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    Published on: December 11, 2014

    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.

    I've always been of the belief that it is important for businesses and brands to establish very early what their unique advantages are, and then exploit those advantages at every turn. That's not to say that they shouldn't expand the products and services they offer or try new things … just that you have to know what makes you what you are.

    I've been thinking about this lately because of something that happened to us right before Thanksgiving. For the first time ever, we were not going to have all of our kids with us for the holiday; our oldest son, who works in Chicago, needed to be at work late Wednesday and early Friday, so getting him home for Thanksgiving just wasn't practical. But we decided we wanted to at least treat him to a nice Thanksgiving dinner, and would send him some money.

    But, as so often happens, we got busy and distracted and suddenly realized on the afternoon beforeThanksgiving that we'd forgotten to send him money. No problem, we figured…we'd just drive over to Chase, which happens to be his bank, and deposit a hundred bucks into his account so he could have a nice Thanksgiving dinner and maybe take a friend. But when Mrs. Content Guy got to the Chase branch, armed with $100 in cash and our son's name and account number, she was informed that they would no longer accept cash deposits of any size into an account that is not your own.

    You have to be kidding me. Now, the teller made clear that this was a bank policy, not federal regulations, that was creating this situation. You can make deposits using a check or money order - but you have to pay for the money order and I find it ironic that they'd rather take a check that could bounce than actual currency. And by the way, the last time I checked, this is actual currency.

    But now, at Chase, apparently it isn't enough to have cash. You have to prove you actually own the cash.

    Now, Chase says that it instituted this rule because it is trying to 'combat the misuse of accounts, including money laundering." And I can buy that … but $100? I'm not real sure they have to be worried about money laundering at that level. Maybe saying that you can't make cash deposits into someone else's account for $1,000 or more would seem more sensible.

    Ironically, I was reading a story earlier this week about how some banks are actually going to large depositors that they may want to make their cash deposits elsewhere, because otherwise they'll be hit with big fees, which are being instituted by the banks to cover some of the costs created by tighter financial regulation.

    I know this is simplistic, but if banks are going to discourage major corporations from making big deposits, and stop parents from putting $100 in their kid's account, well, what the hell is their business model exactly?

    Now, I'm sure that there's plenty of room left for banks to make money. There's always the loan shark…er, credit card business. And we all know that when all else fails, they're happy to charge high interest rates for student loans, saddling the next generation with debt that is almost impossible to pay off.

    It wasn't that long ago that there was a study saying that young people would just as soon bank with Walmart or Google as with Citibank or Chase. They don't care about traditional roles and boundaries…they just want reputable companies to provide them with relevant products and services. And is it any wonder, as banks seem to be less and less interested in being in the traditional banking business?

    I hope the Chase decision doesn't become epidemic. I don't have a lot of faith, because bankers can be a bunch of lemmings, but I can hope.

    BTW…I would submit that if Chase ever shows up at a legislative hearing into the matter of whether Walmart should be allowed to open a bank, it should be laughed out of the room. Because these guys would have to have real onions to suggest that only traditional financial services companies ought to be able to offer traditional financial services.

    If major banks don't want to provide such products and services, then they have absolutely no right to expect governmental protection so that other companies cannot. And if that means that Walmart or Google are empowered to disrupt the financial services industry in a way that is positive for the consumer, then fine. I'm okay with that.

    If you have a brand advantage, you have to nurture it, nourish it, protect it, and expand it. Not toss it away, even if the rationale seems good at the time. in the long run, I think this can be a serious mistake.

    I'm standing here in my kitchen, and over here, my daughter is in the process of making pulled pork. It is going to be delicious. Right now, the smell is almost intoxicating … it is taking some effort not to drool on-camera. I would suggest that the power of such aromas is oner of the things that can give a food store a differential advantage, that can help promote and nourish the brand.

    And yet…when was the last food store you went into that actually smelled great? That smelled any different from the CVS down the road?

    It isn't enough to say you are a food store. You actually have to be a food store, with all that this entails.

    It can pay dividends.

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

    KC's View:

    Published on: December 11, 2014

    by Kevin Coupe

    The New York Times reports on the results of a new poll suggesting that "despite an improving economy and jobs picture, the public is more pessimistic than it was after the 2008 financial crisis that it is possible to work hard and become rich."

    In fact, the poll suggests that only 64 percent of the US public believes that it can work hard and get rich - lower than even in 2009, early in the financial crisis and the Great Recession, when 72 percent felt that way.

    The Times writes: "Notwithstanding the bleaker view of upward mobility, the majority of those polled said they were more concerned about the possibility that too much regulation in Washington could stymie the economy than they were about the prospect of inequality. Fifty-four percent of respondents said that 'over-regulation that may interfere with economic growth' was a bigger problem than 'too little regulation that may create an unequal distribution of wealth.' Only 38 percent said that too little regulation posed a bigger problem."

    The story goes on to say that "the poll showed that a slim 52 percent majority of Americans think the country’s economic system is fair, giving everyone an equal opportunity to succeed; 45 percent think it is unfair. Those with higher household incomes were more likely to believe the system is fair."

    You can see the entire story and poll results here.

    If I were asked this question, I would probably say that I continue to believe it is possible to work hard and grow rich in this country … though I do think that it may be more problematic than it used to be. On the one hand, a society that values innovation and entrepreneurialism can make it easier to achieve success, but I do think that it many ways, there are ways in which the deck is stacked against people not born with certain advantages.

    I also think that "rich" and "successful" are two entirely different things, and one of the problems we have as a country is that "getting rich" is the way in we gauge success. (Also, "rich" is an incredibly subjective term…which is one of the reasons I think is is a lousy way to keep score.)

    I'd love to meet the 38 percent of people who believe that "too little regulation" is the biggest factor inhibiting economic growth; my argument would be that while regulations can inhibit economic growth, sometimes economic growth is not the only end game. There are other things that are more important or as important than economic growth … and again, one of the problems we have in this country is that economic growth is seen as the only end game. It's important, it's critical, but it's not the only thing.

    I would actually suggest that the problem isn't too much regulation or too little regulation, but rather regulation that doesn't do what it is supposed to, or is prompted by lobbying dollars rather than considered, negotiated agreement between the two ends of the political spectrum.

    But maybe that's just me.

    Still, it is a fascinating poll. And Eye-Opening, especially considering the irony that, as the Times writes, "The significant drop in faith comes as the nation added 321,000 jobs last month and average hourly earnings for ordinary workers increased much more than expected. The economy is also being buoyed by a drop in oil prices, putting more money in the pockets of average Americans as the holiday season approaches."
    KC's View:

    Published on: December 11, 2014

    Walmart CEO Doug McMillon tells Charlie Rose on CBS This Morning that he intends to implement a major policy charges with regard to pay scales in early 2015.

    ""We're gonna make some changes in a few months that will create a situation where no Walmart associate in the United States makes federal minimum wage. We'll be ahead of that with our starting wage," he said.

    McMillon acknowledged that the company has been a target in the debate over income inadequacy, and was the subject of labor protests over the Thanksgiving weekend.

    “In the world there is a debate over inequity, and sometimes we get caught up in that, and retail does in general,” he said.
    KC's View:
    I'm dubious that this move by Walmart will take the target off its back, or that it will resolve all the questions - legitimate and illegitimate - about its labor practices. But I do think that this is an effort by McMillon to put Walmart's attention where it should be - on competing with Amazon and pretty much everybody else.

    Published on: December 11, 2014

    The Wall Street Journal this morning reports that the "$35 billion organic-food industry has nearly tripled in size in the past decade, challenging the Agriculture Department’s ability to monitor the more than 25,000 farms and other organizations that sell organic crops and livestock."

    Indeed, the US Department of Agriculture (USDA) has accredited 81 "certifying agents" that are allowed to stamp food as organic. But, the Journal writes, "of the 37 that had a complete review this year, 23 were cited for failing to correctly enforce certification requirements on farms in audits, according to an internal Agriculture Department report. The 23 firms didn’t properly conduct onsite inspections or correctly review applications for organic certification, among other things, the report said."

    The story goes on to say that "a separate Wall Street Journal investigation of USDA inspection records since 2005 found that 38 of the 81 certifying agents failed on at least one occasion to uphold basic Agriculture Department standards. In that time, 40% of these 81 certifiers have been flagged by the USDA for conducting incomplete inspections; 16% of certifiers failed to cite organic farms’ potential use of banned pesticides and antibiotics; and 5% failed to prevent potential commingling of organic and nonorganic products, according to the Journal investigation … Those that fall out of compliance, like the 23 cited this year, get the opportunity to correct the problem, but are at risk of being removed from the certification program if the problem isn’t fixed."
    KC's View:
    This story makes a pretty persuasive case that the certification system needs to be fixed; it seems to have been constructed in a way that does not allow for the kind of growth that we've seen in organics. But I'm skeptical about the ability of the government to provide the kind of funding and technological savvy necessary to bring the system into the 21st century.

    Published on: December 11, 2014

    Walmart said yesterday that Judith McKenna, a two-decade company veteran who most recent was chief development officer for Walmart US, has been named COO for Walmart US.

    Gisel Ruiz, who has been serving in the COO role at Walmart US, moves to Walmart International as executive vice president of its People Division.

    Fortune observes that "it is the second time in two weeks that Walmart U.S. announces a major executive departure at the peak of the crucial holiday season: two days before the Thanksgiving/Black Friday weekend, when Christmas shopping goes into high gear, Chief Merchandising Officer Duncan McNaughton, responsible for product selection in the stores, left the retailer. He won’t be replaced: instead executives in charge of food, general merchandise, apparel and other business lines will report directly to Walmart CEO Greg Foran, himself a newbie, having taken the reins in August from Bill Simon."

    And, Fortune adds: "Wal-Mart spokesperson Brooke Buchanan said that the COO change, which she characterized as part of the regular succession planning at the world’s largest retailer, wouldn’t hurt Walmart U.S. during this peak season or distract employees."
    KC's View:
    This is all about CEO Doug McMillon wanting to operate with a team of his own choosing. Nothing wrong with that … if it works.

    Published on: December 11, 2014

    In Massachusetts, the Sentinel & Enterprise reports that Market Basket - the chain that was almost torn apart earlier this year by a family ownership dispute that made the Hatfields and the McCoys look like the Little Rascals - will pay out year-end bonuses to front line employees.

    The amount of the bonuses has not been disclosed. The paper says that "the Christmas and customer-service bonus checks are the first to be handed out since Arthur T. Demoulas returned to running the company in late August."
    KC's View:
    Cynics will say that the employees are being paid off by Arthur T. Demoulas for siding with him in his battle against his cousin, Arthur S. Demoulas, for control of the company. Less cynical folks will say that these bonuses illustrate the kind of support for the front line that convinced employees that Arthur T. Demoulas understood how retail works better than his cousin. After all, Arthur S. Demoulas wanted to take money out of the company, not invest in the company.

    Count me, in this case, among the less cynical. Especially because, from all reports, Market Basket has done a good job of coming back from the tumult of the summer.

    Published on: December 11, 2014

    Fortune reports that Greg Wasson, CEO of Walgreen, has changed his mind and now will leave the company after the completion of its merger with European retailer Alliance Boots.

    The story notes that Wasson's tenure has had its controversial moments: "Wasson has repeatedly found himself in the center of controversy recently. He came under heavy criticism over the summer when he admitted he was considering structuring the Alliance Boots deal as an 'inversion,' which would lower its taxes by changing its domicile to Switzerland. Walgreen ultimately decided against an inversion amid questions about Walgreen’s patriotism.

    "Wasson and Walgreen were also hit in October with a lawsuit by former chief financial officer Wade Miquelon, Wasson’s one-time right hand man, who claimed Wasson and a Walgreen director defamed him in meetings with large shareholders. That was part of a saga that was chronicled in a Wall Street Journal story alleging a bad forecast of generic drug prices led to an unexpected reduction in the company’s profit target. Walgreen responded in a court motion that Miquelon was responsible for the disappointing forecast."

    Fortune writes that "Walgreen’s chairman, former McDonald’s CEO Jim Skinner, will serve as executive chairman of Walgreens Boots Alliance, while Stefano Pessina, executive chairman of Alliance Boots, will be its acting CEO while the board looks for a successor for Wasson. Shareholders will vote on the deal Dec. 29."
    KC's View:

    Published on: December 11, 2014

    Bloomberg has a 2800-word investigative piece that looks at Walmart's China business, concluding that the company has used "questionable accounting and unauthorized sales practices" to make its business there look better than it actually has been.

    According to the story, "although the reversals seem abrupt, cracks in the foundation of Wal-Mart’s retail business in China have been developing for years … The practices -- including bulk sales to other retailers and some sales allegedly booked when no merchandise left the shelves -- made business appear strong even as retail transactions slowed and unsold inventory piled up."

    And at least one expert observer suggests that Walmart's China operations demonstrated "a general flexibility on ethics … There was a huge desire to perform. In this market, they believe if they’re hitting the numbers, then they’re doing the right thing.”

    You can read the entire story here.
    KC's View:

    Published on: December 11, 2014

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

    • On National Public Radio (NPR), The Salt reports that there has been a dramatic drop in olive oil production, caused by bad weather, the olive fruit fly, and a bacteria that has killed a million olive trees in Italy.

    Curtis Cord, publisher of the Olive Oil Times, says that "this means global production will slip about 17 percent from 3.2 million tons in 2013 to 2.4 million tons in 2014. That's about 400,000 tons less than the world needs, he says."

    As far as I'm concerned, an olive oil shortage would be indicative of the end of western civilization as we know it.


    • The Associated Press reports that "McDonald’s is planning to trim its menu, review its cooking methods and maybe even get rid of some ingredients to change perceptions that it serves junk food … Starting next month, McDonald’s will cut eight items from the menu and reduce the number of Extra Value Meals to 11 from 16. But the burger chain did not say which items would be likely to go."
    KC's View:

    Published on: December 11, 2014

    …will return.
    KC's View: