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    Published on: July 30, 2009

    Now available on iTunes…

    To hear Kevin Coupe’s weekly radio commentary, click on the “MNB Radio” icon on the left hand side of the home page, or just go to:

    Hi, I’m Kevin Coupe and this is MorningNewsBeat Radio, available on iTunes and brought to you this week by Webstop, experts in the art of retail website design.

    Last week, when announced that it was acquiring online shoe retailer Zappos, it also released an eight-minute video that featured founder and CEO Jeff Bezos offering a list of everything he knows about doing business after 15 years running Amazon. I’m not sure how many of you knew about it or had a chance to watch it, so let me break down the basics for you…with some addenda of my own.

    It is, he says, a short list…and he had it all on one simple handwritten flip chart. (So much for the rest of us who spend hours building dynamic animations on PowerPoint or Keynote. Leonardo da Vinci once said that “simplicity is the ultimate sophistication,” so by that measure, Bezos is incredibly sophisticated…which we sort of knew anyway from how he’s created a pioneering and highly successful business.)

    Number one: Obsess over customers. “When given the choice between obsessing over competitors or obsessing over customers, we always obsess over customers,” he says. “We like to start with customers and work backwards…if you truly obsess over customers, it will cover a lot of errors.”

    Now, my complete infatuation with Amazon has been well-documented here on MorningNewsBeat, and I know not all of you agree with me; in fact, one MorningNewsBeat user responded to the news that Amazon was buying Zappos with a note saying that this meant that she’d never shop Zappos again. But let’s face it – even though it is hardly a perfect system, Amazon does have a great reputation not just for customer service, but for delighting customers more often than not. A lot more often than not.

    Number two: Invent. “Anytime we have a problem, we never accept either/or thinking,” Bezos says. “We try to figure out a solution tat gets both things and that often requires invention…and you can invent your way out of any box if you believe if you can … it is not a customer’s job to invent for themselves … they won’t tell you everything, so you need to invent on their behalf.”

    I think the Kindle is a great example of inventing something that the customer wasn't shouting for…but that Amazon intuitively knew might find a marketplace. Sometimes, we can’t just read reports and surveys and figure put what people are asking for; we have to innovate on their behalf, even if it involves the risk of failure. Nothing ventured, nothing gained. The alternative is stagnation.

    Number three. Think long-term. Any company that wants to focus on customers and put customers first, any company that wants to invent on behalf of customers, has to be willing to think long-term. Bezos says that such thinking often won’t pay dividends for the company and its shareholders for five or seven years, though it may pay dividends for customers almost immediately; he also says that thinking long-term “requires…and allows...a willingness to be misunderstood.”

    This is probably why Amazon frustrates the stock market, which thrives on short-term plays. And a great example of this, I expect, is Amazon’s grocery business – it may not be an enormous factor in its business right now, but this is a strategic move that may well pay big dividends long-term.

    And, number four. “It’s always Day One,” Bezos says. “There’s always more invention in the future, always more customer innovation, new ways to obsess over customers.”

    I agree with this whole-heartedly. The best approach is the one that has the hunger of a start-up. You think smarter, you think faster, and you take more risks.

    What all these things add up to is the fact that Amazon – just like companies such as Apple and Costco and Trader Joe’s – specializes in being a disruptive influence in the marketplace. It takes assumptions about products and services and shoppers and turns them on their heads. And then does it again. And again.

    Sure, it’s a short list, and a simple one. But there’s a lot of wisdom there, and we all would be advised to learn his lessons well.

    For MorningNewsBeat Radio, I’m Kevin Coupe.
    KC's View:

    Published on: July 30, 2009

    The US House of Representatives failed to pass the Food Safety Enhancement Act of 2009 yesterday, with the legislation supported by a vote of 280-150 but falling four votes shy of the two-thirds majority that the rules required for passage. Had it passed and been signed into law by President Barack Obama, the bill would have allowed the US Food and Drug Administration (FDA) to mandate recalls of contaminated food as well as enforce tighter regulation of the nation’s food producers.

    Analysts say that the effective defeat of the measure shows that agricultural interests still exert significant lobbying muscle on Capitol Hill.

    It is expected that the bill will be reintroduced as supporters try to get it through Congress before the August recess.

    The Food Marketing Institute (FMI) responded quickly to the defeat, with president/CEO Leslie Sarasin saying that FMI was “disappointed the legislation did not pass as a result of the House rules process in place for this particular vote, which required approval by two-thirds of those voting. We would urge the House of Representatives to consider the bill under regular order, which requires a simple majority … We support the measure’s recognition of fully accredited third-party food safety certification programs and the need to develop traceability initiatives that build on industry efforts already underway.”
    KC's View:
    One can only hope.

    Published on: July 30, 2009

    The BBC reports this morning on a new study by the UK Food Standards Agency concluding that organic food is no healthier than so-called “ordinary food.”

    According to the story, “Researchers from the London School of Hygiene and Tropical Medicine looked at all the evidence on nutrition and health benefits from the past 50 years. Among the 55 of 162 studies that were included in the final analysis, there were a small number of differences in nutrition between organic and conventionally produced food but not large enough to be of any public health relevance, said study leader Dr Alan Dangour.

    “Overall the report, which is published in the American Journal of Clinical Nutrition, found no differences in most nutrients in organically or conventionally grown crops, including in vitamin C, calcium, and iron. The same was true for studies looking at meat, dairy and eggs.”
    KC's View:
    It seems to me that we’ve seen this movie before, and that it doesn’t make any more sense this time around.

    I’m not arguing the nutrient issue. But it is hard to fathom how products made without additives, preservatives, pesticides, insecticides or antibiotics can be said to have no health advantages over those that cannot make that claim.

    I will say this. I’ve seen this report publicized in a bunch of places this morning, and so it may be necessary for organic retailers and manufacturers to address it, to get aggressive about defining what they see as their differential advantages.

    Published on: July 30, 2009

    The Wall Street Journal suggests that supermarket chains that have aggressively lower prices and marketed around the core notion of value – such as Kroger and Ahold - seem to be performing better, with stronger same-store sales increases, than those that have been “slow to reduce their prices” – it singles out Supervalu and Safeway.

    According to the Journal, “In part, shoppers have been chasing bargains, visiting a variety of retailers and snatching up only low-priced goods. Now, about 1 in 3 shoppers buy exclusively items on sale, twice as many as 18 months ago, according to market research Information Resources Inc. As shoppers seek the best deals, retailers with low price reputations are posting strong same-store sales while other grocers are scrambling to find a new game plan.”
    KC's View:
    If you are going to look at these two specific retailers, I think it is fair to say that Safeway and Supervalu are very different cases. Safeway has bet its future on its Lifestyle format stores, which still strikes me as a good bet long-term even if presents some short-term problems during a recession. My impression, at least, is that Safeway is working to deal with any perception issues that may exist while not doing anything that will erode the brand equity it has built up in the format.

    At Supervalu, there is a different problem. People I talk to seem to suggest that Supervalu has a hodgepodge of banners where the whole may be less than the sum of the parts, because at least some of the banners don’t have a core value or values proposition that differentiate them in the minds of shoppers. That’s what new CEO Craig Herkert seems intent on finding and defining …and probably getting rid of the pieces that do not fit.

    Published on: July 30, 2009

    President Barack Obama visited a Bristol, Virginia, Kroger store yesterday, and while his primary mission there was to hold a town meeting with store employees about health care, the New York Times also reports that he snagged a peach on the way out and paid a Kroger executive a dollar for it.

    Part of Obama’s goal, according to reports, was to reassure employees with health insurance that nothing would change if they were happy with their coverage, and that the plans being debated are aimed largely at providing coverage for people without it.
    KC's View:

    Published on: July 30, 2009

    Clayton Christensen and Jason Hwang, the co-authors of "The Innovator's Prescription: A Disruptive Solution for Health Care,” have an interesting piece in the Wall Street Journal in which they suggests three options for senior executives looking to be pro-active in how they aggressively deal with high health care costs:

    1) “Encourage employees to use nurse-staffed in-store health clinics for common ailments.”

    2) “Partner with integrated health systems like Kaiser Permanente.”

    3) “Set up company-run clinics at corporate offices and plants.”

    By exercising greater control and providing employees with legitimate options, the authors suggest, companies can have a real impact on their own costs – and, by extension, the productivity of their workers. “Instead of continuing to outsource employee health to an utterly dysfunctional supplier, the best hope for rebuilding this nation's healthcare system is for our companies and business leaders to take a more proactive role,” they write.
    KC's View:

    Published on: July 30, 2009

    There’s a nice piece in the Boston Globe illustrating the passion that at least some folks feel for their local food retailer. In Chatham, Massachusetts, one of the nicest towns on Cape Cod, residents are fighting the decision by a local landlord not to renew the lease of the independent Chatham Village Market, the only grocer in town, and instead bring in a CVS.

    “In Chatham and elsewhere on the Cape, some residents believe they face a choice: Fight, or let the place they treasure slip away. What many fear is the arrival of fast-food chains, box stores, and strip malls that have sprawled across some parts of the Cape, especially Route 28 as it runs through Hyannis on its way to Chatham … Supporters of the market say its small size and personal service recall a time before big chains, and its location, walking distance from senior and affordable housing, makes it essential. The owners - four former A&P employees who took over when the chain pulled out six years ago - work the aisles beside shoppers and greet them by name. They take orders by phone for delivery and stock the coolers with $6.99 reheatable dinners.”
    KC's View:
    Chatham always has been one of my favorite places on Cape Cod, and I am highly sympathetic to the local reaction. Speaking purely as a consumer here, I think this is where citizens have every right to flex their muscles to fight such changes.

    After all, big companies and industries think nothing of lobbying on their own behalf…why shouldn't individual citizens do the same?

    Not that this is necessarily a popular opinion in the business community.

    Published on: July 30, 2009

    Crain’s Chicago Business reports that “hundreds of Wal-Mart supporters rallied Wednesday morning across the street from City Hall as members of a City Council committee tossed around a controversial plan that would pave the way for the retailer’s second outpost in the city. The City Council Finance Committee is expected to consider an amendment, introduced by Alderman Howard Brookins Jr. (21st) in April, that would alter a development proposal to allow Wal-Mart Stores Inc. to build a store at 83rd Street and Stewart Avenue.”

    Meanwhile, the Chicago Tribune reports that the City Council committee considering the plan for a South Side Walmart has effectively delayed any decision by kicking it over to the Finance Committee…where there are no plans as yet to hold a hearing on the matter. Brookins said that that the delay would only cost the city needed jobs, and decried the procedural move.

    Walmart only has one store open in the city, opened in 2006; it has long been fighting to open a second store, but is opposed by organized labor interests that are so influential in the Windy City.

    Dow Jones reports that Walmart Canada is suing the United Food and Commercial Workers (UFCW) over the union’s use of trademarked company logos and slogans on its website, where the UFCW is trying to organize some of the retailer’s employees.
    KC's View:

    Published on: July 30, 2009

    Press reports in the UK note that Tesco has begun selling live chickens and egg-laying hens at its Dobbies Garden Centres. The retailer reportedly has noticed that as consumers look to save money during the recession, they are investing in items such as seeds so they can grow their own fruits and vegetables…and that this was a natural extension.
    KC's View:
    So you think they were tossing around the “which should come first, the chicken or the egg” question around Tesco HQ, and decided to go with both?

    Published on: July 30, 2009

    The Wall Street Journal reports that while President Obama intends to cool racial tensions this evening by bringing together Henry Louis Gates Jr., the Harvard professor and race-relations expert, and James Crowley, the police sergeant who controversially arrested him in his own home last week, there is one constituency that is unhappy.

    American brewers.

    You see, President Obama invited the two men over for a beer and promised to serve them their favorites. Gates likes Red Stripe, Crowley likes Blue Moon, and the commander in chief will have a Bud Light.

    The problem, according to the Journal, “is that all three beers are products of foreign companies. Red Stripe is brewed by London-based Diageo PLC. Blue Moon is sold by a joint venture in which London-based SABMiller has a majority stake. And Bud Light? It is made by Anheuser-Busch -- which is now known as Anheuser-Busch InBev NV after getting bought last year by a giant Belgian-Brazilian company.”

    And so questions are being raised. How come no Samuel Adams? Why not Sierra Nevada? What about some Genesee Cream Ale?

    Of course, objections also are being raised by members of the nation’s temperance movement, who believe that the White House ought to be serving non-alcoholic drinks.
    KC's View:
    While I get the American brewers’ point – and certainly think they are right to make it – I just think there is something very human about inviting these guys over for a beer to see if they can work out their issues. The fact that we are in anything but a post-racial society has become very clear over the past week, and so whatever is done to promote needed conversations strikes me as a good thing.

    Published on: July 30, 2009

    • The Wall Street Journal reports that “Kohlberg Kravis Roberts & Co. is in advanced preparations for an initial public offering of stock in Dollar General Corp.” According to the story, the recession has been kind to Dollar General, and KKR is looking to highlight the discount retailer as a bright spot in its own portfolio of operations.

    • In Illinois, the Daily Herald reports that Supervalu-owned Jewel-Osco “has opened its first Physicians Prompt Care Express, a physician-staffed clinic, at one of its stores in South suburban Orland Park. If successful, more such clinics could open and vie for the quick-access medical market now available at competitor Deerfield-based Walgreen Co.”
    KC's View:

    Published on: July 30, 2009

    • Price Chopper Supermarkets/Golub Corporation announced that Joe Brousseau, the company’s Manager of Construction, has been promoted to the position of Director of Construction.
    KC's View:

    Published on: July 30, 2009

    MNB took note yesterday of a Forbes report that a compelling argument is being made in some Washington corridors for a “fat tax” that would both raise needed revenue for the government and promote greater wellness among US citizens.

    My comment: The general consensus seems to be that taxes are going to be raised…and that Congress is seeking the most politically palatable way to generate more revenue without its members losing their jobs.

    There are ways in which I think that people who don't take care of themselves can and should be penalized; I do believe, for example, that people who behave irresponsibly in terms of their own health ought to pay more for health insurance…just like people who are lousy drivers pay more for auto insurance.

    But you can't just heap all of these taxes and fees on people ad infinitum … Eventually, the system will break down.

    Lots of reaction to this.

    One MNB user wrote:

    Sorry to disagree, but I think your opinion is short-sighted and groups heavy people into one bucket. It does not take into account people with metabolic issues creating weight gain and preventing weight loss in spite of living a healthy lifestyle. Not everyone who is heavy is in that situation because they "..don't take care of themselves...". In fact, there are technically 'obese' people out here who are quite healthy! While I don't dispute that I fall into the minority, I think BMI charts which label people, need work (in addition to judgmental people assuming someone fat is lazy....).

    BMI charts do not take a person's bone structure into consideration; only their height/weight is considered. For someone short (like myself) wearing a size 8/10 is actually considered obese - are you kidding me???? Not everyone wants to be a size 2!!!! Oh, and for the record, this technically "obese" person works out 3-5 times a week, eats healthy and does not consume more than 1,500 calories a day (and that's on the high side for me), go figure! The only time I have not been classified as "obese" is when, as a teenager; starved myself to stay thin and worked out 4+ hours a day (competitive skating). Sorry, but that's not the real world!!!

    Now, my problem with thinking like the opinion expressed below - according to you, someone like me who is classified as 'obese' by the medical experts, must not be taking care of myself and should be taxed more for foods, should pay higher health insurance premiums (in spite of never smoking I might add) and other things people haven't even thought of yet, all because I don't fit the mold of "healthy"...... Do you not see the flaw in this thought process???

    Regarding taxing foods - have you ever noticed that fat food is cheap while traditionally 'healthy' foods cost more? As a single mom for many years on an impossibly tight budget, I was forced to buy higher fat foods just to keep food on the table. Today personally, is a different matter but the problem remains as people are cash strapped in a tight economy. Now, they're proposing to tax what has been a cheaper food alternative??? It makes me wonder, what ARE they thinking and do they live in the real world? Costing people more money is not going to fix the problem, what we need is better nutritional education to the general public.

    Another MNB user offered:

    Normally, I don't usually make comments regarding your column, however today I am disappointed by your view that those "who don't take care of themselves can and should be penalized". This comment particularly struck a negative chord with me. Although exercise and proper diet are something that many of us strive to achieve, unfortunately at times life gets in the way of the best of intentions. I am not severely obese, however I am not a size 2 either. I have always been this way since I was a kid and even though I have tried dieting and exercise it doesn't come as easily as you suggest.

    I feel that you are jumping on the never ending bandwagon that is finding new and creative ways to discriminate against Americans. Using your logic to a similar extent would be to penalize those who "choose" to have children. I'm single so therefore why should I have to pay taxes towards the education and welfare of children? Should you tax those who have a genetic disposition for cancer? Should we tax those who enjoy an occasional spirit? Should we tax those who are accident prone? Sounds absurd doesn't it?

    As you can see by picking one group to alienate or "penalize", you're in fact finding new and innovative ways to discriminate against others. As an HR professional I don't believe it is our place, nor governments' to dictate to others how they should live their lives.

    Extreme governmental oversight leads to the loss of the freedoms and liberties that we all enjoy. Although it seems like something small in a tax for fat foods, the reality however, is that it is the loss of several small liberties over time that lead to discrimination, higher costs, less choice, and a less enjoyable life for all. We are not meant to judge the personal lives of others but to be tolerant of diverse people, ideas, habits, and more.

    MNB user Mike Jadrich wrote:

    A friend of mine (under the age of 55) who is a regular runner, lean and healthy told me he is going in for hip replacement surgery in a couple of weeks. Apparently his exercise routine has caused the degeneration of his hip. This is also a cost to the health care system. Will the government tax exercise next? Albeit I’m being cynical, but where does it all stop?

    And another MNB user wrote:

    While I agree health care costs need to be addressed from a societal perspective, government intervention will not make the situation better it will just create another avenue of special interests and handshakes which seldom are good for the country. On another note, this is America; you are free to live your life as you choose. If your choice is an unhealthy lifestyle then the individual must accept accountability for the consequences both good and bad.

    The real crux of the matter is that we are fast becoming a society where everything bad that happens is someone else’s fault. At the end of the day if we allow government to dictate what we eat and drink by applying more taxes to what they consider unhealthy, then we are truly moving towards the Orwellian experience.

    Another MNB user wrote:

    Full disclosure…I support and feel the only real long-term solution to affordable health insurance is a single payer system. However the term affordable health insurance is not the same as affordable health care. Health care and health insurance are diametrically opposing terms.

    I don’t care for higher taxes or larger government, but, the food industry is a very large piece of the health in America issue. And, I don’t feel that those people that need health care the most should pay the most, while at the same time I feel personal responsibility(or irresponsibility) is another very large piece of the American health issue.

    There are so many conflicting agendas in the health care / health insurance debate…that nothing good will get done…but something will get done.

    I have no solutions and don’t care for any that have been offered so far…but continue to support President Obama…but feel so disappointed that he made this issue his bellwether issue for success.

    Still another MNB user chimed in:

    Sounds too much like George Orwell’s “1984.” The government is already too much in our business and now they want to interfere in the things we enjoy. It’s like they want an entire nation of the same “clones”… all thin, attractive, health conscious, with the belief that the government is there to help. And if you don’t fit into the stereotype of this model, you will be taxed until you do. Eventually, they will tell us that we are living long, health conscious lives and there are too many of us, so we should give in to the greater good. Ever heard of “Soylent Green”?

    But MNB user Maggie Solberg wrote:

    This is long overdue. It goes along with posting the calories of fast food. First they put the warnings on the cigarette packs, then they raised the tax on the cigarettes…. Same plan.

    KC, overweight people are infringing on others space (take airplane seats or stadium seats for example) just as smokers did with 2nd hand smoke. …Had to quit smoking in planes, at football games and in restaurants. No difference. And much more money is spent on health care due to obesity and lack of exercise than years of smoking combined.

    One MNB user wrote:

    I certainly agree with you on this. Not only can we not continue adding taxes, we have to stop adding government programs. Everything they add cost tax payers more. Every existing program wants an increase in their budget, new programs are being started, and the tax base is shrinking. They are forced to come up with new ways to raise tax revenue without “raising taxes”. Any way you paint, adding fat tax, sin tax, call it what you will a tax is a tax.

    MNB user Tom Gillpatrick wrote:

    I have not read any of detail of "Fat tax" proposals, but if it could raise $522 billion over ten years it must be a pretty broad tax since total U.S. food sales are about one trillion at retail (retail + food service) annually. So 10% tax that raises about $50 billion per year (not including inflation) is taxing about 50% of food sold in the U.S.? If its 50% of food, impact on poor?

    Would this tax be both for food service & institutional sales along with retail? How does food qualify for this tax? I need to find out more, I am surprised more folks are not upset at this idea.

    I was sort of under the impression that they are.

    On another subject, MNB user Phil Censky wrote in about yesterday’s Kate’s BlogBeat:

    Nice article today. I have a recent Facebook anecdote that, while not on the scale of a Whole Foods or even Nutella, demonstrates the power of social media engagement.

    A Phoenix-area restaurant, Tarbell's (run by Iron Chef-winning Mark Tarbell), recently ran a Facebook contest to drum up excitement for an upcoming theme dinner. The contest featured a photo-reveal of a new menu item. Pieces of the photo were gradually added until someone could name the 3 featured ingredients of the dish. For the record I won, having selected clams, fennel and andouille sausage.

    Contrast that with the "online marketing" of some major companies that can best be described as the "Field of Dreams" strategy...if you build it, they will come.

    It's about the engagement, not about the presence!

    You got that right.

    I love emails like the following, from MNB user Cindy Sorensen:

    I want to tell you a story about exemplary customer service which I recently witnessed. It took place in the waiting area of gate A2 in the St. Louis airport Tuesday afternoon, as I waited to board my flight back home to Minneapolis. As I waited for my storm delayed flight to board, I was privileged to overhear the hawking of the shoe shine stand operator located directly next to this gate. He hawked his services as potential customers walked by. Most walked right by him, never acknowledging his presence. On this particular day, there happened to be many military service men and women in the airport. Every time one of these selfless military personnel walked by, he personally thanked them for their service to our country and offered to shine and buff their boots for free. I was privileged to sit and listen to this man engage in conversation with those military personnel who took him up on his offer. He asked them questions about home, their families, where they were headed to and most importantly he expressed genuine care for them and wished them safe travels as they left his stand. He would not accept payment or tips from these military people.

    Many heads from the gate area were turned in the direction of this kind, caring gentleman, watching, and listening to his every word of encouragement and support to these military customers. He offered what he could, did it with a smile and was appreciative for what these people gave of their time and service for all of us. It was truly a privilege to watch.

    Thanks for sharing.

    Got the following response to Michael Sansolo’s column this week about the delights of SpongeBob SquarePants (I can't even believe I just wrote that sentence):

    You can count me in as one of the readers that enjoyed the correlation you made between Oprah's 10-second kiss and business.

    However, I completely disagree with your take on SpongeBob. Not that it isn't funny (it is).... for adults ... to me, it is closer to Family Guy than Tom and Jerry.

    You've got SpongeBob working at Krusty Crab in Bikini Bottom.

    You have SpongeBob always bullying Patrick ... making fun of him for being dumb. Several of the story lines are ones that I don't want my 9, 7, and 3 year old watching. So they aren't allowed to watch it.

    It's rude, and it's crass and it's offensive. Funny for me, inappropriate for my kids.

    So my correlation between this and business ... just because something is funny and successful overall, be cognizant of other points-of-view. It may not be appropriate for all your customers, and while you need to market to the masses, don't completely discount a niche.

    I get your point.

    I would respond (and this is me talking, not Michael) that when retailers or manufacturers get too concerned about too many points of view, it often results in lowest common denominator retailing or products. I’d rather err on the side of being too edgy, because I think that consumers (and even young television viewers) tend to be more sophisticated than we give them credit for.

    It’s funny. When my kids were little, I wouldn’t let them watch “The Simpsons” because I thought it was inappropriate. But now that I’m older, I sort of thin I was being too protective. Sure, “The Simpsons” was a little disruptive and subversive…but I didn’t give my kids enough credit. Besides, they didn’t need “The Simpsons” to learn to be subversive or irreverent…they had their old man. (

    In the end, it is all a matter of taste. For example, I have no intention, now or ever, of watching an episode of “SpongeBob SquarePants.” Life is too short.
    KC's View: