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October 22, 2014

Publishing News

Vegetarian Times and High Times Both Marking 40th Anniversaries
Vegetarian Times is marking its 40th anniversary with its November issue (shown). The issue "highlights where vegetarianism has been and where it’s going, says VT editor-in-chief Elizabeth Turner. “A timeline history of the magazine and its place in the larger veg movement will carry over into an expanded 40-page sponsored slideshow on We also feature vegetarian luminaries such as Jane Goodall, Mary McCartney, John Robbins, and Tal Ronnen sharing their thoughts on the people, places, and foodie finds that are shaping the future of vegetarianism.” VT also reports that its social media presence has grown tenfold since summer 2013, and that its Facebook fans reached 1M in May and are now at 1.24M...High Times is also marking its 40th, and Dwight Garner reviews the "coffee table book for low, sticky coffee tables" released for the occasion: "High Times: A 40-Year History of the World’s Most Infamous Magazine." Garner also opines that "with marijuana laws loosening in America, it’s easy to forget how radical an outrider of the counterculture this magazine was. Its editors were (and are) brave, subversive and funny. They’ve tended to take nothing seriously except for one crucial thing: the way so many lives have been destroyed by an inept and misguided war on drugs."

Hearst Hauls Out Celebs for Its Second MagFront Event
Yesterday, Hearst Magazines hosted its second annual MagFront event at the Hearst Tower in Manhattan. The chief editors of its 21 magazine brands previewed their biggest initiatives and "freshest content" for 2015 to an audience of media buying executives and senior brand marketers, reports Hearst's blog. In addition, the event included a live performance from Redbook’s December cover star, Idina Menzel, and appearances by Cosmopolitan's November cover star, Emily Ratajkowski; September Harper’s Bazaar cover star Emma Ferrer; and HGTV’s "Cousins Undercover" stars John Colaneri and Anthony Carrino. Dr. Mehmet Oz spoke about The Good Life magazine, and Ina Garten, who appears on Food Network Magazine’s November cover, stopped by with muffins for the crowd. Margot Robbie made a special appearance, and writer, director and occasional Esquire contributor Paul Feig gave the audience an exclusive preview of his upcoming film, "Spy," starring Jason Statham and Melissa McCarthy. Other celebs sent video messages, including Oprah Winfrey, Kaley Cuoco Sweeting, Dolly Parton and current cover stars including Ariana Grande (Marie Claire) and Eva Longoria (Good Housekeeping). 15 attendees won prizes that included a closet makeover with O, The Oprah Magazine’s Adam Glassman, a racing school experience from Car and Driver, and a shopping spree on

More Great Covers from 2014
Newsstand Pros' consultant Joe Berger adds to his "completely biased, unscientific" list of the best magazine covers thus far in 2014. Picks include covers from Essence, Harvard Business Review, New York, Louisiana Life, Outside, Rolling Stone, W, Bloomberg Businessweek, Wonderland, Marie Claire.

More on S&S, Amazon Deal
NY Post reports that the new agreement, which restores Simon & Shuster's ability to set prices on e-books, isn't likely to result in "rock-bottom prices," but include incentives for the publisher "to make some price concessions." Print books are still on a wholesale model, with Amazon buying the product and then setting its own prices for consumers. “I love both Simon & Schuster and Amazon, so I’m thrilled that war has been averted,” said Walter Isaacson, the best-selling Steve Jobs biographer, who just released his latest S&S book, "The Innovators.” “I think [S&S CEO] Carolyn Reidy and [Amazon CEO] Jeff Bezos should now be made peace envoys to the Middle East so they can save not just publishing but the world." PenguinRandomHouse, HarperCollins and Macmillan are all believed to be facing negotiations with Amazon on new deals in the months ahead.

Multiplatform Book Company Atavist Folds
Atavist Books, a multiplatform book company formed by media mogul Barry Diller, chairman of the IAC/InterActiveCorp, film producer Scott Rudin, and former Picador publisher Frances Coady in September 2012, will shutter at the end of the year. "While we are very proud of the quality of the titles produced by Atavist Books to date, we have identified that the market for highly innovative enhanced full length literary e-books still heavily relies on a print component and has yet to emerge," said a spokesperson for IAC.

Opinion: Digital Magazines Aren't Dead
Ryan Jones, co-founder and CEO of Pixbi, which recently launched a platform enabling interactive purchasing in digital magazines, argues that digital editions of consumer magazines are just getting started. "Digital magazines at the moment only represent a small portion of total magazine circulation, but their subscriber base doubled from 2012 to 2013 (AAM semiannual periodical snapshot report)," he writes. "Coincidentally, there is a rise in the number of digital magazines published each year, especially in international markets...As is to be expected with any emerging market, it takes several develop an earnest understanding of the underlying technologies...[and] digital magazines are far less static than traditional publications, given the devices they are viewed on...Unlike their print counterparts, these publications have to abide by the consumer uptake of a small subset of digital devices. A mere 3% of the U.S. population owned a tablet following the initial iPad release in 2010. In the first part of 2013 that number approached 34% (Pew). The barriers for digital magazine distribution are thus decreasing. At the same time digitizing platforms are broadening the scope of where digital magazines can be published, such as within websites and on smartphones." He also says that retailers are drifting away from the traditional catalog layout toward [digital] lookbooks, and that brands are starting to use digital publications to showcase new products to retailers. "The growth of business to business digital magazines is even greater than that of consumer-focused magazines," he says.


Retail News

Target Launches Free Shipping, Ups Ad Spend
In interviews with numerous media outlets, new Target CEO Brian Cornell revealed plans to offer universal free shipping for online holiday sales, the thrust of Target's upcoming advertising campaign, and other initiatives including interactive iPhone apps for kids, aggressive couponing on Target's Cartwheel app, and guaranteed price-matching from Nov. 1 through Christmas Eve. As for the security breach that affected up to 110 million customers whose credit card information was stolen last November and December, CEO Cornell suggests that data theft has become the new normal and not something about which shoppers are holding a grudge. "Talking to the Target guest, this is not top of mind," Cornell tells USA Today’s Hadley Malcolm in an far-reaching interview that includes video snippets. “I think this has become much more of an industry-wide issue.”
MediaPost Marketing Daily (round-up of coverage)
USA Today (interview with videos)

ACSI: Satisfaction with Food, Other Nondurable Goods Declining As Prices Rise
Rising prices are hurting customer satisfaction with everyday household items, according to the 2014 nondurables products report from the American Customer Satisfaction Index (ACSI). Customer satisfaction has deteriorates across all categories of household nondurables, including food, soft drinks and beer, cleaning products, athletic shoes and apparel. ACSI reports that food prices, which increased 4.5% in the last six months, more than twice the 1.9% increase in the Consumer Price Index, drove average customer satisfaction with food companies across major categories down 2.5% vs. a year ago, to an ACSI score of 79 on a 100-point scale. Nearly all food companies registered a drop in satisfaction, particularly the aggregate of smaller companies and store brands, which saw their ACSI decline 4%, to 77. With meat prices up nearly 13% in the past six months, food makers that emphasize meat products saw declines, including Hillshire Brands (-2%), ConAgra (-1%) and Tyson (-1%). Satisfaction with the largest cereal manufacturers is down as sales of breakfast cereal have fallen 5% over the past year. General Mills and PepsiCo's Quaker division each declined 2% to tie at 85, and Kellogg dropped 5%, to 81. Mars (+1% to 85) and Nestle (+2% to 85) were the only food companies to improve this year, but Hershey, unchanged at 86, maintains a slim lead over both. Perennial leader Heinz remained at the top with an 87 score. The soft drinks category slid 2.4% to 82, its lowest level since 2001. Dr Pepper Snapple dropped from the top (-5% to 82), leaving Coca-Cola and PepsiCo tied for the lead at 83, although they declined, as well. Smaller companies/store brands declined 2% to a collective score of 80, the bottom of the soft drinks category. As a whole, beer breweries fell 2.5% to 79, due to declines for the big brewers, although small ones gained 3% to lead the category with an aggregate score of 82. Customer satisfaction with shampoo, soap, toothpaste, detergents, and cleaning products slipped 1.2% to an aggregate 82. Clorox was the only large brand to see a gain, leading the field at 85. Colgate-Palmolive and Procter & Gamble dipped slightly to 83 and 82, respectively. Dial dropped 4% to below the average at 81, while Unilever fell 6% to last place, at 80.

Instacart Adds Another Chain to Chicagoland Coverage
Instacart, the online service that delivers groceries from local stores, has added Sunset Foods to serve more customers in the northern suburbs as part of its rapid Chicago-area expansion. Instacart hires independent personal shoppers who use their own cars to make deliveries, sometimes in as little as an hour. Along with Instacart’s usual home delivery, which starts at $3.99, Sunset Foods shoppers can opt for curbside pickup at its stores for $1.99 per order. Those fees are well below the $10 online shopping and curbside pickup service Sunset Foods has been offering at three of its locations for a little over two years. Sunset will send Instacart a daily file of items and prices, so pricing should reflect the store’s pricing, according to Steve Erl, the retailer's e-commerce coordinator. Instacart currently has more than 300 shoppers in the Chicago area, delivering orders from chains including Costco, Jewel-Osco, Tony’s Fresh Market and Whole Foods. “We’ll need double the size of our shopping fleet in the next couple of months,” said Scott Holloway, Instacart’s Chicago city manager. “We’ll probably look at hiring anywhere from 50 to 100 a week in the entire Chicago area, at least, just to keep up with demand.” Sunset Foods stores in Highland Park, Lake Forest, Libertyville and Long Grove started Instacart service yesterday; its Northbrook store is set to join Oct. 28. Instacart had previously reached as far north as Winnetka in the Chicago market. It expanded into Hyde Park in August after seeing shoppers search for the service by zip code. Locations such as Oak Park could be on the list for expansion next, said Holloway. Founded in San Francisco in 2012, expanded into Chicago in September 2013. It is now in 15 U.S. cities. Along with service per delivery, it also has a $99 Instacart Express annual membership that wipes out delivery fees for two-hour deliveries over $35.

Hannaford Continues 'To Go' Rollout
Hannaford Bros. plans to add more stores to the eight already offering Hannnaford to Go Internet shopping, which allows shoppers to order online for pickup at stores. Launched at Hannaford’s Dover, N.H., store around three years ago, it's since added a second New Hampshire site (Goffstown), four sites in New York (Colonie, Guilderland, Niskayuna and Saratoga) and two Maine sites (Yarmouth and North Windham). The chain told SN that it will soon add the service to its Clifton Park, N.Y., and Nashua, N.H., stores, and that it's looking into adding the service in Exeter, N.H., among other stores. Hannaford, a division of Delhaize America, operates more than 180 stores in Maine, New Hampshire, Vermont, Massachusetts and New York.

Expert Predicts Click-and-Collect to Become Dominant N.A. Online Model; Indie Grocer Adopts C-and-C
Stewart Samuel, program director for the Vancouver-based IGD grocery insights provider, writes that click-and-collect grocery model is gaining traction across Europe and could become the dominant model for online grocery shopping in North America, due to its advantages over home delivery. Those include convenience for both consumers and retailers, access to wide product selections, and getting orders into consumers' hands faster...In related news, four-store chain Dash’s Market will soon become the first traditional grocer in Western New York to offer click-and-collect curb-side grocery pickup (home delivery will also be offered). Tops and Wegmans are also considering the concept. Dash’s says it's in the final stages of terms and pricing negotiation with Rosie App--a click-and-collect software company that provides the technology and teaches grocers how to implement the program and provide customized marketing--and plans to get started on the project early next year. “It’s only a matter of time before [the click-and-collect concept] becomes ubiquitous,” said Burt Flickinger III, managing director at Strategic Resource Group, adding that the first to introduce it in any market will draw new customers who normally shop elsewhere. Dash’s could increase its sales by up to 10%, he estimates, without having to expand its footprint. “Retailers usually break even with the service fee,” he said. “And if a customer values their time, at minimum wage, it’s usually cost effective. Shoppers will even wind up saving money.” While popular among busy parents as well as seniors and people with mobility issues, Flickinger predicts it will become very popular among current 16- to 25-year-olds for whom entering a store has never been a necessary part of the shopping experience. Article summarizes the growth of click-and-collect among larger retailers and e-tailers.

CPI Up 0.1% in September
The Consumer Price Index rose a seasonally adjusted 0.1% last month, even when food and energy are excluded (the core CPI), after a 0.2% decline in August. Energy prices fell 0.7% in September, the third straight decline. Prices for gasoline and electricity both fell. Food prices rose 0.3%, led by higher costs for meat and dairy products. The index for sugar and sweets rose 1.6% on the month, the largest jump in three years. Shelter costs, which rose 0.3% for the month, are up 3% from a year earlier. Housing costs account for almost a third of consumer expenditures. In addition, using Q3 data, labor officials estimated that the annual cost-of-living increase for Social Security and disability payments made to more than 63M Americans will be 1.7% for 2015.

8 of Top 10 Retailers Haven't Been Hacked This Decade (To Date)
Two of the 10 largest U.S. retailers by revenue (Home Depot and Target) have had recent customer data breaches. But according to data compiled by Bloomberg and and a database of breaches maintained by the Privacy Rights Clearinghouse, eight of the top 10 biggest U.S. public retailers haven't had a significant data breach in the current decade: Wal-Mart, CVS, Costco, Kroger, Amazon, Walgreen, Lowe's and Best Buy. (Not counting those instances when a few hundred customers were affected or a crook accessed a customer's account using a password stolen from another site.) As Bloomberg notes, that could change at any time, and just because a company hasn't announced a breach doesn't mean it hasn't been hacked. Large organizations have many points of ingress, and advanced attacks are difficult to detect. Still, the list "does reflect the fact that major retailers are really taking to heart the risks of security breaches and incorporating best practices into their operations and effectively mitigating some of these risks," said Reece Hirsch, partner with the Morgan, Lewis & Bockius law firm, who co-leads the privacy and cyber-security practice. "No organization is immune, particularly from a sophisticated attack, but organizations that take breach-response and data security seriously do see real benefits from those efforts."

Walgreen Faces Investor Pressure
An activist adviser for union pension funds is pressing Walgreen Co. to postpone seeking shareholder approval of a major takeover until directors investigate allegations raised by former CFO Wade Miquelon in a defamation lawsuit. CtW Investment Group, an arm of labor federation Change to Win, wants the pharmacy chain’s board to create a special committee to investigate the disappointing financial forecast that preceded Mr. Miquelon’s resignation as CFO, according to a letter sent Tuesday toJames Skinner , Walgreen’s board chairman, obtained by WSJ. “We are well aware of CtW’s continuing objection to our strategic partnership with Alliance Boots, which is nothing new,” Walgreen spokesman Michael Polzin said. Mr. Polzin said the company is working toward getting all required regulatory and shareholder approvals for the acquisition of the rest of Alliance Boots GmbH. The company, which bought a 45% stake in the European drugstore chain in 2012, still expects to complete the deal early next year. CtW Investment said it is advising union pension funds that own about 2.5 million Walgreen shares, or less than a 1% stake. Last month, the group called on Walgreen directors to give shareholders more details about its change in projected earnings and questioned the appointment of a new board member. Walgreen said it is considering the request.

EU Investigates Amazon's Tax Deal in Luxembourg
The EU’s European Commission executive arm is investigating a 2003 Luxembourg tax ruling approving how Amazon handles transactions among its entities. It is concerned that royalties the tax-free technology holding company charges the taxable operating unit are too high. “The Commission has concerns that the [tax] ruling could underestimate the taxable profits of Amazon EU Sàrl, and thereby grant an economic advantage to Amazon by allowing the group to pay less tax than other companies whose profits are allocated in line with market terms,” the agency said in announcing its investigation this month. Amazon said it has received no special treatment from Luxembourg. The parent company’s global effective tax rate was 31.8% last year. Amazon uses Luxembourg as a beachhead for its European operations and has a network of at least 10 Luxembourg units with about 1,000 employees in all.


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