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    Published on: August 4, 2015

    by Michael Sansolo

    The Christian Science Monitor commented on something in politics recently that should make us all think about those future consumers we are always seeking and might even explain why we spend so much time talking about Amazon or Aldi here at MNB.

    The Monitor noticed a powerful change in how former Texas Gov. Rick Perry is campaigning this year compared to his 2012 effort and no, it has nothing to do with his glasses. Rather it is the incredible absence of religion in his speeches. That's a marked difference since 2012.

    The reason for the difference has nothing to do with Perry’s feelings toward faith. Instead it recognizes a political reality within the electorate. While faith-based voters are certainly an important bloc in Republican primaries, young voters are becoming increasingly important and their feelings are very different.

    As the Monitor pointed out, younger voters aren’t simply more ambivalent about the mix of religion and politics. They are ambivalent about religion overall with many more professing to have either no belief system or no need for affiliation with a religion.

    Think about that as you reflect on some other news about the younger generations. Last week Kevin wrote about the large percentage of Millennials who continue to live at home and he noted - correctly to my mind - that the cause is economic realities, rather than love of their parents.

    There’s a lot of support for that thinking. Recent articles in various newspapers have cited the poor economic start for the Millennial generation, noting that they are earning less than previous generations at the same age even though a higher percentage of them have college education (and crushing student debt to go with it).

    Here’s why this matters to you. We start with a generation that is far more likely to eschew all institutions than their parents or grandparents, whether it’s religion, marriage or government. So it’s hardly a leap to suggest they won’t shop like those previous generations either.

    I personally love the local connections that so many retailers nourish and maintain in some cases for generations. Yet I wonder if the young generation - one that vocally pushes for local products - will feel that same connection. Or will they consider local merchants one more relic of the past and opt for on-line solutions.

    Combine that with financial need this generation is already showing and we can easily expect that new forms of price-based competition are going to be a powerful force for the very near future or at least as soon as Millennials can move out of the basement.

    The challenge to business is to recognize this new age wave and all the issues it is bringing. It seems a certainty that the value equation these new shoppers will demand for years to come is going to be extremely different from what we have today and we’ll all need to align with that new world.

    Incredibly it may be Rick Perry who is giving us an interesting lesson in the need to reframe and rephrase our pitch to meet these new times. The politician derided for his “oops” moment four years ago might just be showing us the future.

    Michael Sansolo can be reached via email at . 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: August 4, 2015

    by Kevin Coupe

    There was a lovely piece in the Huntsville Item that was forwarded to me by an MNB reader, about a woman named Brenda Shaw who has worked at the Kroger store there since the day it opened in 1981. Last Friday was her last day at work, and employees and customers alike came in to celebrate with her.

    "It’s that camaraderie," the story says, "between the employees and customers that Shaw says she will miss the most about working at the grocery store. She can still recall when she first applied for the job and receiving that phone call from the manager telling her she got the position."

    Since then, the Item says, "Shaw has worked in various departments throughout the store, including the deli and pharmacy, and for the past 15 years she has worked as a cashier. During her time, she has seen children who began going to the grocery store with their families, grow up and start shopping at the store with their own families ... Even though she will no longer be a member of the Kroger team, Shaw says she will still be around the store and staying in touch with her friends at the store.

    "'I may not be seen every day, but you may see me every now and again. You’ll never know when you’ll see me walking down the aisle,' Shaw said. 'I will come in always, and celebrate the workers that are still here and talk and see what’s going on. I plan to be aware of everything that’s going on. I’m their biggest cheerleader'."

    She sounds very special ... but it is worth remembering, I think, that there are many stores in this country with people like Brenda Shaw working in them. Which is not to diminish her importance, but to point out that is people like this that make the retail environment work. People who go to work, serving as ambassadors for their stores, and making big and small differences in people's lives ... in many ways more important than people with grander titles and bigger offices.

    It is an Eye-Opener.
    KC's View:

    Published on: August 4, 2015

    The Santa Barbara Independent reports that "a class action discrimination lawsuit was filed in Santa Barbara Superior Court against Haggen Food & Pharmacy on behalf of William Morris, a 60-year-old developmentally disabled man who had worked as a courtesy clerk for over three years at the Fairview Vons location that Haggen bought, and on behalf of all California-based developmentally disabled courtesy clerks that Haggen has laid off since the beginning of this year."

    The complaint says that Haggen "unfairly terminated developmentally disabled courtesy clerks when they 'engaged in a pattern and practice of discrimination against developmentally disabled employees by disproportionately terminating them from Haggen employment'."

    Haggen - which added 146 stores to its 18-unit fleet when it acquired supermarkets that had to be divested because of the Albertsons acquisition of Safeway - has been making cuts to compensate for the fact that sales are considerably below projections and its stores have been unable to get much traction in the new markets.

    Haggen has responded to the suit by saying that the "decision to eliminate the Clerks Helper job classification in our Pacific Southwest Region stores was made out of business necessity.” The story says that Haggen "expressed remorse for those people who are now out of work and claims to be hiring ex-employees back as well as helping them find jobs elsewhere."
    KC's View:
    guess that this was inevitable once Haggen announced the laying off of developmentally disabled workers. Though, to be fair, I have no idea whether it is justified ... I guess we'll have to wait for the case to be settled one way or the other.

    It does begin to seem as if Haggen just cannot get a break ... but in this case, whether the layoffs were justified or not, it was just tone deaf to lay these folks off. As I pointed out when it first happened, the programs that place developmentally disabled workers in stores tend to be community-driven programs ... and by eliminating all these workers, Haggen is leaving a bad taste in the mouths of customers and communities that it wants and needs to serve. (Beyond the fact that the company's stores are not exactly bowling anyone over.)

    Here are two things that ought to happen, right now.

    Somebody at a company competing with Haggen ought to hire those developmentally disabled folks right now. Don't put out a press release, don't make a big deal of it ... Just do it. Let the karma then work in your favor.

    And at Haggen, they need to hire somebody with strong public relations sense who is going to tell them what they need to know, even if it is not what they want to hear.

    Published on: August 4, 2015

    The Los Angeles Times reports that when the federal government issues its 2015 Dietary Guidelines for Americans, the premise will be that "when it comes to a healthful diet, the whole is greater than the sum of its parts."

    According to the story, "The actual nutrition recommendations are the same as those in the 2010 guidelines, but the approach is different ... First, it's much easier for people to think of what they consume over time — and modify their overall eating pattern accordingly. Second, nutrients in foods may have synergistic effects when eaten in combination, interacting to create different health effects than when eaten alone."

    Another change in approach reflects a recognition that not all nutrients are created equal - mega-3 fatty acids in the fish, for example, are better than omega-3 fatty acid supplements.

    "I think it's a really important paradigm shift," Dr. Frank Hu, professor of nutrition and epidemiology at Harvard School of Public Health and member of the advisory committee, tells the Times. "In real life, we don't eat isolated nutrients or foods. We eat complex meals, so it makes sense to look at the totality of diet: foods and nutrients in the combination, frequency and quantity that they are habitually consumed."
    KC's View:
    Anything they can do to make these recommendations accessible and understandable is a good thing .... though I guess it remains to be seen whether Americans will pay any attention. I proof, I guess, will be in the pudding ... you'll excuse the food reference.

    Published on: August 4, 2015

    The Chicago Tribune reports on how UnitedHealthcare has created a program called Healthy Savings, designed to promote healthier eating.

    According to the story, "Insurers often tell their customers to eat healthier and exercise, and they have a financial motive: Promoting health and wellness may reduce illness and medical costs. But it's not easy to reach consumers. UnitedHealthcare is trying something different.

    "The nation's largest health insurer has launched a digital coupon program with select supermarkets in which members save money when they buy fruits, vegetables, whole-grain bread, lean proteins and other qualified foods. The goal is to make healthier food more affordable, said Craig Bartholomew, vice president of account management in UnitedHealthcare's Illinois market."

    "The USDA encourages higher consumption of fruits and vegetables, which are typically more expensive than processed foods. A 2011 study found that purchasing foods that provide important nutrients such as potassium, dietary fiber, vitamin D and calcium could add up to $380 annually to consumers' grocery bills."

    The story goes on: "Public policymakers have made efforts to help consumers eat healthier — food-assistance programs, for example, provide coupons to buy fruits and vegetables. Now the private sector is starting to put its money where its mouth is."

    Milwaukee and Chicago are the first two markets where UnitedHealthcare is testing the program. UnitedHealthcare doesn't choose the items on sale each week, but rather depends on Solutran, described as a "payments processor with experience in the Women, Infants and Children food-assistance program." And Solutran "uses food-rating company Guiding Stars to select products using the company's formula to rate nutritional quality based on information from food labels."
    KC's View:
    This makes perfect sense. It may cost money to underwrite the price reductions, but you'd think in the long run that it would have a positive impact on insurance payouts. I love this.

    Published on: August 4, 2015

    TechCrunch reports that Amazon has made changes to elements of its Prime program that allowed members "to share their shipping benefits. The changes are designed to limit the ability for customers to share Amazon Prime subscriptions with those who are not actually members of their immediate family." Now, Amazon will only allow Prime members to share benefits with one non-family adult.

    The benefits include free, two-day shipping, Prime Instant Video streaming, access to Kindle Owners’ Lending Library, Prime Early Access and Prime Exclusive deals.
    KC's View:
    This is the kind of stuff I think we're probably going to see more of from Amazon, as it tries to figure out a nip here and a tuck there can improve its profitability. This alone won't make an enormous difference, but little things do tend to add up ... and could, I suppose, help Amazon be more price competitive against the likes of Walmart and Jet.

    The only question is when and if Amazon crosses the line and starts cutting things that impact consumer loyalty.

    Published on: August 4, 2015

    Internet Retailer reports on a new survey by BizRate Insights saying that "More than half of consumers who intend to buy but then abandon their carts say they would be lured to complete their purchase with a discount of up to 20% ... Nearly six in 10 'True Cart Abandoners' (59%) say they would complete their purchase if they could get a discount of up to 20%, and 20% of consumers surveyed said they would be more likely to buy the items in their cart if they receive notice of a sale."

    While technical issues and out-of-stocks often prevent consumers from completing a sale, the survey suggests that in other cases, consumers may just be waiting to buy later, and would be encouraged to do so if offered an additional discount. And for whatever reason, the survey says that consumers are most receptive to those new inducements after 6 pm.
    KC's View:

    Published on: August 4, 2015

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

    • Howard Schultz for president?

    Multiple media reports say that "high powered friends" of the Starbucks CEO are urging him to run for the Democratic presidential nomination as an alternative to Hillary Clinton, the presumptive nominee who nonetheless seems to be dealing with an erosion in some of her support and questions about her trustworthiness.

    The story notes that while Schultz has long expressed opinions about the role of government, he also has suggested that it is unlikely that he would run for public office.

    On the other hand, I'd pay real money to see a debate between Schultz and Donald Trump.

    Fortune reports that Walmart, Amazon, Sears and Kmart have agreed "to pay more than $300,000 to settle an investigation by New York State regulators into alleged sales of banned toy guns." The story notes that the retailers "had been under investigation after allegedly selling toy guns that were prohibited under state law for being too realistic to New York residents who bought the products online."

    The story says that "the retailers sold more than 6,400 banned toy guns in New York between 2012 and December. Walmart will pay the bulk of the fine — $225,000 — because the recent probe found that the company violated the terms of an earlier agreement with the state, in 2003, when the company was found to be selling prohibited toy guns."

    • Publix said that its Q2 sales "were $8 billion, a 6 percent increase from last year’s $7.5 billion. Comparable-store sales for the second quarter of 2015 increased 4.1 percent ... Net earnings for the second quarter of 2015 were $482.7 million, compared to $404.1 million in 2014, an increase of 19.5 percent."
    KC's View:

    Published on: August 4, 2015

    • Seattle-based PCC Natural Markets announced that it has hired Darrell Vannoy, most recently Vice President of Sales and Merchandising at Metropolitan Markets there, to be its new VP of Merchandising and Procurement.
    KC's View:
    I know Darrell a bit, and he's a great guy ... PCC is lucky to have him.

    Published on: August 4, 2015

    Vincent Marotta Sr., who invented the Mr. Coffee machine along with Samuel Glazer, died last weekend at age 91.

    Even more interesting, is this little fact - Marotta was a former professional football player who also had signed with the St. Louis cardinals baseball team, personally recruited Joe DiMaggio to do television ads for Mr. Coffee ... a decision, it could be argued, that was instrumental in the enormous success of the brand when it was introduced.
    KC's View:

    Published on: August 4, 2015

    Yesterday, MNB took note of a New York Times story about Dan Price, the CEO of credit card processor Gravity Payments, who made news last April when he decided to cut his million-dollar salary to $70,000 a year so he could give raises to a number of his employees that would, in essence, make $70,000 a year the minimum wage at Gravity.

    It did not turn out as he would have hoped.

    While some praised him, others felt that Price had a political motive in mind, that he was making other employers look bad, and that his decision had more to do with getting attention than making good economic sense.

    (The MNB coverage can be read here.)

    One MNB user responded:

    For those of us who are old enough to have managed through increases in the minimum wage we can assure you that what happened at Gravity Payments where higher earners felt they should get a similar increase is a very real example of human resource dynamics.  When the minimum wage is raised, one of the unintentional consequences is that many (most?) other people feel they deserve the same percentage increase.  Without trying to further debate the merits of increasing the minimum wage, history shows that the increases create artificial upward pressure on all wages.  I have not seen this issue getting focus in the discussions on raising the minimum wage, but I predict you will hear a lot about it once the increases go into effect.  It will be used by management, non-management, government and union workers as a rational for increased wages.  The explanation of why this is a problem from an economic policy point of view is beyond the space available here, but the simple explanation is that increases in costs must be offset with increases in productivity or absorbed by consumers in price increases, neither of which are assured.

    From another reader:

    Can't believe KC that you are touting this not a socialist move! It most certainly is and his upbringing had nothing to do with it. His brother, who is cut from the same cloth, disagrees and is suing. Let's see how this turns out. Plus, it is obvious this guy has packed away millions (according to his brother) so is he really making a sacrifice? Or just making news. I feel sorry for the people who helped get him where he is...and by his actions, he forces them to leave. Let's see how long this business model lasts. Just like Seattle's minimum wage hike will cost jobs in the end...

    Well, it is interesting that you believe the brother and not him.

    Me, I have no idea who to believe.

    It seems to me that a lot of people are taking real pleasure in Price's problems, but I cannot understand why anyone would not want this to work. I can understand being skeptical, but why would you root against him ... even if everything you know about economics and human nature tells you that it can't.

    I accept that it may not work in the long run. But I'm still kind of hoping it will.

    We wrote yesterday about a Washington Post report that Stewart Parnell, the former CEO of the now-bankrupt Peanut Corporation of America (PCA), is facing a possible life sentence related to his company's implication in a salmonella outbreak across 46 states that killed nine people and sickened some 700 others.

    I commented in part:

    I still think that in lieu of a life sentence, they should make this clown eat the contaminated peanut butter. Three times a day, every day. Doesn't sound like cruel and unusual punishment to me ... in fact, it sounds just about right.

    I was amused to see that Parnell's attorney told the Associated Press that the life sentence recommendation was "truly absurd," adding, “We hope the judge will see that Stewart Parnell never meant to hurt anyone. He ate the peanut butter himself. He fed it to his children and to his grandchildren.”

    Really? Because I'd like to see video proof of them eating products made with the peanut butter products that came from his factory. I'm not at all convinced that it exists, since how could anyone who knowingly made up lab results and shipped out contaminated product feed that poison to his family? And if he did ... well, if I were a member of his family, I'd have some choice words for him. (Three words, to be precise. The first one would start with "w," the second one with "t," and the last one with "f.")

    One MNB user responded:

    Hey in China they would have executed him!

    From another reader:

    First of all, I agree something harsh needs to be done to this creep, and I seriously doubt too that he ate and his family ate that bad peanut butter.  But I find it incredibly amazing he did all these things himself?!?!  Did anyone working the plant(s), office(s) say or do anything?  C’mon if you knowingly were a part of this crime or cover up shouldn’t they also be held accountable.  I know we all have to “follow orders” but at what point does your integrity or decency fly out the window?

    There are others being prosecuted. But as the top guy, they're reserving the harshest sentence for him. Seems fair to me.

    And from another MNB reader:

    I frequently see people arguing against government regulation in trade blogs and news sites, stating the ‘market’ will take care of itself.  Bad, irresponsible businesses will shutter when consumers stop buying from them.  But this is one of many examples of why we need regulations and inspectors--because there are too many people whose priorities are selfish. Individual consumers can’t track down these issues alone. And even if they could gain substantive proof without first being harangued with slander and libel suits, how many people would die in the mean time?  Sadly, this is why we need trial lawyers who, just as often, are just as selfish.  We have such a wonderful imperfect system.

    And another:

    I do believe senior executives need to be held responsible for food safety, as well as oil spills -- and anything that shows disregard for any living thing, flora or fauna.  Obviously it takes a country like Brazil to throw oil company execs into prison after an oil spill off of their coast, vs. USA.    But I do like your eye for an eye recommendation to eat the contaminated items…till death assuming you mean.  Ditto for the trophy hunters.  Hold people accountable for disregard of any living thing; i.e., hunt them down and teach them a lesson they won’t soon forget.

    I'm not sure I'm quite ready to have the dentist who shot that protected lion to be hunted down by either other hunters or by lions ... not yet anyway.

    On the subject of Blue Bell's expected return to the market, one MNB user wrote:

    We Texans are very much looking forward to its return and knowing the Company as well as we do, we believe they will go the extra mile to keep its customers matter how they got here. Once they get the Texas market back, others will follow.
    KC's View: