retail news in context, analysis with attitude

Published on: August 17, 2010

by Michael Sansolo

A terrible fight broke out on the Washington subway system recently. It happened at 11 p.m., spilling out onto two different stops and involving, according to police, 70 people. When I first heard the story I did the same thing you probably did: felt disgust. Then I felt relief because I live in the Washington area and while my family uses the subway frequently in the area where the fight occurred, none of us were out that night.

So imagine my shock when I read a column in the Washington Post about the melee that summarized the event with: “Looks like progress to me.” I couldn’t believe anyone could say that about such a shocking event, until I read on and learned that there were some who actually saw a silver lining.

The point made by the columnist, Courtland Milloy, was that while the fight was awful, its result wasn’t. There were no deaths and only four of the 70 people involved needed medical attention because the weapons of choice in this fracas were only fists and feet. In sharp contrast to the sometime shocking outbreaks of gun violence in DC, this fight actually wasn’t that bad.

Honestly, it’s a point of view I would have never considered. I saw the fight as awful, fearful and a black-eye for a city that has more than its share of issues. But while I may not subscribe to Milloy’s point of view, it was enlightening to read it and therein, I think, lies a big lesson for us in business.

I’ve written before about our need to listen to opinions that differ from ours, to understand that all stories have another perspective, even if we hate it. It pains me today that I know so many people who receive all their news and commentary from only one side of the political fence, in essence only reinforcing and not challenging their own views. There was a terrific column about this by Maureen Dowd in the New York Times on how college students now can select their freshman roommates by finding like minded people on places like Facebook.

Dowd’s point applies in business. She argues that students lose out by not taking the chance to live with someone with different likes, dislikes, backgrounds, values and goals. They might find some new tastes in everything including music, fashion, political leanings and, of course, college eating habits. None of that happens when we pick people who are just like ourselves.

In business, we have to heed those warnings. Our customers come from all different backgrounds, with different needs, values and goals. If we only hire people like ourselves we can miss out on understanding all the differences and diversity in our communities. If we only hire people like ourselves we run the risk of becoming too self-congratulatory and fail to understand where we might be falling short.

Dowd’s article is worth reading by anyone in the business of hiring. Make sure you aren’t only selecting people who reflect your views and values; sure you want good workers, but you don’t want clones. Challenge yourself and challenge your team to think outside the comfort zone. You never know what you’ll learn.

As a last point, consider a recent column by John Renesch in the Christian Science Monitor about the impact of monolithic thinking. Renesch wrote: “We are building silos of ideologies, isolating ourselves into factions, and preaching to our choirs about the faults and defects of ‘the other.’ Each silo is suffering from ‘groupthink’ - reinforcing its own dogma and avoiding any feedback that disagrees with the party line.”

Such behavior is damaging our entire political dialog; in business it could be fatal.


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 .

Published on: August 17, 2010

There was an interesting story in the New York Times the other day about Barney’s Pharmacy in Augusta, Georgia, an independent drug store that, in addition to selling prescriptions and HBC items, offers its customers access to a “personal health coach.”

Shoppers are offered classes at a new Barney’s wellness center that teach them how to manage disease - and health - with drugs, diet and exercise.

And here’s the kicker. Prescription sales at Barney’s have tripled over the past seven years ... and the owners there have diversified into a new business that teaches other pharmacies how to expand their product and service offerings.

Now, the Times story more broadly is about how drug stores in general and working with insurance companies to reduce the cost and increase the accessibility of health care options. But the real lesson here is that you don’t have to be a big company like Walgreen or CVS to think differently about how to do business.

The folks at Barney’s realized that they were not in the prescription business. They were in the health business...and to succeed in that arena, they needed to define their business both in broader and more specific terms, creating for themselves a series of differential advantages that would make Barney’s the pharmacy of choice.

Which sounds like a good prescription for any business.

And that’s my Tuesday morning Eye-Opener.

- Kevin Coupe

Published on: August 17, 2010

The Chicago Tribune reports that Sara Lee is the latest food manufacturer to jump on the anti-high fructose corn syrup bandwagon, announcing that it is removing the sweetener from two of its most popular products, the Soft & Smooth and 100 percent Whole Wheat bread lines - a move that is highlighting the continuing debate about the sweetener.

According to the story, “High-fructose corn syrup, the widely used and historically inexpensive sweetener, has been getting a critical look from food scientists and many American families, thanks at least in part to books, movies and studies looking at why Americans continue to gain weight. First lady Michelle Obama, meantime, has said that she won't feed her daughters products containing the ingredient.

“Many medical and nutritional professionals, as well as the Corn Refiners Association, contend that all sweeteners are metabolized the same way.

“A Princeton University study, on the other hand, has shown that long-term consumption of high-fructose corn syrup does lead to abnormal increases in body fat, especially around the belly. Books like ‘The Omnivore's Dilemma’ have added to the debate, charging that widespread use of high-fructose corn syrup is part of what's wrong with the American diet.”

Published on: August 17, 2010

Bloomberg reports that there are expectations that “the back-to-school shopping marathon, the second-largest shopping season in the U.S. after the end-of-year holidays, could be pushed deep into September,” as customers wait for the deeper discounts that they feel inevitably will come.

 “No one buys on the first markdown,” says Craig Johnson, president of the consulting firm Customer GrowthPartners. “Only chumps pay full price. We haven’t seen the desperation fire sales yet.”

The sense seems to be that the recession has trained shoppers to wait on making planned purchases, since they believe that retailers will engage in price wars, aggressive promotions, and various other machinations as they sacrifice margin for sales and market share.

Published on: August 17, 2010

The Denver Post reports that Nash Finch attorneys have admitted liability in a lawsuit filed by six customers that challenged its policy of charging a 10 percent fee on purchases at its Avanza stores.

The admission came just as a trial in the case was scheduled to begin; Nash Finch will pay the plaintiffs $700 apiece, plus “reasonable” attorneys fees.

The policy in question was only used at Nash Finch’s Avanza stores, which catered to the Hispanic market. The stores advertised low prices, and then added a 10 percent fee at checkout; the plaintiffs said that the policy was confusing and misleading.

Published on: August 17, 2010

The St Louis Post Dispatch reports that “Schnuck Markets announced today that it will close its store in Cordova, Tenn. by the end of August.” Tough competition - including that from Walmart - was cited as the reason.

"We are now facing increasing pressure from five competitors within a two-mile radius, including two supercenters," Scott Schnuck, the chairman and chief executive of Schnuck Markets said in a news release. "In our experience, grocery options in Cordova have well exceeded demand."

Published on: August 17, 2010

Marketing Daily reports on new research from The NPD Group into the acquisition habits of twenty-somethings, saying that:

• They are "connected like no generation before them," confident, and “tend to have an ‘of the moment’ mentality.”

• They “are more likely than other age groups to heed cravings -- and to highly value minimal preparation time -- when it comes to food and meal choices.”

• They “are more likely than consumers in other age groups to use frozen entrées and other portable, quick-prep items, and this translates to low consumption of leftovers.”

NPD Group also says that twenty-somethings have a) been hard-hot by the recession, and b) tend to be heavy users of discount retailers such as Walmart.

NPD analyst Darren Seifer tells Marketing Daily that “For food CPGs and restaurant marketers, major opportunities -- and challenges -- lie in learning how to communicate effectively with this ‘connected’ generation, as well as offering products and meal/snack solutions that fit their spontaneous, budget-conscious lifestyles.”

Published on: August 17, 2010

The Los Angeles Times reports that Starbucks is preparing to launch a new digital network that will serve as a landing page/portal for customers who access the internet while in its stores; the coffee retailer has established relationships with a number of media companies - including the New York Times, USA Today, Rodale, Zagat, Yahoo, and Nickelodeon - to provide content for the Starbucks Digital Network.

In addition, the Times writes, “If customers opt to stay on Starbucks' home page, they'll have access to things such as free iTunes downloads and content on paid sites such as the Wall Street Journal. There’s also an optional ‘sign in’ to the MyStarbucks account, a Yahoo search box and six channels of topics - news, entertainment, wellness, business and career, my neighborhood, Starbucks - based on localized content for that store’s neighborhood.”

Published on: August 17, 2010

USA Today reports that celebrity chef Rachael Ray has introduced a new iPhone application called “Tasty Bytes,” costing $1.99, which “includes 200 recipes and a shopping function that tallies ingredients and amounts from selected recipes into
one list ... Tasty Bytes recipes and shopping lists can be e-mailed to users for backup. The recipe database, which includes 30 recipes exclusive to the app, is searchable by meal type, holidays, cooking style and ingredients. You also can work backward, choosing ingredients, meal types and cooking styles to find a recipe that fits what you're in the mood to eat.”

Published on: August 17, 2010

• The Charlotte Business Journal reports that Delhaize-owned Food Lion and its affiliated stores - Bloom, Harvey’s and Reid’s - have struck a deal to carry 200 OfficeMax products year-round, as well as an expanded selection of back-to-school merchandise.

• In Canada, the Chronicle Herald reports that Sobey’s has broken ground on a new headquarters in Stellarton, Nova Scotia, that will replace an HQ building that has been serving in that capacity since 1946. According to the story, “The new building is to feature more efficient use of space, improved meeting and teleconferencing facilities, energy efficient natural lighting, solar hot water technology and reflective roofing to reduce the need for air conditioning.”

• Reuters reports that Loblaw Cos. “will close its Halifax distribution center in Nova Scotia by October 9, to reduce excess capacity in the Atlantic region ... The company has six distribution centers in the Atlantic region servicing about 123 Loblaw stores.”

• CBC News reports that “about 91 per cent of Canadians have detectable levels of bisphenol A (BPA), a chemical used to make some hard plastic containers, bottles and toys, a new report suggests.

“Statistics Canada released the finding Monday as part of the results of its survey measuring the levels of various contaminants in the urine of Canadians aged six to 79. Bisphenol A is an industrial chemical used to make polycarbonate plastic for water bottles and food containers as well as the protective lining in metal cans. It does not occur naturally in the environment.”

The report notes that “animal studies suggest that, once ingested, BPA may imitate estrogen and other hormones, according to the U.S. National Institutes of Health.” The possibility of a ban on the use of BPA in plastic food and beverage containers in the US is the subject of much debate at the moment.

Published on: August 17, 2010

I got the following email from MNB user Harry Hamil, objecting to my support of the food safety bill currently making its way through the US Congress:

The HELP Committee passed Chairman Harkin's version 19-0 on 11-18-10 at which point it went under the control of the "bill manager."  In this case, that was the 6 Senators (Harkin, Enzi, Durbin, Gregg, Burr & Dodd) cited in the press release.  That staff of those Senators have been working hard trying to hammer out an agreement.  Sen.Feinstein's BPA amendment and Sen. Testers & Hagan's amendments to protect small growers, packers, processors and distributors from the industrial-size-only regulation of S 510 were not included.  Both will be offered when S 510 comes to the floor.
 
You have, once again, ignored the 157 grassroots local, regional & national organizations that have been struggling to include Tester-Hagan and only mentioning the FMI which would love to have our competitive threat neutralized by a "food safety" bill.

As you had a comment to the Senate that showed astonishing ignorance of how it works and its tremendous work load, I have one for you:  open yourself to the truth about the long term damage that S 510 without Tester-Hagan will do to American agriculture and rural economies ...  For one, how can we, food distributors, create a Hazard Analysis & Risk-based Preventive Control (HARPC plan) that deserves the name, much less a total waste of time?  Our hazards are already well controlled by GHPs.  We have zero  true "critical control points" because they don't process!  I challenge you to cite a single documented outbreak, the source of which was a food distributorship.  Yet, they will have to create a "plan" for the FDA that has demonstrated almost no knowledge of what is really going on.

I hope to begin uploading info to www.healthyfoodcoalition.org this week to help people inform themselves on the threat that the manager's package version of S 510 poses to the local, healthy food movement.

Unfortunately, Kevin, for a bright guy who goes against the grain much of the time, you have bought the foolishness of the Make Our Food Safe coalition hook, line and sinker.  And I hope like everything that I never have the need to say, "I told you so.  What are you going to do now?"




I continue to get emails about the “preferred parking for hybrids” issue.

MNB user Richard Lewis wrote:

This makes me think of another service that you like: that of preferred treatment on airlines as a revenue stream. The last airline I took across the Channel operates a system where if you pay a supplement, you get on the plane first. Inevitably, this means a lot of absurd, would-be alpha-males in business attire, wracked with status anxiety, pay to push in front of the pregnant women and mothers with toddlers and babies. It's an appalling sight. Truly sick-making.

You mis-characterize my position. I actually think that it is a mistake to sell the kind of treatment that used to be reserved for first class passengers and frequent flyers, because it devalues the notion of loyalty.

Not sure what airline you are flying on, but most of the carriers I use allow people with kids onto the plane first. As a matter of policy, they ought to do the same thing for pregnant women.

MNB user Dana Wise wrote:

Two opinions follow.

No - people who buy hybrids do not get to park up close.

Yes - expectant mothers (how else would you have gotten here), mothers with children under 2, dad's with children under 2, old frail ladies and old men, and the handicapped get to park up close.  These people deserve our respect and help.

Another MNB user wrote:

Regarding your piece on civility and parking "for energy efficient cars," are the spaces marked "Hybrid" or "Alternative Fuel?"  Many buildings have parking reserved for alternative fuel vehicles.  However, several Ford and GM models (including the big SUVs) have been 'flex fuel' vehicles for many years.  They run on gasoline or ethanol.  Now if we could get ethanol at a local station (rather than several hundred miles away), THAT would be real progress.  I guess 'green' comes in many shades.




And, on the general subject of civility, MNB user Lisa Bosshard wrote:

Not agreeing or disagreeing with you, but rather something someone else wrote that you posted.... I travel a lot via plane and have many first hand encounters with the survival of the fittest that overcomes people when they're on airplanes.  To be frank - I just don't get it!   I don't get what takes over common, human decency, but see it every week during business trips.   It has made me dread traveling and for someone who used to enjoy that about their job, it should say a lot.    The worst experience was just a few weeks ago, heading back from Bentonville, Arkansas.   I'm very little at only 5'1" high and had a guy in my face arguing with me because he wanted the aisle seat.   I was assigned the aisle seat, and frankly I'm a little claustrophobic and prefer not being squished next to the window.  Had he simply asked me, I probably would have said no problem, but because of how he handled it I wasn't giving it up (and yes I know 2 wrongs don't make a right). He was about 5'10" and became so enraged yelling in my face that he had the aisle seat, that two large gentlemen proceeded to back me up before the flight attendant could reach our seats.  Normally, I might have been afraid, but the whole point is - that's somewhat typical travel these days....  Must be bad Walmart meetings... 🙂

Regarding Kindle's, Nooks and other e-reader devices....  I have one and use it weekly when I travel because they are small, lightweight and take up very little space in my carry on.   However - what is the point of turning them off?   If your wi-fi is off or disabled, it's no different than reading a book and no less distracting than having an open book in your lap.   While I do comply with the request to turn off for take-off and landing, frankly the rules are FAR behind the times!

Thanks for listening to my venting.    Oh, and the two gentlemen that backed me were football players for the University of Arkansas - VERY large men who could barely fit into the 3 seats they had.  They made comments throughout the flight about bullies and guy's picking on 'little women'.   Under other circumstances it would have been very funny!

MNB user Randy Aszman wrote:

I travel extensively for my company and meet a lot of folks along the way. I have learned that there are nice folks everywhere and there are morons as well. No state, city, or neighborhood has more of these than the others. The issue is exposure. I don’t know the average age group of the MNB readership, but let’s say it’s largely baby boomers. When we were growing up, there were two sources of news: UPI and AP. If they didn’t pick it up and turn it in for the newspapers or TV, you didn’t hear about it. Today, there is Fox, CNN, MSNBC, HLN, etc. not to mention the major networks. If a third world despot passes gas, we hear about it the same day. There has always been incidents of man’s inhumanity to man throughout history. I don’t believe it’s any worse today than it was 100 years ago. In fact, it may be better because you can’t get away with much because the camera or microphone is right there ready to report. Regarding politics, think the atmosphere is poisonous in D.C. right now? Read “April, 1865” and you will discover the vitriol between parties and towards the President is nothing new. There were much worse periods in our history than the present.




I’ve been criticized for taking pot shots at A&P, with some folks saying that I’m being insensitive to all the rank and file folks who work there.

One MNB user wrote:

I think you were unfairly judged as picking on A&P. When a reader replied that you were picking on A&P and hurting the 35,000 employees I feel the contrary. I think your comments should be a red flag to the employees to start looking for other work. A kind of "Who moved my cheese?" scenario.

Maybe I am as quirky as you are - oh, that's a good thing - but I think you are doing a good service by telling people it is a dead company walking. But sadly, employees of A&P in the stores closing will be shocked when their jobs are lost. Hopefully ShopRite will continue to buy the stores and employee the A&P employees as they have been doing in the past. Now that's a story worth pursuing.

But another MNB user wrote:

I have to agree with your viewers comments, and it seems parallel to me to the situation that the auto industry was facing just a few years ago.  I remember the rank and file unions getting bashed for the problems faced by the big three auto makers.  But remember this, other successful companies like Toyota, BMW, and others make vehicles right here in the good ole USA.  So it’s not the workers fault.  In fact they do as they are told and put together cars as they are designed.  As in the auto industry it is management’s lack of vision or restrained innovation that has led both to the demise of the big three and A&P.

Of course, I suppose you could argue that workers who cast their lot with unions that make unreasonable contract demands that help to cripple organizations also have some responsibility when companies fail...

This is not to suggest that management is less culpable, of course.




Finally, got the following email from MNB user Jim Swoboda about yesterday’s Eye-Opener piece about how Rupert Murdoch is planning an all-digital newspaper:

Murdoch may be no fool but neither are we, his customers.

I am an early adopter and have had an iPad since it came out.  Those who are subscribers to the WSJ and other periodicals are thrilled by the idea that we can have our magazines and newspapers available in an electronic format that is easily transportable, easily archived if we desire and contain enhanced content that can be delivered in a device such as the iPad.  But consider the pricing models.  So far, EVERY publisher is simply not getting it.  Consider:

Time Magazine, iPad edition $4.99 per week.  Print edition, $20 a years, 52 issues or, $.38 cents an issue.

Sports Illustrated, iPad edition, $4.99 per week.  Print edition, $39 a year, 56 issues, or, $.70 an issue.

Wall Street Journal, iPad edition, $3.99 per week or $208 per year. Print edition, $197.  On-line, $197

These are just three examples.  But the point is the same across.  Consider the iPad versions are virtual copies of the print editions, how in the world can it be justified to charge MORE for the same content including the ads, which in some cases, annoyingly pop up.  There is significant, if not ginormous savings, in delivering electronically:

Paper
Ink
Trucks/transportation
Warehousing
Damaged magazines
Pick up of unsold copies
Retail Display Allowances

I absolutely know these costs are still there, in the system, until enough critical mass is achieved to drive them down, or eliminate completely.  But would you not think subscriptions should be at a minimum, cost the same as the print versions?  I would switch at that price to help the new reality come into being.  But I will not switch, nor will I subscribe to print for these particular providers until they realize their readers are not that out of touch.

A footnote, the content provider Zinio, has been providing an exact electronic duplicate of magazines to be read on a computer for over 10 years now.  They have an iPad app that allows you to read content you may purchase from them.  They even offer National Geographic and it is about half the print cost.  Now, that's a breath of fresh air.