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    Published on: May 12, 2004

    Published reports indicate that just a week after Albertsons finalized its $2.4 billion acquisition of Shaws from Sainsbury, the company has eliminated 100 top-level management positions at the New England retailer. Included were several vice presidents and their support staff. Severance packages reportedly have been negotiated, and the positions will be phased out over the next one to three months.

    The company said that Albertsons’ goal is to “eliminate redundant management and operational processes.” The goal is to find between $100 million and $125 million worth of savings that can be achieved through synergies.

    While clearly there are changes taking place at Shaws, some things are staying the same. The banner is remaining intact, as is that of Star Markets, which it also owns. And CEO Paul Gannon is remaining in that position. The company also said that store-level personnel will not be affected by this round of layoffs.
    KC's View:
    We hope that Albertsons infuses Shaws with plenty of capital to improve the stores that need improving, but also allows the company to actually become more local in its approach to neighborhoods and marketing.

    We know that’s not likely. After all, “synergy” and “local” are words that aren’t often used in the same marketing plan.

    Published on: May 12, 2004

    The Kroger Co. announced that the United Food and Commercial Workers (UFCW) has ratified two labor contracts in Houston that cover more than 10,000 employees at 106 stores.

    Both Kroger and the UFCW say that the deals allow Kroger to be more competitive economically while preserving competitive wages and benefits for employees.
    KC's View:

    Published on: May 12, 2004

    Interesting piece in Time about how the nation’s culinary schools, fueled by attention-getting enterprises like the Food Network, celebrity chefs like Emeril Lagasse and Nigella Lawson, and television shows like “The Restaurant,” are beginning to attract younger and more committed students.

    “In 1997,” Time reports, “only 22% of applicants to the Culinary Institute of America (CIA) in Hyde Park, N.Y., were recent high school graduates. Today that number is 38%. At the California Culinary Academy (CCA) in San Francisco, nearly 20% of the 1,910 students in last year's incoming class matriculated straight from high school — a marked increase from 2000, when that number was less than 5%.”

    What this means, according to the magazine, is that the culinary life isn’t being seen primarily as an escape hatch for people fed up with being corporate executives, lawyers, and doctors. Rather, people are attracted to the essentials of being a chef. “Even the most establishment-minded parents would be gratified to see how intensely students pursue their cooking classwork,” Time reports. “While sophomores at traditional four-year universities skillfully avoid scheduling classes before 10 a.m., students at culinary schools willingly rise before dawn to laminate pastry dough. On their own time, they cheerfully practice the sautéing, flambéing and knife-wielding skills they have learned in class.”

    Of course, it isn’t just the sautéing and flambéing that is attracting young people. It’s also the fact that some chefs have the same kind of appeal as some rock stars.
    KC's View:
    Y’know creating culinary scholarship programs is something that every food retailer ought to do. If they could sponsor cooking schools and contests, and try to attract more young people to a food-oriented career, it’d help raise the level of commitment and talents for the entire food biz. We read all the time about stores and chains that offer their employees various kinds of scholarships, but rarely do we see programs specifically targeting food programs. It seems to make a lot of sense.

    As a parent and confirmed eater, we’d be thrilled if one of our kids wanted to become a professional cook. The hours may be long and hard, but it seems like such a rewarding, creative life.

    We always thought that if we’d known 30 years ago what we’d end up doing for a living, we’d have studied both journalism and cooking in college. As it happens, we never took a class in either. (Some of our critics won’t be surprised by the lack of journalism schooling…)

    (Anybody who wants to offer us a late life scholarship, just call 203-662-0100…)

    Published on: May 12, 2004

    The National Ice Cream Retailers Association is predicting that because of a number of factors occurring at the same time – political unrest and natural disasters overseas, as well as price fluctuations in the US dairy industry – are coming together to force an increase in the cost of ice cream likely to range between six and 20 percent.

    Some retailers – Friendly’s, for example - actually are shrinking the size of their packages while raising the cost.
    KC's View:
    Probably a conspiracy by all the low-carb enthusiasts to deny everybody else the desserts they crave.

    Besides, we’re all going to have to start choosing between a gallon of ice cream and a gallon of gasoline…and the costs are probably going to be about the same.

    Choices, choices…

    Published on: May 12, 2004

    • The New York Times reports this morning that “union leaders, academics and community activists plan to hold an unusual meeting in Washington today to begin mapping out a strategy to check Wal-Mart's growing power and to press the company to improve its wages and benefits.”

      According to observers, the focus will not be on unionizing Wal-Mart, “but rather on assessing Wal-Mart's influence on the nation and on strategies to check Wal-Mart's downward pull on wages.”

      Sarah Clark, a Wal-Mart spokeswoman, tells the NYT that the company didn’t know much about the meeting. "We believe that we pay good and fair wages and offer a comprehensive benefit package,'' she said. "There are numerous groups who do not want us to succeed for their own reasons."

    • Reuters reports that Wang Zongnan, the president of China’s biggest retailer, has a very specific strategy for dealing with the incursion of Wal-Mart and other foreign chains.

      Swamp ‘em.

      His company, Bailian Group, plans to open 1,000 hypermarts, supermarkets and other stores across China this year alone, hoping to outpace the competition in terms of locations and market share, creating an almost invincible advantage.

      The stakes are high, and the clock is ticking. China is expected to be a $600 billion retail market this year, and legal requirements forcing global companies to find local partners are scheduled to be abolished by the end of the year.

    • A lawyer representing both organized labor and an activist citizens group has filed a lawsuit against the city of Gilroy, California, changing that the city did not adhere to the state’s environmental regulations when it approved Wal-Mart’s application to build a supercenter there.

      According to the suit, “In approving the project and certifying its (Environmental Impact Report), the City violated CEQA (California Environmental Quality Act) in various ways among which include, but are not limited to, the failure to conduct a study of the new Supercenter’s economic impacts capable of causing blight-like conditions.”

      Municipal officials say they did everything appropriately in approving the Wal-Mart application.

    KC's View:

    Published on: May 12, 2004

    The New York Times reports that in an environment where there are enormous concerns about the rising rate of childhood obesity, the traditional positioning of many childrens’ cereals as “candy for breakfast” may be a sales pitch that is problematic.

    As the NYT notes, there actually is very little variation in the nutritional content of most childrens’ cereals. But what appeals to kids about how cereals are sold to them is that candy has been seen for centuries as an intrinsic part of being a child…and when they eat sweet cereals, they feel psychologically empowered. And that is a potent lure.
    KC's View:
    The real problem, we suppose, is that sweets are connected with empowerment. On the other hand, maybe if the kids got enough exercise it wouldn’t be an issue…and what’s wrong with a little kid empowerment, anyway?

    Published on: May 12, 2004

    • Dean Foods reportedly is in settlement negotiations with the US Securities and Exchange Commission (SEC) as the dairy processor looks to resolve a probe into its financial relationship with now-bankrupt Fleming Cos.

      Dean is just one manufacturer (the others include PepsiCo and Kraft) being investigated because of allegations that it might have helped the wholesaler inflate its revenue numbers by allowing the wholesaler to book as much as $2.7 million in future revenue as current, which made its financial situation look less precarious than it actually was.

    • Borden is bringing back its longtime mascot, Elsie the Cow, in an effort to build its reputation for freshness and quality. The effort will consist of print advertising that will run in a number of women’s magazines.

    • Motown legend Smokey Robinson is launching a line of frozen foods, starting with a gumbo that contains chicken sausage and seafood but no red meat, and is low in cholesterol and sodium. The product is expected to be national by year’s end.

    • Kmart reports that that since March, when Martha Stewart was convicted of obstruction in a stock trade scandal, sales of products bearing her name at the discounter are up 6.5 percent.

      Both Kmart and Martha Stewart Living Omnimedia reportedly are beginning the evolutionary process of distancing themselves from Martha Stewart the personality and convicted felon, and focusing instead on the branded products that have retained their reputation for quality.

    KC's View:
    Will anyone else be surprised if sales spike even more once Martha gets incarcerated? If that happens, expect manufacturers to come out with a line of Al Capone and John Dillinger products under the slogan, “Killer products to die for.”

    Published on: May 12, 2004

    • John Block, president of the wholesale division of the Food Marketing Institute (FMI), is joining the DC-based law firm of Olsson, Frank and Weeda, which specializes in food and agriculture issues. Block, the former US Secretary of Agriculture, will be a senior government advisor to the firm while retaining his essentially full-time position at FMI.

    • The Kroger Co. has promoted William T. Boehm to the position of senior vice president of the company and president of Kroger Manufacturing. He succeeds Geoffrey J. Covert, senior vice president, who is on special assignment in retail operations and remains an officer of the company.

      Since 2001, Boehm has served as group vice president of logistics.

    KC's View:

    Published on: May 12, 2004

    • CVS Corp. posted April sales of $2.12 billion, up seven percent over the same month a year ago. Same store sales were up 5.4 percent. Same-store pharmacy sales increased 7.3 percent, while same-store sales of front-end merchandise, rose 1.4 percent.

    KC's View:

    Published on: May 12, 2004

    As you can imagine, we got a ton of email weighing in about differences of opinion about our approach to reporting on Wal-Mart. We had an email yesterday objecting to our almost daily Wal-Mart coverage, accusing us of being obsessed with the Bentonville Behemoth; we responded that we simply don’t know how to do a daily news service without reporting on the world’s biggest company when it makes news, which is almost every day.

    One MNB user wrote:

    Wow, to ignore Wal-Mart is just asking for trouble. I am glad you report on Wal-Mart as you do. As a store manager, I stay up on everything I can about them. I do not compete with a super center yet, but it is just a matter of time and I am concerned about the affects on my business. You help to keep me up to date on the machine we call Wal-Mart. Please continue to report as you do, there are many of us that look forward to it daily.

    MNB user George Morrow wrote:

    Forget that reader!! Keep doing the Wal-Mart stuff. I find it useful and informative in my business and they ARE the biggest company in the World.

    Thanks…but we take every reader seriously. This is a community, and therefore everybody gets a voice. And we owe them our ears.

    Another MNB user wrote:

    First time I've been compelled to send you an email in over 2 years of reading MorningNewsBeat.

    Just wanted you to know that your coverage, and insights about Wal-Mart (and other retailers), are precisely why I read Newsbeat (almost) daily. Keep up the opinions - I may not always agree (heck, who do we ever "always" agree with?), but it certainly gets my brain engaged and possibly even helps to reduce my caffeine intake to a more reasonable 8 cups/day!

    Thanks for the effort you have put into creating a community. I have passed along you're email (and insights) to many of my colleagues. They liked your forthright assessment of the impact that slotting fees have on the stagnancy in center store. Keep it all coming - the honest opinions, the controversy, and the humor. I enjoy it all.

    MNB user Maurine Sticker wrote:

    I agree with your rebuttal to the Wal-Mart "hand-slap". I'm not bored and I do not find your comments irritating. Fact of the matter is Wal-Mart is and will continue to be in the news everyday. If I don't read your comments, I'm going to read comments from someone else, somewhere else!! Just check the Wall Street Journal. Is there ever a day that goes by that Wal-Mart is not mentioned in an article? The information is one forces the reader to read it. So, if the subject matter is "offensive" to a reader perhaps that person should merely consider just skipping that section and allow other readers the option of keeping up to date on what's going on.

    Have a good day and keep up the good work.

    Yet another MNB user offered:

    In response to the request for "cooling it for a while" regarding Wal-Mart. How about if we cooled it for a while from Iraq? Then maybe this whole treatment about prisoners would never have been an embarrassment to the country. How about the election? Sure could use less information on the economy, jobs, and where the candidates stand. Cripes! Wal-Mart is a mover and shaker in the industry and keeping current may be of some interest. If your intentions were to seize every opportunity to slam Wal-Mart, how'd you miss a barb with Business Magazine's Ethics ranking. (Morning coffee not ready?) Didn't see them in your condensed top 100. Perhaps you maliciously left them out of their place above P&G. Or, is this an example of not reporting generally accepted knowledge of their expected absence?

    There were a lot more companies that didn’t make that list than did. To single out Wal-Mart seems unfair.

    Yet another member of the MNB community wrote:

    Wal-Mart has redefined retailing and will continue to reshape the way consumers purchase branded products.

    MNB is a great periodical!


    MNB user Glenn J. Rosati wrote:

    Re: above subject, just keep doing what you're doing. If you please everyone then you're not doing anyone a service.

    Since when did it become politically incorrect to have a differing opinion and an honestly proclaimed point of view?

    Another MNB user wrote:

    Kevin, sometimes people have a hard time admitting they are faced with a tough situation in business, they would rather talk about the past and how good things were, but this is war (that’s a harsh statement but true) without information we have nothing to base our battle plans on...that's where you do a great far as giving us the information about the "enemy" and their movements.

    I think you would be amazed with how many people trust your reporting and don't take the time to tell you. Know thy enemy!

    MNB user Rick Dana wrote:

    Good points on your answer to the emails. You can never win them all and we all have biases. Those that can acknowledge that and still see both sides are extraordinary. Bentonville is having an effect on everyone. Some good.
    Some bad but they will affect your lives in some manner.

    Another MNB user wrote:

    You do a great job of keeping us (readers) informed re: Wal-Mart. We need to know what Wal-Mart is doing - good or bad. They're such a force in the economy. Anyone who doesn't care about what their up to is "missing" the boat.

    Another MNB user wrote:

    Not covering Wal-Mart on a regular basis would be like ignoring the 3,000 lb. gorilla in the room. Like it or not, Wal-Mart will effect the lives of Americans (both positively and negatively) for years to come. We need to be informed of their actions in order to have a modicum of control over our lives and the economic health and well-being of our communities and the U.S. as a whole.

    Another MNB user wrote:

    Wal-Mart news is critical to our industry and world economics. I, for one, thank you for the news you bring each day and I relish your personal insights. I find them to be right on the money. Please continue to report on Wal-Mart daily, it is necessary.

    MNB user Al Nissen wrote:

    Whether you love 'em or not (I'd be a "not"), if you are going to report on and discuss retail business in this day and age, you cannot ignore Wal-Mart. They have successfully impacted the retail business world-wide like no other company I can think of.

    In fact, they would have to be in the top ten industry changers this century. If you are in the retail industry, and want to survive, you better know what they are doing.

    Not everyone agreed.

    MNB user Joe Slagle wrote:

    It’s time to move on with the whole Wal-Mart obsession...we ARE getting bored!

    And MNB user Robert Taylor wrote:

    I enjoy your newsletter and have read some of the best material I have seen on Wal-Mart on your page. However, I do think some of your readers have a point in accusing you of an obsession with this retail juggernaut. MNB has a point of view and that's fine, but you really do not have balance on this matter since it is covered (it seems) in every single issue. For those of us who make a living selling to retailers other than Wal-Mart, we get it! They are large and in charge and must be accounted for. There are plenty of other interesting stores with successful businesses. Give us some variety and some positives about non-Wal-Mart retailers. Limit you your daily dose to a weekly update form Bentonville, please.

    That’s tough to do. We respect the feelings of those who feel we dwell too much on Wal-Mart; it intrigues us that some people think we are too anti-Wal-Mart, and some think we are too pro-Wal-Mart.

    We’ve read all these emails, plus dozens more than we received yesterday, and we’ve given it a lot of thought. (And will continue to.)

    Here’s our promise. We will try to be comprehensive without being obsessive. We will try to be honest in our analysis without over-indulging our biases. And we will continue to take your opinions – all of them – seriously.

    And here’s our guarantee. We’re going to tell you what we think you need to know, not just what you want to hear.

    We complained yesterday about supermarkets that make their stores brighter, shelves lower and print larger and say they are catering to “older” customers – 50+.

    To which MNB user Georganne Bender responded:

    Welcome to your future.

    When middle age is being tossed around as age 55, and we are all looking and feeling younger a whole lot longer, I know that a store modeled for older customers -- at 50 + -- sounds absurd, but it really isn't. Whether we admit it or not, things start to happen to us at around age 40. First Presbyopia sets in and you find that you can't read anything unless it's a couple of feet away because your eyes lose the ability to focus on things close up. The larger print signs and price labels will come in handy. Rich and I have been placing baskets of magnifying glasses ("readers") at store service counters for years. Customers are always forgetting their glasses, so they use these on the Honor System. And they sell like popcorn at the checkout counter, no matter what kind of store you have.

    Sometime in our 50s many of us begin to suffer from some form of arthritis. This severely limits the number of items we can grab off of an 84" tall shelf, not to mention it's a little tough to pick up a 10 pound bag of potatoes. These customers will love the low shelves and wide aisles. And presbyopia and arthritis are just a few of the fun things that are in store for us as we age. Even more physical limitations will pop up in our 60s -- and remember the first Baby Boomers will turn 60 in 2006.

    As for the non-slip floors, older customer in our focus groups tell us all the time they are leery of stores with shiny floors because they are afraid they will slip and fall. The same goes for natural stone flooring with uneven surfaces, and parking lots that are not well maintained.

    As retailers, we really can't tell by looking at someone if they have any physical limitations, and we certainly can't ask, so it just makes good customer service sense to try and make shopping easier. How the "store for older shoppers" will be accepted lies in how the store is marketed. I'd be willing to bet that customers of all ages will appreciate this easier-to-shop concept.

    And who thought growing up would be this much fun?

    We think we’re going to cry…

    Another MNB user offered:

    Perhaps "they" should just say the stores are aging friendly and let the shoppers decide if they want to shop there. The concept is right on and very needed.

    And another MNB user wrote:

    As I interpret your commentary it seems, your tongue in cheek, problem is that you think the definition of "Older" is set too low. Considering that AARP hits you with your membership solicitation at 50 it seems to be the GAAP - generally accepted aging practice. Guess we (you included) just have to accept it.

    Regarding those things that actually make shopping easier for older shoppers, Paco Underhill author of “Why We Buy” and CEO of a pretty unique in-store behavioral research company has stated for years that the aging population will require/demand just these types of modifications. The larger print in labeling and wider lower aisles (crowded/compressed aisles that lead to the infamous "Butt Brush" factor are a major negative with consumers) sound like recommendations straight out of his 20+ years of research. He postulates that those manufacturers/retailers that recognize these kind of issues will win those consumers.

    And MNB user Denise Remark added:

    Three years shy of 50 and not feeling "older", I can somewhat relate to your ire. However, consider this: After a weekend of gardening, I would appreciate not having to necessarily stand on tip-toes to get something off the top shelf (I'm quite short & my shoulders are frequently achy from hoeing, digging, lifting, etc.) At the ripe age of 47 (!) I require reading glasses, so large-print labels and/or magnifying glasses would be terrific (I don't always carry my reading glasses with me & I read EVERY label). Regarding non-slip floors: While I don't really see a physical need in myself for this, I do have a couple pair of sandals with hard plastic heels (I generally have these removed and put on rubber heels) that can, & do, easily slide across flooring, especially if there's residual moisture or clean-up of some greasy substance that wasn't cleaned properly.

    Besides, it wasn't meant as an affront. All of my friends are very youthful, and I think would see this line of marketing as more amusing than offending. That being said, I worked for a couple who when in their early 50's, described themselves as in the "autumn of their years". There are those in our age group who do see themselves as "older".

    Having just reached the point where we are closer to our 50th birthday than our 49th (our nine-year-old daughter was kind enough to point this out; you can only imagine what tangents MNB is going to take when that happy date rolls around), we are perhaps over-sensitive to being described as “older.” (Mrs. Content Guy loves to describe us as being as the “older man” she married.)

    The thing is, we don’t want to be catered to differently because we are reaching a certain milestone. We still wear jeans and sneakers as our preferred attire…drive a convertible just like we did when we were 25…and listen to much of the same music (thank goodness Jimmy Buffett is still recording). We even refuse to buy one of those suitcases on wheels, because we figure that if we can’t carry our own bag, we probably should stop traveling. (Okay, this is a little pigheaded.)

    Four days before we turn 50, we’re planning to run the Marine Corps Marathon in Washington, DC. (If our surgically repaired knee holds out…) So there!

    We just think that marketers need to be a little careful about how they use the word “older.” Raise the light level if you want, make the print a little larger, make the shelving a little lower. Just don’t tell us that you’re doing it, and make absolutely sure you don’t tell us why.

    There’s a really important emotional need-state at work here: Denial.

    We do have to say, though, that Denise’s comment about being short made us think of one of the great satirical songs of the last few decades, which got all sorts of grief when first released but has stood the test of time: “Short People,” by the great, inimitable Randy Newman (one of those people we were listening to 25 years ago and still do).

    And when we think of great song lyrics, we do like to share…

    Short People
    by Randy Newman

      Short People got no reason
      Short People got no reason
      Short People got no reason
      To live

      They got little hands
      Little eyes
      They walk around
      Tellin' great big lies
      They got little noses
      And tiny little teeth
      They wear platform shoes
      On their nasty little feet

      Well, I don't want no Short People
      Don't want no Short People
      Don't want no Short People
      `Round here

      Short People are just the same
      As you and I
      (A Fool Such As I)
      All men are brothers
      Until the day they die
      (It's A Wonderful World)

      Short People got nobody
      Short People got nobody
      Short People got nobody
      To love

      They got little baby legs
      That stand so low
      You got to pick 'em up
      Just to say hello
      They got little cars
      That go beep, beep, beep
      They got little voices
      Goin' peep, peep, peep
      They got grubby little fingers
      And dirty little minds
      They're gonna get you every time
      Well, I don't want no Short People
      Don't want no Short People
      Don't want no Short People
      'Round here.

    Great stuff. For young people of all ages.
    KC's View: