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: November 8, 2012

    This commentary is available as both text and video; enjoy both or either. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

    Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy.

    So here's the conversation you never want to have with your 18-year-old daughter.

    We recently went up to visit her during her college parents weekend, and at dinner one night, she casually drops a little comment about how she thinks it might be kind of interesting to get a tattoo.

    Now, I'm not sure she really wants one. I think it is entirely possible that, like a lot of kids, she just sort of wanted to see how we'd react. Like a trial balloon. Just in case.

    Well, Mrs. Content Guy - who always has said that she can live with anything the kids want to do in terms of piercings, because they are not permanent, but is less than thrilled with tattoos - immediately goes on her new iPhone 5 to do a little research.

    And go figure. It ends up that 14 percent of all Americans have at least one tattoo. That 36 percent of Americans between the ages of 18 and 25 have at least one tattoo, and that 40 percent of those between the ages of 26 and 40 have at least one tattoo.

    Five percent of Americans, apparently, have covered one up one tattoo with another tattoo. Thirty-two percent of Americans with tattoos say they are "addicted to ink," and just 17 percent of people with tattoos say that have some regret about getting one.

    And here's the business side to the tattoo industry that really amazed me - that 45 million Americans have one tattoo, have gotten it at one of the more than 21,000 tattoo parlors in the United States, spending $1.65 billion a year getting tattoos.

    Yes, $1.65 billion. These numbers, by the way, come courtesy of the Pew Research Center.

    I was floored by these numbers. Like a lot of people my age, I suspect, when I see someone with tattoos, I sort of wince a little bit, like they've somehow desecrated their bodies in a way that will be very difficult to erase.

    But one person's desecration is another person's art. And the simple reality seems to be that tattoos have gone mainstream ... and this is yet another illustration of the generational differences that businesses have to take into account when hiring and dealing with employees.

    In so many ways, what many of us would think of as being out-of-the-mainstream attitudes simply are not so out-of-the-mainstream anymore. This has to do with tattoos and piercings, but it may also have to do with attitudes toward technology, gender roles, work-life balance, etc...

    And sure, these potential and existing employees have to understand that they may have to adjust some if they want jobs. But we have to meet them halfway. Maybe even more than halfway. Because in the end, we may need them more than they need us, especially if the economy improves and it becomes a seller's market for labor.

    Having looked at all these statistics, Mrs. Content Guy was consistent about her objections to our daughter getting a tattoo ... though she acknowledged that the world has changed, and that she was reflective of a shifting reality. In other words, she was precisely as measured and reasonable as I would have expected her to be.

    Me? I told my daughter that if she got a tattoo I'd sell the family car to which she currently has exclusive access. No ifs, ands, or buts. And I meant it.

    I hope she was just floating a trial balloon.

    That's what is on my mind this Thursday morning. As always, I want to hear what is on your mind.

    KC's View:

    Published on: November 8, 2012

    by Kevin Coupe

    This is the kind of review that most retailers dread.

    It is on, is my columnist Mark Sunshine, and here's how it starts:

    "I love my Apples but I hate going to Apple stores.  The store near me is overcrowded, noisy and delivers crummy customer service. The problem with Apple is that it sells a lot of iPhones, iPads and computers but didn’t build enough retail infrastructure for acceptable customer and warranty service."

    Sunshine writes that when he had a problem, he needed to make an appointment in order to get it fixed: "No one who buys a new iPhone, Apple computer or iPad needs an appointment. People spending money on new products don’t have to wait.  Only people that own broken Apple products were sent away."

    You can read the whole critique here.

    Now, to be honest, I'm not sure that Sunshine is being entirely fair here. (Despite his last name, he seems a little cranky. Perhaps he should put a little Monty Python on the Victrola...)

    Not all Apple Stores suffer from the problems he describes. I go to the Apple Store frequently, and I've never encountered the cultural service issues that he complains about. (It sounds like the small store near his house is a lot smaller than most of the newer Apple Stores out there.)

    That said ... I do think that Apple has to be sure that its mania for creating new products is matched by a dedication to customer service. And while this may be an isolated case, this column is a perfect example of how one bad customer experience can be broadcast to a large audience.

    Could this be a result of a change in leadership in the Apple Store organization? (The guy who pretty much created the division, Ron Johnson, went to JC Penney, only to be replaced by John Browett, who had a history in discounting. Browett is now gone, after just six months, and a search is on for his replacement.)

    Apple needs to pay attention to these complaints ... and to be willing to examine the entire division from the ground up.
    KC's View:

    Published on: November 8, 2012

    The New York Times this morning reports that "advocates for the labeling of genetically modified food vowed to carry their fight to other states and to the federal government after suffering a defeat in California on Tuesday ... The backers of the measure, known as Proposition 37, said on Wednesday that they were encouraged it had garnered 4.3 million votes, even though they were outspent about five-to-one by opponents. They are now gathering signatures to place a similar measure on the ballot in Washington State next year." Other states said to be likely targets for pro-labeling initiatives are Oregon, Vermont and Connecticut.

    The opposition has maintained that Prop. 37 was badly written, full of loopholes, put too much responsibility on retailers and would have been a goldmine for trial lawyers. Proponents have said that they believe people have a right to know what is in the food they eat.

    According to the story, "The election in California was closely watched because it had national implications. It could have led to a reduction in the use of genetically modified crops, which account for more than 80 percent of the corn, soybeans and sugar beets grown in the United States. That is because food companies, fearing that some consumers would shun products labeled genetically engineered, would instead reformulate their products to avoid such ingredients.

    "With so much at stake, food and biotechnology companies amassed $46 million to defeat the measure, according to MapLight, an organization that tracks campaign contributions. Monsanto, the largest supplier of genetically engineered seeds, contributed $8.1 million. Kraft Foods, PepsiCo and Coca-Cola each contributed at least $1.7 million. The backers of Proposition 37 raised only $9.2 million, mainly from the organic and natural foods business."

    The Los Angeles Times reports that Proposition 37 "led in most coastal counties, including Los Angeles County, but lost big in the agricultural strongholds of the Central Valley."

    The Grocery Manufacturers Association released the following statement in response to the defeat of Proposition 37:

    “GMA and its member companies are pleased that California voters have rejected Proposition 37.  Proposition 37 was a deeply flawed measure that would have resulted in higher food costs, frivolous lawsuits, and increased state bureaucracies.  This is a big win for California consumers, taxpayers, businesses and farmers.  Foods and beverages that contain genetically engineered ingredients have been exhaustively studied and all of the leading scientific and regulatory bodies, including the U.S. Food and Drug Administration (FDA), US Department of Agriculture, the World Health Organization and the American Medical Association, have concluded that these products are safe and are not materially different than their traditional counterparts.”

    And Ron Fong, president/CEO of the California Grocers Association, offered the following comment:

    "We are very pleased with the outcome of Proposition 37 and thank California voters for seeing through this deceptive measure.  California grocers agree that consumers should have access to information, but the form of that information is critically important.

    "Any food labeling requirements should be consistently applied regardless of where food is purchased, should meet national standards, and should come in a form that helps achieve compliance not enrich trial lawyers at the expense of higher food costs.  Proposition 37 simply failed to meet that standard.  That being said, CGA has already begun discussions with our diverse membership to identify solutions we can bring to the table to help consumers better access information they may want."
    KC's View:
    My position on this is clear. GMO labeling is going to happen, and I think the food industry is better served by an approach that embraces the challenge rather than fights it. The approach should be national, not regional. It should be rooted in education and technology solutions, not scare tactics. Trial lawyers should not be the prime beneficiary, and manufacturers should have the bulk of the responsibility for proper information.

    To take a different approach is to be on the wrong side of history.

    Published on: November 8, 2012

    The Wall Street Journal reports how how "storm-hit residents in the Northeast are altering their buying habits, skipping optional items in favor of necessities in a shift that raises questions about how the holiday season will fare."

    The story goes on: "In New York, New Jersey and Connecticut brick-and-mortar shopping visits were down 7% last week, compared to the average number of shopping visits over the five prior weeks, NPD Group said.
    Many consumers were unable to turn to their computers to shop because of widespread power outages, so online retail suffered. Online buying visits in the Northeast fell 4% when compared to the average of the prior five weeks, NPD said."

    The general sense is that the impact of Sandy - and the piling-on that took place yesterday when a Nor'easter hit the region with an early season snowstorm - will be an end-of-year holiday shopping season that may look very different from what was expected just a few weeks ago, though the National Retail Federation (NRF) says it is sticking to its prediction of a 4.1 percent growth in holiday sales.


    • Wakefern Food Corp. announced that "on behalf of its ShopRite and PriceRite stores, it will donate up to $1 million in both funds and in-kind donations  to assist in the relief efforts for those struggling in the wake of super storm Sandy. The company’s support will focus on regional food banks in the areas its stores serve throughout the Northeast who are providing meals and other assistance to those who have been displaced from their homes."

    • And, Ahold-owned Stop & Shop announced "donations totaling $2.5 million from the companies and their charitable foundation, Our Family Foundation, to the American Red Cross.  The donations are being made to support Hurricane Sandy disaster recovery and clean up efforts helping families affected by the recent storm, with an emphasis on the hardest hit areas in New Jersey, New York and Connecticut.  In addition, Stop & Shop stores in New York and New Jersey will serve as drop-off points for canned and packaged food."
    KC's View:
    I can't believe that we're still going post-Sandy stories, and I'm looking out my window at a yard that is covered with snow.


    Published on: November 8, 2012

    USA Today reports that "more than 30 retailers' ads have already been released - somehow - to deal sites this holiday season. By Tuesday afternoon, sites had already gotten copies of ads for deals starting the day after Thanksgiving for stores including Sports Authority, RadioShack and Kmart." The Friday after Thanksgiving - the traditional beginning of the end-of-year holiday shopping season - is known as Black Friday.

    In some cases, the story says, the ads are being leaked without authorization (sometimes prompting the retailers to object). But there also are times when the leaks are unofficial but (likely) sanctioned by top management, which wants to look relevant and take advantage of the buzz that social media can provide once the ads become public.

    Meanwhile, Walmart has said that it will make its Black Friday prices available as of 8 pm the evening before, and, as Reuters reports, the retailer will "guarantee that three items will be available that night to people standing in line in its stores between 10 p.m. and 11 p.m. on Thanksgiving, though the items are not among the hottest new gadgets of the year.

    "Those shoppers are guaranteed access to an Apple (AAPL.O) iPad 2 16GB with Wi-Fi, a March 2011 version, priced at $399 with a $75 Walmart Gift Card; a 32-inch Emerson 720p LCD TV at $148, $80 below the usual price; and an LG Blu-ray player for $38 that Walmart does not typically sell but said goes for $68 to $79 elsewhere."
    KC's View:

    Published on: November 8, 2012

    Time has a story about how the Great Recession has prompted many consumers to change their shopping habits and shift to private brands - though Time uses a term that probably makes private brand folks crazy, describing them as "generic," "no-name" brands.

    The story also quotes from a study by the Integer Group, indicating that:

    • Nine out of 10 women are willing to consider both national brands and private brands before making a decision.

    • People tend to think that national brands are better in the laundry detergent category, but are less concerned about brand names when it comes to milk and medicine.

    • "In 2010, 57% of consumers agreed with the statement 'Brand names are not better quality.' More recently, the figure inched up to 64%."
    KC's View:
    I cannot believe that phrases like "generic, no name brands" are still being used.

    Published on: November 8, 2012

    • The Wall Street Journal adds to the cacophony about Tesco's troubles, writing this morning that the retailer is "scrambling to address its missteps at home. In the process, it is transitioning from a ravenous retailer that was adding new markets, services and storefronts at a rapid clip to one that is wringing the most out of existing operations and adopting more caution. At the same time, Tesco is pulling back on its global ambitions."

    According to the story, "For years, Tesco dominated food sales with its powerful loyalty-card program, strong private-label products and low prices, and muscled beyond food into areas such as banking and mobile phones ... Its U.K. operation - which accounts for two-thirds of its £72 billion in annual sales - allowed Tesco to fund an ambitious overseas expansion in China, the U.S. and elsewhere. But some of those foreign gambits are faltering, and the money Tesco spent chasing foreign growth left the domestic operation starved for investment. Stores in Britain weren't properly staffed, the fresh-fruit and -vegetable aisles started looking picked over, and the chain didn't invest in refreshing the private-label products to entice shoppers."

    The extent of the global problems, the Journal writes, means that CEO Philip Clarke "has pulled the plug on Tesco's business in Japan, put the brakes on store development in China, ruled out major expansion in India for now, and slashed capital expenditure at the U.S. Fresh & Easy chain until it makes a profit. Some analysts expect Tesco to exit the U.S. altogether, and some investors have been pushing the company to do so."
    KC's View:

    Published on: November 8, 2012

    Bristol Farms has opened its second Lazy Acres store, in Long Beach, California; the first one operates in Santa Barbara. According to the company, the store was "created to entice the food passion of natural food lovers in Southern California."

    Kevin Davis, CEO of Bristol Farms and Lazy Acres, said in a prepared statement: "Our natural and organic, fresh food offering is what this neighborhood is looking for and our vast product mix is unique to the area and will fulfill a need that Long Beach is hungry for.  We place a heavy emphasis on, our good for you, peripheral departments as well as our Natural Living Center."
    KC's View:
    When I was in Southern California a couple of weekends ago, I noticed that in Redondo Beach, there was a big "walk for education" event along The Strand, and there was a big tent promoting the coming Lazy Acres opening, with lots of cheerful, healthy-looking young people handing out fresh bananas and answering a lot of questions. Smart move by Bristol Farms, as it expands its footprint to appeal to a different kind of Southern California foodie.

    Published on: November 8, 2012

    • The Orlando Sentinel reports that "getting regular exercise and drinking coffee have both been shown to reduce the risk of dementia in seniors."

    According to the story, "Seniors who exercised regularly reduced their risk of vascular-related dementia by 40 percent and cognitive impairment by 60 percent, according to a study published in the American Heart Association Journal Stroke."

    A second study suggests that "moderate coffee consumption of 3 to 5 cups per day at mid-life is linked to a reduced risk of dementia in late life," and that "substantial evidence also indicates that caffeines protects against neurodegenerative diseases like Parkinson’s or Alzheimer’s disease."
    KC's View:
    This is the kind of news that makes me feel very good, especially since 3-5 cups of coffee per day is a bare minimum for me.

    Published on: November 8, 2012

    Yesterday, MNB took note of a National Public Radio report that while a study suggesting that the artificial sweetener aspartame could be a possible cancer risk was scheduled to be published this week in the American Journal of Clinical Nutrition, it was pulled at the last minute by the hospital sponsoring the study. The reason: Brigham & Women's Hospital, which is connected to Harvard University, decided that the research was too weak to be released, and that the findings had been promoted prematurely by the hospital's media relations department.

    Experts called the decision a victory for "evidence-based science."

    I commented:

    Isn't "evidence-based science" sort of redundant?

    I'm no scientist, but I seem to remember from my Jesuit education that science was by its very nature evidence-based.

    Not that there aren't plenty of people who would like to deny the evidence on a whole range of issues. But that's not science. That's wishful thinking.

    One MNB user was skeptical that a Jesuit education would support an evidence-based approach:

    Doesn't that contradict everything the Catholic Church stands for?

    It would be my experience that Jesuits, unlike say, the Irish Christian Brothers and the Dominican Sisters, actually encourage questions and skepticism. It was my experience that questions to the latter two generally resulted in bad grades and a smack (often a really hard smack). The Jesuits would give me an "A."

    Now, to be clear, the Jesuits have a different approach to matters of faith. But they know the difference between religion and science.

    Another MNB user wrote:

    I have been a loyal reader of MNB for the past 3 years ... Today in your comments on the concept of “evidence-based science” it hit me why I enjoy your writing style so much as you link seemingly unrelated topics through common threads.  It’s the Jesuit education!!  As a graduate of St Xavier H.S. in Cincinnati I was taught, among other things, the value of critical thinking and the rarely found skill of writing.  Although I am a CPA by trade, I had a monthly column published in the Cincinnati Business Courier (when I was in public accounting, way back in the early 90’s) and worked closely with the Media/PR department writing and proofreading souvenir program articles and press releases during another career stage at Kentucky Speedway (a NASCAR race track in Sparta, Ky).  While I have never appeared before the Pope in sandals, jeans and a T-shirt I have remained true to  the benefits of my Jesuit upbringing.  I can only hope that my two boys will follow in my footsteps and become 3rd generation members of The Long Blue Line.

    Thanks for giving me a daily reason to think, and often laugh through MNB.

    On another subject, an MNB user wrote:

    To your point that the industry "develop a strategy for voluntary GMO labeling", why is that even needed?  Any smart manufacturer on the side of labeling should learn from the opponents of High Fructose Corn Syrup and begin labeling their food something like "contains NO GMOs". A truly enterprising manufacturer could even create a logo and offer it for free to other manufacturers who agree to that standard and want to make the same claim. If it's a perceived consumer benefit, they will vote with their dollars.

    And from another reader:

    It's a shame that large corporations are able to sway important legislation in this country, especially when it concerns the health of its very own customers.  However, consumers do not need a law in order to get GMO labeling accomplished.  All consumers need to do is shop at grocery outlets that promote non-GMO and buy products certified non-GMO.  When these large corporations like Pepsi, Nestle, and Kraft start to see POS data showing a surge in popularity of non-GMO products being purchased, they will get the hint that this is important to consumers.  Even though the physical vote didn't get this passed, consumers can vote with their wallets and choose to support those companies and brands that sell non-GMO.

    Finally, I got the following email yesterday regarding something I did not write about yesterday:

    You are brilliant for not commenting (yay or nay) on the election... Probably saved you days of going through "Nobama" messages.

    I didn't avoid the election because I was worried about emails. (Far from it.) More importantly, I thought it was important to be able to come up with a business lesson from the results.

    One occurs to me.

    I heard a Republican strategist yesterday make the following comment: "To be frank, we are a 'Mad Men' party in a 'Modern Family' world."

    And another GOP strategist said that the Republican Party was going to continue to have problems in national elections as long as it is perceived as being anti-woman, anti-gay, and anti-immigrant ... and at the very least, Republicans have to craft an approach to issues that seem rooted in the cultural and demographic realities of the 21st century. (A number of people seem to think that the clock is ticking ... that the GOP has to change at least as fast as the electorate does.)

    And I thought those were profound statements ... with a lot of business relevance.

    Think about it. You can't run a successful business if it seems like you are addressing modern problems with an out-of-touch mindset. Nostalgia has its place, but not if you are trying to run a relevant retailing business.

    There will be a lot of sturm und drang in the Republican party as it tries to figure out what went wrong in a year when it thought most things would go its way. Some will say that the party needs to get more conservative, while others will suggest that changing demographics means that a new approach to conservatism needs to be developed.

    I have no comment on the election other than to restate the obvious - that the Republican part seems to have a branding problem.

    And by the way ... the Democratic Party has its own problem, because it seems to be perceived as anti white male. I would argue while demographics are changing and white men are not as important as they used to be, Democrats cannot afford to just write them off.

    Both parties have plenty of work to do.
    KC's View: