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: May 29, 2008

    Shelley Broader, who has led Delhaize-owned Sweetbay Supermarkets since 2002 and spearheaded its transformation to a fresh foods-driven business from an aging Kash ‘n Karry brand, announced that she is leaving the company on June 15 to accept another retailing position outside the supermarket industry.

    No successor has been named.

    Broader came to Sweetbay from Hannaford Bros., which she joined in 1991 after a career in investment banking.

    "I consider it an honor to have been chosen to help create this new grocery concept,” said Broader. “And although I will be leaving the food sector, I'll always treasure the great spirit and energy the Sweetbay team has shown from the first day we began. The company is in excellent hands, and I know Sweetbay has a bright future. My Sweetbay experience has not only allowed me to work with some remarkable people, but I really have grown to care greatly for the Tampa Bay community, and I will miss being part of it when I leave to pursue this new opportunity.”

    Ron Hodge, president and CEO of Hannaford Bros., released the following statement: “Shelley has been the driving force in the development of the Sweetbay concept and brand, and her passion for the business has helped build a new, vital organization in a very short period of time. We will benefit from her leadership for years to come.”

    KC's View:
    I’ve gotten to know Shelley fairly well over the past few years, and I have to admit that I report this news with a certain amount of sadness. I like her immensely – for her business smarts, dedication, contagious enthusiasm and passion for food, all of which have become part of the Sweetbay culture. The supermarket industry needs more people like her, not fewer…and it is a shame that she’s leaving the business.

    (More than a few people have suggested to me in recent days that Shelley would be an ideal person to be the new CEO at the Food Marketing Institute…I guess that’s not going to happen if she leaves the business. Too bad.)

    Published on: May 29, 2008

    Now available on iTunes…

    To hear Kevin Coupe’s weekly radio commentary, 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



    Hi, I’m Kevin Coupe, and this is MorningNewsBeat Radio, brought to you by Webstop, experts in the art of retail website design.

    I find myself wondering if the current maneuverings taking place within the airline industry offer any sort of foreshadowing of moves that may have to take place within the food industry. Right now, the airlines are trying to figure out how to make some money or just break even at a time when rising fuel prices are making it near impossible to stay in business.

    According to the stories I’ve been reading, there is a dollar threshold for airline tickets beyond which people simply stop flying. So the airlines have to be careful – they can't raise prices too much, so they have to find other ways they can charge people…right now, the trend seems to be toward charging for checked baggage. It may not be too long before they actually start charging for people to sit down…which probably is the threshold beyond which I’m not willing to go.

    Will the food industry have to start making the same decisions? It seems to me that it may have to, especially if the cost of fuel – and therefore, the cost of shipping product along an increasingly global supply chain – keeps rising.

    Think about it for a moment. Right now, regular gasoline is in the $4 per gallon range, and diesel is about a buck more. Clearly there already has been an impact on the price of food. But what happens when fuel costs another dollar per gallon more? And then another dollar? And then another dollar? I’m not sure where it all ends, and nor are a lot of economists. But I am sure that as fuel gets more expensive, so does a lot of food. And that means choices will have to be made.

    One option is to simply pass along the cost of fuel by increasing food prices, but depending on the item, there almost certainly is a line beyond which consumers won’t be willing to go…though it will depend on both the item and the specific shopper. Another is to try to find other places to hide the costs, just like the airlines are doing. Though there aren’t as many places to hide them as airlines have.

    Yet another option is to make some fundamental changes in the way products are sourced, and when. Forget about carbon footprints as a rationale for eating local; when gas prices get into the stratosphere, that’s a pretty good reason to source as many products locally as possible. And if that means certain products are only going to be available seasonally, because to bring them in from across the country or around the world simply makes them too expensive, then so be it. Retailers may have to make that decision, and then sell it to shoppers.

    It won’t be an easy sale, since so many shoppers are used to having everything available all the time. But I remain more convinced than ever that there are tectonic shifts taking place that are going to affect retailers, suppliers and shoppers. We have to start preparing for these changes now.

    One of my favorite fictional philosophers, the Boston gumshoe Spenser, is fond of saying that one should “prepare for what the enemy can do, not what he might do.”

    That’s a pretty good mantra for going to market these days, since the enemy is an environment with which few of us have experience.

    For MorningNewsBeat Radio, I’m Kevin Coupe.

    KC's View:

    Published on: May 29, 2008

    The Boston Globe reports that IBM, working with The Economist has surveyed more than a thousand global CEOs from 40 countries and concluded that while much in the business community has changed in recent years, customers are changing in the most profound ways and providing these businesses with their biggest challenges.

    “The ranks of consumers with passive and predictable habits are thinning,” the Globe writes of the IBM/Economist conclusions. “And platoons of noisy, Internet-savvy activists are emerging to lob feedback, challenge established business approaches and clamor for a voice in the goods and services they are being sold.”

    According to the Globe, the survey departs “from traditional market segmentation (and) identified two rising classes of customers in which nervous companies are investing. There are ‘information omnivores’ who demand a say in everything from product design to aftermarket support, and ‘socially minded customers’ who will buy ethically and environmentally responsible products and may be ready to pay more for them … the IBM survey found that chief executives plan an average spending increase of 22 percent over the next three years to serve their ‘more sophisticated and demanding’ customers, and a 25 percent increase to satisfy those concerned about social issues. The investments will range from customer-friendly innovations and sustainable products to Internet programs that solicit advice from consumers.

    “Such efforts are part of a broader trend of trying to keep up with the accelerating pace of change of consumer demands - or, ideally, getting ahead of it. Change is nothing new, of course, in an era of global markets and technologies that can quickly render products obsolete. But there is a growing sense that adapting to new trends has become a core competency for managers and a competitive necessity for businesses.”

    And the final conclusion: businesses ignore these customer-driven trends at their own peril.
    KC's View:
    Couldn’t say it any better than that.

    Published on: May 29, 2008

    The New York Times reports that four US senators have demanded that Visa and MasterCard senior executives provide them with “detailed costs associated with transactions called interchange fees,” including the “methodologies and specific data” used to establish these rates.

    The letter was signed by Democrats Richard Durbin of Illinois and Herb Kohl of Wisconsin and Republicans Olympia Snowe of Maine and Arlen Specter of Pennsylvania. It sets a deadline of June 3 for the information to be provided.

    The Times reports that “in the letters to the heads of Visa and MasterCard Worldwide, the senators said they assumed the fees are for a variety of costs, including data security and hedging against risk. ‘However, it is unclear how much of the amount collected in interchange fees is devoted to covering such costs, and how much is used to other purposes such as marketing, rewards programs that benefit certain cardholders and issuer profit,’ they said.

    “The senators cited a third-party analysis that estimated about 13 percent of collected interchange fees are used to pay for the processing costs and the majority is used for reward programs, issuer profits and other unspecified costs.” The Times also notes that “the U.S. credit card industry last year rang up $42 billion in interchange fees.” Retailers complain of a lack of transparency in how these rates are established, and that these escalating rates gobble up an excessive amount of profit.

    KC's View:
    Hold their feet to the fire, and crank the flames up high. (Anybody want to bring marshmallows?)

    Published on: May 29, 2008

    Crain’s Chicago Business reports that two Illinois-based wholesalers, Certified Grocers Midwest and Central Grocers, will merge in “an effort to combat higher costs and a dwindling customer base.”

    According to the story, “Central Grocers will absorb Certified’s customers, which include Treasure Island and Moo & Oink. Jim Denges, CEO of Central Grocers, will become CEO of the combined company … The merged entity will operate under the Central Grocers name and move to a new 920,000-square-foot distribution center in Joliet that is scheduled to open in first quarter 2009. The new Central Grocers will serve more than 200 grocery store owners that operate roughly 450 stores in Illinois, Indiana, Iowa and Wisconsin.”

    “By combining the volume of these two cooperatives, we can take costs out of the equation which will make our members more competitive at retail,” Paul Butera, chairman of Certified, said in a prepared statement.

    The deal is subject to approval by the shareholders in both companies.

    KC's View:

    Published on: May 29, 2008

    The Hollywood Reporter ha a story saying that fast food chain Carl’s Jr. “is considering a foray into online branded entertainment” that would “target young males with edgy comedic webisodes.”

    The feeling seems to be that the company wants to shift away from the more traditional online marketing approaches that it has taken, and is interviewing digital production companies to assess what the opportunities might be. The approach seems to be similar to what Anheuser-Busch launched last year with its Bud.TV website, an effort that is considered to be less than wildly successful.

    The Hollywood Reporter notes that Carl’s Jr. has been willing to take risks in recent years as it creates marketing vehicles that can separate it from the fast food pack. One example: “a 2005 TV commercial featuring a bikini-clad Paris Hilton washing a Bentley, which became one of Internet video's first viral hits.”

    KC's View:
    I like the idea of finding unique ways to tell one’s story, and of using the web to attract a new customer base.

    But I hope they do better than Paris Hilton. (I keep wondering if there is a less attractive so-called attractive person than Paris Hilton, but can't come up with one…)

    Published on: May 29, 2008

    • Wal-Mart Canada announced yesterday that it has achieved its goal “to carry only concentrated products in the liquid laundry detergent category in every one of its 299 stores nationwide … The switch in Canada alone will save an estimated 25 million gallons of water, six million pounds of plastic resin, eight million pounds of cardboard,
    443,500 metric tonnes of carbon emissions and take the equivalent of 1,220 trucks off the road over a three-year period. For water, this will save the equivalent amount required for six million showers.”

    KC's View:

    Published on: May 29, 2008

    Dow Jones this morning reports that the most recent survey of market shares in the UK grocery business shows that Tesco’s percentage dropped to 31.1 percent in the most recent quarter – a slight dip from the 31.3 percent it enjoyed during the same period a year ago.

    Wal-Mart-owned Asda Group saw its market share grow from 16.7 percent to 16.9 percent, while Sainsbury’s piece of the market stayed constant at 16 percent.

    William Morrison Supermarkets earned 11.4 percent of the market, up from 11.2 percent a year ago.

    KC's View:

    Published on: May 29, 2008

    • C-store operator Couche-Tard reportedly will launch a new store concept in Canada called Couche-Tard Menu, which will feature an expanded selection of branded prepared foods and ready-to-cook meals, as well as an on-site “food advisor” who can help shoppers select appropriate products. The concept is being tested in eight locations in the Montreal area.

    Channel 13 News in Rochester, NY, reports that Wegmans has applied to expand its headquarters there by 400,000 square feet, which would create a campus on which the company could house a total of 1,600 employees.

    • The Pittsburgh Tribune-Review reports that the HJ Heinz Co. has announced “a goal to reduce greenhouse gases by 20 percent by 2015, part of what the company calls its sustainability vision to maintain the health of people, the planet and the company.”

    The story says that Heinz will focus on 1) “reducing energy consumption by 20 percent through improved operations,” 2) “reducing packaging by 15 percent through the use of alternative materials and reductions in existing packaging,” 3) achieving “a 10 percent reduction in transportation by improving its distribution network,” and 4) “mandating that 15 percent of all energy used comes from renewable sources.”

    “From using potato peels to generate energy, to reducing the amount of our packaging, every day we're finding new ways to reduce the environmental footprint and improve the efficiency of our company," said Heinz CEO William Johnson.

    KC's View:

    Published on: May 29, 2008

    • Costco Wholesale said that its third quarter profit was up 32 percent to $295.1 million, on Q3 revenue that was up 13 percent to $16.26 billion – a result, it says, of a recessionary economy that is sending customers into its stores looking for deals.
    KC's View:

    Published on: May 29, 2008

    …will return.
    KC's View: