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    Published on: August 10, 2012

    by Kevin Coupe

    Regular readers of MNB know that for the past few months, Supervalu has provided something of a target for this site. I don't think any of the criticisms were gratuitous, but they were frequent, colorful, sometimes graphic, and came not just from me, but from a wide variety of industry players, many of them current and former Supervalu employees. I don't think that the criticisms were personal, though a certain former CEO of the company might disagree with that characterization. And they have taken up an enormous amount of space on MNB.

    But it needs to be pointed out that many of the people who work for Supervalu are good, hard-working, dedicated people who want nothing more than to contribute to the company in a way that will help it out of the mess that it is in. I got a first hand taste of that this week, when I was invited to speak at a conference of retailers sponsored by Supervalu's Eastern Region.

    That's right. Supervalu invited me to Atlantic City and paid me to give a speech. The same company that I've been raking over the coals for weeks.

    Now, to be honest, I got the booking months ago. But with every word I wrote or posted over the past weeks, I thought to myself that this would be the one that causes them to cancel the gig. That never happened. When I drove down to Atlantic City this week, I half thought that the Supervalu folks were planning to lure me into a dark alley and beat me up. That never happened, either. If nothing else, I figured that someone at Supervalu corporate would see my name on an invoice and say, "WTF?"

    No, what I found at this meeting, in addition to a group of retailers hungry for ideas that would make them more competitive and a view of the future that they could integrate into their business models, was a group of Supervalu executives who were absolutely charming and totally classy. They never asked to vet my remarks, and they were nothing but supportive. They wanted to listen, and they wanted me to be provocative. Go figure.

    I give special kudos to Manda Johns and Brian Keech, who were a pleasure to work with - these are the kind of people who, working on the front lines, will be a source of strength for Supervalu. They put a positive face on an embattled company.

    I spent very little time talking about the past. I thought it was more important to talk about the future. I won't pretend that just hiring me compensates for all the issues that the company has ... but I also thought that in view of all the things I've written about Supervalu in the recent past, it was only fair to tell you what a positive first-hand experience I had with the company. It was an Eye-Opener.

    I was rooting for them to transcend all their issues before. I'm rooting even harder for them now ... though I'll continue to call them as I see them, which is exactly what many of the folks I spoke to at Supervalu seem to want.
    KC's View:

    Published on: August 10, 2012

    The freshandeasybuzz blog reports that Tesco's Fresh & Easy Neighborhood Markets division in the US has made the decision to cut back on store hours in 33 of its 199 stores in California, Arizona and Nevada, moving from an 8 am-10 pm schedule to 9 am-8 pm.

    The move, according to the story, allows Fresh & Easy to lay off a number of employees as it seeks profitability for the US division.
    KC's View:
    The "insider" who writes the blog has a great piece of tongue in cheek analysis worth sharing...

    Grocery stores that are doing well don't close at 8 p.m., unless they're doing so well that opening them any later would prove to be an embarrassment of riches to a modest grocery retailer. And grocers who want their stores to do well don't close them at 8 p.m.

    And, he goes on to write:

    If a grocer decides to close a bunch of stores, like 33 of its 199 units, at 8 p.m. rather than the previous 10 p.m., you can take it to the bank the company CEO has very little if any faith in the future potential of those stores.

    Now, maybe this is just a matter of being efficient. But 8 pm does sound awfully early to close a supermarket.

    I've resisted for a long time the idea that Tesco would pull the plug on the Fresh & Easy experiment, though i've long believed that if someone were to come along and write a check, it wouldn't take much to convince management back in the US to take it and run. But now I'm beginning to wonder if Tesco CEO Philip Clarke is convinced that there is no pot of gold at the end of the US rainbow, and is looking for the exit.

    Published on: August 10, 2012

    The New York Times this morning reports on how retailers are personalizing customer offers, but also have the ability "to adjust prices based on shoppers’ habits."

    According to the story, "grocers like Safeway and Kroger are going one step further, each offering differing methods to determine individualized prices. Hoping to improve razor-thin profit margins, they are creating specific offers and prices, based on shoppers’ behaviors, that could encourage them to spend more: a bigger box of Tide and bologna if the retailer’s data suggests a shopper has a large family, for example (and expensive bologna if the data indicates the shopper is not greatly price-conscious).

    "The pricing model is expected to extend to other grocery chains — and over time could displace standardized price tags. Even though the use of personal shopping data might raise privacy concerns among some consumers, retailers are counting on most people accepting the trade-off if it means they get a better price for a product they want."

    The story suggests that "retailers say the groundwork has been laid with individualized coupons, which are resoundingly popular. Sites like Amazon have also made consumers comfortable with custom offers and varying pricing, they say."
    KC's View:
    It has always been my impression from talking to retailers that the real problem isn;t offering customized prices to certain customers, but refusing to give those same prices to other (less deserving) people who ask for them. People can get ticked off when they find out they paid more for something than their neighbor.

    For customized pricing to work, just like any legitimate loyalty program (as opposed to the glorified coupon programs that are most loyalty schemes), retailers have to have the courage of their convictions.

    Published on: August 10, 2012

    A new report in the Journal of the American Medical Association suggests that "cholesterol levels have improved slightly among American youth over the past two decades ... From 1988 to 2010, the rate of high total cholesterol dropped from 11 percent to 8 percent in children ages 6 to 19 ... The levels of LDL cholesterol - also called "bad" cholesterol - and fats in the blood also fell among adolescents over the study, which is based on nationally representative data on more than 16,000 youths."

    However, the report also says that slightly lower cholesterol levels do not begin to compensate for the fact that "two-thirds of American adults and 15 percent of children are overweight or obese, and in some states the rate for children is above 30 percent."

    The report is based on numbers generated by the US Centers for Disease Control and Prevention (CDC).
    KC's View:

    Published on: August 10, 2012

    The Denver Post reports that 28 Target stores in the Denver market will, in early October, begin offering personnel and tech services from the Geek Squad, described as "a test bed for a partnership" that could roll out nationally if it works.

    According to the story, "Each Denver Target store will feature Geek Squad technicians for 80 hours a week during the six-month trial, which will also include one Target store in the Minneapolis area, where the companies are based."

    Geek Squad, known for providing in-store tech support as well as home theater installations and repairs, was founded in 1994 but acquired by Best Buy in 2002. best Buy quickly tried to turn the Geek Squad into a differential advantage along the same lines as the Genius Bars in Apple Stores. However, the program had mixed results, and last month the troubled Best Buy chain announced it was laying off three percent of Geek Squad employees as a way of cutting costs.
    KC's View:
    I think this is smart for both retailers. Target, because it gets a branded and reputable form of consumer tech support in its stores. Best Buy, because it finds a way to generate some cash, bolster its own bottom line, and build brand equity for what should be an enormous differential advantage for the company.

    When Best Buy announced it was cutting back on Geek Squad services, I had a few people write in to tell me that the program never really worked as well as it should have, and was no big loss. Maybe that's true, but my response would be that the Geek Squad should have been an big winner for Best Buy. if it didn't work, it seems like a pretty safe bet that it is because Best Buy didn't do it right, not that it was a lousy idea.

    Published on: August 10, 2012

    The US Postal Service (USPS) said yesterday that it lost $5.2 billion in the fiscal third quarter, the Wall Street Journal notes that "it was nearly out of cash and likely to exhaust its government credit line in coming months."

    The USPS defaulted for the first time in history earlier this month when it did not make a $5.5 billion payment for future retiree health benefits, and has said that it is likely to miss a similar payment due at the end of September. USPS management says that it can continue to pay employees and critical vendors, but might miss payments to some suppliers.
    KC's View:
    Oy. Don't get me started.

    Published on: August 10, 2012

    Reuters reports that the 3rd U.S. Circuit Court of Appeals in Philadelphia has upheld lower court rulings in favor of Walmart in a case that had immigrant janitors accusing the retailer of "unfair labor practices, encouraging illegal immigration and locking them in stores at night and on weekends."

    The ruling "blocked the workers from suing as a class and rejected their claims that Wal-Mart acquiesced in illegal work conditions ... noting they worked in 180 different stores in 33 U.S. states, for 70 different contractors and subcontractors, and for varying hours and wages." The judges said that a corporate conspiracy had not been proven by the plaintiffs.
    KC's View:

    Published on: August 10, 2012

    • Lest we all view Amazon has being almost invincible...

    The Associated Press reports on the case of a Washington man who ordered a flat screen television and received instead a Sig Sauer semiautomatic assault rifle.

    According to the story, "An invoice showed that the gun was intended for delivery to a firearms dealer in Duncansville, Pa. Horvitz called police, who took the gun and are investigating how the mistaken shipment occurred. Amazon and UPS had no immediate comment."
    KC's View:
    Oops.

    Published on: August 10, 2012

    • Tesco is reported to be getting into the Starbucks business, having made an investment to acquire 49 percent of Taylor Street coffee shops. Taylor Street is creating a new chain called Harris & Hoole, that will specialize in "artisan coffee."

    Nothing in the Harris & Hoole stores will say that Tesco has a piece of the action, according to reports.
    KC's View:

    Published on: August 10, 2012

    ...with brief, occasional, italicized and sometimes gratuitous commentary...

    • Belle Foods - the supermarket chain created earlier this year when a new company acquired all 57 grocery store locations of the Southern Family Markets grocery chain operating under banners such as Food World, Piggly Wiggly, Bruno’s, and Southern Family Markets - announced that it will reopen a new store in Hoover, Alabama, tomorrow.

    The store has undergone a major renovation and will feature a fresh salad bar, Panini grill, sub station, in-store marinated and seasoned meats, along with Alabama caught shrimp and seafood. it also is said to be the first grocery store in the south to feature a childcare center. Belle Jr. will be a place where children ages 3-10 years of age will be able to enjoy educational games, toys, and crafts all while their parents are shopping within the store. Belle Jr. will be staffed by employees who have undergone a comprehensive background check and are CPR certified.

    Bill White, the CFO of Big Y Foods and a 30-year industry veteran, formed Belle Foods and serves as the President and CEO. His son, Jeff White, serves as the Chief Administrative Officer.

    Good for them. I wish them all the best of luck, and may years of prosperity. And next time I am in their neck of the woods, I'll plan to stop by...

    Reuters reports this morning that JC Penney's Q2 sales were down 22.6 percent, same-store sales were down 21.7 percent, and that the company had a net loss of $147 million - all seen by analysts as a result of the company's decision to move from ubiquitous coupons, sales and promotions to more of an EDLP approach and an in-store model that depends on boutiques and lifestyle marketing.

    Despite the numbers, CEO Ron Johnson pledged to "stay the course."

    • The Wall Street Journal reports on how a "rash of bad weather - from a drought in the U.S. to a hot summer in Russia to excessive rain in Brazil - is straining the global food chain and pushing up prices around the world.

    "The United Nations Food and Agriculture Organization on Thursday said its index of global food prices rose 6% in July, the biggest increase since November 2009. The index, which measures the export prices of food, is 10% below its February 2011 record."
    KC's View:

    Published on: August 10, 2012

    Got a lot of email yesterday...

    Let's start with one from MNB user Terry Pyles, who seems to particularly enjoy one aspect of this little enterprise:

    Can’t tell you how much I enjoy MNB every day.  I may not always agree with everything you say, but that’s the nature of true discourse and I appreciate it as much as when I do agree.   Always thought provoking, never afraid to take a stand, and frequently amusing enough to induce an out-loud chuckle even when I am alone.   I’m also a huge fan of the pop culture references and quotes.
     
    Which brings me to my reason for writing today.
     
    In today’s first article you talked about grocers who are oblivious to the competitor lurking in their back yard, namely Amazon.  It reminded me of your oft-repeated reminder that compete is a verb.
     
    Then in a subsequent piece on technology changing everything you quoted my favorite starship Captain, Jean-Luc Picard, who said "Everything is impossible...until it is not."
     
    And finally, in another piece on Amazon you said “Amazon is engaged in the act of selling . . .”, which brings us back to Captain Picard.
     
    One of the qualities I liked best about Picard was his (OK, the script writers’) choice of words.  When the crew was about to embark on a new mission; the coordinates locked in, destination set, everyone in their “ready” positions, the Captain gave the order to begin the journey.  Did he say “Go” . . . “Proceed” . . . “Begin”?  No.  The word he liked to use was “Engage”.
     
    Most astute use of language on your part.  Well done, Number One.


    I feel a sudden craving for Earl Grey. Hot.




    My "FaceTime" video commentary yesterday focused on the generation gap between older people who run retailers and manufacturers and the young people who actually consume their products and services. One thing I mentioned was that I continue to be amazed by the number of retailers who don't realize the commitment that Amazon has made to the grocery business, and I said that sometimes I feel like John the Baptist, wandering the country and preaching the e-commerce gospel.

    Which led one MNB user to write:

    I think of you, in the context of this article, not so much as John the Baptist - I think altruism creeps in here where perhaps a stretch may have to be made.  After all, your whole format and dialogue is digital which lends bias, if nothing else.  No, I think of you more as the mythical version of "Johnny Appleseed;" spreading seeds of digital inspiration and guidance to today's business drivers.  And like Johnny, some of his seeds took, which I'm sure gave him pleasure, while others may not have, which gave him continuing drive (so-to-speak).  But still he planted.

    Don't tell Mrs. Content Guy that I'm wandering the country spreading my seed. She may get the wrong idea.

    From reader Steve DelBonis, on the same John the Baptist reference:

    Not sure I can see you changing diets from that wonderful food, beers and wines you recommend to honey and grasshoppers.

    Greatly enjoy MNB especially your role as a futurist.


    The generation gap piece prompted MNB user Gary Harris to write:

    We had a similar discussion a couple years ago at my church. I was trying convince the council that we could probably increase, if not at least make more consistent, our members' contributions if we launched an e-giving program. There was some resistance to this, thinking that folks would be less thoughtful about their offerings if they were done automatically, plus the loss of visible giving during the weekly worship service. As part of my argument, I said that there was an entire generation of givers growing up who will never own a checkbook, and who will take care of most of their financial obligations electronically. To make their support of the church more burdensome by forcing a particular way to give because it was tradition didn’t seem like a smart long-term strategy. After all, if we go back far enough we used to bring animals into the building, cut them open and set them on fire. We seem to have moved beyond that, at least in our offerings during worship.

    MNB user Bob Bartels wrote:

    It took me aback to see my seven year old granddaughter helping the five year old work through a laptop issue .  That is the way it is.

    From another MNB user:

    I find it amazing how fast all the technological fads change. It wasn’t that long ago that instant messaging was all the rave. Although I found it annoying, I adopted it, and it seems that, as soon as I did, it went away. Last night, I was trying to figure ought some of the features of this new Facebook thing so I asked my son and his girlfriend to help me. They tried but gave up saying they never go on Facebook anymore. We’re going to have to be pretty nimble to keep up.

    Another reader chimed in:

    I couldn't agree with you more!  For those of us over the age of 30, we all better wake up and figure out how to play in this new world that is very quickly becoming the defacto way of life.  Most especially those of us who have spent most of their careers in a field that is the front line of how we, as a society, live today.  The change is here and will accelerate as the economy improves and the Millennials mature.  They are the largest cohort in recorded history (yes, that's right, my fellow Boomers) and in my experience, the characteristic more prominent than their technological savvy is their entrepreneurial spirit.  So, I look forward to seeing how the brewing alchemy of retailing and technology will play out in the next 10-20 years.  Ought to be a lot of fun!

    And, from still another reader:

    Going off your "Everything is impossible..." quote ...

    I might have missed your commentary on this,  but we DID land an SUV on Mars from a sky crane!

    What!! Seriously!


    Seriously. It was pretty cool, huh?




    MNB user Deb Faragher had some thoughts about Amazon.com:

    I feel as if the “long time listener, first time caller” applies here. I’ve been reading you almost since the beginning. Despite the fact that I retired a few years ago, I can’t tell you how much I enjoy my daily “fix”. And I love sharing with my husband, and others, your insights on all things cultural. It’s amazing to me how aligned our tastes are and how often I’ve wanted to write and bring to your attention books and TV shows, not to mention some great food finds. I was also delighted when Mike Sansolo joined you—I knew him from both our former lives, mine at GS1 US (formerly UCC). All that is to say “keep it up”.

    That brings me to a story my husband and I thought you’d appreciate. Talk about customer service and the art of winning or losing customers, not to mention yet another ringing endorsement of Amazon.com. We are in the process of relocating from! NJ to South Carolina and, in many respects, have had nothing but positive service experiences in our first week here. The story lies with our need to purchase a new TV. We wanted an HD LED TV and it had to conform to a specific space. We determined that there was a brand new Samsung 37” that fit the bill. We went online to locate what stores were in our area and if any had stock. It turned out that Best Buy, not the one closest to us though, did have stock. We called that store (about 25 miles away) to see if it could be delivered directly to us. It took over 20 minutes and numerous “on holds” but we were finally all set.

    Then two things turned the tide. First, though the website offered free delivery, as the deal was being done, we were told that the delivery was, in fact $69.95. It turned out this included set up of the TV and take away of the old TV so we decided to go for it. Then, when processing our credit card, due to potential fraud issues, we were told we had to present ourselves at the local Best Buy with our card so the sale could be processed. What? First of all, we’re in an area where many, many have second homes. Doesn’t this happen all the time? Further, they wouldn’t guarantee they’d hold the TV or commit to the delivery date promised (8 days hence). I understand that intellectually, but it was not what we wanted to hear.

    After discussing this with my husband, it occurred to us to check Amazon to see if the Samsung TV we wanted was available. Within minutes I had purchased the TV (no trip to local store to present a card) and was promised delivery in 3-5 business days. And it was done. The TV arrived in 4 business days (and I could track it from the time of the confirming email received within 24 hours), my husband set it up and we’re now enjoying our shows, yes, starting the day with Morning Joe. Best Buy lost the sale and a customer.

    It’s with great interest that I read in yesterday’s WSJ - "Best Buy Co. founder Richard Schulze envisions a turnaround plan for the electronics retailer that involves cutting prices to better compete against Amazon.com Inc. and other online retailers while ensuring that the in-store customer-service experience is as good as Apple Inc.’s, according to people familiar with the matter.” Based on my experience last week, they do have a long way to go.


    Along the same lines, MNB user AJ Hoyle offered this anecdote:

    As you suggest this morning, I’ve ordered products from Amazon in the past and gave Walmart.com a try on July 22nd to see how they measure up.  It’s now August 9th and I’ve only received 7 of the 11 products I ordered (at least I received the toilet paper last week).  Below is my “frustrated customer” email to Neil Ashe, yet to be met with a reply.

    Good morning Mr. Ashe,

    Although I'm an Amazon Prime member, I read with great interest about your arrival at Walmart.com back in January.  I waited until July 22nd to give your team's eCommerce effort a try with an order of 11 items normally purchased at my local grocery store.  Here I am two and one half weeks later in receipt of only seven items delivered in four different shipments over the past two weeks.  I have yet to see my four remaining items and I've included tracking information on one of the four items below for your review.  The items were originally shipped via FedEx from the Atlanta area, made it to Orlando, were then sent to Bentonville where the order was cancelled and new, individual orders were cut for each item after being assigned to Newgistics.  My credit card was charged over two weeks ago, yet I will receive my order in three weeks?  How am I supposed to replace/supplement my weekly grocery shopping trip with your service if I can't depend on the products I ordered to be delivered within three weeks?  Additionally, I would need a "receiving clerk" just to track all the shipments and products arriving across numerous days.  Are you all really gearing up to take on the Amazonian beast with the service you're currently offering?  I apologize if my frustration is now showing, but I believe you may be the only associate at your company who may care.  Thanks for your time this morning and good luck implementing your strategy at Walmart.


    Good luck, indeed.




    On the subject of how crushing student load debt affects consumer spending, one MNB user wrote:

    I worked for a student loan company just recently- they were contracted by FSA (Federal Student Aid) to service loans owned by the government. It was literally frightening to talk to parents, students and other borrowers and see how little they truly knew about the thousands (sometimes hundreds of thousands) of dollars they had borrowed. In fact, some didn’t know they had loans at all. Others thought the money was interest free, or a grant. Again, absolutely terrifying. There is massive reform needed but, I can tell you that the government stands to lose billions in interest on student loans. They are not going anywhere, and, unfortunately, I feel that people’s calls for forgiveness of student loan debt are a lost cause. While there are very few forgiveness programs, most are extremely hard to qualify for and often they do not forgive an entire loan debt. The president (not to play politics) has introduced programs to ‘help’ with this debt which the public sees as beneficial because they don’t understand the implications or long-term effects of the programs. I can tell you that there are very few, truly beneficial programs to help with student loan debt. Please inform yourselves before you sign on the dotted line!




    Regarding Amazon's locker initiative, MNB user Clint George wrote:

    Being a former employee of Amazon, I used this locker system last winter when ordering my expensive Christmas gifts.  It was nice not having to worry that my electronics were sitting on the front porch all day at my house just waiting for a thief to take (or the ones that conveniently follow the UPS driver then steal right after they leave).  The locker system does just what it says, lock your valuables up until you decide to retrieve them.

    Very nice system, I would highly recommend to those that have this option.





    On the subject of the first woman to ever referee an NFL game, and comments we had on the subject yesterday, one MNB user wrote:

    Being a high school and college official for three sports (including football), there is a balance to "doing your job without being noticed" and allowing participants and coaches to manipulate the official.

    Anyone who thinks an official should just stand there and take abuse is wrong.  There is a balance between fading into the game and letting the players play and make plays ... and knowing when to shut down the BS that happens from time to time.

    Good baseball umpires will tell you that you eject early so you don't have to eject at all.   There are lines players and coaches must stay within ... and when they cross the line, they need to be punished (flag in football ... technical foul in basketball ... ejection in baseball). Once that line is clear, the game (and future games) will run much smoother for everyone.

    A pet peeve of mine are "officials" that say they haven't ejected/called a "t"/or thrown a flag for unsportsmanlike in all their years of officiating.  All that means is that official hasn't done their job and is setting up the player/coach for running into an official that will.

    The fact is Shannon Eastin is an excellent official ... but it's not because she did her job without being noticed.  It's because she knows the rules, interprets the rules and implements the rules ... and when the game allows her to do so without being noticed ... GREAT. However, when she needs to handle business ... I'm confident she will!!

    KC's View:

    Published on: August 10, 2012

    I'm in love.

    In this case, it is not with Mrs. Content Guy, though it was Mrs. Content Guy who introduced me to her, and she may love her as much as I do. (Got your attention now, don't I?)

    Her name is Katie Goodman, and she's a singer. She has a song on YouTube, and watching made me fall head over heels. I'm going to provide a link below, but before you click on it, there are a few things you need to know.

    Her song has, shall we say, a few moments where colorful epithets are employed in the act of a plaintive, all-too-human cry for understanding. Therefore...If you are in your office, listen to it with the door closed. If you are in a cubicle, you need to use headphones, or listen to it later. And whatever you do, under no circumstances should you listen to this with children nearby. Trust me on this. (And if the use of the occasional vulgarity offends you, don't click on the link.)

    Okay. if you have heeded all my warnings, you are ready. If you have decided to ignore my warnings, don't blame me.

    Here is the link.

    I hope you love her as much as I do.




    I have a couple of wines to recommend to you this morning ... the 2005 Borgianni Chianti, which was absolutely terrific with spicy Italian food ... and the 2005 Francis Coppola Reserve 2005 Viognier from California's Russian River Valley, which is bright and delightful for these hot summer afternoons.




    Haven't seen any new movies over the past week or so, but I did see a preview that I think looks totally cool - for Taken 2, a sequel to the big Liam Neeson hit of a couple of years ago.

    Check it out here.

    And, if you haven't see the official trailer for the new James Bond movie, Skyfall, you can check it out here. (The best moment comes at about 2:15 into the trailer...it made me absolutely giddy....)

    Can't wait.




    That's it for this week. Going to be a great weekend, I hope ... with the Litchfield Jazz festival on Saturday and, at some point, The Bourne Legacy.

    Have a good one, and I'll see you Monday.

    Fins Up!
    KC's View: