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: June 5, 2015

    by Kevin Coupe

    This play is the kind that changes the course of the game ... except that in this case, we're talking about the billion dollar business of sports broadcasting.

    Conventional wisdom generally has been that one of the things that traditional media can hold onto in a world where its business has been fragmenting is live sporting events. But that may have changed with the decision by the National Football League (NFL) to make a deal with Yahoo! to allow it to host a live, global webcast of the game that the Buffalo Bills will play against the Jacksonville Jaguars in London on October 25. The deal is speculated to be for seven figures, though no specific amount was cited in reports.

    For the NFL, the New York Times writes, "the streamed game is an experiment to understand the complex economics of digital streaming and gauge the audience for watching American football in the rest of the world ... For the N.F.L., the long-term question is how to generate more revenue from streaming games without cannibalizing its lucrative broadcast deals. The foray with Yahoo may be a way of prompting the networks to pay more for rights fees that include streaming rights in the future."

    And, for Yahoo, the story says, "winning the digital rights to the popular game is a rare victory against more successful rivals like Google and Facebook, who compete with it for attention and ad dollars."

    But it seems to me that only one thing is sure to happen as a result of this move - that in the long run, we're going to see yet another traditional business fall. I'm not talking about the NFL here, but the broadcast networks that have long counted on these games to generate big ratings and big ad dollars. Because at some point, the prime audience for the games may want to watch them someplace else.

    I suspect that the games are going to generate big ratings and big ad dollars for somebody ... but it may not be networks.

    Forbes analyzes it this way:

    "Live streaming online is only growing larger as the millennial crowd is staring to become more interested in appointment programming. While the concept may be – mostly – dead for the likes of traditional, scripted storytelling, it’s still very much a real desire overall. Audiences still want to be part of a shared experience for a specific kind of programming, and live sports are one of those things. Yahoo jumping on the NFL bandwagon before its competition is simply another way it’s proving itself a formidable force to the opposition as the foundation of the digital war continues to be laid, while traditional media continues to struggle."

    And another one prepares to bite the dust.

    When it happens, it'll be an Eye-Opener. Though, to be honest, neither a shock nor a surprise.
    KC's View:

    Published on: June 5, 2015

    The Washington Post reports that Subway, the world's largest fast food chain, yesterday announced that it plans to eliminate all artificial colors, flavors and preservatives from the menus in its US stores by 2017.

    It is the same direction previously charted by competitors such as Chipotle, Panera, McDonald's, Taco Bell and Pizza Hut, as fast feeders look to become more appealing to an increasingly large percentage of the population that wants fresher, healthier foods ... even at their local fast food joint. Though, there remains some question whether this particular move will be effective in achieving this end.

    The Post writes: "Knocking out artificial ingredients, experts said, has become a tried-and-true method for massive food chains wanting to look healthier without becoming, well, healthier. It's a glitzy move of marketing, not nutrition: If chains really wanted to better their food, Penn State University food science professor John Coupland said, they'd change not their color, but their sugar content or portion sizes.

    "But here's where it gets tricky. Axing the food elements that are least healthy carries a big risk: turning the product into something fewer people want. Cutting minor chemicals, though, gives the chain a healthful glow without actually changing anything important."

    Subway officials say that it will be a "daunting" task to achieve this particular goal by 2017, but that they wanted to be aggressive; they also say they are not sure it will have any measurable impact on a sales decline that seems to be caused by a perception that the company is not as healthy as has been portrayed in its advertising.
    KC's View:
    Michael Sansolo had an excellent column about Subway's travails, which you can read here.

    Ordinarily, I would think that we are seeing a sea-change in the way fast food is created and sold in this country. Except that I keep seeing advertising on television for a burger made with a beef patty, topped with a split hot dog, sitting on a layer of potato chips. It sounds awful ... and suggests that maybe we're seeing a kind of bifurcation in the fast food business.

    Published on: June 5, 2015

    Reuters reports that H-E-B "is asking its customers to limit egg purchases due to an outbreak of avian flu in the Midwest that has crimped egg supplies nationwide.

    The avian flu outbreak has led to the "culling" (no, that's not a misspelling ... just the term of art) of some 40 million birds, and a resultant egg shortage.

    ""H-E-B has put up signs on our egg shelves throughout all of our stores, asking our customers to limit their purchases to three cartons of eggs per purchase," says spokeswoman Dya Campos.
    KC's View:
    It sounds like one of the things that H-E-B is concerned that restaurants needing eggs could come in an buy out all its eggs ... which I suppose could lead to rationing. Which might be a sensible national approach if the egg shortage continues and/or gets worse.

    Published on: June 5, 2015

    The Washington Business Journal reports that "Safeway says it has 2,000 summer jobs to fill across its four-state Mid-Atlantic region, and says it is the first time in years it has added a significant number of jobs beyond those needed to fill vacancies."

    Safeway, which was acquired by Albertsons earlier this year, says that this is the first time in a long time that it has looked to "hire well beyond attrition," and believes that "some percentage of those hired will become long-time Safeway employees.”
    KC's View:
    If Safeway wants to test an approach that reflects an increased commitment to full-time employees who can serve as a differentiating advantage in its competitive battles, then that's a good thing, I think. I'm not entirely sure that this is what it is advocating here, but it sound like it could be.

    Investing in people can be the best possible investment for a company ... and convincing young people that retail can be a fulfilling career choice is an excellent strategy. I hope that's what they're up to.

    Published on: June 5, 2015

    Walmart's annual shareholders meeting in Arkansas is the occasion for a number of stories about the company, including this one from Fortune about CEO Doug McMillon, calling him perhaps "the best prepared executive to lead the company since Sam Walton."

    The story notes that "Walmart finds itself at a critical juncture in its history—and the company is counting heavily on McMillon’s ability to meet the extraordinary challenges ahead. He is a homegrown talent who was marked for leadership early. And he’s spent his entire career rotating through different roles at Walmart in preparation for this moment, like a can’t-miss prospect working his way up to the Big Leagues. In that sense the company’s directors didn’t so much select McMillon as CEO as anoint him."

    Fortune writes that "McMillon has moved with a sense of urgency in his first 16 months on the job. He has put new executives into key roles, accelerated investments in e-commerce, and made news by raising the minimum wage for hundreds of thousands of Walmart workers—the last of these as part of a concerted effort to improve the store experience by empowering frontline associates. McMillon is trying to reinvent his half-century-old company and infuse it with a new, Silicon Valley–esque metabolism."

    And the story goes on: "McMillon has impressed executives outside Walmart as well. Facebook COO Sheryl Sandberg got to spend time with McMillon last year when he and his executive team visited Facebook, and the two have stayed in touch. She views him as the rare executive who can focus on day-to-day operations while at the same time driving innovation.

    "'Usually when you meet leaders, you get a sense that they’re focused on one or the other: execution of their current business or innovative ways to grow,' says Sandberg. 'What’s interesting about spending time with Doug is that he’s clearly on both. His conversations, his questions—he’s on both'."

    It is an admiring story, and worth reading here.
    KC's View:

    Published on: June 5, 2015

    The Chicago Tribune reports that PepsiCo will launch a line of 'craft' fountain sodas made with sugar, not high fructose corn syrup, in hopes of recapturing some sales momentum in a consumer environment that seems to be turning away from traditional soft drink brands.

    The line, called Stubborn Sodas, reportedly will include flavors like black cherry with tarragon, orange hibiscus, pineapple cream and agave vanilla cream.

    According to the story, "The push to develop a market for "craft" sodas comes as Americans have been cutting back on carbonated drinks generally, with people turning to a growing number of teas, waters and other choices in the beverage aisle. Food and beverage executives say people are increasingly buying things they feel are natural or wholesome. The trend has also prompted Coca-Cola to introduce Coke Life, which is sweetened with a mix of sugar and the plant-derived sweetener stevia."
    KC's View:

    Published on: June 5, 2015

    Bloomberg reports that Tesco may be looking for a buyer for its South Korean business, with expectations that it could bring the company as much as $5 billion. If a sale does not occur, the possibly exists that the business could go public through an IPO.


    • Balance Innovations is out with its annual survey into consumer attitudes toward payment safety, concluding that there has been "a slight drop in confidence, with fewer shoppers saying they were 'very confident,' down from 39 percent to 35 percent. Instead, more people were just 'somewhat' or 'not too confident'."

    The study also revealed that "payment safety confidence was notably higher among millennials, 49 percent of whom said they were very confident. This is in contrast to just 30 percent of those aged 45 to 60 ... The share of shoppers who made changes to their typical way of paying for groceries as a result of data breaches dropped slightly from 41 percent in 2014 to 39 percent in 2015."


    • The Wall Street Journal reports that Costco has confirmed that it "has received subpoenas from the Drug Enforcement Administration concerning prescriptions for controlled substances and related practices," saying that law enforcement officials believe "that the company has committed civil regulatory violations concerning these subject."

    The story notes that a number of retailers have found themselves to be the target of federal probes related to the distribution of and record keeping for prescription painkillers, with CVS and Walgreen among the companies that have paid multimillion dollar settlements to the government.
    KC's View:

    Published on: June 5, 2015

    • Ahold USA announced that it has hired Jennifer Carr-Smith, most recently COO of J Crew's online business, to be the new president?general manager of its Peapod division. She succeeds co-founder Andrew Parkinson, who will take on an advisory role with the company, looking for new opportunities for Peapod.
    KC's View:

    Published on: June 5, 2015

    will return.
    KC's View:

    Published on: June 5, 2015

    When American Sniper came out late last year, friends and readers urged me to see it, but for some reason despite my best intentions, I never got to it. But last weekend, while Mrs. Content Guy worked on report cards for her third grade class (spoiler alert: they're all going to fourth grade), I settled down with a glass of wine to watch it streaming via Amazon.

    There was much about the movie that I liked, especially the performances of Bradley Cooper, stunning as Chris Kyle, the deadliest sniper in US military history, and Sienna Miller as his wife. But I must confess that I am sort of lukewarm about the film as a whole, mostly because yet again I found a Clint Eastwood-directed movie to be largely uninspired.

    Let me be clear about this. I respect Eastwood immensely. The sheer volume of is work, the dedicated work ethic, the willingness to try new genres at an age when most people have retired ... all of these things are the stuff of legend. (Compare his career to that of Burt Reynolds, a contemporary of Eastwood's who arguably was a better actor and also did some directing, but who made lousy choices, showed lousy taste and pretty much squandered away his career.)

    But when Eastwood directs,I'm almost never caught up in his visual style or sense of narrative. I do think that when he has great material - like American Sniper or Million Dollar Baby - and terrific actors, the results can be great. And he's very good at getting wonderful people to work with him, in part because he's known for being highly efficient on the set.

    For me, as usual, it all comes down to efficiency vs. effectiveness ... and I think he's better at one than the other.

    That said ... I did not share the view of some that American Sniper was myopic in its view of Middle East conflicts, that it should have been more conscious of the political morass that was not being resolved by military actions there. American Sniper is not so much myopic as focused - its job was to illustrate the challenges and often wrenching choices facing the on-the-ground military men and women, and the disconnect that they often end up feeling from the real world back home.

    American Sniper is good, with great performances, and certainly worth seeing. I'd give it a strong B.




    I saw another movie last weekend, however, that I'd give an A - a little documentary called The Battered Bastards of Baseball that is absolutely worth seeing, especially (but not only) if you love the National Pastime.

    And one of the best things about it is that it is all about my adopted/future home, Portland, Oregon.

    The Battered Bastards of Baseball tells the story of the Portland Mavericks, an unaffiliated and independent minor league baseball team that was launched there in 1973 after it was decided to pull the Tripe A team out of the city because it was deemed not enthusiastic enough about baseball.

    The Mavericks were founded by Bing Russell, who had grown up in Florida, in the shadow of the Yankee training camp, and had known stars such as Joe DiMaggio, Lou Gehrig and Lefty Gomez; had been not quite good enough to play major league ball and had gone on to have a successful career as a Hollywood character actor (with a run on "Bonanza" as a deputy sheriff); and was the father of actor Kurt Russell.

    Russell was a showman with an enormous love of the game, and he pulled together a team that was eccentric, talented, and a huge hit in Portland, aided by comeback efforts by former major leaguers such as Jim Bouton. Using clips and interviews, The Battered Bastards of Baseball does a wonderful job of spinning an outrageous and utterly accurate tale ... and I highly recommend it. (The movie is available on Netflix.)




    I have a wonderful wine to recommend to you this week - the Saffron Fields' EiEiYo 2012 Pinot Noir from Oregon - a delicious wine that is velvety and rich and so, so worth hunting down. (Thanks to Tina Ford for sending this one my way...)




    That's it for this week. Have a great weekend, and I'll see you Monday.

    Slàinte!
    KC's View: