“It calls into question their
turnaround strategy and wheth-
er it’s gaining traction or not,”
Perkins said.
From Page ID
Harvest
Inside the bar, the walls are
being covered in ponderosa
pine.
Tables are the handiwork of
several Dentonites and are con-
structed out of scrap metal and
reclaimed lumber from an old
house on Bolivar Street in Den-
ton.
Harvest House will be a shop
with coffee, juice, smoothies,
beer and cocktails — “more than
just a bar,” Arnold said.
“We want to be a community
space, since Harvest House has
been a community of creative
thinkers.”
The bar will have several Au-
dacity beers — that’s anew Den-
ton brewery — plus about 35
other draft beers. Arnold also
wants to have homebrew dem-
onstrations and gardening les-
sons in the backyard, plus free,
live concerts. Bluegrass band
Boxcar Bandits will likely have a
residency at the bar, as they
headlined the Harvest Fest from
2005 to 2009.
Harvest House may serve
food eventually, but for now a
friend is going to open a food
truck on the property.
The question really is, will all
the former Harvest Fest friends
fit inside Harvest House? Close:
Capacity is about 320 people.
This story originally ap-
peared Dec. 2 on the Dallas
Morning News’ Crctft Beer and
Cocktail Blog.
REACH US
Managing Editor
Scott K. Parks...... 940-566-6879
sparks@dentonrc.com
City Editor
Mark Finley........940-566-6884
mfinley@dentonrc.com
Region Editor
Les Cockrell .......940-566-6887
lcockrell@dentonrc.com
News Editor
Mariel Tarn-Ray .... 940-566-6883
mtam@dentonrc.com
Features Editor
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cbreeding@dentonrc.com
Sports
Larry McBride......940-566-6913
lmcbride@dentonrc.com
Photography
Al Key ............940-566-6893
akey@dentonrc.com
Circulation....... 940-566-6836
Classified........ 940-387-7755
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Parks, Scott K. Denton Record-Chronicle (Denton, Tex.), Vol. 111, No. 127, Ed. 1 Sunday, December 7, 2014, newspaper, December 7, 2014; Denton, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1107917/m1/37/?q=%22~1~1%22~1: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; .