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    Published on: October 13, 2010

    The Chicago Tribune reports that the Potbelly Sandwich Works chain, as it begins the process of franchising, has established an “unorthodox” approach to finding qualified partners to invest in its business.

    “Company press releases say that its ideal franchisee candidates are ‘qualified married couples and life-partners who are sincere about integrating Potbelly into the fabric of their communities’,” the Tribune reports. “Potbelly, which also expects applicants to have had proven success in business, says it likes franchisees to have deep, preferably lifelong, roots, in a given area. Having children, or the intention of having children, is a bonus.”

    Here’s the kicker: “Past restaurant experience is preferred but not required.”

    The company stresses that it is not biased against single people, and it will not discriminate against people who do not fit its set of “druthers.” But the company’s preferences are clear - apparently with good reason.

    The theory is that you can teach people how to operate a restaurant, or how to make a sandwich, or how to live up to food safety standards. But you can’t really teach people how to be connected to the fabric of their community, or why this is important. And community connections, Potbelly has found, are critical to a restaurant’s success.

    That’s an interesting object lesson for other retailers in other venues. Sometimes, people pay too much attention to financial and logistics issues, both of which are important. But not enough attention is paid to the notion of community, and how being integral to a community, serving it and nurturing it, can help make a business successful.

    Now, Potbelly’s approach, after years of franchising, could be found to be flawed. But it is an approach worth taking note of, because it teaches an important and eye-opening lesson for this Wednesday morning.

    - Kevin Coupe
    KC's View:

    Published on: October 13, 2010

    Okay, we don’t usually do two Eye-Openers in a day ... but what’s the point of having my own website if I can’t break the rules occasionally...

    There was a wonderful story in the Washington Post the other day that was a kind of obituary, but really much more than that. And its theme actually plays into the Potbelly Sandwich Works story, above.

    The piece was about a fellow named Carlos Guardado. Here’s how the Post framed the story:

    “For almost 20 years, he was there, a little guy in a metal cart, selling rice-and-bean burritos at 17th and K streets NW on Farragut Square. He was there in all weather, during uptimes and downturns, a dependable rock in the rapids of life in downtown Washington.

    “Until suddenly, this week, he wasn't, and a busy neighborhood paused to realize that it was a pretty big man who had been doing that little job.

    “Tuesday, when the hungry emerged from their marble lobbies, in place of Guardado's cart they found a hand-drawn sign posted by his brother-in-law announcing that the burrito man had suffered a heart attack and died a few days earlier. He was 48.

    “A man in a tailored suit read the words, touched his open mouth and lowered his head into his hand. Two women hugged, one crying openly. They came to the cart at least once a week, the other said, usually together ... All day, they came, lawyers and interns, lobbyists and vagrants, working folks who had made Guardado a part of their routine, suddenly realizing that the burrito guy had found his way into their hearts.”

    It was a remarkable piece about a remarkable guy who came to this country as an illegal alien in 1981, who worked hard and long and eventually became a citizen, who turned a simple metal cart into a thriving business that bought his family a house and sent his daughter to the University of Maryland.

    According to the story, “He kept people coming back by recalling not only their food preferences, but also the names of their children and standings of their sports teams. Workers who had been transferred away would come find him on their visits back ... If he looked lonely, an isolated figure in a steamy cart, customers soon learned that his life was full. The soccer prowess of his children, along with their academic achievements, were known to hundreds of diners.”

    The eye-opening lesson: great retailing, whether it be in a big box store or a corner burrito cart, has to do with making connections.

    - Kevin Coupe
    KC's View:

    Published on: October 13, 2010

    Bloomberg’s Matthew Boyle suggests in a new story that the Walmart turnaround isn’t exactly going as planned:

    “Wal-Mart Stores Inc. may fail to turn its sales around by the holiday season as executives have forecast since the discount retailer has yet to lure customers back to stores, according to Cleveland Research Co.

    “Wal-Mart aimed to revive sales at U.S. stores open at least a year by returning items to shelves and revamping promotional displays. Those moves haven’t worked yet because of poor in-store execution and a lack of advertising to explain changes to customers, Cleveland’s Jeff Stinson said in a report today.

    “‘Sales have drifted south again over the last couple months, and the outlook for the fourth quarter is now more questionable,’ said the analyst, who is based in Cleveland. ‘We are less optimistic that the business will inflect favorably in time for the holidays’.”

    Walmart’s annual investor meeting is scheduled to take place today in Bentonville, Arkansas.
    KC's View:
    Today is a big day for the Bentonville Behemoth. Let’s see if its focus is more on Main Street or Wall Street.

    Published on: October 13, 2010

    The Wall Street Journal reports that the Great Atlantic & Pacific Tea Co. (A&P) “is sounding out restructuring advisers about reworking its debt-heavy balance sheet, said people familiar with the matter.”

    According to the story, A&P “started contacting Wall Street restructuring shops over the summer for ideas on how to address some $1 billion in debt, these people said. Investment banks in discussions with A&P include Lazard Ltd., Rothschild Inc. and Moelis & Co., the people said. The talks have focused in part on roughly $157 million in convertible bonds due June 15, the grocer's biggest near-term maturity. A&P hasn't yet decided whether to hire any restructuring practices, these people said.”

    One possibility, the story notes, is that A&P could go to Ron Burkle, who already owns 27 percent of the company, for additional financing.

    A&P has been reeling from poor financial numbers, and has had four CEOs in the last year.
    KC's View:
    Some of you think that I have been too tough on A&P, and have suggested that this could end up being the retailer’s finest hour. (Whatever you’re smoking, it must be pretty good stuff.)

    But I’m listening, so I won;t be negative this morning. I will, however, turn this space over to one of the smartest guys in the food business, Burt P. Flickinger III, who tells the Journal:

    "By the time these executives learn the market, they leave ... They don't know the plays. And their competitors are blitzing and burying them."

    Published on: October 13, 2010

    Yesterday, MNB took note of an Advertising Age story about what it called an under-targeted demographic group - single people.

    Well, today the Ad Age story is about a different demographic segment: “Advertisements might be filled with young American mothers sporting wedding bands, but in reality, plenty of today's moms were born and raised outside of the U.S., are in nontraditional marital situations and are in their 30s or 40s.”

    Among the numbers cited by Ad Age:

    • “In the 2000 census, one in four male same-sex couples and one in three female same-sex couples reported at least one child under the age of 18 living in their home. Experts have estimated that upwards of 6 million children in the U.S. are being raised by committed same-sex couples.”

    • “In 2006, one in 12 first births was to a woman 35 or older, compared to 1 in 100 in 1970, according to the National Center for Health Statistics. The recession could be further exacerbating that trend, as people postpone having children or adjust their expectations of family size.”

    • “Nearly four in 10 births -- or almost 40% -- were to an unmarried woman in 2007, according to NCHS. And you'd be mistaken in thinking most unwed mothers are teenagers. In 1970, teenagers accounted for half of all births to unwed mothers, but in 2007 they accounted for just 23%. Instead the number of births to unwed mothers in their 20s, 30s and 40s has risen dramatically. In 2007, women in their 20s accounted for 60% of births to unwed mothers, while women 30 or older accounted for 17%.

    Add all these numbers up, Ad Age writes, and “maybe that's why 42% of moms in a study conducted by the Marketing to Moms Coalition found ads that target them as a mom generally ineffective, and 28% found ads that attempt to relate to them as a mom unappealing.”
    KC's View:
    To be honest, I found some of these numbers to be astounding. Not distressing, but really surprising.

    I’m sure there will be a debate about the moral/ethical implications of these numbers. (One of the candidates in the New York gubernatorial race will probably turn them into an angry press release.) But for the moment, let’s just consider the broader significance - that these women are empowered and independent and not reliant on traditional institutions for approval or positive reinforcement.

    That means, it seems to me, that companies have to market differently to these women. They’re not going to believe ad pitches just because they trust the companies making them; rather, they are going to set the bar higher in terms of credibility and relevance.

    This can be an enormous opportunity for marketers, if they are willing to engage with this demographic and embrace the challenge.

    Published on: October 13, 2010

    The Associated Press reports that the US Department of Agriculture (USDA) is providing $2 million in funding “to food behavior scientists to use marketing tricks to encourage kids to pick fruits and veggies over cookies and french fries. Some of the ideas include hiding chocolate milk behind plain milk, putting the salad bar near checkout, placing fruit in pretty baskets and accepting only cash as payment for desserts.”

    According to the story, “Studies by Cornell University researchers have found these tactics work, and Cornell will start a new child nutrition center to test more of these methods.”
    KC's View:
    What’s the message here? “If we can’t persuade them using pertinent facts, then, dammit, let’s just try to trick them into eating healthy.”

    Maybe I’m wrong on this, but it doesn’t seem like a sustainable solution to me.

    Published on: October 13, 2010

    • Walmart yesterday announced what it called “big savings on toys to kick off the pre-holiday season, with $5, $10 and $15 on this year's must-have toys,” including items such as FurReal Gogo Pup, Nerf N-Strike Stampede, Iron Man, Thomas the Train, Barbie and more.
    KC's View:
    FurReal Gogo Pup? Nerf N-Strike Stampede? Never heard of them. Which says not just how old I am, but how old my kids are.

    Published on: October 13, 2010

    Supervalu announced that its Cub Foods stores in Minnesota, Illinois and Wisconsin will begin offering customers “afflicted with gluten sensitivity an informative diet management program” consisting of “signage and special merchandising sets in select stores to help make it easier for customers to find gluten-free products. Customers can also visit the customer service department to pick up an in-store shopping list/guide to gluten-free products as well as get their gluten related questions answered. More extensive gluten-free shopping lists as well as recipes and snack and meal solutions will be available on the stores' web sites.”
    KC's View:

    Published on: October 13, 2010

    • Iowa-based Casey’s General Stores, itself the target of acquisition-minded companies just a month ago, announced yesterday that it is purchasing 19 On The Way convenience stores in Illinois that are owned by the Harper Oil Co.

    Terms of the deal were not disclosed.

    • In California, the Press-Enterprise reports that warehouse workers and drivers overwhelmingly ratified a new five-year contract with Southern California's major grocery chains - including Albertson, Ralphs, Stater Bros., and Vons - giving some 5,000 employees what the Teamsters characterized as “pay increases and holding the line on their medical costs.”

    • Best Buy has announced that it will install electric car charging stations at 12 stores in Tucson, Phoenix, Los Angeles, San Diego, and Seattle, and will roll out the program nationally if data gathered in the pilot suggests that it should.

    • The Boston Globe reports that after years of delays and speculation, ground has been broken in Northborough, Massachusetts, on the shopping complex that will be home to Wegmans’ first Bay State store, a 135,000 square foot unit that is scheduled to open in about a year.
    KC's View:

    Published on: October 13, 2010

    Responding to Michael Sansolo’s column yesterday that connected Einstein’s Theory of Relativity to fast food consumption, MNB user Gary Harris wrote:

    Being on the road fairly often for work, I find myself frequenting the occasional fast food drive-through so I can continue to eat while getting to my destination. Over the past few years, I’ve been amazed at the difference among these places. Wendy’s seems to get it. When someone comes to a drive-up window, especially around the lunch hour, they’re probably pressed for time. So, I consistently find myself placing an order at the menu board, then as I approach the window, invariably I see a disembodied hand with my drink in it waiting for me to pull up. I take the drink, give the person my money, and my change and a bag with my lunch in it appear almost simultaneously. A decent burger, fries, and a drink, fresh and quick. At the same time when I stop at a McDonald’s, the wait (usually only a few minutes, but it’s a wait!) seems unbearable. It’s FAST FREAKING FOOD for crying out loud! If you can’t do the FAST part, you’ve lost 90% of your competitive differentiation! I’m not there for the ambience, or for the delicious, wholesome, healthy midday repast, I want to eat and run, at the same time! Painful, just painful.




    There was a story yesterday about a new study saying that people will spend more at discounters during the upcoming holiday season, but Costco was one of the retailers that the study suggested shoppers might avoid. I expressed some surprise that Costco was not seen as a discounter, which led one MNB user to write:

    Perhaps the reason that consumers say they will go to Costco less lies in the fact that Costco sells expensive items at a low margin and has fewer choices than the listed “discounters”.  People are spending less money but still have the same amount of persons to shop for. It seems to me that consumers will continue to spend less per person.  As to why Costco is not referred to as a discounter – again that may relate to the fact that they do not have inexpensive items on their shelves and the consumer view of a “discounter” is inexpensive items for sale.




    We also had a story yesterday about the increased number of singles in the US, which prompted one MNB user to write:


    I wonder if the increase in singles has anything to do with the increase in technology, gaming or the internet which allows non-personal contact? Any thoughts from you?

    I don’t think so, but what do I know? I think it has more to do with people not necessarily accepting traditional models as life choices ... which I think is completely admirable. Not that traditions are bad, for people who want to embrace them. But people also ought to be free to make other choices...and companies need to widen their sights to embrace them as well.




    On another subject, MNB user Jim DeLuca wrote:

    Your comment about Walmart beginning with a carrot to entice and bringing in the stick later indicates to me that you (and lots of other folks) and I have a difference of opinion about stick and carrot.

    My 'learnin' came from the image of a cart driver with a stubborn mule who was not motivated to get along...  so the driver gets a long stick and ties the carrot to it and dangles it in front of the mule.  Ahh, action in the direction of the carrot...

    The image you bring up indicates that your metaphor means that you entice with the carrot and you beat with the stick...

    In my metaphor the stick represents the communication skills needed to describe the reward...  In your metaphor, there is a polarization issue, I will reward you if I do what I want and I will punish you if you don't...

    Just wondering what other folks think...




    Yesterday, I got a math lesson, connected to a previous email exchange about people who demonize other people. This is how it went...

    One MNB user wrote in an email posted yesterday that the people doing the demonizing are just a fraction of the overall population, and I responded:

    “I agree that it is a fraction. But there’s pretty good evidence out there that the fractions are multiplying.”

    Which led MNB user Tim McGuire to write:

    “I hope that you are right that the "minute fractions of the world at large" that hold such narrow-minded views are indeed multiplying, because the rules of mathematics show that when you multiply two fractions, you end up with an even smaller fraction. :)”

    Of course. This amply demonstrates my math abilities.

    If my father, who taught math for decades, knew about this, he’d shed a tear.


    Which led to yet another email:

    Regarding "fractions multiplying" ... The possible missing piece in this exchange is the word, faction, which could be used to describe "the people doing the demonizing", as a definable group.  Factions can multiply, in the sense of your reply to the first reader, and end up as an ever-larger faction, which is the point you were trying to make.  So to quickly recap, when fractions multiply, the number gets smaller, whereas when factions multiply, the number gets larger.  This ain't fiction!

    This stuff gives me a headache.

    As Jimmy Buffett once sang, “Math Suks.”



    And finally, responding to some of the sports coverage on MNB this week, MNB user Bill White wrote:

    I have been an Atlanta Braves fan for many, many years, and have put up with the "Bobby Cox Era."  I know we should give him some accolades for being the "winningest coach in baseball history."  But let's be honest - all those years, all those victories, all those Division Championships, the unbelievable pitching staff he had back in the day, and only one World Series ring.  Pathetic!  Bobby's teams had a long history of choking in the Playoffs, and it seems to me that this year was no exception - and a fitting end to his "glorious" coaching career.

    Enjoy your retirement, Bobby - as far as I am concerned, it should have happened years ago...


    I’d like to say I feel your pain...but I don’t. And I suspect that fans of teams like the Mets, Cubs, Brewers, Mariners, Marlins, Astros and Pirates probably feel the same way I do.
    KC's View:

    Published on: October 13, 2010

    In the fifth and deciding game of the American League Divisional Series, the Texas Rangers - led by a dazzling Cliff Lee complete game pitching performance - defeated the Tampa Bay Rays 5-1 last night and will move on to the AL Championship Series to play the New York Yankees.
    KC's View: