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    Published on: April 5, 2007

    Mirroring their strategy of three years ago, when a “one for all, all for one” approach led both to solidarity and a four-plus-month lockout/strike that roiled the marketplace, Southern California’s three top grocery chains – Albertsons, Ralphs and Vons – have signed a similar agreement that binds them together in the event of labor strife this year.

    The agreement “calls for the lockout of employees from all three companies within 48 hours of a strike against any one company,” according to a statement released by the companies. There also are arrangements for the companies to provide financial assistance to the targeted chains.

    The deal follows the vote by Albertsons employees to authorize a strike against the company if a contract agreement cannot be reached, though no deadline was set.

    The union described the agreement as demonstrating “contempt” toward employees, and immediately walked out on contract talks, according to Business Week. “With this announcement, the markets have very clearly said they would rather have a lockout or strike than compromise on a fair contract with their employees,” said Mike Shimpock, spokesman for the Southern California Grocery Workers Union.

    The contract that was agreed to three years ago after the extended labor outage ran out on March 5, but was extended to at least April 9.

    "We signed this agreement to protect our companies, our customers and our employees' jobs in the event of a union strike," Adena Tessler, spokesperson for the three groceries companies said. "The decision to sign the agreement was made only after, and in response to, the unions' strike threat. While none of us wants a work stoppage, the unions' recent strike authorization and threats of future strike votes must be taken seriously.

    "It is now clear that the unions are engaged in a unified negotiating and strike strategy designed to put pressure on one company to agree to uncompetitive contract provisions and gain significant bargaining leverage against the other companies," Tessler said. "The three companies have no choice but to respond with their own measures. The companies believe that this agreement is a necessary defensive measure designed to restore balance to the negotiation process."

    Albertsons is owned by Supervalu, Ralphs is owned by Kroger, and Vons is owned by Safeway.
    KC's View:
    It was John F. Kennedy who once said, “Those who make peaceful revolutions impossible will make violent revolutions inevitable.”

    We can only imagine that the discussions to this point seem to suggest that peaceful revolution – a fundamental change in the management-labor equation that will benefit both sides in the long run and make the companies more viable and competitive – is unlikely, and therefore violent revolution is necessary.

    If so, that’s too bad. Because it seems probable in such an event that no fundamental and innovative changes will take place, and that the carousel will keep spinning faster and faster, with little progress being made.

    That’s a shame. Maybe the situation can be salvaged. We hope so, for the chain’s sake.

    Of course, while these events transpire, there is Tesco…building stores and looking to the future.

    Published on: April 5, 2007

    Two interesting stories about Wal-Mart this morning:

    • The New York Times reports this morning that “Wal-Mart has quietly introduced an ambitious program in the United States — in equal parts self-help class, corporate retreat and tent revival — that tries to turn its 1.3 million workers into a model for its 200 million customers on issues ranging from personal health to the environment.

    “The program, to be announced today, tests the assumption, if not conventional wisdom, that environmentalism and fitness are luxuries of the well-off, inaccessible to a vast number of the nation’s working class because of hectic schedules, stretched budgets and bad habits.”

    Among the efforts being pushed by Wal-Mart are how to save energy, how to stop smoking, and how to get more exercise.

    “The program, called the personal sustainability project, is voluntary, but it is proving popular, with roughly 50 percent of employees in a dozen states signing up so far. The company may eventually extend the program to its workers around the world,” the Times reports. “For Wal-Mart, the payoff could be significant: if it succeeds, the initiative could improve employee morale, and therefore productivity; reduce health care spending on a work force with higher rates of heart disease and diabetes than the general public; and improve Wal-Mart’s reputation with the image-conscious consumers it is courting with costlier merchandise.

    “Over the next two years, Wal-Mart will ask all employees to adopt a pledge to improve their bodies, their families or their planet. And behind that seemingly New Age aspiration is an estimated $30 million commitment, making the program one of the most expensive of its kind.”

    • The Wall Street Journal reports this morning that Wal-Mart has apologized to shareholder groups that it defined as “potential threats” when they submitted proxy petitions and on which the retailer may have conducted extensive surveillance and research.

    The extent of Wal-Mart’s surveillance activities – on employees, critics and shareholders – was detailed yesterday in a Journal article.
    KC's View:
    We are tempted to describe Wal-Mart’s various attitudes and actions as utter schizophrenia, but maybe that’s not quite fair. After all, who are we to say that a company can’t be paranoid about its enemies and also interested in the personal sustainability of its employees.

    We’re also tempted to suggest that Wal-Mart employees had better be careful…because if they don’t live up to the retailer’s personal sustainability goals, it seems likely that Wal-Mart management is going to know it. Big Brother is watching.

    But we won’t. it’d be too easy.

    The bottom line, we suppose, is that Wal-Mart is resolutely, relentlessly and ruthlessly devoted to productivity – no matter how it gets there. If that means cutting its critics off at the knees, so be it. If that means getting employees to stop smoking, or cutting down on energy costs in its stores, that’s fine, too.

    As it happens, there really is no surprise here. The bottom line, for Wal-Mart, is the bottom line.

    Go figure.

    Published on: April 5, 2007

    To hear Kevin Coupe’s weekly radio commentary, click on the “MNB Radio” icon on the left hand side of the home page, or just go to:

    Or, to simply read the commentary in text form, continue below…

    Hi, I’m Kevin Coupe and this is MorningNewsBeat Radio, brought to you by Webstop, your first stop for retail website design services.

    It appears that before long, a number of airlines are going to turn their cabins into traveling hot spots, making it possible for travelers to connect with the Internet, surf the web, do email, exchange instant messages, etc, etc, etc… even while traveling really, really fast while really, really high up in the sky. The Wall Street Journal suggests that US airlines will begin offering these services late this year or early in 2008, and that it may even be followed by in-sky cell phone usage, though this is a little bit more controversial.

    I’m of two minds on these changes. I have to say that I love the idea of having access to the Internet while in the air; as you can imagine, I’m fairly connected to my computer on a day to day basis in order to keep MorningNewsBeat going, and especially on long trips, it would be great to be able to get online. I actually was able to do this while flying back from Japan on ANA last December, and it was a wonderful service – and making it even better, it was free. I hope that US airlines follow the same pattern and don’t turn it into a profit center – free wi-fi would be a wonderful differential advantage, and enough to make me choose one airline over another. I suspect a lot of travelers would feel the same way.

    I’m not so thrilled with the idea of cell phone service, however. I actually sort of like being unavailable to callers for those cross-country or trans-oceanic flights. It is a great time to write, to read, to think or even to sleep…and I’d hate that tranquility to vanish. But if it does, I guess I’m just going to have to be disciplined enough to turn off my cell phone and don a pair of noise-canceling earphones so I don’t have to listen to everyone’s else’s conversations.

    All these changes illustrate vividly how and why retailers need to change both their strategies and tactics to appeal to the new consumer for whom so many of these kinds of services will shortly be a given. Anyone who reads MorningNewsBeat knows that I feel passionately about this.

    However, I have to admit to having a bit of an epiphany the other day. I have neighbors who live just two doors over from me. I just found out, though we’ve both been on the street for most of the past two decades, that they still get television reception using an old fashioned antennae strapped to their chimney. They don’t have any sort of cable television, and while they have a computer, they’re still using dial-up AOL.

    Now, my first reaction to this was that I didn’t know we had Amish people living in the neighborhood. But the more I thought about it, the more I thought that even as they shift priorities to speak to a technologically savvy consumer base, retailers need to be careful not to disenfranchise people like my neighbors.

    Here’s a statistic for you – only 19 percent of the United States had broadband Internet access in 2006. While that number clearly is going up, it still leaves plenty of people like my neighbors who not only don’t have it, but aren’t interested.

    They’re not Luddites, though it would appear so; they’re just folks who prefer surface roads and the scenic route to the information super highway.

    For MorningNewsBeat Radio, I’m Kevin Coupe.
    KC's View:

    Published on: April 5, 2007

    Forbes reports that Japanese consumers “are gobbling up doughnuts, ice cream, pastries and other calorie-rich goodies,” with Krispy Kreme doughnuts a current fave among shoppers there. Other American companies taking advantage of the trend include McDonald’s, Cold Stone Creamery, and Burger King.

    In fact, according to Forbes, there is a real mindset change taking place, with a backlash taking place against the healthy meals for which the culture has been known: “The move toward tummy-filling meals has also been a plus for Japanese companies making supersize noodles, ice cream and deluxe burgers.

    “The trend is so widespread Japanese coined the phrase ‘in-your-face-food’ to describe it, underlining an apparent desire to escape the stresses of a health-conscious regimen and let go for a change.”
    KC's View:
    In your face? How about directly to your hips? Or lower?

    It is ironic, somehow, that as Americans become more health conscious – or at least the American media does – the Japanese are at least flirting with the dark side. And we all know that once you begin to flirt with the dark side, it’s almost impossible to resist embracing it.

    It also is ironic that Japanese consumers don’t want to eat American beef because of fears about mad cow disease, but they’re willing to chow down on our junk food and thank us for it.

    They gave us sushi. We gave them Big Macs.

    We got the better deal.

    Published on: April 5, 2007

    • Costco, which two months ago changed its return policy for electronics – from unlimited to 90 days from purchase – reportedly has launched a technical support service called Costco Concierge. The service consists of an 800-number that offers free technical support for televisions, computers, cameras, camcorders and iPod/MP3 players purchased from Costco or
    KC's View:

    Published on: April 5, 2007

    General Mills has published a new study suggesting that while “retailers typically gauge shopper loyalty according to a shopper’s purchase behavior, defining shoppers who spend the most or shop with the most frequency as the most valuable,” in fact it is “emotionally loyal shoppers are crucial to driving traffic and increasing sales.”

    The study, according to the company, “found compelling insights about loyal shoppers. For example, they visit stores for reasons that transcend price and convenience; they are less deal-driven; and they are more likely to drive across town to shop at their favorite store or recommend that store to a friend. Financially, loyal shoppers bring consistent business to their favorite retailers by spending 30% more than other shoppers on each trip.”

    In addition, the study says “that in order to attain shopper loyalty at the Best-In-Class level, retailers must meet shoppers’ emotional needs, including elements such as trust, atmosphere, and feeling welcome and cared for in the store. Best-In-Class retailers create connections with their shoppers across all of these elements” through strategies that include: focusing on a specific shopper, giving the store a local feel through community programs and customized store offerings, offering health solutions relevant to current health trends, executing the basics flawlessly, and personalizing the store with excellent customer service.”
    KC's View:

    Published on: April 5, 2007

    Published reports in the UK say that while Tesco grew its sales by seven percent during the first quarter of 2007, that is slightly behind a nine percent sale growth figure shown by Wal-Mart’s Asda Group. And Sainsbury, the third-ranked chain, actually grew eight percent during the first quarter…suggesting that there may be a little tightening going on in the UK marketplace that Tesco long has dominated.
    KC's View:

    Published on: April 5, 2007

    • The Wall Street Journal reports that the Center for Science in the Public Interest (CSPI) is pressing Anheuser-Busch to pull its Spykes malt liquor beverage off the market, saying that it is primarily being marketed to underage drinkers. CSPI calls the product “liquid Lunchables,” though it concedes it has no hard evidence of the underage consumption.

    Francine Katz, Anheuser's vice president of communications and consumer affairs, tells the Journal: "Our products are intended for adults and are marketed responsibly. We're committed to fighting underage drinking, but the way you do it is not to limit choices for adults."

    HealthDay News reports that a new Dutch study suggests that high doses of vitamin K – found in such foods as soybean, olive and canola oils, and dark green vegetables such as broccoli, kale, spinach and Brussels sprouts – may help to reduce arterial calcification. The revelation could have implications for people who take blood-thinning medications.

    • The Dallas Morning News reports that “today's most cutting-edge research points to the benefits of a diet rich in fresh fruits, vegetables and grains, which are loaded with helpful phytochemical properties” and can help night diseases such as cancer.

    • The Seattle Post-Intelligencer reports that “the National Labor Relations Board set a hearing into whether Starbucks Corp. illegally kept workers from unionizing at four of its Manhattan coffee shops.” A hearing is scheduled to take place on June 12 before an administrative law judge.

    • There are published reports that Ahold is considering trying to buy Dutch department store chain Hema. The cost of such an acquisition is expected to be more than $1 billion (US).
    KC's View:

    Published on: April 5, 2007

    Tomorrow being Good Friday, Mrs. Content Guy and the Content Kids have the day off from school…so we’re going to take the day off, too.

    We’ll be back Monday morning, bright and early (or at least semi-bright and sort of early), with an all-new edition of MNB.
    KC's View:

    Published on: April 5, 2007

    Lots of reaction to yesterday’s coverage of the Wall Street Journal piece detailing Wal-Mart’s extensive surveillance efforts over the years.

    MNB user Joe Fraioli wrote:

    When you play dirty and do the wrong thing time and time again paranoia soon follows. Of course they are concerned what devious things their employees may be up to because the guilty always feel that everyone else is just like them.

    MNB user Mike Griswold wrote:

    This is unbelievable. Twenty people employed to snoop cyberspace looking for stuff. I would love the see the budget appropriated to that department. Talk about skunk works. It would not surprise me if hall passes were needed to get to the bathroom.

    Another member of the MNB community wrote:

    ”Threat Research and Analysis Group.” I am reminded of the old labor reference to company “guards” as TROGlodytes, which my dictionary defines 2) a reclusive, reactionary, or brutish person. If nothing else, we have to enjoy their choice of title that allows us to contemplate a new acronym.

    Another MNB user disagreed with our commentary:

    What Wal-Mart is doing is not unusual. It is just that they enforce it more rigorously. This kind of work is done at many large CPG companies as well, and I've worked at several who have the same policies and principles.

    Sounds to me as if the fired employee has a grudge. I wish people would lay off Wal-Mart.

    Maybe in this case the fired employee is right to bear a grudge. After all, while he may have crossed the line, it strikes us that the line was at best fuzzy in Bentonville, and that he is a product of the culture down there. The word “scapegoat” comes to mind.

    MNB user John C. Patzke wrote:

    Unfortunately employees steal information using electronic tools and unfortunately employers are being sued by the public for failing to adequately monitor their employees' use of company electronic tools. It seems to me that it is difficult to be critical of Wal-Mart for protecting itself against these situations. Again, I guess the best message to employees is simple: don't use company electronic equipment for matters you wish to keep private. Go home or to the library and use that equipment.

    Another MNB user wrote:

    The Wal-Mart Spying Story is on the button but perhaps criticism should be muted.

    As a former employee competing with this Goliath I'm not a friend of theirs but I do tire of the constant criticism directed their way. In this case I also recognize they have a right, indeed an absolute obligation, to protect their property, real or intellectual. Also, it should be noted their sheer size, success, and exposure make them especially vulnerable to such losses.

    A challenge of security is being effective without stumbling into the shadow world of excess, particularly in regards to any infringements on personal rights or privacy. However, such errors will happen and will always be a problem. In such cases the involved organization should deal with them quickly and firmly.... very firmly.

    I suspect Wal-Mart has already dealt with any problems in this area of electronic monitoring, especially with everyone watching. However, from the MNB report it doesn't appear too many real shadows actually exist. And, if the company has a policy statement about monitoring that is clear to and understood by all employees they should continue these strong security measures.

    Wal-Mart has a lot to protect and they can do so in a fair and reasoned manner. Other than any excesses above, this program is not spying it is simply good business... shadows or not.

    Funny that you think that not too many shadows exist with this story. Because our reading makes us think that this thing is all shadows.

    MNB user Cliff Balzer wrote:

    I agree with your take that "paranoia and suspicion...(is) over the edge." What is encouraging is that there are a number of Tier-One retailers "where loyalty is engendered through mutual respect."

    These retailers are the same ones who are known for good service, good selection and good financial performance. As I've noted in other e-mails, these Tier-One Retailers focus on the workplace the workforce and understand that every store is a unique workplace.

    Here are some of these Tier-One Retailers: Wegmans, Stew Leonard's, Publix, Nordstrom, REI, Timberland, Costco, and Whole Foods.

    It is hard to imagine any of these retailers focusing on the kind of corporate surveillance efforts that Wal-Mart was obsessed with.

    Interestingly, one MNB user read the surveillance story and connected it to another Wal-Mart story that’s been in the headlines:

    As much as I agree with competition (Wal-Mart getting into the banking business) one has to wonder if Wal-Mart can be trusted with critical information one would provide in the mainstream banking business?

    Good point. We may have to rethink our support of Wal-Mart’s financial services strategy.
    KC's View:

    Published on: April 5, 2007

    It’s a short week, so we’ll make this a short column…especially because you had to put up with our personal meanderings up in the radio segment…

    I’m old enough to remember Clifford Irving, the guy who perpetrated a major scam more than three decades ago by convincing almost everyone that he’d written an authorized autobiography of Howard Hughes. So I was looking forward to seeing “The Hoax,” the new film by Lasse Hallstrom that stars Richard Gere as Irving.

    I’m happy to report that “The Hoax” is a wonderful movie, populated by quirky characters – chief among them Alfred Molina, all neuroses as Irving’s co-conspirator Dick Suskind. But the movie belongs to Gere, who perhaps is as good as he’s ever been as the mediocre writer who perpetrates one of the great cons of all time and is almost startled to find out that that crazier things get, the more people want to believe him.

    The movie moves from being an outright comedy to being something a little deeper, as it veers from reality to paranoia and back again. But I enjoyed every minute of it…and my 17-year-old son did, too, so maybe it isn’t just a generational thing.

    I can’t shop there because they don’t have stores where I live, but I have to say that I am impressed with the job Publix is doing with their wine marketing efforts.

    Not only is Publix Grape an excellent little magazine, but the company’s treatment of wine on its website is nicely done.

    I’ve never watched “American Idol,” except for the few minutes at the end while I’m waiting for “House” to start. So I’ve never really heard this guy Sanjaya sing. I’ve seen him ad nauseum on various shows, but I’ve never heard the voice, which people say is awful, so maybe I’m better off.

    But I’ve decided to root for him. Because what the hell…I’ve always admired people who get the most out of their talent, even when they don’t have much of it.

    As long as I don’t have to listen to him.

    That said, you need to download the new Martina McBride album, “Waking Up Laughing,” which is just dynamite. She’s got a wonderful voice, lots of heart, and man, does she know how to sell a song…

    “Shooter” isn’t a great movie by any means. But it is reminiscent of the old Stallone-Willis-Schwarzenegger action movies of the eighties and nineties, and in that sense, is quite good. Mark Wahlberg is the stoic hero of the piece – a retired military sniper who is framed for an attempted assassination, and who manages to elude the entire US military complex while trying to track down the people who set him up. Wahlberg isn’t nearly as good as he was in “The Departed,” but he’s more than adequate to the task…and sometimes it is pleasant to watch a nice, semi-complicated thriller that is part “Die Hard” and part “Parallax View.”

    Wonderful wine to recommend this holiday weekend: the 2005 Mosaic Vineyards’ Stone Ranch Zinfandel, which is wonderfully rich and spicy And perfect with a nice thick steak.

    Don’t usually do this, but I have so say that I really like the new line of organic tortilla chips brought out by Kettle Foods – in flavors that include blue corn, yellow corn, black bean, chili lime and multi-grain. They’re really good…and worth trying (and selling!).

    Finally, I know that it is only three games into the baseball season. But the Mets are 3-0, and they’ve won all three games against the World Champion St. Louis Cardinals.

    Let’s just say that things are looking good.

    That’s it for this week. Have a good weekend.

    KC's View: