business news in context, analysis with attitude

Published on: January 10, 2012

by Michael Sansolo

There are countless reasons why I am a huge fan of Abraham Lincoln. But there are fewer things he said better than the following: “'Tis better to be silent and be thought a fool, than to speak and remove all doubt.”

Two headline postings on Yahoo News yesterday reminded me why we all need to heed Lincoln’s words more than ever these days. The simple truth is that any indiscretion now can become global news because the world of communication now moves with lightning speed.

The first headline came from the Detroit Lions playoff game this weekend. Apparently one Lions’ player, Aaron Berry, was upset with what he perceived a lack of support from fans after the Lions lost. So Berry took to Twitter to suggest that tell fans: “"Y'all can go back to being Broke & Miserable…now back to regular scheduled programming…"

Not surprisingly, Berry took down the Tweet in short order, but by then the Tweet was widely distributed and the damage was done. Luckily for Berry, Detroit’s season is over, which means no home games until next August at the earliest. Even better for him, sports fans are fickle so as soon as Berry intercepts a pass those fans will forgive, forget and start cheering.

One employee at Papa John’s won’t be as lucky. The pizza chain is dealing with a kerfuffle on line because an employee identified a customer on a receipt with an ethnic slur and then, incredibly, gave the receipt to the customer. Like Berry, the pizza employee won’t be around for next week’s playoff games, but he won’t have redemption next season. He was fired and Papa John’s is left to cope with a public relations problem.

Now let’s pause a second for a moment of honesty. I like to think I’m a nice person, but trust me (or better yet, trust my wife) I’m a long way from perfect. At various times in my life I know I have said things I shouldn’t, have commented on people in ways I shouldn’t and frankly have talked when I should have shut up. And I’m betting I’m not alone.

But smartly or luckily, I’ve managed to show discretion and clear thinking when it comes to what I write, Tweet or post. Somehow I know when to shut up.

I’m thinking that luck is no longer enough. Lincoln’s words and the thinking behind them should be part of every employee orientation these days because in a world of wide-open communication, stupidity can be transmitted faster than ever. And the consequences are never good.

The Detroit Lions need to remind players that without fans the players are simply very large people who would no longer be allowed to pummel each other. It’s the devotion and spending of those fans that allow players like Berry to live the life they have. Fans are customers and right or wrong they must be treated with respect.

And the Papa John’s case is even more relevant. It’s not about political correctness to remind all employees to treat all customers with respect and sensitivity. That’s a fundamental part of business. As one customer Tweeted about Papa John’s, “Your employees are your brand.” Sadly, what happened at Papa John’s could be happening at businesses around the world today. It isn’t a matter of whether a faux pas will happen; it’s a matter of when and how often.

It’s a wide-open world with new rules or, more correctly, no rules. So to repeat, let’s remember Lincoln and post the following: 'Tis better to be silent and be thought a fool, than to speak and remove all doubt.” Especially on line!


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: January 10, 2012

by Kevin Coupe

Some things, we all take for granted.

But we probably wouldn’t if we lived in the eastern European country of Belarus.

Memeburn.com reports that as the government there looks to crack down on the free sharing of information, residents of Belarus “are now forbidden from accessing foreign websites. Any citizen who breaks the new law is liable to face a fine of up to US$125 ... the Law states that the owners and administrators of Internet cafés or other places that offer access to the Internet might be found guilty of violating this Law and fined and their businesses might be closed if users of Internet services provided by these places are found visiting websites located outside of Belarus and if such behavior of the clients was not properly identified, recorded, and reported to the authorities.”

The story says that the government of Belarus has established a kind of “internet blacklist” that will scan and block objectionable sites, and that as a result of this policy, international companies are likely to firewall their services so that Belarusian citizens cannot access them, lest they be subject to fines and other penalties.

Eye-opening, huh? That such an approach is possible, even in 2012?

I thought it worth noting because today the nation’s first primary is taking place in New Hampshire. The race for the GOP nomination has become contentious, and probably presages a rancorous battle for the presidency that will take place in the fall between the Republican nominee and President Barack Obama.

But as bad as things get sometimes, things could get worse.

We could be living in Belarus.

Published on: January 10, 2012

• The Great Atlantic & Pacific Tea Co. (A&P) said yesterday that it is asking for permission from the bankruptcy court overseeing its finances to close 14 stores in four states.

CEO Sam Martin said in a prepared statement: “We are continuing to take the steps necessary to position A&P to emerge from Chapter 11 with a strong future and ensure that we remain focused on our top priority - providing great value and service to our customers every day. As part of our preparations to emerge from Chapter 11, we have decided to close these 14 underperforming locations. While this was a very difficult decision that will unfortunately impact some of our customers, partners, associates and the surrounding communities, these actions are absolutely necessary as we continue to strengthen A&P's operating foundation and improve our performance."

• The Orange County Register reports that Tesco-owned Fresh & Easy Neighborhood Markets said that it plans to close 12 underperforming stores - temporarily.

According to the company, the stores will remain shuttered until economic factors make it sensible to reopen them. And, the company said, it will continue to open new stores - some of them in the same markets where it is closing stores - where circumstances warrant, though the new stores are likely to be smaller Fresh & Easy Express format stores of about 3,000 square feet.

Tesco has been saying that it is remains on track to reach break-even with the Fresh & Easy business during the 2012-2013 fiscal year.

Published on: January 10, 2012

Bloomberg reports that PayPal, the eBay-owned e-commerce payment provider, “plans to announce a partnership with Home Depot that lets shoppers use the payment system at checkout, taking aim at Visa Inc., and MasterCard Inc.’s credit card-swiping customers.”

According to the story, the move is part of broader strategy aimed at “developing a so-called mobile wallet, which could be stored on a consumer’s smartphone or a special PayPal card, letting shoppers pay for items at checkout. The Home Depot project will roll out to consumers later this year, serving as a test project ... The idea of the mobile wallet is to store credit- and debit-card information from a range of providers, with PayPal controlling the experience. The company plans to give customers the option to choose which provider they want to use up to 30 days after the sale.”

Published on: January 10, 2012

Interesting piece in Minnesota’s Star Tribune about the changing economics of shopping malls, suggesting that the decision by Bloomingdale’s to pull out of the Mall of America, coming after the recent decision by Sears Holdings to close more than 100 Sears and Kmart stores, means that traditional roles are beginning to erode.

"Department stores are not exactly dead, but they're obviously troubled," retail historian Jack Thomas tells the Star Tribune. "Everyone wants one-stop shopping. The problem with department stores and malls is nobody wants to go to multiple stores to get what they need."

In some cases around the country, the loss of traditional anchor tenants in some markets has meant replacing them with smaller fashion or furnishings retailers, or even movie theaters. And the anchor tenants themselves have to reconsider how and where to best locate their businesses.

Published on: January 10, 2012

• Walmart Canada announced yesterday “rollback” pricing on more than 7,000 SKUs, in its words, “crossing all major categories from groceries to general merchandise. Combined, these ROLLBACK prices are expected to translate into customer savings of more than $25.7 million in January.”

• Reuters reports that Walmart will be offering free and discounted tax preparation services at more than 3,000 stores. According to the story, “Some 2,800 Walmart U.S. stores have a Jackson Hewitt location, and another 250 or so stores feature H&R Block Inc. Those providers will offer free 1040 EZ filings with tax preparation consultants in Walmart stores, said Daniel Eckert, head of Walmart financial services. Prices for other tax preparation services will be about 7 percent to 10 percent lower than at both companies' other locations, he added.”

However, the Reuters story also notes that Walmart believes that this “is less about giving back and more about bringing in,” as the retailer will allow/encourage customers to deposit their tax returns for free onto Walmart cash cards.

The story points out that Walmart is making a major push to reach out to customers who do not avail themselves of traditional banking services; more than eight out of ten transactions at US Walmart stores are made in cash.

Published on: January 10, 2012

• The Associated Press reports that Amazon.com has come to an agreement with the state of Indiana, collecting the state’s seven percent sales tax from its customers there beginning in 2014, a move that could generate as much as $20 million in revenue for the state.

According to the story, the agreement “follows a lawsuit by Indianapolis-based shopping mall owner Simon Property Group against the state over the issue and a lobbying push on state legislators by traditional retailers to end what they call an unfair price advantage for online retailers.” It also supersedes a 2007 agreement between Amazon and the state of Indiana that called for no collection of online sales taxes when Amazon opened a warehouse there.

Published on: January 10, 2012

• Bloomberg reports that fast-feeder Chick-fil-A “will sell lower- calorie kids’ meals, joining other eateries in promoting menu options billed as healthier.” An offering of grilled chicken nuggets will “reduce the calories and fat in kids’ meals by more than half,” the story says, and the company also will begin selling milk, apple juice, lemonade and water for kids rather than drinks with high fructose corn syrup.

• USA Today has a piece about supermarkets using nutritional rating systems such as NuVal and Guiding Stars to give their customers more information about the products in their stores - a story that has been dealt with frequently here on MNB, but is worth noting because this story may give the concept greater currency.

• The Wall Street Journal reports that Hostess Brands, manufacturer of the Twinkie and Wonder Bread brands, is preparing to file for bankruptcy protection. It would be the second major restructuring in a decade for the company, which is said to carry more than $860 in debt.

• The Boston Globe reports that as it prepared to emerge from bankruptcy today, Friendly’s Ice Cream closed 37 stores - bringing the total number of stores it has closed during its restructuring to 100, or about 20 percent of its fleet.

Published on: January 10, 2012

We continue to get a lot of email about the future of online grocery shopping, a discussion precipitated by the decision by Publix to stop a limited three-store test.

MNB user Beth Dolan wrote:

As a person who spends at least 3 hours every weekday commuting between NY and NJ the last thing that I want to do on Saturday morning is spend another 2 hours grocery shopping, my weekend time is precious. I was elated to learn that one of the ShopRite stores in my area has begun offering online shopping with pick-up or home delivery and I have used this service for my last three grocery orders. I love the convenience of being able to shop while eating lunch at my desk on a Friday knowing that I only have to drive down to the store on Saturday morning and pick up my grocery order(unfortunately I live outside of their delivery radius). This past weekend my husband decided he wanted to participate in the shopping and he preferred to go in person. About an hour into shopping I turned to him and asked his opinion on an item, he commented that whatever I wanted was fine with him as long at it got him out of there before his 60th birthday, which is many years away. Overall, including travel time, our shopping excursion took a little over 2 hours. Needless to say I will be placing my grocery order online this week and picking it up Saturday morning so that we can enjoy our time doing something relaxing together like having brunch at the local CSA farm.

MNB user Mike Spindler wrote:

There are plenty of folks making money at curbside service today.

There are plenty of retailers doing more than 1%, more than 5% more than X% of total store sales in online today.

There is no question that the grocery consumer is using an array of online and mobile tools to better meet their needs drivers. 

There is no question that more consumers used these tools this week than last, and more will use them next week than this. 

There is no question that the available tools are in their infancy and will improve in their ability to meet consumer’s needs drivers.

Publix competes today against sellers who offer online and mobile tools for closing the deal with consumers who increasingly want those tools.

You cannot win if you do not play.

MNB user Jan Fialkow wrote:

I grew up in the 50s/60s, and my family had store-to-door grocery delivery, albeit via phone. My dad had a small, independent grocery store in a suburb west of Boston. As my mom prepared dinner each night, my brother or I would sit at the kitchen table with a pen and paper to write down "the order" -- whatever Mom saw she needed. Then we would call Dad at 6:15 — never earlier, occasionally later — give him "the order" and he would bring it home. The downside was the tendency to order the same things over and over and over…

My dad's business had a large delivery component for years. I worked in the store on Saturdays when I was in high school; my job was taking customer orders over the phone. Within an hour or so of taking the order, the delivery boy —always a he and always called "the boy" even if were older than my dad — would set out in the truck. My dad was well known for the quality of his meat and produce. He went to the wholesale markets daily and if he didn't like the quality, he didn't buy. That meant a possibility of no peaches in the height of peach season or substitution of a cut of meat when something specific was requested. None of the customers seemed to mind because they knew he was staking his reputation on the quality of his merchandise. One long-time customer, a blind homemaker, trusted my dad to make sure her order contained produce in the sizes and degrees of ripeness she liked and meats with the marbling and thickness she wanted. "The boy" unpacked the order for her, putting everything in its proper place so she had no trouble finding anything later. She even allowed "the boy" to take the appropriate amount of cash out her wallet.

Maybe that's why I've searched out the invested local independent wherever I've lived. When it comes to perishables, I want the purveyor to care as much as I do. If I'm a Luddite, so be it!

MNB user Mike Nugent wrote:

KIDS BUYING EVERYTHING ONLINE??

I keep hearing this and I keep wondering who these kids are that buy everything online as stated in your commentary.  I hear stories of kids who go into a store with their iPhones and price shop and then go buy it online.  However, I cannot find any teenagers who have actually done this.  My kids do not do this and their friends do not do this.  My nephew’s kids who are in the 6 to 12 range do not do this.  I know there are studies that are suggesting this is occurring extensively, but unless I am absolutely in a small sample population which does not participate in this way, which seems pretty highly unlikely, perhaps the perspective for this should be refreshed.  For certain products no doubt, the ship has sailed such as music, but the experience to shop for music wasn’t that great to begin with.  My 16 and 18 year olds have their favorite stores and enjoy much more the rewards of trying on clothes, buying them, and bringing them home in large packages.

This “buy everything online” suggests a more difficult mental struggle for me which is who exactly is entrusting a credit card to their 10 year old?  But, let’s discuss that situation later.

As far as online grocery shopping, the lack of backward integration is what is missing.  The approaches I have seen attempt to automate a process in place rather than blowing it up and starting over.  One thing my children’s generation is much more comfortable with is sharing information I would never have shared.  When you ask for my data like what I ate or when I have appointments or what my schedule is, I am not that comfortable providing this information, it is private.  My kids don’t care and the information about what they consumed for their meals (replenishment) and what their social events look like (forecasting) are pieces of information they are easily sharing. Today’s approach is about automating your shopping trip.  But tomorrow, this generations ease of sharing information will make it about automated a meal planning that fits their food tastes AND THEIR SCHEDULE.

Just my $.02...

MNB user Frederic Arnal wrote:

One of my hats is an internet retailer.  My observation regarding the viability of grocery online is that we are making an erroneous assumption that traditional shopping models will transfer to the new channel.  The most successful online food retailers currently are those who view the ecommerce channel as an adjunct to their brick and mortar stores.  The primary role is that of communication and reservation.  Whole Foods does a great job of sending the latest deal and new product information to shoppers.  They also provide a terrific way to select and reserve for pickup holiday special meal offerings from their catering departments.

A few years ago, we had in the Chicago area a retailer (Scotty’s markets) who was way ahead of their time.  They furnished a bar code scanner to subscribers who would scan products as they used them.  This created a staple replenishment list which then could be uploaded to the retailer for delivery.  I can see new refrigerators with built-in terminals that would enable this service to homeowners and thus pare down the shopping experience to fun, perishable trips much like the European consumer.

Bottom line, we can’t face the future by “paving cow paths”.  Innovation demands paradigm shifts.

MNB user Ken Wagar wrote:

Your comments and those of certain of your readers regarding Publix’ cancelled test of e-commerce and in fact their 2nd walk away from such attempts suggest that you see this action as a negative and a failure to pursue a future you strongly believe is coming. I understand your view, however it seems to me that Publix deserves great credit for recognizing that they will need to find a way to facilitate a different future state of food retailing and have in fact invested time, talent and dollars in two attempts to do just that. It appears that in their judgment they haven’t yet hit on the right strategy and/or tactics for meeting that desired end state. I haven’t read anywhere that they have now decided that e-commerce is not desirable or achievable nor would I expect that they have given up. I suspect that they have gone back to the drawing board with what they have learned from their two attempts thus far and will in the not too distant future try a new method of entering that space.

Lots of unmanned missiles blew up on launch prior to us putting men on the moon. Maybe Publix will surprise you and maybe giving them credit for trying is fairer than castigating them for admitting that the current model they were trying was not viable.

MNB user Jim DeLuca wrote:

My wife make the best southern style cornbread in the world.  She only uses Hodgsons Mill White stoneground cornmeal.  At her last venture out to the grocery store she found that both Tops and Wegmans quit carrying it.  She looked online and found that Wal-mart stores might.  She located one superstore and called and was told they did not have it.  So she resorted to our first ever online food purchase.  Walmart sold 6 five pound bags for a reasonable price and WOW, only charged $.97 for delivery. And double WOW, it came in one day via fed ex and the guy delivered it onto our porch.   Ninety seven cents!!!

I am in the natural food grocery business and that freaked me out!

As well it should.

From another MNB user:

One point that seems to be overlooked is quality of produce, meats & other fresh products. I regularly have to “dig past” produce that is starting to turn or milk that use by date is tomorrow to reach the freshest product that I will use for the next week. This is true at all the big chains. Why should I trust a grocery manager or a 17 year old clerk to pick the best quality for me. For center aisle products online is good but for fresh foods I don’t trust them.

Let me say a couple of things here...

With some exceptions, I firmly believe that online grocery shopping should be offered as a service by traditional supermarkets ... it has to be integrated into a broader strategy. It isn’t going to take over the world anytime soon ... but it has the potential of making a store more accessible and relevant to a changing customer demographic.

If Publix, or any other company, decides it does not want to make online shopping a priority or an option for its shoppers, I think they have to follow their instincts. There’s nothing worse than doing it half-heartedly, and a company’s culture has to be nurturing if it is going to work.

Amazon is nibbling away at a lot of companies’ sales, even if they don’t know it. When (not if) Walmart starts doing online grocery sales, that will only ramp up the competition. As Mike Spindler said in his email, you cannot win if you do not play.

I agree that if supermarkets are going to be effective at selling fresh foods online, they are going to have to focus on picker expertise. You can’t have a 17-year-old part-timer picking the tomatoes. But it strikes me that this is an enormous opportunity to establish credibility and create a relationship with the online shopper.

The world is changing. Customers are changing. And to ignore this, I think, is to make a mistake. You can make the choice not to offer online shopping...but you’d better understand that the new competitive landscape includes companies offering e-grocery as an option, and you’d better factor that into your strategies and tactics.




Ironically, in terms of this discussion, we noted yesterday that it was the fifth anniversary of the announcement of the iPhone...and I suggested that the changes that have been wrought over the past five years may be nothing to compared to the next five. Which led one MNB user to write:

My guess is that in less than five years, when you order a pizza with your iPhone, you will actually smell the pizza before you order it. Think about scratch and sniff technology built into an app. In ten years, you will think what you want to say in a voice mail, email or text. The iPhone will then execute what you think into action…

Here’s the perfect place to quote Jean-Luc Picard:

Things are only impossible until they’re not.

All that is required is someone of ingenuity and imagination to make them so.

Published on: January 10, 2012

• In last night’s BCS championship game, the Crimson Tide of the University of Alabama rolled over number one ranked Louisiana State University Tigers 21-0.

• The Baseball Writers Association of America voted yesterday to elect Barry Larkin, the iconic shortstop for the Cincinnati Reds, to the Baseball Hall of Fame - the only player to be elected in 2012 voting.

Larkin will be inducted this summer along with the late Ron Santo, who was elected last month by the Hall of Fame Veterans Committee.

Published on: January 10, 2012

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