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: July 13, 2006

    MNB “Content Guy” Kevin Coupe has a message for banks that spend all their time whining about all the reasons that Wal-Mart and other, similar companies, should be kept out of the banking business:

    Get competitive. Now. Or die.

    And, he explains how and why.

    To listen, either click on the “MNB Radio” icon on the left hand side of the home page, or just go to:

    http://www.morningnewsbeat.com/Radio/Radio_Listen_S.las

    KC's View:

    Published on: July 13, 2006

    Albertsons LLC, the entity created when an investment group headed by Cerberus Capital Management acquired 650 Albertsons stores (with the rest going to Supervalu and CVS), has decided to get out of the online grocery business that it had been operating in such markets as San Francisco, Sacramento, Dallas-Fort Worth, and Phoenix.

    July 21 is the date reportedly set for closing down the service, though as of last night there was no text on the Albertsons.com site indicating that the business is being shut down.

    The San Jose Mercury News reports that the closure is attributed to the fact that it was not profitable, though the company is not commenting on specifics.

    Cerberus also is shutting down brick-and-mortar stores that it says are not making money.

    The Mercury News writes that Safeway has no plans to discontinue its online shopping service, which has competed with Albertsons in a number of markets.

    “We're very pleased with safeway.com, and the response from customers has been great,” said Safeway spokeswoman Jennifer Webber. “Safeway.com is something we are committed to and a service we are happy to be able to provide for our customers.”
    KC's View:
    We’re sure that Safeway – and even Amazon.com’s new e-grocery service – will be happy to pick up the online customers that Albertsons is abandoning.

    We think this is a dumb move by Albertsons’ new ownership. Really dumb.

    First of all, it may be that the Albertsons.com effort was just badly run, and not a bad idea. Safeway, which has been working with Tesco on its online business, clearly has a different sense of it…and this is almost certainly because the business is being run better than Albertsons’. Maybe management – or the assets and commitment put against the effort by the old ownership - is what Cerberus ought to be looking at.

    Second, online groceries was a way for Albertsons to differentiate itself from the likes of Wal-Mart. One less point of differentiation is one less reason for people to choose Albertsons instead of Wal-Mart.

    Finally, anyone who is running an online business in 2006 has to look at the core shoppers of 2010 and beyond when running their operation – because these customers, who don’t remember a world without Amazon and who have little if any allegiance to the traditional supermarket experience, will be more than willing and able to order groceries online. And when these customers of the future do so, Albertsons won’t be there as an option.

    Dumb. Really, really dumb.

    Somebody send these guys a case of Chris Anderson’s book, “The Long Tail.”

    Published on: July 13, 2006

    MSNBC reports that Ben Cohen and Jerry Greenfield, who created Ben & Jerry’s Ice Cream as a reflection of their own social activism and sixties temperament before selling the company to Unilever, are involved with the company’s current lobbying efforts in Washington, DC.

    Cohen and Greenfield are, according to MSNBC, “leading the company’s ‘American Pie’ campaign, designed to persuade consumers to demand a change in spending priorities. Their goal is to shift $13 billion that now pays to maintain thousands of nuclear bombs into pediatric health insurance, schools or other programs for kids.”

    This marks the first time since Unilever bought the company that it has engaged in the kind of social activism that made Ben & Jerry’s famous, a move that is attributed to its new CEO, Walt Freese, who seems to be committed to putting the brand back on the edge of what corporations usually find acceptable. “The company has created a new ice cream flavor — American Pie, made from apples and pie crust pieces. Lids from pints of ice cream will carry information about ways to get involved in the campaign. A new section of Ben & Jerry’s Web site is dedicated to the initiative. And Cohen and Greenfield have set out on a multi-city tour to carry the message.”

    MSNBC writes: “I think that business is the most powerful force in the country,” Cohen said. “When business starts using its voice for the benefit of the country as a whole, not just in its narrow self interest, it can really be the force that can make the changes that need to be made.”
    KC's View:
    Reminds us of the line from the old song…

    We shall not, we shall not be moved
    We shall not, we shall not be moved
    We're fighting for our children,
    We shall not be moved…


    Next thing you know, Ben & Jerry will be talking about fairy tales like global warming…

    Just kidding.

    Actually, we think it is entirely appropriate for an ice cream company to be in favor of greater funding for children’s programs, and not nearly as edgy as some might think.

    We’re sure that Unilever will get some grief over this, but we hope it stands up to whatever pressure is applied.

    We happen to be a child of the sixties, and remember when social activism had a good name. That isn’t always the case anymore. (Where’s Moses Wine when we need him?)

    Then again, we’ve found that the world can be fairly divided into two groups – people who think that the sixties were a positive force in American life, and those who think the sixties were the worst thing ever to happen to American society.

    Published on: July 13, 2006

    Target is the second-most-shopped retailer in the United States, behind only Wal-Mart, but while its “cheap chic trend-right fashion apparel and homegoods offer” has found tremendous resonance with consumer, it hasn’t been able to apply that magic to its food offering.

    At least, that’s the conclusion of a new Retail Forward ShopperScape study that looks at the Target consumer.

    "Target attracts a desirable shopper niche-young affluent families typically cushioned from economic fluctuations such as high gas prices and inflation-which is helping to buoy the company's performance," says Sandy Skrovan, a Retail Forward VP.

    Among the conclusions reached by Retail Forward about Target and its consumers:

    • “While Target is gaining favor with shoppers across some apparel categories, personal care products, small personal appliances, sporting goods and toys,” the study suggests that “the retailer is losing share of shopper preference in books, consumer electronics, pre-recorded music/CDs and videos/DVDs, and soft home fashions. Target's share of preference barely registers in most grocery categories.”

    • While 25 percent of US primary household shoppers visit a Target store once month, just eight percent of primary household shoppers make a weekly trip to Target vs. 32 percent for Wal-Mart.

    • Target shoppers keep coming back for more, according to the report, with two-thirds of Target's past six month customer base returning to its stores on a regular basis.

    • Target shoppers often shop Wal-Mart and vice-versa. "It stands to reason that up-market families as well as young singles and couples regularly shop Target for the fun trendy apparel and general merchandise, but also frequent Wal-Mart for the basics," Skrovan said. "And, it works the other way too.”
    KC's View:

    Published on: July 13, 2006

    • The Wall Street Journal reports that under pressure to confront Europe’s expanding obesity program, Coca-Cola Co., Groupe Danone, Kellogg Co., Kraft Foods, Nestle, PepsiCo and Unilever all have agreed to add calorie content information to the front of their packaging, “with more detailed lists of nutrients, including sugars, fat, salt and carbohydrate, on the back. The information will include amounts of fat and sugar per serving and recommended daily amounts.”

    • Published reports say that Foodarama Supermarkets in New Jersey is being sued by a shareholder who claims that in taking the company private, the Saker family did not do enough to maximize shareholder value. The suit says that other bidders should have been sought, and that Foodarama violated its responsibilities when it rejected a bid from Yucaipa Cos. that was almost twice as high ($90 per share) as what the Sakers were paying ($53 per share).

    • The Chicago Tribune reports that McDonald’s apparently misjudged the taste buds of its customers, and will take its new Hot 'n' Spicy McChicken sandwich off the menu. The sandwich was introduced to much fanfare just last January, but soft sales have caused the company to replace it with a new snack-size chicken wrap.

    • Kroger-owned Dillons reportedly is building a new 110,000 square foot Marketplace concept store in Wichita, Kansas, that it says will be better positioned to compete against the likes of Wal-Mart and Target.

    The Wichita Business Journal writes that “new merchandise offered will range from rugs, candles and lamps in the home fashions section to decorator towels, shower curtains and soap dishes at bed and bath. A furniture house will offer desks, dining room tables and chairs and framed pictures, while the new kitchen place will offer everyday and gourmet kitchen merchandise. The new store also will include an upscale indoor and outdoor cafe, a brand-new beauty section and expanded non-food areas for school supplies, toys, books and magazines.”

    • Supervalu reportedly plans to open one of its Sunflower natural/organic stores in Chicago later this year, at a location yet to be divulged. The first Sunflower opened in Indianapolis earlier this year, and Supervalu has said it would like to open three more in fairly short order.

    • Campbell Soup reportedly is selling its UK and Irish businesses to Premier Foods for about $845 million (US) as part of its ongoing effort evaluate its international portfolio.

