business news in context, analysis with attitude

Published on: September 16, 2014

by Michael Sansolo

Here’s some bad news for you: without doing anything wrong, you managed to lose ground while sleeping last night. When you went to bed you were a little smarter than you were when you woke up.

I know that sounds ridiculous, but that’s what the new world is like. In our hyper-connected world, we are all drowning in information, with more and more coming at us every day. We can only take in so much, so the percentage daily gets smaller as the pool of knowledge gets larger.

So every day, no matter how hard we try, we get a little dumber. Good morning!

Last Thursday, Kevin ran an interesting piece here on MNB about the challenges of this new world. We see it when we turn to a teen or 20-something to help us with an app or when we witness a company as good as Hershey designing a logo derided as resembling poop.

In so many ways we have to run faster than ever just to keep up.

But … that isn’t always a negative.

First, this is nothing new. The notion of the world getting bigger and smarter and forcing all of us to race forward has probably been part of the human condition since the Gutenberg Bible. One has to imagine that generation after generation has marveled at the changes in the world and puzzled at how to keep up. It just seems to happen faster today.

Second, running faster is exactly the key to any successful business and provides you with endless opportunities. Today, your customers also got up a little dumber, relatively speaking, than they were yesterday. They need more guidance and help then ever because there are so many more things to think about.

If you can help them run faster, they’ll become more linked and loyal to you. How great is that? In a world of increasing questions, you can make strides by providing more answers, by helping to simplify an increasingly complex world.

Of course, to do that you need to find a way of running faster or at least smarter. An incredible example of how to do this comes from an app called Waze that shows the power of technology and crowd sourcing together.

My car has a built in GPS, so I had never encountered Waze until my son - a 20-something, of course - dazzled me. Waze makes my GPS look pedestrian by simplifying driving complexities like nothing I’ve ever seen.

Waze’s wisdom comes from gathering knowledge from its users. Waze doesn’t only give you the shortest route, it gives you the best and easiest route. For instance, a GPS might tell you to turn left at the third street without knowing that it’s a death-defying turn without a traffic light. Waze won’t make that mistake because users have provided insights and a better alternative.

Any GPS can tell you about a red-light camera; Waze asks users to confirm the camera is still there. Waze can tell you about a delay caused by a dead animal on the road or by tracking how fast Waze users are traveling on a specific road it can give traffic reports.

That’s technology that works because it makes the world simpler and makes us all smarter even if the world keeps making us dumber.

That’s a winning solution.

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: September 16, 2014

by Kevin Coupe

The stupidity, insensitivity and utter crassness of certain companies never ceases to amaze me.

Take, for example, the decision by Urban Outfitters to sell a Kent State sweatshirt designed to look like it is spattered with blood. (You can see it at left.) The cost of the sweatshirt, $129. The cost to the company's image and reputation? Long-lasting, I suspect.

Kent State, of course, is the campus where on May 4, 1970, members of the Ohio National Guard killed four students during protests against the war in Vietnam.

Kent State says it had nothing to do with the sweatshirt, and has decried the decision by Urban Outfitters to sell the item. Urban Outfitters is saying that the sweatshirt has been taken off its website, though USA Today notes that one of the sweatshirts is being auctioned on eBay with a starting bid of $550, or "Buy It Now" for $2500.

Which demonstrates that Urban Outfitters does not have a monopoly on bad taste.

Also demonstrating that insensitivity knows no bounds is the company that decided that 9-11 was the perfect day to sell made-in-the-USA items at 10 percent off, because there's nothing like a good sale to make sure we never forget one of the great tragedies in our nation's history. (See the ad at left.)

Again, this was not an isolated incident. The Huffington Post reports that a Bikram yoga studio just five miles from the Pentagon decided to have a special 9-11 sale, offering 20 percent off any purchase. And when criticized in social media, a co-owner of the studio defended the decision, saying that the studio also had Valentine's Day sales, and there once was a massacre on Valentine's Day.

What a moron.

You would think that at all these organizations there would be someone - anyone - who would raise his or her hand and say, "Maybe that isn't such a good idea."

You would think that even the crassest, most dollar-driven people would have just enough human decency to know that there are certain things you don't do, certain things you don't say, certain lines you don't cross.

I know one line I'm not going to cross. That's the one that separates me from companies like these. I'm just not doing business with them, and I suspect I won't be alone.

The hell with these people, and the hell with their companies.

Published on: September 16, 2014

Bloomberg reports that Whole Foods plans to test a new loyalty program - its first - at its Princeton, NJ. store, and then expand the test to Philadelphia. The goal, the company said, is to have a national loyalty/rewards program by the end of 2015.

According to the story, Whole Foods will offer a rewards card and mobile application downloaded from the Apple iTunes store, which will allow customers "to earn points that can be redeemed for discounts and store experiences, such as cooking classes … the trial period will last about six to eight months."

Whole Foods has been under price pressures of late, as mainstream grocers such as Kroger and Walmart grow their organic businesses, and value-driven organic chains such as Sprouts Farmers Markets gain traction and expand their national footprint. The new loyalty program is designed to be one way of addressing the company's "Whole Paycheck" image.

Published on: September 16, 2014

Salon has an interesting piece by Robert Reich, the former secretary of Labor in the Clinton administration who now serves as Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley.

The column looks at the new soda wars taking place in Northern California, and the implications of what could happen. An excerpt:

"Fifty years ago this month, Berkeley was the epicenter of the Free Speech Movement. Now, Berkeley is moving against Big Soda.

"The new movement isn’t nearly dramatic or idealistic as the old one, but the odds of victory were probably better fifty years ago. The Free Speech Movement didn’t challenge the profitability of one of the nation’s most powerful industries.

"Sugary drinks are blamed for increasing the rates of chronic disease and obesity in America. Yet efforts to reduce their consumption through taxes or other measures have gone nowhere. The beverage industry has spent millions defeating them.

"If on November 4 a majority of Berkeley voters say yes to a one-cent-per-fluid-ounce tax on distributors of sugary drinks, Berkeley could be the first city in the nation to pass a soda tax. (San Franciscans will be voting on a 2-cent-per-ounce proposal requiring two-thirds of them to approve; Berkeley needs a mere majority.)

"But if a soda tax can’t pass in the most progressive city in America, it can’t pass anywhere. Big Soda knows that, which is why it’s determined to kill it here."

You can learn more about the coming vote by clicking here.

Published on: September 16, 2014

Retail Week reports that when former Unilever executive Dave Lewis took over as CEO of troubled Tesco, he emailed every one of the 500,000 people employed by the retailer and "asked them to contact him directly with their thoughts on the business."

He got 1,300 responses and, the story says, "he is understood to have spent ten hours reading the emails."

According to Retail Week, Lewis said in his email that "with a relentless focus on our customers and a preparedness to challenge ourselves and take bold decisions we can retain our position as the customers’ champion."

Published on: September 16, 2014

Over the years, David Tovar has been quoted a lot in his role as vice president of communications and chief spokesman for Walmart. Heck, here on MNB alone he's been quoted a couple of dozen times.

In fact, the last time he made news, it is when he criticized a New York Times op-ed piece by Timothy Egan, calling it "wildly inaccurate."

Well, it ends up that Tovar knows something about wild inaccuracies. He's just lost his job, Bloomberg reports, because he falsified his resume, claiming to have a B.A. from the University of Delaware, when it fact he never completed the required coursework.

Walmart apparently found out about the gap between reality and resume while doing standard due diligence (which means, apparently, that Walmart continues to check out its employees even after they've been with the company for eight years).

According to Bloomberg, Dan Bartlett, executive vice president of corporate affairs for Bentonville, Arkansas-based Wal-Mart, referred questions to Tovar. “I’ll let him speak to anything about his background,” he said.

The story says that "Wal-Mart sent a memo about Tovar’s departure to its U.S. leadership on Sept. 12, without elaborating on his reasons for leaving. Tovar’s college record didn’t come up in a separate farewell e-mail that he distributed to media." That email simply said that "I have loved every second of every minute I’ve been with the company and I don’t have enough room in this e-mail to give justice to the life-changing experience of working for the world’s largest retailer."

Tovar told Bloomberg in an email that it seemed like the right time to “start a new adventure," but he did not comment on the resume issue.

Published on: September 16, 2014

• Walmart yesterday said that its Walmart Foundation has launched a new Fight Hunger initiative that "will provide $3.7 million in grants to participating Feeding America food banks and local partner agencies that provide hunger relief to millions of people in need of food assistance."

The announcement comes, Walmart said, at "a critical time in our nation when food banks are facing a growing need for donations due to historically high rates of food insecurity. Feeding America recently released its Hunger in America 2014 report showing that in a single year one in seven Americans, including 12 million children, turn to the Feeding America food bank network for food assistance."

Published on: September 16, 2014

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

• Bloomberg Businessweek reports that organic products sold under kroger's private label Simple Truth brand are about to exceed $1 billion in annual sales.

According to the story, "The steady flow of new organic products and companies has led to lower prices across a range of organic categories, such as cereals, breads, and dairy. Given the enormous expansion of chains such as Whole Foods Market (WFM), and consumers’ interest in giving food labels much closer scrutiny than in years past, organics are no longer the domain of trendy, expensive specialty shops and farmers’ markets. They’re everywhere—what Kroger executives called a 'blurring of groceries and natural foods' - and most shoppers tend to purchase both organic and non-organic foods."

Kroger CEO Rodney McMullen says that "there’s more margin pressure now on natural and organic than there’s ever been … It seems that it’s becoming more and more of a competitive category, and so although margins tend to be better in natural and organic, I don’t know if that’s going to continue for the foreseeable future.”


• Crain's Chicago Business reports that Sears Holdings has told the US Securities and Exchange Commission (SEC) that it plans to borrow $400 million from the private hedge fund owned by its billionaire CEO, Eddie Lampert.

The story says that "the company expects to use the proceeds of the loan for general purposes, according to the filing."

"General purposes," in this case, meaning simple survival.

Published on: September 16, 2014

• The Wall Street Journal reports that RadioShack has replaced its CFO, John Feray, who has only been with the company for seven months, with Holly Etlin, managing director at AlixPartners, a restructuring specialist.

According to the story, "The executive switch comes in the middle of a frantic effort to stabilize the company's balance sheet before it runs out of cash. The company last week warned it could be forced to liquidate or seek bankruptcy protection if it can't find a way to improve its finances soon."

Published on: September 16, 2014

Yesterday, I raved about two stories that John Oliver did on Sunday's "Last Week Tonight," on HBO - one about Olive Garden and the other about tone-deaf corporations.

Which prompted one MNB user to write:

I watched the first three episodes before concluding it was the most intellectually dishonest show I'd ever seen. That wouldn't be so bad, if he were just trying to be funny. But, he fails at both comedy and edification. Needless to say, I don't watch any longer. Unfortunately, I now think less of you and MNB for heaping such high praise on such insipidity.

Well, I feel bad about that. Especially because I don't think less of you for having a different opinion than I do.

The thing is, sometimes people think something is "intellectually dishonest" and "insipid" because it is a position different from one that they hold. Sometimes, those people occupy elected office, which explains a lot about our politics. (It is one of the reasons I enjoy my occasional forays into academia … I love the non-judgmental, free exchange of ideas that can take place in a college classroom.)

I'm a little surprised about the "intellectually dishonest" accusation, though, simply because it seems to me that "Last Week Tonight" has tried to look at some issues that one would not normally associate with a comedy show. Net neutrality, for one thing. The high cost of a college education, for another. Or subjects like native advertising (about which I thought he was devastatingly on-target), income inequality, payday loans, corruption at FIFA, and Argentine debt restructuring. On this past show, I must admit, it struck me that Oliver - who is a Brit - delivered a fairly even-handed explanation of the whole Scottish independence vote situation, to which I must admit I was only paying vague attention. I thought I learned something, which was pretty good for 11 pm on a Sunday night. In fact, I almost always learn something when I watch "Last Week Tonight."

But, hey. Just because I hold one opinion doesn't make me right. Though MNB reader Pam Samaniego would agree with me about the program:

We really enjoyed John Oliver when he sat in for John Stewart on the Daily Show last year, and his new show is even better.

The show format allows for more than the obvious one-liner, and we love his insightful commentary on both serious and ridiculous issues.

It’s a must watch in our household.

And this MNB reader would agree specifically about the Olive Garden story:

I have to agree! On a recent trip to visit a college with one of my children, we decided due to time and unfamiliarity with the city to eat at a close to the hotel Olive Garden. The food has always been acceptable in a pinch for us, but this time it was enough to add Olive Garden to the never eat there again list.

All 4 of our meals were lacking for various reasons and no one could eat theirs completely. Olive Garden has definitely cut corners, increasing the amount of breading, reducing the portion inside the breading, and not maintaining quality staff. This was so bad that the waitress got the manager to compensate us for part of the meal. It was the worst meal I ever had at a restaurant without exaggeration.

The only thing that surprises me about this email is why you ate four meals there.

But I guess there are people who think that John Oliver is on-target.

Are we all intellectually dishonest and insipid?

Gosh, I hope not.

Will you think less of me for even posing that question?

I guess I'm willing to take that risk.



Yesterday, MNB reported that Walmart and Best Buy have decided not to accept Apple Pay, the new mobile payment system developed by Apple.

Instead, Consumerist.com reported, "both retailers are getting behind a mobile technology group that’s owned by retailers, called the Merchant Customer Exchange. MCX is in turn launching a mobile wallet application called CurrentC coming in 2015, which will only require a software download instead of checkout scanners, and can be used on any iPhone or Android phone already in use, instead of just the new iPhone 6 and iPhone 6 Plus." And the Washington Post wrote that the decision by Walmart especially sets up "a high-profile race to define how Americans will pay for products in the future."

MNB reader Jeannine Wilkins responded:

In my mind the key is if Apple Pay (or CurrentC) will actually protect users from cyber fraud.  Since retailers don’t appear to be able (or willing to invest the required dollars) to protect their customers from cyber fraud then customers may well seek out other options that can protect them.  I’d need to learn more about CurrentC but off the top of my head I’d trust Apple to come up with a  solution before Walmart, but then I can’t imagine trusting Walmart on any matter which I’ll admit is a personal bias.  This is just my personal opinion but I’ll be doing some research on it and I’m looking forward to hearing what shoppers have to say.

MNB reader Sharese Alston wrote:

You took the words out of my mouth!  As a consumer, I should be able to use Apple Pay AND CurrentC if I want, when I want.  I think all retailers should realize that MOST consumers aren’t going to use ApplePay OR CurrentC.  With all of the hacking and privacy concerns as of late, it will take some time before this is commonplace.  I love technology, and pre-ordered an iPhone 6, but I am still not sure if I will use it. I’m on the fence, but I can tell you I trust Apple’s security and infrastructure much more than Walmart or Best Buy….or any of the others, generally speaking.  And NO, I don’t know why, I just DO!

MNB reader Marcel DeHart wrote:

It’s pretty simple, you limit my choices in how I pay, I will limit my visits to those who don’t.

From another reader:

This whole thing reminds me of the VHS vs. BETA wars that occurred in the late 70’s.  I have no idea who’ll win…

Streaming.

MNB reader Don Skiver wrote:

I’ll be honest with you, I would rather they come up with a universal or standard way to pay.  Reminds me when we had to choose between Beta and VHS.  I just want a safe, inexpensive (free to me), easy way to pay for things.  I don’t want to have to load all my accounts on twenty different platforms . . .  I’m guessing I’m not the only lazy American . . .

MNB reader Gary Loehr chimed in:

It seems that this may be the new battleground between the credit card companies and retailers.  It looks like CurrentC would avoid high transaction fees by cutting out the credit card companies. This area will also test the balance between convenience and security.  In the past security was a given, so convenience was the area of differentiation.  Security is no longer a given.  Will these mobile payment providers start to go to market with a security message?  It could be a compelling market position.

And, from another reader:

I agree with your assessment “retailers probably ought to offer as many payment options as possible”, but do it in a manner that gets them the most coverage and Apple is not a player any more.  Apple is waning in popularity and is almost irrelevant in the Hispanic community.

Walmart has to think globally on the solutions it implements and for a company who used to innovate and lead from the front, it’s becoming irrelevant.  I’m not saying they don’t have a great product nor have a loyal following, they do.  Just saying they were a company known for innovating, creating markets that never existed and being able to consumerize complex technology with intuitive interfaces has now become a “me too” company with no face (i.e. Steve Jobs, Larry Ellison, Bill Gates, Larry Page, etc). They’re slow to change and have no vision.

Check out the NFC technology that is vendor agnostic and can be incorporated into the hardware which is the same technology used in credit cards.

I'm not sure I completely buy the "Apple is not a player anymore." I'm a little skeptical about the whole Apple Watch thing, but the fact that the iPhone 6 models sold out even before they were in stores suggests that maybe there's some life in the old Apple yet.

I was intrigued by the assertion that Apple is almost irrelevant to the Hispanic community, so I went to a Fox News story referenced by this reader, and saw that it reported the following…

For one thing, the story says that "in Latin America, 80 percent of Mexicans, 86 percent of Argentinians, and 90 percent of Brazilians use Android cellphones."

Okay, that sounds persuasive. Of course, adding to Apple's problems there are the import tariffs, which make its product line very expensive, and in Argentina, the story says, "the government has all but banned the iPhone, making it clear to mobile companies that they can’t sell their products in the country unless they are made in Argentina." So maybe the problem isn't entirely one of Apple being irrelevant to Hispanics.

Furthermore, Fox News writes, "in the United States, where there’s Apple Store galore, Latinos aren’t buying into Apple, either, even though as a whole they use smartphones and tablets more than anyone else. According to Experian Marketing Services, among Hispanics 53 percent of adults use Android and 34 percent have an iPhone – a bigger divide than among non-Hispanic adults (48 percent Android vs 38 percent iPhone)."

So that's 24 percent of Hispanics using iPhones and 38 percent of non-Hispanics.

Sounds like a difference to me … though not exactly the stuff of irrelevance. And since, if I recall correctly, Apple current has a market capitalization that is higher than Walmart and GE combined, I'm not sure it is entirely fair to say that Apple is "waning in popularity," even if these are not the halcyon Steve Jobs days.

That said, I'll stick with my original observation, which you actually agreed with - that “retailers probably ought to offer as many payment options as possible."

Published on: September 16, 2014

In Monday Night Football action, the Philadelphia Eagles defeated the Indianapolis Colts 3-27.