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: November 22, 2010

    The New York Times featured an interview over the weekend with Geoff Vuleta, CEO of Fahrenheit 212, described as a Manhattan-based “innovation consulting firm,” in which he discussed the company’s approach to planning and strategy.

    Every 100 days, Vuleta says, the company’s senior leadership gets together a s a group, “and we draw up a list of all the things that we want to get done in the next 100 days. And you go away as an individual and come back with commitments to how you’re going to contribute to that list. Then you sit down with me and our president and we discuss your plan. It’s just our job to make sure that the sum of everybody’s plan nails the firm’s list ... It’s made up of really simple things. What were the things that went wrong in the last 100 days? Let’s get rid of those. You want to nail your pain points and go, ‘O.K., what needs to be done to make sure that doesn’t happen again?’ So that’s part of it.

    “And what do you want to do about your brand? How are you going to advance ‘thought leadership?’ Not all projects are born equal — there are some that are grander than others. What are you going to do to invest in those? Who’s going to take responsibility for them?”

    Vuleta adds, “It’s a bit goofy to do it the first couple of times because people obsess over how they’re going to do something or what they’re going to do. It isn’t about any of those things. It’s only about an outcome. It’s only about what will have been achieved within the 100 days or at some point during the 100 days.

    “So the 100-day plan meetings start off with you actually reporting on yourself. You stand up with your 100-day plan, and there’s no wiggle room on it. They’re outcomes. You did them or you didn’t do them. You’re enormously exposed because you offered to do it, and you’re going to do it. Fahrenheit has only had to fire three people because the 100-day plan sorts it out beforehand.”

    In other words, it is all about big ideas taken in small bites.

    And that’s our Monday Eye-Opener.

    - Kevin Coupe
    KC's View:

    Published on: November 22, 2010

    Thanksgiving is still days away, but there is plenty of promotional activity taking place right now, with even more being planned for the days that make up the traditional beginning of the end-of-year holiday shopping season.

    •’s sent out emails this morning announcing that it isn’t waiting for Cyber Monday, traditionally the biggest day of the season for online shopping, but already has put its Black Friday specials online.

    And, Amazon says, “You shouldn’t have to stand in a long line to get a great deal. We’re searching for the best Black Friday deals everywhere - including deals other stores are planning - so we can meet or beat their prices and bring them to you even earlier. These limited-supply offers will go quickly, but we’ll add new ones throughout the day, every day this week, so you can skip the long lines and still save a bundle.”

    • The Los Angeles Times reports this morning that Walmart has announced “a slew of Thanksgiving-week deals aimed at grabbing market share from competitors.

    “The discount giant will kick off three days of savings on Thanksgiving Day, with about 150 online-only deals.

    “Then at midnight, the vast majority of Wal-Mart stores will open for 24 hours; in a blow to rivals, the chain says it will match competitors' advertised Black Friday prices. In case you're not full from all that turkey and stuffing, stores will fuel shoppers with free treats including breakfast bars, doughnut holes, gum and Hershey Kisses ... And here's some Wal-Mart trivia to ponder while you're waiting in line: The discount chain says it will sell enough cameras on Black Friday to make a stack taller than 320 Empire State Buildings.”

    • According to’s eHoliday Survey, conducted by BIGresearch, nearly nine in ten (88.2%) retailers will have a special promotion for Cyber Monday, up from just 72.2 percent in 2007. Retailers’ Cyber Monday plans are more robust this year with nearly half of companies offering specific deals (49.0%, up from 42.9% last year) and many planning one-day sales (41.2% vs. 32.9% last year) and free shipping on all purchases (21.6% vs. 15.7% last year). In addition, the majority of retailers (62.7%) will send promotions and deals to shoppers through a special Cyber Monday email.

    The survey also suggests that 54.5 percent of workers with Internet access, or 70.1 million people, will shop for holiday gifts from the office this year. Employees most likely to shop from work include men (56.5%) and young adults 25-34 (71.8%).

    • And finally, here’s what is at stake as the shopping season begins. Forbes writes that “this year holiday spending is on the rise, if only slightly. According to the NRF, consumers plan to spend $689 in 2010 on holiday-related shopping, compared to $682 in 2009. Approximately 62% of shoppers say the economy will impact their spending—down from 65% last year—and will compensate by spending less and looking for sales.

    “Interestingly, women appear to be more frugal than men when it comes to seasonal spending. Contrary to the fact that women decide more than 80% of all consumer goods purchases and are the primary parent in most households, men will spend about $20 more on holiday goods this year. The NRF estimates that men will spend $699, compared to women’s $679.

    “The difference is likely how the sexes are buying. Men are more likely to shop at department stores, indicating that female shoppers are heading to discount stores in greater numbers. Moreover, 42% of women report beginning their holiday shopping before Halloween—compared to just 32% of men—so may be more likely to deal-hunt and have a plan.”
    KC's View:

    Published on: November 22, 2010

    The Seattle Times reports that a tentative agreement has been reached between unions representing supermarket employees and management of Fred Meyer, Safeway, QFC and Albertsons, effectively ending the threat of a Thanksgiving job action that could have disrupted operations during one of the busiest shopping seasons of the year. Terms of the deal were not disclosed.

    According to the Times, “The tentative agreement was announced on the union's website late Saturday. Dates are still being set for the vote on the proposed contract, said union spokesman Tom Geiger. Those meetings will most likely take place the week after Thanksgiving, and contract details will be made public afterward, he said ... At issue were disagreements over benefits and pay. The workers said they have taken cuts in hours since their last contract and that the proposed additional cuts would hit them hard.”
    KC's View:

    Published on: November 22, 2010

    Market research firm Blueocean Market Intelligence is out with a new report that it says explains “how changes in consumer shopping habits are impacting sales at the world’s largest retailer.” The question was why during recessionary times, when Walmart might be expected to outperform many of its competitors, the retailer saw its US same store sales decline for six consecutive quarters.

    Key findings include:

    “Many Walmart shoppers are spending less overall, due to continued pessimism about the economy.”

    “A decline in Walmart shopping trips appears to be driven by customer loss rather than reduced shopping frequency among current customers.”

    “Among those leaving Walmart, more than half don’t view Walmart as the ‘low-price leader’.”

    “Many who have reduced their Walmart spending report they are finding competitors more affordable and convenient.”

    “Project Impact, a remodeling effort designed to attract higher income shoppers and reduce clutter, has negatively affected customers’ attitudes about Walmart’s variety and brand selection.”

    “Walmart isn’t well positioned for economic recovery. Price alone may not lure shoppers from competitors, as most believe Walmart lags on service, variety and quality.”

    “While overall sales have declined, customers are spending more in select departments including grocery, pet, health and beauty, baby products, and toys and games.”

    KC's View:
    There seems to be a growing consensus that Walmart’s leadership has misread the current competitive environment and mapped out a strategy that has not worked.

    The question I keep hearing whispered is when Walmart’s current leadership pays the price for its mistakes. It is just whispers at then moment....but undeniable in some circles.

    Published on: November 22, 2010

    Interesting piece in the New York Times about the conflict between the US Food and Drug Administration (FDA) and the artisanal cheese movement, which are engaged “in a contentious national debate over the safety of food produced by small farmers and how much the government should regulate it.”

    As described by the Times, “Artisan cheese is made by hand in small batches, often using raw milk that is not pasteurized to kill bacteria (raw-milk cheeses must be aged 60 days to make them safer). In recent years, the number of artisan cheesemakers has grown rapidly. Washington State now has 34, up from about 18 in 2005. Vermont, another hot spot, has 48, up from 27 in 2005.” According to the story, federal and state regulators “say they have very real concerns about the safety of cheese, especially softer varieties like brie and mozzarella that are more likely to harbor listeria. The F.D.A. began in April to test soft-cheese makers for listeria, visiting 102 facilities, large and small, and found the bacteria in 24 of them. While the list of facilities where listeria was found included some large factories, more than half of the makers were artisanal producers.”

    At the center of the debate is Kelli Estrella, a highly regarded Washington State artisanal cheesemaker, whose case “has drawn visceral reaction from foodies because the allegations threaten a core belief of what has come to be known as the locavore movement: that food from small, local producers is inherently better and safer than food made by large, faceless corporations. Her supporters cast her as a David fighting a two-headed Goliath of Big Food and Big Government.”

    The allegations against Estrella stem from state tests that “found listeria in her cheese and throughout the farm building where she makes and ages it. The bacteria was even in a humidifier that officials said blew it around the facility. Ms. Estrella recalled some cheese and did a vigorous cleaning and renovation.

    “But in August, F.D.A. inspectors again found the bacteria in her facility and cheese. In early September, they asked her to recall all of her products. Ms. Estrella said no, a rare act of defiance by any food maker. She argued that the F.D.A. had found listeria only in her soft cheeses and that hundreds of wheels of hard cheese were safe. She estimated the value of the cheese the government wanted destroyed at more than $100,000.”

    The FDA cannot simply force a recall, but it has gone to court and gotten a court-ordered impounding of Estrella’s cheese, effectively stopping her from doing business.

    Part of the problem, according to the Times, is that the two sides don’t even seem to be speaking the same language. Estrella “says she believes that the F.D.A.’s crackdown is part of a larger campaign against raw milk, and she is fighting for her customers’ right to eat whatever they choose. ‘I don’t think this issue is about bacteria and it’s not about cheese,’ she said. ‘I think that we’re losing our freedom.’

    “The F.D.A. said it was not targeting artisan cheesemakers or those who use raw milk, and its listeria testing had included producers across the spectrum. While cheesemakers acknowledge the need for good sanitation, some supporters question the agency’s approach.”
    KC's View:
    Fascinating story, and an issue without easy solutions. I would hope that there can be some sort of legitimate and reasonable compromise between the two sides; I am sympathetic to the notion that one cannot deal with big and small manufacturers the same way, but I must admit that I am given pause by the fact that listeria was found in Estrella’s facility. Given a choice, I’m not sure I would eat her cheese.

    Published on: November 22, 2010

    In Tyler, Texas, the Tyler Paper reports that as Brookshire’s prepares to open a new FRESH store there early next year, has drafted a group of residents as an advisory board, “made up of a diverse cross section of the community with a love and passion for food ... to offer insight into the planning of the new FRESH store.”

    The store is targeted at local residents who, research found, have been driving up to several hours on a reasonably frequent basis to find better fresh foods; the store will include a strong local produce selection, juice and fruit bar, sandwich bar and a taco bar, and 37 feet of prepared food, from meatloaf and mashed potatoes to seared tuna.

    "I think that FRESH is a great example that people locally are tuned into the international movement of a healthy lifestyle and healthy living," Courtney Lowery, a member of the advisory board, tells the Paper.
    KC's View:
    I love stores that do not cater to the lowest common denominator, that believe that good food can be both an ends and a means.

    Published on: November 22, 2010

    Cnet reports that Walgreens will test a program beginning early next year that will offer “rapid-charging EV stations at 18 Houston-area stores next year, through a partnership with power utility NRG Energy.”

    According to the story, this is part of broader charging program being created by the eVgo Network, which also will include so-called convenience stations that “will be hosted by retailers in their parking lots and remain open for the duration of the retailers' business hours. Those stations will consist of DC rapid chargers and offer an option to recharge for 30 miles of range in 10 minutes ... NRG will also offer a ‘home-and-away’ subscription service that will give customers unlimited access to any of the network's public stations, in addition to having a Level 2 fast-charging station installed at their home.
    KC's View:
    What’s the over-under on when electric car charging stations will be standard operating equipment in a majority of US public parking lots? I always think that when it comes to questions like these, you should make a legitimate guess, and then cut it by 30 percent. Because stuff like this always happens faster than we expect.

    Published on: November 22, 2010

    The Los Angeles Times reports that bankrupt Blockbuster “will this week launch its first nationwide advertising campaign since 2007. The goal is not only to advertise what the company sees as its advantages over competitors Netflix and Redbox, but also to let consumers know that despite widely publicized struggles, it's still open ... Blockbuster has fallen behind its competitors in recent years as consumers have flocked to Redbox's kiosks, which rent out movies for $1 a day, and Netflix's DVD-by-mail subscription plan, as well as a growing number of digital options. Blockbuster now offers its own versions of all those options, but the other companies had a head start.”
    KC's View:
    Beyond the fact that Blockbuster for too long remained loyal to a business strategy that was increasingly irrelevant, the additional problem is that while it was treading water, the competition was moving forward and continues to do so. It is like Netflix and Redbox both realized that the market was in flux, and that they needed to have a long-term strategy to com pete with iTunes, not a short-term strategy to compete with Blockbuster.

    What Blockbuster really needs is a game-changer. But it’s hard to do that when you need court approvals just to run an ad campaign, and you’re preparing to close up to 25 percent of your fleet. All those empty buildings send a powerful message to consumers, and it isn’t a positive one about Blockbuster.

    Published on: November 22, 2010

    • The Financial Times reports that Tesco “has vowed to quadruple annual sales in China ... during the next five years and make Asia the focus of its international growth.

    “Following the grocer’s loss-making foray into the US with its Fresh & Easy chain, Tesco has turned its attention to Asia and identified China as a major growth opportunity.”

    If Tesco is successful, it would mean growing its business in China to the equivalent of close to $6.4 billion (US).
    KC's View:

    Published on: November 22, 2010

    • The US Food and Drug Administration (FDA) has opened an official investigation into the presence of lead in reusable shopping bags.

    The problem was originally detected in Florida, where the Tampa Tribune did an investigative piece revealing the lead contamination in bags sold by Publix and Winn-Dixie.

    Winn-Dixie has pulled its bags, while Publix has said that its bags are safe, but that it would offer refunds to people concerned about the issue.

    • The Food Marketing Institute (FMI) and National Grocers Association (NGA) said last week that they are “calling on the U.S. Congress to repeal the requirement that prevents consumers from using their flexible spending accounts (FSAs) to purchase over-the-counter (OTC) medicines without a prescription. This provision, enacted into law as part of the Patient Protection and Affordable Care Act, removes over-the-counter (OTC) medications from the list of eligible medical expenses for reimbursement by FSAs and Health Savings Accounts (HSAs), effective January 1, 2011 ... The nation’s grocery stores request that Congress act before adjournment to reverse the provisions of the Patient Protection and Affordable Care Act and help the estimated 35 million working Americans who rely on voluntary contributions of pre-tax dollars to FSAs to help meet their basic health care needs, including the purchase of safe, affordable OTC medicines.”

    The Hill writes that “childhood nutrition advocates say they've been promised a vote on their top priority on Dec. 1 or Dec. 2, after Congress returns from Thanksgiving recess.

    “The $4.5 billion childhood nutrition bill would be considered under a closed rule, with no amendments allowed. Several House Republicans have expressed support for the bill, which cleared the Senate unanimously just before the August recess.”

    The bill, according to The Hill, “expands eligibility for school meal programs; establishes nutrition standards for all foods sold in schools; and provides a 6-cent increase for each school lunch to help cafeterias serve healthier meals.”

    • The Wall Street Journal reports that Johnson & Johnson is bringing its children’s Tylenol products back to store shelves some six months after the company’s OTC children’s medicines were recalled because of manufacturing issues.

    According to the story, “To get parents to return to Tylenol, J&J must combat not just the hit to its reputation but also the encroachment of rival brands, which have been taking over shelf space in drugstores and promoting themselves as safe and reliable. Cheaper private-label brands are also gaining amid the tough economy as sales of branded medicines drop ... J&J must walk a messaging tightrope, marketing experts say, providing reassurance that it has fixed its problems without calling so much attention to them that safety concerns resurface.”
    KC's View:

    Published on: November 22, 2010

    We’ve had a fascinating ongoing discussion about public policy, the roles of government, the duties of citizenship, the effectiveness of taxation, and the need for greater civil discourse in the public arena.

    One MNB user wrote:

    an actual potential answer to the problem, is to redefine what a citizen is. Currently, Citizenship and all its rights has been extended to corporations.  This is, I believe, an attempt to limit liability of individual owners and stock holders in a corporation.  However, by endowing corporations with citizenship, we have distorted the picture and our country.  Individuals should be the only owners of full citizenship.  Corporations exist for one purpose only: to generate income. Don’t give corporations or unions (and their money) the right to distort the legislative process through massive lobbying and financing of elections.  Deny them free speech.  We need to have a constitutional amendment to redefine the concept of citizenship and limit it to individuals, and we need to create a new the legal status for corporations, distinct from citizenship and with limited rights to free speech.  At the same time, make it so they do not pay taxes.  Individuals, as the only full citizens would be the only source of taxes and all income, whether from hourly wages, interest, investment, etc. should be taxed.

    Freeing corporations from the burdens of citizenship would liberate them to do what they do best: come up with new ideas to generate wealth, and in the process, jobs and new products.  Just think of all the corporate resources which are drained just trying to find a way to provide healthcare.  Why is that part of their responsibility when it is not the product or service they were conceived to provide?

    Robert Reich makes an exceptional case for this idea in his book “Supercapitalism”. (It is also a short volume and easily readable.)  Why is no politician championing these ideas?  Because pandering to lobbyists is where their money and feeling of power and influence come from.  You have to think that if politics is a mess, and politicians on all sides of the political spectrum hate this idea, then just maybe it is the answer we the people are looking for.

    WE the PEOPLE aren’t bad citizens; we have just allowed non-PEOPLE to become citizens and distort the process.

    Seems to me that there is no question but that money is the most corrosive influence in politics and government. Start from that premise, figure out how to address it, and then maybe we can start the process of making progress in this country, as opposed to just staking out ideologies and shouting at each other.

    Another MNB user wrote:

    A friend of mine, a retired Air Force officer and Viet Nam Veteran, suggested that the government should institute a war tax separate from income tax so that people would know the true financial cost of the wars. IN this way war would not add to the deficit. I thought it a great idea. Nothing would end these seemingly endless wars like making people pay for them.  I would expand this idea to making the IRS send every taxpayer a breakdown of their personal tax expenditures and where the money really goes. That just might educate people about where the “deficit” is really coming from.

    Seems like a reasonable approach.

    And, from another MNB user:

    The debate goes on and on, all the while seeming to get less and less civil.  Progressive vs regressive taxes, income tax vs consumption tax, rich vs poor.  I am reminded of the line from the old Buffalo Springsteen song: “Nobody’s right, when everybody’s wrong”.  And then I flash back to my college econ days, when one statement stood out above all the others and which bears reminding: “There’s no such thing as a free lunch”.  Whether you are a follower of Keynsian economic theory or a believer in Uncle Miltie, this statement rings true.

    What also seems true to me is the notion that few citizens in this country have any idea what things cost. From wars in Afghanistan to garbage pickup, how many people really understand where their tax dollars go, and how they are spent?

    Another MNB user wrote:

    As a country, we've become a nation of self absorbed individuals who cannot seem to make any hard trade offs and demand the same from our congressional representatives. It's no wonder we have the issues that we have and no clear resolution in sight.  I'm so horrified at both political parties.

    By the way, you might be interested in reading "Boiling Mad" - it's about the evolution of the Tea Party and is pretty interesting.

    While I'm an avowed Sarah Palin sceptic and generally anti-Tea Party,  I'm reading it to try to get a handle on what it's all about and how it might influence our political system.

    I’m always surprised by people who simply write off the Tea Party as a bunch of crazy people. That’s not to say that it doesn’t have its share of crazies - just like the liberal end of the political spectrum - but the notion that government should be smarter, more accountable, more connected to the American experience than the DC bubble ... all of these things strike me as perfectly reasonable arguments. Who can look around today and not have a Howard Beale moment?

    It is all what you do with your anger that matters. If all you do is get more angry, more resolute, and less willing to engage the people with whom you disagree, then progress is impeded. But if you decide that big problems require big, meaningful conversations and greater civility, then progress actually can be achieved.

    At least, that’s IMHO.

    KC's View:

    Published on: November 22, 2010

    In Week Eleven of National Football League action...

    Baltimore Ravens 37
    Carolina Panthers 13

    Buffalo Bills 49
    Cincinnati Bengals 31

    Green Bay Packers 31
    Minnesota Vikings 3

    Washington Redskins 19
    Tennessee Titans 16

    Detroit Lions 19
    Dallas Cowboys 35

    Oakland Raiders 3
    Pittsburgh Steelers 35

    Tampa Bay Buccaneers 21
    San Francisco 49ers 0

    Atlanta Falcons 34
    St. Louis Rams 17

    Indianapolis Colts 28
    New England Patriots 31

    Seattle Seahawks 19
    New Orleans Saints 34

    Arizona Cardinals 13
    Kansas City Chiefs 31

    Cleveland Browns 20
    Jacksonville Jaguars 24

    Houston Texans 27
    NY Jets 30

    NY Giants 17
    Philadelphia Eagles 27
    KC's View: