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    Published on: June 9, 2009

    by Michael Sansolo

    Dining at a recent conference, I saw no great symbolism in placing my napkin of my lap. My friend Joy Nicholas, however, saw it very differently. She called over the server and asked if she could get a black napkin instead of the white one provided.

    I had to ask why. White cloth napkins, she explained, tend to leave some color behind on dark slacks. Almost instantly, three women at the table pulled away their white napkins and agreed that Joy was correct. Apparently white napkins leave some color on women’s slacks, not men’s. One of the women said she didn’t know the reason, but it happens and they don’t like it.

    It was a marvelous insight courtesy of Joy and the three other women who were now insisting on black napkins at my table. As women become an increasingly large portion of the audience at conferences and banquets, you’d think someone in the hospitality industry would have noticed Joy’s issue. I have to imagine that the cost of supplying black napkins instead of white would be negligible, yet the impact would be huge.

    As the wonderful Yogi Berra once said, “You can observe a lot by just watching.” It is something we all need to do.

    Finding those little things that make the difference between satisfying a customer or leaving them wanting is always the key to business. The problem is figuring out what those things are and making sure your focus never wavers too far from them.

    We had a classic business case of attention to detail play out this week on the front pages of the Washington Post. Two major US companies were on the front page on successive days: General Motors for its slide into Chapter 11 (and it announcement of new plans) and Walmart for its annual meeting.

    The General Motors story has elements that every business needs to study, discuss and learn from. From losing control of costs to underestimating emerging competitors to - most importantly - losing touch with core consumers, General Motors has sadly delivered us an object lesson in steps to avoid. Yet I understand how this paragon of American business is fallen into such disrepair. Years ago my father and I bought cars within months of each other. Mine was a bottom-end Toyota; his was a high-end GM product. The next car my father bought was from Toyota. My experience was that superior.

    Instead of winning me as a young customer, GM lost both me and my father’s loyalty at the same time. Here’s hoping that their new plan and cars are good enough to turn that around.

    In that light, it was coincidental and strange to see Walmart’s annual meeting featured on the front page of the Post, with a picture of two celebrities and a Walmart executive. It’s hard to imagine that Sam Walton ever imagined that day would come. Yet, today, Walmart is the paragon of American business for better or worse and the Post was right to recognize it. (Maybe they read Kevin’s coverage of the meeting on MNB and decided they, too, needed to get on board.)

    The question for Walmart and indeed all of its competition is, what will the future bring? Will Walmart keep its focus on cost containment, understanding emerging competitors and serving changing consumer needs? Will competitors or complacency catch up?

    Want a clear sign? The following appeared in the New York Times coverage of Walmart CEO Mike Duke’s speech. “The most popular items that families buy — groceries, health and beauty goods, pet products and baby products — will be located on the same side of the store, so customers do not have to trek from one end to another. Shelves will no longer be stacked so high, so stores will feel airier and easier to navigate.”

    It looks like Walmart is paying attention to black napkins. Others take notice.

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

    KC's View:

    Published on: June 9, 2009

    There are numerous reports this morning that when the Procter & Gamble board of directors meets today, it will name Robert McDonald, the company’s COO, as its new president/CEO. He will succeed AG Lafley, who will remain as chairman of the company after nine years in the CEO job.

    The move comes sooner than most analysts expected, and experts almost unanimously say that McDonald has huge shoes to fill since during Lafley’s tenure the company’s stock price is up 87 percent.

    KC's View:
    Maybe it is a sign of the times that we live in, but I find it interesting that since the upcoming CIES World Food Business Summit agenda was announced, three speakers - Lee Scott of Walmart, Jeff Noddle of Supervalu, and now Lafley – have announced that they are stepping down from their respective CEO jobs.

    It actually creates a scenario in which these three execs may do something a little different, proving moments of reflection that transcend the usual business-oriented reports that they usually would give. I hope so.

    Published on: June 9, 2009

    Information Week reports that Coca-Cola is testing a new self-serve soft drink dispenser at a number of fast food restaurants … but it is a dispenser with a difference, since it allows consumers access to more than 100 varieties of sodas, juices, teas, and flavored waters.

    According to the story, “The dispensers each contain 30 cartridges of flavorings that mix up 100 different drink combinations. The cartridges are tagged with radio frequency ID chips, and each dispenser contains an RFID reader.” At the end of each day, “massive amounts of consumption data” is sent back to Coke’s Atlanta headquarters, and the dispenser is described by Information Week as part of “Coke's front-line robotic army for business intelligence.”

    If the tests – taking place in California, Georgia, and Utah - work, Coke hopes to have the machines – dubbed “Freestyle” – in thousands of fast feeders, ranging from McDonald’s and Burger King to much smaller venues.

    KC's View:
    It seems like a few too many choices to me, but I’m guessing that young people will love it…and this could give Coke a unique window into their minds and souls.

    Published on: June 9, 2009

    The New York Times reports on a new development in the bar code business – “sets of neat black bars stacked in two rows” that are called GS1 DataBars, which “can store more data than traditional bar codes, promising new ways for stores to monitor inventory and for customers to save money.”

    Examples cited by the article:

    • “One use of the symbols will be in sophisticated coupon offers that combine deals on multiple products … A single coupon, for example, could offer discounts on three separate items like eggs, bacon and biscuits, all in one transaction.”

    • “Another use of the new symbols is already helping to streamline operations for a common speed bump in the checkout process: loose produce. During the past three years, for example, the Loblaw Companies, the big Canadian supermarket chain, has gradually switched to scannable, miniaturized DataBar labels pasted onto some fruits and vegetables. Instead of entering a 4- or 5-digit number to look up a price, cashiers scan the DataBars on the produce.”

    • “The labels help stores keep better records … If retailers are receiving Red Delicious apples from three separate suppliers at prices of $8 to $10 a carton, and all the apples are dumped into a single bin, retailers can still tell how many they sold of each lot, as each DataBar is tied to a purchase record.”

    KC's View:
    Anything that creates greater transparency and traceability seems like a good thing to me.

    Published on: June 9, 2009

    Advertising Age reports that “even as Procter & Gamble Co. cut measured U.S. media spending 18% overall last quarter, it more than doubled spending on internet display ads.”

    “I've got a lot of passion for digital," says Marc Pritchard, P&G’s global marketing officer. "It really is such an incredible way to connect with consumers and really have much deeper ongoing relationships with them. ... Our media strategy is pretty simple: Follow the consumer. And the consumer is becoming more and more engaged in the digital world."

    Here’s how Ad Age defines the shift: “P&G's big spike in internet spending, coupled with such factors as a whopping 44% decline in network-TV spending, still only brought online display to 4% of P&G's $672 million quarterly measured outlay. And because measured-media data don't capture many of the fastest-growing digital-spending buckets, such as online-video ads, behaviorally targeted ads, mobile or search, P&G's digital outlay as a whole probably exceeded 5% of its media spending last quarter.
    But the implications beyond the quarter are huge. The ramp-up in digital dollars means many P&G brands are finally spending enough to have a measurable impact on sales, which could allow them to justify even more spending on digital down the road.”

    KC's View:
    As a friend of mine puts it, current technologies make it possible for people to only do what they can measure. That’s where P&G and a lot of other companies inevitably are heading…and it is inevitable because broadcast and print media are facing a decline that almost certainly will end in obsolescence and irrelevance.

    Published on: June 9, 2009

    The St. Petersburg Times reports on how the national move toward legislation that will require chain restaurants to post nutritional information on their menu boards.

    “Before long, such disclosure could be required everywhere. A growing chorus of health advocates who believe fattening restaurant fare has contributed to America's obesity epidemic say better nutrition information could help control the problem.

    “California, New York City and almost a dozen other places have passed laws requiring chain restaurants to post nutritional details. Similar legislation was introduced in Florida this year, but went nowhere. Now the battle is headed to Washington, where competing bills - one similar to New York's law, the other a more lenient version favored by the restaurant industry - would set national standards.”

    KC's View:
    While I am leery at legislation for the sake of legislation, I have to admit that I like this idea. A lot. Simply because I have occasionally been in fast food restaurants where the calorie counts are posted, and faced with the stark reality of the impact that some items may have on my 54-year-old body, I’ve changed my mind about what I’m going to buy and eat.

    How can this be a bad thing?

    BTW…check out “Doonesbury” this week, which is having a lot of fun with this theme.

    Published on: June 9, 2009

    The Zagat Fast Food Survey has been published, and respondents say that In-N-Out Burger makes the best hamburger, Starbucks makes the best coffee, and McDonald’s makes the best French fries.

    Panera Bread is said to bee the best large chain, Subway the best “mega chain,” Starbucks the best “quick refreshment chain,” and PF Chang the best full service chain.

    McDonald’s is said to be the have the best value of all fast feeders.

    KC's View:
    I might quibble with the choice of Panera Bread; I personally think that Chipotle is superior.

    And I’d really challenge the PF Chang recognition, since I think its Chinese food is barely edible. But then again, I have had the unique advantage of a father-in-law who knows all the best Chinese restaurants in New York City, and has taken us there…and trust me, they’re nothing like PF Chang.

    Published on: June 9, 2009

    The New Mexico Business Weekly reports that Kroger-owned Smith’s Food & Drugs has reached a tentative agreement with the United Food & Commercial Workers (UFCW) on a new contract covering more than 2,000 employees working in 26 New Mexico units.

    Terms of the agreement were not disclosed. A ratification vote is required before the settlement is finalized.

    KC's View:

    Published on: June 9, 2009

    The Colorado Springs Gazette reports that “unionized workers for King Soopers Inc. will vote in the Denver area Monday and Colorado Springs on Tuesday on the supermarket chain's latest contract offer, which could set the stage for the state's first grocery strike in 13 years.”

    The unionized employees have been working without a contract since May 30.

    Safeway continues to negotiate with its employees in Colorado, who have agreed to a contract extension until June 26.

    The Gazette notes that “King Soopers and Safeway have agreed to lock out their unionized workers if the union goes on strike against the other company, but the pact doesn't stop either company from reaching a settlement with the union independent of the other.”

    KC's View:

    Published on: June 9, 2009

    • Walmart reportedly plans to open its new Hispanic-themed Sam’s Club – under the banner Más Club – on July 2 in Houston.
    KC's View:

    Published on: June 9, 2009

    Mixed reactions to MNB’s coverage of the Walmart annual meetings…

    MNB user John Giggy wrote:

    Kevin, I really have enjoyed your commentary on the Walmart Shareholders meeting. My only regret is that I didn’t get to Bonefish to meet you. I have been reading your column religiously since early ‘03 when Fleming was going down the tubes. Fortunately the department I worked in at Fleming (advertising/marketing) was spun off in the fall of ‘02 to a company that became an outsource for Fleming before they crashed the following year. The company that absorbed our department also handled the print buying for Sam’s Clubs so after Fleming closed I was sent to Bentonville to manage our office here. While working inside the Sam’s offices I turned a number of Sam’s management team on to your column and know that at least one of their letters has appeared in “Your Views”. I retired in the summer of ’06 but still live in the Bentonville area and continue to read your column daily. I look forward to spending part of my morning each day keeping up with the latest in the industry I was part of for 40 years.

    Thanks, John. That means more than you know.

    But another MNB user wasn't so impressed:

    Congratulations, you drank the Kool-Aid!

    Commenting on the fact that Michael Jordan appeared at the Walmart annual meeting, I innocently asked what the expiration date might be on Jordan’s basketball fame, and when he might be better known as an underwear salesman.

    MNB user Brian List wrote:

    I don’t know, man, he’s the greatest basketball player of all time. It will be while before people forget about Jordan. Unless Lebron starts winning championships, and I don’t think Kobe is on his level, even though he’s won a lot.

    It really was just an idle query…nothing against Jordan. But at a certain point, Joe DiMaggio became the Mr. Coffee guy, to a generation that did not remember his exploits as a NY Yankee centerfielder (not to mention his being married to Marilyn Monroe).




    Got the following excellent email from MNB user Elizabeth Archerd:

    One of the most consistent, and incorrect, messages that keeps coming out about the recession is that bad food is the cheapest food option in the recession.

    I wish my friend who feeds her family of six organic meals and snacks for $30-40/week could teach the world to cook. Whole grains and beans are sold in bulk at natural food co-ops and other stores and work out to four or five servings per dollar. That leaves plenty for fruit, vegetables and cuts of inexpensive meat that cook all day in a slow-cooker (also cheap) to achieve fantastic flavor.





    On the subject of credit vs. debit cards, one MNB user wrote:

    I suspect people use "Credit" either because of the rewards or because they don't have the money in their bank account.

    Those few of us who understand that it costs the retailer more when we use a credit vs. debit card do not really believe that our use of a debit card will materially change the prices we pay at retail. And most certainly we would not see lower prices sufficient to offset a 2% rebate. Checks bounce and I think the banks charge businesses a per check fee to deposit. Even cash has its expenses for the retailer - that Brinks truck service is not free. A former large gasoline retailer told me that his bank charged him a fee even when he went in person to deposit large sums of money - there is a cost (and risk) of handling that too!





    Regarding yesterday’s Sports Desk report, MNB user Al Kober thought I unfairly neglected Tiger Woods’ win at the Memorial Tournament:

    I know you are not into golf by many of us are. It was a great last day comeback for the win.

    And another MNB user wrote:

    Thought you might want to include in your sports update tomorrow that it will be game six of the Stanley Cup playoffs between the Detroit red Wings and the Pittsburgh Penguins. If the Wings win tomorrow night’s game in Pittsburgh, they take the cup. If not, there will be a game seven back in Detroit.

    You’re both right. Golf and hockey are just not on my radar screen. I obviously need to hire some sports reporters…





    And I think we’ll make these the final words about the guy who suggested that a promotional program designed to get supermarket employees to use more private label was a massive infringement on their personal freedoms that must have been created by someone named “Hitler, Castro or Obama.”

    One MNB user wrote:

    As a child of Holocaust survivors what I object to is the use of Hitler's name for something so trivial as a prize contest. The comparison of the racist mastermind of genocide to "Prize Patrol" trivializes the Holocaust. When a retailer decides (and has the power) to murder 8 million people because they shopped at the competition, then we can throw Hitler's name around.

    And another MNB user wrote:

    Thanks for calling the "wingnut" on his comments. I was massively offended by his comparison of President Obama with Hitler.

    Regardless of his opinion, a large (largest in recent history) majority of Americans voted for President Obama. These wingnut "Americans" make me wonder if they truly value democratic ideals, when they seem unable to cope with election results they don't agree with.


    Case closed. Time to move on.

    KC's View: