business news in context, analysis with attitude

Published on: December 11, 2012

by Michael Sansolo

In case you’re looking for the perfect gift for me this year, here’s the one at the top of my list: a Red Ryder carbine-action, two hundred shot Range Model air rifle with a compass in the stock and this thing that tells time. Really, it’s all I want.

Now the odds are you fall into one of two groups at the moment. One is thinking I’ve lost my mind—a 57-year-old man writing a blog about wanting a BB-gun and thinking there’s a business lesson in that.

The other group is giggling. Those are my peeps.

You see the gun I want is the object of desire in my favorite holiday movie of all time: A Christmas Story. If you’ve never seen it, just wait until Christmas Eve, when it is usually aired for 24 straight hours on cable. Watch it once and you’ll be hooked. Watch it like me and you’ll trade random lines with perfect strangers in the oddest of circumstances.

But one thing we always argue here at MNB is that business can find lessons in everything, especially movies. (Maybe you've heard. Kevin and I wrote this book...)

And for that reason alone, you need to watch A Christmas Story.

Without disclosing too much of the plot, the story basically follows the travails of Ralphie Parker, a young boy who wants nothing more for Christmas than the aforementioned BB-gun. From there, the mayhem ensues. Ralphie tries endless methods to convince his mother that the gun is the perfect gift, from the subtle to the downright obvious. And each time, he fails, thanks to his mother’s immediate and final reaction: “You’ll shoot your eye out.”

Yet Ralphie is never stopped. If nagging his parents won’t work, he’ll try other avenues from a school-assigned theme to the department store Santa. Defeated again and again, Ralphie refuses to give up.

Incredibly, the movie itself mirrors Ralphie’s quest. When A Christmas Story was first released in 1983 it barely registered a ripple. Though it stayed in theaters for the entire holiday season it never found a significant audience and it gathered mostly mixed reviews. It wasn’t until the movie moved to television that it became a hit, financially and critically. These days it’s not only a holiday darling, but is actually ranked as one of the best holiday films ever.

So the story is really all about perseverance. It’s about finding a way when every possible path seems blocked; certainly a theme that many businesses and people in business can understand. What Ralphie’s mindless optimism and relentless effort reminds us is that we fail far more often than we succeed and our success rarely comes in the form or on the path we planned.

It comes from improvisation, flexibility and dedication to the task at hand. And maybe it also comes from finding a way to enjoy the journey, even when it isn’t going so well…and trust me, in A Christmas Story, nothing goes as planned.

(The movie also has other great lessons like the importance of not doing something really, really dumb, even when others pressure you. Here’s a free warning: do not lick a frozen flagpole.)

Most of all, it reminds us to laugh, which is an especially important task in the tough times we’ve been stuck with for years.

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: December 11, 2012

by Kevin Coupe

News doesn't get much worse that this. And if this story is true, you can sign me up for Al Gore's environmental corps right now.

Newsweek reports that "if humans want to keep eating pasta, we will have to take much more aggressive action against global warming. Pasta is made from wheat, and a large, growing body of scientific studies and real-world observations suggest that wheat will be hit especially hard as temperatures rise and storms and drought intensify in the years ahead."

While all three grains - wheat, corn and rice - are said to be susceptible to the impact of climate change, the story says, "wheat stands to fare the worst in the years ahead, for it is the grain most vulnerable to high temperatures. That spells trouble not only for pasta but also for bread, the most basic food of all."

And it gets worse:

"Already, a mere 1 degree Fahrenheit of global temperature rise over the past 50 years has caused a 5.5 percent decline in wheat production, according to David Lobell, a professor at Stanford University’s Center on Food Security and the Environment.

"By 2050, scientists project, the world’s leading wheat belts—the U.S. and Canadian Midwest, northern China, India, Russia, and Australia—on average will experience, every other year, a hotter summer than the hottest summer now on record. Wheat production in that period could decline between 23 and 27 percent, reports the International Food Policy Research Institute (IFPRI), unless swift action is taken to limit temperature rise and develop crop varieties that can tolerate a hotter world."

There's only one piece of good news in there for me ... which is that by 2050, I'll be 96 years old and may care less about eating pasta that I will about just getting out of bed in the morning, putting my teeth in and putting one foot in front of the other. (Though I hope to be far more vital than that.)

And let's be clear. When it comes to decreased pasta production, this is really all about me.

I did a quick check, BTW ... and best I can tell, there seems to be a little less concern about how climate change will affect wine production, mostly because vintners seem to be adapting better ... though there inevitably will be changes in where certain wines are grown around the world, and on the quality of certain grapes.

It is all an Eye-Opener.

Published on: December 11, 2012

The New York Times reports that health experts say they are seeing small but possibly significant decreases in childhood obesity rates in some major American cities such as New York, Philadelphia and Los Angeles, as well as in smaller cities like Anchorage, Alaska, and Kearney, Nebraska. The experts say that the state of Mississippi also saw a childhood obesity decrease, but only among white students.

New York City saw a 5.5 percent decrease, while Philadelphia saw a five percent decrease and Los Angeles experienced a three percent drop in childhood obesity rates. But, the Times writes, "experts say they are significant because they offer the first indication that the obesity epidemic, one of the nation’s most intractable health problems, may actually be reversing course."

The story goes on:

"Researchers say they are not sure what is behind the declines. They may be an early sign of a national shift that is visible only in cities that routinely measure the height and weight of schoolchildren. The decline in Los Angeles, for instance, was for fifth, seventh and ninth graders — the grades that are measured each year — between 2005 and 2010. Nor is it clear whether the drops have more to do with fewer obese children entering school or currently enrolled children losing weight. But researchers note that declines occurred in cities that have had obesity reduction policies in place for a number of years.

"Though obesity is now part of the national conversation, with aggressive advertising campaigns in major cities and a push by Michelle Obama, many scientists doubt that anti-obesity programs actually work. Individual efforts like one-time exercise programs have rarely produced results. Researchers say that it will take a broad set of policies applied systematically to effectively reverse the trend, a conclusion underscored by an Institute of Medicine report released in May."

The issue of obesity has taken on greater import as it has moved from being identified as a health problem to a national security issue; today's Washington Post has a story this morning about how, "under intense pressure to trim its budget, the Army is dismissing a rising number of soldiers who do not meet its fitness standards, drawing from a growing pool of troops grappling with obesity.

"Obesity is now the leading cause of ineligibility for people who want to join the Army, according to military officials, who see expanding waistlines in the warrior corps as a national security concern."

Back to the Times story:

"Nationally, about 17 percent of children under 20 are obese, or about 12.5 million people, according to the Centers for Disease Control and Prevention, which defines childhood obesity as a body mass index at or above the 95th percentile for children of the same age and sex. That rate, which has tripled since 1980, has leveled off in recent years but has remained at historical highs, and public health experts warn that it could bring long-term health risks.
Obese children are more likely to be obese as adults, creating a higher risk of heart disease and stroke. The American Cancer Society says that being overweight or obese is the culprit in one of seven cancer deaths. Diabetes in children is up by a fifth since 2000, according to federal data."

Published on: December 11, 2012

The Wall Street Journal reports that while Supervalu looks for the right strategic option that will allow it to either sell or reposition the company for success - or at least some measure of survival - it has come up with one tactic with short term possibilities.

According to the story, "Supervalu managed to secure what it says is the last shipment of Twinkies in the country before the bankrupt bakery Hostess shutters its oven doors. [Supervalu] is selling them at their Jewel-Osco stores in the Chicago area, hopeful, perhaps, that news of the 20,000 boxes of iconic Twinkies will generate traffic to its struggling grocery stores.  [Supervalu's] sales have been lagging, and it has been trying to execute a turnaround while also cutting costs, as it looks for a buyer."

The Journal notes that Supervalu even put out a press release to announce the coup.

Published on: December 11, 2012

Reuters reports that the India government is "prepared to launch an inquiry into lobbying by Wal-Mart Stores Inc. , buckling under an opposition campaign to discredit a flagship economic policy that allows foreign supermarkets to trade in Asia's third largest economy."

That policy, which for the first time would allow foreign companies to hold majority ownership positions in retail entities operating in India, has come under significant criticism since its passage by the nation's Parliament.

The new inquiry seems linked to Walmart recent admission that it has spent tens of millions of dollars on an internal probe into alleged cases of bribery of foreign officials in nations such as Mexico, China, and, yes, India. Walmart has not admitted any cases of bribery, but rather is looking into charges that first emerged from a New York Times article about its Mexico business, and that have spread to other facets of its global operations.

The opposition in India also apparently wants to know how much money Walmart has spent lobbying India officials; Walmart says it has spent none, but the opposition isn't buying.

Published on: December 11, 2012

The Harvard Business Review has a story about "Surviving Disruption,m" using Best Buy as one example of a company that is "being attacked from every angle" and "trying to figure out a way to compete."

The story suggests that Best Buy is making a mistake by trying to match prices with the likes of Amazon, because it is playing to Amazon's strengths, not its own.

According to the piece, "Best Buy needs to take stock of its unique advantages and compete for the customers that disruptive entrants are currently poorly positioned to win.

"As an example, think about why both consumers and businesses turn to Best Buy today. Some consumers go to see how their products look and feel before purchasing (often from Amazon), some go to ask Best Buy's store representatives for advice on their next purchase (often occurring at Amazon), some go to pick up the latest greatest video game for immediate satisfaction, some go for last-minute electronic equipment before an event (like buying a new TV before the Super Bowl), and so on. Equipment makers turn to the chain for very different reasons. Some turn to Best Buy for widespread distribution (for which many they also turn to Amazon), some turn to Best Buy for display environments (a few also employ their own retail stores to this end), and still others turn to Best Buy for their knowledgeable sales force (namely the high-end component makers who position their goods within Best Buy's Magnolia stores within the store)."

That said, the piece concedes that "it's hard to say what the retail giant should do," though it "should be looking for opportunities to optimize their business model around the jobs that Amazon can't do for customers."

Some suggestions:

"Maybe, for example, Best Buy could offer exclusive products for the customer who fears buying a product without seeing it in person. Customers with this job-to-be-done would happily pay a premium to buy a product they saw in person if it weren't available through online retailers for less. For instance, Best Buy could be the perfect home for retail distribution of products launched and funded through Kickstarter, which has seen 2012 as the year of the crowdfunded consumer electronics.

"Exclusive distribution certainly won't be enough for Best Buy to right the ship. But there are literally hundreds of other ideas that could insulate the company from attack. It could charge equipment manufacturers for showroom space, forcing their profit to come from those customers who can't afford to set up their own distribution networks in the same fashion as Microsoft and Amazon. It could offer incredible on-site service that required customers to have purchased at a premium at a Best Buy (in the same way customers flock to the Apple's Genius Bar for help when the littlest thing goes wrong with their hardware). It could even focus more of its operations on the last-minute needs customers have for which no delivery network is fast enough, growing its automatic kiosk network."

The key, the story says, is for Best Buy to position itself as something other than a "transactional retailer."

Published on: December 11, 2012

Marketing Daily reports that "a new report confirms the significant and growing influence of the Internet and social media in the shopping decisions of U.S. moms.

In preparing to go shopping, mothers are 43% more likely to go online to gather coupons and 38% more likely to look at store Web sites than food shoppers as a whole, according to Packaged Facts’ 'Moms as Food Shoppers: Grocery Store and Supercenter Patterns and Trends' report.

"Further, moms are nearly twice as likely as food shoppers overall to have used social media to plan their most recent grocery shopping trip (20% versus 11%). And in addition to consulting blogs prior to shopping, they are increasingly using mobile apps to ensure that they’re getting the best deals while shopping."

In addition, the story says, "moms are 33% more likely to choose grocery stores offering cooking classes or cooking videos and 23% more likely to pick stores providing meal planner and recipe information. They’re also 16% more likely to say that they saw or heard promotional ads or communications from the store where they most recently went grocery shopping."

Published on: December 11, 2012

• Reuters reports on an exclusive interview it has landed with Walmart's Vice President of Ethical Sourcing, Rajan Kamalanathan, who said that, in the wake of the fire that killed more than 100 workers at a Bangladesh factory making clothes being sold to the world's biggest retailer, that it needs to do more to control its supply chain.

"If a supplier or an agent chooses to subcontract without informing us, then that is a problem," Kamalanathan tells Reuters. "We can put all kinds of controls in place, but if they don't tell us where they're putting our order, then that is a problem ... We are actively thinking about how to better work with suppliers who work with agents. This is something we are talking about internally and across the industry."

According to the story, Walmart says that "in 2011 alone it audited over 9,000 factories globally to check whether its standards were being met. But still, Wal-Mart acknowledges it only controls its supply chain up to a certain point. If suppliers hired by Wal-Mart in turn hire agents who then line up production, the seemingly tight controls Wal-Mart has put in place can fail."

In this case, as previously reported, Walmart used Success Apparel as a supplier, and Success Apparel planed an order with a company called Simco, which was a Walmart-approved vendor. Simco then subcontracted out seven percent of that order to Tuba Group, which owned the Tazreen Design Ltd. factory in Bangladesh, where the fire took place.

Published on: December 11, 2012

• The Wall Street Journal this morning reports that "in an age of vitamin waters and energy drinks, the decades-long decline in U.S. milk consumption has accelerated, worrying dairy farmers, milk processors and grocery chains ... Per-capita U.S. milk consumption, which peaked around World War II, has fallen almost 30% since 1975, even as sales of yogurt, cheese and other dairy products have risen, according to U.S. Department of Agriculture statistics. The reasons include the rise in popularity of bottled waters and the concern of some consumers that milk is high in calories.

"Another factor, according to the USDA, is that children, who tend to be heavy milk drinkers, account for a smaller share of the U.S. population than they once did.

"To revive sales, milk companies and retailers are pushing smaller, more-convenient packages and health-oriented varieties, including protein-enhanced milk aimed at fitness buffs."

• Advertising Age reports that Pepsi "has tapped Beyonce as its new brand ambassador" in a deal that is described as a "true creative and wide-ranging global collaboration" that will result in the development of "new content and innovative ways to engage fans, consumers and retailers to benefit both brands."

Published on: December 11, 2012

• Portland, Oregon-based New Seasons Market said yesterday that it has hired Wendy Collie to be president/CEO of the company, succeeding Lisa Sedlar, who left the chain earlier this year to start her own chain of healthy convenience stores.

Collie most recently was president of consumer business for Knowledge Universe, and previously worked for 18 years in a variety of leadership positions at Starbucks both in the US and abroad, including a stint as general manager for Seattle's Best Coffee and Starbucks U.S.

New Seasons Market Co-Founder and Board Chair Stan Amy said, "We are pleased to have found someone who so clearly shares our mission and values and our love for the Northwest. Wendy is a well-known visionary who has built a reputation and track record as a leader who invests in people, culture development, customer service, operational excellence and strategic growth. She has a passion for food and for the unique essence of the greater Portland community that is core to New Seasons Market.”

Published on: December 11, 2012

The Los Angeles Times reports that authorities say they are "baffled" by the discovery of a handgun and seven rounds of ammunition that were found in a case of frozen meat being unwrapped at an Albertsons store in Roswell, New Mexico.

According to the story, officials know where the meat originated, but have no idea where the gun came from or why it might have been hidden ... and store employees - who apparently spend no time at all watching "CSI," accidentally wiped any fingerprints from the weapon.

The Times writes that "authorities have entered the gun into the National Crime Information Center database and plan to conduct a federal firearms trace, which will track the weapon's serial number to the last place it was sold or documented," a process that could take weeks.

Published on: December 11, 2012

• Fast Company reports that Square "has just launched a new service that lets anyone receive gift cards good for one of the more than 200,000 businesses in the U.S. that use Square's mobile payments system.

To send a gift card, you have to first be a user of Square Wallet, Square's mobile wallet app. Users can pick a business, select an amount between $10 and $1,000, and send a gift card along with a note to anyone they'd like--all you need to send a gift card is the recipient's email address.

"One nice feature of the gift cards is you don't need to set up a Square Wallet account to use it. If you already have Square Wallet, your gift card will automatically be saved to your Wallet. Square also offers Apple Passbook integration for iOS 6 users. And for everyone else, there's a QR code option that you can use either by having a merchant scan the code on your smartphone, or by printing it out and taking it with you to the store."

Published on: December 11, 2012

...will return.

Published on: December 11, 2012

In Monday Night Football, the New England Patriots defeated the Houston Texans 42-14.