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    Published on: July 29, 2011

    by Kevin Coupe

    With all the debate, accusations and recriminations taking place in Washington, DC, these days as they debate the debt ceiling and the broader economic crisis, here’s a note from Business Insider that is a definite Eye-Opener.

    According to the story, the US Treasury’s latest daily statement says that the government yesterday had an operating cash balance of $73.8 billion.

    Compare that to Apple’s last earnings report, which said that the iconic company had $76.2 billion in cash and marketable securities on hand at the end of June.

    “In other words, the world's largest tech company has more cash than the world's largest sovereign government,” Business Insider writes.

    Of course, there’s a good reason for that: “Apple collects more money than it spends, while the U.S. government does not.”

    KC's View:

    Published on: July 29, 2011

    The Wall Street Journal reports at this hour that the US Commerce Department says that “gross domestic product rose at an annualized seasonally adjusted rate of 1.3% in April through June, while first-quarter growth was revised down sharply to a 0.4% rate from the earlier estimate of a 1.9% gain. A big reason behind the downward revision in first-quarter growth was that the inventory buildup by companies was less than initially estimated, while outlays by the federal government and consumers were also revised down.”
    KC's View:
    In general, sales at the nation’s stores are described as either stagnant or down, while the still-high unemployment rate constrains spending both by families without jobs and families worried about the future - which is an increasingly large subset these days.

    The debate and seeming inability of the US government to come to any sort of conclusion or compromise in the debt ceiling debate is adding to consumer discomfort.

    Published on: July 29, 2011

    The Chicago Sun Times reports that “daily-deals site Groupon launched its first packaged-goods deal on Thursday for Unilever-branded popsicles and ice cream at Jewel-Osco grocery stores.

    “The deal offers $15 worth of Popsicles, Breyers, Ben & Jerry’s, Good Humor and Klondike products for $9. Jewel-Osco shoppers buy the deal upfront and enter their loyalty card number to download the value. The credit is redeemed at checkout when the card is scanned. Those without a loyalty card are asked to sign up online.”

    According to the story, there was other news on the daily deals front: The Sun Times writes, that “Amazon started offering its daily deals to Chicagoans today via its AmazonLocal product. The first deal is 60 percent off food and drink — an $89 meal for $35 — at Real Tenochtitian Restaurant.”
    KC's View:
    I can’t help but feel that at this moment, when it seems like the economy could crumble around us, things like daily deals are going to gain a lot more momentum and get a lot more traction. There are risks, I’d guess, from long-term pricing implications ... but the short-term attraction of getting more people into the store will be hard to resist.

    Published on: July 29, 2011

    Crain’s New York Business reports that a new poll conducted by Quinnipiac University says that “by a 63% to 32% margin, voters say that city officials should allow Walmart to open up shop in the five boroughs ... That's up from a 57% to 36% margin in a Quinnipiac survey in March.”

    According to the story, “Unions have led local opposition to Walmart's entry, arguing that the retailer's labor practices are substandard, but the new poll showed union households felt officials should let Walmart in by a similarly wide margin, 62% to 36%.

    “By a 69% to 27% margin, New Yorkers say they would shop at a Walmart if the retailer opened up shop in the city, virtually unchanged from the previous poll.

    “The poll showed that 72% of voters agreed that Walmart's lower prices would benefit New Yorkers; that 70% of voters agree that the retailer's low prices hurt small businesses; and that 51% feel Walmart does not pay its workers enough. A quarter of city voters said they currently shop at Walmart stores in the metropolitan area.”
    KC's View:
    I think this debate is over, even if the parties don’t realize it. Walmart is going to start opening stores in NYC ... it is a matter of where and when.

    And again ... think of how the bad economic news makes Walmart more attractive, even to hardened New Yorkers.

    Published on: July 29, 2011

    Call it yet more evidence that the Blockbuster era is over.

    The Los Angeles Times reports that Coinstar says that its Redbox DVD rental kiosk revenue was $363.9 million in the three months ended June 30, up 34 percent from the same period a year ago. Operating income surged 99 percent to $74 million.

    The numbers came in as Redbox started expanding its offerings by providing video game rentals in addition to movies at many of its kiosk locations. The company now has 33,000 locations, up from 31,800 three months ago.
    KC's View:
    Several people have told me that Redbox is so backed up with requests for its kiosks that it doesn’t even want to talk to companies with too few locations to make a deal worthwhile. Not sure what the threshold is, but clearly Redbox has a tiger by the tail at the moment.

    Published on: July 29, 2011

    In an letter to the editors of the New York Times, Joseph T. Hansen, president of the United Food and Commercial Workers International Union (UFCW), has criticized the Obama administration for embracing Walmart as part of its efforts to get more supermarkets and fresh food offerings into so-called “food deserts” around the country.

    The letter reads:

    The White House’s decision to pay tribute to Wal-Mart for agreeing to open or expand stores in areas designated as “food deserts” was misguided.

    Wal-Mart has a history of destroying good jobs in the communities it enters and creating jobs that perpetuate the cycle of poverty — leaving more workers unable to buy healthy food for their families.

    Instead of honoring Wal-Mart, the White House should laud employers who are creating good jobs with benefits that can support a family and challenge Wal-Mart to do the same.
    KC's View:

    Published on: July 29, 2011

    The Chicago Tribune reports that McDonald’s is expanding its menu in France by adding a baguette bread stick, which it hopes will help it “conquer Gallic hearts and palates.”

    According to the story, “The food chain that first ventured into France with an offer of burgers, french fries and milkshakes at the end of the 1970s, has made concessions to critics over the years by adding salads and fruit to its offering. Now it hopes to pander to tradition and add the waft of warm baguettes to the myriad other odours and attractions of its outlets in France.”

    The story goes on: “French people eat nine sandwiches for every single burger they tuck into, according to an consultancy estimate, and most of those sandwiches are made with the traditional French baguette stick of bread...”
    KC's View:
    The shift in emphasis, as described by a Mickey D’s executive, is interesting. He says that McDonald’s came to France using the philosophy that it wanted to offer people there a taste of America; now, it wants to become more localized in its offerings.

    While I am personally offended that McDonald’s would ever be defined as representative of American tastes, and I’ve always been perturbed by the presence of a McDonald’s when sauntering along the Avenue des Champs-Élysées, I have to concede that the fast feeder seems far more adaptable and nimble than I ever would have anticipated.

    But, food snob that I am, I’d still rather get a baguette and coffee from a little French bistro than from McDonald’s.

    Published on: July 29, 2011

    MarketWatch reports that Starbucks plans to open 800 new stores in the coming fiscal year, a 33 percent increase over its store opening rate during the past year. A quarter of these units will be in the US, with the rest overseas; China alone will represent 25 percent of the overseas total, or 150. Starbucks has said it wants to have 1,500 stores in China by 2015.
    KC's View:
    I wonder if the folks at Starbucks are breathing their own exhaust. That’s at least a possibility, since they are getting aggressive about store openings at the same time when the economy seems to be shaky ... which, history suggests, isn’t a good idea. (If it doesn’t work, I wonder who Howard Schultz will blame this time?)

    Published on: July 29, 2011

    USA Today reports that Dove Ice Cream is trying to drum up business by sending an “adults-only” ice cream truck to business districts in a number of metropolitan areas - Chicago, Minneapolis, Baltimore - where it has been giving away not just Dove bars, but also massages and manicures.

    "We created a one-of-a-kind ice cream truck to help adults relive their childhood, but in a truly decadent, grownup way," Craig Hall, general Manager of Mars Chocolate North America, tells the paper.
    KC's View:

    Published on: July 29, 2011

    We continue to get email reacting not just to Wednesday’s piece by Kate McMahon about an ad campaign developed by the “Got Milk?” folks that positioned milk as a way to temper the effects of pre-menstrual syndrome (PMS), but also to the emails posted yesterday that criticized Kate and others for not finding the humor in the campaign.

    One MNB user wrote:

    Suggesting that a woman who is upset about something is simply PMSing is basically saying that she has no grounds for being upset in the first place.  It invalidates whatever she’s saying.  It also reinforces the notion that women are -- by nature -- irrational, hysterical and shouldn’t be taken seriously.   That’s the issue, in my opinion.   The point was poetically proven by the people who suggesting that Kate herself was PMSing when she wrote the piece.  See how that invalidates her point?   Sexist jokes are no funnier than racist jokes, but they’re still socially acceptable in 2011.

    And another MNB user wrote:

    Kate—I WHOLEHEARTEDLY AGREE with you. Bashing women for crap like this seems to be the last bastion of sanctioned open prejudice. Let’s see how “funny” black people would find it if a commercial for, say, malt liquor were aired in prime time with full-on stereotyping. To echo Kate’s exasperation, COME ON!! I personally am so stinkin’ SICK of this BS passing for acceptable advertising to the hordes of blank-staring consumers with very low standards for humor. I will ALWAYS flip channels the instant some dumb, chirpy bath tissue commercial comes on (“Let’s get real with what goes on in the bathroom”—no, let’s not), and will do the same thing if some creepy ED promo starts.

    My best defense is streaming  videos and TV series, which right now I can only do downstairs (vs bedroom TV w/basic cable only). I heart Netflix but when the price hike kicks in this Sept I’ll be switching to Amazon Prime for free shipping AND free streaming!

    BTW, I’m a female, have 3 kids, love performance cars, do kickboxing, and am an early adopter with a Boxee streaming device I had upstairs until our older LCD TV crapped out. I use it to watch great internet-based content FREE. No commercials to deal with in any way whatsoever. So take THAT Madison Ave—maybe you should get your cliché ridden heads out of your rear ends and look around at the real world once in a while. Because there’s a whole generation of viewers who are rapidly turning to the internet (and not just HULU either) who do not see mainstream TV as their 1st choice. Deal with it!!

    Thanks—and keep on telling the truth the way you do so eloquently! The mindless masses need to be challenged to think once in a while.

    Wow. Now that’s what I call a spirited defense.

    And, continued email about Michael Sansolo’s column about aging baseball stadiums and their lack of amenities, and mine about lessons that can be learned from minor league baseball teams.

    One MNB user wrote:

    Putting together the baseball stadium electronic media ideas with in-store electronic media would definitely help sell the individual store or chain.  Can you imagine 15 or 20 inch TV screens above the Produce bins, the Cheese sections, the Bakery gondolas, even meats SELLING what was in the bin?  Giving its’ features, benefits, and uses would work.  Using the screens as a revenue source is possible but could ruin the intent to create and sell the individualism of the store or chain.  Bet sales volumes would increase particularly with the electronic savvy demographic that is used to getting information from this media.  It  would also work great for the impulse buyer.  Isn’t that the kind of transference of and use of media that you and Michael were getting at?

    And MNB user Craig Espelien wrote:

    Good morning – love the discussion about minor league ball vs. major league ball.  The commentary is right on.  I am, however, not sure you took the analogy far enough today (FaceTime).  If you look at minor league ball, as Kevin stated, the need is to build the “brand” – the team, the stadium, the experience, and the collective offering of “products” rather than individual products.  This is where most retailers miss out as they become too much about the things inside the four walls rather than the entire experience of the four walls.  If we go even further, private brands are sort of like those minor league players that get called up two or three times a year – some people know their names but most folks just see another “body” (or product) that is part of the team.

    Savvy retailers will elevate their stores – and their products – to superstar status by celebrating the interconnectivity of all of the pieces.  In effect, they would celebrate the team – not each individual player (or brand) as those players (brands) may become famous somewhere else (as a long time Minnesota Twins fan, there are lots of ex-Twins who went on to superstardom elsewhere when the Twins were a glorified minor league club) and the only way to create longevity is to build the overall brand – and those fringe players who will always be part of the home team!!

    Play ball. 
    KC's View:

    Published on: July 29, 2011

    The Boston Globe reports that JetBlue Airways, looking to build traffic among business customers, has come up with a new pricing program designed to appeal to its Boston-based frequent fliers.

    According to the story, “From Aug. 22 to Nov. 22, passengers can take an unlimited number of flights from Logan International Airport to any JetBlue city - 55 in all - for a flat rate of $1,999. For $1,499, Boston pass holders can fly to 13 nonstop destinations, mainly on the East Coast.” The Globe notes that there is limited availability: “The BluePass went on sale yesterday and will be available until Sunday, or until the passes sell out.”

    I’m always intrigued by unconventional business decisions, and this would certainly seem to fall in that category. If you want to attract new customers, sometimes you have to shake things up and do something that is attention-getting.

    I’ve just upgraded my laptop operating system to Mac’s OS X Lion, which came out this week. In addition to all sorts of cool changes that make the laptop trackpad act more like my iPad and iPhone, there also is another interesting change - no software disk. For the time being, at least, Lion is available only as a download - it takes a bit of time, and a good broadband connection necessary. But when you think about it, there’s really no reason for a disk...

    Apparently, next month Apple will be making Lion available via a USB flash drive for $69, which is more than twice as expensive as the downloadable version. Some may want the security of having as physical copy, but that strikes me as 20th century thinking; the accoutrements of the past are being cast away, and we might as well get used to it.

    Had a chance the other day to have a wonderful lunch of blackened red snapper at Lulu’s at Homeport Marina, right on the Intracoastal Waterway in Gulf Shores, Alabama. Lulu’s is owned and operated by Lucy Buffett, sister to MNB’s favorite troubadour, and it is quite an operation - I was expecting a little seafood restaurant on the water, and instead found a restaurant on the scale of the largest Margaritavilles.

    It was interesting, though. I was sitting at the bar, sipping on a beer and trying to decide on lunch, and the bartender gave me a short course on the transparency and sustainability efforts that have been made to ensure that the red snapper is entirely traceable. Which was impressive. Almost as impressive as the basket of fish, which also included delicious jalapeno hushpuppies. Yummm...

    Mrs. Content Guy thought I was crazy to drive more than two hours for lunch ... but I wasn’t done with my visit to Lulu’s. After I went there, I swung by Pensacola Beach and stopped by the Margaritaville Beach Hotel - which I found to be as isolated and unassuming as I expected Lulu’s to be. Especially Land Shark Landing, a little beach bar next door that had cold beer, warm breezes and a beautiful view of the pristine Gulf beach.

    The temperature may have been hot and the humidity may have been high, but it was totally cool.

    Got an email last week asking if I could recommend a couple of good craft beers for summer. Which I am pleased to do.

    We’ve been enjoying Brooklyn Summer Ale in our house, especially on hot evenings, which goes down cold and smooth and with a little more body than one might expect from a summer beer. Just great.

    And my son Brian, who is learning the beer and wine retail business, has become a total fan of Victory Whirlwind Witbier, which he says is totally worth the effort it sometimes takes to find it.

    So there you go.

    As for wine...

    The heat and humidity has meant that we’ve been enjoying cold white wines this summer, and here are two that I can recommend wholeheartedly: the 2010 Catamayor Sauvignon Blanc, and the 2008 Paradise Ridge Chardonnay. I like them really, really cold, and they both have a nice complexity - one a little sweeter than the other - that can stand up to a few hours in the fridge.

    BTW...the Catamayor is one of the MNB wine club selections, available from Nicholas Roberts Ltd., which powers our club. The July wine club selections are still available for limited time, and to get more information, about this new MNB offering CLICK HERE.

    One other thing...Brian’s education in the wine business means that he brings home some incredibly interesting wines - and this week he was kind enough to share with us a 2003 Chateau Quinault Saint-Emilion Grand Cru, which was an amazingly smooth red wine perfect with grilled steak. Or juicy hamburgers. Or just sipping. It was amazing. Not cheap, but amazing. (I’m also amazed that my son not only brings this stuff home, but is learning to appreciate it. Wow.)

    On other thing. I got a couple of emails this week asking why I had not mentioned the death of singer Amy Winehouse, especially since I love to reference pop culture whenever I can.

    The reason was simple. Self-destruction annoys me.

    That’s it for this week. Have a great weekend, and I’ll see you Monday.

    Fins Up!
    KC's View: