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    Published on: November 11, 2004

    While the folks at Wal-Mart headquarters in Bentonville, Arkansas, like to maintain that they don’t really understand why the media pays so much attention to them, Wal-Mart CEO Lee Scott and many of his top managers cooperated with a two-hour CNBC documentary that aired last night and focused on the company’s expansion and growth. It went behind the scenes at Wal-Mart’s operations here and abroad, and featured a long interview with Scott.

    While the CNBC piece was fairly even-handed and willing to accept Scott’s explanations for Wal-Mart’s various policy decisions, PBS’s Frontline is scheduled to run its own documentary next week: “Is Wal-Mart Good For America?” The Frontline episode looks like it good be more confrontational, examining Wal-Mart’s offshore and outsourcing practices and looking specifically at its Chinese operations.
    KC's View:
    If CNBC reruns the Wal-Mart documentary, you should check it out…if only because it gives you a real sense of how the company operates.

    Some people will look at Wal-Mart as the great American success story. Others will see it as a relentless bully. For the record, we fall somewhere in the middle – the company is a great American story, but there is something about it economic power and cultural ubiquity that we find disquieting. (But temperamentally, we feelthat way about all big institutions, not just Wal-Mart.)

    Published on: November 11, 2004

    Kroger will open a 105,000 square foot supercenter in Cincinnati today, looking to the large format was a way of better competing with the Wal-Mart juggernaut.

    The Cincinnati Post reports that the supercenter will include “a freestanding Fred Meyer jewelry store inside the store; a Starbucks coffee shop; a sushi bar; an olive and antipasta bar; and a department-store style cosmetics and beauty counter. The store also features full-size deli, bakery, specialty foods, wine and kitchen housewares sections as well as a digital photo center, gas pumps and drive-through pharmacy.”
    KC's View:

    Published on: November 11, 2004

    The Food Marketing Institute (FMI) has launched a new website designed to address the obesity issue in America, serving as “a one-stop shop for FMI members and consumers trying to make sense of the vast amount of information currently available on the subject. It is broken down into three major sections: Obesity; Weight Loss, Weight Control and Dieting; and Promoting a Healthy Lifestyle.”

    In addition to defining obesity in children and adults, the site details the health risks and economic costs of obesity. It allows consumers to determine if they are at a healthy weight and presents the National Institutes of Health’s key recommendations for treating obesity. The site also allows consumers to gather personal information such as their recommended caloric intake and body mass index, and provides consumers with information on some of today’s most recognizable buzzwords: carbohydrates, calories and trans fats. Additionally, it explains how diets work and offers a comparison of some of the most popular contemporary diets.

    “With the majority of Americans being classified as ‘overweight’ or ‘obese,’ we found it important to design a tool to help FMI members and their customers explore the many components to this epidemic,” said Dagmar Farr, FMI group vice president of legislative and consumer affairs. “Consumers seeking answers now will have a central resource to consult for the information that they need.”

    To visit the FMI Obesity Web site, go to the FMI home page (www.fmi.org), highlight the “For Consumers” section and click on “Obesity Resources.”
    KC's View:

    Published on: November 11, 2004


    • Delhaize-owned Food Lion announced that it plans a market-wide remodel of all its stores in the Greensboro, N.C., area, beginning in the next few weeks and ending next year.


    • The New Jersey Senate Judiciary Committee has approved a so-called “cheeseburger bill” that would prevent civil lawsuits filed against fast food companies over the obesity issue. If, as expected, it is approved by the full legislature and signed by the governor, it will make New Jersey one of more than a dozen states with such laws on the books.


    • The US Supreme Court is preparing to hear oral arguments in two cases that could pave the way for the unlimited shipment of wines across state borders.

      The two specific cases involve the states of New York and Michigan, and the claim by wineries that their laws are discriminatory. According to the Sacramento Bee, there are two competing constitutional guarantees in play here – one that prevents states from discriminating against out-of-state businesses, and another that allows states to regulate the sale of alcohol.

    KC's View:

    Published on: November 11, 2004


    • Wal-Mart’s Asda Group in the UK has created a new position that will be in charge of coordinating health-oriented approaches – especially surrounding obesity – across its whole portfolio of products and services.

      The company said in a statement, “Obesity is a huge issue for us; we all have to be more responsible and look at what we sell in our supermarkets. We are going one step further than most by getting someone in to look after the whole area.”

    KC's View:

    Published on: November 11, 2004


    • Kmart announced that it will launch an overhauled website later this month, hoping that a combination of new traffic and sales will invigorate the company in its attempt to survive.

      According to the Cincinnati Post, “the new Kmart.com will feature new products, buying guides, expanded product details and streamlined browsing options. It also will include holiday ideas and 500 reasons to shop at Kmart, including a daily sweepstakes in which customers can win $500 in merchandise.”

    KC's View:

    Published on: November 11, 2004


    • Whole Foods reported that its fourth quarter profit increased 27 percent to $30.2 million, compared with $23.8 million a year earlier. Sales increased 24 percent to $927.3 million.


    • Starbucks announced fourth quarter earnings of $103.4 million, compared with $69.6 million in the comparable period last year. Revenue for the quarter rose 34 percent to $1.45 billion, up from $1.08 billion a year ago.


    • Shoppers Drug Mart, Canada’s biggest drug store chain, announced third quarter sales that were the equivalent of $1.6 billion (US), up 9.1 percent from the same period a year ago, and profits of $77 million (US), up from $63.6 million (US) a year ago. Same-store sales were up 6.9 percent.

    KC's View:

    Published on: November 11, 2004

    …will return.
    KC's View:

    Published on: November 11, 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 now-defunct FMI Advantage. As a regular MorningNewsBeat feature, the folks at FMI have graciously agreed to let us reprint some of these columns.


    One of the great things about this job is that people send you stuff. For free. And sometimes, it actually is stuff that you want and can use.

    Just such a package arrived the other day when I got a copy of a new book, The Customer Service Intervention, by Bruce Tulgan and Carolyn A. Martin, both of the Rainmaker Thinking consultancy.

    The book intrigued me for a couple of reasons.

    First, the title. "Intervention" is an unusual term to use in this context, because it is more often used in cases where someone is addicted to booze or drugs, and the people around him or her gather to "intervene," or make that person face up to their addiction and deal with it. In this case, "intervention" seems to imply that retailing has become addicted to bad service, slipping into bad habits and procedures through neglect and lack of character; the suggestion is that it is time to make many in retailing confront this flaw and deal with it.

    No argument there.

    The second thing that intrigued me was that a customer service book was being co-authored by Tulgan, a guy who made a name for himself just a few years ago with his perspectives on "Generation X" - what it expected from the workplace, and how the workplace could respond to and cater to these young people with a "free agent" mentality. How did Tulgan find himself in the customer service business? Was it a question of a consultant looking for a new niche to fill, or something else?

    I shot Tulgan an email and told him I’d like to get together to talk about these and other issues, and suggested that he pick a retailer near his New Haven, Ct., office where we could meet; I only asked that it be a retailer that he would identify as having exemplary customer service, and it didn’t have to necessarily be in the food business.

    His choice intrigued me: Krispy Kreme.

    Now, there are a lot of good reasons to get together at a Krispy Kreme, most of them having to do with coffee and some of the best doughnuts on the planet. But I never thought of the doughnut franchise as being an exceptional provider of customer service.

    But, in fact, it is. At least according to Tulgan.

    Clad in a black sweater, the youthful looking, thirtysomething Tulgan settled in with a large cup of black coffee and surveyed the scene. Unlike many customer service experts who focus on motivational techniques, he wanted to talk about something else, something unexpected.

    "When you come to a place like Krispy Kreme, you see that all the right systems are in place, the standard operating procedures are vivid, and the execution is consistent. Why? How?

    "This is an example of a place where the role of the supervisory manager is obvious to me, but probably isn’t to most customers. You can see that there is a very careful selection process in place, just based on who is behind the counter and how they're behaving. You can see that the basic training has been done, that people aren't behind them counter, fumbling, learning. There are standard operating procedures, and my guess is that nobody is allowed to stand behind that counter before they've learned those standard operating procedures."

    Tulgan said that while a lot of self-styled customer service gurus will stress the personal connection that can be created between employees and shoppers as being critical to establishing a customer service culture, in fact this isn’t necessarily what consumers want. Gesturing at the young people behind the counter, he said, "These people aren't smiling and trying to engage you in conversation. In fact, they’re trying to keep every interaction brief, straight and simple. There are very few words exchanged." In essence, they are just doing their jobs - getting people through the line quickly and efficiently, making sure that the inventory is refreshed constantly, handing out samples, and keeping things clean as possible.

    Something else you can see, Tulgan said, is that you can't see the supervisor - but that procedures and operations are so clear and so ingrained that they come off seemingly without a hitch. In this case, he said, the key is making sure that employees understand their responsibilities and how and where they are empowered.

    "My view about discretion," Tulgan said, "is that 100 percent discretion is tantamount to zero discretion, that in fact it is unfair to employees to pretend to give them 100 percent discretion because most employees in a customer service environment are not prepared to make judgments at all levels. In fact, it is far more effective to create boundaries within which people have complete discretion, and that's what is at work in most good customer service environments."

    "My take," he said, "is that the supervisory manager is the most important person in the workplace." It is this manager, he said, who has to take responsibility for selecting the right people, training them, knowing their limits and strengths, and creating an environment that feeds their souls as well as their bank accounts. This latter talent is an enormous advantage in a marketplace where many companies are looking for ways to cut labor costs; by really understanding employees, a good manager can figure out how to incentivize them even when there is no money involved.

    "We come to customer service from two trajectories," Tulgan said. "The first was that we focus on young people in the workplace, and we work with a lot of retail organizations, and because of that, for a couple of years now, a lot of our retail clients have been saying to us, 'how do you teach customer service to teenagers?'" How do you get them to learn the skills, how do you get them to execute?

    "Our focus has, over the past few years, shifted not away from the generational stuff - our research lens has continued to be the generational difference - (but) has found that the trends we identified in young people in the nineties has now spread across people of all ages. The 'free agent' attitude that was had by the young upstarts in the early nineties, well, now everybody is thinking that way. But what we've come to is the change in the workforce mindset has put so much pressure on supervisors…and so I've spent most of the past three years doing boot camps for managers, training managers in hands-on supervisory skills.

    "Given that managing people has become a day-to-day negotiation, what kind of techniques do managers need to get people to perform?" Tulgan asked. "And we sort of brought them together in The Customer Service Intervention.”

    But there's a difference, I pointed out, between a supermarket and a doughnut shop - one is a complex organism, the other comparatively simple. But Tulgan said that while this is true, some business keep simple operations simple, while others complicate simple business by not doing them right; other businesses are more complex, but management doesn’t figure out how to simplify them.

    And simplification, he said, often is a matter of systems - creating a reporting structure that breaks down a complex organism into manageable pieces.

    Tulgan left, and I stepped up to the counter to buy a dozen doughnuts to bring home for the kids. I watched the customer service imperative, even as I experienced it. Quick, efficient service. Civility without being either nauseating or obsequious. And doughnuts that ended up tasting great.

    Brief, straight, and simple. Not to mention tasty.

    Reprinted with permission from the Food Marketing Institute (4/2004).
    KC's View: