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    Published on: March 28, 2011

    by Kevin Coupe

    CNN reports that “young, religiously active people are more likely than their non religious counterparts to become obese in middle age, according to new research. In fact, frequent religious involvement appears to almost double the risk of obesity compared with little or no involvement.”

    According to the story, the study - done by the Northwestern University Feinberg School of Medicine - found that “those who reported attending church weekly, or more often, were significantly more likely to have a higher body mass index than those who attended infrequently, or never.

    The reason? Well, one theory is that churches rail against a lot of vices, but gluttony does not tend to be high up on the list (though it makes the top seven deadly sins). Another theory is that “more frequent participation in church is associated with good works and people may be rewarding themselves with large meals that are more caloric in nature than we would like." And a third theory is that churches tend to create a culture of eating, like with potluck suppers.

    I have long thought the problem with many people who think of themselves as religious is that they spend too much time on their knees, and too little time doing things with their hands and feet ... that the mark of real spirituality is converting those beliefs into action. And maybe even a solution to some small part of the nation’s obesity issue.

    And that’s my idea of a Monday Eye-Opener.
    KC's View:

    Published on: March 28, 2011

    The New York Times reports that Covette Rooney, the chief administrative law judge of the Occupational Safety and Health Review Commission, has upheld the $7,000 fine that was levied against Walmart after one of its employees was trampled to death of an unruly and bargain-seeking crowd on Black Friday in 2008. (Black Friday is the day after Thanksgiving, and the traditional beginning of the end-of-year holiday shopping season.)

    According to the story, “Wal-Mart had mounted an aggressive defense to overturn the $7,000 fine, causing OSHA officials to complain that the company had spent more than $2 million on legal fees in the case. OSHA officials said federal employees had to devote more than 4,700 hours of legal work in response to Wal-Mart’s effort to block the $7,000 fine.”

    Walmart said it plans to appeal the finding to a higher court, as it looks to contest the notion that “crowd trampling” is “an occupational hazard that retailers must take action to prevent,” as the Times describes it.

    David Michaels, assistant secretary of labor in charge of OSHA, replied to the ruling by saying that “this is a win for both workers and consumers. Today’s ruling supports OSHA’s position that, even in the absence of a specific rule or standard, employers are still legally responsible for providing a place of employment free of recognized hazards that are likely to cause serious injury or death.”
    KC's View:
    I understand that Walmart thinks it has a legal principle to fight for here, but I cannot help but think - and a lot of people probably would agree with me - that maybe the company ought to be thankful that its legal exposure is just seven grand on this one. (Though maybe if it accepts the fine, that opens the door to other actions.)

    It also seems to me that the statement, “Crowd trampling is an occupational hazard that retailers must take action to prevent,” doesn’t sound so outrageous.

    Published on: March 28, 2011

    The San Francisco Chronicle reports that in Arizona and Florida, legislators are responding to the decision by San Francisco’s civic leaders to ban the offering of toys in children’s meals that do not meet certain nutritional standards by proposing their own kind of ban.

    They want to ban cities and counties from passing their own bans, which are designed to impact the selling of things like McDonald’s Happy Meals to kids.

    According to the story, “Legislation recently passed the Arizona House to bar cities or counties from banning any kind of incentive offered by restaurants. That includes not just toys, but a very long and detailed list of other goodies including contests, coupons, trading cards, coloring books, admission tickets, ride tokens and crayons.” And Florida is considering a similar proposal.

    What makes this interesting is that apparently there have been no proposals in any city of county in either state to even consider a San Francisco-like ban.
    KC's View:
    The Chronicle points out - correctly - that the best criticism of the Happy Meal ban was done on “The Daily Show.” It doesn’t sound entirely unlikely that Jon Stewart and his gang will find this new development - or non-development - intriguing.

    You’d think these state legislatures would have better things to do. Like, for example, work on their high school graduation rates. Just for the hell of it, because I was curious, I checked to see what high school graduation rates are for these two states - and they are both below the national average of 70.06 percent - Arizona is at 67.13 percent, and Florida is at 59.56 percent (45th out of 50 states). Maybe this would be more worthy of their time and attention than thinking about banning bans that haven’t happened yet.

    Just a thought.

    Published on: March 28, 2011

    • Tomorrow is a big day for Walmart, as it goes before the US Supreme Court to argue that a class action lawsuit brought against it in the name of hundreds of thousands of women, charging that it has systematically discriminated against women in management, should not be treated as a class action, but instead should move through the justice system on a piecemeal, individual basis.

    If the court finds against Walmart and allows the class action to proceed, it could eventually cost the retailer billions of dollars, either through a settlement or if it is found guilty of unfairly denying women earned promotions and pay increases.

    • The New York Times is acting on its long-held desire to have stores in New York City “with the intensity, sophistication and checkbook of a full-fledged political campaign, hiring star political consultants, including Mayor Michael R. Bloomberg’s former campaign manager, producing expensive television and print advertisements and conducting polls.

    “And it is doing it with the kind of in-your-face aggressiveness that would make a New Yorker proud.”

    For example: “A glossy brochure it mailed to thousands of city residents appeals to their sense of autonomy, declaring: “You don’t ask the special interests or the political insiders for permission to watch TV. So why should they decide where you’re allowed to shop?”

    Walmart has failed in previous attempts, and as the Times notes, “The same forces are again arrayed against Wal-Mart, but this time the company believes conditions are more favorable. Now Wal-Mart is widely considered a better corporate citizen, environmentally friendly, with affordable employee health care plans. Company executives think they have earned their place alongside unionized stores in New York, especially since the city has become home to other big-box stores, like Target and Costco.”

    • Walmart announced over the weekend that a dozen of its Seiyu stores in Japan that have been limited to relief efforts since the earthquake and tsunami there two weeks ago are resuming “normal operations.” Another 10 stores are in the process of being reopened, the company said, while two other stores are covered in mud and will take “a long time” to get back into shape.

    Walmart has 371 Seiyu stores in Japan.
    KC's View:

    Published on: March 28, 2011

    Interesting piece in the Fredericksburg Free Lance-Star about how three stores within three miles of a Wegmans store that opened in June 2009 have closed - a Giant, a Ukrop’s, and a Shoppers Food store.

    According to the story, “That hasn't typically happened when Wegmans opens a new store, said company spokeswoman Jo Natale. Often the new stores bring in additional development. She said the Wegmans in Fredericksburg is among the chain's busiest locations.”

    There were, of course, different circumstances surrounding the three closures. In Ukrop’s case, the company was sold to Giant parent company Ahold, and the location was deemed to be redundant because of other nearby stores owned by the company; Giant had opened a newer store, also nearby, and the older store had outlived its usefulness; and in the case of Shoppers Food, parent company Supervalu was looking to close unprofitable and less productive units as it attempted to get its fiscal house in order.
    KC's View:
    The problem for this section of Fredericksburg is that it hard to simulate additional development when the ghosts of three supermarkets are haunting local shopping centers. On the other hand, most people would tell you that if you’ve got a Wegmans, your need for other food stores is minimal.

    Published on: March 28, 2011

    The Wall Street Journal reports that bankrupt Borders Group is asking the court overseeing its finances to approve $8.3 million in bonuses - including almost $1.7 million to Mike Edwards, president of the company - to be paid to the company’s top executives.

    According to the story, “For Borders' five highest-level executives, the bonuses would mean extra pay of between 90% and 150% of their base salaries, depending on how quickly the company exits bankruptcy or is sold as a going concern ... Seventeen top executives are covered by the largest program, which could add as much as $7.1 million to the pay packets of leaders who stick with the company in bankruptcy.

    “Court papers say 70% of the group have been with the company less than 18 months, and many joined Borders less than a year ago.”

    The bonuses would only be paid if Borders is able to emerge from bankruptcy protection in a timely fashion, and would not be paid if the company is liquidated.
    KC's View:
    Here are some passages from the story that get me:

    “Due to financial distress, the company decided not to pay bonuses for the 2010 period, Borders said in court papers. Additionally, the company said corporate employees haven't seen a salary raise in nearly four years. Mr. Edwards's predecessor as chief executive, Ron Marshall, collected about $806,000 in total pay for 2009, and more than $1 million for the previous year, SEC filings say.

    “Securities and Exchange Commission filings show that Mr. Edwards collected nearly $762,000 from the company in 2009, more than half of it in the form of stock and options. That was for services as chief merchandising officer, before he was named president and chief executive of Borders Inc. in January 2010.”

    Y’know, a lot of people didn’t get raises over the past four years. In fact, a lot of people lost their jobs. (And I’m guessing that more than a few may have ended up unemployed because of the seeming incompetence of Borders’ management - whoever happened to be sitting in the CEO chair.)

    It’s not like these guys are working for nothing, and so they need the bonuses to pay the mortgage. No, they’re making a lot of money...and the bonuses seem to be necessary to motivate them to do their jobs, because the paychecks aren’t enough.

    What a crock.

    These things keep popping up, almost always at bankrupt and/or troubled companies, and I don’t get it.

    Do your damn job, cash your ample paycheck, and create a bonus program that is tied to turning the company into a viable, productive, 21st century retailing entity. You get the bonus when the job gets finished. And maybe, if you’re really smart, you figure out a way to incentivize the front lines personnel who are going to actually make things happen, who are going to make the stores work, who are going to interact with your shoppers, and who will be the backbone of any revival.

    Perhaps the real problem with these companies, in addition to the fact that could not see the 21st century coming and were tone deaf to the competitive threats that made them obsolete, is that they have management that believes they are more important than the people on the front lines. When, in fact, they are only as good as the people on the front lines.

    Published on: March 28, 2011

    The Chicago Tribune reports that alcoholic beverage manufacturers are rethinking many of their marketing plans in view of new research that suggests “women are closing the drinking gap, consuming more alcohol at restaurants while making most of the purchasing decisions for at-home consumption.”

    The story says that “statistics show women have been ordering more drinks. Alcohol servings in restaurants to women increased by 9 percent in 2009, and 3 percent in 2010, according to NPD Group, a market research firm, while servings to men decreased 4 percent in 2009 and 6 percent in 2010. Men still consumed about 10 percent more ... Women make 65 percent to 70 percent of the alcohol-purchasing decisions for at-home consumption.”

    The shift in purchasing trends are nudging manufacturers to create new flavors that will appeal to women, often skewed to sweeter combinations that they think women will want.

    Gary Stibel of the New England Consulting Group tells the Tribune that there may be a sobering fact behind the shift - that previously two-income households have been turned into one-income households by the recession, and since men were hit by the downturn to a greater extent than women, it has left women in the position of having to buy the booze.
    KC's View:

    Published on: March 28, 2011

    USA Today reports that Whole Foods “as well-known for its sensory-filled shopping as its often-pricey foods, is opening bars that serve craft beer and local wine in more than a dozen stores nationally in a test before a wider roll-out.

    In the past 18 months, small, locally focused bars have opened inside five Whole Foods Markets in California, and two each in Arizona, Illinois and Texas, among others. Earlier this month, it opened one inside its chi-chi flagship store in Austin.

    “By 2012, the 305-store chain plans to open at least seven more bars — even one in Hawaii, says co-CEO Walter Robb.”
    KC's View:
    I love this idea. And it certainly seems to tie in with the earlier story about women buying more of the nation’s booze than ever.

    That’s what I call synchronicity.

    Published on: March 28, 2011

    Various stories over the weekend reported on how Target is rolling out its PFresh food sections - offering greater selections of produce, meat and baked goods - in stores located in places ranging from Hartford, Connecticut to St. Louis, Missouri to Tucson and Phoenix, Arizona.

    The Arizona Daily Star reports that “since 2008, Target has gradually been expanding grocery sections in existing stores to provide 50 to 200 percent more food categories than existed before the remodelings. More than 300 Target stores have now converted to the PFresh format.”
    KC's View:

    Published on: March 28, 2011

    • The Associated Press reports that Unilever-owned Ben & Jerry’s is restructuring its Vermont manufacturing operations, eliminating about two dozen jobs in a quest to get more efficient.

    • The Los Angeles Times reports that bankrupt Blockbuster plans to close 186 stores around the country before a planned sale of the chain.

    According to the story, “Before it entered bankruptcy in September, Blockbuster had 3,425 stores in the U.S. Since a reorganization plan fell apart due to disagreements among creditors, Blockbuster has found itself assailed by movie studios, landlords and others that claim they are owed money.”
    KC's View:
    Can’t imagine who or what might be interested in buying Blockbuster ... except, perhaps, for all the real estate.

    Published on: March 28, 2011

    Harry Coover died over the weekend. He was 94 years old, and was the man who invented Super Glue.

    In the New York Times obituary, it is noted that Coover invented the now-iconic product by accident while experimenting with the mounting of gunsights during World War II. He eventually saw the commercial possibilities, but when it was first released onto the market by Eastman Kodak it was not a success ... and only became really successful after his patents had run out.

    Coover was an inductee into the National Inventors Hall of Fame, a recipient of the National medal of Technology and Innovation from President Obama, and the holder of 460 patents during his lifetime.
    KC's View:

    Published on: March 28, 2011

    We continue to get email about Michael Sansolo’s columns last week about Congressional efforts to delay or derail regulations that would limit banks abilities to charge “swipe fees” for credit and debit card transactions that many people and industries find to be usurious.

    MNB user Don Longo wrote:

    Kudos to Michael Sansolo for his column about the big banks’ efforts to overturn swipe fee reform before it even goes into effect. I don’t have enough time here to refute all the half-truths and specious arguments I’ve heard spouted by big banking industry interests. Suffice to say, the bottom line is … the big banks’ bottom line. They like the monopoly they have on fixing the cost of conducting business by plastic cards and they will say and do anything to maintain it.

    A win for the big banks (only those with over $10 billion in assets are affected) will be a big loss for retailers, small merchants and consumers.


    Another MNB user wrote:

    Perhaps this is simplistic, but what if retailers simply gave a ~2% discount for paying cash or check?  Seems to me that the retailer might save a little money on the fees while passing savings along to the consumer.  I have to think that this would give the consumer a good incentive not to use credit cards.  Wouldn't this then cause credit card transactions to decrease?  Wouldn't the credit card companies then make less money an be forced to respond in some way?

    I'm not sure why this hasn't happened yet and perhaps I am missing something, but this doesn't seem earth shattering.  Some retailers (like ALDI) don't even take credit.  If consumers could save 2% on their bill just by paying cash or check, I believe that many would, myself included.


    MNB user Richard Thorpe wrote:

    Does it really matter whether the banks make money on the fees or the retailers make more money by reducing the fees?  Both institutions have competition so whoever makes the "extra" money does not impact the persons who pay for everything - the consumer.  The best way to eliminate this as an issue is for the retailers to do what WINCO does now. Don't accept credit cards or debit cards with "CHARGES".  The banks will find ways to replace revenue and the retailers will not have to pay outrageous fees but lets not think that prices will come down in the stores because they will not.  Retailers will keep prices right where they are whether fees are reduced or not reduced.

    And, from another MNB user:

    I am usually at odds with some of your recent stances, but I wanted to add this in you being "Mad as Hell" blog aimed at the banks.  Over the past week I had a situation in which I had gone to pay a small payment to the bank online.   Their system was down and I did not make the payment.   The next day the bank's collections department called saying that my payment of $24 was five days overdue.  I gave permission to draft out the amount.  30 minutes later I received the same call.  Supposedly, the first person had forgotten to post the payment.  After again agreeing for a draft I thought the issue settled since a couple of days later the transaction showed up on my computer screen.   Several days later: however, I was startled when I received another call in which the bank personnel eventually admitted to yet another error.  Actually, the payment had been posted and then withdrawn. However, at 9 PM the same day I received yet another call that the $24 was still due.  I was livid.

    The next day at 9 AM, I met with the branch manager and to my good fortune the bank's district manager.   We patiently went through and determined that the bank personnel in the collections dept. had made THREE ERRORS and rather than correcting them had each time placed a collection call to me chastising me about my lax payments ( I have a credit score in excess of 800).  Calls to the bank's headquarters by the district manager led to being transferred on up the collections dept. hierarchy.   Finally, the director of collections refused to offer a written apology whereupon I told them that I was removing a six figure amount from the bank and relayed your well known philosophy about customer relations and the demise of Blockbusters and Borders and the success of customer oriented Apple.   In addition, I reiterated the presence of Elizabeth Warren’s attack on banks consumer relations, but the bank higher-up refused to modify his stance saying he would have to do further research.  A few minutes later, a superior of his agreed to offer a handwritten apology.


    Another MNB user chimed in:

    As I understand it there are a significant number of “lower-income” consumers that do not even have bank accounts and use cash or EBT for purchases. So these consumers pay higher prices because of the swipe fees just like the rest of us and don’t even use bank services. Hmmm?

    Now that I mentioned EBT, how much of these government funded dollars are being sent to the Bank’s coffers?

    Thanks MNB now I’m “Mad as hell”!

    I already sent my emails to DC begging to stop the delay and I encourage others to do so as well. I guess that’s all we can do.


    MNB user Frederic Arnal wrote:

    The banks are already reacting.  Since their fees to retailers will be restricted, they will be eliminating benefits that no longer will be subsidized by the retail community.  Chase has already notified us that their VISA Rewards program for both our personal and business check/debit cards will be eliminated.

    This goes back to something that I’ve written about here on MNB ... the notion that nobody really knows what anything costs.

    I’m not sure that we all won’t be better off if fees get reduced, benefits get eliminated, and rewards programs get scuttled. Maybe we’ll all just pay a fair price for what we need and want, which could be better for everyone in the long-term.

    BTW...you let Walmart get into the banking business, competitive pressures could make all this work out just fine.

    And from yet another MNB user:

    I have been steaming about our credit card fees for years. At one point our company was going to stop taking credit cards because of the fees, unfortunately most of our customers use them, so we could not do that. Then we were going to pass on a fee to our customers if they used a credit card, but no you can't do that! If you take a survey of our customers, they have no clue that we get charged a fee for taking credit cards. I would like to know who the first business owner was that said "yes" to Visa/Mastercard when they came knocking on their door and said, in order for you to take our credit cards, you first must buy the equipment and then, we are going to charge the business owner a fee to take "their" card. Who in their right mind who have said "yes" to them. They have all us business owners stuck between a rock and a hard place.

    People are shocked when I tell them that we spend over $100,000 in credit card fees each year. We are just a small locally owned grocery store with 3 locations. I am constantly emailing our government officials. It really upsets me to hear that the teachers union is getting involved. How can we get our customers to understand and fight back. Wouldn't it be great if we could get everyone to stop using their cards for a whole day or better yet a week. What impact would that have on them!

    KC's View: