retail news in context, analysis with attitude

Published on: November 6, 2008

Business Week reports that Walmart “has held talks with Herbert and Marion Sandler, founders of Golden West Financial Group, about a new credit card that would offer lower interest rates and few of the onerous fees associated with traditional credit cards. Given Wal-Mart's massive customer base and the current turmoil in the banking industry, the move could have a big impact on lending in the U.S.”

The retailer, however, says that while it has explored the possibility of introducing such a credit card, it has no immediate plans to do so.

However, Business Week writes that “the timing for a Wal-Mart entry seems right. Banks nationwide have been cutting credit lines, hiking interest rates, and raising fees for credit-card customers they deem high-risk. Those moves come amid a surge in credit-card borrowers running late in their payments because of the slowing economy and the easy lending terms of years past.”

At the same time, Walmart has gone on record that it is seeing sales take a hit because people have either maxed out their credit cards or have decided to stop using them until the economy turns around.

The retailer has been stymied in its efforts to get into the financial services in the US, with federal regulators bowing to concerns on the part of those in the mainstream banking business about a non-bank getting into financial services. However, Walmart has opened a bank in Mexico, and plans to do so in Canada.

Published on: November 6, 2008

Winn-Dixie announced this week the launch of what it called “an online initiative designed to expand the health and wellness resources available on the grocer’s website.”

Shoppers going to Winn-Dixie’s website now will find health information and recipes contributed by the Mayo Clinic, and each month will feature a different health-related topic – such as diabetes, cold and flu, nutrition, healthy diet, heart disease, digestion, asthma and allergy, men’s health, sun safety, cholesterol and breast cancer - that will be addressed through Mayo Clinic content, both on-line and in-store.

“Helping people live healthier lives is something Winn-Dixie is committed to, so this is a logical relationship for us,” said Anthony Agresta, Winn-Dixie’s director of electronic and customer marketing, in a prepared statement. “In addition to offering our fresh produce, selections of naturals and organics, quarterly pharmacy wellness clinics, and supporting health-related organizations in our communities, offering credible health content from MayoClinic.com enables us to further help our customers make informed decisions about their health.”

Published on: November 6, 2008

The Arizona Daily Star reports that the Tucson City Council has begun “crafting regulations to cut back on the use of plastic shopping bags in Tucson. The ordinance, which would require council approval, would take effect July 1, 2009.”

Among the rules under consideration, according to the paper:

“Have retailers place grocery-bag-recycling bins in prominent well-signed places in the front of their stores.”
“Create an educational campaign to inform the public about the importance of recycling plastic bags.”
“Have all plastic grocery bags display recycling logos and information.”
“Have reusable canvas bags on sale at their stores.”
“Create a way to collect data on the recycling program to determine if it is succeeding.”

The Daily Star notes that “stores in Pima County that have agreed to participate include Bashas', Fry's, Safeway, Sunflower Market, Albertsons and Wal-Mart.”

Published on: November 6, 2008

• Walmart announced yesterday that it will hold special in-store sales throughout the chain’s US stores this Saturday, looking to entice early holiday shoppers with promotions during a time of economic difficulty. The move essentially preempts the “Black Friday” promotions usually reserved for the day after Thanksgiving in the US.

Published on: November 6, 2008

The Los Angeles Times reports that the overwhelming passage of Proposition 2 in California, a farm animal welfare measure, won’t have any immediate impact because its provisions don’t kick in until 2015. In fact, the story suggests that consumer egg prices won’t increase at all because of the referendum’s passage.

According to the Times story, “For months farmers had contended that the measure would drive up egg prices or even put them out of business because of the high cost of retrofitting their farms with cage-free facilities. But the measure's proponents and a respected state agriculture expert stressed Wednesday that such results were unlikely, especially in the short term. Proposition 2, approved by a nearly 2-to-1 margin, doesn't take effect until 2015.

“Also, California imports a third of the shelled eggs it consumes from out-of-state producers, which are not subject to the new regulations. There would be no reason for a jump in the price of those eggs, according to a study on the economic effects of the proposition from the UC Davis Agricultural Issues Center. Out-of-state producers would also be likely to increase their production to feed Californians.”

The Times also notes that while the “measure bans confining crates and cages for hens, pregnant pigs and veal calves that don't allow the animals to turn around, lie down and extend their limbs,” there are, in fact, “few veal producers here and the largest pork producer voluntarily eliminated crates,” and so it is California egg producers who potentially will feel the greatest impact because it will be too costly to retrofit their farms.

Published on: November 6, 2008

• The Wall Street Journal reports that a new survey by Shop.org projects that “online retailers expect sales growth to slow this holiday season from recent years, but more than half … anticipate ringing up at least a 15% increase from last year … Shop.org expects online retail sales to rise 17% for the whole year to $204 billion.”

The story also reports that “a majority of the online retailers surveyed in October said they plan to offer free shipping to attract customers, but 21% of them said they would raise the minimum purchase requirement this year. Retailers also said were focused on revamping Web sites to increase online sales: 43% said they are adding product videos, 33% are adding customer reviews and 25% are creating Facebook pages to promote their sites. To appeal to price-conscious customers, 27% said they are adding clearance sale pages to their sites.”

Published on: November 6, 2008

• Costco Wholesale reported October sales of $5.3 billion, up two percent from the $5.21 billion reported for the same period a year ago. US same-stores sales for the month were up two percent, though international sales down 10 percent, for a total same-store sales decline of one percent.

• Whole Foods has announced that its fourth quarter earnings were $1.5 million, down dramatically from the $33 million in earnings recorded during the same period a year ago. Q4 sales were $1.79 billion, up from $1.74 billion last year,

Whole Foods also said yesterday that Lenard Green & Partners, a retail investment group, has purchased %425 million worth of preferred stock in the company, which if converted to common stock, would equate to 17 percent of the company. CEO John Mackey said that the investment would give the company financial flexibility to deal with challenges brought on by a declining economy.

• Ahold said today that its total company third quarter sales were the equivalent of $7.5 billion (US), up 3.9 percent from the same period a year ago ad up 7.6 percent at constant exchange rates.

The company said that its Stop & Shop / Giant of Landover division saw Q3 sales increase 4.4 percent to $3.9 billion (US), with same-store sales up 4.8% at Stop & Shop and 1.0% at Giant-Landover. Giant-Carlisle’s Q3 net sales were up 11.8% to $1.1 billion, on same-store sales that were up 8.7 percent.

• Sara Lee reported Q1 net income of $230 million, up 15 percent from $200 million a year earlier. Sales rose nearly 10 percent, to $3.35 billion.

Published on: November 6, 2008

• Bob Loeffler, the COO of HE Butt Grocery Co., has been named the company’s president, becoming the first person to hold that title since the retirement of James “Fully” Clingman retired in 2002. The move makes Loeffler the official number two executive in the company, with Charles Butt continuing as chairman/CEO.

Loeffler will be succeeded in the COO role by Craig Boyan, who has been serving as chief strategic officer.

Martin Otto, the chain’s interim CFO, has had the “interim” taken out of his job title, and also has been named executive vice president of merchandising and procurement.

• Brian Hotarek, the president/CEO of Bi-Lo, has decided to retire effective the end of the year, and will be succeeded on an interim basis by Randall Onstead, a member of the company’s board and the former chairman/CEO of Randalls Food Markets.

Published on: November 6, 2008

Michael Crichton, the Harvard-trained physician who also was a bestselling author (“Jurassic Park,” “The Andromeda Strain”), movie writer/director (“The Great Train Robbery,” “Westworld”), and television producer (“ER”), died Tuesday of cancer. He was 66.

Published on: November 6, 2008

…will return.

Published on: November 6, 2008

Now available on iTunes

To hear Kevin Coupe’s weekly radio commentary, click on the “MNB Radio” icon on the left hand side of the home page, or just go to:

http://www.morningnewsbeat.com/Radio/Radio_Listen_S.las


Hi, I’m Kevin Coupe, and this is MorningNewsBeat Radio, coming to you this morning from Buenos Aires, Argentina.

MorningNewsBeat Radio is sponsored by Webstop, your first stop for retail website design services.

This is my first trip to South America, and I’ve been fascinated with much of what I have seen. I’ll have more about that tomorrow in my weekly “OffBeat” column.

For the moment, I’d like to share a different part of the experience with you…mostly because it speaks to how the world is changing in ways that we all have to embrace.

I’ve spent a lot of time on the road over the past couple of decades, and I love it. But even after all these years, I find packing to be an annoying part of the process, mostly because I’m not particularly good at it. Not the clothes so much, but the reading material – I always tend to bring a stack of magazines and newspapers and at least a couple of books. That makes for a pretty thick bag, and probably explains why one shoulder is a little lower than the other. Despite my best efforts I always tend to bring too much.

Not this trip, though. Because before I left, Mrs. Content Guy and my kids gave me a Kindle for my birthday.

And while I have not figured the whole thing out yet, this is an amazing piece of equipment – light, small, and able to almost instantly download books, magazines, newspapers and blogs. The act of turning the electronic pages is easy and instinctive, and I’m already in love with the thing.

It is worth pointing out that, for those of you who don't know it, the Kindle is essentially a private label product created by Amazon.com, allowing it to gain market share in the book download business in addition to all the other stuff it sells. I have to say that I admire the fact that Amazon and its CEO, Jeff Bezos, didn’t just wait for other people to create the kind of technology that they wanted…but focused on innovating in the hardware sector as well as the software sector in which it has far greater experience.

Now I look inside my bag, and I see a laptop. A digital camera. An iPhone. An iPod,, on which I have not just music but also movies and television programs that I want to catch up on. And now, the Kindle.

In some ways, the biggest problem is keeping the power cords straight.

But it is extraordinary. I can read or watch practically anything and can contact almost anyone, and it all comes down to a bunch of wires and tubes and other stuff that I don't really understand but am perfectly capable of using.

The only paper thing I need is my passport. And that’ll probably get converted to a digital form sometime soon…

The big lesson is this. I’m not sure that I could have imagined this sort of change as recently as five years ago, and I have no idea what the next five years will bring.

Which is why none of us should ever think that we should be building businesses for the world as it exists today. Because today ends in just a few hours, and tomorrow is likely to throw us a whole new set of threats, challenges, and opportunities.

I intend to read about them on my Kindle, until the next best thing comes along.

For MorningNewsBeat Radio, I’m Kevin Coupe.