retail news in context, analysis with attitude

Published on: November 26, 2012

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Published on: November 26, 2012

And now, a selection from the endless Thanksgiving Weekend/BlackFriday/Cyber Monday news buffet...

• The Chicago Sun Times reports that the National Retail Federation (NRF) estimates that "139.4 million adults visited stores and online retail sites in the United States during the Thursday-through-Sunday period, up 6 percent from 131 million last year. Counting repeat visitors, the federation estimated 247 million shoppers browsed and bought during the Black Friday period, vs. 226 million last year, a 9 percent increase. The visits translated into spending estimated at $59.1 billion, or about $423 per shopper, up almost 13 percent from $52.4 billion during 2011’s Thanksgiving weekend."

• Reuters reports that "Black Friday retail sales online this year topped $1 billion for the first time ever as more consumers used the Internet do their early holiday shopping, comScore Inc said on Sunday. Online sales jumped 26 percent on Black Friday to $1.04 billion from sales of $816 million on the corresponding day last year, according to comScore data.

"Amazon.com was the most-visited retail website on Black Friday, and it also posted the highest year-over-year visitor growth rate among the top five retailers. Wal-Mart Stores Inc's website was second, followed by sites run by Best Buy Co., Target Corp. and Apple Inc."

• NRF is projecting that despite the spending that consumers did over the Thanksgiving weekend, "129.2 million Americans plan to shop on Cyber Monday this year, up from the 122.8 million who shopped last year, and the 106.9 million who shopped on Cyber Monday in 2010." In addition, NRF says, "85 percent of retailers will have a special promotion for Cyber Monday."

• NRF "asked shoppers which days they shopped online – more than one-quarter (27.0%) of holiday shoppers said they shopped online on Thanksgiving Day, and nearly half (47.5%) on Black Friday."

• NRF also says that "the number of shoppers planning to use their smartphones or other mobile device this Cyber Monday increased to 20.4 million this year, from 17.8 million in 2011, an increase of 14.4 percent. In just three years, the number of Americans saying they would use their mobile device to shop on Cyber Monday has skyrocketed from just 3.6 million (3.8%) in 2009 to 20.4 million (15.8%) in 2012.

"While the majority of Cyber Monday shoppers will make purchases from their home computer (88.0%, or 113.7 million people), nearly 16 million will also use their computers at work to shop this year (12.4%)."

• NRF reports that "more than 35 million Americans visited retailers’ stores and websites Thursday – up from 29 million last year ... According to the survey, a record 247 million shoppers visited stores and websites over Black Friday weekend, up from 226 million last year ... the average holiday shopper spent $423 this weekend, up from $398 last year. Total spending reached an estimated $59.1 billion."

• The Wall Street Journal reports on heightened competition between bricks-and-mortar retailers and e-commerce purveyors, with fast and constant price changes on major items as the two retailing segments jockey for pricing supremacy. The Journal writes that "the fast price changes during the year's most competitive shopping period highlight a sea change in how retailing is done. The rise of e-commerce, along with an explosion in data and the power of technology for analyzing it, has made it possible for retailers of all stripes to monitor their rivals' pricing strategies and react in seconds, sometimes with computer algorithms making the decisions.

"Store chains have long battled each other to offer the best deals. But new technology has enabled them to do so more accurately, comprehensively and faster than ever. For consumers, that could mean access to the best bargains without the need to wait in long lines in the cold and dark. For retailers, however, the risk is the profit-killing discounting that already characterizes Black Friday could expand as chains are forced to be more aggressive to stand out."

• And, the Journal suggests, the spread of flexible pricing may mean that more consumers will demand it ... and more retailers may have to deliver it.

• The Boston Globe reports that "Internet retailers recorded 17.4 percent more sales Thursday compared with the previous year’s Thanksgiving Day in large part due to a spike in buying on mobile devices, according to IBM Smarter Commerce, which tracks online holiday shopping activity.

"The number of consumers making Thanksgiving purchases with mobile devices rose 65.3 percent from last year, according to IBM. It also found that tablet users were big after-dinner spenders, with users of Apple’s iPad making up 10.7 percent of mobile activity for the day."

• USA Today reports that "Small Business Saturday," created as a day on which consumers are encouraged to shop local retailers instead of national big box chains, seems to be experiencing continued growth, with anecdotal evidence suggesting that small stores saw increased traffic last Saturday. Indeed, a survey of small retailers by NRF reveals that 36 percent of them say that it is their most important shopping day of the year; just 24 percent of independent retailers say that Black Friday is more important.

• USA Today reports that "Thanksgiving shopping on Thursday took a noticeable bite out of Black Friday's start to the holiday season, as the latest survey found retail sales in stores fell slightly from last year.

"Saturday's report from retail technology company ShopperTrak estimated that consumers spent $11.2 billion at stores across the U.S. That is down 1.8% from last year's total. This year's Friday results appear to have been tempered by hundreds of thousands of shoppers hitting sales Thursday evening while still full of their Thanksgiving dinner. Retailers including Sears, Target and Wal-Mart got their deals rolling as early as 8 p.m. on Thursday ... Online shopping also may have cut into the take at brick-and-mortar stores: IBM said online sales rose 17.4% on Thanksgiving and 20.7% on Black Friday, compared with 2011."

• Finally, despite all the hoopla, the Wall Street Journal also reports that an analysis "of this year's most-touted Black Friday deals found that many of the bargains advertised as 'doorbusters' were available at lower prices at other times of the year - sometimes even at the same retailer."

The analysis, conducted by the Journal and price-data firm Decide Inc., notes that "retailers generally don't make specific promises of lowest-ever prices, and Decide found many of the bargains appeared to be genuine. The data company said the majority of the doorbuster deals it checked hadn't been available at lower prices during the year. Still, the transparency and easy aggregation afforded by online pricing is making it simpler than ever to test retailers' claims. Decide, for example, found retailers often pick popular brands or lower-quality items for deep discounts on Black Friday."

Published on: November 26, 2012

The New York Times reports that Walmart has suspended several employees of its joint venture in India, including the company's CFO, in a move that is described by the paper as being "part of an internal corruption investigation" that was begun when it was charged that the company was guilty of systemic bribery of public officials in Mexico.

That investigation has so far cost the company more than $100 million and has been expanded beyond Mexico to Brazil, China and India - all global markets that are important parts of Walmart's expansion plans. In addition to Walmart internal probe, there also are investigations being conducted by the US Department of Justice and the US Securities and Exchange Commission (SEC).

According to the Times, "The news comes at a sensitive time for foreign retailers in India, where corruption scandals in industries such as telecommunications and coal mining have badly damaged the ruling Congress Party. Eager to rekindle foreign investment, the Congress Party eased foreign investment rules in September, paving the way for Wal-Mart and others - which had been limited to wholesaling - to run retail shops with a local partner."

Walmart's partner in India is Bharti Enterprises.

Published on: November 26, 2012

Fox News has a story saying that "more and more consumers are paying a premium and seeking out beef which is raised exclusively on grass ... Demand for grass-fed beef has been growing at a rate of 20 percent a year, according to one study.  More stores are starting to offer grass-finished, but retail availability is still limited."

Grass-finished beef is described as having "a more favorable ratio of Omega 6 and Omega 3 fatty acids and a higher level of conjugated linoleic acids (CLA's), known for fighting cancer and fat."

The story also notes that when grass-fed beef is not available at retail, some consumers are buying direct from ranchers, and then "investing in freezers, where vacuum sealed cuts can last up to two years."

Published on: November 26, 2012

The New York Times reports that union-backed group OUR Walmart said that there were anti-Walmart protests on Black Friday "at 1,000 stores in 46 states, ranging from a couple of community supporters’ asking to talk with store managers about raising wages to raucous demonstrations in the Los Angeles, New York and Washington areas that each attracted hundreds of people." The organization "claims several thousand store employees as members and said hundreds of them did not report to work Friday in what the group said was a strike," according to the Times.

However, the story also says that "Wal-Mart sought to play down the protests, saying they were largely a made-for-TV event and had hardly affected the company on what it said was its best Black Friday." The retailer also said that most of the protestors were not Walmart employees, and, in fact, fewer of its employees missed work this Black Friday than on the same day a year ago.

Published on: November 26, 2012

Hungry for Twinkies and Wonder Bread, and worried that the bankruptcy and liquidation of Hostess Brands is going to cut off your supply?

Look to the north.

Bloomberg Business Week reports that "Saputo Inc., Canada’s largest dairy processor, has the trademark and brand rights to Hostess CupCakes and Hostess Twinkies in the country and manufactures the products themselves ... The same holds true for Wonder Bread, which in Canada is owned, manufactured and distributed by Toronto-based George Weston Ltd., Canada’s largest food manufacturer and majority owner of the Loblaw Cos. grocery chain."

Published on: November 26, 2012

The Associated Press is out with the annual assessment - compiled by PNC Wealth Management - of what it would cost to acquire all of the presents listed in the Christmas carol, "The Twelve days of Christmas," and determined that in each case, the items are more expensive or the same as last year.

Here's how the list lays out:

• Partridge, $15; last year: same.
• Pear tree, $189.99; last year: 169.99
• Two turtle doves, $125; last year: same
• Three French hens, $165; last year: $150
• Four calling birds (canaries), $519.96; last year: same
• Five gold rings, $750; last year: $645
• Six geese a-laying, $210; last year: $162
• Seven swans a-swimming, $7,000; last year: $6,300
• Eight maids a-milking, $58; last year: same
• Nine ladies dancing (per performance), $6,294; last year: same
• 10 lords a-leaping (per performance), $4,767; last year: same
• 11 pipers piping (per performance), $2,562; last year: $2,428
• 12 drummers drumming (per performance), $2,776; last year: $2,630

Published on: November 26, 2012

• Wakefern Food Corp. and NJR Clean Energy Ventures, a subsidiary of New Jersey Resources, announced that they "have begun work on the installation of a rooftop solar system at a Wakefern Food Corp. distribution center in Keasbey, New Jersey. The 2.4 megawatt solar system will supply power to a refrigerated warehouse, helping lower Wakefern’s long-term electricity costs and its greenhouse gas emissions."

• The Los Angeles Times reports on a study of the foods served by the nation's airlines by Charles Platkin, a professor of nutrition at City University of New York, concluding that it seems to be healthier than ever.

"Platkin gave the top ranking this year to California-based Virgin America, noting that the airline offers lower-calorie options like roasted pear and arugula salad, a 'protein plate' with hummus and whole wheat pita bread, plus oatmeal for breakfast. He gave the airline 4 1/4 stars out of five ... Air Canada and Alaska Airlines came in second and third in Platkin’s ranking. Other big airlines - including United, American, Delta and US Airways - ranked in the middle of the list."

The worst US airline from a nutritional point of view: Las Vegas-based Allegiant Air, with a rating of 1 1/2 stars.

• Reuters reports that "Reckitt Benckiser has signed a deal to acquire U.S. group Schiff Nutrition for $1.4 billion, winning an entry into the $30 billion vitamins and nutrition supplements market after beating out Germany's Bayer.

"The deal brings Reckitt a new portfolio including MegaRed for heart care, Move Free for joints and Tiger's Milk nutrition bars to add to existing over-the-counter (OTC) health products like Gaviscon for heartburn and Strepsils for sore throats."

Published on: November 26, 2012

• Kansas City-based Ball's Food Stores announced that Mike Beal, the company's CFO, has been promoted to COO. David Ball remains as the company's chairman/president/CEO.

• Brian Kelley, chief product supply officer in charge of the supply chain for Coca-Cola Refreshments, and the executive slated to become president of Coca-Cola Refreshments, has been named CEO of Green Mountain Coffee Roasters.

Published on: November 26, 2012

Larry Hagman, who personified one face of American business with his gleeful portrayal of Texas oilman J.R. Ewing on the TV series "Dallas" from 1978 to 1991, and then recreated the role in a successful reboot of the series on cable TV earlier this year, died on Friday at age 81, from complications related to cancer.

Published on: November 26, 2012

Got some interesting emails last week about the story we had about how, 12 days after Amazon announced that for the first time, it would offer its Prime membership - which gives subscribers automatic two-shipping and free online streaming of movies and television programs - on a monthly basis for $7.99 per month, the company stopped selling the monthly option.Previously, Prime was sold only on an annual basis for $79 per year.Gizmodo.com, in reporting the change, suggests that this probably means that "they didn't sell all that many."

An Amazon spokesperson explained the change this way: "We regularly test new options for our customers. At this time, we've completed our test and are no longer signing up new customers for Amazon Prime monthly memberships."

I commented:

This proves something I've always believed - which is that CEO Jeff Bezos is willing to kill Amazon's young if he thinks they are not helping to build value. I'm not sure about the back room machinations that may have led to the monthly Prime option being approved and then dumped in less than two weeks. But I am sure that a) it proves yet again that Bezos is willing to make tough decisions, and b) for some reason, Bezos felt that this option was not pro-customer.

But a number of MNB readers had interesting takes on the decision that were a lot more incisive than mine.

One MNB user wrote:

Hmmm….I’m thinking that maybe they sold too MANY monthly…if you think about a time of year to leverage luring your customers to take advantage of annual prime spending account, wouldn’t it be when your customers were likely going to order much larger volumes?  $7.99 for one month during the holiday shopping season seems like a no brainer.

Another MNB user wrote:

We spend a  lot of time analyzing Amazon and have guys on our team who worked with Amazon for years. 

Here's their perspective on the news:

Guy #1: "Just my thoughts: 2 weeks? Somebody screwed something up.  Simple."

Guy #2: "Two other possibilities: Someone reran the numbers and discovered the profit loss potential from one month subscribers during peak holiday, or it was never intended to go live – someone flipped the switch by accident. (seriously – this happens all the time) ... Imagine if you could do all of your holiday shopping the week before christmas with all you can eat free 2 day shipping, for $7.99. They would risk exceeding capacity and blowing up the whole system.

"Good test. But not right before holiday."

This article gives Amazon too much credit for being plodding and deliberate. Their motto should be 'throw crap at the wall and see what sticks'.




Also got some email regarding Toys R Us CEO Jerry Storch saying that e-commerce will be limited because people will see it as bad fort the environment.

One reader wrote:

Kudos to you on your Toys comments – spot on, as usual.  Storch’s conclusion that e-shopping is less “green” is classic, skim the surface, thinking about sustainability.

And another MNB user chimed in:

I particularly enjoyed your Toys ‘R Us article. I agree with your viewpoint that Jerry Storch has no idea what he’s talking about. As a marketer, and a mother of a toddler son, I can tell you that the Toys ‘R Us shopping experience is horrendous. The stores are dirty, unorganized and not exactly ideal for a parent to take a child to when shopping. (For today’s working mom, the option of going to the Bricks and Mortar store after dropping their child off at school is completely unrealistic. His comments there indicate that he needs to some ethnographic research to really understand his consumer).

Further, in today’s world of consumer-centricity, Toys ‘R Us and Babies ‘ R Us don't grasp the concept of omni-channel shopping in order to allow the consumer to shop when and how she needs to shop. They only allow you to use their coupons in-store, which I understand is how they’re trying to drive you to the store, but completely ignores the needs of the consumer who needs to shop online. That just frustrates me. Forcing the consumer to shop in only one manner does one thing for that consumer…drives them to a different retailer. Environmental footprint aside, let’s focus on the consumer experience with the banner, regardless of bricks vs. clicks. Toys ‘R Us just doesn’t measure up in today’s world. I’ll take Amazon any day.

And another wrote:

Was Jerry Storch’s statement about “driving a truck down a country lane in rural Connecticut to deliver a package is hardly the greenest way of product delivery to occur" a dig at you or just coincidence?

I assume it was just coincidence. I think Jerry Storch has a lot better things to do than worry about what I think about his strategy and (IMHO) misguided reasoning.

But how funny would it be if it were?




We also continue to get email about the scathing review written by the New York Times restaurant critic of Guy Fieri's new Time Square restaurant. I loved the review, though some folks believed it went over the line.

MNB user Kari Mitchell wrote:

I disagree with that person saying review was mean.  Irregardless on whether the review was mean spirited or not Guy should use this wonderfully written (and hilarious) review as a business lesson and maybe even objectively review his restaurant himself.   As a Top Chef fan I have also embraced the “After Top Chef” show and one episode showed Richard Blais getting ready to open his restaurant and just being brutal to his chefs.  He knew his name would be on the restaurant thus his reputation was on the line, better for him to be brutal than a critic or more importantly a customer.  Does make me wonder if Guy knows this as well.  (btw I am still of fan of Diners, Drive-Ins and Dives)

From another reader:

It doesn’t take an experienced restaurateur to know if food is tasty and service is good.  This isn’t a case of a snobbish critic panning a lowbrow eatery simply for being lowbrow.  As a customer, it doesn’t matter if there is a ‘degree of difficulty’ I need to make allowances for.  To paraphrase Yoda, there is only Do Well, or Do Not Do.  There is no Try.  In a story I read online about the reaction to the review, it was noted that customer reviews posted on Yelp and Urban Spoon reflect similarly meh experiences.

I defended the right of critics and pundits to ply their trade, which led one MNB user to write:

So your conclusion is: just because you don't know what you're talking about is no reason to shut up.

Dimwitted TV anchors across the land are applauding.

My conclusion is that critics and pundits are paid to opine. As the reader, you can agree or disagree with them.

That's a far cry from hiring someone to deliver the news just because they have a pretty face.

And MNB user Steven Ritchey wrote:

I think the thing I want to say more than anything else, the critics review of Fieri’s restaurant was  plain mean, it was ugly.    I can write that way also, it’s not that hard to do.  What’s more difficult in my opinion is to write about your disappointments in such a way that you show a modicum of respect for the owner of whatever it is you are reviewing.

I generally enjoy reading your reviews, I may disagree with them.  My boss saw Skyfall last weekend, and he didn’t like it.  I’ll try to see it and see what I think.   However, our personalities are so different, as well as our education, we will almost certainly look for different things in the movie.  What makes it fun for me is, neither of us is wrong.  The restaurant you love, I may hate, switch places and handy dandy (guess where that quote came from), because different things are important to  us.
 
I don’t like reading reviews, editorial, commentaries,  that make it seem as if the writers attitude and opinions are the only ones that count.




On another subject, an MNB user wrote:

I seldom shop at Walmart (for many reasons) but had to stop at one during a recent vacation. They are so big, so ridiculously big, that it reminded me of a big reason why I don't shop there - I don't have the time to wander around that vast space looking for the one or two items I may need. Enter, Walgreen. They sure are convenient, easy to get in an out of of and usually have what I'm looking for. 

I have to think that a smaller, genuinely smaller (not a 'neighborhood Walmart' that is still more than 50,000 sq. feet), format store is a winner both for busy younger people and for older people. 

I know our smaller size - what we like to call 'human-scale' stores -  seem to fit that niche as well. But, they are harder to do and more expensive to run as you lose the economies of scale somewhat.




And on still another subject, a reader offered:

Best Buy's new CEO has a challenge on his hands; and that challenge is his people. I recently went into a Best Buy looking for an extra 120 volt charger for my iPad to carry in my suitcase. There were four BB employees in the section, standing around talking to each other. It was obvious that I was looking for something. When I found it and started to walk up to the front one of them deigned to look at me and ask if I needed help. I said that "no i didn't need any help as I wouldn't want to interfere with their socializing and that I hoped they all had an easy time finding jobs when Best Buy closed". One of the group, who turned out to be the manager, took exception to that, as he said BB was doing well and was even acquiring other companies.

The Best Buy in my home town is no better. As far as converting lookers to buyers, that will take decent people on the floor. They don't have them. What they do have is a poor corporate culture. I expect them to go the way of Circuit City. Virtually all my electronics, including my last flat screen TV, comes from Amazon.



As always, email about Supervalu.

One MNB user wrote:

An example of how deep the inept management runs through Supervalu.  The bread I buy to supply my morning toast has an everyday shelf price of $4.29 at Cub Foods.  The same product at Super Target has an everyday shelf price of $2.99.  Do these executives really believe the problems causing their company to flounder are related to things such as employee recognition rewards and merit raises?

Regarding the announcement of compensation changes for HQ personnel, one MNB user wrote:

HR personnel were very surprised that the cuts were handed out to the employees. It has been said that if the top 100 paid people in the company had taken just a 10% pay cut, none of these employee cuts would have happened. So much for Wayne Sales being "all in", huh?

But from another reader, an entirely different perspective:

Do you know what is disheartening?  The negative emails SV employees write to you.  I must be very naïve.   I’m a 12 year employee who has been through every up and down this company (Supervalu, not Albertsons) has had and yet, I still believe that I will see a once great company, return to glory.  Maybe it’s because each time I looked for an a new opportunity to grow, there was one available.  Each time we sold off something or closed something down and my position was eliminated, someone out there in Supervalu land thought I was valuable enough to keep around.  I’m one of MANY employees who are “grateful to have a job”, don’t complain and keep giving it my all.  Our leadership is finally making decisions that will change us for the better and frankly, I’m excited for the future.  I’m more than happy to show the constant whiners (it’s always the same ones) the way out of the building.

I respect your optimism.

But I would suggest that when folks write to MNB, it may be because they feel that there are few places where there voices are being heard.

My sense is that these people are not whining or complaining. They're just desperate to save a place they work and may even love ... but they feel their opinions and contributions are not respected.




I wrote about we'd be drinking several Oregon wines on Thanksgiving, leading MNB user Rudy Dory to write:

Thanks for supporting our Oregon Wine Industry both by consuming and promoting our products.  It is appreciated.

My pleasure. I think of the Pacific Northwest as my soon-to-be-adopted home.




Responding to Wednesday's piece about the demise of the Silver Fox Club, one MNB user wrote:

As a proud member of the Silver Fox Club, I would only point out that there is no future without a past. We owe this group, and especially Paul,Corliss, a lot !

And from MNB user Richard Townsend:

Hi Kevin, in looking at your photo insert, I couldn't help but hear in the back of my mind a little voice whispering "Carpe diem...." in the voice of Robin Williams, Not to suggest that the men pictured are deceased necessarily, and with all respect to the foundations they have laid, but a reminder that time and business waits for no man, and we should press forth and continue to build and improve upon their foundations.

Published on: November 26, 2012

In Week Twelve of National Football League action...

Houston 34
Detroit 31

Washington 38
Dallas 31

New England 49
NY Jets 19

Chicago 28
Minnesota 10

Cincinnati 34
Oakland 10

Cleveland 20
Pittsburgh 14

Indianapolis 20
Buffalo 13

Jacksonville 24
Tennessee 19

Denver 17
Kansas City 9

Miami 24
Seattle 21

Atlanta 24
Tampa Bay 23

Baltimore 16
San Diego 13

St. Louis 31
Arizona 17

San Francisco 31
New Orleans 21

Green Bay 10
NY Giants 38