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    Published on: December 2, 2002

    Thanks to all of you who sent emailed good wishes about my knee surgery last week…while I won’t be running any marathons in the next few weeks, things seem to be proceeding well.

    One question, though. A number of you expressed enthusiasm for a MNB-percoset combination. Was this a desire to see MNB written by a Content Guy on percoset? Or a desire on your part to read MNB while taking percoset?

    Hmmmm?
    KC's View:

    Published on: December 2, 2002

    Sunday’s (and last Thursday’s) NFL scores…

    New England 20 DETROIT 12
    DALLAS 27 Washington 20
    BUFFALO 38 Miami 21
    GREEN BAY 30 Chicago 20
    Baltimore 27 CINCINNATI 23
    Carolina 13 CLEVELAND 6
    Pittsburgh 25 JACKSONVILLE 23
    KANSAS CITY 49 Arizona 0
    Atlanta 30 MINNESOTA 24
    Tennessee 32 NY GIANTS 29
    SAN DIEGO 30 Denver 27
    INDIANAPOLIS 19 Houston 3
    PHILADELPHIA 10 St. Louis 3
    SAN FRANCISCO 31 Seattle 24
    NEW ORLEANS 23 Tampa Bay 20
    KC's View:

    Published on: December 2, 2002

    On the subject of providing information on food labels, MNB user Mary Ellen Burris raises an interesting point:

    “I’ve been trying to address the size of type on packages, in ads, in store…because boomers are often in denial for about 5 years when presbyopia sets in. It’s only when holding things at arm’s length no longer makes words legible that they give in and get glasses.”

    Been there. Done that.



    We had a piece last week about how other retailers are looking for spokespeople who might provide them with a little Martha Stewart panache…though they’d prefer it to come without the SEC investigation. One MNB user wrote in to note that it is a lot more complicated than that:

    “Back in the early 80s, Martin Sloves, advertising guru, once taught me about the value of brand image... he created the Volvo safety aura that sold a hell of a lot of boxy cars. His simple question was say Volvo and what is the word association... say Oldsmobile and what comes to mind.

    “Now, find where Martha and the clones might fit try the same thing with retail ‘brands.’ What are Sears, JC Penney, Target, Wal-Mart? Sears was once the brand for choice and quality... sadly no longer. Except for a few of their own brands like Craftsman they have tried to be fashion, low price, electronic.

    “Yes, Martha was brought in to help Kmart create an image, but that merchant did not know how to effectively take advantage of the aura. What makes us think others will know how? In the category of large mass merchandiser is there a brand that can support a "Martha" and in turn be supported by such a "crafty person"? Looks like Target would be first choice as they try to support a hip fashion image, but they need research to find out what their brand means to the consumer and what that shopper expects of any ‘leading lady.’

    “But does the next Martha have to be in the hands of metal racked knitwear merchants? How would a Martha clone do with Williams Sonoma, Treasure Island, Fortunoff?

    “Don't count Martha out, but in her comeback I expect she will be facing some stiff competition from new retail quarters.”




    We ran an email last week complaining about the high price of cereal, to which MNB user Dick Lowe responds:

    “Go to the bulk food store buy oatmeal, wheat flakes, barley flakes, rye flakes, dried fruit, and unsalted nuts. Mix in a big pan, bag, and serve with fresh fruit and yogurt. Cheaper, tastes better, and better for you!”

    Doesn’t sounds very tasty, though…
    KC's View:

    Published on: December 2, 2002


    • William Breetz Jr. will take over for Robert Zincke as president of Kroger's Southwest division, which includes 212 stores in Texas and Louisiana. Breetz joined Kroger as a clerk in 1972, was executive vice president of the Southwest division for two years.

    KC's View:

    Published on: December 2, 2002

    The Associated Press reports that testimony in a class action lawsuit against Wal-Mart suggests that it puts undue pressure on its employees, ridiculing those who do not meet specific goals, pressuring them to work off the clock in order to meet assigned goals,

    This pressure, according to the testimony, grows out of a corporate culture that demands higher productivity at lower costs, even if it means taking advantage of workers.

    This is just the beginning of testimony, so rebuttal witnesses have not yet responded to the charges,
    KC's View:
    Since this is just the first of 39 class action suits, it will be interesting to see if Wal-Mart’s image takes it on the chin. We suspect not -- if only because consumers respond to the notion that the company is working hard to keep prices down, and many people won’t be sympathetic to a perceived anti-worker bias.

    Besides, we also think there will be more than a few Wal-Mart employees called to the stand to prove that any violations are individual, not systemic.

    Published on: December 2, 2002

    It has been well-documented that Amazon.com is using its annual “Delight-O-Meter” to track how many items are being purchased during the holiday season from its various sites and affiliates.

    Based on a survey done by Harris Interactive, Amazon is catering to an American customer base that has 51 percent of respondents looking for lower prices, and 32 percent looking for better value (such as free shipping).

    Among the products most in demand by shoppers on Amazon:

    • Cell phones, which are selling at four times the rate that they sold last year at this time.
    • DVD players, driven by prices that have dropped, in some cases, below $100.
    • DVDs, especially hot current titles such as “Lord of the Rings: Fellowship of the Ring,” Star Wars Episode II,” and “Spider-Man.”

    In addition, best-selling novels, kitchenware, and Amazon’s new linkage with apparel retailers are proving popular.
    KC's View:
    According to the survey, 85 percent of Americans do not realize that there is a week less time between Thanksgiving and Christmas than has been the usual case in past years…which means there are going to be a lot of confused and surprised consumers in a couple of weeks.

    If this is the case, that might be an interesting window for traditional brick-and-mortar retailers to exploit in, say, about 17 or 18 days…

    Published on: December 2, 2002


    • Reports are that Nash Finch, which is currently the subject of an informal investigation by the US Securities and Exchange Commission (SEC), may be de-listed from the Nasdaq because it still has not filed its quarterly results for the period ending October 5.



    • Wal-Mart China has confirmed that it will open its first store in Beijing in mind-2003, and will operate under the Sam’s Club banner.



    • Reuters reports that one year after sending a market research team to China, Tesco continues to seek a joint venture partner for its expansion plans there. The company says it is in not concerned about playing “catch-up” to Carrefour and Wal-Mart, both of which already have units there.

      Reuters also notes that Tesco continues to examine its options in Japan. Tesco’s current Asian holdings include stores in Thailand, South Korea, Taiwan and Malaysia.



    • Now that Japanese retailer Seiyu has divested a financing division that carried a heavy debt load, it is expected that Wal-Mart will exercise its option to boost its stake in the company to 33.4 percent from its current 6.1 percent, making its Seiyu’s majority shareholder.

    KC's View:

    Published on: December 2, 2002

    Newsday reports that Stew Leonard's has finalized plans to build a 125,000-square-foot store in Farmingdale, N.Y., across the street from a wine store recently opened by Stew Leonard Jr.

    It reportedly will cost the company $24 million to build the facility, on top of the $16 million it cost to buy the 19-acre site. It is scheduled to open in Spring 2004.

    The store will employ about 500 people and pay $400,000 a year in property and school taxes, the company said.
    KC's View:

    Published on: December 2, 2002

    Agriculture ministers representing European Union nations reportedly have come to an agreement about labeling requirements for foods and animal feed containing genetically modified organisms (GMOs).

    It has been agreed that food containing more than 0.9 percent genetically modified material will have to be labeled as such.

    The agreement has to be ratified by the European Parliament.
    KC's View:
    Users of this site won’t be surprised that we’re in agreement with this legislation. In our mind, it is called truth in labeling.

    Published on: December 2, 2002

    Publix Super Markets reportedly is beginning to advertise its online shopping efforts in a number of online venues, using portals such as AOL and Yahoo! as well as sites such as Epicurious.com to generate traffic for its site.

    The goal, according to published reports, is to generate more traffic at its brick-and-mortar stores as well through effective targeting of email messages.
    KC's View:
    One report we read on this noted that Publix does not currently collect email addresses of its brick-and-mortar customers…which, if true, we simply don’t understand.

    That seems to us to be the lowest fruit on the tree for any retailer…that asking shoppers for their email addresses is easy to do, and that responding to those who give out their email addresses is a simple and effective way to communicate with shoppers.

    Our question is, why doesn’t every retailer collect email addresses for its shoppers?

    Published on: December 2, 2002

    In a recent interview with the Associated Press, Albertsons CEO Larry Johnston laid out his vision of the grocery industry’s future:

    • Johnston predicts that there will be ‘dramatic consolidation” in the grocery industry over the next 10 to 20 years, as regional chains and independents decide they want to “monetize their family assets.” He also says that Albertsons plans on being one of the companies doing the consolidating.


    • Johnston defines companies like Wal-Mart and Costco as destination stores that are rely primarily on price to attract shoppers. For Albertsons, he says, the primary reason for shopping there is not price, but rather location.


    • In explaining how Albertsons will move beyond its current investment in online shopping, Johnston tells the AP, “When you arrive at the store, we´ll hand you a personal digital assistant, which you´ll plug into your basket. You´ll put in your security code, and it (the PDA) will automatically bring up your shopping list, which you´ve put into your computer at your leisure at home. And you´ll automatically be routed through the store efficiently, because we´ll have global positioning systems. … We´ll alert you to specials as you go down the aisles. As you pull the product off the shelf, you´ll scan it yourself in front of the personal digital assistant. And it will take it out of our inventory and automatically put it on your credit card.”

    KC's View:
    This sounds like a guy who has a vision of the future, and is positioning his company to be there to capitalize on the opportunities that may be available.

    We think that Johnston’s great gift may be that he comes from outside the food industry, and that he sees the world through a wider prism.

    Published on: December 2, 2002

    Wal-Mart Stores Inc. sold $1.43 billion worth of merchandise the day after Thanksgiving, a new company record.

    Last year on the same day, Wal-Mart generated about $1.25 billion in sales. A company statement said that the increase was attributable both to increased customer count and a higher average transaction.

    Top-selling categories included home electronics, small appliances, and toys.

    The Wal-Mart numbers seem to be in line with national trends, as discounters did well and other retail venues met modest sales expectations.

    According to one tracking service, total retail sales for the two days following Thanksgiving were up 10.9 percent compared with a year ago.
    KC's View:
    The short version: customers are looking for deals. And will continue to do so, right up until December 24.

    The interesting thing about the Wal-Mart record is that the Bentonville Behemoth probably would prefer not to have it. We once heard a Wal-Mart executive say that the day after Thanksgiving is, in fact, the company’s least favorite day of the year -- because it is the one day the company has to go off message,

    Think about it. All year long, Wal-Mart brags about its low prices…and then, the day after Thanksgiving, it has to engage in a one-day sale that suggests that it indeed can go even lower if it has to. The Wal-Mart exec told us that the company feels compelled to lower prices this one day because everybody else does, but that if it had its druthers, it would be just another day from a marketing perspective.

    This suggests a couple of things. One, while it is generally believed that Wal-Mart sets the rules of the game, in this case at least it allows other retailers to set the rules. (This is interesting, though it may not be helpful to companies trying to compete with the Bentonville Behemoth.)

    It also is a good lesson in marketing discipline. Every retailer, it seems to us, should have a “message” -- the core foundation on which the business is built. It can be customer service, it can be best produce, it can be great meat, or virtually anything. But having and knowing that message, and communicating it to consumer relentlessly, is absolutely critical to success.

    Just ask Wal-Mart.

    Published on: December 2, 2002

    The efforts by D’Agostino’s Supermarkets to acquire Kings Super Markets in New Jersey from Marks & Spencer Group for $160 million have collapsed, apparently because New York-based D’Agostino’s was unable to secure the financing it needed in tough capital markets.

    M&S has placed the chain back on the market; Kings was first put up for sale some 20 months ago.

    Among the likely bidders: Gristedes, which once had an exclusive window for negotiating to buy Kings, but also was unable to close the deal. Gristedes has said that it would be interested in reopening talks with M&S if the D’Agostino’s sale couldn’t be worked out, and that it would open its own stores in New Jersey if the sale were completed.

    M&S Chairman Luc Vandevelde has said that if an appropriate buyer cannot be found, the company could decide to hold onto King’s.
    KC's View:
    It is hard to imagine that Kings’ price is going up through all this; we wonder what the next bid for the company will be.

    We feel the worst for the folks who current work at Kings. Those folks must find it hard to get motivated for an uncertain future…, which is almost certainly going to affect their dealings with customers.

    Maybe M&S will get lucky and some new bidders will emerge that won’t face the same issues as smaller companies like D’Agostino’s and Gristedes.

    Maybe.