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    Published on: November 6, 2009

    The US Department of Labor announced this morning that the country’s unemployment rate hit a 26-year high of 10.2 percent in October, as the economy shed 190,000 jobs. The unemployment rate was higher than expected, as experts believed that it would remain under 10 percent.

    Analysts say that while the pace of job loss has slowed significantly over the past year, the overall recovery has been inhibited by the continuing unemployment problems.
    KC's View:

    Published on: November 6, 2009

    The Wall Street Journal reports that Ahold “said it would break up its two U.S. units into four so that it can better integrate acquisitions and allow decisions on customer needs to be taken at a more local level.”

    According to the story, “Stop&Shop/Giant-Carlisle and Giant Landover will be separated into Stop & Shop New England, Stop & Shop Metro New York, Giant-Landover and Giant-Carlisle.” Carl Schlicker, CEO of Stop & Shop/Giant-Landover, has been named chief executive of the four newly reorganized U.S. divisions.

    “In recent quarters,” the Journal writes, “the company has benefited from a revamp of its U.S. operations that it started about two years ago. It had started reformatting and modernizing its stores and lowering its prices before the economic downturn hit, stealing a march on rivals who had to cut prices once the U.S. went into recession. It has said that it hopes to acquire stores that are sold by rivals during the downturn.”

    At the same time, even as Ahold says that it is reorganizing to make it easier for it to integrate acquisitions, there remains much speculation that Ahold itself could be an acquisition target, with both Tesco and Delhaize mentioned as possible buyers. (Tesco seems to be the flavor of the day in all this chatter, which could mean nothing.)
    KC's View:
    One of the major criticisms of Ahold over the past few years has been that some of its US consolidation efforts have made its management out of touch with local markets, especially in the Washington, DC, area, where Giant-Landover is not seen with the same local sentiment as it used to be.

    So the question is whether these new organizational efforts will make the company’s marketing efforts more localized. They might...or, on the other hand, the reorganization could be mostly cosmetic, or done for the purpose of being able to sell or spin off specific groups of stores more easily.

    Hard to tell at this moment. But smarter people than I suggest that the competitor that Ahold really needs to worry about is Wegmans, which reportedly is an expansionist mode and is targeting some of the markets that Ahold serves.

    Published on: November 6, 2009

    The Danbury Times takes note of the fact that Stew Leonard’s - the iconic fresh food store that has built a $400 million-plus business out of four limited assortment fresh food stores and eight wine stores - turns 40 next Tuesday.

    Stew Leonard Jr. tells the paper that one of the reasons that the company has been so successful has been a no-layoff policy. "In 40 years, we haven't had to lay anybody off. There are a lot of people here celebrating 30 years with us. A lot of young families have built careers around Stew Leonard's,” he says.

    In addition, the story notes, the company has had to get past the tax evasion conviction of founder Stew leonard Sr. in 1993, which cast a shadow on what until then had been one of the great American entrepreneurial stories. But the fact is that Stew Leonard’s has not only survived the scandal, but transcended it; today, the company is larger and more successful than it was 15 years ago, and it continues to look for ways to expand and offer new opportunities not just to employees, but to a third-generation of family members.
    KC's View:
    My interest in Stew Leonard’s success is more than merely professional. I’ve been shopping there almost weekly for the last quarter-century. (I once figured it out, and estimated that in that time I’ve spent in excess of $200,000 there in that period of time.)

    So I must like it.

    More importantly, I don’t think it an exaggeration to suggest that in many ways my kids grew up going to Stew Leonard’s. I can still remember the time more than 23 years ago when I walked into Stew’s early on a Saturday morning in early September with my first-born son, who was then just two weeks old. My wife was home asleep (she wasn’t yet Mrs. Content Guy, because MNB wasn’t even a gleam in my eye - I don’t even think I owned a computer!) and I’d decided to take my son shopping.

    We walked in the front door, into the bakery, and an employee named Dodie came over to see the baby...and from that time on, we were connected to Dodie until she retired a few years ago. For all of my kids, she was Stew Leonard’s...there was a personal connection that you simply don’t get in most stores. Sure, there were samples and great smells and a zoo and animatronic animals to keep them entertained. But Dodie was most important. And that’s the legacy of which the Leonard family should be most proud.

    So, Tuesday will be a big day for them.

    But you know what’s a bigger day? Wednesday. Because they have to earn and re-earn their reputation every day. Each new day of business brings with it the opportunity to be better, and the challenge never to get complacent.

    And it may get tougher for Stew’s. There’s a new Fresh Market a couple of miles up the road. A new Fairway is going in a few miles down the road. And as reported here yesterday, Wegmans seems to have its corporate eye on Connecticut.

    Which is at least part of the reason, I’m sure, that they’ve done a lot of remodeling of the original Norwalk store, upgrading the physical facility and adding goods and services.

    If you want to see how Stew Leonard’s is going to compete in the future, forget about Tuesday’s celebration. Watch what they do on Wednesday. And Thursday. And Friday. And so on.

    Published on: November 6, 2009

    Some nutrition experts are criticizing an alliance between Coca-Cola and the American Academy of Family Physicians, which will have the manufacturer funding to the tune of six figures educational materials about soft drinks on the academy’s website.

    USA Today reports that Harvard University’s Dr. Walter Willett says that “"Coca-Cola, like other sodas, causes enormous suffering and premature death by increasing the risks of obesity, diabetes, heart attacks, gout, and cavities.” Willett added that the academy "should be a loud critic of these products and practices, but by signing with Coke their voice has almost surely been muzzled."

    And Dr. Henry Blackburn of the University of Minnesota tells the paper that the deal "will inevitably have a chilling effect on the focus of their message in regards to sweet drinks."

    Academy CEO Dr. Douglas Henley denies the charges, saying, according to the paper, that “the deal won't influence the group's public health messages, and that the company will have no control over editorial content. He said the new online information will include research linking soft drinks with obesity and will focus on sugar-free alternatives.”
    KC's View:

    Published on: November 6, 2009 said yesterday that it will sell 10 movies on DVD that are pre-ordered by shoppers for $10 apiece, with free delivery. The decision was quickly matched by and Target.

    The moves replicate a similar battle that started about a week ago, when expected best sellers pre-ordered on, and saw their prices slashed by 60 percent or more.

    The list of movies includes “Star Trek,” “Julie & Julia” and "Harry Potter and the Half-Blood Prince.”
    KC's View:
    We’re going to see a lot of these cuts in the coming two months, as the online battle hits a fever pitch.

    Published on: November 6, 2009

    comScore is out with a new study saying that online sales were down two percent in the third quarter, the first time in memory that online spending has gone down two quarters in a row. At the same time, comScore suggests that fourth quarter, end-of-year holiday spending could be up a little bit compared to last year, but only because the 2008 holiday season was, in the words of the Wall Street Journal, “dismal.”

    The Journal also notes that this study appears to be ion conflict with projections made by Forrester Research earlier this week that suggested end-of-year holiday spending online this year could be up as much as eight percent.

    Why the difference? The Journal writes that while comScore looks at consumer spending, Forrester has a “more holistic point of view.”
    KC's View:
    Quite frankly, we all have to hope that Forrester is right on this, since we need good economic news wherever we can find it.

    Published on: November 6, 2009

    Bloomberg reports that CVS Caremark said yesterday that the federal Trade Commission (FTC) is investigating some of its business practices, though specifics of the probe were not disclosed by either party.

    • The merger of Utz Quality Foods with Snyder’s of Hanover apparently has been called off, after Utz management decided to pull out of the deal after the federal Trade Commission (FTC) signaled that it would be a protracted approval process.

    "While we were excited by the prospect of merging with Snyder's of Hanover, we knew that participating in another FTC request would put a strain on our company and ultimately distract us from what we are here to do every day, which is to provide high-quality snacks to our customers and serve our community," said Michael W. Rice, Utz’s chairman/CEO, in a prepared statement.
    KC's View:

    Published on: November 6, 2009

    • Belgium-based Delhaize, which generates more than half of its revenue in the US, yesterday said that its third quarter earnings before interest and tax (EBIT) rose 5.7 percent to $336 million (US). Total sales were $7.3 billion (US), up 4.8 percent compared to to a year earlier. Same-store sales in Belgium were up 4.6 percent, while in the US they were down 1.3 percent.

    • Costco said that its October sales were 5.68 billion, up seven percent compared to same period a year ago. same-store sales were up five percent.

    • Dollar Tree said that its third quarter sales were $1.25 billion, compared to $1.11 billion during the same period a year ago. Sa,e store sales were up 6.5 percent.

    • Starbucks posted fourth quarter earnings of $150 million, up from $5.4 million during the same period a year ago. Sales were down 3.7 percent to $2.42 billion, on same-store sales that were off one percent.
    KC's View:

    Published on: November 6, 2009

    • CVS Caremark named David Denton, its chief accounting officer, to be its new CFO, succeeding David Rickard, who is retiring at the end of the year.
    KC's View:

    Published on: November 6, 2009

    Gene Walters, the former Kroger executive who became CEO at Farm Fresh before creating Virginia’s Gene Walters Marketplace stores in 1987, died Wednesday at age 86. Walters sold his stake in the eponymous chain to Farm Fresh in 1992, but remained as a consultant.
    KC's View:

    Published on: November 6, 2009

    ...will return.
    KC's View:

    Published on: November 6, 2009

    There was a great piece in Advertising Age the other day about one of my favorite subjects.


    The article was about research done by Mindset Media about how the kind of beer one drinks “can be as telling about your personality as what kind of clothing you wear or the car that you drive. And if you don't drink suds at all, or change brands depending on your mood -- well, that says something too.”

    Some of the conclusions:

    • “People who prefer domestic beers over craft beers or imports are generally middle of the road in their politics. They're not nearly as conservative as people who don't drink beer at all, but not as liberal as people who prefer more exotic beer.”

    • “People who drink a broad portfolio of beers are different than one-brand drinkers as well. Those ‘indifferent’ beer drinkers are more open-minded and emotional people who enjoy a variety of life experiences.”

    • Budweiser drinkers “are sensible, grounded and practical. They are the polar opposite of daydreamers and don't easily get carried away. These beer drinkers also don't like authority - can anyone say union? - and are emotionally steady people who live in the here and now. However, what may be a bit surprising is that people who prefer Bud can also be very spontaneous and tend not to do much advance planning. Budweiser drinkers are 42% more likely to drive a truck than the average person, 68% more likely to choose a credit card with flexible payment terms and 42% more likely to use breath-freshening strips every day.”

    • “Bud Light drinkers profile as lacking in carefulness. They are grounded like their Bud brethren, but respect authority. Bud Lighters can also have frat boy-like personalities, particularly when it comes to personal risk-taking. In regard to others, these good-time guys and gals are accepting of most everyone and generally easy to get along with. Bud Light drinkers are also 48% more likely than the average person to play the lottery every day and 34% more likely to never buy organic products.”

    • “Michelob Ultra drinkers rate high in superiority; that is, they think highly of themselves and can be a little bit conceited. They care what other people think about them and want to appear perfect. They also tend to be take-charge types with strong opinions, and can even be confrontational. Michelob Ultra drinkers are 43% more likely than the average person to consider sustainability a priority, and 34% more likely to buy life insurance.”

    • Corona drinkers “are busy and energetic people who are also extremely extroverted. They're people persons who seek out the company of others whether in a group or just one-to-one. Corona drinkers do more and see more people in one day than most people see in a week. But the life-of-the-party Corona drinkers also have an altruistic side; they care deeply about other people and see themselves as giving and warm. Corona drinkers are 91% more likely than average to buy recycled products and 38% more likely to own three or more flat-screen TVs.”

    • Blue Moon drinkers are described as “socially liberal and usually quite willing to go against convention. They really hate moral authorities, and believe children should be exposed to moral dilemmas and allowed to come to their own conclusions. They can also be sarcastic and snide in order to get a point across. People who drink Blue Moon beer are 105% more likely than the average person to drive hybrid cars, 77% more likely to own Apple Mac laptops, 65% more likely to purchase five pairs or more of sneakers every year, and 32% more likely to not be registered voters.”

    • Craft beer drinkers are “more likely to spend time thinking about beer rather than work. They are more open-minded than most people, seek out interesting and varied experiences and are intellectually curious. Craft-beer drinkers also skew as having a lower sense of responsibility they don't stress about missed deadlines and tend to be happy-go-lucky about life. Craft-beer lovers are 153% more likely to always buy organic, 52% more likely to be fans of the show ‘The Office’ and 36% more likely to be the ones to choose the movie they are going to see at the theater.”

    • And people who don’t drink beer? Well, according to Mindset Media, “people who refuse to drink beer at all don't like to loosen up very much. They are socially conservative and see many issues as black and white. Teetotalers honor tradition and authority and prefer a less-hectic social life. People who turn down beer are 50% more likely to call themselves Republican, and are 30% more likely to never buy organic product.”

    Now, I don’t know about you, but when I first saw this story I was a little skeptical. It isn’t any fun to think that one can be easily classified, and a lot more fun to think that one would confound the so-called experts.

    But having read the entire Advertising Age story, I have to concede that the folks at Mindset Media are onto something here. I know my own beer drinking habits, and while I don’t fit neatly into any one specific category, much of what they say about my beer preferences - and dislikes - pretty much hits the nail on the head. Not sure if you feel the same way, but there it is.

    Though as the great Robert B. Parker once wrote, “The worst beer I ever had was wonderful.”

    While in Las Vegas this week - Michael Sansolo and I were there speaking to the California Grocers Association (CGA), which runs a first-class conference - I had a chance to try a place I’d never heard of before: NobHill Tavern, which is located in the MGM Grand. While I’ve probably passed it dozens of times over the years, I only learned of its existence because owner Michael Mina was profiled in the current issue of Wine Spectator.

    I only had time for a quick nosh, so I sat at the bar and enjoyed the best pulled pork sandwiches I’ve ever eaten - bar none. They were small in size but huge in flavor - just spicy enough to bring tears to my eyes. I washed them down with one of the house wines - the Qupe Syrah Mina Cuvee from Santa Barbara, which was recommended by Jordan, the bartender...and it was perfect.

    Next time...dinner. Because I can only imagine how wonderful that will be.

    One of the ongoing debates here on MNB usually crops up when I say that retail models built around the DVD - whether it is Blockbuster, Redbox or an in-store video department - are doomed to obsolescence since people soon will be downloading movies rather than purchasing them in any kind of physical format.

    A couple more indicators have popped up that reinforce this notion.

    Bet Buy announced that it is creating an on-demand video download service that it hopes will grow to the point where it will be available on virtually every piece of appropriate equipment that you buy from it.

    Apple is said to be negotiating with the major television networks to create a subscription component in its iTunes store that would allow people to pay one monthly fee and be able to download a broad range of network offerings - which is one step closer to making traditional network programming schedules irrelevant since people will be even more empowered to watch what they want when they want to watch it.

    The folks who think that the DVD has any sort of extended life expectancy are the same folks who think that newspapers are going to stick around simply because they enjoy reading them with their morning cup of coffee. It’d be pretty to think so, but that’s old world thinking. (Maybe they are still listening to music on their eight-tracks...?)

    And the challenge to retailers in almost every venue is how they are going to communicate and sell to people who don’t play by traditional rules.

    The challenge to all of us is to keep thinking young, no matter how old we get.

    Which allows me to smoothly segue into a big “thank you” to all of you who wrote to wish me a happy birthday on Wednesday. I was genuinely touched - and it meant a lot since I was 3,000 miles from home when I got halfway to 110. Michael Sansolo and I were out west doing a couple of speeches together this week, so it was nice to get all that email.

    Which reminds me...

    A big shout out to MNB user Wendy Morton, who recommended that on Wednesday night Michael should take me out to a Mexican restaurant in Palm Desert, California, called Armando’s - which was everything she said it was. (I love restaurants that are small enough that the guy whose name is on the front door is also the guy standing at the front door...and Armando was there himself, making both regulars and first-timers feel at home.)

    The nachos were incredible. The chicken enchiladas and seafood fajitas were enormously flavorful. And the margaritas...well, the intensity of the margaritas may explain why on Thursday, for a brief period of time, MNB had Caribou Coffee showing a third quarter profit of $654 million rather than $654,000.

    A great night. A great day. Thanks to all of you for being a part of it.

    I keep getting email from folks who are as big fans of “Castle” as I am, so I’m thinking that the Monday night series on ABC must be picking up steam. If you haven’t seen it, check “Castle” out - it stars Nathan Fillion as a mystery writer who is shadowing a NYC detective (the gorgeous Stana Katic) as he researches a new series of novels. The concept isn’t new - shows ranging from the long-running “Murder, She Wrote” to the short-lived “The Cosby Mysteries” have used the notion that a mystery writer can help the real cops solve crimes. But “Castle” has a playful element that distinguishes it, it is a lot better written than much of what is on TV, plus the leads are a helluva lot sexier than Angela Lansbury.

    Also promising - the new version of “V,” which premiered this week. There were at least a couple of good twists just in the first hour that make me think that this alien invasion series could be the real deal.

    Just two more weeks until the remake of “The Prisoner” on AMC. They may screw it up, but as a huge devotee of the original Patrick McGoohan series, from the seventies, I’ll certainly be watching to find out.

    That’s it for this week. Until seeing you.

    KC's View: