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 20, 2006

    As consumers continue the fight to lose or control weight and struggle to achieve specific weight goals, one cannot overlook the fact that most eating actually is some form of habitual behavior. With obesity this nation' s number one public health issue, do consumers look for healthy food options when shopping for food or eating out?

    The Hartman Group has new research on this important subject, and to check it out, click on the “Consumer Pulse” tile ad on the right hand side of the page, or go to:

    http://www.hartman-group.com/products/CP/new.html
    KC's View:

    Published on: July 20, 2006

    You wouldn’t think that listening to customers would be such a leap for retailers…but somehow, MNB “Content Guy” Kevin Coupe keeps finding companies that pay more attention to their own needs than their shoppers’. But now he’s found a unique example of one organization that found an ingenious way to integrate shoppers’ opinions into their game plan.

    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 20, 2006

    A federal judge in Maryland has ruled that the state’s Fair Share Health Care Fund Act, which mandated that employers with more than 10,000 employees had to pay at least eight percent of their payroll costs in health benefits or be fined by the state, is in violation of federal law.

    The Maryland law was pushed by organized labor and pro-labor activists who complained that by not providing adequate health care coverage, certain employers were forcing workers to go on public assistance, which was costing the taxpayers money. There are only eight companies in Maryland with fewer than 10,000 employees, and only one – Wal-Mart – reportedly fell beneath the eight percent threshold. Ahold-owned Giant Food, which has more than 10,000 employees in the state but pays more than the requisite amount in health care benefits, had supported the Fair Share Health Care Fund Act, saying that it created a level playing field.

    However, the federal judge – ruling on a suit brought by the Retail Industry Leaders Association (RILA) – agreed that the law is superseded by the federal Employee Retirement Income Security Act (ERISA). "The act violates ERISA's fundamental purpose of permitting multistate employers to maintain nationwide health and welfare plans, providing uniform nationwide benefits and permitting uniform national administration," the judge wrote in his opinion.

    It is expected that the Maryland Attorney General will appeal the ruling.
    KC's View:
    The impact of this ruling is likely to be felt beyond the Maryland borders, since it was just the first of many states that considered creating health care mandates for major retailers such as Wal-Mart. Eight states still are contemplating health mandate laws, though 23 have to this point found ways to kill such mandates.

    Still, we would expect that this will continue to be a major legal issue that will place Wal-Mart on the hot seat.

    Published on: July 20, 2006

    The Financial Times reports this morning that even as governments push to limit how food products are marketed to children, “food companies are increasingly using the Internet to deepen children's exposure to marketing messages through online games and commercials, blurring the lines between advertising and entertainment.”

    A new study by the Kaiser Foundation says that almost nine out of 10 top US food brands are using branded websites to communicate their message to children – not only offering more information than can be made available in a television commercial, but also using the interactive experience to create engage children for a greater amount of time. According to FT, these sites “allowed children to spend an unlimited amount of time interacting with specific brands. It also said some websites ‘recruited’ children as marketers, using them to promote branded messages to their friends.”

    Seven out of 10 branded websites reportedly use games to engage with children, and six out of 10 use so-called “viral marketing” to get kids to reach out to their friends on behalf of the brand.
    KC's View:
    If it becomes apparent that food companies are using the Internet to circumvent regulations about how to market to children, it strikes us that there could be an enormous backlash against food companies. We think you have to be even more careful about how you use the Internet to talk to children, especially because it is such an unregulated environment. But this requires marketers to show personal responsibility and restraint – remembering, perhaps, that they also are adults and parents with greater accountability than just for driving up the numbers.

    Published on: July 20, 2006

    USA Today reports that child-oriented television network Nickelodeon plans to put images of cartoon stars SpongeBob and Dora the Explorer on packs of apples, pears, cherries and soybeans, with the goal being to get children to eat more of such healthy foods.

    "My goal is to have every fruit a kid would want to eat with a Nickelodeon character," says Sherice Torres, licensing vice president at Nickelodeon. "We're trying to see how many places we can use our characters to encourage kids to eat more fruits and vegetables."

    The move is similar to those taken both by Disney and Sesame Street, both of which are involved in trying to get kids to eat healthier.
    KC's View:
    Better than putting their image son chocolate bars and soda cans. This seems to be a good example of doing things right….as opposed to the implications of the Kaiser Foundation study cited in our previous story.

    Though we have to admit, we remember our mother unsuccessfully trying to sell us on Popeye-branded spinach when we were a kid. So characters aren’t always the answer, especially when you’re dealing with a kid who is a pain in the neck. Which we were.

    Published on: July 20, 2006

    WHITE PLAIN, NY - As reported virtually everywhere yesterday, Wal-Mart opened its newest urban store in White Plains, New York – a multi-level, 180,000-square-foot unit that the company says is specifically designed to meet the needs of local residents, especially nearby apartment dwellers.

    Much of the attention being paid to the store because it is just about 45 minutes north of New York City – which is like Oz to Wal-Mart, an emerald city where it has no stores, and that it feels offers it the potential of near limitless numbers of new customers and sales numbers that will not be cannibalizing other Wal-Mart units. If Wal-Mart can work in White Plains, the reasoning seems to be, then the company’s efforts will seem less threatening and maybe even more appealing to denizens of Manhattan and the outer boroughs.

    Having spent some time yesterday at the new Wal-Mart, we can report that it was a) as busy as you would expect a new Wal-Mart to be, b) completely conventional in terms of design and décor, and c) stocked with as strong a grocery selection as we can remember seeing in a Wal-Mart not labeled a supercenter.

    The conventionality of the décor and design is hardly a surprise. In most Wal-Marts, the goal seems to be to keep the shell as plain as possible and the shelves crowded with stock – and White Plains is no different. The store seems to be nicer than the two units that Wal-Mart operates about a half-hour away in Norwalk, Connecticut (conceded even by company insiders to be two of the ugliest, most beaten up stores operated by the chain), but not nearly as nice as supercenters that we’ve seen operating in places like Texas and Arkansas. But that’s a subjective judgment.

    The food section, on the lower level of the store – requiring the use of a special cart escalator if you’re moving between floors with your shopping cart – is strong. Wal-Mart has made a point of the fact that it is carrying a lot of small sizes that will appeal to nearby apartment and condo dwellers, and that seemed to be the biggest part of its “localization” strategy. Prices seemed decent, if not overwhelming; on a number of items that we were familiar with, we noted that prices were slightly above those charged at Costco and Stew Leonard’s.

    The closest supermarket competition offers very different experiences, by the way. Within a mile of the store – and in less of an urban neighborhood location – are both a Super Stop & Shop and a beautiful Whole Foods, the latter of which especially has turned into a destination for people living in nearby communities.

    In short, we’d give the store a solid “B” – but we wouldn’t bet on it offering much reassurance to New York City opponents who will see Wal-Mart as some sort of invasive, foreign monster from south of the Mason-Dixon Line.

    KC's View:

    Published on: July 20, 2006

    The Chicago Sun-Times reports that city Alderman Edward Burke, who has been pushing for a citywide ban on the sale of foods containing trans fats by all of the city’s restaurants, has agreed to limit the ban to food sold in fast food joints and major chain restaurants.

    According to the paper, “The Illinois Restaurant Association had complained that the original version would have been a costly burden for ‘mom and pop and ethnic’ establishments,” which now will be exempted from the law if it is passed as expected.
    KC's View:
    While we understand that trans fats are bad for you, we’re not sure that local laws preventing the sale of foods that contain them are a sensible alternative. If people stop eating them and there is pressure on establishments to stop selling foods that contain them, then things will take care of themselves. If not…well, then they won’t, and there isn’t much that legislation will do to correct the situation.

    We also don’t understand how a city can only try to ban the sale of trans fat-laden foods by some kinds of restaurants and not others…it seems like such a selective and inappropriate use of lawmaking power.

    Published on: July 20, 2006

    • Kroger said yesterday that it plans to build between eight and 10 Marketplace stores – twice the size of the company’s usual stores and containing both more food and nonfood products – in its home market of Cincinnati.

    The move is seen as a direct response to Wal-Mart, which has opened three new or expanded supercenters there in the past few months and plans to open as many as 20 there within the next couple of years.

    • The Wall Street Journal reports that “tea drinking is on a roll in the U.S. There are some 2,000 tea houses nationwide, up from 200 a decade ago. And tea sales reached $6.2 billion last year, more than quadruple their level in the early 1990s, according to the Tea Association of the USA. One big reason: Recent research has shown that tea, particularly green tea, is loaded with antioxidants that supposedly can help ward off ailments such as heart disease and cancer.”

    With this renewed interest in tea, a number of retailers are looking at Starbucks as a role model, figuring that there must be a way that they can do for tea what Starbucks has done for coffee.
    KC's View:

    Published on: July 20, 2006

    Reports out of Italy say that a controversy is fermenting over what is called “Pinocchio wine,” or wine that uses an artificial aging process to speed up its readiness and give it a barrel-aged flavor.

    The European Union (EU) reportedly has not only approved the use of such a process, but also has not required that labels make any distinction between wines aged using traditional methods (like time) and those aged faster using wood chips.

    Italian wine producers are pushing for legislation that would require truth in wine bottle labeling.
    KC's View:
    We’re tempted to say that this is what happens once you start making compromises like screw tops. Next thing you know, there’s artificial aging. Next up will be synthohol, which won’t even have any alcohol in it but will approximate the wine drinking experience. (Star Trek fans will recognize this phenomenon…)

    As much as we agree that artificial aging is an absurd practice, especially in an industry for which proper aging is both art and science, we would be even more emphatic in pushing for accurate labeling. To not say when artificial aging has been used is more than a travesty. It is an outright lie and an attempt to deceive the consumer.

    Published on: July 20, 2006

    As reported exclusively on MNB last May 8, the Food Market Institute (FMI) will indeed move the bulk of its staff out of its current Washington, DC, location and into new offices in Crystal City, Virginia. Reports are that FMI would like to complete the move by the end of the year.

    FMI CEO Tim Hammonds had confirmed to MNB several months ago that FMI was in negotiations to move out of the District, but that the association would maintain a small government affairs lobbying office near Capitol Hill.
    KC's View:

    Published on: July 20, 2006

    • Weis Markets reported second quarter sales of $562 million, up five percent from the same period a year ago. Same-store sales were up 3.8 percent.
    KC's View:

    Published on: July 20, 2006

    …will return.
    KC's View: