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: September 27, 2010

    BOSTON -- Sunday’s New York Times featured a wonderful piece by Charles McGrath commemorating not just the fact that tomorrow is the 50th anniversary of Ted Williams’s last baseball game, but also the legendary piece of sportswriting about that event, “Hub Fans Bid Kid Adieu,” by John Updike, which appeared in in the October 22, 1960 issue.

    It is a day- and a piece of literature - worth remembering. Amazingly, there were fewer than 11,000 fans in the stands at Fenway Park that day to see William hit a home run in his final plate appearance; it was the kind of moment that if it appeared in a Hollywood movie, nobody would believe it.

    Here is how Updike described the moment:

    Like a feather caught in a vortex, Williams ran around the square of bases at the center of our beseeching screaming. He ran as he always ran out home runs - hurriedly, unsmiling, head down, as if our praise were a storm of rain to get out of. He didn't tip his cap. Though we thumped, wept, and chanted "We want Ted" for minutes after he hid in the dugout, he did not come back. Our noise for some seconds passed beyond excitement into a kind of immense open anguish, a wailing, a cry to be saved. But immortality is nontransferable. The papers said that the other players, and even the umpires on the field, begged him to come out and acknowledge us in some way, but he never had and did not now. Gods do not answer letters.

    But what is worth noting in this space is something that McGrath writes about in his appreciation, “the ‘tissue-thin difference’ Updike so admired in Williams’s career: the difference in this case not between a thing done well and a thing done ill, but between a thing done well and a thing done even better. Like Williams, Updike never coasted. He knew that over the long season, as he writes earlier in the essay, what holds our interest is not occasional heroics but ‘players who always care; who care, that is to say, about themselves and their art’.”

    It is that thing, I believe, that often is the difference between the transformative business and the merely competent or just mediocre - the recognition that people are our greatest assets, and that the ones who will make a difference in whether our businesses succeed or fail will be the ones who always care, who see the value and take pride in a job exceptionally well done, who understand that there is a ‘tissue-thin difference’ between the great and the good.

    And that’s my Monday Eye-Opener.

    - Kevin Coupe
    KC's View:

    Published on: September 27, 2010

    USA Today reports that a new study from the Organization for Economic Cooperation and Development (OECD) says that “the United States is the fattest nation among 33 countries with advanced economies ... Two-thirds of people in this country are overweight or obese; about a third of adults - more than 72 million - are obese, which is roughly 30 pounds over a healthy weight.” In addition, the report says that the US, Australia and England are the “advanced” countries with the fastest obesity growth rates.

    Among the OECD recommendations for how to deal with this crisis - and the report makes no bones about the fact that this is a crisis, both from an economic and health care point of view - is the use of “health-promotion campaigns, compulsory food labeling and a serious commitment from the food industry to stop advertising unhealthy foods to kids.”
    KC's View:
    So much for being advanced.

    It is hard for me to read stuff like this without feeling some sympathy for the folks in places like New York City and San Francisco who want to find ways to legislate the population into healthier eating habits. I’m not sure their efforts will be rewarded; after all, just imposing rules and regulations is not the same as getting people to buy into the notion that unhealthy eating isn’t good for the economy because of the health care costs involved with taking care of them when they get sick, and isn’t consistent with our self-image of a thriving, innovative, even pioneering society.

    But I’m sympathetic. Because it isn’t like the obesity crisis hasn’t gotten a boatload of publicity. And still, the obesity rates go up, we all get fatter, and there seems to be no hope for a turnaround in sight.

    Published on: September 27, 2010

    The Associated Press has an interview with Rick Braddock, CEO of, in which he talks about his business, other online grocery businesses, and the prospects for expansion. Some excerpts:

    Where FreshDirect is now... “I was running Priceline around the time of Webvan, they were well-funded with what was basically free capital in those days and expanded very quickly and went bankrupt. It's 10 years later and what we learned is this is a hard business to run. It's not as computer-based as Priceline ... there are real employees, fresh food and delivery issues to deal with.

    “We've paid our dues, we've made a lot of mistakes, but right now we are fast growing. We have a tremendous brand and great footing with our customers, and now we are positioned to expand.

    “The one thing Webvan did is scare venture capitalists away from online grocery for a decade. Food in this country generates $1.1 trillion in sales. If online grocers take 10 percent of that, in the top 25 markets, that is $25 to $35 billion in annual revenue. And there is no other dedicated online grocer like us.”

    About the competition... “If you start with Peapod and Safeway - that is a hybrid model. The online service is cobbled on to the physical stores. Peapod fulfills orders by using the same warehouse as the grocer. That means it has a much longer supply chain (to get food from suppliers to customers), we deal with fresher food ... As for the convenience, customers have so much more control over their shopping experience. The appeal of our brand goes way beyond the convenience of delivery, which is why we are going to be able to succeed nationally, not that we are going to go national right away. But everyone buys food, and this is a smarter way to buy food.”

    Expansion prospects... “We haven't said precisely where we are expanding to yet. We are raising money for the expansion and when we get that we will announce the location of the expansion.

    “We know from our experience in New York how to manage all the key components of the business and that we can expand population center by population center. Expansion won't take three years like it did in New York because we know how the business operates, it will take about a year and it will be a rolling expansion.”
    KC's View:
    I would quibble with the “smarter way to buy food” comment.

    It can be. For some people, in some places. And then for other people, in other places, no so much.

    Online shopping is this: another way to buy food. Start up with that “smarter way” stuff, and that’s what spooks investors and, quite frankly, other retailers that are considering entering the segment. (Maybe that’s Braddock’s tactic. Scare everybody off.)

    I also think the jury is out on whether being a pure-play offers FreshDirect an advantage. It is may in some markets, but I think that brick-and-mortar retailers that offer an online shopping option could be said to have an advantage because they are strengthening an existing relationship with the customer. I wouldn’t bet on FreshDirect to be able to take on companies like Safeway or Stop & Shop/Peapod or ShopRite or Publix or any of the other retailers that already have both an active store base and an internet alternative (to greater or lesser extents).

    In addition, it is really important not to extend the online shopping lessons learned in New York City to too many other places. New York is just a different animal ... people have been using home delivery there for years. The experience may not be exportable.

    And finally, it is worth pointing out that the one thing that I’ve always heard is that when it comes to e-grocery, the pick-up model that is currently being used by so many retailers tends to be the one that is most profitable...with it being harder to make money on the delivery model. FreshDirect only offers delivery. Harder to make money.

    The thing is, I’m extremely bullish on the e-grocery business. I believe it could be a significant segment at some point, but I’m leery about putting a number to it; there are just too many variables, though I’m convinced that the next generation of shoppers (you know, the kids who are used to buying everything online) will embrace it.

    But Braddock makes me nervous. He makes much of his Priceline experience, but Priceline was also the company that tried to bring its “name your own price” model to the supermarket business in what was a fundamental misreading of how the business works. Maybe he’s got this figured out, but we’ll see if the former Priceline and Citicorp exec can walk the walk as well as talk the talk. (Is it out of the realm of possibility that he could be positioning FreshDirect to be acquired by somebody? Hmmmm.....?)

    Published on: September 27, 2010

    The New York Times reports on how Walgreen is piloting the sale of fresh foods in some of its Chicago and New York stores, “selling fruit, vegetables and packaged meals ... Now, a trip to drugstores can include everything from mangoes and yogurt parfait to spicy tuna rolls and salsa-making kits.”

    “We launched this pilot to provide fresh foods for customers who are looking to save time or possibly eliminate time from sitting down in a restaurant,’’ said Tiffani Washington, a Walgreens spokeswoman, “or even something fast to prepare for dinner that night.”
    KC's View:
    I can’t see Walgreen as being an alternative to a restaurant. But aside from that, I think it is clear we’re going to see a lot more of this.

    Published on: September 27, 2010

    While Walmart may be getting much of the media attention with its stated intention to develop a small-store format that will be appropriate for urban locations that previously have been unavailable to it. Target is aiming to open its first urban store in Seattle in 2012...and it already is looking at 10 other US cities for additional sites.

    “The new urban stores are expected to take up some 80,000 square feet of space, making them approximately one third larger than an average supermarket, but only about half the size of a typical Target store,” writes “They're intended to help Target gain market share both from supermarkets and from Wal-Mart Stores, its larger competitor.”

    "By opening these smaller stores and then doing that across the country, Target's declaring war on the supermarket sector," Burt P. Flickinger III, managing director of New-York based retail consultant Strategic Resource Group, tells DailyFinance. "Instead of getting shoppers to go to Target once a month, they're looking to get them once a week."
    KC's View:
    I almost never argue with Burt Flickinger. The simple truth is that there is only so much real estate and so many customers, and we’re increasingly going to see the big guys go head-to-head as they look for any edge they can get.

    Check out our next story...

    Published on: September 27, 2010

    The Chicago Tribune reports on what it says is a “nascent” trend: “Food stores from upscale Whole Foods to discounter Aldi are starting to appear at regional shopping malls ... Experts disagree on whether it will become commonplace, but the grocery stores' arrival punctuates what many mall operators have known for years: The temple of American shopping needs a 21st-century makeover.”

    According to the story, the trend reflects a desire on the part of supermarkets to expand into new locations and gain access to different customers at a different point in the shopping experience; it also reflects the fact that malls are morphing into a new animal - “a place of commerce and convenience centered around community ... Mall operators are filling spaces left behind by vacant department stores with post offices, public libraries, vocational schools, drugstores and day care centers.”

    Grocery stores also bring something else to the mall: the potential of shoppers who might visit once a week rather than an average of once a month.
    KC's View:
    What could be interesting about this model is if some food retailers making the move into mall spaces decide to create a different sort of model, perhaps going heavy into foodservice or fresh products, or emphasizing certain services to a greater extent because they make more sense in that context.

    That won’t happen with Aldi, which really only has one format. But man, it’d be interesting to see what Whole Foods comes up with. it doesn’t necessarily have to be a whole store.

    Published on: September 27, 2010

    The Baltimore Sun has a story about a Dublin native, Josh Goodman, who came to the US and created a product called the Draft Master, which essentially is a “mobile table, fitted with beer taps designed to let bar patrons draw their own brews,” that now can be found in establishments in Washington, D.C., Pennsylvania, Connecticut, Massachusetts and Las Vegas. According to the story, “The Draft Master makes it easy for a consumer to buy beer on demand. The table features two taps that swivel 360 degrees. A digital meter on the taps keeps track of the amount that's drawn. Up to two different kinds of beers can be poured.”

    The system has proven successful enough that bars in in Florida, Chicago, California and Canada, looking to give themselves a differential advantage in a market where growth is close to stagnant, are planning to adopt the system.
    KC's View:
    This has less to do with beer than it has to do with innovation - developing an approach to merchandising and marketing an age-old product that will give it new-age appeal. A lot of people probably would have figured that pretty much every way of marketing beer had been tried...but it ends up that they’d be wrong.

    This sort of reminds me of the Enomatic self-service wine tasting system that I’ve seen in cities as close as Chicago and San Francisco, and as far away as Sydney, Australia.

    Published on: September 27, 2010

    The Sydney Morning Herald reports on how despite the fact that Costco “booked $9 million in sales and memberships in the first two weeks that its maiden store in Melbourne was open,” the company has a long way to go before its Australian efforts start paying off.

    According to the story, “Costco Wholesale Australia, which is building its second store in Auburn, is still mired in red ink as it goes about building its national network. It posted a loss of $14.13 million for the 52 weeks to August 30, 2009. This came on top of a loss of $2.363 million in 2008 when Costco first entered the Australian market and began to construct its Melbourne warehouse.”’

    Costco’s parent company, however, isn’t letting the red ink wash away its intentions: the Morning Herald notes that the folks in the Pacific Northwest “provided $100 million in equity funding last year and another $40 million capital contribution in 2009-10.

    And there’s reason to be optimistic: “Costco reportedly has already signed 75,000 members in Australia, and is on track to hit 100,000 patrons across the country, even though its Sydney store is not expected to open until next year,” the paper reports.

    (One Australian dollar is equal to 95 US cents.)
    KC's View:
    I have no idea about these things, but that doesn’t sound so expensive for creating an entire supply chain and infrastructure a world away. Not cheap, but not prohibitive. (Then again, it isn’t my money...)

    Published on: September 27, 2010

    • The Wall Street Journal reports that CEOs in a wide variety of companies - ranging from Starbucks to Pernod Ricard to OfficeMax - are struggling with the issue of when they can raise prices. A number of executives, the story notes, are facing increased costs, but recognize that shoppers are extremely price-sensitive.

    "The concern right now is that we would drive more people away than what we gain from the price increase," says Michael Mack, CEO of the Garden Fresh Restaurant chain.

    • The New York Times reports this morning that the Chinese government has imposed steep tariffs - of up to 105 percent - on poultry imports from the United States, saying that “the tariffs reflected the result of its own antidumping investigation, which looked at whether the United States was harming China’s poultry industry by exporting chicken parts for less than it cost to produce them.”

    The tariffs, the Times writes, “are another example of China’s willingness to use its economic leverage when it feels it is being challenged.” US government officials say they are “disappointed” by the decision and are looking at international rules and regulations for possible remedies.

    • The Indianapolis Star reports that “shoppers of discount grocer Aldi are learning this week that a security flaw at the chain is leading to sporadic instances of theft from their bank accounts. Aldi posted a notice Sept. 17 on its website that a limited number of debit card terminals at some stores ‘may have been compromised’ through tampering designed to steal customer’s payment card information.”
    • Unilever Plc reportedly is near a deal to acquire Alberto Culver Co., according to the Wall Street Journal, which says that Culver “may be valued at as much as $4 billion with a typical take-over premium of 20 percent to 30 percent.”

    • Reports are that Lifeway Foods is acquiring First Juice Inc., which makes kefir dairy drinks, for $220,000.
    KC's View:

    Published on: September 27, 2010

    I ranted last week about a negative customer service experience I had while doing business with FedEx, and noted that I thought that it could be argued that it reflected the kind of cultural failure that can, in the long run, kill a company.

    Lots of response to this.

    One MNB user responded to my comment that next time I will think about using another overnight company:

    I'd think twice about UPS.  I ordered a new ThinkPad.  UPS attempted delivery and I missed them by 10 min.  Called UPS, enter tracking number, wait on hold, get wrong representative, need international representative, have to provide tracking number again, listen to them confirm what I already knew ("they attempted delivery at 5:48pm").  I asked if I could arrange to pick it up at the central UPS facility across town (it's open to the working-person friendly hour of 8pm).  I was told that Lenovo's specifications prevented me from having the package held at the central facility for pick up -- a specification my salesperson at Lenovo had never heard of.  Delivery day two -- attempted at 2pm in the afternoon.  Delivery day three -- attempted at 2:30pm.  Call UPS ("Isn't there a neighbor who can receive your package for you?").  After the 3rd delivery attempt the package can now be picked up…..where?.....the central UPS facility.  But, not that same evening.  Only the next business day following the 3rd delivery attempt.  And, by the way, UPS isn't open on Saturday.
    I'd recommend the good old USPS.

    MNB user Jim Swoboda wrote:

    I will be very interested to know if FedEx picks up your story today and contacts you...and you are so right, there are only two possibilities:

    a: a bad employee, fixable.
    b: a disempowered employee, much harder.

    MNB user Michael F. Zagrodny wrote:

    Read your article on FedEx and couldn't agree more.  Hopefully, this was just a bad day as I have always appreciated the great service that FedEx has delivered.

    Your final assessment..."It doesn’t matter whose fault it is. It doesn’t matter who gets blamed. It only matters that the customer is dissatisfied and perhaps willing top go somewhere else next time” right on and does far too many times lead to death, maybe a slow death but ultimately breathing stops.

    Another MNB user wrote:

    I spent 30 years in retail Kevin.  From 1974-2004.  I think I participated in the last great days that you could have working in retail.  You could take care of your customer your way, and do it your way.  If you were committed to your customer like I was, you could sell what you wanted, how you wanted, and to whom you wanted.  With no interference from corporate, except to make sure the customer was absolutely satisfied and would come back again.  In fact, it was so ingrained in my mind to get the customer to come back, many times they would offer me something of monetary compensation (under the table so to speak) to thank me for the service.  To which I would always say, and because I meant it; no thanks just be sure to come back and give us your continued business.  No way today!  Especially with these big operations.  It all is the bottom line.  Make the numbers work, damn the customer.  Amazing to think they don't understand the consequences.

    Another MNB user chimed in:

    I had a very similar experience with FedEx recently.  I was very surprised to find that my package had not been delivered on-time, and, the customer service representative helping me, while very kind and polite, was either unwilling or unable to give me a break on the price I paid for overnight service.  Very frustrating!

    Another MNB user wrote:

    Did you ask for a Supervisor?

    I am sorry.. I wouldn’t have accepted any of her BS as a final answer.   

    Just reading your excerpt irritated me enough that I wanted to pick up the phone for you.

    Unfortunately she is now continuing to still provide the same customer service because you didn’t go to her supervisor and tell them you were unhappy with her service..
    Tho maybe because of your blog.. FedEx will contact you.

    And, from another MNB user:

    You are not alone in your experience with FedEx. I have similar experiences and if I felt like someone else would deliver a more consistent level of customer service, I would likely stop using them as a primary delivery agent.

    I would really like to see the USPS become that entity but I am now in dreamland and need to stop wishing on stars….

    Thank You for sharing your experience. It would really be nice to know if any of your readers have any influence at FedEx and can listen/read the responses you are sure to get on this.

    Another MNB user wrote:

    You are very patient….much more than many of us would have been in that situation.  I am of the mind (I usually blame it on being from the east coast, but so are you!!!) that if I pay for a service, I either get the service, or I get a refund. Case closed. I would have gone up the food chain to supervisor, manager, or someone higher than (in my not so patient viewpoint) was sounding like a little snit that ought to be reprimanded….I cannot believe a customer was treated like that.  I hope FedEx people, especially management, read MNB, it will help them be a better company and help those of us who use their services get better service.  More power to you!

    You have to remember that I’m different from most customers. You get treated badly, you get mad. I get treated badly, I get a column.

    Which is the point that MNB user Lisa Malmarowski made:

    And you repeated a bad customer service experience on a public blog to your many readers and subscribers. Hopefully Fed Ex is listening!

    However, not everyone agreed with me ... nor with my decision to talk about it. MNB user Ben Kuzma wrote:

    Fed Ex handles a gazillion packages a day - they semi-screw up your delivery so you retaliate by using your clout to disparage them in the guise of reporting about how corporate culture is eroding. This is not reporting – it’s whining about an incident that had no real consequences for you, your client and especially for the rest of us who routinely have had no problems with UPS or FedEx.
    Chill out dude – I won’t be selling any shares of FDX because you are no longer a customer.

    Three things.

    First of all, you call it whining. I call it ranting. No big difference. Whatever you want to call it, isn’t MNB essentially me ranting or whining about a wide range of stories? (I just try to keep it relevant, illuminating and a little entertaining.)

    Second, clearly I’m not the only one have a FedEx issue. But my larger point was to use FedEx as an example of what can happen to companies that take their eye off the ball.

    Third, I’m flattered. Blushing almost. You think I have clout?

    Finally, this email from an MNB user...the first time I’ve ever gotten one like this:

    Any chance you can modify the pictures of you on your Morning News Beat website so they're not closeups?  They're a bit frightening to look at first thing in the morning.


    I know I’m no George Clooney, but frightening?

    I think my feelings are hurt.
    KC's View:

    Published on: September 27, 2010

    In Week Three of the National Football League season...

    Cincinnati 20
    Carolina 7

    San Francisco 10
    Kansas City 31

    Cleveland 17
    Baltimore 24

    Atlanta 27
    New Orleans 24

    Dallas 27
    Houston 13

    Washington 16
    St. Louis 30

    Oakland 23
    Arizona 24

    Buffalo 30
    New England 38

    Tennessee 29
    NY Giants 10

    Pittsburgh 38
    Tampa Bay 13

    Detroit 10
    Minnesota 24

    Philadelphia 28
    Jacksonville 3

    Indianapolis 27
    Denver 13

    San Diego 20
    Seattle 27

    NY Jets 31
    Miami 23

    KC's View: