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    Published on: May 3, 2004

    CHICAGO – One of the mainstays of any Food Marketing Institute (FMI) Show is “FMI Speaks,” the annual state of the industry review delivered by Michael Sansolo, the organization’s senior vice president.

    Among the warning signs in this year’s report:

    • Food industry retail sales were up 2.4 percent in 2003, as compared to the 1.6 percent increase of a year ago. But the sales increase was offset by 2.2 percent inflation.


    • Alternative formats continue to lure price-conscious shoppers, with 21 percent of shoppers saying that a discount store or supercenter serves as their primary grocery store, a figure up four percentage points from a year ago. Only 72 percent of shoppers, down five percentage points, say a traditional supermarket is their primary grocery store. One out of five consumers surveyed said they don’t go to supermarkets at all.


    • While 17 percent of all shoppers eat their main meal away from home three or more times a week, 31 percent – almost twice as many – of shoppers between the ages of 15 and 24 each their main meal away from home three time or more per week.



    What these numbers seem to suggest is that, despite the fact that the FMI survey continues to suggest that consumers like supermarkets – giving the format an 8.3 ranking on a 1-10 scale – the mainstream supermarket industry has got some serious issues with which to contend.

    To get a sense of the marketing and operational realities behind the numbers, MNB engaged Sansolo is this exclusive e-interview.

    MNB: What impact does the current state of the economy seem to be having on shopping patterns?

    Michael Sansolo: Shoppers tell us they are keenly attuned to prices, convenience and cleanliness no matter how well or poorly the economy is performing. Yet there are a number of signs of behavior that clearly shift with the economic times and our 2004 survey of consumer attitudes detected many of them.

    Among the shopping tactics on the rise this year are the numbers of shoppers making and following lists, checking for specials, and stocking up on those specials when they find them. Also when asked the reason they shop a second store in addition to their primary supermarket, nearly 40% of shoppers say price tops the list.

    The combined impact of this price awareness is clear at the front end. For the second consecutive year, shoppers found a way to buy their groceries for less money—adjusted for inflation—than they spent the previous year. That translates into lots of pressure on top line sales growth.

    MNB: Any changes in the priorities that consumers have in terms of choosing their supermarket?

    Michael Sansolo: The basic picture doesn’t change much each year, but under the surface consumer needs are constantly changing and good retailers have to keep moving with them. Although shoppers list all the basics—cleanliness, quality fresh products, price, service and location—as their top reasons for selecting a store this year, we see many other trends emerging.

    Shoppers are clearly concerned about their health and nutrition and clearly stated in our Shopping For Health study that they’d love to see their supermarket do more in this area. Likewise, we see growth in certain demographic groups, such as Hispanics, Asians and the elderly, who put priority on a host of different products and services they want from their store.

    The changes come in many ways. A quick look at any best seller list or the ever changing menus in restaurants makes it clear that Americans are cutting back on carbohydrates and our Trends survey found that exact concern. The result is many stores and suppliers offering more products geared to low-carb diets.

    The simple answer to this question is that the marketplace, like nature, abhors a vacuum. If there is a growing consumer need that isn’t met, someone will find it and serve it. Sometimes the need is clearly stated and sometimes it isn’t. Good retailers know how to read the marketplace to get the information on what’s coming and move with shoppers.

    MNB: Is it your view that retailers are adjusting effectively to these changes? Or are they in a constant state of playing catch-up?

    Michael Sansolo: Retailers face an incredible challenge in being reactive or pro-active to trends. If you act too soon, you may be so far ahead of the marketplace that you are doomed to failure. If you are too late, others may have already locked in a segment, leaving you on the sideline. The key seems to be the willingness to make almost constant change and the flexibility to move with the marketplace.

    MNB: Any other surprises contained in this year’s edition of “Speaks”?

    Michael Sansolo: Most of the measures of industry performance reflect a picture that we’ve all seen developing throughout the year. The industry continues to struggle for top line growth and competition is as tough as ever and coming from more directions than ever before.

    The most surprising statistic is the incredible level of concern about skyrocketing health care costs, whether medical, dental, vision or prescription costs and with good reason. Nearly all of these costs are rising at double-digit levels, which creates a real squeeze on retailers when the marketplace permits only the smallest of price increases. This issue actually tops the level of concern retailers have over new competitors and a significant percentage of respondents said this issue will loom large this year and could result in more labor troubles.

    MNB: There are two simultaneous trends taking place in the food industry – consolidation (as there seem to be fewer companies) and fragmentation (as there seem to be more and more places selling food and competing with supermarkets).

    This would seem to create a kind of perfect storm that is incredibly tough for the traditional supermarket to survive…would you agree? And what is the best way to survive?


    Michael Sansolo: Your question is exactly the reason why we have themed this year’s convention around “solutions for growth.” For a good number of years, distributors and their supplier partners have focused on improving efficiency and have achieved some good results. Today’s marketplace demands that all companies, large or small, operate as cost effectively as possible, simply to be competitive on price.

    But consumers want more than just an efficient shopping experience. They want excitement and they want some element of discovery. They want specific needs met and they want stores that match their values and desires. As you state the challenge is to create flexible or differentiated stores that meet these demands.

    It’s not an impossible task. Many retailers talk about the incredible success Tesco is having in the United Kingdom with an array of formats ranging from supercenters to convenience stores. Efficiency and differentiation can be achieved together, but it requires significant creativity.

    MNB: Nutrition and obesity issues continue to make news…but we’re intrigued because a lot of people seem to lump them together. It would be our view that they actually are very different…that people who want to eat in a more healthy fashion often are making radically different choices than people who want to drop pounds. Would you agree? And how do retailers need to deal with these differences?

    Michael Sansolo: In other words, how do we find a way to win with everyone from vegans to Atkins devotees?

    How we perceive the difference between concern on nutrition and obesity isn’t important. What matters is how shoppers see this. Whatever the reason people give for eating healthier, whether it’s related to losing weight or simply to improve on nutrition, the key for retailers is to recognize the need and the opportunity to serve that need. Shoppers tell us clearly that they want to eat healthier, but many say the amount of time it takes to cook convinces them to abandon their plans. Some shoppers even say the low cost of fast food keeps them from eating a healthier diet.

    Supermarkets can’t change shopper behavior, but we can help work with shoppers to explain the choices they have. We already give an incredible amount of nutritional information on products. Shoppers applaud that and want more. We already provide choice on the entire array of foods.

    Retailers don’t have to understand the difference in shopper goals as much as we have to understand what products they desire and feature them.

    MNB: What do you think retailers need to do to compensate for the increasing desire on the part of consumers for greater convenience in their shopping choices?

    Michael Sansolo: This is an on going challenge for the industry and one we must keep trying to win by reminding shoppers of the convenience we offer. Our Trends survey of consumers this year found that use of supermarkets for take out meals is growing. Some really good news is that younger shoppers in the western part of the country are as likely to buy a take out meal from a supermarket as a fast food restaurant.

    However, the battle goes on. Nearly one-fifth of all shoppers and one-third of shoppers under 24 years of age eat their evening meal outside the home three or more times a week. Those are meals we lose time and again.

    Supermarkets continue to offer a wide array of step saving products, all the way to completely produced meals. Yet convenience takes many forms. We must continue to examine other time saving innovations such as gasoline sold at supermarkets or even self-scanning checkouts, both of which are meeting with terrific consumer acceptance. Rich or poor, Americans are living with lots of time poverty these days and the on going challenge for supermarkets is to help them through their day.

    MNB: The 2000 decade is almost half over, believe it or not. (It seems like just yesterday that we were all worried about Y2K.) Based on what we’ve seen so far, what do you think the industry is going to look like in 2010?

    Michael Sansolo: Predictions are always so difficult to make because there are so many elements of change that we can’t possibly anticipate. Since 2000 we have seen such dramatic events in our world that it’s both difficult and frightening to imagine what the remainder of this decade could hold.

    This year, however, we asked the companies responding to our Speaks surveys to consider some scenarios about the future and give us their predictions about certain changes in the industry. Here’s what they had to say:

  • Consolidation will continue. More than 80% of respondents believe the top 10 chains will do more than 75% of industry volume within 10 years, with half of the respondents believing that sales threshold will be breached in five years.


  • Supply chain changes are coming in a number of directions. More than 40% of respondents believe suppliers will deliver seven days a week within five years and another 26% believe that will happen in 10 years. Also, within five years one-third believe most products will remain in distribution centers for less than a day. More than 40% believe direct store delivered products will be handled by distribution centers in 10 years. And within a decade, more than 70% believe Radio Frequency Identification Devices will be on all pallets in the supply chain.


  • Electronic communication will dominate according to nearly 90% of respondents. Nearly 40% believe that will happen within five years and the rest say in 10 years. That may the level of interest in areas like data synchronization is higher that it seems to be so far.


  • Bio-engineered foods will become commonplace in five years, according to one-fourth of our sample. Another 55% say it will take 10 years.


  • Self scanning checkouts use will continue to grow, with 19% saying self-scanners will outnumber staffed checkout lanes in five years; 56% say that will take 10 years. Another 21% believe checkout lanes will disappear entirely in 10 years and smart cards will be a major form of payment within 10 years, according to 65% of our group.


  • Grocery space will continue to decline, with 53% believing the center store will shrink by more than half its current size within a decade. Nearly 40% believe shoppers will buy most packaged goods through the Internet within a decade. And 40% believe that coupons will disappear within a decade—a prediction that may seem farfetched today, but not that long ago stamp-redemption programs seemed equally permanent.


  • Only 7% foresee a time when stores will once again close their doors one day a week, but this question got some incredibly enthusiastic answers. One respondent told us this would be a “dream come true.”


  • Only time will tell.
    KC's View:
    While the numbers suggest that the industry is under siege despite general consumer satisfaction, we think that the results are unintentionally misleading.

    While consumers may indeed rank supermarkets as an 8.3, we worry that this may give increasingly irrelevant operators an excuse to believe that they don’t have to make fundamental changes that will drive sales and improve their viability. This would be a mistake.

    And while many may blame Wal-Mart for their troubles, we believe that this also only allows them to ignore the real problem – stores that are aging, that haven’t changed to be relevant to consumer needs and lifestyles, and that are unable to compete not just because Wal-Mart is bigger and better and tougher.

    Not everybody has this problem, of course. But more than a few. And there’s more than enough denial to go around.

    As Cassius said in Shakespeare’s “Julius Caesar,” "The fault, dear Brutus,
    is not in our stars, but in ourselves.”

    Published on: May 3, 2004

    Florida-based Winn-Dixie Stores announced Friday that it plans to close or sell of 156 stores, will shutter three distribution centers, will sell several manufacturing businesses, and eliminate some 10,000 jobs – or 10 percent of its workforce - in order to restore the company to profitability.

    Company CEO Frank Lazaran described the move as a “difficult decision” that was necessary from a strategic point of view. “We will make every effort to ensure a smooth and fair transition for affected (employees)."

    The decision was announced as Winn-Dixie reported earnings of $600,000 for the third quarter compared with $50.6 million in earnings a year ago. Sales fell for the quarter to $2.67 billion from $2.82 billion a year ago.

    The company said it plans to close 45 unprofitable or poorly located stores and put another 111 stores up for sale and close them if it cannot find buyers. Winn-Dixie said it will close warehouses in Sarasota, Fla., Raleigh, N.C., and Louisville, Ky. And, according to the company, it will try to sell its Dixie Packers, Crackin' Good Bakery/Snacks, and Montgomery Pizza manufacturing operations and consolidate its Greenville Ice Cream and Miami Dairy operations into its other dairies.

    Once the store closings/sales and job cuts are completed, Winn-Dixie should be left with 922 stores and about 90,000 employees.
    KC's View:
    With all due respect to the folks at Winn-Dixie, this is just a small step…and we’re not even sure it is in the right direction. People with whom we speak who know the company’s operations suggest that it’s bigger challenge is to create a compelling shopping experience that can effectively lure customers from the likes of Wal-Mart and Publix.

    Hate to say it, but there tends to be a certain skepticism that this can happen. Whether or not it is justified, there is a death watch on Winn-Dixie now…and it is up to management to figure out how to assuage those fears.

    Published on: May 3, 2004

    Albertsons completed its $2.4 billion (US) acquisition of 204-unit Shaws in New England from the UK’s Sainsbury late last week.

    The company announced that Shaws’ current CEO/president Paul Gannon will remain the that job, reporting directly to Albertsons CEO Larry Johnston. It is expected that Albertsons will leave the company’s Shaws and Star Market banners in place.
    KC's View:
    The Albertsons folks probably should take a good look at the store that Shaws operates in the shadow of Boston’s convention center for ideas about how to create an animated, compelling shopping experience. It’s a great store, and unusual for an urban location in terms of size…but we can certainly understand why we’ve never seen it when it wasn’t busy.

    Published on: May 3, 2004


    • Study Paints Wal-Mart In Positive Colors.
      A new study conducted by a University of Missouri at Columbia researcher suggests that contrary to popular opinion, the opening of a Wal-Mart actually creates net employment gains in communities as opposed to costing jobs.

      Emek Basker, a professor of economics at the university, said that when Wal-Mart enters a community, retail employment increases by 100 jobs in the first year, and that half of the gain disappears over the next five years as competing retail establishments exit or eliminate jobs in order to be more competitive. Wholesale employment declines due to Wal-Mart's ownership of its suppliers and its retail outlets, or buyers. The study indicated that while an average of 20 wholesale jobs are lost in Wal-Mart occupied counties, 50 new retail jobs are created.

      According to the study, employment data was scrutinized from 1,749 counties and 2,383 Wal-Marts across the country between 1977 and 1998. Wal-Mart had a store in 75 percent of the counties in the study. Basker examined each store over a 10-year period – from five years before it opened to five years after it opened.

      Basker's study is to be published in the upcoming Review of Economics and Statistics.

      MNB contacted Basker to find out the source of her funding to conduct the study, and she told us that “the study was done as part of my PhD dissertation at MIT. It was not directly funded by anyone (except for some support from MIT). In fact, Wal-Mart did not cooperate with me on any level, so I had to collect all the data (store locations, opening dates) on my own from public sources.”


    • Passage To India? Press reports from India suggest that Wal-Mart has begun conducting studies that would culminate in its opening stores there. While the company is not disclosing its plans or timetable, the initiative is reportedly dependent on how the nation changes its rules about foreign ownership and co-ventures.


    • RFID In Action.Wal-Mart has begun testing a Radio Frequency Identification (RFID) system at seven of its Dallas-area stores, working with eight consumer goods companies to track products in a warehouse and anywhere in the supply chain. The company expects some 100 of its suppliers to be using RFID by January 1.


    • Wal-Mart Bashing In Chicago. More than 300 people attended a rally yesterday in Chicago, at which religious and political leaders as well as labor and community activists and current/former Wal-Mart employees “accused the company of providing low-paying jobs with meager benefits, gobbling up competitors and running roughshod over women and illegal immigrants,” according to the Chicago Tribune.

      The rally was in response to the non-union company’s plans to open two stores in the heavily unionized city.

      One speaker, Rev. Michael Pfleger, framed the debate this way: "I think we have to get away from the mentality that we're just glad to get a job. We've got to stop accepting crumbs as if it's the only thing we're meant to eat. A slave job is a slave job."


    • Wal-Mart To Add To Florida Neighborhood Market Fleet. Florida Today reports that Wal-Mart plans to build two 50,000-sq.-ft. Neighborhood Market stores in the Melbourne, Florida, area – which will continue to ratchet up the pressure on an already struggling Winn-Dixie.

      Currently, Wal-Mart operates about 50 Neighborhood Markets. The closest to Melbourne would be in the Orlando suburbs of Oviedo and Winter Springs.

    KC's View:

    Published on: May 3, 2004

    The New York Times reports that Safeway Inc. is scheduled to name three independent directors, and will establish the role of “lead independent director.”

    The company also will announce that once these new directors are brought on board, current directors George Roberts, James H. Greene Jr., and Hector Ley Lopez will leave the board. Roberts and Greene have been on the board for nearly 20 years, are partners of Kohlberg Kravis Roberts & Company, the buyout firm, and have been criticized for not being independent enough from company CEO Steve Burd.

    The moves are being made to assuage shareholder groups that have been critical of the company’s performance, saying that investors have lost $20 billion in value over the past five years and that the board is filled with people too loyal to Burd.

    Shareholders like the California Public Employees' Retirement System and New York's Common Retirement Fund have said that they will withhold votes from Safeway's chairman and chief executive, Steven Burd, and two other board members, William Tauscher and Robert MacDonnell.

    According to the NYT, Paul Hazen, the former chairman of Wells Fargo & Company, will become lead independent director. Tauscher and MacDonnell will remain as independent board members, but Tauscher will step down as chairman of the executive compensation committee and MacDonnell will no longer serve on the audit panel.
    KC's View:
    There is no question that the pension funds have their own conflict of interest, since they represent unionized employees that own stock in a company that is portrayed as being anti-union.

    When you think about it, though, wouldn’t it make more sense to simply not own stock in such a company if you were a public employee pension fund? Wouldn’t you prefer to invest in companies that you believe are supportive of your goals and priorities?

    Just asking…

    Published on: May 3, 2004

    USA Today reports this morning on a new study done by Supermarket Guru Phil Lempert, is which he calculated the cost of buying food when one is on either the Atkins Diet or the South Beach Diet. He compared those figures with “the cost of following the government's Thrifty Food Plan, which was created by the Department of Agriculture not for weight loss but to help budget-conscious consumers meet the nutritional recommendations of the Food Guide Pyramid and the Dietary Guidelines for Americans.”

    The result:

      •The Atkins diet's ongoing weight-loss phase averaged $14.27 a day, ranging from $11.04 to $15.97.

      •South Beach diet's Phase 2 averaged $12.78 a day, ranging from $11.16 to $14.90.

      •The Thrifty Food Plan from the USDA averaged $6.22 a day, ranging from $6 to $6.61.


    "The more I've worked on this, the more it has really become apparent that our obesity problem in the U.S. is directly linked to the fact that eating foods that are healthy or in this case lower carb costs more," Lempert tells the paper. "It's hard for lower-income and middle-income people to be on these diets. We need to help this population eat healthier."
    KC's View:
    Big problem, and one that needs attention from both retailers and manufacturers.

    For those of you attending the FMI Show in Chicago, we’ll be looking at issues like this one at the Learning Lab on obesity that we’ll be moderating Tuesday morning. We hope you’ll join us.

    Published on: May 3, 2004

    Published reports suggest that Kroger Co. has stirred up a bit of controversy in the Louisville, Kentucky, market by banning the free distribution of a religious publication, The Southeast Outlook from its stores, and saying that it planned to enforce an existing policy prohibiting both religious and political magazines from its free racks.

    The company said that the previous stocking of the Outlook was a mistake and that its policy had not been enforced. The company does allow the free distribution of real estate magazines and so-called “alternative newspapers.”

    While Outlook Executive Editor Ninie O'Hara said the Outlook is “unashamedly a newspaper with a Christian world view.”

    Kroger spokesman Tim McGurk said in a statement that Kroger seeks to serve "the entire community, regardless of religious belief, political party or anything else. When one political or religious organization's representatives or publications are permitted in our stores, then Kroger is placed in the uncomfortable position where we must include them all."
    KC's View:
    Pity poor Kroger on this one…because it probably has gotten itself into a situation where it cannot win. Some will view it as being anti-free speech, some will view it as being anti-religion, and some will view it as having some sort of hidden agenda.

    We suspect its only agenda is staying away from a situation where divisive issues like politics and religion are connected to its stores. Which makes sense.

    Of course, exactly the opposite is happening now…

    Published on: May 3, 2004

    The Washington Post has an interesting piece about how a series of elections scheduled to take place this week in Northern Virginia have evolved into debates about the role of commercial development in these communities. “As the Washington area continues its suburban expansion,” the paper reports, “few places are feeling the effects of growth as sharply as Northern Virginia's smallest jurisdictions. Many candidates vying for mayoral and council seats are defining their races as referendums on the future shape of their downtowns and business districts.”

    It isn’t an easy decision for candidates and communities to reach. There is a crying need on the part of many of these communities for new tax revenue that would be generated by commercial development, but many fear that their Main Streets will lose their character and become mere shadows of other municipalities that have been overbuilt and overly homogenous.
    KC's View:
    We mention this because it reflects the debate that seemed to captivate MNB users last week…but also because the name “Wal-Mart” isn’t ever mentioned in the article. The development debate is one that is expanding, both in terms of the communities where it takes place and the companies that it could affect. Retailers of all stripes need to be aware of the pitfalls, and perhaps begin developing plans that are more sensitive to community concerns.

    Published on: May 3, 2004

    The Washington Post this morning reports that in the Washington, DC, area, “while Giant and Safeway's share of the local grocery market has begun to slide, Food Lion's share has climbed to nearly 5 percent, outpacing the growth of both Wal-Mart Stores and Whole Foods.”

    The reason, according to analysts, is that Food Lion is tapping into a well of customers that wants basic products, a no-frills shopping experience, isn’t entranced by shopping big stores like Wal-Mart, and is concerned enough about their economic state that a strong low-price message is extremely compelling to them.
    KC's View:

    Published on: May 3, 2004

    The Boston Globe reports that CVS is giving its fleet of stores a makeover, “brightening up its drab walls with colors ranging from turquoise blue to magenta. It is replacing its towering shelves with shorter ones that allow a woman of average height (5 feet, 4 inches) to see from one corner of the store to the other.” It also is going to broaden the scope of its beauty counters, hoping to heighten its appeal to women – who are 80 percent of the chain’s customers.

    The differentiation strategy comes as CVS is about to become the nation’s biggest drugstore chain through its acquisition of 1,260 Eckerd stores from JC Penney.
    KC's View:

    Published on: May 3, 2004


    • The US Centers for Disease Control and Prevention CDC) reportedly estimates that 76 million people in the USA get a food-borne or diarrheal illness each year, with children particularly at risk – but that cases of five of the most common food-borne maladies have declined.


    • PepsiCo Inc. announced that the US Securities and Exchange Commission might file civil charged against the company, alleging that Pepsi executives signed documents acknowledging payments of $5.8 million, which Kmart used to improperly record the timing of revenue.

      Pepsi says its people were not involved with any alleged accounting misdeeds and that it is cooperating with the investigation.


    • The Wall Street Journal this morning reports that the US Attorney’s probe into “whether Coca-Cola Co. engaged in accounting fraud is intensifying, with a federal grand jury scheduled to hear testimony from company employees later this month and securities regulators issuing subpoenas to employees for information.”

      At issue is whether Coke shipped an excess of soda concentrate to bottlers and other distributors as a way of hyping financial results.


    • The US Department of Agriculture reports that price inflation is affecting grocery products that include milk, meat, eggs, oil and produce – and that things are expected to get worse (meaning higher prices) before they get better.


    • There are published reports suggesting that a coalition of Texas businessmen is looking to try and acquire Core-Mark, the c-store wholesale business, for $315 million.

      Core-Mark is pretty much what remains of Fleming, which went bankrupt and out of business.

      One of the names mentioned in the reports is Bill Fields, a former Wal-Mart executive.


    • Fred Meyer Jewelers, a division of Kroger Co., announced that it has entered into a relationship with Amazon.com. The arrangement will make its jewelry available via the Amazon.com website.

      According to a statement released by the company, Fred Meyer Jewelers is the nation's fourth largest fine jewelry retail chain, and currently operates 440 retail locations across the country under the Fred Meyer Jewelers, Littman Jewelers, and Barclay Jewelers banners.


    • Royal Ahold announced today that a legal challenge to its management practices that had been mounted by an investor lobbying group in the Netherlands has been postponed. No reason was given for the postponement, though analysts believe that the move will help Ahold management by focusing their efforts on rebuilding the company’s reputation in the wake of a billion dollar accounting scandal.


    • Martha Stewart Living Omnimedia Inc. reportedly paid the convicted felon who founded the company a $500,000 bonus-- $200,000 more than called for in her contract.

      This was in addition to her regular salary of $900,000 a year.

      No word on what her compensation would have been if she had not been convicted of a felony.

    KC's View:

    Published on: May 3, 2004


    • Brenda Barnes has been named the new president/COO of Sara Lee Corp., reporting to C. Steven McMillan, the company's chairman and CEO. She does not replace anyone in the job; McMillan has also held the position of president, and Sara Lee has not had a COO.

      Barnes is the former president and CEO of PepsiCola North America who made headlines in 1998 when she quit that job to spend more time with her family.

    KC's View:

    Published on: May 3, 2004


    • Procter & Gamble Co. posted third quarter earnings of $1.53 billion, up 20 percent from the $1.27 billion reported for the same period a year ago.

      Sales were $13 billion for the quarter, up 22 percent from nearly $10.7 billion a year ago.

    KC's View:

    Published on: May 3, 2004

    On the subject of Wal-Mart’s unbridled growth, MNB user Frederic Arnal wrote:

    While reading and enjoying the spirited views regarding this issue, it occurred to me that...

    It's a distraction to attribute motivation or intent to a retail phenomena like Wal-Mart (the blind watchmaker theory). They are and have been brilliantly focused on a business model. They impact their environment in doing so... often incidentally or inadvertently. While this may detract from the quality of life for those who share the environment, the only rational response is not to bemoan "what is" but rather to determine what is good for ourselves in the current system. Ultimately, institutional responses to societal needs (like Wal-Mart) eventually sow the seeds of their own demise while creating new competitive variants. As for the morality of corporate entities, I'll leave that for the philosophers.


    MNB user (and industry wise man) Glen Terbeek wrote:

    Wal-Mart isn't the company that should be ashamed of their practices and success; It should be the established and mature retailers that existed when Wal-Mart started in the 70's who let Wal-Mart enter, dominate and take market share.

    Wal-Mart's "net cost, shopper focus" for national brands attacked the antiquated business practices that were and continue to be out of sync with today's saturated marketplace; namely trade dollars. No wonder the manufacturers jumped on the Wal-Mart bandwagon; it is the most "Frictionless" route to the shopper.

    Maybe the industry should worry about business practices synchronization first before they worry about item synchronization. Before it is too late!


    About the book “The Case Against Wal-Mart” by Al Norman, which was the subject of much debate on MNB, Glenn J. Rosati wrote:

    Interesting subject. Great debate.

    Will I be able to buy the book at Wal-Mart?


    Doubtful.

    But you can order a copy of “The Case Against Wal-Mart” by going to:

    http://raphel.com/




    We got several emails about our story last week about the opening of Tom Leonard’s Farmer’s Market in Richmond; Leonard is the son of industry icon Stew Leonard.

    MNB user Kerley LeBoeuf wrote:

    Why Richmond?

    To serve the 350 or so Philip Morris employees who transferred?


    Maybe. We think that Richmond was his choice because that’s where he lives, not for any specific strategic reason. We also think it has another advantage – being hundreds of miles away from the original, which means that comparisons won’t often be made except by those who have relocated there.

    And another MNB user chimed in:

    As you well know, Richmond is Ukrop's. I am from there but haven't lived there for over 20 years. Several folks of high end markets have moved to Richmond, then closed up shop. I go home every year for the Holiday's, and my bet is he's closed by then.




    Finally, we had a story last week about Tesco rolling out (pun intended) a new shopping cart that is designed to provide resistance when it is pushed, therefore giving shoppers a workout as they go up and down the aisles.

    To which MNB user Joyce Mann responded:

    Let me understand - after a hard day at work, I have dinner to prepare and the housework and laundry await. I stop at the grocery on the way home, and I'm going to be given a cart that pushes back??

    No thank you! I am thankful for one that has been recently oiled so all the wheels point in roughly the same direction.


    Joyce, you made us laugh out loud! Thanks for that...
    KC's View:

    Published on: May 3, 2004

    Just wanted to say we were both thrilled and flattered by the number of people who stopped by Bin 36 in Chicago last night to say “hi” and join us for a glass of wine or beer. It was marvelous meeting all of you, and to put faces to the names we’ve been seeing via email over the last two-and-a-half years.

    It was fun…and the beginning of what we hope will be an annual event.
    KC's View: