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    Published on: February 26, 2010

    The New York Times this morning reports that Walmart “plans to cut 20 million metric tons of greenhouse-gas emissions by 2015,” but will do so by making “its suppliers do the dirty work of reducing the carbon footprints of their global supply chains.” According to the story, “Wal-Mart stated that it will now select the product it sells in part by judging whether manufacturers are on board with its green initiatives, suggesting that those who are not will have an increasingly hard time getting products on shelves.”

    The pledge, the Times writes, is “equivalent to taking more than 3.8 million cars off the road by the company's estimate,” and “comes after Wal-Mart last year unveiled a plan to reduce the overall environmental impact of products it sells.”

    CEO Mike Duke did a webcast with Fred Krupp, head of the Environmental Defense Fund, which helped develop the plan, and said, “Reducing carbon in the life cycle of our products will often mean reducing energy use. That will mean greater efficiency, and with the rising cost of energy, lower costs, making our business stronger."

    The Times notes that Walmart “has a separate effort to reduce energy use and cut the environmental impact of its 8,400 stores world-wide.”
    KC's View:
    There was a time not that long ago when the words ‘Walmart” and “Environmental Defense Fund” would never have been in the same sentence, except perhaps in an article that stressed antagonism and litigation.

    The thing that Walmart’s competition has to realize is how far Walmart has come in owning this issue...and that in the long run, these efforts are going to make it vastly more efficient, which is going to translate into higher profits.

    Published on: February 26, 2010

    Charles Conaway, the former CEO of Kmart, has been ordered by a federal judge to pay more than $10 million to atone for the fact that he deliberately misled shareholders about the company’s financial position before it declared bankruptcy.

    The judgement consists of a $2.5 million fine, the return of a $5 million loan from the company, and $2.7 million in interest.

    Conaway’s attorneys said he would appeal the verdict. The former CEO previously had been found guilty of the charges in a civil jury trial.
    KC's View:
    Interestingly, the judge did not bar Conaway from serving on the boards of public companies.

    But maybe that doesn’t matter.

    This seems like a pretty good rule of thumb. If you ever find yourself owning shares in a company where guy has any sort of management or leadership role, sell those shares. Fast.

    Published on: February 26, 2010

    The Wall Street Journal reports that “after more than two years of being outdistanced by Wal-Mart Stores Inc., Target Corp. said ... it is coming out with guns blazing, planning to prove it is the low-price leader and offers better quality than its larger rival.

    However, Target CEO Gregg Steinhafel also said that Target will “"maintain our focus on fashion, design and a superior store experience.” And Kathryn Tesija, executive vice president of merchandising, said that Target grew market share in 2009 and has “plans in place to accelerate that trend in 2010.”

    Analysts point to an improved private brand program as part of Target’s improving appeal, and suggest that Walmart could stall out a bit because its core shopper base is being hardest hit by the recession, while Target will appeal to a broader consumer demographic with more refined tastes and a little more money, though they are unwilling to trade up to more expensive stores.
    KC's View:
    Listen ... I understand that Target needs to go after Walmart. (Though the other day it was suggested that it might best do so by evoking Costco.) And I understand that its management probably has a bit of a chip on its shoulder because Walmart gets significantly more credit for low prices than Target.

    But that’s because Walmart has a simple message that it repeats over and over. There is nothing oblique about its message. Nothing too cute.

    And Target hasn’t gotten that down yet. And to be honest - and this is based on limited exposure, because I can’t go everywhere - I do not think that there is the kind of marked difference between Target’s best stores and Walmart’s best stores that Target seems to believe there is. I could be wrong about this...but that is my impression.

    Published on: February 26, 2010

    A new study published in the American Journal of Clinical Nutrition suggests that highly scored products in the NuVal Nutritional Scoring System correspond with foods recommended by the Dietary Approaches to Stop Hypertension (DASH) Diet, and that an estimated 4 out of 5 consumers in stores with the system are being positively influenced by NuVal scores.

    “This study validates what we’ve believed all along—that moms and dads want to buy nutritious foods for their families, but they aren’t always sure where to find them,” said NuVal’s president, NancyMcDermott. “NuVal eliminates that confusion, offering a simple, easily understood solution.”
    KC's View:
    This also confirms the long-held MNB position - that improved nutritional labeling, no matter which system you use, is a good thing for shoppers and can even be a sales generator for retailers. Better to be both a source of product and a resource for information than just to be a source of product.

    Published on: February 26, 2010

    The Phoenix Business Journal reports that “Bashas’ Inc. filed an amended bankruptcy plan on Thursday that lays out how the company plans to pay back creditors. The plan, which would bundle Bashas’ Chapter 11 reorganization along with Bashas’ Leaseco Inc. and Sportsman’s LLC into one case, seeks to pay creditors all money they are owed over a period of time. Backed by unsecured creditors, the plan represents a road map out of bankruptcy for the Chandler-based grocer that would leave the company in family hands.”

    The amended plan was filed a day after the company said it rejected an acquisition offer of up to $290 million from Boise-based Albertsons.
    KC's View:

    Published on: February 26, 2010

    The Richmond Times Dispatch has an interview with Jim Scanlon, the former vice president of operations and human resources at Ukrop’s, who now will serve as Richmond-area regional vice president for Martin's, the Pennsylvania-based grocer that bought the Ukrop's chain this month.

    Some excerpts:

    • “There's going to be a lot of great stuff. Our store people are really looking forward to spending a little bit of money to freshen stores up. They've done a great job of keeping them clean and keeping them as up-to-date as they can. But here again, by being a small fish in a big pond, it was hard to deal with that sometimes with resources.

    “But we don't want to reveal anything until we're ready to unveil it. I think you are going to see quality products at affordable prices. I think we're going to provide superior customer service levels still.”

    • “Our intent is to try to keep the local theme going. [On Wednesday] we had all the local growers in the office introducing them to some of the new Martin's folks and to reassure them that a lot of things will change but a lot of things will stay the same. We're in the process of meeting all the vendors. We're trying to isolate, if you will, all the local niche operators that probably only sell at Ukrop's and get them all identified, so as we do go through the transition and get the stores all changed over, we don't lose things between the cracks.”

    • “I think there's a realization that to sustain the business going forward [opening on Sundays needed to be done]. I know our leadership, our store managers, are all in favor of it. I think the pushback that they have had in the past is [employees] saying, 'Let's get it going.'”
    KC's View:

    Published on: February 26, 2010

    • The California State Assembly has passed legislation that is designed to return the state’s Beverage Container Recycling Fund to solvency. The same bill already has been passed by the California State Senate, and Ronald Fong, president of the California Grocers Association, said that he expects it to be signed by Gov. Arnold Schwarzenegger.

    The fund ran into problems when over the past few years the state has borrowed hundreds of millions of dollars from it in order to close its budget gap. That led to the fund running try, which prevented companies doing recycling from getting reimbursed for the cans and bottles that were being redeemed.

    • Nuts and snacks seller Diamond Foods announced that it will acquire potato-chips maker Kettle Foods from Lion Capital LLP for $615 million in cash. The deal is expected to close by the end of the year.

    • The Berkshire Eagle reports that Big Y foods plans to open a new 45,000 square foot store - the first so-called “World Class Market” format built by Big Y that is smaller than 50,000 square feet - in Lee, Massachusetts, in summer 2011.
    KC's View:

    Published on: February 26, 2010

    • Safeway reported that its fourth quarter sales were down eight percent to $12.69 billion, and a Q4 loss of $1.61 billion, compared to a year-ago profit of $338 million, which it attributed to goodwill impairment charges.”

    • The Dr. Pepper Snapple Group said that it earned $114 million in the fourth quarter, compared to a loss of $621 million during the same period a year ago. Sales dropped 1 percent to $1.36 billion from $1.38 billion.

    For the year, Dr. Pepper Snapple reported a profit of $555 million, compared to a loss of $312 million in the prior year. Full-year sales declined 3 percent to $5.53 billion from $5.71 billion.

    • Caribou Coffee Co. announced yesterday that its fourth quarter net sales were up 12.4 percent to $76.5 million, on same-store sales that were up 0.2 percent. Q4 net income was $3 million, up from $1.3 million during the same period a year ago.

    Caribou’s annual sales increased 3.4 percent to $262.5 million in fiscal 2009 compared to $253.9 million in fiscal 2008, with net income of $5.1 million compared to a loss of $16.3 million in fiscal 2008.
    KC's View:
    Full disclosure - Caribou Coffee is one of MNB’s valued sponsors. But I would have written about the company’s performance even if it were not, so there is no reason to penalize it for having such good taste.

    What I might not have pointed out if Caribou were not a sponsor is the fact that its commercial sales for the fourth quarter - those to other retailers such as those in the MNB community - were up 76.6 percent compared to the fourth quarter of 2008 ... which is precisely when Caribou started sponsoring MNB.

    Now, I’m not going to claim credit. But I will say this (at the risk of being accused of being self-serving and blurring the line between news and sponsorships). I hope that you are clicking on the link in Caribou’s DrumBeat, and checking out a superior product that can give your company a differential advantage. It’ll be good for’ll be good for Caribou...and yes, it’ll even be good for MNB.

    Published on: February 26, 2010

    Yesterday, I devoted MNB Radio to a call for civil discourse, noting that poisonous attitudes and a “blame the other guy” perspective has rendered governance almost impossible. I said, in part:

    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 ... 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.

    One MNB user disagreed:

    The notion that there is a shortage of civil discourse in government has become a favorite drumbeat of the media, which uses the simplistic idea to absolve themselves of their own role in the dysfunction.

    The fact is, there is plenty intelligent discussion of major issues, but the sticking points always come down to basic ideology. And when the media wades in – long after the discourse is over – they want red meat. Sound bites. Compelling video. Great quotes. All grow from ideological differences. There’s no room for nuance. Their customers don’t want it anyway.

    It’s been that way forever. It’s just that the media has finally found a way to rid themselves of responsibility for it: Blame a lack of civil discourse.

    I would never suggest that the media has no culpability. The rise of 24-hour cable, and even the internet, certainly have added to the problem.

    But blaming the media is the same as using a scapegoat. It doesn’t fly. I expect my elected officials...even the ones I did not vote be better than that.

    I noted yesterday that there are few people on TV who actually show a “cut the crap” demeanor, and suggested that Jon Stewart is one of them and for that reason is a hero to millions of Americans.

    Blake Steen took offense at this suggestion:

    Wow, Jon Stewart is a hero to millions of Americans.  I'm sad for those Americans.  He was a Bush basher just like Keith Olbermann and Chris Matthews (I'm getting a tingly feeling up my leg ... there is some objective journalism for you)).  I'm truly sad to see you say that.  Jon Stewart could get away with it as long as he was saying it to a Republican and not a Democrat.

    No question, Jon Stewart has liberal leanings. But if you don’t think he punctures hypocrisy on both sides of the aisle, then you are not paying attention. (He’s also a lot funnier than Olbermann and Matthews.)

    Not everybody disagreed with me, though.

    MNB user Christine A. Myres wrote:

    Kevin: you should add yourself to the list of “hero to millions of Americans”, that would make two of you. In all seriousness, why doesn’t someone stand up and say exactly what you did, that we are all so concerned with being right that we have forgotten how to listen, civil discourse is dead or dying, that while everyone argues the country is in deep trouble and if we don’t cooperate we will be in it even deeper. It seems to be a classic case of fiddling while Rome burns, except it’s more than one person doing the fiddling. (That brings up a whole lot of vivid mental images, but I won’t go down that trail; I wish I was a cartoonist!)

    I have stopped watching current-events shows I used to enjoy for exactly the reason you mentioned, and it’s not just being from old-fogey land.  If we don’t communicate the relationship is dead, someone needs to give it mouth-to-mouth (no pun intended).
    Keep doing what you do so well, keeping the dialog alive. I can no longer get through the day without a dose of MNB, but it’s a habit I am happy not to have to break.

    Well, I’m blushing. And deeply appreciative.

    MNB user Gary Harris wrote:

    AMEN, Kevin!
    Political posturing and positioning in our country has become stultifying. What began as an honest difference of opinions in how to accomplish what are mostly common goals; employment, prosperity, affordably available healthcare, peace, a balanced budget, and on and on, has become a street fight. Now the only way each side can define success is by making sure the other side fails. What’s a better idea for healthcare, the Republican or the Democratic plan?

    We’ll probably never know, because neither side will allow the other to get theirs passed. The sad part is that it doesn’t matter to many of these folks whether the other plan might be a good idea or not. What’s anathema to them is the possibility that the other side might be successful, and thus prove their point. I used to listen to Rush Limbaugh when he first came on the radio. He was funny, his views lined up with mine, and he was fresh. Now he’s old. He’s not entertaining, he’s just angry. His default position is that if a Democrat says it, its wrong, and if a Conservative says it its right. I’m sorry, I’d like a bit more rigor in my analysis of differing points of view.

    When I got a request from the Republican National Committee for a political donation several years ago, I knew we were in trouble. With all the social and economic conditions facing America at the time, their call to action, the most pressing issue they could raise to engage the party faithful, was the critical need to “Stop Hilary!” That was it for me. I don’t consider myself a Republican anymore, or even a Conservative. I still agree with many of their fundamental beliefs, but their tactics are embarrassing. I didn’t vote for President Obama, but he won, so I’m willing to give him a chance. Thanks for your thoughts Kevin, and for being willing to listen to such a diverse audience. I know I speak for a lot of people when I say that I look forward to reading your column every day, because I know I’ll laugh and I’ll think. That’s a pretty good day.

    For me, too. Thanks.

    MNB user Craig Espelien wrote:

    I am not sure you went far enough in your discussion around how it has become extremely difficult in get the two sides of the political spectrum to speak like adults on an important subject.  Being somewhat apolitical (but conservative by nature), I tend to look for the parallels in business.  In my past lives, I have found too many folks that are so heavily invested in the way things are or used to be that to discuss change with them is so foreign as they are completely locked into their view of the world.  Some coworkers and I used to joke that for these people, collaboration meant we had to agree with their direction – or we were not “collaborating”.

    A friend of mine who I used to consult with always talked about it from a communication perspective – there are three modes of communication that people can choose – Parent, Child or Adult.  When in “Parent” mode, the person talking demands that the listener follow their directive; meanwhile the listener defends and takes a position (sounds just like the two individuals on Meet the Press).  When in Child mode, think of two pre-school kids wanting to play with the same ball – things quickly escalate as the lack of maturity kicks in.  Now put the Parent/Child dynamic together – Parent tells, Child Rebels.

    If we can get to the Adult level of communication, we separate ourselves from the issue – and recognize the other individuals right to have beliefs that are different from our own (sort of the basis for creating the United States).  This is where problems are identified, the root cause is uncovered and real solutions can be identified, debated, modified, agreed upon and implemented.

    There is usually no issues with people agreeing on “what” needs to be done (alignment of interests) but the breakdown occurs when we try to get to “how” a problem should be solved (agreement) – this is where all of the partisan stuff kicks in and our existing paradigms take over and keep us from having a rational discourse on how to achieve what we all agree needs to occur.

    Longwinded – but I could go on for hours on this subject – as most people will read this, nod their heads and say to themselves “I am this rational – it is the other folks who are not” – when all along those folks are often the largest part of the challenge.

    Be well – and keep up the discourse – it may not always be rational but it is as close as it gets (at least most days).

    MNB user Glenn Cantor wrote:

    One of the key differences between the business world and the political world is the value of compromise.  In business, when partners collaborate and compromise with each other, they generally produce a winning solution.  In politics, however, when one compromises, he or she is ostracized from the political party and often loses his place at the table.  It is no wonder that all but a few of our most dynamic and intelligent leaders stay in the business world.

    Another MNB user wrote:

    Just wanted to say I appreciate the civil discourse offered at MNB, even if our elected officials appear dysfunctional and the art of negotiation seems to be lost.

    I get the impression sometimes that our elected officials are afraid that if they back down from their position, even one inch, they are seen as “losers” in some kind of fight.

    This concept of winning and losing battles on the floor of congress, as if it is some kind of war zone, needs to stop. 

    I think our Congress is locked in a “cold war” of sorts and some proverbial “blowtorch” is needed to melt the ice. I would think that it would be the job of our president to provide that leadership to Congress and build trust but so far I think all he has done is exasperate the root causes of the problem. 

    MNB user Lisa Bosshard wrote:

    You hit the "nail" on the head with this observation.  Like you, I gave up trying to watch political shows in sheer frustration...   These attitudes, or blame game have become prevalent and somehow acceptable behavior.   When did it become okay to point the finger at others?   No wonder the younger generation is a "me" generation... If they don't look out for themselves, who will?   To close with two more words; how sad!


    Finally, on a completely different and far more light-hearted subject, MNB user Chris Connolly wrote:

    Thanks for mentioning my all-time favorite Jimmy Buffett song, “It’s My Job.” (Just ahead of "Pencil Thin Mustache".) It's on my iPod in my office and it pops up occasionally as it shuffles my tunes.   From the first time I heard it almost 30 years ago, it's been one of those songs a person chooses to not just listen to,  but "live by".

    Better to choose that one, I suppose, than "A Love Song (From A Different Point of View)"?   🙂

    Depends on what kind of night you’re having...
    KC's View:

    Published on: February 26, 2010

    I love this idea from The Wedge Natural Foods Co-op in Minneapolis.

    Cupcakes are all the rage right now, fed in part, I think, because they represent a kind of minor indulgence during tough economic times. But people are also concerned about health and nutrition. So...The Wedge has come up with “portion-controlled cupcakes,” which sounds redundant but also is a very good idea.

    Here’s how they describe it:

    “The Wedge Deli Bakery cupcakes are undergoing a reduction program. People want their cupcakes and their waistlines too - as well as healthy checking accounts. We get that. You could consider this our part in the War on Waistlines. Or just think about it as a way to bring more cupcakes to more people - for less.

    “On February 17, 2010 the Wedge Deli Bakery rolled out the first four cupcakes in the smaller size. They are priced right - $1.79 each, or you can get a package of four for just $5.99. Mix 'n match flavors and frostings in the four-packs as you like.”

    This strikes me as a good idea - not necessarily a big idea, but the kind of good idea that gives a department a little twist...and keeps customers interested.

    I’m still trying to understand this. ESPN has suspended Tony Kornheiser from PTI for two weeks because he was being Tony Kornheiser (making critical comments about a female anchor’s clothing) on his local Washington, DC, radio show (from which he has not been suspended). And he apologized for making the wisecracks even before being suspended.

    Yeah, that makes sense.

    The New York Times had an interview the other day with a woman named Jana Eggers, CEO of a company called Spreadshirt, which makes personalized clothing. She was asked about how she hires people, and I just thought her answers very interesting.

    One thing she says she does is “see how they treat the receptionist. I always get feedback from them. I’ll want to know if someone comes in and if they weren’t polite, if they didn’t say, ‘Hello,’ or ask them how they were. It’s really important to me.

    “I also check references myself. A lot of times people may leave that to their H.R. people or to someone who works for them. But, to me, it’s really important to talk to the person and build a rapport. I really want to know, what am I going to see? Everybody has challenges. One of the questions I usually ask on references is, ‘Where should I spend time coaching this person?’

    “I’m usually listening for passion. I want that passion, because that passion is what’s going to get you through your failures. It’s when the tough things happen that a person’s real personality comes out. And I’m looking for whether someone’s aware that business is a team sport. You have to communicate. How do they describe the team, their role on the team? I always like to get their perspectives on the management, too.”

    I haven’t applied for a job in more than 15 years, but I all I could think of is that I wish at some point in my career I’d been hired by someone like her.

    I am in the Pacific Northwest for 10 days, which means - among other things - that not only am I in the place I think of as paradise, but I’m also missing the enormous snowstorm hitting my home right now. (For which I apologize profusely and publicly to Mrs. Content Guy. However, I also may not go home until spring.)

    A couple of days earlier this week were spent on beautiful Orcas Island, north of Seattle, where I had the opportunity to share some amazing food and wines and a fabulous restaurant called Christina’s in the town of Eastsound. I started with an extraordinary appetizer of beer-braised local pork belly, pan seared and served over lentils, sauteed spinach and organic apple mostarda. And then moved on to a delicious truffled risotto made with Oregon Black truffles, poached local duck egg and Parmigiano Reggiano. This was just unbelievably good...and made even better (if that’s possible) because the owner of the place, Maureen Mullen, was a cheerful and informative presence throughout the meal.

    The wines we all shared that night also were noteworthy:

    • 2006 Ken Wright Pinot Noir, from Oregon’s Abbot Claim Vineyard.
    • 2006 “The Boy” blend from K Vintners in Walla Walla, Washington.
    • 2005 Yakima Red from Owen Roe, Washington.
    • 2006 Angela Pinot Noir from Oregon’s Clawson Creek Vineyard.

    My favorite of all these was the Ken Wright...but they were all delicious.

    I’ve also had a chance to stop in for my usual visit to Etta’s in Seattle on this trip, and say hi to Morgan - one of my favorite bartenders in the world, who garnered a shout-out in our book, “The Big Picture: Essential Business Lessons from the Movies.”

    Morgan recommended a wonderful wine on my visit there: the 2007 Six Prong Cabernet Sauvignon, from Washington State...delicious and just spicy enough to handle one of the best pulled pork barbecue sandwiches I’ve ever eaten.

    (This is how lucky I am. In the company newsletter for Tom Douglas Restaurants, which owns Etta’s and a number of other great restaurants in Seattle, they excerpted the passage in which I wrote about Morgan...and described me as a “long time Etta’s regular.” Which is true...but it also is true that I live 3,000 miles away from Etta’s. It is the measure of a fortunate life that I have the ability to be a regular at some place so far away from where I reside, and it is a measure of a wonderful establishment and great people - and fantastic food - that Etta’s is the kind of place where I return on every trip to Seattle.)

    That’s it for this week. Have a great weekend...I know I will...and I’ll see you next week.

    KC's View: