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    Published on: February 5, 2010

    The US Department of Labor this morning reports that the unemployment rate for January 2010 dropped to 9.7 percent, down from 10 percent in December. At the same time, the data shows that the US economy shed 20,000 jobs during the month, which the New York Times says deepens concern that relief from the deepest economic downturn in a generation would be slow to come,”

    The Times continues, “As the broader economy gains steam and crucial sectors like manufacturing spring back to life, analysts say the recovery appears to be intact. But the nation’s stubbornly high unemployment rate remains a persistent thorn in the side of optimists, and economists expect the situation to worsen before it gets better.

    “Some forecasts call for the jobless rate to reach nearly 11 percent by year’s end, which would significantly dampen spending by consumers, a critical driver of growth. That has prompted concern that the economy could enter a period of extremely slow growth or even fall into another downturn.”

    The Labor Department also said this morning that it was revising its November and December jobs numbers - saying that in November the economy gained 64,000 jobs rather than the previously estimated 4,000. And the government said that in December, the economy lost 150,000 jobs, not the 85,000 previously estimated.
    KC's View:
    This stuff makes my hair hurt. You would think that an decrease in the unemployment rate would be a good thing, but economists don’t seem so sure. And the experts are predicting that the stock market probably won’t do well off these numbers.

    Beats me. Probably a good thing that I do what I do, instead of what economists do.

    Published on: February 5, 2010

    Crain’s New York Business reports that Fairway Markets is negotiating for space on Manhattan’s Upper East Side, which would be its eighth store in the metropolitan area and yet another move in an expansion plan that seems to be gaining momentum.

    The new store would be on East 86th Street, between Second and Third Avenues, in a space previously occupied by a Circuit City (which went bankrupt) and a Barnes & Noble 9which moved to another location). It would also be just twenty blocks south of a new Costco store that was opened just four months ago, but that has been reported as having trouble catching on with area residents; roughly a third of the Costco’s 450 employees were laid off a few weeks ago because business was not where it needed to be.

    Fairway currently operates two stores on Manhattan’s Upper West Side, plus a store in Brooklyn, one on Long Island and one in Paramus, New Jersey.

    The company plans to open a new store in suburban Pelham. NY, in April, and a store in Stamford, Connecticut, before the end of the year. it also reportedly has plans for a store in Douglaston, Queens.
    KC's View:
    It isn’t hard to imagine that Fairway will have an easier time on the Upper East Side than Costco, since it has a strong reputation in the city and an approach to food that probably is more in synch with how New Yorkers think and act. (I know people who cross Central Park to the west side to shop at the Fairway stores on the west side, and they’ll rejoice at this news.)

    That said...I have to say that I am concerned that Fairway may be growing faster than it should. I know the company has taken on some investors, who probably are looking for faster growth and greater returns. And I know that the folks Fairway know far more than I about what it takes to operate and grow their business.

    But I’ve heard some stories about how the culture there may be fraying at the edges a bit because of the stress of so much growth.

    And the numbers may be hard to make work. They need smart people, which means they are poaching - and sometimes overpaying - people from other companies.

    I don’t cite the Bible much, mostly because I always figure that I’m risking a lightning bolt coming down and knocking me off my chair. But in this case, a quote from the Gospel of Mark seems appropriate:

    “For what does it profit a man to gain the whole world, and forfeit his soul?”

    Just asking.

    Published on: February 5, 2010

    The New York Times this morning reports that the US Department of Agriculture (USDA), in line with new priorities established by the Obama administration, plans “to scrap a national program intended to help authorities quickly identify and track livestock in the event of an animal disease outbreak. In abandoning the program, called the National Animal Identification System, officials said they would start over in trying to devise a livestock tracing program that could win widespread support from the industry.”

    According to the story, “it would be left to the states to devise many aspects of a new system, including requirements for identifying livestock. New federal rules will be developed but the officials said they would apply only to animals being moved in interstate commerce, such as cattle raised in one state being transported to a slaughterhouse in another state.

    “It could take two years or more to create new federal rules, the officials said, and it was not clear how far the government would go to restrict the movement of livestock between states if the animals did not meet basic traceability standards.”

    The now-scrapped system was devised by the Bush administration in 2003 after the discovery of a cow in the US that was infected with bovine spongiform encephalopathy (BSE), better known as mad cow disease.
    KC's View:
    I understand that there was widespread dissatisfaction with the National Animal Identification System, but I cannot help but believe that it is never a good thing when food safety efforts such as this one get scrapped so that the bureaucrats can start over. I’m also uneasy with the notion that this could be done on a state-by-state basis. We need a consistent, federal approach to issues such as this one.

    I guess that in the end, if we eventually have a better system in place it will be worth the effort. But it just strikes me that we ought to be able to do better than this.

    Published on: February 5, 2010

    The Denver Post this morning reports that grocery clerks and meat cutters at Safeway and Kroger-owned King Soopers stores there have approved a new four-year contract that “includes a bonus, wage hikes, improved health care benefits and a plan to stabilize the pension plan, while preventing a 21 percent health-insurance premium hike for about 2,000 retired workers.”

    The new contract covers 3,000 employees in Denver, Broomfield, Parker and Castle Pines; workers in other parts of the state, who previously had rejected a so-called “final offer,” are scheduled to vote on the deal during the next two weeks.
    KC's View:

    Published on: February 5, 2010

    Two great lines from Cory Hedman, director of food safety and quality at Delhaize America, speaking at the annual food safety conference sponsored by The Consumer Goods Forum (the entity created when the organization formerly known as CIES merged with the Global Commerce Initiative (GCI) and the Global CEO Forum).

    “People generally want to do what’s right – they just don’t always know the right thing to do.”

    “People don’t care how much you know until they know how much you care!”
    KC's View:
    Seems to me that at a conference that focuses mostly on process and science, Hedman rightly puts the spotlight on people - the importance of training, and the critical interpersonal connections that are important when things are going well, and can make all the difference when disaster strikes.

    Published on: February 5, 2010

    The Lakeland Ledger reports that a report from a state environmental agency has concluded that a ban on plastic bags is not necessary: “The Florida Department of Environmental Protection had released a tentative report last fall in which it appeared to be suggesting a ban on retail plastic bags. But in the final report, required by a bill passed in 2008, the DEP recommended that the Legislature consider bills to ‘discourage’ the use of the bags.

    “Options included an outright ban of the bags, a tax on the plastic bags, or requiring stores to offer biodegradable bags.”

    The Ledger also notes that Publix Super Markets already has reduced its annual use of plastic bags by 400 million, which adds to the case that an outright ban is not necessary.
    KC's View:

    Published on: February 5, 2010

    • Sprouts Farmers Market in Round Rock, Texas, has earned the EPA’s GreenChill Gold-Level Store Award for green refrigeration technology.   According to the announcement, “The Round Rock location is the first in Texas and one of just 13 grocers in the nation to achieve gold certification from the GreenChill Advanced Refrigeration Partnership, a voluntary business-government program managed by the U.S. Environmental Protection Agency. The partnership’s chief goal is to reduce emissions of refrigerants that damage the Earth’s protective ozone layer and contribute to global warming.”
    KC's View:

    Published on: February 5, 2010

    Business First of Buffalo reports that Max henderson Jr., the former executive vice president of Tops Markets, has been named president of Southern Family Markets, which is owned by C&S Wholesale Grocers and operates such banners as Bruno’s and Piggly Wiggly.
    KC's View:

    Published on: February 5, 2010

    • BJ’s Wholesale Club reports that its January sales rose 13 percent to $742.6 million, on same-store sales that were up 8.4 percent.

    • Dollar Tree said its fourth quarter sales rose 12 percent to $1.56 billion, with same-store sales up 6.6 percent. Annual sales at the retailer were $5.23 billion, up 13 percent from the prior year, on same-store sales that were up 7.2 percent.

    • Burger King said that its second quarter profit was $50.2 million, up from $44.3 million during the same period a year ago. Q2 revenue rose two percent to $645.4 million, on same-store sales that were down two percent.

    • Sara Lee Corp. said that its Q2 profit was $371 million, compared to a loss of $17 million during the same period a year ago. Sales for the quarter were flat at $2.9 billion.

    • Kellogg Co. reported fourth quarter earnings of $176 million, down from $179 million a year earlier. Q4 revenue fell 1 percent to $2.9 billion.

    For the full year, Kellogg’s earnings climbed five percent to $1.21 billion, compared with $1.15 billion in the prior year. Annual sales declined two percent to $12.58 billion.
    KC's View:

    Published on: February 5, 2010

    ...will return.
    KC's View:

    Published on: February 5, 2010

    It is almost too early to assess exactly what happened at Toyota, and what the company needs to do in order to salvage its badly damaged reputation, not to mention fix all the problems with its cars.

    However, it does seem as if we are watching a business school case study play out right before our eyes. The company, long considered the gold standard, seems to be doing everything wrong these days. It has been making mistakes in the production process, and then not dealing with the questions being raised by the public and media in a forthright and timely manner.

    This was never a good policy, but especially today, when communication about such issues can take on a life of its own, companies simply cannot and should not stonewall or procrastinate. Or appear to stonewall or procrastinate.

    Companies ought to be taking a close look at how Toyota has handles this situation and assessing whether they have the culture and infrastructure to deal with problems with a more realistic and 21st century approach. It is also a good lesson that there is no such thing as the unassailable business advantage ... and that you always have earn that advantage every day.

    Brand equity depends on it.

    So here’s a business metaphor for you.

    About 18 months ago, I was hitting the gym three and four days a week, learning to box. I was jogging three days a week. I lost a bunch of weight. I felt great. I looked about as good as somebody like me is going to look.

    Then, meniscus surgery on my knee. Rehab. But it never was quite right, so I babied it. Stopped hitting the gym. Stopped jogging with any regularity. Gained a bunch of weight back.

    When I finally went back to the gym this week, filled with self-loathing and disgust, it was with the knowledge that I had done this to myself. I lost focus. I got complacent. I forgot that there is no finish line when it comes to staying in shape and being healthy (except, of course, death). It requires constant effort and maintenance. Sort of like doing business. Or just living the best life you can.

    It was interesting, though. When I started jumping rope and hitting the heavy bag, it wasn’t as bad as a thought it would be. Muscle memory is a great thing. And my knee didn’t hurt, which shocked me.

    Now, to be honest, I’m incredibly sore right now. It’s a good sore, though. And it will get easier, though never easy. As long as I maintain focus. And discipline.

    Like doing business. And living life. of the things that propelled me back to the gym is the fact that much of my business life has been caught on video. My personal website has just been redesigned by a great guy named Adam Havens, and we’ve posted some videos there...and the contrast between how I looked when my weight was down and when it went back up was sort of jarring.

    Vanity, thy name is Content Guy.

    I’m pretty proud of the new site, though. I hope you’ll check it out, since it shows all the stuff I do outside MNB:

    When we watched the season premiere of “Lost” this week, it was with the expectation, fueled by various reviews, that a number of the mythological questions raised by the series over the past five years. On that level, I was disappointed...because I walked away from Tuesday’s two-hour episode about as confused as ever.

    But loving it. “Lost” is wonderful television - challenging, confusing, outrageous and audacious. But never boring. This is the last season for “Lost,” and I assume they will answer many questions, but I’m almost hoping that they don’t wrap up the package too neatly. Because if there is one lesson of “Lost” it is that all decisions have consequences ... usually farther into the future than most of us can imagine.

    When the Oscar nominations were announced earlier this week, I was thrilled that for the first time in years I had seen many of the movies in contention. It was just last Saturday that I saw The Hurt Locker, the marvelous look at bomb disposal units in Iraq directed by Kathryn Bigelow.

    The Hurt Locker is an exercise in constant tension. Beyond the various relationships in the movie, there is hardly a moment in the movie when you don’t worry about a surprise explosion or terrorist attack. By the end of the film, you almost feel drenched - Bigelow is expert at putting the viewer in the middle of the action.

    If there is a business lesson in The Hurt Locker, it is the downside and upside of myopia. Tunnel vision almost never is a good idea, because we live in a world of such nuance and complexity that a contextual view of problems and scenarios almost always improves your ability to make both strategic and tactical decisions. On the other hand, the vivid characters in The Hurt Locker make it clear that sometimes you have to be myopic...because the minute you lose focus, you put yourself and your mission in jeopardy.

    Great movie. And for the moment at least, it would get my vote for Best Picture of the year.

    My wine of the week is the 2005 Chateau Plaisance Bordeaux Superieur from France, which is a wonderfully tasty red that goes great with a nice thick and spicy steak. I have no idea where it came from - I found it down in the wine cellar (which is what I like to call my damp, cool basement that just happens to have wine racks), and thought it was great surprise. But it appears to go for about $20, and strikes me as a good deal at the price.


    If I were rooting with my head, I’d favor the Colts this weekend. But I’m rooting with my heart (the same heart that was rooting for the Jets), so I’ll be cheering for the Saints.

    And chowing down on red beans and rice while I do so.

    That’s it for this week.

    Have a great weekend, and I’ll see you Monday.

    KC's View: