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    Published on: November 25, 2015

    by Kevin Coupe

    One of the things that I continue to be thankful for is the relationship that I've developed with Portland State University's Center for Retail Leadership, where, year after year, I have the opportunity to learn from professionals and students. It is both personally and professionally rewarding ... and the gift that keeps on giving.

    Case in point ...
    I got an email this week from one of last summer's students telling me about a new business founded by her husband that is designed to draw attention to various social issues. Common Ground is at its core a footwear company, but more importantly, it is designed to "inspire steps, regardless of their size, that contribute to progress." There are four basic collections, with each one focusing on a specific issue - gender equality, gun violence, immigration, and marriage equality.

    According to the company, there was a conscious decision to keep the Portland-designed shoes simple, with "clean, classic design lines combined with world-class materials deliver style and comfort. Footwear is available for women and men, with a retail price of $70."

    (If you're interested in find out more, you can go to

    Stories like this make me thankful for folks who aren't just in business to make money (though making a buck is important), but also are connected to their communities in unique and fundamental ways. They're looking to build on those connections and create a broader context for their entrepreneurial efforts ... and I love that.

    In some ways, it seems very Portland ... but I know it goes beyond that. And at a time when so many people seem governed by darker impulses, this makes me hopeful. And thankful.

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

    Published on: November 25, 2015

    Bloomberg Businessweek has a cover story this week about how Walmart in 2012 responded to organized labor protests during Black Friday sales events with what some might call a heavy hand: "it hired an intelligence-gathering service from Lockheed Martin, contacted the FBI, staffed up its labor hotline, ranked stores by labor activity, and kept eyes on employees (and activists) prominent in the group. During that time, about 100 workers were actively involved in recruiting for OUR Walmart, but employees (or associates, as they’re called at Walmart) across the company were watched; the briefest conversations were reported to the 'home office,' as Walmart calls its headquarters in Bentonville, Ark."

    According to the story, "The details of Walmart’s efforts during the first year it confronted OUR Walmart are described in more than 1,000 pages of e-mails, reports, playbooks, charts, and graphs, as well as testimony from its head of labor relations at the time. The documents were produced in discovery ahead of a National Labor Relations Board hearing into OUR Walmart’s allegations of retaliation against employees who joined protests in June 2013."

    Walmart's emailed comment on the story: "We are firmly committed to the safety and security of our 2.2 million associates as well as the 260 million customers we serve each week. It’s important to remember that Walmart is the largest company in the world with 11,500 stores in 28 countries. Unfortunately, there are occasions when outside groups attempt to deliberately disrupt our business and on behalf of our customers and associates we take action accordingly.”

    It is a fascinating story, and you can read it in its entirety here.
    KC's View:
    I cannot help but feel like this is overkill on Walmart's part, and perhaps indicative of a broader lack of faith in its people, no matter what they say. I'm also sure that Walmart is not alone in such efforts ... I'm not a conspiracy theorist, but it seems to me that the combination of technology and corporate entitlement almost certainly means a lot of big companies conduct this kind of surveillance.

    Doesn't make me feel any better. Or any safer. And I think the "safety and security" argument is a little specious ... it really is about protecting the bottom line.

    Published on: November 25, 2015

    USA Today reports this morning that e-commerce startup Jet has gotten $350 million in new investment capital, with promises of another $150 million, "which would bring its fundraising total to $770 million." Among the investors were mutual fund Fidelity, Bain Capital, Alibaba, and Google Ventures.

    The story notes that " launched in July promising Amazon-beating prices to those willing to shop for multiple items at a time. It had initially anchored its business model to an annual $50 membership fee, but in October scrapped the charge and its plan to offer even deeper discounts on more than a million household items ... reports that sales in September were $33.2 million, a 65% jump over the previous month. The company anticipates closing out 2015 at an annualized run-rate of more than $500 million in sales."

    The Jet model depends on a series of algorithms that purport to give consumers the ability to drive down prices by making choices - more items and slower delivery, for example, will drive down the order costs, with the entire process transparent to the shopper. Jet, which was founded by Marc Lore, who created Quidsi and then sold it to Amazon before eventually going back out on his own, also depends on consumers preferring this construct rather than Amazon's fee-based discount model that is built around Amazon Prime.
    KC's View:
    This new money certainly gives Jet a little bit of breathing room as it continues what essentially is a race - it has to generate enough traffic to justify the discounts it is giving on products, discounts that now are being underwritten by investment money. It is all about burn rate ... and as I say, it is a race.

    I've ordered from Jet, and while the prices were okay and the fulfillment on schedule, the experience was less branded than what I'm used to with Amazon. In the end, I think that will be one of Jet's real challenges ... creating the kind of community of users that Amazon has so successfully developed.

    Published on: November 25, 2015

    The Wall Street Journal reports this morning that a federal investigation - conducted by the US Department of Justice, Securities and Exchange Commission (SEC), Federal Bureau of Investigation (FBI) and Internal Revenue Service (IRS) - "into potential foreign bribery by Wal-Mart Stores Inc. has unearthed evidence of possible misconduct by the retailer in Brazil, after investigators found little to support the sweeping allegations involving Mexico that initially prompted the probe, according to documents and people familiar with the matter."

    According to the story, "Federal prosecutors are examining $500,000 in payments that they believe ultimately went to an individual hired to obtain government permits the company needed to build two stores in Brasília, Brazil’s capital, between 2009 and 2012, an investigative document shows ... Prosecutors are examining whether senior employees at Wal-Mart in Brazil at the time knew of and approved of the suspected payments, the people said. The investigation into the Brazil allegations is at an early stage and it isn’t clear if anyone will be charged."

    While no evidence of bribery in Mexico has been found, despite the fact that it was allegations about misbehavior in Mexico that prompted the original investigation, there has been evidence of "widespread but small-payment bribery in India. If prosecutors also are able to prove bribery by Wal-Mart in Brazil, it could turn the case against the company into a multinational action and prompt a larger penalty. Still, the offenses would fall short of the broader pattern of bribery in Mexico that was initially suspected."

    Walmart has said it is cooperating with the various agencies and investigations.
    KC's View:
    Seems to me that this story has gone from being a significant threat to being almost a minor inconvenience for Walmart. I'm a little surprised by this ... I thought the Mexico bribe story was going to be a bigger deal. But at this point, it appears to be a bigger story for the media than it is a problem for Walmart.

    Published on: November 25, 2015

    The Brookshire Grocery Company has decided not to sell itself, despite the possibility that it would have fetched as much as $1 billion on the open market.

    In a memo to company employees, company chairman Brad Brookshire wrote that he was "pleased to announce that the Board of Directors of the Company has decided this morning to discontinue the sale process of our company. The company is no longer for sale and we can now focus on the things that matter most - our customers and partners. I personally want to thank each of you for sticking with us during these past few months of difficult uncertainty.

    "Entering this week of Thanksgiving, I am more than ever thankful for our company, our 14,000 employee partners and our loyal customers. I firmly believe Brookshire Grocery Company is a business with solid foundation and enormous potential."

    Brookshire currently has more than 150 stores in Texas, Louisiana, and Arkansas.
    KC's View:
    I'm glad. The world is better for companies like Brookshire staying independent.

    Published on: November 25, 2015

    The Wall Street Journal reports that as artisan food manufacturers develop local and sustainable products and meeting with success, a couple of things are happening. For one thing, their products are being carried by more and more stores. For another, many are attracting interest - and money - from venture capitalists.

    All good news. Except, as the story says., "the sudden burst of customers and backers has brought food entrepreneurs a lot of headaches. Many business owners say they’re struggling with issues of scale, scrambling to source enough ingredients to meet demand. Unlike big companies, it’s tough for a small operation to source ingredients all over the world to ensure that they have access to supplies year-round and can keep shelves stocked. It’s also harder for startups to get favorable contracts with multiple suppliers to limit the impact of poor weather on crops or changes in commodity pricing."

    These are new problems. In the past, "companies were largely self-funded for the first several years, and they were content to grow slowly. Their customers tended to be farmers’ markets or small gourmet-foods stores, which were fine with seasonal availability of various products. Now, the combination of booming demand, the involvement of big retailers and large amounts of investment have led to a greater sense of urgency."
    KC's View:
    Then again, they could have the other problem ... too much product and too few customers.

    The larger story is about how growing consumer mistrust of so-called "big food" is translating into the growth of the local/sustainable/artisan category ... which tells us something both about consumers and big food.

    Published on: November 25, 2015

    The Austin Business Journal reports that fast food chain Sonic is going to start testing a delivery service there.

    According to the story, Sonic Drive In is using Favor, a local on-demand delivery app in Austin, to haul burgers from eight restaurants to customers between now and Christmas.

    "If the trial is successful," the story says, "Favor could land a lucrative contract to provide delivery services for the chain in the two companies' shared markets."
    KC's View:
    KFC, Taco Bell, now Sonic. Sense a trend?

    Published on: November 25, 2015

    Internet Retailer reports that "IBM client web sales rose 12.1% last weekend, while ChannelAdvisor reports 13.9% growth in sales last week for merchants on Amazon. Online sales the weekend before Thanksgiving increased 12.1% compared with the same period in 2014, according to data from IBM released Monday. Meanwhile, ChannelAdvisor reported that its clients’ sales on, which often track broader e-commerce growth, rose 13.9% for the week ended Saturday."

    The story goes on to say that "Mobile sales jumped 35% compared to the same weekend last year, with 35.9% of all online sales occurring on mobile devices, according to IBM data. Mobile traffic also surged, accounting for 56.9% of all online traffic the weekend before Thanksgiving, up 16.6% from last year."
    KC's View:

    Published on: November 25, 2015

    • Deloitte is out with a new survey saying that "nearly 6 in 10 (57 percent) plan to shop over the (holiday) weekend," and that "Americans plan to spend $369 over the course of the holiday weekend—a nearly 25 percent increase from last year’s survey."

    The survey goes on to say that "more shoppers are turning to digital sources to look for weekend deals. Three of the four top places consumers expect to obtain information about Black Friday sales include retailer websites (62 percent), websites dedicated to featuring Black Friday deals (58 percent), and e-mails (38 percent). While 14 percent plan to shop in-stores on Thanksgiving Day, nearly one-quarter (24 percent) plan to do so online."

    • The Wall Street Journal reports that Target has come to an agreement with Canada's RioCan Real Estate  Investment Trust that will have to pay the equivalent of $99 million (US) to settle the terms of 18 leases it abandoned when it bailed out of the Canadian market earlier this year.

    • Loyalty One has a new survey saying that "seeing Santa in the store with children enhances the holiday shopping experience for nearly seven out of ten (66%) U.S. shoppers ... But Santa takes a back seat to another venerable holiday tradition when it comes to putting cheer into the seasonal gift-buying excursion. No less than 76% of all consumers said that hearing carols and other holiday music in the store enhances their Yuletide shopping trip."

    Reuters reports that "at least 19 people may have been infected by E. coli after eating rotisserie chicken salad sold at Costco Wholesale stores, the United States Centers for Disease Control and Prevention said on Tuesday. Five people have been hospitalized, although no deaths have been reported. The ingredient linked to the infection has not been identified. The agency said Costco had removed all remaining rotisserie chicken salad from stores in the United States and stopped further production."
    KC's View:

    Published on: November 25, 2015

    ...will return in two weeks.
    KC's View:

    Published on: November 25, 2015

    We had a story the bother day about e-commerce in Canada, which prompted the following email from MNB reader Randy Evins:

    I am involved a bit with Loblaw and I see them as a market leader in E-Com. They have not jumped into the home delivery game but their “click and collect” process is world class and is growing leap and bounds. Home delivery is the last mile and I’m not convinced that it’s needed. The real truth is that the grocery industry has an affinity for siloed processes and dividing things up into e-com versus bricks and mortar does no one any good. It’s about commerce plain and simple and those folks that understand that today, and march down that path, will be ready for the next disruption and won’t have to undertake dramatic and expense transformations before they can move on.

    I suggested the other day that perhaps it is time to get past the GMO labeling argument, and just move on with an emphasis on labeling products that do have contain GMOs. It is an initiative that anti-GMO/pro-labeling forces that achieve on their own, and it will allow them to change the argument on their own terms.

    MNB reader Andy Casey agreed:

    Couldn’t agree more about focusing on labelling items GMO free versus trying to get them labelled as containing GMOs.  That certainly sounds better to me as a consumer (as does “Natural” and “Organic”, etc. – but we know what a mess that is). 

    Maybe that is enough but it seems that the science for or against GMOs is missing in action.  Beyond saying “we are GMO free!” is there anything which helps explain why that is better?

    Frankly, most of the (very little) research I’ve seen on this subject to date seems to support the argument that there is no difference.

    Regarding Coca-Cola's now-exposed efforts to use a supposedly objective scientific group focusing on the obesity crisis to push its agenda - that losing weight is about more exercise, not fewer calories - one MNB user wrote:

    I don't understand why Coke is using the same play book as the tobacco companies.  Instead of obfuscating the truth and denying that refined sugar isn’t bad for you, they should get ahead of the issue and put “health advisories” on their products.  They should say that consumption of sweetened drinks is addictive and has significant health risks.  In addition, they should establish a helpline for developing a healthy lifestyle, and also for dealing with obesity and sugar addiction.  It won’t hurt their sales; people will still buy their products in spite of these warnings.  I know the health risks, but I still drink soda every day.  They might as well be a leader on the issue while they still have some creditability left.  If for nothing else, it may help mitigate the costs of expensive lawsuits that are sure to come.

    Responding to our story about new food labeling proposals making their way through Congress, MNB user Tom Murphy wrote:

    On a recent trip to Japan I was sitting next to an trademark attorney from Ecuador and while discussing the sad state-of-affairs in the US when it comes to food labeling and transparency she informed me of her country’s mandate of using a traffic light on food packages to show the buyer whether it is safe to eat or not. She also said that school children receive one hour per week of instructions on what the traffic light means to them. Lobbyist’s would never let Congress vote for something so transparent here…but let’s hope there will come a day.

    On another subject, MNB reader Lisa Bosshard wrote:

    Kevin, I am staying tightly attuned to the VW scandal as I happen to be an owner of one of the affected diesel cars.  Until 2 months ago, I had nothing but praise for the brand and my car.   To put it mildly, I LOVED it.  Now, it's almost embarrassing to drive knowing how much emissions are being spewed into the environment.   This was my first VW and my first diesel.    While it may not be my last diesel - LOVE the gas mileage, it will be my last VW!  They completely lost this customer, my family and all future purchases from everyone close to me.  One of our friends have 3 of these cars in their family and they are in the same boat.  None of us know what the company will do, the "goodwill" package is a joke, value has seriously decreased on the cars, we're stuck with cars that are not what was sold to us and we can't trade them at this time.  Don't know what the answer is, but I'm sure we won't be happy with the outcome.  The company would have to buy back every affected car to truly satisfy all the owners I know and that would bankrupt them.  It's not going to happen.

    Also responding to the VW story (sort of), MNB reader Walter Peaseley wrote:

    To quote you on the VW issue is like Hilary running for office.
    “ I have to laugh. Who would believe anything these people (Hillary) say?”

    I think your point is kind of gratuitous, but ... I'm pretty sure the answer to your question is "many Democrats."

    If you asked the question about Trump, the answer would be "many Republicans."

    None of this proves anything, except that many people believe who they want to believe and what they want to believe.  Many others try to figure out who is telling the least egregious lies.

    Personally, I don't believe anybody.  I just try to find people who align with me on as many issues as possible that I think are important, vote for them, and hope I don't get too disappointed.

    Democracy in action.
    KC's View:

    Published on: November 25, 2015

    This is Thanksgiving weekend here in the US, which I always think is the best holiday of the year - just food and football and family. (And almost certainly a movie or two at some point…) There's also a lot to be thankful for this year, which will give the holiday even more resonance than usual.

    And, also as usual, at the Coupe household we'll be enjoying filet mignon, baked potatoes and fresh asparagus ... not exactly traditional fare, but it's what the kids like to eat on Thanksgiving, so we've developed our own tradition. The wines will be from Oregon, probably a pinot from Willamette Valley Vineyards and definitely the Road's End from Carlton Cellars. Like I said. Tradition.

    In keeping with tradition, MNB will be on hiatus for the four-day weekend.

    Have a great holiday ... a great weekend ... and I'll see you Monday, November 30.

    KC's View: