News

Welcome to this week's Client Newswrap, bringing you the latest from the world of retailers and brands.

Brands
Champagne group LVMH has been hit by falling sales as shoppers tighten their belts in the recession. The group, which owns brands such as Krug, Moet & Chandon, Dom Perignon and Veuve Clicquot, reported that sales in 2009 fell 12% as consumers cut back on luxury products. Profit at the firm's wines and spirits division, which includes brands such as Glenmorangie, fell 28% to £662m over the year.

Drinks company InterContinental Brands has been forced to rethink the branding for its Vodkat drink after the High Court ruled consumers could be misled into thinking it was vodka. The company said it would change the product's presentation to highlight its alcohol content, which at 22% abv is significantly less than vodka, which should be at least 37.5% abv.

FMCG giant Unilever has reported a huge drop in pre-tax profit from EUR 7bn to EUR 4.9bn for 2009, prompting chief executive Paul Polman to say he saw no evidence of an economic recovery on the horizon. "Politicians and the public are disposed to look at some green spouts," he told The Times. "The reality is quite different. Employment and consumer confidence don't show any signs of improvement and I don't see that happening in 2010."

US food powerhouse and new owner of Cadbury Kraft Foods is embracing social networking for the marketing of its Mellow Bird's coffee to push the brand to a younger audience. Kraft will launch a Facebook campaign to build on the coffee's ‘Born to be mild' strapline, which it created last year.

Parents concerned about childhood obesity have slammed Kellogg's for running a series of Coco Pops advertisements at bus stops emblazoned with the message "Ever thought of Coco Pops after school?" The cereal maker recently announced it was reducing the range of brand extensions for its Coco Pops cereal as it planned to launch a new cereal, Krave, for 16- to 25-year-olds.

Frozen Food brand Birds Eye has mounted a £5m marketing push to champion its Field Fresh range, launched to revitalise the frozen vegetables category. The company last week also announced that it would stop pea production in East Anglia after the loss of a "substantial" pea supply contract at the end of last year, The Grocer reported.

Retailers
Participating in Tesco's Save As You Earn Scheme has paid off for 55,000 of the company's employees, who will share a payout of £144.4m between them. The more than 9,000 top savers, who contributed the maximum amount of £50 a month for the past five years, will receive more than £6,000.

The UK high street has suffered its worst start to a new year since 2005 as shoppers stayed at home due to biting cold, extreme weather and the rise in VAT. Data from Synovate's Retail Traffic Index revealed that the number of customers visiting non-food stores was down 5% year-on-year and that, for the second month in a row, none of the regions showed a year-on-year rise in store traffic.

Iceland is to hold an X-Factor-style contest to find a member of the public to star in its TV advertising. The supermarket, which has previously featured celebrities in its campaigns including one-time pop star Kerry Katona, who was dropped after allegations of drug use, has turned its back on stars to launch a talent show-style search, in which the public will vote for the new "face" of the brand.

Waitrose has revealed its sales soared 15.1% in the second half of 2009, making the chain the UK's fastest growing food retailer, according to Management Today. The John Lewis-owned firm said the launch of its Essentials range just after Easter last year had "kick-started a tremendous trading period". Ocado, the online service which delivers Waitrose products, reported that it had set a new record for the number of deliveries in a day, at 17,500.

Meanwhile, Ocado is preparing for a stock market floatation in May. The firm's market debut is expected to value it at around £1bn. The online retailer was founded by a group of erstwhile Goldman Sachs bankers. The bank is a shareholder in the group.

Click here for today's headlines from across the packaging industry