business news in context, analysis with attitude

Published on: August 5, 2013

by Kevin Coupe

While it happened a couple of months ago, the New York Times had a piece over the weekend about the commencement speech given by writer George Saunders at Syracuse University this year.

"Down through the ages," Saunders began, "a traditional form has evolved for this type of speech, which is: Some old fart, his best years behind him, who, over the course of his life, has made a series of dreadful mistakes (that would be me), gives heartfelt advice to a group of shining, energetic young people, with all of their best years ahead of them (that would be you). And I intend to respect that tradition."

But then, Saunders give sone of the best commencement speeches that I've ever read, by focusing on the importance of kindness.

An excerpt:

" Who, in your life, do you remember most fondly, with the most undeniable feelings of warmth? Those who were kindest to you, I bet.

"It’s a little facile, maybe, and certainly hard to implement, but I’d say, as a goal in life, you could do worse than: Try to be kinder."

It won't take you more than a few minutes to read this. I heartily recommend it.

You can read it here.

It is, in fact, an Eye-Opener.

Published on: August 5, 2013

The Associated Press reports that a US District Court judge has ruled against the certification of a class action gender discrimination lawsuit that would have pitted 150,000 female Walmart employees against the retailer.

The judge in the case said that the claims in the suit, which maintains that male Walmart employees get paid more and get promoted faster, were too disparate to be covered in a single class action, and that lawyers had failed to demonstrate systemic discrimination.

The story notes that "the lawsuit filed in San Francisco federal court was a scaled-down version of an initial complaint filed in 2001 that sought to represent 1.6 million women nationwide. But the U.S. Supreme Court tossed out that class action lawsuit in 2011, ruling it found no convincing proof of companywide discrimination on pay and promotion policy. The court also said there were too many women in too many jobs at Wal-Mart to wrap into one lawsuit."

"Though plaintiffs insist that they have presented an entirely different case from the one the Supreme Court rejected, it is essentially a scaled-down version of the same case with new labels on old arguments," US District Judge Charles Breyer wrote.

An appeal of the ruling is planned.

Published on: August 5, 2013

The Produce Marketing Association (PMA) announced over the weekend that Cathy Green Burns, the former president of Food Lion, is joining the organization as its new president, part of what PMA said was a "continuing restructure of the senior leadership team."

PMA said that "in this new role which further strengthens the staff’s blend of association management and industry expertise, Green Burns will focus initially on leading board and staff team development as well as lending her insight to business development activities. She will report to PMA Chief Executive Officer Bryan Silbermann, who previously held both president and CEO positions."

Silbermann says that Green Burns will "play a crucial role supporting the rollout of our new strategic plan, especially in helping members grow in the midst of so much change in our consumer and trade marketplaces."

And Green Burns says, "With strong core values as a foundation, I am excited to be a part of an organization that is making a difference to inspire healthy eating across the world."

Green Burns, in addition to holding senior positions at Food Lion and Hannaford Brothers, has served as chair of the Produce Traceability Initiative’s Leadership Council and also chaired the Coca-Cola Research Council. She is also a past board member of the Network of Executive Women and serves as the current chair of the Board of Governors of Children’s Miracle Hospital Network as well as the Board of Duke Children’s Hospital.

Published on: August 5, 2013

The US Food and Drug Administration (FDA) has issued standards for gluten-free claims by manufacturers, "a step that health officials said would help the three million Americans with celiac disease and bring uniformity to the $4 billion market for gluten-free products," the New York Times reports.

According to the story, "The agency set a gluten limit of 20 parts per million in products labeled gluten free, said Michael R. Taylor, deputy commissioner for foods and veterinary medicine at the F.D.A. The limit had long been discussed and did not come as a surprise to industry or patient advocate groups. It was similar to the level adopted in recent years by the European Union and Canada, Mr. Taylor said."

The gluten-free industry is estimated to be a $4.2 billion business.

Published on: August 5, 2013

Rep. Dan Lipinski (D-Illinois), last week introduced a bill that would change the standard for full-time employment from 30 hours to 40 hours, a move designed to address what is called "an unintended incentive created in Obamacare for employers to cut the hours of part-time employees."

The Forty Hours Is Full Time Act of 2013 is similar to a bill introduced in the US Senate by Sen. Susan Collins (R-Maine) and Sen. Joe Donnelly (D-Indiana).

“Even with the Administration’s recent decision to delay the Obamacare employer mandate for one year, we already know some employers are preparing to meet the law’s guidelines by slashing workers’ hours and forcing them to work 29 hours a week or less," Lipinski said in a prepared statement. "This is reducing the take-home pay for millions of Americans at a time when they can least afford it. The Forty Hours Is Full Time Act keeps the usual 40 hour full-time work week in place without sacrificing the goal of providing affordable, quality healthcare to Americans.”

Supporters of Rep. Lipinski’s bill include the Food Marketing Institute, the Retail Industry Leaders Association, the International Franchise Association, the National Restaurant Association and Dunkin' Brands.

FMI Senior Vice President of Government and Public Affairs Jennifer Hatcher said, “Rep. Lipinski’s shared legislation ... demonstrates the growing bicameral and bipartisan consensus that the ACA’s 30-hours-per-week definition for full-time employees needs to be addressed in order for the law to be effective and to minimize the disruption to the American workforce."

Published on: August 5, 2013

BusinessNewsDaily reports on new research suggesting that "53 percent of retailers expect mobile transactions to account for a significant part of their holiday sales this year," and that 81 percent of retailer surveyed said they plan to upgrade their e-commerce platforms so they can meet this expected growth.

According to the story, "Retailers are predicting that increases in mobile sales will help their in-store sales as well since online shoppers may be drawn to physical stores to complete their purchases. Social, media on the other hand, is not predicted to have a large impact on sales, with just 16 percent of respondents saying social will drive significant sales." The story goes on to say that retailers plan "to rely on promotions in order to drive sales this year. Thirty percent of retailers say they will begin to offer promotions in October while an additional 40 percent say they will wait until November. The most popular promotions will be flash sales, free shipping offers and buy-one-get-one-free offers. "

The research was conducted by Baynote, described as "a provider of customer experience solutions for retailers."

Published on: August 5, 2013

It is a mark of how the world has changed in just 20 years that the New York Times Company said this weekend that it will sell the Boston Globe and other New England media businesses to John W. Henry, principal owner of the Boston Red Sox, for $70 million. The Times bought the Globe in 1993 for $1.1 billion.

Not what one would call a good investment.

Of course, it doesn't always take 20 years for some changes to take place...

Reuters reports that AC/InteraActiveCorp is selling the Newsweek brand to IBT Media. Terms of the deal were not disclosed. This is the third time in three years that Newsweek has changed hands - once when the Washington Post sold it to Sidney Harman for $1, and then again when Harman's estate sold it to AC/InteraActiveCorp, which merged it with its Daily Beast website.

The story notes that the Daily Beast is not part of the sale to IBT Media.

Published on: August 5, 2013

• Bloomberg reports that Tesco has informed a number of publishers that it "will restrict the sale of so-called lads’ mags to people over 18 and ensure they are displayed in a way that children cannot see the covers that typically feature scantily clad women in sexually provocative poses ... (and) has won agreements from the publishers of some of the magazines that the covers will be more modest from now on."

The story says that "Tesco has come under pressure to stop selling the magazines from U.K. women’s rights groups that claim they are degrading to women and expose children to oversexualized images."


• The Financial Times reports that Tesco plans to open a London flagship store that will feature its F&F fashion line, the first time the retailer has brought this concept to London.

Tesco operates F&F boutiques inside several supercenters, as well as in standalone stores in Central Europe. It also has franchised F&F outlets in the Middle East.

The story notes that "Tesco has indicated that it is moving away from some categories – including consumer electronics, DIY, car accessories, small domestic appliances and certain toys – in order to devote more space to food, clothing and health and beauty."

Published on: August 5, 2013

• The Charlotte Business Journal reports that Publix Super Markets plans to "expand its presence in North Carolina with stores in Asheville and Cary. This will give the Lakeland, Fla.-based grocer five stores in North Carolina, including three in the Charlotte market."

The Cary store is expected to open late next year. The Asheville unit is scheduled to open in 2015.


• The New York Daily News reports that Aldi has opened its first store on Brooklyn, New York, in Sheepshead Bay. The store is about 10,000 square feet, taking up about half of a former Pathmark site.


• Reuters reports that CVS Caremark has agreed "to pay a $20 million civil penalty to resolve a U.S. Securities and Exchange Commission investigation into 2009 comments and staff securities transactions and its accounting for an acquisition."

The company said that the settlement "will be entered on a "no admit or deny" basis, resolving a number of alleged violations of the Securities Act of 1933 and the Securities Exchange Act of 1934, including some anti-fraud provisions."

Published on: August 5, 2013

• Michael Ansara, who famously played the Klingon Kang in three different "Star Trek" television series, including the original series, as well as playing Cochise on the TV series "Broken Arrow," has passed away at age 91 of complications from Alzheimer's disease.


• John Palmer, the longtime NBC News correspondent who for years served as news anchor on the network's "Today Show" during the halcyon days when Bryant Gumbel and Jane Pauley were the co-hosts, has passed away of pulmonary fibrosis. He was 77.

Published on: August 5, 2013

We've been having a lot of discussion here about minimum wages, living wages, and corporate responsibilities ... which led one MNB user to write:

Minimum Wage is and always has been a form of Income Redistribution.  It is harmful to the economy and our country in so many ways.

It destroys “business models” that all successful companies must work hard and sustain in order to be successful. As soon as business is forced to raise their prices in order to pay for the latest increase in labor costs, their revenue declines due to economic principles of supply & demand and price elasticity.  Intelligent business owners know this and usually lay workers off when pay rates rise…or cut hours…leading to even higher unemployment and less pay.

Entry level positions are just that…entry level, which really should be for High School age and Seniors, primarily.  Both groups in theory, should not require “Living Wages”… High School age workers should still be supported by their family and Seniors have been working all their lives and have something to fall back on.

Seniors will be working these jobs as “supplemental” income, not primary income, which many of them do.

How many of the young people today have not planned their lives very well? Have they started a family before they have earned a “Living Wage” for themselves?

Entry level (low paying jobs) are what this country needs to put the young to work on a part time basis.  One look at the unemployment rates for young Americans (especially Black youth) screams for these jobs…it teaches responsibility and provides a foundation for basic skills needed for higher wages later in life.  Establishing a Minimum Wage at $14 or $15 per hour will insure that even more youth will never have a chance to work an entry level job.

I realize there are exceptions and extenuating circumstances in many lives, but the trend as I see it, is the continued breakdown of the family and results of such to depend on the private sector (filtered by excessive taxation and regulation through a bloated and inefficient government) to bail everyone out…which, in my view the minimum wage as another regulation is trying to accomplish.

A living wage is an earned wage, by working your way up through the system and learning skills that businesses need and will pay more for… once those skills are learned the individual is marketable and will truly be valuable enough to “earn the living wage”.

Really? The minimum wage is responsible for the continued breakdown of the family?

I'm pretty sure I wouldn't go that far.

I'm pretty sure that there are some seniors out there who, in fact, don't have something to fall back on and need more than supplemental income. And young people who, in fact, are vulnerable to exploitation by unscrupulous companies if there were not a minimum wage protecting them. And I'm pretty sure that there are intelligent business owners out there who worry less about cutting hours and maintaining efficiencies and focus more on creating a nurturing, empowering environment that encourages effectiveness. (For these businesses, the minimum wage isn't much of an issue.) And, I'm pretty sure there are some companies out there were there is a far greater focus on how much money senior executives can make than there is on how to fairly reward people on the front lines.

We can have a reasonable and reasoned discussion about the role of a minimum wage and a living wage. Or, we can just say it is the root of all evil and ignore what strikes me as a pretty obvious problem of income disparity.

MNB user Jim DeLuca chimed in:

While it is admirable that Whole Foods limits pay to a range of 19 to 1; the founders/executives who have done a great job building the company also are quite well off from their shares;  John Mackay is listed as owning about 1.1 million shares worth more that $50 million dollars.  Say he earns 5% return, that would be $2.5 million per year in investment income taxed at the lower capital gains tax rate.  So if the starting line cashier earns $12 per hour at 40 hours per week she earns about $24,000.  Pay at 19x would be about $456,000 a year.  Combining that with the stock income makes the pay differential about 125 to 1.  Mondragon, the Basque area of Spain is a cooperative society which limits the range of pay to no more than 9 to 1.   Unemployment in the Basque region is about 8.8% while nationwide Spain outside of the Basque area is about 21%. Now that is Cooperative Capitalism!

I think there is a big difference between salary and stock that is awarded to executives. Salary you get just for showing up. Stock awards are based on achievement.

That said, I do think that companies ought to be a lot more focused on rewarding employees up and down the organization with stock ... it works best when everybody has a piece of the action.

At least, in my opinion.