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    Published on: October 6, 2003

    In Major League Baseball Division Series action…

    The Boston Red Sox defeated the Oakland Athletic 5-4, coming back from an 0-2 deficit in the best-of-five game series to even the series at 2-2. The winner of tonight's final game will play the New York Yankees, who defeated the Minnesota Twins 8-1 to move on to the next round. It doesn’t get any better than this, unless you count…

    …The Chicago Cubs first playoff success since 1908, as they defeated the Atlanta Braves 5-1. The Cubs will move onto the next round to play the Florida Marlins, who defeated the San Francisco Giants over the weekend.

    To quote the MLB ad slogan…We live for this.

    And still are rooting for a Red Sox-Cubs World Series.



    In Sunday's Week Five National Football League games…

    Minnesota 39
    Atlanta 26

    Cincinnati 16
    Buffalo 22

    New Orleans 13
    Carolina 19

    Oakland 21
    Chicago 24

    Arizona 7
    Dallas 24

    Seattle 13
    Green Bay 35

    Denver 23
    Kansas City 24

    Tennessee 30
    New England 38

    Miami 23
    NY Giants 10

    San Diego 21
    Jacksonville 27

    Washington 25
    Philadelphia 27

    Detroit 17
    San Francisco 24

    Cleveland 33
    Pittsburgh 13
    KC's View:

    Published on: October 6, 2003

    The depth of feeling about the issue of importing inexpensive prescription drugs from Canada continues to be impressive, as we continue to get emails from the MNB community.

    One MNB user wrote, in response to another letter we posted last week:

    As to the gentleman who travels to Bangkok or other far east areas and makes annual purchases for medicines, clothes and other things., how does he deal with customs and it applied charges?

    Good question.

    Another MNB user wrote:

    How beneficial would it be to restrict the advertising and promotional activity of medications by all the drug manufacturers and plow all those millions into the lowering of costs for the people in the US now buying their drugs in Canada......

    Excellent point. Not only would this potentially lower costs, but it would save us from all those annoying commercials for pills that will perform some miraculous function…though always with the caveats that your hair may fall out, your teeth will turn blue, your skin will turn orange, and you could become impotent…




    One MNB user asked that we pose the following question to the MNB community:

    How do supermarket chains/wholesalers etc. place slotting allowances on their books? Why doesn't the IRS investigate how these grocery business runs this influx of capital through their business. Do they pay taxes on the money they receive?

    Anyone want to take a whack at this?




    In response to the piece last week that noted Coors' plan to launch a low-carb beer, one MNB user wrote:

    Let be known that Miller Lite beer was the original Low Carb Beer...

    Noted.




    We continue to get emails about the Minnesota town that has initiated an anti-big box store campaign. One MNB user wrote:

    Although the town of Excelsior, Minnesota has a population of about 2400, it is a charming old Lake Minnetonka resort town and in very close proximity to Minneapolis. It is, in fact, facing the threat of big box stores. The town is one of the few left that has maintained the old charm and small-town feel in the middle of the maddening sameness of suburbia. It lies directly in the gun sights of those who would like to "pave paradise and put up a parking lot". I don't blame them for not wanting to sacrifice their way of life for a few silver shekels and yet another Wal whatever, Home Despot or Best Bye-bye.

    I live in an adjacent "burb" that has all those things (as well as traffic, road rage and rudeness as a by-product)--all close enough for the Excelsior-putians to shop close to home without soiling their own nest. Can you tell I have a fondness for the place?





    In response to the story last week about the $138 million that the "experts" say Kmart owes them for getting the company through bankruptcy, one MNB user wrote:

    This type of "data" is becoming less and less newsworthy as we all become
    numb to this size number. Of course, it will be approved and paid.


    We thought that it was a shame that all the former employees and shareholders who got screwed by former management couldn’t find a way to get paid, which prompted one MNB user to write:

    I couldn't agree with you more regarding the K-Mart employees and the claims they rightfully have.




    On another subject, one MNB user wrote:

    In response to your reader who said, "So if product offerings continue to be lightened, de-sugared, and in other ways have all the fun surgically removed from them we'll be a healthier but more stressed-out populace. Bring on the Oreos…"

    Yes, this may have been stated in half seriousness, but I am continually surprised that one, we know we have a problem as a nation with nutrition that leads to many health problems i.e. obesity, two we rant and rave about personal responsibilty versus what we are being offered out there in grocery stores and restaurants and yet three, we go along with all those years of advertising and marketing that has taught us - sugar and fat (more particularly the bad fats and corn syrup, yes like the stuff in Oreos) are FUN.

    Well, quite frankly, they're not. They're actually dangerous, i.e. obesity, diabetes (now found in kids), etc. Try the book Fatland and you'll see what I mean.

    I'm really not trying to be a food nazis here, but could we at least attempt to make fruits (the real ones, not the ones found in Snapple) and vegetables fun (our mothers seems to be the only ones with this job)? Then you can have your Oreo.


    The problem with fruit is that you can't twist it apart and find that really great tasting white cream inside…

    (Just joking.)




    And, responding to an MNB commentary last week, one MNB user wrote:

    I'm a cynical old goat but compared to you I'm a regular Zig Ziglar. Today you wrote:

    "But if everyone else goes out of business and only Wal-Mart is left, does the consumer really win?"

    How likely is it that Wal-Mart will put everyone out of business? You need to have more faith in the entrepreneurial spirit and talent available in this great country both in current and future generations.

    Remember all the hand wringing people who were firmly convinced not so long ago that:

    A & P would dominate the national grocery market forever. Hypermarkets would grow to dominate the national grocery market forever. Food Lion would grow to dominate the national grocery market forever. GM would dominate the world auto market forever. AT&T would dominate the world communication market forever. IBM's monopoly of computer technology would never be broken, shortly followed by Microsoft's monopoly of computer technology would never be broken, shortly followed by "How do you compete against Linux and free open source software?"

    Wasn't the conventional wisdom that John Elway could never win a Super Bowl after a string of blowout losses? That only a nuclear conflict with the Russians would result in the Berlin Wall coming down? That as talented as Bill Murray is that he would never be in a really good movie?( I agree with you take on Lost in Translation 100%). Or for that matter after the debacle that was Godfather III that Sofia Coppola had any future in Hollywood? Just because you or I may not be able to figure out how to top Wal-Mart doesn't mean that someone else can't or won't. In fact, I'm convinced someone will. I'm just not sure I'll recognize it when it starts to happen.

    Another example - not only would I have never thought of the concept of Starbucks, if you had showed me the original business plan and asked me to invest I would have told you that you were crazy. Just goes to show what I know. But I am confident that there are smarter, more talented people than me working on the next great ideas even as we speak and that is one of the great strengths of this country.

    Buck up man.


    We feel much better now…




    We were, to be honest, surprised by the number of responses we got to Friday's piece about Jim Bildner, formerly of the yuppie supermarket chain J. Bildner & Sons…

    One MNB user wrote:

    I believe you made a very small unfortunate choice of one word in your last comment on Jim Bildner. Was. I found the story invigorating and refreshing and in my opinion, Jim Bildner IS now, perhaps for the first time, a real stand-up guy.

    When we used "was," it was in the context of a meeting two decades ago, not to suggest he isn’t a stand-up guy now.

    Another MNB user wrote:

    That was a very generous footnote to the article about the current happenings with Mr. Bildner. He was indeed - ahead of his time, look at Whole Foods, etc.. Visionaries lots of times don't succeed - but pave the way for those that follow. Keep up the good reporting - enjoy your daily MNB.

    Thanks.

    Another MNB user wrote:

    Kevin, there was another story beneath the surface of your story today. As you may know, Jim Bildner is the son of Allen and Joan Bildner, who owned Kings Super Market prior to selling it to Marks & Spencer. Jim and his brother Rob, (who owns RLB a distribution company in New Jersey), were at one timed being groomed to run Kings. Jim had ideas of his own and he really wanted to make his own mark. His father is a very dynamic leader and widely admired internationally among food industry executives. Needless to say those were big shoes to fill. I believe Jim wanted to prove he could be successful on his own.

    Since neither Jim nor Rob was interested in taking the reins of Kings, Allen sold the company to M&S in 1986. I am sure a few people have asked where would Kings be today if Jim Bildner had taken over Kings and poured his boundless energy in improving Kings which was in a strong market position prior to selling to M&S.


    It likely would be a different company.

    But in fairness, you also could argue that Jim didn’t take the safe route, which you have to admire. We're a big fan of sons who want to escape, rather than mimic, their fathers' success.

    And another MNB user wrote:

    At the end of the day being a "stand - up guy" is all we have left no matter what kind of successes or failures we've had. Thanks for the reminder.

    Amen.
    KC's View:

    Published on: October 6, 2003


    • Virginia-based K-VA-T Food Stores announced that it will begin rolling out category-specific dollar sections in its stores, incorporating the value concept into a number of packaged grocery sections throughout the store.

      The goal is to have it in all 90 stores by the end of the year.

      The company found that breaking up the dollar format into a variety of categories generated more sales than just having one dollar section in the stores that carried a number of categories.



    • Bloomberg reports that a Delaware judge has dismissed a lawsuit brought against Martha Stewart and the directors of Martha Stewart Living Omnimedia that had accused the style doyenne of hurting her company with the activities that led to charges against her for obstruction of justice.

      The judge said that the company had no legal compunction to monitor Stewart's personal activities, which federal authorities allege included the inside stock trade of $228,000 in ImClone Systems stock in 2001.



    • Connecticut-based wholesaler Bozutto’s announced that it will become the supplier of grocery, perishables and specialty food for the 41-store National Wholesale Liquidators.



    • The Associated Press reports that the Clos du Bois winery is launching J. Garcia wines, featuring the Grateful Dead's Jerry Garcia's artwork on its labels.

      Garcia's artwork already has been on t-shirts and neckties.

    KC's View:
    The ongoing merchandising of his artwork indeed must be making Garcia one of the grateful dead, since he died of a heart attack back in 1995.

    Published on: October 6, 2003

    Ahold announced this morning that it will unveil its recovery strategy on November 7, three weeks later than the date it had said just last week that it would reveal its plans.

    The company also said that it would publish a third-quarter sales update on October 28, with first-half results on November 7. The company also stated that it would file 2002 results under US accounting rules on October 15, with an annual report to follow on October 31.
    KC's View:
    The Ahold annual report is coming out on Halloween?

    Trick or treat?

    Published on: October 6, 2003

    The Chicago Tribune reports that McDonald's is changing the formula for its Chicken McNuggets, one of its most profitable and popular menu items, by selling a smaller, all-white-meat version in all of its 13,600 US stores. To give you an idea of exactly how popular the McNuggets are, this year McDonald's expects to sell 4.8 billion of them.

    The new product is being pitched as a healthier replacement for the old variety. According to McDonald's, each new nugget is about 43 calories compared with about 52 calories before the switch; a box of six all-white-meat McNuggets contains 260 calories and 16 grams of fat, down from 310 calories and 20 grams of fat.

    The slogan being used to hype the new version of the McNugget: "Change is good."
    KC's View:
    The debate in the marketing community is whether these new McNuggets will be successful, or the 2003 version of New Coke. We'll see.

    But here's the question that we think consumers may be asking about all the changes being made b y McDonald's: If you're now selling a healthier salad and a healthier McNugget, exactly why were you selling us less than healthy products all those years?

    Published on: October 6, 2003

    H.J. Heinz Co. announced that it will it launch a low-carbohydrate ketchup, dubbed "One Carb," to add to its line of ketchups that included colored varieties for kids and an organic version.

    The goal of the new product - which will have only one gram of carbohydrates, 75 percent fewer than regular ketchup - will be to meet demand for such products caused by the Atkins diet and its low-carb brethren.
    KC's View:
    One of the things Mrs. Content Guy hated most while on the Atkins Diet was the restriction on ketchup. If it tastes like real ketchup, this will make her happy.

    Which is good. Because when she's happy, we're happy.

    Published on: October 6, 2003

    There were conflicting reports from the UK over the weekend, as The Financial Times said that both Wal-Mart's Asda Group and Sainsbury were looking for grounds on which to make a legal challenge to the government's ruling that only fifth ranked food chain William Morrison Supermarkets could bid to acquire fourth ranked Safeway Plc.

    Shortly thereafter, however, Sainsbury denied the report - though Wal-Mart has not issued such a denial to this point.

    According to the original FT report, neither chain was planning to try and overturn the complete ruling, but just the part that said that they could only attempt to acquire 53 stores that the government said Morrison would have to divest after acquiring Safeway.

    The argument seems to be that this proviso unnecessarily limits their growth possibilities - not to mention limiting Morrison's divestment options as it moves forward.
    KC's View:

    Published on: October 6, 2003

    The Wall Street Journal reports that while wine consumption has grown in both the US and UK over the past decade, vintners are aware that most of this growth has come because of the changing habits of aging baby boomers. "With roughly 70 million Americans reaching the legal drinking age in the coming decade," the WSJ reports, "vintners want to build new brand loyalty, and want to do so by using "sexy lifestyle marketing."

    They’re also looking to events that can educate 25-35 year old drinkers, sponsoring wine tastings in trendy nightclubs, and wine tasting courses in conjunction for graduate students.
    KC's View:
    There could be all sorts of advantages in this sort of approach, not the least of which is the fact that it isn’t all that likely that students are going to look to get smashed on a bottle of 2001 Australian Shiraz. Maybe it'll teach a little moderation, and a better appreciation for good food and wine pairings.

    Published on: October 6, 2003

    The Atlanta Journal-Constitution reports that Coke's Minute Maid brand will roll out a new, cholesterol-reducing line of Minute Maid orange juice. Minute Maid Premium Heart Wise will start appearing in stores at the end of October.

    Heart Wise reportedly will contain plant sterols, an additive used in brands of cholesterol-busting margarine and salad dressing, that may reduce cholesterol by as much as 10 percent.
    KC's View:

    Published on: October 6, 2003

    USA Today reports on a Harvard Medical School study suggesting that children between the ages of nine and 14 who diet are more likely to gain weight than those who do not - in part because once they have denied themselves certain foods, they can ending up overeating or bingeing on those same foods.

    According to the report, "Children who have a few pounds to lose or want to control their weight should aim for small changes that can be maintained over time — limiting supersized portions, switching from 2% milk to skim, drinking less soda."
    KC's View:
    We have had some small experience with this subject, being related to several people who have had eating disorders and been hospitalized because of their unhealthy relationship with food.

    The problem with all the discussion of obesity is that it cannot help but foster certain feelings in kids - feelings they are not capable of controlling at young ages.

    Just look at today's MNB. There's mentions of low-carb ketchup, orange juice that reduces cholesterol, leaner chicken nuggets, low carb beer, and so on… Think how many stories you've seen (and we've written!) on this subject over the past month. When adults are obsessed with weight to this extent, it is no wonder that there is a negative impact on children.

    We remember being in a hospital room visiting a young teenaged boy who was there because he had lost an extraordinary amount of weight, and was in danger of other bodily functions shutting down. His parents and other relatives kept trying to tempt him with a pizza (definitely the wrong approach!), and then the mother said, "I'll have some, I haven't eaten since yesterday." Great message to send to a kid, eh?

    We have a nine-year-old daughter who already looks in the mirror and thinks she's fat, when she's anything but. The danger signs are there.

    There's nothing wrong with caring about childhood obesity, and trying to do something about it. But we should keep in mind that the overall goal is health, not to look like some supermodel or skin-and-bones actor.

    Published on: October 6, 2003

    The Los Angeles Times reports this morning that negotiators for three major Southern California supermarket chains - Safeway, Kroger, and Albertsons - remain at odds with the union negotiators representing 70,000 employees. The contract expired at midnight, and as of this posting, it is believed that a regionwide strike could begin as soon as next Saturday.

    "The only thing that will stop us is a miracle," Rick Icaza, president of Local 770 of the United Food and Commercial Workers, told the LAT. "I've never seen proposals like this. It's apparent to us that they're asking for a strike."

    "We're still at the table, and we have every intent to try to avoid a work stoppage," said Terry O'Neal, a spokesman for Kroger's Ralphs chain.

    The chains are pushing for cuts to health-care benefits and pensions and a proposal to create a significantly lower wage and benefit package for new hires - proposals that they say have to be met because of declining profits and increasing competition from the non-unionized Wal-Mart.
    KC's View:
    This looks to us to be a face-off that may not be able to be avoided…and which could have enormous impact on both the chains and the nation's union movement.

    Published on: October 6, 2003

    The Atlanta Journal-Constitution reports on the evolving tendency of Wal-Mart Supercenters to house other retail businesses, including beauty salons, optometrist offices, tax preparation offices, McDonald's franchises, and now even Krispy Kreme doughnut shops.

    "The world's biggest retailer is stuffing more and more satellite stores and services under its gigantic roof, hoping to give consumers one more reason to stop in," the paper reports. 'It adds variety,' said Wal-Mart spokesman Tom Williams. 'We're looking to make the shopping experience exciting and fun.'"

    The upside for businesses opening shops inside Wal-Mart is that they have an enormous amount of traffic. The downside is that an over-reliance on Wal-Mart puts it in the position to be able to make or beak a smaller business.
    KC's View:
    Isn't there also the risk that with these additional shops, Wal-Mart might be going off message a bit. Part of Wal-Mart's appeal, it seems to us, has been the perception of low prices in a tightly controlled environment.

    But what if the perm job in the Wal-Mart beauty parlor isn't the cheapest in town? Or the optometrist gets something wrong? Don't events like these - even if accidental - put Wal-Mart at risk? The danger of opening too many of these satellites under one roof is that the business ceases to stand for that one thing, but rather a collection of other things.

    Published on: October 6, 2003

    There were conflicting reports from the UK over the weekend, as The Financial Times said that both Wal-Mart's Asda Group and Sainsbury were looking for grounds on which to make a legal challenge to the government's ruling that only fifth ranked food chain William Morrison Supermarkets could bid to acquire fourth ranked Safeway Plc.

    Shortly thereafter, however, Sainsbury denied the report - though Wal-Mart has not issued such a denial to this point.

    According to the original FT report, neither chain was planning to try and overturn the complete ruling, but just the part that said that they could only attempt to acquire 53 stores that the government said Morrison would have to divest after acquiring Safeway.

    The argument seems to be that this proviso unnecessarily limits their growth possibilities - not to mention limiting Morrison's divestment options as it moves forward.
    KC's View: