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    Published on: September 14, 2010

    by Michael Sansolo

    Longtime MNB readers know I rarely like to draw lessons from the political scene for two reasons. First, politics are so polarizing that too many of us will not listen to anything we disagree with; and second, the state of politics is so vapid that it’s hard to imagine there could be a lesson it in anywhere.

    Yet last week I saw an example on the latter point that presents so many parallels for business that it can’t be ignored. Just please forget for a second your political leanings and simply try to consider the point.

    It came last Wednesday during an interview on the routinely brilliant “Daily Show with Jon Stewart.” Stewart, who skewers all sides of the political and media spectrum, admits to liberal leanings, but his guest that evening, Democratic Party Chairman Tim Kaine, probably felt otherwise. As Kaine tried to outline what he sees as the successes of the last two years in government, Stewart asked a couple of pointed and sardonic questions.

    • What is it about (your) message that is not getting through to humans?

    • Can you understand how people don’t understand what (these policies) have done for them?

    • Did you see how halfway (through that answer) I stopped paying attention?

    Yet Kaine seemed incredibly clueless, explaining again and again how the voters will eventually decide that the Democrats are the better choice to govern. Stewart countered that a campaign slogan of “they (Republicans) suck worse” probably won’t succeed. (By the way, if you have never seen “The Daily Show” be forewarned that while it is both intelligent and insightful, it frequently reaches for juvenile gags and locker room language.)

    Put your politics aside for a second and consider what Kaine was saying. Essentially it’s this: “we have a great product but the customers don’t understand it yet.” Now think about your own business and ask if that’s ever happened to you or is even happening today. If you’re honest, you’ll probably find a parallel. I have heard too many discussions through the years of stores, formats, products, categories and more that should have been huge success if only customers would understand them.

    I actually found myself there too. I remember a discussion we had in my tenure at FMI, when our non-foods event was losing traction. Internally we were incredulous because we were convinced we had a great product in every way. We knew the event would succeed if only our customers would give it a try. One of our board members reminded us that no matter what you think internally, at the end of the day the customer decides. And while you may think they made the wrong choice, the customer makes a decision and that’s the product that wins.

    The bottom line is that seemingly illogical decisions get made all the time. American consumers talk about eating healthier and then do the opposite. Surveys find them wanting to eat home more often for reasons ranging from budget to health to family, yet they still end up eating out. Illogical yes; but they are entitled because they are the customer.

    We have to remember that in the battle between intellectual and emotional arguments, them latter wins nearly every time. We have to remember that thinking we are right or thinking we’re doing the right thing doesn’t matter unless our customers get it and respond. Most importantly, we have to stop our internal group-think and actively seek outside voices who might be willing to tell us we are wrong.

    So every so often consider Stewart’s questions as to whether actual humans would get your message or whether your customers really understand the benefits you claim? Answer honestly. It may help.

    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: September 14, 2010

    Every once in a while, I go off on a rant about the inevitability of online grocery shopping and how the next generation is likely to embrace it since, after all, that’s how they buy everything else. When that happens, someone will send me a note reminding me that effective online shopping depends on broadband internet access, and that there are still places in this country that don;t even have cable television, much less high speed internet.

    The feeling here has been that even these places will catch up...but now comes a Chicago Tribune story suggesting that this could happen fairly soon:

    “American consumers, in as little as one year, could be seeing a new kind of ‘super Wi-Fi’ that can penetrate walls and cover large areas, enabling developments from rural broadband networks to smart homes where gadgets and appliances are wirelessly linked.

    “This is the technological future envisioned by the Federal Communications Commission, which will vote this month on the use of ‘white spaces,’ or prime spectrum that regulators want to open for supercharged mobile broadband applications ... The FCC uses the term ‘super Wi-Fi’ because the airwaves can pierce walls and cover much larger areas than traditional Wi-Fi, providing for a more reliable connection and fewer dead zones.”

    Julius Genachowski, chairman of the FCC, puts the issue of internet access in context: “It's the information grid that's as important in the 21st century as the electric grid was in the 20th century.”

    Think about that. In 21st century America, broadband internet access is seen as being as essential as electricity. Not a luxury. Not a nice-to-have. Not an indulgence. But essential.

    In other words ... not only will technology shortly be catching up with previously under-served families and communities, but it sounds like 21st century realities will shortly be catching up with companies that hoped, or prayed, it would not.

    And that’s my Tuesday Eye-Opener.

    - Kevin Coupe
    KC's View:

    Published on: September 14, 2010

    In an email to associates, Steve Jungmann, Supervalu’s executive vice president of merchandising, has announced a reorganization of the company’s Enterprise Merchandising organization that will result in the elimination of 61 Business Development Manager jobs.

    In the email, Jungmann wrote: “As we drive forward to meet our goals, it is essential Enterprise Merchandising is able to move more quickly to effectively meet business needs. After a careful evaluation of our business strategy, needs and organizational structure, we have identified several opportunities to simplify our business, clearly define roles and responsibilities and drive more clear accountability across our Enterprise Merchandising teams. By addressing these opportunities, we are able to gain critical efficiencies while increasing associate autonomy, better defining career pathing and reducing costs.”

    Jungmann went on: “A layer of management across the Center Store, Fresh, Health & Wellness and Merchandising Strategic Initiatives teams will be eliminated. This elimination includes all the Business Development Manager (BDM) roles. Originally the BDM role was created to be the touchpoint between corporate and banners – to be strategic drivers of category plans and sales. Over the past couple of years, we have found this role has become one of execution versus strategy as originally intended. By eliminating this layer, we are able to speed decision-making within our Merchandising team ... To assume the responsibilities formerly held by the Enterprise BDMs, we are adding Category Director (level I and II) positions, and additional Business Support Managers (BSMs) and Business Support Specialists (BSSs). Current Merchandising Directors will take on the new Category Director title ... This change will help us streamline work flow, increasing efficiencies in decision-making and speed-to-market; improve communication to our banner teams and vendor partners; and ensure accountability for category financial metrics with one point of responsibility.”
    KC's View:
    The question that already is being asked inside Supervalu headquarters is whether, to mix the metaphors a bit, Supervalu is trying to reinvent the wheel by changing titles and roles, which may help the symptoms, but won’t cure the disease.

    Which means that in addition to managing the reorganization, Supervalu also has to manage expectations and attitudes. Which may be the harder part.

    Published on: September 14, 2010

    • Peapod, the Ahold-owned internet grocery company, announced that it has launched a new smartphone application that runs on the Apple iPhone and iPod Touch, as well as the Palm Pre and Google Android phones. According to the company, consumers using the application can review previous purchases, create shopping lists, and look up nutrition information.
    KC's View:
    This is a space that all retailers need to be in. Good for Peapod.

    Published on: September 14, 2010

    • The Wall Street Journal reports that Walmart plans to offer a private brand cellphone plan using the T-Mobile network, offering “a range of low-priced cellphones without a lengthy contract for a flat monthly fee ... Consumers will be charged $45 at the end of each month for unlimited calling and texting. Each additional phone line is $25 a month. Data will be sold in buckets rather than monthly. The first 100 megabytes are free, and more can be bought at a cost of $10 for 200 megabytes, $25 for 500 megabytes or $40 for 1,000 megabytes.”
    KC's View:

    Published on: September 14, 2010

    USA Today reports that Whole Foods has launched “a new color-coded rating program - with the help of  Monterey Bay Aquarium and Blue Ocean Institute - that measures the environmental impact of its wild-caught seafood ... Similar to a stoplight, seafood is given a green, yellow or red rating. A green rating indicates the species is relatively abundant and is caught in environmentally friendly ways. Yellow means some concerns exist with the species' status or the methods by which it was caught. And a red rating means the species is suffering from overfishing or the methods used to catch it harm other marine life or habitats.”

    The story notes that Whole Foods is “the first national retailer to display such ratings.”
    KC's View:
    Is it just me, or is there something mildly inconsistent about Whole Foods even selling seafood marked with a red light? Maybe there’s a good argument for it - like the customer wants it - but that seems somewhat out of synch with the broader message and reason for having the lights to begin with.

    Next thing you know, they’ll be selling Komodo Dragons in the meat department...

    Though, to be fair, Whole Foods Market does say that it “previously stopped selling especially vulnerable red-rated species such as non-MSC-certified Chilean sea bass, orange roughy, bluefin tuna, sharks, and marlins (with the exception of Hawaii-caught blue marlin, sold in Hawaii stores)” and that “all swordfish and tuna from red-rated fisheries will be eliminated from seafood counters by Earth Day 2011. By Earth Day 2012, all other seafood from red-rated fisheries will be discontinued with the exception of Atlantic cod and sole, which will be sold through Earth Day 2013.

    But I just think seeing red-flagged seafood in the case might be a little jarring.

    Published on: September 14, 2010

    • Tesco’s US division, Fresh & Easy Neighborhood Markets, announced that it is bringing back its reusable bag giveaway, which will run through the end of the month for customers who spend $20 or more and use a coupon for a free back that can be found on its Facebook page. The company noted that since opening its first store in November 2007, Fresh & Easy has given away over 600,000 reusable bags at various store openings, events and through giveaways.

    Fresh & Easy said that it also has added signage in stores reminding customers to use their bags, merchandised reusable bags closer to checkouts and given away magnets to customers, reminding them to not forget their reusable bags at home. To ensure reusable bags are available to all customers, Fresh & Easy offers several different bag options, including a large organic bag for $2.99, a bottle bag for $1.99 and a logo canvas bag for 99 cents.
    KC's View:

    Published on: September 14, 2010

    Half (49%) of shoppers across four European countries expect to be buying more food and grocery products with ethical credentials in the future, according to new consumer research published by international food and grocery analysts IGD.
     
    Top of the list of ethical issues that interest shoppers is food from their local area, with a third (35%) saying that they will buy more in the future. Then came Fairtrade (24%) and animal welfare (also 24%), and finally organic with a fifth (21%) of shoppers supportive.

    Interest in ethical shopping is varied among the four countries surveyed. For example, British and German shoppers expect to be buying more local and regional food in the future, while organic is increasingly popular in France and Spain.
    KC's View:
    To be clear, the survey only looked at what some would refer to as the “old Europe” - the UK, France, Germany and Spain. And it is interesting that in most categories, the French and British were more interested in ethical shopping issues than the Spanish (though the British are far less interesting in organics than their EU compatriots).

    Published on: September 14, 2010

    Interesting piece in the Des Moines Register that provides some analysis and perspective on the battle between c-store giants 7-Eleven and Alimentation Couche-Tard to acquire Casey’s General Stores.

    The piece suggests that 7-Eleven is a better fit for Casey’s for two reasons:

    • “Casey's was an early adopter of in-store food sales and has perfected hot-food sales, which is something 7-Eleven has recently begun pushing in its stores.”

    • “Casey's has its own warehouse and self-distribution of food and other products, which boosts profits by cutting down on middleman costs. The 7-Eleven chain has begun introducing self-distribution to some of its California stores and could probably learn from Casey's successful operation.”

    7-Eleven has submitted a $2 billion bid to acquire Casey’s General Stores’ 1,531 stores in the midwest. The $40 per share bid trumps a $38.50 bid by Canada’s Couche-Tard, which has been rejected by the Casey’s board. Casey’s has said to this point that both offers undervalue the company, and that its analysts believe that the company should fetch $45 per share.
    KC's View:

    Published on: September 14, 2010

    • In Minnesota, the Star Tribune reports that “a Supervalu-owned grocery chain and two of its former executives have been indicted for bribing a prominent Maryland state senator, who himself was charged with accepting $245,000 in bribes.” However, Supervalu has resolved its part in the case by paying a $2.5 million fine so it could “put this matter behind us and focus on our current business initiatives.”

    “Shoppers Food & Pharmacy, its former president William J. White and former real estate vice president R. Kevin Small allegedly bribed Ulysses Currie between 2002 and 2008, according to criminal complaints filed in U.S. District Court in Baltimore.

    “White told executives at Eden Prairie-based Supervalu that Shoppers Food had hired Currie as a consultant for community relations, public affairs and minority recruitment and outreach efforts. But Currie was actually being paid to repeatedly use his official position in ways to benefit Shoppers Food, White and Small, according to the complaint.”

    • The New York Observer confirms a story that was reported on MNB last February - that Fairway Markets, recently on a fast growth pace with a new store in Pelham, NY, and one scheduled to open soon in Stamford, CT, “will open its first location east of Central Park,” having signed a deal to take over a 45,000-square foot space on East 86th Street between Second and Third Avenues.

    The store is scheduled to open in Fall 2011.

    • Hannaford Bros. has announced on its website that Linda Greenlaw - who is the nation’s only female swordfishing captain, an author, and a prominent character in the book and film versions of , will be providing her entire catch this year to Hannaford’s stores.

    “I applaud Hannaford in supporting local fishermen, processors and the working waterfront," says Greenlaw, “you know it's going to be fresh… I know that Hannaford is going to have great quality sustainably harvested fish. I shop Hannaford… Knowing I'm involved in a sustainable fishery is rewarding, it's satisfying and something I'm really proud of."
    KC's View:

    Published on: September 14, 2010

    Responding to our story yesterday about the study saying that Americans still are not eating enough fresh fruits and vegetables, one MNB user wrote:

    The last line in the article says it all. Has anyone gone out and looked at the price of fruits and vegetables? My wife buys them all the time for her and my 3 boys, but I always get in a word about the financial aspect. I complain constantly about the prices. Think about the lower socio-economic people that are just trying to make their rent and feed their children. They are buying the most inexpensive foods they can to fill their child’s belly. Do you really believe they are looking at the nutritional aspect? If you want to fix this make the products that are healthy COST LESS!!!! It is a simple solution.

    I like the idea of providing tax credits and other financial benefits to companies that sell fresh produce, as a way of encouraging promotions and reducing costs. Of course, some folks might suggest that this is an unnecessary government intrusion.




    And, on another subject, from an MNB user, a comment on Invasion of the Body Snatchers, which we talked about here yesterday in our obituary for actor Kevin McCarthy:

    This was one of the first scary movies I ever saw (it was on TV and I must have been unsupervised at the time!). I checked under the bed for a long, long time after I saw it, checking for pods.

    The other too-scary movie for me to see so young was Alfred Hitchcock’s The Birds ... I remember my sister and I put her favorite stuffed animal in a shoebox under the bed (hah! Just realized this is another “under the bed” reference) so the birds couldn’t get him.  I know my parents weren’t home at the time, so a babysitter must have let us watch it.

    The things we recall from when we were small…any Lessons from the Movies here?!!!


    Of course.

    Invasion of the Body Snatchers is essentially a movie about group-think. In the fifties, that could be seen within the context of McCarthyism. Today, it can be seen as a cautionary tale that could be applied to a lot of things in both the public and private sector. We live in a world that is so polarized that group-think becomes the norm at either end of the spectrum ... we live in a world where narcissism has become commonplace, which means that people don’t look beyond themselves ... and we live in a world where the tactical often is more important than the strategic, because the tactical often offers immediate gratification.

    As for the “lessons learned in childhood” question...I think there is a positive spin that can come out of this. For many if not most people, childhood memories can be a comforting thing, and companies that can tap into them often can find success there.

    I always remember the late night flight I took years ago, filled with grumpy business people who had been delayed for hours. Once we were in the air, the cabin was filled with the aroma of fresh-basked chocolate chip cookies, and the flight attendants were soon in the aisles, passing them out with glasses of milk. (This was before airlines stopped serving any sort of food.) It turned the passengers into happy nine-year-old kids...an image that has stuck with me.

    It all had to do with childhood connections.
    KC's View:

    Published on: September 14, 2010

    • Rafael Nadal won the men's singles final at the rain-delayed United States Tennis Open on Monday night, defeating Novak Djokovic of Serbia, 6-4, 5-7, 6-4, 6-2. It was his third Grand Slam title in a row, following wins at the French Open and Wimbledon this year. And, the win completes a career Grand Slam for Nadal, only the seventh man to achieve that goal.




    • And, in National Football League Monday night action, there was an opening week doubleheader:

    Baltimore 10
    NY Jets 9

    San Diego 14
    Kansas City 21
    KC's View:
    The Jets’ loss last night proves something very important. It is more important to walk the walk than talk the talk.

    As a Jets fan, I hated the idea that they did HBO’s “Hard Knocks,” even though the show was immensely entertaining. I wish they’d just shut up and play football.