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    Published on: March 24, 2009

    by Michael Sansolo

    There’s no rule that says you have to answer when opportunity knocks. But that doesn’t mean you won’t lose, especially if the competition is busily opening every door possible.

    Despite the gloomy state of economic news, many (including Kevin Coupe and me in our regular columns) have been urging you on to find opportunity. Sometimes when motivation doesn’t work, fear helps. Consider this:

    Right now, unemployment is obviously higher than in many years, which has many companies reconsidering recruiting and retention programs. The logic is pretty strong: when the supply of labor is high, why work hard at getting and keeping people. It’s strong logic, but a losing long-term strategy.

    And that’s where fear comes in. A number of large foodservice and restaurant companies have been talking about this issue recently with two interesting ideas that demand your attention.

    The first is the simple truth that at the moment there is an uncommonly excellent group of potential employees to grab. With high paying jobs in financial industries drying up, top graduating students are having to look elsewhere for employment. That means all companies can view the current situation as an incredible opportunity (there’s that word again) to grab top-notch talent. Considering the demographic time bomb that is still looming in the someday retirement of the Baby Boom, this is a wonderful time to recruit a future generation of leaders.

    Think about what happens if restaurant companies get that right and you don’t!

    The second point is equally simple and also related to economics. In the current environment, cost containment is essential if not more important than ever. Again, restaurant companies are talking about the importance of stepped up training using the logic that a better-trained employee is more efficient and effective. The return on investment for training, in short, comes quick.

    Now there are a couple of ways to look at this. One is to ignore statements coming out of the foodservice industry, which assumes that somehow you have missed just how large a percentage of meals these companies have taken from retail food in the past 30 years. Another option is to ignore the reality that these foodservice companies aren’t alone. No doubt very sharp retailers are thinking the same thing because there are companies (you can name them with little thinking) that never pass up a chance to grab opportunity.

    Frequently in these columns I have to explain biases or conflicts of interest due to work I do with various companies. On the issue of training people, I must always offer an apology because my continuing work with FMI on the Future Connect leadership conference falls right into this area. However, this week I’m offering no apology.

    The reason I’m working on the FMI conference is because it is an issue I believe in. I believe we have a stunning opportunity to link into the next generation and a stunningly large risk to destroy companies by not being proactive in this area.

    It’s far too easy to pass up Future Connect or any other training program because times are tough, money is tight and labor is plentiful.

    Or it is time to grab opportunity. It’s your call, but remember: the competition is acting.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

    KC's View:

    Published on: March 24, 2009

    Bi-Lo, the 215-store supermarket chain with stores in South Carolina, North Carolina, Georgia and Tennessee, has filed for bankruptcy protection.

    The company said that its stores would continue operating as it reorganizes its finances.

    The move came three days before a credit facility matured, which put the chain under tremendous financial pressure.

    KC's View:
    Here’s the interesting paragraph from the Bloomberg story:

    “The company and its units’ 20 largest creditors without collateral backing their claims are owed $36.3 million, according to court documents. The three biggest listed are C&S Wholesale Services Inc., owed $16.7 million; Pepsi Cola Co., owed $3.07 million; and Piedmont Coca-Cola Bottling, owed $2.39 million, according to court papers.”

    Maybe it is a mark of the times, but I read figures like $16.7 million, $3.07 million and $2.39 million and I think to myself, that’s not so much money…that’s just the size of a moderate performance bonus from a failing financial services company.

    But let’s put that aside for a moment.

    As Bi-Lo reorganizes its finances, it seems to me that it also has to re-evaluate its approach to the marketplace. If management is in a “let’s get back to fundamentals” mindset, this will be just a stopgap measure and will only delay another inevitable collapse.

    Retailers usually fail for a reason beyond finance – they have become unable to accurately take the pulse of their shoppers, unable to see around the corner and detect where things are going.

    If Bi-Lo doesn’t deal with this reality in a creative and innovative way, doesn’t work to look around the corner, then it will remain a dead company walking, no matter how the reorganization goes.

    Published on: March 24, 2009

    Reuters Health reports that a new study out of Tufts University says that people who have a glass or two of wine or beer each day could be increasing their on bone mineral density (BMD), and that beer and wine actually could be better for bone strength than calcium.

    However, one of the researchers, Dr. Katherine Tucker, tells Reuters that it is difficult to gauge the benefits and risks of alcohol consumption these days, conceding that this new study comes on the heels of one that just a few weeks ago said that women who drank a glass or two of wine each day may increase breast cancer risk even while reducing the risk of heart disease.

    Two important notes. One is that hard liquor does not seem to have the same positive impact as beer and wine, according to the study. The other is that there seem to be fewer downsides for men than for women.

    KC's View:
    My first reaction to this story was that it suggests the role that smart food retailers can play in trying to distill (no pun intended) information about food and wine health benefits to their shoppers.

    (Actually, that’s a lie. My first reaction to this story was to shout, “Yippee!” The thing about food retailing opportunity was actually my second reaction.)

    There are so many stories and reports about various foods and beverages and their effects on health. If retailers are smart, they can use this jumble of information to their own advantage…concede to shoppers that the whole thing is a puzzle but that they are committed to working with customers to make sense of it all. It would create consumer connections that could be invaluable as time goes on.

    Published on: March 24, 2009

    Reuters reports that a new survey from Retail Forward and PricewaterhouseCoopers says that 75 percent of respondents said that they have changed their consumption habits because of the recession, and that the vast majority of these shoppers plan to maintain their new behaviors even as the economy improves.
    KC's View:
    I’m dubious on two fronts.

    I’m a little surprised that only 75 percent of respondents said that the recession has changed their shopping behavior. And I’m a little cynical about our ability to remain disciplined about not going back to old, bad habits when things turn around. I want to believe, but I’m not sure I do.

    There are too many people out there who are talking about getting back to the way things were rather than talking about creating a different sort of culture with new and sustainable priorities. “Get back” is sentimental rather than forward-looking…and I think it reflects the true emotional state of the US public.

    Published on: March 24, 2009

    The Financial Times reports that “US households are continuing to pay more for ‘green,’ environmentally friendly household products, defying a broad trend of shoppers ‘trading down’ to lower priced goods and retailers’ own-label brands.”

    Companies like Clorox and Seventh Generation are saying that they are seeing continued growth in this category, which appears to be a testament to the commitment that devotees of the category feel to environmental issues.

    According to the story, “The previously dramatic growth rates in the category have slowed, with IRI, the consumer products data company, reporting 30.8 per cent growth in the green cleaning category over the past 12 weeks, against the rates of 80 per cent reported last year.

    “US organic food sales are also still rising, but growth rates have slowed sharply, with Nielsen reporting annualised sales growth of just 5.6 per cent in December, down from around 25 per cent a year earlier.”

    KC's View:

    Published on: March 24, 2009

    Starbucks’ woes have been well documented in recent months, but that doesn’t mean that people are reducing their coffee consumption.

    According to the 2009 National Coffee Drinking Trends survey, released by the National Coffee Association, 54 percent of Americans are drinking coffee each day, down slightly from 55 percent a year ago – a difference that the organization was statistically irrelevant.

    However, 83 percent of those who said they drink coffee daily said they made it at home – up from 78 percent who said the same thing a year earlier.

    Gourmet coffee/espresso drink consumption was 14 percent of coffee drinkers, down from 17 percent a year ago.
    KC's View:
    This strikes me as interesting, mostly because it suggests how high the upside is for coffee shops.

    Think about it. Only 17 percent of coffee drinkers were buying coffee out, and only 14 percent were drinking lattes and cappuccinos and the like, which seem like really small percentages with a lot of room left for growth.

    The at-home consumption numbers, by the way, would seem to work in Starbucks’ favor…especially since it is rolling out its Via instant coffee product around the country.

    BTW…would it be self-serving of me to use this moment to plug “Attitude Blend,” the official MorningNewsBeat coffee made by White Cloud Coffee?

    Not only is it “strong without being bitter, just like the Content Guy” (in the words of one MorningNewsBeat user, which make me smile every time I read them), but when you buy a package of it and keep it in your refrigerator, you get to see my grinning visage every time you open the door and look inside.

    On the other hand, maybe that isn’t a positive…

    Published on: March 24, 2009

    • The Chicago Sun-Times reports this morning that Chicago Alderman Howard Brookins plans to introduce an “amended redevelopment agreement” that would allow Walmart to build a new store within the city limits. The bill is expected to reignite debate between labor and some city interests over Walmart’s labor policies…which don't seem so onerous to some during a time when unemployment is rising and people have less disposable income to spend.
    KC's View:

    Published on: March 24, 2009

    • Walgreen Co. said that its second quarter profit was down seven percent to $640 million, from $686 million during the same period a year ago. Q2 revenue was up seven percent to $16.48 billion, on same-store sales that were up 1.3 percent.

    KC's View:

    Published on: March 24, 2009

    …will return.
    KC's View: