retail news in context, analysis with attitude

Published on: April 15, 2015

by Kate McMahon

This is the tale of two food safety recalls linked to the potentially life-threatening bacterium listeria, and social media’s crucial, fast-evolving role in crisis management.

I paid particular attention to the most recent recall – of 30,000 cases of Sabra Classic Hummus – since I had just polished off a single size portion of the product with a handful of pita chips when the announcement started trending on Facebook. Happily, I could click on Sabra’s page and determine in less than a minute my hummus was not one of the 360,000 suspect containers.

The Sabra recall was launched last week after Michigan health inspectors found several tubs of Classic Hummus at the Kroger in Port Huron tested positive for the food-borne bacteria. Thus far, no illnesses have been linked to the Sabra product.

The ongoing recall of Blue Bell Ice Cream products – the company’s first in 108 years -- is far more complicated. The multi-state recall has been expanded three times since March, involving more than two dozen products sold to retailers and institutional customers, and manufactured in plants in Texas and Oklahoma. The CDC reports that eight illnesses in Kansas and Texas are linked to this outbreak, resulting in three deaths.

Spinach was the culprit in the other recent listeria-related recalls that involved both fresh packaged greens and frozen products (Amy’s Kitchen, Rising Moon Organics) sold at retailers including Wegman’s, Target, Costco and Meijer, according to foodsafetynews.com.

Listeria is a bacterium that can cause high fevers, headaches and nausea. It can be particularly dangerous in children, pregnant women, the elderly and people with weakened immune systems.

The current Sabra and Blue Bell recalls illustrate the importance of having established social media channels and a team that can respond quickly to such developments. In this case, Sabra Dipping Co. – the nation’s leading refrigerated dip maker co-owned by Pepsi and Strauss – is in a much stronger position than Texas–based Blue Bell, which is the second highest selling ice cream brand in the United States.

Sabra has an active Facebook page with almost 530,000 “likes” and a lesser presence on Twitter. I had to really seek out Blue Bell’s Facebook page, first coming across one that hadn’t been updated since 2011. I then found the “current” page, which showed its last post in December 2014, with 109,000 likes. There was no activity until the recall notices started March 13, and four recall-related posts since then. When searching Twitter, the first Blue Bell reference that popped up was from a personal injury law firm advertising to those who were sick from eating Blue Bell ice cream.

Here’s what Sabra is doing right: The recall information is very specific, with clear graphics explaining where customers can find the SKU and expiration dates for the recalled products. Just as importantly, the social media team is responding to all of the Facebook posts from very worried customers, particularly pregnant women. Yes, many of the posts are the same (contact your personal physician for health concerns, apologizing for busy telephone lines early on) but by answering each post with the person’s name; it makes the company’s response more personal, and more meaningful.

By contrast, Blue Bell’s Facebook page does not include any response from the company. Blue Bell certainly has a devoted customer base in the 21 states where its ice cream is sold, but I think it is failing those customers by not engaging in any kind of a dialogue with them.

I think it’s even more important for Blue Bell to be proactive with consumers since ice cream products can stay in the freezer for up to a year, and there are so many flavors/products involved. The Sabra products, by contrast, were limited to five SKUs and had expiration dates of May 11 or May 15.

A piece in yesterday’s Wall Street Journal quoted three public relations experts criticizing Blue Bell’s response to the crisis as too little, too late. I have not yet seen any PR guru’s take on Sabra’s reaction, but from a social media standpoint I think Sabra is making the right moves, and Blue Bell is falling short.

The site FoodQualityNews.com cited a recent study of 405 consumer product recalls between 2000 and 2012, finding that interactive social media decreases the negative market reaction compared to firms that do not use Facebook, Twitter, RSS feeds and corporate blogs.

The key word in that sentence is “interactive” – companies need to engage with consumers, not just delivering information but appearing empathetic, sincere, and in some cases, apologetic. Over the course of the study, the number of firms using social media escalated from about a third to 97%.

The takeaway here is clear – if you deliver products or services to consumers, it is imperative you have a social media presence and are ready to respond immediately to a crisis.

Comments? As always, send them to me at kate@morningnewsbeat.com .

Published on: April 15, 2015

by Kevin Coupe

In the UK, Tesco's management has known that they have to get the company into shape. But now, they've taken that goal just a little bit farther.

According to the Daily Mail, "Tesco has ordered its staff to get fit by dancing and running on the spot in store amid concerns about overweight checkout workers putting off customers.

"The supermarket giant's 314,000 UK workers received the memo from new boss Dave Lewis - complete with advice on how to stay active in their jobs and not become couch potatoes at home.

"It is believed the posting on the company's staff website is part of a drive to make workers more appealing in the eyes of consumers, many of whom don't like being served by overweight employees."

Among the statements on the company website:

Let's be honest, trim workers are less likely to take days off sick, plus they can stack shelves more quickly than fat ones. But this also ties in with attempts to smarten up Tesco stores. Healthy workers will give a more appealing look than a bunch of sweaty, overweight workers wheezing around the aisles.

Betcha that approach goes over real well with the sweaty, overweight, wheezing population...

Published on: April 15, 2015

Law360 reports that a number of retailers - including Macy's and Amazon - as well as the Citizens of Humanity jean company must defend themselves in a lawsuit charging that they falsely labeled jeans as "Made in the USA" when they were not.

The story says that U.S. District Judge Janis L. Sammartino ruled that the California law requiring such label accuracy was neither unconstitutional nor superseded by federal law. The defendants had sought to have the case tossed out, but the judge refused.

The judge ruled that the California statute at issue also is not preempted by Federal Trade Commission (FTC) rules. And the story says that the defendants "failed to persuade the judge that California law does not benefit the public and imposes an undue burden on interstate commerce, thereby violating the dormant Commerce Clause."

According to the story, "Plaintiffs Louise Clark and Robyn Marnell filed suit in June, claiming that Citizens of Humanity’s 'boyfriend jeans' include several parts made outside the U.S., including fabric, thread, rivets and buttons, despite being labeled 'Made in the U.S.A.' Other Citizens of Humanity jeans also have zipper parts that are manufactured abroad, the suit says."

Published on: April 15, 2015

Ahold-owned Giant Food Stores and Martin's Food Markets announced yesterday that they are setting their starting wage "at $9 per hour beginning June 2015 as part of the company’s commitment to providing competitive wages. Giant/Martin's will also increase the hourly wage for current associates to a minimum of $9 an hour in June."

According to the company, "This change applies to the 197 non-union Giant/Martin's stores. Approximately 10,000 Giant/Martin's part-time associates will be impacted by this wage increase, which goes into effect on June 7. Giant/Martin's employs 33,000 associates, approximately two-thirds of whom are currently paid more than $9/hour."

“Our associates are the foundation of our success, and we have always believed in paying competitive wages to attract the best talent,” said Tom Lenkevich, the company's president.

Published on: April 15, 2015

The 3rd US Circuit Court of Appeals has ruled that Walmart does not have to let shareholders vote on a proposal by New York City's Trinity Church, which owns about $300,000 worth of Walmart stock, that would have forced the retailer's board to tightly supervise the sale of guns with high-capacity magazines.

The proposal, which was initiated by Rev. Dr. James Cooper, rector of the wealthy and socially progressive Episcopalian parish, essentially argued that the sale of such products put public safety at risk and also potentially hurt the company's reputation and the values that create its brand equity.

Walmart's argument has been that to allow such a proposal to be voted on by shareholders would open the door to a wide range of proposals that would make corporate governance impossible. It originally won that argument before the US Securities and Exchange Commission (SEC), but Trinity Church appealed to the courts and won. That prompted Walmart to appeal to a higher court, which produced this result.

Trinity has reserved the right to appeal further up the judicial once it has digested the opinion. In a statement, it said that it was "disappointed with the ruling, but pleased that we have been able to draw attention to an important issue of corporate governance and social responsibility."

Published on: April 15, 2015

Internet Retailer is out with its annual guide to the top 500 online retailers, reporting that US web merchants "turned in another strong year in 2014, growing web sales 16% while total U.S. store sales grew just 2.4% ... It was online stores and not physical stores that spurred growth among all U.S. retailers in 2014. In fact the U.S. web merchants ranked in Internet Retailer’s just-released 2015 Top 500 grew far faster than stores and overall retail in the United States in 2014, and faster than overall e-commerce growth."

Not surprisingly, the guide ranks Amazon as being the biggest web merchant, "with web sales in 2014 that increased 17.1% to an Internet Retailer-estimated $79.48 billion. Amazon reported net sales of $88.98 billion in 2014, a 19.5% increase from nearly $74.45 billion in 2013. But to make a cleaner revenue comparison with other Top 500 merchants Internet Retailer backs out revenue that is not directly associated with the online sales of physical goods or digital content, such as its Amazon Web Services unit that provides web-based data storage and server capacity. Overall, Amazon accounted for 31% of all U.S. Top 500 sales and 26.1% of all U.S. e-commerce sales."

Published on: April 15, 2015

• Bloomberg reports that companies that traditionally have sold their goods on eBay "are moving more of their business to Amazon.com Inc., saying they get more for their money by selling merchandise via the Web retailer.

"Amazon’s pool of merchants doubled to about 2 million in 2014, while the number of sellers on eBay has remained flat at 25 million in the past two years. Businesses that at first set up online storefronts on eBay say they’re surprised how quickly sales surge on Amazon once products appear on both sites. The move to Amazon, which boasts a bigger user base and offers more ways to ship merchandise, poses a threat to eBay, which pioneered the idea of an Internet marketplace where merchants big and small could hawk wares."

Published on: April 15, 2015

• An April survey by the National Association of Convenience Stores (NACS) says that "a majority of Americans say they are optimistic about the economy and low gas prices are driving the optimism ... Overall, 52% of Americans are optimistic about the economy, an eight-point jump from March. Those most optimistic are younger consumers ages 18-34 (58%) and those in the West (58%)."

The surge in optimism, NACS says, "continues on ongoing trend in 2015. A majority of Americans have said they are optimistic about the economy in three of the previous four months, when national gas prices averaged between $2.05 and $2.40 per gallon. These are the only months that a majority of Americans have expressed optimism about the economy since NACS initiated the survey in January 2013. Gas prices averaged $3.51 per gallon in 2013 and $3.36 per gallon in 2014."

Published on: April 15, 2015

Normally, if a recording artist had just one enormous hit song, the person would be referred to as a "one hit wonder." But when that person is Percy Sledge, and the big hit was "When A Man Loves A Woman," that description hardly seems fair, or even accurate.

Sledge died Tuesday in Louisiana after a battle with liver cancer. He was 74.

He had other songs that were popular, but none on the scale of "When A Man Loves A Woman," which continues to be a kind of anthem to heartbreak.

Published on: April 15, 2015

...will return.