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    Published on: November 1, 2013

    by Kevin Coupe

    There was a story the other day in Variety that got me thinking about the whole issue of consumer control … and how businesses simply have to accept the fact that the balance of power has forever shifted and is flowing inexorably to the shopper.

    The story had to do with how cable provider Comcast is testing a trial offer of HBO as something called 'Internet Plus," essentially offering a subscription to the premium cable channel across all platforms on cable television and the internet, to people who want to pay for it a la carte, and don't want to pay for other cable channels such as Fox News, MSNBC, A&E or ESPN.

    Indeed, the decision comes as HBO has to deal with the reality that Netflix now has more subscribers than it does … and cable companies have to deal with the fact that people have more alternatives than ever for viewing traditional programming in non-traditional ways.

    While "bundling" has long been the approach for cable marketers - it seems like the more channels and services they offer, the more economical it is, and heaven help you if you only want one HBO channel, or one sports network, or one cable news channel - it seems to me that we're moving inevitability toward the time when this just isn;t going to be the case anymore. Consumers won't accept it. We want what we want, when we want it, how we want it, at a price that we think is acceptable. And while there will be conventional wisdom suggesting that this won't work economically, it probably is more accurate to say that it hasn't worked economically … but that doesn't mean it cannot. And won't.

    The broader message, I think, is that even as consumers demand control, they want the kind of actionable information that can allow them to exercise that control responsibly.

    Which is what businesses - in all venues - have to work to provide. Provide the shopper with the levers of power, and transparency of information so they know how to use them.
    KC's View:

    Published on: November 1, 2013

    The Washington Post reports that in a study sponsored by LinkedIn and Citi, "79 percent of men equate 'having it all' with being in a 'strong, loving marriage' while just 66 percent of women think the same. Men include children in their definition of success far more than women do, with 86 percent saying it’s part of the 'having it all' ideal versus just 73 percent of women. And both men and women value work-life balance in fairly equal numbers—with a few more men (50 percent) than women (48 percent) calling it a major concern."
    KC's View:
    News flash! You can't "have it all."

    And if men think so, they're also more delusional than women.

    Not to put men down. It's just that we tend to evolve - or marinate - more slowly than women. So we're just now getting to the point where we are accepting the notion that we need to be more than hunters and gatherers … we also have parental responsibilities, and have to be nurturers.

    Women have been dealing with whole "having it all" question for a lot longer, and I think most have accepted the idea that it isn't really possible … that you do the best you can, you play the cards you're dealt, and you find out that if you stop whining about having it all, you actually have more time and energy to accomplish more on both professional and personal fronts.

    (But "all"? Forget about it. Almost nobody gets to have it all. I am reminded of the scene in Broadcast News when William Hurt's Tom Grunnick says to Albert Brooks' Aaron Altman, "What do you do when your real life exceeds your dreams?" And Altman responds: "Keep it to yourself.")

    Maybe guys just haven't gotten there yet. We're finding out that there is a bigger world than we thought there was, and we're deluding ourselves into thinking that we can have it all.

    It is healthy thing, I think, that men start to expand their roles and expectations. Now, all we have to do is make sure that we don't whine about how hard it is to have to all. We just have to make our choices, set our priorities, say what we'll do and then do what we say, and live with the results instead of complaining.

    Published on: November 1, 2013

    USA Today has a piece about Amazon CEO/founder Jeff Bezos, noting that as the company matures, critics are wondering when the company "will shift tactics and attempt to turn a real profit."

    These critics should stop, the story says, "and recognize that Bezos knows exactly what he's doing. He is not running a shareholder-owned charity. It's quite the opposite. His indifference to profits today reflects his deep understanding of how retailers maximize income in the long run.

    "Here's what Bezos knows: High margins are hard to maintain for any company. For a retailer, they are nearly impossible. Competition drives them into the ground, and the low-cost provider always wins. That's how capitalism works. Look at the most profitable retailers in the world -- they all have razor-slim margins. Wal-Mart's net income margin was 3.6% last year and Costco's was less than 2%. Compare this to the S&P 500 average of nearly 9%. Retail just isn't a high-margin business.

    "In any commodity-type business that is destined for low margins, there is only one way to increase the total dollar amount of net income: Grow revenue. Forget increasing margins beyond anything but a trivial amount. It's not going to happen. Size should basically become the sole focus."
    KC's View:
    There's no question that Amazon is making a market share play … and I suppose that it is fair to say that at some point, Amazon could go a bridge too far.

    That said, it long has been the argument here that retailers get into trouble when Wall Street becomes more important than Main Street. At Amazon, they seem to be ignoring the metrics that normally satisfy Wall Street, and are being rewarded for it. Which could mean that Wall Street is getting more enlightened, but also could mean that the whole thing is a house of cards that could collapse at some point.

    I don't believe that. I think that Amazon reflects a deeper cultural and technological change, with roots that will be hard to ignore in the long-term.

    Published on: November 1, 2013

    The Chicago Sun Times reports that "Kraft says it plans to remove artificial dyes from three macaroni and cheese varieties that come in kid-friendly shapes, a move that comes as people increasingly reach for foods they feel are natural. The company says that the the change won't affect the taste.

    According to the story, Kraft also says that "the revamped recipes aren’t a response to a petition on Change.org that asked it to remove artificial dyes from its famous macaroni and cheese kits. That petition, which was posted in March, had more than 348,000 signatures on Thursday."
    KC's View:
    I love it when companies make significant changes, and then say that they were not affected by the grass roots efforts - often via social media - that called for these precise changes.

    I love it. But I don't believe it. Not for a moment.

    I actually think that Kraft would be a lot smarter to say, "Consumers talked. We listened. They made a good case. So we made a change." Rather than deny that they were influenced, they ought to say thank you … because it meant that some consumers were so invested in the brand that they were willing to make their voices heard.

    Where I come from, that's a good thing.

    Published on: November 1, 2013

    Crain's Chicago Business reports that Safeway has informed its Chicago-area employees that any Dominick's stores that have not been sold by December 28 will be closed. The letter was sent, the company said, in accordance with federal labor law.

    Safeway recently announced that it will sell the Dominick's chain that it acquired in 1998 for $1.2 billion. The disposition of the stores is expected to be piecemeal, with a number of competitors - possibly including Roundy's, Albertsons, Kroger and Sunset Foods - expected to pick up a few stores each.
    KC's View:

    Published on: November 1, 2013

    Reuters reports that Walmart is kicking off its online 2013 holiday promotional calendar today, before customers "have even digested their Halloween candy."

    The story says that the kickoff comes a month earlier than usual, "underscoring worries that intense discounting aimed at luring budget-conscious shoppers could result in the most tepid holiday spending rise in four years … Some analysts say the holiday season, which typically accounts for the lions' share of most retailers' annual revenue, will be the most heavily discounted in years as competition for shrinking budgets ramps up."

    Part of the problem is the calendar - Thanksgiving falls late, on November 28, and that means there are six fewer shopping days between Thanksgiving and Christmas, "prompting many retailers to jump the gun on incentives."
    KC's View:

    Published on: November 1, 2013

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

    • The Seattle Times reports that supermarket employees of four major chains in Washington State - Albertsons, Fred Meyer, QFC and Safeway - have overwhelmingly approved a new three—year contract.

    The United Food and Commercial Workers (UFCW) said in a prepared statement that "it beat back efforts to cut health benefits and holiday pay, freeze wages and eliminate a guarantee that entry-level workers make at least 10 cents above minimum wage. The deal also secures workers’ pensions and provides modest wage increases, including a ratification bonus," the union said.


    Bloomberg has a story about how "food-stamp spending reached a record $78.4 billion in the fiscal year that ended Sept. 30, due in part to a temporary boost in benefits passed as part of the 2009 economic stimulus that expires today. Lawmakers battling over U.S. farm and budget policy are looking to cut deeper by tightening eligibility rules that could drop as many as 3 million people from the program.

    "With an estimated 8 percent of shoppers using food stamps, the impact will probably be felt most acutely by discount retailers such as Dollar General Corp. (DG), Family Dollar Stores Inc. (FDO) and Wal-Mart, said Bryan Gildenberg, chief knowledge officer of Kantar Retail."


    • New York City lawmakers have enacted legislation raising the legal age for purchasing tobacco products - including e-cigarettes - from 18 to 21, the highest in the country.

    The New York Times writes that "the proposal provoked some protest among people who pointed out that New Yorkers under 21 can drive, vote and fight in wars, and should be considered mature enough to decide whether to buy cigarettes. But the Bloomberg administration’s argument — that raising the age to buy cigarettes would discourage people from becoming addicted in the first place — won the day."

    The change will take effect in about six months.

    You will not find a more anti-tobacco person than I. I have long said here that I think there is a special circle of hell reserved for tobacco company executives, who lied for profit, and have been honest about at least one of the reasons for my disdain - my mother died of lung cancer after four decades of smoking. She bears responsibility for that, but there is plenty of blame to go around.

    But I'm not sure I agree with the NYC age increase. I wish nobody would smoke, and I am thrilled with all the anti-smoking laws that have been enacted that make the world cleaner and safer for non-smokers. But it also is true that we can send 18 year olds off to war, and we want them to vote, and we allow them to drive. If we allow them to take on these responsibilities, we also need to empower them to make even bad choices.
    KC's View:

    Published on: November 1, 2013

    Remember ... this weekend marks the end of Daylight Savings Time. On Sunday, November 3, at 2 am, it will be time to turn your clocks back an hour. Assuming, of course, you have clocks that require manual adjustment…
    KC's View:

    Published on: November 1, 2013

    Yesterday, MNB took note of a Wall Street Journal report that Kroger CEO Dave Dillon told investors that he believes that most Americans won't turn to the internet to buy their groceries.

    “I understand some people like that … but there’s still a large percentage of customers that like to get out and have that interaction with friends and neighbors in their community as they walk through the store,” Dillon said, adding, “I wouldn’t be too quick to assume that the leap to home delivery ends up replacing everything."

    Which prompted MNB user Ray Heyob to write:

    I've enjoyed your newsletter over the years KC.  I led P&G's re-entry to eCommerce starting eight years ago, and worked extensively on our global capabilities and strategies.  As you know, Tesco UK has presented a strong RTB for grocery eCommerce.  While not as compelling domestically, it's a when and not an if.

    I would tell Dave Dillon that grocery eCom won't replace the trip to the store, but will make it a heckuva lot more enjoyable.  If most all my family's shelf-stable items would be ready for pickup (after an exceptionally easy order process), my 90 minute visit would now take 45.  In that less time I'd select my produce and perishables.  More importantly, I would then be able to take that extra time for more "relaxed" shopping.  I would buy more, save time, and feel better about it.

    They need to create a compelling cross-channel experience.  To do it now will keep them from playing catchup after Walmart (maybe Target) figure it out.


    MNB user Don Skiver wrote:

    Had to write, as I have on other occasions to you KC.  I like shopping, as Mr Dillon states, “to get out and have that interaction with friends and neighbors in their community as they walk through the store”.  I don’t want someone picking out my steaks, or my bananas, or how will they come across a new product and know I want to try it out.  I also don’t like ordering something online and then having to wait to have it delivered.  Many nights I decide what I am going to make for dinner by taking a stroll through the market and what might be on sale or catches my eye is the deciding factor.  Don’t get me wrong, I go online all the time, and do buy things online, but I like going to the store and shopping (at the market) strolling through a mall or big box is another story, that becomes a chore to me.

    I see everyone (including you) talk about the future is online, yes it may be, but what percent is it now, according to the US Census Bureau News “E-commerce sales in the second quarter of 2013 accounted for 5.3 percent of total sales.”  I think we should still pay attention to the other 95% . . .


    From another reader:

    I am retired and 70. With that said I am in agreement with Kroger, but not completely. In agreement with Kroger folks on everything produce (we are Vegan) or that needs refrigeration. Living in Boise, we have no opportunity for grocery delivery anyway. On most grocery items that I would buy on line I must report that the prices have never been even close to the grocery store and I have checked these prices out. I do buy special products on line that are not available in grocery stores but they are all shelf stable and unavailable except on line.

    And another:

    I agree e-commerce is important.  However;  I’m not sure I’d want to buy fresh fruits, veggies and meat on-line tho.   I enjoy picking those things out myself – I’d be afraid that the store would unload a percentage of “not so great” items to on-line customers.   I can see buying other staples on line.  Bread, Milk, canned goods, boxed goods, frozen foods etc…   I don’t think I would  get the best selections of fresh foods unless I picked them out myself.

    I personally do not go to the grocery store to socialize.   So, I disagree with Dillon on this comment “large percentage of customers that like to get out and have that interaction with friends and neighbors in their community as they walk through the store.”   I rarely see people I know at the store .   Grocery stores are large and cover a large demographic area these days.  The days of the mom and pop neighborhood grocery experience is dying.  (or dead)  -  I’d take home delivery of my on-line purchase!


    To be continued, I'm sure…




    Yesterday, in writing about the Red Sox World Series victory, I quoted (as I often do) the great Robert B. Parker, who once said that "Baseball is the most important thing that doesn't matter."

    To which one MNB user responded:

    Ah, but it does matter. The scores are dutifully posted on morningnewsbeat.com regularly. It matters.

    The sound of a city hit by tragedy once again living out the spirit of a great win. It matters.

    Would it have mattered to the vast majority who won? No, not likely. Yet, it mattered that it was played.

    It mattered that George W. Bush walked to the mound and threw out the first pitch after 9/11 at Yankee Stadium. It meant that we could go on. Baseball could be played and it mattered. On that night, there was not a Republican or a Democrat. There was not a liberal or a conservative. There was us. That mattered.

    It is woven into America. It matters.

    For the son or daughter attending their first game; a memory for a lifetime. It matters. I recall Tiger Stadium in 1968 with my Dad. That matters.

    It is the soundtrack in the background on a warm summer day. There would be a vacancy without it. It matters.

    It is, yes, just a game. The team that wins or loses fades into time and is recalled again. There are memories and imagination of what was and what might of have been. Its conversation goes on through time. It matters.

    In these words, from a movie you will know, state it best, "But baseball has marked the time. This field, this game: it's a part of our past, Ray. It reminds of us of all that once was good and it could be again."

    It is part of our past and it is deeply part of our hope for the future. That is proven each spring by the sound of the first hit coming off the bat at little league games all across the land.

    Important. It matters.

    Until the sun breaks warm and the snow melts from sight, I'll long for that soundtrack to resume in the background once again. Hope.

    It matters.


    Fair enough. And damned poetic, by the way.

    Unfortunately, RPB isn't here to explain his statement, but let me take a crack at it.

    I think he'd probably say - and I'd agree - that what really matters is being a good parent. Raising happy, fulfilled, responsible children. Being a good citizen, working hard, contributing to society, trying to leave the world a better place than we found it.

    Baseball, of course, matters because it is one of the ways in which we teach our kids about the importance of team play and individual achievement, and because it exists within and because of rules, and it serves as a metaphor for so much in life and work.

    But I think RBP was arguing that there is a "matters" scale. On that scale, it ranks below other, far more fundamental things. And therefore, it is important, but doesn't really matter.

    But maybe this is a distinction without a difference.
    KC's View:

    Published on: November 1, 2013

    In Thursday Night Football action, the Miami Dolphins defeated the Cincinnati Bengals 22-20.
    KC's View:

    Published on: November 1, 2013

    First of all, I want to thank the folks at the newly merged Maine Grocers Association and Maine Food Processors Alliance, who gave me the opportunity to speak this week at the annual "Maine Food Means Business" Summit … it was a great time, and it is hard to find nicer people than Maine residents. Plus, they are real foodies …. committed to local, quality foods that they fervently believe makes their state special. I had a blast.

    Plus, the conference was in Freeport, Maine, and I got to shop at the original LL Bean store … drink Red Claws Ale at Gritty McDuff's … and eat lobster rolls at Linda Bean's Maine Kitchen & Topside Tavern (where I had the pleasure of spending time chatting with Linda, a granddaughter of Leon Leonwood Bean and a successful businesswoman with a real passion for Maine foods).

    A great week.




    The author George Pelecanos is out with a new novel, "The Double," the second in a series of books about Spero Lucas, a Washington, DC-based private investigator and former Marine and Iraq war veteran who made his first appearance in 2011's "The Cut." And once again, it is a winner - Lucas finds himself handling two cases at once, one of which leads him into a violent confrontation with a sociopath who likes to prey on women both financially and physically. At the same time, he finds himself becoming obsessed with a married woman with whom he is having an intense affair that makes him reflect on his upbringing and priorities. This all takes place against the background of urban DC - not the seat of government, but a diverse and sometimes violent community with a seamy underbelly. (Though, to be sure, there is no shortage of seaminess in the halls of government…)

    Pelecanos is a terrific writer - I've been a fan of his since "The Night Gardener" in 2006 - and "The Double" is so good that as soon as it was over I started wondering when the next Lucas book will be out.

    Not soon enough.




    For my drive to and from Maine this week, I downloaded and listened to "Still Foolin' 'Em: Where I've Been, Where I'm Going, and Where the Hell Are My Keys?," the new memoir by comedian Billy Crystal. I'm not a big celebrity memoir guy, and I don't listen to a lot of audio books, but I'd read somewhere that this one was different because Crystal had recorded the audio and done much of it in front of an audience, which made the comedy work better.

    So I listened to the eight-plus hours, and I found it to be an agreeable way to pass the time … very funny, filled with anecdotes and canny observations about growing older, and also with great stories about the making of movies such as City Slickers and When Harry Met Sally. Mostly, it made me want to go see "700 Sundays," the one-man show with Crystal that is returning to Broadway this fall.





    Two wines to recommend this week:

    • the 2011 Licia Albarino, from Spain, which I enjoyed the other day at Bin 36 in Chicago, which manages to be both elegant and yummy, a delightful example of my favorite white wine.

    • the 2008 Aster Crianza, also from Spain, a Tempranillo that is full-bodied and delicious, especially with spicy food.




    That's it for this week. Have a great weekend … enjoy the extra hour's sleep … and we'll see you on Monday.

    Slàinte!
    KC's View:

    Published on: November 1, 2013

    Did you know that Stevia is becoming the preferred zero calorie sweetener of conventional shoppers as Sucralose (-13.5%), Saccharin (-10.7%), and Aspartame (-10.9%) continue to decline in sales? Stevia is up 8.9% in the conventional channel and if the sales trend of the past 3 years continues, Stevia sweeteners are projected to sell $100M in 2013. That’s 15% growth over 2012’s sales.

    Wholesome Sweeteners is the #1 Organic Stevia Brand in both conventional and natural channels. What’s even better is Organic Stevia had been driving double and triple digit growth for the past 3 years while non-organic stevia’s growth is slowing.

    Is Wholesome Sweeteners Organic Stevia in your sweetener aisle? Call or email us to add it to your planograms today. 1-800-680-1896 or email CS@OrganicSugars.biz.

    Source: SPINS, Latest 24 weeks ending 07-06-2013

    KC's View:

    Published on: November 1, 2013

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    KC's View: