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    Published on: November 19, 2012

    Fiscal Commission Co-Chairs Erskine Bowles and Alan Simpson To Keynote Event

    While the US just barely avoided going off the so-called "fiscal cliff," several significant issues remain unresolved, most prominently addressing the country's $16 trillion national debt.  Major decisions await the new Congress, such as raising the national debt ceiling, addressing the sequestration, and reining in government spending.  Join renowned political leaders Alan Simpson and Erskine Bowles, co-chairs of the National Commission on Fiscal Responsibility and Reform, for a candid conversation about the state of the US economy and the future.

    Don't miss the six educational tracks focused on:  Store Leadership, Connecting with Customers, Store Operations, General Merchandise.HBC, Fresh & Healthy, and Technology.

    REGISTER AND LEARN MORE AT www.TheNGAShow.com.
    KC's View:

    Published on: November 19, 2012

    Eleven years ago this morning, I sat down and wrote the first edition of MorningNewsBeat, and sent out the very first MNB Wake Up Call to about a hundred or so people, friends and associates from my personal Rolodex. (How's that for an old-world reference that probably mystifies about a third of the MNB community?)

    As of this morning, there are more than 25,000 members of the MNB community.

    It has been an amazing ride, and I have a lot of people to thank.

    You, to begin with. You not only read MNB, but you have shared it with your friends and families and co-workers and business partners and customers and clients, which has helped the site grow in terms of population and, I hope, some small measure of influence. You also share, through the hundreds of emails I get each week, your opinions, passions and views of the world ... without which the site would not be nearly as interesting. And provocative.

    I need to thank Michael Sansolo and Kate McMahon, who write their columns for MNB and add to its diversity of thought and distinctiveness of voice.

    And, I need to thank the many sponsors who make it possible for you to receive MNB each morning, free of charge. Companies like MyWebGrocer, which has shown tremendous loyalty to MNB and to you with its presence on the site; I hope they feel I've shown the same loyalty to them. I'm proud that MyWebGrocer, which has been such a terrific force in the e-commerce and online marketing arenas, has seen MNB as natural partner as it shares its message.

    As you look down the page on any given day, and you'll see the names of a number of other companies that are valued MNB sponsors - companies like Clement Pappas. Samuel J. Associates. The Food Marketing Institute. The National Grocers Association. Made in USA Certified. Wholesome Sweeteners. And, of course, Webstop, which not only sponsors MNB but also powers the site, making it possible for me to deliver it efficiently and effectively, even with my low level of technical proficiency.

    If you get the chance, click on the links provided by these companies. Ask them about their products and services. And thank them for sponsoring MNB.

    I'd better not forget to thank Mrs. Content Guy. She puts up with me. Enough said. (Big week around here. Today, it is MNB's birthday. Tomorrow, it is hers.)

    It has been a tremendous 11-year run. And, as I often say, I'm going to keep doing it until I get it right.

    So thank you.

    And ... Slàinte!

    KC's View:

    Published on: November 19, 2012

    by Michael Sansolo

    One of the hardest tasks in business is to somehow see what you do through the eyes of your shoppers. For instance, a few weeks ago, Kevin bemoaned a consumer publication article that referred to all private label goods as "generics" or "no names." But the truth is, many shoppers really don’t know what is or isn’t private label. They certainly don’t understand control brands. They just buy stuff they like or items that satisfy their needs.

    In the same spirit, it should give the industry pause to consider a recent article by Washington Post columnist Petula Dvorak on the 21century general store in her neighborhood. The store her community uses for all its critical needs: CVS.

    Of course, this isn’t a new phenomenon. I’ve heard retailers talk for years about the growing competitive power of CVS and Walgreen as the new convenience store or small supermarket. But here again, through the eyes of a shopper we see it even clearer. Dvorak explains how CVS has figured out how to meet the needs of different neighborhoods in Washington and shoppers as disparate as a harried mom, a congressional aid, a cop and a prostitute…all in the store at the same time.

    She details how the product mix has morphed from what a drug store used to carry into a range of needs including some alcoholic beverages, better quality food and school supplies. Her article reminds us that there are companies that have found a way around hurdles - such as operating in inner cities - that completely stymied other players.

    More importantly, it reminds us that shoppers don’t think like us. They see their needs, they see solutions and they do it through their eyes, not ours.

    That’s more than an eye-opener. That’s a call for readjusting your vision.
    KC's View:

    Published on: November 19, 2012

    In an email circulated to all Supervalu employees on Friday, Dave Pylipow, the company's
    executive vice president, Human Resources & Communications, revealed a series of compensation and benefits changes and reductions - including a virtual wage freeze - that he conceded would "have a significant impact" on workers, but were necessary "to position our company for success" and "to fund our growth."

    The email explained that:

    • There will be no 2013 merit pay increases for salaried team members. "Additionally," he wrote, "hourly team members in our corporate, banner, region and distribution center offices will not receive a merit pay increase. This does not impact store hourly or store pharmacy positions, or hourly operational distribution center roles. Promotions and job changes will continue to be recognized with pay changes where appropriate."

    • "Subject to any applicable laws, the frequency at which some team members are paid will change in early 2013. To! day, all team members are paid on a weekly basis. Next year some salaried team members will transition to a bi-weekly pay schedule and others to a monthly schedule. If the frequency of your pay changes, we will give you advanced notice as to when this takes effect. "

    • "Our service anniversary awards program (years of service pins and PRO points for milestone awards), as it exists today will be discontinued. We will look for meaningful ways to recognize service and performance for our team members."

    In addition, Pylipow wrote, "For salaried team members, as well as hourly team members in our corporate, banner, region and distribution center offices, the company’s matching contributions are being suspended ... For store hourly and store pharmacy positions, as well as hourly operational distribution center roles, the company’s maximum matching contributions will be reduced from 5 to 3.5 percent."

    The memo concluded: "We recognize that these changes will have a significant impact on you, and we will continue to evaluate them in light of our business results. Thank you for your understanding and your work for the company in these critical times."

    In its coverage of the story, the Star Tribune writes that "the benefit cuts ... are the latest in a spate of changes for the struggling grocery chain that is exploring selling off pieces or all of its business. Earlier this month, Supervalu said it was laying off 700 employees, or 4 percent of the workforce, at its Shaw's grocery chain in New England. In September it said it is closing 60 stores nationwide, none of which are Cub Foods. In June, it announced 2,500 job cuts, or 13 percent of the workforce, at its Albertsons outlets in Southern California and Nevada. Albertsons is its largest chain.

    "Supervalu also cut at least 200 jobs at its corporate offices in Eden Prairie this year. Last year, it laid off 200 part-time employees at Cub and 900 at its Acme chain in the Philadelphia area."

    In addition, Supervalu has said that the company is for sale at the right price, either as a whole or in pieces. There are said to be numerous investment firms looking at the books and considering an offer, though nobody has yet pulled the trigger.
    KC's View:
    Tough times at Supervalu, with little evidence that things are going to get better any time soon. Is there anyone really buying this "fund growth" stuff? It sounds a lot more like they are simply trying to stave off disaster, and that growth is a lot less important than bare survival.

    Maybe I'm just being cynical ... but I have to wonder how this memo played out among the Supervalu employees affected by it. There will be some who will say they should just be grateful that they still have jobs, and they have a point. But in reading that memo, I tried to put myself in the position of those employees, and I think I would have asked a) if the sacrifice is being felt at all levels of headquarters (including the folks in the executive suite), and b) how, beyond employment, can I have some skin in the game?

    If I'd been writing the memo, I have might taken the opportunity to say that even the folks at the uppermost levels of the company would be feeling the impact. (Imagine how differently the memo might have been received if, say, the folks at the top actually took a cut in order to "fund growth".) I also might have tried to find a way to tell people that if their sacrifice pays off and the company survives, that they will be rewarded at the end ... maybe with shares of a revived and viable Supervalu ... or maybe in some other way.

    I guess that I'm sort of imagining that Supervalu is a really big boat, and that the boat is sinking. This could have been an opportunity to tell everyone that if they stay together, and work hard and make requisite sacrifices together, that they'll all be in the same boat if the ship stays afloat and makes safe harbor. But this memo ... well, I can't help thinking that while the salaried folks are being asked to make sacrifices, a lot of folks may be thinking that the folks at the top are going to have best and first access to the lifeboats.

    But maybe I'm just being cynical.

    Published on: November 19, 2012

    Twelve days after Amazon announced that for the first time, it would offer its Prime membership - which gives subscribers automatic two-shipping and free online streaming of movies and television programs - on a monthly basis for $7.99 per month, the company has stopped selling the monthly option.

    Previously, Prime was sold only on an annual basis for $79 per year.

    Gizmodo.com, in reporting the change, suggests that this probably means that "they didn't sell all that many."

    An Amazon spokesperson explained the change this way: "We regularly test new options for our customers. At this time, we've completed our test and are no longer signing up new customers for Amazon Prime monthly memberships."
    KC's View:
    This proves something I've always believed - which is that CEO Jeff Bezos is willing to kill Amazon's young if he thinks they are not helping to build value. I'm not sure about the back room machinations that may have led to the monthly Prime option being approved and then dumped in less than two weeks. But I am sure that a) it proves yet again that Bezos is willing to make tough decisions, and b) for some reason, Bezos felt that this option was not pro-customer.

    Published on: November 19, 2012

    Toys R Us CEO Jerry Storch has found a new rationale for his belief that over time, bricks-and-mortar retailing will eventually trump e-commerce.

    The environment.

    "It's ver ungreen," he tells the Financial Times, saying that people are "just so enraptured with how cool it is that they can order anything and get it brought to their home that they aren’t thinking about the carbon footprint of that. But I do think that that will change.” He adds: "Driving a truck down a country lane in rural Connecticut to deliver a package is hardly the greenest way of product delivery to occur."

    The story notes that Storch concedes that "Toys R Us sold $1 billion of goods over the internet last year – 7 per cent of total sales – and that many were delivered to people’s homes.

    “That’s what customers want," Storch says, but he also says that "people are going to start realising, wait, I’m already … taking my children to school. The store is right there. I can just pick it up.”
    KC's View:
    Let's put aside for the moment my oft-stated antipathy about Toys R Us. (I was throwing out a stack of FSIs this weekend without even looking at them, and Mrs. Content Guy asked - reflexively - if there was a Toys R Us ad in there somewhere. I had no idea. So she sorted through the pile and found one, looked for items she might be able to use in her classroom, couldn't find anything, and then dumped it. Took a little longer, same result.)

    Once again, Storch is saying stuff that makes me wonder whether he is working at Toys R Us or Fort Courage, Kansas.

    It is inconvenient for his logic that FT notes in the same article that "a 2009 study from Heriot Watt university in Edinburgh said: 'While neither home delivery nor conventional shopping has an absolute CO2 advantage, on average, the home delivery operation is likely to generate less CO2 than the typical shopping trip.'

    "In the same year a study at Carnegie Mellon university found that buying a flash drive from Buy.com cut energy use and CO2 emissions by 35 per cent compared with traditional shopping."

    Listen, I'm not going to sit here and claim that this is all decided. I can actually see the arguments both ways. But I also think that changing infrastructures - Amazon opening distribution centers all over the country, for example - can help improve the environmental impact of e-commerce.

    Plus, there's a simple reality - a lot of people will do anything to make sure that they don't actually have to go into certain stores. (Like Toys R Us.) Environmental impact may not be at the top of their list of concerns when making those decisions.

    Ironically, I got this email over the weekend from an MNB user:

    I started and finished my toy shopping yesterday, in about 3 hours, at www.youngexplorers.com.

    Wonderful, curated selection of toys not seen in most stores.  Categories by age, interest, etc.  Painless checkout.

    I’m not as price sensitive as some, for which I’m thankful.  But this has been the easiest toy shopping experience of the past 20 years.

     
    Methinks that Jerry Storch needs to find another delusion to grab onto.

    Published on: November 19, 2012

    The New York Times reports that Walmart has filed a complaint with the National Labor Relations Board (NLRB), trying to prevent a union-backed group called OUR Walmart from sponsoring demonstrations at hundreds of its stores around the country on Black Friday, the day after Thanksgiving that serves as the traditional beginning of the end-of-year holiday shopping season.

    The Atlanta Business Journal writes that "Wal-Mart says the United Food and Commercial Workers Union and its subsidiary known as OUR Walmart are working to force the company into collective bargaining even though UFCW is not the official union for Wal-Mart's employees."

    And Bloomberg reports that OUR Walmart is promising "to mount 1,000 protests online and outside stores up to and including Black Friday."

    According to the Times story, "Wal-Mart called the protests planned for this week a union-financed, union-orchestrated effort that did not represent how most employees felt. It said it expects small protests at just a few stores," and the Times reports that it is unclear exactly how much support OUR Walmart has; it has promoted small, isolated protests at individual stores with some success, but it remains to be seen if it can promote and coordinate a national protest.

    However, the story also notes that this is Walmart's first complaint to the NLRB in a decade, and that the move "could be meant as a warning shot to discourage workers from participating since the labor relations board often takes months to make a ruling, but it nonetheless reflects how seriously the company has come to view a group that it had once dismissed as a nuisance."

    The Times writes: "In the filing with the labor board, the company said that the continuing protests were illegal because under the National Labor Relations Act, a union seeking recognition can picket for a maximum of 30 days. After that, it must either stop picketing or take a formal unionization vote. The company says the United Food and Commercial Workers Union is behind the protests and has exceeded the 30-day limit."
    KC's View:

    Published on: November 19, 2012

    A new study from Ipsos suggests that 53 percent of Americans "believe that they won’t be able to retire by the age of 65 in comparison to those who think they will (47%)," and the reason largely seems to be financial. (The study doesn't go into how many people aren't planning to retire because they don't want to stop working anytime.)

    Among the financial details unearthed by the study:

    • "Four in ten (39%) Americans say they don’t have any credit card debt. Of those that due, only three in ten (30%) say that their debt is decreasing compared to a year ago."

    • "Two in ten (18%) say their credit card debt is increasing, while majority (53%) say their debt level is the same as last year. As a result of having credit card debt, three in ten (28%) Americans have had to skip out on items or events to stay help them stay afloat. One-quarter (25%) have had to skip out on vacation(s) because of their credit card debt, while two in ten (16%) had to miss out on visiting friends or family out of town. One in ten (6%) had to skip a friend or family’s wedding, while 3% of Americans had to give up other items or events due to their credit card debt." However, the study says, "seven in ten (72%) of Americans have not had to give up on any of these items or events because their credit card debt has prevented them."

    • "When it comes to their finances, many Americans (56%) know they should be saving for specific items or events, but aren’t for some reason or another. Four in ten (37%) know they should be saving for an emergency fund but aren’t, while three in ten (28%) say the same about their retirement. Two in ten know they should be investing (19%), saving for paying for their children’s education (15%), or for buying a house (15%), but aren’t. 2% of Americans say there are other items or events they should be saving for but aren’t while four in ten (44%) don’t have such a problem."
    KC's View:
    I have to be honest here ... these numbers didn't sound nearly as bad as I would have expected.

    This whole retirement thing is going to get a lot of attention in coming weeks and months, I'd guess, as Congress and the Obama administration negotiate over ways to address the nation's financial situation, and delaying things like Medicare and Social Security eligibility are seen as one of those ways. I'm probably too old for it to affect me, but I'm okay with them saying that for while collar workers, the eligibility age should be extended by a couple of years. (Blue collar workers probably should be treated differently.)

    Hell, in 1954, the year of my birth, the average life expectancy for a white male was 66.7 years. These days, it is approaching 80. (And it should be a lot better. The US is near the bottom of industrialized nations when it comes to life expectancy, apparently because of a lot of cultural issues such as unhealthy diets, the availability of guns, and drug abuse, according to The Annual Review of Public Health.)

    The good news is that if I work longer, I can save more for retirement. (Or for Mrs. Content Guy to enjoy her retirement.) The better news is that since MNB isn't exactly heavy lifting - at least not physically - I can probably do it or some version of it until I drop. (Maybe I should record one of those after-you-die videos ... one last FaceTime that could be posted after I croak...)

    Published on: November 19, 2012

    The Chicago Tribune reports that the "closure of Hostess plants as the company faces liquidation leaves Supervalu Inc. looking for a new baker for Essential Everyday breads sold in it stores ... Hostess produced the private label bread brand Supervalu launched this year."
    KC's View:

    Published on: November 19, 2012

    The Los Angeles Times reports that "with a sluggish economy, high unemployment and a just-finished presidential election laser-focused on jobs, many consumers say they are more eager than ever to buy gifts made right here in America."

    That isn't always easy, the story says: "Industry experts say that 85% of the toys sold in America are made in China and more than 95% of the clothes are produced overseas. Most consumer electronics, too, are assembled beyond U.S. borders. So most of the Hanukkah gifts and presents under Christmas trees this year are likely to be manufactured outside the country."

    However, the Times writes that more retailers and manufacturers than ever are sourcing and promoting made-in-America goods, believing that these items will be increasingly attractive to consumers aware of - and willing to act on - the importance of domestic productivity.
    KC's View:
    It is not specifically referred to in this story, but as a matter of full disclosure I need to mention here that one of MNB's sponsors, Made in USA Certified, is intimately involved with the made In America movement at both the manufacturer and retailer levels.

    Published on: November 19, 2012

    On Friday, in a breaking news story, I wrote that bankrupt Hostess Brand, the manufacturer of Twinkies, was seeking court permission to go out of business and sell its brands and infrastructure, saying that "a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union that began last week had crippled its ability to produce and deliver products at several facilities, and it had no choice but to give up its effort to emerge intact from bankruptcy court."

    I commented:

    Twinkies will survive. No worries there. Hell, they'd survive a nuclear holocaust.

    To be honest, I wrote that comment very quickly, because the story was just moving across the wires and I wanted to get the story into MNB and still get the morning Wake Up Call out in a timely fashion. But a lot of people thought that my speed also led to a certain thoughtlessness.

    Some examples...

    One MNB user wrote:

    Over 18,000 people are losing their jobs and you make a comment about Twinkies.   A little insensitive in my opinion.

    MNB user David Anderson wrote:

    Due to yet another situation where Labor and Business can't seem to come to grips with the ever tightening noose around each other's necks. (due to ever increasing governmental regulation. )I.E. healthcare, make no mistake........

    And you make a crack about Twinkies shelf life?

    You are way better than that......come on Kevin. Give us some insight, consider the back story, reasoning, and implications so we can all consider.


    MNB user John F. Welsh Jr. wrote:

    Another flippant remark, Kevin. Your comments would be better served if they pertained to the 18,500 employees and their families. A few comments about the union might also be appropriate.
     
    And MNB user Peter Stamos wrote:

    That was a pretty insensitive but glib comment given 18,000 people will be losing their jobs.  That said, I enjoy reading your work every day.

    All fair criticisms. I was a little cavalier in my comments. I'll try to do better, below. But first, some more comments - running the gamut - about the Hostess situation.

    MNB user Mark Delaney wrote:

    I’ve  been following the Hostess story as I know someone personally involved and couldn’t help but see a similarity between what’s happening there and in our political world right now. In the Hostess case, the union seems hell bent on putting Hostess out of business  and if they’re successful what exactly will that prove? I get it – they stuck to their guns but now the employer is gone.

    On Long Island just after Sandy it’s been reported that LIPA may have initially turned away workers bringing help from out of state as the electrical union wanted to force them to join their union in order to help – really?? Now change the focus to the countless politicians on both sides of the aisle who couldn’t wait to get in front of the cameras to shout that they  would not back down. Really makes one wonder if anyone is listening – fiscal cliff or not – Americans I know want this posturing to stop and It’s especially insulting to those folks on the East Coast who are trying to rebuild their lives and really don’t need to hear that January 1 may bring more taxes and more of a deficit. Note to politicians: union leaders and anyone with access to a soapbox – spend less time posturing and more time compromising before we become the mockery of the rest of the world!!


    One MNB user wrote:

    Hostess sent a letter to the Unions asking them to come back or they would have to close plants and so far nothing.... They are trying to come out of their second bankruptcy which is all transparent to the unions. How do unions help the economy grow again?

    Another MNB user wrote:

    Too bad!

    The workers supported their union. Refused to yield to a pay concession of 2%. They lose their jobs, no pay vs. 2% less pay and their union reps keep their jobs. Who wins??


    And from another MNB reader:

    Great example of the union cutting off their nose to spite their face.

    Love this email:

    Oh, crap.  Now I’m going to have to cut back on the space I’ve allotted for stockpiling incandescent light bulbs to make room for a supply of Hostess products.

    However, not everybody blamed the unions.

    One MNB user wrote:

    This is just another example of a company that has many to blame for this final day. The management was poor, leading to a buyout firm buying them and now losing 30 millions, and a union not will to work with other unions to save jobs and all that was given away to employees in the past knowing full well that they could not be sustained. Add to the past management lack of vision and innovation, over capacity has led just one more company to close its doors.

    MNB user Michael Phelan wrote:

    While not every private equity group falls under this umbrella, Hostess is another example of what we heard during the political campaign – Investors buy well-known American brand and devour it from inside out, paying themselves bonuses and selling it for parts.  The workers are the least important part of the company to these investors because they cannot be inventoried like the fixtures and the real estate, but they’ll be blamed for the entire bankruptcy for demanding fair wages and benefits while the management team bears no accountability.

    To be honest, I have no idea whether the bakers union should have agreed to the same contract concessions that the Teamsters did, which Hostess management says would have helped save the company. The easy answer is yes ... that a "no" vote led to the company being liquidated and 18,500 people losing their jobs.

    But it also sounds a little more complicated than that. I've been doing some reading at Forbes.com, not exactly a bastion of liberal, pro-union rhetoric, and the point being made there is that while the unions may not have been as flexible as one would hope, the ultimate blame for the company's demise falls to management.

    Some excerpts:

    • "Hostess lost a combined $250M over the last 3 years ... The obvious problem is leadership kept trying to sell the same products, using roughly the same business model, long, long, long after the products had become irrelevant."

    • "In a last, desperate effort to keep the outdated model alive management decided the answer was (a second) bankruptcy filing, and to take draconian cuts to wages and benefits.  This is tantamount to management saying to those who sell wheat they expect to buy flour at 2/3 the market price – or to petroleum companies they expect to buy gasoline for $2.25/gallon.  Labor, like other suppliers, has a 'market rate.' That management was unable to run a company which could pay the market rate for its labor is not the fault of the union."

    • "By constantly trying to defend and extend its old business, leadership at Hostess killed the company.  But not realizing changing trends in foods made their products irrelevant – if not obsolete – and not changing Hostess leaders allowed margins to disintegrate.  Rather than developing new products which would be more marketable, priced for higher margin and provide growth that covered all costs Hostess leadership kept trying to financial engineer a solution to make their horse and buggy competitive with automobiles.

    "And when they failed, management decided to scapegoat someone else ... Blaming the unions is simply an inability of management to take responsibility for a complete failure to understand the marketplace, trends and the absolute requirement for new products."

    So maybe the unions should have made concessions, but it sounds like a legitimate argument can be made that a sale of the company and its brands was inevitable.

    Twinkie lovers should not panic. Long-term, the brand will be rescued and be sustained.

    Funny story. On Friday, I got a panicked phone call from my daughter, who is a freshman in college.

    "Dad, is is true that the company that makes Twinkies is going out of business?" she asked.

    Yes, I said, but then I reassured her that Twinkies would survive. I thought for a moment, and then said, "I didn't know you liked Twinkies. In fact, I have no memories of ever seeing you eat a Twinkie. Am I wrong about that?"

    She laughed. "No. I don;'t eat Twinkies. But it is nice to know that they're there."

    Which may explain the real problem that Hostess had.




    Had a story in Friday referring to a piece in Politico about how John Metz, who operates close to a 100 different franchise restaurants, plans to compensate for the increased health care costs required by the Affordable Care Act - better known as Obamacare - by charging customers for it, labeling receipts with the surcharge so that customers know about it.

    "Although other restaurants have mused about the prospect of cutting hours for employees or passing a few pennies in costs onto customers, Metz’s surcharge proposal goes furthest in linking the customer experience with the Affordable Care Act," Politico wrote, adding that "earlier this year, John Schnatter, CEO of Papa John’s, estimated that the ACA could cause him to tack a few cents onto the price of his pizzas. And Darden Restaurants - which oversees Red Lobster and Olive Garden - described plans to reduce its fulltime workforce to avoid paying health benefits."

    I commented, in part:

    I am absolutely sympathetic about the costs of Obamacare. I've never been sure that this is the best solution to the nation's health care problems, but it is the law of the land, so we'd better get used to it. (I was amused the other day when I heard a retailer who was anti-Obamacare say that he would prefer a single-payer system ... because he would have assiduously opposed such a system before Obamacare was passed.)

    I will say this. If I order a pizza from Papa John's, and they want to indicate on the receipt that the pizza costs 15 or 20 cents more because they want to provide health care to their employees, I am happy to pay the extra money. I might even choose to patronize restaurants that say they are providing health care to employees and are up front about how much it costs, and what the customer has to pay for it.


    MNB user Bob Norman wrote:

    I’m completely in agreement with you that transparency here is paramount and it should be seen as a positive thing. Having consumers pay a little bit more, knowing that they are supporting health care for the workers in the company whose products they are buying, should feel good and appropriate.

    From another reader:

    If they’re going to add a label on my receipt showing how much healthcare costs, then I’d also like to see one for how much their executive pay packages cost. How much for the jets, how much for the “retention bonuses”, how much for the salaries. Why single out an expense that benefits the ordinary employees? Might as well put in fuel and cost of goods while you’re at it. Or how much Social Security tax they paid for the service you received.

    Strikes me as a way of highlighting how much of an expense workers are. I’m not big on Obama’s healthcare plan but, like you inferred, it’s the law and we have to start addressing the issue somewhere. Even a bad start is still a start. Healthcare is ridiculously expensive but providing workers with coverage not only helps keep them on the job but attracts them to the job in the first place.

    I’ve heard similar kinds of doom-and-gloom predictions from business when minimum wage increases are being considered. Yet there are companies that pay more than minimum wage, provide decent health coverage, have 401k accounts and paid time off and still manage to turn a profit.


    It is worth pointing out, I think, that John Schnatter, CEO of Papa John’s and one of the loudest anti-Obamacare voices, makes $2.7 million a year. I'm not suggesting that he isn't worth it ... but the optics of someone making that much money complaining that he'll have to either lay people off or charge 11-15 cents more per pizza to cover health care costs just strike me as a little odd.

    From another MNB user:

    I too have owned & run a number of businesses and realize the cost associated with it (workers comp, disability, unemployment, etc) and yes they all add up.... But as employers we're supposed to be the adults in the room, you know, figure out how to be more productive, etc and not spend millions whining about something that is both the law & the right thing to do.

    I don't suppose they would stop selling beef when the droughts cause prices to go up or switch to poultry at Red Lobster because of the damage caused by Sandy.... So why this bullying technique on taking care of our most vulnerable?

    I'm hoping that we as employers, & tax payers, can see the long term benefit of having a healthy nation while reducing the lines at the emergency rooms and not stand around lamenting the 15 cents extra that a pizza will cost to achieve it.

    Thanks for standing up for common sense!!


    And another reader chimes in:

    I wonder if any of these chains in question has publicized price increases due to increased costs of fuel, electricity, minimum wage requirements or raw materials?  We all know there are costs associated with doing business. Forbes estimated that Papa John's impact from Obamacare would be between 3-6 cents per pizza, so announcing an increase like this smacks more of politics than business concerns.

    The law may have unintended consequences, however - more part-time jobs - and should continue to be part of the conversation.


    MNB user Chris O'Brien wrote:

    I really appreciated your response this morning regarding the claim that businesses may have to increase prices on consumers and/or cut staff as a result of the Affordable Care Act. I, too, would gladly pay a more for a company’s products if I knew that money was going to ensure their employees have health care. If we as a country don’t want a single payer health care system, then companies will have to step up to the plate and cover those costs. If a business can’t turn a profit while providing basic health care for its employees, then perhaps that business should not survive. The irony is that many of the business owners who complain about Obamacare are the same ones who vehemently opposed a single payer system, and that very opposition is what led to the passage of a bi-partisan compromise--aka Obamacare.

    From still another reader:

    It’s about time everyone accepts the fact that Obamacare is here to stay and, instead of fighting a futile battle, look for ways it can help improve your business.  Why not use it as an opportunity to demonstrate your company’s commitment to your front line people, build morale and recruit the best and the brightest for your stores? I sympathize with the increased costs for small business and agree with you that many customers (myself included) will appreciate the efforts of retailers to provide healthcare for their employees. A better strategy might be to approach the Obama administration about developing creative ways to ease the financial burden of complying with the new law. They have proven to be very flexible, for example, with states as they transition to state insurance exchanges, so why wouldn’t they be flexible with small businesses?

    That being said, I will never truly understand the opposition of business (other than insurance companies) to a single payer health insurance system, which would take the burden of administering health insurance off the backs of business where it really doesn’t belong. Our system of employer provided healthcare is a throwback to the World war II era where employers, desperate for skilled employees, offered health insurance to gain a competitive edge in recruiting employees. We are nearly the only advanced economy in the world that burdens employers with health benefits administration that is simply not cost effective and puts the US economy at a competitive disadvantage in the global marketplace.

    Maybe this is the conversation we should be having going forward.


    Another MNB user chimed in:

    I have chosen to discontinue ordering Papa John’s pizza (6 points shy of a free one through my Papa John’s rewards account).   Does he realize how stupid it sounds to say “I’ll have to add $.11 per pizza in order to give my employees healthcare”????  He’d rather cut their hours so they are not benefits eligible and force them into government healthcare options.  I can guarantee you it’ll cost us (the taxpayers) a helluva lot more than ELEVEN CENTS, which I would’ve gladly paid!  P.S. the pizza’s not even that good, just better than average when I don’t feel like cooking.

    MNB user Mike Franklin wrote:

    Business made this bed during the 40’s…offering healthcare as a benefit, when, during wartime, price and wage freezes forced businesses to offer health benefits to keep and acquire good people. Employees, covered by businesses’ health insurance policies became insulated from the true cost of health insurance. Then the downward spiral began, and it is totally out of control today. Obamacare was not the answer…single payer is a better option, but even it has drawbacks. As a nation we have totally screwed the pooch on this one and I fear only by nationalizing healthcare, can we begin to develop a system that may work.

    My position on this - which seems to be similar to that of Speaker of the House John Boehner - is that since Obamacare is the law of the land, people and companies need to figure out how to make it work, as opposed to continuing to fight against it.

    But one MNB user disagreed:

    It is the law of the land, so we'd better get used to it? Really? It’s a bad law that is destined to destroy businesses and hinder economic growth but we should get used to it? How about we continue to fight it while we prepare to minimize the damage it will cause?

    The writer of the email asks the questions that need to be answered. Has the president ever run a business? NO. Do the politicians know what is about to happen? NO. Based on the results of the popular vote, I’d ask another question. Do 51% of the general population know what is about to happen? NO. Averting the fiscal cliff is not likely to matter when we find out what’s about to happen. It may already be too late but for the sake of our nation and our children we can at least go down fighting.


    From another reader:

    Interesting to note about the possible restaurant surcharge, my husband just told me the Health insurance company he just retired from is considering adding a line as to what the affordable healthcare act adds to your premium!

    I'm okay with that. I think it is a good idea.

    While they're at it, maybe they should add a line to my insurance bill that says how much my premiums have gone up because of people without insurance who go to the emergency room for their health care needs, which increases the cost of health care for everyone, impacting insurance rates.

    BTW...once again, let's go to Forbes.com to see its analysis of the Papa John's scenario...

    "Last year, Papa John’s International captured $1.218 billion in revenue. Total operating expenses were $1.131 billion. So if Schnatter’s math is accurate (Obamacare will cost his company $5-8 million more annually),  then new regulation translates into a .4% to .7% (yes, fractions of a percent) expense increase. It’s difficult to set that ratio against the proposed pie increase, given size and topping differentials, but many of their large specialty pizzas run for $16. Remarkably, a 10-14 cent increase on a $16 pizza falls in a comparable range: .6% to.9%. But the cost transference becomes less equitable if you’re looking at medium pizzas, which run closer to $12, meaning a .8% to 1.15% price increase.

    "For the sake of argument, let’s say that Papa John’s sells exactly half medium/half large specialty pizzas. Averaging the ranges for both sizes, then averaging that product yields a .86% price increase  — well outside the range of what Schnatter says Obamacare will cost him. So how much would prices go up, under these 50/50 conditions, if they were to fairly reflect the increased cost of doing business onset by Obamacare? Roughly 3.4 to 4.6 cents a pie.

    "In September, the company announced that it would be giving away 2 million free pizzas. That was, of course, a promotion designed to increase brand awareness and to invite consumers to try the brand — with the ultimate goal of selling more pizzas. Those giveaways can’t really be cataloged alongside sales that would have been made otherwise. But just in case you’re curious, that would be the equivalent of $24 million to $32 million in pizza revenue."

    I couldn't even begin to do that math on my own. But I certainly get the point being by Forbes.com ... that this may have more to do with politics and political philosophy than arithmetic.

    Which is, by the way, okay. I just think we should call things what they are, and not something else.




    On the subject of more investigations into possible bribery by Walmart of officials in a variety of foreign countries, one MNB user wrote:

    Walmart bribing Chinese. Stop the presses. LOL

    The new premiere in China is a billionaire. Go figure.


    From another reader:

    Actually US companies usually have business partners to do the bribing. I believe Walmart does. Therefore this is a non story.

    And still another MNB user chimed in:

    Let’s be clear here, just the simple fact that more countries and not part of the investigation proves that this is not a one off, that the ring of knowledge just got that much bigger and the whole issue is not front and center. WalMart has spent of 99 million dollars on this with more to come, think that alone speaks volume. Be interesting that when the final results come out who and what will be done...

    As always, it is the MNB user who quoted a movie that wins the prize:

    "I am shocked, shocked to find gambling going on in here." - Captain Louis Renault, Casablanca

    Play it again.
    KC's View:

    Published on: November 19, 2012

    In Week Eleven of National Football League action...

    Atlanta 23
    Arizona 19

    Tampa Bay 27
    Carolina 21

    Dallas 23
    Cleveland 20

    Green Bay 24
    Detroit 20

    Houston 43
    Jacksonville 37

    Cincinnati 28
    Kansas City 6

    NY Jets 27
    St. Louis 13

    Washington 31
    Philadelphia 6

    New Orleans 38
    Oakland 17

    Denver 30
    San Diego 23

    New England 59
    Indianapolis 24

    Baltimore 13
    Pittsburgh 10
    KC's View: