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    Published on: March 24, 2008

    The New York Times reports that the toughening economy means that more shoppers are engaging in old-fashioned haggling when they go into stores in search of products…and that many retailers eager to make sales are perfectly willing to go along.

    “Savvy consumers, empowered by the Internet and encouraged by a slowing economy, are finding that they can dicker on prices, not just on clearance items or big-ticket products like televisions but also on lower-cost goods like cameras, audio speakers, couches, rugs and even clothing,” the Times writes. “The change is not particularly overt, and most store policies on bargaining are informal. Some major retailers, however, are quietly telling their salespeople that negotiating is acceptable.”

    Among the national retailers willing to negotiate: Home Depot and Best Buy.

    Shoppers who want to engage in haggling have to be sure to do their homework and know what they are talking about, according to the story. And on the retail side, nobody is really saying how much leeway managers and sales people have when engaging in negotiation…though retailers do say that this level of autonomy at store level seems to be good for creating the impression that these are neighborhood stores, not just outposts for monolithic corporations.

    KC's View:
    If this catches on, people are going to want to start negotiating the price of a gallon of gas….but I’m guessing that in this case, the companies involved will be more than happy to live with the image that they indeed are monolithic corporations.

    It is interesting to see that this seems to be at least an indirect extension of an Internet-oriented mentality, in which the customer wants to be believe that he or she is in control. It is something that retailers have to get used to….in many cases, consumers actually do have as much or more information at their fingertips as the person or company trying to sell them something. Knowledge actually is power in such cases…power that has a real bottom line impact.

    Published on: March 24, 2008

    Pay By Touch, the biometric authentication and transaction provider, announced late last week that it “could no longer support the biometric authentication and payment system as it currently exists, based on lack of funding and current market conditions,” and was shutting down its systems.

    The company that does business as Pay By Touch, Solidus Networks Inc., had filed for bankruptcy protection last December. It blamed the shutdown on “lack of funding and current market conditions.”

    The move affects an array of 600 retailers that had installed the Pay By Touch system, including Jewel-Osco and Piggly-Wiggly.

    According to the Chicago Tribune, “The firm's failure prompted some financial analysts to question whether technology that relies on biological information to identify a customer is ready for the market's mainstream. Others contend that Solidus' troubles are peculiar to the company and its execution, not to any underlying technology shortcoming.

    The Tribune also reports that the Pay By Touch machines have been disabled until they can be removed.

    “The Solidus system required participating customers to provide billing information and fingerprints that were stored in a central database,” the Tribune writes. “ A customer buying groceries let the machine scan his fingerprint to identify the correct account to be charged.

    KC's View:
    While it certainly can be said that improvements can and will be made in biometric technology, it is foolish in my estimation to suggest that the collapse of the Pay By Touch business indicates a fatal flaw in the concept of biometrics.

    The collapse of one company is just that – the collapse of one company. And it comes during a time of economic toughness when investors may be feeling less confident than they might in more flush times.

    Published on: March 24, 2008

    In the aftermath of last week’s revelation that two Delhaize-owned US companies, Hannaford Bros. and Sweetbay Supermarkets, have been hit by a credit card breach that exposed as many as 4.2 million cards to the potential of fraud, the Boston Herald reports that Hannaford “has been hit with two class action lawsuits filed on behalf of consumers whose credit and debit card numbers were stolen as a result of a security breach.

    “A Philadelphia law firm, Berger & Montague, said it filed suit Wednesday in U.S. District Court in Portland, alleging that the supermarket chain was negligent for failing to provide adequate security for computer data. A similar lawsuit filed in U.S. District Court in Bangor named Melinda Ryan as lead plaintiff.”

    While Hannaford is being charged with negligence in the suits, the New York Times reports that “even while the theft was under way last month, Hannaford was found to be in compliance with the security standards required by the Payment Card Industry, a coalition founded by credit card companies. The group sets rules on issues like screening of employees and precautions against hackers; industry standards were tightened in recent years after other significant data breaches. Outside assessors audit companies to ensure compliance. The identity of Hannaford’s auditor was not disclosed.”

    The Times notes that Hannaford believes that the “data were exposed when shoppers swiped their cards and the information was transmitted to banks for approval. Thieves have commonly pilfered card data from databases maintained by merchants or card processors, but the Hannaford episode appears to be the first large-scale piracy of data in transit.”

    And, the Boston Globe reports that “Vermont banks are scurrying to help consumers put at risk … reissuing cards and monitoring account activity in hopes of protecting them from fraud.

    “Some are automatically reissuing cards, others are more actively monitoring account activity, using information obtained from Visa and MasterCard about which customers shopped at 14 Hannaford Bros. Co. grocery stores in Vermont. The Vermont Attorney General's office says it has only received one call from a Hannaford customer and has no indication that any Vermonters have been ripped off as a result of the breach.”

    As of last week, about 1,800 specific cases of fraud related to the breach had been identified, with the unauthorized use of cards in places as disparate as Houston, Detroit, San Francisco, France and Brazil.

    KC's View:
    It may be too early to reach this conclusion, but it strikes me that at least the early coverage indicates that this is not so much a Hannaford problem as the kind of security hole that may be inevitable with these sorts of technology advances.

    Often, the people who are at the cutting edge when it comes to technology are the ungodly, the villains and the disreputable…possible because many of them have more active imaginations than people of conventional and traditional morality. Which is why they may see holes before businesses even see the whole…and now it is up to the good guys to learn and react and try to get ahead of the game.

    Published on: March 24, 2008

    The Baltimore Sun reports that negotiators for the United Food and Commercial Workers (UFCW), representing employees of Safeway and Giant Food in the Washington/Baltimore market, “are bracing members for a strike as talks with the area's two largest grocers stall.”

    As previously reported, both chains are advertising for replacement workers to be brought on in the event of a job action by organized labor. If no agreement is reached, a vote by union membership is expected on April 1.

    The Washington Post reports this morning that “a source close to the talks who spoke on condition of anonymity because negotiations are ongoing, said the companies have proposed that all employees pay modest monthly premiums for their health care. Currently, most workers do not, except for part-time workers with family coverage. The union raised the possibility of a strike, but members had not voted to take such action as of last night.”

    “At this point there very likely could be a work stoppage,” Tim Goins, vice president and director of legislation for UFCW Local 27, tells the Sun. “There hasn't been a whole lot of movement…”

    KC's View:

    Published on: March 24, 2008

    The Des Moines Register reports on Hy-Vee’s plans to create a small store format that initially will be used to replace a full-sized unit that has been judged to be unsuitable to the neighborhood of Lincoln, Nebraska, that it serves.

    Hy-Vee CEO Ric Jurgens tells the Register, “We think there is a value in developing a smaller store model with a limited assortment of merchandise.” The unit is slated to be between 20,000 and 25,000 square feet, or about 25 percent the size of a traditional Hy-Vee.

    KC's View:
    It is smart to have different store formats for different markets…and this is a good move by Hy-Vee…which, because of its decentralization and the autonomy it gives its store managers, ought to be a great place to try a new format.

    Published on: March 24, 2008

    • Wal-Mart announced last week that its private label Great Value milk will now only come from cows that have not been treated with artificial growth hormones, such as recombinant bovine somatotropin (rbST).

    While the federal government has said that rbST poses no threat to people who consume it, Wal-Mart said that the move is in response to customer requests.

    • Published reports say that a federal judge has ruled that two websites that parody Wal-Mart’s image - walocaust.com and walqaeda.com - are satirical and therefore protected free speech under the Fist Amendment.

    Wal-Mart had maintained that some people might be confused about the authenticity of satirical merchandise being sold by the site, and maintained that the merchandise infringed on its trademarks, but the judge ruled that a parody is protected and therefore not properly challenged by a trademark action.

    KC's View:
    It is entirely possible that more people will know about walocaust.com and walqaeda.com as a result of the failed lawsuit than they did before the suit was filed. Which sort of argues against the existence of the lawsuit to begin with.

    Published on: March 24, 2008

    The Seattle Post-Intelligencer reports that a California court has ordered Starbucks to pay $86.7 million – or almost $106 million including interest – in a case that charged the company with illegally requiring that workers share their tips with sift supervisors.

    Starbucks said that the ruling is “beyond all sense and reason,” and said it would appeal.

    According to the paper, “the Starbucks workers alleged that the company's tip pool policy violated California's labor code because ‘agents’ of the company, in this case shift supervisors, were sharing in the tips with baristas. The California case originated in San Diego, and it covers roughly 120,000 baristas who worked for Starbucks in that state from October 2000 to February 2008.”

    The plaintiffs now have to assemble a distribution plan, which will be reviewed by the court after May 1.

    KC's View:
    Not good timing for Starbucks, which only 48 hours before the judge rendered his decision had unveiled its plans to reinvigorate the brand. For the folks at Starbucks’ Seattle headquarters, it must be more than a little frustrating…

    Published on: March 24, 2008

    USA Today reports that baby boomers have something new to worry about…or not, if the statistics are correct:

    “About 14 million, or roughly 18%, of the USA's 79 million baby boomers can expect to develop Alzheimer's or some other form of dementia in their lifetime, a newly released report shows … The oldest baby boomers are turning 62 this year and are by definition entering the risk zone. Age is the single biggest risk factor for the disease: The likelihood of developing Alzheimer's doubles every five years after age 65 … If no cure for Alzheimer's is found, the nation will be faced with a half-million new cases of Alzheimer's in 2010 and nearly a million a year by the middle of the century.”

    Part of the problem is that as treatments and cures are developed for other diseases, people live longer – which leaves them vulnerable to maladies such as Alzheimer’s.

    It also leaves the economy susceptible to Alzheimer’s-related problems. According to USA Today, “The coming Alzheimer's epidemic will, if left unchecked, put a huge strain on the health care system, including Medicare. In 2005, Medicare spent $91 billion on Alzheimer's and other dementias, and spending could jump to $160 billion by 2010 and $189 billion by 2015.”

    KC's View:
    I had a clever riposte to this story….but I can't remember what it was.

    Published on: March 24, 2008

    • The Orange County Register reports that both Albertsons and Stater Bros. are using dietitians and healthy eating education programs to help shoppers identify better-for-you foods to buy and enjoy.

    “The move by both chains represents a seismic shift in strategy for traditional supermarkets, which are not commonly viewed as the No. 1 destination for health conscious shoppers,” the Register writes. “But, with alternative stores such as Whole Foods Market, Henry's Farmers Market and Trader Joe's eating away at market share, industry experts say traditional markets are smart to offer free and easy nutritional advice for consumers.”

    AFX News reports that the French government has rejected the efforts by a group of farmers there to overturn a ban on the use of a strain of genetically modified corn. The farmers had been backed by Monsanto, which manufactures the corn.

    The GM corn was banned because of concerns about its impact on the environment, as well as worries about the long-term impact on public health.

    • Published reports say that California-centric Peet’s Coffee & Tea is looking to make a move to the east coast…but plans to do so not by opening Starbucks-style cafés, but rather by supplying fresh roasted beans to supermarkets. The first step is to have the beans sold by Publix, which already has signed a deal with the coffee company…and the goal is to be national by the beginning of next year.

    Advertising Age reports that Anheuser-Busch will roll out a new brand extension this autumn called Budweiser American Ale, which is described as a darker, richer version of the company’s flagship brand.

    • The US Food and Drug Administration (FDA) is urging consumers to throw out cantaloupes imported from Honduras, saying that they appear to be linked to a salmonella outbreak.

    However, MarketWatch reports this morning that Honduran President Manuel Zelaya called the FDA's move "extreme and imprudent," and said that there was no proof that the salmonella outbreak was connected to Honduran cantaloupes.

    • In the UK, the Sunday Times reports that in the wake of bribery charges against a Sainsbury buyer accusing him of taking kickbacks from a potato supplier, the retailer has sent out a letter to all manufacturers emphasizing that Sainsbury has strict regulations against taking gifts of any kind.

    Sainsbury is cooperating with authorities investigating the case, and is working on the premise that the company has been victimized.

    • The Chicago Tribune reports that KFC will try a new tack – grilled chicken, which it is testing in addition to its traditional fried chicken menu in six cities and is likely to roll out early next year.

    Fox News reports that the Texas Alcoholic Beverage Commission has seized 411 bottles of illegal vodka – each one containing a 10-inch rattlesnake. The Bayou Bob’s Brazos River Rattlesnake Ranch, which was selling the booze, is being charged with selling alcohol without a permit.

    Alcohol infused with snakes or scorpions – often called “serpent sauce” is believed to increase male virility.

    KC's View:

    Published on: March 24, 2008

    MNB took note of an Arizona Republic story last week about PetSmart’s plans to offer a new suite of services for pets, including American Kennel Club citizenship classes, breed-specific grooming and PetHotels where animals will be treated to bedtime stories and belly rubs.

    My comment: Maybe there are people who would pay money to have someone run their pets’ bellies before they go to bed…but that’s a lot farther than I’m willing to go.

    When I shop at PetSmart, I walk in, grab the same big bag of dog food for Buffett (our uncommonly hungry, not terribly smart yellow lab), go through the checkouts (which always takes longer than expected because no matter how many people are on line, there usually is just one lane open), and get the hell out. No wandering, no browsing, no casual shopping…and if PetSmart wants to do something really smart, it should open more checkout lanes. (It’d be nice if the store manager actually hung out at the front end so that he’d know what is going on.)

    I also think that if PetSmart wants to be prescient, it should start figuring out the whole online ordering thing. Because while PetSmart does sell bags of dry dog food online, the cost of the shipping is almost as much as the cost of the dog food. At some point, I’m sure, Amazon (or another competitor) will get into this business…and they’ll offer some version of free shipping and even a subscription service that will eliminate any need for me to go to the store.

    And then my visits to PetSmart will vanish.


    Apparently, I hit a nerve.

    MNB user Bob Gremley wrote:

    I've had identical experiences at PetSmart as well, Kevin.

    Fortunately, there's a local independent pet store in Green Bay – Family Pet Food Center. The prices are the same or better than the chains, the service is prompt and friendly, they have a frequent buyer program that doesn't require a card, they give free snacks to your pet when you bring them in the store, and they'll even carry the 40 lb bag of dog food to the checkout and to your car if you wish.

    They seem to be doing fine - even with several of the big chains in the area now there's always several people in the store. Better service, cheaper prices, local business, clear choice. Their business does well because of everything you discuss in your column every day.


    Another MNB user wrote:

    So, it’s not just our new store that operates as you’ve described. I thought our particular store management was just having a hard time getting its act together. It’s been at least a year. No real improvement.

    The only reason my daughter and I continue to shop there is because this store helps our local animal rescue organizations find homes for the cats in their care. We always take a look at the kittens and cats available and let friends/family know when we find one they might want to adopt.

    I wonder how that could be worked into a loyalty program . . .


    And another MNB user wrote:

    I despise going there and avoid it as much as possible for all the same reasons you gave. The only thing I buy there are dog biscuits and chew hooves. I may need to look at Amazon for those purchases.

    And still another MNB user wrote:

    Boy, I can't tell you how much I completely echo your thoughts on PetSmart. Bedtime stories and belly rubs?!? How about getting back to the basics and providing some decent customer service and quick transactions.

    It never fails, regardless if I'm picking up a quick bag of treats for my dog Miles or doing a major shopping trip on a weekend (talk about a painfully slow experience), there is one or maybe two checkout lanes open. Not to mention that one lane typically shuts down due to checker inexperience or some type of system failure.

    Thanks for allowing me a brief moment to vent. Good to hear that others are sharing the same frustrations with PetSmart.


    MNB user Katie Blickenstaff wrote:

    I couldn’t agree with you more about the shopping experience at PetSmart; I avoid the store at all costs. I don’t think their prices are that great to begin with, and when you add horrendous customer service on top of that, I can’t bear shopping there. Not only do they only ever have one lane open so 75% of the time you spend in the store is in line, the only associates you can ever find are the vendors handing out Iams puppy packets; not actual PetSmart employees! I think instead of expanding their business by offering lavish services catering to AKC breeds and the small niche of middle America who will spend the extra money for a posh hotel stay with tummy-rubs; they should get back to their roots. If they want to be a pet-centric version of Target then they should appeal to customers who love their mutts and want to buy them quality food/accessories for reasonable prices. If they can’t provide a decent shopping experience then maybe they are better off ramping up their online store; because that’s the only place they would ever find me shopping with them.

    One MNB user suggested:

    Reduce your frustration by 50% - buy 2 bags - only have to go there 1/2 as many times.

    MNB user Clayton R. Hoerauf had a thought:

    Circuit City has perfected the on line order and pick up experience. I can sit at my desk, read side by side product reviews and buyer comments, make my decision and the item is ready for pick up within a half hour right near the main entrance to the store. Why is this so difficult for other stores to figure this out?

    Another MNB user, however, thought that I was treading on dangerous territory with my criticism:

    Now you have done it ........ sports, politics, religion and now pets!!

    Someone's wine passion is another persons choice of pets !!


    I’m an equal opportunity offender … I’m happy to make jokes about all of the above, and will continue to whenever the opportunity presents itself.

    Some days you’re the dog. Some days, you’re the hydrant. Today, it seems, PetSmart is the hydrant.

    BTW…I love my dog immensely. But I’m not paying someone to rub her belly. And in these recessionary times, I wouldn’t want to be in the belly rubbing business…because it seems to me that as people are looking for lines to cut from their budgets, “belly rubs” might be on top of the list.

    (Except, in all likelihood, for Eliot Spitzer, who probably has belly rubs as a must-have. But he doesn’t have a dog…)




    On the subject of a possible collaboration between the organics business and the genetic modification industry, one MNB user wrote:

    After reading the article in the Boston Globe about the marriage of GE seeds and organic farming I looked at the author who wrote it. It is possible that we are looking at someone who receives money in the university where she does research (U. Cal. Davis) from, dare I say, Monsanto? It’s well worth investigating the veracity of that statement because the whole story smelled of a subtle PR ploy from the Biotech industry. And by the way, the Clintons allowed Monsanto to market GE seeds back when they were President and First Lady against the objections of many scientists who suggested long term studies before releasing GE seeds into the environment. But whoever said that politicians based their policies on scientific facts? Their policies are largely based on who is bankrolling their election campaigns. This issue very clearly reflects this common practice.

    Another MNB user wrote:

    This argument seems eerily reminiscence of the argument to increase the use of pesticides and herbicides beginning in the 1930s. We were convinced that we needed to combine farming and science to develop better living through chemistry so we could feed the world. What happened?

    Organic was developed because science took food down the wrong path. Don't mess with organic.





    One MNB user had a comment about the story in a Wal-Mart employee received permanent brain injury in a car accident and was covered by her employee health plan, but then Wal-Mart successfully sued to recover the money after the woman won a suit against the person who caused the accident.

    This is just the sort of story where Wal-Mart deserves the negative publicity. This woman deserves payment of her health expenses period! She paid into the system and now the system is obligated to pay out. She either paid directly through pretax withdrawals or through a stunted pay scale where Wal-Mart picked up the tab. Either way she paid in and deserves better treatment.

    Were these terms implemented while Hillary served on the Board? Just wondering?

    But seriously, talk about kicking a person when their down, what’s next?...is her long term disability on the chopping block?


    I actually think the question of whether Hillary Clinton was on Wal-Mart’s board when this policy was adopted is the most interesting part of this email. One could imagine that this would be an issue on which the Obama campaign could capitalize.




    Regarding MNB’s ongoing Starbucks coverage, one MNB user wrote:

    I love coffee. Coffee is for me in the morning, before breakfast, what wine is for me with my dinner in the evening. The robust, rich flavors that dance on my palate and give me a wake up call in the morning, makes my stop at the coffee shop worth it. I've been reading about how they purchased new machines to brew the perfect shot of espresso, and unfortunately I don't see this as the reason I've had to part with my A.M. Starbucks waltz.

    It just, plain and simple isn't affordable. In addition to cost, I myself, personally do not enjoy the smell of the hot sandwiches in the morning at my Starbucks, I miss the aroma of the fresh brewed coffee. Now instead of coffee, I've been greeted by eggs and bacon, no thank you. I would rather stop at my local Dunkin Donuts (it's like a cheap but tasty wine), and get a medium cup of fresh coffee for $1.79, than stop at my Starbucks. They wanted dominance and in the end were defeated by themselves. Hopefully they can come back, and be the coffee shop they were the first time I went in, but after reading the CEO's "fight to the death for dominance" I have little faith. I'm not sure he is on the side of the consumer.





    MNB user Dustin Stinett had some thoughts about last week’s “OffBeat”:

    "Now that we know what you are, we just need to settle on a price."

    It might be an old joke, but it seems damned appropriate these last couple of weeks.

    It's fascinating to me that one woman who sells her body for $4,000 a night is labeled a "prostitute," while another who ends up with $50 million for a year or so is a "gold digger.”

    No point, by the way. I'm just thinking out loud. But I have to say, looking at the two of them, I just don't see the value for the money.

    I couldn't agree more that Paul McCartney got a raw deal, but I suppose that's because the numbers are so big that I cannot relate. Ms. Mills was asking for over $250 million but the judge hearing the case found her testimony to be "inconsistent."

    Is that anything like being a liar?

    So the loser's share is "only" $50 million.

    Where do I sign up?


    KC's View: