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    Published on: November 23, 2009

    Just some random thoughts to consider as we begin a holiday week...

    • The big news over the weekend - even getting more attention that the health care debate in the US Senate - was the announced decision by Oprah Winfrey to give up her highly rated and still influential syndicated television program in 2011 after 25 seasons.

    What makes this decision so interesting is not that a lot of people are going to have to find something else to watch during the day, but because it may in fact signal something much more profound that is taking place - the death of broadcast television.

    It isn’t the only signpost indicating the direction that television may be taking, of course. There are the dwindling ratings for most of the programs on the mainstream broadcast networks, which increasingly seem to have a problematic business model. The decision by NBC to schedule “The Jay Leno Show” on Monday through Friday evenings at 10 pm, not because it was better but because it was cheaper, was akin to throwing in the towel on competitiveness.

    Cable television, which depends less on ad revenue and is less expensive to produce - and often more adventuresome in terms of theme and content - is growing in dominance, as reflected in the apparent likelihood that cable company Comcast will acquire NBC and all its cable networks from General Electric.

    The thing is, it wasn’t that long ago that broadcast television was such a big deal that, well GE couldn’t wait to get into it. There were must-see evenings of television that featured shows like “Cosby” and “Seinfeld” and “ER,” but that seems like another century, which, in fact, it was. People’s tastes changed, technology changed, and then habits changed, and suddenly Jay Leno is telling stale jokes during the time slot that “Hill Street Blues” used to rule, Oprah is going into the cable business, and NBC is up for sale.

    It is, I think, an important lesson for business people of any stripe. When change comes, it comes not with press releases and trumpets and plenty of notice, but slowly, steadily and with a creeping ferocity that means that often it overtakes us before we even know what has happened. And suddenly, we’re obsolete.

    That’s what has happened to the newspaper business. It happened to the music business. It’s happening to the television business. And it is happening in retail, as it inevitably must.

    And so the question is what you are doing to anticipate the moment of change, as opposed to denying its steady advance or trying to delay it as long as possible. Because the winners are likely to be those who embrace change and make it work for them.

    • There was an excellent interview in Sunday’s New York Times with William D. Green, chairman/CEO of Accenture, in which he made two comments that stood out to me.

    First, he spoke about the tools necessary to succeed in business:

    “I once sat through a three-day training session in our company, and this was for new managers, very capable people who were ready for a big step up. I counted, over three days, 68 things that we told them they needed to do to be successful, everything from how you coach and mentor, your annual reviews, filling out these forms, all this stuff.

    “And I got up to close the session, and I’m thinking about how it isn’t possible for these people to remember all this. So I said there are three things that matter. The first is competence — just being good at what you do, whatever it is, and focusing on the job you have, not on the job you think you want to have. The second one is confidence. People want to know what you think. So you have to have enough desirable self-confidence to articulate a point of view. The third thing is caring. Nothing today is about one individual. This is all about the team, and in the end, this is about giving a damn about your customers, your company, the people around you, and recognizing that the people around you are the ones who make you look good.

    “When young people are looking for clarity — this is a huge, complex global company, and they wonder how to navigate their way through it — I just tell them that.”

    The second comment was about hiring, and Green told this story

    “If you get down to it, it’s what have you learned, what have you demonstrated, what behaviors do you have? Have you shown intuition? Have you shown the ability to synthesize and act? Have you shown the ability to step up and make a choice? How have you dealt with the hand in front of you, played it out?

    “I was recruiting at Babson College. This was in 1991. The last recruit of the day — I get this résumé. I get the blue sheet attached to it, which is the form I’m supposed to fill out with all this stuff and his résumé attached to the top. His résumé is very light — no clubs, no sports, no nothing. Babson, 3.2. Studied finance. Work experience: Sam’s Diner, references on request.

    “It’s the last one of the day, and I’ve seen all these people come through strutting their stuff and they’ve got their portfolios and semester studying abroad. Here comes this guy. He sits. His name is Sam, and I say: ‘Sam, let me just ask you. What else were you doing while you were here?’ He says: ‘Well, Sam’s Diner. That’s our family business, and I leave on Friday after classes, and I go and work till closing. I work all day Saturday till closing, and then I work Sunday until I close, and then I drive back to Babson.’ I wrote, ‘Hire him,’ on the blue sheet.

    “He’s still with us, because he had character. He faced a set of challenges. He figured out how to do both ... It’s work ethic. You could see the guy had charted a path for himself to make it work with the situation he had. He didn’t ask for any help. He wasn’t victimized by the thing. He just said, ‘That’s my dad’s business, and I work there.’ Confident. Proud.”

    I just thought that was a great story, worth sharing.

    • Finally, if you want to read a terrific column that lays out in precise language what is wrong with government, check out yesterday’s New York Times column by Thomas L. Friedman. Click here > This piece of writing - and thinking - works on a lot of levels, and is worth paying attention to.

    Just some thoughts...
    KC's View:

    Published on: November 23, 2009

    The New York Times reports that there is a rash of lawsuits being filed by competitors in a variety of venues that are seeking to get their opposite numbers to withdraw ads that they believe overstate their case or outright deceive consumers.

    The goal, according to the Times, “is usually not money but market share. Companies file complaints to get competitors’ ads withdrawn or amended.

    “The cases themselves might seem a little absurd — an argument over hyped-up advertising copy that not many consumers even take at face value. Pantene has attacked Dove’s claim that its conditioner ‘repairs’ hair better, and Iams has been challenged on one of its lines, ‘No other dog food stacks up like Iams’,

    “Dueling advertisers, however, argue that these claims can mislead consumers and cause a pronounced drop in sales. Since advertisers are required by law to have a reasonable factual basis for their commercials, their competitors are essentially demanding that they show their hand.”
    KC's View:
    The Times piece makes the point that the recession may be responsible for the rise in litigation, since companies are ever more desperate to preserve or increase their market shares ... and to do something or anything to prevent competitors from gaining any advantage.

    However, the story offers one bit of analysis that seems to make sense - that these suits could indicate that competitors are more fixated on each other than they are on the shopper. And if that is true, the trend won’t be positive for CPG companies - or consumers - in the long run.

    Published on: November 23, 2009

    The Financial Times reports that Hershey management is being encouraged by the charitable trust that controls the company to make a $17 billion bid for Cadbury, a move that would beat by a fair margin the $16.2 billion hostile bid for the company launched by Kraft Foods.

    The New York Times writes this morning that Cadbury’s chairman, Roger Carr, was quoted over the weekend as saying that while he would prefer independence, he would consider “any compelling offer from a serious source,” and that he prefers to deal with companies that have business models more aligned with that of Cadbury.

    At one point last week, it was rumored that Ferrero, the Italian chocolate company, might join in the Hershey bid, but today it is unclear whether this will happen or if Ferrero will make its own bid for Cadbury.

    According to the story, “Hershey may be a welcome alternative in what has become an increasingly contentious standoff between Cadbury’s top executives and Kraft. Cadbury’s long-standing relationship with Hershey, and its shared focus as a pure-play confectioner, has made the possible tie-up an idea the UK candy company pursued as recently as 2007. Adding Cadbury would give Hershey, which already produces the UK company’s chocolates in the US, access to international markets that have remained out its reach.”

    The timing of a Hershey bid in unknown at this point, but Reuters reports that “Hershey has lined up deal funding from Bank of America and JP Morgan Chase & Co. to make a solo offer for Cadbury.”
    KC's View:

    Published on: November 23, 2009

    WHEC-TV News in western New York reports that Wegmans plans to close its well-known Tastings restaurant that is adjacent to its Pittsford, NY, store, and will replace it with a new restaurant across the street called the Next Door Bar & Grill.

    Initial reports say that the new restaurant will be more casual than Tastings, but further details are sketchy. Speculation is that Tastings may have been a bit upscale for recessionary times.

    According to the story, “Wegmans isn't saying why it's closing Tastings, except to say they've learned a lot about the restaurant business since it opened. The new Next Door Bar and Grill will be in its own building. Also, Wegmans hasn't decided yet how to use the Tastings space once it's opened up as part of the Pittsford supermarket.

    “Wegmans says the new restaurant will open sometime in December before Christmas. It will be more spacious than Tastings. But there's no word yet about the menu or the food prices.”
    KC's View:
    One of my nicest memories from the past few years was a wonderful dinner that I had at Tastings with some folks from Wegmans - it always is a great evening when there is a combination of great conversation, terrific food and excellent wine.

    But it is a mark of the continuing search for excellence at Wegmans - as opposed, say, to sitting on their considerable laurels - that the company makes changes like this one. You want to be great, it means that you have to keep trying new things, to always get better.

    Published on: November 23, 2009

    The Chicago Tribune carried a story the other day about how the Simon Property Group, the nation’s largest mall owner and operator, will give away millions of chocolate chip cookies during the upcoming holiday season, in what the organization refers to as “retail aromatherapy.”

    "I can't think of anything that can fit into it more — warm cookies in the mall and that type of comfort food feel," says Cathi Weiner, a senior vice president with the mall group.

    The giveaway is being done as part of a deal with Nestle, which also will be handing out coupons along with the free cookies.
    KC's View:
    This is an excellent idea, but it raises a question.

    How many food retailers engage in retail aromatherapy - whether with cookies or some other product - not just during the holidays, but year round?

    My answer would be, not nearly as many as you’d think. Which means that too many food retailers are essentially giving away what should be their built-in advantage.

    Published on: November 23, 2009

    Unemployment continues to be a major problem in the US, as Bloomberg reports that the US Department of Labor says that “joblessness rose in 29 states last month compared with 22 in September ... Michigan had the highest jobless rate at 15.1 percent, followed by Nevada at 13 percent and Rhode Island at 12.9 percent.”

    According to the story, California, Delaware, South Carolina and Florida all registered record rates of unemployment in October: “The number of states with at least 10 percent unemployment held at 14 last month, the Labor Department’s report showed. In the states reporting record jobless rates, California was at 12.5 percent; South Carolina, 12.1 percent; Florida, 11.2 percent; and Delaware at 8.7 percent. The District of Columbia also set a high with an 11.9 percent rate.”

    However, the news wasn’t bad everywhere, as “the unemployment rate fell in 13 states, including Massachusetts, where it declined to 8.9 percent from 9.3 percent; New Hampshire, with a drop to 6.8 percent from 7.2 percent; and West Virginia, which fell to 8.5 percent from 8.9 percent.”

    Experts say that no matter how the other economic indicators perform, it is likely that unemployment will continue to be a major problem for the next 12-18 months. In addition, it is said that these figures understate the problem because they do not include people who are underemployed or who have simply given up; the national unemployment rate, officially at 10.2 percent, is believed to be much close to 20 percent.
    KC's View:

    Published on: November 23, 2009

    • There continues to be significant coverage of Walmart’s online plans, as Dow Jones carries an interview with CEO Raul Vazquez, who says that the company is getting much more serious about multichannel selling, “saying that it not only wants to be dominant among brick-and-mortar retailers, but that it also wants to take out online titan”

    According to the story, “Vazquez said is already making great strides, growing at two to three times the rate of the overall e-commerce industry and expecting a ‘very good holiday season’ coming off the record sales and volume it has seen all year. Vazquez declined to provide precise figures.

    “ has typically more than 10 million visits on Thanksgiving, its highest traffic day of the year, as consumers' thoughts turn to Black Friday sales and overall Christmas buying after their turkey dinners. CyberMonday, the Monday after Thanksgiving, is the top five among's busiest days of the year, in line with other sites that tend to see more business closer to Christmas, or even on Black Friday.”
    KC's View:

    Published on: November 23, 2009

    • The Financial Times reports that Coca-Cola plans “to more than double its number of bottling plants in China in the coming decade as part of its aim to triple the size of its sales to the country’s rapidly emerging middle class ... Coca-Cola’s plans to expand in China are a central part of its push to double revenues – and those of its bottlers – from almost $100bn now to $200bn in the next 10 years.”
    KC's View:

    Published on: November 23, 2009

    • The Times of London speculates that Mark Price, CEO of Waitrose in the UK, may be the leading contender to replace Marc Bolland as CEO of William Morrison Supermarkets.

    It was announced late last week that Bolland is moving over to be the new CEO of Marks & Spencer.

    According to the Times, “City sources said that the man nicknamed the Chubby Grocer could be tempted into swapping his role as managing director at Waitrose for an estimated £2m-a-year pay package at the Bradford-based chain. It is likely that any pay deal offered by Morrison would dwarf the salary and bonus he could earn at Waitrose, whose parent company is the employee-owned John Lewis Partnership.”
    KC's View:

    Published on: November 23, 2009

    • JM Smucker said Friday that its second quarter financial performance was assisted mightily by its acquisition of Folgers coffee from Procter & Gamble. Q2 earnings were $140 million, up from $51.5 million during the same period a year ago; sales were up 52 percent to $1.28 billion.
    KC's View:

    Published on: November 23, 2009

    On the subject of legislation that would regulate interchange fees charged by banks for credit and debit card purchases, one MNB user wrote:

    Are you prepared for the flood of e-mails from conservatives regarding the audacity of the government to get involved in the private matter of interchange fees?  Why accept all these credit cards if you cannot afford the fees that go along with them?  Seriously, I’m guessing you didn’t hear a thing along those lines.  If you did, let me be the first to apologize to conservatives who stay true to their message.  If not, I reiterate my thoughts that the conservative paradigm of less government is no longer accurate.  It’s about less government when it can save me money and more government when it is to my benefit.

    Let’s not forget for one minute that the food lobbyist have been hard at work trying to stall and delay this as much as they can as well...I really don't think the scare factor does much if anything to either make us safer or get the manufactures attention. Laws and lawsuits do, history has proven this.

    At the risk of sounding depressingly cynical, I think it can be fairly argued that almost every politician - regardless of persuasion - remains loyal to a governing philosophy right up to the point where it interferes or conflicts with personal self-interest. Sometimes those self-interests have to die with getting elected, and sometimes those self-interests are more carnal.

    Another MNB user wrote:

    Let the card companies charge what they what and let the retailers offer appropriate pricing accordingly to the consumer. Lets bring out transparency! Have a two tier pricing strategy to show the consumer what it is costing them to use credit. I'm all for it and will cut up my CC's to save accordingly.

    On another subject, MNB user Tom Redwine wrote:

    Your reply to a reader's note in Friday's "Your Views" in regards to the retail employee happiness survey was dead on, and there's one sentence that's going in my "Smart Quotes" file: "Smart management knows that the retail employee needs to be the highest priority, because a store is only as good as the people on the front lines."

    I learned that a long time ago (in a galaxy far, far away) from one of the best bosses I ever had, who was my store manager at Radio Shack. The lessons he taught were so well reinforced that when I was interviewed for a store manager position, I failed. The question that my district manager asked was, "What's the most important job of a store manager?"

    My answer was simple and straightforward: "To take care of his people."

    "No!" He was surprised. "Inventory! The most important job a manager has is keeping up with inventory."

    "No," I corrected him (always a brilliant move in an interview), "he delegates that to his three trainees, we're on top of the inventory - he just makes sure we're taken care of." My DM shook his head and sighed. (I seem to remember my boss getting into a little hot water for that one.) I didn't get the store. About a year or two later, I left Radio Shack to start at a brand new Sam's Club in town, setting forth on what turned out to be a 21+ year career with the world's greatest retailer.

    I'm glad I got the answer right and failed his test. Thank you for reminding me of that lesson.

    MNB had a brief mention on Friday of an iPhone application called Stamp, which if open when a person walks into a restaurant or store using the program, allows the establishment to instantly see information about the customer that he or she has entered, allowing the retailer “ to offer a tiny dose of personalized service in an often impersonal service world.”

    MNB user Ron Pizur wrote:

    My grocery store already has this information. They received it when I signed up for my 'loyalty' card.  Now, why doesn't the cashier get my information on her screen when she scans my card?  It would be nice for her to say "Have a nice day Mr. Pizur." when I leave.

    True...but most supermarkets use their loyalty cards as methods of delivering electronic coupons.

    The issue of hunger in America - and how to deal with this growing problem - continues to generate email from the MNB community.

    One MNB user wrote:

    I just want to comment on the ongoing discussion about the "right" to healthcare, freedom from hunger as a "right", etc.  I think there would be a unanimous vote that in the best of circumstances, nobody in America would be hungry and everyone would have access to healthcare (healthy lifestyles, healthy food, and access to facilities when infirm).

    Now, let's consider the other "rights" we enjoy in this country... starting with those "certain unalienable" rights "endowed by their creator" of life, liberty, and the pursuit of happiness.  Then consider the rights granted in the first ten amendments of the constitution:  all are personal rights afforded to the people by the people to support the creation and maintenance of a free and open society.  (Freedom of speech, freedom of the press, limitations on government impingement to private property, etc.)

    To consider that provision of services by the government to defeat hunger and provide healthcare (while they are worthwhile ideals for free individuals to pursue) somehow rise to the same level as the founding principles plus the subsequent amendments (women's vote, civil rights, etc.) just defies logic to me.  The one is a collection of beliefs to be granted and enjoyed, the other requires the government to pry away treasure from some in order to give to others.  Not the same things at all.

    Another MNB user chimed in:

    Without sounding like a heel and I know there are truly people out there who do need help. I feel we are headed to more government help with this article. As I have said in the past, spend some time behind a register and watch what is bought by people who are on “EBT”. Many of them buy on impulse, or because of convenience. You cannot feed a family all month on food stamps from the frozen food department, or spend $20 at the salad bar, or $40 on a bakery department birthday cake. You do not have enough column space for me to go on. I am not unsympathetic to anyone who needs a hand up; growing up my own family needed help. There is a distinct difference between a hand up and a hand out. It is no wonder their benefits do not last all month, they need a lesson in shopping, and cooking.

    And MNB user Deborah J. Maestu wrote:

    The negative reactions to this subject continue to amaze me.  Leaving aside the implication that many people in America seem to think it is okay for children to go hungry, do they not realize the implications?  If we don't feed our own children, what happens when someone else does?  What happens when someone else reaches out a hand in kindness, offers food, knowledge, refuge?  Children grow up, and hungry children who grow up with the knowledge that their country has turned a back on them, owe no loyalty to that country.

    I don't really understand people who object when we say that children have a right to be fed.  Are they implying that, because of the accident of birth, the child of a rich man has a right to food, having done nothing to "earn" it and the child of a poor person doesn't?

    Finally, MNB user Hugh McManus had a thought:

    You say you were a fan of the original “The Prisoner” but just below your review you missed the opportunity to sign-off with “I’ll be seeing you!”

    True. But only because I’d done that a few weeks ago when I mentioned that I was looking forward to the new version. Having been disappointed by the remake, I decided not to use the classic line from the original.
    KC's View:

    Published on: November 23, 2009

    In Week Eleven of the National Football League...

    Pittsburgh 24
    Kansas City 27

    San Francisco 24
    Green Bay 30

    Atlanta 31
    NY Giants 34

    Cleveland 37
    Detroit 38

    Seattle 9
    Minnesota 35

    Indianapolis 17
    Baltimore 15

    Buffalo 15
    Jacksonville 18

    New Orleans 38
    Tampa Bay 7

    Washington 6
    Dallas 7

    NY Jets 14
    New England 31

    Cincinnati 17
    Oakland 20

    Arizona 21
    St. Louis 13

    San Diego 32
    Denver 3

    Philadelphia 24
    Chicago 20
    KC's View: