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Retail Weekly News
8/6/2012

Week of 8/3/12

MNBBelow is the list of articles you will find for the week ending 8/3/12 edition of Retail Industry News. Thanks to MNB for this selection of articles.

  • Kroger Plans Small Format Store For Ohio Town
  • Coborn's To Open Five New Stores In North Dakota
  • Sansolo Speaks: Cold Cash
  • Sprouts Targets SF Bay Area For Expansion
  • Whole Foods Expands Its Reel Business
  • FastNewsBeat
  • The MNB Wal-Mart Watch
  • Executive Suite

Kroger Plans Small Format Store For Ohio Town

In Ohio, the Daily Standard reports that Kroger plans to open "a small concept store" in the town of Celina sometime early next year.

"We are in the process of determining how to bring the best value and the right store format to Celina," Kroger spokesman Keith Dailey tells the paper.

The store would be competing with a Walmart Supercenter across the street; Walmart used to operate a discount store in the location, but moved to larger digs in 2005, though it held the lease until last year and would not permit retail development until its rights lapsed.

Coborn's To Open Five New Stores In North Dakota

Minnesota-based Coborn's Inc. said last week that it plans to open five new stores in North Dakota by 2014, in the cities of Stanley, Tioga, Watford City, Dickinson and Minot.

The move is part of a broader move into the state. The Minneapolis /St. Paul Business Journal notes that Coborn's opened a store in Jamestown, ND, last May, and also has partnered with JK Foods to co-own three stores in what is described as "the oil-rich and fast-growing Bakken region of the state."

Sansolo Speaks: Cold Cash
by Michael Sansolo

Based on the e-mails coming to MorningNewsBeat, some of you don’t always agree with Kevin’s wide-ranging opinions. And today it’s my turn.

KC, this time I think you may have gotten it wrong.

In yesterday’s edition, Kevin reported on the government studying the speed at which cash seems to be going away. Then he commented: Hard to imagine going completely cashless, at least not in my lifetime, but at the very least I hope that the government asks the right questions and tries to get ahead of this curve, as opposed to the way it has handled the U.S. Postal Service.

My response to that is simple: Things change and like it or not, the world of money could be vastly different really fast and certainly in your lifetime - especially since we are about the same age and aren’t going anywhere fast.

There are a couple of ways to look at this. For any of you with a parent or grandparent who lived through the Great Depression you know that cash is or was their thing. Studies have shown that Boomers carry significantly less cash then their parents and are far more reliant on credit and debit cards. We obviously would be seeing all the fuss over transaction fees if the way we buy everything hadn’t migrated so rapidly from cash and checks to credit and debit.

Based on that, it’s easy to see how the next generation could take us to an entirely new place where cash is unnecessary. In fact, almost daily we see stories of digital payments taking over. Paying bills that way is old hat. Now, as was just announced in the area where I live, even parking meters no longer need coins or cards. Phones now work just fine.

A couple of months back, AARP magazine (and yes, neither the AARP nor a magazine seem the likely places to find cutting edge trends) ran a fabulous article about machines and objects that have disappeared, are disappearing or will soon disappear from our lives. Since I began my career armed with a rotary phone and an IBM typewriter, I was curious.

Among those items that are largely gone: televisions with tubes, phone books, deposit slips for banking, Rolodexes for our connections, incandescent bulbs that produce more heat than light and, of course, film. It’s really not that long ago that all of those items were necessities of life. Now we barely use any of them and we can’t imagine people under the age of 30 caring much about them, unless they are in the pursuit of nostalgia.

AARP went further, predicting which currently essential items are likely to soon vanish. Home phones topped the list, which makes sense especially to the generations growing up on mobile. No longer will an area code tell you where someone is located because the phone number will move with us forever. Stamps are becoming as passé as letters, which harkens back to Kevin’s comment about the USPS. When people aren’t sending letters or bills anymore, stamps are a waste and the Post Office seems increasingly useless. And while I like analog clocks, my life, like yours, is dominated by digital.

Some of AARP’s predictions may shock you. Gas pumps may become less prevalent as electric cars grow in number. Already we see recharging stations appearing and we’re only at the start of the electric era. Language barriers may fall away as technology enables instantaneous translation in much the way Star Trek imagined some 40 years back.

Most shocking of all - certainly to a group I recently addressed - toilet paper may be going, pardon the pun, down the drain. Ask anyone who has visited Japan in the past 10 years about the wonders of toilet seats that heat, wash and provide air-drying. I’ve had the experience and it’s incredibly cool. (To use the seat that is. The air, thankfully, is warm!)

Why does all this matter? Because what we know today is no guarantee of what we need to know tomorrow. What we consider essential today might be meaningless overnight.

The past teaches us tons about the future, but not everything. Not by a long shot.

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com. His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here.

Sprouts Targets SF Bay Area For Expansion

The Oakland Tribune reports that in the San Francisco Bay Area, "Sprouts Farmers Market is attempting to beef up its efforts though acquisitions of rival grocers Henry's Farmers Market and Sunflower Farmer's Market.

"Sprouts, with sales in the $2 billion range, has sites in Dublin, San Jose, Sunnyvale and Fremont, and will open additional stores in San Jose and Walnut Creek."

Shon Boney, Sprouts co-founder and CEO, tells the paper that "when the economy slowed down, that created a bunch of real estate vacancies. We were finally able to make an entry into the market. We created a base of stores that we could grow over time. The lifestyles in California really work well for us."

Boney defines the company's format this way: "We are somewhere in the middle between Whole Foods, Trader Joe's and the conventional supermarkets. Usually our customers are more of an everyday food customer, not the health foods supermarket customer. We do everything at a discounted price. Our produce is more of what you would find at a farmer's market, but we aggressively price our produce. Our vitamins are like you would find at Whole Foods."

Whole Foods Expands Its Reel Business

The Austin Business Journal reports that Whole Foods is partnering "with a digital entertainment distributor FilmBuff to increase the audience of its online film festival," which features what it calls "provocative films about food and environmental issues.

"The organic grocer’s Do Something Reel film festival will now be accessible on multiple platforms, including iTunes, YouTube and XBox 360."

The current film is entitled Grow! and is about 20 young sustainable farmers in Georgia.

FastNewsBeat

• The Virginian-Pilot reports that in the Hampton Roads market, Kroger "will cut prices, in some instances by more than half, on more than 10,000 items in its seven local supermarkets beginning today, an executive said Friday.

"That represents more than one-third of the 28,000 items in Kroger's grocery, drug and general merchandise sections, said Carl York, the advertising and public affairs manager for Kroger Mid-Atlantic. The discounts, he said, will cover popular items such as produce, peanut butter, eggs, laundry detergent and frozen pizza."

The initiative is limited for the moment to the Hampton Roads area, and is aimed at increasing Kroger's market share there.
• Amazon founder and CEO Jeff Bezos and his wife MacKenzie have donated $2.5 million to support a ballot measure in Washington State that would uphold a law legalizing same-sex marriage.

According to USA Today, "The donation from the Bezoses doubles the amount raised by the group supporting the ballot initiative. Microsoft founder Bill Gates and CEO Steve Ballmer have each donated $100,000 to the pro-Referendum 74 effort ... Bezos joins some prominent members of the financial world, all of them Republicans, in backing gay marriage. Paul Singer, the billionaire behind Elliott Management, recently contributed $150,000 to Freedom to Marry, which fights for gay marriage across the nation."
• The St. Louis Post Dispatch reports on the opening of a new Dierbergs supermarket there, designed to go head-to-head with a nearby Schnucks flagship store that is "equipped with a beer cave, cooled wine and cheese room, Kaldi's coffee shop and state-of the-art cooking school." At the new Dierberg's, customers "can hold a bridal shower, listen to live music, or get a nurse to look at their child's earache. They can participate in a wine-tasting with a celebrity chef via Skype, or sample a glass of Pinot noir as they push their cart through the aisles. They can sit down on a couch – then buy it."

Bloomberg reports that Valero "plans to sell or spin off its network of fuel stations, a business that may be worth as much as $5 billion." The move would create a separate chain of more than a thousand company-owned and branded gas stations in the U.S. and Canada, and is seen as a way of enhancing shareholder returns.

Time has the same story that a lot of other publications have run - that a number of big box retailers (including Walmart, Best Buy and Cabela's) "are realizing that the enormous, one-size-fits-all approach doesn’t work for all shoppers," and are coming up from smaller versions of their stores that not only will be attractive to more shoppers, but also that can fit into locations previously unavailable to them.

• In Wisconsin, the Journal-Sentinel reports that the first Walmart Neighborhood Market in Milwaukee opened yesterday on the city's west side.

According to the story, "The 39,900-square-foot store, south of W. Main St. and west of S. 70th St., is among a series of smaller format Walmart supermarkets that are opening in southeastern Wisconsin. Other locations include 3850 N. 124th St., Wauwatosa, which opened earlier this summer, and Menomonee Falls, where a store is under construction south of Main St. and east of Pilgrim Road."

• The Lakeland Ledger reports that Publix Supermarkets made $381.6 million during the second quarter, down 0.2 percent from the year before. Sales increased 3.2 percent annually to $6.8 billion, on same-store sales that were up 1.9 percent. "It was the first year-to-year profit decline for Publix since the first quarter of 2009," the Ledger writes.

• Costco reported July revenue that was 9 percent to $87.71 billion from $80.18 billion, on U.S. same-store sales that were up seven percent.

KnoxvilleBiz.com reports that Publix has opened its first Knoxville, Tennessee, store, a 56,000 square foot unit in the western part of the city that is seen by some as the harbinger of a shake-up of the local grocery market.

The MNB Wal-Mart Watch

• The San Diego Union-Tribune reports that Walmart has "unveiled its 100th California rooftop solar array Monday at a store on College Avenue in San Diego," which is seen as critical for the retailer as it pursues its ultimate goal of becoming "100 percent supplied by renewable energy."

Executive Suite

• Paula Price, Ahold USA executive vice president/CFO, has been recognized by the Boston Business Journal with the 2012 CFO of the Year Award in the public company category.