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    Published on: February 10, 2012

    by Kevin Coupe

    The bankrupt Eastman Kodak Co. announced yesterday that as a cost-cutting move, it will stop making digital cameras, pocket video cameras and digital picture frames, a move that it said will save it more than $100 million.

    The irony, of course, is that Kodak actually invented the first digital camera ... but never pursued the technology because it was seen as a threat to its core film business.

    Now, the company says it has to narrow its product portfolio. Reuters reports that Kodak plans to “focus on seeking licensees to expand its brand licensing program. It said it will continue to offer online and retail photo printing, and desktop printers,” as well as providing products and services to the film and television industries.

    It is an Eye-Opening business lesson. Kodak comes up with revolutionary technology that, as well all know, had a revolutionary impact on the world of photography. But instead of owning it and riding the revolution to fortune and glory, it decided to cover its rear end ... a move that let far more exposed.

    And now, it seems, Kodak will make money at least in part by licensing out its name and brand equity.

    A name that in some circles may have value. But one that, for any business person, should symbolize corporate myopia and entrepreneurial malpractice.
    KC's View:

    Published on: February 10, 2012

    Ahold-owned Peapod announced this week that it is teaming with Titan, the largest transit advertising firm in North America, to install virtual supermarkets at Philadelphia area train stations, allowing people to use their smart phones and a Peapod application to scan QR codes and purchase products that can be delivered to their homes or offices.

    Mike Brennan, COO, Peapod says, "We chose Philadelphia to launch this initiative because it's a new and exciting market for us. Titan had the most compelling media property in the city and it just made sense for us to let commuters know about our free, convenient application."

    "It's taking the grocery store and literally putting it on the train platform," said Jeff Randazzo, executive vice president, Titan general manager. "Combining our media formats with a compelling call to action like Peapod's grocery app is a great use of our medium. Who wouldn't want to put commuting time to good use by grocery shopping?"

    Titan estimates that Philadelphians spend more than two-and-a-half hours a week commuting.

    The concept is similar to one that Tesco originated in the Seoul, South Korea, subway system and now is expanding, and that Sears, Kmart, Ocado and even Procter & Gamble have been testing.
    KC's View:
    I think I’ve made my position on this concept clear - it is a smart move for Ahold / Peapod, and I think we’re going to see a lot more of it. Look for Walmart to test the concept in some of its small stores, using QR codes and virtual displays to allow people to access the selection normally only available in its much larger supercenters.

    And I think you’ll see Amazon moving in this direction as well; for my money, it makes a lot more sense for Amazon than opening bricks-and-mortar stores, which is also reportedly on its agenda. (Then again, Jeff Bezos has a better track record and bigger bank account than I do ... so what do I know?)

    Competitors should take note...especially since Titan has a presence in, among other places, Los Angeles, New York, Chicago, Boston, San Francisco, New Jersey, Dallas, Seattle, Charlotte and Minneapolis/St. Paul.

    Published on: February 10, 2012

    The US Postal Service (USPS) announced yesterday that it lost $3.3 billion during the quarter ending on December 31 - a period that typically has been its strongest. It was the ninth consecutive quarter in which the USPS posted a loss.

    Management said that the post office would run out of cash by October unless the US Congress agrees to allow it to eliminate some facilities - 12 percent of existing post offices - and lay off more than 200,000 employees.

    “If the Postal Service is unable to reduce its operating costs by $20 billion a year by 2015, we may not be able to return to profitability,” said Postmaster General Patrick Donahoe. “We may become a long-term burden to the taxpayers if we are not able to make these reductions quickly.”
    KC's View:
    The hole keeps getting deeper, and situation keeps getting worse, and solutions seem ever elusive. And I still have to wonder if they are even asking the right questions. The USPS is looking to make cuts, but is it looking ways in which it can differentiate itself and compete with email on one hand and FedEx/UPS on the other?

    Just a thought here... We talk a lot here on MNB about what I see as likely disintermediation of traditional retailers by manufacturers looking to create a direct link to shoppers. Well, MNB user Jeff Folloder came up with the following idea:

    What if...the USPS pitched, say, Kraft... We have this logistics and delivery system that has every deliverable address in the US already connected.  We mean ALL of them.  Why even bother with the Walmarts and Krogers of the retail landscape?  We will integrate directly into your new website and handle all of the direct to consumer logistics for you.  Customers get what they want and you can sell whatever you want, without the whole take-a-buyer-to-lunch-and-negotiate-the-slotting-fee thing.

    Talk about the government actually doing something to promote business!  And it might even make the post office relevant again...

    This is an example of moving forward as opposed to just cutting your way to prosperity.

    Published on: February 10, 2012

    CNBC reports that Walmart is negotiating with Apple over a deal that would put Apple Stores inside some 47 Sam’s Club stores around the country, a move that would expand upon an existing relationship between the two entities. (Sam’s already sells iPhones, iPods and iPads.)

    According to the story, “the rumored talks are in an early stage and other plans are being discussed, including having Sam’s simply sell a broader range of Apple products such as its Macs, without adding ‘store-within-a-store’ features such as tables and displays that are similar to those in standalone Apple Stores.”
    KC's View:
    Count me among the people who think that it is at least possible that Apple could over-saturate the market. Now, if they limit the Sam’s Club installations to stores without an actual Apple Store within a certain distance, then that might make sense. But they’d better have their own people staffing the Genius Bars, and they’d better make sure they deliver Apple-quality customer service.

    Published on: February 10, 2012

    Craig Boyan, the CEO at HE Butt Grocery Co., has sent all of his employees the following memo:

    “I was inspired by the many creative events that our stores hosted for the last Second Saturday screening in January. So inspired in fact, that I would like for all stores, Partners and H-E-B Leaders to participate in a Valentine’s Flash Mob at our next Second Saturday Screening event, Saturday, February 11th.

    “On that Saturday, simultaneously at all of our H-E-B and Central Market store locations at 11am, in honor of Heart Month and the upcoming Valentine’s Day holiday, we’ll be hosting a flash mob in an effort to get our Partners and Customers moving. Our hope is to beat the largest US flash mob on record – Oprah’s 2009 flash mob with 21,000 participants. With over 76,000 partners and millions of customers we should have no problem beating the record, and showing everyone that everything is bigger in Texas!

    “One of the best ways to fight! heart disease is by adding some exercise to your weekly routine, and this lively dance break will showcase how fun and simple fitness can be. As an added benefit, our Customers can stay and learn more about protecting and improving their heart health at the free Second Saturday screenings from 9 a.m. – 2 p.m. in the pharmacy.

    “I encourage all Partners to participate in the dance (without disturbing the business), which will last for about 4 minutes...”

    Boyan went on to say that the company was communicating details about the event to customers via Facebook and Twitter, and concluded by saying, “I hope to see you all dancing on February 11th!”
    KC's View:
    I love things like this. Just thought I’d share it. And I expect that all those dancing feet in Texas will make the rest of the country shake tomorrow morning...

    Published on: February 10, 2012

    CVS announced that it is providing several free services, educational information and special product offers to multicultural communities during February's American Heart Month.

    As part of its new Project Health wellness and free health screenings program, CVS said it will provide free blood pressure, cholesterol, body mass index and osteoporosis screenings every weekday in February from 3:00 PM to 7:00 PM at select CVS/pharmacy locations in Atlanta, Chicago, Dallas-Fort Worth, Detroit, Houston, Los Angeles, Miami, New York, Philadelphia, Washington, DC and Puerto Rico,part of its goal of delivering more than $21 million worth of free health screenings to multicultural communities this year to help prevent disease through early detection.

    “We know that for a variety of reasons multicultural populations have difficulty accessing and benefitting from preventive care," said Troyen A. Brennan, M.D., M.P.H., Executive Vice President and Chief Medical Officer, CVS Caremark. "Making this issue even more disconcerting, these same patients disproportionately suffer from certain treatable conditions, like high blood pressure and diabetes.”
    KC's View:

    Published on: February 10, 2012

    • Interesting story in the Economic Times, which reports that Walmart Labs in India “has poached Gunaranjan Pemmaraju of to head its upcoming technology center in the country.”

    Walmart is setting up a 200-person tech team in India, to complement its 80-person team in the US.
    KC's View:
    It’d be a pretty fair guess that Walmart has its checkbook open for the acquisition of tech experts who can take its internet business to the next level ... especially if those people have been instrumental in Amazon’s success.

    Published on: February 10, 2012

    • Tesco-owned Fresh & Easy Neighborhood Market announced that its first five stores in the Sacramento region will open on March 7 (two stores in Sacramento) and March 14 (Lincoln, Elk Grove and Folsom). The openings give Fresh & Easy, which began operating in California, Nevada and Arizona in 2007, more than 180 stores.
    KC's View:

    Published on: February 10, 2012

    Advertising Age reports that “PepsiCo is calling 2012 a ‘transition year,’ as it adds hundreds of millions of dollars in advertising spend, trims its agency partners, lays off thousands of employees and positions itself for growth.”

    The goal, after a six month strategic review,is to generate more sales, most with a focus on a dozen core brands - Pepsi, Gatorade, Tropicana, Mountain Dew, Sierra Mist, Lipton, Mirinda, Lay's, Sun Chips, Cheetos, Doritos and Quaker.

    Bloomberg has an interesting story about what for Starbucks has been the road less traveled ... while the company has expanded into a number of global markets, it has not attempted to open stores in Italy, the very country that inspired CEO Howard Schultz back in 1983 to turn drinking coffee into an experience.

    “ There’s no Starbucks in the Piazza del Duomo, the site of Schultz’s epiphany,” Bloomberg writes. “Nor is there an outlet anywhere else in Milan, or in all of Italy. At a time when Starbucks views global expansion as the key to future growth -- and when it is virtually impossible to walk through a major European city without stumbling onto a Starbucks -- the company has no presence whatsoever in the country that inspired its founding.” This despite the fact that Schultz has said many times that he’d eventually like to open stores there.

    Why? According to the story, there are two likely reasons. One, “while Italians love their coffee, the market for it is famously crowded and fragmented.” But it also represents “the height of coffee culture, the gold standard against which all others are measured,” and Starbucks may simply not be ready to face that particular challenge.

    • The stores of Save Mart Supermarkets- Lucky, Save Mart, and S-Mart Foods, have introduced a new shelf tag program to assist customers in making better informed purchases. The shelf tags from Vestcom feature an easier to read updated design, allowing customers to easily shop and compare. Included in the new tag program, Save Mart has launched the Nutrition ID program. Shelf tags now identify if a product is organic, gluten free, a good source of calcium or vitamins C and A, and/or wholegrain, plus many more nutritional attributes. The retailer says that this program leverages Vestcom’s in-store nutrition marketing program developed in accordance with U.S. Food and Drug Administration (USDA) guidelines.
    KC's View:

    Published on: February 10, 2012

    • Canadian retailer Sobeys announced that its president/CEO, Bill McEwan, will retire from the company later this year, after a search for his successor has been completed.

    According to reports, McEwan is retiring because of an ongoing health issue.

    He has been president/CEO of Sobeys since November 2000.
    KC's View:
    ack in 2007, at a CIES Executive Summit, McEwan said the following:

    “I don’t know when it’s going to happen but I think this issue of trust and confidence is going to go beyond food safety and security. It’s going to extend to corporate social responsibility and ethical sourcing and people’s notion of not just how safe is our product but how is it produced; where was it produced and what are the factors behind it. It’s like these four roads heading into a traffic circle. When we get to the traffic circle there better be some sort of organizing mechanism to process all this information of trust or the industry is going to have real big challenges.”

    I’ve always remembered that, because I thought then...and think now...that he’s right.

    Published on: February 10, 2012

    Responding to yesterday’s story about Tesco expanding its virtual store experiment in South Korea, one MNB user wrote:

    Your story about Tesco's virtual store success, using scannable ads in public transit stations, reminded me of a recent trip to a Fresh & Easy store in southern California.  A particular location, near a light rail stop, had to discontinue sampling, since they had a rush of 'homeless' samplers when the train arrived.  That Tesco's concept worked well combined with delivery service, highlights an advantage e-commerce has over brick & mortar locations; doing business without freeloaders.

    I guess the only question I would ask is why you put “homeless” in quotes. I get that it made sense for Fresh & Easy to discontinue sampling because of homeless folks creating a crowd, but I hope you’re not suggesting that they aren’t actually homeless.

    Some will call them freeloaders. But they also might be desperate. And hungry. And troubled. Somehow, calling them “freeholders” seems a bit callous.

    Another MNB user wrote:

    I completely agree with you that this is the wave of the future. It certainly has application for every day shopping but I think it has even more application for those of us who forget and then panic over special occasions (assuming companies can effectively manage logistics).

    Forgot about Valentine’s Day (or Mother’s Day or any other occasion)? Scan the code, have your gift shipped for delivery on special day. Guaranteed same day delivery if ordered by noon. I’d love to see some company test.

    Of course, if its 7pm on Valentine’s Day, and you’re just now thinking about it, you are probably SOL and are encouraged to at least pick up a great bottle of wine if nothing else.

    Wait a minute. Valentine’s Day? That’s next week, right? And I’m going to be in Vegas...


    We also had a story yesterday about the changing media habits of young people, who watch a lot of television but increasingly don;t actually watch it “on television.”

    MNB user Jay Schafer responded:

    Thought I'd chime in around the TV issue.

    I'm a 25 year old professional male, and I do not own a TV.  I have a 17-inch laptop (largest I could buy, slightly smaller than a carryon suitcase in footprint), a Netflix subscription, and free Hulu.  That, a good internet connection, a warm cat on the shoulder, and a comfortable easy chair are all I need for video entertainment.

    Am I in the minority?  Sure, absolutely.  But think about it: if you aren't a huge sports fan, and don't mind being an episode behind on the sitcoms, why pay for cable?  If you live by yourself, why buy a big screen?  For the price of cable, I can go to the bar and rack up a nice tab the rare time I want to watch a big game.

    Just as young people have given up landlines to a large extent (I didn't even install the landline when it was free in the college dorm, not worth the hassle), and just as many people use their smartphones for email almost exclusively over computers, I think we will begin to see a few (maybe not many, but a substantial minority) people give up cable and perhaps even TVs.

    I’m a 57-year-old guy, and I watch a fair amount of television on my computer and iPad...but I would not want to survive without my big screen HD TV, in part because of sports (I watch plenty of baseball and football during their respective seasons), but also because some movies just cry out for a bigger screen than my laptop. Besides, it is easier to sip a glass of wine, with the dogs curled up at my feet, when I’m stretched out on the couch watching the big screen.

    Another MNB user wrote:

    My family shows both trends. My 21-year old daughter has a TV she uses for DVDs, but no cable (her budget won’t cover it). She watches all her TV shows on her laptop. Our household at one time subscribed or bought several magazines a month. Now we subscribe to none and rarely buy one. It is a new age and the way we receive media has changed.

    KC's View:

    Published on: February 10, 2012

    I love going to the movies. (Never would have guessed that, huh?) And when I don’t like a movie, I usually feel more disappointment than anything.

    That was the case with Extremely Loud and Incredibly Close, the Academy Award-nominated film directed by Stephen Daldry that considers the aftermath of 9-11 through the eyes of a young boy (played by Thomas Horn) who has lost the father (Tom Hanks) that he adored. Most of the movie is made up of a kind of treasure hunt; the son finds a key amongst his father’s things, and sets out across New York City to figure out what the key unlocks, hoping that it will also reveal some secret about his father that can make bearable the pain of his loss.

    My problem with Extremely Loud was there were few things that happened in the movie that I believed; it just stretched credibility too far, and I found myself identifying plot holes and wondering about the competence of the kid’s mom (played by Sandra Bullock) rather than being caught up in the experience. Extremely Loud is, I think, supposed to be a kind of fairly tale juxtaposed against a real tragedy, but it just seemed contrived and simplistic, and just didn’t work for me.

    But I feel bad about that.

    The great thing about DVR technology is that when two shows I like are on at the same time, I can just record one and watch the other ... which is exactly what I find myself doing on Tuesday nights, when “Justified” comes on FX at the same time as “White Collar” comes on USA. Both are great examples of what cable television seems to do better than the networks - they tell interesting stories through the eyes of quirky protagonists, and allow the narratives and actors to breathe.

    “Justified,” based on characters created by the great Elmore Leonard, is terrific TV, taking place in rural Kentucky and focusing on the exploits of US Marshall Raylan Givens, portrayed with steely charisma by Timothy Olyphant. He’s surrounded by a colorful cast - both good guys and bad guys - and the dialogue crackles, just like the source material.

    “White Collar” is basically an updated version of “It Takes A Thief,” but it has great and sophisticated verve and a wonderful cast including Matt Bomer, Tim DeKay, Tiffani Thiessen, and Willie Garson. It is escapism through and through, done to a stylish turn.

    Speaking of Elmore Leonard...I’ve recommended this before, but I want to do it again. If you’ve never read it and you do any sort of writing for a living, you need to read his “Ten Rules of Writing,” which is available from Amazon and in e-book form. It is a great primer in how to write, and I won;t be giving anything away if I tell you one of them, which happens to be my favorite:

    Leave out the parts readers tend to skip.


    One more entertainment-related recommendation...

    On iTunes, there is a new podcast called “Here’s The Thing” that features Alec Baldwin conducting entertaining interviews with people who include Michael Douglas, GOP political strategist Ed Rollins, Chris Rock, and “SNL” creator Lorne Michaels. They’re wonderful, and each one has left me wishing for more ... and they are a great distraction when I’m working out on the elliptical machine.

    Two great wines for you this week...

    the 2008 Altos Nevados Malbec from Argentina which manages to be robust and smooth all at the same time.

    the 2009 Domaine Gerovassiliou G Malagousia, from Greece, a white wine that I enjoyed last weekend at a wonderful Greek restaurant in NYC called was perfect with grilled octopus, but I imagine it would be pleasurable with any seafood or salad.


    That’s it for this week...

    Next week, I’ll be attending - and moderating two panels - at the annual National Grocers Association (NGA) convention in Las Vegas. If you’re there, I hope you’ll come by my sessions and say hello, or just grab me on the exhibit floor.

    Have a great weekend.

    KC's View: