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: April 12, 2010

    The Wall Street Journal reports that the small farmer community continues to have issues with the food safety bill that is expected to garner bipartisan support from the US Congress and be signed by President Barack Obama by next month. Their complaint, according to the story, is that the new fees and requirements that will be established by the new law will create a financial burden on them that will threaten their viability.

    The small farmers argue that the bill should be tailored so that the requirements are less onerous for small companies; big companies maintain that all companies - regardless of size - should be required to play by the same rules. Which ends up creating the impression that big food companies actually could use the new food safety regulations to crush their smaller competition.

    According to the Journal, “Rep. Rosa DeLauro (D., Conn.), a longtime advocate of tougher food-safety laws, said the legislation already addresses smaller producers' concerns. For instance, farms selling products directly to consumers from a fruit stand or farmers market would be exempt from some fees and requirements.”
    KC's View:
    This is a tough one. There are those that say that the new food safety regulations could actually put a crimp in the burgeoning local food movement, making it much more expensive - perhaps prohibitively so - for local farmers to provide product to local stores. This would be a shame.

    On the other hand, it is hard to justify allowing small farmers to have fewer regulations when it comes to food safety. If food is contaminated, it doesn’t matter to the consumer what kind of farm the product came from - I get just as sick if I eat tainted lettuce from a small farm as a giant agri-business.

    I have to come down on the side of food safety. But I would urge the government to find ways to help the small farmers navigate the higher costs with minimum effect. Not sure what the answer is, but there must be an innovative way to approach this that would be good for both consumers and small farmers.

    Published on: April 12, 2010

    The Boston Globe has an interesting piece about the picketing taking place in front of 16 Supervalu-owned Shaw’s stores, a reaction to a breakdown in negotiations between the company and employees at a Massachusetts warehouse. According to the story, the picketing reflects an endangered species - the labor strike.

    “It isn’t a major work stoppage - there just over only 300 workers at the distribution center - but it’s shining a light on how infrequent strikes have become in Boston and across the nation,” the Globe writes.

    “Nationwide, the number of strikes dropped from nearly 1,000 in 1984 to 133 in the fiscal year ended Sept. 30, 2009, according to the Center for Labor Market Studies at Northeastern University. Only five strikes with 1,000 workers or more took place last year - the lowest number on record - involving about 35,000 workers. By comparison, in the late 1970s, there were 200 to 300 large strikes a year, affecting more than a million workers annually ... The decline in the number of strikes goes hand in hand with the decline in the number of unions. In the mid-1950s, a third of the workforce was in a union, according to the Center for Labor Market Studies. By last year, that number had fallen to 12 percent.

    “As the number of unions drops and the public becomes increasingly disconnected from them, strikes have less of an impact on consumer opinion than they used to, labor analysts say. The lack of union presence, as well as a perception that union workers have better benefits than nonunion workers, can make it more difficult for consumers to relate to workers’ struggles, which generally makes a strike less effective, said James Green, a labor historian at the University of Massachusetts at Boston.”
    KC's View:
    There also is a sense that union leadership really isn’t in touch with grass roots issues, and has no empathy for the increasingly challenging competitive issues faced by management. This isn’t to excuse corporate leadership, which sometimes is more focused on its own issues than those faced by employees. In other words, there often is a lot of talking and no listening - no wonder little gets accomplished.

    There is no easy fix. And I wonder how many people are like me, increasingly of the opinion that upper management in virtually every institution - political, governmental, religious, corporate, etc... - is disconnected from what is really going on, what is really important.

    Published on: April 12, 2010

    The Wall Street Journal reports that Walmart says it is cutting prices on some 10,000 items, though it is not giving specifics about the size of the cuts. Stephen Quinn, the retailer’s CMO, tells the Journal that additional cuts could be introduced in coming months.

    The new campaign is being promoted via an advertising campaign with the slogan, "It's Rollback Time at Walmart."
    KC's View:
    What’s interesting about this campaign is that there seem to be a number of analysts who are less than impressed, who are being quoted by various media outlets as saying that that they think the rollbacks are more flash than substance, and that the competition - companies ranging from Kroger and Safeway to smaller retailers such as Stater Bros. - is better positioned than ever to compete with the Bentonville Behemoth.

    Published on: April 12, 2010

    Whole Foods Market, the leading natural and organic foods supermarket, and Chef Jehangir Mehta, "The Next Iron Chef" runner-up and executive chef/owner of Graffiti Food & Wine Bar in New York City, have joined forces to create “The Kids Food Adventure with Chef Jehangir Mehta,” a series of hands-on classes to encourage parents and children to be more adventurous with food while making healthy choices.

    Mehta kicks off the multi-city class tour at a Whole Foods in New York City, and then will hit the the road with stops at Whole Foods Market locations in Austin, Boston, Denver, Los Angeles and New Orleans.

    "Children can be intimidated by foods that are unfamiliar to them, which means they often won't try something they haven't seen before," said Mehta. "The Kids Food Adventure will give families fresh ideas to get children interested in trying new food concepts and flavors to make a long-lasting, positive impact on the way they eat. It's a high five for their palates!"
    KC's View:
    Love stories like this one. We can’t expect our kids to be interested in good food if all we are going to do is allow them to eat crap.

    Published on: April 12, 2010

    The Roanoke Times has a piece saying that “the convenience-driven nature of most Americans is a factor forcing the slow obsolescence of salad bars at Kroger stores in the Roanoke Valley and at other supermarkets nationwide.

    “The growing presence of prepackaged meals in the grocery aisle is symbolic of an evolving mindset: American consumers want food convenient and at a value price. Increasingly, grocers are eliminating salad bars, and in the case of Kroger, replacing them with prepackaged foods that they believe more people want. Some Kroger stores that once housed salad bars also expanded their produce departments with more vegetable and fruit offerings.”

    Salad bars, the story says, are losing relevance not just because of changing consumer tastes, but because they are expensive, carry high labor costs, and are seen as being vulnerable because of food safety concerns.

    “Ironically,” the Times writes, “the removal of salad bars at some supermarkets comes as federal legislators lobby to promote and add salad bars to the nation's schools in an effort to limit childhood obesity and encourage nutrition.”
    KC's View:
    I cannot even remember the last time I bought anything from a salad bar. (There would be those would would suggest that my waistline is ample evidence of this.)

    But the main reason is that many of the salad bars I see just make me queasy. If I want something convenient, I’d much rather buy precut veggies or fruit that is packaged up. The advantages may be illusory, but I just feel better about the purchase. I’ve seen too many people sneeze or pick their noses while within just a few feet of the salad bar to feel good about picking anything from one.

    Published on: April 12, 2010

    MasterCard, apparently dissatisfied with just being a payment network, has partnered with an internet company called Next Jump to create an online shopping mall where it will use shopper data to create customized user experiences that are highly predictive in terms of what people are likely to buy.

    According to a New York Times story, “Next Jump’s selling point is that it draws on buying patterns across thousands of retailers, giving it a huge sample size of consumers to analyze.

    “Charlie Kim, the company’s founder, says Next Jump converts one in every 11 browsers into buyers, a rate that far exceeds the industry norm ... For more than a decade, it has gathered mountains of data to help refine its algorithms for predicting what people are likely to buy. On the new MasterCard site, shoppers will be asked to select a handful of merchants they favor. From there, Next Jump will monitor how they use the site and adjust offers accordingly.”

    The story says that MasterCard will only gather data on people who sign up on the site.
    KC's View:

    Published on: April 12, 2010

    • In the UK, there are reports that Walmart-owned Asda Group is looking to acquire a major general merchandise retail chain there. If such a move is made, it would dramatically increase Asda’s size and close the gap with market leader Tesco.

    China Retail News reports that Walmart “has signed a cooperation agreement with the commercial real estate firm Shanghai You You Group to open Wal-Mart's first Sam's Club in Shanghai,” probably before the end of the year.

    Bloomberg reports that Walmart could be positioning itself to acquire Shoprite Holdings in South Africa, saying that “Shoprite may be the best ‘fit’ should Wal-Mart be looking to expand into South Africa and Africa as a whole as the company has stores across the continent.”
    KC's View:

    Published on: April 12, 2010

    Alimentation Couche-Tard, the Canadian convenience store giant that owns almost 6,000 c-stores including Circle K, has launched an unsolicited bid to acquire Casey’s General Stores for $1.9 billion.

    Casey’s, which operates more than 1,500 stores, almost immediately rejected the bid, with CEO Robert Myers saying that it was an "opportunistic proposal ... attempting to capture the significant current and long-term value that rightly belongs to Casey's shareholders ... Casey's is well positioned to benefit from the global economic recovery."

    According to the coverage of the story, the bid is a 14 percent premium over casey’s current stock price, and includes an assumption of Casey’s $29 million debt.

    In the letter to Casey’s management last week, Couche-Tard said: "Despite our repeated efforts starting in October 2009 to engage in negotiations, and without the benefit of discussing our proposal with us or our advisors, your board of directors unanimously rejected our proposal. Our goal remains to work with you to agree to a negotiated transaction. However, due to your unwillingness to engage in discussions and the unique opportunity presented by our proposal for your shareholders to realize full and immediate value, we are compelled to make this proposal known to your shareholders."
    KC's View:

    Published on: April 12, 2010

    • The Wall Street Journal reports that California Pizza Kitchen is on the market, as the owners solicit bids from potential buyers, including private equity firms. According to the story, “One question is whether the company’s founders and co-CEOs, 67-year-old Larry Flax and 64-year-old Rick Rosenfield, are hoping to cash out -- or whether they’re looking for a deep pocketed buyer to help expand the business with the two of them still in charge.”

    Crain’s Chicago Business reports that British sandwich chain Pret a Manger is eyeing Chicago for aggressive expansion mode, with one store scheduled to open in downtown in mid-June. The company has long hoped to expand beyond New York, where it has its most significant US presence with 23 stores, into Chicago and Washington, DC.

    • Walgreen has officially closed on its $623 million acquisition of Duane Reade, the New York City drugstore chain. The company reportedly plans to continue operating the stores under the Duane Reade banner, as well as learn from some of the fresh food initiatives with which Duane Reade has been experimenting.
    KC's View:

    Published on: April 12, 2010

    Responding to my “Time Is On Our Side” commentary last week, which may have been uncharacteristically optimistic, one MNB user wrote:

    I'm sorry to be cynical, but I just don't see all this good stuff happening - Let's be honest - as a nation us Americans have been living way beyond our means.  The only way any of these good times will come in the future is if the rest of the world (namely China)  continues to send their hard earned money our way for us americans to spend on our "emotional experiences".  I think they will wise up and realize we can't pay it back and they will start keeping their money for their own consumerism and emotional experiences and stop sending it our way to spend into oblivion.

    This country is broke.  Our national debt is insane and growing faster than ever.  Consumer debt levels are ridiculous.  I think the party will come to an end in an even harder and more painful way than what we've seen the past two years once other countries stop loaning us all their money.  The longer the government keeps trying to inflate bubbles and keeps providing incentives for Americans to spend more and more money and go into more debt the worse it's going to be for us in 2018 or whenever the day of reckoning comes.

    The addition of all those additional social sector jobs isn't what we need.  Jobs are good absolutely, but we need more productive jobs.  As a nation we should use our entrepreneurialism and innovation to make stuff, sell it to the rest of the world and save or invest in PRODUCTIVE things, not spend it on more consumer goods and experiences. That's the responsible thing we should do if we want to have a viable future.

    Thanks for letting me rant.  I just think articles like that show the fact that as a nation we don't understand or take seriously our overspending and the true economic reality of this country.


    The commentary used as a starting point the notion that by 2018 there will be plenty of jobs out there, and that many of them will be filled by aging baby boomers looking for “encore careers.” One MNB user responded:

    That’s all find and good as long as society ensures there are QUALITY opportunities for the next generation to make their mark.  I know a number of excellent and dynamic recent graduates of teaching colleges who can’t find positions even substitute teaching.  This is because many retired teachers have great connections at their former schools and are called first for any opportunities to substitute teach (and top up their RRSPs).  How are the younger ones to gain experience and get established if the “experienced” guard doesn’t relinquish a bit to give them some opportunities?

    The problem is that the experienced ones either don’t want to retire or can’t afford to.

    Speaking as an aging baby boomer, I certainly want the next generation to have all the opportunities in the world...but I’m not prepared to stop being productive in order to make room.




    We also had a story last week that mentioned how a two-and-a-half year old instantly understood how to use an iPad ... which teaches us much about the challenges of marketing to and communicating with the next generation of consumers. It also led one MNb user to write:

    When my grandson was about the same age as this little girl (he is now 17), he came to my house one evening to stay while his parents shopped.  He brought along his lap top computer; he was using his diaper bag as the “case” for the laptop.  He reached in his diaper bag, pulled out the lap top and proceeded to start up and play some games.  I sat there just wondering how a child who could understand how to get in and out of programs on his computer couldn’t quite figure out the diaper thing.

    And he’s a lot closer to being tomorrow’s shopper than that two-and-a-half year old...


    Also got the following email from Dale Twining of the Private Label Manufacturers Association:

    I just read your comments on the item from Marketing Daily, which quoted PLMA’s most recent consumer study on Recession, Recovery and Store Brands: What Consumers Are Saying Now.

    I’m sorry for any confusion. Hopefully, answers to any questions you have can be found in the full report...

    Referencing your query on the sample, the study was conducted in conjunction with GfK Roper’s weekly OMNITEL survey of American shoppers. From their statement of methodology:

    OMNITEL is a weekly national telephone omnibus service from GfK Roper… The sample for each week's OMNITEL wave consists of 1,000 completed interviews, made up of male and female adults (in approximately equal number), all 18 years of age and over… The raw data are weighted by a custom designed computer program, which automatically develops a weighting factor for each respondent… Each interview is assigned a single weight derived from the relationship between the actual proportion of the population with its specific combination of age, sex, education, race and geographic characteristics and the proportion in our sample that week. Tabular results show both weighted and unweighted bases for these demographic variables. Because of the use of rigid and replicable sampling, field, and weighting procedures, all OMNITEL studies are parallel to one another. This affords the opportunity to draw trend comparisons, as well as point-in time analysis.

    The results that are cited in the report from PLMA are the weighted tabulations.

    As to your second point, the question GfK asked on shoppers’ perceptions of the economy was worded as follows.

    Q. Looking back over the past few months, would you say recent economic conditions have…

    Improved 17%
    Stayed the same 42%
    Gotten Worse 40%


    The phrases “over the past few months” and “recent economic conditions” were designed to get at what shoppers are thinking in a fairly current sense. The shoppers were never asked to compare the economy now with the period in late 2008 as you’re suggesting.

    As for you final point – cautioning those in the business to resist pegging store brands success to a sluggish economy – I couldn’t agree with you more.
    KC's View:

    Published on: April 12, 2010

    Phil Mickelson won his third Masters golf tournament yesterday with a final round 67 and a final total 16-under-par 272.

    In the Wall Street Journal this morning, this is how they characterized it:

    “In a tournament that began with (Tiger) Woods's tender baby steps to public rehabilitation, it was Mr. Mickelson's aggressive, forget-the-consequences play that seized the championship. Though he biffed the ensuing putt, Mr. Mickelson's brazen, between-the-trees whack Sunday on the 13th will be replayed for eons as an example of playing to win versus playing not to lose.”
    KC's View:
    I’m not even a golf fan, and I felt good about watching the end of the Masters yesterday. It could have been a finish in which a lot of people felt dirty. Instead, pretty much everybody had to feel good. And clean.