business news in context, analysis with attitude

Published on: April 1, 2014

Late News from the MNB News Wires….

• WASHINGTON, DC - The Obama administration early this morning, having largely closed the books on the first sign up period for the national health insurance plan known as Obamacare, announced a joint effort between the US Department of Agriculture (USDA) and the Federal Communications Commission (FCC) on a new initiative designed to deliver Supplemental Nutrition Assistance Program (SNAP) benefits to people in need of what used to be called food stamps.

Beginning in January 2015, the White House said, US citizens qualifying for SNAP benefits will be issued recycled iPhone 4S smartphones. Dubbed "Obamafones," with a picture of the White House and an American flag emblazoned underneath the Apple logo, the smartphones will be automatically loaded with the benefits each month.

And, the White House said, foods allowed to be purchased using the SNAP benefits will be highly restricted, limited to just fruits, vegetables, whole grains and small portions of protein. In a twist, First Lady Michelle Obama said that the Obamafones will be programmed to track how much exercise the owner is getting, and if he or she gets enough exercise, small portions of dessert will be allowed to be bought using federal benefits.


PARIS - The French government voted yesterday to invest in technology that would literally shut down internet access throughout the country from 9 pm to 6 am every weekday and all day Sundays, saying that it was a logical approach to protecting small and even irrelevant businesses from falling prey to competition from online retailers such as Amazon.

It was a little over a year ago that the French Senate voted unanimously to curb discounts by Amazon.com Inc. and other online retailers, seeking to support local bookstores, blocking online stores from offering free shipping on top of a 5 percent maximum discount on books.

"We are tired of these multinational companies coming in here and trying to destroy the world's greatest culture," said Antoine LeCirque, the French cultural preservation minister. "We will do what we have to do to preserve what we have, even if that means shutting our eyes to 21st century realities. It is bad enough that most people get their knowledge of France from Liam Neeson movies and Dan Brown books, and it is time for us to act.

Asked what message this would send to the rest of the world, LeCirque said, "It is simple. I don't want to talk to you no more, you empty headed animal food trough wiper. I fart in your general direction. Your mother was a hamster and your father smelt of elderberries."


MOSCOW - Vladimir Putin yesterday looked to put his annexation of Crimea into a business context that he said that most of the world could understand - he compared Russia to Amazon, and himself to Jeff Bezos.

"Think about it," he said through an interpreter. "We have similar haircuts, though I have a much better body. Neither of us recognizes traditional borders. We both believe in the power of disruption. People, except at the uppermost levels of the organization, have trouble working for either of us for very long. And finally, when people challenge our decisions and activities by saying we are not doing things the way we are supposed to, both Bezos and I simply shrug and say, 'I do not give govno'."

Finally, Putin said, winking at the reporters whom he called in for a press conference but never allowed to ask any questions, "There is another way we are alike. For Russia, just like Amazon, today is Day One."

Published on: April 1, 2014

by Kevin Coupe

Mashable reports on a new study from Pew Research saying that "out of the 64% of American adults who use Facebook, nearly half (30%) use the social network to keep up with news."

That's significantly more than on other social media platforms. The story says that "on YouTube, 10% of U.S. adults use the video platform to get news, while only 8% look for news on Twitter."

"While these percentages, compared to each social network's overall user base, are impressive," Mashable correctly points out, "they're still small portions of the U.S. adult population. Still, as digital and social media evolves, we can expect social news consumption to advance alongside it."

Just as we can all expect these platforms to play increasingly influential roles in how business is conducted, how companies interact with consumers, and how shoppers interact with each other to influence behavior and create trends.

This can happen in a lot of different ways.

Take, for example, the case of Mozilla, maker of the Firefox web browser. The company named Brendan Eich to be its president last week … a move that has generated a lot of debate because of revelations that six years ago, Eich donated $1,000 to a campaign that supported a legal ban on gay marriage in California. Eich has gone out of his way to separate his personal views from those of his employer, and has pledged to maintaining a supportive and inclusive workplace. But this has not stopped some employees from publicly complaining about his views via social media, and the company has lost three members of its board of directors (though it downplays the connection to Eich's views).

The Times writes that on Monday, "OKCupid, an online dating site, made it difficult for people using Mozilla Firefox to access its service, stating unequivocally that this decision was a result of Mr. Eich being an 'opponent of equal rights for gay couples'."

It is hard to know how this will all turn out. Eich has a right to bis opinion, as do his employees. At least one of the questions that needs to be answered is whether differing views on same-sex marriage are enough to disrupt the workplace in untenable ways.

But the broader point is the degree to which social media continues to make inroads in shaping opinion, informing citizens, and serving as a tactic in ongoing culture wars.

It all is an Eye-Opener.

Published on: April 1, 2014

There is an interest piece in CIO about the critical role that information technology can play in companies' ability to compete, and how business leaders need to be cognizant about how advances in this area can reshape the competitive landscape.

An example cited in the story: FedEx, where CEO/founder Fred Smith, when "quizzed about the possibility of Amazon.com competing with his enormous transportation network by using drones to deliver packages … dismissed the idea as 'almost amusing'."

Indeed, Smith has - at least publicly - been rather dismissive about suggestions that companies such as Amazon might be able to disintermediate shipping firms. His premise seems to be that companies like FedEx and UPS have an expertise that retailers do not have, and that developing this kind of capacity would be expensive, time-intensive and problematic.

However, CIO notes that "despite the FedEx CEO's amusement at the thought of Amazon as a future rival, e-commerce companies are camped much closer to the customer front lines than delivery firms."

R "Ray" Wang of Constellation Research tells CIO, "This is about trying to anticipate demand as close as you can to the purchase cycle. If you shape the demand, which Amazon does, you know exactly what the reality is."

Published on: April 1, 2014

There are a couple of stories this morning that suggest the degree to which fresh fruits and vegetables are taking new routes to get to stores and consumers…

The Danbury News Times reports on how "farm-to-fridge delivery services are the newest concept in online grocery delivery, bringing farm fresh products to your doorstep without your having to change out of your pajamas.

"Think farmer's market meets Peapod.

"Benefiting farmers and customers alike, these companies give small-time farmers another outlet to sell their goods and put farmers' products in the hands of those who wouldn't otherwise make the drive to the farms themselves."

One example: "Graze … was developed in 2010 by Julianna Doherty, of Vermont along with Christy Colasurdo, of Westport. Between produce, meat, dairy and cheese, Graze works with upwards of 35 to 40 farms in Vermont … Starting with 30 weekly customers in Fairfield County in 2010, Graze has expanded to include Metro West communities of Boston, Vermont, and Westchester a weekly base of 450 to 500 customers per week."

Meanwhile, Crain's New York Business has a story about a Whole Foods in Brooklyn that has leased rooftop space to Gotham Greens, which is "not only running the first greenhouse on top of a supermarket, but the company also asserts that it has the only commercial rooftop greenhouse in the entire country. It is also the fastest-growing greenhouse company in the city using hydroponics instead of soil to grow crops. It harvested its first tomatoes, lettuces, basil, bok choy and kale a couple of weeks ago."

The story goes on to say that "the Brooklyn-based urban farmer is taking the locavore movement to a new level by growing produce year-round like competitors in California, where New York gets a big chunk of its produce. Local farmers are quick to point out that a typical shipment from the West is already a week old by the time it hits store shelves in New York … Gotham Greens' customers include FreshDirect, D'Agostino, Dean & DeLuca, Key Food and Westside Market." And, the company says, it has been profitable since day one.

Published on: April 1, 2014

This has nothing to do with business, but for those of us who believe that life begins on Opening Day, Mike Barnicle has a column in the Daily Beast about how this is time of year to retrieve your old baseball glove, an object that's "got a soul, a memory all its own, and a future that never fades because it has never let go of the grasp the past has on you and so many others."

An excerpt:

"Go ahead. Put it on your hand. Wear it. Punch the pocket. Flip a ball in the air. Catch it. Shut your eyes and watch the years roll off like shingles from a roof battered by the winds of winter’s last assault. Wait a minute and the glove, your glove, will unwind the decades between a moment when your waist was smaller than your sleeve length and life’s small ambushes had not yet altered your game plan.

That’s one of the great gifts of this, the greatest of all games, baseball: it allows you, still, to lose yourself in a dream, to feel and remember a season of life when summer never seemed to die and the assault of cynicism hadn’t begun to batter optimism."

You can read the whole paean here.

Published on: April 1, 2014

• We should all have such problems.

The Chicago Sun Times reports that Kraft's Macaroni & Cheese, a product that drives more than $500 million in annual sales, has seen its market share drop from 82 percent three years ago to 78 percent in March.

The problem, according to the story, is that while the product is "a favorite among picky young kids, cash-strapped college students and adults wanting a comfort food," the brand is taking a hit "as people hunt for healthier versions."


• Whole Foods said yesterday that it has acquired four stores from New Frontiers Natural Marketplace, located in Flagstaff, Prescott and Sedona, Ariz.; and San Luis Obispo, Calif.

According to the announcement, "The two companies expect the transaction to be finalized in the next few weeks.  The stores will continue to operate under the New Frontiers Natural Marketplace banner until they are re-signed as Whole Foods Market stores."


• Reuters reports that Amazon's German operations are dealing with a strike by between 300 and 500 (depending on who you believe) out of 1,200 Leipzig distribution center employees, described as "the first stoppage this year in a pay dispute that has dragged on for months."

The story notes that the union "wants Amazon to raise pay for workers at its German distribution centers in accordance with collective bargaining agreements for the mail order and retail industry. Amazon, however, has rejected the demand, arguing that it regards warehouse staff as logistics workers and says they receive above-average pay by the standards of that industry."


• Delhaize Group announced this morning that it has signed an agreement with Tropic Group B.V. to sell it all of Delhaize's 39 Bosnian & Herzegovinian stores.

Terms of the deal were not disclosed. It is expected to close in the third quarter, pending regulatory approvals.

Published on: April 1, 2014

• Macy's said yesterday that Jeffrey Gennette, the company's chief merchandising officer, has been promoted to the role of president. Terry J. Lundgren, who has held four titles at the retailer including "president," remains as chairman/CEO/chief customer officer.

While the move is seen as being a signal about succession plans at Macy's, Lundgren tells the New York Times that he has no intention of retiring anytime soon.

Published on: April 1, 2014

Michael Sansolo is on assignment. "Sansolo Speaks" will return next week.

Published on: April 1, 2014

Responding to yesterday's story about how Walmart is working on solving its out-of-stocks problem, including the adding of labor hours, a move that is contrary to recent trends, one MNB user wrote:

As a lifelong retailer I can't believe that they will be able to actually add labor hours. It is exactly what has to happen though, in order for them to differentiate themselves from everyone else. I have managed a Dollar General, Kmart, Target and now work for a specialty retailer. It has been my experience that there is only as much "pie" to go around as the bean counters say and that if one area gets more then someone else suffers.

Were Walmart to actually add staffing, many of their consumer issues- like no help to be found, long lines, etc., would be addressed and solved to an extent. The problem lies with the detached shareholders and the senior management that are beholden to them. The shareholders will not want to lose one penny and so will fight this initiative if it does not produce instant measurable (read profitable) results.

Large scale retailers are no longer serving their customers or employees anymore. They serve the shareholder and I don't think that the shareholder either works or shops there….




We also had a story the other day about a Walmart online video celebrating the value of work, which led another MNB reader to write:

You are correct that this is a beautiful, inspiring video that highlights the commitment and dedication of individuals and shines a light on the struggle some people face each day simply trying to live. Unfortunately it is only a slick marketing tool and not the reality of Wal-Mart.  On average, it costs the US taxpayer $6,000 per Wal-Mart employee in subsidies for economic assistance. That is almost one million dollars in subsidies per store. If Wal-Mart were really committed to the American worker, maybe they could pay a living wage and save the videos for the lunchroom.




On another subject, a note from MNB reader Rich Heiland:

Am I getting senile or have I been reading about management problems, customer complaints and serious issues at Toys-R-Us for what? 15 years? I am amazed they are still around.

I'm not sure they are quite to the dead-company-walking stage. But close.




Regarding my piece about baseball the other day, an MNB reader wrote:

The Old Ball game ain't what it used to be!

Spring training (was) still going on and the Dodgers are 2-0.

What happened to opening of the season always being in Cincinnati? It was a great tradition and one that I miss a lot and I don't even live in Cincinnati!

I vote Bud Selig as worst Commissioner in baseball history!

He is another leader who knows the price of everything and the value of nothing!

Published on: April 1, 2014

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Published on: April 1, 2014

Cornell University Food Executive Program

July 13-18, 2014 … Ithaca, New York

Celebrating 50 Years of Excellence in Food Industry Executive Education.

Who Should Attend?
Retailers, Wholesalers, CPG Suppliers, Service Providers. The program prepares middle- and upper-level executives for their next promotion and beyond, and is well-suited for high-potential leaders being prepared for broader general management responsibility.

“The Cornell Food Executive Program will not only be a great learning experience, you will also develop industry relationships that will last throughout your career.”  - Ed Crenshaw, CEO, Publix Supermarkets, Inc.

For more information and to apply online, click here.

Published on: April 1, 2014

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It's time to get to work.

Published on: April 1, 2014

Published on: April 1, 2014