How strange would it be if everything we assumed to be true was false?
Very strange. Luckily, nothing to that extent is going on, yet those at a breakfast session of the FoodInstitute Midwinter Executive Conference earlier this month received a few surprises in the form of a quiz posed to the audience by Ed Kuehnle, president, Catalina Marketing Corp. The quiz was based on Catalina numbers derived from supermarket-only scanner and frequent-shopper data.
Ed asked members of the audience to call out answers to questions — questions that seemed almost too easy to consider. The quiz wasn't so easy, it turns out, since most guesses were well to the high side. Let's reprise the quiz here. (If you want to self-administer the quiz, the answers will be in parenthesis so you can cover them. The comments that follow the answers are mine. Don't blame Catalina.)
What percentage of shoppers account for 80% of the sales of typical CPG brands? (Answer: 3.5%.) So much for the 80-20 rule. This makes the value to retailers of coddling their best customers quite apparent.
What percentage of major-brand soft drink buyers remain loyal from one year to the next? (30%.) This probably correlates roughly with the extent of promotional activity.
What percentage of shoppers purchased at least one “green”item in the past year? (5%.) Well, this must indicate an opportunity gap of 95%.
Finally, the most unusual finding: What percentage of shoppers have bought all four HBC categories — toothpaste, deodorant, shampoo and vitamins — in the last six months? (1%. Catalina verified this as accurate.) Maybe this indicates the incidence of pantry loading, plus how these categories have drained from supermarkets.
Shifting to something else altogether, let's look at the strange nexus between former President Bill Clinton and food retailing. Clinton, in an effort to extricate himself from business arrangements that have any potential for causing trouble for his wife's bid for the White House, is unwinding himself from his long association with supermarket financier Ron Burkle, the principal of Yucaipa Cos. Clinton may end up $20 million richer because Burkle agreed to share with him proceeds of two investment pools if they reached certain income levels. Those levels were reached with last year's sales of Pathmark and Wild Oats Markets, both of which were partially owned by Burkle. Heads up for conspiracy theorists: Could this, plus Burkle's long support for Democrats, help explain the reticence of the Federal Trade Commission to permit the buyout of Wild Oats by Whole Foods? See Page 6. (The financial matters concerning Clinton and Burkle were first reported in the Wall Street Journal.)
NOT AT ALL STRANGE
Shifting again: The food distribution industry acquitted itself well in Fortune's annual list of the “100 best companies to work for.” The list was issued last week. Wegmans Food Markets scored an impressive No. 3 on the list.
Here are more supermarket-relevant companies that made the list: Nugget Markets at No. 12; Whole Foods Market, No. 16; Stew Leo-nard's, No. 26; S.C. Johnson & Son, No. 27; J.M. Smucker, No. 47; General Mills, No. 69; and Publix Super Markets, No. 91.