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    Published on: June 14, 2011

    by Michael Sansolo

    About 20 years ago I heard a major industry executive talk about change. The reason I can still recall the comment is because he hit a major point so wonderfully. The industry, he said, is always changing. What seems different today (in the early 1990s, that is) is the pace of change.

    If it seemed relentless then, today is off the charts.

    The forces of change are everywhere and moving with baffling speed and in baffling ways. There was a fabulous example of the changing pace of global issues this weekend on the front page of the New York Times. It was a picture of a man in Afghanistan, sitting in a desolate area and working on a new generation Mac laptop clearly hooked up to an Ethernet cable.

    It comes in the aisles of supermarkets, too.

    Last week, I had the good fortune to host a panel for the Tennessee Grocers Association that featured one such moment. Ken Pink of E.W. James and Sons was talking about the incredible changes his 25-store company has seen in the small towns it serves in the western part of the state. One moment stood out.

    Pink recalled that when he joined the company just seven years ago, Sunday was still one of the slower shopping days each week. Although seven years is just a short period of time, the world has changed for E.W. James. Now, Sunday is one of the three biggest sales days of the week. What’s more, the time of day when Pink’s average store will reach 50% of daily sales keeps getting later and later.

    Now, neither change is earth shattering. For many other companies, especially those in urban and suburban areas, Pink’s numbers may reflect realities that faced years earlier. Yet, we can argue that it does matter.

    Just as the man on the hilltop in Afghanistan with a laptop reminds us how the interconnected world has changed global politics, security and community forever, the subtle shifts in shopping patterns in western Tennessee matter. They remind us that even in the time of the nation’s biggest financial storm in 80 years, the erosion of traditional shopping goes on. And that demands our attention.

    The endless shift of shopper visits to the weekend puts additional emphasis on the need for the entire supply chain to shift so that stores are properly stocked and looking their best on the days of the week when most shoppers are visiting. More than ever, that means Saturday and Sunday and in far too many quarters I hear griping that problems remain.

    The endless shift of shopping trips to late afternoon and early evening - a trend fed, no doubt, by the growing percentage of working women - means stores need to think about how they staff during the day. If your best workers are on duty during traditional Monday-Friday daytime hours, you are out of synch with your customers.

    What’s more, the nature of shopping trips themselves are switching. As FMI reported in its recent consumer Trends study, shoppers visit the supermarket less often each week than ever. Most likely that means shoppers are making one enormous stock up trip two or three times each month and filling in around that. That too creates lots of questions about whether today’s stores are properly answering the needs of shoppers who exist in constantly diminishing numbers.

    Times are changing and, it seems, faster than ever.

    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: June 14, 2011

    by Kevin Coupe

    Words matter. That’s something that real leaders have to keep in mind, both in good times and in more challenging circumstances.

    This was proven yet again in the aftermath of Sunday night’s National Basketball Association (NBA) championship game, in which the Dallas Mavericks defeated the highly touted Miami Heat.

    To begin, let’s get one thing out of the way.

    I know very little about basketball. Not my sport. I have no three-point shot, I’m not great from the foul line, and I routinely get beaten at “21” by my kids.

    But I do have a pretty good ear for whining. (I have, after all, parented three kids.)

    The Miami Heat were favored to win the championship since the beginning of the season, mostly because the deck seemed to be stacked in its favor because it has three of the best players in the league - LeBron James, Dwayne Wade and Chris Bosh. The Heat also became the team everybody loved to hate, mostly because James turned his move from the Cleveland Cavaliers to the Heat into such a narcissistic production.

    It was within this context that James, in the past-game press conference, uttered the following sentences:

    “All the people that were rooting on me to fail, at the end of the day they have to wake up tomorrow and have the same life that they had before they woke up today. They have the same personal problems they had today. I'm going to continue to live the way I want to live and continue to do the things that I want to do with me and my family and be happy with that. So they can get a few days or a few months or whatever the case may be on being happy about not only myself, but the Miami Heat not accomplishing their goal. But they got to get back to the real world at some point.”

    In other words, I may have lost, but now you all have to go back to your miserable little lives, and I’m going back to a life that is a lot better than yours. So there.

    Not a great message to send to basketball fans, even those who are rooting against you.

    While I’ve never been one who believes that professional athletes should be seen as role models, I do believe that they have two jobs: 1) win, and 2) create a product that people actually want to root for.

    By both measures, LeBron James failed. His words drove that home.

    This is something that all business leaders need to think about, even if they are working on a less public stage than most professional athletes. I know CEOs who like to visit stores in luxury cars that cost more than many store employees make in a year, and I know CEOs who visit stores in battered SUVs that are far less ostentatious. There is a clear distinction; some leaders understand that the people on the front lines are the most important component of any success, and some don’t get it.

    Perhaps the great Stephen Colbert put it best last night on “The Colbert Report,” when talking about how LeBron James put his foot in his mouth:

    Like they say, it's not whether you win or lose, but how you disparage the pathetic lives of the little people who make it possible for you to have a career bouncing an inflatable ball.

    That’s an Eye-Opener.
    KC's View:

    Published on: June 14, 2011

    Reuters reports that a Superior Court in Pennsylvania has ruled against Walmart in the retailer’s appeal “of most of a $187.6 million verdict for Pennsylvania hourly workers who accused the world's largest retailer of denying them meal and rest breaks.”

    According to the story, the court “said there was sufficient evidence for Philadelphia jurors in 2006 to conclude that Wal-Mart's practices violated state wage and hour laws. It also said Wal-Mart's own internal review uncovered violations regarding ‘off-the-clock’ work.”

    The original case was brought on behalf of more than 185,000 current and former Walmart employees who worked for the chain between 1998 and 2006.

    "The record reflects testimony and documentary evidence suggesting that because of pressure from the home office to reduce labor costs and the availability of significant bonuses for managers based on store profitability, Wal-Mart's scheduling program created chronic understaffing, leading to widespread rest-break violations," the appeals court said.

    There was a bright spot for Walmart, however, since the Superior Court panel of three judges order the original trial court “to recalculate a $45.6 million award of legal fees” on the grounds that some services were double-counted.

    Walmart says that it remains convinced of the rightness of its position, and spokesman Greg Rossiter said, “We look forward to additional review in the courts."
    KC's View:
    This has the potential for being a rough month for Walmart, since the US Supreme Court is expected to rule on whether a gender bias suit against it - representing 1.5 million female former and current employees - can remain a class action.

    Published on: June 14, 2011

    The Wall Street Journal reports that “the E. coli outbreak in Northern Germany has been traced to a single bean-sprout farm near Hamburg, John Dalli, European commissioner in charge of health and consumer policy, confirmed Saturday.

    “German authorities on Friday had said that tests on the bean sprouts from the organic farm had been matched to the strain responsible for the deadly bacterial infection ... Authorities will now investigate how the specific E. coli strain got into the food chain.”
    KC's View:
    I don’t know why, but when I read this story I immediately thought of the “Lone Gunman” theory.

    It is always a lot easier to point one’s finger in one direction. Reassuring, even.

    But I wonder how many people have absolute faith in the European commissioner in charge of health and consumer policy.

    Published on: June 14, 2011

    There is an interesting story in the New York Times this morning about how banks are looking for a new source of revenue by putting advertising on their monthly statements and creating a mobile, interactive system bringing together a number of components.

    Here’s how the Times frames the story:

    “A company called BillShrink has worked with more than 2,000 banks to offer a new service - part loyalty card, part daily deal - called Statement Rewards. Under the program, online bank statements may include deals and discounts for bank customers based on their recent spending. If, for example, a customer spent more than $100 at Starbucks in a month, Starbucks could offer a $5 coupon, complete with a small corporate logo, right under the statement’s listing for the last Starbucks purchase.

    “The same deals could appear on a smartphone so a customer walking near a Starbucks could see how close they were geographically - and financially - to getting a discount at the nearest store.

    “In the process, marketers gain access to preferred customers, while the banks and BillShrink get a small piece of each transaction. And the consumer now receives a bank statement, which most people regard as confidential and private, that is loaded with advertising.”
    KC's View:
    This is sort of intriguing, in the sense that we all knew that banks would be looking for new sources of revenue in the wake of financial regulations that limit what they can charge in certain circumstances.

    It also suggests the extent to which consumers are in play, and the extents to which marketers will go to gain access to them. (I’ve noticed recently that newspapers have gotten into the Groupon-Daily Deal business, sending out daily promotions to online subscribers.)

    But I do have one other thought - that any retailer needing a bank to help it identify and reward its best customers is not doing its job, is not paying attention.

    Published on: June 14, 2011

    GS1 US, the not-for-profit standards group formerly known as the Uniform Code Council, commented today on the June 12 death of Alan L. Haberman, who helped select the design for the Universal Product Code (U.P.C.) barcode and served on the organization’s Board of Governors for many years:

    “Alan Haberman literally put a stamp on global commerce as one of a handful of grocery executives involved in creating the U.P.C.,” said Bob Carpenter, president/CEO of GS1 US. “He was a huge contributor to the selection of this symbol, which is going strong after almost four decades and is used by nearly 2 million companies around the world.

    “Alan was also a force in the creation of the Auto-ID Center at the Massachusetts Institute of Technology in the 1990s, leading to the development of the Electronic Product Code and commercial uses of radio frequency identification (RFID), which is currently undergoing a sharp increase in use in stores, warehouses, factories and elsewhere.

    “He was a true visionary, and organizations across some two dozen industries are benefiting today from his contributions,” Carpenter said.
    KC's View:

    Published on: June 14, 2011

    • The Los Angeles Times reports that Canada-based Alimentation Couche-Tard is acquiring as many as 322 California locations from ExxonMobil for its Circle K chain. Terms of the deal were not disclosed, and the sales is expected to close “in stages” starting in the fourth quarter of this year.

    Reuters reports that “Perkins & Marie Callender's Inc, owner of the Perkins and Marie Callender's restaurant chains, filed for bankruptcy in a Delaware court on Monday, citing a slump in sales due to weak economic environment in its primary markets.

    • The New York Times reports that “the VF Corporation agreed on Monday to buy the Timberland Company, the boot maker, for about $2 billion in cash, paying a big premium in an effort to bolster its outdoor clothing offerings. VF, which already owns lines like Wrangler and 7 for All Mankind, will add Timberland to a stable of outdoor brands like the North Face and Eastpak.”
    KC's View:
    Everything I hear these days suggests that we’re going to be seeing a lot more of these stories in coming days - mergers, acquisitions and bankruptcies. These are unsettling times, with the kind of tectonic changes that Michael talks about in “Sansolo Speaks” this morning. The winners, I suspect, will be the ones who sense the changes coming and move in advance of the quakes.

    Published on: June 14, 2011

    • Kroger Co. has appointed Reuben Shaffer, the company’s vice president of retail operations for the Cincinnati/Dayton division since 2001, to be its chief diversity officer, effective immediately.

    In this position, Shaffer will oversee Kroger’s diversity initiatives, including supplier diversity and integrating the company’s ongoing commitment to create an inclusive culture into business and organization initiatives. Kroger says that it currently spends more than $1 billion with nearly 1,000 minority- and women-owned companies.

    • The National Grocers Association (NGA) announced the appointment of Brian D. Callahan as the Manager of Government Affairs.  Callahan most recently was a consultant on international trade, state level human resource and labor issues, and prior to that he worked for the American Bakers Association (ABA) as Manager, Federal Government Relations covering healthcare, labor and transportation issues. 
    KC's View:

    Published on: June 14, 2011

    Tonight I leave for Barcelona, where I’ll be spending the rest of the week covering the annual Consumer Goods Forum (CGF) Executive Summit. (This is what used to be called the CIES Executive Summit.) Coverage of the Summit is sponsored, by the way, by TCC Global ... and I hope you’ll watch their videos, check out their site, and pay attention to their programs.

    There’s no reason to think that delivery of MNB should be affected by the time zone differences, but you never know, especially because internet access can be a little dicey at times. But I’ll do my best to make sure MNB gets done in a timely fashion, and I thank you in advance for your patience.
    KC's View:

    Published on: June 14, 2011

    Yesterday, MNB took note of a Reuters report that “Cory Moll, a part-time employee at an Apple store in San Francisco, is working to form a union to fight for better wages and benefits and to address what he says are unfair practices in the company's glass-and-steel retail showrooms.” The story describes it as “a rare move at a company known for its near-fanatical following and cutting-edge mystique.”

    Moll says that the core issues are “compensation, pay, benefits.” He says that after four years as an employee at the Apple Store, he makes $14/hour. “The minimum wage for 2011 in San Francisco, one of the most expensive cities in the United States, is $9.92 an hour,” Reuters writes.

    Apple is not commenting on the unionization effort.

    We got a number of emails on this story.

    One MNB user wrote:

    I believe we are seeing the beginning of a renewed union movement…Apple is just a visible target…easy to get the article in the news.  Watch for similar articles about other high visibility targets…

    Another MNB user wrote:

    Unfortunately, I feel an issue is developing.  My 21 year old has worked at an Apple mall location for over two years now.  He has experienced a deteriorating culture.  Store managers are not leaders.  Store managers are paid bonuses on products/services sold (e.g. Apple Care) while the everyday hourly employees are not paid beyond their hourly wage.  They are pushed to up-sell by their managers without any perks for doing so.   Store hours are being cut and positions left vacant for extended periods of time so managers can turn in better profit numbers for their store.  As one of my son's co-workers put it:  "Yes, it is Apple.  But now it is becoming just another job in a mall."

    I’m shocked. If this is typical, it will be a major problem for Apple.

    From another MNB user:

    Wow. $14/hour for “Part-time” work. I think there are plenty of people that would take that for FULL-Time work. As for your comment that he “moonlights” as a “Skunk in a Garden Party”, I think it would be safe to assume the APPLE job IS his “moonlighting” job….

    And another MNB user chimed in:

    Let’s assume that Cory Moll was making $9.00/hr when he started 4 years ago.

    Now he’s at $14.00/hr.  That’s a 55.55% raise in 4 years. How many of us out have received that kind of increase in the last 4 years?  Even if he started at $9.92, that’s a 41.1% increase.  Does he really think unions are the answer?

    Also got an interesting reaction to the piece in which Pick n Pay in South Africa denies a possible acquisition of the company by Tesco:

    It is possible an acquisition by Tesco or another retailer may come eventually but Pick N Pay certainly wouldn’t maximize their sales price now. My sense from working with Pick N Pay is they  have a lot of disconnected operational priorities at the moment which impact their ability to stay shopper-focused.

    The move to centralized distribution, a move at least  a decade overdue, has been challenging from a brand, operations & financial standpoint. They are way over-SKU’d in many departments / categories.  Pick N Pay does not have national buying synergy. They are ramping up focus on Zimbabwe whilst changing the importance of the Score banner.  They have just introduced their “Smart Shopper” loyalty card and while sign-ups are on-plan, they are not leveraging “Smart Shopper” to create differentiation for their 9 million shoppers.   My sense is that Pick N Pay are more carefully considering vendor input but still don’t fully leverage the knowledge that exists among their major vendors.  In my opinion, they found out last year that “selling more” in an dis-inflationary economy requires different skills than when annual price increases are more certain.

    All of these priorities will ultimately enhance Pick N Pay’s value but there is a lot going on at their Kensington office. Making centralized distribution work is key.  Pick N Pay would be aided here if they get the respect and assistance from their Unions they have historically enjoyed.

    Last point I’d make: Taking nothing away from Gareth Ackerman or Nick Badminton, Pick N Pay misses Sean Summers focus on “priority execution” more than anyone wants to admit.

    This is a great example of the kind of stuff many of us would not know if not for the input from the MNB community. Thanks.
    KC's View: