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    Published on: May 5, 2009

    by Michael Sansolo

    Like me, you may remember times back in school when you were not completely ready for a test and the fates magically interfered. There would be an unexpected snow storm or a teacher would call in sick and suddenly we had a reprieve. It was temporary, was rarely used properly, but boy, we enjoyed it.

    A reprieve is what faces us in industry today. Despite my huge bias (and long hours spent on) the now-delayed Food Marketing Institute (FMI) Future Connect conference – which was postponed last week because of concerns about the swine flu – I understand that most of the world didn’t see this as a life-changing moment. Too bad.

    The delay in the event isn’t a reprieve. (Despite what one MNB letter writer suggested yesterday, this event was ready to go and the value would have been surprisingly strong.) Rather, the reprieve is the sudden lack of urgency on the problem of future leadership. Simply put, swine flu and the weak economy are not making the problem of future leadership go away. Just like that test at school, the reason for Future Connect is still coming.

    Future Connect was planned to combat a very significant problem in two different ways. The problem is this: the enormous Baby Boom generation is still moving at warp speed toward the end of its working life, even if 401ks are now affectionately known as 201ks. The problem is documented throughout the economy and in nearly every industrialized nation.

    Making matters worse, the enormous size of this generation - my generation – means that Boomers have a stranglehold on management positions. In the food industry that extends from the executive suite down to store level in many companies. So when Boomers start retiring in record numbers (we do everything in record numbers) the management drain will be incredible.

    Future Connect aimed to address this two ways: First, to get younger people in the industry excited and educated about their jobs, possibly making them more willing to stay longer. But second, and more importantly, to help today’s managers understand the diversity and complexity of the younger generations they need to attract and retain.

    And that takes me back to our discussion in this space last week about E.F. Hutton, a brokerage firm that is indelibly placed in some of our minds and completely unknown in others. (Oh, the power of a great advertisement strikes again.) We have to remind ourselves constantly that the experiences that shape our lives are very different from those that shape our co-workers, our underlings and even our bosses. Those differences impact our communication, our listening style, our work style…well, pretty much everything.

    Like it or not, we live in the age of Twitter, texting and Facebook; American Idol and the Jonas Brothers; Al-Qaeda and Hugo Chavez; and broken American car companies, banks and more. Yes, the young generation produced two idiots jamming pizza cheese up their noses on YouTube, but it has already produced people like Mark Zuckerberg who created Facebook while in college and now has 200 million passionate followers. (Boomers should remember - we produced disco and streaking along with Bill Gates, Steve Jobs and Yo-Yo Ma.)

    We live in a time where lots of people speak different languages and when job hopping is no longer seen as negative. In short, it’s an era of complexity. You can get mad at it or learn to deal; I’m hoping you choose the latter.

    So yes, Future Connect was delayed because of the swine flu (an absolutely correct call, by the way.) But the clock is still ticking on Boomer retirements, which means the problem - and the need for action - still linger. Are you going to start studying or pull the covers back over your head?

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

    KC's View:
    I don't often comment on Michael’s columns, but permit me a moment of personal privilege…

    I was interviewing someone yesterday for a different project who made a point relevant to this issue. He was telling me about a retailing company that specializes in catering to young, urban consumers…and that has a board of directors made up primarily of white males with an average age of 68. The board has people with financial and operational expertise, but nobody who really understands the cultural imperatives of the company’s target demographic. Y’think this is an isolated instance?

    From the board room to the stock room, there are a lot of companies in this industry drastically in need of a leadership transfusion. At the risk of being accused of political correctness, it always was my sense that FMI’s Future Connect was a good starting point for the industry to deal with this critical reality…an issue, by the way, that we’ve been talking about on MNB for almost eight years, and that Michael Sansolo has been addressing for as long as a decade.

    I hope that at least in some form, Future Connect gets rescheduled. I believe that consideration of the issues upon which it was going to be focused cannot be delayed.

    Published on: May 5, 2009

    The Wall Street Journal reports that “the old-fashioned list is getting a boost from new technology. While plenty of people still scratch lists on envelopes, napkins and wrappings from the morning's doughnut, a growing abundance of online shopping-list services is changing the way shoppers plan their outings.

    “The online lists, launched in recent years by grocery chains and independent companies, can be accessed through all types of media, including messaging services and smart phones. The features include links to online coupons and auto-suggest features based on items listed in the past.”

    KC's View:
    One of the sites out there that allows people to create online shopping lists, even permitting family members to add items from different computers and locations, is called GrocerWiz.com…which, as I see it, is sort of an unfortunate name.

    Cheap joke aside, the reality right now is that if your product is not on the grocery list when they enter the supermarket, the odds are that the shopper won’t be buying it.

    Retailers and manufacturers have to make that one of their highest priorities – finding ways to get on the list.

    Published on: May 5, 2009

    The New Mexico Business Weekly has an interesting story about Sunflower Farmers Markets, which is making a major investment in the state – building four new stores, doubling its presence, and investing $10 million there.

    One of the keys to Sunflower’s success, even in a tough economy, has been that it emphasizes sharp pricing on organic foods, taking advantage of the fact that Whole Foods is largely perceived as being high-priced. However, even Sunflower has been affected by the recession; according to the story, Sunflower “hoped to open 15 new stores this year, but could only get financing for eight.”

    Mike Gilliland, Sunflower’s CEO and a co-founder of Wild Oats, tells the paper, “When we ran Wild Oats and went toe-to-toe with Whole Foods, we tried to stay as far away from them as possible. Now I don’t mind being across the street. We are catering to a different customer who doesn’t shop at Whole Foods.” The Sunflower Farmers Market mantra, according to the New Mexico Business Weekly, “has been to undercut Whole Foods’ pricing by at least 20 percent, and it does a monthly basket survey of 200 items to compare pricing.”

    KC's View:
    One gets the sense that the folks at Sunflower put a premium on the ability to be nimble…which gives them a real advantage in any pitched battle.

    Another advantage – its segment of the industry continues to grow (see the news about organic growth below).

    Published on: May 5, 2009

    The Reputation Institute, a corporate image consulting firm, has published its annual list of the 25 most reputable companies, based on how the organizations are viewed in terms of trust, esteem, admiration and good feeling – and almost half the companies listed either are supermarkets or manufacturer products sold in supermarkets.

    The retailers on the list include Costco at #10, Kroger at #19, Amazon.com at #20, Lowe’s at #21 and Publix at #23.

    CPG manufacturers on the list include Johnson & Johnson, which came in at number one on the list; Kraft (#2), General Mills (#4), Colgate-Palmolive (#13), Kimberly-Clark (#14), Procter & Gamble (#15), and PepsiCo (#16).

    KC's View:

    Published on: May 5, 2009

    Walmart’s plans to build a new supercenter new a Virginia Civil War battlefield now has a new opponent – actor Robert Duvall, best known for roles in movies such “The Godfather,” “The Great Santini,” and “Apocalypse Now.”

    Duvall said at a press conference yesterday that he is not anti-Walmart, but believes in “capitalism with sensitivity.” The actor said he will work with preservationists to prevent Walmart from building near the battlefield where Confederate Gen. Robert E. Lee first fought the Union's Ulysses S. Grant.

    Duvall, as it happens, is a descendent of Gen. Lee.

    KC's View:
    It is dubious that Duvall will be wandering a Walmart parking lot muttering, “I love the smell of low prices in the morning…”

    Mike Duke better be careful, or he’ll end up with a horse’s head in his bed.

    Published on: May 5, 2009

    The Denver Business Journal reports that King Soopers and Safeway have begun running ads looking for temporary workers in the event that a work stoppage takes place in the Mile High City; Albertsons reportedly is about to do the same.

    “Meanwhile,” the Business Journal writes, “the roughly 45 workers at Safeway’s area distribution center voted to strike if necessary on or after May 9, the date that the current five-year contract between the stores and the union expires. Other groups of the workers will take similar votes in the days leading up to the end of the contract …
    Both sides cautioned, however, that while the actions help them to get ready for a strike, they do not mean that any kind of work stoppage is inevitable or even more likely than it was when negotiations began on April 9.”

    Meanwhile, the United Food and Commercial Workers (UFCW) has filed a federal complaint, charging that the three retailers have violated labor law by teaming up for negotiations and not disclosing the terms of their agreement. The UFCW also said that King Soopers is violating federal labor law by offering to pay replacement workers more than some of the unionized workers with whom it is negotiating.

    KC's View:

    Published on: May 5, 2009

    The Organic Trade Association (OTA) is out with its 2009 Organic Industry Survey, saying that “US sales of organic products, both food and non-food, reached $24.6 billion by the end of 2008, growing an impressive 17.1 percent over 2007 sales despite tough economic times … Results show organic food sales grew in 2008 by 15.8 percent to reach $22.9 billion, while organic non-food sales grew by an astounding 39.4 percent to reach $1.648 billion. As a result, organic food sales now account for approximately 3.5 percent of all food product sales in the United States.”
    KC's View:

    Published on: May 5, 2009

    • The California Grocers Association (CGA) said yesterday that its annual Western Food Industry Exposition (WFIE) will get a new name this year, being rechristened the CGA Strategic Conference.

    “The Association’s Convention Committee determined it was time for the convention’s name to better reflect who it was representing,” said Committee Chair George Frahm, Stater Bros. Markets. “The convention draws attendees nationwide, but the lion’s share are from California.”

    This year’s CGA Strategic Conference is November 1-3, 2009, at the Mandalay Bay Resort and Casino in Las Vegas.

    • The Washington Post reports that Ahold-owned Giant Food “has added handheld scanners at about 60 of its 182 stores in the Washington area that allow customers to tally the cost of their groceries as they shop.” The program follows a test of the concept run at its sister Stop & Shop chain.

    KC's View:

    Published on: May 5, 2009

    • Nash Finch said that its first quarter net income was $14.4 million, up 36 percent from $10.6 million in the same period a year earlier. Sales grew 14 percent to $1.14 billion from $1 billion, on same-store sales that were up 3.2 percent.

    • Rite Aid said that its April sales were flat at $2.003 billion, compared to the same period a year ago; same-store sales were up 1.8 percent.

    • Walgreen Co. said that its April sales rose 11.1 percent to $5.4 billion, on same-store sales that were up 5.7 percent.

    KC's View:

    Published on: May 5, 2009

    I love emails like this one, from MNB user Karyn Chenoweth:

    I had to share another Customer Service story that absolutely floored me.

    Long story short, we had purchased a special order dog door from Home Depot which didn’t end up being the product we expected. We called our local HD store, who apologized and discovered that the door manufacturer had changed specifications without alerting HD or changing their product literature. I called the Home Depot 800 number to suggest that they work with their supplier to avoid other customers having the same problem. I figured it would end there.

    Instead, we got a call just a day later from the store manager with further information. Following my call, the complaint had been forwarded to the store and the special orders group. They had reached out to the door supplier and got a full explanation as to why the changes had occurred. They jointly offered to produce a door that met the old specifications and offered to deliver it to our house since we’d been inconvenienced.

    I was shocked at that level of responsiveness and fast action and just had to share with you as an example of OUTSTANDING customer service and problem resolution. Great job, Home Depot. That is a true loyalty program!


    True.



    We had a story yesterday about Tesco increasing the products on which it provides carbon footprint labeling, and I expressed a little skepticism about how many shoppers actually understand what a carbon footprint is. Which led one MNB user to write:

    The Tesco story about Carbon Footprints is yet another example of retailers letting the competition get ahead of them on issues important to their customers.

    If any of your readers don’t know what a Carbon Footprint is, have them ask a 12-yr old and I bet they could explain it.

    Now I would also bet more than half of your readers are Republican leaning, religious and conservative, and most of them probably agree with Limbaugh that all environmentalists are wackos. Being from Kansas I get it, we’re still debating whether or not to teach evolution in school.

    Forget the science on global warming for a minute. Like it or not, today’s youth are being taught about environmental issues and those retailers insightful enough to capitalize on that sensitivity are smart even profitable to do so. It’s the right thing to do whether you believe in the science behind it or not. I for one would rather be politically correct all the way to the bank.


    Rush said yesterday on his radio program that Republicans have a choice: they can listen (something that moderates seem to be suggesting) or they can teach (which would be his choice).

    The same choice, it seems to me, is there for retailers to make.

    Some might call it political correctness. But I think you learn more by listening.




    Regarding the NuVal nutritional labeling system, about which I continue to express skepticism, one MNB user wrote:

    NuVal and Guiding Stars are but two of approximately 40 health rating systems. The industry has successfully taken a good concept and has made it meaningless. How many consumers will take the time to learn each stores “health code”?

    Good point.




    We had a piece yesterday about how Disney is using its licensed characters to sell healthier food, and how the Washington Post noted that “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’.”

    I responded:

    The simple 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.

    MNB user Suzanne Crettol wrote:

    I often wonder how we got to a place where parents are a mere presence in the home instead of the force that drives the home. Every parent who read the Washington Post article should feel insulted that they are portrayed as weak beings that succumb to their children’s need for all that is advertised - the article should have been pointed the finger at the parents instead of advertisers. When I was a child I could sing virtually every jingle down the cereal isle at the grocery store with my Mom saying no the entire time and though my son does not know the jingles (thank you on-demand for no commercials) he too hears no down the cereal isle because I parent.

    MNB user Sriram Daita wrote:

    I am amazed that consumers blame companies for obesity problem. How about consumers take the blame for buying the product in the first place? No one is forcing them to buy the product. Consumers have a choice and if parents let companies influence their kids then they are not parenting very well. It is time that as a nation we do some introspection and take personnel responsibility on the actions. Be it politicians, wall street honchos, kids everyone is OK with pointing finger at society for the problems. But do not we make up the society?




    And, we got a great email responding to yesterday’s story about a new study saying that light consumption of red wine can actually extend one’s lifespan:

    As Ben Franklin said: “In wine there is wisdom, in beer there is freedom, in water there is bacteria.”

    Can I get an “amen”?

    KC's View: