retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: October 5, 2004

    • Wal-Mart announced that it plans to open as many as 40 to 45 discount stores and between 240 and 250 supercenters in 2005 just in the US, and another 165 outside the US – all of which adds up to an eight percent increase in retail square footage over 2004’s levels.

      The company also said it plans to add, relocate or expand as many as 30 to 40 of its Sam's Club stores in the US, and will build as many as 30 new Neighborhood Market stores next year.

    • A piece in the Winnipeg Sun notes that as Wal-Mart faces far more pressure from union organizers in Canada than it does in the US – employees in one Quebec store have been certified while employees in another Quebec store, three stores in Saskatchewan and one in British Columbia all are seeking the same status – union organizers there are predicting that the retailer “will have union staff in every Canadian province within five years.”

    KC's View:
    The story about Wal-Mart’s growth plans made us think of an old proverb that goes something like, “While everyone wants to live on top of the mountain, all the happiness and growth occurs while you're climbing it.”

    The challenge for Wal-Mart, it seems to us, is to keep the culture intact even while growing at such unfathomable rates. There are those, of course, who would suggest that this battle already has been lost…

    Published on: October 5, 2004

    The Detroit Free Press reports that Kmart plans to remodel as many as 20 stores, creating a retail format that has brighter colors, wider aisles, better lighting ands lower shelves.

    The first stores to get the treatment will be in White Plains, NY, and Boca Raton, Fla.

    Then cost of remodeling all 20 stores will be between $200,000 and $400,000 apiece. "We are committed to improving the customer experience and these stores are an example of how we're working to do that," said spokesman Stephen Pagnani.

    While Kmart has seen declining sales since it emerged from bankruptcy, it has been selling off real estate and building a bank account that now has roughly $3 billion in it.
    KC's View:
    We’re not buying. Twenty stores does not constitute a makeover. We still think that management is in the Kmart business for the real estate sales, not because it has any interest in or commitment to retailing.

    Besides, you can’t help but notice that as Kmart announces that it will give 20 stores a paint job and some new light bulbs, Wal-Mart says it will open some 300 new units.

    The contrast is stark. Kmart’s future as a retailer is grim.

    Published on: October 5, 2004

    The Associated Press reports on the growing popularity of poker in American culture, and how “playing cards and chips will be among the must-have items during the holiday shopping season.”

    On television and the Internet, poker programs and sites have grown enormously in popularity, and retailers such as Wal-Mart, Kmart, Restoration Hardware and Crate & Barrel are stocking up on poker-oriented products in anticipation of strong demand.
    KC's View:
    If we were a retailer, we’d be looking for any and all angles that would allow us to take advantage of this trend.

    Don’t know about your kids, but our 15-year-old son is part of a group of kids who play poker together every Friday night. There are strict limits on how much they can wager, but it has become an enormously popular way to socialize on a regular basis. Plus, they’re learning some basic money skills that will serve them well in the long term.

    Published on: October 5, 2004

    The Idaho Statesman reports that “Albertsons Inc. is investing $500 million this year in new technology aimed at making the shopping experience faster and more convenient for its customers.”

    The goal, according to company CEO Larry Johnston, is to create an environment that meets the needs of time-constrained consumers. Self-scanning will be the rule, checkout lanes will be virtually abolished, labor costs will be minimized, and a differential advantage will be created for Albertsons’ fleet of stores.
    KC's View:
    To us, the pressing challenge that Albertsons faces is using technology to create a more efficient shopping experience without completely de-personalizing the act of buying groceries at one of its stores. Now that Albertsons is acquiring Bristol Farms, we hope that company’s CEO, Kevin Davis, and his team are able to help Albertsons accentuate that sense of in-store personality.

    Published on: October 5, 2004

    The Indianapolis Star profiles Arthur's Fresh Market, the new 22,000 square foot, fresh food-oriented concept created by Marsh Supermarkets. “This produce-heavy store,” the paper reports, “tries to provide a warmer, cozier shopping experience with lamp lighting, a full complement of groceries, some specialty items and a wall of wines in one-third the space of a typical supermarket.”

    In creating the format, according to the paper, Marsh is hoping to offer consumers a store that is clearly distinctive as well as differentiated from the competition, that can be opened in locations unsuitable to larger formats, and that is both convenient and profitable – a mandate since the company has suffered through nine straight quarters of declining same store sales.

    While there is just one Arthur’s open at the moment, two more units are in the planning stages.
    KC's View:

    Published on: October 5, 2004

    Published reports suggest that reimportation legislation – which would allow individuals, businesses and municipalities in the US to import less expensive prescription medicines from Canada – is unlikely to be passed by the US Congress before it adjourns this year.

    The reason? Despite broad support from both sides of the aisle, there remains considerable resistance to the concept both from the pharmaceutical lobby and the Bush Administration, which says that such a move would allow unsafe drugs into the country.

    However, as the federal government drags its feet, both Illinois and Wisconsin have signed deals with a Canadian pharmacy to get prescription medicines shipped in from north of the border. The same Canadian pharmacy already has deals with Springfield, Massachusetts, Portland, Maine, and Burlington, Vermont.
    KC's View:
    It’ll be interesting to see if this issue arises in tonight’s vice presidential debate or either of the two remaining presidential debates.

    Published on: October 5, 2004

    Discover Financial Services’s credit card division is filing a lawsuit against Visa and MasterCard, charging that the two competing card companies violate antitrust laws and seeking compensation for lost revenues.

    The suit is being filed to build on a US Supreme Court ruling that Visa and MasterCard are anti-competitive because they have prevented member banks from issuing cards on rival networks such as Discover and American Express.

    "A new era of greater choice for U.S. consumer and financial institutions has begun,'' American Express Co. Chairman and Chief Executive Kenneth Chenault said in a statement. However, Visa’s attorneys have said that the ruling will not lower prices for consumers.
    KC's View:

    Published on: October 5, 2004

    • Internet Retailer reports that at least part of the reasons that e-grocery companies such as Peapod and FreshDirect have begun to gain traction in various marketplaces is that they have learned to pay greater attention to the cold chain, maintaining facilities with a wide variety of temperatures suitable for the various products they carry and deliver.

    • The Puget Sound Business Journal reports that because of a variety of difficulties that Amazon is experiencing with the toy fulfillment side of its business - its partnership with Toys R Us is currently the subject of suits and countersuits, even as Toys R Us considers getting out of the toys business – the e-commerce pioneer may be forced to make other arrangements next year.

      Among the possibilities – Amazon could decide to get back into the toy business and handle the stock and fulfillment itself, or Amazon could find another toy partner (such as Target, with which Amazon partners in other categories) or Amazon could just acquire the toy business from Toys R Us.

    KC's View:

    Published on: October 5, 2004

    • Published reports say that Ontario’s provincial government is looking to back off a recently passed ban on raw sushi. The law had required that all sushi fish be frozen in order to kill off parasites, but sushi chefs had objected, saying it ruined the texture of the fish. After public outcry followed passage of the ban, the government now apparently is looking for ways to back off the rule without losing face.

    • US and Japanese trade officials reportedly are meeting in Colorado this week to negotiate an end to Japan’s ban on US beef, which followed the discovery late last year of a single case of bovine spongiform encephalopathy (BSE), or mad cow disease, in the Pacific Northwest.

    • The Sacramento Bee reports that California Gov. Arnold Schwarzenegger has vetoed a bill that would have required the state government to make public information about potentially tainted meat. Rather, state officials have been directed to work with federal officials to provide recall information to public health authorities, but not to the general public.

      Ken Kelly, an attorney with the Center for Science in the Public Interest (CSPI), criticized the veto. "Federal and state (officials) should be more concerned with protecting consumers from unnecessary ... food-borne illness, and less concerned with protecting grocers and meat producers from bad publicity."

    • The Cincinnati Business Courier reports that as talks between the Kroger Co. and the United Food and Commercial Workers (UFCW) continue in the Cincinnati market, there seem to be different opinions about how they are going. The UFCW says that things are not going well, but Kroger management says it believes that an agreement will be reached without a strike being called.

      The current contract expires on October 9.

    • The National Cooperative Bank released data yesterday saying that the largest grocery cooperatives in the US generated $28.1 billion in sales in 2003, a 7.7 percent increase over 2002.

    • CIES reports that the Global Food Safety Initiative (GFSI) has released a 4th Edition of its Guidance Document, which “includes new criteria designed to improve the management of food safety standards. Specifically, the new elements tighten rules for how standard owners should manage standards in coordination with auditors and accreditation bodies.”

      Chris Anstey, product integrity manager at Tesco and chairman of GFSI, says that the new edition is “a major step forward to toughen up and streamline the auditing process and maximise efficiency in the whole food chain.”

      GFSI is a retailer-led initiative, managed by CIES – The Food Business Forum, that seeks to strengthen consumer confidence in food by implementing a scheme to benchmark existing food safety standards.

    KC's View:

    Published on: October 5, 2004

    • The Arden Group, Inc., which owns the 18-0store Gelson’s Markets in Southern California, has appointed Debra L. Jensen as the company’s CFO. She is the former National operations Controller at Wild Oats.

    KC's View:

    Published on: October 5, 2004

    • Walgreen Co. reported September sales of $3.1 billion, up 13.2 percent from the same month in 2003. Same store sales were up 9.3 percent.

    KC's View:

    Published on: October 5, 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.

    Questions of obesity, nutrition and food safety tend to dominate much of the debate in the food retailing business, but they tend to do so in an environment where "food" simply isn’t a top priority. Rather, they get discussed in a cauldron where questions of efficiency and cost savings seem to be far more important than the quality of salmon.

    Which made us wonder about how someone who really is in the "food business" - that is, the business of creating great food products that appeal to people's imaginations and palates - deals with these top of mind issues. And more specifically, how does one of Seattle's top chef/restaurateurs cope with the national fat crisis, not to mention numerous questions that have erupted around the consumption of salmon (which is, like, the official dish of the Pacific Northwest)?

    In the case of Tom Douglas - who owns three of the city's best restaurants as well as being the creator of a line of barbecue sauces and rubs, and the author of two popular cookbooks - these are issues that don't really have an impact on day-to-day life.

    Douglas starts from the premise that consumers are smarter than many people give them credit for being, and that offered superior choices - whether in restaurant food or packaged products - a sizeable contingent will respond.

    Let's start with salmon. There have been a series of questions raised about the levels of PCBs in farmed salmon vs. the health benefits of wild salmon, as well as the use of food colorings to give farmed salmon the same pink color that wild salmon have. The issue is whether too much farmed salmon actually can be carcinogenic.

    Considering that one of the main dishes at Etta's, which is just down the street from the famed Pike Place Market, is a fabulous "rub-with-love king salmon" served with cornbread pudding and shiitake relish, you'd expect that maybe some of Etta's patrons might have some questions.

    But nope.

    "Those kinds of stories don't complicate my life," says Douglas, "because we don't serve farmed salmon. Besides, it's really more about a fight between the wild salmon farmers and the farmed salmon producers."

    However, Douglas says that in the long run, it doesn't even matter. "Fifty percent of people don't even recognize the difference," he says. "They just want to eat salmon," and they don't give a great deal of thought about where the salmon has come from. "My customer base does know the difference," he says, and that's where being specific and consistent in the choice of wild salmon establishes a sense of trust between the restaurant's patrons and chefs.

    Just as trust is a key component of any relationship between shopper and shopkeeper. In most supermarkets, however, the issue is only addressed if the customer asks the person behind the fish counter…and not even then can one be guaranteed that the answer is going to be correct and enlightening.

    As for the issue of America's expanding waistline…well, that also seems to be an issue that people tend to forget about once they pass through the front doors of Douglas's establishments. People don't tend to worry about it, he says, "because they're making a choice to spend fifty dollars or more per person when they come through the front door," and are willing to cast those concerns to the wind…at least for the evening. These customers, he says, "don't want the lard to be taken out of the pie crust." At least, not tonight.

    Douglas's restaurants include the Palace Kitchen, the Dahlia Lounge, the Dahlia Bakery, and Etta's Seafood, (They’re regular stops for me whenever I'm in Seattle, terrific neighborhood restaurants that are welcoming and warm, especially on a rainy, chilly evening. You can find out more about them at .

    One thing that has changed, Douglas says, is customers' interest in low-carb choices on the menu. Five years ago, he notes, the restaurants would always have a vegetarian option on the menu for people who didn’t eat meat. These days, the vegetarian contingent seems to have been replaced by the low-carb enthusiasts, and that means always having a variety of choices that are low in carbohydrates.

    Douglas believes that on all these issues, people need and want to be educated, though he doesn’t think it is the restaurant's responsibility to provide that kind of information. "It seems to me that the people who want to be educated will educate themselves, and the people who don't, won't."

    For example, he says, a lot of people over the past few years have educated themselves about wine, even beyond the "Two-Buck Chuck" craze for value-priced wines that has swept the country. Particularly in the Pacific Northwest, which has a thriving and expanding wine industry, people are teaching themselves about the local product. "Sixty percent of our wine sales are of Washington State wines," he says, "and if you count British Columbia and Oregon wines, it's as high as 70 percent."

    And despite all the media hype about Americans not wanting to spend any time in the kitchen, Douglas believes that there is still a role for cooking in the traditional US household. "It's a big country, and there still are a lot of people out there cooking," he says.

    That's where Douglas's cookbooks and packaged products come in - because he's convinced there is a desire out there for quality products that aren't mass-produced. (The rubs are made and packaged by his own company; the barbecue and teriyaki sauces are co-packed with another local company.) His first cookbook, Tom Douglas' Seattle Kitchen ($30 - Morrow/Harper Collins) was named Best Americana Cookbook of 2001 by the James Beard Foundation; his second, Tom's Big Dinners: Big Time Home Cooking For Family And Friends, recently was published by Morrow/Harper Collins.

    Because Douglas is a lover of food and wines, we asked him what has delighted him lately. One the wine front, he said he is particularly enjoying wines from Washington State's Chinook Winery, especially a 2002 Cabernet Franc Rose; and, he said, he very much likes the 2001 Columbia Crest Grand Estate Syrah.

    As for a favorite dish of late, Douglas said he's been enjoying a "House Cured Pork Jowl Bruschetta" that is served at the Palace Kitchen. "Our offices are in the same building, and it's just incredible."

    Since we happened to be in Seattle, we decided to test out his recommendations…and discovered wine and food that were just astonishingly good - full of flavor and melt-in-your-mouth taste.

    Which is as good as it gets.

    Reprinted with permission from the Food Marketing Institute (2/2004).
    KC's View:
    We should point out that Tom Douglas has opened a fourth Seattle restaurant since this piece originally appeared – a Greek-inspired place called Lola. Haven’t been there yet…but we’re due for a trip to Seattle, and we can’t wait.

    Published on: October 5, 2004

    In case you didn’t see it, Janet Leigh – who took the most famous shower in the history of the movies – died yesterday at age 77. Her movies included the original “Manchurian Candidate” and, of course, “Psycho.”
    KC's View:

    Published on: October 5, 2004

    In Monday Night Football action, the Kansas City Chiefs finally won a game, defeating the Baltimore Ravens 27-24.
    KC's View:

    Published on: October 5, 2004

    Yesterday, we reported that The US National Academies' Institute of Medicine has issued a report urging that government and school officials take a more active role in dealing with the nation’s childhood obesity epidemic.

    Among the recommendations was that schools should measure and record each year every child’s height, weight and body mass index; all foods and beverages sold on school property should meet certain nutritional guidelines, including have less fat and sugar than is now typical; every student should have at least 30 minutes of exercise a day in school-sponsored activities; parents should feed their kids healthier food, demand that they exercise more, and restrict TV and computer time, while communities should provide more recreational services to children; and that the federal Department of Health and Human Services (HHS) should sponsor a national conference that would set guidelines for the marketing of food and beverage products to children.

    This generated a number of responses. MNB user Judith A. Brymer wrote:

    Parents should be the ones to monitor their children's weight and height. Why should it fall on the schools to "watch over" the children's weight? It is not the schools' responsibility, it's a parenting responsibility. However, the schools should have nutritional guidelines on the food that they serve since during the time the children are at school, it is the their responsibility to feed them.

    I thought that schools were requiring students to participate in an activity at least 30 minutes a day? When I was in school, gym was a requirement. I agree that it should be mandatory. However, if children are not taught at home that activity is fun, they will view this activity requirement as a "prison sentence". I speak from experience. Yes, parents and communities need to do more to encourage activity to children. It would help if the HHS would set guidelines as parents need help in this area since they are bombarded with so much information regarding nutrition, even for themselves.

    And another MNB user echoed this comment:

    Why is it the school’s responsibility to ensure students get proper nutrition and exercise?

    We think that schools are responsible for helping kids learn – not just about reading, writing and arithmetic, but also about how to think, how to make intelligent choices, and how to take care of themselves.

    Now, the important word here is “help.” They shouldn’t be doing it in a vacuum. Parents clearly should be taking the lead role in a child’s education…but the schools have to play a role as well.

    By the way, it is our understanding that there are schools in this country where gym is not a required class, and the 30-minutes-a-day suggestion is a lot more than most kids get in a structured environment.

    We had a piece yesterday about marketing to the “echo boomers” and how they respond to the work environment that generated a number of emails…

    One MNB user wrote:

    Last year I attended a presentation by a Human Resources Director at an international corporation. She mentioned some interesting traits about GenYers in addition to coddled and ego-centric: team-spirited, community-focused, global awareness and propensity to organize.

    In her opinion, a good way to appeal to their specific needs and yearnings is to respect that they have been savvy consumers for a long time, fully disclose as much information as possible to them and give them an opportunity for input in decision-making, support community involvement and "green" issues, keep technology innovative, and be willing to design customized career paths and assign mentors.

    However, one MNB user believed that these kids have been done a disservice:

    There are two places in our society causing this problem.

    #1 The family that gives every thing to their children. Doesn't require any kind of work . They participate in sports that don't even keep score because to be part of a team that loses will "cause trauma" to the child.

    #2 There are a lot of schools in this country that have never given a student a failing grade. They don't discipline the student because they would probably be sued by the parents for trauma caused to the child. The schools don't even attempt to teach discipline or ethics. Neither do the parents, so where is the child to learn how important these traits are to success in the real world.

    Based on what educators teach today all of us that completed school before about 1960 should be crazy.
    KC's View: