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    Published on: November 9, 2015

    by Kevin Coupe

    The New York Times this morning has a piece noting that as the economy improves and unemployment numbers go down - as they did last week - the top concern and priority for many employers is worker retention, an issue that is pervasive across virtually business sector.

    For the moment, what this means is that employers are beginning to focus on reshaping their cultures so that employees feel more engaged with the company and their work, believing that this is critical to retention.

    Indeed, a 2015 report from Deloitte says that "organizations are recognizing the need to focus on culture and dramatically improve employee engagement as they face a looming crisis in engagement and retention." And the Times notes that "a study from Spherion, a recruiting and staffing company, of 225 human resource managers showed that far fewer employers were concerned about employee costs this year than last."

    One problem may be that employees may have different priorities than employers. For example, while employers may focus on raising wages, studies show that, except in sales, wages are not in the top five reasons people change jobs.

    The Times continues: "It’s not surprising that employers should worry about losing their best workers as the economy gets better and job options open up. But a vastly changed work culture and the advent of the consumer Internet have altered the familiar cycle.

    "Benefits are different from what they were 20 years ago. Retirement savings, for instance, have become more portable as 401(k)’s have largely replaced traditional pensions. But the Internet has brought changes that are every bit as radical to job hunting and hiring. LinkedIn profiles advertise workers’ skills and experience to the world. Sites like provide insight into a business’s culture that wasn’t available in the past."

    As one expert puts it: "Workers have changed faster than the workplace."

    In many ways, I think, the Times puts its finger on the real problem in its lead: "Most employees — no matter how many years they have been with a company or how much talent and hard work they bring to the table — feel disposable. And most employers do little to discourage that feeling."

    I think that's absolutely true.

    But here's the thing. I've always felt this is true. I think I've been writing about this for most of the almost 14 years that MNB has been in business.

    But I also think that if businesses are going to really address this issue, it can't be situational. It can't be "business is good, unemployment is down, so I have to engage my employees, but if business goes south and unemployment goes up, I don't have to worry about it anymore."

    Engaging employees and understanding that they want to feel valued has to be a persistent and consistent way of doing business. The shift in employee priorities is not a temporary thing ... and employers have to take it very seriously. Permanently.

    It is an Eye-Opener. The season for employee disposability has turned, turned, turned.
    KC's View:

    Published on: November 9, 2015

    The Los Angeles Times reported over the weekend about the collapse of Fresh & Easy Neighborhood Market and how Ron Burkle's Yucaipa Cos. was unable to save it after it collapsed under the ownership of British retailer Tesco.

    The story notes that "last month, Fresh & Easy sought Bankruptcy Court protection for the second time in two years. Stores will be closed by mid-November. And employees have filed suit accusing the grocer of violating state rules that require at least 60 days' notice for layoffs.

    "Despite efforts to shake up the chain under Burkle, the problems plaguing Fresh & Easy got worse, employees and analysts said.

    "Beyond a few experiments, Burkle never invested the money to enact a vision of attracting affluent shoppers with upscale convenience. The chain failed to communicate the stores' mission. And cost cutting, price increases and distribution snags turned off even loyal customers."

    The original vision, the story says, "was to transform the struggling company into a chain of healthful convenience stores, a kind of Whole Foods meets local mini-mart. Eventually, Fresh & Easy was expected to be rebranded as Wild Oats, a brand of organic and natural foods owned by Burkle.

    "To test the concept, Yucaipa rebranded a Scottsdale, Ariz., store as Wild Oats: A Fresh & Easy Market earlier this year. Another Las Vegas store also experimented with new ideas such as a hot food bar and an espresso bar.

    But Yucaipa executives didn't anticipate how crowded the grocery industry had become, especially among those specializing in healthful fare, analysts said. During the 1990s, when Yucaipa was 'master of the universe in the supermarket sector,' there was significantly less competition, said Burt Flickinger III, managing director of consulting firm Strategic Resource Group.

    "Since then, Yucaipa has also diversified its investments beyond supermarkets, so it can no longer focus all of its time and money in the grocery space, Flickinger said. That lack of focus, combined with hesitation over its upscale convenience idea, doomed Fresh & Easy, he said."

    The entire story is available here.
    KC's View:
    In so many ways, the problems that Fresh & Easy faced seem both self-imposed and circular. When Tesco launched the chain, there seemed to be a fundamental misreading of the marketplace that resulted in stores that were underwhelming. When Tesco failed, and Yucaipa took over, it also misread the market, and while the ideas for reviving the company may have been good, the implementation was underwhelming. When consumers did not respond, the company had to cut back on hours and employees, which created even more underwhelming stores and did not create the kind of momentum that would have propelled Yucaipa into spending even more money to invest in its ideas ... and the circle kept turning.

    And, in fact, the circle kept turning and driving Fresh & Easy into the ground.

    What I really don't understand is how all these smart people missed it. I'm not all that smart, and I've been saying some of this stuff for years ... and there are people a lot smarter than I who have been saying it as well.

    Published on: November 9, 2015

    The Associated Press reports that the University of Colorado's School of Medicine has returned a $1 million contribution from the Global Energy Balance Network (GEBN), which was supposed to be used to work on an "evidence-based approach to ending obesity." The money is being returned, however, because the GEBN gets funding from Coca-Cola, and "has been criticized for trying to play down the role sugary drinks play in fueling weight gain and instead playing up the importance for physical activity," an attitude that seems to be in synch with Coke's priorities.

    The story notes that a professor at the university, James Hill, is president of GEBN.
    KC's View:
    The university does not appear to have actually used the term "conflict of interest," but that's clearly what is going on here.

    The ultimate lesson here is about transparency ... and that, if you are less than honest and forthright about your actions and motivations, it'll come back to bite you. And it should.

    Published on: November 9, 2015

    Fascinating piece in the Washington Post over the weekend that looks at brewpubs and marijuana dispensaries in Oregon, using them as a metaphor for how small businesses can succeed in the fact of large existing - or potential - competition.

    Here's how the story frames the issue:

    "Drive around the Portland area today and you’ll see ... small pubs and breweries that have sprung to life in the past half-decade and endured, in spite of fierce competition from rivals large and small.

    "In the past month, Portland has seen a similar proliferation of start-ups in the cannabis industry, ignited by a new state law that allows legal marijuana sales to the general public.

    "Microbreweries and pot dispensaries aren’t the major drivers of Portland’s economy, but they loom much larger here than in most U.S. cities. In both those industries, small start-ups are thriving.

    That’s a sharp contrast to the American economy at large. Don’t let Silicon Valley fool you: The nation has long had a start-up problem. The rate at which new businesses are formed has fallen steadily since 1984, a trend that accelerated during and after the Great Recession, according to research by University of Maryland economist John Haltiwanger and several co-authors. Since the recession ended, more businesses have failed every year than have sprung to life.

    "Breweries and dispensaries offer lessons for how policymakers might nurture a small-business comeback in the United States..."

    You can read the entire story here.
    KC's View:
    I love this story, not least because it is about the place that I like to refer to as my future home town.

    There is one thing that I think the story misses, though - which is that Portland is unique in that companies that get too big and grow too much end up coming under suspicion. It is like they've somehow become disloyal. (See a FaceTime I did about this subject, which you can see here.

    This makes Portland unique ... but I do think there are lessons that can be learned from the entrepreneurial spirit there.

    Published on: November 9, 2015

    The Wall Street Journal wine writer Lettie Teague had a piece over the weekend about how millennials may have an impact on the wine business, with the basic conclusion being that "this group of 18- to 34-year-olds is technologically savvy, environmentally engaged and eager for stories about the things they love," and that these priorities may well translate into how they drink and shop for wine.

    "One of the biggest divides," the Journal writes, "turned out to be the numerical rating system. Millennials regard the 100-point scale as the creation—and the provenance—of their older wine-drinking peers. They won’t be 'duped' into buying an expensive wine just because some critic awarded it 92 points; they value stories and a personal connection."

    Teague notes that stories and personal connections don't necessarily add up to good wine, so these priorities aren't necessarily a positive. But, she writes, "It’s safe to say that whatever millennials do want, they’ll probably get it; by 2017, they’ll have more buying power than any other demographic group. So though boomers and Gen Xers helped build and sustain the wine business over the years, companies big and small are paying attention to millennial habits and marketing their products accordingly."
    KC's View:
    It isn't just wine sales and consumption that millennials are going to affect ... I think that retailers and manufacturers across the board have to use millennials' interest in positive origin stories and environmental consciousness as a barometer for the products and services they develop and sell. With that, I believe, comes the responsibility for educating these consumers, and helping them understand what is real and illusory ... but this also is an amazing opportunity, if they take advantage of it.

    Published on: November 9, 2015

    • Walmart announced this morning that its Sam's Club division "is offering more days and ways to save on hot holiday gifts with a new Pre-Black Friday Event and deals that continue into December."

    The company says that the Pre-Black Friday Event "gives members early access to exclusive savings on some of the most sought-after holiday items and Thanksgiving meal must-haves. Kicking off Sat., Nov. 21 at 12:01 a.m. CST on and in clubs at 7 am ... Event prices are good through Wed., Nov. 25, while supplies last."
    KC's View:

    Published on: November 9, 2015

    Starbucks last week introduced its new holiday coffee cup - all red, with the Starbucks logo, as differentiated from its usual white cup with the Starbucks logo.

    It didn't take long for the company to be accused of being on the front lines of the so-called war on Christmas.

    A person named Joshua Feuerstein - who appears to be a former evangelical pastor turned social media preacher - went online last week with a Facebook posting saying that "Starbucks removed Christmas from their cups because they hate Jesus." Feuerstein used the posting to urge people to tell baristas that their names are "Merry Christmas," thus forcing them to say the phrase when their drinks are ready.

    The Feuerstein posting has gotten some 10 million views ... though, to be fair, not all of them "liked" what Feuerstein had to say.

    The Christian Science Monitor reports that "just over 70 percent of Americans identify as Christian, according to the Pew Research Center. Pew also surveyed Americans on whether they believe stores should greet their customers with 'Merry Christmas' or a less religious term, such as 'Happy Holidays,' 57 percent pick 'Merry Christmas' and 27 percent selected the less religious terms.

    "But when a third option – 'it doesn't matter' – was added, it became the most popular answer, with 46 percent saying it doesn't matter, 42 percent preferring 'Merry Christmas,' and 12 preferring the less religious terms."

    The Monitor also reports that even Paul Batura, vice president of communications at the conservative Focus on the Family organization, told Fox News, "I wonder if we’re not overthinking or overanalyzing this."

    Time reports that "Starbucks has offered special holiday cups since 1997 with designs varying from year to year. Jeffrey Fields, the company’s vice president of design and content, explained this year’s design as a 'more open way to usher in the holidays.'

    “Starbucks has become a place of sanctuary during the holidays,” Fields said in a press release. “We’re embracing the simplicity and the quietness of it.”
    KC's View:
    First of all, let's be clear. I'm a fairly frequent Starbucks shopper, and it is rare that I would ever - especially during the holidays - refer to the "quietness" of Starbucks, or refer to it as a "sanctuary." That strikes me as hyperbole at best, and self-delusion at worst. (Next year, they ought to just bring out the new cup and put out a press release.)

    Second of all, let's be clear about something else. Guys like Feuerstein like to traffic in provocative nonsense like "the war on Christmas" because it generates lots of coverage in the media (including here), lots of views in social media, and gets them lots of attention. And if they can turn a big company like Starbucks into a target, it gets them even more attention.

    On that score, Feuerstein has succeeded.

    I know I'll probably get some grief for this, but I really do believe that the "war on Christmas" is utter nonsense, and a way for some people who play the victim card. Look around. It is early November, and the Christmas sales already have begun. Now, if you want to argue that people and companies that observe and celebrate Christmas do so in a more secular than religious way, then maybe then you have a point. But that's not the Starbucks issue.

    If you Google "Starbucks holiday cups" and look under "images," you'll see lots of Starbucks cups from years gone by. Lots of snowmen, trees, carolers, ornaments ... but nothing overtly religious.

    Starbucks hates Jesus? Give me a break. Starbucks loves commerce more than anything, and is pretty fond of its customers ... which is why it designed a cup this year that was, yes, simple and non-denominational. And meant not to offend anyone.

    The only possible hater I can find in this story is Feuerstein ... but I actually think he's probably more of a cynical opportunist. I hope he gets coal in his stocking.

    Published on: November 9, 2015

    Tech Crunch reports that Instacart is rolling out a new "online digital couponing platform, when customers add the discounted items to their basket, the virtual coupons are immediately applied. The idea is similar to digital coupons, which already exist, except that instead of being applied to a customer’s account – like via their store loyalty card, for example – they’re applied immediately to the groceries the customer is ordering from their computer or phone."

    The "Instacart Deals" program currently includes coupons from General Mills, Unilever, Coca Cola, Pepsico, Campbell’s, and SC Johnson.
    KC's View:

    Published on: November 9, 2015

    • The Seattle Times reports that "Haggen will begin a 3-day auction for dozens of stores Monday, starting with California and Arizona locations it is shedding as it restructures in Chapter 11 bankruptcy. On Wednesday the Bellingham-based grocery chain will offer 18 Washington stores, from Aberdeen to Liberty Lake."

    • The Wall Street Journal reports that billionaire investor Steve A. Cohen has acquired a six percent ownership stake in troubled Weight Watchers, which has become less troubled since the recent announcement that Oprah Winfrey has purchased a 10 percent stake in the company and will allow it to use her name and image in advertising.

    The story points out that Weight Watchers "has struggled to recruit and retain paying members. It has been trying to revamp operations around fitness and technology, building on personal coaching and 24/7 expert chats to foster the kind of online relationships its members had traditionally developed in face-to-face meetings."

    • In Massachusetts, the Eagle-Tribune reports that "Market Basket is poised to receive one of the Massachusetts Bar Association's 2015 MBA Pinnacle Awards next week as part of its second annual Consumer Advocacy Symposium. The annual awards recognize two companies — one large and one small — that demonstrate the highest commitment to their customers by taking affirmative steps to improve the consumer experience in Massachusetts ... Fresh Truck, a mobile food market operating out of converted school buses, will be recognized with this year's small company award."

    In a press release, Christopher Kenney, the bar association's vice president, says that "the outpouring of support Market Basket received from its customers in July 2014 when the company was threatened with a change of management showed how strongly Massachusetts families supported Market Basket’s consumer-based approach to doing business."
    KC's View:

    Published on: November 9, 2015

    • Meijer announced last week that it has hired Tod Pepin, the former senior vice president of merchandising at Hannaford and its parent company, Delhaize America, to be its new senior vice president of foods.

    • Albertsons announced that Joe Kelley, the former president of Stop & Shop in New England, has been hired to be vice president of marketing and merchandising for its Shaw's and Star Market division.
    KC's View:

    Published on: November 9, 2015

    Got the following email over the weekend from an MNB user...

    As one of the folks at Whole Foods Market who was laid off to save money, I have had the same thoughts as you how it could be time for a leadership change.  Or perhaps a takeover is in order.

    Current leadership doesn’t seem able to take the company to the next level of credibility, relevance and success.  Their reactive approach seems to feel that cutting their way to prosperity will solve the problems.  I wonder how many leadership positions were eliminated. My experience at WFM was to see excessive spending when times were good with no thought of building a war chest for when things get bad.

    Lately their past success has been hard to recapture using their old ways of thinking.  I was told that the problems started several years ago.  Why did leadership do nothing consequential enough to turns things around then?  Why did they take us down the path of lay offs, rather than lead more consciously and responsibly?

    All good questions.

    Regarding the decision by HEB to award an equity stake in the company to 55,000 employees, one MNB user wrote:

    Do like this company. For those of us in Texas so sorely disappointed by Blue Bell, HEB is kind of nice to have around.

    MNB reader Ken Pentheny agreed:

    Incredibly intelligent and successful business owners recognize that their people are their greatest asset, esp. the people front facing to the consumer.  They make or break a company and will enhance or drag down performance.  Wall Street needs to get that message.  When stock values are driven more by long term profitability and solid strategy growth and less by expense cutting and control (biggest expense being people), you can’t help but win in the race to the top.  HEB leadership gets it.

    See our Eye-Opener this morning.

    From another reader:

    They continue to prove that business run right works every time. We had flooding in this area and HEB was right there with free lunches and support without being other store was visible.

    And another:

    HEB continues to command respect, ever more so.  Gutsy, bold, smart and against the easy tide of the Greed Ethos.  Hooplas and Cheers to their manifesting real leadership in this industry.

    MNB reader Aileen Dullaghan Munster of the National Grocers Association wrote:

    Kevin, It’s always great to hear of another independent grocer that recognizes the value of employee ownership.  Congrats to HEB and their associates on their new ESOP.  ESOPs are a growing trend for independents which led a number of our members to encourage NGA to start a share group focused solely on ESOPs that David Schoeder helps us facilitate.

    At NGA, we’re proud of the growing list of independents who are wholly or partially owned by their associates including   Harp’s Food Stores, Niemann Foods, Inc., Reasors,LLC, Coborns, Inc., Pyramid/RCPS, Newport Avenue Markets, Kennie’s Markets, Riesbeck Food Markets, Inc., Houchens Industries, Homeland Stores Inc., Woodman’s  Markets, Cannata’s Food World, Northstate Grocery ….

    We had a story last week about Google getting into the drone delivery business, which prompted one MNB user to write:

    Here's what I'd like to know. If I order something from Amazon and Google at the same time, isn't there a chance the drones will crash into each other on my driveway? If both companies use GPS technology, it seems like a possibility to me.

    Make sure you have your phone out so you can take video of the crash. It'll be huge on YouTube.

    MNB reader Carla Girten wrote:

    I had a direct drone encounter a couple of weeks ago, while at a somewhat remote picturesque Swiss inn located in central Ohio Amish country. We were in the front yard with the owner’s wife.  Suddenly something appeared in the sky which within a few seconds could be identified as a drone.  The wife laughed and said it was her husband, from their house high on the hill.  He liked it because he could remotely roam their many acres of land to make sure all the horses were accounted for, but she said it was really a “toy”.  He then dropped the drone down to our level, and within a few feet, watching us.  Fascinating, but a little creepy and too close for comfort.

    We had a story the other day about how some people are using user reviews on Amazon to launch "coordinated campaigns to push political and social agendas through negative reviews often only tangentially related to the product for sale. They are able to do so because Amazon welcomes reviews regardless of whether the writer has actually purchased the product."

    I commented, in part:

    It seems to me that it would be preferable if Amazon's guidelines required that reviews of products actually be reviews of products, as opposed to political screeds ... especially screeds written by a bunch of conspiracy looney tunes with nothing better to do. And maybe they ought to require that reviewers actually must have bought the product on Amazon. (As an Amazon user, I have absolutely no problem with this. An informed review, even one I may disagree with, is much better and more useful than one that is written from ignorance.) ... In the broadest sense, this is about the slow, ineffable decline in and coarsening of civil discourse in America.

    One MNB user wrote:

    Totally agree...Amazon needs to nip this in the bud.  Unchecked, it actually turns me off buying anything from them, and I'm a big fan.

    MNB reader Jackie Lembke chimed in:

    I am with you Kevin. We seem to have lost the ability to debate ideas without spouting hate on the opposing person. When did how someone thinks become a reason to hate them and bash them on social media? It makes me sad. America seems to have become a bunch of bullies who hide behind anonymity. Hateful things that you wouldn’t say to anyone if you were looking them in the face are tweeted for the whole world to see. It is destructive and unnecessary. Social discourse should start with the word social and its meaning  of community and relations. It is hard to build a relationship if you spout hate before you really the person.

    From another reader:

    I couldn’t agree more with your comments about civil discourse yesterday as they relate to the use of the Internet for communications.

    Between public comments permitted by news outlet websites regarding their stories and this example of reviews on Amazon (among other things), I believe that the ability for people to post their opinions anonymously has led more of our population to think nothing of  becoming rude, insensitive, and in some cases cruel…..all with the knowledge that only the most egregious examples of intimidation or threats written in this format could potentially be considered for any type of criminal prosecution under our laws. This behavior is only encouraged when you watch some of today’s reality shows that exemplify selfish, shameless self-promoting at the expense of anyone and everyone else and the related bad manners that accompany this.

    Given the groups that continue to impose their narrow points of view on our society through methods such as this and the great number of people who find themselves too busy or too uncaring to respond, I believe this format of communication will foster an ongoing polarization of our society.   Simply put, if you wouldn’t put your name on it, don’t post it on the Internet.

    As Rodney King famously said, ……”can’t we all just get along?”

    This is the reason that I've always believed in moderated user comments here on MNB ... there is a lunatic fringe out there (trust me on this one), and I don't want to waste readers' time and energy. I have no problem with anonymous comments when they add to the discussion; I recognize that sometimes people cannot be quoted because it could affect their companies and/or their jobs.

    We had a piece last week about how the new "Star Trek" series in 2017 will only be available to customers who subscribe to the CBS streaming service, which garnered both positive and negative reactions. In response to those reactions, MNB user Brian Blank wrote:

    Loved the impulse/warp analogy in response to the reader who doesn’t want to pay the subscription to CBS All Access.  Side note, my new Apple TV came yesterday, and I made sure the CBS app was available, so I’m all set for 2017!  (Also, the Showtime app, so I’ll be able to watch the new Twin Peaks in 2017 as well!)  Side note to the side note…just popped into my head that It’s still too early to set a Season Pass on my TiVo for the new show “Chicago Med”, but I already have two shows planned for viewing in 2017…weird.

    Following up on my criticisms of the Fox Sports World Series announcers, one MNB user wrote:

    Kevin, I have been saying for years to my wife (I am blessed with a wife who enjoys watching sports, especially football and baseball) these Fox announcers are the absolute worst. They are beyond over rated; they interfere with the experience of enjoying the game. They try too hard to provide some relevant commentary after every pitch and play and therefore minimize a great game by trying to be too smart and too cute. Let the players play and their effort speak for itself. Commentary should complement the play not visa-versa.

    Agreed. See Vin Scully.
    KC's View:

    Published on: November 9, 2015

    In Week Nine of the National Football League...

    Dolphins 17
    Bills 33

    Packers 29
    Panthers 37

    Jaguars 23
    Jets 28

    Rams 18
    Vikings 21

    Redskins 10
    Patriots 27

    Titans 34
    Saints 28

    Raiders 35
    Steelers 38

    Giants 32
    Buccaneers 18

    Falcons 16
    49ers 17

    Broncos 24
    Colts 27

    Eagles 33
    Cowboys 27
    KC's View: