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    Published on: February 2, 2010

    by Michael Sansolo

    This being February 2nd it’s hard to avoid some discussion of Groundhog Day and Groundhog Day. The latter, of course, is a movie and the reason Kevin and I wrote The Big Picture: Essential Business Lessons from the Movies is because we believe films can provide easy ways to explain complex situations. And for today’s holiday and today’s business it would be hard to find a better example than this Bill Murray comedy.

    The basic plot of the movie is that Murray, an obnoxious and vain Pittsburgh weather man, gets perpetually stuck in Punxsutawney, PA, and daily relives the celebration of America’s best known rodent. But the metaphor is more important. Murray’s character is stuck in his nasty habits and simply never progresses. It isn’t until he tries to change, to learn and to grow that he escapes Groundhog Day.

    There’s another way of saying it much more bluntly: Insanity is doing the same thing over and over again and expecting different outcomes. In the best of times that’s an awful strategy. In days like these it’s beyond tolerable for any business.

    Against that background, three speeches from last week’s FMI Midwinter Executive Conference bear consideration well beyond the folks who heard it live.

    First, let’s revisit the Coca-Cola Retailing Research Project I wrote about last week. The topic - winning back meal time - has been discussed for decades in this industry and probably many of you wondered why it was raised again. The problem is that minus a few exceptions the industry is stuck in the same place, losing sales and meal occasions to restaurants.

    Against that backdrop, this becomes a study you have to read to understand the special opportunities presented by the current economic conditions and the perils looming in the nation’s shifting demographics. The suggestions in the study might help you avoid waking up in the same place again and again. (Visit http://www.ccrrc.org and click on “Eating In.”)

    Likewise, many of the topics covered by IRI’s Thom Blishock have been discussed at length before, but also aren’t near completion. It’s easy to argue that the push toward frugality will end as soon as the economy turns around and that shoppers who have spent years enjoying an ever-expanding universe of products choice will never tolerate a reduction. However, if the trends toward frugality and simplicity are for real they play right into the strengths of operators like Trader Joe’s, Aldi and Costco. It’s not like the industry hasn’t seen tectonic shifts in shopping habits before in the wake of economic struggles. Why relive Groundhog Day again?

    Lastly, consider the lessons from political strategist David Plouffe no matter how you feel about his best-known client, President Obama. His point was very simple again: focus on your inner circle to build advocates for your business.

    Here too is a lesson that we’d think everyone would know. Engaged employees form the foundation for great sales. They become advocates with everyone they touch. Yet too often, especially in tough times, employees’ needs are downplayed, their enthusiasm wanes and problems ensue. And after them there is no one more valuable than a loyal customer, yet how often are product deals and specials are geared at new customers, ignoring and possibly insulting long-time loyalists? As Plouffe said, focus on the base and build from there. It works in politics and it can work for you.

    The bottom line is you need to watch Groundhog Day. You need to ask yourself how often you are like Murray’s character, repeating the same day and the same mistakes over and over again and wondering what it takes to end this nightmare. Ask yourself how you could change and grow so that each day takes on great value, meaning and purpose.

    And whether or not you see your shadow, get out of that hole.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His new book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
    KC's View:

    Published on: February 2, 2010

    As part of a broad reorganization effort that is centralizing many of the support functions - including corporate development, legal and government relations, information technology, finance, communications, organizational change management, human resources, strategy and research, and supply chain and procurement - for its various US banners, Delhaize America yesterday announced several new executive appointments.

    Cathy Green has been named president of the Food Lion family of banners, including Food Lion, Bloom, Harveys and Reid’s. She has been serving as COO for Food Lion, Bloom, Bottom Dollar Food, Harveys and Reid’s. In her new role, Green will lead all banner operations for the Food Lion family, including store financial performance, merchandising, pricing, customer service and marketing.

    At the same time, Delhaize announced that Beth Newlands Campbell has been named the new president of Hannaford Supermarkets; she is a former executive vice president of the chain.

    And Meg Ham, the senior vice president of Bottom Dollar Food, has been named president of the discount store chain, responsible for overseeing the significant market expansion that is planned for Bottom Dollar.

    Two weeks ago, it was announced that Rick Anicetti, the CEO of Food Lion LLC, will serve as CEO of Delhaize America Shared Services and will have responsibility for the company’s corporate shared services functions. And Ron Hodge, CEO of Hannaford Supermarkets, will serve as CEO of Delhaize America Operations and will have responsibility for all U.S. retail banner operations.

    The broad goal is to achieve operational efficiencies while maintaining the market differentiators that the company believes are owned by its various banners.
    KC's View:
    I don’t know really know Ham and Newlands Campbell, so this is not meant as any sort of slam on them.

    But they don’t come any smarter - or nicer - than Cathy Green. So I’m thrilled for her as she gets this promotion.

    BTW...how cool is it that Delhaize has women in such high positions in its US operations.

    There must be something in the water at Delhaize. It is worth noting that the company also nurtured Shelley Broader, who went from Hannaford to the company’s Sweetbay division before moving over to the Michael’s craft chain.

    Good for Delhaize. A lot of people talk the talk, but the execs there clearly walk the walk as well.

    Published on: February 2, 2010

    The Indianapolis Star reports that Meijer is getting small - opening “downsized versions of its traditional stores -- putting the focus mainly on groceries.” The retailer “opened its first new-concept location in Niles, Ill., last month in a vacated Value City site. A second is planned for another former Value City in Orland Park, Ill. Next in line: other Midwest cities like Indianapolis.”

    The new format, however, is more than just downsized. According to the story, these 100,000 square foot stores (which is only small when compared to traditional Meijer units, which are twice as large) “will try to find a niche and sell groceries that reflect the ethnicity and demographics of the surrounding neighborhoods.”
    KC's View:
    Smart move by Meijer. In the current environment, you have to give customers what they want, when they want it, how they want it, where they want it, at a price they think is appropriate. This is an important step in that direction.

    Published on: February 2, 2010

    • In North Dakota, the Bismarck Tribune is taking shots at Walmart over the company’s decision to cut more than 11,000 jobs from its Sam’s Club division - and, specifically, the impact on a Bismarck Sam’s, where the effects could have broader implications.

    The issue is one of communications.

    “If you called the Bismarck store to ask how many local workers were cut,” the Tribune writes, “management would refer you to a corporate phone number, which would connect you to a recorded message, which referred you to a Web address, which contained a press release about the company’s decision to eliminate in-store product demonstration staff.

    “If you got through to a representative for Walmart, the parent company of Sam’s Club, you might be told that ‘all the information we have available is on our Web site’.”

    For the record, the job cuts at the Bismarck Sam’s appears to be 17...though the paper says that Walmart isn’t commenting on the record.
    KC's View:
    Also for the record, the average number of cuts per Sam’s is said to be about 20, and the companies to which Walmart is outsourcing certain responsibilities are said to be hiring many of the people being laid off.

    So the issue here is not so much unemployment as it is a sense of being stonewalled.

    To be fair, this is only one side of the story. But it remains a good cautionary note about perception.

    Published on: February 2, 2010

    The Independence, Missouri, School District has announced that beginning in September 2010, “all the district’s high and middle schools will ‘grade’ all foods offered in their cafeterias and vending machines using the NuVal Nutritional Scoring System, which ranks all foods on a scale of 1 to 100. Under the NuVal scale, the higher a food’s score, the more nutritious that food is overall. Typically, NuVal scores are provided on supermarket shelves; this marks the first time they will be used in schools.”
    KC's View:

    Published on: February 2, 2010

    Here’s a surprise - a story from Reuters Health saying that “older adults can cut their cholesterol levels by revamping their dietary fat intake -- even if they are already on cholesterol-lowering statins, a new study finds ... Overall, the study found, people who managed to cut down on butter, and saturated fats in general, showed subsequent dips in their total cholesterol levels -- regardless of whether they were on a statin.”
    KC's View:
    I’m shocked to find out that you can improve your cholesterol levels by cutting back on butter, and by consuming more eating more fish and omega-3 fatty acids. Shocked.

    Published on: February 2, 2010

    A new study from The Nielsen Company says that “the great majority of U.S. households -- 9 out of 10 – say they will be watching Super Bowl XLIV at home or at a friend’s or relative’s house instead of watching it from a restaurant or bar.” However, the study also says that “only five percent of households expect to spend more on food and beverages for the Super Bowl this year.”

    The Super Bowl is said to be a big day for snack sales, as “viewers across the country stock their at-home parties with snacks, nearly 166 million pounds of snacks, especially salty snacks. Potato chips reign, with more than 44 million pounds of snacks sold while tortilla chips and pretzels also rank high for Super Bowl sales. The Super Bowl snack with the greatest growth? Popped popcorn.”
    KC's View:
    At the Coupe household, it will be the same thing it is every year - red beans and rice, corn bread, and cold beer.

    Published on: February 2, 2010

    Valassis announced that it has reached an agreement to settle its outstanding antitrust lawsuits against News America Marketing, a division of News Corporation, and will be paid $500 million.

    Bloomberg suggests that News America may have gotten away cheap, since a judgement against it could have cost the company as much as $3 billion in penalties.

    “The settlement, which came days before a scheduled trial in federal court in Detroit, also resolves a $300 million verdict Valassis won last year against News Corp.’s News America Marketing,” Bloomberg writes. “Valassis alleged that News America violated federal antitrust law by coercing consumer packaged-goods companies into buying free-standing insert coupon booklets from it. News America used unfair business tactics to ‘illegally leverage its market dominance in the in-store advertising and promotions market to harm competition,’ Valassis said in its complaint.”

    The story also notes that “under the settlement, News America will enter into a 10- year shared-mail distribution agreement with Valassis.”
    KC's View:
    Half-a-billion dollars sounds like a pretty good settlement to me.

    Published on: February 2, 2010

    Advertising Age reports that “Coca-Cola has usurped the top slot from PepsiCo in fruit-juice share.”

    Pepsi blames an increase in share by private brand alternatives for the shift, but observers say that a more likely culprit is the company’s aborted redesign of its Tropicana brand, which was nothing short of a disaster. In addition, Coke had a more successful redesign of its Minute Maid brand, and Florida Natural was taking well-aimed shots at both majors.

    Crain’s Chicago Business reports that McDonald’s plans to expand its Russia footprint by 45 stores, which will bring its total there to 290...dwarfing Burger King, which is just launching its business there.

    • The Wall Street Journal reports that investor Ron Burkle’s Yucaipa Cos. has advised Barnes & Noble that it wants to increase its current 19 percent stake in the retailer to 37 percent.

    According to the story, “In his letter to the Barnes & Noble board, dated Jan. 28, Mr. Burkle said it was unfair for the Riggio family, which founded the company, to own 37% of the shares while no other shareholder can hold 20% without triggering the rights plan, designed to thwart any potential hostile-takeover effort ... Mr. Burkle's move comes at a particularly challenging juncture in the bookselling business. Apple Inc., which recently unveiled its much-anticipated iPad tablet device, may eventually emerge as a major seller of electronic books, the fastest-growing segment of the publishing industry. Further, Google Inc. is expected to later this year enter the fray with its own e-bookstore called Google Editions.”

    Yesterday, it was reported that Burkle was looking to make a move on Barney’s New York.
    KC's View:

    Published on: February 2, 2010

    • Supervalu announced yesterday that it has hired Julie Dexter Berg, most recently managing partner and founder of consultancy Brandmaking LLC, to be its new executive vice president and chief marketing officer. Berg, who has brand experience through tenures at Carnation Company and Nestle Foods, will begin at Supervalu on March 15.

    • Costco Wholesale Corporation has announced that Craig Jelinek, the company’s executive vice president in charge of merchandising, has been named President and Chief Operating Officer. Jim Sinegal will continue as Costco’s CEO.
    KC's View:

    Published on: February 2, 2010

    Yesterday, MNB took note about a New York Timespiece about the innovation model used by Apple and Steve Jobs, and suggested that there are ideas here that could and should be adopted by retailers and manufacturers.

    MNB user Bob Vereen wrote:

    Enjoyed your comments about the iPad, and featuritis.

    It made me think about Aldi, which recognizes its role--a purveyor of basics, recognizing that other stores with broader inventories, in-store bakeries, etc., are still going to be shopped by consumers, but by limiting its assortment, operating smaller stores and concentrating on private brands, it reduces its operating costs and thus can sell its limited assortment for less.   And serve its core customers.


    MNB user Rick Rector wrote:

    Good, thought provoking piece. It's just another example of why I continue to read your newsletter even though I'm no longer directly connected to the food business. Keep up the good work.

    One MNB user, however, had mixed emotions:

    I always find your comments on innovation enlightening and amusing.  Enlightening, because you’re usually right.  Amusing, because you haven’t adopted any innovation on your own website or business.



    I believe yours is the only news website I ever encounter where a reader cannot comment directly on a piece right alongside the editor.  ‘Our Views’ have to go thru the black box filter first.

    I actually have to come to the website to read the stories rather than getting a teaser sentence or two on the email to decide if it would be worth my while today.  I know why you do this, but all the other news emails I get give me a taste first, which actually does value my time and intelligence.

    Lastly, not a mention of how the iPad might actually change your business model.  The hype around the hardware is that it will revolutionize the content business, which you are in, but that doesn’t get touched on in your comments.


    All fair criticisms and observations.

    Just to explain my rationale...

    There have been times I’ve considered a “message board” approach to reader comments. It would, to be honest, save me a lot of time...I spend hours each day reading all the email I get. But there are two reasons that I have not adopted that model. One, because I try to respect readers’ time, I think it is part of my job to edit the “Your Views” section and keep it focused; while this means by necessity that it ends up reflecting my priorities even while reflecting your sensibilities, I think that is sort of what people expect of me and MNB. Two, there is a lunatic fringe out there that I don’t want to inflict on the general MNB community. So I’ve stayed with this model to this point.

    I understand that some folks would like a teaser sentence...but the idea that this is how most other sites do it isn’t my idea of a good reason to adopt that model. Again, MNB is designed to be different...though I have tried to cut down on the vague headlines and make them more specific so that a teaser sentence isn’t necessary. (Though sometimes I cannot help myself.)

    Finally, I have no idea now the iPad is going to affect my business. That doesn’t mean that I’m not trying to figure it out, and talking to a lot of people far smarter than I to try to get a sense of how MNB might need to change and evolve.

    This, of course, includes the MNB community. I love emails like this that challenge me, that make me think. I’m always open to suggestions, and read every email that I get...even if there are so many of them that I can’t always respond.
    KC's View:

    Published on: February 2, 2010

    The 82nd annual Academy Award nominations are out this morning, and they include...

    Best Picture
    Avatar
    The Blind Side
    District 9
    An Education
    The Hurt Locker
    Inglourious Basterds
    Precious
    A Serious Man
    Up In The Air
    Up


    Best Actor
    Jeff Bridges, Crazy Heart
    George Clooney, Up In The Air
    Colin Firth, A Single Man
    Morgan Freeman, Invictus
    Jeremy Renner, The Hurt Locker

    Best Actress
    Sandra Bullock, The Blind Side
    Helen Mirren, The Last Station
    Carey Mulligan, An Education
    Gabourey Sidibe, Precious
    Meryl Streep, Julie & Julia

    Best Supporting Actor
    Matt Damon, Invictus
    Woody Harrelson, The Messenger
    Christopher Plummer, The Last Station
    Stanley Tucci, The Lovely Bones
    Christoph Waltz, Inglourious Basterds

    Best Supporting Actress
    Penelope Cruz, Nine
    Vera Farmiga, Up In The Air
    Maggie Gyllenhaal, Crazy Heart
    Anna Kendrick, Up In The Air
    Mo’Nique, Precious

    Best Director
    James Cameron, Avatar
    Kathryn Bigelow, The Hurt Locker
    Quentin Tarantino, Inglourious Basterds
    Lee Daniels, Precious
    Jason Reitman, Up In The Air

    Best Adapted Screenplays
    District 9
    An EDucation
    In The Loop
    Precious
    Up In The Air

    Best original Screenplay
    The Hurt Locker
    Inglourious Basterds
    The Messenger
    A Serious Man
    Up

    KC's View: