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: February 13, 2013

    The American Psychological Association has published a new study saying that 18-to-33 year olds, the so-called millennial generation, tend to stress out more than older generations, with more than 50 percent of those surveyed saying that their anxieties keep them awake at night.

    According to a piece in the Los Angeles Times, "A dour economy is top of mind for young people, with work and job stability sending their stress levels soaring. And no wonder -- their unemployment rate is 13.1%, well above the overall nation's 7.8%. A recent survey of 2010 college graduates found nearly half were in jobs that didn't require a university diploma."

    And, the story says, "Nearly 40% of millennials said their stress shot up in the last year, compared with 33% of baby boomers and 29% of those 67 and older."
    KC's View:
    I'm afraid that I'm a little unsympathetic on this one.

    In part, this is because I find it hard to believe that stress can keep anyone awake at night. (Mrs. Content Guy says that I don't have trouble sleeping even at those times when I should have trouble sleeping. I say it is because of clean living ... but she's dubious.)

    I get that young people have concerns about their professional futures, because an economic resurgence has taken so long and been so slow. But I would suggest that if they're being kept up at night by these concerns, I worry about how they're going to respond when they're married, with kids, paying off mortgages and putting your kids through college and dealing with aging parents and worrying about graying hair and receding hairlines and expanding waistlines and all sorts of other stuff.

    Published on: February 13, 2013

    Harris Teeter is said to be exploring a possible sale of the company, along with other strategic options, according to a report from Reuters this morning, which says that the supermarket chain is being advised by JP Morgan. Harris Teeter is said to have a market capitalization of more than $1.8 billion.

    The Reuters piece notes that regional chains often are at a disadvantage in competing with major chains, and suggests that Kroger, Ahold and Publix are among the companies that "are likely to take a look at Harris Teeter."
    KC's View:
    It would, in some ways, be a shame if Harris Teeter were sold to a bigger chain, if only because the industry is richer, more diverse and innovative for having companies like Harris Teeter around.

    But there's change in the air, with the pace mergers and acquisitions seemingly about to pick up. But I'm not sure that the food retail industry is the better for it.

    Published on: February 13, 2013

    Harris Interactive is out with its annual ranking of the sixty companies in the country with the best reputations, and for the first time, Amazon has the top spot, followed by Apple, which slipped from the number one position that it occupied last year.

    According to the press release, "The Walt Disney Company, Google, and Johnson & Johnson complete the top five. This is Google's eight consecutive top five appearance, an incredible achievement for a fourteen year old company."

    At the other end of the scale, "AIG and Goldman Sachs return to the bottom two reputation positions on the list of the most visible companies, joined by Halliburton, American Airlines, and Bank of America. With a full six point increase in RQ score though, Bank of America had the highest year-over-year increase in the 2013 study. Best Buy and Honda experienced the greatest decline in RQ scores, 6.76 and 4.73 points, respectively."

    Harris Interactive also says that "16 percent of the public said that the reputation of corporate America showed some improvement, 7 percent more than in 2012, while 49 percent said it declined, which was 11 percent less than those who felt this way last year. Only six companies achieved RQ scores of eighty and above, which signifies a great reputation, 25 percent fewer companies than in 2012 and nearly two-thirds less than just two years ago."

    When broken down into specific categories, Whole Foods ranked at the top for "social responsibility," Google was tops for "workplace environment," Amazon was best in "emotional appeal" and "products and services," while Apple was given best marks for "financial performance" and "vision and leadership."
    KC's View:
    I'm sort of surprised that Apple gets highest marks for financial performance, considering the way that its stock has been performing, and it is interesting that Amazon - which only recently has gotten into the business of selling its own products with the introduction of the Kindle lines - does so well for products and services.

    But the high rankings of Amazon and Apple says something about how people perceive, most of all, these companies as being relevant to their lives. And that's something every retailer in every venue needs to think about.

    Published on: February 13, 2013

    MNB has spent a fair amount of time recently covering the decision by Netflix to get into the content production business with series such as "House of Cards," in addition to its traditional business of distributing other companies' movies and TV series, while at the same time changing the distribution model by making all 13 episodes available for streaming at the same time, allowing viewers to choose how and when they want to watch them.

    From here, "House of Cards" appears to be a good metaphor for what every business needs to do in order to define and exploit a differential advantage.

    Well now, Netflix seems to be going one step further, striking a deal with DreamWorks to develop an original series for children that will be based on an animated film coming out next summer about a snail that dreams of competing in the Indianapolis 500.

    "Netflix boasts one of the largest and fastest-growing audiences in kids' television,"  DreamWorks Animation Chief Executive Jeffrey Katzenberg said in a statement. "They pioneered a new model for TV dramas with 'House of Cards,' and now together we're doing the same thing with kids' programming."
    KC's View:
    What this suggests to me is that the shifting of the balance of power to consumers that we talk about so much here on MNB is probably going to pick up steam, and will be seen as a basic reality by the next generation of shoppers. They are going to see the world in fundamentally different ways than their elders, and marketers that do not start preparing to adapt now will be in deep, deep trouble.

    Published on: February 13, 2013

    Food Business News reports on a new survey from AT Kearney suggesting that seven out of 10 shoppers are willing to pay more for locally sourced foods, and that almost 30 percent of shoppers would change stores if their primary supermarket did not offer local products.

    In addition, according to the story, "Shoppers indicated they would spend more on local groceries if retailers provided better education about the food’s origin and displayed local products more prominently."

    The story goes on: "While most shoppers opt for the one-stop convenience of a big-box retailer, they tend to question the authenticity and origins of its local food selection. Consumers ranked farmers markets and farms as the most trustworthy source of local food, followed by natural food markets, locally owned supermarkets, national grocery chains, big-box retailers and on-line grocers."
    KC's View:
    Not sure about this. I think people say they'll do something, and they mean it, but I'm not persuaded that this is as big a trend as some would suggest.

    Published on: February 13, 2013

    The Consumer Goods Forum (CGF) said yesterday that its managing director, Jean-Marc Saubade, is leaving the organization, effective March 12.

    While CGF officially said that Saubade's departure was amicable, "in keeping with the Forum’s overall planning and in light of Jean-Marc’s desire to pursue other interests," sources within the CGF membership tell MNB that he was, in fact, fired "in disgrace" because of what was seen as incompetence in running the organization, including running up costs on things like first class airfares.

    CGF said that it will "initiate a search for a new Managing Director and has appointed a small interim taskforce from its membership to provide oversight of the Forum’s business during the transition period."

    Saubade was the third managing director since 2004 to run the organization, which used to be called CIES.
    KC's View:
    I imagine that there are champagne corks popping at CGF's headquarters, where there was little affection for the departing managing director, who apparently broke the camel's back when it was seen by Japanese members that he was not paying sufficient attention to the upcoming summit in Tokyo.

    I'm told that Saubade, who was being paid the equivalent of in the neighborhood of a million dollars a year, and who may be getting a big severance payout, earned the enmity of many by not paying attention to most of his members (save for a few big manufacturers, such as Coke, Nielsen and Unilever) and not providing any leadership within the organization.

    And I can tell you from personal experience that he had no interest in press coverage of CGF's annual summit; I was essentially dis-invited last year after having covered the event for more than 15 years. (I was practically the only US writer who actually paid consistent attention to CIES and then CGF, because I thought they did an interesting job of intellectually challenging their membership with thought-provoking programs.) Does this mean I have a bone to pick with Saubade? Sure. I'll cop to that, in the interest of transparency.

    But mostly, I'm just glad that the good folks who work at CGF are rid of a leader who did little leading. I hope that the next managing director is an improvement.

    Published on: February 13, 2013

    The Chicago Sun Times reports that "Maker’s Mark bourbon is being watered down slightly to stretch supplies of the liquor," and now will be "distributed at 42 percent alcohol by volume, down from 45 percent alcohol, or 90 proof."

    Chairman emeritus Bill Samuels Jr. says in a letter posted on the company's website that the decision has been made because of a national bourbon shortage, but that "every batch at 42 percent ABV had the same taste profile that we’ve always had... there’s no difference in the taste."
    KC's View:
    Not being a bourbon drinker, I'm reasonably sure I could not tell the difference. But I will say that I thought that Samuels made an important point at the conclusion of his posted letter...

    "I can’t thank you enough for taking the time to write. It shows that you care about Maker’s Mark, and that’s what we’ve been striving for over the past 50 years. I hope you’ll give us the chance to continue earning that devotion and allow us to prove that we didn’t screw up your whisky. All the best.”

    In the end, this is as much about brand equity as brand purity. I'm going to work on the assumption that the Maker's Mark folks believe that the taste actually is the same, or they would not be watering down the booze. But it is critical to recognize that when people express complaints and/or reservations, it is because they are passionate about the brand. You can't buy that kind of devotion. But you do have to nurture it.

    Published on: February 13, 2013

    AdWeek reports that American Express is rolling out a program that will allow cardholders to link their accounts to Twitter and "tweet hashtags to receive merchant offers. Now, less than two weeks after Facebook and Discover partnered on the offline Facebook Card, American Express is taking Twitter a step further.

    "Starting today American Express card members can link their Twitter accounts with their American Express accounts and tweet specified hashtags to actually buy products on the social network. The program is the latest in a spate of partnerships American Express has executed since 2011 leveraging its Card Sync technology—connecting card members with their Foursquare, Facebook, Twitter and Xbox Live accounts. But those programs have all only delivered deals, not actual goods. Consider this launch Card Sync 2.0."

    When the program launched this week, the story says, "Card members who have opted in can purchase a $25 Amex gift card for $15. On Wednesday five more products will be added: a $149 Amazon Kindle Fire HD, a $179 Sony Action Cam and waterproof headband mount, an $80 Urban Zen bracelet designed by Donna Karan, a $179 Microsoft Xbox 360 (including a 3-month Xbox Live subscription, two game tokens and a $29 Xbox controller). Those products will be available until March 3 if they're not out sold out by then."
    KC's View:

    Published on: February 13, 2013

    This is the kind of story that one runs into while in Las Vegas...

    "Grocery store gambling is undergoing a major overhaul in the Las Vegas Valley as Golden Gaming prepares to spend millions of dollars renovating all of the region’s supermarket casinos," the Las Vegas Sun reports.

    Ten gaming parlors are scheduled to be upgraded this year, with another 70 slated to improved over the following 24 months.

    According to the story, "Game banks at most supermarkets feature older machines, mostly video poker, in open areas," while "the new salons feature enclosed rooms with updated games and modern décor."

    This is, apparently, a pretty big business: "Golden Gaming operates more than 2,000 slot machines at Vons, Smith’s, Albertsons and other grocery stores statewide," the Sun writes.
    KC's View:

    Published on: February 13, 2013

    • Last night in Las Vegas, Kevin Doris, chairman/CEO of Gerland's Markets, was presented with the Clarence G. Adamy Great American Award, annually given to "individuals whose leadership best exemplifies involvement in public affairs as a citizen or an industry representative."

    • Weis Markets announced it will open two new stores in Baltimore County on Sunday, March 3 - a 55,476 square foot unit in Towson, and a 58,027 square foot store in Woodlawn.

    According to the announcement, "Weis Markets invested a total of $14 million in the two stores, which will employ 400 associates from the Towson and Woodlawn communities. Both locations will feature large fresh departments, including a 600-item produce department with a greater selection of organic produce, a full-service pharmacy, service meat and seafood departments and a large deli/ food service department."

    • Frederick Scott Salyer, popularly described as the "tomato king," has been sentenced to six years in federal prison following his acceptance of a plea bargaining deal after he was indicted on racketeering charges related to his selling of sub-standard tomato products at inflated prices, plus his efforts to squash competition.

    However, Salyer did not get fined by U.S. District Judge Lawrence K. Karlton, who said that Salyer was "broke."
    KC's View:

    Published on: February 13, 2013

    There has been some debate here over the past few days, much of which has surprised me, about the efficacy of a revitalization program developed by Jim Donald, the former CEO of Pathmark, Starbucks and Haggen, who is now CEO of the Extended Stay America hotel chain.

    The program is called "DANCE," which stands for...

    • Delighting guests through property refreshes and enhanced service.
    • Activating associates and preventing slack.
    • Neutralizing costs through cost-containment measures.
    • Caring for the community of both guests and employees
    • Expanding revenue.

    The debate was ignited by MNB user Michael Schillo, who wrote, in part:

    DANCE is dis-ingenious.  Another corporate acronym that is aimed to motivate the troops….when in all reality motivation comes from within.

    Well, a number of folks who have worked for Jim Donald over the years leapt to his defense, praising his leadership and communications skills. Here's yet another one, from MNB user Bryan Nichols:

    I remember early in my career volunteering to do a market visit with Jim on a Sunday.  By the time I got to work Monday morning, Jim had left a terrific letter on my desk thanking me for my help.  That’s the kind of active and positive leader he is.  In an industry where the leadership sometimes deserves criticism, Jim is the model for great leadership.

    Which has led Michael Schillo to respond this morning:

    You and others are missing the point. Jim Donald may be the greatest retailer ever, but acronyms are disingenuous.

    They are created to motivate…when in reality they come across as fake.


    In a lot of ways, I am sympathetic to Michael's position on this. I'm by nature a skeptical person, and in most cases I probably would be neither impressed nor wooed by an acronym. I'm just not that guy.

    But...

    I think that Michael misses an important point.

    In this case, I suspect that the acronym does not seem fake to the people at Extend Stay America because the person who developed it doesn't have a fake or insincere bone in his body.

    As I've often said here and elsewhere, I believe in the power of story. I believe that more businesses would benefit from using the power of narrative to explain their missions and motivate their people. In this case, "DANCE" isn't just an acronym - it is a word that tells a story, and that, as I said a few days ago, implies both action and joy.

    That's why I disagree with Michael on this one. And I think in the end, that's why there's been such an outpouring of support for Jim in the face of his criticisms. he connects with people, in a visceral, authentic way.

    And that, in itself, is a great story.




    On another matter...

    Yesterday, I got an email from an MNB user who said he was sending me a recipe for Brussels sprouts that he thought would overcome my utter distaste for the vegetable.

    I thanked him for it, though I'm not sure I'm going to use it.

    However ... what I did not do was post the recipe, which led to dozens of emails yesterday asking, and sometimes outright demanding, that I post the recipe.

    So here it is...compliments of MNB user Mike Burrington...

    Brussels Sprouts w/Pecans and Dried Cranberries

    Ingredients:
    1 pound fresh Brussels Sprouts, rinsed and trimmed
    3 ounces coarsely chopped pecans
    3 tablespoons unsalted butter
    1/4 teaspoon kosher salt
    1/4 teaspoon freshly ground pepper
    4 ounces coarsely chopped cranberries


    Directions:

    Slice the Brussels sprouts using the thinnest slicing disk of a food processor, or a knife or mandoline.

    Set a 10-inch straight-sided sauté pan over medium high heat and add the pecans. Cook, stirring continually, until the pecans darken in color and begin to give off a toasted aroma, approximately 2 minutes. Add the butter to the pan and stir to combine.

    Once the butter has melted, add the Brussels sprouts, salt and pepper, and cook, stirring continually, until the color brightens and the sprouts are just tender, approximately 6 minutes.

    Remove the pan from the heat, add the cranberries, toss and serve.


    I thank Mike for this, and hope everybody enjoys the recipe.

    But there is no way I'm going to make this.

    Because not only do I hate Brussels sprouts, but I also don't eat nuts, including pecans.

    My loss.
    KC's View: