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    Published on: September 3, 2008

    by Michael Sansolo

    Forget Michael Phelps and Usain Bolt. Sure, they dominated the headlines from the recently concluded Olympics. But when it comes to business lessons, the two keys to remember are fingernails and beer bellies.

    Fingernails are a tribute to Dara Torres, the amazing American swimmer who at age 41 came within one one-hundredth of a second of winning a gold medal. Asked about it after the race, Torres gave the quote of the Olympics. Essentially, she said, “I shouldn’t have filed my nails last night.”

    It’s a metaphor we should all remember when we think of the importance of the smallest detail. Torres trained harder than most of us could probably imagine. Lord knows how she balanced motherhood with swimming, but she did. And she came in second by a fraction of time none of us can imagine and couldn’t measure with a stop watch if we tried. Which is why she talked about that shortened fingernail.

    I’d love to see companies put up posters of Torres and start “fingernail” awards to remind associates of the importance of every last bit of effort. Winning a silver medal is great at the Olympics, but in business it is all about the gold. And that means finding every edge, down to the fingernail.

    Beer bellies are a less obvious Olympian effort. Although I love sports, I don’t always enjoy the entire experience. One of my least favorite parts of a live event is the “wave” and other organized crowd activities. However, I’m always amazed at how a handful of guys who’ve had a little too much to drink can get a crowd of 50,000 or more organized into a wave with some yelling, cajoling and a lot of effort.

    I mention this because I had the amazing good fortune to attend part of the Olympics in China. And for the most part, I was blown away.

    China is a country of ironies and contradictions. I get chuckle thinking about how annoyed the ancient emperors must be as their Forbidden City is visited by thousands of commoners. Likewise, there’s great irony in Chairman Mao’s portrait peering down at his Nike-wearing, IPod-listening people. (Not to mention that Col. Sanders’ picture outside KFCs in Beijing is equal in size to Mao’s.)

    China has its issues. The most populous communist country on earth is exploding with capitalism. Rich and poor, ancient and new are side by side everywhere. And Americans (in fact all westerners) better take notice. China’s technology, wealth and drive were displayed in many ways beyond the country’s emergence as a sports power. It was apparent in the architecture, in the roadways and in every other impressive part of the city.

    In fact, it was more than a little stunning to leave Beijing’s brand new, technology advanced airport to return to Dulles Airport outside Washington. A visitor from China would be stunned at the step backward.

    Of course, the power is backed by a totalitarian regime and the problems, such as air and water pollution, are more obvious than the horizon on most days. But the bottom line is that China is a country exploding into modern times, which creates tremendous implications for the future of energy, food, water and business resources. Looking at the incredible number of construction cranes around the city, one retailer with me on the trip said he now understood why the cost for steel has shot up. China is using it.

    But that brings us back to the beer bellies and the wave. At the Olympic closing ceremonies, a team of Emcees supported by an army of volunteers around the stadium did their best to get the crowd into a wave. There effort was robust and organized and, of course, a failure. In the US, three guys with big guts and voices would have never accepted such a weak showing.

    We’ve got more than big guts going for us. We have creativity, entrepreneurship and individual drive. We have people who can make great things happen with their voices, their drive and their effort.

    And we had better not forget it because the competition is getting better all the time for our companies and our country. We don’t need slogans, we need action.

    Remember, every last fingernail matters.

    Michael Sansolo can be reached via email at .

    KC's View:

    Published on: September 3, 2008

    In a new report, TNS Retail Forward suggests that the increased cost of food and gasoline is having a broad series of impacts on US shopping patterns that, in the broadest sense, is causing people to change the stores they visit, the frequency of their shopping trips, and the products they choose.

    Among the specific revelations:

    • Seventy-five percent of people are planning errands to minimize the distance traveled.

    • Fifty-eight percent are saying that they are going to stores where they can do one-stop shopping, with 55 percent saying they are choosing stores closer to work and/or home.

    • Twenty-six percent of shoppers are turning to retailers other than where they usually shop to offset high gasoline prices. They are shopping more at discount and value formats and less at upscale and specialty retailers. In contrast, patrons of upscale and specialty formats report shopping them less often to get better deals elsewhere.

    • Twenty-six percent of consumers say they are choosing to do more online shopping as a way of saving their own fuel expenses.

    • Eight percent of consumers are saying that they are using public transportation instead of driving (a number that may be this low because of the lack of choices available in many communities).

    KC's View:
    Chains need to be having meetings, department by department, to identify new and innovative approaches that will help them deal with these shifts. There will be a lot of debate about whether they are permanent or temporary…and where you fall on this debate will depend on how you feel about the economy. Are these trends, or are we seeing some sort of profound transformation?

    I’d vote for the latter. Which means that businesses have to think about transformation, too.

    Published on: September 3, 2008

    The Wall Street Journal reports that one of the casualties of the rising costs of food is likely to be people’s efforts to eat healthier food – since such products are, by their very nature, more expensive than less healthy foods. This won’t just impact people who are eating healthier by choice, but also people who are dealing with specific medical conditions.

    According to the Journal story, “Relief from the rising cost of food isn't expected anytime soon. Food prices increased 4% in 2007 and are expected to be up an additional 5% to 6% this year, according to the Department of Agriculture. The food crisis has sparked riots around the world and stretched pocketbooks at home, but it is for some as much a health concern as an economic problem. Since healthier foods, like whole wheat bread and fresh fruits, are already more expensive than white bread and processed foods, the increases are acutely felt by people trying to fight serious illnesses.”

    In part, the impact really is being felt by organizations that deal with these people, and the Journal notes that “food inflation is forcing many of these groups to scale back their ambitions or reassess how they operate.”

    KC's View:
    I don't mean to sound callous here, and I would concede that I’m lucky enough not to be dealing with these sorts of issues. But the Journal story talks about one woman who, faced with reduced resources, slips into old habits and begins eating greasy 99-cent sausage sandwiches rather than the healthy food that will help her deal with a specific medical condition. And I cannot help but wonder if there also is an education gap here in addition to a nutrition gap – because when you are sick and your life literally spends on what you put in your mouth, there have to be choices other than greasy sausage sandwiches.

    Interestingly, the New York Times had a story about how some parents are concerned about how the rising cost of food will impact the lunches eaten by their children – both the ones sent from home and the ones served by schools. The general feeling seems to be that increased costs are likely to result in decreased nutrition.

    Once again, I have to ask the question. Is fresh fruit really more expensive than a bag of chips? Whole grain brad doesn’t have to be artisanal…if you look hard enough, there are other choices.

    This all can be a great opportunity for retailers, it seems to me, if they want to confront the challenge and really, really educate their shoppers about the choices available to them.

    Published on: September 3, 2008

    The New York Times reports that Gristedes has been found guilty in a federal court of breaking the law by not paying overtime to lower-level managers in its stores.

    According to the Times story, “As a result of the decision by Judge Paul A. Crotty of Federal District Court in Manhattan on Thursday, lawyers for more than 400 current and former Gristedes managers predicted that the company would be forced to pay the plaintiffs $25 million.

    “Granting the workers summary judgment, Judge Crotty ruled that the supermarkets’ department heads and so-called co-managers were hourly employees who were entitled to overtime pay. He rejected Gristedes' arguments that they were salaried executive workers who, under federal and state law, are generally exempt from receiving time and-a-half pay for overtime.”

    Gristedes reportedly plans to appeal.

    KC's View:

    Published on: September 3, 2008

    It was noted on MNB yesterday that Walmart has reached a settlement with its former vice chairman, Thomas Coughlin, who has been convicted of wire fraud and tax evasion. Because Coughlin’s illegal activities took place during his employment at Walmart, the company sought to void his multi-million dollar retirement package, an effort that Coughlin sought to derail.

    While MNB wrote that terms of the settlement were not disclosed, an MNB user wrote in to point out that in an SEC filing, the company reported that the settlement had reduced Coughlin’s original $17 million retirement package to about $6.75 million.

    KC's View:
    That may be half of the original package, but it still help to assuage the pain of indictment, conviction and the awful experience of home confinement that Coughlin is enduring.

    I keep thinking of Coughlin at home, wading into his swimming pool while wearing his bathrobe and feeding ducks that have come there to roost.

    Published on: September 3, 2008

    The Irish Times this morning adds some details to a story taken note of yesterday on MNB - that Select Retail Holdings (SRH), which three years ago acquired the legendary Irish retailer Superquinn from its founder, Feargal Quinn, has been fielding inquiries that could result in it selling off the chain.

    Among the companies looking to buy Superquinn, the Times writes, are Irish wholesale groups Musgrave, BWG, and UK supermarket chains Asda and J Sainsbury.

    Tesco, which already has 26 percent of the Irish retail market, is said not to be interested.

    According to the story, “At least two approaches have been received for the supermarket in the past week and informed sources haven't ruled out the possibility of a seventh expression of interest emerging in the coming days … The process is being handled for Select Retail Holdings by Goldman Sachs in London, which has provided a limited amount of financial information to interested parties … Select Retail Holdings received an approach in March from Sainsbury, according to sources. The process gained momentum in the past couple of months when an unsolicited offer was received from Asda, owned by American retail giant Wal-Mart.

    “Rumours of Asda's interest in expanding its business into the Republic have circulated for years. Recent speculation suggested that it was looking at locations in Border areas and had acquired a site in Sligo. The company already has a chain of shops in Northern Ireland.”

    SRH chairman Simon Burke maintains that the company is not for sale, and that all of the offers are unsolicited. However, the Times reports that SRH will consider all serious offers.

    KC's View:
    I still think this is going to happen. It is just a matter of when and how much.

    Published on: September 3, 2008

    • Walmart announced this morning that it is opening a new Asia regional headquarters in Hong Kong, which will oversee the retailer’s businesses in China, Japan and India, as well as look for new opportunities in Asia.

    KC's View:

    Published on: September 3, 2008

    • Sara Lee has sold its foodservice sauce and dressings business to Richelieu Foods. Terms of the deal were not disclosed.

    • The Coca-Cola Co. reportedly has submitted a $2.5 billion bid to acquire China Huiyuan Juice Group, a major Chinese juice manufacturer.
    KC's View:

    Published on: September 3, 2008

    • Costco Wholesale said that its August sales were up 12 percent to $5.41 billion from $4.84 billion in the year-ago period, on same-store sales that were up nine percent.

    KC's View:

    Published on: September 3, 2008

    Got a number of emails yesterday about our story concerning the US Court of Appeals for the District of Columbia Circuit ruling that the US Department of Agriculture (USDA) is within its legal rights to prohibit meatpackers from conducting their own tests for mad cow disease.

    The case stemmed from an effort by Kansas-based Creekstone Farms Premium Beef to test all of its cows and then advertise the fact that these animals had been determined to be free of bovine spongiform encephalopathy (BSE). Larger meatpackers opposed the Creekstone program, saying that it would force them to also perform the expensive testing.

    MNB user Jerome R. Schindler wrote:

    This was a 2-1 decision and centered on interpretation of the Virus-Serum Toxic Act.

    One way this could be resolved is if our spineless incompetent worthless Congress would amend the law to tell the court whether the language of this Act was meant to ban this testing. That would save both this company and the U.S. Government many thousands of dollars in legal fees.

    Congress does this all the time. Remember the federal long distance tax issue? The law said the tax applied to calls billed based on time and distance. The IRS said that meant "time or distance". Millions were spent on litigation and on the administrative costs of issuing refunds after the court held it meant "time AND distance". In the meantime Congress sat on its hands when it could have passed a law clarifying what it meant. There certainly would have been a better use for the millions of tax dollars spent on litigation and administrative costs.

    Did I mention that I think our Congress is spineless, incompetent and worthless?

    Got it.

    Another MNB user wrote:

    Why in the world would I trust private testing paid for by the folks who want to sell their beef?

    I understand the issue here is that smaller meat packers want to differentiate their product and I actually find it quite amusing that in this case it's the big guys who are complaining about cost given how many times small farmers/producers have been saddled with disproportionately high costs to comply with regulations, but I wonder if there isn't an upside to this - if the USDA doesn't want to allow private testing, then perhaps it's an opportunity for the call to be made for the USDA to toughen up its own testing.

    One MNB user wrote:

    This is exactly why I choose not to eat meat! In my opinion, it is all one big fat money making government conspiracy. There is no way that I am going to trust any government official that tells me what products are safe for me to feed my family. Don’t even get me started on the whole rBGH thing.

    And to add fuel to the fire, I just finished reading the book “Skinny Bitch” (very easy and quick read). I highly recommend this book to everyone (even the men) because is had quite a bit of useful information on how messed up our government is when it comes to managing the things that we put in our mouth. What a complete mess!

    I can't even imagine what carrying a book by that title around would do to my tough guy image.

    Another MNB user wrote:

    The saddest part of the inspection issue is that most of the public will never know about this court decision because it will not be reported in the major outlets. However, there is an answer – Don’t eat meat!

    MNB user John Tatum wrote:

    I can see how the court would uphold the USDA’s right to adjust the labeling on any marketed product including any statements that the additional testing provided any benefit. But, I cannot see how the USDA can stop a company from performing the testing on its products. Does this mean that the government can restrict testing on private products or that ‘beef’ is not a private commodity?

    There is no question in my mind that Creekstone can justify the expense of private testing by using the results to differentiate its products.

    It also seems to me that when private testing takes place, it should adhere to objective and high standards.

    But neither of these two statements make me think that Creekstone, or any other supplier, ought to be prohibited from private testing and then from publicizing the results.

    On another subject…. MNB yesterday noted that Russia has decided to bar 19 US poultry producers from exporting their products to that country, saying that the companies were not meeting Russian food safety standards.

    While the Russian government says that the decision has nothing to do with increased tensions between Russia and the US over the recent war in Georgia, US experts were not entirely sure that this was the case.

    I commented: Call me crazy, but when Russia starts questioning US food safety procedures I have to think that something is wrong in the space-time continuum.

    To which one MNB user responded:

    Suggest you read up on our chicken processing facilities sometime. .. And Russia is not a third world nation in its technology and standards by the way. We seem to have competed with them on occasion on some very high tech matters if I recall. While there is some good possibility that they cut off our chicken for political reasons, kinda disappointed in your reactionary ugly American response. We are not so innocent and they are not so backward as you make out.

    I’m not sure I was being reactionary. My intention was to point out the irony. But your point is taken.

    KC's View: