Question-and-Answer Session
Operator
Thank you, ladies and gentlemen if you would like to register a question please press star then the number one on your telephone. If your questions has been answered and you would like to withdraw your registration, please press the pound key. If you are using a speakerphone, please lift your handset before entering your request. One moment please for the first question. Your first question comes from Megan Friedman with William Blair & Co.
Megan Friedman – William Blair & Co.
Just a couple of questions, first of all can you talk a little bit more about the florist segment and what some of the underlying causes were for the stronger than expected performance there?
Michael Soenen
Well as I tried to lay out, we’ve just continued to have good growth both in grocery, both in fresh flowers sales and in our technology. All of our new product sets are being very well received and they’re just more than offsetting the declines in some of our legacy businesses and the declines that we’ve created with some of the product lines and customers who are no longer maintaining. So it’s just simply new product innovation outpacing legacy businesses.
Megan Friedman – William Blair & Co.
That’s great and then can you talk a little bit about the outlook for consumer spending in the US and the UK and just what you’re hearing from the florists on that.
Michael Soenen
Well I think, it’s probably a better question for you guys on the phone in terms of the research community is. I mean I don’t have any prolific insight into consumer spending. I will tell you this and I think it’s a very important point, we play with a very broad competitive set at Christmas. Okay, we play with gift baskets, we play with chocolates, we play with lots of different competitors. When you get into Valentine’s Day and Mother’s Day, two things happen that’s very beneficial to the company.
One, our competitive set narrows substantially. If you look at it, it’ll be very much us and Pro Flo and 800 and Teleflor and others who are in the floral category and that’ll become a lead item. You’re not really going to send your girlfriend a gift basket for Valentine’s Day, it’s just not what occurs. So one, the competitive set narrows to just kind of us as a key player and two, they’re really much less economically sensitive at Valentine’s Day and Mother’s Day than they would be at Christmas. So gifts that are kind of on the margin for Christmas, maybe someone doesn’t buy, but I’ve said it many times before, no one is going to come home and tell their girlfriend or their wife, sorry, it’s been a tough economic year and there’s no flowers this year.
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