Price Clippings
This edition of Price Clippings features articles on:
- A record-setting drop in consumer prices
- A Canadian executive accused of price-fixing in the U.K.
- The decline of newspaper revenues
- "Aggressive" pricing in the grocery industry
- A change in what we can expect to pay for both music and electronics
U.S. consumer prices drop 1 per cent
U.S. consumer prices plunged by 1 per cent in October, the biggest one-month decline in the past 61 years. The drop was twice as large as the 0.5 per cent decline analysts expected. The big drop reflected not only a record-setting fall in gasoline and other energy costs, but widespread declines in other areas. Core consumer prices, which exclude food and energy, fell by 0.1 percent last month, the first drop in core prices in more than a quarter-century.
Source: The Associated Press, November 19, 2008
Canadian Bread executive implicated in U.K. bagel price-fix allegation
Canada Bread Co. Ltd. is investigating allegations that an executive of its British bakery operations sought to influence the pricing of a competitor, Mr. Bagel Ltd. Canada Bread began negotiations to acquire Mr. Bagel in October, the main terms of the transaction were settled, and Canada Bread began discussing pricing strategies to be implemented after the acquisition. Negotiations ended due to a significant raise of the selling price of the business by Mr. Bagel late in the process. The managing director of Mr. Bagel has now made price-fixing allegations to Britain’s Office of Fair Trading.
Source: The Canadian Press, December 8, 2008
Newspaper revenues to plummet in 2009 says new study
Newspaper revenues in 2009 will plummet while online revenue will grow according to a survey of 400 daily newspaper executives in the US and Canada. The survey revealed that more executives projected a downward spiral rather than increases in seven out of eight ad revenue categories. While online ad revenues appear to grow, automotive and real estate classifieds, among other categories, are on the decline. Improving rate structures and pricing programs has become the next priority for many newspapers, as well as developing online, both in terms of content and advertising programs.
Source: MediainCanada.com, December 16, 2008
General Mills grows market share in second quarter
General Mills Inc. gained market share in brands like Cheerios and Yoplait yogurt this fall, even though prices for those items were higher than last year, while ConAgra Foods Inc., maker of Healthy Choice and Crunch ‘n Munch, had the opposite experience. ConAgra learned a tough lesson in pricing and branding as its consumer foods volume slipped in the second quarter. The company said its ‘’somewhat aggressive” pricing turned some consumers off and volumes for some of its brands dropped. Neither company is planning to drop prices, despite pressure from retailers and growth in private-label products.
Source: The Associated Press, December 17, 2008
Apple Changes Tune on Music Pricing
Apple Inc. unveiled significant pricing changes to its iTunes Store – moves by the dominant online music seller that could spur similar action across the industry. The changes include a new three-tiered pricing plan for songs, instead of the 99-cents fixed price Apple has used almost exclusively. Under Apple’s new pricing plan, the vast majority of songs will cost 69 cents, some songs will still cost 99 cents, but the most sought-after songs – which generate most of the sales on the service – will likely cost $1.29, as both Apple and the major record labels try to boost revenue growth.
Source: The Wall Street Journal, January 7, 2009
Concert Industry Bucks the Recessionary Trend
The concert industry has so far bucked the recession, but promoters are bracing for a bumpy 2009. Box-office earnings from North American concerts are up from 2007, as a result of higher ticket prices. But the total number of tickets sold for the 100 top-grossing shows fell for the second consecutive year. Music fans are becoming wary of increasingly costly “cheap seats”. Live Nation, the world’s largest concert promoter, is trying to become more flexible in how it scales ticket prices – making cheap seats cheaper and perhaps dividing them into more than the usual two or three price levels.
Source: The Wall Street Journal, January 5, 2008
Holiday firm changes price policy
A tour operator owned by Virgin Holidays has changed its pricing policy after an investigation into its misleading headline prices. Travel City Direct, a specialist in package deals to Florida that include hotel, flight and rental car, advertises prices as low as £369 per person. These prices, however, do not include mandatory insurance and tax which can add at least £60 to the price. While Travel City Direct explains that their price presentation is similar to that of other operators in the market, they have agreed to simplify their advertised prices and make clearer what travelers can expect to pay. Rules set by the Office of Fair Trading demand prices be all inclusive.
Source: BBC News, January 8, 2009
Sony to Raise Prices in Europe Due to Stronger Yen
Sony could raise the prices of some of its products more than 33 percent due to the strengthening of the Japanese yen versus the U.K. pound and the euro, the company confirmed. With economic uncertainty set to continue into 2009, "Sony will increase the trade price of a number of products over the coming months," the company said in a statement. Sony said it has not determined the exact price increases, but that most products would not rise more than 33 percent. Sony said it expects other companies may do the same.
Source: PC World, December 18, 2008
