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: April 21, 2016

    This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.Hi, Kevin Coupe here and this is FaceTime with the Content Guy ... coming to you this week from the Starbucks Roastery & Tasting Room in Seattle, Washington. The company describes this 15,000 square foot facility as "dedicated to roasting, coffee education and increasing availability of the company’s small-lot Reserve coffees. Every Reserve coffee bean sold to customers will be roasted in the facility." It is, the company says, "the fulfillment of a decade-long dream – an homage to our relentless pursuit of coffee innovation that will create for our customers the most immersive, sensory demonstration of how we source, roast and craft the finest coffee from around the world."

    What it feels like, to steal a metaphor from Stew Leonard's, is kind of a Disneyland of coffee shops. Not only does it provide a wide range of drinks, many of them not available in its traditional stores, but it also offers tons of information about the coffee business in general, and Starbucks' approach to roasting beans in particular. It is totally immersive, with physical and virtual tours and lots to eat and drink. And there's nothing museum-like about it - it is fairly vibrating with activity. (I'm including some pictures for your viewing pleasure.)

    In this sense, it is exactly what a great food retail experience should be. Tons of unique and delicious product, presented in a compelling and differentiated atmosphere, and offering relevant information that helps to sell both the items on the shelves and the overall retail philosophy.

    (One quick note here. One thing the Starbucks Roastery also offers is a coed rest room - there is a bank of sinks open to everyone, and two lines of individual stalls with walls that run floor to ceiling. It takes some folks a moment to understand how it works, but then it becomes acceptable and even perfectly natural pretty quickly. No discussion about birth gender and/or gender identity here - we all just have to get along. It is a refreshingly mature approach to a subject that has created controversy around the country.)

    One can belly up to the bar, like I did, and order something called a Shakerato Bianco, which is a kind of espresso drink swerved with a shot of sweet cream, and then follow that with an Americano con Crema ... and I could have ordered a bunch more, but I was full.

    The reason I was full was another feature of the Roastery - Starbucks ha steamed up to include in the facility a Serious Pie, which is the pizza concept created by Tom Douglas, one of the best chefs and restaurateurs in Seattle. I've long felt that Serious Pie serves some of the best pizza around, and so to find it here was like walking through the gates of heaven.

    Before I went to the coffee bar, I ventured over the the Serious Pie corner of the building, sat down and ordered a pie with sweet fennel sausage, roasted peppers, and provolone. At first I was going to have some coffee, but I realized that they also were serving beer and wine, and since it was five o'clock somewhere, I had an Amnesia Crystal Red Ale, which was perfect.

    And I thought to myself, this is a place with pizza, beer, wine and coffee. All the major necessary food groups. Just roll me in a cot, and I'd never have to leave.

    Like I said. Just a slice of heaven in Seattle.

    That's what's on my mind this Thursday morning. As always, I want to know what is on your mind.

    KC's View:

    Published on: April 21, 2016

    by Kevin Coupe

    US Treasury Secretary Jacob J. Lew announced yesterday that after months of debater, discussion and public comment, a decision has been made to replace President Andrew Jackson on the $20 bill with Harriet Tubman, the former slave and abolitionist. This reversed the previous intention to put a woman on the face of the $10 bill, which would have replaced the portrait of Alexander Hamilton, the first Secretary of the Treasury in the George Washington administration.

    At the same time, Lew said, the $5 and $10 bills will be redesigned so that the backs of the bills will feature prominent American women such as Eleanor Roosevelt, Susan B. Anthony, Sojourner Truth, and Marian Anderson.

    The New York Times writes that "the final redesigns will be unveiled in 2020, the centennial of the 19th Amendment establishing women’s suffrage, and will not go into wide circulation until later in the decade, starting with the new $10 note. The unexpectedly ambitious proposals reflect Mr. Lew’s tortuous attempt to expedite the process and win over critics who have lodged conflicting demands."

    Much of the public criticism of the original plan focused on Jackson, who had a record, the Times notes, of "forcibly relocating Native Americans, supporting slavery and — despite his prominence on currency — opposing a national banking system and paper money."

    In addition, the enormous popularity of "Hamilton," a Broadway rap musical about one of the Founding Fathers, created a groundswell not to replace his portrait on the $10. (To be fair, NPR's Cokie Roberts yesterday wrote a column suggesting that Hamilton has his own problems - he was a philanderer and not even a very good money manager in his personal life.)

    I understand that this is all going to take as long as it will because redesigning and replacing money is a complicated effort, but I think that the Times gets it absolutely right when it describes this decision "may well have captured a historical moment for a multicultural, multiethnic and multiracial nation moving contentiously through the early years of a new century." Some will deride it as "political correctness," but I'm okay with that ... it is absolutely correct that women who have helped to shape this nation ought to be depicted on our currency. In fact, it is way overdue.

    (The Times story points out that it is at least possible that whoever replaces Barack Obama in the presidency next year will decide to veto these changes, but I cannot imagine that any politician would be so tone-deaf as to reverse a decision replacing female abolitionists and suffragists on our currency. Okay, I actually can imagine it. But it is unlikely.)

    I haven't seen "Hamilton," nor am I likely to anytime soon, considering it is sold out until sometime in 2030. (I'm only mildly exaggerating. But it probably is going to get worse, since "Hamilton" yesterday won the Pulitzer Prize.) But I'm absolutely tickled by the idea that a Broadway show has helped to influence one small corner of public policy. Sometimes culture reflects the real world, but sometimes it affects the real world ... and I'm one of those people who thinks that we as a nation don't spend nearly enough on the arts and culture. That may not change anytime soon considering the current political climate, because politics affects how we spend money. But at least culture is having some impact on the money we spend.

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

    Published on: April 21, 2016

    Re/code has an interesting story about something called "retail arbitrage - the practice of buying a product at one price from one retailer and reselling it on another shopping website for a profit."

    The practice has become more commonplace, the story says, with the explosion of e-commerce. Re/code tells the story of a woman who received a shipment from Sam's Club of a product that she bought on Amazon.

    "How did that happen? An online merchant had bought the detergent on for one price, and sold it to her through for several dollars more. This Amazon seller then had the detergent shipped directly from Sam’s Club..."

    The story notes that the practice "can be disappointing for loyal Amazon customers who trust that Amazon usually has the best price, or something close to it." The story notes that while the practice is not illegal, it is counter to Amazon's policies, though the retailer doesn't always know it has happened until it has been pointed out.

    And Re/code says that the practice "is the part of Amazon’s business that isn’t always clear to shoppers: Not everything sold on Amazon is coming from Amazon itself. In fact, 47 percent of the items sold on Amazon today are being sold by someone other than Amazon, and that percentage has been increasing each and every quarter.

    "This growth has mostly been a good thing for Amazon, because it allows Amazon to expand its product selection in important categories like apparel without taking on the risk of owning all that inventory itself. The company also takes a cut of sales anytime one of these sellers sells an item on its site.

    "Still, a sale that comes at the expense of customer trust is not a sale you would imagine Amazon wants. And neither do its customers."
    KC's View:
    I think I'd be a little put off if I bought a product from Amazon and it was shipped to me by Walmart or Sam's. But I reject the idea that it isn;t completely transparent on Amazon that many products are sold by third parties, and certainly there is complete price transparency, with Amazon even pointing out when products that it sells are available for a lower price from someone else on the site.

    Published on: April 21, 2016

    BJ's Wholesale Club said yesterday that it is giving its members a pick-up option at all of its 213 locations, allowing them to buy without actually wandering up and down the aisles.

    The announcement says that members can sign onto the retailer's website to reserve items, which then will be picked by an employee, placed in a shopping cart and left at the service desk. An email is sent to the member, who then can go into the store, pay for the items and take them home.

    Orders placed before 1 pm will be available for same-day pick-up.

    Bari Harlam, executive vice president of marketing and membership for BJ's, describes it as "total freedom of choice" combining "the at-home convenience of online shopping, including guaranteed product availability and our affordable pricing, without the wait for shipping and delivery."
    KC's View:
    I know they say that half a loaf is better than none, but this option just strikes me as half baked. I'm not sure why BJ's wouldn't allow members to pay for the items online and then have an employee take them out to the car when the member rolls up at a delivery depot ... except that maybe it seemed too hard.

    If you're gonna jump into the e-commerce pool, you have to actually jump in ... not just stick a toe in the water in a way that is so hesitant that it hardly creates a ripple.

    I could be wrong, but this strikes me as something less than total freedom of choice.

    Published on: April 21, 2016

    The New York Times reports that Amazon has won a $30 million, three-year contract with the New York City public schools that will result in it providing e-books to the nation's largest public school system.

    "Amazon won the right to sell digital textbooks and other content, though not hardware like Kindles, to New York schools through an internal marketplace site," the story says. "The school district has about 1.1 million pupils in more than 1,800 schools."

    The Times goes on: "The deal is a boost to Amazon as it seeks to establish itself as a player in education. Many technology firms have set their sights on the classroom, viewing it as ripe for modernization and an effective way to establish their brands with potentially lifelong buyers at a young age.

    "For New York, there may be savings in buying more digital books, as well as the prospect of saving storage space for printed texts. The education department said e-books purchased from Amazon through its marketplace site will be readable on a variety of devices include e-readers, tablets, smartphones and laptops."
    KC's View:
    If kids get used to the idea of reading e-books, whether on Kindle or iPads or whatever, it only is good for Amazon, which gets to expand its ecosystem.

    Published on: April 21, 2016

    New research from the NTT 2016 Global Threat Intelligence Report says that "cybercriminals have shifted their focus from traditional financial markets, to targeting the retail sector. Retail organisations experienced nearly three times as many cyberattacks as those in the finance sector which was top of the list of cyberattacks on organisations in the 2015 report. Cyberattacks on financial industry dropped significantly to fourteenth position."

    The report goes on to say that "the retail and financial sectors process large volumes of personal information and credit card data. Gaining access to these organisations enables cybercriminals to monetise sensitive data such as credit card details in the black market, which validates that cybercriminals are motivated by the rewards of financial crime."
    KC's View:

    Published on: April 21, 2016

    Internet Retailer has a story about how 75 percent of all online sales in the baby products category are taking place on three sites - Amazon, Walmart and Target.

    Amazon accounts for 43 percent of these sales, while Walmart has a 23 percent market share and Target has 18 percent.

    The story also notes that "e-commerce accounts for 20% of all sales in the $30 billion baby products market, far outstripping the 2% penetration for all consumer packaged goods, reports a new study from consumer research firm TABS Analytics."
    KC's View:

    Published on: April 21, 2016

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

    • The National Grocers Association (NGA) said yesterday that Tom Woodmansee, former president of the North Dakota Grocers Association, has been presented with the NGA Association Leadership Award "for his dedication and commitment to the independent supermarket industry."

    • At the same time, the Food Marketing Institute (FMI) presented Missouri Representative Dan Shaul (District 113), state director of the Missouri Grocers Association, with its annual Donald H. MacManus Award "for his extraordinary leadership in public affairs and his dedication to both industry and community relations."

    One of the things that FMI lauded Shaul for was the introduction of a bill - that eventually became state law - preventing any local municipality from banning any kind of shopping bag or establishing fines or fees for their use. When the bill finally became law - with an override of the governor's veto - it included an amendment that also prevented any local municipality from increasing their minimum wage over the state's. All of which I find interesting, and positions that I trust will guide him next time he is faced with a federal law superseding its own state laws.
    KC's View:

    Published on: April 21, 2016

    Yesterday, in a story about what I think is Sobeys' very smart hiring of former Food Lion president Beth Newlands Campbell as president of its Atlantic/Ontario business unit, I commented that she "comes from the Ron Hodge school of retailing, which has brought us such executives as Shelley Broader (now CEO of Chico's), Meg Ham (president of Food Lion), Cathy Burns (COO of the Produce Marketing Association), Stephen Smith (CEO of LL Bean) and Steve Campbell (president/founder of the Pro-voke agency)."

    I left out at least a couple of folks - like Mike Vail, currently the president of Hannaford, and Rick Anicetti, currently the president of The Fresh Market, - who come out of that Hannaford tradition.

    This was pointed out to me by several MNB readers, some of whom also noted that it wasn't just Ron Hodge who created this tradition, but also Hugh Farrington and Jim Moody.

    Let me offer the perspective of MNB reader John Rand:

    I note your comments on the Ron Hodge “school of retailing” which has brought a number of truly excellent executives to the top of the industry in various place.

    I can’t argue at all. But I will say Ron Hodge, like almost all really good executive leaders,  came out of a tradition and experience laid down by others before him. Before Ron there was James Moody and Hugh Farrington, a team of great vision and impeccable integrity, who led  Hannaford to become one of the great, smart regional operators in the country. I was proud to be associated with them for a while.  The list of accomplishments was long – Hannaford understood EDLP before Walmart, understood the power of data before the PC, understood integrated logistics when the Federal highway system was barely built.

    But most of all Hannaford was a culture of retailing and retailers. People were mentored, people were empowered, and people who could do the job were respected and recognized.

    I don’t think that becoming part of Delhaize was, in the end, good for that unique northern New England retailing culture back in Maine, but it sure gave opportunities to a lot of executives. I do not know what the fate of Hannaford will be as Delhaize and Ahold combine.

    But I will always be proud of my time at Hannaford , and in the 25 years since I left Maine and made the enormous journey all the way to Massachusetts (!!)  Hannaford has always been a credential of respect.

    Thanks for elaborating and explaining ... and I apologize for missing some of the great people who came out of this company.
    KC's View:

    Published on: April 21, 2016

    ...will return.
    KC's View: