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    Published on: June 16, 2009

    by Michael Sansolo

    Last week I did something I hadn’t tried since college.

    Now while that may sound like a particularly dangerous statement, it only proves that you don’t know what I did either last week or in college. What I did was nothing illegal, immoral or questionable in most ways.

    I took an inter-city bus for the first time since Jimmy Carter was in the White House. Obviously, it’s been a long time.

    It wasn’t the traditional Greyhound or Trailways. Rather it was something called Vamoose, one of a number of bus services running passengers between Washington, DC, and New York. Again that might not sound like much to you, except there is probably no better-serviced route in the US than New York to DC. There are countless airline flights, trains on Amtrak and, of course, major highways. In short, there wasn’t a real crying need for a new link between the two cities.

    Yet, Vamoose is making is work so well it has loads of competitors.

    The basics of these new bus routes are simple. Passengers board in various places in the DC area (DC, Maryland or Virginia) and for $25 ride to the heart of Manhattan or vice versa. The buses offer amenities including a free trip every fifth ride or WIFi access throughout the trip.

    I had heard from friends about the buses, but could never talk myself into using the service. Until I tried it and realized I waited too long.

    The trip was a very pleasant surprise. The bus was relatively clean, the ride comfortable and the company of fellow passengers was totally acceptable. (Okay, the woman painting her nails and the guy working on his fantasy baseball team were over the top, but I can deal.) On the positive side, it was easy, convenient, relatively cheap and allowed me to work, read and take a nap. That’s a pretty full day.

    The crowd of passengers who rode with me round trip are big fans of the service. Many said they use it regularly to visit New York for shows, family and more. Despite the options, they see the value.

    And there’s the puzzle. No one started Vamoose because there was a lack of options or competition. No one asked for such a service. It started because some small entrepreneur detected a need and divined a new way to fulfill it. Many of the bus services between the cities began with service from one poor neighborhood of DC to a corresponding neighborhood in New York. That alone was an excellent idea. It took a leap to bring it to affluent neighborhoods where the options were so plentiful.

    Such leaps are nothing new provided an entrepreneur sees opportunity where none exists. Ted Zittell of McMillan/Doolittle closes his excellent speeches with a quote from Henry Ford about the birth of the automotive industry. As Ford said, “If I asked people what they wanted, they would have asked for a faster horse.”

    Sometimes you have to give people what they didn’t know they wanted. That thinking launched many great business ventures. And last week, it got me back on the bus.

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

    Published on: June 16, 2009

    A special report by Michael Sansolo

    HERSHEY, Pennsylvania -- Time was when a convenience store meeting focused on foodservice might have included a debate on melting cheese on nachos. That time is long gone.

    The National Association of Convenience Stores (NACS) Global Forum, held this week here in Hershey, PA, featured lively discussion of how economic changes around the globe are impacting shoppers, meal time and convenience retailing. One of the key questions centered on the changing nature of convenience itself and how that is altering the historical nature of where c-stores fit in the spectrum of retail.

    Answers to that question came through clearly on the extensive and excellent store visits during the two-day meeting. Retailers like Sheetz, Wawa, Rutter’s and Royal Farms stood out as exceptional destinations for a wide variety of fresh prepared meals, with all serving them in bright, clean stores that mix eye-appeal in healthy doses with impulse merchandising. Enormous gains have been made in food quality, employee service and product variety and every retailer at the forum focused on finding the next level of innovation and growth to stake out even stronger positions.

    These sharp convenience store operators use the draw of gasoline and (incredibly) clean restrooms, as the magnet to attract shoppers inside—and the stores do an excellent job with signage to get shoppers inside. Once there these operators appear to be winning an increasing share of meal purchases in ways that should alarm quick service restaurants and supermarkets.

    The Global Forum was attended by retailers from North and South America, Europe, Asia and Australia, along with some key convenience store suppliers from around the globe.

    Michael’s View: First, let’s clear my bias—I was the moderator of the two-day meeting. But my bias ends there. This was a stunningly well-planned meeting and the store visits would convince anyone that a trip of cutting edge retail needs to include central Pennsylvania. There you will find some incredibly strong c-store merchants raising the level of competition to a frighteningly high level.

    And if you visit, go hungry. You won’t be sorry.

    KC's View:

    Published on: June 16, 2009

    USA Today reports on the debate taking place in Washington, DC, about the possibility that there should be a federal tax on beverages sweetened with sugar, high fructose corn syrup and other sweeteners. Supporters say that such a tax would have two benefits – it would raise money for a government going more deeply in debt almost every day and it could reduce consumption of such drinks, which could affect the nation’s obesity crisis.

    "There is robust scientific evidence that sugary-beverage consumption increases the risk of obesity, diabetes and heart disease," Kelly Brownell, director of the Rudd Center for Food Policy and Obesity at Yale University, tells the paper.

    “The complexities of health-care reform aren't going to be solved by a tax on soda pop," responds Kevin Keane, a spokesman for the American Beverage Association, which represents the non-alcoholic beverage industry. "It's discriminatory. Why single out one product? It would not even make a dent in addressing the health-care challenge or the obesity challenge."

    Both Democrats and Republicans say it is highly unlikely that such a tax could be enacted this year. But there seems to be a sense that a door has been opened, and that this issue will find its way to the fore yet again.
    KC's View:
    I’m not an economist and, in fact, I’m pretty much incapable of helping my kids with high school math – so there are limits to my analytical powers in this area.

    But here’s my first thought. If such a tax were enacted, and it actually had an impact on consumption habits, wouldn’t it also have an economic impact up and down the food chain? Isn’t there the possibility that manufacturers would end up paying lower corporate taxes, and that people could get laid off in factories and from sales organizations, which would then impact their ability to pay income taxes?

    I’m just saying…it probably isn’t as simple as just levying a tax and counting – and then spending – the money. Never is.

    Published on: June 16, 2009

    King Soopers employees who are members of the United Food and Commercial Workers (UFCW) are voting this week on a new five-year offer from the Kroger-owned chain, more than a month after their last contract expired.

    Among the issues that have been contentious during the negotiations are the two-tiered pay and benefits system that the chain says it needs in order to be profitable and that the union says essentially freezes wages for most employees, and a proposal that retirement age be set at 55 rather than 50.

    "This contract is a good contract in a good economy, but it's a great contract in this economy," King Soopers spokeswoman Diane Mulligan has been quoted as saying.

    At the same time, King Soopers has gone to court to stop the union from going into the stores to talk to employees about the vote as well as talking to customers about the labor. However, the courts will not hear the case until Thursday, and the vote ends Wednesday.
    KC's View:
    The union completely loses me when it argues for a retirement age of 50.

    Give me a break. I think even a retirement age of 55 is absurd. People are living into their eighties. Retirement ought to made later, not earlier.

    To suggest that people should be guaranteed retirement benefits at age 50 is to highlight a complete and utter lack of touch with reality.

    Published on: June 16, 2009

    Interesting piece in the Wall Street Journal about so-called functional foods, which have developed into a $30.7 billion industry that is expected to grow another 40 percent over the next five years.

    “But can these fortified Frankenfoods deliver on the health promises they claim?” the Journal asks. “And can they compete with taking supplements or eating straight from the source?”

    To break a 1,300-word article down into fewer than 100 words, some experts say that functional foods – which essentially are foods enhanced with compounds or ingredients with specific health benefits – are highly effective, while some say that any processing reduces efficacy and that whole foods are the best way to go. And some say that the act of adding an ingredient with a health benefit can obscure the fact that a product may not necessarily be healthy overall, and so shopper beware.
    KC's View:
    I like the approach advocated in the Journalpiece by Dr. Lawrence Cheskin, associate professor of medicine and human nutrition at Johns Hopkins University: "A lot of this boils down to common sense. As with all foods, the key here is simply to get it from a good source and eat it in moderation."

    Example. I like yogurt. For weight reasons, I only eat nonfat yogurt. And nonfat yogurt with probiotics – in my case the private label variety manufactured and sold by Stew Leonard’s – seems like a smart choice for both nutritional and economic reasons.

    As long as it is consumed in moderation, and with eyes wide open.

    Published on: June 16, 2009

    The Chicago Tribune reports that Aldi plans to open a store on Chicago’s South Side – in the same shopping center where Walmart wanted to open but was stymied by union interests objecting to the company’s position on organized labor.

    According to the story, “The 17,000-square-foot freestanding building is slated to debut in late 2010 and will follow Aldi's new prototype design, touting high ceilings, plenty of windows and generally a brighter, warmer more welcoming look and feel” than traditional Aldi units.

    Aldi already operates 120 stores in the Chicago area.
    KC's View:

    Published on: June 16, 2009

    The Baltimore Sun reports that Safeway “is launching a campaign to significantly increase its focus on locally grown produce. Nearly a third of Safeway's produce comes from local sources, and the grocer said that shoppers can find more local produce per item at its stores than at a typical farmer's market … Safeway's in-store campaign will also include ‘locally grown’ reference maps that will geographically show the location of key local farmers. ”
    KC's View:

    Published on: June 16, 2009

    The Los Angeles Times reports that Dole Food Co. is threatening to sue a Swedish filmmaker over “Bananas!”, a new documentary being debuted this week at the Los Angeles Film Festival.

    According to director Fredrik Gertten, the Times writes, the documentary is “a balanced, nuanced depiction of a trial pitting Nicaraguan banana plantation workers and a prominent L.A. attorney against a powerful multinational agribusiness.”

    But Dole believes that the film is “an egregiously flawed document” that is based on an already discredited story, and it says it will sue both the director and the festival if the movie is shown.

    The Times writes that “the events that ‘Bananas!’ partially chronicles are complex and the subject of ongoing lawsuits and disputes. They center on Dole's acknowledged past use of the pesticide dibromochloropropane, or DBCP, in Nicaragua and other countries. Banana farmers and other plantation workers have taken Dole to court, seeking millions of dollars in damages, contending that they were rendered sterile by exposure to the pesticide, which has been banned in the United States since 1979.

    “Thousands of plaintiffs in Nicaragua, Costa Rica, Ivory Coast and other countries have brought cases against Dole and pesticide manufacturers. Lawyers for some Nicaraguan plaintiffs have taken their cases to U.S. courts, hoping they will enforce verdicts against Dole that have been awarded by Nicaraguan courts.”

    Dole’s problem with the film seems to center on its use of a dramatic device – it uses an attorney named Juan J. Dominguez, who was heavily involved in various lawsuits, as a protagonist, positioning him as a champion of the workers who led the fight against the company. But Dominguez has been discredited in the courts, charged with unethical behavior and threatened with contempt charges.
    KC's View:
    It sounds to me as if Dole may have a legitimate complaint, but I always think that these kinds of lawsuits succeed only in turning people like the director into a victim…which doesn’t help Dole. The company sues at its own risk.

    BTW…I sometimes wonder what companies are thinking when they use things like pesticides that have been banned in the US in other countries that have less stringent regulations. Maybe they convince themselves that the US is being unfairly strict…and maybe they convince themselves that the economic benefits of using such pesticides outweigh the health and legal exposure they may have. But somebody at the table ought to be suggesting that this isn’t such a good idea, and enumerating the reasons why.

    Another point. The word “documentary” sometimes gets misconstrued as meaning that something is objective…but in fact, most great documentaries have a point of view that is based on a specific reading of the facts. Documentaries are meant to provoke thought…and it sounds as if “Bananas!” is capable of doing that. But its ability to do so may be fatally compromised if it used the wrong guy to make the case in the film.

    Not to be callous about this, but I think I’ll stick with the Woody Allen version. (When I first saw the Times headline, I couldn’t figure out why Dole was suing Allen over a comedy he made in 1971..)

    Published on: June 16, 2009

    • Tesco is out with its first quarter financial results, saying that groups sales for the period were up 9.7 percent and that UK same store sales were up 4.3 percent. Analysts quoted in various stories about the results suggest that these are encouraging numbers coming after a period during which Tesco’s dominance in the UK has been challenged by smaller rivals, and suggest that Tesco’s strategic moves to emphasize value-driven products may moving the needle on sales.
    KC's View:

    Published on: June 16, 2009

    • The Nielsen Co. has named James Kilts, the former CEO of Gillette who helped to engineer that company’s acquisition by Procter & Gamble, to be its new chairman.
    KC's View:

    Published on: June 16, 2009

    It is always interesting to me when we get email from people reporting on their store experiences – positive and negative.

    For example, one MNB user wrote to talk about a comment he’d sent to Kroger about a store he’d visited on the evening of May 29:

    No cash registers open. Only way to checkout was self checkout. I hate self checkout. Lines long anyway. Sorry - if you can't have enough help to ring me out I am going elsewhere - and I did. Walmart a mile away treated me better.

    Seventeen days later, he got a response from Amber Sublett, a Kroger consumer affairs representative:

    Thank you for contacting Kroger. I want to apologize for the delay in response. As for the issues with USCAN and it being the only option for check out, I apologize for the inconvenience, the stores will keep USCAN open when the stores volume is at a low, this usually happens in the early and late hours, however, this being said there should always be a cashier available for those who do not wish to use the USCAN. I have sent this concern onto upper management for immediate review. Again I apologize and thank you for bringing this to our attention.

    The MNB user adds as a postscript:

    This is not the first time I have encountered no option but self checkout at a Kroger store - the time before I had only a few items and there were no lines.

    P.S. I spared Kroger the details of the price differences for items bought that evening. One item was more because it was on sale at Kroger. All others less, some significantly less. Main downside to Walmart is that I don't feel safe there late in the evening.

    Give Kroger some credit for a) apologizing for the delay in responding and b) promising to refer the matter to higher-ups. That said, I’ll be curious to see what happens from here.

    I do think that, apology aside, 17 days to respond to an email is ridiculous. I believe firmly that retailers ought to have a sunset policy – every letter or issue gets responded to by the end of business on whatever day it is sent.

    The real world lives on Internet time. Seventeen days is Pony Express time.

    On the subject of health care reform, one MNB user wrote:

    I normally look at these editorials and bite my tongue but you and Steve Burd couldn’t be more wrong in comparing auto insurance to health insurance.

    Compelling argument? This drivel should be rejected outright!

    The costs aren’t the same and it’s basically apples and oranges with regard to liability and the range of cost for “repairs”.


    You may be opening the door for lawsuits against corporations who drove that employee to work long hours and neglect his or her health for the benefit of the company, only to get fired for driving up health care costs. I can give you a long list of people who were/are in this boat. Some of them aren’t with us anymore.

    I’ve read about health conscious runners who had heart attacks on the treadmill at the doctor’s office. I guess all that healthy behavior didn’t do them any good huh?

    So if I have healthy behavior, yet still get cancer, will I be rewarded? I seriously doubt that is what Steve Burd is proposing. You get sick, you are screwed…

    You know, some sickness is genetic….you are born with it. But heck, let’s make ‘em pay more or better yet, fire them and get them out of our company health care plan right?

    That’s the “Wall Street” answer to health care reform….it’s a cost cutting program in disguise and it’s hurting people.

    In the area of personal health, people are often oblivious that they have a problem or that their behavior is contributing to a problem until it manifests itself.

    I was born with high blood pressure and it runs in my family. So I’m to be penalized? I don’t think I’ll stand for that. Some medical problems are peculiar to certain races, such as high blood pressure in blacks. You going to raise their health care rates due to race or ethnicity? I think there is a law against that.

    Most people think they are healthy, their doctors think they are healthy (no need to order expensive testing…that’s another cost saving move). That is until they have a problem.

    Most companies are happy to “use up the youth of employees” because we are healthier at that time in our lives and have little need for doctors and hospitals. When folks get older, they start having medical problems…it’s a fact that comes with age.

    Too bad some greedy companies try to kick a person out of their health insurance and their jobs when this happens. And there are companies doing just that.

    They always cite these stupid examples and blame the person that probably was driven to poor health from the job they had.

    Well, it isn’t right and penalizing people for this isn’t right either. You should be ashamed for supporting this false and immoral rhetoric.

    Insurance was originally intended to charge one price to all so that everyone benefits and everyone helps pay the bills, not just a few. Despite this, the insurance company still makes money. The thought of charging differently within a demographic group goes against the basic definition of what insurance is supposed to be. All of us pay premiums so that when we are older or become infirm, we won’t get financially destroyed. That is how insurance works. Why is someone messing around with that? If your company can’t make this work, then something is fundamentally wrong with your insurance program or how you treat your employees. The root cause isn’t to be blamed on the employees…’s the company’s policies that are causing poor health.

    KC, perhaps you better stay with the content you are familiar with and stay out of politics regarding health care reform. Or perhaps you are just stroking the president of a company.

    Rather than quoting some corporate president in the Wall Street Journal, who has a predictable agenda, perhaps you had best poll those employees on the other side of the fence who got old or had a heart attack only to be let go by a greedy employer who views employees as some kind of raw commodity. I think you will get a remarkably different opinion that will never get equal time in the Wall Street Journal.

    Interesting email from MNB user Glenn Harmon:

    iPhones, KillerApps, Kindles… I was thinking about innovation after reading your column and receiving an e-mail from Barnes & Noble on the new books they are carrying… In all my retail career, I have always believed that if a retailer loses a customer, they probably have a chance to win them back if they can find the right approach and get their act together.

    However with Barnes & Noble, their playing field with me changed forever the day I bought a Kindle. Each person who buys a Kindle is a customer they lose forever. It’s a scary thing. They did nothing wrong. I liked their stores. I enjoyed browsing their books. They just outlived my use for them, and now I have no reason to ever go back. Just like a light switch. How many other light switches are just waiting to be turned off?


    Coincidentally, I was in a Barnes & Noble over the weekend for the first time in months, because Mrs. Content Guy – a third grade teacher – wanted to get presents for her room mothers. (I told her she should have given me a couple of days’ notice and I would have bought them at a discount on Amazon…and she suggested that I should stop nagging her. She was persuasive.)

    Anyway, she got a couple of books and went to the counter to pay. She handed the cashier her teacher’s discount card, paid for the books, and then asked if they would wrap them. The cashier gave her a hard time, saying that if she was getting a teacher’s discount for the books then the books shouldn't be wrapped because they’re supposed to be for the classroom.

    Now, this technically may have been correct. But if I’d been standing there at the transaction point, I would have pointed out that Barnes & Noble should count itself lucky that a) a customer was in its store buying books instead of doing so online, and b) a customer was buying a physical book rather than downloading one onto a Kindle or other e-book reader. Barnes & Noble is heavily invested in what I believe is a soon-to-be obsolete business model; it ought to be saying “what else can I do for you” rather than “why should I do this for you.”

    On a similar subject, I wrote yesterday that “long tail virtual retailing has a much longer prospective life span than the likes of Toys R Us, in my humble opinion; then again, maybe I’m prejudiced because I’d rather visit the proctologist than a Toys R Us.”

    Which led one MNB user to respond:

    I have shopped Amazon eBay etc, when necessary and it is convenient yet...there is no better sight than taking your three and four year old into a brightly lit store, stocked to the hilts with toys that they can touch, play with and stare at with amazement. Did your kids do the same when they were little? I couldn't because I did not have one close to me but man, those old Geoffrey commercials made we want to go. Now, I live near one and will happily take my boys there if they ask because the store hold a little bit of magic for them...and me.

    I hope that Toys R Us does not away for the sake of kids of all ages.

    Maybe I’m a bad father. But when we went to Toys R Us, we tried not to take the kids because there was nothing magical about it. Dirty and disorganized, sure.

    But magical? Not so much.

    Maybe they’ve improved…it has been years since I’ve been in one. And will be years before I go back.

    MNB reported yesterday on a Los Angeles Times story reporting that People For The Ethical Treatment of Animals (PETA) has found a new target – the guys at the Pike Place Fish Market in Seattle who throw fish back and forth as part of the street-theater that attracts tourists and consumers to a seafood nirvana.

    The guys at the fish market say they are bewildered by the charges, but PETA says that flying fish is cruel and disrespectful: “They argue that tourists would not be nearly so eager to snap photos if dead kittens or gutted lambs were sailing over their heads,” the Times wrote.

    My comment, in part:

    Not to sound callous, but I’m not a cat guy…so the whole flying dead kitten thing doesn’t offend me so much.

    (Okay, that was a little callous. It also was a little joke. Some will say very, very little. But I couldn’t help myself.)

    There’s a point up to which I find PETA’s ambitions to be honorable, even noble. Animals should not be treated cruelly, even as they are prepared for slaughter. I get that. Any thinking, feeling human being gets that.

    But these fish are dead. So it isn’t like there is any cruelty involved. And when you think about it, the act of cutting open a fish, de-boning it, cooking it and then eating it (preferably with a little of Emeril’s Essence or the appropriate Tom Douglas rub used in its preparation, accompanied by a nice white wine) is a lot more cruel…Except that, of course, the fish is dead. And food. Which makes the whole cruelty thing kind of moot.

    Of course, this isn’t really about not throwing fish or kittens. This is about pursuing an agenda that wants people to live a completely vegetarian lifestyle…which, while I respect that choice when other people make it, isn’t something I need or want to be lectured about. And I don’t think that this makes me, or any of the millions of people who agree with me, evil or callous or cruel.

    MNB user John Morgan responded:

    I'm not a fish guy, so I concur with your thoughts on Pike Place Market. However, I am a cat guy, and I predict you're going to see a VERY full mailbox regarding your "little joke." Good luck!

    Actually, while I got a lot of email…there was almost no reaction to my little joke...other than people who wanted to top me. For example, one MNB user wrote:

    Unlike yourself KC, I like cats. I have several in my freezer right now.

    But on a more serious note…

    Another MNB user wrote:

    When I first saw salmon being thrown through the air at Pike Place, I thought it was a celebration of their glorious lives. The fish are thrown in such a way that they look like they are leaping the rapids. Life can’t be honored without reference to death, and vice versa.

    MNB user John Giggy wrote:

    I wonder if the folks from PETA worry about the dead dinosaurs when they fill their cars with gas or the bugs that smashed into their windshields as they drove to their last meeting. I also am for the humane treatment of animals but these people need to get real at some point.

    MNB user Connie Montgomery wrote:

    I am an animal lover and support many Animal Rescue and Humane societies.

    But I refuse to support PETA.

    PETA continues to get more bizarre in there "projects" and have gotten away from the real cruelty that is occurring. Animals being hoarded and without the means to feed them, fighting animals, dragging behind vehicles, dropping off bridges, and horses starving in captivity: these are all cruelty.

    Some animals are our food chain. Fish being one. (Cats are not--at least not in America). Such is life. Like you said, those fish in question are already dead. They have yet to prove that fish "feel" anything. My husband and I are avid fisher"men". We put fish on ice after catching, which is what the fishermen that catch the fish we eat do. This is the most humane way to kill a fish.

    PETA has had some good causes in their day, but in the last 20 years, they have gone off the deep end.

    Still another MNB user wrote:

    Does PETA have any regard for the feeling of the poor shark they jumped about a dozen press releases ago?

    It’s a shame that an organization that once did so much fine work to raise awareness about animal cruelty (clubbing of seals, abuse of pets, etc.) has, thru a combination of shrillness and a total lack of common sense, devolved into a punch line.

    Another MNB user wrote:

    I couldn't agree with you more. I respect people's decisions, until they decide to try to force them on me. Besides, there's an old saying on this topic; If god hadn't intended for man to eat animals and fish, he wouldn't have made them out of food. By the way, what type of wine would you suggest we serve with a nice broiled "sea kitten"?

    Maybe a nice Persian white.
    KC's View: