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    Published on: February 10, 2015

    by Michael Sansolo

    Reporting in from the National Grocers Association Show...

    LAS VEGAS - There’s no way the National Grocers Association (NGA) expected the opening speaker at this year’s convention to deliver a message filled with wisdom for retailers. Yet that’s exactly what they got from Leon Panetta, the former Secretary of Defense and Director of the CIA.

    Of course to divine those lessons you have to do a little extrapolating, but not much.

    Panetta delivered a spirited message through both his speech and ensuing conversation with NGA President Peter Larkin. The message took sharp aim at the level of governmental dysfunction in Washington, DC, due to partisan politics and the resulting gridlock.

    Listening to Panetta’s comments without any background it would have been hard to tell what his personal leanings are and were. His criticisms were equally aimed at President Obama and the Democratic leadership in Congress and with their counterparts in the Republican Party.

    That even-handed blasting might well be the reason Panetta got two standing ovations from the crowd. But let’s examine how the issues he raised apply to business.

    First, Panetta highlighted how activity in government starts with leadership or crisis reaction. He recalled how throughout his long career in government he witnessed both parties coming together repeatedly to demonstrate leadership to address difficult issues from civil rights to the budget.

    More recently though, he said, action only seems to only follow a crisis. And even then, the problems aren’t always addressed; rather they are simply modified and pushed to the future.

    Business leaders need to consider that point: are your decisions based on foresight or reaction? We all complain about Washington - and frequently with good reason - but are we any different? Are we being pro-active on the wide range of issues facing us or do we simply wait to fight fires?

    The latter could be as bad for business as it is for governing.

    Panetta also made a powerful point on collaboration and compromise. He detailed numerous past battles in Washington that were settled only when all sides were willing to address any and all serious issues. Here again, think of your business dealings, especially with trading partners. Win-win solutions never happen if one side needs to win everything.

    Collaboration requires give and take and understanding the wisdom from the Rolling Stones that you simply cannot always get what you want.

    So sure, it was a political speech from a political insider. But it was also so much more.


    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
    KC's View:

    Published on: February 10, 2015

    by Kevin Coupe

    As previously noted here on MNB, John Oliver returned to HBO on Sunday night with his weekly series, "Last Week Tonight," and he was in fine form with a long-form comic dissection of the prescription drug industry and how much it pays doctors to put their medicines in people's hands.

    But Oliver also led off the show with a quick mention of RadioShack's bankruptcy, and he offered his version of what a goodbye commercial from the troubled retailer might look like.

    It is very funny...and, as usual, a little profane. (Be warned.) But mostly, it is very funny, while nailing some basic truths about the current US retail climate. You can click on it at left...and enjoy.

    KC's View:

    Published on: February 10, 2015

    The Arizona Republic reports that Walmart is expanding its grocery click-and collect service to Chandler and Mesa, Arizona, having begun the concept testing in Bentonville, Arkansas, and Denver.

    According to the story, "Online grocery items have the same prices as store items, he said. Although there is a $30 minimum-purchase requirement, there are no fees. Thousands of items — including fresh produce, meat, seafood, dairy, frozen food, bakery items, beauty products, electronics and toys — can be ordered through the service."

    The Republic goes on: "Customers visit Walmart.com/grocery and enter their ZIP code. A prompt will ask them to sign in or create a Walmart grocery account. Once they have an account, they submit an order.

    "During checkout, they must choose a designated pickup store and select a four-hour pickup window. Orders placed by 2 a.m. will be available for pickup after 8 a.m. and orders placed by 10 a.m. can be picked up beginning at 4 p.m.

    "Customers will receive a phone call to let them know when their order is ready and the specific pickup location. Once they arrive, they call a designated phone number. This will alert an associate in the store, who will retrieve the prepared order and load it into the car."
    KC's View:
    Walmart is taking this slowly now, but I'd anticipate that at some point they're going to throw this into warp drive and get real aggressive about online grocery sales, click-and-collect models, and using smaller stores as delivery depots. The goal here is to lap Amazon, and this is one way to do it while taking advantage of its bricks-and-mortar base.

    Competitors better be ready. Girding for this battle tomorrow could well be too late.

    Published on: February 10, 2015

    The New York Times reports that Sidecar - a taxi-alternative company along the lines of Uber and Lyft - "plans to use its fleet of cars to introduce a package delivery service, delivering items like food and groceries for partner companies." At the moment, there is only one food industry partner company, according to the Times - Eat24, described as "an online food-ordering company" - but the company says it "is in talks with multiple other partners to offer delivery of other sorts of items."

    The story notes that "the new service, which is now available in all of the American cities in which Sidecar operates, is essentially an open call to restaurants, grocers and stores which do not otherwise offer a delivery service."

    The Times also writes that "Sidecar, which is based in San Francisco, will face numerous competitors. GrubHub, the big online food-ordering service, recently acquired DiningIn and Restaurants on the Run, two companies that will allow GrubHub to start offering delivery for the restaurants it serves. Postmates, another start-up, owns a fleet of messengers who order and pick up food from thousands of restaurants. Sidecar will rub up against Uber, too, in its ultimate ambitions of becoming a way to delivery anything — from groceries to gourmet food — anytime, anywhere to anyone.

    "And to some degree, Sidecar’s move into deliver will also pit it against a couple of the tech titans, Amazon and Google, which have both dabbled in same-day delivery projects."
    KC's View:
    Just another example of the kinds of disruptive business models that are unfolding out there. I'm not sure that Sidecar by itself is a threat - though it could be the next big thing - but more likely, it is the confluence of all these innovations coming together and changing the retail landscape.

    I'll say it again. Competitors better be ready. Girding for this battle tomorrow could well be too late.

    Published on: February 10, 2015

    The National Association of Convenience Stores (NACS) is out with its monthly consumer confidence survey, concluding that "after a week of rising gas prices, a majority of consumers think that the good times of falling gas prices are over. Almost six in ten consumers (58%) say gas prices will be higher in 30 days, nearly double the proportion who said so a month ago (31%)."

    Still, "despite rising gas prices, a majority (54%) of consumers are optimistic about the economy, a drop from 57% in January but still the second highest level since January 2013 ... Men are significantly more optimistic about the economy than women (66% vs. 53%) ... Consumers are divided whether they will spend more over the next 30 days. One in six (16%) consumers say that they will spend more on consumer goods over the next 30 days, unchanged from the month prior when gas prices bottomed out. Meanwhile, 19% say that they will spend less."
    KC's View:
    Well, that didn't take long.

    If there seems to be one immutable economic law these days, it is that gas prices will always go up, and will always find new heights. When they go down, it is just a tease. And people who act like and believe that low gas prices and lots of availability will be forever are just kidding themselves.

    Published on: February 10, 2015

    Last week, MNB reported on the move by the Federal Communications Commission (FCC) to classify the internet as a public utility, the stated goal of which was to prevent big companies to be able to buy their way into faster service that would have slowed down or even eliminated smaller competitors.

    But the Wall Street Journal has a different take on the subject that is worth reading, arguing that in fact the move will create regulations that will diminish the age of disruptive innovation that has characterized the past 40+ years.

    Good, thoughtful piece...and you can read it here.
    KC's View:

    Published on: February 10, 2015

    Politico reports that former Florida Gov. Jeb Bush, who seems to be positioning himself for a run to get the Republican presidential nomination for the 2016 race, "has tasked former Walmart CEO Bill Simon with hiring dozens of specialists ... Simon, a close Bush friend who served under him as head of the state Department of Management Services, has been interviewing dozens of policy experts eager to work for the next in a GOP dynasty, according to multiple sources familiar with the effort."
    KC's View:
    I hope they do better than Ethan Czahor, the founder of hipster.com who was named the Bush Campaign's CTO ... and who, it has been revealed, had some charming observations made on Twitter, like...

    new study confirms old belief: college female art majors are sluts; science majors are also sluts but uglier

    or

    if there's 1 thing I know about white people it's that they love to send their money to non-white places recently hit by natural disasters

    or

    today I spotted a chick carrying a book, and I checked out the title of the book before I checked out her. what's happening to me?

    Really?

    Czahor, reportedly has deleted the Tweets, saying he wrote them years ago and no longer finds them funny. Good. (In this case, "years ago" means four or five years ago. Just FYI.)

    But I suspect that there are a bunch of folks out there who never would've found such statements to be funny. I cannot begin to express how disturbing I find such comments to be.

    Published on: February 10, 2015

    Newsday is reporting that Stew Leonard's is on schedule to open its first store early next year on Long Island, and fifth food store overall, in Farmingdale, New York.

    A Long Island store has long been in Stew Leonard's plans, but the company has taken a deliberate approach to growth; it had planned a store in Orange, Connecticut, but backed out of those plans in the face of highly verbal community opposition.

    Stew Leonard's currently operates three stores in Connecticut - in Norwalk, Danbury and Newington - and one in Yonkers, New York. There also are nine liquor stores operating under the Stew Leonard's name - including one in Farmingdale, which is across the street from the new grocery store location.
    KC's View:

    Published on: February 10, 2015

    Forbes has a story about Trinity Church in lower Manhattan, a wealthy and socially progressive Episcopalian parish that is facing off against Walmart in Philadelphia’s Third Circuit Court of Appeals.

    The story notes that at issue for Trinity, which owns about $300,000 worth of Walmart stock, is "Walmart’s sale of guns with high-capacity magazines of the sort used in mass killings.

    "The church’s rector, Rev. Dr. James Cooper, says he isn’t seeking a ban on the sale of assault weapons at Walmart. Rather, he’s fighting to force the world’s largest retailer to include a shareholder proposal in this April’s proxy materials, to be voted on at this summer’s annual meeting ... Trinity’s proposal would require Walmart’s board to oversee the sale of 'products that especially endanger public safety and well-being, risk impairing the company’s reputation, or offend the family and community values integral to the company’s brand,' as the document first filed with the Security and Exchange Commission last year reads."

    The Forbes story goes on to say that "it was the 2012 massacre at Sandy Hook Elementary School in Newtown, Conn. that proved the catalyst for Trinity’s legal action, says Rev. Cooper. He recalls having coffee hour chats with parishioners about ways to help, including shareholder activism.

    "Months after the killings, Cooper and Trinity’s legal counsel Evan Davis took their concerns to Walmart head of investor relations Carol Schumacher ... Davis was keen to learn how the retailer decides, for instance, that it won’t sell CDs with Parental Advisory warning labels, but will sell assault rifles with the capacity for 30 rounds of ammunition."

    Walmart successfully argued to the US Securities and Exchange Commission (SEC) that it ought to be allowed to not present the proposal to shareholders because it represented an intrusion into how it conducts day-to-day business. Trinity appealed to the courts, won, and how Walmart is appealing that decision.

    Walmart spokesman Randy Hargrove says that "in areas of the country where we sell firearms, we have a long standing commitment to do so safely and responsibly through trained associates and in compliance with our standards, which greatly exceed what is required by law."
    KC's View:
    I always try to be a little careful about this issue because, as I've always conceded, I was not raised in a gun culture and while I do take the Second Amendment seriously, my upbringing has an influence over how I read the Second Amendment. But I also think that a) one has to take seriously the feelings and opinions of people who disagree with you, and b) there ought to be a way for people to discuss this issue and reach some sort of compromise. Alas, as in most things these days, ideology seems to be a substitute for actual thought...

    On this particular case, from a civilian perspective, I tend to side with Trinity Church.

    Let's be clear about why Walmart sometimes seems more vigilant about the books, CDs and DVDs it sells than it does about guns - it is a direct reflection of how it believes most of its customers feel and think. (There is a prominent politician these days who is selling a book and, in all likelihood, a potential run for the presidency, who seems to believe that Beyonce is a greater threat to the nation than open carry laws. I am a big fan of neither, just for the record. But I think this is a cultural thing, and I try to be respectful even if I disagree.) From Walmart's perspective, it is about responding to the marketplace.

    But I'm not siding with Trinity Church because of that. Rather, it is because I firmly believe that more boards of directors ought to be forced to take a broader approach to oversight, with greater legal and financial culpability, than in the past. This goes for gun sales, but it also could go for bribery charges - boards know what is going on and ought to be held responsible. If they don't, they should. That's the broader issue here, and I think it makes sense.

    Published on: February 10, 2015

    Netflix announced yesterday that its products and services are now available in Cuba.

    According to the announcement, Netflix "will offer a broad range of great global entertainment to Cuban consumers as Internet access improves and credit and debit cards become more widely available ... People in Cuba with Internet connections and access to international payment methods will be able to subscribe to Netflix (NFLX) and instantly watch a curated selection of popular movies and TV shows." Among them: "House of Cards" and "Orange is the New Black."
    KC's View:
    I'm a little surprised by this - I would've thought that Cuba probably has more VHS machines per capita than most places, as opposed to DVD players and broadband connections.

    I'm also just totally jazzed by the idea that Cubans now will be able to watch Kevin Spacey and Robin Wright as Frank and Claire Underwood ... it is either going to accelerate Cuba's move toward democracy, or it is going to scare the hell out of them.

    Published on: February 10, 2015

    Reuters reports that Tesco managed to "eke out" a 0.3 percent sales increase during the fiscal quarter ending February 1, though it also saw its market share decline 0.2 percentage points to 29 percent for the same period. The story notes that Tesco's "so called big four rivals, Asda, Sainsbury's and Morrisons all saw sales decline," while "discounters Aldi and Lidl continued to gain ground."


    • At the National Grocers Association (NGA) Show in Las Vegas, David Tochinskiy of Rosauers Supermarket in Spokane, Washington, claimed the title of NGA Best Bagger Champion, bringing home a $10,000 check and a trophy. It was the 29th year of the competition, in which contestants are judged by speed of bagging, proper bag-building technique, weight distribution in the bag, as well as style, attitude and appearance.


    MarketWatch reports that "in consultancy PwC’s annual global consumer survey, 52% of about 1,000 U.S. respondents listed Amazon as one of their three favorite retailers in 2014, followed by 41% who named Wal-Mart  and 29% who listed Target."

    The story notes that "PwC didn’t ask respondents to name their absolute favorite ... 'Their prices are good' is the top reason cited by consumers in selecting their favorites, followed by merchants having the items shoppers want in stock."
    KC's View:

    Published on: February 10, 2015

    • The Grocery Manufacturers Association (GMA) announced that Jennifer Cleveland McEntire, most recently Vice President and Chief Science Officer at The Acheson Group, has been hired as Vice President of Science Operations. According to the announcement, "Prior to joining The Acheson Group, she served as the Senior Staff Scientist and Director of Science & Technology Projects at the Institute of Food Technologists, and worked closely with FDA, FSIS, and CDC to provide insight on the current state of science and industry food safety practices related primarily to food defense and product tracing."
    KC's View:

    Published on: February 10, 2015

    ...will return.
    KC's View:

    Published on: February 10, 2015

    “The company with the most actionable data that actually acts on it is the company most likely to win.”
    - Kevin Coupe, "The Content Guy,” MorningNewsBeat.com


    KC's View: