retail news in context, analysis with attitude

Published on: April 27, 2011

by Michael Sansolo

Tip O’Neill, the long-time speaker of the US House of Representatives, famously said that all politics is local. He could have been talking about marketing, especially in the current era.

Last week, we got to see one of the most aggressive forms of local marketing ever tried and it came from a most unexpected source - the Washington Post. The Post considers itself a global paper and it is well known for periods of excellence in journalism. But it’s also a local newspaper in the Washington area and we got a big reminder of just how local that can be.

One day recently, the Post crossword puzzle featured a series of clues that helped a local man propose to his girlfriend in a most unusual way. If you missed the coverage of this story, various clues spelled out the girlfriend’s name and popped the key question. (She said yes.) Apparently she is a crossword puzzle fanatic and her boyfriend approached the Post with the idea.

Think about that for a moment: A major newspaper serving a large metropolitan area and readers around the country worked with a single reader for a singular occasion. No doubt there was a time when the man’s call to the Post wouldn’t have even been returned. But newspapers no longer can stand on ceremony, so suddenly it looked like a great idea. The result was tons of news coverage or free advertising, and a wonderful feel good story.

In a world of Twitter, blogs and the culture of “me” it’s hard to imagine that this is the last time we’ll see mass marketers get so incredibly local. And that should make it pretty Eye Opening, especially as you begin looking to see if there are local opportunities - “micro” opportunities - that can help you drive new business.

Published on: April 27, 2011

TheStreet.com reports that The Conference Board came out yesterday with its April Consumer Confidence Index, saying that “the Index now stands at 65.4, up from a revised 63.8 in March and better than the consensus expectation, which was 64.4.”

"Consumers' short-term outlook improved slightly, suggesting that the uncertainty expressed last month is easing," said Lynn Franco, director of The Conference Board Consumer Research Center.

According to TheStreet.com, “While expectations among consumers that business conditions will improve over the next six months declined to 18.8% from 20.8%, those anticipating business conditions to worsen decreased to 14.2% from 15.5%.”

Published on: April 27, 2011

The New York Times reports on how a variety of global phenomena - natural disasters, geopolitical shifts, global famine, war, changing economic priorities - “are conspiring to shake the confidence” of people for whom the dinner table, and the constant availability of nutritious, affordable food, has always been both a physical and spiritual solace.

And the Wall Street Journal reports on how commodity prices are forcing up the cost of things like diapers, baby wipes, trash bags, salad dressings, and coffee.

"When you look across almost every category out there you are seeing the impact of higher commodity costs show up and higher selling prices for everything," Kimberly-Clark CEO Thomas Falk said on a conference call earlier this week.

Published on: April 27, 2011

MarketWatch reports that Kroger CEO Dave Dillon said this week that “rising gasoline prices will work in its favor, as the grocery-store chain continues gaining market share despite price increases.”

"Our net belief on gas prices is that if they go up, it will change behavior, and as it changes behavior, that it's generally in our favor,” Dillon said, noting that the company’s aggressive stance on private label will help it attract price-conscious shoppers.

According to the story, “During 2010, Kroger's overall market share increased by approximately 0.8 percentage point, or 80 basis points, according to Nielsen Homescan Data. Since 2007, it's share has grown by about 1.5 percentage points, or 150 basis points. ‘It illustrates that not only is Kroger growing bigger among traditional grocers, but we are also gaining ground in the larger retail market for grocery and consumable items, which includes many nontraditional competitors,’ Dillon said.

“Kroger is using customer loyalty cards, which are held by 85% of households in markets where its stores are present, to give the chain insight into shopping behavior. The data help the chain boost sales by allowing it know how much of its store should be comprised of each tier: generic label, brand name, and superior options.”

Published on: April 27, 2011

The Wall Street Journal reports that a “longstanding marketing adage,” that women control 80 percent of household spending in the US, may not be all that it is cracked up to be.

According to the story, “as with many oft-repeated statistics, no one is sure where it originated ... in addition to having murky origins, the number appear to be wrong. Several recent surveys suggest that men have nearly equal say on spending, and that when men and women live together, both participate in spending decisions. In a survey conducted last year of nearly 4,000 Americans 16 and older by Futures Co., a London consulting firm, just 37% of women said they have primary responsibility for shopping decisions in their household, while 85% said they have primary or shared responsibility. The respective figures for men were similar: 31% and 84%.”

At the other end of the spectrum is a 2008 survey conducted by the Boston Consulting Group that “asked women to complete an online questionnaire that asked what percentage of household spending they control or influence. Their average answer in the U.S. was 73%. While that number was the one made public, the researchers also conducted an unpublished survey of men, who on average said they control or influence 61% of spending.

“In other words, both men and women are claiming to control the majority of spending decisions. That is partly explained by the millions of adults who don't live with another adult and who presumably make all their own spending decisions. But it also shows that two or more people can influence a purchasing decision, or think that they can.”

Published on: April 27, 2011

The Wall Street Journal reports that Walmart CEO Mike Duke, while defining the company’s international business as “the real growth engine of our company,” said yesterday that boosting US same-store sales is “a critical priority.” And while he said he didn’t know when the numbers will turn around, Duke said that the company was getting “traction.”

According to the story, “The company's re-emphasis on having the lowest prices and growing its merchandise assortment after curtailing offerings in some categories are helping to make a difference, Duke said. The company has the majority of its planned food offerings in place and its general merchandise assortment is expected to be almost complete by the third quarter ... Duke said.

“Wal-Mart, which gets the lion's share of its almost $420 billion in annual sales from U.S. stores, also wants to be known as a place to get new and innovative products from its suppliers, another potential draw, Duke said.

“At the same time, Duke noted that Wal-Mart's U.S. operations remain challenged, by competition, a loss of customers, inflation and higher energy prices. ‘When you lose a customer's shopping trip or you lose some spending of the customers, it takes time to get it back,’ Duke said.”

Published on: April 27, 2011

HealthDay News writes about a new report from the American Heart Association (AHA) establishing “an ambitious set of goals for reducing deaths from heart attack, stroke and coronary heart disease.

“The goals go further than just setting targets for limiting death and illness, however. They place even greater emphasis on prevention, calling for behavioral change that could benefit overall public health, if successful.”

The seven goals, called “Life’s Simple Seven,” are:

• Get active, with at least 150 minutes of moderate intensity exercise or 75 minutes of vigorous intensity exercise each week.

• Keep your total cholesterol lower than 200 milligrams per deciliter.

• Eat better, with more fruits, vegetables, fish and gains - and less fat and sodium - in your diet.

• Keep your blood pressure below 120/80.

• Keep your weight under control, with a body mass index below 25.

• Reduce blood sugar; fasting blood glucose should be less than 100 mg/dL.

• Don’t smoke.

The challenge, experts say, is that a lot of industries and companies spend millions of dollars selling products that work against - or at least do not promote - these goals. The public health establishment, it is suggested, has to figure out how to be equally effective in promoting its goals.

Published on: April 27, 2011

USA Today has an interview with Marc Freedman, author of a new book entitled “The Big Shift: Navigating The New Stage Beyond Midlife,” in which he ponders what happens beyond the midlife crisis.

Freedman - CEO and founder of Civic Ventures, a think tank on Boomers, work and
social purpose - was inspired to write the book after a unique hotel experience - he presented his AARP card top get a senior discount while simultaneously asking for a crib to use for his baby son. He was, the story goes, “facing an identity crisis. He’d been working hard for 25 years, had been through a health crisis, and was tired. At the same time, he surmised he would probably work another 25 years or so in the second half of his adult life.”

Freedman has defined this period as “the Encore Stage.”

““The surge of people into this new stage of life is one of the most important social phenomena of the new century,” Freedman writes. “Never before have so many people had so much experience and the time and the capacity to do something significant with it ... “As we confront significant challenges in areas like education, the environment and health care, this windfall of talent could help carry us toward a new generation of solutions.”

Published on: April 27, 2011

• GlobeSt.com reports that Supervalu “plans to increase its value footprint with value division Save-A-Lot by 160 new stores this year.”

• USA Today reports that Starbucks has jumped ahead of both Burger King and Wendy’s to become the nation’s third-largest chain restaurant in domestic sales. McDonald’s and Subway remain number one and two, respectively.


• The Hartford Courant reports that Borders Group “is seeking more time to decide whether to renew or reject leases at 92 Borders stores nationwide ... Borders will be evaluating the performance of the stores whose leases are under review.”

Borders has been in bankruptcy protection since February, and needs permission of the court supervising its financial affairs in order to delay making lease decisions.

• Ahold-owned Giant Food Stores and Martin’s Food Markets said yesterday that they have donated more than $1.85 million this year to 1,872 public and private schools through its A+ School Rewards Program; since 2005, the companies said, donations have totaled $10 million.

Published on: April 27, 2011

• Kroger has named Keith Dailey, former communications director for Ohio Gov. Ted Strickland, to be its new spokesman and director of corporate communications.

Published on: April 27, 2011

Got the following email responding to my criticisms of loyalty card programs - like Starbucks’ and CVS’s - that make people bring in coupons to redeem their rewards instead of just applying them automatically to purchases made using the cards:

The problem with applying a discount to a card is that you are giving discounts to someone who is more likely to stop in and pay full price regardless.  Secondly, the digital coupon assures nearly 100% redemption.  Most marketers still count on "slippage" to make promotional programs affordable.   Finally, it does nothing to encourage non-loyal potential customers to stop in and experience a coffee trial.  Finally, after all is said and done, the coupon at home serves as an advertisement for the shop.  Whether someone redeems or not is open to question but minimally, they saw my ad and are now aware of some product, service, or message I want to share.

It's hard to make an informed comment regarding the promotional program unless you know the objective.

I understand the objective, and I think I’ve said over and over that retailers like these coupon-oriented programs because there tends to be a low redemption rate.

Such programs are retailer-centric, not shopper-centric. And I firmly believe that in the long run, with the next generation of consumers trained to believe in a paperless society, such an approach will be seen to be anachronistic. And annoying.



On another subject, one MNB user wrote:

Mixing booze with energy drinks is definitely a bad concoction.

I work in a liquor store and see all these young kids, just turned 21, who are out for a quick buzz.  It bothers me to sell to them but I cannot refuse unless I think they are already under the influence.

Here's another potential problem that just hit NYS.....

Cream, a alcohol-infused whipped cream.  Does not need Refrigeration.  Has an aerosol nozzle that looks like a can of whipped cream that you can buy in the dairy case at your local food store.

Comes in 6 flavors.  Selling like hotcakes! $9.99 per can (375 ml).

Has 30 Proof alcohol.  Not controlled by the FDA.  No ingredient panel.  God only knows what is inside!!!

What till some little kid get a chance to spray that on his Jell-O and takes ill........... or worse yet, DIES!

This is a new one on me.

I checked out their website, which has a headline that says ‘Get Whipped,’ and includes the following copy:

Dare to stimulate your senses with the new and refreshing sensory explosion that is CREAM.  Choose from six passionate whipped cream flavors infused with a 30 proof (15% alcohol by volume) kick that propels cocktails and mixed drinks to a whole other level.

A tempting blend of natural and artificial ingredients, CREAM inspires whipped cream flavors like raspberry, cherry, orange, caramel, chocolate, and of course vanilla with a smooth alcohol burst.

Each 375 ML aerosol-dispensed can of CREAM offers endless and palatable possibilities. Imagine topping off your favorite mixed drinks, signature shots, martinis, daiquiris, coffees, and desserts with a sensory infusion like no-other …CREAM.  The crème de la crème confectionery sensation, CREAM offers the simple pleasures of traditional whipped cream with grown-up benefits.

This may be designed for adults, but I wonder how many prom and after-prom parties over the next few weeks will feature this crap. And how many marketers will rub their hands with glee over the sales figures.

Marketers, I guess, who have figured out a way to check their consciences at the door.




Got the following email the other day from MNB user John R. Hurguy about our “Sports Desk” feature:

…a little surprised you didn’t make quick mention of the Mets sweep of the Diamondbacks in today’s section of The MNB Sports Desk.  Just think, if the Mets extend their win streak by 6 more games and the Phillies drop 7,  they would be tied…even perhaps at the top of the NL East.

First of all, I don’t mock the baseball gods. Ever.

Just as I did not mention today that the Mets now have a five-game winning streak.

I have low expectations for this baseball season. If the Mets are interesting and competitive into September, it will be a huge win.

That’s much different from Philadelphia Phillies fans, who know in their hearts that if their team does not win at least 100 games and go to the World Series, the season will be an utter failure.