business news in context, analysis with attitude

Regarding the possibility that Kroger might acquire Albertsons, MNB user Thomas D. Murphy wrote:

Having worked at Kroger, I can tell you that they are very cautious and methodical about acquisitions and the following integrations. They are very careful not to hurt brand, while changing the background processes and underlying costs. Even the divisions that are Kroger branded have plenty of flexibility to deal with local markets and communities. That said, if Kroger were going to do this deal, I would expect them to keep the outlets in the Northeast and in Florida, piece pick some of the rest for fill-in, then close/sell the remainder to help fund the deal. Lastly, I believe Kroger is satisfied with being #1 or #2 in a market with Wal-Mart...their target remains everyone but Wal-Mart...i.e., don't outrun the bear, just all the other competitors!

We got several emails about yesterday’s piece comparing Wal-Mart to Target, one MNB user wrote:

As near as I can tell, & I've been in quite a few of each, it's the "overall picture.”

1.) Target stores appear to be Cleaner.
2.) Target stores sales people AND customers are friendlier.
3.) Target stores sales people AND customers both tend to speak
4.) Target stores parking lots "appear" cleaner & safer.
5.) Target stores have less variety, but better quality products.

All in all, I prefer Costco to either of them.

Another MNB user wrote:

In response to your statement on the unfairness of Target capitalizing on the fact that they just seem cooler than Wal-Mart: I think it is completely fair, because it seems to me that Target has invested time, money and resources into cultivating their "cool" image, and Wal-Mart has not. Target's TV and print ads are stylish and irreverent and they have brought in designer brands with real credibility (Todd Oldham, Cynthia Rowley, Isaac Mizrahi, etc.).

More importantly, all their private label products from chocolate to office supplies to shower curtains to holiday decorations are designed and packaged in a colorfully mod way that is Target's signature. They have deliberately invested in creating this signature style, and it has paid off. Wal-Mart's single-minded dedication to offering the lowest prices means they sacrifice spending overhead on the same things that make Target so appealing. As much as it has been a conscious decision of Target's to financially invest in cultivating their in-store style, it has been just as deliberate a decision of Wal-Mart's to not. Which I think is fine, because "Always Low Prices, Always" is what Wal-Mart is all about, and it works for them and their millions of customers.

Unfortunately, their austere and spartan stores are now reflecting on Wal-Mart the company. Yes, I think it's nuts that Wal-Mart is being attacked for its effect on business, economy and trade and Target is not - that is unfair. But in the "cool wars", Target's win is fair and well-earned.

On the subject of Kroger deciding to stop matching competitors’ ad prices, MNB user David J. Livingston wrote:

I have retailer clients who ad match however they never advertise that they do. They simply take the competitor's advertisement and change the price on the shelf. If they don't carry the item, such as a private label product, they simply substitute their private label. Therefore there is no slowdown at the checkout. Out-of-stocks can be a problem but it doesn't take more than a day or so to order extra product. Kroger is just making excuses to cover come other issue.

We had a story yesterday about Gannett deciding to post FSIs online, which led MNB user Tammy Gail to write:

How do you control redemption costs if there is an on-line version of an FSI coupon? Doesn't that interfere with circulation issues and bar code fraud all over again? Doesn't seem like brand managers would be lining up to try on-line FSI's. Too many unknown variables unless Gannett has figured out a way to control the number of display ads that will be viewed.

Regarding a story about the politics of fat, one MNB user wrote:

Being obese is just as unhealthy as smoking. People can control their weight just like they can quit smoking. Why should smokers be penalized for everything and treated as social outcasts. Some may argue that second hand smoke warrants this treatment. Yet we pay higher and higher health care rates due to the increase in obesity-related illnesses.

And finally, regarding a McKinsey study commissioned by Wal-Mart about how it could solve its public relations issues, MNB user Andy Casey wrote:

I don't know what WM paid McKinsey for that study (except that it was not cheap) but they could have saved it if they had just been reading the MNB discussion over the last year or so. I haven't read the study, but the excerpts would indicate there is no news here.

Ralph Waldo Emerson once wrote that “Common sense is genius dressed in its working clothes.” It has been our experience that the MNB community is an extraordinary repository of common sense…and that there are very few problems or issues that cannot be resolved just by listening to that inner voice of sensibility.
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