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    Published on: October 18, 2004

    The Boston Globe yesterday had a Q&A with Larry Johnston, CEO of Albertsons, and Nicola DiFelice, the president of the company’s Shaws division.

    Tidbits of interest include:

    • Both executives say that there is room for expansion even in New England, where real estate often is scarce and expensive. Western Massachusetts and Vermont are mentioned as prime candidates since the company doesn’t have a presence in either place.


    • One of the goals is to expand Shaws' presence in the pharmacy side of the business. Only about half of Shaws stores have pharmacies, whereas more than 95 percent of Albertsons units have pharmacies.


    • Johnston says that Albertsons will continue to look for acquisition candidates, even outside the traditional grocery store. “We certainly keep our eyes open,” he says. “We will be one of the consolidators. I believe that you can't just sit in one space anymore. Companies like ours are going to have to trifurcate markets. Certainly the grocery store will always be the core of the company, but in local markets, we're going to be launching other formats.”

    KC's View:
    One of the nicest things to learn about Johnston in this piece is the fact that he is a regular supermarket shopper.

    “I shop a couple of times a week,” he says. “I'm a single dad. I have a 16 year-old son at home and we like to cook. I love being out in the stores and occasionally I use our home delivery service because it's just easier.”

    Now that is an executive to be reckoned with.

    Published on: October 18, 2004

    Reports in the British media say that Sainsbury plans to trim its headquarters staff by between 700 and 1,000 people – and then use the money saved in that “culling” to hire as many as 3,000 people who will work in its stores to improve the customer service experience.

    The company also is selling off some real estate holdings and closing as many as 15 stores in order to cut costs.
    KC's View:
    You have to admire a company that at the very least is trying to gets its priorities right. It may be too little too late, and it may only be done because of a sense of desperation…but focusing on the shop floor is exactly what more retailers ought to be doing when faced with tough competition. Because it is only in the stores that consumer attitudes can be affected and consumer behavior can be shaped.

    By the way, the smartest approach to this always has been that taken by Superquinn in Ireland….because it has only a Support Office that is there to support the stores, as opposed to a headquarters that would dictate to the stores.

    Published on: October 18, 2004

    The Chicago Sun-Times reports that Kraft Foods plans to put its Altoids mints and Life Savers candy brands up for sale, as part of a broad strategy of getting out of non-core businesses and a specific strategy of getting out of the confectionary business.

    Among the companies like to bid for the brands: Wrigley, Hershey Foods and Cadbury Schweppes.

    The Sun-Times reports that the sale could generate between $1.2 billion and $1.7 billion for Kraft.
    KC's View:

    Published on: October 18, 2004

    Both the Coca-Cola Co. and PepsiCo have announced that beginning in 2005, they will provide nutritional information for their entire containers, in addition to per-serving data.

    The decision was made to live up to a recommendation by the US Food and Drug Administration (FDA) that labels be revised when an entire package can be consumed at one time, no matter how many serving sizes are in the package.
    KC's View:
    Truth in labeling. We approve.

    Published on: October 18, 2004

    The Portland Press Herald reports that Hannaford Bros. has been wrestling with how to deal with a political controversy in its home market.

    Last week, the company announced that it was pulling its ads from a local television station owned by Sinclair Broadcasting because the station planned to air a film critical of democratic presidential candidate John F. Kerry. The company has been criticized in some quarters – and praised in others – for showing the film so close to the November 2 election.

    A day after it made the decision, however, it changed its mind, saying that it had decided that in making the decision to pull the ads, it had in fact made a political statement when that was precisely what it was trying to avoid. “Hannaford is in the supermarket business, not the political business,” the company said in a statement. “We make our media buying decisions based on our customer demographic.”

    At the same time, Tyson Foods and Lowe's Home Improvement have decided to pull their ads off the ABC hit series “Desperate Housewives,” saying that the show’s content was not consistent with the image they want to project, no matter how many people are watching the show.
    KC's View:
    Don’t know what we’d do about the Kerry film sponsorship, but the Tyson folks may be making a mistake with “Desperate Housewives,” which is an absolute hoot. (Not as good as “Jack & Bobby” which is on at the same time…but a hoot nonetheless.)

    Our policy would be to sponsor any show that has both Felicity Huffman and Teri Hatcher. But that’s just us.

    Published on: October 18, 2004

    The University of Michigan consumer confidence index for October was down to 87.5 in preliminary readings, a significant drop from September’s 94.2.

    Also off were the consumer expectations index (down to 79.6 from September’s 88.0) and current condition index (down to 99.6 from September’s 103.7).
    KC's View:
    No surprise here that consumer confidence isn’t what we would like it to be. We still know way too many people who are out of work and feeling a little desperate.

    They could call it a “consumer desperation index,” but it’d be way too depressing.

    Published on: October 18, 2004

    The Japanese government reportedly is considering a relaxation of its rules requiring that all cows scheduled to enter the food chain be tested for mad cow disease. If approved, the revised regulations would exclude all animals 20 months or younger from testing.

    An easing of internal Japanese rules would seem to bode well for some sort of resumption of exports of US beef to Japan, which has been banned since a single case of bovine spongiform encephalopathy (BSE), also known as mad cow disease, was found in the Pacific Northwest of the US.

    Approval of the decision and a change in Japan’s import rules could take several months, according to reports.
    KC's View:
    Wasn’t it just last week that Japan announced that it has discovered its 14th case of mad cow disease?

    Maybe we’re just paranoid, but if we ran a country with 14 cases of BSE, we’d be testing every cow twice, not cutting back.

    Published on: October 18, 2004


    • The United Food and Commercial Workers (UFCW) and three major California supermarket chains – Safeway, Albertsons and Kroger – reportedly have agreed to extend the Northern California labor contract that expired on September 11 until December 8, with negotiating sessions to take place three times a week.


    • Reuters reports that investment firm Apollo Management is bidding against Cerberus Capital Management to buy Ahold divisions Bruno's and Bi-Lo, a sale that could bring the Dutch company as much as $1 billion.

      Kohlberg Kravis Roberts also have been mentioned as likely bidders for one or both of the Ahold divisions, which the mother company has been trying to get rid of to raise case and strengthen its financial situation after a multi-million dollars accounting scandal.


    • Dr. Pepper is introducing two new varieties - Cherry Vanilla Dr Pepper and Diet Cherry Vanilla Dr Pepper – in selected markets, with a national rollout scheduled for next year. The products are said to be the first in a planned “Fountain Classics” line.


    • Starbucks, which currently has about 8,500 stores - including about 6,100 in the US - plans to more than triple the number of its worldwide outlets to 30,000, with half of those in the United States. That’s higher than the previously announced goal of 25,000 worldwide.

      The company says that the emphasis in the US will be smaller towns that it traditionally has entered, with an emphasis on drive-through locations.

    KC's View:

    Published on: October 18, 2004

    by Harvey Hartman, chairman/CEO of The Hartman Group

    Blunder #1: Taking Consumer Comments Literally

    We all know by now that consumers are apt to say one thing and do another. But this tendency takes a more insidious form in American society. It stems from our collective tendency to narrate our ideals or aspirations as our lived behavior, mainly to appear good in the eyes of outsiders and loved ones alike.

    While the untrained might mischaracterize this tendency as lying, it really has much more to do with American cultural ideologies that implore us to cast ourselves in the image of self-improvement. Even though we rarely approach such perfection, let alone continuous improvement, our narratives always focus on a life we believe we should be living ("Oh yeah, I recycle all the time...") - a self worthy of recognition.

    This religion of self-improvement especially affects anyone researching the food industry, where "I try to eat healthily" is one of the most common consumer claims we encounter during in-home interviews. While this claim might indicate a "health-focused consumer" to a novice researcher, those with experience recognize such statements as mere cultural artifacts and dig deeper to ascertain truer health interests.

    Case in point, we have found that a combination of clever questioning and pantry tours often prove most effective at countering culturally biased narratives. While more than a few consumers have regaled us over the years with stories of how they have quit purchasing "bad" or unhealthful, products, it's surprising how quickly their stories dissolve when the pantry door opens to reveal a cornucopia of chips, candy, cookies and pop.


    Blunder #2: Investigating Just Our Brand, Rather Than The Larger Worlds Of Activity

    One of the most common refrains we hear in this business is "Just tell us about our brand!"

    The problem with this seemingly innocent directive is that consumer behavior simply doesn't orient itself around brands. Nor, for that matter does consumer behavior really orient itself around industry categories like "quick service restaurant," "fast casual," or "snack food." Instead, consumers orient themselves to culturally meaningful worlds of activity and behavior, worlds that almost always cut across the boundaries of brands.

    Even though we all call facial tissue "Kleenex," this does not mean that the way we use tissue has anything to do with the Kleenex brand - or, for that matter, its competitors' brands (e.g. Puffs). The use of tissue has to do with the cultural rules and behaviors associated with personal grooming and hygiene. We learn these rules and behaviors from our mothers, fathers and cultural peers, not from Kleenex. Thus, a successful tissue brand needs to learn how to create distinction by adapting itself to personal grooming and hygiene trends. This is very different than merely distinguishing the brand from competing brands in the marketplace. The bottom line is that true innovation is less the result of battling the competition and more about being the most culturally adaptive brand in the broader culture.


    Blunder #3: Driving Methodologies Rather Than Findings

    Often when our telephone rings, the client on the other end will simply say he or she needs a quantitative survey. Why is this a blunder? Seems innocent enough. The reason is because all too often we consider the methodology before we consider the question we want answered.

    When approaching a research endeavor, rather than seeing it as an opportunity to ask as many questions as possible on your particular brand, consider this as an opportunity to fully understanding all the dynamics and nuances of your objective. The hardest part in the intensity of understanding what you want out of that piece of research is recognizing the further you push the breadth the more you dilute the depth of the results.

    Clarity of your objective, first and foremost, will often lead to an integrated research approach, combining multiple, complementary methodologies that in the end drill deeper to answer your initial question with a multi-faceted result.


    Blunder #4: Pre-Determining The Target Audience Of A Survey Tool That Is To Determine Target Audience (...huh?)

    It's such an easy trap to fall into.

    Marketer X wants to sell more of his brand's widgets so he convenes a group of frequent/loyal/heavy buyers to the granddaddy of all market research blunders, the misused focus group, and listens in to determine what it is that makes them tick (i.e. purchase his widgets). Unfortunately, such short-sightedness results in misleading generalizations about the wider population of the brand's widgets, stereotypes that often cause one to underestimate the potential audience for a given brand.

    In most worlds of activity, we find a small subset of devout enthusiasts or "hardcore" participants. And while their enthusiasm is infectious, often flattering marketers and brand managers much in the same way of devout parishioners hanging out at a church, their characteristics and use patterns are rarely generalizable to the rest of us "ordinary" users. In short, why should the enthusiasts' view of products designed for users in the given world be generalized to the entire population? By surrounding yourself with true believers, such uniformity and homogeneity can forever distract you from the ultimate possibilities in the broader marketplace.


    Blunder #5: Inflating The Sample To Increase Objectivity

    We all do it.

    Whether we're talking about quantitative or qualitative research, there is this odd obsession with large samples. As anyone who is acquainted with this business well knows, we are forever paranoid that the people we may be talking with or about are somehow not generalizable. Among other things, that's why we often preface our remarks with "Admittedly this is anecdotal, but..."

    Look, a large sample provides one important benefit. Namely, it allows us to be more precise in our confidence that our findings are generalizable to our population of interest. A large sample does not, however, yield more robust findings, more accurate findings, more informative findings or less biased findings. Biased findings, however precise, are still biased, and simply collecting more data doesn't help if the manner in which they are collected is flawed. In short, effective research strategies need to balance the desire for precision in our generalizations against the need to reach those consumers who routinely avoid us and the need to interact with them (i.e., measurement) in a clear and precise manner. If it means ending up with a smaller overall sample size, that's the price of good research, because bigger is not always better.


    Blunder # 6: Letting Those In Positions Of Authority Ask The Questions

    One of the golden rules of research: "Never let those in positions of power have any control over the nature, direction or type of questions being asked."

    It's not the case that folks like CEOs, brand managers or VPs are at all uninformed or biased as much as it is their very position often precludes them from pursuing numerous lines of questioning that typically yield the most innovative insights. How many brand managers, for example, would be willing to entertain the possibility that consumer involvement with their brand may have nothing to do with brand values, imagery or messaging and a whole lot more to do with accidental purchasing based on shelf locations?

    Unfortunately, this cycle all too often causes those most vested in a company tend to ask questions whose answers will least threaten the status quo or least challenge the company's institutionalized view of the consumer. And often this tendency results in misleading findings.

    Just as we pay a therapist top dollar to ask tough questions from an external vantage point, perhaps we need to accord the same latitude to research teams?


    Blunder #7: Believing Consumers' Emotions Are Easily Measurable

    Many, many companies interested in understanding the emotional component of their brand make the mistake of assuming consumers can express or communicate their emotions with language--be it written or verbal. What they fail to understand is that merely asking consumers questions, either in person, on the phone, or in the form of a written or electronic questionnaire, does not tap into true emotions, which are by nature ephemeral and not describable in the lexicon of rational thought.

    The unfortunate reality is that there is no magic way to get inside the head of another human being and know how they feel. The alternative, which is much more comprehensive is to focus on understanding where and when in our cultural lives certain emotions get reliably triggered and then create brands that resonate with those shared emotional reactions. Rather than attempting, unsuccessfully, to "get inside the head of the consumer," astute researchers will try to "get inside the essence of the experience" - ideally by immersing themselves in the given moment/experience.

    Think of all the crying that happens just as the bride and groom begin marching down the aisle at a church wedding. It isn't about individual feelings of sadness or happiness; it's about an ephemeral, collective expression of joy at the fulfillment of the romantic promise. This is the kind of shared, public emotion that resonates most strongly with contemporary consumer culture.


    Blunder #8: Leaving Consumer Insights For The End

    The most insightful consumer research requires a great deal more patience than many marketers and brand managers are willing or have time to give. Frequently we find many with short time horizons rely on research to confirm the utility of assertions of products already under development, to find which of their concepts is most likely to work or to back up gut instinct. The most insightful research, however, should begin the brand process, not end it and requires becoming very close to consumers - immersing ourselves with them long enough to understand the complex cultural context in which brands continuously struggle, adapt, perish and thrive.

    Believe it or not, we've had clients propose international strategic brand planning research covering 10 countries within a 5-week timeframe! The reality of such timelines typically leads to highly formulaic research, research that clings too tightly to rigid methodologies that fail to open the researcher (or the client) up to the exciting possibility of completely unanticipated insights or results. In fact, such "left field" insights rarely emerge through rigorous methodologies or pre-fab research but, instead, come from understanding the broader cultural context and trends in which any brand adapts itself.

    For more information about The Hartman Group and its marketing research and consulting practices, go to:
    http://www.hartman-group.com
    KC's View:

    Published on: October 18, 2004


    • Interesting piece from the Associated Press about the single store that Wal-Mart has near Quebec at which the government has certified the workers as a union and ordered both sides to negotiate.

      Part of the problem that Wal-Mart faces there is the fact that region is a hotbed of unionization, which has created tensions between employees and their employer. And, as reported on MNB last week, Wal-Mart shows no sign of backing down from its anti-union stance, and is even making noise about closing the store because it isn’t profitable.

      And life continues to get more and more complicated: “There has been angry name-calling by workers riven into pro-union and anti-union factions and accusations of intimidation by managers and threats of a lawsuit by the United Food and Commercial Workers Union,” the AP writes.

      And the broader question seems to be whether the successful unionization of this single store foreshadows more extensive problems that Wal-Mart could experience throughout the chain.

    KC's View:

    Published on: October 18, 2004

    …will return.
    KC's View:

    Published on: October 18, 2004

    In the National League Championship Series, the Houston Astros squeaked by the St. Louis Cardinals 6-5 to even up the best-of-seven series at two games apiece.

    And, in the American League Championship Series, it took 12 innings but the Boston Red Sox staved off elimination by defeating the New York Yankees 6-4. The Yankees still hold a 3-1 lead in the best-of-seven series, but the Red Sox win prevented enormous numbers of Bostonians from throwing themselves off the top of the John Hancock Building…


    In Week Six of National Football League action…

    San Diego 20
    Atlanta 21

    Miami 13
    Buffalo 20

    Washington 13
    Chicago 10

    Cincinnati 17
    Cleveland 34

    Green Bay 38
    Detroit 10

    Kansas City 16
    Jacksonville 22

    Seattle 20
    New England 30

    San Francisco 14
    NY Jets 22

    Carolina 8
    Philadelphia 30

    Houston 20
    Tennessee 10

    Denver 31
    Oakland 3

    Pittsburgh 24
    Dallas 20

    Minnesota 38
    New Orleans 31
    KC's View: