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: May 1, 2009

    Content Guy’s Note: This story appeared as “breaking news” yesterday afternoon on MorningNewsBeat, and is re-posted here in slightly different form.

    The Food Marketing Institute (FMI) announced yesterday that it is cancelling next week’s Future Connect and MarkeTechnics conferences in Dallas, citing concerns about the swine flu pandemic. The organization began informing sponsors and speakers during the mid-afternoon.

    In a note posted on the FMI website, association CEO Leslie Sarasin said, “The increased urgency of the alerts from health officials today and the guidance of the Centers for Disease Control and Prevention and the Dallas County Department of Health and Human Services confirmed our decision to not host a large gathering where attendees would be in close proximity. We seek to support their recommended precautions and prevention steps and would not want to contribute to spread of the virus in any way.

    “We agonized over this difficult and critical decision, but are certain that the number one priority of America’s food retailers, wholesalers and suppliers right now is to look out for the health and safety of their customers, employees and the communities they serve across the country and around the globe.

    “In particular, we recognize that Future Connect is a program about leadership, and at this time our industry’s leaders must be in their communities to be actively engaged in a time of potential crisis.”

    The move is a marked change from earlier Thursday, when FMI said that it was “committed” to holding the conference, and that it had made that decision in concert with local and national health authorities.

    It in unclear as of this posting whether the conference is being cancelled outright, or postponed until another time. In her posting, Sarasin said, “We are evaluating our options for rescheduling these events and will look forward to sharing more details about the plans for holding the events in the near future.

    This was the first year for the Future Connect concept, and represented a shift for FMI, which decided to have its traditional exhibit floor every other year, alternating with an education-only format.

    It is relevant to this story that the Dallas News reports that “two more school systems on Wednesday shuttered all of their campuses after reports of probable cases of swine flu, causing more than 130,000 students statewide to miss class because of concerns about the virus … There are 11 probable swine flu cases in the county that includes Fort Worth, according to Tarrant County Public Health officials.”

    KC's View:
    First of all, let’s be clear. FMI did the right thing. As I said yesterday, there were just too many risks – to the public health and, quite frankly, to the food industry’s reputation – if they went ahead with Future Connect and MarketTechnics and somehow became responsible for further spread of this new influenza.

    It is a decision with some risks involved, since this is new territory for FMI – a convention without an exhibit floor being run by upper management that wasn’t even with FMI when these plans originally were being made. If Future Connect is rescheduled for later this year, it is hard to know whether everyone will show up or if FMI can generate the same kind of enthusiasm for it that seemed to be there the first time around. And then, FMI has to gauge the impact on whatever it has planned for the 2010 show in Las Vegas, especially if it decided to run its educational conference this fall sometime.

    No matter. These are decisions for another day. (Like, next Monday.) As MNB has been saying all week, it would have been irresponsible to continued with the Future Connect plans for next week, and it made far more sense to err on the side of caution…

    Published on: May 1, 2009

    The Hartford Courant reports on new video technology being used by Big Y Foods to make sure that checkout personnel aren’t making mistakes or giving away merchandise to friends or relatives for free, a practice called “sweethearting.”

    The new software, from a company called StopLift, apparently, reviews the checkout transactions automatically since there was so much footage that it was impossible for a human being to review.

    The Courant writes, “Using existing closed-circuit cameras that focus on the body and hand movements of the cashier, the program identifies mis-scans, including those in which a cashier puts her hand over the bar code and only pretends to scan a product, stacks several items on top of each other or passes the product over an inoperative part of the scanner. It also catches items left in the grocery cart that never get scanned, and can pinpoint which cashier rang up too many coupons.

    “ The videotape shows each mis-scanned item framed by a brightly colored, blinking square. StopLift correlates the images with information recorded on the grocery receipt, and within a day, informs store managers of any mis-scans, with a video clip that shows the mis-scanned object as well as the cashier. ”

    Industry statistics show that inventory losses at US supermarkets are more than $40 billion a year and that 44 percent of these losses stem from employee theft.

    KC's View:
    With loss numbers this high, it is perfectly understandable that companies would want to find a way to do something about it.

    But I have to admit to being a little uneasy with this technological solution and the level of distrust that it seems to imply. I wouldn’t want to work for someone who was intent on capturing my every move on video…not because I have anything to hide, but because I would prefer that some level of trust exist between employer and employee.

    Maybe it is impossible to hire smarter, to hire better…and to do so in such a way that these kinds of technological solutions are unnecessary. But I cannot help but think that we are poorer, not richer, for these kinds of surveillance techniques.

    Published on: May 1, 2009

    Starbucks is launching a new advertising campaign this weekend, around the theme of “value and values,” attempting to use the fact that its coffee is more expensive than that of its rivals to its own advantage.

    One print ad says, Beware of a cheaper cup of coffee. It comes with a price."

    Another says, "Starbucks or nothing. Because compromise leaves a really bad aftertaste."

    And a third says, “This is what coffee tastes like when you pour your heart into it.” (“Pour Your Heart Into It,” as it happens, is the title of Starbucks CEO Howard Schultz’s memoir. Coincidence? We think not.)

    In his blog on Starbucks’ website, Terry Davenport, Starbucks’ vice president of marketing, writes: “We’re embarking on a long-term, story telling campaign focused on the quality, value and our values. The campaign will build over time, and take advantage of multiple channels, both traditional and non-traditional, supporting all of the distribution points in our business. It will also be a validation for our customers – and our partners – of what Starbucks is all about and what we stand for.”

    KC's View:
    Wow. “Value and values.” That’s a great concept…wish we’d thought of it here at MorningNewsBeat…

    Seriously, this is a smart idea. I still think they have to do more in-store to support the concept, but if they’re going to be more expensive, they might as well turn it to their advantage.

    Published on: May 1, 2009

    Marketing Daily has a story that points to the difference between intentions and practice when it comes to buying green in a recession.

    Noting that a recent Grocery Manufacturers Association (GMA) study said that 54 percent of grocery shoppers say they “actively consider” sustainability issues when making buying decisions, Marketing Daily also points out that “only 22% of the more than 6,400 shoppers interviewed as they left the store that day actually bought a green product on this particular shopping trip.”

    One of the conclusions from this disparity – it seems possible that many shoppers may be missing the “green” messages being delivered by manufacturers.

    "One key finding that was an initial surprise was the broad scope of the green shopper demographic," Brian Lynch, GMA’s director of sales and sales promotion, tells Marketing Daily. "We found it particularly interesting that the Baby Boomer demographic achieved the highest concentration of green shoppers in our survey, while younger green shoppers appeared hesitant -- at least for now -- to act on their green ideology when it comes to purchasing decisions."

    KC's View:

    Published on: May 1, 2009

    The Silicon Valley / San Jose Business Journal reports that the city council of Santa Clara, California, has voted “to prohibit construction of stores of a minimum of 80,000 square feet that devote at least 5 percent of their sales floor to grocery items.” The vote effectively blocks Walmart from building any supercenters within the city limits.

    According to the story, “California cities that have already banned these stores include Livermore, Antioch, Martinez, Oakland, Alameda, San Diego, Turlock and Inglewood.”

    KC's View:

    Published on: May 1, 2009

    • There are published reports that Walmart is looking to get into the banking business in Chile, and is looking to have its D&S grocery subsidiary there either purchase an existing bank or start up a new operation.

    Walmart operates a bank in Mexico, but has been prevented from doing so in the US.

    • The Boston Globe that former Walmart CEO Lee Scott was in Boston this week, speaking at the National Venture Capital Association convention, and he used the occasion to lobby against any increase in the state sales tax.

    "Increasing taxes is a great way to discourage consumption," he said. "When you discourage consumption, then ultimately employment is reduced. It is the inevitable and unintended consequence."

    The Massachusetts House has approved raising the sales tax to 6.25 percent from 5 percent, but Governor Deval Patrick has promised to veto the tax hike if it passes the Senate.

    KC's View:

    Published on: May 1, 2009

    The Indianapolis Star reports that Marsh Supermarkets is launching an ad blitz, “called the Saving Spot, using television, radio, billboards, newspapers and the Internet to brand itself as a low-price destination … As part of its new strategy, Marsh will sell 25 percent of items in stores at a reduced price every day, compared with 15 percent a year ago. It also will increase the number of store-brand products, such as Food Club, Top Care and Marsh brands, by 20 percent in the next 12 months.”

    The goal of the campaign is to build market share at a time when Marsh is dealing with tough competition from Kroger, Walmart and Meijer.

    Marsh CEO Frank Lazaran points out to the Star that the chain isn’t only focusing on lower prices – almost 80 percent of its 100 stores have been remodeled or renovated since 2006.

    KC's View:

    Published on: May 1, 2009

    • Tesco’s US Fresh & Easy division said yesterday that its “40 to 45 ounce family-sized prepared meals, introduced last month to help customers trying to feed their families on a budget, have proven to be a hit and are now the six top selling lines in the range of more than 110 products produced fresh daily in the company's Riverside, California kitchen.”
    KC's View:

    Published on: May 1, 2009

    Reuters reports that bidders looking to acquire all or part of bankrupt Bruno’s Supermarkets include Gordon Brothers Group, Hilco Merchant Resources LLC, and a joint venture made up of liquidators Great American Group, Tiger Capital, SB Capital and Hudson Capital Partners.

    • There is a report that unionized employees at a Safeway meat warehouse in Denver have authorized a strike. The current contract expires on May 9, and the chain is looking for benefits concessions and a freeze on some wages.

    KC's View:

    Published on: May 1, 2009

    • Safeway announced yesterday that its first quarter net income was down 25 percent to $144.2 million, from $193.4 million during the same period a year ago. Q1 revenue decreased 7.6 percent to $9.2 billion, on same-store sales that were off 0.7 percent.

    • Ruddick Corp. said that its Harris Teeter division had second quarter sales that were up 6.3 percent to $949.4 million, with operating profit that was down to $45 million, compared to $46.4 million a year ago.

    • Kellogg Co. said that its first quarter earnings were $321 million, up two percent from $315 million during the same period a year ago. Q1 sales dipped three percent to $3.17 billion.

    • Procter & Gamble said that its third quarter profit was down four percent to $2.61 billion, compared to $2.71 billion a year ago. Q3 sales fell eight percent to $18.42 billion.
    KC's View:

    Published on: May 1, 2009

    Got the following email from an MNB user:

    The article you ran this morning on Senator Specter (D-PA) promising to vote against EFCA (card check), even though he has switched parties, is misleading for your readers, and especially FMI members. A Senator can always find a way to change his or her position. As an example, at the same news conference, Senate Majority Leader Reid (D-NV) said that he was working on a new version of the legislation that hopefully Senator Specter and several other Senators, who have concerns with the legislation's impact, could eventually support. This is usually "Senate speak" for making minor changes that Senators, who have announced their opposition, can claim credit for and use as a reason for changing their vote. Their is only one thing that will guarantee that Senator Specter will remain true to his promise, strong and constant opposition from the Pennsylvania business community.

    Fair enough.

    On the subject of providing prescription medicines and instructions in a variety of languages, MNB user Tom Redwine wrote:

    You may remember that I was manager of Walmart Radio for several years and heard from many customers and associates anytime we played Hispanic music (usually in areas where there were large demographics of Hispanic customers and associates). I'd handle these complaint calls because I'd had so much practice handling them; usually the caller was older than 40, had no interest in anything you had to say about the subject (unless the response was "Good God! You Are Correct! I'll Stop That Immediately!", which wasn't likely to happen), and just wanted to vent and feel like they'd been heard. Just based on what I know from these calls, I'd guess that the folks in NY are going to be less upset about the changes in their Pharmacies than the folks who read about it in some of the Midwestern and southern states.

    Folks younger than you and I are more tolerant of seeing and hearing additional languages. We've got a long way to go before we're like Europe, where one usually picks up a smattering of several languages over their lifetime, just to be able to communicate while on holiday. Then again, the US (and to some extent, Canada) is still a melting pot. Some of these rigidly held beliefs (like English is the official language) will eventually be forgotten as we get to know our neighbors a little better and they invite us over for some authentic Korean barbeque, Russian borscht, or a dish of cool tzatziki sauce for dipping warm naan.

    [On a somewhat related note, why is it I get hungry after reading MNB? Go figure!]

    Another MNB user wrote:

    You may get a few of these but just thought I would comment on the language topic from NY. Another MNB reader made the comment “After all, isn’t English still the official language of the US.” Actually, the USA does not have an official language (several states passed language legislation but it has been challenged as being unconstitutional). I am a little bit torn on this issue…I don’t like the idea of the government making a mandate like this though I do feel it is good for the public safety, especially in an ethnic diverse place as NY. I would prefer to see the business make this choice on its own…it could be marketed as an additional service offering or just help build goodwill with customers.

    One other note…we’ve gotten dozens and dozens of suggestion for possible new names for the “Sansolo Speaks” column, which a couple of people thought was a little presumptuous. It isn’t too late to make your own recommendation…the winner gets an MNB gift pack made up of an MNB t-shirt, a pound of MNB coffee, and a limited edition MNB canvas shopping bag.

    (BTW….we’ve also gotten lots of people who like “Sansolo Speaks” as a title, and urged us not to make a change. So whatever suggestions you make, it’d better be compelling!)

    KC's View:

    Published on: May 1, 2009

    I had a chance earlier this week to visit CitiField, the new home of the New York Mets…or, as it is known in certain circles, US Taxpayers Field. Or Bailout Field.

    Like so many of the new baseball stadiums that have been built in recent years, CitiField has a lot of charm and is a vast improvement over the old Shea Stadium – because foul territory is much smaller, spectators are closer to the game, which makes the experience a lot more intimate. The seats are wider and more comfortable and concourses are far more spacious and allow views of the field while one is getting food and beverages.

    Now, about the food…I was there with my dad, sister, brother and his two sons, all of whom had hot dogs or Italian sausages. I think it is fair to say that they were underwhelmed; they thought the food was good but not great, and no real improvement over the food at Shea. Which is not exactly what they promised.

    On the other hand, I ventured out to the food court beyond center field. The Shake Shack had a line that looked it was three innings long, but Blue Smoke – a to-go version of Danny Meyer’s popular midtown Manhattan barbecue joint – was more manageable (it only took three outs to get to the front of the line). I enjoyed a wonderful pulled pork barbecue sandwich, some of the best French fries I’ve ever eaten (my nephews Ian and Theo seemed to agree with this assessment) and a great Blue Smoke ale (which Ian and Theo didn’t get to try). My meal cost more – about $20 – than the food eaten by the rest of my family, but was worth it.

    However, I have to say that I was not overwhelmed by the new CitiField, which seems more like an imitation of some of the other new stadiums that have been built over the years. It doesn’t seem to have the charm or individuality, say, of Camden Yards in Baltimore or Safeco Field in Seattle or AT&T Park in San Francisco. I like the Jackie Robinson Rotunda at CitiField, but it seems better in conception than execution. And somehow, $300 for a seat at a baseball game seems absurd…even though that is a lot less than is being charged across town for similar seats at the new Yankee Stadium. Keep charging those kinds of fees to watch a baseball game, and eventually you’re going to kill the sport.

    (I have to say that we had great seats, about 20 rows behind the third base dugout…but that wasn't because we could afford them. My brother teaches at a Connecticut private school, and one of the parents at the school is, shall we say, very, very well connected…and so the seats were a gift. I can’t imagine actually paying for those seats, however.)

    Ultimately, I have to say, what Mets fans needed isn’t wider seats or better food. I think we would have settled for clutch hitting and better pitching and a team that actually scores runs after the fifth inning.

    I read a lot of newspapers, both on paper and online. Every once in a while, there is a headline that grabs my attention, for a variety of reasons. This week, the headline was this one:

    “Under Armour Recalls Athletic Cups Due To Risk For Injury.”


    A big shout-out to my friend Fiach O’Broin, who celebrated his 65th birthday this week. Fiach is someone my son Brian calls “the smartest man on the planet,” and I would never think of arguing with this assessment. One of the great pleasures of this job has been to encounter and become friends with people who I never would have encountered if I did something else for a living…and having Fiach (and his wonderful wife, Anne) as great and generous friends is one of the best things that ever has happened to me.

    The weather finally got warm in New England this week, which meant that white wine seemed in order. I have two to recommend to you:

    • the 2006 Mason Napa Valley Sauvignon Blanc, from California’s Napa Valley, is a lovely little wine, not too sweet and with just the right crispness – I served it with a Caesar salad and grilled chicken.

    • the 2007 El Perro Verde Rueda, from Spain, is absolutely terrific – it has lot of citrus going for it, but also has what I think the wine experts might call “heft,” and is great both with seafood or even a burger when the weather is warm and the thirst is great.

    One final note. Thanks to all of you who sent me nice notes yesterday about both my root canal (part one went fine, and it will get completed in about 10 days…and I have only good things to say about the combination of Vicodin, Xanax and nitrous oxide) and my wedding anniversary (26 years today). I am touched, as always, by how lucky I am to be part of this MNB community.

    Have a good weekend. I’ll see you Monday.

    KC's View: