retail news in context, analysis with attitude

Published on: February 23, 2009

In the UK, the Times reports that Tim Mason, who is running Tesco’s Fresh & Easy operation in the United States, says in an interview that the company “got it wrong” in the US despite its much vaunted market research.

“We may have assumed that certain elements of the Fresh & Easy brand would do the work for us and we would not have to go down and dirty on price. That may have been a mistake,” Mason says.

Mason and Simon Uwins, Fresh & Easy’s marketing director, tell the Times that they misjudged the importance of price to US customers, that while they “went into people’s houses, talked to them about food and food shopping (and) went into their kitchens and poked round pantries,” they never went into their garages and basements, where they would have found “huge freezer chests bulging with stockpiled meat bought on special offer.”

“There’s less loyalty in the American market,” says Mason. “A Brit has to hear it a few times before you accept that people make up their mind where to go each week when they check out the special offers round the kitchen table.”

The Times notes that consumer focus on price has gotten even more intense with the recession, which has slowed Fresh & Easy’s expansion: “There are 113 Fresh & Easy outlets and plans to have 200 branches have been put back at least six months.”

Published on: February 23, 2009

The Independent reports on Whole Foods’ continuing problems with its flagship UK store in London, which “has struggled badly since opening its doors in June 2007. The store has suffered from customers baulking at its expensive prices and limited parking facilities.”

According to the story, “Jeff Turnas, a Whole Foods veteran, will come to these shores, as regional president of the UK, to improve performance. The retailer rebranded its four Fresh & Wild stores to the Whole Foods fascia this month.

“This week, John Mackey, the chairman of Whole Foods, said: ‘Our overall operating cash flow in the UK on a currency-adjusted basis improved to negative $1.7m in the first quarter from negative $3.3m in the first quarter last year, and we believe that dedicated and focused executive leadership will drive further improvements in our financial performance, resulting in strong returns over the long term’.”

Published on: February 23, 2009

The Associated Press has an interesting story about how the Centers for Disease Control and Prevention (CDC) says that “as many as a quarter of Americans suffer a foodborne illness each year — though only a fraction of those cases get linked to high-profile outbreaks like the recent salmonella peanut scare.” This is somewhat lower than the 30 percent of “people in industrialized countries, according to the World Health Organization. The toll, of course, is much higher in developing countries, where diarrheal diseases are a major cause of death for children.”

There are, in fact, more than 250 food-related illnesses that have been detected by scientists. As in almost all things, however, there is both good news and bad news.

First, the bad news as reported by AP:

“Health officials assume that for every salmonella case, there are three dozen unreported cases. By that calculation, the latest peanut-related outbreak actually has sickened closer to 20,000 people.”

The good news: “The problem could be a lot worse…The number of confirmed food poisonings has basically held steady in recent years. It may seem worse because more advanced testing allows investigators to better link cases and identify outbreaks, CDC officials said.

“Also, despite sometimes dramatic problems in food production and inspections, the U.S. food supply is still considered one of the safest in the world, several experts said.”

Published on: February 23, 2009

The recession may be top of mind these days, influencing shopper behavior in a variety of ways…but consumer research firm Mintel says that it may not be affecting how often they buy “green” products.

Last year, according to Mintel, 36 percent of consumers said that they will buy “green” products always or regularly … and that number hasn’t changed this year according to a new survey. The 2008 number had tripled from 12 percent of consumers who said the same thing in 2007.

“Cost remains an impediment to the green market's growth,” Mintel said in a press release about the survey, with the majority of adults saying that they “are willing to pay only a little extra for green products. Moreover, over half of respondents (54%) say they would buy more green products but the products are too expensive.”

The research firm said: “Though the recession is expected to impact sales through 2009, Mintel forecasts 19% growth for green products overall through 2013. Markets including green personal care and environmentally friendly household cleaners are expected to perform especially well. Organic food, the most mature segment, will experience slowing but steady growth over the next five years, despite lower prices from private label organics and competition from natural and local foods.”

Published on: February 23, 2009

Forbes notes that a “recent survey of over 1,000 Americans revealed that 25% were more likely to eat high-calorie comfort food because of the economic downturn. And doctors, dietitians and trainers report that their clients' waistlines are expanding as they turn to cupcakes, chips and pizza to cope with dwindling bank accounts and investments … Sociologists, food policy experts and economists have long noted that in most areas of the country, processed food such as candy bars, microwave burritos and ramen noodles is often cheaper than healthy fare. In fact, some fast-food restaurants, like McDonald's, have actually come out ahead in the downturn.”

Published on: February 23, 2009

NY 1 News reports that the relatives of a Walmart employee killed when a stampede of shoppers trampled him on early on the morning of Black Friday on Long Island, New York, have decided to go ahead with a lawsuit against Nassau County and its police department, saying that they were both “negligent, careless and reckless in their actions before the stampede.”

The family also reportedly plans to file a separate suit against Walmart.

Published on: February 23, 2009

• Walmart has reached a settlement agreement in class action litigation that charged it with a racial bias against African-Americans when it hired truck drivers. According to a MarketWatch story, the retailer will pay $17.5 million and “give priority to placing 23 of the class members in positions with the company; provide direct notice to all class members about future job opportunities; set goals so that future hiring is proportionate to the racial composition of the applicants; name a diversity recruiter; and boost job recruiting and advertising targeted at African-Americans.”

Walmart denied any wrongdoing in the settlement agreement.

• Walmart also has settled for $90 million a Missouri court case in which it was accused of taking advantage of employees by forcing them to work off the clock. The 330,000 workers that made up the plaintiffs group will actually get $55.5 million; the lawyers get the rest after court fees are covered.

Published on: February 23, 2009

Published reports say that the Food Marketing Institute (FMI) spent almost $1.6 million during the fourth quarter of 2008 to lobby the federal government on issues that include food safety, retail crime, taxes and labor issues, while the United Fresh Produce Association spent $190,000 during the same period on issues such as agricultural policy and country of origin labeling.

Published on: February 23, 2009

• The Tribune-Review reports that Giant Eagle has unveiled a new store design in Pine Township, Pennsylvania, that at 87,500 square feet is 13,000 square feet larger than its typical stores. According to the story, the unit features “freshness and an open design” and has “expanded produce, bakery and prepared foods areas, and a sushi bar, international grocery aisle and organic foods department.”

• The Chicago Tribune reports that Roundy’s Supermarkets has “signed a lease to open a two-level, 55,000-square-foot grocery story at the southwest corner of the Lakeshore East development near Millennium Park.” This is the second Chicago-related announcement made by Roundy’s in a week – last week it said that it would open a store in the city’s Bronzeville section.

• Pennsylvania-based Weis Markets announced that it has “added 50 generic prescription drugs and antibiotics to its 90-Day, $9.99 prescription plan, expanding the program's overall total to over 400 medications.” The program originally was rolled out last October and is currently available in all 119 Weis Markets in-store pharmacies.

• Crain’s Chicago Business reports that Supervalu plans to spend as much as $125 million over the coming year to remodel 25 Jewel stores in the Windy City, “betting that new, shiny displays and bigger meat, produce and deli departments will stem the loss of customers to Wal-Mart, which offers groceries for as much as 15% less.” This is part of an ongoing effort, according to the story: “Including those remodeled over the past year, about a third of Supervalu's 186 Jewel stores will have gotten a face-lift and expanded offerings by the time the effort concludes.”

• The Winnipeg Sun reports that 3,000 Safeway employees in Manitoba, Canada, have voted overwhelmingly in favor of a strike mandate if a new contract agreement cannot be reached by the time the old four-year contract expires on March 15.

• Maxi, which has more than 90 stores in Quebec operated by Provigo, a member of the Loblaw group, has announced that it will close two stores that have been deemed to no longer be economically viable; the two stores have been part of a labor dispute with the United Food and Commercial Workers (UFCW). At the same time, Provigo has come to a new tentative agreement with the UFCW covering workers at the remaining 10 stores.

Published on: February 23, 2009

One MNB user had some thoughts about the possibility that the Obama administration will embrace country of origin labeling (COOL) to a degree that it was not by the Bush administration:

COOL may have been pushed by American farmers and ranchers wishing to further their own interests, OH what a surprise(!), nonetheless it server other issues as well.

For those of us wanting to buy local – COOL should be CCCOOL, or CSCOOL, city, county, country or city, state, country. Some places are better than others when it comes to food safety. I will not buy products with Chinese ingredients. I have stopped buying many processed products totally from companies that I do not know or companies that I do no know where they source their ingredients. Yes, I am one of those Organic buyers and a “health nut”. I am one of those people who have changed their purchasing habits because of all the bad press from China and here in the USA. I am sure every country has their “peanut” people and most manufacturers are ethical.

The problem is one cannot tell who is ethical and who isn’t, nor can one tell whom the ethical companies buy ingredients from. Our government certainly has little concern and less knowledge when it comes to food safety. I do eat at restaurants so I suppose I could called “hypocritical”. My feeling is that I will control what I can control. I hope restaurants get put in the same COOL package.




Responding to last week’s MNB Radio rant, MNB user John Moffitt wrote:

I got a chuckle from your piece about eliminating the word “always” from our vocabularies (Hot Blood, Cold Blood & Defining Always). I once had a mentor who would tell me “never say never, and never say always.” It was somewhat of an ambiguous saying, but I always knew what he meant.




My proposal that modern technology makes it worthwhile for food retailers to consider getting rid of their publications sections and replacing them with more modern and relevant offerings continues to generate email:

Perhaps it is just part of my cost conscious lifestyle but I can't remember the last time I have purchased a magazine at any retailer. One issue of MONEY is $4.99 at the newsstand - a one-year subscription costs about $12. {I never pay full price for a magazine subscription either.] Other than the Tabloids at the checkout counters, I also don't remember seeing anyone else buying a magazine at retailers either. At Barnes and Noble the magazine rack seems to be more of a public library - people reading but not buying. When you look at all of those magazines there you wonder what the turnover rate is. Our local library allows you to check out past issues of magazines for a week - online renewal for another week. This is an excellent frugal person option for non-time sensitive material such as Discover.




I waxed rhapsodic last Friday, as I have before, about my Kindle…and talked about the smart marketing idea that Amazon.com had to commission Stephen King to write a novella, “UR,” that is a kind of “Twilight Zone” story about a Kindle with unusual features…and that, as it happens, is only available to be downloaded by people who have a Kindle.

MNB user Alan Lamb responded:

Maybe UR is a great story. Maybe if I read it I'd be encouraged to buy a Kindle.
But I'm not going to buy a Kindle in order to read it!

I already have general purpose computing machines, fixed and mobile, which cost a lot of money and every month I pay even more just to stay connected to the Internet. I don't want to buy another gadget and then pay more for the restricted content. This is similar to the satellite radio systems that require you to buy dedicated technology and then continue to pay for content. That format seems to be having trouble making a profit and could easily join the dead pool. I already have enough technology that requires obsolete content formats (audio cassette players, video cassette players, vinyl record turntables, and various sizes of computer diskettes).

Maybe if I could write off the cost as a business expense it would make some sense but meanwhile I can borrow unlimited books, magazines, CDs, DVDs, etc. from my local library's enormous catalog for free.

Look, I agree that the Kindle is not for everyone, and that appreciation for this kind of technology may to a degree be generational. For the record, access to literature via the Kindle does not require a fee, and is actually less expensive than buying a physical book. (Newspaper and magazine subscriptions also are less expensive.) But, I concede, not as inexpensive as going to the library. For those of us, however, who spend a lot of time on the road and traveling, this kind of technology is a wonderful innovation that offers a window on the future.

MNB user Glenn E. Harmon understood:

You should hit Amazon up for a commission on Kindles. I hadn’t even finished your blog before I paged over and ordered one w/ the optional cover. $398. Even Oprah’s book club doesn’t command that kind of price tag for an impulse buy. I wonder how many people did the same… It’s scheduled to arrive on March 2nd. In the mean time, I’ll be lugging around my books.

Oprah and me. Go figure.




Finally, I noted last week that a strategy being embraced by7-Eleven was “doable.”

Which led one MNB user to write:

I love MNB, but please, it's "feasible," not "doable." Despite its increasing usage in spoken language, "doable" is simply not a word. Let's try to maintain a modicum of integrity in the English language.

I hate to have to use this phrase twice in one day, but here goes…

Mea culpa, mea culpa, mea maxima culpa.

I’m not convinced, by the way, that the critical MNB user is not Sister John Aquin, who at Sts. John & Paul Elementary School used to beat such lessons into me back in second grade with a hard ruler and an even harder attitude. She says she’s not, but I’m not convinced.

Published on: February 23, 2009

The 81st annual Academy Awards were last night, and the major Oscars went to…

Best Picture
“Slumdog Millionaire”

Best Actor
Sean Penn, “Milk”

Best Actress
Kate Winslet, “The Reader”

Best Supporting Actor
Heath Ledger, “The Dark Knight”

Best Supporting Actress
Penelope Cruz, “Vicki Cristina Barcelona”

Best Director
Danny Boyle, “Slumdog Millionaire”

Best Original Screenplay
Dustin Lance Black, “Milk”

Best Adapted Screenplay
Simon Beaufoy, “Slumdog Millionaire”

Best Animated Feature
“Wall-E”