retail news in context, analysis with attitude

Published on: January 3, 2012

by Kevin Coupe

Okay, I’m an Apple guy. That much has been pretty well established over the ten years that I’ve been doing MNB.

So, here are two recent Apple-related stories that grabbed my attention...

• Advertising Age reports that Apple’s website got more online traffic during November 2011 than Walmart’s ... and, in fact, was behind only Amazon and eBay on comScore’s list of top-15 most-visited websites in the US.

“How is it possible that the technology maker can trump the world's-largest retailer online? Because of iTunes. The digital-content store made up about 30% of Apple's more than 79 million in U.S. unique visitors last month. Apple gets almost as many web visitors as the largest newspaper site, that of The New York Times.
Ad Age goes on: “Huge iTunes traffic is good news for publishers looking to sell their products online. Digital content, which includes books, music and TV shows, is the fastest-growing e-commerce category by sales this holiday shopping season, ComScore has found. Overall e-commerce sales are up about 15% from last year, but digital-content sales growth is double that.”

The thing to keep in mind here ... this has been a longtime theme here on MNB, and no doubt will continue to be one in 2012 ... is that while traditional retailers often don’t sell “digital content,” they need to keep these kinds of surges in mind. The shopping habits of entire generations are being reshaped, and even traditional retailers need to consider how they are going to be relevant to these shoppers.

• And, the San Jose Mercury News reports that work is scheduled to begin “any day now” on a new prototype Apple store in Palo Alto, about a block away from an existing Apple Store there.

Other than to say that the new store will build on the company’s retail experience and “provide a large open retail area that is visible from outside," little is known about what will make the new store a prototype for the future.

It is a pretty good bet that the new Apple prototype store will, to paraphrase the company’s iconic ad, “push the retailing world forward.” It is a pretty good bet that the new prototype will leave the poseurs who created the highly imitative Microsoft Store concept scratching their heads.

And here is another pretty good bet. Apple has raised the bar so high that if it does not do these things, you’ll hear a lot of disappointed reviews in the old and new media, with people wondering if, post-Steve Jobs, Apple has lost something off its curve ball.

All interesting stuff to think about and look forward to in 2012...

Published on: January 3, 2012

The Los Angeles Times reports on the “growing contingent of men taking over grocery duty,” a continuing legacy of the recent recession and ongoing recessionary mindset that “hit men disproportionately with layoffs and left many of them home to manage the household.”

According to the Times, “The nation's biggest food and personal products manufacturers are taking notice, trying to market products and adjust store layouts to cater to men. It's a paradigm shift for the $560-billion retail food industry that has patently referred to the primary customer as ‘she,’ focusing marketing and advertising firepower on women, and mothers in particular — sometimes making fun of dads in the process.”

Here are the numbers detailed in the Times story: “According to consumer research firm GfK MRI and an ESPN report, 31% of men nationwide were the primary household grocery shoppers in 2011, up from 14% in 1985.

“Some estimates are higher. A nationwide survey of 1,000 fathers conducted by Yahoo and market research firm DB5 released early this year said 51% were the primary grocery shoppers in their household. Of that group, 60% said they were the primary decision makers regarding consumer package goods, which includes packaged food.”

And here is at least one anecdotal success story: “Procter & Gamble Co. began testing ‘man aisles’ in 2009 and is expanding the program into some Wal-Mart, Target and Walgreens stores as well as other chains in the U.S. and Canada in 2012 ... The man aisle puts all men's products, including P&G competitors, in one place, with shelf displays and even small TV screens to guide men to the appropriate skin care items.” The company says that “the tests have gone well, with men spending more time in the aisles and, ultimately, more money.”

Published on: January 3, 2012

Reuters reports that Wegmans, Wawa and W.L. Gore & Associates (maker of GORE-TEX clothing) “have joined the ranks of hot tech companies like Facebook in the debate over a U.S. securities rule that can force privately held companies to disclose finances they'd rather keep secret ... They are lobbying for legislation that would increase the number of shareholders a company can have before it must make detailed disclosures to the U.S. Securities and Exchange Commission, and exempt employees from that cap.

“The cap has stood at 500 for over four decades.”

The companies say that “the limit threatens their ability to offer stock-based compensation plans to senior managers,” according to the story.

Paul Speranza, vice chairman and general counsel of Wegmans, tells Reuters that “"as we grow, we don't have the ability to retain and attract the number of people we'd like because of the restriction of this rule.” Speranza says that Wegmans is “quite close” to the shareholder limit.

Published on: January 3, 2012

The New York Times had an interview over the weekend with the retiring CEO of IBM, Samuel J. Palmisano, who over the past decade has led a company that has “shed multibillion-dollar businesses. It chose higher profit margins over corporate size, and expanded aggressively overseas, seeking sales, low-cost engineering talent and quicker organizational reflexes.” And has turned IBM into “a textbook case of how to drive change in a big company — when so much of the study of business innovation focuses on start-ups and entrepreneurs.”

Palmisano tells the Times that his guiding management principles comes down to four questions:

“Why would someone spend their money with you — so what is unique about you?”

“Why would somebody work for you?”

“Why would society allow you to operate in their defined geography — their country?”

“And why would somebody invest their money with you?”

Published on: January 3, 2012

The Arizona Republic reports that “Bashas' Family of Stores announced Friday that it had refinanced approximately $185 million in secured debt that had hobbled the company since its Chapter 11 reorganization last year ... The new financing package enables Bashas' to repay its secured lenders more than a year ahead of schedule and provides it with a revolving line of credit to finance its operations.”

“‘The company will operate under more normal business circumstances instead of solely relying on its own cash,’ said Bashas' Vice President Edward N. ‘Trey’ Basha III in a letter to employees. He added the deal also provides the company with more stability and security to navigate the challenging economic times.”

Published on: January 3, 2012

The Wall Street Journal reports that “the place to see-and-be-seen” in Palm Beach, Florida, last week “was not Chez Jean Pierre (a longtime hoity-toity bistro on North County Road with Dover Sole Meuniere and Hazelnut Souffle, you know the type) or roaming the racks of the 70% off sale at Saks (better to do that online, in the privacy of your own Roberta Roller Rabbit pajamas), but rather, the newly remodeled Publix, which opened the doors to its 45,000-square-foot mecca of glorious grocery moments before all the New Yorkers (and their staffs) came down for the holidays.”

The story goes on: “This Publix is actually still a Publix, filled with Boar's Head products and Hot Pockets, Special K cereal and Wonder Bread, Cosmopolitan magazine and Greek yogurt. Still, there are certainly more snooty Jimmy Choo- and Lilly Pulitzer-clad ladies roaming its aisles than probably any other supermarket on the East Coast. It is the Palm Beach Publix, after all.”

Published on: January 3, 2012

• Score one for at least one of Walmart’s training efforts.

The Associated Press reports that North Carolina police have arrested a man there who tried to use a $1 million bill at a Walmart while trying to buy $476 worth of products.

There is no such thing as a $1 million bill. In fact, AP notes, “The largest bill in circulation is $100. The government stopped making bills of up to $10,000 in 1969.”

Published on: January 3, 2012

Oakville Grocery Company’s flagship store -  originally opened in 1881 and said to be the oldest continually operating grocery store in California - announced that it “will temporarily close its doors from January2nd, to Mid-March of 2012, for a necessary structural renovation. This much needed restoration will preserve the charm and ambiance of the historic property, while also ensuring that the store will be able to serve the community for decades to come.”

According to Guy Byrne, construction manager for the project, “The store was built without a foundation. In order to preserve the original building there must be a foundation added and reinforcement of all of its walls.” Moving the post office to another building on the property - part of the approved permitting for the renovations and additions, -  will provide a more comfortable customer flow and will also make the store ADA compliant. An update to the electrical system will make the property more energy efficient, and there will be more room created for prepared and packaged product. There will also be two small buildings added for storage and back of house operations; and two additional public restrooms.”
The company says that “other improvements to the store will include updated food and beverage equipment, energy saving refrigeration, and an increase in fresh food selection. Customers can expect to see many more Oakville Grocery private label products from Napa and Sonoma, as well as a major increase in baked goods. Oakville Grocery Company exclusively carries products from the state of California, with an emphasis on Napa and Sonoma counties.”

Published on: January 3, 2012

• The Wall Street Journal reports on how Best Buy got so aggressive with discounts and free shipping offers during the recent holiday season that it ended up not being able to service the resultant “crush of customers.”

According to the story, “Angry customers flocked to Best Buy's online forums in recent days, complaining they received notices informing them that the purchases they had made weeks ago were canceled. The retailer said the problem affected customers who made online purchases on Thanksgiving weekend, as well as the following Monday, a popular Internet shopping day known as Cyber Monday.

“It was Best Buy's second online problem of the holidays: the company flubbed a pre Black Friday special for customers who spend at least $2,500 a year. A technical glitch left them unable to check out and complete their Web purchases.”

Best Buy says that the problems affected less than one percent of orders placed on Thanksgiving weekend. Still, the company concedes that it was “an unacceptable delay between order confirmations and cancellations, and for that we are very sorry. The challenges related to this situation are being addressed.”

• Amazon.com says that “2011 was the best holiday ever for its Kindle-brand e-readers and tablet computers,” according to an Associated Press story, which notes that the company says that “people bought more than 1 million Kindles each week in December.”

Published on: January 3, 2012

• International Supermarket News reports that Tesco has thrown “down the gauntlet” to its UK competitors, cutting the price of some 350 “everyday products.” Richard Brasher, Tesco’s UK chief, tells the paper that the move reinforces the fact that Tesco’s price cutting will be a consistent strategy in the new year, and that this ”is a rolling campaign to help customers save more money every day on the essentials they need the most.”

The move comes, the story says, as William Morrison Supermarkets relaunches a value-driven private brand called M Savers as “totally reviewed and improved.”

Published on: January 3, 2012

• During the Christmas vacation, Sears Holdings announced that it plans to close between 100 and 120 Sears and Kmart stores, with CEO Lou D'Ambrosio citing "the difficult economic environment, especially for big-ticket items."

The Chicago Sun Times reports that the closings take place in the wake of “poor sales during the holidays — the most crucial time of year for retailers — raising new concerns by retail experts whether Sears will survive long term.

“Retail experts are speculating anew about Sears’ future, including expecting a private equity firm to buy the company on the cheap, take it into pre-packaged bankruptcy protection, get rid of costly leases and operate it as a smaller chain dedicated to appliances, tools, electronics and other so-called hardlines businesses.

• Can it.

The Washington Post reports that “almost conspiratorially, craft breweries nationwide ... have been embracing aluminum. Some of them, such as Florida-based Cigar City Brewing, are among the most highly regarded breweries in the country. In certain circles, 2011 might be remembered as the Year of the Can.”

The story goes on: “So what accounts for the mainstreaming of what Oskar Blues once dubbed the Canned Beer Apocalypse? For one thing, cans help beer stay fresh by blocking light, which can turn it skunky, and by keeping out oxygen better than many bottles do. Made from recycled materials and easy to recycle, they also appeal to sustainability-oriented breweries, and they’re more portable than glass, which helps explain why they’ve caught on in outdoor-activity Meccas such as the Rockies.

“In addition, although the decision to can comes with steep up-front costs — for special equipment and bulk can orders — brewers save money in the long run.”

• The California Grocers Association (CGA) has filed a petition for writ of mandate to stay a California Alcoholic Beverage Control Industry Advisory that it says “attempts to provide guidance in complying with a new state law to regulate alcoholic beverage sales at assisted self-checkout terminals.” CGA claims the Advisory is inconsistent with the statute, unenforceable, and in violation of existing law.

The new law, which took effect on January 1, 2012, says that “no privileges under an off-sale license shall be exercised by the licensee at any customer-operated checkout stand located on the licensee’s physical premises.”

Published on: January 3, 2012

On the evening of Monday, January 16, during the annual National Retail Federation (NRF) Show in New York City, MNB will be hosting a special retailer-only reception that is sponsored by Balance Innovations and WorldPay. (Michael Sansolo and I can promise terrific wine and beer, splendid food, and sparkling conversation...and maybe even a cameo appearance by Mrs. Content Guy.)

If you are a retailer attending NRF, please let me know ASAP (email me at kc@morningnewsbeat.com . There are just a few slots left on our retailer-only guest list, and we’d love to have you join us.

Published on: January 3, 2012

...will be posted on Wednesday this week.

Published on: January 3, 2012

will return.

Published on: January 3, 2012

Your workforce, like your consumer base, is changing fast. One approach does not fit all – you need new competencies and strategies to compete.

At the NEW CPG Retail Diversity Forum-- March 6-8 in Dallas – you’ll learn what the industry’s top companies are doing to recruit, retain and manage their diverse work teams and how you can increase your productivity and market share, too.

Diversity is the biggest opportunity in business today. The NEW Diversity Forum is where all the pieces and all the players come together.

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