retail news in context, analysis with attitude

Published on: January 7, 2011

by Kevin Coupe

There is a terrific piece from Knowledge @ Wharton about Kevin Plank, the founder and CEO of Under Armour, which he built from a company making “the first form-fitting, moisture wicking t-shirt” to one that currently generates more than a billion dollars a year in sales selling a range of athletic gear.

Plank says that the strength of his business comes from what he calls the "four pillars of greatness": "Build a great product." "Tell a great story." "Service the business." "Build a great team."

Among the notable quotes in the piece:

• On building a relationship with customers... “Our object cannot be to try to convince 25-year-olds to change brands, though that is always something good. But now 8-, 9- and 10-year-olds have a relationship with Under Armour [and say] it is their brand. I tell them that their great-great grandfather [bought products from] the guys from Germany [Adidas] and their grandfather grew up with the guys from Oregon [Nike]. But you will grow up with Under Armour.”

• On passion and teamwork...“My passion is to build the biggest, baddest brand on the planet. My vision is that I want to stay focused.... We want to make sure there is nothing that prevents us from doing what we want to do with our brand. Finally, we want to have the best type of people -- team, team, team. I can't underscore that need [enough]."

• On protecting the brand... You do something so you can get a quick buck and that may look good on the revenue chart, but only for a little while. What you do must protect your brand or you will ultimately fail. If you slap a logo on it, it might sell right away, but the brands that will endure are the ones that respect the consumer."

• On focus... “Nothing is really God-given. You have to embrace the things you feel are important and work hard -- will it to happen ... What I do know is that we have not yet built our defining product at Under Armour. We are not living in the past. Our larger competitors are 20 times our size. There is running room all over.”

• On the importance of narrative... “Great companies have to manage the cadence of what they do. ‘Chapter One’ [of a business's growth trajectory] has to relate right to Chapter Two and Chapter Three and Chapter Four. Every great brand is like a great story. Every commercial we run, every product we make, is like a chapter in that book. If we don't manage the cadence, though, we will get too far ahead of ourselves.”

That’s our Friday Eye-Opener.

Published on: January 7, 2011

Consumer Reports is out with a new survey of American’s eating habits, concluding that while “Americans are making an effort to practice good nutrition and weight control, with 90 percent describing their diet as ‘somewhat,’ ‘very,’ or ‘extremely’ healthy ... they have a tendency to give themselves more credit than they perhaps deserve. They drink more sweetened beverages than they should, for example, and sometimes undercut their own efforts at weight control by not limiting their intake of sweets and fats. Also, they like Cheerios a lot, but parsnips, not so much.”

There also seems to be a disconnect between what people said, and what actually is.

“Based on the heights and weights they gave us, about 35 percent were at an appropriate weight, 36 percent were overweight, and 21 percent officially qualified as obese, with a body mass index of 30 or more,” Consumer Reports writes.

“But not everyone was realistic about where they fell on the weight spectrum. Overall, 50 percent said they were overweight or obese, compared with about six in 10 who actually were. About one in three people who said they were at a healthy weight actually had BMIs in the overweight range. And less than 1 in 10 made an error in the other direction - they said they were overweight or obese when their BMIs suggested they were not.”

Other notes from the survey:

• “Fifty-nine percent said they were either ‘careful’ or ‘strict’ about their food intake, while only 23 percent said they pretty much ate whatever they wanted. Thirty-eight percent described their diet over the last year as ‘extremely’ or ‘very’ healthy and 53 percent said their diet was ‘somewhat’ healthy. Only 11 percent owned up to a diet that was ‘not very’ healthy or ‘not at all’ healthy.”

• “Our average respondent identified 10 kinds of vegetables he or she typically ate once a week or more. But when we counted how many vegetables the typical American said he rarely or never reached for, that number jumped to 15 ... Overall, 66 percent of the respondents said they were satisfied with the amount of vegetables they ate. Asked why they didn't step up their vegetable intake, 30 percent said it was because they thought vegetables were hard to store or went ‘bad’ too quickly. Fourteen percent said vegetables were too expensive. Seventeen percent said someone in their household didn't like vegetables, and 13 percent said that they didn't like them.”

Published on: January 7, 2011

The Financial Times< reports that Walmart “has expanded its global e commerce presence, launching new websites in Latin America and China as it vies with international rivals including Amazon, Carrefour and Tesco, for sales in rapidly emerging online markets.

“In Latin America, Walmart has started online retail operations in Mexico, Chile and Argentina, which together with China give it an e-commerce presence in half of the 14 countries outside the US where it currently has stores.

“The retailer has described its global e-commerce initiative as a ‘multibillion-dollar opportunity’ and has invested heavily over the past two years in creating a platform that can be easily replicated in different countries and languages.”

The story, by the always reliable Jonathan Birchall, notes that Doug McMillon, head of Walmart’s international business, said in a recent interview “that the retailer was focusing initially on markets where it already has stores, which can also be used to deliver goods to customers. ‘We believe our 8,000 points of distribution [stores] give us an opportunity to leverage that network, more than a purely online retailer can do,’ he said.”

Amazon has distribution centers in China, and Tesco reportedly plans to build warehouses there.

Published on: January 7, 2011

Wine Spectator reports that “GlaxoSmithKline has halted the development of SRT501, an experimental drug based on resveratrol, but that doesn’t mean the pharmaceutical firm is no longer developing medicines based on the compound ... GlaxoSmithKline recently reviewed the trial studies of SRT501, noting that after comprehensive analysis, the drug was found to be only minimally effective. Further, they reviewed the cases of renal failure in study patients. While the kidney complications were due to the underlying disease, not the drug, the drug’s side effects indirectly led to dehydration, which accelerated kidney failure.”

According to the story, “Glaxo announced last week that it would be halting all trials of the drug, after SRT501 failed to make a significant impact on patients with cancer and even aggravated some kidney problems ... The health benefits of resveratrol have been the focus of multiple studies in recent years. Researchers discovered that the compound, found in grapes as well as other foods such as peanuts, blueberries and cranberries, can extend the lifespan of mice while protecting them from several diseases. The compound is part of the grapevine’s immune system and helps fight off invaders. Since it's absorbed into red wine during the fermentation process, researchers have debated whether resveratrol is at least partially responsible for wine's health benefits.”

Published on: January 7, 2011

Advertising Age reports that Kraft has hired Ted Williams - the homeless former drug addict with a velvety voice who became an internet sensation when a video of him speaking showed up on YouTube - to voice over its newest commercials for its Macaroni & Cheese brand.

The announcement comes after Williams was hired by the Cleveland Cavaliers and MSNBC to do voice-over work, and was interviewed on “Today” about his plight and dramatic emergence from dire circumstances living under a bridge in Columbus, Ohio.

Published on: January 7, 2011

• Bloomberg reports that the Philippines’ Trade Secretary, Gregory Domingo, said in an interview that Walmart has been looking at that nation for possible expansion, though he did not elaborate on what the company’s plans might be.
• Bloomberg also reports that Walmart “is planning to open more stores in Brazil this year than the almost 50 it opened in the country last year, the company’s president in Brazil, Marcos Samaha, told reporters today in Barueri, Sao Paulo.

“The company may also make acquisitions in Brazil, he said.”

Published on: January 7, 2011

• Tesco-owned US-based Fresh & Easy Neighborhood Markets announced that it “is expanding its popular and affordable eatwell range, just in time to help customers keep their New Year’s resolutions to be healthier and save money. All eatwell products contain no more than 25% of the daily values for calories, fat, saturated fat and sodium (based upon a 2,000 calorie diet) ... eatwell contains no artificial colors or flavors, no high-fructose corn syrup, no added trans fats and only uses preservatives when absolutely necessary.”

Published on: January 7, 2011

• Go figure. ShopRite announced this week that it is celebrating the 40th anniversary of its iconic annual “Can Can” sale, which promotes canned fruits and vegetables with an aggressive ad campaign. Among the components of the celebration: “To commemorate the 40th Anniversary of ShopRite’s famous Can Can Sale, ShopRite has teamed up with select vendors, including Coca-Cola and Nestle, to create exclusive, limited edition products to be sold only at ShopRite stores while supplies last.”

• The Indianapolis Business Journal reports that Marsh Supermarkets plans to close stores in Shelbyville and Connersville by the end of February, a move that comes after another store was closed last week in Rushville. The company said the closures follow an ongoing review of company assets.

• Published reports say that following the announced closure of stores in its chains around the country, Supervalu said yesterday that its Jewel-Osco chain is offering its corporate employees unpaid time off between now and the end of February. The company emphasized that the program is voluntary, not mandatory, as the company looks to cut costs.

• The Chicago Tribune has a story today about how supermarkets, “facing increased competition from discounters and upscale players, are caught in the middle.

“There's pressure from cost-conscious consumers, who have gotten used to depressed prices during the downturn. Other shoppers are demanding higher quality products, including organics, but want to save on those too. On top of this, higher food prices are being instituted and could encourage more consumers to shop discount. So some big chains are having to adjust.”

Published on: January 7, 2011

• Price Chopper Supermarkets/Golub Corporation announced that Mona Golub, the company’s Vice President of Public Relations and Consumer Services, has been promoted to the position of Vice President of Public Relations and Consumer and Marketing Services.

Price Chopper also announced that Heidi Reale, the company’s Manager of Market Research, has been promoted to the position of Director of Consumer Insights.

• Gladson, the provider of product information and category management services for the consumer packaged goods industry, has named Susan B. Sentell as its new president/CEO. Sentell, the company said, “has served on Gladson’s board of directors since 2007 and has over 25 years of executive experience, leading companies in Fortune 500, mid-sized and entrepreneurial environments.”

• The Food Marketing Institute (FMI) announced the appointment of Thomas Osborne as senior technical director of the Safe Quality Food Institute (SQFI), a division of FMI.   Osborne joins SQF with 18 years of industry food safety experience, most recently as director of quality assurance, food safety, regulatory affairs and laboratories at Wayne Farms, LLC.  He also served in various quality assurance and food safety roles for 9 years at Tyson Foods, Inc.  

Published on: January 7, 2011

• Donald J. Tyson, who turned his father’s chicken business into Tyson Foods, one of the world’s biggest food companies, died yesterday of complications from cancer. He was 80.

Published on: January 7, 2011

...will return.

Published on: January 7, 2011

Sometimes stories open your eyes. Sometimes, they make your jaw drop. This one qualifies, in my mind, as both.

An organization called the American Association of Wine Economists - which sounds like it could be a pretty good place to work if you are an economist who likes to party - is out with a study called “Women Or Wine? Monogamy and Alcohol.”

Yes, you got that right.

Here the basic premise of the study. Apparently, the researchers realized that the two main social groups in the world that allow or sanction polygamy - Fundamentalist Mormons and some segments of Islam - do not consume alcohol.

According to the study, there does seem to be “a correlation between the shift from polygamy to monogamy and the growth of alcohol consumption.”

There are some fascinating tidbits of information in the study. For example, the study says that “first major step in history towards monogamy is when formal monogamy is introduced in Greece around 1000BC. This rule is maintained by the Romans and is later spread over the Roman Empire. Interestingly, during the centuries of the Greek and Roman Empires, those are the only two regimes which have formal monogamy, and also the only ones that (only) drink wine. The rest of the world is considered barbarian by the Greeks and the Romans, for both reasons, i.e. for having multiple wives and for drinking beer.”

(I never saw a correlation between drinking beer and having two wives. Go figure.)

Later on, the study says, “With the decline of the Roman empire, the Christian Church played an important role in spreading and preserving both the rule of monogamy and alcohol production, i.e. viticulture as well as beer brewing. Later, while preaching and spreading the word of God, monks, priests and friars maintained and reinforced formal monogamy, but also promoted viticulture and, during the Middle Ages, monasteries became centers of brewery technology and beer production ...

Later, the Industrial Revolution brought significant social, economic and technological changes which appear to have played a major role in promoting effective monogamy and simultaneously inducing an increase in mass-alcohol consumption.”

Now, there seems to be no specific causality for why monogamous societies drink and why polygamous societies don’t. I’m actually a little surprised by it, since if I had more than one wife, I’m fairly sure I’d drink a lot more than I do. (Okay, that was the cheap and obvious joke. I couldn’t help myself.)

What I really love is the idea that someone actually did a study on this, and that retailers can now introduce a new marketing program next Valentine’s Day - “Celebrate monogamy, respect history, have a drink.”




One of my favorite columnists is Kathleen Parker of the Washington Post, and she wrote a New Year’s piece that I thought was excellent.

Parker offered what she said were her “un-jaded, un-cynical, appropriately abbreviated (you're welcome) list of resolutions for all times, but especially now.” She used a familiar phrase - Eat, Pray, Love - and said it boils down to this: “Eat less, pray in private, love because . . . what's the alternative?”

She elaborated:

“So how does one emerge a winner in life's little lottery? Scam the system by eating less. It's that simple. By eating less, we are less likely to become fat, which leads to multiple health complications, most of which can be avoided. Shop the perimeters of the grocery store (i.e., whole foods) and eliminate sugar. Easy.

“Pray there's a heaven but do pray quietly. It can't be a mystery any longer that the God urge has a disquieting effect on certain members of the human tribe. I share the urge but have found ways of communing that don't require converting others, invading countries or shedding infidels of their heads.

“Fundamentalists, no matter what their path to glory, share a streak of intolerance that can't have much to do with any but a malevolent creator's design. Either such a creator is undeserving of worship or the worshipers have misread their scripts. Whichever the case - and to each his own - what anyone prays is no one else's business. Let's leave it there.”

“Finally, the most sublime for last: Love.
We are mightily confused about this matter, but it, too, is a simple thing ... At the risk of sounding preachy, God forbid, it's about giving. Here is giving: Listening. Sparing time. Not interrupting. Holding that thought. Leaving the last drop. Staying home. Turning it off, whatever it is. Making eye contact. Picking it up. Taking the room's temperature. Paying attention. Waiting.

“More Golden Rule than heavenly virtues, but you get the drift.”




And speaking of the golden rule and interesting columns...

The comedian Ricky Gervais wrote a wonderful piece in the Wall Street Journal over the holidays about why he is an atheist. Some excerpts:

“As an atheist, I see nothing ‘wrong’ in believing in a god. I don’t think there is a god, but belief in him does no harm. If it helps you in any way, then that’s fine with me. It’s when belief starts infringing on other people’s rights when it worries me. I would never deny your right to believe in a god. I would just rather you didn’t kill people who believe in a different god, say. Or stone someone to death because your rulebook says their sexuality is immoral. It’s strange that anyone who believes that an all-powerful all-knowing, omniscient power responsible for everything that happens, would also want to judge and punish people for what they are.”

“‘Do unto others…’ is a good rule of thumb. I live by that. Forgiveness is probably the greatest virtue there is. But that’s exactly what it is -­ a virtue. Not just a Christian virtue. No one owns being good. I’m good. I just don’t believe I’ll be rewarded for it in heaven. My reward is here and now. It’s knowing that I try to do the right thing. That I lived a good life. And that’s where spirituality really lost its way. When it became a stick to beat people with. ‘Do this or you’ll burn in hell.’

“You won’t burn in hell. But be nice anyway.”




Being nice is important. But sometimes, I think, snarkiness has its place. For those of you who agreed with my negative feelings about Oprah Winfrey a few weeks ago, check out the hilarious Lisa De Moraes column about her in today’s Washington Post. (We are not alone!)




As I mentioned before i went off on Christmas vacation, one of my goals was to watch a bunch of movies. Which I did. And except for one movie, I enjoyed the hell out of them.

True Grit. Just great, and far superior to the original version, which even in its location shots still felt like it was filmed on a backlot; on this one, you can taste the dust. There are wonderful performances by Jeff Bridges as Rooster Cogburn (the old John Wayne role, which Bridges makes his own, increasingly demonstrating that he is one of the best actors of his generation at the top of his powers), Matt Damon as a Texas Ranger who is more than he appears to be, and Hallee Steinfeld as Mattie Ross, the resolute young woman looking for vengeance for her father’s murder.

The Fighter. Based on a true story and set in Lowell, Massachusetts, in the mid-nineties, this movie is about Micky Ward (Mark Wahlberg) and his half-brother, Dicky Eklund (Christian Bale), two sons in a matriarchal family who tried to escape their modest circumstances in the boxing ring. The contrast between the two sons is striking - Micky is a quiet plodder, while Dicky has turned to crack to assuage his demons. The Fighter is compelling stuff - one reviewer said the family dynamics (and the performance of Melissa Leo as their horror show of a mother) make it close to a Eugene O’Neill play than Rocky, and I can’t disagree with that.

The King’s Speech. A period film set in pre World War II London and focusing on the travails of King George VI (Colin Firth), who unexpectedly found himself on the throne (after the abdication of King Edward VIII) and facing the challenge of inspiring the British population to fight against Hitler - while at the same time suffering from a crippling stammer that many thought made him unfit to be king. The movie examines the efforts of an unorthodox speech therapist (Geoffrey Rush) to help the king find his voice, both physically and emotionally. Simply stunning and moving.

Those were the three new movies. During the blizzard, I also watched with my sons the director’s cut of Avatar in high-def DVD, which was fascinating...though it did make me wonder about the economics of shooting so much film that couldn’t be used.

And, I watched Toy Story 3 for the first time - and found it to be unexpectedly moving in its treatment of loss and loyalty. Not sure if kids get it, but I’ve yet to talk to an adult who wasn’t affected by it.

The only movie I saw over the holiday that I hated was The A-Team, which I also watched with my sons. It was just awful - and I even disliked Liam Neeson in it, and I like Liam Neeson in almost everything. (Check out the trailer for Unknown online...it looks very cool.)

And speaking of Neeson...I also watched Love Actually for the umpteenth time...it is my favorite Christmas movie, and no holiday would be complete without it.




My wines of the week come from Mrs. Content Guy, who has become an enormous chardonnay fan...

2008 Chateau Ste. Michelle Indian Wells Chardonnay, from Washington State’s Columbia Valley.

2008 Sebastiani Chardonnay, from Sonoma.

2009 Bogle Chardonnay, from California.

All excellent.

And I loved, by the way, our Christmas wine - the 2007 Director’s Cut “Cinema” blend of Cabernet Sauvignon, Zinfandel, Cabernet Franc and Petite Sirah, from Francis Ford Coppola. It was perfect with the evening’s filet mignon.




Oddly enough, I also discovered a beer over the weekend that I’d never had before - Samuel Adams Red Ale, which instantly became a house favorite. Perfect for these cold winter nights.




That’s it for this week. Have a great weekend, and I’ll see you Monday.

Slainte!