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: January 28, 2010

    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.

    Today, some notes from the road...

    Last weekend I had the privilege of attending and moderating a panel at the annual marketing conference held at Northwestern University’s Kellogg School of Management in Chicago. The panel discussion focused on private label vs. national brands, and featured an exceptional group of people: Mike Ellgass, senior director of private label grocery at Walmart; Christina Hennington, director of merchandise planning at Target; Doug Miliken, vp of global brand development at Clorox; Pat Simmons, vp of consumer marketing at General Mills; and Scott Gordon, director of marketing at Daymon Worldwide.

    While it was tough to facilitate the discussion and take notes at the same time, there were a few things I learned during the session.

    One is that national brands actually don’t mind it when a retailer has a strong private brand. The reason? Retailers that are focused on private brands tend to have eliminated secondary and tertiary brands from their shelves, which actually creates a good environment for both the national brand and own-label alternatives. I also got the sense that when a retailer has a strong private brand, it means that the organization is highly focused and strategic...and manufacturers like doing business with such retailers, even if it isn’t always easy.

    But there is a concern about this trend, with some people telling me that they believe that faced with elimination, more of these smaller manufacturers will look to get into the private brand business...but may not have the same commitment to quality as some of those in the business now. That’s something that retailers need to be aware of, they say...because a decline in quality could hurt the overall private label trend line.

    Another interesting note. At one point, a panelist made reference to the truism that most people don’t like to go grocery shopping, but many people in the audience objected to that statement - and they said they actually loved shopping in storers like Whole Foods and Trader Joe’s. Stores that, as it happens, are anything but mainstream and offer strong own-label alternatives. That ought to be a lesson for everyone.

    After being in Chicago, I traveled to the considerably warmer climes of Florida for the Food Marketing Institute annual Midwinter Executive Conference. There, I was thrilled to hear Ken Waller of Hy-Vee say during a session on meal solutions, based on new work done by the Coca-Cola Retail Research Council, that he believes that every meal eaten at an Applebee’s, a Ruby Tuesday, an Olive Garden or even a McDonald’s, is a meal that is not being bought at the supermarket...and that food retailers need to fight tooth and nail for every dollar and every meal component and occasion.

    Bingo!

    I’ve been saying much the same thing here on MNB for years, and sometimes I get raked across the coals for suggesting that supermarkets need to play hardball for share of stomach. I’m not surprised that Ken feels this way - I think Hy-Vee plays a pretty outstanding game of hardball in all the markets it serves - but it is always nice when I find out that people a lot smarter than me share the same opinion. Of here’s how far I would take it...if that means retailers should reconsider selling gift cards for establishments that compete with them for share of stomach, so be it.

    It’s a jungle out there. Whether we’re talking about private label or meal solutions, I think we have to be tough-minded, focused, and as competitive as possible when defending our own turf and looking to grow our businesses.

    Because if we’re not, the other guy will be. And then we’re in trouble.

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

    Published on: January 28, 2010

    Marketwatch reports that Ron Marshall, the former CEO of Borders and Nash Finch, will begin as the new CEO of the Great Atlantic & Pacific Tea Co. (A&P) on February 8, and immediately will be faced with the continuing overhaul of the company’s pricing and promotion strategies.

    Here’s how Marketwatch assesses Marshall’s track record:

    “He faced a similar task when he was hired to run Nash Finch in 1998, coming on board to shore up business at the food distributor and retailer.

    His five-year reorganization plan called for consolidating distribution warehouses, paring the number of regional grocery banners Nash Finch ran, and expanding the company's retail business in the Upper Midwest. From year-end 1998 through 2005, the company's net income (excluding charges) rose 56% to $45.1 million. Sales rose 10%.

    “Marshall resigned in September 2005 as Nash Finch faced eroding profit margins amid intense competition. The company issued a profit warning a month later.”
    KC's View:
    Three notes about timing.

    One, he doesn’t have five years.

    Two, on February 9, he’s going to wonder what the hell he’s gotten himself into.

    Three, there is no time like the present to see if he can change his last name to Haub.

    Published on: January 28, 2010

    The Financial Times reports that Whole Foods plans to “start offering its healthier workers higher discounts on their grocery shopping, in a move it says is aimed at cutting healthcare costs.

    “John Mackey, chief executive officer, said in a recent letter to employees that indicators including blood pressure, cholesterol and body mass index would be used to determine the level of discount offered above the basic 20 per cent available to all employees.”

    In the letter, Mackey reportedly said that he hoped the new initiative would be both “empowering and fun,” and sees them as “incentives to encourage our team members to be healthier and to lower our healthcare costs ... We believe this is a win-win program that will help both our team members and our shareholders.”
    KC's View:
    This may be empowering and fun, but it may not exactly be team-building. And I wonder how it will impact the hiring process at Whole Foods.

    Published on: January 28, 2010

    Jeff Brown, an independent grocer, joined First Lady Michelle Obama last night for President Barack Obama’s State of the Union Address before a joint session of the US Congress.

    According to a statement released by the National Grocers Association (NGA), of which Brown is a member, the grocer “received a call last Friday from the White House Office of Urban Affairs, extending the State of the Union invitation. The White House traditionally invites distinguished Americans to sit with the first lady and the president typically recognizes their accomplishments in the address.

    “President Obama spoke about the need of building more supermarkets in impoverished areas, commonly called supermarket deserts because of the absence of stores large enough to sell fresh and nutritious food.  Brown has been working with the Fresh Food Financing Initiative (FFFI), a program initiated in Pennsylvania that combines state and private money that provides grants and loans for grocery-store development in areas where markets are needed. State Rep. Dwight Evans (D - Philadelphia) started the initiative in conjunction with two entities: the Reinvestment Fund, a community-development financial institution; and the Food Trust, a Philadelphia-based nonprofit organization that works to improve access to healthy, affordable food, and to educate families about nutrition.”

    Tom Zaucha, NGA’s president/CEO, said, “NGA applauds President Obama’s decision to highlight the work Jeff Brown has done with FFFI (which) is helping by offering residents a supermarket with fresh, high-quality nutritious foods and jobs in the community. He is a prime example of NGA’s Grocers Care Program, which was created in to recognize the important role community-focused retailers and the grocery industry as a whole play in their communities.” 
    KC's View:

    Published on: January 28, 2010

    Safeway Inc. and Excentus Corp. have settled a lawsuit over a fuel rewards program, and while terms of the agreement were not disclosed, both companies say that a new licensing agreement has been reached that ends all litigation between them.

    We are pleased to put this litigation behind us,” said Safeway spokesman Brian Dowling.  “We respect the breadth of the Excentus intellectual property portfolio and look forward to exploring ways to work together on fuel rewards.”  

    “We are glad to have been able to work with Safeway to execute an agreement that works for both of us and opens up the opportunity to work together on what is best for their customers going forward,” said Dickson Perry, CEO of Excentus.  “Our plan is to work with others who want to reward their customers with fuel discounts to avoid disruptive and costly litigation for their companies as we protect the assets of Excentus.”
    KC's View:

    Published on: January 28, 2010

    • Tesco-owned Fresh & Easy Neighborhood Markets in the western US announced that it is introducing more gluten-free products, adding new shelf labels to call out notable gluten-free items and is making a list readily available of all products in the store that are made without gluten-ingredients. The move is a response to the fact that gluten-free is the number one dietary request from its shoppers.

    • In the UK, the Sun reports that Tesco has begun posting signs in its stores prohibiting people from shopping in their pajamas.

    The sign specifically says: “To avoid causing offence or embarrassment to others, we ask that our customers are appropriately dressed when visiting our store.”

    Tesco says the policy is being implemented as a reaction to customer complaints.
    KC's View:
    This simply would not fly in the US. It is my impression that, at least in this neck of the woods, teenagers - mostly girls - love to wander around in their long pajama bottoms...usually worn with a pair of Uggs and a sweatshirt. (Trust me on this one. One of these girls lives in the same house as me.)

    It isn’t my favorite look. But it could be a lot worse.

    Published on: January 28, 2010

    • The Colorado Springs Gazette reports that “unionized grocery workers have reached a tentative agreement on a new contract with Albertsons, with a vote scheduled in Denver on Thursday, Colorado Springs on Friday and Grand Junction on Tuesday. No details about the proposed deal are available. Albertsons becomes the second of the three major grocery chains in Colorado and Wyoming to reach an agreement with United Food and Commercial Workers International Union Local 7. Most King Soopers bargaining units ratified a new five-year deal with the union last month, although five units with 260 workers rejected the company’s offer. Most Safeway units rejected their company’s offer, while 15 bargaining units with 1,700 workers accepted it.”

    • Pork manufacturer Farmland Foods said yesterday that it is the first pork company to receive the United States Department of Agriculture (USDA) designation “Never Ever 3” for its “Simply Natural” line of fresh pork products, which have “no antibiotics, no growth promotants, and no animal by-products.”
    KC's View:

    Published on: January 28, 2010

    • UK retailer William Morrison Supermarkets has named Dalton Philips, the former Walmart executive who currently is COO at Loblaw in Canada, as its new CEO. He succeeds Marc Boland, who has joined Marks & Spencer.
    KC's View:

    Published on: January 28, 2010

    Earlier this week, Michael Sansolo reported on new research done by the Coca-Cola Retailing Research Council about the changing challenges facing supermarkets in the battle for breakfast, lunch, dinner and snack time.

    Michael provided a link to the report, but an editing error on MNB prevented it from working.

    So here it is again:

    Go to http://www.ccrrc.org >

    And then click on the “North America” tab.
    KC's View:

    Published on: January 28, 2010

    Michael Sansolo appeared last week on Business Insanity Talk Radio to talk about our new book, “The Big Picture: Essential Business Lessons from the Movies,” which is now available on Amazon and for the Kindle. (We’ll have to get to work on getting into Apple’s new iBooks application so we can be read on the new iPad.)

    To check out Michael’s interview, click here.

    And, if you’re interested in order bulk amounts for associates, clients, customers or just friends, go to:

    http://www.brigantinemedia.com/bigpicture >
    KC's View:

    Published on: January 28, 2010

    We’ve had a lot of discussion the last few days about marketing to Muslims, and the passions - as well as the biases and prejudices, quite frankly - that the issue raises among people all over the country.

    To be honest, my intention today was to sort of less things cool for a bit. When emotions run too hot, I often think that it makes sense to take a deep breath...and I can allow that to happen here simply by taking a day off from emails, at least from those about this particular subject.

    However...one of the things that I said yesterday was that I know very little about Islam and don’t, to the best of my knowledge, know any Muslims. I suspect that I have this in common with many Americans. And I refuse to slap labels on all Muslims based on the actions of a few, just as I would hope that I would necessarily be labeled as any one thing just because of the demographic groups that I may be a part of.

    But then I got the following email:

    I am a proud Muslim AMERICAN. It always amazes me when people make claims of Islam encouraging violence and hatred. These people obviously do not know much about Islam outside of what the 700 Club and Fox News report.

    A few times these people have gotten into arguments with me also, since they would obviously know more about my religion than me….definitely possible but unlikely.

    As a practicing Muslim, I want ! you to know that Islam does not encourage violence or hatred. Every time a terrorist does something stupid, Muslim Americans pray that it is not a Muslim person that will bring further damage to our religion. So when people say things like, Islam is violence, I can understand why someone would say this if they wanted to make a broad generalization…. but what good do broad generalizations do? How often are broad stereotypes accurate of extremely large groups? In regards to the question of why do you not hear condemnations from Muslim leaders in the US? Islam does not have many “public leaders”. As a practicing Muslim I can’t name one. Many of our mosques are led by local Imams who have other full-time jobs. Why do you not hear condemnations from Muslim leaders all the time? Understanding that much of the Muslim world sees the casualties of unjust wars where many innocent civilians are killed has something to do with it. Could it also be a question of condemnations from Muslim leaders abroad not being covered by the media?

    I could go on forever about this but just want to close with saying this -- by being an individual who is in the religious minority…certain situations allow me to have extreme levels of pride because I live in such a great country. Where else in the world will a country go out of its way to treat its minorities as equals in so many ways? Where else in the world will corporations and individuals go out of their way to create inclusive environments for minorities? Only in a great country like America....I am proud to be an American-born Muslim.


    That was one of two emails I got yesterday from people who said they were Muslims. Here was the other, from MNB user Amber Khan, referring specifically to the controversy generated when Publix handed out a calendar identifying December 7, 2010, as the beginning of the Islamic New Year and not as Pearl Harbor Day.

    As a Muslim, I am sick of hearing about this stupid calendar. Can you please stop reporting on it?

    It isn’t the calendar that interests me at this point. It is the window we are getting on people’s beliefs and emotions, which provides us with both cultural and business insights.

    So I’m not quite ready to walk away from this discussion yet.




    On another subject, though it sort of relates to painting with a broad brush, we had a couple of different reactions to a statement I made yesterday comparing New York Mayor Michael Bloomberg, who has been extremely aggressive about health and wellness initiatives that put limits on things like trans fats and smoking, with Robert Moses, who essentially shaped the city’s physical infrastructure, for better and for worse, decades ago.

    One MNB user wrote:

    Bloomberg a man ahead of his time? That's laughable! He is the ultimate "nanny" whether you like it or not and you my friend are just one more liberal journalist in a land of many!!

    Well, at least you think of me as a friend.

    And MNB user Don Longo wrote:

    No doubt Bloomberg will have a lasting legacy on New York, but like Robert Moses, not all of it will be good. Moses, you may recall, is the man primarily responsible for driving the Dodgers out of Brooklyn.

    True.
    KC's View: