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    Published on: February 4, 2005

    The Japanese government has confirmed the death of a man there from Variant Creutzfeldt-Jakob Disease, which is the human form of bovine spongiform encephalopathy (BSE), better known as mad cow disease.

    The man died last December. It is believed he contracted the disease during a one-month visit to the UK in 1989, though Japanese officials have not ruled out the possibility that he could have gotten it in Japan. Bloomberg reports that at least 148 people have died in the UK since 1990 from the human variation on the disease.

    Ironically, the Japanese government is scheduled to have a scientific conference next week to discuss what steps ought to be taken toward allowing US beef into the country. The import of US beef has been banned since the discovery of a case of mad cow disease here more than a year ago, though the Japanese have said they would resume imports of cattle aged 20 months and younger if the animals' age can be confirmed.

    At the same time, two US reports that will examine mad cow disease in Canada are expected to be completed next month, as the Bush administration moves toward reopening the US border to Canadian beef. Two cases of mad cow have been found in Canada in the two months since the US announced that it would begin allowing Canadian cattle into the country.

    And the CBC reports that tensions about mad cow disease are running so high that truckers in Canada are concerned about potential run-ins with protestors who could cause problems for the first shipments of cows over the border.
    KC's View:
    The one thing you can pretty sure about when it comes to this story is that there’s some new news breaking almost every week…and it almost never is news that makes you feel good about the safety of the food supply.

    Published on: February 4, 2005

    ACNielsen projects that there will be vastly different eating experiences taking place in Boston and Philadelphia this weekend during the Super Bowl, as residents indulge in local specialties.

    “It appears that scrapple & mush, a dish that dates back to the earliest Pennsylvania settlers and is now available in grocery stores, may be on the menu at Eagles’ fans Super Bowl parties,” reports ACNielsen. “The product enjoys a 14 percent bump in sales in the Philadelphia area the week leading up to the Super Bowl. In Boston, fans are likely to be dining on fresh and make-it yourself pizzas. Refrigerated deli pizzas (+54 percent), frozen pizza crust (+23 percent), shredded cheese (+16 percent), and pizza sauce (+13 percent) all show strong sales the week leading up to the Super Bowl.”
    KC's View:
    Scrapple and mush – that’s what the Eagles defense is going to look like by the fourth quarter.

    Published on: February 4, 2005

    About 10 days ago, MNB reported on a controversy surrounding the Vermont Teddy Bear Company, which for Valentine’s Day came up with something it called the “Crazy For You” bear, dressed in a straightjacket and bearing commitment papers.

    Some were not amused. Petitions were circulated, and Vermont’s governor called the promotion “very insensitive” to people with mental health problems, a sentiment echoed by numerous state legislators, medical professionals and mental health advocates. Eisabeth Robert, the president of Vermont Teddy Bear, is on the board of Vermont’s only teaching hospital - a position some would like her to lose.

    Even as the controversy built, the company said it would keep selling the bear, which retailed for about $70.

    Now come two conflicting reports.

    The Wall Street Journal reports that the bear is no longer for sale on the company’s website…and that mental health advocates are declaring victory in their efforts to pressure the company to stop offering it for sale.

    The New York Times, however, has another rationale for the fact that you can’t get the Crazy For You bear – it is sold out.
    KC's View:
    We hope the NYT has it right. Hate to see yet another victory for the humorless.

    Published on: February 4, 2005

    Retail Forward's Future Spending Index projects that February consumer spending, declined to 100.9 from 104.9 in January (which was its highest level in six months).

    "Following the healthy post-holiday bounce in spending, consumers appear ready to take a break in February," said Steve Spiwak, an economist with Retail Forward. "The expected pause reflects the recent stock market retreat, less home buying and the fading stimulus of holiday gift cards. However, spending should gain some support from early tax refunds."

    This month's ShopperScape also suggests that Valentine's Day buying will not deliver much of a seasonal boost to spending in February. Moreover, spending may be restrained somewhat by the outpouring of charitable contributions to tsunami victims.

    The greatest decline was shown in what Retail Forward defines as “down market households’ that make less than $22,500 a year, but reduced spending also was projected for “middle market households” (annual income between $22,500 and $75,000) and “up market households (more than $75,000 a year).
    KC's View:

    Published on: February 4, 2005

    There’s a very good interview in QSR with Chipotle founder Steve Ells, in which he discusses some of the differential advantages the chain seems to have. (Chipotle, of course, is now owned by McDonald’s…though the burger chain has been making noise about spinning it off on its own.)

    Among the topics addressed by Ells:

    • Choice. “When you keep the menu simple, you can really focus on just doing a few things really well. The more things you have, the more distracted you can become. That said, there are a lot of combinations people can make from the ingredients on the line.

      “In fact, that was one of the early criticisms people [had when] looking at Chipotle – that there were not enough choices. In fact, just the opposite has happened. People come several times a week. They change their choice of salsa, or they have a bowl rather than a burrito. They change it up a bit.”


    • Building The Brand, Both Inside & Outside. “The atmosphere says something about the brand beyond just decoration. It’s architectural in nature. In our case, it uses very simple materials like plywood, concrete, and steel. Through architecture and good design, you elevate these materials to something extraordinary.

      “It’s the same for the food at Chipotle. We use basic building blocks, such as rice, beans, and meat, but it’s the use of great cooking techniques and fresh herbs and citrus that elevates those ingredients to something extraordinary.”

    KC's View:
    We think the world of Chipotle, and believe it is a good example of very focused retailing.

    These are excellent points made by Ells. The idea that connecting environment and product helps to build the brand is one that escapes a lot of retailers…and we also agree that the notion of choice is relative.

    What’s more important? Having the most choices? Or the right choices?

    Published on: February 4, 2005


    • The Dallas Morning News reports on how grocers in that market are struggling to compete with Wal-Mart, which continues to grow there and is the only food retailer with a larger than 20 percent market share.

      Companies like Albertsons are trying to compete on price, while HEB’s Central Market and Whole Foods are coming from the other end, focusing on higher end foods and services.

      In the case of Albertsons, the company has “converted five unprofitable stores to its new Super Saver format last year and opened four more last= week. Mike Clawson, president of Extreme Inc., the new Albertsons division, said so far ‘we're thrilled with the results.’

      “He said the chain intends to add stores in 2005 and may not limit its future expansion to former Albertsons locations. These stores are better able to compete because they are no-frills and have about 60 percent of the product of a traditional Albertsons, he said. ‘We may have three kinds and sizes of Heinz ketchup instead of six,’ he said.”

      And, the Morning News reports, “Central Market is responding to competition by introducing a private-label organic line of foods. Whole Foods developed its "365" and other private-label brands to help keep prices lower in its stores and expand organic selection to more product lines.”

      Kroger is trying to apply learnings from its Fred Meyer division in the Pacific Northwest to the Dallas market, expanding its nonfood offerings as a way of creating a differential advantage.

      It isn’t easy, though. Eighteen of Wal-Mart’s 96 stores in the area are Neighborhood Markets, making it the place with the highest concentration of the format.


    • Wal-Mart, looking to build a store in Vancouver, British Columbia, and anxious to appease local officials concerned about a Wal-Mart coming to town, has revealed that it will build a new, $30 million prototype – environmentally correct, with windmills, geothermal heating and 250 dogwood trees.

      The design is a response to the city council’s challenge to Wal-Mart to create the “greenest” possible design. While the company has built “green” stores in the US, none of them have had all the features of the Vancouver proposal.

      Wal-Mart’s opponents say that while the design may be more environmentally correct, it still will cause an increase traffic and hurt local businesses.

    KC's View:

    Published on: February 4, 2005


    • IGA announced the names of its 2005 International Retailers of the Year: Alan Atwood of Payless IGA in Coeburn, Va.; Kevin Brouillard of Tri Town IGA Foods in East Lyme, Conn.; Brendon Goddard of Long Gully Supa IGA in Long Gully, Victoria, Australia; Tim Myers of Roselawn IGA in Roselawn, Ind.; Louis Young of Payless IGA Market in Copperopolis, Calif; and Paul VanderJagt of Van’s Evergreen IGA Plus in Billings, Mont.

      The winners were chosen for the annual award from the more than 4,400 IGA Retailers worldwide, and will be honored at IGA's 2005 International Retailers of the Year Awards Dinner Ceremony held on Tuesday, March 1 at the Marriott’s Rancho Las Palmas Resort, Palm Springs, Calif.


    • A new study from Witeck-Combs Communications and Packaged Facts estimates that the combined 2005 buying power of the gay, lesbian and bisexual communities will reach $610 billion, $30 billion more than the 2004 number.

      "We've long known that gay Americans come from all walks of life and are found within our entire economy. Accurate measures of buying power reflect the dynamic contributions we make as consumers, employees, investors, executives and entrepreneurs," said Justin Nelson, co-founder of the National Gay and Lesbian Chamber of Commerce.

      However, experts say that the relative affluence of the gay and lesbian community can be attributed that both partners in most same-sex couples work, driving up the household income level; they also tend to spend their money differently, since many of these households do not have children.


    • Alimentation Couche-Tard, the Canadian convenience store company, has acquired 19 units in Georgia that operate under the Pump N Shop banner.

      Terms of the deal were not disclosed. The company said that the acquisition is in keeping with its broader expansion plans for the southeast US, where it hopes to soon operate as many as 500 stores. This purchase gives Couche-Tard 274 stores in the region.

    KC's View:

    Published on: February 4, 2005


    • Kraft Foods has created a new position - vice president, nutrition – and named Richard Black, the executive director of the International Life Sciences Institute, to the job. His role will be to develop and implement nutrition programs throughout the company.

    KC's View:

    Published on: February 4, 2005


    • Wal-Mart reported that January total sales rose nine percent from the year-ago period to $19.80 billion. Sales at Wal-Mart Stores were $13.17 billion, up 10.7 percent, while Sam's Club sales were $2.51 billion, up 1.4 percent over last year. International sales grew 8.6 percent to $4.12 billion.
      Company same-store sales were up 2.5 percent.


    • Target Corp. reported that January total sales total sales grew 13.6 percent compared to last year, reaching $3.13 billion. Same-store sales were up 9.4 percent for the month.

      For the fourth quarter, Target’s total sales rose 11.6 percent to $45.68 billion, with same-store sales up 5.4 percent.


    • BJ's Wholesale Club reported that sales for January 2005 increased by 4.9% to $495.9 million from $472.6 million in January 2004. Same-store sales were up 1.9 percent.


    • Family Dollar Stores said that total January sales rose 13.5 percent to $385.8 million, with same-store sales up 5.2 percent.


    • Dollar General Corp. reported that total January sales increased 14 percent to $547.4 million, with same store sales up 5.1 percent.

      For the fourth quarter, same-store sales rose three percent and total sales increased 11.7 percent to $2.2 billion. For the year, same-store sales increased 3.2 percent and total sales rose 11.5 percent to $7.7 billion.

    KC's View:

    Published on: February 4, 2005

    Dean Wormer, better known as John Vernon, died yesterday…which, in the final analysis, is actually worse than double secret probation. He was 72.
    KC's View:

    Published on: February 4, 2005

    MNB reported yesterday about a new study saying that while consumers scanned $70 billion worth of self-serve transactions in 2003, that amount will nearly quintuple to $330 billion by 2007 – and will find its way into new segments, such as hotels, c-stores, fast food outlets, even the post office.

    In our commentary, we continued to express our concern that human interaction - which can be a differential advantage – is being abandoned in the name of efficiency…though we conceded that we often use it because it saves time.

    We got a number of emails on this subject…

    MNB user Glen Terbeek wrote:

    The next step to self-scanning is true consumer direct without the store. Done by an "agent" connecting the shopper to the things they need/want from the manufacturers for a fee. This will happen if the store doesn't create any value above and beyond distribution value. It will be cheaper because a lot of costs and promotional monies will be eliminated.

    According to the WSJ today, the two highest market caps for Internet stocks are Google and eBay. Both are companies that get a fee for connecting consumers to what they want.

    Interesting!


    And MNB user Dan Raftery wrote:

    A comment on your position about the risk of losing human interaction at supermarket self checkouts. You are at least partially a victim of your own expectations, which have evolved over several years of experience in a cost conscious industry. With the exception of the extremely excellent retailers you mentioned as your personal haunts, you probably expect to have human contact at most stores only with the cashier.

    And that particular interaction is difficult to make fun, to humanize, to enjoy. After all, that person could make a mistake at your expense and for sure will take your money. How fun is that? I've always wondered why we hung on to the technical name for checkout - Point of Sale. The selling is done by then. It's really the Point of Transaction. Maybe its because that sounds terrible and of course the acronym stinks.

    So, as you continue to expand your self-administered points of transaction (how about including pay-at-the-pump in your list of personal experiences), you will become more accustomed to this as a fact of life in our society. Remember back to your first ATM transaction. Did you long for the human touch? Think about your most recent ATM experience while traveling. Were you delighted to find a friendly terminal in a far away city?

    One more thing - self checkouts can still involve human interaction. I've seen several recent attempts to get the cashier away from the monitors and out in front of the checklanes when they are empty. What a great way to interact with shoppers as they cruise by. And maybe even point them in the direction of another sale.


    One MNB user wrote:

    Are you conflicted at all on this issue?

    I would think a strong proponent of "human interaction" at retail (at least in writing) would walk the talk and take advantage of the same in their own business transactions whenever and wherever possible (even if the self scan= option were available). If "human connections" are so differentiating and advantageous, why undermine the very thing you support?

    I don't mean to come across as harsh. In all honesty, what's happening isn't that unusual. What we "say" and what we "do" are many times not in sync when it comes to our shopping desires and patterns. That's what makes consumer research in the area of behaviors such an inexact and (oftentimes) unreliable "science." Many of us would agree with what you're saying. It just seems like the thing to do. Be personable as a business. Get involved with the customer - we'll even shop your store if you do. That must be the key to success. When push comes to shove; though, we want the cheapest price, and we want to be done as quickly as possible with our transaction. No muss. No fuss. If I want help, I'll ask for it. Other than that, just leave me alone and let me get done and get out of here.

    That's also why business is so taxing and challenging - even frustrating. There's no one right way to get the job done. Trying to satisfy a consumer that's "talking out of both sides of their mouth" can be difficult at best. Just look at all the personable, downtown, family-run business establishments that once thrived on the very ideals you propose. They were experts in their craft. They knew you by name. Your credit was always good, etc...Most have been relegated to "the back roads of our minds" and line the streets in a quaint little place called "the good old days!"


    Okay, we’re a hypocrite.

    We were specifically critical of Home Depot employees as being “useless anyway,” which raised the ire of MNB user Jim Duban:

    I was in a Home Depot store and the cashier who was doing the best she could....with the knowledge she had....and with the limited opportunities for a good part-time job for a mother of two....who does not have a college education...who drinks beer instead of fine wines…

    Consultants and people who have a large inter-net forums to vent their personal opinions without thinking how it hurts others....are probably useless anyway!"


    You’re right. We were harsh. We should have been more critical of Home Depot’s management, not the people who work there.

    MNB user Charles Owen wrote:

    Here in Roeland Park, Kansas this is definitely NOT the case. The Home Depot employees are friendly, knowledgeable and always willing to stop what they are doing to help find whatever I am looking for.

    MNB user Dan Graham wrote:

    A key point is that the retailers say that the number of transactions through self-checkout is near 40%. I would imagine that the percentage of dollar sales would be much lower, since customers with large orders are less likely to go through a self-checkout lane. And the customers with the large orders are also more valuable, and should be the customers smart retailers are taking care of with great service. Of course, the same valuable customer may only buy a few things on another occasion and go through self checkout, so poor service anytime is risky.

    MNB user Maury Demner wrote:

    Prior to developing an interest in supermarkets, I spent six years working in retail banking. The parallels are uncanny. My employer, like most banks, focused on migrating customers to using ATMS and Online banking in order to keep costs down. They succeeded only too well and now that banks are trying to transform into financial solution centers and develop relationships with their best customers, they have to fight just to get them to walk in the door.

    MNB user Al Hamman wrote:

    While I have to admit I use self-checkouts on occasion, I have two concerns:

    The fewer personal touches a retailer has with its paying audience, the colder the shopping experience becomes—hence the more commodity-oriented the purchase becomes.

    Why isn’t there an automatic 2%-5% discount for me becoming a temporary store employee and reducing the retailer’s overhead by 1 checker and 1 bagger?


    MNB user Jay Spivak wrote:

    I resent self scanning. If the consumer is going to perform a task of labor for the retailer, then the consumer should receive a discount. First, it was bag it yourself... now it's self check out. Perhaps we will should stock the shelves next? I will admit that I am guilty of using self scanning ... but, the retailers know how much people hate waiting on line... so they take advantage of that by making the self scan available. The reason people use it is because it's the fastest way to get out of the store with your purchase.

    The alternative is to stand on line for 20 minutes at one of the two registers with a human operating it!

    Have you seen the movie "The Matrix" .... Call me cynical .... But that's where we will be some day.


    Another MNB user wrote:

    It’s not surprising that self checkout is increasing and that it will continue to do so. In our area it is sometimes the only option available if you want to pay for your groceries. This is not a program of consumer choice. This program is a business choice aimed at reducing labor. In the process we are losing a little bit of our humanness and community.

    Skills I've had to learn that I didn't want: Pumping Gas. Soda Jerking (using soda machines in quick serve restaurants). Salad Making (in a different set of restaurants). Banking (thanks to ATM my favorite tellers became redundant).

    Yes, sometimes these skills are convenient however I didn't learned all this stuff because I asked for it. I learned this stuff because I had no choice.
    KC's View:

    Published on: February 4, 2005

    It’s the final weekend of football this season, with the New England Patriots playing against the Philadelphia Eagles in Super Bowl XXIIVVCCXIDVIIXXXXCVIIXW. Or something like that.

    Apologies to all our readers and friends down in Philly, but it isn’t going to be pleasant.

    Patriots 34 – Eagles 17.

    And that’s only if the Pats’ defense lets up in the fourth quarter.

    Scrapple and mush, baby. Scrapple and mush.

    And when it’s over, there will be just one thing to think about.

    Spring training will begin in 11 days.

    Thank goodness.

    So, it now appears that Martha Stewart, when she gets out of prison next month, will do a version of “The Apprentice” for NBC. It will be a companion piece to the Donald Trump programs, with special touches deemed appropriate to Stewart’s background and style.

    Like, she probably won’t pay the winner any salary, like she refused to pay her gardener that time out in the Hamptons.

    Instead of a boardroom, she’ll have a kitchen.

    And when she dismissed someone from the game, instead of saying “you’re fired,” she’ll say, “you’re indicted.” And instead of a cab, there will be a paddy wagon.

    Sounds like “Must See TV” to us.

    Speaking of compelling television, if you’ve been watching “24” this season, you’ll probably agree that it has been hold-your-breath television from the first minute, and has been more of a roller coaster ride than any of the first three seasons.

    But here’s our question.

    Do the writers at “24” have a problem with women?

    Because it seems like almost every woman ever portrayed on the show is either troubled or a traitor. Except, of course, for Jack Bauer’s daughter, Kim. Who kept getting into ridiculous scrapes, like getting cornered by a cougar in the mountains while her dad was trying to save the world.

    We don’t know anyone who wasn’t rooting for the cougar to eat her.

    Saw a terrific movie last weekend: “Hotel Rwanda,” which stars Don Cheadle in the performance of his career – which is saying something, considering he’s been outstanding in so many supporting roles. But now he gets the lead…and is masterful at conveying dignity, compassion and frustration through his eyes and every pore of his skin. The movie is a sobering portrayal of a true story about Paul Rusesabagina, a hotel manager who back in the early nineties housed over a thousand Tutsis refugees during their struggle against the Hutu militia in Rwanda – while the world ignored the genocide taking place there.

    Strong stuff.

    Finally, we have a wine story to tell you.

    Last Saturday night, Mrs. Content Guy wanted a glass of wine. There was nothing open, so we went into the rack and found a bottle of King Estate (Oregon) 1998 Domaine Pinot Noir, which was smooth, delicious and fabulous. We probably had half the bottle, and put it away.

    The next evening, friends stopped by, and we sat around the fireplace and had a bit of wine. We finished up the previous evening’s wine, then finished a bottle of Beaux Frères Vineyard 2001 Pinot Noir, also from Oregon, which was almost as good as the first bottle (which is to say it was merely great).

    Now, we have to be honest. We’re not sure where these wines came from. We’re pretty sure that they were given to us as gifts by someone in the MNB community (you know who you are!) because we don’t remember buying them, and our wine racks are filled with wines that nice folks have sent us. (it sounds like we drink a lot of wine, but it honestly is hard to keep up.)

    But here’s why we’re really embarrassed. When we checked, we discovered that the King’s Estate Pinot Noir retails for about $50, and the Beaux Frères for about $60. (Another reason we’re pretty certain that we didn’t buy them…)

    Yikes!

    So much for last week’s comment about rarely drinking wines that cost more than $20. Within 48 hours of having written that sentence, we’d polished off two bottles worth a total of $110…and didn’t even know it.

    However, a friend of ours once said that the only way to really enjoy an expensive bottle of wine is to have no idea what it cost when you sip it. You enjoy the wine for what it is, not for the price tag.

    Well, if that’s the way to do it, we seem to have it nailed down pretty good.

    And thanks again to the MNB user who was so kind to us.

    Have a great weekend. Sláinte!!
    KC's View: