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 31, 2011

    by Kevin Coupe

    The events in Egypt over the past week have received much coverage and will continue to, as the likelihood seems to be that things will not be resolved there quickly. But it is worth noting, for the greater lesson, the role that the internet - and most specifically, social media - is playing there.

    Read the following paragraphs from yesterday’s New York Times:

    “Fear is the dictator’s traditional tool for keeping the people in check. But by cutting off Egypt’s Internet and wireless service late last week in the face of huge street protests, President Hosni Mubarak betrayed his own fear — that Facebook, Twitter, laptops and smartphones could empower his opponents, expose his weakness to the world and topple his regime.

    “There was reason for Mr. Mubarak to be shaken. By many accounts, the new arsenal of social networking helped accelerate Tunisia’s revolution, driving the country’s ruler of 23 years, Zine el-Abidine Ben Ali, into ignominious exile and igniting a conflagration that has spread across the Arab world at breathtaking speed. It was an apt symbol that a dissident blogger with thousands of followers on Twitter, Slim Amamou, was catapulted in a matter of days from the interrogation chambers of Mr. Ben Ali’s regime to a new government post as minister for youth and sports. It was a marker of the uncertainty in Tunis that he had stepped down from the government by Thursday.

    “Tunisia’s uprising offers the latest encouragement for a comforting notion: that the same Web tools that so many Americans use to keep up with college pals and post passing thoughts have a more noble role as well, as a scourge of despotism. It was just 18 months ago, after all, that the same technologies were hailed as a factor in Iran’s Green Revolution, the stirring street protests that followed the disputed presidential election.”

    If social networking can have such a profound affect on on people are governed, it does not seem like a big stretch to think that it also will affect how people shop ... the kind of transparency and responsiveness that they will demand and expect ... and how effective retailers will connect with their shoppers.

    Of course, how people buy is a small thing compared to the greater issues we see spotlighted in the Middle East these days. But when we think about the how the world is changing ... and the factors that can affect our lives and businesses ... it is worth seeing what is happening in Egypt through a different prism.

    And that’s our Eye-Opener for this morning.
    KC's View:

    Published on: January 31, 2011

    Reuters had an interesting story the other day about how Procter & Gamble CEO Bob McDonald isn’t over the moon about the company’s movie partnership with Walmart, which has the two companies promoting family-friendly programming.

    According to the story, “the duo airs TV movies and collaborates on advertising and displays in Wal-Mart's U.S. stores.” But McDonald says that execution "has not been as good as we would like,” in part because ratings for the movies have been steadily declining.

    In addition, McDonald complained that “there have not been as many P&G items in Wal-Mart's circulars or as many displays in stores around the times that the movies air as there should be,” Reuters writes.

    Four movies have been produced and aired so far. A fifth is scheduled to be broadcast on Fox this April.

    The story also notes that Walmart has represented 16 percent of total P&G sales; just last year, that meant $12.6 billion of P&G’s sales were to Walmart; “McDonald stressed that P&G does not have problems with its products or prices in Wal-Mart's U.S. discount stores.”
    KC's View:
    Beyond the in-store execution issues, both Walmart and P&G may have to consider that with few exceptions, the whole notion of a “movie of the week” on broadcast television is somewhat antiquated.

    Published on: January 31, 2011

    The Buffalo News reports that Tops Markets has “ended its experiment with the hand-held devices customers use to scan their groceries as they shop. The supermarket chain offered the gadgets in five stores on a trial basis, but most customers didn't warm up to the system called EasyShop ... However, Tops stores continue to use the self-checkout lanes that carry a similar name, EasyScan.”

    "We just didn't have the participation in the technology that we thought we would," Katie McKenna, a Tops spokeswoman, tells the paper. The story adds, “McKenna said the chain didn't encounter problems with theft -- instead, the system suffered from lackluster interest. Less than 2 percent of customers in the participating stores used it, she said.”
    KC's View:
    It doesn’t mean that hand-held, in-aisle scanning won’t work, or does not have a future. It just means it did not catch on in these stores at this time. It is important to pay attention to these results, but not to draw too many conclusions from them.

    Published on: January 31, 2011

    The Los Angeles Times reports that Sara Lee Corp. will divide itself into two public companies, “one focusing on its North American food businesses and the other on European coffee, tea and bread.

    “In a call with investors, Marcel Smits, the company's newly appointed chief executive, acknowledged that Sara Lee had received ‘unsolicited interest’ from potential buyers. Instead of selling, the company's board determined that splitting Sara Lee was in shareholders' best interests ... The decision caps months of speculation about the dissolution of Sara Lee, which once sold pantyhose, bug spray and undershirts as well as coffee, sausages and cheesecake. In recent months, the company has completed a handful of sales that leave it focused on North American packaged meat and European coffee.
    KC's View:

    Published on: January 31, 2011

    Duncan Mac Naughton, the former Supervalu executive who has been in charge of consumables, health and wellness, and since last October, now has been named Walmart’s chief merchandising officer, replacing John Fleming, who left the company last August.

    The Wall Street Journal writes that Mac Naughton will report to Bill Simon, the company’s head of US operations, “under whom Wal-Mart is rejiggering its merchandise approach as it tries to break a string of six straight declines in U.S. same-store sales, or sales at stores open at least a year ... Wal-Mart has been going back to the ‘Everyday Low Price’ approach that founder Sam Walton built the company on and is pulling back on an abundance of ‘rollbacks,’ or deep discounts, that it was placing on single products throughout stores. Wal-Mart is also returning pallets full of merchandise to main aisles, which it calls ‘action alleys.’ Wal-Mart miscalculated that customers would take to the decluttering efforts, and the stepped-up rollbacks didn't produce commensurate sales.”

    Mac Naughton originally came to Walmart in 2009 as chief merchandising officer for its Canadian operations.
    KC's View:

    Published on: January 31, 2011

    The Associated Press reports that Taco Bell is using both old media (newspapers) and new media (YouTube) to defend itself from publicity surrounding a lawsuit charging that the stuff its sells as beef doesn’t have enough meat in it to qualify as such.

    Taco Bell maintains that its taco filling is 88 percent beef, with the rest being spices and common additives; the lawsuit says it is just 35 percent beef.

    According to the story, “Taco Bell denied those claims earlier this week but turned up the volume after a week in which the story spread like wildfire, making national headlines, creating an internet stir and even prompting a bit by comedian Stephen Colbert.

    “Experts say similar cases show the tempest in a tortilla is unlikely to hurt Taco Bell's business, but the aggressive counter-attack is drawing some attention,” in part because it is fairly unusual for companies to defend themselves so aggressively in the court of public opinion as well as in the legal system.
    KC's View:
    I actually have no problem with companies being aggressive in defending themselves by using the same techniques as their accusers ... especially if they have the facts on their side.

    What I don’t know in this case is whether Taco Bell is right or wrong in its protestations. It’ll be interesting to see what happens down the road; one has to believe that numerous news organizations have commissioned their own tests of Taco Bell’s beef, and those results will become very public very quickly.

    To repeat what I said last week, there is one thing I do know - that Taco Bell is giving a bad name to barely mediocre food.

    Published on: January 31, 2011

    The Akron Beacon Journal reports that Giant Eagle “plans to use an automated system called ‘behavioral cluster planning’ starting later this year,” which is designed to help it “make better choices about which products to stock ... The computerized system uses local demographics, customer data, sales patterns and store sizes and locations to quickly determine which products to stock, how much to order, how to price them and where to place them in the stores.”

    ''It's all about being customer-centric,” Stephanie White, a vice president at Giant Eagle, tells the paper, noting that the company that ''services their customers best by having the products they want, when they want, at the best price, has the best opportunity to get those customers to shop with them.''
    KC's View:

    Published on: January 31, 2011

    Bloomberg reports that Starbucks has won round one in its battle with Kraft, as a US District Court judged ruled that it could not be stopped from ending its distribution agreement with Kraft.

    Starbucks has accused Kraft of dropping the ball in its distribution of Starbucks products to grocery stores and other retailers; Kraft has denied the charges. While Starbucks reportedly offered $750 million to resolve the dispute and end their relationship, Kraft is said to be holding out for a bigger payday and hoping that the courts would prevent the coffee giant from ending their deal before some sort of mutually agreeable resolution could be reached.

    Kraft said it would appeal the ruling.

    Starbucks has said it plans to expand and strengthen its distribution to retailers on its own.
    KC's View:

    Published on: January 31, 2011

    The New York Times reports on how Home Depot is looking to attract women shoppers through its use of Martha Stewart-branded merchandise that it feels will reduce the company’s intimidation factor.

    According to the story, “Home Depot is recognizing that while women may be half of its customers, it has not catered to them in ways that translate into a larger market share. Without a housing recovery to revive sales of big items or major renovation supplies, Home Depot and its competitors are promoting smaller projects this spring, during what is the major selling season for home improvement stores. And that means sprucing up departments to get female customers excited about window treatments or new colors for makeovers of existing spaces.”

    The Times also note3s that “this is not the first time that Home Depot has tried to figure out what women want. It has been running Do-It-Herself workshops for female customers since 2003. In the early 1990s, it opened Expo Design Centers, showrooms with fresh flowers and other feminine touches. (It closed those centers in 2009.) The Martha Stewart products are aimed at getting women who are already visiting the stores to buy more.”
    KC's View:

    Published on: January 31, 2011

    • Ralphs Grocery Co. has won an appeals court case aimed at preventing union groups from picketing on the company’s private property at its Fresno, California store. According to a statement by the company’s attorneys, Morrison & Foerster, “In a published opinion, a three judge panel of California’s Fifth Appellate District reversed a Fresno Superior Court’s order denying Ralphs’ motion for a preliminary injunction and remanded for further proceedings.

    “The case, Ralphs Grocery Company v. United Food and Commercial  Workers Union Local 8, stems from attempts beginning in January 2008 by the grocery company to implement rules restricting the time, place, and manner of ‘expressive activities’ outside its non-union Foods Co. warehouse store—rules that were ignored by union picketers. 

    “Ralphs’ lawsuit challenged the constitutionality of California’s 1975 Moscone Act, which deprives state courts of jurisdiction to issue injunctions against ‘peaceful picketing or patrolling involving any labor dispute,’ and Labor Code section 1131.8, which independently imposes severe restrictions on a property owner’s right to obtain injunctive relief against unions.”
    • The National Cooperative Grocers Association (NCGA) has expressed disappointment with the US Department of Agriculture (USDA) decision to completely deregulate Monsanto’s Roundup Ready genetically engineered (GE) alfalfa.

    “We appreciate that the USDA considered various options for the future of GE alfalfa, and had hoped that the voices of the hundreds of thousands of consumers who commented on the Draft Environmental Impact Statement [EIS] would result in a different outcome,” said Robynn Shrader, CEO at NCGA. “Like many, we are extremely disappointed with yesterday's announcement and will continue to champion for better protections for organic farmers and consumers, by all means afforded to us.”
    KC's View:

    Published on: January 31, 2011

    • John Barry, the winner of five Academy Awards who provided the music scores for 11 James Bond films, as well as movies that included Born Free, Midnight Cowboy, Out of Africa, The Lion in Winter, Dances With Wolves, Body Heat, and one of the Content Guy’s personal favorites, the under-appreciated Robin and Marian, has passed away at age 77 after suffering a heart attack.

    While often credited with penning the James Bond theme, Barry in fact only arranged it - the theme itself was written by Monty Norman.

    • David Frye, who came to fame in the late sixties and early seventies with his impressions of Lyndon B. Johnson, Hubert Humphrey, and, perhaps most devastatingly, Richard M. Nixon, has died of cardiopulmonary arrest. He was 77.
    KC's View:

    Published on: January 31, 2011

    We had an Eye-Opener on Friday about how “California's ‘big one’ may not be an earthquake at all, but a devastating megastorm that would inundate the Central Valley, trigger widespread landslides and cause flood damage to 1 in 4 homes in the state.” This was described as a “300 year storm,” which I thought meant it was likely to happen once every 300 years.

    But MNB user Ron Margulis wrote:

    Just a quick clarification from someone who sits on the Union County (NJ) Flood Control Board — the definition of a 300 year storm isn’t that it happens once every 300 years, but that each year there is a 1 in 300 chance of it happening. I’m sure you’ll understand that’s a significant difference.

    Another MNB user, from Australia, wrote:

    I'm positive that the megastorm has been considered for another reason - the devastating floods just experienced by south-east Queensland, and currently being experienced by country Victoria.

    The lesson learnt from those floods is that they are not "100 Year floods", rather "floods with a 1% chance of occurring in a given year".  That would mean that the Californian megastorm is a 0.33% chance of occurring in a given year.  Changes your perspective, doesn't it?

    Another MNB user chimed in:

    According you this morning’s Eye Opener, “It is well known that Californians live in fear of earthquakes - especially “the big one” that could end up giving Nevada and Arizona residents beachfront property.”

    Well known according to whom?  As a long term Californian, I can tell you that anyone who fears earthquakes should not live here.  When it comes to earthquakes, we know that they are inevitable.  We respect them, we try to understand them, and we prepare for them, but we do not fear them.  Like any potential dangers in life or business, knowledge is power.  The more you know, the better prepared you can be to ride them out—and you may even enjoy the ride.

    And, from another MNB user:

    Haven't we learned to stop listening to these climatologists and their pseudo-science?  The UK was not supposed to get another snow storm again -- and they were caught unawares. 

    Should they have turned their plows into air conditioners, they would have been far worse off then they were!

    Regarding the changes being made at the Girl Scouts - reducing the cookie flavors they sell and, in some cases, hiring consultant to train the kids on sales techniques - one MNB user wrote:

    And they have an app to sell those cookies!  Do they now have a social media merit badge?  Very cool!

    I didn’t see that about the app...

    As for a social media merit badge, though, I cannot imagine that adults would be able to teach the kids much about this subject.

    And another MNB user wrote:

    I hope the parents of the scouts are taking the seminar as well, since in reality they are the ones who sell the cookies to their captive co-workers!  My young cousin 'sells' the cookies (actually her tireless mother hawks them via email) with an added fillip..if she sells enough, she gets to go on a trip.

    Am I the only one who thinks that Girl Scout Cookies are way, way over-rated? Just asking...

    Regarding the “provocative” Us Weekly magazine cover that one supermarket manager covered up because of customer complaints, only to have the move get spotlighted on the internet, one MNB user wrote:

    Well I couldn’t find the Elton John picture in question but  looked at the US website and unless I am missing something (were Elton & his partner naked or what?) there were a lot of “provocative” pictures out there…like the “Fur? I’d rather be naked” ad, or the new celebrity mother holding her baby against a pretty bare chest.  Might just be people freaking over gay couples having a “family”?

    There are so many more important things to worry about and ponder.

    I wrote on Friday about the Challenger explosion of 25 years ago as a “loss of innocence” moment, prompting one MNB user to write:

    There have been far too many “loss of innocence” moments for our generation.  As a kid I remember the nuns lining us on the street to wave to a young JFK who was running for president only to be dismissed early from school a few years later to be home with our parents that fateful Thursday afternoon in November in Dallas.  Add the assassinations of Doctor King and Bobby to the list, along with Kent State, Watergate, and Nixon’s resignation.  The Challenger explosion and 9/11 may have been last few events where time stopped.

    For all its good, the Internet has accelerated time and made everything a short term event.  Where is the time to pause, to think, and develop a perspective.  I understand the loss of innocence, I just think it happens too soon and too frequently in life.

    KC's View:

    Published on: January 31, 2011

    Novak Djokovic of Serbia won the Australian Open Mens Singles Championship, losing just one set in seven matches.
    KC's View:
    It may be a mark of how little impression professional tennis is making these days that this is actually Djokovic’s second Australian Open championship ... and he has not broken through to gain any sort of mainstream recognition. Or maybe I’m just not paying enough attention.