retail news in context, analysis with attitude

Published on: February 6, 2013

Sources at Delhaize America have provided MNB with the copy of a memo circulated yesterday by the company's new president/CEO, Roland Smith, in which he informs employees about further but still-to-be-announced organizational cuts that build on a series of layoffs announced earlier this year.

The text of the memo follows:

"On January 11, I sent you a note that outlined significant changes to our officer-level structure and committed to announcing further changes in our organization by mid February. Since that time, the entire officer team has worked diligently and quickly to build a Delhaize America (DA) organization that is both effective in achieving our goals and as efficient as possible. Today, I’d like to begin the process of sharing this new structure with you.

"Our new organizational structure above the store manager level will have almost 500 fewer positions, including the elimination of 150 open positions. A reduction of this magnitude required hundreds of difficult decisions, especially in light of the impact these decisions will have on many of our capable and long-tenured associates. Please know that all of these moves were carefully considered and made with the ultimate goal of serving our customers, growing our business, and creating shareholder value.

"Between now and next Tuesday, your supervisor will speak with you directly regarding the impact our new organizational structure will have on you. Many of you will hear that your responsibilities will not change, some will learn about new opportunities and challenges, and some will hear the difficult news that you will be departing the organization. I realize that you may have been anxiously awaiting this news and that potentially waiting another week to learn more may seem like a long time. However, I want to assure you that we’re moving as quickly as possible with this process while still taking the time necessary to ensure our associates are treated with dignity and respect.

"I appreciate that the next week will be emotionally difficult, as these decisions will have a profound and personal impact. I also know that these organizational changes may be hard to understand and accept. However, please understand that the DA Officer Team and I firmly believe that this new structure and team of talented associates are the foundation for DA’s future success.

"By the middle of next week, I will send you additional information that will provide much greater detail about our new organizational structure and dates for upcoming town hall-style meetings. 

"I sincerely appreciate your hard work and continued support during a difficult time, and am confident that the future for Delhaize America is very bright."

Published on: February 6, 2013

The US Postal Service (USPS) is expected to announce later today that it will stop delivering mail on Saturdays, beginning in August 2013. However, post offices will remain open on Saturdays, and there will continue to be package delivery on Saturdays.

According to an Associated Press story, the USPS is making the move without getting Congressional approval, but believes that it has the support of the American public in eliminating Saturday mail delivery.

While the delivery of letters has gone down in recent years, package delivery actually has gone up by 14 percent since 2010 - which means that the USPS is looking to emphasize the profitable and growing part of its business, and cut back in areas that are in decline.

Published on: February 6, 2013

by Kevin Coupe

"Kate's Take" is brought to you by Wholesome Sweeteners, Making The World a Sweeter Place.

There have been a number of stories and columns this week addressing the subject of how and when marketers should embrace a wide variety of issues. Yesterday, for example, Michael Sansolo wrote about the importance of using social media and "building a useful strategy for engagement," and Kevin Coupe compared two different scenarios - one in which Victoria's Secret succeeded by engaging with its customers, and PepsiCo seemed to go out of its way to point out that its customers had little influence over a decision it made.

These examples make me want to come back to another engagement controversy - the fight over Coca Cola’s anti-obesity advertising campaign that still is bubbling across the internet.

Let me recap. The world’s No. 1 beverage manufacturer launched the campaign last month urging Americans to “Come Together” to battle the nation’s obesity academic. The first ad touted Coke’s expanded lineup of beverages – low-calorie, zero-calorie and “healthier” options such as Vitamin Water – as well as smaller-size cans (7.5 ounces vs. 12 ounce) and prominent calorie counts. The second, more upbeat “Be OK” ad features activities such as dog walking or doing a victory dance after bowling a strike to burn off “140 happy calories” of Coke.

Negative reaction was fast and furious. On her popular Food Politics blog, Marion Nestle, professor of nutrition food studies and public health at New York University, wrote that “the ad is an astonishing act of chutzpah, explainable only as an act of desperation.”

Michael F. Jacobson, a longtime Coke nemesis and executive director of the Center for Science in the Public Interest, came out swinging: "Generally, when a company claims to be 'part of the solution' it means 'we know we're culpable so we must deflect the blame elsewhere.'”

In fact, a much-watched YouTube parody of the Coke commercials produced by CSPI “translated” the Coke speak to “Remember, if you gain weight it’s YOUR fault, not ours” and “We’re part of the solution. You know, like if you get lung cancer it’s smart to get advice from your cigarette company.”

Not surprisingly, cynicism ran rampant in the commentary on the internet and in the media. Consider this post: “I love Coke. Signed, Diabetes”

But other public relations execs and social media pundits commended Coke for getting out in front of this hot button issue, particularly as New York City’s ban on large sugary drinks remains in the headlines and in the courts amid calls for additional taxes on sweetened sodas. “It is a very, very big issue that they need to manage, and what Coca-Cola first had to do was make themselves part of the conversation,” Michael Fox, a corporate communications executive with ICR Group told PRWeek.

Interestingly, at least one study found initial consumer reaction was notably positive. The research firm Ace Metrix said a survey of more than 500 households found the initial ad got high scores for effectiveness -- on both emotion and information. It scored well across all demographics, and did particularly well in households with children (42% above the soda ad norm).

So, was Coke right or wrong to engage on the obesity issue in this way?

First of all, I don't think this is something Coke had to do. Sure, there seemed to be a coalescing of anti-obesity forces that on the face of it may have forced the company's hand. But there are all sorts of things that Coke could have done to address the subject short of a multi-million dollar ad campaign that, in some ways, it had to know would paint a target on its back.

I think it’s easy to be cynical and criticize Coke for being disingenuous. To be honest, my first inclination was to join the chorus. But cynicism is a lazy response to an epidemic with staggering health and financial implications for our nation.

Do I think Coke’s upbeat campaign is oversimplifying the issue? Sure. You don’t need to be a registered dietitian to know there is a difference between calories from a piece of fruit versus a soda laced with high fructose corn sugar.

But a stunning number of Americans are not educated about calories, nutrition and exercise, and I do believe that any effort to generate informed dialogue on this critical issue is important, and Coke has opened the door for a mass-market conversation that might not have taken place so publicly otherwise.

Marian Nestle and Michael Jacobson certainly have a right to their opinions, but I would suggest that despite their preeminence in their fields, a lot more people know the name 'Coca-Cola" than either of theirs. And, I'd guess that a lot more people have seen those obesity-focused Coke commercials than have ever heard either of their names or their voices.

Coke was smart to get into the conversation.

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

Published on: February 6, 2013

by Kevin Coupe

Entrepreneurial opportunity can be found in all sorts of interesting places.

For example ... the Seattle Times reports about about a fellow named Stephen Hershman, who "was serving on the USS Kentucky submarine in 2003 when his identity was stolen, compromising his top-secret security clearance.

"Forced out of his communications job, he spent several months straightening out his credit rating. That’s when Hershman thought of starting a service that provides customers access to an industrial-strength shredder that destroys documents on the spot. Hershman started a do-it-yourself shredding company, The Shred Stop."

According to the story, the "original idea was a drive-through shredding service similar to an espresso hut, but they struggled to find an appropriate location. Brad Haggen, vice president of new business for the Haggen supermarkets, liked their idea but was only interested if they created a model that could be installed in stores.

"They came up with a kiosk the size of a vending machine with a simple, user-friendly design. Customers can swipe their credit cards, press the 'begin' button and start shredding. The machine can shred 50 sheets of paper at a time. The cost is $2.50 per minute."

While the concept originally was targeted at small businesses, the broader view is that the shredding kiosks will be useful to anyone concerned about identity theft. (Which is to say, everyone. The story notes that "an estimated 8.6 million households in the United States had at least one victim of identity theft in 2010, according to results from the National Crime Victimization Survey conducted by the federal Bureau of Justice Statistics. That’s a 33 percent increase from 2005.)

And here's an added bonus: the machines are manufactured and assembled in the USA.

Great idea. Great execution. It's an Eye-Opener.

Published on: February 6, 2013

The New York Times this morning has an interesting story about the use of nanomaterials in food products and packaging. Here's how the Times frames the story:

"Nanomaterials, substances broken down by technology into molecule-size particles, are starting to enter the food chain through well-known food products and their packaging, but there is little acknowledgment by the companies using them, according to a new report from a nonprofit group that works to enhance corporate accountability.
Some companies may not even know whether nanomaterials are present in their products, the corporate accountability group As You Sow said.

"Only 26 out of 2,500 companies, including PepsiCo, Whole Foods and the corporate parent of Pizza Hut and Taco Bell, responded to a survey from As You Sow about their use of nanomaterials." And, only 14 of those companies said they don;t use nanomaterials, and only two said they even have a policy about their use.

And, the Times adds:

The "European Union requires labeling of foods containing nanomaterials and that the European Food Safety Authority has published guidance for assessing nanomaterials in food and animal feed.

"Last April, the Food and Drug Administration issued an unusually emphatic statement on nanomaterials, saying it did not have enough data to determine the safety of nanomaterials in food."

Published on: February 6, 2013

The Associated Press reports that a new study from the Pew Research Center’s Internet and American Life Project reveals that while 67 percent of Americans who use the internet are on Facebook, "some 61 percent of Facebook users had taken a hiatus of at least several weeks for myriad reasons, whether they were weary from an onslaught of gossip, or for the more pious, the arrival of Lent."

Just 20 percent of American internet users are on LinkedIn and 16 percent are on Twitter.

The AP story continues: "The largest slice of users, 20 percent, said that they were simply too busy with their own lives to follow the constant stream of status updates, George Takei quotes and baby photos. Privacy and security concerns, which have received plenty of media coverage, were low on the list. Only 4 percent of people gave these reasons, combined with concerns about ads and spam, as their 'Facebook vacation' motivation."

Published on: February 6, 2013

• The Wall Street Journal this morning reports that Apple Inc. has "launched a new section on its iBookstore called Breakout Books, featuring only self-published works. The books, many of which are distributed by Smashwords Inc., an e-book publishing and distribution platform based in Los Gatos, Calif., include such categories as romance, fantasy, and mysteries."

According to the story, "Self-published titles are increasingly finding their way to the top of the digital best-sellers lists at Amazon.com Inc. and other online retailers."

Published on: February 6, 2013

• The Chicago Tribune reports that Supervalu-owned Jewel-Osco there will close three stores by April 15, in Chicago, Aurora, and Niles.

According to the story, "In an internal memo obtained by the Tribune, Jewel President Brian Huff told employees that 'this decision was necessary to ensure our continued strength in challenging times,' and 'is not a result of or related to the recent transaction between Cerberus Capital Management and Supervalu'."

Published on: February 6, 2013

• The Kroger Co. announced the promotion of Jeff Burt, group vice president of perishables merchandising and procurement, to be president of the company’s Central division, which operates 136 food stores primarily in Indiana and Illinois. Burt succeeds Bob Moeder, who recently announced his plans to retire this spring.

Weis Markets has promoted Wayne Bailey to Vice President of Supply Chain and Logistics. Prior to his promotion, Bailey was a Regional Vice President.

Published on: February 6, 2013

...will return.