REAL ESTATE

Recalls Plague Retailers

BY Connie Robbins Gentry

Earlier this year, toys made in China were recalled because they contained lead. Toothpaste that contained some of the same chemicals found in antifreeze was also recalled. And some 450,000 potentially defective tires were recalled.

This was followed by a recall from Robert’s American Gourmet because two of its popular snack foods contained a seasoning made from imported ingredients that had been contaminated with salmonella bacteria.

Every week there appear to be more tainted products that put consumers at risk and retailer reputations on the line. In most instances, recalls are announced by the manufacturer, and consumers are responsible for returning or discarding the suspect products. Although identifying the source of a problem typically falls to the manufacturer, the retailer may find itself on the front line dealing with consumers. In the case of one of the most publicized recalls, which began in March, the Food and Drug Administration determined that certain pet foods were sickening and killing cats and dogs. The FDA identified contaminants in vegetable proteins that had been imported from China and used as ingredients in the pet foods.

Personal response: Retailers rarely take the initiative to contact their customers about recalls, but Wagger Pet Spa & Market, a single-store retailer in Sacramento, Calif., proved it could outrun the big dogs when it responded to the recent recall of pet food.

The 1,700-sq.-ft. store, which opened in January, combines three business services in a destination-retail concept that caters to pet owners who care about the wellness of their cats and dogs. In the Wagger marketplace, shoppers find an edited assortment of healthy products including holistic therapies, and organic foods and treats. It carries 2,346 SKUs.

On the services side, Wagger Pet Spa provides do-it-yourself bathing facilities with convenient waist-high tubs and temperature-controlled water for safe cleansings. The store also employs a pet stylist, an upscale alternative to traditional grooming services.

Its commitment to providing the best products and quality services in a healthy, spa-like setting made the recent pet-food recall even more disturbing for Deirdre Bourke and Erin Selvor, co-owners of Wagger Pet Spa & Market.

“We extensively research all of the products we carry and we select the highest possible formulation on all our pet foods,” explained Bourke. “Unfortunately, one pet food we had, the Natural Balance Venison, was involved in the recall because of the rice concentrate it contained. Venison is very hard to obtain, but it is the best option for certain dogs with allergies. When we made the decision to sell this product, rice was considered a natural additive.”

As soon as they became aware of the pet-food recall, Bourke and Selvor began identifying their customers who had purchased that particular SKU. The identification process was simplified because the store uses QuickBooks Point of Sale software from Intuit of Mountain View, Calif.

“Looking at our database, we were able to pull all the names of shoppers who had bought the product and we immediately called those who we had phone numbers for even before the recall was published in the media,” stated Bourke. “Although we had not carried the specific lot numbers that were recalled, we still pulled all the product and contacted people who had bought it in our store.”

For customers who did not have phone numbers in the database, Bourke said they were able to predict when they would likely return to the store and alerted employees to watch for them. When she spoke with Chain Store Age, Bourke reported they had successfully contacted all but one of the customers.

“The recall may have actually helped the growth of our business because it has made consumers more aware of the need for quality pet-food products,” said Bourke. “We had projected first-year sales at around $150,000, but we’re on track now to hit $250,000 this year.”

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Wal-Mart to Double Stores in China

BY CSA STAFF

Bentonville, Ark., Wal-Mart Stores plans to more than double its stores in China in the next five years to tap into the growing personal wealth of the country’s 1.3 billion people, according to a report by Bloomberg.

The expansion will help the company broaden its reach beyond its current 84 stores across 46 Chinese cities into smaller cities, where competition is less fierce, the report said. Wal-Mart expects the growth to help it garner 20% of China’s retail market.

Wal-Mart has opened 12 stores in mainland China so far this year, on track to beat 2006 openings of 15, the company said. The retailer sped up its expansion earlier this year by acquiring a 35% stake in China’s Trust-Mart. Wal-Mart said at the time that the move may lead to its taking ownership control of Trust-Mart’s more than 100 hypermarkets.

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GameStop Opens 1,000th International Location

BY CSA STAFF

Grapevine, Texas, Video game retailer GameStop announced Tuesday that over the past 30 days the company has opened new stores in Canada, Italy, Norway, Portugal, Spain and Sweden, placing its international store count over the 1,000 mark.

GameStop operates 4,816 stores worldwide, including its U.S. operations.

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