business news in context, analysis with attitude

Published on: February 24, 2011

by Kevin Coupe



Content Guy’s Note: Below is a commentary on the same subject as the video piece, but it isn’t word-for-word the same. You can look at both, or either...it is up to you. I look forward to hearing from you.

I was in Dallas this week, speaking at the annual Meat Conference run by the Food Marketing Institute (FMI) and the American Meat Institute (AMI). When I arrived on Sunday night, I was hungry. No surprise, I’m almost always hungry.

So I did a little searching on my laptop, and found a Tex-Mex place called Iron Cactus within walking distance of the hotel. I strolled over, pausing for a few minutes on the way to stare at the outside of the Texas Schoolbook Depository, a place that always manages to fill me with dread every time I see it, as if passing a dark graveyard with bad memories.

Iron Cactus, a three-story, glass-walled restaurant a few blocks from Dealey Plaza, was pretty busy. But I managed to secure a small bar table on the first floor, where I settled in with a margarita and the menu, watching the action all around me.

Phillip Taitel, the manager on duty, came over to me and said that he was short of waiters, but that if I didn’t mind, he’d be taking care of me. Fine with me, and we started chatting about the menu.

I asked a couple of questions, and he finally looked at me quizzically and asked: ”Are you from Texas?”

I was a little surprised by this, since as someone who was born in Greenwich Village, raised outside New York City and lived most of his adult life in southern New England, I don;t actually sound like JR Ewing. But I resisted the impulse to make a wisecrack, and said simply: “No.”

My reticence was rewarded. (Fans of Tony Kornheiser will understand if I describe what happened next as a “Mr. Kevin moment.”)

Phillip said, “In that case, here’s what you’re going to have. Start with the tuna ceviche, and then follow that up with the chicken fried steak.”

I told him that I didn’t recall seeing chicken fried steak on the menu.

“It isn’t,” he said. “We actually had to take it off the menu because it got too popular - we didn’t have enough industrial fryers in the kitchen to handle the demand. But if you want it, we’ll make it for you.”

I had only a moment’s hesitation. “Is it really that good?”

“Tell you what,” he said. “If you don’t like it, I’ll pay for it.”

I needed to know nothing else. And the result was wonderful - ceviche that was spicy and refreshing, and chicken fried steak that was hearty and artery-hardening. (I tried to be good. I ate about half the steak, had one forkful of mashed potatoes, and all the broccoli. A heart attack before going on stage simply would not have been a good idea.)

Here’s the lesson. Philip was not just a restaurant manager, but an advocate. And better than that, he was an advocate with a narrative, which inspired trust and a leap of faith on the part of a soon-to-be grateful customer.

That’s what good marketers do. They don’t just put the product out there, slap a price tag and/or a bar code on it, and then let the customer do all the rest of the work (content in the knowledge that a slotting allowance can cover a multitude of sins).

No, they create a story, they connect with the customer, and they turn a transaction into an experience.

This story is about chicken fried steak. But it doesn’t have to be.

That’s what is on my mind. As always, I want to hear what is on yours.

Published on: February 24, 2011

by Kevin Coupe

The Consumerist reports that a year after New York City decided to mandate that restaurants there post letter grades reflecting their health inspection results, the city’s Health Department is considering an expansion of the program that would put a bar code on the posting that would allow potential patrons to access more extensive information about the grade.

All the information is already availably online - the bar code would just make it far more accessible to anyone with a smart phone.

According to the story, “The city's Buildings Department is already putting bar codes on construction permits so people can access details about the project, the building and violations related to the property's owner.”

One MNB user pointed this story out to me and asked: “Why not have an app that would allow a consumer to snag the bar code off any food package and compare it to a database of all known recall/safety issues for that product or related product?

Which is a good question. And only the beginning. Because there also is no reason that those same codes could not provide shoppers with an enormous amount of information about a product - from nutrition to food safety to recipe ideas - that would be accessible in the store or in one’s own kitchen.

It is the very definition of transparency ... coming soon, in all likelihood, to a restaurant or shopping aisle near you.

Like it or not.

And that is our Thursday Eye-Opener.

Published on: February 24, 2011

Published reports say that Farm Stores Corp., which operates drive-through convenience stores in South Florida, has launched Farm Stores iExpress, which allows shoppers to place orders for a full grocery shop online and then pick up the products when going through the drive-through.

The fulfillment is being handled through Farm Stores’ ownership of Gardner’s Super Market, which allows them to go beyond the traditional c-store offering.

Helping to run the Farm Stores effort is Senior Vice President Thomas O’Connor, who formerly was President of Publix Direct.

Published on: February 24, 2011

HealthDay News reports on two new studies out of the University of Calgary saying that moderate alcohol consumption may protect against heart disease.

According to the story, “One team at the University of Calgary reviewed 84 studies that examined alcohol consumption and heart disease, and concluded that people who drink alcohol in moderation (one drink or less per day) are 14 percent to 25 percent less likely to develop heart disease as those who don't drink alcohol.

“Another team reviewed 63 studies and found that moderate consumption of alcohol (which the researchers defined as up to one drink a day for women, and one to two drinks a day for men) significantly increases levels of ‘good’ cholesterol, which has a protective effect against heart disease.”

Published on: February 24, 2011

CNBC reports on a National Retail Federation (NRF) survey saying that “more Americans are planning to splurge a little if they receive a tax refund this year.

About 13.2 percent of Americans said they will spend their refund on a big ticket item such as a television set or furniture, up from 12.5 percent last year. About 11.9 percent are earmarking the money for a vacation, compared with 10.0 percent last year who eyed a trip.”

And almost a third of Americans say they will spend their refunds on “everyday items.”

So the good news for those looking for signs of an economic recovery is that a sizable percentage of people’s tax refunds will get put back into the economy.

Not everybody will do so, however - the study also says that about four out of ten people will put their refunds into savings...slightly more than last year.

Published on: February 24, 2011

The Wall Street Journal reports that Barnes & Noble management is considering the acquisition of selected locations around the country being shuttered by rival Borders, which has gone into bankruptcy protection and is closing 30 percent of its stores.

According to the story, “The disclosure was greeted with some pointed questions from analysts. Barnes & Noble said today it is suspending its stock dividend to leave room to take advantage of ‘market opportunities.’ Analysts wondered why Barnes & Noble would want to spend any more money on its bricks-and-mortar retail business, where physical book sales are declining.”

Barnes & noble CEO William Lynch said that “Barnes & Noble’s stores continue to be very profitable – unlike the situation at Borders, which said it is losing $2 million a week on the store locations slated for closure. Barnes & Noble executives also said the majority of the company’s Nook e-reading devices are being sold at its retail stores, which have prominent displays for shoppers to try out and buy the e-readers.”

Published on: February 24, 2011

The New York Times columnist and blogger this week comes down on McDonald’s new oatmeal offering, writing that “from a marketing perspective, they can do almost nothing wrong; from a nutritional perspective, they can do almost nothing right, as the oatmeal fiasco demonstrates.”

Bittman writes that “in typical McDonald’s fashion, the company is doing everything it can to turn oatmeal into yet another bad (nutritional) choice. (Not only that, they’ve made it more expensive than a double-cheeseburger: $2.38 per serving in New York.) ‘Cream’ (which contains seven ingredients, two of them actual dairy) is automatically added; brown sugar is ostensibly optional, but it’s also added routinely unless a customer specifically requests otherwise. There are also diced apples, dried cranberries and raisins, the least processed of the ingredients (even the oatmeal contains seven ingredients, including ‘natural flavor’).

“A more accurate description than ‘100% natural whole-grain oats,’ ‘plump raisins,’ ‘sweet cranberries’ and ‘crisp fresh apples’ would be ‘oats, sugar, sweetened dried fruit, cream and 11 weird ingredients you would never keep in your kitchen’.”

Of course, Bittman doesn’t focus all of his vitriol on McDonald’s:

“Take, for example, Quaker Strawberries and Cream Instant Oatmeal, which contains no strawberries, no cream, 12 times the sugars of Quaker Old Fashioned Oats and only half of the fiber. At least it’s inexpensive, less than 50 cents a packet on average. (A serving of cooked rolled oats will set you back half that at most, plus the cost of condiments; of course, it’ll be much better in every respect.)”

This, of course, is the ultimate irony: “Real oatmeal contains no ingredients; rather, it is an ingredient. As such, it’s a promising lifesaver: oats are easy to grow in almost any non-extreme climate and, minimally processed, they’re profoundly nourishing, inexpensive and ridiculously easy to cook.”

Published on: February 24, 2011

The Montreal Gazette reports that Loblaw plans to open four Joe Fresh clothing stores in the US this year, including one in New York City.

Joe Fresh is a private label “cheap chic” clothing brand designed for frugal men and women, according to the company.

Published on: February 24, 2011

• New Jersey-based ShopRite said yesterday that it is now the only grocery retailer with a presence on three major mobile spaces - iPhone, Android and mobile website. The technology, powered by MyWebGrocer, will allow ShopRite customers to access online specials and create digital shopping lists right from their phones.

According to the announcement, “the mobile application is built specifically for each platform, in order to provide the best user experience. Within the app, customers can easily look at digital circulars to see all the items on sale that week at their local store, and select items to add to their online grocery-shopping list. Grocery lists can be constructed from a desktop website as well, which syncs with the mobile apps and mobile website. Furthermore, consumers can click on product-sponsored advertisements at the bottom of the app and add these items to their list.”

• Harris Teeter announced that it is waiving its service fee on all online shopping orders through the end of the month. According to the announcement, “Customers can place orders online through the store’s express lane shopping service, and a team of personal shoppers will pick up the items and have them ready at a designated pick-up time.

“The service typically costs $4.95 per trip, but Harris Teeter is waiving the fee through next Tuesday.”

Full disclosure: MyWebGrocer, which provides online shopping services to both ShopRite and Harris Teeter, is a longtime and valued MNB sponsor. But that’s not going to prevent us from mentioning them in editorial coverage when we think the story merits it.

Published on: February 24, 2011

The Wall Street Journal reports that HJ Heinz is about to start making ketchup bottles out of so-called “plant packaging” that uses less petroleum, which is seen as an economically advisable approach at a time when oil prices are rising. The packaging was developed by Coca-Cola and has been used by the soft drink company since 2009 for roughly three percent of its bottles around the world.

According to the story, “William Johnson, Heinz's chief executive, said his company is interested in partnering with Coca-Cola in others areas, including procurement, supply chain and health and wellness.”

And Coke CEO Muhtar Kent said that his company “is in talks with other food companies about sharing the technology, but didn't provide further details,” the Journal writes.

Published on: February 24, 2011

• Crain’s Chicago Business reports that Walmart plans to build a 27,000 square foot Neighborhood Market store in the Presidential Towers in the city’s West Loop.

The store is just one of dozens that Walmart is planning to build in Chicago since winning approval from the City Council to expand its presence in the Windy City.

Published on: February 24, 2011

• The Kroger Co. announced that Cindy Holmes, the company’s Assistant Treasurer, has been appointed Director of Investor Relations.

And, Kroger said, Carin Fike, its director of investor relations, has been appointed Director and Assistant Treasurer.  

Both of these changes will be effective March 6, 2011.

Published on: February 24, 2011

Got a few emails yesterday regarding Wegmans’ announcement that it will freeze prices on 40 oft-purchased private label products through the end of 2011.

One MNB user wrote:

Wegman's has finally brought a cool economist's tool to the table of grocery marketing: arbitrage!  To the consumer, it looks like Wegman's is holding the line and delivering on an identified need.  But I suspect that the specific items that are placed in this program are selected by economists who compare historical performance against highly correlated trends, such as weather, to determine which basket of products might actually return a higher margin through "fixing" a price.  Sure, some will go up and cost money, but others are likely to go down.  Guessing right (and it's not a game!) could have the dual benefit of making the customer happy and delivering a profit.

MNB user Jim DeLuca chimed in:

Wegmans is really a leader in the grocery business.   I was pleased to note their announcement yesterday about the 40 staple products that they will be keeping the prices low for the remainder of 2011.

My natural foods coop, Abundance Cooperative Market, in downtown Rochester (Wegmans' home town) started our BASICS program of 38 items (flyer attached) on October 1, 2010.

Now just because we did it first and Wegmans does send people into our store doesn't mean they have copied us...

MNB user Peter Lerczak wrote:

Wegmans always seems to be 3 steps ahead of everyone. I assume most consumers are already feeling the pinch of rising costs, and if they haven't noticed yet, they will. The rising costs of everything from gasoline, to clothing, and food will be a major topic in 2011. Wegmans is ahead of the curve on this and the advertising behind it will leave a lasting impression in shopper's heads. Working in western New York in the food marketing business, I sometimes get tired of all the praise that is showered on Wegmans, but 99% of the time, it is deserved.




Regarding the announcement from Walmart that it plans to start opening Express stores - smaller than 30,000 square feet - later this year, one MNB user wrote:

First for all who grew up in the food business, small stores are very hard to run and to make a profit in. Second I hope they don’t lose anymore focus on the core 2500+ Supercenters which need help. Last they seem to be in quite fog and scared off all formats. They tried the “Fresh and Easy, Neighborhood Market, etc” and all have not gone so good. Now they are adding back items, but in the “ dollar store class” of trade. Third their CEO state they would NOT replace the position of CMO but have and with a person who has little experience in the part of the business that is killing them (hard and soft lines). Walmart will have a tough time internationally as they are so big getting into countries will be tough and here again their track record is not so good. Last let’s not forget that their shareholders meeting is coming up soon and if the numbers don’t improve I’d be looking for some leaders to be gone.

MNB user Craig Ryder wrote:

Walmart knows it must tread carefully here - ‘Express’ formats can be a huge drain on home office resource. For an organisation that’s been reared on ‘cookie cutter’ Supercentre openings, new and smaller formats can take an awful lot of effort for relatively small sales return.

There are two drivers of real, sustainable and scalable success when creating smaller formats: first, make sure ranges are locally tailored via a reliable analytics based tool and second, ensure the store management economic model is robust as too many salaried associates can kill the bottom line in smaller footprints. Final point – don’t spend long worrying about the branding. For 99% of customers their local outlet is the brand in their eyes – they soon come to learn and appreciate what their store offers.




We continue to get email concerning the Wall Street Journal story about the sorry state of American males between the ages of 20 and 30, suggesting that many of them are in a pre-adulthood period that is sort of like adolescence, but older - they’re putting off marriage and family, they’re enjoying their relative lack of responsibility to a greater extent than previous generations, and they often have unreasonable expectations for their careers that don’t match up to their abilities and/or experiences.

Particularly chagrined about this kind of limbo state, according to the Journal, are American females between the ages of 20 and 30, who tend to be more focused, more mature, more willing to take on the responsibilities of marriage, family and career ... and more willing to do so on their own if they can’t find a man who measures up to their expectations.

One MNB user wrote:

As the father of two male teenagers who are attempting to find their way in the world, I read the WSJ article with great interest.   Ironically, the last movie I attended in a theater alone with my wife was "Knocked Up" (which probably explains why we haven't gone to a theater to see a movie since).   Knowing that both of our sons will likely be leaving our home for college within the next two and a half years, we have found ourselves often second-guessing the decisions we have made raising our sons leading up to this point in time.   Anyone who knows us is aware that we would never be confused with a couple who has attempted to "become friends" with their children during their adolescence.   Our kids understand that we are in charge and they have to do as they are told or face consequences….and it's often not fun for any of us.    They continually second-guess the limitations we put on their driving ability, television watching and computer usage and can't understand why we don't let them play video games at home or have assigned chores each week.

My wife and I talk almost every day about the decisions we have made throughout our marriage and in our attempts to raise our two sons.    We were married at 21 and 18, respectively, and waited 11 years before having children.   (Working in retail management and seeing children at their worst everyday had me convinced that I would never want to be a dad…..but the current president of a large Midwestern grocery retailer who was a friend of mine at the time convinced me that I was making a grave error by not having children.)   As a condition of getting my in-laws to approve our marriage, I promised them that I would make sure my wife earned a college diploma.   It only took us nine years to fulfill that promise and we truly appreciate what both of us had to do to work our way through college with virtually no financial aid whatsoever.   In our 28 years together we have tried to show our boys the meaning of laughing, loving, and showing mutual respect for one another.

Our sons have been given an upbringing that in no way resembles how my wife and I grew up based on our lifestyles then and now.   They have been given opportunities that we had no idea existed as teenagers and we believe the future for both of them is very bright.   At the same time, they see two parents who work in interchangeable roles within the family where both have the ability to make dinner, do the laundry or yard work, or work on the car.   They understand that both parents have made it a priority to be available for our children and that we have both given up financially lucrative opportunities in trade for having more time to spend with them.   We have made it clear to both of them that they will be obligated to have "skin in the game" when it comes to financing their college educations; we have saved money for both of them to attend college, but they understand that they will have to provide one-half of the funds themselves through either student loans or employment or both.   If they can earn scholarships to reduce that cost, it will not reduce the "one-half" of the expenses that we are committed to paying, thus encouraging them to focus on their grades if they are not employed outside the home.
 
Despite all these efforts, we realize that our sons could end up meeting the description of the "pre-adults" in the WSJ article.   While it will be disappointing to us if that occurs, we will at least be able to look in the mirror at ourselves and know that we love our boys and did the very best we could as parents……and that some things are simply beyond our control.  
 
It will be interesting to see what the next decade or two will bring for all of us.

MNB user Bernardo Aguiar wrote:

This is a first for me when it comes to responding or emailing my views to ANY type of blog. This is in response to the piece about "young men" putting off responsibility.

There were a few users that made very good points.  However, I have my own take on this... I AM a "young man" at 23 years old, soon to be 24. I do have financial stability and independence. Also, I consider myself a level headed and mature person (within reason). However, I know I'm not ready for a family and nor do I want a family at this age or in the near future. I have a lot of friends getting married at my age; good for them. However, you of all people should be aware of the ever changing environment around us... Getting married young just doesn't make sense for everyone. I want to enjoy some of my new found money, I want to be able to travel with friends, etc. Plus, have you SEEN divorce rates lately? If anything, it is responsible of us "boys", as one user put it, to wait until we are ready to get married.

Additionally, happiness is defined by the individual and no one else. Maybe marriage isn't what makes the "new school" happy... You are always talking about adapting and the new trends... maybe this IS the new trend. Definitions can morph; what's to say that "happiness" and even "family" mean the same anymore.

Oh, and yes, we do have high expectations for our careers. But doesn't that just mean we have goals and are willing to work toward them?? I know I am.

MNB user Samuel Copeland wrote:

I am thrilled to see that you took time to further evaluate your stance on the young men of today.  It befuddles me why some of the items listed in the article are so frowned upon and looked at as “problems.”  Of course young men are spending more time on our careers at a younger age, putting off other “traditional” responsibilities of the time. We are a generation of men and women who have seen our parents worked to death for 30+ years, often for the same company, only to be dissatisfied with the place they showed so much loyalty and in many cases demoralized for not being valued. Of course I want a career and I want job satisfaction and I want to be HAPPY! That does not seem to me to be selfish or immature; it seems to me to be human. It is the things we sacrifice for personal satisfaction that we need to be cautious of, not the pursuit itself. To see how easily someone can be laid off after 30 years of dedicated service is a real eye opener to company loyalty.  It is important we gain a breadth of skills and knowledge to put us in a situation where even if we are laid off, we have the capability to find something new, and preferably something we enjoy doing.

I don’t know what portion of the young men population I can speak for with this, but in my opinion having a good job and showing ambition (moving around the country, working hard, changing jobs) are two things that appeal to the opposite sex (In the interest of full disclosure, most of my ex girlfriends would probably contest I know nothing about what the opposite sex wants).  It almost seems like it is not counter-productive to finding a wife and having kids, it is simply another advantage used to compete.

On the notion of waiting until significantly later in life to get married, there are two things that stand out to me.  One, we are living in a time where the divorce rate is staggeringly high, or at least it is portrayed to be staggeringly high.  That is a real incentive to make sure you settle down with the right person. Secondly, the longer we wait, the more financially secure we are.  While that may not seem to be that important and “all we need is love,” having money sure can make things easier.  Why put the strain of money problems on your marriage in addition to everything else you are dealing with?
 
Just my two-cents, but what do I know.  “I might as well just have another beer.”

MNB user Hortencia Espinoza wrote:

I read this story and my first thought was wow, how in a few years, things have changed.
 
But I wanted to hear what the younger generation had to say about it. I decided to call the 12 boys in my confirmation class, ages 15-18, all in high school, to get their opinions.
This is what I got:

Almost every single guy mentioned that they didn’t like the term “pre-adult”. They are still young men. Men being the key word. They didn’t understand why they were being downgraded for taking their time and realizing that not everything has to be done now. Times change. One young man mentioned that what defines a man changes every 100 years or so. Epitome of a man used to be a Gladiator. Another time in history he was a Conquistador. Another time in history he was an industrial giant millionaire.

Several of them mentioned that it’s not guys being childish or not wanting to mature. It’s that now they can truly have a partner that can do the same things they do and carry the finances with them. The idea that the man must provide and must start providing young doesn’t exist anymore. It’s nothing they did. It’s just that girls are getting better at everything.

A couple of other guys mentioned now that girls are smarter and being allowed by our society to explore every avenue they want to, guys have a much larger pool to pick from. Why settle for the first nice girl you meet with whom you share a few interests with? Give it a few years and you will meet a girl that you can keep up with and has much more interests in common with you. And since she shares more interest, she also shares the notion that they don’t have to be engaged at the year mark and married a year after that. (The young man who mentioned it said that is sooooooooo ‘80‘s.)

One of my 18 year olds mentioned that for him marriage isn’t an option until he knows 100% he’s ready for it. He’s 5% there. If he knows marriage isn’t right for him in the near future, kids are even further away from the picture. He believes that marriages have been failing because as a society we believe it’s what we HAVE to do so we rush into it. But men still had not gotten a lot of stuff out of their system. They did what they were supposed to do, not what they wanted to do. So the cheating and disrespect happened. His generation has said no more. I will marry when I am ready.

The brother/ sister twins (she ear hustled and got all into the conversation) said that boys are just finally getting what everyone has been telling girls to do for so long; go out and learn, enjoy life and live. It’s just their time, their turn to do the same. They can do these things because girls are standing on their own two feet and they are not required to provide anymore. The days of helpless women are long gone. Men can now learn to cook and enjoy food. With that comes learning how to shop. They can dress nicely and are not mindless buying machines. They want the deals and are finally learning value.

In not the exact verbiage but the same gist each said being a man is no longer defined as the sole bread winner who hangs out in the garage and fixes everything that needs to be done and expects his kids washed and dressed with dinner on the table. He is the man who got married at 30 with the woman he met at Whole Foods or Trader Joes. He comes home at the same time as his wife. They both build the bookshelf. She bathes the kids while he makes dinner or vice versa. They are seeing the roots of this at home and are just building on it.

These 12 young men are amazing guys. All very open minded and willing to learn. All do above and beyond the community service that is required of them by their schools. They are all active in multi extracurricular activities. They are funny and don’t mind playing the goof balls. The “I’m too cool” attitude is not in any of them. The one thing I find interesting is the have a very very low tolerance for disrespect of any kind. They aren’t as “hard” as traditional men are seen.

Another MNB user wrote:

I have really enjoyed reading MNB and especially the article on the American Male between the ages of 20 and 30, since I am one.  At times I was frustrated with the comments by other readers as well as the article itself. I feel like shouting to the older generation telling them how much has changed. As many businesses have found that the game as well as the rules have changed.  Plain and simple, a bachelor’s degree is not what it used to be! Maybe we should change the name to a glorified High School Diploma. In order to be competitive in today’s world one must adapt, change, gain years of experience over night, learn business, technology, and be well cultured. Consider this, is my “new demographic” really to blame? Are we in limbo because we want to party or become Marketable? The business world has expanded I am on track to graduate with a Bachelor’s in Accounting and I have an internship as a Marketing Analyst. I travel as much as I can afford not to party, but to experience something other than our lush American Culture.

However, I feel like I must have more in order to compete, more experience more education more volunteer hours. Of course, as a MAN (I left childhood long ago) I only wish to become relevant in a career before even considering marriage. I would like to be able to provide for a family. I hear the older generation say that they got married out of High School got jobs and had kids. I understand that this was the norm for them. I also laugh at the thought of watching them attempt this today. Step into the world of a recent High School Graduate today and you will find that jobs are less than scarce.  Your family connections do not bear as much fruit as it used to. And, finally my competitive field is 10x bigger and also better than your field ever was or will be.

And MNB user Bill Gandy added:

Having a 17 yr old son who is only slightly interested in girls at an age that I was infatuated by the opposite sex makes this story realistic to me.  I'm blessed to have him but I know he is not like me because he doesn't have to be.

And that’s okay.