retail news in context, analysis with attitude

Published on: October 29, 2009

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

The story that captured my imagination this week - and, in fact, seemed to capture much of the nation’s imagination - is the one about the two Northwest Airlines pilots who overshot the Minneapolis/St. Paul airport by 150 miles, ignored or didn’t hear all of the communications they were getting from concerned air traffic controllers, and who now apparently have lost their pilots’ licenses.

Part of the reason that we’ve all fixated on the story is that most have us have been on airplanes, and it makes us wonder about the people at the controls. The excuses and rumors have been all over the map. The pilots have been described variously has having been engaged in a passionate argument about airline policies (which is not something they’re ever going to have to worry about again), or possibly having fallen asleep. At one point there was something said about the flight attendants delivering food to the cockpit, and now there’s something about the pilots being focused on their personal laptops when they should have been flying the plane. And, let’s face it - there has always been the hint of something lascivious going on...as if laps may have been involved, though not necessarily the laptops.

We can only speculate.

The story, however, does provide a good metaphor for business, no matter what they were doing. The most important thing when you are flying a plane or running a business is to actually get to the target. You don’t want to land early, and you don’t want to overshoot the destination. You want to get to where you want to go, and you want to get there safely and effectively. You have to be focused on the job at hand, and not distracted.

Last week, I was on a United light departing Las Vegas. I was exhausted, and when I sat down I put my Kindle and iPhone next to me and promptly fell asleep. Well, apparently as the plane was taxiing down the runway, the pilot felt a little shimmy in one of the wheels, and he instantly threw on the brakes. I know this because I went flying forward, restrained by my seat belt, and my kindle and iPhone also went flying. I was so startled - I was, after all, in a deep sleep - that I let loose with the words “what the...” and ended the question with a word one ordinarily does not shout out in a crowded plane unless you are Samuel L. Jackson and there are snakes involved. I had to apologize sheepishly to some of the people around me, but it is a pretty good bet that we were all thinking about how lucky we were to have a pilot so sensitized to the controls that he made a split-second decision that potentially could have saved our lives.

Also a good metaphor for business. Sometimes, for the slightest reason, you have to be willing to stay “stop.” You have to be willing to step back and rethink the strategy and tactics...and even create a minor inconvenience...because in the long run, that’s the smartest way to get to where you are going.

For MorningNewsBeat Radio, I’m Kevin Coupe.

Published on: October 29, 2009

The Kroger Co. said yesterday that its new line of private brand fresh salads includes innovative new technology on the packaging that enables customers to learn where the produce was grown as part of the retailer’s "Quality You CanTrace"(SM) program.

According to the announcement, “‘Fresh Selections by Kroger’ are quality, pre-washed ready-to-serve packaged salads available in produce departments in Kroger's family of stores. Priced from $.99 to $4.99, depending on the variety and the market, Kroger's Fresh Selections are the only salads with HarvestMark technology sold in the U.S. today. Each bag carries a 16-digit code shoppers can enter at HarvestMark.com to learn more about the salad's origin, packing location, ingredients, date and time the product was packed. Customers can also offer their feedback on the product.”

Published on: October 29, 2009

The Chicago Tribune reports that Kraft, General Mills, Unilever is phasing out its use of the “Smart Choices” logo, joining Kellogg’s and PepsiCo in backing away from the suddenly controversial nutritional labeling program.

As previously reported on MNB, the “Smart Choices” label was developed by some of the nation’s biggest food manufacturers in consultation with some health organizations, as way of differentiating between unhealthy foods and those that were better in term of nutritional content. However, the labels hit the fan when Froot Loops, a sugary cereal for kids, got the “Smart Choices” imprimatur under the program’s algorithm, leading many - including the US Food and Drug Administration (FDA) - to question its credibility.

The FDA now is planning to issue regulations on what can be said about nutrition on the front of food packages, and the people behind “Smart Choices” have put the program on hold pending the release of those new rules.

Published on: October 29, 2009

Once upon an October dreary
Came a promotion oh so clearly
Walmart used the web to sell its caskets
All the better to enlarge its market basket...

That’s right. Walmart.com has begun selling caskets, offering them for between $999 and $3,199, though most of the 15 models available are priced under $2,000 - in some cases significantly below the prices charged by funeral homes.

The move is similar to one made by Costco.com several years ago.

Published on: October 29, 2009

Nice piece by National Public Radio about Portland, Oregon’s New Seasons Market, which it describes as having “local meat, sustainable fish and a lot of local and organic produce, tagged with yellow ‘home grown’ labels,” but with a difference - “side-by-side with a wide array of organic and natural products are conventional products, including Double-Stuff Oreos, Skippy peanut butter and Diet Coke.”

The reason is simple, says founder and CEO Brian Rohter: “We know that people aren't perfect. We know that people want to eat good food, but they also want their Doritos and they also want their Oreo cookies. We are not the food police. We want to offer what people want."

Also noteworthy about New Seasons, according to NPR: “New Seasons has very low employee turnover. The company pays well above minimum wage, with salaries starting at $10 an hour. It offers health coverage for workers and their families. Most employees work more than 20 hours a week, and the company pays 80 percent of their premium. New Seasons pays 50 percent of the premium for employees who work less than 20 hours a week. Workers also benefit from a profit-sharing program: 20 percent of New Seasons' after-tax profit goes back to employees.”

Published on: October 29, 2009

Meijer announced yesterday that it has begun “implementing a new pricing program storewide - from the grocery shelves to the general merchandise aisles - that will greatly increase the number of items reduced in price, provide deeper discounts for sale items, and provide assurances to shoppers that they are paying Meijer's guaranteed lowest price for a particular product. The streamlined system simplifies what is on sale, as the retailer will now have just three different sales categories for shoppers: Everyday Best Price, Sale and Price Drop.

"The bottom line is that it will cost you less to shop at Meijer than it did before," said J.K. Symancyk, Meijer’s executive vice president of merchandising. "This sale-pricing program will help further cement our standing as a low-price leader among national and regional grocers and retailers."

Published on: October 29, 2009

Winn-Dixie announced yesterday that “it has partnered with Blue Cross and Blue Shield of Florida (BCBSF) to offer its customers Health Cards in all 353 of its Florida Winn-Dixie and Save-Rite locations.”

The program consists of two options: the $59 Gift of Health Care card and $19 FamilyBlue discount card. The Gift of Health Care card “offers a convenient way to buy affordable health insurance. The $59 is applied accordingly to the plan the customer selects during the activation call. The $19 FamilyBlue discount card provides an entire family with discounts on dental, pharmacy and vision care for three months.”

The program is designed for the uninsured, who are looking for any break they can find on health care costs.

Published on: October 29, 2009

Yesterday, the story was that the ABC News weekly Consumer Comfort Index was a -51 last week, down from -50 the week before, and the lowest it has been in three months - which didn’t seem like good news for the economy.

Ah, but that was yesterday. Today, The Nielsen Company has a somewhat different take:

“The world is emerging from the economic crisis, and with it, global consumer confidence is rebounding, according to the latest edition of the Nielsen Global Consumer Confidence Index, which jumped from 77 index points in April to 86 points this month. Brazil and key Asian markets are posting double-digit increases in consumer sentiment, while the U.S. recorded its first increase in consumer confidence since 2007.”

The news isn’t all good, however:

“Despite this renewed sense of optimism, actual behavior remains restrained; many consumers remain skittish about spending their money, and in some countries, spending habits appear to have changed permanently ... Among those consumers who believe they’re currently in recession, over 60 percent of French, German and Irish believe that economic recovery is more than a year away. Of all regions, Europe – especially Eastern Europe – expects a longer road to recovery than all other global regions including North America, according to the survey.”

Published on: October 29, 2009

• The Wall Street Journal reports this morning that Procter & Gamble’s new CEO, Robert McDonald, is “trying to shake-up P&G's slow, process-heavy culture. He has increased scrutiny of P&G brands including Braun small appliances, Iams pet food, Duracell batteries and Pringles potato snacks. While those businesses have long been considered extraneous to P&G's focus on beauty, health and nonfood household staples, Mr. McDonald now is presenting an ultimatum: The leaders of those businesses are on heightened notice to prove their brands' prospects or face a sale.”

In addition, McDonald reportedly is looking for potential acquisitions that will bolster P&G’s core brand portfolio.

• Marketing Daily reports that Whole Foods plans offer an exclusive label for the Georges DuBoeuf Beaujolais Nouveau that it plans to begin selling the third Thursday of November...and that it will be cross merchandising it with Persillé du Beaujolais, a soft blue cow's milk cheese produced by a small, artisanal dairy in the Rhone Alps.

Published on: October 29, 2009

There was a story on MNB yesterday about a new report out from Forrester Research saying that while “almost everyone” under 35 uses online social networks, there is tremendous growth in the number of people between the ages of 35 and 54 availing themselves of this new technology, with use by this demographic up 60 percent in the past year.

As a result, two things are happening. One is that companies that are targeting this older demographic are beginning to devote time and money to figuring out how to use social networking to further their consumer connections. And the other is that some new social networking sites are being set up specifically to appeal to these people, with interfaces that are easier for them to navigate.

My comment: Aside from the fact that I am almost too old to be part of this “older” demographic of social networking users, which is by itself a sobering realization, this is an important development to which retailers and manufacturers need to pay attention. At some point, these sorts of vehicles will replace old-world promotional techniques such as paper coupons and FSIs, and the industry needs to position itself to ride the wave in a prudent fashion.

MNB user Mary Manning responded:

I am in the same boat with you as far as being left out of many "studies" that stop at age 54. I've been out of that for a while now. My suggestion to all marketers is that they should be looking at this as a lifestyle rather than an age. The real change in my family's life style came when all the chicks flew the nest. I have friend that still have kids at home who are older baby boomers, which means older than 60. And I have friends who are under 54 who are empty nesters. Just a suggestion.

And a good one.

Another MNB user wrote:

It is no longer a “Boomer World” (well it will always be a Boomer World in my eyes but…) the youngest Boomer is 45 to 48 (depending where you draw the generation line) The Gen x generation is 24 to 44…they are the parents now… they are mid-managers now…they are the shoppers now…they are coming into their peak earning and spending years…they are the movers and shakers (remember movers and shakers…that was us, the Boomers…when we could move and shake) They are not like us (Boomers) they have different values…and what the article may have scoffed at or downplayed is important to them…get used to them calling the shots!

On the general subject of social networking, one MNB user wrote:

How lazy are we becoming?? Everything being fast and easy is not good for anyone. No wonder we have credit card issues, overdrawn bank accounts, and spending way beyond our means without discipline. This is not a good thing…this only promotes more of the same. The information highway is fast becoming the new on-line carnival barkers of old. “Step right up, get your thingamajig right here….step back son, you bother me”. Where is ShamWow Vince when you need him…?

I think this is a highly cynical view of the new world order. Sure, there are some less than savory exits on the information super highway, but generally speaking it is an extraordinary part of our technological evolution...and to view it in such jaundiced terms is counter-productive.

One can wish we’d go back to the days of horse-drawn carriages and buggy whips. But wishing won’t make it so.




On another subject, MNB user Andrew Casey wrote:

I really enjoy MNB but just have to chuckle every time you predict the end of "... old-world promotional techniques such as paper coupons and FSIs ...".  It is not that I doubt you will someday be correct; I suspect you will be.  But if I had a nickel for each time I have heard that prediction (not just from you) over the years I would have more money than, well, a paper coupon company.  I don't think I would recommend starting a new paper based program but I am thinking the existing players will be ok for a little while yet.

It’s like the great line from Casablanca: “Maybe not today, maybe not tomorrow, but soon...and for the rest of your life.”




We had a story yesterday about Costco deciding to accept food stamps, which led to a bunch of email.

MNB user Gary Narberes wrote:

I find this a little disturbing when you consider the fact that one must pay to shop at Costco in the first place...either $50 or $100.  After gaining the "liberty" to shop there, consumers are surrounded by bulk packaging of everything.  All items that are food stampable are sold in volume packaging...hardly affordable, in my humble opinion, to someone that is on government assistance.  If they can afford to shop Costco, they don't need food stamps.

MNB user R. Dale Blotter wrote:

As a Costco card carrying member, my immediate reaction is if I’m in bad enough financial shape to need food stamps then I have no business shopping at Costco anymore.  This is a strange move in my opinion for them and would seem to conflict with their position in the market as an upscale wholesale club.  I could see Sam’s doing this as an extension of Wal-Mart but not Costco.  Hard to believe that they perceive a need for this among their member base.

MNB user Philip Herr wrote:

This is really political grandstanding when you decompose some of the demographics. While not 100% sure, I’d suggest that most Costcos are located relatively far away from where food stamp recipients live. Most likely they are in rural areas or inner cities, while Costco tends to suburban areas. Add to that the $50 to $75 membership fee and I’d think it becomes less of a bargain for people unfortunate to need food stamps. Costco’s big attraction (apart from the “treasure hunt”) is bulk packs. Again, not that attractive to someone with a small apartment or no car. So I guess some politician can feel sanctimonious having made Costco cave, but I can’t see them accepting many food stamps.

Now if only the politicians would think deeply about how they are hurting their constituents by preventing Walmart into inner cities.




And, on the subject of plastic bags, one MNB user wrote:

Yes, I will not let you up on this one. These so-called reusable bags come from off shore companies and do not promote American made…..and in this time of trouble economics we should all be standing together….even you KC. I so not begrudge your right to use these bags, but at least spend the money to buy American made. I for one support the plastic bag….they do not litter themselves (we do it), 100 % recyclable, just drop it in the recycling bin, and you get a sterile fresh bag the next time in the store…And by the way, you are not helping the environment by using your alternative bags….the same amount of Natural Gas will be used whether you use plastic or not, which by the way, is insignificant to what is being used for heating etc…right now…today. As for landfills, plastic is probably one of the best things you can put into a landfill, but if recycled, then they do not have to be in landfills at all (the book Rubbish by William Rathje). Your alternative bag is not easily recyclable and usually ends up in the landfill. You might one to try using them in the garden as weed protectors when spreading mulch.

Come on KC, quit believing all the bull that is being pumped by the environmentalists that has no basis in fact (i.e. San Francisco litter reduction never happened). Clogging up our landfills, streams and rivers, etc….excuse me? This is nothing but a political football being used to attract attention for personal gain, by either an individual or group. The facts are the facts. Let’s keep Americans employed and reduce, reuse, recycle and regenerate these products and create more jobs…. Is that not the American way?

First of all, I believe in buying American...when the American products are superior. As for the litter issue, another MNB user wrote:

Anyone who thinks plastic bags and bottles don’t create a litter problem need to read about the Pacific Garbage Patch.  This is no urban legend. Just Google those three words.

I’m with you. There are none so blind as those who will not see.
 



And finally, on the subject of the World Series, MNB user Jeff Reinartz wrote:

As much as I love baseball, I'm going to have a difficult time watching this World Series for one particular reason: About nine months ago the story broke about A-rod testing positive for steroids in 2003, when he won the American League home run title and MVP as a Texas Ranger. I just can't clear the image of him saying, "When did they say I tested positive? 2003?
Yeah, that's when I took them." His press conference smacked of a guy telling the world he was sorry for getting caught, not because he took steroids. I'd lay odds he was flushing the rest of them down the toilet the day after the story broke, and now he's on the verge of finally getting his ring.

Now we're all supposed to forgive and forget because he plays for the media's beloved Yankees.

As a Twins fan, that may smack of sour grapes, but as a baseball purist, those grapes are making my stomach turn.

MNB user William Saldivar wrote:

I’m a die hard SF Giants fan so I can relate to Met fan this year, I remember the Oakland A’s vs. Dodger’s World Series…death by paper cuts.

I wrote yesterday...and many time previously...that National League baseball is superior to American League baseball because there is no designated hitter rule there.

One MNB user responded:

I don't know if the designated hitter rule in and of itself justifies the National League as having inherently superior baseball.  Given the American League's 13-7 record in the World Series over the last 20 years, and also their 11-0-1 record over the last 12 All Star games, I would say a strong case could be made for the Jr. Circuit as having inherently superior baseball.

And I'm sure you expected these responses, but I just couldn't resist. Go Yankees!!!

It is a matter of purity.

More on the World Series below...

Published on: October 29, 2009

In the first game of the World Series, the Philadelphia Phillies defeated the New York Yankees 6-1, with a masterful complete game performance by Cliff Lee.