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    Published on: April 4, 2012

    by Kevin Coupe

    Forbes has a piece about the Millennial generation in which it sums up that group’s economic situation as follows:

    Lack of cash, skepticism about big business, a preference for customized products and heuristic purchasing experiences and possibly a lifelong tendency toward scrimping.”

    This characterization is linked to high rates of unemployment and/or under-employment, a lack of disposable income (especially compared to previous generations of twentysomethings), an attitude toward big business that borders somewhere between skepticism and distrust, and a desire for “unique, immersive” products and buying environments.

    It is why, Forbes concludes, “Retailers have a right to be nervous about the Millennial market.”

    It’s an Eye-Opener.
    KC's View:

    Published on: April 4, 2012

    Consumer Reports is out with its annual supermarket ratings, concluding that the nation’s best stores are, in order: Wegmans, Trader Joe’s, Publix, Fareway, Costco, Harris Teeter, Market Basket, Raley’s, Hy-Vee and Stater Bros.

    The ratings are based on a survey of more than 24,000 shoppers nationwide.

    The story in the May Consumer Reports also ranks various chains in specific categories. For example, when it comes to parking, , Aldi, Food Lion and Ingles are rated at the top, while Trader Joe’s is rated as worst. In store layout, Fareway gets top marks, while Giant Eagle and Walmart get failing grades. Fresh produce is best at Raley’s, Wegmans, and Whole Foods, and worst at Walmart. Baked goods are best at Costco, Harris Teeter, Stater Bros., Trader Joe’s, Wegmans and Winco, and worst at Pathmark and Walmart. “Specials in stock” are rated highly at Whole Foods and Winco, worst at Pic ‘n Save. Open checkouts are tops at Trader Joe’s and worst at Walmart. Checkout speed is fastest at Fareway, Harris Teeter, Hy-Vee, IGA, Publix, Raley’s, Trader Joe’s and Wegmans, slowest at Pathmark and Walmart. And finally, scanning accuracy is greatest at Costco and Trader Joe’s and worst at Pathmark. (The folks at Walmart and Pathmark cannot be pleased by the survey results.)

    Nobody, however, should be feeling sanguine about the survey results. As Consumer Reports writes, “One-third of subscribers we surveyed in our 2011 Annual Questionnaire said they had given the heave-ho to a nearby grocery store. Forty-three percent fired a grocer in search of lower prices; about 25 percent cited poor selection, long lines, or lousy food; 17 percent blamed employee rudeness; 14 percent, the crowds ... Of the 24,203 readers who told us about 42,695 supermarket experiences, more than half had at least one complaint about their current store; almost a third cited two or more. Even high-rated chains such as Raley’s (in the West) and Wegmans (mid-Atlantic) gave plenty of readers something to criticize.”
    KC's View:
    Last week I took issue with the Consumer Reports bagel evaluations, and this week I’m afraid that I have to suggest that at the very least, these ratings do not represent the best of US supermarket retailing. Some of the chains mentioned are, indeed, something special ... but while some of them would never make my list, there are enormous gaps in the list.

    Where is Dorothy Lane Markets? Or Lunds/Byerly’s? Or Metropolitan Markets? Or any of HEB’s formats, especially Central Markets? Or Schnucks?

    “Best” and “worst” may not be the best descriptive words for Consumer Reports to use here - in part because my “best” may be completely different from someone else’s ... it all depends on what our priorities and life-stages are. It may even depend on the day of the week and the time of day.

    Published on: April 4, 2012

    Food Safety News reports that US Rep. Chellie Pingree (D-Maine) has introduced a bill that would require beef products containing Lean Finely Textured Beef - better known these days as Pink Slime - to be labeled as such.

    According to the story, “The REAL Beef Act has ten co-sponsors in the House: Chris Van Hollen (D-MD), Betty McCollum (D-MN), Dennis Kucinich (D-OH), Barbara Lee (D-CA), Eleanor Holmes Norton (D-DC), Rush Holt (D-NJ), Tim Ryan (D-OH), Adam Schiff (D-CA), Jerry Lewis (R-CA) and Jan Schakowsky (D-IL).”
    KC's View:
    No idea if the politics of the moment will allow such a bill to pass. But it should not matter. Transparency that is more than lip service requires that labeling be complete and accurate. We should not need the government to make it happen.

    Published on: April 4, 2012

    Reuters reports that Amazon.com “is trying to grab some of the billions of advertising dollars spent each year by consumer packaged goods companies including Kimberly-Clark Corp, as the world's largest Internet retailer seeks new sources of revenue growth.”

    According to the story, “US CPG industry online ad spending will approach $5 billion by 2015, double last year's level, according to estimates by eMarketer, an Internet market research firm ... Amazon began selling ads for other companies on its websites about six years ago and now runs campaigns that also appear on its Kindle devices. The effort has picked up steam in the last year, putting the company in closer competition with online ad leader Google Inc.”

    In a speech this week, Lisa Utzschneider, vice president of global advertising sales at Amazon, talked about how CPG advertising is a “huge opportunity” for the company , and the story lays out one example:

    “Amazon recently ran an ad campaign for Kimberly-Clark diapers called Huggies Slip-ons that ran across Amazon websites and its Kindle devices. Amazon included an offer in some of the ads for $2 off plus a 20 percent discount on Amazon's subscribe-and-save program. Amazon also embedded customer reviews in some of the ads, Utzschneider explained.

    “The ads made consumers 30 times more likely to find out more about the diapers and 13 times more likely to buy them, she said.

    “The ads that ran on mobile devices helped double sales of Huggies Slip-ons via such devices during the campaign, she added.”
    KC's View:
    Here’s why Amazon may be able to make real headway in this area - as the story says, “The key is being able to use massive amounts of personalized shopping data to better target ads.”

    I firmly believe that the ability to target customers through a comprehensive and intimate knowledge of who they are and what they buy will be the defining differential advantage of the coming decade and beyond. And one, by the way, where Amazon has a real head-start.

    Published on: April 4, 2012

    The Wall Street Journal reports that the National Retail Federation (NRF) is predicting that this Easter, “the average person is expected to spend $145.28, up 11% from last year's $131.04. All told, a record $16.8 billion is projected to go into Easter-related spending, the trade group said.”

    “A rising tide is being felt throughout the sector, as fashion trends continue to resonate, favorable weather drives pent-up demand, and we continue to note ongoing strong customer traffic," Adrienne Tennant, retail analyst at Janney Capital Markets, tells the Journal, addressing the prediction. "My general sense across the sector is that most retailers are likely running above [their sales] plans in March."
    KC's View:

    Published on: April 4, 2012

    HomeMedia Magazine reports that “little more than six months after it infamously bowed and then scuttled stand alone by-mail disc rental service Qwikster, Netflix apparently is incorporating user-interface changes that further sequester physical and digital subscribers.”

    What this means, the story says, is that people who rate, rank and review movies that they’ve watched on DVDs rented from Netflix cannot access those reviews on the company’s streaming service. Previously, the story says, “movie reviews and rating — whether physical or digital — appeared on the same Netflix page.”
    KC's View:
    I keep thinking that the Netflix experience is going to be instructive to a lot of retailers, as the entertainment purveyor struggles to find a way to satisfy customers first while living up to its own business imperatives.

    Published on: April 4, 2012

    ...with occasional, brief, italicized and sometimes gratuitous commentary...

    • The Minneapolis / St. Paul Business Journal reports that Supervalu and its CEO, Craig Herkert - are big users of Yammer, described as “a type of commercial-grade social media software that's like an in-company Twitter.”

    Herkert, the story says, “is a big proponent, getting the idea for adopting Yammer in 2010 as a way to help build a shared culture among its various chains, which include Cub Foods    and Save-a-Lot.”

    Maybe I’ve been misunderstanding some of the emails we’ve been receiving here at MNB, but it has been my impression that not everyone at Supervalu is convinced that upper management is committed to the sharing of ideas that sites like Yammer promote, and are less than committed to a “shared culture.”

    If the story is correct - and not just a PR response to bad press - then Supervalu has some serious work to do. Because the view from here suggests that not everybody in the company is getting the message, and that a lot of people do not feel appreciated.


    • Giant and Safeway workers in the Washington, DC area represented by United Food & Commercial Workers (UFCW) Local 400 have overwhelmingly ratified a new collective bargaining agreement that the UFCW said “provides for significant wage increases, improved health benefits and strengthened retirement security.”

    According to the announcement, “the collective bargaining agreement takes effect retroactively on April 1, 2012 and ends on October 31, 2013. Its 19-month duration is due to the uncertainty around implementation of the Affordable Care Act and its impact on the health and welfare plan covering Giant and Safeway workers.
    KC's View:

    Published on: April 4, 2012

    • Catherine Lindner, vice president of retail marketing for the Walgreen Company in Deerfield, Ill., has been named vice chair of the Network of Executive Women. Under the Network's bylaws, Lindner will assume the post of Board chair when the term of the current Board chair -- Michelle Gloeckler, senior vice president, home, Walmart US — expires in October 2012.
    KC's View:

    Published on: April 4, 2012

    Yesterday, MNB took note of a Fast Casual report that Chipotle, normally held up as a relative paragon of virtue and integrity within the fast food community, “ is facing scrutiny over its unwillingness to work with the Coalition for Immokalee Workers (CIW), an organization dedicated to improving the working conditions of tomato harvesters in Florida.”

    The problem is that Chipotle has not signed an agreement that would have tomato harvesters pay a penny more per bushel, which CIW says would go a long way toward improving working conditions for people in the fields. But Chipotle says that its relationships with independent growers do as much to support worker wages as any signed agreement with the CIW.

    CIW says that Chipotle’s stance is misleading, and that it should take the formal step of signing the agreement.

    One MNB user responded:

    I find it disappointing that you continue to give any space at all to stories about the CIW.

    The CIW is nothing more than a Bully on the playground attempting to get companies to ‘ante up’ with no reason for doing so. The facts on this organization can speak for themselves.

    I applaud the stand by Chipolte and all others that refuse to give in to such tactics by the union.

    I would hope that the MNB would be a place to expose the facts rather than giving ‘air time’ to a bully that does not deserve it. We would be better served by refusing to give attention to such misguided efforts.


    MNB user Dan Jones wrote:

    One of the most admired grocers in the world, Publix, did not sign on with the CIW on tomato prices, and CIW slammed Publix in the press.  One of the most admired chain restaurants in the world, Chipotle, did not sign on with the CIW on tomato prices, and CIW slammed Chipotle in the press.

    I have not studied the issue in depth, but it seems there are some real issues with either the CIW program, or the CIW bullying tactics.  Or both.


    And from another MNB user:

    IMHO, I think Chipotle is doing the right thing by setting the ceiling…rather than signing on with the lowest common denominator…

    For the record, I think that Chipotle is making a solid argument in saying that it is supporting workers’ rights in other ways, and does not feel the need to work through the CIW. Publix took a different position, if I recall correctly - that it was not the retailer’s role to choose sides in such fights. I’m not sure I agree with that position ... I think that retailers and manufacturers can choose sides whenever they want, and that it can be an entirely appropriate role for them to take.



    I wrote yesterday about a new concept called a “Tacocopter” - the idea is to allow people to order tacos via their smartphones, and then have unmanned drones deliver them to the customer by identifying their location through the use of the GPS system in their devices. You pay online, so all the Tacocopter has to do is drop the tacos off and fly off to make its next delivery.

    I wrote:

    Which sounds, once one stops laughing, actually like a really cool idea.

    Except for one problem. According to various reports, US law makes such a system illegal; it is against the law to fly unmanned aerial vehicles for commercial purposes within US borders.

    As opposed to, say, using them to drop bombs on foreign countries.

    Which made me think. I wonder if we’d be any further along in the war against terrorists if we were dropping tacos - and maybe even burgers and fries - on these towns and villages instead of bombs.

    (Think about it. Instead of destroying things and killing people, we just send them hot, salty fast food that they get totally addicted to. Either they drop their guns and decide to try to buy a McDonald’s franchise, or they keep eating and give themselves a heart attack. Either way, we win.)

    I’m just thinking...


    MNB user Mike Franklin wrote:

    Now that’s funny…a global food fight instead of thermal nuclear mutual annihilation. IMHO, soldiers would meet in street warfare and exchange ideas about the best burger…and then maybe go to a coffee shop and become friends.

    MNB user Nora Ludviksen wrote:

    Laughing my head off, Kevin!  But it sure would be better than the current payload. Brilliant.

    But Leo Martineau chimed in:

    You stated in your article that it is illegal to fly a drone over US soil. That will change in May according to an article that appeared in Computerworld last week. The FAA will begin to license them to fly above 400 feet so let the tacos fall!

    I have the feeling that suddenly the skies are going to look like the airspace in the local mall, where there always seems to be a kiosk with a guy selling remote-controlled model planes and helicopters that buzz shoppers as they walk by.

    My instinct is always to reach for a baseball bat and knock them out of the sky.
    KC's View:

    Published on: April 4, 2012

    • Baylor defeated Notre Dame 80-61 in the NCAA women’s basketball championships last night, becoming the first NCAA team in history - men or women - to have a 40-0 season.
    KC's View: