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: September 15, 2009

    by Michael Sansolo

    Like you, I remember exactly where I was on Sept. 11, 2001. Unlike most of you, I was close enough to experience it first hand and have memories of the Pentagon attack that I’ll never forget.

    It’s hard to put Sept. 15, 2008, in a similar place. It was a day without death and destruction, but in many ways it changed the world we live in just as profoundly. As you might have read or heard over the weekend, today marks the one year anniversary of the collapse of Lehman Bros, which turned out to be the spark that set off a global economic meltdown.

    The statistics from a year ago are stunning. The stock market fell 500 points the day after, but more stunningly fell nearly 5,000 points overall in the following months wiping out $15 trillion in paper wealth. But like most of you, I don’t remember exactly what I was doing when it all happened, nor did I grasp the significance. I have an electronic trail to prove it - my column on Sept. 16, 2008, dealt with the serious lessons of Ohio State’s loss to Southern California as it pertains to competition.

    Luckily, it’s easy to recover in a column and one week later I wrote about a change in value advertising highlighted by new Walmart ads contrasting the cost of eating out vs. cooking at home. For many of you, the recovery has been tougher.

    And that’s why we should not let this anniversary pass by lightly. Sept. 15th, like it or not, changed the world in which we operate. It changed the way people shop, save and view their economic future. It changed the meaning of value and the notion of frugality and, at least for the moment, has changed the shoppers we face very, very profoundly.

    The question is: What have you changed? But don’t dwell on the past; examine the future. Use this strange anniversary as a rallying point to benchmark the world that was and the world that is. Examine trading partner relations, marketing strategies, employee education, cost centers…basically everything you can. This is the time to question everything because that’s exactly what the shopper is doing.

    I wish I was enough of an economist to analyze what the new age of frugality really means, what the stimulus really did (or didn’t do) or where the market, inflation, unemployment are more are likely headed. I’m not and the odds are you aren’t either.

    But there is still so much we can do. There are so many opportunities to examine as we face a shopper who is worried and looking for new answers. This is a time to truly examine our value proposition and make certain we are in synch with the shoppers we have today. It’s a time to fight for meals by helping shoppers see the financial, time and nutrition benefits of products. It’s a time to examine new answers for breakfast, lunch and dinner - the issues are shoppers are really examining - to build sales profits and relations.

    It’s a time to examine the meaning of brands and building on the key points of differentiation.

    The world changed on Sept. 15, 2008. It’s still changing a year later. Make certain you continue to change with it.

    Michael Sansolo can be reached via email at .
    KC's View:

    Published on: September 15, 2009

    The Business Journal of Milwaukee reports that Nash Finch and Roundy’s have settled lawsuits that centered on the acquisition by Nash Finch of two Roundy’s distribution centers in 2008. After the sale of the centers for $225 million, according to the story, “Roundy’s contended that Nash Finch agreed to pay an additional $7.9 million for the centers … through a ‘post-closing purchase adjustment’ agreement reached in April 2007. Since then, however, Nash Finch has repeatedly refused to follow through with the payment, breaching the contract, according to the lawsuit.

    “In response, Nash Finch contended Roundy’s breached the sales contract by ‘overstating the earnings’ of the two centers and ‘overstating rebates’ it received from vendors. The filing sought $18 million in counterclaim damages.”

    The solution reached by the two companies: nobody owes anybody anything, they shake hands and walk away.
    KC's View:
    It’s nice that they’ve both decided to play well with others. Gives one hope.

    Published on: September 15, 2009

    There is a fascinating story in the Los Angeles Times about a company called Heritage Link Brands, started by a former Procter & Gamble executive who after a visit to Soweto, South Africa, came away impressed by the quality of wines produced by “black winemakers struggling to survive, post-apartheid, in an industry dominated by whites and in a market suspicious of new players.”

    The company, started by Selena Cuffe and her husband, Khary Cuffe, is based in Los Angeles and imports wines from “a small stable of South African wines made by indigenous vintners, and each represents a chapter in the story of black empowerment.

    “The Seven Sisters wines, for example, are produced by sisters who, during apartheid, were evicted from their home in a small fishing village on the western coast of South Africa. They returned 22 years later and now produce seven wines, each named for one of the sisters.

    “The Bouwland Cabernet Sauvignon-merlot blend comes from a winery that is owned and run by a group of farmworkers who banded together after apartheid and, with the help of a white winemaker, bought a prime 140-acre vineyard near Stellenbosch.

    “The M'hudi wines come from another Stellenbosch vineyard -- the only black, family owned vineyard in South Africa. Diale Rangaka, a former English professor, and his wife, Malmsey, a clinical psychologist, had long dreamed of owning a farm, but it wasn't possible under apartheid. They bought the property in 2003 and moved there from Soweto.”

    The Times reports that currently, “wines imported by Heritage Link are sold at 835 restaurants, retailers and grocery stores, including Albertsons in Southern California, and are being poured in the business and first-class cabins of United Airlines and, soon, American Airlines.”
    KC's View:
    Beyond the fact that Heritage Link is providing financial opportunities to people who might ordinarily not get it, the broader lesson from the company’s success to the point is its providing of a compelling narrative behind the products it sells. Especially today, when so much information is available to consumers, the ability to tell a simple story, to communicate the sense of values behind the products, is one of the great ways to create a differential advantage.

    Published on: September 15, 2009

    Whole Foods Market announced that it has completed its 776 million-kilowatt-hour purchase of renewable energy credits (RECs) from wind farms.

    According to the announcement, “The RECs are equal to 100 percent of the Company's electricity use in its North American locations, and nearly 90 percent of this year's purchase is helping to fund E.ON Climate & Renewables' (EC&R) recently-completed Texas-based Panther Creek wind farm.”

    "Whole Foods Market is working hard to be a leader in environmental stewardship and to make sure that our investment drives new wind power growth for the country. Buying nearly all of our 2009 renewable energy credits from Panther Creek to help bring new power from the wind farm to the grid is a great example of that," said Lee Matecko, Whole Foods Market global vice president of Construction and Store Development.
    KC's View:
    This is one of the stories that, I have to admit, I don't understand – I don't really get the whole renewable energy credit thing. But, it also is one of those stories where it doesn’t really matter – the narrative is that Whole Foods is doing something smart for itself and the environment, and that’s the kind of positive story that people can relate to even if they don't completely understand it.

    Once again, it is providing a narrative that is important. It is telling a story that will resonate with its shoppers.

    Published on: September 15, 2009

    Toys R Us announced yesterday that it will go into the upcoming end-of-year holiday shopping season by setting up 350 temporary stores and boutiques around the country, about a quarter of them in shopping malls that have a surfeit of empty space because of closures brought on by the recession.

    Company CEO Gerald R. Storch described the move as a “seize the day” strategy, as Toys R Us looks to take advantage of the void left by the shutdown of KB Toys.

    The ones not located in shopping malls will be located inside Babies R Us stores that are not adjacent to toy store units.

    The stores, called ‘Holiday Express,” will be small – nothing larger than 4,000 square feet – and will carry best-selling toys.
    KC's View:
    This strikes me as a smart and highly opportunistic move by Toys R Us … reaching out to shoppers at a time when people are going to be a lot more careful about their money and how they buy presents. They’re hoping that they can take advantage of whatever impulses may be left among US consumers and keep up with Walmart, the nation’s biggest toy retailer, which we all know will leave no stone unturned this holiday season in its search for sales and market share.

    The bigger question is whether this suggests possible opportunities for food and convenience retailers – to use the glut of commercial real estate as an impetus to create new formats that can serve new customers in new and unorthodox locations.

    Published on: September 15, 2009

    The Boston Globe this morning reports on the competition to acquire Super 88, the Boston-based Asian supermarket chain that has been in severe financial distress over the past few years. Three of the company’s stores have been closed, and now “three entrepreneurs are vying for ownership of the remaining three Super 88 stores. Two buyers - a local couple with 30 years in the food industry and a New Jersey businessman with an Asian market in Quincy - have each filed suit in Suffolk Superior Court to protect deals to purchase individual stores. The third potential owner, a jet-setting New Yorker with a successful Asian grocery chain of his own, claims to have bought all three Super 88 markets and has already begun to move in.”
    KC's View:
    It sounds like the founders of Super 88 have handled the sale of the company about as well as they’ve handled the running of the business in recent years. However the legal wrangling turns out, it sounds like whoever gets the company will have an opportunity to capitalize on a healthy market for ethnic foods in the Boston area…as long as they can a) compete with other ethnic chains that have opened in the area, b) rebuild consumer trust in the stores, which may be easier if the banner is changed, and c) not screw it up.

    Published on: September 15, 2009

    The Financial Times reports that Pret A Manger, the British sandwich chain that had trouble breaking in to the US when New Yorkers did not respond well to its line of prepackaged sandwiches, intends to expand its store count in New York and expand into Chicago and Washington, DC. Management seems to believe that it can turn its US position around.

    According to the story, CEO Clive Schlee says that Americans are better educated about the Pret A Manger value proposition, but that the chain “has also changed its product mix, increasing the number of soups it sells and focusing on filter coffee rather than more elaborate drink options for which customers have to queue.”
    KC's View:
    I’ve always been a fan of Pret A Manger…in part because I like the quality of its sandwich selection, and in part because I momentarily feel like I’m in London when I walk in the front door…and that’s always a good feeling. On the other hand, if you’ve never been to one of the company’s London stores, that advantage may be lost on you.

    Published on: September 15, 2009

    • Credit the National Grocers Association (NGA) for landing a big one as opening keynote speaker at its 2010 Annual Convention: former President George W. Bush.

    The convention is slated to take place in Las Vegas, February 9-12.

    • GMDC announced that it has awarded its 2009 Lifetime Achievement Award to Wayne Bryant of American Sales Company, a Division of Ahold USA, at its Health Beauty Wellness Marketing Conference in Orlando, Florida, citing his significant contributions and thought leadership in the general merchandise and health and wellness industries.
    KC's View:

    Published on: September 15, 2009

    • Norman Borlaug, who won the Nobel Peace Prize for bringing agricultural innovation to the developing world and fostering a “green revolution” that helped avert global famine during the second half of the 20th century, died over the weekend at age 95. The cause was complications from cancer.

    Borlaug also was a recipient of the US Congressional Gold Medal.

    • Jody Powell, the former press secretary to Jimmy Carter during both his tenure as governor of Georgia and president of the United States, died yesterday of an apparent heart attack. He was 65.

    • Patrick Swayze, who came to fame as the star of “Dirty Dancing” and ‘Ghost,” died yesterday at age 57 after a two-year battle with pancreatic cancer.
    KC's View:

    Published on: September 15, 2009

    …will return.
    KC's View:

    Published on: September 15, 2009

    In Monday Night Football action…

    Buffalo 24
    New England 25

    San Diego 24
    Oakland 20

    And, in the US Tennis Open Men’s Singles Finals, Juan Martin del Potro of Argentina upset overwhelming favorite Roger Federer to win his first Grand Slam title, 3-6, 7-6, 4-6, 7-6, 6-2.

    This followed the weekend’s victory (which should have been noted here yesterday) by Kim Clijsters, who won the Women’s Singles Final 7-5, 6-3 after a more than two-year layoff, defeating Caroline Wozniacki.
    KC's View: