retail news in context, analysis with attitude

Published on: May 4, 2011

by Kate McMahon

When the final tally at the gas pump hit $76.18, I thought it time to reconsider my multi-store shopping habits. When the afternoon mail included a 30 percent off coupon and free overnight shipping from Soap.com, I knew it was time for a comparison shopping column.

We here at MNB view each retail experience as research as well as necessity, looking for innovation, trends and a potential business “takeaway” while filling our shopping carts – online and in the store.

I enjoy the challenge of smart shopping - utilizing coupons, private label brands, loyalty programs and Costco runs to get the job done. But as gasoline prices skyrocket, reaching $4.59 a gallon for regular in my suburban Connecticut town, making an extra 16-mile trip to Walmart to save on laundry detergent or paper towels seems fiscally foolish (and costs $3.26 in gas).

Granted, with a husband who travels and two teenage daughters away at school, my regular shopping list is a fraction of what it was 10 years ago. So I tried to approach this exercise from the mindset of working parents with a house full of hungry youngsters and a lot of laundry. I chose the most basic of non-food staples: detergent, paper towels, toilet paper, toothpaste, and garbage bags in my go-to brands. (And with two girls, the never-ending demand for shampoo and conditioner.)

The retailers: Soap.com, Walmart, ShopRite, CVS, Food Emporium (the closest supermarket to my home) and Amazon.com (utilizing the Subscribe and Save program that Content Guy uses and often touts on MNB). Well, an apples-to-apples comparison proved frustrating, as only two products - Crest Pro-Health 6 ounce size and Tide High Efficiency100-ounce detergent - were available in the same size at all six sources.

Not surprisingly, Walmart had the lowest prices on four of six products, but did not carry the Bounty Select-a-Size paper towels or the Charmin Ultra Mega-Roll that I typically purchase.

The Crest toothpaste ranged from a low of $3.29 at ShopRite, $3.47 at Walmart, $3.80 at Soap.com, $3.90 at Amazon.com (sold as a four-pack for $15.62), $3.99 at Food Emporium and $5.49 at CVS.

The Tide detergent prices were as follows: $11.97 on special at Walmart; $14.82 at Amazon.com when purchased as a four-pack for $59.29; $15.95 at Soap.com; $15.99 at Food Emporium and ShopRite; and $17.99 at CVS.

Here are the prices on another staple, a 75-ounce box of Cascade powder detergent: $5.50 at Soap.com; $6.19 at Shoprite; $6.27 at Walmart; $8.99 at Food Emporium; and $10.20 on Amazon.com.

Certainly, internet sites and smartphone apps are making price checking - both in store and on-line - much easier and faster for consumers. And cyber-shopping becomes even more attractive when shipping is free and you can order your everyday products from your desk or iPhone.

And that brings us back to Soap.com, which along with Diapers.com and BeautyBar.com, is operated by Quidsi. Regulators just gave final approval to Amazon’s $500 million purchase of Quidsi, effective in December, expanding the online behemoth’s e-commerce reach.

Soap.com offers 25,000 health, beauty and household essentials. After the introductory special, there is free shipping on all subsequent orders over $39. And if you order by 6 p.m., Soap.com promises free overnight delivery for 70% of the U.S. There is even a new iPhone app for Soap.com and Diapers.com with a mobile scanner, and it allows users to complete 95 percent of their purchases even where there is limited service. So, a working mom could order detergent, diapers and toothpaste while taking the train home and have the order delivered the next day, for free – freeing up more time for family and herself.

What does this mean for traditional retailers? In order to compete, the need to engage with customers and make their shopping experience worthwhile is paramount. Customer service, effective and relevant loyalty programs and a commitment to quality and innovation are not optional, but mandatory.

Comments? Send me an email at kate@morningnewsbeat.com .

Published on: May 4, 2011

Supervalu announced yesterday a series of strategic moves, including the creation of a new private brand program using the name Essential Everyday, which eventually will replace all of the various private label programs used by the company’s various retail banners. According to the announcement, “With the introduction of the Essential Everyday brand, which will roll-out in phases, the company will be able to realize significant savings through packaging and taking a more national approach to advertising and promotions. The company also plans to expand its Shoppers Value entry price-point private brand line and will be launching or relaunching 80 new items in the coming months.”

In addition, Supervalu plans “the addition of the Save-A-Lot Today brand to its private brand program. The new Save-A-Lot Today brand is an opening price point line with most products priced under $1 to help its value-focused customers stretch their dollars.” Save-A-Lot Today will be carried in the company’s Save-A-Lot hard-discount, limited assortment stores.

CEO Craig Herkert told an investors conference, “"We are focused on acting as one company, working toward a common goal of delivering increased value to all of our customers and meeting their needs neighborhood by neighborhood."

Supervalu said that it plans to continue its “national expansion of Save-A-Lot ... growing Save-A-Lot by 160 new stores in fiscal 2012, keeping the company on track to reach its goal of building a network of more than 2,400 stores by 2015.” The company noted that the “Save-A-Lot portfolio includes a blend of 30 percent corporate-owned and 70 percent licensee-operated stores. This multiple-ownership model supports the company's aggressive growth strategy, while helping it conserve capital.”

At the meeting, the company's senior management team outlined other initiatives the company is undertaking “to reverse sales declines at its traditional retail banners and get them back on the path to growth.” The efforts underway include:

• “Sharpening the traditional retail banners' value proposition through a fair everyday pricing plus promotion strategy.”

• “Enhancing fresh offerings, which includes providing customers with more locally grown produce, introducing a new ‘Just Baked’ program to ensure the availability of fresh-baked breads and rolls throughout the day, and improving deli department offerings with new products like grilled chicken.”

• “Developing and maintaining a portfolio of compelling private brand products that differentiate our retail outlets from our competition and provide more competitive value for customers.”

• “Better matching store assortment and format to the needs of each neighborhood.”

• “Providing a more hassle-free experience both in-store and online.”

Published on: May 4, 2011

The Oregonian reports that Walmart, which currently has four stores in the Portland, Oregon, area, “commissioned an economic analysis that looked at building 17 more. The analysis considers a range of stores, from its traditional full-service behemoths to smaller grocery-store type concepts, in the tri-county area -- including eight in Portland proper.

“While the sheer number of stores is mind-boggling to some, the fact Wal-Mart is eyeing the region with such intensity is not. Federal, state and local agencies have started offering incentives to grocers to build in under-served communities. And it comes as competition has amped up nationwide between Wal-Mart and Target Corp., which are both looking to dive into an area they've only dabbled in: Fresh food.”

The expansion in Portland would give Walmart about the same number of stores in the market as Fred Meyer.

The Oregonian notes that “while Wal-Mart has famously clashed over potential locations with Portland leaders and shoppers in the past, its economic study was, in part, an answer to a call from the Portland Development Commission. The agency had sought retailers' ideas on how to provide certain neighborhoods with more healthful and affordable food.”

Tom Gillpatrick, retail marketing professor at Portland State University as well as executive director of PSU’s Food Industry Leadership Center (FILC), tells the Oregonian: “It's one of those cases where you have to let the consumer decide and it's going to be a food fight ... This will probably put some downward pressure on price at a time when food prices overall are going up.”

Published on: May 4, 2011

Indianapolis-based Marsh Supermarkets announced that, as expected, it has hired Joseph Kelley, most recently the executive vice president of New York-based Price Chopper Supermarkets, to be its new chairman/president/CEO.

Kelley succeeds Frank Lazaran, who resigned from the post after five years in the job.

The likely appointment of Kelley was first noted on MNB on April 13.

Published on: May 4, 2011

by Kevin Coupe

Yet another example of how consumers are influencing other consumers comes from the New York Times, which writes about as new smart phone application called Roadify.”

In this case, the consumers are commuters.

According to the story, Roadify “aims to use the wisdom of the crowd to inform drivers and transit riders ... It was originally a text-messaging group that let drivers in Park Slope, Brooklyn, announce when they were leaving a parking spot. Last year, several developers expanded on that idea, creating an app to swap information about driving and public transportation. Roadify also includes subway and bus timetables and scheduled service changes, and the developers are gradually adding more ways for users to share information about their commutes.”

The application is still a work in progress. Not enough people use it for Roadify to have reached critical mass, and the database remains incomplete.

But evolution takes time. The larger point is that consumers - and commuters - are being empowered to a greater extent with almost every passing day. The balance of power is changing, the role of happenstance is getting reduced with expanding vats of information, and marketers need to pay attention.

It’s an Eye-Opener.

Published on: May 4, 2011

The Wall Street Journal this morning reports that one of seven Americans - or 14.3 percent - are using food stamps.

The positive news is that this represented a plateau of sorts - the US Department of Agriculture (USDA) said that there was no growth is food stamp usage last February, the most recent month for which data is available ... though the recession clearly has had an impact, since this number is 11 percent higher than it was in February 2010.

Published on: May 4, 2011

There is a report out of Texas this morning that Trader Joe’s is looking for store sites in both the Dallas-Fort Worth and Houston markets.

"We're excited about bringing Trader Joe's to the wonderful cities, towns and neighborhoods in and around Dallas-Fort Worth, Houston and beyond," says Alison Mochizuki, a chain spokeswoman. "We are actively looking for sites and we're anxious to identify some great locations and begin hiring crew members."

Published on: May 4, 2011

CNN reports that “Taylor Farms Pacific, Inc., a California-based food supplier for six retail chain stores, has announced the recall of grape tomatoes produced by a grower who said the vegetables might be contaminated with salmonella.

“The recall applies to 29 brand-packaged salads sold at Albertson's, Raley's, Sam's Club, Savemart, Signature Cafe and Wal-Mart, the company said in a statement ... The affected products have expiration dates ranging from April 27 to May 9, according to the news release.

“The recall applies to 13 states including Arizona, California, Colorado, Idaho, Montana, Nebraska, New Mexico, Nevada, Oregon, South Dakota, Utah, Washington and Wyoming.”

Published on: May 4, 2011

Interesting report from Marketing Daily about a new study from Williams-Helde Marketing Communications, entitled "Understanding the Active Healthy Lifestyle," which suggests that “with all the attention that is lavished on America's obesity epidemic, it's easy to forget the 77 million consumers who are currently maxing their workouts - a group that tends to be older, affluent, and decidedly anti-advertising.”

According to the report, there may be too little attention paid to this demographic - people who exercise consistently, try to eat right, are dedicated and frequent Internet users, and have a strong “personal responsibility” ethic.

"These individuals are willing to take full responsibility for their decisions, their health, their actions and the outcomes of their experiences," the report says. "Their belief in personal accountability is expressed through their behavior: Actively gathering information before making decisions; waking up early to prepare healthy meals and work out; and living active social lives to stay balanced and happy. And in turn, it's these positive behaviors that lead to them being highly influential with other consumers,” often via social media and other technologically driven media.

Published on: May 4, 2011

• In New Orleans, the Times Picayune reports that the United Fresh Produce Association has donated salad bars to 32 schools around the city, part of the association’s broader fund raising push that is designed to “provide salad bars for 6,000 schools across the U.S. over the next three years.”

As the paper notes, “a 2007 study by the National Initiative for Children's Healthcare Quality pegged the obesity rate among children age 10 though 17 at 36 percent in Louisiana, compared with a national average of 31 percent. Only five other states had a higher rate.”

• Reuters reports that “Ralcorp Holdings Inc said on Sunday that its board of directors rejected the unsolicited proposal it received from a third party in March, after a media report that ConAgra Foods Inc had bid for the private-label food maker ... On Friday, cable television channel CNBC reported that ConAgra had made an unsolicited bid for St Louis-based Ralcorp and that talks were ‘no longer ongoing’.”

Published on: May 4, 2011

Michael Sansolo had a wonderful column yesterday about the discipline and organizational loyalty shown by Pentagon workers who did not exult publicly in the death of Osama bin Laden, which, he suggested, teaches us an important business lesson:

It reminds us that every person who works for us represents us every day. That even the lowest ranking person in our company impacts our image and our ability to get the job done. It reminds us that everyone needs to understand the power of common purpose and that the job only gets done when all of us give it the right effort. That takes communication, discipline and effort.

One MNb user responded:

As the parent of a U.S. Marine, it brings a chill and a tear at the same time, to think of the honor of all of our military men and women and the jobs they do every day for each and every U.S citizen.  You said it with solemn dignity, the absolute amazing effort that goes into an effort such as the one accomplished by our own Navy Seals, and I thank you for the acknowledgement.  Unless you live with a service person, you can’t imagine the discipline that they have to live by.  And I truly mean “live”, as it is a matter of life and death in the truest sense of the words.   I’m not sure that I’m even making sense, as I’m so emotional about the whole event, knowing that my son will deploy to that very area of the world in just a few short months.

With that said, you are so very on-target, as usual, in that every person in our organization is so valuable, from our Executive VP’s to the utility worker who smiled at me as I emptied my cart and she offered to take it from me on a windy cold day just last week.  Each of us has the ability to make a person’s day, to make them feel value, to make someone else feel big - or small, with just a glance or a few words. 

Thank you for noticing that we all make a difference, whether you’re the top person or the bottom.  We all matter.  But, in the opinion of a Marine mom – maybe our service men and women, who safely hold our world in their collective hands, matter just a tiny, little bit more.

Well said by all.




MNB took note yesterday of an interesting trend - the slight decline in people who own television sets, which is taking place a) because economic concerns have made it harder to own the new digital TV sets, and b) because there are other options for how to get TV programming.

One MNB user responded:

I myself do have 2 TVs but I got rid of cable TV about a year ago and got a Roku box and a decent HDTV antenna instead. A lot of people don't realize how good DTV reception is now and of course it's free!  I would argue that those of us who watch TV via the Internet are actually more trackable because it is a lot easier to track the number of Internet streams of an episode or movie than it is to track every cable box, satellite receiver, and antenna.  Also, my wife and I end up watching more commercials than when we had cable+DVR since most online sources simply don't let you skip past them. What scares me is the ISPs who are starting to cap home Internet usage presumably to prevent loosing their TV service subscribers.

Another MNB user wrote:

I am part of the 3.3% that have no TV in my house. And, so is my son. Neither of us have landlines or hardwired Internet. We have chosen to opt out not because of any economic reason, but rather, because it adds nothing to our lives. I am very surprised the number of households with no TV is so low. As John Lennon said, "Life is what happens to you while you're busy making other plans"…Our family always felt "Life is what happens to you while you're busy watching TV" and we didn’t feel that was the life we wanted. Sorry marketers!



Responding to a story we had about Walgreen expanding its in-store health testing capabilities, one MNB user wrote:

Walgreen's blood testing may be an okay thing to do BUT when I found out that they were charging 25 to 40% more for my wife's prescription drugs than the Walmart next door...well, that's it for Walgreens ... The only reason we found out about this price issue was the change in insurance coverage when I retired. Eventually the public will discover this and they will then be hurt.

You’re right. Those kinds of differences will hurt Walgreen long-term if they are not resolved.




Finally...I’ve received the following email from MNB user Ken Wagar, which I think is worth posting for lots of reasons ... not least of which is the fact that it may give voice to sentiments held by other MNB users, especially people who are new to our little community:

I love what you do on your blog regarding retail news and analysis. I read your blog daily specifically looking for what your site defines as your purpose which is Retail News in Context and Analysis with Attitude.

On the other hand your preoccupation with wine, restaurants, baseball, Jimmy Buffet (who I love), Spenser novels (which I greatly enjoy) and now the creation and promotion of a wine of the month club, in at least my mind, don’t seem to fit with “Retail News in Context and Analysis with Attitude”

I understand that MorningNewsBeat is a reflection of you, your personality and your likes and dislikes but it seems there should be limits or you begin to morph into all things for all people and therefore lose the focus  that you can bring to today’s exciting retail landscape.

You are talented and knowledgeable enough to develop and produce separate blogs and sites on things like Wine, Books and Authors, Movie reviews and Restaurant reviews and may in fact be able to manage several productive, fun and profitable sites on a variety of topics.

I’m getting confused as to whether MNB is all about retail and analysis thereof or if it is simply all about Kevin and his likes, dislikes and opinions on any and all subjects. You obviously have the right to drive things in any direction you may choose and I certainly understand that retail is influenced by many societal changes and our view needs to be broad, I just want you to know that rather than increasing clarity on the challenges and opportunities that exist at retail MNB seems to be spending more time on topics that are disconnected from the stated purpose of the site.

Just my opinion…..I do look forward to and enjoy those shrinking portions of your comments that have to do with Retail news and analysis.

First of all, thanks for your note.

You make good points, all of which I promise to think about as MNB continues to evolve.  I guess that I might disagree with you on a couple of issues;  for one thing, I tend to restrict my commentary about wine, restaurants, Buffett music and Spenser novels to the Friday "OffBeat" column, which seems like a good way to do it (and one of the columns that gets the most reader reaction).  Yes, I may quote Robert B. Parker or Jimmy Buffett elsewhere from time to time, but I hope the points I'm making are retail-relevant.  Baseball does get mentioned a fair amount, but usually within the context of the "Sports Desk" section.

I guess this is a long way of saying that best I can, I try to do the peripheral stuff in a way that is segmented - if people don't like the "Sports Desk" or "OffBeat" sections, they don't have to read them ... and I am transparent about what they are.

The Wine of the Month Club, to be honest, came about largely because it was something that was requested by readers.  People would ask me where I got many of my wines and I would tell them about the club I belonged to, and they'd ask if I could make it available through MNB.  So I did.  I was trying to be responsive (which is, after all, something that I talk about a lot).  I should note here that I am not making a penny from the club - it is there as a reader service.  (Though if a wine company would like to become an MNB sponsor, I'm more than happy to talk about it.)

Wine, by the way, serves another purpose - it is a great window on smart marketing.  I've long believed that if retailers brought the same level of expertise and engagement to other departments that some do to wine sections, the act of food shopping would be vastly different.  And better.  (Same goes for our discussions of great pizza joints and hamburger stands.  If people in the food business are thinking more about food, and not just focusing on the bottom line, I think I've done them a  service.)

If I have one complaint about some retailers, it is that they are too myopic.  I've met too many people over the years who live and breathe their own businesses, but to the point where they don't, say, visit the Apple Store to see what it is all about.  Don't order groceries from Amazon to see how it works.  Don't go to the movies to see what's popular to their shoppers.  Don't read novels instead of just business books, even though that's a great way to broaden the mind.  Is MNB a traditional approach to business news and commentary?  Nope.  But that's the point.

You are right about MNB being written through the prism of my own life.   This may be appealing to some, and appalling to others.  In essence, one of the ways that I believe that MNB is different is that you know precisely what the point of view is.  (The last site I worked for was so afraid of showing personality that they threatened to fire me;  for better or for worse, it went out of business and we never had to have that particular showdown. Their favorite flavor was and continues to be generic vanilla. I prefer, to overwork the metaphor, Graeter’s Black Raspberry Chip.)

It is not that my POV is universal, but rather than I hope that by being upfront about my POV, it helps people consider their own perspectives, and maybe think differently about business (and other) issues.  Am I right in my belief?  I have no idea ... though the fact that I get between 50 and 100 new subscribers each week, largely because of word of mouth, persuades me that I am onto something.  Is MNB for everybody?  Clearly not.  But that's okay.  My biggest fear is of being so bloodless that there is no difference between me and the competition. I believe in drawing blood. Even if sometimes it is my own.

I wish I were talented enough to write and manage several sites.  But that's not in the cards.  I’m largely a one-man band, MNB is pretty much a full-time job, and that doesn't count the other stuff I do, like speaking at conferences, facilitating corporate retreats, writing freelance columns, and trying to find time to do another book. (Though if someone would like to buy MNB and contract for my services, I’d be happy to reconsider my business plan.)

I'm not complaining. Far from it.  This is almost always fun, and I hope that fun translates into some level of entertainment - as well as illumination - for the MNB community.

In the end, that's my ultimate purpose for MNB - that each day, I provide some kind of news and commentary that, in an entertaining and literate fashion, tells you something you did not know, makes you think about something from a new perspective, and maybe even gets you to laugh or smile or even shake your head because you can't quite believe that I wrote something.  (Not necessarily in that order, by the way.)

Ken, I'm glad you wrote.  I never mind when people challenge my thinking, or make me reconsider what it is I do and how I do it. And even make me explain myself from time to time.