business news in context, analysis with attitude

Published on: April 18, 2016

by Kevin Coupe

The CEO of the AMC Theater chain Adam Aron, learned the hard way the other day that while it is perfectly acceptable to entertain new approaches to consumer satisfaction, one has to be careful about how and when and where ... because social media provides a forum in which people who disagree with you can make their opinions known, loudly and clearly.

Last week, he gave an interview to Variety in which he said that, "in a bid to attract younger, smartphone savvy consumers ... he was open to making some theaters texting and mobile device-friendly."

Here's what Aron said: "When you tell a 22-year-old to turn off the phone, don’t ruin the movie, they hear please cut off your left arm above the elbow. You can’t tell a 22-year-old to turn off their cellphone. That’s not how they live their life. At the same time, though, we’re going to have to figure out a way to do it that doesn’t disturb today’s audiences. There’s a reason there are ads up there saying turn off your phone, because today’s moviegoer doesn’t want somebody sitting next to them texting or having their phone on."

Asked if theaters could have special "texting" sections, he replied, "That’s one possibility. What may be more likely is we take specific auditoriums and make them more texting friendly."

The Chicago Tribune reports that no sooner had those comments been posted online than social media erupted - and not in a good way.

Here's the statement released by AMC: "In this age of social media, we get feedback from you almost instantaneously and as such, we are constantly listening. Accordingly, just as instantaneously, this is an idea that we have relegated to the cutting room floor. With your advice in hand, there will be NO TEXTING ALLOWED in any of the auditoriums at AMC Theatres. Not today, not tomorrow and not in the foreseeable future."

It was, to be sure, an Eye-Opener about doing business in 2016.

Published on: April 18, 2016

Ahold-owned Fresh Formats announced on Friday that it plans to open two new bfresh stores in the Boston area, confirming previous reports that it would open one in Somerville and saying that it also will open a store in the Brighton neighborhood. This would give bfresh three Boston-area stores.

At the same time, Fresh Formats said it will close a bfresh store it opened in suburban Fairfield, Connecticut, saying that it proved not to be suitable for the concept. That unit will close by the end of April.

bfresh also has identified a location in Philadelphia where it plans to open a store, though no timetable has been set.

You can read MNB's coverage of the original bfresh opening here.

Published on: April 18, 2016

Reuters reports that troubled Fairway Group Holdings "has reached a tentative deal with creditors to restructure its debt in bankruptcy ... The deal is likely to put the company into Chapter 11 proceedings by the end of May."

According to the story, "Lenders, led by Blackstone Group LP's credit arm GSO Capital Partners, would provide the company with a loan enabling it to continue operations while still in court, the report said. Specific terms of the deal, including the size of the financing and whether store lease contracts for underperforming stores will be kept, are still under discussion."

Reuters notes that Fairway has lost money in every quarter since it went public in 2013.

Published on: April 18, 2016

The Seattle Times reports that Amazon's Prime program, already having achieved considerable consumer penetration, is seeking new members by offering a more flexible and piecemeal entryway.

In addition to the standard $99 a year fee that offers members two-day shipping on qualified products as well as access to video and music streaming services, Amazon now is offering a video-only subscription for $9 a month, and an $11 per month option that gives them access to all Prime perks.

While the pricing for these new options is more expensive than the annual fee structure, Amazon clearly hopes that once users get a taste for Prime, they'll become full-fledged members as they are drawn into the company's ecosystem and become more regular and loyal shoppers.

The Times writes that "Prime membership has reached more than half of U.S. households and more than 70 percent of high-income households, according to analysts with Piper Jaffray ... Amazon hasn’t disclosed the number of Prime subscribers, except to say that it’s in the 'tens of millions'."

Published on: April 18, 2016

The Kalamazoo Gazette reports that Meijer CEO Hank Meijer told Western Michigan University's annual Food Marketing Conference that his company "has plans to build stores in Michigan's Upper Peninsula, Cleveland and Minneapolis in the next five years."

Meijer said that "there will be eight to 10 Meijer stores opening in the Cleveland-Akron area over the next four or five years," and while the company recently bought property in the Minneapolis area, there isn't as timetable for when it might open there.

As for Michigan Upper Peninsula, the story notes that Meijer said that the finally "getting to the U.P. where some of us have longed to be for a long time with a store opening next in Sault Ste. Marie." And the Gazette reports that "the current timeline calls for the Escanaba and Sault Ste. Marie stores to open 2017, and Marquette could open as early as 2018."

Published on: April 18, 2016

The Washington Post reports that "researchers at George Washington University have linked fast-food consumption to the presence of potentially harmful chemicals, a connection they argue could have 'great public health significance.' Specifically, the team found that people who eat fast food tend to have significantly higher levels of certain phthalates, which are commonly used in consumer products such as soap and makeup to make them less brittle but have been linked to a number of adverse health outcomes, including higher rates of infertility, especially among males."

The danger, the researchers believe, isn't necessarily a result of the food itself, but rather the process by which the food is prepared. The findings were published in Environmental Health Perspectives, a journal funded by the National Institutes of Health ... The reason people who eat fast food seem to have much higher levels of potentially harmful industrial chemicals is unclear. But it's easy enough to guess: the sheer amount of processing that goes into food served at quick-service restaurants. The more machinery, plastic, conveyor belts, and various forms of processing equipment that food touches, the more likely the food is to contain higher levels of phthalates. And fast food tends to touch a good deal more of these things than, say, the food one purchases at a local farmers market."

Published on: April 18, 2016

• The Chicago Business Journal reports that Amazon's Prime Now delivery service, which provides one-hour delivery for $7.99 per order, or two hour delivery for free, has added high end retailer/restaurant Eataly to its roster. According to the Journal, this "means more than 2,000 products at Eataly now will be available for one-hour delivery, including a range of fresh grocery and retail products, as well as beer, wine and spirits."


• Business Insider reports that "Amazon has explored buying an airport in western Germany ... a move that could further build out the retail giant's plan of operating its own fleet of delivery airplanes."

According to the story, "An airport in Germany could provide Amazon with an important hub from which it could boost its service across Europe. And it would mark the latest step in Amazon's efforts to build a full-fledged logistics and freight-transportation service that some industry observers speculate could eventually compete with third-party shippers like FedEx and UPS."

Published on: April 18, 2016

• The Los Angeles Times reports that Sport Chalet, the 50-unit sporting goods store with locations in California, Arizona and Nevada, and which has been in business since 1959, is closing all its stores and has stopped selling product on its website.

The story notes that "the chain has faced growing competition from online retailers, discounters and the likes of Target Corp., whose stores carry the kind of workout merchandise and sports equipment that might interest the casual enthusiast."

Published on: April 18, 2016

• Albertsons announced that the president of its Denver division, Susan Morris, has been appointed executive vice president of retail operations over the company’s east region. She succeeds Kelly Griffith, who announced earlier this month that he would be leaving the company.

Published on: April 18, 2016

Responding to our recent story about the JuiceBox app that is designed to give young people sexual information from medical professionals - deemed necessary in a country where only 22 states mandate sex education, and only 19 of those require that the information be scientifically accurate - one MNB user wrote:

Kevin, I loved your views on the JuiceBox App.  I think an objective information source is a great idea that should be a supplement to what we, as Parents, are to teach our Children.

What I really look forward to is a similarly-styled APP to raise awareness of the Constitution.  I sometimes wonder how many residents understand our Constitution.  For example, exactly how many ways can an Amendment be passed?  I’m not convinced most voters know that Amendments can get to a Vote by different means.   Similarly, how many of us know exactly how the primary process works, by political party, to achieve nomination before the general election?

Of course, these topics don’t have the curiosity element that sex does. But, if communication to young people is to be achieved, perhaps Apps like Juice Box (Constitution Box, Voter Box, etc) are a means to  ensure the correct balance between compelling, accurate, relevant and entertaining.

Excellent idea. The problem, of course, is that while science is science, there are differing views on the Constitution, ranging from people who believe that it needs to be taken literally in terms of original intent, to those who feel it is a living, breathing document that can be interpreted for a modern world. Getting these two often polarized factions to agree on anything ... well, I'm not sure there is an app for that.




Regarding the general unhealthiness of supermarket shopping carts, which are said to be often about as clean as public restrooms, MNB reader Chris Utz wrote:

Carts used to be stream cleaned a few times each year, when I worked in stores, perhaps that’s not enough.  A brand new cart could get quickly contaminated, by whatever liquids leak from a package of chicken, a diaper, or other unsavory items were placed in the kid-seat portion of a cart.

That being said, maybe our exposure to grocery cart microbes makes us stronger.  After all, if you look at what dogs eat and drink; they seem to get by just fine.   If aliens were ever to attack us, as in War of the Worlds, perhaps our best defense would be to offer them a grocery cart.

I love this idea.




On another subject, MNB user Gil Harmon wrote:

Given the article on the state & future of the meal kit business, I am going to predict a bold new trend to emerge as result of this bubble:  meal kits sold in small urban brick and mortars…  I know, I know everybody is moving to online, but think about it.  Grocery Stores are trying to figure out how to shrink into urban areas.  In the meantime, they build huge deli commissaries on the outskirts of city center.  Why don’t they just set up “meal ATM” retail shops in high populated urban areas?  Set them up across the street from train stops and people on their way home from work can look at the pictures of what is being offered and get great quality meals. You would have meals ready to be consumed, meals ready to be heated and meals ready to be cooked.

This combines the best of new startups like the Sprinkles cupcake ATM, Farmers Fridge, My Fit Foods, and Snap Kitchen.   A self-serve refrigerated conveyor belt vending machine (Oasis24seven.com) would allow a store to maximize capacity of its deli, meat, and bakery departments, reduce labor, reach new consumers in urban areas, and would be fresher than meal delivery.  As a consumer, I would still go to the larger format store but I would like to supplement my meals without having to go out to a restaurant for dinner.  I also don’t necessarily know what I want to eat three days from now,  which is why meal delivery is not an option for me.

FYI – I am not affiliated with any of the above mentioned companies, but I am fond of their concepts, all have merits but also their faults as well.




Responding to our story about the change in processes that Whole Foods is going through as it attempts to be come more centralized and efficient, MNB reader Kevin Lavin wrote:

What they really need is a change in their pompous attitude.

Another MNB reader seems to believe that Whole Foods is taking a wrong turn here:

It’s a WalMart mentality that just cuts as much as possible without actually building anything. It drives me crazy! How about spending on ways to help customers know how Whole Foods is really very different from other grocery stores. Yes, other grocery stores carry some of the same products, but there is no comparison to our quality standards. For example, even on Whole Foods conventional produce (not organic) there are whole lists of pesticides that are prohibited for use if the grower wants to sell their product to Whole Foods. Even on decorated cakes, those fun colors are completely vegetable-based and unbelievably expensive. You will never find a product with bleached or bromated flour in any product.

When I go on vacation and there is no Whole Foods, I can’t even buy muffins for my family, because in any other grocery store, the ingredients for every single product in the bakery department starts with bleached and bromated flour. The “organic” apples I bought were inedible, they were so mealy. Many 365 products are certified GMO-free and are all sourced to avoid GMOs. This is where Whole Foods needs to build growth – not by trying to compete with every Wegman, Kroger, and Harry – but by really emphasizing our differentiators.

By the way, note the use of the word "we" in that email ... because this is someone on the front lines at Whole Foods. (I'm not posting her name, even though she signed it, because I don't want her to get fired.)




Responding to a recent Michael Sansolo column, one MNB user wrote:

Michael Sansolo writes about a Fast Company article announcing the death of the cover letter.  I am currently in career transition and actively seeking a new job.  Although a cover letter is not required to apply for jobs on-line, nearly all applications include a place to upload an optional cover letter.  I have been advised that this is not actually optional, because companies are looking to see if the applicants take the time to write a clear, compelling cover letter.  A good story is required in all aspects of the hiring process, including the resume, cover letter, and introductory phone interview.

The purpose for the cover letter is still very much alive, although its utilization has been modernized.




And in the political realm, responding to our recent MNB story about how thousands of activists were asking Jeff Bezos to stop selling any Donald Trump merchandise because - they say - Trump is a misogynist and xenophobe, MNB reader Tom DeLuca wrote:

Go to Amazon and search “Feminist”.  No shortage of hate spewing off my monitor when I do.  I’m thinking of leveraging my long-standing Prime account to cast my vote that Amazon should stop selling Feminist subject matter too.  While I’m at it, I’ll demand they stop selling children’s books (because that’s offensive to me as a child of a broken home), books on botany because I’m a chronic hay fever sufferer and books on fishing because I don’t believe in the sport (which I am kidding about to illustrate the lunacy of UltraViolet Action).

Agreed. As I said the other say, this is silly. If you want to stop Trump from selling stuff, don't buy it. (This covers books, ties and political philosophy.)

MNB user Ron Rash chimed in:

This entire episode we read about daily where folks want to shut down opinions and speeches from people with which they disagree is reprehensible, and hopefully something Amazon (in this case) has the good sense to ignore.  And for the record I am not a Trump supporter.

The reaction could be for Trump supporters to demand that any products or books that support the petitioners also be banned at Amazon.

It’s a “nuclear” option that just does not sit well with Americans that believe in the first amendment and free speech.

We hear all sorts of political posturing from both major political camps that I, for one, would be happy to have go away since it hurts my ears… but in reality we need to protect its access to the public whether we like it or not.

Again, I agree.

From another reader:

Where do they get off with all this "hate" stuff?  Trump merely exhibits a realistic fear of criminals and terrorists.  Bernie Sanders, meanwhile, hysterically demonizes everyone and anyone in all segments of the financial industry and no one seems to notice.  Doesn't class-warfare traditionally connote "hatred"?

I need to point out here, in the interests of fairness, that you find Trump's attitudes to be "realistic," while Sanders' attitudes to be "hysterical." This is because you agree with one and not the other. I think it is accurate to suggest that there are folks who find Sanders' attitudes to be realistic, and Trump's to be hysterical.

Just sayin'. It is all a matter of perspective.

MNB user Bruce Wesbury wrote:

I have not stepped foot in a Starbucks nor purchased Ben & Jerry’s Ice Cream because of their liberal views. Boycotting a company is nothing new but redefining statements made by individuals seems to be the new norm of the Democratic party. There is nothing racist about building a wall, there is nothing xenophobic about slowing the flow of immigrants to be sure we keep the terrorists out. Violence at a Trump rally is not caused by Trump but disruptors that attend to do just that. The classic statement of “perpetuated a culture of violence against women” is laughable. Calling Rosie O’Donnell a fat pig is funny and Megan Kelly might have deserved some of the words thrown at her but I remember something I learned as a kid. “Sticks and stones can break my bones but names will never hurt me”.

The Liberals are always trying to put us in a box and to do that they use their own twisted logic.  They take our expressive statements and redefine it to fit their narrative, always in a negative way. I have learned this technique by reading the Washington Post for more than 20 years and it’s fitting Bezos owns it now. On a side note, The Street is owned by two screaming liberals, Jim Cramer and Martin Peretz, hardly voices of the center.

Really? Calling someone - even someone with whom you disagree vociferously - a "fat pig" is appropriate? And suggesting that a female reporter who asks legitimate questions in a political debate is doing so because she's menstruating is reasonable?

Just curious. Did you teach your children that? Were you taught that by your parents?

I do think it is interesting that you accuse liberals if trying to put you in a box ... and in doing so, I think, you try to do exactly the same thing to them.

Just goes to show you. One person's hate speech is another person's elegant repartee.




On the subject of Victoria's Secret decision to stop publishing print catalogs, MNB user John Rand wrote:

I cannot honestly say that I am personally impacted by L Brands decision to end the printing of Victoria Secret catalogs. But I do resist the idea that catalogs have no future purpose – however, it clearly depends on the catalog, the line of goods, and many of the same things that distinguish good stores from poor ones. Where the internet is short form, like a short story, catalogs, when well designed, are long form, like a series of novels.

I am a reasonably active gardener, for example. In February, when the days are short, dark and cold here in Massachusetts, I love to browse flower catalogs. My wife  and I plan landscaping projects for the coming spring and summer, flipping through pages that inform our decisions about location, sun exposure, soil types, water needs, blooming times. The catalog is simply a way better experience then a screen, no matter how large or small. I consider the catalog a giant seasonal circular. We BUY on line but we SHOP in the catalog. Good catalogs (and store shelves) will Inform.

Another example:  Another hobby of mine is woodworking. I love tools. I get tool catalogs that expose me to new tools, new ways of working, and, combined with good old fashioned magazines, show me projects and ideas I might never have tried to do on my own. Good catalogs  (and good retail) will Inspire.

And finally, there are catalogs that are just fascinating. One of my personal favorites is J Peterman. Each item is a brief story, a vignette, entertaining, beautifully written, to where I felt I simply had to buy something to make sure that I always received this fascinating piece of commercial literature. Good catalogs (and good retail) will Entertain.

I do not miss the Sears catalog, or the JC Penney catalog. I had no emotional connection to those. But there will always be a place for good catalogs. And good retail.

Point taken.
 



We reported the other day on a survey that ranked Wegmans, Public and Trader Joe's as the nation's three top supermarket chains, which prompted one MNB reader to write:

Full transparency here, I am a 29 year Kroger veteran that has nothing but praise for the company.  I continue to be amazed that Kroger does not fall into the top 5, with our national presence, our continued growth and success, coupled with our innovative approach to grocery retailing.  We are a very modest company, letting the customer shopping experience and our great associates tell our story.  One would have to consider how we might fare if all brands were combined?

I think you make an entirely legitimate point.




On the subject of c-store sales, which I think are still too dependent on tobacco, though the industry is moving aggressively into better fresh food and foodservice offerings, one MNB user Martin Carroll wrote:

I’d say the upgrades in fresh/foodservice you mention are working. The ready-to-go sections of my nearby Stop & Shop and Big-Y grocery stores look a lot like the newer Wawa stores. I think some folks previously hesitant to purchase food/bev from a c-store may be more inclined to do so as these similarities increase. The quality of the c-store offerings in terms of fresh/healthy options seems to be in harmony with overall societal awareness and trends which also move away from tobacco.




We've had two pieces recently about Price Chopper/Market 32, which led one MNB user to write:

It seems like every time Price Chopper announces a round of layoffs they announce a big long term project right after it.  Last time it was the new Market 32 concept.

The argument, I think, would be that this is a matter of aligning greater efficiency with bold moves designed to make the company more effective and relevant. Since I argue for this all the time, it would be damned inconsistent if I were to change my tune now. Of course, it must be said that what Price Chopper is doing is very, very hard ... but as they say in A League of Their Own, it is the hard that makes it worth doing.




Last week, in my FaceTime piece about the new Amazon Books in Seattle, I recounted this scene:

There was one old guy who clearly wanted to test the concept, and he asked if they had "Jonathan Livingston Seagull" in stock. They checked on their tablet computers and said they did not, but would be happy to order it for delivery to his home. And he sort of snorted and said, "How can you be a bookstore if you don't have 'Jonathan Livingston Seagull?'" (Which I thought was a sort of silly question since I don't think anyone has read "Jonathan Livingston Seagull" since 1978, and it clearly indicated he did not get the whole notion of synergy between a bricks-and-mortar retailer and an online store.)

However, MNB reader Tina Hoerauf saw it differently:

I hope the older gentleman who was looking for a copy of "Jonathan Livingston Seagull" walked out of the Amazon store and into the nearest used book store because if it is like mine in Neenah Wisconsin, he will no doubt FIND a copy of his beloved book along with other titles by Richard Bach as well.

You can sit in your living room/bedroom/bathroom/office and order books from Amazon at any time day or night.  This is true. But if you walk into you local, independently owned bookstore they will be able to help find what you are looking for or something similar.  You are not limited to only what Amazon is selling the most copies of at the moment.  And my guess is Jeff Bezos doesn't not need your $20 as much as that single mom who would dearly love ballet lessons for her daughter if only they could afford to do a little something extra while running a business that they love and that aids their community.

I don't blame Bezos for invading the brick and mortar world.  He's a businessman. But if communities want their downtown and small businesses (i.e. neighbors) to survive and thrive, they need to be smart about where they spend their dollars.

I'm going to say something here that probably can be construed as overly harsh, but that certainly is not my intention.

First, anyone who kids themselves that Amazon has any limitations in terms of what it sells is in denial. Like any bookstore, or any store for that matter, walls and square footage create boundaries and limitations ... so Amazon is only stocking the most popular books in its physical location. But it makes it very easy for anyone to buy any book it stocks in its virtual store and have it delivered to one's home or office in a couple of days. Which is, to be fair, what any bookstore can do ... but I can tell you, having had experience with both, that Amazon's processes are a lot smoother.

Just curious about one thing. Exactly how many copies have you sold of "Jonathan Livingston Seagull" in the last year? Get back to me on this.

Second, most consumers are simply not going to choose one bookstore over another because they want to help the owner of one pay for ballet lessons for her daughter. It'd be nice if that's how decisions were made, but it isn't.

I am not anti-store. I am pro-relevance. Now, relevance can be defined and communicated in lots of different ways. But I think that if you are going to fight the battle against Amazon, you have to do it in a way that matters to the shopper.