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    Published on: June 13, 2016

    by Kevin Coupe

    I was in Orlando over the weekend, speaking at the GMDC meetings taking place there. I was nowhere near the senseless massacre that took place early Sunday morning, though I obviously became aware of it as the news came through on my iPhone in the early morning hours.

    I drove to the airport yesterday morning, listening to the news coverage on the radio. Traffic was light, the sun was bright, and if not for the troubling facts being related by somber newscasters, it would've been just another Sunday morning in city that is home to the so-called happiest place on earth.

    Then, as I made my way through the airport and security, watching the families who were arriving and departing, I could not help but wonder about the hate that some people feel. The small children who had just spent a magical (and likely extraordinarily expensive) vacation in Orlando, or were about to, were not born with hate in their hearts and minds.

    The toxicity in our culture, and its easy spread through social media, infects both adults and children. I have no idea how we fight it, or at least stanch it, and spread the notion that love and tolerance are a far better way to live one's life, though it seems obvious that the effort will take generations, not months or years.

    I found myself looking around the Orlando airport yesterday, and wondering what kind of world we're creating for these children, these little ones who at the moment were absorbed by thoughts of mouse ears and wizards and dreams of a fantasy world in which everyone gets along and all are equal.

    Then I got on the plane, went home, and hugged my wife and kids.

    I wish I'd had an Eye-Opening moment. But I didn't. I just felt the need to share.
    KC's View:

    Published on: June 13, 2016

    The BBC reports that Walmart Canada has said it will no longer accept Visa cards, saying that fees attached to their use remained "unacceptably high" after negotiations with the credit card company broke down.

    The new policy goes into effect on July 18.

    Walmart Canada said that the move was consistent with its broader approach of "taking care of our customers' best interests and delivering on our promise of saving customers money."

    Not surprisingly, Visa disagreed, and "accused Walmart of putting its own financial interests ahead of its customers," according to the story. A spokesperson said that "Walmart made this business decision despite Visa offering one of the lowest rates available to any merchant in the country."
    KC's View:
    I actually think ... and longtime MNB readers will be shocked by this ... that Visa is absolutely correct - Walmart did do this in the name of its own financial interests.

    Of course, Walmart would argue - and I'd agree - that standing up for consumers by pushing for lower card fees is very much in its own financial interests, and that's a good thing for shoppers.

    This sort of move may inconvenience some folks in the short term, but it is the kind of inconvenience that sends a very good long-term message to shoppers. Walmart should frame this as "we're with you against them" as it communicates this message to shoppers, and should point out that lower card fees can translate to lower prices.

    Then, of course, it has to deliver on that promise once Visa agrees to lower fees ... as it inevitably will, because it has to.

    Published on: June 13, 2016

    There is thought-provoking column in the Washington Post about why, when it comes to retirement, it isn't good news that "70 is the new 60."

    Essentially, what it comes down to is that almost 25 percent of American workers expect to have to stay in the workforce until they are 70 or older, mostly because the economy has not fully recovered from the so-called Great Recession of almost a decade ago. These expectations can be traced back to the fact that many corporate safety nets collapsed as the economy did, along with retirement plans and pensions; many Americans simply are not financially prepared for retirement, which means they are going to have to stay in the workforce longer.

    When reading the story, it is worth considering it within the context of what it will do to the retail economy. If so many baby boomers are going to be living with reduced means, they're going to have even less money to spend as they age than they might have expected. This, in turn will create job pressures for some younger Americans, who will be looking for jobs that older folks won;t want to give up.

    (Then of course, there are some of us who won't want to retire because we're having too much fun working ... but that's probably a subset that won;t impact the economy all that much.)

    Less money to spend means that value-driven retailers - think Walmart and Aldi and Lidl and WinCo, for example - may have a real competitive advantage over the next few years. It won't be the only approach that will work in, say, 2020 and beyond ... but it certainly could be a powerful one.

    Check out the story here.
    KC's View:

    Published on: June 13, 2016

    The University of Florida Institute of Food and Agricultural Sciences is out with a study suggesting that nutrition labels on raw fish packaging may make people - especially parents - more likely to buy such products, which are seen as a good source of nutrients and a promoter of cardiovascular health.

    According to a story in the Santa Rosa Press Gazette, the study was conducted because, while raw meat and poultry product packaging is required by law to carry nutrition information, raw fish is not. And so, "researchers focused on three types of information: nutrition, health and a combination of nutrition and health. By putting the same nutrition label on raw seafood packages as consumers can find on raw packages of meat, consumers are more willing to buy the raw seafood, the study found."

    Among the questions posed in a survey was why consumers "choose seafood for a family meal. Eighty percent cited taste as the most important reason, followed by nutrition, variety, price, fat content, calories and preparation time." The relatively high ranking of nutrition as a factor, the researchers point out, indicates that labeling could actually drive consumption ... which is seen as important since "per-capita consumption of seafood in the United States is about 4.8 ounces per week, which is below the minimum recommendation of 7 ounces per week by the heart association."
    KC's View:
    It is, I think, a pretty good rule of thumb that nutrition labeling is good when placed on foods that are good for you, and not so good for foods that may not be so good. It isn't a big leap to believe that companies producing good-for-you foods will be far more embracing of nutrition labels, and that the companies fighting them are making products that are not so good for one's health.

    Published on: June 13, 2016

    The Seattle Times reports that Amazon is said to be "planning a paid music streaming service that would duke it out with Spotify and Apple Music," with initial indications that it will launch in late summer and cost $10 per month.

    According to the story, "Amazon already has a music streaming service available at no extra cost to members of its $99 per year Prime loyalty program. But Amazon is well known for experimenting with all sorts of approaches to reaching new customers. In April,it launched a standalone video subscription, even though t Prime members already get the video service bundled in their basic package."
    KC's View:
    They have another word for these sorts of experiments.

    Bait.

    Published on: June 13, 2016

    Reuters reports that a new study by the University of California at Berkeley Center for Labor Research saying that Walmart "would have to spend an additional $4.95 billion if it were to raise the minimum wage for its hourly employees in the United States to $15 per hour from the current $10 per hour."

    The story says that "Wal-Mart employs nearly 1.5 million people in the United States. Of that, 1.1 million are hourly employees, according to the study. The study estimated that 979,000 employees would get an increase if Wal-Mart went to $15 per hour. The world's largest retailer raised wages for its hourly workers to $10 per hour earlier this year, but labor groups have called the raise inadequate."

    Walmart did not comment on the study, but Reuters does note that the retailer has pledged to invest "$2.7 billion over two years in training, education and higher wages."
    KC's View:

    Published on: June 13, 2016

    Bloomberg reports that Brazilian companies have stopped buying American grain "because they're concerned that Brazil's stringent regulations on genetically modified organisms, or GMOs, threaten to hold up shipments, according to people familiar with the situation." ironically, this move comes as Brazil's chicken industry faces "a surprise domestic shortage of corn with which to feed its birds," which under normal circumstances would make the importing of corn from the US a no-brainer.

    The situation could change, the story says, of the Brazilian poultry industry requests permission from the government to "import GMO crops that aren't currently permitted" under the nation's laws.

    Bloomberg goes on: "The uncertainties of importing modified crops in Brazil illustrate how the wide variation in GMO regulation around the world can sometimes disrupt international trade. In recent years, some of the largest commodity trading companies have refused to take certain GMO crops from farmers because the seeds used hadn't received a full array of global approvals, something that can lead to holdups at ports or even the rejection of entire cargoes."


    • This gets our nomination for most disgusting food-related headline of the weekend:

    Egg producers pledge to stop grinding newborn male chickens to death.

    Unfortunately, the Washington Post story that follows the headline isn't much more appetizing. An excerpt:

    "It's a disturbing practice most Americans probably know nothing about: On the day they're born, all the fluffy male chicks born to egg-laying hens at hatcheries are gruesomely killed - usually by being run, while conscious, through what is essentially a blender. That's because they're useless to the industry: They can't grow up to lay eggs, and they weren't bred to be the fast-growing chickens sold as meat."

    However, there is good news - that under pressure from animal welfare activists, "United Egg Producers - the industry group that represents hatcheries that produce 95 percent of all eggs produced in the United States - announced Thursday that it would end this 'culling' of millions of chicks by 2020, or as soon as it's 'economically feasible' and an alternative is 'commercially available'."

    Culling? That's what they call it? Yuck.

    The story notes that there has been a lot more attention paid to the cage-free egg issue, which has resulted in many US food retailers and restaurant chains pledging to shift to the use of eggs laid by chickens not confined in cages. But, the Post writes, "the Humane League, a relatively new group that's also played a big role in pressuring companies to switch to cage-free eggs, evidently also decided to drill down on the male culling."

    I'm wouldn't describe myself by any means as being an animal rights activist. I'm sympathetic, I try to do the right thing in terms of my consumption behavior, but it is not an issue at the top of my list. But I have to say that I'm really glad the Humane League pushed these issues ... these practices just seem randomly cruel.


    • The Wall Street Journal reports that "satisfaction with the current state of the U.S. economy hit an 11-year high in June, but Americans continued to lose confidence in the future. The University of Michigan said Friday that its closely watched index of U.S. consumer sentiment slipped to 94.3 in June from 94.7 in May."

    I always discount to some extent these kinds of studies during election years since, no matter who is in office, the other side benefits from talking about how awful things and how the country is going to hell in a hand basket. Not that the country isn't going to hell in a hand basket ... but 24-hour cable news networks are able to drive ratings by amplifying the concerns.'
    KC's View:

    Published on: June 13, 2016

    • Walmart has announced that it is making Sean Clarke, CEO of its Chinese business, the new CEO of its Asda Group in the UK, which has been suffering several years of declining sales because of the burgeoning business being done by discounters like Aldi and Lidl.

    Sean Clarke will take over from Andy Clarke - to whom he is not related - at Asda next month.

    The announcement is something of a surprise since it was just last week that Andy Clarke was quoted as saying that he would eventually be replaced by Roger Burnley - who hasn't even joined Asda yet as COO. Burnley was rival J. Sainsbury's director of retail and operations when he was named COO of Asda last October, but he won't begin at Asda for another four months.

    Reuters reports that "Wal-Mart International's president and chief executive David Cheesewright said Burnley would be deputy chief executive, and he viewed him as a 'top talent and future chief executive'."

    Sean Clarke's role in China will be absorbed for the time being by Dirk Van De Berghe, CEO of Wal-Mart Canada.
    KC's View:

    Published on: June 13, 2016

    Gordie Howe, the Hall of Fame hockey player who, according to one story, "scored 975 goals in 2,186 games for four teams in two leagues - during a professional career that spanned 32 seasons from 1946 to 1980," passed away Friday at age 88. The 23-time NHL All-Star - who accumulated 500 stitches just in his face over the course of his career - had been suffering from dementia since 2012, and had two strokes in 2014.
    KC's View:

    Published on: June 13, 2016

    Got the following email from MNB reader Janis Raye about our broader discussion of millennials and specifically The "Millennial Mind" column that Chelsea Ware contributed last week:

    I think Chelsea is missing the point, and like my own millennial-aged son, a bit too touchy about how he thinks the rest of us view his age cohort. As you have already pointed out, sometimes we want the social experience, and sometimes it’s quicker and easier to use a machine. This started a long time ago when answering machines were new, and we began to hope that the machine would pick up so we could just leave a message and go. Likewise, once we were accustomed to ATMs, we often found it faster and easier to use them rather than to —what was it -- cash a check at the teller window?

    Thirty years ago, I ate at an automated sushi restaurant in Tokyo, where the food came around the restaurant on a long conveyor belt. Sure, it wasn't gourmet, but it was kind of fun and was a quick lunch in the middle of a busy day. There’s a place for automation and robots in our world as another choice, and it’s not because anyone thinks millennials can’t be humans, too. (Although they’ll have to pry my cold, dead hands off my Roomba to get that particular robot away from me!)


    I had to look up what a "Roomba" is. Now I understand.

    On the same subject, from MNB reader Jesse Ehlen:

    This talk of robotic vending machines and the 'antisocial Millennials' who [supposedly] love them has me wondering...

    Were the Boomers labeled as antisocial and misanthropic when they quit going inside restaurants, favoring, instead, to not even get out of the car, but rather be handed a feed bag at a slow roll from an anonymous person standing inside a little window?


    Excellent point. BTW...Steve Jobs and Jeff Bezos would both be characterized as Baby Boomers, I think. (Bezos is on the edge. Jobs was right in the middle.)

    And, from MNB reader Philip Herr:

    When I first arrived in the USA – 1977 – I visited the last standing Horn and Hardart, which was on 42nd Street in Manhattan. The heyday of the automat was in the post war 1940s I believe.  And that pre-dated my (boomer) generation. This was the period of vast economic expansion driven by the “greatest” generation.  So “robotic” food is neither new nor confined to a younger generation. (Refuse to use the “M” word.)

    I would've thought that you'd been in the automat there during its final days ... but a quick Google check revealed that it actually closed in April 1991. I was shocked to see that; I worked in midtown Manhattan from 1980 until the early 90's, and I don't remember it being around that long ... but that may be more a function of how long it hung on after it became irrelevant.

    I'm old enough that I can remember being taken there by my grandmother and some aunts and uncles during the late fifties ... it was a busy place then, and a big deal to go there before being taken to Radio City Music Hall for a show and movie.




    On another subject, from an MNB reader:

    A bit off topic perhaps … I know that drones are making an impact in the market place, but I recently had one make an impact in my personal life.  Last weekend, several of us got together and made a short film for a 48-hour film contest.  We had 48 hours to write, produce, and edit a short film based on a genre, dialogue line, prop, and character name we were given.  One of our team members brought his drone, and we used it to shoot the opening and closing scenes.  We also used it as one of the characters.  When I first heard about drones, I thought they were interesting but not anything I’d ever be involved in.  Now I want one!  I think drones may have a bigger impact than a lot of people predict.

    Agreed.




    Regarding Netflix's growth, from MNB reader Terry Mullery:

    I don’t know if this is happening to anyone else, but lately, every time we go to use Netflix on a Saturday evening, we get content downloading issues, and have to attempt multiple times before we can load the content.  It does not happen at other times during the week.  It’s rather frustrating and it seems either Netflix or my provider Comcast has bandwidth issues on Saturday evening.  Wondering if anyone else is experiencing the same.  We are now starting to get most of this content now from Amazon Prime because Netflix is so frustrating.




    Regarding our ongoing discussion of the minimum wage, MNB reader Neil Reay wrote:

    The minimum wage only goes up every 8-10 years, but executives think that it is still a “livable wage.” What has happened to the CEO and C-level salaries over the same period of time? I guess a couple of million is not a “livable wage” for them, and they need to be incentivized more every year to show up every day for work. Maybe if executive salary increase were held to the same level as average wage/salary increases, they would think more about those on the lower end of the scale.




    Chiming in on our discussion of Kroger's management culture, MNB reader Larry Ishii wrote:

    I was with Fred Meyer Inc, when it was acquired by Kroger. Having had been through seven or eight consolidations already, I held my breath.
     
    For one year (1998/1999) I was in a position in my job on the West Coast to work closely with the Kroger grocery buying staff and found the company culture to be amazing. Kroger understood then that the companies (and people) they added through acquisition had value and were not to be simply ignored and/or “steam rollered”. Rather, they looked for what could be used in the entire company to bring more value – nothing was by accident.
     
    That year of my 49 years in the grocery industry was an amazing one in which I learned a great deal more about how a truly successful company really works. At that time ten cents out of every dollar spent for groceries in this country was spent in a Kroger-owned store. I believe that number is higher today.





    Regarding the about-to-be-imposed soft drink tax in Philadelphia, MNB reader Gregg Raffensperger wrote:

    Typical political double speak.  I seriously doubt the “additional funding” from a soda tax will go specifically to education and libraries.  It sounds to me, more like the lottery and how that funds the senior programs.  How long did that last?? 
    Me thinks the next tax target will be salty snacks….only after they pass medical marijuana.


    I think they call that synergy.
    KC's View:

    Published on: June 13, 2016

    • Creator won the 148th running of the Belmont Stakes over the weekend, rallying in the stretch from the middle of the pack and nosing past Destin to take the final race of the Triple Crown season.
    KC's View: