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    Published on: August 4, 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.

    I was fascinated to read a story on the other day about a comedian named Mark Malkoff, who apparently thought he could hoist The Apple Store with its own petard.

    Malkoff apparently was fascinated with Apple’s policy of essentially allowing customers a high degree of freedom in its stores, as part of its mission of providing a customer-centric retail experience.

    According to the story, Malkoff “had a pizza delivered to one Apple store and proceeded to eat it while browsing laptops, took his wife on a date in another store accompanied by a personal chef and trumpet player and yes, he walked into one store with a goat on a leash, all in plain sight of employees.” And he surreptitiously filmed all of these experiences, presumably hoping that Apple would kick him out, thus violating its own principles.

    It didn’t happen. In fact, the Apple employees he encountered all seemed to think it was pretty cool.

    Now, at some level I’m not really surprised by this. My experience at the Apple Store is pretty much the same, though I’ve never brought a goat with me. I have brought a cup of coffee, though, and nobody said boo.

    This is an important lesson for retailers in all venues. In treating Malkoff as if “the customer is always right” actually means something, Apple ends up sending that message to a lot of people ... because almost everything is communicated virally these days. We all have to assume that everything we say and do is going to have broad distribution.

    Daniel Butler of the National Retail Federation points out that Malkoff’s stunts never really violated the three basic tenets of retail behavior: Don’t steal or damage products, don’t create a safety hazard and don’t harass customers or employees.

    Though I’m willing to bet that most retailers would not see such stunts with the same degree of tolerance that Apple demonstrated.

    One of the things that the MainStreet.compiece notes is that the publicity Malkoff’s antics have gotten creates the possibility of copycats ... but that even this isn’t necessarily a bad thing, since it gives Apple a chance to even further establish its reputation as a fun and customer-friendly place to shop. The message gets out geometrically...and that’s good for Apple.

    I know that food retailers have different issues than other retailers, but the message is simple. Next time you see a guy walk into your store with a goat, think twice about your response. because you're not just talking to’re talking to hundreds, thousands, maybe even hundreds of thousands of people.

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

    Published on: August 4, 2011

    Bloomberg’s always reliable Matthew Boyle has a story about how an internal Walmart memo indicates that visits to the retailer’s US stores - open at least a year - were down 2.6 percent from February through June of this year ... a trend that does speak well about the short term impact of the company’s much-vaunted efforts to reverse eight straight quarters of stagnant same store sales.

    “Those Wal-Mart stores had 82.8 million fewer visits through the first five months of the company’s fiscal year than a year earlier, says the memo, which was obtained by Bloomberg News. Wal-Mart doesn’t disclose those traffic numbers, and David
    Tovar, a spokesman, declined to comment on the memo.”

    Analysts say that Walmart continues to suffer from two trends - low-income families that have less money to shop as the impact of the recession continues to be felt, and everybody else deciding to shop elsewhere.

    As a matter of comparison, Bloomberg reports, Walmart’s “traffic decline comes as some of its direct competitors are getting more visits.

    “Kroger Co., the largest U.S. supermarket chain, boosted traffic in each of the previous three quarters. Dollar General Corp., the biggest dollar discount chain in the U.S., has increased traffic for 13 straight quarters, the company said June 1. At Target Corp., traffic rose for six consecutive quarters before falling in the first quarter of 2011.”
    KC's View:
    Analysts say that Walmart has a price and value perception problem that is working against its efforts to bring in more customers - and that the issue of selection has not really been the problem, despite the fact that Walmart has made a big deal out of adding products back in after its editing process fell flat.

    It creates an interesting dynamic for the Bentonville Behemoth. On the one hand, it is opening small stores, creating new formats, developing an urban strategy, acquiring chains in places like South Africa, and forging ahead with e-commerce, sustainability and healthy food initiatives, while at the same time desperately trying to figure out how to generate more traffic and sales out of its existing fleet of US stores. It is almost like how a magician tries to distract you with one hand while the real trick is happening elsewhere.

    Can Walmart’s existing management pull a rabbit out of its hat? And how long will it be before the board - urged on by the clamoring of investors - decides that a change is needed at the top?

    Published on: August 4, 2011

    The New York Times reports this morning that Kraft Foods plans to “split into two companies by spinning off its North American grocery business from its global snacks enterprise.” The decision comes a year and a half after Kraft acquired Cadbury, and is expected to take more than a year to complete.

    In its announcement, Kraft said that it has “built a global snacking platform and a North American grocery business that now differ in their future strategic priorities, growth profiles and operational focus ... Detailed review by the board and management has shown that these two businesses would now benefit from being run independently of each other.”

    According to the story, “The new snacks company will combine the Kraft Foods Europe and developing markets units as well as the North American snacks and confectionery business, with anticipated yearly revenue of $32 billion. Three-quarters of that revenue would be from international operations, and 42 percent from emerging markets, the company said. Its brands will include Oreo cookies, Cadbury and Milka chocolates, Tang drink powder and Trident gum, among others.

    “The North American spinoff is expected to have about $16 billion in annual revenue from Kraft’s cheese, beverage and meals businesses.”
    KC's View:

    Published on: August 4, 2011

    by Kevin Coupe

    Yesterday, MNB took note of a New York Times piece about improvements being made in the boxed wine category. Well, from the ridiculous to the sublime...

    The New York Times also is reporting on another wine trend - a move toward draft wine that is taking place in New York City, fueled at least in part by a keg wine company called the Gotham Project.

    Here’s how the Times frames the story:

    “Serving some wines by the glass straight from the barrel has long been a practice in Europe, and it slowly began catching on in California seven or eight years ago. In New York, Daniel Boulud’s downtown outpost, DBGB, and City Winery, which opened in 2009, also pour wines on tap.

    “But at a growing number of restaurants, many of them trendy locavore spots known as much for their cutting-edge attitudes as for their culinary prowess, the draft wine comes from Gotham, which was founded in 2010. Gotham installed its first tap, dispensing riesling, at Terroir Tribeca when it opened in April 2010.

    “Charles Bieler and Bruce Schneider, founders of the company, say the kegs are not just a gimmick — they are dedicated to changing the way Americans drink wine. ‘We’re not just selling a concept; we’re selling a better glass of wine,’ Mr. Bieler said.

    “The benefits, according to Mr. Bieler and Mr. Schneider, include freshness, eco friendliness and convenience. Besides, the idea of wine from a keg is kind of cool — and the moment just felt right.”

    This is almost too much for me to handle at this hour of the is kind of cool, and seems so much more interesting than getting wine out of a box.

    But the Eye-Opening thing about both this story and the improvement in boxed wines, I think, is that neither approach seems to be focusing on the lowest common denominator when it comes to actual product. They’re reaching for something better, which is really all I ask of any company that makes anything.
    KC's View:

    Published on: August 4, 2011

    Health Affairs is out with a study saying that healthy eating costs more than unhealthy eating, and suggests that the federal government needs to provide more assistance to poor people so that they can achieve a healthier diet.

    According to the Associated Press story, the study notes that an “update of what used to be known as a food pyramid in 2010 had called on Americans to eat more foods containing potassium, dietary fiber, vitamin D and calcium. But if they did that ... they would add hundreds more dollars to their annual grocery bill.

    “Inexpensive ways to add these nutrients to a person's diet include potatoes and beans for potassium and dietary fiber. But the study found introducing more potassium in a diet is likely to add $380 per year to the average consumer's food costs.”

    The story goes on: “People who spend the most on food tend to get the closest to meeting the federal guidelines for potassium, dietary fiber, vitamin D and calcium, the study found. Those who spend the least have the lowest intakes of the four recommended nutrients and the highest consumption of saturated fat and added sugar.”
    KC's View:
    I don’t doubt that it is harder to eat healthier on a budget. Not impossible, but harder. It requires some tough choices.

    But anyone who thinks that the federal government is going to be providing more financial assistance to poor people so they can eat better probably needs to have their meds adjusted. Because if we’ve learned anything over the past few weeks, that ain’t happening.

    Published on: August 4, 2011

    The Contra Costa Times reports that Safeway “is embarking on its most far-ranging effort in years to replace or reconstruct aging or small stores ... The series of projects will effectively create 13 new or revamped Safeway stores in the Bay Area. The retailer has 158 stores in the Bay Area. Safeway's push comes amid the backdrop of an invasion by smaller rivals competing for shoppers' dollars in a region that Safeway has long dominated.”

    According to the story, “Fresh & Easy, Whole Foods, Sprouts Farmers Market, Sunflower Farmers Market and Kroger unit Foods Co. have either disclosed or launched new grocery stores in the Bay Area lately.”
    KC's View:
    Reminds me of something we used to say a lot around here...

    Compete is a verb.

    Published on: August 4, 2011

    • The Financial Times provides some additional information and context for the 3,000 square foot Fresh & Easy Express stores that it plans to begin opening in the western US.

    According to the piece, “The move will enable Fresh & Easy to establish a presence in neighbourhoods that would not be able to accommodate its standard 10,000 square ft stores, already smaller than typical US supermarkets. The format could particularly help it to reach into urban Los Angeles, where suitable sites are difficult to find.

    “Tesco has already shown some willingness to experiment with different store sizes in the US, with some units as small as 7,000 square ft in San Francisco, but the express stores would mark a further departure for Fresh & Easy.”

    The new format, combined with a new loyalty marketing scheme that Tesco plans to import from the UK, are being touted as ways that will help Fresh & Easy become profitable by the 2012-2013 fiscal year.

    And, as the story notes, “Tesco’s latest assault also underlines the shift to smaller stores in the US more generally, as grocers seek to move deeper into urban areas and tap into shoppers’ growing demand for convenience against a backdrop of high fuel prices. Walmart, the world’s biggest retailer, is also experimenting with smaller stores.”
    KC's View:

    Published on: August 4, 2011

    Convenience Store News reports that Subway has “opened 46 new locations in convenience stores throughout the continental United States from May 1 to July 31.”

    In addition, the story says, just over the past three months, “Subway franchisees have opened nearly 600 new locations in 48 countries, 42 U.S. states and seven Canadian provinces, bringing the total of new Subway restaurants to just over 1,200 for the year so far.”
    KC's View:

    Published on: August 4, 2011

    • The Huffington Post reports that as Walmart tries to persuade New Yorkers that they ought to allow it to open a store there, it is taking a new approach - sending out a mailer that emphasizes the retailer’s approach to sustainability and local sourcing, rather than job creation and cheap products.

    HuffPo says that skeptics say the mailer is “a bald attempt to appeal to BoBo brownstone denizens in Park Slope and TriBeCa, who are more likely to be choosing between Whole Foods and the Greenmarket than between ShopRite and Walmart.”
    KC's View:
    If you’re trying to win a game, you play every card that will help you do so.

    I find it more amusing that the Huffington Post seems to find a “bald attempt” at self-promotion to be somehow offensive ... since HuffPo has been built on self-promotion. (And I mean that in an admiring way. I wish I were as good at promoting MNB and our book. Just this week, HuffPo launched a new website for women, and did so with a exploitive story looking at college girls who turn to prostitution to pay off their tuition bills. It was a fascinating story - I read it - but let’s not pretend that it was anything other than what it was ... an exploitive story designed to raise the new site’s visibility and build traffic.)

    Published on: August 4, 2011

    Bloomberg Business Week reports that the troubled Great Atlantic & Pacific Tea Co. is asking the judge overseeing its bankruptcy to extend its exclusive right to propose a reorganization plan until mid-January 2012. The reason? The company says that 34 separate collective bargaining negotiations with organized labor are at “a critical stage,” and it needs more time.

    • The Associated Press reports that Cargill is recalling 36 million pounds of ground turkey “linked to a nationwide salmonella outbreak that has killed one person in California and sickened at least 76 others.

    “Illnesses in the outbreak date back to March and have been reported in 26 states coast to coast.”

    According to the story, “Cargill said Wednesday that it is recalling fresh and frozen ground turkey products produced at the company's Springdale, Ark., plant from Feb. 20 through Aug. 2 due to possible contamination from the strain of salmonella linked to the illnesses. Company officials said that all ground turkey production has been suspended at the plant until the company is able to determine the source of the outbreak.”

    • The Wall Street Journal reports that Anheuser-Busch InBev “is redesigning the Budweiser can for the first time in a decade, seeking to reinvigorate sales of the storied brew. The company unveiled a new, bolder look Wednesday that makes the Budweiser ‘bow-tie’ symbol the centerpiece of the label and goes much heavier on the color red than previous versions ... The company said the new packaging will hit U.S. stores this summer and will roll out in overseas markets later this year.”
    KC's View:

    Published on: August 4, 2011

    • The Grocery Manufacturers Association (GMA) announced the appointment of George E. Dunaif, Ph.D., DABT, as vice president of food safety and technical services.

    Dr. Dunaif most recently served as Vice President, Global Food Safety at Campbell Soup Company.  In that role, he was responsible for the company’s worldwide food safety function, including toxicology, microbiology, process safety and analytical chemistry.  He also served as vice-chairman of the Campbell Corporate Crisis Management Team.
    KC's View:

    Published on: August 4, 2011

    The other day, commenting on a piece about new and transformed Winn-Dixie stores being opened, I wrote:

    According to one Winn-Dixie official, these transformations are seen as a stepping stone to the future. But I can’t shake the feeling that there are those who hope that improved performance actually will put Winn-Dixie on the fast track to an eventual sale, that it is just a matter of time before the company is either sold or broken up.

    How long has Winn-Dixie been trying to transform itself? It seems like forever ... but then again, maybe I’m just getting old and cranky.

    One MNB user disagreed with the first part, but agreed with the second part:

    Yes, you are definitely getting old and cranky. Come visit one of the transformational stores and then see if you are so willing to write off a company of hard working folks that have literally turned their company around. You might just become a believer. I expect the next five years will be a transformational journey that will continue to change the company’s stars for the better.

    Fair enough. When I can, I will.

    Responding to our story about Whole Foods opening a store in downtown Detroit, one MNB user wrote:

    Wanted to let you know that lots of people are taking notice of the economically damaged Detroit area and are setting up shop there.

    Raleigh Studios, which is a non-network production studio company, recently purchased and renovated into sound studios a shuttered car manufacturing plant in Pontiac, Michigan, which is about ½ hour outside Detroit. To run the studio itself they require over a hundred people, creating much needed jobs. When they are in production, pre and post, it opens up hundreds more in all fields; catering, transportation, electrical, carpentry, maintenance, security, extras, etc.

    Disney took noticed and they are the first production company to set up shop and will be filming Oz- The Great and Powerful.

    Happy to hear that companies want to invest in this area. Hope they get back to their glory soon.

    And MNB user Stewart Sundholm wrote:

    This is an exciting move - as I’m sure you already know - there are NO chain grocery stores in Detroit. None.

    The store will also be near our main farmers market (Eastern Market) and I’m sure both venues will benefit.

    Maybe Eminem can film his own 'Getting Real' video in the parking lot....

    I wrote recently about McDonald’s bring McBaguettes to its French operations, which prompted one MNB user to write:

    Are you the guy in the Geico commercial that comes out from living under a rock?  Where have you been for, oh, the last 10 – 15 years?  McDonald’s has been morphing its menu to local tastes all around the world.  The evidence of their efforts are clear – outstanding sales growth, unbelievable profit growth and clear acceptance as a local restaurant in the countries in which they operate.

    France is one example, but a great example.  In the 90’s McDonald’s in France was much maligned; deservedly so in some regards but primarily because it was looking and acting like a U.S. company.  Sales were bad, restaurants were the target of not only anti-Americanism but also as a bad place to eat.  Not so today.  McDonald’s is viewed and accepted in France as a result of its menu and for what McDonald’s has done to look and act like a French company.

    So, I suggest you get out of the coffee aisle more often and take the blinders off.  You’re sounding an awful lot like an Ugly American with your comments.

    Regarding my inclination to buy things like school suppliers from Amazon because it is cheaper, and my surprise at a study that indicated that a lot of people don’t feel the same way, one MNB user wrote:

    I read those stats and thought, sure, I buy the majority of my purchases on Amazon these days, but I cannot imagine buying school clothes for choosy kids online, so this part made sense to me.

    Besides MNB, I read both WSJ and LA Times almost daily….I continue to read that businesses are concerned about the economy, aren’t hiring even if there is need, due to the extreme uncertainty.  Unemployment numbers are still too high, double digit (some stats are massaged, depending on who’s writing the story, but the fact is, too many people are still not working, and so many have given up and thus drop off the statistic radar, so those numbers might still be higher than what we read).  So not surprising that people are cautious on purchases.  Frankly, I’d be concerned if they weren’t in this crazy climate.

    And, about another subject close to my heart, an MNB user wrote:

    I know we have communicated in the past on the subject of wine packaged in containers other than glass bottles.

    Spain sells over 60% of it’s ‘home grown’ wine in tetra pack and in Canada since 2005 Ontario sells over $100 mm in the same format  from both local vineyards and from around the globe. One of the agency stores in cottage country sells over 90% of his wine in tetra pack during the summer.

    At one point I did discuss this subject with a Senior VP at Safeway USA and he mentioned that although he thought it was a great idea he would not be a leader in the category.

    I know you are set in your ways but do you think there will ever come a time that the consumers in the US could bend from tradition and change their buying habits?

    I joked yesterday that if I’m still doing this in 20 years, I may need to move to a Johnny Carson schedule ... which led one MNB user to observe:

    Might want to move that succession plan right along. Just using Johnny Carson as a reference says a lot about how many laps we've done in the circle of life.

    Of course, I got the reference so my guess is we're in a close race...

    KC's View:

    Published on: August 4, 2011

    MNB is going to look a little different tomorrow...I’m off to attend a family wedding, and so I’m taking the day off from the usual reportage and commentary.

    However, there will be a special Friday edition of Michael Sansolo’s column, Sansolo Speaks this week, and both Your Views and OffBeat will be in their regular positions, so you’ll be able to get a little bit of your MNB fix.

    I’ll be back Monday, and will see you then.

    Fins Up!
    KC's View: