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    Published on: September 17, 2004

    A&P-owned Farmer Jack Food Markets in Michigan and Ohio have instituted a new promotional program designed to build traffic and sales – the company says that if a customer finds a product in the store that is not fresh or is out of date, the product will be replaced free.

    The program, called “Take The Fresh Challenge,” is part of a freshness-oriented strategy launched by the company more than a year ago.
    KC's View:
    Just out of curiosity, under what circumstances would a supermarket not take back and replace a product that was either not fresh or past its sell-by date?

    Now, if the company actually is saying that if you find a non-fresh or out-of-date product in the store, it will give you a fresh version of that product for nothing, that’s a different matter. (Though to be honest, it doesn’t seem like such a big deal, either.) But that’s not what the company press release says.

    What Farmer Jack is offering to do, it seems to us, is the bare minimum of what any supermarket should do under normal circumstances. If it was doing less before this, it may explain why the chain has been having its share of competitive problems.

    Published on: September 17, 2004

    The Kroger Co. announced yesterday that its board of directors has approved a repurchase of $500 million worth of the company’s stock. CEO David Dillon said in a statement that “the new share repurchase plan reflects our confidence in the company's strategic direction and our belief that Kroger shares represent an attractive investment opportunity.”

    The new stock repurchase replaces an existing $500 million buyback that begin in 2002 and still had $15.9 million remaining.
    KC's View:

    Published on: September 17, 2004

    • Wal-Mart reportedly will open a store in St Petersburg, Russia, next year, according to the chairman of the city’s economic development committee.

      Interfax reported that the official, Vladimir Blank, said, “I have such information, but I'm not ready to talk more in detail about the opening of Wal-Mart.”

      While Wal-Mart is not commenting on the story, there are reports it has found a location on the outskirts of the city and already is recruiting staff.

      The company has long had an interest in Russia, having already brought its brand of retailing to countries that include Germany, Japan, South Korea, Argentina, Brazil, Puerto Rico, the UK, China, Canada and Mexico.

    KC's View:

    Published on: September 17, 2004

    The October 2004 issue of Fast Company has a couple of relevant stories worth paying attention to…

    • There is a very interesting profile of Sir Richard Branson, the British entrepreneur known for outrageous stunts and unconventional decisions that have turned him into one of the world’s best known businessmen.

      The piece is focused mostly on Branson’s new efforts to bring his brand to the US, but we were intrigued by some of the nuggets of wisdom sprinkled throughout the article.

      For example, Branson says, ”The time to go into a business is when it’s badly run by others.” And he says that so-called ‘first mover advantages” are overrated – he prefers to get in late and find ways to improve existing but failing enterprises. In some ways, that seems to be what Wal-Mart has done in the food retail business – with some exceptions, it isn’t being done well, and Wal-Mart’s differentiated approach has made a difference.

      But, Branson says, there remains room for lesser companies to succeed. “In the end, if you can create the best, the best will always succeed,” he says. “If you’re smaller than the big guys, then you have to be the best by far…”

      And, he says, he doesn’t spend too much time focusing on profits. “The bottom line has never been a reason for doing anything,” he says. “it’s much more the satisfaction of creating things that you’re proud of and making a difference.”

      Fascinating stuff, and an interview worth reading. Of course, it’s easy for Branson to make such pronouncements because he’s had such enormous success. But he’s also had failures – Virgin Cola, for one – but it hasn’t mattered because his brand has a larger meaning and it’s always seemed worthwhile to take risks with it.

      After all, there’s no point in winning a pile of chips if you’re not willing to gamble some of them away.

    • The same issue of Fast Company also rates companies that are exceptional at “putting customers first,” and ranks at the top of the list retailers such as Trader Joe’s, Costco Wholesale, Walgreens, and, not surprisingly, Wegmans.

      In the case of Wegmans, the company is cited for making a commitment to employees – especially in terms of training – that is played out in how those associates deal with customers. Knowledgeable employees, Danny Wegman tells the magazine, “are something our competitors don’t have and our customers couldn’t get anywhere else.”

      Which comes back to a point that MNB tries to make with some frequency: that employees need to be looked at as an investment, not as a cost.

    KC's View:

    Published on: September 17, 2004

    Sundance, the Utah resort owned by actor/activist Robert Redford, is launching its own wine label consisting of four wines made by different producers - a Chardonnay from Sonoma County, a Merlot from Napa Valley, a Willamette Valley Pinot Noir from Oregon and a Syrah from San Francisco-based Heron Wines.

    The goal, according to a statement released by the resort, is to provide the same kind of support to independent winemakers that the Sundance Film Festival has offered to independent filmmakers. The wines and winemakers were chosen because of their commitment to causes that Sundance finds compatible with its spirit, such as sustainable farming and environmental concerns.

    For the moment, the wines will only be sold at the resort, but Sundance is looking in to broadening distribution.
    KC's View:
    It’s always nice to see that idealism can co-exist with capitalism. If Redford can do for independent wineries what he’s done for filmmakers, it will be an extraordinary contribution to the art and business of winemaking.

    The notion of selecting wines from various sources that can then be marketed under a common brand name is an interesting one – and Fleetwood Mac’s Mick Fleetwood is engaged in much the same enterprise (albeit without the social consciousness espoused by Sundance), selecting and marketing wines under the name Mick Fleetwood Private Cellar. These wines will be in limited supply, and sold through exclusive contracts in various markets.

    Obviously, Francis Ford Coppola’s efforts have paid off, if only because they have encouraged investment in and commitment to the nation’s wine industry. Coppola, of course, has built an enormously successful business with his Napa Valley Niebaum-Coppola vineyards, which make some wonderful wines that we keep on hand in the MNB wine cellar. (Wine racks, actually…but wine cellar sounds better.)

    Just FYI, Coppola even has produced a Merlot and Chardonnay from grapes grown on George Lucas’s Skywalker Ranch. So everybody is getting into the act…

    (We actually have a bottle of the Chardonnay sitting in a rack…we’re hoping it is a better wine than “Star Wars Episode 1: The Phantom Menace” was a movie…)

    Published on: September 17, 2004

    Really interesting piece in Hispanic Business about Coachella Ranch Market, which caters to a broad Hispanic immigrant population in the Coachella Valley in Southern California.

    The company actually has six stores – the Ranch Market and five smaller Toro Loco stores. And the strategy isn’t to replicate the approach and selection offered by the major chains, but to have the right products that are desired by the target demographic. The goal, according to management, isn’t to be all things to all people, but to be relevant to the shoppers who have the company’s stores a success.
    KC's View:
    True enough. You can’t be all things to all people. But major supermarket chains are sometimes loathe to make those kinds of choices…which can leave terrific openings for smaller companies that are willing to make a commitment and go against traditional, mainstream, conventional wisdom.

    Because let’s face it. If you follow conventional wisdom, you end up with a business enterprise that’s conventional.

    Published on: September 17, 2004

    Researchers at the University of Western Ontario have published a study saying that one beer a day can provide drinkers with the same benefits that red wine is believed to offer.

    More than one beer apparently inhibits the antioxidant properties of beer. But one beer can fight the “free radicals” in the body that can cause cancer and heart disease and a host of other ailments.
    KC's View:
    Of course, it has to be noted that the study was funded by Guinness and Labatt…but let’s not allow that small detail to diminish one of science’s greatest discoveries.

    We’re feeling better already. As one of the century’s great philosophers once said:

    Gimme oysters and beer for dinner every day of the year and I’ll be fine…

    Published on: September 17, 2004

    • Nonprofit research firm Civil Society Institute has released a poll suggesting that 34 percent of citizens who use prescription drugs already have begun sourcing less expensive varieties of these medicines from Canada or other places.

    KC's View:

    Published on: September 17, 2004

    We received a remarkable number of emails regarding yesterday’s story about Wegmans and its problems with Rochester area communities that are resisting rezoning moves that would allow it to build new stores there.

    MNB user Chris Schwantner wrote:

    I am a former Rochesterian and former Wegmans employee (Produce Dept. during high school) now living in Springfield, MA. For "outsiders" the attitude of some Rochesterians may seem strange. The thing is that for people in the Rochester area Wegmans is simply our local supermarket. They do not think of it as "one of the best retailers overall." It is where you go to buy milk and eggs. It has been like that since the 70's. Top's markets has had to match Wegmans at every turn just to keep its market share. Rochester is spoiled and does not even know it. We giggle at out of town family and friends who marvel at our supermarket and treat it like a tourist attraction. It was not until I moved away that I realized that Wegmans was a great store.

    Danny Wegman needs to realize that in the Rochester market he has won! The locals think the level of service he provides in normal across the nation. The same people would protest any zoning change. Mr. Wegman needs to educate the locals that they have the best and things could be much different.

    Another MNB user wrote:

    I've only been in one Wegmans. It's located outside of Washington DC, just down the street from Dulles International Airport. That store is
    absolutely the most amazing grocery store I have ever been in, and let me add that I have been in literally hundreds of grocery stores all over the country and several others around the world. From what we saw, my wife and I would be willing to drive 30-45 minutes each way just to shop there.

    Wegman's is welcome in North Carolina anytime!!

    Yet another member of the MNB community had another idea about where Wegmans should go next:

    Wegmans in CT is the best option!!!

    Works for us.

    And MNB user David J. Livingston wrote:

    That was an interesting piece. Here Wegman has 70% of the market and they are complaining. They aren't accused of putting smaller retailers out of business, but with 70% of the market there aren't any smaller retailers left to put out. I'm sure Wegmans is frustrated when they get flack from their hometown. Just like Wal-Mart would be if Bentonville tried to stop a new Wal-Mart.

    But its not going to be a choice of if Wegmans will pick a corner in Rochester, or a Wegmans in Connecticut, Delaware, or Pennsylvania. They will most certainly keep expanding despite what happens in their back yard. And yes, Wegmans is one the best in the world. We can't praise them enough.

    MNB user Janine Darby chimed in:

    As a Wegmans corporate employee for the past 12 years, I totally agree w/ Mr. Wegman's position.... Rochester's economic situation is dwindling rapidly and if towns and officials don't want to play ball with someone who has proven himself over and over for the past umpteenth years, and who very generously gives back to this community, then he should look into building elsewhere, where the community appreciates him!!!

    And yet another MNB user wrote:

    Wegman's has always been on the cutting edge of food marketing and customer service. More importantly Wegman's has been responsive and progressive with the communities and cities where they operate. What appears to happen in situations like the one reported, they get caught up in "Wal" bashing frenzy, which is unfortunate for them-they deserve better.

    But as the old guard moves out of politics in town and city governments, new blood comes in attempts to shake up the status quo of operations. Well it seems that these may be the same people who also shop at Wegmans but won't admit to it.

    Wegmans often needs to expand in order to offer the full service their customers want and expect, and it is about time that their customers become responsive and supportive. They just don't know how lucky they are!

    And one more comment from the MNB community:

    I grew up in Rochester and worked for Wegman’s through high school and then later, as a career. Although I left the company and the area over 10 years ago, I still have family and friends that live in Rochester and some of whom work for Wegman’s. I have heard and seen the culture of the company change over time, however, compared to other Supermarket retailers in the industry you can’t say many bad things about Wegman’s.

    From the way they run their stores, to treatment of their employees, to giving back to the community. When I worked there, United Way was almost mandatory, offering part-time positions to area high school students, mentoring them, providing Wegman’s Scholarship opportunities to them…. I can’t tell you how many moms’ worked in our stores because the company accommodated the school hours of their children. Wegman’s managers were always encouraged to go the extra mile for the community… I can vividly remember opening our doors during on of the worst Ice Storms the city had seen (1992?) and walking customers up and down the aisles with flashlights so they can buy essentials. Every store had permission to sign slips for food donation up to a certain dollar amount that representatives from various associations and churches took advantage of on a weekly basis.

    As far as Wage and Benefits go, it is my definite understanding that they are still head and shoulders above other retailers. When I worked there, there was not even a contribution for benefits and the profit sharing and 401K plan was extremely generous. Obviously times change, but I can’t imagine so much so that there would be a circumstance were building a new or replacement Wegman’s store would not be a benefit. With so many other companies in Rochester relocating their facilities or reducing workforce, I would think the creation of additional well paying jobs would be a perk.

    Wow! Just a remarkable outpouring of affection for one of America’s best retailers.

    We ran an email yesterday from MNB user Erica Shafer that read:

    On the Supermarket Guru website yesterday there was a story about mad cow and Japan. Japan tests every ONE of its 1.3 million cows that are slaughtered and has come up with its third cow this year. The U.S. slaughters 36 million cows a year and next year expects to test 40,000 cows for the disease. Based on Japan's results, the chances are that 1 in roughly every 43,000 cows are infected with the disease. If the U.S. had the same infection rate as Japan. It would stand to reason that they only found 1 cow this year if they were indeed only testing around 40,000 cows.

    Furthermore, assuming the disease rate was the same as in Japan, with over 36 million cows being slaughtered this year in the U.S., we should actually have close to 837 cows that are infected and in our food chain. That is a very large number, almost enough to stop me from eating beef…

    Now, the Content Guy’s father happens to be a former math teacher, so we should have caught this…but we didn’t. However, several MNB users wrote in to point out that Erica’s math was a little off – that at the same infection rate as Japan, the US actually would have 83 infected cows, not 837. (It was one decimal point. Anyone could’ve made that mistake.)

    Interestingly, though, almost everyone who caught the math mistake said that 83 possibly infected cows was still too many – not as bad as 837, but certainly more undetected infected cows than you’d want to have in the US.

    And we agree.

    We also got an email regarding our story about the impending sale of the Mondavi winery and high-end brands:

    While reading your commentary on Mondavi and your comment about the family it made me think of a book I have read about Napa Valley and the history and politics of wine. The book is called "Napa" by James Conaway. If you enjoy knowing a little more about the histories of the wineries it is a good it talks a little about the family feud over Mondavi. You will
    also learn more that wine making really isn't is, as you said, entrepreneurial and lots of people gave up lots of money to pursue a dream and make some great wines. I personally would like to thank Francis Coppola
    for his everyday wines as well as his higher end wines...order a bottle of
    the Director's Cab and enjoy! Prost!!

    Regarding our tongue-in-cheek suggestion that maybe Martha Stewart shouldn’t be allowed to go to prison early, but rather sentenced to just shut up, one MNB user observed:

    Martha just doesn't get it. I personally don't like her and never have. But, I thought the prison sentence was harsh. Now that I see that she is comparing herself with the likes of Mandela, I hope she enjoys the time away. Also-- I think Nelson did a bit more time than 5 months in can.

    But another MNB user wrote:

    Sorry, this time I disagree with you. This marks a huge change in attitude with Martha. If she wins the appeal, she will not have to do the time. She has decided to do it. This woman has never admitted defeat at all, much less graciously. I believe the stone heart is softening. Thankfully.

    One MNB user accused us the other day of being an elitist concerned about an elitist when we wrote about the Mondavi travails. MNB user Gretchen Murdock responded:

    Kevin, I have to disagree with the reader who accused you of being elitist for your response to the sale of parts of Mondavi Wines. As we all know, public companies are bottom line oriented. And I’m sure they are looking at the growth in consumption of wine in this country, especially lower-end wines, as their niche. But what a shame to dilute the vision of Robert Mondavi.

    Wouldn’t it be more in line to have the wider range of wines that will appeal to all audiences and still keep the integrity of the brand? Many successful companies in the packaged goods arena use this strategy to great success. We just hope they are not being shortsighted and greedy. I appreciate the breadth of your coverage – keep up the good work.


    Regarding Caribou Coffee’s new deal with Independence Air to be the exclusive coffee provider, similar to United’s deal with Starbucks, one MNB user observed:

    I hope that Caribou gets its "airline" coffee right. I travel on United, and I would never claim that it is the same stuff that is sold at Starbucks. I often wondered why Starbuck's didn't sue United for product defamation.

    These days, when we fly somewhere, we’re just happy when the airline is still in business when we want to fly home.

    We had a piece yesterday about Gap Inc. announcing that it will launch a new chain during the second half of next year, aimed at the almost 40 million women in the US over 35 years of age. A name hasn’t been announced.

    Joking, we suggested that “Ample” might be a good name. (In retrospect, we have a better idea: “Crevice.”

    But we also thought that the story “raised an interesting point about the lack of segmentation that is seen in food retailing. So many supermarkets are aimed at a broad demographic, with retailers thinking they can be all things to all people. But moves such as the one being made by Gap suggest to us that maybe there are opportunities not being exploited by food retailers…that more demographically targeted stores could have a role in revitalizing the business model.”

    One MNB user wrote:

    Hold on a minute – I’m one of those baby-boomer women who think it’s about time that there were more offerings of clothing that fit a more mature woman, not only in size (NOT AMPLE, thank you), but in appropriateness. We don’t want to look like our teenaged daughters, but we also don’t want to look like our mothers. Let us hold onto the vision of ourselves as we were in the 60s and 70s – just not look that way.

    And MNB user Georganne Bender wrote:

    It's about time the stores we Baby Boomers grew up with have finally decided that our business is worth pursuing. We are, after all, 50% of consumer demand. But it won't mean a thing if clothing companies continue to design clothes for 6' tall women who weigh twenty pounds. In our focus groups Baby Boomer women continually complain that stores have tried to feed them garments that are designed for 20-something bodies, have those attractive elastic waistbands, or are made from inferior fabrics. Ralph Lauren's size XL sweaters, for example, fit a size 12 women. Since when is a size 12 extra large? The average American woman is a size 12 or 14 and she wants to buy nice clothing that fits her body -- not some designer's vision of what they'd like her to look like.

    And MNB user Glen Terbeek chimed in:

    You are right on!

    Successful non-food retailers for years have understood targeted stores for targeted markets. The regional malls enabled this to happen. Companies like the Limited or the Gap with many differentiated and "unique" formats or brands, match one or more of the formats or brands to the market attributes of the mall.

    The successful malls help this by marketing an overall image for the mall, i.e., "upscale fashion" or even "outlet" themes to draw the targeted consumers; they don't accept just any retailer that wants to get in the mall. The successful retailers or malls don't try to be all things to all people. We all know what happened to the dominance of the department store segment when the above targeted marketing developed.

    It's time to rationalize the supermarket, or more importantly, the food offering the same way. Instead of having a 60,000 square foot general food store, why not have one or more smaller and targeted, branded stores dictated by the marketplace opportunity? One format could be for young professionals, another for senior citizens, or valued priced, or another for upscale gourmet, as examples. They could (would) be supported by a consumer direct mechanism to make "commodity" items (Tide, Coke, etc.) that don't add value by being in that store available for pickup or delivery to the shopper. Or the branded, target stores could even be clustered in a common "food mall", with a center court for the "commodity" items, and separate entrances for each unique customer group.

    But this will never happen at the big retailers because the current organizations, measurements and business practices won't allow it to happen. Trade dollars, centralization around supply chain productivity, and product category management in its current state, are a few of the items in conflict. First department stores, then supermarkets.

    Future success will be built around marketplace productivity measured in return on space and return on true targeted loyal shoppers. Isn't it time to put marketing back into supermarkets? The key question to ask at the large retailers is; Who is responsible for maximizing the market performance of each store? The truthful answer always is; Everyone is, but no one is!

    Think about it!

    We wrote yesterday about how Cracker Barrel Old Country Stores will begin providing nutritional information to customers, but only when they make a specific request…and joked that the company will give it to patrons engraved on a cube of lard.

    One MNB user responded:

    This is going to be cruel but someone's gotta do it: Have you ever LOOKED at most of the people eating at Cracker Barrel? Do the CB execs honestly think for one quick second that most of the folks gorging on country-fried steak or sausage gravy & biscuits made with god-only-know what hydrogenated vegetable lard, care in the least about nutrient content?

    Not that the info shouldn't be available, it should. Just how many customers do they think will WANT it?

    Another MNB user thought we weren’t very funny:

    C'mon, can't you do better than that?

    You remind me of some of my chowhound friends. They rant forever about the fat content in McDonald's and the large chains. Then they head to the local diner and eat a rack of ribs and fried chicken with a side of french fries, etc.

    Cracker Barrel is one of the *FEW* restaurants where I can get a vegetable plate and can select some low-fat options.

    You folks rant constantly about the need for good nutrition and when Cracker Barrel offers its nutritional information, you kick them in the teeth.

    Gee, we were just trying to have a little fun…

    MNB user Demise Kaplan got the joke:

    You crack me up. I laughed out loud three times at your point of view but the one about the nutritional info being engraved on a cube of lard took the cake! You are in rare form today. Have a nice day and thanks for putting a smile on my face each day.

    Our pleasure. Our work here is done.

    Controversy continues to rage around the debate we’ve been having on the site about the French. Some folks continue to feel strongly that we need to hold the country and its people responsible for the French government’s lack of support for the US invasion of Iraq; we’ve argued that, for example, French vintners ought not to be held culpable for the actions of their government…and plan to continue drinking French wine.

    MNB user Richard A. Bernstein wrote:

    Americans are right in supporting our friends (Australia) and not our enemies or those world class ingrates…

    But another MNB user wrote:

    No, Kevin, the distinction is neither impossible nor inappropriate. Americans are an emotional lot. Each day I see the "if you're not for us, you're against us" attitude in play. For whatever reason, people cannot separate government & politics from individuals. Consequently, whatever the French government decides, WE PRESUME means every French citizen agrees upon. Any thinking person knows that is ridiculous.

    Another MNB user wrote:

    Don't let them get to you with all this French (expletive deleted). I don’t get it either.... There are so many inconsistencies with their moralistic behavior when they condemn the French and yet don’t condemn the current administration for its atrocities.... They can't possibly see that they could be wrong so quit engaging them in "dialogue" since for them there is no open mindedness to consider changing their minds!

    And finally, a word of advice from one member of the MNB community:

    I think if I were you, Kevin, I'd continue to try to avoid both politics and religion.


    That’d certainly be the safe way to go. But the thing is that when we started MNB, we didn’t ever want to play it safe. We wanted to create an online community where people would say things they’d never say elsewhere, and where we could get a real and unvarnished view of how people in the business think and feel. Some people talk about so-called “collective thinking,” but we think MNB actually offers individual and independent thinking that adds up to something tangible.

    We get more email each day than most sites of this kind get in a year, and we think it is because MNB doesn’t play it safe.

    In the end, we encourage retail businesses to take risks, to be unconventional, to be willing to innovate. If we didn’t do the same, it would be pretty hollow commentary.
    KC's View:

    Published on: September 17, 2004

    The weather has gotten a little cooler here in New England, so we’ve taken the opportunity to move back to some of the red wines that have been stacking up like planes at O’Hare.

    Our favorite this week was a 2001 D Cubed Howell Mountain Zinfandel from the Napa Valley, which had been generously sent to us by our friend and MNB user Marv Imus.

    This was everything we like in a Zin – smoky and fresh, intense and robust – perfect with a thick steak or juicy cheeseburger.

    Thanks, Marv…it was delicious.

    And to the entire MNB community…have a great weekend!

    KC's View: