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    Published on: November 21, 2008

    Interesting piece in the New York Times about how people are trying to be frugal in their shopping habits, but with mixed results.

    “All around the country,” the Times writes, “perfectly sound brains have been seizing up like an old car on a frigid day, particularly in the last few weeks. As Americans attempt to perform cost-benefit analyses of their needs and behaviors, they are whittling pennies from cable bills only to squander dollars on gas driving miles to discount stores, or on coupon-spurred splurges for nonessential items, like Cheez Whiz or organizing supplies. Pinched by shriveled retirement and college accounts, battered by ballooning mortgage costs, rent and co-op maintenance increases, and hedging against the possibility that a job might vanish, some are practicing economies that may not deserve the name.”

    It is a matter of both mathematics and priorities, as many customers find themselves in the position of having to make unfamiliar choices for themselves and their families.

    KC's View:
    Growing up in a family as the oldest of seven kids, with a father who was a schoolteacher, the whole idea of frugality was drummed into our heads …and we used to make fun of our dad, who used to buy powdered milk and mix it with the real stuff so he could make it last longer for less money. He used to get paid on the first of the month, so we could always tell the last week of the month because that’s when we would have things like French toast, pancakes, and big bowls of spaghetti (canned sauce, no meatballs) for supper. (The first night of the new month was almost always steak.)

    Y’know something? That was just fine. It was a pretty great childhood.

    Supermarkets can serve a real role in this process, helping people today figure out how to make intelligent choices…maybe spreading out the “pain” over the month…learning new habits that can save money as well as being tasty and nutritious.

    Tell you something else. I served French toast for dinner the other night.

    My daughter, though she’s dubious, will survive. Maybe even be better for it.

    Published on: November 21, 2008

    Advertising Age reports that the National Bureau of Economic Research has conducted a new study, funded by the National Institutes of Health, suggesting that “a ban on fast-food advertising to children would cut the national obesity rate by as much as 18 percent.”

    According to the story, “The study measured the number of fast-food ads kids watched and found a fast-food TV-ad ban for children's programming would reduce the number of overweight children aged 3 to 11 by 18%, and for adolescents (12- to 18-year-olds) by 14%. Data also revealed a more pronounced effect on males than females.”

    The Centers for Disease Control and Prevention (CDC) says that about a third of American children are overweight or obese, and the new study says that fast food commercials account for almost a quarter of all the food related ads that kids see on television.

    "We have known for some time that childhood obesity has gripped our culture, but little empirical research has been done that identifies television advertising as a possible cause," Shin-Yi Chou of Lehigh University, one of the study's authors, said in a statement. "Hopefully, this line of research can lead to a serious discussion about the type of policies that can curb America's obesity epidemic."

    By the way, it probably isn’t a coincidence that the Washington Post reports that “McDonald's thinks it has a positive case to make and has recruited mothers to go behind the scenes of the company's operations, meet senior executives and then communicate what they see via the Web, along with appearing in video of their travels … The message takes on heightened importance now, as strapped parents bargain in their heads over whether a McDonald's meal can take the place of higher-priced options.”
    KC's View:
    There will probably be a call for legislation that will control the amount of advertising that fast food companies can use to target children…though maybe not in the immediate future, since one hopes that Congress has a few more important things on its collective minds at the moment.

    While I am sympathetic to the cause, I wonder if we could also craft legislation that would force parents to actually be parents, not contestants in popularity contents with their kids as judges. After all, if parents exert some control over what their kids eat, maybe we wouldn’t have to worry about television commercials.

    Then again, it is easier to ban the ads.

    One other quick thought. Kids spend less time watching television today than they do surfing the Internet, and I suspect that the online time will only grow in the future. So while banning television fast food advertising to kids may have a short-term impact, it could quickly end up being irrelevant legislation.

    Which will put parents back in the hot seat. They’ll probably respond by asking for legislation controlling the web.

    Published on: November 21, 2008

    USA Today reports this morning that the Chinese government has announced a complete overhaul of its dairy industry, responding to food safety scandals that have left it with an enormous black eye and shaken consumer confidence in the industry.

    The overhaul will encompass everything from cow breeding to milk sales, with the government issuing new quality and safety standards.

    The story notes that “milk and milk products tainted with melamine, an industrial chemical, have been blamed in the deaths of at least three infants and have sickened more than 50,000 others. The Health Ministry said Thursday 1,041 babies across the country were still hospitalized with kidney damage … The dairy scandal highlighted the widespread practice of adding melamine, often used in manufacturing plastics, to watered-down milk to fool protein tests. Investigations also discovered it was being added to animal feed after finding melamine-spiked eggs.

    “Melamine poses little danger in small amounts, but larger doses can cause kidney stones and renal failure.”

    KC's View:
    Good luck with that.

    I feel like I’ve seen this story before, but maybe the previous stories were about baby steps and this actually amounts to a significant move in the right direction.

    But it’ll be years, at best, before confidence in Chinese dairy products is restored. And one wonders what other safety landmines will be found down the line.

    Published on: November 21, 2008

    Ad Week reports on a new Nielsen Online study saying that when American buy gifts online during the upcoming holiday season, 76 percent of them will do so because they like the convenience of Internet shopping – compared to 53 percent who say price is their prime motivation for online shopping.

    In addition, the story says, “Survey results indicate that holiday gift budgets are shifting online. Respondents said that they would spend an increased percentage of their holiday shopping budget online, an average of 41 percent compared to 39 percent last year. And more respondents indicated that they would spend the majority of their holiday gift budgets online, up to 36 percent from 32 percent a year ago.”

    KC's View:
    Of course, the total gift budgets that people are spending may be smaller…but I’m not surprised that online is growing because of convenience factors. I’ve been doing it for that specific reason for years…

    Published on: November 21, 2008

    The Washington Post reports that the National Organic Standards Board has approved new standards that “would allow organic fish farmers to use wild fish as part of their feed mix provided it did not exceed 25 percent of the total and did not come from forage species, such as menhaden, that have declined sharply as the demand for farmed fish has skyrocketed.” The move, according to the Post, “pleased aquaculture producers even as it angered environmentalists and consumer advocates.”

    The standards still need to be approved by the US Department of Agriculture (USDA).

    “Environmentalists and consumer advocates blasted the recommendations,” the Post writes. “Activists questioned why up to 25 percent of fish feed could be made up of non-organic material, while all other animals certified as organic must eat 100 percent organic feed. They also noted that open-net pens can harm the environment by allowing fish waste and disease to pollute the ocean.”

    KC's View:

    Published on: November 21, 2008

    The Denver Post reports that Nash Finch’s Avanza Supermarkets have been sued by customers who claim that “the company misled them and other consumers by charging at checkout 10 percent more than its advertised prices.”

    This debate has been ongoing for more than a month. At the Avanza store, Nash-Finch advertises item prices, which is also displayed on the shelves, but adds 10 percent to the basket total at checkout. There are signs posted in the store that explain the program, and the 10 percent surcharge is clearly indicated on register receipts, suggesting that this actually lowers prices for shoppers, but local media reports say that at least some customers are complaining that they have been deceived.

    And now, there is the inevitable lawsuit, which Nash Finch says is misguided.

    KC's View:

    Published on: November 21, 2008

    • The Chicago Tribune contributes to the ongoing positive coverage being given to the private label business, reporting this morning that “store brands have come a long way, and they're paying off for grocers. Once simply cheap copycats, store brands are looking and functioning more like name-brand products, food industry analysts say. And they're becoming more important to conventional grocery chains as a tool to help battle tough competition from both discounters and health-oriented stores such as Whole Foods.

    Forbes reports that PepsiCo wants to build its soft drink sales by getting shoppers to become “engaged” with its brands, helping the company to “determine new flavors and other aspects of the brand.” The company’s goal is said to be to “bring out more innovation, reduce artificial ingredients by using more natural sweeteners and tap into the trend of consumers being more experimental.”

    • Call it Black Thursday. Kmart announced that most of its US stores will be open on Thanksgiving Day from 7 am to 9 pm, giving shoppers a 24-hour head start on the traditional Black Friday sales that start off the end-of-year holiday season.

    KC's View:

    Published on: November 21, 2008

    • C-store chain The Pantry said that its fourth quarter profit was up 24.5 percent to $22.9 million, from $5.6 million during the same period a year ago. Q4 revenue rose to $2.51 billion from $2.02 billion a year ago.

    The Pantry’s annual earnings were $31.8 million, from $26.7 million a year ago. Annual revenue was up 30 percent to $9 billion.

    KC's View:

    Published on: November 21, 2008

    ...will return.
    KC's View:

    Published on: November 21, 2008

    In Thursday Night Football, the Pittsburgh Steelers defeated the Cincinnati Bengals 27-10.
    KC's View:

    Published on: November 21, 2008

    The challenge of being relevant to the next generation of consumers is an ongoing theme here on MNB, so it was refreshing to read in the Wall Street Journal this week that Google and Procter & Gamble have actually been trading employees in an effort to get people in each company to think differently.

    According to the story, “So far, about two-dozen staffers from the two companies have spent weeks dipping into each other's staff training programs and sitting in on meetings where business plans get hammered out. The initiative has drawn little notice.

    “Previously, neither company had granted this kind of access to outsiders. Closer ties are crucial to both sides. P&G, the biggest advertising spender in the world, is waking up to the reality that the next generation of laundry-detergent, toilet-paper and skin-cream buyers now spends more time online than watching TV. Google craves a bigger slice of P&G's $8.7 billion annual ad pie as its own revenue growth slows.”

    The process has been revelatory. “As the two companies started working together, the gulf between them quickly became apparent,” the Journal writes. “In April, when actress Salma Hayek unveiled an ambitious promotion for P&G's Pampers brand, the Google team was stunned to learn that Pampers hadn't invited any ‘motherhood’ bloggers -- women who run popular Web sites about child-rearing -- to attend the press conference … For their part, P&G employees gasped in surprise during a Tide brand meeting when a Google job-swapper apparently didn't realize that Tide's signature orange-colored packaging is a key part of the brand's image.”

    In other words, things that each side took for granted within the cocoon of their own business ended up being not that obvious or important to people with a different vantage point.

    This is an invaluable lesson for P&G, Google…and all of us.

    All of our businesses should have gigantic signs that say, “Comfort zones forbidden.” The only way we make progress is when we get outside our traditional boundaries, try something different, take a risk. The downside may be greater, but the potential upside could be enormous.

    Which actually brings me to this week’s movie review, which I can use to illustrate the point of business risk.

    The new James Bond movie opened here in the US last weekend, two weeks after it began rolling out elsewhere around the globe. To say it is a success is an understatement – the first weekend in the US, “Quantum of Solace” generated close to $70 million in ticket sales, the biggest opening ever for a Bond film. To this point, it has made well over $350 million…a success by almost any measure.

    And yet, it is fair to say that many critics were underwhelmed by the movie, which is the shortest (106 minutes) Bond movie ever made, not to mention the only direct sequel to a previous Bond movie (“Casino Royale,” another gigantic hit, which “rebooted” the series in 2006 by showing us the young James Bond).

    Much of the criticism seemed aimed at the fact that few if any of the traditional Bond moments are in the movie. Daniel Craig, back for this second go-round as 007, is a taciturn “blunt instrument” in the service of the British government, while mourning the loss of the woman he loved (Eva Green’s alluring Vesper Lynd in “Casino Royale”) and seeking revenge. He doesn’t have Sean Connery’s deadly irony, George Lazenby’s kilt, Roger Moore’s safari suits, Timothy Dalton’s Shakespearean intensity, or Pierce Brosnan’s invisible car. There is no “Q,” no Miss Moneypenny. And the hero doesn’t even say, “My name is Bond. James Bond.”

    Big risk.

    Which to me is exactly the point, and why “Quantum of Solace” is so appealing to modern audiences. The plot has a specific through-line, going from point A to point B with maximum efficiency and speed. True, they could have dallied on some typical Bond moments, but that actually would has distracted from what the producers and director Marc Forster were trying to do – build a Bond for the 21st century. Was this a risk? Sure. Audiences might have rebelled, and the producers would have had a very expensive flop on their hands. But they seemed to know that staying stagnant was not an option – and let’s face it, that is exactly what they did from ”Diamonds Are Forever” through “A View To A Kill,” and only on tentatively moved away from the formula in the movies that followed until “Casino Royale.” (“Die Another Day” is a perfect example – the first 45 minutes are terrific, and then it devolves into just another megalomaniac wants to take over the world flick, and Bond foils him with an invisible Aston Martin. Though it does have Halle Berry in a bikini, which is actually the movie’s best special effect.)

    Now, I have fond memories of Connery (“From Russia With Love” has always been my favorite Bond movie), Moore (who could not like at least parts of “The Spy Who Loved Me”?), Lazenby (“On Her Majesty’s Secret Service” is actually one of the best movies in the series), Dalton and Brosnan (I always through their performances were better than the movies in which they existed). But Daniel Craig’s Bond actually may be my favorite, since he seems like a character who actually is affected by his own deeds and the circumstances in which he finds himself. He bleeds, he mourns, he even shows some moral indignation…and yet he exists within movies that are, at their essence, roller coaster rides.

    I’ll tell you something else about the new Bond movie. Mrs. Content Guy liked it a lot, even more than she liked “Casino Royale” – and I don't she ever liked a Bond movie before. So they are reaching out to a new audience without disenfranchising the old audience. And least, not all of the old audience. The appeal was strong enough to put the movie on course to making at least $500 million in ticket sales worldwide.

    Big reward.

    “Quantum of Solace” in some ways feels like the middle movie of a trilogy, much in the same way “Star Wars: The Empire Strikes Back” did. “Casino Royale” introduced us to James Bond as a young and largely unformed agent, and showed some of the ways in which he evolves, and “Quantum of Solace” shows him running an emotional and physical gauntlet as his development continues. I have no idea what the next Bond movie will be like, but I suspect we may see a little more of the old joie de vivre, though with a harder, more cynical edge.

    I’m just fine with that. I loved “Quantum of Solace,” and at some point will line up to see it again. And I suspect that no matter what the critics say, a lot of Bond fans feel the same way.

    Gotten some requests from MNB users for suggestions about wines for Thanksgiving. My general feeling is that if you are going to eat turkey – I’m not – a good pinot noir is almost always the best choice. If you are going to have beef – I am – my choice would be a cabernet or a zinfandel.

    Then again, I also think that one of the best things to do on a holiday is to just have a wine that you love.

    Here are three wines I’ve recently enjoyed…and would be thrilled to have on my dining room table next Thursday:

    • 2006 Concannon Limited Release Zinfandel from California, which is wonderfully smooth.
    • 2005 Francis Coppola Reserve Pinot Noir from California’s Sonoma Coast – fantastic!
    • 2004 Mosaic Chardonnay, which is a great balance of citrus and oak…lovely.

    I want to thank the dozens of you who send congratulatory notes this week on the occasion of MNB’s 7th birthday. I always tell people who question how I maintain my sanity working by myself that I get more positive reinforcement than any person has a right to. I may be sitting at the laptop alone, but I’m hardly by myself.

    One other thing. Thanks to those of you who remembered – based on previous years’ columns – that yesterday was Mrs. Content Guy’s birthday. (I can’t tell you the year because her tolerance for my mischief only goes so far…)

    The person really responsible for getting MNB out each day is her, because she puts up with my schedule, my jokes, and even my propensity for airing family business before the MNB audience.

    I think it means she must love me. Because if she didn’t…

    Have a great weekend. I’ll see you Monday.


    KC's View:

    Published on: November 21, 2008

    In a surprise move this morning, Walmart announced that CEO Lee Scott will step down as the company’s president/CEO as of February 1, 2009, to be succeeded by Mike Duke, the company’s current top international executive.

    Scott reportedly will continue as chairman of the board of directors’ executive committee.

    Eduardo Castro-Wright, who runs Walmart’s US operations, has been named vice chairman of the corporation.

    According to MarketWatch, Duke “is taking the helm at a time when Wal-Mart's low-price message has clicked with shoppers facing myriad economic concerns and when global expansion has become a more crucial complement to growth in a mature U.S. market. The appointment was surprising, however, as Wall Street had previously expected Castro-Wright to succeed Scott instead.

    “Duke has led the company's logistics division, U.S. and international operations, according to a company statement.”

    Rob Walton, chairman of the board, said in a prepared statement: “We are confident that the strategy we have in place is the right one for future success and Mike has been actively involved in developing and executing this strategy.”

    KC's View: