business news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: November 13, 2013

    by Kate McMahon

    "Kate's Take" is brought to you by Wholesome Sweeteners, Making The World a Sweeter Place.

    This year, the traditional Thanksgiving turkey can expect some newcomers to the table – as in gluten-free side dishes, Hanukkah latkes and smartphones snagging pre-Black Friday deals.

    So one can surmise by perusing the internet, where even Saveur.com is touting gluten-free pumpkin pie and Manischewitz’ Facebook page is holding a “Happy Thanksgivukah” recipe contest. And we all know shopping in stores and online starts well before the dessert plates are cleared.

    The demand for and prevalence of gluten-free recipes is also no surprise, given the explosive growth in that industry. But is it a rare alignment of calendars – a late Thanksgiving and an early first day of Hanukkah - which has led to the celebration of “Thanksgivukah” on Thursday, Nov. 28th. The last time the two holidays coincided was back in 1888.

    Both trends present unique opportunities for retailers and marketers.

    I knew gluten-free was more than a fad when I encountered gluten-free concession stands in three major league ballparks last year. And I’ve happily revamped many menus to accommodate gluten-free dinner guests (yes on quinoa and corn chips, no on couscous.)

    Recent research by Mintel shows the gluten-free food and beverage industry is forecasted to reach $10.5 billion this year, after surging 44% from 2011-2013. The incidence of celiac disease affects only 1% of the U.S. population, but 65% of consumers who eat or used to eat gluten-free foods do so because they believe them to be healthier, and 27% eat them because they think such foods help with weight loss efforts.

    Interestingly, the smaller retailer in my community has a much more extensive, well-displayed gluten-free section than its competitor, part of a larger national chain. I don’t know if that is a trend or an exception, but the holiday season is an ideal opportunity for stores to promote gluten-free products, even featuring specific recipes. For Thanksgiving that would certainly include gluten-free pie crusts and gravy, dessert alternatives and of course, stuffing. The spicy cornbread stuffing on the Saveur site would be a winner at any table.

    Which brings us to Thanksgivukah, or in some circles spelled Thanksgivukkah, which most experts consider to be a once-in-lifetime occurrence. The folks at Manischewitz, the nation’s leading producer of kosher foods, have launched a multi-platform social media and marketing campaign to celebrate the day. There’s plenty of humor on the microsite and on Facebook, including a graphic of the Hanukkah candelabra topped by a turkey, complete with Pilgrim hat.

    There is also a mash-up recipe contest with a $1,000 prize, a presence on Twitter, Pinterest and Instagram, and witty e-cards for family members to share and the chance to win special Thanksgiving dreidels.

    Beyond the one hybrid holiday, the campaign also furthers Manischewitz’ goal to introduce its brand, particularly its broths for cooking, to a wider, non-Kosher audience.

    Not to be outdone, New York’s Zucker Bakery has created a Thanksgivukkah special – a traditional Hanukkah donut made of pumpkin dough and stuffed with turkey and cranberry, turkey gravy or just cranberry sauce. Pair that with a gluten-free latke, and the traditional turkey is in good company.

    There’s still time to participate in our informal MNB survey – who prepares the Thanksgiving turkey in your household? Male, female or joint endeavor? Email me at kate@mnb.grocerywebsite.com .
    KC's View:

    Published on: November 13, 2013

    by Kevin Coupe

    Variety has a great piece about something that I either did not know or did not remember - that a decade ago, Blockbuster had the opportunity to buy Netflix, but its then-CEO, John Antioco, turned the deal down.

    At the time, Netflix could have been bought by Blockbuster for $50 million. Today, Netflix has a market cap of $19.7 billion … and Blockbuster is an obsolete brand being shut down by its owner, Dish Network.

    And the irony is that at the time, Netflix CEO Reed Hastings was looking to be acquired, thinking that a combination of the two companies would be idea - that Netflix could run Blockbuster's mail order and online business, and Blockbuster could have Netflix videos in-store.

    The story is about how Blockbuster didn't see the opportunity, wasn't unable to see where the future was going, and missed the chance to be a transformational company.

    It illustrates, in the words of one observer, the difference between management and vision.

    You can read the story here.

    It is an Eye-Opener.
    KC's View:

    Published on: November 13, 2013

    Portland, Oregon-based New Seasons Market announced yesterday that it has acquired Northern California-based New Leaf Community Markets, an eight store chain that describes itself using "the power of business to solve social and environmental problems," much like New Seasons. Both companies "give back to the community by donating 10 percent of their after tax profits to nonprofits in the communities and neighborhoods they serve."

    Terms of the deal were not disclosed.

    NewSeasons president/CEO Wendy Collie will lead both companies, and New Leaf will operate as a wholly owned subsidiary of New Seasons. New Leaf founder Scott Roseman will join the NewSeasons board of directors. According to the announcement, the companies have agreed on "an operating model that ensures each community-focused store makes local operating decisions and serves as a resource and partner to the customers, vendors and staff they serve."

    "Joining with New Leaf will advance both companies’ missions and values, and creates smart scale on our own terms,” Collie said. "We see combining with this like-minded … grocer as a way to grow thoughtfully and sustainably … Together, we can leverage the power of good, share best practices and strengthen our positions as independent natural grocers."

    And, Collie tells the Oregonian: "For us it's really less a out the cost savings and more about the partnership we want to create in this incredibly competitive industry we're in that's being more and more dominated by big players."
    KC's View:
    The Oregonian also notes that "New Seasons had grown slowly but steadily since its founding in 2000. But that growth accelerated after Portland venture capital firm Endeavour Capital took a majority stake in the company in 2009. It opened its 13th store this year, employs 2,700 and plans to open three more stores by spring of 2015."

    Endeavour, it should be noted, has built an interesting portfolio of investments in independent West Coast food retailers - NewSeasons, Metropolitan Markets, Bristol Farms and now, through the acquisition by New Seasons, New Leaf. It is an intriguing model - and while they all are different, I have to say that the three that I've spent time in (I haven't been into a New Leaf store - yet) are among my favorite retailers. And when I live in Portland, Oregon, each summer, one of the pleasures is being able to be a New Seasons customer.

    Published on: November 13, 2013

    The Wall Street Journal reports on a new study from Kantar Retail suggesting that more than half of shoppers at 53 different major bricks-and-mortar retailers also are shopping on Amazon.

    The Journal writes: "What makes a shopper more likely to visit Amazon includes demographics, income level, geography, and what goods are on sale, says Amy Koo, a senior analyst at Kantar. What keeps shoppers away is more likely to be access to credit cards. Internet access is no longer a stumbling block as growing smartphone use has more people connected than ever before.

    "Those with the most overlap are companies that tend to cater to higher-end shoppers like Williams-Sonoma Inc., Apple Inc. and Nordstrom Inc. Babies 'R' Us and Toys 'R' Us have a 70% and 69% overlap rate, respectively, partly as time-crunched parents find it easier to get diapers shipped to their door from Amazon instead of going to the store."

    According to the Kantar report, here are the percentages of retailer customers who also shop at Amazon: eBay (79%), Gap (77%), IKEA (77%), Williams-Sonoma (76%), Apple (76%), Nordstrom (74%), Pier 1 (73%), Old Navy (70%), Babies R Us (70%), Toys R Us (69%), Whole Foods (68%), Trader Joe's (68%), Bed Bath & Beyond (67%), Best Buy (67%), Barnes & Noble (66%), Office Depot (66%), Petco (66%), TJ Maxx/Marshall's (65%), OfficeMax (65%), Macy's (65%), Dillard's (64%), Radio Shack (64%), Staples (64%), PetSmart (64%), Sears (64%), JC Penney (62%), Target (62%), Kohl's (62%), Costco (61%), Home Depot (61%), Big Lots (61%), Lowe's (60%), Rite Aid (60%), BJ's (59%), Safeway - all banners (58%), Ahold - all banners (58%), CVS (58%), Kmart (57%), Walgreen (57%), Sam's Club (57%), Supervalu - all banners (56%), ShopRite (55%), Kroger - all banners (55%), Menard's (55%), Dollar Tree (54%), HEB - all banners (53%), Meijer (52%), Walmart (52%), Publix (52%), Family Dollar (52%), Delhaize (51%), Dollar General (51%), and Giant Eagle (51%).
    KC's View:
    Yikes.

    One of the things that is interesting about this story is that it runs in the on the same day as another Amazon-related piece, saying that Target seems to be taking a few pages from Amazon's book:

    "The discount chain's latest online offerings have a distinct Amazon feel—from recurring deliveries for diapers to on-demand streaming video and free shipping and discounts for its members. All emulate similar offers from the e-commerce company.

    "Target's headquarters here is also taking on some perks more typical of West Coast technology companies than a Midwestern retailer. That includes vintage arcade games, a boccie ball sand pit and a red basketball court stamped with the retailer's bull's-eye logo in the new common area. And next year, the company plans to spend more on technology than it does on building and upgrading its stores.

    "Target says Amazon is just one of many competitors and it isn't mimicking anyone. Still, the moves highlight an important fact of doing business at Target: the customer who visits the discounter's giant stores and the customer who orders online from Amazon are increasingly the same person."


    Some retailers are going to find ways to mimic Amazon. Others will find ways to differentiate themselves. Still others will mix and match. But pretty much everybody that sells anything has to realize that they are competing with Amazon. (Hence the title of the new book about Amazon, "The Everything Store." I'll have a review tomorrow.)

    And keep this in mind. Jeff Bezos never wanted Amazon to be defined as a retailer. He wanted it to be perceived as a technology company … which, in many ways, it has become.

    This big-picture approach reminds me of what Reed Hastings always said about Netflix - that it was not a DVD rental company, but rather an entertainment company, an approach that has enabled the company to transcend its roots and evolve into something far more successful.

    It is a complicated playing field. Everything and everyone is in play.

    Published on: November 13, 2013

    The Cleveland Plain Dealer reports that an Ohio state representative, Mike Foley, is proposing legislation that would mandate retailers open on Thanksgiving or on Black Friday morning to pay their employees triple-time. However, he concedes that even as he makes the proposal, it is extremely unlikely that it will pass the legislature … and even if it does, it could not be enacted in time for this year.

    The Democratic lawmaker says that he was prompted to submit the bill by stories about how many retailers are pushing their opening times into Thanksgiving as a way of jump-starting the holiday shopping season.

    “It’s a disturbing, creeping trend,” Foley says. ““There are some days in the year where you should just be able to chill out and not have to worry about the whole consumeristic, commercial world.”
    KC's View:
    Y'know what I find to be a disturbing, creeping trend? Lawmakers who pander for votes by proposing legislation that can't have any real impact. Not to mention lawmakers who don't seem to have any sense of larger realities.

    I've said it before and I'll say it again. I'm no fan of the idea of opening stores on Thanksgiving. But the simple facts are that traditional bricks-and-mortar retailers are under considerable pressure from online counterparts, which are open 24 hours a day, seven days a week, 365 days a year. Whether they are correct or not, they feel that one way to compete is to open earlier and earlier, even if it intrudes on the Thanksgiving holiday.

    Is this good for the culture? Probably not. Is it good for their employees? Almost certainly not. Is it good for their bottom line? Maybe. (Though their sale prices may be so low that profits may be hard to come by. We'll see.)

    Published on: November 13, 2013

    ABC News reports that Walmart employees who are asked to work on Thanksgiving will "be treated to a traditional feast of turkey, mashed potatoes, rolls and pie.

    "Workers who are scheduled for overnight shifts, day shifts and evening shifts on turkey day will receive a Thanksgiving meal provided by the company, according to Kory Lundberg, a Walmart spokesman." This could amount to about a million meals, since some one million Walmart employees likely will be called in for the holiday.
    KC's View:

    Published on: November 13, 2013

    • Ahold-owned Peapod said yesterday that it has opened a new fulfillment center in Coopersberg, Pennsylvania, that will serve online customers of Giant Food Stores of Carlisle, Pennsylvania, in more than two dozen local zip codes.

    "Peapod by Giant has seen exciting growth in the Philadelphia area, and we are delighted to partner with our sister grocer, Peapod, to expand service to additional zip codes in the Giant trade area," Giant-Carlisle president Rick Herring said.
    KC's View:

    Published on: November 13, 2013

    • Delhaize-owned Food Lion said yesterday that it has completed "significant investments" in 169 stores in key North Carolina and South Carolina markets, including Greenville, N.C., Wilmington, N.C., Columbia, S.C., Charleston, S.C., and Myrtle Beach, S.C. 

    The company is celebrating the investments with grand re-openings at all 169 stores, pointing out lower prices on some 6,000 items, and an improved produce selection.


    Bloomberg Businessweek reports that Starbucks has agreed to pay Mondelez International $2.76 billion to settle a 2010 dispute over bagged coffee sales.

    The dispute began when Starbucks CEO Howard Schultz terminated a contract with Kraft Foods (as Mondelez then was known) that had the company marketing and selling Starbucks bagged coffee. Starbucks was trying to segue from being a coffee company into being a broader consumer products company, and it accused Kraft of not paying enough attention to its brand. Kraft sought what it called fair compensation for the loss; Starbucks offered $750 million, Kraft declined, and the dispute continued.
    KC's View:

    Published on: November 13, 2013

    • Office Depot announced yesterday that it has hired Roland Smith, the recently departed CEO of Delhaize America, to be its new CEO. Smith also is a former CEO of Wendy's.

    Office Depot has just completed a merger with OfficeMax. Smith is replacing Office Depot's former co-CEOs, Neil Austrian and Ravi Saligram, who are leaving the company, and his first job will be to integrate the two companies.
    KC's View:
    I hope Smith shows greater commitment to the office supplies business than he did to the supermarket industry, where he bailed after a year when he did not get the bigger job (head of Delhaize's global business) that he wanted. I always worry a bit about senior executives who have one eye on the next job, instead of both eyes on the job they actually are supposed to be doing.

    On the other hand, my sense from folks at Delhaize is that they think they are better off without him.

    Published on: November 13, 2013

    …will return.
    KC's View: