retail news in context, analysis with attitude

Published on: November 18, 2008

José Luis Durán, who has worked at Carrefour for almost two decades, is being replaced as CEO of the world’s second largest retailer by Nestlé executive Lars Olofsson.

The New York Times this morning says that “Carrefour has sought in recent years to expand in countries like China, Brazil, Taiwan and Romania to counter the flagging performance of its giant stores in France. The company has consistently missed market expectations for its results in recent years and the onset of the global economic crisis has further hurt its business as French consumers increasingly seek out discount stores.

“Carrefour denied in early August that it was seeking to replace Mr. Durán amid media reports said shareholders were unhappy with his leadership.”

While the timing may have been a surprise to some, the move was not entirely unexpected. Durán was removed from the board last July while allowed to keep the CEO role, and the company’s largest investors had been heightening their oversight of Carrefour’s strategic direction. One central disagreement, according to the Times, was that the investors were more focused on margins and profits than on overall volume.

The Financial Times this morning reports that Durán “is credited with having stabilised Carrefour, which has begun to claw back market share in France.” However, it seems to have been too little, too late.

Durán actually was the first non-Frenchman to hold the CEO job at Carrefour, and actually spoke no French when he came to the company.

The Times writes that “Amaury de Sèze, the Carrefour chairman, said Tuesday in the statement that Mr. Olofsson had ‘exceptional experience in consumer markets, built over more than 30 years, both in France and internationally, within the number one global food industry group.’ The company said that Mr. Olofsson, who served as chief executive of a Nestlé subsidiary in France, was ‘multicultural and fluent in French’.”

Published on: November 18, 2008

by Michael Sansolo

This may come as a shock to you, but I rarely read “Miss Manners.” (The thud you heard in the background was my mom fainting.) But last week her column caught my eye because of a reference to grocery shopping. A shopper wanted to know why cashiers felt it necessary to comment on the purchases she was making. The shopper felt this went beyond annoyance and couldn’t understand why it happens.

Miss Manners agreed. “Perhaps these are people who don't know the difference between being pleasant and being intrusive. But it is also possible that they have been instructed to chat up the customers, either because it is believed that the customers are as bored as the employees, or because it drives people like you to use the self scanners.”

I figure this will probably violate the code of good behavior, but I have a response for Miss Manners. Shut up!

Yes, there is a point at which chattiness goes too far. I never appreciate it when my waiter asks me if I am enjoying my meal either two seconds after it was placed in front of me or one second after I put something in my mouth. But what is so wrong with a cashier actually making human contact?

This is something I wish would happen more often and with some sense that it actually means something. We all love feeling supported, so I love it when a cashier comments that they actually like a food product I picked out. It shows they aren’t mindless and I like that. Plus, it makes me feel like a made a good choice.

Now, to be fair, the woman writing Miss Manners got pushed over the top when the cashier commented on the brand of tampons she was buying. Somehow we need the sales staff to keep in mind that not every purchase rates a comment. But all in all I’m betting there are many more shoppers who will enjoy the experience is the cashiers make connections.

This issue is more than just a customer annoyance. The Wall Street Journal ran a front-page story Monday about a computer system in use at Meijer to do exactly what Miss Manners desires: it measures cashier productivity to push for speed at the checkout and in the process reduces talk between the cashier and the shoppers. Now efficiency is great—and critically important in managing costs—but I’m not sure this is the way we want to go overall.

One problem we have in the store is too little interaction and too little that actually seems like sales. The question is how we balance customer interaction with productivity or efficiency vs. effectiveness and experience.

I wish stores would train to make interaction a more regular and value-added occurrence. Why can’t cashiers get a special sheet of specific items featured in a store? That way they have targeted topics with the shoppers. It could lead to additional sales and possibly bolster image in categories that stores are trying to make special. (Based on the WSJ article, Meijer shoppers are hearing a lot of complaints from cashiers about the system. That helps nothing.)

Can’t we manage some common sense too? Chattiness doesn’t work anymore than pointing out items that are personal and embarrassing. Maybe there’s a balance here.

Maybe Miss Manners could give us some guidance?

Ballot Box Lessons, Part 3

If you missed my two previous columns, I have tried to point out things business can learn from the recent election. Well, apparently politicians are doing the same…in reverse. Consider the following quote from former House Speaker Newt Gingrich at a Republican Party meeting last week as reported by Politico.com:

Gingrich said that the best thing the Republican Party could do right now is stop worrying about the Republican Party. “We need to worry about the nation. Wal-Mart doesn’t get ahead by attacking Sears but by offering better value.”

You just have to agree with Newt. It’s always all about the shopper!

Even at the checkout…

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

Published on: November 18, 2008

USA Today reports that “as consumers increasingly put a death grip on their dollars, marketers of food and packaged goods - even household staples such as milk, cereal, soup and laundry detergent - are wrangling with how to make their products into shopping basket survivors.” That means focusing on value without cheapening their overall image.

“Before the economic slide, many focused on getting consumers to trade up’ to their offerings, touting premium taste, quality or performance, as the reward for paying a higher price,” the paper writes. “ The trick now … is for marketers to tout value without cheapening brand image by overly playing up cost savings — or piling on promotional price cuts.” And at least part of the goal is to prevent consumers from making the move to private label products, which increasingly are seen by shoppers as being of equivalent value at lower prices.

Among the recommendations made by experts:

• Balancing the message between value and benefits.
• Taking advantage of increased consumer interest in at-home meal preparation.
• Talk “affordable,” not “cheap.” Value, experts say, is more than just a low price.
• Develop non-traditional alliances that can build exposure and market share.

Published on: November 18, 2008

The Nielsen Co. has released a new study saying that “nearly three-quarters (72 percent) of consumers believe store brands are good alternatives to name brands and 62 percent of consumers report they consider store brands to be as good as name brands, up three points since 2005. Private label products account for more than $81 billion in the U.S, up 10.2 percent over the past year.”

Other details from the study:

• “Nielsen’s survey indicates that an improved sense of quality is likely a driving factor for consumers’ positive attitude toward private label products.”

• “Sixteen percent of respondents maintain that store brands are not suitable when quality matters and 16 percent say store brands have ‘cheap-looking’ packaging.”

• “Seventy-four percent of consumers believe it is important to get the best price on a product. Two-thirds (67 percent) of consumers agree that store brands usually provide ‘extremely good value’ for the money while 35 percent of consumers are willing to pay the same or more for store brands if they like it. Just under a quarter (24 percent) of consumers believe that name brand products are worth the extra price.”

Published on: November 18, 2008

Content Guy’s Note: Michael Sansolo was in Chicago yesterday and dropped by the Private Label Manufacturers Association (PLMA) show, from which he filed the following thoughts:

ROSEMONT, Illinois -- It's rare to have a moment at a trade show that stops you in your tracks, but that actually happened to me at the Private Label Manufacturers Association show yesterday in Rosemont, IL. What stunned me was a line of premium products in dramatic black and white packaging from Aldi! Honestly, the display looked liked something we'd see at Byerly's or Whole Foods.

And it wasn't isolated. There was visually stunning packaging from other value merchants such as Lidl, Save A Lot and Walmart. All of which conveyed a clear message of quality and product, far superior to many other items I saw. In addition, some wonderful packaging for organic products was on display from Publix GreenWise and Supervalu. Some merchants are also heading back into discounted products reminiscent of the generics we saw in the 1970s, though in updated packaging. Gone are the black-and-white colors and added are statements of guaranteed value.

These products were all part of PLMA's Idea Supermarket - hunted down across the globe by PLMA and its members - which features interesting packaging, products and concepts from around the world and across category lines.

PLMA says more than 6,000 people attend the annual North American event.

Published on: November 18, 2008

Western New York-based Tops Friendly Markets said yesterday that it has become the first retailer to sell Anchor Bar Buffalo Wings, the local institution that uses a secret recipe for wings that have gained culinary renown.

CEO Frank Curci said that five varieties of Anchor Bar chicken wings are available, fully cooked, in the prepared food section of all Tops locations everyday.

Published on: November 18, 2008

Forbes reports that Johnson & Johnson’s McNeil Consumer Healthcare division ran into a consumer buzz saw last week when it posted an online ad for its Motrin pain reliever product.

The ad was positioned to appeal to new moms, suggesting that the act of “wearing babies” in slings and backpacks could actually lead to muscle pain, which is best alleviated through the use of Motrin. It doesn’t sound controversial, but some moms got upset with the tone of the ad, which among other things suggested that “wearing a baby” can make a woman “look like an official mom.”

A flood of criticisms hit the Internet on sites such as Twitter.com and YouTube.com, with some people even suggesting a boycott of the company.

The ad has been taken down (except, of course, on YouTube, where videos live forever). And Kathy Widmer, vp of marketing at the McNeil, released the following statement:

“I am the Vice President of Marketing for McNeil Consumer Healthcare. I have responsibility for the Motrin Brand, and am responding to concerns about recent advertising on our website. I am, myself, a mom of 3 daughters.

“We certainly did not mean to offend moms through our advertising. Instead, we had intended to demonstrate genuine sympathy and appreciation for all that parents do for their babies. We believe deeply that moms know best and we sincerely apologize for disappointing you. Please know that we take your feedback seriously and will take swift action with regard to this ad. We are in process of removing it from our website. It will take longer, unfortunately, for it to be removed from magazine print as it is currently on newsstands and in distribution.”

Published on: November 18, 2008

• Dow Jones reports that Target Corp. will cut its capital expenditures for 2009 from almost $4 billion to about $3 billion, and will scale back on planned new store openings – though the company declined to put a number on the stores that won’t be opened. However, the company reiterated its commitment to meeting Walmart on price wherever they compete.

• McDonald’s said yesterday that it plans to add 175 locations in China next year, a better than 10 percent increase from the 1,000 units that it currently is operating there.

Published on: November 18, 2008

• Target announced that its third quarter earnings were $369 million, down from $483 million during the same period a year ago. Q3 sales were up 1.7 percent to $14.6 billion, on same-store sales that were down 3.3 percent.

Published on: November 18, 2008

• Campbell Soup has named Sean Connolly, who has been running the company’s North American foodservice business, as president of Campbell Soup USA.

In addition, Irene Chang Britt has been named president of the company's North America food service operations. She has been the company’s vice president and general manager of sauces and beverages.

• Jamba Inc,. parent company to the Jamba Juice smoothie company, announced that it has hired James White, former senior vice president of consumer brands at Safeway, to be its new president/CEO.

Published on: November 18, 2008

On the subject of whether the troubled economy could finally lead to the imposition of sales taxes on products bought via the Internet – which I questioned in my commentary, reasoning that such taxes could kill an industry that continues to thrive in an environment where few industries are seeing any increases – one MNB user wrote:

Unless, of course, it success is because of the unfair competitive-advantage.

Fair point. But if you killed Internet sales, would those purchases automatically go to brick and mortar stores.

I doubt it.

Another MNB user wrote:

Think of no sales tax on the internet policy as a subsidy to get an industry off the ground. The on-line industry is no longer in it’s infancy. On-line retailing has several cost advantages over Bricks and Mortar (B&M) including but not limited to, lower overhead, lower rent, no sales tax, and likely higher sales revenue per employee, etc.

B&M also pay property taxes on their retail sites, whether direct or indirect (rent) vs. just paying real estate taxes on warehouse / distribution sites (likely at a lower rate). In essence, on-line merchants are getting a double tax break at this point, having to collect sales tax only levels the playing field a bit with the B&M establishments.

I for one never truly understood why you would give on-line merchants such a huge advantage when you have established retail businesses paying property and sales taxes already. The internet would have developed without the subsidy (don’t start me on ethanol).

Collecting sales taxes will not discourage on-line transactions. The convenience factor alone will drive continued growth of on line sales.

Maybe. But I’m not sure I’d risk it at this point.

But disagreement with my position continues, with another MNB user chiming in:

Level the playing field. Sales tax isn’t the only tax revenue that states are losing by on line buying. Gas taxes (not always a bad thing)– lost income taxes because fewer jobs are needed at brick and mortar stores and I am sure others, office supplies for example. Not wanting to pay sales tax in states with that tax is part of our American greed, for the consumer to buy cheap products from the third world where there are no labor rules, environmental rules etc., for the retailer to have an unfair advantage and thereby increase business at some other business’s expense.

Why wouldn’t they be taxed the same?

I understand the point. Just not sure it makes sense at this point.

And an MNB user raised the following question:

When I buy products on certain sites, I pay taxes - for example, I just bought some prints from Snapfish and paid sales tax for Ohio, which was where I was sending them (Grandma). On the other hand, I don't usually pay taxes when I buy something on eBay. Why is one business basically penalized by having to abide by sales tax rules? Especially in situations where the exact same product, new and in the box, can be bought either on eBay or through a standard retailer?

I’m not entirely sure, but it may have to do with whether the online retailer with which you are dealing has a physical presence in your state. If it does, they charge sales tax. If they don't. no tax applies.

At least for the moment.




On the subject of the Employee Free Choice Act (EFCA), one MNB user wrote:

On EFCA, there is a disaster looming for all companies where this would quickly be applied by union organizers. There are some fine places to work (Wegmans, HEB, many others) that are not unionized and have superior pay and benefits. If EFCA becomes the norm, these shops and others like them would become targets of union organizer bullying and intimidation, with campouts in front of warehouses and stores. Without a secret ballot, organizers can pester and intimidate people into signing the card just to get them out of their faces, possibly not realizing that card is their ballot. Soon, benefits and pay would fall to union minimum requirements, leaving many families worse off. I can also picture a trimming of the workforce to free up dollars for increasing the sizes of legal departments (always needed when unions are present).

My neighbor runs a Toyota truck plant (non-union) where this is certainly going to become a big issue. He tells me that the union people always have tables set up at entrances and are henpecking people to listen to their spiel and sign up every day of the week. Most pass them by because they already have good jobs and good benefits. Currently, people are not intimidated because they know there will be a secret ballot if the issue ever generates enough interest. Typically, several union folks try to corner one worker and convince them. If the law changes, this could get ugly. The plant recently closed for 100 days to let sales of trucks catch up with built inventories. Every worker was paid their normal pay and benefits throughout this period and worked in community volunteer projects instead of going to the factory every day. Now, they are all back to work and the plant will be producing again in a few days. Nobody lost anything and the community benefited. If American automakers had this sort of mindset, they wouldn't be in the trouble they are in today.




More about the ultimate hamburger list…

One MNB user wrote:

Loved your ultimate burger list just as I always enjoy your wine & dine suggestions -- thanks so much.

Shall we make things more interesting? I propose a potentially more challenging list: the ultimate Veggie Burger. Yes, there really IS more out there than the ubiquitous Garden Burger, so let's hear about it.

If you and your fellow adventurous eaters are game, I'll get the ball rolling:

BBQ "Bacon Cheeseburger" - Chicago Diner.

If people want to chime in on this, I’m happy to run the emails.

MNB user Al Kober had another burger joint to throw into the mix:

Menches Brothers: I heard all the other claims but here is where the hamburger was invented and they have the documentation to prove it.

One piece of bad news regarding Smokejack’s, a Vermont bistro that I mentioned weeks ago as having a great burger, and that was mentioned again yesterday in an email from an MNB user.

It’s closed.

RIP.

MNB user Chuck Ercanbrack wrote:

I reviewed the Best Burger list and was surprised that the Big Ass Burger made by the Roaring Fork here in Scottsdale, AZ didn't make the list. Next time you are in AZ be sure and give it a try with a nice cold beer. It will be, as you say, "Yummy".




One final note. Yesterday I ran a couple of emails criticizing me for using the Jimmy Buffett line from “Cheeseburger in Paradise” – “Good God Almighty, which way do I steer?” – in the headline about the ultimate hamburger list. They felt that I was being vulgar and irreverent in my use of the word “God,” and I responded by saying that while I felt bad that they were offended, I thought the usage completely appropriate. (When it comes to being irreverent, I plead guilty. Cheerfully.)

I got a number of emails from people who felt that I had nothing to apologize for. One typical email:

Criticism for using a Buffet Line in your commentary??????? Looks like Political Correctness continues to run amok!

I know you always try to be sensitive to the feeling s of your readers but it is commentary!! Please ignore the complaints and continue to deliver your beliefs and points in a way you consider proper not based on some lunatic fringe.

Good Luck always. Not your fault not all of your readers are Parrot Heads.

Sure glad you didn’t drop any lines from “A Pirate Looks at 40” into your text. That would have really been interesting.

Or, heaven help us, “Why Don't We get Drunk…”

I am reminded of what Jimmy Buffett said about Captain Tony Tarracino, the former mayor of Key West, Florida, and the owner of Captain Tony’s Saloon there, who passed away at age 92. Buffett already had written a song about Captain Tony, “Last Mango In Paris.” But in a concert just after his death, he said the following:

“Captain Tony had 14 children by eight women. That may not get him canonized, but it sure is cool.”

I like that a lot.

MNB may not get me canonized. But I hope it is at least a little bit cool, and I’ll settle for irreverent and a little bit different.

Published on: November 18, 2008

In Monday Night Football, the Cleveland Browns defeated the Buffalo Bills 29-27.