retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: December 17, 2009

    Now available on iTunes…

    To listen, click on the “MNB Radio” icon on the left hand side of the home page, Click here.


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

    Yesterday there was a story on MNB about a new set of recommendations issued by a Washington, DC, working group that focused on how the marketing of less-than-nutritious food should be regulated by the federal government.

    I have to be honest. I feel like I’ve seen this story before...too many times. Sometimes it is the federal government, and sometimes it is states and cities looking to regulate this and ban that. I’m okay with some of these initiatives, as long as they promote transparency - people ought to be able to make informed decisions, and let’s face it, some companies aren’t exactly forthcoming about what’s in their products. But once you get beyond that, I draw the line. After all, we ought to be able to make decisions on our own...though I suppose there is an argument to be made that behaviors that affect health care costs, for example, ought to be subject to some sort of legislation because everybody ends up getting penalized for the actions of relatively few. But this is the problem. It’s such a complicated issue that simple solutions aren;t possible...but government keeps reaching for them because in the end, it doesn’t want to treat us like adults. (In fairness, there are a bunch of us who don’t want to act like adults...which is why we subject so many of our children to eating slop at school that barely passes for food, and we squeeze school budgets so that things like gym get eliminated.)

    Ironically, the story about the new recommendations - originally reported by the Wall Street Journal - came out at about the same time as an MNB user forwarded me a BBC story about how the French are coping with the burgeoning obesity problem in that country.

    Unlike the United States, however, the emphasis in France isn’t on bans and regulations, taxes and denial. Rather, they are dealing with the issue in an intelligent, mature fashion - focusing on common sense, moderation and education.

    As the BBC reported, even those most concerned about obesity in France are not throwing out the croissants with the pate. They are highly focused on maintaining the food culture that is so important to that nation, and even believe that this culture will be critical to fighting the obesity problem.

    They concentrate on eating a little less, without losing the variety. They try to cook smarter, cutting back on butter and cream without eliminating it altogether. And they understand that if kids are served balanced meals that taste good - at home and at school - they are more likely to develop healthier eating habits that will serve them for a lifetime. It is a holistic approach that is very much at odds with the scattershot approach we take here in America.

    Now, in a lot of ways none of this is a huge surprise. France being France, it makes sense that they would deal with food issues in a more sophisticated way than most of us in the united States. (And it isn’t like the French have a whole health thing figured out - they still smoke way, way too much.)

    But it is time that more of us adopted the French approach to food, which actually keys in on one statement with profound importance to food retailers: If you want to be a healthier eater, the best place to start is by doing actual cooking in the kitchen.

    Now, there’s a resolution for the New Year.

    For MNB Radio, I’m Kevin Coupe.
    KC's View:

    Published on: December 17, 2009

    Bloomberg reports that the US Senate has killed a bill that would have loosened the restrictions on importing prescription drugs into the US from Canada and other countries.

    Fifty-one of the chamber’s 100 senators voted for the measure, but Senate rules require 60 votes for passage.

    Supporters of the measure maintained that the bill would have given Americans access to drugs that are the equivalent of those sold in the US but cost less; opponents - including the major drug manufacturers - said that the import of such drugs would leave Americans vulnerable to counterfeit medications. In addition, opponents say that the higher cost of US drugs actually fund research and development of new medicines and that allowing drug imports would cut down on R&D efforts.
    KC's View:
    Some folks also argue that if there is meaningful health care reform in this country, we won’t really need to import drugs from other countries as a way of saving money.

    But if one thing seems clear in Washington these days - and there is very little clarity about anything that goes on in the nation’s capital - it is that the health care debate is a mess. At this point, I’m pretty much convinced that whatever gets passed - if indeed anything gets passed - will make the situation worse rather than better.

    Neither side has made the case persuasively, it seems to me. Well, that’s not true. One case has been made very persuasively - that our method of governance seems to get more dysfunctional every day.

    Published on: December 17, 2009

    The Nielsen Company has released new research focusing on what the organization feels will be the dominant consumer spending trends in 2010.

    “Nielsen research reveals that consumers’ fundamental spending adjustments are likely to last in the next year,” writes Todd Hale, Nielsen’s senior vice president of consumer and shopping insights. “Either by choice or necessity, their new-found thriftiness will continue. Almost one third of consumers (30%) say that they will use credit less even when conditions improve with 19% saying that they intend to save more money.”

    The five major consumer trends for 2010, according to Nielsen, will be:

    • Restraint...as “the need to save money, unemployment and other economic issues continue to be top of mind, suggesting that any return to past behavior may take some time—if at all.”

    • Value...which will be a factor for retailers and manufacturers since “a focus on low prices at the expense of all other variables threatens margins.”

    • Private brands...because as retailers cut prices across the store to be more competitive, private brand “unit share growth continues and retailer focus has never been stronger.”

    • Consolidation...as local and regional players, as well as some larger retailers, become targets and/or predators.

    • Assortment wars...as “retailer efforts to simplify the consumer shopping experience by eliminating aisle and shelf clutter will cause market share land grabs for small and medium-sized brands in pursuit of elusive revenue growth. Retailers may lose sales as they shift away from in-store merchandising that drove impulse buying and built shopper baskets. Look for brands caught in the trap of greater store brand focus and assortment optimization to forge alliances with key retailers, enter or step-up efforts as store brand suppliers, and/or explore direct-to-consumer sales.
    KC's View:
    What this all really means, in the broadest sense, is that retailers and manufacturers need to have a narrative when they talk to consumers. This is the wrong time to just throw spaghetti against the wall to see what sticks, which sometimes can be the impulse in tough times of contraction, retrenchment and shifting of habits. Rather, it makes sense to take a moment...to think and act strategically rather than just tactically. That is, I think, the best path to sustained and sustainable success.

    Published on: December 17, 2009

    The National Retail Federation (NRF) is out with a new survey suggesting that people have been delaying their Christmas shopping, reflecting a continuing recessionary mindset even though some economists are saying that the country is slowly emerging from the economic downturn.

    According to NRF’s 2009 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, “the average person had completed 46.7 percent of their holiday shopping by the second week of December, less than the 47.1 percent completed by this time last year. This is the lowest percentage since 2004, when the average person had completed 46.3 percent of their shopping by the same period..” In addition, “nearly 42 million people (19.1%) had not even started their shopping as of late last week, while 8.6 percent of shoppers have completely finished. Adults over 65 years old have completed the most shopping (50.0%) while adults 45-54 year olds have completed the least (44.1%).”

    Other notes from the survey:

    • “With many people shopping for bargains, discount stores (42.0%) and department stores (42.0%) can expect to see the most traffic in the coming days. Grocery stores can also expect to see an increase in last-minute shopping this year (11.5% vs. 8.4% in 2008) as more people consider food or candy as a gift item or head to supermarkets to purchase ingredients for homemade meals. Electronic stores (22.0%), clothing or accessories stores (20.6%), outlet stores (13.6%) and drug stores (7.8%) will also see their share of holiday shoppers before the big day, though a big chunk of procrastinators will also shop online (38.0%).”
     
    • “When asked which payment method they have used the most, nearly four out of ten (39.3%) have used their debit or check cards most often. As expected, fewer people have used credit cards as their preferred payment method this year (30.9% vs. 33.8% in 2008), more than one-quarter (26.0%) have used cash, and a mere 3.8 percent have relied on checks.”
    KC's View:

    Published on: December 17, 2009

    • The Chicago Sun Times reports that Mayor Richard Daley there has “called on aldermen, union leaders and Wal-Mart to broker an agreement that would pave the way for a major Chicago expansion by the world’s largest retailer.” Acknowledging that this is a “political hot potato” in view of union resistance to Walmart’s expansion in the city - there is only one, on the west side - Daley said that the economy has created a climate in which some sort of accord is necessary.
    KC's View:

    Published on: December 17, 2009

    The Santa Monica Daily Press reports that in Los Angeles County, today is being celebrated as “A Day Without a Bag,” with businesses all over the country “encouraging shoppers to make use of reusable bags instead of disposable ones for an entire 24 hours.”

    It is the third year for the event, sponsored by Heal The Bay and observed by retailers that include Albertsons, Ralphs and Banana Republic.

    “The main goal is a public education event so that people choose reusable bags over single-use bags,” Natalie Burdick, constituent development manager for Heal the Bay. “(Plastic bags) that don’t get into the trash get into the storm drain and become a tax burden to clean up; bags that get into the ocean get mixed up with marine life.”
    KC's View:

    Published on: December 17, 2009

    The Boston Globe reports that the attorneys for Albert Gonzalez, the hacker who has pleaded guilty to the largest credit card fraud in US history, are seeking lenient sentencing for their client on the grounds that he has Asperger syndrome, a mild form of autism that made it difficult for him to understand that he was committing a crime.

    Gonzalez was arrested and indicted for the theft of more than 130 million credit card and debit card numbers between late 2006 and early 2008, a scam that affected the computer systems of a wide range of retailers.
    KC's View:

    Published on: December 17, 2009

    The Albany Times Union reports that if Golub Corp.’s Price Chopper is successful in its efforts to acquire 22 P&C supermarkets being auctioned off by bankrupt Penn Traffic, it will bring the chain into more direct competition with Wegmans.

    According to the story, “The two grocery chains together dominate the upstate grocery market, but rarely have they directly competed. That has led to accusations-- strongly denied by both companies-- that they have an agreement not to go head-to-head.Also, Price Chopper already has a handful of stores in the Syracuse area.

    “Most of the stores Price Chopper is trying to acquire are in central New York, in and around Syracuse.”
    KC's View:
    A number of people have commented on this to me over the past day or so, and my response is this. Both Wegmans and Price Chopper are great companies. If they compete more directly, I suspect they will make each other better. Wegmans is an icon, a legendary retailer...but it would be a mistake to underestimate Price Chopper.

    Published on: December 17, 2009

    The Atlanta Journal-Constitution reports that “Kroger and manufacturer Procter & Gamble have come to an impasse and will part ways — in an Internet sense — at the end of the year.According to the story, “it means that Kroger.com will no longer host the P&G eSavers electronic coupons on the grocery chain’s Web site and P&G digital coupons will no longer be valid on the Kroger Plus loyalty card ... Kroger, with 132 grocery stores in Atlanta and surrounding areas, was unable to persuade P&G to keep its coupons on the Kroger site without redirecting shoppers directly to the P&G site. So P&G will discontinue its eSaver program with Kroger after Dec. 31.”
    KC's View:

    Published on: December 17, 2009

    • The Bergen Record reports that the online grocery business done by NetGrocer.com has a highly patriotic tone - with almost a third of its sales during the holiday season being done by people sending products to members of the armed forces serving in places such as Iraq and Afghanistan.
    KC's View:

    Published on: December 17, 2009

    • The Chicago Tribune reports that Sara Lee said yesterday that it plans to reduce the salt in many of its products - including hot dogs, sausages and lunch meats - by 20 percent over the next five years. The company has pledged that the charge will not affect the taste of the reformulated products .
    KC's View:

    Published on: December 17, 2009

    On the subject of the Amazon.com vs. Walmart.com battle, MNB user Jim Fletcher wrote:

    You left out one big consideration I make in using Amazon over Walmart.com, no sales tax.  That can add up to quite a bit depending upon the purchase amount.  Also, my experience with Amazon has been very good.  UPS left an Amazon package at my front door once for me to arrive home to find it not there.  When I contacted Amazon, they refilled my order overnight at no cost to me.

    But MNB user Jon Melior had another take:

    Amazon has a real weak spot: its reliance on third-party vendors. My wife purchased a $300 juicer.  For one reason or another we didn’t get around to opening it for a couple weeks.  It was DOA. Amazon said they wouldn’t take it back because they’re not truly the seller; the other company wouldn’t take it back because they had a 15-day return policy (!).   If I’d purchased it from Walmart.com, I’m fairly certain I would have either a working juicer or a refund.

    Good point. Though I believe that Walmart also has started working with third-party sellers on its site. So the same problems may apply.

    And, from MNB user Deborah J. Maestu:

    Another point to consider, even in economic downturns snobbery continues to exist. Some people just never will set foot/or internet time in a Walmart.  Amazon still has some coolness attached to it which Walmart never has.




    On the subject of Kate McMahon’s piece yesterday about the nexus of social networking and online shopping at work, one MNB user wrote:

    While I certainly agree with Kate’s post on many aspects, when I read that employees will spend up to 2 days this holiday season shopping on line I was a little surprised at that. I work for a retail chain (obviously). I try to be fair with all my teammates. At store level 95% of the employees do not have access to a computer. At corporate level I’d say 95% do have access. So if we go by the stats stated then we can assume that the corporate employees or spending 2 days this holiday season shopping from the comforts of their desk. What if the store level associates wanted equal access to online shopping? That would be extremely difficult to allow. While you write for the retail world, there is a huge difference between the store level and corporate level. What is allowed for one isn’t that easy for the other. At our company social networks at store level are blocked. Corporate level may or may not be I don’t know. I just find it hard to believe so many people justify wasting corporate assets. Don’t really know what the answer is, but I do know that social networks aren’t going any where.

    You say that 95 percent of your in-store employees do not have computer access...but are you factoring in the possibility that they could have smart phones that give them such access without you even knowing about it?

    MNB user Vic Hansen wrote:

    As the world runs out of cheap fuel and people have to work together without being in the same place, social networking will be one of the keys to business survival. All the team spirit and cohesion generated by being together in the office and the coffee machine will still be needed so companies that don’t make use of social networking and collaboration tools will become dysfunctional and unable to compete. It seems an irony that long distance grandparents have discovered this before some of our business leaders.




    We’ve had some discussion here on MNB about the future of newspapers, and MNB user Blake Steen weighed in:

    I’m a 29 year old who does know what a newspaper stand is. However, I choose to walk by it.  Our local newspaper does no in depth reporting or as the gentleman said uncovering.  All the major articles are the AP and are not local.  The only good part is checking local baseball scores.  It is sad to watch an industry dwindle like this one.  My grandparents and parents would not dream of starting a day without reading a newspaper and it baffles them that I read the paper on my Wii game system.  I’m also one of those conservatives that believe the newspaper industry has done itself in with the editorial sections.  I know I know I’m not a Neocon Rush Limbaugh conservative but, I do feel this has had a negative impact on print media.  It is a subject that I like to talk about and I’m glad to see you covering it in your news beat.




    And finally, regarding the naming of former Supervalu COO Mike Jackson as CEO of the National Grocers Association, MNB user Denis Zegar wrote:

    I have known Mike Jackson for many years and have had the pleasure of his service on the Food For All board of directors.  Anyone who knows Mike, can attest to his passion for the independent grocer and knowledge of the grocery business.  I can think of no person better qualified to serve as President & CEO of NGA.  As President & CEO of Food For All, I am looking forward to working with Mike and NGA in furthering our mission of ending hunger worldwide.
    KC's View:

    Published on: December 17, 2009

    Yesterday, in a story about some rebranding and new products development at PepsiCo’s Gatorade unit, it was erroneously reported that Peter Arnell - who engineered the Tropicana rebranding debacle earlier this year - also did the most recent Gatorade rebranding. He did not.

    MNB regrets the error.
    KC's View: