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    Published on: September 21, 2004

    The East Bay Business Times reports that Safeway executives – including CEO Steve Burd and other top managers – are going on the offensive in the San Francisco Bay Area, working the public relations angle to convince the local media and, by extension, the public, that it is justified in seeking salary and benefits concessions from unionized employees.

    "We are eager to tell our story and communicate with the public," Safeway spokesman Brian Dowling told the paper. "The unions certainly aren't bashful about doing it. We feel that at this time, it's in the interest of everyone that we communicate our message early and often." And, he added, "We don't want to be in the position of negotiating through the media, but at the same time, we want to make our positions clear. We want the public to know our position on the health care issue and why it is so important."

    The contract between unionized employees and Safeway and other major supermarket chains ran out on September 11, but the two sides agreed to keep talking without a strike or lockout – at least for the time being.

    The chains are looking for the same kinds of concessions that they won after a four month strike/lockout in Southern California – a two-tiered salary and benefits package that will pay new employees less than existing employees – but Safeway clearly is hoping to do so without taking the kind of public flogging that it got down south.
    KC's View:
    We have this old-fashioned feeling that the best way to win the image wars is to deliver a unique, compelling, differentiated and relevant shopping experience to customers.

    Published on: September 21, 2004

    Intriguing piece in the Wall Street Journal Online yesterday about the impact that the digital age could have on an acquisitive culture.

    The premise, according to the article, is that there are certain items that people simply won’t need anymore as technology changes the rules. CDs, for example, are being replaced as people download music from the Internet; they are, in essence going the way of the cassette and the eight-track.

    The same is likely to happen to movies, as people eschew DVDs for online downloads. Or photo albums, which can be replaced by just a little bit of memory on a computer hard drive.

    The Wall Street Journal Online doesn’t suggest that everything will be seen via digital media. Whether people will continue to read physical newspapers or will gravitate to online versions is an open question; it seems less likely, according to the column, that people will stop buying an dreading books – if only because people tend to have an emotional connection to their books that transcends the act of reading them.

    And there doesn’t seem to be any way that food will be replaced by digital media – unless, of course, the food replicators seen on “Star Trek” become a reality.
    KC's View:
    We found this to be an intriguing piece because it suggests some basic changes in how people acquire the things they like – though it is more a shift in how they acquire, as opposed to becoming less acquisitive.

    But as these changes occur, they are likely to foreshadow other changes in consumer behavior…such as a broader dependence on e-commerce, for example.

    These are the kinds of social/cultural behaviors to which retailers and manufacturers need to pay close attention. The short term impact is discernible, but the broader implications are enormous.

    Published on: September 21, 2004

    The University of North Carolina at Chapel Hill (UNC) has published research saying that people are drinking more soft drinks than they did a quarter-century ago – which could account for at least part of the nation’s burgeoning obesity problems.

    According to the study, the average American now gets seven percent of calories from soft drinks, compared to 2.8 percent in 1977, with overall calories from soft drinks up 135 percent. The most soft drinks are being consumed by young adults between the ages of 19 and 39, though middle-aged Americans (40-59) and older Americans (age 60 and older) also are drinking more soft drinks than ever before.

    At the same time, however, research shows that milk consumption is down – with the average American getting 38 percent less of daily calories from milk, and children between the ages of two and 18 experiencing the greatest decrease in milk consumption.

    And beer also is seeing declines. After seven years of consistent gains, the U.S. beer market contracted 0.3 percent in 2003 to 2.8 billion 2.25-gallon cases, according to the newest edition of the Adams Beer Handbook.
    KC's View:
    Analysts seem to believe that both milk and beer are victims of the low-carb craze, which means that their individual situations could turn around at any time.

    Published on: September 21, 2004

    Last week, the Wall Street Journal featured a story – commented upon by MNB and its community of users – about vacant real estate controlled by Wal-Mart.

    “While big retailers can afford to write off or absorb the cost of closed stores and their ongoing leases, communities are often stuck with a different kind of bill,” the WSJ reported. “They complain that the empty buildings are eyesores that can boost crime and vandalism and bring down property values. And where darkened stores anchor strip malls, they can depress sales of remaining retailers.

    “While the stores' owners typically continue to pay property taxes on the vacant properties -- that is, if they remain in business -- the buildings no longer generate jobs or lucrative sales-tax dollars for state and local governments.”

    And compounding the problem is the fact that Wal-Mart often will prevent these locations from being leased to competitors, which in many cases can dramatically reduce the potential pool of lessees. The paper cites as an example a 69,000 square foot former Wal-Mart in La Junta, Colorado, which has been vacant since 2000…and Wal-Mart holds the lease until 2017.

    Yesterday, Sarah Clark, Wal-Mart’s director of corporate communications, sent a letter to the WSJ defending the company:

      “The Sept. 15 Marketplace article ‘Wal-Mart's Surge Leaves Dead Stores Behind’ failed to emphasize that despite Wal-Mart's enormous growth, our inventory of vacant space is on the decline. In fact, the number of vacant stores will decline 22% this year from two years ago. And we often lease or sell space to competitors, including Sears, Toys 'R' Us, Best Buy, Belks, Bed Bath & Beyond and Big Lots.

      “We work hard to find re-uses for our properties, and our efforts are paying off. Last year, we set a record by leasing or selling more than 15 million square feet for re-use -- the equivalent of 15 regional malls. This year, we will set a new record. Our efforts with local officials to find alternative uses -- from call centers to medical centers to car dealerships to courtrooms -- have resulted in the creation of more than 12,000 jobs. Our marketing efforts are thorough and professional. We know we have a responsibility to our communities to do all this, and we are making progress.”
    KC's View:
    And yet, the WSJ seems to feel that there are communities out there that feel disenchanted with the Bentonville Behemoth.

    Published on: September 21, 2004

    • The pervasiveness of Wal-Mart’s domination of US retail – and the fact that the company is well on its way to achieving its goal of controlling 30 percent market share in every category in which it competes, is on display in a new report from Retail Forward, which concludes that:

      • Half of all US primary household shoppers visit a Wal-Mart store on a monthly basis, and a quarter of US households shop at Wal-Mart on a weekly basis.

      • Nearly half of shoppers who visited a Wal-Mart Supercenter in the last six months are regular weekly shoppers, compared to only 20 percent of shoppers visiting a SuperTarget store in the past six months who are regular weekly SuperTarget shoppers.

      • Two-thirds of Wal-Mart Supercenter shoppers cross shop both sides of the store on the same trip.
    KC's View:

    Published on: September 21, 2004

    • Publix Super Markets has filed an antitrust lawsuit against the 3M Co., charging that the company used monopoly powers to drive up prices on its tape products.
    • .

    • The San Francisco Chronicle reports that California Gov. Arnold Schwarzenegger has vetoed a bill that would have required communities to conduct an economic impact study before allowing the construction of so-called “big box” stores.

    KC's View:

    Published on: September 21, 2004

    By Kevin Coupe

      In addition to writing MorningNewsBeat each day, Content Guy Kevin Coupe also contributes regular columns to a wide number of publications, including the IGA Grocergram. As a regular MorningNewsBeat feature, the folks at the Grocergram have graciously agreed to let us reprint some of these columns.

    I have a ten-year-old daughter. A happy, active, physically fit (and if I may say, impossibly cute) daughter who, nonetheless, every once in a while will look in the mirror and say, "I'm fat," or will refuse to wear a particular item of clothing because she thinks it makes her look heavy.

    I also have a close relative who, many years ago, tried to commit suicide because of the depths of her depression over what she perceived as a weight problem. This particular relative would binge and purge with alarming regularity, and nobody in her family had any idea at the time. Years later, when her parents were preparing to sell the longtime family home, they found in the attic plastic bags filled with dried vomit, a vivid and disgusting reminder of what had been a perilous time in this person's life.

    I bring this up because it seems like the subject of weight is one that comes up with increasing regularity in my day job, writing for But I am beginning to worry that there could be a downside to all this obsession, that we're putting such a bright spotlight on the subject of weight that we also may be putting enormous pressure on our children to live up to some sort of artificial or impossible standard.

    Just think about some of the stories that have made recent headlines…

    • There have been reports about the increasing frequency of stomach stapling surgery, with more than 100,000 such procedures performed last year alone.

    • A variety of newspaper stories have focused on the popularity of drastic calorie reduction diets that some people believe will not just make them thin, but also give them long lifespans. These days they call it seeking superlongevity; they used to call it an eating disorder.

    • There was a study released in the The Journal of the American Dietetic Association suggesting that more than half of all children and teens tend to be eating when playing video/computer games or doing homework, that there is a predisposition among young people to eat constantly throughout the day, and that parents generally don't have a clue how much junk food their kids are eating.

    • This kind of behavior is starting to find its way into cultures outside the US as even countries that traditionally subsisted on the Mediterranean Diet - heavy on fish, olive oil, pasta and vegetables - are consuming fast foods and gaining weight. The result: more people are fatter in more places. (A recent study in Italy, for example, revealed that a quarter of all Italian children are either overweight or obese.)

    • Back here in the US, overweight people have become so commonplace that General Motors and other automakers are working to create normal-looking vehicles that can bigger American rear ends without giving up amenities such as cup holders, built-in DVD screens and air bags. And there is even a coffin manufacturer, Goliath Caskets, that…well, you get the picture.

    Those are just some of the stories I've written about recently; the portrait of a society obsessed with weight can be seen in sharp relief. (And I plead guilty here. I'm as responsible as the next guy for focusing on this issue.)

    What I'm arguing for, I think, is a greater sense of proportion, an effort to put the issue of weight and obesity into some kind of context. It seems like it is just as important to help young people, especially our daughters, understand that weight is just one measure of a person, and that a more holistic approach to mental and physical health is a more appropriate long-term strategy for personal fulfillment. This needs to be done at home, but the savvy retailer can play an important role.

    Not that they'll listen to us. But at least if we establish better ground rules and model better behavior, we have a shot at success.
    KC's View:

    Published on: September 21, 2004

    Our lead story yesterday reported that Procter & Gamble is being attacked by two conservative Christian groups over the company’s opposition to a local statute that would exempt gays and lesbians from civil right protections.

    The groups – Focus on the Family and the American Family Association – say that by opposing the statute, P&G is implicitly endorsing same sex marriage, which the two groups are trying to ban via a proposed amendment to the state constitution.

    Procter & Gamble said through a spokesman that the two groups were connecting unrelated issues – that opposing a law that would prevent discrimination against gays and lesbians is not the same as supporting gay marriage.

    Our comment: “Shame on these groups for engaging in the demonization of P&G for reasons that are at best specious, and at worst suggest these groups’ utter cynicism. They are trying to paint P&G into a corner that the company clearly and rightly wants to avoid.

    “P&G has both customers and employees that are gay, and by opposing a local statute that would allow these people to be discriminated against, all the company is doing is standing up against bias. Compassion, apparently, that is beyond the grasp of these groups.

    “We only hope that P&G’s management does not allow itself to be swayed by this nonsense. The company has the moral high ground on this one…and the groups that are trying to victimize it ore standing on a kind of moral quicksand.”

    Not surprisingly, this story and our position generated some email. And, to be honest, almost nobody agreed with us.

    One MNB user wrote:

    Kevin, I think MNB provides a valuable service to the grocery industry, and I love reading it every morning. I respect your views, insights, and journalism.

    That said, allow me to express my disagreement with you regarding your statement that Procter & Gamble has the moral high ground here.

    Culturally we have forgotten that disconnecting sexuality from parenthood and responsibility begets selfishness. Retailers and marketers understand that sex is very powerful. But what gets forgotten is why sex is so powerful. It's not just about pleasure. It's not just about expressing affection. It's ultimately a drive that naturally pushes a person to be concerned with more than just himself. It urges spouses to be concerned about each other. And with the children that sex creates.

    Homosexuality radically deviates from the nature of sex. It has no capacity for children, which is a reflection that it does not create selflessness, but rather encourages selfishness.

    Culturally, we've been divorcing sex from parenthood and responsibility for several decades now. This has been a major contributing factor to the moral decline and increase in violence in our society. Saying that homosexuality is acceptable and even praiseworthy as many would have it, has the effect of solidifying this divorce and further worsening our moral decline.

    Far from "having the moral high ground", Proctor and Gamble is engaging in pandering and doing Americans (both gay and straight) a real disservice. While I'm not going to boycott P&G, I do think the moral outrage the boycotters have is well-placed.

    Kevin, I suspect you're getting diverse emails on this topic, some perhaps are unfortunately rude. Although I profoundly disagree with you on this, I do appreciate your work and service. And I have no wish to silence you. I merely hope that you give serious consideration to arguments against your position on this sensitive topic.

    We give serious consideration to every argument, even when we disagree. And for the record, almost none were rude. Contentious, yes. But not rude.

    Another MNB user wrote:

    If P&G has in fact taken a public position on a statute to exempt gays and lesbians from certain rights, they are open targets for opposition.

    P&G undoubtedly has gay employees and customers. But keep in mind, they also have customers and employees who see the biblical concept of a marriage between a man and women being challenged on a daily basis. This is an issue that people on both sides remain very compassionate about. You can not fault either side for taking a position and if a large consumer driven company (P&G) takes a vocal or public position in favor of supporting gays and lesbians at any level, they are not exempt from an alternative point of view, opinion or boycott.

    We agree that by taking a position, P&G has opened itself to criticism. We’d also take issue with one word of this letter: we think that both sides are “passionate” about the issue…but we’re not sure that “compassionate” would describe everybody’s feelings about this.

    Another MNB user wrote:

    P & G also has many customers and employees who value traditional marriage as it exists by law in our country today. My guess is that this number far outweighs the other group.

    Actually, isn’t that beside the point? P&G isn’t taking a position in the gay marriage debate – it isn’t even going as far as endorsing the “states rights” position taken by Vice President Cheney. It is the two pressure groups that are creating the linkage and trying to box P&G into a corner.

    That said, we’re not sure we agree with your assessment of how the majority of Americans think. We think that the vast majority of Americans 1) believe that gay people are entitled to the same civil rights protections as everyone else in this country, and 2) are uncomfortable with or opposed to the notion of gay marriage. This vast majority needs and wants to reconcile those two opinions, and to do so without pressure and threats of retribution from one side or the other.

    Another MNB user wrote:

    I think you are being a little harsh on these groups that are only standing up for what they believe in. The way the article is written it would lead you to believe that if you are a gay or lesbian U.S. Citizen you will be stripped of your civil rights. Reality is, these people as individuals will have the same rights as you and me. The statute is declaring that gays and lesbians would not have preferential treatment because of their sexual orientation. When it comes right down to it, if they were discriminated against for any reason they would already have the same recourse you and I have under our current system. These two groups speaking out against P&G are firmly rooted in their beliefs. Their core foundation revolves around Christianity and family, and they feel both are being threatened by this movement. They aren't saying we should condemn these people individually, they are simply exercising their freedom of speech and stating they don't support the gay and lesbian platform. The beauty of freedom is we have the ability to listen to them and decide whether or not we agree. I would lose respect for any organization who doesn't stand up for what they believe in and I shudder to think anyone should lose their freedom of speech because some or even a majority don't agree.

    Sure, we were harsh. But, we think, no harsher than those groups were in their attempt to instigate a boycott of P&G’s products…

    One MNB user, echoing an opinion registered last week by another member of the MNB community, wrote:

    I enjoy reading your newsletter each day, however, I am surprised that you would wade into a debate on social issues simply because it involves P&G. It doesn't fit with the ostensible mission of your newsletter and doesn't sit well with at least one reader. If I want your views on social issues, I would look forward to reading and debating them on a political or social blog. As for this newsletter, I would encourage you to stick to the reporting of retail news items and leave the social discussion for other sites.

    As we said last week, we agree that this isn’t “safe” territory for an online B2B newsletter like MNB…but on the other hand, it seems to us like a legitimate discussion to have.

    Today, it’s P&G. Tomorrow, it could be any other business, for virtually any other position. At the very least, retailers and manufacturers have to think about the environment in which they operate.

    Sure, it’s the groups’ right to try and organize a boycott. But again, it seems to us that it is a perfectly legitimate topic for conversation. It isn’t just a social or cultural issue. It is a business issue, and has the potential for becoming a much bigger one.

    And yet another MNB user chimed in:

    I thought we had anti-discrimination laws? Do we really need separate laws for each and every type of citizen? I don't know anything about the law that is being discussed, only that I don't think we need separate laws for different classifications of people. AM I MISSING SOMETHING BEHIND THIS LAW?

    We agree that gays and lesbians should be covered under existing bias laws. But the existence of hate crimes against gays suggests that maybe greater attention is required.

    We wish that weren’t the case.

    There were exactly two members of the MNB community who wrote in to agree with us.

    One MNB user wrote:

    Kudos to P&G for taking the high road. I will visit their website & make a list of P&G products & make certain I purchase them.

    Remind me, what part of conservatism is compassionate?

    And another MNB user wrote:

    On your comments regarding Proctor & Gamble's position. AMEN!

    We hope that this discussion generates light as well as heat…and that we all end up with levels of compassion that equal our passion.
    KC's View: