business news in context, analysis with attitude

Got the following note responding to last week's reference to a piece about Erewhon:

Erewhon Market was started by some hippies who came up with the name “nowhere” spelled backwards.   They had a good location and  developed a cult like following.   The first store in LA was on Beverly Blvd.  Tony Antoci bought the company and greatly improved the store then expanded it to where it is now.

When we worked on remodeling his first store I asked Toni how he came to buy Erewhon.  He told me he built and sold a successful food distribution company and was not working at the time.  He told me that one morning his young son came to him and asked him what he does and Tony said what do you mean?   His son told him that his friend’s dad goes to work (I cannot remember what work he said the son’s friend dad did for work).  Tony said he realized then that he had to do something different for his son’s sake.  To be a good example of what hard work is.  I was impressed at the time and I still am.

Years ago, my kids told me that when they were young, they were convinced that I was, in fact, an assassin.  I would leave for days, sometimes weeks at a time.  There was little concrete evidence that I was actually in many of the places that I said I was visiting, and they figured that my line of work had to be a cover story, since nobody could actually make a living doing what I do.

Just on principle, I've never denied the story.

We took note last week of a Business Insider report that "Costco has raised prices on two items in its beloved food court: the chicken bake and the 20-ounce soda … The chicken bake, a breaded dish filled with chicken, cheese, bacon, and a Caesar dressing, now sells for $3.99 — $1 more than in June. The soda price increased from $0.59 to $0.69, an increase of 10 cents or about 17%."

The story said that CEO Craig Jelinek has consistently said that the hot dog's $1.50 price tag will not change, and that he was once told by Costco founder Jim Sinegal, If you raise the [price of the] effing hot dog, I will kill you. Figure it out."

MNB reader Monte Stowell responded:

When I was still working for a large CPG company, I knew several fellow employees who were on the Costco team, and I remember them telling me about Jim Senegal’s reply to the big money guys in NYC about raising the price of a Costco Dog and a soft drink. They kept challenging Jim to raise the price of a Costco Dog and a soda above the $1.50. Jim’s reply was simple, “ if a customer spends several hundred dollars a year, I can certainly afford to sell them a hot dog and a soda for $1.50.” This is a great business lesson, keep the customer coming to spend their dollars in Costco. 

Another MNB reader responded by referencing another MNB story, about the importance of emotional intelligence when leading companies:

Interesting reading the Jim Sinegal quote, “If you raise the price of the effing hot dog, I will kill you.” after the Inc. recap on empathy and emotional intelligence.  Did he not care how his employees would feel?

I think Craig Jelinek could handle it.

Last week we reported on a Women's Wear Daily piece about how "CVS Pharmacy is getting into the prestige beauty game … launching a new format for merchandising skin care, dubbed the Skin Care Center. The space will feature an array of brands, from mass market giants CeraVe and La Roche-Posay to the channel’s newcomers, like Blume and Volition Beauty, both of which are entering mass for the first time. Wander Beauty, the prestige skin care and makeup brand, will also be participating."

One MNB reader responded:

This is interesting.  As a customer, how will I feel about a skin care consultant on staff/in-store when I can't find anyone at the front end, pharmacy hours are reduced due to staffing, and shelves are in horrific conditions?  Also, many of the CVS stores I see are not in "beauty-care" demographics.  I wish them luck, but suspect they have better places to focus dollars, time and energy.

Subway last week introduced a revamped menu, with 12 new sandwiches, promoting me to write:

Being a cynic, I have to wonder if Subway is actually using real meats in these sandwiches, as opposed to the fake tuna that some have accused it of using in the past.

Actually, it is interesting - best I can tell, tuna is not one of the ingredients in any of the new sandwiches.  Coincidence?  I think not.

One MNB reader responded:

I'd be a bit skeptical also due to the "fake tuna" debacle, but your skepticism I think is also due to you being a bit of a food snob.  Come on, admit it, you know it's true.  I love you anyway.