business news in context, analysis with attitude

Published on: November 20, 2012

by Michael Sansolo

When my family gathers on Thursday to celebrate the holiday, there is one thing I know everyone will be thankful for: that I didn’t cook dinner.

Actually there are two reasons why they’ll all be thankful for that. First, my wife is an outstanding cook and she likes to rise to the challenge of any holiday. This is a major reason why my kids and I research all the world’s religions to find new occasions and meals for her to try.

But second and more importantly, they all know I’m a terrible cook. I’m adequate around the barbecue, but beyond that…well, I’m no Kevin Coupe. (Seriously, Kevin’s a great cook.)

Here’s the thing: I’m betting there are more people out closer to my skills than my wife’s and these big family meal times often mean endless stress. Because in addition to cooking the turkey, there is the challenge of getting all those other items on the table at the same time.

No doubt this is why prepared holiday meals are getting so popular. But that’s no excuse to miss the emerging opportunity to help shoppers through these challenging times. Especially when the examples are out there so publicly.

Mother Nature Network, one of those strange websites I follow, reported last week on the new lifeline being thrown to cooks like me. The New York Times is offering a service through which people can use Twitter to send in questions to the Times’ food experts. The experts promise to respond quickly. (You can read the story here.)

Honestly, I think that’s pretty cool and at the same time, as a longtime advocate for and observer of the food industry, I find it pretty infuriating. I don’t know of a single supermarket company that promises to provide “all the news that’s fit to print” on its website. Sure, the Times is an excellent source of information, but when it comes to Thanksgiving, shouldn’t the food industry stand tallest?

But I’m not sure it’s happening. If you Google “Thanksgiving meal help” you get all kinds of information including where the Dallas Cowboys will serve holiday meals. Add the word “supermarket” to the search and you get pricing specials from a lot of different companies and, thankfully, menu tips from Wegman’s, Publix, Ralphs and a few others. (Wegmans, always the pathfinder, is also running Twitter help sessions with its executive chef.)

The simple truths are these: a Google search is the way most people look for things these days and supermarkets should dominate any search on Thanksgiving meal preparation. They sell all the ingredients, after all. (By the way, video instructions on how to prepare an entire Thanksgiving meal including wine, table settings and music, can also be found on YouTube. This, too, is a compilation that supermarket websites could both build and feature.)

This is a perfect time to bring that value-added component that companies trumpet constantly. This is a time for the industry’s food experts - chefs, dietitians, etc. - to step up and guide the unknowing cooks out there through the entire process: from menu planning to clean up. Let’s face up to the reality that many cooks out there don’t know how to season or set a wonderful table or time dishes to arrive together.

And certainly many of them don’t know the basics of food safety that are so essential and, in truth, so easy to learn and follow.

All that means this is a holiday season of opportunity. Because the better the industry helps them, the better they’ll cook. And the better they cook, the more they’ll like us the day after. And the more they like us the day after, the more thankful the industry will be for creating new loyalty, sales and profits.

Think of it as a Thanksgiving miracle.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .

Published on: November 20, 2012

by Kevin Coupe

This story has nothing to do with business. But because I just found it to be fascinating, I deemed it to be worthy of an Eye-Opener.

The piece is from the Los Angeles Times:

"At middle age, a great ape will neither cheat on a spouse nor buy a red sports car on impulse. But researchers have found that chimpanzees and orangutans experience midlife crises just as surely as do humans.

"That finding, published Monday in the Proceedings of the National Academy of Sciences, could upend firmly held beliefs about the roots of human happiness and the forces that influence its odd trajectory across the life span. If our animal relatives share our propensity for sadness, withdrawal and frustration at life's midpoint, perhaps the midlife crisis is actually driven by biological factors - not the wearing responsibilities of jobs and family and the dawning recognition of our mortality."

The story goes on to say that "for men and women alike, social science researchers have located the winter of our discontent somewhere near the 50-year mark, wedged neatly between the vigor and drive of youth and the quest for meaning and happiness that marks the final decades of life. More than just a cultural cliche, the midlife crisis is the well-documented nadir of human well-being on the U-shaped curve of happiness that stretches between birth and death."

Apparently, the same thing goes for apes.

Well, it is not exactly the same thing. But a study of various kinds of monkeys in captivity and a comprehensive questioning of the keepers who know them best, led to a strong suggestion that when the monkeys reach middle age, they seem to experience "sagging moods" (and probably even sagging body parts, though this is not addressed in the study or the story), they became "less socially engaged," were "less likely to persist in attaining the things they desired," and experienced "more anxiety and less pleasure than their younger counterparts."

The bad news is that when you're a monkey, it must be tough to discover that you can't always get what you want, though if you try sometimes, you can get what you need. (Except for Reginald the monkey, who seems to be doing pretty well, especially picking NFL games.)

But the good news is that for those of us who happen to be a certain age, we now seem to have biology as a legitimate scapegoat when we do stupid stuff.

Published on: November 20, 2012

The bankruptcy court judge overseeing Hostess Brands' financial matters said yesterday that the company could not liquidate and sell off its brands and infrastructure, because it had not gone through private mediation of its dispute with the striking Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

Hostess, the manufacturer of Twinkies, Wonder Bread and other brands, said last week that it wanted to liquidate because the strike had crippled its ability to produce and deliver product, and that it would not be able to survive its current bankruptcy filing (its second in less than a decade).

The liquidation meant that the company's 18,500 employees were immediately laid off.

According to the Sacramento Bee story, "Hostess, which had been contributing $100 million a year in pension costs for workers, offered workers a new contract that would've slashed that to $25 million a year, in addition to wage cuts and a 17 percent reduction in health benefits. The baker's union rejected the offer and decided to strike.

"By that time, Hostess had reached a contract agreement with its largest union, the International Brotherhood of Teamsters, which urged the bakers union to hold a secret ballot on whether to continue striking. Although many workers in the bakers union decided to cross picket lines this week, Hostess said it wasn't enough to keep operations at normal levels."

CEO Gregory Rayburn said that "Hostess was already operating on razor thin margins and that the strike was the final blow," the story says. "The bakers union said the company's demise was the result of mismanagement, not the strike. It pointed to the steep raises executives were given last year as the company was spiraling down toward bankruptcy."

The last-ditch mediation session is scheduled for today.

Published on: November 20, 2012

The Wall Street Journal reports that the National Labor Relations Board (NLRB) says that it is a "top priority" for it to rule on a Walmart complaint designed to short-circuit a strike by some employees on Black Friday.

Walmart filed that complaint with the NLRB late last week, 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. As many as 1,000 protests were predicted by labor organizers, though it remains to be seen whether OUR Walmart can generate that kind of anti-Walmart enthusiasm.

According to the Journal, "NLRB spokeswoman Nancy Cleeland said Monday that by law, this type of case must take priority over all other charges at the agency. That is because Wal-Mart alleged there was 'recognitional picketing,' which is picketing with the intent to get Wal-Mart to recognize a union. The agency's internal guidelines state its goal should be to decide whether such cases have merit within 72 hours, Ms. Cleeland said."

Published on: November 20, 2012

The New York Times this morning has a story about this is likely to be an odd end-of-year holiday shopping season. Here's how the paper explains...

"Many retailers have more than the usual riding on sales beginning this Thanksgiving weekend. The presidential election pushed holiday shopping later than usual because some toy and game makers held off on their big introductions for maximum attention. The aftereffects of Hurricane Sandy have included logistics problems and merchandise delivery delays. And some retailers, trying to keep inventory lean during uncertain economic times, have given themselves little room for error: shipments of holiday toys, for instance, are down 13 percent this year, to the lowest level since 2007, according to the global trade research firm Panjiva.

"All of that makes for a particularly strange holiday season, retailers and analysts say."

The story goes on:

"The late introductions and delayed shopping put toy companies, in particular, in a difficult position: they were under pressure to make hit toys, largely via preorders and layaway, months before people would actually be buying them. Retailers and toy companies started trying to gauge demand early, looking for preliminary data on which items were unpopular and which ones were stars.

"Walmart started layaway a month earlier this year versus last year, and Toys R Us also started holiday layaway earlier, giving the stores a jump on things. Amazon and other e-commerce sites are promoting tools like preorders, wish lists and gift registries — anything that can give them a sense of what people will buy as the Christmas season churns on."

Published on: November 20, 2012

• The Huffington Post reports that more than 30,000 people have signed an online petition asking Walmart not to open on Thanksgiving evening and allow its employees to spend the entire holiday at home with their families.

Walmart plans to open its stores at 8 pm on Thanksgiving; last year, it opened its stores at 10 pm on Thanksgiving.

However, Steven Restivo, a Walmart spokesman, tells the Huffington Post that many employees are looking forward to working that evening. "The super majority of our 1.3 million associates are excited about Black Friday and are ready to serve our customers," he wrote in an email.

Published on: November 20, 2012

• The New York Times had a piece looking at how cluttered the tablet computer market has gotten. here's how the Times frames the story:

"Look at the tablets available online or at a consumer electronics store and it can be dizzying to choose from among the dozens of slim rectangles with touch screens — each with various sizes, features, prices and applications.

"Tablets were supposed to be a simple alternative to the bloated personal computer market. And when 'tablet' was synonymous with “iPad,” that was true.

"But this is the first holiday season in which the iPad faces competitors that have built up a solid footing in the market. Amazon and Google introduced tablets just in time for the shopping rush. As a result, many consumers and analysts say, the new market of keyboardless computers is quickly becoming as confusing as that of the old-school PC."

For the manufacturers of these items, the Times writes, "the stakes are much higher than the sale of individual devices. Each company is trying to snag lifelong customers for their other products — like music, apps, e-books, movies, Web search or word-processing software. While Apple has dominated the market until now, selling more tablets than any other company, its perch is being threatened by the newcomers."

Published on: November 20, 2012

• The Financial Times reports that Tesco's consumer magazine is now the most-read printed magazine in the UK, beating the Sun and "highlighting how supermarkets have become influential media owners as they compete for shoppers."

The story says that "having grown 8 per cent over the year to September, Tesco magazine now has a readership of 7.2 million, exceeding all national press and magazines, according to the latest report from the National Readership Survey."

According to the story, "Tesco’s success stands in stark contrast to the woes facing traditional print publishers. Newspapers and magazines have suffered in recent years amid circulation declines, online competition and a fall in advertising revenues.

"While most traditional publications have invested in websites and digital distribution channels, revenues from these new sources have failed to compensate for the decline of their print businesses."

Tesco magazine is published twice a month, and is free-of-charge to Tesco customers.

Published on: November 20, 2012

Carrefour said this morning that it is selling the 60 percent stake that it has in Carrefour Indonesia to its partner there, CT Corp., which has the other 40 percent.

The Wall Street Journal notes that Carrefour is making the move to concentrate on its core European businesses; it recently "has recently exited Singapore, Colombia and Greece, and is reportedly in talks to sell its Malaysian operations."

Published on: November 20, 2012

• Reuters reports that "a breakdown of U.S. diabetes cases shows dramatic increases in the number of people diagnosed with diabetes overall between 1995 and 2010, with especially sharp increases among people in the South and in Appalachian states."

The story says that according to a study by the US Centers for Disease Control and Prevention (CDC), "the number of diagnosed cases of diabetes grew by 50 percent or more in 42 U.S. states, and by 100 percent or more in 18 states. In 2010, 18.8 million Americans had been diagnosed with diabetes and another 7 million had undetected diabetes, according to the CDC."

"States with the largest increases over the 16-year period were Oklahoma, up 226 percent; Kentucky, up 158 percent; Georgia, up 145 percent; Alabama, up 140 percent, Washington, up 135 percent, and West Virginia, up 131 percent," according to the CDC study.

Published on: November 20, 2012

MNB reported yesterday that 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."

My comment, in part:

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.

One MNB user responded:

My reaction to the Supervalu letter to employees, as one of the employees impacted, was exactly the same as yours.

The senior leadership of this company refuses to share in the sacrifice that it expects everyone else to make. When asked such questions, Wayne Sales talks about how a large portion of executive compensation is based on results. This is true, but it only says so much.

After the disastrous first quarter results that resulted in Craig Herkert walking the plank, we spent a lot of time and effort building a new budget for the year that was in part designed to make sure that bonus-eligible employees still had the ability to earn a bonus. (And never mind the fact that at the end of the last fiscal year, Mr. Sales at the Board paid out $700K in bonuses to the CEO they fired one quarter later.) Different rules for some, I guess.

It would be major gesture if the senior leadership of this! company would give back a portion of their salary, but it looks to many of us like they're just trying to keep this thing afloat long enough to cash out if they can find a buyer.

From another reader:

As a rank and file employee directly affected by almost all of these cuts (I’m hourly so my pay frequency won’t change from weekly), I can tell you it sucks. On one hand, yes-I still have a job. For now. On the other hand? The general consensus was how much is upper management giving up for this? And using the words “fund our growth” makes it even worse. We should not be looking to fund growth at this point because growing-by buying Albertsons-is what got us into this predicament in the first place. The company needs to retrench, sell off some of its unprofitable banner stores (and yes, by them being unprofitable they are not desirable and thus hard to sell. But at this point? Sell them for a loss if you have to. The ship is sinking, throw the dead weight overboard.) Cutting back this drastically is demoralizing even further an already demoralized workforce. At this point, it seems like so much lip service to the rank and file.

I know for many of us, we have stayed loyal to the company over the past couple of years. We drank the company Kool-aid, worked our hardest to make the cuts, work our hardest, do more with less. But it has come to a point where we are all wondering what is next? Pay cuts? Our insurance coverage is getting worse by the year-is that going away next? (And it could be feasible that the company would look at taking that away and be willing to pay the fines next year if that is cheaper than paying their cost of insurance.)

Yeah, I am grateful to have a job with insurance in this economy. But the uncertainty is no fun and any loyalty I felt has gone away. There have been several job offers over the past couple of years I now regret saying no to. But I stayed with the company out of loyalty-and a “We are on the right track to turn this around” spiel. First from Craig Herkert and now from Wayne Sales. Pardon me if I no longer believe any of that malarkey.

My resume got polished up over the weekend and is now out there. I have a lot to offer and the next good offer that comes along, I am giving my notice and leaving. I expect a lot of this to be happening over the next couple of months. And it saddens me because when I started with Supervalu ... it was a company I wanted to retire with.

Another MNB user chimed in:

Kevin I think you make an excellent point in your Supervalu story commentary.  When the economy started going bad a few years back, my husband who works for a small privately owned company had his pay cut as well.  In the letter sent home, it outlined the % pay based on your base compensation.  IF you made more than $XX per year your pay was cut at 15% (that was the Sr. Level pay rates), then stepped down to 10% and 5% based on wage.  It was clear and transparent the senior level team was taking a larger cut than the folks on the front line but that everyone would be impacted in order to preserve the company.  They did emerge stronger and even paid the “back” wages to the employees when the time was right, even though this wasn’t promised.  I for one found that admirable and remain thankful my husband works for a  company with such integrity.

Still another MNB reader wrote:

I was reading your article about the Compensation benefit cut back at Supervalu, and being that I’m a current employee at one of the banners in the Chicago land area…I will start off by saying you are exactly right in your perception that the hourly team members are not exactly thrilled by this latest announcement.  Luckily here at our location, our President decided to tell us in person rather than an email sent on behalf of….a guy that can’t show his face because he’s too embarrassed to face the people that do the real work. 
 
You wrote: “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.”

The perception at the level that I work at…. Is exactly that… All of the upper management have clauses in their contracts that state, no matter how bad you sink this company into the ground…you will benefit from your “early” retirement or “firing”.  Craig Herkert did….Jeff Noddle did…. And now Wayne Sales will as well.  The “team members” as were called are consistently asked to make the sacrifices day in and day out.  We do 3x as much work as we did 5yrs ago for the same amount of pay as 5yrs ago… The raises were a joke to begin with….so really were not losing much there. We have to deal with irate customers that call to complain about prices and repeatedly tell us that they’re going to go shop at Walmart now.  What are we supposed to do with that?  Corporate is the one with the purse strings, we just execute the plans that they attempt to put in place, yet when it comes to an unhappy customer, we’re the ones that have to deal with it.  Half the time, we have no explanation as to why something was $2.00 yesterday and today its $3.99.

Service Anniversary rewards suspension…Who wants a piece of crap pin and a watch that will break in a few months anyway…they could’ve done away with that a long time ago.

The one cut back that will hit the most is the 401K matching.  It was one of the only perks to this job.  Luckily, I’m only 33 years old and can find a job somewhere else that is willing to contribute to my retirement so that I don’t have to retire at the age of 95.  This cut was definitely below the belt and we all are quite upset over it. Now, they’re gambling with our future…and at this rate…Why would we chose to continue to work for Supervalu when working here won’t benefit us.  They say that they will “re-evaluate it at a later date”…really?  When does a company that is this deep in debt ever “re-evaluate” giving back something they took away.
 
The constant bad news that we receive almost every week is very disheartening.  The morale around the offices is that of a funeral home.  We’re just waiting to be buried with the rest of the fallen companies out there…..we just don’t know when the next corpse will be us.  We can only hope and pray that one day….the email that we receive is that of a buyout.  It’s our only hope at this point.

From yet another reader:

You described perfectly what should have been done.   I am always amazed (distressed is maybe a better word) at how infrequently, if at all, top management takes significant pay cuts when companies are in trouble.  And highly paid execs are the ones who could most afford pay reductions.

And another:

The folks who are taking the hit have not had bonuses for many years (executives still get bonuses) – this is just more evidence that they are cogs in the machine.  There is a feeling that nothing will ever improve and most, if not all, folks are looking for work or seeking a package ... There is no confidence that there will be a turn around and there is less confidence that there will be a sale that will benefit any of the employees.

And still another:

Yep… that sure is a motivating decision by management.  No merit raise, no 401k match, and no recognition.




Commenting yesterday on a story about Americans' changing attitudes toward retirement, I wrote:

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.)

I got a lot of email asking me to explain this last sentence, many of them vociferously disagreeing with me.

One MNB user wrote:

I have a buddy that runs a nursing home for a living. I asked him one day who his strongest and fittest patients were. He said, “the guys that stacked and laid bricks had rock-like muscles, especially in their stomachs, legs, arms and hands” “They outlive most”.  Some will believe you are suggesting people that use their head making a living will outlive people that use both. And wouldn’t that mean white collar people would  be paying for blue collar benefits?

And another wrote:

Regarding possible changes to Medicare & Social Security eligibility ages, why do you indicate raising the age is seemingly more appropriate for white collar workers than it is for blue collar workers?  Advocating that people ought to be treated differently (by their government) based on the color of their...collar?

My rationale was pretty simple - that people who have been doing physical labor for their entire lives, counting on retiring at age 65, might be legitimate if they objected to the goal line being moved. As opposed to people who sit behind desks.

But I get your point. I could be wrong. Being one of those people who can accurately report that, like the great troubadour says, any manual labor I've done was purely by mistake, I was just trying to be compassionate.




Weighing in on the various Hostess stories, MNB user Bryan Nichols wrote:

In response to the comments that Hostess Management did not respond to the changing market or introduce new items more in step with the changing consumer, I wanted to point to Nature’s Pride.  As a retailer, I saw Hostess trying to be forward thinking in its products under its excellent Marketing Chief Rich Seban—not something easily done in a very competitive field by a company with so many legacy issues.

A rare positive word about a company circling the drain. I'm glad you shared it.

Yesterday, we posted an email in which an MNB user criticized the Hostess unions and compared the situation to another one, writing: "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."

MNB user Michael Phelan responded:

Tying the Hostess story to the Sandy story is a disgrace. LIPA “may have” turned away workers?  But did they? No.

No, that’s another pro-corporate urban legend like the similarly imagined one about New Jersey utility workers “turning away” help from Alabama.  That didn’t happen either, but as long as formal and informal news outlets allow undertones within questions and phrases like “may have “ to be seen alongside the news content, readers walk away with incorrect impressions.
 
I know you’re not a formal news outlet, Kevin, but your readers are now under the impression that New Yorkers “may have” refused out of state non-union help.  That hurts both the perception of our region as well as relief efforts for tens of thousands of displaced New Yorkers.

I should have double-checked that assertion. Thanks for correcting the record.

From another reader:

While it seems that most everything has been said, at its heart , Hostess has an out-of-date business model. Bakers who are succeeding like Flowers Foods ( Sunbeam Bread, Tastykakes, and Bluebird cakes) don't have unions and treat their route drivers as independent business people. That seems to be a more contemporary approach with successful companies like Boars Head using it. This way, the route owner/drivers make more when they work more. In contrast , the union model is one of make more when you work less. Be interesting to see if Flowers pluck out some of the Hostess brands.

I got some criticism yesterday for being a little glib and irreverent about the Hostess liquidation, which led MNB user Matt Mroczek to write:

It sucks that a bunch of people are losing their jobs over the Hostess closures, but if you stop cracking jokes every time there’s bad news to break, I’m going to stop reading your blog!

No worries. Not gonna happen. Cracking jokes even in the face of bad news has gotten me this far, and I have no intention of changing horses.

Published on: November 20, 2012

In Monday Night Football, the San Francisco 49ers beat up on the Chicago Bears, winning 32-7.