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    Published on: January 25, 2010

    Walmart announced yesterday that it will eliminate nine percent of its Sam’s Club workforce in the US, cutting more than 11,000 jobs. The majority of the cuts come from the elimination of the company’s product sampling division, as Sam’s will outsource the function to the Shopper Events marketing company.

    Employees were informed of the changes at mandatory Sunday morning meetings, according to MSNBC. They were told that they could apply for jobs that will now be created at Shopper Events.

    In addition, Sam’s plans to eliminate business membership representative positions - about two per store - that were relatively new in the chain.

    Earlier this month, the company had announced the closure of 10 unprofitable Sam’s Clubs, which resulted in the elimination of 1,500 jobs.
    KC's View:
    One has to assume - or at least hope, for Walmart’s sake - that this is not merely an efficiency move. It always gets dangerous when effectiveness is sacrificed at the altar of the almighty profit margin...but the guess here is that Walmart is not making that kind of mistake.

    Published on: January 25, 2010

    The Los Angeles Times has a fascinating story about the backlash that can occur when a retailer markets to the UA Muslim community.

    Case in point: Best Buy, which recently included the greeting "Happy Eid al-Adha” in a recent flyer, recognizing an important religious holiday celebrated by Muslims. While members of that community felt that the reference was inclusive and respectful, it was not a unanimous reaction.

    The Times writes, “On Best Buy's website, people around the country posted contrasting views. ‘You insult all of the heros and innocent who died 911 by celebrating a holiday of the religion that said to destroy them!’ wrote one. Many others said they would no longer shop at Best Buy.

    “The controversy underscores the continuing obstacles that retailers and other companies face in marketing to a U.S. Muslim population estimated at more than 2.3 million by the Pew Research Center.”

    And, the Times adds, “Since the Sept. 11, 2001, attacks and with more recent incidents, such as the Ft. Hood shooting and attempted Christmas Day plane bombing, the word ‘Muslim’ for some Americans is synonymous with terrorism. And that's an image that corporations don't want attached to their brand names.

    “A recent study by the Pew Forum on Religion and Public Life found that 35% of Americans have a negative view of Muslims and 45% believe Islam is more likely than other religions to encourage violence.”
    KC's View:
    This story is particularly interesting in view of the recent controversy when Publix handed out a free calendar to its shoppers that noted that December 7, 2010, is the beginning of the Islamic New Year...and did not note that it also is Pearl Harbor Day. A Florida radio talk show host decided to make a big deal of this, essentially accusing Publix of being un-American and consorting with our enemies...and managed to stoke enough hatred and bile among her listeners that they forced Publix to withdraw the calendar from circulation.

    What is un-American, in my view, is this kind of intolerance.

    It is both sensible and inclusive for companies to reach out to ethnic and religious demographics, especially those, like the Muslim community, that is growing in numbers. They’re customers, too.

    More to the point, it was not the Muslim community that perpetrated the attacks of 9-11. It was terrorists who happened to be Muslim. It was terrorists who, best I can tell, have a perverted view of Islam.

    There’s a big difference.

    Best Buy and Publix ought to be lauded for being aggressive in their recognition of the Muslim community, not targeted by hate-mongers.

    Published on: January 25, 2010

    The Richmond Times Dispatch has an interesting piece about the impending closure of the sale of 25 Ukrop’s stores in Virginia to Ahold, which it suggests will eventually lead to Ukrop’s looking a lot more like a Martin’s Food Market, the 26-store chain that Ahold’s Giant-Carlisle division operates.

    Among the expected changes - the Ukrop’s banner could be converted to Martin’s, and the stores are likely to feature self-service checkout lanes as well as alcohol sales - neither of which have been part of the Ukrop’s culture. And, it is expected that one of the first changes that to be made will be the opening of Ukrop’s on Sundays...which under family ownership has been a day of rest for the chain.
    KC's View:
    At least according to the Times Dispatch, change won’t necessarily be a bad thing. For example, “Shoppers at the Waynesboro Martin's may smell the aroma of doughnuts being freshly made in the store bakery. That doesn't happen anymore at Ukrop's stores. The chain's baked goods are made at a central location and shipped to stores daily.

    That’s an interesting observation.

    If one had to guess which of two companies would feature the aroma of fresh doughnuts - Ukrop’s or an Ahold-owned store - I’m reasonably sure that most people would guess Ukrop’s. And yet, that seems not to be the case.

    This could explain at least one of the reasons that Ukrop’s saw its fortunes declining. Maybe the culture of food that helped define the company got a little bit diluted. And maybe the distance between Ukrop’s and its competition got a little bit shorter, even while Ukrop’s rested on the laurels of being a legendary retailer. (Cautionary note: Any company that actually has laurels to rest on ought to take them outside, burn them, and scatter the ashes far from headquarters. Even legendary retailers have to earn that sobriquet each and every day. You were legendary yesterday. Today, you have to earn it all over again.)

    Now, it’s also interesting that the Times Dispatch reports that the baked goods made for Ukrop’s at a central location “will continue to be sold to Ahold under a new venture the Ukrop family will operate.”

    What’s the over-under on low long this deal lasts? Of course, there may be contractual obligations as part of the sale to Ahold. But it seems to me that the best way to make this sale work is to assure that a culture of food is maintained and even improved at Ukrop’s.

    And if it ends up that Ahold is the company that accomplishes this...well, a lot of us are going to have to rethink our assessment of the company and this deal. We’ll see.

    Published on: January 25, 2010

    Whole Foods has announced that it is launching a “Health Starts Here” initiative in all of its 289 stores, as it works to encourage its shoppers to adopt a healthier approach to food that it says includes plant-based, nutrient-dense whole foods, which it says should be real, fresh and natural, and, when possible, organic, local and seasonal.

    "We opened our first store 30 years ago to provide natural foods as a delicious and healthy alternative to the increasing amounts of highly processed foods with artificial ingredients," said Margaret Wittenberg, global vice president of quality standards, in a prepared statement. "Over the years, we realized that providing the healthiest foods available is simply not enough. We are now deepening our commitment to healthy eating by providing education and support tools to inspire interest in foods that help improve and maintain health and vitality."

    Whole Foods said that it is partnering with two unique third-party healthy eating partner programs - Eat Right America and the Engine 2 Diet - that offer 28-day "getting started" plans while “providing plenty of room for personal choices to help those who are interested in starting on their own journey down the road to optimum health.”

    According to the announcement, “Whole Foods Market will feature free information, recipes, in-store lectures, events and support groups. A selection of supporting educational books and cookbooks will also be for sale alongside the ‘Engine 2 Diet’ book and ‘Eat Right America’ program materials.”
    KC's View:
    Whole Foods and its CEO, John Mackey, have been upfront about a new kind of purity of vision that they seem to intent on pursuing. What’s interesting about this is that it comes after a period in which it expanded its tent somewhat and also faced economic challenges from the recession.

    It is at least possible that this new purity could make Whole Foods less attractive to some people, which could have an impact on sales and profits, which could affect the company’s stock price. Mackey seems to be betting that this won’t happen...but I’m not sure I’d want to lay that bet.

    Published on: January 25, 2010

    The Tampa Tribune reports on some of the learnings that Publix has gleaned from its upscale, foodie-oriented Greenwise format - including the fact that even affluent lovers of food like the occasional downscale pleasure, like fried chicken...and that it is important for Greenwise to accept all Publix coupons, because affluent people like deals, too.

    According to the story, for the time being Publix is taking a guarded approach to expansion of the Greenwise format:

    “There are no formal plans for another stand-alone Greenwise store anytime soon. For now, there are stores in Palm Beach Gardens, Boca Raton and Tampa ... For now, rather than build new stand-alone Greenwise stores, the company is taking a hybrid approach.

    “The next Greenwise will be part of a traditional, 60,000-square foot Publix store, set to open in Naples in the first quarter of this year. The Greenwise area will have a restaurant-style seating area, plus selection of artisan cheeses, large sushi bar, gelato and expanded section of bulk foods, coffees, teas, grains and nuts. But a few aisles over, there will be standard Publix inventory, like Tide, fried chicken and Tylenol.”
    KC's View:
    Unlike Whole Foods, which seems to be getting a little narrower in its vision, Publix appears to be widening its approach...an approach that seems intelligent, especially in view of the current economic uncertainties (especially in Florida).

    Published on: January 25, 2010

    HealthDay News reports that a new study from the US Centers for Disease Control and Prevention (CDC) suggests 20 percent of US children and teens “have abnormal lipid levels, an indication of too much bad cholesterol, too little good cholesterol or high triglycerides,” which can “raise the risk for heart disease, which is the leading cause of death in the United States.”

    "Forty-three percent of obese youth are eligible for therapeutic lifestyle counseling, and 22 percent of overweight youth were also eligible," says Ashleigh May, an epidemic intelligence service officer with the CDC who authored the report. The story says that “doctors need to be aware of lipid screening guidelines and treatments, especially for obese and overweight youth ... because abnormal lipid levels can lead to heart disease down the road.”
    KC's View:
    I hate to be a cynic here, but “therapeutic lifestyle counseling” because kids are overweight and have high cholesterol?

    How about their parents show a little responsibility and create an environment in which their kids eat less and move more? How about those same parents supporting the idea of school systems that don’t serve slop in the lunchroom and do include mandatory physical education classes?

    I’d wish I’d known that phrase when I was in school. I might have suggested it to the nuns and brothers for whom “therapeutic lifestyle counseling” was a hard smack on the back of the head every time I asked a question they didn’t approve of.

    (Not that it worked. I have a hard head. You may have guessed...)

    Published on: January 25, 2010

    The Cincinnati Enquirer reports on a study from McKinsey & Co. suggesting that while the “new normal” - which is the shift in consumer habits toward spending less, buying less expensive products, and changing their choice of retailers based on new economic realities - may not be permanent, it is expected to be “sticky.”

    “The researchers stop short of saying this new thriftiness is permanent,” the Enquirer writes. “But they do say the changes will be ‘stickier’ than in previous recessions, meaning shoppers are feeling pretty good about the good buys they've discovered and the money they're saving.”
    KC's View:

    Published on: January 25, 2010

    • In the UK, a website called This Is Money reports that Tesco plans to back a series of films - one based on a Jackie Collins novel, and another based on a Judy Blume book - that will initially be released on DVD and sold exclusively in Tesco stores, and eventually could be shown on free-to-air internet TV.

    “The films will be relatively mainstream, but also a high-quality product that we would be proud to offer our customers,” says Tesco entertainment director Rob Salter.
    KC's View:
    Is it just me, or does this sound suspiciously like the same strategy that Starbuck’s embarked upon a few years ago, and that ended up with the company apparently taking its eye off the retail ball?

    Published on: January 25, 2010

    • The Sacramento Business Journal reports that Raley’s “has rolled out a free iPhone application that allows consumers to peruse the supermarket chain’s database of recipes and make impromptu grocery lists ... Customers can use the app to search for recipes by category or by main ingredients, and base a meal on what they have a craving for or what’s in their refrigerator, according to a news release.

    “Customers who find a recipe they want to make can load all the ingredients needed onto their shopping list automatically, and add additional items later. Users of the iPhone app also can rate and save their favorite recipes.”

    More than 500 people reportedly have downloaded the application in just the first month.
    KC's View:

    Published on: January 25, 2010

    Responding to one of Friday’s stories, MNB user Craig Espelien wrote:

    I agree with your notion that it is a bit suspect that 90% of consumers will pay more for green products.  This is something called “The Research Trap” – it maps consumer actions to what they say they will do which is rarely the case when it comes to spending more money for a somewhat suspect claim.  Like organics, there is a small niche of the population who will pay more for this type of product – but 90% of the consumers – the mainstream consumer – actually only aspire to do as they say.  When they vote with their pocketbooks, it is usually to save a few shekels rather than live the altruistic lifestyle.




    Last week, we took note of a Chicago Sun Times report about a market survey done by Scott Mushkin, managing director at New York-based Jefferies & Co, suggesting that Supervalu has raised its prices by six percent at its Jewel-Osco stores since it announced last spring that it was lowering the prices on thousands of items.

    Ironically - or maybe not - the Jefferies report notes that the company’s profits have gone up at the same time as prices).

    And I commented:

    Supervalu may feel pressure to look good to the Wall Street community, which may be part of the reason that prices have gone up ... But you have to decide at some point whether you are going to look good on Main Street or look good to Wall Street. At some point, I suggested, it begins to look like the retailer is playing a shell game.

    One MNB user wrote:

    I have spoken with people at other SV retail banners such as Farm Fresh, Shaws, Acme who have all had experiences where prices have been raised to the point that they are no longer competitive. One of these banners who was higher than all competitors had just completed a price reduction program and when the margins began to dip, they were told to increase the prices and discuss the economic issues as a reason. Previous management, new management- same Albertson’s philosophy….raise prices, make money on the buy, consolidate centralize- cookie cutter stores from CA to FL…. You’d think they would have learned the first time.

    One MNB user was less than impressed with Supervalu:

    Last night my wife went out, after a long day, to pick up a few things for lunch today.  She came back after about 45 minutes which was strange because we have a fairly new Shaw’s about ¼ mile from the house.  She was so pissed about the prices she drove 2 miles down the road to a new Super Wal-Mart.

    I find it hard to believe that in this economic climate, with so much uncertainty for so many; a company would raise prices so noticeably.  It’s just really dumb!!! I predict the Shaw’s will be closed in a matter of months which is very unfortunate for EVERYONE!


    And another MNB user chimed in:

    You are correct-it’s a shell game. And it’s being played by Kroger and Safeway as well. They target the top 500 items in the store and lower the price, but take the price up on the remaining SKU’s to make up for the margin hit.




    We continue to get emails responding to last week’s piece about men not paying enough attention to women, which means that they often to a lousy job of marketing to them.

    One MNB user wrote:

    I have been in the Produce Industry(fresh produce suppliers to retail) for 25 years. As a woman, a continuing minority in the industry, I can vouch that the men in the industry do not listen to what women what. Which is ironic considering that women buy 93% of all fresh products at retail.

    MNB user Jim Hrovat wrote:

    Great comment!  I must be a hell of a communicator. I'm a man and the father of seven children and 95% of my friends are women. I love it and wouldn’t have it any other way!
    KC's View:

    Published on: January 25, 2010

    In the AFC Championship Game, the Indianapolis Colts defeated the NY Jets 30-17, and in the NFC Championship Game, the New Orleans Saints went into overtime but outlasted the Minnesota Vikings 31-28.

    The Colts will face the Saints in the Super Bowl on Sunday, February 7.
    KC's View:
    Let me say, as someone who has been openly rooting for the Jets the past few weeks, that I am willing to cheerfully admit that we got beaten by a better team and quarterback ... there is a reason that no rookie quarterback has ever won the Super Bowl.