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    Published on: June 29, 2011

    by Kevin Coupe

    I’ve been doing this awhile, and sometimes I think that I’ve seen pretty much everything.

    But yesterday, an MNB user sent me something that made my eyes widen, and my reaction was a big “Wow!”

    In the UK, the Telegraph reports on how Tesco-owned Home Plus in South Korea has been endeavoring to grow market share, especially in its online business. Central to its strategizing is the fact that “South Korea has more than 10 million smartphone users in a population of less than 50 million,” and so “it made sense to look at mobile shopping as much as websites for desktops.” Tesco also realized that South Koreans - like a lot of people - tend to be time constrained.

    And so, Tesco came up with the following idea, as described by the Telegraph: it “plastered the glass walls of subway stations with pictures of their products, laid out just as they’d be in a traditional shop. The ‘shelves’ featured QR codes - squares filled with a black and white pattern, unique to the product in question, they’re a more versatile successor to the bar code - which could be scanned by the traveller’s mobile phone, building up a shopping basket in the few minutes before the train arrives. If your train comes before your basket is complete, you can carry on shopping without the pictures and codes if you wish.

    “Deliveries are arranged to arrive in minutes or hours, rather than days, so the groceries will be in the shopper’s kitchen that night and there is no need to wait in to collect them.”

    The strategy worked, and sales increased 130 percent in three months, and its registered user base went up 76 percent.

    It is a fascinating system, and one that you can see in the YouTube video that we’ve imbedded in this story.

    Or, you can click here.

    (One other thing. Check out how clean the South Korean subway system looks, and think about it in comparison to many American urban systems ... especially in New York. Yikes.)

    Check it out. It’s an Eye-Opener.
    KC's View:

    Published on: June 29, 2011

    by Kate McMahon

    Who among us hasn’t looked longingly at a sinful dessert and calculated just what we need to give up in order to surrender to temptation?

    Prompted by a controversial Yoplait Lite TV commercial, that “make a deal with the devil” mentality is at the center of a fascinating online debate questioning whether the marketing of “diet products” can trigger dangerous eating disorders.

    In the ad, a slim bespectacled young woman is seen staring into the office refrigerator, clearly tormented by a luscious raspberry cheesecake. “Oh, cheesecake," she sighs. "OK. What if I had just a small slice? I was good today, I deserve it! Or, I could have a medium slice and some celery sticks and they would cancel each other out, right? Or, OK, I could have one large slice and jog in place as I eat it. Or, OK, how about one large slice while jogging in place followed by eight celery…"

    Cut to her even slimmer, more glamorous colleague who arrives and announces, "Mmmm, raspberry cheesecake. I've been thinking about this all day." She grabs a container of cheesecake flavored Yoplait Lite , and her office-mate notes “Wow, you’ve lost weight.” And she in turn goes for the carton of yogurt, not the cheesecake.

    To the folks at the National Eating Disorders Association, the ad was “seriously problematic” for those battling illnesses such as anorexia and bulimia. "This felt like a 20-second look at the mind of somebody with an eating disorder," said Lynne Grefe, president and CEO of NEDA.

    Her group and others expressed concerned to Yoplait parent company General Mills, and after several conversations General Mills agreed to pull the ad.

    Online coverage prompted much dialogue about whether the ad was indeed harmful, including one Yahoo news story, which generated more than 3,800 posts in response.

    Interestingly, most readers did not find fault with the ad. My initial viewing did not lead me to think about how the “mental math” of calorie deprivation might impact someone struggling with an eating disorder.

    But it is a very real illness, and certainly the media emphasis on being thin (for young girls and women, in particular) is everywhere. Blog posts from those who have battled an eating disorder, and mothers whose daughters faced that challenge, confirmed the NEDA concerns.

    Unfortunately, the marketing approach for many diet products focuses on deprivation rather than making healthy food choices, a practice that Americans of all ages, genders and body types should be adopting.

    Give credit to General Mills, which clearly did the right thing (and averted a potential firestorm on Facebook and Twitter) by pulling the ad. General Mills’s representatives were completely upfront, saying: "We aren't sure that everyone saw the ad (as a potential trigger), but if anyone did, that was not our intent and is cause for concern.”

    So instead of a public relations disaster, General Mills won the respect and support of a consumer organization, and helped foster a more productive debate on positive nutritional and health choices. A conversation worth continuing.


    Comments? Send me an email at kate@morningnewsbeat.com .
    KC's View:

    Published on: June 29, 2011

    MarketWatch reports that the Federal Reserve is scheduled to meet today and vote on “swipe fee” reform rules that would dramatically affect the amount of money that banks can charge retailers for debit card transactions. The reform was part of last year’s financial reform legislation, but has been the subject of intense lobbying by both retailers and the financial services industry as the latter has sought to delay or stop reform entirely, and retailers have pushed to keep the legislation on track.

    The Fed proposed late last year that the interchange fees should be reduced “by an average of 73%, to a range of 7 to 12 cents a swipe, from roughly 44 cents currently,” the story notes, but there is speculation now that the Fed could go easier on the banks and reduce the fees instead to an average of 20 cents per swipe.

    At issue, MarketWatch writes, “is how much flexibility the Federal Reserve believes it has in interpreting a section of the crisis-response Dodd-Frank Act that requires caps on how much banks such as Bank of America Corp. can receive in debit interchange fees.

    “Ken Clayton, chief counsel for the American Bankers Association, said he believes the Fed has significant flexibility when it comes to interpreting a provision of the statute that allows banks to charge a reasonable, incremental fee, for each transaction ... Clayton said he believes the Fed has the flexibility to include a variety of incremental costs it has not yet considered, when approving the rule, such as fraud costs to banks and fixed costs such as systems for processing transactions and the cost of having people to handle consumer complaints.”

    As for the other side, MarketWatch writes, “Jeffrey Shinder, an attorney that represents the Merchants Payments Association, said it is unclear whether the Fed is going to provide any additional relief to banks.

    “Shinder added that he did not see how the Fed could allow banks to receive 20 cents in interchange fees by any reasonable calculations of the costs the statute permits to be recovered by banks. He said the true cost of authorizing, clearing and settling transactions is a penny.”
    KC's View:
    It’s interesting. Even this week, after months of debate, I’ve gotten emails from a number of folks who simply don’t understand the issue, who do not understand that PIN-based debit has the cheapest fee, and signature-based debit cards are the most expensive. Part of that is because the banks have done a good of obscuring the issue, and part of it is because retailers have not done a good job of explaining it from their perspective.

    Whatever the Fed decides, retailers need to get out there with a campaign that describes the options, recommends choices, and explains what the benefits are to consumers.

    Published on: June 29, 2011

    Reuters reports this morning that BJ’s Wholesale Club has “agreed to be bought by private equity firm Leonard Green & Partners and funds advised by CVC Capital Partners in a deal that values the company at about $2.8 billion."
    KC's View:

    Published on: June 29, 2011

    A new report from The Nielsen Co. entitled “Women of Tomorrow” suggests that women are moving into a global era in which they will have ever-expanding power and influence - as well as the stress that goes with it. Among the points made in the study, which was conducted in both developed and emerging nations around the world:

    • “Women across the globe are stressed, (and) women in emerging markets are more stressed than those in developed countries. And, while women across countries surveyed believe they have greater opportunities than their mothers, women in developed markets believe their daughters have the same level of opportunity.”

    • “Less than half (40%) of women in developed countries surveyed believe their daughters will have greater financial stability while 54 percent believe their daughters will have a better education. And 34 percent believe their daughters will be less likely to retire when they choose to compared to today’s standards. Nearly three-quarters (74%) of female respondents in developed countries, however, believe their daughters will have better access to technology.

    “In emerging markets, 80 percent of women surveyed believe their daughters will have greater financial stability, 83 percent believe their daughters will have a better education and 84 percent believe their daughters will have better access to technology.”

    • “Nearly 80 percent of women in developed economies indicated they believe the role of women will change and of those, 90 percent believe it will change for the better. While female respondents say they are pressured for time and feel stressed and overworked, women in emerging countries indicated they feel the pressure even more so than women in developed countries.”

    • “Among female respondents in emerging markets, women in India (87%), Mexico (74%) and Russia (69%) said they were most stressed/pressured for time; while among developed countries, women expressed feeling this pressure most in Spain (66%), France (65%) and Italy (64%).”

    • “When asked how women expect to allocate additional money they earn or expect to earn over the next five years, differences emerge. More than half (56%) of women in emerging countries said they plan to allocate funds for their children’s education, contrasted to 16 percent of women in developed countries. Women in Nigeria (85%), India (76%) and Malaysia (63%) gave the most importance to saving for their children’s education.

    “Overall, developed market women said they plan to spend their extra money on vacations (58%), groceries (57%) and savings or paying off credit cards/debts (55% each) while emerging market women said they were looking to spend extra money on everyday essentials such as clothing (70%), groceries (68%) and health and beauty items (53%). In emerging markets, vacation ranked seventh among women, with 40 percent indicating they would spend extra money on it.”

    • “Nielsen reports that women talk 28 percent more and text 14 percent more than men every month; they are also heavier users of social features of phones and visit more Internet community sites than men. And, more than half of women in both developed (average 56%) and emerging (average 71%) countries say the computer, mobile phones and smart phones have changed their lives for the better.”
    KC's View:
    I’m glad this study is out. I was getting worried.

    After all, it was established here on MNB this week that in one section of Wisconsin, women dental hygienists are willing to trade a teeth cleaning for dinner, and you apparently can get at least one woman to give you a haircut, shave and massage for $10 - both part of the global conspiracy by women to undercut men on price so that they can achieve market domination. (As opposed to simply being exploited by men who don’t want to pay them the same money that a man would make for the same job.)

    There are some blips in the numbers, in part, I guess, because the recession has affected the expectations of women in developed countries to some extent.

    But by and large, this points to the broader trend - that there are more women than men, there are more women getting advanced degrees than men, and there eventually will be more women in management than men.

    They are not just a prime marketing target, but they also will more and more often be the ones making the marketing decisions.

    People who exploit women - willfully, benevolently, or ignorantly - need to pay attention, because their time is coming to a close.

    Published on: June 29, 2011

    Crain’s Chicago Business reports that Walmart has identified a second Windy City location for one its Express stores - in Lakeview, about five blocks east of Wrigley Field.

    According to the story, Walmart “has signed a lease and recently filed a building permit for interior construction for a 14,086-square-foot store at 3636 N. Broadway ... The deal marks the second confirmed Wal-Mart Express store on the North Side, in addition to one planned in the River North neighborhood, as Wal-Mart moves to open dozens of city stores over the next several years from mini-Express stores to full-sized Wal-Mart Supercenters that feature general merchandise and groceries over the next several years.”

    And, the story notes, “The new Lakeview store would be one mile north of a mid-sized, grocery-focused Wal-Mart Market store planned for 2840 N. Broadway, a development that raised the ire of some residents and community groups in the tony neighborhood.”

    USA Today reports this morning that “just in time for the Fourth of July driving weekend, Wal-Mart is rolling back prices -- on gasoline. The giant retailer is offering 10 cents off a gallon at Wal-Mart and Murphy USA stations when purchases are made with a reloadable Wal-Mart gift card, MoneyCard or a Wal-Mart credit card ... Wal-Mart says that there are no restrictions, including no requirement for store purchases in order to get gas discounts at Wal-Mart stations.”

    The promotion will be in effect until September 30, but only in 18 states where the retailer operates: Arkansas, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Mississippi, Missouri, New Mexico, North Carolina, Ohio, South Carolina, Tennessee, Texas and Virginia.
    KC's View:

    Published on: June 29, 2011

    The United Food and Commercial Workers (UFCW) has gone to the National Labor Relations Board (NLRB) to file official objections to Target Corp.’s behavior during a recent certification vote at a store in Valley Stream, NY.

    Needless to say, Target won that vote.

    The UFCW is looking for a new vote, saying that Target ignored basic democratic principles during the run-up to the vote.

    "Instead of playing by the rules, Target showed they were willing to do whatever it took to keep their workers from attaining a basic right: respect at work,” said Ben Both, president of UFCW Local 1500.
    KC's View:

    Published on: June 29, 2011

    • The Chicago Tribune reports that “Walgreens is launching a web pickup service for 300 Chicago-area stores,” using them as delivery depots for shoppers who have placed orders on the company’s website.

    According to the story, “Chicago is the first market to receive this service, which should be in all 480 area stores by August. Web pickup is also available in 27 Walgreens stores in San Jose, Calif. ... Orders placed at Walgreens’ WebPickup site can include most non-prescription items, and may be ready in one hour.  Customers pay online and receive an email or text notification when the order is ready. Some stores will also deliver orders curbside, with a $20 minimum order.”
    KC's View:
    Smart, inevitable, and probably something along the lines of what we’ll see Walmart do in many if not all of its small store formats at some point.

    Published on: June 29, 2011

    The Los Angeles Times reports this morning that California Gov. Jerry Brown has vetoed a bill that would have made it easier for farm workers to organize - an irony, the story notes, because it was Brown’s signature on a bill more than 30 years ago that originally gave them the right to unionize by secret ballot.

    Growers had said that if it became law, the bill would result in increased food prices.

    According to the story, “The proposal has been the top legislative goal for years for the United Farm Workers, whose founder, Cesar Chavez, had strong ties to Brown. It would have allowed the union to bargain for employees without holding an election - by simply collecting signatures from a majority of workers on cards saying they wanted representation.

    In his veto message, Brown wrote, "I am not yet convinced that the far-reaching provisions of this bill … are justified.”

    The Times noted that “union leaders reacted angrily.”

    "To us it's a real clear decision," UFW President Arturo Rodriguez said. "This governor has decided to side with the rich against the powerless."
    KC's View:

    Published on: June 29, 2011

    The Associated Press has some speculation about what will happen at JC Penney when Ron Johnson, who helped to engineer the Apple Store concept, joins the company as its new CEO, charged with re-energizing the department store chain. Some excerpts:

    “Imagine the possibilities of J.C. Penney in the future: An iPad enables one shopper to mix and match shirts and slacks without having to undress. A teen sends a mobile photo of a skirt to her father, who pays for it without leaving home by using his smartphone.”

    “Johnson says he wants to ‘re-imagine’ the store. Industry watchers say they expect him to borrow from Apple’s playbook to completely transform the retailer, increasing Penney’s mobile and Web efforts and changing everything from the way customers pay for clothes to how employees are trained.”

    “During Johnson’s 11 years at Apple as senior vice president of retail, Apple has grown to more than 300 stores in the U.S. and abroad and has become the gold standard among retailers looking to make their stores hip and exciting. Sales associates are trained to not just hawk products, but to be problem solvers and cheerleaders.

    “For instance, Johnson has been credited for creating the popular Genius Bar, where customers can get hands-on technical support. And when shoppers walk out of the store with a newly launched product, sales representatives applaud.”
    KC's View:
    I’m actually beginning to feel sorry for Johnson. Expectations are running high for what he’ll be able to do, and months before he actually sits in the CEO chair, they’ve already reached unreasonable levels.

    Reinventing a department store chain the size of JC Penney won’t be easy, won’t be fast, and will probably be a long, arduous and painful process.

    Published on: June 29, 2011

    Internet Retailer reports that Barnes & Noble may have found its financial salvation, and it isn’t in between the two covers of a physical book.

    The story says that Barnes & Noble is saying that “sales for its Nook electronic book reader and Nook-related digital content increased 300% to about $250 million in fiscal 2011 from about $62.5 million in fiscal 2010. ‘We are now selling three times as many digital books as compared to all forms of physical books on BN.com,’ CEO William Lynch told Wall Street analysts on the company’s recent year-end earnings call, adding that ‘BN.com recorded its largest annual growth rate in a decade because of Nook’s growing digital content business’.”
    KC's View:
    The Barnes & Noble experience is proving to be the same as the Amazon experience, when it comes to the emergence of digital content. And it shows not just how the world is changing, but how embracing these changes can affect a business model.

    Published on: June 29, 2011

    • UK online retailer Ocado announced that it has entered into a partnership with France’s Carrefour, selling its Reflets de France line of 300 French specialty foods. Ocado says it is a “first step” in a planned expansion of ethnic, dietary and religious foods.

    Crain’s Chicago Business reports that Nelson Peltz’s Trian Fund Management hedge fund “took a $382-million stake in Kraft during the first quarter, renewing its holdings after Trian sold its shares in Kraft following the Northfield-based food maker’s hostile takeover last year of Cadbury PLC. The filing didn’t state any reasons or plans for the investment.”

    Reuters reports that “Campbell Soup will shed nearly 800 jobs as part of a series of cost cuts, which include closing an office in Russia and automating operations at an Australian factory.”

    The Packer reports that The Wegman Family Charitable Foundation awarded the Center for Produce Safety with $250,000 during the opening ceremonies for the center’s second annual Produce Research Symposium.

    “Danny Wegman, chairman of the foundation board and chief executive officer of Wegmans Food Markets, Rochester, N.Y., said his recent experience as chairman of Food Marketing Institute’s food safety task force was among the reasons the foundation supported CPS, a center for food safety research.”
    KC's View:

    Published on: June 29, 2011

    We got a number of reactions to yesterday’s story about the US Supreme Court ruling that it was a First Amendment violation and an infringement on the rights of minors to have a law in California preventing retailers from selling violent video games to minors.

    MNB user Jesse Ehlen wrote:

    What the article doesn’t mention (and that you may not be aware of) is that games already have a rating system, similar to movies, that is in place to limit the sale of graphic games to teens.  For example, a game rated “M” for mature, is similar to a movie’s “R” rating and retailers can’t sell the game to children under 17.  The retailer guidelines for the sale of M-rated games are enforced not only by the retailers, but also by the video game publishers.  For more info on the rating system, simply search “ESRB ratings” in the Google.

    The California law sought to operate independently of the ESRB ratings with “violence” being defined by someone, somewhere, in Sacramento.  The law gave no quantifiable guidelines as to what “violence” entailed, favoring the “I’ll know it when I see it” approach (which obviously has failed in the past in regards to banning the sale of pornography).

    Responsible parents can use the ESRB rating of a game to decide whether it is appropriate for their children, as well as other common sense tactics like asking the retail associate, other parents, or visiting any one of the dozens of mainstream video gaming internet sites.

    It’s my opinion that the proposed law was another example of a politician looking to take the decision-making power away from parents and putting it in the hands of the oh-so-capable [California] government.


    One MNB user wrote:

    Remember the kids who set their parent’s sofa on fire after they saw it on ‘The Simpsons’ cartoon-?  Do we really think these images and sensation of blood spatter, raping mothers and daughters, driving autos into streetwalkers,  are helping kids grow up to be normal adults?

    Has common sense gone out the window???

    I agree with you – kids live in a dictatorship, with parents having ultimate authority.  They don’t have rights, not until they are adults.  Deal with it, kids.  (I’m sure they are not the majority of your readership).


    MNB user Andy Casey wrote:

    Leaving aside, for the moment, the argument about whether junk food ads are good or bad for children, in light of the recent Supreme Court ruling on violent video game restrictions they seem unlikely to pass muster without hard evidence they are doing the damage.

    From another MNB user:

    My jaw is still on the ground but my fingers are working.  I agree with your view.

    Sometimes when I hear about this stuff or see previews for movies, etc.,  I can’t even believe someone creates this material.  It irks me when they compare this sort of media with Grimm’s fairy tales or Bugs Bunny or Roadrunner cartoons.  There is a vast difference.  Were we, as kids, so much more intelligent that kids now because we knew the stories were stories and didn’t take everything literally or try to blow up a bird or jump off a cliff?  Maybe it was our parents who made the difference, and passed their values on to us?  It boggles my mind that everything comes down to making new laws, good or bad right or wrong.  So what do the parents get to do…shrug and say “oh well there’s nothing I can do about it – the law says the kid can have it.’

    The answer truly is in saying “not in my house” and the classic “when you have your own house you can do anything you want, but while you’re living under my roof you follow my rules”.  Accountability – wouldn’t it be refreshing if it made a comeback?  Maybe our court system could then work on getting crooks behind bars.


    Another MNB user wrote:

    Why stop at R rated as a cut off…apparently X rated films are ok for kids now too…Heck, let’s put adult clubs by our schools.

    They rationalized that graphic and disgusting imagery doesn’t not disqualify it from protection under freedom of expression…so what limits do exist?

    It’s just one more pro business and anti consumer decision from a heavily skewed court.”


    And, another MNb user wrote:

    Finally some progress. Now maybe convenience stores can remove those annoying covers from the adult magazines at the checkout.

    I think he was being sarcastic...

    Another MNB user also seemed to take a sarcastic point of view, objecting to what I think he feels is my preference for government regulation:

    It's a shame that you are allowed to send out your important and interesting newsletter in the morning. The number of people that that start out their day reading MorningNewsBeat instead of working is costing America Business millions in lost productivity.  It seems that 6 PM should be the only time that newsletters, etc. should be allowed to be sent out on the internet.

    Just to be clear, I’m not reflexively in favor of laws and regulations.  




    Responding to yesterday’s story and commentary about the short-term / long-term dilemma faced by PepsiCo CEO Indra Nooyi, MNB user Dr. James M. Kenderdine wrote:

    What is good for the long term is not always good in the short term.  Look at the US economy today - what is best for our long term future is going to be very painful for most of us in the short term.  For too long managers in the US - both private and public - have focused on what is best in the short term, assuming that the long term consequences of those short term choices would be "someone else's" problem.

    It is not a new phenomena - the US auto industry laid the ground works for its problems in the 40's, 50's and early 60's when it got the UAW to give it short term concessions in return generous medical and retirement promises.  Public managers have done the same thing, getting public employees - police, fire, teachers and other workers - to accept lower than market wages in the short term for promises of long term security.  

    Now that the long term is here, they find they cannot keep their past promises without raising taxes, and that they are not willing to do.

    Ten years from how, analysts will say that Mrs. Nooyi was smart to have take a long term perspective on what is best for Pepsi. Sadly, if Pepsi is #1 then, but if she was not able to also deliver reasonable short term results, she may not be running the company then.





    Finally, because I want to be fair here, MNB user David Livingston wrote in to object to how he was being characterized in this space:

    I wonder what isolated elite area you much live in?  Perhaps I did objectify the women who cut my hair.  I could have said Canadian women instead.  Then it would be ok? Ten dollars is their price and its clearly marked.  I tip well and I always get good service.  I don't think they are being taken advantage of by anyone.  I think its a good marketing move because they are busy busy busy all day long.  I'm happy and keep coming back, probably sooner than I need to.  I think those gals are smart as hell with their marketing.

    I don't like the idea of paying women less than men for the same job, but when women clearly are willing to accept lower pay, what are businesses suppose to do?   Its a labor market driven by supply and demand.  Self employment wages are the true test in gender equality. On average, do self employed women or men make more money in their fields of expertise?  Bet you don't even want to try to guess that one.

    Really, whats wrong with taking someone out do dinner after they have done you a service for free?  If she makes $25 a hour and I buy her a $40 (non taxable) dinner, looks to me like she is coming out ahead.  I haven't taken advantage of anyone.


    The problem, in my view, is the way you make the argument - it is always women who get paid less, who get taken out to dinner instead of being paid for their professional services, who get $10 for a haircut, shave and a massage. The terms you use are exploitive, the attitude strikes me as condescending, and, to be perfectly honest - and blunt - I would not want my wife or daughter doing business with you.

    Call me an elitist if you like, if it makes you feel better.
    KC's View: