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    Published on: January 15, 2015

    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.

    Last weekend, I had the opportunity to do something that I've wanted to do for a few years - I saw William Shatner's one-man show, "Shatner's World...We're Just Living In It."

    As I've said here before, I'm a big fan of everything Star Trek and have been since the original series started back in 1966. And I was looking forward to the show because I've always been impressed with Shatner's ability to reinvent himself. He started out doing Shakespeare ... moved to science fiction ... did a cheesy cop show ... a reality TV show ... spent time broke and doing summer stock ... then moved on the Star Trek movies ... playing Denny Crane on "Boston Legal" ... serving as the frontman for Priceline ... and has done all sorts of cable and internet series on a variety of subjects.

    This is a terrific lesson for any business and any business person. I guess I kind of relate because, as I've often said, I've always tried to do the same thing, albeit on a much smaller scale. I started out as a newspaper reporter ... moved to magazines ... then video ... and now the internet. I'm guessing that I may be coming to you via hologram before I'm done.

    Now, Shatner was terrific in the one-man show. He's 83, and did two hours of highly energized storytelling without an intermission. He talked a lot about his career, showed some clips, and kept the audience laughing throughout.

    But what I thought was the best lesson from "Shatner's World" were four little words that he uttered a number of times throughout the show. Whenever presented with an opportunity or a challenge or a problem, he'd say to himself, "I can do that."

    "I can do that."

    When you think about it, those are four incredibly powerful words. They're tied into the whole notion of reinvention ... the importance of a strong work ethic ... and the willingness to change things up, to keep trying new things, and to enjoy the hell out of life while doing so.

    As my brother Tim likes to say, Shatner is a guy who is getting his money's worth out of life. We should all be so lucky. We should all try to do the same.

    I can do that.

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

    KC's View:

    Published on: January 15, 2015

    by Kevin Coupe

    I like to think that I have a pretty open-minded approach to food. But this one may even push my own limits.

    The BBC reports that "an Icelandic micro-brewery has announced its new beer will be flavoured with smoked whales' testicles ... The testicles of fin whales - which are an endangered species - are cured 'according to an old, Icelandic tradition' before being salted and smoked, with one being used per brewing."

    I probably wouldn't drink this beer just in principle; if the whales are an endangered species, I don't think their testicles (or any other body part) should be used to make beer (or any other product).

    But I also have to admit that I am astounded by the lack of marketing savvy.

    After all, if you're going to make a beer like this, how do you not call it "Moby Dick"?
    KC's View:

    Published on: January 15, 2015

    First, the good news...

    The Chicago Tribune reports that "Decreasing unemployment, brightening consumer confidence and plummeting gas prices point to a boost in consumer spending in 2015 that should be more widespread and democratic than the spotty economic recovery of the past few years, experts say.

    "Retail sales are expected to rise 4.5 percent this year, a full percentage point more than the 3.4 percent growth in 2014, according to Kantar Retail, which excluded car dealers, gas and food service from its analysis."

    The story also says that "online sales, though still 10 percent of total retail sales, are expected to grow 15 percent this year, same as in 2014, while sales at physical stores are expected to rise 3.6 percent, according to Kantar."

    The story also predicts that much of the growth is likely to be "driven by people under age 34, both on the lower- and higher-end of the income scale, as that age group has seen the greatest employment gains. As a result, smaller stores, from neighborhood convenience stores to upscale specialty stores, will be a key growth category because they appeal to younger people who tend to live in urban environments, dine out and shop on an as-needed basis."

    The bad news...

    Bloomberg reports that "the optimism surrounding the outlook for U.S. consumers was taken down a notch as retail sales slumped in December by the most in almost a year, prompting some economists to lower spending and growth forecasts.

    "The 0.9 percent decline in purchases followed a 0.4 percent advance in November that was smaller than previously estimated, Commerce Department figures showed today in Washington. Last month’s decrease extended beyond any single group as receipts fell in nine of 13 major retail categories."

    The National Retail Federation (NRF) put a different spin on the end-of-year holiday numbers, saying that "total holiday retail sales, which include November and December sales, increased 4 percent to $616.1 billion, which was in line with NRF’s projected forecast of 4.1 percent growth. In addition, non-store holiday sales, which is an indicator of online and e-commerce sales, grew 6.8 percent to $101.9 billion." NRF described the numbers as "welcome news," and the organization's president/CEO, Michael Shay, said that "there is every reason to believe that we have moved well beyond the days of consumer pessimism and that the trajectory for retailers continues to point up."

    Meanwhile, the National Association of Convenience Stores (NACS) is out with its monthly evaluation of consumer sentiment, saying that "for the first time in two years, a majority of Americans are optimistic about the economy, thanks to the continuing slide in gas prices. A survey of gas consumers found that 57% of Americans are optimistic, including nearly two-thirds (65%) of those ages 18-34.

    "The levels of consumer optimism are the highest measured in the more than two years that consumer sentiment has been measured ... Consumers are obviously pleased with the continued falling price of gasoline. Almost nine in ten consumers (88%) say gas prices are lower today than they were last month, and they report that gas prices are 50 cents per gallon lower than they were 30 days ago."
    KC's View:
    It is instructive of consumer skepticism, I think, that while 31 percent of US shoppers believe that gas prices will go down next month, an equivalent number - 31 percent - think they'll go up.

    All the evidence is that while the economy has improved enormously for some sectors of the population, in this case the rising tide has not lifted all boats. And sales are only going to really take off when the middle class starts to experience the lift that the upper class has felt.

    Published on: January 15, 2015

    The Phoenix Business Journal has a piece about a speech given by Whole Foods co-CEO Walter Robb to the the Economic Club of Phoenix in which he said that he is not overly worried about rival natural grocer Sprouts.

    In what Robb characterized as a "competitive throwdown," Robb said that "they've done well. They are not Whole Foods. They don't have the same standards, though sometimes they would represent that they do ... We are going to continue to be the leaders in this space. We are the leaders, we'll continue to be the leaders."

    Robb also preached the Whole Foods gospel of "conscious capitalism," saying that "it is an idea that business has to embrace a wider circle of responsibility. It seems to me that the companies that do not evolve that way will find themselves on an island by themselves."

    The story continues:

    "Being a conscious capitalist, Robb said he is probably underpaid as a CEO. He said Whole Foods has a salary cap, which is 19 times the average worker. He said it does not create as big of a gap between executives and employees and allows for communication and transparency between employees and executives.

    "In America, corporations have the ability to make societal changes faster than public institutions and that it is better to lead the way on paying better wages or offering better health care than having to be dragged along, Robb said."
    KC's View:
    The lines are drawn, and I kind of like it when an executive engages in a throwdown.

    But I suspect that the folks at Sprouts grinned when they read these comments. Because in some ways, Robb just leveled the playing field.

    Published on: January 15, 2015

    Upstate New York-based Price Chopper Supermarkets yesterday announced "the launch of its new specialty pharmacy program, which expands pharmacy services in an effort to provide more convenient and personalized solutions for patients living with chronic and complex health conditions. This program is part of a partnership with Aureus Health Services, a specialty pharmacy and health management company."

    According to the announcement, "Price Chopper’s new program will provide patients with access to specialty medications, which can be complex to administer, have a high cost, and/or require special storage or handling, at their local community pharmacy. Chronic diseases that are typically treated with specialty medications include Rheumatoid Arthritis, Psoriatic Arthritis, Hepatitis, Psoriasis, Ulcerative Colitis, HIV/AIDS, Multiple Sclerosis and Crohn’s Disease ... Specialty medications require strict adherence to a treatment plan aimed at successful outcomes, making Price Chopper’s specialty pharmacy services an integral component of a patient’s holistic healthcare plan.  Additional services include providing educational resources, developing an individualized clinical care plan, coordinating insurance benefits, finding financial assistance to help patients afford their medications, and ensuring continuous patient care throughout the course of treatment."
    KC's View:

    Published on: January 15, 2015

    Reuters reports that Andy Clarke, CEO of Walmart-owned Asda Group in the UK, has reorganized the company's uppermost management ranks, promoting Barry Williams from chief merchandising officer to chief customer officer, and naming Andrew Moore, who has been running Asda’s George clothing business, as the company's new chief merchandising officer.

    Steve Smith, the current chief customer officer, is said to be taking on an as-yet undetermined role at parent company Walmart.
    KC's View:
    It probably is a sign of my age and misspent youth that my first reaction to this story was, "Wow! Greg Brady is the chief customer officer at Asda?"

    Published on: January 15, 2015

    TechWeekEurope has a story about how Tesco "has launched an app for Google Glass which uses image-recognition technology to provide shoppers with more information on their purchases. Created by the company’s in-house Tesco Labs research and development team the Tesco Grocery Glassware app allows shoppers to browse the price of goods, view nutritional information and add items to their shopping basket hands-free."

    According to the story, the technology "allows shoppers to browse the price of goods, view nutritional information and add items to their shopping basket hands-free. Users can either scan a product’s barcode for more information or to add to a basket, or perform a voice search before selecting the right product using the Glass headset."
    KC's View:
    Now all they have to do is figure out how to get customers to start shopping at Tesco again...

    I know I'm probably wrong about this, but I can't help but wonder if Tesco is focusing on the right priorities at this point. You can't ignore the future, but Tesco has bigger issues than figuring out how to adopt Google glass to the retail environment.

    Published on: January 15, 2015

    Fast Company has a terrific piece worth reading about Dominique Ansel, the pastry chef who created the Cronut.

    According to the story, "his newly announced second shop, Dominique Ansel Kitchen, won’t serve the viral croissant-donut hybrid at all when it opens this spring in New York's West Village neighborhood. Instead, he’s moving forward with another, potentially more radical idea in baked goods: Rather than selling pastries that have been sitting in a display case all day, most everything served at the Kitchen will be made-to-order for customers right in front of their eyes."

    It is an interesting look at how customization and customer service are colliding in a bakery, and you can read the entire story here.
    KC's View:

    Published on: January 15, 2015

    • The Wall Street Journal reports that RadioShack "is preparing to file for bankruptcy protection as early as next month ... following a sputtering turnaround effort that left the electronics chain short on cash." The retailer also is said to be talking to a private equity group "that could buy its assets out of bankruptcy," though there is no assurance of a deal at this time.

    The move would come after years during which RadioShack became virtually irrelevant in a world where Amazon and Apple changed the retail landscape, and a more recent past during which company management tried to close and reinvent stores, only to find those efforts fall short for a variety of reasons.
    KC's View:

    Published on: January 15, 2015

    • The Food Industry Management Program at the USC Marshall School of Business announced yesterday that it has named David G. Hirz, President and CEO of Smart & Final, the 2015 Food Industry Executive of the Year.

    The award is presented annually to what the school describes as "a food industry executive who has shown extraordinary leadership while producing exceptional business results," and Cynthia McCloud, FIM's program director, says that Hirz "has demonstrated his leadership by developing a culture of learning within Smart & Final that is widely recognized by our industry, and he will be an excellent mentor for our students."
    KC's View:

    Published on: January 15, 2015

    Yesterday, we had a report about how Chipotle has stopped selling pork at roughly a third of its stores because, it said, "after a recent, routine audit found that (a) supplier, whose name the company didn’t disclose, was raising pigs without access to the outdoors or to deeply bedded barns that are more comfortable for the animals—conditions that Chipotle requires. The supplier hadn’t failed previous audits, the spokesman said."

    One MNB user responded:

    Doing this once in a while also gets all of the other suppliers to stand up and take notice.  They will think twice before they bend the rules of their Chipotle contract.

    But another MNB reader demonstrated a level of cynicism that goes beyond even mine:

    On the other hand, they could just be cynically manipulating their gullible consumer-base by manufacturing dragons they are heroically slaying.  The temptation could be overwhelming.

    Wow. You actually are suggesting that this move is a fraud with no basis in fact?

    I find that level of cynicism breathtaking. And a little disturbing. Because it seems to dismiss the possibility that this company actually could have standards, could try to live up to them, and is trying to do the right thing.




    On the subject of President Obama's proposal for free community college, MNB reader Tom Herman wrote:

    Let’s call it what it is.  “Free community college for middle and upper class students and their parents paid for by other working people and retirees”.  Community college is already free for lower income students through federal financial aid which I support.  Let’s see how many people support it if it is really called what it is.

    People who can afford to attend the college of their choice are still going to do so, I think, though I suppose that free community college could drive prices down a bit. But I simply don't see that free community college is suddenly going to start attracting middle and upper class students ... it just doesn't make any sense.



    Responding to yesterday's piece about Amazon hiring Woody Allen to write and direct a TV series that will be exclusively streamed to its Prime customers, one MNB user wrote:

    Wow! Woody Allen is still alive?

    I do think that the Woody Allen hire could be problematic for Amazon, in part because of all the controversies surrounding him, and in part because there could be a demographic disconnect. My favorite headline about this story yesterday was this one:

    Amazon Hires Woody Allen. Amazon's Customers Say, Who's He?
    KC's View:

    Published on: January 15, 2015

    This year's Academy Award nominees were announced this morning, and the major nominees are:

    Best Picture
    American Sniper
    Birdman or (The Unexpected Virtue of Ignorance)
    Boyhood
    The Grand Budapest Hotel
    The Imitation Game
    Selma
    The Theory of Everything
    Whiplash


    Best Actor
    Steve Carrell, Foxcatcher
    Bradley Cooper, American Sniper
    Benedict Cumberbatch, The Imitation Game
    Michael Keaton, Birdman or (The Unexpected Virtue of Ignorance)
    Eddie Redmayne, The Theory of Everything

    Best Actress
    Marion Cotillard, Two Days, One Night
    Felicity Jones, The Theory of Everything
    Julianne Moore, Still Alice
    Rosamund Pike, Gone Girl
    Reese Witherspoon, Wild

    Best Supporting Actor
    Robert Duvall, The Judge
    Ethan Hawke, Boyhood
    Edward Norton, Birdman or (The Unexpected Virtue of Ignorance)
    Mark Ruffalo, Foxcatcher
    JK Simmons, Whiplash

    Best Supporting Actress
    Patricia Arquette, Boyhood
    Laura Dern, Wild
    Keira Knightley, The Imitation Game
    Emma Stone, Birdman or (The Unexpected Virtue of Ignorance)
    Meryl Streep, Into The Woods

    Best Director
    Alejandro G. Iñárritu, Birdman or (The Unexpected Virtue of Ignorance)
    Richard Linklater, Boyhood
    Bennett Miller, Foxcatcher
    Wes Anderson, The Grand Budapest Hotel
    Morton Tyldum, The Imitation Game

    Best Original Screenplay
    Birdman or (The Unexpected Virtue of Ignorance)
    Boyhood
    Foxcatcher
    The Grand Budapest Hotel
    Nightcrawler


    Best Adapted Screenplay
    American Sniper
    The Imitation Game
    Inherent Vice
    The Theory of Everything
    Whiplash


    The Oscars will be awarded on Sunday night, February 22.
    KC's View:
    I have some catching up to do...but I'll do some handicapping tomorrow in OffBeat.

    Published on: January 15, 2015

    Target has announced that it plans to close all of its 133 stores in Canada, laying off more than 17,000 employees, ending a venture that launched less than two years ago.

    According to the story from the CBC, "after high expectations, the chain failed to deliver right out of the gate as customers faced higher-than-expected prices, and empty shelves as the retailer had problems with its distribution chain. Target lost almost $1 billion in its first year in Canada, and while the losses have shrank since then, the chain is still losing money daily."

    "After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021," said Target CEO Brian Cornell in a press release. The CBC reports that "Target said the decision to close shop in Canada will cost between $500 million and $600 million in cash from the U.S. parent's bottom line, but results in a writedown of about $5.4 billion from an accounting perspective in the upcoming fourth-quarter earnings."

    According to the story, "Target says it filed an application in a Toronto courtroom for protection under the Companies’ Creditors Arrangement Act. The federal law allows companies that can't pay their debts the ability to restructure themselves. Without it, the companies and individuals that an insolvent company owes money to can technically start seizing assets. But because Target has applied under CCAA, that won't happen here yet.

    "The company says it is setting up a $70-million fund to ensure all employees affected by the move get at least 16 weeks in severance pay. The stores will remain open while the company completes the liquidation process."
    KC's View:
    Well, it was just a couple of days ago that we had a story about how Cornell was contemplating this possibility, and the commentary went like this:

    Pulling the plug on Canada would be an extraordinary repudiation of previous management's priorities … it is all going to depend on what Cornell believes will be the impact on the bottom line. And if he's going to do it, better to do it now. Just rip the bandage off.

    Well, I can't help but think that he probably got it right ... better to make the decision, live with the damage, and get focused on priorities where you can have measurable and tangible success. Hell, Cornell can't even guarantee that he'll be running Target in 2021 ... that's forever in CEO years.

    But there's a better shot that he will be for having made the tough decision.