retail news in context, analysis with attitude

Published on: October 28, 2015

by Kate McMahon

First there was the America’s Choice product fire sale in the freezer cases. Then the paltry selection in the produce section and shuttered butcher counter. Finally, the wilted roses (75% off – dead petals included) symbolized the end of my local supermarket for the past 24 years.

The sole Food Emporium in suburban Connecticut closed last week, mercifully ending its waning days as part of the now-bankrupt Great Atlantic & Pacific Tea Company. It was a depressing demise, and a case study in how A&P management ran a once great 156-year-old company into the ground while cashing undeserved bonus checks.

Even bleaker is the Food Emporium in my daughter’s Manhattan neighborhood, which is reportedly “in limbo” – with no bidders thus far in the bankruptcy auction for A&P’s properties, just half-stocked shelves.

I remember when Daitch Shopwell introduced the then innovative “upscale gourmet” Food Emporium format in New York City in the late 1970s-early 1980s, offering specialty foods and basics in the same store. It was a retail game changer, and the impetus for A&P to purchase Shopwell in 1986 and expand.

As A&P stumbled through two bankruptcies in the past five years, I hung on my A&P/Food Emporium loyalty card largely due to convenience. It is the only supermarket in town and my go-to for household sundries and dog food when I don’t want to trek to Costco. But the brand has been on the decline for years and losing customers to bigger supermarkets in neighboring communities, two Trader Joe’s, Whole Foods, Fresh Market, Stop & Shop Peapod deliveries, even CVS for milk and paper towels. If I want to purchase my Thanksgiving turkey or beef tenderloin for Christmas dinner, I drive to Stew Leonard’s.

Albertsons-owned Acme Markets purchased the store, along with 75 other A&P outlets in the Northeast. Acme president Dan Croce was on hand last Friday when the property reopened as Acme after a three-day makeover, calling the expansion a great opportunity for his 124-year-old company. It’s too bad the “makeover” didn’t include replacement of the tired linoleum floors and old fluorescent light mixtures, all in need of updating. This Food Emporium has not been renovated or update since the early 1990s - and looks it.

It remains to be seen whether the shopping experience will improve, or if the adjustments will be largely cosmetic. The most obvious changes are the addition of four covered cart corrals in the parking lot, swapping milk and egg positions in the dairy aisle, and the return of Boar’s Head products to the renovated deli. (The Boar’s Head development was reported on a local website, and was the talk of the deli department when I shopped.)

(Interestingly, Walter Stewart's Market - the 108-year-old independent grocer across the street from the now-Acme - just announced ambitious plans to renovate and expand its store and prepared food offerings, as well as move its wine and spirits shop to a larger, adjacent property. Maybe a coincidence. Maybe not. But it certainly seems like Stewart's smells opportunity.)

The new Acme representatives were enthusiastically welcoming customers, and the long-time Food Emporium employees I spoke to were relieved to have their jobs and cautiously optimistic. I think Acme faces a big challenge getting customers back to purchase more than just bottled water, cereal and detergent, and will need more than cart corrals and Boar’s Head honey maple turkey to do so.

Acme may be planning a more extensive remodeling at some point down the road, but I wonder if the company would have been smarter to take three weeks to get it right, instead of just three days to get it done in cursory fashion. As we've said often around here with regards to the meager efforts by Haggen when it took acquired stores from Albertsons ... you never get a second chance to make a first impression.


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

Published on: October 28, 2015

by Kevin Coupe

Michael Sansolo yesterday wrote about the importance of having a plan ...and to simultaneously be ready when things change and plans are inappropriate, irrelevant or inadequate.

Fox Sports should have read his column.
Last night, in the first game of the World Series, Fox Sports lost power in its broadcast truck, causing the game to be delayed for about five minutes because the Fox feed also provides the footage for instant replay calls and challenges.

When the game resumed, US viewers first found themselves watching the networks' studio analysts stand around a table trying to come up with a coherent thought or sentence. Then, the network switched to the MLB International feed for a few minutes while Fox tried to fix the problem. (The unintended result, in my opinion, was that it demonstrated how superior the MLB play-by-play announcers were to the guys in the Fox booth.)

But it occurred to me as I was watching Fox apparently dithering about what to do was that this was a great example of what Michael wrote about just a few hours earlier ... that despite all the millions of dollars spent on getting the rights to and then producing the World Series, Fox learned the hard way that anything can happen. And then, at least its on-air announcers seemed out of their depth.

It was an Eye-Opener.

Published on: October 28, 2015

The Associated Press reports that Walgreens Boots Alliance plans to acquire rival drug chain Rite Aid for $9.41 billion.

"The deal comes less than year after Walgreens bought European health and beauty retailer Alliance Boots," the story says. "Besides its namesake stores, Deerfield, Illinois-based Walgreens also owns Duane Reade stores in the US ... Rite Aid stores will initially keep their name after the deal closes, Walgreens said, but that may change over time. The deal is expected to close in the second half of next year."

Walgreens Boots has more than 13,100 stores around the world, while Rite Aid has more than 4,600 stores in the U.S.

Published on: October 28, 2015

The Cincinnati Business Courier reports that as Kroger expands its click-and-collect e-grocery service to a fifth market - Nashville - it also has formalized the band name it will use for the service: ClickList.

"That’s a name it has informally used from time to time in recent months, but Kevin Dougherty, Kroger’s group vice president of digital and Vitacost, said Tuesday at the company’s investor conference in New York that Kroger officially launched the brand name this week," the story says.

The Courier goes on to report that "Dougherty wouldn’t say where Kroger will expand next. It has identified stores where it would like to add the service and it has added some that don’t fit the profile of stores where it's expected to perform well. It’s doing that, Dougherty said, to test the service in other markets and see if it can make it a success in locations that don’t appear primed for it."

Published on: October 28, 2015

Reuters reports that four Amazon Prime Now drivers have filed a lawsuit seeking class action status, "claiming the online retailer wrongly classified them as independent contractors and owes unpaid overtime ... the four drivers say they were hired by a separate courier contractor but work exclusively for Amazon. They wear Amazon Prime Now uniforms, work regular shifts and receive work assignments from Amazon, according to a copy of the lawsuit provided by the plaintiffs.

"That makes the California drivers employees, the lawsuit said, entitled to overtime, meal breaks and other expenses."

Prime Now is Amazon's one-and two-hour delivery service.

"Earlier this year FedEx agreed to pay $227 million to resolve a similar lawsuit in which California drivers alleged they had been misclassified as contractors," the story says.

Published on: October 28, 2015

There's an interesting interview in the Wall Street Journal with Dana Anderson, chief marketing officer at Mondelez, in which she talks about how educating executives about the importance of digital media is critical to the company's transition to one that depends more than ever on digital technologies to spread its message.

In the interview, she makes an extremely important point, that "when our folks are not confident, they will go back to what they know. So if I know how to measure TV and to look at TV commercials, I am going to feel more comfortable with buying TV. If I am less comfortable in digital, maybe I will step back from that."

Published on: October 28, 2015

The Daily Beast has a story about how a US District Court has essentially ruled - by tossing out a class action suit accusing MillerCoors of deceiving consumers by calling its Blue Moon brand a "craft beer" - that any beer can call itself a "craft beer."

The problem, according to the judge, is that there is no legal, binding definition for the term. The issue of differentiation has become more significant as smaller breweries nibble away at the market shares owned by the big brewers, which in some cases seem to be getting even bigger through consolidation.

"This conflict has been long brewing (sorry), as a growing number of small brewers try to distinguish their product from the nameless (and arguably tasteless) products of larger companies," the Daily Beast writes. “'Craft' was supposed to be the term of endearment, as well as a piece of jargon (like Champagne or 'bottled in bond') that set certain standards of production quality and rarity—standards the big guys have no interest in pursuing if they can avoid it."

Published on: October 28, 2015

• The Wall Street Journal has a piece about how "investors are pouring millions of dollars into startups hoping to disrupt the $700 billion trucking industry, the latest example of Silicon Valley’s efforts to upend the traditional economy.

"A series of startups are vying to become an 'Uber of trucking,' leveraging truck drivers’ smartphones to quickly connect them with nearby companies looking to ship goods. The upstarts aim to reinvent a fragmented U.S. trucking industry that has long relied on third-party brokers, essentially travel agents for trucking who connect truckers with customers."

For example, "Los Angeles-based Cargomatic Inc. aims to fill empty space in trucks by connecting companies wanting to ship items with truckers headed their way. The two-year-old company, which has 58 employees and $12 million in funding, has facilitated tens of thousands of shipments in New York and Los Angeles so far this year, CEO Jonathan Kessler said."

Published on: October 28, 2015

In yesterday's MNB, we took note of an NBC News story, widely reported yesterday, about how the new World Health Organization (WHO) report saying that red meat - including beef, pork and lamb - probably cause cancer, in addition to processed meats that it also has said are carcinogenic.

"Many studies show the links, both in populations of people and in tests that show how eating these foods can cause cancer," according to WHO's International Agency for Research on Cancer (IARC), which released the report in Lancet, a medical journal.

The meat industry replied to the charges by saying that the accusations were unwarranted.

I commented:

The real news here would be if anybody in the pro-meat lobbying business actually conceded that their products had any relationship to cancer.

I'm no scientist ... but the WHO findings seem entirely reasonable to me. Then again, I've already cut back on my meat consumption for health reasons. If it helps cut back a bit on my chances of getting cancer, that sounds like a pretty good deal.

Boy, did I get slammed on this.

MNB user Jo Craven wrote:

I’ve read multiple articles on WHO’s claim that red meat causes cancer… First of all every article says “probably” or “most likely”.  What the heck, when did we stop basing facts on scientific proof and start guessing and pointing fingers.  It sounds like WHO should be running for office! If I eat red meat every day for the rest of my life when will the cancer caused by red meat hit? Today, tomorrow, when I’m 97.   Those in the scientific field have a responsibility to the public to not run around crying out like Chicken Little.

Furthermore, you adding to the article that you’ve changed your diet due to health concerns implies that everyone needs to adjust their diets to be more healthy. Let’s, for a minute, take into consideration all the differences in people. Different blood types, different gene pools, different food sources, different activity levels, different medical tendencies…. The list goes on and on and on; to say what one person does or needs in their life that everyone should do or need is just silly. I for one am not falling for it, please, let’s keep to the facts and concrete scientific proof with details. If science proves something causes cancer let us give the public the truth, the facts, and not just the skewed version to manipulate people’s believes in the direction current media wants to lead.

I am not in the red meat industry but I’m really tired of the scare tactics. Everything causes cancer. Everything is bad. They are taking away from things that really are bad and really do cause severe unrepairable damage.

It seems to me that the WHO report is saying that there appears to be a preponderance of evidence that consumption of red meat can lead to a great likelihood of cancer. As I said, I'm no scientist, so I have to depend on actual scientists for information that can help me reach conclusions. And as I said yesterday, the WHO findings seem reasonable.

I understand that there are scientists who disagree with the WHO conclusions. But there also were "scientists" who said that cigarettes did not cause cancer. There are "scientists" who say a lot of things that don't seem reasonable to me. So I read what I can, understand what I'm able to, and try to reach reasonable conclusions on my own.

If other people want to reach other conclusions, that's their business. To be honest, it's none of my business as long as the conclusions and disagreements don't veer into the public policy lane, at which point things get more contentious.

I added the part about my own diet - which to be honest, is far from optimal - because that is the section called "KC's View." It is what I've always done ... personalizing commentary in an effort to be both communicative and, sometimes, provocative.

By the way ... you write that I'm implying "that everyone needs to adjust their diets to be more healthy." I'm not in the business of lecturing anyone about how or what they eat, but I would suggest that the nation's obesity crisis does a lot more than imply this.

Another email, using the subject line "you disappoint me," came from MNB reader Jean O’Toole ... who is, I think it must be pointed out, with the New York Beef Council:

I’m sure you are not rocked by the subject line, unless maybe if it was coming from your mom.

I’m disappointed in your comment about WHO and the link to meat and cancer.  Maybe take a minute to view what comments people are saying about WHO/IARC and not the meat industries, they would beg to differ with you.  Of course industry will defend, however I’d like to see you defend your statement, do you have proof?  Maybe instead of WHO/IARC making assumptions, and not based on ALL factual data, maybe they should study the beef producers around the world and seek cancer rates in their families, maybe looking at century’s old practices of curing meats as a preservative, it’s a wonder we exist today.
 
Oh well, we all have opinions, even myself and yes I work for the industry, didn’t grow up in it, but have learned to admire and respect how it functions.  It’s unfortunate that you didn’t take the time to see the multitude of comments on reports from CNN, Fox News, BBC to see the lack of transparency that others saw.

I’ll still follow your MNB, but every once and awhile, you lack further insight to what is being said, I’ll have to remember that if and when I feel you are influencing my views.

Nobody should agree with me all the time. And for the record, I did note yesterday that the beef industry disagreed with the WHO conclusions ... though I must concede that I did point out that it would've been real news if it had concurred with them.

I'm sorry if you think that when I express an opinion contrary to that of the industry that signs your paycheck, it undermines the validity of every opinion I express on every subject. To be honest, if I worried about such things, I'd never express an opinion.

From MNB reader Dan Jones:

The sun may cause cancer, but you don’t spend your life in a dark room.  The smell of a new car may cause cancer, but nobody spends 24/7 in new cars.  Red meat may cause cancer, but few people eat red meat at every meal.  And if you do – cancer may not be the first thing on the list to get you.
 
I think singer-songwriter Joe Jackson had it right years ago – “No caffeine.  No protein.  No booze or nicotine.  Everything gives you cancer.  There’s no cure, there’s no answer."

I'm sorry. The sun may cause cancer?

You're right, though. I don't spend my life in a dark room. But I do wear sunscreen, do wear a hat.

I wasn't suggesting that I was going to stop eating red meat completely. To my mind, the WHO conclusions serve mostly to suggest that people should be conscious of how much meat they eat because of the likelihood that it could increase the chances of getting cancer.

MNB reader Dennis Sirianni wrote:

These findings somehow remind me of the Salem Witch Hunts.  It was probable those women were witches, I mean they had a birth-mark or exhibited some odd behavior.  I mean, it couldn't be explained, so….why not a witch?  It was an answer to what was scaring the population, right.

Well, let's be realistic about this.  Cancer, is scary, and remains elusive, so, why not advance an idea that seems to be plausible into the public conscience, and let those who are frightened of the witch, something to focus on instead of the “why the accusers of the witches actually pointed them out in the first place”.  Ignore the man behind the curtain!!

I suppose (by the standards espoused in the WHO report), it is probably that stepping on a crack, can break your mothers back!  Look, if responsible science understood the causes of cancer, it could be cured.  There are certain facts in life, we will all die, some will abuse themselves and life long lives, some will avoid every Witch, and be careful walking on every sideway, and will still succumb to our eventual fate.

Herding animals for energy is not an invention of Modern Man.  Tribes in Persia understood that the grasses contained the energy of the sun, but humans could not eat or process grass, but animals were converting this energy into proteins that we could eat.  The harvest of the animal was spiritual, and we (as a species) advanced and thrived.  Heck, I know I am protecting the Red Meat Industry (and I am), although, my real issue is RESPONSIBLE SCIENCE and REPORTING….

I won't speak to the question of "responsible science," simply because I'm not qualified to defend people a lot smarter and more educated than I.

As for "responsible reporting," I think it would have been irresponsible if I had not reported this story yesterday. It's out there. Deal with it. Disagree with the conclusions, if you want. But don't suggest that the WHO study should not have been reported.




Got a lot of very positive email (thank goodness!) about our story yesterday regarding the REI decision to close its stores on Black Friday, pay its employees and urge them to go for a hike rather than get involved in the morass of post-Thanksgiving commercialism.

One MNB user responded:

I'm thinking we may be seeing the beginning of the end of Black Friday shopping frenzy.  I know retailers don't  want to hear this, but with many more options on shopping (on line, deals before and after Friday, lay away, etc), who needs to fight crowds on one of our precious days off?  This now seems so "yesterday"-like, you can only get deals on one day?  It's  possible REI is ahead of the curve here.

From MNB reader Jenn Nannini:

I could not agree more.  I heard the news of REI’s decision to stay closed on Black Friday on my morning commute and was moved to tweet out a note of support for them.  As a loyal REI member for many years, I applaud their decision and the consumer in me bears only warm fuzzies to the company for making it.  As a seasoned marketer, I also think it’s not an entirely altruistic choice, but a sound business calculation made on the foundation of deep understanding and insights about the values that it’s core consumer base holds dear.  When a business projects shared values of those shoppers it wishes to attract, it can reap tangible benefits — increased loyalty, brand equity, and, yes, even the elusive benefit of “brand love”.  

Love and appreciate the insight I get from you every day –thank you!

MNB reader Russell J. Zwanka wrote:

The REI move for Black Friday is a genius position for the company!  The lifestyle they represent is just begging for this type of a statement.  They are about the outdoors, so get outdoors.  And the brilliant part?  Just like when Patagonia told you to stop buying their products, sales will probably increase because of this statement.  Anyone can sell price, not everyone can connect with a lifestyle. Nice move!

From MNB reader Nancy Lazara:

REI is one retailer that I won’t have to Boycott on Black Friday. Kudos to them for so many reasons. I’ll be with family and friends enjoying my Turkey Dinner and inspired to do something in the spirit of REI.

MNB reader Mark A. Boyer wrote:

I am already an REI member; have been for a long time. But if I weren’t, I would become one. And give them all of my business that I could.

And from MNB reader Ronnie Cook:

I have used REI off and on for years. This Black Friday decision reinforces the good karma and great customer relationship I have experienced with REI. This move will definitely help me decide to shop REI more often.

And from MNB reader Kevin Hollenbeck:

My wife is a strong consumer of REI ( I am not) and I can tell you when she hears this, it will only strengthen her commitment to REI. While I am not sure how it will help them attract new consumers, I would imagine their base is like my wife and will only strengthen their connection to this retailer. Which by the way is bad news for my pocketbook.

Published on: October 28, 2015

In a 14-inning marathon of a first game of the World Series, the Kansas City Royals defeated the New York Mets 5-4.