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    Published on: January 8, 2003

    We reported yesterday that People for the Ethical Treatment of Animals (PETA) is promoting a global boycott of KFC, urging the company to treat chickens more humanely before they are slaughtered. One MNB user responded:

    “As a consumer of chicken, I personally do not want chickens gassed before they are killed on the altar of being more humane. I imbibe enough chemicals in the food I consume. I do not want chickens gassed, thus adding
    to the list.”


    Fair enough. We think a nice, clean beheading is as much as a doomed chicken can expect.




    Yesterday there were two stories, one after the other, that caught the eye of one member of the MNB community -- a piece about people being too tired to cook and clean, and another about the resurgence of e-commerce. This MNB user wrote:

    “Doesn't this story actually dovetail with the one above on the time starved, tired consumer? Saving ones' own energy may be worth the additional cost.”

    That’s exactly the opportunity, in our mind.

    In our commentary about the study revealing that half of all heads of household are too tired to put much time or effort into cooking dinner, and two-thirds are looking for faster ways to accomplish basic household chores, we wrote:

    “We have to admit that we read these results with a certain sense of shame. We’re hardly the first generation of people to be exhausted by responsibilities. It’s just that previous generations didn’t whine about it; they weren’t even asked if they were tired. It was a fact of life.

    “That’s not to suggest that this isn’t a legitimate business opportunity or that this isn’t a very real cultural phenomenon. It’s just that we think that sometimes as a generation we ought to shut up, suck it up, and do what needs to be done.”

    This perspective struck a nerve with one MNB user:

    “Cmon, Kevin. I can't trot out the morbid numbers, but this is the first generation that has so many, many of their parents living into very old age and winding up needing care. So we're caring for parents with Alzheimer's (believe me, it's no picnic), putting kids thru college (so sometimes we need two jobs, especially since the medical care/nursing home costs a fortune, too, and eats up any expected inheritances that previous generations could count on) and working more hours than ever before (there are statistics on that, too.) If we didn't whine about it all once in awhile, we wouldn't be human. By the way, if you want a smart investment, think "nursing homes." AT $6K to $7K a month for confining an Alzheimer's-afflicted parent to a wheelchair in a hall, it ain't bad money. And don't say "bring them home," because when your parent is officially "at risk" in many states, a lot of your options disappear. Am I whining? Yup.

    “Love your stuff, but had to share this perspective.”


    We appreciate the point of view. We just hope that 30 or 40 years from now, our children don’t whine about having to take care of us…


    Also in response to the story about time-starved and tired customers, another MNB user wrote:

    “This would be a prime opportunity for the retailers to reach out to the local business community and offer to bring prepared meals to their place of business. The employees could either call or fax their request to the retailer by a certain time and pay by either cash, check or credit card and the meals could be delivered to their office before they left for home that evening. All the person would have to do then is reheat the meal in the microwave. Or the retailers could increase their sales by selling the consumer the bag that keeps the meal hot. The consumer could rotate the bags the way pallets are rotated. You turn in one and your meal is in another one. If you don't turn in the empty bag, you are charged for it.

    “Another way would be to call or fax your request to the retailer and then tell them approximately what time you would be picking the meal up. As you approach the store, you call the special number and someone from the store is waiting outside with your meal. You have already paid by credit card or your check have already been pre-approved.”


    And MNB user Cindy Weber added:

    “When it comes to preparing a meal, I am lost. My ability to deliver the goods to the kids are about as good as my ability to dial a pizza delivery place.
    Fortunately, my husband is a zen master in the kitchen. And its not his 'responsibility', it is the way that he keeps the family together. Most evenings (I'll leave room for some slacking), preparing dinner is a family event. The kids help with the prep, cutting, slicing, measuring and of course tasting. The idea is not only to prepare the meal, but expose this new generation to the art and love of 'food-ery'. Two out of three of them have bought in. In fact, this holiday season, our 12 year old received his first frying pan as a present.

    “If we, as a parents, are too tired . . . what will their generation be . . . too
    ignorant?”


    We hope not. Last evening, our 13-year-old had to make dinner for us to satisfy a home economics class requirement…and he chopped onions, made salad, and prepared a shrimp risotto like a pro. He even chose the wine for us (though he didn’t get a sip because he had homework to do).

    We were extremely proud.




    We noted yesterday that Wegman’s was ranked by Fortune as #10 in its list of top 100 places to work, prompting this email from MNB user Richard Cognetti Jr.:

    “Wegman’s’ a top ten place to shop as well. Nobody better at giving their employees the tools they need to assist/serve customers. Love their deli!!”

    A great place to work usually is a great place to shop. And vice-versa.

    A lesson worth learning…
    KC's View:

    Published on: January 8, 2003


    • Delhaize is expected to post a 2002 sales decrease of approximately four percent, due mostly to the tough economic conditions in the US, where the company does about 80 percent of its business.



    • CVS Corp. reported that same-store sales were up four percent for December, with total sales up 3.8 percent to $2.55 billion from $2.46 billion a year earlier.

      Fourth quarter same-store sales rose 6.7 percent, while total sales for the quarter rose 6.6 percent to $6.34 billion from $5.95 billion a year earlier.

      For the fiscal year ended Dec. 28, same-store sales increased 8.4 percent, and total sales rose 8.7 percent to $24.18 billion from $22.24 billion.



    • Rite Aid Corp. reported that total same-store sales for the four weeks ended Dec. 28 rose 5.7 percent, while total drugstore sales for December rose 2.9 percent to $1.37 billion from $1.33 billion a year ago.

      Same-store sales for the 43-week period ended Dec. 28 increased 7.2 percent, while total drugstore sales for the year-to-date period were up 4.6 percent to $13.02 billion from $12.44 billion a year ago.



    • 99 Cents Only Stores reported retail sales for the fourth quarter were $198.5 million, up $40.0 million or 25.2% from sales of $158.5 million in 2001.

      Total sales for 99 Cents Only Stores, including its Bargain Wholesale operation, were $210.7 million for the fourth quarter, an increase of $37.8 million or 21.9 percent over sales of $172.9 million during the fourth quarter of 2001.

      Total annual sales for 99 Cents Only Stores, including Bargain Wholesale, were $714.0 million, a 23.5 percent increase over sales of $578.3 million in 2001.

      Same-store-sales for the fourth quarter of 2002 increased 3.1 percent.



    • Dollar Tree Stores, Inc. reported fourth-quarter 2002 sales of $827.5 million, a 15.8 percent increase compared to $714.8 million in 2001's fourth quarter.

      For 2002, sales totaled $2.33 billion, a 17.1 percent increase from last year's $1.99 billion. Same-store sales for the year rose 1 percent, and for the quarter declined 0.3 percent.



    • Drugstore.com reported preliminary fourth quarter sales reached $55 million, up 26 percent from the fourth quarter of last year.

    KC's View:

    Published on: January 8, 2003

    The Associated Press reports that Eric Sorkin, Rite Aid’s executive vice president for pharmacy services accused of helping to cover up a fraud against the company, will get a separate trial from the three former company executives accused of perpetrating the fraud.

    Martin L. Grass, Rite Aid’s former chairman and CEO; Franklin Brown, the former chief counsel and vice chairman; and Franklyn Bergonzi, a former executive vice president and CFO, are charged with conspiracy to defraud and fraud involving the purchase or sale of securities. Their trial is scheduled to start June 9.

    Sorkin’s attorneys argued successfully that since he is only accused of participating in the cover-up, not the larger, more serious fraud, he deserved a separate trial.
    KC's View:

    Published on: January 8, 2003

    Reuters reports that c-store chain 7-Eleven Inc. has signed a deal to borrow up to $400 million from its Japanese affiliate, Seven-Eleven Japan Co. Ltd. The reason for the arrangement is that the Japanese concern can borrow money at a much lower interest rate than in the US.
    KC's View:

    Published on: January 8, 2003

    Dow Jones reports that Fleming Cos. has not yet figured out the cost of a fire that destroyed a 100,000 sq. ft. Colorado warehouse that distributed candy, snacks, cigarettes, over-the-counter drugs, and other items to c-stores in Colorado and the surrounding region.

    Initial estimates were that the damage ran between $13 million and $15 million.

    Two men have been arrested for setting the blaze, which has been officially blamed on arson. There also has been speculation that the conspiracy was connected to former Fleming employees, though that has not been confirmed.
    KC's View:

    Published on: January 8, 2003

    Canadian supermarket retailer Loblaw Cos. announced that at the end of the month, it will stop accepting personal checks.

    Checks reportedly account for less that two percent of all sales, down from 25 percent a decade ago. In addition, the company has determined that consumer preferences for paying for purchases with credit and debit cards has made it acceptable to refuse to accept checks -- especially because they pose a greater credit risk for the retailer.

    Canada’s Wal-Mart Stores and Sears Canada are among the retailers also not accepting checks.
    KC's View:
    Sure, this is good for the retailer. Sure, checks are a lessening component of store sales.

    But we’d hate to be the person who has to tell customers, even if just a few of them, that their check is no longer welcome.

    The question that has to be asked is, even if this is good for the retailer, if it is good for the consumer.

    Published on: January 8, 2003

    Jupiter Research reported that it is estimating that 2002 online holiday retail sales will exceed its original projection of $13.1 billion, which would be better than 17 percent growth.

    “Widespread free shipping promotions are the primary reason that the 2002 holiday season was such a good one,” Jupiter’s Ken Cassar said in a statement, noting that “online retailers may have created the expectation among consumers that free shipping and handling is now the norm, which puts a lot of pressure on retailers to run free shipping promotions into perpetuity.”
    KC's View:
    We’ve been saying for years that we believe free delivery is going to end up being a fact of life for a lot of businesses. The economics of it all are still to be determined.

    Published on: January 8, 2003

    In what is becoming an ever more common refrain, the Newark Star Ledger reports that despite the well-known demise of e-grocery retailers such as Webvan, there is life left in the game.

    “It’s hard to find an Internet business, no matter how off- the-wall, that's vanished completely,” the Star Ledger reports. “Someone is doing it, somewhere, even if it's on a scale that's not all about IPOs and industry dominance. And so, while no one really expects to see the return of the dot com frenzy, we're seeing ideas, once maligned, returning in less ambitious ways.”

    Whether it is services like PublixDirect, which is an extension of an existing brick-and-mortar retailer, or pure plays such as FreshDirect.com, which is both local and niche-oriented, companies are seeing that there is a consumer component that wants and even needs online shopping.
    KC's View:
    We agree with all of this. E-grocery has never been dead…it was just done badly in certain places by certain companies.

    That’s not to say that it’ll all be rosy from here on in. This an evolving business strategy. The upside is enormous.

    However, there is a possible downside…as the following story suggests.

    Published on: January 8, 2003

    Albertsons 165-store Southwest Division has created a program called “Nutrition in Focus” that will offer a 'dietitian on-call' to anyone with nutritional questions and concerns.

    “My goal is to help Albertsons shoppers translate the general and often far-reaching health concepts they hear or read about into specific meal planning ideas and better shopping habits,” says Michelle Gorman, R.D., Albertsons newest corporate dietitian. “Whether you're a busy parent, shopping for a picky eater, struggling with diabetes or concerned about aging, we understand the stress that accompanies your grocery choices.”

    The “Nutrition in Focus” is designed to make Albertsons a resource for healthy eating to include food preparation tips and nutritional information for shoppers and employees -- both online and in stores.
    KC's View:
    This is exactly what retailers should be doing -- creating programs relevant to both food and consumers. By serving as the unique and differentiated bridge between the two, the canny retailer can be both essential and informative.

    Smart move by Albertsons.

    Published on: January 8, 2003

    One of the things that people often say when they’re endeavoring to lose weight is that they are confused about which plan to follow -- that there are so many options to choose from that there tends to be what is often referred to as “paralysis by analysis.”

    In the January/February 2003 edition of Rodale’s Men’s Health, there is an article, “Slimming Lessons,” that suggests that there “are some surprising ways in which nutrition science is remarkably clear and straightforward.” Among them:

    • To lose weight, you must cut calories.

    • The best food for appetite reduction is whey.

    • Meat kills fat.

    • Fried foods are a bad idea. Always.

    • Fiber is a good idea. Always.


    You can find this article on page 91 of the magazine, on newsstands now.
    KC's View:
    Because retailers are on the front lines of where, how and why people buy food, it makes sense for retailers to endeavor to help consumers understand the realities and myths that surround the science of losing weight. Using articles like this one, and others that appear in many Rodale publications, as a basis for talking to consumers about smart ideas for their diets, is simply a good idea.

    Always.

    Published on: January 8, 2003


    • Wal-Mart plans a major push into the financial services business. According to a report in the Financial Times, the company has piloting a number of services such as check cashing and wire transfers that it believes it can effectively offer without owning a bank. These services now will be extended to many of the company’s US stores, and the company is looking for other financial products it can bring to the marketplace.

      “I think financial services is an opportunity,” Wal-Mart CEO Lee Scott told the Financial Times. “I'd like to do it more along the Wal-Mart way than other people's.”



    • A new study suggests that 85 percent of Americans believe that using biometrics to verify a person’s identity is “acceptable.” The study, commissioned by the US Department of Justice, indicated that the acceptability of the technology is dependent on sufficient privacy safeguards being in place.



    • Nash Finch bought five South Dakota Sunshine Food Markets. The price was not released. Nash Finch reportedly will convert three of the stores to the Econofoods banner. The other two will be evaluated before a decision is made.



    • Winn-Dixie Stores appointed Larry White to be director of operations services. White is an 18 year industry veteran, having worked at Tom Thumb and Randalls.

    KC's View:
    Regarding the Wal-Mart story…It was only a matter of time before Wal-Mart made a move on this area, and only a matter of time before Wal-Mart attempts to get involved in virtually every business in which it perceives a profit can be made and its relationship with the consumer can be exploited and extended.

    Re: the biometrics study… If you want to see where biometrics is headed, go rent a copy of “Minority Report.” Ultimately, because biometrics will be sold to the consumer as being a near-foolproof way to ensure safety and security, the consumer will be accepting. Problems will only emerge if and when business decides that it's okay to exploit the system's information base for gain...

    While "Minority Report" may be a good measurement for where the future is headed, the old "The Prisoner" TV series may be the cautionary tale to watch...