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    Published on: May 20, 2010

    Now available on iTunes…

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    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.


    A few weeks ago, I reported to you about the opening of a new Stop & Shop in my town. If you’ll recall, I noted that this new store seemed to be an attempt by Ahold to cover its flanks at a time when there is increasing competition in the area; it already has a small store in town, and it seems to have bought this unit from Shaw’s as a way of preventing yet another competitor from entering the marketplace.

    I described the new supermarket this way:

    “The new Stop & Shop is a nice store. It has a new paint job, and new signs ... The produce department is improved, there seem to be fewer out of stocks, and it now has self-scanning, which is terrific. In other words, it is a real improvement over the Shaw’s store, which was pretty much a celebration of mediocrity.

    But it only is a nice store. And the question is whether that will be enough.

    Stop & Shop is going to have to sell folks on the fact that it is local and easy to shop. It is going to have to do so while facing retailers that specialize not just in sizzle, but also in some pretty innovative steak - retailers that are very, very good at defining and then exploiting their own differential advantages. They have strong brand identities, and they work at capitalizing on their strengths at every opportunity.”

    Well, one of those new competitors opened yesterday. And blew me away.

    Whole Foods has opened a new 50,000 square foot store about a quarter-mile from my house, and it would be an understatement to say that the town has welcomed it with open arms. It replaces what used to be an old Howard Johnson’s motel that mostly was patronized by truck drivers and hookers, usually at the same time, because the lot has easy access to the Connecticut Turnpike. Let me tell you, the Whole Foods is a lot easier on the eyes and a lot better for the stomach and the soul.

    The store opened yesterday and was previewed for residents on Monday night...and you couldn’t get a parking space anywhere. The new unit is bright and colorful and animated...as one might expect, it celebrates fresh foods, exalts the dual values of nutrition and health, and brings an entirely different level of foodservice to the town with barbecue and sushi and a juice bar and a deli...I suspect the trial will be high, and that a lot of other local food retailers - ranging from Stop & Shop to local independents - are going to see some impact.

    As for prices, a highly nonscientific survey suggests that some are high and some are highly competitive. A Whole Foods spokesman told me that they’re out in the market checking on the competition every week, and that they are resolute about not being undersold. Now, this works better in theory than in practice, since there are a lot of products in Whole Foods that the competition does not carry. But I’ll tell you this. I’ll be checking my register receipts from places like Stew Leonard’s a lot more carefully in the coming weeks, and comparing them to Whole Foods’ prices.

    My simple, early conclusion is this. Whole Foods is bursting with vitality, and retailers competing with it cannot afford to be seen as tired, or even as same-old, same-old. I know a lot of you disagree with me on this, but a conventional approach to food marketing will yield only conventional results.

    Whole Foods’ bar is a lot higher than that. And now, if you’ll excuse me, I need to go down to visit its sushi bar, where the range of sushi is impressive and incredibly fresh, made right on the spot. By way of comparison, the sushi sold at the new Stop & Shop is made at the old Stop & Shop, and shipped over. it’s good, it’s nice...but utterly conventional.

    Conventional doesn’t cut it.

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

    Published on: May 20, 2010

    The Financial Times reports that Procter & Gamble has launched an online store - http://www.pgestore.com - that is designed to sell its brands directly to consumers, bypassing the traditional brick-and-mortar and virtual retailers that sell its products.

    According to FT, the move is a “sign of how digital commerce is shaking up relations between retailers and their suppliers,” and is “part of the company’s drive to increase its total online sales ... P&G, the world’s largest consumer goods company, argues that the initiative represents a direct challenge for retailers, describing it as a ‘living learning lab’ that will ‘help us listen, learn and collaborate with online shoppers’.”
    KC's View:
    This is a lot more than a “learning lab” or experiment. This is a broadside shot across the bow of the retail community.

    You actually could see this coming from a mile away. P&G has long experimented with direct-to-consumer online sales of products like cosmetics. This is the next step in an inevitable evolution.

    It may simply be that P&G is tired of paying slotting allowances, tired of sponsoring golf tournaments (which it doesn’t do much anymore), tired of helping to support companies that suddenly are in love with private label, tired of exhibiting at trade shows where it doesn’t sell much, and tired of having to bow and scrape to a retail community that it sees as being sometimes adversarial and usually self-serving.

    In my mind, the question is not whether P&G will be successful in these efforts. The real question is how many other manufacturers are considering similar moves.

    Published on: May 20, 2010

    Marketing Daily reports that Walmart has “announced another round of deep price rollbacks on 22 favorite foods and everyday items, slashing an additional 30% off these products, citing evidence that its core customer is still feeling pinched by the economy. It says its research has found that mothers across the U.S. continue to worry about finances, with 75% searching for dollar-stretching deals.”

    Walmart, which says that the new rollbacks are “the most significant rollbacks in the company's history,” estimates that “the reductions will save the average Walmart grocery shopper an additional $28 each week,” according to Marketing Daily.
    KC's View:
    Maybe I’m wrong about this, but...

    In a lot of ways, I really like the new Walmart commercials about its rollback program. But in the back of my mind, every time I see one (which is often - they are ubiquitous) it occurs to me that Walmart’s entire value proposition was based on always having the lowest prices. When it says that it is rolling back those prices, isn’t it conceding - at some level - that the prices previously were not as low as they could have been.

    But maybe I’m wrong about this...

    It also occurs to me that in order to get those rollbacks, Walmart must be putting extra pressure on its suppliers...like Procter & Gamble. Which could help explain why companies like P&G may see direct-to-consumer sales to be more attractive.

    Published on: May 20, 2010

    Caribou Coffee, the nation’s second largest coffee chain, has been shifting its brand image from being a place that simple serves beverages designed to keep you awake to one that is “a brand central to an engaged lifestyle,” according to a story in Nation’s Restaurant News.

    “Starting with the introduction of several premium menu items in the fourth quarter of 2009 and including the rollout of vibrant brand materials in March and a relaunched website in April, Caribou sought to elevate its positioning in the marketplace with a new look and greater focus on the customer experience,” NRN reports, adding, “Since the arrival of chief executive Mike Tattersfield in August 2008, Caribou had changed course from system expansion to improving service and growing sales at the unit level, officials said. As the rebranding developed over the latter part of 2009, it encompassed not only a new look, but new product offerings as well.”

    “We did a lot of soul searching in terms of what’s at the core of our brand proposition, and the customer experience rang so loud and critical,” says Alfredo Martel, the chain’s senior vice president of marketing. “So we recommitted to living up to providing that experience, and the path was product innovation.”
    KC's View:
    Full disclosure...Caribou Coffee is a valued MNB sponsor. But I would have done this story if it were not, so I did not want to penalize Caribou for its good taste in sponsorship venues.

    I just like the positioning of the company as “a brand central to an engaged lifestyle.” It isn’t necessarily for every brand, but it certainly is the right choice for any aspirational brand.

    Published on: May 20, 2010

    Wakefern Food Corp. has been chosen as the 2010 recipient of the prestigious Harold R. Hawkey Exceptional Employer Award, honored in recognition of the health and wellness initiatives it has implemented for its more than 1,500 associates. These programs – designed to promote healthy lifestyles, prevent disease and manage existing medical conditions – include a company-wide weight loss contest, walking club, health fairs, exercise classes and fitness center membership reimbursement, to name just a few.

    This annual recognition is given to a New Jersey company of distinction by the Employers Association of New Jersey (EANJ), and will be presented at the EANJ 94th Annual Meeting on Wednesday, May 19, 2010 at The Imperia in Somerset, NJ. 
    KC's View:

    Published on: May 20, 2010

    Fast Company has a terrific little story about how MNB-fave Burgerville, the 39-unit Pacific Northwest fast food chain, has started providing nutritional information on customer receipts. The receipts do not just provide this data about the food people order, but also offers healthier alternatives; if a person orders a milk shake, it lets them know that a smoothie is a tasty but healthier option.

    A pilot program by Burgerville got such positive response from shoppers that the company is rolling it out chain-wide this week.
    KC's View:
    Yet another reason why, IMHO, Burgerville is the class of the field when it comes to fast food. No contest.

    Published on: May 20, 2010

    USA Today reports that KFC is on the verge of selling its 10 millionth Double Down - the bacon and cheese sandwich that is surrounded by chicken breasts instead of bread, the fried version of which has 540 calories, 32grams of fat, and 1,380 milligrams of salt. This success means that KFC will make the Double Down a permanent part of its menu; originally, it was scheduled to go off the menu on Sunday.

    The company says that the Double Down is one of its most successful product launches.
    KC's View:
    Clearly, Americans have spoken. It may be fat Americans with high blood pressure and bloated cholesterol levels, but they get a voice, too.

    There may be wailing and gnashing of teeth in the health care and nutritionists communities, but KFC shareholders are going to be happy, and the chain’s executives have to feel like they are sitting pretty.

    You can’t stop companies from selling crap like this. You can’t stop people from eating crap like this. Nor should we.

    Though it seems entirely reasonable to me that it is appropriate public policy to insist that KFC and its brethren inform people about the product’s calories, fat and sodium levels. And it seems like appropriate private policy for companies to insist that people who eat in such a way that their health is negatively affected should pay more for health insurance. People need to have a level of personal responsibility...and they need to have the data so they can make informed choices.

    For me, the assiduous responsibility of a company like Burgerville is far more attractive than the practices of KFC. Even more important, Burgerville’s food is a lot better. No contest.

    But that's me.

    Published on: May 20, 2010

    The Wall Street Journal reports that while ground beef prices have gone up by double-digits over the past year, fast food chains that include McDonald’s, Wendy’s and Burger King are “wary of losing customers” and so “are absorbing the increases and trying to steer diners toward chicken, salads and other more profitable offerings” such as frappes (McDonald’s), deli sandwiches (Jack in the Box) and pork ribs (Burger King).
    KC's View:
    What this tells retailers competing with the fast food chains for share of stomach - and if you are in the food business, you are competing with them - that the battle ground may be changing.

    Interesting that there are three fast food-oriented stories this morning.

    Published on: May 20, 2010

    The Chicago Sun Times reports that “Kmart will open in June a laundromat, called KWash, in the back of a Kmart store in Iowa City, Iowa, aimed at letting shoppers wash their clothes while they buy milk, bread and other groceries.

    “The laundromat, part of what parent company Sears Holdings Corp. calls its ‘test-and-learn philosophy,’ will have 31 washers and 30 dryers, free high-speed wireless Internet access, a wash and-fold drop-off service, and a rewards system for frequent users.”
    KC's View:
    My first reaction to this story was that some companies lead lives of quiet desperation...and some are a lot louder about their desperate moves.

    But maybe, in this case, Kmart is onto something. It isn’t the dumbest idea I’ve ever heard. And I’ve heard of dumber ideas that have been successful.

    Give them credit for testing and learning.

    Published on: May 20, 2010

    • The Philadelphia Business Journal reports that Wegmans plans to build a store in King of Prussia, Pennsylvania, making it the chain’s seventh store in the Philadelphia region.

    • PriceRite, the Wakefern-developed discount format, will bring its third store to the Buffalo, New York, market when a unit opens in Cheektowaga this coming Sunday. The company says that the 40,000 square foot store continues the format’s “tradition of savings and convenience of warehouse club-style shopping without the membership fees or bulk-buying requirements.”

    NamNews reports that Canada’s Sobeys has a new private label line called “Signal,” which it says will offer the lowest prices in its stores. According to the story, “the range will include staples like fruit jams, maple syrup, and beef burgers, as well as household products such as light bulbs, plastic cutlery, and napkins.”
    KC's View:

    Published on: May 20, 2010

    • CVS Caremark-owned Minute Clinic announced that it has named Paulette J. Thabault, RNC, MS, JD, as its new Chief Nurse Practitioner Officer.   Most recently, Thabault was the Vermont Commissioner of Banking, Insurance Securities and Health Care Administration.
    KC's View:

    Published on: May 20, 2010

    MNB reported yesterday about the continuing march of online grocery, pure-play Fresh Direct northeast from New York into Connecticut. Which prompted one MNB user to write:

    Fresh Direct and Fairway were my accounts when I worked at Supervalu.

    Some of Fresh Direct's motivation stems from a general dislike for Fairway resulting from a failed partnership years ago. Fairway recently opened its Pelham Manor store in Westchester County and will open in Stamford, CT this fall. Rather ironic that Fresh Direct would target these particular counties now.

    As recent as 12-18 months ago, the focus was to expand further into Long Island. It appears they chose to table that for the more affluent areas Fairway is also targeting.


    A new slogan for FreshDirect? Revenge is a dish best served chilled.



    Regarding Walmart’s decline in US same-store sales, one MNB user observed:

    I suggest that Wal-Mart’s same-store sales decline may be partially attributed to their clean store policies.  Sam Walton understood the excitement created by merchandising unique items in the “action alley.”  So does Costco.  These are the profitable items that shoppers purchase on impulse, and that generate incremental sales volume.  By cleaning their aisles, Wal-Mart has removed much of the excitement from their stores, as well as the incremental, impulse sales opportunities.

    So cleanliness is not next to godliness?

    Go figure.
    KC's View: