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    Published on: July 28, 2009

    by Michael Sansolo

    Living as we do in a world of choices, the only way any business can survive is to build a point of difference that matters to customers and constantly reinforces that difference in actions and words. That’s a fairly simple statement, but delivery is anything but.

    We here at MorningNewsBeat share that challenge and live with our simple truth: while we don’t run a retail, wholesale or manufacturing company, we do run a business with more sources of competition for your time than you can imagine. Every day (for Kevin), every week (for me) we have to give you a reason to come back.

    Which brings me to the 10-second kiss.

    Last week, I wrote about an episode of “Oprah” that focused, among other things, on how couples could reignite their relationships by exchanging a 10-second long kiss each day. I suggested that business might want to think along the same lines, trying to find something small to do each day to win the hearts of customers time and time again.

    I think I hit a nerve.

    In fact, I have never gotten so many e-mails about anything I’ve written or said in a speech and, incredibly, every one of them was positive. As one reader so beautifully put it, that article was a clear demonstration of why she reads MNB daily. Because we try to give something beyond just the story; we try to give perspective, context and, frequently, the unexpected.

    In short, it’s our selling proposition that we cannot ever forget.

    And that got me thinking of “SpongeBob SquarePants.” Now the simple truth is that many more of you actually know about SpongeBob than might admit it publicly; and everyone who doesn’t is at a loss.

    SpongeBob is a cartoon on Nickelodeon that follows the silly adventures of a walking talking kitchen sponge and his friends and neighbors in the underwater town of Bikini Bottom. There’s his dimwitted friend Patrick, his cranky neighbor Squidward and Mr. Krabs, the extremely frugal boss of the fast food restaurant where SpongeBob cooks. There’s so much more that goes beyond description and quite honestly the goofiness of SpongeBob really doesn’t lend itself to any kind of business lesson…except it does.

    “SpongeBob SquarePants” just celebrated its 10th year on the air, which is no small achievement for any kind of television show. More shockingly, it is one of the highest rated cable shows ever and has grown into a global phenomena. The show is seen in 51 countries around the globe, meaning the kids in Israel and some Arab countries; India and Pakistan; China and Taiwan (I think you get the point) are all giggling to same stories. The United Nations should have such luck.

    But if you watch it, you’ll notice a couple of thing. First, it isn’t a very high tech cartoon. The backgrounds are very simple as is the character animation. Rather than relying on technology, “SpongeBob” succeeds by offering up simple story lines that are incredibly funny for both kids and adults.

    Most importantly, every episode you watch delivers on the same basic promise: It’s guaranteed to make you laugh with delight.

    In short, “SpongeBob” delivers that 10-second kiss. Every show is filled with energy and zaniness, as though it were the first of the series. Every story is filled with small delights to keep to watching all the way through. And by holding to that standard episode after episode, the creators of this little cartoon gem have turned a silly premise for a show into a marketing powerhouse.

    Simply by delivering a delight each and every time.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .
    KC's View:
    Another, tangential business lesson, if I may…

    One of the important things in any business is different perspectives. Which is why it is a good thing, I think, that here at MNB we have a situation where Michael watches “Oprah” and “SpongeBob SquarePants,” and I watch ‘”Burn Notice” and “24.” But it’s also important to have areas of commonality …we both watch the Mets and “Star Trek.”

    Published on: July 28, 2009

    In Virginia, the Bristol Herald Courier reports that Wednesday is the big day for 87 employees at a Kroger store there, as they are scheduled to engage with President Barack Obama in a town hall-style meeting about health care.

    The store is scheduled to be closed during the president’s visit. There is no specific information about why the Kroger store was chosen by the White House.

    The paper notes that in preparation for the meeting, Kroger has been giving the store a bit of makeover – scrubbing the floors, painting the front awning, and giving staffers new name tags.
    KC's View:
    The store manager has been quoted as saying that most of the store’s employees have some sort of health insurance coverage through Kroger, so it will be interesting to see where the conversation goes.

    I have to be honest about this – I am completely confused by the health care debate. While it seems evident to me that something has to be done about costs that are spiraling out of control and a system that often can be inefficient at best and dysfunctional at worst (we have some recent experience with this), I cannot shake the feeling that political considerations on both sides of the aisle are shaping the legislation rather than a clear-eyed view of what will make a good system better.

    Published on: July 28, 2009

    The Long Island Press reports that Fairway Market has gotten permission from the New York City Board of Standards and Appeals to open a store in Douglaston, Queens – its first store in that borough, and one that is expected also to serve customers from western Nassau County on Long Island.

    Fairway currently operates five stores – two in Manhattan, one on Long Island, one in Brooklyn and one in New Jersey. The company has been in expansionist mode lately – in addition to the Queens store, it also plans to open one in New York’s Westchester County and another in Stamford, Connecticut.
    KC's View:
    Fairway is a terrific operation, and I for one am thrilled that they plan to open one in Connecticut. The only challenge will be to assure that a specific and healthy corporate culture remains intact and vital even as the company grows…and that is harder and harder to do the bigger a company grows.

    On the other hand, the folks at Fairway seem like they are focused on the task at hand and aware of the challenges…and so there is no reason to think they cannot make it work.

    Published on: July 28, 2009

    Sprouts Farmers Market said yesterday that on Friday it will open its first mall location in Orange, California – the company’s 10th store in California and 27th overall.

    The store is described thus: “Aisles of colorful produce, many from local growers and farmers whom we know and trust, along with an outstanding selection of all natural meats, fresh-off-the-boat seafood and a wonderful variety of grocery, bulk and bakery items, all come together to create the ultimate farmers market experience.”

    The retailer, which promotes itself as offering “right-from-the-earth foods at down-to-earth prices,” has another two California openings – in Huntington Beach and San Diego – scheduled for next year.
    KC's View:

    Published on: July 28, 2009

    The Orlando Business Journal reports that Publix Super Markets has acquired 119 acres of land just north of the Orlando International Airport for $13.5 million, which it plans to use for a new 970,000 square foot distribution center.

    Publix is not offering any details about its plans for the site.
    KC's View:

    Published on: July 28, 2009

    There have been more than 43,000 reported cases of swine flu (H1N1) in the US and 302 deaths, according to up-to-date data reported by the Centers for Disease Control and Prevention (CDC) on its website.

    And, the CDC writes: “In the United States, significant novel H1N1 illness has continued into the summer, with localized and in some cases intense outbreaks occurring. The United States continues to report the largest number of novel H1N1 cases of any country worldwide, however, most people who have become ill have recovered without requiring medical treatment.

    “Given ongoing novel H1N1 activity to date, CDC anticipates that there will be more cases, more hospitalizations and more deaths associated with this pandemic in the United States over the summer and into the fall and winter. The novel H1N1 virus, in conjunction with regular seasonal influenza viruses, poses the potential to cause significant illness with associated hospitalizations and deaths during the U.S. influenza season.”

    There has been some speculation by the CDC that as many as 40 percent of Americans could contract the swine flu, unless an effective vaccine campaign is implemented; some 160 million doses of an effective flu vaccine are expected to be ready by October.
    KC's View:

    Published on: July 28, 2009

    The Toronto Globe and Mail reports that Loblaw Cos. will spend the equivalent of about $208 million (US) to acquire T&T Supermarkets, Canada’s largest Asian food retailer. Loblaws reportedly plans to run the 17-store company, which has stores in Ontario, Alberta and British Columbia, as a separate division.

    Allan Leighton, president of Loblaw, said during an analysts' conference call that “the ethnic market opportunity in Canada is vast. Today we have a relatively small share. Our objective is to be the No. 1 player. T&T gives us the platform to build to this objective.”
    KC's View:

    Published on: July 28, 2009

    • Supervalu Inc. said this morning that its first quarter sales were $12.7 billion, down from $13.3 billion during the same period a year ago, and net earnings of $113 million, down from $162 million a year ago.

    According to the company press release, “First quarter retail food net sales were $9.9 billion compared to $10.3 billion last year, a decrease of 4.3 percent, primarily reflecting the impact of identical store sales of negative 3.2 percent and previously announced store closures. The identical store sales performance primarily results from a challenging economic environment, heightened competitive activity and additional investments in price and promotions … First quarter supply chain services net sales were $2.8 billion compared to $3.0 billion last year, a decrease of 6.2 percent, primarily reflecting the on going transition of Target Corporation volume to self-distribution.”

    • Royal Ahold reports this morning that its second quarter revenue was the equivalent of $9.17 billion (US), up from $8.2 billion (US) during the same period a year ago.

    The company said that same-store sales in its US divisions were up 1.7 percent at Stop & Shop, up 3.7 percent at Giant of Landover, and down 1.8 percent at Giant of Carlisle.

    • Nash Finch said this morning that its second quarter net income was up 1.1 percent to $9.5 million. Q2 sales were up to $1.22 billion, from $1.02 billion during the same period a year ago. Same-store sales, according to the company, were up 1.9 percent, excluding an acquisition and the shift of Easter to the second quarter in 2009 from the first quarter in 2008.
    KC's View:

    Published on: July 28, 2009

    Yesterday, MNB reported on a Los Angeles Times story saying that a lawsuit has been filed by a New Jersey man, supported by the Center for Science in the Public Interest (CSPI), charging that the restaurant chain Denny’s serves meals that are “dangerously high in sodium” that puts "the restaurant chain's customers at greater risk of high blood pressure, heart attack and stroke." The suit seeks to force Denny’s to both list the sodium content for all of its menu items as well as warn patrons about the health hazards of consuming so much sodium.

    One example cited by the Times: “Doctors recommend against eating more than 2,300 milligrams of sodium a day. Order a Denny's double cheeseburger and you'll consume 3,880 milligrams in one sitting.”

    Denny’s has responded to the suit by saying it is "frivolous and without merit,” and that it offers plenty of options for people with specific dietary needs.

    My comment: No idea here whether this lawsuit will be successful, but Denny’s ought to be paying closer attention to how these things tend to develop in 2009. Management there can go into denial mode and talk about frivolous lawsuits, but that doesn’t change the fact that these charges will take on a viral nature…and Denny’s will look like it is both 1) unresponsive to current health/nutrition trends and 2) non transparent in its dealings. And, eventually, they’ll have to list sodium content on their menus.

    MNB user John E. Stiles wrote:

    Sounds like the lady that ordered coffee at McDonalds then complains that it’s too hot or people that smoke who then sue the tobacco companies. I have eaten at Denny’s, they have plenty of healthy alternatives on their menu. Your opinion blows my mind, people need take responsibility for their decisions. If someone has high blood pressure then DO NOT ORDER something that normally has high sodium levels. If a person is overweight and wanting to lose weight DO NOT EAT that donut.

    Give me a break KC, why not just tell the guy to TAKE RESPONSIBILITY for your actions.


    Actually, if you read what I wrote, I never suggested that the guy should win his lawsuit. In fact, I said I had no idea how it would turn out. And I agree that people ought to take personal responsibility for what they eat and how they behave.

    However…

    I do believe that we live in an environment where a higher level of transparency is demanded by customers…and if customers demand it, retailers ought to deliver on it. If Denny’s says how much salt is in that cheeseburger and someone with high blood pressure then eats it and has a stroke in the parking lot, that does not strike me as Denny’s fault. But doesn’t 3,880 milligrams in a double cheeseburger sound a little high?

    I know that I’ve changed my choices on those occasions when I’ve gone into fast food restaurants in NYC, where calorie counts on the menu boards are required – simply because coming face to face with cold numerical reality serves as a wake up call. Somehow, I can’t get my head around the idea that this is a bad thing.

    MNB user Steven Ritchey seems to have the right idea, in my view:

    I don’t frequent Denny’s, in fact I can’t remember the last time I ate in one. But, I know and I think most of us do know that a double cheeseburger isn’t going to be good for you on several levels. Just like the bacon cheeseburger I ate Friday night. I knew it wasn’t good for me in several ways, cholesterol, sodium, fat content weren’t particularly healthy I’m sure, to name a few things, I did it because it sounded good and it was good.

    I can see putting nutritional information on menus, but I happen to agree with Denny’s about the lawsuit. I know the food isn’t good for me, all the nutritional information does is quantity in stark numbers how bad it is for me.


    Precisely.

    And the bigger issue remains that in a transparent society, any company that looks like it is anything less ends up looking like it is hiding something. And that isn’t smart marketing, in my view.




    MNB had a story yesterday about more private label sales in the organic segment, which led one MNB user to write:

    So your story today says consumers will buy more organics when the price is reasonable - welcome to the blatantly obvious! I have said for years (within my local circle) the company that figures out how to sell reasonably priced organics it going to kick everybody's butt in the grocery business.

    Hey, it takes a special talent to be a master of the blatantly obvious.

    But actually the story wasn’t just about sales of low-priced organics…it was about the emergence of more private label items in the category. Which if it seems obvious and inevitable, is something of a new development…or at least enough so that the Wall Street Journal took note of it.

    MNB user Frederic Arnal wrote:

    I was part of the development and launch of Topco Associates' (with our Daymon Associates partners) Full Circle brand in the late 1990's. At that time, there was no national brand equivalent to play off as a value alternative so we positioned it as desirable in its own right... "a return to a natural way of eating".

    It was designed to meet a growing consumer desire for food products that were free from artificial ingredients, pesticides, excessive processing and was responsibly grown.

    From what I see in the marketplace, Full Circle is still meeting that challenge today.





    MNB took note yesterday of a USA Today report that Unilever plans to announce today that it plans to remove trans fats from all its soft-spread brands. Which led one MNB user to write:

    Unilever doesn't benefit with news that it has (finally) decided to remove trans fats from its products. Trans fat removal is kinda ancient history now. Where have these folks been to be so late in the cleanup game? This news is counterproductive for them - if anything, I am struck instead with an image that they care little about the health of consumers and, it seems, that they don't read much either.

    That’s pretty much what Mrs. Content Guy’s reaction was. It wasn't my first response, but this may be widespread enough (pun intended) that Unilever should pay attention.




    We wrote yesterday that the apparent success of Whole Foods’ decision to give low interest loans to small and local businesses that are in synch with its mission, which prompted one MNB user to write:

    KC, this obsession with Whole Foods is very obvious. I really do not see how you can say the decisions they make will be genius years from now when every decision they are making someone is already doing. WF does nothing for the consumer that is not already being done and that will not promote them. Banning plastic bags was not a smart move, there are now people shopping Central Market instead of their store. They are losing the numbers game, their prices are through the roof, the average Joe cannot afford to shop there…..point being… I will be surprised to see Whole Foods in its current format even in business years from now. They do not know how to compete and the smaller yet more in-tune chains are taking advantage.

    Fair enough. You could be right.




    MNB wrote yesterday about the NY Mets winning two out of three games from the Houston Astros, and joked that we’d been unable to confirm reports of pigs flying over Minute Maid Park.

    Which led MNB user Kevin McKamey to write:

    Yes, the rumor is true. Pigs were flying around Minute Maid Park over the weekend. Hopefully they will stick around long enough for the Astros to beat the Cubs three out of three this week!

    Just FYI…the Cubs beat the Astros last night 5-1, as Alfonso Soriano delivered a walk-off grand slam home run in the 13th inning.

    On a sports issue we haven't written about, MNB user Carl D. Morley wrote:

    I am a faithful reader of Morning News Beat. I can tell you are a true baseball fan. I just had to address some disturbing news I heard this morning. Bud Selig is considering reinstating Pete Rose.

    I know this is a very divisive issue. While on statistics alone there is no doubt that Rose belongs in the Hall of Fame, and should be a part of baseball. But this is exactly a symptom of what is wrong with baseball and America. There is a saying that "As baseball goes, so goes America".

    Ball players and owners have always tried to get away with as much as they can. It has always been the responsibility of the Commissioner of Baseball to protect the integrity of the game. Commissioner Selig has functioned as an owner would have reacted. Whatever makes money for the game and the owners. The last Commissioner to functioned truly in that position was Bart Giamatti. He was the one who banned Pete Rose. I believe had he been Commissioner we would not have had the steroid era in baseball.

    I love the game of baseball, and as much as Pete Rose's statistics cry out for his
    inclusion in baseball, what's more important? I say the integrity of the game…


    I agree that Rose should be remain banned from the game,…and I’m perfectly happy to see MLB impose a ban on any player shown to be have used steroids. That may be illegal and draconian, but I’m okay with it.

    This raises another issue. The NFL has conditionally reinstated Michael Vick, who has emerged from prison after his conviction for running a dogfighting ring.

    They are different sports, but let’s consider the point. Should Vick be allowed to play in the NFL?

    My first response to this is that he has served his time and probably deserves a shot if he can find a team to hire him…but I don't want him on my team.

    But I’m at least a little uncomfortable with that position.
    KC's View: