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: August 24, 2011

    by Michael Sansolo

    Depending on where you live in the country, you might consider Washington, DC's 5.9 earthquake Tuesday a less than eye opening event. (Westerners please keep your snide comments to yourselves.)  However, in a region that rarely gets such action, but lives on the edge of terrorism, it evacuated buildings, tied up roads and pretty much shook up everyone.  Yet that isn't the real eye opener.

    This is though: Not too long ago, when a major event happened people ran to their radios to find out the who, what, where and when. Pretty soon, that was replaced by television and the ability to get the up to date information through CNN, the Weather Channel or even the regular networks.  Tuesday was different yet again.  People ran to Facebook. In fact, when I checked I was stunned by the number of people who posted information about the quake within five minutes, 10 minutes or 30 minutes of the event.  It was as if their checklist was: 1. stay alive; 2. post alive status on Facebook.

    So I decided to ask why people did that and it took my network very little time to rack up a huge number of responses.  Some said they went to Facebook because cell phones weren't working or Twitter was overloaded.  (They tried Twitter first ..and there were reports say, 40,000 Tweets about the earthquake within 60 seconds after it began. ) Some said it just seemed like the thing to do.

    And one wisely posted that this is a perfect example of the new world. To quote directly, "After an event like this we want more than anything to communicate. Here (on Facebook) we reach friends, and family instantly - even friends we haven't seen in more than 30 years." That was written by Ethan Marten, a friend I haven't seen in 30 years.

    I'm thinking that's pretty Eye-Opening.
    KC's View:

    Published on: August 24, 2011

    by Kevin Coupe

    It may say something about gastronomic trends when the former president who was best known for an insatiable love of fatty foods - he seemed to love digging into a plate of ribs or a Big Mac and fries almost as much as he enjoyed pressing the flesh with the electorate (though, in his case, “pressing the flesh” took on a different and unfortunate meaning) - becomes a dedicated vegan.

    That’s right. Former President Bill Clinton, according to a USA Today story, “has gone from a meat lover to a vegan, the strictest form of a vegetarian diet. He says he eats fruits, vegetables and beans, but no red meat, chicken or dairy.

    “Clinton, 65, who had quadruple bypass surgery in 2004 and then stent surgery in 2010, is following this eating plan to improve his heart health. He talked about his plant-based diet last year, saying he lost 24 pounds on it for his daughter Chelsea's wedding, and he chatted about it again recently on TV, drawing national attention to the potential health benefits of this type of diet.”

    Researchers, according to the story, say that about three percent of US adults are vegetarians - a number that has doubled since 1994. About one percent of US adults are self-identified vegans.

    And one of them is a former President and well-known carnivore. That’s an Eye-Opener.
    KC's View:

    Published on: August 24, 2011

    by Kevin Coupe

    Late last month, I took note of a story in the Daily Record about how Winn-Dixie has “embarked on a program to ‘transform’ selected stores among the 484 it operates in the five states of Florida, Georgia, Alabama, Mississippi and Louisiana ... The transformation is focused on fresh fruits, vegetables, meats and seafood along with freshly prepared foods and specialty stations, as well as a wine area. The store features higher ceilings, wood and polished concrete floors and improved shelving ... The stores are renovated floor-to-ceiling at a cost of about $5.5 million, almost triple the average renovation cost of $2 million. The changes result in increased sales, which Winn-Dixie has said reach an average $475 per square foot, a 60 percent increase from the average $300 at its other stores.”

    And, I commented:

    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.


    Well, there were some folks at Winn-Dixie who took exception to my characterization, who felt like I was underestimating their efforts ...and who agreed that I was being unnecessarily cranky. I was invited to visit one of these new “transformed” stores whenever it was convenient to me ... and, as it happened to be convenient pretty quickly.

    The 50,000 square foot Winn-Dixie that I visited was in Apopka, Florida, and I have to admit that it was one of the nicest Winn-Dixies that I ever have seen. It is one of 17 that the company plans to open this year.

    Not surprisingly, the strongest part of the store was the fresh food power alley upon which the front door opens - the produce is displayed with a colorful farm stand-style panache, and there is a nice prepared foods section - complete with an on-location chef - that is selling pizzas, pastas and a good selection of hot meals. (Center store remains center store ... though there has been a concerted effort to widen the aisles and lessen the clutter.)

    It seems clear from some of the discussions I had that Winn-Dixie is looking to exhibit a Publix-level food expertise, which is an ambitious goal ... and the argument that this is a long-term play for Winn-Dixie is persuasive.

    I was particularly impressed by the chat that I had with Henry Ferris, the company’s new senior director of brand management - a title that seems in itself to be a statement about Winn-Dixie’s intentions to be seen not just as a carrier of other brands, but a brand unto itself. Ferris is not one of the usual suspects ... his resume has both Sears and Home Depot on it (during the good times at the both places), and he seems willing not just to consider traditional answers to the challenges facing Winn-Dixie. I’m told by others within the organization that this approach is typical of CEO Peter Lynch, who is said to realize that traditional approaches may not provide Winn-Dixie with a sustainable long-term strategy.

    That’s all well and good. I’m persuaded that the executive team at Winn-Dixie isn’t just getting the place ready to be sold. (Which probably means that it’ll get sold to somebody next week.) I’m not sure I buy the idea that it makes sense to compete with Publix, which has some of the most loyal customers in the business. And even if Winn-Dixie is successful at moving more up-market, it runs the risk of disenfranchising its core consumers, something it cannot afford to do.

    For the time being, though, I’m going to try to be a little less cranky when I consider Winn-Dixie and its future. But the game is hardly over, much work remains to be done, and there will be no dearth of events and competitors that will challenge the company.

    And that’s not just whistling Dixie.
    KC's View:

    Published on: August 24, 2011

    Bloomberg reports that Shoprite Holdings, South Africa’s largest retailer, plans to “accelerate its store expansion this year” as it deals with the entry of Walmart into the region; Walmart recently closed on the acquisition of a majority interest in Massmart there.

    According to the story, “Shoprite will add 106 outlets in the 12 months ending June 2012, more than the 96 it opened in the prior year, the Cape Town-based company said in a statement today. The retailer ended the last fiscal year with 1,246 stores.”

    “We have to open new stores to keep growing and keep market share,” Shoprite CEO Whitey Basson told a press conference. “It’s still profitable to open stores and keeps us ahead of competitors.”

    One of the market’s other major players, Pick n Pay, also has conceded that the Walmart entry is going to create major challenges for local competitors.
    KC's View:

    Published on: August 24, 2011

    • The Boston Globe reports on a new survey conducted by Staples saying that more than one-third of respondents admit to bringing their tablet computers to the bathroom with them “to do such multi-tasking as scanning e-mails while freshening up and attending to other hygiene chores.”

    In addition, “more than 60 percent of tablet owners even admit to powering on their tablet during vacation to check in with the office or do work.”
    KC's View:
    Some say that this is trend that indicates heightened efficiency and productivity on the part of American workers ... but I’m not sure it says anything positive about work-life balance.

    Though I have to admit (and stop me if this is too much information) that had I been surveyed, I would have been part of that one-third. Then again, I’ve also been known to bring the Sunday Times with me. Sort of depends on how the spirit moves me.

    So to speak.

    Published on: August 24, 2011

    • Walmart-owned Asda Group in the UK is reported to be recruiting chefs to run “authentic curry counters” at a number of its stores. Four of them currently are operating, and Asda is said to be planning a limited roll-out of the concept where appropriate.

    The curry counters are run by different restaurant chains, much in the way that sushi counters in many supermarkets are outsourced to companies expert in the making of sushi.
    KC's View:

    Published on: August 24, 2011

    • The Boston Globe reports that Ahold-owned Stop & Shop is part of a Boston-based group “that plans to distribute 2,000 bags of healthful snack options to children in need in Greater Boston.” The project is timed to coincide with a PGA event in New England, and the “Healthy Packs” initiative also has buy-in from companies that include State Street Corp., Deutsche Bank and EMC Corp.

    If at first you don’t succeed... the Detroit Free Press reports that Meijer is going to make another attempt to get approval for a new store in Traverse City, Michigan.

    According to the story, Meijer previously tried to open a store there in 2004, an effort that failed. Meijer then “funded a 2007 attempt to recall the Acme Township board over the zoning dispute. Michigan officials fined Meijer $190,000 for violating campaign laws. Last month, a prosecutor declined to bring charges over possible perjury during a 2007 deposition in a civil case related to the dispute.”

    • The Lakeland Ledger reports that “Publix Super Markets Inc. is offering free 30-day supplies of the medication lisinopril to any customer with a prescription, the company announced Tuesday. Lisinopril is part of a class of medications called ACE inhibitors, which are used to prevent or treat symptoms of conditions that include high blood pressure, diabetes and certain heart and chronic kidney conditions. Publix also offers free supplies of seven common antibiotics and the diabetes medication metformin.”

    • The Los Angeles Times reports that “Kraft Foods Inc., which owns the Maxwell House and Yuban brands of packaged coffees, is lowering its wholesale prices roughly 6%. The cut will shave about 20 cents off each pound of the company's roast and ground coffees, while making instant coffee about 2 cents cheaper per ounce.”

    The move follows a similar price cut by JM Smucker for its Dunkin’ Donuts and Folger brands.
    KC's View:

    Published on: August 24, 2011

    • The Wall Street Journal reports that Andrew Higginson, who is Tesco’s CEO of Retailing Services, which includes bank, telecom and Internet operations, has announced that he will leave the company in September 2012 “to pursue other challenges.”

    Higginson was seen as a possible successor to Sir Terry Leahy, CEO of the company, when Leahy retired last year; that job went to Philip Clarke.

    Clarke, in a prepared statement, thanked Higginson for his "contribution to the growth of Tesco over the last 14 years," and said he respects his "decision to move on and am grateful that he has given me sufficient notice to effect proper succession planning."

    • Valassis Communications announced that Alan F. Schultz, its chairman/president/CEO and a 27-year veteran of the company, plans to retire at the end of the year. He will be succeeded by Rob Mason, the company’s current executive vice president of sales and marketing.

    • From c-stores to c-cups ... Terrance M. Marks, who announced earlier this week that he was resigning from his job as CEO of convenience store chain The Pantry, now is reported to be joining the Hooters of America restaurant chain as president/CEO.
    KC's View:

    Published on: August 24, 2011

    ...is on vacation this week, but will return after Labor Day.
    KC's View:

    Published on: August 24, 2011

    Got a lot of email yesterday responding to Michael Sansolo’s column about United Airlines, in which he berated CEO Jeff Smisek for his new video message - being delivered on planes all over the country - about how the merger with Continental is going.

    Michael wrote, in part:

    Now I can understand his pride at that. But here’s what I wish he talked about: Tell me how the merged airline is bringing benefits to my fellow passengers and me. Tell me about the benefits of new routes or how the bigger company is able to produce efficiencies that keep my costs down and my experience up.

    Instead, he tells me they are making great progress in painting planes with the new United/Continental logo and all I can think is why should I care about the paint job. Does it make the plane fly better? Will it stop the passenger in front of me from dropping their seat back into my lap? Why does this paint job matter?

    It’s something we all need to think about. When we talk to our customers we have to talk about what matters to them. They care about cost, about the experience and they care about choice. In short, they care about themselves and their own experience and they really only listen when that’s what we say.


    And:

    The thing is, little changes do matter. I love it when stores post information explaining that their new refrigerated or frozen cases are more energy efficient and they explain why. It’s not a sign I read every time, but it makes something small matter to me. Likewise, when light bulbs are changed to CFLs or recycled materials are used in building materials or parking lots I like the information. I may not care that your logo is different but I do care about those other little touches.

    And, finally:

    While walking down the aisle to my seat—21c—something amazing happened. After row 14 the numbers suddenly skipped to row 20. When I made a crack about this strange numbering to a flight attendant, she explained that United has decided to standardize the number for exit rows. From now on, apparently, rows 20 and 21 mean exits and on my 757 rows 15 to 19 ceased to exist. Now there’s a good reason to do this and it’s because frequent flyers like me love the roomier exit row seats and want to make sure they are getting those seats. But the change hardly works if United doesn’t tell anyone and just waits for us to serendipitously learn the answer.

    One MNB user responded:

    I agree completely with Michael’s article on the United president’s video message.  I was thinking the same things as I watched it.  What really killed me was when the president bragged how he was changing the seating on Continental so most passengers would be cramped as they are on Untied planes.  He didn’t say it in that manner, but that is the reality.

    From another MNB user:

    As a long time United loyalist and 13 year 50k+ mileage traveler on UAL, I am more inclined to side with Michael.   I don’t give a hoot about paint jobs, I want to know why the merger will keep me happy, comfortable, and satisfied when I am on one of their planes.

    I learned of the exit row change a couple of months ago while in Minneapolis.   I checked in on my mobile and saw that I was scheduled in row 20.     I thought they changed the aircraft and I no longer had the exit row for my 3+ hour flight to SF, or was even in Economy Plus.    I had to track down an employee to help confirm that I was good to go which ate up my time to conduct my client’s business needs.

    As for the upgrades, it is a joke on United post the merger.   Sure there are more flight opportunities but we are also faced with more people in the queue (Global Services, Star Gold, 1k, Prem Exec, etc).   I was joking with some fellow Prem Exec’s and 1k’s the other day while sitting on a flight (row 21) about the number of people on the upgrade list, it totaled 60+.

    If United wants to keep the best flyers happy they need to ensure they are treated that way across all their employees.   And, are given the information that makes the flying experience the best it can be.

    I go back to your experience at Trader Joe’s.    The cashier made you feel special and was concerned about your experience.   Every United gate agent, Flight attendant, Pilot, and executive should be doing everything possible to do the same for their customers.

    Especially those that fly once or twice a week on higher priced tickets.


    Yet another MNB user wrote:

    I enjoyed Michael’s column, and it reminded me of how FedEx beautifully and boldly rolled out their identity change (from Federal Express) in 1994.  This was just one part of a brilliant transformation:

    “(FedEx’s) Aircraft paint jobs also will cost much less without purple covering nearly half of the jet, and even better, its absence will reduce surface temperatures of the aircraft by 40 degrees, thus lowering energy needed to cool the planes and allowing FedEx to cut back on fuel costs per flight.”

    Now there’s a reason for a new paint job, and I still think of it every time I see one of their jets fly over…


    Another MNB user chimed in:

    To repaint a 737 is about $30K and a 757 / 767 is just under $100K – so the money isn’t trivial – to your point.  Jeff is able to do this since they now sell food on Continental Airlines and have cut the number of flights between key markets (e.g. Houston – Chicago). The higher ticket prices is more about re-framing competition  than the fuel premium Jeff complains about (to anyone who will listen).

    Think the cost of painting planes annoys you? Check-out how much they paid in severance to departing executives!

    UAL Mileage Plus is very uncompetitive when compared to Delta’s Skymiles program. UAL has limited onboard wifi. Jeff hasn’t done much to address this differential, both of which are important to middle / top-tier frequent fliers.

    The issue with standardizing seat numbers is bigger than it may seem. United has same-model planes with different seating schemes (e.g. a 757 can have different numbered exit rows, depending upon what plane they actually put on the route). I only book a seat if the exit row is available, therefore it is very annoying if I get to the airport & they have a different configuration plane. And, then instead of the long leg, recline exit row, you end up one row back from that in basic economy.


    MNB user Linda Wish wrote:

    I am siding with Michael on this one! The announcement on United shows that the advertising value they reap from painting their planes is more important than executing the basics. A recent multi leg trip that was United and Continental combined flights had a difficult turn when on the last leg, Newark to Santa Ana, they claimed that they had only received partial payment for the trip I was clearly ticketed for, and had paid (online) for an upgrade for. I spent 1 hour and 20 minutes with multiple agents to resolve before they figured out that a rescheduling from Continental to United that they initiated hadn’t been coded correctly. Thank goodness I always arrive early!

    Because I was carrying my printed itinerary, but not the receipt, and their computers don’t synch correctly- I was threatened with – “You will need to pay today’s rate to get ticketed ($800) for the missing leg ”, “We actually don’t have any open seats for 2 days,” and when finally escorted thru security and onto the plane, I get the fun of trying to find space for my things and the stares that come with a late boarding. This guy who is proud of their paint jobs and lists it as an accomplishment needs a wakeup call. Fix your computers and get the basics right.


    MNB user Sara Freitag wrote:

    I always enjoy your articles and the perspective they bring, but today I do have to agree with Michael on the whole “what’s important to me” thing regarding the airlines.  I was appalled when I had to suddenly change a vacation flight to three days earlier to attend a family funeral.  The airline not only charged the $150 change fee, but also $800 in increased air fare.  The bereavement discount was a whopping 10%, less the $50 they keep to “process the change”.  Something is wrong with an industry that has us all cornered, with no options, and can make record profits on additional fees to their customers.

    Enough of my rant, the bottom line is the airlines have totally missed the boat when it comes to customer service.


    MNB user Jeff Folloder wrote:

    It's all so much BS.  Recently, I boarded a "merged" flight from Washington's Dulles to Houston. No less than 13 different "premium" boarding calls before the PA junkie got around to general boarding.  Oh, and you could have bought your way into one of these pre-boarding queues. It took almost a half hour to board the plane and it wasn't even full.  I did not have to pay to check my bag heading out to Washington, but had to pay $25 coming home.  Nobody could explain why.  I listened to the same schpiel by Smisek that Michael heard and was already getting progressively more agitated.  "My Continental" was now some bastard step-child and all my "loyalty" was pretty much flushed down the toilet.  Was on a United bird with less first class seating than a comparable Continental bird, so there was no shot at an upgrade since my grandfathered status from flying a patently ridiculous number of miles back in the day means nothing in comparison to current United Executive President Elite Circle Council Premium fliers. There were no pillows, there were no complimentary "meals at meal time", which was one of Gordon Bethune's and Larry Kellner's pre-flight touts.

    There was a huge tout in the flight magazine about how the merger was going green.  I ordered one of the $9 snack packs and started reading.  And marveled that the little snack pack had so much packaging and overwrap that it managed to create no less than 19 separate pieces of trash.  I pointed this out to the flight attendant and we all had a good laugh. And then I took a nap.  And will look for even more ways to avoid flying in the future.  Continental promised me that I would be an honored and respected customer for the rest of my life.  They lied.  It's all so much BS.


    I actually did a short “KC’s View” after Michael’s column, writing:

    This is a place where Michael and I differ. My feeling is that as long as United continues to give me free upgrades 25-30 percent of the time that I fly the friendly skies, they can paint the planes and number the aisles any damn way they want. And since the merger with Continental increases the number of flights upon which those upgrades may occur, I’m okay with that.

    Now, I could be misguided about this ... but for MNB user Fred Garvin, I went too far:

    Is there a reason you feel as though you must comment on Mr. Sansolo's article?  Your comments don't add any relevance to his viewpoint.

    Mr. Sansolo was actually okay with it … I even mentioned my response to him yesterday, and he likes it when I comment on his columns.  (Though he may think it unfair that he doesn't get to comment on mine…he's never said anything…but I guess there are certain advantages to being the Content Guy.)

    While my quick View may have been overly glib, I think it actually does serve to illustrate a larger point - that what is important to one customer is not necessarily important to another.  On paper, Mr. Sansolo and I share many qualities - we were raised in the same town at the same time, previously worked for the same newspaper chain (Gannett) and business publishing company (he as editor of Progressive Grocer, me running the editorial side of Supermarket Insights, PG's video division), both live in the suburbs, both have children of roughly the same ages (he has two, I have three), and both married up.   So one might expect us to react the same way to many things.  (And we do, though I continue to find his fascination with "Sex and the City" to be inexplicable.)  In this case, we differ on how United seems to be stating its priorities … though I agree with Mr. Sansolo wholeheartedly that it is a good thing when companies explain to their customers what they are doing, why they are doing it, and how what they are doing will benefit the customer. (I just hope he doesn’t ask me to start calling him “Mr. Sansolo.”)

    I wish I could say that all this went through my mind when I wrote that "View."  But it didn't.  I just had a quick reaction and wrote it…sometimes this gets me into trouble, and sometimes it doesn't.  Or, to put it another way, sometimes you win, sometimes you lose, and sometimes it rains.
    KC's View:

    Published on: August 24, 2011

    Pat Summitt, the celebrated coach of the University of Tennessee’s woman’s basketball program who has won more games than any other college coach ever over a long and distinguished career, announced yesterday that at age 59 she has been diagnosed with “early-onset dementia, Alzheimer’s type.”

    Summitt says that with the full support of the university, she will remain in her coaching job and will teach and lead, while handing off more responsibilities to her assistants. And, she plans to become a spokesperson for the cause of finding a cure for the disease.

    In a remarkable story in the Washington Post today, columnist Sally Jenkins (a friend of Summitt’s) writes that “now she will need a different kind of counterintuitive strength. Surrender and acceptance have never come naturally to her, nor has admitting vulnerability. She has trouble even uttering the word Alzheimer’s. But she’s learning ... With acceptance has come relief — and, thanks to treatment, apparent improvement.

    “Every morning she reads, or studies math problems on flash cards. Each night she spends hours working on her iPad, doing puzzles to improve her cognitive abilities ... Over the last few days, with the clarity of her diagnosis and decision to go public, Summitt has recovered her confidence. More often than not, it is she who comforts others, as usual. Her staff have grief-stretched looks around their eyes, and seem quietly destroyed under their skins. Every so often you find one of them has ducked into her laundry room to weep. It’s Summitt who puts her arms around them and talks quietly into their ear. ‘I don’t want you worrying about me,’ she says. Strong has always been her natural, preferred state.”
    KC's View: