retail news in context, analysis with attitude

Published on: October 1, 2009

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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.

There was a fascinating piece on Fast Company.com the other day, looking at something called the Radical Innovation in Hospitality Awards, which recognize thought leadership in the hotel business. The ideas don't have to be working or even, apparently, functional – what they have to do is demonstrate the recognition of a need or opportunity and an innovative approach to addressing them.

For example, one of the four finalists was something called the Cliff Hanger, which is described as a “temporary, modular concept that can be strapped to any dramatic, vertical site, from the walls of the Grand Canyon to the Golden Gate Bridge, giving guests inside a feeling of being completely immersed in an environment. Using vertical, structural tress suspended with tension rods, the hotel can be easily secured and removed, reducing the hotel's ecological footprint on the site itself and removing all traces of the hotel and human impact as one leaves. A stack of individual guest rooms one on top of each other maximizes the drama of the surrounding environment and leaves a guest to enjoy the panoramic views without the bustle usually found around these popular tourist sites.”

Another finalist was the Bucket List, which Fast Company says “uses a combination of eco-friendly design, modular accommodations, and mobility solutions to bring these extraordinary must-see locations to the Baby Boomer generation and their extended families.” The beauty of this concept is that it can be located anywhere from Africa to Alaska, and addresses the specific desire of people my age – much as I hate to admit it – to fulfill certain dreams before we kick the bucket.

Yet another finalist was something called the Zephyr, described as an innovative use of existing slow-speed railroad tracks around the country to create a train experience closer to a luxury cruise line: Fast Company writes: “More amenities like larger guest rooms, entertainment and fine dining will be brought onboard, turning the excursion into an experience in and of itself. Travelers will go from destination to destination in the evenings and park at stations during the day for excursions into cities across the country.

And finally, there was the winner…which happens to exist. The Pixel Hotel, in Linz, Austria, “offers decentralized accommodations in different venues which are sprinkled all over the city. A network of uniquely-designed rooms, each with their own personality, give visitors the feeling of staying in a private apartment, and offer more privacy than the standard hotel. The Pixel's rooms are also prime examples of adaptive reuse, carving out hotel space in previously vacant spaces like factories … Mobile receptionists and cleaners who travel between the spaces are contracted on demand, and a guest 24/7 emergency phone number is provided in case urgent assistance is required.”

At some level, all of these sound pretty cool, and I can imagine myself trying any of them, given the opportunity.

But the bigger message here is the notion of innovative thinking – of not thinking about the hospitality business in the same old way, with the same old offerings and the same old rules.

Even in these economic tough times, it will be the people and companies that think in broad and strategic terms – identifying new needs and opportunities, looking for the niche that does not yet exist, trying to find the angle not yet tried, looking for a unique marriage of design and function – that ultimately will be the winners. Or at least the survivors. The rest, I fear, will be victims or at least victims-in-waiting, as they remain shackled to old concepts, old ways of doing business, old perceptions of the customer base.

In 2009 and beyond, the ability to embrace change and foster innovation is a necessary component of leadership, and what separates business and thought leaders from mere managers.

For MorningNewsBeat Radio, I’m Kevin Coupe.

Published on: October 1, 2009

RichmondBizSense.com has a story this morning that updates the speculation about a possible sale of Ukrop’s, which has been rumored for several months. Among the fresh reporting:

• While the Ukrop family has been shopping the company around, it so far has been unable to get the price it wants, in part because of the recession and in part because at least one potential bidder, Harris Teeter, did not want to buy all of its stores.

• It is said that Ukrop’s recent decision to close its Roanoke store, as well as one of two Williamsburg stores late last year, could help with a sale by eliminating unprofitable locations.

• One other rumored suitor is said to be North Carolina-based Lowes Foods, though RichmondBizSense.com was unable to confirm that information.

• It is said that the Ukrop family wants to make a condition of the sale that any buyer would not be able to open on Sunday or sell alcohol if they keep the Ukrop’s name on the stores.

Published on: October 1, 2009

New research from Colloquy says that 32.3 percent of US consumers “consider their participation in retail rewards programs to be ‘more important’ as they seek to stretch their household budgets in the recessionary economy.” In specific demographic groups, the enthusiasm for retail reward programs was even higher, with 46.4 percent of young adults between the ages of 18 and 25, and 44.4 percent of young women between 25 and 49 giving such programs high marks.

This finding reveals that loyalty marketers have a once-in-a-lifetime opportunity to demonstrate program value to the next generation of U.S. consumers," says Editorial Colloquy Director Rick Ferguson.

And, the study says, “Women, at 73.6%, reported by far the highest level of Retail rewards program participation. That significantly outpaced the next closest segment, Affluent, at 63.5%. The comparable number for the General Population was 59%.”

Published on: October 1, 2009

Winn-Dixie said yesterday that it is introducing “a new line of high-quality reusable bags … that make it easy for customers to go green fashionably. The eco-friendly bags, made from 95 percent recycled material, come in four trendy designs featuring fresh, high-color graphics. The bags will retail for $1.50 each and will be available at all Winn-Dixie stores.”

The company says that the bags feature images of fresh flowers, strawberries, orange trees and mangoes, and that it will introduce seasonal images throughout the year; a pink breast-cancer-themed bag, for example, will be in stores for a limited time during October.

“Winn-Dixie is raising the bar on reusable bags with these colorful new totes that have sturdy handles and a smooth surface that’s easy to clean,” said Robin Miller, director of corporate communications. “We encourage shoppers to substitute ‘paper or plastic’ at the checkout with these eco-friendly and fun alternatives.”

Published on: October 1, 2009

Dow Jones reports that a coalition of 46 business groups, including the Food Marketing Institute (FMI), has decided to support a proposed legislative compromise that would support a permanent estate tax rate of 35 percent, with the first $5 million exempted for individuals and a $10 million exemption for couples.

This compromise is supported in the US Senate by Sen. Jon Kyl (R-Arizona) and Sen. Blanche Lincoln (D-Arkansas).

According to the story, “Under tax cut legislation passed by Congress under President George W. Bush, the estate tax has been steadily shrinking and is scheduled to be repealed in 2010. If current law remains in place, it would then return full-strength, with a 55% rate and $1 million exemption level, in 2011.

“President Barack Obama has proposed making permanent the 2009 estate tax rules beginning next year. Those rules tax estate wealth in excess of $3.5 million, or $7 million for married couples, at 45%.”

Published on: October 1, 2009

Reuters reports this morning that Walmart-owned Asda Group in the UK is launching three new loyalty initiatives:

• "Chosen By You” will access 18,000 existing customers, providing them with products before they go into the stores and asking them for input about purchasing decisions, product development and packaging.

• "Your Asda," according to Reuters “will be centered around a new blog called ‘Aisle Spy’ and will allow consumers to trace the journey of Asda's products on webcams.

• "Bright Ideas,” the third initiative, offers the equivalent of more than $150,000 (US) “to any shopper who comes up with an idea that saves the firm 2 million pounds.”

Published on: October 1, 2009

The Los Angeles Times reports that Stater Bros. has “started filling a selection of antibiotic prescriptions for free. Albertsons said that it would match the offer at the Albertsons Sav-on Pharmacies in its stores, but that customers would have to ask for the deal. Vons said it had no plans to follow Stater Bros. Ralphs also said it would not match the offer but might introduce a similar program at a later date. ”

According to the story, “the Stater Bros. free offer covers a two-week supply of 38 different doses of eight different antibiotics, including generic versions of often-prescribed pharmaceuticals such as ciprofloxacin, doxycycline, penicillin and bactrim. Refills are also free. ”

Published on: October 1, 2009

The Wall Street Journal has been chronicling this week the adventures of Vegemite, described as a “salty brown yeast spread famous in Australia,” and how Kraft has been demonstrating a new flexibility in its recent reformulation.

Yesterday, the story was about how the company came out with a new, milder, smoother version of Vegemite – and how the new version was formulated through a new decentralized process. Virtually all the decisions, aimed at making the product more accessible to younger consumers in Australia, were made there – and the result was that the reformulation process took just 10 months, and almost three million jars of the new stuff were sold before the product even had a name.

That new name, Vegemite iSnack 2.0, was arrived at via a contest for consumers…but today’s Journal notes that resistance to the new name Down Under has resulted in Kraft’s decision to hold a new contest and come up with a new name for the new product that is less technical-minded.

Published on: October 1, 2009

Next Monday, what a press release calls “an unprecedented coalition of retailers, non-governmental organizations and food and beverage manufacturers” will gather in Washington, DC, to “announce the launch of the Healthy Weight Commitment Foundation, a national, multi-year effort to try to help reduce obesity – especially childhood obesity – by 2015. The Healthy Weight Commitment Foundation will promote ways to help people achieve a healthy weight through energy balance. The initiative focuses on three critical areas – the marketplace, the workplace and schools.”

According to the announcement, the foundation members have committed a total of $20 million to the effort.

The Healthy Weight Commitment Foundation is made up of a combination of 40 companies – including Kellogg’s and PepsiCo - and partner organizations that include the American Council for Fitness and Nutrition Foundation and the American Dietetic Association Foundation.

At the same time, the Financial Times reports that Coca-Cola is “ramping up” its efforts “to stress the importance of a healthy lifestyle in combating obesity, in response to a growing push by health advocates for a federal tax on sugared drinks and sodas. A Coke official said the company is about to expand what she called its existing ‘multi faceted effort’ on nutrition education, including the use of paid advertising to underline the need to balance calories consumed with appropriate exercise.” This coincides with a high-profile media campaign by the American Beverage Association to fight beverage tax proposals.

Published on: October 1, 2009

The Retail Industry Leaders Association (RILA) said yesterday that a letter “signed by 30 businesses and trade associations encouraged the Senate to include a 90-day grace period as part of the employer responsibility requirements included in the health care reform legislation under consideration.” Immediate enrollment, the letter suggests, will create enormous cost implications for retail businesses that often have high rates of turnover. The letter calls for a “reasonable grace period” while pledging an “ongoing commitment to working with lawmakers to find a fair, balanced and common sense approach to health care reform.”

Published on: October 1, 2009

• The Chicago Sun-Times reports that Walgreen has confirmed its plans to start selling beer and wine in most of its 7,000 store around the country. The rollout will take up to a year and a half, the company says, because of the need to acquire all the appropriate licenses.

• The Nielsen company is out with new research prognosticating about the upcoming end-of-year holiday season, saying that “households continue to focus on ‘essential gift giving’ such as staple consumables, candy, beverage/alcohol and entertaining at home, and 86 percent said that they expect to spend the same or less this year than last — with a 7 percent increase in those indicating they would spend less. Overall, Nielsen is projecting that holiday sales will rise 0.03 percent this year, accounting for $90 billion in dollar sales.”

• The Washington Business Journal reports that Safeway plans to spend $100 million over the next five years to renovate and/or replace its stores in Maryland’s Montgomery County.

• Food Lion announced that it has completed the remodeling of 31 stores “in Columbia, S.C. and Florence, S.C. As part of Food Lion's ongoing ‘Take A Fresh Look’ renewal efforts.”

Published on: October 1, 2009

MNB had a story yesterday about how the US Centers for Disease Control and Prevention (CDC) is out with a new report saying that every state in the country falls short of official recommendations for daily consumption of fruits and vegetables, with only one-third of adults eating enough fruit and 27 percent eating enough vegetables.

A state-by-state analysis showed that all the states where eating habits are better are either New England, Middle Atlantic or western states…and most of the ones with the worst kind of nutritional deficits in their diets were southern states. (I mistakenly wrote yesterday that they were “south of the Mason Dixon line,” but that was incorrect.)

I also noted that it was interesting that seven of the 10 states with poor consumption of fruits and vegetables are so-called Red States, while eight of the 10 states with highest fruit and vegetable consumption are so-called Blue States.

I wonder what would happen if you graphed out the political opinions in each of these states when it comes to public policy about the treatment of obesity issues, especially childhood obesity. Would the states with the worst record in terms of fruit and vegetable consumption be the most negative about a legislative or regulatory approach to obesity? And, conversely, would the states with the best numbers be more in favor of public policies that promote better eating habits? And where would these states come out when it comes to changed approaches to the health care bureaucracy?

One MNB user replied:

I'm betting that you'll get quite a number of replies from readers on the whole "Red State / Blue State" observation. I imagine that the correlation is strong between socioeconomic measures such as education levels and/or income levels and the consumption of fruits and veggies.

MNB user Philip Herr wrote:

While the Red State-Blue State dichotomy may fit the issue, it is probably more to do with poverty and affluence. There is more poverty in the south.

Another MNB user wrote:

The article on obesity in America and the splits among so-called red and blue states, and as a follow-on, whether these results might be fodder to seed something akin to anti-red-state legislation on this front: something tells me that your speculation that, generally speaking, people in the more-numerous obese red states would object to anti obesity legislation, and similarly, that people in the less-numerous obese blue states would support such legislation, is likely right on. The obese red staters wouldn't want to be "put upon" by outsiders they likely consider sanctimonious blue staters, and by the same token, these same blue staters might well love the opportunity to do exactly that, that is, "put it upon" their obese red state brethren. Assuming all the while, of course, that they themselves (the blue staters) would largely be exempt from such new rules since, ostensibly, their states aren't where the real obesity problem in America actually is!

But wait! The report does say that, while there is this somewhat better blue state obesity performance than there is red state obesity performance, all 50 states still did fail the assessment! Some (the blue) did certainly do better than others (the red), but no state actually passed! It would be interesting to me, therefore, to try & imagine how a seemingly well-meaning, but unfortunately NIMBY-obsessed, blue stater might still try to spin these CDC results in order to "put it on" the obese red states, all the while keeping the Feds' sometimes overly intrusive hands off their own states.

And MNB user Bob Anderson wrote:

Gee, Kevin, your regional elitism is showing. Your linkage of this issue to political view or a stance on the national Healthcare coverage debate is inappropriate.

A more appropriate correlation is rural vs. urban nature of the population in the states cited as best and worst. Or even better, how about Medicare/Medicaid reimbursement rates for the best and worst states.

What you will find is that the worst states are definitely more rural than the best. They have lower Medicare/Medicaid reimbursement rates and have a larger proportion of older Americans, and have a significantly lower family income.

Several recent studies have reported that eating healthy food costs more than not eating healthy foods. When the pocket book is small, you are elderly, limited mobility and live some distance from a grocery store of any size, it very difficult to eat healthy. I can cite numerous communities in the worst states where the availability of Healthy Food Sources is very similar to the availability is large urban center town areas, i.e. LA, NYC, Chicago.

Keep politics out of the discussion. Health of rural people is a serious issue. When the only health service provider in the county is the elderly Pharmacist and the nearest doctor is in the next county 20 or 30 miles away, it is hard to think about eating healthy.

I don't think I was being elitist. I was just pointing out something that seemed fairly obvious…and, quite honestly, I thought it would be interesting to see what kind of responses it would generate.

I wasn't disappointed.

And if you think I was being political, you should have seen the emails suggesting that the lack of good nutrition was why red staters vote the way they do. (I’m just reporting here…don't shoot the messenger!)




Regarding Jim Donald’s decision to become CEO at Haggen, MNB user Don Reynolds wrote:

What a great move for Haggen's.

Jim started his career at Albertsons under, I believe, Warren Mc Cain, who has provided our industry with many fine executives … These managers know how that success in the grocery business starts at the store level where you earn a profit not in the accounting department where you save a profit … The old Albertsons has produced more fine professionals for the grocery business then any organization I can call to mind, and I have working in the industry for over 50 years.

Another MNB user wrote:

The Haggen brand is positioned somewhere between New Seasons and Safeway (kinda no-man’s land). It will be interesting to see if he repositions the company or redefines the market.

And MNB user Lindy Bannister wrote:

Wow, how great to see Jim Donald in a good place again. I worked for him many years ago at Albertsons when Joe was still alive. He was known then and admired for his knowledge and ability to connect with people. Few people carry that throughout their careers, but Jim has a loyal following watching him succeed at it. I wish him all the best.