business news in context, analysis with attitude

Yesterday, we suggested that it might make sense for supermarket retailers to operate smaller stores in locations such as airports, where there could be high traffic counts and strong sales potential. (We were inspired by a story about Borders opening bookstores/cafes at Newark Airport in New Jersey.)

In response, MNB user Bill Duncan wrote:

“You mean something other than the run-of-the-mill, bland, boring, idea starved, magazine/giftshop/sundry stores featuring first week off the boat immigrant operators and tasteless stuff with the local name on it?

“ Yes, may be a ripe area for some creative merchandising. Whatever the concept, the guideline should be that it fits as well as the Borders idea does. That is such a great idea...there should be one of those units in every major terminal in every major airport in the country.”

And MNB user Michael Davis wrote:

“If you are looking for a retailer who offers the types of impulse items and quality food service offerings travelers are looking for, someone who can manage high traffic in a small footprint, I believe no one is better suited than a progressive convenience store or travel center operator like Sheetz, Wawa, Quick Chek, Couche-Tard, Pilot, Love's, etc.”

Specifically at Newark Airport, one MNB user had an ideal suggestion:

“ShopRite would be the perfect choice. Wakefern, the distribution arm of ShopRite Supermarkets is less than 1 mile away from Newark Airport. If you have a window seat, you can see the compound as you fly into the wild blue yonder.”.

And, MNB user Tom Ney wrote:

“It's not an off-the-wall idea in Europe, where people live to eat. This Summer I bought some fresh food in a supermarket on the lower level of one terminal building at the Frankfurt, Germany airport. When I travel in foreign countries, supermarkets are a tourist attraction to me. In Spain I observed 5 different cephalopods on ice at the fresh seafood counter of a neighborhood supermarket. Down the road at megastore Carrefour, I counted over 150 dried whole hams hanging from the ceiling. European shoppers demand fresh quality, good taste and old-time diversity. As Americans travel more to Spain, they might expect the same from their stores back home.

On the subject of Oregon’s defeat of proposed legislation mandating the labeling of products containing genetically modified organisms (GMOs), MNB user Jim Mathe wrote:

“I'm having trouble with all the controversy re: GMO's.

“When I was younger (too many years ago to mention), one of my neighbors grafted a pear limb into an apple tree. As time progressed, through cross-pollination and growth of the tree, we received a unique fruit we called a ‘pearapple.’ As this fruit matured, this could be planted and a new ‘pearapple’ tree started. In fact, you could start a ‘pearapple’ orchard.

“Now this product could be called a GMO but the process was done by grafting and took many years to accomplish.

“What's the difference between this and a scientist creating the same thing in a much shorter time span? What's the difference between a GMO and a hybrid? Isn't everything we get today a GMO in one form or another? I don't know if there's any corn grown today that would resemble the original corn (maize) that our forefathers got from the American Indians.

“If you really wanted to get technical, almost every breed of dog would have to be called a GMO, wouldn't they? Help me to understand what the real issue is!!!”

We think that perhaps the real issue is fear…but we have to admit that we’re not particularly concerned about GMOs in food. But there are those who suggest that we are naïve on this issue. And we’re not smart enough to say that they are wrong…we just trust the science on this issue. (If they end up being right, we’re sure going to be grateful for their vigilance.)

A friend asked us good questions the other day: Are seedless grapes genetically modified? How about seedless watermelon?

We suppose that they have to be modified in some way…and it hardly stops people from eating them.

On the subject of Kmart’s investigation into financial mismanagement by previous officers of the company, one MNB user wrote:

“Perhaps Kmart's corporate governance policies could be shored up by following the example of a high-profile U.S. company: General Electric. GE is expected to announce a new set of policies, including director compensation measures, aimed at establishing and strengthening their board with a majority of independent directors. These directors would be asked to visit and review GE businesses without corporate management looking over their shoulder and influencing their findings. Corporate leadership, to a great extent, has lost the benefit of the doubt in the U.S., as corporate scandals are popping up everywhere. Jack Welch may be able to get away with such lavish spending, but last time I checked, Kmart wasn't as successful as GE. Will they take the necessary actions to right the wrongs created with previous leadership? We'll see.”

Good question. And in general, we think that following GE’s example in most things is a good idea.

We reported yesterday about General Nutrition Centers instituting a new GNC Nutritional Supplements Bill of Rights for consumers. MNB user Jem Walsh, president of Nutritional Sciences, Inc., offered an opinion:

“GNC left out the most important right consumer have: to know their products are manufactured to specifications. Nutritional supplements are SO unregulated that customer cannot be sure the products they purchase are free of adulteration and include all the ingredients labeled on the bottle. I would be impressed with GNC if they had included this information, but alas they are too afraid of falling short in this area. Simply saying a customer has the right to a quality product does not make it so. An independent assay attached to the information would go a long way. So would a stamp of approval from

“They also talk about the rights to know how to get more from your diet. As a nutritionist in the pharmacy information industry, I can tell you with all confidence that if people ate properly, they would not need to buy a nutritional supplement. If GNC is successful with this right, they sound their own death knell. But, alas, it just won't happen. People would rather take the pills for insurance than take the time to eat properly. You mentioned in your comments that this industry is one in which people don't know what the hell they are taking and why. I have an answer regarding the latter. People take these products because they are looking for a magic bullet: a manner in which they can circumvent the responsibility they have toward their body. But the art of eating properly is more confusing than selecting a supplement.

“Customers selecting these products also have another right, one not considered by GNC. They have the right to know if any of these products interact with their pharmaceutical medications. It is alluded to in the second right regarding side effects, but this industry will never be accepted completely until this information is known, not only by the consumers, but also by their physicians and pharmacists.

“This Bill of Rights is great marketing, but also comes as a result of competition. Other retail companies in the supplement industry have been providing this info for years, particularly in the professional market (pharmacies, physicians, etc.) Losing market share stimulates emulation and, as GNC used to be a leader, they are now trying to catch up or rebound from a couple of lousy years. Good luck to them though and, if they are truly considerate of consumers with this new tact, we will all be better off.”

And, we got more email on the subject of Safeway’s management of the Dominick’s chain in Chicago:

“Safeway has taken a great store and ruined it. The Safeway label items are bad and all the prices have been raised much higher. For example, in a high end local chain, Sunset Foods, milk is $2.89 per gal every day and in Dominick’s it is $3.49. This high price policy is true throughout the store. RTE cereal is about 10% higher, soup 15%. For the past few years I have purchased nothing but sale items at Dominick’s and everything else at Sunset or Costco.

“It is no wonder they aren't making any money. People know when they are being ripped off.”

Tough words…but we’ve clearly hit a nerve with these stories and commentaries this week.

But in a larger sense, we hope a lot of companies that have been in the acquisition business are paying attention…because the sins that have been ascribed to Safeway can easily be found in a lot of other places as well…

And on that note, have a great weekend. We’ll see you Monday.
KC's View: