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    Published on: September 30, 2002


    • In preparation for an interview we were doing for our Japanese video documentary, we recently had reason to re-read Art Turock’s terrific book, Invent Business Opportunities No One Else Can Imagine.

      In this book, the Seattle-based Turock identifies the fatal assumptions that can ruin businesses, and seven “big ideas” that can enable companies to gain a sustainable advantage in the marketplace.

      The “fatal assumption” is that “the strategies that brought us success in the past will inevitable continue to work in the future, as long as we just implement then better and/or with greater effort.”

      The seven big ideas:

      1. Today’s strategic priorities must focus on innovating for the future rather than improving on the past.
      2. Be the only one that does what you do.
      3. Give customers what they need buy might never even think to ask for.
      4. Observe the familiar with fresh eyes.
      5. Questions are the seeds of innovation.
      6. An organization’s trendsetting capacity is a reflection of its leader’s beliefs.
      7. Develop a culture that aligns employee behavior with the organization’s innovative strategy.

      We have to say that we found the book’s premise and abundant examples to be thought provoking, both in terms of our own business and the businesses we write about on a daily basis. Strategic innovation seems to us to be that rarity in the retailing world; so many companies are occupied with meeting short-term financial goals that they often feel that they cannot afford to spend too much time on pursuits that strike them as ethereal.

      While the fact is, they can’t afford to ignore such considerations if they have any hope of long-term survival.

      You can get a copy of Truck’s book by writing the author himself at art@turock.com. We suggest you do so.



    • While in Seattle, we also had the opportunity to visit one of the great Larry’s Market stores that serve that market. We were looking forward to the visit because Larry’s has the same kind of approach and customer as Superquinn and D&W Food Centers, two chains that we spent some time with last week. We were curious how they compared.

      While we would concede that our visit was brief and our examination cursory, the visit to Larry’s did raise some questions. This isn’t a criticism, because we would be the first to admit that we don’t have all the answers. But we do have questions.

      Larry’s, if you’ve never seen one, has a terrific fresh foods orientation, with a great little restaurant, gorgeous produce, fabulous cheese and deli department, and a wine section that would be hard to match. Set off by green and white awnings, wall murals and corrugated metal wall treatments that give the place a farm stand look, Larry’s always has been distinctive and ha delivered on its promise in these areas.

      What surprised us were the grocery aisles, where it would appear that the store may be giving in to temptation to show a stronger low-price orientation. There are price signs that don’t seem to work; some of the aisles are cluttered with cardboard displays that ruin the overall effect of the store; and there are even bins near the checkouts where candy has been tossed casually, with none of the care that the produce department receives. And maybe that’s what really caught our eye. In a store where precision and care are the hallmarks of the prepared foods section, grocery seemed to be an afterthought.

      Now, Larry’s has a perfect right to fight any battle it wants. But for us, at least, it made us wonder about inconsistency of vision. It made us question whether it could be effective in these areas, with both Fred Meyer and Costco nearby. And it just didn’t seem to gel.

      Consistency is one of the hardest things to achieve, we think. And it may be one of the qualities that has the greatest impact on the shopper.



    • One of the real pleasures of being on the road is the chance to visit local restaurants and enjoy the local cuisines…which is exactly what we did last Friday evening in Seattle. In an instant, the restaurant we visited, Etta’s, entered our pantheon of favorite restaurants.

      (Among the others: Harvest in Cambridge, Mass., Commander’s Palace in New Orleans, Delhi Brasserie in London, Hunan Home in San Francisco, Arthur Bryant’s in Kansas City…but don’t get us started. It is an eclectic bunch, and highly personal.)

      It wasn’t just the incredible salmon that we got at Etta’s that so enraptured us. It wasn’t just the low-key atmosphere, intimate without being precious. One of the best things about Etta’s was the waiter who took care of us…and it is a perfect illustration of how the customer experience is supposed to work.

      When ordering our salmon, we wanted a glass of red wine, and inquired whether the syrah or the merlot would go better. Michael, the waiter, said that he would prefer the syrah…but brought both bottles over, two glasses, poured some of each and told us to pick. Both were great, but the syrah was perfect for the salmon. We had an enormous glass of that, plus Michael left the remnants of the merlot to sip.

      Then, when we were considering dessert -- we ultimately decided on blackberry ice cream, which was light and delicious -- Michael brought over a couple of other wines to taste: a pinot noir and a cabernet. By the time the evening was done, we had tasted all of the red wines that Etta’s sold by the glass, and were charged for one glass of syrah.

      And then, because we liked all of them, he wrote down the names of each. (We share them with you now: Snoqualmie Syrah, Sagelands Merlot, Argyle Pinot Noir, and Barnard Griffin Cabernet.)

      There was nothing in it for the waiter or Etta’s, except the opportunity to connect with a patron and make the dining experience more than just dinner. It was about being educated and trying new things; it was about feeling at home in a restaurant 3,000 miles away from where we live. (Though there’s something to be said for feeling at home in a restaurant around the corner from your house, too.)

      And don’t say, “That’s a restaurant, not a supermarket or other retail environment.” We don’t believe that. Sure, they are different. But the goal and vision, the connection with the customer should be precisely the same.
    KC's View:

    Published on: September 30, 2002

    CIES – The Food Business Forum, announced that last week’s International Food Safety Conference in Geneva resulted in the following developments:

    • The development of the Benchmark Model in the Global Food Safety Initiative (GFSI), which is designed to allow the review of food safety standards against a set of criteria, is moving into the implementation phase. These standards contain additional requirements to applicable legislative requirements for the supply of food products, with compliance earning endorsement from GFSI. The Model is beginning with manufacturing standards, with plans to move to agricultural standards at a later time; adherence to standards is expected to yield cost savings and efficiencies for both retailers and manufacturers.


    • The GFSI website, www.globalfoodsafety.com, has gone live, with downloadable information for both manufactuerers and retailers.


    • The conference also unveiled the design of an Internet-based “Early Warning System,” which will give retailers and suppliers access to information on food safety incidents, issues and facts. The system will be developed by retailers and suppliers in coordination with public authorities.


    • GFSI said it is studying the possibility of introducing the “Fight Bac” campaign outside the US. This campaign, which promotes good at-home hygiene practices among consumers, has been very successful in the US.

    KC's View:
    As food safety and food security – two different yet related issues – become of ever-greater relevance in an unsettled world, initiatives like these will help the food industry move from being reactive to pro-active.

    Published on: September 30, 2002

    Seiyu Ltd., the Japanese supermarket chain that recently took on Wal-Mart as a minority partner (with the ability to become the majority owner over a period of years), admitted last Friday that two of its stores deliberately mislabeled imported beef and pork products as being of domestic origin.

    The company said that the problem was limited to the two stores, and to meat managers who acted alone. According to Reuters, Seiyu said it immediately reported the incidents to relevant government authorities and plans to offer full refunds to anyone who purchased the mislabeled meat.

    This is just the latest of a series of incidents in Japan where major corporations have conceded the deliberate mislabeling of meat items, a major issue in that country, where concerns about food safety have caused meat purchases to decline precipitously.
    KC's View:
    Not to paint with too broad a brush here, but what the hell is going on over in Japan? What is it about the nation’s business ethics that allows people to mislabel products with the belief that they are somehow exempt from the law? (Not that the business ethics here in the US are any great shakes, based on recent events and prosecutions…)

    We’ll assume that Seiyu has its act together and has determined conclusively that this is limited to two stores and two meat managers. Because if another report about expanded problems at Seiyu comes out, the company and its management are going to have a credibility problem.

    Ironically, Seiyu was going to start reimbursing customers who had bought the mislabeled meat…but when the requests for reimbursement started to outweigh the amount of beef that had been mislabeled, the company suspended the program.

    Proving that even in Japan, the road to hell is paved with good intentions.

    Published on: September 30, 2002

    The Hershey Trust -- which wanted to sell its majority ownership of Hershey Foods in order to diversify its portfolio, only to be change its mind amid a firestorm of political and local objections -- now has promised not to sell the company without advising the courts and the Pennsylvania state Attorney General’s office.

    However, in advising Attorney General Mike Fisher (who was a prime opponent of the sale) of its decision, the trust’s board of directors then firmly knocked the ball onto Fisher’s side of the net.

    “We look forward to your ideas and support for our diversification efforts," the board wrote, asking for his help in identifying strategies that might be acceptable to the public.
    KC's View:
    We suspect that Fisher ain’t gonna have any bright ideas on this one; good politics, in this case, requires the status quo.

    But that may not be good for the trust. So we suspect that we’ll see this issue crop up again fairly soon…maybe when the trust has an ironclad deal with a company like Kraft to buy the company but leave its local interests intact.

    Published on: September 30, 2002

    Interesting news last week that Gap Inc., the trendsetting but moribund clothing retailer that has suffered through tough losses for some two years, has hired Paul Pressler to be its new CEO. He replaces Millard Drexler, who led Gap for two decades, creating a network of more than 4,200 units under the Gap, Banana Republic, and Old Navy banners.

    What made the hire so intriguing was that Pressler comes to the company from Walt Disney Co., where he ran the company’s theme park and resort division. While Pressler ran the Disney Stores division at one time, he’d been out of the consumer product business for some time. In fact, numerous stories about the hire pointed out that Pressler makes no bones about the fact that he is not a merchant, but rather is seen as having expertise in information technology, marketing and customer segmentation.

    Pressler told The Wall Street Journal that he didn’t expect his lack of experience to be a hindrance. “In some ways, our Disney theme parks are just giant retail locations.”
    KC's View:
    This latter statement will come as no surprise to any parent who has tried to walk through Disney World or Disneyland with a kid.

    We think the notion of hiring someone who has a little showbiz pizzazz to run Gap suggests all sorts of intriguing possibilities, for the same reasons that we were so enthusiastic by the hiring of Larry Johnston from GE to run Albertsons. People like Pressler and Johnston often walk in the door without preconceptions, as well as with a consumer’s appreciation for how these businesses are run. There are no sacred cows, and people like this are able to bring new kinds of energy to retailing businesses that may have grown staid and unadventurous.

    More companies looking for CEOs ought to be considering such moves. We’re particularly impressed by the reports that Pressler intends to start his tenure by working in the stores.

    Way to go.

    Published on: September 30, 2002

    The Washington Post reported last week that new studies show that milk from cloned cows is “virtually indistinguishable” from normal cows.

    If confirmed, these results are likely to speed the time it will take to bring products from cloned animals and other agricultural sources to market, as science reaches a consensus that cloning represents no threat to the food supply.
    KC's View:
    If this is true, we believe the industry needs to start the educational process now, preparing consumers for the introduction of such products onto store shelves.

    If it doesn’t do this, you can safely bet that there will be a backlash from some social, religious, and political groups. (People for the Ethical Treatment of Animals will probably decide that cloning is horribly cruel and should never occur; we suspect that there also will be objections of the “this flies in the face of God’s laws” variety).

    And if this happens, it won’t take long before there are signs in store windows saying, “We don’t sell cloned cow’s milk here.” And that would be a shame, not because we have any great desire to drink it, but because a potentially enormous scientific advance that could help feed a lot of hungry and people and nations will have been tarnished.

    But as far as drinking it goes – once this stuff is approved, bring it on. We’ll be happy to drink it, anytime and anyplace.

    Published on: September 30, 2002

    The Associated Press reports that Canadian scientists as well as researchers from Procter & Gamble believe that they have found the reason that acrylamide, a possible cancer-causing substance, is found in starchy foods that are baked or fried at high temperatures.

    They apparently suspect that asparagine, a naturally occurring amino acid, will form acrylamide when heated with certain sugars such as glucose. And there is evidence of both asparagine and glucose in the starchy foods being investigated.

    Both the US Food and Drug Administration (FDA) and the World Health Organization (WHO) have said that the possible carcinogenic properties of acrylamides are worth investigating, though neither institution has reached a conclusion at this point.
    KC's View:

    Published on: September 30, 2002

    The US General Accounting Office (GAO) has called on the Federal Trade Commission (FTC) to change its policy of requiring that when two chains merge, all stores that are divested in a single market should go to a single buyer.

    Sen. Christopher S. "Kit" Bond (R-Mo.) followed up on the GAO recommendation by asking for the same change in FTC policy, suggesting that it was hurting small or regional businesses that could benefit from the acquisition of a limited number of stores.
    KC's View:

    Published on: September 30, 2002

    The Seattle Times reports that after being locked out on Friday, dockworkers at 29 West Coast ports are expected to return to work today.

    The lockout was ordered by the Pacific Maritime Association, which represents employers at the ports, as a way of cooling off the situation after a negotiation period that was becoming protracted and unproductive. However, it was not expected by local analysts that the lockout would improve the situation, and concerns remain about the impact labor strife at the ports might have on imports and exports, as well as upcoming holiday season sales.
    KC's View:

    Published on: September 30, 2002

    Thanks to those of you who wrote in Friday to point out that we had the wrong link up for the HartBeat feature; accidentally, we never changed the link and kept sending people to a week-old column.

    The explanation is that we goofed. No excuses.

    But now we’ve fixed the link, so you can go to the HartBeat column about notes that because women not only make most purchases of and use most wellness products, they also drive the purchase and use of such products by the people around them. And they make their decisions often because changes in their life-stages…so for a retailer to understand how to market to women, especially in the wellness sector, it is important to know what these women are thinking, feeling, and doing.

    For more on this topic, go to:

    http://www.hartman-group.com/HB/new.html

    …or simply click on the HartBeat logo on the right hand side of the page.

    Really.
    KC's View:

    Published on: September 30, 2002


    • Winn-Dixie Stores has hired Joel B. Barton to be its Charlotte division manager. Barton formerly was executive vice-president of merchandising and marketing, and president of retail stores, at Spartan Stores in Michigan.

    KC's View:

    Published on: September 30, 2002

    We got a lot of reaction to our commentary last week in which we expressed our opinion of a story in The Wall Street Journal about how it may be more expensive to eat at home than eat out. The WSJ reported that the yuppies who are taking up cooking tend to be using recipes that call for expensive mushrooms, gourmet olive oils, and pricey cuts of meat – all of which add up to do-it-yourself meal solutions that can be a problem for the bank account.

    We were more than a little annoyed by the story, because it was so limited in its scope (to the “damned yuppies”) and shortsighted in its views. Plenty of people are eating at home more because of the down economy, but are doing so by using consumer packaged goods that have been designed to help them feed themselves and their families economically. The beef or seafood that they are choosing isn’t necessarily coming from gourmet stores, but from traditional, mainstream supermarkets that survive on the notion that good food can be made available to virtually everyone at affordable prices. Putting supper on the table, for most people, isn’t the enormous production that the WSJ suggested…especially for the 85 percent of Americans that the Food Marketing Institute (FMI) reports ate home-cooked meals at home three or more times a week during the past year, compared to 74 percent a year earlier.

    One member of the MNB community wrote:

    “Damn Yuppies, huh? I agree with you wholeheartedly, Kevin. I'm 55 yrs old now, and I've cooked for myself, out of necessity, all my life. I'm one of those people who think about VALUE a lot. Eating out all the time isn't only boring, it's costly (I prefer that word to expensive), and the cost is not worth the benefit. There aren't a lot of really good, healthy, reasonably priced places to eat close to home, so I've chosen to prepare my own meals most of the time. Creatively, too, I might add. If you really listen to the good cooks on TV (PBS or HGTV), they'll all say at least something about simple, fresh ingredients. Never mind the Foie-gras, the Morels, or the Black Truffles. Yeah, you can bring out the big guns for something special like the holidays, but on a daily basis, cooking at home vs. visiting a dining establishment, just makes more sense. Somebody missed the mark in the WSJ article . . . perhaps the editors should look beyond the shores of Manhattan to the rest of the world. Maybe some people are whipping up something elaborate with ‘fabulous’ ingredients, but for the most part it's just what you said, ‘Getting dinner on the table.’ Aren't they paying attention to shopping trends? Why would there be so much interest in discount houses, fresh produce, quality & affordable meats, etc., if it weren't to fuel the interest in home cooking, AND at a price. People go to Sam's Club because you can get all the goodies at a low price. Well, maybe not Foie-gras, but you get the picture.”



    MNB user Dan Raftery of Prime Consulting wrote:

    “There's more to it than that. The FMI statistic covers the total population, as you've indicated. One of the demographic groups - Boomers - is cooking for fun now. Ask the folks at Calphalalon who's buying their stuff. The old pots and pans are finally being replaced by equipment that simply works a whole lot better.

    “Entertaining now often revolves around the kitchen, where a fiftysomething cooking hobbyist and his/her friends get back to a simpler life. The food may be more expensive than the normal fare, but it is not as expensive as eating out. The WSJ article is simply an example of selective "analysis."

    “Note: I have not researched this behavior beyond my circle of friends.”


    Sometimes research isn’t as important as good old common sense. And Dan makes a lot of it.


    MNB user Don Sutton wrote:

    “Actually what both you and WSJ missed was the probability that many of the yuppies cooking with expensive components were probably making cheaper versions of more expensive items they had been ordering in upscale yuppie eateries. They're still saving if you add in a more relevant perspective.”

    We have two words for anyone who thinks that ordering meals in a restaurant is less expensive than making it at home:

    Wine list.


    And MNB user Norma Gilliam wrote:

    “I believe what is driving people to cook more at home is the fact that since 9/11 more families are sticking closer to home and have a renewed value of family time. The dinner meal is a natural place for them to come together. Cooking at home for the ‘average’ middle income family can still mean convenience with all the ready-to-cook or heat and eat items available today. People are also entertaining friends and family more at home as well. Many families have skipped vacation trips and spent time closer to home (on day trips). Sure, the down economy may have some effect on these numbers, but overall families are simply spending more time together with a renewed emphasis on the dinner meal.”

    Norma also was nice enough to write:

    “Are you actually getting any sleep? Your ‘early’ wake up call was pretty early this morning…you appear to be going 24/7. I have enjoyed your travel notes very much!”

    We’ve enjoyed writing them. (And yes, we’re getting some sleep. Not a helluva lot, but enough. Thanks for asking.)




    Onto other matters…

    Last week we wrote about the estimable D&W Food Centers, and lauded the young woman at the coffee counter there who asked a customer, “Will you have your usual?” Our note: the words “the usual,” when uttered by an associate to a customer, are magical, because they imply a connection that resonates with the shopper.

    MNB user Scott Schnell of the Nestle Purina Product Technology Center agreed:

    “Your comment about "the usual" is so right on target! In our town, we have two super pharmacies. We patronize one because of its 24 hr format, but waiting in line while 7 worker-bees do whatever gets to be a pain. And then no one recognizes you at the counter and there is no "usual" to the experience. We have talked about switching pharmacies to one of the supermarkets or Wal-Mart (where our old Osco staff has had to find jobs when Osco pulled out), but the 24 hr format is a big draw and the stability of the supermarkets seems in doubt right now.

    “A personalized experience would help anywhere.”


    There’s the challenge, folks.




    Following up on our stories about Superquinn’s SuperScan program, allowing customers to scan items as they go into the shopping cart, MNB user Lois Bredow wrote:

    “Recently, I cannot for the life of me remember where, I was in a check-out line that was growing long. An employee appeared with a hand-held scanner. She proceeded to scan items in people's carts and hand them a slip to give to the cashier to speed up the process. Now there is an idea whose time has come.”

    Absolutely.

    Anybody know what retailer this might have been?
    KC's View:

    Published on: September 30, 2002

    Sunday’s NFL football scores…

    KANSAS CITY 48 Miami 30
    BUFFALO 33 Chicago 27
    DETROIT 26 New Orleans 21
    GREEN BAY 17 Carolina 14
    JACKSONVILLE 28 NY Jets 3
    PHILADELPHIA 35 Houston 17
    PITTSBURGH 16 Cleveland 13
    Dallas 13 ST. LOUIS 10
    ARIZONA 21 NY Giants 7
    Tampa Bay 35 CINCINNATI 7
    OAKLAND 52 Tennessee 25
    SAN DIEGO 21 New England 14
    SEATTLE 48 Minnesota 23


    And the Major League Baseball Division Series begin tomorrow:

    AMERICAN LEAGUE:
    New York Yankees vs. Anaheim Angels
    Minnesota Twins vs. Oakland Athletics

    NATIONAL LEAGUE
    Atlanta Braves vs. San Francisco Giants
    Arizona Diamondbacks vs. St. Louis Cardinals

    Now, we have to be honest here. We're rooting for a World Series that features the Twins vs. the Cardinals, mostly because it would tell Bud Selig and all the baseball owners to stick it in their ears about small market teams.

    But that's not likely to happen.

    It's probably gonna be the Yankees against either the D'backs or the Braves.

    And while we wouldn't root this way, we think either National League team wins.
    KC's View: