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    Published on: April 18, 2012

    by Kevin Coupe

    It is a mark of Amazon’s growing ambitions that the e-tailing pioneer just has taken on a new role - that of James Bond’s US publisher.

    That’s right. Yesterday, Amazon.com announced that it has acquired the North American print and digital rights to publish all of Ian Fleming’s 14 original James Bond novels. The 10-year deal will permit Amazon’s Thomas & Mercer publishing imprint to create a new series of covers for the print editions, which also will be available in competing bricks-and-mortar bookstores. (Though it will be interesting to see if any of them decide not to carry the backlist novels because they are being published by the entity that seems foresworn to put them out of business. Would M and Blofeld go into business together? I think not...)

    In the beginning, Amazon says, it plans to make digital editions of the novels available only for its Kindle devices and not for competitive e-book readers.

    Amazon supporters will say that the company is only trying to assure a steady flow of content for its Kindles, and that by becoming a publisher, it is helping to make more books available to the reading public. But opponents will suggest that its moves are akin to creating a kind of monopoly by controlling all aspects of the publishing process - the literary version of building a lair into a volcano and planning to take over the world.

    Whatever. Amazon’s timing is good, with James Bond’s legacy likely to get a shot in the arm this November with the release of Skyfall, the latest movie about the superspy to star Daniel Craig.
    KC's View:

    Published on: April 18, 2012

    Bloomberg BusinessWeek reports that Tesco CEO Philip Clarke said this morning that the company “will invest 1 billion pounds ($1.6 billion) to revive sales at home, while slowing expansion in other parts of the world as it makes a domestic turnaround its first priority.” Tesco has been slowly losing market share to almost all its UK competitors, and recently reduced its profit guidance for the first time in two decades.

    In addition, Clarke said that the timetable for its Fresh & Easy US division to move into profitability has been extended by a year to fiscal 2013, and he said the company “will focus on making the existing 185 stores in the country profitable before expanding the business further.”

    Clarke said, ““I was quite prepared to think it wouldn’t work, but I’m not in that place now ... We’ll be able to push it over the line.”

    According to the story, Clarke said that “U.K. stores will be given a ‘warmer look and feel,’ while the company will also add 8,000 supermarket workers, and pump 150 million pounds into expanding its online offer ... The retailer said 430 supermarkets, representing more than a quarter of its U.K. selling space, will be revamped this year. Grocery ranges will be overhauled, with the 1 billion-pound Value line due to be relabeled as Everyday Value and more than 2,000 new standard products being introduced by April 2013.

    “Tesco plans to double its online offering of non-food goods to 80,000 lines by Christmas and will extend its Click & Collect business, where shoppers pick up purchases in store, to 1,600 outlets including Express convenience stores.”

    “The plan isn’t radical, but it’s a radical change of pace,” Clarke said on a analysts call, adding, “We remain confident of making modest progress this year despite the substantial planned revenue investment.”

    The story also says that “Clarke dismissed suggestions that large-format hypermarkets are a dead format. ‘The future of the hypermarket is going to be a little bit more food, with general merchandise and clothing,’ he said. ‘This is about responding to the internet and customers rather than saying the hypermarket is over, which it isn’t’.”
    KC's View:
    Not quite sure what to make of Clarke’s comments about Fresh & Easy ... it sounds like he was prepared to pull the plug and sell the division, but got convinced - probably by US chief Tim Mason - that the US business is gaining the kind of traction it needs to get profitable.

    I would suspect, however, that this is the last extension, the final leap of faith that a Tesco CEO is going to make when it comes to Fresh & Easy.

    Published on: April 18, 2012

    SymphonyIRI Group is out with its annual New Product Pacesetters report, which highlights the past year’s most successful food and beverage and non-foods consumer packaged goods (CPG) brands, saying that while “many of today's most powerful launches hail from the industry's biggest and most well-rooted manufacturers, such as Procter & Gamble and PepsiCo,” there also “is an increasing trend toward manufacturers, big and small, bringing highly-targeted new products ... Both long-established manufacturers and newcomers to the game are providing innovation that is setting the stage for the CPG world of tomorrow.”

    The top 10 new food product brands of 2011 were PF Chang’s Home Menu, Thomas’ Bagel Thins, Oscar Mayer Selects, Folgers Gourmet Selections K-Cups. M&M’s Pretzels. Sun Drop, Kellogg's Special K Cracker Chips, Lean Cuisine Market Creations, Gold Peak Chilled Tea, and Bailey’s Coffee Creamer.

    In nonfoods, the top 10 brands of 2011 were Pampers Cruisers/Swaddlers with Dry Max, Gillette Fusion ProGlide, U by Kotex, Schick Hydro, Maybelline Volum’ Express Falsies, Nicorette Lozenge, Sally Hansen Salon Effects, Tide plus Febreze, and Ensure with Revigor.

    "The Pacesetters of today, having beaten the new product odds regardless of a difficult and complex environment, are truly remarkable," says Larry Levin, executive vice president, Consumer Insights, SymphonyIRI. "It all begins with really listening and responding to consumers. Those manufacturers that are taking the time to gain an intimate knowledge of the needs and wants of their consumers are cracking the code on true innovation."
    KC's View:
    The notion that more and more the most successful new products are highly targeted, as opposed to having mass appeal, is an interesting one ... especially in the context of my contention that, more and more, marketers may be wasting their money with programs aimed at the mass market. I think that all efforts - from product creation to marketing to sales - have to be more targeted, based on an information continuum about needs and desires and preferences.

    Published on: April 18, 2012

    The San Diego Union Tribune reports that Southern California’s major grocery chains seem to be engaging in a price war, as “Ralphs and Walmart recently lowered everyday prices on food in response to increasing competition for grocery dollars.” That competition is coming from the likes of “Fresh & Easy, Northgate Gonzalez Markets and big-box ‘super stores’ (that) are making inroads against union chains like Ralphs, Vons and Albertsons.”

    The story notes that “price wars have happened before, most recently in 2009, when Vons, Ralphs and — to a lesser degree — Albertsons slashed prices as discounters Walmart and Target began selling more food. That effort eventually fizzled out.”

    The Union Tribune writes that “Walmart hasn’t issued a formal announcement about its price drops but at an industry conference in March, an executive shared the plans to lower prices on food and consumables, saying that consumers would come for the food then fan out to make purchases in other parts of the store.”
    KC's View:
    The problem with a price war, IMHO, is that really can be no winner. It is just everybody driving prices lower, undermining the notion of value in favor of the concept of cheap, with nobody achieving a meaningful and sustainable advantage.

    Published on: April 18, 2012

    The Los Angeles Times reports that advocacy group Oceana has found that DNA tests of seafood from 74 retail outlets in LA - including sushi bars, other restaurants, and grocery stores - revealed that “55% of 119 fish samples from across L.A. were misidentified,” and that “red snapper, Dover sole, white tuna and other fish were often different species.”

    This was, in fact, the latest and worst in a series of studies of seafood mislabeling. According to the story, “Consumer Reports found that 18% of seafood samples its researchers collected from retail stores and restaurants on the East Coast last year was mislabeled. A 2011 investigation by the Boston Globe reported that 48% of the fish it collected from Boston restaurants, grocery stores and seafood markets was sold with the wrong species name.”

    While Oceans focused on frequency rather than the source of mislabeling, its spokesperson emphasized that “fraud can occur at any point in the supply chain, beginning when the fish is landed and through to processing, distribution and final point of sale.”
    KC's View:
    This does not surprise me, and I have no reason to doubt these findings. Everybody will say that the fraud is taking place elsewhere in the supply chain, but there’s probably a little bit of misidentification taking place everywhere.

    The real lesson of this story is that technology makes it possible to identify the fraud, and communicate it instantly to shoppers. Forget morality. A simple reality check should tell the perpetrators that to continue such practices is to undermine the industry, to put short-term gain in front of long-term growth and credibility.

    Published on: April 18, 2012

    Politico reports that Walmart plans to roll out the red carpet for the Democratic National Convention when it is held in Charlotte, North Carolina, this summer - and will give the host committee $50,000 in gift cards.

    According to the story, “the gift cards are considered an in-kind contribution, so they do not violate the strict Democratic National Committee rules which bar corporate cash donations ... DNC Chairwoman Debbie Wasserman Schultz announced in September that none of the $37 million Charlotte organizers must raise would come from lobbyists, corporations or political action committees. The rules allow in-kind contributions for things such as telecommunications equipment and vehicles.”
    KC's View:
    Only in the world of American politics would $50,000 in gift cards somehow be seen as more appropriate and acceptable than a check or cash.

    Published on: April 18, 2012

    The Nielsen Co. has a new report entitled “State of the Hispanic Consumer: The Hispanic Market Imperative,” in which it notes that “Latinos are a fundamental component to future business success, with a buying power of $1 trillion in 2010 that is projected to grow 50 percent to $1.5 trillion in 2015.”

    Among the report’s key findings:

    • “The overall U.S. population is graying, but the Latino population remains young and the primary feeder of workforce growth and new consumption. The median age of the Latino population is 28 years old, nearly ten years younger than the total market median age of 37 years. Given that the age for a new home buyer is between 26 and 46 years old, Latinos will become a force in residential purchasing over the next ten years.”

    • “Technology and media use do not mirror the general market but have distinct patterns due to language, culture, and ownership dynamics. For example, Hispanics spend 68 percent more time watching video on the Internet and 20 percent more time watching video on their mobile phones than non-Hispanic whites.”

    • “Latinos exhibit distinct product consumption patterns and are not buying in ways that are the same as the total market. Hispanics make fewer shopping trips per household than non-Hispanics, for instance, and spend more per trip.”

    • “Rapid Latino population growth will persist. Between 2000 and 2011, Hispanics accounted for more than half of the U.S. population increase; in other words, their 10-year increase was slightly greater than that of all other non-Hispanics combined. Hispanics will contribute an even greater share (60 percent or higher) of all population growth over the next five years.”

    • “Hispanic culture is sustainable. A 2011 national survey of Hispanic adults found that nine out of ten Hispanic parents and parents-to-be want their children to be able to speak Spanish, even though they also want them to become fluent in English.”
    KC's View:

    Published on: April 18, 2012

    • The Wall Street Cheat Sheet reports that “Wal-Mart will have to step it up if the company is going to reach its goal of eliminating 20 million metric tons of GHGs by 2015. To date, the company has managed to reach less than 10 percent of its goal. Regardless, a Wal-Mart spokesperson said in March that the company has faith that it can reach its target.

    The story notes that “in 2005, the retail giant set goals of being completely supplied with renewable energy, to have no waste, and to sell products that sustain people and the environment. Wal-Mart announced in 2010 that it would eliminate 20 million metric tons of greenhouse gas emissions from its supply chain by the end of 2015. The amount totals to one-and-a-half times the company’s estimated global carbon footprint growth over the five year time-span.”

    • Walmart announced yesterday that its global e-commerce division “is doubling its India hiring target to 200 employees to create a new software platform” to be used in the US, according to a report from MarketWatch.

    The story says that “The new platform will connect Wal-Mart's online and store-room products worldwide, for customers and suppliers to interact and shop across devices and outlets globally, Wal-Mart said in a statement ... The move to expand India operations comes at a time when Wal-Mart is pursuing e-commerce opportunities around the world, both in developed markets where it already has stores and in markets where it doesn't.
    KC's View:

    Published on: April 18, 2012

    • Supervalu announced yesterday that as part of its Earth Day celebration efforts, it is expanding its environmental sustainability program and making a commitment “to have 300 stores divert 90 percent or more of their waste from local landfills by the end of the current fiscal year (February 23, 2013).”

    • Bottom Dollar Food is continuing its expansion efforts in the greater Philadelphia market with the opening of a new store this Friday, April 20, in Bordentown, N.J.

    Delhaize-owned Bottom Dollar Food opened its first store in the greater Philadelphia market, which encompasses stores in New Jersey, on Oct. 8, 2010. The discount grocer currently has New Jersey locations in Cherry Hill, Clementon, Cinnaminson, Glassboro, Marlton, Trenton (Hamilton Township) and Turnersville.

    USA Today reports that a coalition of consumer groups “sent a letter to the Food and Drug Administration Tuesday opposing a proposal by manufacturers to call high-fructose corn syrup ‘corn sugar’ instead. The coalition says consumers are against the name change by 100-to-1.”

    The story goes on to say that “the Corn Refiners Association petitioned the FDA in 2010 to allow "corn sugar" as an alternate name to high-fructose corn syrup in mandatory ingredient lists on food packages. The petition said ‘many consumers are confused and misled by the ingredient name’ and mistakenly believe high fructose corn syrup is high in fructose compared with other sweeteners such as sugar, honey and fruit juice concentrates.”

    • The National Grocers Association (N.G.A.) issued a statement by Peter J.Larkin, President and CEO, following the issuance of an injunction by the U.S. Court of Appeals for the D.C. Circuit blocking the National Labor Relations Board (NLRB) from requiring businesses to comply with the Board's employer posting requirement that was set to go into effect on April 30th, 2012.

    It said, in part, that "N.G.A. applauds today's decision by the U.S. Court of Appeals for the D.C. Circuit to block the NLRB's employer posting rule while the Court has the opportunity to hear arguments on the appeal in September. This decision comes on the heels of another decision last Friday by the U.S. District Court for the District of Columbia that ruled the NLRB overstepped its authority in promulgating the rule. These court rulings are a win for businesses and employees alike ... These rulings highlight the need to curtail the regulatory excess by the NLRB and is even more reason for the Senate and the House to stop the NLRB's actions through the Congressional Review Act by passing S.J. Res 36 and H.J. Res 103."
    KC's View:

    Published on: April 18, 2012

    A Note from The Content Guy...

    1. In my humble opinion, there is a “don’t miss” session...

    From Amazon to Zipcar: Innovations from the E-Revolution Twenty-first century change can quickly challenge your thinking and threaten your way of doing business - a new competitor, a new business concept, a new distribution model, or some other out-of-the-box idea that nobody saw coming. Tom Furphy, formerly of Wegmans and Amazon.com (where he developed the CPG business), and I will engage in a far-reaching and provocative dialogue that will include the audience and focus on where traditional retailing is heading, what can be learned from e-commerce successes, how to compete in the new environment, and how to understand the new consumer.

    I hope we’ll see you there today at 10 am, in C Ballroom 2 in the Dallas Convention Center..

    2. I also will be walking the FMI show floor with a video crew, working on a project and hoping to see as many MNB readers as possible. If you see us, give us a shout!


    See you in Dallas at FMI 2012...
    KC's View:

    Published on: April 18, 2012

    Some very different reactions to the management moved at Supervalu, as one MNB user wrote:

    I would like to comment on the promotion of Brian Audette to President of Cub Foods.  I have known Brian for most of the 21 years he has been at Supervalu.   I often remember my very first meeting with Brian in the early 1990’s as he was working with the vendor community to help discover the path forward regarding the newly developing area of “category management”.  He was then, and he still is, a class act!   It is gratifying to watch someone receive much recognized attention for the work they have done.   I have always felt this way about Brian as I have watched his  rise through the ranks of Supervalu.  I am confident he will lead Cub Foods with the same integrity and leadership he has for the first 21 years of his career.   

    Another MNB user wrote:

    Coming on the heels of the 100th anniversary of the sinking of the Titanic, the metaphor “Re-arranging the deck chairs on the Titanic”  seem appropriate.

    We’ll see.




    Regarding Walmart’s investment in small stores, one MNB user offered the following analysis:

    WalMart math, 15 Neighborhood Markets equal one Supercenter. The smaller the store, the tougher to run and make money.

    True. Except that you are not factoring into the equation the fact that Walmart is looking at the small stores as potential delivery depots that will help drive online sales and allow it to better compete with Amazon.




    Responding to yesterday’s story about postal union recommendations for how to make the US Postal Service viable again, MNB user Bobby Martyna wrote:

    I think this is a starting point -- and especially noteworthy that a union recognizes that extraordinary pay scales and benefits are part of the problem (implied by 'sacrifices' they are willing to make).  What gets me annoyed is when the phrase, "among the lowest in the world" is used, whether it is regarding stamps, fuel prices or anything else.

    America used to be the place other nations looked to for economic leadership.  Now we look to how bad things are in other nations and think that we could be as bad as they are, if we only tried.




    And, on another subject, MNB user Joe Luehrmann wrote:

    I know that everybody is excited about seeing large chains flooding into the underserved urban neighborhoods in Chicago and Detroit.

    What is NOT mentioned is what impact that will have upon those merchants who NEVER abandoned those neighborhoods.  For example, as Jewel and Dominick stores opened in the south side of Chicago, local independents like Moo and Oink have been forced out of business.

    What is going to happen to all those stores in Detroit's historic Eastern Market when these chains put down a few stores in the city?

    KC's View: