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    Published on: September 5, 2008

    Ad Week reports that Walmart is rolling out a new and improved version of its in-store television system, dubbed “Walmart Smart Network,” to 300 supercenters in time for the end-of-year holidays. By 2010, the retailer expects the system to be on 27,000 screens.

    According to the story, “the new network will be powered by Internet Protocol Television, allowing content and advertising to be monitored and controlled down to a single screen … (and) is the result of two years and $10 million in research and development to find the ideal placement of screens and optimal programming to engage consumers.”

    According to the story in the Financial Times, “Wal-Mart's programme was developed with $10m of funding from its main advertisers, and is part of a broad push in retail to develop ways of measuring the impact of in-store messages, such as ‘gaze-tracking’ devices and surveillance cameras that track shoppers' movements. Consumer goods companies are increasingly interested in attracting customers with brand messages that reach them as they shop, as traditional advertising on TV and in newspapers declines.”

    "We've built a network tailored to the way consumers shop our stores, delivering helpful, custom content closest to the point of decision that helps them shop smarter," Stephen Quinn, Walmart’s chief marketing officer, tells Ad Week. "The Smart Network is intelligent too, because every screen and every message has a purpose and we will be analyzing point-of-sale data on an ongoing basis to deliver a shopper-centric communications platform."

    KC's View:
    This kind of targeted marketing, taken to the store an even department level, has the potential of being a real sea-change in how retailers and advertisers reach out to shoppers. It is just one step in a much longer journey…but an important one that is yet another marker in the gradual and yet inevitable decline of mass media.

    Published on: September 5, 2008

    The Wall Street Journal reports that twenty food companies – including Smithfield Foods, Kraft, PCC Natural Markets and Unilever – have responded to a survey by the Center for Food Safety and committed to not knowingly using milk or meat from cloned animals in their products.

    According to the story, “Polls have shown most consumers are uncomfortable with the idea of eating products from cloned livestock, whether for health, ethical or environmental reasons. At the same time, products from the offspring of cloned animals are trickling into the food supply. Currently, the best way for consumers to avoid such foods is to eat organic food.”

    The US Food and Drug Administration (FDA) has ruled that in its opinion, meat and milk from cloned animals are as safe to consume as traditional food, and US regulators no longer are asking companies to voluntarily refrain from selling cloned food products. In addition, there have been several reports of cloned food already having entered the food chain.

    The FDA has denied a request by the Center for Food Safety for mandatory labeling of cloned foods.

    KC's View:
    I continue to believe that shoppers ought to have the right to decide whether they want to consume milk and meat from the offspring of cloned animals.

    Published on: September 5, 2008

    USA Today this morning reports that the Mexican government has “voluntarily suspended shipments of meat and processed poultry to the United States after U.S. officials raised concerns about the quality of Mexican food processing and inspections.”

    According to the story, there are “systemic problems with sanitation controls and recordkeeping,” which led to the request by the US Food Safety and Inspection Service. An audit currently is being conducted, and it is unknown how long the suspension will last.

    KC's View:

    Published on: September 5, 2008

    The BBC reports that an analysis by the Nutrition Journal of four popular diets - Slim Fast, Atkins, WeightWatchers and the Eat Yourself Slim diet – concludes that they all essentially work by reducing calorie intake while providing necessary nutrients.

    However, with one exception – WeightWatchers – the diets generally result in people eating fewer fruits and vegetables, which isn’t necessarily good for the people who are on the diets.

    KC's View:
    Still skeptical here. Diets are tactical, changes in lifestyle are strategic.

    Published on: September 5, 2008

    Greek police say that a group of anarchists that they are calling ‘Robin Hoods” have committed a series of raids in which they storm a Greek supermarket while wearing hoods, steal pasta, rice and milk, and then hand out the food to poor people on the street.

    Police say that the thieves have never stolen money or hurt anyone, and that when they’ve been seen without their hoods, they appear to be mostly women.

    The raids are seen as a grass-roots reaction to rising inflation and high food prices.

    KC's View:
    There’s a movie in this story…as well as a cautionary note about broader issues facing consumers and the food industry.

    Published on: September 5, 2008

    Agence France-Presse repots that the Mexican Supreme Court has “compared the practices of US retail giant Walmart in Mexico to employer-worker relations during the dictatorship of former president Porfirio Diaz. Diaz served as president and absolute ruler of Mexico from 1877-80 and from 1884-1911.”

    The case was brought by a Walmart employee who complained about being partially paid in vouchers that could only be used in Walmart stores.

    The AFP story reports: “The practice of vouchers ‘that come from the worker's salary only to be exchanged in the management company's establishment is similar to what happened in old company stores (that existed during Diaz's dictatorship),’ the court said in its decision.

    “The only difference was that under Diaz's system, workers had to pay a high price for the products they bought with their vouchers, the court added.

    “But, in both cases, ‘the cost of the respective discounts were absorbed by workers, not bosses,’ the court said.

    “The company stores under Diaz's dictatorship were abolished under the 1917 constitution.”
    KC's View:

    Published on: September 5, 2008

    • IGA announced that three retailers have been selected as the IGA USA Retailers of the Year: Bob Buonomano, Bob's Windham IGA, Willimantic, Conn.; Allen Milam, Milam's Market IGA #1, Miami, Florida; and Rick Stewart, Susanville Supermarket IGA, Susanville, Calif.

    • The Great Atlantic & Pacific Tea Company, Inc. (A&P) announced a partnership with 4D Pharmacy Management Systems, Inc. that the company says will enable it to administer employer group prescription drug benefits through its Live Better! Wellness Program. Employer groups will have access to 4D’s nationwide network of over 60,000 pharmacies and as well as special incentives at the company’s participating banner store Pharmacy Centers. The Live Better! Wellness Program begins managing pharmacy benefits on January 1, 2009.

    KC's View:

    Published on: September 5, 2008

    • Walmart said that its August sales were up 8.7 percent to $30.67 billion, with same store sales that were up three percent.

    • Target Corp. reported that its August sales were up 3.1 percent to $4.85 billion, on same-store sales that were down 2.1 percent.

    • Longs Drug Stores Corp. said that total retail drug store sales for August increased 0.9 percent to $364 million from last year. Same-store sales dropped 1.4 percent.

    KC's View:

    Published on: September 5, 2008

    …will return.
    KC's View:

    Published on: September 5, 2008

    Last night featured the opening game of the new National Football League season, and the defending world champion New York Giants defeated the Washington Redskins 16-7.
    KC's View:

    Published on: September 5, 2008

    There was a great radio ad that I heard the other day for Boar’s Head cold cuts, in which the company directly challenges the fast food sandwich chains (like Subway). The message is simple – while Subway may pile up the meat and cheese, Boar’s Head allows you to spend less money on a higher quality product.

    It is a compelling message. And it is good to hear someone actually challenging the fast food chains on what some what would perceive as their strength.

    BTW…there was a story in the Boston Globe the other day about how a number of companies are coming up with new options for brown-baggers. According to the story, “research indicates more people than ever are bringing their lunch to school and work, for economic, nutritional, and environmental reasons. What they bring that lunch in now includes reusable sandwich wraps that wipe clean, bowls outfitted with yogurt-holding ice packs, and containers with serious style.”

    Retailers ought to focus laser-like on these sorts of products, challenging the supposedly more convenient fast food chains on a variety of levels.

    I haven't used this line in a while, but it seems appropriate:

    Compete is a verb.




    I also like Walmart’s new commercials in which it, very simply, explains why its frozen pizzas and its discount prescription program both save shoppers a lot of money. The ads aren’t anything fancy, but they work well.




    Speaking of commercials, have you seen the new Jerry Seinfeld/Bill Gates ad for Microsoft? You know, the one that is supposed to be the tonal response to the Mac/PC ads that have done so much for Apple?

    I love Seinfeld, and I respect Gates…but this commercial is awful. It has moments of being funny, but it really doesn’t make any case for Microsoft products.




    There was a report the other day from an organization called Rabobank that, in essence, said that because of inflation and the troubled economy, food retailers need to identify non-traditional differentiation strategies beyond reducing their prices.

    Really?

    I may be wrong about this, but it seems to me that this is a refrain that has been sounded constantly on MNB since this community went online almost seven years ago. And not just by me … but by Michael Sansolo, and by hundreds of MNB users who have said much the same thing over the years.

    But here’s the thing. Non-traditional differentiation beyond price is almost always a good idea if you are not a purely price-driven retailer. It shouldn't just take a recession or some other kind of economic decline to make you think that way.

    Retailers that wait until now and suddenly hold a meeting to discuss possible methods of non-traditional differentiation have waited far too long. Anything they do will almost certainly be tactical and artificial, not strategic and authentic.

    And, by the way, we’ve been saying that here on MNB for almost seven years, too.




    Check out two cartoons in the September 8 issue of The New Yorker, on pages 42 and 45. They’re just plain funny…and the first one is actually relevant to the food business.




    I promised you some wine recommendations when I went off on vacation, and this is one guarantee I’m happy to deliver on. There were four terrific wines that I tried during my time off…

    Two excellent whites… the 2006 Scurati Sicilia Bianco from Italy and the 2004 Mosaic Chardonnay. Both were wonderful, and I especially liked the latter, which lived up to all of the superior wines made by the Mosaic vineyard.

    My friends at Food Lion sent me a couple of bottles of their award-winning private label wine, the 2007 Surf Point Pinot Grigio from California, and I have to tell you that this is an outstanding summer white – bright and fresh and utterly delightful. Excellent work by Food Lion…my compliments to the vintner.

    Finally, I had a really unusual wine from Australia - the 2007 Black Chook blend of Viognier and Shiraz. I’ve never had this particular blend before, and found it beguiling…I can’t wait to have it again.




    I know I also promised some movie reviews, but I’m afraid that during my time off I never got to a movie theater. Part of the reason was that the Mets were playing well, and I have to admit to spending more time than I should have watching the Democratic Convention on television. And then the end of the week got complicated when my 14-year-old daughter had to have an emergency appendectomy…she’s fine now (if a little sore), but there’s nothing quite so scary as watching your child being wheeled into the operating room.

    This also may be a corny thing to say, but the worst part of the experience was the next few days when she was miserable because of the after-effects…you don't realize how much a child’s smile means to you until you’ve had to go a couple of days without seeing it.



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

    Sláinte!!

    KC's View: