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: August 13, 2014




    by Kevin Coupe

    "Fresh Talk" is sponsored by Invatron: Proven Technology.  Innovative Thinking.  Intelligent Solutions for Fresh.

    Content Guy's Note: "Fresh Talk" is a new MNB feature, scheduled to alternate on Wednesdays with "Kate's Take."  It will examine all aspects of "fresh," in both the broadest and most focused meaning of that term (depending on the whims of the columnist). "Fresh Talk" is sponsored by Invatron...which you can learn more about here…but which has no input into the subjects covered or responsibility for the attitudes taken.

    Spend any time in Portland, Oregon, and environs, and one of the things you immediately recognize is the broad commitment the city has to great fresh food.

    I'm not talking about the kind of extreme connection to food that is satirized so well on "Portlandia," but just a simple belief that great local ingredients can add up to wonderful dishes, whether made in the enormous number of area restaurants or at home from the ingredients available at the broad range of retail options that are available - supermarkets, specialty stores, farmers markets, and the like.

    One of the things I became aware of during my "adjunctivity" in Portland this summer was the plan for yet another institution that will celebrate local foods - the James Beard Public Market, which has gone through the approvals stage and now is in the middle of fund raising, with a goal of $30 million and a hoped-for opening date of 2018. The James Beard Public Market - named for the famed author and chef who, in fact, came from Portland - will sit on the west side of the Morrison Bridge (see the graphic at left), within view of the Willamette River; it is designed to be a permanent celebration of local foods, but Ron Paul, executive director of the Market (also pictured at left), emphasizes that it will be a practical, user-friendly experience that will appeal to both locals and tourists, and will be able to generate more than enough year-round business to sustain it. The concept al;ready has played out successfully in places like Copenhagen, Oslo and even Philadelphia, he says … and there is every expectation that it can work in Portland.

    And the James Beard Public Market will be all about fresh food.

    I recently had the opportunity to spend time with Ron Paul, touring the site of the Public Market and corresponding via email about his plans, and what he sees as a crying need for such a facility. Excerpts from our discussion follow…

    MNB: Explain the appeal of the "public market" concept in  global sense, and why they make sense in a 21st century urban landscape?

    Ron Paul:
    Public Markets connect producers to their customers in ways that supermarkets never can achieve, and with far more convenience than a weekly Farmers Market. A permanent, daily, year-round, indoor- outdoor food emporium brings people into closer contact with their daily sustenance. Locally owned food merchants (green grocers, cheese and fish mongers, butchers, specialty food sellers, etc.) will showcase local foods whenever possible but will also provide the necessities of everyday culinary life--from near or afar.  That local connection to those growing and selling the food we eat has been, literally, a missing ingredient in contemporary North American food culture. Some areas of the world never lost that connection and are staving off the supermarketization of their food-ways; Americans have the opportunity to repair an already broken food system and public markets are one way to accomplish this goal.

    MNB: You refer to "supermarketization" and seem to suggest that supermarkets have led to a "broken food system."  Some would argue that supermarkets have made more food available to more people at more times and in more places ... but I sense you are referring to something else.  What do you mean by that term?

    Ron Paul:
    Regarding supermarketization of the American food system … We have traded mass availability of foods for the increasing consolidation of the wholesale and retail food system into a surprisingly small group of players. Think Kroger, Safeway, Walmart, etc. With this concentration, the accurate labeling of where your food comes from, how it's produced and under what conditions becomes an intentional mystery to the consumer. The shrink-wrapped sliced mushrooms, the bagged greens, the chicken parts have lost all sense of provenance and, as we see with the number of recalls, built in safety factors that now adhere only to the lowest common denominator of federal regulations. Under the watchful and influential eyes of "Big Food," labeling laws are increasingly irrelevant.

    MNB: Why Portland?  Between the city's already thriving food culture, the farmers markets, the food trucks and the Saturday/Sunday market, why isn't a public market redundant? How is it  different from all those things?

    Ron Paul:
    Portland has been on the leading edge of the local food movement for almost 40 years, although it's been only recently that others have paid attention. It started with Oregon's pioneering land use laws from the 1970s that created "urban growth boundaries" around each city in the state.  This prevented unnecessary urban sprawl and allowed small and mid-size farmers and ranchers to survive and now thrive as more people pay closer attention to the integrity of their food. Even though Portland's food culture is thriving, there are still some missing links in the food chain. A true pubic market offers daily accessibility, convenience, and a permanent public space that has been proven time and time again, across continents and millennia, to be community magnets. People come to public markets because they offer a venue for authentic and personalized commerce. 

    Yes, Portland has a robust food scene but a public market is qualitatively different from a farmers market; it's not a farmers market on steroids. Farmers market sellers must produce the foods that they sell and may not serve as resellers. For example, if you bought the best seafood that the Pacific coast has to offer at a Farmers Market and you wanted to cook it with a squeeze of lemon, lime or orange, you would need to stop at a supermarket to get those non-indigenous ingredients. A public market gives life to the almost-lost professions of independent butchers, greengrocers and cheese and fish mongers. They will curate the products that this local robust food economy is spawning, but they can also reach further to sell foods that are either essential ingredients or out of season here. In a public market setting that works as long as you accurately label each food item that is sold.

    The pubic market also isn't a food cart pod, although prepared foods will be a part of the vendor mix.  More often than not, the restaurant and prepared food providers in the Market will source their ingredients from their neighboring vendors. In many ways, a public market is a small food city within a city that possesses its own culture and ecology. Food carts are an important part of Portland's culture and they will continue to thrive with the Market as a sourcing partner.

    MNB: What, specifically, will make up the James Beard Public Market?  Will these be permanent or revolving installations?

    Ron Paul:
    The Market will have 120 permanent vendor spaces, divided into 12' X 12' stalls. Some merchants will take more than one space while others, especially ethnic specialty food vendors, will take less, including the opportunity to take only a 12' X 6' space. Our planning indicates that we'll have approximately 50-60 permanent vendors but the Market will also accommodate 30-40 "day tables" which will rotate on a regular basis.  The day table participants will showcase their wares, but unlike the permanent merchants, will have no long term commitment and will be able to use the Market to test new food ideas and products.

    MNB: Do you see the Public Market as competitive in a real sense with the various and excellent restaurants and food stores in the city?  Or, to use an example, why would someone like Lisa Sedlar, who is building her own new food business, want to support the Public Market concept?

    Ron Paul:
    New Seasons, Whole Foods, Zupans, GreenZebra and others have provided significant support for the Market. Overall, Portland has a more collaborative food culture than most cities do and this extends from chefs and restaurants to the arena of food retailing. The prevailing wisdom is that what's good for the health of the food system is good for all of the participants--from growers to chefs to retailers.  Restaurants regularly share information on suppliers, staff and real estate while food retailers seem to have a revolving door of players moving from one enterprise to another without antipathy.  Lisa understands this as do most of the home-grown food professionals in the community.

    MNB: What have been the challenges of building support for the Public Market, and where are you in the development process?

    Ron Paul:
    The biggest challenge was gaining site control, a goal that the Market realized close to a decade after the first citizens' group convened. Planning in the abstract and without a site was an important exercise in defining "what" a public market should be but it didn't bring the project to life.  Having the Morrison Bridge site has changed the equation in so many important ways: site-specific concept development defined (and refined) the details about how the Market should function; location creates allies--such as Hotel Rose--and many others; fundraising can follow a more direct path since we can point to a tangible rather than intangible project; and we have a built in political constituency since everyone wants the Market nearby. (Rather than NIMBY, we have the opposite dynamic here: PIMBY--Put It in My Back Yard.)

    One of the biggest challenges was the length of time that it took to secure a site.  Public support for the Market is not difficult to cultivate; it's more difficult to sustain when "there is no there, there."  We now have a highly visible storefront office just a block from the Market's location, a dedicated board and staff, and preliminary concept development and design underway. The public discussion about the Market has shifted from far off "vision" to "budding reality."

    Please see the link to the Market's Concept book here for updated information on where we are in the development process.  The timeline at the end of the booklet will indicate the time but not the trajectory that we're experiencing; the velocity of progress has been close to seismic.

    MNB: So let's pretend it is 2020, and the James Beard Public Market has been open for two years.  Tell me what you'd like the impact of the market to be at that point, and what kinds of continuing goals you will have for it at that point.

    Ron Paul:
    By 2020, the Market will have exceeded our conservative expectations in both annual attendance (900,00+) and sales ($30,000,000). It will become a focal point for the community as an educational resource, an example of the local "maker" economy succeeding--individually for the producers and in the aggregate for the Market's benefit.


    It will serve as a beacon for residents and visitors alike. The Market's education program, with a focus on grandparents teaching their grandchildren about their almost-lost-forever food-ways, will reach ever-more children and families.  And more people will have access to healthy, regionally produced foods than ever before.

    KC's View:
    I think that one of the things that a Public Market can do is raise the bar for how citizens think about their food supply, which in turn can create opportunities for local retailers to raise the level of their game. That may not be as important in some markets - such as Portland - but I'm in favor of anything that builds community, and especially things that build community around food.

    Published on: August 13, 2014

    by Kevin Coupe

    The Los Angeles Times has a piece about the expansion by the Alamo Drafthouse Cinema chain into Los Angeles, a noteworthy move into a competitive market where there is no dearth of movie theaters.

    Alamo Drafthouse, the story notes, "has been lauded by some publications as the best theater chain in America," and currently has 19 locations, with eight more under construction. "Although it mainly operates in Texas, Alamo has been expanding nationwide, adding new venues in Colorado, Virginia, New York and now California," the Times writes.

    And what makes Alamo Drafthouse different? It "specializes in independent and repertory films," the Times writes, and "has developed a cult following for its special events, in-seat food and drink service, and themed movie nights."

    According to the story, "Alamo Drafthouse Downtown will feature a mix of new releases, independent and repertory films, foreign movies, as well as Alamo's signature special programming events. Each of the auditoriums will be equipped with 4K digital projection and will eliminate the traditional front row to maximize the viewing experience.

    "Waiters will quietly serve patrons, who can place orders for food and drinks from a 'state-of-the-art culinary kitchen.' The theater will also offer a craft beer bar featuring an extensive array of California brews. By creating a unique moviegoing experience, including a famously strict no talking or texting policy, Alamo executives say they have been able to grow even in a down market. Whereas industrywide box-office revenue is down this year compared with a year ago, revenue at Alamo is up nearly 3%…:"

    And that's how you succeed, even in a down market that is increasingly competitive. You offer something different, something better, something that makes it worth people leave their homes and spend their money with you.

    It is an Eye-Opener.
    KC's View:

    Published on: August 13, 2014

    The National Association of Convenience Stores (NACS) is out with its monthly NACS Consumer Fuels Survey, examining how gas prices affect consumer sentiment, and the August news is not good.

    "Less than 4 in 10 consumers (39%) now say that they are optimistic about the economy, a sharp decline from 46% the month prior. Consumers age 50 or more were least optimistic, with barely one in three (35%) expressing optimism," NACS said. The 7-point drop overall in optimism was the largest recorded since January 2013, when the survey was launched.

    "If there is any good news in the findings," NACS said, "it’s that consumers don’t expect things to necessarily get worse — at least at the gas pump. Consumers tend to be naturally pessimistic about gas prices but less than half (47%) expect prices to be higher next month, a low for 2014 and a sharp drop from July (64%)."
    KC's View:
    It isn't any sort of big revelation, I suppose, but this certainly serves as a reminder of how important perception is. I've read numerous stories in recent days about how gas prices have not been going up, despite all the problems in the Gulf region. In fact, they are lower than a year ago. Bug even though people may be paying less at the pump, all the headlines persuade us that we should have diminishing confidence in the economy … even though by pretty much every measurement, the economy seems to be gaining strength.

    Published on: August 13, 2014

    Two stories of interest related to the Market Basket tumult in New England…

    • The Boston Globe reports that Market Basket co-CEOs Felicia Thornton and James Gooch "have sent a letter to employees who have walked off the job offering what appears to be a final chance to return to the company under their leadership. Employees have until Friday to report to work," the letter says.

    The letter is the second time that the company has set a deadline, and appears to be a way of establishing that if the employees don't show up, they have resigned, not been terminated, which gives them less legal protection and no access to unemployment benefits. The letter follows weeks of controversy at Market Basket, where employee rallies and customer boycotts have followed the firing of CEO Arthur T. Demoulas, who has been locked in a long battle with his cousin, Arthur S. Demoulas, over control of the company. The general perception is that Arthur S. Demoulas, whose side of the family owns 50.5 percent of the company, wants to take money out of the business, while Arthur T. Demoulas wants to invest in the business and its employees.

    Arthur T. Demoulas has been negotiating with the company to acquire the percentage that he does not own, and while reports are that the two sides have agreed on a price, talks have broken down over what he has called "onerous" demands by the board. Delhaize USA also reportedly has bid to acquire Market Basket.

    According to the story, "Most store workers and managers have been reporting to their shifts in recent weeks—though for most part-time workers, hours have been cut to nothing as a customer boycott has crippled business operations. However, since worker action in protest of the firing of former CEO Arthur T. Demoulas began in earnest on July 18, most warehouse and headquarters workers, and traveling supervisors, have not worked.

    "Employees and many boycotting customers have stayed adamant that the ongoing movement will not end until Arthur T. Demoulas is reinstated as CEO."

    The letter says:

    We are writing one final time, to invite you to return to work and perform your job obligations. If your role requires that you primarily work at the company’s headquarters or distribution facilities, you must return to such role ready to fulfill your duties no later than Friday, August 15, 2014. Alternatively, if your job is based in the field, you are required to return to work and contact either of us prior to August 15 to review the work you are performing. Should you choose to ignore either of these directives, the company will consider you to have abandoned your job, thereby ending your employment with the company.


    The Globe also reports that "although Market Basket has long prided itself on offering the cheapest goods around, a new study has discovered that several other grocery stores in Massachusetts carry less expensive goods. Aldi, Price Rite, and Save-A-Lot consistently offered lower prices than Market Basket, according to the study, which was published by Consumer World … The total at Aldi was a full 17 percent lower than the one at Market Basket. Price Rite and Save-A-Lot were 10 and 9 percent cheaper than Market Basket respectively.

    "The findings suggest that customers can still find the same low prices that they did at Market Basket, although they may have to accept a less extensive selection of foods. Those three supermarkets often offer a far more limited selection than Market Basket."
    KC's View:
    Two thoughts here…

    One, the letter sounds like an attempt to see if the current management can somehow regain control of the narrative before it has to sell the company. I cannot imagine it will work … the employees have come too far and seem too close to victory to give up now.

    Second, the story about Market Basket's prices is exactly the kind of story that can hurt the chain in the long run, because it calls into question its presumed price dominance.

    I have to believe that this thing gets resolved by Labor Day. If it doesn't, it will make it harder and harder for Market Basket to get back on its feet.

    Published on: August 13, 2014

    • The Associated Press has a story about Walmart's aborted test of a ‘Scan & Go’’ app that would allow shoppers "to use a smartphone app to scan items they want to buy as they walk through store aisles. In theory, they could speed through self-checkout." Walmart tested it in 200 stores, but it never got traction, and so the company dumped the project.

    But does Walmart see it as a failure? No, because Walmart "took what it learned from 'Scan & Go' to create another service: It found that customers like being able to track their spending, an insight that became the impetus for a national program that enables shoppers to store electronic receipts."

    The AP writes that this illustrates how Walmart, and other retailers, "increasingly are using the nimbler approach to innovating that Silicon Valley startups are known for. Rather than perfecting a program before rolling it out — as most retailers do — they’re doing more testing and refining as they go along. If the tests work, they’re rolled out nationally. If they don't, retailers shutter them and incorporate what they learn into other projects." For example, Walmart is testing same-day delivery in a number of markets, looking to see what it needs to do in order to compete with Amazon, which is moving in the same direction.
    KC's View:

    Published on: August 13, 2014

    The Boston Globe reports that Open Table, the online restaurant reservation service, "has created a mobile payment system that lets users pay from their tables," and plans to expand it from a San Francisco test to more than 20 cities by the end of the year.

    The story says that "the service lets any OpenTable app user add a credit card to their account and “view and pay their check at participating restaurants with a few taps."
    KC's View:

    Published on: August 13, 2014

    Business Insider has a story about Marc Lore and Vinit Bharara, co-founders of Quidsi, which created Diapers.com, Soap.com, Wag.com, and other sites, and then was acquired by Amazon for $450 million.

    According to the story, "Before the acquisition, Amazon had more-or-less declared a pricing war against Diapers.com. Amazon started offering deep, deep discounts on diapers, trying to undercut the smaller company. This was not the first time that Amazon was willing to lose money temporarily to stave off a competitor. Not long after Amazon started its aggressive price chopping, Quidsi sold."

    Lore and Bharara stayed with the company for four years, but now have left, and "Lore has gathered two other former Quidsi teammates to start a commerce company called Jet." While he can't launch it yet because of a non-compete, Lore reportedly has said that he wants to build something even bigger than Quidsi … which means that Amazon may start getting competition from yet another quarter.
    KC's View:
    I get that some folks may have a bone to pick with Amazon, and I think the market gets a lot more interesting and competitive when these feelings result in new businesses. But it is hard to feel too sorry for someone who got to cash a $225 million check…

    Published on: August 13, 2014

    • Price Chopper Supermarkets/Golub Corporation announced today that Sean Weiss has been promoted to the position of Director of Business Intelligence and Pricing, responsible for analytics, business planning, systems integration, budget preparation, consumer insights and new store marketing for the 134-store chain.
    KC's View:

    Published on: August 13, 2014

    Lauren Bacall, who leapt to stardom at age 19 when she was cast in To Have and Have Not opposite Humphrey Bogart, whom she later married, has passed away of a suspected stroke. She was 89.

    Bacall starred with Bogart in three more films - The Big Sleep, Dark Passage and Key Largo - making their onscreen partnership one of the most memorable in movie history. She was married to Bogart for the last dozen years of his life, and then fashioned for herself a solid career both onstage and in the movies, winning a Tony award for her lead role in "Applause," a musical adaptation of the film All About Eve. Among her better film appearances - Murder On The Orient Express, and The Shootist, starring with John Wayne in his last film, in which he played an aging gunfighter dying of cancer, and in which her performance was no doubt informed by her experience with Bogart.

    And, memorably, she even showed up in "The Sopranos," playing herself and being punched out by Christopher Moltisanti.
    KC's View:
    Want to watch two of the more sexually charged scenes in movie history? Just take a look at these two clips - one from To Have and Have Not and the other from The Big Sleep. Absolutely nothing specific or explicit is said, and yet they are enormously hot … and leave no doubt about why Bogart was captivated by Lauren Bacall.

    To Have and Have Not.

    The Big Sleep.

    Published on: August 13, 2014

    Regarding the Amazon-Hachette battle, one MNB user wrote:

    The Walmart pricing model is so much better than Amazon.   Category margin goals are set and all products marked up to the margin goal (pre-price comparison).  Let suppliers figure out what price point they want achieve.  If the Amazon margin on eBooks is 30% then whatever Hachette charges Amazon the retail price reflects Amazon’s margin goal.

    I think this issue is about Amazon.  They want a lower price from Hachette and they want a guaranteed profit margin of 30%+++ AND for Hachette to cover some temporary promotion markdowns/sales.

    Reminds me of the old Sears model.  I’m disappointed to see Amazon digress, going down this path.  It’s a waste of management attention.  They should be focused on logistics, pleasing the customers, and new technology.  The old buyer-pressure and dealing is so old school.


    From MNB reader Lonn Whitmill:

    I do not claim to understand the economics of the publishing business but it appears to me that Amazon is attempting to make more money selling books than the publisher does in publishing them.  The entire weight of risk falls on the publisher.  Why does Amazon feel that they deserve to make as much or more just to fill an order.  And secondly I assume, with some trepidation as when you assume we all know where that leads you, that Amazon is attempting to gain competitive advantage over other resellers again at the expense of the publisher.  They should face the idea of making money on the sell and not on the buy. 

    Call me old fashioned, well at least old, but I will go to the book store to buy my Hachette books, and probably more than that, and leave Amazon to the rest of you.


    And from another reader:

    Value propositions are complex equations. Price is always an important factor in them. However, if there is one is one lesson e-commerce merchants should draw from Brick and mortar retailing, it is that defaulting to lowest price as the primary component of a competitive position is a risky choice. By definition, there is only one lowest price and there is no guarantee any retailer can always occupy that position. For example, even WalMart struggles versus dollar stores when it comes to pricing competitiveness. But perhaps more importantly, over emphasis on price trains the shopper to under-appreciate other aspects of value which can be more sustainable differentiators.

    Finally, I agree that Amazon's battle with publishers over pricing is not unique....and that is the tragedy. They are missing a huge opportunity to create more collaborative relationships with suppliers.

    The rationale that it is justifiable to block shoppers' access to products on a timely basis because that is what retailers have always done to create leverage is ridiculous. Amazon is making a big mistake that will likely be to their detriment long term.





    On another subject…

    Yesterday, in noting the suicide of Robin Williams, I wrote:

    All I could think about yesterday, after hearing about Williams' apparent suicide, was how this was a guy with access to every possible resource, and with the proven love and respect of his industry and millions of fans … and he could not climb out of that emotional hole in which he found himself. There must be so many people out there who are suffering to the same degree, but who feel that they have nobody to talk to, no options, no prospects for happiness, nobody cheering them on. Many of us know such people, and this reminds us how tenuous a hold they have on life.

    One MNB reader wrote:

    just read your comments on Robin Williams' passing and wanted to say that I think you conveyed the sadness (and unfortunate truth) of the situation in one of the most sincere and honest ways I’ve read. He did have endless amounts of love, support, and resources – but unfortunately that wasn’t enough…. 

    Thanks for always sharing your insightful observations.


    But another reader was, shall we say, less impressed…

    I’m sure you’ve offended lots of people by characterizing Robin’s illness as emotional, that he was sad and lonely.  People cheering him on would not an effective treatment for cancer nor is it for depression as it is a physical brain disorder.  I think you should retract your comments on this one.…

    I don't think I was suggesting that his problem was just emotional neediness, as opposed to mental illness and depression, which are far more serious and can have tragic consequences. If I left that impression with anyone, I apologize.

    Like a lot of people, I suspect, I've watched a number of Robin Williams clips over the past 24 hours, most of them from concert appearances, and I've often found myself dissolved in tears of laughter … and I cannot imagine the kind of pain that must have been going on there for him to be suffering so much while making people so happy. This is just so unbelievably sad.




    Finally, reacting to my piece last week about novelist Ace Atkins, MNB reader Clay P. Dockery wrote:

    Thanks for linking this article.  As an alum of Ole Miss, I always enjoy stories about the university, town of Oxford and many of the unique residents!  If you have never attended a football game in Oxford and seen the pageantry that is the finest tailgating in America, you should put that on your bucket list.  Hotty toddy!

    Is that an invitation?
    KC's View: