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    Published on: January 16, 2003

    We reported yesterday that Miller Brewing is catching heat from some viewers upset about a new television commercial that features two beautiful women arguing about whether Miller Lite is best because it tastes great or is less filling…an argument that deteriorates (or is it escalates?) into a mud wrestling match in which they end up stripped down to scanty lingerie. The catfight is portrayed in the ad as the fantasy of two guys who say it would make a great beer commercial, as they are stared at by two women who clearly think they are the biggest morons on the planet.

    Apparently, 200 viewers have complained to Miller…but 200 have written to say how much they like the ad.

    We got some reaction to this ad as well…

    One MNB user wrote:

    “I rarely find an issue to get fired up about, but this commercial set me off the very first time I saw it- during a NFL Sunday game. Yes, I am a woman, and yes I watch football- I put up with the ads such as Coors ads which allude to how great cold beer and hot female twins are, because in the ads there is a more mainstream appeal to a broad audience and does not depict women as violent, surgically enhanced and incapable of communicating. But the Miller commercial blatantly exploits women in all those senses and more.

    “I am offended that Miller and the Content Guy both allude to the fact that ‘hey it appeals to guys.’ That may be the case, but as the primary shopper for my household who makes 99% of all purchase decisions, including the beer for my 27 year old husband, the ad failed miserably at appealing to what you both should know about basic consumer buying habits/trends, women do most of the shopping. And in this case I will no longer purchase Miller products.”

    And we respect that opinion.

    Another MNB user wrote:

    “The vote in my house is 2-1. Usually my wife votes for our 15 month old, however, in certain cases daddy gets his way and his sons vote.

    “Not only is this ad much tamer than certain reality shows, it is a little less ‘sleazy’ than the Coors commercial with ‘twins’ and it has an understandable ‘spoof’ that is clearly missing in the ‘twins’ commercial..”

    We would agree that the Miller ad walks a delicate line between being exploitive and ironic…to us, that’s what makes it such a terrific ad.

    MNB user Ronald Cook wrote:

    “Leave it to a brewing company to nail their target market right on the head. The commercial is incredible in its ability to grab everyone's (male and female) attention for the full ad. Even those who don't drink beer or care about beer will pause to watch this spot. In the advertising world, that is everything. In addition to being an attention grabber, you can actually remember the product that is being pitched when the thing is over. Miller has hit a bulls eye with this one.”

    And another MNB user wrote:

    “Well, I'm in the supposedly easily-offended demographic of college-educated women in their 30s, and I think it's hilarious.”

    Regarding Kroger opening Food 4 Less stores in the Chicago market, one MNB user wrote:

    “If their marketing strategy is really one centered primarily on being the price leader, with a typically formatted store layout, verses the current leader utilizing a "value strategy" (i.e.: quality, convenience, variety, price, location) or the "big box" concept of Cub and Sam's, They might just be right on target. The Chicago Market could use a price leader now.

    “Concerning the Ahold rumor of them being interested in the Dominick chain, this could be very interesting as it rolls out. Ahold has in their employ people that know the Chicago Market very well.”

    We got some email yesterday regarding our comments about Kinko’s troubles, including this one from MNB user Jane Larson:

    “When I was in grad school (never mind when that was) I practically lived at Kinko's. They were smart, fast, friendly, and always made everything look better than my expectations. They had the best prices in town, too.

    “So imagine my horror when I went into my local Kinko's to print my holiday letter to the relatives, which had color pictures embedded in the text. 99 cents per copy (!), and I was doing a 2 sided letter (sure, it sounds long, but the relatives love it and I happen to be a very amusing person). The manager didn't know of any available coupons and was about as helpful as a brick. I waited in a very long line for help while 3 people behind the counter talked football. So, I left, went home, found an on-line coupon (39 cents per copy, and why didn't the manager know about it and suggest that I log on to one of their computers and print one? or have some printed behind the register?), came back to Kinko's FOR THE LAST TIME EVER and printed my letter. Happy holidays to you bozos, too.

    “I may be amusing, but I'm unforgiving of bad customer service.”

    It’s odd when a company that was absolutely RIGHT ON in its approach to services and service suddenly seems to lose the knack, like when a .330 hitter suddenly goes into a slump. The difference is that they are going to keep pitching to the hitter, and he’ll eventually work his way out of the slump. When customers stop going to a retailer, it’s very hard to get them back in the door.

    Another MNB user put it very well:

    “A business plan is no substitute for vision.”

    And that applies to all of us.

    We wrote yesterday, in a commentary about new predictions for 2003 retail sales, that maybe in the light of current events it makes more sense not to make any predictions. Predictably, this generated some response, including this note from an MNB user:

    “I agree with your assessment on this. Not having a yardstick to measure against may help the economy look beyond what it hasn't been doing and look forward to what it CAN do. Don't all the diet guru's tell you NOT to weigh yourself when you are trying to lose weight as that just make you feel like a failure?”

    And another member of the MNB community wrote:

    “After the recent holiday hullabaloo over the consumer spending not matching up with the retailers' forecasts one wonders if perhaps forecasts are an unrealistic measurement. In the current economic climate, success possibly should be measured by 1. Is the company still here? and 2. Did we post a profit at all? and maybe 3. How high is our debt?

    “This shouldn't be confused with goals..., which should be well thought out and ambitious as well as creative. After all, if you shoot at the ground you are more than likely to hit it.”

    Sounds like a good place to repeat the sentiment expressed earlier:

    “A business plan is no substitute for vision.”
    KC's View:

    Published on: January 16, 2003

    • Steve Heyer, Coca-Cola's new president and COO, Steve Heyer, announced a streamlining and reorganization of the company’s North American division:

      • Sandy Douglas, president of the North American division, will be the company’s chief customer officer, responsible for working with bottlers to develop a new customer-service strategy.

      • Don Knauss, president of Minute Maid North America, will lead the integration of Minute Maid North America and Coke North America into a single business unit.

      • Chris Lowe, chief marketing officer for North America, will now be responsible for Coke's total business in North America. Tom Moore will continue as president of Coca-Cola Fountain.

    • Robert Kopriva has been named president and CEO of Sara Lee Corp.’s Cincinnati-based packaged meats division, which has brands that include Jimmy Dean, Hillshire Farm and Ball Park. He succeeds William Geoppinger, who retired.after 40 years with the company. Most recently, Kopriva was president and CEO of Sara Lee Foods’ U.S. and Mexico operations.

    KC's View:

    Published on: January 16, 2003

    Target Corp. reportedly will settle a discrimination suit filed by the U.S. Equal Employment Opportunity Commission on behalf of a former employee for $95,000. The woman charged that Target had refused to transfer her to an open position because she had multiple sclerosis, and even disclosed her condition to another possible employer.

    While Target denied the charges, it agreed to pay the settlement as well as provide training to employees and adhere to all the requirements of the Americans with Disabilities Act.
    KC's View:

    Published on: January 16, 2003

    The Wall Street Journal reports that Pfizer Inc. will begin putting bar codes on individually packaged pills used in hospitals. The goal, according to the company, is to prevent or reduce errors in administering medication.

    According to the WSJ, medication errors account for more than 7,000 deaths each year, and this move by Pfizer is the “most comprehensive by a major pharmaceutical company to make medicines used in hospitals compatible with computerized systems.” The company said that it is using existing technology to make the move, and at “little additional cost.”
    KC's View:
    Assuming all the technologies are made compatible, it seems to us that this is just a harbinger of things to come.

    Published on: January 16, 2003

    Reuters reports that if the UK Office of Fair Trading eases restrictions on the number of pharmacies in the country, a truckload of new competitors are expected to target the UK.

    At the top of the list are supermarket retailers such as Tesco and Wal-Mart’s Asda Group, which would love to get into the pharmacy business in a big way.
    KC's View:
    One assumes that the same thing that happens here will happen there…pharmacies opened by supermarkets generally are the last department to break even…and once they have, these pharmacies end up being a key to generating consumer loyalty.

    Published on: January 16, 2003

    The Dallas Morning News reports that Eckerd Corp. plans to build 250 stores a year during each of the next three years, largely in markets such as Dallas-Fort Worth, New York and Atlanta, as it looks to keep up with its larger competitors, Walgreen and CVS.

    In recent years, Eckerd focused on replacing older stores in markets where it already had a presence, as well as getting rid of unproductive categories and improving its inventory management.

    Eckerd, a subsidiary of JC Penny, has been said to be “for sale” for the right price.
    KC's View:

    Published on: January 16, 2003

    Here’s what seems like a very smart, very timely idea…

    A new Web service,, is allow fliers using Ronald Reagan National Airport in Washington, DC, to order online from a menu of five sandwich baskets, which are then available for pickup at the airport’s TGI Friday’s location.

    Cost of the sandwiches ranges between $7 and $9.

    The company plans to expand its service to airports in Providence, R.I., Newark, N.J. and New York City's John F. Kennedy International Airport by mid-February, and be in most major airports by the end of the year.

    Only sandwiches are being offered at the present time, in view of security regulations about cutlery.
    KC's View:
    A well-timed venture, in view of the fact that numerous airlines are either cutting out foodservice or thinking about charging for it.

    We have one suggestion for a menu addition: sushi.

    Another suggestion: When it gets into a market, it ought to figure out a way to place fliers on the seats of every rental car at the airport, with a menu and URL. It’d be a great way to communicate with the business travelers who will be its primary users.

    And another thought. CarryOnCuisine should be careful about its expansion plans. We’ve seen too many ventures fail because management got stars in their eyes and didn’t work out the bugs first. Of course, if this business catches fire, we’re sure CarryOnCuisine will start to see competition from various venues.

    Published on: January 16, 2003

    In our story yesterday about the McKinsey study on value retailing that was presented at the FMI Midwinter Executive Conference, we accidentally misstated a statistic quoted in the presentation.

    Essentially, it works like this…

    Overall grocery expenditures by consumers are allocated across three different kinds of trips to the store: stock-up (28 percent of the time), routine (50 percent), and fill-in (22 percent).

    McKinsey’s research showed that value grocers captured share in each type of occasion
    as follows: stock-up (25 percent), routine (20 percent), and fill-in (10 percent).

    These share numbers are independent of each other, and should not be added together.
    KC's View:
    We apologize for the confusion…but repeat the basic premise. Value retailers are making inroads in every kind of shopping, including the kinds of trips (fill-in and routine) that many traditional grocers thought might be beyond them.

    Published on: January 16, 2003

    News & Analysis from
    Safeway, the UK’s fourth largest grocery retailer, is at the centre of a frenzied takeover battle. The first shot was fired by Yorkshire grocer Morrison's last week when it announced that Safeway had agreed to a recommended share offer of GBP2.9 billion (USD4.3 billion). This announcement was followed four days later by Sainsbury’s, which put a cash and share offer on the table equating to £3.2 billion (USD4.8 billion). Not to be outdone, Wal-Mart is now poised to enter the auction, with an “attractive cash offer” o be put forward subject to talks with the Office of Fair Trading. Further, Tesco, which has stayed out of the battle as the acquisition would inflate its market share to an unacceptable proportion, has also stated that it may be prepared to buy Safeway’s c-stores.

    Safeway has had a chequered history in UK grocery retailing, with the existing store network representing a mixed bag of stores ranging from convenience outlets to hypermarkets. The company, which was originally owned by US retailer, Safeway Inc, opened its first outlets in the UK in 1962 and was acquired by the Argyll Group in 1987. The Argyll Group operated a number of food and drinks businesses, best known of which were the Scottish and northern-based Presto and Lo-Cost supermarket banners.

    Following the acquisition, Argyll integrated the two retail companies and converted many of the larger Presto stores to the Safeway fascia, selling the Lo-Cost stores in 1994. In the 1990s, Argyll proceeded to sell its non-core businesses to focus on food retailing and in 1996 the company name was changed to Safeway plc with all stores rebranded Safeway.

    However, Safeway has always struggled to carve itself a clear niche in the market, which has long been dominated by the likes of Tesco, Sainsbury’s and Asda. In 1999, in an effort to rejuvenate and refocus the chain, Carlos Criado-Perez, formerly a Wal-Mart director, was brought in as chief executive. However, even with his more promotionally driven pricing strategy the chain failed to shake off its high price image and truly compete with the market leaders.

    However, what Safeway does have that is of great interest to the other majors is a large store portfolio with nearly 200 superstore-sized outlets – ample potential for conversion to a Morrison’s superstore, Sainsbury Savacentre or Main plus format, or a Wal-Mart Asda superstore/hypermarket – and a similar number of supermarkets.

    Given the prevailing planning climate in the UK, which largely restricts new superstore and hypermarket development, Safeway provides a unique opportunity for any of these retailers to significantly enhance their market share and narrow the gap with Tesco. However, with the exception of Morrison’s, which commands around 6% of the UK grocery market (sales of £3.9 billion), both Wal-Mart’s and Sainsbury’s bids would be referred to the Office of Fair Trading as a complete takeover of Safeway would mean that their market share would exceed the 25% threshold. Given this scenario, it is likely that a successful bid either by Wal-Mart or Sainsbury’s would result in the sale of 80 or more stores. Watch this space!
    KC's View:

    Published on: January 16, 2003

    There are varying reports out of the UK saying that the Reuters reports that Britain's consumer affairs authority, the UK Office of Fair Trading (OFT), has begun the examination of at least some of the bids that have been made for Safeway Plc there.

    Both Wm. Morrison and Wal-Mart have formally filed their bids with the OFT. reports this morning that the Morrison’s bid states that its acquisition of Safeway would result in just seven locations out of a total of almost 600 where there is overlap, and that a deal will create a strong fourth retail food player in the UK.

    In a breaking development this morning, Reuters reports that Sainsbury looking for a company to buy as many as 90 Safeway stores that it would need to unload if it were to win the sweepstakes to acquire Safeway Plc.
    KC's View:
    We’re rooting for Morrison, just because a battle that includes four strong companies is a lot more interesting to write about that one in which there are three combatants. And the way these companies are going, it looks to be blood sport at its best.

    Curious about why how Safeway got into this position, and why its assets are being pursued so hungrily? Our friends at M+M Planet Retail graciously gave us some background…, which is in our next story.