business news in context, analysis with attitude

Published on: January 19, 2015

i>by Kevin Coupe

Google announced last week that it is withdrawing Google Glass, which it had touted as being the next big thing in wearable computer technology, from the marketplace. The high-tech glasses, which cost $1500 apiece, no longer will be available, though it is expected that a new version could be available later this year.

According to the CNet story, "Google recognized that the product should appeal to real people who only want gadgets that can contribute to some form of real life." However, factors such as "the abject design of the product and its hefty price tag meant that the last people who'd be wearing Glass down life's catwalk were real people.

"Instead, too many nerds -- the sort whose sense of 'falutin-ness was more exalted than their common sense - wore Glass in public and insisted upon their supposed rights. People didn't take kindly to someone looking like a borg and potentially filming them eating their chicken soup or snogging with their loved one.

"The more that Glass-wearers protested that they were the advanced party of the enlightened, the more they became Glassholes."

Essentially, what it all seems to mean is that Google Glass is an idea ahead of its time.

What makes this interesting is a story MNB took notice of last week:

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."

A friend of mine commented on this far better than I could:

"What kind of bubble does Tesco / Tesco Labs operate within? Apparently they have no ties to Google or they would have known that Glass was struggling mightily and not worthy of investment. Google is now pulling back from (some insiders say completely abandoning) Glass."

It may explain a lot about Tesco's broader problems.

At the very least, it is an Eye-Opener.

Published on: January 19, 2015

Last week, MNB reported on an Associated Press survey revealing that "66 percent of Americans favor requiring food manufacturers to put labels on products that contain genetically modified organisms, or foods grown from seeds engineered in labs. Only 7 percent are opposed to the idea, and 24 percent are neutral."

There are some, of course, who would suggest that these survey results should be taken with a grain of salt. And others who would argue that they should be taken with a truckload of salt. Such people will be heartened, no doubt, by a story in the Washington Post saying that "a recent survey by the Oklahoma State University Department of Agricultural Economics finds that over 80 percent of Americans support 'mandatory labels on foods containing DNA'."

The Post writes: "The Oklahoma State survey result is probably an example of the intersection between scientific ignorance and political ignorance, both of which are widespread.The most obvious explanation for the data is that most of these people don’t really understand what DNA is, and don’t realize that it is contained in almost all food. When they read that a strange substance called 'DNA' might be included in their food, they might suspect that this is some dangerous chemical inserted by greedy corporations for their own nefarious purposes."

Published on: January 19, 2015

Crain's Chicago Business reports on how that city's upscale grocery market is betting "more crowded," and how Whole Foods, amid a six-store expansion made possible by its takeover of former Dominick's stores, is looking to differentiate itself by "adding in-store dining options and bars to each, hoping to give adult customers more reasons to visit."

At one of the stores, "the company is partnering with an outside operator, Raw Foods, to open a branded, in-store location featuring raw foods and vegan dishes ... While the partnership with Raw Foods, its first with a third-party operator in the Chicago market, marks new territory for the upscale grocer, it continues Whole Foods' push to diversify its supermarkets away from being solely a place to shop to more of a social destination."

“Simply put, we're looking for ways to make the places more appealing,” Michael Bashaw, president of Whole Foods' Midwest region, tells Crain's “If bricks-and-mortar (grocers) are going to survive, they must offer a compelling experience to customers.”

Published on: January 19, 2015

Food Safety News has a story about how the US Food and Drug Administration (FDA) is sponsoring a competitive grant program that is designed "to fund food-safety training, education and technical assistance consistent with standards being established under the Food Safety Modernization Act (FSMA)."

According to the story, "Priority will be given to grant applications to train owners and operators of small and medium-size farms, farmers just starting out in business, socially disadvantaged farmers, small food processors, small fruit and vegetable wholesalers, and farms that lack access to food safety training and other educational opportunities."

Published on: January 19, 2015

• CityWire reports that Walmart CEO Doug McMillon continues to make management changes at the retailer, with the latest example being the departure of John Aden, executive vice president of sales innovation, who is said to be leaving to "pursue other opportunities."

In addition, the company said that "Jane Ewing, senior vice president, business development for Walmart U.S., will lead the 'Next Generation Stock-up' work group," and that Jeff McAllister, senior vice president of Walmart Innovations, "will lead the 'Next Generation Supply Chain' group. Latriece Watkins, senior vice president, snacks and beverages at Walmart U.S. will lead the 'Ways of Working' group, the company said.

Published on: January 19, 2015

Hyatt Hotels Corp. has announced that it plans to "offer free Wi-Fi at all Hyatt hotels worldwide, providing connectivity and convenience regardless of booking method or loyalty program participation. Free Wi-Fi will become available to Hyatt guests around the world in February 2015. Travelers will be able to access free Wi-Fi on an unlimited number of mobile devices or laptops in Hyatt-branded hotel guest rooms and social spaces.

“Internet connectivity is no longer an amenity. It has become an integral part of travelers’ daily lives and a basic expectation,” said Kristine Rose, vice president of brands for Hyatt. “Travelers shouldn’t have to remember which brands or locations offer it for free or the strings attached to get it.”

Published on: January 19, 2015

The BBC reports that the European Commission has reached a preliminary finding that Amazon has a tax deal with Luxembourg, a member of the European Union, that probably constitutes illegal "state aid."

According to the story, "The European Commission began a probe of the tax arrangement last year, saying that it had suspicions it broke EU rules ... Commission doubts over the Amazon deal included whether Luxembourg had properly looked into Amazon's 'transfer pricing' proposals about how money would be moved between different Amazon subsidiaries.

"Doubts also existed about whether the country had assessed that the proposed tax regime was in line with market conditions before agreeing the deal in 2003, the European Commission document said."

Both Amazon and the Luxembourg government have denied that they broke any EU tax rules.

Published on: January 19, 2015

• Last week, there were stories circulating - largely based on speculation from one analyst - that Kroger was considering a major acquisition that would allow it to expand into markets where it currently does not operate.

Now, the Tampa Bay Business Journal reports that one strong possibility is " Jacksonville-based Bi-Lo Holdings LLC, which owns and operates more than 800 Bi-Lo and Winn-Dixie stores spread throughout Florida, Georgia, Alabama, Louisiana, Mississippi, Tennessee and the Carolinas."


• The Wall Street Journal reports that the US Securities and Exchange Commission (SEC) has announced that it is "reversing a controversial December decision in which agency staff agreed Whole Foods Market Inc. could exclude a nonbinding shareholder proposal that would make it easier for investors to nominate directors at the high-end grocer. Whole Foods said it should be allowed to exclude the proposal because it was offering a similar corporate governance change.

"The SEC said going forward it would take 'no view' on whether companies could leave such proposals out of their proxy materials. Instead, it plans to review a rule that has allowed firms to exclude measures if management plans to offer similar changes to its governing documents. The reversal will affect all companies, not just Whole Foods."


• The Union Gazette reports that Publix is about to go chain-wide with a digital coupon program described by the paper as "a quite cool method that, with minimum work from shoppers, makes it easier to save revenue at the checkout counter." No loyalty card required.


• In New Hampshire, the Union Leader reports that documentarian Jay Childs has raised more than $66,000 using the Kickstarter crowd-funding site from 607 financial backers, which will allow him to complete the movie he is doing about the battle for ownership of Market Basket.

That battle was center stage in New England for much of last year, as two factions of the Demoulas family fought over ownership of the company, with the Arthur T. Demoulas side of the family eventually winning out with the support of company employees.

According to the story, Childs hopes to have the film completed by late summer 2015.


• The Associated Press reports that the US Postal Service (USPS) is proposing "slight increases for mailing postcards and international letters — but wants to leave first-class "Forever" stamps at their present 49 cents ... Under a filing with the Postal Regulatory Commission, letters to international destinations would rise from $1.15 to $1.20. Postcards would rise from 34 cents to 35 cents."

Published on: January 19, 2015

• A memo has been circulated within C&S Wholesale Grocers announcing that Mark Verdi, who was named president of the company less than a year ago, has left the company. He is being succeeded by Rick Cohen, the company's chairman/CEO, who said in the memo that he is reasserting control of the company.

Published on: January 19, 2015

Got the following email from an MNB reader on Friday, wanting to weigh in on a discussion we were having linked to a Tiffany ad campaign targeted at same-sex couples:

I have to take issue with your comments today around homosexuality.  Tolerance and acceptance is a two way street.  As a libertarian I believe that same sex couples have a right to be married.  I also feel that the government should get out of the marriage business altogether.  The government should recognize only civil unions.  Churches and religious people have a constitutional right to their own beliefs.  Many people have deeply held religious beliefs that other people may not agree with.  That doesn’t make people with deeply held religious beliefs bigots or idiots.  Homosexuals do not have a civil right to force individuals to violate their deeply held religious beliefs, nor does the government according to the US constitution.  Today, nobody is advocating discriminating against the LGBT community in regards to life, liberty or the pursuit of happiness.  Nor is anyone advocating discrimination based on hiring, serving them as customers or anything like that.  That straw man is completely false.  Case in point, Chick-Fil-A.  The owners have a deeply held religious belief that marriage is between one man and one women.  Although I may personally disagree with that; not only do they have a right to believe that, I will fight to the bitter end to allow them to hold those beliefs. They deserve the same amount of respect as homosexuals that hold a different belief.  They have never advocated any discrimination against either employees or customers based on that belief.  This mentality that we must punish and/or force people to accept things that are against their deeply held religious beliefs is both illiberal and  un-American.  For the CEO of Mozilla to be forced to step down from his position because over 4 years prior he gave $1,000 to a cause that believes that marriage is between one man and one woman should send a chill down all of our spines.  These were the same beliefs shared by President Obama during the same time he gave the donation.  Should anybody be shunned or blacklisted because they are unenlightened or don’t bow down to the alter of political correctness defined by someone else.  To force a baker to make a gay wedding cake should do the same.  Is there such a short supply of bakeries that we have to force an Evangelical Christian to bake a gay wedding cake, or a Nazi or pornography cake for that matter.  Should we fine or force an Evangelical Christian or Muslim photographer to participate in a gay wedding ceremony.  Should we force a Kosher deli to sell bacon because it is inconvenient to go to another store that sells bacon.  Everyone needs to take a deep breath, put things in perspective and respect each other’s beliefs.  Especially deeply held religious beliefs!

To be clear ... I would never suggest that the government force a religious body to perform a wedding ceremony that violated religious beliefs.  To my knowledge, that hasn't happened in any of the states where same sex marriage has been approved.  All of the marriages have been civil ceremonies (though there is a legal difference between civil unions and marriage, as I understand the law).  The only time a cleric of any kind has performed a same-sex wedding has been when that person and/or religion approves of such a marriage.

As for businesses ... well, I think it gets tricky.  In the case of Chick-fil-A, I don't anybody tried to force management to do anything.  There was simply a reaction to a statement made by the CEO that some found offensive.  He had a right to hold beliefs and make the statement, they had a right to object, other people had a right to rally around the CEO in support ... in other words, the system worked.  My position then and now was simply that businesspeople have to be careful about what they say, because everything you say might be seen by anyone and everyone, and words have consequences.  Everyone is a potential customer.

I'm uncomfortable with the idea that anyone loses their job because of a political position.  In the case of the Mozilla CEO, if I remember correctly, the board made the move because it felt that the position put him at odds with many of the company's employees and customers. I'm still uncomfortable with it, but I'm not sure what to do about it ... because if you've alienated customers and employees, it compromises you as a leader.  On the other hand, before the contretemps, I had no idea what his political beliefs were;  I just wanted Mozilla products to work well.  Did his political beliefs matter to that business mission?  Probably not ... though if you were a gay man in a same-sex marriage working for him, you might feel differently.  But I agree with you that having an opinion and discriminating against people are two entirely different things.

This all gets complicated, of course, because it isn't just about acceptance or tolerance ... it often veers into discrimination.  Which is illegal.  I'm not sure that the forcing-a-kosher-deli-to-sell-bacon example is a fair one ... the better question is whether it is illegal for a bakery or deli to not serve an interracial couple.  What if the person owning that establishment had religious beliefs making miscegenation immoral and unacceptable?  How about a real case, where an Arkansas shooting range owner declared it a Muslim-free zone, and then refused service to a couple of South Asian descent that was Hindu, not Muslim ...just because they looked Muslim.  (Though what the hell a Hindu - who is supposed to "believe that all life is sacred, to be loved and revered, and therefore practice ahimsa, noninjury, in thought, word and deed" - is doing at shooting range is beyond me.  And to be fair, there are differing opinions about reasons and rationales.)

I don't want to violate anybody's religious beliefs, but I also think that it is possible to use religious beliefs as a justification for discrimination.  Where does the line get drawn?  I'm not sure how you determine intent, but I'd personally rather err on the side of non-discrimination.  I also think that where the line gets drawn depends on who is doing the drawing ... especially if you are the one being discriminated against.  And I don't blame them at all.

Here's the good news in all this - 3,587 miles from where I'm sitting right now, terrorists are committing atrocities in the name of what they feel is justified religious intolerance.  At least we live in a country where we can have a reasoned, civil and even nuanced discussion about these issues.  What worries me is that too often, we seem incapable of having reasoned, civil and even nuanced discussions about anything.

I hope I've qualified my opinion sufficiently.




Lots of thoughts about what Kroger should buy. One MNB user wrote:

I would love to see Kroger purchase Family Dollar - take them in a whole different direction.  Fun!

And another:

Kroger has a big void on the west coast, especially in Northern California. Several of my cohorts here on the west coast think that Raley’s might be on Kroger’s radar screen for an acquisition. Good store, good locations, a good name, and Kroger would keep the good Raley’s name and would only improve the overall operation of Raley’s.

And another:

Myself I would think that Kroger would want to look for other high end specialty chains to broaden their portfolio, like Mariano’s in Chicago, Heinen’s in Cleveland, or even Dierberg’s in St. Louis. These are all well run chains that would benefit from the broad portfolio of Kroger P/L and would need little tweaks at best.

And still another:

My picks:

1. Tops
2. Shaw's
3. Giant Eagle

Long shot: Price Chopper. And Chopper would be wise to accept an offer.

I've learned one thing over the years ... which is that one sure way to raise Neil Golub's ire is to suggest that Price Chopper might be for sale. So "long shot" might be an understatement.




From MNB reader Rick Brindle:

So sorry to hear of Natan Tabak's passing. He was a gentleman and the consummate professional. He will be missed. My most sincere condolences to his family.




Finally, I got the following email from MNB reader Troy Patterson, responding to last week's piece about how dictionary companies have had to change their business model:

With the expanse of the internet we can think about companies that are now nonexistent that used to produce products such as the encyclopedia set , the large road atlas, paper maps and also perhaps soon to be the “paper” magazine.  Other than the paper magazine, all of the other products I mentioned are deemed unnecessary with the owner of a smartphone, GPS device.  It will be some time yet before we see the paper newspaper and magazines become extinct.

Maybe.

Published on: January 19, 2015

The Seattle Seahawks will play in the Super Bowl for the second straight year, hoping that they can repeat as NFL champions when they play the New England Patriots on Sunday, February 1.

The Patriots won the AFC Championship game yesterday, dismantling the Indianapolis Colts in decisive fashion and winning 45-7.

The Seahawks, on the other hand, engineered a miraculous 28-22 comeback against the Green Bay Packers in the NFC Championship game, with almost nothing going right for the Seahawks offense until the last few minutes of the game, when they managed to take the lead with the help of a successful onside kick. The Packers tied the game, but the Seahawks then won the game in overtime.

Published on: January 19, 2015

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