business news in context, analysis with attitude

Published on: August 9, 2011

by Michael Sansolo


About a decade ago, when fad diets were sweeping the country a good friend and I were watching the strange way people ate at an industry meeting when suddenly he was inspired with a great philosophy. I didn’t write it down, but basically it was this: Everything in moderation, including moderation!

It always stuck with me as sheer genius. Because so much of life does go better with moderation, but without going overboard in a couple of places, without some personal passions life gets boring. I’m betting most of us have more than a few spots in our lives where moderation is regularly ignored. Remember I say this as a devoted baseball fan who grew up in the shadow of the most successful team in history (the Yankees) and has always passionately rooted for the other team in town.

So why does that matter this week? In essence it’s a long way around to an apology. Last week I wrote something that was not only wrong, it was the exact opposite of what I like to think is the key point in one of my regular speeches. Allow me to explain.

The issue came in my Friday column about how mindless some of us are getting when it comes to use technology and I think it was an important point. Yet at the end of the column, I suddenly pivoted and tossed all the blame for over-reliance on technology at Generation Y. For no good reason, I singled out this group as lacking people skills. So here’s the philosophical issue.

Living as I do now in the Washington, DC, area, it’s pretty apparent that most of the “leaders” around here seem to operate by the philosophy that they are never wrong and if they are wrong, they don’t admit it. I’m breaking with them here and now. What I wrote about Generation Y was wrong.

Because if I actually listened to my own speeches, what I hope I’m saying is that Generation Y as a group is different thanks to different skills and different experiences. They are no worse or better than other generations and we need to understand this as we hire and train them. But in truth, that’s wrong too because there is no prototypical Generation Yer just as there is no prototypical baby boomer. What’s more, there are no prototypical shoppers or shopping mood. That’s why the business of managing or selling is so complicated.

Yet I’m not writing this solely as an apology, but rather as an object lesson. I erred because I mistakenly drifted into a generalization, which is never a good thing in marketing, management or any other area of leadership. We succeed in understanding and managing differences, not bland generalities.

So for today I have a new philosophy: in general, no generalizations. Then again, my other new philosophy is: listen more than you talk and don’t be afraid to admit you’re wrong and make a change. Give me a few hours and I may have a couple more.

Lucky for me, I again have an idol. Go to YouTube.com and search for Kristin Chenoweth singing “My New Philosophy” from the show You’re a Good Man, Charlie Brown. You’ll understand me way better. It may get you thinking about the importance of finding a new philosophy and being willing to change an old one.


Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .

Published on: August 9, 2011

by Kevin Coupe

Whole Foods and The Container Store have teamed up for a back-to-school video that highlights how to pack healthy lunches for kids ... it does an excellent job of combining the two Texas companies’ competitive strengths: healthy foods, efficient storage, and environmental responsibility. And, it actually has a goal of selling stuff.

It is a smart combination. And an Eye-Opener.

You can see it here.

Published on: August 9, 2011

Fast Company has an interesting piece about a new company called PodPonics, which thinks it has harvested a new idea that will make more local produce available to neighborhoods around America.

According to the story, “PodPonics started in 2010 when founder Matt Liotta - a serial entrepreneur who has launched Internet, software, and telecom startups - noticed that demand significantly outstripped supply in the local food business ... Liotta decided to use recycled shipping containers as "grow pods," which are outfitted with organic hydroponic nutrient solutions; computer-controlled environmental systems to regulate temperature, humidity, pH levels, and CO2; and lights that emit specific spectrums at different points in the day. The system provides the exact amount of water, lights, and nutrients that a crop requires - so there is no wasted energy (though the pods are still hooked up to the power grid). In a 320 square foot area, PodPonics can produce an acre's worth of produce. The pods can be stacked on top of each other for more efficient use of space.

“The startup already supplies 150 pounds of lettuce, arugula, and other microgreens to restaurants (and a smattering of independent groceries) throughout the Atlanta area every week.”

The next step is ramping up production so that the company can provide locally grown produce to major chain grocery stores all over the country, as well as remaining efficient in its use of capital. The need, Liotta is convinced, is real.

"If you're looking to the future, most everybody agrees that fuel prices are going to go up and the population is going to rise. By the time we get to 2050, 60% of the world population will live in urban areas, and we will have 15% less arable land than we have today," says Liotta. "There's got to be a way to divorce arable land from food production if we're going to make it as a species."

Published on: August 9, 2011

Good piece in the New York Times about Pret A Manger, the British sandwich shop chain that after several years of trying to get its footing in the US, now “is slowly expanding in New York and other American cities with its own brand of grab-and-go food and, more significantly, a fresh approach to fast-food service.”

The fresh approach, beyond the unique food offerings centered around quirky British-style sandwiches, focuses on speed and smiles.

The Times writes:

“Pret feels almost nothing like an American chain. At a Starbucks in Midtown, you can wait 10 minutes for your latte during the morning rush. At Pret, the goal is to serve customers within 60 seconds. At some fast-food outlets in the city, cashiers might fling your cheeseburger across the counter, Frisbee-style. At Pret, they compliment your earrings.

“What makes Pret A Manger a compelling business case study is its approach to customer service and to training and motivating its staff. Yes, Pret happens to make sandwiches — but the lessons are worth knowing, whatever your line of work. Many businesses have trouble getting longtime employees to work well and, in particular, to work well together. But, Pret has managed to build productive, friendly crews out of relatively low-paid, transient employees. And its workers seem pretty happy about it. Its annual workforce turnover rate is about 60 percent — low for the fast-food industry, where the rate is normally 300 to 400 percent.”

At lot of this corporate culture is keyed to constant training and evaluation, along with a tangible reward system.

Here’s how the Times fleshes out the story:

“How does any company encourage teamwork? At Pret A Manger, executives say, the answer is to hire, pay and promote based on — believe it or not — qualities like cheerfulness.

“There is a certain ‘Survivor’ element to all of this. New hires are sent to a Pret A Manger shop for a six-hour day, and then the employees there vote whether to keep them or not. Ninety percent of prospects get a thumbs-up. Those who are voted out are sent home with £35 ($57), no hard feelings.

“The crucial factor is gaining support from existing employees. Those workers have skin in the game: bonuses are awarded based on the performance of an entire team, not individuals. Pret workers know that a bad hire could cost them money ... Pret reinforces the teamwork concept in other ways. When employees are promoted or pass training milestones, they receive at least £50 in vouchers, a payment that Pret calls a “shooting star.” But, instead of keeping the bonus, the employees must give the money to colleagues, people who have helped them along the way.

“There are other rewards. Every quarter, the top 10 percent of stores, as ranked by mystery-shopper scores, receive about £30 per employee for a party. The top executives at Pret get 60 ‘Wow’ cards, with scratch-off rewards like £10 or an iPod, to hand out each year to employees who strike them as particularly good. Pret has all-staff parties twice a year, and managers get a monthly budget of £100 or so to spend on drinks or outings for their workers.”

Published on: August 9, 2011

Advertising Age reports that Coca-Cola is ready to begin a new marketing effort behind its Freestyle vending machine, now that the equipment is reaching critical mass - it will be in 80 markets by the end of the year.

As the story notes, the computerized self-serve Freestyle soda fountain “serves up 125 different flavors of soft drinks, flavored waters, sports drinks and lemonades and sends usage data, such as what flavors are most popular at what times of the day, to Coca Cola HQ. Already the beverage giant is analyzing data pouring in from more than 1,500 machines in restaurants including Wendy's, Burger King, Taco Mac and Five Guys.”

Key to the retail support behind the machine is definitive data showing that restaurants installing the equipment generally see a double-digit sales lift that does not appear to recede.

Published on: August 9, 2011

• Reuters reports that Walmart’s check and card cashing service will “accept more types of checks and take more forms of identification from shoppers in a move aimed at getting them to spend more at the discount chain's stores.”

According to the story, Walmart, “which already cashes payroll, government and tax refund checks for customers, will now also accept student loan, insurance and pension checks up to $5,000, among other kinds of checks. Wal-Mart does not cash personal checks.”

Published on: August 9, 2011

• KOMO-TV News reports that “hundreds of workers of the Fred Meyer distribution center have voted to authorize a strike as they prepare for another negotiation session with their employer. The union workers, who work at the grocery chain’s Puyallup warehouse, made the decision over the weekend. The facility serves approximately 140 stores.”

The story notes that Teamsters at other area warehouses run by Safeway, Supervalu and Unified Grocers have reached contract agreements, but Kroger-owned Fred Meyer has not yet been able to strike a deal.

KOMO notes that “the two sides have extended their current contract until Aug. 15, when they are scheduled to reconvene at the negotiating table.”

Published on: August 9, 2011

• Rite Aid Corporation announced today that Susan Henderson - most recently a consultant for Chicago-based Gagen MacDonald, a strategy execution and employee engagement firm, and a former Vice President, Communications for Harley-Davidson - is joining the retail drug chain as Senior Vice President and Chief Communications Officer.

She succeeds Karen Rugen, who retired from the company last month.

Published on: August 9, 2011

Got a number of emails yesterday about my Walmart comments...

MNB user Mike Jones wrote:

Does anyone realize that we are still in recession? We have 9.0% listed unemployment, real number about 18%.

A great many of these people would and could be Walmart shoppers. Gas is at $ 4.00 per gallon to drive to Walmart. It’s fairly clear that it’s not the mix it’s the economy.

The only problem with that argument is that other retailers - like Target - are not seeing the same stagnation, at least not to this point.

One MNB user wrote:

When I ran a supermarket twenty years ago, I had a Wal-Mart that moved from one side of the shopping center we shared into a Supercenter on the other side of my store.   I had a 36,000 square foot building and, despite all of our preparations in advance of their opening, they took 40% of our sales on their grand opening week.   After two years we got all of our business back and more….but only after Wal-Mart closed two other competitors in our town.   With that being said, I have no love for the Bentonville Behemoth.

This past weekend, I had to take my high school-aged son out to purchase a new graphing calculator for his pre-calculus class that starts in two weeks.   Being a good consumer, he had done his own research to determine where to purchase the calculator and he insisted that I take him to a nearby Wal-Mart.   I agreed to do so with much consternation and parked in front of the entrance to the garden center of the store.   As we entered through the garden center, my son noted the employee who was seated in a chair inside the door and asked why she was sitting there.   Given that she did not greet us as we entered, I explained that she was likely more concerned with who was leaving the store than who was entering.   I then had to help him understand that they were staffing the doorway as a loss prevention measure.

We went to the designated “school supplies” section of the store only to find a mob of people.   The calculator could not be found.   At my son’s insistence, we then went to the electronics section and found the calculator on a locked display peg.   After almost 10 minutes, we finally found an employee with keys who retrieved the calculator from the peg and checked us out in the electronics department.   We later learned that the employee checking us out was more concerned with trying to sell me a $6 service agreement for the calculator than de-activating the RFID chip in the package.  (No, I didn’t buy the service agreement!)  As we exited through the same door we entered, the store’s alarm system was activated and the employee seated in the doorway called us back to the building to inspect our package.   Anticipating this possibility, I had the receipt ready in my hand.    After inspecting our bag and the receipt, the employee curtly apologized.   I suggested to the employee that if the salesclerk had been more concerned with properly handling our item at the checkout, she wouldn’t have to stop innocent shoppers and inspect their bags.   She indicated that it had consistently been a problem for that store to have customers trigger the theft prevention alarms who had paid for their purchases and could produce proof of having done so.   From the look on my son’s face, it was obvious that he was mortified at the thought that he could have been accused of shoplifting.  Knowing the reaction that my son had to this experience, it’s not hard to imagine why WM is not getting same-store sales increases.

And to add insult to injury…..the next day we found the same exact calculator in Target’s weekly ad for $5 less!

Another MNB user wrote:

I’m wondering if the people who run Wal Mart now  have forgotten what made it a great company, it happens so often when the person who started it bows out, retires, dies, the next generation doesn’t remember what it took for the originator to build the business.

If the employee on the front line doesn’t feel like the company cares at all about them, they won’t care much about the company beyond getting a paycheck.

MNB user Ken Wagar wrote:

Today you made the following suggestion regarding Wal-Mart.

Maybe it is time for Walmart to split itself up. Create four companies. US stores. Online. Sam’s Club. And International. And maybe they ought to be run out of four different places, not just Bentonville. Maybe it has gotten to the point that too many of Walmart’s leaders are living in the same neighborhoods, shopping in the same stores, golfing at the same country clubs, sending their kids to the same schools and attending the same churches. Maybe it has all gotten so insular that nobody is thinking outside the Arkansas box, despite their best efforts.Maybe it has all just gotten too big. Sure, Sam Walton ran a different kind of company, but it was, in fact, a different kind of company. Maybe in 2011, if he were still alive, Sam Walton would be encountering exactly the same kinds of problems.It is possible that Walmart has people issues, but it also may have structural issues that need to be resolved. And maybe it can only resolve these issues by rethinking what the company should look like for the next generation, and not be inhibited by legacies or structures or real estate.

I wonder how many people other than myself wanted to immediately edit and paraphrase your statement and send it on in the following manner:

Maybe it is time for The Federal Government to shape itself up.  And maybe members of that government ought to understand different places, not just Washington. Maybe it has gotten to the point that too many of the Government’s leaders are feeding at the special interest troughs, having their own pensions and health insurance paid for life, traveling on the lobbyist’s dollars, sending their kids only the best schools and refusing to accept any church or doctrine other than their own. Maybe it has all gotten so insular that nobody is thinking outside their own small box, despite their best efforts.

It may be that structural and policy issues need to be resolved. And maybe it can only resolve these issues by rethinking what the country should look like for the next generation, and not be inhibited by legacies or structures or extreme political positions.

At least one other person thought the same thing:

You say that Walmart should break up because it is “too big” yet you support larger government.  Which is it? Because bigger Government is not good either and I agree with your point about Walmart. Take out Arkansas and insert the beltway and you have the same situation.

The “KC wants bigger government” comments, I think, relate the following commentary from yesterday:

I suspect that an anti-tax argument is going to be a popular argument to make this year. I was just reading a piece in the new edition of Newsweek,/i> which says:

“The famed tax activist Grover Norquist, whose alliance with the Tea Party faithful during the debt debate helped kill off any talk of tax hikes, has already set his sights on harnessing the Tea Party for another big, and until recently unexpected, tax battle. The annual federal excise tax on gasoline—which funds road and bridge construction—is set to expire Sept. 30.

“Normally its extension is automatic, but Norquist hopes to unleash the Tea Party’s fury to block its renewal, betting that the appeal of shaving the price of $4-a-gallon gas will have populist appeal. It's an idea that rarely got much traction until the Tea Party appeared.”

Now, I’m not saying I like paying taxes. And I certainly hate the high price of gasoline. But who precisely are we going to blame if the bridges start falling down because funding for their repair has dried up? (Isn’t the nation’s crumbling infrastructure one of its big problems?)

All this stuff is linked together. And I feel like we’re playing an enormous game of Jenga, and at some point the whole thing is going to collapse.

One MNB user wrote:

I believe several months ago you had a Face Time regarding the Tappan Zee Bridge and how if the state had acted some 30 years ago, the project of repairing / upgrading would be tens of millions cheaper than it is today. Where was the annual federal excise tax some 30 years ago when the bridge needed some upgrading?

I think if it were to happen where we see bridges / roads crumbling and causing major accidents, there would be plenty of blame to go around. I hardly think the Tappan Zee Bridge scenario is an isolated incident of lackluster planning / action when it counted.. 30 years ago, and hell, even 20 years ago it would have saved so many millions! Just some food for thought.

Which prompted one MNB user to write:

How much of that tax actually goes toward maintaining and/or improving roads. Wisconsin has one of the highest gasoline taxes in the country and some of the poorest roads vs the surrounding states. As I mentioned in an earlier post, we summer in Wisconsin and winter in Arizona. We drive to and from and the worst roads we encounter are in Wisconsin. What does that say about the efficient use of our tax dollars???

It says that the roads you drive is Wisconsin - a state that has lousy weather during the winter - aren’t very good.

This may mean something broader. Or not.

Let’s be clear. I am not saying we need bigger government. Far from it.

We need more efficient and effective government. Just like we need better roads and infrastructure.

One MNB user yesterday sent me a link to the website of the American Society of Civil Engineers, which grades the nation’s infrastructure - giving it a “D” and saying that we need to spend $2.2 trillion over the next five years to get it up to standards. (The best grade we got was a “C+” for solid waste disposal.)

All I am saying is this. It makes no sense to me to simply get rid of an excise tax meant to fund bridge and road construction because of anti-tax fervor. I’ll accept on faith that there’s waste in how the nation’s infrastructure dollars are spent, but I sure don’t want to turn off the spigot without knowing where the waste is. ( I travel on way too many bridges and roads and use way too many airports to be comfortable with this.)
 



I got into this digression because I was arguing that bricks-and-mortar retailers ought to fight Amazon’s desire to not collect state sales taxes more aggressively:

I think that if I were one of these brick-and-mortar retailers, I’d fight fire with fire. I’d go head to head with the Amazon signature gatherers, suggesting to people that online sales collection is necessary and that my business, by collecting these taxes, does things like support local schools, the upkeep of public roads and sewer systems, the collection of local trash, and one and on and on. And if the referendum does take place, I guess I’d make this approach the centerpiece of a media campaign to reject the Amazon position.

Which led MNB user Mike Franklin to write:

IMHO Amazon.com’s business model is not sustainable without corporate welfare. This is the reason Amazon.com is fighting collecting sales tax in the areas in which the sale originated, their business model cannot sustain itself without socializing certain costs; you very aptly mentioned many of those costs in your article.

And, regarding Amazon’s collection of signatures to force a California referendum that will keep it from having to collect state sales taxes, MNB user John R. Hurguy wrote:

Last Friday while attending the 2011 US Open of Surfing in Huntington Beach, CA I was caught off guard by petition workers asking for signatures in support of the California referendum mentioned in the article.  The location made sense as there was a great deal of the target audience, (my guess 25-45 year olds) in attendance.




On still another subject, MNB user Jeff Folloder wrote:

Your reader that commented on the truck stop DVD kiosk was able to bring the image of Monty Python and the Dead Parrot skit to mind.  He (the commentor) needs to realize that the parrot (the DVD) is dead.  Sure, it might look like a nice parrot and it may, indeed, have lovely plumage.  But it's time to stop pining for the fjords!  Polly is stone dead.  E's not restin' and no lovely fresh cuttle fish will wake him.  Compression technology and pervasive bandwidth will soon be pervasive.  Even outside of metropolitan areas.  And at that point, maintaining the nostalgic touch of putting playing an old-fashioned movie on the DVD will be way too cost prohibitive.




And finally, MNB user Doug Ackerman wrote:

Scary quotes in the Eye-Opener.
 
“One in three Americans would rather give up sex than their smart phones.”

Apparently, one in three is doing it wrong...

And MNB user Steve Ritchey wrote:

In one of the Spenser novels, Spenser and Hawk are following someone in Spenser’s car, a little two seat sports car of some kind.  Hawk makes some kind of comment about it being a yuppie kind of car, and how would you get laid in this thing. 

Spenser answered “If one is a yuppie, one doesn’t get laid.”

Hawk replied, “Yuppies ain’t gonna last long.”

Same thing with smart phone users.

True.