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: April 11, 2012

    by Kate McMahon

    Like millions of Americans, I have become obsessed with points.

    Not point spreads. Or mortgage points. Or reward points. Or my high school junior’s grade-point-average.

    But rather Weight Watchers Points, which are being tallied on computers and smartphone apps and highlighted on product labels on supermarket shelves across the country.

    The venerable company has seen its revenues soar since the introduction of its Weight Watchers Online program in 2010 and its retooled PointsPlus system for tracking food intake and exercise earlier this year.

    Even ex-NBA star Charles Barkley is a PointsPlus kind-of-guy, dressing in drag to reveal his slim physique as spokesman for the Weight Watchers for Men Online campaign. (WW’s other face, Jennifer Hudson, strikes the sultry pose much better than Sir Charles.)

    The idea behind PointsPlus is to measure the fat, carbohydrate and protein calories consumed daily and reduce each item of food to a number of points. The WW website lists the value of some 40,000 items. Ditto menu choices items from hundreds of restaurants and chains. If the food or dish isn’t on the list, it is very easy to calculate the points by entering basic info into your computer or smartphone app or WW calculator. Even cooler? A new integrated barcode scanning app that reveals the PointsPlus value of an item with a quick scan.

    WW members, who can join the online community or choose to attend the traditional weekly meetings, are allowed to consume a pre-determined number of points each day depending on height, weight, age and weight loss goal. Each dieter also gets an extra 49 points to be used throughout the week to splurge on a special occasion or favorite food craving, and can swap out food points for earned “activity points. The online site has a multitude of trackers, e-tools, recipes, menus, plan-friendly shopping lists, advice and products. And there are “cheat sheets” for categories including breakfast, salad bars, barbecue, beers and happy hours.

    Quite an evolution since an overweight Brooklyn homemaker named Jean Nidetch founded the WW support groups back in 1963 and participants logged their calories in a notebook. The business take-aways here? Credit Weight Watchers for:

    Capitalizing on the nation’s need to lose weight and burgeoning fascination with nutritional information of all kinds.

    • Launching a sophisticated program aimed at men only, keying in on foods, exercise and health issues that pertain to men.

    • Utilizing cutting edge technology and social media to keep both genders engaged down to the last tablespoon of salad dressing or swig of artisanal brew.

    • WW is creating an evolving system with enormous buzz that is affecting how people shop the supermarket ... and supermarkets have virtually no influence or impact on it. This is a marker for a new reality that businesses have to face - that more than ever, there are compelling outside influences dictating shopping behavior.

    I’m two weeks into this and have radically changed my dieting and shopping habits. I scrutinize every label, and am always delighted to find a product (such as Progresso’s Light soups) which have the PointsPlus already computed. In the frozen foods section, I know I can find PointsPlus on Weight Watchers’ entrees as well as the competition - Lean Cuisine – in the same freezer case.

    And when I’m going out to eat, I can plan ahead.

    If that means splurging and using more than half of my daily PointsPlus allotment (26) on an In-n-Out double-double burger (18), it’s well worth it. Just hold the fries.


    Comments? Send me an email at kate@morningnewsbeat.com .
    KC's View:

    Published on: April 11, 2012

    by Kevin Coupe

    The New York Times reports that Denny’s - the very definition of a homey, middle American restaurant chain - is gaining some edge, courtesy of a new internet series that is designed to engage the Millennial generation.

    The series features a series of interviews conducted in a Denny’s booth by comedian Dave Koechner with people such as Jason Bateman, Will Arnett (who co-produce the series), Sarah Silverman, Maya Rudolph and Jessica Biel.

    One example of the repartee featured in the series, as described by the Times: In a conversation with Biel, Koechner says: “You climbed Mount Kilimanjaro. Let’s say we’re trapped on the mountain together, both of us, we’re freezing, and we need to share bodily warmth. Do you think it would get romantic?”

    The videos are between three and four minutes long, and can be seen only on CollegeHumor.com. However, they also can have much broader exposure since, as the Times notes, the interview guests tend to be active in social media. Silverman tweeted about the experience to her 2.8 million Twitter followers, as did Arnett and Bateman, each of whom has more than a half-million followers.

    This is an Eye-Opening approach for a company that rarely seems to open anyone’s eyes (though it sometimes has raised people’s eyebrows). You want to appeal to Millennials? You have to go to them on their terms, and not expect them to come to you on yours.
    KC's View:

    Published on: April 11, 2012

    The Wall Street Journal this morning reports on how chains such as Walmart and Target are working to avoid the “showrooming” trend, in which people go into bricks-and-mortar stores to look and feel products, and then use their mobile devices to order them online. This is a big deal, since “today half of shoppers who buy products online first checked them out in a traditional store, according to a recent study of 900 shoppers by Minneapolis-based research firm ClickIQ Inc. While the majority of survey respondents favored Target and Wal-Mart stores for researching merchandise, half of the online consumers wound up making their purchases on Amazon.”

    Target, the story says, is trying to get suppliers to provide exclusive product that cannot be bought elsewhere, and “also has quadrupled the number of items available online and is sending special coupons directly to customers' mobile phones.” Walmart is “emphasizing in-store pickups for online orders - many available the same day they are purchased - allowing customers to avoid shipping fees.”

    However, such approaches may have limited impact: “The real hurdle ... is pricing. Lower prices are one of the main reasons people pick Amazon and other Internet-only emporiums over traditional retailers. If brick-and-mortar stores can't compete on price, it is unclear how successful they can be with tweaks to merchandising and customer service.”

    And here’s the pricing reality, as reported in the Journal story: “Amazon's prices are 9% lower than Walmart.com's when sales taxes are excluded for Amazon, but shipping is calculated for both, according to a William Blair & Co. study. In the same matchup, Amazon beats Target.com by 14%.”

    The story goes on to say that while “traditional retailers hesitate to emphasize the price differences between their websites and their stores because they don't want to compete against themselves,” this attitude may be evolving to some degree “as stores realize that the competition isn't between stores and websites, but between their websites and those of other online emporiums.”
    KC's View:
    To me, the most important thing for bricks-and-mortar retailers to do is offer front line service that is simply so compelling and inimitable that people don’t price check on the internet, or don’t care if they pay a few cents or dollars more in the store. This all ties together with the Ad Age story that Michael Sansolo referenced yesterday in his column, about how there is no such thing as a menial retail employee performing an inconsequential job. Rather, these people may be the difference between a sale and a pass.

    Published on: April 11, 2012

    The Wall Street Journal reports that “for the fourth quarter, Supervalu reported a loss of $424 million, or $2 a share, from a year-earlier profit of $95 million, or 44 cents a share. Excluding goodwill and work-force reduction charges and other items, earnings were 38 cents a share,” which was better than the 35 cents per share predicted by analysts.

    Revenue decreased five percent to $8.23 billion.

    The Journal story quotes CEO Craig Herkert as saying that Supervalu is entering the second year of its business transformation effort. "It involves removing price as a barrier to customers shopping in our stores," he said. "Our long-term strategy is to bring pricing in line with our primary conventional competitors and narrow the gap to discounters." But doing so will cause identical-store sales to fall in the short term, Herkert emphasized.

    And the Associated Press quotes Herkert this way: “Our disciplined approach to pre-funding price investments is allowing us to invest across markets, categories and items. We remain focused on delivering improved value for our customers and meeting the specific needs of each community we serve.”
    KC's View:
    Other than the enormous flood of emails I’ve gotten in recent weeks from past and current Supervalu employees saying that the morale there is in the toilet, there is something else that makes me a little skeptical about Supervalu’s future.

    The Journal story says that “Supervalu has been trying to cut costs so that it can afford to lower prices on its shelves, hoping to steal customers from rivals like Kroger Co. and Safeway Inc. In February, it said it would eliminate 800 office jobs. Supervalu has also been remodeling stores to focus more on fresh produce and a local feel, putting it in a better position to compete with organic grocers like Whole Foods Market. This year, it plans to remodel 100 more.”

    Can it really do both? I’m just note sure.

    One other thing.

    I know I’m not the most sophisticated guy about such things, but if I went home and told Mrs. Content Guy that revenues were down and instead of making a profit I’d had a loss, I’m not sure she’d buy it if I added, “But I’m gaining traction.”

    Sort of reminds me of the old joke that my dad told me when I was a kid about the airline pilot who gets on the intercom and announces to the passengers, “I have good news and bad news. The bad news is that we’re lost. The good news is that w’re making good time.”

    Published on: April 11, 2012

    BJ's Wholesale Club announced yesterday that its locally grown produce program, "Farm to Club," will be available in each of its 195 clubs in all 15 states where its clubs are located. The program includes a variety of fresh fruits and vegetables including zucchini, tomatoes, corn, green peppers, yellow squash and cucumbers and will be clearly marked with a special "Farm to Club, Locally Grown" seal.

    According to the announcement, “While there is no official standard to define ‘local,’ BJ's defines ‘local’ as grown within the state. Buying local produce benefits BJ's members, their communities, and helps to preserve local farms. Locally grown produce is picked at the peak of its flavor, and since the produce doesn't have far to travel, its nutritional value and freshness are preserved. Buying local also helps the area's economy by building up the local agricultural industry and by helping keep money within the community.”
    KC's View:

    Published on: April 11, 2012

    The Boston Herald reports this morning that global beauty chain Sephora has equipped each of its 305 stores around the world with iPads that serve as “mobile point-of-sale option for customers, helping to mitigate the sometimes-long lines that form in the store.”

    The move is part of a broader technology play by the company. According to the story, “20 Sephora stores, including the Prudential Center location, will have two to four iPads to help clients interact with a menu of services offered at their makeover studios.

    “Sephora’s new website launched yesterday and was so highly trafficked that it crashed that afternoon. It allows customers to ‘pin’ their favorite products to virtual boards on Pinterest and gives users a behind-the-scenes look at the company and its staff through a new Instagram feed, the popular photo-sharing app snapped up by Facebook for $1 billion yesterday.”

    Julie Bornstein, senior vice president of Sephora Digital, says that the Apple Store is her model:
    “It’s about leveraging consumer technology to make shopping easier and more fun.”
    KC's View:
    I love it. I may actually to go into a Sephora to see how it all works, though it will be something like a rhinoceros going to a tea party.

    Published on: April 11, 2012

    • The Boston Globe reports that software giant Intuit is buying AisleBuyer, the Boston startup that “allows consumers to scan a product's barcode in a store, see reviews and ratings, and, if they choose, pay for that product with a credit card without having to stand in line at a register.” Terms of the deal were not disclosed but the Globe notes that “AisleBuyer has raised about $11 million in equity and debt financing since it was founded in 2009.”

    • The Los Angeles Times reports that Maryland has become the first state in the union to pass a bill making it illegal for companies to ask potential employees for their social media passwords so they can check out personal information online. This trend recently was highlighted in a series of stories in the media about how some companies have been demanding such information, a practice that some have suggested is illegal - or certainly improper.

    The story points out that “measures similar to Maryland’s have been introduced in Illinois, Michigan and California.”
    KC's View:

    Published on: April 11, 2012

    • Brian Dunn, the CEO of Best Buy, resigned yesterday under a cloud of an internal investigation into his “personal conduct.”

    The Wall Street Journal reports that the company said in a statement that “certain issues were brought to the board's attention regarding Mr. Dunn's personal conduct, unrelated to the company's operations or financial controls, and an audit committee investigation was initiated. Prior to the completion of the investigation, Mr. Dunn chose to resign."

    The Journal also notes that Dunn “was a rare CEO in modern American retailing: a onetime store salesman who worked his way to the top over nearly three decades at the same company. He never attended college, joking that he went to the ‘university of retail’.”

    Bloomberg BusinessWeek reports that Mary Winston, CFO at Giant Eagle, is leaving the company to join Family Dollar Stores, where she will succeed Kenneth Smith as CFO. Smith is stepping down after 22 years with the company.

    The Wall Street Journal reports that “Avon Products Inc. has named Johnson & Johnson executive Sherilyn S. McCoy as its new chief executive, one week after the company turned down a $10 billion takeover proposal from rival Coty Inc.”
    KC's View:

    Published on: April 11, 2012

    On the subject of troubled being experienced by Toys R Us, MNB fave Glen Terbeek wrote:

    The government says that a company is too big to fail.

    My experience is that a company becomes too big to succeed.  While I was working with large retail clients, one of the most amusing comments that I would hear in some form or the other is "Ya but we can't do that, we're too big".

    A retailer that grows their organizations to be more important than the local store, is when they run into problems. I also would always ask, "Who is responsible for the local market performance of each store?"  Again after some discussion the answer would always be, "We all are, but no one person really is."

    Most breakthrough innovation comes from small companies, unencumbered by risk adverse, functional organizations measured inappropriately.   Which brings me to the other quote which I often heard, "What a great idea, who else is doing it?"

    Enough said.


    From another MNB user:

    My son has long ago abandoned Toys R Us as the place to get his Lego sets (some of which are quite pricey!) because even tho they have it on sale, and their website says a particular store has it in stock, once he gets there they no longer have it, or never even stocked it in the first place. He has learned, at the tender age of 12,( he is now 16), to never go there again. It`s o.k., since in my opinion he has enough Lego`s (he inherited mine) but Lego`s has cleverly gone to sets and so still has him hooked.

    And from another MNB user:

    As a mother of four kids between the ages of 3 and 9, I'm in the target demographic for Toys R Us, and yet, every time I step foot into one of their stores, I wish I hadn't. Incompetent staff who don't care, higher prices than other stores, and a horrible return policy all make Toys R Us the last place I want to visit. The bottom line is that I try to avoid shopping there at all costs. I'm not sure there is anything Toys R Us could do to induce me to shop there again. IMO, good riddance if they do close for good.



    Which leads naturally into this email, from another MNB user about Michael Sansolo’s column this week about the importance of front line employees:

    Michael hit the nail on the head with his front line people statements.  People always complain about automated phone answering.  Corporations like banks, supermarkets, and retailers in general put the lowest paid people in contact with customers and few train them for proper interaction.  I still feel this lack of human interaction at the cash register is one of the problems Fresh and Easy faces.  Faster check out, yes.  No human face, no.  It is a losing proposition.  It is the human interaction that creates the “face” and memories that will drive the customer away or bring them back.
    KC's View:

    Published on: April 11, 2012

    • The Miami Marlins announced yesterday that team manager Ozzie Guillen is being suspended without pay for five days, following his comments, published in Time that he admired Cuban dictator Fidel Castro for having stayed in power so long.

    The suspension came just before Guillen apologized for his comments, saying that he understood that he had hurt the Latin community but had not meant to embrace Castro or his policies.

    The Marlins have begun the year with a new name, new uniforms and new taxpayer-funded ballpark in the heart of Little Havana, making the comments by Guillen - who happens to be the club’s new manager - politically charged.
    KC's View:
    Ozzie Guillen said something stupid and insensitive?

    Stop the presses.