retail news in context, analysis with attitude

Published on: May 26, 2009

USA Today carries a story this morning saying that California-based Setton Pistachio, the company responsible for the salmonella contaminated pistachios that were first publicized last March, actually knew that it was shipping tainted nuts for six months before the problem went public.

No illnesses related to tainted pistachios have been confirmed by health officials. Setton officials have not yet commented on the story.

Published on: May 26, 2009

The New York Times reports on three current movements that could conceivably impact the use of disposable shopping bags by supermarket shoppers.

• In Connecticut, lawmakers are considering a proposal that would impose a five-cent tax on all disposable shopping bags, which is described as a way to help the environment as well as “pull in some cash for a state in deep fiscal trouble.” (A lot of cash, as it happens – an estimated $20 million a year.) Some of the proceeds would be used to fund what is called a “single-source recycling” plan, “would allow Connecticut residents to put all recyclable materials in a single large curbside bin. Currently, people who have curbside recycling in their communities must separate bottles and cans, paper and cardboard,” a system that many see as outdated.

• New York City Mayor Michael Bloomberg is calling for a similar six-cent bag tax.

• And in Seattle, there will be a referendum this August by voters who will decide on whether there should be a twenty-cent tax on disposable shopping bags.

The Seattle Times writes that area “grocers, caught in the middle, have officially remained neutral.” But there are other environmental efforts going on in Seattle: “City leaders have teamed up with retailers on a less controversial effort. Stores in the program — including all the big supermarket chains, independent stores, Target, and Bartell Drugs — are posting signs reminding people to bring reusable bags, promote their use, sell those bags in their stores, and donate reusable bags to low-income communities.”

Previous efforts appear to be moving the needle. The Times notes that reusable bag use in Seattle has quadrupled in the past year.

Published on: May 26, 2009

Reuters reports that Target plans to relaunch its private label brand under a new name, “Up & Up,” and “will even ditch Target's famous bull's-eye logo in favor of a more visible arrow design.”

The company says that this move builds on its private brand success, which has seen the Target brand grow by 25 percent over the past five years.

Published on: May 26, 2009

Brookshire Grocery Co. announced last week that it has adopted a new format for its print advertising circular, using a smaller size and slicker paper to differentiate it from other circulars, and on the front page featuring “five high-velocity items compared to 12 in the previous ad.”

The ads are used for the company’s two primary banners, Brookshire’s and Super 1 Foods.

Published on: May 26, 2009

The Salt Lake Tribune reports that WinCo is in the process of building three stores in Utah, its first in the state, in the communities of West Valley City, Midvale and Roy. Official opening dates have not been set, but are expected to occur by the end of autumn 2009.

Utah will be the sixth state in which WinCo operates its low price supermarkets, the other being Idaho, Washington, Nevada, California and Oregon. The company has more than 60 stores, and it has long boasted of the fact that it is majority-owned by its employees.

Published on: May 26, 2009

Pennsylvania-based Weis Markets announced late last week that it will acquire the 12 stores owned by Binghamton, NY-based Giant Markets. Terms of the deal were not disclosed, and the acquisition is expected to close within 90 days.

Published on: May 26, 2009

The Minneapolis/St. Paul Business Journal reports that Supervalu CEO Jeff Noddle is rejecting speculation that he was forced out of the top spot at the retailer/wholesaler because of an unwillingness to break up the company.

Noddle said in an interview that he’s been planning his retirement for several years; he is being succeeded by that Craig Herkert, a former Walmart and Albertsons senior executive.

Published on: May 26, 2009

• Walmart said over the weekend that it was delaying the opening of its first cash-and-carry store in India, a joint venture with Bharti Enterprises, because of violence in Amritsar, the northern India city in the state of Punjab. The outbreak of violence follows “clashes between two Sikh groups at a place of worship in Vienna that left one dead and many injured,” the Wall Street Journal writes. “Punjab is a Sikh-dominated state.”

Published on: May 26, 2009

The Financial Times reports that a recent poll of shoppers using Internet grocery services in the UK reveals that Tesco – the biggest of the five – has the poorest ratings when it comes to accuracy, punctuality and value.

Number one in the UK is Ocado, a pure-play e-grocer that gets its food product from Waitrose.

Walmart-owned Asda Groups online service was rated as only being marginally better than Tesco’s.

Published on: May 26, 2009

• McDonald’s announced last week that it is participating in a study that will lay out alternatives to the caging of egg-producing hens. However, the fast feeder is being criticized by the Humane Society of the US for not simply making the move to eggs from cage-free hens, and using the study as a delaying tactic.

• The Dayton Business Journal reports that Starbucks Corp. has created a program to help out employees by allowing them to swap out stock options that are “under water,” which means that the “exercise price is higher than the current value of the stock.”

According to the story, “employees can surrender their options that are ‘under water’ for a lesser amount of new options with a lower exercise price.”

• Published reports say that Bi-Lo has asked the bankruptcy court overseeing its finances for permission to extend from July 21 to October 19 to either assume or reject 250 unexpired leases. Bi-Lo went into Chapter 11 protection in late March, and is trying to shed operations perceived as unprofitable or burdensome.

Published on: May 26, 2009

• Published reports this morning say that Ahold has named Jan van Dam to be president/CEO of its Albert/Hypernova business. Van Dam has been serving as general manager of Etos, Ahold’s chain drugstore business in the Netherlands; he succeeds Johan Boeijenga, who is leaving the company.

Published on: May 26, 2009

The world’s biggest retailer finds itself in an argument with the musical group that has just released the most popular CD in the nation, with the debate focusing on what the retailer believes is inappropriate content and language.

The retailer, of course, is Walmart. The group is Green Day and the CD is “21st Century Breakdown,” which has been described as containing vulgar language and adult references.

Walmart – which sells more CDs than any other retailer - says that it has a longstanding policy not to carry CDs that have a parental advisory sticker, but offers artists the opportunity to produce a “cleaned up” version that it will sell in its stores.

But Green Day has gone on the record – so to speak – as saying that they consider Walmart’s position to be a kind of political and cultural censorship, and it has decried the policy as a way of diminishing the opportunities that smaller bands have to sell CDs in a contracting marketplace.

Published on: May 26, 2009

Last Thursday, before going off on a four-day weekend, MNB took note of a Los Angeles Times story quoting Piper Jaffray senior analyst Mike Dennis as saying that Tesco’s Fresh & Easy Neighborhood Market format continues to struggle- - it isn’t doing enough sales to come close to justifying the enormous investment that Tesco has made in the US, “hasn’t established much brand recognition and has been forced to offer deeper-than-expected discounts to generate even sluggish store traffic.”

There was only one problem with this Times story, which was forwarded to me by an MNB user. It was more than a year old…and I didn’t notice the date on it when I read it. (Maybe that’s a good indication of why I needed the extra day off…)

Anyway, the expiration date on this story was pointed out to me by several MNB users, and I immediately took the piece down. I appreciate you folks noticing something that I did not … and apologize for the misstep.

Published on: May 26, 2009

…will be posted on Wednesday this week. Be patient.

Published on: May 26, 2009

Regarding the credit card legislation signed into law last week by President Barack Obama, MNB user Stefani Fischer wrote:

A friend has heard rumblings from the credit card industry that if this legislation passes, they will be forced to take other measures to ensure their survival. The first one mentioned is that interest charges will be assess from the date of purchase regardless of whether or not the credit card statement balance is paid in full. In addition, they have talked about eliminating all rewards programs. Currently, we use our cards for all monthly household purchases and then pay the balance in full at each billing all the while racking up the rewards points. I’m not sure how many people out there use their credit cards like this but in my limited circle, a good percentage follows this plan. If the credit card companies eliminate rewards and apply interest from the date of purchase, I, for one, will be severely cutting my use of them. Unfortunately, that will make me think twice about every online purchase that I make. Instead of 50% of my purchases coming from the online sector, it will probably be reduced to no more than 10%. Too bad!! I will miss the convenience and the selection!

This actually surprises me.

My feeling is that I prefer low interest rates to rewards. It always seemed to me that there is no such thing as a free reward. (I prefer to pay off my credit card bills each month, but sometimes reality and tuition payments get in the way.)

I also think that if the credit card companies do what you suggest, they’ll run into a PR buzz saw, and maybe additional regulation. They may want to avoid both.

Another MNB user wrote:

The thing that appalls me about the credit card bill is that it was allowed to go through with the handguns in the national parks amendment intact- because no one wanted to take the time to challenge it and hold up the bill. A shining example of why totally unrelated matters should not be permitted to be tacked on to legislation.




Regarding the ongoing discussion of traceability and transparency in the meat and overall food supply, MNB user David Armstrong wrote:

The issue is who pays for the tracking of this detailed information to secure transparency. The consumer wants economical safe food, the government wants an easy way to track the grown products, and the packer (getting larger scale every decade) needs a cheap way to track this 1000# bit of cow after it is put in 200 packages at the store.

I do not think we have the technology available for me to pick up a package at the mega market that says this came from cow 5692 at farm 106923 without the information costing more than the meat.

This brings up the true food choice - cheap food with risk or pay more and buy local where you know where your food originated. Welcome to the global economy!



We had some discussion here last week about why car companies are in such trouble, which led one MNB user to write:

While fuel standards and unions are part of the overall problem with the car companies, the real issue is a completely outdated business model. Car salesman are still hucksters trying to lure unsuspecting rubes into buying a car out of inventory (that new car small and feeling) that is not what the consumer wants – but what the company wants to sell.

When has the concept of loading up on inventory that nobody really needs, holding it for as long as two years and then dumping it with a variety of discounts and deals plus being completely undifferentiated from a similar dealership 5-10 miles away for a purchase that is intended to last 3-15 years been a good business model???

Only when car companies allow me to place an order for a car that I want with all of the add-ons that I desire and be able to deliver that car in around two weeks will the car companies final be in a sustainable business model. Too much of the cost of the car is an inventory carrying cost that is completely unnecessary – if they truly understood their consumer.

They all deserve to go out of business – their business model (including fuel and labor) has not been sustainable for over a decade…

Agreed.




I mentioned on Thursday before taking off for the weekend that Memorial Day is “a national holiday that kicks off the unofficial start of summer.”

MNB user Steve Schreiber admonished me:

Memorial Day has nothing to do with the start of summer but everything to do with the sacrifice made by our veterans. I am not a veteran but feel we need to keep their memory as the reason for the holiday.

If you are a veteran, thank you. If not, thank them.

Summer can start on Tuesday.

Point taken. No disrespect meant.