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    Published on: May 18, 2011

    by Kate McMahon

    The much-hyped sequel to The Hangover opening next week is certain to be a box office smash.

    What’s less certain is whether 7-Eleven’s promotional tie-in campaign with The Hangover Part II will be hailed as smart marketing or condemned as irresponsibly promoting reckless drinking.

    Sure, the morning after an evening of debauchery is entertaining on screen, but should the nation’s largest convenience store chain - and the nation’s third-largest purveyor of beer - be linking its signature products to alcohol-induced blackouts? Seems like risky business - literally - to me.

    I must confess, I thought the original Hangover was a riot. Judging from the trailer, the sequel, which brings the bachelor buddy binge to Bangkok, promises to push the outrage envelope even further.

    That’s good for an R-rated comedy. But the question is whether it is risky for a mainstream company, retailer or service provider to be associated with it.

    Announcing the promotion, 7-Eleven’s news release trumpets:

    “‘The Hangover Part II’ fans can bounce back from their wild nights with 7-Eleven in-store specials, exclusive online content and a chance to win a trip to Las Vegas!

    The company concedes it “can’t changed what happened the night before” but certainly seems to celebrate the notion that lost evenings are laughing matters.

    Not exactly the message that most parents of teenagers/young adults want to spread. And it concerns me that this promotion will particularly appeal to teenage boys who aren’t even old enough to drink legally.

    The in-store promotions, which began May 2, include five Super Big Gulp refillable cups featuring the movie’s “wolfpack” of characters. There is also a mobile scavenger hunt, using a SCVNGR app for iPhones and Droids, in which users “check in” at stores, complete tasks and amass points for prizes and a chance at the Vegas trip.

    For the uninitiated, a key plot point in both the original Hangover and the sequel is the buddy who gets “lost” along the way. 7-Eleven notes that “you don’t need to misplace anyone” to participate in the interactive game.

    The “lost evening” really comes into play on 7-Eleven’s Facebook Page, where users can send “Get Well Cards” to their friends the next morning. For example:

    “Remember Last Night? If you forgot what happened I’m here to remind you.”

    “Last night got a little out of control. Fortunately, I know where you can find a breakfast sandwich. And your dignity.”

    Noting that “everyone knows that the morning after calls for some serious refueling” – 7-Eleven is offering a breakfast sandwich and coffee special for $3.

    I’m no prude. I’m all for a raucous comedy on-screen, but find it hard to believe that it is good business to publicly make light of extreme drunkenness. I can’t shake the feeling that 7-Eleven is taking a risk here, and that some bad publicity linked to its promotion could end up giving the c-store chain its own hangover, and it’ll take more than a few aspirin to make it go away.

    Comments? Send me an email at .
    KC's View:

    Published on: May 18, 2011

    by Kevin Coupe

    In the wake of the story this week looking at whether Walmart is trying to recapture its “made in the USA” roots comes this this piece from Bloomberg:

    “Ten years after adopting the policy, Notre Dame remains the only major U.S. university that forbids license holders such as Adidas AG to put the school logo on any product from China, according to groups that track college merchandising.

    “Notre Dame prohibits the goods because China, the top source of U.S. imports, doesn’t permit independent labor unions, according to a college policy document. The ban is attracting fresh attention from Washington, D.C., lawmakers who say China has begun a renewed crackdown on dissidents.”

    According to the story, “Notre Dame said its policy on Chinese products is tied to workers’ conditions in the world’s most populous nation. A standards code adopted by the Catholic university in 1997 requires freedom of association and the ‘right for workers to organize and form independent labor unions of their own choosing.’ It implemented the ban on Chinese products four years later.

    “A human rights report released by the U.S. State Department in April reinforced the university’s position, concluding that Chinese law ‘does not provide for freedom of association, as workers were not free to organize or join unions of their own choosing’.”

    We’re talking serious bucks here. The story notes that college-branded products are a $4.3 billion-a-year business, and that Notre Dame ranks eleventh in licensing revenue among almost 200 colleges.” And the prohibition does have other implications, as Bloomberg reports that “Notre Dame’s requirements slow the introduction of products by about a year or result in higher prices because of steeper shipping costs or more convoluted transport channels.”

    But in this case, country of origin requirements isn’t just a marketing initiative. It’s tied to a belief system, and enforced, even when it is inconvenient. And that has a certain ethical power driven by authenticity.

    That’s an eye-opener. And, by the way, thanks to the MNB reader who saw this piece and forwarded it to me.
    KC's View:

    Published on: May 18, 2011

    The Wall Street Journal reports that Kroger CFO Mike Schlotman said this week at an investors conference that while his company was open to moving into areas where it does not currently operate, it has no immediate plans to do so.

    "There's a myth out there that we have a map of the United States with big X's over states that we won't go into. That doesn't exist," Schlotman said, adding, "There is nothing in our three-to-five year time horizon that requires us to either make an acquisition or enter a new geography."
    KC's View:
    No interest in Shaw’s? A&P?


    Published on: May 18, 2011

    The St. Petersburg Times reports that Publix Supermarkets is shutting down the 40 Little Clinics that were operating in its stores, and will devote the space to other purposes.

    According to the story, “Solera Capital, a New York private investment fund that last year sold the rest of its Little Clinic network in other states to Kroger, said it is exploring its next step for Florida. Publix decided to terminate the leases to ‘focus on its core food and pharmacy’ businesses.”
    KC's View:
    I’m a little surprised by this, since I’ve generally felt that the link between good eating and good health can effectively be underlined by an effective in-store health clinic. And I would have thought that the combination would have been especially potent in Florida.

    Published on: May 18, 2011

    The Wall Street Journal reports that “more than 550 health professionals and organizations have signed a letter to McDonald's Corp. asking the maker of Happy Meals to stop marketing junk food to kids and retire Ronald McDonald.

    “The letter, slated to run in the form of full-page ads in six metropolitan newspapers around the country on Wednesday, acknowledges that ‘the contributors to today's (health) epidemic are manifold and a broad societal response is required. But marketing can no longer be ignored as a significant part of this massive problem’.”

    The campaign is being coordinated by by the nonprofit watchdog group Corporate Accountability International.
    KC's View:
    Readers of MNB will know that I am no fan of McDonald’s ... but there is a part of me that thinks that this is too much, or at least not the real problem. It is my job as a parent to make these decisions, to teach my kids to understand the often vast difference between marketing messages and the truth, and to help them understand the notion of personal responsibility. Sure, force McDonald’s to be completely transparent about what is in the products they serve. But I’m not sure that retiring Ronald McDonald is the answer to all society’s ills.

    Published on: May 18, 2011

    The Consumerist has an interview with founder Jeff Bezos in which he maintains that customer service, done right, has a return on investment:

    “I've always believed that,” Bezos says. “I broadened it to Customer Experience. It's just our internal lexicon. We think of Customer Service as a subset of Customer Experience. And Customer Service is on the phone or on email or chat or however you're helping customers.”

    Indeed, Bezos says that the company’s acquisition of has been helpful in this regard. “I mean, the reason we bought Zappos is because they do things differently from Amazon in some cases, but we're both very customer-focused companies.,” he says. :And so, you know, that was the whole calculus on, ‘Let's hook up these companies’ ... It's been smooth mostly because we've left them alone. That's one way to be sure to make things go quite smoothly.”
    KC's View:

    Published on: May 18, 2011

    • The Dallas Business Journal reports that Walmart plans to convert two area units - in Flower Mound and Frisco - that used to be Albertsons supermarkets into Neighborhood Market grocery stores.
    KC's View:

    Published on: May 18, 2011

    The Washington Post reports that a new study from the Harvard School of Public Health suggests that “men who regularly drink coffee appear to be less likely to be diagnosed with prostate cancer, especially the most lethal kind.”

    According to the study, “The men who consumed the most coffee, which was defined as six or more cups every day, were nearly 20 percent less likely to develop any form of prostate cancer ... The heavy coffee drinkers were also 60 percent less likely to be diagnosed with a lethal prostate tumor. Those who drank between one and three cups a day were 30 percent less likely to develop a lethal case.

    “The risk was cut regardless of whether the men drank decaffeinated or regular coffee, the researchers reported.”
    KC's View:
    Considering how much coffee I consume each morning, I love stories like this one. Between the coffee in the morning and the red wine at night, I like to think that I’m self-medicating in all the right ways...

    Published on: May 18, 2011

    Crain’s New York Business reports that Target Corp. and the United Food and Commercial Workers (UFCW) union “have settled a dispute about which workers may cast ballots in a union election at the retailer's Valley Stream, N.Y., store, paving the way for the National Labor Relations Board to schedule the vote.

    “The election next month will apparently be the first at a Target store since 1990, when a union drive failed at a Detroit store. It will be watched closely by the company and other big-box retailers, who have long fought to keep unions out of their stores. No Target stores are unionized.”

    • Tesco-owned Fresh & Easy Neighborhood Markets in the western US announced that it is expanding its range of gluten-free products and creating additional displays to highlight them in stores. Gluten-free items have always been among the most frequently requested products by customers, the company said, and this builds on its 16-month old effort to introduce more gluten-free items, create a labeling system for the products and add a list of all gluten-free products on its website.

    Fresh & Easy also noted that it has partnered with the Celiac Disease Foundation to highlight this month as Celiac Disease Awareness month. As more and more people are diagnosed with celiac disease, or choosing a gluten-free lifestyle, Fresh & Easy is offering itself as a neighborhood solution for people who have a very difficult time finding the foods they want and need.
    KC's View:

    Published on: May 18, 2011

    • The Financial Times reports that former Tesco CEO Sir Terry Leahy “is to become a part-time senior adviser to Clayton Dubilier & Rice, the US private equity firm, his first big corporate role since stepping down as chief executive of Tesco.”

    He joins some heavy hitters at the firm, including former GEO CEO Jack Welch and former Procter & Gamble CEO A.G. Lafley.
    KC's View:

    Published on: May 18, 2011

    Harmon Killbrew, the slugger who hit 573 home runs (11th on the all-time list) for the Washington Senators, Minnesota Twins and Kansas City Royals during a 22 year career, has passed away after a five-month battle with esophagal cancer. He was 74.
    KC's View:

    Published on: May 18, 2011

    We continue to get reaction to Friday’s story about Supervalu’s announcement that Bill Shaner, a 27-year company veteran who has been running its Save-A-Lot division since 2006, is leaving the company, to be replaced by Santiago Roces, most recently a senior vice president and general manager at Walmart. Craig Herkert, the Supervalu CEO who engineered the change, also is a former Walmart executive.

    One MNB user wrote:

    I'm not exactly sure where to start on this subject.  I find it very interesting to see the reactions/responses to this Save-a-Lot leadership change.  It seems to be quite harsh and at least in some aspects somewhat over reactive.   This kind of change happens all the time in today’s corporate world.  I would have never guessed so many people thought the complete success of this company was solely in the hands of Bill Shaner.  What I think is this change has hit a personal nerve with a lot of people in Save-a-Lot.

    I’ve been in the grocery store business for over 20 years and I’ve been involved in this type of fundamental management change in an existing company more than once.   Save-a-Lot has been the one area of Supervalu that was, until about 2 years ago, left unchanged.  As a wholly owned subsidiary of Supervalu, Save-a-Lot was allowed to go about their business as they have for the last 15+ years.  Then the decision to expand was made and everyone’s eyes were on this ball!  New people were brought into the existing business and what was once a company that was operated and managed much like a family owned business was starting to resemble a more prototypical corporate entity.  I know from personal experience many of the long time Save-a Lot associates (at all levels) resent the “interference” from the parent company and the infusion of new people from the outside whether it be from Supervalu or Wal-mart.

    In the past, everything went through the St. Louis corporate office.  All decisions, all marketing strategies, billings, invoicing, etc.  Now, Supervalu needed people all over the country/company working on the expansion plans for Save-a-Lot if they were expected to make it work.   The Save-a-Lot head quarters team, the Sr. VPs & general associates started to feel the business slip out of their “control” and into a  to a much broader array of personnel.  It has taken a lot of people out of their comfort zone.  I think this move was the coup de gras for the way it was at Save-a-Lot and the definitive start to the way it’s going to be. 

    Bill Shaner is a good man and had a good grasp of the Save-a-Lot business model.  I believe he did a very good job during his tenure at Save-a-Lot but, I'm going to speculate this is more than a “desperate move” by Craig Herkert to save his job.  I suppose we’ll have to see what happens in the next 1-2 years to see if this was a good move.

    PS - I find it interesting that everyone refers to Craig Herkert as a “Wal-mart Guy” when he actually spend 23 years with Albertsons and American Stores. His first job was actually at Jewel-Osco as a teenager and held positions including president of ACME MARKETS and executive vice president of Marketing during that time.

    Another MNB user wrote:

    As a long time SV employee who remembers the good days, I would like to weigh in on the current situation. 

    I am not defending anyone, but Bill Shaner was no Saint.  Many good people have met the same fate at his hands as he met at the hands of Herkert.

    Many of your observations are correct.  Herkert never has explanations for his actions, even to the SV employee base.  He has been in place for nearly two years, and if he has a plan for our company, the rank and file have no idea what it is.  Like store sales continue to fall, most Banners are losing market share in primary markets, every down-turn results in more job losses yet we are now expected to "accept" another Walmart Executive to manage forward a company which is supposedly the "focus" of our company growth.  Mr Herkert has lost "the team."  We hope the day comes (and soon) when our Board of Directors receives the wake-up call.  This company has been too good for too long to be lead down this path.

    There’s a lot of history at work here, as this email points out:

    When Supervalu and Wetterau announced a “merger”, it was not. 

    I heard the words “remember WE bought YOU” at a few meetings as well as from others who were fine Wetterau employees.

    Supervalu folks did at will what they wanted, and seemed to have little consideration, for Wetterau values, employees and their customers.

    Bill Shaner took over for someone that was a Wetterau employee, I believe.

    At times it appeared that Supervalu people in positions were ruthless in how they dealt with Wetterau employees and their careers.

    Now the table seems turned and they do not like it!?! Hard for many to feel bad.

    Just to return to the point I was trying to make yesterday...

    On the one hand, I feel bad for Bill Shaner. He puts in 27 years with the company, runs this division for some six years, and suddenly he is supplanted. Doesn’t seem right.

    On the other hand, to be perfectly fair, if CEO Craig Herkert really believes that Save-A-Lot is the engine that is going to drive Supervalu, he’s certainly entitled to bring in his own people to implement his vision. If you are going to go to war, you go with the people you know.

    The problem seems largely about communication - the emails make clear that whatever Herkert’s vision is, he is not communicating it effectively.

    In some ways, this reminds me of the contretemps taking place with the New York Yankees these days. Longtime catcher Jorge Posada, who is currently a designated hitter with a low batting average, was told last week that he was going to be batting ninth ... and he took it so badly that he pulled himself out of the lineup. Which is unforgivable. That said, I can’t help but feel that he could have been managed better, that the situation have been handled more diplomatically. It’s all about communication.
    KC's View: