retail news in context, analysis with attitude

Published on: March 19, 2015

This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy.

One of the more impressive sights at the recent IGA Global Summit in Orlando, where Michael Sansolo and I split the moderating and facilitating duties this week, was the sight of several hundred retailers and their families getting together in a room and making more than 12,000 peanut butter and jelly sandwiches, all of which were donated to local charities that provided them to people in the area who are homeless, hungry or simply need this kind of assistance.

The effort was precipitated by a presentation by the founder of a sandwich chain called Which Wich, Jeff Sinelli, who describes himself as "chief vibe officer" - and part of the vibe he wants to create for his company is as one that is intimately connected to the community. And so one of the things that Sinelli has done is help create a program that donates peanut butter and jelly sandwiches to the needy in the markets the company serves, and creates a mechanism through which customers can do the same.

Now, I have to be honest. After an hour or so of smelling nothing but PB&J, I thought I'd never want to eat one again ... but the fact is that I've had a craving for one ever since.

But one of the things that I thought was most remarkable about Sinelli's presentation was when he talked about something he's learned from this effort - that there were a lot of people even within his organization for whom the program resonated.

There was the person who had been homeless. Or the woman who'd escaped an abusive husband with her kids, and could only afford to eat peanut butter and jelly until they got back on their feet. Or the family that had been abandoned by a parent, leaving them with little money and fewer food options.

I'm a lucky guy. I never have had to deal with any of these things, and I don't know many people who come from such circumstances. I sometimes have to remind myself that not everybody is as lucky as me.

I think this is a good lesson for every retailer, every manufacturer. While almost every business has a community outreach program, I wonder how many have gone out of their way to find out what kinds of programs will resonate with employees and associates ... and then implemented these ideas with the knowledge that this is yet another way to compensate and connect with the people on the front lines of their businesses.

It is a way to do better business, and just do better.

That's what is on my mind this Thursday morning. As always, I want to hear what is on your mind.

Published on: March 19, 2015

by Kevin Coupe

The Wall Street Journal this morning reports that Bumble Bee Seafood plans to launch a website "that lets consumers trace the origins of their tuna, via codes printed on cans that will provide information about where and how the fish were caught and by which fisheries ... At Bumble Bee, much of the data for the traceability project already exists in the company’s supply chain systems, Mr. Costa said. The goal is to extract and present it in a way easy for consumers to understand."

According to the story, "The move comes in response to increasing interest among consumers about the provenance of products, especially food, said Bumble Bee CIO Tony Costa. 'We’ve heard it loud and clear'."

This is quite literally an Eye-Opener ... because it is all about traceability, trackability, and transparency ... things that consumers want, and companies must supply.

Good for Bumble Bee.

Published on: March 19, 2015

The New York Times reports that Target, which only a week ago was saying that across-the-board wage increases for front line employees would be "unreasonable," now is promising to "increase the pay of its workers to at least $9 an hour, joining retailers like Walmart and TJX in raising its hourly wage in a more competitive job market and facing pressure from labor groups." Target reportedly "has begun telling them that they will start to receive higher wages this spring, according to a person with knowledge of the company’s plans. The retailer has said it already pays all of its employees more than the federal minimum wage, $7.25 an hour."

To be fair, CEO Brian Cornell had said that while a raise for everybody would be unreasonable, the company would make sure that it remained “very competitive from a wage standpoint.”

The Times notes that "pay is rising in the retail industry as an improved job outlook has increased competition for low-wage, hourly workers. The economy is adding jobs rapidly, the jobless rate is at its lowest level since 2008 and wages are climbing slowly, government figures showed last week."

Target has been trying to cut some of its labor costs. laying off some 1,700 employees at headquarters as it looks to save $2 billion over two years that can be reinvested in grocery products and technology.

Published on: March 19, 2015

The New York Times reports that at Starbucks' annual shareholders meeting in Seattle yesterday, CEO Howard Schultz showed no sign of backing down on the racial harmony-related campaign on which the company has embarked, asking baristas to write "Race Together" on coffee cups and be prepared to talk about racial issues with customers.

According to the story, "Reactions have ranged from video parodies of customer interactions with baristas to some hostile online attacks aimed at corporate executives. Many have pointed out that the company’s leadership is predominantly white, while many of its baristas are members of minorities."

Schultz yesterday said that "race is an unorthodox and even uncomfortable topic for an annual meeting. Where others see costs, risks, excuses and hopelessness, we see and create pathways of opportunity - that is the role and responsibility of a for-profit, public company."

And, he said, ""Some in the media will criticize Starbucks for having a political agenda. Our intentions are pure."

The story says that Schultz "addressed the nascent public relations campaign accompanied by the stagecraft of African-American guest speakers like the Academy Award winner Common and ending with Jennifer Hudson’s rousing rendition of 'Hallelujah' at the close of the presentation ... Mellody Hobson, the president of Ariel Investments and an African-American member of the Starbucks board, was one of the featured faces of the campaign, speaking for about 15 minutes on the importance of discussing race. In talking about how difficult it can be to discuss race in public, she referred twice to the previous 24 hours as an example of such difficulty, apparently an allusion to the groundswell of criticism."

The Times goes on: The company has said in statements that the 'Race Together' initiative stems from a meeting that Mr. Schultz called in December at the company’s headquarters in Seattle to discuss racial tension. Police shootings involving the deaths of African Americans and the ensuing racial tensions in Ferguson, Mo., Staten Island and Oakland, Calif., had turned race relations into a national conversation, and he said he wanted the gathering to provide an outlet for discussion ... the 'Race Together' effort illustrates how Mr. Schultz is increasingly injecting the company and himself into national issues, even though he dismissed criticism that he was pursuing a political agenda. In October 2013, during the government shutdown, for instance, he introduced a petition asking Congress to pass a budget deal by the end of the year. He has also tried to keep guns out of its coffee shops and has strongly supported veterans and same-sex marriage."

Published on: March 19, 2015

Amazon has announced that its Prime Now service, offering same-day and even one-hour delivery on select items, has expanded from Manhattan and Brooklyn to Baltimore and Miami.

According to the announcement, "Prime Now is launching in select Baltimore and Miami zip codes today and will expand rapidly to additional zip codes within each city soon. All Prime members can download the Prime Now app, available on iOS and Android devices, and be notified when the service is available in their local area. In Miami and Baltimore, Prime Now is available from 8 a.m. to 10 p.m., seven days a week. Two-hour delivery is free and one-hour delivery is available in select zip codes for $7.99."

Published on: March 19, 2015

Target Corp. has agreed to write a $10 million check to settle a class action suit related to the 2013 data breach that put the personal and financial information of millions of its customers in jeopardy.

Reuters reports that the proposed settlement "would create an account to pay individual victims up to $10,000 in damages."

USA Today writes that "victims must be able to state (and document) that they have experienced at least one of the following: Unauthorized, unreimbursed charges on their credit or debit card ... Time spent addressing those charges ... Fees to hire someone to correct their credit report ... Higher interest rates or fees on the accounts ... Credit-related cost ... Costs to replace their identification, Social Security number or phone number."

A judge still needs to sign off on the proposed settlement.

Published on: March 19, 2015

The Wall Street Journal reports that Starbucks announced that it "will start testing two new delivery services in the second half of this year in an effort to make its stores in dense cities work more like highly productive outlets with drive-through windows. One delivery option, to be tested first in the coffee chain’s home city of Seattle, will involve linking Starbucks with San Francisco-based delivery startup Postmates Inc., which ferries products for clients in dozens of U.S. cities.

"In a second initiative, Starbucks employees in certain office buildings—starting with New York’s Empire State Building—will carry food-and-beverage orders to customers on other floors who order online, in what the company is calling “Green Apron” delivery, because of the color its baristas wear."

There won't be a minimum order size, but there will be a flat delivery fee, still to be determined.

One major key to making the delivery program work - users will have to be part of the Starbucks rewards program, which will allow the coffee retailer to continue to drill down on consumer habits and preferences.

Published on: March 19, 2015

The Wall Street Journal has a long piece about Coca-Cola, which has had a couple of years of disappointing revenue and profits, and its longtime CEO, Muhtar Kent, who is trying to solve the problems that have led to some investors calling for him to be replaced.

"Mr. Kent’s risky strategy: Sell more soda," the Journal writes. "The 62-year-old CEO says he has a number of plans - such as increased marketing spending and an overhaul of the company’s U.S. distribution network - that will help Coke return to high-single-digit earnings growth in 2016." But some believe that "while he is comfortable navigating the nitty-gritty, he lacks big-picture vision."

Fascinating piece, and you can read the entire story here.

Published on: March 19, 2015

• StarNewsOnline has a story about how Delhaize-owned Food Lion executives are using the Wilmington market as a case study since it was "the first to covert to a new format that focuses on expanded selection and improved customer experience." Changes include "wider aisles and deeper shelves to grab-and-go snack offerings and a gluten-free section. The company has updated everything from its logo to its uniforms and check-out counters feature faster register systems to move customers along quickly."

Food Lion President Meg Ham says that "it's a quintessential Food Lion market for us. We're No. 1 market share, and it's a good size that we're able, with 76 stores, to not only do the work inside the store but we're also able to tell the customer the story and basically reintroduce ourselves to the customers ... We're finding things that are working here and we're looking to say, ‘What ones can we take across our entire network?'"


• In its annual report, beyond what it describes as "record results," Smart & Final CEO Dave Hirz said that "performance across both the Smart & Final and Cash & Carry store banners was strong, driven by our ongoing merchandising and marketing efforts and consistent store level execution.  Smart & Final Extra! continues to be the key to our new store growth, and, as planned, we completed twice as many new store openings and conversions to Extra! in 2014 as compared to the prior year ... Looking ahead, in 2015 we plan to continue our accelerated pace of new store openings and believe that our strong performance in comparable store sales, competitive positioning, and real estate development pipeline provide the foundation for strong operating and financial performance."

Published on: March 19, 2015

• In Minnesota, Coborn's announced that Scott Morris, most recently corporate vice president of independent business development at Supervalu, has been named senior vice president, center store.

Published on: March 19, 2015

Got a number of emails about Starbucks' new race relations campaign...

One MNB user wrote:

This program sounds like a Pity Party in the making. I doubt the barista is equipped to discuss the complexities of integrating racial groups into American society. So this will become a festival of platitudes like " discrimination is bad" or " police shouldn't arrest innocent people". People will agree, get their coffee, and get out as fast as they can.

From another reader:

How is this different than the  “buy the world a Coke” commercials from 1971…guess Starbucks needs a catchy tune.

Coke didn't ask its truck drivers to talk about race with customers. Which would've been the equivalent.

And another reader:

I hope I do not offend anyone because I truly do not mean to,  but to me one reason we do have race issues in America  is we as people contradict ourselves… we are told to embrace and be proud of who we are and where we come from  and it does not matter if you are Black,White,Asian,Latin , Catholic,Jewish etc.   but then we  say  DON’T look at people at what color or background they are from…. Find me the person who says I don’t look at a people  whether they are Black, Blue,White,Green or Purple…… hmmmm… then ask them  how do you embrace them for what they are??…. Instead should we not try and embrace our differences on where we came from and respect that ???  

Again, I am sorry if I offend anyone because I truly do not mean too but this thought process in our society has  always been a pet peeve of mine.  if you don’t see the color or know the person's background than you need to open your eyes ….. People just need to respect each other…. Or maybe I am wrong and I  am a fresh water fish in a salt water pond…. 

While I  do not agree with Starbucks on this one……… I am not going to criticize them  because I believe if you don’t have a suggestion for improvement then don’t complain….. I think they are  trying to be part of the American culture… One that is still trying to find itself after hundreds of years…

For the record, I am not doubting the motivations here. I think they are trying to do something positive. But I just think the idea is ill-considered and the implementation fraught with land mines.




On another subject, MNB reader Jack Di Salvo wrote:

Doubt whether the trend towards digital gift cards will slow down, however, it does seem awful impersonal to electronically transfer funds; at least the physicality of a card has some merit.  Color me old-fashioned but isn’t part of the pride of gift giving that the giver put some thought and personality into the gift.

You're right. You are old-fashioned. Nothing wrong with that, though.