Where the subject may be perishable
but the insight isn’t.

September 12, 2006 –
Perishable Pundit Overview:

Wal-Mart Distractions

Hannaford Looks To The Stars

Extortion By Government

Happy To Meat You

Wal-Mart Distractions

When Wal-Mart announced that it was going to retool its stores over the next two years to focus on six target groups — Hispanics, African Americans, “empty-nesters/boomers,” affluent, suburban and rural shoppers — it was popularly portrayed as an end to Wal-Mart’s cookie-cutter format.

Yet the whole thing is really a quandary. First, although the idea is to drive “customer relevancy”, it was also explained that the approach would require the change of only around 3,000 items out of over 200,000 items sold by a typical Wal-Mart Supercenter.

This indicates that without any such change, Wal-Mart believes it is already selling 197,000 items per store relevant to people in these various groups!

Besides, Wal-Mart has traditionally empowered store managers to buy items they judged would appeal to the local community and, on a corporate level, has made a big deal of its “Store of the Community”. Wal-Mart even went so far as to have individual stores with rabbinical supervision over the appropriate perishable areas.

It is not clear whether this new program will supersede the “Store of the Community” program or complement it, but in many ways it sounds like a step backward, trying to broad-brush the issue, rather than deal with differentiation of shopper base head on.

In fact, the six categories sound just a hint like the pronouncements of a market research program on steroids, not real-life retail.

Hispanics, for example, sound like a target audience, but it is harder to do a store that appeals to both impoverished Mexicans whom just crossed the border and affluent Cubans whose parents fled Castro in 1959 than it is to create a store that would appeal to either of those groups and their Anglo neighbors.

And look at the overlap between the categories. Surely a lot of people who are “empty nester/boomers” also would fit into “affluent” and “suburban”. It just doesn’t feel like a merchandising-driven revamp.

I've urged Wal-Mart with its big Mexican operation and its experience with Mexican American shoppers to consider launching a separate concept targeted toward Mexicans. That might work.

The “Store of the Community” is the perfect idea. What happens is that Wal-Mart has gotten a little remiss in execution, as I reported here. So the answer is a more vigorous and rigorous approach to implementation.

These six categories are not specific enough to make Wal-Mart the shopping venue of choice for these groups, and yet are just specific enough to turn off others in the community who don't fit the cookie cutter.

Wal-Mart’s low-price card is gold; all these things are distractions from the prime appeal.

Hannaford Looks To The Stars

Hannaford has launched an exceedingly ambitious program to rank the nutritional merit of almost the whole supermarket with a one-star, two-star or three-star system. It is a good, better, best program and, implicitly, leaves a lot of products at zero stars.

It will probably help a lot of people as it takes random information about products — this one has no trans-fat, this one has no saturated fat, this one has whole grains and this one has vitamin C  — and attempts to integrate the data into valuable information about food.

It is not easy to do, and one could find issues with the Hannaford program: most particularly a decision to evaluate all products based on consumption of 100 calories. Although I understand the logic of making everything comparable, I think an argument can be made that looking at customary serving sizes might more accurately reflect the nutritional impact of consuming any product.

How do different product categories rate in the stars? Here is some info from the Hannaford Guiding Stars Frequently Asked Questions page:

Q. How many foods were evaluated?
A. More than 27,000 have been scored to date.

Q. How many products in the store have received stars?
A. Approximately 23% of the 27,000 analyzed food products have one or more stars.

Q. How many foods in each section of the store get stars?
A. The percentages of foods with stars, by store section, are as follows:

• 94% of produce
• 55% of cereals
• 43% of seafood
• 24% of meat
• 18% of dairy
• 12% of soups
• 8% of deli
• 5% of bakery

Learn more about this pioneering program right here.

Extortion By Government

Price Chopper paid a $10,000 fine to make a lawsuit from the Attorney General of Vermont go away.

The gist of the matter was that the attorney general in what some of us affectionately call The People’s Republic of Vermont sued the Golub Corporation, the parent company of Price Chopper supermarkets alleging fraud because it advertised its fresh produce as “Farm Fresh”.

The basis of the lawsuit was that a publicity-hungry attorney general, who should be ashamed of himself for harassing honest businesses for no reason, decided that only produce that was delivered directly from Vermont farms to stores could be considered farm fresh.

This is obviously ridiculous. First, in many cases, produce from a New York or New Hampshire farm may actually be closer to a store than Vermont produce. Second, the fact that Price Chopper uses a distribution center tells us nothing about the actual freshness of product offered to a consumer. What if a retailer takes store delivery direct from a farmer once a week but Price Chopper gives daily deliveries from its distribution center?

Third, it is an advertising term, fluffery, with no specific meaning. There is zero evidence that any consumer was deceived or harmed in any way.

I understand why Price Chopper settled. Ten thousand dollars is less than what the lawyers would charge the first week they began working toward a trial. Still, I wish they hadn’t settled. Businesses have to stand up against this kind of extortion by government or it is bound to happen again and again.

Happy To Meat You

Apparently this human face on the pork-based luncheon meat has been manufactured and sold in the UK for well over a decade.

We wrote about Tesco opening up in America here and here. The British are always welcome, but, please, leave your lunch meat home.