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    Published on: January 13, 2014

    by Kevin Coupe

    There was a fascinating story in the New York Times yesterday about Masami Yoshizawa, a Japanese dairy farmer with property not far from the location of the Fukushima nuclear disaster who is staging what in essence is a one-man protest against the Japanese government and its response to the events of March 2011.

    "Angered by what he considers the Japanese government’s attempts to sweep away the inconvenient truths of the Fukushima nuclear disaster," the Times writes, "Masami Yoshizawa has moved back to his ranch in the radioactive no-man’s land surrounding the devastated plant. He has no neighbors, but plenty of company: hundreds of abandoned cows he has vowed to protect from the government’s kill order … Mr. Yoshizawa is no sentimentalist — before the disaster, he raised cows for slaughter. But he says there is a difference between killing cows for food and killing them because, in their contaminated state, they are no longer useful. He believes the cows on his ranch, abandoned by him and other fleeing farmers after the accident, are as much victims as the 83,000 humans forced to abandon their homes and live outside the evacuation zone for two and a half years."

    Yoshizawa, the story says, "is worried about his health. A dosage meter near the ranch house reads the equivalent of about 1.5 times the government-set level for evacuation. But he is more fearful that the country will forget about the triple meltdowns at the plant as Japan’s economy shows signs of long-awaited recovery and Tokyo excitedly prepares for the 2020 Olympics — suggesting his protest is as least as much a political statement, as a humanitarian one."

    It is an intriguing piece about a man who refuses to be ignored, and who has a cause to which attention should be paid. You can read it here.
    KC's View:

    Published on: January 13, 2014

    Target Corp. said Friday that the number of customers who had personal information stolen by hackers in November and December 2013 was actually between 70 million and 110 million, not 40 million as the company originally had reported. In addition, Target said, the depth of the penetration was far worse than originally disclosed. Instead of it just being names, card numbers, security codes and expiration dates being accessed by hackers, it apparently also was mailing addresses and email addresses … and may also have affected customers who did not shop at Target during the November-December dates.

    The New York Times reports that "the effect of the data theft has reached far beyond one of the nation’s largest retailers. Major credit card companies and banks have been issuing warnings about potential fraud to their customers and providing them with new cards and account numbers as a precaution. Some banks have limited cash withdrawals. As banks and companies continue to monitor customers’ accounts for suspicious activity, the Secret Service and the Justice Department have opened an investigation."

    According to the Times story, "Fraud experts said the information stolen from Target’s systems quickly flooded the black market. On Dec. 11, shortly after hackers first breached Target, Easy Solutions, a company that tracks fraud, noticed a 10 to twentyfold increase in the number of high-value stolen cards on black market websites, from nearly every bank and credit union … Security experts say that clever hackers could potentially piece together customers’ stolen information for identity theft or for use in a so-called spear phishing attack, in which hackers send a highly tailored email to victims asking them to click on a link or download an attachment that, once opened, gives hackers a foothold into their computers and employers’ networks."

    As the extent of the Target breach got worse, the Associated Press over the weekend reported that "luxury merchant Neiman Marcus says thieves may have stolen customers’ credit card and debit card information and made unauthorized charges over the holiday season … Neiman Marcus’s spokeswoman Ginger Reeder said in an email that its credit card processor notified the retailer in mid-December about potentially unauthorized payment card activity. On Jan. 1, a forensics firm confirmed evidence that the upscale retailer was a victim of a criminal cyber-security intrusion and that some customers’ cards were possibly compromised as a result."

    Yesterday, CNBC quoted Target chairman/CEO Gregg Steinhafel as trying to reassure consumers that his stores are safe to shop. "We are in the middle of a criminal investigation as you can appreciate and we can only share so much. ... We are not going to rest until we understand what happened and how that happened," he says. "Clearly we are accountable and we are responsible—but we are going to come out at the end of this a better company and we are going to make significant changes."
    KC's View:
    This story just keeps getting worse and worse, and columns are beginning to appear in the media about the extent to which retailers where such breaches take place should be fined. And it seems likely that there are going to be hearings somewhere that will focus not just on Target but also on the broader issue of customer financial security.

    I may be wrong about this, but I think that the retail industry needs to prepare itself for a regulatory and pubic relations storm. And the one thing it should not do is go into a defensive crouch … because that won't play well. Target already is getting grief for waiting just a few days before informing customers of the breach; the defense is that it needed to prepare call centers that could handle the inevitable onslaught of consumer queries, but even a brief delay is perceived by some as having a "CYA" taint.

    These days, even the perception that a company is being less than transparent can be damaging.

    Published on: January 13, 2014

    The Great Atlantic & Pacific Tea Co. (A&P) announced Friday that CEO Sam Martin has left the company, after more than there years in the role.

    Martin has been succeeded on an interim basis by Gregory Mays, executive chairman of the company, while a search is conducted for a replacement.

    Martin, the former COO of Whole Foods, joined the company in July 2010, when Ron Marshall, the former Nash Finch CEO who was dismissed after just seven months at the helm. Marshall replaced Eric Claus, who had been brought down from A&P’s Canadian operations in 2005 and was fired without apparent warning in 2009.

    A&P would not comment on the departure, other than to say that "Sam Martin has departed as the company's CEO. We all thank Sam for his time at A&P and wish him well in his future endeavors."

    Martin helped guide A&P through its emergence from bankruptcy. At the time, Martin released a statement saying, in part, “We have completed a thorough restructuring of A&P’s cost structure and balance sheet to build a strong foundation for the company’s future."

    But after years of sales declines and heightened competition, Martin's A&P was unable to make any sort of real headway. And now he is gone, and A&P is in the market for a new CEO. Again.
    KC's View:
    Last May, I wrote a column about an appearance that Martin made at the annual conference run by Portland State University's Center for Retail Leadership, which, if you're interested, you can read here.

    Well, it didn't take long this weekend for me to get emails challenging me for having written the piece and questioning my insights.

    To be honest, the first thing I thought of when Martin resigned was that column, and I went back to read it to see how wrong I'd been. Nothing would have surprised me; I've been doing this for a long time, and so I'm sort of used to being wrong. (Plus, I've been married for 30+ years, and that only happens when one is willing to accept the fact of one's missteps.)

    In this case, I think that the column properly painted a fairly bleak picture of the situation at A&P, suggesting that while Martin seemed to understand the cultural changes that needed to take place, that wouldn't be enough to make the company competitive again. Did I think Martin was saying the right things? Sure. But I don't think I was overly optimistic about his chances.

    Also … to those people who I think I was writing while wearing rose-colored glasses … I think that is an opinion that would not be shared by anyone who has been reading MNB for any length of time. I am, after all, the person who once wrote when a rumor emerged that A&P was considering an acquisition, "Can you imagine anything worse than coming to work and finding out your company had been acquired by A&P?"

    Published on: January 13, 2014

    Scientific American reports that the US Federal Trade Commission (FTC) has brought suit against GeneLink Biosciences, a company that promoted itself as providing personal genetics services, charging it with making misleading claims with no basis in science.

    Personal genetics allow people to swab their cheeks or otherwise get a sample of their DNA and send it to a company for analysis; the report then can be used for preventative purposes by people who want to deal with potential health issues.

    It is the second such case in which the federal government has gotten involved in recent months. Last November, the Food and Drug Administration (FDA) ordered a company called 23andMe to stop marketing its $99 personal genetics mail order kit, saying that its results could prompt people to undergo unnecessary procedures.

    According to the story, "The FTC could not comment on whether other cases against genetic companies are in the offing. Although the commission opened investigations into two other genetic firms in the past, both cases were closed before action was taken, in part because the outfits were no longer going to market their products in the U.S."
    KC's View:
    The evidence seems to be pretty clear that in some of these cases, the marketing may have gotten ahead of the science. But I remain absolutely convinced that the notion of DNA analysis and then making diet/lifestyle decisions based on that information, is going to be common, and broadly accepted.

    Published on: January 13, 2014

    The Boston Globe reports that Maine Gov. Paul LePage has signed a bill that will require the labeling of all products that contain genetically modified ingredients.

    However, the law only "will only go into effect if other Northeastern states approve similar measures."

    Maine is the second northeastern state to pass such legislation. Connecticut passed a similar bill last year.

    The bill was opposed by the Maine Grocers Association, and supported by the Maine Organic Farmers and Gardeners Association.
    KC's View:
    I know that I may not be in the majority on this one, but I think this is a good thing. And perhaps even more important, it is going to be the trend.

    In the end, transparency wins.

    Published on: January 13, 2014

    The Food Marketing Institute (FMI) this weekend, at its annual Midwinter Executive Conference in Scottsdale, Arizona, announced a series of recognitions at its inaugural “Celebrating Our Industry” dinner. The honorees included:

    • The Sidney R. Rabb Award was presented to Neil Golub, Price Chopper Supermarkets’ executive chairman of the board, "for his statesmanship and community service."

    • Joanie Taylor, director, consumer affairs and community relations, received the FMI Esther Peterson Award "for her commitment as both advocate and voice of the consumer."

    • Hy-Vee’s recently retired, Vice President, Education and Governmental Affairs, Rose Mitchell was honored with the FMI Glen P. Woodard, Jr. Public Affairs Award.

    • Bristol Farms President and CEO Kevin Davis received the Robert B. Wegman Award for Entrepreneurial Excellence.

    • Campbell Soup Company President and CEO Denise Morrison was recognized for her "exemplary contributions to the food retail supply chain" with the FMI William H. Albers Industry Relations Award.

    • The Herbert Hoover Award for "humanitarian service in the food industry" went to Associated Grocers, Inc. President and CEO, J.H. (Jay) Campbell, Jr.

    • J.K. Symancyk, president of Meijer, Inc. received the 2014 GMA Industry Collaboration Leadership Award "for creating an environment where supply chain partners can work together in new and innovative ways."
    KC's View:
    I'm incredibly pleased to see Neil Golub, Joanie Taylor, Rose Mitchell and Kevin Davis singled out by FMI for their various and significant contributions to the industry … these are all good people all of whom I consider to be friends, who have been supportive and kind to me over the years, and with whom I would be happy to hang out, any time, any place.

    So much for objectivity. On the other hand, sometimes objectivity is overrated.

    One of the things that I think all these people share is a real passion for what they do, and for seeing their companies and their roles in a broader context. It isn't just about selling stuff, but about making broader contributions to their communities. I like them enormously, and I congratulate them for being recognized. They deserve it.

    Published on: January 13, 2014

    Mobile Commerce Daily reports that a new report from Placed, a location analytics firm based in Seattle, suggests that Kroger "was visited by more smartphone-owning moms than any other grocery chain. With moms increasingly enlisting their mobile devices to help plan meals and grocery lists, store and redeem coupons, as well as support their visits to stores, Kroger is leading other grocery stores in delivering services that meet this important segment’s needs … Approximately 13.7 percent of United States smartphone-owning mothers visited Kroger in November. This is partly because of the resources that the grocery chain has poured into developing a comprehensive mobile app that drives engagement outside of the actual bricks-and-mortar location."

    According to the story, "The No. 2 most-visited grocer was Aldi. However, the foot traffic to Aldi locations was less than half of the traffic that Kroger generated. During November, a little less than 6 percent of moms visited a Safeway or Publix location, and slightly more than 4 percent of moms went to either a Food Lion or Albertson’s store."
    KC's View:

    Published on: January 13, 2014

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

    • The Los Angeles Times reports that the US Department of Agriculture (USDA) has lifted its order that a Foster Farms poultry farm in Livingston, California, be closed because of a cockroach infestation, saying that the company's corrective actions have addressed it concerns, though it will continue to monitor the facility.

    However, even though the USDA lifted its suspension order, Foster Farms "shut down its largest poultry plant in Central California on Sunday, two days after federal inspectors lifted a suspension for cockroach infestation," saying it was doing so "to expand safety procedures."

    The factory involved is the same one that previously had been linked to a salmonella outbreak created by unsanitary conditions.

    Suddenly, "tastes like chicken" doesn't exactly have the same meaning it used to.

    • The Chicago Sun Times reports that PepsiCo launched its new premium bottled water brand, Qua, by passing it out to attendees at last night's Golden Globes award ceremony.

    According to the story, "a PepsiCo spokeswoman noted that the company is still working out the kinks and that the name and design for Qua may change before it’s rolled out more broadly." The story also notes that "aside from their higher prices, what exactly sets a premium water brand apart varies. But the superficial factor is high: they usually come in stylish bottles. The water’s sourcing or filtering may also be touted on labels." And, "as with Coca-Cola’s Smartwater, Qua is made with tap water. The brand, which PepsiCo says is 'micro-filtered' and free of sodium, is slated to be tested regionally in California this summer before expanding to other markets."

    I used to make fun of such products. But since I'm sitting here with a glass of my favorite, Pellegrino, next to the laptop, I can't really do that anymore. And the reality seems to be that as the market for soft drinks continues to soften, soda companies are going to have to find new ways to compete.

    • The Minneapolis/St. Paul Business Journal reports that Supervalu plans to "open more of its low-price Save-A-Lot stores in 2014," with the likelihood that the majority of them will be corporate rather than franchised because corporate stores can be opened more quickly and efficiently.

    As of October, the story notes, "Supervalu owned 377 Save-A-Lots, with another 957 owned by franchisees. The chain has a heavy presence in the Midwest, along the East Coast and in Texas."

    • The Los Angeles Times reports on the creation of a new coalition in California: "The California Food Policy Council, a network of 19 groups around the state, wants to persuade legislators to pass laws that would support sustainable agriculture and safeguard soil and water quality for large and small farmers. The idea, organizers say, is to make healthful, affordable food options available for low-income urban dwellers, schoolchildren and others … The council, in a report, already is touting some successes, including the passage last year of bills that expanded access to fresh produce for food-stamp recipients, gave property owners a tax break for urban farms and gardens and cleared the way for driver's licenses for immigrant farmworkers."
    KC's View:

    Published on: January 13, 2014

    • The Kroger Co. said last week that Van Tarver, vp of the company's convenience stores division and supermarket petroleum group, plans to retire in August.

    Jeff Parker, who has been VP of small formats, has been named president of convenience stores and small formats, effective immediately. Tarver will remain in charge of the petroleum group until a replacement is named.
    KC's View:

    Published on: January 13, 2014

    …will return.
    KC's View:

    Published on: January 13, 2014

    In The National Football League (NFL) Divisional Playoffs…

    New Orleans Saints 15
    Seattle Seahawks 23

    Indianapolis Colts 22
    New England Patriots 43

    San Francisco 49ers 23
    Carolina Panthers 10

    San Diego Chargers 17
    Denver Broncos 24

    And, over the weekend Frederic Horowitz, the Major League Baseball arbitrator hearing Alex Rodriguez's appeal of his 211 game suspension for the use of performance enhancing drugs, ruled that Rodriguez must serve a 162-game suspension, taking the New York Yankee third baseman off the field for the entire 2014 season. The suspension will cost him $25 million in salary.

    Rodriguez is appealing the suspension with a lawsuit against MLB.
    KC's View:
    Good riddance.