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    Published on: November 14, 2014

    The Boston Globe reports that there is a new company out there described as "Uber for laundry."

    Washio, the story says, is an app that "allows users to signal for their dirty laundry to be picked up, washed or dry cleaned, and brought back home within 24 hours, all nice and folded. Users pay automatically through the app, the rate depending on just what is getting cleaned. It is, truly, a sort of Uber for your dirty clothes."

    The story notes that "Boston joins Los Angeles, San Francisco, Washington, D.C., and Chicago as Washio cities. Judging by its website, the app also appears likely to launch in Seattle and San Diego at some point."

    The Globe concedes that "laundry pick-up and delivery services already exist. For this service and for all the others, the thinking seems to be that cabs do, too, and that didn’t stop Uber. And Washio follows the Uber playbook to a T. Its drivers/laundry haulers aren’t employees of the company. Instead, they’re contractors, plucked from the Internet and put on the road to handle strangers’ laundry."

    The story concludes: "Disruption is a term that becomes riper for mockery by the day, and that’s in part because efforts to disrupt have become so predictable. But if it’s a familiar script—put it on a smartphone, throw it out to contractors, and you can change an industry—it’s one that performs well at the box office. Washio has raised $14 million so far from a slew of high-profile investors."

    I'm not sure I'd actually use this app - I've had the same dry cleaner for a quarter-century, and I think it is important to have a personal relationship with the person responsible for your clothes. But I'm also pretty sure that young folks don;t necessarily share these concerns, and so there's no reason that Washio can't work.

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

    Published on: November 14, 2014

    Publishing company Hachette and e-tailer Amazon announced yesterday that they have resolved their months-long dispute, bringing to an end a business disagreement that turned into a cultural fight about the tension between art and business.

    The New York Times reports that specific terms of the multiyear contract were not disclosed, but both sides declared themselves satisfied - Hachette gets to set the prices for its e-books, and Amazon sets to set incentives that will encourage Hachette to keep prices low.

    The deal means that in short order, books published by Hachette's various imprints will now become instantly available on Amazon, rather than being delayed for weeks, even months. The war over book pricing was launched when Amazon virtually halted the sale of books published by Hachette as a way of forcing the publisher to agree to lower prices on e-books. Hachette responded by saying that Amazon was being a bully, using its ever-increasing market power as a way of pushing it into near-irrelevance.

    The Times writes that "when Amazon raised the stakes by discouraging sales of Hachette books, that incited the ire of those authors and then other members of the literary community. Douglas Preston, a thriller writer published by Hachette, formed Authors United, a group that has about 1,500 members, including some of the most prominent and popular writers in the country." Contacted yesterday after a deal was reached, Preston told the Times: "I’m relieved that Amazon and Hachette reached an agreement … (but) if anyone thinks this is over, they are deluding themselves. Amazon covets market share the way Napoleon coveted territory.”
    KC's View:
    Leave it to a thriller writer to come up with the best description of the state of affairs.

    Here's the deal. They may have come to a deal, but it won't mean that this will be the last time that Amazon comes to blows with its suppliers. Amazon's very existence is built on the notion that traditional supply chains can and should be disrupted - I'm absolutely convinced that the folks at Amazon believe that many publishers can be disintermediated out of existence, though it may step a little bit more carefully in the future so it doesn't lose control of the narrative again.

    Publishers (and other kids of suppliers) are going to have to continue to work hard to guard their territories and maintain relevance. And small-time writers (and I count myself in that group) will continue to rely on Amazon to help find an audience.

    Published on: November 14, 2014

    The Washington Post this morning reports that for the first time in seven quarters, Walmart was able to announce same-store sales increases, prompted, it said, by lower gasoline prices that gave its customers more disposable income to spend in its stores.

    According to the Post, "While low gas prices are expected to remain a tailwind for Wal-Mart and other retailers through the holiday season, Wal-Mart said it expects to face other key challenges. Once again, promotional pricing will make for a fiercely competitive environment, and executives said a lack of must-have electronics items this year could create drag during a quarter when the entertainment category typically makes up a large share of its sales."

    One measure of how Walmart plans to compete: Reuters reports that Walmart "has informed managers of its roughly 5,000 stores across the United States that they can match prices with Amazon.com Inc and other online retailers, the head of the company's U.S. business said on Thursday."

    The company said that the memo simply formalizes a practice that many managers already were doing.

    The New York Times writes that "while the offer was sure to draw attention and traffic, it also pointed to an intensifying price battle spanning brick-and-mortar stores and the web that could eat away at already thinning margins, according to some analysts."
    KC's View:
    As I understand it, Walmart saw strong-than-expected performance from its Sam's Club and Neighborhood Market stores, as well as in categories such as home goods, apparel, and HBC … plus online sales. But the company said that grocery sales were flat, which explains why the company is urging its stores to do a better job in areas such as fresh produce, where it needs to build strength.

    Published on: November 14, 2014

    Business Insider has a story about a new NPD Group study about the top 10 foods of the last 10 years, the foods that "are taking over the American diet."

    They are, in order: yogurt, bottled water, pizza, poultry sandwiches, Mexican food, fresh fruit, prepackaged bars (such as granola bars), ice cream sandwiches, chips, and pancakes.

    According to the story, "foods that fared the best were ones that could be easily prepared and consumed at home."
    KC's View:

    Published on: November 14, 2014

    • In Toronto, the Globe and Mail reports that "Wal-Mart Canada Corp. is preparing to let go about 200 of its employees as it feels the pressures of an increasingly fast-changing and crowded retail landscape, industry sources say.

    "The layoffs, mostly at its head office in Mississauga, come on the heels of it cutting about 750 jobs across the country last spring in a store management restructuring."
    KC's View:

    Published on: November 14, 2014

    Crain's Chicago Business reports that Macy's "is joining the same-day-shipping frenzy as the holiday shopping season sets in.

    "Customers in Chicago and seven other cities can now buy items on the department store chain's website and have them delivered to their door the same day. The service costs a flat $5 if online purchases exceed $99, while smaller orders are subject to standard shipping rates plus an extra $5. Customers, who must place their orders by 1 p.m. Monday through Saturday and 11 a.m. Sundays, can select a desired two-hour window for delivery."

    According to the story, Macy's will use Deliv to handle the fulfillment process; the Crain's story says that Deliv "provides same-day delivery for stores in major malls owned by General Growth Properties Inc., Macerich, Westfield Corp. and others, as well as for smaller local retailers."
    KC's View:

    Published on: November 14, 2014

    • The New York Times reports that Warren Buffett's Berkshire Hathaway is going to acquire Duracell from Procter & Gamble. According to the story, "P.&G. will first recapitalize Duracell by injecting about $1.8 billion in cash into the subsidiary. Then Berkshire Hathaway will take over the battery business by exchanging its shares in P.&G., currently valued at about $4.7 billion.

    "The complicated maneuver will let P.&G. and Berkshire Hathaway avoid significant taxes. And it will allow P.&G., which also owns Crest toothpaste and Tide detergent, to part with Duracell more quickly than under its original plan, in which P.&G. would have let its shareholders exchange some of their holdings for shares in Duracell."


    • Weis Markets said yesterday that it is pledging "to reduce the company’s greenhouse gas emissions 20 percent by the year 2020."

    According to the announcement, "Weis Markets is asking all of its associates to sign the '20% by 2020' pledge, acknowledging the company is committed to sustainability practices that minimize its impact on the environment.

    "With the pledge, the company hopes to increase its recycling rate by five percent each year with a goal of zero waste; reduce energy usage by two percent each year and replace 50 percent of its tractor fleet with cleaner fuel vehicles within three years."
    KC's View:

    Published on: November 14, 2014

    • The Grocery Manufacturers Association (GMA) yesterday said that Roger Lowe, described as having "more than 35 years of experience as corporate communications leader, public affairs consultant and reporter," has been hired as Executive Vice President of Strategic Communications. Lowe most recently was senior vice president of communications at the American Red Cross.
    KC's View:

    Published on: November 14, 2014

    Yesterday, in FaceTime, I mentioned that one reader largely dismissive of women in business had written in after I reported that Larree Renda was leaving Safeway after it is acquired by Albertsons, to suggest that her role as head of the Safeway Foundation was a "make work job" developed to allow Safeway to fill some quotas.

    I said I thought he was an idiot, though hardly the only person who might feel that way.

    Thank goodness someone wrote in to address the issue more eloquently - Larree Renda:

    After reading today’s "FaceTime with the Content Guy: Heart and Soul," I decided; now it’s personal. When I read what the “moron” said about women in our industry in general I thought the same as you and countless others, what an idiot. Now that I know he mentioned my work with The Safeway Foundation as a “make work job developed to allow Safeway to fill some quotas”, I don’t just KNOW he is a moron, now I want to kick his ass (ok, butt app).  He did what many morons do (which accurately earns them the right to be called morons). He minimized the job of a woman because he is so sure that her gender means she doesn’t deserve credit for having a real job with real responsibilities.

    I am proud of the fact that I founded The Safeway Foundation in 2001 and with my amazing (but tiny) team grew it to where it is today, the envy of our industry providing help to hundreds of thousands of people in need each and every day. It’s the same Foundation that motivates our employees to volunteer over 1 million hours of their personal time each and every year. This “work” itself is much more than a “make work job” with a quota in mind. It has meaning, purpose and makes our company better.

    But for the record, although The Safeway Foundation is the work I’m most passionate about and proudest of, I also have responsibility for other considerable areas including IT, Real Estate, HR, GR, PR, Labor Relations, Retail Strategy, Health & Wellness, Communications, and I am responsible for our wholly owned subsidiary companies, Property Development Centers, Inc. and Safeway Health Inc.   So much for a token female in a “make work job” to fill a quota. We don’t need quotas at Safeway. We have smart, innovative, visionary women who manage with their heads and their hearts and all we have to do is open the doors, remove the ceilings and let ‘em run! And that’s exactly what we have done. That’s what I will miss the most when I leave.


    I think we can declare this particular bout to be a knock-out, with only one participant left standing.

    Let's move on.




    Earlier this week, MNB reported that Golub Corporation-owned Price Chopper announced that it plans to convert the entire chain to a new banner concept dubbed Market 32, which incorporates learnings from the Market Bistro concept store opened earlier this year in Latham, New York. The Market 32 stores will have "expanded food service options, an enhanced product mix and a re-emphasis on customer service," according to the company.

    The move generated lots of email.

    One MNB user wrote:

    Rebranding the company is a brave move but it does occur to me that it may not have the intended success. The Price Chopper brand and heritage used to mean something to its shoppers. It stood for fresh, convenience and value. The theatre and entertainment in the stores was as good companies we all recognize (Wegmans, HEB). When I went into a store it was evident how invested the employees were in the company, how happy the customers were to shop there and how ingrained the company was in the communities it serviced.

    Over the past several years we have seen this company struggle to compete. Customers that are no longer happy with quality, selection, price or store execution. Vendors that feel the company is too difficult to deal with. Decisions being made corporately that don't make sustainable sales achievable. Store employees that are noticeably unhappy, that no longer believe in the company. A corporate culture that has often been described as too political and unnecessarily bureaucratic especially considering the size and "family".

    This company failed to compete because it failed to continue to keep its customers and employees happy. Is the Market 32 rebranding initiative going to change that? If the experience inside the store and the employee morale and corporate culture doesn't change, the rebranding is an exercise in futility. Over the years there have been a number of executive changes. Certain roles within the organization remain revolving doors… I don't disagree that bringing in new executives can bring fresh ideas and a new perspective, however, allowing those new approaches to chip away at the DNA that made the company successful originally is and has proven to by a colossal mistake.

    Companies that evolve to stay relevant are smart. I don't think this rebranding is an evolution. Companies that  have successfully evolved - Wegmans, Trader Joe's, Whole Foods, Kroger, Amazon. I think it's an attempt at a revolution.


    But, another MNB user wrote:

    I'm fascinated to hear about the Price Chopper re-vamp. Up in our neck of the woods (which you and Michael like to refer to as "the North Pole"), Price Chopper is my main supermarket. I go there at least once or twice a week, and I know I'm a great customer of the local store. They could really use a re-do! Of course, on their timeline, they won't be updating the St. Johnsbury store until the end of their program -- we'll no doubt be the 135th store completed! Possibly not in my lifetime, I'm afraid. Anyway, it's still a good move for the Price Chopper organization.

    From still another MNB user:

    I think this is a major mistake by Golub. The Price Chopper brand is well established in its marketplace.

    Golub’s focus should be on competing against Hannaford, Wegman’s and ShopRite, all of which have sharper prices and have taken market share from Price Chopper through the years.

    I used to shop Price Chopper but compared to its competitors it has much higher retail prices. Going to a new concept such as ‘Market 32’ just throws out all the hard work that the Patriarchs of the Golub family have done.


    MNB reader Mike Julian chimed in:

    Kevin, for me the saddest part of the Price Chopper story is that the Price Chopper name was a change from Central Market 40 years ago and I was there….boy, am I getting old.

    More importantly … about the layoffs, there is never a way to trim employee cost that makes those who lose their jobs feel good about it. Sometimes you can reduce cost through attrition but usually it requires a lot of advanced planning. Then to hear that the company that could not afford you is making a many multi-million dollar investment it is that much more painful.
     
    I am not sure about the new “Brand” but I think I understand why. When Price Chopper came into existence Central Markets was a local neighborhood store. Price Chopper was introduced as having lowered prices and in industry terms EDLP today Golub is something entirely different and needs a new “Brand."

    Good luck, Neil.

    KC's View:

    Published on: November 14, 2014

    In Thursday Night Football, the Miami Dolphins defeated the Buffalo Bills 22-9.
    KC's View:

    Published on: November 14, 2014

    Interstellar is an extraordinary piece of movie-making, even if there are a few plot holes the size of black holes or wormholes or whatever.

    The new Christopher Nolan movie in some ways is his most ambitious, which is saying something when you consider that he made Memento, Inception and the Dark Night trilogy. Interstellar shows influences that include Star Trek, Contact, The Right Stuff, and, mostly, 2001 - there is a certain wonderment and a belief in both science and the human spirit that infuses virtually every frame of the film.

    Oddly, Interstellar reminded me the most of 2010, the sequel to 2001 that was directed by Peter Hyams and that was not particularly well-received when it came out, largely, I think, because it was not made by Stanley Kubrick. I've actually always thought that 2010 was a pretty good movie - it has a terrific cast (Roy Scheider, John Lithgow, Bob Balaban and a young Helen Mirren) and tries to create some sort of scientific framework for the more spiritual elements of its predecessor. Which is the approach that Interstellar takes and largely makes work.

    I don't want to give too much of the plot away, so suffice it to say that it posits an Earth on which technology has largely been abandoned or has failed, and on which natural resources have increasingly become rare - crops are dying and the prospects for the human race are dimming. Schools are even teaching that the Apollo missions were fiction, staged on Hollywood sound stages, like in Capricorn One. (I find this view of a future earth very persuasive, by the way. Scary, but entirely possible.)

    However, NASA still exists, if in a shadowy form … and the man in charge, played with authority by the always-great Michael Caine, enlists a widowed astronaut-turned-farmer (Matthew McConaughey - excellent evoking a kind of Chuck Yeager-like grit) to lead a space mission to travel through a wormhole to find a planet to which the human race can be transplanted.

    I'm not going to tell you any kore than that, except to stay that McConaughey's relationship with his daughter, Murphy, is the hinge upon which the plot and movie swing - and that's critical to understanding Nolan's worldview. For him, love is as mysterious and enticing a frontier as space, and it is the way he connects the two that is most intriguing. Even though there were things about the movie that I found frustrating, I must admit that I've read dozens of articles since seeing the movie about the scientific theories behind it … and the fact that I continue to think about Interstellar speaks to its strength as an entertainment.

    Here's the exchange that tells you everything you need to know about Interstellar, and that explains both its heart and mind. At one point, Murphy, a wiz kid frustrated by a world in which scientific knowledge is grounds for suspicion, asks her dad why she was named after something bad. And McConaughey responds, "Murphy's law doesn't mean that something bad will happen. It means that whatever can happen, will happen."

    Enough said.




    My wine of the week: the 2009 Francis Ford Coppola "Tavoularis" Reserve Pinot Noir from Sonoma … a bottle that I bought years ago and pulled off the racks this week, and that is absolutely delicious - rich and flavorful and mouth-filling. I don;t think you can get the 2009 anymore, but there are more recent vintages available, and I have every confidence that they'll be equally as wonderful.

    (Just FYI…Dean Tavoularis, who designed the distinctive label, was Coppola's production designer on movies that include The Godfather, The Godfather, Part Two, The Conversation, and Apocalypse Now.)




    One last thing.

    There's only about a week left during which you can order copies of the brand new books written by Michael Sansolo and me - "Business Rules!" and "Retail Rules!" - and be sure to get them signed and delivered in time for the holidays. (This isn't just a signing-and-mailing issue. We are reliably informed that our books are moving like hotcakes.)

    For details, click here.




    That's it for this week … Have a great weekend.

    See you Monday.

    Slàinte!
    KC's View: