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    Published on: November 28, 2012

    by Kate McMahon

    In the midst of the Black Friday hype and Cyber Monday madness, Small Business Saturday continues to make its mark on Main Street.

    Now in its third year, the program is aimed at urging customers to “Shop Small” at local merchants to create jobs, boost the economy and preserve neighborhoods. A preliminary survey showed that American consumers aware of the initiative did just that this past Saturday - to the tune of about $5.5 billion.

    While that number represents less than 10% of the $591 billion spent online between Friday and Monday, news reports, activity on Facebook and Twitter and other barometers show a jump in awareness, revenue and the participation of some 500,000 merchants.

    American Express, which launched Small Business Saturday in 2010, reported a 21% increase in member transactions on Nov. 24th and an impressive 3.2 million-plus likes on its Facebook page.

    Here’s how it works: American Express offers small business tools and do-it-yourself promotional material (through its OPEN program), social media support and incentives for customers looking to shop local.

    To motivate shoppers, American Express customers who register their card with the Small Business Saturday promotion and use that card in a participating store receive a $25 credit on their statement. (I did both, and received and email from AmEx confirming my participation that day. Also shopping small – President Obama and his daughters at One More Page Books in Arlington, VA).

    News reports from across the country and thousands of posts on Facebook confirm what a Small Business Saturday Insight Survey found:

    • The top five places that consumers plan to shop on Small Business Saturday are restaurants (52%), bakeries (35%), clothing stores (34%), gift shops (31%) and book shops (29%).

    • The number one reason that consumers plan to support small businesses on is they value the contributions small businesses make to their community (76%), while the number two reason was better customer service (59%).

    The business lesson here is clear. Just hanging out a promotional sign isn’t enough. The most successful merchants were those who provided a creative incentive and promoted it, particularly harnessing the power and reach of social media.

    A perfect example comes from Allison Behringer, who with her husband Peter is proprietor of two Sweet Pete’s specialty candy shops in Jacksonville, FL. The post-Thanksgiving weekend is typically slow for confectionary shops, but since the store opened three years ago Small Business Saturday has been a hit.

    “We quadrupled our average Saturday sales,” she told MNB, by actively promoting on social media the following Small Business Saturday specials:

    • A day-long taste pairing of gourmet chocolate and wine.
    • A jelly-bean buffet for kids.
    • Gift wrapping classes.
    • Spend $40 and get a $15 gift certificate, with when combined with the $25 American Express credit meant a customer would get $55 of merchandise for $15.

    All in all, a sweet Saturday, and a template for small business success.

    Comments? Send me an email at kate@morningnewsbeat.com .
    KC's View:

    Published on: November 28, 2012

    by Kevin Coupe

    First, a disclaimer.

    I have no idea if this story is true, or if it is staged.

    Nevertheless, I think the video is worth watching, because it illustrates how customer service should really work.

    The video is part of a YouTube series produced by an Texas man named Jia Jiang, a technology entrepreneur who find himself a little depressed when an investor turned him down. He decided that he need to toughen himself up, so he engaged in what is called "Rejection Therapy" - he decided to go out into different situations, once a day for 100 days, and make outlandish requests that would inevitably be turned down. This, he believed, would make him better able to handle rejection, and he videotaped the encounters and blogged about them as a way of keeping himself accountable.

    However, Jia Jiang also discovered that some requests are not so outrageous that entrepreneurial people won't do their best to make their customers happy. Hence, his encounter with a staffer at a local Krispy Kreme ... which you can watch by clicking here, or by clicking on the picture above.

    I hope it is real. Because it is an Eye-Opener.

    KC's View:

    Published on: November 28, 2012

    Bloomberg reports that The Conference Board’s November consumer confidence index reached 73.7, up from a revised 73.1 in October, and higher than the 73 that the research group had been projecting.

    According to the Bloomberg story, "The report showed the share of Americans planning to buy a house rose to a record high, indicating improving property values and a job market recovery are making households more willing to make long-term commitments. Sustained gains in consumer spending, the biggest part of the economy, may help overcome concern over the fiscal cliff of tax increases and government spending cuts slated for early 2013."

    The Associated Press story notes that "both are the best readings since February 2008. The index is still below the level of 90 that is consistent with a healthy economy. It last reached that point in December 2007, the first month of the Great Recession. But the index has increased from the all-time low of 25.3 touched in February 2009.

    "Higher consumer confidence could translate into a more robust holiday shopping season and stronger economic growth. Consumer spending drives nearly 70 percent of economic activity. The report also supported the findings of a separate survey from the University of Michigan released last week, which showed consumer sentiment at a five-year high. Still, both surveys increased at slower rates than the previous month."
    KC's View:
    It always seems to me that consumer confidence is like a house of cards. A good stiff breeze can knock the whole damned thing over.

    That said, the general consensus seems to be that, especially if Congress and the White House can come to some sort of agreement on fiscal policy, we're in for a time of slow but persistent growth.

    We can only hope.

    Published on: November 28, 2012

    Reuters reports that Amazon said yesterday that "Cyber Monday was the biggest day ever for sales of Amazon.com Inc's Kindle electronic devices," though the company declined to say exactly how many had been sold. However, Amazon is saying that "nine of the top 10 best-selling products on Amazon.com since it unveiled new Kindle devices on Sept. 6 have been Kindles, Kindle accessories and digital content."

    reports that "Amazon says it more than doubled the number of Kindle devices sold this past weekend than over the same period in 2011," but makes the point in its story that "it's not the devices that Amazon counts on for sales. Rather, it's the digital content and retail products that fill the company's coffers. For CEO Jeff Bezos, the devices themselves are simply a portal to sell books, movies, TV shows, music, apps, clothing, and anything else on Amazon's digital or physical shelves."

    The story quotes Bezos as telling TV interviewer Charlie Rose: "People don't want gadgets. They want services."

    • The Los Angeles Times reports that Amazon "is planning to open a third massive distribution center in the Northern California city of Tracy.

    "The new operation is close to three major freeways - interstates 5, 205 and 580 - in a distant bedroom community for the San Francisco Bay Area south of Sacramento. The facility will be only about 30 miles from a second Amazon center being built in Patterson to the south. Last month, the Seattle company cut the ribbon on a 950,000-square-foot facility in the city of San Bernardino, which started filling orders before the holiday shopping season."
    KC's View:
    Just more evidence of Amazon's long-term goal of world domination...

    Published on: November 28, 2012

    Consumer Reports, in its January 2013 edition, has a piece saying that its "analysis of pork-chop and ground-pork samples from around the U.S. found that yersinia enterocolitica, a bacterium that can cause fever, diarrhea, and abdominal pain, was widespread. Some samples harbored other potentially harmful bacteria, including salmonella."

    In addition, the story says, "Some of the bacteria we found in 198 samples proved to be resistant to antibiotics commonly used to treat people. The frequent use of low-dose antibiotics in pork farming may be accelerating the growth of drug-resistant 'superbugs' that threaten human health.

    The story says:

    • "About one-fifth of the 240 pork products we analyzed in a separate test harbored low levels of the drug ractopamine, which the U.S. approved in 1999 to promote growth and leanness in pigs."

    • "Yersinia enterocolitica was in 69 percent of the tested pork samples. It infects about 100,000 Americans a year, especially children. We found salmonella, staphylococcus aureus, or listeria monocytogenes, more common causes of foodborne illness, in 3 to 7 percent of samples. And 11 percent harbored enterococcus, which can indicate fecal contamination and can cause problems such as urinary-tract infections."

    • "Ground pork was more likely than pork chops to harbor pathogens."
    KC's View:
    Man, it seems like I can't eat anything anymore.

    Published on: November 28, 2012

    ConAgra Foods said yesterday that it will spend about $5 billion to acquire Ralcorp, a move that , as USA Today writes, makes it the nation's "biggest manufacturer of cereals, crackers and other packaged foods sold under store brands ... The deal caps a year of acquisitions for ConAgra, which makes Banquet, Chef Boyardee and Marie Callender’s. In the past year, the company also snapped up brands including National Pretzel, Bertolli frozen meals and Del Monte Canada."

    In an email yesterday, Doug Knudsen, president of Sales for ConAgra, wrote:

    "The two companies’ portfolios are a complementary fit, with very little overlap in terms of offerings. We will add their private label products – including cereal, pasta, crackers, jellies and jams, syrups, frozen waffles and more – to our existing private label business. We believe that the enhanced breadth and depth of the combined portfolio, with increased product offerings across a wide range of price points, segments and channels, will allow us to better address your needs. We are also confident that we can leverage ConAgra Foods’ operating capabilities, such as our Research, Quality and Innovation platform, shopper insights, and rigorous food safety practices, to provide the right focus and resources to deliver even greater value and innovation to you over the long term."

    The transaction is expected to close by March 31, 2013.
    KC's View:

    Published on: November 28, 2012

    • The New York Times this morning reports that Facebook is creating a new "Gifts" service that allows users "to buy presents for their friends on the social network. On offer are items as varied as spices from Dean & DeLuca, pajamas from BabyGap and subscriptions to Hulu Plus, the video service. This week Facebook added iTunes gift cards."

    As the story notes, "The gift service is part of an aggressive moneymaking push aimed at pleasing Facebook’s investors after the company’s dismal stock market debut. Facebook has stepped up mobile advertising and is starting to customize the marketing messages it shows to users based on their Web browsing outside Facebook."
    KC's View:
    The Times correctly points out that Facebook already has birthdays and anniversaries on file, and now wants to use the "Gifts" initiative to get people to also share their credit card numbers ... thinking that if they can put the two together, the result could be a financial bonanza.

    I, for one, would be a little leery about signing up for this. I can just imagine that, if I got into the system, I'd suddenly start getting sales pitches for why I should send birthday presents to everyone who is a friend of mine or MNB on Facebook; I love you all, but I really can't afford that. And the deluge of email would be annoying.

    But the basic impulse is correct, and plays into something we've been talking about here for a long time ... that it will be the companies that have the most information and act appropriately on that information that are the likely winners in the long term competitive wars.

    Having such information, and acting on it, should be part of every retailer's strategic plan.

    Published on: November 28, 2012

    United Press International reports that a new study from the International Food Information Council Foundation (IFIC) suggests that "U.S. parents are very focused on nutrition and health needs of their minor offspring but are less likely to think about their health." The study says that "only 16 percent of parents said they have a very or extremely healthful diet, while nearly 70 percent said they worry more about the healthfulness of the foods and beverages they buy for their children than those they buy for themselves. Twenty-three percent of adults who are not parents said they had a very or extremely healthful diet."

    The study also says:

    • "Parents were less likely than non-parents to describe their level of physical activity as vigorous -- 12 percent versus 17 percent."

    • "Fifty-four percent of parents said they were concerned about foodborne illnesses versus 43 percent of non-parents, while 49 percent of parents said they were concerned about the safety of imported foods compared with 38 percent of non-parents."
    KC's View:
    No surprises here. The definition of being a parent is caring more about your kids than you care about yourself. The worst parents are the ones who don't seem to know that.

    Published on: November 28, 2012

    Bloomberg reports that Costco "plans to pay a special dividend of about $3 billion as it returns increasing cash to investors." CFO Richard Galanti said that the move reflects a strong balance sheet; it came as Costco reported a 10 percent increase in first quarter sales.

    • The Chicago Sun Times reports that Strack and Van Til Supermarkets is acquiring seven WiseWay and PayLow stores in Northwest Indiana; the WiseWay stores will be converted to Strack & Van Til stores and the PayLows will change to Ultra Food stores.

    Terms of the deal were not disclosed.

    • The Salt Lake Tribune reports that Trader Joe's is scheduled to open its first Utah store this Friday in Salt Lake City.

    • The Boston Globe reports that the US Patent and Trademark Office has rebuffed Dunkin' Donuts in its efforts to legally own the phrase "Best Coffee in America."

    The government said that the phrase was "not descriptive enough."
    KC's View:

    Published on: November 28, 2012

    • The Fresh Market announced that its executive vice president/CFO Lisa Klinger is leaving the company "to accept a similar position with a private equity-backed apparel retailer." A search has been launched for her replacement; in the meantime, Sean Crane, executive vice president/COO, will assume the role of interim CFO.
    KC's View:

    Published on: November 28, 2012

    Marvin Miller, who was executive director of the Major League Baseball Players Association from 1966 to 1982, died yesterday at age 95.

    Miller was one of the most influential labor leaders ever, and certainly one of the most influential people ever in professional sports. His work for the Players Association resulted in the overturning of the "reserve clause" that kept players in perpetual servitude to team owners for relatively low pay, and ushered in the era of free agency that forever changed the game - not to mention influencing virtually every other American professional sport.
    KC's View:
    I think it is fair to say, as a fan, that there are both upsides and downsides to how baseball has changed since Miller's tenure. While players may have been exploited before his groundbreaking work, it certainly seems now like their salaries are inflated beyond all common sense.

    On the other hand, most owners have no idea how to hit a curve or throw a strike or turn a double play ... and so my sympathies are much more with the players than the owners.

    I will tell you one thing. Miller ought to be in the Baseball Hall of Fame. No question.

    Published on: November 28, 2012

    Regarding the investigation of charges that Walmart may have bribed foreign officials as a way of greasing the bureaucratic wheels in places like Mexico, China and India, one MNB user wrote:

    Having experience in doing business in India and even Puerto Rico, payoffs and "under the table" transactions are the accepted norms in those countries and the key reason that company I represented chose not to expand there.  With that said, I do not know what level of "nastiness" Walmart was engaged in, but it must have been pretty bad to fall beneath the "low" standards bar India and other developing countries still accept as business as usual.

    I'm still impressed by the argument made yesterday by an MNB user - that Walmart's strict ethics rules for how its people deal with suppliers should have worked both ways, and that the company has enormous gall to preach one thing and do another.



    There is some debate about whether retailers should actually add a surcharge to receipts for the amount that they have to pay in healthcare costs for employees, which prompted one MNB user to make the following observation:

    It just occurred to me today – a product that increases its price and then explicitly states that the increase will go toward providing a living wage and health care for its employees – in any third world country we would be rushing to give that product Fair-Trade certification! Yet here, somehow, some people seem unhappy about the idea. Just strikes me as strange.

    MNB user Rudy Dory chimed in:

    I know you travel a lot (and am surprised it has not been brought up) but I know in San Francisco (at several fine eating places we patronized this last year at the Fancy food show) added a surcharge for employee benefits (Not sure what all it was about).  I don’t know if this is establishment procedure or a city of San Francisco charge.  It wasn’t huge money (like the tax portion can be) but it was on the bill.  All the fuss seems to be a bit of emotional posturing and I think we all just have to settle down and figure out how to make the program work.  Those of us  that do will stay in business and those of us who don’t will go out of business.  Just like we always have with other government programs or regulations in the past that we didn’t want or particularly care for.

    Amen.




    I loved this story from an MNB user, writing about one particular Thanksgiving Day opening:

    My Dad was an independent Supervalu operator with a small store in Lindstrom MN.  In 1974 he thought it would be a good idea that year to open on Thanksgiving day. I was in 8th grade.

    The idea was we would help Mom out by using the meat department rotisserie and make a goose for dinner and because we were already there Dad would open the store from 8-12. His thoughts were that we would be available as a convenience for last minute small transactions..  All there was he two of us.    Major backfire… at the time I didn’t know how to ring register, the store was crowded, we had people lined up all the way to the back of the freezers. People were buying full grocery carts of thanksgiving dinner including huge rock hard frozen turkeys.  I would bag, carry out and then run back to dairy to load milk and run back to bag again. It was bad… quite a rush.

    We finally got everyone out at 3PM, three hours late, the goose was over cooked and when returning home after 4PM, I never remember hearing Mom yell at Dad that hard, ever. Needless to say for the next 20 years we closed for Christmas, Easter and Thanksgiving and the subject never came up again.


    From another reader:

    IMHO, Black Friday is dying. Black Friday deals are already starting well before Friday. Stores that traditionally were closed are now open to compete against on-line retailing and other brick and mortars that were already open. If you want to spend your Thanksgiving shopping you can, you can also catch dinner and a movie. Times change, I luckily do not work at a job that requires I be at work on Thanksgiving. One daughter does, one doesn’t. It is a work around for family dinner, but reality. I won’t be shopping tomorrow, but light shopping (regular weekly shopping after the early bird specials) on Friday. Much of my gift buying will be done on-line, probably about a 50/50 split, up from previous years. This year instead of protesting if you have to work, embrace your family and be thankful for all you have, including a job. Dinner is not required to be served at any predetermined time. Work around schedules and be thankful you have food on the table.




    I wrote the other day about planning to do almost all of my holiday shopping online, which led MNB user Wayne Godwin to write:

    Do you ever get out and check stores?  I’m sure you must, but you emphasize the “online” experience so often it makes me wonder.

    Of course. But for personal purposes, I just find that online shopping is easier, more convenient, and often less expensive.

    BTW...here's an email from MNB user John Miller about online shopping:

    My wife and I are both a couple months from being 56 years old and we shop online all the time.  Last night we sat down and completed all purchases for the kids and their spouses in a matter of just about an hour.  All items were on the wish lists on Amazon and a couple other sites so we picked what we would buy, ordered it, and it will be very shortly shipped directly to our front door.  Yes, we paid sales tax on many of the items that were included with those purchases.  We did not use our smart phone but did use both the iPad and our laptop.  So for those retailers that believe that the sales tax will make the difference ----you need to re-think your strategy.  The convenience and most often the pricing with online shopping, and with some sites being willing to even pay the return shipping should you need to return something, it becomes increasingly difficult for me to go to a brick and mortar store.  It’s not that I don’t, but sales tax is not the equalizer.

    And from another reader:

    Quite frankly, sales taxes are irrelevant to the decision of whether my family shops online or not.  I suppose we realized that taxes are a fact of life and the sales tax “holiday” wasn’t going to last forever, so we enjoyed it while we could.   Now, until the brick ‘n mortar retailers can match the price, selection, service and convenience (home delivery of just about anything) of shopping online, more of my business will go to the internet retailers.   In fact, I estimate that we do 65% of our total buying online, with food and my 16-year old daughter’s clothes being the largest exceptions.




    We had a story the other day about how, while Hostess is liquidating its US businesses, there will be no interruption in production of Twinkies and Cupcakes in Canada, where they are made by different companies. Which led MNB user Michael Griswold to write:

    Now is the time to annex Canada – they have the Twinkies and the Cupcakes!!!!  With no hockey, I am sure they are distracted.




    On another subject, an MNB user wrote:

    In the Obamacare, tax and executive compensation conversations you’ve had on the site recently, the thing that irritates me most is the offhanded remark some folks have made that $250K household income isn’t rich. According to the US Census Bureau, median household income 2006-2010 was $51,914. $250K puts you in the top 1-2% of households in the US.

    People may not feel rich, but that’s because of how much they spend, not that they’re earning too little. It’s also about who they surround themselves with: high income folks live in great neighborhoods with wealthy schools. The frame of reference is narrow. If you’re neighbor has a nicer house and car than you, you may feel bad in comparison, but you’d feel incredibly wealthy if you were sitting on the bus next to a family of four that makes $30K.

    I’m not saying that folks don’t deserve to have what they have. That’s not my right. But I do think it’s important to understand where you fit in. When we talk about government programs, taxes, health care, or retailing, the biggest challenge is for the rich people to put themselves in the position of the average consumer. And the first step, I think, is acknowledging that your life experience is very different than the vast majority of Americans’.


    I think when people say that $250,000 in annual income does not make a person rich, they are actually speaking geographically. Someone who makes $250,000 and lives in New York City, for example, is far less well off than someone who makes the same amount of money and lives in Delaware, Ohio. Or a lot of other places around the country.

    I'm not sure the extent to which this should be factored into public policy discussions about taxation. But it is a reality.




    Yesterday, in talking about why content is more important than form, I quoted a passage from "The Real Thing," by Tom Stoppard, which prompted one MNB user to write:

    I totally LOVE this quote, in so many ways. Thanks, as usual, for expanding my mind!

    My pleasure. For those who missed it, I'll quote it again ... the play's protagonist, a writer named Henry, says the following: "Words ... They're innocent, neutral, precise, standing for this, describing that, meaning the other, so if you look after them you can build bridges across incomprehension and chaos. But when they get their corners knocked off, they're no good any more... I don't think writers are sacred, but words are. They deserve respect. If you get the right ones in the right order, you can nudge the world a little or make a poem which children will speak for you when you're dead."

    I've seen two different productions of "The Real Thing" on Broadway, and both were wonderful. If you ever have a chance to see the show, you should.
    KC's View: