retail news in context, analysis with attitude

Published on: September 26, 2008

Dow Jones reports that Walmart announced yesterday that it plans to cut by one-third its use of plastic bags in its stores. The goal is to eliminate plastic waste that is the equivalent of nine billion bags per year, and is part of the company’s broader goal to reduce waste by 25 percent in its US stores and by 50 percent in its international stores.

The announcement was made by Walmart senior vice president for sustainability Matt Kistler at the annual meeting of the Clinton Global Initiative in New York.

The story says that “Walmart estimates it has already sold enough reusable bags in the U.S. since October of last year to eliminate the need for one billion plastic bags.”

Published on: September 26, 2008

The Wall Street Journal this morning has a story entitled “An Inconvenient Bag,” which looks at the trend toward reusable shopping bags and suggests that the environmental advantages of such bags is more complicated than is immediately apparent. Among the points made:

• If reusable bags aren’t actually reused, but instead end up in landfills, then they actually are worse for the environment than plastic or paper because they take longer to break down.

• “Many of the cheap, reusable bags that retailers favor are produced in Chinese factories and made from nonwoven polypropylene, a form of plastic that requires about 28 times as much energy to produce as the plastic used in standard disposable bags and eight times as much as a paper sack.”

But the bottom line seems to be this: “Used as they were intended, the totes can be an environmental boon, vastly reducing the number of disposable bags that do wind up in landfills. If each bag is used multiple times -- at least once a week -- four or five reusable bags can replace 520 plastic bags a year, says Nick Sterling, research director at Natural Capitalism Solutions, a nonprofit focused on corporate sustainability issues.”

Published on: September 26, 2008

Supervalu-owned Jewel-Osco opens its first “green store” today, a 65,000-square-foot unit in the Fulton River District neighborhood, which includes the following elements:

• A highly reflective and heat emissive LiveRoof system, incorporating vegetation, which will reduce energy consumption for heating and cooling.

• Use of building materials with recycled content, obtained within a 500-mile radius in order to reduce transportation needs.

• Energy-efficient heating, ventilation, and air conditioning systems, including temperature monitors that sense the need for more heating or cooling based on the number of people in the store.

• Strict attention to the recycling of 98 percent of construction debris.

• Water-saving fixtures, energy-efficient lighting, use of non ozone-depleting refrigerants in cooling equipment, and refrigerant leak detection monitors.

Jewel-Osco said that it plans to seek Leadership in Energy and Environmental Design (LEED) certification for the store.

The Chicago Sun-Times this morning reports that other features in the store include:

• “Jewel-Osco's first in-store dietician to help shoppers pick healthy foods, a wine steward to help choose wines, a chef to prepare anything from a sandwich to a meal, and a full line of Wild Harvest organic foods.”

• “The store's ‘Shop the World’ section is up front, featuring a selection of locally sourced goods such as Mike Ditka's Hall of Fame salsa and Earth's Best organic baby food.”

• “There's an olive bar that sells 12 kinds of olives and a Peruvian pepper that tastes sweet at first and then kicks in a mild burn. The bakery features 25 kinds of pastries -- including the Passion City Torte with the Chicago skyline on the outer circle of the cake. The CK Grill, an on-site kitchen, offers ready-to-go meals such as penne with shrimp and pesto sauce, Italian pinwheel sandwiches and fresh banana bread pudding.”

Published on: September 26, 2008

Business Week has a piece about “How Small Stores Can Lure Holiday Shoppers,” which suggests what independent merchants need to do to weather what is expected to be a challenging end-of-year holiday shopping season.

“Call it a customer service Christmas,” Business Week writes. “Consumers are expected to rein in spending this year, and the retail climate favors big-box stores that can offer bargains. But because small retailers can’t win price wars, experts say independents need to leverage their biggest advantage over the chains: personal relationships with customers and the ability to deliver superior service. With some economists predicting one of the weakest Decembers since 1991, retailers that falter could face a cold winter.”

The specific recommendations made by Business Week include:

• Small retailers need to make sure that they identify and cater to their best customers, possibly through affinity discounts that encourage loyal shoppers to spend more. This is the wrong time, experts say, to spend a lot of time and money looking to attract new customers.

• “Keep inventories lean to keep costs down,” and control costs through efficient and effective staffing levels.

• Be sure to coordinate strategies employed in the brick-and-mortar location and the business’s website. They should reinforce each other, not work at cross-purposes.

Published on: September 26, 2008

The Los Angeles Times reports this morning that People for the Ethical Treatment of Animals (PETA) has called on Unilever-owned Ben & Jerry’s Homemade Ice Cream to stop using cow’s milk in its products, but instead use human breast milk.

According to the story, “PETA said that if the ice cream maker begins using breast milk in its products instead of cow's milk, it would reduce the suffering of cows and calves and give ice cream lovers a healthier product … Ashley Byrne, a campaign coordinator for PETA, acknowledged the implausibility of substituting breast milk for cow's milk but said it was no stranger than humans consuming the milk of another species.”

The response: "We applaud PETA's novel approach to bringing attention to an issue, but we believe a mother's milk is best used for her child," spokesman Sean Greenwood said in an e-mail.

Published on: September 26, 2008

Reuters reports that while many retailers already are in full-holiday mode, hoping to get a head-start on an end-of-year holiday season that is expected to be stagnant at best, Starbucks has decided on a radical approach.

It isn’t going to launch its holiday products until the day after Thanksgiving, which is when the Christmas sales season used to begin.

Dorothy Kim, executive vice president of global strategy at Starbucks, tells Reuters that company plans to focus its efforts on those four weeks and avoid what sometimes becomes “holiday fatigue.”

Published on: September 26, 2008

• The Chicago Sun-Times reports that Walmart representatives continue to look for new sites in the city of Chicago, though they say that no specific locations have yet been identified.

The story follows the report earlier this week that Mayor Richard Daley had said that the city had to get out of the way and allow food retailers to open stores in underserved neighborhoods…which is not what happened when the City Council prevented Walmart from opening just such a store in just such a neighborhood last year.

The biggest problem, of course, is that Chicago is a pro-union city…and Walmart is an assiduously anti-union retailer.

Published on: September 26, 2008

• Shareholders at the Wm. Wrigley Jr. Co. have approved the $23 billion sale of the company to Mars Inc., and the deal is expected to close within two weeks.

• The Cleveland Plain Dealer reports that the US Equal Employment Opportunity Commission (EEOC) has filed a lawsuit in federal court accusing Kroger Co. of age and race discrimination against a black employee in Ohio. The retailer is charged with denying promotions to the 24-year employee and giving them to younger, white employees.

Kroger said it does not comment on litigation.

• In Minnesota, the Star Tribune reports that the nine-store Kowalski’s chain plans to add a wine and liquor department to its new Eagan store, and if the transition goes well, the company will add this segment to seven other units. (The Eden Prairie store cannot have a liquor department because local laws require the city to operate such stores.)

• The Business Journal of Milwaukee reports that MillerCoors plans to roll out a new 16-ounce, re-sealable aluminum bottle for its Miller Lite brand this fall in the Midwest and South.

• The Orlando Business Journal reports that Publix Super Markets wants to build a new 970,000 square foot warehouse and distribution center near the Orlando International Airport, noting that “Publix appears to be one of the few companies looking to expand warehouse space at a time when most companies are backing away from projects.”

Published on: September 26, 2008

• Whole Foods Market announced that its Southern Pacific Regional President, Michael Besancon, has been promoted to the newly created position of Senior Global Vice President of Purchasing, Distribution and Marketing.

• Walgreen Co. has hired Kim Feil, senior vice president and chief marketing officer for Sara Lee North America, to be its new vice president and chief marketing officer.

• Western New York-based Tops Friendly Markets announced the hiring of Gerald McGettigan, the former director of merchandising accounting at Pathmark Stores, to be its new director of accounts payable.

Published on: September 26, 2008

• Rite Aid announced a second quarter loss of $222 million, compared to a loss of $78.2 million during the same period a year ago. Q2 sales dropped one percent to $6.5 billion from $6.57 billion a year ago, with same-store sales up 0.6 percent.

Published on: September 26, 2008

In MNB Radio yesterday, I spoke disparagingly about a three-foot receipt I recently got at CVS when I bought two items, with most of the space dedicated to coupons for products irrelevant to my life – and this from a company that has a card program that tracks purchases. I suggested that among other things, CVS ought to follow the lead of the Apple Store and offer to send receipts to my email address…and that it stop wasting paper on receipts.

Got lots of reaction.

MNB user Kerri Holtzman disagreed with me:

While they might seem excessive to you and me, there are some people who value the heck out of those coupons printed at the register. Go Google “CVSing” and see what you get. There is a whole community of customers that work the CVS coupons and deals to get tons of free items from CVS. It’s quite a little hobby and one that many of the “CVSers” take very seriously.

And MNB user Barbara Bushelle wrote:

But I must say that I like CVS’s use of the kiosk offers. The last time that I was at CVS, I stopped at the kiosk on my way in, scanned my CVS card and I received a coupon for $ off my purchase over a designated amount. So, I took a minute and thought of the things that I needed to buy to take advantage of the offer. This was very helpful since it saved me a few dollars. It makes more sense than receiving coupons as I leave the store and prompted me to purchase items that I would have picked up elsewhere. So, it saved me time and money, but it also brought more business to CVS. So with this program, they got it right in my opinion.

Maybe they should use the space on their receipt to encourage others to try the kiosk instead of printing coupons as you leave that are likely thrown away!

MNB user John F. Thompson wrote:

I enjoyed reading your rant about the 3 ft register tape at CVS, I myself have experienced the same many times. I do take issue with is your assumption that CVS was making a mistake or that someone has not connected the dots in the execution of their Frequent Shopper Card.

As you are very aware, the debate on what a “frequent” shopper versus “loyalty” card is the root of this situation. CVS has marketed their program as a frequent shopper card…primarily recognizing the fact that you are a loyal CVS customer. Although I am sure that CVS or some CPG manufacturer’s have utilized the data to distribute key offers when the marketing objectives dictate, is it wrong for CVS to want to communicate specials inside their stores to their customers whether targeted or not through the venue they developed.

The ROI on these type of programs require that retailers and CPG’s work together to balance generic and targeted programs in order for them to work financially. My guess is that if the communication vehicle was something other than a 3 inch wide by 3 ft long tape, your wonder of if the folks at CVS are connecting the dots might have been different. In fact, the notion that you actually noted the length of the tape, and from your description the offers is likely considered a success in some circles.

Discount versus Loyalty has been the debate since the inception of these programs, combined with the financial realities and the perceived opposing “loyalty” objectives between the retailer and manufacturer, I would guess that your frustration is likely to continue for the foreseeable future. In the meantime, I would be careful about characterizing the current programs as mistakes.

Maybe. But it would be my argument that while the retailer and the manufacturer may see these receipts fulfilling their goals, I am nothing other than annoyed. So, if one of their goals is to annoy me – and a lot of other people – then they can pat themselves on the back.

MNB user Diana Crane, who for the sake of context should be identified as the Director of Sustainability at PCC Natural Markets, wrote:

We feel the same way about “the colossal waste of paper” generated by receipts that most shoppers throw away without even looking at. In June we installed in all of our stores new NCR printers that produce double-sided receipts. (Receipts longer than 5 inches automatically print on the reverse.) Our shoppers love them (well, except for those who would prefer no receipt at all; we’re legally required to give them one), and we like that we’re saving well over 1,200 miles of receipt tape annually.

NCR gave us an impact analysis prepared by an independent environmental management company that says, based on receipt tape usage prior to our converting to the new technology, we will:

• Reduce receipt length by 35%
• Save 75 trees
• Save 10,370 kWh in energy
• Reduce CO2 emissions by 9.29 tons
• Save 601 gallons in diesel fuel
• Save 8 cubic yards in landfill space
• Save 84,856 gallons of wastewater

The new printers cost a bit more than the standard ones we had at our check stands, but the old ones needed replacement sooner than later anyway … and the new ones save paper, align with our values as a sustainable business … and make customers very happy.

No doubt NCR is happy, too…because you just gave the company a free commercial.

MNB user Anne Maas wrote:

I share your frustration, as I'm guessing many of your readers do.

The store closest to my home that I frequent is Shaw's. With just about every purchase, regardless if it is 2 or 20 items, I receive an excessively long register receipt with coupons for local businesses. Just so happens that there is typically a coupon for my car wash, so I'll use that, but the remaining coupons are completely irrelevant to me.

They too have a loyalty program and I do randomly receive coupons for products that are relevant to me, along with my crazy-long receipt, so they grasp the concept of tracking my purchases and marketing specifically to me.

I've previously had discussions at home about these receipts and the incredible waste of paper. There must be a better way.

One MNB user wrote:

You hit one of my pet peeves: receipts. Most often, I don't want a receipt. Other than for business meals, if I charge a meal on a credit card, I don't want a receipt at all. These little pieces of paper drive me crazy!

Worse yet, cashiers who return my change to me in a handful on top of the receipt. Now I have to separate the receipt (which I didn't want in the first place) from the cash so that I can put it in my money clip and the change in my pocket. If I must get a receipt, put it in the darn bag and give me my cash "unencumbered".

What happened to the old days of counting change back to customers? I'm afraid most cashiers would not know how to do this.

MNB user James Mathe wrote:

I've thought for a long time that Best Buy is also wasting a lot of paper with their unending receipts. With their Geek Squad and their "reward zone" program, they could do much more electronically as you suggest CVS should/could do.

Another MNB user wrote:

Have you bought anything at Best Buy lately? Their receipts are also way too long because they list their return policy, etc. on each one. It is also posted on the walls and on the counter. It is one reason I am reluctant to buy things there. And the grocery store receipts are starting to get way out of hand as well. I usually tear of the bottom 6-8 inches and leave it with the checker to toss for me.

Yet another MNB user wrote:

I thought I was the only one with this pet peeve. I usually say…well that took a tree…to which they usually laugh without really knowing I won’t be back. Too many other options.

And still another MNB user wrote:

Many retailers are making this exact error. I have the same experience in Ralph's (Kroger) and Vons' (Safeway) - even Sprouts. (We tend to shop at our local health food store- Mother's Market - for most things, but convenience does get us into these other locations as well. I take the meaningless coupons and toss them....I do look at them, but I haven't found one that has enticed me to make an added purchase.)

Such a waste.




One final email this Friday morning, from MNB fave Glen Terbeek, who has some thoughts about the executive restructuring going on at the Food Marketing Institute (FMI):

The real answer would be to combine FMI, CIES and GMA. That would create one organization that truly represents the global "food chain". There are enough issues and problems in the industry today and in the future; that it doesn't need multiple, competing organizations working on them. Rather than replacing the current CEO positions, the industry should consider the above combination.

Published on: September 26, 2008

Well, here’s perhaps my favorite story of the week.

BrandWeek had a story about a new male demographic group, and one that I don't mind being part of.

Gastrosexuals.

According to the story, “it's not exactly news that men have dominated the upper echelons of cuisine. What is new is the broad demographic trend of men not only spending more time in the kitchen, but also using cooking and gastronomy to define themselves—both as men and as consumers.

“According to the study's authors, gastrosexuals, in addition to usually being male, are aged 25-44 and upwardly mobile. Contrary to the popular myth that the limit of men's interest in cooking is limited to the backyard barbecue, the truth is 53% of men report cooking with separate ingredients nearly every day. Cooking is a hobby (as opposed to a chore) for 52% of men, and the amount of time men have spent at the stove has risen fivefold since 1961. Perhaps most surprising: Much of the increasing time that men spend at the stove seems to involve impressing women. In the 18-34 age group (that golden fleece so many marketers quest for), 23% of men said they cook to impress, even seduce, a partner.”

Well, I don't know about this last part. I cook because it’s the only way to get a decent meal around our house…and there isn’t a lot of seduction going on when there are almost always three of us at the table – Mrs. Content Guy, our 14-year-old daughter, and me. (And that doesn’t count Buffett, the lab who stretches out at our feet, and Buddy, the cockatiel chirping in the background.)

But the good news for marketers is that this emerging demographic creates both branding and sales opportunities. These gastrosexuals not only are interested in cooking, but also in shopping for the foods that they are going to prepare, and for the equipment that they will use while in the kitchen.

I can relate to this. Some guys like to go to Home Depot, but I have to admit to finding Sur La Table more my kind of store. To be honest, if more food stores could capture the magic of places like Sur La Table, they’d be generating a lot more sales and creating a lot more engaged shoppers.

The friend of mine who sent me the Brand Week article happens to be a fellow gastrosexual (it is weird even writing that phrase) with whom I’ve spent a lot of time in the kitchen – when he and his wife come over for dinner, the women hang out in the living room, talk and drink wine, while we do all the cooking. As he noted, “Imagine being part of a ‘growing trend’! And at our age! (Actually, being ‘sexual’ anything sounds pretty good at our age…)”

Which made me reread the article, and realize that we are not, in fact, gastrosexuals.

We’re too old.

The story says that the demographic is aged 25-44, which makes me a decade past my gastrosexual prime.

Mrs. Content Guy will probably have a joke about that…




I scan something like 20 newspapers every day as I research MNB, and every once in a while a headline just leaps out at me, either grabbing my attention or just making me laugh. In this case, the headline in the Atlanta Journal-Constitution did both:

“FAA SUSPENDS SLEEPING AIRLINE PILOTS”

Upon reading the story, what really amazed me was that while the story only broke this week, the pilots committed their infraction back in February when flying for Go Airlines in Hawaii, and the story only got into the papers after their suspensions had been completed.

That doesn’t mean that the two pilots are back in the air. Both were fired, which seems entirely appropriate to me, and one of them was diagnosed with sleep apnea.

But I have to wonder why these guys didn’t have their pilots’ licenses taken away from them. Because while I hate the idea of losing their livelihoods, I spend enough time in the air that I think keeping these guys out of the cockpit seems like a good idea.

Maybe that’s just me.




Just to be fair… I mentioned last week that I was impressed by the fact that in all of Walmart’s new grocery-oriented TV commercials, the shopper is shown using a canvas bag…which impressed me because it demonstrates a real consistency of message.

But I noticed this week that in a TV commercial for Stop & Shop, the customer in the ad also was using a canvas bag.

And I thought it worth mentioning, especially because I don't often find good things to say about Stop & Shop. In this case, they got it right.




I think I’m probably like a lot of other Americans when I say that I have no idea whether the financial bailout being urged in the halls of Congress is a good idea. On the one hand, if the goal is to rescue financial institutions that made series of bad bets, then it doesn’t seem so necessary. But if the ultimate goal – as expressed by James Cramer – is to assure that people don't lose their houses, then it strikes me as a worthy objective.

I do know this. When people in the Administration use words like “Armageddon” and “depression,” I get very, very nervous.




The New York Times had a story this week about how Cadbury-owned Dentyne chewing gum has a new ad campaign urging people to “power down, log off, unplug,” and “make face time,” which presumably is more pleasant if the person with whom you are sharing face time has chewed the gum.

But I think they miss the point.

You see, the young people who no doubt are being targeted by Dentyne are capable of checking their email, having a cell phone conversation, texting a friend and talking to a real live person simultaneously…and, by the way, they’re also capable of chewing gum at the same time.




The Mets are making me crazy. Just when I think they’re going to collapse again, they win in the 9th inning. Are they prolonging the agony? Or refusing by force of will, despite injuries and gaping holes in the lineup and bullpen, to go quietly into the offseason?

Not sure it matters. Just as baseball, in the words of the great Robert B. Parker, is the most important thing in the world that doesn’t matter.




It won’t open in theatres across the United States for another couple of weeks, but I want to recommend to you the new western, “Appaloosa,” which continues the re-emergence of the western that has seen such recent releases as “The Assassination of Jesse James by the Coward Robert Ford,” and the remake of “3:10 To Yuma.”

I was an enormous fan of the latter film, featuring as it did wonderful performances by Christian Bale and Russell Crowe, and while it has a completely different tone and pace, I like “Appaloosa” every bit as much. (I was a little less enamored of “Jesse James,” despite some extraordinary work by Brad Pitt and Casey Affleck, mostly because it seemed to be self-conscious about its artistic aspirations. But it is still an ambitious piece of moviemaking, worth renting when you get a chance.)

From the moment it begins, with the sound of galloping hoof beats, and the camera pans across the majestic, John Ford-like landscape of the American west, “Appaloosa” makes immediately clear what it is – a western in the classic mode, examining classic conflicts and archetypes. Ed Harris and Viggo Mortensen star as Virgil Cole and Everett Hitch, two gunmen who essentially work as lawmen for hire in towns that require their services. They find themselves in the frontier town of Appaloosa, where an evil landowner named Randall Bragg (Jeremy Irons, in snarling, mustache-twirling glory) killed their predecessors and is riding roughshod over the town and its residents.

It gets complicated when a woman named Allison French (Renee Zellweger) comes to town and Cole finds himself besotted, and then finds that she isn’t exactly what he’s used to…and Hitch finds himself part of a very complicated triangle. (Zellweger isn’t my favorite actress … I would have preferred the luminous Diane Lane in the part … but Zellweger does fine.)

“Appaloosa” is based on the novel by mystery writer Robert B. Parker, and Harris – who not only directed the film but also co-wrote it – stays very close to the text. He’s like the sculptor who said that he created a work of art by simply taking a block of granite and getting rid of whatever didn’t belong. This is a good thing in “Appaloosa,” because it means that Parker’s snappy dialogue and guy-repartee is pretty much intact. It also at its heart is a meditation on friendship and loyalty – always a specialty of Parker’s, as seen in the Spenser-Hawk relationship that he’s been exploring in almost yearly novels since 1976.

(I’m a longtime fan. See: > http://bullets-and-beer.com/KevinCoupe.html

I’ve always felt that Parker’s Spenser novels, and especially his Jesse Stone novels are essentially westerns transplanted to a New England locale – they’ve got good guys trying to bring justice and peace to towns or cities that need a lawman with an ethical and moral compass. The movie “Appaloosa” won’t disappoint, I think, especially if you love the genre, the classic construction, and especially the sound of thundering hoof beats.




I have a delicious red wine for you to try this week – the 2007 Domaine Roger Sabon Cote de Rhone, a fabulous and yummy wine from France that is dry and smooth and just about perfect. Can’t recommend it enough. Enjoy.




That’s it for this week. Have a great weekend.

Sláinte!! And Let’s Go Mets!