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    Published on: January 21, 2011

    by Kevin Coupe

    The national infestation of bedbugs - which are enjoying (if that is the right word) a resurgence after being virtually eradicated - apparently has taken place because bedbugs have evolved to the point where they are resistant to the standard pesticides used to fight them.

    According to a story in the Wall Street Journal, “Bedbugs today appear to have nerve cells better able to withstand the chemical effects, higher levels of enzymes that detoxify the lethal substances, and thicker shells that can block insecticides ... In an era of antibiotic-resistant infections and herbicide-resistant weeds, the ability of bedbugs to survive once-lethal doses of insecticides is the newest evidence that efforts to eradicate pests that plague humankind may make some of them stronger. It is a key reason for the spread of bedbugs in the past decade, several researchers who study them said.”

    There is a great business lesson here. If you compete today using tried and true and traditional strategies and tactics, there is a very strong possibility that at some point the situation will begin resisting them. The competition adjusts, the customer begins to ignore them or become inured to their charms, and the dog-eat-dog world keeps spinning on its axis. Suddenly, you’re playing catch up ... which is never a good competitive situation to be in.

    Unlike the scientists and exterminators who perhaps should have been paying attention to their evolving and meddlesome prey, marketers have to keep developing new strategies and tactics.

    We all have to stay ahead of evolution.

    Take it from the bedbugs, and the people trying to eradicate them.

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

    Published on: January 21, 2011

    by Michael Sansolo

    ST. HELENA, CA. -- Moving the American public to healthier diets and lifestyles is an enormous goal, but the only way of achieving that goal might well be one small step at a time. And in many cases, those steps will come by teaching consumers to make better dietary choices.

    The second day of the World of Healthy Flavors leadership retreat here examined some of the profound health and wellness problems facing Americans, including obesity, heart disease, diabetes and more. A number of speakers detailed the incredible litany of problems facing Americans and detailed what they see as key dietary and lifestyle changes including: eating smaller portions, consuming healthier foods and beverages, and the need for more physical activity. The conference, co-sponsored by the Culinary Institute of America (CIA) and Harvard University’s School of Public Health, attracts a diverse group of chefs, dietitians and food specialists from food retailers, restaurants, consumer packaged good suppliers, institutions and more.

    A number of speakers talked about the need for incremental improvements among shoppers. Janet King of Children’s Hospital Oakland Research Institute likened the move for change to a ratchet, with constant slow change and movement in the right direction. Speakers talked about the need to educate shoppers on making some small healthy changes in their diet such as helping them learn which proteins or fats are best for them. One speaker called for a prohibition of the phrase “low fat,” saying science has shown that fat isn’t the problem, especially when there are many healthy fats. Rather the problem is portion size and the types of foods being consumed too frequently by Americans.

    The challenge won’t be easy. A panel of school lunch providers explained that one consequence of moving toward healthier fare is a decline in cafeteria use, which then creates budgetary problems. Instead, the panelists said they need to make small improvements and to create links to parents so that any nutritional improvements made during the day aren’t undone at night.
    KC's View:

    Published on: January 21, 2011

    The Wall Street Journal reports that Delhaize Group, which owns and gets two-thirds of its revenue from US chains Food Lion, Hannaford and Sweetbay, plans to spend as much as $1.21 billion (US) “opening new stores and remodeling existing outlets in the U.S., despite a tough retail environment which saw its same-store sales decline 0.8% in the fourth quarter.”

    The Journal notes that Delhaize plans to expand its Bottom Dollar format, “a discount format focused on competitive prices and a strong share of around 50% of private-label products.”

    According to the story, “Delhaize is differentiating itself from the majority of its U.S. competitors with a long-term strategy to lower prices rather than using promotions to attract customers. The company said it takes time for consumers to change their price perception, but it has started to reap the benefit of the price cuts that it introduced in January last year.”
    KC's View:

    Published on: January 21, 2011

    The Philadelphia Inquirer reports that Supervalu-owned Acme Markets “was rebuffed this week by local unionized clerks, who rejected an offer to eliminate up to 300 positions through buyouts.

    “United Food and Commercial Workers Local 1776 sent Malvern-based Acme a letter Thursday informing the grocer that Philadelphia-area members had voted ‘no’ to the cash-saving maneuver Wednesday night, president Wendell Young IV said.

    “About 100 of their South Jersey counterparts who belong to another UFCW local accepted similar voluntary buyouts and left their jobs just after Christmas.”

    Supervalu, which already has decided to close five unprofitable Acme stores, is dealing with “high corporate debt obligations and declining sales” that have hurt its cash flow, the Inquirer notes.

    Supervalu spokesman Steve Sylven issued the following statement: “We continue to operate in a competitive and challenging economic environment and need to make the very difficult decisions we believe are necessary to meet our ever changing business needs to reposition the company for the future. The voluntary severance program is an important part of that strategy, and we are disappointed that it appears that UFCW Local 1776 will walk away from the fair and generous plan that all of our other locals agreed was in the best interests of their members.”

    According to the story, “Unionized clerks and officials in Southeastern Pennsylvania said they worried that the buyout - affecting mostly veterans - would jeopardize Local 1776's pension and health and welfare funds. Those funds also serve unionized Super Fresh and Pathmark employees, whose parent company, A&P, recently declared bankruptcy under the burden of debt and low sales.

    “Because the buyout offer - lump-sum payments and some health coverage for those eligible - would go mostly to higher-earning members, it would spur a flood of early pension withdrawals and retiree health-benefit outlays.”
    KC's View:
    I honestly cannot comment on the specifics of this proposal, because I’m not familiar enough with all the various contractual and historical issues involved. However, in a general sense, I would only say that it seems to me that in tough times, unionized employees have to be willing to share the pain so that companies can survive ... just as in good times, management needs to be willing to share the wealth. Companies and unions end up at loggerheads when they don’t realize that they are all in it together...

    Published on: January 21, 2011

    KVAL News reports that a new bill before the Oregon State Senate would ban all retailers from distributing single-use plastic bags, as well as paper bags made of less than 40 percent recycled materials. 

    If it passes and is signed by the governor, Oregon could become the first state in the union to pass a statewide ban.

    According to the story, “The ban would also allow the Oregon Department of Environmental Quality to slap retailers with fines who are caught distributing plastic bags; prohibit local governments from imposing charges on checkout bags; and repeal the current statute that requires retail establishments that offer plastic bags to also offer paper.”

    A similar bill failed to pass the Senate last year, but this one is seen as being more likely to pass because it is a more equitable approach to a ban.
    KC's View:

    Published on: January 21, 2011

    The San Francisco Chronicle reports on a sign of an economic recovery: “Total U.S. wine sales rose 4.1 percent to $9.32 billion for the 52 weeks that ended Dec. 11, according to the most recent data from Nielsen Co. The fastest-growing segment was wine priced at $20 and up, with sales gaining 11 percent. Wines under $3 declined 0.6 percent.”

    The general feeling seems to be that this trend will continue, especially because “some of the biggest buyers of fine wine are the ‘millennial’ generation, consumers in their 20s and 30s who make up the biggest age cohort since the Baby Boomers. They're drinking more wine than previous generations and aren't afraid to pay for quality.” Manufacturers, according to the story, are starting to be more aggressive about using technological marketing options such as Facebook and YouTube to gain access to these shoppers.
    KC's View:
    One of the opportunities posed by an improving economy is for retailers who can sell wine to develop wine clubs that can introduce interested customers to new products and get them to raise the price point they find acceptable.

    Published on: January 21, 2011

    How come they don’t have drug stores like this in my neck of the woods?

    The New York Times had a story the other day about a Brooklyn Duane Reade store that “has Fire Island Lighthouse Ale and eight other beers on tap, with growlers — refillable glass bottles — lining the walls. Uniformed clerks-cum-beer-experts fill the growlers and conduct tastings only — sorry, no pints served. Behind a bar, a large walk-in refrigerator stocks common national brands as well as local, craft and imported beers.”

    According to the story, “The Williamsburg beer bar is part of a larger effort by Duane Reade to recognize — and capitalize — on the fierce identity and local needs of many New York City neighborhoods.

    “In some residential areas of Midtown East in Manhattan, for example, the stores sell cut flowers and, over the holidays, they sold fresh-baked pies. In the Bronx, Duane Reade carries more items from Goya, a brand of Hispanic foods, than it does in other areas, and has 40-foot-wide sections of African-American hair products in Harlem and the Bronx.”
    KC's View:
    This is very smart, very aggressive, and very reflective of just how competitive things are going to get in the food retailing business. Things have been tight, things have been tough ... but I’m guessing that you ain’t seen nothing yet...

    Published on: January 21, 2011

    • The Grocery Manufacturers Association (GMA) announced that it has created an Industry Affairs and Collaboration Division, following a restructuring process aimed at enhancing member services and organizational efficiencies.  The new division takes the place of three former GMA departments: Industry Affairs, Membership Services and Meetings, with the staff of each group assigned to new roles under the Industry Affairs and Collaboration banner.

    According to the announcement, “The Industry Affairs and Collaboration Division will continue to support GMA’s strategic areas of focus on product safety, health and nutrition, environmental sustainability, and global commerce, with a special emphasis on facilitating industry collaboration and efficiency on these and other matters.  The group will also work cross-functionally to identify and execute opportunities for business development and to provide first-rate service to the GMA membership.”

    • The Los Angeles Times reports that the “Wendy's/Arby's Group Inc. is considering selling its struggling Arby's business and concentrating more on its expansive Wendy's hamburger chain ... The Atlanta restaurant operator has experienced softness at both its Wendy's and Arby's locations, but Arby's has long been suffering because its sandwiches can cost $5 or more, more expensive than many other fast-food offerings.”

    Arby’s started offering lower-priced options late last year, but apparently that move wasn’t successful enough fast enough to satisfy the parent company.
    KC's View:

    Published on: January 21, 2011

    • announced that it is buying the 58 percent of LOVEFiLM International, a DVD and game rental and download service that operates in UK, Germany, Sweden and Denmark. Terms of the deal were not disclosed. The deal is seen as one way for Amazon to improve its competitive position against Netflix.
    KC's View:

    Published on: January 21, 2011

    We continue to get email about people with tattoos, the stores that employ them, and the generational issues that they force us to face...

    One MNB user wrote:

    The issue of tattoos should be governed by the positioning of the store, and the target clientele.  To a certain segment, they can be seen as cool and indicators of being with a trend -- positive characteristics that attract customers.  It's like playing head-banging music -- some customers will love it; others not.

    That said, tattoos should also be seen as possibly off-putting by other segments.  Clientele "of a certain age" from Japan and Korea associate tattoos with yakuza, or criminal gangs.  If you've traveled in those countries, you'll know that visible tattoos will bar you from many Japanese baths, hotel pools and fitness rooms, etc., because they disturb the harmony of the guests.

    Personally, I dislike tattoos.  It's like being stuck with the same handbag for 17 years.

    Another MNB user chimed in:

    Your piece on changing attitudes toward tattoos got me thinking about food trucks.  Not the kind that deliver merchandise to our stores, but the kind  that drive to a popular event and sell hot food.  Very recently food trucks were considered ‘roach coaches’ and something to be patronized only if you were a construction worker or on the verge of starvation.  Now, people go out of their way to visit what is now a new generation of gourmet traveling restaurants. 

    There was even a ‘reality’ TV show on the food network that chronicled competitions between food trucks, all of which sold very high end and unique offerings.  It just goes to show that looking at something that has been around forever through a new lens can reveal opportunities that others have ignored.

    And another MNB user wrote:

    Hey, my Jewish, white, 25 year old boy is three for three when it comes to tattoos, body piercings and dreadlocks. Yet he is one of the most considerate, hard-working (most of the time ---he is, after all, 25) and trustworthy workers at his retail (merchandising) job. He’s always said to me “as long as someone treats me with respect, that’s absolutely the way I would treat them”.  I guess what I’m trying to say (and what almost every parent knows) is  try getting past what they look like and get to know “who they are” because their generation will be running the world in the not-too-distant-future.

    You sound like a great dad. I hope he appreciates you.

    Another MNB user had some thoughts about the new Walmart healthy eating initiative:

    So let me get this straight.  Walmart sells goods made in China which strengthens China’s economy but does little to improve ours.  This in turn will help China achieve their ultimate goal of surpassing the United States as the world's dominant super-power.  Walmart now wants to make Americans healthier with their "healthy eating initiative."  If it works (which I doubt) there will be more healthy Americans available for the draft when we have to fight a war against China.  Does that sound about right?

    It certainly sounds cynical...
    KC's View:

    Published on: January 21, 2011

    I’ve been fascinated by all the discussion about the “Tiger Mother,” Amy Chua, who has stimulated a lot of debate about American parenting by talking about the rigorous standards to which she held her daughters. She didn’t let them watch TV, play video games or go on play dates. She demanded nothing less than perfection when it came to things like academics or playing the piano.

    While I think the Yale professor’s approach to parenting seems a little extreme for my tastes, I think she makes a legitimate point about our national tendency to give trophies just for showing up, and for not demanding the best of our kids. We often demand the best for our kids, but that isn’t the same thing; they grow up feeling entitled and exceptional, but they haven;t really done anything to earn it.

    This sort of ties into my general feeling about the phrase “American exceptionalism,” which gets tossed around by politicians like it is some sort of divine birthright. It isn’t. Not in my view. America provide the opportunity to be exceptional, but it is only an opportunity. We have to be exceptional every day, prove ourselves every day.

    The other reason that the Tiger Mother has generated such strong feelings, I think, is an abiding fear that there may be about a billion Chinese children out there who have been held to the same high standards, who understand that they need to be relentless about achievement. As a society, we are rightly insecure about our place in the world, and Chua has smacked us upside the head with our own insecurities.

    However, in his New York Times column this week, I thought that without being defensive, David Brooks caught a different side of the issue, noting that while Chua pushed her daughters about individual achievement, she actually may have been too soft in terms of demanding that her kids learn to play well with others - a talent that is extremely important when it comes to things like creativity.

    Brooks writes, “Researchers at the Massachusetts Institute of Technology and Carnegie Mellon have found that groups have a high collective intelligence when members of a group are good at reading each others’ emotions - when they take turns speaking, when the inputs from each member are managed fluidly, when they detect each others’ inclinations and strengths.

    “Participating in a well-functioning group is really hard. It requires the ability to trust people outside your kinship circle, read intonations and moods, understand how the psychological pieces each person brings to the room can and cannot fit together.

    “This skill set is not taught formally, but it is imparted through arduous experiences. These are exactly the kinds of difficult experiences Chua shelters her children from by making them rush home to hit the homework table.

    “Chua would do better to see the classroom as a cognitive break from the truly arduous tests of childhood. Where do they learn how to manage people? Where do they learn to construct and manipulate metaphors? Where do they learn to perceive details of a scene the way a hunter reads a landscape? Where do they learn how to detect their own shortcomings? Where do they learn how to put themselves in others’ minds and anticipate others’ reactions?

    “These and a million other skills are imparted by the informal maturity process and are not developed if formal learning monopolizes a child’s time ... I wish she recognized that in some important ways the school cafeteria is more intellectually demanding than the library.”

    Somehow I missed this story when it first came out late last year, but I was amused this week to read about the fact that Swiss bank UBS is revising its 44-page dress code, and may reconsider suggestions that female employees wear flesh-colored underwear, as well as recommendations about how to trim your toenails, apply makeup, and how often men should get haircuts (monthly).

    Men who deal with clients will still be required to wear dark suits, black shoes, white shirts and red ties, but the company says that it will eliminate some of the recommendations that some folks found onerous, and others found amusing.

    Funny, isn’t it? Talk about cultural divides as great as those between Chinese and American mothers. In Switzerland, companies are telling employees what underwear they should have on; in America, at least here on MNB, we’ve been talking about tattoos and piercings.

    Black Swan is a truly disturbing movie, far more so that I expected, but I also have to admit that I was riveted by it, and especially by Natalie Portman’s amazing performance as a ballet dancer veering dangerously between reality and paranoia. Watching the movie can be an exhausting experience, because director Darren Aronofsky ratchets up the tension from almost the first minute of the movie and never lets it lag, showing an almost Hitchcock-like virtuosity. There also are some scary and strong supporting performances from Barbara Hershey and Winona Ryder, and the general theme of obsession - of losing connections with reality because you forget about context - is fascinating. There’s even a business lesson hidden here, about the importance of never being so single-minded about one’s job and life that you ignore the greater realities. Just a terrific movie.

    Finally, thanks to all of you who wrote in about my video commentary yesterday. FYI...we’re looking into why a few of you experienced a video in which the sound did not synch with the picture. And I’m taking all your comments to heart as we move forward...

    That’s it for this week. Have a great weekend.

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