    • They won’t be throwing e benefit from departing Sears Holding Co. vice chairman Alan Lacy anytime soon.

    The Associated Press reports that when Lacy leaves the company at the end of the month, he will walk away with a compensation/benefits package worth more than $50 million.
    KC's View:

    Published on: July 13, 2006

    • Published reports say that the city of Spokane, Washington, is considering legislation that would require big box stores such as Wal-Mart to pay a minimum wage higher than the federal mandate and higher than smaller stores in the city pay. The bill under consideration is similar to one on the docket in Chicago.

    KC's View:

    Published on: July 13, 2006

    • Kroger has named Michael Ellis, the company’s group vice president for grocery, drug, general merchandise, pharmacy and advertising, to be the new president of its Fred Meyer division, succeeding Darrell Webb, who has been named chairman/president/CEO for Jo-Ann Stores, the craft and sewing retailer.
    KC's View:

    Published on: July 13, 2006

    We got a great email from MNB user Lisa Malmarowski responding to our continued criticism of Federated Department Stores’ seemingly cavalier treatment of its Chicago Marshall Fields customers:

    What I wouldn't give to have our customers lining up and TELLING us specifically what they want. That's what Marshall Field's customers are doing for Macy's. I agree with you KC, I can't believe how short sighted they are. I have to imagine that Federated has the expertise and capital to figure out how to keep Marshall Field's name and benefits.

    Maybe not so dumb as arrogant. Gee, everyone must want Macy's items, even those bull-headed Chicagoans, right?


    We suspect that Federated is long on accountants and short on people with imagination.

    As for Chicagoans – we’d take their passions very seriously. This is, after all, a city that continues to sell out Cubs games despite the fact that the team was mathematically eliminated from the pennant race sometime last February…




    On the sobering subject of mad cow disease, MNB user George J. Denman wrote:

    I recently visited some friends in Boise that had just come back from a family funeral in North Dakota. The relative died of Mad Cow disease. How come we don't hear about this in the press? The challenge that I heard from these friends is that it cannot be confirmed until after death and a brain biopsy is completed. If just one consumers dies of this terrible disease, it is one too many for me. Testing should be expanded.

    Agreed.

    And we would argue that the press has been almost as delinquent as the government in discharging its responsibilities in this area.

    Another MNB user, however, disagreed:

    This is merely my opinion, but since you encourage conversation I’m going to contribute. Your constant sarcasm and criticism of USDA’s policy on BSE is tiresome. (To be honest, when I hear a new BSE story on the news, I groan to myself, “Oh no, KC’s going to go at it again!”) You may be right, but the only thing you can control here is whether or not you chose to consume beef. Long ago, my father taught me that there are times in life when the best plan of action is to voice your thoughts and then sit back quietly and let the truth surface. Constant badgering doesn’t accomplish the ultimate goal.

    True..except for one thing…

    MNB was designed for ongoing expression and debate of ideas, not to mention badgering, sarcasm, and criticism. If we didn’t do this stuff, we’d be just like all the vanilla sites out there that don’t illuminate issues, don’t try to entertain readers, don’t take a stand and, to be honest, don’t risk irritating the people who use the site every day.

    Sit quietly and let the truth surface? We don’t think so.

    By the way, our father probably would agree with your father. Which is probably why we’ve been arguing for 51 years.




    On the subject of ConAgra calling for humane treatment of the chickens slaughtered by its poultry suppliers, one member of the MNB community wanted to talk turkey:

    It’s amazing they care more about the chickens than their own employees – or former employees. I worked there for eight years after they purchased the privately held company I worked for. Their process of thinning the herd was an out of the blue phone call from an HR rep unknown to the ranks. It was a brutal 15 minute call explaining that the details of the separation would be mailed in a few days. Your package was contingent on you agreeing and signing a separation contract not to divulge anything you learned there during your stay. I better be careful, I have an obligation not to say too much. I wonder what they were afraid of…

    Those lucky chickens!!!


    In the rush to be humane to animals, which is an entirely noble cause, we’ve often wondered if too little attention is paid to actual humans.




    One MNB user had a comment about yesterday’s review of “The Long Tail” by Chris Anderson:

    You hit the nail on the head regarding the food retailing business with your four points. To me what makes the “Long Tail” work are its economics. You can stock those little ordered items at one place with favorable economics and deliver them easily. I seem to remember that 80 percent (forgive me) of SKUs in a supermarket move less than a case a week of product and most less than a case a month. The economics make it almost impossible to carry any items with slower movement than that. If you look at the totality of the purchases not just one channel, the 80/20 rule still applies and will continue to do so as the economics will dictate. The bricks and mortar guys cannot carry the slow movers and the Internet guys cannot deliver the fast movers at a competitive price. This is why even home delivery has struggled; the economics are really tough unless you are delivering a lot in a tight area. A “stop” just costs too much and anybody who tells you it does not has not looked into the economics closely. Each channel has its own place dictated by its own economics.




    More discussion about global warming…

    One MNB user wrote:

    I haven’t seen Inconvenient Truth and don’t plan on running down to the theatre to see it but on a recent vacation I did read Michael Crichton’s book “State of Fear.” Yes it is pure fiction with real statistical data and may on the surface say that Global Warming is not a problem but the greater point he makes is the concept about what happens when real science meets politics. What I took from the book is that Politics on either side will use any and everything to attempt to drive people to vote their policies based on misusing science to create a state of fear around an issue that may or may not be environmental.

    Assuming that mankind had not progressed to our current state and the world was devoid of all the Industry and Science around economic growth the world would change it would get warmer and it would get cooler and if mankind in his current elevated state of culture is accelerating this to a point where it will permanently change the environment then we absolutely need to address the issue so that life is more sustainable in a comfortable environment. However, we need to do this in a rational manner that will keep the ecosystem whole but allow us to use our god given talents to make our lives better.

    I personally am tired of being afraid that anything I might do will bring the world crashing down around me. It is important to me to get real information on the issues, weight the consequences and make an informed choice about what constitutes a threat to our environment and make a rational response to it. I will no longer participate in a state of fear.


    Seems to us that there is a thin line between being fearful and feeling responsibility. A thin line, but a line nevertheless.

    Another MNB user wrote:

    Two quick comments:

    • I have trouble taking Al, the "inventor of the Internet", Gore seriously. Maybe it's a holdover from seeing Tipper in the 1980s on Capitol Hill railing against the dangers of rock lyrics (and this was after Toni Tennille brought us "Muskrat Love"!!). I don't know. Global warming should be discussed, but to say Al has made this a national issue is reaching a bit.

    • Isn't the term "hit documentary" an oxymoron?


    On this latter point, we would suggest that “March of the Penguins,” “Bowling for Columbine” and “Fahrenheit 9-11” all have been hit films, regardless of whether you like them or agree with them. They’re not making “Pirates of the Caribbean” dollars, but they cost a lot less to make.

    As for Al Gore…regardless of how we might feel about him politically, we respect the fact that he is devoting his life to an issue other than his own electability. Our republic would be a better place if more politicians did the same thing…and maybe didn’t wait until their political careers were over to do so. We are heartened every time we see former President George H.W. Bush and former President Bill Clinton work together on issues that transcend their political perspectives.

    More people on both sides of the aisle should engage in such efforts, as opposed to taking jobs as lobbyists and on boards of directors.

    We take Gore seriously because he is, in fact, creating the platform on which an important debate is taking place.

    Another MNB user addresses precisely this issue:

    I totally agree with your assertion that regardless of one's personal position the biggest mistake would be to not discuss the issue. That being said, can we agree that opinions containing the words "mainstream media" (is anyone else sick to death of this term?) and/or personal attacks on Mr. Gore are not really interested in discussing the issue? It gets so tedious listening to people parrot someone else's worn out rhetoric, pretending they are actually contributing to the debate. I don't know if global warming is real or not. Or if it is, just how big a problem it represents and how much we can control it going forward. What I do know is we will all be better off studying the actual scientific evidence from both sides of the debate. Putting labels on those who do not share one's opinion, or disparaging their character does not serve to advance the discussion in any meaningful way. Let's have more science and less rhetoric. More honest debate and less ridicule.

    Agreed.

    Though we reserve the right also to be badgering, sarcastic, and critical.

    It is, after all, part of what we do.
    KC's View: