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    Published on: November 5, 2010

    Something really strange happened to me this week. Someone called me a saint.

    If you caught some of the e-mails to MNB this week, a reader called me a “saint” after reading my article about a lengthy supermarket shopping trip with a visually impaired relative. I’m flattered, but rather than accept the nomination to sainthood, I’d like to push this discussion in a different direction. Because the more surprising response to my article was the number of e-mails sent to me by others who have dealt with this problem with elderly relatives.

    Saints probably don’t think this way, but I believe we have just uncovered a huge business opportunity that could provide stores with an incredible way to build sales, strengthen public relations and promote brand value at a time when all are under assault.

    As I said in my column, senior citizens are a growing business. Census data tells us that the numbers of Hispanic and Asian Americans are rising in coming decades, but nothing compares to the swelling numbers of senior citizens. The first Baby Boomers turn 65 in 2011, which means the number of folks with vision, walking and other problems is going to grow at the same time. The market is there.

    The time is there. Pick the slowest time in your store (I’m thinking Tuesdays between 10 a.m. and 2 p.m.) and imagine what would happen if you dedicated it to serving older residents in much the way Saturday nights were used as socials for Baby Boomers 15 years ago. Consider having associates provide escorted shopping trips through the store, while other associates act as salespeople in various departments. They could talk about products, prices, nutrition and choices all while sampling and selling the daylights out of everything.

    Now I know there’s a cost to that, but the flip side is tons of opportunity and new sales. It would take a slow sales period and make it crazy busy if you are in the right kind of neighborhood. It would create an incredibly loyal group of shoppers (think about the power of being first in this space) and would likely spread that loyalty to grateful family members. It would no doubt garner easy publicity (local TV loves stuff like this) and would certainly result in an entirely new kind of buzz everywhere from Facebook to church socials.

    In short, it’s an idea swimming in potential. So really, I’m no saint. Just a crazed capitalist who believes you can do really, really well by doing good.

    That’s my Friday Eye-Opener.

    - Michael Sansolo
    KC's View:

    Published on: November 5, 2010

    Brand Week writes, “While no headlines have announced the official passing, it’s become clear that the ‘aspirational’ consumer - that cherished demo of marketers everywhere - is dead.”

    Here’s the rationale:

    “According to a just-released study by the American Affluence Research Center, the spending habits of the utmost tier of earners remains robust, but everyone below has cut back and plans to stay there ... Consumer Edge Research recently found that skipping top-shelf brands in favor of lower-end ones is most common in households with incomes of $100,000 or higher. A study conducted by PriceWaterhouseCoopers/Kantar Retail earlier this year revealed that 93 percent of shoppers say they’ve changed their shopping behavior - with 17 percent opting for cheaper brands.”

    And here’s the conclusion:

    So much for life’s little indulgences ... It was nice while it lasted.”
    KC's View:
    With all due respect to these august organizations...

    I’m not buying it.

    I simply do not believe that customers are less aspirational than they used to be. I think that they’ve adjusted to a changed reality, that they think achieving their aspirations may take longer than expected. But I think the aspirations remain...and that the retailers figuring out how to fulfill some measure of those aspirations for less money will be winners.

    Published on: November 5, 2010

    The Wall Street Journal reports that “an inflationary tide is beginning to ripple through America's supermarkets and restaurants, threatening to end the tamest year of food pricing in nearly two decades.

    “Prices of staples including milk, beef, coffee, cocoa and sugar have risen sharply in recent months. And food makers and retailers including McDonald's Corp., Kellogg Co. and Kroger Co. have begun to signal that they'll try to make consumers shoulder more of the higher costs for ingredients.”

    The problem is that nobody quite knows what the traffic will bear, and there remains considerable concern that continuing recessionary pressures will lead to customer defections because of raised prices.
    KC's View:
    The bigger problem will be endured by companies that have made price the only thing that matters in their businesses. if you had something else going for you - some other differential advantage that set you apart from the competition -n then I think the impact will be less.

    Published on: November 5, 2010

    The Wall Street Journal this morning reports that Walmart-owned Seiyu in Japan is being investigated by financial regulators there.

    According to the story, “The probe came to light just a week after the Tokyo Stock Exchange and Japan's Securities and Exchange Surveillance Commission said they were looking into suspicious trading patterns surrounding a series of recent moves by companies to raise billions of dollars by issuing new shares.

    “A Seiyu spokeswoman said the company is fully cooperating with the Securities and Exchange Surveillance Commission, but she couldn't provide further details on the subject of the investigation ... Local media reports said the SESC is investigating possible insider trading involving an offer in late 2007 by Wal-Mart to buy out minority holders in Seiyu, over which it then had majority control.”
    KC's View:

    Published on: November 5, 2010

    The Seattle Times reports that “Starbucks CEO Howard Schultz said in a conference call with analysts this afternoon that it will replace Kraft Foods, which for more than a decade has distributed Starbucks coffee to grocery stores in the U.S.”

    Kraft got the call about a month ago. No information has been provided about why the change is being made, nor about what company might replace Kraft.

    In a statement, Kraft replied:

    “Kraft Foods' agreement with Starbucks regarding the sale of packaged coffee in grocery stores and other channels is perpetual. Importantly, if Starbucks decides to exit its relationship with Kraft Foods, the agreement requires Starbucks to pay Kraft Foods the fair market value of the business plus, in certain instances, a premium.

    “Kraft Foods intends to keep the discussions with Starbucks private and will not be providing further details or comments at this time.”
    KC's View:
    In other words, Kraft is saying that Schultz is going to have to write a hefty check to get out of their partnership. Betcha that’ll have an impact on profits.

    Published on: November 5, 2010

    • Tesco-owned Fresh & Easy Neighborhood Markets announced yesterday plans to open ten stores in southern California early next year, in El Cajon, Lake Forest, Costa Mesa, San Diego, Oceanside, Walnut Park, Ventura, Camarillo, San Dimas and Long Beach. The openings will start on January 12 and run through early March; they are expected to create about 210 jobs.

    Fresh & Easy currently operates more than 150 stores in California, Arizona and Nevada.  
    KC's View:

    Published on: November 5, 2010

    Forbes has an interview with Kraft CEO Irene Rosenfeld in which she talks about the impact of social media on her business. An excerpt:

    “The opportunity to establish stronger connections between our brands and our consumer is going to be the essence of our success.And so I'm actually delighted to have tools like Google and Yahoo! and Facebook and Twitter ... We're demanding that we think about what we call 360 marketing from all of our agencies, which means we want to make sure that we are addressing all the potential touch points for each of our brands as we market them.

    “And increasingly, we're finding some of our agencies are not as able to make that leap as others. I think we started when we began though there was a sense that we wanted to try to find one-stop shopping and I think increasingly, we're discovering that there are different places that have different skill sets and we are well served to be able to capitalize on the strengths of each of them.”
    KC's View:
    That needs to be the model for everybody in the customer satisfaction business - stronger connections, multiple touch points, and a focus on exploiting strengths wherever they exist.

    Published on: November 5, 2010

    Ahold-owned Giant Food of Carlisle, Pennsylvania, said yesterday that it is acquiring two Genuardi’s supermarkets, in Feasterville and Warrington, Pa.

    The stores are scheduled to close on November 13 and reopen under the Giant banner in early 2011.

    The change marks the sixth and seventh stores closed by Safeway-owned Genuardi’s in the past year; the company now has 29 stores in region.
    KC's View:

    Published on: November 5, 2010

    • Published reports say that the New York State Court of Appeals has reinstated a lawsuit filed against New York State by Amazon.com and Overstock.com, claiming that a law requiring them to collect state sales taxes is unconstitutional.

    Amazon reportedly has been collecting state taxes even while disputing the validity of the state law.
    KC's View:

    Published on: November 5, 2010

    Sparky Anderson, one of just two men to manage teams in two leagues to World Series Championships (Tony La Russa is the other), died yesterday at age 76, just days after it was revealed that he was in hospice care because of complications from dementia.

    Anderson managed the Cincinnati Red’s “Big Red Machine” to championships in 1975 and 1976, and then brought the Detroit Tigers to the promised land in 1984. He once described his managerial technique this way: “I got good players, stayed out of the way, let ’em win a lot, and then just hung around for 26 years.”
    KC's View:
    Sounds like a pretty good management technique to me...and one that probably transcends baseball.

    Published on: November 5, 2010

    We had an email yesterday from an MNB user who lambasted all of California in the wake of the San Francisco decision to ban putting toys in Happy Meals. I defended the state of California vociferously, pointing out that it is a state of great diversity and did not deserve the criticism.

    MNB user Hortencia Espinoza chimed in:

    Thank you for standing up for my city and state.

    I have a few words for Dave Vosteen and anyone else who feels negatively about my home.

    As someone who is born and raised in San Francisco, CA I am fully offended by his comments.

    First of all, the vote was not by the people. It was by the board of supervisors. Out of the board of 11 supervisors, only 3, that’s right, THREE, are San Francisco natives. The other 8 come from all over the country. Probably from wherever Dave hails comes from.

    Native San Franciscans are the furthest from being liberals. We are accepting, but not liberal. We are tolerant, but not liberal. Why do you think San Franciscans don’t get along with Berkeley-ite’s and embrace anything Silicon Valley.

    We don’t breed liberals. They come here because they have to face hate spewing idiots who can’t get their facts straight about a city or state he would never visit. They all get together and vote for non important issues.

    Our state does have a high unemployment rate. We average 8-10%, without a recession. If you look up any job search site and you will see listings and listings of jobs in California. Jobs are there, trust me.

    If you don’t like us, don’t come here, don’t buy our products, don’t think of us and do not put so much passion and emotion into words about us. We do not infringe upon anyone’s freedoms. We are the FREEST area in the country. You can express your freedoms here any way you choose. But rest assured, you insult and hate, we will retaliate.

    And if we do float away, we would take with us Ghirardelli chocolate, Anchor Steam beer, Apple computers and devices, Adobe, Cisco and Intel systems, Facebook, YouTube, Craigslist, Flickr, Twitter, Google, eBay and Yahoo. Petco, Mattel, Levis, Gap and Gymboree. Dolby, Sega, Disney, Pixar, LucasFilm, THX, ILM, heck, Hollywood in general. Clorox, Williams Sonoma, C&H Sugar, Clif Bar, Haggen Dazs, Dryers, Jelly Belly, Jamba Juice, Peets Coffee, Chicken of the Sea, Kashi, Del Monte Foods, Jack in the Box, and Rubios. All of our Wine and fresh fruits and vegetables come with us too. Plus, the World Champion San Francisco Giants!

    There are plenty more things we would take with us but I figured I would stop here. Dave, make sure you look around your life and make sure you return all of the products that came from the state with “a bunch of lunatics.”


    And another MNB user wrote:

    From the reader’s rant on California, what the guy doesn’t understand (and I find a common sentiment as I travel in the U.S.) is that there are a great number of moderate/conservative folks that live in California, especially Northern California and outside of the Los Angeles basin. There certainly are a large number of super-liberal types around (can you say Berkeley?), but many of them CAME FROM OTHER STATES to live in CA for a variety of very good reasons (beauty, climate, jobs).  Most families outside of SF are your typical go to work, raise your kids, try to make ends meet folks that care about our country (they just don’t vote like it!). And, the Tea Party has strong representation in the suburbs.

    As I said, California is a state of great diversity and tolerance.

    Not to mention a great place to ride down Imperial Highway with a big nasty redhead by your side.




    And finally, apparently distressed by my unwillingness to expand my cultural horizons by listening to Justin Bieber, MNB user Michael Schillo wrote:

    I am going to buy a Justin Bieber CD and ship it to your home office 🙂

    That’s very nice. I just have one question.

    What’s a CD?
    KC's View:

    Published on: November 5, 2010

    As Tony Kornheiser said on his radio show the other day, this certainly goes into the “stuff I never thought I’d have to think about” file.

    There was a fascinating piece in the Washington Post the other day about Kye Allums, who plays for the George Washington University women’s basketball team. What makes Allums interesting is that Allums, biologically a woman, has begun to self-identify as a man, and “is believed to be the first Division I college basketball player to go public about being a transgender person.”

    Allums has said that he told his team about his decision last season, and his coach just this season, and that all have been very supportive. There is no question, apparently, about the propriety of his playing for the women’s team since Allums has not undergone any hormone therapy or surgery.

    “This means a lot,” he said. “I didn't choose to be born in this body and feel the way I do. I decided to transition, that is change my name and pronouns because it bothered me to hide who I am, and I am trying to help myself and others to be who they are. I told my teammates first, and they, including my coaches, have supported me. My teammates have embraced me as the big brother of the team. They have been my family, and I love them all.”

    I find this story fascinating, precisely because it makes me consider things that I never thought I’d have to ponder.

    This has happened before. I know someone who was born a woman, has gone through hormonal therapy, and now is a man. This takes a little getting used to; it is hard just to remember to use “he” as a pronoun instead of “she.” And there are repercussions of such decisions. For example, before undergoing gender transformation, this person was a lesbian, and lived in a long relationship with another lesbian. After the change took place, they remained together...but does this mean his partner is no longer a lesbian?

    These are not insignificant issues in terms of how people think about themselves. And I wonder to what extent corporations and business institutions are prepared to be as accepting and supportive as the folks at George Washington University.

    It’s probably something that they need to think about. It could happen when a checkout person goes through such a transition. Or, when a senior vice president or even C-level executive finds themselves at a personal crossroads.

    As Mr. Tony said, this is stuff that many of us never thought we’d have to think about. But probably have to.




    At some level, it is a little depressing that the television ratings for the recent World Series were among the lowest in years, despite the fact that the series - won by the San Francisco Giants - featured a terrific bunch of games.

    Some are arguing that baseball needs to make major changes, perhaps elongating its playoff structure. This strikes me as a stupid move, and not just because I even hate the wild card format (almost as much as I hate the designated hitter rule). The last thing they need to do is send the baseball season deeper into November and against the NFL; they really ought to cut the season back to 154 games from the current 162, and end the playoffs by mid-October.

    Others are arguing the baseball, unlike pro football, has largely become a local game as opposed to a national pastime. This, in fact, may be true and difficult to change. Perhaps baseball ought to embrace this facet of its nature ... and in doing so, recapture its essential American nature. I’m not sure how to do that, but it seems clear that baseball cannot fight the NFL and win. And so, it needs to go in a different direction.




    We had an Eye-Opener a few weeks ago about how Southwest Airlines, highly praised for much of its approach to business, actually has begun to decline in terms of on-time performance.

    Well, the Chicago Sun Times reports today that the problem is getting worse, as “the low-fare behemoth is struggling to cope with record load factors and more connecting passengers transiting from one flight to another at key hubs, including Midway Airport and Baltimore/Washington International Airport.

    “The on-time performance also is getting worse as Southwest is set to introduce a significant number of new flights in March from Midway to new markets, including Charleston and Greenville, S.C., and to Newark Liberty International, one of the nation's most congested airports.”

    So too much business is creating an airline that people may not want to fly?

    Sounds like the old Yogi Berra line about the restaurant that “was so crowded that nobody goes there anymore.” Or something like that.




    My wine of the week: the 2008 Conundrum white wine, a blend that is absolutely gorgeous - and in my case, spectacular with salmon and the best mashed yams (served with a touch of maple syrup) that I’ve ever had in my life, courtesy of a friend who really knows how to cook.



    And once again, thanks to the dozens of MNB users who sent me happy birthday notes this week. I am moved, almost beyond words.




    That’s it for this week. Have a great weekend.

    Slainte!
    KC's View: