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: January 6, 2012

    by Kevin Coupe

    It never ceases to delight me when technology makes it possible for new businesses to exist.

    Take, for example, a website called ParkatmyHouse.com, which Fast Company describes as “a site that connects homeowners and businesses that have parking to spare with the desperate drivers who spend hours circling around the block.”

    The site started in the UK, the brainchild of a guy who - go figure - had trouble finding a parking space and wondered, "Wouldn’t it be great if I could knock on that lady’s door, give her $10, and park in her driveway?" Now, it has expanded to New York, Boston and Washington, DC.

    The site describes the service this way:

    “We're a match-making service for property owners and drivers. Simple. We manage the whole process seamlessly through our website. If you’re a driver you can compare a range of parking spots and book the cheapest and most convenient.

    “If you're a property owner you can list your spot for rent, see your bookings and check your earnings. But it's not just homeowners who benefit from ParkatmyHouse. We rent out spots on behalf of anyone who has a space to fill, from parking lots to malls and churches to synagogues.”

    I know that when I read about ParkatmyHouse.com, my first reaction was, “Why didn’t I think of that?”

    But the simple reality is that most of us never would have thought of that ... and other eye-opening ideas enabled by technology.

    I am delighted.
    KC's View:

    Published on: January 6, 2012

    The Lakeland Ledger reports that Publix Super Markets has decided to drop its limited test of an online ordering and curbside pickup business, which it has been piloting since 2010 at one store in Tampa and two stores in Atlanta.

    “While our Curbside associates have created many loyal Curbside customers, the number of consistent customers who chose to use this service was considerably less than required to meet our predetermined expectations,” spokeswoman Shannon Patten told the Ledger in an email.

    The paper notes that in 2001, the retailer “tested a home delivery service in South Florida called PublixDirect, but ended it two years later because of underperformance.”
    KC's View:
    First of all, let’s get a bit of full disclosure out of the way...Publix was working with MyWebGrocer on this test, and MyWebGrocer is a longtime and valued MNB sponsor.

    I would question Publix’s decision on this issue, but this has nothing to do with MyWebGrocer’s sponsorship; it has everything to do with where I think the grocery industry is headed in the long run. I would also concede that Publix knows a lot more about its business than I do, and that I’m probably on thin ice criticizing a company as successful and respected as Publix. (Not that I ever let little things like experience and expertise stop me...)

    That said...

    I’m curious what “predetermined expectations” means. I’m curious to what extent Publix really marketed the availability of online shopping and curbside pickup. (It is hard to market something that, by virtue of the fact that it is only available in three stores, is at out-of-synch with the rest of the business model. And I know people in both markets who had no idea that Publix offered such a thing.) I’m also curious to what extent Publix was able to marshal cultural support for this initiative within the organization. (Also difficult for an offering probably seen as an outlier.)

    Listen, Publix clearly knows its customer base, and has clarity of vision about what its priorities are. I respect that.

    But I also think that the world is changing, and it is better to stay engaged with initiatives like these than to walk away from them. Down the road - maybe not today, maybe not tomorrow, but soon - Publix will find its market shares being nibbled away at by someone in the online grocery business. It is inevitable. And by making this decision, now, Publix will have lost any first mover advantage.

    Published on: January 6, 2012

    Ahold-owned Giant Food Stores of Carlisle, Pennsylvania, said yesterday that it will acquire 16 Genuardi’s stores in the Philadelphia region from Safeway, for $106 million. The purchase is expected to close during the first half of 2012, and will result in the Genuardi’s stores being converted to the Giant banner.

    “Giant is always looking for convenient locations to better serve our customers,” Rick Herring, Giant’s president, said in a prepared statement. “We are very excited to have the opportunity to expand our presence in greater Philadelphia and serve new customers. We look forward to providing customers with the quality, selection, and savings that they have come to expect from Giant.”

    Safeway acquired Genuardi's in 2001, but there has been much speculation that the company was looking for a way out.

    "We have made the decision to exit the greater Philadelphia market, including four stores in New Jersey, and focus our resources in those operating areas where we have a stronger presence," said Steve Neibergall, president of Safeway's Eastern Division.
    KC's View:
    Hard to argue with anyone’s rationale here, and hard to think that eventually the rest of Genuardi’s will be sold off by Safeway and the brand name will become just a memory.

    Published on: January 6, 2012

    There are numerous published reports saying that Barnes & Noble may decide to spin off its Nook e-reader business, a move that experts say might help grow the business by attracting new investors and separating it from the bookseller’s struggling traditional operations.

    “The Nook business has been a growth business for Barnes & Noble,” Sarah Rotman Epps, a senior analyst with Forrester Research, tells the New York Times. “But there’s no doubt that continued growth and international expansion will take sustained investment that Barnes & Noble shareholders will not have the patience for.”
    KC's View:
    The Nook has been a success story for Barnes & Noble, helping it avoid the utter irrelevance that doomed Borders and drove it out of business. But reports have suggested that Barnes & Noble does not make money on Nook sales, and that its shareholders simply won’t stand by even a successful product that does not immediately improve the company’s bottom line.

    This is interesting, since the competitor that Barnes & Noble really ought to be worried about is Amazon - and one of the thing that distinguishes Amazon from almost all comers is the fact that it is is willing to lose money in the short term if it believes that these losses actually represent an intelligent investment in a long-term strategy. That was the case with its Prime loyalty program, which lost money but compensated in the long run by generating a lot more sales. And if most reports are right, it isn;t even making money on the Kindle, but is using the e-reader in all its iterations as a way of selling more content.

    It seems to me that one of the advantages that Amazon has in this case is an ability - a willingness - to think strategically, and use a variety of tactics to support its strategies. Barnes & Noble (and a lot of its other competitors selling everything from books to movies to food) is thinking tactically and short-term.

    This could be a fatal mistake.

    Published on: January 6, 2012

    • The Huffington Post reports that a “major pension fund and longtime investor in Walmart has blacklisted the retailing behemoth, citing poor labor practices and the company's anti-union stance as the driving force behind its rejection ... On Tuesday, the Netherlands' biggest pension fund, Algemeen Burgerlijk Pensioenfonds, with more than $300 billion in assets, announced that it was blacklisting the largest retailer in the world for noncompliance with the United Nations' Global Compact principles.”

    According to the story, “Walmart typically shrugs off criticism of its labor practices as union-driven propaganda and insists that its employees are happy and well-managed, but investing experts say that when one of the largest pension funds in the world divests, the company would be wise to listen to the message.”
    KC's View:

    Published on: January 6, 2012

    There are a lot of things for sale on Amazon.com.

    But test answers? Didn’t see that one coming...

    The Los Angeles Times reports that 10 high school students in Newport Beach, California, were able to essentially buy the answers to a sophomore history exam by paying for “so-called test banks, which provide chapter-by-chapter questions for tests, which textbook publishers provide to ensure teachers craft exams that properly assess student learning.”

    No decision has been made about disciplining the students, and the publisher has taken the test banks off Amazon’s site.
    KC's View:
    Sure, the offending students ought to be forced to take another test for which they don’t know the questions. That seems only fair.

    But at some level, maybe they ought to be cited for imaginative and entrepreneurial thinking. I never would have thought to look for the test guides on Amazon. And I think you could make the argument - and I’ll probably get a lot of grief for this, especially from Mrs. Content Guy, who is a teacher - that these kids were a lot more imaginative than the teachers, who relied on canned questions and answers to assess what their students knew. I’ve always hated it when teachers taught from the book and gave tests from the book; I always felt, as a student, that they were asking me for more effort than they were willing to give.

    Besides...isn’t it possible that these kids were just emulating James T. Kirk, who beat the Kobayashi Maru test, and said, “I changed the conditions of the test; got a commendation for original thinking. I don't like to lose.”

    Published on: January 6, 2012

    USA Today reports this morning that a number of fast food chains are celebrating the new year by offering special discounts designed to generate consumer traffic.

    According to the story, “The fast-food business typically takes a dive in January as folks who overspent on holiday gifts opt to eat at home on the cheap. So it takes special lures from the fast-food giants — from Taco Bell to Pizza Hut to Wendy's — to get financially drained folks spending again.”

    Advertising Age reports that Aldi has pulled out of a government-sponsored healthy eating campaign, suggesting that the program was leveling the playing field in an area where the company sees itself as having an advantage.

    Aldi said in a statement that it is "one of the few supermarkets to offer consistently low prices and great value; therefore, no exclusive offers have been created for this partnership. Aldi works hard to offer everyday low prices that shoppers can trust. We maintain exceptional supplier relations, and we are committed to sourcing products locally where possible."

    The Change4Life healthy-eating campaign is designed to work with major chains by offering special discounts on items such as fruits, vegetables and low-fat yogurts.

    • Fresh & Easy Neighborhood Market said yesterday that it is expanding its “popular and affordable” eatwell and Goodness ranges with more than 60 new products. Fresh & Easy introduced eatwell in 2010 “for customers seeking a nutritionally balanced approach to eating without compromising on taste or quality,” while fresh&easy Goodness products are designed to “give parents more wholesome options for fun meals and snacks for children.”
    KC's View:

    Published on: January 6, 2012

    • The Fresh Market announced the promotion of Sean Crane to Executive Vice-President and Chief Operating Officer. Crane will continue to report directly to Craig Carlock, President and CEO.
    KC's View:

    Published on: January 6, 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.
    KC's View:

    Published on: January 6, 2012

    Got the following email from MNB fave Glen Terbeek:

    I read your FaceTime posting re: Great Expectations with interest.  Yes, technology creates different expectations than print news.  However, I think that a different point should be made.

    When a book, article or research paper only reports history, it will always become old news in a hurry, regardless of the the form that it takes. Especially when it is reporting fast moving current event details.  As a result it has short term use.

    In contrast, good reporting take the risk of predicting the future by extrapolating the many currents events into long term future trends.   Usually there are only a few long term trends that matter in shaping the future.  Accordingly, current events usually can be grouped into one of these trends, since they are often symptoms of or results of the trend.  Unfortunately it is easy to get too focused on the short term symptoms and lose track of the trends so important to long term success.

    I would argue that most of the research for the retail industry, unfortunately often done by "the associations", continues to study and report the news. After all, it is risk free for the reporters, it doesn't upset anyone; but it surely does not serve the real needs of the readers/users of the research.

    Case in point.  The whole ECR movement!  The industry couldn't think past the current mass marketing industry model; it ignored the emerging trends.  The trends that should have been addressed at the time were flat population growth, saturation of products and stores, technology trends that empowered the shoppers, and the false economics related to the above trends (trade dollars practices to mention one).  I argued the enemy at the time wasn't discount department, clubs, or discount drug stores (remember them);  it was the industry itself. The industry let these alternative formats in and thrive by 1) not understanding and 2) not addressing the future game changing trends.

    Instead, the emphasis was on the same old supply chain efficiency goal;  unfortunately to the disadvantage of local market/shopper differentiation and/or effectiveness. The industry tried to emulate the "enemy" rather than trying to understand why they were becoming a threat!  Real future trends always force a change in the way a business industry works if it is to continue to be successful.  My experience is that change is not a natural reaction of the supermarket industry, their business practices, organizations, and Wall Street don't allow it in most cases.

    MNB has done a great job in reporting and debating current events with a "provocative attitude".  Hopefully it will help management Identify the game changing trends that will shape the industry's future.


    I’ll try.




    We continue to get email about Best Buy and what can accurately be called its inconsistent customer service profile.

    MNB user Frederic Arnal:

    I was fascinated by the discussion on how Best Buy performed during the holiday season.  Some negatives but on the whole more positives.  My experience was very positive.  I buy all of my electronics for business and home from Best Buy.  Their young sales people are very knowledgeable and helpful.  At Christmas I bought a number of items that were happily price matched at the store even with their own on-line site.

    I think that any company as large and complex as Best Buy will have some issues but I also think we should be careful in assuming that a few individual experiences are representative of the whole organization.


    From another MNB user:

    Always fascinating reading consumers' wide range of customer service experiences from the same retailer.  Goes to show that where the rubber in your strategy hits the road is always with your people. But what really stood out for me was the lack of transparency in pricing at Best Buy. Only the savvy, well-informed customer gets the best price. It sounds like their in-store pricing is based on nearby competitors, whereas the on-line strategy is based on on-line competitors. When you are a  "clicks and bricks" retailer, you'd better be prepared to become a whole lot more transparent, and consistent, with your pricing. Going for the short term margin gain by having different in store pricing ultimately may be the demise of your credibility with consumers, and ultimately, your brand.

    Another MNB user chimed in:

    Wouldn’t it just make sense for a retailer to keep their prices the same, in-store vs. online? With the majority of consumers looking for the best price (either on-line before they shop or with their smart phones on-the-go), it seems like a hassle to have to worry that the price you are looking at in the store might be cheaper on that same companies website.. Even if the store will match their own on-line prices, why put in the extra step? As a young consumer with an iPhone, if I were in a store and saw a higher price then that store’s website online, I would feel tricked and deceived, like the store does not want me to know the price is cheaper online. I am not suggesting consumers stop shopping around for a better price, especially on-line, but why the higher prices in store?




    I love it when I get emails from the roads like this one:

    Just wanted to share my Kmart story.  I went into our local Kmart for a few items, because it was close and I didn't have to park to far away (should have been my first clue).  I bought a gift bag $2, some candy - 3 pcs at $.75 each, a tool for my son's bicycle fanny pack for $13 and a scooter $75.

    I wanted to stop into Target (just across the street) to pick up a gift I had seen there on an earlier visit.  But as I was looking, I ran across the exact same tool for my son's bicycle for $9.99  . . . so I thought, what the heck, I'll go check and see if they have the scooter - sure enough, $55.  Really?  A $20 difference on one item?  And it was their everyday price.  So, on average Kmart's retail is 25% higher than Target??

    I was so mad that I returned the tool, scooter, $2 gift bag and $2.25 of candy and vowed to NEVER shop in Kmart again.  And you can believe no one in my office will shop there either.

    Not only is it absurd to be priced so much higher than a store across the street, but it angered me because they wasted my time.  So I am not surprised to hear about their store closings, not even if one of them is in Uniontown PA.





    And sometimes it is emails like this one that give me the greatest pleasure:

    My wife did not want to see the new Tom Cruise movie due to the three previous less than average performances of TC.  When I told my wife that you approved (not personally but a recommendation that I read in a newsletter) of MI4, she reluctantly agreed to go.  Surprise, the movie exceeded our minimal expectations.

    I was as surprised as anyone that Mission: Impossible - Ghost Protocol was a terrific movie. But I love being surprised like that.
    KC's View:

    Published on: January 6, 2012

    I learned something about myself this Christmas.

    I used to think that I was a resolutely traditional guy when it came to the holidays. I love Christmas trees, I love poinsettias, I love decorations, and I love the whole Christmas morning routine.

    This year we tried something different. We’re getting to the point where we realize that there are not that many years left during which we will be able to take our kids on a family vacation - and the stars aligned this year so we could take them to Florida for nine days at the beach.

    So we did. Traveled down on Christmas Eve and back on January 2...and it all was a breeze. I have to tell you ... if I never see a snow-covered fir tree again, I’m okay with that. I love palm trees decorated for Christmas. I loved getting up on Christmas morning and taking a walk on the beach with Mrs. Content Guy, and then coming back and sitting on the porch, sipping coffee and waiting patiently for the kids to wake up. And I loved going out for Christmas dinner, and having butterfish, which I’d never had before and simply loved as it melted in my mouth. I loved snacking on conch fritters and eating blackened grouper sandwiches for lunch.

    I’m not sure we’ll do it again next Christmas. But if we head south again for the holidays, I’m thinking Christmas in the Caribbean....




    The only downside of the Christmas vacation was we were in a place without easy access to movie theaters...so I didn’t see anything new over the holidays. (I have to catch up this weekend...) But that meant I read a whole bunch of books...

    “The Drop” is the new Harry Bosch novel by Michael Connelly, and it maintains the series’ reputation for being one of the best available today. In this one, an aging Bosch - a dogged LA police detective - has to solve two cases. One is a “cold case” that dates back decades, while the other is current and ripe with political implications (”high jingo,” the cops call it). The writing is brisk, the dialogue is biting, and Connelly continues to evoke memories of Raymond Chandler as he turns Los Angeles into a vivid, compelling character in his books.

    Michael Sansolo previously raved about “Boomerang,” by Michael Lewis, in his column, so I won’t belabor the issue except to say that the author of “Moneyball” and “The Big Short” has crafted one of the scariest books I’ve ever read about the collapse of the world financial system. It is accessible and fascinating and you won’t be able to put it down. And when you do, you’ll have nightmares.

    I mentioned ‘The Right Fights Back” yesterday in FaceTime, but let me reiterate that it is an entertaining look at the ongoing GOP nominating process. It may be a little “in the weeds” for people who are not politics junkies...but I ripped through it and was sorry when it was over.

    Finally, I read a series of e-books by Bob Morris, the Florida-based mystery novelist and travel/food writer. “The Whole Shebang,” “Short Road To Hell,” and “Gut Check” are essentially essay collections on the subject of food, drink, marriage, travel and general misbehavior. I loved them...maybe because I was sitting on the same beaches and eating the same food that he was describing...but can recommend them as being utterly diverting. (I’ll have more to say about Morris and his books in an upcoming column.)




    My wine of the week - the 2009 Muschen, an Italian blend of Sangiovese, Merlot and Cabernet Franc that “is a little young” (according to my son, the wine merchant) and that seemed to me to be just lovely.




    That’s it for this week. Have a great weekend, and I’ll see you Monday.

    Slainte!
    KC's View: