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    Published on: December 9, 2009

    A new study of supermarket shopping patterns says that “the top ten percent of store’s customers visit the store more than twice a week, spend over $39 per visit and represent nearly 40 percent of the store’s total sales,” concluding that “these most valuable shoppers tend to remain very loyal to the store, with 95 percent continuing to shop there throughout the year.”

    On the other hand, the study says, “only 34 percent of the store’s worst shoppers, those who visit the store less than once a month and spend only $9 per visit, remain customers.”

    The research and analysis was done by a company called Concept Shopping, which has a horse in this race - it describes itself as a “marketing firm that improves sales for retailers and marketers through the execution of personal marketing programs based on the purchase history of individual shoppers.”
    KC's View:
    Putting the bias behind the research and analysis aside, these numbers actually should not surprise anyone. Retailers should look at their marketing efforts and think very hard if they are doing everything possible to focus on the top deciles of shoppers who are walking into their stores.

    This doesn’t mean just sending more and better coupons, though this does have some value, especially in today’s economic climate. But there has to be more. That should be concerted, relevant and highly focused initiative that prove to these best shoppers that the retailer is actually loyal to them ... not just financial lures that endeavor to make the shopper loyal to the store.

    Okay, so it has been established that best shoppers are, in fact, best shoppers. What is the store doing on a daily, even hourly, basis to prove to these shoppers that it is the best store for them?

    Published on: December 9, 2009

    The San Francisco Chronicle reports that Google is getting into the restaurant assessment business, bringing a high-tech spin to an initiative that essentially puts it into competition with Zagat.

    According to the story, Google plans to “send out window decals to more than 100,000 U.S. restaurants, shops and hangouts that have proven popular on Google's search engine and map service. The stickers will proclaim the businesses a ‘Favorite Place on Google,’ helping to lure customers in much the way ‘Zagat Rated’ signs or framed newspaper reviews have done for years ... Each decal will include a unique bar code that consumers can scan with the cameras on their mobile device ... to find reviews and coupons or eventually submit their own feedback.”

    In its announcement, Google said that “this launch is part of our overall effort -- online and offline -- to provide you with the best local business results whenever you're trying to figure out where to go, whether it's a trendy Cuban restaurant in Philly, a comics shop in LA or a hip hotel in NYC."
    KC's View:
    This is yet another example of a kind of online social networking, as companies like Google set up communities that serve as a kind of virtual back fence across which people can discuss everything from their favorite restaurants and supermarkets to their favorite recipes...and also, by the way, can register their distaste for certain companies and practices.

    Companies have to be in the position to not just respond to criticism, but embrace the opportunity to be part of these communities. We all learn the most from the people who don’t like us or disapprove of some of the things we do...but take the time to register their complaints.

    Published on: December 9, 2009

    Interesting piece in the Wall Street Journal by writer James B. Stewart that looks to assess the current price wars being fought by Walmart.com, Amazon.com and eBay, using three categories - toys, small appliances and DVDs - as the battleground.

    Noting that any such competition has to be taken in context, the Journal chose one product in each category that was featured on all of the sites, and then ranked the retailers on price and availability.

    The winner? “Amazon won through a combination of price and availability,” the Stewart writes. “When it was undercut on price, it was usually by a negligible amount. But eBay fared surprisingly well. It offered slightly used or reconditioned models at steep discounts, as well as many bidding opportunities. The site offers a viable alternative to Amazon on most new items. If my experiment is indicative, Wal-Mart needs a lot more than cheap bestsellers to challenge Amazon.”
    KC's View:
    Again, any such experiment can be challenged as not being indicative of the larger reality.

    However, it does reflect what I think is a very specific reality. Amazon is so good at what it does that it will be difficult for Walmart to lure away Amazon shoppers. To build its online retailing business, I suspect Walmart is going to have to create new e-shoppers, not steal them away from Amazon.

    And I still believe that in the not-too-distant future, you’ll see Walmart create an online grocery store that will offer pick-up at the thousands of stores that it has all over the country - a development that could be a real game-changer.

    Published on: December 9, 2009

    Five publishers - Time Inc., News Corp., Conde Nast, Hearst and Meredith formally announced yesterday the creation of a new partnership that will develop a new e-reader that will be designed to compete with the likes of Amazon’s Kindle but be formatted so that newspapers and magazines can be more attractively and visually presented.

    The new product will endeavor to maintain the “look” of the publications that are on the reader, as allow for the publishers to better control how their content is seen and what people pay for it.

    As previously noted here on MNB, such a digital newsstand would look to solve a number of problems for publishers that have seen their revenues plummet as more and more people get their information from the Internet, and as advertisers look to shift their marketing dollars to media perceived as being more relevant. By charging for content – something that most magazines and newspapers have found can be a challenge in an environment where people expect information to be free – and by marshaling their titles in the same way that Apple did with music, movies and television programs in its iTunes store – the publishers hope to put themselves sin charge of their own destiny…and avoid having a third party (like Apple or Amazon) come in and dictate a business model to them.
    KC's View:
    Being a dedicated and enthusiastic user of the KIndle, I certainly can understand why these publishers want to a) have more control, and b) have a device that is more newspaper/magazine friendly.

    At some point, however, I have to believe that we’re going to see some merger of all these uses onto one mobile device...simply because it is unlikely that people are going to carry around multiple devices that serve different purposes. If I had to bet, I’d guess that the company that will make this breakthrough will be Apple...but I have such a bias in this direction that I’m probably not a good judge on this. (Doesn’t mean I’m wrong, however.)

    The bigger point - and the lesson that brick-and-mortar retailers need to take from this - is how things are changing in terms of how people are accessing information. If this publisher-driven device takes off, for example, what does that man for companies that have been major advertisers in newspapers?

    These are eventualities that companies need to start planning for now. in their meetings, they need to ask themselves, “What are our options? And how do we use this opportunity to ourselves be better at our jobs, more in touch with shoppers, and more in control of the shopping/marketing experience?”

    Published on: December 9, 2009

    “As The World Turns,” the 54-year old “soap opera” owned by Procter & Gamble that began on CBS Radio and then was transplanted to television, has been cancelled by the network. The last episode will be seen in September 2010.

    The move follows the similar cancellation earlier this year of “The Guiding Light,” which had been in production for 72 years.

    P&G said that it hoped to find another outlet for the show, but the New York Times suggested that in the current economic and creative environment - soap operas cost about $50 million a year to produce, while talk shows and game shows cost just a fraction of that - another home for “As The World Turns” is unlikely. In addition, the program has been suffering from declining ratings, which would make any future problematic.

    The Times writes, “For Procter & Gamble the loss is symbolic more than financial. The company, which has owned more than 20 soap operas in the past 80 years, now spends more than $7 billion in global advertising each year, making soap operas only a tiny portion of its business.”
    KC's View:

    Published on: December 9, 2009

    The Wall Street Journal reports that PepsiCo is dropping its Gatorade Tiger Focus sports drink, which was named after and endorsed by golfer Tiger Woods, who currently is involved in a deepening scandal over his apparent marital infidelities and what he has referred to as his “sins” and “transgressions.”

    However, the company said that the move was part of a broad overhaul of the Gatorade line, and not connected to the publicity about Woods’ personal behavior. And, in fact, Gatorade Tiger Focus has not performed well in stores.

    The Journal notes that “advertisers haven't aired TV commercials featuring Mr. Woods since shortly after the scandal broke, according to monitoring data from Nielsen Co., which scans the prime-time, evening news, late-night and sports telecasts on major broadcast networks and 19 cable networks. The Golf Channel isn't included in Nielsen's tracking.”

    To this point, the Journal reports, none of the companies for which Woods endorses products - ranging from Nike to Gillette, NetJets to Accenture - have disassociated themselves from the golfer.
    KC's View:
    It is hard to know how this is all going to play out, because the simple truth is that there is a lot more speculation that facts about Woods at this point.

    But I have to believe that unless there is a major revelation in the case, at some point this is going to take a toll on perhaps the second-greatest celebrity endorser in history, behind only Michael Jordan. (And by revelation I don’t mean yet another mistress calling a press conference, though at this point there must be thousands of office pools on what the over/under is on the final number. He seems to be on the back nine at this point, but who knows?)

    And it is going to happen because some CEO’s wife is going to look at him across the breakfast table and say, “You’re not still doing business with him, are you?” Or because some CEO is going to be walking through O’Hare Airport, see all the billboards featuring Woods espousing a specific approach to life, and hear people snickering all around him.

    That’s not to say Woods cannot be redeemed. But it may be the most difficult shot he’s ever played.

    Published on: December 9, 2009

    The Detroit Free Press reports that “Meijer Inc. will pay $3 million after the Midwest retail chain discovered it had employed four pharmacists who were barred from federal health programs ... The pharmacists worked at Meijer stores in Michigan and Ohio from 1997 to 2006 and had been barred from Medicare, Medicaid and Tricare, a military health plan.

    “Federal law prohibits stores from using pharmacists on the exclusion list. Meijer gets federal reimbursement for many prescriptions it sells.”
    The paper notes that Meijer brought the issue to the government’s attention and avoided more severe penalties by being pro-active.
    KC's View:

    Published on: December 9, 2009

    USA Today reports this morning that Rep. Rosa DeLauro (D-Connecticut), chairwoman of the US House of Representatives appropriations subcommittee on agriculture, is calling for the US Department of Agriculture (USDA) to close down the Cargill-owned Beef Packers plant in Fresno, California, that has been implicated in two salmonella-related recalls this year.

    DeLauro said that the closure would be temporary, pending a comprehensive assessment of how the contaminations occurred.

    • The Chicago Tribune reports that “with unemployment in the double digits, consumers who find themselves increasingly strapped have turned to cheaper means to feed their families. And those who have jobs are working longer hours, forgoing exercise and searching for foods that are economical and convenient.

    “As a result, more consumers are turning to processed foods, either prepared, frozen or canned and often filled with fat-generating calories, refined grains and sugars. Experts said that's making more Americans chubbier and prone to obesity-related illnesses such as diabetes in what has been dubbed ‘recession fat’.”

    Crain’s New York Business reports that NY City Council Speaker Christine Quinn has announced “a six-month effort to examine the local food system and recommend improvements,” such as eliminating the trucking in of fresh produce from outside the state that is actually grown within the state - a move that would be good for local farmers while also cutting down on truck emissions.
    • PepsiCo announced yesterday that it has struck a deal with the Dr Pepper Snapple Group to distribute the Dr Pepper, Crush and Schweppes brands in the US, as well as some of the brands in Canada and Mexico. The arrangement is contingent on Pepsi completing the buyout of its two biggest bottlers, which should be completed by early next year.

    The 20-year deal is costing PepsiCo a total of $900 million.
    KC's View:

    Published on: December 9, 2009

    • Kroger said yesterday that its Q3 revenue increased 0.3% to $17.67 billion, compared to the same period a year ago., with same-store sales, excluding fuel, up 1.3 percent. However, the company also reported a third quarter loss of $874.9 million, compared with a profit of $237.7 million a year earlier. The company said that the loss could be attributed the tight economic climate as well as its ongoing price wars with Walmart.
    KC's View:

    Published on: December 9, 2009

    • Procter & Gamble announced yesterday that CEO Robert McDonald will add the title of “chairman” to his business card on January 1, succeeding AG Lafley, who stepped down as CEO last June but had remained as chairman.

    • Kellogg Co. said yesterday that it has promoted Ronald Dissinger, CFO of its North American unit, to be chief financial officer for the corporation.

    • Winn-Dixie said yesterday that it has hired James Smits, most recently the group vice president of fresh food merchandising at Supervalu, to be its new group vice president of perishables.
    KC's View:
    Winn-Dixie didn’t ask for this advice, but let me exercise a point of personal privilege here.

    Look at Smits‘ old title and new title. At Supervalu, he was in the fresh foods business. At Winn-Dixie, he is in the perishables business.

    I’ve said it before, and I’ll say it again. We ought to ban the word “perishables” from the supermarket lexicon. “Perishables,” by their very nature, are in the process of rotting. It is a negative word. “Fresh foods,” on the other hand, is a hopeful, positive and optimistic word - it says something good about the people who sell them, the people who buy them, and the people who eat them.

    Change the title, Winn-Dixie. It may seem like semantics, but it is not.

    End of unsolicited rant.

    Published on: December 9, 2009

    Yesterday, MNB took note of a Tampa Tribune report that Delhaize-owned Sweetbay Supermarkets has opened a new store there that is “a virtual showcase of eco-friendly energy-saving projects not usually seen in grocery stores. There are motion sensors that turn on lights when customers walk nearby. And rather than open-air shelves, huge areas of the store have refrigerators with glass doors ... There are hyperefficient air conditioners, on-demand water heaters, restrooms that use reclaimed water for flushing and even preferred parking close to the door for hybrid cars.”

    As a result, the Tribune wrote, “Publix officials are thinking along similar lines to save energy, and a slew of projects will start appearing in their stores soon, if not already.”

    My comment: All of these companies have learned the lesson that these kinds of projects are both good for the environment and good for the bottom line. The Tribune notes that “the changes will save the company money. An average Sweetbay supermarket can rack up an electric bill of $26,000 a month, officials say, using as much power as about 50 average homes. New technology in the Tarpon Springs store will cut that bill by 20 percent to 30 percent and reduce water use by 40 percent.” Green is good.

    MNB user Bob Paulson disagreed:

    Enough already with the 'green' thinking. Too often, too many times group think has taken over a subject, only to see time actually correct that same group thinking in another direction. Global warming? Really? Show me the hard and fast data. Two years ago everyone was on the organic band wagon.

    A few months of bad economic news, a few thousand points off the Dow, and a few million people out of work later and organic is a dim memory when people look for today's value instead of tomorrows security. Organic was good, when it was good for your own well being and state of mind that said you needed something more healthy. Now we are faced with certainly different circumstances economically and organic is a back burner item at best. Global warming and green thinking is good when put into proper context. The American people, as a whole are not fully convinced that there is any-let me repeat-any global warming. There is no real, hard data to support claims that we need to make wholesale changes in our lifestyles so that we can 'reduce our carbon footprint'. America can not and will not carry the water for the rest of the world, in effect,effort to reduce our
    CO2 emissions so that Third world countries can continue to produce theirs.
    Bull *****.

    Kyoto agreements and Copenhagen meetings aside, Americans ways of life are being actively challenged, and threatened, by misinformed, over educated, under performing politicians who think 'they know best'. I for one am sick to death of the attitude that we must swallow whole the ideas put forth by green activists and politicians who cow tow to the Ecological doom sayers. We are not warming, if anything, we are in a cooling period, that soon will change. The Earth changes and we must change with it, but Global Warming? Green is Good? Come on. Talk about retail, customer service, even the blue blood wine and gin you favor, but  leave the Green crap out. You have no idea on what is right for the global warming ruse, and neither does our President. Leave the left wing politics out of your commentary.

    You should know better.


    Left-wing politics?

    For the record, the approach that I espoused isn’t just being implemented by companies such as Delhaize and Publix, but also by such notorious socialist organizations as...Walmart.

    Oh, wait a minute. Walmart isn’t a socialist organization. If anything, it is a highly conservative company.

    But here is what Walmart knows: If it can save a penny, a nickel, a dime, a quarter or a dollar on energy costs by being a green company, that is money that it can plough back into new stores, heightened marketing efforts, and lower prices that will make it tougher for other companies to compete with it.

    That’s a lesson being learned by a lot of companies, at least in part because they recognize that being green also is giving Walmart an economic and competitive advantage.

    If you don’t think that is a story with relevance to retail, I cannot help you. It may not be what you want to hear, but it is what you need to hear. That’s what we specialize in here on MNB. You want pablum, go visit some of the other sites that specialize in being gently reassuring and non-confrontational.

    Now, you are right about one thing. I believe that man is having an impact on global warming. Not being a scientist, I can only listen to the arguments on both sides - which I do - and try to make a common sense judgment. For me, arguing that spewing crap into the atmosphere has no impact is akin to the so-called scientists who used to argue that smoking wouldn’t affect your lungs. It makes no sense.

    BTW..you are wrong on one other thing - and there can be no debate about the facts on this. While I may drink what you refer to as “blue blood wine,” I don’t drink gin and never have.






    We continue to get very interesting emails about the Aldi shopping experience. One MNB user wrote:

    When I first read the Aldi story ... and giving credit to Aldi for the actions of the cashier, I thought - Ba-Hum-bug.  No way Aldi corporate allows cashiers the ability to right off free product.

    I have very little confidence in the goodness of larger corporations (and governments, but that's off topic).

    However, I have TREMENDOUS confidence in the goodness of individuals.

    Therefore, I would be willing to bet that the cashier acted as she did because she is a good person and either 1. Paid for the bill out of her own pocket, or 2. Let her cash register be short that amount and took the grief associated with it being that short.  Knowing that she did the good and respectable thing.

    Nah ... I'm not a pessimist overall.  I'm optimistic on the good of PEOPLE!


    For the record, I have heard enough stories and talked to enough people over the past few days to convince me that this was not an anomaly. Aldi is creating a customer-focused culture within a company that most people assume is about cheap an cheaper groceries and negligible service.

    MNB user Bob Vereen wrote:

    As a committed Aldi shopper for all our basics, I have been impressed with the attitude of checkout cashiers at the two stores in our area.   They comment with virtually every customer going through the checkout lane, quite unlike the impersonal attitude in most other stores - Kroger, Target, etc.  Walmart cashiers seem somewhat better than those in Target and Kroger, but still not as involved as at Aldi.

    Did you get that? The best cashiers, according to this customer, are at Aldi and Walmart.

    Are you getting the message here?

    Another MNB user wrote:

    Living in the backyard of one retailing giant, we have fewer shopping options. Being a devoted shopper for 15 yrs, I've been blessed to not have what I considered the need to shop at Aldi. The perception I had of Aldi was one that the last few articles has quickly changed my opinion of and convinced me to quickly spend my money there. I am impressed with what I'm hearing and am eager to begin to invest in this company's positive message. I hope others pay attention and this brings Aldi other first-time shoppers.

    This, by the way, is what good word of mouth does for you. It creates customers.




    As opposed to bad word of mouth, which can drive them away. Michael Sansolo wrote yesterday of a New Jersey retailer that was downright hostile to a group of visiting Italian retailers, which he thought sent a terrible message not just to retailers (who spent more than a hundred bucks in the store) but to customers who may have been aware of the hostility.

    That’s what MNB user Andrew Casey seemed to be thinking:

    Another, quite practical reason for being nice to groups is so you don't get negative press in widely read publications like MNB.  But it never ceases to amaze me how many people just don't get that it is just plain easier to be nice to people than rude or indifferent. 

    Another MNB user wrote:

    Great piece!  Very telling about the true culture of an organization.  Also important, I think, is the stark contrast between the expected experience at these two retailers and the reality.  I think that any company should strive to exceed expectations to be successful and while failing to meet expectations can hurt, flat out crushing expectations as in this example can be even more damaging.  I wonder how many of your readers went to the archives to research the company in question…I did before even moving on to the next story!

    Good.



    Finally...

    Yesterday I was taken to task by an MNB reader who objected to a joke I made the day before. The story was about how thousands of cans of Slim Fast were being recalled because of a bacteria that causes vomiting and diarrhea, and I joked that for people using Slim fast, such symptoms could be seen as value-added.

    To which one MNB user responded:

    Your supposed sensitivity disregards the suffering caused by the consumption of these products that may cause diarrhea and vomiting. Your comments may also cause suffering to those who may be using those products in an attempt to deal with obesity or other issues.

    I hope you will make an apology to the entire MNB community and carefully consider the personal impact your remarks in future.


    To be honest, I didn’t apologize...mostly because most of the email I got was from people who found the joke to be genuinely funny, and in part because MNB is designed to be a place of serious levity and the occasional inappropriate/politically incorrect remark.

    Well, one MNB user wasn’t buying:

    I feel people did not respond because fat jokes are one of the last safe harbors from criticism.  We are afraid to come forward and get mocked again for being sensitive about it. 

    Just like the examples of the store employees being examples of the store, your jokes are a reflection of your character.  Your lack of apology today based on a lack of response from the people you hurt is irresponsible.


    I feel bad that you think so.

    To be honest, I never thought of it as a fat joke. I thought of it as a bodily functions joke. And I love a good bodily functions joke. (Campfire scene in “Blazing Saddles,” maybe the funniest scene ever in the movies. My standards may not be high, but they are consistent.)

    BTW...I make no claims for my strength of character. That is for other people to judge.
    KC's View: