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    Published on: June 10, 2009

    The New York Times features interviews with a number of retailers – including Walmart and Target – in which they assess the impact of the recession and burgeoning unemployment figures on what people are buying.

    • Other than private label groceries, the growth of which has gotten significant media attention in recent months, the trends seem to be breaking this way:

    • Cheaper beef cuts are more popular, and carbohydrates have been making s comeback because they tend to be less expensive than protein.

    • Refrigerated and frozen pizza sales are up, as are the sales of microwave popcorn and popcorn poppers.

    • Flat screen TV sales are up, while luggage sales are down. (A new television is a lot less expensive than a vacation.)

    • People seem to be buying more seeds so they can plant their own gardens and feed themselves.

    • Sales of items like vitamins, supplements and over-the-counter medications are on the rise, as people try to take care of themselves … if for no other reason than people are afraid to take a day off from lest they be discovered to non-essential.

    Here’s an interesting one: The Times writes that Walmart CMO John E. Fleming says that sales of baby formula and clothing are up, but that “Walmart could tell when parents were strapped: in the first weeks of the month they buy packs of 88 diapers; by the end of the month they’re buying the 40-pack. And at Sam’s Club, sales of pull-ups — that intermediate step between diapers and underwear — are down, suggesting parents are moving their children directly to underwear to save money.”

    KC's View:
    Which means, I think, that if you want to look long-term, there will be a burgeoning need for therapists in about 15-20 years as all these kids try to cope with the notion that they were forced into toilet training too soon because of economic pressures.

    In all seriousness, virtually all of these shifts suggest new marketing and promotion opportunities to retailers that are willing to be innovative. As has been said here before, people haven't lost their aspirations – they just are being a lot more selective about how they go about fulfilling them. Marketing to a value-conscious consumer doesn’t always mean marketing to the lowest common denominator, I think.

    Published on: June 10, 2009

    Business Week has a story entitled “Supermarket Strategies: What’s New At The Grocer,” in which it looks at what some retailers are doing to market to a recession-minded consumer.

    Among the techniques cited by Business Week:

    • “One way a grocer can impress consumers is to get out of the way. Smart shopping carts, mobile coupons, and self-checkout lanes let consumers help themselves. They can pull up reviews on products, keep a running tab by scanning goods as they're placed in a cart, download coupons for them on cell phones, and pay without ever entering a line.”

    Business Week notes that another way to cater to consumer is to create more tightly focused retail experiences, which is what companies like Publix and Walmart have done with Hispanic-themed stores designed to attract that fast-growing community.

    • “Another tool is convenience. With most people on tight schedules, fewer shoppers want to go out of their way for food. Stores such as Wal-Mart's Marketside, Safeway's Market, Supervalu’s Urban Fresh, and Tesco's Fresh & Easy are filling in the gaps between their bigger locations with smaller stores and stocking them with ready-made meals, basics, and extras like in-store baby-sitters. The average sale might be smaller, but the repeat business can add up.”

    • And technology is cited – ranging from Walmart’s in-store television network to the slowly growing radio frequency identification (RFID) – as a way for retailers to get a better handle on what people are buying and then communicating with shoppers more effectively about their choices and options.

    KC's View:
    Again, these strategies are not about catering to the lowest common denominator. It is about providing value and, to some extent, reflecting values with which the shopper can identify.

    Published on: June 10, 2009

    Faced with diminishing sales because of the impact of the recession, many restaurant chains are developing products that can be sold in the nation’s supermarkets as a way of bolstering their brand image, according to a story in the Wall Street Journal.

    Examples cited in the piece are Starbucks, which is looking to sell more bagged coffee and Starbucks-branded ice cream in grocery stores; Burger King, which will start selling its Apple Fries (apple slices designed to look like French Fries) in supermarkets this fall; and other chains including Dunkin’ Donuts and California Pizza Kitchen.

    The Journal writes, “Some restaurant chains began developing grocery items prior to the recession as a way to boost brand recognition, but now they are finding that packaged food helps them offset some of the loss in traffic to their restaurants.”

    KC's View:
    And I’m going to ask the question that I’ve posed before about this subject:

    Why the hell would any supermarket chain want to do anything to help a restaurant chain bolster either its image or its bottom line?????

    I understand the whole notion of giving customers what they want. But I also believe that the supermarket industry is engaged in a long-term battle for share-of-stomach with anyone and everyone that sells food. And while supermarkets never will have 100 percent of the pie, I think they need to be a lot more aggressive about not doing anything that adds credibility to the competition.

    This is hardball. There is a legitimate argument that supermarkets should never hype a brand with which it competes. Never. Ever.

    Because the fast food and chain restaurants aren’t going to do anything to bolster a supermarket’s brand equity. Nope, they’re just going to nibble and chomp away at your sales every chance they get.

    The hell with them. Tell Burger King to sell their damned Apple Fries somewhere else. Same goes for Starbucks and Dunkin’ Donuts and California Pizza Kitchen and the whole lot of them.

    Published on: June 10, 2009

    • Lubbock-based United Supermarkets, which does business in north and west Texas under the United, Market Street and Amigos United banners, announced that it is getting into the e-grocery business, offering full online grocery shopping, recipes, interactive circulars, email marketing. United also is becoming a participating retailer in MyWebGrocer’s national Advertising Network, which covers 85 percent of the US, earning clients direct ad revenue. Some of its clients include Peapod, Shoprite, Lowes Food Stores, Big Y, Food Lion and some 90 other grocery chains.
    KC's View:
    Full disclosure…MyWebGrocer is a longtime and valued sponsor of MorningNewsBeat.

    But it didn’t make sense to avoid this story because of the business relationship, since I would have run it even if MyWebGrocer were not a sponsor.

    I love stories like this….it is sort of like in “It’s A Wonderful Life,” when they say that “every time a bell rings an angel gets his wings.” Every time another company makes a bigger investment in the online business, the food industry takes yet another step into the 21st century, becoming ever-more relevant to 21st century consumers who do not remember a world before iPods and

    Published on: June 10, 2009

    Starbucks admitted this week that it accidentally double-billed a million customers at some seven thousand stores over the Memorial Day weekend.

    The customers affected used credit cards at the store, but probably never noticed the mistake since the company fixed it at the end of the weekend when the transactions were settled.

    KC's View:

    Published on: June 10, 2009

    Reuters reports that there is a new version of the Atkins Diet making the rounds … the Eco-Atkins Diet, a vegetarian option that emphasizes plant proteins and reportedly is effective at reducing bad cholesterol and helping people lose weight.

    The study confirming the efficacy of the Eco-Atkins Diet was done by St. Michael's Hospital and the University of Toronto in Ontario, and reported in the Archives of Internal Medicine.

    KC's View:
    I’m sure there’s going to be a book in here somewhere. And probably foods to go with the plan.

    Once again, we quote the great Charles McCord: “The reason there are so many weight loss books on the best-seller list is that the ones that were there last week didn’t work.”

    Published on: June 10, 2009

    • The Denver Business Journal reports that Kroger-owned King Soopers executives and unionized employees “accused each other of not doing anything to move labor negotiations forward Tuesday, less than a week before a vote is set on a new five year contract.” The union held a press conference to denounce what it called significant pension benefits cuts; management said that it had made compromises while the union was unwilling to do so.

    If the vote on the ne contract proposal fails, it is expected that that King Soopers employees will continue working while negotiations continue, at least for the immediate future.

    KC's View:

    Published on: June 10, 2009

    Norman Brinker, the Texas-based entrepreneur and former chairman of Brinker International who took a single Steak & Ale restaurant and turned it into a restaurant empire with banners such as Bennigan’s, and Chili’s, died yesterday at age 78.

    Brinker International also owns Maggiano's Little Italy, Romano's Macaroni Grill and On the Border Mexican Grill & Cantina – a total of 1,700 restaurants in 27 countries.

    In its obituary, the Washington Post writes that Brinker “was known not only for emphasizing friendly customer service, but also for quick calibrations in response to changing customer tastes. Chili's, for example, was one of the first chains to respond to consumer concerns about health and nutrition by offering an array of chicken and fish items, in addition to its steak and burger staples. He also was a mentor to other restaurant entrepreneurs around the country, including the CEOs of Outback Steakhouse, Houston's and the Chuck E Cheese pizza chain.”

    KC's View:

    Published on: June 10, 2009

    Yesterday, MNB reported that the Zagat Fast Food Survey has been published, and respondents say that In-N-Out Burger makes the best hamburger, Starbucks makes the best coffee, and McDonald’s makes the best French fries.

    Panera Bread is said to be the best large chain, Subway the best “mega chain,” Starbucks the best “quick refreshment chain,” and PF Chang the best full service chain.

    McDonald’s is said to be the have the best value of all fast feeders.

    My comment:

    I might quibble with the choice of Panera Bread; I personally think that Chipotle is superior.

    And I’d really challenge the PF Chang recognition, since I think its Chinese food is barely edible. But then again, I have had the unique advantage of a father-in-law who knows all the best Chinese restaurants in New York City, and has taken us there…and trust me, they’re nothing like PF Chang.

    Almost immediately, the emails started coming in…

    MNB user Steve Panza wrote:

    I have to agree with you. PF Chang is as authentic Chinese as Taco Bell is authentic Mexican. Unfortunately where I went to college, Taco Bell was the best Mexican around.

    MNB user Gerry Baccash wrote:

    They’ve got to be kidding with P F Chang! Long waits, mediocre food, exorbitant pricing. Been there once, never again.

    But MNB user Tony Moore wrote:

    Oh you are a snob!

    MNB user Brian Hayes wrote:

    Yeah yeah, we get it. There are far more superior Chinese restaurants in your home town. Same can be said of quite a few towns. But to say that the food at PF Chang is "barely edible" is taking hyperbole to new heights. If the majority of the public shared your view, you wouldn't see so many dang PF Chang restaurants and they wouldn't have fared so well in the Zagat survey. Any business that sells inferior product just flat won't survive, so they gotta be doing something right, eh? C'mon Kevin, give 'em some love. Maybe the rest of the world doesn't have the sophisticated palate that runs in the Coupe gene, but the rest of the world sure has made PF Chang one successful restaurant chain.

    Here's hoping that every business acquaintance you have dinner with for the next year says, "Let's meet at PF Chang"!

    Sorry man, I couldn't resist....

    MNB user Michael F. Parker wrote:

    Since the Zagat survey was evaluating chains, what Chinese chain restaurants does your father-in-law take you to in New York City. I personally would never accuse PF Chang of really being an authentic Chinese restaurant and concur that there are incredible Chinese restaurants in both San Francisco and New York City but I’m unaware of any Chinese chain restaurants other than fast food types.

    I just wish the chains aimed higher, that’s all…as opposed to lowest common denominator Chinese food.

    We had a story the other day about how Price Chopper Supermarkets is suing upstate-New York based Giant Food Markets for $20 million, accusing the 12-store chain of stealing its sales circulars for the purpose of undercutting it on price.

    To which MNB user David Livingston replied with a one-word email:


    I don't want to be accused of being overly harsh here, but this strikes me as a reprehensible response to a serious ethical and legal breach.

    I’m sure that Livingston and plenty of other people will say that this is done all the time, that Price Chopper should learn to steal better and more effectively than its competition. That this is just the real world, and Price Chopper should bet used to it.

    But that, in my view, is a load of crap. (I’d rather use another word, but the spam filters would probably cause endless problems…)

    And to suggest that somehow this is a legitimate way of doing business as usual strikes me as an awful statement of both personal and corporate values.

    Shame on you.

    KC's View: