business news in context, analysis with attitude

We're in Barcelona this morning, preparing to cover the CIES World Food Business Summit, which begins this afternoon. Still, we've found time to sort through the email bag…

We got several emails in response to our story yesterday about "the dawning of obesity awareness," suggesting that consumers and manufacturers may be getting the message about the nation's expanding waistline.

MNB user Susan Kemp wrote:

I enjoy having healthier options at restaurants and the grocery store and I appreciate the education of the public regarding healthy diet and exercise.

However, I don't think our problems are due to a lack of healthy food or education regarding healthy life choices. I believe our real problem in America has to be with instant gratification. Our culture has become "I want it now, I will have it now." We see this in the rise in obesity and the rash of high credit card debt and bankruptcy.

I wish I had the answer to quell the instant gratification impulse.

Don’t we all…

Another MNB user wrote:

It requires re-programming your mind to not thinking those Krispy Kreme key lime donuts with frosting are soooo wonderful!!!

Okay, let's be absolutely clear about this. We understand that we are at the point in life when we can't be eating Krispy Kreme doughnuts every day or probably even once a week.

But yearning is different from having. The moment we stop thinking that Krispy Kreme doughnuts are anything but wonderful, one thing is absolutely sure.

We're dead.

We had a story about dollar stores getting into bridal sections, making us wonder just what they were selling in this category. Clearly, there are members of the MNB community who have better imaginations than we do.

One MNB user wrote:

$.99 garter belts. (Wouldn't you want to spend a bit more for a good one? Party favors, Plastic Flowers, plastic plates, Just the kind of wedding you wished you could have.

Another wrote:

They are probably selling things like silk flowers, or crafts to make favors for guests at bridal showers-- maybe wrapping paper etc. Many of these items could be under a buck. Quality could be questionable.

MNB user Alan binder wrote:

The key to this format's popularity is its unpredictability...the fun stuff you loaded up on last week may very well be gone this week, and you know that when you enter the store. The punch line to your story today about 99 Cents Only stores adding "Gourmet Fancy Foods" sections was, "What the hell are they selling?"...this seems odd to me.

You've been thumping the podium for expanded variety in retail; doesn't this count? Why not bridal products? Or DIY products? Or gourmet items?

I guess the only thing we probably won't see is automobiles, until some auto company launches another Edsel...

MNB user Trish Bellrose wrote:

Hey, in an age where you can get married at a drive thru window, why wouldn't you need a few "accessories" from a 99 cent store?

And another MNB user wrote:

I realize you’re questioning of 99¢ bridal products is a bit tongue in cheek…but I understand the assortment to be things such as bouquets (probably of the plastic variety), ring bearer pillows, and other-related items – likely small tokens used for table displays, bridal showers, etc. like those little baskets you fill with mints, etc. It’s also my understanding that Wedding gift cards are available ranging from $9.99 to $99 (just imagine – you can buy 100 wedding gifts with that one).

Our tongue resides permanently in our cheek…but we get the point.

Actually, almost nothing having to do with dollar stores surprises us anymore…as the Retail Forward study on the subject, referenced in our lead story this morning, makes clear.

We also continue to get email on the subject of consuming a competitor's product. FYI, this discussion was prompted by a story inn which a California Coca-Cola employee claims he was fired for drinking Diet Pepsi, as well as for being a union organizer. Coke denies the charges…but it created a broader discussion that's been ongoing all week. (We think that it's just silly for Coke employees to drink Pepsi, for McDonald's employees to eat at Burger King, or for Albertsons employees to shop at Kroger…not because of company requirements, but because they ought to realize that they hurt themselves by patronizing the competition.)

One MNB user wrote:

Kevin, I agree with you on the Coke & Pepsi issue. I understand freedom of choice, but what has happened to the loyalty in people today. Soft drink
business is the war of all wars in the world of retail. Certainly in a retail war, each side would want their troops (employees) to be loyal to the cause. You would want your troops to be against!!! the enemy and not for the enemy. In this freedom of this, and freedom of that, society, loyalty has been forgotten. Loyalty to your company has been replaced with "I'm free to do what ever I want, even if it supports the enemy (competition).

If you're not loyal to something as simple as a job your probably not going
to be loyal anywhere else. I always thought that part of doing your job included supporting the company not providing for the competition. This response really has nothing to do with the Coke guy getting fired because we really don't know why he was terminated in the first place. All we know is what the media has pointed out. Yet, the guy was obviously not loyal to his company by openly supporting the enemy.

I work for a grocery wholesaler in Oklahoma. In my house, it is forbidden to shop anywhere but our company supplied stores. Walley World (Wal-Mart) is absolutely out of the question for shopping. And here in OKC we are the testing ground of the world for the behemoth. We are surrounded by the enemy. The retail battle is still being fought on all sides whether it is soda, clothes or cars. Why support the enemy for anything whatsoever?

On the issue that was brought up by a couple of your MNB users that included cars ,clothes and smoking as a way to make a point. It was silly, however if a person is working at the Gap for example and goes out to spend to spend their paycheck at the competition on clothes to wear to work, Isn't there something wrong with that picture?"

More on this subject from another MNB user:

I happen to know that Fleming employees were barred from shopping at Wal-Mart when they were servicing the Kmart account. They had to send other family members into the store! A lot of good that did them.

And another MNB user wrote:

When I worked for Coca-Cola, I contributed to the 401K and company stock. It made NO financial sense for me to drink a product that did not support my retirement fund . . .

In response to our story about Dean & Deluca opening stores inside Borders units, MNB user Paul Schlossberg wrote:

This is about delivering convenience in new and different ways. If you can pick up dinner at the book store, it saves a second stop. If you're on foot (in Manhattan), it might save walking a few blocks while carrying books and/or tonight's dinner that extra distance. If you're in the suburbs, you won't have to park and walk in/out of two stores - there will be only one stop to make. That is serious time savings in the time crushed world we all live in these days. This is a reduction in time "spent" and hassle for shoppers.

Retail brands need to get much smarter about finding partners to deliver a much better experience for their customers. These seemingly unrelated concepts, a book store and an upscale food shop, might become good long term co-habitants.

Here is a potential lesson for retail brands across the US - and around the world too.

Agreed. Absolutely.

In response to yesterday's story about legislation that might give companies like Wal-Mart an advantage if they decide to get into the banking business, MNB user Sue Peterson wrote:

Weren't the first bankers actually merchants? And wasn't one of the first large merchant-banker families the Machiavellis? And doesn't this fit perfectly with Wal-Mart?

And MNB user Jem Walsh wrote:

The banking industry over the past 25 years has shifted its expense priority to something other than customer service. As a retailer, I am appalled at my bank's disregard for customer's time and patience. I would like someone using all my money to show me they appreciate it. If Wal-Mart can offer financial services with courtesy and consideration for the customer, I'll bank there. Be a little eager to help the customer; that's all.

I hate waiting in line at the supermarket or the bank. If other banks are worried about Wal-Mart competitively, (and they should be) they have had it easy for too long. I look forward to the positive changes the company can make in the financial services industry and I think we all can use object lessons from winners. I personally don't shop at Wal-Mart, though one is close by. But I am all for their (or any retailers) right to expand services to help themselves and their customers. And healthy competition only slays the unhealthy business.

The concept is "survival of the fittest."

One company that just wasn't fit enough to survive was A&P-owned Kohl's in Wisconsin, which announced it would be closing down next month. We got several emails in response to this subject.

MNB user Richard Sokolnicki wrote:

Kohls is just another sad A&P story. Kohls once commanded close to 50% of the Milwaukee market. When A&P took over it was still close to 30% and is now hovering around 10%. A&P's revival and growth was through acquisitions and high-priced development. Unfortunately, they disregarded successful strategies of most acquisitions. (Kohls, Farmer Jack, Waldbaums, and Food Emporium.) At Kohls, much of the everyday pricing is truly shameful. It's as if they never set foot in the door of a Pick n' Save which has dominated the market with a simple, basic approach: moderate prices with good promotions, wide aisles, bright lights, clean stores, good variety, excellent front end service, well lighted parking lots. (Hey's not brain surgery!)

Another MNB user wrote:

Just another example of poor commitment by the folks in A&P's ivory tower. These stores lacked investment, many needed relocation, they were old, dirty, poorly run and their loyal base simply deteriorated.

Great chain as an independent. But they've been losing share to new and reformatted concepts. You've been preaching to the choir for a long time about keeping the independent spirit alive within the big chains. This is a great example.

Not A&P's finest hour. We think they'd agree.

We headlined a story about Kmart's continued losses as "Kmart Death Watch," which generated the following email from a member of the MNB community:

Oddly enough, Wall Street seemed to be impressed. The stock was up about 4 points or 20%+ yesterday. I, like you, agree that it is only a matter of time before this thing goes away for good. What would keep us from shorting this stock? It likely will rise much higher from where it is now, which will make its fall that much more "impressive".

Seems to us that there are a lot of recent examples of why stock price should not be taken as a barometer of business excellence or long-term viability.

And, we continue to get email about Kellogg's decision to license the Special K name for a line of women's clothing, a move that we said we didn’t understand.

MNB user Murray Raphel wrote to remind us of something he wrote in The Raphel Report six months ago:

Do you remember Coca-Cola clothes? They were made by Murjani and failed the next year.

Do you remember Bic perfume? Bic after shave? Life Savers gum? Failed. Failed. Failed.

Levis decided since they were selling jeans, they could branch out and sell men's suits. But the customer wondered if the suits were made out of denim. It failed.

Pepsi Cola introduced clear, see through Crystal Pepsi and the consumer wondered how it could be "clear" if it was "cola." "Clear" was 7-Up. So what did 7-Up do? They introduced a cola-colored product they called 7-Up Gold. And the consumer asked how could it be 7-Up if it was cola colored? Wasn't this the same company that gained market share saying they were the UNcola? They lost $70 million on that one plus the lost sales of traditional 7-Up.

Does this mean the big guys are not always right? That they make mistakes? That you do not hear about the mistakes but only their successes?

Yes. Yes. And yes. But what does that tells us? This: When you vary from what you are, the consumer becomes confused, undecided and switches to the more familiar because they understand what it is and what it does.

As always, Murray makes a great point. Innovation is important…but understanding both "key value" and "key values" also is critical to success.

MNB user Kristin Rogers asked the question about Special K clothing that we wish we'd thought of:

Do they come with Lucky Charms bracelets?

We love it when you folks come up with your own jokes…
KC's View: