retail news in context, analysis with attitude

Published on: February 29, 2012

by Kevin Coupe

Today is February 29. And Amazon-own Zappos.com is celebrating Leap Year with a twist on its usual one-year return policy.

The online retailer said this week that anyone who buys anything from Zappos today will have four years - until the next time there is a February 29 - to return it.

That’s 1,460 days.

Now, this may just be a marketing gimmick.

After all, even though the shopper has four years, the products must still be in the condition they were received and in the original box and/or packaging. And four years is a long time to keep a box, much less a product inn its original condition.

But there’s nothing wrong with marketing gimmicks. Especially clever marketing gimmicks.

They can be an Eye-Opener.

Published on: February 29, 2012

PC Magazine reports that “grocery shopping could be a totally different experience in the future, thanks to smarter shopping carts in development with built-in Xbox 360 Kinect technology.

“Whole Foods is testing out the prototype of a new shopping cart outfitted with the motion sensor from Microsoft’s Xbox 360 ... The motorized carts can identify a shopper with their loyalty card, follow the individual around the store without having to be pushed, and guide them to the items they want. The cart can also scan items as they are placed inside the cart, mark items off a shopping list and even check the shopper out.”

According to reports, the new shopping carts - called Smarter Carts - can even detect when a shopper has chosen the wrong item. For example, if a person is identified as a shopper interested in gluten-free items puts a product with gluten in the cart, the cart will point out the possible mistake and suggest a gluten-free alternative.

Published on: February 29, 2012

Delhaize-owned Bottom Dollar Food said yesterday that it plans to open eight new stores in New Jersey, a move that more than doubles its presence in the state, during 2012 and 2013.

The first of the units are scheduled to open in Trenton and Cinnaminson this Friday, followed by a store in Bordentown on April 13.

Other communities slated to get new Bottom Dollar stores are Edgewater Park, Bellmawr, Woodbury, Mt. Holly, and East Windsor.

The openings will bring the number of Bottom Dollar stores in New Jersey to 13.

In describing the stores, Bottom Dollar emphasizes that they have a “We Won’t Be Beat” guarantee, “where stores will beat any competitor’s price on the same item by a penny. In addition, if a customer is unsatisfied with a purchase, all meats and produce come with a double-back guarantee that ensures an item is replaced and customers are given a full refund. Bottom Dollar Food also offers a double-money back guarantee on all private brand products.”

Published on: February 29, 2012

The Wall Street Journal reports that Walmart is in discussions with the UltraViolet consortium - which includes more than 70 entertainment, technology and retail companies - to provide an in-store service that will allow customers to register the DVDs they own, which will then allow them to access those movies and TV shows via a personal library stored on the web on a range of devices.

According to the story, the industry hopes that the system could serve to help discourage illegal downloads, but so far the system only has about a million users. Walmart’s active participation - it already is a member of the coalition - is seen as a potential boon to the UltraViolet system because it would make the free service for accessible to consumers.

The Journal writes that if the discussions are successfully completed, “employees of Wal-Mart will help customers create UltraViolet accounts, according to the people familiar with the plan. Wal-Mart staff will also check DVDs that shoppers already own, adding titles that are part of UltraViolet system to their accounts for a small fee, the people said ... Aside from the fact that Wal-Mart stores are visited 140 million times each week in the U.S., a Wal-Mart partnership is attractive to the UltraViolet group because of the retailer's popular Vudu streaming service. Wal-Mart bought Vudu last year for a reported $100 million and the service has become the third most popular film rental and download service, according to researcher IHS Inc. This puts Vudu ahead of similar offerings from Amazon.com Inc. and Sony Corp.”

Published on: February 29, 2012

The Associated Press reports that there is a new food trend afoot in America: Second breakfasts. And maybe even third breakfasts.

According to the story, “On-the-go Americans increasingly are consuming their morning calories over several hours instead of sitting down to devour a plate of pancakes, bacon and eggs in one sitting. The case of the morning munchies is being fueled by the belief that it's healthier to eat several smaller meals instead of three squares a day. What qualifies as a snack or a meal is a matter of perspective, of course. But food companies are rolling out smaller bites that feed the growing appetite for morning snacks.”

The AP goes on: “Market researcher The NPD Group estimates that the number of times people snack in the mornings will jump 23 percent between 2008 and 2018. That's compared with a 20 and 15 percent increase in afternoon and evening snacking, respectively.”

Published on: February 29, 2012

• Ahold-owned Martin’s Food Markets announced that it has launched “its first mobile application for iPhone and Android devices. Customers can now download the mobile application for free at the App Store or Android Market ... The mobile app syncs with a customer’s BonusCard, to provide access to his or her online account, allowing them to check current point totals for gas rewards and A+ School Rewards in addition to viewing personalized savings offers. Once customers have built their shopping list online at www.martinsfoods.com, they will be able to view and check off the list using their mobile device while shopping.

“Customers can also access store circulars to check out every day savings on the go and get directions to the nearest Martin’s.”

Published on: February 29, 2012

The Wall Street Journal reports that the latest Kantar study of market shares in the UK shows that Tesco had 29.7 percent of the market during the last quarter, down from 30.3 percent during the same period a year ago.

Meanwhile, Walmart-owned Asda Group saw its market share rise to 17.5 percent from 16.9 percent, and Sainsbury's rose to 16.6 percent from 16.5 percent during the same period.

William Morrison Supermarkets’ market share fell to 12.2 percent from 12.3 percent, while Waitrose’s market share rose to 4.5 percent from 4.4 percent, while discounters Aldi and Lidl's combined market share rose to 6.2 percent from 5.5 percent.

Published on: February 29, 2012

• Bloomberg reports that Walmart has closed three convenience stores that it operated in the Chinese city of Shenzhen, saying that the format was a test that had run its course.

Published on: February 29, 2012

• Whole Foods has passed a major hurdle in its efforts to build its first store in Brooklyn, New York, as it received a needed variance from the city’s Board of Standards and Appeals.

The store is slated to be built in a so-called “gritty” neighborhood called Gowanus. The Wall Street Journal notes that “the Brooklyn Whole Foods will be a big step in the transformation of an industrial neighborhood near the Gowanus Canal that has been named a superfund site.  The planned store has been controversial among some residents in the neighborhood, who fear it will hurt artists and small businesses in the area.”

Whole Foods already has six stores in Manhattan.

• The Food Marketing Institute (FMI) has issued a report that examines the extent to which FMI’s food retailer members are paying a disproportionately higher amount in fraud prevention costs compared to the actual rate of debit fraud in their stores. Signature debit transactions account for 85 percent of all debit fraud, the report says, while 41 percent of purchases with debit transactions are completed with a more secure PIN debit transaction.

The FMI study points out that if food retailers accepted debit cards at the same rate as other stores accept them, they could be paying as much as $3.17 billion in fraud prevention costs, more than 100 times what they actually lose from fraudulent transactions. In fact, 85 percent of all fraudulent debit transactions involve signature debit.

Published on: February 29, 2012

Yesterday, MNB took note of a Reuters report that “a federal judge has ruled in favor of global seed giant Monsanto Co, dismissing a lawsuit brought by a consortium of U.S. organic farmers and seed dealers who said their industry is at risk from Monsanto's growing market strength.”

As I understood the story, the judge in the case essentially said that the lawsuit was designed to stop a company from filing a lawsuit that it never had filed, and he said that it was a “transparent effort to create a controversy where none exists.”

And I commented:

That said, if Monsanto’s crops with GM seeds contaminate some other farmer’s crops, and Monsanto does try to put those farmers out of business for so-called patent infringement, I hope some judge will smack them upside the head. Because that would be the ultimate in corporate gall.

I got a lot of email about this comment ... and it suggests that the judge may have been full of it when he said there was no existing controversy.

One MNB user wrote:

Your comment today was not based in fact. Monsanto has sued thirteen organic farmers for patent infringement after their crops were contaminated with Monsanto patented genes. So far.

From another MNB user:

Just some background.

If Monsanto seed blows into a non Monsanto seed farm, Monsanto sues that farmer for using unauthorized seed.

Monsanto seed is modified to resist a pesticide, so it has advantages but they own the seed, meaning a farming at the end of the season has to destroy his seed and buy fresh every year.

If seed blows into a non Monsanto field is can cross germinate and give that resistance to some of the non Monsanto buying farmers.

Currently, Monsanto has sued and won all of these cases.  It pits a small farmer against a corporation, and they get buried with legal fees and go under, every time.

In summary, if the wind blows the wrong way, you lose your farm.  I understand the need to protect intellectual property, but it is slowing reducing the consumers ability to choose from Organic, to Local, to sprayed food.

Another MNB user wrote:

If you haven’t watched Food Inc. or The Future of Food documentaries, please do.  Both are available on Netflix streaming.  Monsanto has already sued over a 1,000 small farmers and their stories are told.

And still another MNB user chimed in:

Monsanto sues farmers for patent infringement every day after THEIR seeds have contaminated someone else’s crops:  wind drift, birds drop them, leftover seeds in a mill, etc.  

Please watch The Future of Food – concise and very easy to understand explanation of how it’s all done, by whom, and to whom.

And another MNB user offered:

I’m sure you’ve seen the film Food Inc. and if you haven’t, well I’d be shocked.  The story of a guy who had a business to help small family farmers save seed from their own crops was appalling.  He was personally harassed, and once Monsanto got hold of his client list through the exploration process of a lawsuit they took their game up a notch and started hassling his clients to the point that if they were to use his services it would be met with instant lawsuits.  All a company the size of Monsanto has to do is threaten to sue and small farmers can’t afford to fight back and collapse under their pressure.  The use of his client list was particularly despicable.

I watched the film is disgust for Monsanto’s actions.  Cross-pollination from neighboring farms is a real threat to traditionalist farmers wishing to avoid patent infringement and save seed from non-Monsanto varieties.  This ruling was clearly a win for Monsanto and not for farming, the organic movement, or food prices.

With Monsanto it looks to be their way or the courtroom.

I’ve seen Food Inc., but I honestly don’t remember if I’ve seen The Future of Food. But I’ll make sure I move it to the top of my queue.

Now that you point this out - and I got a lot more email along these lines - I remember the points made by Food Inc., and I should have recalled them when writing my commentary. But what I can’t quite figure out is how - considering there have been so many lawsuits - the lawyers for Monsanto were able to make their case. Unless the judge in the case was predisposed to rule in their favor. Or the lawyers on the side of the organic farmers simply did not make theirs.

It doesn’t surprise me that Monsanto is seen in certain quarters as a bully.




On the subject of PayPal’s expanding presence in the brick-and-mortar retail business, one MNB user wrote:

It will be interesting to see how this plays out.  Similar to so many of your stories, and reminiscent of the Auto industry of the late 20th century, the banks are beholden to the tricks of the trade which allowed them a business model with excessive charges they could get away with.  Government regulation has done little to mediate the problem.  Now it seems the marketplace will.  PayPal is probably just the first of several companies which, not dependent on obscene rip-offs for their profit, will give the traditional credit card companies a run for their money.

This could be a classic case of a democratic, capitalist marketplace accomplishing something government could or would not do.

From another MNB user:

I have been using PayPal to collect rent on our Mexican resort properties for years now and find it works great in principal but am frustrated every time I go to look up a record or process a new transaction at the slowness and cumbersome response of its system. Nothing works like a spread sheet, that you can sort different ways quickly!

I hope it does not continue to get slower! When I called them on it, their excuse was they are growing so fast they cannot keep up. That's one sure way to slow down - looking for a competitor!

MNB user Jarrett Paschel wrote:

I read with fascination your summary of reports that Home Depot is expanding their test of accepting PayPal payments to the rest of its fleet of stores. Given that the funds are still coming directly from user’s bank accounts in the vast majority of purchases, it surprises me to learn that the value proposition for the consumer is the fact that rather than swiping a debit card,  one “need only” enter their phone number and PIN number on their PayPal account. Readers on TechCrunch trumpet the “convenience” of not having to carry a wallet and the “safety” of not risking the loss of a debit card.

Given the need to carry a drivers license, it’s hard to imagine a scenario in which I would never carry a wallet again, so it seems like an uphill battle to convince consumers that PayPal is somehow more convenient than a plain old debit card. I agree with you that this will be one of the first in a series of competitors to traditional banks, and it certainly signifies the growing trend toward the disintegration of the physical bank.

But at the moment, the value proposition for the consumer seems more of a gimmick than a true revolution of convenience. That said, it’s a clear win for Home Depot because they’re getting a better cut from PayPal than MC/Visa, which is well deserved.
 
Let the games begin…



On another subject that we’ve been discussing here on MNB, a reader sent the following email:

I read the commentary on why people do not want to choose a career in grocery retailing and I had to share my thoughts.

I'm 25 and I've been working in a grocery store for over eight years. I have an undergraduate degree in Business Management. I've worked for two very good companies -- Costco and HEB. Both have compensated me well, both have provided great insurance and 401k programs, and both have excellent opportunities for growth.

With that being said, I'm someone who values work/life balance highly. Now, that's not to say that I'm not willing to work extensive hours when necessary, because I absolutely will. But, when I am SCHEDULED - when 11 hour shifts very easily turn into 12 and 13 hours shifts it gets really old, really fast. And, in my opinion, the only reason I am scheduled to work these kind of hours is because that's the way it has always! been done. With technology today -- internet, mobile email, etc. -- I believe there is no reason why we can't be effective retail operators working at the store from ~8:00-5:00. We literally have all of the data we would ever need to make sound business decisions accessible to us with the click of a mouse.

Then, once or twice a week I'll have to work until midnight. I won't even bother talking about the holiday experience. Long hours, nights and weekends, holidays. It's easy to see why the grocery business isn't very appealing. My younger brother (civil engineer) and best friend (credit analyst) both work M-F 8-5 and both make slightly more money than me. Apples to oranges, I know, but it shows why people in high school aren't saying to themselves, "I want to run a grocery store all of my life!" I think a lot of the unwritten rules in grocery retail will change dramatically over the course of the next 10-15 years when all of the Baby Boomers retire and my generation begins to take over.

If you are not truly passionate about this business it will wear on you very quickly. Fortunately I'm in a position where I don't have to accept this as "my life". I can choose to do something else. I can't imagine trying to raise a family on the schedule that I have now. Maybe 8 hours at the store and a few more each night from home, but not 11-12 hours a day at the store.

I’m sympathetic, but for the moment I’d like to take what may be a politically incorrect position.

I think you have to give up the notion that in any business where you want to have an impact and reap the rewards, you are going to be able to work so-called normal hours. I’ve been telling young people for years that we do not live in a 40-hour work week world ... that if you are going to have a differential advantage in a highly competitive environment, you have to be willing to do more, to do extra, to spend the extra time and go the extra mile.

I’ve been working for a long time - full-time, for almost 40 years. And I would be hard-pressed to remember a job where I worked a 9-5 day on a regular basis. Whether as a daily newspaper reporter working Thanksgiving and New Year’s Eve because I was the low man on the totem pole, or a writer/producer on a business video series where I was often on the road for weeks at a time, or in my current gig, I’ve always put in the time necessary to get the job done right.

Now, in part this is because I’ve always loved my work. (Even if I did not always love the job, the company, or the people I’ve worked for.) In most cases, it was because I felt invested in the business - emotionally, if not financially. (That probably has as much to do with my emotional makeup as anything. I’m not sure I ever was an easy person to manage, but I was always was low-maintenance when it came to motivation and commitment.)

Now, you’ve worked for some great companies, and other people I know who have worked in both places have found happy and satisfying careers there. So maybe retail is not for you.

I think it is critical for retailers to understand the mindset of people like this, and to figure out how to deal with it. There’s not much that can be done about the long hours, I suspect, but I do think that it is important to figure out how to help them feel invested in the business, dedicated to the company’s success, able to contribute creatively and constructively and see those contributions realized in the marketplace.

As for young people...here’s what I suggest. Find something you love doing, and make it the centerpiece of your work life. You’re going to spend way too much time working to not find it personally rewarding and even joyous.




And, by the way, if you are lucky and love your job, someday you may get an email like this one:

Let me preface this by saying that “I am one of the 800,” which is becoming a common phrase at Supervalu since the downsizing was announced three weeks ago.  I have only been in the supply chain industry a short while and as part of my becoming more aware of the business I started watching your blog.  Not only did I learn quite a bit about the industry, I have enjoyed your, Michael’s, and Kate’s comments and insights on what is happening in the world of groceries and retailing in general.  In a few weeks I begin a new chapter in a different industry.  I may just have to continue following your blog to keep current on good food, good wine, good movies, and a few good laughs!

Thanks for the lessons, on many things and in many forms!

And thank you...for making my day. Good luck to you.

Published on: February 29, 2012

Last Friday, I responded to a request from an MNB user with a list of “classic” movies that I thought might be good to show 10-year-olds. I mostly was trying to come up with movies that would be accessible to a 10-year-old and expand their frames of references a bit. (Acknowledging that video games have ruined their minds and ability to appreciate pacing.)

You can read my original list here.

We’ve had tons of recommendations this week...and here are a few more.

One MNB user wrote:

I am in my 20's, but hanging out with my dad has given me a love for "old" movies. The Thin Man movies (starring William Powell and Myrna Loy) are some of my all-time favorites! 

Not only did these movies practically invent the type of fast-paced, saucy banter you see in so many current movies, they contain humor and detective work and are just a ton of fun. Plus, movie dogs just don't get much better than Asta.

My dad asked for the box set for Christmas one year, and my entire family (I was 21 at the time, my brother 17) enjoyed six straight nights of these great movies. They were not at all what I initially expected from something made in the 30's.

Thanks for such a fun conversation!

Our pleasure. I love The Thin Man, too. (Though I’m not sure 10 year old boys would find the movies to be as charming. But I’d certainly give it a shot...)

From another MNB user:

Boys would probably like The Cowboys, with John Wayne (1972). He has to hire boys to do his cattle drive when his regular hands go in search of gold. I love that movie. Also, from my love of the 70’s (although the movie was made later, 2005) Roll Bounce. Never got much attention, but it makes me laugh and cry about some boys who are determined to win a roller dance competition. Great music in that one.

Never heard of Roll Bounce. But I liked The Cowboys a lot. (I’m a big John Wayne fan. One of my prized possessions is a note I got from him after I gave The Shootist a positive review in my college newspaper...this was the mid-seventies, and Wayne was not exactly beloved on college campuses. Somehow, he got hold of the review - I went to school in LA, and LMU had a real presence in the film industry - and sent me a note. Which was just the coolest thing.)

From MNB user Gary Loehr

Add the Pink Panther series with Peter Sellers to your list of classics for kids of any age.

Maybe the early ones. I think the later ones are really, really tired, IMHO.

And, from MNB user Mike Franklin:

I know she would prefer movies…but there are great alternatives to movies…
 
I would have suggested the following books…

1.     THE BEAUTIFUL STORIES OF LIFE: SIX GREEK MYTHS, RETOLD
2.    THE HOBBIT 
3.    ALICE'S ADVENTURES IN WONDERLAND 
4.    CLAUDETTE COLVIN: TWICE TOWARD JUSTICE
5.    WHERE THE RED FERN GROWS
6.    ISLAND OF THE BLUE DOLPHINS
7.    THE BLACK STALLION
8.    SOUNDER
9.    THE INCREDIBLE JOURNEY
10. ONE-EYED CAT
11.   ROLL OF THUNDER, HEAR MY CRY
12.  ONE CRAZY SUMMER
13.  NUMBER THE STARS
 

Y’know, it is hard to figure where these conversations are going to lead.

But I love them. Hope you do, too.