business news in context, analysis with attitude

Published on: November 22, 2016

by Michael Sansolo

Kevin’s eye-opener in Monday’s MNB on the declining use and relevance of manual transmissions in cars probably elicited one of two reactions among our readers.

Many folks, like me, probably waxed nostalgic about those past times when stick shift was the only way to drive. We related to Kevin’s comments about how it enhanced the experience and put us in greater control of the ride.

But a second group - no doubt larger - was completely unmoved. They likely never drove with a stick or they have never actually seen a car with manual transmission. After all, as Kevin explained, those cars have become quite a rarity.

Time, innovation, technology and progress all march on and the march isn’t stopping anytime soon.

Ironically, I got a great example of that yesterday when my son and I wandered into the Tesla store in our local shopping mall. Not only is Tesla getting rid of gasoline powered engines, and even the traditional dealership structure, but the company also is feverishly working to eliminate one other element of the automotive experience.

The driver.

I know the technology isn’t perfect, just as I know many of us simply won’t want to abandon our control of the wheel. But a quick conversation with my son revealed he could see the day (in the far-off future I hope) when, as I age, that I'll be able to use a self-driving car because my skills will have deteriorated to the point where I no longer can drive competently.

In fact, I wish the technology were good enough today so that my father, who soon will be 90, would have a safer way to get around.

I imagine that the auto companies are heavily researching how to make driverless technology increasingly attractive to now aging baby boomers who grew up behind the wheel listening to songs about the driving experience. We have to believe the successful companies will figure it out before anyone takes our T-Bird or Little Deuce Coupe away. (If you don’t get those references, use Google. Better yet, if you want to watch a terrific movie about car culture, watch American Graffiti, which is the movie George Lucas made before he conceived of Star Wars.)

There’s a very clear parallel in all of this to how we cook. One week from now we’ll no doubt learn that more Americans celebrated Thanksgiving dinners with meals prepared by someone else. It might be supermarkets, restaurants or Amazon.com, but almost certainly Blue Apron will post some incredible statistics on its traffic marking yet another sea change for the holiday that most revolves around food.

Even many scratch cooks will use partially prepared products to assemble their meals. For some it’s analogous to giving up manual transmission; for others it’s driverless cars.

So like the car companies, the food industry needs to continually figure out how to manage the changing nature of cooking. For instance, consider a recent article at Mashable.com suggesting the best kitchen gifts to give people who hate to cook. (You can read it here.)

As the author suggests, some of these people don’t want to cook at all. Yet some of these gifts may help make the process so simple it might get even the most reluctant person back in the kitchen.

Time marches on and we have to move with it.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.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.

Published on: November 22, 2016

by Kevin Coupe

Advertising Age has a story about how a Maggiano's Little Italy restaurant in the Washington, DC, market took the unusual step of donating all of last Friday night's profits to the local office of the Anti-Defamation League - all because it got caught in the middle of a political firestorm.

What happened was this. A group called the National Policy Institute apparently made a late booking of a banquet space at the restaurant, which hardly is uncommon for such a facility. The problem was that the National Policy Institute actually is a white nationalist group that was holding a conference in DC over the weekend ... a conference that ended with people giving Nazi salutes and using a German term used by Nazis to describe media critics , “Lügenpresse,” to describe the US mainstream media.

(To be clear, "white nationalist" is just another way to say "white supremacist." Richard B. Spencer, who heads up the group, has called for recasting the US as "a new society, an ethno-state that would be a gathering point for all Europeans,” and has called for “peaceful ethnic cleansing.”)

When it was discovered that the National Policy Institute was at the restaurant, protestors showed up ... and the result was that Maggiano's had to close the restaurant "to protect the safety of our Teammates and Guests," the company said.

Steve Provost, president of the restaurant chain, put out a statement in which he said that "after the event, a guest sent a tweet in which she made a 'Sieg Heil salute' in support of Hitler and white supremacy. This expression of support of Hitler is extremely offensive to us, as our restaurant is home to Teammates and Guests of every race, religion and cultural background ... We want to sincerely apologize to the community of Friendship Heights for inadvertently hosting this meeting, which resulted in hateful sentiment. We want you to know that at the suggestion of one of our guests, we are donating the profits from our restaurant sales on Friday, $10,000, to the DC office of the Anti-Defamation League, which for decades has been working to bring people together in peace and understanding."

Good for Maggiano's.

It is, I think, a cautionary tale to which every business need to pay attention, lest they get caught in similar firestorms in which the vast majority of their customers are offended by the abhorrent views of a small, repulsive but loud minority.

These people are disgusting. Their views are vile. Free speech means that every US citizen has a right to express himself or herself ... though the thought that these people actually are citizens is really scary. But hate speech is nothing more than hate speech, and ought to be decried by every person of ethical character. Not just ignored, but denounced.

These animals are out there. We all have to keep our Eyes Open.

Published on: November 22, 2016

Barron's reports that a new study from Cowen & Co. estimates that there now are 49.5 million members of Amazon Prime, up 23 percent from just a year ago. (The number is an estimate. Amazon does not release these numbers.)

Two other pieces of data from the Cowen study:

• "83% of Prime members purchased an item from Amazon in October versus 49% of U.S. consumers that don’t have Prime."

• "The number of people making 'Grocery and consumable' purchases at Amazon are up 12% from last year ... Meanwhile, those making the same kind of purchases fell 2% at Wal-Mart and rose just 1% at Target."

Published on: November 22, 2016

CNBC reports that after a series of tests, Domino's Pizza has begun delivering pizza via drones in New Zealand - flying two pies to a customer's backyard in Whangaparaoa, about 20 miles north of Auckland.

The company said that the service is being done in partnership with Flirtey, a drone delivery service, and was accomplished after "a number test-flights, including food temperature testing, and liaison with government."

According to the story, "Domino's said it is looking at opportunities for drone delivery trials in its six other markets – Australia, Belgium, France, The Netherlands, Japan and Germany. Although no mention of the United States was made, it seems clearer skies are ahead for American businesses betting on drones."

Published on: November 22, 2016

Business Insider has a story suggesting that while Black Friday has lost a bit of its luster in recent years, "according to data from location tracking company Foursquare, discount stores, such as dollar stores, are gaining in foot traffic this year as Black Friday approaches. While most retailers are expecting a slump in foot traffic, Foursquare predicts that the number of visits to dollar stores this year will exceed the last two years."

While dollar stores traditionally have not gotten a bump out of Black Friday traffic, "dollar stores are predicted to pull off a Black Friday win for two reasons," the story says.

"First, this year customers are less interested in traditional Black Friday sales. Second, more and more Americans are interested in deep-discount retailers year-round, a phenomenon that has helped fuel the growth of dollar stores across the county."

Published on: November 22, 2016

Digital Trends reports that in an effort to make some inroads into the bricks-and-mortar world, Google is creating what appears to be "a blend of the Samsung Experience and an Apple Store" in boutique shops located inside select best Buy locations.

The shops are designed with modular furniture that can be adapted to different needs, but the primary goal is to "foster a sense of community for those who visit."

According to the story, "Google Shops feature the latest and greatest from Google and its partners, including the Pixel and Pixel XL smartphones, Daydream View, Chromecast Ultra, and Google Home, along with a slew of accessories and other products. Google Shops also feature a multiscreen interactive display called Portal and 'Google Guides,' full-time staff who are Google contractors that go through product-focused tutorials."

Published on: November 22, 2016

• TechCrunch reports that Amazon is adding a new skill to its Echo/Alexa AI voice-activated technology - working with AT&T, it is now allows people to send text messages to predetermined contacts ... using their voices.

According to the story, "The skill works pretty much as you’d expect. Ask Alexa to text a friend on your contacts list and she’ll prompt you to speak the message, freeing you up to wash the dishes, your plants, play the glockenspiel and whatever it is people do with their hands while not sending a text. There’s not really a heck of a lot more to it than that, really."

Published on: November 22, 2016

• In Toronto, the Globe and Mail reports that McDonald's there has made a deal with WestJet Airlines that will have its McCafe coffee served on flights. It is seen as "not only a way to bolster its brand but also a step to potentially expanding the sale of its brew in other non-traditional locations, such as universities and hospitals, at a time when overall coffee sales in the restaurant sector are stagnant."

The story suggests that McDonald's beat out Starbucks to land the WestJet contract; it also notes that local icon Tim Horton's does not have a similar airline deal. Yet.

Next step, Egg McMuffins.


• Ad Week reports that a select number of Starbucks stores have begun selling a coffee mug made by Ember - a mug that costs $150.

It isn't just a mug, though. According to the story, "The internet-connected mug lets users adjust the temperature of the liquid inside via the brand's smartphone app ... if there is a precise temperature you prefer your beverages to be, this technology may be your solution. It can rapidly cool your coffee to a Fahrenheit degree and then hold the temperature right there for as long as the mug is powered."

I don't know about you, but coffee doesn't last long enough in my cup to have to worry about regulating the temperature...


• The National Organic Standards Board announced that it has voted "to update U.S. organic standards to exclude ingredients derived from next generation genetic engineering and gene editing.

"This recommendation to the US Department of Agriculture’s National Organic Program will ensure that ingredients derived from new genetic engineering techniques, including synthetic biology, will not be allowed in the production or final product of foods and beverages that are certified organic. Synthetic biology is a new set of genetic engineering techniques that include using synthetic DNA to re-engineer organisms to produce substances they would not normally produce or to edit DNA so as to silence the expression of certain traits."

The Board says that "like 'traditional' GMOs, synthetic biology ingredients are entering food and consumer products in absence of adequate health and environmental safety assessment, oversight and labeling. Many are being falsely marketed as 'natural'."

Published on: November 22, 2016

• Louisiana-based Rouses Markets said yesterday that it has hired Steve Black, the president of Colorado-based Lucky's Market (in which kroger made an investment earlier this year), to be its new president/COO. Black succeeds Scott Miller, COO at Rouses for the past nine years.

At the same time, Donny Rouse - whose grandfather started the company and who has been serving as managing partner of the chain - will become the company's CEO.


• Tyson Foods announced that CEO Donnie Smith, a 36-year company veteran, will step down at the end of the year, after having served in that role since 2009. He will be succeeded by Tom Hayes, the company's president, who will retain both titles.

Published on: November 22, 2016

On the subject of Target's continuing grocery issues, one MNB user wrote:

Many of the Target PFresh stores located in the Midwest have small grocery departments and are often located on the far side of the entrance making a quick fill-in purchase a chore because you have to walk the width of the store. I often wondered if their management ever walked these stores as shoppers to realize this challenge. It seems a relatively easy fix would be to add a second entrance and a few registers down the other side where grocery is located much like Meijer and Walmart have done for their massive stores.




Got the following email from an MNB reader:

I’ve enjoyed your column for years, but have only ever written in on one previous occasion. I just happened to read through two articles about cars this morning, and that prompted me to write in.

I, for one, hope that Amazon does disrupt the car-buying process.  Being a native of NJ, we are essentially trapped into dealing with horrible dealerships by the arcane laws here.  Tesla tried, but ultimately had to move out of NJ, I believe, and sell through traditional dealerships instead of their “store” at the upscale Short Hills Mall.

At any rate, I had recent experience which illustrates what’s not working.  Like you, I refuse to give up my manual transmission.  (I’m currently driving a 2013 Nissan XTerra, because it was the only non-pickup, 4-wheel drive vehicle that came with a 6-speed manual.  If I were a man of more means, I could have gotten a Porsche Cayenne.)  I was recently very excited by the prospect of trading it in for a Chevy SS, as Chevy had a 20% off sale for a limited time, and the 415-hp V8 SS is said to be the “spiritual successor” to the E39-series BMW M5 of the late 90s/early 2000s.

Anyway, Chevy has their own online “shopping service”.  Which is, apparently, completely ignored by the dealership.  Not only did they not offer me anything close to what the website said for my trade-in (offer was about 15% less, factoring in a 10% profit on the trade-in), but they also taped a piece of paper to the windshield -- an “addendum” -- essentially saying that they were adding $3,000 to the price because they felt like it.  Combine this with the fact that they still hadn’t completed the repair of the car which was halting the sale of it.  So, not only was the monthly payment $290 more than what I was quoted online, but I couldn’t even test drive it and see that sweet, super-short-throw shifter in action.
 
Needless to say, I walked out of there with nothing.  And wasted 3 hours of my day driving there, being continuously disappointed, and driving home.  And with a very sour taste in my mouth for Chevy.  I may give it another shot next year (last model year for this car), because a car like this doesn’t come along all the time.  But now the other dealerships have to make up for this lousy one.
 
What a nightmare.  Amazon can’t do anything but improve this process.

One of those two car-oriented pieces yesterday concerned how manual transmissions gradually are vanishing, which I thought was too bad.

Another MNB reader wrote:

From my first car, Vermin Volkswagen, a '59 convertible with a manual choke, to my current 16 year old vehicle, Sherwood Forester, who has upwards of 345,000 miles, I've driven a stick.  Driving an automatic transmission is aiming, not driving.

Love your attitude.

And from another reader, Peter Talbott:

I bet you enjoyed the scene in The Right Stuff when the astronauts demanded to have a window on the spacecraft and to have control of the re-entry procedures, rather than to just ride like a monkey.

You betcha. Though, to be fair, I loved pretty much every scene in The Right Stuff, one of the great American movies.




On another subject, an MNB user wrote:

Re: Your comment that you hope when he retires, Stew Leonard Jr. decides to teach.  Well, I immediately had an epiphany...

You and he, traveling across country to your Oregon summer class, in your Mustang (with a stick), ala Martin Milner/George Maharis in "Route 66."

Hey, just a thought, sounds like you have plenty of time to plan it all out.  ;-)

Thanks, and Keep doing what you do.

Stew is welcome to join me anytime. Though I suspect he has a lot better things to do than be George Maharis (or Glenn Corbett, for that matter) to my Martin Milner.

Published on: November 22, 2016

In Monday Night Football, the Oakland Raiders defeated the Houston Texans 27-20.