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    Published on: August 4, 2009

    by Michael Sansolo

    The Internet is capable of great moments and, sadly, far less. Just as a Twitter fueled rebellion in Iran catches our admiration, there are moments when the limitations are almost too much to bear. For instance, my mother (as wise a woman as I have ever met) has a bad habit of passing on e-mail pronouncements on all types of health issues to our entire family. And 90 percent of the time I have to respond - very politely - that once again mom has passed on a widely debunked myth.

    It gets worse. My wife’s 87-year-old aunt has somehow taken to using Facebook. (Take that, teenagers!) Sadly, it doesn’t always work out well. For instance, we have no idea what she thinks LOL means, but it’s certainly not “laugh out loud.” (A recent note from this aunt: “sorry to hear that he needs surgery…LOL.” We’re hoping she means lots of love, but who knows.)

    For business, appropriate use of these new technologies is even more critical. Myths, legends, lies and more can float unfettered on the Internet for days, completely slipping by unnoticed unless companies actively seek them. But the picture is also two-sided. An aggrieved shopper now has an incredible device to strike back when customer service and more fails to satisfy.

    Luckily there are great examples, both good and bad, for companies to consider.

    The bad comes from the easiest industry to mock: the airlines. Recently, a singing group from Canada headed out to the US Midwest to play a concert on United Airlines. While sitting in their plane, the band members noticed a problem: on the tarmac the baggage handlers were playing a version of football with guitar cases. You can figure out where the story goes.

    When the band reached its destination the lead singer, Dave Carroll, wasn’t surprised to find his guitar was broken. He appealed to United for help, but received none. So in protest he wrote a music video: “United Breaks Guitars.” It’s a really well done video and one you can watch right now on Nearly 4.5 million people have already watched it and, not surprisingly, United has suddenly become helpful to Dave.

    It’s a painful lesson that the consumer no longer has to tolerate poor service and has a powerful weapon to fight back.

    But the Internet also can be our friend. In a very different example, consider the convenience store chain Wawa, which is currently in the middle of its Hogiefest promotion. Now Wawa does an outstanding job with its sandwich program and any retailer who believes kiosks don’t work needs to visit Wawa (or competitors Sheetz and Rutters) to see how well kiosks can perform.

    The story isn’t the kiosk though. During Hogiefest, Wawa invites customers to submit videos about their favorite sandwiches for a chance to win free sandwiches for a year and a role in commercial. Visit the company’s website to get a sense of what this contest produces, but the odds are very strong that “I love Wawa” (the second place original song) was much better received in corporate headquarters than “United Breaks Guitars.”

    And that, in a nutshell, is the new world. It’s about people communicating like never before; fact and fiction, anger and praise. In truth, there is only so much we can do about the anger, although the United video gives us a powerful reminder to pass throughout our companies that the tolerance for poor service is lower than ever. (Keep in mind that United was wrong in how it handled the luggage and dealt with the customer complaint – it deserved everything it got.)

    Then again, there is so much we can do along the lines of what Wawa is trying, opening up a new way to delighting, engaging and talking with our customers. There is so much we can do by finding ways to use YouTube, Twitter and Facebook to communicate to shoppers and associates and to help them communicate back.

    When you consider the two paths, this pro-active one seems like the easiest choice ever. LOL…right?

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

    Published on: August 4, 2009

    Weis Markets announced the launch of its “Local and Proud of It” campaign, highlighting what the company calls its “commitment to offering a wide variety of locally grown produce” – as much as 20 percent of total produce sales in-season.

    "For 97 years, we've purchased and sold local produce wherever we've operated stores," said Weis Markets President and CEO David J. Hepfinger. "This year, we expect to purchase 21 million pounds of local produce from nearly 150 local producers and co-ops in Pennsylvania, Maryland, New Jersey, New York and West Virginia.

    "In challenging economic times, offering local produce makes even more sense due to the lower costs of bringing it to market compared to other parts of the country and the world. Closer proximity to markets also lessens the environmental impact.”

    In other departments, Weis Markets said, it continues to expand its Pennsylvania Proud Angus Beef program, which it launched last year. In its dairy case, its Weis Quality milk is supplied by dairy farms in Pennsylvania and Maryland while most of the eggs it sells are supplied by Sauder Eggs in Lancaster County.
    KC's View:
    Weis has been very aggressive on the price front lately, announcing a series of price freezes meant to reassure customers that the company is on their side. At the same time, it is focusing on issues such as local sourcing – which is very important.

    It is key to work both sides of this aisle. Prices are important now, and perhaps for a long time to come. But having a strong image when it comes to things like local sourcing, which could have implications when prosperity returns, is equally important.

    Published on: August 4, 2009

    The Indianapolis Business Journal reports this morning that Marsh Supermarkets has decided to stop honoring a $10 coupon that it posted on its Facebook page, saying that “unfortunately this offer has been widely distributed in an unauthorized manner throughout our marketing area. Due to the vast numbers of inappropriately transmitted and replicated copies of this offer, we will no longer be able to accept these coupons in our stores.”

    The coupon was supposed to be usable until August 8.

    However, the explanation didn’t cut it with a lot of Marsh customers – more than 250 critical messages have been written on the company’s Facebook “wall,” with shoppers decrying the move as reflecting poor customer service.
    KC's View:
    It is unclear exactly how many coupons may have been redeemed at Marsh, so it is impossible to know exactly how bad it got. But one has to at least question whether the black eye Marsh is getting in the media and with customers is worth the money it is saving by not redeeming the coupon.

    Embracing all these new technologies involves risk. Sometimes you have to learn your lesson, take your lumps, and move on.

    Published on: August 4, 2009

    The official Girl Scout sign is three fingers…but at least one Girl Scout mom believes that Walmart is giving the scouts just one of them.

    Advertising Age reports this morning that Walmart is being attacked for its introduction of a new private label thin-mint cookie – which a blogger says is a direct attack on the Girl Scouts of America and their annual cookie drive.

    "Just when you think your opinion about Walmart might be changing ... just when you think that maybe, just maybe, Walmart was learning to be a better citizen ... Walmart turns around and does something really despicable," blogger C.V. Harquail writes on her site, "It's not discriminating against women, strong-arming suppliers, polluting neighborhoods or racing to the bottom of the China Price. No, this time, it's closer to home, and in my case, really close to home. This time ... Walmart is knocking off the Girl Scouts … The exclusivity of Girl Scout cookies is what makes the cookies really sell. But now, Walmart is shoving itself in front of these little girls, and knocking on your door to sell you their almost-as-good fake Thin Mints and fake Tagalongs, whenever you want them."

    Walmart reportedly has not yet commented on the controversy.
    KC's View:

    Published on: August 4, 2009

    HealthDay News reports that severe childhood obesity rates have tripled in the past quarter-century – increasing from 0.8 percent of kids between the ages of 2 to 19, to 3.8 percent…which could mean that as many as 2.7 million US children are severely obese.

    Wake Forest University Baptist Medical Center, which published the study, said that this means that the US needs more obesity treatment programs and that insurance companies should cover such care.
    KC's View:
    Good luck with this last bit. Insurance companies tend to focus more on finding reasons not to cover treatments, so getting them to expand obesity coverage – especially at a time when proposed national healthcare legislation could have a dramatic impact on their business and profitability – likely is problematic.

    That said, I have to admit that some of these numbers are confusing.

    After all, it was less than two weeks ago that MNB noted:

    HealthDay News reports that there is good news and bad news on the childhood obesity front in the US.

    ”The bad news: one out of seven preschoolers from low-income families is considered to be clinically obese.

    ”The good news (sort of): national levels of childhood obesity in this demographic seem to be leveling off.

    “The numbers are included in a new study from the US Centers for Disease Control and Prevention (CDC), entitled the “Morbidity and Mortality Weekly Report.” The reason for the stabilizing of the numbers seems to be that there have been numerous public information campaigns in low-income communities to encourage better eating habits and more regular exercise. However, not all of these efforts have been successful, with Native American children and Alaska Native children said to be at greater risk for obesity and the long-term health problems that obesity can create.”

    It is hard to get consumers to focus on a situation where the numbers seem to be a little fluid.

    Published on: August 4, 2009

    The Wall Street Journal reports that the US Securities and Exchange Commission (SEC) is asking a federal court in Michigan to fine former Kmart CEO Charles Conaway $8.9 million for misleading investors during his tenure at the company, and also collect what the paper refers to as “$13.7 million in ill-gotten gains.”

    According to the story, “The agency also seeks to permanently bar Mr. Conaway from serving as an officer or director of a public company and asked the judge to prohibit Mr. Conaway from receiving any part of his penalty from a third party.

    “In June, the SEC said a Michigan jury upheld all of its civil charges against Mr. Conaway, who was accused of making misrepresentations and omissions about the company's financial state in its 10Q filing for the third quarter and nine months ending Oct. 31, 2001, and in an earnings conference call.”

    Conaway’s attorneys are seeking to have the jury verdict overturned, saying that he did not profit personally from his mistakes at Kmart.
    KC's View:
    Not sure about the legalities here, but Conaway reportedly got paid more than $23 million while he was at Kmart. Sounds like personal profit to me.

    Published on: August 4, 2009

    The Los Angeles Times reports this morning that the National Restaurant Association is working with the Center for Science in the Public Interest (CSPI) to support national legislation that would require restaurant chains to disclose the calorie counts of the products and meals they sell.

    However, there are some objections to the proposed regulations – but they may not be what you think.

    The Times writes that some major chains – such as Domino’s and KFC – don't like the way the proposals single out companies with 20 or more units operating under a single banner. According to the story, “The 20-establishment threshold captures just 25% of roughly 1 million restaurants nationally, said Jonathan Blum, a senior vice president of Yum Brands Inc., which owns Taco Bell, Pizza Hut, KFC and several other chains.”

    The trade association supports the legislation because it prefers a national standard as opposed to a patchwork of state and local laws that are much more difficult to comply with. The Times reports that “if passed, the federal legislation would preempt similar laws in California, New York City and other regions for chains with at least 20 units, but local governments would still be able to pass their own laws for single restaurants and smaller chains. Some states have more stringent disclosure requirements than what would be mandated under the federal bill.”
    KC's View:
    Clarity is the best policy, especially in a transparent society where everybody is exposed, anyway. A federal approach, if it makes it easier and more consistent for business, probably makes sense, too.

    But I have to say that if the proposals exempt an enormous number of establishments because of size, that doesn’t seem entirely fair – not to the big companies, and not to consumers.

    Published on: August 4, 2009

    USA Today reports that a new survey from BIGresearch suggests mixed expectations for the upcoming end-of-year holiday season. Only one out of six retailers say they expect a worse holiday selling season than last year, but more than eight out of 10 anticipate “weak consumer demand.”

    At the same time,, almost a third of consumers say they plan to spend less this year than last year.

    What makes this difficult is that the numbers make it hard to retailers to plan for the holiday selling season – they’re not sure how much to buy because they don't want to run out of merchandise but also don't want to have surplus merchandise in January.
    KC's View:

    Published on: August 4, 2009

    The Wall Street Journal> reports that Starbucks, trying to wrestle with the demands of a recessionary economy, is trying to adapt Japanese auto production techniques to its stores. It has named Scott Heydon to be its "vice president of lean thinking.” Heydon is said to be “a student of the Toyota production system, where lean manufacturing got its start. He and a 10-person ‘lean team’ have been going from region to region armed with a stopwatch and a Mr. Potato Head toy that they challenge managers to put together and re-box in less than 45 seconds.”

    The Journal writes: “Heydon says reducing waste will free up time for baristas -- or ‘partners,’ as the company calls them -- to interact with customers and improve the Starbucks experience. ‘Motion and work are two different things. Thirty percent of the partners' time is motion; the walking, reaching, bending,’ he says. He wants to lower that.

    “If Starbucks can reduce the time each employee spends making a drink, he says, the company could make more drinks with the same number of workers or have fewer workers.”
    KC's View:
    And during those rare moments when there are no customers in the store, maybe the baristas could throw together a nice hybrid car in the back room.

    Published on: August 4, 2009

    Reuters reports that the US Department of Agriculture (USDA) plans to “increase testing parts of steaks and other meat cuts used to make ground beef as the government steps up efforts to reduce the spread of E. coli bacteria in food.

    “USDA's Food Safety Inspection Service (FSIS) said it was issuing guidance for meat inspectors to begin testing of so-called bench trim for E. coli, which the department has not routinely done in the past.”

    • The Wall Street Journal reports that “state attorneys general and health advocacy groups are urging the federal government to more closely regulate caffeinated alcoholic drinks, a small but fast-growing category popular among younger drinkers. Proponents of tougher regulation are calling for everything from outright bans to warning labels stating that mixing caffeine and alcohol could carry health or safety risks. A primary concern of the groups is that caffeine and other stimulants may mask feelings of drunkenness, which could lead users to act recklessly, such as driving while intoxicated.”

    • The Boston Globe reports that Friendly Ice Cream Corp. has developed a new, smaller format that has just 40 seats, a more limited menu and a larger emphasis on take-out foods – an approach that it hopes will help it compete more effectively with other fast casual chains such as Panera Bread and Chipotle as well as with fast food chains such as McDonald’s and Wendy’s.

    • Coinstar Inc announced that it has struck a deal that will put its Redbox DVD rental kiosks in 2,600 Kroger stores – a dramatic increase from the 200 Krogers where it currently has kiosks. The deal will cover all of Kroger’s various banners.
    KC's View:

    Published on: August 4, 2009

    • Publix Super Markets said that its second quarter sales were $6 billion, a 2.7 percent increase from last year’s $5.9 billion, on same-store sales that were down 2.6 percent. Net earnings for the second quarter of 2009 were $300.8 million, compared to $295.8 million in 2008, an increase of 1.7 percent.

    • Ingles Markets said that its third quarter net sales totaled $826.8 million, compared with $835.3 million for the same period a year ago, with same store sales (excluding gasoline and Easter) up 1.9 percent. Q3 net income totaled $4.7 million, compared with $16.0 million a year ago – a drop that the company ascribed to increased costs related to store development, general economic conditions and refinancing costs.

    • Tyson Foods reports that its third quarter net income was $134 million, up from $9 million during the same period a year earlier. Revenue fell 2.7 percent to $6.66 billion.

    ª Molson Coors Brewing said that its second quarter net income was $187.3 million, up from $79.4 million during the same period a year earlier. Revenue fell 55 percent, to $798.9 million.
    KC's View:

    Published on: August 4, 2009

    There was an email exchange on yesterday’s MNB regarding modern diseases – with one person suggesting that bad habits create these maladies and another saying that we only really get these diseases because we live a lot longer than we used to.

    To which one MNB user responds:

    Not so fast. It is quick and easy to say that but there are other things to consider. How long do you think we would live if it weren't for drugs, trauma care, modern plumbing etc. A study was done a few years ago comparing the age of the Roman Senate to our Senate sitting at the time of the study. The Roman senate had an older average age. Pull out infant mortality, the effects of accidents that current technology could easily treat, the deaths due to infections that were untreatable, modern drugs and you have a different picture.

    The hunter/gatherer may have died in a hunting mishap while trying to slay the woolly mammoth; but when using forensic anthropology to compare the health and condition of a 50 year old Paleolithic man to that of a 50 year old American you will find the Paleolithic man to have none of the diseases of civilization. They would be taller, with better bone density and musculature, no evidence of heart disease. On the other hand the ancient Egyptian, a big wheat eater, will be found to be shorter, fatter and afflicted with the diseases of modern civilization.

    I maintain that the diseases of modern civilization are not diseases per se but symptoms of eating a diet that we have not evolved to eat (high in sugar and starch and low in protein and quality fats). Maybe in a few million years we would have adapted to deal with it but we can't now.

    MNB user Michael Freese sent in the following email:

    Obviously I have a differing opinion on print than you but I knew this would ring a bell as you comment on this often:

    Excerpts from "9 Things I Learned About Magazines from Blogging," by Rex Hammock:

    "If you actually read what people write under those 'print is dead' headlines, you'll find they're talking about a business model and not a publishing format. Also, I've never heard of anyone who writes about the death of print turning down a book offer...

    "The magazines we love are...expressions of who we are...The Web is a wonderful thing when you want to drink information from a fire hose. But the magazines people love are like bottles of fine wine: Even if you have to wait a little before opening them, there's something a bit exciting about the anticipation."

    I don't really disagree with much of that…I love magazines, and books, and will be happy to plug the print media when Sansolo and I come out with our book.

    But that said, you cannot escape the reality of how the younger generation gathers information. Example: We gets “Sports Illustrated” at home, but my son doesn’t read it because by the time it arrives it is old news – he’s already been all over SI’s website, as well as and assorted other sites.

    I’m not sure, in this case, that you can separate the business model from the publishing format.

    MNB took note yesterday of a Boston Globe piece about butter entrepreneur Dan Patry, who make a brand called Kate’s Homemade Butter that won top honors last year at the World Dairy Expo … and who is under price pressure from much bigger butter manufacturers.

    My comment: I guess it is a function of the open marketplace that products judged inferior will use their money and power to try to squeeze a smaller, superior competitor out of business.

    That’s too bad…though it is heartening that Patry seems to committed to continued growth and being a robust competitor…and that he’s not going to reduce quality to get there … I, for one, am going to look for Kate’s Homemade Butter in my local store…and I’m going to buy some just because I like the way it was portrayed in the Globe. And I suspect that I won’t be alone.

    MNB user Ken Wagar wrote:

    I believe that some companies do practice predatory pricing and I believe the practice is a bad one and should be pointed out. However, there is another dynamic here that wasn’t addressed. The USA currently has a significant oversupply of milk, demand is weak and milk, cheese and butter commodity costs have been below government support levels for some time. Butter consumption is down due to the poor economy and its price premium versus alternatives. And in fact Dairy Farmers are under immense financial pressures right now because of that over supply. High supply and weak demand leads to lower prices. Rather than indict Dan’s competitors for predatory pricing maybe we should be praising them for passing lower commodity costs through to the consumer.

    I’m not sure I indicted anybody. But your point is a fair one.

    MNB user Tom Ford made another point:

    Come on, Kevin! You want transparency in food safety, but you'll buy butter made in a guy's garage???

    You’d be amazed what I’ve put in my mouth over the past 54 years.

    The Organic Trade Association (OTA) responded yesterday to criticisms that organic foods are no more nutritious than mainstream foods, which led MNB user Steve Lutz to write:

    The flaw with the response from OTA and the esteemed professor is the false choice they offer that organic and conventional must be at opposite ends of the health, environment and quality of life spectrum. Their shorthand is Organic = good, conventional = bad. Take the quote from the OTA that any time a consumer buys organics they are choosing to “protect farmers from harmful chemicals.” Excuse me, but many of the chemicals used in organic production are quite deadly and used more often in greater quantities than synthetic alternatives simply due to lower efficacy.

    I’m all for supporting farmers growing organic foods and making them widely available in supermarkets for consumers to purchase as they choose. Marketplace free choice is a great thing. At the same time I remain frustrated that marketing approach for many organic industry promoters is to demonize with false information the highest quality, lowest price food supply in the history of the world.

    Maybe it is because I’m not paying attention, but I’ve never believed that organic is good while conventional is bad. I think that organic producers believe and market their products on the premise that organic is better…but not bad.
    KC's View: