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    Published on: September 9, 2010

    Now available on iTunes…

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

    During my vacation last week, I decided at the last minute to take my 16-year-old daughter to the USA Tennis Open in Queens, New York. She’s not just a tennis fan but also a very good player ... certainly able to beat me at the drop of a hat, though that’s not setting the bar very high ... and I thought she’d enjoy seeing the pros up close.

    While the tennis we saw was good - despite the fact that the temperatures hovered near 100 degrees, making it almost unbearable to watch any match for very long - I have to say that the US Tennis Association (USTA) is sending mixed messages about its target audience. On the one hand, there are signs all over the Billie Jean King Tennis Center about how much time and money is being spent bringing tennis to kids who otherwise might have no experience with the game. And that’s a good thing.

    But that sort of conflicted with the first message you get at the Tennis Center when you park your car - $19 for the day. Which seems like a lot ... even more than they charge at adjacent Citi Field for a Mets game. (Though at this point, the Mets may have to start paying people just to go to their games.) Except that at the Tennis Center, there was an exception - because Mercedes Benz is a sponsor, anybody driving a Mercedes got to park for free.

    Now, I think it is nice that Mercedes owners get that kind of benefit, and that Mercedes Benz extends that kind of brand equity to its customers. But I cannot help but think that it sends the wrong message about the sport. At a time when there is increasing competition for kids time - from other sports ranging from basketball to soccer, and from such diversions as video games and mobile phones - this creates the perception that tennis is really just a sport for rich people. Tickets are expensive, the food and beverage options inside the Tennis Center are generally very high priced if not prohibitive, and you only get a break on parking if you are someone who, quite frankly, probably doesn’t need a break on parking.

    Now, I realize that I am painting with a somewhat broad brush here. It can be argued, with a certain degree of legitimacy, that the high prices actually allow the USTA to donate money to tennis camps and lessons for poor kids. That’s fair enough, but I’m not sure it addresses the central issue, which is making tennis a sustainable sport and business model over the long term. I have the same concerns about baseball - that the financial model is such that only rich people and corporations can afford to go to games, and eventually the sport could die because it will become too remote from the everyday fan.

    (By the way, “Star Trek: Deep Space Nine” used to prognosticate that baseball died as a popular spectator sport in the year 2042, because of a precipitous decline in interest. I don’t know if that means anything, but it is the kind of useless trivia that rattles around in my noggin, and that I like to share whenever I get the opportunity.)

    Football is a different story, but in the New York metropolitan area we’re beginning to see some evidence that high prices can alienate even the most devoted fans. The New York Giants and Jets have built a new stadium, but are charging even longtime season ticket holders “personal seat licenses” - essentially entry fees that allow people the privilege of buying season tickets. I don’t know what the long-term impact will be, but the short-term impact is that one can hear frequent commercials on the radio for Jets season tickets at reduced prices...which would have been unheard of in the past. To me, that’s a warning sign.

    So what does this have to do with more traditional businesses?

    Simply this. I think it is entirely reasonable to look around at stores and offices, and marketing and merchandising efforts, at consumer-oriented programs and employee-related programs, and ask oneself: Are we being consistent? Are we presenting an offering that is in synch with our image, and vice-versa? Are all our efforts focused on establishing and maintaining sustainable brand equity?

    And finally, are our short-term decisions consistent with our long-term goals?

    In fact, it is not just reasonable to ask such questions, but absolutely necessary.

    Otherwise, the advantage could go to the competition, and we may find ourselves, from the customers’ point of view, out of bounds.

    For MNB Radio, I’m Kevin Coupe.
    KC's View:

    Published on: September 9, 2010

    Stewart Parnell, the former president of the Peanut Corp. of America who ran the company when it apparently shipped product that had tested positive for salmonella contamination, is back in the business, working as a consultant to other peanut companies, it was reported yesterday by the Associated Press.

    While the company is bankrupt and there have been numerous reports that Parnell both authorized the shipment of contaminated product and did not invest in basic food safety infrastructure that would have prevented such problems, Parnell has not been charged with any crime and the investigation against him has “languished,” according to AP.

    Yesterday’s story notes that Parnell is frustrated by the delays, and that the families of nine people who died from the salmonella outbreak would like to see him in jail.

    Parnell tells AP that he is not making any money from his consulting work.
    KC's View:
    To be perfectly honest, my thinking on this story has gone about 180 degrees since I first saw it come over the wires yesterday.

    My first reaction was outrage that this guy - who from all accounts, put the bottom line before basic food safety tents, resulting in the deaths of nine people and the sickening of hundreds more - is back in the business. I’ve said for a long time that Stewart Parnell’s picture ought to be posted in the break room of every food company in America, reminding people of what can happen when negligence and greed exceed common sense and vigilance. And I still feel that way.

    But I’m just as outraged - at least for the moment - by the notion that it takes either the Justice Department or the Food and Drug Administration (FDA) so long to resolve this investigation. Hard to imagine what is taking so long.

    That said ... I suppose that if there were any evidence of real sorrow or regret from Parnell, it could be argued that he’s the perfect person to advise people about what not to do when it comes to food safety. Remember “Catch Me If You Can”? Master forger and con man Frank Abagnale Jr. was precisely the right person to help the FBI track down forgers. Remember “To Catch A Thief” and “It Takes A Thief” and, most recently, “White Collar”? The examples hold.

    But Parnell has be called to account for his actions and inactions. There has to be a resolution to his case. It has to be public, it has to be significant, and it has to send chills down the spines of anyone else with responsibility for safe food.

    Published on: September 9, 2010

    The Great Atlantic & Pacific Tea Co. (A&P) announced yesterday that it will sell seven of its Connecticut stores to Big Y, which it says is part of its broader “comprehensive turnaround strategy.

    “We continue to evaluate our operating footprint and its alignment with our turnaround strategy. These seven stores were clearly outside of our core markets and their sale was necessary,” stated Sam Martin, President & CEO, A&P.

    The move comes less than a month after A&P announced that it was closing 25 unproductive stores in an effort to reduce its losses, which have been mounting a series of successive quarters. The company also has had three CEOs in less than a year, firing the last one after just eight months on the job. Since being hired, Martin, the former Whole Foods COO, has been overhauling much of the company’s executive suite. And, there has been rampant speculation that A&P could sell all of its Food Emporium stores in order to improve its balance sheet.

    “The company faces many difficult decisions over the next several months which are required to strengthen our foundation and improve our performance going forward,” says Martin.
    KC's View:
    Death by a thousand cuts.

    Published on: September 9, 2010

    If you want to understand how the lack of transparency affects consumers, go shopping for a sewing machine. Trust me, you won’t enjoy it.

    Obviously, sewing machines aren’t the hottest selling item in the US these days, but they still exist and my wife, an avid quilter, finally decided to get a new machine. She soon regretted that decision. Buying a sewing machine will remind you of the way so many products (cars, houses, etc) were sold in the days before any sense of transparency and clear pricing.

    Although sewing machines are sold on line and in department stores, the best varieties are sold in fabric stores. Once in these stores the array of machines and the technology they employ is simply incredible, but you won’t find a price tag or a simple list of attributes in sight. So the customer has to wait for an employee to come over and then, almost by magic, quote a price out of the air. As my wife moved through this experience I watched her emotions range from disbelief and mistrust to frustration and anger. Simply put, she stopped believing anything she heard.

    In the process, this arcane system turned a purchase that started with excitement into an excruciating war of attrition. She turned to long searches on the internet for prices from around the world to get a sense of what was and wasn’t a good deal and read countless comments from other shoppers complaining about the very same thing. And every comment offered the same warning: don’t believe the price. It reminded me of the buyer’s remorse we used to experience when buying a car with no knowledge of the right price.

    The good news is that at last she found a highly informed salesperson who walked her through options and features and got her excited again. But the bad news is the salesmanship we saw for most of this journey would never do anything to get anyone excited about sewing…which isn’t exactly a booming area these days.

    Transparency builds trust. The lack of it, builds nothing but problems. Keep that in mind always.

    That’s my Thursday Eye-Opener.

    - Michael Sansolo
    KC's View:

    Published on: September 9, 2010

    Advertising Age reports that PepsiCo has decided to expand its Pepsi Refresh project beyond the experimental stage in the US, and will also fund versions in Europe, Latin America and Asia.

    The project, a social media experiment that Pepsi decided to fund instead of advertising on the Super Bow, funds a variety of causes - or, as it says on its website, “people, businesses, and non-profits with ideas that will have a positive impact. Look around your community and think about how you want to change it.” People then are allowed to vote for their various ideas, which then get funding.
    KC's View:
    To this point, reports are that Pepsi’s market share has not changed to any perceptible degree...but the company clearly thinks it is onto something, since more than 45 million votes have been tallied to date, with the numbers increasing each month.

    Published on: September 9, 2010

    • Interesting story in Crain’s Chicago Business about the decision by Mayor Richard Daley not to run for re-election ... and the impact it could have on Walmart’s plans to rapidly expand its presence in the Windy City.

    “The mayor supported the discount retailer's push into the city even before he vetoed the so-called big box ordinance four years ago,” Crain’s writes. “His impending exit, along with the arrival of Jorge Ramirez, the new president of the Chicago Federation of Labor, could signal a new chapter in Wal-Mart Stores Inc.'s Chicago story.

    “Without Mr. Daley's deep-rooted alliances and power, many onlookers say, Wal-Mart never would have broken through a six-year stalemate to begin building two new stores on the city's South Side.”

    “We appreciate Mayor Daley's support of our efforts to deliver long-term solutions that benefit Chicago and its residents,” Steve Restivo, Wal-Mart's director of community affairs, tells Crain’s. “The mayor has not only led the charge in helping underserved communities gain access to quality jobs and affordable food, but his actions also serve as an example for other cities across the country that face similar challenges.”

    Crain’s suggests that Walmart’s future in the city may depend on how much Daley’s successor needs the unions to a) get elected, and b) govern effectively ... and to what extent other constituencies manage to outmaneuver and outweigh organized labor.
    KC's View:
    Wonder if Rahm Emanuel has ever been to Bentonville? I’m guessing yes, since he was such a player in the Clinton administration. And since Emanuel also has expressed antipathy to unions - especially the United Auto Workers - Walmart may have a friend if he a) runs and b) gets elected.

    Published on: September 9, 2010

    Whole Foods announced yesterday that it has fully “implemented new responsible packaging guidelines for all of its more than 2,100 body care and supplement suppliers companywide and, to spearhead the change, has switched to post-consumer recycled(PCR) content bottles for several of its store-brand supplements and body care products.”

    The effort to establish new guidelines began in 2009 and became a requirement a year ago.

    "We're thrilled by how responsive our vendors have been in making changes to provide even more green options for our customers," said Jeremiah McElwee, global Whole Body coordinator for Whole Foods Market, in a prepared statement. "More exciting still is that through the development process, Whole Foods Market has created a forum for vendors to share best practices, helping the whole industry move forward with our environment top of mind."
    KC's View:

    Published on: September 9, 2010

    Business Insider has an interesting report about a company called Village Vines, which has come up with a new way to get people into restaurants.

    According to the story, the startup has created a website that allows members to access a daily list of high end restaurants that have reservation openings. If you sign up for a table, you pay a $10 fee ... but you also get a 30 percent discount on your total bill, including liquor.

    Not only is the service good for patrons, but also for restaurants. One New York City Thai restaurant tells Business Insider that it expects to see a half-million dollars in revenue generated by Village Vines users.

    To be sure, it is early in the process. Village Vines only has been in business a few months, and expects to generate only $250,000 in revenue in 2010. But it has 400,000 registered users already, an is expanding from New York to Washington, DC, Los Angeles, Chicago and San Francisco.
    KC's View:
    It is sort of the Priceline model, finding a market for a highly perishable product - empty restaurant tables. in fact, it is sort of surprising that Priceline hasn’t gone after this business yet. (Maybe the Village Vines founders are hoping they’ll get bought out...)

    Interesting idea. I look forward to trying it.

    Published on: September 9, 2010

    7-Eleven is the company that is looking to outbid Alimentation Couche-Tard for casey’s General Stores, offering $2 billion or $40 per share for the company’s 1,500 stores in the Midwest.

    Casey’s has been fighting the Couche-Tard offer, which started at $36 per share, saying that it under-valued the company. The New York Times reports that Casey’s management is talking to 7-Eleven about a possible friendly deal between the two companies - though Casey’s says that $40 per share still is on the low side.
    KC's View:

    Published on: September 9, 2010

    • The BBC reports that William Morrison Supermarkets plan to test an online shopping model next year, in addition to testing as convenience store concept.
    KC's View:
    The MNB position is simple. If you are not playing in the online space, testing ideas and innovations and trying to figure out how to integrate internet shopping into your broader business, then you run the risk of irrelevance.

    Published on: September 9, 2010

    • Tops Friendly Markets yesterday celebrated the official grand-re-opening under the Tops brand banner of 20 former P&C stores that it acquired earlier this year.

    According to the announcement, “Ceremonies featured the announcement of capital improvements planned for each store as part of an overall two-year $90 million company wide capital investment program, as well as donations made on behalf of Tops to various local charities through the company’s ‘Living Here. Giving Here’ community partnership program.”

    • Tesco’s US division, Fresh & Easy Neighborhood Markets, announced yesterday that it has “opened the first grocery store in Southern California to use naturally occurring carbon dioxide (CO2) refrigeration. The store, located in Rosemead, is Fresh & Easy’s first to be GreenChill certified and is among four stores that the company opened today, including the 100th in California.

    “Fresh & Easy’s sub critical cascade CO2 refrigeration system, which is one of only four in the United States, reduces the impact of the store’s refrigeration on the ozone layer by about 70%, as compared to industry standards. By utilizing a natural refrigerant, the system has an approximately 50% lower Global Warming Potential than traditional refrigerants. The store also earned a silver certification award from the U.S. Environmental Protection Agency’s (EPA) GreenChill Partnership.”

    • Homeland Stores, which operates 72 stores in Oklahoma, and one in Kansas, said yesterday that it will adopt the Guiding Stars nutritional labeling system that was created by Delhaize-owned Hannaford Bros. The system uses a a proprietary algorithm to evaluate virtually every item in the supermarket, assigning one, two or three stars to products that qualify as good, better and best for you.

    • The Seattle Times reports that Starbucks has eliminated the 12-ounce “tall” drink since from its drive-in menus, leaving just its 16-ounce “grande” and 20-ounce “venti” sizes.

    The company said that the move was made to de-clutter the drive-in menus, which it said some customers said were difficult to read and order from.

    Still not getting any sort of national exposure is what Starbucks calls its “trenta,” which is 32 ounces but is old sold in Phoenix and Tampa.

    • The Wall Street Journal reports that “taking advantage of vacant mall space, Toys R Us is opening 600 temporary shops - or ‘pop-up stores’ - this fall, a move that doubles the number of its U.S. stores for the crucial holiday season. The toy retailer is super-sizing a bet it made last year when it opened 90 temporary mall-based Toys ‘R’ Us Express stores during the holidays, many in spaces previously occupied by KB Toys.”
    KC's View:

    Published on: September 9, 2010

    • Walmart said yesterday that its senior vice president for sustainability, Matt Kistler, will move over to become senior vice president for marketing, reporting to CMO Stephen Quinn, and being responsible for local marketing initiatives.

    Kistler will be succeeded by Andrea Thomas, who has been senior vice president for private brands.
    KC's View:

    Published on: September 9, 2010

    Responding to Michael Sansolo’s column yesterday about business lessons to be learned on the fields of Gettysburg, MNB user Tim Heyman wrote:

    When my oldest son was cub scout age, the troop took a guided tour of Gettysburg.  It was the first time that I had done that at Gettysburg and I was consumed by the information that the tour guide provided.  Being there and hearing was so much different than any classroom teachings.  I enjoyed the information so much that a few years later took another guided tour, and the History Channel has several series that also consumed me.  Hearing about how things were done, prior to, during and after the battles in only a couple of hours, I wondered why at school age when we spent days on the Civil War, didn’t we learn it then.

    MNB user Gary Harris wrote:

    Coincidentally, we had an opportunity to visit Antietam this weekend with a group comprised of the US Air Force Thunderbirds and the US Air Force A-10 East Demonstration Team (where my son, Matt, is the Team Leader) after an air show in Martinsburg, WV.

    As you learned at Gettysburg, knowledge of the terrain, application of resources, and leadership all had a part in determining the outcome. As the first battle that could be claimed as a victory by the Union, it ennobled Abraham Lincoln to draft the Emancipation Proclamation while sentiment for the Union cause was on the rise. As the bloodiest single day in American military history, the Battle of Antietam stands in stark contrast to the systems, equipment, and tactics used by the military personnel I accompanied on the tour. Another example of how causes and principles can endure even when the supporting methods have changed.





    Regarding the likelihood that the Los Angeles City Council could make permanent a virtual ban on the opening of fast food restaurants in South LA, a poor neighborhood with high obesity rates, MNB user Dan Jones wrote:

    The city council is making a ridiculous mistake with this moratorium.

    The part of the city is economically disadvantaged, and unemployment for young teens in this area is over 25%.  That fact that the council is rejecting businesses that want to move into this area is appalling.  And to deny the young citizens of this area a good opportunity to get entry level jobs is beyond the pale.





    On the subject of Amazon’s ongoing efforts to promote and popularize “frustration-free packaging,” MNB user Jeff Folloder wrote:

    Plastic clam-shell packaging... is an abomination and an affront to all consumers in a variety of unspeakable ways.  It may even be a clandestine plot that allows the CPG industry to prop up health care through a never ending cycle of lacerations and puncture wounds...




    And, following up on the discussion of generational touchstones, MNB user John Rand wrote:

    OK, so some things are history and some things are not, Some things are lost between cultures, and between generations, and some things are not.

    Why do some things survive and others not? Why do some things translate well and others not?

    There is a long  and honorable tradition involved in this. It is called story telling. On your best days, you do this for a living. So do I, in my own humble way.

    The good stories survive and remain relevant because someone tells them, and tell them well, adapting them to each new audience and frame of reference.

    Some are cultural stories – the Lone Ranger may not have found a permanent home, but certainly his grandson Batman did.

    Some are business stores. The long decline and fall of A&P, back in the news again, is a retreat that rivals the decline of the Roman Empire for breadth and is beginning to seem like it is taking almost as long.  There are lessons here, and the story is worth telling. Both of them, as it happens.

    I spent almost as much time telling my kids stories as anything I did with them. The common language and basis for understanding created by a good story is well worth the time. The best stores have lived for thousands of years. I do the same with the talented young people who work with me – I tell them stories. Some are more pertinent than others, and I am sure some are forgotten as soon as I show mercy and stop talking. But just as many bring moments of pause, and reflection, and occasionally a new idea or a new understanding results for both of us.

    When my younger son wanted to go to a business school, we made sure it was one which also offered a liberal arts education, broad rather than narrowly focused. His education included all sorts of things, from anthropology to theater, from sweat lodges in Montana to mapping data. He majored in IT and data management, an easy field to be a narrow expert. In his senior year he took a Sociology course. I asked him why he chose that. His reply was a story all its own:  “Someday I will need to talk to people in marketing”. I couldn’t imagine a better answer.

    Tell the stories. Some young people won’t like every story, but we still have to tell them. Adapt them, refresh them, adjust them – sure. But the stories teach, and telling them is a way to learn, as well.


    One small correction.

    Depending on the telling, the Lone Ranger’s great-grandson or great-nephew was Brit Reid, who was the Green Hornet. Not Bruce Wayne, who was Batman.
    KC's View: