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    Published on: January 9, 2004

    It's been a while since we weighed in on movies and wine…

      Movies.
    • This will be something of a minority opinion, but we're a little less transfixed by Lord of the Rings: Return of the King than most people. That's not to say it isn’t a magnificent cinematic achievement. It certainly is. It is hard to think of another 10 hours of film that offers as consistent a vision, such breadth of performances, and as facile a blending of special effects and live action.

      That said, we found to be stirring without being really moving. Maybe it's just because fantasy isn’t our favorite genre, but when the 20-foot elephants shows up, and that's sort of when it lost us.

      It is a minor caveat, perhaps. And it seems petty to carp about such a terrific movie. But the best movie of the year? Nah…


    • in fact, one of the best movies of the year may be a small movie called 21 Grams, which features Sean Penn in one of the most heart-wrenching performances we've ever seen on film, plus great supporting turns by Naomi Watts and Benicio del Toro. Directed by Alejandro Gonzalez Inarritu (whose previous work we are unfamiliar with), 21 Grams has as its centerpiece the Penn character's desperate need for a heart transplant. This need is both served and affected by the wildly disparate lives of a suburban housewife (Watts) and an ex-con (del Toro) - but the film takes twists and turns and genuinely surprises. It helps that the film does not unfold chronologically; rather, its scenes are like pieces of a jigsaw puzzle that pop up in no particular order, at first seeming disjointed but becoming meaningful and even poetic as the entire picture begins to take shape.

      21 Grams can be seen as profoundly depressing, but it is a fascinating and compelling piece of work that finally is about the search for redemption. Great work.


    • Wine. We've enjoyed some terrific wines over the past few weeks, including…

    • A 2000 Chateau Treytins Montagne Saint Emilion from France, which, in the words of a great modern poet, inspired great memories: I think about Paris when I'm high on red wine; I wish I could jump on a plane.


    • A 2000 Cline Syrah from California, which is delicious…"soft and round" in the words of the experts.


    • Our favorite wine of the holiday season, though, remains an old standby, a Merlot/Cabernet Sauvignon/Cabernet Franc blend from Washington State's J. Bookwalter vineyard known as "Lot 14." Filled with vanilla and spice, and one of our favorite wines.


    Cheers!
    KC's View:

    Published on: January 9, 2004

    Yesterday we had a story about Fred Franzia, the maker of Two-Buck Chuck, which prompted the following email from an MNB user:

    My wife and I received several bottles of Two Buck Chuck (Charles Shaw wines, both red and white) as holiday ‘bring-alongs’ to a party we threw just before Christmas. We sat them aside until after the holidays, and recently tried both of them. They were dreadful. Two-Buck Chuck is a “box-wine in a bottle”. That’s certainly a legitimate marketing approach and I have no complaint about a vintner like Bronco deciding to approach their market segment that way. I’ve refrigerated the wines and will use them for cooking purposes, and I think they will serve excellently in that capacity. As Mr. Franzia says, it’s all a matter of taste, and though I don’t find Two Buck Chuck to be worth drinking, I’m sure others disagree. I’m just not their market.

    More importantly, Mr. Franzia’s point about other retailers buying similar wines and selling them for considerably more than $2 is troubling, and points to a real ‘short term’ mentality on the part of these retailers. Simply put, if a customer pays $5 or more for a bottle of wine of similar quality to Two Buck Chuck, and has a similar experience to mine, I think they will be most likely be reluctant to buy wine in general from that retailer. Even though the winery is producing ‘box-wine in a bottle’, the consumer’s perception will be that the retailer is either a poor judge of wine value, or is mishandling the wine in storage, or is overcharging them, or something negative.

    For better or worse, consumers see retailers as their advocates in these matters, and expect the retailer to buy smartly, and pass along appropriate value. Retailers like Wal-Mart, Trader Joe’s and Costco seem to understand this very well. Kudos to Trader Joe’s for selling a $2 bottle of wine at the appropriate price, and shame on others who are gouging consumers. Is it any wonder TJ’s is growing so fast?


    The story that Franzia told about other retailers getting more margin on wines of identical quality was indeed troubling…for lots of reasons.




    Regarding the decision by supervisors in Alameda County in California to prevent stores larger than 100,000 square feet from dedicating 10 percent of shelf space to nontaxable items, such as groceries, in the county's unincorporated areas - a decision aimed at Wal-Mart, even if the Bentonville Behemoth is not mentioned in the legislation - one MNB user wrote:

    This is total B.S.-Why should Wal Mart or anyone be banned from building the size store they want ? Give us consumers a choice where we want to shop!!

    That's one point of view…though we're not sure that communities shouldn't have the ability to rule on development issues.




    In response to our story about Kmart's decision to close a number of stores in California, MNB user David Livingston wrote:

    Odd, if you look at the sales volumes for the stores they are closing in California, they are actually doing quite well compared to their other stores. Since 1998 they have showed steady growth. At least Kohl's is taking over some decent performing locations rather than some distressed pieces of real estate.




    We went on the following rant yesterday:

      Y'know what really annoys us? Over the years, when Mrs. Content Guy has gone out somewhere and we've stayed home with the kids, people say we're "babysitting." But we're not…we're just taking care of our kids, which is different. (You hire babysitters, and babysitters aren't responsible for college educations.)

      The same goes for the whole "working mom" thing. If mom works full time and has kids, she's gets called a "working mom" because the assumption is that in reality she is holding down two jobs. Which she is.

      But so, very often, are dads.

      And it is about time that they get a little credit.

    Which prompted a number of emails, generally split along gender lines.

    One typical response, from MNB user Lynda Gutierrez:

    Certainly the men in this society who carry as much weight of the day to day running of a household and childrearing (in addition to contributing to the family income) do deserve a little credit. However, as a rule, men tend to over-estimate their actual workload: throwing a few loads of laundry into the washer a week is not "doing the laundry," running to Trader Joe's or Stew Leonard's to pick up some things is not grocery shopping (unless these trips do, in fact, consistently and steadily provide the bulk of food and necessities coming into the household -- not just some fun extras or special occasion meals.) And there are a million and a half little jobs involved in even basic housekeeping, maintenance and childcare that simply fly right under most men's radar -- but which women typically cram into their day through power multi-tasking.

    And you're 100 percent right -- people should not refer to a man's taking care of his own children as "babysitting" but this almost a universal perception exists for a reason. Certainly men today do far more than their fathers did in relation to running the household -- and that's good. No one can take that away from you and no one should undervalue that progress. But women are doing more as well and until I see the same number of men as women picking up and dropping off children at daycare and activities, trudging supermarket aisles week after week, or even doing as great a percentage of family holiday shopping -- I can't honestly believe we've reached parity.

    To coin a phrase: You've come a long way baby...but in the scheme of things, there's a very, very long way to go yet. And, the sad truth is, even when you get there, there's no parades and precious few pats on the back. Ask any woman.


    In other words, the message to the Content Guy is: "Get over yourself." (Hardly the first time we've been given that particular advice…)

    However, MNB user Bob Lewis offered the other perspective:

    You made my morning with your comment about "working dads!" I've been a (sole custody) single dad since 1992 and have always chuckled at the idea that "working dad" was a redundant term while "working mom" implied a very busy person. 🙂

    Good job!


    Thanks.




    And about Pete Rose, one MNB user wrote:

    While I believe Pete Rose should be held up as a negative example for his gambling and subsequent lies. I also believe he should be allowed in the Hall of Fame for his contributions on the field.

    If we are to keep out Charlie Hustle because of things he did after the fact, or rather because of things he did off the field, we may as well close the doors on the hall. If the reasoning is that baseball is all about Mom, Apple Pie, Good American Values, Honesty, and Sportsmanship. It reeks of hypocrisy to ignore all the womanizing, wife beating, adultery and drug abuse by professional athletes already in the hall.


    Hey, as long as the Hall of Fame plaque explicitly says that he was banned from baseball for gambling, we have no problem with his being admitted into the Hall…but once again, keep him away from Major League Baseball teams and fields.

    But we'll tell you something else. If they let Rose in the Hall of Fame, they damned well better let Shoeless Joe Jackson in.
    KC's View:

    Published on: January 9, 2004


    • The Great Atlantic & Pacific Tea Co. (A&P) reported a third quarter loss of $25.1 million, compared with a loss of $30 million a year earlier.

      Sales for the quarter rose to $2.5 billion, from $2.3 billion a year earlier. Same-store sales rose 1.2 percent.


    • Target Corporation reported net retail sales for the five weeks ended January 3, 2004 that were up 9.9 percent to $7.737 billion from $7.038 billion for the same five-week period a year ago. Same-store sales were up 4.1 percent.

      Sales at the company's Target stores were up 12.1 percent, which stood in stark contrast to sales declines at its Mervyn's and Marshall Field's chains.


    • Carrefour reported that 2003 sales reached the equivalent of $100.6 billion (US), up six percent.


    • Ahold reported annual sales that were the equivalent of $71.5 billion (US), down 10.5 percent from the previous year's sales.

    KC's View:

    Published on: January 9, 2004


    • Japanese retailer Seiyu Ltd, which is partially owned by Wal-Mart, reportedly is moving quickly to adopt a price and inventory information system that was developed by Wal-Mart.

      By the end of the year, Seiyu plans to introduce the Retail Link information system to all its stores, with full-scale automatic ordering in place by 2005.


    • GlobalNetXchange (GNX), the e-business solution and service provider for the global retail industry, announced that Kmart has signed a new customer agreement to use the GNX Negotiations solution to purchase a wide variety of merchandise, goods and services.

    KC's View:

    Published on: January 9, 2004


    • Wal-Mart has hired Tom Gean, the federal prosecutor for the Western District of Arkansas, to be its new legal compliance officer.

      Gean's job will be to deal with legal issues raised by a rash of discrimination lawsuits and a federal investigation into the alleged use of illegal workers at some Wal-Mart stores.

    KC's View:
    Gee, wasn't it just earlier this week that Wal-Mart announced that it was hiring John Peter Suarez, the US Environmental Protection Agency (EPA) assistant administrator for enforcement and compliance assurance to be the general counsel for the company's Sam's Club division?

    We always joke that Wal-Mart is bigger than most countries…and now it looks like it is trying to assemble a legal staff suitable for a country.

    If it starts hiring retired generals and ambassadors, we'll know we're in trouble.

    Published on: January 9, 2004

    Betsy Holden, the former Kraft Foods co-CEO who was deposed last month in the face of concerns about declining sales growth, reportedly will stay with the company as president, global marketing and category management.

    When Holden lost the CEO's job, the other co-CEO, Roger Deromedi, took over the all the post's responsibilities. She will now report to Deromedi, and will have directly under her four senior product category managers.

    Holden's new assignment reportedly is part of an overall restructuring of the company using existing management. The goal is to tie together strategic oversight of Kraft's food categories on a global basis., as opposed to breaking them into separate North American and international divisions.
    KC's View:

    Published on: January 9, 2004

    Published reports say that Tyson is reducing operating hours and productions at its US beef plans because of reduced demand following the first discovery of mad cow disease on US soil that occurred just before Christmas.

    However, the company seems to be attributing the shift (or lack of shifts) to the bans on US beef imports that have been put into place by countries like Japan, South Africa, and Mexico, as opposed to slower beef consumption in the US.
    KC's View:

    Published on: January 9, 2004

    The Rancho Cucamonga Press Enterprise reports that when Sears opens a 180,000 sq. ft. Sears Grand store in that Southern California community, among the amenities it will feature will be a kind of convenience store that sells milk, beverages, snacks and frozen pizzas.

    While on the surface it might appear that Sears is joining the Wal-Mart/Kmart/Target trend toward supercenters, the company says that this is not its intention. Rather, it is looking to attract young families with a completely convenience-oriented product mix, not a full-service grocery store.

    The Rancho Cucamonga unit is one of five that Sears plans to test.
    KC's View:
    Maybe it's because the memories of what it is like to be a so-called "young family" is fast fading, but we can't imagine running down to the local Sears for a gallon of milk, a six-pack of beer and some chips.

    Published on: January 9, 2004


    • The Arizona Republic reports that Wal-Mart will open its first two Neighborhood Markets in the state next Wednesday, when it opens units in Mesa.

      The company reportedly has its eye on two additional Mesa locations for its small grocery format stores, possibly to be opened later this year.

      Local competition such as Fry's and Safeway reportedly already are talking to the United Food and Commercial Workers (UFCW) union about the need to cap compensation and benefit costs in the face of the non-union workforce used by Wal-Mart.



    • The Morning News in Fayetteville, Arkansas, reports that a US District Court judge there has tossed out a lawsuit filed against Wal-Mart charging that the retailer violated federal law by putting a clause in its retirement plan excluding unionized employees from receiving coverage.

      The dismissal was on jurisdictional grounds; the judge said the complaint should be made to the National Labor Relations Board (NLRB).

    KC's View:

    Published on: January 9, 2004

    Great piece in the San Francisco Chronicle about the growth of mail order wine clubs in the US - there are roughly 800 such clubs in the US, and the number goes up each year. In fact, roughly half the wineries in California sponsor such clubs, and these tend to be seeing larger sales increases than those without such clubs.

    The Chronicle writes, "In addition to the wine itself, which is shipped from two to 12 times per year, many clubs offer perks such as members-only parties where enophiles can rub shoulders with winemakers, gifts like estate grown olive oil, discounts on additional purchases, priority registration at winemaker dinners and educational newsletters with recipes and extensive information about the wines."

    Of course, the membership in these wine clubs is limited to people who live in states to which wine can legally be shipped. That means that as these laws fall, the potential for even greater growth is strong. And the upside for the vintners is nothing to scoff at; using the wine clubs as a vehicle, they are able to cut out the middleman/wholesaler and make higher profits, even if they are selling the wine at a discount.
    KC's View:
    There is a good lesson in here for all retailers. By educating consumers and creating cachet around this specific category, these vineyards are building sales and developing significant relationships that allow them to establish differential advantages for their businesses.

    It doesn't just have to be done by vineyards. We have a local wine merchant, Nicholas Roberts Limited, which has a wine-of-the-month club to which we belong. We get three bottles of wine a month; they choose 'em…we have no choice in the matter…but this means that we're generally tasting interesting and unique wines that we might never have considered otherwise. It has been a wonderfully educational experience.

    And there's a business advantage to the wine store. Before we joined the club, we almost never spent more than $8 per bottle on wine. But since we've been getting these unusual wines - which generally run between $16 and $20 per bottle - we rarely spend less than $12 per bottle. By educating us, the store has gotten us to trade up.

    That's a great lesson for any retailer.

    There's an old Chinese proverb that goes, "Wine enters the stomach, and business grows ripe in the brain."

    (By the way, you can check out our wine club at:
    http://nicholasrobertsltd.com/ )

    Published on: January 9, 2004

    In the UK, Safeway Plc is creating a 70-SKU line of health-oriented food products for children - called "I'd Like" - as well as a new line of vitamins, and supplements.

    Published reports say that the lines are going to be marketed along with the existing "Eat Smart" brand as components necessary for a healthier lifestyle.
    KC's View:
    Get 'em while they're young.

    Published on: January 9, 2004

    The Boston Globe talks to Dr. David L. Katz, director of the Yale Prevention Research Center in New Haven, about the misconceptions surrounding low-carb diets.

    "If you traded your favorite breakfast cereal for steak and eggs in order to lose weight on a low-carbohydrate diet, you'll be in for a big disappointment," the Globe writes. "Sure, you can lose 5 to 10 pounds in a couple of weeks by eliminating bread, pasta, fruits, most vegetables, and dairy products -- just like the books say. But much of that weight loss will be water. And if you, like most people, fall off the program, the weight you regain will be fat and flab."

    Low-carb diets, according to Katz, actually hurt long-term weight loss efforts because on such diets, the body converts muscle to fat…and having less muscle makes it harder to lose weight.

    Furthermore, Katz says that low-carb diets make the mistake of lumping all carbs together. "Cheese doodles aren't the same as oatmeal," he says. The best solution is - big surprise - moderation and exercise.

    And then there's the psychological angle. Katz tells the Globe that carbohydrates increase serotonin levels. Serotonin makes you happy and relaxed. Lack of serotonin makes you cranky.
    KC's View:
    Y'know what makes us cranky? A bunch of doctors who can't seem to agree about the best way to lose weight.

    Oy.

    Published on: January 9, 2004

    The Los Angeles Times reports this morning that six out of seven United Food and Commercial Workers (UFCW) locals that are on strike or have been locked out of their jobs in Southern California have had to reduce picketers' pay, in some cases by as much as half.

    Picketers have been getting $40 to strike for a six-hour day.

    "The pay cuts, and the loss of health coverage on Jan. 1, have forced increasing numbers of striking and locked-out workers to look for other jobs," the LAT writes, "which has eroded the number of pickets at Vons, Pavilions and Albertsons markets in Southern and Central California."

    UFCW spokesmen say that despite the cuts, the members' resolve has not diminished. The union won't say how much money is left in its strike fund.
    KC's View:
    The bigger problem, we suspect, for striking workers must be dealing with the sinking feeling that compromise is not possible, that positions have been so staked out that neither side is willing to do what is necessary to forge a 21st century relationship.

    Published on: January 9, 2004

    Intriguing piece on CBSMarketWatch.com by Marshall Loeb, the former editor of Fortune magazine, in which he ponders the rapid growth of Wal-Mart and its impact on the economy.

    Loeb notes that the late Sam Walton possessed a singular passion for retailing and the people who helped him build his company - a passion that today sometimes is hidden behind and beneath growth charts and stock market analyses.

    These days, rather than respecting Wal-Mart's relentless growth and discipline, Loeb writes, critics are more likely to focus on the fact that "the world's fastest growing company has become a greedy Gulliver squashing hordes of Lilliputians -- forcing competitors to cut jobs and prices, putting small-town mom-and-pop stores out of business and generally causing more harm than good."

    Questions like whether an economy can have either too much or too little competition must be answered, he writes. "Are too many of Wal-Mart's competitors and suppliers being strong-armed into submission by Wal-Mart's take-it-or-leave-it policies? How much creative destruction can society afford?"

    And there's another question, a big one, tied to the number of jobs that Wal-Mart creates around the world, even if it is at the expense of other jobs at other companies that vanish when Wal-Mart comes to town:

    "Who will argue that the customer is better off paying higher prices in order to preserve jobs?"
    KC's View:
    Tough question. And no easy answers.

    But we keep recalling the analysis carried in The Washington Post some months back, when a columnist noted that when Henry Ford opened his first automobile manufacturing plant, his goal was to pay his employees enough money so that they could afford to buy a car. Wal-Mart's apparent goal, the columnist suggested, is to pay people so little that they can afford only to shop at Wal-Mart.

    We keep worrying about the potential death of retailing diversity in America, and wondering what that might mean to commerce as well as to our culture.

    But diversity and competition must be provided by other companies facing up to the Wal-Mart challenge and creating exciting and compelling shopping alternatives.

    What was it that Pogo said about the enemy?