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    Published on: September 9, 2008

    As always, a story about Tesco’s Fresh & Easy stores yesterday generated plenty of email…

    MNB user David M. Metz wrote:

    An old economics teacher once told his class that when starting a business, it takes at least 3 years before you know whether or not your business will succeed or fail. The first is in the planning and execution stages of ones Ideas. One must choose people for their company that will support their Ideas and help them make the right decisions for you can't do it alone you need partners. When launching said company, the owner needs to listen to the different views of each of its partners in order to make the right decisions / choices for his company. Brain Storm and look at every aspect of that business and make the right choices. But the ultimate decisions are made by the owner or owners.

    Then in stage two this is the launching and implementation phase of the process.

    Stage 3. Making changes to your business format as things progress and you support what you started and then expand as needed.

    Now I suspect that Fresh & Easy has a lot of people working at Tesco and Fresh & Easy who have a similar plan / play book and they are most likely between stage two and three, making changes and tweaking their business model as needed. Unlike most companies though they have the financial support of their sister company Tesco who is the third largest retailer in the WORLD to keep them afloat for a quite some time.

    Living in Southern California, My wife and I get to visit the Fresh & Easy stores often and they are opening a Fresh & Easy less then a mile from our house so we are waiting and very excited and can't wait for the stores opening. My wife and I hope they succeed and continue to grow.

    When we visit, we have found that Fresh & Easy believe in a quality first! 2. They work with partners that supply their stores with product and help them create a playbook that meets or exceeds their needs. 3. Fresh & Easy marks things down on a regular basis that have sat on the shelf for what they consider to be long enough due to lack of interest in that item or because of lack of business as everyone likes to point out. But I see this as an opportunity to tray a new thing or it is a way of helping a family out during these hard time who might be strapped for cash and provides them with an opportunity to purchase something that is otherwise to costly to afford otherwise.

    I have chosen to join the club in the hopes that they will survive. Yes it has taken Fresh & Easy time to acclimate their business to the different cultures living in Southern California but they are getting it. They will need to continue to tweak their business model a bit more with every city they move into, but they will do it again and again until they are done and have gotten it right.

    And if they are so wrong, why are the likes of Wal-Mart creating similar Stores formats to compete against the Fresh & Easy model? I guess Fresh & Easy might not be so wrong after all.


    And MNB user Steven Ritchey wrote:

    I suspect that the truth about Fresh & Easy’s fortunes lie somewhere in the middle, not as rosy and Tesco wants us to think, not as dire as some so-called industry experts want to say, but somewhere in between.

    Some of these “experts” have pooh poohed the format of a Fresh & Easy and have speculated heavily on it’s relevance, well, Walmart and Safeway are concerned enough about it to roll out their own responses to it. That by itself should tell people something about the small store format, that people who make a living actually having to do retail, not writing about it, feel a need to formulate an answer.





    On the subject of Starbucks’ need to satisfy Wall Street while trying to be true to its core values – two impulses that may not be synergistic – MNB user Steve Panza wrote:

    One company that seems to do well while snubbing its corporate nose to Wall Street is Costco. And I doubt very much that Jim Senegal and Howard Schultz are strangers. Customers find value in shopping at Costco. Is there any value in stopping by a Starbucks?

    Only if you like the coffee. Which a lot of people do.




    And, I got the following email yesterday from an MNB user:

    NO WAL*MART in today's Morning News Beat????? I'm trying to decide if that's a sign of something...but can't decide what it would be! Just thought I'd let you know that your readers notice!

    It happens. Not often, but occasionally. Just as we occasionally go 24 hours without writing about either Fresh & Easy or Starbucks.

    But, thank goodness, not frequently.

    KC's View:

    Published on: September 9, 2008

    In Monday Night Football action…

    Minnesota 19
    Green Bay 24

    Denver 41
    Oakland 14

    KC's View:

    Published on: September 9, 2008

    by Michael Sansolo

    Every now and again I have to use this column to state the obvious, simply because someone has to do it. So here goes:

    Google is just amazing!

    If you were paying attention last week you caught a flurry of news stories about a strange new Microsoft ad featuring Bill Gates and Jerry Seinfeld that totally underused the talents of both and told us nothing about new products. Somehow, that inane ad got more attention than the bigger technology story of the week. Google is calling out Microsoft yet again.

    Google is unveiling a new web browser named Chrome. If you want to read and learn all about it, simply go to Google.com and check it out. Just the way the company helps laypeople, like me, understand this new technology is wonderful. But that isn’t why I’m writing about Google.

    Instead, let’s talk about the traits of a winner, which Google is. There are countless reasons to love Google, even beyond the ease of its ubiquitous search engine.

    The company is now consistently ranked as the best place in the US to work and, if you have never read those articles about the work environment you don’t know the essential truth of all our lives. That is, we all want to work for Google.

    What amazes me about Google is its constant dissatisfaction with simply having the best search engine. Instead, it keeps finding new things to do. For instance, G-mail is now favored by an extraordinary number of people who say its as good as any service out there. And it is free. Then there are Google documents, essentially allowing us all to use Google for word and data processing. Again, the use is just building, but I have a sense that in a few months or years we’ll all be talking about that too. It’s free, too.

    And why stop there. Google now has a web browser. What’s great about this new service is that Google takes the time to educate all of us, no matter how tech savvy we are, on the details of web browsers to explain why Chrome is the place to be. Even if you understand nothing about the technology, but want to sound informed, check out the comic book Google assembles to graphically explain how browsers work and why Chrome is a generation ahead. As you probably guessed, Chrome is free too, but as with all Google products will get the eyeballs for advertising and the gathering of knowledge that will make the search engine even better. (For full disclosure here, I remain a fan of Mozilla’s Firefox, which I love. But I can see a change coming soon unless Firefox keeps pace.)

    In short, Google exhibits the greatest trait of winners. The company is never satisfied and never sits pat.

    In Woody Allen’s masterpiece movie “Annie Hall,” his character of Alvy Singer says, “A relationship, I think, is like a shark, you know? It has to constantly move forward or it dies.”

    It’s a great metaphor for companies too. You either swim forward or you slowly die. Check out Google and appreciate the work of a winner. And ask why the same isn’t happening at your company.

    Good-bye, good friend…

    One of the perks of having an Internet column is the ability to speak personally from time to time…

    My very good friend and longtime colleague at FMI, Josephine Sergi, passed away last week after an 18-month battle with lung cancer. She was 53 and left us far too soon.

    Now the odds are that many of you won’t know her name. She was one of the many excellent people at FMI who work in some obscurity, making sure that all manner of activities actually run properly.

    More importantly, she was a good friend who more times than I could count made me laugh out loud thanks to ridiculous antics or just making the humdrum less ordinary. Her funeral is today and I couldn’t let the moment pass without saying good-bye. Rest in peace my friend.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

    KC's View:

    Published on: September 9, 2008

    The New York Times offers an assessment of Aldi, the German discount chain, which it notes has prices that are cheaper than almost everybody else’s.

    “Its stores are small and spartan, with minimal décor and a limited selection of products,” the Times writes. “They are often found in nondescript shopping strips and lack the flashy signs and window displays of some competitors. Grocery carts cost a quarter apiece, which is refundable after the cart is returned.

    “But as the economy sputters and consumers look to save money, the privately held Aldi is suddenly emerging as a major force in the grocery business, one that some predict could one day rival Walmart … The company said recently that prices of its private-label products were 16 percent to 24 percent below those at discounters and big-box stores, and 40 percent less than those at traditional supermarkets.

    “While the chain’s format might perplex some shoppers who are used to a much broader selection, Aldi officials have maintained that the advantage of shopping at its stores — cheap prices — quickly becomes clear.”

    KC's View:
    Aldi’s success in the markets it serves points out the importance for its competitors to be as sharp as possible on price, but also to find that other differential advantage – preferably a non-traditional differential advantage that has the potential of being a game-changer - that will permit them to appeal to consumers in a different sort of way.

    Published on: September 9, 2008

    Better late than never?

    Dow Jones reports that the US Federal Trade Commission (FTC) has scheduled its administrative hearing into the legality of Whole Foods’ 2007 acquisition of Wild Oats for February 16, 2009 – a year and a half after the deal was closed and Whole Foods absorbed all of Wild Oats’ operations into its own business.

    The FTC also rejected a Wild Oats request that none of its commissioners preside over the case, and that an impartial administrative law judge be named; the FTC said that none of its commissioners had prejudged the case and were not biased against Whole Foods – this despite the fact that the FTC has continued to try to dismantle a deal completed more than a year and half ago.

    The FTC continues to work through the courts and appeals process to try and undo the $565 million acquisition.

    KC's View:
    Not biased against the Whole Foods-Wild Oats deal? They gotta be kidding. The FTC is like a bunch of rabid dogs with a hunk of raw meat…they can't let go, and they seem completely disconnected from competitive realities.

    The only question is whether whatever administration occupies the White House next February allows this travesty and waste of taxpayer money to proceed.

    Published on: September 9, 2008

    The American Meat Institute (AMI) reportedly has launched a new video series, “Ask the Meat Science Guy,” featuring Randy Huffman, Ph.D., president of the American Meat Institute Foundation, in a series of segments designed to address shopper concerns about meat safety.

    The first three videos in the series, “Cooking Steaks and Burgers Safely,” “Cured Meats and Nitrite” and “Processed Meat and Pregnancy” are currently featured on AMI’s Meat News Network, which is available on YouTube.

    The footage also is available to the news media where appropriate to stories about meat and food safety.

    KC's View:

    Published on: September 9, 2008

    USA Today reports that many online retailers are expected to follow the pattern of recent years and offer free shipping during the run-up to the end-of-year holiday season.

    “With consumer confidence skirting historic lows and most retailers' sales flat or slipping, shipping promotions might be as necessary as they are costly,” the paper writes. “Many consumers turn to online shopping for convenience or to save on gas. If retailers charge them more for shipping because of fuel surcharges, it could offset the money consumers save by shopping online.

    “More than 40% of people who abandoned their online shopping carts said they did so because of high shipping costs, according to a recent survey by the online payment company PayPal. Nearly 60% of those polled by BIGresearch said free shipping was a ‘very important’ factor in their decision to shop online. The National Retail Federation's digital division, Shop.org, says eight out of 10 online retailers offered free shipping during the past two holiday seasons, up from about 60% in 2004.”

    KC's View:
    One of the things that USA Today notes is that retailers offering free shipping will be looking for ways to reduce their own costs, either by configuring shipments differently or adjusting their transportation infrastructures.

    The other option, of course, is reduced profitability. But that may be a price that online retailers have to pay for continued viability. After all, it is unlikely that the economic downturn will last forever…and e-marketers have to keep their eye on the long-term prize.

    Published on: September 9, 2008

    • The Arkansas Democrat-Gazette reports that Walmart CEO Lee Scott told an analysts conference in New York that the company’s strategy of focusing more on remodeling old stores than opening new stores – 350 units in the US were remodeled this year, with 700 expected to revamped in each of the next two years – has proven to be beneficial to the company.

    According to the story, “Retail analysts and consultants say the remodeled stores have much-improved sight lines — making it easier for shoppers to find what they’re looking for — brighter lighting and better organized displays, especially in electronics and apparel.”

    KC's View:

    Published on: September 9, 2008

    • The New York Times reports that Starbucks this week will begin offering a free newspaper in its US stores. The publication, called Good Sheet, will be a single-sponsor newspaper that will each week feature a look at one subject, such as the environment, health care, or education.

    The newspaper is being published by Good magazine, “which was founded two years ago (and) has an editorial emphasis on philanthropy and activism. Some of that is translated into the Good Sheet, a folded piece of newsprint that presents information and statistics in a big graphic. The sheet on health care, for example, gives a history of government health care programs, statistics about health care spending, and suggestions about solutions, including notes on those that John McCain and Barack Obama endorse.”

    The Good Sheet will be published once a week for 11 weeks – or pretty much through the US presidential election cycle.

    • Published reports say that Dunkin’ Donuts remains focused on doubling its US store count to 15,000 by 2020. While the strategy is designed to help it compete more effectively with the retrenching Starbucks, it also is designed to shore up the company’s defenses in the face of companies such as McDonald’s and Wendy’s that also are getting into the coffee business.

    • The Seattle Times reports that an Edmonds, Washington, pharmacy owned by Haggen Inc. is recalling prescriptions filled over the last three months as local police investigate charges that a former pharmacist in the store was filling prescriptions with expired drugs.

    KC's View:

    Published on: September 9, 2008

    • PriceSmart, which operates warehouse club stores in Central America and the Caribbean, said that its August sales were up 31.1 percent to $99 million, from $75.5 million during the same period a year ago, on same-store sales that were up 19.4 percent.

    Annual sales for the company were up 26.3 percent to $1.09 billion from $869.1 million in the same period last year, with same-store sales up 20.1 percent.

    KC's View:

    Published on: September 9, 2008

    The Green Media Show – scheduled to take place in Boston on October 1-2, 2008 – is designed to help companies in a wide variety of venues understand the concept of Sustainable Communications and how it can fit into a strategic business plan. The broad message is that traditional modes of communication are having an enormous impact on the environment, and that people concerned with the carbon footprint of their operations ought to be thinking about the carbon footprint of their communications vehicles.

    In the final part of a two-part interview, Don Carli, Senior Research Fellow with The Institute for Sustainable Communication, puts the issues into context:

    CPG companies and retailers probably are prime offenders, since they rely on print ads, coupons, flyers, mailers and FSIs. So what you’re really talking about isn’t a green initiative, but a complete marketing makeover, right? And doesn’t this make it a tougher sell to these companies?

    Don Carli: Yes, CPG and retail companies are significant users of advertising media, but I would not single them out or any other industry as offenders. We are all conflicted, but more significantly most of us are unaware of how the economic footprint of our advertising and communication activities relates to their environmental and social aspects and impacts.

    Let me give you a timely example.

    TNS Media Intelligence/Campaign Analysis Group says McCain and Obama campaigns are already spending between $250,000 to $300,000 per day on advertising. So far neither campaign has addressed the carbon footprint of political advertising. While spending hundreds of thousands of dollars a day, each campaign has the opportunity to determine the carbon footprint of their advertising and set an example on the issue of climate change.

    Given the importance of climate change and the need to reduce greenhouse gas emissions stated by both presidential candidates, quantifying and reducing the carbon footprints of their advertising would be one of the material ways they could “walk the talk” prior to the election, setting an example for the RNC, the DNC, political action committees and the hundreds of state and local offices marketing their candidates for the 2008 election.

    A lot of people might wonder about why this issue (Sustainable Media Supply Chains) is of such critical importance, especially because so many of us are recycling. What are we missing here?

    Don Carli: First let me address the fallacy that so many of us are recycling. What most Americans call recycling is not recycling... it is correctly termed waste recovery or waste diversion. The single stream "recycling" practiced by Americans results in the diversion or recovery of 56 percent of the paper consumed in the U.S. for recycling, but that does not mean it is recycled. In addition, while recovery or diversion rates are up dramatically from what they were was a decade ago, it is by no means world class, and it is NOT recycling.

    Recycling requires "closing the loop" that the familiar chasing arrow symbol for recycling signifies. Just because we tie up our newspapers and separate our bottles and cans from our other trash does not mean we are recycling. According to the National Recycling Coalition, recycling refers to the complete series of activities by which discarded materials are collected, sorted, processed, and converted into raw materials and used in the production of new products, and it excludes the use of these materials as a fuel substitute or for energy production. Recycling also means buying recycled.

    At present the majority of the waste paper that most American's think they are recycling is in fact being diverted from landfill or incineration only to be sold and shipped to China. A little known fact is that waste paper is America's single largest export by volume and China is our largest single customer for it. They in turn downcycle our paper into linerboard used to make the boxes that they in turn ship consumer goods to us in and we typically then send to landfill or incineration. When it comes to recycling paper, we currently divert approximately 52% of the 750 or more pounds of paper consumed by each American from landfill, but we recycle very little of it here in America.

    In fact we have been shutting down paper de-inking facilities and paper mills in the US. We have not built a new paper mill in the US for over 12 years and the ones we have were built by our grandparents. In contrast, just one company in China founded less than a decade ago has built a half dozen of the most sophisticated de-inking and papermaking plants in the world over the past 5 years. Nine Dragons Paper and its ownership group, America Chung Nam Inc. are presided over by Ms. Cheung Yan, the richest woman in the world.

    As for sustainability... most people think about the sustainability of something they depend on for existence the way fish think about water. We are literally awash with paper and digital media in North America so we tend to take them for granted... In particular we take the sustainability of the flows of energy and materials that produce them, deliver them to our homes and businesses and produce waste streams for granted. Just as most people expect their lights to work whenever they flip the switch and unlimited quantities of clean water to run from their taps at any time of the day on any day of the year. These are not safe assumptions.

    Let me be clear. Communication media supply chains (whether we employ print or digital media), make government, business, the arts and a civil society possible. Our ability to communicate through the use of media is what defines us as a species, and our ability to develop sustainable communication media supply chains will be as important to our quality of life and that of future generations as having clean water to drink, safe food to eat, clean air to breathe or clean renewable energy to light, heat and cool our homes and businesses.

    Advertisers, marketers and all professionals who depend on the ability to communicate freely and affordably through print and digital media need to ensure the sustainability of their media supply chains as a matter of economic self interest as well as a matter of environmental stewardship and due care for that which defines us. We are beginning to see evidence of interest in the issue on the part of major publishers and media companies like Time Inc., The Economist, Newscorp and Yahoo as well as from leading advertisers and government agencies.

    The first step to be taken by all is to identify the sources and fates of the media we purchase and dispose. The second step is to quantify the major positive economic, environmental and social aspects and impacts associated with our media supply chains using transparent peer-reviewed standards-based methods like ISO 14040 lifecycle analysis and ISO 14064 carbon footprint analysis. Armed with facts derived from "triple bottom line" analysis and using systems thinking we can then make informed decisions about how we can communicate more effectively with less energy, less materials and zero waste. The future of business, government and our quality of life, as well as the fate of future generations, depend on it.

    For more information, go to:

    http://www.sustaincommworld.com

    KC's View: