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    Published on: October 8, 2008

    Tops Friendly Markets said yesterday that it has signed a deal with Tim Hortons, the popular coffee-and-doughnut shop, to put full-service restaurants or self-service facilities in 82 Tops locations.

    According to a statement released by the companies, “Plans include up to 20 full-service restaurants as part of the 82 locations, and 62 self-serve locations, and … it is expected that several of the self-serve kiosks will be converted over time to full-service locations.”

    "We are excited about the mutually exclusive partnership between Tops and Tim Hortons," Frank Curci, Tops' president/CEO, said in a prepared statement. "We're two strong and growing brands in the markets we serve and we share a common goal of meeting the needs of our time-sensitive customers while providing them with quality products. Having Tim Hortons products in our stores will undoubtedly enhance our customers' total shopping experience."

    David Clanachan, Tim Hortons’ COO for US and International, added, “Tops is an ideal fit for our continued strategy to build our brand and convenience for customers through both standalone stores and non-standard full-serve and self-serve formats.”

    KC's View:
    On the face of it, this is a smart decision because it will use Tim Hortons’ popularity to generate traffic.

    However, while I understand the logic behind the move, I cannot help but wonder yet again about the strategy of giving such visibility and presence to a company that is competing for share of stomach. The argument is that a retailer like Tops cannot produce coffee and doughnuts that will be of the same quality and have the same brand equity as Tim Hortons, and I get that.

    But I have to ask the same question here that I’ve asked about stores that put Dunkin’ Donuts or McDonald’s or even Starbucks bars into their stores. I hate the idea of building another food retailer’s brand … in a time of cutthroat competition, there would seem to be a downside.

    Published on: October 8, 2008

    The New York Times reports that “a new start-up,, is betting that the time for online wine has finally arrived.”

    According to the story, the website has a number of oenophile-friendly features: “Winemakers can post their tasting notes and tips for tourists who want to visit their vineyards. Wine drinkers can buy, rate, review and discuss wine. A blog offers recipes with wine pairings and interviews with winemakers, and a wine encyclopedia defines terms from ‘abboccato’ to ‘zinfandel’.”

    And, there is a “buy local” component to the site as well: “Three-quarters of the 435 wineries that sell on the site are small vineyards that produce fewer than 1,000 cases of wine each year and sell in few or no stores. These winemakers don’t have other ways to reach customers beyond those that visit their tasting rooms and don’t always have the resources to set up their own e-commerce sites…” One of the differential advantages that hopes to bring to the space is a breadth of product from previously little-known sources.

    The Times says that “the site is free for customers and vintners. When a winery sells a bottle of wine through the site, processes the payment and the wineries are responsible for shipping. Shipping is $15 for one to three bottles and $25 for a case. Wineries set the prices for the wine, which range from $5 to $1,000 a bottle. keeps 10 percent of that and returns 90 percent to the winemaker.”

    While selling wine online has its challenges – including complicated state laws that can make shipping difficult and the need to make sure that buyers are of legal drinking age – isn’t exactly alone in the space, and between 10-20 percent of all wine sales in the US are via the Internet, according to one marketing group. There have been reports that plans to get into the wine business, though it hasn’t happened just yet.

    KC's View:
    Wine is one of those great aspirational segments in which retailers can use product and education to build sales and interest. And this strikes me as an interesting idea…if only because it exposes people to a lot of products they might not have seen before.

    Published on: October 8, 2008

    The Los Angeles Times reports that it is beginning to look like the US Supreme Court seems likely to consider a California case in which supermarket chains including those owned by Kroger, Safeway and Supervalu are challenging the validity of a lawsuit “accusing them of concealing that salmon they sold contained artificial coloring.”

    The chains maintain that only government regulators can enforce food labeling rules, and that allowing consumers to file such suits was "an open invitation to private plaintiffs nationwide to bring class actions." However, the California Supreme Court had allowed the suit to go forward, which led to the appeal to the US Supreme Court.

    According to the story, “the high court's request, directed to U.S. Solicitor Gen. Gregory Garre, signals that the justices may add the case to their 2008-09 docket.”

    KC's View:
    The downside of the chains’ case, of course, is that it looks anti-transparency. Which isn’t exactly where I’d like to be ...

    Published on: October 8, 2008

    NamNews reports that Tesco has created a new “Discounter” tab on its website that brings shoppers to a store-within-a-store with discount products.

    Interestingly, it was just earlier this week that a major Tesco competitor, Walmart’s Asda Group, announced that it has created an online sales business, Asda Direct, which sells a wide variety of nonfood items – including clothes, furniture, toys and appliances. The goal of that site is to generate enough high-margin business to compensate for the squeeze on margins now being seen in the food business.

    KC's View:
    It is all about throwing jabs and hooks and uppercuts, as these two behemoths look for any possible advantage in the UK marketplace. Can't be a lot of fun for Tesco and Asda, but it is good for UK shoppers and certainly a lot of fun to watch from here.

    Published on: October 8, 2008

    • Reports say that Anheuser-Busch shareholders will vote on the planned acquisition of the company by InBev for $52 billion on November 12. InBev’s shareholders approved the deal last September, while A-B’s board of directors has unanimously recommended that the company’s investors accept the deal.
    KC's View:

    Published on: October 8, 2008

    • Safeway said yesterday that its third quarter net income was $199.7 million, up from $194.6 million during the same period a year earlier. Q3 revenue rose four percent to $10.17 billion, with same-store sales up just 0.5 percent.

    However, Safeway CEO Steve Burd said that stagnant same-store sales may have “bottomed out” in the third quarter, and noted that fourth quarter sales so far are up more than 1.5 percent.

    • Wal-Mart de Mexico said yesterday that its third quarter net income was the equivalent of $300 million, down two percent from the same period a year ago. Q3 sales were up 10 percent to the equivalent of $4.7 billion (US).

    • PriceSmart, which owns and operates U.S.-style membership shopping warehouse clubs in Central America and the Caribbean, has posted September sales of $93,6 million, up 19.8 percent from $78.1 million during the same period a year ago, on same-store sales that were up 15.3 percent.

    KC's View:

    Published on: October 8, 2008

    It figures. I actually say something charitable about the US Food and Drug Administration (FDA), and it comes back to bite me on the … well, you know.

    Yesterday, MNB noted a Washington Post report that despite all the concern about Chinese dairy products tainted with melamine - the poisonous industrial chemical that can artificially inflate the protein levels of products to which it is added – the US Food and Drug Administration (FDA) says that consuming small amounts of melamine poses no serious health risk.

    According to the Post, “The exception, officials said, is melamine in baby formula, which has sickened more than 54,000 infants in China. The agency said it was unable to determine what a safe amount of melamine in formula might be. The FDA set 2.5 parts per million as the maximum ‘tolerable’ amount of melamine that could be safely consumed in other foods.” Higher-than-tolerable levels of melamine have been found in items ranging from candy to yogurt that contain Chinese dairy products and that are sold in the US.”

    I commented: I rarely say anything nice about the FDA, and I’m not exactly going to break that streak here. But in all fairness, if the science says that one can ingest tiny amounts of melamine without significant health risk, it isn’t exactly the same as saying that one should ingest tiny amounts of melamine, or that melamine products shouldn’t be banned.

    One MNB user responded:

    One could probably place small amounts of dog feces in brownies and probably not be harmful. Do you really want dog feces in your brownies? I didn’t think so. Stop this nonsense now. If it was an American company they would have been fined, sued and closed.

    MNB user Doug Campbell wrote:

    Melanine is an adulterant that in no way should be in any food product at any level. To argue otherwise is no different than saying there is a "safe" level of rat poison that will not harm people thus rat poison in food is acceptable if it does not exceed the established "safe" level.

    Another MNB user chimed in:

    John Kenneth Galbraith said, “faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.” So the FDA, instead of changing its mind and saying, hey wait a minute…maybe we shouldn’t put all these chemicals in our citizen’s bodies…they get busy proving that a little bit won’t hurt. Well, what about the cumulative affect of multiple chemicals over time? What about health fragile people, what about the young and the old…are they just collateral damage?

    And MNB user Mike Holman wrote:

    Perhaps the solution is to require that melamine is listed as an ingredient for products containing it and let the consumers decide what levels are "tolerable"!

    Truth be told, I wouldn’t want to eat something with melamine, and I wouldn’t want to feed it to my kids. I was trying to be charitable, and frankly, I probably should not have been.

    Got the following passionate email from an MNB user:

    I am always writing in over my outrage about how the media never gives a complete picture of a situation, and their coverage typically instills mass hysteria and over-reaction. Whether it is tainted spinach or tomatoes or peppers or now defaulted loans, I am so tired of the chain reaction from the over sensationalized stories to sell commercial blocks or cable subscriptions.

    For example, and I am not saying the current financial collapse is insignificant, but when the loan default rate is actually around 5% right now, I am left wondering if the normal load default is always 0? Wouldn’t it be almost an expected number of at least 2-3% of all loans being defaulted even in typical economic times? Does this warrant a rush on the banks to bring us all back to 1929??

    Is the fact that the government came in and made banks give loans to high risk customers on an increasing real estate market which fueled greedy banks to give even more loans because it seemed to fuel the real estate market even more? Did they really think typical working people could afford $750,000 cottages in California and the NE and then second homes in Florida? Are there really that many CEOs out there who can live that lifestyle?? I am not surprised by any of this since the bubble was bound to burst and now everyone who made a bad investment is crying out to be saved or we will all go under……so much for those of us who have made sound investments, lived within our means and didn’t run off with some multi-million dollar exit package when we failed at our jobs.

    Even the Boooya guy incited a massive dive on Wall Street when he shouted SELL, SELL, SELL yesterday, probably because he planned on doing a BUY, BUY, BUY after everything went into the proverbial toilet. Now we have the good fortune of looking to the brain trusts being offered by the Democratic and Republican parties to “fix” everything. Last time I looked, no one with a brain or a self-contained ego was willing to run for office. I am simply not impressed with the older, so-called wiser people running our companies and government today. It is an embarrassment.

    That’s a pretty heartfelt series of complaints, but I would only ask you to consider what the alternative is. When people get sick from eating spinach or loans are being defaulted upon, is the media supposed to ignore it? I will grant you that in many cases the coverage could be a lot more sophisticated and comprehensive…but I’m not sure that ignoring these stories is the answer.

    And, because I’ve said that I like to hear about people’s favorite food shopping experiences, MNB user Annika Forester offered:

    I thought I’d pipe up about my personal favorite grocery shopping method. I grew up in Berkeley, and lived my entire life within reasonable range of proper, old-school, food co-ops. I had read Laurel’s Kitchen before I had graduated from high school. Even when I went to college at UC Davis, with a fantastic food co-op there, we one-upped those deals and went straight to the distributor (back then it was Mountain People’s Warehouse) and ordered as a group, in bulk, on a monthly basis. When I moved to Ventura County in southern California, I was shocked and dismayed to find that there were no food co-ops within any remotely reasonable driving distance, and Trader Joe’s was ‘as good as it gets’. Whole Paycheck does not even tempt me, though I could drive 40 miles to shop in Thousand Oaks if I wanted to. Too much show and excess and gratuitous flaunting of so-called greenishness.

    A couple of years ago I started a food buying club, with some other moms, from the natural foods distributor Azure Standard out of north central Oregon. They actually began as a farm, and therefore produce a lot of the grains and legumes they sell, plus grass-fed beef. They also carry just about anything you’d find on your average ‘natural’ foods store, plus a lot of specialty items only available in the Pacific Northwest. Their prices compete with TJ’s, and their variety beats TJ’s hands down. Their prices leave WF in the dust. I shop almost exclusively from their sale catalog to get manufacturers’ discounts of 10-20%.

    I shop online once a month. I can take my time to read ingredients lists, nutrition information, and even follow links from Azure Standard’s website to manufacturer websites to learn more about the company that makes the products I’m considering purchasing. I place my order by Wednesday afternoon, and on Tuesday the semi-trailer comes rolling down highway 101. Our group of moms meets at the appointed time and we off-load our groceries, sometimes splitting cases or trading novel items. I have a massive pantry that I keep stocked this way, and I never run out of anything.

    This is where I spend 50% of my grocery dollars. Away from the dazzling lights and sensational smells of the grocery aisles, and free from the mesmerizing muzak and impossibly annoying impulse items. I feel like our little buying club is a small act of mutiny from the grocery-industrial complex.

    An experience to learn from, I think.

    KC's View: