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: November 18, 2011

    Today marks MNB’s tenth birthday.

    Best job I’ve ever had. Mostly because it isn’t really a job.

    My daughter is working on a college essay about the difference between “living a life” and “making a living,” and I told her the other day that for the really lucky ones, there’s no difference. People like me get to do what they love to do, and find a way to get paid for it. Pretty cool.

    When I started MNB back in November 2001, after having gone through the collapse of another website and what can be generously called a messy breakup with my partners, I believed - passionately - that there was room for an entertaining, non-vanilla B2B site that would read like a newspaper column, feel like sports radio, and could veer into all sorts of areas that traditional B2B vehicles would avoid like the plague. Which is why, in addition to talking here about retailing and technology and innovation in various forms, we’ve also talked about baseball, religion, the nature of faith, and the demands of moral responsibility - among other things. I know that writing about and listening to your opinions on these subjects keeps me engaged. From day to day, I have no idea where MNB is going and what is going to be about. And I believe fervently that this is the same reason that you come back each day.

    Of course, I never forget that it is you, the readers, who make it all possible. I’m just crazy enough that you might someday find me on a street corner, on top of a soapbox, shouting, with nobody there to listen. But it is a lot more fun when there is a crowd, and a lot more entertaining when the crowd shouts back. I’m lucky. I’ve got a highly participatory crowd of well over 22,000 people - and it grows by 50-100 people each week, mostly because you spread the word. Doesn’t get any better than that.

    I also never forget that I have terrific sponsors - companies like MyWebGrocer, Balance innovations, Samuel J. Associates, the Food Marketing Institute, and Webstop - who reward me with their continuing faith. And if you’ll permit me a brief commercial message, please go to their ads sometime today, click on them, and see what they have to offer. They’ll appreciate it, and I’ll appreciate it. And if you’d like to join them in sponsoring MNB, feel free to shoot me an email. We’d love to have you.

    Ten years. By my count, that’s more than 2,400 editions of MNB, with something like eight million words. (Thanks also, by the way, to Michael Sansolo and Kate McMahon, who have written a bunch of them.)

    When I’m out giving speeches, I often get questions about MNB. Like, are there ever days when there’s nothing to write about? (Not yet.) And when people ask me how I write MNB, I like to quote Stephen King, who gets the same question about his novels. His answer, and mine: “One word at a time.”

    Ten years. I’ve said it before and I’ll say it again.

    I hope it is as good for you as it is for me. And I’m going to keep doing it until I get it right.
    KC's View:

    Published on: November 18, 2011

    by Kevin Coupe

    USA Today had an interesting piece about the future of the traditional bank branch, suggesting that the financial services industry is rethinking what has been a mainstay of Main Street America for more than a century.

    “The new Citibank branch in Washington's Foggy Bottom neighborhood, around the corner from a Whole Foods and Roti Mediterranean Grill, looks more like an Internet café than a place you'd go to cash a check,” the paper writes. “There are no brochures — this is a green building, so unnecessary paper is discouraged. Bank employees use a wall-mounted computer screen to show customers different types of checking accounts and other bank products. Customers who need to wait for assistance can use one of the branch's computers to review their online accounts or log onto their own computers in the Wi-Fi lounge.

    “The branch, similar to Citi's flagship branch in New York, is designed to create a friendly environment’ for tech-savvy people...”

    Banks, USA Today writes, need to adjust for these tech-savvy consumers not just in the branches, but also online, where more and more people do their banking. But at the same time, there is a percentage of customers that want the high-touch experience of a branch - they want a friendly teller, and they want personalized accessibility. And they need to marry these different needs within the context of an industry that has its share of image problems. There’s also been a ton of consolidation, and questions remain about the whole issue of “too big to fail.”

    It is a moving target, and you aren’t going to find a lot of sympathy for the banking industry. But the questions the banks are asking themselves are the same questions that many industries have to ask ... with their Eyes Open about the future.
    KC's View:

    Published on: November 18, 2011

    Sources tell MNB that as Neal Berube took the reins last week as president/CEO of Salt Lake City-based Associated Food Stores, one of his first moves was to lay off as many as six dozen retail, wholesale and management personnel, as well as to impose salary cuts of as much as 25 percent on a number of other staffers.

    The moves came after Rich Parkinson stepped down from the president/CEO job.

    According to sources, the laid off personnel were perceived by the current management as not being loyal to Berube, and were escorted from the building shortly after being given the news about being laid off.
    KC's View:
    MNB was informed about the layoffs late last night, and was unable to reach AFS for comment. However, our sources are good on this one, and we’re convinced of the veracity of this report.

    Assuming it is true, one has to wonder how AFS is going to cope with a busy holiday season down more than 70 people. In addition, this kind of purge - and make no mistake, this is how it is perceived by the folks who remain - has to have an enormous impact on morale. Lay off this many people, and the folks who still have jobs spend more time looking over their shoulders than looking forward ... and that’s not good for business.

    In addition, we’ve been told that Berube is perceived within the organization as someone who brings an accountant’s mentality to the CEO job - while he was the COO, he is an accountant by training and also served as the company’s CFO. The concern seems to be that there is a belief at the top of AFS that the company can cut and slash its way to prosperity. That’s hard to do; it may work in the short-term, but it rarely works as a long-term strategy.

    That said, AFS recorded a double digit loss during its last fiscal year. So it likely is that the new leadership thought drastic measures were necessary to keep the ship afloat and viable. The problem is that right now, there are likely a lot of people looking for life vests and lifeboats because there is a not a lot of confidence in the stability of the ship or the acumen of the people doing the steering.

    Published on: November 18, 2011

    Bloomberg reports that Amazon plans to follow its expansion into the tablet computer business - its Kindle Fire has just started shipping - with the release of an Amazon smart phone.

    The goal, according to the story, will be to make money on the digital media, such as books, music and video, rather than on the phone itself.

    It is suggested that this new smart phone is likely to go on sale during the fourth quarter of next year - just in time for Christmas 2013.

    Amazon is not commenting on the reports.
    KC's View:
    But then again, it never does.

    The apparent success of the Kindle Fire gives this report a lot of credibility, and the move would seem to be right in line with what appears to the the long-term Amazon strategy.

    Published on: November 18, 2011

    California-based Raley’s announced that it has entered into a partnership with a company called Hello, Vino to “provide a free mobile app to assist shoppers with selecting the perfect wine for their needs amongst the hundreds of bottles available at retail.” The app “recommends the perfect type of wine for a meal, specific occasion, or by personal taste preference. The app features will be customized to Raley's 124 retail locations throughout northern California and Nevada, which also include Bel Air and Nob Hill Foods stores.

    “Wine brand recommendations provided by the app will be customized to reflect each individual store's inventory, utilizing the mobile device's location-based services. Additional app features allow shoppers to save and rate wines for future reference and return shopping trips.”

    The app is available for both iPhones and Android devices.
    KC's View:

    Published on: November 18, 2011

    Reuters reports that Walmart is offering free shipping on all online electronics orders over $45 between now and December 19, as it “tries to win tech shoppers from the likes of and Best Buy in the all-important holiday season.”
    KC's View:
    Of course, the story notes that Best Buy already had announced that it will offer free shipping on all orders from now until December 27. And Amazon always offers free shipping on all orders over $25.

    And in the end, Amazon’s big advantage isn’t its free shipping, but its Prime program, which serves as a loyalty mechanism - it offers “free” two-day shipping to customers who pay an annual fee of $79, thereby encouraging them to place as many orders as possible to reduce the cost of each individual shipment.

    Published on: November 18, 2011

    The Associated Press reports that a San Francisco Board of Supervisors committee has approved a proposal that would “charge shoppers 10 cents per bag at the grocery store. That charge would jump to 25 cents after two years.”

    The fee schedule would be for both plastic and paper bags, and while there would be exceptions for things like food takeout containers and dry cleaning bags, it would apply to all retail stores.

    San Francisco already has a ban on single-use plastic bags at supermarket and drug store chains.

    The full Board of Supervisors will take up the matter next week. If passed, the fees would go into effect in July 2013.
    KC's View:

    Published on: November 18, 2011

    • Safeway has launched its “Help Us End Hunger (Every Bag Counts)” food drive to help make the holidays brighter for people who rely on the assistance of food banks.

    The company said that it “is joining with Kraft Foods, customers, local food banks and broadcast partners to collect food donations at all Safeway stores from November 16 through December 24 , with a special day for food banks and their volunteers to meet and greet Safeway customers and donors on Saturday, November 19 .”

    "Assisting people who need help during the holidays and throughout the year is a Safeway priority," said Larree Renda , Safeway Executive Vice President and Chair of The Safeway Foundation. "This campaign provides an opportunity for us to help make a brighter holiday for countless families."

    • The Food Lion family of banners - including Bloom and Bottom Dollar Food - has kicked off their ninth annual "Hunger Has a Cure" campaign “to support local food banks affiliated with Feeding America, the nation's largest domestic hunger-relief charity. The campaign, which gives customers the opportunity to purchase ready-made food boxes or donate food in bins, runs through Dec. 27.”

    The supermarket chain says it hopes “to collectively surpass previous box donation counts and raise over 1.5 million pounds of food, valued at over $1.2 million , during the 2011 ‘Hunger Has a Cure’ campaign.”

    • Winn-Dixie Stores announced it has joined forces with Feeding America to launch the Give a Meal program, which it says “gives Winn-Dixie guests and team members the opportunity to help provide food to nearly 37 million Americans — including more than 14 million children — facing hunger this holiday season. Give a Meal runs through Jan. 3 and is available in all of Winn-Dixie’s 482 stores in Florida, Alabama, Georgia, Louisiana and Mississippi. Every $1 donated during the campaign helps provide eight meals to people in need.”

    • IGA announced that a donation of $120,000 was made to Wounded Warrior Project (WWP), saying that it was “a result of a national cause marketing initiative that ran in participating IGA stores from Memorial Day weekend through Labor Day weekend. IGA donated 10¢ from the sale of every specially marked case of IGA exclusive brand water during the promotional period to Wounded Warrior Project, resulting in a $100,000 of the donation. Kraft Foods contributed in IGA’s name an additional $20,000 earned from the positioning of powdered beverage displays in IGA stores during the promotional period.”

    The Wounded Warrior Project is described as a national, nonpartisan organization designed to “raise awareness and to enlist the public’s aid for the needs of injured service members, to help injured servicemen and women aid and assist each other, and to provide unique, direct programs and services to meet their needs.”
    KC's View:

    Published on: November 18, 2011

    • The Boston Globe reports that a new study from Datamonitor suggests that the number of products using the word “diet” has “plummeted” in the past few years, as words such as “zero” and “smart” have become increasingly popular with marketers - and, by extension, consumers.

    "Avoidance-type claims are becoming less popular," says Tom Vierhile, a director at Datamonitor. "We’re seeing a big drop in the use of words like diet and dieting and companies are using words like zero which carry less baggage.”

    • The Detroit Free Press reports that “a day after the state approved tax incentives for a new Meijer superstore in northwest Detroit, more evidence emerged Wednesday showing that the deal is close to being finalized.

    “Detroit Public Schools said that it plans to close within 60 days on a $2-million sale of the 26-acre parcel of the former Redford High School to a real estate entity, Lormax Stern Detroit Development, to be used for the Meijer store. The Meijer store would mark West Bloomfield-based Lormax Stern's first project within the city of Detroit.”

    • The Seattle Times reports that an old Safeway building in downtown Bellevue “is bustling once again” as an independent grocery store. “Vacant since 2007, the 24,500-square-foot building reopened last week as Your Local Market, a grocery store dedicated to providing a mix of organic items and popular nonorganic brands such as Coca-Cola and Kellogg cereals.” CEO Jason Brown says that “eighty percent of the store's merchandise will be organic, 20 percent nonorganic, with all prices comparable to QFC ... The store is offering home delivery within a three-mile radius and a curbside pickup option for customers who place their orders online. A cafe with Wi-Fi and a free shoeshine service also will be available inside the store.”

    Fortune has named Starbucks CEO Howard Schultz as its “2011 Businessperson of the Year.” The runners-up included founder/CEO Jeff Bezos, Facebook founder/CEO Mark Zuckerberg and Apple CEO Tim Cook.
    KC's View:

    Published on: November 18, 2011

    • Giant Eagle announced that beginning on January 9, it will have a new CEO for the first time in 30 years - Laura Shapira Karet will take over for her father, David Shapira, who has been in the top job since 1980.

    Karet has been serving as the company’s chief merchandising officer.

    Giant Eagle said that John Lucot, its COO, will take on the additional role of company president.
    KC's View:

    Published on: November 18, 2011

    MNB reported the other day that Starbucks is spending $30 million to acquire Evolution Fresh, described as “a California-based premium juice maker,” and said it plans to launch a new health and wellness-driven chain next year.

    I commented that we should expect this to be a multi-channel play - that in addition to juice and smoothie bars, Starbucks will aggressively try to expand the Evolution Fresh footprint in the packaged goods arena.

    MNB user Katherine Nilbrink responded:

    FYI: Evolution Fresh already has a packaged presence – we carry their juices in some of our Whole Foods Market stores in SoCal (they may be in other stores as well – I’m not sure how far they reach).

    I knew that. I was suggesting that we’re going to see an expanded presence, and didn’t mean to imply otherwise.

    Got the following email from an MNB user:

    Thursday's "FaceTime" had the following statement:   “They are talking about local, organic, sustainability and good taste ... and I have to believe that these students are likely to emerge from college with more sophisticated palates and much more information about what they eat.”

    Wednesday's "Eye Opener" had the following statement:  “The wealth gap between younger and older Americans has stretched to the widest on record, worsened by a prolonged economic downturn that has wiped out job opportunities for young adults and saddled them with housing and college debt."

    College costs are rising far greater than inflation and wages have been stagnant for quite some time.  This means the overall "value" of a college degree is going down, with no end in sight to escalating costs.  What is causing these escalating costs?  Colleges are competing for dollars in a free market format, with students needing to choose between various options.  17/18yr olds are relatively immature in a worldly sense and may or may not be concerned with the eventual payback.  This is exacerbated by colleges competing, not by raising the bar of academics, but by offering the organic meals you spoke of, concierge services, remodeled dorms that rival the best hotels, etc.

    SmartMoney releases a ranking of "payback" which compares the cost of going to a college vs. the salaries coming out.  This type of thinking should be a major consideration in the choice going forward.  You go to school to learn, learn about life and learn about the topic of your future career.  What's the point of getting people hooked on a lifestyle - posh living quarters, high end food, etc. - when the very institution that is offering these will saddle them with debt that they'll be hard pressed to overcome?

    You and I would have a fundamental disagreement about the college experience ... and just to put my answer in context, I’ve been spending a lot of time in recent weeks on college campuses, as my daughter, a high school senior, goes through the application process.

    Do I think college is expensive? Of course. It is an incredible financial burden to take on, both for parents and kids, and I completely understand that people are drawing a straight line between the college experience, the college cost, and the post-college career. But too expensive? Compared to what?

    But I also think that part of the college experience is figuring out what you want to do, and trying on lots of different hats to see which ones fit best. Kids this age are supposed to be relatively immature. I’ve encouraged my daughter not to lock herself into anything at this point ... to at least accept the notion that her interests may change, and that she’s starting with a blank canvas. She deserves that, and I hope she’s able to take advantage of that.

    I would never describe local, sustainable food and sophisticated palates as necessarily being high-end. Great food does not have to be expensive ... imagination actually is more important than money. And I dearly hope that whatever my daughter’s college experience is, it is not a lowest-common-denominator experience - not in the classroom, not in the cafeteria, and not in the dorm. I want it all to raise her expectations, elevate her tastes, and educate her in ways more than academic. (Some of this education, I’m sure, would turn my hair gray if I thought about it too much. But while I may be old, I’m not too old to remember what my college experience was like in the mid-seventies. And I refuse to be a hypocrite.)

    And I got a lot of emails about yesterday’s FaceTime about Starbucks, apparently tired of being used as New York City’s public restroom, has decided to restrict access to its bathrooms in the Big Apple, even making some of them employee-only.

    One MNB user wrote:

    Clean and available bathrooms are essential in any business.   Even though I have never visited New York and am not familiar with the lack of facilities, I do have a ten-year daughter that always wants to try out the bathrooms no matter where we go.   She is a very good judge on if a bathroom is available and if it is clean, especially in our company’s stores.   There has been more than once that she has commented on how disgusting the bathroom is and she asks if the bathrooms are that bad, should we really buy our food from that store?   As a former custodian, that cleaned a lot of public restrooms, it does not have to be that bad to maintain.   Even if the bathrooms need to be cleaned more frequently, they should be made available.   It is a necessary expense and part of a positive image.

    Another MNB user wrote:

    I totally use Starbucks as not only my favorite beverage and breakfast place when traveling but as well as I count on it to be my clean restroom break ....

    In fact I can count on Starbucks in NYC or Hawaii or little towns along the I-84 to get my caffeine, food treat and a clean husband and kids even know these are the only places to 'go' that we can all agree & count on.....

    I am a gold member card carrier member and my idea if the cost of the restroom is too costly to maintain then make me swipe my card for entrance and limit the use to the restroom to those loyal customers....

    From another MNB user:

    Interesting Face Time today and I agree - bathrooms matter. 

    I'm the one who insisted we upgrade our public restroom experience with a recent remodel in one of our locations. It's not just about accessibility but your total brand store experience. And ultimately it's a basic human need.

    I'm more troubled by the fact that many of our biggest cities haven't figured out a way to address the real issue of having public restrooms available for citizens and tourists. As someone who spent many years on the road in sales, I can tell you that I'd plan my stops and the dollars I spent based on the restroom facilities.

    Yet another MNB user chimed in:

    Now for the important stuff, where do you go when you gotta go: This is one situation that is crying out for a store-by-store solution. The Starbucks at Columbus Circle, with heavy tourist foot traffic, near the edge of Central Park and directly across from a popular subway stop, is notorious for having a loo line that snakes throughout the store, disrupting the customers and ruining the ideal Starbucks experience. If I were the manager there I would lock the door. Whereas, the store at Park and 29th is a serene oasis with only an occasional line for the facilities and relatively few people exploiting their open-door policy.

    A lot of coffee shops give out wi-fi passwords that expire within a couple of hours of a purchase. Perhaps Starbucks could transfer this technology somehow to their restroom locks in places like Columbus Circle, and get some PR points for innovation in the process. I’ll bet that they could acquire that app for free by challenging engineering students to design it – and get even better PR.

    Good idea.

    Another reader writes:

    While I suspect that there will be a truckload of polarized opinions on the bathroom issue, my own belief is that has to be handled on a store-by-store basis.

    According to the folks at Chowhound, NY requires bathrooms for places with more than 20 seats. Many of Starbucks competitors (i.e. Dunkin) have already closed their bathrooms.

    Living in Portland, I encountered all manner of solutions. Many Starbucks allowed access only by key, which is less than ideal. Some required employees to unlock the door on a per case basis. These are not in the majority, but they're no different than QSR units in other urban areas. While in college I worked at a coffee shop with open access bathrooms and that meant to expect any or all of the following, often on a routine basis: prostitution, junkies passed out on the toilet, blood sprinkles on the walls from a missed vein, people changing clothes and leaving their soiled clothes behind. Every time one of us found someone passed out in a stall it triggered the following: EMS, Fire truck, witness statements, report for corporate, etc. And you probably wouldn't be surprised what happens if they actually died--which happened about once a year.

    My point here is that I suspect many who bristle at the locked (or keyed entry) bathrooms don't have a very clear picture of all of the things that can--and do--go on in those bathrooms. It's a heck of a lot more than the mere addition of a few sketchy looking homeless dudes.

    Do I think every Starbucks unit in NY should shutter their bathrooms? No. But in instances or neighborhoods where the above mentioned behaviors become the norm, I don't see a lot of choice.

    But the bottom line is that this is something customers understand as an urban neighborhood issue and not something about a larger corporate mission statement. Put another way, everyone whose ever travelled our nation's highway system always remarks that McDonald's is the place of choice to stop because you can always be assured of clean bathrooms. But common sense tells us that this maxim goes by the wayside the minute you hit NYC.

    And, from another MNB user:

    I agree with you on Starbucks locking restroom but also understand their concerns.  I wonder how much it would cost to put a scanner on the restroom lock, and print a barcode on each receipt that is unique every day.  This would ensure that the restrooms were used by customers only.

    Another great idea.

    Another reader offered:

    I don't know about yours, but my father told me to always buy something when you went into a business and used their restroom.  Gas station, Dairy Queen, Starbucks - all the same in his book - and in mine.  I suspect that more than a few other parents told their children the same thing, and if Starbucks closes the doors on the restrooms, they might be able to save some more money by purchasing smaller cash drawers.

    And yet another comment:

    Starbucks as a “third place” certainly needs to be aware of changes that will drastically alter its perception among its patrons.  The availability of a bathroom is part and parcel to the appeal for many people.  Maybe they’d prefer a line of coffee drinkers relieving themselves on the side of the building?  Surely such depraved behavior doesn’t happen, though, and certainly not in NYC…  Places like Panera will certainly benefit from any restrictions of this nature – we already enjoy that chain much more as our remote office.

    My wife and I were on our honeymoon in Europe a few weeks back and we stopped by the Starbucks in Vienna across from the State Opera House.  I don’t know if this is in play in America, but your receipt includes a bathroom access code.  Without it, you can’t use the facilities.  That may be a meet-in-the-middle option Starbucks can employ more broadly.  That being said, I’ve been in a number of Starbucks where the “campers” have taken up so much of the seating that we had to get our stuff to go – we know this was a past gripe of Starbucks.  If these restrictions are part of an attempt by corporate to discourage the Occupy Starbucks crowd, I can see the merit but it’s a delicate procedure.  If they go too extreme (employees only might be), the collateral damage might be significant.

    Responding to the piece this week about the Salvation Army taking credit cards and not just cash at its familiar holiday charity outposts, one MNB user wrote:

    Sure you’re ahead of me on this but couldn’t help notice that in the same posting you mentioned the “eye opening” approach that the Salvation Army is using by accepting plastic for donations while the USPS so pathetically out of touch that they herald the receipt of junk mail as justification for them not to be put out of their misery. It would seem to me that some of that money they’re throwing down the toilet funding these ridiculous ads could be better spent on a recruiter to find the people at the Salvation Army that clearly are thinking outside the box – two institutions that have been around forever with two distinctly different ways of thinking...
    KC's View:

    Published on: November 18, 2011

    • In Thursday Night Football action, the Denver Broncos defeated the New York Jets 17-13.

    • Major League Baseball said yesterday that a series of changes will be taking place, including a move to a two-wild-card-team system that would add a layer to the existing playoff system.

    The playoffs change would mean that there would be two wild card teams in each league - the two teams with the best records that did not win divisional championships - that would play either a one-game or best-of-three game playoff to determine which one will move onto the divisional series. MLB said it hopes that this system could be in place in time for the 2012 season, and suggested that it will increase playoff enthusiasm in additional markets.

    At the same time, MLB said that the Houston Astros will move to the American League West division, from the National League Central, which will have the effect of creating two leagues of 15 teams apiece, instead of the current 16-14 split. This will mean that there will be inter-league games every week of the season, instead of during two specific periods each year.

    And finally, MLB announced that Drayton McLane has sold the Houston Astros to Jim Crane, a Texas financier.
    KC's View:
    I’ve never been a big fan of the wild card and inter-league play, but I’ve grown to accept the fact that this probably means that I’m just old and set in my ways. If this makes baseball more successful and popular, I’m okay with it.

    However, I remain steadfast in my belief that the designated hitter rule ought to be banned.

    Published on: November 18, 2011

    I did enough navel-gazing in my “Ten Years And Counting” note above, so I’m not going to engage in any more this week.

    I would, however, like to use this space to thank one person who I did not mention earlier: Mrs. Content Guy, who tolerates my crazy schedule, frequent trips, and long hours spent on the phone and at the keyboard. Wouldn’t be possible without her.

    And here’s the thing. Sunday is her birthday. I’m not allowed to tell you which one, but I can tell you this one thing about her.

    She had me at “hello.”

    Have a great weekend, and I’ll see you Monday.

    KC's View: