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    Published on: April 14, 2014

    by Kevin Coupe

    Fifty years after the opening of the New York World's Fair, the Associated Press has a piece about the predictions that came true … and those that did not.

    Among the prognostications that hit the mark, the story says were the picture phone (see Skype and FaceTime), a computer that "would answer scientific questions or give out recipes from a cookbook" (see Google) and animatronics (which presaged the computerized technologies that revolutionized the movies).

    Not so accurate: "It included scenes of colonies on the moon as well as in Antarctica, huge underwater dwellings and a machine that used a laser to cut through rainforests, leaving behind paved roads."

    And, of course, the use of jetpacks … except in Thunderball (which came out a year later, in 1965).

    It is an Eye-Opener…and, I think, a challenge to all of to use our imaginations to consider what the next great and small revolutions might be, and how we can explore physical, cultural, scientific and even spiritual frontiers.
    KC's View:

    Published on: April 14, 2014

    The Wall Street Journal reports this morning that as Tesco prepares to announce its annual sales and profit numbers later this week, the pressure is "piling up" on the company's CEO, Philip Clarke to turn around the world's third-ranked retailer.

    The story says that "the British supermarket chain's market share and stock price are languishing at near-decade lows," and that it is battling on a variety of fronts to prevent any further erosion of its UK market share. On the one hand, discount chains such as Aldi and Lidl are growing sales at the expense of the traditional supermarket sector, forcing all the players to engage in a price war that is putting enormous pressure not just on Tesco, but also on the likes of Walmart's Asda Group.

    "But competition and changing trends have hit Tesco the hardest," the Journal writes.

    Clarke has responded to the situation by scaling back on international investments, such as in the US and Japan, and investing in "store revamps, recruitment drives and attempts to entice customers with upmarket coffee shops, bakeries and family-friendly restaurants. But those moves haven't reversed falling sales."
    KC's View:
    I would not want to be Philip Clarke this week … he would appear to be in for what the late, great Bob Murphy used to call "nine miles of bad road."

    At some level, it almost appears that Tesco's biggest problem is the lack of a cohesive and well-communicated strategy. There's a slight sense of desperation that seems at odds with the well-oiled machine that was created by Ian Lord MacLaurin, and continued by Sir Terry Leahy (though it ends up that the latter was building an enterprise that was not as sustainable as many believed).

    It isn't all Clarke's fault. The competitive landscape has changed, and he's so busy playing defense that it is hard to make any offensive headway. But that doesn't make him any less responsible.

    Published on: April 14, 2014

    The Wall Street Journal reports that Amazon is expected to release a new smartphone with a 3-D screen later this year, with an announcement scheduled for June and shipping slated for September - in time for the end-of-year holiday shopping season, and putting it squarely into a battle that has been dominated by Samsung and Apple, which together have 49 percent of the worldwide smartphone market.

    The story says that Amazon "has been demonstrating versions of the handset to developers in San Francisco and its hometown," and that it "hopes to distinguish its phone in a crowded market with a screen capable of displaying seemingly three-dimensional images without special glasses … the phone would employ retina-tracking technology embedded in four front-facing cameras, or sensors, to make some images appear to be 3-D, similar to a hologram."

    The Journal notes that the expectations reflect what appears to be an increased emphasis on devices at Amazon:

    "News of the phone comes as Amazon moves more deeply into designing and making hardware. Last week, it unveiled its Fire TV set-top box and said it will soon begin distributing a wand customers can use to scan product barcodes at home to re-order groceries and other goods without logging into their computers. It introduced new versions of its Kindle Fire tablets last year.

    "But Amazon approaches hardware differently than many other companies. Chief Executive Jeff Bezos has said he prefers Amazon to profit from customers buying services through Amazon hardware, rather than profit from the devices themselves."
    KC's View:
    What makes this apparent shift in strategy by Amazon so interesting is that it can be anticipated that pretty much everything Amazon does is aimed at selling stuff. The Kindle was designed to sell digital books. The Fire TV, I think, eventually will allow people to be watching a program and buy products they see onscreen (which will ramp up the whole product placement industry). Clearly the wand, dubbed Amazon Dash, is aimed at selling groceries … though I must admit that I'm not sure why they decided to make it a separate device as opposed to integrating the service into a smartphone application.

    Expect that an Amazon smartphone will be designed to facilitate buying. Especially buying from Amazon. Or through Amazon, as other retailers adopt its payment processing systems.

    It's Amazon's world; we're all just living in it. (Or at least that seems to be Jeff Bezos' vision…)

    Published on: April 14, 2014

    The Wall Street Journal had an interesting piece the other day about how some chains - think Fairway, Fresh Market, Fresh & Easy - that have been trying to dip their beaks into the action dominated by Whole Foods have found the experience to be a little more challenging than expected.

    The main problem seems to be that with success comes competition, which has made the road tougher than expected for some chains.

    The whole story can be read here.
    KC's View:

    Published on: April 14, 2014

    The Financial Times reports that Walgreens management is under pressure from some shareholders to relocate its corporate headquarters to Europe, a move that could save it significant tax exposure - a concept called "inversion."

    It would, in fact, be one of the largest tax inversions ever attempted, the story says.

    "At a private meeting in Paris on Friday," FT writes, "investors owning close to 5 per cent of Walgreens’ shares lobbied the company’s management to use its $16 billion takeover of Swiss-based Alliance Boots to re-domicile its tax base … The investor group, which included Goldman Sachs Investment Partners and hedge funds Jana Partners, Corvex and Och-Ziff, requested the meeting after becoming frustrated by Walgreens’ refusal to consider relocating, according to people familiar with the matter.

    "In a note last month, analysts at UBS said Walgreens’ tax rate was expected to be 37.5 per cent compared with 20 per cent for Boots, and that an inversion could increase earnings per share by 75 per cent. They added, however, that 'Walgreens’ management seems more hesitant to pull the trigger near-term due to perceived political risks'."

    While Walgreens management may be resistant, FT reports, the Paris discussions were characterized as "constructive."
    KC's View:
    I recognize the tax problem. But Walgreens risks an enormous political blowback if it becomes a European company. Just as, I'd expect, there could be political blowback against governmental policies that force such a high-profile entity offshore.

    Published on: April 14, 2014

    Rite Aid Corp. said last week that it has acquired RediClinic, a retail medical clinic chain that it now plans to operate as a wholly owned subsidiary. Terms of the deal were not disclosed.

    Rite Aid chairman/CEO John Standley said in a prepared statement, "Retail clinics play a critical role in today’s health care delivery system and will play an important role in Rite Aid’s overall health and wellness strategy. We are committed to working with RediClinic to expand its current footprint in Texas and, in the near future, begin to bring its expertise in delivering convenient healthcare and wellness programs to Rite Aid customers in select Rite Aid markets.”
    KC's View:
    The retail medical clinic business seems to be getting a lot of traction lately. And I know folks who say that they've been extremely impressed with their experiences there …

    Published on: April 14, 2014

    Yup. You read that headline correctly.

    The Bloomberg Businessweek reports this morning that Tesco, the Britain-based retailer that sold its Fresh & Easy Neighborhood Markets chain in the western US to Ron Burkle's Yucaipa Cos. last year, plans to bring its stand-alone clothing store, F&F to the US later this year.

    Fresh & Easy was sold after several years of losses and an apparent inability to connect with US shoppers.

    Tesco, the story says, "plans to open seven outlets on the east coast this year with franchise partner Retail Group of America, the Cheshunt, England-based company said in a statement late last night. The first will open in Boston in May, with planned locations including New York, Virginia and Maryland … F&F now has 43 franchise stores in 10 countries."
    KC's View:
    Based on the Fresh & Easy experience, I can only imagine what the second "F" stands for.

    Published on: April 14, 2014

    The Chicago Tribune reports that IKEA is building a wind farm in downstate Illinois that it says "will produce 65 percent more electricity than its U.S. operations consume," ensuring that "its stores will never have to buy a single kilowatt of power again."

    Technically, this isn't exactly true, since most of IKEA's stores are too far from the wind farm to benefit directly. However, IKEA will sell power generated by the wind farm on the open market, which will allow it to more than recoup its energy expenses.

    Here's how the Tribune frames the decision:

    "With the project, Ikea’s first wind investment in the U.S., the company is among a growing number of companies taking care of their energy needs by buying or investing in power produced by the wind and sun.

    "Microsoft announced late last year it would purchase power from a 55 turbine wind farm in Texas. At the same time, Facebook announced it would power its new Iowa data center using wind energy from a wind farm MidAmerican Energy is constructing in the state. Over the last few years, Google has been ticking up its wind power purchases and investing in wind projects in Iowa, Oklahoma and Texas.

    "The American Wind Energy Association credits big box retailer Wal-Mart Stores Inc. with starting the trend in 2008 when it made a substantial purchase of wind energy from a Duke Energy-owned wind farm in Texas."
    KC's View:

    Published on: April 14, 2014

    • The Wall Street Journal reports that Walmart - which has paid almost $10 million in fines to Chinese authorities "for using misleading pricing, selling poor-quality products and even peddling donkey meat that turned out to be fox" - now is challenging the government there, "telling Chinese authorities they need to clean up their own act."

    The story notes that in China, unlike in other countries, retailers are held responsible for food safety and labeling issues, not manufacturers. However, there seems to be a pattern of global retailers being called out for missteps more often than local companies, and Walmart is pushing Chinese regulators to be fairer in their application of the the rules.

    In addition, the story says, Walmart is calling for a supply chain-wide approach to food safety that would result in responsibility being taken in every step of the process, not just at retail.
    KC's View:

    Published on: April 14, 2014

    • The New York Times this morning reports that Kraft Foods is embarking on a makeover of its Maxwell House coffee brand, including "logos, packaging, new products, the brand’s presence in digital media and social media and advertising that carries the theme 'Say good morning to a good day.' The ad budget will also be increased substantially."

    The story notes that while Maxwell House is one of three billion-dollar brands at Kraft (the others are Kraft cheeses and Oscar Mayer), but that the coffee brand has fallen behind Folger's in recent years.

    “We’re making a commitment to consistency, but also to being contemporary, relevant for consumers who’ve loved the brand a long time, and giving the next generation of consumers reasons to embrace the brand," says Chris McClement, senior director for Maxwell House.

    Reuters reports that Coldwater Creek, the women's clothing chain, has filed for Chapter 11 bankruptcy, with plans to close all its 365 stores within the next few months.

    "While we are extremely disappointed with this outcome, the company's declining liquidity position and the challenging retail environment, together with the fact that we have exhausted all other possibilities, requires that we take this action,” says CEO Jill Dean.

    • The Associated Press reports that Subway has promised to eliminate an ingredient called azodicarbonamide from its bread by next week.

    The story notes that the chemical "is approved by the Food and Drug Administration for use as a bleaching agent and dough conditioner. It can be found in a wide variety products, including those served at McDonald’s and Starbucks and breads sold in supermarkets. But the petition gained attention after it noted the chemical was also used to make yoga mats."

    CMO Tony Pace tells the AP that the phase out has been ongoing since late last year, but conceded that social media uproar over use of the chemical has hastened the pace of change.

    Business First in Buffalo reports that "a new line of specially-crafted soft cheeses are on the shelves of Wegmans Food Markets including the 11 stores in the Buffalo Niagara region.

    "The cheeses including Bries, Camembert and a bourbon-washed Pie d’Angloys come from Wegman’s just-opened 'Cheese Cave' on its suburban Rochester production campus. The first cheeses were due in all 83 of the chain’s stores this week and cap a research-and-development period that began more than one year ago … The research and technology behind the soft cheese production came from a partnership developed between Wegmans, Cornell University and Vermont Creamery as well its own affineur, or cheese expert, Eric Meredith."
    KC's View:

    Published on: April 14, 2014

    • The Chicago Tribune reports that Jewel-Osco has named Scott Hays as its VP-operations, tasked with overseeing the chain's ongoing remodeling efforts and re-opening stores acquired from now-defunct Dominick's. Hays most recently was a district manager with Jewel's parent company, Albertsons, in its Dallas/Ft. Worth division.
    KC's View:

    Published on: April 14, 2014

    I continue to get email responding to to my "Birth Order" FaceTime commentary, which lambasted a couple of New York sportscasters (Boomer Esiason and Mike Francesa) for suggesting that NY Mets second baseman should not have taken three days of paternity leave, missing two games, when his first child was born.

    MNB reader Gary Harris wrote:

    I was surprised at Boomer Esiason’s comments especially in light of an HBO Real Sports program I had seen just a few months ago.

    It seems that Boomer attended a sports award banquet early in his career. The keynote speaker was sports journalist Frank Deford, who spoke about the recent loss of his daughter to Cystic Fibrosis. Not long after, Boomer and his wife went through a similar experience when his son, Gunnar, was diagnosed with the same disease.

    The show looks at the amazing series of events that caused Esiason’s and Deford’s paths to cross, and the work that’s been done to fight this disease, especially on Boomer’s part. While I’m sure his experience gives him a different perspective, I would have expected it would put him squarely in the ‘do what you need to do for your family’ camp rather than the ‘take one for the team’ crowd.

    Agreed. I think he just caught up in the whole "jock ethic" thing, which is why he apologized the next day.

    MNB user Mark Raddant wrote:

    When my oldest child was born, I was there.  It had been a very hard labor for my wife, and my son was born blue with the cord wrapped around his neck.  The hospital staff was great and when my son was in the clear they handed him to me.  His eyes opened wide and looked right into mine.  He is about to turn thirty and every once in a while when we are together, our eyes meet and I swear that first look is still there; that connection made in those first moments still exists.

    I made a point to look into my other two children’s eyes at their birth.  I would not give up those moments and the connections that were forged then for anything.

    From MNB reader Chris Zook:

    I think it’s a great idea for ballplayers to be able to take time off for the birth of their kids and this is something new for them to be able to do without causing too many problems for their team player wise.  I’ve never have had the opportunity to give birth but my first thought was how would the father feel if something would have happened to his wife or child during childbirth and he wasn’t there?  No one knows if it’s going to be an easy birth or if complications are going to come up in the delivery or a day or two after.  I’m a White Sox fan and I’m happy when I hear that one of our players has missed a few games to be with their wife for this life event.  It shows that people care and there is more to life than just baseball.

    And MNB reader Keith Gleason:

    Thanks for the comments.  It is hard to believe that such a controversy could erupt over something like this, but then again, nothing seems to surprise me anymore.  I, like you, am a father of three, and I can honestly say that my life changed tremendously when my first son was born.  I took a week off, and while at times I was probably more in the way then a help, I wouldn’t trade the time for anything.  This is particularly true when, at 5 months old, my son was diagnosed with a serious congenital heart disease.  Over the years, I spent a lot of time taking time off from work due to extended hospital stays and the births of my next two children.  Some of my bosses were supportive, others not so much.  I learned early that family comes first.  Period, no exceptions.  Did it hurt my career?  Probably.  Due to my son’s heart condition, we were limited in where we could live.  The opportunity to work in the Foreign Service was passed up because it would require us to live in places where medical services wouldn’t have been the best.  Chances of working my way up the corporate ladder were limited because I wasn’t willing, in the words of one VP I worked for, to “put first things first”, i.e., working long hours including weekends to show that my job was my first priority.  Whatever.  I have no regrets.

    I have a wonderful family that brings me more joy and happiness than any job could ever deliver.  That point was hammered home when my son succumbed to the heart disease he had battled so courageously for almost 16 years.  Regrets?  Only that I couldn’t spend more time with the son that I lost after a very short, incredibly fast 15 years, 11 months and 17 days.  A job is just a job; family is forever.

    MNB reader George J. Denman wrote:

    George Washington said it best: “ Labor to keep alive in your breast that little spark of celestial fire called conscience.”  While both of my children were adopted at older ages, I would have done anything to have been at their births. I just don’t get where your job could ever be that more important than experiencing the birth of your child. Its baseball for god’s sake…. Not brain surgery.

    But, of course, there's always one:

    A professional athlete on a team needs to put his team and winning first.  He was very selfish only thinking of himself and his wife ahead of his team, his owner, and his fans.  I really doubt you would have attended your child's own birth if it was going to personally cost you the same economic impact of what a second baseman could cost a team.  Then again perhaps his mind would not be in the game.

    My first child, my boss would not let me off work but I did get there as soon as my shift was over.  Second child I just took the first child to McDonalds.  It was late at night and no one around to babysit.  Funny how some men like to watch the birth but when its time for the circumcision, they are nowhere to be found.

    There are a couple of things that astound me here.

    One is that having been denied the opportunity to be at your first child's birth by a boss (a decision that strikes me as incomprehensible), you don't learn from it, but rather double down … saying that a person should put business ahead of family. There are few things more tragic than a person who does not learn from experience. (Though one of them may be a man who does not understand what it is to be a man.)

    As for your second child's birth … it seems to me that there are two likely possibilities. One is that you didn't try very hard. The other is that you don't have any friends. (Knowing who wrote this email, I suspect the latter. And so would many longtime MNB readers.)

    I am sympathetic to people who, because of personal circumstances, are unable to do things like be at their child's birth. I am less so toward people who don't seem to care.
    KC's View:

    Published on: April 14, 2014

    • Golfer Bubba Watson won the Masters yesterday for the second time in three years, finishing with an 8-under-par 280.
    KC's View:

    Published on: April 14, 2014

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KC's View: