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: October 10, 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.

    Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy. So a couple of things happened to me this week that I thought were worth mentioning...

    To begin with, let's take the subject of Brussels sprouts. As I've said on more than one occasion here, I hate them. The number of foods that I feel this way about isn't very big. It includes beets, mostly, I think, because my mother served canned beets a lot when I was a kid and I can't even hear the word without feeling some level of disgust. I have had them from time to time, and actually liked some white beets that I was served not so long ago. But I'm never going to buy them at the supermarket, never going to make them, and certainly am not going to go out of my way to order them in a restaurant.

    My dislike for liver and egg salad is even more intense. Never liked the smell of liverwurst when I was growing up, and for some reason - I'd probably need years of therapy to figure out why - the smell of egg salad makes me physically ill. Again, this may have more to do with mother issues than anything...

    My mom also served us a lot of tuna salad when I was growing up, but for some reason I don't have the same reaction to it. Don't eat it much, but I don't have anything like the visceral dislike for it that I do for beets, egg salad and liver.

    And then, there's Brussels sprouts. Again, I'm not sure why I hate them so much, but I do. Except that this week, I was at a business dinner at a wonderful Italian restaurant in New York City called Il Buco, and one of the items on the menu was risotto with shaved Brussels sprouts. As much as I hate the sprouts, I love risotto. And I figured that they'd never be any better than they'd be at Il Buco ... so I ordered the dish.

    Gotta tell you ... it was fabulous. As one of the guys I was with said, "You're mixing them with onions, butter, wine and arborio rice...how could they not be great?" And he was right. Brussels sprouts may not make my top-10 food list, and they're certainly not anywhere near my "what would you have for the last meal on earth" list. But they were really good .... and it was instructive about the power of great cooking and the importance of being willing to step outside one's comfort zone every once in a while.

    Besides, I figure it means that even at my age, I have the capacity for personal growth.

    Another thing I wanted to mention to you ....

    I was wandering through Eataly this week - you know, the New York City shrine to all thinks culinary and Italian. and I found something called "The Little Book of Pasta Tips." I thought it was pretty clever, and good to have around the kitchen, so I decided to get it ... because once again, it is always nice to learn something new, and I'm a sucker for an educational experience. I also thought it was a pretty smart impulse item ... you know, instead of some of the crap that food retailers sell from their wire at the front end. I'd love to see more of this sort of thing, and less of the magazines that seem to have as their core mission chronicling all things Kardashian...

    But one other quick point ... Out of curiosity, I checked to see if it was available on Amazon.com - not because, at $4.95, it was expensive, but just because I was curious. Guess what? It wasn't available.

    Another great business lesson: Whenever possible, when going up against a bigger competitor, one of the best ways to do it is to actually carry stuff that they can't carry, or just don't.

    Sometimes that can be a big thing. And sometimes, a small thing. But having that "thing" - a unique product or service that is uniquely, indisputably you - is absolutely critical.

    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: October 10, 2013

    by Kevin Coupe

    Love this story in this morning's Los Angeles Times about a company called Nest, which was founded by a group of former Apple employees that has created one of Silicon Valley's "hottest start-ups thanks to its well-designed, Internet-connected thermostat, which learns the behaviors of its owners to become more energy efficient.
    Having reinvented the thermostat, Nest has tackled its next engineering and design challenge. On Tuesday, the company announced the availability of its first connected smoke alarm, called Nest Protect."

    You can read the Times story here.

    It makes the point that one ordinarily would think that products such as thermostats and smoke alarms would be a little pedestrian compared to laptops, iPhones and iPads. But Matt Rogers, a Nest co-founder and vice president of engineering, tells the paper that the company has no less a goal than to change the way people feel about such products.

    "Like the thermostat, Nest Protect can also be monitored via Nest's smartphone app," the Times writes. "The alarm will send out alerts several months in advance about the battery status, for instance. And when the alarm sounds, the notification will also be sent to the phone, along with instructions on what to do in case of fire and a 911 button that appears on the screen to make a quick emergency call.

    "In homes that have multiple Nest Protects or thermostats, the devices will also talk with one another and share information about things like whether someone is currently in the room to adjust heat settings accordingly. And if one Nest Protect begins sounding a warning or alarm, the other devices will also echo that warning."

    The story goes on: "Although Rogers was uncomfortable with the term 'smart home,' he made it clear that Nest thought there were lots of things in the house that could be more exciting and useful by connecting them to the Internet and to one another to create an experience that makes people passionate about these overlooked gadgets."

    "Over the next 12 months, we'll introduce other great products in other industries," Rogers says. "We are a very aggressive and hungry company. And we love reinventing the unloved."

    I love that line: "We love reinventing the unloved."

    Because it implies that through innovation, attention and ambition, the unloved can be made loved. Which is the very essence of highest common denominator marketing.

    The results of which can be an Eye-Opener.
    KC's View:

    Published on: October 10, 2013

    The Los Angeles Times reports that the US Department of Agriculture (USDA) "is threatening to close three California poultry plants operated by Foster Farms blamed for an outbreak of salmonella poisoning that has sickened at least 278 people nationwide," saying that the plants have sanitary conditions that pose "a serious ongoing threat to public health."

    The situation is seen as particularly dire because, as the Times writes, the Centers for Disease Control and Prevention (CDC) has said that "42% of sickened individuals were hospitalized — double the normal rate for such an outbreak. The CDC also reported that some of the salmonella strains detected were showing resistance to antibiotics."

    Foster Farms has until close of business today to come up with a plan to clean up the mess.

    A recall has not been mandated by the USDA, though Kroger and its various banners have pulled Foster Farms chickens from its shelves. "Salmonella does not trigger an automatic recall like some forms of E. coli because it's not deemed an adulterant," the Times writes. "Instead, the USDA considers salmonella a naturally occurring bacteria that can be mitigated with proper cooking and handling," though there is an argument now that "this position needs to change because antibiotic use in agriculture has been creating dangerous forms of salmonella resistant to traditional drugs."
    KC's View:
    I know there are legalities and processes to be considered, but it is hard to imagine why a mandated recall - or, at the very least, a voluntary recall - has not taken place since these chickens have been linked to all this illness. What the hell are they waiting for?

    Published on: October 10, 2013

    A new study from The Nielsen Co. looks at the impact of rising food prices on US consumers. Excerpts:

    • "Americans are feeling the pain of rising food prices, reporting the lowest percentage globally (9%) of free spending money."

    • "Only 39% of Americans say they’re living 'comfortably' despite the US reporting the highest percentage (46%) of households earning an income above $50,000 compared to the global average of 22%."

    • "47% of Americans say they would shop more for private label brands when food prices rise."

    • "48% of Americans say they will stock up on regular-use items when they are on sale, especially unbranded cereal/grains, fruits, and vegetables ... 48% of US consumers will exclusively purchase sale price items when prices rise ... 44% of US consumers will look for deals online."

    • "Rising food prices mean US consumers will cut back on dining out (68%), new clothes & accessories (56%), snacking (50%), and travel (40%)."
    KC's View:
    I think these numbers illustrate a bigger problem, that what at best as been a tentative recovery since the end of the recession - except among the to 10 percent of the country - appears to a house of cards that could collapse at any moment, with things not made any better by the political dysfunction in Washington, DC. And, it points out the income disparity in the US that are, to my mind, a systemic and cultural issue that undermine the nation's stability.

    Published on: October 10, 2013

    USA Today reports that Starbucks is facing some blowback with its introduction of the "duffin," described as "part donut, part muffin," and part of the intermarriage of baked goods that started with the cronut.

    In the UK, Starbucks has introduced the duffin, in 730 stores: it "uses a buttermilk base, and tastes like a moist, cakey muffin, not the coarse, bready type. It looks like a muffin, but it’s filled with raspberry jam and coated in sugar, like a jelly doughnut. Eating a duffin is incredibly messy and not for those too dignified to wipe or lick clumps of sugar crystals off their fingers."

    The problem is that "the Duffin has, apparently, been around for years. Bea's of Bloomsbury, a small London baker, has been selling them since April 2011," and is reviewing its legal options.

    Starbucks has trademarked the "duffin" name, which Bea's never did, and the small bakery now is worried that it might be prohibited from using it. One of the things it is considering is trying to legally invalidate the Starbucks trademark on the name.

    For its part, Starbucks says it won't try to stop Bea's from using the name or the recipe, and denies that it stole the idea.

    However, the story points out that this may not matter, that "Starbucks appears to have gotten caught with its hand in the proverbial cookie jar, and it's evolving into a social-media consumer melee on Twitter and Facebook — something no major brand wants."
    KC's View:
    Amazing how a little bakery in Bloomsbury can precipitate a social media controversy that threatens to engulf a major multinational corporation.

    Published on: October 10, 2013

    • Delhaize-owned Food Lion announced that it "has rolled out a series of digital improvements to make saving money on groceries easier for its customers. Food Lion recently became the largest U.S. grocer to launch a new technology provided by Wishabi, a leading technology company that has reinvented the digital flyer, to provide customers with an enhanced online savings experience. Today, Food Lion also joined the Ibotta mobile app to offer customers cash rewards for completing tasks and purchasing featured products ... The new digital flyer enables customers to interact with the online flyer the same way they do with the print flyer, browsing by discount and category and circling their selections and savings with the click of a mouse. It also saves customers time through a new shopping list, which can be printed or emailed."


    Mobile Commerce Daily reports on a new Accenture study suggesting that "the percentage of consumers planning to do most of their Black Friday shopping online is up to 30 percent this year, compared with 25 percent last year ... Overall, a growing number of consumers are planning to make purchases or research gifts using their tablets and smartphones during the 2013 holiday shopping season, according to the report.

    "Specifically, 19 percent plan to use their tablets for shopping this holiday season, up from 15 percent last year, while 18 percent will use their smartphones, up from 14 percent."

    In addition, 'showrooming' seems to be on the rise: "The Accenture report found that 33 percent of those planning to shop via smartphone this year say they plan to use their device to compare prices inside the store, up from 19 percent last year."
    KC's View:

    Published on: October 10, 2013

    Mark Bittman, the New York Times columnist who focuses on the importance of good food, has written an excellent piece about the specific challenges facing fast feeder McDonald's, especially as its traditional approach to food is seen as out of step with modern realities.

    You can read it here.

    And it is particularly interesting since, after Bittman filed the column, McDonald's announced that during the first two weeks of November, it will package children's books with its Happy Meals instead of toys, and expects to distribute as many as 20 million books during that time.

    According to Advertising Age, "The books, self-published by McDonald's, will be based on company characters -- but not the Hamburglar or Ronald McDonald. One book, 'The Goat Who Ate Everything,' is about a goat who has a big appetite and struggles to eat well but eventually learns to eat smart. Another, 'Deana's Big Dreams,' shows how Deana, the world's smallest dinosaur, grew tall by eating well."
    KC's View:

    Published on: October 10, 2013

    Bloomberg Businessweek reports that Costco CFO Richard Galanti is saying that the company isn't going to change anything about its approach to pricing, despite disappointing quarterly results.

    Galanti, the story says, "urged Wall Street to think of our 'incredible, giant' rotisserie chickens. The company sells 60 million of those birds every year, keeping the price at $4.99 despite surging costs for both poultry itself and chicken feed. 'That’s us,' Galanti said of the stubbornly low prices. 'That’s what we do.' In other words: Don’t freak out about this quarter - Costco sees itself playing the long game."


    • The Associated Press reports that Sunland Inc., a New Mexico peanut butter processor, has closed the doors of its plant and filed for Chapter 7 bankruptcy, which will allow it to liquidate its assets.

    The story notes that "the Food and Drug Administration shuttered the plant in September 2012 after its products were linked to 41 salmonella cases in 20 states. Most of those were linked to natural peanut butter the company made for Trader Joe's ... The plant also made peanut butter under a number of different labels for retailers like Costco, Kroger and Trader Joe's, along with nut butter products under its own name."


    Bloomberg Businessweek reports that Brooks Brothers "is planning to open its first-ever restaurant, dubbed Makers and Merchants, in a prime midtown Manhattan location, around the corner from its flagship store." The eatery will be a steakhouse, in keeping with its image.

    According to the story, "The coat-and-tie merchant will be trying to replicate the success other apparel brands have had with restaurants. Tommy Bahama runs about a dozen stores with restaurants it calls Islands. The first Island-equipped store, which opened in 1996 in Naples, Fla., generates about $2,000 per square foot—more than twice sales at the company’s food-free stores."


    • The Denver Business Journal reports that Wendy's "is selling all of its company-owned restaurants west of the Mississippi River except those in metro Denver ... That move will bring corporate ownership to roughly 1,000 of the more than 6,500 locations worldwide and is expected to yield expense savings and other benefits to the company."


    • The New York Times reports that "Nestlé, the Swiss food giant, is looking to sell its Jenny Craig brand, just seven years after spending $600 million to buy the weight-loss company from two private equity firms." It is part of a broader plan by Nestlé to sell underperforming, non-core businesses.


    • The New York Times reports this morning that Men's Wearhouse has rejected the $2.3 billion offer made by Jos A. Bank to acquire the company, "calling the proposed deal 'highly opportunistic' and likely to draw antitrust scrutiny." However, it appears that Jos A. Bank has no intention of going away, and plans to continue pressing for a combination of the two companies.
    KC's View:

    Published on: October 10, 2013

    Regarding Walmart's decision to match BOGO offers by competing Florida retailers - but only when asked to do so by shoppers at checkout - one MNB user wrote:

    Torture is the only thing that comes to my mind when I think of the checkout process at Walmart.  Now throw in a question, discussion and remediation of an individual item price, on say, a bag of apples?  Oh my, it makes me want to poke my eyes with a sharp stick.




    Responding to Michael Sansolo's column this week about companies that poll shoppers but only want people who will give them good ratings to answer the questions, one MNB user wrote:

    The best explanation for this seems to be that someone does not really want to know the results. They want the illusion of knowing the results. This management decision then caromed into the craziness you experienced.

    From another:

    I read your eye opener about businesses asking you to score them 9 or 10.  This has happened to me only at the Car dealer....ironically one of the few places anyone would ever rank a 9 or 10.  They basically begged me to give them the highest score....when the service they provide is normally average or below.  I did not comply with their request.  If you want me as a customer to rank you highly, then deliver on the service.  I use Yelp and travel advisor almost exclusively as the measure of how businesses are treating customers.  I make many choices to avoid places based on what I hear from the customer.  And I find that the customer is usually accurate about places listed on these sites.  Word of mouth has always been the strongest form of advertising, and will continue to be. 
     
    In my role as a supermarket leader, our customers are given a real survey (paid for their time), and the customers give real specific feedback on almost every area of the shopping trip.  These surveys are evaluated (at least 100 per store in a one month period), and the store leadership is responsible -accountable for the results.  As a leader, the product I deliver (service, quality, experience) is measured directly by my customers.....and this is how we are continually a market leader.


    MNB user Pete Deeb wrote:

    Michael is on point with his customer service points ... I refuse to do surveys that ask for good scores and I only give them when deserved. It disheartens me that my attempts to critique and improve service are met with a quick push of the delete button!

    And from another:

    The reason retail employees ask for the perfect score is that the surveys only give credit to a store or department if the score is perfect. On one such survey, the rating is 1 through 5. If you receive a “5” you get a 100%. If you receive a “4” you get 0%. So, store managers devise all sorts of tricks to get the “5’s.” They ask for them! They tell their employees to ask for them and they even go to extreme measures- picking up discarded receipts from the floor and calling in the surveys themselves. As part of a store manager group, I once asked why the rating system was based on the perfect score and I only got a vague answer. So, I suggested that we use the same system in our Employee Satisfaction Surveys. The looks I received were hilarious. To survive in this retail environment, Leaders need the truth. The problem is that they have surrounded themselves with people who are good at telling them what they want to hear. “Garbage In, Garbage Out!”






    On another subject, one MNB user wrote:

    Re: bundling of movie ticket and digital copies of movies for home. Are people willing to buy a video copy of a movie they haven’t seen yet? Not me. This only makes sense to me if you can track repeat visits (i.e., people plunking down the cash to see the same movie in theaters more than once) or if someone is a diehard of a certain franchise (Fast Five comes to mind), and in the latter case clearly an electronic download should be an option (vs. a DVD). I’d bundle this as: rate the movie you just saw, get an x% discount on the home version (format of choice), and then share your rating with friends via social media.
     
    It may make as much sense to offer this bundling on popular books that are in movie development. New movie based on the book by Tom Clancy (RIP)? Buy the book, get a discounted movie ticket (and then the purchase offer after seeing the movie).





    And responding to Mrs. Content Guy's criticism of my approach to the case in which a bunch of kids in Los Angeles hacked the iPads they were given and used them to access social media and games, which the iPads were supposed to prevent. I thought they should be commended for original thinking, but she saw the social contract breaking down.

    MNB user Gary Loehr wrote:

    It would appear that you just had your knuckles rapped with a ruler. Consider yourself on detention.

    I love it when she raps my knuckles and puts me in detention....
    KC's View:

    Published on: October 10, 2013

    In Major League Baseball, the St. Louis Cardinals defeated the Pittsburgh Pirates 6-1, winning the fifth and deciding game of the National League Divisional Series. The Cards now go on to face the Los Angeles Dodgers in the NL Championship Series, which begins tomorrow night.
    KC's View: