retail news in context, analysis with attitude

Published on: March 31, 2010

The Chicago Tribune looks at a confluence of service expansion in the city, writing that “during the past year, the Chicago area has turned into a retail test ground for mass merchants to experiment with drive-throughs. Sears Holdings Corp. started last spring by turning a Kmart store in Joliet into a drive-through warehouse, renaming the outpost MyGofer. Meijer Inc. followed suit with GroceryExpress drive-ups at stores in St. Charles and Aurora. And Wal-Mart Stores Inc. opened its first drive-through at a recently remodeled store in Mount Prospect.

“While the concept is fledgling and there are kinks to work out, retail analysts predict that mass merchant drive-throughs will be moving into the mainstream as baby boomers age and the Internet changes the way people shop.”

Published on: March 31, 2010

Twin Cities Business reports that Supervalu has filed a lawsuit against a number of chocolate manufacturers - including Hershey, Mars, Nestle and Cadbury - accusing them of a conspiracy to fix chocolate prices between 2002 and 2008. The conspiracy, the company says, resulted in it being overcharged for products during that period, and cites specific examples when all the accused companies raised their prices in similar percentages.

According to the story, “The suit says that in the early 2000s, the sale of chocolate slowed in the United States. In order to make up for the decreased sales, the defendants allegedly engaged in a series of coordinated price increases of their chocolate candy products to increase revenue and profit.

“Supervalu said that the price of cocoa beans - the major ingredient in chocolate products - either decreased in price or remained stable throughout the period in question, refuting the defendants’ claims that they were increasing prices due to increased input costs.”

The damages being requested in the case have not been specified.

Published on: March 31, 2010

The Chicago Sun Times reports that a couple of McDonald’s locations in Chicago have started offering catering services to nearby businesses, with “Big Macs, Egg McMuffins and a limited selection of other McDonald's breakfast and lunch items, delivered to your conference room, with white-tablecloth service, for a minimum of 10 people.”

The food costs a little more than if you actually went to the Golden Arches, and the sodas are canned, not fountain drinks. One other difference: McDonald’s urges customers to buy potato chips rather than french fries, but for insistent customers, “they'll bring the fries -- with heat lamps and chafing dishes to try to keep them hot.”

Published on: March 31, 2010

Whole Foods has announced that it plans to sponsor a film festival during April 2010 as part of “a nationwide effort to trigger awareness and action to remedy the problems facing the U.S. food system. The grocer hopes to inspire change by encouraging and educating consumers to take charge of their food choices.”

The movie initiative, called "Let's Retake Our Plates,” is designed to help consumers understand how the food choices they make have an impact on health and the environment. There will be more than 150 screenings in cities across America where Whole Foods has a presence. According to the company, “Many will offer free admission, while some will request small donations for designated local nonprofits that work to improve the environment and food supply.  Some screenings will include post-film question-and-answer sessions to encourage further discussion on the thought-provoking topics.”

The movies will range from documentaries such as Food, Inc. and Fast Food Nation to science fiction dramas such as Soylent Green and Silent Running.

"Our goal is to help open people's eyes to the reality of what's going on with food in our world," said Mara Fleishman, global project leader of the ‘Let's Retake Our Plates’ initiative. "Whole Foods Market has been committed to improving our food system for 30 years, and this is a great way to gather together to understand that every dollar spent in a grocery store is not the same. Conscious food choices can make a difference."

Whole Foods also announced that it will expand on the traditional Earth Day observance on April 22 this year and celebrate April as Earth Month.

Published on: March 31, 2010

• The Wall Street Journal reports that “for nearly two weeks, environmental activists have been using social media to wage war against Nestlé over its purchases of palm oil for use in KitKat candy bars and other products ... Protesters have posted a negative video on YouTube, deluged Nestlé's Facebook page and peppered Twitter with claims that Nestlé is contributing to destruction of Indonesia's rain forest, potentially exacerbating global warming and endangering orangutans. The allegations stem from Nestlé's purchases of palm-oil from an Indonesian company that Greenpeace International says has cleared rain forest to establish palm plantations.”

According to the story, Nestle has been caught by surprise by all the protests, and the company says that “it had already decided to stop dealing with the firm, which supplied just 1.25% of the palm oil Nestlé used last year.”

Published on: March 31, 2010

• The Financial Times reports that Walmart plans to develop an e-commerce presence in both Japan and China, and will adapt its centralized online platform to serve both countries.

Published on: March 31, 2010

• The Grand Rapids Press reports that a Russian crime ring has been implicated in the West Michigan investigation of identity theft that resulted in the charging of thousands of dollars onto fraudulent credit cards and store gift cards, as well as $200,000 in fraudulent college loans.
• Walgreen Co. said Tuesday that the Federal Trade Commission has cleared its $623 million acquisition of New York City drugstore chain Duane Reade, and it expects the sale to be complete in a few weeks.

• Safeway announced that it has launched its annual Support for People with Disabilities fundraising and awareness campaign at a kickoff event in Alameda, California. The company was joined by two of its principal partners in the effort — Easter Seals and Special Olympics — and pledged to raise funds to further the organizations’ causes. As the nation celebrates the 20th anniversary of the Americans with Disabilities Act (ADA), Safeway announced plans to raise funds during the month of April for a range of critical regional rehabilitation services, autism programs, and job training grants. The fundraising will also support athletes participating in Special Olympics. Safeway also honored its nearly 10,000 employees with disabilities and urged other businesses to “tap this otherwise overlooked and underutilized talent pool.”

Published on: March 31, 2010

• Coca-Cola announced that its North America supply-chain chief, Brian P. Kelley, has been named to lead the integration effort as Coke completes the acquisition of its largest bottler, Coca-Cola Enterprises.

Published on: March 31, 2010

Jaimie Escalante, the former East Los Angeles math teacher whose ability to inspire inner city students to learn calculus inspired the movie Stand And Deliver, died yesterday of bladder cancer. He was 79.

According to the Los Angeles Times obituary this morning, “Escalante gained national prominence in the aftermath of a 1982 scandal surrounding 14 of his Garfield High School students who passed the Advanced Placement calculus exam only to be accused later of cheating. The story of their eventual triumph - and of Escalante's battle to raise standards at a struggling campus of working class, largely Mexican American students - became the subject of the movie, which turned the balding, middle-aged Bolivian immigrant into the most famous teacher in America.”

And, the Times writes, “Escalante was a maverick who did not get along with many of his public school colleagues, but he mesmerized students with his entertaining style and deep understanding of math. Educators came from around the country to observe him at Garfield, which built one of the largest and most successful Advanced Placement programs in the nation.”

Published on: March 31, 2010

Commenting on a story the other day about how many ministers in Chicago have come out in support of allowing Walmart to build more stores there, I wondered if it is fair to say that ministers are more connected to the needs of the local community than the union activists who oppose Walmart expanding there.

Which led MNB user Harry Hamil to write:

Hell no!  Kevin.

Wal-Mart reduces employment by bankrupting existing local businesses.  And what happens to the taxes on those empty buildings.  And it is well-known for targeting stores.  Later, its prices go back up.

Wal-Mart is a great drain of money out of a community.

Enough!  This is my last letter to you because you don't have the ears to hear nor the eyes to see!

That's the definition of a bias, Kevin.

I guess I haven’t run enough of Harry’s emails. Sorry about that.

For the record, I’ve never denied having a bias. MNB is designed, in part, to showcase my biases and to provoke conversation...and I try to put as many different opinions out there as possible.

But I don’t think most people would suggest that I have a pro-Walmart bias. I’m just trying to be fair.

I also don’t have a pro-cleric bias. Just ask the nuns who would roll their eyes and describe me to my parents as “a challenge.”




Another MNB user disputes the positive reviews Walmart has been getting for its effort to buy from local farmers:

My take is simple.  This is largely for show and to raise questions in the minds of the pundits, etc.  If Wal-Mart finds some farmers they can buy from, fine.  If not, fine.  Wal-Mart has always been good at recognizing good ideas of its competitors and then implementing them without letting anything get in the way.  It may copy the vertical integration of the meat industry where everything that can be industrialized is owned by them and everything that can't they contract buy.  Perdue is probably a good model for that.  Everything at Wal-Mart since Sam exited has been pitting suppliers and workers against each other.  And, this is the best way to do it in the produce area.  Simply put, anyone who does business will get squeezed...

A lot of people would suggest that what you just described is good business done in the consumer’s best interests. Not everybody would, but some.




Regarding the 20 year sentence received by the hacker who was found guilty of massive identity theft, one MNB user wrote:

Let's see, this clown gets 20 years but the people responsible for driving the greatest economic collapse in modern times get…oh yeah, a bailout from Hank Paulson.  And look, I know the comparison isn't truly valid.  This guy should pay the price for his crime, however, I do find it odd that his penalty is pretty strong especially when considered alongside the Wall Street crowd.  Makes you wonder.




Five Guys was reported to be the fastest growing restaurant chain in the US, but one MNB user was not impressed:

The grease in their french frays is toxic.

But oh so good.




Responding to the story about Daymon losing both the Safeway and Supervalu accounts, MNB user Tal Vance wrote:

Safeway and Supervalu have finally realized that the only value added by an in-house broker is administrative help.  Daymon and their kind are roadblocks to new suppliers that might bring value to a retailer. Daymon brings value to retailers that are financially "sick" and they think that the "kick back" of funds helps their bottom line.  In reality, suppliers raise their price to retailers using in-house brokers to cover the cost of properly handling the account with a direct salesman since the in-house folks don't represent the supplier...they represent the account.

Don't you think that leading retailers like Walmart, Target, and Walgreen's would use these guys if they had real value.

I think the situation may be a little more complicated that the way you describe it. But IU’ll have some more thoughts on it as the days pass.




On another subject, an MNB user wrote:

Regarding your post about ice on seafood: we recently bought some scallops at our favorite grocery store. When I unwrapped them to cook them there was at least 3/4 cup of liquid and some remaining ice crystals in the plastic bag. At $12.99 a pound that's really significant. I know the store wasn't trying to cheat us, but I'm going to be more vigilant the next time I buy these. If I were a grocery store I'd make sure my fish counter employees were warned to watch out for this problem and fix it before it happens.

Agreed.





Responding to an activist group’s call for Ronald McDonald to be retired as a mascot because he exerts undue influence on young people to eat fast food, MNB user Mark Wright wrote:

He gets them hooked on those insidious Happy Meals and then and then moves them up to the hard stuff - Double Quarter Pounders with Cheese - leaving them to suffer the consequences throughout their tortured, but short, adulthoods.

If you don't believe me, just ask the fat police…there’s a trail of greasy clown-shoe footprints leading right to his house!   Oh, and be sure to check with the Department of Salt Intake - they have a file a foot thick on this guy.   He's despicable, and he's going down!

And another MNB user wrote:

Sorry but saying that Ronald McDonald should be retired because he is bad for children as a spokesperson is like saying Tiger Woods should not endorse any brands because he is bad for marriages..... We are getting way to politically correct on this one.  We all have the choice ... Go or don’t go.... Very Simple.

I actually don’t understand the activists’ concerns. I’ve raised three kids, and they’ve eaten their fair share of McDonald’s. But I’m not sure I’ve ever heard them reference or even pay attention to Ronald McDonald.

It is up to me as a parent to regulate how much of the stuff they eat. Sometimes I’ve done a better job than other times....but this is what I signed up for. Thinking that retiring a mascot is going to make an enormous difference is just utter nonsense. And delusional.




On the subject of MillerCoors’ new Vortex Beer, reported on here yesterday, MNB user Chris Esposito wrote:

Beer makers would be better suited at trying to develop beers with unique taste rather than gimmicks to sell the swill they offer up.  When the consumer can find outstanding, unique beers, with great flavor and depth (think Dogfish Head, Sierra Nevada, Brooklyn, Harpoon, etc.), they aren’t going to switch to Vortex because of how the beer pours.  Lousy beers is still lousy beer if you pour it from a tap, can or bottle.  All I see is them cannibalizing their own sales.




And finally, thanks to the dozens of folks who wrote in to point out that while Eric Clapton made “Cocaine” a hit, the song actually was written by JJ Cale. You’re right...and I should have known that, since I have both versions on my iPod.