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 30, 2008

    The Conference Board continues to track the declining consumer mood, saying that its index of such things dropped in May to 57.2 from 62.3 in April, even as consumer expectations about inflation rose to what was called an all-time high of 7.7 percent, from 6.8 percent in April.

    Reuters notes that “the index has dropped by almost half since last July, when housing market troubles triggered the most severe credit crisis in at least a decade.”

    "Weakening business and job conditions coupled with growing pessimism about the short-term future have depleted consumers' confidence in the overall state of the economy," said Lynn Franco, director of The Conference Board Consumer Research Center.

    KC's View:
    Not that I minimize the importance of reports like these, but all these organizations should be forced to come up with an “obviousness index.” In other words, they’d come up with a conclusion…and then they’d have to rate how obvious that conclusion is on a scale of one to 10. In this case, “weakening business and job conditions coupled with growing pessimism about the short-term future have depleted consumers' confidence in the overall state of the economy” gets at least an 8.5.

    Published on: May 30, 2008

    It isn’t a surprising trend in view of the state of the national economy, but here are some numbers to confirm what most people have come to believe – increasing food costs are forcing consumers to make changes in how and where they shop.

    New research for BIGresearch says that “Wal-Mart maintains a strong lead in the Groceries category among all adults nationwide (16% say they shop there most often) and is increasing competition for regional players.”

    According to the study, “while shoppers in the Northeast head to Shoprite most often to stock their pantries, the grocer only saw a marginal increase in consumer share year over year (9.5% in May 07 to 10.1% in May 08), giving them a positive Consumer Equity Index™ (CEI)* of 106.29. #2 Stop ‘n Shop’s growth remained flat with a CEI of 99.09 while #3 Wal-Mart saw a substantial increase in share with an index of 126.40.”

    (BIGresearch defines the “Consumer Equity Index” as measuring growth in share year over year…with 100 being flat. An index of 106.29, for example, indicates 6.29 percent growth, while an index of 126.40 indicates 26.4 percent growth.)

    The study says that “Safeway tops the list for grocer shopped most often in the West; however, growth in consumer share remains flat with a CEI of 100.98. More shoppers are heading to second place Wal-Mart, evidenced in their positive CEI reading of 122.55. Wal-Mart maintains a commanding lead in the South as a quarter of all adults indicate they prefer to shop the big discounter for groceries. Wal-Mart also leads in the Midwest; 14.9% of shoppers who live there say the same … it appears that consumers are consolidating shopping trips, possibly due to high gas prices, as Wal-Mart is gaining consumer share in the Prescription Drugs category as well.”

    KC's View:
    On the “obviousness index,” about an eight.

    There is no question that retailers are going to have to defend their turf using price and value as their primary weapons. But they also would be well advised to define value in a number of ways. Customers may be cutting back, but they will retain many of the same aspirations that they had before the economy hit the skids…and retailers that can figure out how to satisfy both impulses will have an advantage.

    Published on: May 30, 2008

    Tesco’s Fresh & Easy division in the western United States released the following press release yesterday:

    “Fresh & Easy Neighborhood Market’s Kitchen today produced its 3 millionth product, a 17 ounce package of fresh&easy Mashed Potatoes, which retails for $1.99 and is made using only potatoes, milk, butter, cream, salt and pepper, without additives or preservatives. All fresh&easy products contain no added trans fats, no artificial colors or flavors and only use preservatives when absolutely necessary.

    “Fresh & Easy recently announced plans to add over 250 new fresh&easy brand products to its stores over the next several months, based on positive customer feedback. Today Fresh & Easy will begin offering 23 of these new kitchen products in its stores, including Sheppard’s Pie, Ratatouille, Meatloaf Dinner, Braised Beef and Chicken Breast Marcella. These recipes were developed by Fresh & Easy’s own Chef, Mike Ainslie, who prior to joining the company worked with award-winning restaurants and hotels.”

    Fresh & Easy, which has 61 stores open in Southern California, Arizona and Nevada, currently is in what is being called a “time out,” and does not plan to open another new store until July 2, when it will unveil a new store in Manhattan Beach, California.

    KC's View:
    One MNB user wrote in recently, responding to another press release issued by Fresh & Easy, suggested that the chain is all about the press release and not enough about actually delivering on expectations.

    Not sure that this is entirely true. But I will be a lot more interested to see how that new store in Manhattan Beach differs from earlier incarnations…it will tell us much more about Fresh & Easy than a 17-ounce package of mashed potatoes.

    Published on: May 30, 2008

    Meijer has announced plans to offer free pre-natal vitamins in all 181 Meijer pharmacies beginning June 1.

    "As a family-focused company, offering free pre-natal vitamins is just another way we can help the many families that make up our core customer base," said Nat Love, Vice President Drug Store for Meijer. "Just as our free antibiotic program was designed to help our customers get healthy during these tough economic times, offering free pre-natal vitamins will help our customers stay healthy during a very important time in their lives."

    KC's View:
    Women make most of the shopping decisions, so anything a retailer can do to create a relationship with mom – even before she becomes a mom – is a smart move.

    By the way, a very nice reporter from the Grand Rapids Press called me yesterday to get a comment on whether I thought this would drive a lot of customers to Meijer, and I told her that how it probably depended on how many pregnant customers Meijer had, which would depend on how cold a winter it had been in Michigan.

    Which I thought was a pretty funny line, but it didn’t make the Press story. So I’m going to keep using it until I get at least a chuckle.

    Published on: May 30, 2008

    The Dayton Business Journal reports that Kroger has made a “significant” investment in The Little Clinic, a company that operates in-store health clinics throughout the country, including 26 of them in Kroger-owned stores. Details of the investment were not disclosed, but the move certainly gives Kroger a bigger stake in the trend toward operating such clinics, which provide basic health care services, in retail environments.
    KC's View:

    Published on: May 30, 2008

    Fortune has a story about how Wal-Mart is working the current economic downturn to the hilt, looking to create price cuts wherever possible in its quest to generate more sales in its grocery aisles. The conclusion – Wal-Mart has been driving cost cuts throughout the supply chain, from forcing manufacturers to shrink their packaging to sourcing produce locally.
    KC's View:

    Published on: May 30, 2008

    • The St. Louis Post-Dispatch reports that Krispy Kreme – struggling to achieve past glory despite financial troubles, devolving brand equity and a sense that its products aren’t as good as it used to be – is testing the sale of soft-serve ice cream.

    The ice cream is only available in select markets, and goes on the market even as Baskin-Robbins has decided to get into the soft-serve ice cream business.

    • Walgreen said yesterday that it will open three stores in Alaska – its first in that state – next year. The company says that this will give it a presence in each of the fifty states, plus Washington, DC, and Puerto Rico.

    KC's View:

    Published on: May 30, 2008

    • Jeff Adams, who joined Tesco’s Fresh & Easy operation earlier this year, has been officially named executive vice president of operations. Adams most recently ran Tesco’s Thailand business, and in his new job will report to Fresh & Easy CEO Tim Mason.

    • Tops Markets has named Patrick Curran to be the company’s senior vice president of sales and merchandising. Curran is the former vice president of procurement and logistics for Kehe Food Distributors.

    KC's View:

    Published on: May 30, 2008

    • Harvey Korman, who made his reputation on the old “Carol Burnett Show” but made himself immortal (at least for moviegoers of a certain age) as Hedley Lamarr in Mel Brooks’ “Blazing Saddles,” died yesterday at age 81.
    KC's View:
    There are so many great moments in “Blazing Saddles” that is hard to pick out one or two to share here…especially because so many of them involve words not generally used on a family-friendly website.

    But could anyone else have said these lines with the same level of smarmy conviction:

    “My mind is a raging torrent, flooded with rivulets of thought cascading into a waterfall of creative alternatives.”

    “My mind is aglow with whirling, transient nodes of thought careening through a cosmic vapor of invention.”

    Nothing vaporous about Harvey Korman’s talent. Just ask Tim Conway.

    Published on: May 30, 2008

    MNB posted an email the other day from a hog farmer in which he described the trials, tribulations and rewards of his profession…which generated several emails.

    MNB user Lisa Malmarowski wrote:

    I really appreciate that you published the comments from a farmer. Our American farms are disappearing fast and their voices need to be heard.

    I also appreciate that you publish views on pasture-raised animals too. That's the bigger story in my opinion. Pasture raising animals, organic farming and diversified crop planting can really be the future of farming and feeding our country. For years, since the 40's if not earlier, our farmers have been sold the 'better living through chemistry' line. Our individual farms are being swallowed up by large agri-business (for various reasons) and Americans know less and less about where there food comes from, or even in some instances, what their food actually is.

    I spent the day yesterday touring two local suppliers with 6 other people from my company- one an organic cracker manufacturer and one an organic farm. I asked our farmers who their neighbors were and they pointed to the vast fields of corn and said, 'conventional farmers who plant corn'. I asked this question while we stood in a field that was growing no less than 15 varieties of lettuce - a small portion of the 400 plus varieties of vegetables and fruits this 96 acre farm produces each year. He also employs 20 people through most of the growing season. Our farmers were marveling at how much corn their neighbors could produce with chemical and automation and no employees. None of their neighbors lived on the land as they did. And what was really interesting is how much science these farmers apply to their organic farm.

    I do this for a living - I sell natural foods, organic produce, pasture raised meats... but let me tell you, nothing is more compelling that looking around you, listening to the farmers talk about growing the foods we sell in our stores. It's hard work stewarding the land and animals, but it's better for the animals, the plants the land and ultimately for us. And solid science helps them achieve this.

    Farming is not romantic. It's hard work and I'm in awe of how much it takes to grow a single head of lettuce let alone nurture a hog to slaughter. It's time more people understand this and time that more farmers look inward and really think about the animals they raise and the land they leave behind to future generations.

    MNB user Sally Malchow wrote:

    I appreciated Chris Chinn’s letter on hog farming. I learned a lot and was reminded that few, if any issues are black and white. Thanks to Chris for writing it and thanks to Kevin for running it.

    However, one MNB user wasn’t impressed by the hog farmer’s email:

    This is a load of crap… carefully chosen language to make it sound like the animal industry CARES about what the animals actual experience during their short miserable lives. Notice not one word about whether these hogs can turn around or even take a single step in their cushy air-conditioned indoor crates? And not one word about how the animals are killed. They live in misery and die in terror and agony.

    I think this is painting with a very broad brush. I simply don't believe that nobody in the animal industry cares about animals. Even though their actions result in all of eating them.

    Sort of makes me feel guilty about that ham sandwich I had yesterday…

    On a different subject, MNB user Frank Stallings wrote the following email:

    In recognition of the person who suggested a few days ago that you see the positive side of many news stories instead of just the cynical side…. I offer this possible scenario as a consequence of the higher cost of fuel upon our daily lives, both here and abroad.

    Having been brought up in a small town in NC, I fondly remember times when folks didn’t require massive vehicles to take them everywhere… we just walked over to our neighborhood grocery store to shop and walked next door to chat with our neighbors. The only footprint visible was our own in the grass. The premise is that as using fossil fueled transportation gets more expensive (including airplanes) millions of the world’s citizens will react in the only way they know how..... Stop (or at least reduce) doing that!! I’ve already started to commute using my motorcycle (50+ MPG) more often and the bicycle is next!

    The positive side of this scenario is that perhaps, just possibly, many Americans will once again enjoy the fellowship of their own neighborhoods, local block parties, leisurely walks to local parks, and reminiscing about the good-ole days…. The only carbon dioxide being released into the atmosphere will be from the heated debates!

    And I haven’t even touched upon the valued horse as a means of transportation…

    I have a teenaged daughter who probably would think that getting back to horses as a means of transportation would be a pretty good idea…
    KC's View:

    Published on: May 30, 2008

    Give me a break.

    Here’s the first paragraph of a story from Advertising Age.

    “Dunkin' Donuts has pulled an online ad starring Rachael Ray after conservative bloggers suggested the scarf she wore in the ad looked like a keffiyeh, a traditional headdress worn by Arab men that some associate with jihad.”

    You gotta be kidding.

    Some people clearly have too much time on their hands. And too little common sense between their ears. Shame on them, and shame on Dunkin’ Donuts for not telling these people to stick it in said ears.

    Apparently the driving force behind the uproar was some woman named Michelle Malkin, who blogged about it, saying “it was with some dismay that I learned last week that Dunkin' Donuts' spokeswoman Rachael Ray, the ubiquitous TV hostess, posed for one of the company's ads in what appeared to be a black-and-white keffiyeh,” and then went on to describe the garment as “the traditional scarf of Arab men that has come to symbolize murderous Palestinian jihad.” And she noted that the scarf had been “mainstreamed by ignorant and not-so-ignorant fashion designers, celebrities and left wing icons."

    (Note how she implies that at least some fashion designers are promoting “murderous Palestinian jihad” deliberately. My guess is that the only word in her statement that she has any passing familiarity with is this one: “ignorant.”)

    I’d be willing to bet serious dollars that the vast majority of Americans have no idea what a keffiyeh is. Or had no idea – they probably do now, because some people decided to make an issue out of something that clearly was not one. But what they were really interested in was getting ink for themselves, not awakening Americans to the possibility that Dunkin’ Donuts and Rachael Ray are imminent threats to national security, sending coded messages to terrorist cells.

    If there is a message being sent by Dunkin’ Donuts and Rachael Ray, it is this:

    Shop here, not at Starbucks.

    That’s it.

    Dunkin- Donuts released the following statement: “In a recent online ad, Rachael Ray is wearing a black-and-white silk scarf with a paisley design … It was selected by a stylist for the advertising shoot. Absolutely no symbolism was intended.”

    I would point out, though, that the symbolism of Dunkin’ Donuts knuckling under to this pressure is a lot more illustrative than the symbolism of the scarf.

    It is stories like this that convince me that America really has gone nuts and lost all sense of humor, context and perspective.

    It is the same sorts of people who questioned whether Starbucks was engaging in some sort of insidious and improper behavior when it changed the logo on its coffee cups earlier this month. And who suggest that a certain CPG company supports Satanic cults. And on and on and on.

    Sometimes, to paraphrase Rudyard Kipling, a logo is just a logo, and a scarf is just a scarf.

    Forget “Indiana Jones and the Kingdom of the Crystal Skull.” If you want to see some of Harrison Ford’s best work, go check out a short public service announcement he did for urging the preservation of the rainforests.

    Let’s just put it this way. By equating the destruction of the rainforests with chest hair axing, he makes the issue really personal. And painful.

    It certainly made me pay attention. And say “ouch.”

    Chalk up another casualty of high fuel prices.

    The National Retail Federation (NRF) reports that this Father’s Day, consumers plan to spend an average of $94.54, compared to last year’s $98.34. Why the decrease?

    Well, according to NRF President/CEO Tracy Mullin, “When it comes to dad, a simple greeting card and family dinner really goes a long way … Unfortunately, consumers are torn between their love for dad and their need for gas this year.”

    I’m not sure that every dad would agree with me, but as far as I’m concerned, if my kids want to get me a Father’s Day present, a couple of hours peace and quiet that afternoon would be nice. I’d like to stretch out on the couch or the hammock, put on the ballgame, and take a nap with no interruptions. (If they’d like to put a tank of gasoline in the Miata, that’d be appreciated, too…)

    That’s be perfect.

    There have been a number of stories out there about how young people are having trouble finding jobs this summer. Lots of reasons for why this is the case, but almost every major newspaper that I’ve seen has carried at story along this line.

    I do know why at least two young people can't find jobs, however.

    It is because my second son, Brian – who turns 19 tomorrow – has three. He’s working as a delivery boy/stock boy for our local wine store, doing some work as a camp counselor, and continuing to work as a barista at Starbucks. No grass growing under his feet, and I’m immensely proud of him.

    He’s already looking into internship options for next summer, even as he thinks about where abroad he wants to spend at least part of his junior year.

    Right now, I think Ireland, London and Australia are at the top of his list.

    If you live in one of those places and would like a highly motivated intern with a great work ethic, let me know.

    Jimmy Buffett has a new book out, entitled “Swine Not?” Unlike his previous books, this one doesn’t take place on a boat or a beach, but rather mostly is set in a posh New York City hotel as two children attempt to keep the fact that their pet is a pig secret from management, which doesn’t approve of so-called exotic pets.

    It ain’t Faulkner, but it is perfect to take to the beach, and you can pretty much hear Buffett’s voice spinning a tall tale.

    Which he’d almost certainly think is high praise.

    No matter what side of the political aisle you’re on, one thing seems pretty evident this morning.

    Scott McClellan better have a dog. Because he doesn’t have many friends left.

    And what friends he does have may be thinking, “Is he going to write a book about me?”

    Great piece on National Public Radio this week reporting that in Portugal, there is a cork maker who not only has figured out how to make a better cork so that it is far less likely that wine will be tainted – thereby eliminating one of the advantages of screw top wine bottles – but who also is making the point that cork is an environmentally friendly alternative.

    So if we are to believe him – and I’m leaping into his camp wholeheartedly – wine corks are green and effective…and, I would add, have the added advantage of maintaining wine’s essential romance.

    That’s what I call a win-win-win scenario.

    I sense a trend here. The San Francisco Chronicle reports that a Larkspur man runs an organization called ReCork America, which was created by a Portuguese company that manufacturers more than four billion wine corks a year (about a quarter of the total). This company is trying to find ways to recycle corks…though at the moment it has more than 300,000 of them and not a hell of a lot of options.

    I’m doing my best to keep corks out of landfills. We have a big glass container in which we keep all the corks from bottles we’ve emptied. It is sort of like a trophy…though I think one of these days we’re going to need a larger container.

    Speaking of wines…

    It isn’t exotic, but last night with a dish of scrambled eggs and salsa verde, we had a crisp, cold 2005 Kendall Jackson Chardonnay…which was excellent and perfect.

    We’ve also enjoyed a couple of excellent Spanish wines lately – the 2002 Vina Mayor Crianza, and the 2003 Vall de Calas Montsant. Both terrific with grilled meats of almost any kind.

    Speaking of grilled meats, I tried something new this week that I really liked – Aidells makes these great chicken patties with roasted vegetables and parmesan cheese. You can keep them in the freezer and put them on the grill and have a nice lunch in about five minutes…which is my definition of convenience. Good stuff.

    That’s it for this week. Have a great weekend, and I’ll see you Monday.

    KC's View: