business news in context, analysis with attitude

Published on: December 15, 2010

by Kate McMahon

The internet is abuzz this week with record-breaking holiday season e-commerce tallies and anticipation that consumers may ring up a second $1 billion dollar online shopping day.

I did my part on Green Monday (not to be confused with Black Friday or Cyber Monday bracketing the post-Thanksgiving weekend), the second Monday in December that earned its profit-making moniker from eBay back in 2007.

Going into this week, consumers had spent more than $21.95 billion online in the first 40 days of the November-December holiday season, according to comScore. Those numbers marked a 12% increase versus the corresponding days last year.

The bell-ringer was Cyber Monday, Nov. 29th, when sales cracked the $1 billion mark for the first time ever. With most free shipping offers ending Friday, this is expected to be the peak week online.

It’s worth noting that numbers are looking up for the brick-and-mortar set as well, buoyed by positive shopper turnout over the Black Friday weekend. The Commerce Department reported yesterday that November department store sales jumped 2.8%, the strongest advance in two years. That news prompted the National Retail Federation (NRF) to raise its forecast for holiday retail sales to 3.3% from a prior forecast of 2.3%. The NRF rarely revises its forecasts, last doing so in 2006.

And as economists and retail analysts try to decipher the trends, one thing is clear. Consumers are looking for value, and they will do their homework online, in the stores and with an app on their mobile phone to find what they want at the most attractive price.

The consumer blogs feature spirited debate on the merits of online vs. in-store shopping, or the new hybrid – order online with in-store pickup. On the internet forums, and in reality at area malls and local shops, I’ve found that many people mix it up. For example, they will choose online for shoes (zappos.com, with free shipping AND returns), online with store pickup for electronics, and in-store when coupons and free gift boxes make it worth the trip. (Those three words - worth the trip - make up the phrase that should be top-of-mind for every brick and mortar retailer.)

As always, some of the most in-demand items are rarely discounted – the Apple iPad (of course), UGG boots (still), Squinkies (small squishy toys that are the new Beanie Baby) and designer jeggings (for those MNB readers who do not have teenage daughters or a resident fashionista, this is a jean-legging combo).

“Too many brands think the only way to keep and get customers is by cutting prices. In reality, consumers are more interested in high value than low prices,” said consumer branding expert Sheri Bridges, a professor at Wake Forest University, citing Apple products as a case study. “Value is a function of the bundle of perceived benefits offered at a given price.”

There is every reason to believe that the same consumer who price-checked online and in-store prices before making a holiday purchase in 2010 could carry that behavior forward when purchasing big-ticket items as well as the basics – a gallon of milk, a 64-ounce container of laundry detergent or a 2 pound package of ground beef. And the producers, marketers and retailers who recognize and act on that reality will come out ahead in 2011.


Comments? Send me an email at kate@mnb.grocerywebsite.com .

Published on: December 15, 2010

by Kevin Coupe

Two stories this morning vividly illustrate changes in where the consumer can be found ...and what businesses need to do in order to communicate with them.

• The Seattle Post-Intelligencer has fascinating statistic this morning, reporting that “a study commissioned by Child's Play Communications from The NPD Group Inc. found that 79 percent of moms with children under 18 are active in social media. One in four of those moms have also purchased a children's product because of a recommendation from a social networking site or blog.”

• And Ad Week reports that “a new consumer survey from the researcher found that for the first year, the amount of time U.S. households spent watching TV and using the Internet is equal at 13 hours per week. This comes on the heels of research showing that younger consumers (18-30) already spent more time on the Web than watching TV. Now, people 31-44 are also spending more time online than with TV.”

The study, from Forrester Research, “takes pains to note it’s not predicting the demise of TV. In fact, the amount of time spent watching TV has remained stable over the past five years. During that same time, however, time spent on the Web has risen 121 percent. The biggest losers in comparison to the Web are: radio (down 15 percent), newspapers (down 26 percent) and magazines (down 18 percent).”

Get the message?

One final note. It was revealed this morning that Mark Zuckerberg, the founder of Facebook, was named Time magazine’s “Person of the Year.” Time writes the following:

“Almost seven years ago, in February 2004, when Zuckerberg was a 19-year-old sophomore at Harvard, he started a Web service from his dorm. It was called Thefacebook.com, and it was billed as ‘an online directory that connects people through social networks at colleges.’ This year, Facebook — now minus the the — added its 550 millionth member. One out of every dozen people on the planet has a Facebook account. They speak 75 languages and collectively lavish more than 700 billion minutes on Facebook every month. Last month the site accounted for 1 out of 4 American page views. Its membership is currently growing at a rate of about 700,000 people a day.

“What just happened? In less than seven years, Zuckerberg wired together a twelfth of humanity into a single network, thereby creating a social entity almost twice as large as the U.S. If Facebook were a country it would be the third largest, behind only China and India. It started out as a lark, a diversion, but it has turned into something real, something that has changed the way human beings relate to one another on a species-wide scale. We are now running our social lives through a for-profit network that, on paper at least, has made Zuckerberg a billionaire six times over.

“Facebook has merged with the social fabric of American life, and not just American but human life: nearly half of all Americans have a Facebook account, but 70% of Facebook users live outside the U.S. It's a permanent fact of our global social reality. We have entered the Facebook age, and Mark Zuckerberg is the man who brought us here.”

Now you get the message?

Published on: December 15, 2010

There is a new study of consumer satisfaction with the online holiday shopping experience out from ForeSee Results, and the results look positive for e-tailers.

According to the report, “Customers’ ratings of site performance this year (81.7 on the study’s 100-point scale) are nearly two points higher than they were in 2009 and at their highest point since the holiday shopping season began in earnest.” The study looked at site performance, navigation, price, and product browsing as core values in the online shopping experience.

“It’s great to see that retailers are getting on top of the performance issues that typically plague them during the holiday season because of the increased traffic,” said Kevin Ertell, vice president of retail strategy at ForeSee Results. “Although priorities are going to differ from retailer to retailer, adequate site performance is becoming a very basic expectation of online shoppers.”

Published on: December 15, 2010

The Newark Star Ledger reports that in addition to Delhaize and Ahold being likely bidders for some of the assets currently owned by the now-bankrupt Great Atlantic & Pacific Tea Company (A&P), Safeway - which does not really have many stores in A&P’s marketing areas, but does have Genuardi’s in Pennsylvania - has to be considered another possible suitor.

Published on: December 15, 2010

The New York Times reports that the Save The Children charity has changed its tune when it comes to supporting a tax on carbonated, sugared beverages that had been proposed in places such as Mississippi, New Mexico, Washington State, Philadelphia and the District of Columbia. While the soda tax movement continues, Save The Children now no longer supports it ... and Carolyn Miles, COO of the group, says it is because this kind of advocacy seemed to not be in synch with its core mission.

However, the Times notes that at the same time as Save The Children adjusted its position, it was seeking a major grant from Coca-Cola to support its health and education programs, and already has received a $5 million grant from PepsiCo. (Discussions with Coca-Cola are ongoing.) Both soft drink companies are vociferously opposed to soft drink taxes.

Miles tells the Times that the grants had nothing to do with the change of policy, and both Coke and Pepsi said they did not ask Save The Children to change its advocacy for the tax.

The Times writes, “Save the Children’s involvement in the issue began in late 2009, when it got a $3.5 million grant from the Robert Wood Johnson Foundation to fight childhood obesity through a program it called the Campaign for Healthy Kids. Save the Children initially financed the work of local groups, some of which focused on improving school lunches and requiring health education in schools. But local activists in Mississippi, New Mexico and Washington State used the grants to push for a soda tax.”

(BTW...the Wall Street Journal reports this morning that while soda taxes can raise cash, a new study published in the Archives of Internal Message suggests that they have a minimal impact on obesity, producing “an annual average weight loss of about 1.3 pounds per person.”)

Published on: December 15, 2010

USA today reports that an analysis of employment figures shows that “the number of people 55 and older holding jobs is on track to hit a record 28 million in 2010 while young people increasingly are squeezed out of the labor market ... The portion of people ages 16-24 in the labor market is at the lowest level since the government began keeping track in 1948, falling from 66% in 2000 to 55% this year. There are 17 million in that age group who are employed, the fewest since 1971 when the population was much smaller.

“By contrast, people in their 50s, 60s or 70s are staying employed longer than at any time on record. For example, 55% of people ages 60 to 64 were in the labor market during the first 11 months of 2010, up from 47% for the same period in 2000.The trend of older people working more and younger people working less is fundamentally reshaping the labor force and slightly easing pressure on government retirement programs...These trends are especially important because the first of 77 million Baby Boomers — the population bulge that happened from 1946 through 1964 — turn 65 next year.”

Published on: December 15, 2010

Bloomberg reports that McDonald’s plans to ramp up its expansion in China, with a goal of opening as many as 200 stores there in 2011 and increasing its investment there by 40 percent.

McDonald’s currently operates about 1,100 stores there - about half the number of KFC stores in China.

"We're committed to China, changing the face of the brand to become a place where young consumers want to come and stay," said Kenneth Chan, McDonald's chief executive of China, adding, “It took us 19 years to get to 1,000 stores. Now it's time to pick up the pace.”

Published on: December 15, 2010

The Nestlé Purina PetCare Company is one of seven companies named as recipients of the 2010 Malcolm Baldrige National Quality Award, the nation's highest presidential honor for performance excellence through innovation, improvement and visionary leadership.

Nestlé Purina PetCare is the first consumer packaged goods company and first pet food manufacturer ever to receive the Award.

According to the announcement, “The 2010 Baldrige Award recipients were selected from a field of 83 applicants. All of the applicants were evaluated rigorously by an independent board of examiners in seven areas: leadership; strategic planning; customer focus; measurement, analysis and knowledge management; workforce focus; process management; and results. The evaluation process for each of the recipients included about 1,000 hours of review and an on-site visit by a team of examiners to clarify questions and verify information in the applications. The 2010 Baldrige Award recipients are expected to be presented with their awards at a ceremony in Washington, D.C., next year ... Named after Malcolm Baldrige, the 26th Secretary of Commerce, the Baldrige Award was established by Congress in 1987 to enhance the competitiveness and performance of U.S. businesses.”

The other six winners were: MEDRAD, a manufacturing company, Freese and Nichols, K&N Management, The Studer Group, Advocate Good Samaritan Hospital, and Montgomery County Public Schools in Maryland.

Published on: December 15, 2010

• Published reports in Canada say that Safeway there is replacing Starbucks kiosks in four locations with Tim Hortons shops. The change was made because the in-store Starbucks were competing with nearby freestanding Starbucks; Safeway currently has 162 Starbucks kiosks in Canada, out of its total of 213 stores.

• The Wall Street Journal reports that “a federal judge in California ruled Tuesday that a lawsuit alleging Costco Wholesale Corp. workers were required to work overtime without compensation could proceed as a state class action in California and a conditional collective action nationwide.” The original suit dates back to 2009, and charges that Costco locked overnight workers in their store “at the end of their shift until managers finished chores such as emptying cash registers and removing jewelry from display cases.

“The plaintiffs allege the company did not pay its employees for lock-in time, in violation of California wage and hour laws and federal statute. The plaintiffs said the lock-in periods lasted typically from 10 to 30 minutes.”

Published on: December 15, 2010

• The Oregonian reports that Lisa Sedlar, president/COO of Portland, Oregon-based New Seasons Markets, has been promoted to the position of CEO, succeeding Brian Rohter, a co-founder of the 10-store chain.

Rohter reportedly also plans to retire from his chairmanship next month. No successor has yet been named.

Published on: December 15, 2010

More about the child nutrition legislation from an MNB user:

There are many children that receive free lunch, they are not getting them free because their parents did not feel like making them a meal, they are getting them free because for whatever reason their family needs some financial support right now. For many of those kids, that hot lunch is the best meal they are going to get all day long. I have seen many articles that have pointed out poorer families generally don’t eat as well simply because they do not have the resources and sometimes the time to plan the traditional family dinner. Many of the kids will go home from school and their parent(s) will be at work, sometimes going to a second job and the kids will have to feed themselves. So keeping in mind that these children are the future is it not a better idea to try and help them by keeping the fit and healthy, teaching them good eating habits, and supporting our future.

Agreed.

I am a little surprised by all the negative reactions to this legislation. My argument actually goes back to what has emerged as an over-arching theme here on MNB - that “American exceptionalism” isn;t some sort of divine right, but rather an earned privilege, and one that we have to earn as a country every day. How better to be exceptional than to create public policy that works to insure that in public schools our children are offered the most nutritious food possible, and are educated about why this is important for their - and our nation’s - future.

Another MNB user wrote:

I totally agree with the recent reader who does not want cookies and sugary snacks in the school. We also go out of our way to provide healthy and organic food for our child and feel helpless to parents who show up a school with treats for the kids. No more “sugar dealers” at the school please!

Another MNB user chimed in:

Everyone is very passionate about our kids eating well in schools. To take the OBama effort 1 step further-Since the military has banned all fried foods, and is concentrating on fueling our soldiers with basic food groups, fruit, veggies, grains, and a lot of "unprocessed" foods. Why can't we do the same for our children?

From another MNB user:

From your own commentary : "Parents can feed their kids anything they want at home, can send them to school with bagged lunches can contain pretty much anything."

In a really disturbing coincidence, someone I know in Connecticut received a note from his son's teacher yesterday. It asked him to stop including a cookie in his son's lunch because it's not healthy. He is following up with the principal to find out whether this is some sort of official school policy or just a crusading individual. It is certainly not directly connected to anything federal. But it is unfortunate to see that sort of interference from anyone. Especially when their own cafeteria sells both cookies and ice cream.

Agreed. That’s an over-zealous teacher in my view.

But hardly reason enough not to have a reasonable public policy approach to school nutrition.




We had a story the other day about how few people understand the importance of counting calories and know how to do it. I was a little surprised by this, but a number of emails disagreed with me.

MNB user Bill Haveron wrote:

Until someone finds an easy way to track calories, no one will do it. It’s hard enough to do for yourself, let alone your kid or kids….especially as they get older. When they are young, and you pretty much provide every calorie they take in, it’s a bit easier. But as they age, and are consuming more on their own, it becomes even more difficult.

I’m an avid marathon runner, and run anywhere between 20 and 60 miles per week. There are many reasons I do this, but one of them is so I can eat what I want. Because I need energy to be a distance runner,  I generally eat pretty healthy, but indulge when I want. However, I do not track my calories. I just know that if I burn more than I take in, I won’t gain any weight.

Anyone who can come up with an easy way to track your calories could be the next jillionaire. Think about the amount of time it takes to divide how much of a product you have eaten based on what is on the package. And if you’re eating fresh produce, there generally is no caloric intake for these products. People who try it get frustrated and just stop doing it. It’s hard enough to get a good meal on the table for your family, let alone track how many calories each kid is eating.
 
Much easier said than done.

Agreed. I can’t run anymore because of bad knees, but I do try to get to the gym as much as possible, and ride my bike 40-50 miles a week in good weather. I do pay attention to calories - I’m not a zealot about it, but I try to be conscious about it and avoid high-calorie products that I know will take a month to work off.

MNB user Rosemary Fifield wrote:

Is it possible that literal calorie counting is just too tedious to accomplish? I never count calories, but I do concern myself with portion control and the quality of what my family eats. Keeping track of calories in a family with people of varying ages and activity levels may just be too much to contemplate. If people are getting the message about fruits and vegetables, that tells me that practical information they can apply is what we need to provide. Keep emphasizing portion size, the appropriate ratio of vegetables to meat on the dinner plate, and how to include more tasty whole grains in the diet. Provide information about low-fat ways to prepare food and what constitutes a healthy snack. We need to meet people where they are and help them in ways that they will respond to.

MNB user Lorri Putnam wrote:

I think from time to time about counting calories as a weight-loss tool.  But how?  Take yesterday, for example.  For lunch I had a bowl of husband-made ham-and-bean soup.  No idea how many calories – but it was delicious.  For dinner, my husband made burritos – browned and drained ground beef, added seasonings, put a scoop in a tortilla, added shredded cheese, chopped onion and sliced black olives, topped with salsa and plain yogurt, with avocado on the side.  Also, sides of refried beans and leftover rice reanimated with salsa.  I could read the calories on the packages for some of the items, but nothing was measured, and I have no idea how many calories were in the onion, the leftover rice, the scoop of seasoned beef.  Everything would need to be measured, with calories per whatever gleaned from the package or the internet, then listed somewhere to be tracked and totaled.  I think it’s amazing that nearly one in ten adults say that tracking their family’s calorie consumption would be easy for them to do!

I don’t have a package in front of me, but I’d be willing to bet that the refried beans were a killer in that meal.

And, MNB user Dan Jones wrote:

52% of consumers believe you need to pay attention to calorie intake.  Only 14% pay attention to calories the family consumes each day.    Our family fits this perfectly.

In our household we pay attention by making reasonable serving sizes, and  serving nutritious meals for every breakfast and dinner.  Do I try to calculate calories – heavens no.  What  is a serving size of broccoli?  How many calories does a splash of olive oil cost me?  I have no idea, but if I eat a reasonable amount of good foods, I am paying attention to my calorie intake without counting calories.




Finally, this email from MNB user Barry Scher about A&P’s travails:

Shame that a former powerhouse is going by the wayside.

But as the late Izzy Cohen, former CEO of Giant Food used to say: “The good get better and the bad get worse...”

Published on: December 15, 2010

We continue to get email responding not just to my list of 50 great American movies - which was itself a response to what I viewed as William Bennett’s misguided statement on “Morning Joe” that Independence Day was his idea of “great American movie” - as well as to all the emails on the subject that I posted earlier this week.

You can read my original list You can read my list here.

One MNB user wrote:

Kevin, I don’t care to add, subtract or dispute any movies that made your list of top 50 based on my own bias as to what my top 50 list might be.

I enjoy so many movies for so many different reasons it would be far too painful for me to limit my top 50 list to only 50 movies.

Anyway, seeing as you enjoy this topic so much I would like to see another list of your favorites based more strictly on the criteria of the chapter in Bennett’s book which features ..”Movies that reflect the American experience”, not just a “great” movie such as Independence Day, which, BTW, let’s hope doesn’t end up meeting that criteria. I am talking about movies from your list such as The Grapes of Wrath. Taking out movies such as The Wizard of Oz and then see what you have for a top 50.

Albeit there are a great number of movies on your list I believe already meet the refined criteria I would still enjoy seeing what additional movies would make your list.

Keep up the great work of making people think!

Actually, I would argue that almost every movie on my list reflects some measure of the American experience. Even The Wizard of Oz, which has the post-Depression mindset of a country looking for answers to the nation’s problems, and finding out that the best answers lie within one’s own mind, heart and ability to be brave.

MNB user Christina Harrison wrote:

Hi there!  I can’t say I totally agree with your list, but wanted to let you know that I printed it out and we had a great discussion about it around the dinner table last Friday night.  It brought up a fun memory…about ten years ago my husband insisted that I watch The Dirty Dozen, which I did and loved.  I called my sister who lived in San Francisco and told her to run over to BlockBuster and rent it (because that’s what you did back then before Netflix Instant Download).  So, she drives to the store and, of course, can’t remember the title (everybody didn’t have the cell phones back then so she couldn’t call me).  The only part she remembered was that it was about a group of twelve men so the kid (that’s still the same) who was working there tried to help her figure it out (didn’t have IMDB).  She walked out with 12 Angry Men.  To this day she still hasn’t seen The Dirty Dozen.

Also, you had Jaws on your list which I support 100%.  As a child of the ‘70s I’m a firm believer that every kid around the age of ten should watch this movie so they can enjoy the same kind of mind-numbing, absolute terror my Gen X generation experiences in small boats on the high seas.  It’s just one of those rights of passage, in my view, but my brother-in-law is fully against it as he got so wigged out he can barely enjoy swimming in a freshwater lake.  Over 20 years later.  HA!

Keep on writing and I’ll keep on reading!

I promise.

MNB user Tom Redwine wrote:

As a son of the South, I fully support your leaving Gone With the Wind off your list. I truly feel that it's four hours you can never get back.

I do object to your having E.T. on there rather than 2001: A Space Odyssey. Don't get me wrong, I love E.T. with all my heart, but until Spielberg stops monkeying around with it (and the same goes for Lucas with Star Wars), I have to put it on hold. Though we're ten years past the actual date of events portrayed in 2001, the questions it raised still haunt us. 

(Like, why don't we have a Moon Base yet?) 

Love the MNB, keep it rollin' my friend.

MNB user Dave Howald wrote:

I really enjoyed your list.  I suspect it is because we are both white males and within 5-8 years in age so we have experienced many of the same things.

Two movies I would add to the list (Don’t ask me which ones I would delete) our my all time favorite movie, The Deer Hunter, and Planes, Trains, and Automobiles.
 
I love Deer Hunter because it shows the relationships and connectivity of the men and women of a working class town in PA and the effects of the Vietnam war.  The performances were outstanding.  I know the Russian Roulette scenes take the movie off of many people’s lists because according to historians it didn’t happen and was not needed to be a plot line of the movie, but I still love it.
 
Planes, Trains, and Automobiles is one of my favorites because I am a seasoned road warrior and I can identify (as I’m sure you can) with all the things that can and will go wrong while traveling.  I also love the humanity and love that develops between Steve Martin and John Candy.  Plus, every movie with late John Candy makes me laugh.

From another MNB user:

Surprised that Apollo 13 and Field of Dreams were missing off your list and also while Apollo 13 showed up in comments from a reader, that Field of Dreams did not.

To be honest, I’m not a huge fan of Apollo 13. As for Field of Dreams, I debated with myself long and hard about including it or Bull Durham, but went with the latter. Simply a matter of taste...though I love both movies.

MNB user Greg Lindenberg had some movies that did not make my list:

Yankee Doodle Dandy
It's a Wonderful Life
His Girl Friday
Stagecoach
The Thing from Another World
To Kill a Mockingbird
Twelve Angry Men
Apollo 13
Saving Private Ryan
Mr. Smith Goes to Washington

MNB user Philip Bradley wrote:

Your list omitted 2 great movies (I realize that this discussion could be endless! :-):
 
Klute and McCabe and Mrs. Miller.

Love them both...just wasn’t sure they were top 50 material.

MNB user Guy Wheeler wrote:

This from an old timer - Stalag 17 - in black & white. A great movie - drama
and comedy well done!

Love it. Along with The Great Escape and The Guns of Navarone, one of my favorite war movies.

One MNB user had a movie comment...and another, more serious point:

How could you leave off Saving Private Ryan and Schindler's List?
 
And two, why do you mention "gambler" when describing Bill Bennett?  Do you mention "smoker" when describing President Obama, "alcoholic" when mentioning Ted Kennedy, or "adulterer" when talking about Bill Clinton?  If you don't like the man, which you clearly don't, that's fine. But I think it takes your integrity down a notch when you take a dig at him...especially when talking about an unrelated topic such as movies.

Fair enough. But he annoyed me with his Independence Day comment, and since I was writing within the context of an “OffBeat” piece, I decide to take what was admittedly a cheap shot.

(Besides, he has always struck me as someone with a compassion deficit for people who have vices other than his own ... and so I decided to take what was admittedly a cheap shot. Lack of integrity on my part? Maybe. But maybe I just like taking the occasional cheap shot....)

Finally (for now, at least), this email from MNB user Ken Wagar:

Since you like movies so much I am curious about a different twist on things. I often find myself more enthralled with an actor (or of course actress’) performance than the film itself. For example while I would not rate Scent of a Woman in the top 50 movies I would rate the performance of Al Pacino very highly. So I am curious about what actor’s performances in film you might rate in your Top 50. Also interested to see how much overlap there happens to be between the two lists.

I’ll have to give that one some thought ... and maybe address it in a future “OffBeat.”

I sort of prefer the early Pacino, of The Godfather and Dog Day Afternoon...though I think one of my favorite Pacino performances is in a thoroughly entertaining movie called Looking for Richard. Check it out.