business news in context, analysis with attitude

Published on: March 5, 2012

by Kevin Coupe

It probably is fair to say that Apple has proven itself to be a game changer in the technology arena, affecting in profound ways how people interact with their computers, smart phones and mobile devices. (Anyone want to disagree with that?) If one is going to be relevant in how one reaches consumers, one has to take into account all of the dramatic changes that have taken place - and likely will continue to take place - because of the company from Cupertino.

So consider these two statistics...

USA Today reports that the company expects to sell as many as 60 million iPads this year, bringing the total number if iPads sold since its introduction just two years ago to more than 100 million. (Notably, Apple is expected to announce the iPad 3 on Wednesday...and nobody knows precisely what that will do to sales.)

The Financial Times reports that more than 25 billion applications for the iPad, iPhone and iPad have been downloaded from the Apple iTunes Store. And keep in mind, the while notion of applications created by third party companies and sold via the iTunes Stores is a concept that is only four years old.

Think of it ... 100 million iPads in two years, and 25 billion applications in only four years.

That’s an Eye-Opener.

Published on: March 5, 2012

The Charlotte Observer reports that “Wal-Mart is going after Matthews-based Harris Teeter with a tactic it's trying only in Charlotte: a series of grocery ads featuring head-to-head price comparisons on everything from chicken soup to ice cream.

“The ads, running on television, online and in the Observer, signal a bid by the world's largest retailer to regain its footing after seeing its reputation as the lowest-cost store erode in recent years. Wal-Mart, the Charlotte region's largest grocer, hopes to make inroads against hometown chain Harris Teeter, the second largest.”

"Right now, it's just in Charlotte," Walmart spokeswoman Tara Raddohl tells the Observer. "We do have some intent to utilize the same campaign in some local markets, but not at a national level."

Published on: March 5, 2012

The United Food and Commercial Workers (UFCW) came out with a statement over the weekend accusing Safeway and Ahold-owned Giant of Landover of “going nuclear” in their attempt to “ram through a contract that would drive workers out of the middle class, undermine their health and retirement security, and squeeze even more profits out of their hard work. And, the UFCW condemned “the companies' decision to prominently post ‘help wanted’ ads for ‘replacement’ workers and rapidly escalating efforts to silence workers as evidence that management wants provoke a strike or order a lockout when the current collective bargaining agreement expires on March 31st.”

"We've been meeting since January 11th and with our deadline less than a month away, Giant and Safeway management refuses to negotiate in good faith, instead presenting us with a list of more than 30 demands that will take thousands of dollars out of the pockets of our members and into the already-overflowing wallets of top executives and shareholders," said the UFCW’s Tom McNutt. "This is not about economic necessity — rather, it's about unvarnished corporate greed ... If Giant and Safeway think that trying to intimidate, frighten and silence their workers will force us to bow to their demands, they've got another thing coming.”

Published on: March 5, 2012

One of the industry’s most familiar faces, Thomas J. Blischok, is departing Symphony IRI to join the global management consulting firm Booz & Company’s San Francisco office.

“Thom Blischok is a recognized expert in the grocery, drug, convenience store, and mass retailing space, and we couldn’t be more pleased to have him on our team,” said Les Moeller, senior partner at Booz & Company.  “His experience in designing, developing, and implementing organizational, operational, and technology strategies and capabilities for global retailers complement and expand our strong offerings in these markets.”
 
Prior to joining Booz & Company, Blischok spent 8 years at Symphony IRI Group as President of Retail as well as Global Strategy and Innovation.  Before that, he served as Chairman & CEO of his own strategic technology consulting firm, MindMeld LLC.  He was an Executive Vice President and Group Executive at Equifax responsible for assisting retail and financial services client in creating and implementing loyalty strategies after serving as Chairman & CEO of Knowledge Engineering Group, a privately held think tank. 

Published on: March 5, 2012

The Los Angeles Times reports that Walmart is launching “a big push into the highly competitive Southern California grocery business, which could spell further trouble for the region's major supermarket chains.”

According to the story, Walmart - which encountered enormous push-back when it wanted to open supercenters in Southern California - has plans for 13 Neighborhood Markets there, including one in Chinatown, two in Orange County, one in Ventura County and one in San Diego.

The story notes that “California's three biggest supermarket chains grocers — Ralphs, Vons and Albertsons — are already losing market share to smaller competitors such as Trader Joe's and new rivals like Target, which carries fresh groceries in 236 stores in California. Now Wal-Mart will present fresh competition to the state's existing grocery chains.

At the same time, the arrival of Wal-Mart, which has long fought off efforts to unionize its workers, poses more challenges for the United Food and Commercial Workers union. The UFCW represents supermarket workers, who have already held protests and tried to organize workers at some of the nonunion chains such as Whole Foods Market, Bristol Farms and Fresh & Easy Neighborhood Market.”

Meanwhile, the San Jose Business Journal reports that a Walmart Neighborhood Market “will make its Silicon Valley debut this fall, with a 38,000-square-foot store going into a former Safeway at San Jose's Westgate Mall.

“The opening sets up a growing rivalry between union and non-union food retailers. The region is one of the nation's union strongholds. Some industry observers say the world's largest retailer may open a dozen locations in the Bay Area, furthering the rivalry.

“On one side, you have traditional union grocers, such as Safeway, Lucky and Nob Hill Foods. On the other side, you have a growing number of non-union supermarkets being operated by Wal-Mart, Target, Trader Joe's and Fresh & Easy Neighborhood Market.”

Published on: March 5, 2012

The Washington Post reports on changing philosophies in the realm of food safety inspection. Here’s how it frames the issues:

“These days, the bulk of what Americans eat - seafood, vegetables, fruit, dairy products, shelled eggs and almost everything except meat and poultry - is regulated by the Food and Drug Administration. And the FDA inspects the plants it oversees on average about once a decade ... The FDA’s approach is partly by necessity: The agency lacks the money to marshal more inspectors ... The agency concentrates its limited inspections on food products that have the worst track record on safety — seafood, for example — and on companies with a history of problems. It puts most of its efforts into responding to outbreaks after the fact, using genetic fingerprinting and other scientific tools to track contaminants back to their source in hopes of stopping any further spread.

“The USDA and the FDA are under pressure to overhaul their dramatically different procedures, in essence bringing them closer together. There’s a growing recognition among food-safety experts that the government can be smarter about tackling food-borne hazards that sicken one in six Americans each year and kill about 3,000.”

Published on: March 5, 2012

The Sacramento Bee reports that California-based Raley’s plans to close two more stores - one operating under the Raley’s banner in Rancho Cordova and another run as a Nob Hill Farms in Milpitas - later this year.

The retailer closed two other stores in January, and has been looking at all its operations to identify poorly performing assets that be closed as a way of cutting costs.

Published on: March 5, 2012

The Chicago Tribune reports that McDonald’s plans to release new ad campaign that will feature a message about either nutrition or the importance of exercise in every ad.

According to the story, the campaign “supports the chain's revamped Happy Meal, now available at its 14,000 U.S. restaurants, with a burger or chicken nuggets, apple slices, fries and 1 percent white or fat-free chocolate milk.

“The 1.1-ounce portion of french fries is new. McDonald's introduced apple dippers with caramel sauce as a fry alternative in 2004, later learning that only 11 percent of customers were ordering it. The new meal has effectively made a fruit or vegetable mandatory. The most popular Happy Meals now contain 20 percent fewer calories, McDonald's has said.”

Published on: March 5, 2012

• There are numerous reports in the UK that Tesco plans to create as many as 20,000 full-time and part-time jobs there over the next two years, as the company makes a “significant investment” in new and renovated stores as well as devoting considerable energy to improved customer service.

Published on: March 5, 2012

• The Boston Globe reports on a new survey from Fidelity Investments and the National Business Group on Health suggesting that “more companies are offering incentives to their employees to better manage their health by taking such steps as getting flu shots or regular cholesterol screenings.”

According to the story, “Companies in the survey said that the average annual value of the health-related incentives that they offered to an employee in 2011 was $460, up from $260 in 2009 ... Generally, incentives take the form of lower health care premiums. If, for example, an employee joins a gym, $50 might be deducted from that employee’s annual health-care premiums. Similar deductions can be offered for joining a weight-loss or a smoking-cessation program.

“Besides such incentives, the average employer spent $169 per employee on health improvement programs in 2011, up from $154 the previous year.”

• The Associated Press reports that the New Jersey Attorney General’s office “has begun a preliminary investigation into a CVS pharmacy's mistaken distribution of pills for the treatment of breast cancer to children instead of the fluoride pills that were prescribed.

“The attorney general's consumer affairs division on Friday ordered a CVS pharmacy in Chatham to explain the mistake and provide the names of all its employees along with all emails, telephone calls, complaints, and other information related to the mix-up.”

CVS has apologized for the mistake and contacted every family that received the wrong medicines. No injuries have been reported.

• USA Today reports that spicy Pepper Jack cheeses are all the rage these days: “Pepper Jack as a menu offering on fast-food sandwiches has jumped more than 37% over the past four years, reports Datassential, the restaurant market-research firm. During that period, its availability as a menu offering on fast-food burgers has grown more than 56%.”

Published on: March 5, 2012

On Friday, MNB took note of a Wired report about findings from the University of California, Berkeley, suggesting that “as an individual’s wealth and status rise, so does their tendency to be unethical ... Upper- and lower-class individuals do not necessarily differ in terms of their capacity for unethical behavior, but rather in terms of their default tendencies toward it.”

Got a lot of reaction to it.

One of the quotes in the story was from psychologist Paul Piff who said: “Occupying privileged positions in society has this natural psychological effect of insulating you from others. You’re less likely to perceive the impact your behavior has on others. As a result, at least in this paper, you’re more likely to break the rules.”

To which one MNB user replied:

And maybe they have this backwards. Maybe successful people succeed because they're more aggressive and creative to begin with than their passive go-with-the-flow counterparts.

One MNB user wrote:

Considering the main source of this "study,” Cal-Berkley, the undeniable bastion of unbiased and clear drug-free thinking, it should surprise no one that its conclusions furthered the notion that the folks that "have" in America are tromping on the "have nots"...and now we have proved that they are not only "privileged", but they are also unethical and nasty.  Like any generalization, the conclusions of the study likely fit an pre-study hypothesis, i.e. , "rich people are bad, inconsiderate, insufferable, and keeping the impoverished imprisoned in the ghetto of your choice.”

To your point, I don't think the rich have the market cornered on being inconsiderate. Sure there are some that are lofty elites.  Watch any Academy Awards show and span the audience. But even among this group of red carpet people, many, perhaps most are very generous with their time and money to help those who have less.

But in fact the vast majority of  those that have money in this country have gotten it by working 2 or 3 jobs, taking risks, and have made significant sacrifices to achieve their wealth.  This group, contrary to what you would be led to believe by most in the media these days, this group is very generous with their donations and support for those that are less "fortunate".  Without this group, many charities would not exist, many outreach programs would die.

So in an election year, where the campaign theme of one of the combatants is to overtly activate his base by inciting anger and envy, this is not the last study or headline of this kind we will likely see.  Thanks Cal-Berkeley, it's nice to know that with all the real problems we face today, you have the time and disposition to tackle the tough issues!

Me thinks there is a bit of sarcasm in there somewhere.

Another MNB user wrote, a bit more succinctly:

Coming from a UC Berkeley study….shocking…

From another MNB user:

You’re going to get a lot of emails about the true definition of wealth and the results of capitalism and a culture of consumerism. I could get on any of those bandwagons but I’m going in another direction.

The notion of privilege cannot be reconsidered until we reconsider the notion of rich. Or rather, acknowledge where it exists. The facts (according to the US Census 2006-2010 http://quickfacts.census.gov/qfd/states/00000.html):

• The median household income in the US is $51,914.

• Nearly 14% of families in the US are below poverty level (The poverty threshold for a four-person family unit with two children, the 2010 poverty threshold is $22,113 (http://www.census.gov/hhes/www/poverty/data/threshld/).

I have no idea what your HH income is and certainly don’t expect you to disclose it. But I know what my HH earns, and the approximate income of friends who, like us, have two working adults in the house. Many of us in higher level jobs. We have very comfortable lives; everything we need and many things we want. We feel privileged. We don’t feel rich. But the fact that we don’t feel rich doesn’t mean that we’re technically not.
 
It’s easy to understand how someone on the lower half of this table gets annoyed when someone on the upper half claims they aren’t rich.
 
Of course, admitting we’re rich is awfully uncomfortable and feels more than a tad bit like bragging. On the other hand, maybe admitting you’re rich would be freeing: been there, done that, moving on to something that really matters...

I think I’m being chastised here, for saying that I’m not rich. But Im reasonably sure that I didn’t say that just to avoid bragging.

From another MNB user:

Thanks for bringing this interesting piece on these thought provoking studies.  I share your observations that jerks exist at all levels of the socio-economic ladder.  In my estimation, the percentage of rude and despicable versus kind and considerate people is roughly equal across these classes.  Consider however, a thought experiment in which we imagine what moral lines a person is willing to cross in two cases.  In the first, we ask a person which of their own moral codes they would be willing to break to gain one billion dollars that they do not already own. Next, we ask a second person who already owns one billion dollars which moral codes they would be willing to break to protect that money from being taken away.  Something to think about...

A couple of thoughts here, if I may...

I’m a little less willing than some to dismiss the whole “one percent vs. the 99 percent” debate as being a matter of envy and anger stoked by one side of the political aisle, and that it is much ado about nothing turned into an issue for reasons of political expediency.

Is that to suggest that one political party might be better positioned to exploit the situation for its own political gain? Of course. The very definition of politics is that each side exploits issues that they see as working to their advantage. Some of these issues are legitimate, some are not. But that’s the way the game is played, for better or for worse.

In the case of the economic divide seen in this country, some of the resentments are stoked by the fact that even as unemployment remains a problem, the stock market seems to be doing exceedingly well. The so-called “haves” seem to be doing better, while people who “have-less” continue to struggle. I think it is foolish - especially if you are in a business in which you have to market to the general population - to dismiss the latter as people who are simply envious. My general experience has been that most Americans don’t resent people of wealth. They just want the opportunity to get some of it for themselves.

As for UC-Berkeley...sure, it probably can be considered a bastion of liberal thought. (They just love to get conservative young people in there so they can brainwash them into becoming liberals...) It’s easy to attack Berkeley because its Berkley. (Maybe I’m less inclined to do so because I went to college in California during the late seventies. It was awesome, man... )

But just because the institution may have a liberal bent doesn’t mean the question shouldn’t be asked, or that the conclusions are incorrect. People always think the other guy is biased if he doesn’t agree with them, and that their thought process is pure, unvarnished and completely bias-free. (Such people often are ideologues, and I never trust ideologues on either side of the aisle, because ideology, as Pete Hamill once said, generally is a substitute for actual thought.)

So let me come back to where I started with this story on Friday ... quoting F. Scott Fitzgerald. Last week, it was his comment about the difference between the rich and everyone else. But today, let me choose another Fitzgerald gem:

The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function.

Maybe the conclusions of the Berkeley study are overly simplistic. But maybe there’s something else going on at the heart of the study that requires some attention.




From another MNB user, on another subject:

This may be a bit tongue in cheek, but I can’t resist:

To the person who thinks checks are relevant, the expenses are listed as caretaker, housecleaner, window-washer, etc.  I’d venture that a larger portion of Americans are mowing their own lawns, cleaning their own houses and washing their own windows.  This person sounds more like a senator - perhaps a bit privileged and stuck in the past.

For the record, it is now possible to process credit card payment via a free account with the purchase of a ($10) swipe unit called Square.  This is one of many technologies circumventing elaborate credit card systems, and many service-people I know use them (window-washers, even!).  Credit card processing is definitely within reach for “the little guy.”




I love it when I get email reports like this one:

I was standing in the checkout line at Walgreens yesterday.  The man in front of me had several items, for which he had coupons.  The clerk rang up the items and put them in a bag.  The man handed over the coupons at which time the clerk noticed that the coupons were expired.  She said “today is the 26th, these coupons expired yesterday”.  Then she told him, he could go across the parking lot and use them at Cub, because they accept expired coupons.  The man said “okay” and walked out the door, leaving behind a bag full of items he was going to purchase.

I’m really not sure how to react to what I witnessed.   Is this a lesson in honesty or customer service?  The clerk was honest and helped the man save a few bucks.  But the man had to be left wondering how and why Cub accepts expired coupons and Walgreens doesn’t.  And wouldn’t it have been better,  in the effort to save a sale, the clerk had the authority to accept coupons, that were only expired by one day?   On the other hand, she was honest because had she not said anything, he was ready to purchase the items and Walgreens would have made the sale.

At the end of the day, how will that one shopper react next time?  And does he have a social media voice to a larger audience with whom he will share this experience?

If he doesn’t, you do. And did.




And, on still another subject, one reader offered:

Reading your comments today about more people in their 50s and 60s choosing to live alone...

One of the more unusual habits (or macabre, as it may be…..) that I have cultivated since leaving the grocery industry is that I read the obituaries in several local newspapers every day.  When doing so, it is easy to see a correlation between people of both sexes who have passed away at an early age who were also living alone.    There is something to be said for being in a long-term stable relationship where both spouses are aware of each other’s behaviors and cultivate habits that will help both of them live longer.

It will be interesting to see what effect, if any, that this trend will have on the continued lengthening of life expectancy in the US going forward.

So your suggestion is that if more people live alone as they get older, maybe the average US life span will get shorter?

Interesting point.

And maybe one solution to all the Medicaid/Medicare/Social Security debate going on in Washington.

I can envision the campaign slogan now:

Live alone. Live shorter. Save the nation.