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    Published on: July 21, 2008

    The US Centers for Disease Control & Prevention (CDC) said last week that 25.6 percent of Americans are clinically obese, up from 24 percent in 2005. This despite the fact that there has been enormous attention paid to the nation’s burgeoning waistline over the past few years.

    The fattest states in the US, according to the CDC: Alabama, Mississippi and Tennessee, with 30 percent of adults there said to be obese.

    The slimmest: Colorado, where just 18.7 percent of people are obese.
    KC's View:
    One has to wonder why, with all the attention paid to the nation’s obesity problems over the past few years, why the numbers keep getting worse.

    Is it because all the various initiatives that have been launched haven't had enough time to be effective?

    Is it because people are making ill-informed decisions about how to address their weight problems?

    Is it because the food industry isn’t doing enough to inform and assist its consumers to lose weight?

    Is it because consumers really want a magic bullet that will solve their weight problems without them actually having to do any work?

    Is it because Americans simply don't give a damn?

    Or some combination of the above.

    Next steps have to depend on how we evaluate the process to this point.

    Published on: July 21, 2008

    The Boston Herald reports that Ahold-owned Stop & Shop “will unveil a new logo and redesigned store uniforms in addition to expanding its prepared food section and further rolling out shopping assistance technology.”

    While the new logo has not yet been unveiled, it is said to be brighter and with a slightly different shape.

    According to the Herald, “Stop & Shop’s range of prepared foods will grow significantly over the next two to three months … The chain also is testing a product line called ‘Choose and Cook,’ a refrigerated collection of fresh, color-coded food ingredients - meat, poultry or seafood, a vegetable, starch and sauce - that can be combined into a meal for four in 20 minutes. The line, which comes with instruction for meals such as sirloin beef teriyaki and shrimp pad thai, is widely available in the stores of Stop & Shop’s sister companies in Europe. Stop & Shop is owned by Amsterdam-based Ahold.”

    The company says that the overall goal is to de-clutter its stores.

    KC's View:
    To my mind, as someone who lives in Stop & Shop’s marketplace, the company has been one of the least innovative retailers in the marketplace…the chain just doesn’t provide what I would think of as being compelling reasons to choose its store instead of another one. (There’s been a price rollback program that has been well advertised, but I can do better going to Costco or buying from Amazon.com.)

    So I hope, for Ahold’s sake, that things are changing. Because a stagnant position in a fast-changing consumer marketplace just isn’t tenable.

    Published on: July 21, 2008

    The Seattle Times reports on an Associated Press-Ipsos poll conducted in the wake of the salmonella crisis that has been in the headlines since April, causing more than 1,200 people in 42 states to be sickened:

    • “Nearly half of consumers have changed their eating and buying habits in the past six months because they're afraid they could get sick by eating contaminated food.”

    • “While the poll found that three in four people remain confident about the overall safety of food, 46 percent said they were worried they might get sick from eating contaminated products. The same percentage said that because of safety warnings, they have avoided items they normally would have purchased.”

    • “They also overwhelmingly support setting up a better system to trace produce in an outbreak back to the source.”

    • “Women, who do most of the shopping, were more concerned than men. For example, 39 percent of men said they were ‘very confident’ that the food they buy is safe, but only 23 percent of women said they felt that way.”

    KC's View:
    Define “confident.” Not sure what it means when three out of four people say they remain confident in the food supply…but two out of four people say they are changing their food choices because of food safety concerns.

    Published on: July 21, 2008

    Interesting piece in Advertising Age suggesting that with food safety concerns about tomatoes, peppers and beef flooding the media, a number of fast food chains have decided to use “quality” as a marketing touchstone to reassure once and future patrons. “Amid the confusion, fast-food players, including McDonald's, Burger King and Wendy's, are lining up to explain why their food is fresh and reasonably healthy,” the story says.

    As Ad Age notes, there is reason for some concern: “A 2006 E. coli crisis at Taco Bell cost the company $20 million in fourth-quarter operating profits alone. A New York City rat infestation followed in early 2007, and same-store sales took several quarters to recover.”

    KC's View:
    Not sure we’re there yet, but it certainly is legitimate to argue that the food industry is on the verge of a credibility crisis.

    Published on: July 21, 2008

    The Jacksonville Business Journal reports that five months after receiving a complaint from People for the Ethical Treatment of Animals (PETA), Winn-Dixie Stores “plans to improve farm and slaughter conditions for some chickens and pigs in its supply chain.

    “A PETA news release reports that the Jacksonville-based grocer plans to give purchasing preference to suppliers that use or switch to controlled atmosphere killing, and begin buying 5 percent of its turkeys from suppliers that use this method by the end of 2010; give purchasing preference to suppliers that don't use gestation crates, which are restrictive metal enclosures that confine pregnant pigs, and increase the total amount of pig meat that it buys from crate-free facilities by 5 percent over each of the next three years; and give purchasing preference to producers of cage-free eggs, increase the amount of cage-free eggs that it sells to 4 percent by the end of 2009 and 5 percent by the end of 2010, and work toward reaching 10 percent within the next five years.”

    In exchange for the improvements, PETA has backed off plans to submit an animal rights proposal at Winn-Dixie’s next annual meeting.

    KC's View:
    In other circumstances, this might sound a little like extortion. But I guess not here.

    Published on: July 21, 2008

    Business Week reports that “having already teased out costs through greater automation, shrinking inventory, and tighter logistics, manufacturers are now looking for new ways to improve, or just preserve, profit margins. Although they have no choice but to pass on higher costs to customers, they are now able to do it in smarter ways—by raising prices on only the least price-sensitive items instead of whole product lines or tailoring prices to various levels of demand in local markets, for example. Foodmakers are also tweaking product presentation and packaging in an effort to boost sales volumes.”

    The good news for food marketers, according to the piece, is that as prices go up and the US economy continues to weaken, shoppers are opting for at-home meals as opposed to eating out – which has provided new opportunities for manufacturers and food retailers to create new offerings relevant to the changed circumstances in which consumers find themselves.

    Beyond technology solutions that help marketers be more precise about the products they offer and the prices they charge there are other steps being taken by marketers:

    • Offering recipes and other kinds of food preparation info to make things easier for consumers.

    • Creating high-end product alternatives that can be sold for more money at higher margins…and that will satisfy shoppers’ aspirational instincts while keeping them out of restaurants.

    • In addition, organic foods are believed to be another way of capturing at least of the food dollars being spent by members of Generation Y.

    KC's View:

    Published on: July 21, 2008

    Peter Brennan, vice chairman of Daymon Worldwide and the first president of the private label powerhouse, announced that he will retire on January 2, 2009 after a 35-year career with the company. He will remain on the Daymon Board of Directors.

    In honor of Brennan’s contributions, Daymon has established in his name an annual scholarship for “a deserving Daymon associate to continue his or her education for two years fully paid for by the company for either a Master’s Degree, completion of a Bachelors or any other educational program that enhances the contribution that the award recipients will make to Daymon Worldwide.”

    KC's View:

    Published on: July 21, 2008

    The Direct Marketing Association (DMA) last week released a study saying that “text messaging is by far the most often cited mobile marketing method — accounting for 70 percent of consumer mobile marketing responses — compared to a 41 percent response rate to surveys and a 30 percent response rate for e-mail offers.

    Among the results cited in the study:

    • About one-quarter (24 percent) of those surveyed have responded to a mobile offer.

    • One-third of the group that did not respond to any mobile marketing reported that they had never received an offer.

    • 71 percent of people who respond to mobile offers have data plans.

    • 21 percent of mobile marketing responders indicated that they responded to three or more offers per month.

    KC's View:
    Seems to me that there is an enormous difference between unsolicited mobile marketing offers and those from marketers to which consumers have given permission.

    I think I speak for a lot of people when I say that if I ever start getting unsolicited mobile marketing messages on my cell phone, and I’m going to be ticked off. Really, really ticked off.

    Then again…I concede that I am not the target market for these messages.

    Published on: July 21, 2008

    The Wall Street Journal reports that from small towns to big cities, customers and government officials are coming together to see if they can convince Starbucks’ leadership to change its mind about at least some of the 600 stores it plans to close.

    “It is an unusual twist in the saga of Starbucks, one of the fastest-growing retailers of the past decade,” the Journal writes. “For years, Starbucks gained attention when a town didn't welcome it. Independent coffee shops complained about the big-muscled competition, and residents bemoaned the erosion of local character.

    “But ever since Starbucks announced this month that it would close 600 stores by early next year, as its business struggles, the rallying cause has switched to saving these endangered locations.”

    Last week Starbucks identified the 600 US stores that it plans to close as it restructures the company. Forty-four states will be affected, with 88 units to be closed in California, 59 in Florida and 57 in Texas.

    The company has not said how it will handle such entreaties.

    KC's View:

    Published on: July 21, 2008

    • In the UK, the Independent reports that Tesco CEO Sir Terry Leahy has said that he will support legislation that would create a government “supermarket czar” that would oversee and guarantee that relations between retailers and manufacturers are fair and equitable. According to the story, such legislation will not be needed if all of the UK’s major grocery chains agree to the creation of such a position…but in the event that such unanimity can’t be achieved, Tesco and Leahy seem willing to accept the inevitability of such a position.

    USA Today this morning reports that the US Food and Drug Administration (FDA) is considering the loosening of restrictions on seafood imported from China, saying that audits of Chinese seafood processors show that controls and quality have improved.

    The FDA decided to limit such imports after it was discovered last year that a number of seafood products contained chemicals that are banned in the US.

    • The Atlanta Journal-Constitution reports that Whole Foods plans to sell “Earth-friendly” toys during the 2008 end-of-year holiday season - in part a reaction to concerns that emerged last year about lead and other carcinogens in imported toys.

    KC's View:

    Published on: July 21, 2008

    • Nash Finch said that its Q2 sales were $1.04 billion, a decline of 2 percent compared to $1.06 billion in the same quarter of 2007. Net earnings for the period were $10.1 million, up from $9.6 million a year ago.
    KC's View:

    Published on: July 21, 2008

    Responding to our coverage and commentary about the tomato and salmonella crisis, and our calls for greater transparency and traceability systems, MNB user Tom Stenzel, CEO of the United Fresh Produce Association, wrote:

    The produce industry and United Fresh Produce Association in particular are strong proponents of making our traceability systems the most efficient possible. We have a major initiative underway to do just that. But you make a mistake to link the CDC/FDA confusion over tomatoes to traceability. The problem was in the initial statistical correlation that showed sick people were more likely to have eaten tomatoes than people who had not gotten sick. The resulting rush to judgment then impugned the entire tomato industry, and FDA began tracing back where the tomatoes came from that sick people ate. Problem was that there was no common source where contamination may have occurred. Some sick people ate tomatoes from farms in Florida. Some sick people at tomatoes from farms in Mexico. There wasn't even a potential common packing or repacking facility for all those tomatoes.

    The fact is that traceback worked -- government just took too long to recognize that the evidence was proving tomatoes were not coming from the same source. And remember, with the DNA fingerprinting of Salmonella these days, scientists know that these illnesses all came from the same identical source.

    It wasn't tomatoes, and good traceability helped vindicate a commodity that had been mistakenly blamed.


    Another MNB user wrote:

    As with the tomato situation you have to first know what to trace, before you can use traceability. There was a lot of bad science used during this investigation. There was a rush to judgment on the tomatoes, even while there were indications that peppers and cilantro might be involved. Some folks think this could have been solved sooner. I believe there is a much higher degree of traceability in the industry than you think. Once notified of the problem we were able to trace back our tomatoes very quickly and make all the mandated moves, such as notifying our customers, etc. In this case all of those actions were a waste of time and money because we were tracing the wrong item. They traced all the tomatoes back, it just wasn’t the problem, again bad science.

    If every item were indeed traceable, (pretty hard once it stirred into salsa) this would not stop people from getting ill occasionally. You can’t inspect every piece of meat or produce. Focus needs to be put on good farming practices, handling and logistics and cold chain integrity. Never in the history of the industry has all this been better than it is right now. But as this incident shows us we need to get better.


    And another MNB user chimed in:

    You’re right and you’re wrong. It's very simple. Produce is shipped in open containers, through a number of environments. All these environments are points of entry for pathogens and bacteria.

    There can be absolute accountability by shippers, but when shipped in open containers, through a contaminated system...simply impossible.

    Evidence: When bagged spinach was infected with E-Coli, FDA was able to trace the source very quickly. That company who packed the contaminates spinach is now out of business.

    Oh by the way, what about local produce at farmers markets, which is never inspected...

    Fresh Produce is complex and the public knows very little about how food gets from plant and tree to the table..spend some time at companies like Dole Foods or T & A, bet you will be amazed…


    MNB user Dan Brady wrote:

    Traceability alone will not solve the problem. LINKING traceability will. Company to company transparency is the only way that it can be accomplished. Industries must band together to solve the problem, and retailers MUST insist on a certified chain of custody. The only way for this to work is if it truly affects a company’s profitability i.e., if a company cannot provide a certified trail of accurate traceability (farm to fork), then don’t purchase produce from that supplier!

    MNB user John Welsh wrote:

    Because of the hair-trigger reaction by the governmental agencies, many U.S. and Mexican farmers lost their shirt when tomatoes were immediately blamed for the salmonella cases. It is obvious that millions of dollars were lost, and some farmers may not survive.

    The agencies need to be damn certain of who or what is to blame before they make their announcements. Further, somebody or some agency needs to search out just how much farmers lost because of their error, and make satisfactory restitutions. Of course, they won't.

    It seems like we've been down this road before. I can't help but wonder if some of those intelligence people who reported the WMDs in Iraq are now working for the FDA or the Department of Agriculture.


    Another MNB user wrote:

    We live in the heart of tomato country here in central Florida. As such, many of our friends and neighbors are farmers or are otherwise economically tied into the tomato industry here.

    Great -- they've eliminated tomatoes as the source of the salmonella outbreak. But this all happened at the peak of the harvest here -- what do we do about the farmer who lost 45 TRUCKLOADS of tomatoes because they rotted in the cartons because there was no one to take them? What do we do about the families who went without a paycheck for a couple of weeks, because the packers were laid off because there were no customers to ship tomatoes to?

    This hit our local economy very hard -- and folks here got off easy, because the FDA cleared tomatoes from our area very soon after the ban was imposed. To be fair, some of the bruising was eased a little, because with this being one of the few places from where the tomatoes were declared safe, they did manage to pick and ship the rest of the harvest. But the losses were very real, and were not made back.

    I cannot imagine how badly hit the South Florida growers were hit – and how utterly devastated the growers in the West must be.

    This is absolutely irresponsible of the FDA -- they have the obligation to keep the American public well and healthy, but they also have the obligation to make sure everyone is informed, and to not make knee-jerk decisions that will cripple entire industries when they're not sure what the culprit really is.

    And yes -- it's yet another powerful argument for clear and precise labeling.





    On the subject of the Starbucks closings, MNB user Mehgan Belanger wrote:

    I, like you, breathed a deep sigh of relief this morning when I saw my Starbucks was not on the chopping block.

    However, I thought it strange that people would petition to keep the stores. In my eyes, these people who love the black stuff as much as I do should hope that the stores are replaced with a local coffee shop – an increasingly hard-to-find place these days.

    While I love Starbucks, there's something to be said about a local coffee shop, one that you can call your own. Mine is The Fine Grind, in Little Falls, N.J.

    There, you'll find a broad mix of clientele, from baby boomers to college students, Gen X and Y, people on first dates, celebrating anniversaries, the list goes on. Local artwork is sold on the walls, board games are stacked on a bookshelf, there's a live music jam once a week and the music playlist is always eclectic -- all of it is exactly what you'd expect in a local coffee house.

    The coffee menu is more than six pages long, with all the coffee classics, along with unique offerings like "The Vanilla Snuggle: A hug in a mug." (Oh, and the lava cake is to die for!)

    Ok, I'm trying not to sound like an advertisement, but it's an amazing place, and it’s clearly the "third place" that Starbucks tried (and has failed as of late) to generate.

    I think those people who would petition Starbucks should embrace its departure as an opportunity.


    And MNB user Rob Rice wrote:

    Seems to me that consumers promoting petitions to keep their local Starbucks open are a day late and a dollar short. If they (and their fellow local consumers) had voted with their patronage and dollars, they would not be spinning wheels now promoting petitions instead. This does not appear to be about saturation as much as it appears to be about “pruning unproductive fruit-bearing branches from the tree”.




    On the subject of the economic plight of the catfish industry, MNB user Steve Lutz wrote:

    No doubt the rising cost of fuel and food have hurt the catfish producers, but there are other larger factors at work. In our research (2007/2006 national supermarket sales trends) for a presentation at the Boston Seafood Show earlier this year, we found very clear evidence that the catfish industry was already in significant trouble. In short, retail seafood sales were growing, catfish was declining…all prior to the heavy hits from fuel and input costs. Catfish retail volume declined by 2.1% in 2007.

    Moreover, in 40 of the top 50 US markets, catfish contribution to total supermarket seafood sales also declined. Many of the markets with the largest declines were core catfish markets in the deep south. Where are the catfish sales going? Tilapia and Salmon. The big problem for the catfish industry is that core consumers (and retailers) in many key markets have found replacement farm-raised fresh fish products. While they quote the study from Mississippi State U. saying after these input costs went up, “the economics went awry”. It appears to me that the bigger problem is their customers went away first.





    Responding to our positive comments about A&P and its CEO Eric Claus last week, MNB user Ronald Berry wrote:

    I am sure you don’t remember, but a few years ago when Eric came on board and they rolled out their new format strategy I sent you a note after one of your rants on A&P. I commented how good a store the new format was. At the time I was working with A&P and maybe was biased but a good store is a good store. I am glad to see your comments about A&P.

    Hopefully they can keep up the performance…





    Amid all the food industry commentary, I often find ways to insert a little baseball action…and I usually rant about the stupidity of the designated hitter rule. Last week, I joked about creating a new t-shirt that would say “Real Men Don't Play Designated Hitter.”

    Which led MNB user Roy St. Clair to observe:

    I would like you to say that to David Ortiz…or I would like to be there when he sees you wearing the t-shirt.

    Excellent point.

    But I stand by the basic sentiment – that baseball played with a designated hitter isn’t real baseball.




    And finally, referring to last Friday’s wine recommendation in “OffBeat,” MNB user John Ziegler wrote:

    Cheers on you recommendation of Peterson's 2006 Zero Manipulation. It is one of my personal favorites. We are blessed to have the largest distributor of Peterson wines in the country just half a mile down the street; Wine Discount Center. If ever in Chicago it is a great store to check out and it is right near Webster Wine Bar, a great cozy place for unique flights and great medium-priced glasses.

    Also, we had a chance to have a wine dinner with Fred Peterson and his winery is on the top of our list when we get back west again. He is a man that reminds one that the best part of drinking wines is all of the stories that go with it.

    KC's View: