retail news in context, analysis with attitude

...with brief, occasional, italicized and sometimes gratuitous commentary...

• The Wall Street Journal reports on the modernization process going on at Hillshire Brands, where they decided to change their approach to lunch meat because of declining sales. Consumer research showed that people wanted packaging that was more transparent and allowed meat to be "fanned out," rather than wadded up; packaging that emphasized freshness and the company's brand name; and thin-sliced meat that is both more textured and moister.

The goal, according to the story, is to create both a reality and perception that is higher quality, because that's what consumers appear to want.


• The Los Angeles Times reports on how drug stores are changing their approach as a way of attracting more customers to shop more often.

"Walgreens, for example, is opening glossy stores that feature sushi chefs and enormous alcohol selections," the Times writes. "CVS stores have added fresh sandwiches and produce. Rite Aid has been revamping its locations and bringing in packaged organic and gluten-free food."

The reason? Drug stores perceive themselves as not just competing with each other, but also with mass merchants that sell many of the same items they do, as well as with online merchants that can beat them on cost and that appeal to tech-savvy younger shoppers.

Not just young tech-savvy consumers. I've begun ordering a bunch of items from Amazon that I used to buy at my local CVS because I realized they were cheaper and I could use Subscribe and Save to make sure they'd be replenished on a regular basis. I still use the CVS, which is next door to MNB Global Headquarters, for impulse items and prescriptions ... but for some stuff, it has just become irrelevant.


Bloomberg Business Week reports that hedge fund manager Bill Ackman, who is JC Penney's largest shareholder, has seen the stock value of the company drop by 48 percent in the past 2.5 years. Ackman's "best shot at salvaging his investment," the story suggests, "is to push the department store to go private before it runs out of cash and loses another billion dollars for shareholders."

The value of JC Penney has dropped lately because of the efforts of new CEO Ron Johnson to switch from a coupon and promotion-based marketing strategy to EDLP, a strategy that largely has resulted in the loss of customers and sales.

However, one analysts suggests that such a move might be too little too late - that JCP already may have lost much of its customer base for good.
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