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: August 14, 2013

    Did you know that there is a federal Raisin Administrative Council? That runs the US National Raisin Reserve?

    Yup.

    "The Daily Show with Jon Stewart," with John Oliver, last night had a terrific story about Marvin Horne, a California rancher who is engaged in an ongoing battle against the government over its policy of confiscating a percentage of his crops as a way of regulating supply, demand and prices.

    It is a very funny - and fairly perceptive - piece about the intersection of government, agriculture and the economy.

    Check it out at left or here.

    KC's View:

    Published on: August 14, 2013

    Nielsen is out with a new survey about corporate social responsibility, concluding that "half of all respondents (50%) said they would be willing to reward companies that give back to society by paying more for their goods and services—up from 45 percent in 2011. The percentage of respondents who agreed increased among males and females and all age groups covered. While respondents under age 30 are still the most likely to say they’d spend more, the attitudes among respondents ages 40 to 54 are shifting most rapidly.

    "Among consumers ages 40-44, for instance, 50 percent agreed that they would spend extra for goods and services from companies giving back to society, up from just 38 percent two years ago."

    “While cause-marketing programs seem to resonate most strongly among younger respondents, the rapid change in sentiment among middle-aged consumers expands the cause opportunity for brands,” says Nic Covey, vice president of corporate social responsibility at Nielsen. “Today, brands can confidently focus purpose messaging on both younger and older consumers.”

    The full report can be downloaded here.
    KC's View:
    I tend to think that such studies are a little overstated, if only because people will sometimes give themselves a little more credit for socially responsible consuming behavior than they deserve. But I do think that the study is onto something here ... I'd rather buy American, I'd rather buy local, and I'd rather do business with companies that invest in their communities as opposed to those that do not. But I recognize my inconsistency - I also often do my shopping on Amazon, just as a matter of convenience.

    Published on: August 14, 2013

    A new study from Market Force Information,a global consumer intelligence company, suggests that 96 percent of US consumers are buying private label groceries. "Of the categories studied, dairy products were the most frequently purchased private label groceries, while snacks ranked second, and cereal and cleaning supplies tied for third," the report says.

    According to the study, "Eighty-three percent of consumers indicated that they sometimes buy private label brands if the product is better or it offers a higher value than the national brand alternative in a particular category. Thirteen percent said that they always buy private label if one is offered in their desired product category, and only 4% are either unaware of private label products or never purchase them because they believe national brands offer a better value and product."
    KC's View:
    No real surprise here, though the number is a little higher than I might've expected. Retailers have gotten smart - they've realized that their success is keyed to offering products and services that the competition does not offer, and having a strong, vital and growing private label program is critical to such a strategy.

    Published on: August 14, 2013

    Thomas Wenning, the longtime executive vice president/general counsel for the National Grocers Association (NGA), said yesterday that he will retire from the trade association, effective December 31.

    Wenning took on his current role at NGA when the National Association of Retail Grocers of the United States (NARGUS) and the Cooperative Food Distributors of America merged on October 1, 1982. Prior to joining NGA, he was a partner for 9 years with his father-in-law, Henry J. Bison, Jr., in the law firm of Bison and Wenning that provided Washington, DC representation for NARGUS, National Food Brokers Association, and National American Wholesale Grocers Association.  
    KC's View:

    Published on: August 14, 2013

    Marketing Daily reports on new research from Mintel saying that "while just 7% of Americans identify themselves as vegetarians, 36% now say that they've eaten such meat alternatives" as tofu, tempeh and seitan.

    However, it appears that many consumers are not using meat alternatives as actual meat alternatives: "Fewer than half of consumers who use so-called meat alternatives are actually using the products in place of real meat, and 16% are using the products alongside meat offerings. Health, price, variety and convenience are driving meat-eaters to explore what Mintel food and drink analyst Beth Bloom dubs 'new-found protein superpowers'."

    This is, in fact, a growing category, as Marketing Daily writes that "sales of meat alternatives in traditional channels, natural supermarkets and specialty supermarkets grew by 8% between 2010 and 2012, to $553 million." But, as the story makes clear, "three-quarters of Americans still aren't trying meat alternatives. Sixty-seven percent of non-users indicate a preference for real meat; 34% say they don’t care for the taste of meat alternatives; and 20% don’t like the texture."
    KC's View:
    I always get a little worried when I'm part of the majority, but in this case, I have to admit that I'm solidly in the non-user category. I'm eating less meat than I used to, but I'm trying to eat more fish ... which I think of as the best sort of meat alternative.

    But that's me.

    Published on: August 14, 2013

    The Associated Press has a piece about how the nation's major drugstore chains are changing their approach to business, becoming more health and lifestyle oriented as they look to expand their appeal to shoppers.

    Examples:

    • "Rite Aid Corp., the nation's No. 3 chain, has converted more than 900 of its 4,615 locations to a "wellness" format it introduced in 2011. The stores offer organic soups, pastas and juices and a line of home fitness equipment including yoga mats and dumbbells that Rite Aid helped design. They also feature employees equipped with iPads to find and print coupons for customers, look up information on vitamins or enroll customers in services like automated pharmacy refills. Additionally, Rite Aid started a program in March that allows customers at about 70 of its stores to connect remotely with doctors for a video or phone consultation covering a range of ailments from allergies to the flu. The 10-minute virtual consultations with physicians, who are contracted by Rite Aid, cost $45. That compares with the more than $100 someone without insurance could pay for a doctor visit."

    • CVS Caremark ... runs more than 650 MinuteClinics that are staffed by nurse practitioners or physician assistants and handle largely minor illnesses like pink eye. CVS also offers acne consultations and monitoring of chronic conditions such as diabetes. The company aims to operate about 1,500 MinuteClinics by 2017 ... The chain, which has more than 7,500 stores, also has introduced an urban store format stocked specifically for the needs of nearby customers at about 450 locations. That means providing more space for diapers and household products in areas where there are fewer grocery stores. These stores also peddle 'grab-and-go' meals like sandwiches and salads for customers who treat their locations more like a general store."

    • "For its part, Walgreen Co. has opened 11 flagship stores across the country that offer extras like the barista-prepared coffee, juice and smoothie bars, and boutiques that provide services like eyebrow grooming and advisers who dole out information on beauty products. Some even come with humidors to hold cigar collections ... Walgreen also is expanding the scope of the small clinics it has in the back of hundreds of its stores to include the diagnosis, treatment and monitoring of chronic diseases such as diabetes that are typically handled by doctors ... More broadly, Walgreen has launched a 'Well Experience' format in about 400 of its more than 8,000 stores nationwide. These stores feature expanded beauty options, fresh food and groceries, private rooms for pharmacist consultations and, in some cases, an iPad-toting employee to help customers."

    These strategic moves are seen as "a response to the massive U.S. health care overhaul, which is expected to add about 25 million newly insured people who will need medical care and prescriptions. And drugstores are offering more services as a way to boost revenue in the face of competition from retailers such as Safeway and Wal-Mart that have added in-store pharmacies."
    KC's View:

    Published on: August 14, 2013

    Guiding Stars, the nutrition guidance program developed by Delhaize-owned Hannaford Supermarkets, has expanded into the Canadian province of Quebec, in Loblaw banners that include Loblaws, Provigo and Provigo Le Marche.

    Already featured in 259 Ontario based Loblaw Companies Limited banner stores, Guiding Stars’ expansion into Quebec required translation of all store signs and customer materials into French.

    The Guiding Stars program uses an algorithm to assign qualifying foods with one, two or three stars depending on whether they are good, better or best to eat.
    KC's View:

    Published on: August 14, 2013

    ChicagoGrid.com has a piece about the new Eataly being built in Chicago, a 70,000 square foot complex that - with seven restaurants, a gourmet supermarket and a cooking school - is actually 20,000 square feet bigger than the New York version. The complex, on Ohio Street between Michigan Avenue and State Street, is slated to open in November.

    The current challenge - sourcing local products that will supplement the imported products that will be brought in from Italy. The company anticipates that local farms will see Eataly as a boon for their businesses.

    Next: Hiring the 600 full- and part-time employees needed to make Eataly work. That process begins in earnest next month.
    KC's View:
    I look forward to seeing the new Eataly, though I must admit that I seem to be among the minority when it comes to the New York version - while walking through it, I was simultaneously underwhelmed and overwhelmed. And not really compelled to shop.

    Published on: August 14, 2013

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

    Advertising Age reports that Kraft Foods is looking to reverse the sales declines being suffered by its once hugely popular Jello brand "with a new campaign the marketer says will return the brand's focus to families and fun, ending the recent adult-targeted approach." The campaign, according to the story, "carries the tagline 'Fun Things Up' and will showcase gelatin and pudding. The first TV ad features a dad and his son and depicts the boy going through adult struggles like losing his hair and enduring a tough day at work. The 'chocolatey taste of Jell-O pudding makes up for all of that,' the dad tells his boy over a couple of pudding snack cups."

    According to the story, "The new push is part of Kraft's larger strategy of reinvesting in its stable of classic food and beverage brands that executives feel were neglected when they were part of the larger Kraft Foods Inc., which split in two last October, forming Kraft Foods Group and the candy and snack-focused Mondelez International."

    Whoever came up with an ad suggesting that Jello is an appropriate way to get over male pattern baldness clearly was someone with a full head of hair. Though, I have to admit it is a pretty cute commercial...


    • The Associated Press reports that Coca-Cola "plans to run its first ad defending the safety of artificial sweeteners, a move that comes as the company looks to stem declining sales of diet soda ... It says that diet drinks can help people manage their weight and stresses the evidence showing the safety of aspartame, commonly known by the NutraSweet name."

    The ad is said to be part of a broader campaign engineered by Coke to push back at critics who say that its products do not contribute to consumers' good health.
    KC's View:

    Published on: August 14, 2013

    • Supervalu said yesterday that it has hired two former Kroger executives - John Jefferson to be its new vice president of produce merchandising and Tom Sargent to be its new vice president of meat merchandising.


    • The United Fresh Produce Association announced the hiring of Dr. Lisa Hightower as the organization's new communications manager. Hightower recently completed a PhD at Virginia Tech in agricultural education, and has collaborated on campaigns with national and regional organizations such as Virginia Cooperative Extension, Florida Cooperative Extension, the Federal Emergency Management Agency, and the Centers for Disease Control and Prevention.
    KC's View:

    Published on: August 14, 2013

    We had a piece the other day about how Chipotle Mexican Grill, which long has bragged that it does not sell beef treated with antibiotics, is changing its tune a bit and now will sell "meat from cattle treated with antibiotics because of an illness," though it still will not "use beef from animals that had been given antibiotics to prevent disease."

    Which prompted one MNB user to write:

    So now it's not the "what" that matters, only the "why"?  What a creative distinction.

    The "why" always matters, IMHO. Doesn't mean that the "why" always justifies the "what," but I think that thinking people always consider the context of a decision as well as the decision itself, just to have an understanding of the bigger picture and maybe even some compassion for the people making the decision.

    If you consider only the "what," and not the "why," it seems to me that this propels you down the road to ideology, which is just a substitute for actual thinking.




    Yesterday, Michael Sansolo had a piece about the importance of listening to new ideas, no matter how unlikely, because that's often how we discover the next great innovation; it is critical in any business to not defend the status quo. And I added that it is important to keep in mind "The Old Fart Rule": The likelihood of an innovation succeeding increases exponentially with the number of old farts who refuse to endorse it.

    MNB user Elaine Howard responded:

    You had to know when you said “old fart” that some old fart was going to take offense! I love what you’re saying, but as an industry veteran of 30+ years, I prefer the term “Stink Think”. There are some people, yes, even among the energetic and very wise Millennials, that are nonetheless always the Stink Thinkers. In fact, stink-thinking permeates every age group. I think it’s more due to people settling in to their comfort zones too readily. Some of that comes with age and some of it comes from laziness or lack of imagination, lack of drive, fear, and/or lack of the right corporate culture or corporate sponsor(s) to support their voice.

    I'm perfectly happy to stipulate that "old fart" is a state of mind, not age. Though I also would argue that as one gets older, it becomes increasingly critical to fight the "hey you kids, get off my lawn" impulse.

    MNB user Laura Whisney added:

    All I could think of when I read this article was that America is in trouble with so many old farts in Congress – not forward thinking and unwilling to innovate.




    We've been focusing a lot here lately about how changes in the print media business - the sale, in three days, of the Washington Post, Boston Globe, and Newsweek - reflect greater business realities and what we can learn from them.

    Which led MNB user Brian Blank to write:

    Apropos of not much…do you know how Lou Grant ended up as producer of the WJM news on "The Mary Tyler Moore Show"? He left the newspaper business because he got fed up with all the mergers. (A new axe-wielding station manager was scapegoating Lou, because the sales department “can’t sell the news”.) This was an episode from 1971 that I was watching on DVD last night.  Just kind of made me think about how things haven’t changed as much as we might think.
     
    PS: loved the clip about the digital version of the SF Examiner.  …and it just hit me:  that news report aired 10 years after the above MTM episode.  PPS: The book “Mary and Lou and Rhoda and Ted” gives a ton of background and behind-the-scenes about the show and how it came to be—lots of insight on assembling a great team to turn out a quality product.


    Not to get too deep in the weeds here ... but let's not forget that once "The Mary Tyler Moore Show" ended, Lou Grant (Ed Asner) went off to Los Angeles to become city editor of the Los Angeles Tribune, returning to his print journalism roots. "Lou Grant" was a great TV series ... and I can remember watching it while working as an actual newspaper reporter and thinking that it pretty much got things right.




    On the subject of fair wages, minimum wages, and living wages - and specifically, a New Yorker piece by James Surowiecki that I linked to ( click here to read it), MNB user Ray England wrote:

    Amazing, it seems that Mr. Surowiecki believes that the companies that employ the vast majority of part time workers make plenty of money, even at the low margins in which they operate, they could increase pay rates, they would just have to steadily raise prices to do so. As for consumers, well they would just have to get used to higher prices. What? Really? So just how are folks making low wages supposed to be more prosperous if prices go up to support their wages?

    To illustrate the fact that employment in our economy has shifted from large manufacturing companies with lots of full time workers making relatively high union wages to a present day economy where companies like Walmart, McDonalds and the like employ the vast majority of workers…on a part time basis. Mr. Surowiecki goes back to the 1960’s when the big three auto companies had no problem paying their employees a great wage; after all, they were very profitable. I find it odd that there is no discussion on how the majority of afore mentioned 1960’s power house employers have gone belly up, not even a hint that in part, unfunded 1960’s union pensions had huge negative impact on those companies. But I guess that is beside the point.

    What is missing from Mr. Surowiecki’s illustration of our countries employment shift from manufacturing to service is the why! He does however; have a solution. More Government Spending! To the tune of at least a Trillion dollars on infrastructure, increase the minimum wage, strengthen social-insurance, and expand the earned income tax credit. In other words, more government spending, but hey what’s a few more Trillion? As Dr. Phil would say…How’s that working out for you?

    In my opinion, a Socialist Utopia where Government manages every aspect of everyone’s life is not the answer, it is the problem. There is no doubt that our economy has transitioned from a manufacturing to a service based economy; but why? It’s not that difficult to figure out.

    What happens when huge manufacturing companies can offshore manufacturing to countries with lower wages? They do.

    What happens when these same companies can do business in countries that are tax friendly? They move there.

    What happens when the cost of doing business and obligations to retirement  funds outweighs a corporate entity’s ability to generate enough profitable revenue to cover those obligations and costs?  They go bankrupt (except in the case of GM or Chrysler where the government bailed them out.)
    What is the overall impact on domestic manufacturing jobs when companies can produce goods in other companies and ship them here cheaper than they can make them here? Manufacturing Jobs disappear.

    Now it seems that logic would dictate that manufacturing jobs (where people make things) would produce an economy where there is A: More investment in infrastructure, and B: Create higher paying job opportunity. So how do you get there?
     
    First; how about making the US the most tax friendly country on the Globe? What happens? Companies would move back to the US in droves…..If I can cut my tax obligation in making widgets from 40% to 10%...I’ll do it all day long. Over simplified answer, but it would work.
     
    Want to see what happens when production booms and capitalism rather than socialism takes root? Just check out North Dakota where your average Walmart starts folks off at $17.00 an hour. Why, because due to their oil boom, unemployment is less virtually nonexistent.


    I don't think that Surowiecki was arguing for a Socialist Utopia, though I imagine that it is easier to demonize an argument by using such a phrase. I think he was just pointing out some structural problems with the economy as it currently exists.

    As for government spending, you are right that he seems to advocate the notion that "the government should invest almost a trillion dollars over the next five years in repairing and upgrading the national infrastructure." But I'm not sure that private companies are going to invest in the roads, bridges and other public venues that desperately need upgrading and maintenance; if the government doesn't invest in such things, who will?
    KC's View: