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Monday, December 09, 2019

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Monday Eye-Opener: A Tree Industry Falls

by Kevin Coupe

The National Christmas Tree Association is out with a report saying that tree production is down this year, and actually is down 30 percent since 2002.

It may not matter. The Washington Post reports that "each year, fewer Americans are putting up trees during the holidays. And those who do are increasingly choosing artificial ones … The percentage of households putting up a Christmas tree fell from 90 percent in 1989 to 76 percent in 2018. The percentage of real trees has dropped even faster: from 47 percent in 1989 to 21 percent last year."

It is, the story says, aging baby boomers who "are driving much of this shift, as they opt for the convenience of plastic trees that can be reused year after year."

Yikes. Just one more thing to blame on us Baby Boomers.

The Post writes that "artificial trees have gained in popularity, like so many other domains, as time-starved Americans prioritize convenience. They don’t shed needles, trigger asthma attacks or need to be watered. And, as the Consumer Product Safety Commission is so fond of reminding us, a single errant spark won’t turn one into a roaring inferno within seconds.

"But the biggest factor of all may be demographics: As children move out and parents enter their retirement years, the annual holiday pilgrimage to the tree farm may have less appeal than it once did."

I'm chagrined to admit this … but I'm guilty.

For the second year in a row, we're not going to have a big tree. Primarily, this is because for the second year in a row, we have a small puppy in the house, and we're convinced that the combination of a puppy and a tree would be a nightmare.

So we'll just go pick up a small tree at Stew Leonard's - one no taller than two or three feet that'll hold maybe one small string of bulbs and a few favorite ornaments. And I have to admit that when the puppies are grown, we may continue this new tradition … or maybe move to an artificial tree.

Though I'm not sure I'll feel good about it.

Aldi, Fighting Above Its Weight Class

The Chicago Tribune writes about how Aldi - now offering upgraded stores with a broadened though still limited selection that includes "more fresh, organic and high-end products," a treasure hunt atmosphere and an upgraded appearance - is climbing "toward its goal of having 2,500 stores by 2022 — which would make it the third-largest grocer in the nation by store count … Though behemoths like Walmart and Kroger dominate the market, analysts say the companies are watching their backs as the German-born chain reshapes expectations of the shopping experience."

The story goes on: "Known for cost-saving measures such as requiring customers to bag their own groceries and pay a quarter deposit to access a grocery cart, Aldi says its customer base has swelled as it modernizes its digs and broadens its selection to include items like fresh salmon, organic strawberries and artisan cheeses.

"At remodeled stores, which have been expanded to fit a bigger produce and fresh foods section, customer traffic has increased by 30% to 40%, said Scott Patton, vice president of corporate buying … While shoppers still have to go elsewhere for fresh ginger or water chestnuts or organic tofu — though Aldi is testing the latter — and can’t get a single lime without buying a 1-pound bag, Patton said Aldi should cover 90% to 95% of their grocery list."

Two other excerpts from the story:

• "In a report last year, Morgan Stanley said 1 in 5 customers who recently switched grocery stores took their business to Aldi, a greater share than opted for Costco, Kroger, Target and Whole Foods. Walmart, the market leader, got 30% of switchers, but that was flat from the prior year while Aldi’s share was up significantly."

• "Nearly half of Walmart stores, and more than half of Krogers, are within 5 miles of an Aldi as the discounter elbows into their territory, the report said. Aldi is vying for shoppers online as well: Last year it rolled out a chainwide grocery delivery partnership with Instacart, and last month added same-day beer and wine delivery. Twenty percent of its delivery customers had never been to one of its physical stores before, suggesting it’s finding new audiences, Patton said."

KC's View: The Tribune makes the point that while Aldi does not dominate any market in terms of penetration, it tends to fight above its weight class; Walmart is said to benchmark its prices "against Aldi’s, setting them a few percentage points higher because the mass merchandiser has the advantage of more products." And in part, traditional grocers' greater focus on private label is seen as reflecting Aldi's successful approach to own-label products.

I've had more than a few people suggest that especially in an economic downturn, Aldi will be well positioned to do a lot of damage in the markets it serves, and that mainstream retailers such as Kroger and Albertsons need to be concerned about its growth.

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Industry Drumbeat

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Wegmans Sounds Last Call At Its Natick Tequila Bar

Wegmans seems to have suffered a rare misstep at the Blue Dalia Restaurant & Tequila Bar that it has been operating in its store at the Natick, Massachusetts, Mall … the retailer has confirmed that it has been shuttered.

The Framingham Source reports that a spokesperson said that "despite the success of our Natick store, Blue Dalia did not consistently meet our projections.  The reason, in large part, was that it competed with our own in-store restaurant food options, like the Burger Bar, Sushi, Pizza and much more,”

The store's website still is pitching the Blue Dalia: "Blue Dalia is a vibrant Mexican restaurant and tequila bar led by renowned Chef Roberto Santibañez as Culinary Director. Located on the second floor of Wegmans at Natick Mall, our restaurant embodies the best of contemporary Mexican cuisine, with market-fresh food and authentic flavors paired with truly welcoming hospitality.

"Inspired by Chef Roberto's hometown of Mexico City, our regional menu combines traditional family recipes, seasonal ingredients, and a modern sensibility to create soulful dishes that tell a story. Our bar program offers an extensive tequila collection and craft cocktails. We bring the vibrancy of Mexico's 31 states to life through festive design and authentic touches."

KC's View: No mas.

As I said, a rare misstep. Count on Wegmans to move quickly to fill in the blank space in a way that builds on its strengths.

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From Ideoclick...

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An Empire Fades: Tesco Said To Mull Asia Exit

The BBC reports this morning that Tesco is considering a sale of its Thailand and Malaysia businesses, "after interest from potential bidders." However, the company said that no final decision has been made.

The story says that "the announcement signals another potential pullback by Tesco from its once-ambitious global expansion. If a sale does go ahead it would mean the company would be left with stores in the UK and Ireland, and an unprofitable division in central Europe. That unit covers the Czech Republic, Hungary, Poland and Slovakia."

The BBC also reports that Tesco also has been "shedding assets in the UK to focus on its core grocery business. In 2016, it sold the Giraffe restaurant chain just three years after buying it for £49m."

It is estimated that a sale of the two businesses could bring Tesco as much as the equivalent of $9 billion (US). Bloomberg writes that "Tesco Thailand launched in 1998 and has 1,967 stores. The Malaysian business started in 2002 and has 74 stores."

KC's View: I keep thinking about Vera Lynn singing "There Will Always Be An England…

Though worlds may change and go awry
While there is still one voice to cry
There'll always be an England…


Maybe not so much. Not the way things are going.

From the government to its businesses, England's influences and footprint keeps shrinking.

It is just a rumor, but once Daniel Craig is replaced as James Bond after comes out next spring, it is said that the UK's diminished role in the world will mean that the super spy will carry a designation of 003.5.

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Industry Drumbeat

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Now back to regularly scheduled editorial...

Is Chipotle Nursing Employee Resentment With Sick Day Rules?

The New York Daily News has a story about Chipotle employees only are allowed to take a sick day if they get a note from a medical professional.

According to the story, "Speaking at a Barclays investors conference this week, Chipotle CEO Brian Niccol laid out the many ways the restaurant was trying to win back customers’ trust, including offering sick days (with a catch) so employees don’t spread contagious illnesses to diners.

"'We have nurses on call, so that if you say, ‘Hey, I’ve been sick,’ you get the call into the nurse,' Niccol said. 'The nurse validates that it’s not a hangover — you’re really sick — and then we pay for the day off to get healthy again'."

The Daily News notes that "Niccol says it’s all part of improving food-safety measures across the company in order to avoid past embarrassments. The restaurant has seen a spate of foodborne illness outbreaks in the last several years, including an outbreak of norovirus in Virginia that originated after a manager refused to give a sick employee time off."

KC's View: I don't get it. First of all, this strikes me as reflecting an enormous lack of trust that Chipotle has in its store employees. How, over the phone, will a nurse be able to tel whether it is the beginning of the flu or a hangover?

How many people will go to work =even when not feeling well because they don't want to be cross examined by a nurse?

Not the best approach, I think, for a company that has had more than its share of food safety issues.

E-conomy Beat

• In a speech to the annual Reagan National Defense Forum in Simi Valley, California, Amazon founder-CEO Jeff Bezos made the case that the US Department of Defense should not be treating technology companies like the enemy - and that citizens shouldn't see the government as the enemy, either.

"“If big tech is going to turn their backs on the Department of Defense, this country is in trouble, that just can’t happen,” Bezos said. “Look I understand these are emotional issues, that’s okay, we don’t have to agree on everything, but this is how we are going to do it, we are going to support the Department of Defense. This country is important,” he added. … "“We are the good guys, I really do believe that."

The speech came as Amazon is suing the Trump administration, saying that President Trump's bias against Amazon harmed its chances of winning a $10 million Pentagon cloud computing contract.

Trump's alleged bias is centered on the fact that Bezos owns the Washington Post - which has been aggressive in its coverage of the administration - in a private investment.

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Corporate Drumbeat

From Mercatus...


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FastNewsBeat

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

CNN has a story suggesting that all the signs indicate that this well could be Sears' last holiday season.

Having "narrowly survived its bruising bankruptcy fight just one year ago," Sears does not have a CEO, and soon will be operating with less than half the stores with which it emerged from bankruptcy. "Rather than holiday sales this year, it started going-out-of-business sales at 96 of its remaining stores the week after Thanksgiving," CNN reports. "This suggests that sales and turnaround plans have not lived up to expectations."

What's really sobering, the story says, is that all this is happening "at a time when consumer spending is strong, with unemployment at a 50-year low."

Been saying it awhile. Dead company walking.


KUT-TV News reports that "big changes are ahead for H-E-B stores in South Austin next year. The company says it's investing $200 million to open three new stores. Meanwhile, three other locations are closing – two of them permanently … H-E-B has been operating a grocery at 2400 South Congress since the 1950s. A temporary store will open across the intersection in the old Twin Oaks Shopping Center in February. H-E-B will then close the South Congress store on March 22, tear it down and build an entirely new multistory H-E-B on the property. The company says the new grocery will open in 2022.


• United Natural Foods, Inc. (UNFI) announced it has entered into definitive agreements to sell 13 of its 43 Shoppers Food & Pharmacy stores to three separate grocery operators, and also will "close four additional Shoppers stores, which are expected to cease operations by the end of January 2020. UNFI made the decision to not renew the lease at three of these locations and the fourth is being cancelled pursuant to agreement with the landlord."

UNFI has been working to sell off stores - including Cub - that it took ownership of when it acquired Supervalu.

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RIP

• Caroll Spinney, the puppeteer who on "Sesame Street" brought to live such memorable characters as Big Bird and Oscar the Grouch, has passed away at age 85.

Spinney started with "Sesame Street" when the show began in 1969, and only retired last year after performing became too physically demanding.


• René Auberjonois, perhaps best known for playing the shape-shifting Odo on "Star Trek: Deep Space Nine," has passed away from metastatic lung cancer. He was 79.

In addition to "DS9," Auberjonois was known for acting in Robert Altman movies (he was the original Father Mulcahy in the movie version of M*A*S*H, on Broadway (opposite Katharine Hepburn in “Coco," for example), in animated movies (he voiced Chef Louis and sang "Les Poissons" in The Little Mermaid), and in TV series ranging from "Benson" to "Boston Legal."

Your Views: Private Lives

We had a story last week about privacy issues, which prompted one MNB reader to write:

Interesting to read your comments on retailer privacy. This is a very current issue with me.  I had a late check bag issue with American Airlines about 2 months ago. American recognized it was their mistake and told me to buy the clothing I needed for a meeting next day.  I went to Nordstrom and JosABanks to buy some clothing / shoes that would fit.  I sent the receipts to American that day for reimbursement, per their request.

The next day, I tried to wear the shoes (which didn’t fit) I went back to Nordstrom to replace them with a pair that did. (My checked baggage didn’t show up for 3 days.)  No change in the price of the shoes; they returned the first pair and did a separate transaction for the replacement shoes.

The next day, I received a call and voicemail from American Baggage Services.  They denied my  entire claim on the basis of fraud – that I had returned the shoes to Nordstrom.  I called them and spoke with their agent, who said she had personally called the Nordstrom store, and asked about my shoe purchase. The store said I returned them with no mention of replacement shoes.  American called JosABanks and they refused to provide data, citing Customer Privacy.

I told AA what happened with the shoes. They said they had a policy  - and no matter that I conducted the return / re-purchase transaction within 15 minutes (time stamped on the receipts) they wouldn’t pay for the entire claim.  They said they would send a letter or email to confirm the discussion with me.  (That letter never been received; I’ve followed up 4 times since and they now refuse to send a letter as they have asked what I need it for when they have told me by phone.)  Anyway, I immediately called Nordstrom and asked for their team responsible for Customer Service.  I had to make 4 different calls but eventually got to the person responsible for Customer Privacy.  They wanted the store information as well as to listen to the voicemail/s, which clearly said AA had called the store to verify purchase.  The individual responsible for customer privacy said the decision was “over her paygrade” but that she’d get back to me within a week. I sent them the information they needed to understand how I was compromised.

A week later, I received a call. Nordstrom (politely) said that since the American Airlines representative didn’t indicate specifically who they talked with at the store, they were choosing to not follow-up further. They said that had I received the name of the person to whom AA talked, they would have followed up with the store and reminded them of the privacy policy. Otherwise, there was nothing they could do.  I simply asked “Can you please train your team that if they want to share my purchase data, would they please advise the caller of my replacement purchases – not just the return?” You might be shocked to learn that Nordstrom didn’t think my request was fair. 
 
Net of it: I’m out a lot of money. And, time.  AA has a policy; so did Nordstrom.  Customer loses.

Nordstrom heard the AA voicemail, including the phone number and name of the person who called me from AA. They heard the timestamp of the call. They acknowledge that all the facts were there but they were choosing to do nothing about it.
 
I no longer shop at Nordstrom.  Their promise on Customer Privacy isn’t worth the paper its written on.  They surprised me; AA didn’t, but that’s another matter entirely.


Wow. Talk about a perfect storm.

From The MNB Sports Desk

• In Week Fourteen of National Football League action…

Indianapolis 35
Tampa Bay 38

Baltimore 24
Buffalo 17

Detroit 7
Minnesota 20

Washington 15
Green Bay 20

Denver 28
Houston 24

San Francisco 48
New Orleans 46

Cincinnati 19
Cleveland 27

Carolina 20
Atlanta 40

Miami 21
NY Jets 22

LA Chargers 45
Jacksonville 10

Kansas City 23
New England 16

Tennessee 42
Oakland 21

Pittsburgh 23
Arizona 17

Seattle 12
LA Rams 28



• In Major League Baseball, the Hall of Fame veterans committee voted in two new members - Ted Simmons the former St. Louis Cardinals/Milwaukee Brewers/Atlanta Braves catcher, and Marvin Miller, who led the Major League Baseball Players Association from 1966-82. That was a time when, as ESPN puts it, "players gained the right to free agency after six seasons of big league service, to salary arbitration and to grievance arbitration," arguably having as much of an impact on the game as anyone who did not wear the uniform.

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Industry Drumbeat

HOW TO BE A RETAIL PIRATE: Authentic, Relevant, Resonant, Rapid, Revolutionary (ARRRR!)

A NEW PRESENTATION BY KEVIN COUPE

Steve Jobs once said, “Better to be a pirate than join the navy.” In today’s cutthroat retail environment, that attitude needs to be at the core of every business’s strategic, tactical and operational approach - challenging the status quo, doing the unexpected, creating customer-centric business initiatives and then disrupting them internally … appealing to people’s hearts and heads and aspirations … acting with piratical verve and always moving forward. In this brand new, lighthearted, illuminating and uniquely pertinent presentation, filled with examples and anecdotes and lessons, MorningNewsBeat’s Kevin Coupe brings a passion for storytelling and a unique perspective on business that will entertain and energize audiences.’’

Here’s what Lori Stillman, Executive Vice President - Analytics, Insights and Intelligence, Advantage Solutions, has to say about a recent appearance:

"Kevin joined us as a moderator and facilitator for a two-day client executive event we hosted. His role in the success of the event went far beyond his time presenting and sharing his great wisdom and content. From the moment our planning process began and we selected Kevin as a key part of our program, he dove in and worked with our team to review session topics, ideate on programming and help ensure our overall event delivered on the goals we had established. His quick wit, deep industry knowledge and ability to synthesize conversations into key take-aways enabled us to hit a home run!”

And, from Joe Jurich, CTO of DUMAC Business Systems:

”Kevin recently participated in and spoke at our Annual User Conference.  Our group consisted of independent retailers, wholesalers, and software vendors – a pretty broad group to challenge in a single talk.  While his energy, humor, and movie analogies kept the audience engaged, his ability to challenge them to think differently about how they go to market is what really captured them!  Based on dinner conversations afterward, he appeared to have left everyone thinking of at least one new approach to their strategy!”

To book Kevin for your upcoming event, click here , or call him at 203-253-0291.


Now back to regularly scheduled editorial...

How Technology Empowers Healthcare & Selfcare: A Retail Tomorrow Podcast

Past Retail Tomorrow podcasts have focused on how technology can have an impact on business models and people's lives. In this edition, however, we drill down to talk about how technology affected one life … and, in fact, makes living a best life possible.

Our guest: Heidi Dohse, senior program manager in Google's Cloud - Health and Life Sciences division. Dohse's personal and professional story makes for a compelling narrative that is at once provocative and inspiring.

Hosted by Kevin Coupe, MorningNewsBeat’s “Content Guy."

You can listen to the podcast here, or on iTunes and GooglePlay.

This edition of the Retail Tomorrow podcast is brought to you by GMDC, the Global Market Development Center.








PWS 59