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 4, 2009

    The Washington Post has a story about how the Walt Disney Company is actively using its various characters and franchises – ranging from Mickey Mouse to “High School Musical” – to brand and sell healthier food, including fresh produce and dairy products.

    According to the Post, “Disney's practice of licensing its characters for placement on children's food products is not new, but its strategy is. Whereas cereal boxes and fast-food bags used to be prime real estate for company-to-kid marketing, alarming rates of childhood obesity caused Disney to think twice about aligning its name with sugary or fatty foods. So over the past few years, Disney has gradually distanced itself from junk food … Now, there are more than 250 offerings in the Disney Garden line, at least one of which is available in 18 of the top 20 mass and grocery retailers in the United States. Sales grew 70 percent in 2008 over the previous year, thanks to expanding offerings.”

    KC's View:
    The Post notes that while Disney no longer is criticized for contributing to the nation’s obesity problem, there still are those who argue that using these kinds of methods to sell anything to kids is wrong…that, in the words of one critic, “the best thing we could do is to stop marketing any food to them and let parents make choices about what their children eat without being undermined by advertising.”

    Isn’t it pretty to think so.

    Maybe we also could get kids to turn off their computers and iPods and instead spend time down at the malt shop…except, of course, that the stuff you drink at the malt shop probably contributes to obesity issues.

    The simply fact is that kids are exposed to marketing and advertising images all the time, and one of the things that parents ought to do is teach their children how to differentiate among them. I think there is a pretty good argument for being careful about how and what you market to little kids, but suggesting that companies not be allowed to market healthy products to kids seems silly and counter-productive, and the result of fuzzy thinking by people who aren’t dealing with reality.

    Published on: May 4, 2009

    Michigan-based Meijer has begun posting nutritional information for 8,000 products in its 187 stores, using the NuVal Nutritional Scoring System that rates products on a scale of 1-100.

    According to the Journal Gazette, the scores have been determined “by independent nutrition scientists who evaluate foods for more than 30 nutritional factors, including the amount of vitamins, minerals, fiber, sugar, salt and saturated fat.” The products currently being rated fall into 15 food categories, and the retailer reportedly plans to expand the system to other segments of the store.

    According to the NuVal website, the system “summarizes the overall nutritional value of food,” and “uses the Institute of Medicine’s Dietary Reference Intakes (quantitative reference values for recommended intakes of nutrients) and the Dietary Guidelines For Americans (advice from the Department of Health and Human Services, HHS, and the Department of Agriculture, USDA, about how good dietary habits can promote health and reduce risk for major chronic diseases) to quantify the presence of more than 30 nutrients – including vitamins, minerals, fiber, and antioxidants; sugar, salt, trans fat, saturated fat, and cholesterol. The system also incorporates measures for the quality of protein, fat, and carbohydrates, as well as calories and omega-3 fats. The NuVal System also takes into account how these nutrients influence health based on broadly accepted, published scientific literature.”

    The NuVal system is different from the Guiding Stars program developed and being licensed by Delhaize USA in that the latter approach rates all products but only gives one, two or three stars to products that qualify as good, better and best. NuVal already is being used by Hy-Vee and Price Chopper.

    KC's View:
    I still don't get the NuVal system. Not the scientific theory behind it – that makes sense. But I continue to believe that the 1-100 rating system is not the best way to communicate information to shoppers…and when I’ve seen the shelf labeling in stores, I’ve been underwhelmed by it. Nutritional labeling is, among other things, a marketing program…and I’m just not sure that NuVal is doing the job. You see those little numbers, and they don't have any real context, and I’m not sure that they are effectively shaping consumer attitudes or decisions.

    The only thing that makes me second guess myself on this reaction is the fact that I have enormous respect for Hy-Vee, Price Chopper and Meijer…and I figure that they must be seeing something that I don't.

    Published on: May 4, 2009

    Here’s a great little marketing story…

    The Maryville Daily Forum in Missouri reports that the Hy-Vee there has started a free walking club that encourages shoppers to get together for long walks that can contribute to a greater feeling of health.

    The club is the brainchild of store dietitian Deanna Bottorff, who will be leading the walks … and using the concept to spread the word that Hy-Vee is able to take an active role in helping people live a healthier lifestyle.

    KC's View:
    Smart idea. Not complicated, but smart…and the kind of thing that potentially can move the needle on consumer behavior.

    Published on: May 4, 2009

    The Houston Chronicle reports on the opening of Walmart’s new “Supermercado” store in the city, described as a aggressive effort to reach out to Hispanic shoppers with a themed supermarket format. Walmart also plans to open a “Mas Club,” which in essence is a Hispanic-themed Sam’s Club store.

    Walmart says that it is bringing experience to the market from its Latin America operations.

    I think this is a natural evolution of what we’ve been doing for years,” Jose Antonio Fernandez, Walmart’s vice president of business development, tells the Chronicle.

    KC's View:
    Canny move by Walmart. I haven't been able to see Supermercado yet, but one of the valued and experienced members of the MNB community has…and he sent me the following notes about the format:

    Marketing:
    • Signs comparing Supermercado prices to Fiesta and Kroger were sporadic throughout the store.
    • Signs in the store were in Spanish…the only exceptions were signs up front at the check-out and signs identifying specific departments.
    • A truck advertising Supermercado was driving around the neighborhood advertising the new store. We noticed the truck driving around two miles from the store off the main roads in neighborhoods.
    • A truck parked on the side of the road, one mile from the store, was giving away ads and free oranges. Three people were manning the truck. Each was very friendly. Their tag line was “try our food at our new store Supermercado, it is great quality.”
    • “Vitamin Water” truck parked in front of the store playing Hispanic music. A free bottle of Vitamin Water was given to each customer as they entered the store.
    • Valle fruit nectar was also located outside the front of the store giving away samples.
    • Self-service dome samplers were placed throughout the produce department.

    Store merchandising:
    • Large produce displays up front…produce was displayed in bins with great prices. i.e. Avocados - 4/$1.00, Roma tomatoes - 3 lb/$1.00, Cilantro - 4/$1.00 and Bananas - 4/$1.00.
    • Wet produce case was displayed at a high angle massed out.
    • Meat department…most meat was displayed in a service case. There was a small self-service case (24 ft).
    • Wall of value on the back wall…the product selection was canned goods, dried beans, rice, sugar, cereal, condiments, juice and cooking oil. The product was signed with end cap signs above each pallet comparing to Fiesta and Kroger.
    • Full service In-store bakery…fresh tortillas and bolillios made daily. Four feet of tres leches cakes displayed and four-foot ice cream birthday cakes in the bakery.
    • Large detergent and paper displays. Four foot of Foca detergent
    • Drive through pharmacy.
    • There were not any self service check-outs.


    Thanks for sharing.

    Published on: May 4, 2009

    USA Today reports this morning that the US Food and Drug Administration (FDA) has rolled out a $3 million mobile food safety lab consisting of three trailers that the organizations says “can be suited up and rolled out to anyplace in the country facing the danger of contaminated food, whether at the hand of terrorists or Mother Nature.” FDA hopes that use of the trailers will improve its response time and effectiveness – not to mention its tarnished image.

    "The labs bring our cutting-edge technology closer to where food is grown or imported into the country," says Michael Chappell, FDA acting associate commissioner for regulatory affairs. "Tools like our mobile labs help make our food supply safer by allowing us to identify a potential problem faster, enabling us to react more quickly and limiting exposure to a food-borne pathogen that may make people sick."

    KC's View:
    Certainly FDA needs all the help it can get, both in terms of actual performance and perception. Despite my enduring skepticism, I’m willing to be convinced.

    Published on: May 4, 2009

    • Tesco, which has been providing carbon footprint labels on 100 products – informing shoppers about the CO2 and other greenhouse gases produced in the manufacture of the items – reportedly has decided to expand the program so that it extends to every one of its private brands.

    “Last year Tesco started on an exciting journey of carbon labeling everyday products to help consumers understand the environmental impact of the things they buy, and I’m delighted to say that the early feedback from customers is very encouraging,” said Lucy Neville-Rolfe, Tesco’s executive director for Corporate and Legal Affairs.

    KC's View:
    I find it interesting that Tesco says that more than two-thirds of its customers understand what “carbon footprint” means, and that even more of them are actively trying to reduce their carbon footprint. That seems high to me…but it also may speak to 1) the greater awareness of UK citizens, or 2) Tesco’s effectiveness in communicating about the issue.

    Published on: May 4, 2009

    HealthDay News reports on a four-decade Dutch research study saying that men who drink up to a half a glass of red wine each day can boost their life expectancy by five years as compared with non-drinkers.

    The only caveat in the study is that it is possible that men who engage in light, long-term alcohol consumption may be living healthier lifestyles in general – they eat better and exercise more.

    KC's View:
    Doesn’t get any better than this. I just wish that a full glass of red wine meant 10 years more life expectancy. Because I’m up for that.

    Published on: May 4, 2009

    The New York Daily News reports that Costco is getting a lot of pressure from city politicians to change its longtime policy of not accepting food stamps. Especially because the membership club giant has a new store in East Harlem; more than 1.2 million New Yorkers use food stamps.

    Costco has said that it does not have the technology to process food stamps.

    Experts believe that Costco eventually will have to change its policy, especially since competitors Sam’s Club and BJ’s Wholesale Club already have made similar decisions.
    KC's View:

    Published on: May 4, 2009

    Bankrupt Bruno’s Supermarkets said late last week that it will sell 56 of its stores to Southern Family Markets for $45.8 million.

    Southern Family plans to operate 31 of the units and liquidate the other 25.

    C&S Wholesale Grocers owns Southern Family, which bought 60 Bruno’s stores and a distribution facility back in 2005.

    A final sale hearing is scheduled for today in bankruptcy court.
    KC's View:

    Published on: May 4, 2009

    • The Wall Street Journal reports that Walmart is expanding a new pilot program that sells low-priced pharmaceuticals to businesses when they sign up to buy directly from Walmart’s in-store pharmacies. The program puts Walmart into heightened direct competition with Walgreen, CVS Caremark, and other third-party pharmacy-benefit managers that have been making inroads in the business community.
    KC's View:

    Published on: May 4, 2009

    Advertising Age reports that Procter & Gamble cut its marketing spending by more than $400 million during the last fiscal quarter, but increased its media exposure by about five percent – the result of what Ad Age calls “sharply falling media rates” around the world.
    KC's View:

    Published on: May 4, 2009

    • The Golub Corporation/Price Chopper supermarkets announced that Steven Duffy has been hired as Vice President of Architectural Design and Purchasing Services, responsible for overseeing the design of new and remodeled stores and the purchase of equipment and fixtures for the 117-store chain.

    Duffy comes to Price Chopper from Talbots, Inc, where he held the position of director of Store Planning and Design. Previous to that, he was employed by Safeway and Toys R Us.

    • Lisa Loscalzo, a founder and executive vice president of business development at The Little Clinic, has been promoted to be president of the company, which operates in-store medical clinics at chains such as Kroger and Publix.

    • In Panama, a man described as a “supermarket magnate” has been elected president in a landslide. Ricardo Martinelli, chairman of the Super 99 chain there – the biggest in the country – received 61 percent of the popular vote and campaigned on a conservative agenda.

    KC's View:

    Published on: May 4, 2009

    • Publix Super Markets said that its first quarter net earnings were $321.5 million, down 6.3 percent compared to the same period a year earlier. Q1 sales were down 2.2 percent to $6.4 billion, on same-store sales that were down 2.8 percent.
    KC's View:

    Published on: May 4, 2009

    There are reports out of Florida that Miami Dolphins Stadium – formerly know as Joe Robbie Stadium – will be renamed yet again…and this time, it will be called “Landshark Stadium,” after the beer that is co-marketed by singer/songwriter Jimmy Buffett and Anheuser-Busch.

    The deal – which may only be for one year – is said to be part of a broader, yet-to-be defined business arrangement between Buffett and the Dolphins.

    KC's View:
    I’ve been hyping Landshark here on MNB since it was first brought onto the market…it is one of my favorite hot weather beers…so maybe I’ll be able to score some tickets to Landshark Stadium when the name gets changed. (Like maybe for when the Jets come to town?)

    Published on: May 4, 2009

    Jack Kemp, the self-described “bleeding heart conservative” who seemed to move effortlessly from 13 years as a professional quarterback – primarily for the Buffalo Bills and San Diego Chargers – to a career as politician and statesman, died over the weekend of cancer at age 73.

    Kemp was a vocal and eloquent advocate for free market capitalism who served in the US Congress, as Secretary of Housing & Urban Development (HUD) in the George H.W. Bush administration, and as the GOP vice presidential candidate when Sen. Robert Dole ran for president in 1996.

    KC's View:

    Published on: May 4, 2009

    Got a number of emails regarding our piece last week about 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.” 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.

    My comment:

    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.


    MNB user Mike Sommers replied:

    I’m going to have to disagree with your statement … With the numbers that you reported that US supermarkets lose each year, employees are responsible for the loss of 19.36 billion dollars. Apparently they have proven that they aren’t to be trusted and this kind of technology is warranted…like it or not.

    Another MNB user wrote:

    The hard cold fact is there are dishonest people willing to steal from the company they work for. In turn, these losses affect the bottom line and the fiscal opportunity for a company to offer employees better wage increases and better benefits. Presented to employees in this manner, I think most honest employees would not object to technology aimed at helping the company’s profitability.

    Yet another MNB user chimed in:

    Trust, but verify…

    I still think that maybe a different approach to hiring and employee engagement could help address this issue. Witness this email from MNB user Susan Stewart:

    Some stores consider staff as their best marketing investment; paying staff a fair wage, treating them well, giving great discounts, continual training, and other perks that only a grocery store can provide works to spread the word about what a great store they work at. Everyone they talk to can see the sincerity and enthusiasm and are compelled to shop there. Works really well for those who can see their staff as an investment, which they really are. This reminds me to tell my boss how glad I am to be here.

    And another MNB user sent me the following email:

    Something that I am not hearing about are the working conditions for retail managers and employees. In the fight to stay profitable, I work for a leading $ store as a manager, our workload continues to increase while payroll continues to drop. We are heavily task oriented to the point of being implementers of a plug and play system as opposed to managers. I am in an older store, which needs a remodel, or to be moved because of what is now a poor location. We have turned our sales around from 3 straight years of negative sales growth to a small, but positive growth this year. We are more profitable now, and this after losing the only "draw" near us, a video rental store. This is not enough to get any kind of bonus or raise this year.

    Our emphasis is all about task, and catching our employees stealing. If my numbers were down, but all of my tasks were completed on time I'd probably be getting praised. Instead I always feel like the hammer is about to drop... and I am not alone.

    No longer is personnel development even a part of our jobs, though it is given lip service. Everything is about the bottom line, my company posted a massive increase in profitability over LY, but it is not trickling down to the managers or the hourly employees in terms of wages, bonuses, or benefits. A massive emphasis on shrink, of which my company claims 70% is employee theft , helps an unhealthy feeling of paranoia and negativity. Even though the company is doing well, the company, (store managers and below), are not. The pressure to perform is growing daily, to the point that even in this weak job market, many of my peers have quit, or are ready to quit without the next job in place.

    I fear that my employer thinks that their strategies have driven this profit growth and are not seeing that our recessive economy is causing consumers to look for cheaper alternatives for their needs.

    I believe that when this economy turns around, and it will, many of the shoppers we have gained will utter a sigh of relief and then return to their old stomping grounds. In the end I believe that most people are loyal to their wallets and felt needs, and as soon as they can, they will find a way to satiate both of them, as in Walmart, every retailers arch nemesis.

    It sucks to be working most segments of retail right now and the people who are equipped to leave, will leave. It is becoming a heartless business and is a lot less fun than it used to be.





    Got the following email that covered several subject:

    It’s becoming increasingly clear that you’ve taken the politically-correct road rather than maintaining your past irreverent commentary style that appealed to me because it sought out the practical truth. Given your past criticism of Starbucks, which was dead on right (and by the way I am a loyal patron), your lame commentary on their rather anemic public relations tactic to justify higher prices, led me believe that you have recently invested in Starbucks stock. What happened to calling out BS ???

    The potential impact of the swine flu pandemic has been amplified for political cover by the Obama administration to ensure they clearly “lift and separate themselves” from the past administration’s response to Katrina. They want to look good by “over-clubbing” the situation. I’m not suggesting that steps shouldn’t be taken to slow the potential spread of the flu bug; however, if we follow the logic that you espouse we probably should cancel people congregation unless that congregation is important. Thus far and thankfully, schools, universities, businesses, government, etc. continue to operate. In fact I’m traveling to my daughter’s high school soccer tournament this weekend where hundreds of people will congregate. Perhaps we’re idiots but I guess we believe true value is derived from the tournament.

    I would suggest the real reason for the FMI meeting being canceled is because the potential risk of spreading the flu—the downside-- is far greater than the very meager value the FMI truly generates—the upside. I’m certainly not anti-FMI, I think they are correct not to meet .. it’s not worth it. To me, that’s the news…it’s not worth it.

    Your approval for the reason they don’t meet is again, politically-correct and appears to be pandering to those leaders within FMI who could facilitate your access to industry information in the future.

    Message: You’re talented and you provide a good product. However your reputation as a truth seeker and calling out BS should never be in question. Stay true.


    Fair enough.

    Let me respond, if I may.

    I don't own any Starbucks stock, nor do I have any friends at the company…so any personal investment … beyond being a longtime customer … doesn’t exist. I get your point, and it is a legitimate one…but I’ve argued all along that companies like Starbucks cannot run away from their core value proposition, and that even in a recession they have to find ways to make it work for them. The new ads may not work…and in fact, I implied that they were a bit warmed-over because one of them recycled the title of Howard Schultz’s book (a point I probably could have been harsher about).

    As for the swine flu situation…right now, things don't look nearly as dire as they did a week ago…but we didn’t know that a week ago. I’ll concede that there may have been some political reasons for responding strongly…but public officials make a convincing argument that it is easier to overreact and pull back than it is to under-react and then try to ramp up.

    You are welcome to make that argument about the value of the now-cancelled FMI Future Connect conference. We won’t know whether it is fair until the show is rescheduled and actually takes place; I will admit to some bias here since my friend Michael Sansolo has played a major role in shaping the Future Connect agenda, and I trust his judgment in all things. (Almost all things. We differ on a lot of TV shows and movies. Don't get me started on how I could be the friend of a guy who liked the movie version of “Sex and the City”…)

    But I think that the folks at FMI would be surprised and amused by your characterization of me as someone who is trying to curry favor within the industry by serving as an FMI lackey. (There are folks there who refer to me derisively as “that blogger”… which, especially at my age, is something of a compliment since I’ve been doing this since before the term “blog” was invented.)

    That said, let me say that I take your “no BS…stay true” admonition very seriously. I don't ever want to get lazy. Or complacent. Or politically correct.

    KC's View: