retail news in context, analysis with attitude

Published on: November 11, 2009

There are reports out of Arizona saying that Safeway and Fry’s Foods has reached an agreement that will allow one of them locking out employees if the other chain is hit by a strike. However, the mutual assistance agreement does not require such a lockout, nor does it preclude either chain from negotiating an independent contract with the union.

It is possible that a labor action could occur as soon as Friday after more than a year of fruitless negotiations.

Both chains have been advertising for temporary workers in the event of a strike or lockout.

Published on: November 11, 2009

The Philadelphia Inquirer reports that “labor leaders tonight will ask Acme supermarket clerks across South Jersey to authorize a potential strike for the week before Thanksgiving, one of the busiest times of year in the grocery business. The reason for the full-membership vote, according to union officials, was that negotiations with Acme Markets had been unproductive since contracts expired in April.”

Supervalu-owned Acme released a statement referring to the planned strike authorization vote “unfortunate,” and not “in the best interests of employees or our ongoing negotiations.”

A major sticking point in the discussions, according to the coverage, is a proposed reduction in health care benefits.

Published on: November 11, 2009

The Los Angeles Times reports that Walmart plans to keep most of its US stores open overnight on Thanksgiving as part of a strategy to reduce the “Black Friday” crowding that led to the trampling of a temporary employee in a New York store last year.

“Black Friday,” the day after Thanksgiving, is the traditional beginning of the end-of-year holiday shopping season in the US. In the past, store doors have opened as early as 5 am, with long lines forming to take advantage of hot - and short-lived - specials on a variety of products.

Published on: November 11, 2009

The Ft. Worth Star Telegram reports on a dust up over Dean Foods’ quiet decision to change the beans used in its White Wave Silk Vanilla Soymilk, which resulted in the product no longer being organic.

The problem is that when it changed the formulation, Dean did not change the bar code, the package design or the price. It just took the word “organic” off the carton.

Some consumers and retailers say that they feel like they have been duped, or at least intentionally misled. Dean Foods tells the paper that it informed its distributors of the change in formulation, and it is their fault for not following through with their retail customers.

According to the story, “ The ‘all natural’ label on Silk cartons is a loose term, in contrast with ‘certified organic,’ which has strict federal guidelines that products must meet.” And Urvashi Rangan, a senior scientist at Consumer Reports, tells the Star Telegram that
"Dean has only added to the marketplace confusion between 'natural’ and 'organic,’ as they definitely do not mean the same thing, and 'natural’ requires no verification whatsoever.”

Published on: November 11, 2009

More evidence that at least some companies remain convinced that frugality will be a guiding principle for many shoppers throughout the winter, as the Wall Street Journal reports that “Clorox Co. is keeping the price steady on a new improved trash bag that grips the top of the garbage can. Clorox says it wants to highlight the bags' ‘greater value.’

“Similarly, Campbell Soup Co. recently reduced the promoted price of its V8 beverages in some markets to 2 for $5 from 2 for $6. Burger King Holdings Inc. is selling double cheeseburgers for just a dollar.” And these moves are coming at the same time was retailers such as Amazon, Walmart and Target are fighting online price wars in segments such as books and DVDs.

While there are some “glimmers of recovery,” the Journal writes, conventional wisdom suggests that there will be continuing economic pressures - some of them real, some of them a matter of perception - that will dictate the decisions made by many, if not most, shoppers.

And, the Journal reports, “Bargain-hunting remains the operative shopping mode ... Supermarkets usually benefit during downturns as people turn away from restaurants and buy more food to prepare at home. But coupon-clippers are making it tough to boost margins. Kroger Co., the country's No. 2 supermarket chain by revenue, recently downgraded its 2009 earnings-per-share guidance. ‘Customers are buying more of what they need and less of what they want,’ Kroger chief operating officer Rodney McMullen told investors.”

Published on: November 11, 2009

Walmart is rebranding the website for its small-store Marketside format, which currently consists of four Arizona locations, using it to exclusively promote private brand prepared foods, calling it “the best of fresh at unbeatable prices.”

In addition, the single-page website refers to Marketside as “a new line of fresh food products specially designed to bring you the best quality fresh foods and ingredients available at Walmart’s unbeatable low prices.” That is, by the way, the only Walmart references on the minimalist site, which also allows shoppers to provide input about the Marketside stores and products.

The site also appears to be using a new logo for the Marketside brand.

Published on: November 11, 2009

PepsiCo announced yesterday the launch of a new $20 million initiative that will fund consumer projects designed to refresh their communities. The company expects that thousands of projects could receive some level of funding, and is creating the program as a way of establishing a greater level of involvement with communities as well as intimacy with its customers’ priorities.

Project proposals reportedly will be posted online and voted on by shoppers via social networking sites.

The”Refresh Project” also will be part of PepsiCo’s 2010 marketing efforts; “Refresh Everything” has been a marketing mantra for the company for more than a year.

Published on: November 11, 2009

• Dow Jones reports that Tesco’s UK market share grew from 30.6 percent to 30.7 percent during the most recent quarter, compared to the same period a year earlier, while Walmart-owned Asda’s share was up from 16.9 percent to 17.3 percent. J. Sainsbury’s market share went up from 15.7 percent to 15.9 percent, while William Morrison Supermarkets saw a market share jump from 11.3 percent to 11.7 percent.

According to the story, “the combined market share of the discount retailers - Aldi, Netto and Lidl - was 6.1 percent, the same as a year earlier.”

• Marketing Daily reports that Kroger is offering pet insurance in its stores, selling accident-only policies for $9.95 per month. According to the story, the offering is “intended to appeal to the 62% of U.S. households with pets, especially the 70% of those with more than one animal. The company estimates the pet insurance market to be $328 million this year, while Americans shelled out $11 billion in vet bills.”

• California-based Save Mart Supermarkets said this week that chairman/CEO Bob Piccinini “will reward 10 employees with cash prizes of $10,000 each during his annual six-week tour of all 252 of the company’s stores, distribution centers, warehouses, and offices. The 10 employees are being recognized through the company’s Customer Connection program for delivering excellent customer service and fostering a friendly shopping experience for their customers.”

“There’s no better time than the holidays to thank all of our employees for the hard work they’ve done all year and to reward the service superstars that bring our customers back to our stores,” Piccinini says. “By visiting every single store and support facility in our chain, I have the opportunity to personally reconnect with our employees. And I always get a big charge out of delivering the prizes to our top winners.”

Published on: November 11, 2009

• Stephen Van Tassel, the president of Ralcorp-owned Post Foods, resigned on Monday, saying he wanted to pursue other career interests. He will be succeeded on an interim basis by David P. Skarie, co-CEO and president of Ralcorp Holdings, while a replacement is sought.

• Advertising Age reports that Russ Klein, chief marketing officer at Burger King, is leaving the company “for personal reasons.” He will be succeeded by Peter Robinson, most recently president of the company’s Europe, Middle East and Africa division, will oversee global marketing while management looks for a replacement.

Published on: November 11, 2009

Lots of folks weighing in on the sick leave debate, and whether Walmart’s policy of not not paying people for the first sick day taken is actually creating an environment in which people go to work sick..even with the H1N1 flu.

One MNB user wrote:

The problem is two fold; 1) as always, people who abuse sick leave. 2) The new America, jobs without benefits full time and jobs without benefits part-time and wages so low for most Americans that they cannot take time off  when sick to recuperate.  Walmart is not the only company that has part time workers who have zero benefits and therefore do not accrue sick leave. This is a problem for all of us.

I could be wrong but I do think that Kroger, Supervalu or Safeway give their part-time workers sick leave. Therefore, if one is trying to survive on part-time pay at whatever wage then one must not miss a minute. This problem will not go away unless every worker earns sick leave, even though some (even many) will abuse their sick leave program.  The grocery industry is certainly not the only industry where this is a problem.   Even worse are food servers and kitchen workers in restaurants and our school food programs who most likely work for minimum wage.  It would be very expensive to add paid sick leave.  Wish I knew the answer.

Another MNB user wrote:

Not having read the policy, my comments could be totally off-base, but that’s not going to stop me. It could be their policy is set-up in that manner to prevent accusations of favoritism. A similar policy was enacted at a former place of employment. By using the point system for absences everyone in theory is treated equally, instead of the supervisor having discretion on who’s excused and who isn’t.  My husband’s employer has made allowances for the current outbreak of H1N1 and the recommendations of public health departments. Not excusing Walmart, just sharing that their policy is in place for a reason and with a company the size of Walmart making sure there are no differences in how each employee is treated would be very important.

Still another MNB user chimed in:

I work for one of the MANY companies with no “sick days” and points (demerits) given for each occurrence.  We, too, are allowed to use vacation time to pay ourselves so we don’t lose out on pay. I love my company (no, it’s not Wal-Mart) and I think that Wal-Mart is getting a bum rap this time. If the person who is ill does not have a record of frequent missing, then no harm. If an employee has a consistent record of missing work, then that would be on their head. You need to be able to count on your co-workers being at work. I think Wal-Mart’s plan, with allowances for unusual circumstances, is totally acceptable. Just my opinion.

And another MNB user wrote:

As a salaried manager for another "Mart" I can tell you that sick leave is just about worthless in retail. Staffing is so thin that actually calling in is impossible because that would mean someone else has to work open to close- and that's a long day! I have been going to work sick for at least two weeks now- flu, to sinus infection... A lot of hourly team members simply can't afford to miss work or they can't pay their bills. Retail is rough right now- especially working for a company trying to turn it around in a very tricky economy. But it's better to have a less than wonderful job than none at all, so I won't complain too loudly.

I have to tell you...I am a bit of a germaphobe, and I am really grossed out by this.

Here’s a different point of view:

I have to say that the one good thing about this recent flu pandemic and our state of digital technology is that it really has put a spotlight on how certain populations (typically lower class citizens) are unfairly treated in the workplace.  As a country we are quick to take on the labor policies of other countries without taking a good hard look at our own country.  I have a brother that works for a casino in West Virginia and it’s the same type of demerit system so another example of a great way to move this illness along a bit quicker.  Glad I don’t gamble!

I think retailers that allow or even encourage sick people to go to work - especially at a time when there are concerns about pandemic - are gambling.