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    Published on: February 14, 2017

    by Michael Sansolo

    The recent flurry of articles on MNB about ATMs and the banking industry gave me a strange sense of nostalgia and, frankly, not in a good way.

    A good number of years ago, when my hair was longer, darker and pretty unkempt, I’d regularly have to visit a bank branch to cash small checks for spending money. Each visit followed the same pattern and all were unpleasant.

    No matter how many times I saw the same teller, I was always required to present identification and verify my account, just to get $15 in spending money. (I swear the bank guard used to unholster his gun when I walked in, but that’s just probably a dramatized recollection.)

    Then one day 0 around 1980 as I recall - everything changed. My bank branch got an ATM and suddenly my PIN code was all that mattered. My hair and wardrobe were immaterial and my banking experience improved dramatically.

    There are countless young adults who have no recollection of 1980 or banking before ATMs. For them, a bank branch has never really mattered any more than sending a handwritten letter or loading a roll of film. The world moved on and all they know is what exists today.

    There’s no point in telling them how important bank branches, film or letters were. They are simply irrelevant to their lives.

    As we talk about the challenges facing the food retailing industry going forward we need to remember these changes. We need to remember that there were countless paragons of business or ways of conducting commerce that vanished simply because the times changed.

    And that’s why these are topics we all need consider today.

    Take a contrary example. Thanks to my age, I also recall when videocassette recorders first became widely available, changing the way we all watched movies. It’s hard to believe how quickly VHS gave way to DVDs and then to Netflix. In the process, businesses like Blockbuster blossomed and collapsed.

    But movie theaters - some of them, at least - have marched on by drastically changing the experience they offer. Today I book tickets in advance for my local theater, so I know exactly what seats I can get. The tickets are pricier than ever, but the seats are fabulous. Stadium seating guarantees that no taller person ever blocks me and the projection itself is stunningly clear. (It has to be, because I have a pretty good flat screen HD-TV at home, and my couch is extremely comfortable, with an unobstructed view.)

    The business changed and theaters changed. Sure, they are still challenged, especially because they remain dependent on quality, popular content. A season of lousy movies can't be compensated for by a great theater experience. But for most moviegoers they remain relevant and they now achieve profitability by adding better food and a wide variety of beverages.

    That’s what the continued battle for relevance demands. Change with the times, deliver the new experience and the future may hold a place for you. Fail to do so and question when your name and business will be remembered in the future only through nostalgia.

    That’s a pretty stark choice. But it ultimately is the only one available to you.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.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.
    KC's View:

    Published on: February 14, 2017

    by Kevin Coupe

    Well, that didn't last long.

    Playboy said this week that a year after it announced it would no longer feature naked women in the pages of its magazine, it now will once again feature nudity in its centerfolds and elsewhere.

    To be clear, the decision to eliminate nudity was rooted in business, not morality. At the time, the magazine was conceding that nudity couldn't be its differential advantage when it is available on every computer and smartphone with an internet connection. (So I'm told.) And so, it had to create a magazine where people actually read it for the articles, as opposed to just saying that they read it for the articles while ogling the pictures.

    Cooper Hefner, son of founder Hugh Hefner and the company's chief creative officer, wrote yesterday on Twitter, “I’ll be the first to admit that the way in which the magazine portrayed nudity was dated, but removing it entirely was a mistake ... Nudity was never the problem because nudity isn’t a problem. Today we’re taking our identity back and reclaiming who we are.”

    Of course, the problem may simply be that Playboy has bigger problems - it may simply have passed its expiration date.

    Playboy remains a magazine, I think, that you can't leave out on the coffee table or read on a train or plane. When they said they were getting away from nudity, they said that they wanted to get away from that image. If that didn't work, and the articles aren't good enough to justify reading the magazine, and they still have the problem of nudity being available from a wide range of sources, they have to face the fact that their value proposition simply isn't very compelling.

    Maybe it just isn't a sustainable business model any more.

    It would be an Eye-Opener for a magazine that was originally created to open people's eyes, but now seems better at putting readers to sleep.
    KC's View:

    Published on: February 14, 2017

    by Kevin Coupe

    LAS VEGAS - Yesterday morning I had the opportunity to moderate a breakfast session/panel discussion focusing on how independent retailers should respond to new research results compiled by The Nielsen Co. and unveiled at the National Grocers Association (NGA) convention here.

    While the survey results revealed high consumer satisfaction among independent supermarkets - the study suggested that 82 percent of respondents who primarily shop at independents say they are very/extremely satisfied, compared to 65% of respondents who say the same thing about their national chain store experience - it also pointed to areas in which independents need to focus. Some would call them challenges, while others would describe them as opportunities. Either way, these three categories - e-commerce, the in-store experience, and health-and-wellness - are areas that need work.

    Because I was moderating the panel, I'm afraid I was unable to take copious notes about what each of my panelists said. (I always figure that it is better to listen to what people are saying when one is responsible for moving the conversation along.) But I think I can capture the essence of what we talked about...

    The Nielsen survey focused on how independents need to transform from "personal touch" to "digital touch." While independent grocers take pride in friendly stores where they know their customers (and some of them, in my opinion, actually are justified in such feelings), the fact remains that they need to find ways to invest in technology solutions that will at least address some of the advantages claimed by Amazon.

    There were some interesting numbers from Nielsen - like 20% of customers shopped online for groceries during the past year, compared to 16 percent the previous year. Add that to additional Nielsen research suggesting that within a decade 20 percent of total store sales will go online, and 40% of center store sales. These are enormous challenges to in dependent retailers, and one of the things we talked about was finding ways to address the automatic replenishment abilities in which Amazon has invested - every dollar spent on Amazon's Subscribe & Save program, or via its Dash buttons, is a dollar that is likely never to return to traditional stores.

    Beyond e-commerce, however, there was general agreement that independent retailers have to invest in the in-store experience, creating fresh foods departments that inspire hunger rather than apathy, and health-and-wellness offerings that are truly relevant. It means trying to get ahead of the consumer and anticipate needs and desires rather than just listening to the shopper. And it means understanding that independents have to play to their strengths.

    This isn't always easy. Not surprisingly, the Nielsen research showed that what consumers really want are more variety, better service and lower prices ... but providing all three is virtually impossible.

    They have to choose. And they have to make informed choices.

    You can see some of the Nielsen study results here.

    In other NGA news...

    • Brady Long of Buehler's Fresh Foods, located in Medina, Ohio, defeated 22 other Best Bagger competitors from across the nation to claim a grand prize of $10,000 and the title of the National Grocers Association (NGA) Best Bagger Champion.
    KC's View:

    Published on: February 14, 2017

    Reuters reports that Walmart is engineering a major change in how it acquires products, combining the purchasing functions for its physical stores and online operations. The move is designed "to stamp out duplicate efforts as it consolidates buying operations to better fight Amazon."

    The story says that "vendors contacted by Wal-Mart about the change told Reuters the store and online buying teams of the world's largest retailer currently operate independently.

    "Wal-Mart has told some vendors it is seeking to make the buying process more efficient for itself and vendors, and improve coordination between its buying teams. It also wants to apply its bricks-and-mortar expertise in securing the lowest possible prices to its e-commerce business, according to the vendors, who spoke over the last few days."

    Walmart has not commented on the record about the report, but sources tell Reuters that the change will be officially announced later this week.
    KC's View:
    Reverse-engineering the system is never easy, not from an operational point of view, nor from a personnel perspective. But I think that Walmart is making big, tough decisions here, understanding that it has to take friction out of the system to the greatest degree possible.

    This won't be a simple, quick process, I suspect. And I'd guess that they'll meet some natural resistance from legacy systems that have been in place fro a long time. But I don't see that they have a lot of options ... though, to be fair, they're also placing some pretty big bets.

    Published on: February 14, 2017

    The Cincinnati Business Courier reports on technology initiatives being pursued by Kroger, suggesting that the chain is no longer just a food store. "It's a tech firm," the Courier writes - a tech firm with offices in various parts of the country that are working on some fascinating ideas, including something called a “bananacam."

    Really interesting piece ... and you can read it here.
    KC's View:

    Published on: February 14, 2017

    WinCo Foods announced that today it will officially open its new, $135 million, 800,000 square foot state-of-the-art distribution center in Denton, Texas, which is positioned to serve the company's current nine stores in the Dallas area, as well as four stores that it plans to open in Oklahoma over the next two years.

    “What we’re now able to achieve, in terms of bringing the lowest price groceries to our North Texas customers, is remarkable,” the company said. “With this newest distribution center, in such a key place in the country, WinCo can deal directly with suppliers and vendors to get all manner of product on the shelves in the shortest possible time in both our existing stores as well as stores in the region we plan to open going forward ... “We want to send a clear signal to North Texas and beyond that we are here for the long haul. WinCo foods employee-owners have invested heavily in the area and we want to be here for a very long time to come.”
    KC's View:
    I don't think there is any question that WinCo is a company sailing with the wind at its back, getting momentum and feeling a little ambitious about expansion. But I also know that this is a company with its feet firmly on the ground, and no sense of hubris. They're a hard nosed, tough competitor.

    Published on: February 14, 2017

    The Tampa Bay Times reports that natural-and-organic focused Lucky's Market will open at least six new stores in Florida over the next 18 months. The first of the new stores is scheduled to open in St. Petersburg in the summer of 2018, and the others will be located in Sarasota, Panama City, Fort Lauderdale, Port St. Lucie, and Bonita Springs.

    Lucky's opened eight stores in Florida last year.

    The Times notes that "Lucky's is entering the Florida market at a time when many other organic grocery chains are looking to expand here, too. Sprouts Farmers Market will open its first Tampa Bay area location in Carrollwood on Feb. 21. Earth Fare, another chain known for its healthy foods, opened its first store in Tampa Bay at the Seminole City Center late last year."

    The expansion also is announced about 10 months after Kroger announced a strategic partnership with Lucky's Market, investing in the company so it could accelerate the company's growth in new and existing markets.
    KC's View:

    Published on: February 14, 2017

    The Wall Street Journal has a story about how "a group of tech entrepreneurs and investors including billionaires Jeff Bezos and Eric Schmidt" has invested in an urban farm in San Francisco that they hope "will yield as much as 3 million pounds of leafy greens each year."

    In coming months, the story says, "the company plans to begin marketing produce bred for local tables rather than shipping durability."

    The Journal notes that the facility, owned by startup Plenty United Inc., "is among a wave of startups seeking to shift part of the $49 billion U.S. retail produce market from sun-kissed crop fields to giant warehouses, old factories and repurposed shipping containers. These indoor facilities are tricked out with sensors that measure temperature and moisture, automated systems that pump in water and nutrients, and strips of LED lights to provide energy - with no need for sunlight or soil."
    KC's View:

    Published on: February 14, 2017

    • The San Francisco Chronicle reports that Amazon plans to open one of its physical bookstores in Walnut Creek, California, in Northern California.

    According to the story, "Amazon would not say when the store will open or how big it will be, adding that the company is now hiring store managers and associates.

    "The opening of an Amazon store in the Bay Area — a hub of independent bookstores — seemed inevitable, as there are stores in Seattle, Portland and San Diego. The company says others will open soon in Chicago, Greater Boston (two locations), New Jersey and New York City."


    • The Food Marketing Institute (FMI) said yesterday that it was one of 16 food and beverage trade and lobbying associations to sign a letter to the US Food and Drug Administration (FDA) "requesting that the agency extend the compliance dates for supplier verification under the Preventive Controls for Human Food (PCHF) and Foreign Supplier Verification Program (FSVP) final rules and align the compliance dates as part of the extension."

    According to the letter, "Members need additional time and guidance from FDA to develop compliance programs for the supplier verification requirements. Furthermore, it makes practical sense to align the compliance dates for both rules as part of an extension. FMI and others are asking that the compliance dates be extended until May 28, 2018 for any current compliance deadline currently falling before that date."


    • IGA yesterday announced four independent retailers from around the world that have been named 2017 IGA International Retailers of the Year.

    The winning retailers are: Kurt Rodhe, Rodhe's IGA Marketplace, Millersburg, Ohio; Nick Chapley, Frewville Foodland IGA, Frewville, South Australia, Australia; Weilong Li, Xinglong Happy Family Business Group Co., Shen Yang, Liaoning 110180, China; and James Kelly, Taylor Rd IGA, Nedlands, Western Australia, Australia.
    KC's View:

    Published on: February 14, 2017

    MarketWatch reports that "the chief executive officers of major U.S. retailers plan to travel to Washington, D.C. for a meeting Wednesday to fight a House Republican plan to impose a border adjustability tax ... The heads of eight retail companies including Target Inc., Gap Inc., Best Buy Co., and AutoZone Inc., will meet with Kevin Brady, chairman of the House Ways and Means Committee and Senate members, according to sources familiar with the plan."

    It was not known whether the CEOs will get a meeting at the White House.

    The story notes that retailers have voiced opposition to the proposal to tax imported goods by 20%, saying it will cut into profits and only increase prices for consumers."
    KC's View:

    Published on: February 14, 2017

    A story yesterday about award-winners at the National Grocers Association (NGA) convention accidentally listed the 2016 winners, not the 2017 awardees. (When I say "editing error," let's be clear. I am both the writer and editor. I screwed up. I have no explanation for how this happened.)

    Let me try again:
     
    The Thomas K. Zaucha Entrepreneurial Excellence Award was presented to Rich Niemann, Jr., President and CEO of Niemann Foods, Inc. The Zaucha award is "presented annually to recognize an independent grocer that exemplifies persistence, vision, and creative entrepreneurship."

    And, the Thomas F. Wenning Pinnacle PAC Award was presented to Roger Collins, Chairman of Harps Food Stores. The Wenning award "is presented to an NGA member who helps advance the role and presence of the independent grocer and NGA in government and political affairs."

    My apologies for the mistake.
    KC's View:

    Published on: February 14, 2017

    ...will return.
    KC's View: