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    Published on: January 13, 2010

    by Kate McMahon

    In a battle of media heavyweights currently being waged on the air waves and online in the New York metropolitan area, score Round One for the foodies.

    While the rest of America kicked off the new decade cooking with Bobby Flay and the Iron Chefs on Food Network TV, some 3.1 million Cablevision households (including mine) in New York, Connecticut and New Jersey have been staring at a blank screen since Jan. 1. Both the Food Network and HGTV were yanked by Scripps Networks in a rate dispute with Cablevision.

    Fans are not happy, with the Food Network aficionados being more vociferous than the HGTV crowd (no surprise). To quote my 18-year-old daughter, couch bound after having four wisdom extracted during her college holiday break, “I could really use my Ace of Cakes right about now.”

    Her lament was tame compared to the complaints and accusations that have been flying across the internet and Facebook pages. And that is where Food Network/HGTV/Scripps has the huge advantage over Cablevision (which is controlled by the Dolan family, owners of Madison Square Garden and the New York Knicks and Rangers).

    Food Network entered the fray with a lively, interactive home page and a Facebook page with 298,434 fans. In addition to TV and radio ads, it was quick to utilize all facets of social media: links for viewers to send “ecards” (200,000 so far) to Cablevision; updates on the negotiations (now stalled); Twitter and Facebook postings from Bobby Flay, Tyler Florence and Sandra Lee, and encouraging fans to start their own protest groups on Facebook. One group has already amassed 32,500 members in 10 days, and five other groups are adding fans by the hour.

    More importantly, Scripps is engaging in a two-way dialogue with viewers on its page, answering direct questions about the negotiations and explaining its position in detail - illustrating vividly how critical it is to engage with one’s consumers via the internet and social networking.

    Not so Cablevision. Of course it’s very easy to loathe your cable provider. But Cablevision’s online response has been woefully lame. Upon accessing the site, you have to search the keyword Food Network to get to a short statement, and then click on a link outlining the cable provider’s stance and another short form to email Scripps CEO Ken Lowe demanding he put the shows back on. Their response is archaic; the result is that Cablevision looks arrogant and disconnected from its customers - which is something no business can afford to be.

    The bottom line is we have two wealthy companies trying to gouge each other, and the consumers will be the ones getting squeezed. And the longer this drags on, the more each player has to lose. In addition to calling for rebates on their bill, many Cablevision viewers are publicly switching to DirectTV or Fios. Wrote one: “I returned my four cable boxes today! There were 25 people there doing the same thing. Loving my Direct TV and saving money.”

    And with each additional day, viewers are starting to vent their frustration at both parties.

    Said one blogger: “Two big greedy companies are holding us hostage by denying us our shows! Stop all the stupid ads and give us back our shows. You can argue while we watch!”

    Which side will fold first? Will frustrated Food Network and HGTV turn to their allegiances to other channels? Will more viewers dump Cablevision for its competitors? How will the use of the internet and social networking affect the debate and its eventual outcome?

    We’ll let you know what happens in Round Two.


    Kate McMahon can be reached via email at kate@morningnewsbeat.com .
    KC's View:

    Published on: January 13, 2010

    Saying the the company’s “promotion and pricing approach has not delivered,” and that the company’s promotions did not connect with shoppers, Christian Haub, the chairman/interim CEO of the Great Atlantic & Pacific Tea Co. (A&P), said yesterday that the company is working to develop a new approach to promotions and pricing.

    Recent approaches "ended up being more noise rather than a clear communication of value," Haub says. "Consequently, consumers were confused and didn't understand what we stood for anymore."

    According to a MarketWatch story, “The grocery chain is working with shareowner Yucaipa Cos. to develop new marketing strategies to lure tight-fisted= consumers. Haub was short on specifics, but did say that A&P is discontinuing several marketing programs and reinvesting those funds into lowering shelf prices on everyday foods. New advertisements also will focus on those lower-priced shelf items.

    “A&P has hired a team of people who helped develop the pricing strategy at Food4Less, which is owned by Kroger Co. Yucaipa is run by Ron Burkle, who has made billions buying and selling supermarket chains over the past two decades.”

    MarketWatch also notes that Haub says that A&P is open to strategic opportunities, though he is vague about whether the company would be a buyer or a seller.

    For details on A&P’s third quarter performance, check out our “Department of Permanent Financial Anxiety,” which under the circumstances seems like an understatement.
    KC's View:
    It is hard to imagine that A&P is in a position to buy anything...in part because its financial position is so lousy, and in part because its last acquisition - Pathmark - hasn’t exactly gone swimmingly. (I said this years ago, and I’ll say it again: Can you imagine worse news than coming to work and finding out that A&P had bought your company?)

    As for selling the company...well, unless somebody sees an opportunity buy a northeastern US company at a bargain basement price - with nowhere to go but up - it is hard to imagine who would want to buy the damned thing.

    This is one of those cases where I hate being harsh. I’ve gotten to know some of the folks at A&P, and I like them. They’re working hard under difficult circumstances.

    But how many times over the past decade have stories been written about A&P launching a new initiative, a new approach to pricing, a new philosophy on promotions? It seems like the story writes itself at this point...and the result always seems to be the same. It’s a nightmare. And there is little evidence that A&P is going to wake up anytime soon.

    Christian Haub, who is a very nice man, says that consumers are confused about what A&P stands for. But here’s my question to A&P:

    Do you know what you stand for?

    Published on: January 13, 2010

    by Michael Sansolo

    Notes and comment from the National Retail Federation’s 99th Annual Convention and EXPO...

    NEW YORK - While technology is the focus, the biggest question at the National Retail Federation (NRF) show had everything to do with mood. That is: are companies optimistic and will that optimism turn into technology purchases that provide a signal of economic recovery? The answer seems to be yes.

    A number of technology consultants working the floor said they were hearing good signs of business activity in sharp contrast to the mood of the past two NRF shows. The consensus was that companies believe some level of growth is about to return and that technology purchases are on the top of the list as companies look for ways to maximize efficiency. In addition, many said the show seems busier and more active than it had been in the past two years.

    Interestingly, the mood spread outside the convention center. Local New York news radio formats ran repeated updates on the show and talked widely about the somewhat upbeat mood. Like the consultants, the radio reports focused on a general consensus that technology investments should be on the rise in 2010, without any specific areas getting the emphasis.

    Time will tell…

    Other news from the NRF Show...

    • Sir Terry Leahy, CEO of Tesco PLC, said yesterday at the NRF convention that the success of e-commerce initiatives are best measured in how they affect the shopping experience, saying that “success or failure is not dependent on systems, but what they do for our customers.” He urged retailers to maintain a personal touch in their internet efforts, suggesting that by putting too much of an emphasis on technology, companies run the risk of actually becoming disengaged from consumer needs.

    The speech actually continued a theme sounded earlier in the conference, when it was suggested by marketing expert Paco Underhill that the most effective retailers integrate the online and brick-and-mortar shopping experiences, making them consistent, rather than dissonant, in terms of prices, policies, and strategic approach.

    • NRF is out with its annual Customers Choice survey, co-sponsored by American Express, and last year’s top four retailers - rated for their customer service - once again are in those positions.

    LL Bean earned the top spot for the third year in a row, followed by Overstock.com in second place, Zappos.com in number three, and Amazon.com (which recently acquired Zappos) in the fourth position.

    QVC, which was eight in last year’s survey, moved up to number five, followed by Coldwater Creek, HSN, Lands’ End, JC Penney, and, tied for tenth, Nordstrom and Kohl’s.

    “With competition as its peak in 2009, retailers this past year made sure to focus on excellent customer service all year long,” said NRF Foundation Vice President Kathy Mance. “Any company who secured a spot on the list this year should congratulate themselves and their employees for a job well done.” The awards were announced at NRF’s Annual Retail Industry Luncheon.
    KC's View:

    Published on: January 13, 2010

    The Wall Street Journal reports that Supervalu CEO Craig Herkert told analysts yesterday that the company plans to edit the grocery selection in its stores, in some cases by as much as 25 percent, with a focus on reducing package sizes rather than entire brands or lines of products.

    "I don't think the consumer will say we took any choices away, but the consumer will look and say we have better choices," Herkert said in the conference call.

    However, Herkert also said that the company plans to use the strategy to drive supplier costs lower, and will look to do a better job featuring private brands that give the company higher margins.
    KC's View:

    Published on: January 13, 2010

    • The Wall Street Journal reports that nascent e-tailer Alice.com is introducing a new service “providing merchandising, checkout and shipping services for companies that want to sell products through their own Web sites.” According to the story, “Companies are accelerating their investments in Internet selling because it provides direct access to consumer data, a gold mine that has long been controlled by retailers. With retailers aggressively developing and promoting private-label products that compete with brand names, getting first hand information about shopping habits has become even more important to manufacturers.”
    KC's View:
    Can you say “disintermediation”? Because it sounds like that’s what happening here...with manufacturers ranging from Procter & Gamble to General Mills looking at such services as a way of reaching out directly to their consumers, controlling more of the supply chain and gaining a greater amount of intelligence.

    Published on: January 13, 2010

    BusinessInsider.com reports that Walmart is in “meaningful” negotiations to acquire Vudu, an internet video-on-demand business, a deal that would it allow to compete more effectively with Apple’s iTunes business.
    KC's View:

    Published on: January 13, 2010

    • The Chicago Tribune reports that Walgreen is rolling out a new initiative called Walgreens Optimal Wellness that “will involve pharmacists working as coaches to consult with and educate customers with Type 2 diabetes on how to manage their disease.”

    The program is being tested in Phoenix, Oklahoma City and Albuquerque, N.M., with a goal of a national roll out. Walgreen also reportedly wants to add to consultations for other chronic diseases.
    KC's View:

    Published on: January 13, 2010

    • Supervalu announced that its third quarter revenue decreased 9.5 percent to $9.2 billion as same-store sales fell 6.5 percent. However, the company did manage to reverse last year’s third quarter loss of $2.9 billion, reporting a Q3 profit of $109 million.

    • The Great Atlantic & Pacific Tea Co. (A&P) reports a third quarter loss of $559.6 million, a dramatic fall from the loss of $14.4 million during the same period a year ago. Q3 sales were down 7.5 percent to $1.96 billion, on same-store sales that were off 5.8 percent.
    KC's View:

    Published on: January 13, 2010

    • Supervalu announced that Chuck Elias, a former Home Depot executive, has been hired as the company’s new group vice president of strategy planning.

    • Dollar General announced yesterday that David Bere, its president/chief strategy officer, will retire at the end of the month. Rick Dreiling, the company’s chairman/CEO, plans to absorb Bere’s responsibilities.

    • Sears Holding Corp. announced that it has hired James Haworth, formerly COO at Walmart and executive vice president of operations for Sam’s Club, to be its new president of retail services. Haworth most recently was chairman/president/CEO of Chia Tai Enterprises International, owner of the Lotus Supercenter chain in China.
    KC's View:

    Published on: January 13, 2010

    The Wall Street Journal reports on the passing of Theodore Papes, who died late last week at age 81. Papes, the story notes, was primarily responsible for the development of Prodigy Services, a joint venture between IBM and Sears, that was a pioneer in the online services business - including shopping - that was launched in 1984.
    KC's View:

    Published on: January 13, 2010

    Yesterday, MNB took note of a study by Loyola University in Chicago suggesting that since a single Walmart opened within the city limits, 82 businesses within a four-mile radius have closed down and almost 300 jobs have been lost - almost as many as have been created by the Walmart.

    MNB user Elizabeth Archered wrote:

    I'm not a major fan of Walmart, though I am grateful that they singlehandedly brought down the price of over 400 generic drugs.

    But regarding that Loyola study, there was a global economic near-collapse since Walmart opened in Chicago. Did the study compare the recent experience against any research about how many small businesses normally close in a similar time period, or during a recession, in that area?

    I just hope we can resist blaming them for everything that happens in their vicinity.


    A similar point was made by MNB user Christine Myres:

    Could the loss of business & jobs since Walmart opened in Chicago be due to the recession and not to the opening of Walmart? Just a thought. What were those businesses? What type of employees did they have, with what skills?

    Excellent point. Those closings and those layoffs might have happened anyway.




    We continue to get email about the Publix calendar controversy.

    As noted in MNB earlier this week, Publix has decided to withdraw a free 2010 calendar that it has been circulating because of criticisms from a Miami talk show host who had been publicizing the fact that the calendar did not identify December 7 as Pearl Harbor Day and did identify that day in 2010 as the beginning of the Islamic New Year. The suggestion by the talk show host was that Publix was somehow being un-American...though in past years, the free Publix calendar never identified December 7 as Pearl Harbor Day. And it is a coincidence that in 2010, December 7 happens to be the beginning of the Islamic New Year.

    I was, to put it mildly, disgusted by the implications made by the radio host, and said that “what is really offensive is that some radio talk show host with no apparent moral scruples decides to generate some ratings not just by demonizing Muslims, but demonizing a supermarket chain by implying it had done something that was somehow un-American.” And, I wrote:

    You could make the argument that, considering that there is a growing Muslim minority in the US and that most of us simply are unfamiliar with their beliefs and observances, noting on a calendar when the Islamic New Year begins actually isn’t a dumb thing to do.

    And you could make the argument that it’d be nice to remind people when Pearl Harbor Day is, especially since the younger generation may have less familiarity than we’d like with such historic events. (Though I’m guessing that there are very few such young people who use paper calendars - they’re using their computers and cell phones. But that’s a different debate.)

    My point isn’t to take either side of this argument...but just to say that the tenor of the accusations leveled by the talk show host, best I can tell from the coverage, drove the discussion to the lowest common denominator. There could have been an interesting discussion about whether we do not pay enough attention to our history. We could talk about how the growing minorities in America and the challenges they present in terms of acculturation and assimilation.

    But no. Those kinds of discussions don’t generate ratings. It is easier to level accusations and stoke people’s anger.

    It is irresponsible.


    MNB user Gary Narberes responded:

    After reading your "your views" on the Publix calendar debacle I decided to check my "free" calendar from St Jude's Hospital and guess what...Dec 7th is listed as the Islamic New Year (approximate).  Thanks for opening my eyes!

    Another MNB user wrote:

    Now, I don’t have a Publix where I live, but if the grocery store I shop at was caught up in this calendar debate, it wouldn’t make me not continue to shop there.  C’mon, it’s a calendar!  A calendar isn’t going to generate new shoppers, and I certainly hope people wouldn’t find a new store to shop at because of this.  It would be different if in year’s past the calendar had Pearl Harbor Day and it was simply removed, then the question would be why was it removed?  I could see this upsetting veterans or veteran’s families.  The thing is, the reference to Pearl Harbor was never there to begin with and nobody noticed until now.  A calendar isn’t what makes Publix shoppers shop at Publix.  Publix should ignore this distraction and focus on the things to enhance consumers shopping experience, because isn’t that what will keep consumers going back to Publix?

    The problem, of course, is that it is almost impossible for Publix to ignore the controversy. And it is hard to fire back at people like this talk show host, in part because you don’t want to alienate shoppers and in part because it almost never makes sense to get into an argument with someone who controls the microphone.

    On the other hand, that’s why I’m going out of my way to publicize this situation. My only dog in this fight is basic human decency...a concept with which I suspect this talk show host may have only passing and opportunistic familiarity. And besides, I have a microphone, too.

    One MNB user yesterday said that I was wrong to call out the talk show host because it was Muslims who bombed the World Trade Center. Which led MNB user Stephanie Steiner to respond:

    People committed to Muslim faith didn’t bomb the WTC.  People committed to EXTREMIST behavior bombed the WTC.

    You were spot-on in calling the radio host a bully on this one, don’t back off.





    Responding to Michael Sansolo’s column yesterday about what he saw as contradictory behavior - people who object to full body scans at airports then are willing to provide all sorts of personal information on Facebook.

    Which led one MNB user to write:

    It's neither contradictory nor ironic - but an issue of control.  When I publish information about myself, it is my choice.  When someone reveals things about me, maybe the same things I would voluntarily post - that is not my choice and not under my control.  Remember when Kevin was reporting about RFID chips?  He was at a meeting and when he walked into the room wearing his RFID chip, his name appeared on the screen at the front of the room.  Kevin was uncomfortable with that - despite the fact that the same information was on the nametag he was wearing.  The difference who controls the information flow.

    Was I uncomfortable? It seems so long ago...

    I’m with James Carville when it comes to full body scans. I can’t repeat precisely what he said about all the things they said they could measure and check in airports...but you can Google it.

    MNB user Jackie Lembke wrote:

    So somewhat off the main subject, but does the full body scan at airports mean BlueFly.com was ahead of the curve with their commercials of a naked woman walking through the airport?

    I wasn’t familiar with those commercials, so I checked them out...and they actually are pretty funny. Check them out on YouTube.com.

    We’re not to that point yet. But you never know.




    Finally, a week ago, after I exulted over the NY Jets win over the Cincinnati Bengals that propelled them into the playoffs and another face-off with the Bengals, we posted the following email from MNB user Bill Welch:

    Your Jets made the playoffs because two teams (Colts and Bengals) laid down.  They are a two and a half point underdog this week in Cincinnati.  The smart money knows they are one and done.

    Well, as we all know....not so much. The Jets, against the odds, defeated the Bengals convincingly a second time, and now move onto the second round of playoffs (they play the San Diego Chargers this weekend).

    And give Bill Welch credit...because he wrote back:

    Their entrance into the playoffs may have been the result of a couple fortuitous events but they have demonstrated that they belong.  I am a believer.  Let me join in J - E - T - S Jets, Jets, Jets!

    Your graciousness is appreciated.

    Hey, I never knock fortuitous events. If you’re lucky, life and work are full of them.
    KC's View: