SELL NUTRISYSTEM SHORT… NOW…
I gave a tongue-in-cheek shout to Nutrisystem getting a shot at selling in Walmart’s, but the surge is a classic case of people having no clue how business works or who their customers are. This has epic fail written all over it.
From Wall Street Pit:
Shares of Nutrisystem surged more than 25% in morning trading after yesterday’s announcement that their health food starter pack will be appearing at a retail store for the first time. Well, this is not just any retail chain, the two-week starter meal pack will be available at more than 3200 Wal-Mart Stores. The packs will sell for $148 (emphasis mine, JH) and will also be available on the world’s largest retailers website. The positive reaction to the product placement has sent the stock higher, and in addition to that there are undoubtedly a number of shorts covering their positions.
OK. Let’s think this one through. In our current economic disaster, more people are shopping at Walmart because they have less money. What genius in marketing actually thinks that people down-and-out at Walmart are going to spend $148 for two weeks worth of food when they’re holding their noses to buy regular food at Walmart because the economy sucks?
Then there’s this little gem:
However, that would lead us to believe that Nutrisystem will make their big push for the post-holiday diet period, which is always a popular time.
A popular time in a good economy, but couple our bad economy with decreased spending in the post Black Friday period and how much money do these jokers actually think Walmart shoppers are going to have to spend on diet foods?
There’s no way around this, it’s a bad idea at a bad time in a bad market, a trifecta of fail.
I totaly agree Jeff. This is a time when we are tryingto feed a family of four on$148.00.What are they thinking of?
Shalom Walmartmole,
They’re thinking that they can make a killing on the Nutrisystem stock.
B’shalom,
Jeff
They think that almost everyone in the country shops at Walmart and that even in the down economy (or perhaps especially?) people are health conscious.
Shalom Someone,
Sorry. No health conscious and aware person who bases their food buying decisions on health before cost shops at Walmart.
B’shalom,
Jeff
You know that’s not true.
Shalom Someone,
Perhaps not, but anytime I deal with Wall Street I have to take a long hot shower and use lots of Lava soap.
The deal just doesn’t make good business sense (but then, neither did New Coke) so I have to look for other motivations and making a quick killing on stocks seems like a good one to me.
B’shalom,
Jeff
It makes perfect sense for Walmart as there is no downside, and I think it makes more sense for Nutrasystem than you give it credit. That’s a lot of exposure. Of course, Nutrasystem is probably the only party than stands to lose anything here as well.
Shalom Someone,
Oh, I agree. There isn’t a downside to this for Walmart. All it is risking is some shelf space.
And I think that when the tactic bombs, Nutrisystem’s stock holders are going to come out ahead as long as they sell short. And those closest to the top of the pyramid are going to know quickest when to jump.
B’shalom,
Jeff
I am not sure how this can be a bad idea. They are not selling the actual food at the store just gift cards you call in and redeem for the program foods which are shipped to your home. If the cards do not sell there is no food being wasted just a lot of plastic cards. I guess I am not sure how the whole thing works with gift card type items. It just seems like there is no way either party could lose big on this.
Bad economy or not people are still buying and a lot of people of all income levels shop at Walmart.
To the poster who does not think people who care about their health shop at Walmart….Wow way to stereotype! Not everyone who goes into Walmart is a mullet wearing hillbilly who loads their cart with Cheetos, bologna, and Miller Light.
Shalom Prudence,
First, thank you for stopping in, for reading and, most importantly, for taking the time to enter the discussion. We build our community with our conversations.
I don’t doubt that a conscientious shopper could eat in a healthy manner if they shopped at Walmart, but from all the stories we’ve posted here over the years, it has to be magnitudes more difficult to do so. (You wouldn’t even try to buy meat there, for starters, but that could be a plus since the vegetarian life style is generally more healthy.)
As to the stereotype, I can’t disagree with you. All stereotypes, while they contain a grain of truth or they wouldn’t be a stereotype, are not good measures of sociological behavior.
Having said that, however, walk through your local Walmart and pay close attention to how food is displayed and marketed. What is the message that Walmart is attempting to send to its customers?
B’shalom,
Jeff