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    Published on: September 19, 2013

    This commentary is available as both text and video; enjoy both or either. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

    Fascinating story from Bloomberg the other day about something called the Live Well Collaborative, which is made up of about a dozen companies including Procter & Gamble, Boeing and Mondelez International, aimed at developing both products and marketing approaches to appeal to the over 50 crowd.

    This demographic group has a lot of money to spend - about $3 trillion a year in the US alone. So the Collaborative is motivated.

    The group, working with the University of Cincinnati, has come up a sense of how to market to these aging consumers, and what their priorities are:

    "They’ve discovered that seniors treat their pets more like grandchildren than children, and spoil them accordingly," the story says.  "They’ve created biomechanical models of the human hand to understand how hard it is for arthritic consumers to open bottles of P&G’s Tide. And they’ve thought long and hard about how to ease Grandma’s journey through the airport."

    But the problem is that there seems to be a gap between what these consumers need and what they seem to want:

    "What existing products haven’t yet done is create a lasting emotional connection with older consumers, which is the true litmus test of a brand. Nobody aspires to own adult diapers. Boomers don’t want to just spend money on the things they need; they have the dollars and the desire to splurge on the things they truly want."

    The bigger problem is one that, I think, can be ascribed to pretty much every demographic group - there's very little homogeneous about any of them.

    When it comes to the over 50 crowd, which is the one I can speak of with the most personal experience, the simple fact is that we are all very different. I'm 58, and my dad is 87 ... but heaven knows that we have very different needs, interests, desires and issues. You can't speak to us the same way, which means if you want to create an emotional connection to us, or just sell us something, you have to drill down to see where the differences are, not the similarities.

    That's the mark of all smart marketing, isn't it?

    I also think that the challenge will only be greater as time goes on, because while we're getting older, we're resisting being defined that way. Many of us think in terms of plans and goals - not in terms of having "bucket lists" that we need to achieve before we die, but in terms of things that will help define how we live. I know for me, there are only four major league ballparks I haven't been to (in Miami, Tampa, Houston and, go figure, the Bronx), three states I haven't been to (Alaska, Montana and North Dakota), and only one continent - Antarctica. My intention is to do all of those things ... because doing all those things is how I define myself actively in the present, not because I want them listed in my obituary.

    Needless to say, sometimes you have to face reality - we spent some time the other evening with a fellow helping us to figure out long term care insurance, just to make sure that we don't become a burden on our kids when we get older. Of course, I cracked jokes through the whole interview ... even though the guy we were talking to seemed to find it mildly unusual.

    It's no wonder we are hard to market to. But I fully expect that the Live Well Collaborative will keep trying to figure out how to market to the 50+ group, while many of us in that group will keep seeking ways to avoid being defined as being part of that demographic.

    That's what is on my mind this Thursday morning. As always, I want to hear what is on your mind.

    KC's View:

    Published on: September 19, 2013

    by Kevin Coupe

    There have been a number of recent stories in the media - including here on MNB - about the growing popularity of wet wipes, which are being used by some folks instead of toilet paper. "Such wipes," the Cincinnati Business Courier reports, "which have become increasingly popular for people particular about personal hygiene, are often flushed down toilets."

    The problem is that these wipes can congeal with grease and don't dissolve, which means that they can jam up the sewer pumps and have to be cleared by hand.

    The story says that "wet wipes pose problems for sewers from here to London, according to news reports. Earlier this summer, it took 10 days to dislodge a 15-ton clog of flushed wet wipes and grease from a sewer in London. The size of a double-decker bus, the so-called fatberg clog had reduced the flow in a sewer tunnel by 95 percent. It was discovered after people complained their toilets had stopped flushing.

    "Advisory labels about which kinds of wipes are flushable and which aren’t appear on the packaging of brands distributed by Procter & Gamble Co. and the Kroger Co., both of which are headquartered in Cincinnati." And both companies seem confident that their customers are smart enough to know which ones can be flushed and which ones cannot.

    But to be honest, it's that word "cannot" that creates a problem for me. Because while the notion of wet wipes as offering a more thoroughly cleansing experience (I'm trying to be delicate here) might be appealing, they certainly lose some of their appeal if they cannot be flushed down the toilet. If this gets around, it could do some damage to a burgeoning category.

    At least IMHO...
    KC's View:

    Published on: September 19, 2013

    The Grocery Manufacturers Association (GMA) said yesterday that it has launched a website, www.FactsAboutGMOs.org , that it says is "designed to provide consumers, policymakers and the media with answers to their questions about the use of genetically modified (GM) food ingredients."

    “Genetically modified food ingredients are not only safe for people and our planet, but they have a number of important benefits,” says Pamela Bailey, GMA's president/CEO.  “This technology has been used safely in the food supply in the United States for twenty years, and seventy to eighty percent of the food we eat in the United States, at home and away from home, contains ingredients that have been genetically modified.
     
    “We know that some consumers have questions about genetically modified food ingredients.  We built this Web site to help answer their questions about the safety, prevalence and benefits of this important and effective technology."

    According to GMA, the new site "allows consumers to research and verify the safety, prevalence and benefits of genetically modified food ingredients by visiting online information posted by credible and independent sources, including governmental food safety agencies, medical and health organizations, news organizations, food safety experts and non-governmental organizations."
    KC's View:
    Let's be clear. This is pro-GMO propaganda, pure and simple.

    Not that there is anything wrong with that. GMA has some skin in this game. Most of its members probably manufacture products that contain GMOs, and see the anti-GMO movement, and even the calls for GMO labeling, as threats to their business models. And, GMA has members such as Monsanto that actually are in the GMO business ... which is why GMA is spending millions of dollars in Washington State to try to defeat an initiative that would mandate labeling of products that contain GMOs.

    I've said it before and I'll say it again. I am not reflexively anti-GMOs. I can imagine circumstances and products where genetic modification is not just a good idea, but necessary. But I continue to believe that consumers ought to have the right to know what is in their food, and that labeling of GMOs only is scary to people and companies that want to control information, not dispense it. I've made this argument here on MNB, and elsewhere.

    GMA feels, with justification, that it needs to represent the best interests of its members. In doing so, I fear, it may be staking out a position that, in the long run, is not in the best interests of consumers. GMA and its member companies may find themselves on the wrong side of history on this one.

    Published on: September 19, 2013

    Reuters reports that a new study from Harvard University and the Natural Resources Defense Council "found that dates printed on packaged foods, which help retailers cycle through stocked products and allow manufacturers to indicate when a product is at its peak freshness, are inconsistent." While they are seen as being a managed, consistent system, in fact "manufacturers often decide on their own how to calculate shelf life and what the dates mean. A lack of binding federal standards on labeling means the dates are governed by a patchwork of state and local laws ... They confuse consumers, leading many to throw out food before it actually goes bad."

    According to the story,"The authors recommended that 'sell-by' dates be invisible to consumers so they cannot be misinterpreted as safety labels; that a clear, uniform date label system be established; and that 'smart labels' that rely on technology to provide food safety information be used more frequently."

    The story quotes David Fikes, a spokesman for the Food Marketing Institute, as saying that FMI "agreed there had to be a clearer way for the consumer to read dates. However, it disagreed the code should be hidden, because that would make it difficult for store employees to stock shelves."

    The Reuters piece notes that there never has been a serious food safety problem in the US related to sell-by dating. However, Rep. Nita Lowey (D-New York) called for a consistent federal food dating system: "Under the current patchwork of state and federal laws, consumers are left in the lurch, forced to decipher the differences between 'sell-by' and 'best if used by,' and too often food is either thrown out prematurely, or families wind up consuming dangerous or spoiled food."
    KC's View:
    Confusing? Yes. Dangerous? Not much. As the story notes, consumers often ignore package dating and go with their guts, throwing out food that seems suspicious, even if the date says it should still be good.

    I don't know that this needs to be a high priority, but as a consumer, I'm always amused by the variation in what is said on different products. A clear, consistent system would be better in the long run, if only because it moves the industry toward a broader strategy of transparency.

    Published on: September 19, 2013

    The Los Angeles Times reports that First Lady Michelle Obama facilitated a White House meeting yesterday - of "business representatives, lobbyists, nutrition advocates and government officials" - designed to urge food manufacturers to increase their marketing of healthy products to kids.

    According to the story, "The first lady held up Birds Eye as an example of a company that successfully increased sales of vegetables by ramping up advertising to children. She noted Disney's decision to limit licensing of its characters.
    She also praised a group of 17 major food companies that have agreed to a self-regulatory initiative, in part to ward off possible government regulation."

    The Times notes that while Michelle Obama has had a high profile in the anti-obesity movement since the early days of the Obama administration, she has largely been silent about the advertising component, and stayed silent "in 2011 while food and media companies banded together to kill a federal proposal aimed at pushing the industry to limit such practices."

    Not surprisingly, industry groups - such as the Grocery Manufacturers Association (GMA) - pointed to voluntary efforts as evidence of the private sector's responsibility and commitment. And equally as expected, proponents of greater regulation suggested that the message had to be tougher and the tone stronger, forcing the industry to be more vigilant or face legislative consequences.
    KC's View:
    Probably just a coincidence, but the First Lady seemed to have been "silent" about this issue during an election cycle. Go figure.

    As a matter of interest, BTW...the had a story the other day saying that "teenagers are exercising more, consuming less sugar and eating more fruits and vegetables," trends that seem to be contributing to a leveling off of obesity rates in the US.

    It isn't a universal trend line. The Times writes that "the numbers also revealed something of an age and racial divide. Younger children had the highest levels of physical activity and fruit and vegetable consumption. But as children got older, the frequency of eating junk foods and engaging in sedentary behaviors crept up, along with average body mass index, a crude measure of obesity. Black and Hispanic adolescents lagged behind whites on almost every measure of progress, even after the researchers tried to take into account the influence of socioeconomic factors."

    And, the Times says, it isn't enough, because most teenagers still are "falling short of federal recommendations, which call for children to get at least an hour of physical activity daily."

    But something's working.

    Published on: September 19, 2013

    • We've had stories here on MNB about how Walmart is trying to ramp up its beer sales, and now the Wall Street Journal reports on how, after two years of strategizing and "in a move partially meant to spur flagging growth at stores open more than a year, Wal-Mart is pushing into hard liquor, one of the rare product categories where the world’s largest retailer is very small ... Today, the company is aggressively discounting its alcohol offering in a bid to snatch up market share, the classic Wal-Mart method of getting more customers in the store and more scale in its sales."
    KC's View:
    I would imagine that one problem with this approach is that it cannot be a national strategy, since there are a number of states where alcohol prices - for beer, wine, and hard liquor - are tightly regulated. Walmart may say it has the lowest prices in such states, but that certainly will be a questionable claim.

    Published on: September 19, 2013

    • Market Force Information, which specializes in customer intelligence solutions, is out with a survey concluding that "Publix Pharmacy is North America’s favorite based on customer satisfaction ... Target was a close second and Kroger ranked third. All three received high marks in operational attributes such as service, cleanliness, atmosphere and checkout times."

    The survey goes on to say that "when asked to rate their satisfaction with their most recent pharmacy experience and their likelihood to refer that pharmacy, consumers scored Publix above all others. Target, Kroger, Costco and Rite Aid also ranked high on the customer delight index, which reveals the intersection between overall satisfaction and the likelihood of recommending a pharmacy to friends/family."


    • NuVal announced that six of its retail partners - Hy-Vee, Inc., Festival Foods, Big Y Foods, Inc., King Kullen, Coborn’s, Inc., and Lund Food Holdings, Inc. - are the latest to sign new contract extensions, guaranteeing their stores will continue carrying the NuVal Nutritional Scoring System, which scores foods on a scale of 1 to 100; the higher the score, the more nutritious the food.


    • Interesting piece in Capitol Hill Seattle about how a group of area "food, drink and retail veterans are banding together to create a new 'corner market'" in an apartment development on Capitol Hill.

    The store, called Cone & Steiner, is being designed to be "a neighborhood grocery market that provides shoppers with the things they need — and a few of things they didn’t yet know they needed like farm fresh cheeses or a new rolling pin." At 1,600 square feet, there will be things that it will not carry - alcohol and tobacco, but the broader impulse is to create a kind of old-fashioned neighborhood mercantile with "stoop appeal."
    KC's View:

    Published on: September 19, 2013

    • Bob Thueringer, who started at Coborn's as a grocery bagger in 1967 while working his way through school and rose to become the company's COO, has announced his retirement, effective next June 30. Thueringer will remain on the company's board of directors, and will be succeeded in the COO job by Pam Osborn, currently the retailer's CFO.


    • Kraft Foods said yesterday that Nick Meriggioli, president of its Oscar Mayer unit, is leaving the company in early 2014, and will be succeeded by Sam Rovit, Kraft’s executive vice president of strategy.
    KC's View:

    Published on: September 19, 2013

    • Ken Norton, the former heavyweight champion of the world, has passed away at age 70. Norton had been living in a care facility in Arizona, and had suffered a series of strokes.

    Norton beat Muhammad Ali in 1973, winning a split decision in a fight where he broke Ali's jaw. He then lost a rematch with Ali six months later, and lost again in 1976, when the two met in Yankee Stadium.
    KC's View:

    Published on: September 19, 2013

    Regarding the planned expansion of Walmart's Neighborhood Market format, one MNB user wrote:

    I remember walking out of a WM Neighborhood Market down near Bentonville about 10 years ago thinking Food Lion and Winn Dixie were history. I remember the store manager telling mr the store sold more rotisserie chicken than any Walmart. Hard to believe but I was impressed with the store. They obviously did not grow like I thought.

    The model they now appear to be embracing is very vanilla. I suspect that they have decided that good is good enough to take on the weak players. They are probably correct.

    The question for me is the effect on the big dogs like Kroger and Publix. Also, it will be interesting to see if they make inroads in the Northeast. I'd say that's years away.

    Anyway, it's not a great store. I expected more.


    I'm not sure that good enough is ever good enough these days.




    I did a piece the other day ranting about Time offering me a more than $200 discount on a subscription because of my age.

    One MNB user responded:

    I think the more eye-opening question is, “How does Time know how old you are?

    From another:

    Since you weren't born yesterday I hope you understood that the $240 was the price of buying weekly issues at a news stand for 1 year, not the "regular" subscription price that is (a) far less, and (b) even farther less than the price the majority of subscribers pay.

    Of course. My big point was that it is a lot more likely that older people would want a paper magazine subscription ... so maybe they were offering a discount to the wrong demographic.

    And another:

    The $20 subscription rate for TIME is actually available to just about anyone, regardless of age.  They send this offer to many of their target groups, and have been doings so for several years (I get it from several different sources).  They still compare the discounted rate to the newsstand rate to make it look like a ridiculously good deal.  Almost all of the print magazine publishers use this gimmick.

    And still another:

    Maybe this will make you feel better... Time made the same $20.00 subscription offer to our 24 y/o daughter.

    Okay, so let me ask another question.

    Time is essentially saying that the magazine is worth $240 a year, but they're willing to offer a $220 discount. So what are they saying about the magazine's real value? Is it $240? Or $20? I'm not suggesting that discounts are not a good idea. But when you make cuts this deep, it seems to me that you are saying something profound about real value.




    Regarding a new discount program being instituted by Giant Eagle, one MNB user wrote:

    Top 10% of earners took home 50% of wages…do the math for the next 55% of Americans (the middle class) and you will understand Giant Eagle’s concerns. Not many of the top 10% are shopping Giant Eagle.




    On the subject of the ongoing health care debate, one MNB user wrote:

    I find it interesting how many business stories highlighted on MNB serve as a microcosm of the politics of the day…perhaps even more so, how societal views of the day are reflected in the business world especially with regard to discussing how folks should be treated and what they are, or are not entitled to; whether it be a so called living wage or healthcare coverage.

    Many articles regarding businesses reviewed on MNB revolve around customer service or the lack thereof, or how businesses succeed or fail based on their ability to connect with their customer base. In the broader sense why does any retailer even think twice about who their customer is or how to cater to them? Why does Walmart care about what Dollar General is up to, or why would Kroger be concerned with what Publix is doing in Atlanta? My personal answer to that question is because if they don’t, they stand to lose. Everyone, regardless of their political leaning seems to hate poor customer service. I mean, I’ve never read one word in your comments or those from your readers even remotely suggesting that poor customer service is okay, regardless of how poor customer service is defined, everyone knows it when they see it and no one likes it.
     
    As consumers, we are fortunate that we have choices, if we don’t like our experience at a particular restaurant or retailer, we simply don’t have to go there again, we can switch to a new venue that trips our trigger. What makes such choices available to us? Competition for our dollars makes all such options possible. It’s that freedom of choice that makes our free enterprise system work. It’s who we are at our core, I believe that anyway, with the key words being freedom and choice.
     
    What does any of this have to do with Obama Care? Well, one of the main goals of Obama Care according to Harry Reid is to move to a single payer system where all insurance is purchased through/provided by the federal government. Think about that for a minute. What if there were only one supermarket chain in the U.S.? What do you think customer service would be like with such retailer if they did not have to worry about a competitor taking sales dollars from them? What would the in-stock position be? What about sanitation, selection, new items, front end service, or pricing? What would the impact on suppliers be?
     
    Does standing in line at the local DMV or Post Office strike a chord? Does anyone think that procuring health care from the federal government will be any different? Especially when consumers have no other choice? Hell, the post office actually has lots of competition, but does that make your experience there any better or their organization profitable?
     
    The two most cherished rights supposedly guaranteed to “we the people” by our Constitution are freedoms and choices; personal liberty. Personally, regardless of political leanings, I believe that most people would like to see everyone be able to support their families. But do we really have to get there by being forced into a program that provides us no other choice? To be told that if we choose not to participate, not to purchase insurance that the government will tax/penalize us for making such a choice? Look what competition does for our shopping and eating out experiences…that can’t work for our insurance needs?


    I don't want to be in a position of defending Obamacare because I, like most people, don't completely understand it and certainly don't know for sure what the long term implications will be. One thing I do know - mandating the kids be covered under their parents' policies until age 26 and making sure that pre-existing conditions are covered by insurance companies are both good ideas that have made a difference.

    And again, without defending Obamacare ... a free market is what existed before ACA was passed by both house of Congress and signed by the president. And it seems to me that health care costs did nothing but go up to unaffordable levels. I have no idea if Obamacare will fix this ... but there seemed to be a least some shortcomings in the free market approach.

    As for the living wage debate ... I'm not sure I understand the connections you are making.
     



    But let's get more into the living wage debate...

    MNB user Jeff Gartner wrote:

    Kevin, I am saddened by the cynicism and lack of compassion voiced by some of your letter writers about the minimum wage. Most people trying to support their families while earning the minimum wage (or even just a little more) are trying to scrape by, living paycheck to paycheck.

    Their take-home pay after SS, Medicare and even the lowest federal and state income taxes often barely covers their monthly rent, utilities, food and transportation costs. They don't have health insurance unless their employer is paying for it. They're not buying the latest cell phone and don't qualify for extended data plans, but rather cheap pay-as-you-go phones and plans. They're not buying cars for their teenage kids, because they can't afford a car for even themselves. They're not buying the latest clothes and shoes, but they have to buy new ones every year because their kids, just like these letter writers' kids, are outgrowing last year's. Or they're flocking to shoe give-aways as they have during the late summer here in Grand Rapids at In the Image, a fabulous community nonprofit. They don't have money to buy pens or notebooks and other items they need for school.

    Some nonprofit organizations have poverty simulation exercises to help their community members understand what it's like to be poor. I suggest those letter writers spend time at one, as it may lead them to become more empathetic of those less fortunate.


    Another MNB user wrote:

    While I agree in principle with you position on a living wage I was somewhat surprised with  your comment on “settling for state schools”.  This seems to reveal an elitist point of view.  I have two daughters who “Settled for state schools”.    They are both well employed right of college and are doing better than many of our friend’s children who went to “non-state schools.   Comments like that while I believe were inadvertent  serve to perpetuate unnecessary stereo types.

    Fair point. I only meant that state schools tend to be less expensive than private schools.

    MNB user Philip Bradley wrote:

    It's not only "an appalling lack of compassion," as you put it in your take on the low minimum wage, but there's even a good self-interest reason on the part of the business community to be concerned about the low minimum wage as well as the excessive income inequality now present in our society.  Henry Ford got it right away when he paid his workers the unheard-of amount of $5/day because he wanted them to be able to buy a Ford car.  If the forces that promote income inequality continue (and a low minimum wage is one of these), American workers are not going to be able to buy all the goods and services produced by the American economy.  The result is obvious--lack of growth and/or stagnation in the economy.

    MNB user Mark Raddant wrote:

    I have a suggestion for the reader who thinks Fast food workers and other lower end employees should focus on expenses: Try to live for a month on what they make.  Allowing for your housing, just factor in whatever the average rent for a two bedroom apartment is within 10 miles of the restaurant.  Go visit that place to make sure it’s where you would be willing to live, though.  I’m not saying it can’t be done, it can.  But it is an eye-opener to try it yourself.  And as you pointed out, not all those people have the benefits of understanding budgets.  

    And from another:

    Kevin, once again thank you for expressing your views, re: living wages and the basic decency of most citizens. It needs to be said more.




    Regarding the GMO labeling debate, I wrote the other day:

    Labeling isn't condemnation.. It is just information.

    Which prompted one MNB user to write:

    Until some crazies with an agenda distort and demonize that information.

    Sure. Happens all the time. Ever watch cable news?

    But that does not mean that you don't provide, in a transparent and comprehensive way, all the information that a consumer could possibly want and need.

    Worrying about distortions is just an excuse. And not a good one.

    From MNB reader David Burgess:

    It's not so simple.  Transparency is good, but let's be clear here.  The fear-mongering is largely on the side of those who would demonize GMO without any scientific basis.  Fear works, and "frankenfood" is a tough label to overcome.  Some of the starches that are in many of our foods simply can't be had in non-GMO versions in sufficient quantities or at reasonable prices.  Stores like Whole Foods are in a tough spot.  They are supporting the initiative here because they really have no choice.  Their customers would have their heads if they didn't.  But are they and their customers willing to pay the higher prices that non-GMO products will cost?  And will it not hurt the sales of those items that cost substantially more?  All this without any evidence that GMO has any negative consequences.

    Real businesses and real people are going to be hurt by this.  Will firms need to have two sets of packaging, double the number of products, and half the efficiency to sell into states with a GMO labeling law?  Or will they have to move everything to non-GMO products and raise prices to everyone?  There is a lot to address here that goes beyond transparency.  Why not also stand up and say that the hysteria over GMO is unfounded and unsubstantiated fear-mongering?


    For the record, I am pro-labeling and I have said little to demonize GMOs.

    Labeling actually strikes me as the compromise solution. Say that a product contains GMOs, and then explain why. Educate. Enlighten.

    I cannot for the life of me understand why so many companies are afraid of labeling. They say that labeling will create fear, but I think much of the fear-mongering is taking place within the pro-GMO community.

    I wrote the other day about anonymous companies fighting a GMO labeling initiative in Washington State:

    I think that any organization that contributes $2.2 million to any campaign - for a person or position - ought to be required to disclose precisely where that money is coming from. This would help voters decide how to vote.

    One MNB reader responded:

    The only problem is that allows opponents to demonize the contributors, counting on voters to focus on defeating the "demons" while ignoring the merits of the issue in question.

    With all due respect, that's such a crock.

    There will always be forces - on either side of the aisle, and on any side of any debate - that will look to demonize either an argument or an advocate. And sure, demonization often cheapens the debate without illuminating the issues.

    But especially when massive amounts of money are being thrown at elections and debates, voters and consumers have a right to know who is behind those contributions. Sometimes this results in demonization, but sometimes we can draw legitimate conclusions about issues from the identities of the people and organizations that take one side or another.

    Remember the line from U.S. Supreme Court Justice Louis Brandeis: "Sunlight is the best disinfectant."

    To those who oppose such transparency, there is a simple question:

    What are you afraid of?
    KC's View: