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    Published on: December 11, 2008

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    Hi, I’m Kevin Coupe and this is MorningNewsBeat Radio, brought to you by Webstop, experts in the art of retail website design.

    Regular visitors to MorningNewsBeat know that I am an enthusiastic user of and advocate for Amazon.com, having been a customer of the pioneering e-commerce business since March 19, 1997, when I placed my first book order with Amazon. That makes me a fairly early adopter…though I was actually a little disappointed when I found out that the company’s first fiscal year in business was 1996, during which it generated $15.7 million in sales. In 1997, the year I started doing business with it, the number went up 800 percent…not just because of me, I hasten to add. (I’m actually better off if Mrs. Content Guy remains in the dark about all the things I’ve bought through Amazon over the years.) These days, Amazon is up to something like $15 billion in annual sales. And all I can say is, I wish that when I’d bought that first book back in 1997, I’d also bought stock.

    I mention all this because I was intrigued with an interview that Amazon CEO Jeff Bezos gave to Smart Money recently, in which he talked a little about the development process behind the Kindle, the electronic book reader that is proprietary to Amazon. I’ve mentioned before that I am a new convert to the Kindle, and an enthusiastic one…my only frustration is that not every book I’m interested in is yet available in an e-format. But I’m confident that will change.

    Anyway, Bezos tells Smart Money that the Kindle was a response to customer needs, at which point the interviewer points out that nobody actually asked for the Kindle. And Bezos says something really smart:

    “It's not the customers' job to invent for themselves,” he says. “Four years ago we thought about extensions to our business. We took a look at what we're good at. On Kindle, we had been selling e-books for years, but you needed an electron microscope to see the sales.”

    When you think about it, a smart retailer or manufacturer doesn’t need customer requests to know what customers need. You just need to pay attention, and use a little imagination.

    In Amazon’s case, they saw that e-book technology existed but hadn’t been adopted with the alacrity, say, that the iPod has been adopted by music, movie and TV lovers. And they were selling more books than anyone else, so they knew there was a hunger for the written word…and knew intuitively that the written word is not necessarily the same thing as the printed word, especially for the younger generation that consumes most of its news in electronic format anyway. Adding in wireless download capabilities was a logical next step…and suddenly you have a product that has the potential to be a game-changer.

    Does it mean that all of our innovations are going to be like the iPod? Of course not. The Kindle, at least as it is constituted now, won’t be the iPod…but I guarantee you that they’re working on the next iteration, and even the one after that.

    In all of our businesses, that’s what we have to do. It is sort of like adding two plus two and coming up with five. Sometimes, maybe most of the time, that may be the wrong answer. But it also can be the right answer, and we all live for those moments.

    Marketing expert Martin Lindstrom likes to say that the “power brands” are the ones that inspire near-religious fervor among their users. They do so by having a vision, by being innovative and differentiated, and by tapping into consumer desires and needs that most customers may not even know they have.

    And while these days may seem like the kind during which mere survival is enough, nothing could be further from the truth. If we’re not trying to connect with our customers in new and different ways – big and small, it almost doesn’t matter – then we are setting the table for our own obsolescence.

    For MNB Radio, I’m Kevin Coupe.

    KC's View:

    Published on: December 11, 2008

    In Canada, the CBC reports that “after a five-year battle between company and union, Weyburn, Sask., is now home to the only unionized Wal-Mart in Western Canada. The retail store in southeast Saskatchewan has been officially certified, according to a 71-page decision from the Saskatchewan Labour Relations Board that was released Monday.”

    Walmart Canada reportedly plans to fight the certification in the courts, arguing that there was no actual employee vote on the certification. However, the retailer has been ordered to begin negotiations with the United Food and Commercial Workers (UFCW).

    KC's View:
    Hope the employees at the Weyburn store have been putting money aside. Because if Walmart can’t achieve decertification in the courts, that store is going to be found to be unproductive and unnecessary…and almost certainly will be closed.

    After all, in Canada that seems to Walmart’s ultimate response to union organizers.

    Sort of like the Doomsday Machine in “Star Trek.”

    Published on: December 11, 2008

    USA Today reports on a wide-ranging interview with Kraft CEO Irene Rosenfeld. Excerpts:

    The recession’s silver lining: “The great news is that as the economy has softened around the world, we're seeing people eating more at home. And as they come home, they're coming home to Kraft. So we are battening down our hatches and preparing to continue to compete in a difficult environment … We're certainly seeing (strength in) products that provide obvious value: powdered beverages like Kool-Aid and Crystal Light, for example, in comparison to ready-to-drink alternatives. We're finding that people are eating grilled cheese a lot more.

    We're seeing products like DiGiorno pizza, in contrast to pizzeria pizza or restaurant pizza, are performing quite well. Even products like Oscar Mayer meats are having a resurgence. People are eating hot dogs more for dinner.”

    An example of Kraft’s corporate transformation: “One of the things that has been most helpful to us as we are transforming Kraft is to unleash the power to our people.

    “For example, there's a guy in our Canadian operation who has a passion for Halal products. He practices Halal himself and adheres to the dietary restrictions of the Muslim religion. He has been a terrific advocate of our opportunity to make more of our products available to those consumers. He has single-handedly taken on the task, laying out a business proposition, talking to the sales group about what they need. And we should have some products I would hope in the course of the next year in that market place.”

    On marketing: “We've definitely shifted to more of a value story. So far, it's serving us quite well … As we continue to look for opportunities for a mass message, TV is one of the cheapest vehicles around.

    “Increasingly, though, that's not where people are spending their time. I had an opportunity at lunch today to talk with a number of students, and increasingly they're turning to digital media and the Internet for their information. Even in developing markets, we're seeing the growth of digital communication is proceeding at a very rapid pace. And that's where we're putting our money.”

    On the private label threat: “For too long we in the U.S. — and I would say, quite frankly, we at Kraft — did not take seriously the private-label threat. We are working with our customers to create win-win economic propositions so their private labels can thrive at the same time that our branded products can thrive.

    “The good news is, in many cases, our products will still drive category demand, and the investments we're making in marketing and new product development have everything to do with the growth of those categories. That's what will continue to keep us healthy over time.”

    KC's View:
    Tell you one thing. We’ve had more grilled cheese sandwiches in the past month in the Coupe household than in the past two years.

    So she’s got that right.

    Also, I love the Halal story. That’s the kind of grass roots innovation that I think ought to be a model for more organizations.

    Published on: December 11, 2008

    The Washington Post has a terrific story this morning about Anna Sam, a Frenchwoman who took a job as a supermarket checkout person at age 20, hoping to make enough money to put herself through college.

    Sam has, however, done a little better than that – because she turned eight years at her job into a book entitled “Tribulations of a Cashier,” which has become a bestseller in France and may become both a movie and a stage musical.

    The Post writes, “The success of her book and the fame it has earned her are proof that, even in an increasingly complicated world, ordinary people can still change things in France by putting forth strong ideas and compelling political leaders to listen. From the beginning, Sam said, her goal was to describe life in the workplace from the perspective of someone who had actually been there, not someone who had studied it in graduate school or read a government report on it.”

    And, the story goes on, “Much of the book was designed to bring smiles, such as the description of customers who try to cut in line and act offended when they are called on it, or who continue foraging through the aisles even though the store is closing. There is the couple that get in a violent argument just as they arrive at the register. Or the couple that fake an argument in an attempt to smuggle out their shoplifted sausages. Not to mention the couple that suddenly feels the urge to express ardent mutual affection when all the cashier wants is 9.99 euros so she can move on to the next shopper … Although the tone remains jocular throughout the book, some of the situations described by Sam were not part of the joke. The part-time work schedules, for instance, that spread out the hours in such a way that no day would be free. And the rhythm of beeps that had to be maintained to keep customers moving toward the exits with their purchases.

    “The least funny incident, perhaps, was the time Sam watched a mother point at the register and tell her restless child, as if Sam could not also hear the words, ‘You see, dear, if you do not work hard at school, you will become a cashier, like the lady’.”

    KC's View:
    This book may have been written in France, but you know that American publishers will be hunting for a US version.

    Can't wait to read it. And to see the movie.

    Published on: December 11, 2008

    The Boston Globe reports that the recession is having an impact on the sale of organic foods, and that “sales figures show that shoppers are having second thoughts about the value of organic foods, particularly fruits, vegetables and meats. But they're not giving up entirely on these products … Market research firm NPD Group said the number of people who reported buying organic products fell 4 percent in August, compared with a year earlier. While more than one in five surveyed in the latest figures available from NPD purchased organic products, the August data represented the first customer losses for the sector since February 2006 -- a decline that is expected to accelerate in the months ahead.”

    One thing that is happening is that consumers are making choices depending on priorities – picking categories and products that they feel are worth splurging on, with different consumers making different choices.

    Another result of the changed environment is that organic producers are investing more than usual in promotions, coupons and advertising.

    The extent of the recession’s impact depends on who you talk to. The Globe reports that “despite the challenges, the Organic Trade Association forecasts sales of organic foods will rise by 18 percent a year, on average, through 2010. The association expects its customer base to grow on the assumption that prices will drop and mainstream retailers will stock a wider variety of products … Organic sales – not including store brands or bulk sales -- were forecast to grow by 14 percent in 2008, compared with increases of 16 percent in 2007, 22 percent in 2006 and 21 percent in 2005, according to market research firm Mintel International.”

    KC's View:
    Even consumers of organic products are feeling the recession’s pinch, so it is entirely reasonable to expect sales not to grow as much as in the past.

    It seems to me, though, that it is critical that organic retailers and manufacturers not lose sight of the fact that they are offering an alternative to traditional products, and not lose sight that they need to maintain a kind of purity in terms of how their products are made. Organic still has to mean organic – and cutting corners because of the recession will not be acceptable to consumers and will only hurt the industry in the long term.

    Published on: December 11, 2008

    In Toronto, the Globe and Mail reports that Loblaw’s parent company, George Weston Ltd., is selling its US bakery business to Mexican manufacturer Grupo Bimbo for $2.4 billion (US).

    The paper suggests that this could be a prelude to Weston deciding to make some acquisitions, with speculation centering on Safeway’s Canadian operations or the Overwaitea chain in British Columbia.

    The sale of the bakery business is part of a broader move on the part of Weston to sell of non-core businesses and put more of a focus on its retail operations. The story says that Weston is becoming cash-rich, which puts it in a position to make purchases during a recessionary period during which prices may be coming down.

    KC's View:

    Published on: December 11, 2008

    The Washington Post reports that leadership at the Service Employees International Union (SEIU) have denied any improper or illegal relationship with Illinois Gov. Rod Blagojevich, who has been accused of trying to “sell” the US Senate seat vacated by President-elect Barack Obama.

    According to reports, Blagojevich is caught on tape saying that he might be able to get a high-paying job with Change To Win, a coalition of unions dominated by SEIU, if he appointed he right person to the Senate post.

    The Post reports, “A spokesman for Change to Win said: ‘No one connected with Change to Win ever considered, discussed or promised any position at Change to Win to Governor Blagojevich, his staff or his advisers. In the affidavit released by the United States Attorney, a position at Change to Win is discussed only in conversations between the governor and his advisers’.”

    KC's View:

    Published on: December 11, 2008

    • Published reports say that in the UK, Tesco will be looking to goose holiday sales with a 50 percent sale on more than a thousand SKUs, ranging from champagne to children’s toys, bicycles to Christmas pudding.

    Richard Brasher, Tesco's commercial director, tells the Daily Telegraph that "customers are telling us that they are delaying their main Christmas purchases as they wait for bargains. Some say that a bit of the pleasure they usually get from buying gifts has gone in the current climate … Our Half Price Sale reassures customers that we're not making them wait."

    KC's View:

    Published on: December 11, 2008

    The Syracuse Post Standard reports that New York Supermarkets Inc., “the owner of three New York City grocery stores, has agreed to pay $750,000 to settle claims that he failed to give workers a proper wage. The settlement with the state attorney general's office will cover back pay to about 370 employees of markets in Queens and Manhattan.

    “Department of Labor investigators say the workers were averaging 15 hours a week in overtime, but weren't getting overtime pay. Officials say some workers also weren't paid the minimum wage.”

    KC's View:
    Gee, I thought only Walmart got accused of such things.

    Here’s the real lesson. This kind of stuff probably happens more than ever gets reported. Retailers need to make sure their own houses are in order.

    Published on: December 11, 2008

    • The Washington Post reports that retailers in South Korea finally are selling US beef again, after years of the product being banned because of concerns about mad cow disease, and months of consumer resistance that persisted even after the ban was lifted earlier this year. According to the story, “Fifty tons of U.S. beef disappeared from shelves the first day it was offered for sale” by three major food retailers there.

    • The Los Angeles Times reports that for the first time in a decade, Italian wine production may exceed French wine production – largely because of better weather in Italy, but also because of improved methodology and quality.

    • Office Depot has announced that it will close 112 of its North American stores, or about nine percent of the fleet, and eliminate 2,200 jobs over the next three months. The goal is to cut costs and try to close the gap with Staples…though analysts seem to remain skeptical.

    KC's View:

    Published on: December 11, 2008

    • Costco this morning reported that its first quarter earnings were $262.5 million, compared with $262 million in the year-earlier period. Q1 net sales were $16.04 billion from $15.47 billion. Total revenue, including membership fees, rose 3.7 percent to $16.39 billion from $15.81 billion. Same-store sales were up one percent.
    KC's View:

    Published on: December 11, 2008

    Commenting yesterday on the fact that the new CEOs of both the Food Marketing Institute (FMI) and the Grocery Manufacturers Association (GMA) are women, I wrote:

    It is interesting that at both FMI and GMA, the new CEOs are women who have long experience in the trade association world. It certainly is a good thing that these jobs have not been filled by the same middle aged white guys who tend to get these gigs, but it is just as noteworthy that the trade association mold is not being broken – there had been some expectation that with so many changes taking place in industry and government, this might be an interesting time for more unorthodox choices. As one person said to me yesterday, “If all you have is a hammer, everything looks like a nail.”

    To which MNB user Joe Crocker wrote:

    Maybe the readers of MorningNewsBeat would be better served by a woman than a "middle aged white guy.”

    True. It would sadden me, but I certainly have to acknowledge the possibility that some folks might not find me to be as funny, perceptive and downright adorable as I think I am…and that gender might be part of the problem.

    I’m just going to keep going until my age and my gender catch up with me.




    Responding to yesterday’s e-interview with Tesco’s Terry Babbs about the new consortium of companies making up the Global Social Compliance Programme (GSCP), one MNB user wrote:

    Most interesting that your dialogue with Terry Babbs about the Global Social Compliance Program, of which Walmart is a part, is followed immediately by Walmart’s settlement of $54 million for forcing workers to work off the clock for no pay in the US.

    Do you really think that this is any more than PR for these companies? I read no details about insisting on fair wages or improved working conditions but did see that there are; ”No plans to push for regulations.”

    I would love to see a follow up as to exactly how this group has improved conditions for someone, somewhere or am I missing the point of this group. Do you know if there is any information regarding something actually happening to benefit working people as a result of pressure from this group of corporations?


    This is a new effort, so there is nothing to show yet…but I promise that this is something that we will continue to watch and follow up on.

    Through my work over the years, I’ve gotten to know some of the players involved with GSCP, and I have little reason to doubt their commitment, sincerity or good intentions. But your point is a good one – there has to be a result, or it will just be perceived as PR.

    As for your Walmart note, I would only say that nobody and no company is perfect. And your point is a legitimate one. Walmart runs the risk of looking insincere when such stories overlap.




    Also regarding Walmart, and its settlement of a case in which it was accused of forcing workers to labor of the clock, one MNB user wrote:

    This company is possibly one of the worst things to happen to the world. Regardless of savvy marketing strategies and a “don’t worry, be happy” funny face bouncing around on high prices, a company that puts profits before their employees is doomed to fail. I will be glad if I live long enough to see that day come for Wal-Mart.




    I praised Safeway the other day for getting involved in a real estate venture, and said that the company was smart to be spreading around the risk. One MNB user disagreed:

    In a few years, I’ll bet you say they should have stayed focused on their core business. A few successes with little risk lead to bigger projects with more risk in areas they are not experts. (Although at present…they (Burd) seem to be leading rather successfully.)

    Hardly a week goes by when I’m not proven to be wrong about something. (Though Mrs. Content Guy would probably say “hardly a day goes by…)




    I suggested that Lee Scott, the retiring CEO of Walmart, would make a terrific auto czar if there is a taxpayer bailout of GM, Ford and Chrysler. But MNB user Ken Wagar disagreed:

    While I understand your promotion of Lee Scott for “car czar” particularly from an efficiency perspective and the size of the organization do we really want to buy cars based on a Wal-Mart business model? I’m not so sure. Other than being retired what makes Lee a better choice than say Danny Wegman or someone from Publix both of which I would suggest have shown more capacity for consumer responsiveness as well as high quality and a pleasant shopping experience-something the auto companies desperately need?

    I would think Lee would bring as much negative baggage along as he would positive attributes although that might also be true of anyone else.

    Nothing at all against Lee but other than efficiency I’m not sure there is a great deal of relevance.


    Another MNB user wrote:

    Yeah, he’d be good…but it is really different to build a company than to oversee a mess---he might be at a profound disadvantage. But I doubt he be beholden to getting some Congressperson’s son a job---which probably disqualifies him. Here’s another idea, get Chris Dodd to resign the Senate, give up his pension, and work for $1 a year…he seems to know everything wrong. If he is successful, he gets his pension back, if not he has to go out and get a real job or unemployment as the case may be.

    MNB user Kevin Sheehan wrote:

    I’ve got a life size picture of Lee Scott being appointed to be the government head of the auto industry after the way organized labor supported Obama’s candidacy!

    Agree, good choice, but the snowman’s got a better chance in …. than this does of happening……


    On the other hand, Obama kept Robert Gates as Secretary of Defense. Anything is possible.




    There was another email yesterday that criticized me for paying too much time praising Whole Foods and not enough time focusing on chains such as Walmart, Wegmans, Harris Teeter and HEB…an assessment that I actually disagreed with.

    To which another MNB user responded:

    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.”

    In your coverage response on the topic of GMA gets a new CEO, you stated, “there had been some expectation that with so many changes taking place in industry and government, this might be an interesting time for more unorthodox choices.”

    The person’s “Whole Foods” response in Your Views to MNB.com’s daily muses about creativity and innovation within the industry in the context of companies making those innovative changes…his only response was to develop an argument against change. This person’s response is perhaps why your call for a more unorthodox choice is most appropriate. Keep up the good work. It may seem like a daily routine of beating your head against a brick wall, but some of us listen to the higher concepts expressed rather than getting mired in minutia and fighting change.


    Y’know what I may love most about MorningNewsBeat? That it is the kind of website that in any given week will have references to both “Ghostbusters” and John Kenneth Galbraith.




    And, speaking of “Ghostbusters”…

    Earlier this week, commenting on a story about adding cranberry concentrate to ground beef to fight E. coli, I commented:

    The problem, of course, is that if you start adding cranberry concentrate to beef, cows start thinking that they are turkeys. And then, you head down the road toward a disaster of biblical proportions, real wrath-of-God type stuff. Fire and brimstone coming down from the sky! Rivers and seas boiling! Forty years of darkness! Earthquakes, volcanoes...The dead rising from the grave! Human sacrifice, dogs and cats living together - MASS HYSTERIA!

    In other words, something strange in the neighborhood.


    The bulk of this commentary, of course, is a direct steal from the original “Ghostbusters,” still one of the funniest movies made during the eighties, with Bill Murray delivering one of the funniest performances ever.

    Now, it was interesting. Almost immediately after the website was posted, one MNB user emailed me:

    Your use of Bill Murray's quote from "Ghostbuster's" was probably not well recognized but it did add that certain bit of 'Coupe charm' to this morning's MNB.

    But that’s the funny thing. I got dozens of emails from people responding specifically to the “Ghostbusters” quote. They included:

    • Do you have a concept to shop to the studios? Is Bill Murray still available?

    • You made my day this morning when I read your reaction to the idea of adding cranberry concentrate to ground beef. As I started to read your view, I was hoping you would get to the “dogs and cats living together” line. You didn’t disappoint. Thanks for the laugh! I little Bill Murray humor never hurt anyone.

    • Well played, Kevin.

    • Thanks for the “Ghostbusters” reference and a quick chuckle on an ugly weather day in Chicago.

    • Your “Ghostbusters” reference completely made my day!

    • LOVE IT when you use movie quotes!!!! The “Ghostbusters” line is one of my favorites!

    • This is the Kevin we all know and love…


    And this is just a smattering of the emails.

    Just proving that the MorningNewsBeat community is made up of cool, savvy, funny people who have a sense of humor.

    I never had any doubt.

    Who ya gonna call?

    KC's View: