retail news in context, analysis with attitude

Published on: October 15, 2009

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

My wife and I recently went to Parents Night at our daughter’s high school, an event that I’ve found to be enormously enjoyable on nights when my kids have had committed and highly engaged teachers. There’s nothing worse than going to Parents Night and have this uh-oh feeling that it is going to be a long year, or that I’d rather have a colonoscopy or dental surgery that spend 45 minutes a day with this math teacher or that science teacher. But that didn’t happen this year, and in fact has never happened at this school, which is a good thing.

But something else interesting is worth noting. My daughter’s Spanish teacher, as it happens, is an archaeologist who has spent a lot of time in Peru; when he speaks the language and about the culture, it is with an elevated level of passion.

Her chemistry teacher is a marine biologist, not a chemist. So when he talks about principles of chemistry, he brings a kind of real world experience to them…he wants the students not to think of chemistry in terms of abstract principles and ideas, but as having a tangible connection to the physical world.

And her history teacher was a music major who speaks with enormous enthusiasm about the arts. So when she talks about various periods of history, she is using culture as a window into different civilizations, which can make them come alive in a different way.

A really good Parents Night makes the adults in attendance want to go back to school. But this one made me think about the advantages of getting people in any organization – not just a high school – to move outside their comfort zones, to work in disciplines with which they may not be familiar. The unfamiliar eye can see things that more practiced, and in some cases jaundiced, eyes never see. It can be a path to change, to innovation.

I’d be enormously surprised if my daughter didn’t learn stuff in Spanish, history and chemistry this year that she never would have learned if her teachers were cut from a more traditional cloth. Kudos to her school for understanding this. For the rest of us, it is a lesson worth learning and if done right, it can pay dividends not just in the short term, but in continuing improvements and innovations for our businesses.

For MorningNewsBeat Radio, I’m Kevin Coupe.

Published on: October 15, 2009

The New York Times reports this morning that Connecticut Attorney General Richard Blumenthal has launched an investigation into the Smart Choices nutritional labeling program, which has come in for criticism for having giving its imprimatur to products like Froot Loops.

In a letter to three of the manufacturers backing the Smart Choices program - Kellogg’s, General Mills and PepsiCo, Blumenthal called the system “overly simplistic, inaccurate and ultimately misleading.” In a statement yesterday, executives with Smart Choices program defended it as being based on legitimate food science, but said they would cooperate with the investigation.

According to the Times, “The Connecticut investigation will seek to determine if the labeling campaign violates the state’s consumer protection law, which bars misleading or false product claims.” Blumenthal reportedly is talking to other state attorneys general with an eye toward getting other states to join the effort.

Published on: October 15, 2009

There is a long and interesting piece in Business Week (soon to be known as Bloomberg’s Business Week, according to the headlines) about Walmart’s international strategy, which is described as having been “marginalized” and “haphazard.” There is a concerted effort to change this approach, in part because the company’s leadership knows that it can no longer be a US company with an international division, but rather must be a truly global company if it is to thrive in a 21st century economy.

While there certainly are examples of where Walmart’s international ambitions went off the rails - Germany and Korea come quickly to mind - Business Week reports that Walmart seems to be adapting to a side of its business that “has 3,805 stores operating under 53 distinct banners in 15 markets.”

The magazine’s Matthew Boyle writes: “Four countries illustrate the challenges the world's largest retailer will face in the coming years as it seeks new sources of global growth. In Japan, managers are trying to revitalize a business that has hemorrhaged money for years - weighed down by a ho-hum brand, the country's byzantine distribution system, and cultural resistance to the discount model. In India, restrictions on foreign ownership have forced the company to team up with conglomerate Bharti, an odd coupling that has so far resulted in one store. Walmart has spent more than five years in Russia, maintaining a team of 30 executives who are still trying to plot an entry strategy at a time when other foreign retailers, like Carrefour, are bulking up their presence. And in Chile, a decade-long courtship finally led to the acquisition of the country's leading supermarket chain earlier this year, bringing with it a different business model, based in part on financial services.

“All four demonstrate the perilous but potentially lucrative terrain that lies outside the saturated retail markets of Europe and North America. And Walmart's success will ultimately hinge on its ability to learn from past mistakes and adapt quickly to the shifting realities of these markets.”

Published on: October 15, 2009

The Dallas Morning News reports that c-store giant 7-Eleven is ramping up its hot food program in the Dallas market, adding “items such as pepperoni pizza and chicken wings to 115 Dallas-area stores.

The reason? Simple...it’s because consumers crave convenience, and that means a better level of hot prepared foods, and because 7-Eleven realized that “food service is our future.”

Published on: October 15, 2009

Marketing Daily reports on a new survey by market research firm Synovate that suggests US consumers remain highly fixated on price - “74% now shop armed with a list ... 65% think grocery items are overpriced, and 49% find the experience so unpleasant they just want to ‘get in and get out’ ... some 39% of shoppers in the U.S. say they are spending less than they did 12 months ago, and 78% would happily switch one food brand for another if it were a better deal.”

In fact, the supermarket shopping experience is so distasteful to people that, the report says, “48% would gladly shop online, if they thought online grocery shopping was both secure and that they would get high-quality food.” However, this doesn’t mean that they are using alternative formats: “89% say they are most likely to shop at supermarkets, and only 10% of Americans say they do their grocery shopping at superstores, which typically offer lower prices. Some 57% of Americans still do a big weekly shopping trip, and 58% buy in bulk.”

Published on: October 15, 2009

The management of a Tesco store in North Wales stands accused of religious intolerance because it forced a man wearing ceremonial garb to either remove part of it or leave the store.

Which sounds terrible, especially in this day and age.

Except that the garb in question was a long brown robe and hood, and the creed in question was the Jedi religion, based on the beliefs espoused by Yoda, Obi-Wan Kenobi and Luke Skywalker in the Star Wars films.

According to published reports, the store requested that Daniel Jones (who goes by the Jedi name “Morda Hehol”) take off his hood while in the store....apparently for security reasons. Jones...er, Hehol...said that taking off the hood violated the tenets of his religion.

No word yet on whether the case will be submitted to the Confederacy of Independent Systems to be adjudicated.

Published on: October 15, 2009

Reuters Health has two reports out worth noting because they offer retailers and manufacturers yet more information around which they can market and merchandise:

A study done by Japanese researchers says that the consumption of five cups a day of green tea a day may lower the risk of certain cancers, such as lymph system and blood cancers. Further study, however, is said to be called for.

And, there is a story noting that people who get most of their daily fluids in the form of plain water - as opposed to, say, five cups of green tea - tend to have healthier diets, eating more fiber and less sugar. At least, that’s the connection being drawn by researchers at Queens College of the City University of New York, who say that for the moment the evidence seems to anecdotal rather than scientifically concrete.

Published on: October 15, 2009

• In Santa Rosa, California, the Press Democrat reports that “Wal-Mart has begun eliminating disposable shopping bags at its Ukiah store and two others in California, a move that environmentalists hope will spread nationwide and lead to the demise of the bags that are clogging landfills and littering highways and oceans ... The pilot programs will continue through 2010 and determine whether Wal-Mart expands the program to all of its U.S. stores.”

“We’re committed to reducing the plastic bag waste by one-third by the end of 2013. This test could help,” said Wal-Mart spokeswoman Amelia Neufeld.
The Wall Street Journal reports that Walmart plans to “expand Tracfone Wireless Inc.'s ultracheap Straight Talk cellphone service nationally, in another illustration of the pricing decline at the low end of the wireless industry.” The service “offers a monthly plan for as low as $30 and an unlimited-access plan—including text messages and mobile Web access—for $45 a month ... The retailer's cellphone pilot program that began last summer in 234 stores was successful, said Wal-Mart, and the company has worked quickly to make the plans available before the holiday.”

Published on: October 15, 2009

• The Business Courier of Cincinnati reports that Bob McDonald, Procter & Gamble’s new CEO, told the company’s annual meeting that the company’s “post-recession growth strategy will be to reach more consumers, in more parts of the world, more completely, McDonald said. That includes expansion of P&G’s product portfolio to add more price points – especially more low-cost products – so that ‘there’s no reason any consumer should have to buy any other brand,’ he said.”

McDonald noted that P&G’s US sales average $100 per person, and “ if it can increase sales in China and India just to Mexico’s level of $20 per person, it would boost overall sales by 50 percent. The company’s Chinese and Indian sales currently average $3 and less than $1 per person, respectively.”

Published on: October 15, 2009

In writing yesterday about a Texas school lunch program that is attempting to serve healthier foods, I noted that with such efforts comes the ability for supermarkets to insert themselves in the conversation, to both talk about and actually providing better and more nutritious food that tastes good.

Which led MNB user Alan Carter to write:

A point I've been stressing for years, getting food manufacturers, restaurants and supermarkets to take action is the challenge.  Freedom of choice combined with good tasting/bad for you foods in plentiful and affordable supply is the recipe for obesity and diabetes. The potential for decreasing profitable sales (quantity) and lower margins (on higher quality) make it difficult to execute programs from a business perspective.

The Kansas Diabetes Action Council is developing an education and intervention program that will reach all Kansans via community organizations, churches, schools, supermarkets, pharmacists, nurses and physicians.  Working with the CDC, the American Diabetes Association and committed Kansas volunteers we intend to meet the State crisis at ground level.  Without improving our diet and exercise the obesity and diabetes epidemic cannot be slowed, let alone stopped and reversed.  Protecting our children's future health is vital to long term business success but, creating the right mix of products and services may prove to be costly in the short term.

Keep beating the drum for change in the Food Industry, otherwise we'll reach "critical mass" with large consequences for both food and health businesses.

Have drum, will travel.

MNB user Jackie Lembke wrote:

I heard a presentation done by a chef in charge of dining at a large university. He called this “stealth” health, healthy attributes, like whole grains, less salt, sugar, whatever done in ways that aren’t as noticeable to the diners. He doesn’t tout the health aspects until the product is well received and occasionally requested, then he will explain the health benefits. Great concept especially for kids who can be reluctant to try new products.

A couple of kids were described in the story I read about the Texas program - one who liked the healthier food, and one who complained about it. And I joked that “I couldn’t help but feel that the more open-minded kid probably gets beat up a lot.”

One MNB user took exception to my characterization:

No – the kid who likes the new menu doesn’t get beat up a lot (usually) because he is smarter and can talk his way out of a fight and if he can’t do that he is more likely to be thinner and faster and can escape potential harm by leaving the discussion quicker than chubbier, hamburger – donut – breaded food – soda pop imbibing complainer (who probably doesn’t exercise either) can.

I think I hit a nerve. But I hope he’s right.




I continue to get email about Bob Dylan.

One MNB user wrote:

I agree with your correspondent who had attended a Dylan concert. A couple of years ago my wife and I decided to see Dylan in his seemingly annual concert in Telluride, CO. At 56 and 57 year old baby boomers we had never seen him and thought it would be neat to do so. It was the worst performance I've ever been to. The opening act was excellent, his band was awesome and the sound people had done great job as the sound was the best I'd ever heard in an outdoor venue. Then Dylan comes out, makes no eye contact, doesn't engage the crown of around 7000, sits and plays his songs and then gets up and leaves. He never said word one; I don't care for that as I like an artist to make a connection to the audience. There were some songs that for three or four seconds you could tell it was Dylan. Most of them could only be identified if you knew the tunes because the lyrics were impossible to understand. I wouldn't waste my time on a Dylan concert if it were free.

Years ago, after attending a gala thrown at a CIES Summit, I wrote a column meant to be witty in which I also complained about an opera singer who had entertained the audience without ever making eye contact, and I joked that I would have preferred Jimmy Buffett.

The singer, of course, was Andrea Bocelli...who is blind, but because I am an utter ignoramus about opera, I didn’t know that. I got roasted by dozens of MNB users who thought that I was a cretin.

I’d still rather go to a Dylan concert than another one by Bocelli ... which probably confirms the fact that I’m a cretin.

And another MNB user wrote:

I don't necessarily disagree with the other MNB reader who had a negative opinion of Dylan's present-day singing ability.  I've been to a decent number of Dylan concerts over the last decade or so, and it can be pretty hit or miss.  If you go to a Dylan show nowadays, you shouldn't expect to hear anything that resembles the 60s & 70s classics verbatim; if you do, you will be disappointed.

In my opinion, the fascinating thing about Dylan (besides the obvious legendary catalogue of material) is his never-ending drive to move forward and reinvent himself; hence my mention of the radio show (he IS a very good DJ) and the Christmas album.  These days, he seems to fancy himself to be  some sort of wondering West Texas swing / bluesman from a bygone era (or something like that) and his music reflects that.  But to your original point, the fact that he is out there somewhere performing practically every other night (when he obviously does not need to, financially) is impressive and should be celebrated.

So I say, go ahead and check the box...go to Dylan show when you get the chance.  Just approach it as if you are going to see a 70 year old music troubadour, not a 60s protest singer or rock icon, and you should enjoy yourself.