Grocery store chain fined for refrigerant leaks; ordered to cut greenhouse gases

BY Marianne Wilson

Trader Joe’s is cleaning up its act — with regards to the environment.

In a proposed settlement with the U.S. Department of Justice and the EPA, the chain agreed to spend $2 million over the next three years to reduce coolant leaks from refrigerator equipment at its 460 stores nationwide, and also to pay a $500,000 related civil penalty.

The federal agencies allege that Trader Joe’s violated the Clean Air Act by failing to promptly repair leaks of R-22, an ozone-depleting hydro-chlorofluorocarbon (HCFC) substance and powerful greenhouse gas that is used as a coolant in refrigerators. They also said the retailer did not keep adequate servicing records of its refrigeration equipment and did not provide information about its compliance record.

As part of the settlement, Trader Joe’s will implement a corporate refrigerant compliance management system to comply with federal regulations and to detect and repair leaks through a new quarterly leak monitoring program. It has agreed to achieve and maintain an annual corporate-wide average leak rate of 12.1% through 2019, below the supermarket industry average of 25%.

In addition, Trader Joe’s must use non-ozone depleting refrigerants at all new stores and major remodels’ and at least 15 of these stores must use advanced refrigerants, such as carbon dioxide. These advanced coolants have much less global warming potential compared to typical refrigerants.

Regulators said the settlement is expected to prevent the release of approximately 31,000 metric tons of carbon-equivalent greenhouse gases, which is equal to the amount generated by more than 6,500 cars each year.

Trader Joe’s did not admit liability in agreeing to settle the issue.

"Trader Joe's looks forward to working with the EPA in its mission to reduce air pollution and protect the ozone layer, and, with this agreement, has committed to reducing its emissions to a rate that matches the best of the industry,” the company stated in a release.

Trader Joe's is the third supermarket chain to face concerns about refrigerant leaks. Previous cases have been filed against Safeway and Costco Wholesale for similar leaks of ozone-depleting refrigerants.

For a story on detecting refrigerant leaks, click here.


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Q&A with It’Sugar’s Jeff Rubin: The King of Sweets

BY Marianne Wilson

Photo: Jeff Rubin, Founder, CEO, It’Sugar (Credit: Patrick Gray, Kabik Photo Group)

Jeff Rubin, founder and CEO of It’Sugar, has always had a sweet tooth — and a passion for retail. His father owned a chain of toy stores in the Midwest. After leaving the toy business, he went on to open a chain of bulk candy stores.

Rubin worked on Wall Street for a while before returning home to help run the candy chain. In 1994, he left to got out on his own. He’s been on an upward trajectory since.

Experts credit Rubin with breathing new life into the candy store format. He hit a home run first time at bat, with FAO Scheetz, a whimsical in-store candy shop he created for FAO Schwarz stores. Its success did not go unnoticed and other merchants sought him out, including Toys “R” Us.

In 2001, Rubin, in collaboration with Dylan Lauren (daughter of Ralph), co-founded Dylan’s Candy Bar, in Manhattan. With its candy-themed design, playful atmosphere and extensive selection, the store was a hit from day one, attracting tourists and New Yorkers alike.

[quote-from-article] Rubin left Dylan’s in 2005. On his own again, he opened the first It’Sugar store, in 2006, on the boardwalk in Atlantic City, N.J. Ten years later, It’Sugar is one of the country’s largest and fastest-growing specialty candy retailers, with 92 stores nationwide. It also does a brisk business in novelty items and gifts, and has its own branded line of apparel and accessories.


It’Sugar is not your average candy shop. The stores are colorful and over the top, and have a cheeky, irreverent edge that appeals to all ages. Along with all the familiar classics and retro faves, the merchandise mix includes a line of mega-sized candy and lots of exclusive private-label sweets, including such PG-naughty best-sellers as Gummy Bear Kegs and Schweddy Balls (part of a line the company developed with "Saturday Night Live").

The company even injects fun into its more serious ventures. The brand is working to boost students’ entrepreneurial skills through a partnership with Carver Middle School, in Delray Beach, Florida, whereby students learn all aspects of the candy-making business, creating a new candy that It’Sugar sells at its stores. A share of the profits go back to the school.

Chain Store Age editor Marianne Wilson spoke with Rubin about It’Sugar and its plans for the future.

FAO Schweetz. Dylan’s Candy Bar. It’Sugar. When did you get interested in candy?

My love of candy began at an early age. I would sell it during recess.

How is the overall candy market trending these days?

The market is moving towards the fantastic and the unique. Candy has become an experiential treat and with that, the more unique the product, packaging and the design, the more people love it.

What made you leave Dylan’s Candy Bar?

It was always my lifelong dream to create a really fun candy store where people could experience candy in a new way. Opening 100 stores in 10 years is something I never imagined could be done, but it's clear that the concept has resonated with people.

How has the IT’SUGAR concept evolved since the first store opened back in 2006?

It’s evolved to become a place where some of the biggest candy brands come to debut innovation. We developed the idea for oversized giant candy boxes with brands like Nerds, Sour Patch Kids, Airheads and even the gummy bear.

The TV show 'Saturday Night Live'came directly to IT’SUGAR to create skit inspired candy for their 40-year anniversary. And Sour Patch Kids chose to launch their single flavor and larger sized kids for the first time ever at IT’SUGAR stores and the list goes on.

How would you describe IT’SUGAR’s positioning?

Our competitive set does not necessarily include other sugar brands or candy stores and retail chains. Instead, it’s t stores that look to give their customers more than just a product, an experience. We are inspired by stores like Pink at Victoria’s Secret, Urban Outfitters, Bath & Bodyworks. Our ambitions and size are as big as they are.

Who is the target audience?

Our target audience is young adults, but we find that people of all ages enjoy our stores and unique products.

What do the stores look like?

Our stores are a feast for the eyes, lively and colorful. We create an experience for our customers. IT’SUGAR is a destination to come and stay awhile, not only are there thousands of candy options to choose from but hilarious novelty gifts.

About how many SKUs does IT’SUGAR carry? And what else do you sell besides candy?

We carry thousands of SKUs that reach beyond candy to include a range of novelty gifts, apparel and accessories. Brands such as Chupa Chupa, Airheads, Sour Patch Kids, among others have come to IT’SUGAR to launch apparel and accessory items.

What is the real estate strategy? Is there an ideal location?

Our store works in many formats from flagships that are 5,000-plus sq. ft. to smaller locations at travel rest stops. But while the concept really works anywhere, we focus on resorts and lifestyle centers.

How many stores in total will be open by the end of 2016?

We will hit 100 stores by the end of the year. All our stores in in the United States are company owned. We have a few international locations that are franchised.

How many stores do you expect to open next year?

We are continuing to expand at a fast rate and expect to open roughly 25 locations next year.

Do you also have a wholesale business?

We are selective with our partners, selling to a variety of businesses from small mom and pop stores to Nordstrom.

How has the growth of online shopping impacted IT’SUGAR? Or is candy immune to the lure of online?

We have a growing ecommerce business, but our in-store sales only continue to get better year over year. People appreciate the environment where they can come in with a few friends and have a laugh over funny packaging or share a treat together.

Our stores tend to be more of an impulse business and our website is more focused on gifting purchases. If you crave a chocolate bar you’re not going to wait for FedEx to bring it to your door.

Your stores carried some unusual items. What are some of the more fun ones?

Our branded box candy, such as “Dinglebearies,” which are chocolate-covered gummy bears, “Camel Balls,” our sour-filled bubble gum balls, and “Flinging Poo,” which are chocolate covered banana chip. And there is so much more.

What’s the single most expensive item at IT’SUGAR?

As we are known for our giants, we offer a 27-pound gummy bear that can be filled with even more gummy bears inside of its belly. The bear is 17” long, 10” wide, and 5.5” thick and retails for $179.99.

You’ve worked in retail your entire career. If you were just starting out, would you still go into retail?

Yes, retail is my passion. It’s still a dynamic industry that allows you to connect with customers. I love seeing the joy our stores bring to people.

Are you involved in the company’s day to day operations? And your wife also works in the business, right?

As the CEO and founder, I lead the day to day operations. My wife, Allison, leads our private-label business.

What kind of candy do you like best?

It is hard to pick just one, although I always favor the lonely, less popular yellow Starburst in the bin.


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Survey: How to compete against Amazon for holiday sales


Although Amazon poses a major holiday sales threat, there are steps retailers can take to produce a merry season.

According to a new survey of 1,500 U.S. consumers by marketing platform provider Signal, 42% of respondents said Amazon will be their primary holiday gift destination. Consumers who use Amazon do so because it is easy (50%), because they are Prime members (36%), and because they like the product reviews and recommendations (29%).

One finding that suggests there is room to compete against Amazon is that 40% of respondents said they primarily shop elsewhere for holiday gifts. Another result that gives Amazon competitors hope is that while the primary way holiday shoppers browse for gifts is on a desktop/laptop (36%), the most frequent way consumers purchase gifts is in-stores (33%).

About one in five consumers primarily browse via mobile devices (smartphones and tablets). However, only 8% use smartphones and 7% use tablets as their primary way to make holiday purchases.

More than four-in-10 (43%) respondents say that digital advertising on a website or in a mobile app somewhat influences their holiday gift buying. One-third of respondents said that ads help them get discounts or deals, and 27% said that ads provide them with new gift ideas. However, because 48% of people surveyed also said that digital ads are annoying, Signal advises retailers to always prioritize experience above all else when planning online advertising initiatives.

"The retail environment is a complicated battleground, with mega-competitors like Amazon and demanding consumers who want to shop when they want, how they want,” said Mike Sands, CEO, Signal. “But retailers don't have to be Amazon to succeed. Instead, they can use the wealth of knowledge available in first-party data to understand their customers better than anyone else, gaining the edge they need to design personalized experiences that will delight holiday shoppers.”


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