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    Published on: June 13, 2012

    by Kevin Coupe

    There were two news stories over the past 24 hours that grabbed my attention. Since I didn't want to choose, I'm going to offer both of them up this morning.

    Story 1. Sherlock Holmes once said that "when you have eliminated the impossible, whatever remains, however improbable, must be the truth."

    And I can remember an old teacher of mine once telling me that sometimes the first answer that comes to mind - or even the first guess - is the right one. Everything else is just dithering.

    And so it seems to be in Australia, where after a quarter-century of debate, it ends up that the dingo really did get her baby.

    The case goes back to 1988, when Lindy Chamberlain was convicted of murdering her daughter, though she claimed that the baby had been snatched by a wild dog known as a dingo. Chamberlain's conviction was later overturned and the story was turned into a movie starring Meryl Streep, but debate continued to rage about whether or not she was guilty of the crime.

    But now, an Australian coroner has ruled that a dingo actually committed the crime ... bringing an end to the controversial case.

    My mother used to tell me that patience is a virtue. But I'm not sure that's reassuring to Lindy Chamberlain.

    Story 2. The Boston Globe reports that the town of Middleborough, Massachusetts, has passed a public ordinance that, among other things, criminalizes the use of profanity in public. Police will now be able to write a ticket to people who issue vulgarities outside their homes, and the ticket will result in a $20 fine.

    Critics of the new ordinance say that it is vague and hard to enforce, because it does not precisely define what is profanity and what is not.

    So here's the question - which law is dumber, one that makes the use of public profanity illegal, or one that makes the selling of jumbo soft drinks illegal?

    Just asking...
    KC's View:

    Published on: June 13, 2012

    In Ohio, the Beacon Journal has a piece about Chef Daniel Coudreaut, senior director of culinary innovation for McDonald’s USA and a graduate of the Culinary Institute of America (CIA), who, it says, "isn’t shy about defending his menu or about the fact that McDonald’s is a corporation interested in making money."

    Some excerpts from the piece:

    • "When asked whether he feels a responsibility for his company’s role in the current American obesity epidemic, Coudreaut said he feels mostly a responsibility to his own children, a daughter, age 11, and a son, 7, to guide their eating habits and control what they eat. 'I control what goes into their mouths,' he said."

    • Coudreaut "pointed out that McDonald’s is not the only restaurant that sells fattening foods. 'I’m sure I could eat a 2,000 calorie meal at Thomas Keller’s French Laundry,' Coudreaut said.
    'I feel that if we were to close our doors of all of the McDonald’s tomorrow, the obesity problem would not go away,' he said."

    • "To Coudreaut, it’s all about choice, balance and moderation. There are healthful items on the McDonald’s menu — oatmeal, yogurt parfaits, salads, grilled chicken and low-fat milk. But burgers, fries, and milkshakes can all be factored into a healthful diet too, he said."

    • "The moral of the story is, if you demand healthful food, McDonald’s will give it to you. As a corporation McDonald’s is interested in making money, so it will sell what sells. And the company is very keen on listening to its customers and letting their preferences help to shape its menu ... Coudreaut said McDonald’s is an active listener. As lifestyles change, so has its menu, if for no other reason than it makes good business sense. Satisfied customers tend to return."

    “'Are we perfect? Absolutely not. Are we getting better? Every day,' Coudreaut said."

    And, for the record, Coudreaut says that he lets his kids eat at McDonald's once a week on average, and will himself indulge in a Big Mac about once a week.
    KC's View:
    While regular MNB readers know that I am no fan of McDonald's, I have to admit that I pretty much agree with everything Coudreaut says in the interview. And he's right - it is all about choice, balance and moderation.

    That said, I still don;t understand why a McDonald's hamburger isn't as good as an In-N-Out burger. Or a Burgerville burger. Or a Five Guys burger. Fast food doesn't have to be crappy food, and there are plenty of examples of how to raise the level of the category.

    Published on: June 13, 2012

    Bloomberg reports that Walmart's "efforts to acquire Latin American assets from Carrefour ... are slowing as the French retailer focuses on turning around its European business." The assets in question are in Brazil and Columbia, and the story notes that negotiations have been ongoing for some two years, with Walmart more aggressive about them than Carrefour.

    According to the story, Walmart is looking to jump-start its growth with a strategic acquisition that will bolster its international operations.

    Reuters reports that Walmart attorneys "have flagged Brazil, China, India and South Africa in addition to Mexico, as countries that represent the highest corruption risk in a global review, according to a letter from lawmakers investigating the company.

    The story notes that Walmart "has acknowledged it is investigating bribery allegations involving its Mexican operations, and that it is conducting a global review of its anti-corruption compliance program, but has not provided details about the review."

    The information about the five countries identified as high corruption risks comes from two Democratic lawmakers chairing relative legislative committees looking into the corruption allegations. They released letters yesterday that were written to CEO Mike Duke asked for more information about the internal reviews being conducted by the retailer.

    Rep. Elijah Cummings (D-Maryland) and Rep. Henry Waxman (D-California) said in the letter that " they have yet to receive documents related to the allegations. The world’s largest retailer hasn’t made executives or in-house staff available for questions and has only made outside attorneys available, according to the letter."
    KC's View:
    Wait a minute. Brazil gets flagged as a hot spot for potential bribery, which means that people are paying attention. And at the same time, Walmart has a hard time closing on a deal there.

    Coincidence?

    Maybe. On the other hand, it will be interesting to see if Walmart starts to see some slowing in its expansion if there's less of that bribery money to spread around.

    Published on: June 13, 2012

    The Los Angeles Times reports that Starbucks is putting its money where its mouth is, offering a new line of merchandise - including a limited-edition mug, tumbler and bag of coffee - that is made in the USA and is being promoted as helping to support American jobs.

    Part of the proceeds from sales of the products will go into the Create Jobs for USA fund that was founded by Starbucks CEO Howard Schultz last year after he, as the Times puts it, "excoriated politicians and fellow business leaders for failing to do their part to stimulate the U.S. economy ... Starbucks has raised more than $11.5 million for the jobs fund so far, it said, an amount that can be leveraged to create up to $80 million in loans to community businesses and organizations."

    The story goes on to note that "the American Mug & Stein factory in East Liverpool, Ohio, hired 8 new full-time workers to make the Starbucks mugs, according to the coffee company. The facility nearby that does finishing work on the cups hired two more employees.
    Overall, Starbucks plans to add 200 net new stores in the U.S. in 2012 and redesign 1,7000 locations, boosting its payrolls by several thousand positions.  The company will invest nearly $180 million to expand its manufacturing abilities in the Southeast."
    KC's View:
    I'd like to think that especially these days, people would rally around products and services with a Made in the USA pitch. (And not just because we have a company that certifies Made in the USA products as an MNB sponsor ... I've been saying this for years.)

    It may be tough...the story also points out that "prices of goods imported into the country tumbled in May by the most in nearly two years as fuel and food costs fell along with demand from nations abroad, according to the Labor Department on Tuesday."

    Published on: June 13, 2012

    Stores magazine is out with a story that says "nothing kills that warm, fuzzy relationship with consumers that retailers strive to achieve and maintain like a rude associate who chats on her cell phone as she rings up an order, or a worker who refuses to make eye contact or say 'thank you'."

    Indeed, rude employees are cited in a new survey done for the magazine as the primary gripe of shoppers. Also on the list: employees who don't know anything about the merchandise, understaffing, and store policies on returns and coupons.

    And here's the most important paragraph from the story:

    "Has customer service gotten worse over the past few years, or do shoppers have shorter fuses? It’s hard to say definitively, but one thing is certain: Thanks to the marvels of social media, it’s not just 10 people who learn about a customer service blunder — it’s 10 to the 10th power. And that makes the pressure to get a handle on customer service more intense than ever before."
    KC's View:
    Bingo.

    Published on: June 13, 2012

    Bloomberg reports that major institutional investors in the UK are saying that Tesco CEO Philip Clarke has about six months to show progress in its home market and persuade them that "he can return the U.K. to growth after four quarters of declining sales."

    “Six months is as long as anyone is prepared to wait for some material progress to appear,” said Tim Green, who helps manage more than 24 billion pounds ($37 billion) at Brewin Dolphin Holdings Plc, including Tesco stock. “We need to see some signs of progress, there is some impatience in the market.”

    “I want to see a lot more of the focus on the U.K. because it’s been such a star in the past and it’s rather caught us by surprise how quickly the slowdown has occurred,” said Paul Mumford, a fund manager at Cavendish Asset Management.
    KC's View:
    So much for the Brits keeping a stiff upper lip...

    Published on: June 13, 2012

    • MyWebGrocer announced plans to provide a comprehensive digital platform for the Foodstuffs Wellington Cooperative Society Ltd. Digital services will consist of a fully integrated platform for online shopping allowing customers a new level of shopping flexibility in the New Zealand supermarket retail space.

    “This is our first foray into the international space and MyWebGrocer could not be happier to partner with such a strong retailer as Foodstuffs Wellington,” said Curt Alpeter, Executive Vice President, MyWebGrocer. “Consumers and retailers in New Zealand are facing the same pressures and challenges that we face in the States. By providing Foodstuffs Wellington with a comprehensive and fully integrated digital platform, they will be well positioned to meet the growing consumer demand for digital services.

    Full disclosure: MyWebGrocer is a longtime and premium sponsor of MNB.
    KC's View:

    Published on: June 13, 2012

    • The Sacramento Bee reports that the Northern California local United Food and Commercial Workers (UFCW) members have called in a strategist from the national organization, hoping that William McDonough can help restart stalled contract negotiations with Raley's, Save Mart and Safeway.

    The story notes that Raley's employees have authorized a strike, and a negotiating session last week ended with the two sides "seemingly farther apart than ever." Raley's charged that the UFCW's "latest demands would have inflated ... labor costs by $20 million a year," though the UFCW quickly responded that the retailer was mischaracterizing its proposals.

    "As for Raley's," the Bee writes, "the federal mediator who's been overseeing those talks was expected to contact both sides this week in an effort to revive negotiations. Raley's spokesman John Segale said the company will meet only if the union has a new contract proposal. The third union grocer, Safeway Inc., has so far stayed above the fray and hasn't been threatened with a walkout. Talks with Safeway 'are difficult and complex, but they are civil and are progressing slowly,' according to a statement posted online by Roseville's UFCW Local 8."

    • The New York Times reports that "Frito-Lay has long dominated the snack-food business by relentlessly focusing on the middle swath of America that eats chips and pretzels and party mix without regard to the effect on the waistline. Now, though, Frito-Lay, a unit of PepsiCo, is building a 'company within a company' to pursue what might be called a 1 percent-99 percent strategy: creating high-end snacks as well as those that appeal to what it diplomatically calls 'value' customers."
    KC's View:

    Published on: June 13, 2012

    Sam Drucker, who kept the people of Hooterville in groceries for many years, is dead.

    Or, to put it another way, Frank Cady, the character actor who played Drucker on both "Petticoat Junction" and "Green Acres" - and occasionally on "The Beverly Hillbillies" - has passed away at age 96.

    Cady - who also had roles in "Rear Window" and "Ace in the Hole" to his credit - was part of a kind of repertory group of idiosyncratic character actors who had roles in situation comedies created by producer Paul Henning that were hit shows for many years on CBS.
    KC's View:

    Published on: June 13, 2012

    Got the following email from an MNB user:

    As an avid reader of your blog, being in the grocery business and also an employee of Supervalu at the corporate store support center, I have not had the urge to write in until this morning.  Like most of your readers, I agree with you on most points, but I think with Supervalu you may want to consider opening your mind a bit.  The layoffs in Southern California are unfortunate and my thoughts and prayers go out to all of the families affected.  What many of Supervalu’s employees and onlookers don’t understand is that change is needed, and in this case a very tough one for the employees of Albertson’s – Socal.  When the merger of Supervalu and Albertson’s took place, the singular company was ripe with job redundancies, complicated union deals and an over-extension of debt.  While the economy was great, all of these things were sustainable, but when it turned for the worse the pain was magnified here at Supervalu and exactly how we find ourselves in the current situation.

    As you remember it was not long ago that the corporate and banner offices experienced a reduction in force and everyone had a feeling that it could only be a matter of time for it to hit the store level.  Supervalu does a great job at fostering open communication and we see countless internal comments on how this company is absolutely horrible to work for from every part of the country.  I wholeheartedly disagree.  The layoffs, although VERY difficult, are necessary.  Supervalu is working to make major customer facing changes at each banner and also provide our wholesale customers with the best possible values and product.  Pricing investment has been completed in our produce department and there are major changes coming in the Chicago market along with a truly hyper-local focus in every corner of the country.  What outsiders and even employees forget is that this long-term capital investment cannot come out of thin air; cost cutting, changes in workforce and efficiencies must be harnessed in order to make the necessary customer facing changes.
     
    Many employees are so quick to sit back, point the finger and be content with the ship to sink.  I might remind these employees that this is the company that also funds their pension (while most, like myself are responsible for funding their own retirement i.e. 401k), puts food on their table and a roof over their head.  As a newer employee I have my own doubts about the success of the company (and by no means drinking the proverbial Kool-Aid), but it does not mean that I should be free to come to work on a daily basis with a horrible attitude, poison the well and not perform my job to the best of my ability. 
     
    The moral of the story is that while everyone is so very quick to judge Supervalu, take a step back and think that the company is making these tough decisions to return to providing shareholders what they have promised, begin to grow again and become the staple in local communities across the country.


    I think you make fair points about Supervalu employees, though it is hard for me to be critical of people who think that they are being led off as cliff. I hope they're not. I really do. And I think it is a tough job for all involved.

    When the Southern California news was announced, I went out of my way not to be overly critical. I simply pointed out that this reflected what Supervalu's priorities seem to be, and then asked a legitimate question ... whether a retailer can be better at customer service if it is cutting back on staff so significantly.




    Regarding the ongoing Walmart bribery investigation, one MNB user wrote:

    I am one of those who feel like this will end up being a blip on the radar for Walmart. Will they eventually lose some top execs? Sure, probably. Will they all the sudden stop collecting $350 billion in sales per year? I doubt it very seriously.

    The issue lies in lack of integrity. Not the lack of integrity that clearly exists within the C-suite at Walmart, but the lack of integrity on main street. You see, words are cheap these days. Walk down the street of your town or stop into a community center or hop onto an internet blog and start asking folks what they feel regarding this scandal and I’m sure you’ll get the venomous commentary that you would expect, and absolutely rightfully so. But then follow it up with a question as to whether they will continue shopping at Walmart or if it were possible to peer into their bank accounts and find out where their money is being spent and I think the real truth may come to light. People want what they want and are willing to ignore inconvenient things as soon as it might interfere with their daily lives. The lack of integrity even shows up right in your own blog post today. All these government organizations like teachers, fire fighters, and police which are all highly unionized are investing their pensions in a company that is notoriously and highly notably against unions. I guess at the end of the day integrity can and will be sacrificed for a good ROI or an “everyday low price”. That’s why I feel the way I do about Walmart’s future.


    But another reader wrote:

    For the term "accountability" to be effective - we have to use the same standards for all.  Be it governments or businesses...associations or individuals.

    The leaders of Walmart - and the entire Walmart organization - have the responsibility to act within the law and within social norms.  If we flippantly excuse their actions in Mexico as standard behavior for the country...what does this mean when they expand in China, or the Middle East or Central Africa.  Since when is the lowest common denominator the accepted standard for the worlds largest company?  Well, I guess we already know the answer!





    On the subject of the proposed jumbo soda ban in NYC, MNB user Chanda Elliott wrote:

    Instead of having a ban on soda. We need to change our EBT system. It needs to be a mirror image of the WIC program. Education and limited to their choice of food they can purchase with their EBT cards. I do not understand why they can use their card to purchase soda, chips, & candy. In some states they can get cash back and turn around and buy alcohol, tobacco and lottery tickets. If they are only limited to buying healthy foods that would be a huge start.

    Another MNB user chimed in:

    I understand the thought behind banning the sale of large sodas in restaurants, BUT it is inconsistent to ban in one venue without banning in others. Here in the Midwest, it is already cheaper to purchase a lone soda (no meal attached) in a c-store. Something I did on a regular basis when buying to go food from an establishment that did not offer a bundled meal with drink. It wasn’t quite as convenient, but the c-store was on the way. I don’t have an answer for the obesity crisis, heck I am having trouble getting my husband to follow a sensible eating plan, but education IMHO needs to be a piece of the puzzle.

    And, from still another reader:

    Does Mayor Bloomberg really believe that banning jumbo sugary drinks in NYC will solve the problem?  What’s to stop a patron from ordering two smaller sugary drinks?  Will he outlaw refills?  Will outlawing all sugary drinks be next on his agenda?  Why do restaurants have to comply when convenience stores don’t?  If the Bronx is the poorest borough in New York, I would expect more people shop at c-stores and bodegas than dine out at restaurants so why target restaurants and exempt c-stores?  I’m asking these ridiculous questions because creating these laws will not help someone “get on track and stay on track” if they don’t want to.  It’s a matter of desire to change and legislating what people can and can’t buy won’t change the desire.  I agree that obesity is a real problem but there are two ways to address the issue:  consume less calories than you burn or burn more calories than you consume.  Either way, it takes a willing desire for someone to make this change.



    Responding to Michael Sansolo's column about confronting problems rather than avoiding them, one MNB user wrote:

    When I worked for a major CPG company, the MIS department always created a "work around" instead of fixing the problem. The rocks at the bottom of the river never get removed that way!




    And, on the subject of yesterday's Eye-Opener, MNB user Steven Ritchey wrote:

    A few years ago, Neil Diamond was on a major US tour.   I forget where he was when just before going on one night, he started having trouble with his voice, he went on anyway, and the concert by all accounts was terrible.  That night, after the show was done, he posted to Twitter that  he knew the performance wasn’t up to par, but he would make it up to the fans.  A few days later, he announced that anyone with a ticket who attended that concert would get their money back.  This was the first time I ever heard of this happening, where the performer would make a refund on the tickets, after the performance.

    Wow. Good times never seemed so good.
    KC's View: