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: October 1, 2012


    Wholesome Sweeteners is excited to launch the World’s 1st Fairtrade Organic Agave.

    Ethical sourcing through Fairtrade is a core value to Wholesome Sweeteners. As a longtime member and supporter of the global Fairtrade Movement, the international standard for the last 20 years, our commitment to Fairtrade inspired us to pioneer the certification of sugar and honey in the United States in 2005 & 2008 respectively.

    Our Fairtrade Agave Cooperatives in Mexico receive a fair price for their crop as well as a set social premium per pound of agave that Wholesome Sweeteners sells. The cooperative farmers also enjoy safe working conditions and earn the living wage they so desperately need and deserve. Farmers democratically invest Fairtrade premiums in social and business development projects like community health care services, clean water, improved sustainable agriculture practices & education.

    Wholesome Sweeteners Fairtrade Organic Agave Syrup is available in 11.75 oz., 23.5oz., and 44 oz. retail sizes, in both light and raw varieties.

    Contact us today to learn more about ethical sourcing and how your purchases directly impact farmers across the world: 1-800-680-1896 or email us at CS@OrganicSugars.biz.
    KC's View:

    Published on: October 1, 2012

    by Kevin Coupe

    The Pew Research Center’s Project for Excellence in Journalism is out with a new survey saying that half of American adults say that they either own a tablet computer or a smartphone.

    "Nearly a quarter of U.S. adults, 22%, now own a tablet device-double the number from a year earlier," the study says. "Another 3% of adults regularly use a tablet owned by someone else in their home. And nearly a quarter of those who don't have a tablet, 23%, plan to get one in the next six months. Even more U.S. adults (44%) have smartphones, according to the survey, up from 35% in May 2011."

    Slightly more than half of those polled say that they have an Apple iPad, which is a major shift from a year ago, when eight of 10 said they had iPads. Forty-eight percent of poll respondents said they have Android-based tablets, such as Amazon's Kindle Fire.

    The survey continues:

    "News remains an important part of what people do on their mobile devices-64% of tablet owners and 62% of smartphone owners say they use the devices for news at least weekly, tying news statistically with other popular activities such email and playing games on tablets and behind only email on smartphones (not including talking on the phone). This means fully a third of all U.S. adults now get news on a mobile device at least once a week.

    "Mobile users, moreover, are not just checking headlines on their devices, although nearly all use the devices for the latest new updates. Many also are reading longer news stories - 73% of adults who consume news on their tablet read in-depth articles at least sometimes, including 19% who do so daily. Fully 61% of smartphone news consumers at least sometimes read longer stories, 11% regularly.

    "And for many people, mobile devices are adding how much news they consume. More than four in ten mobile news consumers say they are getting more news now and nearly a third say they are adding new sources."

    The lesson for marketers is simple. If people are using these mobile devices to consume news, it is inevitable that they increasingly will use these devices for shopping and gather information about the products and services they plan to consume.

    You'd better adapt. And compete.
    KC's View:

    Published on: October 1, 2012

    The United States Postal Service (USPS) yesterday formally defaulted on a $5.6 billion payment is was scheduled to make, the second time in 60 days that it did not make a scheduled multi-billion dollar payment.

    The Associated Press reports that "it expects to make a $1.4 billion payment due to the Labor Department on Oct. 15 for workers' compensation. Cash levels are expected to hit a low after that labor payment before rising again due to increased volume from holiday and election mail, including ballots for early voting."

    Postmaster General Patrick Donahoe says that if it were not for Congressional inaction, the USPS would be profitable. "For more than a year, the Postal Service has been seeking legislation that would allow it to eliminate Saturday mail delivery and reduce its $5 billion annual payment for future retiree health benefits," the AP writes. "Since the House failed to act, the post office says it's been seeking to reassure anxious customers that service will not be disrupted, even with cash levels running perilously low ... The Postal Service originally planned to close low-revenue post offices in rural areas to save money, but after public opposition it now is moving forward with a new plan to keep 13,000 of them open with shorter operating hours. The Postal Service also will begin closing more than 200 mail processing centers next year, but the estimated annual savings of $2.1 billion won't be realized until the full cuts are completed in late 2014."
    KC's View:
    I'm not going to argue that because of Congressional mandates, it is a lot harder for the USPS to be viable. But I also continue to believe that in the long run, for the USPS to have a sustainable business model, it has to consider how the world is changing and perhaps make fundamental changes in its business model. In any business, you have to ask the hard questions about core values ...

    Published on: October 1, 2012

    The Wall Street Journal reports that Walmart "is expanding in Japan for the first time since 2008, sensing an opening as increases in the ranks of the working poor and pensioners on fixed incomes propel a trend toward thrift there. The retailer is planning 22 new stores in Japan in the next two years, as well as scouting for acquisitions to enlarge its 368-store presence in the world's second-largest consumer market, where it got off to a rocky start about 10 years ago."

    Walmart invested in Seiyu, a small and not terribly successful grocer, a decade ago, and then took over the company completely four years ago. But while it has not been a high point in Walmart's global adventures, there seem to be signs now that its low-prices approach is getting some traction.

    "Instead of relying on Japan's traditional thicket of middlemen to supply products, which can raise product prices and slow deliveries, the company is using its global footprint to import food from other countries," the Journal writes. "Wal-Mart said grapes imported straight from California can be 20% cheaper than those sold by competitors."

    The story says that Walmart has out-performed the market for almost two years, and "received positive news coverage when it flew in groceries and stocked shelves faster than competitors after last year's earthquake and tsunami, providing items like bottled water from Canada. Wal-Mart is now taking advantage of vacancies to move into empty storefronts in Japan rather than building stores from scratch, which requires a lengthier wait for government permits."
    KC's View:

    Published on: October 1, 2012

    Reuters reports that Amazon is getting into the business loan business, "offering loans to some of its online sellers, a move that could boost the growth of its Internet marketplace while exposing it to potential credit risks ... Getting into the lending business is a big step for Amazon that will expose it to more credit risk but may also fuel more sales by merchants on its marketplace. Amazon takes a cut of those sales, so revenue and profits could get a boost."

    The story says that Amazon has offered some sellers as much as $800,000, which one observer says is "pretty aggressive" ... interest rates can be as high as 13 percent, but also as low as one percent, depending on the seller ... and companies are being pre-qualified based on their previous performance on Amazon. In offering these loans, the story says, "Amazon is competing against a start-up called Kabbage, which extends cash advances ranging from $500 to $50,000 to online merchants."
    KC's View:
    Just goes to show how far Amazon will go to make sure its marketplace is both viable and sustainable.

    Published on: October 1, 2012

    Interesting piece in Reuters about how China has proven to be "a tougher market than expected" for big box stores to find success in the sixteen years since Walmart opened its first supercenter there.

    According to the story, "Overseas names from Britain's Tesco Plc to Germany's Metro AG are slowing their Chinese expansion, while Hong Kong-listed Sun Art Retail Group Ltd has overtaken Wal-Mart as the country's top hypermarket chain.

    "The move last month by U.S. home improvement chain Home Depot Inc to close its big box stores in China served up the latest evidence of foreign retailers' struggle with a crowded market, slowing economy and tough competition in a country that was once their best hope for growth."

    The problem, the story suggests, is that while China has an enormous population, the country cannot handle unlimited retail options; at the same time, the Chinese economy has been slowing down, which has left people with less money to spend. And there remain cultural differences that are not always easy to bridge, which is what Home Depot found when shoppers there did not embrace its do-it-yourself model.

    To be clear, Reuters writes, things could be a lot worse: "Overall retail sales growth remains high by international standards -- year-on-year growth has held above 13 percent every month this year, and in fact has not posted an increase smaller than 10 percent since 2006 -- but it has slowed from 17-18 percent growth late last year."

    But China is not the slam-dunk that many retailers thought it would be.
    KC's View:

    Published on: October 1, 2012

    • In the UK, the Observer writes that Tesco this week is expected to announce a 10 percent drop in group profits. Here's what the paper has to say about that...

    "Shareholders will have steeled themselves for the bad news and are now likely to more interested in whether the turnaround plan announced by (CEO Philip) Clarke in April is working. The money is being spent on sprucing up stores, hiring extra store staff and a long overdue revamp of its own-label foodstuffs. The plan is not rocket science – in fact, it reads like basic good housekeeping for a retailer the management textbooks have led us to believe is among the best in class.

    "How the UK stores ended up in such a sorry state remains a moot point and Clarke avoids assigning blame. The less diplomatic would point to the reign of his lauded predecessor, Sir Terry Leahy, who used profits generated at home to plant flags abroad but starved the home market chain of investment."

    The story goes on:

    "Britain is not Tesco's only problem. Clarke is still grappling with the loss-making US chain Fresh & Easy and a setback in South Korea, Tesco's biggest overseas market, where legislation allowing local governments to impose shorter trading hours is hitting sales. But there is also a larger dimension to the depressed Tesco share price. After years of celebrating it for its reliable returns, investors have lost their appetite for the grocery sector as a whole, reappraising it in a new world of turgid sales where shoppers are increasingly turning to the internet to make purchases."
    KC's View:
    Likely not to be a good week for Tesco. It is interesting, by the way, how the history of the Terry Leahy tenure is beginning to be rewritten.

    Published on: October 1, 2012

    MediaPost has a story about high-end male shopping habits, reporting on several defined trends:

    • The National Retail Federation (NRF) has reported that last Black Friday, "the average male spent 50% more offline than the average female - and 100% more online."

    • "Chris Ventry, the general manager of Gilt Groupe's GiltMan, told CNBC the growth rate of men shopping online has outpaced women, with guys outspending the ladies by 20 to 30%."

    • iProspect, in a report about "the nation’s 19 million affluent males (earning at least $100,000 a year), says their wallets are at the ready. A full 40% shop online twice per week, with 45% spending more than $4,000 per year and 13% spending more than $30,000. Men also spend 20 to 30% more per transaction than women."
    KC's View:

    Published on: October 1, 2012

    The Nielsen Company is out with a new study saying that "alcoholic beverages packaged in a 'pouch' approached $200 million in annual sales by Nielsen-measured retail outlets through August 18, 2012. Pouch retail dollar sales were only $12 million in a similar twelve-month period through August 2010.

    "And the trend shows no signs of slowing: Twelve percent of alcoholic-beverage buyers purchased a pouch product in the last twelve months, which is twice the number of people who tried it the previous year. The growth in popularity of this relatively new segment is attracting new product entries, flavors and brands, including many of the biggest supplier names in the alcoholic beverage business ... Not only are pouches ringing up significant sales, but new Nielsen consumer research shows that many of these sales are in addition to current alcoholic beverage sales, meaning that consumers are not switching from more traditional beer, wine, or spirits."

    The study goes on to say that "compared to mainstream (or the typical) alcoholic beverage consumers, pouches seem to appeal to 35-54 year olds, key Gen X and Baby Boomer age groups ... African-Americans and females are also buying pouches in above-average quantities."
    KC's View:
    Booze in a bag. Yet another sign of the decline of western civilization...

    Published on: October 1, 2012

    Bloomberg reports that October marks a new beginning for Kraft and its Mondelez International spinoff.

    "Kraft’s North American grocery business, which today will list on the New York Stock Exchange as an independent company, is starting life with a handicap: years of underinvestment in new products and marketing.

    "The original Kraft Foods Inc. (KFT), founded in 1909, is becoming two companies -- an international snacks business called Mondelez International Inc. and Kraft Foods Group, the North American grocery enterprise. While the snacks business has grown almost 30 percent a year since 2009, its spun-off sibling is saddled with a portfolio of aging brands in need of freshening as it confronts potent rivals and rising commodity costs. To goose growth, Kraft Foods will spend more on marketing and research and has unleashed edgy new TV commercials that are already generating buzz on Youthful."

    Reuters reports that the Canadian Food Inspection Agency (CFIA) has expanded a warning "about beef possibly tainted with E. coli," releasing a list of "dozens of products made from beef voluntarily recalled by XL Foods, whose plant in Brooks, Alberta, was temporarily shut by the agency after contaminated beef products sickened several people.

    "The list ranges from ground beef to roasts and steaks, and includes products from retailers such as Wal-Mart Stores Inc and Costco Wholesale Corp, and smaller chains."

    • Local press reports say that Wegmans wants to build a 12, 300-square-foot cheese aging facility in Chili, New York, next to its headquarters. The company, in a filing, says that it will be “used by the Company to ripen soft-ripened and washed-rind cheeses, like brie and other specialty cheeses, in a process called 'affinage'."

    • In Florida, the Sun-Sentinel reports that Winn-Dixie is opening one of its specialty supermarkets, in Lake Worth - the first of the format that the company has opened in Palm beach County.

    There currently are specialty Winn-Dixie stores open in Miami and Coral Springs.

    According to the piece, "The store features a Wi-Fi café, complimentary coffee and a full-service pharmacy. They have a selection of organic fruits and vegetables, specialty products such as gluten-free and kosher items, and a selection of custom-prepared, chef-inspired meals. Grab-and-go customers can hit the salad bar and besides salad, choose items such as chicken cordon bleu, turkey meatloaf, grilled vegetables and carving stations offering slow-roasted prime rib, bourbon glazed salmon and oven-roasted pork loin."

    • The Sacramento Bee reports that Campbell Soup Co. "announced the closing of its south Sacramento plant, where the company has made canned soup for more than 60 years.
    The plant will be phased out, with final shutdown coming next July. It will eliminate 700 full-time jobs, a devastating development in one of the region's most hardscrabble neighborhoods."

    The decision was made because of the continuing decline in canned soup sales.
    KC's View:

    Published on: October 1, 2012

    • Arthur Ochs Sulzberger, who as as publisher of the newspaper and as chairman and chief executive of The New York Times Company helped bring the New York Times into the modern era by establishing an era of fiscal responsibility, helping to create multiple sections that went beyond hard news and covered consumer issues, and saw the paper through tough financial periods that could have threatened its existence, died over the weekend after a long illness. He was 86.
    KC's View:
    While Sulzberger's responsibilities focused on the paper's business side, he also understood the importance of a free press. It was under his watch in 1971 that the Times published the Pentagon Papers, thousands of pages of classified materials that detailed the government's mismanagement of the Vietnam War. Challenged by the Nixon administration, the Times published the papers nevertheless; when a temporary injunction stopped the Times from moving forward with its series, it then went to the Supreme Court and won what is generally acknowledged to be a landmark First Amendment ruling supporting press freedom.

    Published on: October 1, 2012

    I continue to get email responding to last week's "FaceTime" commentary, which was about how Kraft gave Target an exclusive, Halloween-themed Oreo, made with a vanilla cookie and candy corn-flavored creme, and when I went to find it, I discovered that Target buried it with no mention of it being special or exclusive. I wrote:

    "I do think it is worth pointing out that when you have something unique, or exclusive, or distinctive, or differentiated, it is your job as a retailer to draw attention to the damned product! Sell, damn it!"

    One MNB user wrote:

    I was in Targets from Las Vegas to Arkansas and saw the Oreo's out in mass on either a front end cap, in the Halloween section and in some cases dual location.

    So I don't think it's a Target issue. Buying a pack, I'm not sure the taste is all that great. Too bad the Kraft or what ever their calling themselves theses days can come out with truly a New item and not just another favor to all to its line extension.


    Another MNB user wrote:

    Your story about in-store execution at Target has become too commonplace amongst all retailers, regrettably. It goes to show that shelf / display placement is assumed (when gaining agreement with the retailer to purchase product) rather than planned and executed against. The in-store execution responsibility by the manufacturer, retailer and often their in-store agents, is prioritized as secondary in importance (if even at all considered).

    Undoubtedly, there were some stores where the execution was probably better than what you saw. However, my point is that retail execution is rarely prioritized as much as getting the order for the special pack and so what you saw occurs everyday, across the worlds’ best retailers and manufacturers.  While not the sexiest of work to do, flawless retail execution often means the difference of whether or not special pack programs meet the success criteria both manufacturers and retailers set for a program.
     
    In an era where everyone wants to talk about Shopper Marketing – and Category Management – success always comes down to retail execution. Everyone thinks they know what it is but stories like yours remind us all that assumptions are just that. The old saying “what gets measured gets done” is a mantra every Team Leader working with Divisional Merchandise Mgr’s and District Mgr’s, for every retailer, needs to keep front & center. In-Store execution needs to be prized as much as getting the large special product purchase order itself.


    I'm sure that there are all sorts of ways to analyze this, and all sorts of ways to slice the blame.

    But let me suggest that, in the end, the responsibility lies with the retailer to make sure that the products it sells are properly merchandised. Not the manufacturer, not the wholesaler, not anyone else.

    If you own a store, it is your job to make sure that the things you sell are actually being sold, that you are merchandising them in a way that is timely and effective, that you are taking advantage of exclusives, that you are sampling whenever possible, and are building a store experience that tightens the connection to your shoppers whenever and wherever possible.

    If you wait for the manufacturer to do it for you, or to pay you to do it, then in many ways, you are abdicating your responsibility. It is your store. They are your customers. And "compete" is a verb. (Sorry. Couldn't help myself.)




    Chiming in on a discussion we were having here last week about gender discrimination suits, MNB user Jenefer Angell wrote:
    Thank you for your reasoned response to the MBN user who described the women bringing the grievance against Costco as “troublemakers.” In NO state in our Union, do women make the 100% equivalent pay to what men do – and he (obviously he) really wants to claim that if women just work harder they will be rewarded commensurately? I also dislike litigiousness and hope that this isn’t just a play for lower reasons, but is it really so hard for someone to believe there could be a legitimate claim here?

    God bless the “troublemakers”! Without them, women wouldn’t have the vote (less than 100 years), the right to a sexual harassment–free work environment (I am old enough to remember my mother’s complaints about butt-pinching at work and more as late as the 1970s), and even the right to consider working in fields beyond teaching and nursing (I am also old enough to remember the backlash from male coworkers that my mother’s friends experienced when venturing into non-traditional workplaces).


    I hate the litigiousness of our society. But sometimes, when there is discrimination and inequality, that can be the only way to get justice. Misused, the ability to sue can be annoying as hell. But it beats living in a society without such options.

    I also think that it is a lot easier to say that women should simply shut up, work harder, be patient and stop being troublemakers if you have testicles. And the problem with people who make such arguments is that they think with their testicles instead of with their brains.




    On the subject of GMO labeling, one MNB user wrote:

    I know people will discount this because it goes against the tide, but did you know that carrots have been genetically modified for hundreds of years? Carrots are not supposed to be orange, they were modified in the 16th century by the Dutch in honor of the House of Orange. The crazy thing is that the genetic modification, while done purely for cosmetic reasons, introduced much higher levels of beta carotene into this vegetable and that in fact is one of the primary reasons we are encouraged to eat them today.

    My hypothetical question is: I wonder if carrot producers were forced to label their produce as GM, how many people would just stop eating them all together?


    I do not doubt that mandated GMO labeling would create a number of situations in which companies would have to explain things that they would prefer not to explain.

    But that does not mean that consumers are not owned the availability of information. And I continue to believe that to fight this is to fight the inevitability of where history is headed.




    Responding to another recent MNB story, a reader emailed:

    In regards to the story on Adidas AG limiting 3rd party sales as a condition of their business with Amazon, this is something that has become increasingly of concern in the movie/DVD industry (dying breed or not).  It actually has less to do with pricing controls, and more so about brand erosion resulting from counterfeit/pirated product being sold.  I’ll spare the gory details, but a disproportionate percentage of DVD sales on Amazon via third parties are actually pirated versions of movies (hence, also the very deeply discounted costs…).  I suspect that Adidas is seeing a similar trend on copy-cat footwear being sold on the site.  The reality is that Amazon’s business model is one that is appealing to consumers because of their low costs, many of these low costs come at a steeper price and second-rate quality.  I can certainly appreciate why Adidas would want to limit that exposure.

    Amazon actually makes more profit in third party sales than they do in buying and selling product directly (even they can’t compete with deeply discounted knock-off product), so they’re in an interesting position ... To say that it’s “complicated” matters in dealing with Amazon directly would be an understatement.




    Regarding another recent story, an MNB user wrote:

    It is possible to opt out of phone book delivery - at least here in Seattle. I filled out the form specifying all the companies that had been delivering to our house and didn't get any last year. 

    Let's see if they can keep it up this year.





    And, from another reader:

    I was traveling through the Atlanta airport last week and noticed a curtain over the Blackberry Store in Concourse B with a sign reading, “Please excuse us during our remodel.”  I thought, wow, Blackberry is revamping things and is going to come out with a totally new store.  I was in the Atlanta airport again yesterday passing through and noticed that the remodel work was complete. The results of that remodel were far different than I had imagined.  An Apple “authorized” store, iTravel, sells iPads, MacBooks, MTV headphones and other mac peripherals.

    This is an interesting departure from the Apple store vibe that I am used to seeing. You are not greeted upon entering and the employees are definitely not as trained to provide the same kind of experience that you receive in an Apple store.  It quite honestly appears to be just like any other airport electronics  store (Bluewire, inMotion, etc.) except that it sells Apple products. It will be interesting to see if this licensed model picks up.

    I just kept thinking, all that work just to have to make a big assortment change when all of the new, smaller port accessories flood the market…





    And, from MNB user Danny Woodson:

    Thanks for mentioning R.A. Dickey’s 20th win this week. Dickey's book, “Wherever I Wind Up," is a must read for baseball fans. The inside story of his journey is amazing. I highly recommend the read.

    It is on my Kindle.




    Responding to last week's posting of a Samsung ad that aimed to demystify and make fun of the iPhone 5, one MNB user wrote:

    THANK YOU for sharing. That ad is brilliant. Apple, post Steve Jobs, seems to be going the way of Microsoft. My husband just upgraded his iPhone, to the 4S, the day they released the iPhone 5, mostly because of the stupid adaptor decision that Apple made. WHERE was the customer in that decision? When you kowtow to the accessories suppliers and lose sight of your customer, it’s  a sign that your focus is slipping.  I love my Apple products but I fear for their future.

    I'm not sure that's the reason for the adaptor change. But your perception that this is the reason should be troubling to Apple.

    And fromMNB user Jackie Lembke:

    I love this commercial and keep waiting for the Apple comeback commercial.




    And finally, this email:

    I have to say I was somewhat disappointed at your lack of mentioning the passing of the late Herbert Lom.  As a consummate film buff, I was surprised you missed that one.

    Though no Hollywood legend, he will stand forever as one of my favorite comedic actors.  His role opposite Peter Sellers’ bumbling Clouseau as the maddened, frustrated Inspector Dreyfus will always be one of my favorite comedic acts.  The opening scene of Return of the Pink Panther where Clouseau visits him in the loony bin he is expected to be released from as well as the castle scene where Clouseau, poorly disguised as a country dentist, comes to treat Dreyfus’ agonizing toothache are pure, unadulterated comedy genius.  Comedy is not my genre of choice, but I watch that movie on a regular basis and laugh just as hard every time.

    Lastly, it should be noted that Lom left this earthly plane in the way that we all hope to:  at the ripe old age of 95, quietly, in his sleep.  Rest in peace, Mr. Lom.


    My apologies. I am such a minkey.

    The fact is, I saw the stories about Lom's death last week, made a note to myself, and then blew it.

    You're right about Lom. His various performances as Dreyfus, in seven different Pink Panther movies, were inspired, and a portrait of tightly coiled lunacy just waiting to explode. And as the various obits made clear, he had a long and diverse career in movies good and bad, but he always was seen as bringing high talent and professionalism to his roles.

    BTW... Every once in a while, I get an email from someone asking why I do obits about people who have nothing to do with the business sectors that I cover. The simple answer is that I do it because I feel like it; I think it is worth noting when the cultural touchstones of our lives pass on. As Arthur Miller wrote, attention must be paid.

    And emails like this one make me think that other people feel the same way.
    KC's View:

    Published on: October 1, 2012

    In Week Four of National Football League action...

    San Francisco 34
    NY Jets 0

    Seattle 13
    St. Louis 19

    Minnesota 20
    Detroit 13

    San Diego 37
    Kansas City 20

    Cincinnati 27
    Jacksonville 10

    Washington 24
    Tampa Bay 22

    Oakland 6
    Denver 37

    New Orleans 27
    Green Bay 28

    New England 52
    Buffalo 28

    Carolina 28
    Atlanta 30

    Tennessee 14
    Houston 38

    Miami 21
    Arizona 24

    NY Giants 17
    Philadelphia 19
    KC's View: