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    Published on: April 16, 2009

    Now available on ITunes…

    To hear Kevin Coupe’s weekly radio commentary, click on the “MNB Radio” icon on the left hand side of the home page, or just go to:

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

    As you might expect, I spend a lot of time reading, but there are articles and books that sort of slip by me…but one of the great things about the Internet is that they’re always out there, just waiting to be found.

    Just such a piece was in the April 6 issue of Newsweek, and concerned one Peter Arnell, who has the dubious distinction of having designed the new Tropicana orange juice box that, well, sort of went down in flames when it was declared by consumers to be an unmitigated disaster. It’s not that it wasn't attractive…it’s just that the carton looked like generic orange juice and not one of the best-respected juice brands in history.

    Now, that’s okay. One of the advantages of orange juice is that companies don't make a ton of it in advance; when it was determined that sales were collapsing because nobody could find the Tropicana in the supermarket cooler, owner PepsiCo could reverse the decision and go back to the old cartons with less fuss than, say, if it had to make the same decision about a new Pepsi logo. (Which, of course, Pepsi is hoping it won’t have to do…Arnell also redesigned that, and while the reaction hasn’t been unanimously positive, it looks like the new logo won’t need any radical surgery.)

    In some ways – and senior management at Pepsi and the company’s shareholders may not agree with this – I even think it is okay to have made this mistake. Sometimes you only really understand the value of what you have when it is taken away…that’s what happened with New Coke, and that seems to be what happened with Tropicana. Lesson learned…expensive lesson, I concede, but a lesson that maybe could not have been learned any other way. Besides, what’s a little branding mistake among friends.

    But that’s not what grabbed me about the Newsweek article about Arnell, who says that his agency is a "multi-disciplinary brand and product invention company" that "examines the space between brand assets and consumer desire" to "help brands capture and realize differentiation by exploiting a unique emotional dimension."

    Give me a break.

    From reading this story about Arnell, the one thing that seems most obvious is that this guy is about as out of touch with average Americans – you know, the ones who actually buy or don't buy products and make them successes or failures – as a human being can be. Everything about him – the pomposity, the arrogance, the affectations, the idiosyncrasies – screams insecurity and a life being lived inside a bubble.

    Maybe he wasn’t always that way, but it is hard to imagine that he has any idea what shoppers – real shoppers want or need. From the alleged 1,600 pairs of antique eyeglasses to the Jeep outfitted with fire engine lights to the handgun that he supposedly carries, this is a guy who, I’m guessing, doesn’t spend a lot of time in supermarkets for reasons other than research.

    Listen to this paragraph from Newsweek:

    “…in the midst of the Tropicana controversy, someone leaked a 27-page memo Arnell wrote for PepsiCo crammed with so much pseudo-intellectual claptrap—references to the Mona Lisa, the Parthenon, the golden ratio, the relativity of space and time, magnetic fields, ‘perimeter oscillations’ of the Pepsi logo, the ‘gravitational pull’ of a can of Pepsi on a supermarket shelf, the rate of expansion of the universe—that some thought it might be a hoax. It wasn't.”

    Perimeter oscillations? Again, I say: Give me a break.

    But if I were PepsiCo, it wouldn’t just worry me that Arnell seems to be a classic nut job. After all, sometimes the “mad genius” thing can have some appeal and even be useful. But what would really worry me is the fact that he seemed intent on convincing the Newsweek reporter that he was right about the Tropicana redesign and that the rest of the world just didn’t get it, wasn't able to appreciate his art and wisdom.

    If he really thinks this way, that’s one problem. Because we who are in the business of providing products and services to consumers cannot ever afford to think that we are smarter than and superior to the people we serve. It happens…but it almost always is a mistake.

    The other problem is that Arnell is telling people that this is what he thinks. Arrogance on parade isn’t almost always an error in judgment …it always is.

    For MorningNewsBeat Radio, I’m Kevin Coupe.

    KC's View:

    Published on: April 16, 2009

    In a speech to the World Health Care Congress this week, Safeway chairman/president/CEO Steve Burd suggested that companies looking to control health care costs ought not wait to see what kind of reforms the Obama administration is able to get passed, but rather should model their own programs on what Safeway has been doing.

    "If you are part of a large organization, you really don't have to wait for government to do anything," Burd said. "You can design your own healthcare reform.”

    Burd said that the Safeway approach – which is to make employees responsible for living healthier lifestyles, including losing weight, stopping smoking, while rewarding them for positive steps – has saved the company millions of dollars. "We took advantage of a little-known fact; that is that 70 percent of healthcare costs are driven by behaviors," Burd said.

    Safeway’s program – which has 75 percent buy-in from nonunion employees – essentially gives discounts on health insurance costs to employees who attain and maintain certain minimum standards, while those who do not meet established levels pay more for health insurance premiums. And while Safeway spends $1 billion a year on health care costs, that number has not gone up since 2005.

    KC's View:
    Burd and Safeway have been pioneers in this area, and deserve a lot of credit for focusing attention on a basic truth: people ought to have responsibility for their own health. Living a healthy lifestyle has all sorts of implications, from personal happiness to professional productivity. If you’re going to work from the premise that when a company employs an individual it is making an economic investment in that person, then it has a right to expect that the employee will be equally invested in the experience…and that means behaving responsibly.

    It’s not a popular approach in some circles, but Burd gets kudos here for facing it head-on.

    Published on: April 16, 2009

    Two Domino’s Pizza employees have been hit with felony charges after they deliberately contaminated food that they were making, and then posted video of their acts on

    According to a story in the New York Times, “a Domino’s employee in Conover, N.C., prepared sandwiches for delivery while putting cheese up his nose, nasal mucus on the sandwiches, and violating other health-code standards while a fellow employee provided narration. The two were charged with delivering prohibited foods.”

    The videos were seen more than a million times on YouTube.

    While Domino’s is said to be considering the filing of a civil lawsuit against the two former employees (they were promptly fired by the company), it is still reeling from the public relations debacle. “In just a few days, Domino’s reputation was damaged,” the Times writes. “The perception of its quality among consumers went from positive to negative since Monday, according to the research firm YouGov, which holds online surveys of about 1,000 consumers every day regarding hundreds of brands.”

    And critics are saying that Domino’s made a tactical error by not responding more aggressively, apparently believing that the issue would blow over. But its executives were wrong, and discovered that not only were the YouTube videos being widely seen, but that the issue was being focused on in places like Google and Twitter, giving the problem a life of its own.

    KC's View:
    I’m not sure that Domino’s could have done anything to eliminate any problems, but at the very least people there have to understand the viral nature of Internet commentary. You have to move quickly and decisively, and cannot afford to hesitate.

    The simple fact is that you read the description of what those employees were doing, and you just don't want to buy anything from Domino’s. Ever.

    On the other hand, this is a great opportunity for supermarkets to advertise “guaranteed mucous-free pizza.”

    Published on: April 16, 2009

    Weis Markets announced yesterday that it is freezing prices on 3,000 staple items for 90 days in an initiative that expires July 15.

    This is the second time that Weis has frozen prices; the first time, the Pennsylvania-based retailer lowered prices on 2,400 SKUs and then froze them at that level. The categories affected include center store, frozen, dairy, produce, meat, deli and bakery, in both national brand and own label items.

    "At a time when unemployment continues to surge in many of our markets -- in some areas to as high as 10% -- our Price Freeze Program is designed to offer meaningful, long-term savings to our customers," said David J. Hepfinger, Weis Markets' President and CEO, noting that the “initial Price Freeze program helped our customers save approximately $5 million.”

    KC's View:
    Sounds like a compelling argument to make to a consumer looking to make decisions about where to shop for food…especially for a company serving customers with those kinds of economic issues. At the end of the day, you have to do something.

    Published on: April 16, 2009

    MNB can’t be everywhere all the time…which is why it is great when an MNB user files a report giving us insight into what’s going in various parts of the world.

    This one comes from an MNB user who is on Fresh & Easy’s mailing list…and who has a reaction to Tesco’s US operation looking to establish a stronger price image:

    Just received my first direct mail newspaper ad from Fresh & Easy. I now see why this company is having trouble getting off the ground in the USA.

    They are now trying to create “Budget Price” image, but can’t get the terminology right:
    Three examples:

    - “Table Carrots, 2 lbs for $.98.” Does anyone know what “Table Carrots” are?
    - “Green Pears, 3 count $.98.” Americans buy types of pears and green ones would be considered unripe.
    - “Bi-Colored Bell Peppers, 2 count for $.98.” Is that red/green, yellow/red, green/yellow or totally different colors?

    Help is needed.

    KC's View:
    Thanks for sharing.

    Published on: April 16, 2009

    David C. Vladeck, a three-decade veteran of the Public Citizen Litigation Group, was named yesterday by Federal Trade Commission (FTC) Chairman Jon Leibowitz to be Director of the FTC’s Bureau of Consumer Protection.

    In addition to his time at Public Citizen’s Litigation Group, where he served as director for 10 years, Vladeck has most recently been a professor at the Georgetown University Law Center, and has been co-director of its Institute for Public Representation.

    By almost any measure, Vladeck is perceived as potentially one of the most consumer-oriented people to serve in the FTC post, and he is expected to pursue an activist agenda in areas of consumer and advertising issues especially when it comes to the food industry, marketing to children, privacy issues and financial products.

    KC's View:
    This was to be expected from the Obama administration. The anti-business mood of the country right now is bound to create an even tougher atmosphere for some industries, which no doubt will find the next four years to be long ones.

    Published on: April 16, 2009

    • Walmart CEO Mike Duke told the “Today Show” yesterday that he believes there remains a lot of stress in the US economy and that he does not expect the current recession to end anytime soon.

    Duke also said that he expects the recession to create a “sustained change in the way that families live.”

    • Walmart reportedly is trimming its staffing levels in China, especially at midlevel management positions, as a way of keeping costs in line. The retailer, according to Dow Jones, is giving affected employees the option of relocating to areas where it is opening new stores.

    • Brand Finance, a global consultancy, is out with its list of the top global brands…and for the first time, Walmart is at the top of the list.

    Coca-Cola, which was in the top spot last year, dropped to number two.

    According to Marketing Week, Walmart gained the number one position by positioning itself as a consumer champion during the economic downturn, and that it has overcome criticism of its policies through improved social responsibility and an effective marketing program that focuses on its work in areas like the environment.

    KC's View:
    Does the phrase “firing on all cylinders” mean anything to you? Because that’s what Walmart is doing these days…with few exceptions, pretty much everything it does seems to be working. The guess here is that the Bentonville Behemoth will emerge from the current recession stronger than ever, with greater market share…and a little bit wiser, as well.

    Published on: April 16, 2009

    Sobeys Ontario said this week that in order to meet a goal of reducing plastic usage across Ontario by 50 percent, it will no longer offer complimentary shopping bags. Rather, effective May 1, it will charge five cents per plastic or paper bag.

    Sobeys also announced a partnership with Earth Day Canada and the
    creation of the Earth Day Canada Community Environment Fund, which is “aimed at creating opportunities to educate and inspire action in communities across Ontario,” and will “provide local organizations with grants of up to $20,000 to support environmental initiatives.”

    KC's View:

    Published on: April 16, 2009

    Interesting piece in Time about a new study done by researchers at the University of Birmingham and Manchester Metropolitan University suggesting that energy drinks work because they affect the brain, not the muscles.

    According to the story, the researchers found that most people believe that energy drinks boost cell and muscle performance, in fact they “activate reward and pleasure regions in the brain, a boost that can translate to better performance - and one that does not occur with other artificially sweetened beverages. In the study, volunteers who got sugary energy drinks were able to complete a physical-training session 2% faster than those who got artificially sweetened drinks, and improved their mean power output as well.” The story says that the “work supports the idea that the brain plays a critical role in pushing the body to achieve optimum performance. When the mouth tastes sugar, it may anticipate an influx of added fuel and therefore trigger the satisfaction and reward areas of the brain, in turn egging the body on to do more.”

    KC's View:

    Published on: April 16, 2009

    • The United Food and Commercial Workers (UFCW) said that it has filed a complaint against the Great Atlantic & Pacific Tea Company (A&P) over its decision to close a Pathmark supermarket in West Hempstead, New York. The UFCW says that A&P is “refusing to comply with the New York State W.A.R.N. act which requires employers to pay workers wages for 90 days after announcing the closing of a facility.”

    • BIGresearch says that Americans are going to spend less on Mother’s Day presents this year – an average of $123.89 per person, down from $138.63 a year ago.
    KC's View:

    Published on: April 16, 2009

    • Walmart-owned Sam’s Club announced that Linda Hefner has been named executive vice president of merchandising and replenishment, reporting to Brian Cornell, the just-named president/CEO of Sam’s Club.

    Hefner has been serving as executive vice president/general manager of the Home business for Walmart U.S. Her replacement in that position has not yet been named.

    KC's View:

    Published on: April 16, 2009

    Earlier this week, MNB took note of a story from HealthDay News that revisited an old debate – whether or not pregnant women and nursing mothers should restrict the amount of seafood they eat because of concerns about mercury toxicity and its impact on children’s developing nervous systems. The US Food and Drug Administration (FDA), as well as the American College of Obstetricians and Gynecologists, says they should – that they need to avoid fish that may be higher in mercury levels and eat a total of no more than 12 ounces a week.

    However, the opposite argument – that seafood actually is critical for proper neural development – is gaining currency, with some pretty strong evidence that the more seafood moms eat, the better their children do in tests of their mental functions and moor skills. Still, it was noted, in the United States the debate seems entirely academic – since not that many Americans eat 12 ounces of seafood a week, let along expectant and nursing mothers.

    The story prompted the following email from Jennifer McGuire, MS, RD, who is Manager of Nutrition Communication with the National Fisheries Institute:

    Regarding your article, “Debate Persists about How Much Fish Women Should Eat,” you are correct that Americans eat far too little fish to gain health benefits, let alone approach a level of concern. Recent US Food and Drug Administration (FDA) data shows that the average pregnant woman in this country eats 1.89 ounces of fish a week, over six times less than the amount associated with optimal brain development in babies.

    Island cultures like the Seychelles that eat fish-rich diets – nearly 17 ounces per week – have been studied for decades and researchers consistently find no pattern of negative effects among children.

    The science is quite clear and compelling, but where much of the “debate” comes in is the way in which the science has been poorly and incompletely communicated to moms. The federal guidance on this issue was meant to encourage seafood as an important part of the diet, especially during pregnancy, and advise against four rarely consumed or available predatory fish – shark, swordfish, king mackerel, and tilefish.

    Unfortunately, studies show the guidance was coarsely interpreted by the media and moms as a warning to limit or avoid all fish.

    In light of studies that reveal the risks of suboptimal brain development from a seafood- and omega-3-defidcient diet, the FDA is currently exploring a new approach to this debate that looks at the whole picture – the risks of eating plenty of fish versus the risks of limiting or avoiding fish for both brain development and heart health.

    In the meantime, it is very important that we at least accurately characterize the current guidance. In your article, you advise avoidance of albacore tuna. However, this is a misinterpretation of federal advice, which clearly states that half of pregnant moms’ 12 weekly ounces of fish can be albacore tuna. Canned albacore tuna is rich in omega-3s, affordable, and available, so it is important to be clear to pregnant moms that six ounces per week is safe and healthy.

    I ask that you clarify this point to your readers, and offer myself to your publication as a credentialed resource on this topic moving forward.

    Point taken. Point made.

    Just one thing, though. I’ll accept the criticism that perhaps I coarsely interpreted the guidance on tuna…but it was never my intention to advise anyone to do anything. That role is left to people far smarter than I.

    I continue to get email about my skepticism of the hand-held technology being tested by Stop & Shop…and one letter comes from Mike Grimes of Modiv Media, which developed the system being tested by Stop & Shop:

    It’s true that the “scan-n-bag” solution is not news. But the benefit everyone … missed is both new and unique: relevant and exclusive offers that the device delivers to shoppers while they shop. People like to talk about recipes and nutritional information but what many shoppers really want from a supermarket is a quick, efficient trip and ways to save money on products that matter to them that don’t require sifting through reams of generic offers.

    I’d be happy to give you a personal tour of the system in a store near you if you want. Just let me know.

    Deal. And I promise that I’ll write about what I see and think after the tour. (Not that you’d expect anything less.) I’ll do my best to be objective, and we’ll let the chips fall where they may.

    I’m hardly alone in my skepticism, by the way. One MNB user wrote:

    The speed goes away when the customer is audited; the customer can even be offended by the audit. The retailer determines their threshold for risk and can set the frequency of the audits. The software is usually set up to audit less frequently depending on the accuracy of the audit. It is my belief that these solutions are not as fast as using an experienced cashier.

    Regarding the continuing legislative attacks on the use of the making of baby bottles and other food containers with bisphenol-A, or BPA, which some scientists believe poses health risks to children, in the making of baby bottles and other food containers, one MNB user responded to my observation that BPA is “over,” whether manufacturers like it or not:

    BPA isn’t over until the FDA says it’s over. If a manufacturer makes a baby bottle and labels it BPA-free…I’ll bet the FDA requires a disclaimer statement in close proximity that says, “The FDA has determined there is no difference between baby bottles made with BPA and those made without BPA.”

    Probably. Which is depressing.

    We had a story yesterday about JM Smucker lowering prices on its Folgers coffee, which is expected to pressure Kraft to do the same with its Maxwell House brand…and I wondered it of this presaged more price cuts by manufacturers that have been resisting entreaties to do so by retailers.

    MNB user Dan Jones responded:

    With products like ground coffee, canned tuna, vegetable oil etc., their pricing is driven largely by raw material ingredient costs. They are not commodities (they are branded, after all), but the pricing on these items has been more volatile than most CPG items. I would not look to these categories as a harbinger of significant pricing changes. Now, if more value-added brands begin to lower prices (breakfast cereals, snack chips, salad dressings, etc) we may be on to something.
    KC's View: