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    Published on: May 13, 2008

    by Michael Sansolo

    As a rabid fan of both baseball and metaphors, it’s easy for me to find constant lessons in the game I still consider the national pastime. And every now and again, someone agrees and the lessons become clearer still.

    Doug Glanville, a long time professional baseball player, wrote a recent column for the New York Times that bears reading whether you love baseball or know nothing about the sport at all. Without offering a word about retailing or consumers, it explains everything you need to know about the current state of business.

    Glanville’s article centers on what must be the single hardest act in sports: hitting a curveball. For those of you who know nothing about baseball, this is the essence of that statement. Few acts in sports are considered harder than hitting a baseball. The hitter has something like two-tenths of a second to locate the ball whizzing toward him, make a decision to swing his bat and manage to make the bat meet the ball.

    As Glanville explains, that act becomes infinitely harder when the curveball is involved. Unlike a fastball, which travels very fast and straight, a breaking ball moves. The movement could be down or side to side. Of course, the hitter has no idea it is coming, which means you have to wait to see if, when and where it will break. (Or you could follow my example and dive on the ground and wait for the umpire to call you out. Did I mention that I hate curveballs?)

    Not all curveballs are thrown in baseball. Glanville’s article also talks about life’s curveballs and the challenge of dealing with them. And in that statement, he provides the lesson facing us all in business these days.

    In even the easiest times, success doesn’t come without a price. Fastball problems those coming at us straight and true—aren’t that easy to hit after all. We have to work at execution, strategy, hiring…and well everything. And you have to be really, really good to hit a fastball.

    But 2008 seems like a time of curveballs. With the economy weakening and prices rising, suddenly everything has gotten trickier. Choices have to be made on how much of cost increases to pass on to consumers. Too little and you start losing money; too much and you might send them to a lower cost operator.

    As Glanville explains, he learned to hit curveballs through hard work, even though his natural skills were strong enough to get him deep into professional baseball. Again the metaphor is clear: none of this will come easily. In a tough environment, only the best will succeed.

    Not surprisingly, I love baseball movies too. My favorite scene in “A League of Their Own” doesn’t involve crying in baseball. Rather it’s when Tom Hanks and Geena Davis argue over her decision to leave the game because it got to be “too hard.” Hanks replies, “it’s supposed to be hard. It’s the hard that makes it great. If it wasn’t hard, everyone would do it.”

    Retail success is no different. What separates the best companies from the rest isn’t how well they perform in good times. After all, most everyone can hit a fastball. Rather, it’s what happens in tough times, when the obvious decisions aren’t so easy and the game suddenly becomes harder than ever.

    That’s when skill needs the support of practice, creativity and new thinking. Otherwise, it could be strike three really quickly.

    Batter up!

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

    KC's View:

    Published on: May 13, 2008

    The reviews by fellow retailers and members of the investment community may not be raves, but that hasn’t stopped Tesco's Fresh & Easy chain of stores in the US from announcing an expansion of its private label program due to what it called "increasing demand" from customers.

    According to a statement released by the company, "Following a great customer response and encouraging sales of Fresh & Easy own-brand food, the company is expanding the range with 250 additional products. Some of the new products include fresh prepared ready meals, new juices and brewed teas, soy and goat yogurt, and a range of ready-to-grill meats.

    "One of the new product additions already in stores is the mixed grill pack, which retails for $9.99 and contains four sausages, four beef patties, four chicken thighs and four chicken drumsticks – a little something for everyone.

    "In addition to the tried and tested favorites, the new products that will be introduced over the next three months will give customers plenty of new dishes to try. While shoppers are checking out these products they may also notice a few other improvements to Fresh & Easy stores."

    The statement also quotes Fresh & Easy CEO Tim Mason: “We developed Fresh & Easy by listening to what consumers wanted in a grocery market. We are delighted customers have responded so well to our own-brand foods. We know our popular ready meals – such as our mango chicken and beef lasagna – give families a great value alternative to take-out, and now there will be plenty more for customers to choose from … We continue to listen to our customers and look for ways to make our shopping trip even better."

    KC's View:
    It is interesting to read the press release, which says that the company is making improvements to its stores – presumably during the 90-day timeout it currently taking during which it isn’t opening any new units – but none of the actual improvements are actually listed. Instead, the release focuses on the existing and somewhat sterile décor package, which has gotten mixed reviews from most people I know.

    At any rate, this doesn’t sound like a company ready to pull out of the US, which is what some folks speculate. Rather, it sounds like a company honing its game. No surprise there – that's what Tesco does.

    Published on: May 13, 2008

    BrandWeek reports that the nation's economic difficulties are driving people away from restaurants and into supermarkets, with the frozen food section a beneficiary of changing consumer priorities.

    According to the story, "Traffic for casual dining, a segment that includes Applebee's, Ruby Tuesdays and TGI Friday's, fell 0.3% in the first quarter of 2008. But industry watchers say those ex-diners aren't necessarily cooking at home. Instead, they're gravitating to prepared foods at supermarkets like Publix and Whole Foods Market … Prepared foods account for almost $5 billion a year in sales at supermarkets nationally, per the International Dairy Deli Bakery Association in Madison, Wisc.

    "Meanwhile, there's some evidence that consumers may be reaching for frozen dinners—at least some of them—more often."

    KC's View:
    Supermarkets need to be asking themselves how they are going to keep these sales if and when the economy straightens out, and that means positioning themselves as more than just cheaper than restaurants. It means working the differences hard, and every day – pointing out to shoppers how eating at home carries with it not just taste advantages, but can actually strengthen the family in both tangible and intangible ways.

    But the worst thing that supermarkets can do is just emphasize their price advantages and look to ride the current wave of consumer priorities until it ends. Because that won’t build the business…it'll just build short-term sales. And while the latter isn’t bad, it isn’t nearly good enough.

    Published on: May 13, 2008

    In upstate New York, the Daily Gazette reports that Price Chopper plans to put its signature NY-style deli operation, Ben & Bill's, into its Saratoga store.

    This will be just the second Ben & Bill's; the first was opened in 2006 in the company’s Slingerlands, NY, unit, and the company obviously is moving slowly to make sure it has the mix and the locations right.

    The Ben & Bill's deli features specially ordered beef, pastrami, brisket and Russian dressing, and the menu includes soups, triple-decker sandwiches and a 'Monster Sandwich' of hot corned beef and pastrami.
    KC's View:
    Sounds yummy. I'm salivating just typing the words.

    Published on: May 13, 2008

    Sprouts Farmers Market, which operates 25 natural foods stores in the western United States, announced that it has secured the funding to boost its growth rate to 15 + new stores per year. The company has doubled its targets and now is aiming to have more than 100 stores up and running within five years,

    First up – seven stores to be opened by this fall, with new stores in Texas (Murphy, Richardson, McKinney), California (Tustin, Seal Beach), and Sprouts' debut in Colorado (Westminster, Parker, Ft. Collins).

    KC's View:

    Published on: May 13, 2008

    Crain's Chicago Business reports that "early sales figures for McDonald's Corp.'s new specialty coffees underscore the challenge the burger chain faces as it tries to compete with Starbucks. Sales remain tepid in two initial test markets — Michigan and Kansas City — even after months of aggressive advertising and marketing," and "unit sales appear to be well below the number needed to reach McDonald's goal of adding $125,000 in annual revenue per restaurant, or about $1.5 billion companywide."
    KC's View:
    It is early, so it is impossible to tell what this means for the long run. While this underscores the difficulty of competing with Starbucks even as that chain faces its own issues, it would be foolish to think that a marketing powerhouse such as McDonald's won't get it right. It just won't be easy. Or fast.

    Published on: May 13, 2008

    • Wal-Mart this morning reports that its first quarter net income was up 6.9 percent to $3.02 billion, on Q1 sales that were up 10 percent to $94.1 billion, and US same-store sales that were up 2.9 percent (excluding fuel sales).

    • Winn-Dixie Stores said that it had a Q3 profit of $15.02 million, down from $17.83 million during the same period a year ago. Third quarter sales were $1.7 billion, up 2.3 percent from a year earlier.

    KC's View:

    Published on: May 13, 2008

    • Walgreen Inc. has hired Wade D. Miquelon, Tyson Foods' executive vice president/CFO, to be its new senior vice president/CFO. He succeeds William Rudolphsen, who has been named to the new post of senior vice president and chief risk officer at Walgreen.
    KC's View:

    Published on: May 13, 2008

    …will return.
    KC's View: