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    Published on: February 18, 2011

    by Michael Sansolo

    Today’s eye opener is actually about opening eyes and helping them see better. But in truth it is about building a better mousetrap and serving a consumer need, which makes it the best kind of business story of all.

    The eye opener is a new technology for eyeglasses, but unlike other advances, this one is a quantum leap. It’s beyond photosensitive lenses, lighter lenses or even cooler looking frames. This is about simply seeing better.

    These new glasses, from PixelOptics, change with the occasion. Apparently, wearers of progressive or bi-focal lenses frequently encounter problems when they look through their lenses. For instance, when descending stairs they will be challenged by looking through the reading part of the lens, when they really want vision for a moderate distance.

    USA Today recently explained the high-tech glasses as follows: “Hidden in the frames of the otherwise normal-looking glasses, are a microchip, micro-accelerometer and miniature batteries. Each lens has a transparent LCD layer that can electronically change its molecular structure, changing the focus only as needed. If you tilt your head down say to read a book or peek at an object up close, the accelerometer automatically detects the motion, sending a signal to the LCD that alters how light is refracted, change the prescription quietly and in, well, a blink of the eye. You can also put the glasses in manual mode.”

    In other words, the glasses solve a problem that bedevils a large number of eyeglass wearers by jumping way out of the current paradigm and into a whole new realm. Will they sell and will they change the world of eyeglasses? Only time will tell. But give the manufacturer credit; it is making a leap.

    That’s a real eye opener for today or any day.
    KC's View:

    Published on: February 18, 2011

    Haggen Inc., the Bellingham, Washington-based 30-store supermarket chain that has existed as a family-owned business for almost eight decades, is selling a majority ownership in the company to Comvest, a Florida private equity group. Terms of the deal were not disclosed.

    Jim Donald, the former Starbucks and Pathmark CEO who was brought in to run Haggen in October 2009, will leave the company’s executive offices but will continue to serve as an advisor to the new CEO, Clarence Gabriel, a former PepsiCo and Albertsons executive who also was CEO of the now-defunct Movie Gallery video rental chain.

    "Any supermarket chain our size is always in play," Rick Haggen said during a media conference call on Thursday. "With this investment by Comvest, we're able to remain as an independent supermarket chain with ... probably no change for our customers and very little change for all the people who work in the company."

    Haggen said that Donald planned to leave the company later this year, even if as private equity investor had not been found.

    The Seattle Times reports that “four months after Donald took the helm, most of the chain's stores stopped staying open 24 hours. He also closed three stores, including a Top Food & Drug store in Redmond Town Center that was formerly part of the Larry's Market chain that liquidated several years ago. Top Food had been there just two years.”

    Haggen said that no other management changes are anticipated.
    KC's View:
    I get things wrong plenty of times, so forgive me if I point out what I wrote back in 2009 when Jim Donald took the reins at Haggen...

    I suspect that another possible matter on Jim Donald’s plate will be to get Haggen ready to eventually be sold, but that’s just a guess on my part ... Companies like Haggen (will be) increasingly vulnerable because of competitive pressures; the smart ones will position themselves to get the best possible price through a canny mix of efficiency and effectiveness, while the less smart ones will ignore the economic and competitive realities until it is too late.

    Here’s the great thing for Haggen. The best way to get a company ready to be sold is to make it more effective for customers and a better place to work for employees – which happens to be two of the things that, from my experience, Jim Donald is best at. So whether the company is sold down the road, or this is just the next chapter in a decades-long history as an independent-minded regional chain, this is a smart strategy.

    There is no question in my mind that Haggen is both more effective and efficient today than it was two years ago.

    But now here’s my next question. What sort of benchmarks does Comvest have in mind in terms of being able to sell Haggen to a bigger company and make some money on the investment?

    Again, this is just a guess. But I’d be willing bet a few bucks that Comvest won’t have an ownership stake in Haggen in, say, 2015. Because being competitive as a small, 30-store chain isn’t going to get any easier.

    Published on: February 18, 2011

    The Chicago Tribune reports on a study done by a Chicago coupon blogger, Jill Cataldo, in which she claims to have found 761 products being sold at a Dominick’s past their expiration dates - with some of the dates going back to 2008. And the complaint, based on two shopping trips to Dominick’s, has generated a number of complaints on Dominick’s Facebook page.

    Dominick’s, owned by Safeway, issued the following statement yesterday: "While expiration dates on food products are largely based on quality, not food safety, that does not diminish the fact that we are displeased with the out-of-date products found at our stores. This is not indicative of how we do business. A high-level and highest-priority team has been assembled to immediately address these issues."

    According to the story, “With the exception of baby formula, sale of foods or medicines that have expired aren't prohibited by the Food and Drug Administration.

    “Also, the U.S. government does not require dates on most packaged-food items. Exceptions are infant formula and some baby food. The only requirement is that if a date is used, it must contain a day, month and, in the case of shelf-stable products, the year, according to the federal Food Safety and Inspection Service. Adjacent to the date must be a phrase, such as a ‘sell by’ or ‘use before,’ explaining the date.”

    The lack of federal guidelines is small comfort to the consumer contingent.

    "There's a gross-out factor with it, definitely, as well as a quality factor," says Cataldo.
    KC's View:
    You can see a lot of the expiration dates at, and it is eye-opening.

    I wish Dominick’s had been a little less equivocating in its statement, but at least they addressed it immediately. My feeling is that they need to make sure that the problem is fixed within 24 hours - every product on every shelf needs to be checked, and out-of-date products need to be pulled immediately.

    And, BTW...every other store ought to do the same thing. because you know this isn’t just a Dominick’s issue. They just got the first blast of bad publicity ... and there will be a lot of reporters and bloggers visiting stores all around the country over the next few days, checking to see how pervasive the problem is.

    Get busy, folks.

    Published on: February 18, 2011

    Debate continues in Washington, DC, over provisions in financial reform legislation passed into law last year that will impose regulations on how much banks can charge for debit card swipe fees.

    The Wall Street Journal reports that “top U.S. regulators said Thursday that small banks could be hurt by new limits on debit-card fees, comments that could fuel efforts to delay or change a provision in the Dodd-Frank financial-overhaul law.

    “The provision directs the Federal Reserve to cap "swipe fees" that debit-card issuers charge merchants each time a customer pays with a debit card. Banks and credit unions with less than $10 billion in assets, however, are exempted from the limit and can charge higher fees.”

    According to the story, “‘It is possible that the exemption will not be effective in the marketplace,’ and smaller banks will be forced to accept the same low fee as the larger banks, Fed Chairman Ben Bernanke said during a Senate Banking Committee hearing.”

    “Fed board member Sarah Bloom Raskin told House lawmakers at a separate hearing that ‘there are legitimate questions’ about whether the exemption will protect small banks as intended.”

    The Journal goes on, “Mr. Bernanke said there are two reasons why the small-bank exemption may not work. Merchants may choose to refuse to accept higher-fee cards from smaller banks. Or, payment networks such as those run by Visa Inc. and MasterCard Inc. may decide that it doesn't make financial sense for them to have a two-tier system. Either scenario could lead small banks to adopt the lower fee required for larger banks.

    “Mr. Bernanke and Ms. Bair also said it's unclear if consumers will benefit from lower debit-card fees. They said it's likely that banks will pass some of their increased costs on to customers. On the other side of the equation, Mr. Bernanke said that retailers could pass savings on to consumers at the till, but only if competition in their particular market demands it.”

    Looking for delays and/or changes in the swipe fee regulations, Visa Inc. General Counsel Joshua Floum, in prepared comments, said: "These changes are so fundamental and far-reaching that the extent of the consequences cannot be fully determined today. As a result, we believe it is critical for Congress to suspend implementation of the Durbin amendment and the [Federal Reserve Board's] related regulatory proposal and request an impact study of the unintended consequences on participants in debit transactions, particularly consumers, small businesses, community banks, credit unions and other financial institutions."

    Trade associations weighed in against any change in swipe fee reforms.

    Bipartisan swipe fee reforms passed by Congress last year will bring competition and fairness to the broken debit payments market,” said Leslie Sarasin, president/CEO of the Food Marketing Institute (FMI). “We strongly urge members of Congress to stand up for small businesses by ensuring these reforms are implemented on time and as written.”

    “Congress recognized last year that the credit card companies and big banks have been extracting monopoly-like fees from merchants and their customers for far too long,” National Retail Federation (NRF) Senior Vice President and General Counsel Mallory Duncan said. “Now that reform is about to go into effect, the card industry is asking for a do-over they don’t deserve. Every month they can push back reform is another billion dollars taken out of consumers’ pockets. We would rather use that savings to cut prices, provide more retail workers with health insurance or put more Americans to work.”

    “Swipe fee reform can reduce the hidden fees that inflate prices, and that is a win for consumers,” said Doug Kantor, counsel for NACS and the Merchants Payments Coalition. “In fact, consumers are already saving due to the Durbin amendment. The provision that allows for cash discounts helped embolden merchants — especially at the gas pump and in restaurants — to offer cash discounts in spite of the aggressive restraints that the card networks had put on them in the past.”
    KC's View:
    Here’s what I’d like to know.

    How many retail companies and organizations gave money in the last election cycle to politicians who now are bending to the banks’ desire to stop any sort of financial reform that includes swipe fee regulations?

    Just curious.

    Published on: February 18, 2011

    The Associated Press reports that Target Corp. “has revised its policy concerning political giving a few months after a controversy over its $150,000 donation to a business group that was backing a conservative Republican candidate for Minnesota governor.”

    According to the story, the candidate, Tom Emmer, “was an opponent of gay marriage and other gay-rights initiatives.” Gay rights advocates were upset by the donation because they had seen Target as an ally.

    AP writes that “Among the changes is the creation of a committee of senior executives responsible for guiding decisions about financial support of political activities. The committee will determine whether the company makes contributions directly to candidates, political parties or political committees.”
    KC's View:
    Here we go again...just when I thought I’d gotten past the gay rights discussion that dominated MNB for the past week or so, I get pulled back in.

    Actually, I have no problem with this discussion.

    To be clear, there are different issues at play here.

    The one that Target is focusing on is the economic issue - that you have to be careful not to be perceived as being against a percentage of your customer base.

    Published on: February 18, 2011

    HealthDay News reports on a study of whether posting calorie counts in fast food restaurants has an effect on what people eat - and the answer seems to be “no.”

    According to the story, “For two weeks that summer, Elbel and his team studied the fast-food choices of 349 children and teens, ages 1 to 17, in low-income areas of New York City and Newark, N.J., both before and after calorie labeling was introduced. Newark had no labeling requirement.

    “The restaurants were McDonald's, Burger King, Wendy's and Kentucky Fried Chicken. About 90 percent of the customers were ethnic or racial minorities.

    “The researchers asked customers as they entered to show them their receipt and to answer a set of questions in return for $2. The customers didn't know before ordering what the researchers were studying.

    “Parents of younger children answered questions about their food choices for their kids.

    “Fifty-seven percent of teens in the New York sample said they noticed the label, but only 9% considered the information when ordering.

    “Teens bought 730 calories per order, on average, before the labeling appeared and 755 after. Parents ordering for their younger children ordered 610 calories before and 595 after -- not enough of a reduction to be significant statistically.

    “About 35 percent of the teens said they ate fast food six or more times a week. Nearly three-quarters said taste influenced what they ordered.”
    KC's View:
    A lot of people will look at the story about calorie postings not working well in certain fast food restaurants in certain neighborhoods, and conclude that such things are not worth trying. But I prefer a different approach...see our next story.

    Published on: February 18, 2011

    In New Jersey, the Courier-Post reports that Campbell Soup is launching “a $10 million plan to reduce obesity and hunger over the next 10 years among children living in its hometown ... Working with schools and an array of nonprofits, Campbell's goals are to increase access to affordable, healthy food; expand opportunities for physical exercise and increase nutrition and health education.”

    The story says that “initially, Campbell will focus on elementary schools and services in Parkside, where its headquarters is located, and in North Camden, the city's poorest sector.

    Campbell’s says that it will work to bring a second supermarket to the city (there is only a single Pathmark there now), and “will work with the Food Trust on a Healthy Corner Store Network to supply small mom-and-pop grocery stores with equipment and training to order, price and display fresh produce.”

    According to the Courier-Post, “Campbell also will combine with the city and the Children's Garden on the waterfront to convert abandoned urban lots into leafy green vegetable gardens.

    “Recognizing that physical exercise is integral to good health, the soup maker will fund recess and after-school activities at six pilot sites in conjunction with the YMCA of Burlington and Camden counties. Camden's own YMCA closed more than two years ago due to lack of funding and membership.

    “And the last ingredient in a recipe for good health is knowledge. Campbell plans to teach free, six-week cooking courses at sites administered by the Food Bank of South Jersey and offer nutrition education directly to students. Campbell expects many of its 1,200 Camden employees to volunteer as part of the program.”
    KC's View:
    Kudos to Campbell’s for paying attention to its own backyard and trying to make a real difference.

    The issue of obesity and poor nutrition is one that is having an enormous impact on the nation’s youth, and is one with economic, health and national security implications. It has to be addressed through a variety of public policies and private initiatives, with the full knowledge that not everything is going to work immediately, and that we’re going to have to chip away at a problem that has taken decades to create.

    Published on: February 18, 2011

    USA Today reports on a new survey saying that “most Americans support the U.S. law that begins phasing out traditional light bulbs next year and, despite some consumer grumbling, say they're satisfied with more efficient alternatives ... Nearly three of four U.S. adults, or 71%, say they have replaced standard light bulbs in their home over the past few years with compact fluorescent lamps or LEDs (light emitting diodes) and 84% say they are ‘very satisfied’ or ‘satisfied’ with the alternatives.

    According to the story, “The results come as GOP efforts intensify in Congress to repeal the bi-partisan 2007 law, which begins phasing out the traditional incandescent bulb in Jan. 2012. Two dozen House Republicans, led by Rep. Joe Barton, R-Texas, proposed a bill last month to repeal the phaseout, saying most Americans oppose it.”
    KC's View:
    So much for bi-partisanship. And heaven forbid we actually develop a national policy aimed at being more energy efficient.

    Published on: February 18, 2011

    • IGD, the British food and retail analyst, is out with a study suggesting that Tesco’s growth over the next five years is likely to be at a 7.5 percent annual rate because of its Asian expansion efforts, which should outpace an expected 4.7 percent growth rate at Walmart.

    Crain’s New York Business reports that as Aldi opens its first store in New York City - in the Rego Park section of Queens - it has signed deals to open stores in the Bronx and on Long Island, and “is looking for other opportunities.”
    KC's View:

    Published on: February 18, 2011

    ...will return.
    KC's View:

    Published on: February 18, 2011

    One of the realities of the way MNB is run is that we’re never all in the same place at the same time. In fact, Michael Sansolo and Kate McMahon had never met each other.

    So, it was a kind of fun for us last weekend when we actually all got together again for the first time. A picture was taken ... and if nothing else, it’ll tell you what Kate looks like. (And will confirm a simple fact - she’s a lot better looking than Michael and me.)

    The New York Times had an interesting story about the worth of a single human life.

    The piece didn’t explore this issue from ethical and philosophical grounds, but rather looked at it from an economic perspective. Various agencies of government have established baseline prices for a single life as a way of justifying different kinds of standards.

    As the Times writes, “The Environmental Protection Agency set the value of a life at $9.1 million last year in proposing tighter restrictions on air pollution. The agency used numbers as low as $6.8 million during the George W. Bush administration.

    “The Food and Drug Administration declared that life was worth $7.9 million last year, up from $5 million in 2008, in proposing warning labels on cigarette packages featuring images of cancer victims.

    “The Transportation Department has used values of around $6 million to justify several recent decisions to impose regulations that the Bush administration had rejected as too expensive, like requiring stronger roofs on cars.

    “And the numbers may keep climbing. In December, the E.P.A said it might set the value of preventing cancer deaths 50 percent higher than other deaths, because cancer kills slowly. A report last year financed by the Department of Homeland Security suggested that the value of preventing deaths from terrorism might be 100 percent higher than other deaths.”

    The politics of this is interesting. According to the Times, “The pattern of increases is scrambling a long-standing political dynamic. The business community historically has pushed for regulators to put a dollar value on life, part of a broader campaign to make agencies prove that the benefits of proposed regulations exceed the costs.” But now, not so much, because establishing specific and increasing dollar figures to the value of a human life means that costs are going up for business.

    There’s probably nothing that can be done about the politics, even if the whole discussion is a little disconcerting.

    Here’s where I come down on the whole value of a human life issue.

    My life = Priceless.

    One of my favorite newspaper columnists is David Pogue, who writes about technology for the New York Times, as well as contributing pieces to CNBC and other outlets. Pogue is a prolific book writer, and last year published one called “The World According to Twitter,” was consisted of answers to provocative questions he’d posed to his half-million followers on Twitter.

    Pogue wrote on his Times blog yesterday that he’d had a “blast” writing it, and in doing so, discovered “that Twitter followers are an entirely different slice of the Internet. This is not the sophomoric rabble that leaves comments on YouTube (usually averaging one misspelling per line and favoring the suffix ‘-tard’). These are funny, clever, very intelligent people.”

    Now, Pogue also concedes that the book “tanked,” which, he wrote, “breaks my heart. My theory is that bookstore shoppers somehow thought the book was about Twitter, and weren’t interested.”

    Part of the problem, I suspect, is that it caught up in all the noise that so many of us are exposed to each day. I like Pogue’s work, and somehow the book’s existence slipped through the cracks - I didn’t even know he’d written it.

    But now I want to, because of this paragraph from his blog:

    “To this day, I can’t stop laughing at some of the replies to, “Make up a prequel for a famous movie.” The responses included ‘Young Yeller,’ ‘Flirts With Wolves,’ ‘Conceived on the Fourth of October,’ ‘Mr. Smith MapQuests Washington,’ ‘There Goes Private Ryan—I Hope He’ll Be O.K.,’ and my personal favorite, ‘We’re Running Low on Mohicans’.”

    That’s funny. I’m going over to Amazon right now to buy one.

    We talk a lot here about the value of private brands, and so it is entirely appropriate that my wine of the week is a private label blend from Bin 36: the 2007 Proprietary Red (Cabernet Sauvignon/Syrah/Petite Sirah/Petit Verdot/Merlot) Duncan & Sachs, “D&S,” from California, which is a lovely, smooth and highly drinkable wine.

    Find it online. And enjoy.
    KC's View:

    Published on: February 18, 2011

    Next Monday, February 21, is a federal holiday here in the US – Presidents Day, which is sort of a combination of George Washington’s birthday, Abraham Lincoln’s birthday, and a time when a lot of mattresses seem to be on sale. (Though these days, pretty much everything seems to be on sale and has been since the holidays.) Still, it is a federal holiday and a school holiday … which means that I’m going to take advantage of the calendar and take the day off.

    See you Tuesday…have a great weekend. Sláinte!!
    KC's View: