retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: January 28, 2009

    Reuters reports that incoming Walmart CEO Mike Duke plans to “accelerate” and “broaden” the company’s sustainability initiatives, saying at a Sustainability Milestone Meeting this week, “I am very serious about it. This is not optional. It's not something of the past. This is all about the future."

    Duke made the point that he expects suppliers to meet exacting environmental standards in the products they manufacture and the packaging they use. “"The leaders that get ahead in Wal-Mart will be ones that demonstrate their commitment to sustainability," he said. "You won't be able, in the future, to really be viewed in the same way if you put this on the back burner."

    As noted in the Reuters story, current Walmart CEO Lee Scott “began the retailer's environmental push in 2005, outlining plans to one day use only renewable energy and creating zero waste. The efforts have been seen as a way for Wal-Mart to improve its reputation, help the environment and cut costs.

    “To that end, Wal-Mart has increased its use of solar and wind power, pushed vendors to make electronics more energy-efficient and switched to selling only concentrated laundry detergent in its U.S. stores.”

    In related news, Dow Jones reports that Walmart’s Canada division plans a new environmentally themed private label program called “For The Greener Good.”

    According to the story, “Wal-Mart Canada spokesman Andrew Pelletier said later that the company hopes to have 200 products carrying the For the Greener Good label by the end of 2009, and that the brand will cross several categories, including consumables, hardlines, health and wellness, and apparel. CFL bulbs, household cleaners, detergents, and small appliances are a few examples of products the program will likely include, he said.”

    KC's View:
    At some level, I have to believe that the folks at Walmart love it when they read debates like the one that has been taking place on MNB the past few days, as folks argue back and forth about whether climate change has been accelerated or created by man’s indifference to the environment, and whether sustainability efforts actually can have much impact on a planet that some people seem to believe they have little or no responsibility for nurturing.

    Because the folks at Walmart seem to know that being “green” has a variety of bottom line implications. They have grabbed this issue by the horns and have decided to make it work for their company both in terms of environmental impact, financial advantage and image sustainability.

    You guys keep arguing, the folks at Walmart likely are saying. You’ll be like Nero, fiddling while Rome burns…and meanwhile, we’ll be selling water and fire extinguishers.

    BTW…I had the chance to interview Mike Duke a year and a half ago in Shanghai at the CIES World Food Business Summit, and I was impressed by his straightforward commitment to this issue. We talked a lot about it that day, and this re-stated dedication to Walmart’s sustainability focus does not surprise me at all.

    Published on: January 28, 2009

    USA Today reports this morning that the US Food and Drug Administration (FDA) has accused Peanut Corp. of America of shipping products in 2007 and 2008 that it knew was contaminated with salmonella.

    Peanut Corp. has been implicated in the current salmonella outbreak that has sickened more than 500 people and may have contributed to eight deaths.

    According to the story, “The Food and Drug Administration said that its inspection of the PCA plant in Blakely, Ga., found records of 12 instances in which plant officials identified salmonella in ingredients or finished products. The products should not have been shipped, the FDA says. PCA took no steps to address cleaning after finding the salmonella, says Michael Rogers, director of the FDA's division of field investigations. In some instances, the company had the product tested again by a different laboratory and got a clean test result, FDA officials said in a telephone conference with reporters.”

    KC's View:
    Well, the top executives at Peanut Corp. should be happy that they live in the US instead of China. Because if they lived in China, they’d be facing a death sentence…which is what happened to the people there who were implicated in the melamine contamination scandal.

    That said, if these accusations are true, these guys are disgusting. The company ought to be closed down now. It should have been closed down last year. And the execs who let this happen ought to be brought up on charges. Serious charges. Spend-time-up-the-river charges. (And I don't want to hear any senior executives blaming the guys in the plant for creating these problems … because you know that’ll be the first line of defense.)

    But there’s what else I don't get. Where the hell has the FDA been for the past two or three years? The FDA guys say that they want to expand their offices outside the US so that they do a better job of testing and tracking products being imported into this country…but if the FDA applies the same levels of efficiency and effectiveness that it has established in the US, I’m not sure that I feel reassured.

    (By the way…for another example of our tax dollars at work, check out the HFCS story below…)

    Published on: January 28, 2009

    MNB reported yesterday that “a new Cub Foods store opened in St. Paul, Minnesota, has been awarded EPA GreenChill Gold-Level Certification, which is given for outstanding use of environmentally-friendly refrigeration technology. In addition, the store is expected to earn LEED (Leadership in Energy and Environmental Design) NC 2.2 Gold Certification, which would make it the first Minnesota store to achieve that recognition.”

    Well, it was pointed out to us yesterday that the Cub store has some competition from a Minneapolis natural grocery co-op for the first Gold LEED certification in Minnesota.

    According ton one MNB user, “Seward Co-op Grocery and Deli opened a new building two weeks ago. They took an old, long-closed grocery building and did wonderful things with it - white roof to avoid the heat-island effect, natural light, energy efficiency such that while they doubled the size of their old building in this new one, the energy draw remains the same as the old building.”

    LEED, to be clear, stands for Leadership in Energy and Environmental Design. It “is a third-party certification program and nationally accepted benchmark for the design, construction and operation of high performance green buildings. LEED gives building owners and operators the tools they need to have an immediate and measurable impact on their buildings’ performance. The idea behind LEED is to promote a whole-building approach to sustainability by recognizing performance in the areas of human and environmental health.”

    On Seward’s website, it says that “Seward Co-op is a candidate for a Gold-level LEED certification. In order to achieve this, we have considered many elements of the construction of the new store, from the materials we used to our energy dependency to the green space around the site.” Among the innovations employed by the company, according to the site:

    • We have rejuvenated "brownfield" or dilapidated site.
    • The site is designed to capture and retain at least 90% of storm water.
    • We’ve added 25% more green space to the site than zoning requires.
    • White roofing material has been installed to minimize heat-island effects.
    • The building’s heating, ventilating and air conditioning (HVAC) and electric systems are designed to improve efficiency 17.5% above code requirements.
    • The co-op purchased "green power certificates," allowing us to use renewable power, replacing 70% of the power drawn from the local grid.
    • More than 95% of construction waste from the site was diverted from landfills.
    • 20% of construction materials are made from recycled materials.
    • 10% of construction materials are regional.
    • We have initiated a "Green Cleaning" protocol, including the use of nontoxic cleaners such as anolyte and catholyte, to protect well-being of employees and customers.

    KC's View:
    Making the point that it isn’t just Walmart that is moving ahead on such issues while other people engage in endless debate. It also is big companies like Supervalu, as well as much smaller organizations, all looking for a bottom line differential advantage even as they work to do the right thing.

    Published on: January 28, 2009

    AdWeek reports that a new CMO Council study reveals that “of the 500 marketing chiefs surveyed, only 16 percent regularly monitor online message boards for complaints and feedback. This despite the fact that 58 percent of them believe the Internet and social media have changed the level of influence and expectations of their customers.”

    Among the other findings, according to AdWeek: “Some 60 percent said their companies don't tie compensation to achieving customer satisfaction and loyalty. Just 23 percent said their companies track or measure customer feedback e-mails and only 37 percent said they gather insights from customer engagement situations.”

    KC's View:
    At least some of the experts analyzing this study seem to believe that part of the problem is that most CMOs don't “own” the customer-centric initiatives within their organizations…which, when you think about it, is both nuts and an entirely credible reading of how most companies operate.

    The problem isn’t just that CMOs aren’t paying attention to the very technological tools that have been designed to give them access to how consumers think and feel. It is that so many marketing executives don't have the time or inclination to spend time with real shoppers, or are so caught up trying to cut costs or get efficient that they are unable to work at being effective and relevant and growing market share.

    Published on: January 28, 2009

    The Conference Board said yesterday that its consumer confidence index hit an all-time low of 37.7 in January, down from 38.6 in December.

    The index was at 87.3 in January 2008.

    "Consumers have begun the New Year with the same degree of pessimism that they exhibited in the final months of 2008," said Lynn Franco, director of The Conference Board Consumer Research Center.

    KC's View:

    Published on: January 28, 2009

    • MyWebGrocer announced yesterday that Peapod, serving 14 major US
    markets, is joining the MyWebGrocer Ad Network. With the addition of Peapod, the majority of the nation’s retail grocery e-commerce transactions occur within the MyWebGrocer Advertising Network, which covers 85 percent of the US, earning their clients direct ad revenue. Some of its clients include Shoprite, Lowes Food Stores, Big Y, Food Lion and 90 other grocery chains.

    “The addition of Peapod, who has set the bar in e-commerce, is a significant milestone in our Ad Network’s rapid growth” said Rich Tarrant, CEO of MyWebGrocer. “In less than a year we have demonstrated the power for our network to drive sales at the digital shelf for both retailers and CPG manufacturers. If a brand manager wants to communicate with online grocery shoppers, then the MyWebGrocer advertising network is the place to find them with credit card in hand.”

    • Cellfire, the digital grocery coupon service, announced yesterday the expansion of its program with The Kroger Co, which will make its digital coupons – from companies that include Colgate Palmolive, General Mills, and Kimberly-Clark - available via mobile phone or computer, and redeemable at more than 2,400 Kroger stores nationwide.

    KC's View:

    Published on: January 28, 2009

    Excellent story over on Phil Lempert’s site this morning, reporting that much of the high fructose corn syrup (HFCS) that is used as a common ingredient that extends shelf life and replaces sugar also contains mercury, which is toxic.

    The revelation was made by two new studies - one published in yesterday’s issue of the Environmental Health science journal, and the other also disclosed Jan. 26 by the Institute for Agriculture and Trade Policy (IATP).

    And here’s the kicker, according to “Mercury turned up in nine out of 20 samples” that were collected by one of the studies’ authors while she worked at the US Food and Drug Administration…but when the FDA didn’t press the issue, the author decided to make the findings public.

    “A good place to improve,” suggests, “would be in completing the phase-out of mercury cell technology, which is sometimes used to produce caustic soda to separate corn starch from the corn kernel. This process, says IATP, could contaminate the caustic soda and ultimately HFCS with mercury. Beyond that, we feel the more light we shine on any questionable aspects of HFCS, the smarter the food choices we all will make and the sooner federal food policies could address any possible risks of this substance.”

    The whole story is available at:

    KC's View:

    Published on: January 28, 2009

    Starbucks Corp. said yesterday that it will stop brewing decaffeinated coffee after 12 noon, part of its broader effort to cut $400 million in costs by September 2009.

    According to a statement released by the company, ““For many of our stores, the demand for decaf is greatly reduced in the afternoon. With our current standard of continually brewing decaf after 12 p.m. regardless of demand, we have seen a high amount of waste.”

    Starbucks said that it will make decaffeinated coffee on demand, and that it only takes about four minutes to brew a cup of decaf when requested by a patron.

    KC's View:
    To be honest, I don't even understand the concept of decaf. It is sort of like nonalcoholic beer. I mean, what’s the point? (I know I’ll get into trouble for this comment, but there it is. I can count the number of cups of decaf that I’ve consumed in my entire life on the fingers of one hand, and they were almost all because high-test wasn’t available. And I don't even need one finger to count the nonalcoholic beers I’ve consumed.)

    (One other parenthetical point. I thought most people drank decaf late in the day, rather in the morning, because the real stuff affects their sleep patterns. So I don't get the decaf-only-in-the-morning deal. But what do I know?)

    That said, I would suggest that the way Starbucks framed this decision is all wrong – it sounds like a blanket dictum that is efficiency-driven rather than customer-centric.

    If it were me, I would have suggested that the decision about whether to brew decaf in the afternoons would be left up to store managers, who could make the judgment based on their knowledge of and interaction with customers. Basic formulas could be established as a guideline, but the program could have been better positioned as keeping the company more in synch with shopper needs, rather than as part of a way to save $400 million.

    As it is, Starbucks may have handed its competition – ranging from Caribou Coffee to Dunkin’ Donuts to small independent coffee shops – a marketing theme.

    Published on: January 28, 2009

    Bloomberg reports that “Wal-Mart Stores Inc. will phase out Cott Corp. as its exclusive U.S. supplier of brand name sodas.”

    Walmart said that the existing decade-long contract has been terminated “without cause.”

    Cott released a statement saying that “conversations with Wal-Mart are ongoing, and the impact on Cott’s business is unclear at this time.”

    • In the UK, Walmart owned Asda Group has announced two recession-promoted initiatives.

    One, the company says that it rolling back prices on some 4,000 items this month, as it looks to reinforce its advertising theme, “Saving you money every day.”

    Two, the BBC reports that Asda has announced that it will create 7,000 new jobs in the UK this year. According to the story, 3,700 of the jobs will be in new stores and existing stores that are being expanded, while the rest will be in units like its home shopping business.

    And, the BBC noted, “Asda said it aimed to specifically target long-term unemployed people for 3,000 of the new vacancies, which are both full-time and part-time.”

    Similar moves have been announced recently by Tesco, Sainsbury and Waitrose.

    KC's View:

    Published on: January 28, 2009

    • The Los Angeles Times reports that Target Corp. plans to eliminate nine percent of its headquarters staff, with the cuts affecting 600 employees and 400 open positions,.

    Target also plans to close an Arkansas distribution center, which employs 500 people.

    The Times writes that “other cuts include a salary freeze for senior management, stopping share repurchases, tightening consumer credit-card underwriting and credit granting, improving store productivity and reducing planned store openings.”

    • Kroger Co. said yesterday that associates who are members of United Food & Commercial Workers (UFCW) have ratified a new labor agreement that covers more than 4,500 Kroger associates who work in 43 stores in central and southwest Virginia, northeast Tennessee, and southeast West Virginia.

    KC's View:

    Published on: January 28, 2009

    • Campbell Soup Co. said yesterday that its board of directors has elected Paul Charron, a member of the board, to succeed Harvey Golub as nonexecutive chairman, effective at the beginning of the company's next fiscal year in August.
    KC's View:

    Published on: January 28, 2009

    John Updike, a two-time Pulitzer Prize winner who wrote more than 50 books and countless pieces of literary and art criticism, short stories and poems for publications such as The New Yorker, died yesterday of lung cancer. He was 76.

    The Los Angeles Times writes this morning that “two of Updike's most memorable fictional characters, Harry ‘Rabbit’ Angstrom and Henry Bech, became emblems of the displaced American male that fascinated him as a writer. Angstrom, a man he often referred to as his alter-ego, is the disenchanted middle-class drifter in Updike's four-book series about ‘Rabbit.’ Bech is the Jewish American novelist, breaking away from his cultural roots and immigrant heritage to become a fully assimilated American. Each in his own way reflects Updike's major themes.”

    KC's View:
    I had forgotten, and Michael Sansolo reminded me, that Updike once wrote a short story called “A&P.” I went back to read it yesterday, and rediscovered that it is one of those perfect little “moment in time” stories that captures a time and place in miniature, and yet seems to have meaning that goes beyond the portrait itself.

    We should all have such an impact.

    Published on: January 28, 2009

    …will return.
    KC's View: