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    Published on: November 10, 2004

    The Denver Post reports this morning that one of the issues in the ongoing labor dispute is the desire on the part of Safeway, Albertsons and Kroger’s King Soopers to convert full-time journeymen meat cutters to part timers, and to allow other store employees, such as deli clerks and meat wrappers, to cut meat as “all purpose meat clerks.”

    The United Food and Commercial Workers (UFCW) union argues that meat cutting is a career skill being devalued by the proposal.

    Unionized store employees began voting on the “last, best offer” made by the chains last week, but voting was halted when national officials from the UFCW stepped in to review the contract.
    KC's View:
    What we think really is being devalued by the chains isn’t just the role of the meat cutter, but the need to differentiate themselves in the marketplace. Once again, it looks like they are going for lowest common denominator marketing, content with slashing costs without seeming concern for how it affects the shopping experience. If Wal-Mart is to be the role model, once these stores become Wal-Mart clones, what will be the compelling reason for a shopper to pick a Safeway or a King Soopers over a Wal-Mart. It’ll just be price, price, price…and we all know who tends to win that battle.

    By the way, we can’t figure out what the angle is in the national UFCW leadership stepping in to stop the voting. If it is because these guys were afraid that the local employees would approve a contract that they didn’t think was a good deal, exactly what kind of leverage will they have with the chains in returning to the bargaining table? And if they were afraid that the local guys would turn down a contract that the national leadership thought needed to be accepted…well, we don’t understand what kind of leverage they have in that case either.

    Let the local people vote and decide. After all, it is their lives and livelihoods, not that of union fat cats, that are stake here.

    Published on: November 10, 2004

    The US Federal Trade Commission (FTC) has sent letters to nine media companies - Cosmopolitan, Woman's Own, Complete Woman, USA Weekend, The Dallas Morning News, San Francisco Chronicle, Cleveland Plain Dealer, Albuquerque Journal and the Spanish-language magazine TeleRevista – warning them to stop publishing advertising for false weight loss schemes.

    The publishers targeted by the FTC all have run ads for products that are the subject of a government crackdown, with lawsuits filed against companies that sell diet aids that promise weight loss without the reduction of food consumed or the increase of vigorous exercise.

    One such product, according to the Washington Post is the "Himalayan Diet Breakthrough," described as “a dietary supplement made of what the manufacturer called Nepalese Mineral Pitch, a paste-like material that ‘oozes out of the cliff face cracks in the summer season.’ The product, which costs $39.95 for a month's supply, promised consumers could lose as much as 37 pounds in eight weeks.”

    It is the first time that the FTC has sent such letters to publishers, and marks a heightened level of enforcement when it comes to the $37 billion weight loss products industry.
    KC's View:
    Y’mean we should stop adding Nepalese Mineral Pitch to our morning coffee?


    Incidentally, this is where supermarkets really ought to be promoting their credibility – offering nutritious products that are real diet aids, not the over-hyped and bogus products that are all over the media.

    Published on: November 10, 2004

    If you sign on to this week, you’ll see something new on the home page – the first of five short films that will debut on the site at the rate of one a week under the name “Amazon Theater.”

    The first one, entitled “Portrait” and directed by Jordan Scott, features Minnie Driver in a tale that is sort of “Big” meets “Twilight Zone” meets “The Ugly Duckling.” The company describes it as being thematically similar to other films in the series in that they all deal with “karmic balance” and how certain individuals learn life lessons.

    While Amazon says that the films aren’t meant to be advertising, there are a plethora of product placements, and the products – ranging from cell phones to cosmetics - used in the film are all listed on the site with hot links so that customers can easily buy them. And, in an interesting twist, the products are even listed in the film’s credits – so that the phone that plays a character’s phone is given as much attention as the actress who plays a specific character. Remarkably, Amazon didn’t solicit or accept any placement fees (known elsewhere as slotting allowances) for the products shown, but simply asked manufacturers if they would mind if their products were featured. (Nobody minded.) Amazon seemed to feel that if it sold more of these products because of the films, then that would be enough of a reward.

    Amazon has not divulged the budgets for each of the films.
    KC's View:
    This clearly is a next step after BMW successfully produced a series of films directed by some acclaimed directors and showed them on its website as a way of generating buzz about its cars. And it works, certainly as an attention getter – “Portrait” is a neat little movie will get people talking.

    And that’s really the point, and what Amazon is up to. “Buzz” is a critical part of the Amazon success, because the willingness to try new things and experiment with new forms of advertising and content is a hallmark of Jeff Bezos’ company.

    It is a lesson that more retailers ought to learn. The effort taken to change things up, to throw consumers a curve, to delight them with the unexpected – that’s what missing from too many supermarkets (not to mention other retail formats). It is critical, if they want to succeed, that food retailers find ways to throw a curve to their consumers…because it’ll be that curve that will set them apart from tough competition.

    Of course, it isn’t a one-time effort. It is an ongoing project, and will be filled with frustration and triumph. But it’s better than sitting away waiting to be taken over or put out of business.

    Published on: November 10, 2004

    The Wall Street Journal reports this morning that a number of large toy manufacturers have decided to supply troubled retailer Toys R Us with 21 exclusive products, and then will pay for television advertising that will hype both the toys and the retailer.

    The move comes as Toys R Us considers a sale of the toy retailing arm of the company under pricing pressure from Wal-Mart.

    Exclusives represent about a quarter of the items in the Toys R Us inventory this year, up from 20 percent year ago.

    The manufacturers include Mattel, Hasbro and Lego. The TV ads were focus on one toy at a time, and will look like a manufacturer ad…except that the tagline will say that the item is only available at Toys R Us.
    KC's View:
    The manufacturers clearly understand that a toy retailing world without Toys R Us and dominated by Wal-Mart isn’t necessarily healthy for them or for consumers. Now, this quick fix doesn’t do anything about the fact that Toys R Us stores can be really off-putting…but it’s a start.

    Published on: November 10, 2004

    • Wal-Mart’s Asda Group in the UK reportedly plans to open about eight new George stand-alone stores next year, and is scouting as many as 50 locations as it decides where to put them.

      There are five standalone George stores at present, all devoted to the own-label clothing line that has been extremely successful for the company. Opening such units has become an important part of the Wal-Mart strategy as it tries to grow in a UK environment in which it is hard to find appropriate locations for supermarkets.

    KC's View:

    Published on: November 10, 2004

    In the December issue of Consumer Reports, Caribou Coffee’s Columbian brew is ranked the top coffee in the nation, followed by Eight O’Clock Coffee, Dunkin’ Donuts coffee, and, in fourth place, Starbucks coffee.

    Starbucks is, of course, the largest coffee chain in the world, while Caribou has just 293 stores in nine states and Washington, DC.
    KC's View:

    Published on: November 10, 2004

    • Food Lion announced today it has signed a definitive agreement to acquire 10 Winn-Dixie stores in North Carolina and Virginia.

      The acquisition will carry out a key Food Lion growth strategy to fill in and reinforce its presence in the company’s current geographic footprint. Food Lion will pay for the stores in cash out of its planned 2004 capital expenditures budget.

      The stores, of which Food Lion will assume leases and acquire certain equipment and inventory, are located in Dunn, Elizabeth City, Elizabethtown and Havelock, N.C., and Clarksville, Danville, Farmville, Martinsville, South Hill and Stanleytown, Va.

      Food Lion will re-brand the stores in Clarksville, Danville, Martinsville, South Hill and Stanleytown, with only a few days’ gap in store operations. The store in Elizabethtown will be remodeled significantly to replace Food Lion’s current location in that town. Food Lion will conduct further analysis of the remaining locations to better determine how the stores fit in the company’s growth plans.

    • D'Agostino Supermarkets has launched what it is calling “D’AG Rewards,” using the S&H greenpoints program at all of the company’s 22 stores.

      Under the program, customers will earn 10 greenpoints for each dollar spent, and can see their current balance printed on their receipt. Shoppers can redeem their greenpoints on promoted items in the store, or by selecting from hundreds of rewards featured in a special print catalog and an online catalog.

    • Charlie Bell, the McDonald's CEO who has been undergoing chemotherapy and has had several surgeries since being diagnosed with colorectal cancer, reportedly has returned to work and has taped a voice mail message to the company’s franchisees.

      "On a personal note, I can't tell you how glad I am to be back in the office,” he said. "As I've said before, anyone going through cancer treatment has good days and bad days ... and it is certainly a good day when I can be here communicating with you."

      McDonald’s has not provided an update about Bell’s health since September 28, leading to rumors about the seriousness of his condition.

    • Published reports say that Penn Traffic has asked the U.S. Bankruptcy Court for a third extension to file a reorganization plan. The new date, if accepted by the court, would be January 24, 2005.

    • Published reports say that there’s a new food store opening in Issaquah, Washington, next week – Organic To Go, which will deliver gourmet meals to customers that are made “whenever possible” with organic ingredients.

      The business - funded by Dave Smith, co-founder of Smith & Hawken – is targeting expansion throughout the Seattle area as well as to Chicago by the mid-2005.

      "Organics is something I care a lot about, and this concept helps organic farmers get their food out, and gives consumers a way of having access to good organic food in a presentation they haven't had up until now," Smith told a local newspaper.

    KC's View:
    Call us crazy, but we think if you are going to call a business “Organic To Go,” you ought to be sure that all the food – not some of the food – actually is organic.

    Published on: November 10, 2004

    • Delhaize reported that its third quarter earnings increased 33.2 percent to the equivalent of $92.4 million (US), on same-store sales that were up 1.7 percent in the U.S. and 0.4 percent in Belgium. Total sales for the period were down 3.2 percent to $5.8 billion (US).

    • CVS reported that total sales for October increased 30.3 percent to $2.63 billion from $2.02 billion a year ago, as same store sales went up 5.4 percent. Year-to-date, same-store sales rose 5.8 percent, and total sales for the latest 43 weeks increased 14.9 percent to $24.30 billion from $21.16 billion in 2003.

    • PriceSmart, Inc. - which owns and operates membership shopping warehouse clubs in Central America, the Caribbean, and Asia - posted October 2004, net sales that were up 10.5 percent to $52.2 million from $47.2 million a year earlier, on same store sales that were up 8.4 percent.

    KC's View:

    Published on: November 10, 2004

    • Supervalu Inc. has named David Pylipow senior vice president, human resources, reporting to chairman/CEO Jeff Noddle.

      Pylipow, who has been serving as senior vice president of human resources for Supervalu’s Save-A-Lot division, succeeds Ron Tortelli, who has served as senior vice president of human resources for Supervalu since 1988 and is scheduled to retire at end of the year after 36 years with the company.

    • Nash Finch Company has named Salvatore Baio to be the company’s new Vice President, Perishable Procurement, Merchandising and Marketing; Robert J. Dernbach to be the new Vice President of Non-Perishable Merchandising; and Terry J. Littrell to be Vice President of the company’s Southeast Region.

    • On the heels of yesterday’s announcement by Marks & Spencer of a decline in profits and sales, company CEO Stuart Rose is shaking up the company’s management rolls - reducing the number of board members from six to three, and announcing that CFO Alison Reed will retire in February, once a successor is chosen.

      Also leaving the company and the board: Maurice Helfgott, head of men's wear, children's wear and home furnishing; Mark McKeon, head of international and franchises; and Laurel Powers-Freeling, head of finance arm, are also leaving the board and the company. Other company departures include the directors of human resources, Jean Tomlin, and of home products, Jack Paterson.

    KC's View:

    Published on: November 10, 2004

    Bloomberg News reports this morning that imprisoned media and style mogul Martha Stewart is asking that the company that bears her name – Martha Stewart Omnimedia – pay her $3.7 million in legal expenses accrued during her obstruction of justice trial. Stewart was convicted of lying to authorities about a stock trade, and is serving four months in prison.
    KC's View:
    And if the company pays the legal expenses, Martha has promised to make personalized license plates for the entire board of directors and all senior managers.

    Published on: November 10, 2004

    We received a number of emails yesterday in response to our essay about good and bad customer service, comparing what we saw at Trader Joe’s to what we saw at an unnamed northeastern US chain.

    MNB user Shane Tracey wrote:

    Customer Service is an underserved profession. These employees are the frontline in the attack on consumers’ wallets. Whether it be the cable company, your bank, or your local supermarket. Customer service is king. Without it, the consumers run away in droves and no amount of coaxing is going to get them back.

    The Wal-Mart's of the world believe that underpaying the floor employees is a way to save money, long term. But what does it cost them, really?

    …We as shoppers need to recognize that these low prices do come at a price that our children will pay in the very near future. With high unemployment figures and low prices, who can afford to buy anything in the long run?

    In response to a reference yesterday to Byerly’s, MNB user Frank S. Klisanich wrote:

    The mention of Byerly’s prompted this e mail. My wife recently was delighted with her Byerly’s experience. We are regular shoppers and being delighted happens frequently.

    After checking out and returning home (15 minute drive versus the 5 minutes to a local unnamed grocer) she realized she had paid for but forgotten some dairy products…the bagger (yes they bag groceries) failed to put the last bag in her bin for the drive thru pick up). She called the store, the products had been put back into the dairy case, but they recalled the situation (did they really remember…or is this a simple case that the customer is always right?).

    The assistant manager told my wife he would deliver the products right away. My wife declined this offer, she did not need them immediately. The next offer was to deliver the products after the manager finished work since he lived close to our home. Not only did he deliver the goods, he apologized and left my wife with a Byerly’s gift card ! WOW ….

    Do you think my wife thinks Byerly’s is a great store?….you betcha! Are they the cheapest?…NO. Do they have caring staff?...YES. Do they effectively merchandise great produce, deli, cheese, meat and high-low specials?....YES.

    From your article … great customer service experiences included:

    *store staff talking …actually engaging with consumers.
    *suggesting a treat to sample…leading to purchase.
    *sampling food in a food store…what a novelty (Byerly’s samples extensively)
    *exceeding customer expectations is the norm not the exception.

    MNB user Glenn J. Rosati wrote:

    Trader Joe's is one of my daughter’s two favorite places to shop, the other being Costco. For whatever reason, she gets all excited once we are in these stores and it is quite contagious.

    Apropos of the story you just related, about two weeks ago my wife asked me, on my way back from a date with my daughter, if we could stop at Trader Joe's and pick up a few things. Once there, the cell phone rang and the list of items grew to the point that I needed a shopping cart. Since my daughter is in a wheelchair and cannot propel herself, we inadvertently became a wagon train with me pushing the wheelchair with one hand and pulling the shopping cart with the other.

    Seeing my struggle, one of the clerks, who had been stocking the shelves, suggested that she would push the cart and shop for me while I pushed my daughter. Needless to say, I was initially surprised at the offer and then, in almost instantaneous retrospect, not surprised at all because it seemed that it would be something quite normal to occur at Trader Joe's.

    Although we shop at the well-known national supermarkets, we make a point of shopping at Trader Joe's and Costco for fun and recreation, even when we don’t have a list of things we need or want (although I don’t think we ever come home empty handed). Customer service at both operations has been nothing less than exemplary, making every trip to spend hard earned money both fun and productive.

    MNB user Ted File observed:

    The hiring process. If someone is truly interested in the different culture of TJ's vs. the major chains, ask a question to those who have worked with both. You'd find that the hiring process and the skill levels discussed in the interviews are totally different. TJ's is unique; and they intend to keep that differential. After all, they are only hiring people that care.

    Another MNB user wrote:

    You're right on when it comes to shopping at Trader Joe's. Recently, my husband and I were shopping at our local TJ's and were in the fresh prepared foods section. There was a couple standing nearby and I watched as they were approached by a clerk who said, "I'm sorry, the chicken you're looking is out of stock. I'm not sure what you're planning to fix for dinner tonight, but we do have these frozen pre-marinated chicken breasts that might work with your meal." The couple took a quick look at the bag of chicken, then added it to their cart. Talk about great salesmanship! It can be tough to find this kind of thoughtful, personal service anymore. But at TJ's it's the norm - and that's why so many people choose to shop there.

    And yet another member of the MNB community wrote:

    Customer service level and customer-associate relationships at any store is a direct reflection of corporate and store management style. Let's not get this confused with a supermarket's mission statement – unless that mission statement is a daily standard operating practice/procedure constantly exhibited by store management and reinforced as well as rewarded by management.

    Too often you stroll through a store and notice "on the way out" the infamous plaque "Our Mission Statement" at the exit-great place for it- it might as well say "thanks-now quit bothering us". In other words if you are going to post it-do it! The statement must be at the entrance, have it personified through your associates - but that won't happen unless the leadership in that store and within the company is capable of obligating themselves to the same standards that they "posted" and practice as often as necessary.....notice the wording "practice" because we never get it right and we never get it to 100% so we must practice.

    On the subject of the DVD rental price wars among Wal-Mart, Blockbuster and Netflix, MNB user Jeff T. Davis wrote:

    Just a quick thought in regards to the Netflix debate. Wal-Mart and Blockbuster don't offer nearly the selection or variety that Netflix offers. Have you ever tried to find a movie at a Blockbuster that wasn't put in place based on some agreement with a movie distribution company, or an independent film (Blockbuster has slotting fees too...)? It's pretty difficult. Another thought - does Wal-Mart offer a selection of movies such as Pulp Fiction (one of the greatest films of all time) that may be potentially "offensive" to their conservative customer base?

    Netflix will survive in this because they offer the best selection at a competitive price while providing a much better selection of films and knowing who their customer is - the film connoisseur, who will pay the extra 60 cents to Netflix for the same reason that "foodies" go to Jungle Jim's. I refuse to go into Blockbuster, or Wal-Mart, but I do patronize Netflix and my local video store - Scarecrow video - and I won't ever change my habits. Blockbuster especially has ignored my needs as a consumermovie watcher and has lost my business for life.

    (A note about Scarecrow - you always talk about retailers knowing their customer and making shopping an experience-Scarecrow is a great example of this. They have pretty much every movie known to man - literally. Quentin Tarantino was quoted saying that Scarecrow was the most amazing video store that he had ever seen, and there have been many other film directors, buffs, etc... that have found Scarecrow's selection quite the draw. If you're ever in Seattle again you should check out the store-it's an experience.

    Regarding Wal-Mart promoting singles nights in Germany, one MNB user wrote:

    If the singles in Wal-Mart are anything like Wal-Mart's image, I won't be going there. Cheap, demanding and "predatory" are not qualities that I look for in a mate...

    Reminds us of a girl we dated in college…

    We wrote glowingly yesterday about the new TV commercial for the Ford Mustang that combines elements of “Field of Dreams” and “Bullitt,” and features a cameo appearance by a digitally recreated Steve McQueen.

    MNB user Stuart Silverman wrote:

    The Mustang ad caught my attention because I've been following the hype surrounding the reintroduction of a once great American brand. The image of Steve McQueen appearing midway through the ad was a bit of a shock, but was kind of cool because of his connection driving hot Mustangs. However I have to admit that the full realization that the ad was really "Bullitt" meets "Field of Dreams" didn't hit me until the next day. And I'm trying to figure out if this is a good thing or not. If the reference is that obscure to an ageing boomer who likes cars and movies, how is it going to play to other demographics? Or is the ad a brilliant success because I was still trying to figure it out the next day?

    Once again, we feel that it is a parent’s job to make sure that the nation’s younger generation knows who Steve McQueen is. (And Cary Grant. And Spencer Tracy. And the list goes on…)

    And about “Bullitt,” one MNB user chimed in:

    Great flick. The real star of the film was the stable of Shelbys made for the film. Which, as we all know, were anything, but stock Mustangs.

    Not sure about that. Beyond Steve McQueen, are you forgetting about Jacqueline Bisset?

    And MNB user Steve Behmke wrote:


    1) McQueen is way cooler than Puffy or Snoopy or Sneezy or any of these other young posers, and even Gen X, Y, and Z recognize it.
    2) Bullitt and Popeye Doyle are STILL the two best chase scene drivers ever!
    3) Ford has done a great job in positioning the Mustang for the past several years, and this ad will hit home with every demo. My teenagers all want Mustangs when they get old enough to own a car (too soon if you ask me!). No talk of Beemers, Jags, Vettes, or anything else. Well; maybe Hummers...
    4) The agency did slick work with both the creative and the technical sides of this ad. Not choppy or blurry like the John Wayne beer spots from a few years back (that did not work for me).

    P.S. I enjoy the occasional detour (like this) from grocery-think. It's all I do most days...

    We’ve never believed in grocery-think…there’s a reason that we like to call MNB “big ideas for thought leaders.”

    Besides, sometimes you get the best ideas and see the best scenery when you take a detour…
    KC's View: