retail news in context, analysis with attitude

A bunch of emails about the food shortages and rationing stories that have been popping up regularly…

One MNB user wrote:

Kevin, for those of us who lived through WWII and the Nixon years along with price freezes and the high price of gasoline in the 80's. IT IS TOUGH.... Sure we'd all like cars that run on natural gas or ethanol. But it just isn't going to happen until Congress gets their act together and that isn't happening and won't ---- until H--- freezes over.

That said, I went shopping yesterday in a major store for fresh veggies and fruits. What a shock. Can you believe green peppers 2/$4. Today in another super they were regular priced at $1.29. So who is gouging who? Same size and from the same shipper.....

So, we blame it all on the cost of petroleum.... and maybe so. But are grocers taking advantage of this situation? I certainly hope not. Eggs. Who ever thought we'd be paying over $2.50 a dozen when the egg purveyor is only 40-120 miles from the market?

Sad, isn't it?


MNB user Stan Barrett had some thoughts about the rationing imposed by Sam's Club:

There was an interesting follow-up on NPR last night that pointed out that warehouse clubs don’t typically respond like a grocer would - short supply, high demand = raising prices. The warehouse clubs want to protect their low price image, so instead of raising prices, they are choosing to ration the product at the low price. This protects their image as a low-cost supplier and allows them to continue to generate the bulk of their revenue on membership fees.

The story also interviewed a CA rice producer who indicated that the US has a surplus of rice and is a net exporter. I do not doubt that there is a potential global hunger issue coming in lesser developed countries that spend a higher percentage of their income on food. However, there appears to be more at play in the Costco/Rice story than is being reported. I would be interested in hearing any other feedback that you have heard or your take on the NPR story since I don’t pretend to be an expert on the grocery industry or global rice markets.


MNB user Rick Marcum wrote:

OK, Kevin, rationing on rice, flour and other food staples…gas prices rising at remarkable rates…less visits to restaurants…rising food costs…etc… All of this you have reported about and I have read most of it. In the US it would be reasonable to assume (you know what that can do) that consumers are not going out and would need the staples in the food chain to begin to fire up their kitchens at home and begin to enjoy a meal around the table and cut back on expenses related to moving the car and going to restaurants that are also raising their prices. Not to mention the panic that this announcement will cause to the American public. I heard this first on Fox & Friends this morning. Also, the most consumed staple in the world is rice and more so in other countries than the US. Haiti, on the other hand, is the poorest nation in the Western hemisphere and has been since the Duvalier family completed raping the country some decades ago. That is not to say that we should not be assisting Haiti in anyway possible, but to use them as a benchmark for the rest of the world is not a fair assessment. I am anxious to hear more on the subject of food rationing as time continues and am curious to see if we are jumping to unreasonable conclusions. Yes, as the rich Americans, we do have an obligation to set the example for the rest of the World as we have in the past and, I trust, will in this instance. I am certain that American generosity will reach Worldwide as it has in the past.

MNB user David M. Metz wrote:

Another issue in regards to the discussed commodities: I am pretty close to what's going on in the food commodities business because my daughter in law owns a bakery and I am in the produce business in Los Angeles and we had a discussion in regards to the increases in price in Flour all types and sugars and oils and there has been a huge increase across the board. So I have the following statement to make, As long as the US and other industrialized countries continue to use precious land to create BIO FUELS, we will continue to see an increases across the board on all grains and oil. I am very environmentally conscious however we need to make smarter choices in what we choose to make fuel from.

In regards to the World Economy and scripture: Have nations turn the swords into plowshares and let there be war no more. AMEN. But I too am a Cynic as well.


Another MNB user wrote:

A nice simple step toward sanity would be to put an immediate halt to the boondoggle of converting corn to bio-fuel. According to recently published articles, 25% of US corn crops have been diverted to this ill conceived effort to eliminate only 1% of our fossil fuel needs. Meanwhile it is contributing heavily to rising food prices, bringing protected lands into production, and wreaking havoc with the environment through the coal needed to make the conversion, and the fertilizer runoff in to the Gulf of Mexico.




On the subject of Shaw's new in-store "Inspiration Stations," one MNB user wrote:

I was with Shaw's for 5 years, leaving just after Albertsons announced it was going to sell itself - so I have a 'before and after' perspective on Shaw's.

When it was owned by J Sainsbury, Shaw's was pretty innovative, rolling out different formats (the Shaw's at the Prudential Center is much different than Shaw's in Freeport, Maine) and merchandising ideas like 'Shop the World', 'Ducklings', and 'Happy Tails'. This in addition to the successful Wild Harvest section, which Supervalu is taking national.

After the series of sales, headquarters shifted from Massachusetts (very close to the customer) to Boise (Albertsons) and now Minnesota (Supervalu). 'Inspiration Stations' can be seen as good marketing or can be seen as purely cost (labor and shrinkage).

The idea reminds me of the Shaw's owned by J Sainsbury - taking the customer view and wanting to satisfy a need. If cost does not get in the way (Supervalu supports the idea), it will probably be successful because I expect Shaw's will 'tune' the Stations depending on the market where the store is located and the season of the year.

I hope it works and I'll be stopping in at some of the stores in my area.


We said yesterday that the "Inspiration Station" idea works better if one offers not just recipes but also sampling and brings together solution-oriented products. I used Publix as an example, and one MNB user chimed in:

Wegmans follows the Publix model with cooking and sampling. Also stocks all of the needed ingredients right next to the station. It wakes you up, is so convenient and inspiring, you’re out the door with dinner before you even think about it.

Which is what supermarkets are supposed to do.

KC's View: