Published on: January 22, 2004We had a story yesterday about a company called "Dream Dinners" that sells people a month's worth of meals that can be frozen and cooked later; what makes "Dream Dinners" intriguing is that patrons go to franchise locations and make their own meals - customizing them for their own tastes by subtracting certain ingredients and adding others. All the ingredients and pans are supplied by the company, as is the instruction.
The company says that in addition to providing healthy, good-tasting meals, it saves patrons both money and time - the food costs less than it would at supermarkets, and less grocery shopping is required.
MNB user Paul Schlossberg sent us a link for another company involved in the meal solutions business, "Seattle Sutton," which provides people with "freshly prepared meals - not frozen or dried - for an entire week (7 breakfasts, 7 lunches, 7 dinners, 21 total)." And he offered some provocative thoughts about what all this means:
This looks to me like an evolving "disintermediation" movement. This is a financial term used when funds are withdrawn from one bank and invested elsewhere at a higher return. Banks once held almost all of people's savings - but banks did not evolve (50 years ago) and other financial services arose to compete for and capture a significant share of savings (at higher rates).
Applying "disintermediation" in this case - consider that a new competitor with lower costs (and possibly a better and more appealing product) "steals" customers from an established channel (supermarkets). These new entrants are not facing slotting fees and have simplified shopping for their customers. One company even involves shoppers by letting them cook their own meals - if they don't want to buy finished meals.
Most supermarkets have not evolved effectively in meal solutions selling efforts. There are a few successful exceptions. MNB has presented good insights about some who do it well.
Where and how will this idea of selling finished meals show up next? Is it possible that convenience stores will play a role in this disintermediation process for the American meal? After all, the 130,000 c-stores far outnumber supermarkets and are well-placed for fast in-and-out shopping as commuters head home at the end of the workday.
Two different companies, so far, have popped up as new alternatives to where we can buy dinner. You've got to wonder if there are others doing the same thing on a local or regional basis around the country. How do these meals taste? Are the heating directions clear and simple to follow?
Just what supermarkets needed - more competition. How about losing shoppers and their meal purchases (as ingredients or as finished meals) from supermarket aisles? From the price points being offered, this doesn't look like a scenario for a price war. That takes away one strategy from supermarkets in responding to this competitive threat.
The c-store thought makes us wonder about the announced strategies of two different companies: Wal-Mart, which plans to open more than 160 c-store/gas stations in the parking lots of its supercenters this year, and Ahold, which is divesting its c-stores because they are a non-core business.
Seems to us that you could suggest that one of these companies knows that the core business is finding new ways to reach out to the consumer, and that the other is so busy trying to cut costs and save money that what should be the core competency - solving customer problems centered on food - has been lost.
Sure, it is more complicated than that. Life's sort of like that. But there's clearly something going on here worth paying attention to.
Regarding Ahold's decision to move its US headquarters from Virginia to Boston, one MNB user wrote:
That is a big deal. That move involves more than just the few dozen employees who will be severed as a result. (Is Ahold going to replace them with people locally in Boston, by the way, or what?) I personally went though this with Fleming here in Dallas. I worked for a "big 3" Food broker managing lines nationally for the Fleming team. When Fleming went belly up, the broker had no choice but to let all of us go. I'm not bitter about that, I'd have made the same decision.
My point is that, as in Dallas, many companies have Ahold teams that just became expendable. Now I realize it's not exactly the same because as far as we know, Ahold will still be around but I don't see every manufacturer and broker moving all those people from VA to MA. You and I know that won't happen. Several people will be let go, some may be replaced in Boston but in many cases, the folks already in Boston will just pick up the slack.
Consolidation is a beautiful thing, eh?
Repercussions that, we must admit, we hadn't even thought of.
No wonder they call this a jobless recovery.
Another MNB user wrote:
Basically, Ahold is waking up to the fact that the operating companies obtained zero synergy as being part of Ahold.
As an aside, although 200 jobs were lost at Tops during the Shared Services transition to Carlisle, more than 200 jobs were added in Carlisle. Does that sound like synergy?
Another member of the MNB community had a different explanation for the Ahold move:
Ahold moves out of Washington.....because Wegmans is moving in! (Dulles store opening soon!)
In response to our story about Fair Trade bananas being sold at Wild Oats, one member of the MNB community wrote:
Although I am all for fair wages and work conditions, these "initiatives" can often be "feel good" initiatives. "Fair Trade", "Organic", "Shade Grown" do not always equate with quality. Nor are they always better tasting. It is, however, a step in the right direction. Quality and good value remains most important to the consumer.
And another MNB user chimed in:
In response to your story "Yes, We Have Fair Trade Bananas", and in light of the ongoing labor issues, perhaps TransFair USA should turn their sights inward upon our own retailers to ensure they too are paying living-wages.
Now there's a concept…
Our story about the AFL-CIO calling for nationwide picketing of Safeway stores elicited the following email:
Seems like the union is picking on the wrong company. Safeway has always been union. Why don't they pick on the non-union stores and bring them up to union pay scale? They would not be having a problem if there were not so many non union stores at a lower cost.
We made a similar point yesterday, and MNB user Ted File observed:
Kevin, again you hit the nail on the head. I can think of nothing worse for Dominick's to have right now than pickets out in front of their stores.
Sure, many consumers will cross and a few others will sympathize but then remind the pickets that we are not California and why discredit Dominick's for something over which they have no control. Randall Onstead is getting his feet on the ground and the personality of the stores are changing. That's the good sign. Let's all hope that the situation in Cal gets closed soon....too many have already suffered.
Regarding the divisive situation that exists between management and labor in California, we wrote yesterday that "the chains' managements can't be solely blamed for this; the unions have helped to engineer a labor culture that doesn't make a 'stakeholder' culture possible."
To which one MNB user responded:
"Stakeholder".......common everyday usage word at Wal-Mart.
Stakeholder culture runs throughout the Wal-Mart chain of associates. It is preached and practiced there unlike at many other companies who only give lip service to the practice of employees being totally involved in their company's policies and practices at store level and their thoughts being part of the consideration in instituting new ideas.
Unlike what you read about going on at Wal-Mart in newspapers and magazines.
Good point. Which is probably one of the reasons Wal-Mart is so successful.
That said, the questions being raised about the company's labor policies suggest that NOT EVERYONE feels like a stakeholder. How bad the situation is remains to be seen. And proven.
Just being called a "stakeholder," however, doesn't mean that a person actually feels like a "stakeholder."
And, regarding the growth of big box stores in the US, MNB user Todd Hale wrote:
No doubt that big box stores are on an aggressive growth pattern as Wal-Mart Supercenter expansion continues and other retailers look to "supersize" too. However, the fastest growing retail segment in terms of store count is the Dollar Store channel. The top five Dollar Store chains added over 4,400 stores between December 2000 and December 2003. Within the Food, Drug, Mass, Convenience, Dollar Store, Hardware/Home Improvement universe, the Dollar channel has two of the top three retailers (based on store count) and they also hold the number eleven position. Expansion continues as Family Dollar looks to add about 500 net new stores in 2004 and Dollar General plans to add 675 stores. In addition to offering low prices and "treasure hunt assortment", these retailers are carrying an increasing amount of national brands to improve their image and drive larger shopping baskets. Additionally, many of these stores are located in Wal-Mart heartland offer consumers a more convenient shopping trip than what is available at their the local Wal-Mart Supercenter or Grocery retailer.
Walgreens' aggressive store expansion also shows that "bigger isn't always better" as they are well positioned to take advantage of the aging population boom - many aging consumer will likely find the trips from the super store parking lots almost as daunting as walking up and down the store aisles.
Point taken. Thanks.
Finally, we had an interview yesterday previewing an upcoming session at FMI's MarkeTechnics conference, "How To Keep Your CEO Out Of Jail." This prompted one MNB user to write:
FMI would get a much bigger turnout for a "How to put your (former) CEO in Jail" seminar.
The number of former Fleming associates and shareholders alone who had lives, careers and savings destroyed by the plunder and blunder gang of talent-free executives who ran Fleming would fill the Moscone Center. I'm sure folks from Ahold & Kmart could also bring an SRO crowd too.
There's a lot of bitterness out there, and it isn’t going away anytime soon. This level of anger and mistrust is something that the industry has to deal with, because it soils the image of the business, and can't help but affect consumer perceptions in the long run.
- KC's View: