business news in context, analysis with attitude

In response to yesterday’s story and commentary about proposed guidelines on what can be marketed to children aged 16 and younger, MNB user Gavin Hoey wrote:

I think you hit it right on the head. Purely from a concerned Parent standpoint:

The Parent with the Money, buying the groceries has the ultimate say in what their children eat at home, and will ultimately influence what those children eat when they are on their own, and when they are all grown up.

If that parent has no more insight into what is a healthy choice for their children other than TV ads and magazines/news papers that child is doomed to eat what TV tells them to.

Children need to hear “NO” more than, “maybe just this once for a treat.”

Cooking a meal at home instead of going out or ordering in needs to be the norm.
(It takes no more time to make a healthy home cooked meal than wait for the pizza man.)

I took 3 minutes to count the following food category items that my wife and I have prepared at home for ourselves and our kids.

Maybe someone can use this as a guideline to get people to start cooking again:

• 28 different fruits
• 27 different vegetables (plus mushrooms I think they fall under fungi) and lettuce only counts as one, no matter how many different types you know.
• 32 cuts of meat from 10 different species, plus fish and shell fish (too many to list).

Take a class. Try something different. Grow your own garden. Eat real FOOD!!!!

Responding to my comments expressing surprise the number of people at a recent food marketing conference who had not bought anything from, MNB user Brian Fox had a thought:

I noticed your remarks this morning about the number of people who haven’t used Amazon. Maybe part of the problem is very similar to the one I have. We left the city for a bedroom community two years ago and since there are only box numbers now (including site#, Compartment #, etc.. for Rural Route’s) which no online supplier will ship to the very folks who would be most likely to use an online source are prohibited from doing so.

I think that this may be the case in certain circumstances, but I actually think that there’s a lot more intellectual laziness out there. Hate to say it, but that’s what I think.

I got the following email from MNB user Jonathan Reynolds, who, for purposes of putting his comments in context, I should mention is the Director, Oxford Institute of Retail Management at the Saïd Business School at the University of Oxford. (Plus, I think it is so cool that someone with that kind of title would read MNB!) Reynolds has some thoughts about a Financial Times piece, noted here on MNB, about Tesco growing its Japanese business:

Enjoyable lunchtime (for me) reading as ever. That FT piece is interesting in the context of Fresh & Easy. It suggests several things to me:
1. Even with an acquisition, (which in fact Tesco mulled over for quite a while in relation to Japan before making), it takes a long time to get things right-ish outside your home market. Four years is not unusual (some are still not yet profitable in Japan after longer than that – Wal-Mart not least). Investors (and commentators!) are desperate for quick results, but the evidence from research that we have done in Oxford suggests that it takes much longer than anyone expects. One CEO with big international interests we had speak in Oxford told us: “Accept that getting 70% of it right in a new market is a roaring success” . Actually, the FT could even be a little premature: Tesco’s Japanese sales growth hasn’t been that great over the period … Having said that, Tesco’s businesses in much of eastern Europe have been very successful relatively quickly.
2. What are the lessons for Tesco in the US from this? The biggest mistake UK retailers tend to make is to treat the US like home. My advice to them: treat the US like Japan. Just because you guys speak broadly the same language can lull the unsuspecting retailer into a false sense of security and big mistakes can be made. Just look at what Sainsbury’s failed to do with Shaws and Marks & Spencer with Kings. You say tomayto and I say tomarto.
3. Tesco doesn’t appear to have made this mistake in the US (although it’s doubtless made plenty of others) For example, it tracked families’ buying behaviour for several months before determining its positioning and format, just as it did in Japan.
4. Format change is not new for the company: everyone else was opening hypermarkets in Japan, because that’s what they did best (Carrefour, Wal-Mart). Tesco bought and opened convenience stores because they concluded that’s what consumers wanted. Their operational excellence is not necessarily tied to one particular format (again, unlike others).

I continue to be astonished by the amount of interest, hype, suspicion, cant, rhetoric and other words from Roget’s Thesaurus that has accompanied a UK company, that Wal-Mart could have bought with some loose change from its earnings, opening just 50 small stores in apparently unprepossessing locations in the western US. I’ve counted around a dozen blogs dedicated just to this subject in the US alone. OK, I know that this is a precursor to an invasion of the homeland with several hundred others. But a company like Dollar General has over 8,000 of not dissimilar size. This really seems to have touched a nerve.

A final thing on the UK market. Sure, there has been some economic tightening and food prices are on the rise. This will have affected overall spending. However, some of Tesco’s market share growth over the past 4-5 years has come as much from the poor performance of others in the market – notably Morrisons and Sainsbury. First Sainsbury and now Morrisons have picked themselves off the floor and are getting back in the fight. Indeed, Morrisons won retailer of the year at the Retail Week Awards last week – a real turnaround story. So I guess it’s no surprise that Tesco’s market share is faltering a little.

I feel a little smarter now. Thanks.

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