Conagra explains 'supercycles' of inflation, trading down

Author

Stephen Babcock
January 06, 2023

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We’ve got a new round of results from the holiday shopping season, courtesy of Adobe, GlobalData and Bank of America. Ecommerce sales grew 3.5% to reach a record high, according to Adobe, as big discounts on toys proved enticing. But GlobalData said sagging order volumes point to profitability issues under the surface.

Conagra’s earnings call doubled as a primer on consumer behavior amid inflation, especially when it comes to pricing actions and trading down. The Slim Jim and Duncan Hines owner is seeing “muted” elasticities, and a recent portfolio overhaul is resulting in less switching to private label brands. Combined with moderating inflation, the result is margin gains for the quarter.

Stitch Fix founder Katrina Lake is stepping back into the CEO role on an interim basis as the personalized styling service conducts its second layoff of the last year. Following on the heels of the return of Disney’s Bob Iger, it's a sign that companies may turn to familiar faces when things get more difficult.

How effective are social media campaigns at generating sales at grocery stores? A new partnership between Meta and IRI seeks to provide data around this question. On Facebook and Instagram, CPG brands will have access to results detailing the impact of shopper marketing campaigns on in-store sales.

December's jobs report continued the trend of 2022: The economy added jobs and unemployment remained historically low. This is good news for those seeking signs that consumer demand will remain intact. However, it's not likely to provide any reason for the Fed to slow down its campaign of raising interest rates.

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