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    Published on: September 21, 2009

    Ukrop’s Super Markets announced last Friday that it will shutter its Roanoke, Virginia, store by the end of next month, with the closure representing a failed attempt on the part of the company to extend beyond its Richmond roots. The announcement also comes as rumors continue to circulate about the entire chain being on the Markey, and some reports that morale at the company has taken a major hit after months of speculation about the company’s future.

    Referring to the Roanoke store closure, company president/CEO Robert S. Ukrop said in a prepared statement, “We wished it had worked out differently. It’s painful for many reasons.” The store is said by analysts to have suffered from a less than optimal location, tough competition from Kroger, and the realities of an economic recession.

    This is the second store closed this year by Ukrop’s, the other one having been in Williamsburg. The company will still have two remaining store outside its home market – another one in Williamsburg, and one in Fredericksburg.
    KC's View:
    The folks at Ukrop’s aren’t saying whether this sale has anything to do with an impending sale of the company, but then again that’s not a real surprise since they haven't been saying much about anything lately. What we do know is that there are more than a few people in the organization who are waiting for the next shoe to drop, and that a sale of an unprofitable store certainly doesn’t preclude the possibility that the rest of the company might get sold.

    Published on: September 21, 2009

    The Los Angeles Times this morning reports that a number of supermarket chains are moving away from the long-held industry tradition of accepting personal checks for payment. Two examples: “Whole Foods Market Inc. is considering banning the use of personal checks at its stores and this month stopped accepting checks at two stores in Los Angeles County and one in Arizona as a test. Fresh & Easy Neighborhood Market, the California division of British retailing giant Tesco, won't take personal checks at any of the 70 stores it operates in California. ”

    The story continues, “Vons, Albertsons and Ralphs -- the stores most likely to have a bank branch within their locations -- continue to accept checks. They also cash payroll checks, although the chains typically charge a service fee of about $1 to about 1% of the check, depending on the municipal regulations of the city where the store is located. Representatives of the chains said there were no plans to end the services, and one supermarket industry executive questioned why, in an environment of increasing competition for shoppers, a company would add a barrier to potential sales. ”

    The answer seems to be that some chains feel that not accepting checks means that checkout lines will move faster, and that it also cuts down on costs in a way that can allow them to keep prices lower.

    But not everybody is convinced, as one shopper who likes to write checks tells the Times, “If I was a shareholder I would say yeah. But I'm not a shareholder, I'm a shopper."
    KC's View:
    This last statement strikes me as incredibly important – and suggests that in some cases, it at least can be argued that the chains are acting in their own best interests rather than the customers’.

    Interesting, isn’t it, that on Friday we had a piece about a New York restaurant not taking cash anymore. Today it is supermarkets not taking checks. Get the sense that something is changing?

    In some ways, it occurs to me that this debate is much ado about a subject that may not matter in just a few years. Y’think the ability to write checks in the supermarket matters much to anyone under the age of 30? I suspect not…that these people use debit and credit cards, and would be amused by all the debate about a subject practically irrelevant to them.

    We spend a lot of time in the retail business doing that. Way too much time.

    Published on: September 21, 2009

    The San Jose Mercury News reports on the official ban on plastic bags that went into effect last week in Palo Alto, California – and that “customers scarcely noticed them missing.” The city’s seven supermarkets made the switch to reusable and paper bags in advance of the official ban, which the Mercury News writes “is part of a broader city plan to reduce litter and landfill waste. The new ordinance does not prohibit plastic bags used for meat and produce. Some groceries fought the bag ban when it was proposed, saying it unfairly targeted them and would give other businesses a competitive advantage.

    “An industry-funded group sued the city, arguing the ban would hurt the environment by resulting in more paper bag use. The city settled the lawsuit out of court in July, leaving the ban intact but agreeing to conduct a full environmental study before expanding it to include other types of businesses.”

    The general success in Palo Alto, the paper writes, may lead to similar legislation in a near by but larger city: “The San Jose City Council on Tuesday will vote on whether to go forward with a proposal to ban plastic bags and most paper ones starting in 2011. Such a ban would make the city the nation's largest to have outlawed plastic bags. In the meantime, city staff will have to complete an environmental impact review and finish drafting the ordinance. That may take until December or early next year, after which the ban would be sent to the council for a final vote.”
    KC's View:
    Properly and consistently explained, by retailers who seem engaged by the process than resistant to it, there’s no reason that a ban on plastic bags can't work.

    It is sort of like the Borg…resistance is futile. So you might as well turn it into something positive for the consumer, positive for the company, positive for the environment.

    Published on: September 21, 2009

    There were a couple of stories about Amazon.com that were reported over the weekend…

    • The New York Times reported that 15 years after Jeff Bezos launched Amazon.com as an online bookstore, “Amazon is set to cross a significant threshold. Sometime later this year, if current trends continue, worldwide sales of media products - the books, movies and music that Amazon started with - will be surpassed for the first time by sales of other merchandise on the site. (That transition already occurred this year in its North American business.)

    “In other words, in an increasingly digital age, Amazon is quickly becoming the world’s general store. Alongside the books and CDs and DVDs are diapers, Legos and power drills, not to mention replacement car clutches and more arcane items like the Jackalope Buck taxidermy mount ($69.97).”

    And, the Times writes, “Amazon has been gobbling e-commerce market share since 2006, taking away customers from eBay in particular. But its advances are shaking up the entire retail world. Giants like Wal-Mart are warily replicating elements of its strategy, while small independent retailers in sporting goods and jewelry now worry their fate will be similar to that of small bookstores and independent video rental shops (remember those?).

    “Amazon’s expansion strategy has allowed it, almost alone among retailers, to thrive during the recession, even while its own media business has stagnated.”

    The piece notes that Amazon’s near ubiquity in so many categories has the effect in many cases of depressing prices in many of the venues that compete with it, which has put the onus on both brands and stores to find new ways to do battle. In some cases, brands (such as Nike) refuse to sell their products through Amazon; in others, retailers are having offer products and services that the online retailer cannot compete with.

    But perhaps the headline on the Times piece puts the question most succinctly:

    “Can Amazon Be Wal-Mart Of The Web?”

    • Amazon announced that it is creating a new entity called AmazonBasics, described as a “private-label collection of consumer electronic ‘basics’ created for customers who want exceptional value. The AmazonBasics line currently includes audio video cables and blank DVD media, with additional accessories and other items to be added in the coming months … All AmazonBasics products ship in Amazon.com’s Frustration-Free Packaging, which is easy-to-open and made from recyclable cardboard, alleviating plastic clamshells, wire ties and excessive packaging.”

    Paul Ryder, Amazon’s vice president of Consumer Electronics, says that the company “saw an opportunity to create a line of consumer electronics basics that combine quality and low prices for an overall focus on value.”
    KC's View:
    The Amazon-Walmart question is an interesting one, especially since Walmart recently announced it will start allowing outside retailers to sell on its website, and Sears made the same announcement over the weekend. (Of course, Walmart has a big advantage over Sears because people actually go to its site…) And Amazon certainly is strengthening its battlements, with expansion of its private label as well as its recent acquisition of Zappos.com.

    There are a lot of parallels between what Walmart and Amazon are doing…and it strikes me that if there is a major league heavyweight retail battle coming, it will be between these two behemoths.

    Published on: September 21, 2009

    The Los Angeles Times reports that Dannon Co. has settled a false advertising lawsuit, creating a “a $35-million fund to reimburse those who bought Dannon's Activia and DanActive yogurts. The class-action lawsuit, filed in January 2008, alleged that Dannon lied when marketing its Activia and DanActive yogurts by promising health benefits that the yogurt didn't really deliver.”

    According to the story, “Dannon denied the lawsuit's claims and admitted to no wrongdoing as a part of the settlement,” but said that it was settling because the lawsuit was a distraction.” However, the company also is changing the product labels, replacing the phrase saying that the yogurt has “a positive effect on your digestive tract’s immune system” with one saying that yogurt will “interact with your digestive tract’s immune system.”
    KC's View:
    If you haven’t seen the “Saturday Night Live” skit that makes fun of the Jamie Lee Curtis commercials for Activia, you should go online and check it out – it is laugh-out-loud funny.

    Published on: September 21, 2009

    A piece from Smart Money looks at the downside of membership warehouse clubs, among them:

    Time is money. “For the annual membership price of $35 to $100, discount hunters can spend their weekends stocking up on 36-roll packages of toilet paper and nuclear-canister-size boxes of detergent. Too bad they also spend plenty of time doing anything but shopping,” with checkout lines often lasting 15 minutes or longer because not all registers are open.

    In addition, Smart Money writes, things don't necessarily get more convenient after the checkout experience: “As club members have long known, it can often be a hassle just leaving a warehouse store. You'll wait for one of the club's employees to inspect your receipt, a procedure that will usually add several minutes to your outing.”

    Credit crunch. “Since Sam's Club honors only the Discover card, Mastercard, and debit cards, many shoppers decide to get a Sam's Club personal credit card. But before you sign up, beware: The standard card comes with a 23.15 percent APR, which is about nine percentage points higher than the current average for variable credit cards, according to Bankrate.com.”

    Vanishing variety. “Warehouse membership may have its privileges, but it doesn't provide much variety. The most mammoth clubs carry only 4,000 to 7,000 different products, one tenth of what your average supermarket stocks.”

    Gray matters. Smart Money reports that US club stores “are often big buyers of gray-market products, either because the goods are priced cheaply or because the manufacturer will not sell directly to the store.” This means that the merchandise was supposed to be sold only outside the US, which means that warranties are not effective in the US” – something often not told to consumers until after they have a problem.
    KC's View:
    Most of this stuff I knew about, but as a regular Costco shopper, I have to say that the primary reason that I shop there is because I can buy stuff in sufficient bulk to avoid other trips to various stores. The time spent in the checkout line or waiting to get to the parking lot is small potatoes compared to the other time saved.

    Published on: September 21, 2009

    A fascinating piece in the Wall Street Journal reports that “manufacturers and retailers across the globe are working to measure their products' carbon footprints for a variety of reasons, and all of the efforts have one thing in common: The results have the appearance of precision.

    “But all the decimal points in the world can't hide the fact that measuring carbon footprints is inexact. It is clouded by varying methodologies and definitions -- not to mention guesses … Few products demonstrate the messiness of this effort more than a simple carton of milk. Several studies in various countries have already sought to tally the impact of milk from its production on a farm to the disposal of its carton. In between, the studies try to measure such intricacies as the energy used to make the fertilizer to grow feed for the cows, to fuel trucks delivering the milk, and to power refrigerators cooling it in kitchens.”

    Both Walmart and Tesco are among the companies trying to establish the carbon footprint for a quart of milk, and the story makes clear precisely how much subjectivity is involved. But they also are faced with another problem – once they have come up with a legitimate (or at least, defensible) number, how do they communicate that information to customers in an unambiguous and actionable fashion?
    KC's View:
    And, there’s another question – how does the industry make such a measurement a legitimate melding of both scientific information and marketing priorities? Because it strikes me as utterly fair that these numbers have marketing applicability, but they also have to have scientific viability.

    I may be an easy mark on such issues, but I actually give companies a lot of credit for trying to figure this out…and will forgive them missteps as the science advances and we learn more about these problems. But understanding carbon footprints does seem to be a priority…and learning how to apply that understanding is the critical next step.

    It also seems to me that if Walmart and Tesco are going to set the tone in this debate, other retailers need to engage to the same level, to the degree that it is possible. I think that thought leadership is vital, especially to the next generation of environmentally minded consumers.

    Published on: September 21, 2009

    • The Boston Globe reports on what is characterized as the nation’s longest ongoing fight about the building of a Walmart – in St. Albans, Vermont, where the battle actually started beck in 1993.

    According to the Globe, “The duration reflects the high stakes: Should Wal-Mart win the right to build in St. Albans, opponents fear the retailer would be poised to proliferate in rural corners of a state that has resisted its overtures. Vermont has the fewest Wal-Marts in the nation, with four stores, compared with 46 in Massachusetts, 27 in New Hampshire and 22 in Maine.”

    The battle is being fought over long-held philosophies. Walmart says that local residents need both the inexpensive products it offers and the jobs it can provide, and some residents agree, while opponents fear the long-term economic impact of Walmart on local businesses.
    KC's View:

    Published on: September 21, 2009

    • The Arizona Daily Star reports that unionized employees at Safeway and Fry’s Food Stores in Arizona are scheduled to vote tonight and tomorrow on whether to authorize a strike against the two chains.

    The paper notes that the current contract extension runs out on October 3, but that a positive vote does not necessarily mean that strike will occur since negotiations are scheduled to resume on Thursday.
    KC's View:

    Published on: September 21, 2009

    • Mike McEvoy, the highly regarded founding manager of Washington State’s Organic Food program has been tapped to be director of the National Organic Program, leading the federal program that develops the rules for organic agriculture enforced by certification agencies around the country.

    • Michael White, vice chairman/CEO of PepsiCo International since 2003, announced over the weekend that he plans to retire.

    White, 57, will be succeeded by Zein Abdalla, who will run PepsiCo Europe, and Saad Abdul-Latif, who will become chief executive of PepsiCo Asia, Middle East and Africa, the company said in a prepared statement.
    KC's View:

    Published on: September 21, 2009

    Got the following email from Jill Hollingsworth of the Food Marketing Institute:

    Thank you for mentioning that supermarkets are ready to help vaccinate our customers. However, state health departments will decide what organizations will receive vaccine. Each state is responsible for developing their own distribution plan - already more than 90,000 sites have been identified. And today during the CDC conference call, the work of the retail industry to help distribute vaccinations was recognized.

    Also, for clarification, like the common flu, H1N1 flu is a respiratory disease — not a foodborne illness. You cannot get H1N1 flu from handling or eating food. It is important for retailers and all businesses to have a plan to deal with the upcoming flu season.

    More information and free downloads and brochures about H1N1 and seasonal flu are available at www.fmi.org.


    Thanks. It certainly was not my intention to imply that H1N1 is a foodborne disease. I’m glad you clarified in case I left room for misunderstanding.




    On the subject of proposed taxes on sugary soft drinks, one MNB user wrote:

    First, I don’t drink them, ever.

    But my reaction is (I know this can’t be printed): BULL****!

    OUTRAGEOUS. Attempting to control behavior through taxation is downright wrong. It is simply an effort to shore up depleting coffers, and taxing people’s emotional habits is an evil way to do it.

    And, drinking sugary pops is an emotional habit. If we ever really ingested food that the body needed for health, based on nutrition, and chemistry alone, we’d never drink soft drinks, eat ice cream, or other nutritionally deficient substances that are sold as “food”.

    Many things on the market are devoid of nutrition. I don’t expect my outrage is going to make a dent in that…..but I make my own choices, and speak what I know is true in this arena, wherever there is an opening.


    MNB user Simon Ginsberg wrote:

    Do these folks really believe that 1 cent or even 5 cents is going to deter anyone from drinking soda???? Especially energy drinks at 2.00 each….it won't make a difference . Then it will be chocolates etc. What about chocolate milk loaded with HFCS? And then you can also become diabetic from drinking too much natural juices….so should that be taxed also? How about a fast food tax……? They can call it the McTax!

    HIGH Tobacco taxes in the US and Canada deterred many smokers not pennies. But what also made a difference with tobacco is society acceptance and outright banning in public places and better education and less TV and film showcasing and advertising. So will Coke and Pepsi ads be banned as well?

    If this is passed it will definitely draw in other groups who see this and other forms of "health tax" as a cash cow……more hidden taxes!!!

    What will make a difference is getting those drinks out of all the school systems to start and getting parents to finally bring proper eating habits into the home.


    Another MNB user wrote:

    A penny an ounce tax on sugary soft drinks may not sound like much but if you do the math it represents $1.50 tax on a 12 pack of soda that retails anywhere from $2 to $4.

    MNB user Richard Thorpe wrote:

    Kevin – your statement below is totally inconsistent with you stand on cigarettes. Smokers don’t want to help themselves either until they are diagnosed with cancer. You need to be more consistent here as those supporting a sugar tax are on the same line as you are with tobacco just in a different place on the line. Maybe we could replace the income tax with “sin taxes” just like NEVADA.

    I disagree. The difference is that sugary soft drinks have not been specifically engineered to addict and kill people.

    Another MNB user wrote:

    The other issue I see, is how much will it actually discourage people from drinking the targeted drinks? I am not sure that taxing cigarettes or alcohol curbed those consuming the targeted products from buying them. I suspect on some level they simply changed spending habits to account for the tax, leaving out something healthy for the offending product. Some of my acquaintances who smoke and drink are barely able to buy groceries but can still smoke a cigarette or have a drink. I guess it would depend on the purpose of the tax. Is it supposed to simply generate income or curb behavior?

    MNB user Matt Zimmerman wrote:

    Do they not realize that the soft drink makers will make more diet drinks, which will reduce the opportunity to generate an income from sugar drinks. The government will then tax all carbonated drinks and anything else. Maybe they need a lesson in basic economics.

    And another MNB user wrote:

    Social engineering in this country has gone too far. Self-appointed decision-makers, educated in "progressive" colleges that teach them that they have a moral duty to bend society to the social engineering vision, tell us where to live, how to live, where to work, what to eat, how to raise our children, and how high to set our thermostats.

    The Age of Advice was fine so long as it stayed advice. But every preachy program of failed, so now, the social engineers – called Central Planners in Communist countries -- are converting their bright ideas into law. "Smart growth" demands that we cram together in clustered housing because social engineers don't like front lawns ("sprawl"). Planners reduce minimum parking requirements so shoppers are forced to ride bikes. Cities like Portland spend hundreds of millions on trains that nobody rides, and drive housing prices so high that whole populations move elsewhere. Social engineers have decided that parents aren't doing a good enough job keeping their kids away from fructose, so the answer is to force obedience. The obesity "epidemic" has more to do with cultural disapproval than health – the numbers thrown around are utter nonsense, simply plucked out of the air -- and the reality is that the soda tax, like the tobacco tax and all other "sin" taxes, is an effort to raise funding for wildly expensive programs by punishing those who act contrary to the dictates of social engineers. Compassionate fascism is the new American style.


    I’m not sure that “facism” is a fair characterization. And your list of complaints assumes that obesity isn’t really a health and economic problem and that the environment hasn’t been abused through years of neglect. None of which I think is accurate.
    KC's View:

    Published on: September 21, 2009

    In Week Two of the National Football League…

    Carolina 20
    Atlanta 28

    Cincinnati 31
    Green Bay 24

    Oakland 13
    Kansas City 10

    New Orleans 48
    Philadelphia 22

    St. Louis 7
    Washington 9

    Tampa Bay 20
    Buffalo 33

    Cleveland 6
    Denver 27

    Minnesota 27
    Detroit 13

    Arizona 31
    Jacksonville 17

    New England 9
    NY Jets 16

    Houston 34
    Tennessee 31

    Seattle 10
    San Francisco 23

    Pittsburgh 14
    Chicago 17

    Baltimore 31
    San Diego 2

    NY Giants 33
    Dallas 31
    KC's View: