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 14, 2011

    by Kevin Coupe

    Sometimes, brand equity can rest on how you answer the phone.

    Case in point. The folks who make Noxzema shaving cream may not have known that when they got a complaint on the phone the other day, the dissatisfied customer was none other than David Letterman.

    He told the story on “The Late Show” the other night. he’s been a 40-year user of Noxzema, but has found recently that the consistency had changed and that the cream would not stick to his face. He had one of his assistants call to complain.

    This is where the stories diverge a bit. The folks at Alberto-Culver tell the Chicago Sun Times that they offered him a coupon for a new can. “That’s standard procedure when a customer calls with a complaint, and we can’t be certain about what may be the cause of the problem,” a spokesman said.

    But Letterman said - on the air, to millions of viewers - that Noxzema said that it was having a nozzle problem.

    Here’s the real problem ... and it is only compounded by the fact that Letterman has a soapbox.

    You had a four decade user of the product with a complaint. Loyal users can be advocates for a brand, but unhappy customers almost always can wreck a company’s brand equity. Dismissing a complaint so cavalierly only serves to compound the complaint, not solve it. Resolving the complaint - and showing real compassion - serves to reinforce the strength of the brand.

    Furthermore, Letterman obviously was a loyal customer who cared enough about the brand to complain, as opposed to just switching to another brand.

    So pay attention next time the phone rings. It may be a grousing customer offering you a real opportunity to show how great a company you are, and how strong your brand is.

    And that’s our Friday Eye-Opener.
    KC's View:

    Published on: January 14, 2011

    MNB was actually on track to come out by 8:30 EST this morning...but because of a power issue, I lost almost the entire thing, and had to rewrite it from scratch...which is why you are getting it so late.

    My apologies.
    KC's View:

    Published on: January 14, 2011

    The Associated Press reports that the US Department of Agriculture (USDA) has released a new proposal that for the first time in 15 years would set new nutritional standards for the federally subsidized lunches served in the nation’s schools.

    According to the story, the guidelines, if adopted, “would require schools to cut sodium in those meals by more than half, use more whole grains and serve low fat milk. They also would limit kids to only one cup of starchy vegetables a week, so schools couldn't offer french fries every day.

    “Agriculture Secretary Tom Vilsack said the new standards could affect more than 32 million children and are crucial because kids can consume as much as half of their daily calories in school ... The subsidized meals that would fall under the guidelines proposed this week are served as free and low-cost meals to low-income children and long have been subject to government nutrition standards. The new law for the first time will extend nutrition standards to other foods sold in schools that aren't subsidized by the federal government, including ‘a la carte’ foods on the lunch line and snacks in vending machines. Those standards, while expected to be similar, will be written separately.”

    The story notes that it could take years for the proposals to be converted into actual regulations and mandates.
    KC's View:
    Let’s be clear.

    These proposals are not an attempt by the federal government to tell you what you can feed your kids. You can send them to school with pretty much anything in their brown bags that you want to. What the proposals do say is that in a nation where obesity is accepted as having reached epidemic proportions, it is good public policy to use federal money to help educate kids about the importance of having a varied and nutritious diet - especially when obesity seen in many quarters as not just a health problem, but a national security and economic threat.

    Here’s how HealthDay News frames the issue:

    “The total economic cost of overweight and obesity in the United States is $270 billion per year while the cost in Canada is about $30 billion a year, a new study shows.

    “The $300 billion total cost in the United States and Canada is the result of: increased need for medical care ($127 billion); loss of worker productivity due to higher rates of death ($49 billion); loss of productivity due to disability of active workers ($43 billion); and loss of productivity due to total disability ($72 billion), said the Society of Actuaries (SOA).”

    These aren’t made-up numbers; we all know that actuaries have no imagination. (Just joking. We kid because we love.)

    Feed your kids what you want. It would be irresponsible for the federal government not to try to address a health, national security and economic issue in this way.

    And, by the way...smart retailers can actually piggyback on these proposals by offering their own suggestions and alternatives.

    Published on: January 14, 2011

    The Arizona Republic reports that Safeway has not yet reopened the Tucson store that was the site of the assassination attempt last weekend on Rep. Rep. Gabrielle Giffords (D-Arizona), which resulted in the deaths of six people, including a nine year old girl.

    No timeline has yet been set for a reopening, though it is expected that the Safeway store will reopen in a few days.

    Meanwhile, the Arizona Daily Star reports that Safeway has formed a fund to aid the victims of the shooting, and seeded it with a $100,00 contribution.

    "This opening contribution will be bolstered by in-store contributions from Safeway customers and community members in the company's Arizona stores," Safeway said in a news release Thursday. "Donation canisters have been placed at check stands in the company's 116 Arizona stores."

    "We have felt the shock and the sadness, and with our neighbors, we have felt this community come together to heal and to reach out to the victims and their families," Dan Valenzuela, Safeway's division president for Arizona, said in the news release. "The fund is an extension of what we - and everyone in Tucson - have done from the very beginning. As a community, we have tried to find ways to help where we can and to stand together."
    KC's View:
    It is in moments like these that diverse people form a community, and to reiterate a phrase we’ve been using a lot here on MNB this week, “make gentle the life of this world.”

    Published on: January 14, 2011

    The Chicago Sun Times reports on a new US Department of Agriculture (USDA) report saying that a drop in production for corn (down five percent) and soybeans (down one percent), mostly because of weather-related issues, is likely to result in increased prices - which worsens a situation caused by tighter supplies created by high demand from developing countries.
    KC's View:
    As prices increase in segments that traditionally have been extremely important in terms of supermarket distribution, retailers will be faced with some hard - though potentially positive - changes in how they market certain products previously viewed as commodities.

    They’ll have to suggest to consumers that these products have values, rather than just value ... and they’ll have to justify higher prices through greater amounts of information and a higher degree of transparency. This can be a good thing, if it improves the retailer’s brand equity. It won’t be easy, and may force them to re-evaluate how they market, and even what profitability benchmarks they assign to specific segments. And they’ll have to be aggressive about it, not reactive.

    But as I said, this can be a good thing. Unless it isn’t.

    Published on: January 14, 2011

    MSNBC reports that as the nation’s nutrition consciousness grows, “vending machines that dispense snacks such as organic yogurt and granola bars, gluten-free snacks and fresh fruit will be rolling into schools, fitness clubs and office buildings. Often they will be replacing machines that have been around since the 1970s dispensing sugary sodas and snacks stuffed with trans-fats, high-fructose corn syrup and hydrogenated oils.”

    The story goes on: “One-third of consumers now buy organic products monthly, according to the Organic Trade Association. This new organic and healthy vending sector is made up primarily of small, locally-owned businesses, and fresh out of the gate, their sales aren't yet tracked in the $30 billion vending industry. “

    However, there are some signs of this turning into a serious niche business: “Fresh Healthy Vending, based in San Diego, has generated $3.8 million just four months after its start by selling franchises. The company has sold 36 vending franchises to entrepreneurs who have put machines in 331 locations nationwide, including 32 schools. The company also purchased YoNaturals in 2010, another San Diego-based healthy vending company with 1,700 locations.”
    KC's View:

    Published on: January 14, 2011

    • Target Corp. has announced plans to open its first stores outside the US - in Canada, where is buying leases for more than 200 Zellers stores from Hudson’s Bay Co. Target reportedly plans to open between 100 and 150 stores during 2013 and 2014, mostly in cities such as Vancouver, Montreal, Ottawa, Edmonton and Calgary.

    • The Wall Street Journal reports this morning that Starbucks has formed an alliance with India's Tata Group, a move that is designed to provide it with a vehicle to open stores in India and gain access to that nation’s fast-growing coffee culture. The move also is expected to allow Starbucks to sell more Indian coffee in its stores around the world; India currently is the globe’s fifth largest coffee exporter.

    Crain’s Chicago Business reports that “Chicago's City Council on Thursday approved a $1-million property tax break for Costco Wholesale Corp. to build its second store in the city.

    “The tax break was introduced by Mayor Richard M. Daley at a December City Council meeting. He asked that the Issaquah, Wash.-based retailer receive a $1-million tax break over 12 years for a store to be built at 14th Street and Ashland Avenue.”

    • The Financial Times reports that for the first time in seven years, Sainsbury moved ahead of Walmart-owned Asda Group to become the UK’s second-biggest grocer ... at least during December.

    Sainsbury registered a 16.6 percent market share for the month, as opposed to Asda’s 16.5 percent.

    Tesco remains in first place, with about 30 percent of the British grocery market.

    • Ahold announced that it will enter the Belgium market for the first time in March, with a franchised unit operating under the Albert Heijn banner. No word on what the company’s long-term expansion plans are for Belgium, or what timeline it may be operating under.
    KC's View:

    Published on: January 14, 2011

    • The BBC reports that Albert Heijn, the former Ahold CEO and grandson of the company’s founder, head of a Dutch supermarket giant, has died at his UK home. He was 83.
    KC's View:

    Published on: January 14, 2011

    Yesterday, in a “Department of Corrections” piece, I noted that the day before I’d made an editing error, wrote “do” instead of “don’t,” and accidentally changed the entire meaning of a quote from Supervalu CEO Craig Herkert ... who, to be honest, has enough problems without me misquoting him.

    However, my “Corrections” piece did not go far enough. I got the following email yesterday from MNB user Bill Welch:

    Please don’t criticize J&J for a phantom recall and pontificate about transparency when you do not provide a clear explanation of the nature of your own “editing error”. 

    The omission of the word “don’t” turned the quote from Craig Herkert, Supervalu CEO around 180 degrees. It took me a second or third reading of the correction (comparing the two quotes) to find out what the difference was and its implication.  BIG DIFFERENCE.  What do you think the employees of Supervalu felt about your original mistaken quote?  Maybe a simple I’m sorry.


    To be clear, I did not criticize J&J - I just reported the allegations in the case.

    That said...

    Bill Welch is absolutely right. I should have apologized. In fact, I feel awful about it, because for the past nine-plus years, whenever I’ve goofed, I’ve tried to own up to it and apologize. For me, transparency is very important. This time, for whatever reason, I only pointed out the mistake and corrected it.

    So I apologize for the original mistake. And for not apologizing to begin with. I certainly wasn’t trying to hide it, nor make light of it ... especially because I am painfully aware that people’s jobs could be at stake, and that my typos could cause some folks a great deal of consternation.
    KC's View:

    Published on: January 14, 2011

    ...will return next week.
    KC's View:

    Published on: January 14, 2011

    Monday is Martin Luther King Jr. Day – a national holiday, a school holiday, and therefore a day on which Mrs. Content Guy and the sole remaining living-at-home Content Kid have the day off. I have pledged to spend the day with them…and will see you Tuesday morning.
    KC's View:

    Published on: January 14, 2011

    You have to love a promotion that looks better two years after it took place.

    The Norwalk Hour, just up the road from me, reports that the local Ford Dealership decided to do something unique a couple of years ago to boost sales. The owner, seeing that Ford stock was trading at under two bucks a share, decided to give away 100 shares of the company with every vehicle.

    "It was well received," owner Chris McMahon tells the paper. "It was not at a time when people were rushing into showrooms. I can't say it drove people in here, but it certainly made it more fun for those who bought them. It created good will and fun."

    Last night, Ford shares were trading at better than $18, and the company is being touted as one of the great American turnaround stories.

    And I suspect that McMahon has some happy customers.




    Last week, I wrote about True Grit which I loved, in part because the writers/director, Joel and Ethan Coen, brought to the film the elements of their best films - engaging performances, quirky characters and dialogue, and wonderful cinematography. I was fascinated afterwards to read a piece by Ann Hornaday in the Washington Post that rated all of the Coen brothers’ movies....and she admitted that she is not among the cult that loves .

    Neither am I. For some reasons, while I love Jeff Bridges as the Dude, the film’s charms escape me.

    I love Fargo, O Brother, Where Art Thou?, and Blood Simple. I rate True Grit higher than Hornaday. But I just don’t get Lebowski.

    Interestingly, I’ve been talking to a number of friends about this...and have discovered that there is, in fact, a small cult of people who feel the same way, but don’t admit it because the cult of Lebowski is so strong.

    But I’m coming out of the closet on this one. Lebowski skeptics, unite!




    My wine of the week comes compliments of Mrs. Content Guy...who loves the 2009 Pine Ridge Chenin Blanc - Viognier blend, which is wonderful with spicy seafood. And I agree.



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

    Until then...Slainte!
    KC's View: