retail news in context, analysis with attitude

Published on: November 25, 2014

by Michael Sansolo

Boy, the way Glenn Miller played!
Songs that made the Hit Parade.
Guys like us, we had it made.
Those were the days!

And you knew where you were then.
Girls were girls and men were men.
Mister, we could use a man like Herbert Hoover again.

Didn't need no welfare state.
Everybody pulled his weight.
Gee, our old LaSalle ran great.
Those were the days!

In so many ways, Thanksgiving is the most American of holidays. First off, we all celebrate it no matter what our racial, ethnic or religious background. And secondly, many of us manage to celebrate it the same way: by arguing with family members over topics from food to politics to football.

This year we have loads to fuel the discussions. We can discuss whether or not stores should be open and people working, even though nearly every other American holiday now seems to center around sales and shopping.

Heck, we can even argue about the mayor of Seattle issuing a pardon for a tofurkey as if that somehow disrespects the Presidential traditional of pardoning a bird; a tradition that stretches all the way back to 1989.

But what we should be considering is how are families themselves have changed, and from a business perspective, what that really means in how Americans eat, shop, cook and live on days that aren't holidays.

In many ways the change in family structure is the essence of the new world.

Philip Cohen, a professor at the University of Maryland, recently conducted a study of family structure for the Council on Contemporary Families. His paper demonstrates how drastically family make-up has shifted in a fairly short time:

Cohen’s study finds that today 22% live in the male-breadwinner, married-couple homes that were the majority 50 years ago, while 23% live with just a single mother. The largest group -34% - lives with dual-earner parents. Another 7% live with a parent who lives with an unmarried partner, 3% with a single father and another 3% with grandparents but not parents.

Children aren’t the only group whose household structure has changed dramatically. Cohen’s paper finds that numerous factors including Social Security have greatly diminished poverty rates among the elderly, allowing the vast majority of seniors today to live on their own. Most of these changes, Cohen says, took place between 1960 and 1980. Like the pardoning of turkeys, this is a relatively new trend.

For the food industry, these findings are especially important. We’ve long since come to grips with the reality that Thanksgiving dinner is not necessary cooked at home and found a way to build a business out of selling hassle free traditional dinners (and even tofurkey).

Likewise we need to continuously ponder how the societal changes have reshaped the family and what that means to business every day of the year.

So yes, argue over politics, the Dallas Cowboys or even if it is morally wrong to run to Walmart to pick up some sale items. At the same time accept that the world we all operate in is very different than it was just a few decades back and the world of Norman Rockwell paintings is likely never coming back.

Then figure out what traditions you need to change to stay both in step and one step ahead.

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.

Published on: November 25, 2014

Last week, we noted the passing of Mike Nichols, the esteemed film and stage director who got his start in improvisational comedy and made his reputation as one half of the Nichols & May comedy team, with Elaine May (who also went on to direct movies such as the original The Heartbreak Kidand, less successfully, Ishtar, and write movies such as Heaven Can Wait).

But what I didn't know until I read the story in Advertising Age this week was that early in their careers, Nichols and May did a series of animated television commercials for New Orleans-based (and now defunct) Jax Beer. The commercials, two of which you can see at left, are funny, arch, and, while primitive compared to how commercials are made today, pretty memorable. It's also interesting to see how, in some ways, the ads actually presage some of the arguments that craft brewers make in suggesting that their beers are better than mass-produced beers.

I thought these were Eye-Opening. Enjoy.

Published on: November 25, 2014

Ad Week reports that the New York City subway system currently features "large digital kiosks" that are swipe-able, virtual stores allowing people to buy holiday presents while traveling throughout the city.

The company using the kiosks as digital pop-up stores this year: Amazon.

According to the story, "Amazon's promos are running on 100 digital 47-inch screens in 12 major hubs in New York, including Grand Central Station, Union Square and Brooklyn's Barclays Center. Collectively, the kiosks target 1.2 million riders per day.

"Half of the screens are placed on subway platforms and the other half are near entrances and high-volume areas. Creative content on Amazon's ads differs between the two areas: Ads in the mezzanine area focus on branding while promos near trains drive sales.

"The digital screens … let consumers browse through a curated list of electronic holiday gifts from brands like Bose, Samsung, Sony and Belkin. Each item can be tapped on for more information, which also pulls in real-time pricing. After finding a product they want, riders can scan a QR code or send a text message or email and receive an Amazon.com link, where they can buy the gift from a smartphone once they're above ground."

Published on: November 25, 2014

The Wall Street Journal is reporting that Duncan MacNaughton, the chief merchandising officer at Walmart since 2010, is planning to announce his resignation from the company.

MacNaughton and Walmart have not yet commented on the report.

UPDATE … 9:30 am.

Greg Foran, CEO of Walmart's US operations, this morning sent the following emailed memo to company associates:

Today, I’m going to share with you leadership changes within our Walmart U.S. Merchandising organization. Duncan Mac Naughton, Chief Merchandising Officer – Walmart U.S., has decided to leave the company to pursue new opportunities. I’d like to thank him for everything he’s done for Walmart, and specifically our U.S. business.

Duncan’s departure has allowed me to relook at our Merchandising structure and the incredible talent within the team. At this time, I have chosen not to name a new Chief Merchant. I would like to use this opportunity to get closer to the Merchandising organization, so effective immediately, these leaders will report directly to me with the following responsibilities:

• Steve Bratspies will transition from his role as Executive Vice President (EVP) of General Merchandise to EVP of Food, which includes a strong focus on Fresh.

• Andy Barron will retain his role as EVP of Softlines and will assume responsibility for General Merchandise.

• Michelle Gloeckler will remain EVP of Consumables and U.S. Manufacturing. In addition, Labeed Diab, Senior Vice President, and his Health & Wellness team will transition to report to Michelle.

• John Aden will remain in his current role as EVP of Sales Innovation.

• Scott Huff will remain in his current role as EVP of Merchandising Operations.

• Jack Sinclair will be helping to transition the food business over the coming weeks before taking another role within Walmart, to be announced at a later date.

Through Duncan’s leadership, we have focused on developing our merchants while also driving stronger collaboration between Marketing and Merchandising. This has made us more relevant to and focused on our customers. I also think it’s important to recognize Duncan for his leadership in re-engaging with our suppliers to develop joint business plans. This work is resulting in better and more localized assortment in our stores.

In partnership with the Operations team, Duncan has driven customer-centric innovations that we will build from to move forward. He’s always been, and I’m sure always will be, an advocate for our customers and our stores. We’ll miss his creativity and energy. Please join me in thanking him and wishing him well.

Published on: November 25, 2014

USA Today this morning reports that the US Food and Drug Administration (FDA) plans to announce that, under the provisions of the Affordable Care Act (ACA), better known as Obamacare, "it is making final two rules that require calorie information be listed on menus and menu boards at chain restaurants, grocery store take-out counters, convenience stores, theaters, amusement parks and vending machines with 20 or more locations."

According to the story, "The restaurant rules take effect in one year and the vending machine rules in two years.

"The rules come as consumers increasingly demand more information about foods and beverages. Some restaurant chains, including Panera and McDonald's, have supplied the calorie information for some time, but the new rules formalize the labeling for the entire industry. They will not apply to seasonal items carried for less than 60 days."

The story notes that the new rules are supported by the National Restaurant Association (NRA), which prefers a national standard rather than a patchwork of state-=by-state regulations.

Published on: November 25, 2014

The Wall Street Journal reports that Amazon "has introduced a service in three cities aimed at connecting customers to local service providers like plumbers and electricians, according a person briefed on the plan. Amazon shoppers in New York, Los Angeles and Seattle would see the offers after purchasing items like a car stereo or air conditioner that may require installation … The listings service, known as Amazon Local Services, is part of a broader Amazon effort to compete with brick-and-mortar stores, which still account for more than 90% of retail sales."

The story notes that "Amazon is entering a crowded market with established players such as Yelp Inc., Angie’s List Inc. and Craigslist, as well as startups like Thumbtack. Groupon Inc. recently rolled out a listings service through which it will eventually offer daily deals."

In other (admittedly unrelated) Amazon news …

• The BBC reports that Amazon is working with the Royal Mail in the UK, using some 10,500 post offices in the country as delivery depots where customers can pick up their packages.

The story says that "the addition of the Royal Mail Local Collect 'click and collect' facility means Amazon will have 16,000 pickup locations in the UK."

Published on: November 25, 2014

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

• The Associated Press reports that Iowa-based c-store chain Casey's General Stores has said that it has discovered "a $30 million error in its income taxes related to tax credits on ethanol that is blended into gasoline." According to the story, "The company said it paid the IRS $30.4 million in taxes and $1.1 million in interest to correct the error and will revise its financial statements from fiscal 2012, 2013 and 2014 as well as the first quarter of its current fiscal year. Casey's said it found the error during a routine IRS examination and voluntarily reported it to the government."

I know that my default position is to think of movies, but when I read this story the first think I thought of was Charles Grodin as Murray Blum in "Dave," when he says after looking at the national budget, 'Who does these books?" Maybe it is time for casey's to get a new accountant…


• The New York Times reports that Saver's Thrift Stores, a chain of stores that touts how much money it raises for more than a hundred different charities, is being accused by the Minnesota Attorney General Lori Swanson of pocketing more than $1 million that it said has been donated to the charities.

According to the story, Swanson's office said that Savers "routinely misrepresented how much money it raised for nonprofit groups through clothing drives and other donations from customers. Savers would keep nearly all the money it raised from the sale of such items … The attorney general’s office is also holding the charities accountable for what it says is a failure to properly oversee how the stores raised money on behalf of the groups."

Sarah Gaugl, a spokeswoman for Savers, told the Times in an email that “Savers remains dedicated to working openly, honestly and transparently with all of our nonprofit partners. We will continue to work closely with the attorney general’s office along with our partners to address any concerns quickly and constructively so that we can focus our efforts on helping communities connect through a shared commitment to the common good.”

One has to wonder if the investigation into Saver's affairs will show if the company is maybe a little less open, honest and transparent than it would like people to believe. If so, they're going to have to make a decision - find a new value proposition, or turn off the lights.


• Redbox announced yesterday that it is raising its DVD rental prices by 25 percent, from $1.20 per night to $1.50.

In an email to customers, the company wrote:

"We want to let you know that starting next Tuesday, December 2, the price for DVDs will increase to $1.50 a day, and the price for Blu-ray™ Discs will increase to $2 a day. Starting Tuesday, January 6, the price for video games will increase to $3 a day.

"This is only our second price increase in 12 years, and the first for Blu-ray Discs and games, so you can be sure that we made this decision very carefully. We know that hearing about a price increase isn't the best news, but we feel it's necessary in order to improve your Redbox experience, while continuing to deliver the best value for new movies and games."

The idea of of actually going down to a store to rent a DVD seems so quaint, so 20th century…


• Pymnts.com reports that "BJ’s Wholesale Club is rolling out a co-branded credit card with rewards that its members can redeem on-demand when checking out at BJ’s stores … The on-demand redemption feature, which lets cardholders spend their rewards in $20 increments, is a first among wholesale-club retailers, the company said. The feature gives members 'the choice to build their awards for greater savings off a bigger purchase or they can put them to use during their weekly shop,' said Laura Sen, BJ’s CEO."


• Advertising Age reports that "despite reports on Monday suggesting otherwise, Budweiser's Clydesdales are not being relegated to the barn. Indeed the iconic horses will remain a significant part of Anheuser-Busch InBev's marketing playbook, including appearing in an upcoming Super Bowl ad, the brewer said Monday afternoon."

The original Wall Street Journal story, cited here on MNB, said that AB InBev would be retiring the Clydesdales as it attempted to reshape its ads to appeal to younger people who are choosing craft beers over Budweiser with increasing frequency.

I'd just like to say on the record that if there isn't a commercial during the Super Bowl that features a Clydesdale and a puppy, I'm going to be disappointed. Not that it will matter to Bud, because I'll probably be drinking a Full Sail Amber Ale while I'm watching the game, which sort of speaks to the problem they have…


• Crain's Chicago Business reports that "The number of imminent layoffs at Sears Holdings is approaching 8,000 as the troubled retailer closes more stores, according to a new report from financial website Seeking Alpha.

"The list includes 70 Kmarts, 39 Sears stores, 35 Sears Auto Centers, two distribution centers and three repair facilities, according to Seeking Alpha contributor Mitch Nolen. Many locations will close by the end of the year, and the remainder will be shut by the end of February, which marks the close of Sears' fiscal year. Nolen compiled his list of closures from local liquidation notices and state-level reports of impending layoffs required by the Worker Adjustment and Retraining Notification Act."

Dead. Company. Walking.

Published on: November 25, 2014

• United Fresh Produce Association has hired Mary Coppola to be its new Senior Director, Marketing Communications. Coppola most recently was Director of Marketing and Creative Services at the Healthcare Distribution Management Association.

Published on: November 25, 2014

We had a story and some emails about the issue of animal cruelty, which led one MNB user to write:

Just curious, how should chickens be killed humanely?  How are turkeys killed?  I am curious because all the comments are about how horrible the killing method is and when I thought about it I couldn’t figure out how one could humanely kill thousands of chickens a day?  Anyone?

Someone wrote in yesterday describing what he'd seen in a poultry processing plant, which led me to write, in the most erudite fashion I could muster: "Yuck."

One MNB user responded:

“Yuck?”   Well, yes… but more importantly “How horrible for those poor birds!”   And what does it say about us as humans that we either don’t want to know or don’t care that these animals are capable of feeling fear and pain and that they suffer tremendously?    Or maybe we do want to know and we do care, but not enough to modify our behavior.



On the subject of tobacco bans, one MNB user wrote:

The discussion over which retailing companies should or should not sell tobacco products took me back to when I was running a food store in the upper Midwest in the early 90’s.   At that time, our firm had told us that we store directors could make the decision whether or not to discontinue allowing smoking in our respective stores. I was raised by two parents who both smoked for more than 50 years and I found the habit to be revolting…..so it took me no more time that the drive home from the directors’ meeting that day to decide that our store would be smoke-free within 30 days.

The store had a seating area that held about 75 people and was often frequented by people who enjoyed smoking cigarettes and drinking cheap coffee, but purchased little else.   Once the announcement was made, I received a scathing phone call from a customer who told me that I was way out of line to ban smoking in our store.   She made every threat that she could, including telling me that she would never shop with me again and that she would tell ALL of her friends to follow her example.   After several minutes of ranting, she asked me again whether or not I had reconsidered my decision to ban smoking which, of course, I had not.   Finally, in a fit of rage she declared, “If you sell tobacco, you have to allow us a place to smoke!”   I paused for a moment and then said, “Well, ma’am, I sell condoms, too.”

She hung up on me.

Boom!

Thanks. You made me laugh out loud.

Published on: November 25, 2014

In Monday Night Football action, the Buffalo Bills shellacked the hapless NY Jets 38-3 in a game postponed from the weekend and moved from Buffalo to Detroit because of the heavy snows that hit that city last week.

And, in the regularly scheduled Monday night game, the Baltimore Ravens defeated the New Orleans Saints 34-27.