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: February 3, 2011


    by Kevin Coupe

    Content Guy’s Note: You seemed to like it last week, so let’s try it again. Below is a commentary on the same subject as the video piece, but it isn’t word-for-word the same. You can look at both, or either...it is up to you. I look forward to hearing from you.

    About a week ago, Mrs. Content Guy and I went out to dinner. We went to a local place where she likes the lobster sliders and I like the beer. It was still reasonably early when we got there and we had our choice of tables, so I steered us into the bar. I like high bar tables, and Mrs. Content Guy likes me, so she went along with me.

    About halfway through the meal, though, the bar started filling up, there were people all around our table, it was quite noisy, and Mrs. Content Guy suggested that maybe next time we could go sit in the dining room section, where things tend to be quieter.

    We’ve had this discussion before, and it is one of those things about which we disagree. She likes quieter restaurants and a more peaceful dining experience, and I tend to like a bit of hubbub, a bit of noise.

    Thinking about it, I realize that the reason for this likely is that I generally work by myself - I’m a writer, and that’s what I do. (Okay, I sometimes talk to Sansolo several times a day. But that’s by phone. Usually, it is just me and my laptop.) Mrs. Content Guy, on the other hand, is a third grade teacher - she’s surrounded by rug rats all day, and it is no wonder she likes a bit of quiet when the day is done.

    It seems to me that this is an opportunity. I’ve read that more than 20 million people work from home at least one day a week, and the recession has meant that more people than ever do not go to an office or place of business each day. That means that a lot of people are missing the community of work, and that is something that retailers of various types - supermarkets, c-stores, restaurants, even barber shops - are uniquely positioned to provide. If they put their minds to it.

    Think about it. Are there ways that your business can offer a sense of community - an ability to connect - to people who need it more than ever? I’m not talking “singles nights,” which was popular a few years ago, but something less trendy, more enduring, and potentially more significant to the people for whom it is designed.

    That’s what is on my mind this morning.

    As always, I want to know what is on yours.
    KC's View:

    Published on: February 3, 2011

    by Kevin Coupe

    I’m not sure if this falls into the “intelligent loss of business” category, but it certainly came as a surprise the other day when I read that Marriott won’t have adult movie channels in any new hotel rooms it builds during the next few years.

    The story in the Chicago Sun Times notes that “the decision to go porn-free comes after years of discussing whether the availability of lucrative adult films in guest rooms is appropriate and whether safeguards exist to prevent children from seeing it. Marriott, though, links the move to a pending shift to new in-room entertainment technology for its new hotels. Traditional video systems - which included access to adult content displayed in the menu selection - will be replaced by Internet-based video-on-demand systems.”

    It also reflects the broader technological change that has affected hotels’ revenue streams. It used to be that hotels made a fortune when people made phone calls from their hotel rooms, but the advent of cell phones means that this money generator has pretty much gone away. (Tell the truth. When was the last time you used the hotel room phone to make a call outside the actual hotel?) And now, the fact that most people bring laptops with them into their hotel rooms means that they don’t need to use the in-room TV to be entertained. (Tell the truth. When was the last time you used the hotel room TV to watch.... Never mind.)

    Sometimes you have to walk away from a traditionally lucrative part of the business...simply because the world has changed, and every day requires a fresh, unjaundiced look at what works and what doesn’t, what makes money and what doesn’t.

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

    Published on: February 3, 2011

    Rupert Murdoch’s new newspaper, created specifically for the iPad and soon to be available on other tablet computers, was unveiled yesterday, and the Los Angeles Times describes it as a “bold bet that consumers are willing to pay for news and information via the Internet that they have long expected to get for free.”

    The Daily represents a $30 million investment, features 120 staffers, and reflects Murdoch’s belief that newspapers have dug themselves an early grave by offering free content over the internet, supported only by advertising. Following a brief period during which The Daily will be available for free as a way of enticing customers, it will then carry a subscription cost of 99 cents a week or $40 a year.

    According to the LA Times, The Daily is “expected to employ Murdoch's proven brand of cheekiness in writing and story presentation, said a person who has worked on the Daily and who requested anonymity because he is not authorized to speak about it publicly. Certain features bow to the new distribution platform, such as a review section for games and iPad applications, the person said.

    “Indeed, the Daily is drawing upon two news media - print and television - at which Murdoch has long been adept, and forming a hybrid designed for the iPad. The app will experiment with new forms of visual storytelling that take advantage of the iPad's color screen and tactile interface. One design feature will be a 360-degree photograph that readers can rotate and examine as they might a shell on the beach, the person said.”
    KC's View:
    This will be a niche product for a while, but it seems inevitable that this is part of the broader shift that will redefine the newspaper business. In our panel discussion about “Tough Decisions” at the annual Food Marketing Institute (FMI) Midwinter Executive Conference, Laura Hollingsworth, president and publisher of the Des Moines Register, told the audience that while newspapers are widely believed to be dying, the truth is that only the “paper” part seems to be endangered, and that her company is endeavoring to reinvent itself as a content provider that cuts across all media, able to provide it to consumers via iPads or other new technologies.

    That’s precisely what The Daily is doing. Now, to be honest, I’ve downloaded The Daily onto my iPad and have played with it a bit, and I’m not entirely thrilled. I much prefer the iPad app created by the , which is far more intuitive and easy to navigate; I tried for 15 minutes to find Business News on The Daily and could not ... but that may say more about me than it.

    The big question for retailers is how they are going to adapt to this inevitable, evolutionary shift. If you advertise in newspapers, if you count on stacks of FSIs to drive traffic and sales, you may be in for as rude shock. Maybe not today, maybe not tomorrow, but soon....

    Published on: February 3, 2011

    Mark Bittman, for years a food writer at the New York Times, has inaugurated his new op-ed column at the Times, and did so with a challenge to the US food industry, noting that despite all the advantages of the US food distribution system, “we’ve come to recognize that our diet is unhealthful and unsafe. Many food production workers labor in difficult, even deplorable, conditions, and animals are produced as if they were widgets. It would be hard to devise a more wasteful, damaging, unsustainable system.”

    Among the suggestions that Bittman makes in his column:

    • “End government subsidies to processed food. We grow more corn for livestock and cars than for humans, and it’s subsidized by more than $3 billion annually; most of it is processed beyond recognition. The story is similar for other crops, including soy: 98 percent of soybean meal becomes livestock feed, while most soybean oil is used in processed foods. Meanwhile, the marketers of the junk food made from these crops receive tax write-offs for the costs of promoting their wares. Total agricultural subsidies in 2009 were around $16 billion, which would pay for a great many of the ideas that follow.”

    • “Begin subsidies to those who produce and sell actual food for direct consumption. Small farmers and their employees need to make living wages. Markets — from super- to farmers’ — should be supported when they open in so-called food deserts and when they focus on real food rather than junk food. And, of course, we should immediately increase subsidies for school lunches so we can feed our youth more real food.”

    • “Break up the U.S. Department of Agriculture and empower the Food and Drug Administration. Currently, the U.S.D.A. counts among its missions both expanding markets for agricultural products (like corn and soy!) and providing nutrition education. These goals are at odds with each other; you can’t sell garbage while telling people not to eat it, and we need an agency devoted to encouraging sane eating. Meanwhile, the F.D.A. must be given expanded powers to ensure the safety of our food supply. (Food-related deaths are far more common than those resulting from terrorism, yet the F.D.A.’s budget is about one-fifteenth that of Homeland Security.)”

    • “Encourage and subsidize home cooking. (Someday soon, I’ll write about my idea for a new Civilian Cooking Corps.) When people cook their own food, they make better choices. When families eat together, they’re more stable. We should provide food education for children (a new form of home ec, anyone?), cooking classes for anyone who wants them and even cooking assistance for those unable to cook for themselves.”

    • “Tax the marketing and sale of unhealthful foods. Another budget booster. This isn’t nanny-state paternalism but an accepted role of government: public health. If you support seat-belt, tobacco and alcohol laws, sewer systems and traffic lights, you should support legislation curbing the relentless marketing of soda and other foods that are hazardous to our health — including the sacred cheeseburger and fries.”
    KC's View:
    People can agree or disagree with some or all of what Bittman writes, but I think it is fair to say that he will be an influential voice in the food debate, with a powerful platform. And do, it is worth paying attention to what he writes, because he will be perceived as a thought leader.

    Supermarkets should certainly appreciate his passion for cooking - it falls directly in line with their mission.

    In a follow-up posting on his Times blog, Bittman writes:

    “My mission here, as I see it, has several aspects: Try to figure out just why things move in the wrong direction; look for examples of positive societal change; and suggest ways in which individuals can make a difference, not only in our own lives but in the bigger picture.

    “I have a friend whose slogan is “cooking solves everything.” I don’t think it does, but the point is a valuable one: if you cook, you think about what goes into your mouth; you shop more carefully; you begin to think about where the food you’re shopping for came from, and how it was produced; you begin to think about what you’re throwing out, and how you might use it instead of waste it; and so on.

    “But there are powerful forces at work to make sure that we – not only Americans, but citizens of the world – spend as much money as possible on stuff that is barely nutritious and barely recognizable as food. The work here is to counter those forces, to encourage the relatively tiny but all-important trend moved along by those people who want to see real food, produced by agriculture that honors its laborers, its animals, its land, and its consumers, and brings us toward a place – the future – where food nourishes rather than harms.”

    Published on: February 3, 2011

    Crain’s New York Business reports that Walmart has struck a deal with the organized labor, in the form of the Building and Construction Trades Council of Greater New York, that “guarantees union workers will construct or renovate any stores that the retailer opens in the city during the next five years.”

    The deal is only in principle at the moment, since Walmart has not been given the green light to build any stores in New York. But it is similar to a pact it made in Chicago that helped open the city’s doors to its expansion there. It also undercuts to some extent the antipathy that organized labor usually feels toward Walmart, which operates non-union stores in the US.

    • In California, KPBS reports that State Sen. Juan Vargas (D-San Diego) has introduced legislation designed to require an economic impact study be conducted before any big box store is built in the state - a move seen as a direct effort to slow down Walmart’s expansion efforts there.

    The move comes as the San Diego City Council voted to rescind an ordinance that required precisely the same thing. After it passed the ordinance, Walmart collected enough signatures to force a referendum on the issue; the City Council decided that rather than spend money it did not have on an election, it would simply eliminate the ordinance ... and Walmart quickly announced that it would build as many as a dozen stores there in the next five years.

    Vargas said that he believes that the City Council caved in to pressure.
    KC's View:

    Published on: February 3, 2011

    • The San Francisco Chronicle reports that Safeway is being sued by the Center for Science in the Public Interest (CSPI), which says that the retailer “has a legal duty to its club members to notify them when they've purchased products recalled from its stores.”

    According to the story, “Safeway's response is that it does voluntarily post notification of recalls on its website, sends out press releases and complies with all legal and regulatory requirements. Teena Massingill, director of corporate public affairs, said that oftentimes, club card information about shoppers is out of date and there is no way to contact people after something has been placed on the recall list.

    • Los Angeles-based Unified Grocers has been named the winner of IGA’s 2011 USA President’s Cup, given annually to a distributor that demonstrates “extraordinary effort in support of its IGA retailers and the IGA brand.”

    Forbes reports that Whole Foods has officially launched its “animal welfare rating system to help the grocer's shoppers find out a bit more about where their meat is coming from.

    The system, designed by the nonprofit Global Animal Partnership, provides information and a ranking for beef, pork and chicken based on how farm animals are raised. Under the system, independent, third-party certifiers audit farms and rate animal welfare practices and conditions using a tiered system.”

    • The Associated Press reports that Kroger-owned Ralphs Grocery Co. “has pleaded no contest to overcharging customers for prepackaged and weighed products at stores in Los Angeles.

    “The city attorney's office said the grocery store chain entered pleas Monday, shortly before the case was scheduled to go to trial. The no contest plea was entered for 62 misdemeanor charges, including false advertising, mislabeling and selling items that weigh less than they should.”

    • The Wall Street Journal reports that “Nestlé S.A. has acquired a U.K.-based pharmaceutical start-up testing a chewing gum to help kidney-disease sufferers, the first move in the company's latest effort to build a business selling food products that target diseases.” The company has pledged to invest a half-billion dollars in the building of this business segment.

    Bloomberg reports that General Mills and Nestle have opened a $50 million innovation center in Switzerland that is designed “to create new developments in the nutrition, taste and quality of cereal.” The companies opened the facility as part of their Cereal Partners Worldwide joint venture.

    Wine Spectator reports that “researchers working in biotechnology laboratories in Vienna have found that red wine contains favorable levels of a chemical currently used to treat type 2 diabetes patients. In time, they say, red wine treatments may offer an alternative to current therapies.”
    KC's View:

    Published on: February 3, 2011

    • Supervalu announced yesterday that Leon Bergmann, most recently senior vice president, sales and customer service, northeast, at C&S Wholesale Grocers, is moving over to Supervalu as its new group vice president, Independent Sales, Marketing and Merchandising, reporting to Mark Anderson, president and COO, Independent Business.

    Bergmann is a Six Sigma Black Belt and a former US Navy Aviator.
    KC's View:
    He’s going to need all the Black Belt and aviator skills that he can muster if he’s going to survive at Supervalu, which is described by some people who send me emails as only slightly less chaotic than the streets of Egypt.

    Published on: February 3, 2011

    Reuters has a piece about beers to drink during the Super Bowl, and here’s how it breaks out:

    • Ale is like red wine, and is better with “bigger, more flavorful dishes.”

    • Lager goes better with lighter fare.

    • “Lighter lagers (work well) to quench the fire from hot chicken wings, though the malt in ale has a sweetness that also works well with spicy foods.”

    • “The hoppiness of ... ales really stands up very well with the spice from say bratwurst or chicken wings.”
    KC's View:
    For us, it will be the traditional Super Bowl meal of red beans and rice, with corn bread ... accompanied, at least in my case, by either a Sam Adams Red Ale or maybe a Whale’s Tale Pale Ale from Nantucket’s Cisco Brewery.

    Published on: February 3, 2011

    Responding our story about products with blueberries that aren’t actually blueberries, MNB user Christina Harrison wrote:

    I can’t believe I just read this story.  This actually happened to my family last year.

    My 9-year-old nephew said he wanted blueberry pancakes for breakfast on Saturday morning so my brother-in-law took him to our local Cub Foods.  They bought what they thought was blueberry pancake mix.  As they were eating, my brother-in-law realized they were ingesting something other than real blueberries so they got out the box to look at the ingredients label. Sure enough, they were eating chunks of colored, flavored dextrose.  Then they looked at the front of the package and realized that the word ‘BLUEBERRIES’ was in huge, bold font and that underneath it said something about ‘imitation’ or ‘flavored’.  Needless to say, they were shocked and felt like they had been lied to.

    To be clear, my brother-in-law is no organic-eating, locavore-only, arugula-munching, foodie (that’s me), but he marched right down to Whole Foods.  It’s been a year now and the Whole Foods trips have declined (just so expensive), but he now reads every label carefully and checks the ingredients religiously.  Net, we’ve got at least one person out there who changed his behavior and I’d guess there will be more like him in the future…oh, I won’t name the brand, but he now avoids buying anything produced from that manufacturer.


    Another MNB user wrote:

    Just another example of companies doing what is legal rather than what is right.  Is there any doubt in your mind the companies / brand managers involved know perfectly well they are being deceptive?  No wonder people distrust advertising so much.

    Is saying something is a blueberry when it isn’t actually a blueberry any different from a fast food restaurant saying that something is meat when it really isn’t?

    I think not.




    On another subject, MNB user Paul Gardner sent us the following email:

    Thanks for sharing the story on plastic bottles and recycling challenges.  It presents an interesting dilemma, which reminds me of a similar situation that I've lived through in the printing industry.

    As recycled printing papers became commercially available in the 1980's, printers struggled to figure out how to print well on them, and paper manufacturers struggled to make paper that performed consistently for the printers. Prices were high, and performance was low.  But hey, it was new and cool, and eco-friendly.  

    As marketers gradually began to embrace the recycled paper movement, demand soared.  For years, both printers and paper makers struggled together. But demand was solid, so eventually the paper companies figured out how to produce a consistent product, that met the needs of the printers, and their customers.  Once that happened, prices dropped, and demand soared. Today, most printing papers have some recycled content as standard issue.

    The advent of digital printing threw another wrench into the works.  The toners, it was claimed by the recyclers and the paper makers, would make it impossible to recycle digitally-printed paper.  Even a small amount of toner, they said, could ruin a whole batch of recycled paper.   But digital printing became so popular, so fast - both in homes and offices, and commercially - that the affected industries were forced to make recycling of digitally-printed papers possible, and then practical.  Today it's no longer an issue.

    The current challenge to the recycled paper industry is the Sustainable living movement.  From this perspective, paper that is made 100% from post-consumer waste (PCW) is far preferable to papers with some virgin content, or that include waste paper from manufacturing operations.

    So the industry responded, and has began making more and more 100% PCW papers.  But they've run into a significant constraint - there is a limited supply of clean waste paper available from consumers and businesses. And as a result, only a limited supply of 100% PCW paper can be manufactured.

    Complicating the challenge, there are many papers available with some PCW, that are still 100% recycled, but not 100% PCW.  And several non-wood papers available, some of which are arguably as good for, or better for the environment than 100% PCW papers.   But buyers are not embracing them, at least not on a large scale.   These alternatives - made from stone, bamboo, hemp and oil and more -  just don't have the same environmental credibility.

    Many in the industry see this as an insurmountable issue.

    I see it as yet another turn of the eco-friendly wheel.


    I’m sorry, but you used a word with which I am unfamiliar.

    Paper.

    What, precisely, is paper?



    Reacting to our note that Amazon is now selling more Kindle e-books than hardcovers or paperbacks, MNB user Lee Smith wrote:

    I’m Kindle’s newest fan. Bought one last week. This year I will be doing a lot of international travel and I love to read. I just couldn’t see myself buying and carrying two or three books at a time. Must say I LOVE my new Kindle and it’s saving me lots of cash. Just bought a best seller for $3.99.

    I’m with you.




    Had a piece the other day about how some craft brewers are now putting their product in cans, something that shakes the very foundations of my value system.

    One MNB user from the Pacific Northwest, who noted that he comes from “the home of craft beer,” wrote:

    I’m a man of very few words (most of the time).

    I will never (repeat NEVER) buy my craft beer in a can.


    Gotta have standards.

    I’m with you.

    Another MNB user wrote:

    And those cans of beer are lined with BPA…I thank my ancestors for moving to Oregon in 1844, that they were wise enough to let me live in Beervana Oregon, where I can stop on the way home for a take-home Growler (2 liter glass bottle) of microbrew. Yes, I keep my clean growlers with my canvas bags in the back seat.

    Another reason why the Pacific Northwest is, in my view, nirvana.




    On the subject of change and how to adapt to it, MNB user Andy Casey wrote:

    The real problem isn’t the amount of change but the pace.  Things are changing so often and rapidly that product development and implementation cycles simply can’t keep up.  Companies which cannot significantly shorten the time from concept to deployment may well be doomed to releasing a series of Edsels because the pace of change seems to be accelerating every year.
    KC's View: