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    Published on: February 17, 2017

    by Kevin Coupe

    It likely is a coincidence, since television commercials and marketing campaigns usually take months if not years of preparation before ads show up on television or online. But it remains an interesting moment in the athletic wear competition that as Under Armour experiences some very public dissent from some athletes with whom it is in business because of pro-Trump administration comments made by its CEO, Kevin Plank, Nike has engaged with a number of athletes for a commercial that at least obliquely takes issue with perceptions of administration attitudes.

    The ad is called "Equality," and it is a powerful piece of advertising, shot in black-and-white, that suggests that "equality has no boundaries." Featuring people like LeBron James, Serena Williams, Kevin Durant, Dalilah Muhammad, and Victor Cruz, with Alicia Keys singing Sam Cooke’s “A Change is Gonna Come," the commercial in the middle of Black History Month. You can see the 90-second version here.

    “Opportunity should not discriminate,” narrator Michael B. Jordan, says in the piece. “The ball should bounce the same for everyone.”

    Indeed, Nike has been very public in its opposition to some Trump initiatives - betting that while such a position undoubtably will ignite calls for boycotts in some circles, it simultaneously will reinforce its image among its target consumers and the athletes who represent the company.

    “Nike believes in a world where everyone celebrates the power of diversity,” Nike president/CEO Mark Parker recently wrote in a memo to employees. “Those values are being threatened by the recent executive order in the U.S. banning refugees, as well as visitors, from seven Muslim-majority countries.”

    It is hard not to see this commercial as part of this values statement, and yet another example of how at this unique moment in time, we are seeing an intersection of politics and business unlike we've ever seen before.

    The commercial, I think, would be extraordinary under any circumstances. What makes it an Eye-Opener is how it reflects increasing tensions between the private and public sectors, playing out in public to an extraordinary degree.

    KC's View:

    Published on: February 17, 2017

    Omnikal, which used to be known as, is out with its annual list of the 50 most diverse US corporations that "are awarding the most business to the growing, culturally diverse vendor/supplier marketplace," and Walmart is tied with Northrup Grumman for number two on the list.

    AT&T is ranked number one.

    The other food industry and retail companies that are on the list include Apple (#4), Kroger (#8), Coca-Cola (#10), PepsiCo (#15), Target (#16), Colgate-Palmolive (#17), Walgreens (#24), Johnson & Johnson (#28), Home Depot (#29), Nordstrom (#36), Nestle (#38), Miller Coors (#39), Ahold USA (#40), CVS (#44), Starbucks (#47), and Kellogg's (#49).

    In its rankings, Omnikal argues that an inclusive supply chain results in "more buying power" ... "upleveling this group’s lifestyles" ... "building more affluent communities" ... "and growing economic muscle …in multicultural markets that are now considered the Inclusive Majority."
    KC's View:
    Diversity shouldn't be a big deal. It should just be an unremarkable fact of life. But it is worth noting and celebrating, and probably will be for the foreseeable future.

    Published on: February 17, 2017

    The New York Times this morning reports that the Washington State Supreme Court has ruled that "a florist who refused to sell flowers for a same-sex wedding cannot claim religious belief as a defense under the state’s anti-discrimination laws." Washington Attorney General Bob Ferguson said the ruling made the point that “sexual orientation is a protected class — just like race, just like religion.”

    The lawyer representing the florist said the case would be appealed to the US Supreme Court. Kristen Waggoner said that "because a flower arrangement is an artistic expression, the court effectively ruled that the state could regulate, with punitive government authority, what artists may sell. 'All creative professional expression is at risk,” she said.

    The Times frames the story this way: At the "heart" of the ruling is "a very human story about Arlene’s Flowers in the small city of Richland, in southeast Washington, and what happened there in 2013 when Robert Ingersoll and Curt Freed started planning their wedding.

    "The shop’s owner, Barronelle Stutzman, knew that Mr. Ingersoll and Mr. Freed were gay and had sold them flowers for years, but then refused to provide flowers for their wedding. Her Christian faith, which defined marriage as between a man and a woman, created a line, she said, that she could not cross. But in affirming a lower court’s finding, the Supreme Court said flatly that it agreed with the couple — flowers were not really the point."

    Indeed, the court said that the case “is no more about access to flowers than civil rights cases in the 1960s were about access to sandwiches.” And Ferguson, the state's attorney general, said that the case did not mean that the flower shop is "required to sell wedding flowers. They are, however, required to sell wedding flowers equally if they choose to sell them.”
    KC's View:
    My first thought when reading this story was that I'm not sure when the Washington State court system became the center of the legal universe ... it certainly has been in the news a lot lately.

    I have to be honest here. While I agree that sexual orientation should be a protected class, like race and religion, I do sort of wish that somehow this conflict could have been avoided. The gay couple could've gone to a different, more tolerant florist, or the florist could've taken the position that providing flowers to the event did not mean endorsing it.

    But we don't live in that kind of world right now. Conflict is the name of the game these days.

    Published on: February 17, 2017

    The New York Post reports that Fairway Market, having emerged from bankruptcy last year, now "is now looking to sell its ginormous Bronx warehouse" as part of a broader restructuring.

    The Post writes that Fairway, owned by Blackstone Group’s GSO Capital Partners, "has been unable to jump-start the business since its July bankruptcy exit — in part due to the increasingly competitive environment from rivals like Amazon, FreshDirect, Trader Joe’s and Whole Foods. The retailer will face a cash crunch later this year and is looking to trim bloated operational costs, according to industry experts familiar with the situation."
    KC's View:
    Fairway strikes me as just a classic example of what happens when a retailing entity is controlled by a Wall Street-oriented investment group that seems to know little if anything about Main Street.

    When the longtime family-owned company went public in 2013 - an IPO engineered by Sterling Investment Partners - the money guys were talking about having 300+ stores far beyond the company's New York metro area home market and 15 existing stores, and it built the $20 million distribution facility in the Bronx in 2015. But since that time, Fairway has been traveling what the great Bob Murphy used to call "nine miles of bad road," with losses and decreasing market share amid increased competition.

    They're getting to the point where the real estate may end up being worth more than the stores, and perhaps where it will make sense for somebody to come in a pick up the company for a song.

    Published on: February 17, 2017

    The San Francisco Chronicle reports that while Amazon has announced plans to open an Amazon Books store in Walnut Creek, in the San Francisco Bay area, it also has "experienced a significant setback: Plans for an Amazon grocery store in San Carlos have been abandoned, according to the site’s property owner."

    At the same time, while "an Amazon grocery store project in Sunnyvale won approval last fall," there are few signs that it is "moving forward. Both the Sunnyvale and San Carlos stores would have allowed shoppers to order online and then pick up groceries in person."
    KC's View:
    The story suggests that part of the problem for Amazon has been on the planning and zoning side; as the company becomes bigger and more ubiquitous, it also tends to attract the same sort of resistance from neighborhoods and consumer groups that traditionally have put up a fight against companies like Walmart.

    This strikes me as being fair. Though I might argue with the characterization of this as a "significant setback." There are a lot of ways for Amazon to come to market, and it has a lot of different initiatives in the hopper. Sometimes, as my mother used to say, "Patience is a virtue."

    Published on: February 17, 2017

    The Austin Statesman reports that My Fit Foods, one of the earliest companies to get into the healthy, ready-made meal kit business, eventually operating out of 80 storefronts in five states, closed down about a week ago.

    “We know that you have depended upon us to support your healthy habits, and we are deeply sorry for any inconvenience our closure may have caused you,” the company said in a prepared statement.

    The San Antonio Express News writes that the company "sold prepackaged, low-calorie meals such as pasta with ground turkey; zucchini served with chicken breast, pesto and sun-dried tomatoes; spinach and chicken enchiladas; and chicken Parmesan." The company had "secured a confidential sum from the American Farm Bureau Federation to fund the company’s growth strategy and pursue partnerships with grocers alongside majority investor Marlin Equity Partners, the company said in a September news release."

    However, the company also experienced some executive turmoil when its CEO was arrested for possession of a controlled substance and had to be replaced.
    KC's View:
    I have to be honest here. While I knew of the company, it wasn't really on my radar ... and yet, I've gotten a bunch of emails from readers about how dismayed they are by this closing and what big news it was. I'll take that on faith. The one thing I would suggest is that the demise of one company does not spell doom for the entire segment, and Forbes notes that while My Fit Foods has been closing stores, "its closest competitor, Snap Kitchen, is opening them. Last October, My Fit Foods closed its three stores in Chicago. Snap Kitchen has six in Chicago underway."

    Published on: February 17, 2017

    ...with brief, occasional, italicized and sometimes gratuitous commentary…

    • The Atlanta Business Chronicle reports that among the 115 locations being considered by Lidl when it begins operating in the US are seven in Georgia.

    As reported earlier this week, Lidl appears to be ahead of schedule, and now says it will open its first 20 stores this summer, in Virginia, North Carolina and South Carolina. But the paper also pushes a narrative that seems to be gaining traction in the media - that Kroger, which has an enormous footprint in the east coast markets that Lidl is targeting, may be vulnerable to this kind of competition.

    I'm really just guessing here, but I suspect that the folks at Kroger have been playing close attention to how the competitive wars have been playing out in the UK, where discounters Aldi and Lidl have been eroding the market share advantages enjoyed by mainstream retailers such as Tesco. Part of the problem in the UK, I've always thought, was some combination of denial and hubris that led big retailers to think they were unassailable. But as we've often said here on MNB, there is no such thing as the unassailable business advantage. I think Kroger knows that.

    • Southeastern Grocers, parent company to Bi-Lo, Fresco y Más, Harveys and Winn-Dixie, announced yesterday what it is calling "its largest-ever transformation of private label product, which will span approximately 3,000 items across all categories throughout each banner specific store throughout 2017.  The company says that it "has tested more than 2,330 products and made over 2,260 quality improvements," has "developed a test kitchen and sensory lab tasting facility to capture valuable consumer insights," and as a result is introducing three new brands: SE Grocers Essentials, SE Grocers and Prestige.

    I imagine that the folks at Southeastern Grocers have to be very concerned about Lidl's plans for the southeastern US ... and perhaps this expansion of its private label program is one way of expressing that.
    KC's View:

    Published on: February 17, 2017

    Regarding the expanding capabilities and presence of systems like Amazon's Alexa/Echo and Google's Home, one MNB reader wrote:

    We used both Echo and Home... And with a very clever 6 year old in the house the Home is far and away the better system today. We are constantly playing trivia. My wife and I are learning too. However, still worried about privacy and big government access since both retain some information. Google and Amazon would do us all good if after 30 seconds all information is erased on a regular basis. Why do they need more than name and address anyway except to gather info for marketing purposes and additional billings. My father would have never let these in the house!!

    I get your point ... though I'm not sure I'd evaluate the potential success and efficacy of such systems based on what our parents would accept or reject.

    On another subject, from another reader:

    I am in Seattle for work and made it a priority to visit the Starbuck’s Reserve Roastery.  I absolutely loved the experience and sat in one of the coffee bar seats.  I don’t see myself paying $6.58 regularly for tall Pantheon blend coffee, but definitely willing to do it on this visit.  The baristas were extremely knowledgeable.  I watched and listened as one of the baristas was explaining the method he was using to prepare the coffee for a group of four.  He was sharing his knowledge and answering all of their questions.  I was impressed with his enthusiasm and also heard him tell the group that he was a drama major.  You could see that he really enjoyed being the center of attention and knowledge and really loved what he was doing.  Retail as theatre is definitely practiced at Starbuck’s Reserve Roastery.


    And, as I say to every reader who goes to Seattle, make sure you go to Etta's. Go to the bar. Ask for Morgan. And tell him you read about him on MorningNewsBeat.

    Regarding the use of sensors to track the movements and behavior of employees, MNB reader Leo Martineau wrote:

    I'm with you on this one Kevin.  It smacks of "Big Brother" to me.  Remember the book entitled "1984" by George Orwell?

    Remember it? "1984" has become a best-seller again because of concerns in some quarters about how it presages the current US political situation.

    And, from another reader:

    I would be willing to bet the farm that most employees have no clue!!

    If so, that would really be reprehensible.
    KC's View:

    Published on: February 17, 2017

    Not only do I have a book for you to read, but it also happens to be a book that every food retailer should stock in their stores.

    "A Meatloaf in Every Oven" is subtitled "Two chatty cooks, one iconic dish and dozens of recipes - from Mom's to Mario Batali's," and that pretty much covers it. The authors are Frank Bruni and Jennifer Steinhauer, who both have written about food for the New York Times, and this is a delightful piece of writing, offering both recipes and a window on the unique place that meatloaf plays as kind of the ultimate comfort food.

    The book includes a vast number of recipes, from the basic to the sublime to the exotic (and even the meatless), and I can't wait to try many of them. I've always been a meatloaf guy, and I have fond memories not just of the meatloaf my mother used to make, but also the meatloaf sandwiches that we'd have the next day.

    Get the book. Sell the book. Enjoy. Thank me later.

    I haven't been to the movies in the past week, but I have had some airplane time to catch up on a new TV series - "Timeless." I've always been a sucker for time travel stories, and that's what "Timeless" is, following the exploits of three time travelers as they simultaneously try to keep history intact and battle a vague conspiracy that seems to have existed for hundreds of years. The performances are strong, the production values excellent, and what I really like is that the stories are rooted in realities that I didn't know about. (For example, did you know that the Lone Ranger is based on the exploits of an actual Texas Ranger who happened to be a black man? I didn't ... but "Timeless" did a story about him, and I then did some followup research.)

    Fun, popcorn television. Worth watching if you haven't seen it.

    KC's View:

    Published on: February 17, 2017

    Next Monday, February 20, is a federal holiday here in the US – Presidents Day, which is sort of a combination of George Washington’s birthday, Abraham Lincoln’s birthday, and a time when a lot of mattresses and cars seem to be on sale.

    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.

    See you Tuesday…have a great weekend.

    KC's View: