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    Published on: January 28, 2011

    by Kevin Coupe

    Since so many of our stories have to do with California today, it seems fitting that our Eye-Opener also focuses on the Golden State. Our theme - sometimes it isn’t the expected problem that can get you.

    It is well known that Californians live in fear of earthquakes - especially “the big one” that could end up giving Nevada and Arizona residents beachfront property.

    But according to the Los Angeles Times, “California's ‘big one’ may not be an earthquake at all, but a devastating megastorm that would inundate the Central Valley, trigger widespread landslides and cause flood damage to 1 in 4 homes in the state.

    “The prospect of such a storm was raised this month by scientists predicting the consequences of an ‘atmospheric river’ of moisture from the tropical Pacific hitting California with up to 10 feet of rain and hurricane-force winds over several weeks ... In the scenario - powerful back-to-back storms - floods could require about 1 1/2 million people to evacuate and cause more than $300 billion in property damage. The economic loss would be four times that of a very large earthquake.”

    The story goes on: “Los Angeles County, Orange County, San Diego and the San Francisco Bay Area would be especially susceptible to the floodwaters of overflowing rivers. A 300-mile-long expanse of the Central Valley would be underwater, with substantial losses of crops, livestock and urban structures. The rains would overwhelm much of the state's flood protection system, especially in the Sacramento-San Joaquin River Delta area, where levees aren't designed to withstand the flow predicted in such a storm.

    “Landslides would wash out key portions of roads, highways and railroads. Flooding would disrupt the ports of Los Angeles and Long Beach. Power, water and sewer lines could sustain damage that would take months to repair.”

    The good news - if a story like this can be said to contain good news - is that scientists don't seem to think that such a storm is imminent. The most recent storm event that even remotely resembled this scenario took place in 1861, and the general belief is that they happen every 300 years ago ... which means that people may not have to worry about it until the middle of the 22nd century.

    So, it may not be an immediate worry, but, the Times notes, it is “a push by scientists to publicize the risk of a catastrophe that they say is unfamiliar to most Californians.”

    The Eye-Opening lesson - you have to be ready for anything. And everything. Always.
    KC's View:

    Published on: January 28, 2011

    Fortune reports that Walmart CEO Mike Duke is in Davos, Switzerland, for the World Economic Forum, saying it is “yet another sign that the once-insular Wal-Mart is taking its place on the world stage.” Duke and Wal-Mart International chief Doug McMillon hosted a breakfast there yesterday, and Fortune says that they continue to believe that there is a big difference between the haves and the have-nots in the US, are enthusiastic about China and Mexico, and bullish on eventual opportunities in Russia.

    But from the MNB point of view, it is the subject of technology that provides the most interesting - and broadly relevant - insight:

    “‘We see more and more shoppers who are shopping with smart phones, comparing prices and checking out products before they buy,’ Duke said. Contrary to conventional wisdom that smart phones and other cutting-edge technology are being used mostly by the affluent, Duke said Wal-Mart shoppers are embracing technology as a way to save money. He said the company noticed an inflection point in digital shopping this past Christmas season, with dramatic increases in customer adoption of Wal-Mart programs such as ordering online and picking up their products at stores. Duke said consumers embracing digital technology doesn't affect Wal Mart's margins all that much. ‘But we think it plays well to our every day low prices strategy,’ he said.”
    KC's View:
    Often, I speak of the shopping revolution that is taking place because of smart phone technology and the utter transparency of products, prices and services, retailers look at me as this is the worst thing that can happen to them.

    It is critical, IMHO, to look at such developments - since you can’t do anything to stop them - as an opportunity. This kind of transparency makes it possible to be front and center about your advantages as well as your prices. If you don’t ... well, Walmart will. (And, quite frankly, probably will be pleased by the competition’s myopia.)

    Published on: January 28, 2011

    The Oakland Tribune reports that Tesco-owned, US-based Fresh & Easy Neighborhood Markets is considering a tweak of its small-store format to make it even smaller.

    According to the story, Fresh & Easy “is eyeing small store formats as it scouts for additional locations to place its shops in Northern California, the retailer confirmed Thursday.

    “The new and smaller formats would likely be about 5,000 square feet. Fresh & Easy's traditional markets range in size from 10,000 to 15,000 square feet ... The smaller size would provide Fresh & Easy additional options as it seeks locations throughout California,” allowing it to open units in existing and mixed-use developments that currently are not suitable for its format.

    Fresh & Easy, which currently has 150 stores in Southern California, Arizona and Nevada, plans to open more than a dozen stores in Northern California locations, starting in March.
    KC's View:
    I’ve actually sort of though for a while that Fresh & Easy stores, as small as they are, have some wasted space ... so there’s no reason to think that the company can’t make this work. In fact, it strikes me as entirely possible that a smaller size could give Fresh & easy a level of focus that some of think it does not yet have.

    Published on: January 28, 2011

    The Santa Monica City Council in California voted unanimously this week to ban the distribution of free, single-use plastic bags by retailers, the Los Angeles Times writes, saying that the bags are “about as popular as restaurant ashtrays in this progressive beachfront city.”

    According to the story, “Under the ordinance, plastic bags will no longer be available at grocery stores, clothing shops or other retailers, although restaurants may use them for takeout food. Smaller plastic ‘product bags’ with no handles, like those used for produce, will be allowed for public health reasons ... Shoppers may bring reusable bags to the stores or purchase paper bags at checkout for at least 10 cents each. Grocery stores and pharmacies would be able to distribute paper bags made with a high proportion of recycled material.”

    The story notes that the new ordinance was supported by the Heal the Bay environmental coalition, and opposed by a group called the Save the Plastic Bag Coalition, which “commended Santa Monica for making changes based on environmental analyses. For example, the original proposal would have banned reusable polyethylene bags in favor of bags made of cloth or other durable, washable materials. But the city changed course based on a Los Angeles County environmental study that said polyethylene reusable bags can be wiped clean and used multiple times, and meet a higher standard than the single-use grocery bags.”

    Heal the Bay has said that its next goal is to get the city of Los Angeles to pass a similar ordinance.
    KC's View:

    Published on: January 28, 2011

    The San Francisco Chronicle reports that Walmart, emboldened by the likelihood that the San Diego City Council will repeal the ordinance that makes it difficult for it to build supercenters there, would like to open as many as a dozen stores there within the next five years.

    According to the story, “The company's vice president of public affairs Maggie Sans told City News Service that no building sites had been identified, but it was Wal-Mart's intent to have stores across the city. Sans says the proposed stores would range from smaller neighborhood markets of 30,000 square feet to superstores.”

    It was reported earlier this week that the City Council seems likely to repeal the ordinance because Walmart collected enough signatures to force a referendum on the issue; the Council seems more inclined to simply repeal the ordinance rather than spend more than three million dollars that it doesn’t have on a special election.
    KC's View:
    Didn’t waste a lot of time on that one, did they?

    And I’d be willing to bet that if the City Council vote goes Walmart’s way on Tuesday, it’ll probably take until Thursday to identify some building sites.

    Published on: January 28, 2011

    The other day, MNB took note of a New York Times story about a Brooklyn Duane Reade store that “has Fire Island Lighthouse Ale and eight other beers on tap, with growlers — refillable glass bottles — lining the walls. Uniformed clerks-cum-beer-experts fill the growlers and conduct tastings only — sorry, no pints served. Behind a bar, a large walk-in refrigerator stocks common national brands as well as local, craft and imported beers.”

    Well, now we have a story from the Chicago Tribune about Walgreen - which owns Duane Reade - rolling out its own private label beer, Big Flats 1901, which it will sell in markets where it is legally allowed to do so.

    Big Flats 1901 carries a suggested retail price of $2.99 for a six-pack of cans and $11.49 for a 24-pack.
    KC's View:

    Published on: January 28, 2011

    The National Retail Federation’s 2011 Valentine’s Day Consumer Intentions and Actions Survey, conducted by BIGresearch, reports that “the average person will shell out $116.21 on traditional Valentine’s Day merchandise this year, up 11 percent over last year’s $103.00. Total holiday spending is expected to reach $15.7 billion.”

    According to the survey, “Having cut back on spending in recent years, couples this year will spend an average of $68.98 on their significant other or spouse, up from $63.34 last year. Even family pets will be feeling more of the love this year. The average person will spend $5.04 on their furry friends, up from $3.27 last year. Consumers will also spend an average of $6.30 on friends, $4.97 on classmates and teachers, and $3.41 on co-workers.”

    The report goes on: “The survey also found spending across the board is expected to be up this year. Consumers will shell out $3.5 billion on jewelry this Valentine’s Day, up from an estimated $3.0 billion last year. Clothing ($1.6 billion vs. $1.5 billion in 2010) and dining out ($3.4 billion vs. $3.3 billion in 2010) will also be popular gift options. Additionally, celebrants will spend $1.7 billion on flowers, $1.5 billion on candy and $1.1 billion on greeting cards.

    “As usual, men will spend the most on Valentine’s Day gifts. The average man plans to shell out more than twice as much ($158.71) as the average woman ($75.79).”
    KC's View:
    Gonna save a lot of money this year.

    No classmates or co-workers to spend money on for Valentine’s Day. (No, Sansolo, I’m not getting you anything.)

    I refuse to buy holiday presents for Buffett, my dog.

    Mrs. Content Guy and the Content Daughter probably will get something. But that’s it.

    Published on: January 28, 2011

    • The Chicago Tribune reports that “Meijer continues to expand its footprint in the Chicago area and edge closer to the city of Chicago. This summer it will open a store in Melrose Park and this week, Berwyn’s City Council approved plans to locate a Meijer store at the southeast corner of Cermak Road and Harlem Avenue, a store that will create 100 jobs ... Grand Rapids, Mich.-based Meijer, which entered the local market in 1999, has 13 stores in the Chicago suburbs, including two of its smaller “new format” stores that opened in Niles and Orland Park last year.”

    • The New York Times reports that Kellogg Co. is advertising its new Crunchy Nut cereal solely on the basis of its taste - and not for its nutritional or lifestyle-related benefits.

    “Acceptable taste is necessary for any brand, but this is the high end of taste, taste as good as it gets for cereal,” said Doug VanDeVelde, senior vice president of marketing and innovation at Kellogg’s. “This is the cereal for people who want the ultimate, super-duper taste experience.”
    KC's View:
    Maybe I’m just getting old and cranky, but I’ve decided lately that “acceptable taste” isn’t good enough. It’s the old “life is too short to drink cheap wine” philosophy.

    Published on: January 28, 2011

    Crain’s Chicago Business reports that “Jewel-Osco President Keith Nielsen, who started his career as a clerk at a Jewel store on Chicago’s North Side, announced today that he will retire at the end of the fiscal year on Feb. 28.

    “He will be succeeded by Brian Huff, the senior vice president of specialty retail for Supervalu, the parent company of Jewel-Osco. Huff will start his new role on Feb. 7.”
    KC's View:

    Published on: January 28, 2011

    Got a number of emails yesterday regarding our story about how Arkansas supermarket chain Harp’s created a little bit of a controversy by covering up a magazine rack that featured an Us Weekly issue featuring singer Elton John, his partner David Furnish, and their new adopted baby.

    The card in front of the magazine read: “Family Shield. To protect young Harp’s shoppers.”

    Someone took a picture of the “shield,” it made it onto the internet, and suddenly the controversy went viral and Harp’s was getting phone calls questioning why it would cover up the picture of a mainstream singer who, it should be noted, recently performed at Rush Limbaugh’s fourth wedding.

    Kim B. Eskew, president/COO at Harp’s, said that the shield was only put in place in one store, and the decision now has been reversed.

    My comment:

    Lesson number one is that even a single move by one store manager can instantly become a much bigger deal because of the internet. You may not like it, but there isn’t much you can do about it. One of the thing you have to tell your people is that they have to factor this kind of thinking into their decision-making process.

    Lesson number two, I think, is this. When I was a kid, if I saw a sign saying that it was there to protect me from seeing something, the first thing I would do is look behind the sign. (I once got into trouble during a class trip to FDR’s home at Hyde Park, NY, when I went up the stairs past a sign saying “do not enter” because I was curious what they did not want me to see.) I would expect no less of my children.

    There are a lot worse things kids could see than picture of two people in a committed relationship raising a family.

    One MNB user wrote:

    Sometimes the stores can’t win! Customers complain about the cover being to tantalizing or provocative. Then the management reacts by covering it up, and then some one else gets their panties all wadded up.  I believe it would have been easier to pull the offending magazine, pretend you sold out. Some battles just aren’t winnable.

    I still find it amazing that anyone would find that rather benign cover to be tantalizing or provocative. But that’s just me.

    Another MNB user wrote:

    Really…sometimes it seems no matter what a person does, it  offends someone.  In this case, who is more important to this store, the first people to complain or the “Internet connected” people to complain? They both are! But, because of the power of the Internet…the “Internet connected” person’s  opinion counted more than those that did not go to the Internet with their complaints. Could this person who went to the Internet, and not to the store manager, be considered a bully? I don’t know either. What about the store manager; he thought he was doing the right thing for his complaining shoppers…only to have HQ tell him to reverse his decision. How does this make him look to the original shoppers that complained? It’s not so simple!!!

    MNB user Geoff Harper wrote:

    I followed the Harps story with interest, and not because my name contains “Harp”.  I was not familiar with Harps, since they are in Arkansas and two neighboring states, while my experience was in New England.  It seems to me that Harps responded quickly and correctly.

    In my former life, we used magazine covers to obscure all but the title of selected magazines (Cosmo for one), in response to customer complaints about what they wanted their children to view at checkout.  We did NOT put any words on them, for the reason that you cite – encouraging curiosity.

    I found the Harps website very interesting.  They have been employee-owned for about ten years, and the employee-owned stock has quadrupled during that time.  Their website specifically says that they compete successfully with Wal-Mart – whose HQ happens to be a few miles down the street.

    It struck me as a great example of how to motivate employees, and an example of confidence in one’s mission.  Good story.

    Also got some email regarding Michael Sansolo’s Eye-Opener yesterday, in which he asked why, in the 21st century, the US Congress was reading President Obama’s State of the Union address on paper, instead of on iPads, which would have been a powerful statement about technology and innovation. (Plus, wildly entertaining, since a lot of those folks probably have no idea how to use one.)

    One MNB user wrote:

    Nice job on today’s Eye-Opener. It truly is by definition an eye opener.

    I have watched numerous state of the union addresses and this was the first time I took note of this “read along” or “read ahead for that matter” behavior. Perhaps it was because of the new seating arrangement that the cameras were showing more of the crowd or some other reason I’m not sure. But for whatever reason it became a more obvious behavior to me. I found myself becoming more disturbed by it the more I saw it. I simply found it to be such a disrespectful site to see. This from what we consider “leaders” of our democracy. Are these people simply lacking in the art of listening and what it means to afford anyone, let alone the President, the time and effort to be heard? Apparently and arrogantly not!

    Ok with that said, you could not be more right regarding what all this paper is costing all of us. That is something that can and should be addressed. But I think the electronic alternative under specific circumstances could lend itself to even less “listening” to one another at a time when listening to one another counts the most.

    I have sat in too many meetings where Blackberries were far too often the focus and distraction of VPs and Directors, in a word disrespectful. Most of us would not condone such behavior from our own children at the dinner table or a family gathering. Yet it appears to be acceptable to some companies to allow this behavior in a room full of people that are being paid to attend a meeting.

    I would personally prefer to see an empty chair with someone’s name on it, be it in a conference room or the House of Representatives, then an empty suit sitting there reading, simply full of self importance.

    IMHO, there needs to be boundaries for the time and place for paper and electronic devices. We must not lose our ability to connect as human beings and the first and primary way we do this is by listening to one another.

    All legitimate points ... except that it is not always accurate to say that people are distracted by their iPads, Blackberries and other gadgets. There is an entire generation that uses them to take notes - just because they are not looking up does not mean they are not paying attention.

    We all have to be careful about making presumptions that say more about us than they do about the people and behavior we are observing.

    MNB user Todd Toombs wrote:

    If they all had iPads instead of printed notes, what would they have the President sign as he is leaving the chamber? 

    Slightly off your main point, but whether Republican or Democrat, it is ridiculous to me that we treat our public-servant-in-chief like a rock star.  Fawning acolytes crowd the aisle trying to get him to sign their speech notes, shake his hand, or touch the hem of his garment.  To his credit, President Obama at one point was confronted with some sort of a picture that one lawmaker wanted him to sign and he refused.  The picture was hastily replaced with the speech notes, which he then signed.  But, the whole process is just undignified and looks more like the Oscars than an address to Congress.  There is a big difference between respect for the office and adulation.  If we continue to treat the President like a monarch, the more he or she will feel entitled to act like one.

    We actually got a lot of email yesterday from folks suggesting that the reason the printed copies are necessary is because people want to get them signed.

    Which may be true.

    But if I were Obama, here’s what I would say:

    “Innovation is more important than memorabilia that a number of Congressmen probably are going to put up on eBay.

    You want my signature? Send me some damn bills that I want to sign.”

    Got a lot of email about our report on Jimmy Buffett’s misfortune in Australia, where he fell of the stage during the final encore of a concert, cracked his head, and ended up in the hospital overnight.

    One MNB user wrote:

    Sing to the tune of “Margaritaville”:

    Blew a big stage flop, landed on head top.
    Cut short my concert, had to send the crowd home.
    But there’s booze in Australia,
    And if mosh pits should fail ya,
    I’ll sing all my songs with a bump on my dome.

    MNB user W. Patrick McSweeney wrote:

    It was Jimmy’s changes in altitudes in a southern latitude.

    From another MNB user:

    May have been looking for his lost shaker of salt or his lost verse “Old men in tank-tops…..”

    MNB user Randy Scott wrote:

    “Blew out a flip flop…Stepped on a pop top…” and you know the rest….

    In my commentary, I wrote:

    Not sure if this was real or not, but a friend told me that Buffett’s manager was quoted as saying, “Some people say that there was a woman to blame, but it was his own damn fault.”

    MNB user Colleen Ulinger wrote:

    While I’m sorry to hear of Jimmy’s fall and injury, I’d like to say thank you, Kevin, for bringing a little levity to my day.

    And MNB user Krag Swartz wrote:

    Isn’t that line your own reality?  It explains the typos, dated references and clunky video efforts.  Your use of it was clever and cracked me up!  And it’s definitely in the running for the most memorable Kevin Quote of 2011.

    I guess if I have to choose, I’ll take being funny ... even if my efforts are perceived as being somewhat lacking.

    Dated references? Jeez...
    KC's View:

    Published on: January 28, 2011

    There aren’t many events that are so seared into my mind that I remember them as if they were yesterday.

    But that’s precisely the way I recall 25 years ago today.

    I was working for a trade magazine at the time, and my editor, Bob Hughes, and I were in Louisiana, to work on a series of profiles we were doing. We were at our motel, getting ready to leave for an interview, and I was idly watching the television - and saw the liftoff and, a few moments later, the explosion of the Challenger space shuttle.

    This was pre-internet, pre-24 hour news cycle. The only place to get up-to-date, immediate information was from television and radio ... and I remember vividly how difficult it was to go do the work, simply because I didn’t want to be disconnected from the flow of information. And I remember being strongly affected by the explosion; like many people, if somehow felt personal, as if our world view had somehow been irretrievably altered by the shattering of innocence.

    I’m not sure many of our kids will ever have that moment. One of the negative byproducts of the internet age, I fear, is a kind of abiding cynicism about life - they’ve seen it all, they’ve heard it all, they can see it or hear it again on demand, and not that much seems to surprise them.

    That’s too bad. Because those moments of complete and utter shock are, I think, important. They are a learning process, they are part of our personal maturation. And there’s nothing wrong with a little innocence, especially when you are young.

    That’s gone now. I remember it slipping away a bit on a Sunday in November in 1963, when my dad and I were watching television and saw Jack Ruby shoot Lee Harvey Oswald. And I remember it happening 25 years ago today.

    It was a distinct possibility that Company Men, the new film from John Wells, would be a well-meaning but plodding polemic about what happens to middle-aged guys who lost their jobs in the Great Recession. But it is much better that, owing in part of some terrific performances by Ben Affleck, Tommy Lee Jones, Chris Cooper and Kevin Costner, each of whom turns his character into a full-blooded person, not just a plot point. Maybe I should have expected more going in; Wells, after all, was the guiding force behind both “ER” and ‘The West Wing,” both intelligent and television dramas with an eye for both content and context. I suspect that I may have been influenced by the fact that this is not the kind of movie that Hollywood makes much anymore, and Company Men - which, in essence, is the other side of Up In The Air.

    The thing is, Company Men is painful to watch, and I’d be willing to bet that there hardly was anyone in the theater who did not know someone - perhaps many people - who went through what the characters do in the movie. In that sense, the movie gets it absolutely right. It may not be as inventive or as delightful as Up In The Air, but it shows fidelity to the emotional truth of the current economy - that we live in a world where too many companies succeed not by making things, but by making money, and that this has led to a ”greed is good” environment that lionizes all the wrong things.

    As for the actors, Affleck continues to demonstrate that F. Scott Fitzgerald was wrong, that there are, in fact, second acts in American lives - he is compelling and utterly believable as a man who finds his career over almost before it has started. Jones is great, as always - there is just so much world-weariness behind those eyes that you understand his character before he says a word. Cooper is also terrific in a relatively small role; there is a moment when he comes face to face with his competition in the job market, and it is heartbreaking. And finally Costner is excellent as Affleck’s blue-collar brother-in-law, a carpenter who builds and renovates houses, and who sees the world of conglomerates and stock options with considerable cynicism. They all look like guys with lived-in bodies, not Hollywood stars, and that helps the film’s veracity.

    There are many business lessons in Company Men - about how we treat ourselves and our employees, and about we view the nature of work. Painful to watch, at moments, but worth the time.

    Boy, do I have a wine for you this week - the 2008 Turley Zinfandel from the Dusi Vineyards on California’s Central Coast - it was marvelous and mouth filling, served with a fabulous steak and garlic mashed potatoes. Unbelievably great. It is a little pricey - I’ve seen it listed on the internet for between $50 and $70 per bottle - but for a special occasion, it is just wonderful.

    This week, I had the opportunity to spend some time with Associated Wholesale Grocers’ Kansas City division at its Excellence in Merchandising Awards Banquet, and I want to both thank them for the hospitality and congratulate them for having such aggressive and ambitious members. I was impressed by the folks I met and the enthusiasm I saw for the art and science of retailing. It’s a jungle out there, but these folks seem more than up to the task.

    That’s it for this week. Have a great weekend, and I’ll see you Monday ... by which time we probably will have been hit by another couple of snowstorms and another foot of snow.

    Until then....Slainte!
    KC's View: