retail news in context, analysis with attitude

Published on: September 14, 2011

by Kate McMahon

To borrow a line from songwriter Joni Mitchell, “Don’t it always seem to go that you don’t know what you’ve got ‘til it’s gone.”

For me, that was power, water, cable, internet and landline phone service for eight days following Hurricane Irene’s assault on the East Coast. My single lifeline to the world, a Blackberry on the Verizon network, worked sporadically until the battery died.

Stepping over tree limbs to survey a downed utility pole, smashed transformer and live wires criss-crossing my driveway, I was immensely grateful that my family and neighbors were not harmed during the violent storm. And I soon came to realize just how absolutely dependent we are on technology to communicate, work, feed our families, manage finances, even to tell time. I found myself longing for a battery operated transistor radio, a gas stove, a rotary dial phone and a wind-up clock.

I also came to appreciate the businesses that sought to serve their customers, anticipating needs and delivering service in the most difficult times. Too often we read about retailers jacking up the price of batteries, generators, bottled water, snow-blowers or plywood before a blizzard or hurricane. A truer test of mettle is doing the right thing when the skies darken.

So here are my Hurricane Irene kudos to:

Walter Stewart’s Market, New Canaan, CT: Before the storm hit, this family-owned market donated all prepared, perishable and frozen foods to the town to help feed residents staying at the emergency shelter and volunteers. It then set up shop in the parking lot selling water, batteries, non-perishables and paper goods until power was restored to the market five days later. Appreciative customers lined up in droves to restock their refrigerators and trade storm stories.

Starbucks: With 80% of the homes in my town of 20,000 without power, residents flocked to the local library and Starbucks to charge cell phones and computers and log onto Wi-Fi services. Not to mention order coffee. Starbucks ramped up service to accommodate the increased demand, and allowed customers to plug power strips into outdoor outlets so as many as six people could charge up together. It worked, and yielded increased revenue and major good will.

Canine Fence: This pet-protection service emailed customers with specific and helpful storm preparation tips well in advance of the hurricane. A post-Irene email was equally detailed about battery back-up, de-activating systems and providing an 800-number for help while its website was down.

Chase Consumer Banking: It was day three in the dark when I focused on paying my on-line bills. I was heartened by an email from Chase acknowledging the crisis, offering help from advisors and waiving fees on over-drafts, late payments, ATM withdrawals and more. Most importantly, the bank said it encouraged its employees to “go the extra mile” to assist those impacted by the storm. Small change? Perhaps, but I found it a meaningful outreach that favorably altered my take on Chase even though I didn’t need those services.

Just as every household should have an emergency preparedness plan, I think retailers and service providers should do the same, focusing on providing customer service in the truest sense of the term.


Comments? Do you have your own storm story? Send me an email at kate@morningnewsbeat.com .

Published on: September 14, 2011

The LivingSocial “daily deal” that offered consumers all over the country a $20 voucher for $10 worth of product purchased at Whole Foods was nothing short of an enormous hit yesterday, with the one million vouchers available selling out in just over 12 hours.

LivingSocial said it was its most successful offering, selling at the rate of about 115,000 an hour, or 30 deals per second. The Austin American-Statesman reports that it was “the first time Whole Foods has offered such a deal. As part of the offer, the Austin based natural foods grocer is donating 5 percent of the sale price to the nonprofit Whole Kids Foundation, which emphasizes healthy eating education in schools.”

Published on: September 14, 2011

by Kevin Coupe

Talk about an Eye-Opener.

Bloomberg reports that 366 million people around the world are afflicted with diabetes, up from 285 million just two years ago. Diabetes kills someone every seven seconds, the story says, or more than four million people each year.

According to the story, the International Diabetes Federation says that estimates of the global burden should spur greater action from world leaders.

“The number of sufferers was pegged at 285 million worldwide in 2009,” Bloomberg writes. “Since then, China reported 92.4 million people with the condition, more than double the federation’s estimate. That’s helped ratchet up health-care spending on diabetes to $465 billion...”

Published on: September 14, 2011

Ahold USA announced that Anthony T. Hucker will join the Giant Landover Division as Division President, effective October 3, 2011. Hucker replaces Don Sussman who served as Interim President of the Division since the end of 2010 and who will resume his role as Executive Vice President Supply Chain for Ahold USA.

Hucker joins the Giant Landover division from Walmart, where he most recently served as Corporate Vice President, Head of Walmart Express Division.

Published on: September 14, 2011

The Hill reports that Sen. Susan Collins (R-Maine) is lobbying the US Department of Agriculture (USDA) to change its attitude toward potatoes.

Collins said during a meeting of the Senate Appropriations Committee - which is charged with marking up the new agriculture spending bill - that she thinks the USDA is unfairly discriminating against potatoes and other starchy vegetables by proposing regulations that would limit school lunch servings of these items to twice a week. The problem, Collins says, is not what the food is but how it is prepared.

"The fact is that French fries are a problem but potatoes are not," Collins said. "I don't know what (Agriculture) Secretary (Tom) Vilsack has against potatoes, but I'm going to invite him to northern Maine for a nice feast."

Collin’s goal - and it is shared by other legislators - is to get the USDA to change the language of any new regulations and, ideally, prevent any money from being spent on restricting the serving of certain starchy veggies.

Published on: September 14, 2011

The Washington Post reports that Walmart plans to announce today a commitment of billions of dollars to the cause of training female workers all over the world and “support women-owned businesses.”

According to the story, “The commitment includes $100 million in grants to non­profit groups focused on developing job skills for low-income women in the United States and for women who work in the overseas farms and factories that Wal-Mart relies on for its merchandise. It also said it will spend $20 billion over the next five years to buy goods from the nation’s women-owned businesses, double its current amount.”

As the Post writes, this is “the latest attempt by the world’s largest retailer to tackle broad social issues and shore up its image,” which has been sullied by gender discrimination suits and a perception that it operates an old-boy culture that does not pay women as well as men and has a glass ceiling on how far women can go within the organization.

Published on: September 14, 2011

The US Census Bureau said yesterday that the average American family got poorer over the past decade, as the percentage of people living in poverty in this country hit “15.1%, the highest level since 1993, and 2.6 million more people moved into poverty, the most since Census began keeping track in 1959,” according to the USA Today story.

“The poor, the young and minorities had the biggest income drops last year,” the story says. “Median income for black households fell 3.2% to $32,068, while non-Hispanic white income fell 1.3% to $54,620, a decline that wasn't statistically significant.”

In addition, 22 percent of all children in the US were living below the poverty line, up from 20.7 percent in 2009.

The poverty line in 2010 for a family of four was $22,113.

Published on: September 14, 2011

The Los Angeles Times reports that “US motorists are on pace to spend $491 billion for gasoline this year, the most ever.” The story notes that national gas prices average $3.661 a gallon now - up 94 cents from a year ago - and while they are likely to drop a bit over the next month, experts believe that “by spring, Americans will be wrestling with $4 gasoline in a lot of markets.”

Published on: September 14, 2011

Rachael Ray’s Yum-o! organization, in collaboration with the Alliance for a Healthier Generation (founded by the American Heart Association and the William J. Clinton Foundation) has announced that it is expanding on its effort to get healthier foods into New York City schools with a program that is aimed at providing healthy school food recipes for free to every school in the US.

According to the announcement, the recipes were created specifically for easy preparation in a school setting, meet the Alliance for a Healthier Generation’s school nutrition guidelines, which meet or exceed USDA guidelines, and were tested in real school kitchens with real kids.

Published on: September 14, 2011

Interesting interview in the Wall Street Journal with Len Sauers, vice president of global sustainability at Procter & Gamble, in which he discusses the company’s efforts in this area.

Excerpts:

• The consumer’s role... “The greatest impact our products have occurs once they've left the store and entered the home. We have developed products with a lower environmental impact, but that benefit is only realized when the consumer uses the product in a certain way. For example, the environmental benefit of Tide Coldwater [laundry detergent] is providing consumers with the ability to wash their clothes in cold water with no trade-offs in performance or value. But that benefit is only realized if the consumer chooses to wash their clothes in cold water.”

• Cost savings... “Conserving resources in our own manufacturing operations is on the ‘easier’ side of sustainability progress for us. That's because conservation measures almost always result in cost savings, so it's easy for people to rally behind these ideas; and these efforts typically start in a grass-roots fashion. As an example, in a baby-care plant, the team that ran our baby-wipes line was able to reduce energy use from steam production by 43% simply by modifying the process for equipment cleanings, which reduced CO2 emissions by 610 tons annually. This new procedure reduces the plant's water consumption by 170,000 liters of water each year.”

Published on: September 14, 2011

Advertising Age reports that as the US Postal Service (USPS) is hoping that direct marketing pieces - known in many circles as “junk mail” - will be one of the things that allows it to survive.

“In financial trouble that has it on the brink of default, the U.S. Postal Service is making an aggressive appeal to catalogers and other advertisers to ramp up their mailings,” Ad Age writes. “The theory is that their revenue can make up for steep declines in first-class consumer and business mail that has migrated online.

“The pitch -- to be bolstered with an ad campaign touting new easy-to-use direct-mail programs -- is not without irony. It was direct marketers, after all, that contributed to some of the service's woes when they began pulling back mailers in the face of the recession and a steep rate rise in 2007 on catalog postage rates. But direct mail is making a comeback of sorts, with couponers and catalogers still viewing it as an effective tool, even in the digital age.”

It has been reported that USPS is so low on cash that it is likely to default on its financial obligations this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.

Published on: September 14, 2011

United Press International reports that “a 290-pound New York state man suing his local White Castle restaurant for bigger seats claims the chain violated the Americans with Disabilities Act.” According to the story, the plaintiff, 64-year-old Martin Kessman, complained to the White Castle in question - in Nanuet, NY - but now complains that the store responded with three “very condescending letters” that offered him free hamburgers. But not cheeseburgers.

The lawsuit is seeking larger chairs at the eatery and unspecified damages, UPI reports.

Published on: September 14, 2011

• The Los Angeles Times reports that labor negotiations in Southern California between the United Food and Commercial Workers (UFCW) and the area’s three major chains - Safeway-owned Vons, Kroger-owned Ralphs, and Albertsons - “were temporarily put on hold Tuesday because the federal mediator responsible for overseeing the talks had to leave Southern California to deal with a family emergency.

“The negotiations are expected to resume Thursday afternoon.”

• Published reports say that Marks & Spencer plans to spend the equivalent of more than $900 million (US) to remodel its fleet of UK stores, a move that it hopes will help it generate between $1.5 billion and $2 billion (US) in incremental sales over the next three years.

Published on: September 14, 2011

Got the following email from an MNB user:

On the issue of Walmart vs. Amazon – and the suggestion ... that Amazon has somehow stumbled with social media, I have two comments.

Firstly, I highly doubt Walmart will be able to properly create a “radical new type of hyper-personalized shopper experience”, even by acquisition.  Walmart was created to do a single thing that they do pretty well—at least historically. Last several years, not so much. Almost every time they’ve tried to do anything else they stumble. They were humiliated in Korea and Germany. Their goal to poach female clothing shoppers from target with brands like Faded Glory and White Stag failed in an embarrassing way. They still haven’t figured out how to make their stores look more like Target—which they have stated they’re trying to do. And as of yet, most of their online experiments (i.e. their MP3 store) have failed. The idea that Walmart is going to successfully create a “radical new shopper experience” is almost laughable.

This issue of Amazon allegedly “stumbling” when it comes to social media makes the implicit assumption that everyone in the commerce business needs to stop what they are doing and become massively involved in social media. Apple has famously avoided almost all forms of social media, and still does to this day. Amazon has done perfectly well with only a single play in the social media realm. Their online user reviews remain one of the most coveted assets in the e-commerce world. It’s interesting that two huge “tech” based brands with almost minimal involvement with social media have seen their stock prices soar during a period when most are lucky to simply to limp along.

More specifically, over the past 5 years Amazon and Apple have seen their share price rise 500% and 400% accordingly, while Walmart’s has flatlined.

To be certain, social media shouldn’t be ignored. But it is quite possible that it will never prove to be as important for commerce as everyone believes it will be today.




On the subject of paying sales taxes for online purchases, one MNB user wrote:

I'm going to have to fall into the Amazon camp on this one. One of the reasons you have to pay sales tax as a corporation is to support the community in which you do business. Your business sales taxes as well as your property taxes support the infrastructure(roads, traffic control, parking), the local schools of your community, local government. E-commerce doesn't impact these functionalities in the same way that a on-site location does. Amazon indirectly supports these organization by shipping with Fed Ex or UPS(I believe they Fed Ex) which they pay for. These shipping businesses do pay local taxes for their on-site facilities. Stores that are in the community say they can't compete. I don't believe that, they just need to take advantage of being there for the consumer. You can buy in a few minutes for last minute purchase decision. The consumers have the ability to touch and view the product(clothes, fruit, meat, appliances). One of the reasons I use on-site businesses is so that I can return something in 10 minutes and not have to repack and send and hope the next product is better.

Local businesses need to highlight these advantages to the local consumer base and build a relationship with them. That's how they will keep the Amazons of the world at bay.

I would agree that the collection of sales taxes by the likes of Amazon won’t take away its advantages, and won’t immediately make local bricks-and-mortar businesses more competitive.

But I think it is time for those taxes to be collected nonetheless.




And, on another subject, from MNB user Steven Ritchey:

I must be turning into an old curmudgeon, but I had several thoughts when I read the story in your daily blog about Con Agra and the frozen lasagna.  First, was this a taste test run by Con Agra. You know like the old Folgers coffee commercials from the 1960’s and 1970’s in the 5 star restaurants.  Or did these bloggers think they were getting a meal  prepared by a famous chef for free.  I don’t know about you, but when I receive a free meal from a corporation, first off, I don’t expect too much, second I’m a natural cynic, sure it might be a chef prepared meal, it could be the chef that formulates the frozen dinners.

Now for the curmudgeon part, I don’t take most bloggers too seriously, maybe I’m wrong, but I think a lot of it is narcissistic whining that, I didn’t get exactly what I wanted, now I want to let the world know about it.  I wonder how many of them actually liked the food, until they learned it was frozen lasagna, then all of a sudden it was  beneath them, you know, food snobs, you ought to be familiar with that phenomena. (just joking).

Blogging, like Facebook and MySpace can be a great tool, but too frequently I find them to be a soapbox for a self-absorbed person with an inflated view of their own self-importance.  I have some blogs I read regularly , like yours, that I find very informative and thought provoking, I use Facebook to keep up and locate old friends I haven’t seen since high school ( hint; a very, very long time ago).  I don’t use it to chronicle every move I make, or show off where I am on vacation so someone can break into my house while I’m gone.

Maybe I’m the lowest common denominator you rant about so much, but I adjust my expectations to the situation.  I never go into a Golden Corral expecting a great steak, but when on the oh so rare occasion I go to a Ruth’s Chris, or Del Frisco’s Steakhouse, my expectations are quite high.  When I go to McDonalds, which is rare, I don’t expect great food, I expect it to fill me up and keep me going for a while,  but when I go to Chip’s in Dallas, I expect a great burger.  Actually, I prefer cooking my own steak on the grill so I can do it exactly as I want it done same thing with burgers.

Thanks for exempting me from the “bloggers are self-absorbed people with inflated views of their own self-importance” criticism.

Though some days I’m not sure I deserve it.

Published on: September 14, 2011

Last night, in a 3-2 New York Yankees victory over the Seattle Mariners, relief pitcher Mariano Rivera earned his 600th career save, making him just the second person in Major League Baseball history to achieve that level of excellence.

The other guy is Trevor Hoffman - who retired last year with 601 saves.