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    Published on: December 3, 2009

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    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.

    Over the past few weeks, we’ve had a number of stories about the online wars between Amazon.com and Walmart.com. And yesterday, we had a story that used Jaws as a metaphor for how to avoid certain business mistakes. Well, I think I’ve found yet another metaphor that combines both of these stories...

    Go figure.

    The way I understand it from a segment from a National Geographic special, scientists have long believed that the great white shark was the deadliest being on earth. Well, not that long ago, people on a whale watching trip were viewing a feeding spot where great white sharks were munching on seals.

    What happened next was instructive. A killer whale came into view, and engaged in battle with one of the sharks. And to everyone’s surprise, it didn’t go well for the shark. I think the phrase used on the segment I saw was “shark sushi.” You get the picture.

    The way I understand it, additional research has shown that killer whales have figured out how to get the best of great white sharks. I guess what they do is that they have figured out how to hit the sharks from a certain angle that flips them on their backs...and that makes the sharks disoriented. In that moment, the killer whales attack. And the shark ends up as a meal.

    Now, you can decide who you think is Walmart and who is Amazon in this metaphor. It almost doesn’t matter, because they both are big and hungry. But there’s also a lesson here for retailers that compete with them - sometimes, if you can hit a behemoth in an unexpected way and from an unanticipated angle, you can disorient it...and ultimately win. You just have to keep doing it, over and over and over.

    Two other interesting things from the nature segment. One is that killer whales apparently have some sort of advanced communication system that has allowed them to share this shark attack technique - because a lot of them seem to know how to do it. And sharks are no dummies, either. Because after that killer whale picked off the shark near the feeding ground, the rest of the sharks vanished...because they didn’t want to end up being breakfast, lunch or dinner.

    Maybe there’s a metaphor here, too.

    Though sometimes the laws of nature are more forgiving than the laws of business.

    For MNB Radio, I’m Kevin Coupe.
    KC's View:
    As noted earlier this week, the original deadline for orders of the new book by Michael Sansolo and me - The Big Picture: Essential Business Lessons From The Movies - to be placed in order to have them delivered by the holidays was November 30...but the overwhelming response has led the publisher to extend it by one week, to December 7. So if you’re interested, click here .

    Published on: December 3, 2009

    The Boston Globe reports that Walmart will write a $40 million check to settle a 2001 class action lawsuit charging it with denying employees earned overtime pay, refusing to give them meal breaks, and manipulating time cards in its own favor.

    The money - after the lawyers get their cut - will be paid to more than 87,000 current and past employees of the company in the Commonwealth of Massachusetts.

    According to the Globe story, “Under the terms of the deal ... any person who worked for Wal-Mart between August 1995 and the settlement date will receive a payment between $400 and $2,500 depending on number of years worked, with the average worker receiving a check for $734.”

    The settlement agreement prevents either side from commenting on the case.
    KC's View:
    Ironically, there was a story about corporate debt ratings and “safe” investments in the Toronto Globe and Mail that had some relevant passages:

    “Wal-Mart's total debt stands at about $40-billion, 41 per cent of which isn't due till 2023 or later. Near-term refinancing needs for the company are nominal, leaving financing costs the only concern. While Wal-Mart's financing expenses are low -- the company has a credit score one notch below the top rating -- its bond yields are well in excess of government issues.

    “With about $10-billion in free cash flow on revenue of $400-billion, can there be any question about Wal-Mart's ability to repay its commitments? The company continues to expand globally, ensuring its growth, and a decade-plus track record of rising sales and profits leaves little doubt the company can weather any economic condition.”

    And then, the paper concluded: “Wal-Mart should be considered the ultimate haven, and the fact that it doesn't boast of a AAA credit rating makes it all the more attractive due to the extra yield.”

    Good thing it has all that money. Because it allows Walmart to write these kinds of checks out of petty cash.

    Published on: December 3, 2009

    Wegmans Food Markets this week took home the 2009 Corporate Stewardship Award from the US Chamber of Commerce Business Civic Leadership Center (BCLC), a presentation made at the 10th annual Corporate Citizenship Awards Dinner at the US Chamber of Commerce building in Washington, D.C.

    According to the announcement, “The annual Corporate Stewardship Award recognizes a company for strong financial success, a sustained contribution to community, and social programs.” Wegmans was nominated for the award by the Food Bank of the Southern Tier, which lauded Wegmans for its ongoing efforts to assist food banks in all of their market areas.

    In accepting the award, CEO Danny Wegman said, “Leading with your heart can make a successful business.  That’s how free enterprise works.”
    KC's View:
    Congrats to Wegmans, which was doing “conscious capitalism” when some, more high profile proponents of the notion were in diapers.

    Published on: December 3, 2009

    Reuters reports this morning that Belgium-based Delhaize plans to eliminate the equivalent of $453 million (US) in costs by 2012, saying that it plans to cut prices and expand the number of budget stores it operates in markets such as Greece, Romania and Indonesia.

    Our top line growth numbers have not been as buoyant, as high as some of our best-in-class competitors and we believe that is something we need and should address," says Delhaize CEO Pierre-Olivier Beckers, also saying that “now is the right time to capitalize on our strengths and further accelerate. The goal of our ‘New Game Plan’ is to deliver value leadership in all our markets leading to superior revenue and profit growth and to make of Delhaize Group a more effective acquisition platform through additional synergies, shared knowledge and shared services."
    KC's View:

    Published on: December 3, 2009

    USA Today reports on the growth of online coupons: “Leading coupon websites reported record traffic on Cyber Monday. RetailMeNot had 1.1 million visitors, up 57% from a year ago. CouponCabin was visited 400,000 times, up 65% from a year ago. And BradsDeals.com said traffic was up 174%, to 16,000 visitors per hour.

    “The growth has picked up since summer, when 44.1 million adults printed coupons they found on websites. That's a 21% increase from the same period last year ... What's driving coupon use is not surprising: 42% of consumers intend to spend less online this Christmas than they did in 2008...”
    KC's View:

    Published on: December 3, 2009

    The Washington Post reports that a crackdown by the US Food and Drug Administration (FDA) on caffeinated alcoholic beverages “might prove to be a buzz kill for this emerging style.” But there could be collateral damage.

    The Post notes that the FDA has informed 30 manufacturers in the segment that “there are no food additive regulations that permit the addition of caffeine at any level in alcoholic beverages,” and reports that the companies have a month “to present scientific evidence that the combination of alcohol and caffeine is safe. The FDA was prompted in part by complaints from the attorneys general of 18 states that such high-octane energy drinks can be addictive and can create wide-awake drunks who are unable to judge their level of impairment and are therefore prone to engage in risky behaviors such as driving under the influence.”

    According to the story, though, included in the crackdown are some beer manufacturers that brew products infused with caffeine or chocolate, which contains caffeine. Brewers tell the Post that they hope their inclusion was inadvertent, and that the FDA moves won’t end production of products that have a different goal than, say, energy drinks laced with tequila or vodka.
    KC's View:
    I’m with the brewers on this one. My objections to the alcohol-infused energy drinks have been oft-stated here, and I remain convinced that they are a major health disaster waiting to happen. Coffee flavored beer is a very different thing.

    Let’s not get crazy here.

    Published on: December 3, 2009

    Unified Grocers has launched a new consumer-focused, interactive website for its IGA Market Fresh member stores. According to the announcement, “the site, www.igamarketfresh.com, is designed to provide shoppers a broad range of valuable features and personalized consumer content to bring extra value to their online and in-store shopping experiences.

    “Among the many benefits that the site offers shoppers is the ability to create their own personalized, online account to receive e-mail notification of weekly specials, develop personalized shopping lists, and be provided meal ideas and recipes using sale items. Visitors can also view the weekly advertising flyers of the IGA Market Fresh stores in their area, and search the ads by product, brand, and department. Another handy feature is the ability for guests to create their own online cookbooks from thousands of recipes the IGA Market Fresh site regularly provides. Shoppers can also rate and review the recipes that they have tried.”
    KC's View:
    Beyond my usual observation that retailers who somehow have managed to avoid making such investments in the internet are shortly going to be doomed to irrelevance, I need to do a bit of full disclosure here: the Unified/IGA site was created by Webstop, which in addition to being a longtime sponsor of MNB also is the provider of internet services to MNB. For which we are grateful.

    Published on: December 3, 2009

    The Aurora Sentinel reports that a new Save-A-Lot store in that Colorado community plans to distribute 10,000 free spaghetti dinners - consisting of one jar of sauce, a package of pasta, two cans of vegetables and a package of garlic bread sticks - to needy local residents.

    According to the story, the store “mailed out 5,000 vouchers for free spaghetti dinners that can be redeemed at the store when it opens at 8 a.m. Wednesday. Also, store officials plan to give about 5,000 spaghetti dinners to the Food Bank of the Rockies, the Salvation Army, the Arapahoe County Social Services and other organizations near the Aurora store.”
    KC's View:
    One interesting side note in the Sentinel story is that “the Aurora store will differ from the nation’s other 1,200 Save-A-Lot outlets in that it will have a limited deli and limited bakery, in addition to the full line of produce and meat.”

    Which suggests that perhaps Supervalu is tinkering with the format in ways that could have broad impact as CEO Craig Herkert apparently looks to remold the company as a more value-driven enterprise.

    Published on: December 3, 2009

    • The Denver Business Journal reports that Kroger “got caught up in a multimillion-dollar tax fraud scheme that led it to claim $178 million in loss deductions, the U.S. Justice Department said.

    “The disclosure was made Tuesday as a result of a guilty plea entered by an executive of a Reston, Va., investment firm that devised tax shelters for Cincinnati-based Kroger and other corporations.”

    Kroger reportedly has settled with the IRS for an undisclosed amount.

    • PBM Products,a private label baby formula manufacturer, reportedly has won $13.5 million in damages in a suit against Mead Johnson & Co., which it accused of false advertising. Mead Johnson made certain nutrition claims for its products that it said were exclusive to that brand, an assertion that PBM successfully challenged in court.
    KC's View:

    Published on: December 3, 2009

    • Village Super Markets reported that its first quarter net income was $4,542,000, down 29 percent from the same period a year earlier. Q1 sales were $302.8 million, on same-store sales that were up 0.6 percent.

    • Walgreen said that its November sales were up 8.7 percent to $5.36 billion, on same-store sales that were up 3.9 percent.

    • Costco said that its November sales were up nine percent to $6.04 billion, on same-store sales that were up six percent.
    KC's View:

    Published on: December 3, 2009

    ...will return.
    KC's View: