business news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: March 8, 2013

    by Kevin Coupe

    Consider this a public service announcement.

    Have you heard about the new YouTube sensation called "Gallon Smashing"?

    You're gonna love this. Sure you will.

    It works like this. A young person - usually a male - walks around a supermarket carrying two gallon containers of milk or juice. When they think nobody is looking, they smash the containers against the floor or cases and then fall to the ground. people who rush to their assistance believe that they've slipped on a wet floor ... except, of course, the floor wasn't wet until they smashed the gallon containers.

    And, of course, while customers were not looking when they did it, there was someone watching - a confederate with a video camera. And the footage ends up being posted on YouTube.

    (Trust me on this. Just go to YouTube and search for "gallon smashing." It is right up there with the Harlem Shake and Gangnam Style.)

    Now, there are reports that the guys who started this trend do end up paying for the gallons they've smashed. But that doesn't change the fact that they are committing vandalism, pure and simple. And by posting it online, where it has been seen my millions of people, it encourages other people to do it.

    So here's my suggestion.

    If you are a food retailer and this happens in your store, help these young men to their feet ... and then hold the little bastards by the scruff of the neck while you call the cops and press charges.

    Maybe, for them, it'll be an Eye-Opener.
    KC's View:

    Published on: March 8, 2013

    Advertising Age has a story about how speed of shipping and delivery is seen by many retailers as the next great competitive battleground and influencer of how and where consumers will do their online shopping.

    Here's how Ad Age frames the story:

    "E-commerce sales will reach $327 billion by 2016, according to Forrester Research. Consumers will be purchasing everything from $12 shampoo to $3,000 handbags -- maybe even cars -- online. But speed of ordering and delivery is what will prompt consumer consideration.

    "Same-day-shipping services are changing consumer behavior -- and fast."

    Amazon is opening distribution centers around the country as a way of providing same-day and next-day delivery to its Prime customers. As reported here yesterday, Google is planning to offer competition, with a "Google Shopping Express" service that will allow shoppers to order online from a number of vendors and then have those products delivered the same day.

    Among the likely results of all this behavior, according to Jeffrey Cole, director of the Center for the Digital Future at the University of Southern California (USC) will be that a) independent retailers will have to work twice as hard to attract and keep their customers, since big online services will suddenly be more convenient, b) universal free shipping will become a cost of doing business for e-tailers, and c) promoting in-store deals will become increasingly important,with Black Friday-style promotions becoming available year-round.
    KC's View:
    I've been saying for a long time that I thought free delivery would end up being a cost of doing business, and I haven't changed my mind ... except that now I'd say "fast and free" delivery.

    These moves are all game changers that affect how people think about convenience and how businesses think about service. Not responding to the challenge is not an option. (If you will excuse the double negative.)

    Published on: March 8, 2013

    Reuters reports that the Centers for Disease Control and Prevention (CDC) is saying that while "US adults have been eating steadily fewer calories for almost a decade," the nation's obesity rate continues to increase.

    According to the story, "researchers, whose findings appeared in the American Journal of Clinical Nutrition, analyzed trends since the 1970s and found that among adults, average daily energy intake rose by a total of 314 calories from 1971 to 2003, then fell by 74 calories between 2003 and 2010 ... Experts said it's possible more time is needed to see obesity rates respond to changes in calorie intake. It's also possible that Americans have changed their eating habits but are still not getting enough exercise to burn the calories they do consume. Or, the surveys may simply be wrong."
    KC's View:

    Published on: March 8, 2013

    Reuters reports that Walmart is selling more than 200 SKUs manufactured by small, woman-owned businesses in nine countries on a "Empowering Women Together" section of its website, part of its effort "to position itself as a leader in women's economic empowerment ... Wal-Mart's goals include spending $20 billion over five years through 2016 with women's businesses that provide goods for the company's U.S. business, up from about $2.5 billion a year previously. It also aims to double sourcing from international suppliers run by women."

    The story notes that "Wal-Mart continues to work on transforming its image from a corporation that critics say underpays workers and does harm with its large stores into an outspoken corporate citizen that hires more veterans, reduces its impact on the environment and works with local suppliers."

    The items are being sold only online, not in Walmart's bricks-and-mortar stores.
    KC's View:
    Not sure that this program is going to make some woman scraping by in a Topeka supercenter, frustrated that she can't get raises and promotions that she thinks she deserves, feel any better. But it's better than nothing.

    Published on: March 8, 2013

    The Boston Globe reports that a survey done by Restaurant Sciences LLC, a form that analyzes guest checks from the nation's restaurants and bars, suggests that "sales of Budweiser, Michelob, and Anheuser-Busch InBev’s other beer brands have yet to take a hit from less than flattering media coverage."

    A-B is defending itself against a proposed class action lawsuit accusing it of watering down a number of its beer brands as a way of saving money.
    KC's View:
    I'm not expecting any reaction from consumers until the accusations are settled. But then ... well, it will all depend on how the gavel falls.

    Published on: March 8, 2013

    Facebook yesterday announced what is being termed "a substantial redesign of its News feed," a makeover that the New York Times writes is "a makeover aimed at both keeping users glued to the social network and luring more advertising dollars."

    Wired writes that the goal is to create a kind of "personalized newspaper ... like a newspaper, the new News Feed has a prominent, bold front page and is divided into a host of new sections, showcased in a menu in the top-right corner of the screen."

    "The overhaul," Wired writes, "is designed to get people to interact more frequently with the News Feed, the stream of status updates and other information that greets each user upon login."
    KC's View:

    Published on: March 8, 2013

    Business Insider reports that LivingSocial, the Amazon-backed daily deals company that competes with Groupon, booked $8.6 million in revenue on Tuesday, a one-day record for the company.

    The reason? A discounted $45 membership at Walmart's Sam's Club that was available on Tuesday. The story says that LivingSocial shared the revenue with Walmart, and the deal ended up being profitable for the deal site.
    KC's View:

    Published on: March 8, 2013

    • The Chicago Sun Times reports that the "Walgreens store set to open in south Evanston later this year is aiming to become the nation’s first 'net-zero' energy retail store, which company engineers predict will produce energy equal to or greater than what it consumes."

    USA Today reports that "the national obsession with fitness, healthy eating and battling obesity is altering the retail landscape of neighborhood shopping centers and strip malls: They are becoming suburban havens of healthy living.

    "Health clubs are increasingly anchoring outdoor shopping centers. Yoga studios, yogurt shops, vitamin and workout apparel stores, organic food markets and health foods restaurants quickly follow."

    • The Wall Street Journal reports that there is more evidence of an improving economy - "US households ramped up their borrowing at an annualized rate of 2.4% in the final three months of 2012, the biggest jump since the beginning of 2008, according to a Federal Reserve report released Thursday. Mortgage borrowings outstanding dropped only 0.8%—the lowest percentage drop since early 2009. Meantime, other kinds of consumer borrowing expanded at the fastest pace since the third quarter of 2007."

    According to the story, "The central bank's borrowing data Thursday are the latest sign that the mind-set of the American consumer appears to be shifting from earlier in the recovery, thanks partly to a rebound in the stock market and rising home prices that are making many households feel wealthier."

    NBC News reports that hundreds of consumers in Newark, Ohio, "are rallying support around what they call an institution in their community; their local grocery store that is set to close." The store in question is a Meijer that opened in 1981 that the company says is no longer economically feasible.

    More than 1,300 residents have gone on Facebook to protest the planned May 24 closing.

    Business Insider reports that JC Penney, reeling from sales numbers going in the wrong direction, is eliminating 2,200 positions, and has warned store managers that they must "work harder with less." The story says that "'Service Leaders,' 'administrative assistants,' and 'office/cash room associates' are being cut" from the payroll.

    • Two North Carolina food bloggers have launched a new petition with more than 50,000 signatures in under 48 hours calling on Kraft Foods to remove controversial artificial dyes Yellow #5 and Yellow #6 from its Macaroni and Cheese products.

    The bloggers say that they "grew concerned about the popular Kraft product after discovering that many countries ban the Yellow #5 and Yellow #6 artificial dyes and that the Center for Science in the Public Interest has linked the artificial colors to hyperactivity in children, migraines, and asthma."
    KC's View:

    Published on: March 8, 2013

    Remember ... for most of us in the US, this weekend marks the end of Standard Time and a return to Daylight Savings Time. On Sunday, March 10, at 2 am, it will be time to turn your clocks forward an hour. (Assuming, of course, you have clocks that require manual changing.)
    KC's View:

    Published on: March 8, 2013

    A number of emails have come in about wages, leadership, and the chasm that sometimes exists between people at the top and those on the front lines.

    One MNB user wrote:

    It seems to me that a great many of the companies with the most glaring pay gaps between those on the front lines (and the middle lines, too) and those in the Executive Suites do not have many (or any) people in the highest levels of compensation who actually worked their way up the ranks into those positions.  The companies that take care of the top first and foremost, and make the underlings the scapegoats and sacrificial lambs when profits fall short seem to be largely run by people hired from the outside at inflated compensation, who then surround themselves with their cronies who are also outsiders and also receive inflated compensation and shiny golden parachutes. 

    Granted, there are times when a fresh perspective is called for to rescue or reinvigorate a company, but all too often the only new perspective that is gained is an culture of cronyism and corporate looting in the upper echelons and a disincentive for the lower ranks to excel, as it becomes more and more evident that there is only so far that hard work and ambition will take them.

    From another reader:

    Ours is a consumer economy.  If wage earners don’t have the funds to consume, the economy falls off.  If, due to the slow economy, investors don’t have as many opportunities to invest in production,  they tend to invest in elsewhere, building no employment base for future consumers, and continual slow cycle.

    Class warfare has been going on for a long time, and those at the top have been waging it quite effectively.  Capital gains are not taxed at the same rate as wages, though a wage earner invests hours of their lives, when the investor is investing funds they have at their disposal.  The wealthy have an entire tax code of breaks, many which apply to narrowly targeted industries or properties.  The degree of corporate subsidies, and the rate of state sponsorship of industries of minimal productive value is astonishing, but it is of most benefit to the wealthy.

    I am a capitalist at heart, but anyone who denies the system is overwhelmingly distorted in favor of the very, very wealthy is not paying attention or has drunk too deeply of the Kool-aid.

    And another reader:

    Raising the minimum wage only hurts the less than ordinary worker.  Raising the minimum wage is also a slap in the face to those who have worked hard to get $2-3 above the current minimum wage.  When they see that the most useless among us have been given a raise that nearly matches their wage, just for being alive and showing up, that has to be demoralizing to the people who have chosen to work harder and smarter.

    I have such a problem with the phrase "the most useless among us."

    Sure, there are people who are less accomplished, less motivated, less ambitious than others. But useless? That seems so condescending and cruel. It may be that they come from circumstances that did not allow for opportunity, did not nourish their dreams and ambitions, that did not give them a chance. Many people rise above such circumstances, but some don't and some cannot. I refuse to see such people as useless, and refuse to treat them as such.

    Besides, your email presumes that the current minimum wage is enough for people to live on. I think in many communities, that'd be pretty tough. Though I guess that in your world, maybe useless people don't deserve to survive.

    From another reader:

    Most publicly-held corporations do not, I believe, employ many people at minimum wage, except perhaps restaurants.

    Raising the minimum wage, as proposed, would affect a lot of small, independent businesses that are starting up and offer employment of some kind to unskilled people.   It seems to me raising the wages that much would heighten unemployment of black youths especially, since so many have dropped out of school and are unskilled.

    And another:

    Well put! As a fellow Capitalist who absolutely believes in making money and rewarding individuals for a job well done, I can't help but think that too many corporate executives (and politicians for that matter) have convinced themselves that the ends justify the means. The ends of course being their financial gain (or re-election) as opposed to the long term benefits to shareholders, employees and customers (or citizens). It is hard to believe that it is either sustainable or good.

    Regarding changes in security procedures enforced by TSA at airports, MNB user Steve Deveau wrote:

    So let me see if I understand this correctly – the next time I fly, I can carry on my ski poles, a pool cue, a hockey stick, a wiffle ball bat, a small pocket knife, a seven iron and a sand wedge but my shampoo had best be in a clear ziploc bag and under 3.5oz.  I feel safer already.

    Me, too.

    On the subject of Marissa Mayer, Yahoo, and the work from home controversy, one MNB user wrote:

    I realize that the choices Marissa Meyer is making have caused quite a stir in the media and often we women are telling one another to give her a break (no choice she makes is the right choice, blah blah blah). But I happen to think we’re all giving her a pass because she is a woman.  What do you think female leaders would be saying if the Yahoo CEO was a man who told a top executive to take a two week maternity leave and then eliminated work from home options?  All female leaders everywhere would be grilling him, talking about it on news shows (maybe they are now but I haven’t seen it), female workers at Yahoo would be drafting some memo to send around the company, etc.  It is interesting to me that since she is a working mom, it seems folks are not being as vocal?  Who would have thought….

    And another reader chimed in:

    I understand that employers need to be mindful of the work/life balance of employees, but when my office implemented a work remote policy the guidelines specifically stated this setup should not take the place of proper child/elder care or other home responsibilities usually reserved for after work hours.

    MNB user Daniel Hariton McQuade wrote:

    How can a company whose business model is about providing connectivity digitally and remote data management demand "in office accountability"... "Speed and quality are often sacrificed when we work from home. We need to be one Yahoo, and that starts with physically being together." Really Marissa?? Yahoo "connects" a half a billion people around the feel that you cant connect with your own employees? control freak!

    I lost all lot of respect for her, it's one thing when you have passion for your work, but when passion takes a back seat to perfection & performance you have lost your distinction!

    Lets hope she "builds" the same quality daycare facility for the moms and dads with babies/toddlers next to their offices...then we'll see if she lives on the same planet!

    MNB user Pervez S. Mohammed wrote:

    Read your piece with interest. Working exclusively from one's home and not the office impacts negatively on the "away" employee and does not build upon the energy that face to face situations can generate. The positive aspects of "feeding off one another" are lost. Working from home is isolating. We humans need human contact.

    How about that famous middle ground where "remote workers" are required to be in the office every so many days in the week or month for meetings, presentations, brainstorming sessions, socializing, team building?

    Could that have been a better option for Yahoo?

    And from another reader:

    All of the attention to this move by Ms. Mayer has been quite interesting. The one thing that has been left out of nearly all of the stories is the fact that she makes most of her decisions based on the data. Using the data provided by Yahoo’s VPN team it was determined that a large number of the telecommuters at Yahoo were really not working. They were not even logging into the system. With that data, in her place I might have made even more dramatic decisions.

    If true, this lack of motivation and dedication suggests that Yahoo may have bigger problems that just making people come to the office won't solve.

    MNB user Kathleen Whelen wrote:

    This is what would be the kicker for me.  If “she had a nursery built next to her office at Yahoo headquarters” really means that this nursery is in the Yahoo office building itself, then, unless she’s sharing it with all her employees who need child care, then her behavior is simply beyond the pale.

    I think Mayer is making something like $10 million a year. Can you imagine how this story would be playing out differently if she'd said that she was taking a million dollars of that money and building state of the art daycare centers in all of Yahoo's main offices?
    And from another reader:

    I enjoyed reading your newsletter for close to two years but never felt compelled to write…until today.

    Your lead story covering; working from a home office, lack of corporate leadership (or leading from a different planet), the spread between corporate profits and front line employee compensation really strikes a nerve.

    I’m in my late 50s, downsized twice in the last few years.  I’m currently looking for a job, staying positive, trying to find a job.  But sometimes I feel like I come from a different planet ( not the CEO planet) or at least on the outside looking in.  I join the ranks of too many without work.  My wife is a teacher and hasn’t had a raise in 5 years.  I know several Federal Government employees looking at cutbacks.
    I don’t want to go on with doom & gloom. 

    However, I do want to say I think you are on to one of the biggest issues facing all of us on the “front lines”, the majority of people who keep slipping backwards as we claw faster.   How will we reverse this trend?  Might be a good topic for reader comment or examples of leadership to do the right thing to move people and business forward again.  
    Keep up the good work.


    Another reader wrote:

    I can completely understand where Ms. Mayer's decision is coming from and to a point it makes sense.  I find in my own position, sometimes I need to be able to just get up from my desk, walk to a colleague's desk and figure out the issue we are having right then and there.  Yes, it certainly helps with collaboration. 
    But...(there's always a but right?)

    I am also a new mother and I would contest that given I make a middle class salary, work-life balance is becoming harder and harder.  I'm sure if I could afford to have a nursery built next to my cube, yep work-life balance would be a cinch.  But truth be told - I have to be out of the office to take over baby duty so my husband can get to school after working full time as well.  I love working, and I love what I do, but I constantly worry that my decision to have a family could at some point hurt my career because I don't have the luxury of combining work and life.  My company has a strict no work from home policy and it does lead to a feeling of the leaders being disconnected from what really happens in the employees lives.  I will say that the senior leaders do follow this policy themselves, but as you noted, when you make the income that a senior leader makes, you can afford luxuries (like one parent stays home with the children) that perhaps your front line cannot.  To your point, the argument about Ms. Mayer's decision is not about working from home.  It's the bigger issue of companies being in touch with actual lives.  The most successful companies will not be the ones who offer the largest salaries or the most days off (but has a high turn over for employees working 60+ hour weeks to earn those benefits) - they will be the ones where senior leadership displays a sincere concern for the everyday lives of the front line workers. 

    The companies where people feel appreciated, important and truly feel apart of the team.  I had a manager tell me once that he really wanted me to succeed, not only for my own benefit, but if I succeeded, then he succeeded.  Mediocre raises, benefits slashing may create great profits and returns now, but as a company, is that really investing in your future?  In my opinion, senior leadership concern for the frontline, a willingness to invest longterm in employees and expressed concern for an individual's success, goals and life is what will build longterm growth.  I'd love to think if one day, I own my own business, that is how I would approach my staff, but I'm only 31, I may have a lot to learn still...

    And MNB user Mike Franklin wrote:

    Excellent opinion piece. Yahoo’s ability to resonate depends on its ability to insert itself into pop culture. Mayer appears to be isolating herself from pop culture.

    Mayer is just another example of a CEO that believes they are making millions because they are brilliant…when in fact, on the path to their reputations, people below and around them made them appear brilliant.

    I said yesterday that I thought that the new trend of selling craft beers in larger-than-usual containers struck me as a bit pretentious, which led one reader to write:

    While visiting home, last year, I had the opportunity to spend a couple evenings at my nephews house and enjoy some beer tasting. It was very similar to wine tasting and I was fascinated with my nephew’s knowledge of the history and brewing processes of all the beers we sampled. It was also incredible how much he knew about the order, in which to sample the beers and the foods they complimented.

    I didn’t find it pretentious at all and could see sharing a bottle or 2 with friends in certain settings. I don’t think this will replace historical beer markets. It just generates new ones.

    I actually think that I was painting with a broad brush yesterday, making generalizations that were not justified. Can we just forget that "pretentious" remark? Please?

    And finally, writing about Amazon's new content investments, I said yesterday, in part:

    Production companies that used to just make programs for traditional networks now see the likes of Netflix and Amazon as being prime potential buyers for their shows, with the added benefits of greater creative freedom (which sometimes, but not always, means swear words and nudity).

    One MNB user responded:

    I think you're the essence of the problem:  Why are the "traditional networks" still forced to fight with one hand tied behind their backs?  Nobody forces viewers to watch "greater creative freedom" on competitive channels.  Wouldn't you assume they'd be capable of steering-away from it on "traditional networks" as well?

    I'm not sure how I'm part of the problem ... but you're right that traditional networks seem to be fighting from a position of competitive weakness.
    KC's View:

    Published on: March 8, 2013

    I don't have any movie/book/TV series reviews to offer this week, but as a change of pace, I'd like to refer you to a website that my brother told me about. Tim, who is an elementary school teacher, was doing some research online about space exploration, and he came upon a website called, which basically is a compilation of a wide variety of letters about a number of different subjects.

    Here's the introduction to the specific letter that Tim found:

    In 1970, a Zambia-based nun named Sister Mary Jucunda wrote to Dr. Ernst Stuhlinger, then-associate director of science at NASA's Marshall Space Flight Center, in response to his ongoing research into a piloted mission to Mars. Specifically, she asked how he could suggest spending billions of dollars on such a project at a time when so many children were starving on Earth.

    Stuhlinger soon sent the following letter of explanation to Sister Jucunda, along with a copy of "Earthrise," the iconic photograph of Earth taken in 1968 by astronaut William Anders, from the Moon ... His thoughtful reply was later published by NASA, and titled, "Why Explore Space?"

    You can read the letter here ... and I hope you find it as interesting as I did, as a measured and lucid explanation of priorities and context and the importance of investment in enterprises that challenge us and further our understanding of the universe.

    I do have a fantastic wine for you this week - the 2011 Carlton Cellars "Proposal Rock" Sauvignon Blanc...which is bright and refreshing and just wonderful, not to mention coming from one of my favorite Oregon wineries.

    Have a great weekend, and I'll see you Monday.


    KC's View: