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    Published on: April 8, 2009

    The National Association of Convenience Stores (NACS) is out with its annual state of the industry survey, offering he following nuggets of data:

    • “Overall convenience store industry profits rose 54 percent in 2008 to reach $5.2 billion, reversing a two-year decline where profits dropped 42 percent over that period.”

    • “Industry sales jumped 8.1 percent to reach $624.1 billion, with both motor fuels sales (up 10.1 percent to $450.2 billion) and in-store sales (up 3.2 percent to $173.9 billion) showing growth.”

    • “The growth of in-store sales defied the overall trend in U.S. retail sales, which fell 0.6 percent based on U.S. Department of Commerce data. It also came despite a rare decline in the number of convenience stores. For only the third time in the past 15 years, the industry store count dropped – 1.0 percent to 144,875 – as many stores closed because of the punishing economic conditions.”

    • “Credit card fees continue to be the industry’s top pain point, surging another 10.5 percent in 2008 to reach a record $8.4 billion – nearly three times the level just five years ago.”

    • “The industry saw a modest 0.8 percent gain in number of employees, which rose to 1.73 million. Annual turnover numbers were even more impressive. For non managers, annual turnover was down to 109.0 percent; turnover for managers was down to 29.0 percent.”

    KC's View:
    This last piece of information is fascinating in all sorts of ways, not least because it is incredibly hard for me to imagine running a business where employee turnover is 109 percent annually – and that is considered an “impressive” improvement!

    It may be a sign of something – like improved customer service – that the number of employees working for c-stores is going up as the number of c-stores is decreasing. It also could reflect an improved ability on the part of many c-stores to compete across a broader number of categories.

    One other note from the NACS report intrigues me – the fact that roughly 33 percent of the industry’s sales and 16 percent of its gross profit dollars still come from tobacco products of various kinds. That’s got to be close to an untenable position now that it is looking more likely than ever that the Food and Drug Administration (FDA) could be given the authority to regulate the tobacco industry, and US smoking rates continue to drop (though it amazes me that 20 percent of the US adult population continues to engage in a habit designed to kill them).

    Published on: April 8, 2009

    USA Today reports this morning that following last week’s recall of two million pounds of pistachios that could be contaminated with salmonella bacteria, Setton Pistachio of Terra Bella has now expanded that recall to its entire 2008 crop – and “more recalls of foods containing pistachios are on the horizon.”

    "This is going to resemble the peanut recall in that products are going to be added every day as companies discover they used Setton pistachios," Caroline Smith DeWaal, of the non-profit Center for Science in the Public Interest (CSPI), tells the paper. "It's going to take a while for the dust to settle."

    No illnesses from contaminated pistachios have yet been reported.

    KC's View:
    Little by little, the real damage is being done to the public’s confidence in the safety of the food supply.

    Published on: April 8, 2009

    The New York Times writes that as consumers worry about their economic prospects, advertisers are turning to nostalgia as a way of forging new connections. Companies that include Coca-Cola, PepsiCo, General Mills, McDonald’s and Unilever and turning to old ads, slogans and jingles, revived package designs, and even discontinued products as a way of reminding customers of past connections.
    KC's View:
    Maybe this works. But I am not convinced.

    As a consumer, I don’t need to be reminded of the products and brands that were important to me in the past. But my needs today are different than they were five, 10, or 15 years ago…and I want advertising messages to be relevant to me now. And I think that younger consumers – often the center of the target for these marketing efforts – are even less impressed with nostalgia. (I don't think they would even use the world “nostalgia.” They’d just say “old.” And be right.)

    I concede that the people thinking of these old-style approaches probably are a lot smarter than me, so I could be wrong on this. But this form of advertising and marketing just doesn’t do it for me.

    Published on: April 8, 2009

    The New York Times has a new poll about the public’s view of the economy, with some numbers that go have implications beyond the political.

    “The poll found that 70 percent of respondents were very or somewhat concerned that someone in their household would be out of work and looking for a job in the next 12 months,” the Times writes. “Forty percent said they had cut spending on luxuries, and 10 percent said they had cut back on necessities; 31 percent said they had cut both.” Still, there is rising optimism: “The percentage of people who said the economy was getting worse has declined from 54 percent just before (President Barack) Obama took office to 34 percent today. And 20 percent now think the economy is getting better, compared with 7 percent in mid-January.”

    KC's View:
    It probably is fair to say that these improved perceptions are more a matter of psychology than anything else. Indeed, the Times numbers suggest that the improved mood seems more related to overwhelming personal support for President Obama, rather than sweeping support for all of his initiatives. It isn’t that people don't think that what he is doing will work; rather, it is that people aren’t sure, just like they remain unsure of a lot of things.

    Still, optimism almost always beats pessimism … though the risk of disappointment always is greater whenever you get really hopeful.

    Published on: April 8, 2009

    There are press reports that Blockbuster, the video rental company, may be unable to stay in business because of an possible inability to complete credit deals that would keep it liquid. This admission, according to reports, came in the form of the company’s most recent fling with the US Securities and Exchange Commission (SEC).
    KC's View:
    Certainly some of this blame is going to be laid at the feet of the current credit crisis, but this remains a remarkable turn of events for a company that at one point pretty much owned the national video rental business.

    I would suggest that perhaps the company’s problems are rooted in an inability to see the Netflix threat, which essentially eliminated the necessity for brick-and-mortar stores, and to count on old-world business models at a time when online rentals and downloading were growing. Sure, it tried to adjust…but then it made claims about late fees in its advertising that were misleading if not downright lies, and got called on them.

    It just goes to show that nobody is immune to the changes that are taking place in the economy and the culture. And if we’re all not attuned to them, we run the risk of being irrelevant…and, as a result, out of business.

    Published on: April 8, 2009

    CVS Caremark announced this week that it is expanding its partnership with Google Health, allowing its customers to have their pharmacy records and histories, including those from the retailer’s MinuteClinics, downloaded to their online accounts – an initiative designed to make such patient histories more accessible and complete.
    KC's View:
    Now, if we could only get to the point where that information could be integrated with dietary and nutrition recommendations, so that the connections between food and medicine could be made even clearer and more actionable…

    That’s when the circle gets closed.

    Published on: April 8, 2009

    The Wall Street Journal reports that Diageo has come up with a pair of approaches to help retailers do a better job of marketing its alcohol products at a time when more people are staying home rather than going out to bars and restaurants:

    • The company wants to “roll out big refrigeration units so stores can sell their beer chilled. The idea is to create a partially enclosed, refrigerated beer zone within a supermarket aisle, using a design Diageo calls ‘the pod.’ The refrigeration units, which will cost retailers roughly €10,000 ($13,000) each, are intended to hold all kinds of beer, not just Diageo's brands, in an attempt to boost beer sales overall.” Nobody has bought the pod concept yet, but the company remains hopeful.

    • Diageo also “is installing computer screens in liquor stores to help people plan parties. Customers type in the cocktails they want to serve and the number of guests they are expecting, and the computer prints out a list of ingredients and quantities, including ice. The machines, which the company says are in 500 liquor stores in 38 U.S. states, can also send cocktail recipes via email.”
    KC's View:
    I especially like the walk-in refrigerator idea, though have no idea how the $13,000 price tag compares to what it would cost for a retailer to do it independent of Diageo. I was in a newly renovated Roche Bros. store up in Massachusetts a few weeks ago, and it had a great walk-in cooler…it is a very good idea that adds a bit of pizzazz to the beer shopping experience.

    Published on: April 8, 2009

    Convenience Store News reports that Giant Food Stores of Carlisle, Pennsylvania, plans to open its first convenience store, Giant To Go, next week in Lancaster, Pennsylvania. It is the first of two in the area scheduled to be opened this year, after which the company will assess the format and decide whether to keep going.

    The store is slated to carry a range of fresh food items in addition to meal solutions offerings.

    • The Denver Business Journal reports that MillerCoors is teaming up with Sara Lee for the co-branded bratwurst that they hope the world has been waiting for – a new Hillshire Farms Miller High Life Beer Brat “designed to deliver the flavor of brats cooked in beer in only a fraction of the time.” The product is expected to be out in time for barbecue season.

    KC's View:

    Published on: April 8, 2009

    • The Minneapolis/St. Paul Business Journal reports that Caribou Coffee has hired Henry Suerth, formerly Starbucks’ senior vice president of business alliances, to be its new senor vice president of commercial businesses, overseeing its foodservice and licensing operations.
    KC's View:

    Published on: April 8, 2009

    Yesterday, MNB made reference to a Forbes story saying that Tesco has decided to address the notion that UK consumers don't like pollock, and prefer cod and haddock. It decided to rename it “colin,” which is a French word for “hake,” which is a related fish.

    Well, I had either a brain freeze or a senior moment. It was Sainsbury that was making the change, not Tesco.

    Apologies for the error.

    KC's View:

    Published on: April 8, 2009

    …will return.
    KC's View:

    Published on: April 8, 2009

    In the NCAA women’s basketball finals, the University of Connecticut defeated the University of Louisville 76-54, bringing to a successful conclusion the third undefeated season in the program’s history.
    KC's View: