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Former Nash Finch CEO Takes Over at Borders

Posted on Jan. 6, 2009 at 8:37 PM - 0 Comments - Post Comment - Link

By George Anderson

Some believed that George Jones was on the right track with changes he was implementing at Borders Group. Others clearly were not satisfied with the pace of change on the bookstore chain's balance sheet even if they thought Mr. Jones was on the right track with moves such as placing kiosks in stores to enable consumers to burn their own CDs, self-publish books and make travel reservations.

As of yesterday, Mr. Jones is out as CEO of Borders and he is being replaced by %26quot;turnaround expert%26quot; Ron Marshall, the former top executive at Nash Finch. Before joining Nash Finch, he was chief financial officer at Pathmark.

Mr. Marshall is not entirely new to the book business after having served in management roles at Barnes %26amp; Noble's college bookstore unit and at Crown Books.

%26quot;Borders is a powerful brand with millions of loyal customers who love to shop in the stores,%26quot; said Mr. Marshall in a press release to announce his hiring. %26quot;These are tremendous assets that can be built upon once the balance sheet is strengthened and the company is on more solid financial footing. I've led turnarounds at other retail organizations and look forward to leading a new management team at Borders to drive profitability and help ensure lasting success for this great name in retail.%26quot;

The chain announced a number of other personnel changes, as well. Mark Bierley was named chief financial officer and executive vice president, finance, replacing Ed Wilhelm. Anne Kubek takes over as executive vice president, merchandising and marketing from Rob Gruen. Dan Smith was named to the newly created position of chief administrative officer from his previous position as executive vice president, human resources for Borders.

David Schick of Stifel Nicolaus %26amp; Co. told The Associated Press that continuing turnover in Borders' executive suite is likely to create more problems than it solves.

%26quot;We believe such powerful macroeconomic factors are at work that a management change could confuse the key constituents (vendors) and cause incremental friction in the model. Borders has seen too much change in three years, in our view,%26quot; Mr. Schick wrote in a note to clients.

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'Foodies' Defined and Desirable

Posted on Jan. 6, 2009 at 8:37 PM - 0 Comments - Post Comment - Link

By Tom Ryan

According to a study from Packaged Facts (PF), %26quot;foodies%26quot; represent 14.4 percent of the U.S. population and are early adopters/influencers of not only food but other cultural trends such as shopping, fashion, nutriment and cars.

%26quot;Some foodies don't think of themselves as trendy, but overall they are open-minded, curious, and eager to experiment with the new,%26quot; said Tatjana Meerman, publisher of PF, in a statement. %26quot;Research shows that they are significantly more likely than average adults to be the first among their friends to shop at new stores or try new styles.%26quot;

But food, according to PF, %26quot;defines who they are in a greater society. Their food passion provides a framework through which they can build relationships, fabricate new friendships, lay bare the earth, and even look into which behaviors are ethical.%26quot;

Versus gourmands, foodies are more into discovering new and preferably %26quot;authentic%26quot; foods and their associated cultures.

%26quot;Foodies enjoy high-end gourmet food, to be sure, but they also seek out hole-in-the-wall BBQ shacks, taco trucks and Chinatown markets. Foodies enjoy the thrill of the hunt and being the first to catch on to new food trends, and food outlets considered %26quot;authentic%26quot; carry the most prestige in the foodie world,%26quot; PF said.

In Foodies in the U.S.: Five Cohorts, PF defines foodies as adults who %26quot;agree a lot%26quot; with the statement: %26quot;I like to try new food products,%26quot; and also express an interest in either foreign, spicy, fresh, gourmet and or organic/natural foods. Within this foodie universe, PF identified five somewhat overlapping main subgroups (listed in order of size): Foreign/Spicy Foodies (71 percent), Restaurant Foodies (65 percent), Foodie Cooks, Foodie Gourmets, and Organic/Natural Foodies.

Other findings from the study:

Foodie culture is %26quot;an essentially American phenomenon%26quot; that has emerged in reaction to this country's %26quot;uniquely malleable and marketer-driven%26quot; food culture. While other nations/regions have distinct cultures surrounding food, the U.S. generally lacks such a culture.
Foodies are 16 percent more likely than U.S. adults on average to spend at the highest grocery level ($150 or more per week). Most consider dining out above the fast-food level a hobby - yet many frequent fast-food restaurants.
In marketing, foodies can be elusive because they don't like being labeled. Their focus on authenticity also %26quot;frequently equates to a degree of separation from big food conglomerates and corporate marketing campaigns.%26quot;
While early adopters/influencers, foodies are far more likely than adults on average to seek %26quot;expert guidance and reassurance from outside sources or peers in a number of areas.%26quot; They are also avid media consumers, unusually aware of food advertisements, and immersed in exchanging information over the internet.

Weis Price Freeze Creates a Buzz

Posted on Jan. 6, 2009 at 8:37 AM - 0 Comments - Post Comment - Link

By George Anderson

Weis Markets' recent announcement it was %26quot;freezing%26quot; prices on 2,400 items has brought it national attention with MSNBC and other media outlets highlighting the chain's move at a time when consumers are struggling with the effects of the recession.

David Hepfinger, who will be adding the CEO title to his duties as president of Weis Markets, said in press release, %26quot;While our weekly promotions offer our customers an excellent way to save money and reduce their costs, we wanted to go the extra mile by freezing and lowering the prices on thousands of our staple items, both brand name and store brand, over the long-term for 90 days.%26quot;

The 155-store supermarket chain plans to run the promotion through April 1.

Weis rival Giant Food doesn't plan on freezing its prices. Company spokesperson Tracy Pawelski told The York Dispatch, %26quot;We're going to keep doing what we always do and that is maximize value for our customers every day.%26quot;

Ms. Pawelski added, %26quot;The proof is at the shelf, where we compare our everyday prices with other grocers and show customers how much they can really save.%26quot;

Obama: A Foodie Figurehead?

Posted on Dec. 30, 2008 at 8:37 PM - 0 Comments - Post Comment - Link

By Tom Ryan

The pending inauguration of Barack Obama has many food advocates hoping he somehow leads a radical makeover of the way food is grown, sold and eaten in America, according to a recent article in The New York Times. By all accounts, the newspaper said, Mr. Obama %26quot;looks like the first foodie president since Thomas Jefferson.%26quot;

Of course, everyone has an agenda. Among the many causes, some are pushing for stronger food safety procedures, others for better treatment of farm animals, healthier public-school lunches, or less sodium-based diets for prisoners.

The problem is that although Mr. Obama has proposed changes in farm and rural policies and emphasizes the connection between diet and health, food policy overhauls haven't been a major part of his platform.

Still, foodies feel Mr. Obama %26quot;looks like their kind of president%26quot; if only because he possesses a %26quot;more sophisticated palate%26quot; than recent predecessors. They point to the fancy restaurants he frequents in Chicago; comments by his wife, Michelle, on the importance of organic food and a low-sodium diet for the family; and his past praise of Michael Pollan, the reform-minded food writer, among other things. But the article also points out that his ascendancy to presidency arrives as organic food has gone mainstream, cooking competitions are top-rated TV shows, and books calling for the drastic changes in the food system are best sellers.

%26quot;People are so interested in a massive change in food and agriculture that they are dining out on hope now. That is like the main ingredient,%26quot; said Eddie Gehman Kohan, a Los Angeles blogger who started Obamafoodorama.com.

Said David Kamp, the author of %26quot;The United States of Arugula,%26quot; on the modern gourmet-food movement, %26quot;This time we have a Democrat in office that seems to live the dream and speak the language of both food progressivism and personal fitness.%26quot;

Policy-wise, more practical food advocates recognize the economy will be the big focus for his administration. But they also hope food policies will change as he tackles issues such as climate change, energy and health care.

%26quot;If he's serious about doing this, then he'll have to address the current problems of our food system, which are inextricably linked to these other problems,%26quot; said Christina Schiavoni of World Hunger Year.

Some are at least hoping symbolism around healthy eating for the family arrives. For instance, Ruth Reichl, the editor of Gourmet magazine, hopes he appoints a prominent White House chef who cooks organic and local food, possibly from the presidential garden.

%26quot;What the president eats could have a major impact on everyone in the country,%26quot; Ms. Reichl told the Times. %26quot;It's like the hat manufacturers being furious because J. F. K. didn't wear a hat, and suddenly everyone in America stopped wearing hats,%26quot; she said. %26quot;It's that simple.%26quot;

Turning Points 2008: Small Format Stores

Posted on Dec. 30, 2008 at 8:37 PM - 0 Comments - Post Comment - Link

Commentary by Ron Margulis

Editor's note: In what we plan to make an annual end-of-year tradition, RetailWire has compiled a list of the most significant retail industry %26quot;Turning Points%26quot; of 2008. (See our news release...) What follows is the twelfth and last in a series of discussions based on the list.

Only a few years ago, any food store less than 40,000 square feet was considered a mom %26amp; pop grocery, not a real supermarket. The chains, and some independents, raced to build stores that rivaled even the 160,000 square foot scale of the Wal-Mart Supercenter. These mammoths carried every brand possible along with two and sometimes three private labels lines; charging past the 100,000 SKU mark.

During the last 18 months, the industry has experienced a sea change. Several new entries from foreign and domestic competitors are recreating the competitive landscape and, based on their success, the nation may soon see a more compact supermarket format as a viable competitor to the traditional big box.

Tesco's 12,000 to 15,000 square foot Fresh %26amp; Easy stores in California, Nevada and Arizona are among the progenitors of this new species of supermarket. The locations, nearly 100 have opened since Fall 2007, emphasize produce and prepared foods, and promote the Fresh %26amp; Easy private label throughout the store.

The appearance of Tesco's Fresh %26amp; Easy stores has prompted Wal-Mart, Safeway, Whole Foods and others to develop compact supermarket formats. Wal-Mart opened its Marketside grocery stores in Phoenix in October and Whole Foods is testing a small-store format in Boulder, Colo. Safeway opened a 15,000-square-foot store called %26quot;The Market%26quot; in a former Vons supermarket in Long Beach, Cal. in May after working on the format for more than a year. Like Fresh %26amp; Easy, the new store emphasizes fresh produce and prepared foods, but also features full-service meat and seafood counters and other developments borrowed from Safeway's larger-sized Lifestyle format.

While Fresh %26amp; Easy stores have captured many of the compact supermarket headlines over the past year, they weren't the first chain testing a compact supermarket. In 2003, then Alberston's-owned Jewel developed a prototype store in Chicago that featured prepared meals and other convenience food in departments like an oversized deli and a sushi counter. Now, Albertson's current owner, Supervalu, is testing a 16,000 square foot compact supermarket called Urban Fresh that will focus on ready-to-go meals, along with a selection of fresh meats, seafood and produce in Chicago's Lincoln Park section.

The compact supermarket still represents a tiny share of the U.S. grocery retail market, but observers note that it is the fastest growing segment in the industry. With the economy tanking, the time for a conveniently located store that allows shoppers to quickly buy the products they want may be here.

Secret Shopping Takes On a New Meaning

Posted on Dec. 30, 2008 at 8:37 PM - 0 Comments - Post Comment - Link

By Bernice Hurst, Managing Partner, Fine Food Network

Not long ago, Tesco was asked to use plain vans when delivering to wealthy customers reluctant to be seen buying from such a low-priced supermarket. Soon, it may be more expensive Ocado that can't be visible in certain neighborhoods. Customers with money to spend are now apparently shy about flaunting it.

Lisa Armstrong, writing in The Times in the U.K., maintains that conspicuous spending is being replaced by surreptitious spending among the few still willing and able to splash out on fancy labels. While conceding that there are fewer big spenders roaming the aisles, Ms. Armstrong also believes that %26quot;anyone hoping that the nation has undergone a Damascene conversion and will henceforth be donning hair shirts, planting mung beans and singing Lord We Have Sinned may be in for a long wait.%26quot;

Her theory, instead, is that shoppers are simply being more discreet. According to Ms. Armstrong, sales of high priced bottles of wine, classic jewelry, premium-priced small cars and even garter belts and stockings, %26quot;are proving remarkably robust%26quot;.%26quot;

Referring to personal style consultant, Annabel Hodin, she insists that %26quot;the mere fact that this species is not extinct is a sign of sorts%26quot; while re-defining customers as %26quot;Furtive Shoppers%26quot; who make many of their purchases online in order to avoid being seen.

Amongst those benefiting from this alleged trend are Matches, an %26quot;upmarket mini-chain of fashion boutiques,%26quot; and jeweler, Asprey. Shoppers are apparently making their decisions online but sending %26quot;assistants%26quot; to collect the goods so that they aren't seen.

Retailers have not been slow to understand and are doing what they can to help. Netaporter.com has switched to a %26quot;discreet brown parcel service instead of the lavish wrapping that was one of its hallmarks%26quot; while other well-known stores are offering the option of non-branded bags.

Which might raise a few eyebrows as we wonder if shoppers are truly economizing or simply sneaking famous label purchases into downscale or unlabeled bags. This could become a new witch hunt!

Wal-Mart Walks Away from PRISM

Posted on Dec. 29, 2008 at 8:38 PM - 0 Comments - Post Comment - Link

By Tom Ryan

While Wal-Mart supplied shopper data for the pilot, the retail giant will not participate in the expected launch next year of the P.R.I.S.M. national retail data syndication service from The Nielsen Co.

%26quot;Wal-Mart was pleased with the insights they gleaned from the PRISM pilot,%26quot; a statement from the Nielsen Co.'s In-Store division read, according to Promo Magazine. %26quot;However, they have decided not to participate in a national syndicated service, remaining consistent with their internal data-sharing policies.%26quot;

Nielsen added that Wal-Mart's decision not to subscribe to the service will not affect the launch of the in-store data service, and noted that 15 of the retailer members plan to take part when the data service rolls out. It added that Wal-Mart's decision was not a reflection on the quality of the shopper data produced in PRISM's pilot phase.

%26quot;Wal-Mart acknowledges the industry value of the national [P.R.I.S.M.] service and the quality of the service provided to those participating,%26quot; Nielsen said.

Product manufacturers including Procter %26amp; Gamble, Unilever and Kraft Foods have agreed to take part in the data service.

%26quot;We remain optimistic about the Nielsen In-Store measurement service and continue to support the vision of a common industry metric to measure consumer reach in-store,%26quot; said P%26amp;G associate marketing director Ann Mooney, in the statement.

P.R.I.S.M., the acronym for %26quot;Pioneering Research for an In-Store Metric%26quot;, examines point-of-purchase reach by department and links sales display impressions to sales conversions in an effort to help retailers and manufacturers make better merchandising decisions.

The service began in April 2007 to amass in-store data from 30 product makers and 16 retailers, including shopper traffic, POP, merchandising programs, retail TV networks, shelf- and cart-talkers and digital signs. The intent is to arrive at a measurement system that will permit a side-by-side comparison to other media advertising.

In an editorial on instoremarketer.org, Bill Schober, editorial director at In-Store Marketing Institute, wrote that while he wasn't shocked that Wal-Mart opted out of the national PRISM launch, he was a %26quot;little disappointed%26quot; that Wal-Mart would %26quot;just walk away from such a promising project.%26quot;

Mr. Schober noted that when Wal-Mart stopped providing POS data to syndicated market research firms in 2001, it launched Retail Link to share internal data with suppliers. He suspects a similar Wal-Mart program will eventually be launched around its in-store metrics.

Mr. Schober concluded, %26quot;P.R.I.S.M., meanwhile, will soldier on with all of the other original consortium retailers as well as a lot of blue-chip CPGs such as P%26amp;G, Kraft and Unilever. And we'll keep cheering for it from the sidelines, because as far as this magazine is concerned, P.R.I.S.M. represents the best methodology yet devised for reaching the ultimate goal, a practical in-store metric.%26quot;

Turning Points 2008: Shining Apple

Posted on Dec. 29, 2008 at 8:38 AM - 0 Comments - Post Comment - Link

By Tom Ryan

Editor's note: In what we plan to make an annual end-of-year tradition, RetailWire has compiled a list of the most significant retail industry %26quot;Turning Points%26quot; of 2008. (See our news release...) What follows is the eleventh in a series of discussions based on the list.

In a brutal year for any company attempting to grab a piece of the consumer's dollar, Apple's performance clearly stood out in 2008. Sales were up 27 percent in the fourth quarter ending Sept. 27, driven by strong Mac, iPod and iPhone demand. The company soared passed its goal of selling 10 million iPhones for the full year and annual profits reached the $1.14 billion mark.

Seemingly a perennial candidate for Brand of the Year, Apple's results were largely tied to many tenets that have proved to be the foundation of its success over the years:

Innovation: With upgraded hardware and software, the iPhone 3G became the fastest-selling cell phone in the U.S. by November. The major introduction was Apple's App Store, which includes thousands of downloadable applications for the iPhone and iPod Touch. Meanwhile, the unveiling of MacBook Air, the %26quot;world's thinnest notebook,%26quot; helped drive strong Mac as well as accessory sales. Buoyed by new features as well as the new Touch model, Apple also sold over 11 million iPods worldwide during its fourth fiscal quarter alone. According to some, the key to Apple's string of blockbusters is not only making products that meet consumers' desires, but making complex technology easy to use.

Price/Value Relationship: If you walk into an Apple Store, you might pay $45 for a connector cable that typically costs $5 elsewhere. But Apple's core products are well within reach of consumers. A 1-Gig iPod Shuffle costs $49 with each incremental price point containing loads more features. After launching its first iPhone for $599 in 2007, July's launch of iPhone 3G came in at a more accessible range of $199 or $299. Many industry watchers believe a $99 iPhone will arrive by the middle of next year.

Control of Distribution: Although Apple products are increasingly sold across retail, the Apple Store continues to mold the company's brand image and positioning. As opposed to other consumer electronics brands that must educate sales people who work for someone else, Apple can control their sales force and the messages that they learn to talk about. As a result, everyone tells the same story about their products. Tight distribution also keeps its products from being deeply discounted.

Marketing/Hype: The company has gained a lot of praise for its %26quot;Mac vs. PC%26quot; ads, but Apple's following has also stemmed from resilient word-of-mouth activity over the years. The expansion of Apple Stores created a place for face-to-face interactions with the most rabid fans to feed this momentum at the grassroots level. From the Genius Bars to special events hosted at Apple stores, this offers an invaluable marketing asset that few of their competitors can match. Also feeding Apple's hipness factor is their focus on coming up with aesthetically %26quot;cool%26quot; looking products.

Retailers Seeks National Tax-Free Holidays

Posted on Dec. 29, 2008 at 8:38 AM - 0 Comments - Post Comment - Link

By Tom Ryan

The National Retail Federation last week urged President-elect Barack Obama to incorporate three national tax-free shopping holidays in 2009 as part of his administration's overall economic stimulus legislation.

%26quot;The situation is critical,%26quot; the NRF wrote in a letter to Obama. %26quot;In October, consumer confidence was at its lowest level in the 41 years. We urge you to act quickly on legislation to help stimulate consumer spending as one of the first priorities of your new administration.%26quot;

The NRF proposes that tax holidays be held during March, July and October 2009, each lasting 10 days. The tax-free benefits - covering all taxable goods except tobacco and alcohol - are expected to save nearly $20 billion, or almost $175 per average family.

Unless stimulus to aid consumers is explored, the NRF warned that the retail recession will extend well into 2009.

%26quot;It does not appear that these concerns will abate any time soon,%26quot; the NRF said. %26quot;With consumer spending accounting for 70 percent of GDP, it is difficult to foresee an improvement in overall economic growth until consumers regain their footing. Retailers' considerable experience with sales tax holidays has shown that they provide a substantial inducement for people to shop.%26quot;

An NRF survey conducted when a national sales tax holiday was considered in 2001 found 82 percent of consumers favored a tax holiday, 83 percent would take advantage by making purchases, and 69 percent would make purchases they otherwise would not have made.

NRF also called for infrastructure investment in roads, rails, ports, public schools and renewable energy projects, saying it would have a %26quot;double benefit of creating jobs and repairing systems that are critical to commerce.%26quot;

Mike Englund, chief economist with Action Economics, told CNNMoney that stores typically see spending drop off a month before the event as people hold off on their purchases. This, in turn, %26quot;robs%26quot; spending from the surrounding months. %26quot;So the benefit to retailers may not be as much as expected.%26quot;

%26quot;From a policy standpoint, perhaps the most effective way to deal with the sales tax issue is to lower the tax rate rather than eliminate it altogether,%26quot; he said, adding that a lower rate would be an incentive to consumers to shop more while states would still get the revenue to invest in infrastructure development.

Retail Touchpoints: Mid-Season Report Card For the Holiday Season Shows Missed Opportunities

Posted on Dec. 23, 2008 at 8:45 PM - 0 Comments - Post Comment - Link

By Debbie Hauss

Through a special arrangement, presented here for discussion is an excerpt of a current article from the Retail TouchPoints website.

Consumers did flock to the stores on Black Friday 2008, but mostly to deep discounters and at those stores they were looking for unusually large markdowns. Those out shopping are looking for 70 percent off and higher - and in many cases the retailers responded...but at what cost?

"It is the year of the deal," says Brad Wolansky, vice president of global e-commerce for The Orvis Company. "Even merchants who traditionally aren't promotional (such as Orvis) must pay to play this year. Serving up the 'same old stuff' doesn't work, particularly on the web where customers can see the difference."

But industry experts have mixed opinions on the subject: "Deep discounts don't boost your brand, they just destroy your margin," says Nikki Baird from RSR Research.

Greg Buzek, president of IHL Services, has a different take: "Retailers that are not willing to heavily discount during this season are going to see dramatic drops in same store sales. Abercrombie discounted less than others and saw their overall sales for November drop 28 percent. Those that discounted might not have increased sales, but they were able to weather the storm a bit better."

Janet Sherlock, research director at AMR Research, noted that it has also been challenging for retailers to compete against the prices of competitors filing for bankruptcy and running GOB sales.

"While top-level revenue figures were adequate during the 2008 Thanksgiving weekend, profit contribution was likely poor for many retailers," said Ms. Sherlock. "Unfortunately, we then train the consumer to expect excessively low prices.?Next year, there will likely be fewer retailers."

Whether or not deep discounting is helping retailers this year or any year for that matter, retailers still must focus on garnering sales from their best customers not only during the holidays but all year long and from one year to the next. "Retailers really do very little to make their loyalty shoppers feel special," notes Ms. Baird. "How about a special gold member lounge complete with foot massage and hot chocolate? Or loyalty members only from 4-6am and 9-10pm?"

Mr. Buzek agrees. "I think most retailers are missing the boat on focusing on low margin sales only to drive traffic for (Black Friday) rather than building a longer term relationship that allows for outreach and 'special days' throughout the year. Retailers like Borders and Best Buy get it with their programs. I'm not sure of too many others that are taking advantage."

Turning Points 2008: Creating Store Transformation by Earning Trust

Posted on Dec. 23, 2008 at 8:45 AM - 0 Comments - Post Comment - Link

Commentary by Laura Davis-Taylor, Founder %26 Principal, Retail Media Consulting

Editor's note: In what we plan to make an annual end-of-year tradition, RetailWire has compiled a list of the most significant retail industry "Turning Points" of 2008. (See our news release...) What follows is the tenth in a series of discussions based on the list.

It was a banner year for in-store digital media (ISDM), as spending ramped up significantly and helped secure the "marketing at retail" opportunity as real. Wal-Mart also made big waves, as they announced the new evolution of their in-store network dubbed "the Wal-Mart Smart Network." But

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