business news in context, analysis with attitude

Published on: June 4, 2012

by Kevin Coupe

There was a passage that grabbed my attention this weekend in the Wall Street Journal recap of its own All Things Digital technology conference...

"No one is safe from the vicissitudes of change that continually rock this industry, in which technological earthquakes alter the landscape daily and sometimes even hourly."

In this case, the WSJ was referring to the technology world ... but it strikes me that "this industry" could refer to almost any industry.

Indeed, the story suggested that not only is change unavoidable, but it also is almost impossible to predict in advance ... a position that was taken by Steve Jobs, co-founder of Apple, who was seen in a video clip from a previous All Things Digital conference:

"Again, you can't connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will somehow connect in your future. You have to trust in something - your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life."

But you have to keep moving forward ... keep changing everything. Except the stuff that works, and sometimes you even have to challenge what works because there will soon come a day when it will not, or someone else will figure out how to make it work better and differently.

Published on: June 4, 2012

The Associated Press< reports that Walmart CEO Mike Duke pledged Friday at the company's annual meeting that there will be a thorough investigation to allegations that there was systemic and systematic bribery in Walmart's Mexico business that allowed it to rapidly expand there and become a dominant retail entity.

"We've all heard about the recent allegations about the company," Duke told the audience. "Let me be clear: Wal-Mart is committed to compliance and integrity everywhere we operate. I want to personally assure you, we're doing everything we can to get to the bottom of this matter."

Investigations into Walmart's actions are taking place in both the US and Mexico, even as lawsuits are filed against the company by some investors and others call for a change in the retailer's board of directors.

However, expected protests at the annual meeting did not materialize last week, and all the board members were re-elected to their posts.

Meanwhile, Kantar reports that Walmart is expanding its grocery online ordering and home delivery service to parts of Chicago and San Francisco. previously, the test was limited to San Jose.

This expansion comes just days after Walmart announced that it plans to launch a monthly mail subscription service called 'Goodies' that will allow customers to sample new foods not found in stores run by the world's biggest retailer ... Once a month, subscribers will get a surprise box of items that will include artisanal foods, the company said. At first, Wal-Mart will select the products sent to subscribers, though over time companies may be able to pay to have their products included in the Goodies boxes.

Published on: June 4, 2012

The Charlotte Observer reports that Harris Teeter is acquiring 10 Charlotte, North Carolina, stores from Lowes Foods. a deal that is "likely to push Harris Teeter back into the No. 1 spot in the Charlotte grocery market." At the same time, the story says, Harris Teeter will sell six of its stores in smaller markets to Lowers, as well as paying Lowes $26.5 million.

"After the sale," the story says, "which is expected to be completed by July 1, Lowes will have only one store remaining in the immediate Charlotte area, in Harrisburg. Harris Teeter will operate more than 40 stores in the area, about a third more than the retailer does now."

According to the announcement, "Harris Teeter plans to temporarily close the acquired stores for five to sixteen weeks for remodeling, stocking and training of employees. Three of the acquired stores are expected to be converted to a new innovative format featuring a worldwide variety of wine, beer, specialty foods and other selected merchandise. One of the acquired stores is expected to be subleased."

Published on: June 4, 2012

eMarketer has an interview with John Leeman, CMO at pure-play e-grocer FreshDirect, in which he talks about why the online grocery business is more viable today than ever.

"First of all," he says, "at a fundamental technology level, broadband internet, and even mobile internet, are much more accessible today. So with almost no digital divide, all kinds of stores can target their consumers online. Second, the just-in-time supply chain concept now applies to much more than Dell computers. Logistics have become much better over the past decade. That’s how companies like FreshDirect have transformed the farm-to-table restaurant concept into the grocery store model."

The key, he says, is to innovate from the consumer's point of view: "A best practice is to take a scientific approach and understand your target segments’ most important needs and then execute flawlessly. The marketing is the easiest part."

And, he adds, "Don’t sacrifice innovation just because it’s hard to find the investment to fund it. Using everyday business situations to pilot-test new strategies and techniques before scaling them can be a cost-effective way to evolve into smarter ways of working."

Published on: June 4, 2012

The Daily Caller reports that McDonald's is using Twitter to generate opposition to the proposal by NYC Mayor Michael Bloomberg - almost certain to become law - that the sale of large sugary drinks be banned in the city.

According to the story, one such Tweet read: “@MikeBloomberg We trust our customers to make the choices that are best for them."

While Bloomberg has said that such a ban would help to combat rising obesity rates in the city, he has been criticized for being inconsistent. For example, this morning's NY Daily News notes that while the Mayor wants to ban jumbo sodas, he enjoys the occasional mayo-smothered BLT, and also like to eat a doughnut once in a while.

Published on: June 4, 2012

Variety has a piece analyzing Amazon.com's business strategy, suggesting that the company "is on a quest not unlike the one Apple chose several years ago: A multi-front war to dominate key aspects of people's leisure time."

During the Q1 2012, the story notes, "nine of the 10 top-selling products on Amazon.com were digital. While that includes e-books for the company's Kindle, it also included movies, music and apps. Amazon, of course, will continue its retail battles with Wal-Mart and other stores, but increasingly these days, it's setting its sights on Netflix, Hulu and, of course, Apple. And some of those fights could get ugly."

As Amazon looks to increase its footprint in the digital space, CNN reports that "Netflix has officially unseated Apple in one major field: online video. Netflix jumped to No. 1 in market share on a revenue basis, as subscription video soared in popularity - an area where Apple is missing out." (The story notes that "Netflix offers an unlimited streaming-only plan for about $8 per month, while Apple doesn't have a subscription service. Instead, customers can buy movies and TV episodes from the iTunes Store.")

In fact, the Netflix share of the online movie business was 44 percent in 2011, while Apple's dropped from 60.8 percent in 2010 to 32.3 percent in 2011.

Published on: June 4, 2012

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

• In the UK, The Grocer reports that boxed wine, previously associated with low end and bulk varieties, now can be found in an expanding number of varieties and higher quality wines.

In addition, so-called paper bottles, used for milk at Asda, are expected to be found in the retailer's wine departments by the end of the year.

The reasons for the shifts are said to be generational (young people like them), convenience (they are easier to store), and environmental (they have a much smaller carbon footprint than glass).

I like to think of myself as being open minded. As being willing to embrace change. But this is just pushing things too damned far...

Published reports say that Wegmans plans to close its store on Pond Street in Syracuse because of what it calls "declining business."

The company says that its other area stores are doing fine, and that, in fact, most people who shop the Pond Street store do shop at other stores as well.

The Detroit News reports that Kellogg's has completed its $2.7 billion acquisition of the Pringles brand from Procter & Gamble, a buy that triples the size of its snack business.

Published on: June 4, 2012

• Price Chopper Supermarkets/Golub Corporation announced that Richard Reed, most recently a Safeway regional director, has been hired into the position of Vice President, Produce and Floral Merchandising.

• Golub Corporation/Price Chopper Supermarkets also announced that Christina Maltbie, the company’s Vice President, Assistant Treasurer, has been promoted to the position of Vice President, Treasurer.

• Jill McIntosh, currently director of Human Resources and Labor Relations for Corporate Brands and Manufacturing at Kroger's General Office, has been promoted to vice president, Human Resources for the Fred Meyer Division.

Published on: June 4, 2012

• Richard Dawson, who found fame as a wisecracking POW in "Hogan's Heroes" and then went on to host "Family Feud" from 1976 to 1985 - turning "survey says" into a national catchphrase - has passed away at age 79 from complications related to esophageal cancer.

Published on: June 4, 2012

Over the past three weeks, MNB has featured a daily series of videos about the challenges and opportunities in the e-commerce segment, culled from a presentation that I did at the recent Food Marketing Institute (FMI) 2012 Show in Dallas. The session, entitled "From Amazon to Zipcar: Innovations from the E-Revolution," featured an extended conversation with Tom Furphy, CEO of Consumer Equity Partners and the guy who helped Amazon.com get into the grocery business.

If you missed any of the segments, or would like to easily go back to them, you have two options.

One, you can go to the MorningNewsBeat Channel on YouTube, where all of the videos are archived. (As are all our FaceTime video commentaries, by the way.)

Or, if you'd prefer, MyWebGrocer - which sponsored the entire series - has agreed to make a free DVD of the entire series available to anyone who requests it for a limited time. Just shoot me an email with your name and snail mail address, and we'll put you on the list to get one as soon as we get our shipment in.

Thanks to all of you for the positive response to the series ... and to MyWebGrocer for making it possible.

Published on: June 4, 2012

Got the following email from MNB user Jarrett Paschel about Walmart's new "Goodies" program, which allows subscribing customers to sample new foods not found in stores run by the world's biggest retailer:

Your observation: “This speaks volumes about where Walmart sees itself heading in terms of food marketing and e-commerce…” is, as always, spot on.

While many may question whether or not Walmart would really know how to “delight” is customers with goodie bags offering the right kinds of artisanal foods, none of that matters at all.

Because as the story goes on to observe “at first, Wal-Mart will select the products sent to subscribers, though over time companies may be able to pay to have their products included in the Goodies boxes."

The message could not be more clear…IF this turns out to be a viable program, the first thing we are going to do is outsource placement in our “goodie” bags to the highest bidder. We care so little about you, loyal customer, that if you show the least bit of interest in our pilot program of specialty products, we’ll return the favor with a steaming hunk of end-cap product promotions. Nothing says “surprise me” like a box of products from Kraft, Nestle and Unilever!

After all, it’s not as if truly boutique, artisanal producers could actually afford to PAY for the right to be sold at Walmart.

All excellent points.

I did take note last week when the "Goodies" story came out that Tom Furphy and I had been discussing precisely that opportunity in a video segment that we'd posted a week earlier. I'd like to think we were a little prescient, but MNB user Steve Sullivan had another thought:

ORRRRRRR…Someone at WalWorld reads MNB!

Well, actually, a lot of people at Walmart read MNB. But I don't think we can can take credit - or blame, depending on your POV - for this.

But I do think, with some justification, that we got it right, and we got it early. (And I'll also give credit to FMI, which gave us the platform and made it all possible to begin with.)




Regarding the Walmart annual meeting, one MNB user wrote:

I understand the need for all the "hoopla", it helps morale, everyone gets to drink all the Kool-Aid they can handle and there are free concerts all week long. Imagine if they took all the money they spend on Stockholders meeting, their fleet of jets, year beginning meeting, fall managers meeting and used it to pay better wages, better benefits for families or just to have more cash to bribe Mexican officials.

This company is far from being the low cost retailer it claims to be. Wal-Mart calls it part of their culture, it's all about priorities.




Got a laugh out of the email that suggested that Walmart, in addition to Cheap Trick and Aerosmith, should have hired another group to entertain at its annual meeting:

Los Lobos?




Regarding a new Lund's store being built in minneapolis, one MNB user wrote:

One of my largest clients lives within blocks of Lunds’ new store in downtown Minneapolis.   They have been watching the store’s construction with rather breathless anticipation from the windows of their condominium.   To say that they are looking forward to the store opening would be a rather drastic understatement as they have had few options in their neighborhood for basic grocery staples and have to travel by car to do the bulk of their “stock-up” shopping.




Reflecting on the passing of Jack Twyman, MNB user Denis Zegar wrote:

I knew Jack Twyman quite well.  He was a member and former Chairman of NAWGA in the early 1980's when I was VP of Government Relations.  Jack was a very unassuming, thoughtful leader who was proud of his contribution to Super Foods. Imagine calling a CEO of a large food wholesaler and he answers the phone himself.  That was Jack.  Jack rarely spoke of his days as a Hall of Fame basketball player.  He considered himself a businessman first and foremost.  My fondest memory of Jack was when I offered to take him and Mike Wright and Drayton McLane to the airport.  Picture 3 men 6'3 to 6'7 getting out of a 2-door sports car.  The skycap's reaction was priceless.  We all will miss gentleman Jack.

MNB user Elaine Howard wrote:

I remember Jack. He was  an imposing figure but a gentleman with a ready smile. I wouldn’t have known of his passing or the story you shared had I not read it on morningnewsbeat.com.

And MNB user Thomas Robinson wrote:

Jack was really one of the great guys in the grocery business.  He ran a company that truly cared about its retailers and ultimately the consumer.

Published on: June 4, 2012

• Tiger Woods won the Memorial Tournament this weekend with a nine-under-par 279, making it the fifth time he has won that championship and giving him his 73rd PGA tour victory, tying him for second place in career wins with Jack Nicklaus, behind Sam Snead's 82. The win will create hours of conversation on sports talk radio around the country, as hosts and fans debate whether this win marks a career re-emergence for Woods.

• The New York Mets got their first no-hitter in the franchise's 51-year history on Friday night, as Johan Santana, coming back from shoulder surgery, threw a 134-pitch complete game and stymied the St. Louis Cardinals in an 8-0 victory. This was followed by a Saturday 5-0 complete game shutout of the Cardinals by knuckleballer R.A. Dickey, and then a Sunday 6-1 win in which Jon Niese went six shutout innings against the Cards. The three wins, by the way, put the Mets into a statistical tie for first place in the National League East with the Washington Nationals and the Miami Marlins.