retail news in context, analysis with attitude

Published on: February 25, 2010

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

I used to love watching Sunday morning political shows, but I’ve found lately that my patience is wearing thin. Or maybe I’m just getting cranky in my old age. Whatever.

It was last Sunday, and I watching “Meet The Press.” During the round table discussion that came at the end of the show, moderator David Gregory brought up the fact that there have been numerous magazine covers and stories about the idea that Washington, DC, is broken - that the system is dysfunctional, that compromise and intelligent discussion seem to be dead, and that ideological extremes make it difficult to actually solve problems.

He asked the Republican congressman at the table what he thought of this notion, and he promptly launched into a two minute diatribe about how it is all the Democrats’ fault. Then he asked the Democratic congressman, and he spent his time blaming the Republicans.

At that moment, I wanted David Gregory to stand up and say to both of them, “Get off my set. Get out of here. This is the problem. I ask you a question that has serious implications for the future of the country, and all you can do is blame each other. Get off my set and don’t come back until you are willing to actually open your minds to the idea that the other side might have a point, might have honorable intentions, and might be worth listening to and agreeing with on certain issues.”

Of course, David Gregory didn’t say that. He probably couldn’t say it. (He probably would have lost his job, but he also would have become an instant hero to millions of Americans.) Jon Stewart is probably the only one who could have said it and made it stick ... and he’s already a hero to millions of Americans.

This is, of course, a problem not just with our elected officials. These days, an open mind and a willingness to listen, discuss and compromise is seen as a sign of weakness or indecision.

I was thinking about this the other day because someone was nice enough to send me an email complimenting me on the level of discourse here on MNB. I appreciate that...and it is a compliment that needs to be extended to most of the folks in the MMNB community. I say “most” because we do have our share of hardliners - some might call them “wingnuts” or the “lunatic fringe” - who seem to have positions so hardened that they seem calcified.

There are plenty of metaphors for this. One of the current favorites seems to be the phrase, “if all you have is a hammer, everything looks like a nail.”

In our book, “The Big Picture: Essential Business Lessons from the Movies,” there are several chapters that deal with intellectual hardening of the arteries. One of my favorites is Michael Sansolo’s take on In The Heat of the Night, a movie in which everybody assumes they have the answer to whodunnit, except that they keep finding out, time and time again, that they are wrong...because they have been working from such a strict set of assumptions that they cannot see the clues among the actual facts.

This is our challenge. On a small scale, here on MNB, we have to keep an open mind about the issues and challenges that face our businesses. On a larger scale, as citizens, we have to be willing to listen, discuss, negotiate, and even see the world through the other person’s eyes.

If we don’t...well, the levels of rancor that seem to define the public sector right now will only be the beginning. And it isn’t going to be pretty.

For MNB Radio, I’m Kevin Coupe.

Published on: February 25, 2010

The Phoenix Business Journal reports that bankrupt Bashas’ Supermarkets has rejected a $290 million acquisition bid from Boise-based Albertsons Inc.

According to the story, “Michael McGrath — a partner with Tucson law firm Mesch, Clark and Rothschild PC, which is representing Bashas’ in the bankruptcy — called the offer ‘unsolicited and unexpected.’” And, he said, “This isn’t as good an offer as Bashas’ has proposed in its reorganization. The reorganization plan keeps the company in the family and pays all the creditors.”

Bashas’ filed for Chapter 11 bankruptcy protection last July after being hard hit by both the recession and amped-up competition. The story notes that “Bashas’ has closed about 30 of its 150 stores, resolved disputes with labor unions and reworked some of its leases with landlords worried about losing anchor stores since then.”

Albertsons CEO Robert Miller reportedly told Bashas’ Chairman Eddie Basha in a private letter that “such a transaction will help protect the value of Bashas’ business and should be considered by your board and other interested parties before any plan of reorganization is voted upon.”

Published on: February 25, 2010

The Boston Globe reports that Ian Bowles, who serves as Massachusetts’ energy and environmental affairs secretary, has expressed disappointment that plans for a new Walmart store to be built in Salem - as well as a new Lowe’s - are not as environmentally conscious and advanced as some stores being built by both chains elsewhere in the country.

According to the story, “Bowles said he was disappointed that plans for the Salem stores ... did not include provisions for solar power and other energy-saving measures the companies have used in other states. Bowles conveyed that disappointment last week as he denied a request to allow the companies to file only a single environmental impact report for the development they both plan to occupy on Highland Avenue in Salem.”

“I was surprised that the proposal from Walmart did not include measures it has employed and promoted at stores in other states,’’ Bowles wrote. “I expect both Lowe’s and Walmart to consider measures that would make their Massachusetts stores more energy efficient than what was presented.’’

Walmart has promised to cooperate with Bowles, and Lowe’s has said it will “address” his comments.

The Globe writes, “Both companies have reputations for environmental stewardship. Lowe’s was named a 2009 Energy Star Partner of the Year by the US Department of Energy, which, along with the federal Environmental Protection Agency, uses the Energy Star power rating program to promote the use of energy-efficient appliances. And in 2008, Ceres, a green investment coalition based in Boston, rated Wal-Mart as one of the top companies working to address climate change. According to Wal-Mart’s website, the company eventually plans to get all of its energy from renewable sources. It currently uses solar panels in California, has purchased wind power to meet some of the load at about 350 locations in Texas, and plans to use wind turbines at a store opening this spring in Worcester.”

Published on: February 25, 2010

Harris Interactive is out with a new survey suggesting that 42 percent of Americans say they have gotten sick because of something they ate over the past two years.

And here’s the further impact on the food business, according to the survey:

“While some who attribute an illness to a food item may have contracted their illness elsewhere, the perception of a food-attributed illness poses a major problem for our nation’s food manufacturers and suppliers. In fact, seven in ten (69%) of those who attribute an illness to a food item think they know what made them sick.

“As a result, one-quarter (26%) of those who indicate they became sick from something they ate have eliminated that food from their diet entirely. Moreover, another 15% indicate that they advised family, friends and colleagues not to eat that food item, increasing the impact of their individual experience.”

That said, the study also notes that “most Americans do not have large levels of concern regarding the safety of eating different foods. However, among four types of foods (fresh, canned, frozen and other packaged foods), two in ten adults are either extremely or very concerned that fresh foods are safe to eat (21%), followed by canned foods (15%), other packaged foods such as boxes, jars, bags, etc. (14%) and frozen foods (13%).” Three quarters to one half of Americans are said to be “somewhat concerned” to some extent that these foods are safe to eat: fresh foods (73%), other packaged foods such as boxes, jars, bags, etc. (64%), canned foods (59%), and frozen foods (53%). Those who are at least somewhat concerned that fresh foods are safe to eat are most concerned about fresh meats (31%), fresh poultry (23%), fresh fish (20%), vegetables (16%) and fruit (8%).

Published on: February 25, 2010

In Minneapolis, the Star Tribune reports that Procter & Gamble CEO Bob McDonald is saying that golfer Tiger Woods, ensnared in a sex scandal related to a series of infidelities that have marred his previously unblemished public image, may never appear in another television commercial for the company’s Gillette brand.

"He doesn't need to be distracted by us using his advertising, and we don't need the distraction of us using the advertising, either," McDonald said in an interview.

Woods had appeared in a series of commercials also featuring baseball player Derek Jeter and tennis player Roger Federer, but a new set of ads now just feature Jeter and Federer. “We’ve got lots of great spokespeople,” McDonald said.

Woods remains under contract to Gillette, though the length and terms have not been divulged. His off-the-course activities have already lost him sponsorship deals with Accenture and AT&T, though Nike has remained faithful to the embattled golfer.

Published on: February 25, 2010

Bloomberg Business Week reports that members of the United Food and Commercial Workers (UFCW) employed by Safeway in Colorado have ratified a new contract, bringing to an end labor tensions that date back to last year.

According to the story, “Only 14 of the 68 Safeway bargaining units approved the offer when it was submitted in December. Safeway says it resubmitted the identical offer earlier this month, and it has now been ratified.”

Published on: February 25, 2010

• Walmart announced yesterday the opening of a new headquarters in Miami for its Latin American operations.,

Eduardo Solorzano, the new regional president/CEO for Latin America, said that “the opening of this new regional office reflects a renewed level of service and support Walmart Latinoamerica is ready to provide, to our markets, to our associates, to our stores, and to the people in countries throughout Latin America, whether we have stores in those countries yet or not."

According to a Bloomberg story, Solorzano says that his division plans to be active on the acquisition front. “I don’t believe there is a name that we would withhold or withdraw from the list of (acquisition) prospects,” Solorzano said.

• Walmart Canada said yesterday that during 2010 it plans to open 35 to 40 supercenters, a number that includes new units, relocations, expansions and remodels. The program represents an investment of close to a half-billion dollars, not including the more than $100 million that will be applied to the construction of a new sustainable refrigerated distribution center.

By the end of the year, Walmart is expected to have about 325 supercenters and 201 discount stores operating in Canada.

• Well, that didn’t take long.

The San Jose Business Journal reports that Walmart, which is acquiring the Vudu video services business for $100 million, already has begun the process if jettisoning the company’s adult video section.

According to the story, Vudu “is informing partners that distribute films on its After Dark adult section that it will be shutting it down within days,” and is asking its adult video partners to terminate their agreements voluntarily.

Published on: February 25, 2010

• The Financial Times reports this morning that Coca-Cola will acquire the North American business of Coca-Cola Enterprises, its largest bottler, a move that it describes as “a dramatic reversal of a strategy the soft-drink maker had embraced for more than 20 years,” and mirrors steps being taken by PepsiCo to centralize control of its largest bottlers. Such a move is seen as beneficial in an environment dominated by fewer big retailers, giving the soft drink companies greater control and flexibility.

The reports that “under the terms of what the two companies called a ‘substantially cashless’ deal, valued at about $13 billion, Coke will take over the North American operations of the bottler, Coca-Cola Enterprises. Coca-Cola Enterprises, or C.C.E., would then acquire Coke's own bottling operations in Norway and Sweden, becoming a European-focused producer and distributor of Coke products. It will also have the right to buy Coke's 83 percent stake in its German bottling operations within 18 months to 36 months after the deal's closing. When the deal closes, expected in the fourth quarter, Coke will own about 90 percent of its North American bottling operations.”

Published on: February 25, 2010

• JM Smucker reports that its third quarter revenue grew 3 percent for the quarter to $1.21 billion, with Q3 profit profit up a whopping 74 percent to $135.5 million - driven to a great degree by the company’s acquisition of Folgers coffee from Procter & Gamble.

• Dollar Tree Inc. reports fourth quarter profits that were up 28 percent to $135 million, on Q4 sales that were up 12 percent to $1.56 billion. Annual sales rose almost 13 percent to $5.23 billion, with profits of $320.5 million, up from $229.5 million a year ago.

Published on: February 25, 2010

...will return.