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: August 2, 2010

    Sometimes, we learn things from the most chance encounters. It is all a matter of being open to the moment.

    For me, the most recent example of this came on Saturday night, in San Francisco. I was there for my second time in a week, having been asked to give a speech in Squaw Valley. I brought my 16-year-old daughter with me, thinking she would be good company and it would be an opportunity to show her some of Northern California.

    I’ve written here numerous times of how much I liked Cafe Zoetrope, and I decided on Saturday night to bring my daughter there. We found ourselves sitting to a very nice couple, and engaged in conversation with the husband, Alejandro de la Loza, a Southern California sculptor who makes a living as a high school art teacher.

    Here is what I learned...and it is a wonderful metaphor for business.

    Alejandro described for us the challenges of teaching high school art, that the skill abilities and interest levels can be all over the map. His goal is to engage each of his students in a way that works for them, not for him. That’s incredibly important, I think, and I’m not just speaking here as a pundit, but as someone who has seen both good and bad teachers over the years. My eldest son, now almost 24, put it succinctly a decade ago when he had a teacher he liked: “He teaches the kids, not the subject,” he said.

    In all of our organizations, that’s something we need to integrate into our leadership strategies - that each employee is a different person, with different skill levels and different ways of learning. To treat them all the same, to talk to them all the same way, may seem like the most efficient way to do things. But I’m betting in the vast majority of cases, it is far from the least effective.

    Alejandro also told us about how he teaches art, and how he integrates writing into his approach. Often, he tells the kids that they are going to make a book - an interesting notion all by itself in a digital world - and provide both the copy and the art. Beyond finding that kids often connect in some primal way to the notion of paper and ink (which will be encouraging to those who believe that physical books will never be replaced by Kindles and iPads), Alejandro encourages them to cut loose as much as possible.

    And he doesn’t worry about mistakes. In fact, he told me, “Mistakes get extra credit!” He wants the students to be as innovative and free-thinking as possible, and sees it as his job to get out of the way of all that creativity. Now, there are a lot of people in business leadership positions who say that they encourage people to make mistakes, but I suspect that the recession has cut down on their number; I also think that “the freedom to make mistakes” is a vastly overworked cliche that gets a lot more lip service than actual adherents. But “mistakes get extra credit”? Now that’s the kind of message that could fundamentally change an organization. Think about it.

    Finally, Alejandro said something extremely meaningful during out conversation, which took place as the waiters were cleaning away the dishes and I was sipping at the end of my Coppola Shiraz. Even people who are not that intelligent will behave more intelligently “if you tell them they are,” he said.

    Another wonderful metaphor that ties into my general feeling that people and companies that refuse to cater to the lowest common denominator will be rewarded. Treat people as intelligent and aspirational and they actually will behave that way.

    So that’s why I learned on Saturday night. Great chilaquiles, wonderful wine, and words to live by.

    Thanks to Cafe Zoetrope for the first two, and to Alejandro de la Loza for the last. (I’d love to take an art class from him, but I’m probably a little old...)

    That’s my Monday morning Eye-Opener.

    - Kevin Coupe
    KC's View:

    Published on: August 2, 2010

    The Los Angeles Times this morning reports that “the International Olive Council, a Madrid organization whose product standards are the basis for new federal olive oil regulations,” is weighing in on the recent report that questioned the purity of many extra virgin olive oils sold on the market, issuing “a scathing rebuttal” to the findings.

    The original report was conducted by the University of California, Davis Olive Oil Chemistry Laboratory and the Australian Oils Research Laboratory, and found that almost 70 percent of imported extra virgin olive oils and 10 percent of domestic extra virgin olive oils did not meet the International Olive Council and U.S. Dept. of Agriculture taste, smell and chemical standards for extra virgin olive oil.” All of the brands tested were bought in a variety of US supermarkets.

    The International Olive Council has now joined with the North American Olive Oil Association (NAOOA) in fighting back against the charges, with the international group saying that the findings and methodology were questionable, and that too few products were examined to make the test statistically significant.

    According to the Times, “In comparison, the council said it annually conducts chemical tests on 200 samples of imported oils sold in the U.S. as part of its routine quality control efforts, and ‘anomalies are detected in less than 10%’ of the samples, according to the statement.”

    The researchers at UC Davis continue to stand by the report.

    The puts the controversy in context: “The UC Davis Olive Center findings, which came out as the U.S. Department of Agriculture rolls out new standards aimed at cleaning up what has long been a slippery business, sent a shockwave through the industry, which has faced mounting criticism over accurate labeling practices.

    “The purity issue also remains a serious concern for some consumers. In the past, some state agencies have uncovered oils labeled 100% extra-virgin olive oil that were blended with cheaper canola or nut oils, which can be a serious health threat to people with allergies. (No such mixing was found in the UC Davis report.)

    “Money is also at stake, because extra-virgin oil can be marketed as a premium retail product. A typical 750-milliliter bottle of olive oil can sell for $8 or less, while the same size bottle of high-end extra virgin oil can go for $12 or more.”
    KC's View:
    First of all, as noted here before, California Olive Ranch - a longtime and valued MNB sponsor - was one of the companies that contributed to the funding of this study, though it had absolutely no input into the methodology or outcome. (I’d help fund a study, too, if I knew that I was being honest about my product.)

    In some ways, it strikes me that some of this discussion is about semantics - after all, the offending study said that 10 percent of US olive oils were not what they said they were, while the international group used the 10 percent figure to describe all of the anomalies that it finds; it is on oils produced outside the US that the Madrid-based group gets more defensive...which may or may not have more to do with geography and economics than with science. (The North American Olive Oil Association uses the same 10 percent figure, BTW...)

    What bothers me is the idea that being wrong 10 percent of the time on the purity of a bottle of EVOO is somehow acceptable. That’s just wrong.

    I cannot help but think that the folks getting so defensive about what appears to be legitimate criticism may be most bothered by transparency that they cannot control...but must get used to.

    Consumers - and, even if it does think so, the olive oil industry - are all better off for people raising these issues and forcing greater honesty and accuracy.

    Published on: August 2, 2010

    In the UK, the Mail reports that in order to compete more effectively with Ocado, the pure-play online grocer that dominates the London delivery market, both “Tesco and Asda are planning a major expansion of their grocery delivery operations in London to challenge newly floated Ocado on its own doorstep.

    “This month, the supermarket giants will each open a 'ghost store' in separate parts of the capital to allow them to deliver more than 10,000 orders a week. The stores will not be open to the public, but each will have more than 300 staff to pick items from shelves and load them into vans.”

    Tesco currently is the number one online retailer in the UK as a whole, while Asda is number two.
    KC's View:
    I’m not entirely clear what the difference is between a “ghost store” and a dedicated warehouse ... but maybe it doesn’t matter. What’s really important is the focus that all these companies are putting on the internet grocery business, saying, in essence, that an offering is incomplete without this component.

    Published on: August 2, 2010

    The Wall Street Journal reports that Colgate-Palmolive and GlaxoSmithKline are involved in a legal dispute over a “nurdle.”

    According to the story, a “nurdle” is “that curvy squirt of toothpaste - perfectly shaped in advertisements - that people use to scrub their pearly whites.” Colgate asked a judge to find that its new package design does not infringe on Glaxo’s Aquafresh toothpaste; Colgate was prompted, the story says, because Glaxo had filed a new trademark application that it said seemed designed to give it the ability to sue people for trademark infringement.

    The Journal writes that “the Aquafresh maker countered with its own suit in the same court Thursday afternoon, alleging that Colgate was attempting to ‘trade off the commercial magnetism’ of Glaxo's Aquafresh brand. In a statement, the company said Glaxo created the ‘highly distinctive’ tricolored nurdle design over two decades ago, and has used it ever since.”
    KC's View:
    I’m sure that the folks at Colgate and Glaxo are very serious about this, and that their lawyers are even more serious - in part because trademark law is their stock in trade, and in part because the billable hours are going to be of great consequence.

    But man, to an outsider who - to be perfectly honest - has absolutely no idea whether my toothpaste has a nurdle or not, and don;t give a damn, this all seems like a colossal waste of time.

    Published on: August 2, 2010

    The Chicago Tribune reports that whole wheat bread has outpaced white bread in total sales for the first time. According to the story, “It's part of a major turning of the tide. Packaged wheat bread recently surpassed white bread in dollar sales, according to Nielsen Co. For the 52 weeks ended July 10, wheat bread sales increased 0.6 percent to $2.6 billion, while white bread sales declined 7 percent to $2.5 billion. White bread is still ahead in volume, but the margin is shrinking. Americans bought 1.5 billion packages of white bread in the last year, a 3 percent decrease, and 1.3 billion packages of wheat bread, a 5 percent increase.”
    KC's View:
    What’s interesting about this story is that, at least my implication, “whole grains”and “whole wheat” are made to sound like the same thing. But it’s always been my impression that this is not true...that there are whole wheat breads that are not much healthier for you than some white breads.

    I always think that the industry needs to be careful about encouraging these kinds of mistakes...that the error may be the media’s, but the fault will be laid at the door of food retailers and manufacturers.

    Published on: August 2, 2010

    • In Scotland, the Daily Record reports that Tesco plans to open a new Express store inside the Glasgow airport.

    "It will allow us to cater for those holidaymakers arriving home and looking for a fantastic range of Scottish favourites at a great Tesco price,” says Tesco corporate affairs manager Tony McElroy. "Our Glasgow airport store will have the same great range and prices as a regular Tesco Express store you would find across Scotland's high streets."
    KC's View:
    I have long been of the opinion - and have stated it here on MNB - that airports strike me as a wonderful place in which food retailers can expand, generating sales from potentially high-value customers and promoting their brand at the same time. It is not surprising that Tesco is the retailer making this move...

    Published on: August 2, 2010

    The Wall Street Journal reports that Coinstar “may try to do for makeup what its Redbox unit has done for movie DVDs. The DVD-vending and coin-counting machine maker is recruiting a vice-president-level manager to oversee a new venture in the beauty or cosmetics space.” It is believed, the Journal reports, that “ Coinstar is trying to develop partnerships in the beauty and cosmetics industry and to develop vending machines that eventually might be rolled out across the U.S.”
    KC's View:
    nteresting..especially in view of this piece that I filed after the Consumer Good Forum (CGF) Global Summit:

    Click here.

    Published on: August 2, 2010

    • Published reports say that is offering 97-cents flat rate shipping on all HBC orders from its site that are delivered within the continental US.
    KC's View:
    So while I was in San Francisco last week, driving in from the airport, I noticed a glistening steel and glass building with “” written across the top in bright blue. And the first thing I thought about as I looked at this building, nestled in the same part of the world as companies like Apple and Genentech, was whether they have card tables and lawn chairs as furniture in the Walmart offices there, just like back home in Bentonville.

    Just curious.

    Published on: August 2, 2010

    • The Arizona Republic reports that “closing arguments are set to be heard Aug. 9 on the proposed Chapter 11bankruptcy reorganization of Arizona supermarket operator Bashas' Inc. After that, U.S. Bankruptcy Judge James Marlar could rule swiftly on the plan, which could enable the company to begin paying off the $300 million owed to as many as 15,000 creditors.

    “Bashas' has proposed paying its secured and unsecured creditors off in full, with installments for three years, followed by a $155 million balloon payment. While the company's unsecured vendors support the plan, it has been opposed by its collateral-holding secured lenders, who are owed about $200 million.”

    Forbes reports that Target Corp.'s remodeling program to add fresh produce at its general merchandise stores and its new credit card discount are exceeding expectations, according to a key retail analyst,” who wrote that “the most recently remodeled stores are experiencing strong sales lifts than older remodels since these revamped stores also have redesigned electronics, beauty and shoe departments.”

    Convenience Store News reports this morning that Casey’s General Stores is facing a third lawsuit from investors that want it to negotiate with Alimentation Touche-Card, the Canadian company that wants to acquire it.

    Casey’s General Stores recently rejected a sweetened bid for the company by Couche-Tard of $1.9 billion, and has launched its own recapitalization bid to buy back as much as $500 million worth of stock at a per-share price higher than that offered by its suitor.
    KC's View:

    Published on: August 2, 2010

    ...will return.
    KC's View: