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    Published on: August 7, 2009

    The Wall Street Journal at this hour reports that the US Department of Labor is saying that non-farm payrolls were down 247,000 in July – which was below the 275,000 decline that was expected. At the same time, the unemployment rate was down in July 0.1 percent to 9.4 percent – still a lot higher than the less than ix percent reported just a year ago.

    “Though still a terrible loss by historical standards, the data suggest a turning point is at hand after job cuts earlier in the year that totaled as much as 700,000,” the Journal writes. “The economy has lost 6.7 million jobs since the recession started in December 2007 … recent data suggest GDP will start growing again this quarter. The Institute for Supply Management manufacturing index ticked higher in July and is now consistent with GDP growth of a little over 2%. Meanwhile, auto sales rose in July, spurred by the government's cash-for-clunkers program. Auto production to fill depleted inventories should propel GDP this quarter.”

    There remain concerns in some quarters that the unemployment rate could soon go above 10 percent, and that unemployment is likely to lag behind other indicators that the recession may be coming to an end.
    KC's View:
    The recession may end, but recession-minded consumers are not going to change their stripes anytime soon. The key for effective retailers is to maintain a short-term focus on value, but not to lose tough with the enduring values that make them different in the eyes of the consumer.

    Published on: August 7, 2009

    Yesterday, MNB took note of the decision by Whole Foods CEO john Mackey to give the chain a makeover – to get away from the company’s “whole paycheck” image and increasing dependence on gourmet foods, and get back to its roots of healthy living.

    In Mackey’s case, healthy also apparently means well-funded. There are reports that Mackey sold 50,000 shares of Whole Foods stock this week at $27.85 per share, netting more than a million bucks in the process.

    Barron’s reports that “Whole Foods has had a blowout 2009. Year-to-date, the stock has rocketed 204%, compared to the 2.1% drop seen by the Dow Jones U.S. Food Retailers & Wholesalers Index and the broader market's 12.8% gain.” It also notes that that this deal leaves Mackey holding more than 1.1 million shares in the company, or less than one percent of the company’s total outstanding shares.
    KC's View:

    Published on: August 7, 2009

    In Minnesota, the Star Tribune reports on the growing, recession-fueled appeal of so-called salvage grocers, who sell food that comes in dented cans, crushed boxes and with expiration dates that have, well, expired. “People who frequent salvage stores do the bulk of their food shopping at traditional grocers, where dairy and produce are more plentiful and there is lots of variety for everything else,” the paper writes. “A trip to the salvage grocer, they say, is more like a treasure hunt — what's available one week may not be the next time around.”

    As the economy has gotten worse, traffic at such retailers has increased … which has led, perhaps inevitably, to increased prices as these grocers see a way to improve their margins. Their costs, of course, are low – they don't have much labor to pay for and their physical plants tend not to be prepossessing.

    The Star Tribune says there currently are hundreds of salvage grocers operating in more than three-dozen states.
    KC's View:
    I know some people think I am overreacting to this, but it concerns me that in a time when there have been more food safety problems than ever, there is growth taking place in a marketplace selling food that may be past its sell-by date.

    Published on: August 7, 2009

    • The Kansas City Star reports that Arvest, the Arkansas bank worth $10.7 billion, has broken into the Kansas City market through the acquisition of three branches of the Harrington Bank there.

    And why is this relevant? Because Arvest is owned by the family of Walmart founder Sam Walton.

    The deal has to be approved by federal regulators, and Arvest has said it plans to grow through expansion and possibly additional acquisitions.

    • If you happen to be in a Walmart parking lot this summer and notice an RV parked there, there is at least a remote possibility that the driver is Supreme Court Justice Clarence Thomas.

    His wife, Ginni Thomas, told National Public Radio this week that the couple has been using their RV to drive around the country for the last 10 summers…and when they don't need to plug in at a local campground, they like to spend the night in Walmart parking lots.

    “We have found it’s a wonderful life,” she said.
    KC's View:

    Published on: August 7, 2009

    • Safeway announced that it is recalling ground beef sold between June 6 and July 14 in nine states, a move prompted by a recall by Beef Packers Inc related to concerns about a salmonella contamination scare.

    Marketing Daily reports that Bumble Bee Tuna is launching a new radio and in-store advertising campaign designed to hype the product’s value and meal versatility.

    According to the story, “The campaign is timed to run during the back-to-school shopping period, although there's no direct messaging link-in. The coincidence of kicking off just days after widespread media coverage of a new study showing mounting evidence of the cardiovascular benefits associated with fish oil's omega-3 fatty acids also couldn't hurt.”

    • Interesting piece in the Wall Street Journal about the previously reported decision by Procter & Gamble to develop a recession-mind version of its Tide laundry detergent – Tide Basic, which costs about 20 percent less than its traditional version and is a move away from the “new and improved” strategy that has been the centerpiece of product development for so many years.

    According to the story, P&G execs agonized over the Tide basic decision, fearing that it could cannibalize sales and erode brand equity…but they finally decided that the basic version could balance Tide’s premium prices and shore up a mildly eroding market share.
    KC's View:

    Published on: August 7, 2009

    • BJ’s Wholesale Club said that its July sales decreased by 6.3 percent to $722.5 million from $771.3 million in July 2008. Same-store sales were off by 9.1 percent.

    • Target Corp. said yesterday that July sales fell three percent to $4.42 billion, on same-store sales that were down 6.5 percent.

    • Dollar Tree Inc., reports that its Q2 sales rose 11.9 percent to $1.22 billion from $1.09 billion, on same-store sales that were up 6.8 percent.

    • Caribou Coffee said that its second quarter total net sales decreased $0.2 million, or 0.4%, to $63.0 million, from $63.2 million during the same period a year ago. Coffeehouse sales were $55.3 million in the second quarter 2009, down from $57.3 million a year ago, on same-store sales that were down 3.3 percent.
    KC's View:

    Published on: August 7, 2009

    John Hughes, who directed such seminal teen angst movies such as “Ferris Bueller’s Day Off,” “Sixteen Candles,” and “The Breakfast Club,” and wrote major hits that included “Planes, Trains & Automobiles,” National Lampoon’s “Vacation,” “Home Alone” and “Mr. Mom,”, died yesterday of a heart attack while taking a walk in Manhattan. He was 59.

    Hughes pretty much retired from the movie business more than a decade ago, preferring to spend time with his family on a working farm in northern Illinois.
    KC's View:
    The great gift that people like John Hughes give us is moments like the one I had this morning, when I remembered the scene in ‘Planes, Trains & Automobiles” where Steve Martin and John Candy are sharing a bed and Candy says that he is keeping his hand warm by putting it between two pillows, and Martin shouts, “Those aren’t pillows!”

    I thought about that scene, and I burst out laughing.

    In my view, that’s a gift.

    Published on: August 7, 2009

    MNB had a story yesterday about a new food traceability system called HarvestMark, which has been developed in anticipation of federal regulations that could require some sort of tracking system for the nation’s foods.

    MNB user Tom Stenzel, CEO of United Fresh, responded:

    Kudos to the folks at HarvestMark, who've created a great way for a producer to get closer to the consumer with codes linking the product back to the farm. They're bringing innovative solutions that help create a personal connection between farm and consumer -- "personal" may be just as important as "local" when shoppers can meet the farmer and see the fields, even if thousands of miles away.

    One note of caution for your readers though -- this really doesn't provide supply-chain traceability because there's no way to know where else that produce may be in the distribution chain. You could jump from store to farm on that single package, but you don't know whether that same lot of produce is in multiple stores, DCs, a wholesaler's warehouse, etc. It might help to know that a potentially contaminated item came from a particular farm, but without a way to know everywhere it is in the distribution chain, it doesn't help the industry a whole lot in an outbreak.

    The collective produce industry came together last year in the Produce Traceability Initiative (PTI) to adopt a set of principles and milestones for implementing whole-chain traceability across all produce in the US … This is case-level coding, and is essential in order to track where cases of produce are within the supply chain at any time. Therefore, it's the essential core of real traceability.


    Thanks for the illumination.




    Earlier this week, MNB noted that Tesco was pointing with pride to a policy that has percent of its waste is going elsewhere than into landfills … including finding alternative uses for some byproducts. For example, Tesco said, unsold meat is chilled and taken to a waste management company, where it is incinerated and turned into energy that drives generator turbines.

    Yesterday, the story took another turn…as we reported that the animal rights group Viva complains that this use of meat is “macabre,” and consumers ought to be informed if the energy they are using in their homes is being generated by out-of-date or excess meat.

    My comment:

    I’m fairly sure that Tesco – like virtually every other major retailer – would prefer that there not be any waste…but it happens, and I would have thought it a good thing that the stuff isn’t just being thrown away.

    But that’s okay. If the folks at Viva want to turn off their lights and their computers and their television sets and any other electrical appliances because of how the energy is being generated, that’s okay with me. They’ll like candlelight and fireplace heat. Really they will.


    I got some criticism for this…

    MNB user Amelia Kirchoff wrote:

    Your view is just as extreme as that of Viva. I believe, and in fact know, that there are many wasteful practices at grocery chains and supermarkets. A better response would have been to suggest that it would be nice to hear from the stores themselves on the ways that they are working to reduce the quantity of meat that needs to be thrown out. Perhaps they could donate it to a food shelter just before it expires so it does not have to be incinerated. Given a choice of reuse or recycle, reuse is definitely the better policy.

    And another MNB user wrote:

    In your response to "Animal Activists Have A Beef With Tesco Energy Policies," you commit the fundamental logical fallacy of a false dichotomy: We must either reject Viva's criticism of Tesco generating energy from discarded meat, or we'll end up reading by candlelight.

    Really? There's no other possibility? I expect better from your column.


    Sorry to disappoint you.

    To be honest, I wasn't really taking the Viva complaint seriously, which sort of informed the tone of the response. I start from a different premise – that it is okay to slaughter animals, cook them and eat them…that a cheeseburger, in fact, is paradise…and that if there is any leftover that can be used to create energy, that seems like a pretty intelligent approach.

    You’re right, there are other options. And one would hope that retailers and suppliers aren’t being wantonly wasteful.

    I guess there are studies out there suggesting that if we really wanted to reduce or eliminate greenhouse gases, it would be more effective to stop eating meat than it would be to change to hybrid or electric vehicles. But somehow – and I recognize that this reflects my biases and value system – it seems like campaigning for an all-vegetarian world is a more radical solution than changing how our cars are fueled.

    Nothing wrong with being a vegetarian. Far from it. But it also seems counter-productive to suggest that when there is leftover meat, it shouldn't be used to create energy.
    KC's View:

    Published on: August 7, 2009

    So did you see all the news stories about the seven-year-old Utah boy who didn’t want to go to church, and so he stole his father’s car…only to be chased by police for driving erratically? There’s police video of the chase and of the kid pulling into his driveway, getting out of the car and running into his house, hoping to escape the long arm of the law.

    The story made a lot of news programs, and at one point I was surfing around and saw Meredith Viera on the “Today” show interviewing the kid and his family live on the set. And so she asks him if he’s been punished, and he says, yes, he’s been grounded, and she asks him if he thinks that’s fair, and he says yes.

    But I’m thinking to myself, if he’s been grounded, what the hell is he doing on the set of the “Today” show? This kid is no dummy – after all, he knows how to drive a car at age seven – and he’s probably thinking to himself, “Okay, sure, I can live with not seeing my friends for a while. In the meantime, they flew me and the family to New York, we’re staying in a nice hotel and I’m on national television. If I steal a bus next time, I wonder if they’ll put me on the ‘Tonight’ show?”

    Not that I blame TV news entirely. At one level, I’m just glad they found something to talk about other than Michael Jackson. (Thank goodness for “Morning Joe,” where they’ve done their level best to avoid much of the Jackson nonsense.) I’ve gotten to the point were if any newscaster even utters the name “Michael Jackson” and I turn the TV off.

    But if the parents really wanted to lower the boom on this kid, not only would they have grounded him, but they would have said no to the New York trip. Which, of course, they didn’t…because they got to go, too. And sit next to Meredith Viera.

    How refreshing would it have been if the “Today” host had looked at the camera and said, “We were going to interview him…but we couldn’t, because he is being punished.”




    I’ve heard of a fat tax, but this is ridiculous.

    Someone sent me a story this week noting that while we in the US debate various forms of a fat tax that could penalize overweight people on things like insurance costs, in the UK, Ryanair is cutting to the chase…and is working on a plan to actually charge overweight passengers more than people who have kept their weight down.

    The thing is, this isn’t just some airline executive trying to figure out hat else they can charge for, now that things like baggage require passengers to pay a fee. In fact, they surveyed their passengers, and this is what they came up with (though I suspect that most of the respondents spent an inordinate amount of time in the middle seat). And Ryanair is, after all, the same airline that, if I’m not mistaken, considered the idea of charging passengers for using the on-board lavatories.




    From the Parallel universe file…

    A lot of folks are trying to figure out how to survive layoffs and make their mortgage payments. But not everybody.

    The New York Times had a piece the other day about the newest development in bathroom fixtures – a “RainBrain,” which has a touch screen and computerized controls that allow you to very specifically choose water temperature and flow, as well as play music from your iPod.

    The only problem is that unlike most shower controls, this one won’t work if there is a blackout. No electricity, no shower.

    The “RainBrain” costs about $4500.

    Yikes.




    This explains something, though I’m not sure what.

    USA Today reports on a new study saying that the number of Americans taking anti-depressant drugs has doubled to 10 percent of the population in just the last 10 decades…while the number of people seeking professional help for depression has gone down from 31 percent of people taking medication ten years ago to about 20 percent today.




    More and more, I think that Craig Ferguson is one of the best people in late night television – in his monologues, he is, in his own way, almost as good as Jon Stewart and Stephen Colbert.

    Just the other night, he did a piece in which he explained American mediocrity – and it was brilliant. Check it out by going to YouTube.com and searching for “Craig Ferguson: I figured it out.”




    Found another version of one of my favorite wines – the 2008 Laxas Albarino from Rias Baixas – which is bright and tasty and best served nice and cold with spicy pasta or seafood.




    That’s it for this week. Have a great weekend, and I’ll see you Monday.

    Sláinte!!
    KC's View: