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: March 8, 2011

    by Michael Sansolo

    There’s great news out of Akron, Ohio. This coming baseball season, the minor league Akron Aeros are featuring an array of hot dog choices that will live in baseball and gastronomy lore. At an Aeros game you can get a half-pound hot dog or, lord help you, a full one-pound variety. Incredibly, the story only begins there.

    Once you have your dog, you can dress it with a choice of 40 toppings. No longer is the argument between mustard and ketchup. At an Aeros’ game you can get toppings like macaroni and cheese, peanut butter and jelly, kimche or wasabi. Seventh inning stretch in Akron will take on a whole new meaning.

    Let’s forget about nutrition or heartburn for a second and focus on the array of choice. Is it possible that the Aeros are simply overloading their fans with too much, turning the simple, time honored “beer and a dog” order into a walk through a catalog? Or is this genius?

    The issue of overload is everywhere. Newsweek featured a recent cover story examining brain freeze and what happens to consumers when they are overwhelmed by the choices facing them. It’s a powerful topic, especially in an industry like supermarkets that regularly confronts shoppers with a staggering array of products in each successive aisle. Somehow, though, the incredible choice offered by the Aeros seems different. This may be genius.

    There is a point you read quite often here at MNB. As we’ve explained endlessly, Kevin Coupe and I wrote a book about how to use stories from movies to help business people with speeches, employee meetings, etc. (It’s called The Big Picture: Essential Business Lessons from the Movies and yes, it is available on Amazon.com, as well as for Kindle and iBooks.)

    Think about it: a good story stays with you. It creates connection, emotion and memory. When companies tell a great story, it helps them stand out in the marketplace, which is something all of us would like to and need to do. In that context, we can view the Akron hot dog story in a different light.

    You might think the hot dogs are insane, disgusting or worse, but they aren’t ordinary. Suddenly, the Aeros aren’t just another minor league franchise. Now there is a strange reason to make the Akron Aeros a destination. I know if I get anywhere close to Akron this year, I will be visiting that stadium even though I know I won’t eat a half-pound hot dog and I won’t even consider slathering it with feta cheese, marinara and chocolate chips (three more available choices.)

    But I’ll be dying to see what happens around me, what people eat and whether this incredible promotion makes this Cleveland Indians’ farm team a tourist destination. Why? Because a narrative is a game changer, even if it’s just about hot dogs. A narrative makes the Aeros a destination, more than a collection of players on their way up or out of baseball aren’t always enough of a draw. (Personally, I can’t wait for antacid night!)

    A narrative can even make overwhelming product choice a destination in itself. Visit Fairway stores in the New York City area and see how they treat olive oil. The choice is way beyond what anyone can consider, but it works to build image and sales. Or check out Coca-Cola’s new Freestyle machines, where the user can personalize a beverage to their own taste. In these special cases, the array changes the discussion from overload to theater. In these cases, choice creates a great story.

    Ask yourself: what’s your story?


    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
    KC's View:

    Published on: March 8, 2011

    The New York Times has a page one story this morning about how “banks and debit card companies are engaged in an all-out assault on Capitol Hill, enlisting a growing cadre of lawmakers and lobbyists to push for changes, delay or outright repeal” of legislation that restricts debit card swipe fees, reducing them from an average of 44 cents per transaction to 12 cents per transaction.

    The restrictions were part of broader financial reform legislation passed by the US Congress last year. According to the story, “Merchants, who had complained that the $20.5 billion in annual fees were biting into their profits, were elated. Banks were stunned. Their lobbyists tried to reverse the move, but when the overhaul of the nation’s financial regulation was passed by Congress last July, the debit card cut survived.”

    But now, with the Federal Reserve due to issue specific regulations by next month, reform opponents see this as their last chance to reverse the legislation. The Times writes that “banks contend the proposed cut in fees ... will leave many of them unable to afford to issue debit cards to customers or will force them to raise other consumer banking charges to cover the costs. They also claim retailers will reap unfair profits.”
    KC's View:
    Well, I think that when banks talk about “unfair profits,” we at least ought to concede that they know what they’re talking about, because they’ve been reaping unfair profits from debit card fees for years. They spend millions of dollars on ad campaigns to convince people to use signature debit cards rather than cards that are verified via the use of a numerical code ... because they make higher fees on the signature cards. And quite frankly, it is hard for me to muster up any sympathy for the financial services community.

    Sure, it is possible that retailers won’t respond to lowered debit card fees by cutting prices ... but as I say, it is amusing that banks would object to such a thing. (Apparently it is only them that are allowed to behave inappropriately.) But I even doubt that this will happen...because as soon as a couple of retailers lower their prices because of decreased swipe fees, it will force others to do so. The market will prevail, and it ultimately will be good for consumers.

    I’m really tired of a system that is so weighted in favor of the debit card issuers; the danger now is that millions spent on lobbying could yet again swing the pendulum in their direction. That’d be a shame.

    Published on: March 8, 2011

    by Kevin Coupe

    While we’re big fans of transparency here on MNB, sometimes there is such a thing as too much information.

    The New York Times reports that Hawaii recently passed, and the California legislature currently is considering, a law that would ban the sale and possession of shark fins - which would for all practical purposes eliminate the ability of Chinese restaurants to serve shark fin soup, described as “a steamy glutinous broth” that for centuries has been “a symbol of virility, wealth and power.”

    Here’s where the “too much information” part comes in. The Times reports something that a lot of people may not know, that shark finning is “a brutal, bloody practice of the global trade in which the fins are typically hacked off a live shark, leaving it to die slowly as it sinks to the bottom of the sea ... As the once-ceremonial dish becomes more accessible, up to 73 million sharks are being killed a year.”

    However, the Times notes that the legislative actions have highlighted what it calls “the politics of soup,” putting on display “a generational divide between eco-conscious children and their tradition-bound elders.”

    Now, sharks are not creatures that ordinarily generate a lot of sympathy; Jaws saw to that. (Though, to be fair, I’ve felt sorry over the years for the sharks that have had to live with Jaws 3D and Jaws: The Revenge.)

    But it probably is a pretty good bet that over the years, a lot of people ordered and enjoyed shark fin soup without knowing precisely how it is made. The price of transparency is that our eyes are opened to the realities of the world around us, and we actually have to take responsibility for the things we sell, buy and consume.

    Even sharks.
    KC's View:

    Published on: March 8, 2011

    Advertising Age has a piece about how Walmart has become a kind of private sector regulator, establishing standards for the products it buys and sells. Among the things that its suppliers have been “asked” to do: “Report their greenhouse gas emissions and establish targets for reducing them, invest in community-development activities where their plants are located and participate in creating an index by which the consumers can judge how sustainable their products are. If they make food products, they're also required to reduce sodium 25%, sugar 10% and all vestiges of industrially produced trans-fatty acids by 100% by 2015.”

    According to the story, Walmart “clearly has been out in front of the rest of the industry on many issues. And unlike a government, it isn't bound by constitutional due process that bogs regulations sometimes for years. No Tea Party representatives are trying to withhold funds for its greenhouse-gas reduction plans. And with billions of dollars at business at stake for its biggest customers, Walmart wields a bigger stick than any fines a government can impose.

    “To be sure, Walmart notes that its supplier-sustainability assessment, for example, isn't mandatory. Then again, it also notes: ‘We do intend to reward those suppliers who have measured impacts and show progress toward meeting stated reduction goals’.”

    And, in some cases, Walmart has gone it alone - even if that has put it at odds with other industry players. The story notes that in coming up with its healthy foods initiative, “Walmart rankled some other members of a Food Marketing Institute committee it has served on, which, along with the Grocery Manufacturers Association, proposed a similar seal in October ... The FMI/GMA seal was set to appear early next year. Walmart plans to get is out by the end of this year.”

    In another, related story this week, the New York Times notes that Walmart has banned the flame retardant polybrominated diphenyl ethers because of concerns that it poses “a significant risk to human health” - getting ahead of the federal Environmental Protection Agency (EPA), which is “working with manufacturers and has announced a voluntary phase-out of the most common form of the troublesome chemical that should take effect in several years.”
    KC's View:
    I think that it is important for companies to try to get ahead of the regulatory wave, to not depend on the government to create standards and mandates. If they do, maybe the government won’t. (Maybe it will anyway, but that’s another story.)

    Some will argue that Walmart is making a mistake in being so aggressive in these areas, that it is getting away from the central business proposition that has made it successful. But I actually think that Walmart is playing a long-range game here ... that it understand that the sustainability concerns of the next generation of consumers will be of enormous consequence, and that it needs to be in synch with those shoppers. Plus, it helps the company’s image ... which is no small thing.

    Published on: March 8, 2011

    Wakefern-owned PriceRite, which describes itself as offering “customers the same quality foods as traditional supermarkets at about half the price,” announced that it is opening its first Maryland store this coming Sunday, a 37,000 square foot unit in the Woodlawn section of Baltimore.

    Until now, PriceRite only has had stores in Connecticut, Massachusetts, New York, Pennsylvania, and Rhode Island.
    KC's View:

    Published on: March 8, 2011

    The Pittsburgh Tribune-Review reports that Western Pennsylvania is seeing “the growth of smaller, limited-assortment food stores that focus on value. Discount chains Aldi and Save-A-Lot have opened dozens of stores in Western Pennsylvania in recent years. Food Lion's low-cost Bottom Dollar concept is likely to appear in the region. And O'Hara-based Giant Eagle Inc. now runs five Valu King, deep-bargain stores in Pennsylvania and Ohio.:

    The reason? “Grocery shoppers remain in a budget-conscious mood even as the economy rebounds,” the paper writes, and price-conscious shoppers seem more willing than ever to visit numerous stores to land the best and most relevant deals.

    The Tribune-Review suggests that a number of these value-driven retail banners may be looking for additional opportunities, thus fueling to an ever greater extent price-oriented retailing that shows no sign of abating.
    KC's View:

    Published on: March 8, 2011

    • The Arizona Republic reports on what has been a common story in the food industry - “general merchandisers, drugstores, dollar stores and other traditionally non-food retailers are scrambling to add fresh food and more groceries to their shelves. They see groceries as an opportunity to boost customer visits, increase shopper loyalty and add to their profit margins ... The trend could mean more convenience and lower prices for consumers, but more competition and a thinner piece of a shrinking pie for traditional grocers.”

    • Del Monte recently sponsored an interesting event in Bossier City, Louisiana - the company sent a truckload of fresh fruit and active fruit games to the Sun City Elementary School there so that students could consume all the fresh fruit they wanted to while also learning about healthy eating habits. The elementary school was selected for the event because it was one of the top winners in North America with seven teachers winning a Del Monte-sponsored online contest.

    • The Chicago Sun Times reports that the Subway fast food sandwich chain has passed McDonald’s “as the largest restaurant operation in the world, as determined by the number of locations ... Subway, which for years has used the successfully dieting Jared Fogle in its ads, reports 33,749 restaurants in 95 countries, as of the end of 2010. The latest count from McDonald’s, drawn from a regulatory filing made in late February, was 32,737 locations in 117 countries.
    KC's View:

    Published on: March 8, 2011

    • Robert “Bob” Ingle, founder of Ingles Markets, has passed away at age 77.

    Ingle, a third generation grocer, opened his first Ingles store in 1963; the company has grown to more than 200 locations in Alabama, Georgia, North Carolina, South Carolina, Virginia and Tennessee, and generates close to $2 billion in annual sales.
    KC's View:

    Published on: March 8, 2011

    Yesterday, MNB took note of a Wall Street Journal report that objections are being raised to an effort by the troubled and bankrupt Great Atlantic & Pacific Tea Co. (A&P) to “ask a bankruptcy judge to approve $1.76 million in payments to four of its top executives, part of a $6.8 million ‘key employee retention plan’ that covers 146 non-union employees.”

    According to the story, “creditors, unions and the U.S. Trustee's office all (object) to what they say amounts to ‘retention’ rather than ‘incentive’ packages ... Lawyers for the United Food & Commercial Workers Union call the bonus requests ‘astounding’ considering the short time since the bankruptcy filing to evaluate A&P's performance, and also the fact that the grocery chain hasn't presented a one-year business plan to the court.”

    I commented:

    Listen, I don’t expect every executive who comes in to try to save a dying company to take a salary of $1 a year, like Steve Jobs did at Apple. Just like I don’t expect every executive who comes in to save a company to get Steve Jobs-like results.

    But...at a time when a company no doubt will be looking for some concessions and lot of cooperation from employees during very trying times, at the very least this looks insensitive.

    Get the job done, and bonuses ought to be paid. But at this point, it just looks like feathering one’s own nest.


    One MNB user responded:

    It's not just "creditors, unions, and the US Trustee's office" that take offense to the nest feathering. How about tenured middle management leaders and other associates that have devoted their careers to A&P? As it turns out, many of these folks are not underperforming sluggos but rather dedicated, hardworking industry pros that had the misfortune to already be working at A&P when the recent team arrived from Mt Olympus. The retention payouts are slated for newly hired executives only. Nice touch!

    The "underperformers" that were already fired (some of which were really just victims of the new brooms) may have one axe to grind, but now everybody else has another one.  Talk about creating an "us versus them" atmosphere in Montvale? It's a good thing that all the decisions made by the new regime will work out perfectly so history will validate the bonus money and it won't seem as much like nest feathering over time.

    We love it when a plan comes together. We hope.


    Another MNB user wrote:

    Rather than the A & P board of directors approving that their new CEO should “ask a bankruptcy judge to approve $1.76 million in payments to four of its top executives, part of a $6.8 million ‘key employee retention plan’ that covers 146 non-union employees” ... the board ought to be considering the decision they made in hiring him for the job, in my opinion.

    The board had to know the request would be made. They share the blame.

    Another MNB user wrote:

    You said it when you said "Get the job done, and bonuses ought to be paid."  Have we learned nothing from the "retention monies" financial institutions paid out?  Does A & P want to retain the people who brought them to this dance?

    A question I would have to ask, who are the four employees worth a $400,000 bonus while the other 142 are only worth about $35,000?

    I came into retail food in Feb 1971 and A & P was already trying to go out of business back then.  It has been a long slow process but they finally achieved bankruptcy.  There have been some strong people who have passed through their offices but nothing seemed to change.  Must be the air or something.


    The real question, I think, may be how deep in the gutter A&P has to sink before Ron Burkle and Yucaipa step in to rescue what is left at a deeply discounted price.




    MNb reported yesterday about new efforts by the National Cattlemen's Beef Association, which represents beef producers, to launch a “Masters of Beef Advocacy” (MBA) program designed to counter the aggressive and effective moves made by People for the Ethical Treatment of Animals (PETA) to reduce meat consumption in the US.

    I commented:

    I guess the thing that gets me about all this discussion is that it seems so absolutist. I wish we could get to the point where the people at PETA could promote their agenda without demonizing everybody who disagrees with them.

    Here’s where I stand ... and I have the suspicion that a lot of people are just like me:

    I like eating meat. I have no moral, ethical or nutritional problem with it. But I also like eating seafood, love pasta, am okay with fruits, and will even nibble on a veggie and put soy milk on my cereal from time to time. My goal is great taste first, decent nutrition second ... and I want as many food-related experiences as possible. I don’t mind when people explain their positions to me, but don’t lecture me and don’t demean my choices...and I promise not to demean yours.


    One MNB user responded:

    I have been a vegetarian for 25 years and I too have experienced much
    absolutism. I have never demeaned omnivores and am not an evangelist of the
    cause, but my personal food choices have surprisingly raised the ire of
    many.

    I was surprised that instead of dealing with the meaty  food issues that
    are embedded in this article you took a shot at vegetarians.

    The only mention of PETA in the WSJ article was:

    "Meanwhile, veggie evangelists at People for the Ethical Treatment of Animals have turned heads with ever-more-racy campaigns, including sending models clad only in strategically placed leaves of lettuce to hand out tofu hot dogs on street corners nationwide.

    "PETA says its tactics work. Last year, the nonprofit fielded 850,000 requests for "vegetarian starter kits" packed with recipes like Tofu Tamale Pie and testimonials from celebrity supporters like actress Natalie Portman."

    I do not see anything demeaning (or demonizing) in this PETA reference, but you choose to tackle that in your comments instead of evaluating meat of the article (pun intended) like the controversial idea that the feedlot owners would like to suggest and claim that all feedlot cattle are grass-fed even though only a small portion of the caloric value of a head of cattle is from natural grazing vs. that which is finished with corn and other fillers at the feed lot. That is a food issue, Kevin. Instead you lashed out at vegetarians in a way that was out of context, in my opinion.

    I see it all the time.


    I was very careful to quote the WSJ in context, but you’re right...my commentary went beyond that.

    I guess that over the years, it has been my impression that PETA’s definition of “ethical treatment of animals” means not killing them for food ever, as opposed to treating them humanely at every step along the food chain. I also think that at various junctures, it has seemed to me that PETA was more concerned with ethical treatment of animals than it is about ethical treatment of humans.

    I certainly was not trying to demean all vegetarians. Far from it.

    Another MNB user wrote:

    Grass-fed beef, raised without antibiotics and not fed corn or grain, has a very unique taste. It can be found by buying direct from local farmers. When I compromise myself by buying beef from my local supermarket…there just isn’t any taste. If the beef council was really concerned about increasing beef consumption, shouldn’t they produce a better product…

    And another MNB user wrote:

    Could you clarify the difference between explaining my position to you and lecturing, demeaning and demonizing you?  For example, if I were to say “I don’t eat meat because there is plenty to eat without resorting to killing animals” would that be explaining my position or lecturing?  What’s okay to say and what is crossing the line?

    No, I’m okay if you say that. I don’t take that as a personal attack. But I have a thick skin, and think that people are entitled to their opinion ... and would hope that you would respect me if I ordered a bacon cheeseburger. Which I probably would not do if we had dinner together, out of respect for your position.

    But do you respect my position as much?

    MNB user Mark Raddant wrote:

    When our family began finding a broader assortment of protein sources, ranging from fish to beans and lentils.  We saved enough money that now, when we do eat meat, the cuts of beef, pork and even fish are much higher quality, leaner, and far more satisfying taste-wise.

    Beef and pork are great, but they are very inefficient means of getting protein into your system. Surprisingly, the beans and lentils can be really tasty also—which has been a very pleasant surprise for our family.


    But I’m not eating for efficiency. I’m eating for taste and flavor and enjoyment. And I like beef and pork and chicken and rabbit and venison and reindeer and ... need I go on?




    Regarding Starbucks’ expansion plans, one MNB user wrote:

    You know that I always support Starbucks…I worked with the boys that took them towards “Lifestyle;”  they are all gone now. It feels like a whole new team has emerged to spend Starbucks equity. I may not be as supportive as I have been in the past.

    There does seem like there could be some hubris in evidence at Starbucks HQ. We’ll see.




    And, responding to the new slogan chosen by the National Pork Board, one MNb user wrote:

    It might be time for a new slogan, but "be inspired?" Are they hoping people will confuse pork with PBS?  "The other white meat" was at least original, referred to the product, and encouraged people to think about pork in a new way. The new slogan does none of that, and whoever came up with it was anything but inspired.

    Agreed.




    Yesterday’s Eye-Opener referenced a New York Times story saying that “New York has spawned a breed of hard-line restaurants and cafes that are saying no. No to pouring takeout espressos, or grinding more than a pound of coffee at a time. No to taming the intensity of a magma-spicy dish. And most of all, no to the 21st-century conviction that everything can be accessorized to the customer’s taste.”

    In essence, I wrote, what this comes down to is that at least some chefs have decided to fly in the face of the axiom that says “the customer is always right,” and instead say that “in certain cases, when the customer is wrong, the customer can take a flying leap.” It is an unusual stance to take in a service-based economy, and an even more unusual stance to take during a time when patrons are displaying recessionary impulses.

    I suggested that “the chefs’ stance actually is more than that. It is a statement that a patrons should expect more than food and ambience when they go out to eat - they should also expect intelligence about the food being served, and should expect to be educated as well as fed. This won;t work everywhere, of course, and not all restaurant patrons will accept such conditions. But what these chefs actually are looking to establish is a great sense of trust between them and their customers ... which is what all retailers should aim for - and it will be interesting to see if their resolve pans out or flames out.”

    And, I said, the debate reminds me of the art vs. commerce argument at the heart of the great movie Big Night.

    MNB user Richard Lewis wrote:

    I don't know that this is so unusual and I don't think it's about art : it's about market positioning. At some point, brands like Dior and Louis Vuitton decided they weren't meatball guys. At some point, Sam Walton decided he wasn't a risotto guy. And at some point, every business has to decide what customers they want, target those people and let the others, well, take a flying leap.

    I actually think we live in a world where more retailers than ever find themselves in the mushy middle, unwilling to take such a firm position and possibly alienate a shopper.

    Another MNB user wrote:

    I just wanted to say it’s always a pleasure to read an article of yours, then think back to something it reminds you of, and then see the same reference further along in the article – in this case the movie Big Night.  GREAT movie!!!!  Stanley Tucci had a wonderful performance.  Love the feast at the end...




    In my “OffBeat” piece last Friday, I mentioned that despite Toyota’s problems of late, I’ve had two excellent experiences recently driving Corollas in serious blizzards...and was impressed.

    To which one MNB user responded:

    I've been driving my US-made Buicks in CT/NY/MA in conditions like that for many years.. 35,000 miles/year through all kinds of weather and, never, ever once been stuck! Let's give American cars their due credit too.

    Just to be clear ... a nice thing said about Toyota wasn’t a slam on US-made cars. If anything, I was actually surprised by how well the Corollas drove, and thought it worth mentioning.

    I’ll save my comments about crappy rental Chevys that I’ve driven for another time.




    Finally, MNB user Steven Ritchey had a comment worth considering about changing retail models:

    I can’t help but wonder if 20 years from now, if someone will come along and dethrone Amazon, Netflix and maybe Apple.  The way the business cycles are compressed these days, maybe it won’t take that long, but at some point, the business models these guys are using will be obsolete and I wonder if they will be able to adapt, particularly if their current management retires, or even if they don’t.

    As a joke, but also partly serious,  I also wonder when that day comes who will be the recipient of your unabashed adulation.


    Of course those companies will be faced with irrelevance ... unless they change with the times and embrace the changes rather than avoiding or trying to mitigate them. These days, successful companies stay successful by understanding that they need to be disruptive ... and operate each day as if they can be put out of business by someone else. Complacency and hubris are the enemies of success.

    As for what companies I will adore when Apple and Amazon lose their mojo, I can only hope by that time I’ll be dead. (But that won’t happen anytime soon. I hope. For their sakes, and mine.)
    KC's View: