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    Published on: January 25, 2013

    by Kevin Coupe

    Okay, this story has nothing to do with business.

    (Well, that's not entirely true. It could impact sales in one specific category.)

    But I found it fascinating anyway. And perfect for a Friday Eye-Opener.

    We have a lot of discussion, most of it civil, here on MNB about the proper role of government regulation.

    Well, there will be some who will argue that the government of New Zealand could be going a bridge too far, if it were to follow through on recommendations being made by an economist there named Gareth Morgan, who has suggested that New Zealand should eliminate all cats from the island nation.

    That's right. He wants New Zealand to be the first cat-free nation in the world.

    Now, he's not advocating the killing of existing cats. Just spaying and neutering them, allowing them to live to a ripe old age, but not permitting them to have kittens and also blocking the import of any and all cats into New Zealand.

    The reason? According to Slate.com, it all comes down to birds.

    "Cats are particularly damaging in island ecosystems that are home to species found nowhere else on earth," the story says. "A lot of island birds and mammals evolved in the absence of cat-size predators. They nest on the ground and have no defenses against an invasive species that plays with and then decapitates its victims. Cats have endangered or caused the extinction of bird species in Hawaii, Australia, the Chatham Islands, and New Zealand, among others. Morgan points out that 40 percent of New Zealand’s land birds are extinct, and 37 percent of the survivors are endangered."

    Cats, the argument goes, essentially are parasites. They used to have a purpose, when they served as a useful way to kill rodents that would invade homes and food stockpiles. But now, not so much.

    Now, I'm not a cat guy. We've had one cat over the years, named Michelob, and we loved her despite the fact that she had an enormous dislike of kitty litter. (No, like many people I know, she liked the feel of cold porcelain ... so she pooped and piddled in the bathtub. Multiple times a day.)

    But who is to say that these birds have a greater right to survive than cats?

    I would also argue that the New Zealanders who subscribe to the "ban the cats" movement should be careful.

    Because, as they say in Jurassic Park, life will find a way.

    It has been observed many times that while dogs know we own them, cats believe that they own us.

    The cats will survive in New Zealand. They'll live in the underground, they'll multiply, and they won't be happy. And few things, in my experience, are worse than a cat with an attitude. (Just ask my old bathtub...)
    KC's View:

    Published on: January 25, 2013

    The Boston Globe writes about how Supervalu-owned Shaw's seems to be in a downward spiral, plagued by high prices (more expensive than anyplace else, except maybe Whole Foods) and tough competition from the likes of Hannaford, Trader Joe’s, Market Basket, Whole Foods, Stop & Shop, Roche Bros., Wegmans and Walmart.

    "Shaw’s sales have eroded by about $1.5 billion since 2006 and its New England market share has dropped from 19 to 11 percent," the story notes, and many analysts blame the decline on Supervalu, which operated the chain from a position of too much debt (which led to high prices) and too little understanding of the marketplace.

    The Globe story suggests that it is possible that the sale of Shaw's (and other chains) by Supervalu to a group led by Cerberus Capital Management could lead to better times, but that addressing the chain's high price image will have to be a high priority.
    KC's View:
    Or, it could be that selling off Shaw's - either as a whole or in pieces - could be the most inevitable solution to the chain's problems. It may be that the banner's brand equity is so damaged that repair and rehabilitation simply are not possible ... and that some sort of major conversion to another banner is the best approach.

    Is it ideal? No. But it may be just like that scene in Argo, when the CIA guy concedes that there are no good ways to get the hostages out of Iran and says, "This is the best bad idea we have... by far."

    Published on: January 25, 2013

    Marketing Daily reports on a survey of CPG executives by Deloitte saying that while "89% expect their highest growth to come from the warehouse club channel in the next three years, and 75% say they expect club stores to expand geographically," it is equally true that "most don’t know what to do about it."

    "It surprised us that even though these clubs are among the biggest retailers and a major part of CPG companies’ portfolios, there often isn’t any cohesive plan in place to develop strategies that effectively use these channels," Deloitte's Rich Nanda tells Marketing Daily. "A number of these companies are still trying to throw things at the wall and see what sticks. And the batting average with that approach is pretty low."

    In addition to expecting club stores' sales to grow, CPG executives also are aware that the club customers generally are the most desirable - affluent shoppers who can afford the annual fees, and have the time and space to shop for large packs, the story says.
    KC's View:
    Earlier this week, Deloitte was making the case for the growth of sales and influence by dollar stores. Now, it's club stores.

    I don't think there is any conflict here. In fact, it speaks to a broader trend ... that while the economy may be improving and the stock market is hitting highs, there remains a lot of concern out there about prices ... and it will be interesting to see if this is a permanent attitudinal shift. I'm not yet persuaded that it is ... but I'm getting there.

    Published on: January 25, 2013

    The soon-to-be-implemented ban on the sale of jumbo soft drinks in certain NYC venues was debated in court yesterday, though no rulings were handed down.

    Here's how the Associated Press frames the story:

    "The city defended its groundbreaking size limit on sugary drinks Wednesday as an imperfect but meaningful rein on obesity, while critics said it would hurt small and minority-owned businesses while doing little to help health.

    "The first courtroom arguments in the closely watched case ended without an immediate ruling. Opponents said they planned to ask a judge to delay enforcement during the suit, which has broached questions of racial fairness alongside arguments about government authority and burdens to business ... Beverage makers, restaurateurs, minority advocates and other critics told a judge the upcoming 16-ounce limit was a finger-wagging incursion on consumer choice, rife with inconsistencies that would cost a hot dog vendor business while still allowing New Yorkers to buy belly-buster sodas at the chain convenience store next to him."

    The suit was filed by the American Beverage Association, which has pledged to keep appealing as long as necessary in order to stop the law from being implemented as planned in mid-March.
    KC's View:
    There are two good reasons for the courts to kill this regulation ASAP. One is that it is blatantly unfair to some venues. The other is that it will only make the lawyers richer.

    Published on: January 25, 2013

    The Los Angeles Times reports that the announced plans by Walt Disney Co. to give theme park attendees wristbands equipped with RFID technology that will streamline the guest experience as well as collect information about where guests go and what they do, are generating questions about privacy issues.

    The original story can be read here.

    According to the story, "Edward J. Markey (D-Mass), co-chairman of a congressional panel on privacy, wrote to Walt Disney Co. Chairman Robert Iger, asking what information the park will collect with the so-called MagicBand and how it will be used."

    Disney has said that the wristbands will have an opt-in feature, and that the privacy of children will be safeguarded.
    KC's View:
    I think that Disney will be careful about how it accumulates and uses information, especially about kids, but their definition of "careful" and mine might be very different. So it strikes me as entirely appropriate to ask questions, though I suspect that Disney will be very careful about doing anything that could damage its kid-friendly brand.

    Published on: January 25, 2013

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

    • The Los Angeles Times reports that "McDonald's has signed up with the Marine Stewardship Council to verify all of its fish that gets breaded, fried and sold as 'Filet-O-Fish' sandwiches are sustainably certified Alaskan pollock. In exchange for audits of its massive supply chain, McDonald's each year can sell hundreds of millions of fish sandwiches, and soon-to-be sold Fish McBites, in boxes with the council's trademarked blue Eco-label."

    Sustainable? Certified Alaskan pollock? I'm actually shocked to find out there is any actual fish in McDonald's Filet-O-Fish sandwiches...

    • The Associated Press reports that as a "voluntary and precautionary measure," Burger King restaurants in Ireland and the UK "has stopped buying beef from an Irish meat processor whose patties were found to contain traces of horsemeat."

    There have been several cases of horsemeat being found in s-called beef burgers coming from a number of distributors, which has raised questions about food safety and labeling accuracy in the UK. According to the story, "Irish food officials say an ingredient imported from an unspecified European country and used as filler in cheap burgers is the likely source of the horsemeat contamination."

    Of course, of course. But I'd still like to hear an explanation that doesn't use words like "unspecified" and "likely."

    Bloomberg reports that while Starbucks first quarter profit was up 13 percent, "sales in Europe, the Middle East and Africa declined for the second straight quarter."

    According to the story, "Chief Executive Howard Schultz is closing stores in Europe, mostly in Britain, as the chain attempts to turn around the business there. Last year, Starbucks revamped its lattes with more espresso and began running television ads in Britain to attract more customers. Sales at stores open at least 13 months in Europe, the Middle East and Africa fell 1 percent in the quarter."

    Wait a minute. I thought that Starbucks' big growth area was stores outside the US. Now it is the non-US stores that are a drag on the company? I'm confused.
    KC's View:

    Published on: January 25, 2013

    Interesting piece on Forbes.com about why a collaboration between Target and Neiman Marcus on a holiday collection flopped.

    "The line, which boasted merchandise from 24 upscale designers such as Diane von Furstenberg, Oscar de la Renta and Tracy Reese, was priced too high, was ill-timed within the holiday season, and the retailer overestimated product demand, Joshua Thomas, a Target spokesman, told Forbes.

    You can read the whole piece here.
    KC's View:
    The most important part of this story, I think, is where the companies say that while this initiative failed, it has not dimmed their enthusiasm for trying new things. That's a good thing.

    Published on: January 25, 2013

    • Ahold USA has named Mark McGowan, formerly the company's Executive Vice President of Supply Chain, to be Executive Vice President of Merchandising, Ahold USA.

    • CVS Caremark announced that Cheryl Mahoney has been promoted from her job as VP of beauty and personal care to a new role as VP retail merchandising – promotion and business development.
    KC's View:

    Published on: January 25, 2013

    ...will return.
    KC's View:

    Published on: January 25, 2013

    Attention, pop culture geeks, and I know there are a lot of you in the MNB community...

    In case you didn't see it, Disney reportedly has hired JJ Abrams - the director of the Star Trek reboot and its sequel, the upcoming Star Trek Into Darkness, as well as the produce behind TV series such as "Lost" and "Fringe," to direct the upcoming new installment of Star Wars.

    Disney recently bought Lucasfilm and the Star Wars and Indiana Jones franchises, and has pledged to bring Luke Skywalker, Han Solo and Princess Leia (but hopefully not Jar Jar Binks) back to the big screen. A screenwriter has been hired (not Lucas, thankfully), and now Abrams has been brought on board ... with the film slated to hit the big screen in 2015.

    May the Force be with them.
    KC's View:

    Published on: January 25, 2013

    Just a couple of quick notes this morning ...

    Broken City, the new Mark Wahlberg - Russell Crowe movie, is what used to be called a B-movie, a not-bad crime thriller with more than a bit of noir going for it. It isn't great, but it is less than two hours and has a reasonably coherent plot and a persuasive performance by Wahlberg as a disgraced cop turned private eye who finds himself helping and then being manipulated by the mayor of New York (Crowe).

    You can tell that the studios didn't have a lot of confidence in Broken City because they slotted into what commonly is referred to as the "January ghetto" - the month where they release movies with few expectations, figuring that most people are seeing films released in December and nominated for Academy Awards. By that standard, Broken City isn't awful ... I just wish it were better, because I love these kinds of movies when they are well done.

    Broken City does raise one major question for me. What the hell happened to Russell Crowe's career? He is utterly unpersuasive as mayor of New York, and I keep wondering what happened to the guy who was so terrific in Gladiator and Master & Commander?

    Some actors make movies better just by being in them, but some actors (and it ends up that Crowe may be in this category) need great directors and scripts to do great work. There's no shame in that, but it is a reality. Watching Russell Crowe lately is a lesson in casting ... and hiring, if you wanted to extend the metaphor to the broader business world.




    I had a terrific white wine the other night - the 2011 LaZarre Albarino, from California's Edna Valley, which is a little drier than Spanish albarinos but excellent. (I had it with the incomparable chopped salad and the duck sausage stew at Cowboy Ciao in Scottsdale ... and it led to consider yet again how lucky I am to do what I do.)



    That's it for this week. Have a great weekend, and I'll see you Monday.
    KC's View: