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    Published on: July 16, 2009

    The New York Times this morning reports that Walmart plans to lay out a plan today that will “encourage” its suppliers to provide information about their products’ social and environmental impact, creating an electronic indexing system that will make a wide variety of sustainability issues accessible to shoppers. The process will begin with the company asking its 100,000 suppliers 15 questions about specific sustainability practices, requesting that the information be sent back by October.

    “We have to change how we make and sell products,” Walmart CEO Mike Duke plans to tell employees and suppliers at a meeting later today, according to remarks obtained by the Times. “We have to make consumption itself smarter and sustainable.”

    The general consensus seems to be that while Walmart hopes that eventually other retailers will adopt the index, at the moment it is pretty much the only retailer that can create and enforce such standards – and even then it will not be easy, since there will be resistance to developing sustainable production and distribution because of cost concerns, and resistance to putting all that information on an index and could be seen as leveling the playing field among manufacturers.

    “The first question is always, ‘It’s going to cost more,’ ” John E. Fleming, Walmart’s chief merchandising officer, tells the Times. “But you know, I think we’ve demonstrated time and time again, if you reduce packaging, if you reduce energy, the costs go down.”

    Walmart will not force suppliers to contribute to the index, but has said that those resisting the call will gradually become less relevant to the chain’s ongoing operations.
    KC's View:
    While on the face of it this would seem to be yet another step in the reinvention of Walmart, make no mistake about it – Walmart sees a long-term advantage in creating this index. The company firmly believes that more sustainable products end up reducing costs, and it believes that taking this approach will broaden its appeal to consumers that sometimes are skeptical about the motivations driving the Bentonville Behemoth.

    What’s going to be interesting is how all these manufacturers answer the 15 questions. I suspect some of them will find out things about their production processes that they weren’t aware of…which, in the end, is part of the point.

    Interestingly, there is a piece in Business Week describing Walmart’s exacting standards when it comes to supplier agreements. These are going to change with the new sustainability index. They are only going to become more so.

    Published on: July 16, 2009

    The Richmond Times-Dispatch this morning reports that Ukrop’s chairman/president/CEO Robert S. Ukrop has sent a memo to employees addressing the rampant speculation that the company is for sale and has circulated a prospectus to possible suitors that include Harris Teeter, Supervalu and Ahold.

    "There has been a lot of speculation in the last few days about the future of Ukrop's," Ukrop wrote. "All of this is based on rumors, anonymous blog postings and industry chatter."

    However, he did not exactly deny the reports.

    “Anything I say at this point will add fuel to the fire," he wrote, adding, “If anything changes with our company's direction, you and our customers will hear it from me…”
    KC's View:
    In the Nixon administration, that used to be called a “non-denial denial.”

    This may not be a done deal, but there certainly are a lot of signs.

    BTW…in yesterday’s story about Ukrop’s possibly being for sale, I neglected to attribute the original source of the report, which was Food World.

    It was, in fact, an oversight...I should have attributed it to Food World but as often is the case, I was working fast and early, and sometimes I screw up ... I do try to attribute my sources on stories that I’m reading from the wires, but mistakes happen. (I actually like to attribute stories because I think MNB is as much about how the industry is being covered as it is about the industry ... and therefore the attribution often is an important factor in the story.) In this case, I actually had gotten a couple of emails mentioning the rumor of the Ukrop’s sale before the story broke in the local papers, and so my fingers got ahead of my brain.

    Again, no excuses, just an explanation.

    Published on: July 16, 2009

    Now available on iTunes…

    To hear Kevin Coupe’s weekly radio commentary, click on the “MNB Radio” icon on the left hand side of the home page, or just go to:

    http://www.morningnewsbeat.com/Radio/Radio_Listen_S.las



    Hi, I’m Kevin Coupe and this is MorningNewsBeat Radio, available on iTunes and brought to you this week by Webstop, experts in the art of retail website design.

    I almost missed it because it was buried inside USA Today, but an industry friend pointed out to me that the Australian community of Bundanoon has taken the some-would-say radical step of banning plastic water bottles from the town.

    There were several reasons for the decision, which was made at a public meeting of the town’s citizens. One, they say it is a moral issue because plastic bottles are bad for the environment. Two, the residents objected to the plans of a bottling firm to extract spring water from within its boundaries, bottle it and then truck it all over Australia – which they say creates way too big a carbon footprint.

    So, they banned ‘em.

    You want water in Bundanoon, you get it from the tap. You want to carry it with you, you have to bring a reusable container.

    Now, I did a little checking, and to be honest, it isn’t likely that Bundanoon’s decision is going to have a lot of repercussions. It is a town in New South Wales with a population of about two thousand people; it often is compared to Brigadoon, the mythical Scottish town from the Lerner & Loewe musical of the same name that appears for only one day every 100 years and then vanishes back into the mist of the Scottish highlands.

    But you know, such small decisions, even in small places, can have a ripple effect.

    Just a few years ago, most Americans probably could not have imagined an environment in which communities would be either banning or taxing the use of plastic grocery bags, in which paying to buy reusable bags would become a small but growing trend.

    But that’s happened. Could plastic water bottles be next?

    Probably not. Then again, it isn’t hard for me to imagine that environmental activists could, perhaps emboldened by the Bundanoon decision, make this their next big cause. I can practically guarantee you that they’d hit a lot of obstacles in their quest, but it also seems certain that they might be able to ignite a fair level of support, especially from young people with a social conscience.

    Such movements can start with a small town of two thousand people somewhere in Australia, but they can grow and gain momentum and suddenly companies manufacturing bottled water are looking around try to figure out what the hell happened, and why their lobbying and marketing dollars didn’t work.

    It seems to me that the smart manufacturers and retailers – all of whom have skin in this game – ought to be thinking now about how such a movement might affect their businesses. They actually ought to be making plans for how to turn such a movement to their advantage, perhaps by being an early adopter of more ethical or environmentally friendly ways of selling water. Maybe a new kind of plastic bottle that is biodegradable? Or some other sort of container that nobody has thought of yet?

    For companies that look to and anticipate possible futures, such movements actually offer opportunity. For companies that prefer to remain moored to the past and present, in denial about what can happen, such movements often are their worst nightmares. And yet, the initiatives are the same…it is the reactions that are different.

    “There are always possibilities,” Mr. Spock likes to say, which is along the same lines as the Jean-Luc Picard line: “Things are impossible until they’re not.”

    And if you don't believe that, consider the fact that 40 years ago today, Apollo 11 was launched on a mission that would take it to the moon, where Neil Armstrong and Buzz Aldrin would walk and plant an American flag in the lunar dust.

    It’s true - anything can happen. It is up to us to make of such innovations what we can, and not to deny the possibilities that can either haunt us or invigorate us.

    Even possibilities that are given life in places like Bundanoon.

    For MorningNewsBeat Radio, I’m Kevin Coupe.
    KC's View:

    Published on: July 16, 2009

    Dale C. Henley has announced his retirement from 33-store Haggen Inc. after 14 years as the company’s president/CEO.

    The Washington State-based company has launched an executive search for Henley’s replacement; he has promised to stay in the job until a successor is found, but no later than June 30, 2010. After stepping down, Henley will become a non-executive chairman of the board of Haggen and continue as president/CEO of Briar Development Co., a Haggen affiliate that develops and owns real estate.

    “While I reach this decision with mixed emotions, I will be 65 in May 2010 and want time to relax and pursue other activities,” Henley said. “I am very excited to begin this new phase of my life. For the last 14 years, it has been a privilege and honor to lead such a fine group of people who have set industry standards in so many areas and accomplished so much for our guests, communities and shareholders.”

    “Dale Henley’s leadership and vision has spurred Haggen’s tremendous growth over the past 25 years,” said Don Haggen, co-chairman of Haggen, Inc. “Others may have been intimidated by the thought of adding stores in an industry dominated by national companies, but Dale proved that a grocer with Northwest roots can not only compete but thrive. While Dale will be deeply missed, he has developed a talented management team that will work with him in ensuring a smooth transition.”
    KC's View:
    Good man. Good company. Wish them both the best.

    Published on: July 16, 2009

    The United Food and Commercial Workers (UFCW) says that its members who are employees of 40 Supervalu-owned Acme stores in the Philadelphia area have voted overwhelmingly to ratify a new contract that runs until 2012.

    The employees previously rejected what Acme said was its last, best offer; the company reserved the right to impose contract terms on the workers, but last-minute negotiations resolved outstanding issues.

    Terms of the new contract were not disclosed.
    KC's View:
    BTW…the Philadelphia Inquirer had an interesting piece this week noting that Acme CEO Judith A. Spires essentially laid down the law to employees: "Our business is under attack by the competition now. If we don't change, our competitors will win. That's not good for you or our business."

    What Spires was referring to was a shrinking market share as the company faces emboldened competition.

    I got a better read on this yesterday when an MNB user sent me an email suggesting that Acme has “been hanging on for years, resting on their laurels (and good physical locations), while steadily milking consumers for higher prices … The prices are outrageous (example- 6 pack of Propel is $5.39 everyday versus $2.99 at Shoprite) and it's just not clear why you would pay more to shop at an Acme versus a Shoprite or Giant. They are terribly undifferentiated and uncompetitive price wise and the market share trend clearly shows what happens when you follow this script.”

    Published on: July 16, 2009

    Winn-Dixie announced yesterday that 51 of its stores in the north Florida and south Georgia areas have been remodeled and upgraded, and are being rebranded with the following slogan: “Fresh Checked Every Day.”

    “We’ve spent the last several years improving our stores, our merchandising and our service,” Winn-Dixie chairman/CEO/president Peter Lynch said in a prepared statement. “Now, Winn-Dixie customers in the Jacksonville area, no matter where they shop, will find a fresh and local shopping experience, with enhanced customer service, every time they visit us.”

    The improvements include a new décor package, improved fresh food departments, and expanded organic and natural product selections.
    KC's View:

    Published on: July 16, 2009

    Whole Foods said yesterday that each of its 273 stores has been individually certified as an organic grocer complying with federal regulations that require the company to audit all of its products to make sure they live up to organic certification standards, make sure that these products are no co-mingled with conventional products in a way that might contaminate them, and train employees in how to handle organic merchandise.

    "This news underscores our unwavering commitment to the overall integrity of organic and offers assurance to our shoppers," says Joe Dickson, quality standards coordinator for Whole Foods Market. "Our stores are an organic product's last step in the journey from farm to shopping cart. It's important for Whole Foods Market to maintain its certification as an organic retailer so our customers can trust that the organic food they choose has been sourced, stored, handled and marketed according to organic requirements."

    According to the company, when the US Department of Agriculture (USDA) first developed organic standards seven years ago, companies were allowed to apply for group certification; now, however, USDA requires that store be individually certified.

    "We believe that our customers benefit from having everyone who handled their organic food certified, not everyone except the retailer," says Dickson. "While some certified retailers may have just a few departments certified, and focus on shrink-wrapped organic produce, we've opted to go all out. In our stores, every department that handles organic food is certified - produce, meat, bulk, cheese, even stores with organic salad bars are certified."
    KC's View:
    In the end, this is Whole Foods’ true differential advantage…and when the recession ends (eventually), it needs to make sure that it is positioned right in its segment.

    Published on: July 16, 2009

    The Dayton Daily News reports about how Dorothy Lane Market is selling fresh fruits and vegetables that have been harvested by people involved in the “TransPlant Project, in which prescreened ex-offenders work for local farmers helping to cultivate and harvest fruit and vegetables destined for the dinner tables of Dayton-area families.”

    According to the story, “The TransPlant Project is the brainchild of Howard Solganik, who has operated restaurants in the Dayton area and consults with grocery chains and eateries .. Solganik plans to expand the project so ex-offenders can cultivate organic fruits and vegetables on vacant lots in urban settings, while learning skills that can help them become productive and self-sufficient. The fruit and vegetables will then be sold through an online “virtual” market to Dayton area restaurants and other institutions that serve meals or at a retail stand located in Montgomery County, Solganik said.”
    KC's View:
    I just love this story. It is about redemption and second chances. Kudos to Howard Solganik and companies like Dorothy Lane for making it happen.

    Published on: July 16, 2009

    The Seattle Times reports that Starbucks is testing yet another new marketing approach as it tries to recapture its mojo - it is renovating its store on Seattle’s Capitol Hill and giving it an entirely new name, 15th Avenue Coffee and Tea.

    That’s right. The Starbucks name will be nowhere to be seen on the façade, or on the products being sold inside.

    There are at least two other Seattle-area stores slated to be renovated with names that reflect their neighborhoods rather than the corporate brand.

    But that won’t be the only change. Starbucks also plans to change the kind of products it sells in the new stores: In the spirit of a traditional coffeehouse, it will serve wine and beer, host live music and poetry readings and sell espresso from a manual machine rather than the automated type found in most Starbucks stores,” the Times writes.
    KC's View:
    I can understand wanting to get more in touch with local neighborhoods and communities, but taking one’s name off the door doesn’t seem to make a lot of sense…especially because everybody is going to know who owns the store anyway.

    I like the idea of expanding into wine and beer and hosting live music…but it seems to me that maybe they need to change the management style a bit, decentralizing and localizing, rather than going incognito. The way they’re doing it has just a hint of desperation…

    Published on: July 16, 2009

    • Tesco’s Fresh & Easy Neighborhood Markets said yesterday that it has opened its 121st store, a unit Pasadena that also is its 65th store in Southern California. In addition, Fresh & Easy has announced plans to open a store in Delano, California on August 19th, and will open three additional stores in California on July 29th: one in Oxnard and two in Santa Barbara County (Lompoc and Orcutt).
    KC's View:

    Published on: July 16, 2009

    • The Denver Business Journal reports that Safeway and Kroger-owned King Soopers and their unionized employees have agreed to extend their contracts until August 15, and will continue negotiations on a new deal to replace the one that expired officially on May 30.

    • The Seattle Times reports that Starbucks is facing a labor organization effort at one of its Quebec stores, as workers there have aligned themselves with the Industrial Workers of the World and filed a request with the government to unionize.

    Advertising Age reports that Reckitt Benckiser is changing its logo to its initials, “RB,” hoping that the simplified brand identity will improve both its image and visibility; the company bemoans the fact that its financial performance often is as good or better than its counterparts, but generates less public awareness.

    • Interesting piece in the Wall Street Journal that USDA prime beef is becoming both more available and less expensive. Part of the reason is that people are eating out less, meaning that steakhouses and other restaurants have less call for the prime beef that many used to specialize in. That leaves more available to sell in supermarkets and other butcher shops, which seem able to sell it when consumers decide to invest in what are called “affordable indulgences.”
    KC's View:

    Published on: July 16, 2009

    Regarding the possible sale of Ukrop’s, one MNB user wrote:

    When I moved to Richmond in the early 90’s the first thing I needed to do was stock my pantry. Not knowing where anything was yet I found myself at this grocery store that I had never heard of with an odd name. The first thing that impressed me when I went in were the freshly made food offerings, even made to order pizza . I loaded up my cart with groceries and when I got to the checkout I realized that I had left my checkbook at home and only had a few dollars in cash with me. I asked if I could leave the items and come back with my checkbook. The store manager came over to the checkout and told me that it was okay, take the groceries and come back with the check next time you are in the store. I was stunned, they had never seen me before and they were going to let me leave with a cart full of groceries trusting that I would be back to pay on my next visit. And you know what, I was back every week for the 7 years that I lived in the Richmond area.

    That’s a rare thing, and increasingly so in the modern environment.

    It is hard to imagine that this kind of culture will endure if Ukrop’s is sold, no matter who or what the buyer may be.

    Of course, the problem is that in this environment, it is tough to survive if you are a small company…and the cold reality is that Ukrop’s has to some extent been abandoned by at least some of the customers to which it extended such courtesies and loyalties.




    MNB reported the other day about how Nestlé, in the wake of the recall of its Nestlé Toll House Refrigerated Cookie Dough because of concerns about E. coli contamination, plans “an education program that will target tween’ and teen girls, to provide more information about why raw refrigerated cookie dough should not be consumed.”

    MNB user Connie Montgomery wrote:

    We can't eat raw cookie dough? What about Cookie Dough Ice Cream by Blue Bell? It's the best ever. It's not just teens that eat raw cookie dough. I have been doing so for as many of my 56 years can remember. I haven't died yet!

    I wish they would quit telling us what we can't eat.......I don't believe any of it!

    I've eaten much worse....like dandelions washed in a rusty red wagon filled with water out of the hose and stuffed in an old Miracle Whip jar that was in the garage after it was emptied of the old nails that were in it. My brother said it was Spinach and I would get strong like Popeye! Didn't work, but I never got sick.

    I believe in the 5-second rule, and many other things we did back in the 60's. LOL


    MNB user Jim Swoboda wrote:

    I can tell you where eating raw cookie dough falls on a 50 year olds risky scale...it doesn’t, much to my wife's dismay 🙂

    MNB user Carolyn Flathers wrote:

    Is Nestle under the impression that teen boys do not eat the cookie dough? Based on my personal observations, I'm pretty sure both teen boys and girls should be targeted for education.

    Another MNB user chimed in:

    I can show you a photo right now my own 15-year-old took of herself and her friends sitting around eating Nestle Tollhouse Refrigerated Cookie dough -- and wasaba peas. Luckily, that is the extent of their experimentation so far.

    So far as you know.




    MNB user Sally Malchow had the following thoughts about Michael Sansolo’s weekly column:

    After reading your article on Learning to Fall, I was reminded that a wise man once told me this is an “S and J” industry. For those of you not familiar with MBTI personality typing, people who have an S preference prefer to take in information using their senses (verses their intuition(N) ) and J’s prefer to come to closure quickly, relating to their external word in an orderly way. People with preferences for N and P are more comfortable taking risks and brainstorming.

    In my experience, the request to stop the brainstorming discussion in favor of being spoon-fed the “sure thing” is not uncommon. It sounds like a man (and an industry) that has spent decades unpacking boxes and lining up cans “just so” on a shelf. The last thing a grocer wants to hear from a speaker or consultant is “it depends” and yet that is the very thing that they need to hear. Our industry lacks vision and innovation because we are inbred with doers who see things in black and white who continue to people just like us. To succeed in today’s competitive and evolving market we need to not only tolerate the gifts of others different from ourselves, but actively seek out people who can engage us in conversations that make us uncomfortable. You know, conversations about soft, intangible things like diversity, team effectiveness, creative problem solving, marketing (not to be confused with merchandising)and strategic planning. When the industry can combine these gifts with the “tell me what to do and I will get it done quickly” mentality, we will truly be a force to be reckoned with!





    On the subject of what I view as the inevitable shift to downloading movies as opposed to renting DVDs, which I believe puts an expiration date on companies in the DVD business, one MNB user wrote:

    Short version is that I agree completely on the inevitability.

    It will be a slow transition. Downloading will replace renting movies much sooner than it will replace buying them. And the timing will depend a lot on how soon remote parts of the country get broadband access. But it's happening. Our household streams Netflix films to the television via the Xbox. Fantastic service.

    Regarding music, there was an interview on the local news today with the owners of a recording studio. Business is sliding steadily not because of the economy (this is North Dakota -- one of only two states with a budget surplus and the lowest unemployment) but because new local bands don't see the point to cutting physical albums. They're just going straight for the MP3s and MySpace. This is a town of 60,000 people and two colleges but there are no dedicated music stores left.

    There's definitely a shift happening.





    Continued discussion of the reusable bag issue, as one MNB user wrote:

    In response to getting consumers across the board to adopt reusable bags, the retailers that sell them need to create more of an environment for their shoppers to use them. They don't make it easy at all. I absolutely love using my canvas bags. At Kroger, I always go through the self-scan lane so I can easily and freely use my bags. Cashiers just don't ask your preference as they used to back in the day, you know "paper or plastic". They automatically just start bagging everything up faster than you can hand over your bags. I'm usually digging mine out from underneath all my goodies. Target sells little trendy red bags but they make it very difficult to use them and my experience is that cashiers often seem irritated because it slows the line. I'm all about canvas bags and will use them no matter what, but retailers need to make some effort to have their checkout lanes far more BYOB Friendly, "Bring Your Own Bag".

