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    Published on: August 5, 2008

    by Michael Sansolo

    No matter where you stand politically, you have to agree that John McCain represents the end of an era. No, I don’t mean his policies, his war record or his age. Rather, it’s a skill that McCain lacks that I would bet no future presidential candidate will ever be without again.

    John McCain, by his own admission, is a foreigner in the land of cyber-space. In fact, he’s just now learning to use a computer. Honestly, it’s a missing skill that surprised me. Both my parents are older then Sen. McCain and both have not only mastered their computer, but feel it necessary to send me more e-mail alerts and jokes than I really need.

    But when it comes to Sen. McCain and his lack of tech skills the question is: does it really matter? I’d argue that the sudden attention being given this issue means the campaign has now moved past silly and into stupid season. While I believe computer skills are essential today, I’m not really sure this is the make or break issue for a President. All discussions about how this somehow makes the Senator detached are silliness provided he understands how computers impact our daily lives. Beyond that, I’d rather he be in touch with more serious issues than learning to sell items on E-Bay.

    Then again, I don’t know why Senator McCain or any other leader would want to be without computer skills if they have the means to learn them. The opportunities are just too great. Just as FDR used the radio to forge a connection with Americans in the 1930s and Ronald Reagan used television a half-century later, future presidents will harness and use the Internet to connect with the American population. The notion of a future President blogging his or her thoughts to the public is not a matter of if, but when. Already we are seeing the impact of the Internet as a source of fund-raising and YouTube as a source of spreading a message, much as cable television and talk radio reshaped the political debate in the past 20 years.

    No doubt, business leaders will be (or are already) doing the same, if they don’t leap frog the current technology and take to sharing corporate visions on Facebook.com the way so many students and young adults currently share opinions on the entire universe.

    Yet, I still meet too many of us “grown-ups” who are far too limited in computer skills to understand the potential that lies in all these strange cyber-lands. We use Plaxo and LinkedIn accounts, but the information we share doesn’t compare with what the average teen-ager or college student posts on Facebook.

    And that means we are missing opportunities.

    Consumers are experienced with websites like Amazon.com, where shoppers’ likes and dislikes are remembered and purchasing suggestions are made based on that history. Imagine the power we can unleash by getting our people out front, talking to shoppers both in store and on line. We could build excitement, interest and maybe some sales. We could help form networks where recipes and health tips could be shared.

    We could communicate broad goals with workers in ways we’ve never experienced before and we could gather feedback faster and in greater volume than ever. In short, we could open up a whole new world of discussion and dialogue and the potential to grow from it is incredible.

    It is all about opportunity and the future. The next move is ours.

    One more thing…Kevin wrote yesterday about the passing of one of my heroes, the great writer Aleksandr Solzhenitsyn, who had the courage to document the horrors of the penal system in the old Soviet Union. It’s been more than 30 years since I first read “A Day in the Life of Ivan Denisovich,” a novel of a Soviet prisoner, but I have never forgotten it. If you haven’t read it, go the library and get it. Telling the truth isn’t easy, especially when a gun is pointed at your head. Mr. Solzhenitsyn never flinched and it’s a fitting tribute that his books outlived the country he wrote them about.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .
    KC's View:

    Published on: August 5, 2008

    The Washington Post reports on a new report by the Center for Science in the Public Interest saying that virtually every combination of children’s meals sold by fast feeders such as Kentucky Fried Chicken, Taco Bell, Sonic, Jack in the Box, and Chick-fil-A are too high in calories, and that “eating out now accounts for a third of children's daily caloric intake, twice the amount consumed away from home 30 years ago.” And, the report said that “45 percent of children's meals exceed recommendations for saturated and trans fat, which can raise blood cholesterol levels and increase the risk of heart disease, and 86 percent of children's meals are high in sodium.”

    In other words, a nutritional disaster.

    Examples cited: “Burger King has a ‘Big Kids’ meal with a double cheeseburger, fries, and chocolate milk at 910 calories, and Sonic has a ‘Wacky Pack’ with 830 calories worth of grilled cheese, fries, and a slushie.”

    According to the story, “The report looked into the nutritional quality of kids' meals at 13 major restaurant chains. The center found 93 percent of 1,474 possible choices at the 13 chains exceed 430 calories - an amount that is one-third of what the National Institute of Medicine recommends that children ages 4 through 8 should consume in a day.”

    The report recommends, among other things, that restaurants not just offer healthier choices – as opposed to choices that they just say are healthier – but also provide more specific and complete nutritional information on menu boards.

    The National Restaurant Association (NRA) responded to the report by saying that “the trend in the industry was to provide ‘more detailed nutritional information and choice in menu options for consumers’,” according to the Post story. “But the group stressed that ‘exercising parental responsibility is key to childhood nutrition.’ The report, it said, ‘fails to acknowledge the essential role of nutrition education, physical activity and parental responsibility in childhood nutrition - good eating habits and healthy living must be established in the home’.”

    KC's View:
    Of course it is ultimately parents’ responsibility. Nobody argues with that. But that ignores the fact that so many of these chains spend gazillions of dollars marketing their products to kids, offering them prizes and enticing them with clown mascots and the like, in some ways undermining parents in every possible way.

    (I always wonder how the parents who work as executives putting out “Wacky Pack” meals and the like feed their own children. Are they more responsible parents than they are executives? And how do they manage to turn off their parental concerns when they go to work in the morning. Just curious.)

    (One other parenthetical thought. Is it any wonder that a group of pediatricians recently recommended early childhood cholesterol screening , and even the use of statin drugs where appropriate?)

    But let’s put the ethical and health issues aside for the moment.

    Supermarkets, which by their very nature offer a broader array of healthy choices, ought to be using reports like these as selling tools. They ought to post the new stories about these reports in the appropriate store departments, using the information to help people realize why healthy eating is important.

    Of course, it isn’t enough to demonize the fast feeders. You also have to offer real and appetizing options and alternatives.

    Published on: August 5, 2008

    The Oregonian reports that US food companies will spend $2.5 billion next year complying with the government’s newest country-of-origin food label rules, according to figures released by the US Department of Agriculture (USDA).

    “The department's assessment offers some hints of how much more consumers might pay,” the paper writes. “For instance, retailers' implementation costs are pegged at 7 cents a pound for beef and 4 cents a pound for pork. The average individual U.S. producer will shoulder initial costs of $376 and the average U.S. retailer will face initial costs of $26,149, according to the latest estimate … More than 1.2 million U.S. business ‘establishments’ will be ‘either directly or indirectly affected’ by the new labeling requirements, the department estimates.”

    KC's View:
    I suspect that at least in the beginning, the costs will be high and the immediate benefits will be anything but overwhelming.

    On the other hard, for context, it is worth pointing out that the tomato industry just took a $100 million bath when it was incorrectly blamed for the recent salmonella outbreak that sickened more than 1,200 people in 47 states. And while the government currently is blaming the jalapeno pepper industry for the salmonella problem, will anyone be surprised if next week the feds say “never mind,” and blame somebody or something else?

    Published on: August 5, 2008

    MarketWatch reports that California’s Stater Bros. Supermarkets will run a promotion this month that will award select shoppers $200 gas cards, being promoted as “free gas for a month.”

    According to the story, “Every Stater Bros. customer who purchases a minimum of $50 in eligible products will receive an entry form. Customers will receive additional entry forms for every $25 purchased over the initial $50 during the same transaction, and customers can receive up to five entry forms per transaction.” One customer per day will win at each of Stater’s 165 stores between August 6 and August 26.

    KC's View:
    It is a sign that I’m getting old that when I read this story, the first thing that occurred to me that I can remember when $200 would have paid for more than six months of gas in my old ’72 Triumph Spitfire.

    Oy.

    Published on: August 5, 2008

    Starbucks, looking to generate more traffic, sales and profit in its US stores, will begin offering customers any iced grande beverage for $2 after 2 pm, which in some cases will be as much as a 50 percent discount from the usual cost.

    There’s just one catch. To get the discount on the afternoon purchase, the customer has to have a receipt for a full-priced beverage bought the same morning from a Starbucks.

    The promotion is a national rollout of one that was tested, apparently with success, Seattle, Chicago and Miami.

    "I think we've kind of hit the nail on the head," said Brad Stevens, Starbucks’ vice-president of customer relationship management. "It's easy for baristas to implement and it's easy for customers to understand."

    KC's View:
    Not a bad idea…though I would make one suggestion to Starbucks. Since it has spent so much time and money promoting its Starbucks cards, couldn’t it have set up the promotion so that people wouldn’t have to save the little paper receipt, but rather could simply use the card, which would keep track of when purchases are made?

    This would make it easier for the customer, and would be more environmentally friendly since all this paper wouldn’t be generated.

    Just a thought.

    The fact that Starbucks didn’t use this linkage adds to the suspicion that the company continues to think tactically rather than strategically.

    Published on: August 5, 2008

    USA Today has a story this morning about a new and alarming trend – the use of “skimming” devices that allow bad guys to steal people’s credit and debit card data.

    According to the story, “The skimming devices can be installed outside or inside the pump. Thieves glue a plastic sleeve, equipped with covered wires that capture data, over the pump's card reader or connect the device directly to the reader inside. The devices are molded and painted to match the machine and are small, making them hard to detect.”

    The US Secret Service, which investigates such crimes, won’t go so far as to call the trend an epidemic. But the trend is growing and has gotten the attention of law enforcement.

    KC's View:
    So now there are two sets of thieves to deal with when you’re pumping gas. The guys trying to steal your credit and debit card data, and the oil company executives who are reaping record profits on the backs of US citizens.

    Hardly seems like a fair fight.

    Published on: August 5, 2008

    The Arizona Daily Star reports that Bashas’ has concluded a long-term deal with MediMin Inc. that will result in medical clinics being installed in some of the retailer’s stores operated under the Bashas', Food City and Ike's Marketplace banners.

    The story notes that “MediMin clinics are staffed with certified nurse practitioners and physician assistants with physician oversight.”

    KC's View:
    It may take a while, but the day could be coming when in-store medical clinics are as ubiquitous in food stores as pharmacies. And more so that video rental counters, which are well on their way to being obsolete even though a lot of retailers still have them.

    Published on: August 5, 2008

    The Washington Business Journal reports that Balducci’s, the legendary gourmet grocery company that operates stores in New York and Washington, will open its first location outside the US - in the new Mall of Dubai in the United Arab Emirates.

    According to the story, the unit will be one of several opened by Balducci’s in the UAE and elsewhere in the Middle East. The expansion venture is being financed in partnership with Nakheel Retail, the Business Journal writes.

    KC's View:

    Published on: August 5, 2008

    Business First of Columbus reports that Kroger has begun negotiations with the United Food and Commercial Workers (UFCW) on a new contract that would cover some 10,000 employees at 87 stores in the Columbus region. The old contract does not expire until November 9, but both sides have begun talking now in the hope of having a deal completed by the end of August, thus avoiding any labor strife.

    • The Wm. J. Wrigley Jr. Co. has set September 25 as the date on which its shareholders are scheduled to vote on a proposed sale of the company to Mars Inc. for $23 billion.

    US and European regulators already have cleared the way for the deal, which is being partially financed by investment guru Warren Buffett.

    • The Chicago Tribune reports that Walgreen Co. is expanding its Prescription Savings Club so that it offers consumers more than 400 generic products in 90-day supplies for $12, or less than $1 per week.

    According to the story, “The list of covered generics includes treatments for asthma, high blood pressure, cholesterol and diabetes. Walgreens' Prescription Savings Club, launched last fall, also offers savings on more than 5,000 brand-name and generic medications.”

    • Phoenix-based Sprouts Farmers Market has announced a new “BYOB” program. Customers will receive five cents off their total bill for each plastic grocery bag that a customer brings back into the store for use in a single transaction. In addition to the rebate on reused plastic, Sprouts continues its sale of the “Sprouts Green” canvas bag.

    KC's View:

    Published on: August 5, 2008

    Warren McCain, the longtime CEO of Albertsons Inc. from 1976 to 1991, and who built the chain from one with $900 million in annual sales and $9 million in profits to one with $8 billion in sales and $200 million in profits, died over the weekend at age 82.

    Joe Albertson, the founder of the company, once famously said about McCain: “"I built some grocery stores, and I got rich. And then I hired a man named Warren McCain to run them, and I got filthy rich."

    KC's View:

    Published on: August 5, 2008

    More comments from the MNB community about the so-called Employee Free Choice Act, which opponents say would give unions an unfair advantage as they look to organize companies not currently unionized.

    MNB user Jerome R. Schindler wrote:

    The issue I see with doing away with the secret ballot is that peer pressure and intimidation is effective in getting many people to "sign" that card. It is obvious why union organizers are so afraid of the same method we use to elect our president, the secret ballot, because that is how people can truly express their preference. Let's even the playing field - let employers have the right to get the employees to sign a "no union" card. I'll bet the unions would fight that tooth and nail.

    You'd think that union certification and decertification could play by the same rules.

    Another MNB user expressed a common skepticism about management:

    Maybe employees would fell better if the executives and directors were paid a more proportionate wage and benefit package? There is definitely a lot of discrimination. They put the pants and skirts on just like everybody else. There is plenty to go around if they were not first in line!

    And another MNB user chimed in:

    First of all, one of your readers was commenting on the "so called 'freedom of choice' act," I know it is semantics, but the correct bill name is "Employee Free Choice Act," which then leads me to think that perhaps they have not really read the bill or researched it. I tried to research it based on that name and the "Freedom of Choice Act" is in regards to abortion not union organizing. That being said, (#2) I agree with you, Kevin, based solely upon my readings of your column, which is primarily presented from the Wal-Mart position, that the Democrats would not typically support this, nor would I. They typically support individual rights and would not support "non" secret ballots. So I rest here now, while I download the summaries of the "Employee Free Choice Act" and maybe hope to report later. Typically reading these acts from the Library of Congress, drives me to drinking ( a fine Malbec from Argentina would be nice!).

    Not a domestic wine?

    I’m a little concerned, by the way, that you think that I am writing “primarily from the Walmart position." Not sure that the folks in Bentonville would feel that way. And for the record, I’m a lot more concerned about the three-store or ten-store independent that is doing its absolute best for its employees, and suddenly must face unionization threats that could put them out of business.




    MNB had a piece yesterday about the increase in private label sales in the US, which led MNB user Todd Sinclair to write:

    Good comments re: private label..... In reality, you don't need to look further than Canada to see the value of strong private labels that are as preferred as national brands. High quality, large category shares and even the "invention" of new segments have been the hallmark of the Loblaw Companies "President's Choice" for a very long time.

    True.

    And MNB user Ken Wagar wrote:

    To me the most interesting thing about your remarks today regarding Private Label were the three places you indicate you shop for groceries: Costco, Trader Joe’s and Stew Leonard’s. No traditional supermarket of any kind mentioned.

    Whether intentional of not, it seems to me there is a message there for the traditional retailers of the US.

    I wish I had your choices, No Stew Leonard’s or Trader Joe’s in Central Florida and the nearest Costco is 50 miles away.


    I often make that point when I speak...that I am able to satisfy almost all of my grocery needs through non-traditional retailers. (I forgot to mention Amazon.com, which increasingly has become a retailer of choice for bulk items.)

    So if the local Shaw’s and Stop & Shop are mediocre, I have choices.




    Commenting on a story that talked about supermarket chains lowering their prices and creating new promotions to create customer loyalty, I wrote yesterday:

    These indeed are “the latest tactics grocery stores are using to compete for customer loyalty.” That’s the problem. Because I don't think that anything close to customer loyalty comes out of such tactics.

    What comes out of low prices – whether on food or fuel – during a recessionary economy is a decision on where to shop that day. Not loyalty. Not by a long shot. At least not most of the time.

    This isn’t to minimize the importance of value at this time. Far from it. Demonstrating an understanding of the plight in which many shoppers find themselves, and an ability to be relevant to these shoppers, is critically important.

    But this doesn’t necessarily create loyalty…because almost every retailer is looking to make the same argument. Some weeks you’ll win, some weeks the other guy will win, and the margin may be pennies.


    One MNB user responded:

    You are absolutely right with your comments about tactics and loyalty. Assuming you are managing a brand and not a commodity, as a company, the constant challenge is to get our customers up the loyalty ladder – from awareness to active consideration to preference to purchase to satisfaction and finally to loyalty. All of our customers are on different rungs at different times. How you get any customer up the ladder is what branding is all about. Tactics, strategy and marketing play a part and are all subsets of the branding model. We both know it is not this simple…but this is the basic concept. Always remember, a satisfied customer is not a loyal customer…only a loyal customer is a loyal customer.

    Another MNB user wrote:

    I think the days of loyalty have been over for the majority of consumers for a while. Wal-Mart is benefiting from high gas prices et al. However, prior to the current downturn it looked like Wal-Mart was losing customers. There are certainly a few niche marketers that do not need to draw customers with tricks like loyalty cards, pennies on gas etc., or stores in areas where there are no choices. It seems to me that most folks want the best prices on the items that they buy. If they want the cheapest price in my area, with little service help, they shop at Winco or Wal-Mart. If they want service along with somewhat higher prices, they go to Fred Meyer (Kroger) and if they want high prices and no lines, they go to Albertson’s. If they want the best organic and health food selections they go to the co-op and pay higher prices. A few shop at all of them – the cherry pickers. The rich shop wherever they want, the poor shop where they have to, and the rest shop for best price to value and that fluctuates. I would guess that the majority of us still shop at the store that is closest to them, particularly so at this point in time –“gas cost”. Those stores need only be “close” on price. Loyalty, for most of us, went out with pension plans and job security.

    And another MNB user seemed equally skeptical:

    There IS no customer loyalty today. Shopping is controlled by where the customer feels that they will get the best buy. They will go to one store for their sales and often go to another store for their sales in the same day! I know because I do price comparisons at competitive stores and often see the same customers in both stores the same day.

    MNB user Kurt Burmeister agreed with my assessment of the situation:

    It’s your “dead-on” opinions like this that keeps me reading every morning.

    Thanks. You have no idea how much comments like yours mean to me. They are what keep me writing every morning!




    Finally, we had an enormous number of people who wrote in over the fast few days to wax rhapsodic about Five Guys Burgers, a chain that I only discovered last week.

    It ends up that my 14-year-old daughter was very familiar with them, and she gave me that old “what planet have you been living on” look when I mentioned my new discovery. And then another MNB user wrote in to tell me about a new Five Guys that opened in Brookfield, Connecticut…within about a half-mile of where my mother-in-law lives, as it happens. (Talk about an ethical dilemma…next time I’m in that neighborhood I’m going to have to make some serious choices.)

    But there’s always one naysayer in the bunch…as MNB user David Livingston wrote:

    Not impressed. They opened in the Milwaukee area. Small hamburger, greasy, and they used a supermarket quality bun. They charged a premium burger price for diner quality hamburger. Won't go back.

    Why am I not surprised?

    KC's View: