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    Published on: December 14, 2009

    The Des Moines Register reports that Randy Edeker, Hy-Vee’s executive vice president, has been promoted to be president of the 228-store chain.

    In taking on the job, Edeker becomes just the fourth person in Hy-Vee’s 80-year history to hold the title; Ric Jurgens, who has been serving as chairman/president/CEO of Hy-Vee, will retain the other two titles and focus on more strategic issues. He called Edeker “a strong leader we can count on to lead with confidence and vision as we move to the future."

    According to the story, “Hy-Vee spokeswoman Ruth Comer said the promotion makes Edeker head of all of Hy-Vee's retail operations by adding oversight of the company's drugstores and Midwest Heritage Bank to his previous supermarket responsibilities. Edeker will also be in charge of store design, marketing, advertising and communications.”
    KC's View:
    The one thing that can be pretty much guaranteed at Hy-Vee is that there will be an orderly transition even as the next generation of leadership moves into place. The interesting thing to watch will be how this next generation changes the company, even as they maintain fealty to its traditional values.

    Published on: December 14, 2009

    The Boston Globe reports that 57-store Big Y Supermarkets plans to begin a voluntary layoff program, though it is not saying what its goals are, nor if it will begin involuntary layoffs if there aren’t enough volunteers.

    According to a statement released by the company, the layoffs are designed to compensate for challenging economic times; Big Y said that they will keep the company financially healthy, and that those who are laid off could be rehired when the economy rebounds.
    KC's View:
    Just when you think - or hope - that we’ve turned a corner when it comes to employment and economic issues, stories like this one reminds us all that the morass is deep and the getting out won’t be fast or easy.

    Published on: December 14, 2009

    The Oregonian reports that New Seasons Market CEO Brian Rohter will retire from that job in January 2010, and will be succeeded by the company’s president, Lisa Sedlar.

    Rohter will become the company’s chairman of the board.

    New Seasons also announced that Endeavour Capital, a Portland, Oregon-based private capital firm, has invested in the retailer and will help it “figure out a way to have the ownership of the company more broadly-based,” with a focus on employee ownership.

    On his blog, Rohter wrote, “I want to emphasize that the company is not being sold. For the past four or five years, there’s barely been a week that we haven’t received a phone call or letter from some private equity firm trying to buy us. We’ve never even returned a phone call because our commitment to being a mission driven, locally-owned company has never wavered.”
    KC's View:
    One of the best observations about New Seasons Market, it seems to me, is that if you didn’t know anything about the ownership structure, you easily might assume that it already has employee ownership. Because that’s how they act. That seems to be how they feel. And it pays real dividends in terms of the culture that can be seen there.

    Published on: December 14, 2009

    The Los Angeles Times has a piece about thrift in America, noting that “hit hard by job losses, strapped with debt or just plain weary of shopping for shopping's sake, millions of Americans ... are changing their free-spending ways.

    “The brutal economic downturn has battered stock portfolios and home values and made easy credit tough to come by. Even Wall Street tycoons are consuming less conspicuously. In short: Frugal is back in fashion.”

    The Times continues: “For economists, the shift is chronicled through reams of data that track indicators such as consumer debt and same-store sales. The national savings rate, for example, which lingered around 1% in 2008, has soared to 4.4%. Sales of ‘apparel and notions’ have fallen 13.7% since January. Consumers are even spending less at the grocery store, according to the U.S. Census Bureau.

    “All the data tell the same story. People who spent every dime of their disposable income two years ago are now saving and paying down billions in debt ... they've shifted from shopping at luxury stores to buying from discounters. They're scrimping with more vigor and tenacity than economists have seen in decades.”

    At the same timeBrandWeek reports that the Deloitte Consumer Spending Index in November hit its highest level since 2004, suggesting, according to Deloitte’s chief economist Carl Steidtmann, that “consumers have the means to spend at a significantly higher level than they are currently spending at . . . Cash flow, and the factors that affect cash flow, have improved and continue to improve.”

    However, Steidtmann added, ““I think consumers are still quite shell-shocked. There’s also a very high level of uncertainty about a host of different factors from healthcare, to energy, to the stability of the banks that are all undermining people’s confidence.” This is reflected in the Deloitte Holiday Shopping Index, which suggests that consumers will continue to be reticent in their shopping habits.
    KC's View:
    Regarding the expectations raised by the Deloitte Consumer Spending Index...can I get an “Amen”?

    Published on: December 14, 2009

    Accenture Ltd. announced over the weekend that it has ended its relationship with embattled golfer Tiger Woods, and will shift to a new marketing campaign immediately.

    Woods, arguably the most successful celebrity pitchman since Michael Jordan, has seen his marketability challenged in recent weeks by charges of marital infidelities. While he has not been seen in public in weeks, Woods confirmed on his website that he had cheated on his wife and said that he would take an indefinite leave from playing golf.

    Accenture’s Woods-related ads focused on the golfer’s ability to focus, perform and behave with integrity - all attributes that it said it shared with the athlete.

    Under the circumstances, Accenture said in its statement, “after careful consideration and analysis, the company has determined that he is no longer the right representative for its advertising.”
    KC's View:
    Best headline I’ve seen for this story was in Fast Company: “Death of a Salesman.”

    One of the most interesting things about this story, I think, is how few known facts there are.

    We know that Tiger and his wife were involved in some sort of incident, but we don’t know the facts of what happened. We know that there were infidelities (only because he admitted it last week), but despite all the claims, we really don’t know how many or why.

    Mostly, we know that we’re watching a kind of professional conflagration. But we really don’t know much else.

    One other quick note here.

    Last week, in a story about Tiger Woods, I commented that it seemed inevitable that sponsors would begin moving away from the golfer, and wrote:

    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.

    I’m a moron. And my head ought to be on a pike for part of that statement.

    After all, it isn’t just men who sit in CEO offices. In fact, one of Woods’ sponsors in Gatorade, which is owned by PepsiCo, which has Indra Nooyi as CEO.

    I live with two smart, independent women, who take great exception to my original statement. And I got a number of emails from MNB readers who used a variety of adjectives to describe what I said.

    Mea culpa, mea culpa, mea maxima culpa.

    Published on: December 14, 2009

    New research from the Food Marketing Institute (FMI) Private Brands Group offers the following findings:

    • “Thirty-seven percent of Hispanic shoppers are purchasing more private brand products this year and 25 percent plan to buy more in 2010.”

    • “More than seven in 10 Hispanics (73 percent) agree that ‘store brands are a great value for the money,’ including over half (52 percent) who ‘strongly agree.’ Nearly as many (64 percent) agree that ‘store brands are just as good as national or international brands,’ with more than four in 10 (42 percent) holding this view strongly.”

    • “Household income does not affect the amount spent. In fact, Hispanics earning $50,000 or more per year spend the most at $92.67. Retailers that offer multiple tiers of products, from basic to premium, can effectively market private brands to Hispanics at all income levels, according to the research.”

    • “Youngest shoppers, 18-24, spend more than any other age group at $99.41 every two weeks. In addition, 42 percent of Hispanics entering their prime earning years, 25-39, have increased spending on these products this year.”
    KC's View:

    Published on: December 14, 2009

    Cadbury has formally spurned the $16.9 billion acquisition bid by Kraft Foods, calling it “derisory” and saying that any offer for the company should be much higher.

    In a message to Cadbury shareholders, the company’s CEO, Roger Carr, said, “Kraft is trying to buy Cadbury on the cheap to provide much needed growth to their unattractive low-growth conglomerate business model. Don’t let Kraft steal your company with its derisory offer.”

    Executives at the British chocolate manufacturer refused to say if they are considering competing bids from other companies, such as Hershey.

    Kraft has a month to convince Cadbury shareholders to support its offer, and the company is expected to be aggressive in making that case.
    KC's View:

    Published on: December 14, 2009

    • CVS Caremark announced that Lisa Bisaccia, the company’s vice president of human resources, has been promoted to senior vice president/chief human resources officer, effective January 1. She succeeds the retiring Mike Ferdinandi.

    • Robert Aiken, the president/CEO of US Foodservice, reportedly has resigned from the company to join a private equity firm, Bolder Capital LLC. According to Crain’s Chicago Business, Aiken - who is credited with turning around the then -hold-owned food distributor after an accounting scandal rocked the company in 2003 - will remain as CEO while a successor is sought.

    • Unilever announced that its CFO, Jim Lawrence, has resigned from the board to pursue new opportunities. A successor is expected to be named shortly.
    KC's View:

    Published on: December 14, 2009

    • Costco said last Friday that it will resume carrying Coca-Cola products, resolving a pricing dispute that began last month.

    However, the retailer offered no details about the argument.

    • There was a story from the Associated Press over the weekend that appeared in a number of media outlets charging that Monsanto Co. has been engaging in anti-competitive behavior in the genetic engineering business, which could increase the price of food since Monsanto’s patented genes are “inserted into roughly 95 percent of all soybeans and 80 percent of all corn grown in the U.S.”

    The story suggested that Monsanto is using its dominance and influence to control the access its competitors have to the marketplace - practices that are at the heart not just of civil suits filed against the company, but also of both federal and state investigations into the company.

    Monsanto CEO Hugh Grant has been quoted as saying that the investigation and attention are “the result of the fact that we have grown quickly and have been very successful."

    • Procter & Gamble (P&G) has reached an agreement to acquire Sara Lee’s European air freshener business for $470 million (US). The deal is expected to close during the current fiscal year.

    • The New Jersey State Senate last week approved a bill that would require restaurant chains with 20 or more units in the state to post calorie counts on their menus and menu boards - a bill that is similar to laws that currently exist in New York City and Philadelphia.

    The bill now goes to the General Assembly for further consideration.
    KC's View:

    Published on: December 14, 2009

    Paul Samuelson, the first Nobel laureate in economics from the United States and a renowned professor at the Massachusetts Institute of Technology (MIT), died yesterday at age 94.

    According to the New York Times obituary, Samuelson “was credited with transforming his discipline from one that ruminates about economic issues to one that solves problems, answering questions about cause and effect with mathematical rigor and clarity.”
    KC's View:

    Published on: December 14, 2009

    We had a story last week about an argument taking place in Massachusetts, where residents in one community are concerned about Supervalu opening a Save-A-Lot store almost adjacent to one of its Shaw’s stores - worried, apparently, that the Shaw’s store will be put out of business by the lower priced competitor.

    MNB user Rosemary Fifield responded:

    I smiled when I read this. In our area, a Shaw's and a Purity Supreme grocery store were located across the street from each other, each in its own small shopping plaza. When Shaw's purchased Purity Supreme (10 years ago?), we wondered what they would do with that particular store. What they did was convert it to another Shaw's. Since then, the two Shaw's Supermarkets -- one medium-sized, one large -- have co-existed within a stone's throw of one another, each one in a shopping plaza with its own mix of stores. Seems to work for them.

    Another MNB user wrote:

    Regarding Supervalu possibly competing against itself in New Haven by opening a Save-a-Lot close to Shaw's: you report in your column that Supervalu's argument why the local (independent?) grocer shouldn't fear the Save-a-Lot market entry is because their own Shaw's unit isn't expected to be materially affected; all due to meaningful differences in typical customer types between Save-a-Lot & Shaw's.  And so, similarly, presumably so between Save-a-Lot and the local operator.  You comment that perhaps Supervalu really doesn't believe their own public argument -- that neither Shaw's nor the local operator has much if anything to fear from Save-a-Lot entering the market -- because privately, they may be planning to sell off the Shaw's division anyway, so who cares what happens to a Shaw's store in the meantime?

    If I were Supervalu here, publicly and privately both, I don't think I would take such a scorched earth stance in relation to the Shaw's store, if I really believed a Save-a-Lot would inflict a significant amount of pain to my Shaw's store; regardless of whether I intended to dump the Shaw's banner or not.  Even if in my private heart of hearts, I was planning to sell off the Shaw's business, why would I purposely go & degrade the value of one of its units by opening a significant threat to it right down the street?  Wouldn't that simply lower the realizable value I could get for Shaw's, come disposal time?  I think it would make more sense, if I was intent on disposing of the Shaw's division, to try & get that done first, and only then turn seriously to the business of trying to get this Save-a-Lot permitted into the New Haven market.  (Because, once Shaw's isn't mine anymore, THEN I can truly not care if I hurt it or not.)

    What all this says to me is that, by seeming to go straight ahead & seek permitting approval for Save-a-Lot while still owning the Shaw's banner, Supervalu is telegraphing their true inner beliefs here: they must actually not believe that Save-a-Lot -- in this particular case, at any rate -- does represent a material threat to Shaw's business, and so by extension, maybe it really is rather plausible that Save-a-Lot would not represent such a deadly threat to the local independent either.  I can't see Supervalu acting contrary to its own broader interests by publicly saying there's no real threat, if they felt differently in private, if in fact they were planning on possibly selling off the Shaw's division is short order, now with this one impaired unit in the basket.







    And another MNB user chimed in:

    All I can say is that our local Save A Lot sits right next door to our local IGA grocery, uptown the local family-owned grocery store is still in business as well, and they have all been operating for over 15 years in this particular constellation.  This in a rural Indiana community that boasts all of 22,000 in population for the entire county.  I would hope that New Haven, and the various grocery stores, can manage to survive.




    General Mills said last week that it will reduce the sugar in its kids’ cereals. MNB user Mark Boyer has what he thinks is the real explanation:

    Smart move. Have you seen the price of sugar lately? It went from low 30's to high 40's over the past couple months.

    But another MNB user had a different take:

    There is a great opportunity for marketers willing to stick to the strategy of great taste and not follow PC marketers.  I mean, c'mon, anyone eating Fruit Loops or Lucky Charms is after taste, right?  My son complained to me this morning about his Apple Jacks.  He said they didn't taste quite as good and he noticed that they added fiber.  My son has a 10% body fat and is captain of his high school basketball team;  he is the picture of health.  The added fiber will make no difference to him except that he will probably choose another brand.  Will the added fiber make any difference to inactive, obese children?  I guess time will tell, but they will probably switch, too.  My guess is GM will kiss their market share goodbye and make no difference in health outcomes.  Sounds like a lose-lose.




    I wrote last week about what struck me as the odd decision by the Miami Herald to try to get people to take out subscriptions by giving away blankets to attendees at a Miami Dolphins-New England Patriots game in South Florida. I wrote that I’m not sure I’d build a promotion on the hope that South Florida residents occasionally might get cold while reading an actual print newspaper: It always is tempting ... reassuring, really ... to fall back on old world methods to reach an old world audience with old world products. After all, when you venture into the new world, there always is the worry that you’re going to fall off.

    MNB reader Bob Niedt - who happens to be an excellent newspaper correspondent, had trouble with my characterization:

    Man, Kevin, stick the knife in and twist it a little!

    Some news organizations, such as ours, are working our tails off to find the next dimension. I get that this is all your opinion, but lately, you have been really running newspapers down. I get it. You get it. The poor woman hawking the subscriptions probably doesn't even work for the Miami Herald, but is a vendor working on commission. I might've goofed on her, too, but you were brutal, to her, and again to those of us trying to make sure we're not still making typewriters as Apple Computer is born... Without a free and independent press, whatever form it may take, our country will be torn apart by bias Twitterers and bloggers who ! call themselves "journalists."


    To be clear, I was really nice to the woman at the ballgame. I would never be mean to someone in such a circumstance.

    You’re probably right that I’ve been negative on newspapers lately... I love newspapers, but I think the industry needs tough love. And tough love means facing facts about the eventual obsoleteness of print and paper.

    But I am guardedly optimistic about the future of journalism, even if I can fairly be accused of being a Tweeter and blogger.

    MNB fave Glen Terbeek wrote:

    Did they offer the Dolphin blankets to current, long term subscribers as well as a thank you for their business?

    Good point. We all tend to treat new customers better than the people who have made us successful. Which never has made sense.




    We had a story last week about Wisconsin’s Metcalfe’s Markets, which recently hired an executive chef who is acting like a Chief Food Officer...a role that more food stores ought to have.

    Which led MNB user Clayton R. Hoerauf to write:

    Once again, kudos to the supermarket guru! The only reason I knew this market existed is because it happened to be within eyesight of the big hole in the ground that was going to be the new Whole foods in Madison. It never dawned on me that I should stop and look around. Looks like grocery shopping in Madison is on the weekend agenda! Thanks for the tip. Keep up the great work.

    You’re welcome. And thanks.

    But for the record, the “supermarket guru” is the other guy.

    I’m the Content Guy.




    Regarding Tiger Woods, one MNB user wrote:

    Gatorade and others like Buick or Nike may drop him, but it’s a marketing opportunity for Viagra and Cialis!




    Reflecting on the tenor of some of the discussion here lately, MNB user Jeff Gartner wrote:

    Without a doubt, my favorite part of your daily column is the closing Your Views section. I especially like the ones who vehemently disagree with you and attribute your comments to a political agenda or mortal character flaws.

    Reflecting on the the tone of some of these correspondents, too many now seem just so wound (that's wound as rhyming with sound or round) so tightly. They look for political innuendo or character assassination or subliminal agendas where none are intended. Everything is too black and white for them. It wouldn't surprise me if I soon read that you're also going to eternal damnation.

    They really need to lighten up. (But please note, "lightening up" doesn't give one permission to start incorporating happy smiley faces in their correspondence. As marketing professionals, we do have our limits.)


    MNB user Ron Cook wrote:

    In our current atmosphere ...As a white male with a Catholic Christian background,,, you are as much a victim of the poor taste/discriminated against jokes as any. I would contend that a person in your demographic is the last pain free bastion for all comedians and "crackpots" the world over. The only way it could be worse is if you are Sarah Palin at a SNL convention.

    As you carry on you blog remember that many of us enjoy the wit and perspective of your observations concerning retail news and the observation of social rest or unrest as it may be. I expect none of us agree with all your opinions ... but that does not take away from the fact you're the kind of person most would enjoy a conversation and drink with.


    Thanks. I would enjoy the same thing.



    And finally, this email from one MNB user:

    Maybe you are in the wrong business .... get paid for your sense of humor. Jay Leno's show last night (12/10/09) used your Slim Fast joke!
    KC's View:

    Published on: December 14, 2009

    In Week Fourteen of the National Football League...

    New Orleans 26
    Atlanta 23

    Seattle 7
    Houston 34

    Buffalo 16
    Kansas City 10

    Cincinnati 10
    Minnesota 30

    Miami 14
    Jacksonville 10

    Denver 16
    Indianapolis 28

    Carolina 10
    New England 20

    Detroit 3
    Baltimore 48

    NY Jets 26
    Tampa Bay 3

    Green Bay 21
    Chicago 14

    St. Louis 7
    Tennessee 47

    San Diego 20
    Dallas 17

    Washington 34
    Oakland 13

    Philadelphia 45
    NY Giants 38
    KC's View: