retail news in context, analysis with attitude

Published on: January 4, 2010

by Kevin Coupe

The beginning of a new year, or a new decade for that matter, seems like a good time to contemplate the future. To set goals, and to consider what is possible in terms of both personal and professional development.

The future, however, can be a tricky subject about which to prognosticate.

Take, for example, the movie 2010, which was released in 1984 as a much-anticipated sequel to the legendary 2001: A Space Odyssey. 2010 wasn’t an enormous success, owing in part to the fact that is was a sequel to one of the iconic science fiction movies of all time that was directed by Peter Hyams instead of Stanley Kubrick; the film 2010 also had a more literal narrative than the original film, looking to answer the seemingly unanswerable questions posed by the Kubrick film that was by turns metaphorical and allegorical.

(To be fair, novelist Arthur C. Clarke, who wrote the original novels “2001”and “2010,” was involved with both productions. But that didn’t stop the two movies from appearing not just to have had different parentage, but have been produced on different planets.)

Sure, they had to look a quarter century into the future, so there was no reason for the folks behind 2010 to guess that the Houston Astrodome would no longer be the home of the Houston Astros, as is mentioned in one aside by an astronaut played by John Lithgow.

But it is interesting to note that in the film’s view of the year 2010, mankind is embarking on a second manned space flight to Jupiter. Not only have we largely stopped reaching out to other planets, but our version of a space station is a lot more modest than the one envisioned by the screenwriters. One could argue that the filmmakers had too much imagination, or that humanity has too little; either way, they got it wrong.

While 2010 correctly guessed that the world would be facing enormous political pressures and international crises, the film believed that they would be between the US and Russia and focused in Central America; terrorism isn’t mentioned, radical Islam isn’t a plot point, and an old fashioned naval blockade seems to be the military tactic of choice. (Oh, for the good old days!)

One correct prediction by the film was the ubiquity of laptop computers. I vividly remember, when I saw the film’s original release, being jazzed by the depiction of Roy Scheider’s character as sitting on a beach working on a Mac laptop; they may have gotten the shape of the laptop wrong (and used the old multicolored Apple logo), but the essence of the projection was right on. (They didn’t get the sophistication of operating systems and graphics right, however - all the computers in the film have clunky interfaces that are about as modern as an Atari Pong game.)

So, what do we learn from this dissection of a 26-year-old movie?

For one thing, nobody knows - really knows - anything. Even the very best predictions by the most esteemed futurists are, at their core, guesses. Informed guesses, perhaps. Lucky guesses, sometimes. But guesses nonetheless.

But it doesn’t matter. You have to prepare for what can happen, not what you think might happen. “Readiness is all,” as Shakespeare wrote in “Hamlet.”

The coming year will be replete with enormous challenges. Retailers and manufacturers will be working to gauge the speed and extent to which the economy will recover from the free fall of just 14 months ago. This will impact not just the kinds of products and services that they offer, but their inventory levels and the extent to which they invest in people, in training, in infrastructure and innovation.

It is likely that during the next 12 months, some companies will change ownership, some executives will change companies or be dismissed outright, and some brands (both national and private) will surge while others will fade. There will be persistent food safety challenges, and the possibility that consumer confidence in the integrity of the food supply will continue to erode, a little bit at a time. It is even possible that some new competitor will come on the scene with a game-changing innovation that catches everybody by surprise...everybody, that is, but the consumers who have been yearning for such an innovation without even realizing it.

You have to prepare for what can happen, not what you think might happen.

Some of it we will get right. Some of it we will get wrong. There will be times that the strategies will be right and the tactics will be wrong, and other times when people and companies will confuse strategic and tactical thinking, and then wonder why progress is elusive.

But the most important thing, it seems to me, is to continue to focus on innovation, to not be afraid of making mistakes, to not be timid. We all know who the industry innovators are, and who they have been for the past years and decades...but for the industry to continue to be successful - to be relevant - that list must grow.

In 2010, we have to strike the word “conventional” from our vocabularies. We cannot just be reactive, but have to find ways to peer around the corner and see what may and could happen.

2010 imagined a man using a laptop computer on a beach, and it ended up being just a a fraction of the actual progress made by the actual 2010.

That is some of what I thought about while watching a 26-year-old movie. The challenge is this - to look not 26 years into the future, but two years, six years, 12 years...and to use our imaginations as much as our calculators.

”Content Guy” Kevin Coupe is the co-author, with Michael Sansolo, of the new book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” available by clicking here .

Published on: January 4, 2010

There is a major, 9,000-word profile of Whole Foods CEO John Mackey in the January 4, 2010, edition of The New Yorker, examining his personal obsessions, his professional deportment, and the way in both of these reflect upon and animate the company he founded.

The piece has references to everything from corporate transubstantiation to something called Grofian breathing, and traces Mackey’s growth as both a person and a business leader over the past three-plus decades.

To read the whole piece, click here. But if you’d like just a taste, read the following section:

“Depending on where you are on the spectrum of epicurean cultural politics, you may consider Whole Foods to be a righteous grocer or a cynical con, a prod to self-improvement or a gateway to decadence, a neighborhood boon or a blight, a force for social good or a place to pick up chicks. To the likes of Wal-Mart and Costco, it has been an impetus to carry healthier, more judiciously sourced food. To small neighborhood natural- or gourmet-food shops, it has sometimes been an impetus to go out of business. It has enabled organic and artisanal producers to scale up, and put pressure on the giants to at least pretend that they are scaling down. It has less than a one-per-cent share of the American grocery market, yet it has unquestionably transformed the way Americans produce, buy, and eat food. Its name, justifiably or not, is shorthand for a food revolution.

“To some, Whole Foods is Whole Paycheck, an overpriced luxury for yuppie gastronomes and fussy label-readers. Or it is Holy Foods, the commercial embodiment of environmental and nutritional pieties. To hard-core proponents of natural and organic food, and of food production that’s local, polycultural, and carbon-stingy, Whole Foods is a disappointment - a bundle of big-business compromises and half-steps, an example of something merely good that the perfect can reasonably be declared an enemy of. It’s a welter of paradoxes: a staunchly anti-union enterprise that embraces some progressive labor practices; a self-styled world-improver that must also deliver quarterly results to Wall Street; a big-box chain putting on small-town airs; an evangelist for healthy eating that sells sausages, ice cream, and beer.

“The most perplexing paradox of them all, and in many respects their root source, is Mackey himself.”

In other Whole Foods news...just as this issue of The New Yorker was being delivered, it was announced that Mackey - under pressure from various corporate watchdog groups - had decided to relinquish the title of chairman, but will remain as CEO...thus ending complaints that it is bad corporate governance for one person to hold both titles.

Mackey will remain on the board. He will be succeeded as chairman by John Elstrott, who has been on Whole Foods’ board since 1995 and a lead director since 1991.

In his blog, Mackey said that the shift would not result in any measurable change in how the company operates, since the “lead director” has essentially served as the de facto chairman since 2000. But, Mackey added, he believed that it is not in the best interests of the company “to fight this misperception over a title any longer.”

Published on: January 4, 2010

According to a new survey by the New York Times and CBS News, “Quietly but noticeably over the past year, Americans have rejiggered their lives to elevate experiences over things ... nearly half of Americans said they were spending less time buying nonessentials, and more than half are spending less money in stores and online.”

But apparently it is not just a matter of spending less, according to the Times story: “They are also doing more. Some are working longer hours, but a larger proportion, the poll shows, are spending additional time with family and friends, gardening, cooking, reading, watching television and engaging in other hobbies.”

The trend seems to be borne out by similar studies done by the US Department of Labor.

Experts call the trend “experience consumption” - rather that buying things, they are engaging in shared activities that can occur in places ranging from the hiking trail to the movie theater, an art museum to the kitchen.

Published on: January 4, 2010

The Financial Times reports that Walmart - already considered to be a paradigm of efficiency when it comes to supply chain costs - plans to launch a new initiative “to cut billions of dollars of costs from its supply chain by combining its store purchasing across national frontiers in a new stage in the globalisation of its business.”

One of the central goals of the plan is to wherever possible eliminate third party procurement companies - middle men - and buy directly from manufacturers all over the world.

According to the story, by Jonathan Birchall, “As part of its effort to combine purchasing for the 15 countries in which it operates, Walmart has established four global merchandising centres for general goods and clothing, including a centre in Mexico City focused on emerging markets, and a centre in the UK to serve its George brand. It is also shifting to direct purchasing of its fresh fruit and vegetables on a global basis, rather than working through supplier companies.” Walmart also “expects to expand the programme through other categories, including seafood, frozen food and dry packaged groceries.”

Published on: January 4, 2010

The Financial Times reports that Tesco may be facing its most challenging year in more than a decade, on a variety of fronts:

• At home, the company wants to stave off the slightly eroding market share trend that it has experienced in recent quarters, as the competition - including Sainsbury, William Morrison Supermarkets and Walmart-owned Asda Group - has upped its game.

• At the same time, Tesco is looking to build a major bank business in the UK, an effort that some experts suggest will take longer and cost more than the company expects.

• Speaking of costing more and taking longer than expected...Tesco also has to attend to its Fresh & Easy Neighborhood Market business in the western US, which is way behind expectations both in terms of size and profitability. Some of this can be attributed to a worse-than-anticipated California economy, and some of it to Tesco’s less-than-optimal reading of US consumer needs and desires; however, it seems generally believed that Tesco at the very least has to reverse the perception that its US business has been a misfire.

• And finally, Tesco needs to continue with other parts of its global expansion, especially in markets such as China and India.

Published on: January 4, 2010

Pennsylvania-based Weis Markets announced last week that it “has lowered the prices on 2,600 staple items, effective December 31, and frozen these lower prices for 90 days through April 1, 2010.  It has also moved to freeze the prices on an additional 624 products.”

In a prepared statement, CEO David J. Hepfinger said, “"It is clear our customers remain in a cautious mood due to the weak economy. Over the past year, our Price Freeze program has generated $16 million in savings for our customers. With our current program, we have lowered the prices on thousands of our products – and have committed to maintaining these lower prices through the spring.  As a result, we are able to offer our customers consistent, long-term savings and values on the products they are looking to purchase."

Published on: January 4, 2010

The Orlando Sentinel reports that Sedano’s, which operates more than two dozen Hispanic supermarkets in South Florida, plans to buy three Albertsons stores in Central Florida and convert them to its format; if the experiment goes well, the chain reportedly will open more stores in the Central Florida region.

The move is said to reemphasize the importance of the growing Hispanic market in the Orlando area. According to the Sentinel, “Sedano's joins Bravo, another Hispanic supermarket chain that has several locations in Central Florida. Publix, meanwhile, has a Sabor specialty market in Kissimmee.”

Published on: January 4, 2010

The ForeSee Results E-Retail Satisfaction Index says that during the just-completed holiday season, online satisfaction in the US is up nearly seven percent compared to the same period a year ago, from 74 in 2008 to 79 on the study’s 100-point index.

Among the reasons for the improvement, as explained by ForeSee: “E-retail is actually improving. Many US e-retailers have embraced the findings that improving online customer experience has a demonstrable and tangible effect on their bottom lines and made changes to online shopping that are in part responsible for their increase in satisfaction.”

In addition, according to the report, “Scores were up more dramatically for first time visitors than for repeat visitors (though repeat visitors’ scores are also up). Since first-time visitors are typically far less satisfied than repeat visitors, this increase is a good sign that retail websites, as a whole, have truly improved their visitors’ experiences.”

The survey, it must be noted, measures only the nation’s top 40 e-retailers...so it is possible that smaller venues are not making the same investments and seeing the improved satisfaction.

The clear winner, according to ForeSee, was Amazon.com, which “is the only website that scored an 87, the highest score ForeSee Results has ever recorded for an online company (a score of 80 is considered the threshold of excellence in studies using this methodology). Netflix, which tied for first last year, came in second at 86. Nine other retail websites registered scores above 80,” including QVC, Cabela’s, Apple, Avon and LL Bean.

Published on: January 4, 2010

A very good idea has come to the internet, courtesy of “Supermarket Guru” Phil Lempert, who is launching “the Koodies Social Network ... the place where Koodies, essentially kid foodies, can go to share recipes, post cooking shows, review new kid friendly products or kitchen gadgets, share nutrition and healthy eating tips, enter recipe contests, and even post photos of their favorite and delicious kitchen creations. The site is similar to other popular social networks, but stands out as a place where kids ages 2-16 and their parents can network and share their kitchen experiences and love for all things food; and even more importantly a place where the next generation can learn about food.”

In the announcement of the new site, Lempert says, “We believe that the move towards a greater awareness about everything food related is a great thing, as our nation and especially our children are deep-set in an obesity crisis. Taking time to think about foods, where they come from, how to prepare meals, and sit down to enjoy them is not something that is practiced or enjoyed by most Americans. Our goal is to acknowledge Koodies and give them a space to share and exchange information with the intent to bring back the positive associations with food that have been lost in the hurried, often hectic, unhealthy, mindless and last-minute decisions (sometimes struggles) about what to eat.”

The site can be viewed at www.koodies.net.  

Published on: January 4, 2010

While McDonald’s may sometimes be criticized for the quality of its cuisine, USA Today had a report the other day noting that the fast feeder also offers certain advantages - especially when it comes to food safety.

The story said that if you were to compare a McDonald’s hamburger with one cooked at home from meat bought at a local supermarket, the two items wouldn’t even be close “unless you buy your own meat directly from a packing plant that you'd not only inspected yourself but was also inspected by a third party. And you demand the meat be tested multiple times for E. coli O157:H7, salmonella and coliform bacteria.”

According to the story, McDonald’s processes are an example of “extreme food safety,” and the kind of vigilance that few other companies practice.

Published on: January 4, 2010

The Puget Sound Business Journal reports that Amazon.com, which has been largely successful at staving off attempts by various states to impose a sales tax on the products it sells and ships to those locations, is likely to face renewed pressure on the sales tax front this year as more and more states face severe budget crises.

According to the story, “For Amazon, the stakes are high. The company has had notable success growing its e-commerce business in a tough economy, and its shares have reached several all-time highs. By not collecting sales tax in most states, the company has a competitive advantage over brick-and-mortar rivals. Amazon is keen to hold onto that advantage as it engages in price wars with other retailers across a slew of product categories.

“If key states, including populous California, succeed in forcing Amazon to collect sales tax, the company will have to work harder to hold onto bargain-hunting shoppers and their wallets. Such a move may also spur Amazon to intensify its push for national legislation creating a simpler and more uniform system for online sales tax collection across all 50 states.”

Published on: January 4, 2010

• Reuters reports that UK online grocer Ocado experienced a 30 percent increase in sales during December - including as 50 percent increase just during the last week of the month.

"The pace at which customers are embracing the convenience of grocery shopping online continues to increase and we are extremely excited for the coming year," said CEO Tim Steiner.

The company has been engaged in a major price reduction program as it looks to compete with both other e-grocery services such as Tesco, and the UK’s major brick-and-mortar food stores.

Published on: January 4, 2010

• The Financial Times reports this morning that Kraft is planning to increase its $16.9 billion acquisition bid for Cadbury as it faces resistance from Cadbury shareholders who believe that the current bid is too low. The company also is expected to extend its deadline for shareholders to accept its offer from tomorrow to January 19.

• The Sacramento Bee reports that as of this week, California is barring restaurants from cooking with trans fat, “becoming the first state to crack down on the substance tied to clogged arteries, strokes and coronary heart disease.

“The ban is hailed by supporters as a way to protect diners who routinely have not been aware of consuming trans fat at some restaurants because they don't see the meals cooked or the ingredients used.”

Restaurants have known for a year that January 1, 2010, was the date upon which they had to change the way they formulate products; bakeries will be required to comply with the law one year from now.

• ABC News reports that the District of Columbia is now the first major city in the nation with a surcharge for non-reusable plastic and paper shopping bags. The fee is five cents per bag, with the money slated to go toward cleaning up the local and polluted Anacostia River.

According to the story, it is generally anticipated that most local retailers will offer a small rebate to customers who bring in their own bags...along the lines of what Whole Foods already does there.

• Birds Eye Foods, which owns roughly a quarter of the nation’s frozen food manufacturing business, reportedly has been sold to Pinnacle Foods Group for $1.3 billion.

• The Sacramento Bee reports that as part of its national plan to open 750 new stores around the US over the next couple of years, 7-Eleven will open 50 of them in Northern California, increasing its fleet there by 10 percent. The company terms this “aggressive growth mode,” as it looks for high traffic sits where it can bring an improved mix of convenience products and even fresh foods.

• The Nashville Business Journal reports that seven Kroger units in central Tennessee plan to stop being open 24 hours a day, and will close at night because “there hadn't been enough overnight sales to justify keeping them open. Hours may be extended in the future if traffic picks back up,” according to a company spokesperson.

Published on: January 4, 2010

...will return.

Published on: January 4, 2010

In the final week of regular season National Football League action...

Indianapolis 7
Buffalo 30

Jacksonville 17
Cleveland 23

New England 27
Houston 34

NY Giants 7
Minnesota 44

Atlanta 20
Tampa Bay 10

Green Bay 33
Arizona 7

Baltimore 21
Oakland 13

Tennessee 17
Seattle 13

New Orleans 10
Carolina 23

Chicago 37
Detroit 23

Pittsburgh 30
Miami 24

San Francisco 28
St. Louis 6

Philadelphia 0
Dallas 24

Kansas City 44
Denver 24

Washington 20
San Diego 23

Cincinnati 0
NY Jets 37


This means that when the playoffs begin next week, the six AFC teams in the postseason will be the Indianapolis Colts, the San Diego Chargers, the New England Patriots, the Cincinnati Bengals, the NY Jets, and the Baltimore Ravens, while the NFC playoff teams will be the New Orleans Saints, the Minnesota Vikings, the Dallas Cowboys, the Arizona Cardinals, the Green Bay Packers, and the Philadelphia Eagles.

Next weekend, the Jets and the Bengals will have a rematch of yesterday’s game on Saturday, as will the Eagles and the Cowboys. On Sunday, the Packers will play the Cardinals and the Ravens will face off against the Patriots.

Published on: January 4, 2010

"My team was mesmerized by Kevin’s presentation. Thanks to Kevin, they left the meeting newly energized with a strong sense of purpose.”
- Donna Giordano, President, QFC

You’ve scheduled a meeting and are looking for a speaker who can energize the audience. Who can bring context to relevant headlines shaping your business, and share a unique understanding of customer dynamics. Who can offer a provocative perspective on the kind of thought leadership that can propel businesses into the next decade of the 21st century.

This is what “Content Guy” Kevin Coupe does every day on MorningNewsBeat, and it is what he has done at hundreds of conferences in the US and abroad.

It is what he can bring to your meeting or conference.

“What a great job you did at our management retreat! Our group felt your presentation was filled with fresh, practical information and is excited about trying some new marketing approaches.”
- Norman Mayne, CEO, Dorothy Lane Market

Want more information?

CHECK OUT THE ALL-NEW KevinCoupe.com