retail 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: September 12, 2013

    This commentary is available as both text and video; enjoy both or either. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

    Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy.

    Normally I save the book reviews for Friday's OffBeat section, but this week I'm going to make an exception. I just finished reading a nonfiction book about politics and media that in many ways reads like a satirical novel, reported in depth with just enough gossip, and that provides some critical business lessons even for the private sector.

    The book is by New York Times reporter Mark Leibovich, and is entitled "This Town: Two Parties & A Funeral, Plus Plenty Of Valet Parking In America's Gilded Capital." And I recommend that you either pick up a copy or download it - whichever is your pleasure - and read it.

    "This Town" is an incredibly sad and incredibly funny, take-no-prisoners look at the intersection of media and politics in Washington, DC, essentially suggesting that there are few people and institutions in the nation's capital that are looking out for actual citizens. Not elected officials of either party in any branch of government, who generally tend to be more focused on accumulating sustainable power. Not the media, despite being so-called watchdogs, but often about as ferocious as a dog - it may bark and growl from time to time, but rub its belly (or offer it shrimp) and it tends to get awfully compliant. And certainly not the culture that has evolved in Washington, which is all about accumulating and protecting one's power and perquisites. And money. Let's not forget money. There is a black hole where Washington's head and brains ought to be, and there may be no escape.

    "This Town" is not partisan in tone; in fact, once I finished it, my main concern was that Leibovich may never be able to get anyone in either party to talk to him again. Except, of course, that people will always talk about themselves if they think it will do them some good. (Leibovich does not spare himself from criticism ... he concedes that as part of the media establishment living in DC, he is in fact part of the problem. If it is a 12-step process to escape this trap, "This Town" may be good for at least a couple of steps in the right direction, starting with "acknowledge the problem.")

    As I read "This Town," one of the things that kept coming back to me was a statement that a friend once made: "Don't breathe your own exhaust." By that, he meant that people should not become so impressed with themselves and their organizations that they forget about their broader mission, that they forget that whoever they are and whatever they do and however exalted a position they hold, they are serving someone or something, and that servant leadership never is impressed with itself.

    I think that's an important lesson. I think that it is one that needs to be learned not just by politicians and the media, but also by the people who run businesses, no matter what the size or venue.

    It isn't just politicians who often escape the consequences of their actions. There are plenty of top execs who fail royally and then are rewarded with a fat severance check for doing so (and usually go one to get a couple of board seats somewhere).

    "This Town" is a really good book, and you can check it out on here.

    In fact, there's really one problem with it. There are parts of it that will make you want to throw up. Because we may not even have the best government money can buy.

    That's what's on my mind this Thursday morning. As always, I want to hear what is on your mind.

    KC's View:

    Published on: September 12, 2013

    by Kevin Coupe

    Now this is my kind of study.

    Wine Spectator reports that there is a new study from "a team of Spain's top preventive medical practitioners and clinicians" suggesting that "people who drink wine in moderation may actually suffer from lower rates of depression."

    The scientists were prompted to look into the link between wine and depression because, quite simply, statistics show that there are more people drinking wine and more cases of depression. Hence, concerns that they might be linked.

    It took seven years to do the study, and what scientists found was that "moderate alcohol intake, within the range of 5 to 15 grams per day, or roughly one serving, is associated with a 28 percent lower chance of depression. And wine consumption in the range of two to seven glasses per week was associated with a 32 percent lower rate of depression."

    According to the piece, "The Spanish scientists have a few theories for their results. It's possible that people who drink wine enjoy better mental health for unrelated lifestyle reasons. Also, the red wine compound resveratrol is theorized to hold neuroprotective properties."

    To be fair, the story also points out that not everybody agrees with the conclusions. Dr. Harvey Finkel, a hematologist at the Boston University Medical Center, is quoted as saying that "drinking is often a symptom of depression, likely an attempt at self-medication, and drawing a deeper significance from the conflation of the two seems to me untenable."

    But seriously, folks ... there are some people for whom wine - and alcohol in general - contributes to depression. And there are a lot of people for whom wine - especially, in my case, a great Oregon Pinot Noir, or a Spanish Albarino - is a reason to celebrate.

    I'm just glad to be in the latter group.
    KC's View:

    Published on: September 12, 2013

    Reuters reports that US District Judge Ketanji Brown Jackson yesterday refused to stop the US Department of Agriculture (USDA) "from requiring labels on packages of beef, pork, poultry and lamb sold in U.S. stores to include more specific information about the meat's country of origin.

    Country of original Labeling (COOL) regulations were passed by the US Congress in 2002, but only became mandatory in 2012. However, meat packers in the US have fought against COOL, saying it would be expensive and a nightmare to implement. In addition, Reuters writes, "Canada and Mexico are challenging COOL before the World Trade Organization as a U.S. trade barrier. They prevailed in an earlier WTO case against COOL, which led to the revised regulation issued in May and now under dispute."

    While the judge decided against the imposition of a preliminary injunction that would have delayed COOL implementation, the case itself needs to be decided - though likely not until 2015.
    KC's View:
    My position on this has been consistent - I believe in the maximum amount of transparency and clarity possible, and that people have a right know as much about their food as can be reasonably determined. The people and organizations that are against COOL tend to have reasons that strike me as largely economic and logistical - legitimate concerns, but not enough to trump the rights of consumers. besides, if they took the money they are spending to combat COOL and put it into implementation, it might not be a wash, but it might take some of the sting out of the costs.

    Published on: September 12, 2013

    The Sacramento Bee reports that California's Fair Political Practices Commission is investigating the city's mayor, Kevin Johnson, because of "allegations that his solicitation of thousands of dollars in donations from Wal-Mart and a charity funded by the company’s founding family created a conflict of interest in his recent vote to ease regulations of big-box superstores in the city."

    According to the story, the probe will "examine whether Johnson solicited money from the Walton Family Foundation for an education organization he started in order to pay for trips he made last year – and whether those payments resulted in Johnson receiving gifts in excess of state limits.

    "Stand Up for Sacramento Schools paid $22,713 for Johnson to attend education conferences and speaking engagements around the country in 2012, according to the mayor’s statement of economic interest filed with the city. That same year, the Walton Family Foundation donated $500,000 to Stand Up in behest payments arranged by the mayor, according to separate records filed by the mayor’s office."

    The Bee says that Johnson has not commented on the allegations. Walmart and the Walton Family Foundation say that they operate independently, and that any charitable donations would not have been connected to supercenter development. In fact, the foundation donated $158 million to education-related charities last year.
    KC's View:
    Not to prejudge the case, but what a shock it would be to find out that the chief executive of a major American city was on the take, and could be sold - or at least rented - for a few hundred grand.

    And it wouldn't exactly be a shock to find out that maybe Walmart and its family foundation were willing to make sizable and carefully placed donations to people and places that might do it some good. (Speaking of which, when the hell are we going to get a report from the feds on the charges that Walmart greased the wheels of growth in Mexico with well-placed bribes?)

    Published on: September 12, 2013

    The Wall Street Journal reports that "alfalfa samples from a field in Washington are being tested for a genetically modified trait by the state's Department of Agriculture after the farmer who grew the crop said it may have been contaminated with mislabeled seeds."

    The probe comes just months after the US Department of Agriculture (USDA) said that genetically modified wheat that approved for commercial use in the US had been discovered in an Oregon field where it was not supposed to be growing.

    The story says that "with alfalfa - which is used to make hay - the USDA did authorize unrestricted commercial cultivation of genetically modified crops in 2011. Despite that, some domestic feeding operations and foreign buyers continue to require that supplies - which are widely used as feed for livestock - not be genetically engineered."

    Monsanto, which licenses the technology used to make GMO alfalfa, said that "the problem might stem from a difference of opinion about quality specifications between the growing and exporting parties," according to the Journal.
    KC's View:
    Sorry, but I just cannot find it in my heart to trust Monsanto on this. I just think the company's overall goal is to wear down the opposition and genetically engineer everything it can, with as little transparency as possible. I can't help but think that there are going to be a lot of fields with unexplained strains of genetically modified products discovered around the country, and that the folks who depend on GMO development for their living will shrug and say that it is better to ask forgiveness than permission.

    Published on: September 12, 2013

    The reports that Bill Simon, president/CEO of Walmart's U.S. operations, said this week that the retailer plans to build more than 200 new Neighborhood Market stores over the next 18 months; Walmart currently has about 290 of them operating.

    According to the story, "Simon said the returns from its Neighborhood Market stores are approaching Supercenter returns, however he acknowledged the company had to refine its business model for the smaller stores to create operating efficiency. That included smaller assortments, changes to delivery frequency, even changes to its point-of-sale system and adding a district supervisor specifically for the smaller stores, among other things, he noted."

    Internet Retailer reports that Yihaodian, the Chinese online retailer, has expanded into fresh food - starting with fruit, available now, and soon to include fresh meat and vegetables. Making the expansion possible - Walmart, which is Yihaodian's majority shareholder.

    "Wal-Mart’s assistance takes several forms," the story says. "Wal-Mart warehouses store the fresh fruit that Yihaodian sells, though Yihaodian contracts with delivery services that can handle perishable items to deliver orders to consumers. Another important aid is that Wal-Mart, which sells fresh food in its bricks-and-mortar stores in China, hold import licenses for fresh food. Many Chinese prefer imported food items as there have been many press reports about contaminated Chinese food products.

    Among the other things that Yihaodian offers - six fulfillment centers, an SKU count of two million, and same-day delivery in major metropolitan areas. The company says that its traffic is up 1,000 times where it was five years ago, with 10 million visits per day.

    There is, in fact, a lot of upside potential: E-grocery has a one percent market share in China right now.

    Reuters reports that Walmart "is gearing up for a pricing battle" in the toy category during the upcoming end-of-year holiday shopping season. However, the company is not expecting as much discounting in the "hot electronics" segment, which includes the new XBox One by Microsoft and Sony's Playstation 4.

    KC's View:
    Lots of Walmart news ... let's take the stories one by one...

    • Not surprised that Walmart wants to have 500 Neighborhood Markets open basically by the end of 2014. This has been coming for a long time, delayed only by the company being unable to get the ROI it wanted. But now, it is all about location and market share, and finding ways to compete with bricks-and-mortar stores on one end, and on the other.

    • Y'think that maybe Walmart is going to take learnings from China and apply them to its US online business? They'd be foolish not to try, at least where appropriate.

    • Just a hunch, but this theory about low levels of competition in hot electronics could be wishful thinking on Walmart's part.

    Published on: September 12, 2013

    Bloomberg Businessweek reports that McDonald's is testing a mobile payment application in several markets that allows customers to order and pay for their fast food using their smartphones. Ideally, if it works, it will allow McDonald's to target and market to its best customers using the system, as well as helping app users to avoid lines by pre-ordering their food.

    According to the story, the thinking is that as society becomes ever less dependent on actual cash, companies like McDonald's need to find ways to streamline and digitize the process. reports that the built-in fingerprint scanner that is part of the new iPhones announced this week by Apple "significantly streamlines user authentication and has the potential to make Apple a much bigger player in mobile commerce."
    KC's View:
    I hope that Apple has some bigger mobile commerce-related plans in mind for its new iPhones. Because the phones themselves don't exactly seem to be capturing the imagination of the public.

    Published on: September 12, 2013

    ABC News reports that the state of California "is suing Whole Foods, claiming the company that calls itself 'America's healthiest grocery store' is flouting California's pesticide regulations. The California Department of Pesticide Regulation (DPR) says Whole Foods is selling four products containing pesticides that have not been registered with the state, and that the company has resisted efforts to bring it into compliance."

    Whole Foods has not commented on the charges.
    KC's View:

    Published on: September 12, 2013

    • Family Dollar Stores announced that it has hired Jeffrey W. Macak - until recently, the Vice President-Global Supply Chain for Bed Bath & Beyond - to be its new Executive Vice President–Supply Chain.
    KC's View:

    Published on: September 12, 2013

    ...will return.
    KC's View: