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    Published on: April 26, 2011

    by Michael Sansolo

    A number of years ago, an executive from a candy manufacturer told me the simple secret for hiking supermarket sales of his category: more holidays.

    If you think about it, it makes sense. Holidays mean something special whether it’s about family tradition, national pride, religion or history. Savvy marketers from candy bars to cars know they are also great times to sell. So the question is simple: why not get creative on holidays?

    What got me thinking about this is I recently ran into two examples of very different companies playing up holidays in a way that on the surface make little sense - except that in both it created excitement, interest and, no doubt, sales.

    The first happened in Wegmans about two weeks ago. While I don’t make Earth Day one of the biggest celebrations in my home, I have a general awareness that it takes place around April 22nd each year and usually comes with a raft of great ideas on how to be a little more environmental. It’s a nice holiday, but hardly a sales dynamo.

    Now re-read the first part of that last paragraph. It was two weeks ago, well before April 22nd. Yet the Wegmans we visit in Northern Virginia didn’t seem to care. Throughout the store there were demonstrations of food and non-food products all geared for the environmentally sensitive. When I asked one very enthusiastic employee about the strange date of the celebration, she said Wegmans decided the event deserved extra attention.

    And they were right. Not only did it get people thinking about the environment, but it probably also juiced up sales in a number of unusual places. At one display, a breathlessly excited employee demonstrated cookware that she said is much better for the planet. I almost got into the holiday spirit and bought some until my practical wife stepped in. Bah, humbug!

    But the event got me thinking about other unusual ways to celebrate holidays, including some that draw in everyone but the very people actually celebrating the holiday.

    Vince and Dominic Pizza shop in West Bethesda, MD, has almost nothing in common with Wegmans. It’s a basic pizza place and one I frequent only for convenience. (It’s not going to make our MNB list of best pizza joints in the US. Trust me.) But on a recent visit, a special sign caught my attention. The sign explained that during the Jewish holiday of Passover, the restaurant would not honor any coupons or discounts for its special “Passover Pizza.”

    Now West Bethesda is an area with a large Jewish population, including a significant percentage that is highly religious. So it’s hardly surprising that Vince and Dominic’s offers this special. Except for this. The basic rule of Passover is that observant Jews can’t eat foods that rise when they cook (hence Matzo) so a pizza of any kind is completely unacceptable or (for the less religious) not anywhere near as tasty as usual.

    No problems at the restaurant. The manager told me the reason no coupons or specials are accepted during Passover is because it’s traditionally the busiest week of the year, with the Passover Pizza selling like, crazy. Remember, it’s not as tasty and won’t be bought by the main audience. But it’s special and somehow, that makes it a smash.

    And that takes us back to the candy executive and the need for more holidays, expanded holidays or just silly reasons to have fun. Just get thinking fast: the Royal Wedding is in only three days and there has to be something special you can do for that.

    English muffins anyone?

    Michael Sansolo can be reached via email at . His 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: April 26, 2011

    by Kevin Coupe

    Talk about benchmarks in the technological evolution.

    • The Seattle Post Intelligencer reports on the Godrej & Boyce Manufacturing Co., described as “the last company in the world” to manufacture a once-ubiquitous piece of equipment - the typewriter.

    According to the story, Godrej & Boyce actually stopped making typewriters in 2009 - and at the moment, has only 500 left in stock. Which is something of a change considering that at its peak in the 1990’s, the company was making 50,000 a year.

    “But that's where we find ourselves,” the PI writes, “with only 500 new typewriters left in the world. If you want one, they cost up to 12,000 rupees, about $270, not counting shipping from India.”

    • Meanwhile, USA Today reports on a new report from the National Center for Health Statistics, which says that 26.6 percent of US homes has only a cellphone, up from 13.6 percent just four years ago, which means that, in the words of one analyst, “the phrase 'home telephone number' is going the way of rotary dial phones and party lines.”

    Here’s the interesting part - low income homes are more likely to not have landlines, because giving them up in favor of just cell service is seen as one way of saving money. In addition, renters are more likely not to bother with traditional landline service.

    And it probably is even more dramatic than the study suggests, since one factor not addressed in the story is how many people with landlines are actually using VoIP (Voice over IP) telephone services provided by cable companies, and not phone companies.

    Benchmarks in the evolution. Always Eye-Openers, especially for people who make think they are selling indispensable products, and operating with unassailable business models.
    KC's View:

    Published on: April 26, 2011

    The Wall Street Journal has a story saying that “determined to find the best deals, more shoppers are researching their grocery lists online before going to the store. For marketers, that means big changes in how and when they tempt consumers to buy ... It's well known that consumers research expensive products like electronics online, but coming out of the recession, consumers are more scrupulous about researching their everyday products such as diapers and detergent, too. More than a fifth of them also research food and beverages, nearly a third research pet products and 39% research baby products, even though they ultimately tend to buy those products in stores, according to WSL Strategic Retail, a consulting firm.”

    The story goes on: “The digital shift is a particular challenge for food and household-product companies, which typically aren't as advanced online as their electronics and apparel counterparts. They have been deterred by the cost of shipping bulky but low-value items like paper towels, detergent and canned soup, especially given the ubiquity of brick-and-mortar stores selling the products for about the same price.”
    KC's View:
    I cannot tell you how many people in recent months have argued to me, with absolute certainty, that while people may research cars and flatscreen TVs online, they’ll never exhibit that kind of behavior when it comes to everyday products.

    And yet, here you have a study saying that a significant percentage of people already are doing so. And the numbers only are going to grow, because smart phones and new applications make the whole “research” process both intuitive and seamless.

    It is all about product transparency - about price, about ingredients, about nutritional information, about packaging, and about food safety. To think - and act - otherwise is to tempt fate, because the companies and products that achieve increasing transparency will be giving themselves a differential advantage and an edge on the competition.

    Published on: April 26, 2011

    • The Minneapolis/St. Paul Business Journal reports on continuing speculation that Walmart is actively scouting sites and negotiating with landlords with downtown Minneapolis, looking for an opportunity to bring its urban strategy to Target’s hometown.

    Walmart, at least for now, is not commenting.

    “While we are always looking for opportunities to create jobs and improve access to affordable groceries here, we don’t have any new projects to announce,” spokesman Steve Restivo tells the Business Journal in an email.
    KC's View:

    Published on: April 26, 2011

    The Los Angeles Times reports that as Netflix enjoys a subscriber base of more than 20 million people (including 3.3 million new subscribers in the last quarter alone) and offers more than 20,000 movies and TV shows on its fast-growing online service, one result is likely to be the emergence of a number of new competitors.

    According to the story, “retail giants such as Wal-Mart Stores Inc., Inc., and Best Buy Co., Internet television provider Hulu, and satellite broadcaster Dish Network Corp. are weighing plans to launch online subscription video services or expand nascent ones to take on Netflix, people with knowledge of the matter said.

    “Such moves would win cheers in Hollywood, where many are worried that Netflix is amassing too much clout. Some also believe that Netflix's fast-growing customer base is buying fewer DVDs and watching less television, contributing to the financial struggles of studios.”

    However, the story also notes that none of the potential competitors has yet “started writing the nine-figure checks necessary to secure a library of movies and TV shows to rival Netflix's.” And at the same time, with expansion plans that will include moves into the UK and Latin America, the general feeling seems to be that if Netflix gets to 30 million subscribers, that will give it a remarkable competitive advantage.
    KC's View:
    It is worth remembering that several years ago, Walmart wanted to create a DVD rental system to rival Netflix’s, but eventually decided to outsource the thing to Netflix because it was just too complicated and expensive to get started.

    It also is worth noting that from the very beginning, Netflix founder Reed Hastings has never defined his company in terms of the hardware; he always said that he was only going to be sending out DVDs as long as people wanted them, but was fully prepared to switch to online delivery when broadband technology became more available. (This was long before broadband service became as available as it is today.) Essentially, he was envisioning the post-DVD world at a time when DVDs were a fairly new technology.

    That said, it seems certain that the competitive landscape in this segment is due for some significant change ... which makes sense, because a growing market inspires competition. The key will be the innovative muscle brought to the game by the various players, and an understanding that the market is not static, the technology is continually changing, and consumer needs and desires are evolving.

    Published on: April 26, 2011

    National Public Radio reports on how Five Guys Burgers and Fries is “leading a burger revolution that's making the bigger chains take notice.”

    The premise is this: Five Guys uses better beef and fresher potatoes for its burgers and fries, charges more, and takes more time to cook its products than any of the fast food burger chains. In doing so, it has become the fastest-growing restaurant chain in the country.

    The recession has helped, the story suggests, since a more expensive, higher quality burger became an affordable luxury for a lot of people. But there also seemed to be a sense that a lot of people were ready to move away from lowest common denominator food ...and Five Guys was there to satisfy that growing hunger.
    KC's View:
    I’ve always hated the lowest common denominator approach to anything. I love stories like this one.

    Published on: April 26, 2011

    Crain’s New York Business reports that late last week, “the 23,000-member United Food and Commercial Workers Local 1500 filed for a union election at a Target store in Valley Stream, L.I., a stone's throw from Queens. It was the opening salvo in what Local 1500 officials say will be an aggressive, extended campaign to organize workers at 27 Target stores in the New York area, including its 10 stores in the five boroughs. Union staff, who have been meeting with Target employees for two months, say the recent attention on Walmart's labor practices prompted the workers to come forward to organize for higher wages and better hours.”

    And there is another motivation behind the move: If the UFCW is able to organize workers at Target, it hopes that this will make it easier to make a move on Walmart when it begins opening stores in the Big Apple.

    Target doesn’t like the idea, releasing the following statement: “Target's emphasis is on creating an environment of mutual trust between Target and our team members—an environment that promotes listening, responding to concerns of team members and always giving honest feedback ... We want to continue to create the kind of workplace where team members don't want or need union representation to resolve issues.”
    KC's View:

    Published on: April 26, 2011

    • Grocery Shopping Network announced the launch of newly enhanced consumer websites for Milwaukee based Roundy’s Supermarkets, including the websites of Roundy’s five store banners: Pick ’n Save, Rainbow Foods, Copps Food Centers, Metro Market and Mariano’s Fresh Market, representing more than 150 stores.

    According to the announcement, “Roundy’s newly enhanced website provides interactive tools for shoppers, including the ability to search by department or brand; personalized specials tailored to the shoppers preferences and previous shopping history; a recipe center that includes 60,000 recipes and wine parings; online shopping from the weekly ad circular; access to in-store specials and sale items; as well as the ability to create a master shopping list and a record of previous orders. In addition to the rich content supplied by GSN, shoppers will have the ability to view all past purchases using their loyalty card information.”
    KC's View:

    Published on: April 26, 2011

    • The Boston Herald reports that “a new consumer survey comparing Massachusetts supermarkets shows Market Basket and Wal-Mart Supercenter leading the pack for prices, while Whole Foods and Roche Bros. take top rankings for quality. The nonprofit Center for the Study of Services found that a family spending $150 a week based on average prices at Shaw’s and Stop & Shop - the state’s largest grocery chains - could save 21 percent, or $1,638 a year, by shopping at Market Basket.”

    According to the story, “Whole Foods, Roche Bros. and Hannaford Supermarkets had the highest customer ratings for product and service quality. Those categories ranged from the quality of meats and variety of fresh produce to keeping things in stock and the pleasantness and helpfulness of staff. Market Basket’s customer ratings trailed those of Stop & Shop and Shaw’s.”

    • The Wall Street Journal reports that as the US Food and Drug Administration (FDA) begins to implement the new Food Safety Modernization Act, there remain concerns about how the regulations will affect small farmers and food producers.

    The Journal writes: “The law exempts very small businesses from many of the new regulations, including developing hazard analyses and implementing preventive measures like a food allergen control program, a recall plan and a pathogen monitoring program. The exemption is designed to apply to small businesses selling less than $500,000 in the same state within 275 miles of the food production.

    “But the exact details of the exemption will be determined by the FDA. Farms that are considered processing facilities - which could mean anything from bundling lettuce to full scale production - would be required to follow the new regulations. All farms, no matter the size, will be affected by new produce production regulations.”

    • The New York Times reports that the National Labor Relations Board (NLRB) plans to “file federal lawsuits against Arizona and South Dakota in seeking to invalidate those states’ constitutional amendments that prohibit private sector employees from choosing to unionize through a procedure known as card check.

    “In a letter sent on Friday, the labor board told those states that it would invoke the United States Constitution’s supremacy clause in asserting that the state constitutional amendments conflict with federal laws and are pre-empted by those laws.”

    Under current law in those states, the story notes, “private sector employers can insist that secret ballots be used when unions are trying to organize. Unions like using card check because it makes it easier to win unionization campaigns.”
    KC's View:

    Published on: April 26, 2011

    Got a number of emails yesterday about my rant regarding the Wall Street Journal report that the bankruptcy judge overseeing the finances at Borders Group has approved a plan “to pay executives and other high-level employees more than $6 million in bonuses, after the bookseller worked to satisfy both his concerns and those of the Office of the U.S. Trustee.” According to the story, the judge said that “the amended bonus packages, which tie the $6.6 million in payments closer to the financial performance of Borders, were needed so Borders could ‘maintain its experienced work force’.”

    I commented:

    This is just so profoundly annoying ... because it is all about top-down management, ignoring the fact that the best ideas rise from the bottom, that success and/or failure will be determined, to a great degree, on how people on the front lines deliver on the Borders promise and value proposition.

    That’s not to say that top management does not have a significant role to play. But man, this whole bonus structure sends the wrong message to the people on the front lines.

    One MNB user wrote:

    Unfortunately, I think this is what drives a large # of people going for a Master’s Degree, not for learning how to build a business, but for how to make the most out of it, and so what if the ‘ordinary’ people don’t make the grade……And of course, all these Bonuses have to be paid by somebody, the consumer, which does make other retailers, like Amazon, an even better option.

    Capitalism at it’s worst, but I’ll still take it over anything else...

    Another MNB user wrote:

    I agree with you 100%.  So I suggest that all store employees stop going to work until they are paid to stay.  Eventually they will close the stores anyway, so why not get paid in the short term.

    And, from another MNB user:

    With that news, Borders has lost my business and I’m sure several others as this is bogus!  They would be better suited to reinvest the $6.6MM into consumer marketing events (coupons, loyalty card rewards, etc) to drive consumption and loyalty.  They fail to recognize the importance of the consumer in this equation….retention bonuses are great but the consumers are the one’s that are funding the paychecks at the end of the day!

    MNB reported yesterday that Larry Wahlstrom, who returned to Supervalu-owned Shaws as CEO less than a year ago when the then-CEO, Mike Witynski, departed “to pursue other interests,” has announced that he is retiring, effective immediately. He will be succeeded by Mike Stigers, formerly of Jons Markets and PW Supermarkets on the west coast.

    I commented that Shaws’ future possibly includes finding a way of getting Shaws off the books at Supervalu. There will be a lot more on this story, I suspect, as the chattering class (of which I am a proud member) starts speculating about the story behind the story.

    One MNB user thinks I’m full of it:

    One word on the Supervalu/Shaw's speculation.....ENOUGH.

    We at Shaw's are sick of hearing your guesses.  You have been predicting the death of this company for years.

    Not the death of the company. Just its sale to another entity. But I’ll have more on that in a moment.

    MNB user Jim Lukens wrote:

    Mike's a real bright guy, can see "the big picture" and will be able to help Shaws better and faster than his predecessors. He has both the passion and focus to turn the corner for Shaws. 

    He's able to think outside the box and that's what Shaws needs.

    It's not an easy task or slam dunk  for Mike but he's up to the challenge and it was a great move. 

    I had a number of conversations yesterday with insiders, and the reaction to Mike Stigers’ appointment was universally positive. The general sense seems to be that Stigers brings an independent mindset to a chain that has been locked into a traditional mindset for too long.

    Most people also gave Supervalu high marks for picking an “outside the box” thinker to run Shaws ... that this represents a significant move for the company.

    That doesn’t mean, sources say, that Supervalu would not sell Shaws if it could get a good price for the company. That still remains a possibility. But Stigers apparently has a bit of running room here, able to make changes and invest some money in turning things around at Shaws.

    So good for Supervalu. And good for Shaws. And heartfelt good luck to Mike Stigers. Because despite what some folks may think, my abiding cynicism about certain subjects and companies doesn’t mean that I want people to fail. Far from it.
    KC's View:

    Published on: April 26, 2011

    Major League Baseball announced yesterday that J. Thomas Schieffer, the former president of the Texas Rangers and the ambassador to Australia and Japan during the Bush administration, has been named as “monitor” of the Los Angeles Dodgers, which de-facto makes him president of the debt-laden franchise. His signature is required for any expenditure of $5,000 or more.

    MLB Commission Bud Selig has invoked the “best interests of baseball” clause in the league’s bylaws to take control of the team from owner Frank McCourt, who is said to have amassed $400 million in debt for the team while simultaneously siphoning off profits for his own personal use.

    Schieffer is described by many observers as a “baseball guy” who understands both the fiscal and emotional components of the game; he is also, as a matter of interest, the younger brother of “Face The Nation” host Bob Schieffer.
    KC's View: