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    Published on: April 13, 2016

    by Kate McMahon

    Today’s topic is the “emolabel” and evidence that a simple smiley face can be an effective weapon in the fight against the childhood obesity epidemic.

    A recent study in the journal Appetite found that even young children were more likely to make healthy food choices when grocery shelves were labeled with emojis indicating a happy face equals healthy and sad means not healthy.

    The study was led by Dr. Greg Privitera, research chair at the Center for Behavioral Health Research for the University of Phoenix School of Advanced Studies. Noting that childhood obesity rates have doubled since 1980, he challenged the industry assumption that there was no need to provide nutritional labeling for children since they lacked basic health literacy.

    “Children are wonderfully brilliant at emotion,” he said, and “emolabeling” is an effective teaching tool.

    In the study, the children - who ranged from kindergarten-age through grade 5 - were given a lesson on how to interpret the emojis and then sent “grocery shopping.” In one aisle, the 12 foods were emolabeled with smiley faces on healthy fruits and vegetables versus frowns on high calorie options such as chips and cookies. The other aisle was identical, minus the colorful labels.

    Said Privitera: “The key takeaway from this study was the incredible effect the emolabels had on food choice. Children were 83% more likely to choose at least one additional healthy food with the emolabels compared to the same foods without the emolabels.”

    A recent similar study by the American Academy of Pediatrics found that kids at an inner-city school in Cincinnati made better nutritional choices after green smiley face emojis were employed in the cafeteria. They bought less chocolate milk and more plain nonfat milk and fruit, and average vegetable purchases in the school’s cafeteria rose by 62 percent.

    As recently noted on MNB, the Guiding Stars nutritional guidance program just celebrated its 10th birthday. Currently in more than 1,500 U.S. and Canadian supermarkets, Guiding Stars rates good, best and better-for-you foods with one, two and three stars, based on a publicly available algorithm.

    These approaches may sound simple, but they work. Any effort to make nutritional choices easier to understand is valuable – whether you are a nine-year-old in a school cafeteria or a small-print challenged 59-year-old (that would be me) attempting to read a microscopic label in the supermarket.

    Obviously, manufacturers and retailers will not be slapping sad-face emoji stickers on foods laden with lots of salt, fat, sugar and unhealthy calories. Privitera notes that future studies are needed to evaluate the utility of using “health categories” as opposed to healthy versus unhealthy to determine how emolabels should be used for all food types.

    Not surprisingly, an independent study found that the Guiding Stars’ influence boosted sales of products that are rated more nutritious and the expense of those that are not.

    I think consumers are going to increasingly demand both more transparency and greater accessibility in nutritional labeling, whether it is through stars, emojis or the next new thing, and the manufacturers and retailers that deliver it will come out ahead.

    Comments? As always, send them to me at kate@morningnewsbeat.com .
    KC's View:

    Published on: April 13, 2016

    by Kevin Coupe

    The Cincinnati Business Courier has a story saying that the Wolverine himself, Hugh Jackman, stopped by Kroger headquarters in Cincinnati to pitch them on carrying his Laughing Man Coffee & Tea in its various banners.

    The story notes that "Jackman created Laughing Man after he met a young Ethiopian coffee farmer named Dukale while he was working on a documentary for humanitarian group World Vision. The free-trade organization is designed to donate all of its earnings from coffee and tea to a foundation that helps farmers and their families."

    While there are two Laughing Man cafes in New York City, and a deal has been signed to put the product in Keurig's K-Cups, "a deal with Kroger would give it a big break as it would appear in more than 1,800 stores across the country," the story says.

    So, considering Jackman's film celebrity, one has to figure that this may have been a more heavily staffed get-together at Kroger than might be typical for a buying meeting.

    And considering Jackman's popular film persona as Wolverine, the muscular and sometimes cranky mutant superhero with retractable claws, one has to wonder who exactly would tell him "no."

    I'm guessing Laughing Man Coffee & Tea will be in every Kroger store by summer. And it'll be an Eye-Opener. Literally.
    KC's View:

    Published on: April 13, 2016

    Reuters reports that Walmart has decided to expand its free click-and-collect grocery service into eight new markets, including Austin, Kansas City, Boise, Richmond, and Charleston.

    The retailer that the expansion comes as it "gains confidence it can make the strategy work on a larger scale." It "includes adding stores in markets where it already has a presence," and "will increase the number of stores with the service by a third to about 200 and widen its footprint to 30 cities," says Michael Bender, chief operating officer of Wal-Mart's e-commerce operations.

    Bender tells Reuters, "The data we’ve collected gives us confidence that with existing customers we are getting a larger share of their wallet and that's complemented by new customers we are bringing into the fold. There will be more so stay tuned."

    The story notes that "by focusing on in-store pickup, Wal-Mart is aiming to capitalize on its network of stores, drawing a sharp contrast with Amazon.com, an online-only retailer which has struggled to find the right pricing model and is delivering groceries in a handful of cities for a fee."
    KC's View:
    I've been arguing for a long time that Walmart needs to ramp this up wide and fast if it wants to successfully differentiate itself from Amazon, which continues to work these aisles in its own way. I'd suggest that Walmart should be expanding it to 80 new markets, not eight.

    Published on: April 13, 2016

    Market Force Information is out with its annual grocery industry study, polling more than 10,000 consumers across the country to rank the nation's favorite grocery stores.

    This year, for the first time in four years, Trader Joe's did not rank number one, and was supplanted in that position by Wegmans. Publix ranked second, followed by Trader Joe's, Hy-Vee, and Aldi.

    The study also revealed that "Aldi was the price leader, followed by WinCo and Costco," and "Publix led in fast checkouts, cleanliness and item availability." Almost half of customers polled preferred to buy organic products, 27 percent are buying prepared foods at least weekly, and almost eight out of ten "plan their grocery shopping based on the deals in the weekly circular."

    And, the study said, "Despite the rise in alternative shopping and delivery methods, 99% still do their grocery shopping traditionally – a trip to the store to buy and bring home products. In the past 90 days, just 5% ordered online for home delivery, 2% ordered online and picked up groceries in-store, and 2% used 'Click and Collect' – ordering online and collecting through the grocer’s drive-up."

    One important note: "Of the 4% who have ever tried Click and Collect, 73% were satisfied with the experience and nearly half are repeat users."
    KC's View:
    Y'think the Wegmans folks ever get tired of being ranked at the top of pretty much every relevant retailing list? Y'think they ever worry about resting on their laurels and breathing their own exhaust to the extent that they take their foot off the gas pedal a bit? (Man, am I mixing my metaphors here!) I doubt it ... but in so many ways I think complacency has to be Wegmans' biggest potential problem.

    I also think that companies not in the e-commerce business should avoid any level of complacency about the low numbers cited in this study. All they tell us is how much growth there is in this segment, and they, in fact, should be very worried about it. They can be part of that growth, or they can be left behind.

    Their choice.

    Published on: April 13, 2016

    Publishers Daily reports that the Meredith Parents Network is partnering with "What's Up Moms," a YouTube channel about parenting, "to create and distribute lifestyle content to their millennial mom audiences."

    The goal is to create "a new original digital video series covering modern parenting topics in a humorous way; the series will go live on Parents.com, which reaches an audience of over 8 million ... 'What’s Up Moms' has more than 1 million subscribers and over 35 million views per month, thanks to its quirky how-to and short form comedic videos targeting young parents."
    KC's View:
    I thought this was interesting because it reflects a reality and opportunity - millennial parents are going to want and need 1) information about how to be more effective parents within the context of their lives and priorities, and 2) different delivery systems for that information that are relevant and appropriate to their lives. Believing that just because a millennial becomes a parent means that they will revert to their parents' lifestyles is, I think, a foolish approach to business.

    Published on: April 13, 2016

    The National Association of Convenience Stores (NACS) says that its industry "experienced record in-store sales in 2015, led by strong growth in foodservice products."

    The industry's US store count grew from 152,794 to 154,195, with total annual sales dropping 17.4 percent from $696.1 billion to $574.8 billion, largely due to an extended period of low fuel prices. In-store sales grew from $213.5 billion to $225.8 billion.

    The data is part of a State of the Industry report being prepared for the upcoming NACS convention.

    Foodservice - which in the c-store industry is defined as "prepared and commissary food; hot, cold and dispensed beverages" - represents the second largest segment for the industry, at 20.8 percent. Tobacco - which is a declining category overall have been successfully demonized by society at large - still is the largest category, at 35.9 percent.
    KC's View:
    Successfully demonized. And, I would add, appropriately.

    Though I must admit that I'd be concerned if the largest part of my business were such a segment. Which explains why so many c-stores are working so hard to improve their expertise in the fresh foods and foodservice part of the business.

    Published on: April 13, 2016

    Reuters reports that Walmart said yesterday that it is "partnering with ChannelAdvisor Corp , a software company that aggregates retailers and brands for online marketplaces, in an effort to expand the number of products on its website. The deal should make it easier for the thousands of retailers and vendors that are working with ChannelAdvisor to get their products on Wal-Mart's website. Wal-Mart has made expanding its online assortment, currently at about 9 million items, a priority for its online business this year.

    The goal, clearly, is to get in the game with Amazon's Marketplace ... which reportedly has more than 200 million products from third-part vendors for sale."
    KC's View:
    Amazon has an enormous and highly profitable head start, but Walmart has no choice but to try to catch up.

    Published on: April 13, 2016

    Golub Corp.-owned Price Chopper and its new Market 32 banner announced a new private label line, called PICS by Price Chopper, designed to be high quality/premium value. The new PICS products will gradually replace nearly 2,000 Price Chopper own-brand products, a rollout process expected to take two years.

    The story notes that "with transitional plans in place to ensure compliance with the new GMO labeling law in the state of Vermont, all PICS labels to be distributed throughout Price Chopper and Market 32’s six state footprint will include confirmation of genetically engineered ingredients, if applicable."
    KC's View:

    Published on: April 13, 2016

    The New York Times this morning reports that in 2015, for the first time in two decades, the global acreage dedicated to genetically modified crops declined for the first time.

    A nonprofit organization called the International Service for the Acquisition of Agri-Biotech Applications said that "the main cause for the decline, which measured 1 percent from 2014 levels, was low commodity prices, which led farmers to plant less corn, soybeans and canola of all types, both genetically engineered and nonengineered."

    However, saturation may also be an issue.

    The Times writes that "only three countries — the United States, Brazil and Argentina — account for more than three-quarters of the total global acreage. And only four crops — corn, soybeans, cotton and canola — account for the majority of biotechnology use in agriculture. In many cases, more than 90 percent of those four crops grown in those three countries, and in other large growers like Canada, India and China, is already genetically modified, leaving little room for expansion.

    "Efforts to expand use of biotechnology to other crops and to other countries have been hindered by opposition from consumer and environmental groups, regulatory hurdles and in some cases scientific obstacles."
    KC's View:

    Published on: April 13, 2016

    The New York Times says this morning that Tesco seems to have stabilized its UK retailing business with a "fourth-quarter British volume growth of 3.3 percent and a 2.8 percent rise in customer transactions ... Sales at British stores open over a year rose 0.9 percent in the final quarter of Tesco’s financial year, which concluded on Feb. 27, building on growth over its six-week Christmas sales period. Tesco also reported a full-year operating profit before one-off items of 944 million pounds, or about $1.3 billion, ahead of analysts’ expectations of £932 million and the £940 million it made in 2014-15."

    However, Tesco also warned that a price war in the UK - driven by the aggressive discounting by chains such as Aldi and Lidl and responses by the country;'s mainstream grocers - likely meant that "profit growth would be hard to deliver this year."
    KC's View:

    Published on: April 13, 2016

    • Loblaw Companies announced this week that it plans to "invest approximately $1 billion into its Canadian retail business in 2016," which will be used largely "for approximately 50 new stores and 150 renovations to existing stores, increased e-commerce expansion, and IT infrastructure and supply chain projects."

    The company said that the investment "is expected to create nearly 20,000 jobs through store staffing and construction."


    • Tesco announced that it has agreed to sell an 8.6 percent equity stake in Lazada Group, an e-commerce platform in Southeast Asia, to China's Alibaba Group Holding for $129 million (US). The sale will leave Tesco with an 8.3 percent stake in Lazada, and is part of Tesco's ongoing efforts to trim back non-essential holdings and invest proceeds in its core businesses.
    KC's View:

    Published on: April 13, 2016

    ...will return.
    KC's View: