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    Published on: December 2, 2011

    by Kevin Coupe

    The inevitability of change is a constant subject here on MNB, and for that reason I want to suggest that you read a piece on that looks at how cities all over the country are looking to eliminate or at least dilute the car culture, usually by tearing down freeways.

    An excerpt:

    “The drive to tear down the huge freeways that many blame for the inner-city blight of the ’60s and ’70s is one of the most dramatic signs of the new urban order. Proponents of such efforts have data to show that freeway removal is not at all bizarre, that we can return to human-size streets without causing a gridlock apocalypse. And that may be true. But pulling down these shrines to the automobile also feels like a bold rewriting of America’s 20th-century urban script: Revenge of the Pedestrian. This time it’s personal.

    “Ready or not, decision time is upon us. Many of these highways were built to last between 40 and 50 years — they’ll soon need to be either repaired or reinvented.”

    There may be no better example of what the elimination of a freeway can do for a city than San Francisco, where they actually got a helping hand from nature. There had been plans to tear down the Embarcadero Freeway, but when a 1991 earthquake severely damaged it, the government went ahead and finished the job ... and in doing so, revitalized the waterfront. (I’ve talked to people in Seattle who actually are hoping that an earthquake does the same thing for the highway that blocks that city’s downtown from much of the water.)

    What’s interesting about this story is that when many of these freeways and highways were built, nobody thought about their perishability, or about the long-term impact they might have on urban landscapes. They were constructed, I suspect, with the best of intentions but by people and governments wearing blinders. They could only see what they wanted to see, or what would support their world views.

    We all have to make sure we don’t make similar mistakes in our businesses. we have to think short-term and long-term. We have to think about perishability and sustainability. And we have to see around the corner and over the horizon, with our Eyes Open.

    The story is here. It is worth reading and thinking about.
    KC's View:

    Published on: December 2, 2011

    Reuters reports that Delhaize Group says that “the encouraging results of Bottom Dollar Food in the Philadelphia market support plans for expansion in additional markets that present the same growth profile. This will include hundreds of new Bottom Dollar Food stores over the next five years.

    “The Group expects to open approximately 450 stores in its high growth newer operations in the three year period 2012-2014 which represents a significant step up from the past years. As a result of this important step up in store openings and the encouraging results in the rest of our network, Delhaize Group expects to generate revenue growth of 5 to 7% annually within three years.”
    KC's View:
    I’ve always believed that the multitude of formats operated by Delhaize here in the US would ultimately be its greatest advantage; it has allowed the company to shift its focus to the low-cost Bottom Dollar concept, which in the current environment is getting the kind of attention that the more upscale Bloom concept was getting a few years ago. The ability to be nimble is extremely important - and I’m happy to see it working for company leaders like Ron Hodge and Cathy Green Burns, who are two of the nicest people in the industry.

    Published on: December 2, 2011

    Online Media Daily reports on new projections suggesting that mobile commerce “will nearly double to $6.7 billion this year -- fueled by rising smartphone adoption and growing mobile Web use, according to a new eMarketer forecast. The market research firm estimates m-commerce sales will leap another 73% in 2012 to $11.6 billion.”

    According to the story, “The figures include sales of physical goods as well as travel and event tickets purchased via mobile, but not digital downloads or point-of-sale transactions through mobile devices. The estimates, which exclude purchases made from tablets, are based on meta-analysis of data from third-party research firms and overall trends in mobile ownership and use.”
    KC's View:
    I’m surprised to read that mobile commerce does not include purchases made from tablet computers ... which seems sort of oxymoronic ... but one can only imagine what the penetration would be like if those figures were included.

    The infrastructure of modern retailing is shifting. Attention must be paid.

    Published on: December 2, 2011

    Marketing Daily reports that a new study from the Organic Trade Association (OTA) saying that “more than three-quarters (78%) of U.S. families now purchase some organic foods,” and that “72% of parents report being familiar with the USDA Organic seal -- up significantly from 65% in 2009.”

    The study also found that three out of 10 American families “are new entrants to the organic marketplace.”
    KC's View:

    Published on: December 2, 2011

    Supervalu announced that it has joined the U.S. Department of Energy's Better Buildings Challenge, which aims to engage building operators nationwide in improving energy efficiency by 20 percent by 2020.

    "Reducing our energy footprint and creating a more thoughtful and sustainable operation are important priorities, and we will continue to test innovative ways to build our stores with future generations in mind," said Supervalu CEO Craig Herkert. "These projects are good for the environment, improve our operating efficiency and create jobs -- ultimately benefiting the communities we serve."

    Herkert made his comments at a Washington, DC, conference also attended by President Barack Obama and former President Bill Clinton.

    Supervalu said that it has invested $20 million in energy efficiency initiatives this year alone resulting in over 1,300 projects across its enterprise, and that it has been working over the past five years to reduce total carbon emissions by 10 percent and landfill waste by 50 percent and is on track to reach those milestones by the end of 2012.
    KC's View:
    I remember a retailer telling me not that many years ago that he would only be able to sell “green” within his organization when he could draw a direct line between it and the other kind of green. I saw something the other day about how some business experts are saying that sustainability will be a less important value in coming years, but I find that hard to believe, as companies like Walmart and Supervalu and Delhaize and Whole Foods and a host of other companies see that sustainability can be a profit-generating strategy.

    Published on: December 2, 2011

    Two weeks after Starbucks was slapped down by the Massachusetts Office of Consumer Affairs and Business Regulation, which fined the company for charging a hidden $1.50 fee for fresh ground bags of coffee beans weighing less than a pound, a California woman is suing the retailer over the charges - and her attorneys are seeking class action certification.

    If Starbucks were to lose the case, it could cost the company a lot more money than the $1,575 in fines that it was assessed by Massachusetts.

    According to the Seattle Post-Intelligencer, “Customers were not given notice of such a fee prior to purchasing such bags of coffee, nor were they given notice after their purchase on their receipt,” the woman’s attorneys told the court. “It was a completely undisclosed fee that unsuspecting customers were paying at stores around the country.”

    Starbucks has said that the fee covered extra labor expenses, but it eliminated the surcharge all over the country once the Massachusetts case came to light.
    KC's View:
    Businesses all over the world ought to adopt a simple, inarguable policy today. And here is what it ought to say:

    If there is anything we do that could, under any circumstances, be described by using the adjective “hidden,” we must stop doing it immediately.

    Because transparency in the global information age means that nothing you do is going to remain hidden for very long.

    Published on: December 2, 2011

    • The Wall Street Journal reports that while Barnes & Noble is focusing more on e-books and online sales as it tries to keep up with Amazon and avoid the fate that befell Borders, to date it hasn’t been enough to rescue its sales and profits. The bookseller reported second quarter sales that were down 16 percent, as well as a loss of $6.6 million for the period.

    According to the story, “the result is likely to fuel concerns among book publishers, which are still digesting the full implications of the liquidation earlier this year of Borders Group Inc. Although publishers are showing significant gains in digital books, those revenue increases don't appear to be enough to offset the decline in revenue from the sale of hardcover and paperback books.”
    KC's View:

    Published on: December 2, 2011

    • Sales and marketing services company Crossmark announced that it is acquiring New Concepts in Marketing Inc. (NCiM), described as “a leader in product demonstrations in the U.S.” as well as the “agency-of-record for BI-LO, Giant, Ingles, Raley’s, Roundy’s and WinCo, as well as 12 Kroger divisions.”

    Bloomberg reports that South Africa’s Pick n Pay Stores has “reached an agreement with a labor union to avoid firing workers while allowing a more flexible workforce.” The company had announced earlier this year that it might have to fire some 3,000 employees, or 8.6 percent of its workforce, as it looked to get more efficient in the face of new competition from Walmart, which acquired a majority stake in Massmart Holdings there.

    This agreement will help to alleviate the need for such mass layoffs.

    • The Wall Street Journal reports that Coca-Cola has decided to pull back on its promotion of a special white can for its flagship brand - keyed to support of an environmental initiative - earlier than expected, as some consumers complained that the can looked too much like Diet Coke.

    According to the story, “New seasonal cans in red will start shipping by next week, as white cans—initially expected to be in stores through February—make an exit.”
    KC's View:

    Published on: December 2, 2011

    I got a number of emails about our story looking at the case of the eight year old Ohio boy who was removed from his mother’s care because he was more than 200 pounds, which state officials suggest means that she is putting his life and health at risk.

    MNB user George Denman wrote:

    I struggle with this government intrusion. While I understand that this child at 200 pounds is at risk for many diseases, what right does the state have to take him away from a happy home environment. Do they think they he would be better off in foster care?  Where does the state stop this intrusion? If your kids plays football and breaks an arm, do they take the child away from the parents because he is at risk for future injuries??  Is 200 pounds the cut-off here?  What about 6 years old that weigh 150 pounds and are considered obese?

    Another MNB user wrote:

    Regarding the Slate story about the young boy in Ohio, I have a couple of comments.

    First, there was a piece in the Huffington Post citing some new numbers from Gallup. Self reported weights are up 20 pounds from 1990, and our perceptions of ideal weight have increased similarly in that 20 year time span. And yet the majority of Americans describe their weight as “about right.” Normally analysts are quick to judge self-report data as aspirational or “less accurate” but the story here is precisely about how our self described perceptions have changed.

    And I believe this echoes a larger trend regarding eating habits. We simply refuse to accept the proposition that it is not okay to constantly eat. That may sound simplistic, but consider the following anecdote. My sister and niece came to visit last summer and within an hour she was remarking on the lack of “things to eat” in our household. A quick trip to the store brought two grocery bags of chips, “fruit” gushers, juice boxes, candy, nuts, soda and so forth. And over the course of a week I watched as my niece who is not (yet) overweight—“needed” 4 or 5 snacks a day, and drank very little water. As delicately as possible, I approached the subject with my sister, noting that we (fortunately) never snacked that way when we grew up. Her reply “You don’t have a kid, so you can’t understand—things have really changed since when we were kids.”

    I guess they have. To this end, I suspect that poor fellow in Ohio is simply at the far end of the bell curve of a cohort of constant eaters.

    MNB user David Vincent Dec wrote:

    Taking this child away from his family is not in the best interest of this child. The best for this child would be to involve him and his family in a healthy life style training & learning program. A program with weekly accountability, measurement, and evaluation. Placing this child into the foster care system will cause more damage than this child will be able to over come in adult life, leaving him to more harm to himself and society, not to say the harm to his entire family. When change is needed, breaking a family apart is the sure fire wrong decision. Training for the entire family is the answer.

    But another MNB user wrote:

    So if the County officials do nothing what will the headline be in 3-5 years after he dies in his sleep due to either apnea or heart failure or some other weight related illness; “County Officials being investigated for allowing child to Die!”

    If their job is to protect the child and the parent(s) clearly will not do that then aren’t the County officials obligated to remove him?

    MNB user George Overbeck wrote:

    I live in Ohio and I think they are going after the wrong children –we can fix obesity – eat less – there is no fix for stupid – I think we should start taking the children away from parents if they are getting all failing grades!  The state could start educating the really failing kids and fix a lot of problems.   The state could start children schools or prisons and keep them until they start passing their tests.  This would help the unemployment problem but might add to the state expenses – then we could just raise taxes.  Where does individual and parent responsibility start and end?  What did we do before the nanny state started protecting us!  We laugh at China policy of one child – we could be next.

    From another MNB user:

    This one weighs heavily on my mind as a previous single parent, or any parent for that matter.  So many factors come into play regarding weight and while I hurt for overweight children, I don't think blaming the parent(s) will fix the problem.  Instead, many factors have to be reviewed.  For example, where they live can the child safely play outside without supervision such as a backyard?  Possible medical reasons why the child is obese such as thyroid disease or a gland disorder?  What are the eating habits of the family, do they have access to fruit and veggies?  How is the income of the parent(s) and what can they afford to eat.  Let's face it, eating healthy is expensive.  Not an excuse, simply reality and in today's economy, the parent(s) may be doing all they can to keep a roof over their heads.   The article mentions the child is an honor student and active in school activities - doesn't sound like abuse to me but rather his interests may be academic vs physical.  No matter how you look at this one, I personally believe the government has gone too far.

    The thing is, I disagree that eating healthy has to be more expensive. It is all a matter of priorities.

    I remain troubled by this decision. And I have to believe that there had to be another option, that removing the child from the home is a bridge too far.
    KC's View:

    Published on: December 2, 2011

    In Thursday Night Football action, the Seattle Seahawks defeated the Philadelphia Eagles 31-14.
    KC's View:

    Published on: December 2, 2011

    I have two remarkable movies and a terrific book to recommend to you this week.

    The Descendants is a hard film to categorize. It has one of George Clooney’s best performances, as a Hawaii lawyer who is a far cry from some of the smoothies he has played so well in the past; he is coping with a wife who is in a coma, two daughters who seem to be from an entirely different species, and an extended family pressuring him to sell off some of the last undeveloped land in the 50th state - a move that will bring them hundreds of millions of dollars.

    But while this may sound like the stuff of melodrama, it is anything but. Alexander Payne, who also directed Sideways and Election brings a unique sensibility to the proceedings; he keeps the story just a little bit off kilter, so you don’t really know what’s going to happen next. He shows us a Hawaii that, while paradise-like in so many ways, also has more texture and depth than we’re used to seeing on film. And the actors he’s chosen are excellent at peeling away layers of character as the film progresses, surprising us, touching us, giving us a sense that these are real people in a real situation.

    There is a business message at the core of the film - the notion that just because you can do something does not mean that you should actually do that thing. The Descendants considers the whole concept of choice, turning it so it can be seen from different angles, through different prisms. It is a lovely film that whispers and nudges its audience as opposed to shouting at it. It was a pleasure to watch.

    The only problem I have with Hugo, the new Martin Scorsese film, is that it somehow has been defined as a picture for kids. Nothing could be further from the truth; it may be an appropriate film for families to see together, but Hugo is definitely not for little kids. Rather, it is an illuminating work about loss and discovery that combines the moviemaking sophistication of one of our finest filmmakers with a a childlike imagination that embraces the existence of magic.

    Hugo is the story of Hugo Cabret, an orphan living in the bowels of a Paris train station during the 1930s. His father, a clockmaker, has passed away; his uncle, a drunk, used to keep the clocks in the train station operating on time, but has disappeared, leaving Hugo to run the station’s many clocks.

    Hugo is obsessed with getting a broken automaton - a kind of robot - that his father brought home to work again, which brings him into conflict with a embittered old man named Georges who runs a toy store in the station. I won’t lay out the plot for you here, except to say that Hugo is not just a celebration of the human spirit, but the magic of the movies, done in a way that is utterly heartfelt and superbly rendered. There even are business lessons in Hugo, like the one about the importance of the front lines (what happens in a train station if you don’t have someone reliable to wind the clocks?). And the ultimate message is important to any business, as Hugo considers the perishability of any business plan and the enduring place for core values in any business.

    One other thing. I’m not a big 3D fan, but you absolutely must spend the extra couple of dollars and see Hugo in 3D .... Scorsese actually shot the film in 3D (many 3D films are shot in 2D and then converted) and he makes this technology work for the story better than any film I’ve ever seen (including Avatar). Some of the scenes and patented Scorsese tracking shots are positively breathtaking. This is a wonderful movie that deserves to be seen the way it was shot and called an instant classic.

    I’m also not an enormous Stephen King fan, mostly because I don’t love the horror and supernatural genres. My favorite books of us to this point have been Misery and the autobiography On Writing, but I know that puts me in a minority. (“On Writing” is a wonderful book about his growing up and finding his is one of the three or four books I always recommend it to anyone interested in the writing game.)

    His new book, however, is an epic page turner that I almost could not put down. “11/22/63” is a novel that poses a fascinating series of questions: If you could go back in time and prevent the Kennedy assassination, would you? Could you? And what would be the outcome of such a move in terms of American history?

    The protagonist of the book is Jake Epping, a recently divorced thirtysomething Maine high school teacher, who discovers a kind of “rabbit hole” that allows him to travel back in time to September 9, 1958, at 11:58 am. He can spend as long as he wants there - a minute, an hour, a year or a decade - and when he returns to the present, it will always be two minutes later than when he left. (Though he will have aged the actual amount of time he was gone.) This offers Jake an opportunity - to put certain things right, things both personal and cultural, even though there is the risk that in doing so, he will be messing with forces that he cannot understand.

    “11/22/63” is a roller coaster ride of a book - fast moving, compelling, told with a kind of conversational ease that makes it seem more like a great yarn than an epic. (Like a really great “Twilight Zone” episode.) King seems to have done a lot of research, so there is the appearance of veracity. But mostly, instead of tapping into the mysteries of time and space, King taps into the mysteries of the human heart. I was sorry when it was over.

    (A quick note here. I read what they are calling the “enhanced e-book edition,” which is available from Apple as a iBook. I must confess that for reasons I do not understand, I prefer the Kindle application on my iPad to the iBook app. Not sure why, but it just seems smoother ... and it also gives me the ability to share the book on the Kindles we own, which means that other people in the family can read it.)

    We tried a lot of different wines over the Thanksgiving weekend, and I think it is fair to say that the ultimate winners was the 2009 Martinelli Zinfandel, which was rich and smooth and perfect with the filet mignon and baked potatoes we had for our holiday dinner. (Apologies to my friends in the turkey business ... but the kids just asked for steak. I did make a small turkey on Saturday night, though...and it was great.)

    Our other favorites from the weekend were:

    • 2005 J. Bookwalter Cabernet Sauvignon, from the Columbia Valley

    • 2010 Francis Coppola Director’s Pinot Noir, from Sonoma

    • 2010 Ponzi Pinot Gris, from the Willamette Valley

    • 2006 Vigneti La Selvanella Chianti Classico Riserva (which was particularly fabulous with spaghetti, meatballs and hot Italian sausage).

    The Martinelli, Ponzi and Vigneti, by the way, are all available from Nicholas Roberts Ltd., which powers the MNB Wine club. Enjoy!

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

    KC's View: