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    Published on: November 26, 2008

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    Hi, I’m Kevin Coupe, and this is MorningNewsBeat Radio, brought to you by Webstop, experts in the art of retail website design.

    As regular readers of MorningNewsBeat know, I am a complete devotee to all things Apple. I’m writing this on my Mac laptop, while listening to music on my iPod, having spent much of the day talking to people on my iPhone. And, tonight I may watch some television using my Apple TV system, which is connected wirelessly to my computers and iTunes via the Apple Airport that is connected to the Internet.

    In short, I’m pretty much living a Steve Jobs-branded existence.

    I mention this because the latest and perhaps even the most important innovation developed by Apple is something called the App Store – short for the Applications Store, which offers functions created by outside software developers and that can be used with the iPhone. The most recent number I saw said that there were 6,000 applications available…and that more than 250 million had been downloaded to this point.

    250 million. Wow. These range from games to software that can identify where you are and where the closest restaurants, movie theaters, gas stations and Starbucks happen to be. Some of the applications are free, and some cost a minimum fee. And even the ones that I’m not particularly interested in look pretty cool.

    There are a number of interesting issues at work here.

    One is that in some ways, Apple and its legendary leader, Steve Jobs, didn’t see this coming. There was, according to reports I’ve read, a fair amount of resistance to opening up the iPhone to outside software developers…and now, go figure, Apple may find that one of the iPhone’s chief appeals, among many, is the list of applications developed by outside companies.

    There’s a good business lesson here. Sometimes the coolest innovations come from left field and catch you by surprise. It is critical to be open to all sorts of possibilities, because the alternative is to risk stagnation.

    It isn’t just that the iPhone is a wonderful piece of technology, but it is functional in so many ways.

    But here’s the other thing that occurs to me. As magical as the iPhone may be, without all these interesting applications it is just a little hunk of glass and metal and wires. What makes it so cool isn’t what it is, but how it can be used.

    That’s another important lesson for retailers, I think. Think about the basic value of the products in their stores…and then think of the value that these stores might have if the retailers actually told shoppers how or why to use the products they are selling.

    In other words, value doesn’t come from a product’s existence…but rather from its relevance.

    That’s what Apple has done with the App Store…it has created, and keeps creating, ways in which the iPhone can be used in new and different and relevant ways.

    If food stores could do the same thing, especially at a time when cash-strapped and anxious shoppers are looking for answers and ideas, that could be the difference between an average retailer and an exceptional one.

    Speaking for a moment as a consumer, I’m almost always going to choose the exceptional retailer.

    For MorningNewsBeat Radio, I’m Kevin Coupe.

    KC's View:

    Published on: November 26, 2008

    The New York Times reports that traces of the toxic chemical melamine has been found in samples of US baby formula, raising questions about the safety of a product trusted by parents and given to infants. Melamine is the same toxic chemical that was found in Chinese infant formula and that has been blamed for three deaths and the sickening of more than 50,000 infants there.

    According to the story, melamine or a chemical relative have been detected by either federal or private inspectors in formula manufactured and sold by all three of the major US formula suppliers - Abbott Laboratories, Nestle and Mead Johnson.

    In China, it has been reported that the melamine was used deliberately in baby formula to artificially inflate the product’s protein levels. In the US, according to the Times it is being said that the melamine occurred during the manufacturing process, and was not put in the product intentionally.

    The US Food and Drug Administration (FDA) is responding to the revelations by saying that while there is no safe level of melamine exposure for infants, it would be a mistake for parents to stop giving formula to infants that need it for proper nutrition. FDA describes the levels of melamine as being at “trace” levels.

    The Associated Press story says that “melamine is used in some U.S. plastic food packaging and can rub off onto what we eat; it's also contained in a cleaning solution used on some food processing equipment and can leach into the products being prepared.”

    Both stories also note that to this point, no illnesses in the US have been attributed to the presence of melamine in baby formula.
    KC's View:
    Wasn’t it just a month or two ago that the FDA was saying that low levels of melamine exposure isn't necessarily harmful?

    In view of the fact that the Times reports this morning that the FDA starting testing US formulas for melamine back in September, that begins to look a little suspicious…like FDA was covering its rear end just in case.

    And since the US decided not to allow any Chinese dairy products to be sold in US because of melamine concerns, doesn’t it then follow that it ought to be moving more decisively in the case of US-made baby formula?

    It begins to look, as in so many cases, as if the FDA is more interested in protecting business than in protecting consumers. Which may sound good to industry, but really isn’t…because if consumer confidence and trust is undermined, that ultimately is bad for business.

    And the federal government isn’t doing itself any favors when Dr. Stephen Sundlof, director of the FDA's Center for Food Safety and Applied Nutrition, is quoted by the Times as saying that “the agency had never said, nor implied, that domestic infant formula was going to be entirely free of melamine” and that “he didn't know if the agency's statements on infant formula had been misinterpreted.”

    Give us a break.

    Published on: November 26, 2008

    The Washington Post this morning reports that “fueled by rising unemployment and food prices, the number of Americans on food stamps is poised to exceed 30 million for the first time this month, surpassing the historic high set in 2005 after Hurricane Katrina … Breaking the symbolically important 30 million mark comes on the heels of government data showing that 11.9 million people went hungry in the United States at some point last year. That included nearly 700,000 children, up more than 50 percent from the year before.”

    The Post also writes that “for low-income families, who spend a higher percentage of their monthly budget on food,” increased food prices have been particularly painful and have created greater financial pressures that food stamps have been hard-pressed to alleviate. “Food stamp benefits are adjusted for inflation only once a year, and as of September, the maximum benefit fell $64 a month short of the cost of the thriftiest, USDA-established, diet for a family of four. The annual adjustment in October of 8.5 percent largely brought the benefit in line with food costs again, but the Center on Budget and Policy Priorities, a nonpartisan policy group, estimates that if current inflation persists, by December benefits will again fail to match the cost of the thrifty food plan.”

    KC's View:
    In view of this last paragraph, would it be impolitic to ask whether some of these people are going to get the kind of bailout that might actually matter?

    Published on: November 26, 2008

    The Dallas Morning News reports that 7-Eleven “is expanding its private-label products as more consumers seek out store brands to save money.” The nation’s largest convenience store retailer said that it is “developing 180 private-label grocery items that are 10 percent to 20 percent cheaper than national brands,” and that will be marketed under the 7-Select name.
    KC's View:
    Chalk this us as yet more evidence that private label products may be taking up a higher position in US consumer consciousness than ever before.

    Published on: November 26, 2008

    • The Washington Post reports that Blockbuster has begun marketing a new system that will allow customers to use “a small box that connects to television sets and stores video after it's downloaded over high-speed Internet connections.” The system marks a foray into on-demand video services that the Post notes “may give consumers another reason to bypass the struggling video chain's 7,500 stores,” thought the company says that it believes that its brick-and-mortar stores will “remain relevant” for some time to come.
    KC's View:
    I know that I annoy some people when I say this, but I continue to believe that retailers making a big investment in brick-and-mortar DVD departments for their stores are actually investing in soon-to-be obsolete technologies. Maybe not today, maybe not tomorrow…but soon, and probably sooner than you think.

    Published on: November 26, 2008

    • Dollar Tree Stores said that third quarter profit was up 20 percent to $43.1 million, from $35.9 million a year earlier. Sales for the third quarter rose almost 12 percent to $1.11 billion, with same-store sales that were up 6.2 percent.

    • United Natural Foods reported that its Q1 net income dropped 2.3 percent to $13.2 million, from $13.6 million during the same period a year ago, affected by the wholesaler’s acquisition of specialty foods company Millbrook.. Q1 sales rose to $864.2 million from $736.4 million.

    • Hormel Foods Corp. said that its Q4 net income was down 33 percent, to $67.8 million, from $101.2 million a year earlier. Q4 revenue rose to $1.86 billion from $1.66 billion a year ago.

    KC's View:

    Published on: November 26, 2008

    There has been some discussion of pricing on MNB over the past few days, with jousting back and forth about who is responsible – retailers or manufacturers.

    Yesterday, there was an MNB user who maintained that “the largest single component of retail price is usually the retailer gross margin, not the food itself.”

    Which led to outrage from another MNB user:

    I have to wonder what the writer was smoking when he/she wrote that line? In order for the largest single component of price to be the retailer's gross margin, we'd have to have margins in excess of 50%? Get real, this is the food business.

    MNB user Blair Thomen wrote:

    Is there anyone out there that does not want to blame the retailer? Now I see why our country is in this financial mess and recession. GREED!!!

    For the record, I never blamed retailers.

    MNB user Randy Bailey wrote:

    One thing not mentioned here is that the much of the food on sale now was grown while all of these input prices were at the apex. I am a grower and have just gotten a price increase from one of our largest customers suffering all through the summer eating these expenses. I think in time these prices will begin to go down but many should understand that the industry got caught in the curve when costs were soaring and need to recover when they go down.

    I pointed out yesterday that “the manufacturer is not necessarily the bad guy,” and that these issues are hardly simple.

    Which led another MNB user to write:

    I wish all American consumers read your MNB each morning. Today in particular.

    These comments regarding pricing might encourage people to consider that "business" is not the bad guy - after all, some of us have jobs because of businesses taking risks and staying in business. This is why I am against unions, who from my vantage point simply cause goods and services to cost more to the end user, with little benefit to the supposed "beneficiary". This is also why I am skeptical of taxing business owners who make over - the dollar amount kept changing, but it started at $250K and as little as $125K was mentioned.





    MNB had a story yesterday about adulterated vs. non-adulterated food, and I concluded that the guiding principle ought to be “pleasure is important.”

    Which led MNB user Richard Lowe to argue:

    BUT NOT ALL THE TIME! Then we will not know it is pleasure. And is that not the attitude of most obesity? Food for Pleasure!

    Wrong!

    Food for pleasure is not the root of obesity. Food as obsession, however, is.

    And while I recognize that life can't be all pleasure all the time, I think the pursuit of pleasure can be a noble one.

    (Pleasure can come in a lot of forms. Hard work with tangible results, for example, can be a source of enormous pleasure. We’re not just talking hedonism here…though a little bit of hedonism isn’t necessarily a bad thing. ‘The wrong thing is the right thing, until you lose control,” as a famous poet and troubadour once sang…)

    But food? Food should always be pleasure.




    On the subject of legislation that could ban or limit the advertising of fast food to children as a way of addressing the obesity crisis, one MNB user wrote:

    Let’s get real. It’s going to take responsible parents to raise healthy responsible children.

    • Food, whatever the source, super market, fast food, or other food service, is packed with harmful chemicals as well as neurotoxins such as artificial coloring, artificial flavoring, HFCS and MSG.
    • Exercise, actual not WII generated, needs to be part of the parents’ and childrens’ day.
    • Socialization, i.e., face to face, contact with other people to become socially responsible, rather than hours upon hours of false socialization on the Internet. (Internet is good within limits)
    • Parental help with self concept and self awareness – whether through environmental spiritualism or natural spiritualism

    Eliminating ads for fast food may or may not need to be done, but the items above do need to be priority #1 for all parents…even if it means sacrificing their personal time.





    MNB user David Carlson had some thoughts about Michael Sansolo’s Tuesday column about why “Seinfeld” remains relevant to viewers and soap operas are in trouble.

    Michael - I think you've missed the key point in your article and it's a point KC continually harps on (in a good way).

    “Seinfeld” isn't reaching a new generation of viewing because of its marketing efforts, it's reaching them because it's still relevant. The marketing follows the trend, it rarely creates the trend - but that's another topic.

    "Reaching out to them in new ways" even with "new energy and unusual marketing" without first making yourself relevant with the right products, services and formats won't get you loyal customers among the younger generation.

    Supermarkets have to figure out how to make themselves relevant to younger shoppers - then market themselves more creatively.


    To which Michael responds:

    I agree it's absolutely relevant because of the nature of the show. But the marketing effort gives the new generation a reason to check out a show that stopped production so long ago. The parallel is simple: you need both a good message and a good product. “Seinfeld” has both.




    Last week, in my MNB Radio rant, I spoke about a variety of products that, it seemed to me, were virtually irrelevant to young consumers. I included among them paper calendars, wristwatches, phone books, CDs, and soon, DVDs and maybe even paper books and magazines. It isn’t that young people won’t want to know what day it is, what time it is, or won’t need phone numbers, music, news and literature…just that there will be new technologies delivering them.

    There were a couple of lines that apparently annoyed some folks:

    A note here to any parents, grandparents, aunts or uncles thinking of buying calendars for…well, anyone under the age of 65. Don't do it, unless the person being given the gift is Amish. Do it, and you immediately label yourself an old fogey.

    So next time you check your watch to see what time it is, consult a calendar hanging on the wall to see if you have any plans, and then look in the Yellow Pages to order a pizza that you can eat while watching a DVD, keep one thing in mind. You are standing on the precipice of obsolescence.

    Careful. Don’t fall.


    MNB user Steven Ritchey wrote:

    Every year for Christmas, one of the things I get from my girlfriend is a calendar of some sort. AND I USE IT. So, enough with the blanket observation about what people do and don’t use. Of course I know it was probably meant in jest. But, still one of the biggest mistakes made in our business is the thought process that because I don’t use it, others don’t either.

    Another MNB user wrote:

    Just a quick note to let you know that I look forward to receiving a pretty calendar for the wall each year. Usually it’s photos of France (holy cow, now what do I do? I LIVE here!), but it’s sometimes a photo calendar of favorite pics from last year’s vacation, or pictures of Monet paintings.

    It hangs in the kitchen, the nerve center of my house, where we can all check and add to it on a daily basis. When I’m fixing dinner or stumbling through the kitchen bleary-eyed in the morning, it’s always on, and never crashes, and waiting your turn to use it is far shorter than waiting for someone to level up their character in the latest MMORPG.

    At the end of the year, it’s a great outline from which to write the dreaded Christmas letter, then it’s put away like a shorthand scrapbook of what we did that year.

    I wear a wristwatch, and I watch DVDs. I read a paper newspaper for years, until I moved to a place where reading the newspaper means sitting with my dictionary by my side, as I’m a long way from fluent, and struggling to translate all the details of the stories (I get the bigger points – I’m not completely illiterate in my new language!) just doesn’t mix that well with hanging out at the kitchen table with a cup of coffee.

    But yet I know what MMORPG means, and I read MNB – and I’m younger than you. Don’t throw us all out as geezers just because we like to use the old-school stuff.


    MNB user Deborah Rekedal wrote:

    I have to disagree 100% with your opinion on paper calendars. I think you might get a few e-mails from people disagreeing with your thoughts that they are only for the Amish or old fogeys, I am neither! Over 1/2 our office as responded "yes" to my e-mail asking if they needed a 2009 calendar! Personally I am a spatial thinker and when I want to know when something is "happening" I like to see the whole month on a piece of paper in front of me. I like to see the previous month and the next month too! I am not saying I am not a slave to my Outlook calendar and Blackberry, I use them too, I just like to have a full sized calendar hanging at my desk and one in the home office, and can't forget the magnetic one for the fridge...I guess I make up for the calendars The Content Family doesn't buy!

    Another MNB user wrote:

    One way we’ve still been using paper calendars around the holidays, and incorporating technology as well, is downloading a bunch of our family pictures to a website that lets us build our own calendar , with everyone’s birthday’s and anniversaries included, to send as gifts to aunt’s, uncles and grandparents. Of course to your point of their being outdated, the grandparents love them, while the aunt’s and uncle’s give an appreciative, complimentary response, with a touch of “Thanks, that’s cute, what else you got” vibe (you’ve got to love the holidays).

    No offense, but methinks you are all missing my point.

    I’m not talking about us. I’m talking about our kids.

    My daughter is a ninth grade and goes to a school where the first thing every student does each morning is open up and turn on his or her laptop and download announcements, messages, calendar changes, homework assignments, test schedules, etc…

    Go figure. It is an efficient way of communicating information, and actually leaves the teachers time to actually teach.

    That’s not to say that paper calendars will completely vanish. They’ll be around, used by older people and a quaint reminder of times gone by.

    My point is a simple one – that we need to recognize the changes taking place around us and figure out ways for our businesses to embrace them…or risk irrelevance.

    I was taken to task above, with an MNB user saying, “enough with the blanket observation about what people do and don’t use. Of course I know it was probably meant in jest. But, still one of the biggest mistakes made in our business is the thought process that because I don’t use it, others don’t either.”

    First of all, I’m trying to be light-hearted about the points I am making…but I’m not kidding. I’m deadly serious about the broader point.

    Second, as I pointed out in the original piece, I use a wristwatch, CDs and DVDs. I would argue that one of the biggest mistakes made in either business (or government or culture, for that matter) is to assume that because things are a certain way, they always will be that way.

    (It may even be a fair point to suggest that the CEOs of the big three US automobile companies are guilty of this sin. See where it has gotten them – in front of Congressional committees, begging for money, and the subjects of deserved public ridicule.)

    To this point, MNB user W. Patrick McSweeney wrote:

    Does this mean I should also hang up my buggy whip?

    Yes. Unless you are Amish.

    KC's View:

    Published on: November 26, 2008

    Just a few quick notes for an abbreviated Wednesday OffBeat

    In case you haven't noticed, shoppers’ nerve endings seem to be more exposed than usual these days. The seemingly unending parade of bad economic news and the fragility of previously relied-upon institutions is enough to put anyone on edge. The odd timing – sort of between Presidencies, and right before the holiday season – has only added to the general distress.

    Which is why, I guess, most people reacted so viscerally to the news last week that the three big automobile industry CEOs flew on separate private jets to Washington, DC, to ask for government bailout money…and did so without a real action plan for how to use the money if they got it. (Which they didn’t.)

    It is why people are so angry about companies and executives that seem to be completely tone-deaf to the reality of their situations. Even if it is true that letting some of these companies go belly-up would have an enormously negative impact on the US and global economy, these companies and their leaders should not take taxpayer largesse for granted. On the contrary, they should be eternally grateful if we let them keep their jobs, even at reduced salaries. They are living on our dime, and in case they haven't noticed it, we can't really afford it.

    I may be wrong about this, because I haven’t listed or watched every one of the hearings, nor have I read every story about the appeals for help. But it seems to me that I have yet to hear any executive utter the following word: ‘Please.”

    I also haven't heard any executives with bailed-out companies say “thank you.”

    Not only are they apparently terrible managers and leaders, but they evidently also don't have any manners.

    This week, the antipathy is being created by Citibank, which now has to be bailed out by…us. We should always think of it that way. It isn’t the US that is bailing out all these companies. It is us. And that is a lot more than a semantic difference.

    I am a lifelong New York Mets fan, but I have to say that I believe that the critics are absolutely right when they say that Citibank should not be paying $20 million a year - over a 20-year contract that will end up costing the company $400 million – for naming rights to the new Mets stadium, which is to be called Citi Field.

    I understand that contracts have been signed, and that there may be no legal way out. But I also believe that it is incumbent on Citibank to seek every possible option that could allow it to get out of the contract.

    And short of that, the stadium ought to be renamed: Taxpayer Field.

    Because that is who is footing the bill.

    Us.




    I know it doesn’t come out until next spring, but I have to say that the new trailer for “Star Trek” looks incredibly exciting. It is, in case you didn’t know, a re-boot of the franchise, with new actors playing James T. Kirk, Spock and the rest of the Enterprise crew in their younger years.

    Check out the trailer online, and tell me it doesn’t give you a chill. But make sure you check out the latest version, which features a few brief moments in which Leonard Nimoy – the original Spock – appears as the character in old age (it is a time ravel tale) and utters the famous line, “Live long, and prosper.”

    Goosebumps. Serious goosebumps.




    Did you watch “24: Redemption” last Sunday? I did, and found myself instantly immersed in the new adventures of counter-terrorist agent Jack Bauer, on the run from the US government in Africa. In the space of the two-hour movie – a prequel to the series’ seventh season, which begins in January – Bauer found himself fighting against an African military coup, trying to save a group of war orphans, being tortured, and unknowingly being set up for what almost certainly is going to be a battle against a shadow US government with nefarious plans.

    Can't wait until January.




    I had an amazing wine over the weekend – the 2005 Captain’s Reserve Cabernet Sauvignon from Francis Ford Coppola’s Rubicon Estate. Just extraordinary…smooth and rich and thick on the palate.

    It may not go with turkey, but it would get my nomination for the perfect Thanksgiving wine. Then again, I’m having Cajun-style blackened steak for my holiday dinner.

    It may not be traditional. But it is going to taste great.

    KC's View:

    Published on: November 26, 2008

    Tomorrow, 27 November, is the national holiday that we celebrate as Thanksgiving here in the US…and it also is the beginning of a four-day weekend that officially launches the end-of-year holiday season.

    We’ll be off for the next four days, enjoying some time with Mrs. Content Guy and the kids…and MNB will return next Monday, 1 December.

    Have a great weekend.

    Sláinte!!

    KC's View: