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: November 13, 2015

    by Kevin Coupe

    If todays teens and 'tweens are tomorrow's core retail customers, then a new study from the nonprofit Common Sense Media reveals that US children between the ages of eight and 12 spend more than four hours a day using devices with screens, and almost six hours a day using media of any kind. Teenagers, on the other hand, use devices with screens for more than 6.5 hours a day and close to nine hours total using various forms of media.

    James Steyer, the CEO of Common Sense Media, tells the PBS NewsHour that "there is no one archetype. There is no one-size-fits-all kid. And so you have kids on social media, watching TV, listening to music, even reading books, remember them, and then doing different forms of media, but the bottom line is the sheer volume of time that kids spend today means that they have a 24/7 reality with media and technology that’s shaping their lives in so my many ways."

    Steyer makes two important points here:

    One is that these young people are embracing a multitasking culture: "Two-thirds of the teenagers that were surveyed say that they continue to multitask, meaning they’re on Facebook or Instagram or texting their friends, while they’re doing their homework ... They’re supposed to be reading Shakespeare, but they’re texting their friends."

    Two: Despite the belief that young people's brains are wired for multitasking, t doesn't work.

    "It’s a myth," Steyer says. "Some of my colleagues at Stanford University did a major study on this a couple of years ago, and showed that you simply can’t have two conversations at once and you can’t concentrate on more than one thing well. Think about how important homework it is to concentrate on information. So, the multitasking finding in this study has very big implications for schools, and also for parents giving guidance to their kids."

    One of the goals of the study is to educate parents about how to establish rules of the road for their kids when it comes to the use of digital technology - in essence, teaching parents to be digitally literate so that they can guide and teach their kids effectively.

    But it also holds lessons for businesses, which have to figure out how to engage with these young people as both customers and employees. They may not be able to multitask ... but they think they can, are utterly persuaded that their brains are wired differently, and are going to be influenced in ways far differently than their parents.

    It is an Eye-Opener.
    KC's View:

    Published on: November 13, 2015

    H-E-B announced yesterday that it will now be selling some 50,000 products online and shipping them nationally.

    According to the announcement, "Products include H-E-B's popular store brands like Central Market Organics and Cafe Ole Taste of Texas Coffees, as well as a large variety of national brands ... Popular Texas brands that are only available at H-E-B stores are now available to purchase and ship at HEB.com. The new "Totally Texas" page at HEB.com/texas includes products made in Texas or inspired by Texans like Whataburger Whatafries and Spicy Ketchup, Franklin Barbecue Sauce made in Austin, H-E-B chips, sodas, salsas and more."

    The company said that "orders can be shipped throughout Texas, to 46 states within the continental U.S. and to military bases worldwide."

    H-E-B adds that "shipping fees vary and average $5 to $10 per order. Some products require a minimum order quantity, but all products are priced at the same everyday low prices shoppers can find in-store ... Any product ordered online can be returned to any H-E-B store anywhere for an immediate full refund, or products can be sent back using free shipping."
    KC's View:
    H-E-B is one of those retailers uniquely positioned for an enterprise like this one ... it pretty much defines the state of Texas, and the offering will have a lot of appeal to Texans who find themselves living elsewhere but yearning for a taste of back-home.

    But I also suspect that this reflects a greater hunger on H-E-B's part for a digital offering that will take it beyond the program it has been running with Instacart, and an understanding that it has to play in this arena to maintain the competitive advantages it has long enjoyed.

    Published on: November 13, 2015

    The San Diego Union-Tribune reports that the initial auction of Haggen stores being sold off after the company went into bankruptcy because of its disastrous expansion into California, Arizona and Nevada, was "spirited" and "saw the grocer offered roughly $5 million more than originally proposed, according to lawyers who attended."

    According to the story, "More than 200 lawyers, creditors and investors attended the auction in Los Angeles, said James Hill, an attorney with San Diego-based Sullivan Hill Lewin Rez & Engel, which represented a seller ... In many cases, initial bids were far exceeded. A Chula Vista store on Telegraph Canyon Road received a bid from Carnival Supermarket earlier this month for $600,000 but was offered $2.1 million at auction to Tawa, owners of Asian-themed grocery chain 99 Ranch Market.

    "An initial bid of $295,000 by Smart & Final for a North Park store on University Avenue ended up going to the grocer for $2.4 million in back-and-forth bidding with Orchard Supply Hardware. Multiple bidders led to a La Mesa store tentatively selling for $1.56 million to Albertsons — $1.16 million more than its initial bid."

    According to the story, "The senior director of the Cushman & Wakefield brokerage firm, John Jennings, said he was not surprised the stores did well at auction because vacancy rates for big box stores are so high in the county that it can be a barrier to expansion. He said it would normally be next to impossible for the bidders to get the locations."

    The stores are being auctioned because the 18-store Haggen decided to expand into a 164-store chain by acquiring units being sold off because Albertsons was buying Safeway and the government required it for "competitive" reasons. That expansion was driven by the equity group that owns Haggen, Comvest, and was nothing short of a debacle, and now the company is selling off those stores, and even laying the groundwork for going out of business by getting the court's permission even to sell the original 18 stores.
    KC's View:
    There are a lot of folks who will read this story and be disgusted, thinking that this is just another case of the money guys doing just fine even as their misguided retail adventurism ends up costing a lot of people their jobs.

    Count me among them.

    The only upside is that this is a very good opportunity for well-run retailers like Smart & Final to expand judiciously ... Smart & Final is the kind of retailer that has vision, and story and the ability to implement effectively.

    Published on: November 13, 2015

    Business Insider reports that "McDonald's is installing digital menu boards at restaurants nationwide that will make food recommendations based on the weather," essentially promoting heartier foods when it cold and blustery and lighter foods when it is hot. The menu boards also are keyed to time of day in terms of what meals to promote (though these days breakfast is always on the McDonald's menu).

    The company says that the menu boards should be installed in all of its US stores by the end of 2016; tests, the company says, have proven that the boards lead to higher sales.
    KC's View:
    I'm still trying to wrap my head around the idea of McDonald's serving "heartier fare" ... though I'm pretty sure I know what they mean.

    Published on: November 13, 2015

    The Associated Press reports that KFC plans to start offering delivery services in Los Angeles and San Francisco, expand the service into Houston by the end of the year, and perhaps roll it out nationally in 2016.

    It is, the story says, the first time KFC has offered delivery in the US.

    According to the AP, "Customers make orders through the online delivery company DoorDash’s app or website. The chicken won’t come cheap: There’s a delivery fee of between $4.99 and $6.99, depending on a customer’s location, and prices of some items will be higher than those in the restaurants."
    KC's View:
    Personally, I think KFC is missing a pretty good bet. What they ought to do is roll out the delivery offering first in states that are legalizing marijuana ... and then go from there. Sounds like a natural market to me.

    Published on: November 13, 2015

    McDonald's CEO Steve Easterbrook did a sit-down interview with the New York Times, in which he outlined the issues facing the company and the degree to which such an enormous enterprise can embrace real change.

    Some excerpts:

    • "My priority is to first of all call it a turnaround and then start to deliver actions to get the business moving. We’re a large business, a global business in more than 100 countries, and we had gotten used to a certain way of doing things. What I’ve looked to do is try and become a change agent for good, to create the behavioral changes, the cultural changes to really embrace urgency, adopt a higher tolerance to risk and just encourage people to make decisions ... What I’ve tried to do is just add that sense of urgency. We have a huge amount of talent in the business, and we just encourage people to feel confident in their convictions and alter their decision-making — and let’s get going."

    • "What I’ve found most rewarding is the speed with which the organization has embraced the challenge. We’ve done certain things internally like restructuring our global business, which was a fundamental change in the way our operating business is structured. Which after 40 plus years of having the business structured in that way, the manner in which all of our people embraced the change, recognized the need and the benefit of it, has been really rewarding to me. It kind of encourages me to go harder and faster.

    • "There’s absolutely no doubt consumers have more choice than ever, and the standards of all that provide food have improved over time. Our No. 1 priority is — and it’s as simple as it sounds — is to run better restaurants and consistently."

    • "Our franchisees are independent businessmen and businesswomen. They set their own pay scales, and over time, they’ve been expert at that. They, just like the company, we recognize we’re in the service business and therefore we want to hire and train and retain the best front-line staff we can, and pay is part of that package to attract the best and retain the best. But there’s no doubt there’s upward pressure on the operating business as a result. It’s an above-inflation cost increase, and therefore in order to manage that, we then need to grow the topline of the business to help accommodate those costs.

    "But also what we’re working really hard on is to see it less as just a cost but more, if you like, as an investment. Because if we get a more high-trained, high-motivated staff in our restaurants, turnover comes down, our productivity improves and we deliver a better day-to-day customer experience. Ultimately, the customer benefits from the investment we’re making."
    KC's View:
    I continue to think that investment has to be the byword for McDonald's and its franchisees ... they have to invest in better food and better employees, and see those things not as costs but as absolutely necessary if the company is going to thrive.

    Published on: November 13, 2015

    The Associated Press reports that "obesity is still rising among American adults, despite more than a decade of public-awareness campaigns and other efforts to get people to watch their weight, and women have now overtaken men in the obese category, new government research shows ... the Centers for Disease Control and Prevention said in a report Thursday that the obesity rate climbed to nearly 38 percent of adults in 2013-14, up from 32 percent about a decade earlier."

    Experts, the AP writes, have no explanation for why the rate is rising despite all the attention being paid to the issue; some experts say that the numbers have to be taken with a grain of salt (no pun tended), since "the participants selected for the study may not have been representative of the nation as a whole."
    KC's View:

    Published on: November 13, 2015

    • The New York Times reports that Walmart "says it significantly boosted its holiday inventory for electronics, toys and other potentially popular products, betting that the promise of being in-stock will attract customers during this crucial shopping season."

    "We bought really deep. It's our commitment that we are going to have product and that is one of our key advantages," Steve Bratspies, Walmart's chief merchandising officer, said yesterday.

    And, the Associated Press reports that Walmart says that "it is offering most of the same Black Friday 'doorbuster' deals online and in stores for the first time and giving online shoppers an early jump on the sales."
    KC's View:

    Published on: November 13, 2015

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

    • Rite Aid said yesterday that it has begun selling genetic testing kits manufactured by a company called Harmonyx, described as a "self-administered oral swab test (that) will help patients determine the effectiveness of their prescription medication based on their genetic makeup. Currently, Rite Aid is offering genetic testing for three classes of medications including those used to manage cardiac conditions, cholesterol and attention deficit hyperactivity disorder. Rite Aid pharmacists are available to help patients and physicians determine if a particular test is medically appropriate."

    I just find all this stuff to be fascinating, the degree to which technology is going to be able to influence what we consume - from food to pharmaceuticals - and how they affect us. We're just scratching the surface...
    KC's View:

    Published on: November 13, 2015

    ...will return.
    KC's View:

    Published on: November 13, 2015

    In Thursday Night Football action, the Buffalo Bills defeated the New York Jets 22-17.
    KC's View:

    Published on: November 13, 2015

    It's been a rarity since I've been doing MNB that I haven't had anything to bring to the table for Friday's OffBeat ... but this is one of those weeks. For a variety of reasons, I haven't been able to get to any movies or read any books, so I haven't any reviews to share. I haven't even tried any new wines - I've had a few beers, but have relied on old favorites, like Smithwick's and Full Sail Amber. Just been that kind of week.

    I do have a quick story to share with you though.

    Yesterday I went to a Starbucks for a cup of coffee, and while I was waiting for it to be made, I became aware of Christmas music playing over the speakers. And behind the bar, the barista making the coffee was dancing to the music and softly singing the lyrics as she did her work. She was, to be sure, having a great time.

    I grinned at her, and commented that I was pretty sure she'd be sick of Christmas music pretty soon, especially since it seemed to be starting so early.

    "Nah," she said. "It's all Christmas in here."

    Not for everyone, I pointed out.

    And she gave me a big smile, and said, "That Donald Trump, he don't know what he's talking about."

    And then she gave me my coffee. But more than that, she gave me a laugh ... and maybe a little bit of wisdom.




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

    Slàinte!
    KC's View: