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: January 3, 2011

    The Washington Post reports that “this may go down as the year that social networking trumped searching as America's favorite online pastime. In 2010, Facebook pushed past Google to become the most popular site on the Internet for the first time, according to two Web tracking firms.” The change “marks another milestone in the ongoing shift in the way Americans spend their time online, a social change that profoundly alters how people get news and interact with one another - and even the definition of the word ‘friend.’

    “Since its inception, the service has evolved beyond a vehicle for sharing birthday photos and reconnecting with high school classmates to become a universe unto itself, one where users can watch videos, solicit restaurant recommendations and play games surrounded (at least virtually) by friends and family. Its rise suggests that the influence of search giants such as Google, which answer search queries with a complicated algorithm for ranking links, is giving way to something more personal: our network of friends and other connections.”

    This is a remarkable thing - an innovation that is technological, commercial and cultural, all at the same time.

    The story goes on: “A survey this summer by the Nielsen Co. found that Americans spent nearly 23 percent of their time online using social networks, up from about 16 percent in a 2009 poll. Social networking took up more time than any other activity, including e-mail, which experienced a decline. Searching took up just less than 4 percent of time online, according to the survey.”

    Savvy marketers will understand that this shift sets up a kind of goalpost for 2011 efforts - that they need to find ways to use social networking to access the hearts and minds of their shoppers.

    But really savvy marketers will understand that this is only the goalpost of the moment - that the real challenge will be to try to figure out what the next big thing will be.

    In other words, what will be the technological/commercial/cultural innovation that will push past Facebook? We may not all be capable of inventing it ... but to be relevant, we absolutely have to be capable of recognizing it.

    And that’s our Monday Eye-Opener, the first of many for 2011.
    KC's View:

    Published on: January 3, 2011

    Good piece in the Boston Globe the other day about the opportunities available to companies targeting the American Muslim population, generally considered to be “a new market segment for US companies. Corporations have long catered to Muslim communities in Europe, but businesses have only tentatively started to follow suit in the United States — and they are doing so at a time of intensified anti-Muslim feeling ... The worldwide market for Islamically permitted goods, called halal, has grown to more than $500 million annually.

    “Ritually slaughtered meat is a mainstay, but the halal industry is much broader, including foods and seasoning that omit alcohol, pork products and other forbidden ingredients, along with cosmetics, finance, and clothing.

    “Corporations have been courting immigrant Muslim communities in Europe for several years. Nestle, for example, has about 20 factories in Europe with halal-certified production lines and advertises to Western Muslims through a marketing campaign called Taste of Home. Nestle plans to increase its ethnic and halal offerings in Europe in coming years.”

    While some major US companies - including Walmart, McDonald’s and Whole Foods - have ventured into the business of marketing aggressively to the Muslim community, the Globe notes that “along with new customers ... the companies draw critics and can become targets in the ideological battles over Islam and terrorism.”

    The story reminds us that last year, when Best Buy noted a Muslim holiday, Eid al-Adha, in Thanksgiving ads because the two holidays fell close together, it took a lot of abuse from some segments of the population. The Globe writes that “Best Buy executives stood by their decision. The company saw the holiday greeting as part of a larger goal of reaching consumers from different cultures. Soon, Muslims started calling to thank Best Buy and set up a Facebook page honoring the company.”
    KC's View:
    People who confuse people who are Muslims with radical terrorists are making a mistake of ignorance. Some Muslims, to be sure, are terrorists. Some terrorists are Muslims. But not all terrorists are Muslim, nor are all Muslims terrorists. Some Muslims are actually patriotic Americans, just as some patriotic Americans are Muslim. (You’d think this would be self-evident, but some folks don’t get it.)

    To ignore this rapidly growing consumer segment is to make a mistake that could have long-term repercussions.

    Published on: January 3, 2011

    USA Today reports that nutrition labels - listing calories, calories from fat, total fat, saturated fat, cholesterol, sodium, protein and vitamins - will be required for “40 of the most commonly purchased cuts of beef, poultry, pork and lamb,” as of January 1, 2012, according to new rules published by the US Department of Agriculture (USDA).

    “Federal officials say they hope the labels will make Americans as conscious about health choices in the meats they buy as they have become in scouring labels on other packaged food products,” the paper writes.

    An example cited by the paper: “A 4-ounce serving of regular ground beef that is 73% lean meat ... contains 350 calories, 270 of them from fat, according to the USDA, making up 60% of the suggested daily intake of saturated fat in a 2,000-calorie diet.”
    KC's View:
    Some won’t like this, but information can be an effective sales tool. It is yet another example of how transparency is becoming ubiquitous ... like it or not.

    Published on: January 3, 2011

    Internet Retailer reports that “consumers rated their overall satisfaction with top e-retailers slightly lower this holiday season, giving 41 leading e-commerce sites a grade of 78 on a 100-point scale, down from 79 last year, according to ForeSee Results.”

    The survey showed that a dozen retailers scored with an 80 or higher, with and Netflix tying for the top spot with 86 points each. A score of 80 or higher is considered “excellent.”

    The ten other e-tailers that received 80 or higher were QVC, Avon, L.L. Bean, Newegg, Apple, eBay, Musician’s Friend, Vistaprint, Walmart and Williams-Sonoma.
    KC's View:
    Oddly enough, I probably did more of my holiday shopping in actual stores rather than online this year. It was a function of availabilities, timing, and the age of my kids. (We got one son, about to graduate college, a new suit appropriate for job interviews. That’s easier to do in an actual store, especially when there is a Jos. A Bank down the street that perpetually seems to be running a “buy one, get two free” sale.)

    But I’d certainly vouch for the places where I did shop online for holiday presents - Amazon, Netflix (where I changed my subscription because of a new Apple TV system we installed) and LL Bean. Plus Sur La Table, which wasn’t included in the ForeScore ratings.

    Published on: January 3, 2011

    • The New York Times reports that Walmart is one of several companies investing a total of $500 million in, described as “a fast-growing online retailer in China.” The precise amount of the check being written in Bentonville was not divulged.

    The Times writes, “The 360buy deal seems likely to feed excitement about China’s fast-growing Internet start-ups. Just a few weeks ago, one of China’s biggest online video sites,, raised more than $200 million in an initial public offering in the United States. Then, in December, its shares raced up in one of the hottest debuts in years on the Nasdaq.

    “China is already home to some of the world’s most valuable Internet companies, like Alibaba, Baidu and Tencent. The country also has the most Internet users, about 420 million, according to the latest government survey.”
    KC's View:

    Published on: January 3, 2011

    The Los Angeles Times reports that California’s chain restaurants now are required by law to post calorie counts on their menu boards - but that in Southern California, at least, officials won’t be enforcing the law because as yet undefined federal guidelines are set to become effective in March.

    According to the Times, “The federal regulations will cover more restaurant chains and more items, including alcoholic beverages. U.S. officials have not said whether the calorie numbers on menu listings will have to be displayed differently.”
    KC's View:
    I’m sure we’ll hear howls of complaint from people who feel that government has no business imposing such regulations. (It may be a new year, but the debate on this issue shows no signs of going away.)

    For me, however, here is the compelling passage from the Times story:

    McDonald's employees, who didn't have permission to be quoted on the subject, said some customers opened their eyes wide when they saw the high numbers, while others seemed not to notice.

    Which is fine. Nobody is telling people what to eat or where to eat it. But people at the very least ought to understand the reality of the moment, and the implications of the stuff that they are putting in their mouths.

    I’m not necessarily in favor of federal regulations covering this issue, but here is the reason that this ought to be the way things are all over the country. The Chicago Tribune writes that “rolling into 2011, fast-food joints across the country are set to deploy a potent new arsenal of greasy goodness for Americans who have grown numb to mere burgers. Think spicier, cheesier, gooier. The new items flout principles of healthful eating and instead celebrate a spirit of wanton gluttony.”

    Again, let’s be clear. Nobody ought to tell people what to eat or where to eat it. But companies ought to at least be required - if not by legislation, by the court of public opinion - to be up front about what is in the foods they serve.

    Published on: January 3, 2011

    The Wall Street Journal reports that the troubled Borders company - the nation’s second largest bricks-and-mortar bookstore chain, behind the not-quite-as-troubled Barnes & Noble - said last week that “it is delaying payments to some publishers, a sign that its financial troubles are worsening.” The company said “the delays were part of its efforts to refinance its debt and that it had notified the publishers with which it is seeking to restructure payments,” according to the story.

    This morning, the fallout began, as one distributor - Rowman & Littlefield Publishing Group - said it would stop shipping books to Borders for the time being.
    KC's View:
    Just because it is a new year, a company operating an increasingly obsolete business model should not expect things to change.

    Published on: January 3, 2011

    • Weis Markets announced it has lowered the prices on 2,400 staple items, effective Sunday, January 2 and that it will freeze the prices of these products for 90 days through April 2, 2011. It is the Company’s sixth round of its 90-day Price Freeze program over the past two years. The Price Freeze program includes 2,400 store brand and brand-name products in grocery, produce, frozen, dairy, meat, deli, seafood, bakery, health, beauty care and general merchandise.

    • The Associated Press reports that “starting next month Post Foods LLC will reduce the sugar content of its Fruity and Cocoa Pebbles cereals in order to provide a healthier food option for children. The cereal maker, whose other brands include Post Shredded Wheat, Honey Bunches of Oats and Post Grape Nuts, is the latest in a series of food companies to address the increasing nutritional concerns of consumers and their heightened awareness about childhood obesity.”

    Post Foods is a subsidiary of Ralcorp Holdings.

    • The Buffalo News reports that Tops Markets and a local dietary education business called Propel Health have teamed up to offer “consumers a creative weapon when they head to the grocery store shelves with healthfulness in mind ... For a small annual fee - about $20 - the program offers enrollees access to food and menu information and planning that is updated weekly to reflect the products and items available and on sale in the region's Tops stores.

    “The goal of the service ... is to show people that eating healthfully can be done cheaply as well -- and to empower shoppers with menus, recipes and nutritional information so they can feed themselves and their families well.”

    • CVS Caremark said Friday that it has reached an agreement to buy Universal American’s Medicare Part D unit, which focuses on the federal prescription benefit program, for $1.25 billion, an acquisition that the New York Times said “may open the nation’s largest pharmacy health care provider to further criticism about anticompetitive practices.”

    • The Associated Press reports that “SC Johnson said it is buying Sara Lee Corp.'s shoe care business, including the venerable Kiwi brand, for $328 million, as Sara Lee continues to shed nonfood segments ... The deal is expected to close by mid-2011.

    • The Wall Street Journal reports that it what is probably one of the least surprising marketing decisions of the new year, Procter & Gamble-owned Gillette said that it will let its marketing contract with golfer Tiger Woods expire, and will not renew.

    As the Journal put it, “Gillette had already pulled back on using Mr. Woods in ads, following a sex scandal last year. The golfer's once-pristine public image was sullied by revelations about his extramarital affairs, leading him to take a hiatus from professional golf. The disclosures severely damaging his lucrative endorsement career, which was said to once have generated an estimated $100 million annually.”
    KC's View:

    Published on: January 3, 2011

    The year may be new, but the issues and concerns remain the same. One MNB user wrote:

    Somehow I don’t think this new Food Safety Bill will yield intended food safety to the level of expectations.  It has lots of gaps.  Wasn’t HACCP supposed to solve all our problems about 10 years ago?  Now we have GFSI…and other initiatives supporting food safety more than ever but it’s still not enough?   I’ve even read that the FDA is using overinflated illness numbers, that have no basis in current events, just to create a sense of urgency to pass this bill during the lame duck congress.

    This bill appears to grant more power to the Federal agencies and therefore implies an increased transfer of responsibility to the Federal agencies to make food safe.  Yet the agencies deny assumption of more responsibility.  As a food quality professional, I can tell you that a visit to a high risk facility every 3 years is a real joke.  The frequency of visits must be at least quarterly for high risk….as is practiced in the milk industry.  So the FDA will be coming back to the well for more funds, you can count on that.

    I have a question:  Why not hold food production companies…and their executives…personally accountable?  Who should really assume responsibility for food safety?  Washington?  I don’t think so.  I don’t understand why anyone in industry would support such an obvious grab for more control of the private sector by the federal government agencies unless they were willing to shirk responsibility in this way.  Agencies that have a history of irresponsibility.

    Everyone should ask themselves if they lost a person very near and dear to them due to a food safety problem….how would it make you feel?  Who would you want to hold responsible?  The government agencies deliberately shirk responsibility and draft regulations to say they cannot be held responsible.  In essence, by passing such bills through Congress, we are making the regulatory agency into judge, jury, and executioner with no real responsibility to do a good job at this.  They don’t have a great track record of technical competence either.  So why do we increase their responsibility?  I say put responsibility where responsibility lies and quit kidding yourself that more regulatory oversight is the answer.      
    Until we, the people, hold corporations more directly accountable – in a more personal manner – I don’t see this as anything more than the traditional Washington song and dance backed up by special interest money.   It gives the illusion of progress in food safety when in reality, food safety may be compromised. 

    Basically, in a large food corporation, the financial and operational decisions of the president and the board of directors, via the trickle-down theory, have consequences on the level of food safety the company will practice.  If someone dies due to poor or lack of food safety, which is really “people safety”, the top executives (clear down to the plant manager) should be put in prison, with the rest of the murderers, until industry understands that you can’t take chances with food safety and that anything less than the best technology is tantamount to first degree murder.  They get paid the big bucks…it’s past time they earned it and shouldered more responsibility.

    People have died due to shoddy food safety practices and inadequate processing.  That’s a fact.  So…why is it that the leaders of these corporations, who hold the purse strings, who decide that it may be too expensive to invest in safe food systems or food safety assurance, are the ones who never get held directly accountable?  At most they get a small fine and a slap on the wrist.  In fact, they get bonuses and perks and a pat on the back for mitigating damages to the company!  There is your root cause for food safety problems in this country and I don’t see what the government agencies can do about that.

    Under current regulatory and social doctrine, I don’t think we will ever see total food safety – meaning zero deaths.  What is a tolerable number of food safety deaths?  Are we in an infinite loop of government regulatory authority that won’t stop until the government agencies run every food plant?   Where will food safety be then?  Heck they can’t even run the post office properly!  I say get government out of the food plants but pass laws to hold corporate executives personally accountable and you will see unparalleled food safety in this country.  There has to be an incentive or perhaps in this case, a dis-incentive, to achieve the level of food safety that is being called for.

    China had a solution at the other end of the spectrum during the melamine fiasco…these people were taken out and executed!   Most rational people might think that is a bit harsh…..but if you lost someone you love dearly due to a rich executive’s poor or biased decision, you might feel irrational about the whole thing.  The food safety decisions made by food executives are not accidental and I think it’s time we acknowledged that death due to a food safety issue is no longer accidental either.

    Sorry my rant is so long but it is a complex problem that I’ve been immersed in for my entire career.    And it just keeps getting worse…..

    Yes, I think we can agree that using the Chinese system of “justice” here in the US might not be the best way to go. And I think almost everyone agree that the legislation is not perfect. (Legislation almost never is.)

    I get your frustration. And in the end, food companies and their executives have to be held responsible. But I’m reading this a different way - that the government, as an instrument of the people, is requiring a higher level of competence and responsibility from companies ... not actually being responsible itself.

    MNB user Tom Murphy wrote, on another issue:

    You are right on about the transparency that smartphones bring and the resulting fear of retailers, both grocers and other segments. As consumers really begin to understand how hi-lo pricing works, expect to see more push back and more retailers going to EDLP.

    Likewise; the industries practices with discounts and coupons have created a consumer base that will only buy on sale - from any one of 3-4 retailers they shop regularly. This hil-o transparency along with the way we have trained our consumers to seek/wait for discounts is going to create major executive suite anxiety during a very slow recovery.

    MNB user Gerry Lopez had a thought about a quote from Roger McNamee, a Silicon Valley financier, that was included in the last MNB of the year:

    I get the guy likes Steve Jobs. Plenty to like there.

    But where does Roger get off making a comment like this about other CEOs?

    “What makes him different is that he’s creating jobs and economic activity out of thin air while just about every other CEO in America is working out ways to cut costs and lay people off.”

    Whaaaaat?  Just about every other CEO? Really? Mr McNamee must subscribe to the Robert Reich "facts to fit" school of economic thought.

    I'm so tired of being a punching bag for every jackass with an opinion, that I just couldn't pass on pointing that one out for you. I know plenty CEOs hiring, or keeping payroll stable even though economic prospects and future costs are unknown. Roger needs to get out and meet some folks.

    Illustrating that there can be a huge difference between being a financier and being a leader. They are not necessarily the same thing.

    MNB user Jeff Folloder had an opinion about something I wrote before going off on holiday:

    "Americans, in general, have no idea what anything costs. They have been so dazzled by promotions and discounts, so confused by budgetary sleight of hand tricks, that they simply cannot connect costs to prices."

    It's a very good hypothesis.  And quite valid because it is likely very true.  But there is another part that you left unsaid:  Americans, in general, believe that they know what a "fair" margin is.  And that fair margin almost always is perceived as net profit, when in most cases it is not.  Americans did not like the the perceived greed, via high prices, of the local, the independent, the service oriented retailers.  And so they based most of their decisions on price alone.  That forced a re-alignment of the retail tectonic plates towards high volume, low margin, big box retailing.  And now America is saying that they (the retailers) cannot cover costs with sustainable margins.  Go figure.

    And, from another MNB user, on another subject:

    Re: your mention of the Dickens classic being staged in klingon, I think you are so right how this series has permanently “infiltrated’ our culture.

    I am a serious yoga student, although I practice what is basically a very physical approach to it.  It’s simply how we, in the US, tend to do everything—i.e. we have embraced the physical approach to “enlightenment” via yoga.  Anyway, to get to the point, if/when we hit an extension in a posture that is further than we have attained prior, it’s called a “star trek” moment—i.e. going further than we have ever gone before.

    Likewise, re the terminology infiltrating our language, when my daughter was not happy, to put it mildly, w/a decision of mine regarding her, I was likened to a “Vulcan”, as in “that is so Vulcan, Mother”.

    The great thing is that your daughter gets the lingo.

    Live long and prosper.
    KC's View:

    Published on: January 3, 2011

    In the 17th and final regular season week of National Football League play...

    Miami Dolphins 7
    New England Patriots 38

    Buffalo Bills 7
    New York Jets 38

    Cincinnati Bengals 7
    Baltimore Ravens 13

    Oakland Raiders 31
    Kansas City Chiefs 10

    Carolina Panthers 10
    Atlanta Falcons 31

    Tampa Bay Buccaneers 23
    New Orleans Saints 13

    Dallas Cowboys 14
    Philadelphia Eagles 13

    New York Giants 17
    Washington Redskins 14

    Arizona Cardinals 7
    San Francisco 49ers 38

    Chicago Bears 3
    Green Bay Packers 10

    Tennessee Titans 20
    Indianapolis Colts 23

    San Diego Chargers 33
    Denver Broncos 28

    Minnesota Vikings 13
    Detroit Lions 20

    Jacksonville Jaguars 17
    Houston Texans 34

    Pittsburgh Steelers 41
    Cleveland Browns 9

    St. Louis Rams 6
    Seattle Seahawks 16

    This leaves, for the first weekend of the playoffs - Wild Card Weekend - the New York Jets playing the Indianapolis Colts, the Baltimore Ravens playing the Kansas City Chiefs, the Green Bay Packers playing the Philadelphia Eagles, and the defending Super Bowl Champion New Orleans Saints playing the Seattle Seahawks.

    Also yesterday, Brett Favre retired. Again. This one is expected to stick.
    KC's View: