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    Published on: January 23, 2008

    Fortune has released its annual list of “100 Best Companies To Work For,” and eight of recognized companies are retailers. Wegmans remains in the number three position that it had last year. Starbucks moved up from 16th place to number seven, despite some of the tumult that the company has experienced over the past year.

    California’s Nugget Markets moved up one place from 13 to 12. Whole Foods dropped from its 2007 position of five down to 16, and the Container Store dropped from number four to number 20.

    Stew Leonard’s moved up from number 51 to 26, while Nordstrom dropped from 24 to 36 and Publix dropped from 57 to 91.

    Other industry-related companies that made the list included SC Johnson, which dropped from seven to 27; JM Smucker, which went from 39 to 47, and General Mills, which was 60 this year and did not make the list in 2007.

    Topping the 2008 list were Google at number one, and Quicken Loans at number two.

    KC's View:
    I’ve always argued that a company’s position on the list is less important than the various qualities that allow companies to make the list in the first place. After all, the Container Store used to be in the top five almost routinely, and now is number 20…but I haven't detected any diminishing enthusiasm among its employees. The list and the criteria are subjective, and companies shouldn't take the rankings too seriously.

    That said, there is one quality that all these companies seem to share. They invest in their employees, they empower their employees, and they make their employees feel like they are assets, not liabilities and costs.

    Which, it is fair to say, is what employees increasingly will look for as they choose jobs and careers. Companies that do not treat their people this way will find themselves at a competitive disadvantage.

    Published on: January 23, 2008

    The New York Times reports this morning that “recent laboratory tests found so much mercury in tuna sushi from 20 Manhattan stores and restaurants that at most of them, a regular diet of six pieces a week would exceed the levels considered acceptable by the Environmental Protection Agency.”

    According to the paper, “Although the samples were gathered in New York City, specialists believe similar results would be observed elsewhere … Scientists who performed the analysis for the Times ran the tests several times to be sure there was no mistake in the levels of methylmercury, the form of mercury found in fish tied to health problems.”

    The Times notes: “In 2004 the Food and Drug Administration joined with the EPA to warn women who might become pregnant and children to limit their consumption of certain varieties of canned tuna because the mercury it contained might damage the developing nervous system. Fresh tuna was not included in the advisory. Most of the tuna sushi in the Times's samples contained far more mercury than is typically found in canned tuna.

    “Over the past several years, studies have suggested that mercury may also cause health problems for adults, including an increased risk of cardiovascular disease and neurological symptoms.”

    And here’s the interesting part: “In general, tuna sushi from food stores was much lower in mercury. These findings reinforce results in other studies showing that more expensive tuna usually contains more mercury because it is more likely to come from a larger species, which accumulates mercury from the fish it eats. Mercury enters the environment as an industrial pollutant.”

    KC's View:
    For some of us, it isn’t entirely bad news to find out that less expensive sushi is better for us than the really expensive restaurant stuff.

    But that is small comfort when it comes to the real issue, which is one of food safety. What is most distressing is that the article doesn’t make entirely clear is how this problem – essentially one of ocean pollution - can be solved.

    It seems that the fragile planet gets more fragile by the day.

    Published on: January 23, 2008

    The Los Angeles Times reports this morning that the “Los Angeles County supervisors backed off a threat Tuesday to ban plastic shopping and grocery bags that environmental experts call unsightly and destructive.

    Instead, officials chose the weakest of five alternatives recommended by county executives: a volunteer program that leaves it to supermarket and store owners to coax customers into packing their purchases in reusable containers.”

    The abandoned proposal was modeled on a ban adopted last year by the city of San Francisco.

    Meanwhile, the Boston Globe reports that while many supermarket chains are encouraging consumers to either recycle their shopping bags or bring their own, it seems unlikely that major chains will copy Whole Foods’ announced ban on plastic bags anytime soon.

    “Many grocers report that about 90 percent of their shoppers ask for plastic,” the Globe writes. “And the bag makers, who have a billion-dollar industry, oppose bans, calling instead for consumers to reuse or recycle the bags.

    “Plastic bags have a split personality: They draw shoppers with their durability and light weight, but environmentalists consider them a scourge. They can end up tangled in tree branches or swirling around in waterways, where they can be scarfed up by unsuspecting aquatic creatures.”

    While San Francisco has banned the bags, and Annapolis, Maryland, is considering such a ban, the Globe notes that “the United States lags behind many other countries in placing limits on plastic bags. Ireland and Germany levy fees for every bag handed out by stores, and several African nations have set thickness requirements that have effectively banned the flimsy thin bags that float in the air. This month, China, the world's fastest growing economy, banned free plastic shopping bags and encouraged people to use cloth ones instead.”

    KC's View:
    It still would be my contention that the nation’s supermarket chains ought to get ahead of this issue, creating an environment in which government bans would be irrelevant or redundant. While nine out of 10 shoppers may not be requesting shopping bags, it seems to me that the right kinds of incentives can change that behavior. In the long run, it would be the smart move and worth the effort.

    As for the LA decision, I love the way the Los Angeles Times (a once great paper seemingly being decimated by corporate management) characterizes it.

    The action, the Times wrote, “was only the latest example of how the supervisors sometimes react when faced with difficult issues: strong rhetoric at the outset, followed by prolonged study, then a weakened or shelved initiative.”

    Sort of sounds like politics as usual.

    Published on: January 23, 2008

    • Wal-Mart said yesterday that “the number of associates who now have health care coverage through its new associate-tailored plans for 2008 or another source has significantly increased from 90.4 percent to 92.7 percent, and the number of uninsured associates decreased by more than 20 percent, compared to one year ago.” In addition, “more than 30,000 associates who chose Wal-Mart's coverage for the first time reported being previously uninsured” and that “the percentage of associates who reported having no coverage declined from 9.6 percent to 7.3 percent -- a figure significantly lower than the 17.7 percent uninsured rate nationwide for U.S. employed workers that was recently reported by the U.S. Census Bureau.”

    Wal-Mart also announced that the company will commission a study to better understand associates who have declined coverage by researching why they choose to go without health coverage and identifying things that can be done to encourage them to accept health care coverage in the future.

    "We are thrilled that we have moved a significant amount of our associates off the list of uninsured," said Linda Dillman, the company’s executive vice president of benefits and risk management. "While the number of uninsured Wal-Mart associates is less than half of the national average, it is still too high. Our goal is to have every eligible associate select health care coverage and we will share our learnings externally so that we can help advance the overall national discussion about access to coverage and the impact on the uninsured."

    According to the statement released by Wal-Mart, 50.2 percent of its employees are insured under its plan, and 22.3 percent are insured their spouse; 7.3 percent are uninsured, 4.3 percent have Medicare, and 4.2 percent are insured through their parents or college.

    In a statement, Wal-Mart Watch, a union-financed organization, said it was “surprised that Wal-Mart is proud to report that half its employees choose not to take Wal-Mart’s health care plan, including 7.3 percent who think Wal-Mart’s plan is worse than nothing at all.”

    KC's View:

    Published on: January 23, 2008

    The Wall Street Journal reports this morning that Starbucks, best known for virtually creating the market for a $4 cup of coffee, now is testing a $1 cup of coffee with free refills.

    “The eight-ounce short size isn't on Starbucks's menu but has long been ordered by in the-know patrons,” the Journal writes. “Typically, a short, brewed coffee would sell for around $1.50, although that can vary by several cents depending on the store. Starbucks is also testing the offer of free refills for traditional-brewed coffee in the Seattle area … The $1 test undercuts even low-cost coffee purveyors, including McDonald's Corp. and Dunkin' Donuts, a unit of Dunkin' Brands Inc., whose coffees generally start in the low $1-plus range. Although most sit-down restaurants top off customers' coffee free of charge, specialty cafes have largely stayed away from the practice. Starbucks will face increasing competition this year from McDonald's, which plans to start adding a line of espresso drinks at its U.S. restaurants.”

    Starbucks management says that the test does not reflect a long-term shift in business strategy.

    The coffee retailer has been experiencing a number of problems of late, with a slowdown in consumer traffic that seems to correspond to a tightening economy and an increase in commodity prices. At the same time, Starbucks’ share price dropped 48 percent in six months, resulting in the decision to reinstall Howard Schultz, who had engineered the chain’s worldwide expansion, as CEO.

    KC's View:
    It is an interesting business problem. Is Starbucks better off creating a value item for its menu, or by improving the experience and the product so it can better dominate the high end of the coffee marketplace?

    I’m honestly not sure. But what I am sure of is this: Starbucks should be what it wants to be, and not overreact to competition.

    Published on: January 23, 2008 reports that “a home-cooked meal is simply a rare luxury for many busy Americans. According to the Restaurant Association, 80 percent of people surveyed agree that going out to a restaurant is a better way to use their leisure time than cooking and cleaning up. Add to the mix the constant diet craze and the fact that 57 percent of consumers would use delivery to their home or office if more restaurants offered it, and you've got the recipe behind the rapidly growing $800 million diet-food, home delivery market.

    “The market largely has been dominated by giants such as NutriSystem, but many small business owners have found an edge by offering freshly prepared meals that are delivered locally. People who are looking to kick the unhealthy habit of dashboard dining and cubicle take-out have more options than ever when it comes to prepared meals delivered to their home or office.”

    KC's View:
    This is a growing market, though I have to admit that I don’t quite understand it. The idea that so many people simply don't appreciate the pure pleasure of cooking a meal – or don't enjoy cooking a meal – is a shame.

    But things change.

    Published on: January 23, 2008

    The New York Times reports that the New York City Board of Health has voted to force fast food and restaurant chains to post calorie counts on their menu boards. The rule takes effect March 31.

    According to the Times, “The city's original effort was struck down by a judge last September. That rule was reworked to make it comply with the court ruling.

    “The new regulation applies to any chain that operates at least 15 separate outlets, including those that don't currently provide any information on calories. Major fast-food chains make up about 10 percent of the city's restaurants.”

    The city says it hopes that the postings will persuade people to eat healthier foods. The chains, which have resisted the rule, say that it will cause menu boards to be cluttered and will irritate consumers.

    KC's View:

    Published on: January 23, 2008

    While an effort to ban the use of trans fats by restaurants failed in the Maryland State Legislature last year, the Associated Press reports this morning that one legislator there is working to develop a task force that would reconsider a ban and how it could be implemented throughout the state.

    "My bottom line is to come back in 2009 with a recommendation to ban trans-fats in the state of Maryland," Democrat James Hubbard told a House committee hearing, according to the report.
    KC's View:

    Published on: January 23, 2008

    Lots of reaction to Michael Sansolo’s piece about Tesco’s US Fresh & Easy stores, as well as to the ongoing coverage of the format on MNB.

    One MNB user wrote:

    While in Las Vegas I made a point to stop at two of Tesco's stores that were fairly close together. I visited both in the 8:00 PM hour.

    I was in the first store for 20 minutes and did only saw one other customer during that time. The produce looked okay, some trial size looking bags of croutons selling for 1.05 each was outrageous. The prepared foods were interesting looking. I asked the store if they had a microwave I could use to heat something and was told they did not. The meat looked really poor, with a number of beef packages not the right color and a lot of real thinly cut meat. Most of the items that were perishable in this store had a sell by of the day I visited or the day after with a select few items having a sell by of two days out.

    The next store I visited had a few other shoppers inside and had five employees on duty.

    The prepared foods remind me of the home meal replacement certain grocers, such as Albertsons, were promoting in the late 1990's (Quick Fixin Ideas). The rest of the store reminded me of a Save-a-Lot with even less selection.

    This format needs a serious re-evaluation. The competition in Las Vegas is not sleeping, either. I visited a Smiths at Rampart and Lake Mead that had installed a couple of 12 or so foot island style cases full of refrigerated prepared foods, ready to eat sandwiches, and other items. They had much more selection of ready to eat and heat to eat than Fresh and Easy was offering. They even had tables to sit in the store and eat at. They also had an in-store chef counter with prepared meals that were prepared right in the store, in addition to the standard hot food and the like. This store also had a Kosher deli, bakery, and hot food area.

    Would I go back to Fresh and Easy? Not likely. They have nothing to offer.

    Another MNB user wrote:

    I loved your Fresh and Easy article. I am so glad that you were able to see the premise behind the company. Another thing I wanted to point out about their prepackaged meals is that they also put all of the nutritional information on the packaging including calories, fat and carbohydrates. Most fresh packaged meals don't come with that and if you are trying to watch all those numbers while you are cooking yourself it can be very stressful. I did hear one person say that it was very important to them to buy those individually fresh packaged meals because they know exactly what's in it and it's portion sized. What a great way to cater to lazy or busy Americans by creating something quick, easy, healthy and in proper serving sizes.

    Still another MNB user wrote:

    Fresh and Easy can be considered a bit of sleeper to say the least.... Yet their prices are pretty good....will win the consumer share ...over time....Particularly like your insight about 2.0 and 3.0 and agree with you 100%...Don't think we have seen the entire picture just yet...still tweaking....they've built a few amazing WH and commissary facilities in CA...spectacular really....bigger plans in mind....

    You are right, their stores can be considered a bit bland, agreed, yet so is Walgreens, and there lies the plan....

    Fresh and Easy will be on every other street corner in the U.S. and will capture sales with good prices, fresh approach, value added assortment, low key strategy, and neighborhood friendly style....eventually they will catch everyone's a big way....

    Oh...forgot to mention their ad's back you can trust statement.....hard to qualify, but powerful none the less....

    Exciting times to come.

    MNB user Robin Richardson wrote:

    I had to fly/drive 2500 miles to get to a FE store, but I was impressed with the convenient/ready to eat and healthy foods. Everything looked appealing (ok, in part it was a long trek).

    The ease of getting into/out of a smaller store and the staff who were not overly friendly, but seemed well informed and passionate about their products. I liked the non-warehouse/superstore experience and bought 2 bags worth for the trek home.

    On the subject of Wal-Mart’s decision to eliminate almost half the magazine titles that it sells, which we suggested seemed like a good idea since it makes sense only to sell the items that customers actually want. MNB user Tom Rademacher wrote:

    I read your newsletter daily and know that you are open to ‘another side to the story’.

    Taking the axe to 1,000 titles because they were not selling clearly sounds like the right thing to do, as you concluded.

    The problem is in the decision process. If retail stores sold only the top items they would not need 100,000 square feet to do it. Most offer a variety of mustard, for instance, from plain yellow to a variety of browns and spices and from national brands, to imported and regional. Done right the variety is tailored to the market in which is the store is located.

    If Wal-Mart has simply eliminated the ‘bottom’ 1,000 then they have done the customer and themselves a disservice. The top selling titles in many of their markets may be buried in this shotgun approach. It is common in the wholesale magazine distribution industry to have a master list of titles from which to choose what is appropriate for each store and the market it serves.

    If I start to add more to this ‘opinion’ it would probably approach pamphlet size. Stopping at this point I hope at least illustrates the concern, and yes, I work in the wholesale magazine distribution business.

    KC's View: