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    Published on: December 21, 2010

    by Michael Sansolo

    Reaching the end of 2010 and finding ourselves still in business is probably enough of an achievement to help all of us to get a little self-congratulatory. Before doing that, consider this sage wisdom often repeated about poker, “If you can't spot the sucker in the first half hour at the table, then you are the sucker.”

    Simply put, look around the poker table or, more correctly, the space where you compete. It may be a neighborhood, a state, a category, an aisle or even some arena of key services. Ask yourself which one of your competitors looks least likely to survive another tough year, least equipped to cope with the current pace of change, least flexible or least strategic to deal with these times? Who looks the least efficient, the least effective and least in tune with the times?

    If you can’t figure out who that competitor is, get worried. In the parlance of poker, you may be the sucker.

    The end of the year always brings a strange bit of nostalgia for the 12 months just ending. You’ll notice we don’t do any recaps of top stories hear at MNB because, as Content Guy Kevin Coupe reminds me constantly, we are always trying to look at the picture differently. (Let the other guys make lists and think traditionally.) He’s right. There’s little to learn from news that’s now 350 days old when the world seems to change almost daily.

    But reflection is called for in one way. Think back on 2010 (and lump in 2009 because the current economic cycle doesn’t honor calendar years) and ask yourself “what changed?” By that I mean, what changed that impacts your business most? Is it the economy, the changes in shopping behavior, technology, cost structures or whatever? Think about what’s changed most in the world surrounding you.

    Then start thinking about that poker table. Think about the changes you and your company have made versus the changes made by your competitors and their companies. Try hard to do it objectively and consider even doing it with your teams. Hopefully when you look around you’ll be able to list numerous ways in which you and your team have changed to meet these volatile times. Hopefully, you’ll be able to proudly point to numerous ways in which you have improved on your competitive advantages or attacked points of weakness.

    When you consider it all, you should hold that mental picture of sitting around the poker table with your competition and with any luck, you’ll realize that you are not the sucker - that you are the winner. If not, get thinking really hard about what you are going to change. Do it fast. Because in business or poker, the sucker doesn’t end up happy.

    Here’s the best news. No matter what, remember the New Year is coming and bringing with it untold and unseen challenges and problems, but also unknown opportunities. So whether 2010 was a good or bad year, you have to keep playing.

    So Happy New Year and get that poker face ready. The game is still on.


    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: December 21, 2010

    The Wall Street Journal reports that Supervalu has been trying to sell its Shaws chain in New England for the past few months, but have been unable to find anyone interested in acquiring the company for a price that it finds acceptable.

    Supervalu has already sold off the Shaws stores it used to own in Connecticut, as well as the upmarket Bristol Farms chain in California, as it pursues what appears to be a value-driven strategy keyed to CEO Craig Herkert’s affection for the Save-A-Lot limited assortment format. In addition, analysts have believed that Supervalu was interested in selling off assets as a way of retiring at least some of its debt. In addition, there have been rumors that Supervalu itself could be on the sales block.

    The Journal says that the remaining 175 Shaws stores in New England have an asset value of about $1 billion.

    According to the Journal story, “Supervalu partnered with CVS Corp. and an investment group led by Cerberus Capital Management for the Albertson’s deal, taking on about $6 billion in debt as part of the transaction.

    “Supervalu’s acquisition of its larger rival gave it more than 2,600 stores across the country. Besides its name sake, Albertson’s also operated Acme Markets, Bristol Farms, Star Markets and Jewel-Osco.

    “But the financial crisis hit supermarkets hard, and a slow economy and intense price competition continue to plague grocery store chains. Supervalu has also been struggling with its debt load. Moody’s recently cut its rating on Supervalu further into junk territory. Wall Street has called for Supervalu to shed assets to pay down some of its debt.”
    KC's View:
    As I think has been pointed out here in MNB more than once in recent months, the number of people who believed that Supervalu was not interesting in selling the rest of Shaws could have had a convention in a phone booth. (For young readers who have no idea what a phone booth is, please Google it.)

    The other question I keep hearing is this: How long a rope does Craig Herkert have?

    Published on: December 21, 2010

    The Wall Street Journal reports that for the first time, “advertisers will have spent more on Internet ads than on print newspaper ads, according to new estimates from eMarketer. The digital-marketing research firm says U.S. spending on online ads will hit $25.8 billion, surpassing the $22.8 billion spent on print ads in newspapers.”

    As the story notes, the shift has been taking place for years, as the internet offers marketers lower costs, a heightened ability to target specific shoppers, greater creative options and a growing audience - as opposed to newspapers, which pretty much the same old, same old ... unless, of course, advertisers also buy space on their websites.

    And, as the Journal notes, the internet is where the customers are - people spend as much time online as they do watching television, and more time online than they do reading newspapers and magazines. “While total ad spending in the U.S. is expected to rise 3% this year to $168.5 billion,” the Journal writes, “eMarketer estimates spending on print ads in newspapers will decline 8.2% in 2010, to be followed by a 6% decline in 2011.”

    So here’s the eye-opening question for marketers reading this piece (online): Where are your ad budgets focused? Are you trying to reach consumers through old-world techniques such as print coupons .... or are you embracing the future, working aggressively to make these cultural and technological shifts work for you?

    Hmmm?????
    KC's View:

    Published on: December 21, 2010

    Bloomberg reports on a new survey of Walmart suppliers that suggests the majority of them do not have confidence in the strategic moves being made by CEO Mike Duke and his leadership team.

    According to the story, “More than half the 139 suppliers surveyed in a study by recruitment firm Cameron Smith & Associates didn’t agree that ‘senior leadership is aligned behind a strategic vision that is consistently communicated and well understood by the supplier community.’ The Rogers, Arkansas-based group surveyed a small sample of Wal-Mart’s more than 60,000 suppliers. To win back shoppers, Duke and new U.S. stores chief Bill Simon changed tactics this year and began restoring thousands of products removed during the tenure of former merchandising chief John Fleming. The company has weathered six consecutive quarters of declining sales at U.S. stores open at least a year, and Duke, 61, has projected “positive” sales for this period.”

    The story goes on, “The survey - the first of its kind - was conducted in October and November. Half the suppliers surveyed said they have worked for Wal-Mart for 12 years or more. About two-thirds of respondents come from companies with 10 employees or less based near Wal-Mart’s headquarters. More than 40 percent of suppliers polled sell food and other consumables to Wal-Mart.”
    KC's View:
    If Walmart’s numbers don’t improve, and its competitors continue to show themselves to be getting greater traction in the consumer mindset, suppliers will grow even more skeptical ... and worse, it could mean that Walmart is losing its strategic positioning in the mind of the shopper, which would be even worse news for Mike Duke and his leadership team.

    Published on: December 21, 2010

    The Wall Street Journal reports that “2011 is shaping up as the year of the food fight. In one corner of the ring: companies desperate to pass along higher food and commodity prices to consumers, and ease up on profit-killing discounts. In the other: consumers with a questionable ability to absorb them.”

    According to the story, “Producers are, on average, paying 19.7% more for farm products like dairy, meat and grains than a year ago, and about 6% more for processed supplies such as butter and sugar. Yet U.S. consumers are only paying about 1.7% more for their groceries than at this time last year, Labor Department data show.

    “Food companies - much like Federal Reserve policy makers - would prefer a little more consumer-price inflation in the U.S. right now. Such a landscape of gradually rising prices and incomes makes it much easier for food companies to pass along costs and at least maintain profit margins ... The food industry is planning gradual price hikes to help expand profits in 2011. But its pricing power, especially at the low end, remains limited. It doesn't help that average U.S. gas prices are inching back up toward $3 a gallon, adding to the squeeze on household budgets.”
    KC's View:
    This story points to a larger truth, I think, and one that envelops commerce and government.

    Americans, in general, have no idea what anything costs. They have been so dazzled by promotions and discounts, so confused by budgetary sleight of hand tricks, that they simply cannot connect costs to prices.

    Published on: December 21, 2010

    A new survey by The Nielsen Company shows that “of the 46 percent of Americans shopping this week, one-fifth waited to shop in order to get last minute deals while nearly 40 percent say they haven't had time to shop yet.  Some (18 percent) wait because they enjoy shopping the last week of Christmas.”

    Other notes from the new survey:

    • “Nearly one-fifth (17 percent) of consumers plan to spend more than $1,000 this holiday season while one-quarter will spend 500 - $1,000.  Twenty-seven percent will spend $250 - $500.  Only seven percent of consumers will spend less than $100.”

    • “Fifty-five percent of consumers tell Nielsen they are planning their holiday spending, armed with a shopping list.”

    • “Nearly three-quarters (74 percent) will be shopping department stores, while nearly half are visiting supercenters/mass merchandiser stores.  Other shopping locations: online (45 percent), electronic stores (38 percent), toy stores (32 percent), dollar stores (29 percent), grocery stores (32 percent) and warehouse clubs (27 percent).”
    KC's View:
    I’m sorry ... did Nielsen say that 18 percent of consumers enjoy shopping the last week before Christmas?

    Who the hell are these people?

    Published on: December 21, 2010

    Advertising Age reports that Walmart is “readying a ‘Walmart on Campus’ store at the University of Arkansas in what appears part of a series of tests of smaller-format stores for the giant retailer.”

    The 10,000 square foot store will replace a university-run operation, and reportedly will include a pharmacy.

    • The Los Angeles Times reports that Walmart has decided to stay open on Christmas Eve until 8 pm, two hours later than last year, as it looks “to give shoppers even more time for last-minute purchases.”

    In addition, the Times writes, Walmart “is extending the order cut-off date for its site-to-store service to Dec. 20 from Dec. 17, last year's cut-off date. The program allows customers to purchase items online and pick them up at a Wal-Mart near them.”

    • Walmart said yesterday that it will delay its acquisition of China’s Trust-Mart until May 2011 “while certain conditions of the contract are being completed,” the retailer said in a statement. The company currently owns 35 percent of the company.
    KC's View:

    Published on: December 21, 2010

    • The Wall Street Journal reports that Brown-Forman Corp., the maker of Jack Daniel's whiskey, is putting its wine business on the block. The reason, sources tell the Journal, is that the division - which includes brands such as Fetzer and Bonterra Vineyard - has “delivered sluggish sales for several years” and could bring in a few hundred million dollars in a sale.
    KC's View:

    Published on: December 21, 2010

    A fellow named Tom Arthur died last weekend at age 62.

    Most people in the food retail industry probably won’t know the name. But Tom Arthur was a longtime senior executive and leader at Stew Leonard’s, a nephew of Stew and Marianne Leonard who joined the company in 1983.

    His passing is worth noting because it is a reminder that great businesses are built not just by the guy with his name on the door, but by many people who work hard, often tirelessly, to make the founder’s vision a reality.

    Worth remembering, I think.
    KC's View:

    Published on: December 21, 2010

    On the subject of a proposed rule that would limit the interchange fees that banks can charge retailers for debit card transactions, one MNB user wrote:

    Please do not publish my specific store or company, but I can tell you for November, my one grocery store, was charged $23,000 in debit transaction fees.  I am always amazed when I get my Profit statement that this is the average I pay each month to the banks for my customers to pay with Debit/Credit cards.

    I really hope the law passes to stop this gouging.


    If my math is right, that means a 100 store chain could pay almost $3 million in interchange fees just on debit card transactions. Yikes.

    MNB user Clay Dockery wrote:

    My hope is that the cap on fees will result in a reduction of advertising…..after all, how many times do we really need to see, “What’s in your wallet?”!

    That’d be nice.

    Responding to my debate with another MNB user yesterday, another reader wrote:

    Nice job on calling someone out of the facts. I particularly like your take:

    “We have to get past the point where every regulatory proposal gets seen as a liberal/socialist threat to all that has made America great ... just as, by the way, we have to get past the point where every problem is seen as an excuse for a new set of regulations.”

    It is interesting that we find ourselves trying to strike a balance between these two forces.

    I guess it doesn’t seem to amaze me any longer that there are people that have opinions regarding certain matters to which they have for one never felt the direct impact of it on their own personal life. Or, don’t bother to consider or research the impact the matter has on the actual people it does affect before drawing their own conclusions. I don’t know who said it first but one of my favorite quotes is, “Where you stand depends on where you sit”.

    Having family members in small businesses that are affected by these fees I have seen first hand the affect of banking fees have on operating a business. Both in how accepting cards can increase overall revenues but how any increased revenues do come at a cost. My son bought a small restaurant that was “cash only” and the first thing he did was to start taking electronic payment but did not increase his menu prices. And perhaps with this new FED proposal it will not be something he has to consider. But without it… if fees continue to rise I think it is something in addition to the increase of COG that he will have to consider when reviewing his financial statements and how he prices his menu.

    It is ironic how someone can quickly spout off about how “big brother” is trying to control the profits of big business yet say nothing negative of “big brother business” just finding the next loophole to make up the loss and taking it from the consumer another way. I will be the first to admit I know nothing of the details regarding the cost to the banks for proving the service of debt or credit cards, but how much does it cost them per transaction and does that cost increase as the size of the ring increases. I do not receive additional statements based on the number of times I use my card there are just more numbers on the statement. I would just be guessing but I would dare to say that increases in fees are more affected by pay increases then anything else. It is no wonder the US has the highest debt card fees in the world. Maybe the banks should rely an the age old business practice of cutting cost most other businesses need to do today to remain profitable instead of the high road of simply increasing fees again and again. I guess we should apologize to them if they might have to work harder to earn their money.


    MNB user Ken Wagar wrote:

    Kevin, Great response to your reader’s views.

    “We have to get past the point where every regulatory proposal gets seen as a liberal/socialist threat to all that has made America great ... just as, by the way, we have to get past the point where every problem is seen as an excuse for a new set of regulations.”

    Can we please, please, please have a big and repeated amen to that!

    The polarity, paranoia and lack of reason or civility on all sides is driving me away from social networks, news, commentary etc. I am a news junky, wish I could find a source of news and discussion that was reasonably unbiased , fair and dealt with facts at least as much as opinion AND THAT DOES NOT MEAN THAT IT NEEDS TO BE SKEWED TO WHATEVER MY OWN BELIEF’S AND BIASES ARE. I just as you have put it want real facts along with the opinions expressed.

    KC, I fear you are a voice in the wilderness on this. I try to be hopeful but the reality seems to be getting worse rather than better and the Wingnuts on all sides have the loudest bullhorns.





    On the subject of the obesity epidemic, MNB user Mark Boyer wrote:

    I work in the sweet side of bakery business, and most of our products are consumed for reasons we refer to as “the four Cs:” Cravings, Connections (with family and friends), Convenience and Celebrations. Everything we make can be consumed as part of an overall balanced diet and exercise regimen.

    There are no bad foods; only bad diets.


    Another MNB user wrote:

    This article gives the responsibility of the youth to the parents, “ultimately the first responders have to be America’s parents.”

    FINALLY.  We parents need to step up, prepare meals at home, away from the TV, while sitting around the kitchen table in conversation.  If that concept is a shock than we need to be shocked.  The head of household needs to also take responsibility for what they put into their mouth.  Food that comes out of a cardboard box and into the micro-wave can be easy but a life time of this type of abuse may never be corrected. We are blessed in this country to have fresh fruits and fresh vegetables that are sold in the grocery story for our consumption and for our good health.





    On another subject, we got the following email from MNB user Paul Anthony:

    Thank you very much for your interesting, entertaining, and informative emails – they really are a constant delight.

    In reading your comments on social networking among older Americans, I’m reminded that anxiety about change tends to (frankly) be a problem for people of your time of life (and mine) rather than senior citizens.  It’s habitually the middle aged who are stuck with the responsibility for caring for businesses, organizations and families, most often without the authority we need to meet those responsibilities effectively (there are whole branches of psychology dedicated to that phenomenon).  Older people, though, have grown used to change – and have also come to have the authority they need to meet the challenges around them (often through attrition, of course).  I knew a delightful 90-year-old woman in rural Iowa who was always saying that she loved change:  when she grew up, her family had no electricity, no flush toilets, were working the farm with draft animals, and she had grown to adulthood having no voice in anything, and she’d lived to have all the modern conveniences, her own webpage, and very late in life her own career as a journalist.

    Personally, I can’t wait for senility.


    You’re right about our time of life often being challenging and anxiety-inducing.

    But you know, I’ve come to the following conclusion. Life isn’t always simple and easy. Life can come with its share of problems, and sometimes people have to shoulder more than their share of problems.

    In the end, I think, we have to make the decision to be happy. To just say, whatever the problems, whatever the challenges, I’m not going to let them beat me down or wear me out.

    I had a friend named Vic Magnotta whose favorite expression was “Keep smiling.” He lived a life of great opportunity and achievement, yet one that was tinged by tragedy. (He himself died at age 43.) But I never think of him without seeing a smile on his face...which is, a think, the best legacy.

    No matter how old we are.




    And finally, speaking of being happy, this email from an MNb user from Philadelphia:

    The Phillies get Cliff  Lee. The Flyers beat the Rangers. The Eagles steal one from the Giants.

    Christmas happens one week earlier for Philadelphia sport fans!

    KC's View:

    Published on: December 21, 2010

    In Monday Night Football action, the Chicago Bears defeated the Minnesota Vikings 40-14.
    KC's View:
    Personally, I’ve never been a huge Brett Favre fan. Never had anything against him particularly, but just not a fan. I wasn’t happy with his brief tenure with the Jets, and lately it seemed to me that his pursuit of his consecutive game streak was more important to him than his team’s fortunes, and that he was more focused on himself than his teammates.

    But I have to say that last night, I became a Favre fan. The streak was over, the game conditions impossible, and he’s an old man (by football standards) recovering from a tough injury. And yet, to everyone’s surprise, he started the game - and he was out there flinging the ball around and looking, at least for a few minutes, like a man decades younger than he is. The game didn’t end well for him, as he went out with yet another injury, and the guessing seems to be that his storied career is over. But he looked utterly in love with the game last night ... and I’m a fan of people who love what they do.