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    Published on: July 12, 2011

    by Michael Sansolo

    There are very few absolute truths in business or life. Yet I think we can agree that there’s a very simple rule that everyone in business - and certainly every manager - should have posted somewhere to look at every day. It goes like this:

    Problems don’t improve with age.

    And while they are never simple to confront, it’s also true that most problems are far easier to deal with when they are small. Sadly the world forgets this lesson time and again.

    This past weekend, the single best-selling English language newspaper in the world shut down. In most weeks, the collapse of a newspaper would hardly merit an article; after all, the newspaper business is one of those most endangered by electronic communication. While this story revolves around electronic communication, that wasn’t the reason for the newspaper’s termination.

    Rather it was about ethics and ignoring a problem that grew out of control.

    If you missed it somehow, the British tabloid The News of the World ended up in a heap of hot water. Tabloids are rarely the standard bearers of decorum in any regard, but the News managed to go way further. The scandal that exploded in the United Kingdom centered on the newspaper hacking into the voice mail accounts of crime and terrorism victims and even war casualties.

    It’s really a terrible story of additional anguish forced upon families who had already suffered heartbreaking losses. But the business story goes further. The scandal drew the attention of the British Parliament in part because Rupert Murdoch’s News Corp., owner of the News, also is looking to buy a major British television network. In the end, News Corp. took the drastic step of simply closing the newspaper, but based on latest reports, the damage goes on.

    On it’s own, this could be a cautionary tale of hacking off a limb to save the body, but this story is about so much more.

    That’s because the recent scandal was hardly the first at the News. In fact, the issue of hacking voice mails had come up a few years back, in that case targeting the royal family. At the time, there were grumbles, some firings and even some criminal charges. But the News survived. This time, the victimization of innocent families made the problem far worse.

    News Corp. never addressed the root problem of the management team that created the culture that led to those earlier problems. As so often happens, the problem didn’t improve with age, it got worse. The scandal widened and in the end claimed the newspaper itself.

    The story isn’t likely to go away, and now the whispering extends to Murdoch: “What did he know, and when did he know it?” is the familiar question being asked, one that we’ve gotten used to in some of the political and personal scandals that have unfolded recently here in the US.

    Problems frequently start small and left unaddressed, they grow. Managers and co-workers turn a blind eye when just a small conversation might create a change. It might not be an easy conversation, but it’s one that must be had. Bad habits grow like a cancer, whether it’s the poor attitude inside a team, apathy toward a key purpose or worse, impacting food safety, theft and customer trust. In no time a small problem builds into a culture.

    We have to believe that if someone at The News of the World took action earlier, most of us in the US would know nothing of that newspaper today even though it would still be the largest seller in the English-speaking world. Instead, it’s out of business because when nothing firm was done, it made it seem right to behave wrongly and the problem simply grew.

    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: July 12, 2011

    by Kevin Coupe
    It had to happen.

    In Denver, Colorado, where medical marijuana has been legal since 2000, there now are almost 300 dispensaries for the drug - more pot shops, numerous stories say, than the city has Starbucks locations.

    And whether this is working for people using the drug, it certainly is working for another industry: the alternative newspaper business.

    According to KXTV News, two local alternative papers have seen a turnaround in their fortunes because all those dispensaries, driven by suddenly intense competition, need to advertise their products and services. Which is providing money for the papers to add staff and expand distribution, something that until recently would have seemed an unlikely scenario in the shifting media environment. One of the papers even added a “medical marijuana critic.”

    While it may be high times for these alternative newspapers, KXTV News says that most traditional media outlets are shunning the ads, believing that they would be seen as negative by other advertisers, who could pull their ads.

    But if the mini-boom in newspaper ad sales continues, one has top wonder how long traditional media outlets will be able to resist. After all, there are a lot of ads and commercials in the mainstream media for things that I never thought would be mentioned out loud ... so it is hard to imagine how medical marijuana won’t eventually be added to that list.

    Either way, it’s an Eye-Opener ... and a lesson in unintended consequences.
    KC's View:

    Published on: July 12, 2011

    The Los Angeles Times this morning reports on a new study, just published in the Archives of Internal Medicine and authored by the Nutrition Transition Program at the University of North Carolina in Chapel Hill, saying that “better access to supermarkets — long touted as a way to curb obesity in low-income neighborhoods — doesn't improve people's diets ... The study, which tracked thousands of people in several large cities for 15 years, found that people didn't eat more fruits and vegetables when they had supermarkets available in their neighborhoods.”

    There are two reasons, according to the study: “Grocery stores are brimming with choices that are every bit as fattening as fast-food meals.” And, “the prices of healthful grocery store foods are often higher than fast-food prices.”

    According to the story, “the researchers found that living near fast-food restaurants was associated with a greater consumption of fast food, especially, in this case, among low-income men. But the scientists also found that easy access to supermarkets was not linked to a greater consumption of healthful foods such as fruits and vegetables, low-fat dairy products, lean meats and whole grains ... The findings are significant because in recent years, policymakers have been pushing for guidelines that limit the number of fast-food restaurants in low-income neighborhoods based on studies reporting lower obesity rates in communities with more supermarkets and fewer fast-food chains.”
    KC's View:
    Interestingly MarketWatch reports that Walgreen is bringing its “Food Oasis” concept to one of its San Francisco units with a store in the Bayview section there that “offers a larger assortment of fresh fruits, vegetables, whole grains, beans, lean protein and other healthy meal components to help address the need for greater access to affordable, nutritious food in this community. The neighborhood, identified as a food desert, has long lacked options for foods necessary to maintain a healthy diet.”

    Just putting fresh and nutritious food in previously underserved neighborhoods isn’t enough; it is hard to change long-held habits. But I have to believe that at some level, this is a matter of marketing. I have a sense of how many marketing dollars are spent to sell a Big Mac or an order of fries, and I think it is fair to say that not nearly as many dollars are spent to sell tomatoes or broccoli or carrots.

    Published on: July 12, 2011

    Supervalu yesterday issued a statement saying that it “is not removing the self check-out lanes from the 460 Albertsons stores that it owns and operates in Idaho, Oregon, Montana, Nevada, Southern California, Utah, Washington state and Wyoming.”

    The statement was made after Albertsons LLC - a separate entity - announced last week that it “is pulling all the self-checkout lanes from the roughly 100 of its stores that have them ‘in an effort to encourage more human contact with its customers’.” Some news outlets (but not MNB) reported that the Supervalu-owned Albertsons were also making a similar decision.

    "Despite many incorrect reports, Albertsons stores owned by Supervalu will continue to operate self check-out lanes," said Lilia Rodriguez, a company spokeswoman. "Since this story broke last week, our customers have called us and we learned first-hand that they want and appreciate the convenience of self check-out lanes."
    KC's View:
    Got lots of interesting emails about the Albertsons decision ... check them out in “Your Views,” below.

    Published on: July 12, 2011

    Thanks to a watchful MNB user who sent me a link to, I had a chance to take a look at a report on obesity issued by Trust for America’s Health and the Robert Wood Johnson Foundation, entitled “F as in Fat: How Obesity Threatens America’s Future 2011.” And here are a dozen eye-opening statistics, identified by Fooducate, to which attention should be paid:

    Adult obesity rates rose in 16 states over the past year. Not even one state decreased.

    Twelve states, led by the southeast, now have obesity rates above 30 percent: Alabama, Arkansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Oklahoma, South Carolina, Tennessee, Texas, and West Virginia.

    Just 4 years ago, one state was above 30%.

    Obesity rates exceed 25% in more than two-thirds of states (38 states).

    Mississippi had the highest rate of obesity at 34.4%.

    Colorado had the lowest rate at 19.8% . It is the only state with a rate below 20% (but next year will probably be above)

    Adult diabetes rates increased in 11 states and Washington, D.C. in the past year. In eight states, more than 10% of adults now have type 2 diabetes.

    Education matters. High school dropouts have the highest rates of obesity (32.8%).

    Money matters. Households that make less than $15,000 have a 33.8% obesity rate. Households that have an income above $50,000 have “only” a 24.6% obesity rate.

    Over the past 15 years, seven states have doubled their rate of obesity. Another 10 states nearly doubled their obesity rate, with increases of at least 90%.

    Over the past 15 years, diabetes rates have doubled in ten states. In 1995, only four states had diabetes rates above 6%. Now, 43 have diabetes rates over 7% and 32 have rates above 8%.

    12. Ten years ago, no state had an obesity rate above 24%, and now 43 states have higher obesity rates than the state that was the highest in 2000.
    KC's View: suggests in its coverage of the report that this is a state of emergency, and that a variety of forces - public and private - need to be marshaled in order to deal with a problem that has national security and public policy implications. And it makes an argument that will be anathema to at least some MNB readers - that this is not a matter of giving more power to the “nanny state,” but rather is about intelligent public policy designed to inform and protect consumers rather than reward big manufacturers through subsidies and tax breaks that perpetuate harmful behavior.

    I’m not sure how one can read these statistics and not conclude that there are national security and public policy issues at stake here.

    Published on: July 12, 2011

    Advertising Age has an interesting piece about the complicated relationship that the retail business has with so-called “extreme coupon” users who exploit the system by using coupons so aggressively that they “game the system” and hurt both manufacturers and retailers.

    “Retailers are now responding,” Ad Age writes. “Chains are updating their policies, with some adding more restrictions and others posting rules for the first time ... Among those making changes is Target, which has updated its policy to clarify that two buy-one-get-one-free coupons cannot be combined to make both items free. Rite Aid tightened its rules on multiple coupons, specifying that it ‘may accept up to four identical coupons for the same number of qualifying items as long as there is sufficient stock to satisfy other customers.’ Walgreens began posting rules last year, stating that ‘management reserves the right to limit quantity of items purchased.’ Even Publix, a grocery chain known for its lenient coupon rules, issued a formal policy in May.”

    On the other hand, retailers “don't want to appear too stingy, for fear of losing business, and are only seeking to keep out the abusers. And in an age where an army of mommy bloggers watch -- and report on -- their every move, one false step can prove fateful.” Supervalu consults with the bloggers, the story says, in order to make informed decisions, and Piggly Wiggly has gone so far as to sponsor talks by “celebrity couponers,” saying that it wants to encourage the use of coupons in its stores, just not the abuse of coupons by a small minority.

    Ad Age notes that coupon abuse “is by no means an epidemic. Coupon redemption is relatively flat as of late -- at 3.3 billion redemptions in 2010 -- and is down from the recent peak of 4.4 billion in 2000, according to a report by Nielsen and Inmar. Still, the percentage of consumers who are heavy users, or ‘enthusiasts,’ is on the rise, growing to 13% of all households in 2010, up from 11% in 2009, according to Nielsen. Of all coupons used in 2010, 70% were redeemed by enthusiasts, defined as those who bought at least 188 items in a year using coupons. It is this group that can pose challenges for retailers by tying up lines, clearing shelves and upsetting otherwise predictable supply-demand formulas.”
    KC's View:
    I have to admit that I simply don’t get the whole extreme couponing thing. It seems to have a lot more to do with satisfying compulsions than saving money ... and there seem to be so many more things that one could be doing with one’s time. But that’s just me.

    Published on: July 12, 2011

    The Bellingham Herald reports that the Bellingham City Council has voted unanimously to ban most plastic shopping bags, an ordinance expected to take effect in about a year.

    According to the story, “Besides banning the use of lightweight disposable plastic shopping bags, the ordinance would require retailers to charge customers five cents for each disposable paper bag they use. The extra nickels are meant to help retailers cover the higher cost of the paper bags while giving shoppers an incentive to remember their reusable bags.”

    The paper says that recent support for the proposal by Haggen, the supermarket retailer, helped to push the bill over the finish line. It also says that activists are hoping to get a similar measure considered by Seattle authorities; a more stringent ban was put in place several years ago, but eventually was defeated by voters at the polls.
    KC's View:

    Published on: July 12, 2011

    In Toronto, the Globe and Mail reports that when Target begins opening stores north of the border in 2013, fresh food will be part of the mix ... though the company has no plans to open superstores in Canada.

    The Canadian stores are expected to be similar to the “p-fresh” format stores that Target has been opening in the US.

    The story notes that “the advent of Target stocking an array of foods such as fresh vegetables and fruit will inevitably pinch incumbent grocers, which are already feeling stretched from heavy competition. Discount heavyweight Wal-Mart Canada Corp already is racing to add full grocery sections to its Supercentre stores, while other retailers, such as Shoppers Drug Mart, are expanding their food offerings.”
    KC's View:

    Published on: July 12, 2011

    The Associated Press reports that Starbucks is reorganizing its executive ranks so that it is better set up for international growth.

    According to the story, Starbucks said “it would divide responsibilities for its business into three global regions: Asia, the Americas and a region containing Europe, the Middle East and Africa. Starbucks, the coffee giant, now has two units, the United States and international ... John Culver, who leads the company’s international business, will be president of the China and Asia Pacific region.

    “Cliff Burrows, president of Starbucks United States, will head the Americas region, which encompasses the United States, Canada, Mexico and Central and South America.

    “Michelle Gass, president of Seattle’s Best Coffee, was named president of Starbucks’ Europe, Africa and Middle East region.

    “Other changes announced Monday include transferring responsibility for Seattle’s Best to Jeff Hansberry, head of the company’s global consumer products and food service business. Annie Young-Scrivner, global chief marketing officer, will also oversee its Tazo tea business.”
    KC's View:

    Published on: July 12, 2011

    Bloomberg reports that “South Africa’s parliamentary portfolio committee summoned the nation’s antitrust authorities to explain why Wal-Mart Stores was allowed to purchase a controlling stake in Massmart Holdings” there. The request comes even though the deal already has been concluded, and Walmart has begun exerting control over the company’s operations.
    KC's View:

    Published on: July 12, 2011

    • Unified Grocers announced that Williams Incorporated, which operates four retail grocery stores under the Alaskan & Proud banner in southeastern Alaska, has become a member of Unified Grocers and will begin receiving groceries and other supplies from Unified on August 1, 2011. Alaskan & Proud had previously been supplied by Supervalu for more than twenty

    Drug Store News reports that Ahold-owned Giant-Carlisle “plans to open its first store in Philadelphia next week,” a 74,000-square-foot unit that is the company’s first within the city limits, though it already has stores in the suburbs.

    USA Today this morning reports on how various companies are offering low-calorie products that they believe weight-conscious people will buy because they are clearly labeled.

    For example, the story says, Starbucks is rolling out “Bistro Boxes: small meals under 500 calories, such as Chipotle Chicken Wraps and Sesame Noodles, that cost less than $6. The move comes four months after the chain's rollout of its Petites line of bite-size desserts.” And Kraft has “reinvented the SnackWell's line with sweet popcorn and brownie bites.”

    "Americans don't want to think about it," Carolyn Costin, a food psychologist, tells the paper. "We'd like to be able to stop in a place and have our food made, packaged and certified for us as just enough."

    • The Detroit Free Press reports that the Grand Traverse County prosecutor has decided to drop an investigation into allegations of improper campaign activities by Meijer in 2007 because “it is out of his jurisdiction,” but will be referring the matter to Kent Count prosecutors. According to the story, the state of Michigan already has fined Meijer $190,000 for violating campaign laws, related to its funding of “a 2007 attempt to recall the Acme Township Board over a zoning dispute.”

    • It is time to make the money, apparently. Bloomberg reports that Dunkin’ Brands Group - parent company to Dunkin’ Donuts - is hoping to raise more than $460 million when it goes out with an initial public offering later this year.
    KC's View:

    Published on: July 12, 2011

    Some interesting reactions to the Albertsons LLC decision to get rid of self-checkout, on the premise that it was getting in the way of human interaction between customers and employees.

    MNB user Ben Ball wrote:

    News flash to Albertson’s: just because you want to talk to me doesn’t mean I want to talk to YOU. In fact, I don’t want to talk to you when I go to the self-scan line unless I need to prove I’m 21 or that I’m really the owner of the credit card I just swiped on the over $50 order. If I need to ask you something I want you to be accessible – and to ACT accessible, not like my question is an imposition on humanity. You need to offer both to win my business.

    I suggested yesterday that self-checkout and human contact are not mutually exclusive, that “they ought not be used as labor savings devices, but rather as a way to put some folks out in the aisles, interacting with shoppers, providing information, maybe even (gasp!) making sales.”

    Which led MNB user Tom Schaefer to write:

    I’ve always thought the self check lane is a great place to talk, sell, and interact with customers without being tied to a cash register.  Why not ask if they found everything, suggestive sell, and simply make them feel like a welcome guest at your store.  I like self checkout because it makes checking out a bit different, interesting and often times quicker.  However, if I have a full cart I’m headed for a staffed register.

    MNB user Chris Connolly wrote:

    This one will be interesting to watch.

    Companies that make wholesale decisions to pull all of their self checkout lanes in one fell swoop may actually be doing themselves harm……when you consider that 35% of customers now say they like and will use self checkouts if available.   I think it will require a significant commitment to front-end staffing and quick responses to customer traffic (calling up help, opening checkstands, etc.)  to keep from offending those customers who perceive that they can check themselves out faster than a cashier can.

    And another MNB user wrote:

    I agree with your statement that human contact and self-checkout don't have to be exclusive. In fact, they usually aren't. It seems that just about every time I attempt to use self-checkout, the machine doesn't work, and I have to get help! And I have to wait even longer, because the poor schlub in charge of the self-checkout is busy helping everyone else in the same predicament.

    But seriously, some people prefer no human contact. They just want to get in and out and not have to deal with the checkout girl asking if they want to donate to the homeless ostrich fund or if they need help getting to the car with their one quart of milk.

    I love emails like this one from MNB user Daniel McQuade, which offer observations of retail well-done:

    Was at Trader Joe's in Chelsea on a recent weekday night about usual place is busy and a line of 40 people waiting to check out. Now most people are shopping by themselves and have their hand basket loaded. I am there with my wife so I am running around getting stuff while she waits in the line. Once I finished and was waiting with her, 2 TJ's crew members coming walking by the line asking "does anyone need something they may have forgot...I will get it for you". Next thing you see them running off getting the requested items for those in line that needed a few more things. Now thats "interacting" with customers.

    It was great and smart...very smart!

    On the subject of fast food chains beginning to offer alcohol for sale, one MNB user wrote:

    I think this is a great idea. While they're at it, the fast feeders can use this to respond to the push to stop marketing to kids. They simply replace toys with a bottle of beer and have a new definition of the happy meal.

    Another MNB user wrote:

    Sonic’s Happy Hour ½ price drink menu could take on a different spin by offering Beer Lime-Ade!

    And, from yet another MNB user:

    Maybe it’s just me, but it seems like offering alcoholic beverages may not be the right move for any type of restaurant that has a drive through window…

    I used a suggestion that eventually there could be self-driving cars on the road as a metaphor for progressive retail thinking yesterday, which prompted MNB user Katherine Dykes to write:

    Self-driving cars?  Bah!  Where are the FLYING cars?

    On “The Jetsons.”

    Finally, responding to yesterday’s comments about Derek Jeter, MNB user John Parvin wrote:

    Well said about A life long Red Sox fan and Yankee hater, I have always admired, respected, envied, and even desired to have Jeter come to the "light" side.  Nothing but respect for this true role model and champion.  Reminds me of a Baltimore guy with the name Ripken, only with a lot more rings!! 

    Let's hope Pedroia, Youk, Ellsbury, or any of our guys can come close some day.

    KC's View: