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    Published on: January 29, 2008

    by Michael Sansolo

    There is a world all around us that, depending on our ages, we simply do not know. Its impact on our employees, our shoppers and our families is incredible. And despite what we think, we simply don’t understand it at all.

    Given that you are reading this column on the Internet, you probably think you understand cyberspace. I thought I did and I was wrong. I came to this reality last week while watching the PBS show Frontline on kids growing up in the Internet age. As Frontline explained, the generation gap that exists around the Internet is every bit as large as the gap that once separated boomers and their parents over rock and roll.

    Check out:
    http://www.pbs.org/wgbh/pages/frontline/kidsonline


    Let me offer some examples:

    Frontline interviewed a teen-age girl who found support and guidance on how to be anorexic on line. Anorexia is referred to as “Ana,” a goddess who helps young girls avoid the nightmare of weighing more than 100 pounds. (I wish I were kidding.)

    There were high school girls who engaged in a fierce argument on line that finally erupted into a full-scale brawl in their school. School administrators were caught by surprise because there were no visible signs of hostility until the fight occurred. Another teen explained how easily he subverted the “parental control” feature on his computer.

    Even as the Frontline episode aired, the power of this new world was grabbing headlines in Fairfax, Virginia. Upset that school wasn’t cancelled when it snowed one recent day, a student used the on-line white pages to leave a complaint on the home phone of a school administrator. The administrator’s wife replied with an angry voice mail to the student’s cell phone. That was a mistake.

    The student uploaded the message to Facebook and YouTube. From there, it was a small jump to celebrity on the front page of the Washington Post and the Today show.

    It won’t be the last time.

    As Frontline explained, the realm of the Internet has grown beyond the scope imagined by most people of a certain age, probably somewhere around 25. (The dividing age may be even younger. A 20-something Frontline reporter found herself stymied repeatedly by the way teens were communicating. E-mail is now seen as too slow. Text messages and Facebook were the only way she could get through.)

    It was a message Martin Lindstrom gave the FMI Midwinter audience a week earlier on the changing face of media and connection today. We’re in a new world, an unseen world and, sadly, a world that is hard to understand. The world of Facebook, texting, Xanga, YouTube, AIM, etc…is here and it’s not going away. It’s reshaping communication in good and bad ways for Generation Y, a population larger than the baby boom itself.

    The same effortless communication that set off a firestorm about a snowstorm in Virginia will some day be unleashed against your stores or your products. The same inability to communicate without texting may someday impact your methods of reaching employees. The same need to turn high school classes into multi-tasking, web-based lessons may be the coming face of training.

    I like to believe there is always a solution. I think we can learn, we can grow and we can change.

    Sure, this generation gap may be as large as the chasm caused by rock and roll, and that should get our attention. I keep flashing back to those days when I tried to get my parents to understand that the Rolling Stones made music, not noise. I never did win that argument, though one of their contemporaries, Dick Clark, certainly seemed to figure it out. As I recall, he created a pretty good business opportunity out of it.

    Now we face something just as perplexing with our children who, let’s remember, are soon to be our customers and our employees. That’s our challenge and our opportunity. Think of the advantage that will accrue to companies who learn to master this new world of communication, who learn how to harness these links instead of running in fear of them.

    Our world is going to be rocked! So, let’s roll.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

    KC's View:

    Published on: January 29, 2008

    The New York Times this morning reports that CheckUps, which operates 23 in-store medical clinics in southern Wal-Mart stores, has shut down those operations amid financial troubles that caused it to stop paying its employees and vendors.

    Wal-Mart says it is concerned about the situation. The retailer has leased space to 80 such clinics, including CheckUps, and a spokesman for the retailer said that the company would move quickly to get the closed clinics up and running again. The Times also notes that Wal-Mart plans to have as many as 2,000 clinics in operation by 2014.

    KC's View:
    It has long been the feeling around here that Wal-Mar eventually will stop outsourcing these clinics and get into the business itself. This current problem could accelerate that move…Wal-Mart really cannot afford to be at the mercy of other companies’ financial and management issues.

    Published on: January 29, 2008

    Columbus Business First reports that Supervalu has decided to shutter its five Sunflower Markets stores, originally designed to offer a value-driven organic alternative to Whole Foods and Wild Oats.

    The company said that the Sunflower stores were not meeting the company’s profitability and productivity goals.

    "Sunflower Market was an innovative approach to the national organics market and we'll take the learnings from the format and apply them elsewhere within our organization," said Haley Meyer, a spokesperson for Supervalu, which originally planned to open 50 Sunflower stores by 2011.
    KC's View:
    The Federal Trade Commission (FTC) will probably use this as concrete evidence that the Whole Foods acquisition of Wild Oats was a bad idea and anti-competitive.

    That said, it is a shame that Supervalu couldn’t support this format any longer. Check out “Your Views” below for one former staffer’s stake on why the plug was pulled.

    Published on: January 29, 2008

    The Wall Street Journal reports that Tyson Foods has reassured a federal district court that it is changing its approach to advertising of antibiotic-free chicken products. The assurances come a month after Tyson said that it would change its labels from reading “raised without antibiotics” to “chicken raised without antibiotics that impact antibiotic resistance in humans."

    The change was made because of charges that Tyson’s so-called antibiotic-free chickens actually have been given an antibiotic called ionophores, which the Journal describes as “commonly added to poultry feed to help prevent an intestinal parasite that can lead to lower body weight or death in poultry, causing economic loss to producers. Ionophores aren't used in human medicine and therefore don't pose an immediate risk of causing antibiotic resistance in humans, something that is of growing concern to the medical and scientific communities.”

    While Tyson has been changing its labels, it apparently did not change some of its advertising to reflect the wording change, and the company maintained that this was not required by its previous agreement. But now, under threat of litigation, Tyson has assured the courts that it will make the broader adjustment.

    KC's View:

    Published on: January 29, 2008

    The Charlotte Observer reports that Lowes Foods Is offering regular, free diabetes educational store tours at one of its stores there.

    "Every time any of us goes to the supermarket, we see something new," Lowes’ corporate nutritionist, Cindy Silver, tells the paper. "There's just a huge sort of pool of products to purchase. Getting the confidence required to make the shopping trip quick and efficient is the type of thing we're trying to help people with. We want to see their shopping baskets more healthful."

    According to the Observer, the tours consist of a department-by-department trek through the store, as a guide helps connect specific foods to health and wellness issues, with diabetes being the prime concern.

    KC's View:
    An excellent example of linking health and wellness to food. Smart move.

    Published on: January 29, 2008

    The new edition of Food, Nutrition & Science from The Lempert Report offers a lead story appropriate of an e-newsletter coming out just two weeks before Valentine’s Day – a scientific look at aphrodisiac foods:

    “What do oysters, chocolate and avocados have in common? They are all considered aphrodisiac foods – that is, foods that ignite feelings of amoré in those who digest them. Aphrodisiac foods are known to stimulate blood flow while enticing the body through sensual sights, smells and textures. It is this combination of qualities that stirs the passions and awakens the senses.”

    While “medical science has never substantiated claims that certain foods actually kindle desire – in fact, a recent Italian study suggests that the aphrodisiac potential of chocolate is purely psychological – belief in the power of aphrodisiac foods dates back to ancient times.” Of course, times have changed – it used to be that foods considered to be rare were believed to have aphrodisiac qualities, but these days, there aren’t many foods that are rare, and therefore “the criterion for what is considered an aphrodisiac food is somewhat different.”

    Still, for both scientific and marketing purposes, now is a good time “to explore some of the more popular aphrodisiac food varieties to see what makes them tick…”

    Among other stories in Food, Nutrition & Science:

    • There is a look at increasing US support for food biotechnology. Studies suggest that “awareness of food biotechnology remains relatively stable compared to 2006 numbers, but fewer consumers are worried about its use in food. When asked about the safety of the food supply, less than one percent of consumers list food biotechnology as a food safety concern.”

    • Whole grains aren’t the same as whole wheat…but a lot of consumers don't realize that. And so, Food, Nutrition & Science offers a primer on the difference, explaining exactly what whole grains are, how they can impact health and wellness, and whether they are worth all the attention they have been getting.

    And there is much more.

    For more information about how to receive Food, Nutrition & Science, go to:

    http://www.foodnutritionscience.com

    KC's View:

    Published on: January 29, 2008

    • The Boston Business Journal reports that Hannaford Supermarkets and Whole Foods Markets “are founding partners of the U.S. Environmental Protection Agency's GreenChill Partnership, a program that promotes strategies that reduce refrigerant usage harmful to the environment as well as reduce greenhouse gasses and save money.

    “As a part of the group, Hannaford and Whole Foods will inventory its current refrigeration emissions and use only ozone-friendly and advanced refrigeration technologies in all new and remodeled stores.”

    Dow Jones reports that Hershey Co. plans to “raise prices by an average of 13% on one-third of its domestic confectionary line just days after the chocolate and candy maker reported plunging profits in the fourth quarter and issued a weak 2008 forecast … Chief Executive David West said Friday the company will boost marketing and roll out new premium chocolate products in an effort to regain market share that has been lost to rival Mars Inc.”

    • The Boston Business Journal reports that Dunkin’ Donuts will open its first store in China this spring, in Shanghai, with a unit that will be the first of 100 scheduled to be opened over the next decade.

    • The Food Industry Management Program at the USC Marshall School of Business said yesterday that it will honor David Dillon, Chairman and CEO of The Kroger Company, as “Food Industry Executive of the Year” at its annual graduation banquet in April. The award is presented annually to a food industry executive who has shown extraordinary leadership while producing exceptional business results.

    KC's View:

    Published on: January 29, 2008

    Oops. Again.

    As noted yesterday, MNB reported last week that Fortune had published its annual list of “100 Best Companies To Work For,” and that eight of recognized companies were retailers. The retailers that made the list were Wegmans (#3), Starbucks (#7), Nugget Markets (#12), Whole Foods (#16), The Container Store (#20), Stew Leonard’s (#26), Nordstrom (#36), and Publix (#91).

    However, it was pointed out that we missed one - Valero Energy Corporation (#67 on the list) – and we rectified that yesterday and thought we were done.

    Not so fast.

    Got an email yesterday from MNB user Bill Hurst, who wrote:

    “In your mention of some of the best companies to work for, I neglected to see the name of Quik-Trip Stores, a high quality chain of convenience stores operating in 9 states and headquartered in Tulsa, OK. They came in at # 28.”

    You’re right. I missed it, and hope that this makes up for it.

    As I pray that I haven’t missed another one.

    KC's View:

    Published on: January 29, 2008

    • McDonald’s announced that its fourth-quarter net income was $1.27 billion, compared with $1.24 billion during the same period a year earlier. Q4 revenue rose six percent to $5.75 billion, with same-store sales for the period that were flat.
    KC's View:

    Published on: January 29, 2008

    The news about Supervalu deciding to close its Sunflower Markets concept hit the wires yesterday after MNB was posted, but I did get the following email about the story from an MNB user:

    Though I don’t work there anymore, I was involved in the Sunflower Markets concept and rollout Supervalu started a couple of years ago. I am sad to say that I just heard they will be closing all the stores sometime in February. I can’t help but think much of this has to do with the Albertsons merger, that the company has gotten so big and complex that they aren’t will to provide the time, resources and personnel to give something like this new concept a chance.

    Hopefully they will be able to absorb some of the great people that were creating and running these stores, which were most like Trader Joe’s when it came to size, selection and atmosphere. It seems that many concepts and programs that made Supervalu a very good company to work for are going by the wayside and the Albertsons methods are being adopted. Sunflower was both Supervalu and more specifically a John Hooley project, who left shortly after the merger announcement seemly not very happy with where things were going.

    I know this always happens, but it seems there is not much Supervalu legacy moving forward and we will have to wait and see if the wisdom of abandoning so much of their successful ways is going to work long term. It was a much more entrepreneurial company a few years ago where something like Sunflower had a chance to start and make an impact. Sure seems like it’s a much more “corporate” company now, and not in the good use of that term (if there is one!). I’m sure most of the products created for Sunflower will be absorbed into their other banners also, but it is still not a good sign when a new concept gets axed.





    We also got an email yesterday about Wal-Mart’s Asda Group from MNB user John Parkin:

    As an ex-pat, and ex-ASDA employee, now living and working in California, I get the chance only rarely to visit UK supermarkets. However, I was back ‘home’ over the holiday period and took the opportunity to look around at the grocery landscape. It is all too easy to put on the rose-colored glasses of yesteryear and say that when I left England in 1994 ASDA had the nicest stores, with the widest choice, and best prices in the country. However, I really believe it was the case. Now, ASDA’s stores are unattractive, cramped, and expensive. I never thought I would say this, but the CO-OP offers a better grocery shopping experience than ASDA. All of Tesco, Sainsbury’s and Morrison’s are certainly preferable, offering wider aisles, a better assortment, more attractive décor, and user-friendly store layouts. Perhaps most telling of all, however, is the difference in service. Maybe it is due to being part of the evil empire, but long gone are the days when ASDA was a friendly, helpful operator. We used to have a motto, trite and contrived though it was, that if you weren’t serving a customer, then you should be serving someone who was. In my latest visit, it was impossible to find anyone interested and capable of serving me; a real indictment of the Wal-Mart age.

    All in all, while I am still happier as a consumer faced with the choice between Safeway and Raleys than with any of my UK options, it is easy to see why ASDA has not been able to knock Tesco from the top spot in my homeland.





    We had a story the other day about a lawsuit being filed against Dannon over whether it had engaged in misleading advertising for its Activia brands, and then got a number of emails criticizing the lawsuit as being the result of ambulance-chasing lawyers looking for a big payday. (That’s my distillation of the characterization, but I think it is pretty accurate.)

    But another MNB user disagreed:

    While I don't know the merits, or lack thereof, of this specific Dannon case, it does sometimes occur that we consumers are duped by we manufacturers, retailers and other entities (including governmental departments). Unfortunately, when this occurs, we often try to resolve issues with these groups on our own, and often with minimal success.

    Many of us roll over and accept our defeat against the 800 lb gorilla because victory would require an expensive lawsuit to resolve. However, occasionally, someone decides they are "mad as hell...", and, you know the rest; and they resolve to invest the time and talk to lawyers who feel that the issue is worth championing. The company can then decide to settle right then and there and resolve the disagreement, or take its chances in the court with possible greater losses. Law firms are no less profit-driven and risk-averse than any manufacturer or retailer; if they don't think there is merit and good chance of a payout, they aren't going to invest their time and money into pursuing an action. If an entity is at fault and this costs them money, then we should not be upset with our capitalistic lawyers, but rather the entity itself for it's lack of judgment. If its costs go up, then don't buy...after all, they tried to deceive or cheat us, they don't deserve our business--and certainly their investors (and, yes, that could be me or you) should have to share in the pain. It's good we all have lawyers to defend us against ethical and legal lapses that individuals within companies make. That is part of what makes this country great.


    And another MNB user wrote:

    I do not know anything about this lawsuit or what Dannon will do. However, I do remember congressional hearings at which the tobacco industry denied a few things. I also remember a few pharmaceutical company ads. Hmmm – pet food… hmmm/. Congress should “pass legislation” when corporate America puts people and truth in front of profits. It can be done profitably. This particular suit may qualify as a lawyer driven suit but that does not mean the public should lose all rights to sue. There are no simple answers to complex issues.

    Wow. This is a landmark day here on MNB - two emails saying nice things about lawyers.




    Responding to yesterday’s story about a study saying that consumers more often make their buying choices based on selection rather than price, MNB user Gil Harmon wrote:

    Consumers who spent $345 Billion in Sales in 2007 must have seen something I did not at Wal-Mart, because their category management is based on price, not selection. I think this study is fundamentally flawed because I know consumers who shop in traditional Hi-Lo formats who will tell you that it is the selection that caused them to spend more their, but they spent the other 96% of their consumer dollars at Wal-Mart. Whether or not the study is flawed, I believe, it is a question of value (the price of something, in conjunction with other attributes (quality, service, cleanliness, SELECTION). The question of value is a relative one per consumer, but overwhelmingly, if a consumer does not see value, they will matriculate to a retailer where the perceived value is better.

    Point being if I sold a thousand types of peanut butter at $100 a piece, selection does not play into the consumer's thought process to spend more.

    Of course people spend more when their is more choices of value, otherwise, we would all be Aldi's or Trader Joe's, and only sell private label with the highest margins. This study is not as interesting as it is misleading. Selection is "more important to most consumers than price," but I contend this is only true when all items fall within a "consumer defined" value algorithm.





    Writing about Wal-Mart’s environmental strategy, which includes the use of wind energy, one MNB user the other day described wind turbines as a “blight on the landscape.” To which MNB user Michael Sommers responded:

    I would have to disagree. What I see as ruining the ‘natural value of the free and open land’ are the nuclear and coal power plants that this country has so many of. Coal power plants are terrible for the environment, causing immense pollution, where wind turbines, as far as I know, create little to no pollution, and quietly sit on top of hills where their blades turn. They don’t create nuclear waste that needs to be buried under ground in Nevada, or, at the extreme, blow up and blow radiation into the air like the accident at Chernobyl. I am a great fan of wind turbines, and am confused why there aren’t more of them. Could they not be placed in less populated areas as to not disturb those who do find them an eyesore? In a time when the environment is finally becoming a concern and grocery outlets are turning away from plastic bags, why not then, also turn toward something that doesn’t add further pollution and CO2 emissions into the atmosphere in the form of wind turbines?

    I tend to agree with Michael. When in France last summer, taking a train through the countryside, the sight of windmills dotting the landscape was, in fact, rather romantic. “Blight” is not the word I would use…though I suppose anything can become a blight if built in too many numbers with too little thought.

    KC's View: