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    Published on: February 25, 2008

    What top supermarket chain is likely to announce a major labor downsizing this week, using layoffs and early retirements that will be a reaction to both tough quarterly sales and profit numbers as well as to expectations that the rest of the year isn’t likely to get much better?
    KC's View:
    And from what we’re hearing around MNB World Headquarters, this is likely to be just the first in a series of similar moves that could occur in coming months. The more people I talk to, the more I keep hearing cautionary words about the state of the economy…with people noting that every time gas or energy prices go up, it has a ripple effect on food sales.

    For example, I wouldn’t be surprised to see more stories like the one in the Wall Street Journal about so-called “salvage grocers,” which sell closeouts, including “products that manufacturers have discontinued, seasonal items that are outdated and goods that are near the date when manufacturers expect freshness to wane. Many such grocers also sell products that were damaged in transit but remain edible, such as a dented box of Cheerios. Prices tend to be significantly lower than those at conventional stores and big discounters like Wal-Mart.” For at least one segment of the consumer population, the Journal suggested, it doesn’t mater if an item is past its sell-by or eat-by dates…the rising cost of food and fuel has put them in a position where they cannot afford to make such distinctions.

    There was an excellent piece in the Boston Globeover the weekend about how a recession can be a business opportunity. Some excerpts:

    • “Business leaders confident about making decisions and deploying assets in a period of growth find they have to operate differently when sales slump and resources shrink. In some cases, the skills that had previously served them well - hiring talent, rolling out products, anticipating market demand - are no longer valued … While it's still uncertain whether the economy will stumble into recession, popularly defined as two consecutive quarters of contraction, many businesses already are feeling the squeeze. And managers are feeling the pressure. How they react will be critical to steering their enterprises through the gathering storm into calmer waters.”

    • “But managing through a slowdown is more than a matter of psychology. Like it or not, it calls for making tough choices, cutting costs, improvising, and allocating resources more efficiently … This may indeed be the time to trim payrolls, wring out excess capacity, streamline retail outlets, consolidate suppliers, or farm out production or software development to lower-cost contractors. Any of those steps could have adverse consequences, however, such as draining brainpower, ceding business to rivals, or losing control over processes. They should be done only as part of a strategic plan that would make an enterprise more competitive, advisers said.”

    • “Depending on a company's ownership structure, cash reserves, and competitive position, it may also be a time to make smart investments in new products or markets that promise growth when the economy rebounds.”

    And here is perhaps the most important passage:

    • “Businesses shouldn't lose sight of their customers when times get tough. When manufacturers raise their prices, airlines ladle on fees, or retailers skimp on customer service, it can come back to haunt them.”

    It seems to me that regardless of whether the nation enters a recessionary period, two things are likely to be true. One is that many or most people are going to be more careful about spending, and the other is that many or most people will not stop being aspirational in their tastes. As one consultant told the Globe, "The earth is going to keep spinning, day is going to follow night.” And, I would add, truly successful companies are going to figure out how to keep moving forward, even while being careful about resources.

    Stay tuned.

    Published on: February 25, 2008

    Terrific story in the Cincinnati Enquirer about Dorothy Lane Market, and how it differentiates itself in a world filled with competition – mostly by defining itself in different terms. “The average trip to the grocery store is about one thing: efficiency. You want to get in, get what need and get out.”

    But, the Enquirer writes, “Things are different at Dorothy Lane Market. From the moment you walk into one of the three family-owned gourmet grocery stores, your inclination is to slow down and take it all in. Even on a Friday evening, shoppers from south suburban Dayton stroll, smell and taste, stopping to chat with clerks in black bow ties and learn about food.

    “The ambience is attributable to one of the chain's co-owners, Calvin Mayne, whose namesake grandfather, Calvin D. Mayne, co-founded Dorothy Lane Market in 1948 on the corner of Dorothy Lane and Far Hills Avenue in Oakwood … Mayne - who runs the stores with his father - travels the country in search of foods that fill his senses. He unabashedly proselytizes to his customers about an exquisite goat cheese or once-a year apples from Michigan that he carries. They get their unique taste because they are from the front row of an orchard and are harvested a little later than the others.”

    KC's View:
    It would be my perception that from the moment you walk into a store, you can tell whether the people who own it and run it love food, or whether they are just in the business of selling boxes, bags, jars and bottles.

    Dorothy Lane Market is most assuredly a place where everybody loves food. And perhaps the most impressive thing that Norman and Calvin Maybe have done is create an environment in which the people who work there are encouraged to be creative, and challenged to be legendary tomorrow rather than rest on the laurels of today.

    One of my favorite stores. And one of my favorite families – not just because they are so good at what they do, but also because they are among the nicest folks in the industry.

    Published on: February 25, 2008

    The Chicago Sun-Times this morning reports that Milwaukee-based Roundy's Supermarkets “plans to upend Chicago's grocery scene by opening 15 to 25 as-yet-unnamed grocery stores in the city in the next several years.” Two locations already have been identified.

    Roundy’s CEO Robert Mariano describes Chicago as a “vibrant, growing city” that may be "the most favorable grocery opportunity in America" because its fast-growing population was and is underserved. Mariano knows the territory well – he was CEO of Dominick’s there in the late nineties.

    In addition to building new stores, Mariano tells the paper, Roundy’s will consider any available acquisitions – including Dominick’s, which is owned by Safeway but is rumored to be up for sale.

    KC's View:
    Just as a point of interest, Mariano goes out of his way to identify himself and his people as “foodies,” and says that he chose the company’s store designer in part because he was a “foodie,” too.

    Published on: February 25, 2008

    The Dallas Morning News reports on how Arizona-based Sprouts Farmers Market and Texas-based Market Street supermarket have “found their niche and are expanding,” even in the face of enormous competition from far bigger regional and national chains. “Each has a fractional market share, but their stores have full parking lots, and both will open multiple locations in North Texas this year,” the Morning News writes. “Developers and real estate brokers say they've moved up on the list of popular prospective tenants. And they've turned curious shoppers into converts.”

    They take different approaches. The paper notes that Sprouts “pitches itself as a natural food store, but it's also known for low prices on produce, high-quality meats and speedy checkouts,” while Market Street “takes the opposite, all-encompassing approach, melding a traditional supermarket with Whole Foods-style organic and health foods and Central Market-style specialty foods, wine and prepared meals.”

    KC's View:
    The success that they have in common would seem to have as much to do with their willingness to embrace individuality as anything else. Because individuality can really turn customers on as much as it turns on its practitioners.

    Published on: February 25, 2008

    MNB has been reporting in recent weeks about the growing list of supermarkets not selling tobacco products.

    The list of companies that recently have announced this decision at this point includes Wegmans; Andronico’s; ShopRite Supermarkets of Cherry Hill, NJ; DeCicco Markets of suburban New York; and Budwey’s Supermarkets, of western New York. Not mentioned in past articles have been companies like Whole Foods and Trader Joe’s, which do not sell tobacco.

    MNB speculated the other day that many of the companies deciding not to sell tobacco products in recent weeks are family-owned companies…and that it will be interesting to see what happens when larger, publicly held companies come to the same conclusion.

    Well, MNB received an email from an employee at Tesco’s US-based Fresh & Easy Neighborhood Markets chain the other pointing out that it does not sell tobacco…and that it is both a public company and not family-owned.

    Point taken.

    KC's View:
    The way things are going, I expect this list to continue to grow. If retailers are going to draw a directly line between their food products and health & wellness, it becomes increasingly difficult to sell tobacco and do so with a straight face….especially if a chain wants to maintain a consistent brand image.

    Published on: February 25, 2008

    The Boston Globe reports that the US Food and Drug Administration (FDA) “has published guidelines that suggest employees of fresh-cut fruit and vegetable processors wash their hands to help stop the spread of contamination.

    “The voluntary guidelines, posted on the FDA website … include admonitions on hygiene and produce tracking. The FDA said the advice … “complements FDA's current good manufacturing practice requirements for foods.”

    KC's View:
    Seeing as how the rash of recalls and headlines about food poisoning suggests that just maybe the FDA’s rules need a little bit more than just being complemented, I’m less than overpowered by this new announcement.

    I guess better safe than sorry. Though what really worries me is the idea that people actually need to be guided to wash their hands when handling food.

    Published on: February 25, 2008

    Forbes has a story about how a Hacienda Heights, California, McDonald’s located in a large Asian community has decided to take a new approach, décor wise.

    “Gone are the plastic furniture, Ronald McDonald and the red and yellow palette that has defined the world's largest hamburger chain,” the story reports. “Leather seats, earth tones, bamboo plants and water trickling down glass panels have taken their place. The makeover elements are meant to help diners achieve happiness and fortune - whether they realize it or not.

    That's because the restaurant was redesigned using the principles of feng shui, the ancient Chinese practice of arranging objects and numbers to promote health, harmony and prosperity.

    “The concept is an unlikely fit with fast food. But the restaurant's owners say the designs are aimed at creating a soothing setting that will encourage diners to linger over their burgers and fries, and come back again.”

    According to the story, the effort is part of a broader strategy on McDonald’s part to create stores that are more attractive to local tastes and less cookie-cutter.

    KC's View:
    Normally, this is the sport in MNB when I would make a joke like, “Now that they’ve gotten rid of the plastic furniture, it’d be nice if they’d improve on the plastic food.”

    But whenever I do that, I get accused of being a snob, a yuppie and a foodie who doesn’t appreciate the charms and improving nature of fast food. (Not true. I’m too old to be a yuppie.)

    I actually think this is an interesting trend in the broader sense. There is no reason that a fast food joint has to look like a fast food joint, just as there is no real reason that a supermarket has to look like a supermarket. It is through innovation and surprise that customers can be captivated and enthralled.

    I don't know about you, but I love to be surprised when I walk into the store. And, to be honest, it happens too rarely.

    Published on: February 25, 2008

    The Wall Street Journal reports that “Hallmark/Westland Meat Packing Co., which issued the biggest meat recall in U.S. history last week, probably will shut down permanently.” A company spokesman tells the Journal that because the company is privately held and short on cash because some customers have stopped paying it, it is increasingly unlikely that ownership will be able to keep the business alive.

    It was earlier this year that Hallmark/Westland voluntarily recalled 143 million pounds of beef that went through its processing plant amid charges that at least some of its employees had not just mistreated the cattle, but also had tortured “downer cows” into standing up so they could be slaughtered; “downer cattle” are a higher risk for mad cow disease. What made thing worse was that the Humane Society released a video of the animal cruelty, and that a large percentage of the recalled beef already had gotten into the food chain – much of it in school cafeterias.

    USA Today reports this morning that “the nation's largest meat recall could grow into its largest food recall as companies destroy products with any amount of the 143 million pounds of beef recalled last week. The recall's scope is unprecedented, says the Grocery Manufacturers of America. The value of foods affected — including soups, sauces, burritos and bouillon cubes — could run into the hundreds of millions of dollars, a senior GMA official says.

    Government officials say that it could take some time to figure out exactly how many products the recalled meat went into, and some in the industry already are questioning whether the current effort is overkill, since there have been no reports of illness, no proof of contamination, and the USDA has classified the risk to consumers as remote.

    KC's View:
    Demonstrating how little room for error there is in the food business these days.

    Of course, it is ironic that, as noted above, even as all this beef is being recalled, “salvage stores” are selling food past its sell-by dates because that’s all some people can afford.

    Published on: February 25, 2008

    The new edition of Food, Nutrition & Science from The Lempert Report is out, and features as its lead story an in-depth analysis of the current meat recall story. In addition, the report also features these critical food science stories:

    • “Recent studies have raised new concerns about the content of mercury in fish, suggesting that updates are needed for the 2004 FDA’s consumer advisory guidelines regarding fish safety. The studies, which looked at the mercury content of fish samples purchased at both sushi restaurants and grocery stores, found that a large percentage of the samples contained levels of mercury beyond levels that the FDA considers safe.”

    • A Southwestern University study confirms that rising CO2 levels in the atmosphere could decrease the nutritional value of many major food crops in the years to come:

    “The Southwestern study found that crops grown in atmospheres containing elevated levels of carbon dioxide had significantly lower protein concentrations. Potatoes showed a 14% decrease in protein, barley showed a 15.3% decrease, rice was down 9.9%, wheat down 9.8%, and soybeans showed reductions of 1.4%.”

    • The report also looks at two relatively new nutritional labeling programs – the Guiding Stars program created by Hannaford Supermarkets and the Overall Nutritional Quality Index (ONQI) created by Dr. David L. Katz of the Yale-Griffin Prevention Research Center in Connecticut.

    “Though their methods seem at odds at first glance, several major U.S. supermarket chains have indicated an active interest in both licensing systems. It’s possible that both systems may be able to work together to provide even more information to the consumer during their shopping experience than just one system or the other. But could adding more labels just add more confusion?”

    The answers…and much more…are available in this month’s report.

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

    http://www.foodnutritionscience.com/

    KC's View:

    Published on: February 25, 2008

    • The Chicago Tribune reports that “at the end of one of the most successful five-year streaks in its history, with the specter of a sales-sapping recession looming,” fast food giant McDonald’s … “is trying to give itself a second identity: coffee giant. Adding fancy coffees and other specialty drinks is a bold move intended to make McDonald's a beverage destination and a rival to Starbucks and other coffee chains. It's a key strategy aimed at luring more customers for snacks between meals.”

    However, as the Tribune notes, “it also is one of McDonald's riskiest product launches ever,” since it takes the company’s franchisees outside their comfort zone and creates organizational and infrastructure stresses that they are not sure they can handle.

    Still, the company perceives that the time is right – not just because it would like to give its sales a bit of a jolt, but because high-end coffee retailer Starbucks has been suffering a weak spell and is seen as vulnerable.

    • In the UK, The Mail reports that Tesco, concerned about heightened competition in the e-commerce segment and a weakness in the economy, plans to attract new shoppers to its website by offering discounts equivalent to almost $20 (US) for all orders of about $100 (US) or more.

    At the same time, Ocado.com, one of its major online competitors, has announced that it will match Tesco’s prices on some 100 products.

    USA Today this morning reports that “a number of wines have been creeping past 14% alcohol and even into the 15- to-16 percent range, as opposed to the tamer 12- to 13-percent of years past. This is largely because vintners wait longer to pick their grapes. More mature fruit is thought to make tastier wine, but it also means sugar levels have a chance to rise, which comes with the side effect of pumping up the alcohol volume. Warmer harvests only increase the phenomenon.”

    While some in the industry object to the higher alcohol content, supporters say that the so-called “big wines” tend to be bigger, bolder and chewier, lingering longer on the palate. Of course, this raises another issue – the influence of technology on winemaking. It seems that there are technological solutions that can create bigger wines without the higher alcohol content, but some object to the influence of such technologies in the vintner’s art.

    KC's View:

    Published on: February 25, 2008

    Last Friday, I ranted about an email sent by an MNB user responding to a story concerning a Muslim woman wearing a veil who was insulted by a Wal-Mart cashier. (Wal-Mart did exactly the right thing – it apologized and sent the guy to sensitivity training.) But while I originally suggested that in today’s world, people have to be careful about what they say since even dumb jokes and statements can be interpreted as far worse, this MNB user wrote:

    The "object-lesson" is that, if you want to go around looking ridiculous in public, you ought to expect to be ridiculed. This lady is the moral-equivalent of a guy with green hair, tattoos, and a nose-ring.

    I was appalled. And said so.

    And got more email.

    One MNB user wrote:

    I sincerely hope these responses represent an insignificant portion of your audience. Those types of responses are more alarming than the story of the employee who perhaps (giving that person the benefit of the doubt here) unintentionally insulted a customer. Wondering who those people are, what company’s they belong to, what positions they hold, and how much they influence the day to day, hour to hour, minute by minute operations or business of their company large or small. Cripes, have they ever been in the same company and worked with me?

    Because someone appears different we should discriminate? Because they may (or may not) come from a country with little tolerance of our culture we should return the ideology? Maybe arguable moral and ethical issues aren’t appealing to that mindset.

    How about a “sound business decision”: Thoughts like that alienate whole segments of your consumer base. Would those who responded so callously, be the ones to earnestly apologize and send that employee to sensitivity training, receiving the Council on American-Islamic Relations’ acknowledgement of appropriately taking care of the incident? Or would they permit that behavior to continue and lose that peer group to a competitor? Hey, if don’t want to offer a nice place to shop, the place down the street will. Yes, tolerance is good business sense, but gee, understanding—profoundly understanding--your customers makes a better experience for them in your stores, fulfilling their daily needs in life, makes your business a place they want to come to/don’t avoid, enriches your employees’ lives, and by extension your locality, region, the world.

    Revolution just doesn’t start at home, it also starts at work. Rant on brother!


    Another MNB user wrote:

    In reference to the person citing green hair, nose ring and tattoos: I was very disappointed in a student pastor I knew several years ago. A term was beginning at the seminary he attended, and one of the new students was heavily tattooed and bizarrely attired. He mentioned that he had fervently hoped that he would not be assigned that person as a roommate. Two seminary students, and one made a snap judgment about the other based on appearance! It certainly gave me doubts about the suitability of this person for the profession, but he has continued on and is moving up the church hierarchy to the best of my knowledge.

    Hypocrisy sometimes wears a clerical collar. And it has been my experience that religious institutions aren’t different from secular institutions – often it is the most hypocritical people who move up the highest in the ranks.

    Another MNB user wrote:

    I don't have the time, nor do you have the space, to really go into it, but this is one of the answers to why the rest of the world has problems with the U.S. There is much more (economics, politics, religion, ethnicity, etc.) beyond the Atlantic and Pacific Oceans (beyond state lines, and city blocks, for that matter); a little effort on our part to understand that would go a long way.

    MNB user Tom Devlin had a few thoughts:

    While it was a very powerful and an overblown idiotic statement by the employee, It does show you that what he said has been probably been said in different ways by many people who may see someone who does not 'Fit In".... Just like that employee would if they were to walk down a street in the Middle East or somewhere in the Orient..

    We take many college courses to help us in the business world but every school no matter what level should require a course in Anthropology... Not just Americans but in the world... We may all be different how we all think, act and dress ....but it is not meant to offend anyone.


    Still another MNB user wrote:

    It embarrasses me when Americans behave that way... I go back to my experience around 9/11 when I was on Grand Jury Duty and had to go down to the courthouse near Ground Zero. I would print out horrifying emails from friends to read as I rode the subway about their fears of minority groups from their vantage points in suburban, middle America...I would crumple the email and look around me in the subway car...never feeling safer than that moment when I saw the rainbow of faces around me...guess it's all conditioning or where/how you grew up.

    MNB user Pete Marotta wrote:

    I agree with your stance on the Muslim customer who was insulted. In Retail, the customer is king. The store needs to apologize and the employee probably should be fired, not "re-trained". In my first years in retail, you treated every customer like a guest in your home, regardless how they looked, acted, or how you felt about them.

    Customer service today barely means a manned counter or checkstand. This is not how you win in retail. No excuse here. The Customer rules supreme.

    The other side of the coin, outside of the stores, we must be careful of political correctness. It has run amok and is a real threat to free speech. What has evolved is a system in which some people can say anything, while uses feel restricted. This can lead to dire consequences. Equal means equal. Lets all tone it down a little bit and just be decent to each other. Remember that?


    Another MNB user wrote:

    At what point in time did the onus for adaptability and assimilation shift from immigrants to the United States. I grew up in western PA in an area of great cultural diversity. Italians, Greeks, Croatians, Polish, Germans, Lebanese... My grandparents on my mother’s side came to this country from Syria in the early 1900s. By the time I was born in 1961, Jidoo (my grandfather) spoke perfect English without a even a hint of an accent. Yet when he got together with his family from "the old country" he took pleasure in the opportunity to converse in his native Arabic.

    What these immigrants had in common was deep pride in their heritage matched only by their love for the USA. They learned our language and embraced our laws and customs. They applied their skills and work ethic in the labor force, they paid taxes, served our country in the armed forces and made tremendous contributions to the fabric of our country.

    Too often today, that isn't the case.


    I’m not sure I agree.

    It seems to me that many, if not most, of recent immigrants to the US work hard for a living, contribute to the society, and pay taxes. It would be interesting to find out how many people serving in the Armed Forces currently are from families that have immigrated to the US during the past 30 years. (I’d guess a sizable proportion…but it’d be purely a guess.)

    I do think that technology makes it possible for people to stay more connected to their origins than at any time in the past. They can use the Internet to read local newspapers from their hometowns, long-distance phone calls are cheap, cell phones are plentiful, and if you have a satellite dish you probably can get programming from the old country. The upshot may be that immigrants don't have to adapt to the same extent that your grandfather did, but I’m not sure that this means that they are any less dedicated to the ideal of being an American.

    But this is almost all irrelevant.

    These immigrants live in America, and the very nature of what America is supposed to be suggests that we should embrace them, not ridicule them for being different…since at some point, we were all “different.

    Furthermore, they are customers. Good business sense dictates that we be sensitive to their needs and concerns. Or they will shop somewhere else.

    KC's View:

    Published on: February 25, 2008

    Last night, the 80th annual Academy Awards were handed out … and the winners in the major categories included:

    Best Picture
    “No Country For Old Men”

    Best Actor
    Daniel Day-Lewis, “There Will Be Blood”

    Best Actress
    Marion Cotillard, “La Vie En Rose”

    Best Supporting Actor
    Javier Bardem, “No Country For Old Men”

    Best Supporting Actress
    Tilda Swinton, “Michael Clayton”

    Best Adapted Screenplay
    “No Country For Old Men”

    Best Original Screenplay
    “Juno”

    Best Animated Movie
    “Ratatouille”

    Best Director
    Joel Coen & Ethan Coen, “No Country For Old Men”

    KC's View:
    Best line of the night had to be when Jon Stewart, the evening’s host, referred to “Away From Her,” the drama about Alzheimer’s that starred Julie Christie. Noting that it was a movie in which a woman forgot who her husband was, he quipped, “Hillary Clinton called it the ‘feel good movie of the year’.”