business news in context, analysis with attitude

Published on: April 8, 2014

by Michael Sansolo

The forces of change today hit everywhere - from retail to autos to software to board games. And you don’t have to look far to find issues that businesses need to spend time considering.

Let’s start with one of the first business games we all play as children: Monopoly. Truth be told, I’ve never much liked the game. I grew up with a sister who was older, taller, stronger and smarter than me, which meant that Monopoly was simply a disaster. She’d always win big and obnoxiously.

I’m betting my house wasn’t the only place where the game ended with the board, houses and hotels getting kicked.

Yet Monopoly is schooling us again. Hasbro, now the game’s owner, recently made news with the most modern of moves for its aged game. Hasbro was well aware that many Monopoly players have their own house rules, passing through generations and spreading out.

Rather than fight against these rogue rules, Hasbro has embraced them, creating a mechanism for Monopoly players to help codify their house rules and share them with others. It’s an incredible example of a company understanding how the world is changing and racing out front to lead the change.

In a similar vein, it’s time for a rare shout out to Microsoft for a similar move and one that is far more impactful in terms of business. Recently, Microsoft announced it was making the still-dominant Office suite of programs available for tablets. In fact, the programs are available as free apps.

Think about that: rather than cling to the dying notion that desktops and laptops own the future, Microsoft accepted reality and moved with it. Not an easy decision, but if Office has a future, Microsoft just made it more possible.

Sadly, not everyone understands the kinds of creative thinking that today’s world requires. Contrast what Microsoft and Monopoly are doing with the on-going news stories of car dealers fighting the future in New Jersey, Texas, and, no doubt, elsewhere soon.
 
The car dealers are concerned that Tesla sells its vehicles without dealer showrooms, and has been pushing legislation that prohibits the direct sale of cars. Tesla is supposed to be a fabulous ride. In fact, it’s rated the best car in the US by Consumer Reports. Yet Tesla isn’t for everyone. Its price is far too high and, as a fully electric car, its range is somewhat limited.
 
Obviously, what concerns the dealers is simply that you can buy it without a dealership. It’s a concern that the entire retail food industry might want to follow given the growing specter of Amazon.com as a formidable competitor.

Consider the contrasting points of view: Monopoly and Microsoft clearly see the world’s they used to control changing on them. And while it might have taken years in both cases, the two companies seem to recognize the new rules of the road and are looking for ways to get ahead of changes that are happening anyhow. In Microsoft’s case, this shift will certainly impact its business model, yet the company seems to understand this may simply be the new reality of business.

The auto dealers should pay attention. Car buying remains far too complex and confusing, so maybe the Tesla model presents a new path to the future. Maybe we are coming to a time where we buy cars by looking on line, assembling our wish list of options with clear price lists, transparency and no more “meetings with the manager.”
 
Instead of outlawing the future, the car dealers might be thinking about how to win that very same future and how to position themselves to win.
 
After all, no one—not even Hasbro—truly owns a monopoly or Monopoly.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .

Published on: April 8, 2014

by Kevin Coupe

Apparently, Tesco needs to start paying attention to the little things.

Last month, it had to scrap a national marketing campaign in the UK when it was revealed that the milk cows showed in one graphic were actually beef cows that never had been milked.

Now, published reports in the UK say that Tesco has had to dump yet another marketing campaign when it was revealed that salmon labeled as "100 percent Scottish" actually came from Norway.

The Scottish Daily Record writes that "stores across Scotland had been promoting farmed salmon with flags and flyers covered in Saltires, but staff were ordered to tone down the campaign after environmentalists pointed out the fish had been imported as eggs from Norway."

In a delightful bit of understatement, the story says that Tesco executives have been giving staffer "'refresher training' on the importance of accurate advertising."

I'd say. Because companies that don't pay attention to the little things - like being accurate in its advertising - may have bigger troubles. Maybe the senior execs need refresher training, too…

Published on: April 8, 2014

The Washington Post has a story about what it describes as the "nascent" subscription business that seems to be growing around the country, in which stores sell access to curated boxes of product to groups of shoppers.

The story says that "subscribers can choose from boxes of pet food, baby products, fishing tackle, video games, adult toys and even marijuana-smoking accessories. The subscription can cost as little as $10 or top $100 a month for luxury items. The collective value of the products — if you buy them at full price — is often higher than the monthly cost. Subscribers, a vocal and social-media-savvy bunch, have set up blogs and online forums to review the best boxes or swap goodies to fit their tastes."

The Post goes on to point out that "there is little data on this nascent industry, but by some estimates there are 400 to 600 kinds of box services in the United States and even more overseas. Many are start-ups that have yet to turn a profit, industry experts say, though they receive products at a discount or free from companies hoping to be introduced to new customers."

And, it goes on: "Subscribers share tons of personal data to customize their boxes. They also provide retailers valuable feedback on products before they hit store shelves. For retailers nervous about the growing popularity of online shopping, the boxes can be a way to reach consumers who have disappeared from the shopping aisles."

Published on: April 8, 2014

USA Today has a long piece about Chick-fil-A, which is embarking on an urban strategy that is taking it beyond its southern roots, and is "recalibrating its moral and culinary compass."

That means that the company has "fully backed away from … public pronouncements that mix personal opinion on social issues with corporate policy," an approach that gathered it headlines a couple of years ago when CEO Dan Cathy made public comments condemning gay marriage. And, it "has a huge, new product platform behind it. Its biggest-ever new product roll-out will be announced Tuesday: a Millennial-targeting grilled chicken line for which the company has spent the past 12 years testing more than 1,000 grilled chicken recipes and developing such super-secret grilling equipment that executives won't let it be photographed."

These new approaches seem to be working: Chick-fil-A has passed KFC as the nation's biggest fast food chicken purveyor.

Chick-fil-A, the story says, "wants to go from old school to almost cool. It wants to evolve from a place where gays once picketed to a place where they'll feel comfortable going to eat. It wants to broaden the brand as it expands nationally and plows into the Millennial-driven urban arena. Above all: it wants to be a serious player on fast-food's biggest stage."

Perhaps the biggest change at Chick-fil-A has been the ways it has been working to improve "its brand image with trend-setting Millennials. Last month, it announced plans to sell only antibiotic-free chicken within five years. It's testing the removal of high fructose corn syrup from all dressings and sauces and artificial ingredients from its bun. Designers are trying to figure out how to remove fast-food's tell-tale plastic from Chick-fil-A stores — even from its serving trays."

And, the story says, "Chick-fil-A removed yellow dye from its chicken soup late last year." And, it has "just begun testing a line of fruit smoothies made with spinach and carrots."

Published on: April 8, 2014

The New York Times reports that the UK's four biggest supermarket chains all lost share to discounters during the last fiscal quarter, demonstrating that the British economy continues to be troubled even as it recovers - slowly - from the recession.

Tesco, Walmart-owned Asda Group, Sainsbury and Morrisons all lost share to Aldi and Lidl, according to new data from Kantar Worldwide.

The Times reports that "Kantar said Aldi's sales leapt 35.3 percent year-on-year in the 12 weeks to March 30 - its highest ever growth rate, boosting the discounter to a record market share of 4.6 percent. Lidl's sales rose 17.2 percent, taking its share to 3.4 percent."

The story says that "Asda proved the most resilient with a sales fall of 0.5 percent, while Morrisons, which issued a profit warning last month, was the worst performer with a decline of 3.8 percent. Tesco's sales fell 3.0 percent, while sales at Sainsbury's declined 1.7 percent."

Waitrose's sales rose 4.5 percent, Kantar says.

Published on: April 8, 2014

Advocacy group Oceana is out with a new study claiming that "between 20-32 percent of wild-caught seafood imported into the U.S. comes from illegal, unregulated and unreported (IUU) or 'pirate' fishing. Valuing at $1-2 billion annually, this represents between 15-26 percent of the total value of wild-caught seafood imported into the U.S."

"“This study unfortunately confirms what we have long suspected – that seafood from pirate fishing is getting into our markets," says Oceana spokesperson Becky Zisser. "Illegal fishing undercuts honest fishermen and seafood businesses that play by the rules, and the U.S. should not be incentivizing pirate fishers by creating a legal market for their products.

"The solution to this problem is requiring proof of legality and traceability as a condition to import into the U.S., ensuring that all seafood sold in the U.S. is safe, legally caught and honestly labeled. Before seafood crosses our borders and enters our markets, it needs to have documentation that verifies that it was legally caught, and that the fish traveled a transparent path from the fishing vessel to our dinner plates."

Published on: April 8, 2014

• CNBC reports that "after several missteps in its Asian expansion, global retailing giant Wal-Mart is taking a slow and careful approach, with expansion plans primarily aimed only at its three current regional markets."

Scott Price, president and CEO for Asia at Walmart, tells CNBC that Japan, China and India – account for around 60 percent of Asia's population, and that while the company continues to look for opportunities in other Asian markets, "we are pragmatic and we will move carefully."

Published on: April 8, 2014

• In Texas, the Athens Review reports that Brookshire Brothers has acquired the assets of David's Supermarkets, including 25 stores.

According to the story, "Of the 25 stores, nine will fly the David's Supermarkets or David's Express banners, one will remain Pecan Foods and 15, including one recently opened in Meridian, will be Brookshire Brothers."

Published on: April 8, 2014

• The National Association of Convenience Stores (NACS) announced that it has hired Jennifer Lipner, formerly the senior managing editor at the American Society of Interior Designers (ASID), to be its director of digital content, a new position at the trade association.

Published on: April 8, 2014

…will return.

Published on: April 8, 2014

• In the NCAA men's championship basketball game last night, the University of Connecticut Huskies defeated the University of Kentucky Wildcats 60-54, winning its second national title in four years.

• Tonight, in the NCAA women's championship basketball game, two undefeated teams - the University of Connecticut and Notre Dame - will face off.