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    Published on: May 4, 2010

    by Michael Sansolo

    As a rule, I don’t tend to make a lot of friends on airplanes. People will tell you that ordinarily I’m very friendly on the ground, but in the air my goals are simple: sleep, work and read. It takes a lot for me to talk to my seat mates and recently I got a great lesson for doing just that.

    It happened when the woman next to me on a packed plane just caused me too many questions for me to avoid contact. What she looked like wasn’t the cause. It was a combination of things.

    First, she was reading a magazine article with a headline I must admit commanded my attention: “50 Great Things To Do With Your Breasts.” To be clear about this, the magazine was Cosmopolitan so you know it wasn’t about poultry. (By the way, I came up with feed small babies and distract grown men. What are the other 48 ideas?)

    Second it was impossible to miss her new manicure in a rather strange shade of blue, a color that I thought only appeared on fingernails if you were out of oxygen.

    But what really caught my attention was the book she had on her tray: The Prince by Machiavelli. Seriously, I have never seen anyone read that book without a political science class around him or her. So I had to ask why.

    It turned out she was reading the book because of an argument with a co-worker over one of the “discourses” that make up the balance of the book that follow the famous essay on leadership. My seat mate, it turned out, was a chemist working on genetic splicing equipment who was flying cross-country to meet an important client. (The blue fingernails were the idea of a friend’s teen-aged daughter.)

    Right there I got a powerful lesson on the complexity of consumer behavior. Think about it, when I described the woman with the Cosmo article and blue fingernails you probably had a mental picture forming. When I talked about The Prince and genetic splicing, the picture changed. Yet it was the same person.

    And that’s the challenge with today’s shoppers who become so many different people in the course of one day, one shopping trip or one flight. There is no reason you can’t read Cosmo and The Prince, in fact, Machiavelli might have applauded the mix.

    Today shoppers are more complex than ever. They draw a value equation out of a mix of needs and do it somewhat differently product by product. The trick for good merchants or product manufacturers is to create a narrative of value that works clearly with a sufficient number of moods.

    It also made me think of the Coca-Cola Retailing Research Council study called Eating In that I will help present at this year’s Food Marketing Institute (FMI) show in Las Vegas. (Full disclosure: as previously noted here, I am the new research director of the council.) One part of the study details the different need states that make up mealtime decisions and tries to help us understand how the same person rushing for fast food one night becomes a gourmet cook another night. It doesn’t make sense, but it happens. And our ability to service both moods positions us better than ever to win additional sales, which is a winning strategy in any time period.

    Machiavelli would likely agree. So would Cosmo.

    Michael Sansolo can be reached via email at . His new book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
    KC's View:

    Published on: May 4, 2010

    The Phoenix Business Journal reports that discount food retailer WinCo Foods is planning to enter the Phoenix marketplace. One location has been identified in the northern part of the city, and the retailer reportedly has its eye on a couple of other sites.

    While WinCo is seen primarily as competition to Walmart - which not only has supercenters in the area, but also Neighborhood Markets and its Supermercado and Marketside formats - there is no dearth of food stores in Phoenix.

    According to the Journal, “Fry’s, a subsidiary of Kroger Co., is the most prominent large grocer operating here. Safeway, Albertsons, Walmart, Sprouts Farmers Market, Sunflower Market, Trader Joe’s, Costco, Fresh ’N Easy, Ranch Market and Whole Foods also have carved out niches, some stronger than others. Bashas’, the locally owned grocer that also operates the high-end AJ’s Fine Foods and discounter Food City, remains in Chapter 11 bankruptcy reorganization, and its future is the subject of speculation. Target continues to expand its grocery footprint, almost tripling space for food products from 8,000 to 22,000 square feet in stores not designed originally for that purpose.”
    KC's View:
    Just because the terrain may be crowded doesn’t mean that there isn’t room for another player ... especially one as accomplished as WinCo.

    Published on: May 4, 2010

    In Minnesota, the Star Tribune has an interview with Supervalu CEO Craig Herkert, the former Walmart executive who has just completed his first year at the retailing-wholesaling colossus. The story notes that Supervalu’s various formats “have been hit particularly hard by the recession, which has sent shoppers scurrying for deals. Falling food prices in 2009 didn't help matters for food retailers.

    “The result: Falling same-store sales, a trend that only got worse for Supervalu in its most recent quarter, despite an uptick in the U.S. economy. Fewer customers have been trekking to Supervalu's stores and they're buying less -- and there's no quick end in sight to the decline.”

    According to the story, “Herkert is confident he and his new executive team will turn the tide. About half of his direct reports are new, including Supervalu's head of
    merchandising, its chief information officer and its chief marketing officer. The last position seems particularly important. ‘Frankly, we have not had a great marketer who really could help us understand how to build and maintain relevance for our brands,’ he said.”

    Other excerpts from the interview:

    The economy... “The very challenging macroeconomic environment has been more troubling than I would have expected. Real American consumers have been challenged. It's been well publicized -- double-digit unemployment.”

    Private brands... “The key thing is they are a value proposition for the consumer. So when a consumer comes to any one of our stores I want her to be able to make a choice. If she wants to buy a national branded product, I want to have that national branded product at a fair price for her. If however she chooses to want to buy something that is a better value, then I want to have that. We have a great private brand program. Quite frankly we haven't stepped up and really shown off that fact to Mom.”

    Regarding plans for the limited assortment Save-A-Lot chain... “Given the state of the economy ... we're not focused today on growth in our traditional retail stores.”
    KC's View:
    The question that some of us have about Supervalu is whether the new leadership there is so focused on one kind of customer patronizing one kind of store in one kind of economic environment that the company could be caught flat-footed if things get better, or just go differently from how management prognosticates.

    Published on: May 4, 2010

    The Los Angeles Times has an interesting story about farmers markets:

    “Farmers markets have increased choice and improved the quality of fruits and vegetables for shoppers, and, perhaps most radically, they have provided farmers with a way to actually earn more money by selling food with flavor, as opposed to mainstream farmers who grow primarily for volume.

    “But what's even more remarkable is that farmers markets have achieved all of that despite what has to be one of the most inefficient business plans ever devised. If you wanted to design a market from scratch, this almost certainly wouldn't be the way you'd do it. Let's see … it'll be open for only four hours a week. If a customer can't make it, they miss it. Let's just stick the markets wherever we can. And if shoppers can't find a parking spot, they miss it. For farmers, there's the not inconsiderable matter of having to drive hundreds of miles every day to spend hours standing outside, weighing lettuce and making change.”

    The story notes that there are more alternatives than ever to farmers markets - for one thing, the move toward local sourcing of products means that shoppers can find high quality local produce in their neighborhood supermarkets. Furthermore, the Times writes, “There are other, less commercial possibilities. CSAs, or community-supported agriculture programs - you know, the ones where you sign up for a subscription and get a box of produce every week - are popular up north and are such a boon to small farmers economically, and now they finally seem to be catching on in Southern California.”

    The Times writes, “The farmers market revolution may have been born in farmers markets, but if it is to continue, there will have to be other paths as well. Farmers markets as we know them now will always exist ... But if we are going to continue to improve the opportunities for small farmers, and if we want to continue to improve shoppers' access to great produce, we also need to look at alternatives, at other ways of achieving the same goals. These are not replacements for farmers markets but complements.”
    KC's View:

    Published on: May 4, 2010

    • Walmart reportedly has agreed to write a check for $27.6 million to settle charges that some of its San Diego County employees were illegally dumping hazardous waste. Reuters reports that “the accord calls for Wal-Mart to pay a $20 million fine, $3 million to improve store maintenance, $3 million for other environmental projects, and $1.6 million for legal costs.

    “Bonnie Dumanis, the San Diego County district attorney, called the settlement one of the largest of its kind in the United States. Nineteen other prosecutors, including California State Attorney General Jerry Brown, and 32 environmental health agencies joined the accord.

    “Phyllis Harris, Wal-Mart's vice president of environmental compliance, said in a statement the retailer has worked closely with California on a comprehensive hazardous waste plan that includes improved training programs, policies and procedures.”
    KC's View:
    No matter how penitent Walmart may be, situations like these do make it a little harder for the Bentonville Behemoth to make the case that its environmental concerns are sincere and pervasive throughout the company. Not impossible, but harder.

    Published on: May 4, 2010

    • Catalina Marketing announced it has acquired Invenda Corporation’s digital couponing businesses, E-centives and Collabrys.  According to the company press release, “With 14 years of experience working with CPG companies on digital couponing, customer relationship marketing database management services, email marketing, and website development, E-centives brings three critical elements to the table: established technology platforms, proven, innovative industry professionals, and a valuable portfolio of intellectual property and patents.”
    KC's View:

    Published on: May 4, 2010

    • The US Food and Drug Administration (FDA) announced that Stephen Sundlof, director of the Center for Food Safety and Applied Nutrition, is leaving the agency to take a position with the Virginia-Maryland Regional College of Veterinary Medicine.

    The deputy director of regulatory affairs at the food safety center, Michael Landa, will become acting chief until a permanent replacement is named.
    KC's View:

    Published on: May 4, 2010

    ...will return.
    KC's View: