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: June 23, 2009

    by Michael Sansolo

    I have never really understood Twitter. I honestly can’t fathom who would care to hear my most banal thoughts spilled out in increments of 140 characters at a time. Now I think I was wrong.

    We all have to consider what is happening in Iran and wonder what this means. Incredible as it may seem, web-based communication vehicles like Twitter, Flickr, Facebook and good-old web sites are fueling a revolution. There’s something extraordinary in the Tweets from Tehran, where the senders are constantly aware that their protests will likely result in a beating, arrest or even death.

    While it’s impossible to imagine any group feeling that disenfranchised in the US, it has to make you consider what kind of power these websites could produce. On the positive side, Twitter and the like could become the ultimate connection to shoppers and associates; on the negative it could be used for organized retail theft, consumer protests and Lord knows what else.

    Scoff for a second at that leap and then remind yourself of what’s happening Tehran. To quote my favorite line from Star Trek, “Things are only impossible until they’re not.”

    As we try to understand the world of 140-character messages, let’s also understand its complexities. Noam Cohen wrote a brilliant piece in last Sunday’s New York Times on six lessons of Twitter from the Iranian barricades. Businesses need to learn from them all.

    The six lessons include the inability of even a totalitarian regime to control discourse. It is a certainty that you will find objectionable material on Twitter or any social networking site, so determine what your policy would be to combat the activity. Obviously, censorship doesn’t work. Likewise, don’t downplay the medium because of the largely silly content in most messages. We now know that things can get much more serious.

    Most importantly, Cohen’s article reminds us that Twitter is imperfect. It can include misleading or deceitful information. (In Iran, the ruling forces have tried to trip up the rebels with such messages and clearly have failed.) Businesses need a pro-active policy on social networking to build community in good times and to combat the wrong-headed messages that are sure to appear in times of trouble. Without the first, you cannot do the second.

    And also heed Cohen’s advice that Twitter can be a power force for criticism and remember that criticism won’t always be targeted at a repressive regime. Sometimes business can feel the heat, granted in much calmer ways.

    There were two clear reminders of this at last week’s CIES World Food Business Summit. (This was the same meeting where out of hundreds of participants only five said they were even infrequent users of Twitter.) First, the discussion of the environment was chilling. Supermarkets, like it or not, play a powerful role on topics like sustainable fishing and can demonstrate leadership by creating and communicating clear rules about the products they will sell. Shoppers can’t possibly demonstrate their concerns at every fishing vessel. Supermarkets are much easier to find.

    Second, you cannot and should not ignore the palpable anger in Marion Nestle’s speech on nutrition and labels that she sees confusing the shopper. Anger fuels protest and as we are seeing, protest spreads easily these days.

    The issues demand our attention and so does the method of communication. Ignore either at your own peril.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .
    KC's View:

    Published on: June 23, 2009

    President Barack Obama yesterday signed federal legislation that places tobacco products firmly under the control of the US Food and Drug Administration (FDA). The new law, according to the New York Times story, allows the FDA “not only to forbid advertising geared toward children but also to lower the amount of nicotine in tobacco products, ban sweetened cigarettes that appeal to young taste buds and prohibit labels like ‘light’ and ‘low tar’.”

    In signing the legislation, President Obama noted that he was one of the young people who started smoking before the age of 18, and acknowledged how difficult it has been to kick the habit.

    Kids today don’t just start smoking for no reason,” he said. “They’re aggressively targeted as customers by the tobacco industry. They’re exposed to a constant and insidious barrage of advertising where they live, where they learn and where they play.”
    KC's View:
    Good. This stuff is designed to addict and eventually kill people. The more the government can do to shine a harsh light on the industry is a good thing.

    Published on: June 23, 2009

    The Wall Street Journal reports this morning that the National Advertising Division (NAD) of the Council of Better Business Bureaus has asked Walmart to stop running TV commercials claiming that shoppers can save $700 a year by shopping at its stores.

    The NAD says that the commercial – which no longer is running – makes an overly broad claim that is not supported in every market. Walmart disagrees, though it said it would take the NAD recommendation into account when crafting future commercials.

    The NAD is a self-regulating body with no authority.

    The complaint against Walmart originally was brought by HE Butt.
    KC's View:
    While I cannot say whether those Walmart commercials were 100 percent accurate, I can say that they were enormously persuasive. They positioned the company in an extremely effective way during a tough economic time…and I’m sure that a slap on the wrist is a small price to pay.

    Published on: June 23, 2009

    DeLuca Corp., which operates two high-end grocery stores in Boston’s Beacon Hill and Back Bay neighborhoods, has filed a class action antitrust lawsuit against Supervalu and C&S Grocers.

    According to the story in the New Hampshire Business Review, C&S is accused of keeping food prices artificially high by conspiring with Supervalu not to compete in New England: “DeLuca’s Market alleges that C&S, the nation’s largest wholesaler with $19 billion in sales, cut a deal in 2003 with Minnesota-based Supervalu Inc. -- the number two wholesaler, with $9 billion in sales.”

    The Business Review writes: “According to the suit, Supervalu, which is mainly based in the Midwest, bought into the New England market in 1994 by acquiring Sweet Life Foods and its warehouse facilities in Portland, Maine, Andover, Mass., and Cranston, R.I. Supervalu aggressively competed on price and achieved sales of roughly $1.5 billion, the suit says.

    “Supervalu raised its prices in the Midwest, but kept them low in New England to gain market share, according to the suit, but all that changed in 2003, shortly after C&S acquired Fleming, another full-line wholesaler with distribution in the Midwest that had filed for bankruptcy. That deal caused the stock of Supervalu to decline 10 percent, according to the lawsuit.

    “In August of that year, C&S and Supervalu made a deal, calling it an asset swap, when it was really a carve-out of their territories, according to the suit … ‘They agreed that Supervalu would exit New England in return for C&S's agreement not to enter the Midwest. Supervalu New England retailers would be transferred to C&S, and C&S' s Midwest retailers (i.e., the retailers previously served by Fleming) would be transferred to Supervalu,’ according to the allegation.”
    KC's View:

    Published on: June 23, 2009

    Brookshire Grocery Co. announced that it has begun using both Facebook and YouTube as marketing tools.

    In the case of the latter, Brookshire has produced a couple of 90-second videos promoting private brand milk and yogurt as being superior in terms of taste and freshness. And, the company says, “The Facebook pages provide an opportunity for BGC to connect with customers quickly and through a medium many use daily.”
    KC's View:
    You gotta go where the customers are … even the customers of the future. Brookshire essentially is doing what Michael Sansolo is talking about in his column, and what we talk about all the time here on MNB. Embrace the future and technologies that enable it.

    Published on: June 23, 2009

    CLEAR, the company begun as a way of creating a system of registered travelers that would make it easier to get through airport security lines, reportedly has gone out of business.

    According to a notice on the company’s website that was delivered to subscribers, parent company Verified Identity Pass was “unable to negotiate an agreement with its senior creditor to continue operations.”

    According to the Wall Street Journal story this morning, CLEAR only managed to attract 165,00 customers, in part because the government’s Transportation Security Administration (TSA) never was comfortable with the notion that even pre-screened travelers who had been put through a security check could be allowed to bypass any of the standard screening procedures; in the end, the 20 US airports with CLEAR lanes really only allowed people to bypass long lines.
    KC's View:
    As one of those 165,000 CLEAR members, I can tell you that in the airports where the system was in place, it was worth every penny. And it strikes me as a real shame that the government not only didn’t get comfortable with CLEAR-like systems, but didn’t embrace the concept and find ways to make it work – especially for the business travelers who are on the road constantly.

    Maybe we can blame the failure on bureaucracy, and maybe on the economy. But ultimately it strikes me as a failure of imagination, a failure to embrace innovation. And that’s a failure that can be found in too many organizations.

    Published on: June 23, 2009

    • Safeway announced that mobile coupons for all of its banners – including Vons, Pavilions, Randalls, Tom Thumb, Dominick's, Genuardi's and Safeway – will now be available on the Cellfire digital grocery coupon network.

    According to the announcement, “Cellfire's strong relationships with leading consumer product manufacturers such as Colgate Palmolive, General Mills, Kimberly-Clark, and Unilever allow consumers to save on dozens of their favorite brands and for Safeway, help increase basket size and frequency to the store. High-value discounts are offered on numerous top products each month with Cellfire issuing new grocery offers every two weeks.”
    KC's View:

    Published on: June 23, 2009

    Eastman Kodak said yesterday that it plans to stop making Kodachrome, the oldest film stock manufactured by the company, which because of the dominance of digital photography has been reduced to less than one percent of the company’s sales.

    Digital now accounts for something like 70 percent of Kodak’s business. While the company says that it will stay in the film business, there currently is just one lab in the US that processes Kodachrome film, and it will do so only through 2010.
    KC's View:
    The real lesson here is that you can't fight progress…and that businesses clinging to old world models do so at the risk of inevitable irrelevance.

    Published on: June 23, 2009

    • The Los Angeles Times reports that “three former Ralphs executives were acquitted Monday of fraud and conspiracy in a scheme to rehire locked-out workers using fake Social Security numbers during the bitter 2003-04 Southern California supermarket strike. The not-guilty verdicts by a federal jury in Los Angeles contrasted with guilty pleas in the case by Ralphs itself and two other former managers.

    “Acquitted Monday were Patrick McGowan, a former Ralphs regional vice president, and Scott Drew and Karen Montoya, who were zone managers at the supermarket company.”

    • Cub Foods and its parent company, SUPERVALU, announced today that Cub has become the first grocer in Minnesota to be awarded LEED (Leadership in Energy and Environmental Design) Gold NC2.2 Certification for one of its stores. The U.S. Green Building Council (USGBC) uses the LEED system to rate the world’s greenest, most energy-efficient and high-performing buildings.

    The Cub store, located in the Phalen neighborhood of St. Paul, is one of just three grocery stores in the nation to successfully achieve LEED Gold Certification.
    KC's View:

    Published on: June 23, 2009

    • Walmart said yesterday that it has promoted L. Mecole "Cole" Brown, a company attorney, to be its new chief diversity officer, succeeding Charlyn Jarrells Porter, who has retired after five years in the job.

    • Kraft Foods has hired W. Anthony Vernon, a former Johnson & Johnson executive, to run its US operations. Crain’s Chicago Business notes that Vernon joins an executive team that CEO Irene Rosenfeld “has reshuffled in her three years as CEO. She has shaken up Kraft’s insular culture by hiring executives from outside the company, such as Michael Clarke, a former Coca-Cola Co. executive heading the European business.”
    KC's View:

    Published on: June 23, 2009

    • Walgreen said that its third quarter profit was off nine percent to $522 million, from $572 million during the same period a year ago. Revenue grew eight percent to $16.21 billion from $15.02 billion, on same-store sales that were up 2.8 percent.
    KC's View:

    Published on: June 23, 2009

    NBC News is reporting that Ed McMahon, the longtime sidekick to Johnny Carson on the old “Tonight Show,” died early this morning at age 86 after a long illness.

    Not only was McMahon a stalwart presence at Carson’s side for 30 years on “Tonight,” and before that on the game show, ‘Who Do You Trust?”, but he also was the consummate salesman – doing countless live commercials for a wide variety of products.
    KC's View:
    Carson died in 2005, and somewhere, I’m guessing, he’s welcoming McMahon…glad that he’ll be there to laugh even at the jokes that don't work.

    Published on: June 23, 2009

    MNB reported yesterday that Reader’s Digest, a mainstay for decades on supermarket front end magazine racks, is facing difficulties in the print media business by reducing its frequency to 10 times a year from 12, and reducing its rate base from eight million to 5.5 million over an 18-month period. The company says it will compensate for the moves by rolling out a global web platform.

    My comment:

    If there’s one magazine that probably needs a print edition, it is Reader’s Digest - the demographic of its readership has to be somewhere north of 85. (Okay, that was a joke and a bit of an exaggeration. But I have to be honest – I don't know anyone younger than my father who reads it.) The larger issue, it seems to me, is how a magazine like Reader’s Digest remains relevant for a new generation of readers.

    Not everyone agreed.

    One MNB user wrote (about this and other issues):

    As far as Readers Digest, why don't you check on all of the military people that enjoy reading this magazine? How many subscriptions are being sent to military people? How do they enjoy the magazine? They are not 85+ years old....My wife and I are not there yet (about your age) and we enjoy the magazine and we pass it on to others when we are finished with it...

    And about your stand on plastic and paper garbage bags: I am getting tired of hearing your opinion. Our county (Spokane County, Washington) has a Waste to Energy plant that burns all garbage and creates electricity. So in our county, it does not matter which bag we pick. We do recycle plastic bags, there are recycle bins all over the county, they are used to create new bags. If every location could do what Spokane County does, there would not be an issue with the reusable bags.

    As far as reusable bags, the reusable bags do are not big enough to hold enough to be practical, and I need 4 of them to carry what 1 paper bag or 2 plastic bags will carry. And I have to wash them constantly to keep them clean. What a waste of water...

    Why don't you investigate other options that are available and are being done before you ride your high horse into the sunset??


    Well, first of all, I ride a high horse for a living. Think of me as Paladin, except that I travel with a laptop, not a gun. (Only people of a certain age will get the Richard Boone reference.)

    As for Reader’s Digest, I’m not suggesting that it should go away tomorrow. Just that the world is changing and I think that it is close to becoming an anachronism. And I’d be curious how many military personnel read the magazines as opposed to, say, getting information via the Internet.

    And do follow your same digression, the reusable bags that I use – made, by the way, by EcoBags, which continues to be a valued MNB sponsor – are plenty big. I would maintain that the pressure created by the reusable bag movement has forced greater recycling efforts. And, I’d suggest that the water used to wash the bags is less harmful to the environment that when this stuff gets tossed into landfills.

    MNB user Michael Freese wrote:

    In case you aren't aware, Reader's Digest is the owner of the entire "Taste of Home" magazine group. This group probably does more to promote purchases of food products from grocery stores than any other magazine group.

    Talk about something that works with the entire premise of cook and eat at home.....this is it.

    And by the way....I am 57 and still read every issue of Reader's Digest.


    Fine. But I still maintain that the magazine’s central premise is dated and doomed.

    MNB user Shari Reed wrote:

    Interesting that this would appear in today's MNB. On Saturday we received our renewal notice for RD and was asked by my spouse if I'd like to renew. (We got the original subscription as a gift from my parents btw.) My answer: No. We just don't read it and many of the other magazines we subscribe to! (Almost all of our information is gotten off the web these days so a lot of times the information is old when the magazine arrives.)

    FYI- I'm in my mid 40's.

    On a positive note: Am sure there are still many people who subscribe to
    these kinds of things to have bathroom reading. 🙂


    Good point. I’m just not sure that’s enough of a business model.




    MNB took note of a Pittsburgh Post-Gazette report that HJ Heinz has launched an advertising broadside against competitors in the vinegar business, especially private label vinegars, by implying in a series of ads that other vinegars include petroleum in their ingredient list. The company says it is trying to differentiate itself with a branded message in a category that largely has become commoditized.

    "On the vinegar front, the campaign is intended to reinforce Heinz's commitment to always use only corn and apples to make its Distilled White and Apple Cider Vinegar, as we have for more than 100 years," says Heinz spokeswoman Tracey Parsons. "We know that current FDA regulations allow vinegar to be made from petroleum and don't require manufacturers to disclose this on the label."

    Experts tells the Post-Gazette that the issue is something of a red herring – that the real enemy is private brands, and that there are few if any vinegars that actually use petroleum.

    My comment: I have to admit that this seems like a specious campaign to me, and I’m not sure it does anyone any good. It is sort of like the CPG version of all those political ads we’ve all grown to hate – charges without documentation that look to divert rather than focus attention. It may not be technically wrong, but is it right?

    Heinz, it seems to me, should be a little careful. It is attacking not just competing brands, but the retailers who support those private brands. The war could get messy.


    I got roundly criticized for this comment.

    MNB user Philip Herr wrote:

    Surprised that you would take a marketer to task when fighting back. After all, when Burd has stated categorically that Safeway is targeting (not merely competing) national manufacturers, why shouldn't they fight back? (Not entirely sure about the veracity of the claim, but there is obviously sufficient evidence to support it at some levels).

    MNB user Sabrina Marll wrote:

    Doesn't do anyone any good?! How about the fact that Heinz is doing consumers a HUGE service in raising awareness about the fact that they are ingesting petroleum products? (Yes - petroleum - as in derived from crude oil.) Knowing MNB has been a big supporter of disclosure on labels to allow the shopper to make an informed decision, I would have expected you to shine the light on the article from your usual what's-best-for-the-buyer POV! Kudos to Heinz for finding a way to both a) build their brand equity, and b) do what's right for their consumers.

    I love MNB - not just for the one-stop-shop to let me what's going on, but for how it regularly brings out the "feisty" in me about things that matter!

    Thanks for what you do!!


    All good points.

    I think my reaction was more to the fact that there were allegations being made without any specificity…that struck me as being a mistake.

    But your point about clarity in labeling is well taken.
    KC's View:

    Published on: June 23, 2009

    One of the features of the recent CIES World Food Business Summit was a series of video segments, sponsored by JohnsonDiversey and produced by MNB “Content Guy” Kevin Coupe, that gave the global delegates a taste of some of the various food retailing experiences available to US shoppers, with a theme of “ingredients for success.”

    There is a limited supply of videos available exclusively to the MNB community…and so if you’d like one, email Kevin Coupe at: kc@morningnewsbeat.com , make sure you put the word “Video” in the subject line and include your name, title, company and street address … and he will pass it along to JohnsonDiversey so they can send you a copy while supplies last
    KC's View: