Shop Talk

Retailers, consumers and prices

Food sellers: I’m no Twit!

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grocerylist1Just when it seems like everyone is using Twitter, we learn that is not really the case. 

A panel discussion on Thursday at the CIES World Food Business Summit in New York featured four prominent industry leaders: Sara Lee CEO Brenda Barnes, Cargill CEO Greg Page, Kraft CEO Irene Rosenfeld and Jeff Noddle, executive chairman of grocery chain Supervalu. The conversation turned to how the panelists’ companies would stay relevant with the next generation of consumers.

Understanding Generation Y, whose oldest members are already in the work force, will be key to success in the future, said Noddle.  

Very broadly defined, Generation Y includes more than 70 million Americans born from 1977 to 2002.  

Gunn guns for gay marriage

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timgunn1Popular “Project Runway” mentor Tim Gunn has three words for California’s gay marriage advocates: “Make it work.”

And the urbane advisor — who won the hearts of audiences with his advice to aspiring fashion designers on the fashion design reality television show – put the emphasis on W-word.

House-made WHAT?

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tapwater“Sparkling or still?”
 
Remember when that question, asked with a certain downward gaze, would make you feel like a tactless tightwad for requesting tap? Did you try to lessen the shame with a smile and a clever nickname, like “I’ll have ‘New York’s Finest’”?
 
Restaurants and hotels across the country are blurring the lines between these choices, as they stop serving bottled water due to a perception that it is environmentally unfriendly. Critics object to the waste left behind by the plastic and glass bottles, as well as the fuel and other natural resources used to manufacture and ship the bottles all over the world.
 
“In the world of trying to live in a more green, sustainable environment, I think water is the most obvious, simple thing that we can do,” said Joseph Bastianich, a business partner of Mario Batali and co-owner of restaurants including Babbo, Lupa, Esca and Del Posto.
 
Bastianich told Reuters he is in the process of phasing out water across all his restaurants, following in the footsteps of other environmentally-conscious restaurants like Alice Waters’ Chez Panisse in Berkeley, California.
 
bottled-waterIn its place, Bastianich is installing filters made by Natura Water, which purify a restaurant’s tap water and allow users to get still, sparkling or room temperature tap water. The restaurants can adjust the amount of carbonation, allowing them to tout the water as made in-house.
 
The Natura system, which comes with reusable water bottles for serving, can be rented for about $400 a month. 
 
Company founder Marco De Plano, whose customers also include L.A.’s  Ciudad, San Francisco’s Foreign Cinema and certain Four Seasons hotels, said that with prices of high-end bottled water bubbling as high as $10, high-traffic locations can recoup their losses quickly.
 
“When we started this a year ago, everybody was talking about the green aspect,” De Plano said. 
 
Bastianich says a liter of Natura water costs him about 50 cents and sells for about $4. That profit margin is slimmer than before, when he would pay about 80 cents for a liter of premium bottled mineral water and sell it for up to $9. 
 
“We think the loss of margin is an investment that’s very worthwhile making,” Bastianich said. 

The sacrifice to margins would lessen as sales of house-made water increase.

As the backlash against bottled water heats up across the country a host of local governments have cut bottled water out of their budgets.  Virginia, Illinois and New York are among the states that have banned buying bottled water with state funds.

Security cameras can “see” a lot more these days…

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stoplift-sweethearting-retail-goodsSweethearting (v.) the act of a store employee giving a friend or family member free merchandise by pretending to scan items at the register or by ignoring items in shopping carts.

It is one of the oldest tricks in the book and a big problem for retailers. So big, in fact, that some estimates suggest that “sweethearting” and other types of employee theft account for almost half of all annual retail theft, or $19.5 billion out of $41.6 billion overall.

Chick-fil-A eyes California growth

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chickfila_spicysand_medium1Privately held Chick-fil-A has plans to open 50 new free-standing restaurants in California within the next five years — a move that would more than double its presence in the nation’s most populous state.

While most of the company’s 35 California restaurants now are located in suburbs or smaller cities, many of the new outlets are planned for Los Angeles and San Diego.

It’s deja vu at Arcandor, but this time the lifeline slipped

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arcandor-ceoIt’s deja vu at Arcandor. Five years ago, the company was still called KarstadtQuelle and it was on the brink of insolvency. It took a dramatic last-minute rescue to save the company. Today, it finally filed for insolvency.

In 2004, the company said part of the problem was that there were not enough customers at its department stores, or at least those that were there were not spending enough. And consumers were not ordering enough goods from its hefty mail-order catalogs, Quelle and Neckermann.

Wal-Mart on the move

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bentonvilledistributioncenterMoving goods quickly and efficiently is key to Wal-Mart’s low-price strategy. On Thursday, Reuters got a first-hand look at the discounter’s Bentonville, Arkansas, distribution center that serves as a prototype for any new general merchandise distribution centers the company will add.

“Logistics is the lifeblood of Wal-Mart,” said Kevin Jones, a Wal-Mart regional vice president, who underscored that several of the world’s biggest retailer’s chief executives, including Mike Duke, Lee Scott and David Glass, led logistics operations earlier in their careers.

Welcome to Wal-Mart country

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bentonvillewmtoneReuters is attending Wal-Mart’s annual meeting this week and will be sending news, tweets and images from the event via Shop Talk.

Our tour will include visits to the company’s distribution center, a Sam’s Club warehouse store and a Walmart supercenter.

Howard Schultz wakes up and smells the media

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 Perhaps he woke up one day and smelled his own coffee shops struggling in the weak economy. So, schultz2Starbucks Corp Chief Executive Howard Schultz is waking up to a fresh brew by percolating new business in the media world.

Starbucks has become the official naming sponsor of CNBC’s “Morning Joe” television show. The move is a throwback to the 1950s, when television programs were underwritten by manufacturers ranging from soap to cigarettes, and it comes as traditional advertising dollars are shrinking for publishers, television networks and other ad-reliant businesses. 

Target investors shoot down Ackman

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When an activist investor comes to town, it appears that Target security goes on high alert.

While Target had its shareholders, including hedge fund manager William Ackman, and the media fly to one of its yet-unfinished stores outside of Milwaukee to attend their annual meeting, it greeted them with a heavy security detail.

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