retail news in context, analysis with attitude

Published on: July 20, 2011

by Kevin Coupe

Call it yet more evidence of how technology is changing our lives. And might even be good for our backs.

The Los Angeles Times reports that Amazon is looking to further the penetration of its Kindle e-reader by launching textbook rentals designed specifically for the Kindle, promising discounts of as much as 80 percent from purchase prices - a move that seems likely to save parents a lot of money and students a fair amount of backache.

According to the story, “Students can rent a textbook for as little as 30 days or up to 360 days, with fees differing depending on how long the book is rented, Amazon said in a statement. Rentals can be read on Amazon's Kindle eReaders, as well as Kindle apps for Macs and PCs, as well as smartphones and tablet computers running Apple's iOS, Microsoft Windows Phone 7 and Google's Android operating system.”

And, it gets even more Eye-Opening:

"We've done a little something extra we think students will enjoy," Dave Limp, vice president of Amazon's Kindle unit, tells the paper. "Normally, when you sell your print textbook at the end of the semester you lose all the margin notes and highlights you made as you were studying. We're extending our Whispersync technology so that you get to keep and access all of your notes and highlighted content in the Amazon Cloud, available anytime, anywhere -- even after a rental expires. If you choose to rent again or buy at a later time, your notes will be there just as you left them."

Once again, these kinds of shifts and innovations are worth paying attention to because they are changing the assumptions that young people - who will be the center of the target for many retailers in just a few years - bring to the marketplace.

As those assumptions evolve, so must retailers and other marketers. Do do otherwise, is to proceed with your eyes closed.

Published on: July 20, 2011

The Los Angeles Times reports that “in a bid to fight childhood obesity and change eating habits on the local level, First Lady Michelle Obama is expected to announce a healthful food financing initiative Wednesday that aims to draw grocery stores into so-called food desert areas in California.

“The $200-million program, dubbed the California FreshWorks Fund, is a joint effort by the California Endowment and a team of grocery industry groups, healthcare organizations and leading Wall Street banks ... The goal, said organizers, is to provide financing at or below market rates to encourage grocers to set up shop in underserved communities such as South Los Angeles to increase consumers' access to healthful, affordable food.”

The story goes on: “The loans will be available to food retailers big and small. Fund organizers expect that a portion of the lending will help mom-and-pop grocers and small, independently owned chains expand existing retail space and install new equipment such as refrigerated displays for fresh produce, eggs and meat, or build new stores in underserved communities.

“The money could also be used by grocers to develop new distribution models, such as mobile produce trucks, to bring healthful foods into these neighborhoods. Or it could be used to finance collaborative, wholesale purchasing to help small retailers lower their costs.”

Published on: July 20, 2011

Andronico’s announced that it will close its Palo Alto, California, store on July 24, saying that it was a “rough decision” and that the company is working through a recapitalization plan with an unidentified equity partner.

"We're hoping to stabilize and strengthen the company long-term,” said Diane Krebs, the company's operations administrator.

The upscale retailer has closed two other stores in recent years. This closure will leave it with seven units, including four in Berkeley and one in San Francisco.

Published on: July 20, 2011

The Associated Press reports that the US Food and Drug Administration (FDA) plans to begin regulating medical applications designed for smart phones, making sure that they live up to their promises.

According to the story, “With the rise of the iPhone, Android and other mobile devices has come a flood of applications designed to help people stay healthy. Industry analysts estimate there are already more than 17,000 medical applications available, ranging from calorie counters to programs that let doctors view medical scans on their phones.”

Published on: July 20, 2011

Last week, MNB took note of a story pointing out that technology and social networking are, in some cases, being identified as responsible for marital discord and divorce, as people use venues such as Facebook to reach out to and connect with old romantic partners.

Which certainly identifies one of the downsides of modern technology.

And MNB user, however, sent a link to a CBS News that restores one’s faith in the positive influence of social networking...

It seems that a woman named Deborah Copaken Kogan saw that her four-year-old son, Leo, had developed a rash. She took him to the doctor, who diagnosed a strep infection and prescribed appropriate medicine. The rash got worse, however, so she took him back to the doctor, who diagnosed scarlet fever this time, and prescribed new medicine.

While this was going on, Kogan was posting pictures of her child on Facebook, along with running commentary about how he didn’t seem to be getting any better.

Then, Kogan got a call from a friend, who’d been on her Facebook page. She told Kogan that her son might have Kawasaki disease, described as “a rare condition that strikes children, causing swelling in the arteries throughout the body, including the coronary arteries that pump blood into the heart ... One in five children develop heart disease from Kawasaki, and a small percentage of these kids die, even with treatment.”

Kogan immediately got Leo to the hospital, where it ended up that the Kawasaki diagnosis was correct; Leo was treated and is currently recovering.

Published on: July 20, 2011

The Financial Times reports that Tesco’s US-based Fresh & Easy Neighborhood Market chain is going through a remodel, as management tries to re-emphasize the “fresh” aspect by adding features like in-store bakeries, and moving departments around so that there is a greater sense of abundance. These changes occur as Tesco also brings its loyalty card marketing program to the US, hoping that this will create a stronger connection to shoppers.

“The whole point about Fresh & Easy is that it is a very very simple retail model,” CEO Tim Mason tells FT. “So, we were very wary about adding things in that appeared to add cost. What we have discovered with trials, and experience, and the benefit of being open, is that this is a cost that is worth adding.”

According to the story, “Some shoppers also found the stores too clinical. So Fresh & Easy is literally warming them up with glass doors on chilled cabinets in the 100 stores. Wood floors, on display in some rivals, will go into about a third of stores.

“To put more emphasis on food, the health and beauty section is being shrunk with the space taken up by another 500 grocery products, mostly Fresh & Easy branded, from gluten free foods to energy bars and coffee. Some non-food items, such as kitchen utensils, are also being introduced.

“Once all the changes are complete, there will be a marketing campaign. Revamped stores will get the same marketing treatment as new ones.”

Expansion beyond the US west coast remains on the table, but not imminent.

“Clearly Tesco didn’t come to the United States of America to have a business purely on the west coast. It came to the United States of America to have a business in the country,” says Mason. “What we have to do for our own benefit and for the benefit of our shareholders is to demonstrate that we have a profitable business model in the market that we are in, and then explain how we intend to exploit that business model in other places. It’s all there to be done.”

Published on: July 20, 2011

Having been stymied in their efforts to repeal a law passed in 2007 and signed into law by President George W. Bush that require greater lightbulb efficiency, Republicans in the US House of Representatives now are trying to defund the agency responsible for enforcing the new regulations.

As reported by the New York Times, the new regulations mandate that light bulbs become 25-30 percent more efficient. “Although the regulations do not specify what types of bulbs are allowed, the standards would have the effect of eliminating the traditional 100-watt incandescent bulb by Jan. 1, 2012.”

Republicans say that the regulations are an example of unwanted and inappropriate government intrusion, while supporters say they will be good for consumers, who will save money, and good for the environment because of the energy efficiency.

In a related move, The Hill reports that the US Department of Energy has launched a new advertising campaign “that touts efficient light bulbs as an easy way for consumers to save money on their electricity bills ... As is the case with all PSAs, media organizations will run the advertisements at no cost to DOE. The advertisements were created by a Texas-based advertising firm for free, DOE says.”

Published on: July 20, 2011

The California Supreme Court ruled yesterday that a Los Angeles law requiring that new owners of supermarket chains must hire previous employees, excluding managers, for at least 90 days after the operation reopens, is legal.

According to the Los Angeles Times, the court said that the law “did not usurp state or federal law or violate constitutional guarantees by requiring new grocery store owners to keep existing employees for months after taking over ownership.

“The Los Angeles law is one of several in the state that require companies to hire existing workforces for at least a while after purchasing other companies. Opponents have complained that such laws would proliferate if approved by the state's top court and bind new businesses that want to bring in their own teams.”

The California Grocers Association (CGA) said that it has not yet decided whether to appeal the ruling to the US Supreme Court.

Published on: July 20, 2011

USA Today reports that Postmaster General Patrick Donahoe says that “falling mail volume and soaring red ink” is likely to doom Saturday mail delivery within a couple of years, and that the US may have three-times-a-week mail delivery within 15 years.

The US Postal Service (USPS) is projected to have an $8.3 billion loss this year.

Published on: July 20, 2011

MNB reported yesterday that Superquinn, the iconic Irish food retailer, had been placed in receivership by a syndicate of banks concerned that its more than $500 million (US) in debt was unsustainable, and then was sold by the banks to Musgrave Co., which operates under the SuperValue, Centra and Londis banners.

The Independent now reports that Superquinn founder Feargal Quinn - who sold the company in 2005 and now occupies himself as an elected senator as well as hosting a television program, “Retail Therapy,” in which he travels the country helping businesses develop new strategies and tactics - told the Senead that he was pleased that Superquinn is now “in the hands of another Irish family.”

"I am very pleased to see this and I am confident that the jobs of the 2,800 people who work there appear to have been secured," he said.

Published on: July 20, 2011

The Wall Street Journal reports that as Borders liquidates and closes all of its stores, deep in debt and unable to find a buyer, Barnes & Noble “is attempting to reinvent itself as a seller of book downloads, reading devices and apps.”

There is, the story suggests, little choice: “Today, customers at BarnesandNoble.com snap up three digital books for every one physical book. When it reported results for its fiscal year ended April 30, the company noted that sales of digital products boosted same-store sales 0.7% for the year, more than compensating for the decline in consumer book sales ... Today's Barnes & Noble depends on its bookstores to introduce customers to its Nook e-readers, but its growth and future profits hinge on outfoxing and outselling deep-pocketed rivals Amazon.com Inc., Apple Inc. and Google Inc. on the digital-books front. Amazon, for example, last month disclosed that mystery writer Michael Connelly is the seventh writer to sell more than one million Kindle books.”

Published on: July 20, 2011

• The Hill reports that “business and labor advocates swamped the National Labor Relations Board (NLRB) Tuesday to battle over a plan that will likely speed up union elections ... The proposed changes include allowing the electronic filing of petitions, having voters’ phone numbers and email addresses added to final voter lists and setting pre-election hearings seven days after petitions are filed.”

Organized labor supports the changes, but business groups say that they make it harder for companies to present their side of the argument to workers looking to make a decision.

According to the story, “The proposed changes to union election rules have become the latest flashpoint at the federal agency, which has attracted criticism from trade groups and Republicans for issuing a complaint against Boeing for allegedly retaliating against union workers.”

• CNBC reports that tomorrow morning, Costco will open its second store in Australia, in Sydney, and then will open a third store in Canberra on Friday...and plans to build more as it identifies appropriate locations. Costco’s first store was opened in Melbourne.

The story notes that the openings further inflame burgeoning price competition in the Australian market, which traditionally has been dominated by Coles and Woolworths.

Published on: July 20, 2011

• Kroger announced that Mark Tuffin, vice president of transition for the company, in charge of organizational restructuring, has been named president of its Smith’s division.

He succeeds Jim Hallsey, who is retiring.

Published on: July 20, 2011

...will return. I promise.