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    Published on: July 25, 2005

    Interesting piece in the Minneapolis Star Tribune about how the three-decade-old Wedge Co-op in the southern part of the city went looking for a new general manager – and hired Lindy Bannister, who was an unusual choice because, among other things, she had been a store manager for both Albertsons and HEB.

    "Being from conventional [supermarkets], they took a chance for me to come here,” Bannister tells the paper. “My hat is off to them for being progressive enough to say, 'Hey, we can handle somebody from conventional.'”

    The Star Tribune writes, “The Wedge may be a co-op that prides itself on an anticorporate, egalitarian approach to food retailing, but Wedge officials say Bannister's grocery experience is exactly what the co-op needs as it ponders how best to grow the business in the face of limited retail space and increasing competition” from retailers like Whole Foods, Lund’s and Cub Foods.
    KC's View:
    Thinking outside the box can mean a lot of different things, depending on what box you happen to be sitting in. Kudos for the folks at Wedge realizing that conventional experience can be a positive thing if the person with that experience is an unconventional person with vision. Which is what Bannister seems to be.

    Even more impressive about this move – and something worth learning from – is that the Wedge Co-op makes this move not because it is suffering, but because it is at the top of its game and wants to stay there. The Star Tribune notes that the 11,000 square foot store generates more than $40 in sales per square foot per week – which is exceptional.

    The best time to get better is when you’re really good. Not when you’re threatened and in decline, which is when too many people decide they need to hire a consultant, convene a committee and think about what to do next.

    Published on: July 25, 2005

    The New York Times this morning reports that Kmart is ramping up its back-to-school marketing efforts with commercials that are running early and often, trying to convince young people that it is a legitimate option for the fashions they need to own before returning to school.

    Its success at doing so could have major implications for Kmart, which only recently completed its merger with Sears. The back-to-school season is second only to the Christmas holidays in terms of sales, which means that a strong August could suggest that the company has some long-term credibility; a bad back-to-school term, however, could confirm many analysts’ suspicions that Kmart is a dead retailer barely walking.
    KC's View:
    Kmart, it seems to us, has to succeed on a number of levels.

    It has to communicate the right message in a way that is hip enough for kids without alienating parents.

    It has to have the right merchandise, fashionable and priced appropriately.

    And it has to have its supply chain issues straightened out so all the right merchandise is in the right place at the right time.

    Which, for a company like Kmart, could be much like that guy on the old “Ed Sullivan Show” who used to spin a bunch of plates at the same time trying to keep them from falling.

    (Memo to MNB readers who don’t know who Ed Sullivan is and who don’t understand the “spinning plates” metaphor: Keep it to yourself.)

    Published on: July 25, 2005

    Most supermarket chains with frequent shopper/card-based marketing programs collect emails from their consumers, according to a new study released by Retail Systems Consulting (RSC), here. More than half these chains have online signup available for their frequent shopper cards – which RSC says is “an important automatic way to collect email addresses. More than three-quarters of them request consumer’s email addresses on physical application forms.”

    The information is included in RSC’s Card-Based Marketing (CBM) Report of US chains.

    Of the 66 chain retailers tracked in the CBM report, 81 percent have “email address” as an optional field on their physical application forms, and 53 percent allow consumers to sign up for frequent shopper programs online. Sixty-eight percent of those that do not have online signup have the alternative of allowing consumers to print applications at home or in the office and bring them into the store.

    “We think it’s positive that over half the retailers have online signup available,” said Carlene Thissen, president of RSC. “The beauty of online signup is that retailers get email addresses of consumers who are actively engaged in online activities, highly likely to provide an email address, and probably desire email communications. It is still important, of course, to provide an ‘opt-out’ or even better, ‘opt-in’ to future retailer-initiated e-mailings, and the retailers are being careful about providing those opt-outs or opt-ins.”

    Other information derived from the report includes:

    • Eighty-two percent of retailers with card-based marketing have online ads or flyers.

    • 26 percent offer coupons through SmartSource or CoolSavings.

    • 45 percent offer ValuPage.

    • 52 percent of the sites include recipes.

    KC's View:
    An update of these numbers and addition research will be a highlight of RSC’s annual Global Electronic Marketing Conference (GEMCON), scheduled to be held this year in Las Vegas from October 24-26.

    By the way, we’ve been asked once again this year to participate in GEMCON…moderating panel discussions and audience participation, as well as presenting MorningNewsBeat Live! each morning. (It ain't Jon Stewart doing The Daily Show, but we do our best…)

    We’re thrilled to have the opportunity, and we hope to see you there.

    For more info about GEMCON 2005, go to:

    http://www.gemcon2005.com

    Published on: July 25, 2005

    Four major unions – the United Food and Commercial Workers (UFCW), the Service Employees International Union (SEIU), the Teamsters, and UNITE HERE, a group of textile and hotel worker – announced over the weekend that they would boycott the annual AFL-CIO convention this week, a move seen as preliminary to their “disaffiliating” from the federation.

    If the move happens, as reported here on MNB last Friday, it could take five million members of the AFL-CIO’s membership rolls, or about 38 percent of the total.

    The infighting seems to center on perceptions that AFL-CIO president John Sweeney has spent too much union money on political campaigns, and not enough on recruiting new members. Unionized employees in the US represented 12.5 percent of the workforce in 2004, down from 19 percent a decade earlier. And the dissidents would like to see more money put toward national recruiting campaigns aimed at companies such as Wal-Mart.

    "Our differences are so fundamental and so principled that at this point I don't think there is a chance there will be a change of course," UFCW President Joe Hansen told the Associated Press.

    The move by the four unions is hardly being accepted with equanimity within the ranks of the AFL-CIO, where the concern is that the disaffiliation will weaken the union’s bargaining strength and positions. However, others argue that competition within the ranks of the labor movement can only make it stronger.
    KC's View:

    Published on: July 25, 2005

    The controversy that started when a new CEO at the Cleveland Clinic, one of the nation’s best-known heart hospitals, tried to get rid of the McDonald’s in the lobby has ended.

    And McDonald’s is staying.

    The CEO wanted to get rid of McDonald’s because he felt its presence and menu were inconsistent with the hospital’s mission and message. A compromise was reached, however, and while the fast feeder gets to stay, it’ll now be selling some items not available in many other McDonald’s (veggie burgers and carrot sticks) and won’t be allowed to sell a triple-double burger with three hamburger patties and two slices of cheese.
    KC's View:
    We actually sided with the CEO on this one. Having a McDonald’s in a heart hospital isn’t just inconsistent – it’s patently absurd.

    Published on: July 25, 2005

    The Asbury Park Press reports that New jersey’s Foodarama Supermarkets has been fined $322,410 by the federal Department of Labor for having violated child labor laws in 11 stores.

    “The charges include allowing 129 underage employees work on paper balers and other dangerous equipment and allowing 82 teenagers to work beyond the hours allowed under the federal Fair Labor Standards Act,” according to the Press.

    While it agreed to pay the fine, the company said it had not knowingly violated the law.
    KC's View:

    Published on: July 25, 2005


    • The Associated Press reports that a Wal-Mart store in Roanoke, Virginia, that was emulating a successful “singles night” promotion that the company has been using in Germany has now cancelled the promotion under orders from Bentonville headquarters.

      No reason for the cancellation has been given.

      The Roanoke store reportedly was the only US Wal-Mart to have a Singles Shopping night, in which customers in search of companionship could pick up a red bow at the front door and put it on their shopping carts as a way of signaling availability. “Flirt points” reportedly were set up in specific sections of the store.


    • Wal-Mart reportedly hopes to post double digit sales growth in China this year and double the number of outlets it has there by the end of 2006.


    • The Toledo Blade reports that Wal-Mart has decided to open its first supercenter in that market, switching from a planned discount store that it was going to build to the larger, more dominant concept.

      The move to a 203,000 square foot format with a full line of groceries, the paper says, will create “a new challenge for dominant Kroger Co. and other competitors” such as Meijer.

    KC's View:

    Published on: July 25, 2005


    • The Jacksonville Times-Union reports that when Rowe’s Supermarkets takes over six locations being shuttered by Albertsons, the new owner will “carry higher quality, ‘European-style’ brands at affordable prices in unpretentious stores -- selling high-brow product in a low-brow setting.” Owner Rob Rowe tells the paper that he will do his best to offer items not for sale in other stores…looking for categories in which his stores can distinguish themselves from the competition.


    • In New Hampshire, the Concord Monitor reports that Cricenti’s, a three-store independent retailer, is divesting itself of its stores after almost six decades in the business. One of the stores is being leaded out to Hannaford Bros., while a second store will be leased to a Hannaford franchisee. The third store will be leased to as as-yet undetermined operator.

      Terms of the deal were not disclosed.


    • Wendy’s announced last week that it is adding a new menu item - a lowfat, strawberry-flavored yogurt cup riddled with granola – to its US stores.

      The move follows what the company says is the success it has seen with its fresh fruit bowl, introduced earlier this year, and the increasing demand for healthier foods by consumers.


    • Nation’s Restaurant News reports that The Cheesecake Factory, satisfied with the results of a curbside to-go service it has been offering at 13 of its locations, with expand it to another 23 sites.

      NRN says that take-out sales at some of the stores with the new service have increase between five and eight percent.


    • PepsiCo reportedly has said that it is not planning to make a bid for French food group Danone, quashing speculation to that effect.

    KC's View:

    Published on: July 25, 2005


    • Popular music seems to be causing the retailing business problems lately.

      Last week, MNB reported on the fact that Wal-Mart stores carrying the new Willie Nelson album, “Countryman,” have CDs with different cover art than everyone else; the CD cover originally had a marijuana plant on the cover (the album has a reggae theme), but at Wal-Mart, it has been replaced by a palm tree.

      Now, there are published reports out of the UK saying that a CD that is a compilation of various hit songs from the 80s has been creating problems for retailers because the cover art is a big barcode – and it has been scanning the price as about a third less than the actual CD price. In addition, the bar code identifies the CD as being from singer Jack Johnson, not one with songs by Duran Duran and Tears For Fears.

      The album cover art has now been replaced by one not using an erroneous bar code as cover art.

    KC's View:

    Published on: July 25, 2005


    • Marsh Supermarkets has appointed John C. Elbin, most recently VP/CFO at Indianapolis-based Lilly Industries, as the company’s new CFO.

    KC's View:

    Published on: July 25, 2005


    • The Great Atlantic & Pacific Tea Co. (A&P) has reported a first quarter loss of $89.2 million, compared to a loss of $42.8 million during the same period a year ago. The first quarter loss was double that expected by analysts, according to one press report.

      Revenue for the quarter increased to $3.38 billion from $3.28 billion a year ago, and same-store sales for the period were off 0.3 percent.

    KC's View:

    Published on: July 25, 2005

    We had a story last Friday about how the Oregon House of Representatives has overwhelmingly passed legislation that would make many cold medicines prescription-only – a response to the use of pseudoephedrine, an ingredient in medicines such as Sudafed and Sinutab, to make methamphetamine, an illegal and addictive drug.

    The bill now goes to the state Senate, where it is expected to pass, and then to Gov. Ted Kulongoski, who is expected to sign it.

    While Oregon already restricts the sale of pseudoephedrine-based cold medicines to pharmacies and requires that they be sold from behind the counter only to customers who show ID, this step would further restrict access to these products.

    To which one MNB user responded:

    This situation is completely out of control!!!!

    This decision flies in the face of everyone's efforts to decrease health care costs. How many times have you heard doctors complain that patients come in just for the common cold. So instead of being able to self-treat a minor cold, now you have to see your doctor. There are lots of people out there who just take Sudafed and go to work...So the geniuses in Oregon have decided to force people to miss work, see a doctor and be sick even longer as well as burden the health care system.

    This is a classic example of the tail wagging the dog. Government logic at its best...99% of people use the drug appropriately so let's inconvenience and punish them for the under whelming minority's behavior. It's absurd, especially since this would include all the just released to OTC loratadine-pseudophedrine combinations.

    Perfect...well done, Oregon!


    MNB user Mark Hunter wrote:

    Isn't there an old saying "patient heal thyself?" Oregon is doing all they can to make the cost of health care even more expensive by requiring a doctor to be involved. I'd sure like to own a drug store just across the border from Portland....clearly business will be picking up.

    MNB user Jeff Waldron wrote:

    The knee-jerk reaction of government bodies to people in society who have found a way to misuse a particular product is amazing. While nobody would argue with the fact that these cold medicines are being misused, and nobody would argue that stopping the misuse would be beneficial, we all should be very careful about supporting government actions like the ones taking place around the country today.

    The old slippery slope discussion must enter into the overall discussion here. Since people are known to “huff” gasoline, should we require a restriction on the sale? Perhaps require us to report mileage traveled to determine if we really need that gasoline? We all could name item after item that are being misused by some, and thus would need greater control from “Big Brother.” Where will it stop?

    Giving more and more control to government, while requiring less and less personal responsibility, is a recipe for the loss of free society as we have come to know it. It will ultimately kill the entrepreneurial spirit that has helped to make this country and economy the most prosperous on earth.

    When I read George Orwell’s book “1984,” I thought what a stretch the author was making from what was actually happening in our country to what he was writing about. Some of the government control issues seemed completely ridiculous to me (when I read the book in 1980). Now, I’m beginning to wonder…


    MNB user Jarrett Buckholz observed:

    This story raises several questions for me...What selection will Oregon residents then have as to brand of cold medicine they choose? Is this going to eliminate competition in that market? What about generic brand cold medicines as the cheaper alternative, will they disappear? Please keep us updated on this story, because this move could become widespread if they see any bit of success with it.

    We promise.

    It seems to us that this is an area in which most retailers have done a responsible job of self-regulation – almost everyone in the business seems to have decided to put these medicines behind the counter for purchase purposes, meaning that they limit how much you can buy, you have the ask a pharmacist to get the product, but you don’t need to have a prescription from a doctor.

    Seems responsible to us.

    Until there is clear evidence that all these steps are not working, the government just ought to keep its eyes open and its mouth shut.

    And finally, one MNB user wrote:

    Ya gotta love the folks in Oregon. A few years ago possession of less than an ounce marijuana was decriminalized to a misdemeanor. If this bill passes it will now be more difficult to get cold medicine for your family than a joint.

    The question is, can you get a Willie Nelson album with a picture of a marijuana plant on it easier than you can get cold medicine?
    KC's View:

    Published on: July 25, 2005

    Lance Armstrong won the Tour de France for the seventh time, a record that one imagines will be difficult to break.
    KC's View:
    Whether or not that record stands, what certainly will stand the test of time will be Armstrong’s greater achievement – yellow bracelets that millions of us wear in the hope that the money raised in their sale will help find as cure for cancer, and in recognition that personal courage is something that, even in these cynical and jaded times, has not gone out of style.