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    Published on: April 27, 2005

    The Toledo Blade reports this morning that the Great Atlantic & Pacific Tea Co. (A&P) has decided to shut down three Toledo Food Basics no-frills supermarkets that have been open for just a year.

    According to the paper, three Toledo Farmer Jack stores that also are owned by A&P were not included in the announcement, but there isn’t a great deal of optimism that these stores will remain operating in their current form.

    The Blade writes that “A&P entered the Toledo market in 2001, buying three sites from the family-owned Churchill's Super Markets and building three stores. All were Farmer Jacks. But early last year, the company converted three to Food Basics, which is a discounted-price and limited-service store, including requiring customers to bag their own groceries.”

    Alas, the strategy didn’t work…and the stores became the latest casualties of A&P’s effort to cut costs.
    KC's View:
    Someone once said that when a company has more memories than dreams, the likelihood of its survival is minimal.

    The question is whether A&P has crossed over into memory territory. Because the dreams, of late, seem more like nightmares.

    Published on: April 27, 2005

    Interesting piece in BusinessWeek about how yogurt manufacturer Stonyfield Farm is using the Internet – specifically five web logs or “blogs” hosted on the company’s site – to create real communication and a sense of intimacy between it and its customers.

    Company CEO Gary Hirshberg originally got involved with blogging when he saw how it created momentum and enthusiasm – if only temporary – for former Democratic presidential candidate Howard Dean. “The more I got into it,” he tells BusinessWeek, “the more I realized what they were doing in politics was exactly what I'd been doing in business, by having notes on cups and lids, etc. From 1983, when we were still milking cows, we would write ‘Let us hear from you’ on the back of the yogurt container.” The Internet allowed the company to institutionalize and facilitate a two-way conversation between it and its customers.

    Stonyfield’s first step was to hire a former journalist, Christine Halvorson, to author five different blogs on different subjects. Halvorsen was more than just a writer, though; Hirshberg says that he “wanted somebody who was interested in humor and nuance,” who would understand the cultural importance of a blog.

    Hirschberg says that for a blog to work, you can’t be selling, selling, selling, and marketing, marketing, marketing. “You have to be willing to let go and allow a really honest expression of genuine things that are going on,” he tells the magazine, noting that “the minute you start selling with a point of view instead of having a chat, you're going to lose people.” And while he says that you can’t draw a straight line between the expense and effort of doing the blogs and any sort of sales increases, “I know in my gut from 22 years of doing this is that we have an emotional connection with customers. That helps explain why we're growing at four times category rate in some markets and three times the category rate nationally.”

    While it might be tough for some companies to swallow, Halvorsen says that she doesn’t make any real effort to stay away from controversial topics, mostly because that would brand the blogs as dishonest and insincere. And she says that they offer her a chance to weigh in and elicit opinion on issues that have a real connection to the company’s mission – such as the banning of junk food from schools, the nation’s obesity crisis, and women’s health issues.
    KC's View:
    It won’t surprise anyone who reads MNB that we think that this is a particularly enlightened approach to creating long-term connectivity between company and customer. In fact, it wasn’t too long ago that one MNB user suggested that we “recast MNB,” noting that in a lot of ways that’s what this forum is, and that we were doing it before it became fashionable. (Certainly before Howard Dean…)

    We actually decided not to position MNB specifically that way, if only because we think that this site is somewhat different than traditional blogs in that we spend a lot of time reading and editing the hundreds of emails we get each week before posting just some of them on the site. That’s part of our role – to control the conversation in such a way that it make4s the best use of the MNB community’s time while still allowing for the free expression of opinion. It’s a balancing act, but we hope we get it right more than we get it wrong.

    A couple of notes about Stonyfield. First, to those of you who will say that only a small company can do such a thing, it is worth pointing out that Stonyfield is 85 percent owned by Group Danone. The company blogs not because it is small, but because it is independent-minded; there’s an enormous distinction between the two (and more retailers ought to be able to tell the difference between one and the other).

    Second, this is a technology and approach that more retailers ought to take advantage of. After all, they are on the front lines when it comes to dealing with consumers…and it would benefit them greatly to encourage this kind of intimate, committed communication. It doesn’t cost much…and the long-term payoff of being able to differentiate oneself from the competition through such a forum could be enormous.

    In fact, here’s an idea – not completely thought out, but what the hell. If you want help creating a blog for your company that will accomplish for you what Stonyfield is doing for its business, just let us know at info@morningnewsbeat.com .

    We’re here to help.

    Published on: April 27, 2005

    Florida’s WFTV-TV News reports that five Publix Super Market store managers have been accused by authorities there of stealing and selling drugs from one or more of the chain’s pharmacies.

    The station reports that “Seminole County deputies say managers were stealing massive amounts of the highly addictive painkillers hydrocodone and oxycodone, with plans of selling them for their own profits.” The authorities reportedly have served four warrants and seized five vehicles in the case.

    The drug thefts reportedly were part of a much larger drug ring, with investigators having worked on the case for more than four months.

    Publix has only confirmed that one of its store managers, Thomas Grzeszczak, had been arrested. It would not say whether he or the other implicated managers remain employed by the company.
    KC's View:
    This probably isn’t what Publix had in mind when it crafted the slogan, “It’s our pleasure.”

    Though maybe “it’s your pleasure” would have been more appropriate.

    Published on: April 27, 2005

    Albertsons Inc. announced that it is installing a new media system in key shopping areas in its stores to enhance the shopping experience for customers. The new system, which features 15-inch flat-panel LCD screens at each checkout lane and 42-inch plasma screens in select areas within the store, will roll out this spring in Albertsons stores in San Francisco, Jewel-Osco stores in Chicago, and Shaw's and Star Market stores in Boston. Other markets will follow throughout 2005.

    "We are always looking for new vehicles through which we can build stronger relationships with our customers," Paul Gannon, Albertsons Chief Marketing Officer, said in a prepared statement. "This new storewide media system will help make our customers' lives easier by providing them with relevant information and solutions throughout their visits to our stores."

    Two different companies are providing the technology that will be utilized by Albertsons – Premier Retail Networks (PRN), which will handle the checkout lane installations and content provision, and SignStorey, which will install and manage the in-aisle network.
    KC's View:
    Well, we’ll be the ones to decide whether these combined systems indeed “enhance the shopping experience,” or whether they just contribute more noise.

    We will make no assumptions, and will wait to see exactly what the content is, and how the two systems work together.

    Our biggest concern would be that Albertsons is engaging in “me, too” behavior by engaging PRN to do its checkout system…especially since PRN works on so many other systems, including Wal-Mart’s. Now, we know this sounds counter-intuitive since sometimes it makes sense to hire the folks with the most experience…but if it were us, we’d want to work with a company that would bring a fresh and unusual take on in-store media.

    Now, to be fair, PRN argues that it is able to bring a fresh perspective to each of its clients. But we still think that using the same company as everyone else creates a homogenous rather than differentiated approach.

    By the way, Phil Lempert’s ExtremeRetail23 newsletter has a nice overview of what is going on in the in-store TV business. You can read it at:

    http://xr23.com

    Published on: April 27, 2005

    The Conference Board said yesterday that its April Consumer Confidence Index dropped to 97.7 points compared to March’s 103.0, the lowest point reached by the Index since November 2004.

    The Conference Board said its Expectations Index dipped for the fourth consecutive month, to 87.2 from 93.7. The number of consumers expecting business conditions to improve fell to 17.8 percent from 19.3 percent.

    Analysts say that the declines reflect consumer concerns about gasoline prices, a mediocre job market and concerns about the future of Social Security.
    KC's View:

    Published on: April 27, 2005

    Wal-Mart announced that its website now offers a new music service, allowing shoppers to create a customized CD – choosing “individual songs from a deep music catalog that Walmart.com then places on a personalized, physical CD sent to their address -- all at a great Wal-Mart value of only $4.62 for the first three songs and only 88 cents per additional song,” according to a press release issued by the company.

    The company described this service as “a unique, innovative offering unmatched by any other online music provider, the new online custom CD service presents another convenient music solution for customers to select and arrange their music choices and personalize a CD for themselves, their family or friends. Also, custom CDs offer even more ease and flexibility for customers as they don't require the use of a CD burner.”
    KC's View:
    Sounds nice. But it also sounds very old-economy, targeted at an aging shopper demographic.

    Kids don’t use CDs. They download music off the Internet, and have no need or desire for the physical disk.

    Published on: April 27, 2005


    • Albertsons CEO Larry Johnston told an analysts group yesterday that the company has been investing in on-line shopping "not for the one percent to two percent of consumers who want groceries delivered to their homes, but to understand how to deal with customers over the Internet.”

      Johnston said that the Internet provides a good way to communicate with young people about what is available in the supermarket, and that young people like to do online research before they go shopping.

    KC's View:

    Published on: April 27, 2005


    • C-store operator 7-Eleven reported that its first quarter earnings reached $20.9 million, up from $4.1 million during the same period a year ago – an increase it attributed to strong sales of fresh foods. Total revenues climbed to $2.97 billion from $2.73 billion a year ago, while same-store sales were up 4.6 percent.


    • Amazon.com reported that its first quarter net income dropped 30 percent to $78 million, even as revenue rose 24 percent to $1.9 billion, giving rise to criticism from analysts that it was spending too much while making too little.

    KC's View:
    Don’t mean to blindly follow Jeff Bezos, but we have tremendous faith in his long-term strategies and understanding of what Internet commerce will mean to the next generation of consumers.

    Published on: April 27, 2005


    • Family-owned, New York-based D'Agostino Supermarkets has promoted Nicholas D'Agostino III, its VP-corporate administration, to president/COO of the company.

      Nicholas D'Agostino Jr. remains as the company’s chairman/CEO.

    KC's View:

    Published on: April 27, 2005

    …will return.
    KC's View: