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    Published on: August 3, 2010

    by Michael Sansolo

    When it comes to management advice, Mother Nature knows what she’s doing. Only most of you - like me - probably forget to ever look. Recently I got that reminder.

    My wife and I recently spent a couple of days in upstate New York, hiking some of the incredible gorges around Rochester, Ithaca and Watkins Glen when we noticed something. When we hiked up the path next to the waterfalls, all we saw were those waterfalls. Their majesty and the incredible way they had cut the rock through time. We heard their sound above all else.

    But walking back down the same path the picture was very different. From above, a waterfall doesn’t appear to be all that much; just pools and streams of water reaching the end of rocks. Walking downhill you notice pools that follow each fall. You see the picture in an entirely new way. The exact same thing, seen differently, looks completely different.

    It’s a great metaphor for so much. Be honest: too often we look at the picture in only one way, forgetting that there may be another perspective that is different and equally real as ours. We could use this metaphor to talk about the political debate that raged here on MNB last week, but I’d rather go in a different direction.

    While many of us get the chance to manage, all of us have been managed. Ask yourself how often the lessons of being managed have shaped you as a manager. Do we remember to look at the picture from the other direction, to think about how our words and actions are received, instead of how we deliver them? Or do we forget to ever turn around and see the scene from the other direction?

    I spent part of this hiking trip with a college friend, who asked me pointedly about how retailers cope with the new generation of teen-agers, specifically with their propensity for tattoos and piercings in various body parts. I explained that it is a challenge, but one that many retailers are learning to handle. In many ways, I said, it’s not that different from when we started working decades back and the older generation looked askance at our hair and clothing styles.

    Somehow we learned and I suspect the same will happen with that new group. But honestly, that’s wrong and it brings me back to the waterfalls. The difference is the perspective of where we are today vs. where we were.

    I can think back on some of the best managers I had in my career. One of my first was a city editor who was nearly a foot shorter than me yet scared me. She made it clear that I needed to become more disciplined and every day she rode me hard with rules and guidelines to get me to mature. It’s hard to say if all the lessons stuck, but I know that she made a difference.

    She didn’t talk to me about my hair or my dress. She talked to me about doing the job better and helped me understand how to behave professionally. So I trimmed my hair and dressed nicer and suddenly all the people I covered at this small daily newspaper treated me better. Interviews became easier to get. I doubt I was the only one with such a mentor and I wonder if we all do a good job of passing the lessons on today.

    The waterfalls got me thinking about that, especially my career as a manager. I think I need to make a list of the best leadership traits of all the managers I ever had. And I need a list of the worst leadership traits of all the managers I ever had. The first list should dominate my style; the traits on the second list should disappear.

    In short, I should manage with the style and messages that I always preferred, recognizing that my staff would probably respond best to that too. I’m probably not the only person who needs that reminder. And it’s all thanks to Mother Nature getting me to look at a waterfall from two different directions. Sometimes you have to turn around.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His new book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
    KC's View:

    Published on: August 3, 2010

    The Harvard Business Review writes that “most customers these days demonstrate a huge — and increasing — appetite for self-service, yet most companies run their operations as if customers prefer to interact with them live ... we've found that corporate leaders dramatically overestimate the extent to which their customers actually want to talk to them. In fact, on average, companies tend to think their customers value live service more than twice as much as they value self service. But our data show that customers today are statistically indifferent about this — they value self-service just as much as using the phone. And guess what? By and large, this indifference holds regardless of their age, demographic, issue type, or urgency.”

    And, the Business Review goes on:

    “What is it that makes self service so appealing? Maybe it's the efficiency of the interaction — the airport kiosk is probably faster than interacting with a check-in agent — but that wouldn't explain why we go out of our way to take care of our service needs ourselves.

    “On a psychological level, it might have more to do with the unique element of control that self service affords. Or, maybe this self-service love affair is a product of our infatuation with gadgetry and electronic communication. All fairly benign explanations, to be sure.

    “But here's a hypothesis that would be concerning if it's right: maybe customers are shifting toward self service because they don't want a relationship with companies. While this secular trend could be explained away as just a change in consumers' channel preferences, skeptics might argue that customers never wanted the kind of relationship that companies have always hoped for, and that self service now allows customers the ‘out’ they've been looking for all along.

    “For managers hell-bent on deepening relationships with their customers, that's a sobering thought.”

    Now, I hate to argue with the Harvard Business Review. The folks there obviously are a lot smarter than I am.

    The premise is an interesting one, but in some ways flawed.

    I’d suggest that maybe it is not so much that customers do not want relationships with the companies with which they do business, but that they want relationships that are 1) relevant, 2) relevant, and 3) relevant.

    Which is to say, relationships that serve the customer, not the business.

    Do we like using self-service kiosks at the airport? Do we prefer ATMs to bank tellers? Is the use of self-checkout lanes at various retailing venues proving to be popular with many shoppers?

    Sure. Why not? They are replacing interactions that generally were not very pleasant, not very rewarding, and not very relevant. Most people would agree that checking out of a supermarket is the least pleasurable part of the shopping experience, so why wouldn’t we want to replace it with something impersonal, inoffensive and technological?

    Maybe businesses simply have to do a better job of interacting with customers in the first place, providing them with usable information and a relevant connection.

    If checkout personnel actually were trained and encouraged to talk to customers - and maybe even more important, listen to them - as opposed to chatting among themselves, maybe things would be different.

    Let’s face it. A lot of self-service options have been created to save money for the service provider, not just to provide better service to the shopper. It seems to me that if self-service were viewed as a tactical option within a broader, service-driven strategy, then companies might take a different approach, and customers might want to have a relationship with them. A relevant relationship.

    And that’s my Tuesday morning Eye-Opener.
    KC's View:

    Published on: August 3, 2010

    Bloomberg reports that “AT&T Inc. and Verizon Wireless, the biggest U.S. mobile carriers, are planning a venture to displace credit and debit cards with smartphones, posing a new threat to Visa Inc. and MasterCard Inc., three people with direct knowledge of the plan said.”

    The system, once in place, “would let a consumer pay with the contactless wave of a smartphone, the people said ... The trial would be the carriers' biggest effort to spur mobile payments in the U.S. and supplant more than 1 billion plastic cards in American wallets. Smartphones have encroached on tasks ranging from Web browsing to street navigation and now may help the phone companies compete with San Francisco-based Visa and MasterCard, the world's biggest payments networks.”

    According to the story, “Retailers may be eager to help another network after years of fighting over transaction fees set by Visa and MasterCard. The merchants pressed Congress last month to approve caps on interchange, or ‘swipe’ fees, for debit transactions and filed a 2005 federal antitrust lawsuit that is still pending. The U.S. Department of Justice is weighing whether to bring a civil lawsuit against Visa, the company said last week.

    “Interchange fees on credit and debit cards exceed $40 billion a year and average about 1 percent to 2 percent of every transaction. The people with knowledge of the carriers' venture didn't say how much merchants may be charged per transaction or when the trial will start.”
    KC's View:
    Not only will merchants embrace an alternative to credit cards, but I suspect that shoppers - who are carrying their smartphones around with them anyway - will love having the ability to leave the cards at home. There obviously will have to be ample security measures built in...but this strikes me as a no-brainer.

    Published on: August 3, 2010

    The San Francisco Chronicle reports that the city’s Board of Supervisors will take under consideration new legislation that would expand the current ban on disposable shopping bags by chain supermarkets and drugstores to all retailers, “including hardware stores, bookshops, clothing boutiques and department stores.”

    According to the story, “Since the San Francisco ban went into effect, an estimated 100 million plastic bags a year have been removed from the waste stream, said Mark Westlund, spokesman for the city's Department of the Environment. That means fewer plastic bags hogging up the landfill, clogging storm drains, littering city streets, jamming recycling machines and hurting marine wildlife, proponents say.”

    San Francisco Supervisor Ross Mirkarimi, who proposed the original law, now estimates that “broadening the law would remove tens of millions more bags from the environment.”

    And, the Chronicle writes, “Mirkarimi's proposal sets a March 1, 2011, effective date and differs from the state legislation that would ban the use of plastic bags at all food and convenience stores, and prohibit all retailers from handing out free paper bags. The state bill would impose a minimum 5-cent charge on paper bags. The California Grocers Association is not opposed.

    “What concerns Mirkarimi about the state legislation is that it could prevent San Francisco and other municipalities from adopting more stringent policies. He said that shouldn't stop San Francisco from moving forward with his proposal, even if that means waging a legal battle with the state.”
    KC's View:
    If one is going to support this kind of legislation, it seems to me that it is important to insure that it covers all retailers, not just some. If you say that plastic bags are bad for the environment, you cannot just say it is the chain store plastic bags that are harmful.

    Published on: August 3, 2010

    Fredericksburg.com reports that Harris Teeter has decided not to build a $101 million, 500,000-square-foot distribution center in Virginia’s King George County that it had originally announced in January 2009.

    The original development plans were put on hold because of the recession. Now, Harris Teeter says, “prompted by a drop in fuel costs and the availability of affordable warehouse space in closer proximity to its existing distribution centers, Harris Teeter decided to earmark its capital toward other projects and not pursue the new distribution center.”

    According to the story, “Harris Teeter has distribution centers in the Charlotte and Greensboro areas and a smaller ‘relay station’ in Spotsylvania County. The company will supply its existing locations and the nine stores it plans to open in fiscal 2011 through those facilities.

    “Harris Teeter has targeted Northern Virginia as an expansion area.”
    KC's View:

    Published on: August 3, 2010

    Canadian retailer Alimentation Couche-Tard said yesterday that it would extend its $1.9 billion tender offer for Casey’s General Stores from August 6 to August 30.

    Casey’s continues to oppose the offer, releasing the following statement: “The low -- and declining -- number of shares tendered clearly demonstrates that Casey’s shareholders do not support Couche-Tard’s inadequate, highly conditional $36.75 per share offer. We believe that our shareholders recognize the superior value we are creating through our continuing strong performance, strategic growth initiatives and highly accretive recapitalization plan.”
    KC's View:

    Published on: August 3, 2010

    Advertising Age reports that a new study from The Nielsen Company says that the time spent by Americans “on social media accessed from PCs rose from 15.8% in June 2009 to 22.7% in June 2010 ... while online gaming gained more modestly to 10.2% of online time from 9.3% a year earlier. But that was enough to push gaming past e-mail, which fell to 8.3% of online time spent at the PC from 10.5% a year earlier.
    KC's View:

    Published on: August 3, 2010

    • Hy-Vee yesterday said that it is acquiring two Sunshine Foods stores, in Sioux Falls, South Dakota, and one in Windom, Minnesota, and will convert them to the Hy-Vee banner. Terms of the deal were not disclosed.

    Another Sunshine Foods store, also in Sioux Falls, will be closed as part of the deal. Sunshine will keep a store open in downtown Sioux Falls, and says it will focus on rural markets.

    • The Sacramento Bee reports that “Target stores in Sacramento and elsewhere are clearing more space for groceries even as rival Wal-Mart continues its aggressive push into the food business. The renewed assault by big-box stores – coming when many consumers are trying to cut spending – intensifies competition for traditional grocers, including West Sacramento-based Raley's, the local market leader.”

    • The Wall Street Journal reports that “prices for fresh pork bellies, from which bacon is made, are at an all-time high of $1.35 a pound, 53% higher than they were a year ago.

    “Bacon demand tends to peak during the summer, when supermarkets heavily promote the meat product—sliced from the fatty part of a pig's abdomen—to coincide with a seasonal bump in Americans' consumption of BLTs: bacon, lettuce and tomato sandwiches. The decision by North American swine producers to cut their losses by trimming their herds back in 2008 and 2009 is now feeding into cost pressures faced by supermarkets.”
    KC's View:

    Published on: August 3, 2010

    • Rich Donckers has been appointed president of Northern California’s Mi Pueblo Food Center. From 1987 to 1993, Donckers served as Vice President of Wal-Mart Stores; more recently, he has provided consulting services to international corporations such as Wal-Mart, Fleming Companies, Blockbuster Video, Randall’s Food Markets, Hudson Foods, Food Brands America, and Hussmann Corporation.
    KC's View:

    Published on: August 3, 2010

    • Morrie Yohai, the former president of Old London Foods, which was acquired by Borden in 1965, has passed away at the age of 90. Yohai’s contribution to the culture? He is credited as the inventor of Cheez Doodles.

    • Mitch Miller, the record company executive who became a popular television host in the early sixties when his “Sing Along With Mitch” on NBC offered a counterpoint for old people to the rock ‘n roll that was gaining prominence with young people, has died at age 99.
    KC's View:

    Published on: August 3, 2010

    On Monday, in my “Eye-Opener” essay, I spoke about a chance encounter that my daughter and I had with Alejandro de la Loza, a Southern California sculptor who makes a living as a high school art teacher.

    An excerpt:

    Alejandro described for us the challenges of teaching high school art, that the skill abilities and interest levels can be all over the map. His goal is to engage each of his students in a way that works for them, not for him. That’s incredibly important, I think, and I’m not just speaking here as a pundit, but as someone who has seen both good and bad teachers over the years. My eldest son, now almost 24, put it succinctly a decade ago when he had a teacher he liked: “He teaches the kids, not the subject,” he said.

    In all of our organizations, that’s something we need to integrate into our leadership strategies - that each employee is a different person, with different skill levels and different ways of learning. To treat them all the same, to talk to them all the same way, may seem like the most efficient way to do things. But I’m betting in the vast majority of cases, it is far from the least effective.

    Alejandro also told us about how he teaches art, and how he integrates writing into his approach. Often, he tells the kids that they are going to make a book - an interesting notion all by itself in a digital world - and provide both the copy and the art. Beyond finding that kids often connect in some primal way to the notion of paper and ink (which will be encouraging to those who believe that physical books will never be replaced by Kindles and iPads), Alejandro encourages them to cut loose as much as possible.

    And he doesn’t worry about mistakes. In fact, he told me, “Mistakes get extra credit!” He wants the students to be as innovative and free-thinking as possible, and sees it as his job to get out of the way of all that creativity. Now, there are a lot of people in business leadership positions who say that they encourage people to make mistakes, but I suspect that the recession has cut down on their number; I also think that “the freedom to make mistakes” is a vastly overworked cliche that gets a lot more lip service than actual adherents. But “mistakes get extra credit”? Now that’s the kind of message that could fundamentally change an organization. Think about it.

    Finally, Alejandro said something extremely meaningful during out conversation, which took place as the waiters were cleaning away the dishes and I was sipping at the end of my Coppola Shiraz. Even people who are not that intelligent will behave more intelligently “if you tell them they are,” he said.

    Another wonderful metaphor that ties into my general feeling that people and companies that refuse to cater to the lowest common denominator will be rewarded. Treat people as intelligent and aspirational and they actually will behave that way.


    MNB user Randy Aszman wrote:

    Wow. Maybe it’s the two cups of coffee … or the vitamins, salmon oil, and CoQ10 I just ingested. But this is the best report I have seen you submit. This needs to be sent to every school administrator in the country. Well done, and thank you, Kevin.

    MNB user Marv Imus wrote:

    And your daughters thoughts ? Would have been a great addition to the segment...

    True. She also was wowed by the conversation.

    Another MNB user wrote:

    I'm not completely disagreeing with you but I did find some humor in some of this. It seems on some level that you're saying if we tell a complete moron that they're smart and offer bonuses for mistakes, that somehow our business will be rewarded. I don't know how many managers are going to buy into that.

    That’s not what I was saying at all.

    I was saying that when people make mistakes because they are trying to be different, innovative, extraordinary...that’s when they ought to be rewarded. Mistakes of laziness and negligence obviously should not get rewarded.

    As for morons...well, I’d guess that there are a lot of people out there who behave moronically because that’s how they are treated.

    My premise here is the same as the one as when my kids were little. I never, ever used baby talk. I don’t believe it it. I think that if you talk to kids as if they are intelligent, thinking human beings, and use complete sentences and good grammar, they will respond by thinking and talking like intelligent human beings, using complete sentences and good grammar.

    Finally, here’s a reaction I didn’t see coming, from MNB user Richard Evans:

    Interesting piece in your Monday Morning Eye Opener about tailoring the skill abilities and interest levels of students to their individual needs.

    You said in part "In all of our organizations, that’s something we need to integrate into our leadership strategies - that each employee is a different person, with different skill levels and different ways of learning. To treat them all the same, to talk to them all the same way, may seem like the most efficient way to do things. But I’m betting in the vast majority of cases, it is far from the least effective."

    May be a bit of a stretch but, makes me think of another saying in a similar vein.

    "From each according to his ability, to each according to his need."

    It was a slogan popularized by Karl Marx in his 1875 Critique of the Gotha Program.

    According to Wikipedia, the phrase summarizes the principles that, under a communist system, every person should contribute to society to the best of his or her ability and consume from society in proportion to his or her needs. In the Marxist view, such an arrangement will be made possible by the abundance of goods and services that a developed communist society will produce; the idea is that there will be enough to satisfy everyone's needs.

    Novel point of view you have there.


    Been called a lot of things in my life. But not often a Marxist.

    But I really don’t think I was espousing a Marxist position. Far from it.




    Yesterday, MNB took note of a new story saying that whole wheat bread sales have exceeded white bread sales for the first time.

    I commented:

    What’s interesting about this story is that, at least by implication, “whole grains”and “whole wheat” are made to sound like the same thing. But it’s always been my impression that this is not true...that there are whole wheat breads that are not much healthier for you than some white breads.

    I always think that the industry needs to be careful about encouraging these kinds of mistakes...that the error may be the media’s, but the fault will be laid at the door of food retailers and manufacturers.


    Got a number of responses to this...

    MNB user Cynthia Harriman, Director of Food and Nutrition Strategies for Oldways / The Whole Grains Council, wrote:

    We enjoyed your piece titled "Against the Grain" in today's Morning NewsBeat.

    Thanks for encouraging your readers to be savvy about finding whole grain foods. Both "whole wheat" and "whole grain" on a label can mean that all the grain in the bread is whole grain – or very little of it. Our Whole Grain Stamp helps, by telling you exactly how much whole grain is in each serving. If you're looking for breads (or other foods) made entirely with whole grain, look for the 100% Whole Grain Stamp; if you're still transitioning to the fuller, nuttier taste of whole grain, you may prefer a product that's made with a mix of whole and refined grain. (It's kind of like drinking 2% or 1% milk rather than skim.)

    The Whole Grain Stamp is now on more than 4,000 products in every aisle of the supermarket, and it always guarantees at least a half serving of whole grain per portion – a significant contribution to our daily recommendation of three or more servings of whole grain.


    Another MNB user wrote:

    Years ago (early 90’s) I was working with a major mid-west retailer on a project to create planograms based on purchase behavior.  We were working on the DSD bread category and began by indexing stores based on white bread volume vs. wheat bread volume.  The underlying assumption was that more affluent areas would buy more wheat bread and we would expand that section of the planogram in those stores with the highest index of wheat: white.  Guess what…it’s not always true.  In fact, the correlation between “wheat” and “affluence” was actually the opposite.  The highest penetration of wheat bread unit sales was in the lowest income urban areas.  We never found anything that completely explained the anomaly to our expectations. What we did figure out was that what we meant by “wheat” was actually “premium brands” so we recalculated the index based on private label white vs. a specific premium brand.  At which point, everything fell into place and began to make sense again.

    I guess my point in telling this old story is that “wheat” as a descriptor is basically meaningless when trying to make assumptions about behavior.  Although my point could also be that analysts have to be very careful when reviewing data and presenting results because people can jump to conclusions.


    Another MNB user wrote:

    For a bakery product to be called “whole wheat”, the first ingredient in the ingredients statement must be “whole wheat flour”.  If it is, then you can’t get much better than that.  Commercial bakeries (Brownberry, etc) will get it right as they know they must abide by FDA guidelines.  Where you can get tripped up is in the instore bakeries.  They tend to be loose w/the whole wheat description and, often, the first ingredient is simply wheat flour, the tip off the item is not baked from whole wheat.

    Whole grain can be other whole grains than whole wheat.  But neither  (whole grain vs whole wheat) is superior to the other.  Wheat is just a type of grain. Other grains that can be considered to be whole grain are brown rice, barley, buckwheat, quinoa, corn, oats, rye, teff, triticale, millet, amaranth, sorghum, and wild rice. Wheat can come in the form of spelt, bulgur, wheatberries, and faro.

    Many products that say whole grain may have a mix of any of the above whole grains or they may just have one, like whole grain oats.  Multigrain just means there are a few different grains in the product, but that does not necessarily mean any of the them are whole grain.  So, this is the term “multi grain” that can trick/confuse people as there doesn’t have to be any “whole” grains in that type of bakery product.  Again, looking at the ingredients statement will tell whether the grains are whole or not.


    And MNB user Jane Andrews wrote:

    Nutritionists like me love nothing more than seeing a trend like the one you reported:  whole wheat is surpassing white bread in sales.  But you raise the idea that whole wheat may not as good for you as whole grain: nonsense!  That’s because whole wheat is a whole grain.  In fact, most of the studies on whole grain health benefits have been with whole wheat – just because it’s our favorite grain – not to otherwise dismiss whole oats, corn, rice, rye and barley.  There is deception, intentional or not, in the marketplace.  Folks assume that healthy sounding names like “multigrain” mean that the product is whole grain.  Sorry, the product is most likely a blend of several, hence “multi” refined grains with not much, if any, whole grain.  Look for the word “whole” describing specific grains in the ingredient list:  the higher on the list, the better for you.
     
    I think I have this all figured out now...

    I think.

    But I do have one question.

    Are there whole grains in Quadro-Triticale?

    Just curious.




    Regarding the trademark dispute between the owners of Colgate and Aquafresh toothpastes, one MNB user wrote:

    On the surface, to the uninitiated, most trademark disputes appear to be about nothing…

    But, trademarks that are not fully protected by the trademark owner,  can lose certain rights…diluting the effectiveness of the trademark…

    There are very little black and white areas of trademark protection, but every potential infringement must be explored. We do most of our explorations through open dialog and open communications and have never been to court…


    As opposed to the lawsuits going back and forth now between the toothpaste companies.





    Yesterday, I wrote:

    While I was in San Francisco last week, driving in from the airport, I noticed a glistening steel and glass building with “Walmart.com” written across the top in bright blue. And the first thing I thought about as I looked at this building, nestled in the same part of the world as companies like Apple and Genentech, was whether they have card tables and lawn chairs as furniture in the Walmart offices there, just like back home in Bentonville.

    Just curious.


    One MNB user seemed to think my reference was out of date:

    I take it you have not been to Bentonville for a while?

    Last year. Did I miss the redecorating?

    Another MNB user wrote:

    Although it has been several years since I have been in them, don’t be fooled by the outside.  The inside is plastic and card tables and low cost chairs.  Nothing fancy other than the view.  The buyer’s did however have their own offices which is a big step versus what they get in Bentonville.

    I do know one thing.

    That building is very visible from the road, and fairly shouts out, “This is not your father’s Walmart.”
    KC's View: