business news in context, analysis with attitude

Responding to our piece about the consumer desire for healthier, better tasting fast food, in which we cited Corner Bakery as one of the chains looking to exploit this trend, MNB user Dan Raftery of Prime Consulting sent us the following email:

“I've watched Corner Bakery experiment with a location in the dungeon area of O'Hare for about two years now. At first they ran the operation very much like a regular location, but the service was not fast enough for this group of transient consumers. They are now offering pre-packaged items from a front access case, just like all the other sandwich and salad vendors.

“The difference is of course the quality of their product versus competitors, which is how they were able to pull traffic into a bad location in the first place.

“Two observations/questions: How much impact does the first operating method have on the consumer's positive image of freshness? (I'll answer that one with a wager that it has a significant image impact.) Does this impact carry
over now that their offering looks essentially the same as competitors?”

We can answer that with a personal reaction. For a long time, there was a Starbucks inside the United terminal at O’Hare that made fresh sandwiches to go – you choose the bread, the meat, the cheese, and all the trimmings, and the price was always the same. While there was precious little creativity in putting together the sandwich, you got the feeling that it was fresh, and we almost always bought a sandwich there to eat on the plane.

Recently, however, they’ve been selling the same, pre-packaged sandwiches that everyone else sells at O’Hare – and we don’t buy sandwiches there anymore.

So our answer would be that the first approach cited by Dan Raftery has an enormous impact on perception, and that the image doesn’t carry over when a switch is made. At least, that’s our perception.

On this same subject of healthy fast food, we got an email from one MNB user that read:

“Just returned from vacation in France, where healthy fast food is pretty easy to find at good prices. Loads of little restaurants make killer sandwiches on bread from this morning, all packaged and ready to take away -- good ham, RED tomatoes, CRISP green lettuce (no brown wilty iceberg here), and cheese with actual flavor (as opposed to that orange stuff) for around EUR3.50 to EUR 4.00 -- $3.50 to $4.00 here -- certainly competitive with any fast food joint. Additionally, the deli departments of nearly any supermarket sell prepared dishes (couscous, stews, casseroles) to take home and heat up -- and they're *GOOD*. Even McDonald's gets in on the act -- their Salad Shakers are delicious -- definitely a lesson for the folks here. (And don't get me started on the killer paella from a street vendor, made with just enough rice to hold all the seafood together. Three of us ate all we could hold and still had leftovers, for less than one order of paella anywhere in Florida.)

“Bottom line is -- it's not that difficult, but the chains have to make the choice (e.g., Wendy's great salads, and Burger King's veggie burgers, which I liked).”

We agree that the most important element is real, long term commitment -- and that may be the most difficult ingredient to find.

Though we have to admit that while we love gastronomic adventures, we might have drawn the line at paella from a street vendor…

In response to our lack of understanding about the continuing appeal of the Kohl’s department store chain, we got the following email from MNB user Doug Gammage, senior director of market development at Watt International:

“In a recent visit to Fayetteville, Arkansas, I found within a half mile area a Dillard's, Target, Wal-Mart, Old Navy and Kohl's, each with a very specific demographic target, and in terms of fashion, little overlap.

“Over stored? Perhaps, but speaking as a consumer from Canada, where we have a more homogenous selection, I appreciate the opportunity when I visit the U.S. to find exactly the type of merchandise that meets my needs in each category. In retailing, democracy (i.e. consumer relevance) will determine survival. The better defined your brand and the better you are at communicating and maintaining the brand promise, the better your chances.

“ It is clear that Kohl's has found a niche that consumers are responding to.”

We absolutely agree.

Regarding Wednesday’s story about E. coli victims looking for some sort of compensation from ConAgra, MNB user Pat McCarthy wrote:

“More than likely, this type of lawsuit will become the rule rather than the exception. The beef industry most likely be forced to irradiate all ground meat in order to clear themselves of all potential liability. Even though they are mandated to put safe handling instructions on all packages, that doesn't prevent the consumer from not handling or cooking the product properly. As long as our courts and juries award ridiculous judgments against manufacturers for consumer ignorance( i.e.: recent tobacco judgments) the beef industry will be forced to go to ‘electronic pasteurization’ to protect themselves without regard for the increase in cost. Instead of 99-cent/lb ground beef in an ad, we will likely see $1.99/lb and like all price increases, gradually become accustomed to it.”

Responding to our story about the National Association of Convenience Stores (NACS) show and the apparent lack of nutritious foodservice options on its exhibit floor, we received the following email from MNB user Tom Stenzel, president & CEO of the United Fresh Fruit and Vegetable Association:

“C-stores will get there eventually with healthier convenient fresh fruits and veggies. Yeah, I'm biased, but there's a competitive advantage to the c-store that can offer and merchandise fresh-cut fruit cups, baby carrots and dip, etc. as snacking options. It's also good margin business if you can get it right. But. it's still plenty tough to get the cold chain and quality right, and move enough volume to account for the daily shrink. But, it's coming. Look at the early adopters to see how it's done.”

We wrote the other day about McDonald’s testing the idea of putting associates outside the store to help speed up traffic through the drive-through window. In response, we got this email from an MNB user Down Under:

“In Australia, McDonalds have developed what they call ‘Face-to-Face,’ which involves installing a second drive-thru window -- allowing someone to take your order & money, and then someone to pick & deliver your order. In some of the larger stores, they even have a third window -- allowing this person
to collect your money (the idea being the first person tells you the amount, you drive to the next window to get it ready & to pay). It has been years since I ordered through a microphone at McDonalds here.

“As another innovation, we now have a Macca's (that's Australian for Mickey D's) that have "fresh for you" -- a process where they make the burger as you order it. The system works well, and we noticed no delay --- in fact if anything, maybe an improvement in speed. I guess if you think about it, they have standard ingredients that get mixed & matched to make the burgers.”

Sounds like an improvement to us.
KC's View: