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    Published on: September 16, 2013

    At the end of last week, "The Daily Show with Jon Stewart" featured a taped report from correspondent Aasif Mandvi that cast a humorous spotlight on the antipathy - or maybe it is downright hostility - that exists between Monsanto and many of the nation's farmers.

    It's worth taking a look at, and you can watch it here.
    KC's View:

    Published on: September 16, 2013

    The Los Angeles Times reports that Walmart has opened a 34,000 square foot Neighborhood Market store in the Los Angeles Chinatown neighborhood.

    The store has been highly controversial since it was announced back in 2011. Walmart and its supporters have said that it brings affordable shopping options to a neighborhood that desperately needs them. But opponents have said that it is out-of-character for Chinatown and is likely to hurt small, independent businesses in the area.

    While opponents have been loud, they have not been very effective. For example, in 2012, the Los Angeles City Council voted to temporarily ban large chain store from opening units in the city’s Chinatown neighborhood, but they were a little late - because Walmart obtained the necessary permits to open a grocery store there the day before the vote. Walmart had announced its intentions a month ago. Opponents of the store say they plan to file an appeal of the retailer’s construction permits.
    KC's View:
    I don't want to minimize the importance of allowing LA's Chinatown to maintain its character. But, as I understand it, there is a Subway next door and a Burger King across the street. And the store is at the corner of Cesar E. Chavez Boulevard, for crying out loud.

    This has always been about politics, not ethnic identity.

    Published on: September 16, 2013

    Columbus Business First reports that Giant Eagle has announced that it is "reducing prices on 2,000 products, an estimated value of $40 million in reductions, effective Thursday. This follows a $70 million cut in prices on 3,500 items in March."

    According to the story, "The March round of cuts generated favorable results for the grocer, so it opted for another round. That first round of cuts was to regular-purchase items like dairy, lunch meats, frozen food. The new round includes more reductions in those categories as well as price cuts in produce, fresh chicken and healthy and beauty among other areas."

    “We believe (the recession) forever impacted the consumer’s view of price and value,” John Tedesco, senior vp/merchandising, tells Business First. “Customers are willing to shop all channels now. They’re willing to go to the deep discounters. They’re willing to make multiple trips.” And so, Giant Eagle recognized the continuing need to demonstrate that its stores should serve as a one-stop shop for value-minded customers.
    KC's View:
    It is instructive that, years after the recession supposedly "ended," companies like Giant Eagle - which is one of the best operators anywhere - are still implementing these kinds of programs ... which tells you that while some big companies (especially hedge funds and brokerages) may be generating big profits, there are a lot of places in this country, and a lot of people, who are not feeling any sort of bounce. I also think that this has as much to do with competition as the economy...

    Published on: September 16, 2013

    The Washington Post reports that Trader Joe's has informed part-time employees working less than 30 hours a week that they are losing their health insurance benefits, and instead will be given $500 to help them purchase coverage from the new public insurance marketplaces that are coming online.

    “Depending on income earned outside of Trader Joe’s, we believe that with the $500 from Trader Joe’s and the tax credits available under the ACA (the Affordable Care Act, widely known as Obamacare), many crew members should be able to obtain health-care coverage at very little, if any, net cost,” the company said in a statement to Bloomberg, which writes that "the move makes Trader Joe’s the latest U.S. employer to cut benefits or reduce hours in response to the 2010 act, which requires companies to offer affordable coverage to full-time workers starting in 2014. Trader Joe’s, the owner of about 400 stores, said most of the affected employees will find a better deal on the health-law exchanges, where buyers may be eligible for federal subsidies."

    Bloomberg notes that Trader Joe's is one of several companies - UPS and IBM among them - that "have pulled back on health benefits citing the law’s expenses and new insurance options among their reasons."

    And the Washington Post writes, in analyzing the move: "As for what Trader Joe’s decision means for the health-care law, that’s not clear either. On the one hand, it likely makes the health law more expensive: Trader Joe’s is essentially shifting the costs it used to pay for health insurance onto the federal government. On the other hand, bigger marketplaces are good for the health law. More subscribers make it more likely that insurers will want to sell and, if Trader Joe's employees tend to be younger, they’ll likely help hold down the cost of premiums there."
    KC's View:
    Any discussion of this subject, I suspect, is going to veer into partisan politics and therefore not be very illuminating.

    It strikes me that several things are clear about the Affordable Care Act - one of which is that very few people actually understand it. (I count myself among this group.) Polls show that relatively few people understand it, few people think it will reduce costs, and few people believe it will improve the quality of their care. I've seen some reports that suggest that, in fact, heath care cost increases are beginning to flatten out. Some people would dispute this, and would argue that even if this is happening, reducing the rate of cost increases is not exactly the same as reducing costs. I also think that even supporters of ACA would concede that what they see as the bill's advantages have not been clearly communicated (and opponents would say that's probably because there are not any advantages).

    My feeling is this. ACA is the law. At best, it is a flawed law, and I would hope that the flaws can be fixed by the government in a way that is thoughtful and considered and responsible. (I recognize that this is likely to be a fruitless hope.) I also think that there are some things that have been positives, so far - mandating the coverage of pre-existing conditions, and the coverage of young people until age 26. (Both have been significant to my family.)

    I also would submit that Howard Schultz, CEO of Starbucks, has a point when he makes the following point in an interview that runs today in USA Today:

    On balance, I would say the health care law, to provide health insurance for those people who did not have it, was a good thing for the country and a good thing for those people, and I would encourage them to find ways to provide the insurance and not figure out a way to either lower the hours or get around the system .... I think we have a greater responsibility beyond just the (profit and loss) of our business, to do the right thing not only for our employees, but the communities we serve, to try and make a difference beyond just making money. I say this through the lens of being a CEO of a public company, recognizing that I have a significant fiduciary responsibility to make a profit and build shareholder value. But after 30 years of being in this seat, what I've learned is that we can make a profit and perhaps do even greater by also demonstrating to multiple constituencies that we mean well in the world.

    Published on: September 16, 2013

    The Charlestown Regional Business Journal reports that Piggly Wiggly Carolina Co. is selling 22 stores to Bi-Lo Holdings, parent company to Bi-Lo and Winn-Dixie.

    In addition, Piggly Wiggly is selling seven stores - one of which is still being built - to Harris Teeter, which is itself in the process of being acquired by Kroger.

    Terms of the deals were not disclosed.

    “This really reflects that there’s been a dramatic acceleration of M&A activity in the grocery industry, particularly in the last eight to nine months. ... M&A activities are at unprecedented levels in our industry right now,” Christopher Ibsen, Piggly Wiggly Carolina Co.’s corporate affairs director, tells the paper, adding that the company is not looking to sell any other stores, nor is it facing bankruptcy.
    KC's View:
    The question I keep asking is, what's the next M&A shoe that is going to drop? And how many shoes are in the current economic closet?

    Published on: September 16, 2013

    • The Denver Business Journal reports that there appears to be a growth in grocery delivery services in Colorado, with a number of small companies - such as Mile High Organics of Denver and Door to Organics - embracing delivery as way of reaching out to convenience-minded and health-conscious shoppers who are interested in locally-sourced food.

    Kroger-owned King Soopers also has seen its delivery business grow as the interested customer base has expanded. “In the beginning, it was a community service for those unable to get fresh groceries, like the elderly or the sick,” says spokesperson Kelli McGannon said. “But now it’s people short on time more than anything else. That convenience is driving growth — it’s almost like another store front.”
    KC's View:

    Published on: September 16, 2013

    USA Today reports that Toys R Us has announced that it is "offering a 10% cash reward up to $100 on certain toy purchases through Oct. 31 for its rewards card members and will extend the deadline for holiday returns through Jan. 25 ... The company said it will give customers their cash-back earnings on e-gift cards in November so they can use the money for holiday shopping. Layaway customers can also earn the rewards."

    It was just last week that Walmart said that it believed that the upcoming end-of-year holiday shopping season will feature a battle that will drive down consumer prices in the category.


    Reuters reports that "Shoppers Drug Mart Corp shareholders on Thursday voted overwhelmingly in favor of Loblaw Co Ltd's C$12.4 billion ($12.02 billion) bid to buy Canada's largest pharmacy chain. The deal with Loblaw, Canada's largest food retailer, was approved by 99.89 percent of the votes cast by shareholders at a special meeting.

    "The pending transaction is Canada's biggest merger deal so far this year and comes at a time when Canadian grocers are under increasing pressure from U.S. competitors like Wal-Mart Stores Inc, which has ramped up its grocery offerings, and newer entrant Target Corp, which offers a smaller selection of food products."
    KC's View:

    Published on: September 16, 2013

    • Supervalu last week named Mickey Nye to be president of its Farm Fresh chain in Virginia. Nye is the former vice president of operations for Supervalu's Shoppers Food & Pharmacy chain, based in Baltimore.

    Nye is the fourth president of the chain in four years. She replaces Bill Parker, who lasted less than a year after succeeding Gaelo de la Fuente, who held the job for less than three years after replacing Ron Dennis, who retired after more than a dozen years in the job.
    KC's View:

    Published on: September 16, 2013

    • Jon Flora, president of Kroger-owned Fry's Food Stores in Arizona, has passed away after suffering a heart attack. He was 58.

    Flora, who was familiar to customers because of his role as the public face of Fry's, was a longtime Kroger employee - he started as a clerk and "bottle boy" at its Dillons stores in 1971. And he was highly thought of both inside and outside the company for his volunteer efforts, particularly with hunger-related charities.

    Kroger Chairman/CEO Dave Dillon released a statement that said, in part: “We are deeply saddened to lose Jon, our dear friend and extraordinary leader ... Jon leaves a legacy of enthusiasm and passion for doing what’s right for our customers, our neighbors and our associates. He touched the lives of countless people in our company as well as throughout our industry and community. ... Our thoughts and prayers go out to his family and friends.”
    KC's View:

    Published on: September 16, 2013

    Regarding the role of lobbyists in the US and the impact they have on the political system, one MNB user wrote:

    My opinion:

    Money to buy political favors in foreign countries we call bribery. Money to buy political favors in the USA we call a campaign contribution. Looks like a duck, quacks like a duck...


    This subject came up last week when I talked about the new book by Mark Leibovich, "This Town: Two Parties & A Funeral, Plus Plenty Of Valet Parking In America's Gilded Capital." (There were business lessons, too.) Which led MNB reader John Tieszen to write:

    I am in the middle of reading "This Town" and I totally agree with your take. It is, as you say, both incredibly sad and incredibly funny, at the same time. I heard an interview with Mark Leibovich and the commentator made the point that the only people truly angry with the author were those people who were not named in the book!

    From another reader:

    I loved this book, but wish it weren’t true.  Very accurate portrait of the DC snake pit based on my own experience there working with lobbying, law and PR firms, government agencies and political campaigns.  Sadly, it is only getting worse.  More sociopaths and narcissists per capita than anywhere else in the country, hands down.




    Regarding the passing of auto salesman Cal Worthington, MNB reader Kevin Bamford wrote:

    I used to visit my father on the west coast for 2 weeks every summer in the 70’s and the one thing I always remembered was the “come see Cal” jingle.  In fact, I was singing it on my riding lawn mower last Sunday – must be synchronicity.

    And from another reader:

    I missed that Cal passed away.  What a character.
     
    One thing that an English major told me in college is that his ads were always in iambic pentameter.  His jingle, which you printed yesterday, appears to be in that format, but I haven't had to recognize that in decades. (Sorry, Mrs. Pratt - my High school teacher.)


    Another reader chimed in:

    I just had to respond about the RIP for Cal Worthington.  I grew up in So Cal and his commercials were a great source of hilarity in our house.  You missed the part of the jingle where he would “stand upon his head until his ears were turning red,” complete with Cal in his ever-present cowboy hat, standing on his head.
     
    When my husband and I left So Cal, everywhere we lived we found the “Cal Worthington” of the area.  There never seems to be a shortage of retailers, in all lines of work, who will do wacky things in their commercials.  Oddly enough, most of them are truly honest, trustworthy, and nice people.
     
    Rest in peace, Cal.  Even though your commercials made me wince, I still read the posting with a big smile!

     



    MNB the other day took note of an Associated Press report that a federal judge in San Francisco ruled that Abercrombie & Fitch was wrong when it fired a Muslim employee for wearing a head scarf. The retailer had said that the scarf violated its dress code and would negatively impact sales, but the judge said the firing violated anti-discrimination laws and that there was no "credible evidence" that the scarf would hurt sales.

    I commented:

    Interesting story, and one that suggests so many questions. I'm curious, for example, if the employee only started wearing the scarf after being hired, or whether the scarf was work during the job interview and, if so, why the employee was hired to begin with. Not that I'm agreeing with A&F on this one ... I think that an argument can be made that not only would the scarf-clad employee not hurt sales, but might even signal something important about inclusivity at the retailer. But the big message here is how the demographic world is changing, and how businesses have to think hard, act wisely, and be careful.

    MNB reader Andy Casey wrote:

    Your comment about a move to “signal inclusivity” at A&F made me laugh … wasn’t this the CEO who said they didn’t want to appeal to ugly people or something similarly stupid?  I’m thinking inclusivity isn’t even in his vocabulary much less his stores.

    Good point. I was being kind.

    And from another reader:

    We’ve already heard much about how A&F only wants “certain people” as its customers, trying to create an air of exclusivity…..it’s not surprising to me that it would attempt to apply that same thinking to its hiring practices.




    Regarding questions about food safety practices and the meat industry, MNB reader Mike Franklin wrote:

    I remember reading, in your newsletter, about the move by USDA to privatize inspectors and to begin inspecting meat plants off-shore. My comment to you then, after reading the pros and cons of the issue, was, “good luck meat-eaters.” While I may be a little smug, because I source all of my meat locally from small farmers that I have a direct relationship with, I still am amazed at the confidence citizens have in the performance of the USDA and FDA.




    One MNB user had some thoughts about the acquisition of United by Albertsons:

    United runs well merchandised stores with great customer service.  Two areas that Albertson’s has not been known for for many years.  If United is actually left alone as an independent business unit, there is hope for them.  But…if Albertson’s applies their operational muscle on the organization, cutting store labor (as is often the case), United will become another mediocre chain.  Remember, Albertson’s just pulled the plug on their loyalty programs because they couldn’t figure out how to leverage what their customers are telling them, to provide more relevant pricing, promotions and merchandise.  Their focus on “one size fits all” is completely counter to what is needed to thrive with today’s demanding and empowered consumer. 
     
    Time will tell on this acquisition, but if I were to place a bet, it would be a $2 win ticket on Kroger, with possibly a long-shot bet of $2 to show on United.





    I was whining the other day that a new Christmas ad by Kmart strikes me as way too soon.

    One MNB user responded:

    And the downside of this early for Kmart is?
     
    Note that it’s Kmart’s consumers voicing their opinion on the Kmart Facebook page.
     
    They will be some of the first to use it. Especially on hard to find toys etc..
     
    Same people will complain about how early Christmas items are on the shelves as they put those cute ornaments in their shopping carts in September.


    MNB user Will Weller wrote:

    I'm going to petition the powers that be for a new word in the dictionary.  The word is Hallowgivingmas.  The definition is the ability to walk into a major retailer and purchase either Halloween, Thanksgiving, or Christmas merchandise in August.  No judgements here, it's just the way it is.  Think ahead, adapt to rapid change, or find another strategy.

    From another reader:

    I agree with you ... it is way, way too soon.  I hate the commercialism of Christmas.  With the ease of shopping (online, pre-ordering, brick & mortar) there isn't any reason that Holiday ads should be aired before Thanksgiving.  I'd like to get back to the days where we celebrated each holiday before we moved on to the next one.  Celebrate Halloween, then Thanksgiving and only then start into the holiday season.  For example, when you walk into a Home Depot, you shouldn't see fake Christmas trees for sale until the day after Thanksgiving.  What happened to us?  We've become so entrenched into the all mighty dollar and the need to 'get out there early and get as much money as you can'.  I know many businesses make the bulk of their money in the last quarter of the year, but that doesn't make it right to advertise before its time!

    And another:

    I didn't see the Kmart ad, but I did receive an email from Walmart on Monday September 9th highlighting their holiday layaway program. I agree-way too early when the temperature reads 95...

    And still another:

    I stopped in Costco Sunday. It was fully merchandised with Christmas trees at the entrance and 3 aisles of paper, bows and other Christmas items. I won't be back there until January...

    MNB reader Laura Price wrote:

    I hate that we rush the Christmas holiday in the US, however, I think there is probably some good shopper insight behind Kmart's move… their target customer for the layaway program has few paychecks arriving between now and 12/25.  Maybe now IS the time to engage them?  Good marketing means knowing the difference between your own habits and those of the shopper.  Usually I think you see that very clearly, Kevin, so I felt compelled to weigh in!

    And another:

    I am getting old and curmudgeonly.  Remember when the Christmas season started with Santa arriving  AT THE END of the Macy’s Thanksgiving Day Parade?   And Black Friday actually WAS Black Friday?  Then Thanksgiving sorta got pushed out of the way and the season started right after Halloween  (buying leftover Halloween candy AND candy canes).  Well, at least they waited until after Labor Day and shoppers didn’t have to decide between school supplies and the latest toy offerings.

    Next thing you know, there will be overlapping seasons of baseball, football, basketball and hockey!





    We had an email last week in which a reader challenged my policy of only having moderated emails, as opposed to a message board that allows people to say anything they want.

    Which prompted MNB reader Jeff Gartner to write:

    Kevin, please NEVER allow all comments from your readers to be posted without your editorial acceptance. NEVER.

    Forums that don't limit their comments, especially sites who don't prevent anonymity, are painful to read … they have way too many trolling and disrespectful comments. 

    If someone wants the unlimited ability to comment, let them create and distribute their own blog.

    I love Seth Godin's daily blog, and he doesn't have comments at all.


    There were a few people who felt that my comment that "this is the way I always have done it" actually was at odds with my usual attitude, which is that sacred cows make the best hamburger (as Mark Twain once said). That's a fair criticism ... I would only respond that I moderate the "Your Views" section not because I always have done it that way, but because I believe it is the right thing to do, and what most of MNB readers want.



    Finally ... I got a lot of email from folks who really enjoyed the discussion we had last week about the use of cell phones and the impact on some people's dating habits. (This, despite the fact that they were dismayed by the opinions expressed by one person who struck many as being a Neanderthal. And yes, to those of you who asked ... this person is exactly who you thought it was.)

    All I can say is that I thought it was an interesting conversation that ran its course. And I'm glad I could give you value for your entertainment dollar.
    KC's View:

    Published on: September 16, 2013

    In Week Two of National Football League action...

    Carolina 23
    Buffalo 24

    Cleveland 6
    Baltimore 14

    Minnesota 30
    Chicago 31

    Dallas 16
    Kansas City 17

    Washington 20
    Green Bay 38

    Tennessee 24
    Houston 30

    Miami 24
    Indianapolis 20

    San Diego 33
    Philadelphia 30

    St. Louis 24
    Atlanta 31

    Detroit 21
    Arizona 25

    New Orleans 15
    Tampa Bay 14

    Denver 41
    NY Giants 23

    Jacksonville 9
    Oakland 19

    San Francisco 3
    Seattle 29
    KC's View: