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    Published on: June 6, 2011

    Walmart CEO Mike Duke told the company’s annual meeting last week that the company’s central goal is to serve what he called “the next generation customer,” which he described as including “millions who are striving to join the emerging global middle class.  They're connected to the world through smart phones and social media.  They're in charge of when they shop and how they shop, and they know who has the lowest prices." Duke said that “serving these customers is a clear and direct path to a stronger business and a better company ... Walmart is the best-positioned retailer on the globe.  We are right in the sweet spot of the next generation customer."

    In his speech to the meeting, Duke said the company has five basic priorities:

    • "Growth in sales, growth in the number of customers, and growth through new stores and acquisitions." Duke said that the company’s plan for turning around comp sales in the US is “the right plan, and it is gaining traction.”

    • Duke reiterated Walmart's unwavering commitment to the second priority, EDLP and EDLC.  "Nothing builds more loyalty with customers than everyday low prices," he said.  "Everyday low prices in every market.  No exceptions.  No excuses."

    • “We have to be more intentional about developing talented leaders, managers and associates around the world,” Duke said. “That means better training and greater opportunity for our store associates.  And it means thinking globally and building teams that reflect today's world.”

    • Duke also made the point that “live better” remains a key component in its strategy: “Anyone who has paid attention over the past year - to our work on healthy foods, fighting hunger or sustainable agriculture - knows we have a model that works and momentum behind it.  We must continue to broaden and accelerate our work to make a difference on big issues."  
    • Duke also made a commitment to the world of e-commerce, saying that Walmart “will not just be competing,” but “will play to win.”

    Duke says that “Walmart has been making purchases and growing internally to build up its online operation, which is in synch with its brick-and-mortar stores through programs like online ordering with pick-up in stores.”

    The clear impression, the Wall Street Journal writes, is that Walmart “appears to be setting the company up for a run at Amazon.”
    KC's View:
    MNB has long been an advocate for retailers keeping their eyes on the next generation of shoppers, arguing that it is critical to begin establishing an infrastructure and strategy now that will be relevant to these consumers when they become the center of the target. (I checked the archives, and it looks like the first time I brought it up here was in February 2003 ... a time when my hairline was both lower and darker.)

    Duke is saying the right things about the building blocks for such an approach, though there are folks that I talk to who are convinced that it is all just lip service, and other folks think that the company is spreading itself too thin, and still others who think that Walmart is just trying new tactics the way some people throw spaghetti against the wall to see if it is done.

    It is interesting that the annual meeting took place as Walmart opened its first Express store in Gentry, Arkansas, which the Associated Press described this way: “The long, narrow concrete box, which features a powder-blue Walmart Express sign, is less than one-tenth of the size of a super center. The store, which has exposed pipes and yellow walls, carries most of the basics that its bigger cousin carries, from bacon and milk to socks and DVDs.”

    We’ll know a lot more about Walmart’s commitment based on whether this format rolls out faster than other small store concepts that the retailer has attempted.

    All the chips seem to be on the table.

    Published on: June 6, 2011

    by Kevin Coupe

    Technology writer David Pogue had an interesting piece in the New York Times the other day about Jonathan Kaplan, founder and CEO of Pure Digital, “the company that made the wildly successful Flip camcorders, the company that Cisco bought two years ago for $590 million, the company that Cisco then shut down last month, without any reasonable explanation.”

    Kaplan says, in fact, that there was an explanation - the Flip simply was a bad purchase for Cisco because it simply did not fit the company’s business model. In addition, Cisco’s stock price was in trouble, and management felt it needed to do something to reassure investors that it was focused on its core business. (If the stock price goes up over the long haul, Kaplan says, shutting down the Flip business will be seen as a smart move, even if the consumer public has been denied access to a product that was seen as both innovative and successful.)

    In addition, Kaplan makes several interesting observations about how to be an entrepreneur:

    “It’s like going into a bar filled with 100 beautiful women. You ask the first one, ‘Will you go out with me?’ And she says no. You ask the second one out, and she pours her drink on you. The third one slaps you. Well, most people would give up at beautiful woman No. 2 or No. 3. An entrepreneur is the one who gets all the way to No. 100. And marries her and lives happily ever after.”

    “Most people think the way you figure that out is doing a focus group. But the really really successful ones are ones people never thought they wanted. Figure out a way to delight the consumer; You need to figure out what it is. Then use the focus group to see if you’re crazy.”

    “If you hire someone bad, fire them immediately and give them a big severance package so they feel good about you. We gave our workers four to six months’ severance, even if they’d worked only four months. You might think that’s crazy. But it was our mistake to hire that person. And it’s not that much money, really ... You have to be willing to fire people. I’ve been fired three times. You’ll all probably get fired. If you’re a passionate person, you will get fired. But you’ll both be better off parting ways.”

    Now that he’s out of the Flip business, Kaplan is focused on another company creating a product that he sees as being “simple, nostalgic, memorable, affordable.”

    Pogue writes that Kaplan has founded “a chain of grilled-cheese-and-soup restaurants.

    “That’s right. He plans to open five The Melt restaurants around San Francisco this year, then 500 more nationwide by 2015. You’ll order online or from your phone; you’ll be sent a QR barcode, which you hold up to a scanner when you arrive at the restaurant. Your sandwich and soup combo ($8) will be ready in one minute.

    “They’re upscale grilled-cheese; the combos will include ‘aged gruyere on wheat with wild mushroom soup,’ he says, or ‘goat cheese and mint with carrot ginger soup.’ With each visit, you’ll be asked if you’d like to round up your purchase price to the nearest dollar, with the difference donated to a charity dedicated to fighting world hunger.”

    Sounds like an Eye-Opener.
    KC's View:

    Published on: June 6, 2011

    The Boston Globe reports that Wegmans plans to build a new 140,000 square foot store near the Burlington Mall, about 20 minutes northwest of Boston, to open in the spring of 2013.

    Wegmans plans to open a store in Northborough, Massachusetts, about 45 minutes due west of Boston, later this year.
    KC's View:
    No way Wegmans stops at two.

    Published on: June 6, 2011

    The Wall Street Journal this morning reports that “while testing isn’t yet complete, it looks like bean sprouts grown in Germany could be the source of the E. coli outbreak that has killed 22 people in Europe and sickened 1,600, many of them seriously.”

    According to the story, “Agricultural officials say a bean-sprout supplier has been linked to  restaurants where people ate and then fell ill, and that an employee of the bean-sprout supplier has also been infected by E. coli. With no confirmed link, though, officials are still warning Germans to avoid eating fresh cucumbers, tomatoes and lettuce, the previous prime suspects in the outbreak...”
    KC's View:
    I know this. I’ll be in Spain next week, covering the annual Consumer Goods Forum (CGF) summit in Barcelona ... and I’ll be avoiding anything that even looks like a raw vegetable.

    Published on: June 6, 2011

    The National reports that Walmart will be going on a “charm offensive” in South Africa in the wake of last week’s decision by South Africa’s Competition Tribunal to approve the retailer’s proposed $2.4 billion merger with South African retailer Massmart Holdings Ltd.

    The approval is contingent on Walmart’s agreement not to cut any jobs for two years and honor existing labor agreements for three years; Walmart also has to establish a supplier development fund in the amount of $15 million (US) to help local manufacturers, a move that is seen as addressing concerns that Walmart will import cheap Chinese products and hurt regional suppliers.

    Labor unions had hoped for more stringent restrictions on Walmart, and reportedly are considering appealing the decision.

    Walmart is said to be planning a speedy takeover, and wants to open as many as 100 new stores over the next three years. However, the company also recognizes that it will have to deal with cultural resistance if it is going to be successful over the long haul.
    KC's View:

    Published on: June 6, 2011

    HealthDay News reports that new research from Johns Hopkins University School of Medicine and its Heart and Vascular Institute suggests that a low-carbohydrate, high-fat diet, “with regular exercise as part of the plan, don't appear to harm the arteries, as some experts have feared.

    "It's pretty clear low-carb is effective for weight loss," study author Kerry J. Stewart tells the news service. "The concern has been that because you are eating more fat this is going to put stress on your blood vessels."

    However, HealthDay News notes that Connie Diekman, director of university nutrition at Washington University in St. Louis and past president of the American Dietetic Association, is skeptical. “I would like to see more studies in healthy and unhealthy subjects and longer-duration studies before concluding that this high-fat intake does not impact blood vessel health," she says.
    KC's View:

    Published on: June 6, 2011

    The Wall Street Journal this morning reports that “a proposal that would force companies to slap ‘Made in’ labels on billions of euros in goods sold in the European Union has split the bloc's southern manufacturing base from big, mostly northern, multinational companies that sell items imported from abroad.

    “Trade experts say the idea's popularity in the EU - it has been approved by the EU Parliament and the European Commission - reflects concerns over a struggling economy and losing jobs to foreign competition.”

    According to the story, “the proposal would mandate labels on 11 categories of goods, including shoes, textiles and furniture. The EU plan will be put to a vote by the EU's member governments in a few weeks. Approval by a majority would set in motion enactment for a five-year trial period.”
    KC's View:

    Published on: June 6, 2011

    • In Washington, the Issaquah Press reports that Starbucks plans to convert an existing unit in Issaquah to the format that sells beer and wine in addition to coffee, making it the third Starbucks store to do so. One currently is opening in Seattle, and another is slated to be unveiled soon in Portland, Oregon’s Pearl District.

    • Casey’s General Stores, Inc. and Kum & Go announced today that they have signed a definitive purchase agreement for Casey’s to acquire 22 convenience stores from Kum & Go. All 22 stores are located in Iowa operating under the Kum & Go banner. The stores will be immediately rebranded to Casey’s once the transaction is completed.

    • The Sunday Times of London reported over the weekend that Walmart-owned Asda Group there may make a bid for Iceland Foods, the UK-based frozen food chain the acquisition of which could cost as much as $2 billion (US). William Morrison Supermarkets also is said to be considering a bid for the chain.
    KC's View:

    Published on: June 6, 2011

    • James Arness, who starred in some 635 episodes as Marshall Matt Dillon of “Gunsmoke” over some 20 years on CBS-TV, died last Friday at age 88.

    The Washington Post framed the obituary this way: “Mr. Arness, who was a rugged 6-foot-7, stood tall in the dusty streets of Dodge City, Kan., portraying a U.S. marshal whose badge represented more than just the force of law. He was the embodiment of quiet moral authority, a sensitive arbiter of conflict in a rough-and-ready cow town - ‘Gomorrah of the plains, they call it,’ as he said in the show’s first episode. Only when pushed to the limit would Marshal Dillon pull his six-gun from its holster.

    “When ‘Gunsmoke’ premiered in 1955, it was considered a new breed of “adult western,” with well-drawn characters and complex plots that, despite its name, took the show beyond outlaws and gunfights.” The producers of “Gunsmoke” originally wanted John Wayne for the role, but Wayne did not want to do TV; he recommended Arness, with whom he’d been in a few movies, and then even appeared before the series’ first episode to give it his imprimatur, saying that Arness is “ a young fellow, and maybe new to some of you, but I've worked with him and I predict he'll be a big star. So you might as well get used to him, like you've had to get used to me!”

    Arness also had a famous younger brother - Peter Graves of “Mission: Impossible” fame, who died last year at age 83.

    One other bit of trivia. Arness was not the first person to play Matt Dillon. William Conrad, who later played the lead character in “Cannon,” essayed the role on radio for almost a decade, but allegedly was not asked to play the role on TV because of his weight.

    • Jack Kevorkian, who was a fierce and sometimes theatrical advocate for assisted suicides and personal freedom when it comes to end-of-life decisions, died last Friday at age 83. He reportedly suffered a pulmonary thrombosis after having been hospitalized for medical problems related to kidney and heart problems.

    Kevorkian once admitted on “60 Minutes” to having been present at about 130 suicides, and admission that eventually led to a 1999 conviction for second-degree murder and his serving eight years in prison.

    According to reports, no efforts were made to keep Kevorkian alive at the end, and no memorial service is planned.
    KC's View:

    Published on: June 6, 2011

    Got the following email from MNB user John Parvin responding to our positive comments about the Apple Store:

    Talk about world class service....we bought our Apple Ipod touch from Wal-Mart a month ago, because we were in the neighborhood.  Two days later my ten year old daughter, (who spent her own hard-earned money on this) dropped it on the tile kitchen floor, and it shattered. 

    After many tears, we brought the device to Apple store in Portland Maine to see if the screen could be repaired.  The sales person said she understood that this was a terrible mishap, and felt that Apple would want to replace this....for FREE.  Huh??  We didn't buy it here......?  Leaving the store with a happy daughter, I vowed to never buy another apple item anywhere but at the Apple store.  Soon I will be buying the new IMac too, and you can bet I know where to go.....Amazing.  Steve Jobs, you are the man!

    And MNB user Bill Welch wrote:

    Even when they are busy and you have to wait for service you feel special because you are given an appointment time with the next available “Genius”.  When your time comes the “Genius” somehow finds you in a crowd of 100+ customers and escorts you to the “genius bar” to sit down and discuss your problem.  BTW, you really don’t feel like you are waiting since you are playing with all the cool Apple toys.  Now this is genius!

    The Apple Store may be the single best shopping experience in the world. Anybody who sells anything should look at it and figure out what elements of the experience can be imported to other venues. It is where other retailers should go to school .. again and again and again.
    KC's View:

    Published on: June 6, 2011

    Defending champion Rafael Nadal defeated Roger Federer yesterday in the French Open Men’s Singles Championships, 7-5, 7-6 (3), 5-7, 6-1, became just the second man to win six French Opens, tying Bjorn Borg.

    And Li Na became the first Chinese citizen to win a major championship, defeating French Open Women’s Singles defending champion Francesca Schiavone of Italy 6-4, 7-6.
    KC's View: