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    Published on: February 12, 2016

    by Kevin Coupe

    We talk a lot about diversity here on MNB, and there was a segment the other night on the always provocative "The Nightly Show with Larry Wilmore" that highlighted exactly why businesses have to think about this issue.

    The guest was a sixth grade girl named Marley Dias, who got tired of the fact that all the books that seemed to be available at her New Jersey elementary school were about white boys and dogs. So, she started a book drive called "1,000 Black Girl Books," and was so successful that she's now not just donating the books to her own school, but to a school in Jamaica where the library also could use some diversity.

    It is a fascinating interview, not least because Marley is charming, literate and totally at ease on national television - despite her youth. And it teaches us an important business and cultural lesson, that it is critical to be sensitive to diversity issues because our customers and employees are going to expect it. If we are not, we will be deemed irrelevant, and they'll move on.

    Check out the interview. It is an Eye-Opener.
    KC's View:

    Published on: February 12, 2016

    CNBC reports that Kroger is in the second round of an auction process as it seeks to acquire Fresh Market, the North Carolina-based specialty food retailer that has some 180 stores in more than two dozen states. Fresh Market carries a market value of approximately $1 billion.

    "It's not like this is a complete surprise," CNBC writes. "Fresh Market has been trying to get someone to save it for months now, and Kroger has been on an aggressive acquisition spree."

    The story says that Kroger is just one of a number of entities participating in the auction. The others include Apollo Global Management, KKR, and TPG Capital. In addition, CNBC makes clear that the existence of an auction does not guarantee a transaction; if the numbers don't make sense, Fresh Market does not have to sell itself.

    Here's how CNBC frames the competitive set:

    "So-called natural food chains proliferated over the past decade as consumers shifted to healthier fare, but lately have lost their hold on what has become an over-saturated market. 
    Back when Whole Foods opened in 1980, there were fewer places to shop for specialty items such as local beefsteak tomatoes and organic Fuji apples. Even as late as 2007, when Whole Foods pursued rival Wild Oats, Walmart and Kroger were not considered true competitors.

    "But while traditional grocery stores went bankrupt and consolidated, specialty grocery chains such as Sprouts, Fairway, Fresh Market and Trader Joe's were collectively building hundreds of stores. Eventually, surviving traditional grocers such as Kroger caught up and began stocking the same stuff -- often at cheaper prices ... Now, those specialty chains are going the same way as traditional grocers. And Kroger is smart to go shopping."
    KC's View:
    This would be an interesting play by Kroger, especially coming on the heels of its acquisitions of Harris Teeter and Roundy's/Mariano's. It would give Kroger yet another arrow in its quiver - a relatively small, upscale format to which it could bring a lot of distribution efficiencies. In a lot of ways, I think, Fresh Market has been treading water for years, trying to identify a lucrative-enough exit strategy.

    Maybe this will be it.

    Published on: February 12, 2016

    The Associated Press reports that the US Congress has passed a bill that would ban the import of goods obtained through the use of forced and child labor - including fish caught by slaves in Southeast Asia.

    The story notes that "an expose by The Associated Press last year found Thai companies ship seafood to the U.S. that was caught and processed by trapped and enslaved workers. AP tracked fish and shrimp from people locked in cages and factories to supply chains of top retailers and restaurants, from supermarket chains like Wal-Mart and Whole Foods to restaurants including Red Lobster."

    These companies have said that they condemn the use of such labor, and are doing what they can to prevent it. This provision, which is part of a bill that essentially revamps and updates the US Tariff Act of 1930, and it is expected to be signed by President Obama.
    KC's View:
    I'll take the companies at their word that they condemn such ill-gotten products, and are doing what they can to avoid buying them. But I don't think there is anything wrong with giving them a little extra incentive - in the form of legal repercussions - to make sure they actually do so.

    This is, by the way, part of a broader continuum - the trend toward mandating that companies know where their products are coming from, how they were grown and obtained, how the workers involved have been paid and treated, and the ways in which the companies up and down the food chain have insured these products' safety. All this stuff really matters to the consumer, so it has to matter to industry.

    Published on: February 12, 2016

    The Washington Post writes that when Whole Foods co-CEO John Mackey differentiates the chain from the new "365" format that the company is launching later this year, he says that "traditional Whole Foods stores would be more experiential, offer more prepared foods and be a destination for innovation. On the other hand, 365 would be more convenience-oriented and offer a tightly-edited assortment of goods.

    "And yet, go to the website for 365 by Whole Foods, and the lines seem less clear. The website says executives are looking for partner businesses whose services or products can be incorporated in the new chain, saying: 'Record shops? Tattoo parlors? Maybe!'"

    MarketWatch, by the way, reports that Walmart has signed leases for new "365" locations, in Evergreen Park, Ill.; Gainesville, Fla.; and Concord, Claremont and Los Alamitos, Calif., bringing to 13 the number of locations that have been identified for the new format.

    The Post goes on to suggest that "by Mackey’s description, the relationship between Whole Foods Market and 365 is starting to sound a lot like the relationship between Walmart and its recently-folded Walmart Express concept. Walmart launched Express to help it better compete for fill-in trips and to penetrate markets and shopping centers where it wouldn’t make sense to install one of its massive supercenters. But ultimately, the concept was axed because it didn’t gain traction."
    KC's View:
    First of all, let's stipulate two things. First, Whole Foods is not Walmart. And second, nobody outside Whole Foods really knows what the "365" concept is going to look like, so everything is just speculation.

    I tend to believe that Walmart's small store venture failed because the company wasn't innovative or imaginative enough. It just wanted small Walmarts, and often these stores appeared to be like 20 pounds of sugar jammed into 10 pound bags. If Whole Foods makes that mistake with "365," the concept won't work ... and we won't know about tis until the stores start opening.

    The whole tattoo parlor thing got a lot of news traction yesterday, and I have no idea if this is real or not. I can't say that it makes sense to me - it smells of a bit of desperation, as the company looks to figure out ways to make itself relevant to younger people. But it also strikes me as a potentially enormous waste of space.

    Published on: February 12, 2016

    • In Virginia, WTVR News reports that Kroger is bringing its rapidly expanding ClickList to the Richmond metro area, possibly as soon as next month.

    According to the story, "The first Kroger store in the Richmond market of 18 shops that will offer ClickList is the Kroger Marketplace in Chester — the newest Kroger, located at 10800 Iron Bridge Road. The service is offered in other markets, and will be extended to other shops in the metro area. Each ClickList location offers more than 40,000 items, including fresh meat and produce, with new items added every week."

    • Online grocer Door to Door Organics announced yesterday that it is expanding into the Omaha, Nebraska, market at the end of the month.

    The story notes that "Door to Door Organics customers enjoy a selection of regionally grown produce for their regular weekly or biweekly deliveries, thanks to a uniquely integrated mix of distributors and farmers offering USDA-certified organic produce. Customers can also select from nearly 1,000 natural groceries to add to their box." The boxes are curated by the company, and are available in a variety of sizes, with consumers able to choose all-vegetable, all-fruit, or mixed.

    Door to Door Organics says that it currently operates in 15 states, more than 50 cities and has made nearly 4 million deliveries since 2005.

    TechCrunch reports that mobile search app Foursquare in partnering with to enable its users "to order food, alcohol and groceries for delivery right from the Foursquare app," in the more than 38 US cities where operates.

    The technology reportedly is enabled by "a mobile commerce platform called Button, which also works with companies like Uber, Airbnb and Ticketmaster."
    KC's View:

    Published on: February 12, 2016

    Newsday reports that retailer-owned cooperative Allegiance Retail Services, which provides retail services to Foodtown stores as well as other independents, has purchased the Pathmark brand name from the bankrupt and now obsolete Great Atlantic & Pacific Tea Co. (A&P).

    The company says that " “this metro-NY/NJ/PA banner still has strong equity among consumers, and Allegiance plans on further strengthening the Pathmark name with new merchandising and operational enhancements.”

    Precise terms of the deal were not disclosed.
    KC's View:
    Maybe I'm wrong, but based on my recent visits to Pathmark stores, it is hard to imagine that there's any life left in the brand name. I assume they've done their due diligence and have figured out risk-reward, but I'm dubious.

    Published on: February 12, 2016

    Reuters reports that Aldi in the UK "has increased the pressure on bigger rivals in Britain with a new wave of price reductions," saying that "the price cuts on lines including fresh meat, fresh fruit and vegetables were a response to reductions announced last month by Morrisons, Britain's No. 4 supermarket, which in turn followed cuts by Wal-Mart's Asda, the No. 3 player."

    • In Minnesota, the Pioneer Press reports that Lunds & Byerlys has decided to close a St. Paul store that has been open since 1971, but has seen a sales decline that makes it "no longer viable." The company says that store employees will be offered jobs elsewhere in the chain, and that it is exploring options for the 48,000-square foot facility.
    KC's View:

    Published on: February 12, 2016

    • Advantage Solutions (formerly Advantage Sales & Marketing) announced that Jeff Hansberry has been named the company's first-ever president and chief commercial officer.

    Hansberry previously served as Starbucks' president for the China Asia Pacific Region, and most recently,led the integration and international expansion of Starbucks’ Evolution Fresh business. He also has executive experience at both E&J Gallo and Procter & Gamble.

    • Toys R Us announced that it has promoted Joe Venezia, the company's Senior Vice President, Store Operations, to the role of Executive Vice President, Global Store Operations.
    KC's View:
    I wonder if being in charge of store operations at Toys R Us means having an inexhaustible supply of mothballs?

    Published on: February 12, 2016

    Got the following email from MNB reader Monte Stowell:

    I agree that Chipotle has far superior food that Taco Bell. I know that the times have changed, but when I was working nights at a local grocery chain were in Portland, OR, going to Portland State College, Taco Bell was the god send for us young guns. Tuition was $305/term, books were expensive relative to the times, rent, phone bills, etc. Taco Bell was the best ever for those of us who worked night crew. Tacos were $.19 or 6 for $1.00. Was it great food and healthy food? Nope, but it was what we could afford. Mickey D. cheeseburgers were $.39, fries were $.25, so Taco Bell was the fare of choice.
    Honestly, I have no idea how young people can afford to go to college, have cell phones, tablets, rent, etc. and they can afford to eat at Chipotle.

    When I went to college, I liked the tacos and chocolate shakes at Jack in the Box, especially after late nights. (Studying, of course.)
    But you're right. Times have changed.

    From another reader:

    Kudos to Chipotle for making such a bold statement..."if you get sick, stay at home for 5 days and you'll get paid". I hope someone there did the math, because It's going to cost them a lot of money! One thing for sure...we will see prices for a burrito go up to pay for it, and the consequences will drive patrons to the competition. In the end, I guess that's better than going out of business.

    I'm not sure that patrons will go to the competition. It is just a matter of Chipotle doubling down on the "food with integrity" message, a message into which a lot of customers have bought into.

    From another reader:

    I do hope they rally and turn this around, because we enjoyed our monthly visits to our nearby Chipotle location.  What worries me most, relative to my past years of food service experience, is that they are supposed to be on a regular hand-washing regimen. They set a timer that sounds an alarm every half hour when everyone is to do so.  I have never seen that process followed when dining there, and I usually stay about 45 minutes each visit.  I have seen them reset the timer and continue on with their work, though.   But most times, the alarm doesn’t get set or sound off at all.  Maybe they changed that procedure and don’t enforce it anymore? I don’t know.

    In any case,  the scene with Laurence Olivier and Dustin Hoffman in Marathon Man flashes in my mind, and I wonder, "Is it safe?"  I think I’ll wait until they win back more confidence with the consumer before we return to our regularly-scheduled outing there.

    Here's a pretty good rule of thumb. If a retail experience makes you think about Marathon Man, it isn't a good thing.

    Finally, extra credit to MNB reader Kathrin Gentils, who read yesterday's piece about fourth graders prognosticating about technology innovations 30 years from now, and came up with a Star Trek reference:

    You missed a perfect quote for this post:

    "Things are impossible, until they are not." - Capt. Jean Luc Picard

    KC's View:

    Published on: February 12, 2016

    Monday, February 15, is a big deal here in the US - we put mattresses and cars on sale as a way of honoring our first and 16th presidents, George Washington and Abraham Lincoln.

    Still, it is a federal holiday and a school holiday … which means that I’m going to take advantage of the calendar and take the day off.

    As always, the MNB archives are open ...
    KC's View:

    Published on: February 12, 2016

    Let me be clear about this. Deadpool is not for everyone. Not by a long shot.

    But Deadpool, which opens today, is terrific fun.

    It also is raucous, rambunctious, subversive, vulgar, violent, and a lot more sexually explicit than one might expect from a comic book movie.

    But also funny, and even in certain moments, surprisingly sweet.

    For those who do not know, Deadpool is about an amoral, violent mercenary who ends up seriously ill with cancer and then imbued with mutant super powers ... for reasons far too complicated to explain here. Ryan Reynolds is wonderful in the role - sardonic, funny, foul-mouthed and wisecracking. (Morena Baccarin, as his girlfriend, also is great ...but then again, i've had a little crush on her since her "Firefly" days.)

    From the first moments of the film, as the opening credits roll, the moviemakers put us on notice that they are going to make fun of comic book movie conventions, and Reynolds often breaks the fourth wall to talk to the audience, comment on the action, even occasionally make fun of other comic book movies.

    I have mixed emotions about comic book movies, but Deadpool is so light on its feet that it completely won me over. You have to know what you're getting into, but if you're game, I think you'll like it.

    I cannot even begin to say how happy I am that "Last Week Tonight with John Oliver" returns this Sunday night. I've missed the pungent, irreverent humor, and especially its willingness to take on complicated subjects and not only explain them, but also get to their essence and find unexpected humor there ... as well as express moral outrage when called for.

    We need John Oliver. Now. More than ever.

    But ... I'll also say this.

    Last Monday night I watched "Full Frontal" which features former "Daily Show" correspondent Samantha Bee. And I can tell you with enormous pleasure that she crushed it.

    I mean, she really crushed it. She was laugh-out-loud funny, and bi-partisan in her political satire, and she's just made Monday nights on TBS must-see TV. (And if I can't see it on Monday nights, I'll catch up with it on Tuesdays. I love modern TV.)

    I had a wonderful beer when at the beer garden at Eataly the other day - the Dogfish Head Sixty-One, which actually is a beer/wine hybrid, combining the brewer's 60 Minute IPA with Syrah from California. It is delicious, and left me wanting more. It is a major wow.

    That's it for this week. Have a great weekend, and I'll see you Tuesday.

    KC's View:

    Published on: February 12, 2016

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    KC's View: