retail news in context, analysis with attitude

Published on: June 6, 2012

by Kate McMahon

Looking to connect with today’s consumers? It’s not enough to think outside the box, but rather inside the palm of their hand. Reams of research and a plethora of innovative apps all point to the power of the mobile device.

It’s not just the Generation Y-ers that literally go to sleep and wake up to their smart phone. I am the 50-plus mother of two such Gen Y daughters, and used to scoff at their “crackberry” (now iPhone) habits while waiting to finally upgrade my clunky flip phone. Now even I have gone “smart” mobile, and am about to finally get an iPad.

I’m not alone. As reported on MNB last week, the market research company NPD Group found that mobile phone applications are quickly becoming the go-to source for countless daily tasks, including finding grocery deals, hunting down recipes and connecting with favorite food brands.

To add even more perspective, consider these numbers. There were about 1,000 iPhone apps available in 2001. Today there are a half-million just in the iTunes store. Here’s just a sampling of new and inventive approaches to engaging consumers through social and mobile media that have recently come across the transom:

• Folks in Houston can literally “wake up with” local TV station KTRK , via an iPhone alarm clock app. In addition to serving as an alarm clock, the free “ABC 13 Houston Alarm Clock” app features local weather, news, traffic reports and the voices of the KTRK morning news team. The ABC Owned Television Stations Group plans to roll our customized apps in all eight of its markets by mid-June, noting that “growing numbers turn to the small screens of an iPhone or an iPod touch first thing in the morning.”

• Pulitzer Prize-winning author Jennifer Egan (“A Visit from the Goon Squad”) recently debuted a new science fiction story in The New Yorker - one tweet at a time. (Yes, even the estimable New Yorker has a Twitter fiction handle, @NYerFiction.) In a first, the magazine posted 140-character tweets of Egan’s story “Black Box” for 10 nights – one tweet every minute between 8 p.m. and 9 p.m., followed by a summary. You can read the 8,500-word story in print in this week’s New Yorker.

• In another example of the publishing industry turning to social media, you can peruse exclusive excerpts from more than 30 much-anticipated Fall 2012 book titles featured at the recent BookExpo American convention. Simply download the free Kindle edition of BEA Buzz Books from Amazon.com.

• On the dining front, PayDragon is a speedy new food finding/payment app with the logo “Swoop In. Swoop Out.” It helps users find local restaurants (even those with special deals such as “drink with purchase”), place an order, pay and store a digital receipt before you even arrive at the eatery or take-out establishment. While only available in limited locales in LA and Austin, the app is due to expand to New York and other cities soon.

• And here’s my favorite – an app that sends mobile alerts when you are running low on or are completely out of milk. A Toronto-based firm has developed a specialized milk jug with a weight sensor and mobile Android app called “Do We Have Milk” that pushes notifications to your phone when your daily supply is running on empty. (The jug is particularly handy in Canada, where milk is often distributed in bags). Even better, the app shows you the closest location to purchase milk.

While I certainly will avail myself of all these apps when available, I sure wish the milk app was around when my family was younger, drinking gallons of milk and communicating by hollering, “Hey, Mom, we’re out of milk.” Today, they would text just me.

Comments? Send me an email at kate@morningnewsbeat.com .

Published on: June 6, 2012

by Kevin Coupe

Back in November 2003, MNB took note of a new company called Goliath Caskets, which makes 20-gauge steel large coffins with extra width, length, and depth and that has gotten more popular over the years as the obesity crisis widened ... just one example of how the obesity trend was affecting a number of businesses.

Well, now there is a fresh report about how being overweight can affect you post-mortem.

The Daily Mail in the UK reports about how when the 440-pound corpse of a recently deceased woman was being cremated, the "substantial mass of body fat" sparked a fire that quickly grew out of control. Even after it was doused, the story says, the fire left a "nauseating blanket of scorched grease" on the firemen's suits.

According to the story, the event has precipitated a debate about cremation weight limits.

Published on: June 6, 2012

The Associated Press reports that "the U.S. Department of Agriculture says the vast majority of states participating in its National School Lunch Program have opted to order ground beef that doesn't contain" lean finely textured beef, better known as pink slime, a filler "made of fatty bits of beef that are heated to remove much of the fat, then treated with a puff of ammonia to kill bacteria."

It was just three months ago that, in response to public outcry over the use of pink slime, the USDA gave schools the ability to choose to order beef without the filler.

According to the story, " As of May 18, the agency says states ordered more than 20 million pounds of ground beef products that don't contain lean finely textured beef. Orders for beef that may contain the filler came to about 1 million pounds."

Published on: June 6, 2012

Bloomberg reports that Enterprise Holdings into the hourly car rental business, in a move to go "after the growing niche created by Zipcar."

A similar move recently was made by Hertz.

According to the story, "Enterprise, the closely held rental giant, last month acquired Mint Cars On-Demand, an hourly car-rental firm with locations in New York and Boston. It already owned two smaller brands and this year it plans to bring them all together as Enterprise Car Share. This month, it’s looking to increase its New York fleet by about 50 percent.

"Zipcar created the business of hourly car rental in Cambridge in 2000 and is still the leader in the segment, with about 500,000 US members and about 9,000 vehicles. Hertz plans to equip its entire 375,000-vehicle US fleet for hourly rental within about a year."

While Enterprise concedes it has some work to to to catch up with Zipcar, it says that it believes that its network of locations across the US will give it a long-term advantage.

Published on: June 6, 2012

• The Los Angeles Times reports on a new study by the National Employment Law Project, described as an organization that "advocates for low-wage workers," saying that Walmart "has applied its aggressive cost cutting to logistics, helping to drive down wages and benefits for U.S. warehouse workers."

According to the story, Walmart "has significantly outsourced its supply chain, hiring third party companies to operate its warehouses and transport its good to stores. Those firms in turn often rely on poorly paid temporary workers ... What's more, Wal-Mart's practices are being imitated by competitors who are demanding the same low prices from logistics companies to compete."

Published on: June 6, 2012

Reuters reports that Ron Johnson, the new CEO of JC Penney, is backing off his "no sales" approach, used as he tries to "wean shoppers off the long-used hundreds of sales events and coupons" that he felt had virtually eradicated any value message being communicated to shoppers. JC Penney instead was calling its promotions "month-long values."

The retailer saw a steep drop in sales during Q1, and Johnson now concedes that "it's just been kind of confusing."

"We're moving away from the word 'month-long value' because no one really understood that, to calling it what we intended to do, a sale," Johnson told a Piper Jaffray investor conference yesterday. Now, the word "sale" will actually be used.

Johnson continues to believe that his long-term strategy, which will turn JC Penney stores into a home for as many as 100 separate lifestyle-oriented shops, is the best one, and remodeling is scheduled to begin later this summer.

Published on: June 6, 2012

In Minnesota, the Pioneer Press reports that Supervalu-owned Cub Foods is teaming with BrightFarms, a New York-based greenhouse company, to build a new 38,000 square foot hydroponic greenhouse that will be built locally and will grow more than 350,000 pounds of lettuce, tomatoes and herbs each year.

BrightFarms CEO Paul Lightfoot says that "the hydroponic greenhouse will take up less land and use less water than traditional field farming. Growers will drip collected rainwater onto the plants and recirculate it, using 4.5 million fewer gallons of water for the same yield."

Published on: June 6, 2012

Dow Jones reports that Starbucks and Coinstar are teaming up with a five-year deal "to open several thousand coffee kiosks in the U.S., brewing cups of Seattle's Best brand coffee for just a buck each.

"The companies will be rolling out kiosks named Rubi in grocery stores, drug stores and mass retailers. While financial details of the deal weren't disclosed, Coinstar won't be able to sell other brands' coffee in kiosks through these channels and Seattle's Best won't be able to open its own vending stations under the terms of the deal. If the agreement is successful, the companies have the option to extend it."

According to the story, "The machines are part of the most advanced of Coinstar's new ventures outside coin-counting machines and Redbox DVD-rental kiosks. They will sell Seattle's Best coffee--a Starbucks brand--for $1 a cup and make fancier cafe drinks for $1.50 each. With just over 50 vending stations in operation so far, Coinstar sees potential for more than 15,000 locations in the US."

Published on: June 6, 2012

• The Boston Globe reports that Larry J. Merlo, CEO of CVS Caremark Corp., gave a speech yesterday at the Boston College Chief Executives’ Club in which he said that "health care faces three overlapping challenges in the next few years -- a 'silver tsunami' of aging baby boomers, millions of newly insured people if the national health care overhaul survives US Supreme Court scrutiny, and a projected shortage of primary care physicians."

Merlo said that he believes that CVS and its Minute Clinics network are "poised to help expand care and reduce costs on all three issues" and can “extend the frontiers of health care” by complementing services offered by primary care physicians, and can "contribute to improved access, better quality, and lower costs no matter what happens in Washington, D.C."

• Workday Minnesota reports that member of the United Food and Commercial Workers (UFCW) employed by Kowalski's Markets in Minnesota "have overwhelmingly ratified a new contract ... Kowalski’s had resisted negotiations with the union and imposed its own contract offer last August. Workers responded by holding rallies outside several stores. In October, workers at the five Kowalski-owned grocery stores in the east metro rejected the imposed offer. The new agreement replaces the imposed contract, the union said."

• The Sacramento Bee reports that "Costco Wholesale Corp. will pay $3.6 million in civil penalties and costs to settle a civil law enforcement action brought against the company by 30 California counties ... The settlement resolves allegations that Costco violated California laws for the safe storage, handling and disposal of pharmaceutical and pharmacy waste, as well as other hazardous waste."

• Wakefern Food Corp. announced that it "will be joining forces with Environmental Defense Fund (EDF)’s Climate Corps program this summer to develop an actionable energy efficiency plan .... Over the summer, EDF Climate Corps fellows spend 10-12 weeks in organizations like Wakefern developing customized energy efficiency plans to cut costs and carbon emissions."

• NRF’s annual 2012 Father’s Day spending survey, conducted by BIGinsight,, predicts that "the average person will shell out $117.14 on dad’s gifts this year, up 10 percent from $106.49 last year and closing the gap between its biggest competitor: Mother’s Day (consumers planned to spend an average of $152 on the holiday). Total spending for Father’s Day is expected to reach $12.7 billion."

Published on: June 6, 2012

• The National Grocers Association (GA) announced that Hayley McConnell has been hired as the new Director of Communications. McConnell previously worked at CRC Public Relations where she worked on the current lawsuit at the U.S. Supreme Court against the Patient Protection and Affordable Care Act brought forth by the National Federation of Independent Business (NFIB).

In addition, Christine Cunnick, NGA's Director of Communications, has been named Director of Marketing and Promotions.
 
And, Kailee Tkacz, formerly a tax analyst with the American Legislative Exchange Council, has joined NGA as Manager, Government Affairs.

Published on: June 6, 2012

Got a number of reactions to yesterday's story about how the Walt Disney Company is saying that all products advertised on its child-focused television channels, radio stations and Web sites must comply with a strict new set of nutritional standards. The new standards are based on federal guidelines as well as input from recognized national nutrition experts. First Lady Michelle Obama was at Disney's announcement yesterday at a Washington, DC, press conference.

One MNB user wrote:

I trust Disney is writing-off this little stunt as a campaign donation.

I can understand your cynicism, but I reject the notion that this is just a stunt.

MNB user Clay Dockery responded to my criticism of the Center for Science in the Public Interest (CSPI) saying that Disney's moves do not go far enough.

Intriguing…but I have to agree with CSPI.  Disney is going to “demand” healthy foods to earn the right to advertise on their programs, putting compliance squarely on CPG manufacturers.  And….they are going to reduce sodium in children’s meals in the parks by 25%.  In my humble opinion, there is simply too much effort to get others to comply while taking a NIMBY (not in my backyard) position on the food that they are directly selling to consumers and generating significant profit.

Do you think they are going to replace menus similar to the one below (updated less than two months ago!) with granola and fruit salad?  Nahh, I didn’t think so either.

Menu Date: April 2012
Two Kiosks - one serving Funnel Cakes
Funnel Cakes - powdered sugar $4.99; Cinnamon $4.99; Strawberries and Whipped Cream $5.59
Hot Dog $4.79
Soft Serve Waffle Cone - Vanilla, Chocolate or Swirl $3.59
Strawberry Shortcake $3.99
Worms n Dirt Sundae $3.69
Soda Floats $4.19

First of all, if Disney does not make the kind of changes in its theme parks that it is promising, then it will be roundly criticized. And should be.

But I also think that in some ways, we have to be careful about going too far with this thing. I don't particularly want to live in a world where we eat granola and fruit salad all the time, and can't have the occasional strawberry shortcake. I think it makes sense to pay attention to things like sodium and fat and calories, but not to be so absolutist that we take all the fun out of life.

I guess this is part of the reason I had a problem with the CSPI criticism - it just seemed too absolutist to me.

MNB user Elizabeth Archerd wrote:

Who defines what passes for "good nutrition" is the important question.

The "foods" that will be approved for promotion in ads are not great, just not quite as utterly awful as those being booted out. From that perspective, the CSPI's response is not ungracious at all.

What carrot growers' association will be able to pay Disney for product placement?

Will The Mouse show up on ads for broccoli or salad greens?

The lack of sufficient produce in the diet is the biggest challenge we face next to reducing the intake of all "edible foodlike substances" (praise Michael Pollan for that phrase).  None of those products are necessary for human survival or health and selling them to children remains ethically questionable at best.

To be very clear, I don't underestimate the responsibility of parents for selecting food for their families. I managed to do so and my adult son now makes excellent dietary choices for himself.

However, the fact that not all children have well-educated parents who can themselves see through advertising manipulation does not give an ethical pass to the industry to profit at the expense of child well-being.

So, good start Disney, but you don't merit high praise yet.




Got the following email about the proposal in NYC that would ban jumbo sugared drinks from being sold:

I agree with you that NY Mayor Bloomberg is not being inconsistent by indulging in an occasional treat, but I do believe he is giving us the example of a responsible person given all the information, making decisions that are right for him.  Where I see more inconsistency is where he believes that the general public cannot make those decisions for themselves when presented with a large cup of sugary drink, but then comes out supporting legalization of marijuana.  No matter where you find yourself on each of these issues, I think we can all recognize there a significant contradiction in the Mayor’s 2 positions.

That said, politicians being inconsistent or (gasp!) pandering to different groups is nothing to write home (or to MNB) about.  This did get me thinking about our own inconsistencies in our business around the core subject.  I work for a company that prides itself in offering wide selections of healthy alternatives that fit many lifestyles.  That said along with top movers like milk, produce, yogurt, and other parts of a healthy diet we have just as many sodas, canned pastas, salty snacks, and items that have a very limited role in healthy lives.  And that is not to mention tobacco products that have no role in health.  While trying to promote healthy we still feel we must cater (pander?) to what we see many of our valued customers still tell us they want.

So my question is this:  Are those of us in the industry who are working to support and be the choice for the health conscious segment being inconsistent by saying we support a healthy lifestyle while still putting soda on the front page of the flyer and in the front of our stores every week?  Are we still allocating more of our promotional resources than we would like to these items and being held back by the fear of lost sales and baskets?  If we want to be seen as a trusted healthy choice is it time to take the lesson from our politicians and unlike them be consistent?  Say what we mean, and really mean what we say.




Yesterday, we took note of a New York Times report that when the votes were tallied after last Friday's board of directors election at Walmart's annual shareholders meeting, the "no" votes on four people - CEO Mike Duke, former CEO Lee Scott, chairman S. Robson Walton, and Christopher Williams, chairman of the audit committee - "exceeded 12 percent, the largest opposition any of them has encountered in an annual shareholder vote.

This percentage was described by experts as "very significant," and the vote follows recent revelations that Walmart's Mexico division may have engaged in systematic and systemic bribery as a way of growing its business there, and then when presented with evidence in the case, Walmart's top execs - including Duke and Scott - may have covered it up.

One MNB user responded:

When I read the quote...

"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"

...in my head the speaking voice was that of Ken Lay from Enron…weird.

Maybe not so weird.

We posted an email yesterday in which an MNB reader asked me to stop writing about the bribery scandal, which prompted another reader to email me:

I have been holding my tongue, but “Enough on the 'bribery' scandal. Let move on to things that 'we' can do to improve our  business” really gets my goat, although it might be how I read the comment.

Focus on nothing but improving the business, i.e. profits and keeping shareholders happy is what gets us and others into hot water in the first place. Maybe the reader meant ‘improve the business’ as in improve our integrity, admit when you’ve done something dumb like break the law, make sure we do business ethically AND profitably (I don’t think they are mutually exclusive); if so, that I agree with.

And another reader, responding to the fact that I said I would continue writing about the bribery scandal, even if this could be considered a character flaw on my part, wrote:

No need to fix what isn’t broken.  I’m sure you won’t ever drop ethics in our business world from your commentary, and we’re all better off for it.




And on an other subject, one MNB user wrote:

Just a quick comment and clarification on your Tuesday Morning Eye Opener regarding the start of privatized liquor sales in Washington state where you reported that “last Friday marked the first time since Prohibition that a state – in this case, Washington – went from state controlled to privatized liquor sales.”

I wanted to share with you that my home state of West Virginia actually got out of the state controlled liquor business in the early 1990‘s.

On February 27, 1990 the West Virginia Senate passed Bill 337, which discontinued the retail sale of all alcohol by the state and resulted in the sale of 214 state-owned liquor stores in 1990 & 1991, and all alcohol has been sold by traditional retailers ever since.

Thanks for the correction.