Costco called 1million-plus customers on peanut scare

Articles
January 28, 2009

Costco called 1million-plus customers on peanut scare

Nearly half of 87 member retailers operating more than 16,000 stores have frequent shopper programs. Of those, 37% alert shoppers about food recalls using contact information on hand, according to a 2008 Food Marketing Institute survey. Few if any go as far as Costco. The wholesale club called 1.5 million of its 54 million card-carrying members about peanut butter products as recently as last week, and more calls are planned, Craig Wilson, assistant vice president of food safety for the chain, told KOMO News in Seattle. Actually, Costco turned over a phone list of customers who bought specific item numbers to an outside firm, which can automate 500,000 calls per hour. The message they hear might go like this: “This is Costco food safety alert. Costco’s records have indicated you have purchased Clif Bars between July 1, 2008 and Jan. 20, 2009.” According to KOMO, Costco has followed similar procedure for the past 18 months, along with sending snail mail alerts.

Nearly half of 87 member retailers operating more than 16,000 stores have frequent shopper programs. Of those, 37% alert shoppers about food recalls using contact information on hand, according to a 2008 Food Marketing Institute survey.

Few if any go as far as Costco. The wholesale club called 1.5 million of its 54 million card-carrying members about peanut butter products as recently as last week, and more calls are planned, Craig Wilson, assistant vice president of food safety for the chain, told KOMO News in Seattle.

Actually, Costco turned over a phone list of customers who bought specific item numbers to an outside firm, which can automate 500,000 calls per hour. The message they hear might go like this: “This is Costco food safety alert. Costco’s records have indicated you have purchased Clif Bars between July 1, 2008 and Jan. 20, 2009.”

According to KOMO, Costco has followed similar procedure for the past 18 months, along with sending snail mail alerts.

Indeed, a message from Janet Shanks, Costco Canada’s vice president of fresh food, food service and food safety in the January-February 2009 issue of Costco Connection, urges that current member contact information be on file: “Recalls can occur for many reasons, including product safety and quality issues. Recalls can be national, provincial or warehouse specific….We want to contact our members as soon as possible if a recall becomes necessary….The process is much more efficient and effective with updated member information on file.”

By comparison, the Wegmans chain made more than 17,000 calls to frequent cardholders about potentially tainted ice cream one day last week, and nearly 3,000 calls about suspect peanut butter cup candy another day, a spokeswoman told MSNBC.com.

Such personalized warnings that come on such a large scale and at such a fast pace could help restore some consumer confidence in the food supply, believes SupermarketGuru.com. Of course, these efforts won’t help shoppers who gave false information, or none at all, upon sign-up and can’t be reached. Overall, we see these as good-faith demonstrations of calling technology that could go far in differentiating the chains that are willing to invest in customer health and in the relationships they hope will endure through tough times.