Late & Great: Charles Hooley

The Wall Street Journal: “Bargain shoppers can thank Charles Hooley for the no-frills feel of more and more U.S. grocery stores … Groceries at his stores were unloaded from trucks as close as possible to the wooden shelves where they would be sold, and displayed in their shipping cases. At Cub Foods, which he and three partners founded in Minnesota in 1968, Mr. Hooley and his family dispensed with price tags on each item. (This was before bar codes.)”

“Instead, Cub gave shoppers black grease pencils to carry with them through the store. They read the price for a can of soup or box of cereal off its shipping case, then scrawled it on the item themselves. Checkout clerks tallied up a total from the prices a shoppers had written on their groceries. Fewer workers to individually price and stock Cub’s shelves meant lower prices overall.”

“In 1980, Mr. Hooley and his partners sold Cub Foods—an acronym for Consumers United for Buying—to Supervalu, which expanded Cub to more than 100 stores in 13 states. Mr. Hooley remained at Supervalu as Cub’s president until 1981.”

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Kicks: How Sneakers Sneaked Up

The Wall Street Journal: “How on earth have people who make freaking footwear apparently managed to reduce athletic powerhouses like USC and Louisville to the role of glorified money launderers? It all comes down to the outsize importance of sneakers in popular culture. In his expansive, thorough and entertaining book ‘Kicks: The Great American Story of Sneakers,’ author Nicholas Smith traces the history of this $20 billion industry, arguing that the power and allure of the shoe have shaped American business and fashion for decades.”

“Their manufacturers have thus become economic forces larger than the sports they’re supposedly there to support. In many ways, to hear Mr. Smith tell it, the shoes have been wearing us.’Kicks’ serves as a comprehensive look at how much the sneaker became a signature indicator of cool, from Chuck Taylor and his Converse All-Stars to Clyde Frazier’s Pumas to Run-DMC and their Adidas to, of course, Michael Jordan.”

“Today, the author suggests, sneakers have essentially replaced music as the go-to investment for companies looking at getting into the youth market. They have become so popular that most manufacturers make limited-edition shoes that exist solely to become valuable and are almost never worn. The shoes aren’t for wearing; they’re simply for having.”

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How Jewelry Rattles The Millennial Market

The Wall Street Journal: “Jewelers are following fashion’s playbook for romancing millennials who are left cold by traditional, museum-like high-end boutiques. Brands are pulling out all the stops, designing products that customers can personalize and flaunting their ethical sourcing and sustainability. They are making online and in-store shopping distinctive and are hosting pop-up shops with limited-edition items.”

“The challenge is twofold: designing pieces that appeal to young shoppers and then persuading them to buy jewelry for themselves any time—and not just as the occasional milestone gift. Many millennials reserve splurging for technology or vacations—not fancy jewelry … When millennials do buy jewelry, they often seek out eclectic pieces from Gucci and other trendy brands. They also favor artisanal jewelry from small or new brands.”

“Diamond giant De Beers added nightclub touches to its sleek new Libert’aime by Forevermark store in Shanghai. The shop, which opened last month, has a scented VIP lounge for big-ticket purchases and a “diamond bar” with jewelry meant to be worn every day. One wall features an enormous detail of a diamond, where browsers can take Instagram-friendly selfies surrounded by gleaming facets. The jewelry in the shop is ‘designed to appeal to the 420 million millennials in China,’ the company said.”

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Kanye Tests Bite-Sized Music

The Wall Street Journal: “Kanye West is betting that good things can come from small packages. The 41-year-old rapper has produced five albums, each with seven tracks, many under three minutes. Released on consecutive Fridays, mostly by his record label, G.O.O.D. Music, and its partner Def Jam Recordings, the minialbums are making waves in a music industry where bigger has increasingly been seen as better … G.O.O.D. Music’s experiment is the latest instance of labels and artists tinkering with release strategies in the streaming age. Streaming is now the most popular way Americans listen to music. As listening habits change, record executives and musicians are trying to figure out how to reach fans and distinguish their releases in an increasingly crowded market.”

“Similar to how Mr. West’s provocative tweets and interviews in recent months helped him break through the clutter of social media ahead of his new releases, his seven-track albums are generating buzz for G.O.O.D. Music, music-industry experts say … It’s too soon to tell if shorter albums will trump longer ones in the streaming world … Bite-sized LPs may go down smoother for music fans inundated each week not just with music, but movies, videogames and social-media.”

“Mr. West hasn’t detailed his strategy, but he hints at the idea of shorter tracks on 4th Dimension, a 2½-minute song on Kids See Ghosts. The track samples Someday, by gospel singer Shirley Ann Lee, which includes the lines ‘you only want 2½ minutes if you can get it…three minutes maximum’ and ‘when it get too many then they can’t remember it and then they lose interest’.”

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How Moosejaw & Walmart Make Music

The Wall Street Journal: “Walmart is betting that even under its umbrella, Moosejaw and other brands like the feminist-leaning ModCloth and men’s fashion clothier Bonobos can remain convincingly hipster. But Walmart has such a distinct culture; will it be able to maintain an appropriate distance or will executives from Bentonville swoop in, forcing everyone to wear those iconic blue big-box vests? … Some suppliers of high-end gear abandoned Moosejaw’s shelves to avoid doing business with its new parent.”

Yet: “Moosejaw’s loyalist shoppers appear unfazed. While there have been reports of social-media backlash against Walmart ownership of firms like ModCloth, Walmart’s overall e-commerce sales have picked up … Moosejaw will soon have a rolling pop-up store pulled across the U.S. by a semi truck—another innovation private-equity backers may not have sponsored. With access to Walmart’s shipping rates, Moosejaw.com offers free two-day shipping, which is increasingly expected by online shoppers.”

“Then there is the beer cooler. Much has been made of alcohol policies at Walmart subsidiaries, and Moosejaw’s victory in this category is notable. Before the acquisition, Bentonville executives noticed a padlocked beer cooler at its Madison Heights, Mich., headquarters … Shortly after the deal … Chief Executive Doug McMillon concluded that because Moosejaw had responsible policies, the cooler could stay. At this month’s shareholder meeting Mr. McMillon gave analysts a glimpse of why he’s bending the rules. He carries a list with him of top retailers from decades gone by, a sobering list that includes struggling Kmart and Sears that reminds him of the fleeting nature of success. Yesterday’s retail kings die ‘because they don’t change,’ he said.”

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Ikea Future: (Not) Plastics!

Fast Company: “By 2020, if you order ‘Nordic fruit water’ with your vegetarian meatballs at one of Ikea’s in-store restaurants, you’ll no longer be able to drink it with a plastic straw. The company will stop using single-use plastic including straws, cutlery, and drink stirrers in its cafes … It will also remove single-use plastic products, like garbage bags and 200-packs of straws, from the shelves of the store.”

“It’s a small part of the company’s sustainability strategy. Ikea is already planning to phase out virgin oil-based plastic in its products, moving to either plastic made from renewable materials or recycled plastic. It was the first major retailer to stop using plastic bags, in 2007. It invested in a plastic recycling plant in 2017 to help with that goal.”

Sander Defruyt, who leads the New Plastics Economy initiative at the Ellen MacArthur Foundation, comments: “I think the approach of Ikea is interesting in that they take a full-systems perspective. They recognize the need to eliminate some of the most problematic or unnecessary plastics where possible, and at the same time, also make sure that they decouple the plastics they do use from virgin fossil fuel plastics by using recycled plastic as much as possible and for the remainder switch to renewables. It’s a nuanced and quite comprehensive strategy.”

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Meatless Meat Stampedes Grocery Stores

The Wall Street Journal: “For thousands of years, meat came from slaughtered animals, and milk was squeezed from cows. Tech-style disruptions are now upending supermarket meat cases and turning the stomach of cattle ranchers … dismayed to find the meat replacements sold next to the real thing. High-tech startups are building burgers from plant proteins and compounds that grill and taste more like the real thing than old-fashioned veggie burgers. Other firms are using cell-culture technology to grow animal muscle tissue—otherwise known as meat—in stainless steel bioreactor tanks, similar to the fermentors used to brew beer.”

“The U.S. Cattlemen’s Association has petitioned the Agriculture Department to bar plant-based products from bearing labels that say ‘beef’ or ‘meat,’ with similar restrictions on meat grown from animal cells … Stakes are high for the roughly $200 billion U.S. meat market. Sales of alternative meat products account for less than 1% of fresh meat sales in the U.S. but are growing at an annual rate of 24.5%, according to Nielsen Total Food View.”

“To get better exposure, Beyond Meat requires that retailers carry its products in the grocery meat section, rather than the frozen foods case—what Mr. Brown called the ‘penalty box.’ Alison Pham, 22, of Bokeelia, Fla., is a vegan who sees the realistic looking Beyond Meat patties as a way to get her father to try a plant-based diet. She reaches for the package in the same meat-filled cases she long avoided.”

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eMacy’s Rises, While eSears Sinks

The Wall Street Journal: “Among a crop of five retailers analyzed by Edison Trends, including Sears, Kmart, Kohl’s, Macy’s, and J.C. Penney, Macy’s has seen the strongest online growth in 2018, climbing 28% in monthly order volume since January. Meanwhile, Sears’s online order volume fell 25% from January to May. Penney looks only marginally better than Sears. Though it, too, operated a big catalog business, Penney failed to make the necessary digital investments to stay ahead.”

“As Sears shutters stores—it announced another 60 closures last month—e-commerce could have been the company’s future. Instead it has fallen far behind traditional retailers, and is way, way behind its big competitors, Walmart and Target . Maybe Sears should have stuck with the catalog.”

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ConAgra: Fresh in Frozen

The Wall Street Journal: “Last year, Conagra freshened up of three of its frozen brands: Healthy Choice, Marie Callender’s and Banquet. Healthy Choice, a diet brand launched in 1989, rolled out new microwavable meal bowls with trendy ingredients like edamame, kale and quinoa, and exotic flavors like Cuban pork and Korean beef. Banquet, a value-oriented brand with frozen basics like chicken fingers and meatloaf that typically sell for around $1 each, also got an upgrade, including Buffalo Chicken Mac ‘N Cheese bowls that sell for $2 or more.”

“The results have been clear. Comparable sales for Conagra’s refrigerated and frozen-food segment went from declining sharply last fiscal year to rising for three quarters in a row, reaching 2.6% growth in the quarter ended Feb. 25. Conagra Chief Executive Sean Connolly summed up his approach at a Goldman Sachs conference in May: ‘When you take legacy, well-known brands and bring modern elements into the food and packaging, you will have a winner’.”

“Consumers are shying away from carbohydrates and processed foods, preferring fresh meat and vegetables. But these take more effort to cook and can look less than fresh by the end of the week. For busy, health-conscious families, picking up proteins and vegetables from the freezer aisle makes sense. Perceptions of the health properties of frozen vegetables have also improved after studies showed they can retain nutrients better than vegetables that have sat for days in delivery trucks or grocery shelves.”

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Decibel Diet: Loud Music is Fattening

The New York Times: “Behavioral scientists who ran a series of lab studies and real-life field experiments found participants selected more unhealthful or calorie-laden items like red meat and cake when the ambient music was loud, and were more likely to choose healthful items when softer music was played in the background. The genre of music did not appear to influence the choices, the researchers said: They found the same effects whether the background music was classical; a mix of pop, rock, soul, R&B and alternative music; or heavy metal.”

Dipayan Biswas, a professor of business and of marketing at University of South Florida in Tampa and lead author of the paper, comments: “High-volume music is more exciting and makes you physically more excited, less inhibited and more likely to choose something indulgent. Low music makes us more relaxed and more mindful, and more likely to go for the things that are good for us in the long run.”

“Loud background music in a supermarket similarly nudged customers toward less healthful purchases, compared with softer music … Dr. Biswas, whose earlier research found that patrons are more likely to order healthful items when restaurants are brightly lit and more likely to indulge in dimly lit restaurants, said the findings can help consumers be aware of unconscious factors affecting their choices.”

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