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    Published on: December 16, 2008

    by Michael Sansolo

    Since this is the time of year when pundits of all kinds make all sorts of lists, I figure this is a good time for me to make a list of things that puzzle, delight or irritate me. Or, more accurately, a list of questions.

    Let’s start with Illinois Governor Rod Blagojevich. Honestly, I’ve had it with all the reprehensible characters in the news lately. I’m tired of people running companies and huge parts of our economy into the ground due to greed or ignorance. Which brings me to question number one:

    Have we finally reached the bottom of the barrel with this guy?

    We have to start figuring out who or what we can actually blame for all the woes we are facing right now. It is so easy to point the finger at leaders of the financial industry or automotive giants for all they did and did not do. Likewise, it’s easy to blame the government overseers who clearly missed everything. But, maybe it also is time to look in the mirror…

    A chart in the New York Times recently made this clear. It showed the incredible rise in credit card debt in this country and how, a few years back, the average American starting spending more money each year than they were making. Now while I’m ticked that banks were distributing credit cards like Halloween candy and that the banking system went berserk as it made terrible loans, we also have to blame people for borrowing and spending stupidly. Everyone wants to live a wonderful lifestyle, but living within our means should matter. My mother used to say that two wrongs never make a right, which leads me to question number two:

    How many wrongs it will take to finally make people do things right?

    Not all the news is bad however, which brings me to an issue closer to the food industry – the power of creative marketing and merchandising. This was brought to mind by the California Raisin Board getting honored recently for having the world’s biggest dancing raisin. Now that may not be the greatest promotion ever, but if you recall, dancing raisins changed the entire look of that category. And it prompts question number three:

    Why aren’t there other more fun, creative promotions out there?

    Let me start out my next point by asking question number four:

    What happens when conventional wisdom is proven wrong? Do we change or ignore the facts? (Okay, technically that’s two questions.)

    Here’s the issue that concerns me. Everyone knows that 20 percent of the buying public---the heavy users—make up 80 percent of sales. It’s called the 80/20 rule … and it ends up that the 80/20 rule is wrong.

    Catalina Marketing has an incredibly cool web tool where you can track the real percentage of the population producing 80 percent of sales and it exposes the old myth. There are products, in fact, where less than 1 percent of the population makes up 80 percent of the sales.

    Now clearly the 80/20 principle has been done in by line extensions and product proliferation, but the bottom line is that it has changed. More than ever, what is on the shelf really better get thought out carefully or you might be vastly under serving the key market or vastly over-serving a group that doesn’t care and won’t buy.

    My last point really needs to be addressed by the scientists of the world, who seem to have no sense of pity. (I heard about this from the wonderful Stephen Colbert, whose show, “The Colbert Report,” combines with “The Daily Show” for the best hour of television anywhere. And it’s amazing how many people now get their news from these guys.)

    It’s hard to imagine a bleaker year than 2008. Virtually everything has gone wrong, especially for fans of the New York Mets. Now we find out that the world’s scientists will add one second to the year to keep the world’s atomic clocks in synch with the slightly slowed rotation of the planet.

    That means 2008, which also included a Feb. 29th, will be the longest year ever. How wonderful. So here’s my fifth and final question:

    Couldn’t you guys have added the second to a better year?

    (Just think what Gov. Blagojevich did with that extra second…)

    Michael Sansolo can be reached via email at .
    KC's View:

    Published on: December 16, 2008

    Marketing Daily reports that – the pure play e-grocery business based in New York City – has developed a new ratings system for fresh produce designed to make it easier for shoppers doing their ordering online.

    According to the story, FreshDirect is introducing a five-star rating system “based on a daily inspection of all produce in stock by a quality assurance team. Rating criteria include taste, color, firmness and ripeness,” with five stars signifying the best and one star for low quality/out of season. The story notes that “results are updated each morning on FreshDirect's Web site to let customers know which fruits and veggies are the best bets for deliveries to be received on the following day.”

    Marketing Daily writes that “FreshDirect CMO Steve Druckman describes the ratings system as one of several new improvements being implemented to enhance the online shopping experience and customer service. Others have included more delivery time slots, more sustainable packaging, quicker responses to customer emails and an expanded wine selection.”

    KC's View:
    This story points to essential changes taking place in the marketplace.

    Retailers have to do a better job of providing information about the products they sell – and providing ratings that help shoppers make intelligent, informed decisions.

    These same consumers may use the existence of such recommendations as a way to gauge where they will shop…and what stores they will avoid.

    Published on: December 16, 2008

    The Tampa Tribune reports that recent customer surveys seem to suggest that Sweetbay Supermarkets, which operates stores in western Florida, is improving its price image in the markets in serves.

    That’s an important shift, the Tribune writes, because when Delhaize-owned Kash n’ Karry was transformed into Sweetbay – which featured a better fresh food and customer service offering – it also picked up a high price image.

    “In data gleaned from recent customer surveys, Sweetbay has improved its price image among customers 30 percent, said John Barnette, Sweetbay's director of sales and pricing strategy,” the Tribune writes. “It is pushing its low-price message through its ‘Sweet Deal, Sweet Sale’ promotion. Sweet Deals are price breaks that last 13 to 17 weeks. Sweet Sales are one-week sales with deeper price breaks, said company spokeswoman Nicole LeBeau.”

    The Tribune also writes that “Sweetbay picked up a little more of the Bay area's grocery market share recently. Sweetbay is third in the Tampa Bay-area grocery market with 12.7 percent of the market, behind Publix Super Market, which has 38.7 percent, and Wal-Mart Supercenter, which has 20.8 percent.” Sweetbay and Publix were the only two chains to pick up market share, according to the story.

    KC's View:

    Published on: December 16, 2008

    Business First of Buffalo reports that Tops Markets plans to invest $150 million in the renovation of existing stores, while it considers opening seven to 10 new stores.

    CEO Frank Curci says that “store improvement projects will take place during the next five years,” and that “60 Tops stores have been identified for renovations ranging from minor spruce-ups to multimillion- dollar renovations … New stores, meanwhile, likely will be constructed in Buffalo, Rochester and some areas out to the middle of New York state.”

    The decisions – which Curci says have been made because the recession actually is helping Tops’ supermarket business – come about a year after the 76-store chain was acquired by Morgan Stanley Private Equity from Ahold for $310 million.

    KC's View:

    Published on: December 16, 2008

    Published reports say that eight senators have written a letter to the Federal Trade Commission (FTC) criticizing the agency for its ongoing attempts to unravel the $565 million acquisition of Wild Oats by Whole Foods – a deal that was concluded a year ago.

    The letter criticized the FTC for changing its procedures so that the same commissioners that investigate mergers also will preside over hearings that will consider whether the two companies ought to be de-merged.

    "Regardless of whether the procedure and substance of the changes technically comply with the statutes governing FTC rule-making, we are concerned that they may fall short of the standard of prudence with which the FTC ought to wield its considerable power," said the letter. It was signed by six Democratic senators (Patrick Leahy of Vermont, Tom Harkin of Iowa, Diane Feinstein of California, Charles Schumer of New York, Bill Nelson of Nebraska, and Benjamin Cardin of Maryland) and two Republican senators (Arlen Specter of Pennsylvania and John Cornyn of Texas).

    KC's View:
    I guess the senators had to be politically and procedurally correct in how they phrased their letter. A postcard that said, “stop wasting taxpayer money, you morons” might have been more to the point, however.

    Published on: December 16, 2008

    HealthDay News reports that “a new federal government food pyramid for preschoolers may help parents deal with picky eating problems,” offering “individualized nutrition guidance to meet the needs of children aged 2 to 5.”

    The new pyramid suggests that parents “set reasonable limits for the start and end of a meal. When you see your child is no longer interested in the meal, excuse the child from the table.” And, it suggests that parents encourage children to try new foods without forcing the issue, and that parents and kids should cook together.

    "This is a great tool for all parents of preschoolers but particularly those of finicky eaters,” said Brian Wansink, executive director of the US Department of Agriculture (USDA) Center for Nutrition Policy and Promotion (CNPP). “It's loaded with great ideas and suggestions for families so they can help their kids eat a more varied and nutritious diet. What I find most useful is how to talk with kids about what to eat and tips on how to have fun with food around the dinner table."

    KC's View:
    A pyramid is the right symbol for this, because in my experience, getting my kids to eat seafood is like walking up one.

    Published on: December 16, 2008

    • The Seattle Post-Intelligencer reports that Haggen Inc. will convert a Larry’s Market store that it acquired in Redmond, Washington, to a TOP Food store, the 18th store operated under the TOP banner by the company.

    • The Business Journal of Milwaukee reports that the “Copps Food Center in Hurley, which its owner Roundy’s Supermarkets Inc. previously announced was closing, will remain open under a new owner.” The store will become a Super One Foods, operated by Minnesota-based Miner’s Foods.

    • Published reports say that Starbucks plans to begin selling its Seattle’s Best Coffee brand in 1,900 Subway sandwich shops, beginning with a test that will begin early next year.

    Dow Jones reports that Krispy Kreme, while warning that it could close a significant number of stores, is looking to a new small format being tested in New York and Arizona…and plans also to introduce new mini versions of its most popular doughnuts that it hopes will appeal to consumers.

    KC's View:

    Published on: December 16, 2008

    The National Retail Federation (NRF) has released a new survey suggesting that “the average person had completed 47.1 percent of their holiday shopping by the second week of December, about ten percent less than the 52.6 percent average completed by this time last year.

    “The survey also found that over 41 million people have not started holiday shopping, with the biggest procrastinators being men (20.7% haven’t started) and 35-44 year-olds (20.9%). Only eight percent of shoppers say they have completely finished their shopping.”

    The survey notes that a lot of people are procrastinating because they think that the closer it gets to the holiday during a recession, the lower prices are likely to be. In addition, a significant number of people plan to do their late shopping on the Internet, using free shipping offers as a way to both save money and avoid crowds.

    KC's View:
    Proud to say that we’re about 95 percent done, and the rest is going to be done online. And about 75-80 percent of our actual buying has been done via the Internet.

    Published on: December 16, 2008

    Regarding changing leadership at the US Department of Agriculture (USDA), one MNB user wrote:

    There’s a net petition being circulated to suggest to Barack Obama that maybe, just maybe, it would be good for our food supply to name someone who represents sustainable, local agriculture to the Secretary of Agriculture.

    Interesting stuff – and I signed it.

    I believed in sustainable, local agriculture when I lived in the States – and moving to Europe has only underlined how important it is for rural economies and family farms. I can’t begin to tell you how much better things taste when they’re fresh and local and raised in a manner that isn’t harmful to the Earth. I am regularly meeting the people who grew or produced the food that ends up on our factory table – and it feels good to know that my grocery money helps another family directly. (And wow…do these folks make good stuff!)

    My Thanksgiving turkey was a free-range bird from a farm about an hour away – and we spent a long time just chatting with the family while we were there. And wow – even though it was pricey by US standards, I’ve never had such a fantastic turkey. We’ll go back next year, for sure – and buy more of the rose-petal jelly (try it – it’s awesome), hand-made pates, and local beers that they sell in their store – all produced by other families.

    And for what it’s worth – most of the goodies we’ve bought at local farms are the same price as the supermarkets – a way better bargain.

    This all used to exist in the US, and in a few fortunate places, still does….but who knows – if we have safe, sustainable, tasty food that keeps local economies flourishing…just maybe we’ll begin to pay attention to what we eat again…it will take a while, but it could happen.

    I wrote yesterday that during his appearance on “Meet The Press,” Walmart CEO Lee Scott seemed more in touch than a lot of people with humble beginnings that reflect the reality of how a lot of people live. Which led an MNB user to write:

    I totally agree with your assessment that many people did not have to sacrifice early in their life. I can relate to Lee's comments. I was a Vietnam vet that was drafted in Wisconsin after finishing college. The state had a program for vets where they gave you a $5,000 loan at 3.0% to buy a house. We took that loan and $1,000 of our $1,500 in saving and had enough for the $6,000 (20%) for our first house, which cost the same as Lee's -- $30,000. Our loan was 8.5% through the local bank. No 20% house.

    We have become a country of excess - easy credit and collectors of stuff. The new generation wants everything now and is not willing to wait and earn it. The same can be said of their attitudes in the workplace. They want instant reward and advancement.

    They/we paid the price when the bubble burst. Hopefully, this is a wakeup call for those living beyond their means. Maybe this brought a sense of humbleness to those living in excess. Maybe several years in community service or the military is a good thing after all.

    And another MNB user made an interesting point:

    I, too, watched “Meet the Press,” albeit the rerun this morning while working out. I agree with your views on Lee Scott and that he has not forgot his roots, and still believe that he would be a good choice for the car czar as I listen to Mitt Romney and Jennifer Granholm "discuss" the auto industry.

    Some of the auto industry officials and union officials should review Lee Scott's expense reports and tour his office. Maybe they would begin to understand what running a profitable business takes... Then again, as they checked out of the Four Seasons and headed home in their jets, I doubt it....

    KC's View:

    Published on: December 16, 2008

    In Monday Night Football action, the Philadelphia Eagles defeated the Cleveland Browns 30-10.
    KC's View: