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    Published on: April 16, 2010

    In Massachusetts, the Quincy Patriot Ledger reports that Ahold-owned Stop & Shop Supermarket Co. has Implement a corporate restructuring that will result in nonperishable and merchandising functions being moved 400 miles west from the Boston area to Carlisle, Pennsylvania, where Ahold’s Giant-Carlisle chain is based.

    Ahold USA’s senior vice presidents for non-perishables, fresh, brand development and format, marketing and consumer insight, sales development, business transformation and business development - said to “support the buying needs of all four Ahold USA Retail Divisions - all will be based in Carlisle.

    Company spokesperson Faith Weiner tells the paper that the company will retain a corporate presence in Quincy, but that “we do anticipate that these changes will result in many support office jobs being changed, eliminated, moved or added. We won’t know the extent of changes in the Quincy office until the final organization is completed, which is expected to be done by the end of the year.”

    The Patriot Ledger writes, “The company’s current reorganization appears to represent a shift in power in the organization away from Quincy ... The shift in power can be traced back to the summer of 2008, when Ahold promoted Carl Schlicker to become the CEO of Stop & Shop and its sister group, Giant-Landover. At the time, Schlicker had been CEO of Ahold’s Giant-Carlisle group of supermarkets.

    “Then, in November, Ahold promoted Schlicker to be the CEO of all its U.S. retail organizations. The Stop & Shop chain was divided into a New England and New York metro group, and Mark McGowan was promoted to be the New England group’s president.”

    A letter to vendors from  Jeff Martin, Ahold USA’s executive vice president of merchandising, described the changes this way:

    “Our goal is to simplify and streamline our operations to position ourselves for future growth and create a support office best positioned to deliver on the local needs in our Divisions ...  We are confident that the Merchandising and Marketing organization we  are announcing today, and all the organizational changes we will be announcing during the Transition, will result in an Ahold USA Retail organization poised for future challenges and opportunities.”
    KC's View:
    The ultimately judgement on whether these moves make sense will have to be based on whether this makes Stop & Shop less of a locally oriented company. Maybe it doesn’t matter. Maybe these days, an office in Quincy doesn’t have much of an impact on how well you can sell stuff in Providence or Newton or Boston. Maybe.

    The challenge to Ahold is that it already is perceived in some quarters as a company that has, through a variety of centralization moves, allowed its Giant-Landover chain to lose touch with its home Washington, DC, market. It would be hyperbole to suggest that Ahold is moving the deck chairs around on the Titanic, but there are those in the industry who believe that they see an iceberg way off in the distance.

    One other note. A year ago, I joked in my annual April Fool’s story that Stop & Shop, because it wasn’t worried about being a local company, planned to save money by moving its operations to Boise. I checked, and it is 2,682 miles from Boston to Boise....and just 400 miles from Boston to Carlisle. But that may just mean that there are a mere 2,282 miles to go...and there is plenty of cheap office space available in Boise these days.

    I’m just sayin...

    Published on: April 16, 2010

    The Chicago Tribune reports that “the first round in the latest battle over a new Wal-Mart in Chicago went to the retailer Thursday as the city Plan Commission endorsed a shopping center anchored by the store for the Pullman neighborhood.

    “But the proposal that would bring a second Wal-Mart still faces major hurdles in the City Council, where aldermen allied with labor unions have again put forward an ordinance that would require businesses receiving financial aid from the city to pay workers at least $11 an hour. Wal-Mart officials have balked at that idea.”

    There is currently just one Walmart within the city limits, and plans to build more have thus far been effectively opposed by union interests and some neighborhoods that fear the loss of local businesses and jobs.
    KC's View:
    There’s a long way to go before Walmart gets that second store. And the debate about the contributions and impact that Walmart makes will be loud, long and contentious.

    In other words, my definition of a good time.

    Published on: April 16, 2010

    HealthDay News reports that researchers at New York’s Columbia University Medical Center have conducted a study leading them to believe that “eating a diet high in vegetables, fish, fruit, nuts and poultry, and low in red meat and butter may reduce the risk of Alzheimer's disease.” Among the people surveyed,

    According to the story, “Researchers asked more than 2,100 New York City residents aged 65 and older about their dietary habits. Over the course of about four years, 253 developed Alzheimer's disease. Those whose diets included the most salad dressing, nuts, fish, tomatoes, poultry, cruciferous vegetables (such as cauliflower and broccoli), dark and green leafy vegetables, and the least red meat, high-fat dairy, organ meat and butter had a 38 percent lower risk of developing Alzheimer's than those whose diets included fewer fruits, vegetables and poultry and more red meat and high-fat dairy.”

    While on the face of it the diet recommended in order to make it less likely that one will contract Alzheimer’s seems like the Mediterranean diet, the story notes that “the diet that seemed to be beneficial in this study is not identical because researchers didn't want to restrict themselves to considering only one culinary tradition. The Mediterranean diet included nine food groups; this study included 30 ... The foods in those 30 groups are those that impact a list of seven fatty acids and nutrients, which previous research has associated with Alzheimer's disease risk. The nutrient combination included: saturated fatty acids, monounsaturated fatty acids, omega-3 fatty acids, omega-6 fatty acids, vitamin E, vitamin B12 and folate.”
    KC's View:

    Published on: April 16, 2010

    The Food Marketing Institute (FMI) has lambasted Visa’s plan to increase by nearly 30 percent the swipe fees retailers have to pay when customers use PIN debit cards, beginning today.

    “It is unacceptable that Visa continues to increase fees at a time when our country needs to protect the hardworking Americans who provide jobs in our communities,” said Leslie G. Sarasin, FMI’s president/CEO. “Swipe fees are hurting small independent businesses and grocers the most because they pay some of the highest rates and have no choice about whether or not to accept debit cards to remain competitive.”

    Credit and debit card swipe fees cost American consumers and businesses more than $48 billion in 2008, and FMI notes that “these hidden fees are set in secret by the banks and credit card companies and have tripled in the past decade. Hundreds of pages of unfair card company rules create a non-transparent system where interchange swipe fees remain entirely hidden from the customer using plastic at the checkout.”

    Sarasin added, “Much-needed swipe fee reforms will continue to be a top priority for FMI. We applaud Senate Majority Whip Richard Durbin (D-IL), Representatives Peter Welch (D-VT) and Bill Shuster (R-PA), and Chairman John Conyers (D-MI) for their leadership on this important industry issue and we encourage other lawmakers to support their efforts to bring meaningful relief to interchange swipe fees and unfair, intrusive card company practices that are squeezing small businesses and raising prices for all our customers.”
    KC's View:
    FMI has this precisely right.

    Published on: April 16, 2010

    Advertising Age reports that Walmart has begun a new advertising campaign promoting the Straight Talk wireless service - sold only in its stores - as potentially able to save users as much as $850 a year. According to the story, “Walmart's making no bones about the fact that it's aiming to beat other prepaid and contract wireless service plans on the basis of cost.” And the ad is, of course, in keeping with the ad campaign that Walmart has been using to suggest that it is the best place to save money and live better.

    • Walmart Canada has announced its commitment to bring only sustainably-sourced frozen, wild and farmed fish to its customers by 2013. The company said that the initiative supports the company's long-term sustainability goal to sell products that sustain people and the environment.
    KC's View:

    Published on: April 16, 2010

    The Arizona Daily Star reports on a free, public charter school in Tucson called the Children’s Success Academy that has unique food rules - “it bans not only white flour, but refined sugar and anything it defines as processed food.” Only juice that is 100 percent juice is allowed. And, the paper writes, ”Among the ‘no’ foods: flavored yogurt, canned fruit, American cheese, processed meats, white bread, peanut butter made with sugar, and virtually all packaged crackers except Triscuits, because they are baked with whole grain.”

    The school has no cafeteria, so all school lunches have to be packed by parents, some of whom say they find the rules a little strict...but the school administration believes that the academic performance of children is directly linked to what they put in their bodies, saying that “healthy eating, healthy problem solving skills and a healthy sense of self-worth create a strong foundation for academic success.”

    There are no exceptions. Not on Halloween, not on Valentine’s Day, and not even on kids’ birthdays.
    KC's View:
    This seems like a little over the top...but then again, you have to apply to and be accepted by this school. And its website seems to suggest that the approach - combined with other things like small classes - gets results.

    Published on: April 16, 2010

    • The Wall Street Journal reports that Walmart-owned Asda Group has unveiled aggressive expansion plans, outlining a scenario that will have it increasing its Asda Living nonfood stores from 24 to 150 in about give years.

    The company also said that it plans to increaser the number of small-format supermarkets that it operates from 22 to 100, over the same period, noting that “opening smaller format and nonfood stores would be key for its future growth.”

    This Is London reports that Whole Foods, which has been operating at a loss in London, nevertheless plans to open several stores in the UK, though they will be less than half the size of the 75,000 square foot flagship unit it has in Kensington.
    KC's View:

    Published on: April 16, 2010

    MNB almost missed this - yesterday, April 15, was the 25th anniversary of the date upon which Jim Koch started selling his Samuel Adams Boston Lager in Boston, an occasion that was observed by the Boston Globe, which wrote:

    “Patriots Day 1985 marked the emergence of American beer drinking from the dark ages, according to Koch. Twenty-five years later, Boston Beer is the largest independently owned US beer maker, and one of the world’s most successful craft brewers. It has expanded from the original lager to offer 19 year-round beers under the Sam Adams name, and a rotating collection of seasonal and specialty brews, including the recently launched Barrel Room Collection ... Today, Boston Beer is publicly traded and turned a profit of $31.1 million on revenue of $440 million last year, while shipping just under 2 million barrels of beer.”
    KC's View:
    Can it be a quarter century since I had my first Sam Adams? Great beer, terrific company, and a wonderful example of how the little guy can effectively compete in a market dominated by behemoths.

    Published on: April 16, 2010

    In Minnesota, the Star Tribune reports that six Democratic senators want to introduce legislation that would tax airlines that charge passengers that bring carry-on bags onto flights. The move comes just days after Spirit Airlines announced that it would charge as much as $45 per bag for bags put into overhead bins; handbags and briefcases that go under the seat still will be free.

    The paper writes that “the senators - Jeanne Shaheen of New Hampshire, Charles Schumer of New York, Ben Cardin of Maryland, Amy Klobuchar of Minnesota and Robert Menendez and Frank Lautenberg of New Jersey - want a law that would designate carryon baggage as a necessity for air travelers.” At the moment, Spirit is saying that carry-on bags are not a necessity, and so can be subject to an extra fee.

    And, the Star Tribune writes, “Spirit spokeswoman Misty Pinson said in a statement e-mailed to The Associated Press on Wednesday that the airline is reaching out to all the senators' offices to clarify information that Spirit believes has been misrepresented in the media.”
    KC's View:
    Sure. Blame the media. Because it is all our fault that Spirit has its head up its tailpipe (or whatever you call the rear end of an airplane).

    I do have a thought about this that may surprise you, however. I’m not sure I love the idea of legislation. Isn’t this one of those cases where the market ought to determine whether or not this idea works? I have no problem with legislative solutions to certain problems, especially those in which people’s health and well-being are at risk, but this seems like small potatoes that would be better solved by people just refusing to fly on Spirit.

    There cannot be that many cities to which Spirit is the only airline that flies there. in fact,. there probably are none. (I’ve never flown them. Ever. And won’t, if I can help it.) So let the market sink them.

    Published on: April 16, 2010

    • The Tampa Bay Business Journal reports that Publix has opened its first Gold Leadership in Energy and Environmental Design certified store: “The 28,000-square-foot store in Sarasota opened in April 2009 ... The store was developed as part of the Lakeland-based chain’s green initiatives and supported its commitment ‘to responsibly grow and maintain a successful business without sacrificing its present viability or the planet’s future,’ a release said.

    “LEED...has become the nationally accepted benchmark for the design, construction and operation of high-performance green buildings. LEED certification criteria is based on many aspects, including sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality.”

    • The Wall Street Journal reports that “ground-beef prices are nearing a record after a sharp rise in recent months, potentially eating into burger-chain profits. Wholesale prices for 90% lean boneless beef were about $1.63 a pound in the week ended April 9, up more than 32% from last year's low in November, according to Agriculture Department data, and near highs hit in 2008. Prices for 50% lean boneless beef, the other main component in most restaurant hamburgers, were up 30.7% from November.

    “One concern is that ground beef prices, which typically hit their yearly peak around early June, have already had a significant run-up this year.” The impact could be seen most by fast food chains, which analysts believe will be hard-pressed to raise prices to reflect the higher costs, especially because many consumers are operating with a recession-mindset.

    • PCC Natural Markets and Seattle Children's Hospital have joined forces to help local families in need. Starting May 1 and running through June 15, PCC will donate 5% of "Kid Picks" product sales, up to a total of $10,000, to support Seattle Children's as part of the "Families Helping Families" program.

    To be a PCC Kid Pick, a product must be approved by two-thirds of the thirty plus child "judges" who test it during tastings on the Kid Picks Mobile conducted at PCC stores, community events and schools. Also in May, PCC will host a series of free family nutrition classes to help parents provide the meals and snacks their children need to be strong and healthy. Participants will try food samples, take part in hands-on activities and leave with information to help make healthy choices to feed the whole family. The PCC Kid Picks Mobile will also be on site in various stores taste testing a variety of foods.
    KC's View:

    Published on: April 16, 2010

    • Coca-Cola has named Beatriz Perez, most recently the senior vice president of integrated marketing for Coca-Cola North America, has been named the new CMO for North America, succeeding Katie Bayne, who has been named to president and general manager of sparkling beverages for Coca-Cola North America.
    KC's View:

    Published on: April 16, 2010

    Regarding the price rollbacks being promoted by Walmart, MNB user Vonnie Veldman wrote:

    If you believe the latest television ad campaign that Walmart is spending big advertising bucks on, all of the rollbacks and lower prices are because Walmart truck drivers are filling up their trucks and taking more efficient routes to bring the product to the shelves. This angle is completely misleading, as rollbacks are typically always funded in part or in whole, by suppliers. Whether it is just covering the normal margin, or funding the actual retail reduction, manufacturers are contributing to the reduced retail cost in some form or another. The truth in advertising is that yes, freight costs are high-diesel fuel is back to $3 or more per gallon, and companies-including Walmart have spent a lot of capital investment dollars to reduce transportation costs overall. Simple equipment upgrades that limit the maximum speed on trucks can improve fuel efficiency significantly across a fleet of trucks. Manufacturers continue to reduce overhead costs wherever they can, employees lose their jobs, plants are closed and operations are consolidated, in order to compete. Simply giving credit to the partnership with manufacturers in bringing rollbacks to the shoppers would have been a more palatable campaign approach, and it wouldn’t depend on consumer lack of knowledge as to how those prices ‘fall’ in the first place.

    Another MNB user wrote:

    How does Wal-Mart get the message across that they are cheaper? With their everyday advertising they are stating that they are the lowest. To me the message will be lost. Thankfully. With the visits I see at our local Wal-Mart their in stock position is terrible, that has got to be one of the reasons their same store sales are down. I also believe that other retailers are doing a much better job competing against them.




    We also got email regarding the food safety bill that is likely to become law within a matter of weeks, and the argument by some small suppliers that the new rules could create financial pressures making it hard for them to stay in business - the debate is whether there ought to be different standards for big and small companies.

    MNB user Phillip Bradley wrote:

    This food safety bill is simply one in an endless number of actions that show that it is big agribusiness which drives the government.  Keep in mind that almost all the infamous salmonella outbreaks, etc., from the past two years, have been caused by large agribusinesses or farms--not to say that it can't be caused by a small producer, but that's the case.

    Second, the small farmers and producers, and in particular the organic ones, tend to have operations that are much less focused on the mass movement of food in the shortest time possible, and thus less susceptible to mass scale outbreaks.

    Exempting small farms (under $500,000) from the majority of the requirements for tracking, registering, etc., makes sense on all counts.  Small farmers are somewhat marginal operations, and burdening them with expensive and time-consuming requirements is a bad idea.


    Another MNB user wrote:

    Food safety is paramount. I've seen national headline grabbing failures and local quiet violations.    Both have the same end results - unsuspecting sick consumers.

    A few years ago, one of my friends purchased a muffin at a local fundraising bake sale for the local pet shelter.    She was horrified to find an actual hypodermic needle in the muffin.      Seems the woman who prepared these donations, also had a quasi-vet clinic in her kitchen for her own dogs.      My friend was alert enough to get the muffin out of the hands of her young daughter before something more serious.   While everyone involved had the best of intentions...... it does not translate to safe food.
     

    At the Fresh Forum in San Antonio this week, Leanne Skelton, senior policy analyst with the Office of Food Safety, FDA Center for Food Safety and Applied Nutrition, made the point that the FDA wants the rule to be “scale appropriate,” but that this means that regulators need to work with smaller producers to help them meet the same standards as big producers, not set different standards.




    A couple of other quick points...

    Earlier this week, we posted an email about the challenges of business travel from MNB user Deborah J. Maestu that said, in part:

    We could all use FedEx or UPS to send our overnight bags to our destination hotel. Let's face - there's almost no such thing as a business day trip anymore.

    I responded:

    I disagree with your suggestion that there are no business trips anymore...

    Well, I got a ton of emails coming to Deborah’[s defense...noting that she wasn’t saying that people didn’t take business trips, but business day trips ...and that I was out of line in my response.

    You’re right. I was wrong. I missed her point. I apologize.

    Finally, I wrote the other day that a company seemed to rationalizing a new policy, and added:

    Of course, rationalizations are necessary, even if they are delusional. Remember what Jeff Goldblum says about how important they are in “The Big Chill.”

    Which led one MNB user to write:

    No we don’t. And it’s irritating that you continually make these obscure references without including the specifics. Please include the actual quote so we can all be in on the joke.

    Obscure references? We’re talking The Big Chill
    here. Hardly an obscure reference. However ...

    What Goldblum’s character says is that "I don't know anyone who could get through the day without two or three juicy rationalizations. They're more important than sex ... Ever gone a week without a rationalization?"

    The reason I did not use the quote - and sometimes only reference quotes without using them - is because certain words like "sex" get caught in spam filters and create issues for some folks trying to access the site from work computers.  It isn't me being prudish or overly cute. Though, to be fair, I’m certainly capable of both, depending on the day and my mood.
    KC's View:

    Published on: April 16, 2010

    Flying down to San Antonio this week, I was changing planes at Chicago’s O’Hare. The connecting flight was delayed because of mechanical problems, however, so we all stood around waiting for them to get us a new aircraft.

    Among the passengers were a couple of dozen young people - two women, the rest men - who in their mostly boisterous conversation made it clear that they had enlisted in the US Air Force, and were on their way to basic training. The majority of them seemed to be in a good, even great mood. They were on their way to a great adventure. A couple of them were quieter, more pensive. But most of them were brimming with enthusiasm.

    I found myself in conversation with an 25-year Army officer who was on his way to San Antonio for some physical rehab, and who was amused by the young people. “It won’t last long,” he said. “Their lives are going to change as soon as they meet that bus at the airport.” Their hair would be cut, their belonging would be taken away, and they would find themselves at the mercy of an officer in charge of their training, he said.

    The plane eventually boarded, and made it way to San Antonio. I noticed that the conversation got a lot quieter as we crossed the border into Texas, and the young people who previously had been so boisterous now seemed lost in thought. When we landed, I noticed that a few of them were calling loved ones, even though it was quite late, to say that they had landed, to say goodbye.

    I watched the enlistees make their way slowly, almost tentatively to baggage claim, where they were about to meet their futures. And I watched the Army officer walk purposefully through the terminal. He was just back from Iraq, he’d told me, and after rehab would be heading to Afghanistan. He’d told me that he was married, with five kids, a couple of them about the same age as those young people who had joined the Air Force.

    There is no moral to this story. It is just that in these few hours, chatting with one man well into his military career, and listening and watching a couple of dozen people just at the beginning of theirs, it struck me how lucky we are to have such people serving this country. It is good to be reminded of this from time to time.




    There was a wonderful story in Fast Company the other day about Tyler Jordan Pluhacek - a 16-year-old Oregon resident that describes him this way: “His favorite subjects are Math and Spanish, and he's an accomplished guitarist and harmonica player with a passion for Blues and Ragtime from the '20s and '30s. He lives at home with his Mom and younger sister. Oh, and he's designed a $.99 app for the iPad.

    “You might expect a teen developer to come up with a frivolous app--a game, perhaps, or something more throwaway. Not TJ. NoteLook is a pretty serious tool aimed at both students and business people, and it helps you organize your note-taking. But then, TJ is not your average teen. He's extraordinarily focused - when asked what he wanted to do after school, this was his response. "I've spent more time than most people looking at my options. When I go to college, I want to obtain degrees in both computer science and business management, and my plan is to become an entrepreneur and start up my own software development business."

    Somebody ought to hire this kid. Quick. Because he’s not just a whiz, but he is a perfect candidate to help retailers understand how to market to the next generation of consumers.

    Besides, he’d be a lot of fun to have in a marketing meeting.




    Say hallelujah.

    The Vatican, according to news reports this week, has finally decided that the Beatles were okay.

    The official Vatican newspaper L'Osservatore Romano wrote this week, on the 40th anniversary of the legendary band’s breakup, that “it's true, they took drugs; swept up by their success, they lived dissolute and uninhibited lives ... They even said they were more famous than Jesus ... But, listening to their songs, all of this seems distant and meaningless. Their beautiful melodies, which changed forever pop music and still give us emotions, live on like precious jewels."

    Ringo Starr, for one, didn’t seem to care. He suggested what a lot of us were thinking - that at this particular moment in its history, perhaps the Vatican had other things it ought to be thinking about and talking about than whether the Beatles made good music.

    Talk about distant and meaningless.

    Can I get an “amen”?




    Some people have real problems. Some people are fighting to maintain things like salary and health benefits in a world where such things have become expensive.

    And then there are the people who work for the Carlsberg brewery in Denmark, who are fighting to for the ability to drink while at work.

    According to the Wall Street Journal, for a century “the wort boilers, bottlers, packers and drivers” working at the Carlsberg brewery have “had the right to cool off during a hard day's work with a crisp lager. But on April 1, the refrigerators were idled and daily beer spoils were capped at three pint-sized plastic cups from a dining hall during lunch hour.” The Journal writes that to employees of the plant, “the right to tip a cold one at work is as sacred as other rights enjoyed by Copenhagen-based Carlsberg workers, such as a year's sick leave at full pay, an average annual salary of $59,000 and two free crates of beer monthly.” And so more than 700 people working for Carlsberg at its plants went out on strike last week until management agreed to renegotiate the limits on beer drinking at work.

    Now, I don’t mean to be unsympathetic to labor, but this story prompts me to ask a number of questions.

    • They get a year’s sick leave at full pay and two free creates of beer a month, and they’re complaining?
    • Three pints of beer at lunch somehow is considered deprivation?
    • They really used to let the drivers drink while at work?

    And, finally, the most important question of all:

    What the hell is a wort boiler?




    Speaking of beer...I’m not sure why, but whenever I leave Texas I forget how much I like Shiner Bock beer. Then I come back, have a pint, and fall in love with it all over again.




    My wine of the week: the Solex 2008 Chardonnay from Medocino County in California. Served fresh and cold, it is excellent for the end of a warm spring day.




    “Date Night” isn’t a great movie, but it is a very funny movie and it offers two wonderful comic performances by Steve Carrell and Tina Fey as a married couple that rediscovers the excitement in their relationship when they are mistaken for another couple involved in a criminal enterprise. The plot focuses on the search for a flash drive, but that’s just what Hitchcock called the “MacGuffin” - the motivation for the plot and character development that doesn’t really have intrinsic importance. What really works in “Date Night” is the relationship between Carrell and Fey, and it actually is the quiet moments that stand out, the times when this husband and wife - who really like and respect and enjoy each other - just talk. I trust that somewhere in Hollywood, writers, producers and agents are looking for another script for these two comic talents to work on together.




    A big shout-out to the folks at Retail Connections, who put together this week’s Fresh Forum in San Antonio and were kind enough to invite me to speak to the meeting. Interesting, provocative discussions...and I was glad to be part of it.

    Thanks also to Beto’s Comida Latina in San Antonio, which hosted a lovely little gathering of MNB readers last night. The conversation was great, it was good to see new and old friends, and the empanadas were terrific. That’s my kind of combination.




    That’s it for this week. Have a great weekend, and I’ll see you Monday.

    Slainte!
    KC's View: