retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: December 3, 2010

    by Kevin Coupe

    This morning’s eye-opener is about not being too tied to assumptions.

    I’m not a scientist, and haven’t taken a science class since 1971. (God, I’m old.)

    As I understand it from the papers this morning, phosphorous is one of the six components necessary for all life on earth. That’s all life on earth.

    But the Washington Post reports this morning that “researchers have discovered a bacterium that appears to have replaced that life-enabling phosphorus with its toxic cousin arsenic, raising new and provocative questions about the origins and nature of life.” The bacterium was found, of all places, in microbes living in California's Mono Lake.

    Now, scientists are being careful at this point to say that “a second line of earthly life” has not been found, but the Post writes that “the discovery opens the door to that possibility and to the related existence of a theorized ‘shadow biosphere’ on Earth - life evolved from a different common ancestor from all we've known so far.”

    I don't exactly know what a “shadow biosphere” is, but I do know this. This discovery highlights something that we all need to keep in mind, every day. There is much we do not know. There is even more we do not understand. And just over the horizon - or just under our noses - there are things that exist or that are evolving that could challenge some, many, or all of our assumptions. This applies to business, to culture, to science, and to life.

    And that’s our Friday Eye-Opener.
    KC's View:

    Published on: December 3, 2010

    The US House of Representatives voted yesterday 264-157 to approve a landmark child nutrition bill - formally called the Healthy, Hunger-Free Kids Act - that the Christian Science Monitor says “some of the biggest changes to the Child Nutrition Act since the program was started nearly half a century ago.”

    The US Senate unanimously passed the same bill last August, and President Obama is expected to sign it.

    Among the changes that will be created by the bill, as described by the Monitor:

    • “An additional $4.5 billion over 10 years to child nutrition programs – the first time the federal government has increased funding for them in 30 years.”

    • “A 6-cent increase to the $2.68 reimbursement rate that schools get from the federal government for free school meals.”

    • “Authorization for the US Department of Agriculture (USDA) to set nutrition guidelines for all foods sold in a school building, including those in vending machines and à la carte lines.”

    • “Expanded access to school lunch programs, and an expanded after-school meal program.”

    • “Money for farm-to-school programs and school gardens.”

    Proponents of the bill have said that it is deficit-neutral, but opponents said that it represented yet another example of the government creating a “nanny state.”

    "It's not about making our children healthy and active," said Rep. John Kline (R-Minnesota). “We all want to see our children healthy and active. This is about spending and the role of government and the size of government – a debate about whether we're listening to our constituents or not.”

    In statements issued yesterday, a number of food industry executives praised the passage:

    “We applaud the U.S. House of Representatives for approving The Healthy Hunger-Free Kids Act as it contains important policy changes that lay the groundwork for the modernization of the Women, Infants, and Children (WIC) program, a long-standing initiative that helps provide healthy, nutritious foods to more than 9 million women and children every year,” said Leslie Sarasin, president/CEO of the Food Marketing Institute (FMI). “FMI has long supported the transition of the WIC program away from paper coupons to one supported by electronic benefits transfer (EBT) technology  as it will increase the efficiency of the program for both WIC-eligible mothers and grocers across the nation ... We urge President Obama to sign this important legislation as soon as possible.”

    Pamela Bailey, president/CEO of the Grocery Manufacturers Association (GMA), said, "We applaud the House for passing The Healthy Hunger-Free Kids Act – this crucial legislation will help feed many more children through school lunch and breakfast programs and increase the number of healthy choices in the cafeteria ... The food and beverage industry believes the school environment is a special environment and that the school cafeteria line can be on the front lines of feeding children while ending childhood obesity within a generation.”

    And Tom Stenzel, president/CEO of the United Fresh Produce Association, added: “United Fresh and our members have helped lead the charge for healthier school meals for many years,” said United Fresh President and CEO Tom Stenzel. “It is so encouraging to see Congress recognize that giving kids healthier options is a great first step toward fostering a healthier country.”
    KC's View:
    I think we can expect to see almost every discussion and debate framed as being about the size and role of government.

    I was interested the other day to read the following paragraphs in the New York Times, in a story called “Junking Junk Food”:

    Earlier this month, Sarah Palin showed up in Bucks County, Pa., with “dozens and dozens” of cookies, suggesting that the state’s schoolchildren risked losing the right to the occasional classroom treat because of a high-minded anti-sugar edict from the board of education. Pretty much everything about the setup was wrong. Pennsylvania wasn’t, as Palin tweeted, in the midst of a ‘school cookie ban’ debate. And the school she turned into a photo op wouldn’t have been subject to such a ban had one existed; it wasn’t a public school but a private Christian academy. And while Palin might have been seizing an opportunity to ‘intro kids 2 beauty of laissez-faire,’ she wasn’t just visiting with schoolchildren but was delivering a paid speech at a fund-raiser.

    Still, however shaky its factual foundations, Palin’s highly mediatized cookie showdown was a big rhetorical win. With her unerring feel for the message that travels straight to the American gut, she had come up with new and vivid imagery to make the case that the Obama “nanny state” is, essentially, snatching cookies — i.e., the pursuit of happiness — from the mouths of babes. Suddenly, Pennsylvania’s suggestion that schools encourage alternatives to high-sugar sweets became an assault on the American way of life. On freedom and simple pleasures. On wholesome childhood delights and, of course, the integrity of the family ... At a time when more than two-thirds of American adults are indeed fat (overweight or obese) and 17 percent of children and adolescents are obese, declaring war on unhealthful eating, as the Obama administration has done to an unprecedented extent, could be fraught with political liability ... with antigovernment sentiment resurgent, the cookies are pushing back, like the return of the repressed.

    I’m sure there are places where the child nutrition legislation overreaches. There almost always are. And I’m sure there are places in the bill that have been crafted for political expediency - by members of both parties - rather than children’s best interests.

    But as a taxpayer, I think that public schools need to be held to a higher standard in all areas - and that includes in the cafeteria. If we want our kids to be the smartest, best-educated children on the planet, which will in turn make them the most innovative and competitive, then that ought to include feeding them and educating them about the importance of proper nutrition. That doesn’t strike me as a cost. It sounds more like a good investment. And for either side to use kids - and their best interests - for political advantage in this area would be a shame.

    Published on: December 3, 2010 has an interview with Walmart CEO Mike Duke, conducted by Charlie Rose of “The Charlie Rose Show.” Some excerpts:

    On what “shopping smarter” means... “It starts, first of all, with price. There is no doubt some of this has transpired during the recession. The economic crisis has caused some changes in the way the consumer shops. And frankly I think, again, it's to our benefit. And the fact that customers across the United States and around the world want to be smarter about the way they spend their money. And for some customers, it's because they have to. Those customers are under the most pressure from their financial status, have to be smarter with the way they spend their money. But even customers that have income want to be known as shopping smarter. So it starts with the wisest way that I spend my money, getting the best price, knowing that my basket of products is the best I could have done and being proud of that for being smart. I do say, Charlie, it's leading though to even a broader perspective from customers about the quality of the product I buy. I want to be smarter about that. And in addition, how the product is produced, the nutritional value of food, the sustainability of product, all of that. I find that customers want to know more about what they're buying. And most importantly though, they want to know that they're spending in the smartest way for their purchases and for their family.”

    On Walmart’s growth potential... “We actually have a lot of growth opportunity here in the U.S. So I would say it's both in the U.S. and in the international markets. So I start here in the U.S. because our big business, 75 percent of our business, is still here in the United States. And here in New York City or other urban markets, there is a big opportunity. We've started more initiatives in the urban markets of the U.S., including small stores ... We said Chicago initially. We've also announced our intention in Washington, D.C. We have four sites that are under development at this point that we really want to open in D.C. And I think you could look at other large urban markets in the U.S. We don't have anything to announce about New York. We're not at a point of having specifics here. But we see a lot of customers here, in Chicago, Washington, and other large cities that really just don't have access to Wal-Mart product and Wal-Mart prices, that we see as a real opportunity ... I'd say urban is a big growth area in the U.S. Then e-commerce - with multichannel in the U.S. - is a big opportunity to grow the business in the markets we're already in.”

    On what he’s learned since becoming CEO... “I've come to really respect the position that Wal-Mart has in the world. I respect the opportunity that we have to make a difference. We can have a very, very positive impact. We started to learn that as a company in recent years. I think from Katrina to sustainability to some of the other things, as we took on initiatives, we've come to say we can provide positive benefit. And I've come to appreciate even more in the last couple of years that we can really make a difference in the world on the big issues that are really important to the world because they're important to our customers.”
    KC's View:
    Intriguing interview, and I think these two excerpts point to what US retailers that compete with Walmart need to think about ... because between the entry into urban markets and expanded online shopping -especially in grocery - it means that everybody is competing with Walmart. And you have to act that way, everyday.

    Now, it’s interesting. The Christian Science Monitor had a piece the other day that said the following:

    For decades, Wal-Mart Stores set the standard for retailers: They were the most efficient at getting low-priced goods into the hands of consumers that nobody could beat them on price.

    Now, that price leadership seems to be moving to As it did last year on Black Friday, Amazon set the price bar for hundreds of items, which no one else could touch.

    The simple fact is that companies like Walmart and Amazon are coming to get your customers, and using technology to do so. (Online shopping is just the beginning. Mobile technologies and social media are just the beginning of the revolution, and retailers large and small better pay attention and figure out how to keep up.) If you’re not gearing up to play offense - not just defense - then the path to irrelevance and obsolescence may be unavoidable.

    Published on: December 3, 2010

    The Wall Street Journal reports that Fiji Water has reversed its decision to pull out of the island nation because of a threat of increased taxes, and reopened its bottling plant there.

    According to the story, “the company, which is owned by billionaire investors Lynda Resnick and Stewart Resnick, closed the facility Monday, sending about 400 workers home. The shutdown came in response to a move by Fiji's government to impose a steep tax increase on companies that extract large volumes of water from the country. Fiji Water was the sole company affected by the increase.”

    But Fiji Water accepted the tax increase yesterday, perhaps in part because the government said it was willing to sell or rent the water company’s assets there to another company.
    KC's View:
    In this case, it seems like the government held all the cards. Tt would have been hard for Fiji Water to keep selling Fiji water if it were from someplace else.

    Published on: December 3, 2010

    A new survey out from a polling firm called StrategyOne says that “despite some positive economic news in recent days, most Americans remain deeply concerned about the state of the U.S. economy. The StrategyOne Annual Holiday Shopping Index found that 79% believe the U.S. remains in a recession; only 10% rate the economy as excellent or good; and just eight percent think the economy will be much better by next year.”

    According to the survey, “This pessimism is influencing consumers' holiday shopping, with 39% concerned enough about the economy that they are planning to spend less during the holidays than they did last year. Another 52% said they were uncertain about the future and planned to keep their spending in line with last year's holiday spending. Beyond that, 36% thought spending a lot of money on gifts was in bad taste this year with so many people still out of work.
    KC's View:

    Published on: December 3, 2010

    It is worth noting that the Irish press has been reporting on the fact that Superquinn - the iconic Dublin-based supermarket chain founded by Feargal Quinn - has just marked 50 years of doing business.

    From his first store, Quinn turned the chain into a paradigm of customer service, and even wrote a great book about it: “Crowning The Customer,” which remains available and worth reading.

    Quinn sold the company to Select Retail Holding Ltd. several years ago, but remains a retailing legend - he hosts an Irish television show called “Retail Therapy,” in which he helps troubled retailers develop and execute winning strategies. And, he is a highly respected member of the Irish Senate.

    And so, Happy Birthday, Superquinn!
    KC's View:
    Feargal Quinn is also, if you’ll permit me a personal comment, one of the nicest, most charming people I have ever met in my life - whether you are with him for a moment’s chat or a dinner-long conversation, it ends up one of the best times you’ve ever had. (And to be even more personal, he is responsible for me meeting two of my favorite friends, Anne & Fiach O’Broin, who are simply two of the best people on earth.)

    Superquinn has its work cut out for it, as it fights for air in a cutthroat Irish economy against increasingly tough competition. I suspect the next 10 years could be as tough as the last 50 combined. But whatever happens to the company, and whoever owns it in the long run, Feargal Quinn has created a legacy that I suspect will outlast even the name over the door.

    Published on: December 3, 2010

    • Published reports say that Snyder’s of Hanover, Pa., is close to a merger with Lance, which would turn the new company - to be called Snyder’s-Lance - into the nation’s second-largest manufacturer of salty snacks, behind only Frito-Lay.

    • C-store chain The Pantry said yesterday that it has completed the acquisition of 47 locations from Presto Convenience Stores in Kansas and Missouri. Terms of the deal were not disclosed; the 47 stores are estimated to generate a total of about $194 million annually.

    • In Snohomish County in Washington State, it is reported that members of the Teamsters who work for Safeway, QFC, Fred Meyer and Albertsons have overwhelmingly ratified a new contract with the retailers.

    • The Seattle Times reports that “taxes on candy and bottled water and an excise tax on carbonated beverages end Thursday, the result of voter approval of Initiative 1107 in November.

    “Voters rejected the tax, which was imposed last year by the Legislature to help plug a $2.8 billion hole in the state budget. The taxes were projected to generate $101.2 million for the remainder of the current biennium, which ends next July, and $216.8 million in the next biennium.”
    KC's View:

    Published on: December 3, 2010

    Just one quick note this morning...

    I got a bunch of emails yesterday wondering why I quoted Ricardo Montalban from Star Trek II: The Wrath of Khan in my comment about the dispute between Starbucks and Kraft Foods over the latter’s representation of Starbucks’ coffee business to food retail:

    Y’think that at odd moments, Howard Schultz stands in his office, looking out the window, thinking of Kraft, and muttering, “From hell's heart I stab at thee; for hate's sake I spit my last breath at thee.”

    For the record, I wasn’t quoting Khan. I was quoting from “Moby Dick,” by Herman Melville. As was Khan, as he looked for final revenge against James T. Kirk.

    “Moby Dick” has a character named...Starbuck.

    Okay, maybe it was a stretch.

    But I was feeling literary.

    More “Your Views” next week...
    KC's View:

    Published on: December 3, 2010

    In Thursday Night Football, the Philadelphia Eagles defeated the Houston Texans 34-24.
    KC's View:

    Published on: December 3, 2010

    I’m not sure what all the fuss about airport security is about.

    Last weekend, my wife, daughter and I made our annual Thanksgiving pilgrimage to Chicago. Our eldest son lives there, and it has become tradition for all of us - including our second son, who currently is going to school in Ohio - to converge there for what has become my favorite weekend and holiday of the year. Nobody has to cook, nobody has to eat turkey if they don't want to (everybody else ordered steak, I had salmon), and we spend a great couple of days just hanging out in one of our favorite cities.

    On Thursday morning, we headed to the airport early to catch a 9 am flight. Warned about long security lines and potential pat-downs and x-ray screening, we got there in plenty of time to check bags and have a leisurely cup of coffee or two. And then gritted our teeth and walked down to LaGuardia security, which is awful under the best of circumstances.

    And found almost no line. No pat-downs. No x-rays. Just the same old metal detectors and the same old take-off-your-shoes-and-don’t carry-liquids-on-the-plane level of security. Got on the plane, took off on time, landed on time, and were in downtown Chicago almost before we knew it.

    Coming home, the same thing. Granted, as a United frequent flyer, I get access to the express lines, but it didn’t seem like there was any greater security on Saturday night than there was last time I was in O’Hare. The only difference during the trip home was that the plane had an amazing tailwind that got us into LaGuardia about 45 minutes early.

    I was almost disappointed.

    I went into the weekend thinking that there was at least a 50-50 chance that I was either going to be felt up or have naked pictures taken of me, and I haven’t had a weekend like that since college.

    I’m fully in favor of not having an estate tax, of keeping the current repeal in place. But I just heard some Congressman on television saying that he was worried about people who would have to think twice about putting their loved ones on life support if they thought the estate tax would once again be put in place.

    And all I could think to myself is that if someone has to think twice about life support for a loved one based on how much money they might inherit, doesn’t that really create a whole new definition for the phrase “loved one”?

    Again, I agree with a permanent repeal of the estate tax. But I would hope that I wouldn’t start making life and death decisions based on whether there is one or not.

    A couple of years ago, when MNB users contributed to a list of what they felt were the nation’s best hamburger joints, one of the most oft-mentioned places was Burgers, Shakes & Fries, which had a small location in Greenwich, Connecticut.

    Well, last night, BSF opened a second location - less than a half mile from my house. It is a lot bigger, with about four or five times the seating capacity...and it even has a small bar, serving beer and wine. It was nice to be able to sit back and enjoy a draft beer while waiting for my burger (with cheddar, tomatoes and grilled onions).

    Nice, and in the end, the thing that rescued the evening.

    Someone once told me that the hardest thing for any retailer to do - the most challenging level of growth - is to go from one store to two. And last night sort of proved that. They ran out of hamburgers before 6 pm, and had to send to the Greenwich location to get more. And it took forever to get the food; there were some families that showed up with small children that were visibly frustrated, prepared to gnaw on the brand new tables. And they even ran out of paper towels in the men’s room.

    That said, the burgers were pretty good. I think they’ll get the kinks out, and that most of the folks who were there last night will be forgiving and try again, maybe in about a month. (Not all, however. One of the employees apologized for the delays and noted that it was opening night to one man who was leaving with his children; the man, visibly annoyed, said, “That’s not my problem.” Ouch.)

    I kept thinking last night that they could have solved - or at least effectively addressed - last night’s problems by doing two things. One, post a big sign that says, in essence, “It’s Opening Night, so please forgive us as we work hard to get things right.” Two, everybody who showed up last night could have been given a five or ten dollar coupon good for use at BSF at some future date, which would have taken the edge off the missteps.

    That’s it for this week. Have a great weekend, and I’ll see you Monday.

    KC's View: