Consumer Biz Recap: Wal-Mart Beats Its SCANDAL, McDonalds CHICKENS Out
The Soda Wars rage on, as new articles in medical journals say that corporate social responsibility campaigns from Coca-Cola (NYSE:KO) and PepsiCo (NYSE:PEP) are more self-serving than being a public service; New York Mayor Bloomberg’s attack on sugary drinks have done no damage to either soda giant, as sales figures remain as strong as ever. Meanwhile, Coke will sell its zero-calorie Vitaminwater in Subway restaurants across the country starting in August. This arrangement with the world’s biggest fast food chain, if ranked by number of locations, could greatly enhance Vitaminwater’s 28 percent sales growth pace.
What bribery scandal? Wal-Mart (NYSE:WMT) shares continue to yawn at the company’s scandal in Mexico and hit new 52-week highs right and left. A possible rationale is that the U.S.’ sluggish but expanding economy could be in the perfect condition for maximizing sales as bargain shoppers continue to slam to its stores with no concern about bribery allegations.
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Shares of American Eagle Outfitters (NYSE:AEO) ignore late last week’s disclosure that the retailer would take a sharp loss on winding down its 77kids franchise. Investors seem to be appreciating the larger picture, with a high-growth retail name which carries no debt and pays a yield of 2.23 percent.
And now we have the Meat Wars, in which chicken beats beef. McDonald’s (NYSE:MCD) undertakes a new strategy to highlight chicken items on its menu to luree budget-minded consumers and also to exploit a perception that poultry is a healthier option than beef items. USDA projects that chicken consumption will rise 2.2 percent next year, while beef intake drops by 1.7 percent.
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