    MNB user Tim Heyman wrote:

    Going back to my grandparents’ days, as a young kid shopping with them, as I recall most all supermarkets put their empty boxes up front for customers to use for packing their groceries. Much like Costco or Sam’s Club does. This is at virtually no cost and environmentally safe. Stores eliminated this practice somewhat due to the potential shoplifting it created as will bringing your own bags to the store is going to create this shoplifting problem.



    Finally, we got a number of responses to comments posted yesterday about the All-Star Game:

    It is time to end the silliness of allowing the outcome of the All-Star Game to determine which league will have home team advantage in the World Series. This isn’t just me talking as a National League fan (which anyone who appreciates real baseball would be, since the senior circuit doesn’t have that designated hitter nonsense); I’d say the same thing if the National League dominated the game.

    The All-Star Game isn’t populated by the best players, but by the most popular players. Letting this system have any influence over the championships seems patently unfair.

    Go back to the old rotation system. It was fairer.


    MNB user Dan Jones wrote:

    The team with the best record should be home team for the World Series. The Series is the culmination of the entire season – why don’t we let season performance dictate home-field advantage?

    And as far as the DH goes, watching the shortstop that bats .225 get pitched around so the pitcher that bats .090 can make the final out of the inning is not always great theater. And I know Tony LaRussa thinks the double switch is rocket science, but come on, it is not that hard. It did not seem to kill the NFL when football players stopped playing on both sides of the ball.


    MNB user Joe Lawell wrote:

    I say MLB needs to let the outcome of the Home Run Derby decide who gets home field advantage in the world series! Now that would be more fair…

    I hope you’re kidding.

    Another MNB user wrote:

    No worries, your World Champion Philadelphia Phillies will take care of this minor speed bump.

    The AL securing home field advantage merely allows them to take the title again in front of their fans. Win 1 of the first 2 on the road and then win 3 at home. Case closed.


    My Phillies? Don't think so. I hate the Phillies. Hate ‘em. I’m a Mets fan, hard as they make it for anyone to root for them these days.

    MNB user JJ Bepko wrote:

    It is very true that the Home Field advantage in the World Series should be determined by something more substantial than an exhibition game.

    If the team with the best record gets to host more games in the Series, then teams will compete to the end of the season for this right. When a League earns the edge at the midway point, it has the potential to make many more games unimportant at the end of the regular season.


    I hope MLB makes an adjustment on this issue.

    Hope so, too. Makes sense here. Not that MNB has much juice with MLB.

    MNB user Steven Ritchey wrote:

    I thought it was a pretty good, fairly solid game last night. Except for the one error by Albert Pujols, it was pretty solid defensively, which it should have been.

    Remember, some players were chosen by the fans, some players though were chosen by their peers, other players, Michael Young of the Texas Rangers was one. Some were chosen by the managers on either side, this would include Carlos Pena and Nelson Cruz.

    I have conflicting opinions on the Designated Hitter rule. I can understand why some don’t like it, I can also understand the reason for it. Doesn’t make much difference to me either way. I like both brands of baseball, and no, I don’t think it makes me any less of a fan than any other person. The attitude that says the only real fans are those who don’t like the DH Rule is both arrogant and elitist, you know, kind of like people who are still fighting the battle over wine corks.


    Ouch.

    I think that was a not-so-oblique criticism of the Content Guy.

    I would point out that I’ve never said that the only real fans are those who don't like the designated hitter rule…just that the game played without the DH is a purer form of the game.

    If that makes me arrogant and elitist…c’est la vie.

    And finally, from MNB user Tim Davis:

    Kevin, when I think of what I pay to see a MLB game – especially in NY – I think I should have a say in every single aspect of the game, from who plays in the All Star game to home field advantage in the WS to the batting orders and pitching rotations.

    Fair point.
    KC's View: