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Period: May 15, 2014 to June 1, 2014
Comment & Opinion or Companies, Organizations or Consumers or Controversies & Disputes or Deals, M&A, JVs, Licensing or Earnings Release or Finance, Economics, Tax or Innovation & New Ideas or Legal, Legislation, Regulation, Policy or Market News or Marketing & Advertising or Other or People & Personalities or Press Release or Products & Brands or Research, Studies, Advice or Supply Chain or Trends

Panera’s New “Food Policy” Eliminates All Artificial Additives From Menu By 2016

St. Louis, Mo.-based Panera Bread – “on a mission to help fix a broken food system” – announced plans to completely eliminate artificial food additives from its menu by the end of 2016. Adopting a new “food policy” of providing only “clean foods” to its customers, the company said it will remove colors, flavors, sweeteners and preservatives over the next couple of years. The company has already cut trans fats from the menu and only serves meat products from animals raised without antibiotics.

"Panera to cut artificial additives from menu. ", MarketWatch/Bloomberg, June 03, 2014

Lawsuit Aims To Settle Big Question: Who Owns The Rights To “Stretch” Bread

The owner of a Syracuse, N.Y.-area restaurant has filed a lawsuit charging former employees with stealing the recipe/technique for a unique bread known as “stretch” bread. The owner of Pastabilities says the former employees violated a confidentiality agreement when they took the secret recipe to competitor eatery La Piazza. Whoever presides over the case will have to untangle a historical knot of personalities and events to settle the issue. But what the fight is about is fairly clear: stretch bread is a rich-tasting, crispy, chewy, flaky white bread with a thin crust that is “hands down, one of the most delicious creations to come out of Central New York since the salt potato”.

"Who invented stretch bread? The story behind the loaf at the center of the Pastabilities lawsuit", Syracuse.com, May 30, 2014

Move Over Ronald, Happy Is Here To Sell The McDonald’s Menu To Kids

Add another cute character to the list of marketing icons McDonald’s has used to get its unhealthful food message across to kids. At least that’s how the anti-McDonald’s community sees it. The fast-food giant recently introduced Happy, the new mascot of the child-focused Happy Meal. According to the director of the Value the Meal campaign at Corporate Responsibility International, Happy – basically a red Happy Meals box with a toothy grin, bug eyes, a golden arches hat and spindly legs – is the company’s latest effort to “market an unhealthy brand to kids”. The aging clown Ronald McDonald, meanwhile, is apparently getting a makeover so he’ll remain “modern and relevant”, according to a company spokesman.

"A New Mascot in Old Fight Over Fast Food and Kids", The Wall Street Journal, May 20, 2014

McDonald’s Stock Is Not For Fast-Buck Investors

McDonald’s is in the midst of a turnaround year, despite some much-publicized problems. The company’s stock is up seven percent so far in 2014 after a lackluster performance last year. One might wonder why: the company has posted six quarters of declining same-store sales in a row in the U.S. (though international sales rose 0.5 percent in the first quarter). Analysts say there is reason to be optimistic: an impressive dividend yield of 3.16 percent, for one thing, and a rock-solid position in the low-priced fast-food space. Lastly, the company’s sales per share continue to rise. That makes the stock “a defensive play in what may be an overheated stock market”. In other words, it’s a stock for conservative investors willing to stick around for a long, mostly low-risk, ride.

"Burgers beat burritos — McDonald’s snaps back", Marketwatch, May 16, 2014

Wholefoods Market Introduces Environment-Friendly Toothbrush

Retailer Wholefoods Market launched the Snap Toothbrush System, a manual toothbrush that comes with a pair of replaceable brush heads. Aside from offering consumers the opportunity to help reduce plastic waste by 93 percent, removing up to 30 million pounds of toothbrush plastic waste each year, the toothbrush offers better oral care and better value. According to Wholefoods Market, access to a new brush head can help the 60 percent of consumers who often forget to replace and tend to overuse their toothbrushes.

"Wholefoods Market Freshens up its Oral Care Line with Snap Toothbrush", AB Newswire, May 15, 2014

Companies, Organizations  

Wal-Mart Expands Online Price Matching Tool Across U.S.

Wal-Mart Stores Inc. said it plans to expand its Savings Catcher online price-matching tool to cities across the United States. Also, the world’s largest retailer plans to expand the product range covered by the online tool, including TVs, shirts, vegetables, and other produce. Also, Wal-Mart customers can now use Savings Catcher on the retailer’s mobile app. Wal-Mart’s move comes after the company’s U.S. discount division reported revenue declines for five consecutive quarters, and a drop in the number of shoppers for six quarters straight.

"Wal-Mart to expand online savings tool nationwide", Yahoo, June 05, 2014

Post-Breach Target Reorganizes Merchandising And Management

Retailer Target Corp. is reorganizing its merchandising and decision-making structures following the December 2013 data breach that involved the theft of credit-card data for 40 million customers. Interim CEO John Mulligan said the incident has prompted the company to renew its focus on serving shoppers. Changes being tried by Target include reorganizing its baby, electronics, toys, and clothing sections described by the retailer as having become “stale.” Mulligan also said the steps taken by the retailer are parts of its efforts to return to its roots of “upscale discounting.” Target lowered its earnings forecast for the current year from $3.90 a share to $3.60, projecting its adjusted earnings of 85 cents to $1 a share for the second quarter.

"Target Revamping Merchandising, Bureaucracy Post Breach", Bloomberg, May 31, 2014

Wal-Mart Appoints Broader As Walmart EMEA EVP, President, And CEO

Wal-Mart Stores, Inc. promoted Walmart Canada president and CEO Shelley Broader to executive vice president, president, and CEO of Walmart EMEA. Reporting directly to Walmart International president and CEO David Cheesewright, Broader will direct the retailer’s operations and business development in Europe, the Middle East, Sub-Saharan Africa, and Canada. Effective June 1, 2014, Broader’s appointment comes after joining Walmart Canada as chief merchandising officer in December 2010.

"Shelley Broader Named President And CEO Of Walmart EMEA Region", PR Newswire (CNW), May 30, 2014

Carrefour Hires KPMG To Sell Assets In India

French retailer Carrefour SA commissioned KPMG to lead the company’s efforts to sell its assets in India. Before hiring KPMG, Carrefour has been seeking potential buyers for its wholesale cash-and-carry business in the country. Carrefour India executives declined to state the company’s reasons for pulling out of the country, the sixth market the retailer would be leaving in the past couple of years. Sources revealed the retailer began the process of exiting the market following its failure to partner or sell its business to local conglomerate Bharti Enterprises. Also, the company reportedly lost its appetite for doing business in the country after the leaders of the eventually victorious political party BJP had made it clear that they would dismantle the country’s existing foreign direct investment rules.

"Carrefour ropes in KPMG to help it sell India assets", Economic Times, May 21, 2014

Unilever Executives Study Amazon's Proposed Drone Delivery Service

Unilever executives in India witnessed a demonstration by online retailer Amazon of its proposed delivery service using unmanned aerial vehicles or drones. During the videoconference, Amazon executives demonstrated the UAV-delivery service first described by Amazon CEO Jeff Bezos in his letter outlining the company’s Prime Air delivery service. According to a Bangalore-based Unilever executive, his company has no immediate plans to adopt the drone delivery concept proposed by Amazon.

"HUL executives check Amazon's drone delivery mode", Economic Times, May 20, 2014

Walgreens Likely To Acquire Boots The Chemist, Reports Say

Alliance Boots’ pharmacy chain Boots the Chemist is a potential takeover target of U.S.-based rival Walgreens in the next few months, according to UK media reports. Such reports followed news of U.S. pharmaceutical firm Pfizer’s plan to purchase UK drugs firm AstraZeneca, causing some labor and political leaders to express alarm over the ease with which companies from other countries, such as the U.S. and France, can acquire UK firms. In 2007, Boots became Alliance Boots after U.S. private equity firm Kohlberg Kravis Roberts and Italian billionaire Stefano Pessina bought into the company. In 2013, Walgreens acquired a 45 percent stake in Alliance Boots, with the option of buying the rest of the company starting in February 2015.

"Will Boots be snapped up by the Americans? High Street chemist could be taken over in months in £10.5billion deal", DailyMail, May 19, 2014

Target Appoints Peter Glusker SVP For New Business Integration And Operations

Retailer Target Corporation said it has appointed Peter Glusker as senior vice president in charge of new business integration and operations. Effective on May 19, 2014, Glusker’s appointment will see him manage the company’s integration of recent acquisitions and development of strategies aimed at ensuring a “consistent and great guest experience.” Glusker used to be Gilt Groupe’s vice chairman and CEO of the company’s Gilt Groupe Japan business unit.

"Target Names Peter Glusker Senior Vice President, New Business Integration and Operations", Target , May 16, 2014

Five U.S. Large Stores Push Online Retail Operations

In the United States, five large store brands plan to expand their online retail operations. With online orders accounting for almost half of its business, office supply retailer Staples plans to close around 225 stores by end of 2014 and will instead focus on online retail. Retail giant Wal-Mart’s online sales grew faster than Amazon’s for the first time in 2013. Consumer electronics brand Apple has become the country’s second-largest online retailer behind Amazon with its revenue of $18.3 billion in online sales. Electronics retailer Best Buy transformed itself into an “online first” retailer by implementing several initiatives, such as updating the company’s website, launching a loyalty program that works with the website, and starting the Athena big data project. Retailer Target hopes its online retail projects, which include a partnership with Google, will help it overcome negative consumer reactions to a recent data breach and an employee rant, which has gone viral on Gawker.

"Five big stores that are moving online", Marketplace.org, May 16, 2014

Lower-Income Consumers' Caution Hits Retailers' Revenues

Lower-income consumers are still reeling from the effects of the recent economic slowdown, adversely affecting the revenue performance of retailers serving this market. Walmart reported sales for the first quarter barely rose at 0.8 percent, while profit dropped 5 percent, compared with the same quarter in the previous year. Traffic in Walmart stores in the United States fell 1.4 percent although sales at its Neighborhood Market stores rose 5 percent and online sales jumped 27 percent during the period. In contrast, high-end retailer Nordstrom reported sales increased 6.8 percent during the quarter.

"Retailers Feel Economy's Effects on Their Shoppers", The New York Times, May 16, 2014

Amazon Invests Further In Warehouses, Distribution Centers

Amazon is expanding its network of warehouses and distribution centers in the United States to strengthen its reign as the country’s leader in online retail. Spending $13.9 billion on order-fulfillment infrastructure, which includes 50 new distribution centers, in 2010 to 2013, the online retail giant is eyeing further expansion moves and seeking ways to speed up deliveries of online orders, which include same-day deliveries, to online shoppers’ homes. Other initiatives launched by Amazon as part of its efforts to grab a bigger share of the overall retail market include the Prime Pantry service for members of its loyalty program and the AmazonFresh grocery business.

"Amazon's Warehouse Expansion Goes Unabated As A Means To Unchallenged Dominance", Forbes.com, May 16, 2014

Amazon Expands Sunday Delivery Service To Several Cities In The U.S.

Online retailer Amazon said it has expanded its Sunday delivery service to include 15 cities more in the United States. Coming six months after Amazon’s signing of a deal with the U.S. Postal Service to deliver products to customers in New York and Los Angeles on Sundays, the service will now become available for customers in other cities, including Houston, Philadelphia, and Indianapolis. Other initiatives recently launched by Amazon to expand sales include expansion of same-day delivery to more cities and the launch of a food and kitchen supply service for users of its Prime program.

"Amazon Expands Sunday Delivery to 15 More Cities", Mashable, May 08, 2014

Montreal Bagels Gain A Foothold In The Original Home Of The Donut-Shaped Delicacy

Not everyone is convinced that New York bagels are better than any others on the planet. Take Montrealers (and now some New Yorkers), for example. They like their bagels dense and chewy, unsliced, sweet and with larger holes. Both New York and Montreal bagels are boiled first, then baked, but the similarity ends there. The Montreal version is baked in wood-burning stoves, sweetened with honey and meant to be dipped in cream cheese, rather than sliced and smeared. Whichever is your favorite, denizens of both cities swear the difference in taste has to do with the water used for boiling, not the ingredients. But beware N.Y. City bagel bakeries: Montreal bagels are now imported from Canada into the Big Apple. And they are building a fan base.

"Bagel Wars: Montreal-Style vs. New York-Style Bagels", The Huffington Post, May 02, 2014

Mullins: Publix chief dishes up grocery gossip

The Tampa Tribune, June 01, 2014

Target aims to test same-day shipping

InternetRetailer.com, May 28, 2014

Wal-Mart Takes Another Hit on Sales

Wall Street Journal, May 15, 2014

Is Carrefour making a tactical retreat?

Business Standard, May 12, 2014

Costco kicks off European drive in Spain

Seattle Times, May 10, 2014

Why the Whole Foods panic is overdone

CNN Money Fortune, May 09, 2014

Whole Foods’ loss is your gain

MarketWatch, May 07, 2014

Earnings Release  

Wal-Mart Stores Reports Slight Net Sales Growth In 1Q FY 2014

Wal-Mart Stores, Inc. said consolidated net sales grew 0.8 percent to $114.2 billion in the first quarter ending April 30, 2014, compared with the same quarter of the previous year. Without the negative impact of about $1.6 billion from currency exchange rate, net sales would have risen 2.1 percent to $115.7 billion, according to the retailer. Total revenue increased 0.8 percent, or about $0.9 billion, to $115.0 billion, Wal-Mart also said. Consolidated net income contributed by Walmart declined 5 percent to $3.6 billion, with earnings per share from continuing operations linked to Walmart dropped 3.5 percent to $1.10, compared with the previous year.

"Walmart reports FY 15 Q1 EPS of $1.10; weather impacted EPS approximately $0.03", Walmart, May 15, 2014

Alliance Boots Says Revenue Grew 4.3 Percent In Year Ending March 31, 2014

Pharmaceutical retailer Alliance Boots said revenue grew 4.3 percent to £23.4 billion in the year ending March 31, 2014, compared with the previous year. With share of associates and joint ventures, revenue rose 4.3 percent to £25.7 billion, the company revealed. Trading profit increased 0.4 percent to £1.270 billion; with share of associates and joint ventures, profit rose 7.7 percent to £1.382 billion. Alliance Boots also revealed cash generated from operations reached £1.544 billion, while net borrowings declined £842 million to £5.051 billion.

"Alliance Boots Annual results for the year ended 31 March 2014", Alliance Boots, May 15, 2014

Innovation & New Ideas  

Panera Opens Test Bakery In Connecticut

The Panera Bread Company has established a test bakery that experiments with its current products and also tests product innovations and “staffing models”. Located in New Haven, Conn., the test bakery allows customers to watch baking staff as they work during the day. The company expects to roll out a new sprouted grain bread offering that was tested at the New Haven bakery. It will be sold at all Panera locations as a bagel flat beginning this month. The company will also roll out a staffing model system-wide that permits bakers to interact more with customers during the day.

"Panera Bread Reveals Test Bakery", News release, Panera Bread , May 13, 2014

Wisconsin Bakery Continues Tradition Of Product Innovation

An entrepreneur who fell in love with a single product produced by a Green Bay, Wis., bakery eventually bought the store in 1994. That single product made by Not By Bread Alone – sausage bread – is still made using the original recipe, but is offered in different forms, e.g., muffins and mini-muffins, snakes for Halloween, wreathes for Christmas, etc. The store has since expanded to accommodate café-style eating, offering a large variety of sandwiches, breads and other baked goods. The still popular sausage loaf, filled with sausage, mozzarella cheese, and seasonings, sells for $7.00 (small) or $12.00 (large).

"Not By Bread Alone's menu lives up to its name", Green Bay (Wis.) Press-Gazette, May 13, 2014

2014 Effie Awards

Effie.org, June 06, 2014

10 Mobile Trends for 2014 and Beyond

JWT Intelligence, May 13, 2014

Legal, Legislation, Regulation, Policy  

Bribery Scandal Forces Several Walmart Executives To Leave

Several senior Walmart executives either left or are expected to leave the company soon as a result of corruption scandals that hit the retailer’s international division. Included in the list of affected senior executives are former Walmart US chief administrative officer Thomas A. Mars and former general counsel at the company’s Mexican division and former CEO H. Lee Scott Jr. who announced plans to retire from the board of directors. An investigation published by The New York Times triggered external and internal inquiries into allegations of bribery against Walmart de Mexico, including a U.S. government’s probe into the company’s international operations.

"After Bribery Scandal, High-Level Departures at Walmart", The New York Times, June 05, 2014

Portland Removes Walmart From City's Investment Portfolio

After adopting a resolution in October 2013 keeping retailer Walmart from the city’s investment portfolio, the city council of Portland, Oregon, began divesting its Walmart holdings in April 2014. The first major city in the United States to stop investing in Walmart, Portland followed several European institutional investors which rejected the retailer due to its labor practices and alleged bribery of government officials in Mexico. Portland cited various grievances against Walmart as reasons for abandoning the retailer, including allegations of adverse impact on wages and employee benefits, as well as negative effects on local small and medium-sized businesses.

"The Walmart-Free City", The New Yorker, May 28, 2014

Market News  

UK's Big Retailers See Sales Declines; Tesco Loses 1 Million Weekly Customer Visits

UK’s leading supermarkets Tesco and Morrisons suffered sales declines in the 12-week period ending May 25, 2014, according to data from market research firm Kantar Worldpanel. Compared with year-ago figures, Tesco’s sales dropped 3.1 percent, while Morrisons’ sales declined 3.9 percent, according to Kantar. UK’s grocery market stood at its weakest state ever in the last 11 years, Kantar’s data also revealed. Tesco’s share of the market fell from 30.5 percent to 29 percent, while Morrisons saw its market share dropped from 11.6 percent to 10.9 percent. In contrast, discount retailers Aldi and Lidl reported sales grew 35.9 percent and 22.7 percent, respectively. Sales of Wal-Mart’s Asda unit grew 2.4 percent, making it the only big-four supermarket to register an increase. It also maintained its market share at 17.1 percent by cutting prices.

"One million fewer customer visits a week at Tesco", The Guardian, June 03, 2014

FedEx's Revised Rates Help Amazon Beat Smaller Online Retail Rivals

Shipping company FedEx’s plan to revise its shipping rates to charge based on the size of a package and not just its weight is likely to help Amazon.com in competing against smaller Internet retailers. Further demonstrating how Amazon.com’s size is helping it to expand its share of the online retail market, this development has also seen FedEx adding incentives for the online retail giant to keep using its service. With the huge volume of business it brings, Amazon is able to negotiate its own shipping rates with FedEx and other shipping companies. To deal with this FedEx move, online retailers are expected to use shipping boxes smaller than the ones they are currently using.

"FedEx’s Price Rise Is a Blessing in Disguise for Amazon", New York Times, May 09, 2014

Marks & Spencer: Magic or menopausal?

The Economist , June 24, 2014

Fridge ownership: Cool developments

The Economist, May 31, 2014

Walmart's India Challenge

Indiablooms, May 29, 2014

Marketing & Advertising  

Ulta Beauty Slows Expansion Pace; Focuses On Long-Term Strategies

Cosmetics company Ulta Beauty plans to open 100 stores in the United States in 2014 as part of its goal of having 1,200 stores across the country, according to company CEO Mary Dillon. Speaking at the meeting of the company’s shareholders, Dillon said the company expects same-store sales to grow 4–6 percent, lower than the previous year’s 7.9 percent. Ulta, which reported revenue grew 20 percent to $2.7 billion in 2013, said it plans to slow down its expansion as the company focuses more on long-term strategies, which include building its supply chain and improving its customer loyalty program. Since 2009, Ulta has acquired 90 brands, some of which are exclusive to the company, as well as added 83 high-end boutiques to its stores.

"Ulta eyes 100 new store openings this year amid slower expansion", Chicago Tribune , June 05, 2014

Is America Ready For Finland’s Version Of Rye Bread?

A Finn transplanted to Manhattan is single-handedly trying to change America’s bread-eating habits. Simo Kuusisto, former chef and owner of Nordic Breads bakery, sells his Finnish rye bread in an area famous for reubens and hot pastrami sandwiches made with, well, Jewish rye bread. Kuusisto’s ”rye-volution”, marketed with social media and personal showmanship, is based on two key facts: his bread, made without wheat or yeast, tastes really good and it’s all-natural. And the “coarse, dark, labor-intensively chewy rye bread” known as Ruis is gradually carving a niche in the city’s competitive artisan bread market. There are problems, of course. Because it contains no preservatives, it has a short shelf life. And a major challenge has been to convince customers that the bread is not supposed to be “soft like Wonder Bread or Italian bread,” Kuusisto says.

"The Finnish 'rye-volution' begins in New York, without wheat or yeast", theguardian.com, June 01, 2014

40% global retailers eye to enter India

Business Standard, June 03, 2014

Press Release  

Ahold Revamps Netherlands Head Office; Lets Go 130 Employees

Retailer Ahold announced it has reorganized its head office in the Netherlands. As part of the reorganization, which was implemented to enable management to focus more on the Albert Heijn business, the company ended Ahold Europe’s operations as a separate business division. Also, about 130 positions in the country were made redundant, part of the 210 jobs the company was planning to terminate.

"Ahold reorganizes its head office", Ahold , June 05, 2014

Target Appoints SVP For Media And Guest Engagement

Retailer Target Corp. appointed Kristi Argyilan as senior vice president of the company’s media and guest engagement. Effective June 2, 2014, Argyilan’s appointment will include responsibilities for managing and integrating the company’s media initiatives. She was the president of Magna Global, North America, for IPG Mediabrands, and also held senior management positions at Arnold, Hill Holiday, and other advertising and marketing agencies.

"Target Names Kristi Argyilan Senior Vice President, Media and Guest Engagement", Target, May 22, 2014

Asda Reveals Weak Sales Increase In 1Q 2014

Asda said like-for-like sales, excluding petrol, rose 0.1 percent in the quarter ending April 20, 2014, compared with the same quarter of the previous year. Asda CFO Alex Russo highlighted the retailer’s strong price position against rival retailers during the quarter. He also said the company has narrowed the gap with discounters and announced that its recently launched George Home range of products grew by double-digit rate. Russo also revealed Asda was able to retain leadership in the Grocery Home Shopping market, with its business in the segment growing 19.2 percent during the period.

"Asda reports strongest growth of the Big Four in first quarter 2014", Asda, May 15, 2014


Scent Marketing Plays A Growing Role In Attracting Customers

Though scent marketing is a complex science – it can attract customers but also irritate neighbors – it is all the rage among retail stores, high-end apartment buildings and hotels, even senior living facilities. A company benefiting from the trend is Scentair Technologies Inc., a large seller of scent diffusers. A spokesman says sweet smells like brown sugar and apple work well, but "cooked food" aromas smell inauthentic. Scent marketing especially benefits stores that naturally create enticing aromas. And they are doing whatever they can to enhance that advantage. Bakery chain Cinnabon puts its ovens near the front of stores to get the most from the aroma of warm cinnamon rolls. Panera Bread is reassigning its baking staff to day shifts so customers will smell the bread as it bakes.

"Using Scent as a Marketing Tool, Stores Hope It--and Shoppers--Will Linger", The Wall Street Journal, May 20, 2014

Celebrity Chef Goldman Unveils “Cake-In-A-Jar” To Satisfy Decadent Tastes

The idea of making meals in a jar – breakfasts, soups, salads, pasta dishes, etc. – has been floating around for awhile, and lots of recipes are available. Now a celebrity chef has dreamed up a meal-in-a-jar in the dessert category: layers of buttercream cake hand-packed into Mason jars. TV personality Duff Goldman’s Cake-In-A-Jar is shipped in 2-pack, 4-pack and 6-pack sizes with a personalized note from the chef himself. The cakes are available in four flavors, including vanilla topped with vanilla buttercream, confetti with vanilla buttercream, chocolate with chocolate buttercream and chocolate chips and marble with chocolate and vanilla buttercream. Six-packs range in price from $42 to $60.

"Duff Goldman Launches Cake-In-A-Jar At Duff's Cakemix In Los Angeles ", News release, Duff's Cakemix, April 29, 2014

Trendwatching: Retail Retold

Trendwatching.com, May 01, 2014

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