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    Published on: March 10, 2006

    • Apple Tunes has introduced a new feature on its iTunes website that takes the economic model in a new direction – subscriptions.

    The digital music and video service is working with Viacom’s Comedy Central to offer both The Daily Show with Jon Stewart and The Colbert Report either for $1.99 per episode, or $9.99 for a 16-episode multi-pass (which essentially gives viewers a month’s worth of episodes since the series each have four fresh episodes a week). If acquired on a subscription basis, the episodes download automatically as soon as they become available after broadcast.

    Apple’s iTunes already offers numerous other television programs both for video download (“Lost”,” “Desperate Housewives”) and for audio download (“Meet The Press”). But this is the first time that iTunes has essentially given consumers the opportunity to pay in advance for future, unaired episodes.

    • There are reports in both the New York Times and the Wall Street Journal this morning that is negotiating with three different Hollywood studios to create an online portal that will allow consumers to download both movies and television programs.

    If these negotiations are successfully concluded, it will mark two important business model changes for Amazon. First, it will put the online retailer into the business of allowing people to achieve immediate media gratification – instead of ordering products online and waiting for them to be delivered, Amazon will be getting into the iTunes arena.

    Second, Amazon’s service actually would leapfrog the iTunes offering, at least as it exists today, but getting into the movie downloads business. While music and television downloads have become commonplace, instant movie downloads have remained an elusive goal for media companies.
    KC's View:
    What does this have to do with day-to-day retailing concerns?

    We believe that these changes reflect a broader change in how consumers perceive the rules of acquisition; it raises the bar, changes their expectations. And retailers in virtually every venue need to pay attention to these trends to figure out how to take advantage of them…or, at the very least, how to appeal to the same shoppers who are changing their consumption and acquisition habits in other arenas.

    Published on: March 10, 2006

    The Milwaukee Journal Sentinel reports that Roundy’s Pick ‘n Save chain is paying close attention to complaints that have been made by customers about unfriendly personnel and rotten produce. The company has decided to take advantage of the consumers’ interest by using them as an ongoing focus group.

    Among the complaints raised by the customers: “Products were stocked too high on the shelves; the store wasn't always clean; some produce was rotten; employees were acting like customers were an imposition; and aisles were cluttered.”

    Vivian King, spokeswoman for Roundy's, told the paper that “company officials saw the complaints about the Pick 'n Save as the ‘perfect opportunity’ to hold focus groups with Parker's group to deliver the ‘best shopping experience as possible.’”

    The customers believe that the stores they complained about actually are markedly better since their concerned were aired.
    KC's View:
    Someone smart – we can’t remember if it was Feargal Quinn or Stew Leonard – once told us that the best customers are the ones who complain, because they are the ones that 1) tell you where you need to improve, 2) care enough about the store to make their feelings known, and 3) become advocates for the store once management makes the necessary changes.

    Published on: March 10, 2006

    Connecticut Democrats are pushing for what they are calling a Fair Share Health Care bill that would force retailers in the state with more than five thousand employees to pay at least $2.50 per worker per hour in health insurance benefits. House Democratic Majority Leader Christopher Donovan has been quoted as saying that the bill is necessary because Connecticut is subsidizing the richest company in the world.

    Supporters of the bill say that only Wal-Mart and Stop & Shop would be affected by the legislation, which is opposed by many of the state’s Republicans.
    KC's View:

    Published on: March 10, 2006

    The Times Of London reports that in the first few days of the trial of former senior Ahold executives, including ex-CEO Cees van der Hoeven, the defendants have said that they didn’t do anything that they knew to be wrong.

    According to the Times, van der Hoeven told reporters before entering the courtroom that, “It’s not the nicest time of my life, but I’m still going strong.” He said that he did not fear the outcome of the case. “If you can look at yourself straight in the mirror, you have nothing to be afraid of,” he said.
    KC's View:
    The issue, we’re afraid, isn’t whether van der Hoeven can look at himself in the mirror. It is whether he could look the company’s shareholders and employees in the eye, one by one, and tell them that he always looked out for their best interests in an honest and ethical manner.

    Published on: March 10, 2006

    The East Bay Business Times reports that “Safeway Inc. has reduced the number of products containing pseudoephedrine (PSE), a major ingredient used in the production of methamphetamine drugs,” cutting its in-stock position from 75 such products to 17, all of them only available from the pharmacist.

    "Reducing the number of products available and by placing these behind the pharmacy will do a great deal to ensure their use only for legitimate purposes," said Laree Renda, a Safeway executive vice president, in a statement.
    KC's View:

    Published on: March 10, 2006

    USA Today reports that despite the dairy industry’s use of advertising to suggest to consumers that regular dairy consumption is critical or at least helpful in weight loss efforts, “studies on dairy's role in weight loss have shown mixed results. And a new entry in the mix is an epidemiological study released Wednesday that says dairy consumption doesn't have an effect on long-term weight loss for men.”

    Not all studies agree. There is research – some of it, of course, funded by companies in the dairy industry – saying that people who have a moderate intake of low-fat dairy products were more likely to have a greater weight loss than those who do not. But the research is hardly unanimous, and some experts say that consumers have to be careful not to let their conclusions get ahead of the scientifically valid.

    Published reports say that the non-profit and pro-vegetarian Physicians Committee for Responsible Medicine has petitioned the Federal Trade Commission to stop the dairy-promoting weight-loss ads.

    KC's View:

    Published on: March 10, 2006

    It made a lot of news a couple of years ago when New York City signed an exclusive $126 million deal with Snapple, giving the company the right to sell its beverages from vending machines in city-owned buildings. This was in addition to a $40 million deal that put Snapple in the city’s public school cafeterias.

    The problem is that significantly fewer Snapples have been sold than expected – the city hoped to bring in an additional $36 million in commissions over the five-year life of the contract, but the pace of sales has been such that now the city thinks it will bring in perhaps $2.4 million over five years.

    Which means that the two sides are renegotiating the contract.
    KC's View:

    Published on: March 10, 2006

    Numerous published reports say that US Homeland Security Secretary Michael Chertoff is now saying that a deadly strain of avian flu could find its way to the US before the end of the year.

    Attributing the likelihood to birds’ migratory habits, Chertoff said “there will be a reasonable possibility of a domestic fowl outbreak" as migrating birds mix with ducks, chickens and other birds in the US.

    "If we get a wild bird or even a domestic chicken that gets infected with avian flu, we're going to be able to deal with it, because we've got a lot of experience with that," Chertoff said. "I can't predict, but I certainly have to say that we should be prepared for the possibility that at some point in the next few months, a wild fowl will come over the migratory pathway and will be infected with H5N1.”
    KC's View:

    Published on: March 10, 2006

    • Published reports say that a hospital in Scotland has been forced by public pressure to abandon a program that gave younger patients coupons that can be used at McDonald’s. Public sentiment deemed the initiative inappropriate since it essentially was sending children with health problems to restaurants that are contributing to childhood obesity levels.

    • Catholics in Omaha, Nebraska, will be able to eat corned beef this St. Patrick’s Day without concerns about sinning, according to local press reports.

    Their original concerns emanated from the fact that St. Patrick’s Day falls on a Friday this year – and during Lent, a religious season during which observant Catholics are prohibited from eating meat on Fridays.

    However, the local archbishop offered a general dispensation this week, saying that Catholics can eat corned beef next Friday without fear of sinning; instead, the bishop said, Catholics should skip eating meat on Saturday, March 18.
    KC's View:

    Published on: March 10, 2006

    • France-based Carrefour, the world’s number two retailer, reported that last year’s revenue increased 2.5 percent to the equivalent of $89 billion (US), with annual net income up 1.2 percent to $2.1 billion (US).
    KC's View:

    Published on: March 10, 2006

    We’ve had two stories over the past week or so that one MNB user connected in a way that makes a lot of sense. One story was about how Whole Foods plans to double its sales by 2010, and the other was about how college campuses are dramatically improving their cafeteria offerings. This MNB user wrote:

    Not sure about Wal-Mart really “getting it”, but it is why John Mackey can make statements about doubling the size of Whole Foods. It’s called the “Whole Foods Effect”…

    We reported yesterday about speculation that we’ve heard about the possibility that Supervalu might decide to sell off Bristol Farms once its acquisition of Albertsons is complete. MNB user David J. Livingston responded:

    Do you really think Supervalu would sell Bristol Farms? Just as they are getting into natural foods with their Sunflower format? And would selling off 12 or 13 stores really make much of a dent in their huge debt? I think Supervalu intends to keep the stores they bought…

    We waxed rhapsodic about Trader Joe’s the other day, which led MNB user Jack Cavanaugh to respond:

    I totally agree with the comments about why it's so much fun shopping at a Trader Joe's and how they maintain low prices, interesting sounding products and excellent customer service. However, they have (for us at least) an extraordinarily low hit rate of things we would buy again, so we are amazed at how they continue to succeed so well!

    We’ve been in conflict with some of the food industry’s biggest organizations over the National Uniformity for Food Act, which would have the effect of creating national food safety laws that would supersede state laws. Organizations such as FMI and GMA believe that national standards would be more effective, but we’ve confessed to having little faith in federal agencies in looking out for consumer interests…and we’re not sure that the industry helps itself in the long run with these positions.

    One MNB user responded:

    This food safety bill is written for and by the corporations. Just as Congress has gutted pollution laws now they want to dis-inform consumers of what is in their food, no matter what the outcome, I can assure you that we consumers will find a way thru blogging or otherwise to inform others what ingredients is in our food.

    Once again, Congress has proven that it works mostly for those who pay them political contributions and the hell with the rest of us.

    On the subject of declining soft drink sales, MNB user Nick Arlt wrote:

    In the FastNewsBeat today, it talks about soda sales being down. I know the popular answer and probably the biggest cause is people are probably starting to think about what they drink. Could another answer be that Coke & Pepsi are focusing more and more attention to different market segments?

    In our stores, it quite often is Dasani and Aquafina included in coupons where it never used to. On top of that, Coke is pushing PowerAde and Pepsi is pushing Gatorade in a very fast-growing category. Finally, with the huge increase in energy drinks, they are both trying to jump into those markets with both feet.

    I guess the question with all of this is a chicken vs. the egg type discussion. Are soda sales down because Coke & Pepsi are trying to find alternatives or are Coke & Pepsi trying to find alternatives because soda sales are down?

    One last thought, Starbucks keeps coming up in your MorningNewsBeat. As people start to drink more and more coffee and have it readily available at any time of the day, could this be the substitution causing a lot of problems?

    Coffee used to be a breakfast/brunch drink. Now, it is breakfast/brunch, a quick snack between meals, a meal replacement, a “treat” when wanting to pamper yourself, an excuse for social gathering and with all the flavors and types can be hot, cold and frozen. When was the last time you suggested going to “grab a soda” with a friend? Maybe Pepsi or Coke needs to open a café where people can study and relax.

    Are we wrong, or did you just describe the old-fashioned soda shoppe? Actually, that could be a hell of an idea…
    KC's View:

    Published on: March 10, 2006

    Yippeee! After 21 months, “The Sopranos” is back. HBO at 9 pm on Sunday. The only problem with watching it is that there almost always is water cooler conversation for the next morning…and not only don’t I have anyone in the office to talk to about it, I don’t even have a water cooler.

    It isn’t exactly “First Contact,” but…

    How cool is it that scientists have discovered water geysers on Enceladus, one of Saturn’s moons, giving far greater credence to the possibility that there may be some form of life somewhere within our solar system, and (for those of us who want to believe) increasing the probability that there is intelligent life elsewhere in the galaxy.

    Next thing you know, we’ll be getting reports about a strange monolith being discovered…

    Stanley Kubrick and his buddy Hal
    Now don't look that abstract…

    If you haven’t read the excerpts in this week’s Sports Illustrated from the devastating new book about Barry Bonds and his steroid use, “Game of Shadows,” do so. I ranted about Bonds last week, and don’t want to wear you out. But this guy is an awful human being who cheated seemingly without any sort of crisis of conscience.

    Get the bum out of the game. ASAP.

    If you’ll permit a father a moment of pride…I’m thrilled to tell you that my eldest son, David, has been named an Irene Ryan Scholarship Candidate based on his performance as Lysander last weekend in “A Midsummer Night’s Dream” at Dean College. I don’t know as much about this stuff as I should, but I gather that this is a very big deal in the college theater world…

    Having had a short and failed acting career, I have to tell you that there are few greater thrills than seeing my son on stage, in command of his talents and luxuriating in the thrill of a live audience.

    I’ve always sort of prided myself on not being susceptible to cute wine bottle labels. But last week, I picked up a bottle of 2004 Three Legged Red from Dunham Cellars in Washington State precisely because of the label – it showed an incredibly cute three-legged dog (hence the name). I owned a three-legged dog for a decade, and loved that dog as much as I’ve ever loved an animal, and I couldn’t help myself.

    Pretty good wine, too. Sometimes a cute label works. Sort of like a cute smile…

    That’s it for this week.

    See you Monday. Sláinte!!

    KC's View: