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: May 19, 2011

    by Kevin Coupe

    Content Guy’s Note: Below is a commentary on the same subject as the video piece, but it isn’t word-for-word the same. You can look at both, or is up to you. I look forward to hearing from you.

    Hi, I’m Kevin Coupe and this is FaceTime with the Content Guy.

    There was a new survey out this week from the Pew Research Center that offers some insights into how Americans view the value of a college education. The results are instructive - not just for prospective college students and their parents, but also for employers who will have to deal with changing attitudes toward education.

    The study says that 57 percent of Americans “say the higher education system in the United States fails to provide students with good value for the money they and their families spend. An even larger majority - 75% - says college is too expensive for most Americans to afford. At the same time, however, an overwhelming majority of college graduates - 86% - say that college has been a good investment for them personally.”

    In addition, almost half of those polled said they could not afford to go to college.

    Another interesting finding:

    “While Americans value college, they value character even more. Asked what it takes for a young person to succeed in the world, 61% say a good work ethic is extremely important and 57% say the same about knowing how to get along with people. Just 42% say the same about a college education.”

    This all strikes me as an extraordinary cultural shift - and not a good one. Not for businesses that need educated people that they can develop into leaders, and not for a society that requires educated people to grow and thrive. And especially at a time when much of the rest of the world is putting a premium on higher education.

    Clearly money is an issue here; college is expensive, no doubt about it. I’d be the last one to argue with that - we just finished putting our second kid through college, and we’ll have one more going in September 2012.

    It may be that businesses will need to find ways to help young people get an education, with the understanding that these same young people will then put that education to use in the service of the company for some period of time.

    But I find the notion that so many people are even questioning the value of a college education to be disturbing. Sure, college is supposed to be a place where you gain knowledge and skills that you will be able to put to use in whatever your choice of career happens to be. But it also is supposed to be a place where science majors can learn about Hemingway and Fitzgerald, where literature majors can gain insight into the sciences, and where business majors will learn not just about marketing, but also about ethics and philosophy.

    In other words, it is a place where we are supposed to become educated human beings with a greater understanding of context and perspective. It makes us better people, and people better able to contribute to society and make a difference. It helps us look beyond the short term, and see the bigger picture.

    And somehow, the whole concept of learning has become devalued. Or simply too valuable - or expensive - for many people.

    This won’t be good for business. This won’t be good for society. At a time of great cultural tumult, it strikes me as critical that all of us find ways to address these attitudes, and help find solutions that will serve the greater good.

    If we don’t, it won’t be good for any of us, for any of our business or cultural institutions.

    That’s what is on my mind this Thursday morning. As always, I’d like to hear what is on your mind.
    KC's View:

    Published on: May 19, 2011

    by Kevin Coupe

    USA Today reports that today marks 10 years since the opening of the first Apple Stores, an initiative which helped to define a “new world order” in the retail business.

    "They basically took the old book of retail and threw it out and started over," Apple analyst Gene Munster of Piper Jaffray tells the paper. "The irony of the whole Apple retail story is that nobody believed it could work. Nobody believed a computer maker would make a good computer retailer."

    Among the innovations developed by Apple are a clean and modern steel-and-glass design; wireless point-of-sale devices; the ability for consumers to play with virtually every piece of hardware in the store; “Genius Bars” that provide technical support and access to a wide level of training options; employees who are well-trained and encouraged to speak with customers within two minutes of their entering the store; and managers who get stock-based compensation, which gives them skin in the game. It also helps that Apple is on an amazing run when it comes to creating products - computers, laptops, iPhones, iPods, iPads - that people want and are willing to spend money for, even in tough economic times.

    All of which have created a retailing model that sets the bar high for every other retailer, no matter what they’re selling.

    And here’s the kicker - there is a ton of speculation right now that Apple is planning a “splashy in-store update” of its retail experience ... which would be remarkable since there is almost nothing about the Apple Store experience that seems dated or in need of changing.

    That alone, should almost certainly be an eye-opener. And it is one mark of great retail innovation - not waiting until dust is gathering to do some housecleaning.
    KC's View:

    Published on: May 19, 2011

    Bloomberg BusinessWeek reports that in a conference call about the company’s most recent quarterly results. Bill Simon, president/CEO of Walmart’s US division, made the following comments:

    “The importance of delivering everyday low prices has never been greater, as our customers are consolidating trips due to higher gas prices. Our greatest priority remains to grow (sales at stores open at least a year). Rising gas prices, high unemployment and increasing inflation continue to be the most important issues facing our customers today. One in five Walmart moms lists gasoline as a top expense behind housing and car payments. We continue to be prepared to help her with low prices and broad assortment during this time of uncertainty.

    “The paycheck cycle remains pronounced. During the quarter, we saw continued pressure from ongoing macroeconomic conditions, as customers continued to trade down to opening price points and some private-label products. Our grocery inflation was approximately 1 percent during the quarter, with the greatest impact on perishables.”
    KC's View:
    It is ironic - at precisely the kind of time that you would think that Walmart’s “always low prices” approach would be thriving, the company is thrashing around trying to find the answer to stagnant US same store sales. The question is whether the small, food-oriented stores that it is planning will provide an adequate response to its competitive ennui.

    It must be perplexing for the folks down in Bentonville to read passages such as this one in the Pioneer Press:

    “At Target, shoppers are inching back to prerecession patterns. Consumers do remain wary and high gas prices aren't helping, executives say. Yet for six straight quarters, Target's same-store sales have risen, including a 2 percent gain in the quarter announced Wednesday.

    “But at Walmart, the recession drags on. For eight consecutive quarters, its same-store sales have fallen as America's largest retailer struggles to turn things around.

    “The split reveals the new landscape of the U.S. economy, where hardship still haunts lower-income households - a core Walmart group - even as Target's more middle-class consumers regain their footing.”

    Published on: May 19, 2011

    The recent revelation of a debit card scam at Michaels Stores has given new fuel to banks and other financial services companies that are looking to reverse momentum at the federal level that would impose limits on the transaction fees they can charge for debit card usage, according to a story in the Wall Street Journal. Now, the banks are saying that the scam illustrates not just why high fees are justified - the current average “swipe fee” is 44 cents, and new federal rules would limit it to a 12 cents maximum.

    According to the story, banks say the reduction “doesn't take into account the cost of losses that result from a bank data theft or breach. Customers aren't liable for unauthorized debit transactions; those costs are typically absorbed by the bank that issued the plastic. In a survey, the Fed estimated that industry-wide fraud losses to all parties involved in a debit transaction in 2009 were about $1.4 billion, while roughly $15.7 billion in debit swipe-fee revenue was collected. Now, banks have a handy, real-world example to use in their argument. Industry lobbyists said they have raised the Michaels breach with several lawmakers in recent meetings as they push for legislation delaying the debit-fee rule,” which is scheduled to go into effect on July 21.

    The Journal notes that “the retail industry is pushing back. Retail officials say in many cases banks make merchants cover the cost of fraud incidents. Retailers say they also have invested billions of dollars helping to plug security holes while the banks refuse to take a step that, according to retailers, would make the system far safer: Issuing consumers cards embedded with computer chips, which retailers claim are less vulnerable to fraud than debit cards that require a signature.”

    At the same time, Sen. Jon Tester (D-Montana) has proposed that the July 21 start date should be delayed by 15 months while the Congress does further study into the issue and decides whether it should back off rules that were established as part of the Dodd-Frank financial reforms voted into law last year. This was positioned as a compromise, since Tester has been calling for a 24-month delay.

    However, the Merchants Payment Coalition - which has been fighting for swipe fee reforms - called the new Tester proposal “a giveaway to the country’s biggest banks that views small business owners as collateral damage,” and one that “will cost Main Street merchants and consumers more than $1 billion per month in excessive swipe fees.”
    KC's View:
    I profoundly hope that the Congress is able to look past the dollars being thrown at this issue by the banking business and its lobbyists, and so something right for Americans.

    It seems to me that through both Republican and Democratic administrations, more time an d money has been spent on rescuing and protecting the financial services industry than on common folks who continue to live in a recessionary economy, even as the fat cats enjoy a resurgence in salaries and bonuses. And I’m a little tired of it.

    I also hope that the retailers that have been advocating on behalf of consumers on this issue have some sort of Plan B in case the banks and Tester get their way. If there is a delay in swipe fee regulation, there needs to be some sort of measured response that exposes this travesty for what it is - like enormous signs in retail businesses that explain exactly what the fees are and what they are costing shoppers.

    Published on: May 19, 2011

    The Los Angeles Times reports that labor talks in Southern California have hit a healthcare roadblock.

    According to the story, “On Wednesday, the region’s major grocery chains said they have presented the union representing 62,000 of their workers with an initial proposal for changes to their healthcare coverage -- a proposal the retailers call ‘reasonable’ and union officials describe as ‘gutting.’

    “Albertsons, Ralphs and Vons declined to discuss the proposal in detail on Wednesday. But according to a statement from the three retailers, the health and welfare proposal offers their workers ‘an excellent healthcare plan that allows them to receive comprehensive coverage for themselves and their families.’ But officials of the United Food and Commercial Workers countered that the retailers are pushing to shift as much as 80% of the medical costs to the workers.”
    KC's View:

    Published on: May 19, 2011

    In North Carolina, the News & Observer reports that state legislators will consider a bill that mandate the state Board of Education “to adopt statewide nutritional rules that limit the calories, fat, sugar, and sodium content of the soft drinks and snacks sold on school campuses ... The rules are scheduled to take effect for the 2012 academic year if the legislation passes the General Assembly and is signed into law. Candy and other snacks sold at high school fundraisers after lunch or at extracurricular events would not be restricted.”

    The goal of the bill is to address the 33 percent obesity rate that afflicts the state’s schoolchildren, according to the story. “One out of three North Carolina 10- to 17-year-olds were overweight in 2007, which put the state in the bottom third in the nation, according to a study by the U.S. Department of Health and Human Services. Two-thirds of the state's adults are overweight or obese, a condition that increases the risk of diabetes, heart disease, high blood pressure, and kidney disease.”
    KC's View:

    Published on: May 19, 2011

    • Weis Markets announced that it has launched a redesigned homepage, at, “with more user-friendly navigation and a section containing its social media updates ... (it) compiles all of Weis Markets’ official social media outlets into a single, easy-to-read page. This section gives a quick overview of its latest Facebook posts, with the number of fans and pictures of its fans, as well as the latest tweets and YouTube videos.”

    The changes were made using customer input gather via Facebook and online surveys.

    Full disclosure: Weis Markets uses MyWebGrocer as its provider of digital and online services, and MyWebGrocer is a longtime and valued MNB sponsor.
    KC's View:

    Published on: May 19, 2011

    The Associated Press reports that a retired Wisconsin 57-year-old prison guard named Don Gorske hit a milestone yesterday - he ate his 25,000th Big Mac, “39 years to the day after eating his first ... nine.”

    "I plan on eating Big Macs until I die," Gorske said at a press conference celebrating the achievement. "I have no intentions of changing. It's still my favorite food. Nothing has changed in 39 years. I look forward to it every day."
    KC's View:
    Proof positive, I guess, that some folks will do anything for their 15 minutes of fame.

    This is just disgusting.

    Published on: May 19, 2011

    Reuters reports that the Massachusetts communities of Fall River and New Bedford are moving to ban the sale of a product called “Lazy Cakes,” which are said to be laced with “nearly 8 milligrams of the supplemental sleep aid, which is about 25 times the usual amount prescribed for adults.” The so-called “relaxation brownies,” according to the story, are sold in both food stores and in some nightclubs, but may also have been responsible for sending some kids who tried them to the hospital.

    The towns also say they will push for a statewide ban.

    The story says that “considered a dietary supplement rather than a drug, melatonin is not regulated by the Food and Drug Administration. Doctors say an adult dosage could be dangerous to a child, effectively acting as a strong drug akin to Valium that can cause extreme drowsiness.

    “Reports have emerged of youngsters who sampled Lazy Cakes and were rushed to hospital emergency rooms, where it was extremely difficult to wake them up. In Arizona, a two-year-old boy given a few bites of a relative's treat was hospitalized after becoming withdrawn and falling deeply asleep.”

    Reuters says that “Baked World/HBB, the Memphis-based maker of Lazy Cakes, says it clearly labels each brownie to show it advises consumption by adults only.”

    The brownies are said to be a perfect accompaniment - or antidote to - energy drinks laced with alcohol.
    KC's View:
    The guys who make Lazy Cakes at least didn’t call them “Hash Brownies,” which is probably what those clowns who made the “Cocaine” energy drink would have done.

    I always end up asking myself the same question about these kinds of products - is it possible that the people who devised and manufactured them do not have children, are not parents, and have no sense of responsibility?

    Maybe it is legal to make and sell them. And maybe they have warning labels. And maybe they know that a label that says “adults only” serves as catnip to kids, many of whom will find such a labeled product to be utterly irresistible.

    Legal or not, making this kind of crap just seems utterly irresponsible.

    Published on: May 19, 2011

    • Ahold-owned Giant Food Stores announced that will open the doors of its second convenience store, GIANT To Go, today in Manheim Township, Lancaster County, Pennsylvania. The 4,000 square foot store is said to offer “a number of convenient meal solutions for busy customers and families.,” and is organized as three distinct shopping areas: Meals to Go, Groceries to Go, and Snacks to Go.

    • The Los Angeles Times reports that “General Mills Inc. is buying a controlling stake in yogurt company Yoplait from French investment firm PAI Partners and cooperative dairy group Sodiaal for about $1.15 billion.

    “The acquisition of the world's second-largest yogurt maker will build on General Mills' aim to increase its portfolio of health and wellness products and to expand operations in France, where it already produces several products. The deal also increases the Minneapolis company's stake in yogurt, which it sees as a growing food category worldwide.”

    • Harris Teeter announced that it will donate $215,000 to its food bank partners, including two Raleigh groups – the Food Bank of Central & Eastern North Carolina and the Inter-Faith Food Shuttle.

    Harris Teeter raised the funds during its annual spring golf outing. Proceeds will be divided among 14 of Harris Teeter’s food-bank partner agencies.

    AdWeek reports that Gilt Groupe, the New York-based online discount retailer that sells designer clothing and other luxury goods, is expanding into the “artisanal hard-to-find foods” business with a new site, GiltTaste.

    “On the site’s meat market,” AdWeek writes, “one can select two eight-ounce gold label tenderloin filets from eastern Idaho’s Snake River Farms for $199.00. American Paddlefish California Caviar goes for $222.00. The site also sells cheeses, truffle oils, chocolates, mushrooms, and so on. But unlike Gilt and Jetsetter, the travel vertical, Taste is open to everyone and sells most of its items at full price.

    “Taste is also a culinary magazine, with articles from food writers and chefs. But one of the best parts about it—and this is true of Gilt Groupe’s clothing and travel sites as well—is that it looks so damn good. Gilt Taste might be some of the best food porn on the Net.”
    KC's View:

    Published on: May 19, 2011

    • Tesco announced that it is moving the head of its Japan operations, Michael Fleming, back to the UK to become its group Strategy Director. A replacement for Fleming has not been named, and Tesco CEO Philip Clarke has said that he will not commit any more money or resources there until the division’s performance improves.

    • The Wall Street Journal reports that Hershey Co. CEO David J. West is leaving the company to take the helm at Del Monte Foods Co.
    KC's View:

    Published on: May 19, 2011

    Yesterday, in commenting on Bill Shaner’s tenure at Save-A-Lot, I meant to say that he “runs the division for six years.” But I goofed - I was writing the commentary at 1 am because I had to catch an early flight, and I added an extra letter that completely changed the meaning; it said he “ruins the division for six years.” Which was not at all what I meant.

    I fixed the typo once I got off the plane, but many of you saw it.

    My apologies, especially to Bill Shaner, for the goof.
    KC's View:

    Published on: May 19, 2011

    Got the following email from an MNB user about Supervalu’s decision to make changes at the top at its Save-A-Lot division:

    Interesting comments on the Save-a-lot changes at Supervalu. You touched on an interesting part of the puzzle – communication. There seems to be a real disconnect as to passing along clear direction or guidance. This carries to lower levels than Craig Herkert.  Now it has extended out to hearing feedback on the culture or the changes. The management, under the guise of having better things to do, has indicated that it does not want or need to hear from employees about the culture, attitude or direction of the company.

    Supervalu announced that they are not doing their annual employee survey this year. It appears through this announcement and other day to day activities, that management at the VP levels and above are not interested in improving what is now a depressing environment:
    "For the past three years, Supervalu has conducted an Associate Survey to facilitate feedback and empower associates to share their opinions around important business metrics and ideas on how to improve work environments. As a result of this feedback, changes have been made in all areas of the company that can be directly attributed to associates’ opinions and their commitment to the continued success of the company.

    “While the survey itself is a relatively minor time commitment from an end-user perspective, from a store support center, banner and region resource perspective, it requires a considerable amount of time and effort to assess, communicate and take action on the results.

    “In light of the importance and priority of Supervalu’s business transformation efforts for Fiscal Year 2012, a decision has been made to defer the Associate Survey for this year. This will allow store support center, banner and region resources to focus on ensuring the success of our business transformation efforts. The survey will resume in 2012, which will provide an opportunity to measure the impact of business transformation efforts."


    Talk about lousy timing. Based on all the emails I’ve been getting, this doesn’t sound like the right time to be shutting down lines of communication.

    A cynical person could read that memo as saying:

    • Thanks for your input.
    • Any changes we’ve made are your responsibility.
    • Enough is enough.

    At the very least, it would appear that the leadership at Supervalu could be fairly accused of being tone-deaf. And the hits keep coming.

    Got a number of emails yesterday responding to Kate McMahon’s column about whether 7-Eleven might be taking a risk by engineering a promotion connected to the new sequel to The Hangover, a move about debauchery.

    One MNB user wrote:

    A couple of thoughts regarding your piece "How Far is Too Far?"

    I've always been of the belief that most folks assume that promo tie-ins are far more successful than they really. Similarly, I think analysts are making far too much noise over social media, a cultural development that may well not exist in five years--at least not in the way we envision it today. 

    But I must admit that this campaign seems better thought out than most. The character cups are a slam dunk. The scavenger hunt is pretty clever. The Facebook page, not so much. I subscribe to most of the major branded Facebook pages and find that in almost all cases the signal to noise ratio renders them worthless. 435,000 people giving a thumbs up to an Oreo character and participating in a chance to win a custom Oreo T-shirt. Yawn.

    I do tend to agree with you that there is the possibility of a "public/press-based backlash" Individual moms and dads? Nah, not so much. But if it did happen it would be more like the Mommy Motrin disaster, which you documented quite well if I remember correctly.

    But the larger issue here is that I don't think anybody really cares about what 7-Eleven does or doesn't do, in large part because of the clientele. I travel the country frequently, and I must say that whenever I visit 7-Eleven, it is almost always like the one down the street from my home--a quite nice suburb in a major metro area.. In the afternoon it is filled with kids buying candy and soda. As the day evolves, it turns into stoned and/or drunk kids (usually boys, harmless). There are also the disenfranchised folks buying lottery tickets or trying to wire money somewhere. Don't forget smokers!  There is never any shortage of confused, schizophrenic or homeless people--many of whom often carry an unfortunate stench. In the evening people of all ages line up to buy alcohol and cigarettes. And then there is the (admittedly more rare) fist fight in the parking lot. Last night,while stopping to get some cat food, a sketchy looking dude came in, spilled a cup of coffee all over the floor, mumbled and left.

    Oh, and there was the time I asked the fellow behind the counter in Plano, Texas (of all places) why a giant box of stainless steel Brillo pads was on the checkout counter. Silly me, I had no idea they were important tools (filters) for crack smokers. Yes, the children of Plano, Texas - which admittedly has suffered quite a reputation for rampant drug abuse - could freely avail themselves of crack paraphernalia.

    And this is all a longish way of saying that the convenience store industry has the most delusional view of any business segment I have ever encountered. Put another way, they are much more delusional than the schizophrenics who can be found in their stores.

    The 7-Eleven promotion won't matter because who is going to want to defend such an often motley and disenfranchised group. I can't imagine mommy bloggers caring because most of the ones I have encountered would never have any need - or desire-- to visit 7-Eleven. To be fair, there are plenty of respectable kids that frequent 7-Eleven, but in most cases I'd say they are the minority. And yes, there is surely variation between these stores and neighborhoods, but my data points support the picture above.

    But perhaps I'm wrong.. I've surely been wrong before. And it will be interesting to see how this plays out.

    The one thing I am sure of, however, is that a chain that allows the sale of crack paraphernalia to kids--and lets not forget the new "bath salt" problem--doesn't seem like it should need to concern itself much with its brand image.

    I’m sure my friends at NACS would differ in their assessment of the convenience store business. And I also think I should point out that there are a lot of convenience stores in this country that are doing a remarkable job of changing their businesses and getting away from the old tobacco-and-beef-jerky model.

    I’m also not sure I’ll ever look at a Brillo pad the same way. I had no idea.

    Another MNB user wrote:

    I think it’s creative and smart, and not offensive at all. 7-Eleven can’t control what teenagers do. The comment ‘And it concerns me that this promotion will particularly appeal to teenage boys who aren’t even old enough to drink legally’ offers no reason as to why or how the company will do this. People are going to drink, and many people therefore are going to get hangovers. I see it as a way of reaching a large crowd.

    And MNB user Scott Svarrer wrote:

    My days of late night partying are long gone, but I never once considered going to a 7-Eleven after a night of drinking.  The proper places to go are White Castle and Dunkin Donuts, in that order.  If neither of those are close by, the nearest diner will do.

    KC's View: