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    Published on: December 4, 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.

    The newspapers and cable news shows have been reporting this week on the latest efforts by the Big Three American automobile manufacturers to get the federal government – which, in the end, really means the American taxpayer – to bail them out of their past misjudgments and management errors to the tune of billions of dollars.

    But let’s forget about whether this is a good idea or not. Essentially, that means looking backward. I’d rather look forward and to the future.

    In Northern California, three cities – San Francisco, Oakland and San Jose – are working with a Palo Alto company to create the infrastructure for electric vehicle charging stations that would be located all over the region.

    The plan would create 250,000 different charging stations by 2012. In addition, the plan would create a series of battery “switching stations” in appropriate areas, especially along freeways, where people with batteries nearing depletion could simply pull in, replace the old battery with a freshly charged one, and go on their way. The charging stations and switching stations would all accept credit and debit cards, and the whole thing would be about as self-service and user-friendly as possible. (San Francisco, it should be noted, already has some charging stations installed at some parking meters and lamp posts…so it is more a matter of ramping up and expanding existing technology than creating something entirely from scratch.)

    Now, automobile companies that include Nissan, BMW, Toyota and, yes, even General Motors, all are talking about having electric cars ready to hit the road in just a few years. But a major obstacle to their becoming popular would seem to be the lack of access to charging facilities and the time it takes to recharge batteries, which can be a hassle on extended trips. If the infrastructure is there, suddenly these aren’t obstacles anymore.

    What is this all going to cost? Well, according to the company developing the project, about a billion dollars.

    A billion dollars? Hell, that’s just a drop in the bucket compared to the money being asked for by the auto companies, which have yet to prove to a lot of people that they want to do anything other than shore up outmoded and near-obsolete policies linked to fuel oil ands traditional internal combustion engines. Policies that had them selling Hummers and oil-rich foreign countries getting wealthier by the hour.

    But that’s not really the point I want to make.

    These Northern California cities are looking to the future and putting into place an infrastructure that will put them in a great position when the future arrives.

    Sometimes in our businesses, we have to look to the future and place a bet on where we think things are going…and invest in the infrastructure necessary for us to be in the right place with the right technology at the right time. Otherwise, we run the risk of being both irrelevant and obsolete. It isn’t even a risk, in fact. It is a certainty.

    In the retailing business, that means looking at how customers are changing and evolving, and what kinds of priorities the next generation of consumers will have. No matter how much we’d like to pretend, it seems incredibly likely that our kids – raised on cell phones and iPods and text messaging and not remembering a world before Amazon.com - are not going to shop like us.

    Like those Northern California cities, retailers cannot afford to just respond to consumer demand, which is the standard excuse for lack of innovation. Sometimes, by developing services and technologies, one can actually create demand that is in line with what consumer priorities might be.

    Placing a bet is, by its very nature, a gamble. That isn’t always an easy thing to do, especially in these tough economic times. But gambling on the future, it seems to me, is a lot smarter than gambling on the past.

    For MorningNewsBeat Radio, I’m Kevin Coupe.

    KC's View:

    Published on: December 4, 2008

    Dow Jones reports that the family of Jdimytai Damour, the temporary Walmart employee who was trampled to death by a stampede of early morning Black Friday shoppers looking for a good deal on electronics, has filed a wrongful death lawsuit against Walmart, the owners of the shopping center where the event took place, and the security company working at the scene.

    No dollar figure is mentioned in the first reports of the filing.

    “The defendants and each of them engaged in specific marketing and advertising techniques to specifically attract a large crowd and create an environment of frenzy and mayhem and was otherwise careless, reckless and negligent," the lawsuit said.

    KC's View:
    This lawsuit, unfortunately, was inevitable.

    But it will be hard for anyone to argue that it is frivolous.

    The defendants in the case should do whatever they need to make it go away. Because while I’m not a lawyer, I cannot imagine they want this to get in front of a jury.

    Published on: December 4, 2008

    The Associated Press reports that Delhaize-owned Hannaford Bros. is engaged in a corporate restructuring designed to cut costs at the Maine-based company, and is offering voluntary severance packages to corporate employees as a first step.

    The company said that there will be no cuts in store, trucking and distribution personnel.

    KC's View:
    The new reality. There will be a lot of these stories in coming months.

    Better to get there early than late. If you don't do it on your own terms, you end up in front of the US Congress begging for a bailout.

    I’ve always said that Delhaize and its US companies have some of the best chain store leadership in the country…so it doesn’t surprise me that Hannaford is making moves before it finds itself in a corner.

    Published on: December 4, 2008

    A new survey of leading retailers has been released, saying that it pinpoints “key strategies and best practices” that will help retailers differentiate themselves in the current, highly competitive environment. The identified critical factors include:

    • “Focus on the shopper, not the product.” The focus here is to use advanced techniques that will “deliver targeted offers including email and website offers.”

    • Private Label. The report says that “while more retailers are focusing on private brand offerings in light of the current economic environment, over 75% of study participants don’t feel they are using concepts effectively as a differentiator.”

    • Effective use of price and space optimization tools. Two-thirds of those surveyed said price optimization is top-of-mind, though less than half of those who said so had experience in this area for three years or more. Only 50 percent of those surveyed said that they were utilizing space optimization tools, even as they were saying that they were important.

    • Don't try to be all things – quality, promotions, variety, service, price, etc… - to all people. Rather, it is best to focus on one or two things and achieve excellence in those areas.

    The survey was conducted by Karabus Management and Willard Bishop.

    Other related findings from the report:

    • “75% of retailers surveyed said they were over-SKU’d because they were attempting to meet the needs of everyone, rather than offering a focused assortment for their specific customer base.”

    • “Only 29% of leading retailers are using advanced promotional strategies based on customers’ wants and needs as opposed to relying on weekly ad and vendor driven promotions.”

    • “17% of leading retailers have formalized collaboration structures with suppliers that outline specific responsibilities and focus on mutual shopper wins with collaborative product development around customer needs.”

    KC's View:
    It is sort of interesting that the survey identifies priorities that even some of those “leading retailers” who participated say that they are not embracing, even if they know they should.

    It either says something about how hard it is to do business in the current environment, or something about how we define leadership in the modern grocery industry.

    Or maybe both.

    Published on: December 4, 2008

    Whole Foods is fighting back in the public relations war that started when it was revealed that it is using its ongoing battle with the Federal Trade Commission (FTC) as a way to try to gather information about a local competitor, nine-store New Seasons Markets.

    As has been reported, the FTC is attempting to unravel the acquisition of Wild Oats by Whole Foods, despite the fact that the $565 million deal closed more than a year ago. The FTC charges that the deal violates antitrust laws, and is pursuing the matter in the courts even though virtually every Wild Oats store has been converted to the Whole Foods banner.

    While Whole Foods has been fighting the FTC efforts, it also came to light this week that it was using the legal battle to subpoena marketing and financial information from New Seasons, saying that this data would allow it to construct a more effective defense. New Seasons has been fighting the subpoena.

    Yesterday, Whole Foods used Twitter.com to direct consumers to a blog on the NaturalSpeialtyFoodsMemo.com message board, on which a company spokesperson, Paige Brady, has responded:

    “The last year has been something of a nightmare for the administrative team members here who have been jumping through hoops to meet requests from the FTC. While our customers, our competitors’ customers, industry insiders and merger experts all seem to agree that customers have not been adversely affected by the Whole Foods Market/Wild Oats merger, the FTC continues to press their case forward.

    “While we would love to see this whole issue go away, we have no option but to defend ourselves against the FTC's ongoing effort. We know that New Seasons and many other fine natural foods stores are serving their customers well and that those customers, like ours, continue to have ample choices even after our merger with Wild Oats. Since the FTC insists that we have harmed these markets, we have to defend ourselves by showing that these markets are doing well. Part of our defense is based on gathering information from third parties through subpoenas, mostly from competing retailers but also from some vendors who supply Whole Foods Market.

    “We have not singled out New Seasons. Rather they are one of 96 companies (stores and vendors) that our outside legal counsel has subpoenaed. Why so many? The FTC has targeted Whole Foods Market in 29 different markets, and we must now defend against the claim that we do not face substantial competition from other supermarkets in all of these markets.

    “If we could defend ourselves without gathering information from competitors, we would. We don’t appreciate being put into this situation by the FTC. This is absolutely NOT an attempt to look into competitors’ information. In fact, no one inside Whole Foods Market will look at this information at all – only our outside counsel and their consultants are authorized to see the information gathered due to the FTC’s protective order. For those non-lawyers reading this, subpoenas and protective orders are a standard part of litigation practiced in virtually every antitrust case in the United States. The protective order prohibits any of this information from being shared with any Whole Foods Market team member, including in-house legal counsel. And while we understand that some of you will have trouble trusting the government system of protective orders, we give you our word that Whole Foods Market will not breach that trust.”

    And New Seasons CEO Brian Rohter has responded in his own blog, which expresses a certain skepticism about the Whole Foods position:

    “Just take a look at the history of Whole Foods actions. Last year, in the first round of this dispute, private information was subpoenaed from a bunch of grocery stores. All of those stores, including us, received the same promises of confidentiality – ‘only outside counsel will see these records, no employees of Whole Foods will ever see them, etc., etc.’

    “Then in the middle of that process, Whole Foods went to court to try to get all those same documents and files sent to their corporate headquarters in Austin, Texas so their in house counsel (the same one they’re talking about above that ‘will never see the private files’) could look through them. Whole Foods position was, even though this attorney was an employee of Whole Foods and was on their ‘Leadership Team’, it was okay for her to see everyone else’s private data because she wasn’t engaged in ‘competitive decision making’.”

    KC's View:
    Clearly, Whole Foods has an image problem. And I don't blame New Seasons for being skeptical.

    I can't imagine why Whole Foods needs this info from specific companies in 29 different markets. After all, aren’t there market research companies out there that specialize in compiling market share info that could help resolve the questions being raised by the FTC?

    Ultimately, this is all the FTC’s fault, and for what greater purpose? None that I can see.

    Published on: December 4, 2008

    • The Seattle Times reports that Internet research company comScore says that “online sales spiked 15 percent to $846 million on ‘Cyber Monday,’ which was named by the National Retail Federation in 2005 to describe the surge in online spending when customers returned to work after Thanksgiving and shopped from their desks.”

    KC's View:

    Published on: December 4, 2008

    The New York Times reports this morning that “the faltering economy could mean renewed interest in coupons as shoppers refocus on the cost of the products they buy — that is, if they do actually buy anything these days.

    “Coupons that offer cents off — or percents off — the price of things like groceries, clothing and restaurant meals are particularly popular when consumers need to stretch their dollars. So word that a recession began last December could bring an increase in the number of coupons offered by marketers, as well as redemption rates by consumers.”

    However, it isn’t just the old-fashioned coupon delivery systems that are driving the likely increase. The Times reports that “new technologies are also helping to renew interest in coupons, especially for younger consumers. There are scores of Web sites where coupons can be obtained by clicking rather than clipping; among them are coupons.com, couponcabin.com, couponcode.com, couponmom.com, 8coupons.com, fatwallet.com and shortcuts.com. Many also deliver coupons by e-mail messages. And coupons are increasingly available on cell phones and other mobile devices from companies like Cellfire and Outalot. Among the marketers offering mobile coupons are Arby’s, Caribou Coffee and GameStop.

    “An advantage of coupons delivered through new technologies is that they can be customized and personalized, which could help make them more effective and efficient for the sponsors.”

    KC's View:
    There seems to be little question that coupons will be enjoying a resurgence because of the current recession, but if they are going to remain relevant beyond that, they have to embrace the new technologies that make targeting possible. There’s no reason that dog people should get cat food coupons, Ever. Not in 2008.

    Published on: December 4, 2008

    • The Sacramento Business Journal reports that a new study says that Walmart’s big box supercenters in California “benefit communities by growing new tax revenue of both new Wal-Mart Supercenters and other retailers, and by spurring other retailers to open new stores.” The study may have trouble being accepted in some quarters, however…since it was commissioned and paid for by Walmart.

    KC's View:

    Published on: December 4, 2008

    The Washington Post this morning reports that one of the challenges facing President-elect Barack Obama is what to do with the US Department of Agriculture (USDA), which he pledged to overhaul during his campaign for the presidency.

    “In cash-strapped times, the challenges of mounting new initiatives are daunting,” the Post writes. “And the USDA is still battling long-running problems: subsidy programs that give huge sums to ineligible, millionaire farmers; a food inspection system that puts Americans at risk for food-borne illnesses; and nutrition programs that fail to identify more than 30 percent of Americans who live in poverty and are at risk of hunger every month.”

    KC's View:
    The Post does highlight one hoped-for priority for the Obama administration – “improving the department's food safety inspections. At present, the USDA and 14 other departments and agencies administer a patchwork of food safety laws that often overlap and do not always make public safety the first priority.”

    We can hope.

    Published on: December 4, 2008

    • Tesco’s US division, Fresh & Easy Neighborhood Markets, announced that it has opened its first two stores in Bakersfield, California, and identified four other locations it plans to open in the city. Three Fresh & Easy stores already had been announced for the Kern County region, which will give Tesco a fleet of nine there…though no dates were given for when all the units will be open.

    KC's View:

    Published on: December 4, 2008

    • Supervalu announced yesterday that its board of directors has voted to declassify itself. As a result of this action, the company said, “beginning with the 2009 Annual Meeting of Stockholders, directors will be elected annually for terms expiring at the next annual meeting of stockholders. Directors whose term expires at the 2010 Annual Meeting of Stockholders or the 2011 Annual Meeting of Stockholders will continue to hold office until the end of the term for which they were elected. From and after the 2011 Annual Meeting of Stockholders, all directors will stand for election annually.”

    “The board and management are committed to the highest standard of corporate governance at Supervalu,” said Jeff Noddle, the company’s chairman/CEO.

    USA Today reports on the 2008 America's Health Rankings study, which says that while “the nation's health improved by 18% from 1990 to 2000,” the past four years have not been so good, marked by “ballooning waistlines, addiction to tobacco and mounting rates of chronic diseases threaten the gains.”

    • The Wall Street Journal reports that “bankruptcy and turnaround experts expect early 2009 to bring a large number of bankruptcy filings by retailers, following what some retail analysts expect could be the weakest holiday season since 1980.

    “Already this year, retailers including Value City Department Stores, casual-apparel chain Steve & Barry's, Linens 'n Things and Circuit City have filed for bankruptcy protection and begun closing some or all of their stores.”

    The story also notes that “the most highly leveraged retailers with debt maturities in late 2008 or 2009 include Nordstrom Inc., Kroger Co., Macy's Inc., Target Corp. and Supervalu Inc., Citigroup analyst Deborah Weinswig said in a research note Friday.

    “Companies needing access to debt markets ‘will likely be at risk for higher rates, and could possibly risk the ability to access the credit markets given tighter credit conditions,’ Ms. Weinswig said. ‘However, based on our analysis, this is not a major concern for most broadlines/food & drug/home improvement retailers’.”
    KC's View:

    Published on: December 4, 2008

    • Walmart reported that its total company November sales were up 1.6 percent to $32.2 billion, from $31.7 billion during the same period a year ago. Walmart’s US sales were up 6.5 percent for the month to $21.5 billion, while its Sam’s Club sales were up 1.4 percent and international sales were down 11 percent.

    Without fuel, Walmart’s total US same-store sales were up 3.4 percent.

    • Village Super Market said that its first quarter net income was $6.4 million, up 48 percent from the same period a year ago. Q1 sales were $290.9 million, up 10.4 percent from the same period a year ago, on same-store sales that were up 4.2 percent.

    • Costco said that its November sales were off three percent to $5.55 billion, on same-store sales that were down two percent in the US and down 15 percent in the company’s international stores.

    KC's View:

    Published on: December 4, 2008

    • C-store chain The Pantry announced that Brad Williams, its vice president of field operations, has been promoted to be senior vice president of field operations.
    KC's View:

    Published on: December 4, 2008

    …will return.
    KC's View: