retail news in context, analysis with attitude

Published on: September 22, 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 either...it is up to you. I look forward to hearing from you.

Hi, I’m Kevin Coupe and this is FaceTime with the Content Guy.

Earlier this month, I made reference to a new book that was coming out - That Used To Be Us: How America Fell Behind in the World and How we Can Come Back, co-authored by Thomas L. Friedman and Michael Mandelbaum. As I’ve been traveling around, I’ve begun reading it, and there is a story in there to which I think it is worth paying attention.

Apparently Friedman went to China in September 2010 to attend a conference in the Tianjin province, a place that he’d previously been to and was a miserable three and a half hour car ride from Beijing. This time, however, he found that it was a wonderful, 29-minute ride away on a brand new bullet train. At the end of that ride, Friedman found himself in a conference center that was not just world-class, but universe-class.

And here is the amazing part. That new conference center opened in May 2010. They started building it in September 2009. Eight months. Friedman, to say the least was impressed ... especially when he considered the fact that back home in Bethesda, Maryland, at the metro station where he would take a train into Washington, DC, there was an escalator that had been broken for six months, with no sign that it was going to be repaired anytime soon.

Now, this is more than just a vivid illustration of how China is pulling away from the United States - something that, truth be told, can be traced back to China’s less than indulgent political system. I wasn’t totally surprised by this; a couple of years ago, when I was in Shanghai, I noticed that there were buildings going up everywhere, and that people were working on them 24 hours a day.

But it also is an illustration of how 21st century countries and companies have to behave. There is old-world time, and there is modern time...which ticks away a lot faster than it used to. I find myself thinking about Friedman’s story now every time I see a construction site or any sort of construction project - I wonder when they started and when they will finish. I wonder how long it would take in China. And, I’ve begun to think about these issues in more metaphorical terms.

To be competitive, people and companies have to be a lot faster, a lot more nimble, a lot more willing to try new things and make faster judgments. And if you don’t, the competition will - and that will give the other guy a differential advantage.

You simply cannot afford to let that escalator - or anything else, for that matter - go un-repaired for six months. Doesn’t matter what the reason is - there is no excuse.

That’s what is on my mind this morning, and as always, I want to hear what is on your mind.

Published on: September 22, 2011

NY1 reports that a new study from the Alliance for a Greater New York suggests that if Walmart is allowed to enter the New York City market, it could end up with “scores of locations” - in one scenario, it could have as many as 159 stores, including 11 supercenters and 114 small format units.

Walmart said that this was a “fairy tale” study designed to scare NYC residents - and then countered with its own study, which said that city is losing more than seven million dollars a year in sales taxes because of people who leave the five boroughs to shop at Walmarts located elsewhere.

Published on: September 22, 2011

by Kevin Coupe

Interesting story on TVNewsCheck.com about a television station in Columbia, Missouri, that is taking a new approach to its nightly newscast.

According to the piece, KOMU-TV News, looking to find ways to be successful in a time slot that used to be occupied by Oprah Winfrey’s show, has created a template that “includes news and weather, but that’s about as traditional as it gets. On the high-tech set, Hill commands the newscast from a laptop with a second large screen behind her for all to see.

“Thanks to tools like ‘hangouts,’ multi-person video chats that are part of Google+, as well as other social media that already seem old hat — Tweets, email and texting — viewers are integral parts of the newscast, providing everything from viewpoints to videos, says Executive News Director Stacey Woelfel.

“At any given moment, up to 10 individuals may ‘appear’ on air with Hill through the various media, Woelfel says. Last night, Hill reported on Obama’s proposed tax plan, after which the people in her hangout chimed in on the issue.

“Hill also checks in regularly with the ‘social media desk,’ which includes two reporters tracking bloggers, Tweets and online conversations about topics making the news.”

Now, I can see all sorts of problems with this approach - the news stops being the news if the commentary begins to become predominant. And in television news especially, the tendency to become either titillating or exploitive (and on a good day, both) is always a danger.

But the larger point is important - that customers (which is what viewers actually are) welcome, expect and eventually may even demand a greater role in how things work, a trend that is being driven by interactive technologies and social media. They may want to impact how TV news reports the stories they are interested in, how manufacturers develop and market the products they need and want, and the products and services that their preferred retailers offer.

And companies need to be sensitive to this, keeping their eyes wide open.

Published on: September 22, 2011

The Chicago Sun Times reports that Republican presidential candidate Michele Bachman said yesterday that new food safety regulations were “overburdening” food companies, though “she did not call for the repeal of any specific rules.”

Bachman said, “We want to have safety. But we also want to have common sense.”

The statement came just a week after the US Department of Agriculture (USDA) announced new regulations for E. coli testing in meat, and a discovery of listeria in cantaloupes that killed four people and sickened dozens of others.

The argument against new regulation is that, Bachman said, “when they make it complicated, they make it expensive and so then you can no longer stay in business.”

According to the story, “Bachmann wrapped up a two-day Iowa campaign swing at Amend Packing Co., where owner Kent Wiese said his business had never been cited for food-safety violations yet struggled to keep up with federal regulations, especially amid the economic downturn ... Wiese said large-scale meatpackers should be required to submit to a more rigorous testing regimen, because of the volume of animals they process. Wiese butchers 12 to 15 head of cattle once a week, while national meatpackers handle hundreds per hour.”

Published on: September 22, 2011

Mintel is out with a new report saying that “64% of US moms say they're spending more time looking for sales, discounts and coupons compared to last year, while 28% of UK consumers were classified by Mintel as ‘bargain hunters’ due to their dedication to comparing prices and reading online reviews.”

In addition, according to Mintel research, “62% of US consumers say they rarely pay full price for clothing and 58% of UK consumers ‘don't like paying full price for anything.’ Meanwhile, 28% of UK shoppers consider online shopping a form of entertainment at lunchtime or in the evening. It seems it's not just how much you save, but how much fun you have in the process.”

It isn’t all bad news for retailers. A recent Mintel report also found that “72% of US group-buying service users intend to return a restaurant where they used a discount in the past, even if they have to pay full price the second time around.” In other words, “slashing prices can actually boost sales, foster customer loyalty and earn repeat business.”

Published on: September 22, 2011

The National Grocers Association (NGA) is out with its annual Independent Grocers Survey, which says that over the past year, “Overall economic pressures have shifted gross margins downward to 25.68% from 26.28% last year. These reduced margins resulted in average net profit before taxes of 1.08% for all respondents, down 60 points.

“As the overall economic pressures on many consumers continue, shopping for price and value are a priority for lower and middle-income shoppers. While 2010 showed some shift to 'food away from home' from 'food at home' dollars, the continuation of the weak economy may cause a reversal of the trend.

“When looking deeper at the results, the divide between the top 25% and the median of the operators is growing. The profit leaders showed an average 4.07% net profit before taxes versus an average of 1.08% for all respondents. As pressures mount on the consumer, the retailers will need to respond to the needs of their customers. The price pressure as a result of the economy and fierce competition in the market will continue to push margins down.”

Published on: September 22, 2011

• The St. Louis Business Journal reports that “less than three weeks after selling nine grocery stores in the Memphis area to Kroger, Schnuck Markets Inc. is now acquiring seven stores in Rockford, Ill., from Kroger. Schnucks is acquiring seven Hilander stores and one fuel center in Rockford from the central division of the Kroger Co. of Cincinnati. Schnucks already operates four supermarkets, under the Logli name, in the Rockford market.”

• Bloomberg reports that PepsiCo has announced that it has “created two new groups to market snacks and drinks together and guide snack innovation. The Power of One - Americas Council and the Global Snacks Group will both be run by John Compton, who will retain his role as PepsiCo Americas Foods CEO.”

• Bloomberg also reports that “PepsiCo Inc. shareholders stand to reap a 49 percent gain if Chief Executive Officer Indra Nooyi splits the soft drinks business from snack foods, joining a wave of breakups from Kraft Foods Inc. to Tyco International Ltd.”

No such split has been announced by PepsiCo, and a separate story notes that the company says that it “believes in the power of a combined business.”

However, Jack Russo, an analyst for Edward Jones, tells Bloomberg, “I’m sure Pepsi’s facing some pressure. You go through these cycles where you build empires and you break them apart. We’re going through a cycle where the investment bankers are convincing companies smaller is better and the sum of the parts is worth more than the whole.”

Creating even greater pressure on PepsiCo, the story says, has been a much better stock performance by rival Coca-Cola.

• SABMiller Plc has agreed to buy Foster's Group Ltd., for the equivalent of $10.2 billion (US).

Published on: September 22, 2011

• Edwin J. Holman, a member of the board of directors at The Pantry Inc., has been named interim CEO as the company seeks a permanent replacement for Terry Marks, who resigned to become CEO at Hooters America. Holman, among other positions that he has held, once was chairman and CEO of Macy's Central.

Published on: September 22, 2011

...will return.

Published on: September 22, 2011

• The New York Yankees clinched the  American League East division title for the 12th time in 16 years with a 4-2 victory  over Tampa Bay that came as the second-place Boston Red Sox lost 6-4 to the Baltimore Orioles.