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    Published on: July 17, 2006

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    KC's View:

    Published on: July 17, 2006

    In the UK, the Sunday Times reports that Tesco Ireland is trying to implement a new plan that would mandate store managers at its 46 24-hour stores there to work one week of night shifts every month. The company has said that the plan is keyed to the fact that retail is a changing business and that “managers don’t just have a daytime role any more.”

    However, the company’s store managers in Ireland reportedly are resisting the move because of the impact it will have on their families and lifestyles, though it is judged to be unlikely that any sort of organized defiance will take place. “We’ll just have to get on with it and hope that over time we can work out another arrangement,” one store manager tells the Times.
    KC's View:
    We certainly are sympathetic to the lifestyle and family concerns pointed to by the Tesco store managers, but we also have to concede that there is a certain truth to the statement that “managers don’t just have a daytime role any more.”

    Retail is changing, and we have trouble with retailers that don’t understand that the old rules simply don’t apply anymore. We were in a shopping center the other evening, and noticed that while closing time for the stores was listed as 9 pm, lights started to dim and gates started to go down shortly after 8:30. Sure, those folks wanted to go home to their families and friends, but there are so many other options for consumers today that closing early sends the wrong message about relevance.

    Published on: July 17, 2006

    The Bergen Record reports that Eric Claus, CEO of the Great Atlantic & Pacific Tea Co. (A&P), told the company’s annual meeting last week that the supermarket is headed for extinction "like the dodo bird," and that the company is “getting out of the middle.”

    The company’s strategy is to focus on the high end – through fresh food and service-oriented stores – and the value end – through its no-frills Food Basics stores. “In addition, A&P is upgrading its Food Emporium stores to appeal to the most affluent shoppers in select markets and will introduce upscale Food Emporium branded products -- such as $30-a-bottle balsamic vinegar -- to its other stores.”

    According to the Record, “Claus' comments came as A&P continues its drive to turn around what had been a floundering business. The company is still in the red -- it lost $39.1 million in the most recent quarter -- but is headed in the right direction, Claus said.”

    The Record notes that Christian Haub, A&P’s executive chairman, reiterated that the company is "well positioned to participate in consolidation" and could merge with another company or make "a major acquisition if the value of that makes sense.”
    KC's View:
    We’ve said before that the big problem with A&P has been that sometimes it has seemed that with every new quarter comes a new reorganization and strategy for survival. The hope out in Montvale, NJ, now is that Claus will be able to do what his predecessors have been unable to – and we think that trying to focus on both end of the marketplace seems like as viable a solution as any.

    After all, we’ve been writing for years that the middle of the road is where you find roadkill and that the mainstream is where you go to drown.

    That said, we have to say that the whole merger-and-acquisition issue make us a little nervous. It might make more sense for A&P to keep its eye on creating the most compelling and relevant shopping experiences possible for the 21st century consumer and not look for new worlds to conquer.

    Published on: July 17, 2006

    MSNBC reports on a new study conducted at the University of Minnesota concluding that while a reduction in the amount of fat consumed has a great impact on weight loss than increases in exercise, a lifestyle that focuses on both a reduction in calories and increased exercise is most likely to be successful in the long term.

    Go figure.

    The study also suggests that 1) a formal diet is less important than just the avoiding or limiting of foods high in fat, and 2) the experience of losing weight is different for men than for women. Men apparently are able to lose weight through increased exercise alone, while women need to both increase their exercise levels as well as reduce their intake of food.
    KC's View:
    Once again, Mom was right when she said to stop eating so much and go out and play more.

    Published on: July 17, 2006

    The official ban on the sale of foie gras in Chicago, instituted because of what local politicians (urged on by animal rights activists) said was the inhumane treatment of the ducks and geese used to make the delicacy, was mourned the other evening there by a dinner held at The New American Café there.

    According to Reuters, more than 100 people “paid $150 each to dine on grilled foie gras with cherry chutney and peppercorn brioche; salt and herb cured foie gras with lamb prosciutto; ravioli of foie gras, pheasant and apple and other treats as chefs talked of overturning the ban.”

    The possibility of civil disobedience seems to be in the air, with some chefs talking about exploiting a loophole in the law by giving it away with overpriced glasses of wine. And a lawsuit reportedly is planned to try and overturn the ban, which goes into effect next month.

    KC's View:
    Chicago, of all cities, should know that prohibition didn’t and doesn’t work.

    We agree with Mayor Richard Daley. The Chicago City Council has better things to do.

    Published on: July 17, 2006

    The Chicago Tribune reports that Home Depot, hoping to attract more female customers, is getting into the home décor business – which also is putting it into direct competition with the likes of Pottery Barn and Restoration Hardware.

    It is a strategy that is fraught with problems, not least of which is the fact that Home Depot is trying to enter the field through its catalog operation, and has no brick-and-mortar presence in home décor at the moment. (It’s one effort in this area, the Expo Design Center business, has been judged a failure with almost half of those 54 stores closed by the company during the past year.) Home décor customers, analysts tell the Tribune, like to use the “tush test” before buying furniture – they like to sit in the chair or on the couch before buying it. They won’t be able to do that at Home Depot, while the competition generally has a multi-channel approach to the segment.

    One analyst describes the strategy this way: “There’s a fine line between vision and desperation.”
    KC's View:
    The more things change, the more they stay the same…

    On October 21, 2002, MNB reported:

    Home Depot is in the process of rolling out 80,000 square foot stores throughout the country that it believes conform to what women want: white racks and fixtures instead of orange, brighter lighting, less clutter, and appliances and kitchen layouts at the front of the store. The new stores, about a third the size of the traditional Home Depot store, also are designed to be more competitive with Lowe’s, the number two home improvement chain which seems to be developing a better reputation for service and women-friendly layouts.

    Almost four years later, people in the DIY business still seem to think that Lowe’s is better in this area than Home Depot…and the latter is still trying to find ways to attract female customers.

    Published on: July 17, 2006

    Advertising Age reports that Wal-Mart is trying to launch its own version of MySpace.com, the social networking website that is all the rage among teenagers but that has raised serious questions about security and persona safety among parents and child safety experts.

    “It's a quasi-social-networking site for teens designed to allow them to ‘express their individuality,’ yet it screens all content, tells parents their kids have joined and forbids users to e-mail one another,” Ad Age writes. “Oh, and it calls users ‘hubsters’ -- a twist on hipsters that proves just how painfully uncool it is to try to be cool.

    “Desperate to appeal to teens with something other than pencils and backpacks during the crucial back-to-school season, Wal-Mart is launching a highly sanitized, controlled and rather unhip site at walmart.com/schoolyourway. Teens are invited to create their own page, ‘show it to the world and win some fab prizes,’ including a chance to have their videos appear in a Wal-Mart TV commercial.”

    The goal, according to experts interviewed by Ad Age, is to better position Wal-Mart against Target – though this is easier said than done because Wal-Mart is imposing strict controls on site content. While this might appeal to parents, it tends to limit the appeal to the very students that the retailers is trying to attract.

    KC's View:

    Published on: July 17, 2006

    Following on the heels of Whole Foods promising to spend $10 million a year to support small and local organic farms, Wild Oats announced that it will launch a new “Choose Local” program designed to “showcase fresh, organic products from local growers, farmers and artisans in all 113 of its natural food markets across North America.”

    According to a statement released by the company, “To make it easy for shoppers to identify locally supplied products, Wild Oats will clearly mark these items throughout its stores with ‘Choose Local’ shelf tags,” as well as offering profiles of local farmers and vendors that “will allow customers to learn more about the local businesses they are supporting and feel good about their purchases.”
    KC's View:

    Published on: July 17, 2006

    • R-Calf USA, the lobbying group that represents American ranchers and cattlemen, says that last week’s report of a confirmed case of bovine spongiform encephalopathy (BSE) in Canada has only reinforced its belief that all Canadian beef imports to the US should be suspended.

    • The Wall Street Journal reports that “wheat and corn prices are climbing to what could be their highest annual average level in a decade, helping to send an inflationary ripple through grocery aisles.

    “The rising price -- due partly to drought conditions in farming areas -- has put increased cost pressure on food makers” that “already face higher costs for everything from fuel to sugar.”

    • The Washington Post reports on the Wonder Bar, “a hunk of chocolate, designed specifically to alleviate the effects of premenstrual syndrome...The irritability, the anxiety, the moodiness -- all of it is allegedly soothed by the Wonder Bar, at $3.69 a pop.”

    According to the Post, the Wonder Bar isn’t just “cunningly conceived” and “flawlessly executed,” but it also apparently is utterly unique – “if there's another packaged food product out there marketed for its impact on PMS, it's well hidden. A Web search turned up nothing.

    • The Detroit Free Press reports that Carter’s Inc., the Charlotte, Michigan-based grocery chain, has filed for Chapter 7 bankruptcy and plans to sell all its assets and distribute the proceeds among its creditors.

    • The Houston Business Journal reports that H-E-B has launched a program that gives customers $5 in H-E-B Fuel Bucks for every $25 purchase made at H-E-B of select H-E-B and Central Market-branded products.

    The Fuel Bucks can be redeemed at any H-E-B Gas Station for free gas. Purchases made at Central Market stores are not eligible for Fuel Bucks.

    • The Wall Street Journal reports that the Chinese government “is drafting new rules to regulate large-scale shopping outlets, which could impede the expansion plans of foreign retailers such as Wal-Mart Stores Inc. and Carrefour SA.”

    If the rules are finalized later this year as expected, “they could raise costs and increase red tape for big retailers by requiring them to file detailed blueprints for proposed new outlets and hold public hearings on the impact on communities.”

    • Tesco has acquired Leader Price, the 140-store Polish c-store chain, from Casino for the equivalent of about $130 million (US). The UK-based retailer currently has more than 100 units in Poland and is trying to bolster its market share there.
    KC's View:

    Published on: July 17, 2006

    • Walgreen Co. announced that Charles Goodall, the company’s director of pharmacy technology services, has been promoted to divisional vice president of pharmacy technology services.

    In addition, Brian C. DeMay, currently vice president of information technology for Walgreens Health Services (WHS), the company's managed care division, has been named a Walgreen Co. divisional vice president in addition to retaining his current title.
    KC's View:

    Published on: July 17, 2006

    The Wall Street Journal reports that the 75th anniversary edition of “The joy of Cooking,” scheduled to be published later this year, will be far more focused on convenience cooking than in previous incarnations. Recipes that used to call for fresh tomatoes instead will use canned tomatoes, and “the new edition will bring back such comfort foods from the 1940s as chicken tamale pie and cream of corn soup. Here, too, is a recipe for milk toast -- toast the bread, spread with butter, sprinkle with salt, put it in a bowl and cover with a cup of hot milk or cream. Home chefs are urged to buy canned broths and beans where needed, and to save time if necessary by using frozen vegetables.”

    The is new approach, according to the Journal, attempts to deal with a basic American culinary truth: “Just because audiences follow the exploits of TV chefs favoring fresh ingredients and fancy preparations doesn't mean that home cooks are emulating them in the kitchen.”

    So simplicity – and convenience – and job one for the new cookbook, which will also deal with such basics as how to cook pasta and how to boil an egg.

    KC's View:
    Most food stores do a lousy job of helping people understand the foods they are buying and feeding to their families. People don’t understand foods’ nutritional values and have little or no idea how to prepare them…

    Maybe retailers should take a page from the “Joy of Cooking” and give greater focus to the illumination side of their businesses.

    Published on: July 17, 2006

    Last Friday, MNB featured two stories about companies taking different paths – Pepsi making deals to build up its non-carbonated beverage business while Coke struggles with this cultural and strategic issue, and McDonald’s abandoning its spicy chicken sandwich while Wendy’s introduces a “red hot,” even spicier chicken sandwich. They struck us as interesting juxtapositions, and MNB user Glen Terbeek felt the same way:

    Isn't it interesting that the "challenging" company in each example seems to be the one with the Right Stuff? Is it because the "incumbents" can't break away from what made them successful (cola and hamburgers)?

    What can the supermarket industry learn from this (as they continue to lose share)?


    We believe that the most important thing a business can do is challenge itself from the inside.

    We can’t remember at the moment who it was, but there was some famous author a few years ago who suggested that every company should have someone on staff who has as his or her primary responsibility the job of putting the company out of business – in other words, identifying the possibilities that would make the company as it currently exists obsolete. Then, having defined those options, the company can integrate them into the existing business and eclipse the competition.

    This makes sense, the reasoning went, because if you’re not trying to figure out how to put your own company out of business, the competition certainly is – and you might as well get there first.
    KC's View: