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    Published on: May 5, 2017

    by Kevin Coupe

    It almost doesn't matter that the airlines are a moving target. There seems to be little question that if you are in the airline business, you have a target on your back ... and there seems to be a new story every day about people getting tossed off airplanes, flight crews coming into conflict with passengers, and other examples of how airline companies seem to be completely at sea when it comes to customer service, public opinion, and even common sense.

    Everybody is getting into the act.

    I was reading a piece on the BoardingArea website about a French woman who was supposed to fly from Newark to Paris on United, and instead ended up in San Francisco.

    It happened because of an almost perfect storm of events. The woman didn't speak English. The gate got changed. Even though her ticket didn't register when scanned, they let her on anyway. When she found someone sitting in what she thought was her seat, the flight attendant told her just to grab any available seat. (I'm amazed there was an empty seat, since there seem to be few of these around anymore.) And then, when she got to San Francisco - no doubt a little surprised when she saw the TransAmerica tower instead of the Eiffel Tower - she had to pay for her own airport hotel.

    Now, United has responded to the problem by reimbursing her for the San Francisco hotel, refunding her ticket, and giving her a voucher for a free flight.

    I'm not sure that's enough, especially because it seems to point to so many Eye-Opening operational inefficiencies that could, under other circumstances, create enormous problems. There just seems to be some sort of core problem that is corrupting all of United's systems and processes. It is troubling.

    But on the other hand, if United would like to accidentally fly me to Paris next time I get on a domestic flight, I promise not to sue.

    KC's View:

    Published on: May 5, 2017

    The Associated Press reports that the US House of Representatives Financial Services Committee yesterday "took a major step toward their long-promised goal of unwinding the stricter financial rules created after the 2008 crisis, pushing forward sweeping legislation that would undo much of President Barack Obama's landmark banking law" by voting out of committee a bill that would gut much of Dodd-Frank. The vote was 34-26, along party lines, with Republican members backing the legislation.

    According to the story, "The Republican bill also goes after an agency that enforces consumer protection laws and scrutinizes the practices of virtually any business selling financial products and services. That ranges from credit card companies to mortgage servicers to auto lenders. The bill removes some of the Consumer Financial Protection Bureau's powers and replaces its guaranteed funding from the Federal Reserve with whatever Congress determines would be the appropriate amount, a move Democrats said would gut the agency."

    And, it includes a provision that would repeal debit swipe fee reform, something for which retailers and their trade associations have fought long and hard.

    The story notes that while the legislation is likely to pass the full House, it will be far more problematic in the Senate, where 60 votes will be required to pass it. President Donald Trump has promised that his administration will "do a big number" on Dodd-Frank if given the opportunity, but it is hardly assured that legislation will come to his desk to be signed into law.
    KC's View:
    Expect retailers and their lobbyists to pull out all the stops to make sure that this bill - or at least the swipe fee component of the bill - never becomes law.

    I'm totally with them on this one. The government has to make a choice between Wall Street and Main Street, and it would seem that at least this committee has cast its lot with Wall Street. Bad decision, I think. Swipe fee reforms are said to have saved consumers tens of billions of dollars, but the legislators seem more worried about the dollars that flow into their campaign coffers from banking interests.

    Best government money can buy.

    Published on: May 5, 2017

    The Wall Street Journal this morning reports that Walmart has made public its patent application for sensor technologies that would "track how much detergent a family has used or when milk is about to expire ... The system proposed by the retailer could use sensors in homes and attached to products like toothpaste, milk or razors to trigger automatic delivery of another box or suggest related products to buy, all while collecting consumer behavior data to tailor marketing, says the application on the U.S. Patent and Trademark Office website."

    Here's how the Journal describes the technology:

    "Wal-Mart’s patent filing describes a system with a variety of sensor technologies inside products and homes including radio frequencies, Bluetooth, or bar-code scanners to track how often a product is used, where it moves in a home or what best to market to a shopper next.

    "For example, clothes could be 'tagged,' then tracked as they enter a person’s home for the first time, says the patent application. Then the system could track the clothes going into a washing machine, helping to predict the number of times the clothes are worn and washed. 'When a certain threshold was set by the manufacturer as to the durability of the articles, a new set of clothes may be automatically ordered,' says the filing. A carton of milk near its 'use by' date could trigger a reminder for the shopper to drink it or order a new one for delivery."
    KC's View:
    In fact, the sensors appear to be a response to the Dash button technology and Subscribe and Save replenishment service that have been implemented with great success by Amazon, as Walmart seeks ways to create its own ecosystem of people and products that will prevent its customers from shopping elsewhere.

    Which makes sense for Walmart. Because it - just like every other retailer - needs a response to these Amazon innovations.

    Published on: May 5, 2017

    Two different stories this morning about how craft beer manufacturers have decided to sell their brands - some would call it breaking faith with their roots - to major beer brands, causing some consternation among the craft brewing faithful.

    The Associated Press reports that North Carolina's Wicked Weed beer has been sold to Anheuser Busch InBev, which will make the brand a wholly owned subsidiary of the brewing giant and one of a dozen brands in its The High End unit. Terms of the deal were not disclosed.

    At the same time, the Los Angeles Times reports that "Dutch brewing giant Heineken said Thursday it bought full ownership of California craft beer maker Lagunitas Brewing Co. in a move to further expand Lagunitas’ overseas distribution. Heineken, which acquired a 50% stake in Lagunitas two years ago, didn’t disclose how much it paid for the remaining half."

    In the case of Wicked Weed, the story notes that within hours of announcing the sale, the company "lost its voting rights in a craft beer guild, was booted from collaborations with two independent breweries and exiled from at least a handful of stores and restaurants."

    Walt Dickinson, who co-founded Wicked Weed, conceded that the company has work to do to address the concerns of its "very, very passionate consumers," saying, "It’s going to be our job going forward to win them back and show them that we’re the exact same people ... “I could name 10 other partners we could have chosen besides The High End that the beer industry would have had a lot better feelings about, but at the end of the day I believe this was the right choice for our brand and our company."

    As for Lagunitas, founder Tommy Magee released a statement saying, in part, “Only by fully committing to this relationship can we both respond to the historic opportunity that awaits us in all 24 time zones." And the companies emphasized that "Lagunitas will continue operating independently within Heineken to help 'maintain the Lagunitas culture and free spirit,' the companies said, adding that Magee would remain executive chairman of Lagunitas and be supported by his current management team."
    KC's View:
    Look, everybody has to make a buck, and everybody has a right to pursue their own visions for growth, even if they don't necessarily synch up with that of their customers. Of course, when a brand's vision diverges from that of the core customer, there's a risk ... but in this case, Anheuser Busch and Heineken are betting that they can bring in a lot more new customers via growth than they'll lose by selling out. They're almost certainly right.

    For the record, if someone wants to acquire MNB, I'm open to the discussion. I don't want to be a hypocrite here.

    I generally try not to take a knee-jerk approach to choosing beers, and won't automatically reject a brand just because it is owned by a big company. My preference is for the small craft brands that have not been absorbed by the behemoths, but I can be flexible as long as the quality stays high.

    Published on: May 5, 2017

    The Washington Post has a story about how "technologically, the living room is more advanced than the kitchen, he said, pointing out that the main function of the living room, entertainment, has evolved dramatically as smart TVs and video streaming have satisfied an appetite for being connected.
    In the kitchen, the digital transformation has just begun."

    Among the tech items coming along that are likely to affect both shoppers and stores by affecting how people acquire products:

    • "Of all the mundane things to do in the kitchen, keeping a grocery shopping list is probably one of them. But in the world of smart technology, that’s the inspiration for GeniCan, a device that almost makes throwing away trash fun.

    "Attach the scanner to your garbage can or recycling bin. It keeps a log on items as you toss them out so you can update your grocery list. When the app is synced with an Amazon account, GeniCan orders items such as paper towels and snacks once they have been thrown away or recycled."

    • "The PantryChic Store & Dispense System simplifies recipe preparation by automatically dispensing the precise amount of each ingredient from canisters with the push of a button.

    "The system comes with three dishwasher-safe, BPA-free canisters in small, medium and large. They are rectangular and stackable to maximize storage space. The recipe app instructs users when to place each canister on the system so it can automatically dispense the right amount."

    • The SproutsIO, described as an "app-controlled microgarden (that) makes it easy for you to grow a variety of produce indoors, from fruiting plants to leafy greens and herbs to root vegetables, regardless of where you live or how much gardening experience you have. The produce can be cultivated to your taste preferences by making adjustments to the plants’ growing conditions. The same seed and plant harvested at the same age can have different flavors, colors and textures simply because of how they are grown."

    • Hestan Cue, described as a "connected cookware system (that) controls time and temperature so you can always count on a cooking experience that’s just right. Using Bluetooth technology and embedded sensors, the smart saute pan, induction burner and recipe app work in unison to assist you in every phase of the cooking process, all with the satisfaction of knowing the products will never burn your food."
    KC's View:
    Some of these systems, like the garbage can scanner, have been speculated about and tested in one form or another for years. But I think we're reaching the tipping point. I know this because my Echo/Alexa system told me so.

    Published on: May 5, 2017

    Eater has a story about how Starbucks, stung by a loss of business created by the crush of customers placing orders via its mobile app that dissuades walk-in customers from waiting on resulting long lines, is trying to come up with solutions.

    One of them - a new app function that provide notifications to customers when "their orders are in fact ready, instead of an estimate that may bring them into the line too early, making them wait." This would be combined with a new workflow system that will allow store staffers to better manage busy times and cut down on wait times.

    This, the story says, "comes about a month after Starbucks unveiled a new cashier-less design concept, centered completely around mobile users — another attempt to improve the smartphone ordering experience. The store, which debuted in Seattle, has a pick-up station for customers and no ordering line or seating. Johnson said the company is working on incorporating similar mobile ordering into designs of its future stores."
    KC's View:
    This is what I think most of us would agree is a first-world problem - too many customers.

    Let's be clear. Starbucks continues to be at the forefront of the mobile-ordering-and-payment trend, is being followed by pretty much everyone in the category, and is seeing enormous continuing growth in users.

    Nobody should shed any tears for Starbucks.

    Published on: May 5, 2017

    My friend Phil Lempert brings out the big guns this week in his Supermarket Guru blog posting, blasting the "two overweight white men" - President Donald Trump and new Secretary of Agriculture Sonny Perdue - who are, in his opinion, deconstructing the advances made over the past few years in improving the nation's school lunch programs.

    An excerpt:

    "I’m angry. First the Administration delayed legislation that would list basic calorie counts on prepared foods and beverages in restaurants, supermarkets, vending machines, movie theaters, sports stadiums and others saying that the FDA might not have all the relevant facts and HHS Secretary Price adds that he wants the rules to be more flexible and less burdensome.

    "Yesterday, Agriculture Secretary Sonny Perdue made the first move to undo a lot of the great work that Michelle Obama pushed hard for in our school lunch program (disclaimer: I served on the First Lady’s Chefs Move to School Committee to bring chefs into schools to educate students about foods and eating healthier). I witnessed first hand the First Lady at a school rally at the Nancy Moseley Elementary School inDallas, Texas where she implored hundreds of kids to study, exercise and eat healthier – and the kids loved the message. And in talking to the manager of the school’s lunch program the students loved and ate the healthier foods. In fact, according to the Department of Agriculture, 97% of schools across the country are implementing the school nutrition standards of the Healthy, Hunger-Free Kids Act.

    "Perdue signed a proclamation to 'restore local control of the guidelines on whole grains, sodium and milk' and went on to say that kids aren’t eating the food and it’s ending up in the trash. Cornell’s Food & Brand Lab research has proven how using behavioral economics, marketing and displays can trigger the selection of healthier foods and have students wanting to eat healthier foods."

    You can read the entire blog posting here.
    KC's View:
    I agree with Phil on pretty much everything he says.

    It has seemed to me that the deconstruction of the school lunch programs had a lot more to do with political philosophy than good public policy or concern for kids. It has been pointed out by a lot of people that poor nutrition habits and obesity combine to create a serious national security problem for the US, and it always struck me as good public policy to take a systematic and national approach to getting kids to eat better food and understand the basics of good nutrition ... especially, but not limited to, communities where, perhaps, families face economic challenges and don't always make enlightened decisions.

    If kids are at first resistant to eating these better-for-you foods, then it is up to leaders and educators to find ways to persuade them ... not dump the program. (And Phil cites a number of studies suggesting that the "they dump the good food and would rather eat the bad stuff" argument may be specious anyway.) If a kid doesn't like math or science, we don't stop teaching it. If a kid doesn't like reading and writing, we don't take those subjects off the curriculum. (Well, maybe some school systems do. But if and when they do, they're being irresponsible.)

    There's only one way in which I disagree with Phil. At the end of his blog posting he writes of his "Two Overweight White Men" headline, "My headline is not meant to offend anyone who is overweight ... just wanted to point out that Trump and Perdue are not themselves healthy role models based on their food behaviors."

    Me, I wouldn't worry about offending anyone.

    Published on: May 5, 2017

    Bloomberg reports that Staples "is overhauling its marketing as part of a high-stakes pivot away from what it was built on -- selling low-priced office supplies at big stores. The rebranding campaign kicks off next week with nationwide television commercials in which stores are nonexistent and products are only shown in passing. There’s no mention of discounts either.
    Instead, the spots star and extol office and building managers as they fix copy machines, clean up spills and restock the breakroom -- all with the help of Staples’ delivery business."

    The new slogan is “It’s Pro Time” replacing “Make More Happen."

    Meanwhile, Reuters reports that "Cerberus Capital Management LP and Sycamore Partners are the two private equity firms actively exploring an acquisition of Staples," which "has held talks with several private equity firms over the last few weeks about a potential deal, the sources said. Cerberus and Sycamore have emerged as the frontrunners, as other prospective buyers have become discouraged by the challenges Staples faces in shifting its business model from serving consumers to catering to companies."

    Cerberus already owns a majority stake in Staples' European business.
    KC's View:
    Obviously, the people who run private equity groups know a lot more about money and investment than I do, but I cannot imagine why anyone would think that investing in Staples is a good idea. When I look at it, I see a company with a lot of downside and not very much competitive upside.

    Published on: May 5, 2017

    Reuters reports that Amazon has "launched deliveries of fresh groceries in Berlin and neighboring Potsdam on Thursday for members of its Prime subscription service, a move that could accelerate online sales of food that have been sluggish in Germany so far ... Amazon's move into fresh groceries in its second biggest market outside the United States has been long anticipated and Deutsche Post DHL announced last week it had won a contract to deliver groceries for Amazon."
    KC's View:

    Published on: May 5, 2017

    • The Toronto Star reports that Empire Co. "has launched a $500-million cost-cutting plan to turn around its Sobeys grocery business, which has been struggling to recover from missteps taken with the acquisition of Safeway Canada four years ago ... The company says it’s aiming to hit its target by the end of its 2020 fiscal year, adding that the savings will come from a combination of measures including reductions to office staff."

    According to the story, "The supermarket operator also announced changes in its upper ranks that include the retirement of executive vice-president François Vimard, who served as interim CEO before Medline arrived, and Sobeys Quebec president Yves Laverdiere ... The president of the Atlantic-Ontario business unit for Sobeys, Beth Newlands Campbell, will also leave next month after 18 months with the company."

    CNBC reports that "Starbucks said Thursday that it has more than tripled the number of products eligible for its loyalty program to include a wide array of items available in grocery stores. The stars earned for these purchases can be redeemed for coffee, food and merchandise at Starbucks cafes. Starbucks' loyalty program membership has grown 11 percent since last year, bringing the total number of members to 13.3 million, the company said in its earnings report last week."

    • The NWI Times reports that "Strack & Van Til parent company Central Grocers Inc. of Joliet is facing involuntary bankruptcy. Creditors are looking to shut down and liquidate the $2 billion wholesale grocery cooperative, which supplies 400 independent grocery stores throughout Chicagoland, including Highland-based Strack & Van Til."

    According to the story, "The Coca-Cola Company, General Mills Inc., Mars Financial Services and Post Consumer Brands filed an involuntary bankruptcy case in the U.S. Bankruptcy Court Northern District of Illinois in an attempt to recoup their debt, according to a court filing. They are seeking a Chapter 7 bankruptcy in which there's no repayment plan and a trustee would instead sell off assets to repay creditors some of what they're owed."
    KC's View:

    Published on: May 5, 2017

    Crain's Chicago Business reports that "three weeks after Crate & Barrel dumped CEO Doug Diemoz, the retailer has officially appointed Neela Montgomery its new chief." Montgomery has been the chair at Otto Group, the German conglomerate that owns Crate & Barrel, and had taken over Diemoz's responsibilities after he was fired.

    The story notes that "Before joining Otto, Montgomery spent 12 years at Tesco, the world's third-largest retailer, where she held a variety of leadership roles, including director of the U.K. division's e-commerce and U.K. general merchandise director."
    KC's View:
    When she was just chairing the company, Montgomery reportedly had expressed frustration with Crate & Barrel's inability "to adapt to a rapidly changing retail environment," changing too fast for some customers and too little for others. Now she'll have a chance to do more than express frustration - her job will be to fix the company.

    Published on: May 5, 2017

    ...will return.
    KC's View:

    Published on: May 5, 2017

    One of the great and regular pleasures of spring long has been the publishing of a new Spenser novel by Robert B. Parker. Though we lost Parker in 2010, since then the estimable novelist Ace Atkins has succeeded him, producing new Spenser novels every year and keeping the fan base satisfied.

    More than satisfied, actually. One of the things that Atkins has been able to do is expand the series' canvas a bit, finding new ways to approach the Spenser oeuvre while keeping intact the perceptive, sardonic and ultimately soft-hearted voice of the protagonist, who continues to work the mean streets and Back Bay mansions of Boston as a private detective, aided in great measure by his longtime love, Susan Silverman and, of course, Hawk. (I'm never quite sure how to describe Hawk except to say that he may be Parker's singular creation, always more than a sidekick and offering the author an opportunity to comment on the scene with a bit of distance and even more cynicism.)

    The new Spenser novel, "Little White Lies," is out this week, and it does not disappoint. The plot is a little thicker than usual, concerning a woman who has been cheated out of a considerable sum of money by a con man, and Spenser's efforts to help her recover the funds - which brings him into conflict with the Boston Police Department, the federal Bureau of Alcohol, Tobacco and Firearms (ATF), black market gun runners, paramilitary contractors, and assorted other bad guys. Needless to say, Spenser does it all with aplomb, and Hawk is on the scene more than usual because he's spent time with these guys and can provide unique insights into their behavior and rationale; the case also allows Spenser/Atkins to comment on some of the blowhards who often appear and pontificate on cable TV, offering expertise without background or resume, and thoroughly pulling the wool over the eyes of viewers.

    All of which I loved, and expected. But what I really loved about "Little White Lies," I must confess, are the descriptions of the quiet moments, like when Spenser makes and eats breakfast in his new apartment, alone except for the company of his faithful dog, Pearl. It is simply evocative, and now, in the 46th novel featuring Spenser, those moments seem deserved.

    My favorite chapter, I think, is when Spenser and Hawk are on a stakeout. They eat grinders and drink coffee and talk about "baseball, boxing, old movies and jazz." Spenser and Hawk have been doing this a long time, and there is an easy familiarity, and then Hawk observes that "you never really know someone." Spenser disagrees, and then Hawk asks him, "What's my real name?" (This is territory into which the Spenser books never have traveled before.) Spenser, it ends up, does not know ... which adds a certain unexpected dramatic tension to a relationship that Spenser fans have watched unfold over many years and many novels.

    I may be wrong about this, but it seems to me that Ace Atkins is getting a little looser in his approach to Spenser - he knows there are touchstones that must be touched, characters who must be referenced, and a history that must be respected. (I was thrilled that Rachel Wallace reappears in "Little White Lies;" it's been too long.) But he's riffing a bit now, and Spenser and the series are the better for it. I heartily recommend "Little White Lies."

    If they ever decide to make a new TV series out of the Spenser novels, they would do well to turn the task over to the folks who have adapted Michael Connelly's Harry Bosch novels for Amazon, where the third season has just become available for screening. It is terrific.

    Harry Bosch, for the uninitiated, is a Los Angeles police detective with a strong sense of justice and a passion for the underdog. "Everyone counts, or nobody counts," is one of his catchphrases, which leads him into conflict with his superiors and various politicians as he pursues bad guys with single-minded alacrity.

    One of the great pleasures of the Bosch novels, as well as the TV adaption and the portrayal by the great Titus Welliver, is that Bosch is no saint - he makes mistakes, and there are moments when the reader/viewer wants to restrain him, but, of course, cannot.

    Season three has a number of those moments, as Bosch pursues a series of cases, still haunted by the fact that while he believes he has solved the long-ago murder of his mother, the system failed her. This brings an edge to every conversation, every encounter, and it is almost like watching the long fuse of a bomb that inevitably must go off. The great news is that because "Bosch" has been renewed for at least one more season, the writers and producers have the ability to plant clues and hints about stories yet to come, knowing that they have time to make them pay off. They also have the room to give supporting characters the ability to breathe and evolve, which only helps the drama and drives it forward.

    Great stuff, "Bosch." I loved every minute of it.

    So I'm at dinner in Seattle last week at Salty's, the well-known seafood restaurant, and we wanted a rose to drink with dinner; I'm not a big rose guy, but it just seemed like the appropriate choice for the halibut we were eating. Being trusting people, we put the choice into the waiter's hands ... we just gave him our price point and let him go to work.

    The rose we ended up drinking was excellent, made from pinot noir and perfectly matched to our seafood - it was fruity enough without being sweet, and full of flavor. I have to admit that I was a little bit crestfallen to discover that the 2016 Rosé of Pinot Noir we were drinking was a collaboration between Carmel Rose Vineyards and actress/producer Drew Barrymore, and was, in fact, called Barrymore. Normally I'd be allergic to such a collaboration, but they snuck this one in under the radar, and it was very good, and I may have to buy more. You should do the same.

    That's it for this week.

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


    KC's View: