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    Published on: February 18, 2010

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    Hi, I’m Kevin Coupe and this is MNB Radio, available on iTunes and brought to you by Webstop, experts in the art of retail website design.

    A few years ago there was a documentary called Who Killed The Electric Car?, which looked at the reasons and people behind the virtual destruction of the electric car industry in the United States. The film came out in 2006. The events in question took place in the 1990s.

    Apparently, you cannot keep a good idea down.

    The New York Times reported the other day that “the San Francisco building code will soon be revised to require that new structures be wired for car chargers. Across the street from City Hall, some drivers are already plugging converted hybrids into a row of charging stations.

    “In nearby Silicon Valley, companies are ordering workplace charging stations in the belief that their employees will be first in line when electric cars begin arriving in showrooms. And at the headquarters of Pacific Gas and Electric, utility executives are preparing ‘heat maps’ of neighborhoods that they fear may overload the power grid in their exuberance for electric cars.”

    Among the cars expected to be available: the Nissan Leaf, and the Chevrolet Volt.

    The Times noted that “as automakers prepare to introduce the first mass-market electric cars late this year, it is increasingly evident that the cars will get their most serious tryout in just a handful of places. In cities like San Francisco, Portland, Ore., and San Diego, a combination of green consciousness and enthusiasm for new technology seems to be stirring public interest in the cars.”

    It isn’t only these markets that seem to be preparing for the electric car. We had a story recently on MNB about how a new Whole Foods being built in Connecticut is going to have free charging stations in the parking lot for electric cars that are parked there. It does not take an enormous leap of imagination to think that this approach will be repeated elsewhere...at first by companies thinking that such stations reinforce their image and value proposition, and later by companies who see a wave coming and want to be there.

    I keep thinking, though, about the auto executives who more than a decade ago decided that there was no future for the electric car.

    If they had believed otherwise - if they had embraced the notion that a better, affordable, more efficient and effective electric car could be built and popularized - can you imagine where we would be today?

    Better off than we are now, I suspect.

    Of course, there will be folks who will minimize the importance of this trend, who will say that this for San Francisco and Pacific Northwest liberal tree huggers and nobody else. They’re wrong. They’re just so locked into old-world thinking - like those auto company executives of a decade ago - that they are unwilling to accept the notion of change. (Or they are oil company executives. Take your pick.)

    It is this sort of thinking that led to stories like another one run by the Times the other day, pointing out the opening of a new high-speed rain line in China - one of 42 that have either opened or will open in that country by 2012, linking the country with more than 8,000 miles of track, creating jobs, making China more economically competitive.

    Compare that to the US, where our first high speed rail line is scheduled to open in 2014 - with an 84-mile route that connects Tampa and Orlando. Great if you want to go from the west coast of Florida to Disney World, but probably not a significant achievement when you consider that at that point we’ll be almost one-sixth of the way through the 21st century.

    There is a lot of discussion about American exceptionalism, and it is a concept one would like to believe in. But you look at how we approach innovations like the electric car and high speed rail lines, and you have to wonder if we really deserve the description.

    Certainly there continue to be examples of how America is at the head of the innovation curve. Steve Jobs of Apple, to use one easy example. I might argue that Wegmans is a great example of American innovation at its best. But there aren’t enough examples. Not nearly enough.

    Now, we can’t all build high speed trains or electric cars. But we certainly have the ability to create an environment for innovation in our businesses. We have the opportunity to be exceptional and forward-thinking, rather than tied to old world ideas and constructs.

    But it requires action. It demands persistence, because if you aren’t personally and professionally exceptional each and every day, then all you really have is a resume and a reputation.

    And it has to start now, because without it, irrelevance is just around the corner. We’ll know it, because we’ll be mired in the mud of bureaucracy and conventional thinking...watching the high speed trains and electric cars go by.

    For MNB Radio, I’m Kevin Coupe.
    KC's View:

    Published on: February 18, 2010

    The Chicago Sun Times reports this morning that Alderman Anthony Beale believes he has the votes to break a current stalemate and allow Walmart to open more stores within the city limits. Beale says that he has corralled the votes by focusing on the store in the Chatham neighborhood, but rather than Pullman Park - a “massive mixed-use project on the former Ryerson Steel property between 103rd and 111th along the Bishop Ford Freeway would be anchored by a Wal-Mart Supercenter that sells groceries desperately needed in the heart of the ‘food desert’ ... the fact that his project is so huge and far from any other retailers makes it easier for him to garner support.”

    There currently is only one Walmart within the city limits, with hard opposition for more stores largely orchestrated by anti-Walmart union interests and smaller retailers.
    KC's View:
    At some point, ideology has to be put aside in neighborhoods where people simply do not have access to affordable retail and decent jobs. Of course, that’s a hard argument to make to ideologues.

    Published on: February 18, 2010

    The Richmond Times-Dispatch reports that Delhaize-owned Food Lion has “launched a new pricing strategy yesterday designed to bring prices down at its 1,300 stores. The North Carolina-based grocer said thousands of products will be discounted when the strategy is completely implemented.

    The company said this is a long-term pricing strategy, not just a short-term marketing tactic, and would include both national and private brands.
    KC's View:
    There is a lot of tumult in Food Lion’s marketing areas. Just in the past few weeks, we’ve seen the demise of Ukrop’s with its acquisition by Ahold ... reports that Walmart has become the dominant grocer in the Charlotte market ... and the broader feeling that the so-called “new normal” has created an environment in which value-driven retailing is the most sustainable model.

    For Food Lion, this plays right into its wheelhouse. And the good news is that it has other formats - including Bloom and Bottom Dollar - to appeal to both ends of the marketplace. Sounds like a good strategy to me.

    Published on: February 18, 2010

    New research published in the American Journal of Clinical Nutrition indicates that the Guiding Stars nutrition labeling system “had a positive influence on food purchasing decisions after the implementation of the zero-to-three star rating system and that these changes continue to be significant in achieving healthier food choices in the supermarket.”

    Guiding Stars, which was created by Delhaize-owned Hannaford Bros., uses a proprietary algorithm to evaluate every product in the store and then assign one, two or three starts to products qualifying as nutritionally good, better and best.

     According to the announcement, “the study authors utilized purchasing data from 2006 to 2008 obtained from Hannaford Supermarkets, which have 168 stores located in northern New England and New York.  They examined the data before Guiding Stars was introduced and one and two years after it was implemented.   In order to understand the program’s impact on specific grocery categories, ready-to-eat cereal was examined as a case study.  Study findings revealed that the purchasing of star-rated cereals significantly increased at one-year and continued to increase in year-two.  “Although we did not measure individual diet, the purchasing of low-sugar, high-fiber cereals increased greatly after program implementation. This finding is of particular importance to our understanding the potential impact of such programs on consumer diet,” Sutherland said.
    KC's View:
    It always is heartening when customers actually do what you want them to do ... in this case, actually buying healthier products when they are clearly pointed out to them.

    Go figure.

    Published on: February 18, 2010

    • Walmart said yesterday that 54 percent of its employees have opted into the company’s health insurance program, up from 52 percent a year ago. However, the company also said that the total number of Walmart employees who have any kind of health care dropped from 94 percent last year to 87 percent this year ... a shift that the company said it is trying to account for.

    Walmart has come out in favor of federal legislation that would require big companies to provide health care, and it said the numbers indicate that the current health care system is not sustainable.

    • The Financial Times reports that analysts at JPMorgan are saying that Walmart-owned Asda Group in the UK plans to open as many as 100 small format stores over the next three to five years, as well as opening 150 nonfood stores.

    According to the story, “It is expected to put more emphasis on smaller format stores - although it will say this is not a convenience chain - online shopping, and utilising Walmart's buying power to cut costs.”

    JPMorgan said Asda believes that three quarters of its future growth will come from smaller stores, online and non-food.
    KC's View:

    Published on: February 18, 2010

    • The Richmond Times-Dispatch reports that the Virginia State Senate has easily passed legislation that would require online retailers to collect a five percent state sales tax and sent the bill to the House of Delegates; if it passes there, it is not considered likely to be signed by Gov. Bob McDonnell, who recently won election by vowing to veto any new taxes.

    Supporters of the bill include brick and mortar retailers who feel that the lack of an online sales tax puts them at a competitive disadvantage. Opponents include people who feel that such a tax would kill jobs at precisely the time that the state’s economy is trying to emerge from recession, as well as those who are anti-tax under any circumstances.
    KC's View:

    Published on: February 18, 2010

    • The Wall Street Journal reports that “Anheuser-Busch InBev NV's U.S. unit plans to restructure its sales and marketing departments to make the brewing giant more efficient, a move that will include unspecified job cuts. Anheuser, the world's biggest brewer by sales, said in an internal memorandum that it will revamp its brand marketing group to have more employees focused on its major beer products. The brewer will add three new regional sales offices—in St. Louis, Denver and Charlotte—to its five existing offices to allow regional managers to spend more time with distributors and retailers. Anheuser also will integrate the sales departments of its company-owned distributors into the brewer's sales division.”

    Bloomberg reports that Hershey CEO David J. West says that the company’s strong balance sheet puts it into a position to acquire small and regional candy companies that may become available now because of industry consolidation - specifically the acquisition of Cadbury by Kraft Foods.

    “That may change the playing field somewhat,” West tells Bloomberg. “People may look at us differently as a potential partner perhaps or may look at their own businesses differently in a new landscape.”

    • Burger King said yesterday that it will attempt the blunt the impact of McDonald’s aggressive coffee strategy by introducing Starbucks-owned Seattle’s Best Coffee in its restaurants. The products will replace its current BK Joe lineup.

    • The Wall Street Journal reports this morning that Barnes & Noble’s board of directors has rejected a move by investor Ron Burkle to increase his stake in the company to 37 percent from his current 18.7 percent. The board’s move could lead to a proxy fight; Burkle has objected to some of management’s tactics, including a rule that says nobody is allowed to own more than 20 percent of the company except the Riggio family, which owns almost 28 percent of the book retailer. Leonard Riggio serves as chairman of the company.
    KC's View:

    Published on: February 18, 2010

    • Terry Morgan is retiring from his position as the company’s senior vice president and global chief information officer for Delhaize Group, the Belgian parent company of Food Lion, Hannaford Brothers and Sweetbay Supermarkets. He reportedly is starting up his own firm, Morgan Advisory Services LLC to help clients with technology consulting; one of his clients will be Delhaize America, which is creating as shared services structure encompassing its US chains.

    Scott Harrison will continue to be the senior vice president of Delhaize America reporting into the new shared service organization. Frank Suykens has recently joined Delhaize Group as senior vice president and chief information officer, Europe and Asia.

    • Bill Simon, executive vice president and chief operating officer for Walmart U.S., has been named a Champion of the Network of Executive Women.

    "Champions play an important role in promoting the organization’s mission,” said NEW President-elect Michelle Gloeckler, vice president for Candy & Impulse, Walmart U.S. "Bill is a leader for diversity within Walmart, and the Network of Executive Women values his leadership as we continue to provide collaborative engagement opportunities that advance women and drive business. "
    KC's View:

    Published on: February 18, 2010

    • Walmart says this morning that its fourth quarter net income was $4.63 billion, up from $3.79 billion during the same period a year ago. Q4 sales were $113.65 billion, up from $108.75 billion a year ago, on US same-store sales that were down 1.6 percent without fuel and down 1.2 percent with fuel.

    • Canada’s Loblaw Cos. announced yesterday that its fourth quarter earnings were the equivalent of $157.7 million (US), down from $181.6 million (US) during the same period a year ago. Q4 sales were $7 billion (US), down from $7.4 billion (US) a year ago, with same-store sales off by 7.8 percent.
    KC's View:

    Published on: February 18, 2010

    MNB took note yesterday of a Richmond Times-Dispatch report that Ahold-owned Martin’s Food Markets, which is absorbing the 25 Ukrop’s units acquired by Ahold and its Giant of Carlisle division, will no longer allow local charities and nonprofit organizations to raise money on the sidewalks in front of Ukrop’s stores. The decision is in line with a longtime Martin’s policy, but a major shift for Ukrop’s, which enabled the fundraising as part of its much vaunted commitment to the local community. Affected will be organizations like the Salvation Army and the Girl Scouts.

    "Our customers have voiced that they would prefer to shop in our stores without being solicited by other organizations, and we have listened to and respected their wishes," Martin's said in a statement yesterday.

    My comment: I’m not sure I entirely believe the implication that Ukrop’s wasn’t listening to its customers when it allowed organizations to solicit outside its stores for all those years. It sounds more like Ahold, Giant and Martin’s are focused on their own priorities...which is okay, but it is what it is.

    One MNB user responded in even more blunt terms:

    When will Ahold learn how not to screw up the takeover of a major food chain?   Ukrop's had perhaps one of the best community affairs programs in the U.S. and for Ahold to announce that they are discontinuing Ukrop's long-standing policy of permitting non-profits to be outside of their stores is just going to be another misstep in this next chapter of Ahold's historic record of how to take over a successful food chain and watch sales decline.    When will they learn?

     Another MNB user wrote:

    I’m sure the competition is licking their chops over this. I would imagine that a lot of loyal Ukrop’s customers were there precisely because of their stance on not selling alcohol, not opening on Sunday, not to mention allowing the local Girl Scout troop to sell cookies outside while they were trying to sell cookies inside. As these differentiators fall away, the field levels out and those loyal customers will be able to shop around with a clear conscience. The question still remains whether they will gain more market share from new customers coming in than they lose from old ones leaving.

    I did get one email yesterday from an MNB user who seemed to be arguing that this was really the only decision that Ahold could make - that by allowing the Girl Scouts to solicit, the company would be legally required to allow the KKK to solicit, or other unsavory organizations. It is all or none, this person said...and so Ahold/Martin’s should not be faulted.

    This may have an element of legal truth...but it certainly didn’t stop Ukrop’s during all those years. It hasn’t stopped a lot of other retailers from offering legitimate organizations the opportunity top use store fronts to reach out to shoppers. So there clearly must be a way to allow Girl Scouts to sell cookies without allowing white sheeted morons to sell racism.




    Responding to Michael Sansolo’s column yesterday in which he noted that his daughter had questioned the National Football League is limiting its appeal by only using old white men as halftime entertainment during the Super Bowl, one MNB user wrote:

    To your daughters point ... I am a 55 year old white women, and I asked my husband the same thing. Why is it that Super Bowl half time show’s have been nothing but old has been’s, we may have enjoyed them in our day, but we have much better performers today!!!  Let’s bring in some fresh tunes!!!

    For the record ... 55 is just a spring chicken.




    We’ve had some stories and emails lately about the importance sometimes of “firing” customers.

    MNB user Sally Malchow chimed in:

    Loved the response from Mr. Silverman about how he treated his employees as customers too.  Many owners and managers are ignorant of the fact that they can be held liable (personally and as a business) if a customer harasses (race, gender, religion, etc.) one of your employees and you don’t do anything about it.   Aside from legal and moral responsibility, good managers look for ways to meet the needs of their employees and our research shows that one of the biggest needs is RESPECT.  In this tight economic client, retailers need to find as many ways as possible to save money and increase productivity.  Reducing turnover with good employee relations will pay off financially.

    And MNB user Jeff Folloder wrote:

    The fired customer is the "inside" story in retail.  It is rarely spoken of, in public, because of the reverence that the act holds for the community.  Most customers actually believe the dictum "the customer is always right".  And many of those customers delight in seeing just how far that dictum can be pushed because they feel that someway, somehow, they have a "right" to be that way.  I have worked in various levels of sales throughout my life.  Grocery, luxury goods, sporting goods, consulting and more.  I can honestly say that I should have fired many more customers than I did.  I get the concept that a purchase transaction is an exchange of things of value and that folks will act rudely or in mean spirit to make themselves feel better for giving up something of value (money).  That doesn't make it right.  And there is no room for it anymore.  That many suffered through this without firing the customer just shows that they were made of much better stuff.



    And here’s an interesting take on the Toyota problem from MNB user Gary Harris:

    We’ve adopted many of the quality initiatives and principles developed through the stellar history of the Toyota Production System. Now, given the current news stories surrounding accelerator pedals and floor mats, when we have training sessions on continuous improvement we have to have a sidebar discussion about what happened, how and why it happened, and what can we learn from it.
     
    While my gut says that Toyota will get this right eventually (and my Vibe will be safe again) this event will be a great case study in business schools and training sessions for years to come.

    KC's View:

    Published on: February 18, 2010

    Three sports events worth noting. Not necessarily in order of importance.

    Lindsey Vonn, perhaps the most celebrated American Olympic athlete at the Vancouver games, won the gold medal in the Alpine Skiing - Women’s Downhill event.

    Shaun White of the United States took gold in the men's halfpipe competition on Wednesday night.

    And, in Florida and Arizona, major league pitchers and catchers have reported for spring training.
    KC's View: