retail news in context, analysis with attitude

Published on: December 1, 2015

by Michael Sansolo

Like many in the industry we primarily cover, MNB has a tendency to focus on the new and different. We write a lot about technologies, competition, demographic trends and other emerging issues.

But you’ll notice something else: we celebrate food—and by “we” I mean Kevin mostly. He talks about meals, Oregon wine, craft beer, his cooking and more all the time. And he’s right. (If sometimes nauseating. And I think Mrs. Content Guy sometimes agrees with me.)

Food is special to all of us for both sustenance and emotions. As the entire holiday season - Thanksgiving through to the Super Bowl - reminds us, many of our good times revolve around what we cook and eat and whom we do it with.

For the industry that focuses on selling all that stuff, we can’t ever forget the role food plays. We need to celebrate it, nurture it and, hopefully sell a lot of it profitably to shoppers who feel the exact same way.

An interesting article in the Washington Post this weekend examined a strange aspect this connection to food: The need for comfort when the weather turns cold and nasty. This shouldn’t surprise anybody, but it remains a great reminder of the ability to connect with shoppers in a deeper way than the last-minute dash for milk and toilet paper.

Based on Google data, the Post found that in most of the US, winter weather gets people thinking of pork chops. (I'm a Northeasterner, and I'm a little surprised by this. When the storms come our way we look for recipes with meatballs.)

The two outlier states were Oregon and Utah where they search for lasagna and chocolate chip cookies, respectively. (Kevin makes a good lasagna. He'll be pleased about the Oregon data.)

As the Post pointed out, there are countless other products and services people reach for when the weather turns bad—such as crafting kits from Michaels, or even where to find boot laces.

For the food industry the seasonality of specific products is a pretty obvious topic, yet I think there are still some really good reasons for such findings to get discussed because like it or not, things do get forgotten.

We know, for instance, that statistics based on a statewide average of Google searches are an accurate indicator of almost nothing. Businesses need to know and understand their own shoppers and their specific needs. Given the widespread diversity of our communities these days we need to recognize that pork chops are probably a great choice in some neighborhoods and a terrible choice in others.

More than ever, we need to understand these emerging demographic groups to find and fill their needs. I’m betting that there are as many comfort choices for Hispanics as there are different types of Hispanics. So make sure your aim is true for the folks you are serving.

Beyond that, let’s remember that a study like the one in the Post reminds us that our customers’ relationship with food is unlike any other product. It gives us a special opportunity and responsibility.

That means their relationship with your stores, products and services is equally special…or at least, as special as you make it. So make it special because what matters to shoppers is really what matters most to you.


Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.

Published on: December 1, 2015

The Associated Press reports that as of 7 pm yesterday, estimates were that total 2015 Cyber Monday sales would rise 12 percent to $2.98 billion, with final numbers expected to be available tomorrow. There are some projections that Cyber Monday sales could top $3 billion.

The story notes that since "shoppers are online all the time anyway, the 10-year-old shopping holiday has lost some of its luster as online sales on Thanksgiving and Black Friday pick up. But enough shoppers have been trained to look for 'Cyber Monday' specific sales to ensure the holiday will still mean big bucks for retailers."

The AP also reports that online traffic was so high that "there were a few brief outages at sites like Neiman Marcus and Target and online payments company PayPal reported a brief interruption in service."

Target, however, maintains that its site never was down, but rather just slow for some shoppers. "Target.com is not down," said Molly Snyder, spokeswoman for Target. "We continue to receive and process thousands of orders from guests who are shopping the entire site and taking advantage of the discount coupled with free shipping. We apologize to guests who experience any delays, we appreciate their patience, and encourage them to try again in a few minutes by refreshing their browser."

Regardless of the specifics, the Washington Post writes that "even as retailers were ringing up big online sales, the day provided ample evidence that some of them still have a long way to go to adapt to an era when more and more people are shopping from their smartphones and tablets."

And, the Post adds, "Cyber Monday’s traffic and purchasing patterns underscored the extent to which the retail wars are increasingly being fought on the smallest of screens. Adobe reports that some 53 percent of traffic and 32 percent of online sales came from a mobile device. Most of that traffic was from smartphones, with a significantly smaller share coming from tablets."

Fernando Madeira, president/CEO of Walmart's online business, released the following statement about the company's weekend sales: "“Mobile firmly established itself as the dominant shopping trend, for both traffic and sales. Mobile is making up more than 70 percent of traffic to Walmart.com, and now, nearly half of our orders since Thanksgiving have been placed on a mobile device – that’s double compared to last year. Our customers went from previously mostly searching and browsing on mobile, to making purchases at a much higher rate."

As for the total holiday sales expectations, "research firm comScore expects online sales to rise 14 percent to $70.06 billion during the November and December shopping period, slowing slightly from last year's 15 percent rise," the AP writes.

UPDATE: MarketWatch reports this morning that "sales at brick-and-mortar stores between Nov. 26 and Nov. 29 totaled an estimated $20.43 billion, 10.4% lower than 2014, according to ShopperTrak, a consumer research and analytics company ... Sales on Thanksgiving day were an estimated $1.76 billion, a 12.5% decrease from last year. Sales on Black Friday were about $10.21 billion, about 12% down from last year."

Published on: December 1, 2015

The Daytona Beach News-Journal reports that Publix plans to expand its delivery service to the Daytona Beach, Florida, area as of December 16.

The service is via Shipt, described as an "Uber-like delivery service" that has expanded to several states and allows customers to order from Publix via its own website. According to the story, "Since introducing its service in Tampa three months ago, Shipt has quickly expanded to include service throughout much of Florida. For now, it only allows customers in the Sunshine State to order goods from Publix stores ... The application is free to download, but the company charges customers a membership fee of either $99 a year or $14 a month. After signing up, orders of more than $35 are not charged beyond the subscription price. Orders of $35 or less are subject to an additional delivery fee of $7."

Published on: December 1, 2015

The Associated Press reports that the Global Energy Balance Network (GEBN), a nonprofit organization focusing on how to battle the obesity crisis, has closed its doors just weeks after it was disclosed that funding by Coca-Cola appeared to dictate its position that more exercise, as opposed to cutting back on sugary drinks is the best way to combat obesity.

According to the story, the organization "said on its website Monday night that it is 'discontinuing operations due to resource limitations.' The decision was effective immediately."

The AP story goes on: "The Global Energy Balance Network, led by a professor at the University of Colorado School of Medicine, came under fire in August after the New York Times reported on the group’s funding by Coke. In September, in an effort to be more transparent about its contributions, Coca-Cola disclosed it had spent almost $120 million to fund scientific research and health and fitness programs in the U.S. since 2010.

"On Nov. 6, the University of Colorado said it was returning a $1 million donation from the company because of the distraction it was creating."

Published on: December 1, 2015

Good piece in The New Yorker about the energy drink business, in which companies use male-centric, testosterone-fueled marketing to expand their appeal.

The strategy, the story says, "has worked. Over the past two decades, as U.S. soft-drink consumption has declined—full-calorie-soda sales dropped twenty-five per cent during that period, according to a recent Times report—the energy-drink market has been thriving. The beverages are consumed regularly by thirty-one per cent of kids between the ages of twelve and seventeen, and by thirty-four per cent of those aged eighteen to twenty-four. U.S. sales for energy drinks and shots now total more than twelve and a half billion dollars—a number that the market-research firm Packaged Facts predicts will grow by another nine billion dollars by 2017."

However, a new study "suggests that appeals by energy-drink companies to the thrill-thirsty male id are coming at a psychological and physical cost, however. The researchers sought to trace a cascade effect leading from beliefs about manliness and the efficacy of energy drinks, to the consumption of those beverages, to potentially harmful sleep disturbance. They found that the more a man bought into masculine ideals, the more he believed that energy drinks made him manly—and the more he drank them, the more his sleep was troubled ... While the connection between unrealistic standards of beauty and low self-esteem, body dissatisfaction, and disordered eating among girls and women has been widely researched and discussed, this study is one of the few to establish a link between marketing to male insecurity and unhealthy habits.

Fascinating analysis, and you can read it in its entirety here.

Published on: December 1, 2015

The Chicagoist reports that it now is possible to order Dunkin' Donuts online and have them delivered in the Windy City.

The story says that "DoorDash, the delivery service, is now working with Dunkin Donuts ... that Bavarian Creme can be yours for $1.30. With the delivery fee and tax, you'll be paying upwards of $6 for that donut, but if you're desperate (or ordering more than one), it's worth it. They deliver between 7 a.m. and 10 p.m."

And, "just in case you're interested in a tonier donut, Beavers and Glazed and Infused also deliver through DoorDash.

Published on: December 1, 2015

• The Associated Press reports that "New York City begins a new era in nutritional warnings this week, when chain restaurants will have to start putting a special symbol on highly salty dishes ... It will require a salt-shaker emblem on some sandwiches, salads and other menu items that top the recommended daily limit of 2,300 milligrams — about a teaspoon — of sodium."

The story notes that "the average American consumes about 3,400 mg of salt per day, and public health advocates have cheered the measure as a smart step to make diners aware of how much sodium they're ordering."

Salt manufacturers, of course, say the initiative is misguided, and restaurants say it is a "cumbersome" regulation that unfairly singles out one ingredient and makes it harder for them to do business.

Published on: December 1, 2015

• The Produce Marketing Association (PMA) announced this morning that it will begin its long-planned leadership transition next month, as the organization's president, Cathy Burns, takes over the oversight of day-to-day operations from longtime CEO Bryan Silbermann. Then, on January 1, 2017, Burns will become CEO, with Silbermann's retirement taking effect on January 31, 2017.

In an internal memo, Silbermann said that "during the course of 2016, I will focus my attention on specific areas that Cathy and I have identified to best use my experience and interests in ways to help PMA and its members continue to grow. In addition to the ongoing advice and counsel I’ll provide Cathy and staff as needed, my focus will include: Representing PMA at the association’s worldwide events ... Working with Center for Produce Safety Executive Director Bonnie Fernandez-Fenaroli to firmly establish its new governance processes and complete fundraising for the Campaign for Produce Safety ... (and) working on collaborative initiatives with United Fresh Produce Association and others."

Burns will spend 2016 focused on "leading the organization’s performance against benchmarks outlined in PMA’s strategic plan 2.0 ... (and) "leading PMA’s long-term growth and staff development to ensure the association continues to provide year-round, personalized value to members and industry."

Published on: December 1, 2015

The New York Times reports that two advocacy groups - the Campaign for a Commercial-Free Childhood and the Center for Digital Democracy - have filed complaints with the federal Trade Commission (FTC), charging that "online video aimed at children is too commercialized and is not held to the same standards that apply to cable and broadcast television. The complaints call for an investigation of food marketers, video programmers and Google, which owns YouTube, as well as for a broad examination of advertising of such food to children online."

The complaints, if they gain traction, "could increase pressure on federal officials to intervene in the fast-growing online video market." But perhaps more importantly, the complaints expand on those made to the FTC last April, which asked the FTC "to examine the advertising practices of food companies ... citing new evidence of junk food ads on the app. In the new complaint, the groups argue that more than a dozen food companies have fallen short of their own promises to abstain from marketing junk food to children on YouTube Kids. The groups say that brands like Burger King, Coca-Cola, ConAgra Foods and American Licorice have commercials on the app for products including potato chips and chocolate bars."

Published on: December 1, 2015

Got several emails from readers who wanted to talk about the news that Brookshires no longer is for sale.

MNB user Rich Heiland wrote:

I was glad, like you, to see Brookshires remain on its own. I have noticed it tends to dominate down here in more rural areas, but in some of those it is feeling a pinch. In our town - north of Houston - Kroger just this week opened a Country Market and you would think it was a run-up to the second coming. We never have had that sort of selection and diversity in groceries. That store is out on the freeway.

However, about four blocks from our Brookshires, HEB bought an old shopping center, is tearing it down and will put in a store to compete with the Kroger Country Market. So Brookshires will be sitting as a "traditional" smaller town grocery between two upscale and diverse markets. It is going to be interesting to see what happens and how the store responds. I don't know if this competitive situation is unique for the company or not.

From MNB reader Bob Overstreet:

I hope the story is true.  In 2005, Larry Johnston of Albertsons made the same announcement during a "townhall" meeting of all the Home Office staff right before Christmas.  After weeks of uncertainty and fear, he announced the company was not for sale.  Two weeks later he announced we were for sale again and he sold Albertsons to Supervalu and took an approximate 115M tax free parachute.  I worked there at the time and the relief was amazing and then the gut punch.  

BTW the  Albertsons stores are great again.  Well stocked with great engaged employees.  Took 9 plus years after LJ, but its back to what Joe created.

I feel your pain. I used to work for a publishing company that seemed to exist in a state of mild panic about the future - this was just at the beginning of the internet revolution (I was, I think, the only writer with both a laptop and an internet connection - dial-up - in my office.) There were always rumors about being sold, and the panic usually escalated from mild to abject whenever one of the bosses would call a meeting and say that "the worst is over," and that there would be no more layoffs. These bosses had no credibility, and this usually was when the copy machines started humming as people updated and printed out their resumes.

MNB reader Tom Murphy chimed in:

Having served on a public Board of Directors in the past, I have to wonder what trigger events caused them to: 1) look for a buyer and 2) back away from a sale?  The former is likely driven by a performance trend that did not portend future stability of financial assets…or, the owners could simply have been concerned with succession.  The question #2 is probably easier to figure out…they simply didn’t find what they wanted, translated as “not getting a high enough offer”.  So the question is, does Brookshire, for some inexplicable reason, now have a sustainable business model that they didn’t before?




We've also been getting emails about the shift to online shopping over the weekend.

One MNB user wrote:

I am thinking after paris..security may be big emerging factor in online shopping increase.. not just convenient.. but much safer!

From MNB reader Lisa Bosshard:

Kevin, something interesting happened over the past few weeks while grocery shopping – I haven’t been able to find the brand and type of tea I purchase every week looking in 3 different stores.  That led me to a desperate move and I brand switched.  The interesting part is what happened next and subsequent communication with the company.

Allow me to digress, I have a Keurig brewing system and love fresh brewed tea.  I’ve been a loyal Lipton fan for years and occasionally try something new if Lipton is out.  As I’m having such a hard time finding it on shelf, I decided to try their competitor – Luzianne.  Both are black, unsweetened classic teas.  However, when I attempted to make a cup of Luzianne, the Keurig told me the cup was not compatible.  I thought maybe it was a defective pod (happens occasionally), so I put another in to have the same error.  Then, thinking I made an error, pulled out the box to read, “compatible with Keurig brewing systems”.  It’s on the front of their printed packaging.  This led me to send a quick note to the company advising I was having an issue using their k-cup pods with my Keurig system ... My beef with this is, they know of the issue and their packaging is completely misleading.  While they are offering to send me new pods that will supposedly be compatible, or refund my money if I go through major hoops to return product to them, why are they selling something that is misleading to the public?  Huge missed opportunity to convert this tea drinker to their product.

In the spirit of no thanks, I went out to Amazon and ordered my Lipton from them.  Walmart, Kroger and Luzianne missed out on this one!  So my cyber Monday included grocery shopping – what a change!

From another reader:

Kevin, what i don't get about Black Friday. Reports say the brick and mortar stores sales are down at least 10%, with online up 14%. On the surface this sound good, but were talking percentages and not dollars, and were taking the 14% of a much much smaller base. Let's say the retailers have switched customers to online. A channel that is even more competitive than going to a brick and mortar location... If you go to a retailers and say the weather is bad or your tired and their just  a percentage or two difference then the cheaper guy, you might just buy it where you at and not hassle going to the other store. Online, you just look at site that tells you who's the cheapest and click and buy. Great for the customer, bigger margin / dollar loss for the retailers. Plus they never trade up if there is an out of stock, they never buy seasonal or impulse items either. It's going to be interesting to stop just looking at sales and percentages and keep an eye on PROFIT.

I think you make a couple of incorrect assumptions.

First of all, I often trade up - or over - when there is an out-of-stock. In fact, I find that Amazon is extraordinary when it comes to suggestive, relevant selling. Better than most, and as good as anybody in any realm or venue.

Second, I think it is in accurate to suggest that every online purchase is dictated by price. Many are, but not every purchase ... often convenience and selection are the determining factors. And I think fairly often, a lack of a compelling reason to go to a bricks-and-mortar store leads folks to shop online.

In the end, though, it doesn't really matter if online is less profitable than bricks-and-mortar (and it doesn't necessarily follow that it is). Clearly, it is what customers want ... and retailers cannot and will not shut off the e-commerce spigot.


MNB reader Jim Swoboda seems to agree with me:

As you said, it amazes me that any retail executive could be surprised by more of their shoppers doing it on-line.  It’s been coming since at least the advent of Amazon in the late 90’s.  Perhaps the inflection point has actually arrived and it will never, ever be as it was.  Imagine that.

Maybe the surprised executives can have coffee with the Blockbuster team.  I am sure they have nothing else to do.

Agreed.




And, the drone debate continues....

Yesterday, one MNB user email read, in part:

“This is absolutely hysterical … Drones are stupid at best...and will be used for spying at least!”

Which prompted another MNB user to write:

When I read this response, I pictured someone in the early 20th century commenting about how the loud, obnoxious, dangerous, horse-less carriages would never catch on and posed a huge danger to society.

I’m with you.  Drones are coming.  If you hear of any up-and-coming companies specializing in home, roof-top, drone landing pads and dumbwaiters to complete the delivery to your table, let us know.  I want to invest!

But another MNB user disagreed:

I just don't ever see this working.  Personally, if I see a drone hovering over my property, I will assume it is either equipped with a weapon or cameras, and I will shoot it down with my 20 gauge. (Perhaps I've watched too much TV.) I still feel these things are an invasion of privacy.  I'll be watching how this progresses closely, especially with stories of children losing eyes, thoroughbred horses dying from being spooked, etc.  There are just too many things to go wrong.

Maybe it is just me, but I'm more frightened of you and your 20-gauge than I am of Amazon using drones to deliver products.

And, from another reader:

Drone delivery is a very bad idea and hard to deny it will take away thousands of blue-collar and middle class jobs. I suppose until one of these drones cause someone to actually die (apparently the boy losing an eye wasn’t enough) this “enabling” service will continue to gain momentum.

First of all, that kid did not lose an eye because of a commercial delivery drone. It was somebody screwing around with a drone on his own ... it is the same sort of scenario as when people shoot off fireworks in their backyards and people end up losing fingers. Stupid people do stupid stuff ... but that's not a good reason to inhibit progress and not adapt new technologies.

With all due respect ... your argument about how how drones will cause the loss of jobs strikes me as specious at best.

Technology and progress can, of course, lead to the elimination of jobs, businesses, and careers. Smart cultures, intelligent societies, and savvy people understand that, and adapt. They are defined by their ability to develop new skills, invent new jobs, identify new opportunities, and make the most of the moment, not the least. They embrace the opportunity, rather than bemoaning the loss of the good old days.

Drones will continue to gain momentum because that is the very definition of progress.

There is, of course, a movie reference - Other People's Money, which posed the question, does it make sense to make the best buggy whip for a world where nobody needs buggy whips?

Published on: December 1, 2015

In Monday Night Football, the Baltimore Ravens defeated the Cleveland Browns 33-27.