In The Headlines

Mattel’s Re-invents Barbie (Again)

Mattel has been trying to remake the image of Barbie for years, lately by expanding her ambitions beyond just collecting clothes to entering professions ranging from politics to sports to being a video game developer. The Game Developer Barbie sports glasses, blue jeans, and a green jacket—an outfit described by Mattel as “industry inspired.” She wears a silver headset with a built-in microphone. You could see her sitting in a room full of coders and fitting right in.

Game Developer Barbie also comes with some tools of her trade: a laptop and a tablet with a picture of a game. The laptop features actual game code graphics. The product description on the package reads, “Honored as a career of the year, young techies can play out the creative fun of this exciting profession.” The coding Barbie joins a lineup of career-oriented dolls that include a ballerina, a gymnast, a film director, and a pet vet.

Mattel has been working on expanding the vision for its Barbie line recently, including introducing three new body types: tall, petite, and curvy. The toy company has released the Game Developer Barbie to give young girls the idea that they, too, can succeed in a traditionally “non-Barbie-like” field. For the unveiling of those dolls, Mattel President and COO Richard Dickson said, “Our brand represents female empowerment.”

The company’s earlier attempt to market a technology-oriented Barbie had problems. In 2014, Mattel faced the ire of customers for the content of a book called Barbie: I Can Be a Computer Engineer, which was criticized for implying girls were not good coders and needed guys to help them do the work. In the book, Barbie was forced to ask her male colleagues for help with her work after she makes a mistake and her computer gets a virus. The doll’s good intentions were overshadowed by the book controversy.

Mattel seems to have gotten its game developer doll right with customers this time. The product is already sold out, according to the product’s website. The back of Barbie’s box reads as follows: “Game development involves storytelling, art and graphic design, audio design, and computer programming. Because there are so many aspects to creating a game, teamwork is important.” This seems to imply that, though Barbie can tackle tech problems on her own, she is still willing to collaborate and work with others.

The new lineup of Barbie dolls comes at a critical juncture for the company. In the first quarter, Mattel’s sales fell 6% to $869.4 million from $922.7 million, and the Barbie line had a 3% decline in sales. Another problem facing Mattel is that the company lost the doll licenses to Walt Disney Co.’s hit film Frozen and Princess properties, which analysts estimate brought in more than $400 million annually for Mattel. Hasbro won those licenses starting this year.

Mattel executives hope the new Barbie concept—her look, her job, her apparent industry hipness—will quiet her detractors and make the line appeal to Millennial parents. That could mean a brighter future for Barbie and the company.

Citations

1. http://cnet.co/1UTusYx – CNET
2. http://bit.ly/1UD80UZ – Forbes

Supermarkets Launch “Grocerants” to Attract Millennial Shoppers

A year after consumer spending on restaurants finally surpassed grocery sales, evidence presented in two new reports suggests that neither restaurants nor grocery stores are the future of food shopping. Instead, what could dominate is a hybrid of the two called “grocerants.” According to data recently published in one NPD Group report and one research note from Oppenheimer, Americans (and Millennials in particular) want someone else to cook for them, but they do not want to stop going to the grocery store, either. The compromise between the two? Purchasing prepared food from the supermarket.

An increasing number of supermarkets are now stocking shelves with prepared foods and offering in-store dining to patrons, according to the NPD Group study. Since 2008, in-store dining and prepared foods have grown nearly 30% in grocery stores—accounting for 2.4 billion foodservice visits, and $10 billion in consumer spending in 2015. The biggest trend in supermarkets is prepared meals, according to Cheryl Flink, Chief Strategy Officer of Market Force. “The grocers are putting time and effort into this idea of ready-to-eat,” Flink said, explaining that consumers are seeking convenience, an alternative for dining out, and food quality.

According to NPD spokesperson Kim McLynn, grocerants can range from yuppy-chic (like New York City’s Eataly) to conventional-seeming grocers, like H-E-B Grocery in San Antonio, Texas, Buehler’s in Wooster, Ohio, Hy-Vee in Bloomington, Illinois and Whole Foods in Austin, Texas. While many grocery chains seem to be catching on to this trend, it is Whole Foods that has made some of the largest strides in capturing dining dollars for its prepared food offerings.

Of course, Whole Foods is not the only grocer beefing up its pre-made meals. In reporting its first quarter fiscal 2016 earnings results, Kroger—the second-largest food retailer, behind Wal-Mart—made a point of highlighting its new investment in Lucky’s Market, a specialty grocery chain with a strong prepared foods department.

Companies like Blue Apron, which provide ready-to-cook items for consumers, are major competition for grocery stores—which could explain the increase in prepared food items at grocery stores in the last few years. While Millennials statistically visit grocery stores less than other generational groups, grocerant options are enticing them into supermarkets. “Give the millennials what they want—fresh, healthier fare and a decent price— and they will come,” said David Portalatin, Vice President of Industry Analysis at NPD Group.

Grocerants, which can offer a wide variety of specialty categories like Asian, seafood, and barbecue, among others, received higher ratings for variety, healthy options, freshness, and quality than traditional quick service restaurants, according to the NPD Group’s information. These qualities are important to Millennials and will remain a key part of their eating behaviors as they age, NPD Group reported.

“Millennials’ interest in the benefits and experience supermarket foodservice offers will continue to be strong over the next several years,” Portalatin said. “This forecast bodes well for food manufacturers and retailers who have their fingers on the pulse of what drives this generational group.”

Citations

1. http://cnb.cx/28C8qAO – CNBC
2. http://bit.ly/1XwsmRL – Forbes

The Good News Is . . .

• Consumer prices rose only 0.2% in May, and core prices (prices excluding food and energy) also increased only 0.2%. Year-over-year inflation was just plus 1.0% for overall prices and 2.2% for core prices. For the month, housing costs rose 0.3% and medical care costs were up 0.3 %, but both were still increasing at a moderate annual rate. This latest report on consumer prices indicates that inflation remains in check and makes it less likely that the Federal Reserve will raise interest rates at its July meeting.

• Michael Kors Holdings, Ltd., a global luxury lifestyle retailer, reported earnings of $0.98 per share, an increase of 8.9% over year-earlier earnings of $0.90 per share. The firm’s earnings topped the consensus estimate of analysts by $0.02. The company reported revenues of $1.2 billion, an increase of 10.9%. Management attributed the company’s results to contributions from new stores and strong growth in its online sales.

• Microsoft that it would acquire LinkedIn in a $26.2 billion cash deal. The acquisition, by far the largest in Microsoft’s history, unites two companies in different businesses, one being a big maker of software tools, and the other described as the largest business-oriented social networking site, with more than 400 million members globally. LinkedIn could help Microsoft accelerate its shift to the internet by giving it a large online property that has become the de facto standard for posting résumés online. Though they operate in different businesses, Microsoft and LinkedIn make most of their money by catering to professionals. The site is heavily used by recruiters for finding new workers. The data is so valuable that recruiters spend thousands of dollars a month to use it to fill job openings.

Citations

1. http://bloom.bg/1Dl6vPO – Bloomberg
2. http://cnb.cx/1gct3xa – CNBC
3. http://bit.ly/21sHXAn – Michael Kors Holdings, Ltd.
4. http://nyti.ms/1UfNAh7 – NY Times Dealbook

Planning Tips

Guide to Often Overlooked Ways to Cut Your Taxes

With summer here, thinking about taxes may be the furthest thing from your mind. However, it is never too early to start your tax planning, and there are many deductions you may be able to take advantage of to cut your tax bill. Below are some of the deductions individuals often overlook. Be sure to consult with your tax advisor to understand what tax deductions are appropriate for your situation.

Retirement savings contribution credit – If you make a contribution to virtually any retirement account (such as an IRA, 401(k), 403(b), or 457), you may be eligible for this credit. You really have to dig for this one, since most people will not even look at the retirement contribution information reported on their W-2 forms. Even if you use a computer program to complete your return, it is possible to overlook reporting your 401(k) contributions. This credit is limited to the lower level of the income spectrum, but if you qualify, it is a wonderful (and relatively easy) way to cut your taxes.

Home loan points – Did you overlook the deduction for the points you paid on that new mortgage or home equity loan? Many people do. Generally, the points that you pay for a loan are immediately deductible, while those paid to refinance an existing loan must be deducted on an amortized basis over the life of the loan. But if the balance of that loan is later repaid all at once (by selling the home in question or refinancing again), the unamortized portion of the loan points can be immediately deducted.

Student loan interest deduction – This is another way to reduce your taxes without having to itemize your deductions. Most interest paid for personal expenses is no longer deductible. But Congress has carved out an exception for student loan interest, and you do not have to use Schedule A in order to claim this deduction. There are income limitations, and if your student loans are large, it is possible you will not receive a deduction for all of the interest you paid. But for the majority of taxpayers, this is an overlooked way to lower your tax bill.

Tuition and fees deduction – Education credits are not the only ways to shave a few dollars off your tax liability. If you are taking qualified college courses, it is possible that you can claim a deduction for these expenses. While there are income limitations, it is another “above the line” deduction; that is, you can claim it even if you do not itemize your deductions on Schedule A.

Charitable and medical travel – Do you use your automobile for charitable purposes? If so, you can deduct $0.14 per mile for all qualified charitable travel. In addition, you can deduct your out-of-pocket expenses when you are serving a qualified organization. For example, Scout leaders can deduct the cost of uniforms. Keep in mind, however, that you cannot deduct the value of any time you donate to a charitable cause. You probably also use your personal vehicle for medical travel, to and from your doctor and dentist visits, for example. How much you get to deduct per mile varies from year to year, so check the IRS website at www.irs.gov for the latest figures. If you have to travel a great distance for medical treatment, the actual cost of the travel, including airfare and lodging, can also be deductible.

Citations

1. http://bit.ly/1iJ9Xuz – Kiplinger
2. http://bit.ly/1nkBfPx – US News & World Report
3. http://bit.ly/21tPgYF – The Motley Fool
4. http://bit.ly/1So2sxy – TheFiscalTimes.com
5. http://bit.ly/1tvAhT0 – Bankrate.com