retail news in context, analysis with attitude

Published on: June 9, 2010

The Wall Street Journal reports on how some companies - an Accenture survey puts the number at about 25 percent - see improved customer service as the best way to improve sales and market share as the US economy begins to recover. This means that companies ranging from Walgreen to Comcast to American Express are increasing the funding of service initiatives - and also are “dedicating more of their efforts to the customer segments considered most lucrative.”

Here’s how the Journal reports on some of the efforts:

Comcast execs, the story says “see a chance to woo frustrated customers from rivals through word of mouth and by creating pleasant experiences. In another Accenture survey of 5,000 consumers, 69% said they had switched at least one provider because of poor customer service in 2009. That's two percentage points higher than in 2008 and 10 points higher than 2007.

“Walgreen is trying to gain the loyalty of patients with chronic illnesses, starting with diabetes. Since January, it has trained 500 pharmacists to work closely with diabetes patients. The pharmacists set up regular 20-to-45 minute meetings with patients to help them manage their disease. Pharmacists normally meet with patients for about three to five minutes. Walgreen is betting that loyal customers with lifelong illnesses will spend more money at the pharmacy and consolidate prescriptions there.”

As for American Express, it also is “relying on customer service changes to drive growth. It's expanding a training program started last year aimed at getting call-center agents to focus less on resolving calls quickly, and more on building customer loyalty. The reasoning: more loyal customers will spend more money.”

Published on: June 9, 2010

In Norwalk, Connecticut, the Hour reports that Stew Leonard’s is testing a pilot program that revolves around providing free physical examinations - including on-site cholesterol and blood pressure screenings, mammograms, and flu shots - to employees in its original store there.

"We are trying to be front-runners in getting people to receive physicals, so we brought the doctors to (our employees)," said Jill Leonard Tavello, executive vice president of culture and communications at Stew Leonard's. She said that the program was created after the company learned through surveys that many of its employees were not visiting a doctor on a regular basis.

If the program works as expected, Stew Leonard’s plans to expand it to its other stores in Danbury and Newington, Connecticut, and Yonkers, New York.

Published on: June 9, 2010

The Los Angeles Times reports that the Institute of Medicine, the health arm of the National Academies, said yesterday that the US Food and Drug Administration,”is too often caught flat-footed” when food safety problems occur, and urged FDA “to focus more on preventing outbreaks of illness by targeting facilities and products most likely to make people sick.”

However, the report conceded that a comprehensive risk management approach to food safety would require a major “cultural change,” and the Times notes that “devising a proactive plan would include pulling together fragmented food safety information in a master database that would allow the FDA, other federal, state and local agencies, and industry to share information to prevent food borne illnesses.”

And, the Times writes, “The report said the federal government should put food safety under one regulatory roof. Currently, the FDA is responsible for overseeing the safety of about 80% of the nation's food supply, including produce, seafood and most dairy products. Most of the remainder, including meat and poultry, is overseen by the Department of Agriculture, though more than a dozen other agencies also have a hand in food safety.”

Shortly after the report was issued, Pamela G. Bailey, president/CEO of the Grocery Manufacturers Association (GMA), said, “We fully support the report’s recommendation that the US Food & Drug Administration should implement a risk-based approach to food safety.  By providing the FDA with the resources and authorities the agency needs to help make prevention the focus of our food safety strategies, combined with increased industry resources and vigilance, we can greatly enhance the safety of our food safety system.”

Published on: June 9, 2010

The Miami Herald reports that Winn-Dixie later this week will open a Florida version there of its Louisiana new prototype store - which it says has been described as being like a “Whole Foods with cheaper prices.” The store is Winn-Dixie’s first new Florida store since 2004, and CEO Peter Lynch said that it “really speaks volumes about the fresh and local strategy we've been working on. It really gets this new brand image out there with the consumers. As they see these new stores, they can see clearly where we're heading for the future.''

The story describes the store this way:

“Customers walk in and immediately get an expansive view of everything fresh, from the wood-burning rotisserie oven to the fresh flower shop.

“One of the most impressive features is an expanded deli with a wide variety of options for consumers looking to get prepared meals on the go. There's a rotisserie bar where prime rib, chicken and smoked turkey will be carved to order. A global cuisine station features more than a dozen selections of Creole and Hispanic hot food. There's also a Southern style barbecue bar and New York style specialty sandwiches. Plus, a selection of gourmet entrees and side dishes like crab cakes and eggplant rollatini.

“Most of the prices are affordably priced in the range of $4.99-$6.99 per pound, as well as fixed meal prices in the same range ... Overall, the store will have twice as many specialty items as any other Winn-Dixie. That includes a wider selection of gourmet, Latin, Kosher, Latin American and Caribbean food. Plus, there are about 2,000 natural and organic items, about 30 percent more than in the typical store.

“The hope is that this store will draw in more upscale customers, who gave up on Winn-Dixie as the stores became aged and ragged.”

Published on: June 9, 2010

The Wall Street Journal reports that Sen. Kirsten Gillibrand (D-New York) has been behind the effort to extend New York’s requirement that chain restaurants prominently display item calorie counts to the entire country - a rule that will go into effect next year as part of the Obama health care reform package.

Opponents, however, suggest that Gillibrand merely reflects a liberal tendency to micromanage consumer choices.

Gillibrand, the story notes, also is pushing for legislation that would ban artificial trans fats in public school lunches, and other laws that would encourage the opening of stores in so-called urban “food deserts.”

The writes, “The Democratic senator's positions on food highlight one of the quirks of her work in Congress: She is the first New York senator in decades to sit on the Agriculture Committee. That may seem an odd fit, but Manhattan Borough President Scott Stringer said she has redefined the role to focus on getting healthy, fresh food to large urban areas, which he insisted will be an important issue for years to come.”

Published on: June 9, 2010

The Financial Times reports that the latest performance figures from Dollar General - same-store sales up 6.7 percent - suggest that the retailer is luring low income shoppers away from Walmart, which saw its US same-store sales decline 1.4 percent during the same period.

Dollar General CEO Rick Dreiling tells FT that his analysis shows that customers are visiting his stores more often and spending more money: “We also believe that we are continuing to attract new customers. It is evident that consumers continue to make significant behavioural changes in their spending habits ... I think it’s fair to say that consumers have reset their spending norms.”

FT notes that Dollar General plans to open 600 new stores this year.

Published on: June 9, 2010

• In Chicago, CBS News reports that Walmart has begun a radio ad campaign designed to get residents to pressure elected officials into approving its application to build a new store on the city’s South Side.

"Good jobs are hard to find. But there could be more than 350 new jobs if Wal-Mart is built in Pullman Park," the ad says. "The South Side wants Wal-Mart, because Wal-Mart means opportunities."

Walmart, which only has one store operating within the city limits, has been stymied in its efforts to build more stores by a combination of union lobbying and neighborhood activists who fear that the creation of Walmart jobs will result in the closing of locally owned businesses and the elimination of other, higher-paying jobs.

Published on: June 9, 2010

Bloomberg reports that a California appeals court has ruled that Walgreen can proceed with its litigation challenging a San Francisco law banning the sale of tobacco products by drugstores with pharmacies. Walgreen’s appeal is based on its argument that it is unfair not to apply the law to other retail venues with pharmacies, such as supermarkets and big box stores.

A San Francisco judge had dismissed Walgreen’s case, but the appeals court now puts it back on track.

Published on: June 9, 2010

In conference circles, this is what is called a “get.”

The Consumer Goods Forum (CGF) announced this morning that the Prince of Wales will make the opening keynote address - on the subject of “Food Within Nature’s Limits” - at the CGF Summit scheduled to take place in London June 23-25.

The CGF is the new organization created by the merger of CIES, the Global CEO Forum and the Global Commerce Initiative (GCI).

Published on: June 9, 2010

The Los Angeles Times this morning reports that Walt Disney Co. plans to shutter its ESPN Zone chain, which offer burgers and beer in a sports-themed setting.

“It's unclear what has prompted Disney to close the establishments, although the bars may well be a casualty of the recession,” the Times writes. “A poll released in March by AlixPartners found that 30% of consumers planned to eat out less frequently, and spend less per meal than they did the year before. In addition, some of the ESPN Zone restaurants are in high-priced real estate areas, such as Times Square in New York.”

Published on: June 9, 2010

• In Scotland, the Herald reports that Whole Foods is in advanced negotiations to open a store in a former Safeway location near Glasgow. While Whole Foods operates in and around London, this would be its first Scottish unit.

• Bloomberg reports that Amazon.com is being sued by Ce De Candy, the maker of “Smarties” candies, which wants to stop the company from selling its products. The manufacturer says that Amazon is selling to US consumers Smarties that are manufactured by Nestle for sale exclusively outside the US.

Published on: June 9, 2010

...will return.

Published on: June 9, 2010

• The Los Angeles Lakers went to Beantown and defeated the Boston Celtics 91-84, taking a 2-1 lead in the best of seven NBA championship series.

• Steven Strasburg, the rookie pitcher just called up from the minor leagues by the Washington Nationals, recorded 14 strikeouts in his debut game last night as the Nationals defeated the Pittsburgh Pirates 5-2.

Wow.