business news in context, analysis with attitude

In response to an essay we wrote the other day about “The Return of E-Grocery,” we got an email from a somewhat skeptical email from Robert Reynolds, a member of the MNB community:

“I know you are a fan.

But, is anybody making any money? By other than creative accounting?”

Good question.

We know of independent retailers that are generating significant incremental sales using the web, and doing so in a cost-effective way because they’re utilizing outsourcing companies (like, an MNB sponsor) to provide the Internet infrastructure. Their shopping baskets are bigger, and continue to grow as time goes on.

And Ahold has said that four out of the five markets where its Peapod e-grocery service operates are profitable, though it won’t specify which one is not. While Ahold’s finances certainly have become suspect, there’s no reason to think these figures are fraudulent.

So yes, it sounds like there are a few people making money.

On the subject of McDonald’s putting wireless Internet connections into some of its stores, we continue to get email. One MNB user wrote:

“Yesterday, after reading your piece on McDonalds trying out Internet access in their stores, I had an interesting experience at a McDonalds. I ordered a large McFlurry at the drive through. Got to the pay window and the employee, who was obviously foreign, gave me the price of the small McFlurry. I told her that it was supposed to be a large one. She stared at me blankly. She could not understand a word I said! I tried to use sign language and then finally gave up. Went to the pick up window. Sure enough, here comes a small McFlurry. I said I ordered a large. He stared at me blankly.
He couldn't understand English either. He understood sign language and did, after some awkward gestures, bring me a large McFlurry. (Small consolation for the experience, I was not asked to pay the extra for the large, probably because that would involve speaking English and using math.) .

“I understand that they have a lot of turn over and have a monumental problem with maintaining consistent high quality standards. Ray Kroc built the business on consistent high quality and would not be venturing off into areas, like internet access, that are foreign to high quality fast food business.

“Seems to me that there is enough foreign to the business in McDonald’s already.”

Regarding the possibility that Roundy’s and Bob Mariano might acquire Dominick’s in Chicago, we noted that Mariano – who used to be CEO of Dominick’s before it was sold to Safeway – would be greeted as a hero by many if such an acquisition took place.

One MNB user wrote:

“Until they find out that Mariano would disband the union like they did at the Kohl's stores.”

But another wrote:

“Knows the consumers in Chicago. Knows how to generate sales. With him at the helm, Dominick's could once again become successful.”

On the subject of Wal-Mart bringing a version of its Neighborhood Market format to the UK, MNB user Gail Ginther wrote:

“It appears that there is a parallel development to the neighborhood markets going on in the UK. I get a feeling from the tone of the announcement…that those stores are not only clearly being pursued in order to conform to local building restrictions, but are even being placed into existing business districts (my interpretation of the phrase "the aim is to create high street stores"). Without knowing the full background, it appears that Wal-Mart is working within local restrictions overseas, rather than trying to circumvent them. Too bad they don't seem to have the same attitude here at home.”

We ran an email yesterday from an MNB user who got excited about the possibility of having a Trader Joe’s in the Minneapolis/St. Paul area, and suggested that if the city could only get an Ikea or a Peet’s, life would be complete.

One MNB user wrote:

“I've lived all over the US and now in Minneapolis (working with Target HQ). I love this area, but cannot figure out why there is limited grocery or home improvement competition here. We have Cub--which is okay, Rainbow—not okay, and Super Target--nice but limited assortment, and a couple high end Byerly's.

“It would be great to have a mainstream grocery competitor like a Kroger, Safeway, or Albertson's format in town. Can you help me understand why the Twin Cities lacks such grocery chains?? Also, there are no Lowe's, Expo, or Great Indoors stores in the state, but Home Depot is building nearly as fast as Walgreen's. We're cool enough to have a Planet Hollywood, Hard Rock Cafe, and now Krispy Kreme, but the aforementioned retailers are nowhere near us. What gives??”

Beats us. Must be the damned cold.

Besides, most people would kill for a Byerly’s…

And another MNB user wrote:

“Please inform the person who also wished for IKEA in the Twin Cities, that I read a St. Paul Pioneer Press article a month or so ago stating that IKEA was looking for various sites around the Twin Cities. Let the joy begin again.”
KC's View: