business news in context, analysis with attitude

Published on: March 31, 2014

by Kevin Coupe

The Washington Post reported over the weekend that is easier to get into Harvard University than it is to get a job at Walmart's new stores in Washington, DC.

That's right.

The nation's Ivy league schools are reporting that this year they have an average acceptance rate of 8.9 percent, with Harvard being the choosiest at about five percent of its applicants being accepted, and Cornell University coming in at a little more than 13 percent. On the other hand, Walmart only was able to hire 2.6 percent of its job applicants in DC.

"This isn't an anomaly," the Post writes. "Last year a Wegman's in Pennsylvania boasted an acceptance rate of 5%, while Google only has room for one half of one percent of its job applicants."

Now, clearly these are different demographics.

It also seems obvious that this says something about the still struggling economy.

Still, it is an Eye-Opener …

Published on: March 31, 2014

The Produce Marketing Association (PMA) today is releasing the toolkit that will enable produce growers, suppliers and retailers to launch marketing programs designed to encourage children to eat fresh fruits and vegetables, using a free license granted to PMA by Sesame Workshop, producers of "Sesame Street," the longtime PBS television series.

The theme of the marketing program: "Eat Brighter!"

The license is effective through December 2016. It is anticipated that a wide variety of marketing programs will start to be seen in stores in time for the 2014 back-to-school season.

The toolkit says, in part:

Why are we here? Sesame Street, in alliance with the PMA and the Partnership for a Healthier America working in tandem with the First Lady’s Let’s Move! Initiative, wants to boost consumption of fruits and vegetables among kids. Only thing is, we need your help. so we’ve created this marketing toolkit to give you a few assets that will bring a little excitement to produce departments across the country. Kids love seeing our characters.

We love helping kids. And you love bringing fresh, delicious produce to stores everywhere. so here are a few simple tools to make it happen. Let’s help kids eat brighter!

The 20+ page toolkit features art, fonts and examples of how products should be merchandised using a phalanx of "Sesame Street" characters that includes Bert, Ernie, Elmo, Cookie Monster, and Elmo, as well as guidelines for what they can say and how they can say it.

The purpose, says Cathy Burns, president of PMA, is to "level the playing the field a bit" between fresh produce marketing and the CPG and junk food sellers that have fas bigger ad and promotion budgets and are more easily able to influence young minds. "The produce industry has never done anything on this size and scale," she says.

Sherrie Westin, executive vice president/chief marketing officer at Sesame Workshop, notes that her organization has a "robust licensing business," but that offering free licensing to "smaller growers that might now be able to afford it as a group," but now can go through PMA and gain critical mass, is a direct reflection of Sesame Workshop's "healthy habits" initiative.

Sesame Workshop has strict nutrition guidelines for the foods that it licenses its images to, including limits on sugar, sodium, saturated fat, and trans fat, and encouraging nutrient-rich foods that contribute  towards a nutritious diet. These themes can be seen not just in the foods that are licensed, but also in the content shown on "Sesame Street" - Cookie Monster may be shown eating cookies, but those are defined as a "sometime food," while fruits and vegetables are defined as being "anytime foods."

The Partnership for a Healthier America (PHA) will be a critical part of the "Eat Brighter!" initiative, and Lawrence A. Soler, PHA's president/CEO, tells MNB that the program builds nicely on what seems to be an existing trend. Referring to recent reports that childhood obesity rates are on the decline, he says, "It is good news, and it confirms what I'm seeing - that there is a new sense in Americans, that they are thinking about health and wellness, and that these are habits that these children will have for the rest of their lives."

Published on: March 31, 2014

The Wall Street Journal reports that the deadline has passed by which any other company could file a competing offer to acquire Safeway, "moving Cerberus Capital Management LP's deal to buy the U.S. grocery chain one step closer to closing."

While Cerberus, which owns the Albertsons chain, agreed to buy Safeway for more than $9 billion earlier this month, there was a three-week period during which Safeway could entertain other offers. Now that the deadline has passed, it seems likely that the deal will close during the fourth quarter of this year.

As the Journal writes, "the deal brings together Cerberus's Albertsons chain - the fifth-largest U.S. grocery store banner by market share - with Safeway, the second-largest. It would create a food retailer with more than 2,400 stores and more than 250,000 employees."

Published on: March 31, 2014

• Bloomberg Businessweek reports that Walmart CEO Doug McMillon recently said at a company meeting that addressing the stores' out-of-stock problems was a "three billion dollar opportunity."

According to notes taken by an attendee that were provided to Businessweek, company leadership also said that it plans to add labor hours as a way to improve in-store execution, a move that would be contrary to the trend in recent years toward cutting back on labor expenses.

The story notes that Walmart "has struggled to keep shelves stocked over the past year at U.S. stores … The lack of merchandise has frustrated some shoppers, prompting them to decamp to the chain’s competitors. Increasing labor hours could make it easier for staff to get inventory from the stockroom and replenish the products on the store floor."

Published on: March 31, 2014

The Los Angeles Times reports that less than two years after California voters rejected a ballot initiative that would have mandated the labeling of foods containing genetically modified (GM) ingredients, the State Senate's Health Committee has passed legislation that "would require labeling of genetically engineered bulk and packaged foods beginning in 2016. The legislation goes to the Rules Committee and perhaps the Agriculture Committee, where it could face trouble."

As the story notes, "Experts on both sides of the issue disagree vehemently. Proponents of labeling say they fear that eating such foods — often made from genetically modified corn, soybeans and sugar beets — could cause allergic reactions, asthma and autoimmune deficiencies. Growers, the grocery industry and many scientists counter that genetic engineering boosts production of foods that are no different — and no more dangerous — than non-engineered ones."

Meanwhile, Politico reports that Margaret Hamburg, commissioner of the US Food and Drug Administration (FDA), told a House of Representatives subcommittee last week that "FDA will soon re-assert that it’s unnecessary to mandate labels for foods that contain genetically engineered ingredients," adding, "We have supported voluntary labeling, and we have put out a proposed guidance, and we hope to finalize that soon."

Published on: March 31, 2014

Reuters reports that the U.S. Court of Appeals for the District of Columbia Circuit ruled Friday against a request by the American Meat Institute (AMI) that would have prevented the implementation of Country of Origin Labeling (COOL) rules.

The story says that "the rule requires retailers to list not just the country of origin but also information on when and where animals were born, raised and slaughtered."

Published on: March 31, 2014

The Safeway Foundation said last week that it is working with the Entertainment Industry Foundation (EIF) and Oscar-nominated actress Viola Davis to launch Hunger Is, described as "a joint charitable program designed to raise awareness and funds to fight childhood hunger in the United States. The year-round campaign encourages individuals and communities to get involved in solving a widespread problem that too often goes unnoticed."

The announcement notes that "funds raised through the initiative will go toward programs focused on eradicating childhood hunger and improving health-related outcomes. During the inaugural year, breakfast programs will be the focus, giving children a healthy start to their day and the best chance to excel.

"Research shows that children who eat breakfast have better school attendance, achieve higher math scores, and are twenty percent more likely to graduate from high school than children who lack adequate access to food."

“It is unacceptable that millions of children in this country go hungry each day. The good news is that we can make a difference in their lives and send them to class ready and able to learn,” said Larree Renda, Safeway EVP and Chair of The Safeway Foundation. Safeway says that its shoppers will have "multiple opportunities to give during an in-store Childhood Hunger awareness fundraiser during the month of April at more than 1,300 Safeway stores across the United States."

Published on: March 31, 2014

The New York Times Magazine over the weekend featured its annual "Food & Drink" issue, which you can read in its entirety here.

There are three stories that are my particular favorites:

• "A Woman's Place Is Running The Kitchen," which is about Boston chef Barbara Lynch, who has a personal and professional goal of nurturing the next generation of chefs, especially women;

• A photo essay that looks inside the refrigerators of five top New York chefs;

• And "Not Enough Cooks In The Kitchen," by Mark Bittman, which looks at the dichotomy between the celebrity chef culture that may not focus enough on great meals.

If you love food, the Times Magazine is worth perusing. Enjoy.

Published on: March 31, 2014

• The Oakland Tribune reports that Kroger has opened its first Foods Co price impact warehouse store in the Northern California city, and its sixth in the San Francisco Bay area. The store is the first in the East Oakland neighborhood, and the story says that its opening "eradicates one of city's biggest food deserts."


• Bloomberg Businessweek has a story about how food safety and labeling issues in china continue to plague western companies that have to do damage control after they experience problems, and how "inadequate government oversight also is forcing big Western companies, from Wal-Mart to Nestlé to French supermarket operator Carrefour, to put on their sheriff’s hats and take food policing into their own hands." This means boosting inspections, educating locals, setting up more laboratories and hiring more people - it is all about constant vigilance, the story says.

Published on: March 31, 2014

MNB took note on Friday of a Forbes piece online about Toys R Us, where leadership said at a press event that its shoppers are unhappy with its stores' "slow checkout process, cluttered and disorganized shopping environment, too-high prices" and too-frequent out of stocks. And so, they said, they are going to try to improve the store experience, hire better people, be smarter about inventory and get costs and prices right.

I commented:

Gee, what a revelation. Toys R Us has crappy stores and too-high prices, and the best way to fix the company is to make the stores' shopping environment less crappy and the prices more acceptable.

Go figure.

I'm not saying that Toys R Us can't be fixed. But I am saying that when you read what the company execs are saying, there is a faint whiff of Blockbuster/Circuit City/Borders in the words….

One MNB reader responded:

When I had a baby a few years ago, I registered at Toys R Us. My baby shower took place a few months before the baby was born, which I believe is pretty typical. After the baby was born, we opened the baby bathtub to find that it had clearly been used, and returned. When I brought it back in because a) it had been used (yuck!), and b) it leaked (I checked to see if it had been returned because it was faulty), Toys R Us made a big deal about the fact that I was bringing something back outside of their 30 day return period. Eventually they agreed to give me the lowest sale price in the past 6 months, even though it had been purchased as a part of my registry, and I’m pretty sure they knew exactly how much the person who purchased it had paid. They wouldn’t even allow me to simply exchange the tub in my hand for the exact same thing. I can understand why they wouldn’t want an out of season clothing item returned months later, but it’s silly to expect a new parent to open and test every item they receive for their yet to be born baby within 30 days. Since that experience I have recommended to everyone I can that they not register there, or if they do register at Toys R Us, to return everything they get and repurchase as needed once the baby is born. Bottom line, it doesn’t matter how many positive changes they make, it’s too little, too late for me!

From another reader:

I'll admit my bias on this one, as I put in a 3-month stint at one of their stores in MA, but I do feel I've got good reasoning behind that bias... Training was a pathetic joke, consisting of being shut alone in an old storage room for 4 hours to watch videos and fill out paperwork. I never received any on-the-job training or instruction. On my first day on the floor, nobody knew if I'd been hired as a cashier, sales associate, or customer service associate. The manager on duty didn't even know who I was!

Things actually went down-hill from there, with employees holding an on-going game of throwing merchandise at one another across the sales floor, money missing from tills that were never properly closed out, and managers going missing--only to be found hiding in the grocery store cafeteria next store.Merchandise was never stocked. Near the end of my time there, I was trying desperately to help a customer who was frantically searching for a particular doll. Even though the shelf was empty, I knew we had some in the back, so I broke open a box and brought one out to the customer... this resulted in the manager threatening to write me up and suspend me for "insubordination."

Again, I admit my bias. I have no way of saying this experience is indicative of employment and staffing at ALL of their stores, but I do know that I've never had a good customer experience at their stores either--be it MA, CT, AZ, or OR, I see the same issues. It's depressing (and pathetic) to me that, ten years later, they're just now getting around to saying "gee, you guys ... maybe we have a problem here..." It seems to me that they may be baling themselves out with a teaspoon.

MNB reader Chris Grathwohl wrote:

It becomes painfully obvious that the Toys R Us execs have never been in one of their stores, particularly in late November / early December.

The fact that slow checkout, cluttered and disorganized shopping environment is a revelation to them is a shame.

A little “management by walking around” – and not in their ivory tower exec offices – would go a long way here.

There was, however, one outlier:

Maybe I'm spoiled but I love my Toys R Us store! Now that I have a kid, unfortunately I have to go there every few months to get those last minute birthday gifts for the endless number of parties we get invited to. 

Now granted this is the Times Square location, so that's why I'm spoiled. My daughter is fascinated by the T-Rex. Dinosaurs aside, it for sure beats the small "hobby shop" in my neighborhood that has terrible selection and prices that are almost double what toys r us has. As a New Yorker, I also know I need to hit it first thing in the morning before the tourists get up. But the staff is pretty helpful and I can't beat the selection for a gift that I need for that day.

You may have found the one store that works … and I'd venture to say that it is the one store that has little to do with American retail realities.

Listen, while it may seem that I am picking on Toys R Us, my goal here is simply to suggest that there are lessons to be learned from its problems - that it is important to not just accept but to embrace modern retailing realities, to understand the fundamental ways in which consumers have changed and continue to change, and to constantly be reinventing business models so that one can stay ahead of these trends instead of playing catch-up.




Chiming in on last week's debate about the cost of a movie ticket, one MNB user wrote:

I like to see movies in theaters, however $7.00 is about my limit.

However, I rarely go to any movies at all.  Occasionally, I head up to the local library which shows second-run movies for free ... and throws in light snacks for free.

Here is why I don't see many movies in commercial theaters.

I get into the cinema at 1:45 pm for a 2:00 pm matinee.  I get all situated is a seat that is comfortable and gives me a good view.

At 2:00, the preview begins.  Since it is a preview, people talk through all the trailers. 

At 2:10, the last trailer starts.  Twenty people walk in and block the view and have a long discussion as to where to sit.  They are blocking my view so I miss the last trailer.

At 2:15, the movie starts.

At 2:20, an elderly couple and their daughter enter the theatre.  The theater is dark, over half full, and they have to pick "the best seat."  They stumble over people.  Meanwhile, the group of twenty are still holding a conversation about their luncheon is a loud whisper.  This conversation goes on until 2:45 pm.

Now, I guess that I could get up and find someone on the theater staff to resolve the issue.  However, all I will find is some kid who cannot resolve the issue and I will miss most of the movie.

If I routinely had experiences like yours, I'd probably hate going to the movies, too.

I try to be pro-active about dealing with such situations.

True story: Back in the early eighties, I took the girl of my dreams (who would become Mrs. Content Guy) to a movie in New York City. The trailers began to run, and one row behind me and a couple of seats to the right, a woman kept talking to the man she was sitting next to. I listened to it for about 30 seconds, then turned and gave her a look and an enormous "Shhhhh…!"

I then turned to my date and said, "I just told Jacqueline Kennedy Onassis to be quiet."

Which was true. And she did.

From another reader, responding the the story about what the national average movie ticket costs:

$8.50 for a movie?

Have your reader let me know where that theatre is please!

I just paid 14 a piece for me and my wife to go the local UA!

Same here. The nicest theater near me costs $12.50 for a ticket, and more if I want to see something in 3-D or IMAX.

But as I've said here before, that is actually cheap entertainment compared to most other things, as long as it is a good movie and I want to see it.

For the past two weekends, though, there's really been nothing I've wanted to see, so we've stayed home. Not because of ticket prices, but because of movie selection.

Published on: March 31, 2014

In the men's NCAA basketball tournament, the final four going into next championship weekend are the University of Florida, which will play the University of Connecticut, and the University of Wisconsin, which will play the University of Kentucky.


In Major League Baseball's North American Opening Night, the San Diego Padres defeated the Los Angeles Dodgers 3-1. And life begins again.

Published on: March 31, 2014