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    Published on: March 6, 2012

    by Kevin Coupe

    Marketing Daily quotes a new NPD Group study saying that “15 to 20 percent of consumers are showrooming for such products as electric knives, sewing machines, power tools, and hairsetters” - categories described as “a little more technical and somewhat expensive,” and therefore ideal for the practice of going into stores to see and feel a product, and then ordering the item for less money online.

    The interesting thing is that NPD Group interprets this as a positive sign - that it means that a lot of people feel it is important to examine certain products physically before buying them. (Always look on the bright side of life?) It then falls to these bricks-and-mortar stores to find ways to actually keep them in the store, offering prices and/or services that make online alternatives less appealing.

    One thing they already have going for them is the fact that the product is more accessible and immediate; that’s something with which online retailers cannot compete. But clearly they have to offer more.

    To use a baseball analogy, there are runners on base. it is up to bricks-and-mortar retailers to drive them home.
    KC's View:

    Published on: March 6, 2012

    The Wall Street Journal reports on what it calls the changing face of American consumerism - noting that while the economy seems to be improving and retail sales are on the rise, “Americans won't quickly unlearn the things they have picked up during the recession and its aftermath.

    “While an improving job market is giving more people the wherewithal to spend, it won't quickly undo the damage the housing bust and financial crisis did to balance sheets. With inflation-adjusted net worth per capita still below where it was in the late 1990s, buying decisions will continue to be weighed carefully.”

    This means, the story suggests, that private brands will continue stronger sales than have been historically the case in the US, as people show greater care about how they spend.

    “The same dynamic,” the Journal writes, “could lead to people holding back on aspirational purchases, and slow sales at higher-end retailers. The somewhat straitened conditions at financial firms - Wall Street bonuses fell 14% in 2011 - might also have some well-heeled workers resetting their views on what constitutes a reasonable purchase.

    “On the other side of the ledger, the improving economic backdrop should continue to help sales of big-ticket items that people held back on buying during the lean years, like cars and washing machines.”
    KC's View:
    I think it seems fair to suggest that many people’s attitudes toward spending have changed, and may remain changed for quite some time. I’m not sure it is permanent, in the way that the Depression has been imprinted on the consciousness of so many people. And let’s not forget - despite all the economic issues of the past few years, we still live in a world where there are precious few bread lines, and plenty of iPhone/iPad lines.

    Published on: March 6, 2012

    Tesco CEO Philip Clarke tells the Financial Times that he expects the company’s US operation, Fresh & Easy Neighborhood Markets, to begin to break even “as early as this year.”

    Clarke said that getting a return on investment “is the only reason for having any business,” and that this benchmark applies to Fresh & Easy.

    "What I am yearning for is a day I can say not just, 'Hey do you know what, it's got to break even' but 'Look here at the prospect of strong returns'," Clarke told FT.

    According to the story, “Clarke has introduced changes at Fresh & Easy since taking over from predecessor Terry Leahy, who set 2013 as the target for when the chain would break even. Clarke has refurbished stores, opened some smaller ‘Express’ shops and closed 12 units.”
    KC's View:
    I haven’t been to a Fresh & Easy in some time...I’m looking to seeing one in a few weeks, since the folks there seem to feel that they’ve tweaked the concept to the point where they are more relevant than they were when first opened.

    Published on: March 6, 2012

    The Los Angeles Times reports that “the Center for Science in the Public Interest says its testing has found "high levels" of an animal carcinogen, 4-methylimidazole, in Coca-Cola and Pepsi cola drinks. The chemical is a result of the process used to give the colas -- including the diet versions -- their caramel coloring.”

    However, the Times writes, the Food and Drug Administration (FDA) says that there is no reason for concern and that “a human would have to drink more than a thousand cans of the drinks in a day to reach the chemical level shown to cause cancer in rodents.”

    CSPI says that “it found that regular Coke, purchased in the Washington, D.C., area, had about 145 micrograms of the stuff in a 12-ounce can, while Pepsi had about half that. California regulations require that a product have a warning if the level of the chemical is above 29-micrograms.” The Times notes that CSPI also said that 4-methylimidazole is not the most dangerous ingredient in soda - that honor went to “the high-fructose corn syrup or other sugars used in soft drinks," CSPI says.
    KC's View:

    Published on: March 6, 2012

    The Jacksonville Daily Record reports that Winn-Dixie’s management has scheduled a meeting for Friday morning at its Jacksonville headquarters, at which shareholders are expected to approve the company’s acquisition by Bi-Lo LLC.

    The two companies have already announced that Winn-Dixie CEO Peter Lynch will be departing the company after the merger takes place, and that Bi-Lo CEO Randall Onstead will lead the combined organizations. But no announcement has yet been made as to where the new company’s headquarters will be.
    KC's View:

    Published on: March 6, 2012

    The March 19 issue of Fortune is out, and it includes the magazine’s annual list of the 50 most admired companies - topped by Apple,followed by Google, Amazon, Coca-Cola and IBM.

    The survey asked survey asked businesspeople to vote for the companies that they admired most, from any industry.

    Among the retail and related companies also on the list are Starbucks (8), Procter & Gamble (9), McDonald’s (11), Johnson & Johnson (12), Costco (20), Nordstrom (21), Walmart (24), Target (25), Whole Foods (28), Nestle (31), PepsiCo (32), Accenture (43), General Mills and Unilever (tied for 50).
    KC's View:
    I do think that Apple’s position atop such lists could be endangered if it is not able to effectively address the questions about labor policies employed by its suppliers in Asia. Those issues are not going away; it’ll be interesting to see if CEO Tim Cook talks about them during tomorrow’s new product announcements.

    Published on: March 6, 2012

    Reuters reports that in Africa, the Nambia trade and industry minister has given conditional approval to Walmart’s acquisition of a majority share of South Africa’s Massmart - provided the company does not lay off any employees for two years.

    The approval is just the latest complication in Walmart’s Massmart adventure.

    Even though the South African government has approved the acquisition, there have been recent efforts to attach more conditions to the already-completed sale. And Walmart has sued to prevent countries other than South Africa from applying any conditions to the Massmart deal.
    KC's View:

    Published on: March 6, 2012

    • In Nebraska, the Journal Star reports that “Nash Finch Co., which owns the Sun Mart grocery stores in Lincoln, has announced plans to buy Bag 'N Save supermarkets based in Omaha. The deal includes 11 Bag 'N Save stores in the Omaha area and one in York ... The purchase will give the company 27 grocery stores in Nebraska, more than double the number in any other state where it operates.”

    Terms of the deal were not disclosed.

    • The Washington Post reports that “Florida farmworkers and their supporters are staging a fast outside Publix Super Markets headquarters in Lakeland. The fast, organized by the Coalition of Immokalee Workers, started Monday and will last through Saturday,” as the coalition pushes Publix “to join a program that supports pay increases for tomato pickers and prevents human rights violations against farmworkers.”

    Fox Business reports that American Express “is testing the sale of prepaid cards in some Wal-Mart stores.

    “The New York-based lender is marketing the reloadable cards, which can be used wherever American Express is accepted, under the name ‘bluebird’ in about 180 of the discount retailer's stores on the West Coast, Laura Kelly, an executive helping spearhead the company's push into prepaid cards, said in an interview Monday ... Kelly declined to discuss specific details about the program or whether it will be expanded into additional stores, but said it is part of American Express's strategy to appeal to a broader swath of consumers.”

    • CouponNetwork.com, a provider of online coupons and savings experiences powered by Catalina, today launched “Like Rewards,” which it describes as a “Facebook fan accelerator” that is “designed specifically to help brands understand and optimize the in-store impact of their social initiatives. The new solution increases the value of coupons found on CouponNetwork.com for consumers who ‘like’ their favorite brands and offers on Facebook.”

    The company says that the product’s integration into Catalina’s multi-channel, online and offline, communication platforms should provide insight “into the in-store impact of their social initiatives and enable brands to engage their fans beyond the Facebook wall.”
    KC's View:

    Published on: March 6, 2012

    ...will be posted on Wednesday this week.
    KC's View:

    Published on: March 6, 2012

    MNB yesterday took note of a Chicago Tribune report that McDonald’s plans to release new ad campaign that will feature a message about either nutrition or the importance of exercise in every ad.

    I commented, in part:

    I must say that I amused by some of the critics of the new ad campaign, who seem to be saying that it is not a good idea because by stressing a health and nutrition message, McDonald’s should not be sending any messages to kids under 12, and that the subject doesn’t really matter. One critic says that McDonald’s is just “exploiting children's emotional vulnerability through cartoons and animals,” and that the subject doesn’t really matter.

    Well, I don’t know about that.

    It does sort of seem like McDonald’s cannot win.

    If I had little kids, I’d avoid McDonald’s as much as possible on principle. But it would be nice to know that at those times when I needed a convenient fast food alternative, its Happy Meals are not quite as bad as they used to be, and that the ads may have had the healthier foods a little bit more palatable to kids.

    It is just hard for me to get too upset about McDonald’s stance on this. They’re shifting with the tides, and that’s supposed to be a good thing.


    One MNB user responded:

    At the end of the day Mc Donald’s can change the look of the restaurants to look more upscale, add fresh to the menu ( as they did with salads etc and didn’t work all that well), add specialty coffee, ok that worked. But if you look at the customer base, it’s been kids, kids that come in and play on the playground, play with the toys and eat the happy meals. The parents are only there out of guilt and its quick and easy not fresh and health. Stand in line and see how many parents order  fruit vs. fries, milk vs. soda… not many, and when they ask their kids, guess their answer.  Mc Donald’s like many retailers have done a great job of attracting and keep a certain customer base all these years. In Mc Donald’s case it is kids. To prove this, this is why Walmart wanted them in the stores, as the percentage of kids that eat at a Mc Donald’s weekly is extremely high and they wanted in on that visit. Mc Donald’s is no Chipotle and never will be.

    From another MNB user:

    I understand why McDonalds feels pressured to appear to be more health conscious but these new Happy Meals are a joke.

    On a recent road trip, we stopped at a McDonalds because we wanted fast and convenient food. The apples went untouched by my 6 year old and the fries were inadequate. I felt cheated. Maybe we’re the exception, but my wife and I ensure our children eat right and get plenty of exercise. We keep a cooler in the car on our trips and our kids get plenty of fruits and vegetables. This, and the fact that the apples looked inedible, is why we didn’t make our son eat the apples. If we thought our kids had to have a healthier meal, we wouldn’t have chosen McDonalds.

    I guess from a business perspective, McDonalds sales were probably positively impacted by our stop. We did order extra fries to make up for the deficiency. However, it’s going to hurt them in the long run because we will plan fewer stops there. It’s a tough position for McDonalds and, I guess the groups that have targeted them score a win. However, I don’t believe this moves them toward their stated objective of reducing childhood obesity, that can only be achieved with responsible parenting. It’s just hurting a reputable company.


    And, from yet another reader:

    I was actually kind of annoyed at the new Happy Meal because the offering of apples was smaller and there’s not a “no fries” option.  Thinking back on it, I guess I could have doubled up on the apples and asked for no fries but my daughter loved the caramel sauce and that’s not an option it seems.  And while I’m sure the sauce is simply HFCS, I’d rather her eat that than a bunch of fries.  I’m happy for the change but do wish they’d give the 11% that was opting for apples and no fries, our old choice.

    As for those still complaining about McDonalds, it’s not McDonald’s responsibility to ensure my children eat healthy. It is mine.  And if people are going to fast food restaurants for every meal, it probably doesn’t matter what McD’s offers, obesity will continue to increase.

    KC's View: