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    Published on: November 5, 2008

    by Michael Sansolo

    Around this time each year, I get a flu shot. It’s no big deal, except something always bugs me. Why do I have to get a shot every year? Isn’t it possible that last year’s vaccine could actually help me this year?

    For those of us who know little of nothing about science, we know the problem with that question. The flu virus somehow changes each and every year. Somehow it becomes a little different requiring breath-taking stories on television, fears of widespread illness and death and, of course, a whole new batch of flu shots.

    You have to hand it to the bug. That’s a heck of a marketing campaign.

    But organisms are that way. They mutate, they change and the challenges they create shift too. I remember getting a lesson on this one year from someone who knows a lot about science: FMI’s food safety expert Jill Hollingsworth. As Jill put it, the reason food safety issues never go away is because the bugs keep changing. They mutate and the response to them has to do the same.

    It’s a good metaphor for the current economic mess. We keep hearing people talk about how this is the worst thing since the Great Depression or whatever. The bottom line is: we have never been here before. We’ve never had this combination of events all at the same time in an economy with all the attributes we have today.

    So the response demanded by business and consumers has to be just like the flu shot. In other words, it needs to be different. That doesn’t mean we can’t learn from the past, but we have to remember the future is the key. The difference ns this flu, this food safety outbreak and this economic downturn is what has mutated and how do we fight it.

    There are signs of activity all around today. While the airwaves for weeks were full of political commercials talking about the economy, few, if any, actually provided a solution. Except for one set of ads—those coming from Walmart.

    A few weeks back I wrote about Walmart’s ads touting the savings of cooking a pizza at home compared to ordering out. Now, the Bentonville gang is at it again, comparing the cost of eating breakfast at home or at a restaurant. Other ads talk up the fuel savings of shopping in a massive one-stop store…just the kind Walmart runs.

    Will those guys stop at nothing?

    The ads serve as a brilliant reminder of Walmart’s price positioning. Love them or hate them, you have to admit that Walmart talks about what concerns the consumer. It might be the environment or it might be prices. Either way, Walmart reminds customers that it cares.

    Over the past decade, many retailers have found they could compete and co-exist with Walmart by doing things differently. And many have watched in amazement as Walmart, despite its size, shifted its focus, advertising a softer side instead of just price. But changing times call for changing measures and Walmart is shifting yet again. It’s hard to make any predictions in the current environment, but here’s one: Walmart’s market share will survive the economic downturn. In fact, watch it grow.

    Is it fair? Obviously, no, but life rarely is. What it means is that the game has changed and the responses shoppers demand are changing with it. The question every company has to ask today is whether or not they can make the change to fight this bug too.

    In all honesty we don’t know the answer this time. We don’t know if the big winner will be Walmart, Aldi, Dollar Tree, Fresh & Easy, CVS or Kroger, Safeway and Food Lion. It could be some format that barely registers these days.

    The problem has mutated and the response must do the same.

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

    KC's View:

    Published on: November 5, 2008

    Think of it as a perfect consumer storm.

    The Wall Street Journal reports that “the twin currents of an economic downturn and rising concern about the environment are merging in a shift in consumer psychology. After a decade of conspicuous consumption, many middle- and upper-income Americans are no longer comfortable showing off $300 Gucci sunglasses and $8,000 Hermes Birkin bags. They are developing a distaste for extravagance that promises to affect spending on everything from cars and travel to electronics, fashion and household goods -- and to last at least as long as the recession.”

    The message: It is cool to be cheap. Or at least thrifty. And green.

    The Journal writes: “The shift began even before the credit markets broke down and the stock market plunged. Many Americans had already begun to question their ‘freewheeling consumption’ and move toward ‘a culture of responsibility,’ says J. Walker Smith, president of global trends researcher Yankelovich, a unit of the Futures Company. For many, he says, environmental concerns were an important factor in this shift.”

    At the same time, new research by Natural Marketing Institute (NMI) suggests that more than 80 percent of the total U.S. adult population show some type of green motivation, offering what NMI calls “a target for green and eco-friendly products and services” that make sustainability “much more attractive” and increase “the imperative for businesses to engage with consumers of all types.”

    KC's View:
    This all makes sense from an academic point of view. But does it add up when applied to a real world situation?

    Check out just such a scenario in our next story…

    Published on: November 5, 2008

    Publix Super Markets will open its third GreenWise Market this Thursday, in St. Petersburg, joining the two existing units in Boca Raton and Palm Beach Gardens.

    According to the St. Petersburg Times, two more are slated to open in converted Albertsons locations in Tallahassee and Winter Park, with a hybrid version – called Publix – to open in Naples.

    The story suggests that “the curious should bring an appetite. And extra cash. That's unless they can withstand the temptations of over-the-top displays, flashy exhibition cooking and tantalizing scents of an array of freshly prepared foods made to be eaten at a 45-seat patio or more likely taken home and microwaved for five minutes …

    “If this seems a bad time to unveil a supermarket stuffed with premium-priced organics, natural foods and top-of-the-line gourmet fare, welcome to the club. After all, studies show that most Americans hold the line on food spending as a percentage of their income even in this time of soaring prices. Whether those committed to foods made without artificial color, preservatives, pesticides or antibiotics stick to their guns as the economy and their discretionary income goes south remains to be seen. Already, sales and profit at chains like Whole Foods Natural Markets have softened dramatically. GreenWise Market, however, is Publix's competitive answer to Whole Foods and others like Fresh Market that moved into its home state to skim the cream in top income neighborhoods.”

    KC's View:
    I have to admit to being a little conflicted about how to respond to this story.

    One the one hand, Publix’s numbers came out yesterday, and net profit is down 18 percent at the same time as the nation – especially Florida – is enduring a serious economic downturn.

    On the other hand, I believe in always pushing one’s differential advantage…and that a retailer should never lose touch with the values that serve as its foundation. Even – especially – in tough times.

    Is this the best time to open new GreenWise Markets. The short-term logic would say no. But Publix is and always has been a long-term company that thinks strategically rather than tactically.

    Maybe I’m wimping out on this one, but I’ll bet on Publix’s logic. With some reservations.

    Because the thing that determines whether GreenWise is successful long term may be whether it is perceived as primarily “green” or “luxury.” And to what extent consumers can afford the luxuries.

    Published on: November 5, 2008

    In Minnesota, the Pioneer Press reports that Lund Food Holdings has dropped the $4.95 store pickup fee that used to be charged to customers who ordered online and then picked up their groceries at one of the company’s Lunds or Byerly’s stores in the Twin Cities area.

    "Right now we're at that time of year when people are busy and turn to online shopping to save time," said Aaron Sorenson, a spokesman for the retailer. "We'd like them to turn to our service."

    However, the company did not eliminate the $9.95 fee for grocery orders that it is delivering to people’s homes or offices.

    The Pioneer Press notes that while Sorenson says there is no connection, it was just days ago that Coborn’s Inc. relaunched the SimonDelivers online grocery service under the CobornsDelivers name – and it may be that Lunds wants to keep that retailer from getting a secure foothold.

    KC's View:
    Doesn’t matter what the reason is. This is a smart move by Lunds, and a step that is in line with a long-stated belief around here – that eliminating extra charges such as those for pickup will be standard operating procedure for food retailers that will have to absorb such fees into the cost of doing business. It is what consumers are going to expect…after all, they can get free delivery from companies such as Amazon and Apple, and they don’t remember a world where things were any different.

    The food industry has to meet those expectations, not ignore them, if it is to be relevant to the next generation of customers that is going to be here any minute.

    Published on: November 5, 2008

    Interesting story out of the UK, where market leader Tesco reportedly is launching a financial education program for its 280,000 employees that is designed to help them make the most of their money through canny budgeting, saving, buying and investing.

    Hayley Tatum, director of personnel for Tesco’s UK stores, is quoted as saying: “Tesco is undertaking these initiatives because we are very keen to support our people every way we can. Good money management can make a real difference to people’s lives. We are proud to offer an excellent range of benefits to all staff, including a defined benefit pension scheme and a range of share/save schemes. But we wanted to ensure we are doing all we can to encourage staff to take up all benefits available to them and, by linking with the FSA, to ensure they have access to information about how best to manage their finances.”

    KC's View:
    This is a smart way to take care of employees who almost have to be affected by the economic downturn hitting so much of the world. Kudos to Tesco.

    More retailers – more employers – should take such care.

    As Tesco’s slogan says: ”Every little helps.” This is a great example of putting a slogan into practice.

    Published on: November 5, 2008

    Retail Week reports that Walmart’s Asda Group in the UK has opened a new format store that is wood-clad, timber-framed, and loaded with “energy-generating and saving features such as an external bio-mass boiler fuelled with wood chips and lower energy freezers, all of which have doors to keep the cold in. The store also has higher levels of daylight than similar-sized branches.

    “Asda estimates the store's carbon footprint will be more than 50 per cent lower than a conventional outlet.”

    KC's View:

    Published on: November 5, 2008

    Starbucks was one of several retailers that promised to give free product – in its case, coffee – to people who came in yesterday wearing stickers certifying that they had voted. But when Washington State officials told the company that this actually was illegal because it was tantamount to paying people to vote, Starbucks changed its strategy…and gave away a free tall coffee to anyone that wanted one.
    KC's View:
    Which somehow must be a win for democracy. Though I can't figure out how.

    Published on: November 5, 2008

    • Arden Group, parent company to Gelson’s Markets, reported that its third quarter sales were $114 million, down from $119 million during the same period a year ago, on same-store sales that were off 4.4 percent. Q3 net income was $$4.1 million, down from $8.9 million a year ago.


    • Walgreen Co. reported that it had October sales of $5.2 billion, up 6.8 percent from $4.8 billion during the same period a year ago, on same-store sales that were up two percent.

    KC's View:

    Published on: November 5, 2008

    The Fresh & Easy debate never seems to end. Yesterday, an MNB user said he wasn't impressed, especially when comparing the format to Walmart’s new Marketside small store concept.

    But MNB user Paul Schlossberg disagreed:

    A few weeks ago we were in Los Angeles and found our way to the F&E at Vanowen and Sepulveda. It was about 2 PM on a Monday. The store was busy. My estimate is that there were about 25 shoppers in the store.

    The fresh food on display met my criteria for eye appeal and quality. We purchased a sampling of products across a few categories to create a meal. This was before F&E introduced their new meal combinations program. The preparation instructions were simple and easy to understand. Everything we had was very good. The salad and dressing were great. The entrees were good tasting. And the desserts were even better.

    My son, who does the shopping for his family, said that the prices for fresh food, bakery and produce were better than the supermarkets where he usually shopped. And he said that he would shop there in the future. He lives about four miles away from the F&E store.

    Is the store environment unexciting? Yes! That did not seem to be a problem for the shoppers who were there.

    The store was clean. The staff was active and helpful. When we asked about a category, a store employee walked us over to the section. There was constant restocking going on while we were there. The checkout process was fast and efficient. It was easy to get in and out of the parking lot.

    If I lived near an F&E, I would be shopping there.

    I will be interested to see a Marketside store to compare it to F&E.


    But another MNB user wrote:

    Just wanted you to know that I agree completely with the MNB user you quoted regarding their assessment of Walmart’s Marketside stores here in the greater Phoenix metro area.




    Responding to yesterday’s story about how Amazon.com has begun an initiative that is designed to get rid of frustrating packaging – especially the hated hard plastic clamshell – one MNB user wrote:

    I impaled my thumb with a scissors due to frustration packaging 2 years ago. I still don’t have all the feeling back. I’m glad someone is trying to help. I love shopping Amazon (my usual source for DVDs, as they notify me when my favorites are available), especially when I get free shipping!

    But MNB user Michael Freese suggested that there may be some inconsistencies in the plan:

    I really love Amazon and use them when possible.

    I just ordered a ribbon for our time clock (which was supplied by an Amazon partner) that arrived in a box that was 14 inches long by 8 inches wide by 4 inches high.

    This ribbon weighed in at .8 ounce. In theory it could have been sent with 42 cent stamp.

    Overpackaging given new meaning.


    Not a perfect world. Not by a long shot.

    KC's View:

    Published on: November 5, 2008

    Sen. Barack Obama (D-Illinois) defeated Sen. John McCain (R-Arizona) yesterday to become not just the 44th president of the United States, but the first African-American to win the nation’s highest office.
    KC's View:
    It is odd to be so far from home - in Puerto Madryn, Argentina, as I write this – and see these events transpire.

    I will tell you this. We have met many people over the past few days. Not one said he or she hoped that John McCain would win. We even spotted a few Obama/Biden pins among the populace.

    This, apparently, is change that even Argentineans believe in.

    I was reminded yesterday by a piece in Slate.com of two concession speeches of the past worth remembering.

    One was by Dan Quayle, who said in 1992 that if Bill Clinton “runs the country as well as he ran his campaign, we will be all right.”

    The other was by Adlai Stevenson in 1952, who famously said: “I urge you all to give General Eisenhower the support he will need to carry out the great tasks that lie before him. I pledge him mine. We vote as many, but we pray as one."

    Maybe for a few weeks or months the campaigning, positioning and posturing – by all sides – will end, and we can make some progress as a country.

    Because no matter how you feel about his politics, the election of Barack Obama as president of the United States says that we have made progress as a people.