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: June 16, 2008

    The Financial Times reports on an interview with Tim Mason, CEO of Tesco’s Fresh & Easy operation in the western US, in which he suggests that when the company brought in American Jeff Adams – who had been running Tesco’s Thailand business – to help out with Fresh & Easy, it was with the long-term goal of having him run a Fresh & Easy division in another part of the US.

    “We have always known we will need more executive vice-presidents in operations because this country is so big that as soon as we go into a new geography, we will need someone to run it, so we have brought him in a little early,” Mason tells FT, which suggests that there are broad hints that Chicago and the Midwest are next on Tesco’s US agenda.

    No specific timetable for further expansion is laid out by Mason, but he does say that it could happen before 2012. And Mason tells “the Financial Times that Fresh & Easy was thriving, in spite of suggestions of poor early results,” according to the story.

    KC's View:
    History suggests that this story will immediately launch a barrage of emails saying that Tim Mason is blowing smoke, and that Fresh & Easy’s approach is problematic at best, and its future is by no means certain.

    I suspect that Fresh & Easy is neither as successful as Mason would have us believe nor as big a disaster as outsiders say. But I’m also fairly certain that the upside potential is significant, and that Tesco is patient and smart enough to make the format work in future times and for future customers. Wal-Mart and Safeway getting into the small store business will only make Tesco sharper, I suspect.

    There’s plenty of room for cynicism and disbelief if you want to engage in it. I continue to believe that Fresh & Easy is more likely than not to be successful.

    Published on: June 16, 2008

    The Financial Times reports that Wal-Mart appears to be positioning its soon-to-be-opened Marketside small-store format as a premium-focused rather than value-driven shopping experience.

    “Job advertisements for the new Wal-Mart business say the stores will deliver ‘unique solutions for time-starved consumers in a premium fresh/convenience oriented format’ – an indication of the pricing position of the new 15,000 sq ft stores,” FT writes. “Wal-Mart has already indicated that the neighbourhood stores will be focused on delivering ‘meal solutions’. Store planning documents indicate that food will be prepared and served on the premises, in contrast to the minimalist utilitarian approach of Tesco’s hard discount Fresh & Easy stores.”

    FT also notes that the Marketside format is the first new concept launched by Wal-Mart in a decade, and comes at a time when Wal-Mart appears to be rejuvenating itself through a low-price strategy that resonates with US consumers at a time of economic recession.

    KC's View:
    This would be an interesting decision, especially in view of the fact that when Wal-Mart tried to move up-market in categories such as fashion, it didn’t work and the company had to backtrack. Doesn’t mean that Marketside won’t or can't work…it just means that the format is likely to represent a real departure, not just a repackaging of familiar elements.

    Which means that Marketside is likely to be more rather than less interesting…and that the battle between Wal-Mart and Tesco will be fascinating.

    Published on: June 16, 2008

    Time has a cover story about the fattening of America’s children in which it talks a lot about the reasons – cultural and biological – that human beings become obese.

    Here the paragraph that, in some ways, was most sobering:

    “Obese boys and girls are already starting to develop the illnesses of excess associated with people in their 40s and beyond: heart disease, liver disease, diabetes, gallstones, joint breakdown and even brain damage as fluid accumulation inside the skull leads to headaches, vision problems and possibly lower IQs. A staggering 90% of overweight kids already have at least one avoidable risk factor for heart disease, such as high cholesterol or hypertension. Type 2 diabetes is now being diagnosed in teens as young as 15. Health experts warn that the current generation of children may be the first in American history to have a shorter life expectancy than their parents'.”

    If that is the problem, here is the Time assessment of the solutions:

    “Victory may indeed come, but it will be only after a long, multifront war, one that … is at last being joined. Parents are fighting it in the home as they learn how to make healthier meals available to their families, set better examples with their own food choices and manage the critical issues of self-esteem that can be so disabling for overweight kids. Policymakers are fighting it as they study the growing body of research showing how everything from income to race to education plays a role in how much kids weigh and as they craft local solutions to solve these local problems. Doctors are fighting it as they deal daily with the ills associated with childhood obesity and work to repair the damage that's been done. And perhaps most important, teachers, mentors and public role models are fighting it as they help kids navigate a culture that fosters fat but idealizes thin and as they teach them that what truly counts is getting themselves as fit as their body type and genes allow—and then loving that body no matter what.

    “Do all these things—and do them right—and the national obesity epidemic just might be brought under control before some kids struggling with their weight today even reach middle age … Americans will continue to love good food; the trick will be to learn to love good health even more.”

    KC's View:
    There was, of course, a reminder last Friday – and, in the news coverage, all through the weekend – of what can happen when a person is overweight, has heart disease, suffers from high cholesterol. (More on this in RIP, below.)

    Here’s what I think is most important. We have to get beyond the hand wringing, and we have to get past the blame game, where everybody tries to pass the buck on the obesity crisis. It seems to me we have to take responsibility for ourselves and our children, and then – in our homes and elsewhere – we have to create a climate that encourages an intelligent approach to food. Not one based on denial and diet, but on smart choices, leavened with the occasional indulgence, and balanced by exercise.

    I’ve said it here before, and I continue to believe that it comes down to six words:

    Eat less. Eat smart. Move more.

    Published on: June 16, 2008

    Loyalty marketing consultant and publisher Colloquy has released its national Retail Loyalty Index, ranking Costco as U.S. consumers' choice for loyalty in the Grocery, Personal Care and Mass Merchant categories.

    According to a statement released by Colloquy, “Across five geographical regions, Northeast, Southeast, Midwest, Southwest and Northwest, Costco was the national winner in the Grocery category. The warehouse club was the first choice of consumers in two regions, the Southwest and Southeast. Publix was a close runner up and H-E-B followed.

    “Costco also was consumers' loyalty favorite among Personal Care retailers, winning three regions and placing in the top three in the other two. Wal-Mart was the runner-up in this category, suggesting that consumers are more price conscious in this sector than others. The highest-rated stand-alone pharmacist in this category was Rite-Aid … In the Mass Merchant category, the discount club Costco garnered most loyalty from bargain hunters nationwide. Target was runner up, followed by Wal-Mart.

    “Drawing a distinction between loyalty and frequency, the Colloquy Retail Loyalty Index shows that Wal-Mart is the dominant U.S. retailer for consumer shopping frequency. Consumers across all categories shop at Wal-Mart more than any other retailer. But Wal-Mart did not register equally high loyalty ratings from respondents to the Colloquy survey. While Wal-Mart's Everyday Low Price (EDLP) tactics have made it the world's number one retailer, other retailers who attempt to emulate Wal-Mart's success will find that the EDLP model of retailing comes at a cost.”

    KC's View:
    If I had to guess, I’d say that one of Wal-Mart’s primary goals during this time of economic hardship in the US – which is helping to fuel its resurgence in a number of categories – should be to convert frequency into loyalty. By doing so, Wal-Mart will be even stronger when times get better. If it doesn’t make this shift, then it will find itself with a cyclical approach to business…which doesn’t serve it in the long term.

    If I had to guess.

    Published on: June 16, 2008

    • In Massachusetts, the MetroWest Daily News reports that “a Worcester man working at the Wal-Mart in Framingham was arrested on charges he bilked the store out of thousands of dollars.” According to the story, the man “had been crediting himself with receipts from customers since February and had amassed more than $11,000 worth of store credit,” and was using the gift cards to buy things like a plasma television.
    KC's View:
    Gift cards? Plasma televisions? Haven’t we all read this story someplace else?

    I just hope that if this fellow is convicted, he gets to spend his incarceration on an Arkansas ranch as opposed to a real jail.

    In fact, there’s an idea. The courts should make a certain convicted felon who is a former Wal-Mart vice chairman to take this new guy in and give him a guest room and have them live together for a while. Maybe they could videotape it for a new reality show on Court TV.

    Published on: June 16, 2008

    Bloomberg reports that “nine people who contracted salmonella associated with raw tomatoes ate at two restaurants that are part of the same chain, according to the head of the Food and Drug Administration.” However, while the FDA is not naming the restaurant or the locations, reports say that the government is focusing on Chicago.

    • The Seattle Post Intelligencer reports that the US House of Representatives Energy and Commerce subcommittee has voted “to subpoena nine companies responsible for analyzing the most dangerous food entering the country as part of an investigation that gained more urgency with an outbreak of salmonella from tomatoes.”

    According to Rep. Bart Stupak (D-Michigan), chairman of the subcommittee, the nine companies refused to submit information voluntarily because they were concerned that breaching confidentiality agreements could leave them open to litigation.

    • A Newsweek story about the salmonella outbreak notes that while not all tomatoes are suspect, “that information doesn't do much to instill confidence in the nation's food supply in consumers, especially with this latest outbreak coming on the heels of last year's nationwide recall of spinach and peanut butter due to contamination.”

    According to the Newsweek piece, “Critics of big industrial farms say that the latest foodborne outbreak has given a boost to the local food movement, which promotes buying produce from nearby farmers (advocates are sometimes called locavores). And it's not hard to see why consumers might make the leap from thinking that if the FDA says homegrown tomatoes are OK, then tomatoes bought directly from small farmers might be the next best thing … When produce is packed and shipped over long distances, there's more time for a bacterium like salmonella to colonize. Once the germs come in contact with a tomato, it takes about 90 minutes for them to attach themselves to the surface. Then, under suitable conditions, the colonies of microorganisms will eventually cover the surface of the tomato … if the tomato has any cuts or bruises, the salmonella can also grow inside the fruit, where it can survive even if the tomato is washed thoroughly.

    “Locavores insist that smaller farms have a safety advantage because they avoid the lengthy multistep packing and shipping process that is used by many corporate farms.”

    KC's View:
    For those of us who love tomatoes, it is shaping up to be a tough summer…because even once the cause of the salmonella is determined and there is clear information about where the risks are, there is going to be a nagging doubt about the safety of tomatoes, at least for a little while.

    In some ways, I wonder if that is the real crisis in food safety. Not the big, headline-getting stories that erupt and land on front pages and in evening newscasts, but the small erosions of confidence that take their toll, adding up in the consumer subconscious, making us wonder about the people and companies that provide our various foods.

    Published on: June 16, 2008

    Dow Jones reports that it appears that Cott Corp., which has been pursuing “a strategy to reduce reliance on soft drinks and expand into better-selling energy drinks, teas, and vitamin-enriched water,” is likely to change course and return to its roots as a private label soft drink manufacturer.

    According to the story, “the company, saddled with about $400 million in debt, has reported losses in its last three quarters, hurt by high input costs (aluminum, plastic, corn syrup), increased competition, and pricing pressures from customers. In February, news broke that Wal-Mart planned to reduce shelf space and merchandising support for private-label carbonated soft drinks in the U.S., including Cott's Sam's Choice, striking another blow to the company.”

    • New York State Attorney General Andrew Cuomo has accused 142 CVS stores and 112 Rite Aid stores in the state of selling expired food and medications. Spokespeople for both companies said they would redouble their efforts to make sure that expiration dates are stringently observed.

    • The Wall Street Journal reports this morning that “by using smaller boxes, Kellogg Co. is increasing cereal prices for the second time in six months, becoming the latest food company to pass along to consumers the soaring prices for ingredients and fuel. On average, cereal-box sizes were reduced by 2.4 ounces, which amounts to a low- to mid-single-digit wholesale price increase, a spokeswoman said.”
    KC's View:

    Published on: June 16, 2008

    Considering that I never met Tim Russert, the longtime moderator of “Meet The Press” who died Friday at age 58, it strikes me an somewhat extraordinary that the weekend – during which it seemed like almost the entire nation mourned his passing – ended up being as sad as it was. But a lot of us seemed to feel that way – that he was an essentially decent man in a profession where not all practitioners behave that way. That he was fair in all of the questions he posed, no matter who was sitting across the table. And, ultimately, that he was a man who defined himself mostly as a father and son … in a way that made – and continues to make - people think about their own parents and children.

    I cannot think of another media personality whose death would have the impact that Russert’s did. His death at such a young age was terribly sad, and leaves a hole in American politics and media that will be hard to fill.

    KC's View:

    Published on: June 16, 2008

    There was a story last week about some outsourcing being done by Supervalu, and an email from an MNB user that complimented the company and its CEO, Jeff Noddle, for showing strong leadership characteristics.

    Not everybody was so impressed:

    It seems that Mr. Noddle gets good press, based on past comments, even you seem impressed with him, Kevin.

    I will agree that Mr. Noddle's words do sound impressive, however, it would seem the individual commenting does not have personal knowledge of working for Supervalu or any of its banners, especially those acquired through the Albertson's acquisition.

    Talk is cheap unless you are prepared to follow through, something that Supervalu lacks when it comes to its associates. They talk a good game, but their actions do not back up their words.

    I have personally seen one Supervalu banner stripped of superior technology and most of its IT department, to assimilate to the Supervalu way (outsource, cut costs, and limit the input of local management, regardless of consequence, and I assure you there are consequences that can be seen in the shrinking profits and customer perceptions of said banner).

    I have seen two office buildings with 100s of associates systematically let go and the remaining condensed to effectively fill the space of one floor of one building. Most of these very long time (some 20-30+years of loyal service) associates were given a six to eight week notice of their job elimination and were required to stay and in most instances train associates at different locations to do their job or forfeit any severance they may have been offered. That severance being the only 'respect' afforded to them, where's the dignity? The expectation for the remaining associates is to do the same work with less people and substandard technology.

    I absolutely understand the need to eliminate duplicate efforts when combining companies, but let's call a spade a spade and not use the all too popular "synergy" buzzword when assimilation is the only desired result.

    In the first months of the acquisition similar words were spoken by Mr. Noddle and the general feeling was one of optimism, those feelings have been replaced with frustration and cynicism throughout.

    In short, don't believe everything you hear/read in the press, although "thoughts like these from your leadership" are a great place to start, the only thing that really matters are the actions from your leadership.


    These are surprising sentiments, to be honest. I have heard from a number of Supervalu employees over the years about kindnesses and loyalty big and small demonstrated by the company and by Jeff Noddle specifically. I understand that you can't please all the people all the time…but I still find these words to be surprising.




    On another subject, one MNB user wrote:

    I loved the piece about Food Lion going local by supporting local producers.

    Right here in CT, Tri-Town Foods launched Ledyard CT's farmers' market in its parking lot last Friday and will be supporting this venture all summer long (Fridays 3-6). I attended the opening where a ribbon of verbena was carefully cut by the Ledyard mayor to officially open the market. Farmers from all over CT were there selling fresh chevre, local meats, goat soaps/lotions, milk, tomato sauces, fresh salsa and whatever produce was harvested so early in the season. The community was buzzing about their farmers' market and Tri-Town owner, Kevin Brouillard, watched the crowd and smiled after having put some much work into making it a huge success. I actually had him stand next to the "CT Grown" sign for a photograph -- being "CT Grown" himself (smile).

    It's great to hear about Food Lion's local initiatives -- I applaud them -- but it's even better to see a local, independent retailer supporting his local producers. That's just good business all around.





    Regarding the ongoing tomato story, one MNB user wrote:

    Two things about the tomato disaster going on.

    First of all, it makes a powerful argument for eating locally -- yesterday morning, the Tampa Bay area was cleared by the FDA as NOT being the source of the outbreak. Good thing -- I went this past weekend and picked a 5-gallon bucket full of fat, juicy tomatoes, right off the vine -- for pennies a pound. Most of it's already been made into jars of salsa and stacked in the pantry (yeah, there's still a few of us who "put up" food -- although I confess it's the first time I've done so in years) -- but the rest has been made into salads...BLTs...and just eaten sliced with a little sea salt.

    My point is that I KNOW where those tomatoes came from. I KNOW how they've been handled (perhaps I should say lovingly cared for?) since they were picked. I also know that not everyone has you-picks around, but it's very possible to buy from local farms on a regular basis for a decent part of the year in a pretty big part of the world. (And what about the off months? Well....your grandma canned things to carry the family over the winter...)

    Second, we need all those varieties -- not only for the biodiversity needed and referenced by yesterday's reader, but for different reasons -- one variety that grows well in Maine probably won't grow well at all in Florida. Different species are better suited to different uses, too -- you probably wouldn't make a thick pasta sauce from beefsteak tomatoes (although you could) -- any more than you'd sit down to a BLT made with Romas (again you could, but it just wouldn't be right).

    Different can be good.





    On the subject of legislation being considered in California and New York that would require restaurants to provide nutrition information to patrons – and the seeming inconsistency of my thinking that fast food joints ought to be held to a different standard than fine dining establishments – one MNB user wrote:

    I like this dialogue a lot because more than anything it invites me to explore thoughts that I wouldn’t otherwise consider. There are a lot of inconsistencies when it comes to things that are “necessities” and things that are “luxuries / indulgences”. McDonalds boasts it’s Billions and Billions served and all those people deserve the transparency of knowing what they are eating. All of McDonald’s products are for the most part…mass-produced.

    When you go to a fine restaurant, you are going there to enjoy the art form more than to provide sustenance. Inherently, you know that there are too many calories and that they are cooking with “real” butter…=) The culinary experience is what you expect at a nice restaurant…cheap food is what you expect at a fast feeder.


    MNB user Dustin Stinett wrote:

    While I don’t think any restaurants or fast feeders should have to post calorie counts etc. on menus (though I have no issue with a general posting in the lobby, vestibule, waiting area, whatever) I think I understand the difference why a sit-down restaurant is different from a fast food joint (even if it has seats)—at least for my family and friends.

    A restaurant is a place we go every once in a while; a place to gather to socialize and maybe—with any luck—celebrate something. Going out to a restaurant is a special event.

    On the other hand, fast food joints are driven through and—if they had it their way—are a place we’d eat more than once a week; maybe more than once a day.

    At least, that’s what I think. But, of course, I also don’t consider going to a Denny’s something I haven’t done in over a decade—an event.





    On the subject of bars and restaurants trying to pass off 14-ounce beers as pints, one MNB user wrote:

    First off, falsie is a hysterical and apt name for a pint, that isn't a pint.

    What I don't understand is why a restaurant or bar wouldn't continue offering a true pint, raise the price, but then offer a 1/2 pint (or so size) make it more than the half the price and give customers an option. I, for one, would like to be able to have a smaller portion of beer so I could either watch my caloric intake OR try two different beers without getting tipsy.

    People... there are opportunities here!


    Agreed.




    And, chiming in on last week’s discussion of the economy, one MNB user wrote:

    Anyone that thinks the economy is going to rebound after the election is sadly mistaken.

    I concur.
    KC's View: