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    Published on: September 8, 2004

    There’s a great line from Bobby Ukrop when he is challenged in an Associated Press business story about why the supermarket chain that bears his family’s name steadfastly refuses to sell alcohol and open on Sundays.

    “We like talking about what we're doing,” says Ukrop. “We don't spend time talking about what we're not doing.”

    Despite the position taken by Ukrop, the story looks at how his chain is losing market share because of competition from Wal-Mart, Costco and the like. The general sense seems to be that Ukrop’s could rebound if it reversed long-held policies, even though such a reversal would be against the family’s Baptist values. And the story notes that even if Ukrop’s is losing market share, it remains one of the most progressive food retailers in the country, known for its approach to meal solutions, whole health, customer service and community involvement.

    “If Ukrop's were a public company, shareholders might riot at the chain's food experiments and slow expansion,” the AP writes. “But as a private business run by Bobby Ukrop and his older brother, Jim, the company chairman, Ukrop's has managed to adhere to its conservative policies while increasing sales, remaining profitable and establishing itself as one of the most successful independent grocers in the nation.”
    KC's View:
    Y’know, this may sound like heresy on a B2B website, but there are worse things than declining market share. Like not being true to the values that launched you in business in the first place.

    A dip in market share isn’t such a bad thing if sales are still growing and innovation remains a key cultural value – and from all reports (and our own impressions from recent visits to Ukrop’s), this is still the case.

    There is such a thing as intelligent loss of business. In this case, it is entirely possible that the folks at Ukrop’s have looked around and said that they have no interest in competing with Wal-Mart and Costco in the areas where those mega-retailers are dominant. Rather, they’ll mind their own business, do what they do best

    There’s an old John Cougar Mellencamp song line that we like to quote: You’ve got to stand for something, or you’ll fall for anything.

    Sounds like the Ukrops know not just the lyrics, but also the melody.

    Published on: September 8, 2004

    The Desert Sun in Southern California reports that the evidence seems to suggest that the three major supermarket chains – Albertsons, Kroger’s Ralphs, and Safeway’s Vons – that endured a three-month strike/lockout less than a year ago have not yet recovered from the labor strife that virtually shut down many of their stores.

    (We say “virtually” because while the doors remained open, the shelves were increasingly bare, the aisles were generally empty, and the customers mostly seemed to be elsewhere.)

    Even once the strike/lockout ended, many consumers who had developed new shopping habits – going to Stater Bros., or Trader Joe’s, or Costco, or Whole Foods, or Bristol Farms, or Smart & Final – decided not to return to their old stores but remain loyal to their new food shopping experiences. And most of these companies report that they have held onto much of the sales gains that they made during the strike/lockout.

    Depending on how you calculate the losses during the four-month event, the financial impact on the three chains is estimated at between $750 million and $1.5 billion…which explains why all three of them have embarked recently on loyalty marketing and discount schemes designed to lure folks back into their stores. (The chains aren’t exactly doing any explaining themselves, refusing to talk about the long-term impact of the strike on sales.)
    KC's View:
    The story concedes that the one wild card in all this is Wal-Mart…it is hard to know whether supercenters being opened by the Bentonville Behemoth also are keeping customers away from Albertsons, Vons and Ralphs.

    But it sees to us that the really interesting thing about this story is that the smaller companies that have made strides all offer the consumer compelling and differentiated shopping experiences…some more than others, but each of them has a distinct character that reflects certain cultural values.

    Maybe that’s why they are keeping customers. Y’think?

    And y’think maybe this ongoing loss of sales is a sobering thought to all three chains as they contemplate a similar scenario in Northern California?

    We suspect it is, especially as labor negotiations begin today between Bay Area grocers and their 30,000 unionized employees working under a contract that expires this Saturday, September 11.

    Published on: September 8, 2004


    • Numerous press reports say that retailers in Florida are struggling to resupply their stores so they can get back up and running in the wake of the devastation left by Hurricane Frances over the weekend.

      In addition to getting product into the stores, the other problem appears to be one of power – getting electricity into the stores, and clearing away the downed power lines that are preventing access to so many streets and highways around the state.


    • Ahold’s Albert Heijn chain in the Netherlands reportedly plans to expand its convenience store presence by opening them in both industrial sites and on university campuses, according to a report from PlanetRetail.net.


    • A new report from French retailers and appearing in the American Journal of Clinical Nutrition suggests that moderate intake of wine can be helpful in preventing death when consumed by people with high blood pressure.

      High consumption of wine or any consumption of beer didn’t seem to have any impact on people’s health.

      In part, the study focused on the higher mortality rates experienced by people in the US and northern Europe as compared with people in Mediterranean countries where people drink wine on a more consistent basis.

      Wine Spectator, by the way, also reports on another study suggesting that people who have suffered heart attacks need not give up wine in order to help the heart heal – though it concedes that there have been contradicting studies in this area. Some say that wine helps ward off a second heart attack, and others (including the American Heart association) currently say that heart attack survivors should abstain from all alcohol.

    KC's View:

    Published on: September 8, 2004

    The Food Marketing Institute (FMI) currently is running a quick poll on its website, asking people to address the issue of reimportation of less expensive prescription drugs.

    The question:

    If the government allows it, would you buy or sell pharmaceutical products re-imported from other countries?

    The results are curious (though it has to be kept in mind that this is an unscientific survey because anyone can answer and there are no controls or restrictions on respondents).

    Predictably, a majority of respondents – almost 69 percent – said that they would be willing to engage in reimportation, but only through a reputable drug wholesaler.

    Slightly more than 28 percent of respondents said that even if the government allowed it, they would be unwilling to reimport pharmaceuticals from abroad – a position, quite frankly, for which MNB would love to hear the rationale.

    Just a small cadre of people – about three percent – seem sufficiently fed up with the costs of prescription medicines in the US that they are willing to bring in medicines from other countries “however they can source the product.” Which is a position about which MNB is even more incredulous, since it seems to us that low prices may not and ought not be the final arbiter about which medicine to buy.
    KC's View:
    We’re not sure that FMI is looking at this information as a barometer of how it should position itself in the debate over reimportation…but the results certainly will be of interest to the folks down in DC.

    Make yourself heard on the issue. Go to:

    http://fmi.org/research/

    Published on: September 8, 2004

    Supermarket Guru Phil Lempert is scheduled to appear on NBC’s “Today Show” this morning, focusing on “toxic fish,” explaining to consumers everything they need to know about the impact of mercury, PCBs and other substances on the fish sold in markets around the country. The segment should offer plenty of answers to the questions that concern both retailers and shoppers – so tune in or set your VCR.
    KC's View:

    Published on: September 8, 2004


    • FreshDirect.com has promoted Dean Furbush, the company’s COO, to be its CEO, and named Steve Michaelson, former vp-marketing and merchandising at Weis Markets, to be the company’s president.

      Furbush replaces company co-founder Jason Ackerman, who remains as CFO and vice chairman.

    KC's View:

    Published on: September 8, 2004

    Yesterday, we mistakenly referred to Decatur, Indiana, as Decatur, Illinois.

    We were only off by about 300 miles. Sorry about that.

    Decatur came up, by the way, in a story about how a study had detailed the impact of the building of a new Wal-Mart Supercenter – there would more jobs, but at significantly lower salaries, with likely competitive problems befalling smaller local businesses. Yesterday, the Decatur City Council approved the rezoning request that will allow for the construction of that new Wal-Mart.
    KC's View:
    Whether or not that decision by the council was a goof will be up to historians to decide.

    Published on: September 8, 2004

    We got the following email from a member of the MNB community about our story detailing the debate taking place in Mexico about Wal-Mart’s building of a supercenter adjacent to the ruins of Teotihuacan.

    They just do not need a huge retail store built over the top of ancient ruins. There are always more places to put a store -- there are only a finite number of places where we can begin to understand our own history and therefore ourselves. A hotel and a crumbling sign simply are not on the same scale, nor are they comparable as an introduction to commerce.

    Seems to us that there are different kinds of temples…and that sometimes we may get our priorities turned around a little bit.

    ”Render therefore unto Caesar the things which are Caesar’s; and unto God the things that are God’s.”

    And another MNB user had a general Wal-Mart observation:

    I am generally with you on the impact of Wal-Mart on the US economy. It looks like none of the presidential candidates are offering any solutions for well-paying jobs in America. They are themselves benefiting from the big
    business wallets in big way.

    It is hard to blame large businesses for exporting jobs to satisfy Wall Street bottom lines.

    If a change will take place in the future, it will have to come from the
    low and median income level people.





    We had a piece last week about speculation that Target might make a bid to acquire the UK’s Sainsbury, but one MNB user was skeptical:

    Think a Target deal for Sainsbury is unlikely at this time. Makes more sense for Target to focus their capital on maximizing their USA sales, particularly their Super Target format, before venturing overseas.

    Sainsbury’s upscale positioning syncs well with Target’s client base. However, Sainsbury’s claim to fame is as a food retailer. Target’s competencies are in the non-food arena, especially apparel.

    However, never rule anything out! Wal-Mart has achieved great success with their Asda acquisition and an auction of Sainsbury would be a unique opportunity for Target to get established in the UK.





    We wrote last week that sometimes people make the decision to buy organic/natural foods for political as well as nutritional reasons, an observation disputed by MNB user James F. Curley:

    The preference for organic foods is not really political in a strict sense, Kevin. Ecological, perhaps, but not political. I’ve been launching organic brands for a long time. I’ve seen all the LOHAS consumer research, and people who buy organic products clearly profess a consistent preference for products that are better for the environment, regardless of whether the product is more specifically nutritious or not.

    In fact, no serious marketer of organic products makes superior nutrition claims in terms of vitamins, minerals, etc. The LOHAS consumer perception is that organic products are ‘healthier’ in the sense that they are less damaging to the ‘micro-ecology’ of the human body as well as the ‘macro-ecology’ of the planet in general. It’s not in any way a fad, but a deeply held ‘worldview’ that is shared by farmers, producers, distributors, retailers and consumers who eventually come to understand that the health of the soil and water are integral to the health of organisms that share those resources. It will continue to grow because people are getting better educated all the time about these ‘integral’ relationships and see both the logic and wisdom in the move towards sustainable soil, water and crops.

    I share that worldview, and am committed to a clean, sustainable, profitable and plentiful food supply for the future. If that’s ‘political’, then so be it.


    We’ve become addicted to “Hardball” on MSNBC lately…and that may be coloring our thinking that everything is political.




    Responding to yesterday’s story about how there are new studies questioning the health impact of the Atkins Diet, one MNB user wrote:

    Balance is the key - water, grains, fruits, veg, meats, oils, dairy; a good dose of exercise...and wine to wash it all down. Always has been, always will be.




    And finally, MNB user Chris Riesback wrote a nice note responding to our mention of our eldest son going off to college.

    My wife and I had those same sentimental feelings rolling through each year as we send our oldest off to college. It makes it a bit more challenging when they go to school a distance from home. He's in Ohio, we live in
    Connecticut.

    This year, as he left to begin his Junior year, we were awaiting the day our washing machine could take a well-deserved break and his room could be cleaned, aired out and organized to Mom's standards. We love him and miss him when he's away and cherish the 1st break he has and we can see him and share time with him. It appears that there's some truth to the adage, “distance makes the heart grow fonder.”


    After we dropped our son off and got him settled on Monday, we stopped nearby for lunch before driving home. There, we bumped into a nice couple from St. Louis that had dropped their son off as well…and in their case, they have four kids in college at the same time! (Which sounded tough until we got an email yesterday from an MNB user who has triplets all starting college this year!)

    But this couple made the most interesting observation about college: “You send your kids there as teenagers, and they come back as people.”

    Which is why you have to look at college tuition not as a cost, but as an investment.
    KC's View:

    Published on: September 8, 2004

    By Kevin Coupe

    In addition to writing MorningNewsBeat each day, Content Guy Kevin Coupe also contributes regular columns to a wide number of publications, including the now-defunct FMI Advantage. As a regular MorningNewsBeat feature, the folks at FMI have graciously agreed to let us reprint some of these columns…

    One other note. This piece originally appeared in January 2004, and reflected on one retailer’s outstanding pre-holiday season efforts. It may be worth reading now from a different perspective…as retailers look to develop plans and strategies for the coming months…



    The party's over, it's time to call it a day.

    Except that, for Dorothy Lane Markets, the residual good will from a party it held almost two months ago continues to felt…reflected in increased sales.

    It was on a chilly November evening that I found myself in Dayton, Ohio, home to three Dorothy Lane Markets that are generally conceded to be among the best supermarkets in the United States. I wasn't just there because I like the city and the supermarket chain, but because I wanted to attend Dorothy Lane's annual Holiday Food & Wine Show, being held at the company's Springboro store.

    The last time in Dayton, one of the people who worked in the DLM wine shop had recommended a particularly nice bottle of Shiraz, and the grill had served up a terrific lamb burger with rosemary; supermarket food often being mediocre at best, this food was so good that I didn’t want to miss out on this annual event, to see a little Dorothy Lane magic in action.

    What I found upon entering the store was a line of several hundred people, most of whom had made reservations and all of whom were willing to pay $60 apiece to attend the event. (Almost 400 would attend by the end of the evening.) The mix of people was eclectic; some clearly had just come from the office, some were dressed in jeans and sweatshirts, and others (mostly women) were decked out for what appeared to be a night at the opera.

    There wasn't an opera in sight, however, though there was a jazz band on the mezzanine to keep things lively. And beyond that, there were a plethora of food stations, all of which were serving items whipped up in Dorothy Lane's kitchens. And spotted in between them were wine tasting bars, offering a broad range of vintages from a variety of sources - not to mention intelligent, engaging conversation about wines, foods and how they best go together.

    (The store remains open during the event; some people who show up planning to pick up some bread and milk end up staying for the event, while others simply work their way through the crowds as they do their regular shopping. Nobody seems put off by the crowds; rather, there is a sense of celebration that seems infectious.)

    Midway through the evening, I caught up with Todd Templin, director of wine sales for Dorothy Lane. Clad in bow tie and carrying a glass of red wine, he was the evening's host, and he'd been scurrying about making sure his guests were happy. But now things were calming down, and he had a few minutes to chat.

    "This is our sixth annual event, what has evolved into our annual Holiday Food and Wine Show," Templin said. "We started it as an adventure, as a way of rewarding our customers and thank them for shopping in our wine shops throughout the year.

    "There's an opportunity to taste 80 wines this evening, from an amazing array of countries," he said - pointing to tables that featured wines from Australia, California, France, Greece, Italy, New Zealand, the Pacific Northwest and Spain. "We taste out of Riedel stemware," he said, noting that patrons are allowed to take their wine glass home with them. And he loves the mix of people. "Wine should be casual," Templin said. "It shouldn't be pretentious."

    Membership in Club DLM isn’t necessary to attend; the stores advertise the event aggressively, hoping to entice new as well as sold customers. The main goal, said Templin, is education. "We believe that education is the key, and that is why we have well-trained staff in all of our shops, staff that travels to the wine country regularly. We think it is key to pass that on to the customers." The Food & Wine Show expands this theory with a big bang - there are distributors from a number of companies on hand to help educate attendees about various vintages.

    Enclosed in each of the 24-page programs handed out to attendees is a place where they can keep notes about the wines they taste…and an order form that allows them to order them by the bottle or in bulk.

    "We've had repeat customers who come to this event, and while there are wines here that may not have sold in the past, they'll buy multiple cases" - because they've fallen in love with the taste, Templin said. "And through Thanksgiving, we'll see order forms coming back, and we'll actually see them (coming in) through into the New Year. It’s a very good thing for us in sales, post-event.

    "I think that the consumer doesn’t know a lot of these little wines, so it is our responsibility to get that information into their hands."

    As Templin moves off to greet some customers, I had a chance to do a little tasting of my own. There was a Clerico 2001 Dolcetto from Italy, and an Altos De Luzon 2000 Jumilla that were particularly good, as was a Penner-Ash 2001 Pinot Noir. In between, I nibbled on sushi from this table, oysters from that one…salmon cakes with remoulade sauce over here, and veal flank steak with cranberry shallot relish over there. (Not a bad job, eh?)

    But as I nibbled and sipped, I had a chance to look around at the associates and customers who mingled and chatted so convivially. There was a connection here between shopper and shopkeeper, and the vehicle was the food and wine. A synergy among all three was being created and nurtured, based on a mutual interest in good food and a similar approach to life.

    In an era of cost-savings and driving efficiencies, this connection shouldn’t be minimized. It can be critical to success, especially for the independent retailer looking for any and all advantages.

    For Dorothy Lane, it may be a $60 bottle of wine and gourmet food. For others, it may be a great beer and the best barbecue or meat loaf in town. And the role of education and information certainly can be expanded to other categories.

    It seems to me that great relationships between shoppers and shopkeepers can be forged this way. Done right, it can mean that the party never will be over.
    KC's View: