Poll of the Day Recap: 91% Feel Price Squeeze at Grocery Store

Takeaway: 91% YES; 9% NO.

Simply put, the PPI report today showed (shocker!) that inflation is soaring – thanks in large part to food prices.


So, we asked in today’s poll: Are you feeling the impact of higher food prices at the grocery store?


Poll of the Day Recap: 91% Feel Price Squeeze at Grocery Store   - 2

At the time of this post, a revealing 91% of voters said YES; just 9% said NO.

Of the many YES voters, people explained exactly what they're seeing at the store and how it has impacted them:

  • “I see sale prices higher than previous regular prices. I see package sizes/quantities reduced. I see quality declining.”
  • “Yes, particularly since I eat organic, unprocessed food. The prices are so shocking even on packaged food that I don’t eat that I don't understand how people are feeding their families and staying obese and still able to pay for anything else.“
  • “Seriously, who isn't agonizing over higher prices?  Yesterday, @Cub:  most varieties of apples $1.99/lb, Gallon of Land O Lakes Milk $3.99, T-bone Steak (save up to $4/lb) advertised as $6.99/lb, Pepsi 12-packs sale price of 4 for $12. Regarding Pepsi, I believe in the last 5 years, you could purchase 24-pack on sale for $3.99.  Anyone whose cost conscious is aware of price increase and/or size/amount of item/stuff decrease.  Regarding smaller package/amount size, when's the last time you were able to purchase a 5 quart pail of ice cream?  5 qt ice cream pails used to be commonplace…not anymore.”
  • “12 oz (no; not a lb); of Hormel bacon was $7.99 yesterday.”
  • “We now have a 'vegetarian' dinner in our house once/week because of the high beef prices."

Conversely, those who voted NO pointed out that “we had deflation in food prices for 7/12 months last year,” and that “professionals don't worry about the price of milk.” Another NO voted noted, “Ok, lime prices are higher -- but that's really about it. Food is still cheap in America compared to the rest of the world.”



Regional gaming is back! Well that’s a little strong but we are seeing improvement and insiders are buying.


  • Anecdotally, we’re hearing May is showing improvement from April (which improved from March) which is consistent with our math as seen below.
  • June will be impeded by one less weekend day but still, the overall decline should only be modest.
  • Overall, Q2 is shaping up nicely relative to reduced guidance.  The release of May gaming revenues beginning in early June could be catalysts.
  • Insiders at both PENN and PNK have bought stock in the last week – obviously a positive signal.  BYD management, did you hear that?



Hedgeye Retail: Our Heavyweight Candidates for Newly Vacant Kohl’s CEO | $KSS

Takeaway: There are now three potential top jobs open at mega-US retailers.

Hedgeye Retail: Our Heavyweight Candidates for Newly Vacant Kohl’s CEO | $KSS - kss


Kohl's CEO Planning Management Shuffle

• "Mr. Mansell is planning a management shuffle, according to a person familiar with the matter. And he is also scouting for a new chief merchant who would be a candidate to ultimately succeed him, people familiar with the matter said."


• "The CEO is seeking to boost growth when the retail industry is struggling with budget-conscious shoppers who are increasingly turning to the Internet for everyday purchases."


• "Kohl's board is looking for Mr. Mansell, 61 years old, to demonstrate progress on those fronts at a board meeting Wednesday, the day before Kohl's reports first-quarter earnings. At that session, he is expected to describe plans for a broader management reorganization, said a person familiar with the situation."


• "In April, Kohl's lost its chief merchandising officer, Donald Brennan, who joined the company in 2001 and was promoted to chief merchant in 2010 but had received a weak performance grade, according to regulatory filings. Mr. Mansell has been personally sounding out candidates for the chief merchant's job with an eye to having them eventually succeed him as CEO, several people familiar with the situation said."


• "Mr. Mansell has reached out to Brendan Hoffman, who earlier this year said he plans to leave his post as CEO of Bon-Ton Stores Inc. when his contract expires in February, these people said. Mr. Hoffman is unlikely to take the job since it wouldn't immediately place him in a CEO role, one of the people said."

Takeaway From Hedgeye’s Brian McGough:

This tells us that there's now three potential top jobs open at mega-US retailers: Target, JC Penney, and Kohl's. The pool of candidates is not huge, but there are some heavyweights. There's Roger Farah, who has only two weeks left at Ralph Lauren, Bill McComb, who is currently on vacation after turning the dog that was Liz Claiborne into the hyper-growth Kate Spade. And there’s Vanessa Castagna, who was the underappreciated architect of the Eckerd-era turnaround at JC Penney over a decade ago. Let's also not forget Glenn Murphy from Gap. The fact of the matter is that he is a far better CEO than a company like Gap probably deserves. He's done a great job fixing the company, and at age 51 -- has a much bigger and better job left in him.


*Watch Brian McGough on HedgeyeTV explain one key point in his bearish thesis on Kohl’s.


*     *     *     *     *     *


Editor's Note: This is a complimentary research excerpt from Hedgeye Retail Sector Head Brian McGough. Follow McGough on Twitter @HedgeyeRetail

Subscribe to Hedgeye.

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Howard Penney Has Done It Again, Ladies and Gentleman | $BLMN

Takeaway: Smart investors pay close attention to Howard Penney.

Hedgeye Restaurants sector head Howard Penney is simply on fire. Last week we highlighted his great call on Bloomin’ Brands (BLMN). And guess what? The stock has continued to fall – it’s now down -20% since he added it as a Best Ideas SHORT on November 27, 2013 at $26.71/share. Since this time, 2014 EPS estimates have been revised down from $1.33 to $1.22 and the share price has acted accordingly.


Howard Penney Has Done It Again, Ladies and Gentleman | $BLMN - 9


Howard also discussed BLMN as one of his favorite short ideas on HedgeyeTV back in April.



What have we learned here? Pay close attention to Howard Penney.

Subscribe to Hedgeye.

Cartoon of the Day: Grocery Store Robbery

Takeaway: Americans say food prices are getting out of hand.

Cartoon of the Day: Grocery Store Robbery - Food Prices 5.14.2014


VIDEO | Keith's Macro Notebook 5/14: UST 10YR COMMODITIES EUROPE

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