retail news in context, analysis with attitude

Published on: April 21, 2010

by Kate McMahon

Drama. Matters of “life and death.” Tears. Cheers. An impassioned aspiring hero. An acid-tongued nemesis. And Alice, the feisty cafeteria lady, defending her breakfast pizza.

Welcome to “Jamie Oliver’s Food Revolution,” a hit on TV and the impetus for articulate, heartfelt discussion in online communities about food, health and future of our nation’s children.

The six-part series stars Oliver, the chummy Brit of “Naked Chef” fame and one-man marketing marvel, taking his “revolution” to Huntington, West Virginia, which has been cited as one of the most obese and unhealthiest cities in America.

The reality show, which premiered in March, airs its final episode this Friday on ABC at 9 pm ET. Though panned by many mainstream TV critics, “Revolution” has consistently won its Friday night ratings slot and is a huge success with women ages 18-to-34.

Not surprising, since the tousle-haired, 34-year-old Oliver oozes charm while preaching the importance of changing the way America eats, and more specifically, feeds its schoolchildren.

"The time is right for people to rediscover the sense of pride, satisfaction and fun you can get from cooking for the people you love,” says Oliver. Okay, who is going to argue that?

Well, the combative local talk radio host, DJ Rod, for starters. “We don’t want to sit around and eat lettuce all day. Who made you king?” he says, kicking off a public feud. And the public school food service staff, hindered by budgetary constraints and bureaucracy, doubts his pledge that the kids will give up french fries and greasy foods for healthy alternatives. Oliver clearly meets his match with Alice, the quintessential cafeteria lady.

And there are the kids – elementary school students unable to identify an array of fresh vegetables, including a tomato -- and high schoolers struggling with devastating weight and health issues. The perfect ingredients for a reality show.

In addition to ratings, “Revolution” has generated dialogue and interest all over the internet, and is a prime example of social networking making a product/show/cause even stronger. Oliver, of course, has a sophisticated website, which includes links to the show and a petition saying America’s kids deserve better food and health prospects. Almost 400,000 people have signed it online. He has links to recipes, health information and online dialogues. On Facebook, there is one page devoted to Oliver’s kitchen in Huntington where locals are learning to cook. In addition, a fan has started a separated Facebook page supporting the “revolution,” and it has almost 91,000 fans. For quick hits, more than 418,000 people follow Oliver on Twitter.

In all of these forums, true concern about food, children’s health and the health of our nation, resonate. There are more genuine posts, and fewer complaints, than any blogs or chat sites I have read. Clearly, Jamie Oliver has reached his audience, and has created a meaningful dialogue with them.

Which bring us to the finale on Friday. The ABC promotions say “Jamie's accomplishments in Huntington begin to unravel when he leaves the city; with the media hounding him, Jamie returns to Huntington for his most-powerful demonstration yet.”

We’ll be watching and will report on the outcome of this revolution.

Comments? Send me an email at kate@morningnewsbeat.com .

Published on: April 21, 2010

The Wall Street Journal reports that Supervalu “says it has reduced items in 10 major food categories by 20%, a move intended to leverage lower costs with suppliers and free up shelf space for the grocer's private-label products.

CEO Craig Herkert told analysts yesterday, “The stuff we took out still positions us to be a leader in assortment and variety ... We were simply so over-assorted before."

The company also said that it was eliminating “26 general merchandising categories such as automotive accessories and fragrances.”

Published on: April 21, 2010

The US Food and Drug Administration (FDA) has denied a Washington Post story that ran yesterday, and was referenced here on MNB, that it plans to begin regulating the use of salt in packaged foods.

The release says, in part:

“A new report from the Institute of Medicine this week concludes that national action is imperative to reduce the sodium content of foods if we are to make significant progress toward reducing the risk of hypertension and major cardiovascular events for Americans.

“A story in today’s Washington Post leaves a mistaken impression that the FDA has begun the process of regulating the amount of sodium in foods. The FDA is not currently working on regulations nor has it made a decision to regulate sodium content in foods at this time.

“Over the coming weeks, the FDA will more thoroughly review the recommendations of the IOM report and build plans for how the FDA can continue to work with other federal agencies, public health and consumer groups, and the food industry to support the reduction of sodium levels in the food supply. The Department of Health and Human Services will be establishing an interagency working group on sodium at the Department that will review options and next steps.

“Success in reducing sodium intake will require coordinated national action, with participation of all. We are encouraged by the fact that some food manufacturers have already begun or announced their commitment to reduce sodium levels in their products.”

Published on: April 21, 2010

The Richmond Times Dispatch reports that many beer and wine stores in the Richmond area are facing new competition, as Ahold converts the Ukrop’s stores that it acquired earlier this year to the Martin’s Food Markets banner - which carry alcohol and are open on Sunday’s, two things that the Ukrop family resolutely refused to do.

The story notes that a number of beer and wine retailers chose locations that were near a Ukrop’s, knowing that shoppers who patronized the supermarket chain would have to make a second stop if they wanted adult beverages. Those same retailers are now trying to figure out how to convince shoppers that one-stop shopping isn’t everything it is cracked up to be.

Published on: April 21, 2010

The Houston Chronicle has a piece today about HEB’s newest format innovation, Joe V's Smart Shop, described as “a discount grocery store” that will open May 5 in northwest Houston.

According to the story, the store will have less assortment compared to a traditional supermarket while aiming to take on all competitors on price on many items ... H-E-B's new concept is an example of a trade-down taking place in retail. Many retailers see a need to offer the lowest prices possible, because increasing numbers of budget-minded consumers are demanding it, analysts say.

“Joe V's is a no-frills operation, resembling a warehouse from the outside.”

Joe V’s is seen as both a response to marketplace realities as well as a preemptive move in case Aldi - which has 20 stores in the Dallas area and more on the way - decides to move to Houston.

Published on: April 21, 2010

• The Financial Times reports that Tesco plans to open as many as 80 stores in China over the next half-dozen years, with one-fifth of them being hypermarkets. The Times notes that at this rate of expansion, it will means that Tesco will create more sales floor space in China over eight years than it has in the UK over eight decades.

• The Mail reports that Tesco CEO Sir Terry Leahy believes that the UK is emerging from the recession and that “recovery has taken hold ... the cycle now is growth.”

Leahy also said that he believed that for recovery to be sustainable, “Any government, not just in the UK, has to get their public finances in order and probably the primary place should be to cut costs.”

Published on: April 21, 2010

The Wall Street Journal has a piece this morning about what might be called agricultural philosophy.

It seems that a number of plant breeders have concocted a new hybrid tomato that blends the taste and consistency of heirloom tomatoes with a product that is more disease resistant, more uniformly shaped, more easily grown and with a longer shelf life. But purists are appalled by the development, saying that the development undermines and corrupts the very nature of what heirloom tomatoes are all about.

Published on: April 21, 2010

Consumers Union, the nonprofit publisher of Consumer Reports, and more than 80 farmers, public health, environmental, and organic food organizations have sent a letter to Michael R. Taylor, Deputy Commissioner for Food at the U.S. Food and Drug Administration (FDA), and to Kathleen Merrigan, Deputy Secretary at the U.S. Department of Agriculture (USDA), expressing what they call “serious concerns that a proposed U.S. position on food labeling would create major problems for American producers who want to label their products as free of genetically modified (GM)/genetically engineered (GE) ingredients.”

According to the press release about the letter, concerns are about a position, drafted by USDA and FDA, that opposes a United Nations document “stating that countries can adopt different approaches to labeling of GE food ... The current U.S. draft position goes even further to say that mandatory labeling of food as GE/GM ‘is likely to create the impression that the labeled food is in some way different’ and would therefore be ‘false, misleading or deceptive’.

The letter says: “We are concerned that the current U.S. position could potentially create significant problems for food producers in the U.S. who wish to indicate that their products contain no GE ingredients. Organic food in particular, which prohibits GE ingredients, are frequently labeled ‘GE-free’ or ‘No GMOs’.”

Published on: April 21, 2010

The Natural Marketing Institute (NMI) is out with a report saying that consumers spent about $290 billion on LOHAS ("Lifestyles Of Health And Sustainability")products and services in 2008. The categories broke out this way:

Personal Health: $117 billion (includes natural/organic food, personal care, supplements, etc.).

Green Building: $100 billion (includes certified homes, Energy Star appliances, etc.).

Alternative Transportation: $20 billion (includes hybrids, diesel vehicles, electric vehicles, car sharing, etc.).

Eco-tourism: $42 billion (includes travel spent on excursions in nature).

Natural Lifestyles: $10 billion (includes home furnishings, apparel, etc.).

Alternative Energy $1 billion (renewable power).

According to NMI, these sales suggest a “$290 billion opportunity” for marketers because it reflects “an integrated, rapidly growing market for goods and services that appeal to consumers who have a meaningful sense of environmental and social responsibility and incorporate those values into their purchase decisions. 

Published on: April 21, 2010

The Arizona Republic reports that there is a new issue emerging as embattled Basha’s looks to emerge from bankruptcy - a “spectacular art collection ... conservatively valued at $16 million” that is “viewed as one of the region's most important collections of contemporary Native American and Western art,” and that was put together by company chairman Eddie Basha, and his aunt, Zelma Basha Salmeri.

According to the story, “The grocery chain and the Basha family have been trying to hold on to the more than 3,000 pieces of art, which are carried on the company's books. The company's creditors have been pressing to have the collection sold to pay debts. Its future is expected to be decided in a Chapter 11 reorganization plan that is still being hammered out between Bashas' and its creditors.”

The story continues, “Since filing for reorganization July 12, the Chandler-based grocery chain has sold airplanes, computer equipment, liquor licenses, pharmacy records and other assets to raise cash. So far, the art collection has been kept off the auction block. McGrath said the Basha family views the collection as an integral part of the company's culture and an irreplaceable community-relations asset.”

Published on: April 21, 2010

The New York Times reports that D’Agostino Supermarkets has launched a new advertising campaign that features a “humorous, make-believe ‘battle’ between the boss and his senior management ... The campaign features actual managers at D’Agostino, who are shown ‘taking over’ from Nick D’Agostino III, the president and chief executive, and offering shoppers who have the chain’s D’Ag Rewards loyalty cards special deals that are billed as ‘up to 75 percent off’ regular prices.

“The specials, on groceries, meat, poultry, produce and baked goods, are peddled with one-liners not often found in the stodgy world of supermarket marketing.”

The piece notes that the campaign has some historical precedent, since D’Agostino’s once was known for “quirky, light-hearted advertising.”

Published on: April 21, 2010

• The National Retail Federation (NRF) is out with a new study saying that “the average person will shell out $126.90 on Mother’s Day gifts, compared to $123.89 last year. Total spending is expected to reach $14.6 billion.

“As one of the biggest holidays of the year, billions will be spent at restaurants or on clothing, jewelry and flowers. Nearly two-thirds (65.2%) of celebrants will buy flowers, totaling $1.9 billion. An additional 51.8 percent will treat mom to a brunch or dinner, spending $2.9 billion on mom’s favorite food. Jewelers will also see some traffic this year with 26.2 percent of people planning on buying a special bracelet or earring set, totaling $2.5 billion. Others will buy clothing or clothing accessories ($1.3 billion), gift certificates ($1.5 billion), personal service such as a day at the spa ($933 million), consumer electronics ($906 million) and greeting cards ($671 million).”

• Crain’s Chicago Business reports that Chick-Fil-A Inc. plans to open a restaurant in Chicago next year, part of its new strategy to enter urban markets ... The private, family-owned chain popular in the South for its fried chicken sandwiches plans to have at least 25 Chicago-area Chick-Fil-As in the next five years and is using Chicago as a test market for developing urban restaurants.”

Published on: April 21, 2010

• The Great Atlantic & Pacific Tea Co. (A&P) said yesterday that it has hired Mark Kramer, a former Pathmark executive (before its sale to A&P) who most recently was regional vice president for operations at Rite Aid, to be its new senior vice president of operations. He succeeds Paul Wiseman, who has left the company.

• Supervalu announced that it is making changes to the size and composition of its board of directors:

“Actions include reducing current board membership from 15 to 12 directors, adding two new directors to bring new perspectives to the board’s oversight of the company, and naming a non-executive chairman.

“After many years of distinguished service, five board members are leaving the company. As planned following his 2009 retirement announcement, Jeff Noddle, age 63, current chairman of the board and former chief executive officer of Supervalu, will be retiring effective at the company’s annual meeting in June 2010. Lawrence A. Del Santo, age 76, who has been a director since 1997 and lead director since 2006; and Garnett L. Keith, Jr., age 74, are also retiring from the board effective at the annual meeting. In addition, A. Gary Ames, 65, and Marissa T. Peterson, age 48, whose terms would expire in 2011, voluntarily resigned from the board effective April 14, 2010.

“The board also announced that it is nominating Matthew E. Rubel, age 52, chairman, CEO and president of the footwear, accessory and lifestyle brand company Collective Brands, Inc. (owner of Payless ShoeSource), and Donald R. Chappel, age 58, senior vice president and chief financial officer of The Williams Companies, Inc., an energy transmission company, to stand for election at the company’s annual meeting.

“Finally, the board expects to name Wayne C. Sales, age 60, retired vice chairman of Canadian Tire Corporation Limited and a director of Supervalu since the Albertsons acquisition in 2006, to the newly created position of non-executive chairman following the annual meeting.”

Published on: April 21, 2010

...will return.