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    Published on: April 13, 2018

    by Kevin Coupe

    The New York Times offers a business lesson in the guise of an extraordinary story about a 40-year-old fellow named Tim Don, a world record-holding Ironman athlete and Boston Marathon runner, who last October was hit by a car and suffered what is called a hangman’s fracture - it is what happens when a person gets hung.

    In order to get back to competitive athletics as soon as possible, Don opted for something called a halo - “You take titanium pins and screw them into your skull, two in front and two in back, and attach them to metal bars, which attach to a bust that you wear for three months and that you can’t take off.” It is agony, but it works.

    And it did work - Don will run the Boston Marathon on Monday, and expects to finish “in about 2 hours 50 minutes — about the same time he ran last May when he set the Ironman world record, 7:40:23, which included five hours of swimming and biking beforehand.”

    I cannot do the story justice here, and I recommend that you read the entire piece here.

    An then, there’s the business lesson.

    At one point, Don talks about his limited shelf life as a competitive athlete.

    “At age 40, Don has a finite window for his body to withstand peak performance,” the Times writes. “There is the looming need to support himself through sponsors, who tend to compensate wins, not effort. And aside from childhood jobs as a paperboy and a lifeguard, he has single-mindedly devoted his life to reaching the pinnacle of his sport.

    “I have no idea if this is going to work,” Don says. “I just know I need to give it a go because we’re all trying to be faster than each other, and while I’m here, they’re trying to beat my world record. I just don’t want to be second in the world. I want to be the best-best, no matter what, and I’ll do whatever it takes.”

    Here’s the thing. Every business model has a finite window for peak performance, a limited shelf life, and that’s the way every businessperson has to operate.

    To operate in any other way is to embrace complacency. Which isn’t any sort of a business model at all.

    Tim Don, to my mind, is an Eye-Opener.
    KC's View:

    Published on: April 13, 2018

    President Trump last night issued an executive order creating a task force charged with evaluating the finances of the US Postal Service (USPS). While Amazon was not specifically mentioned in the order, the decision comes in the wake of charges by Trump that Amazon is using the USPS as a delivery boy and is not paying enough for its services.

    The order specifically refers to the USPS’s “unsustainable financial path,” ordering the task force to “conduct a thorough evaluation of the operations and finances of the USPS.”

    Trump has consistently criticized Amazon, with the charges - sometime obliquely, sometimes directly - linked to its CEO’s personal ownership of the Washington Post, which has been aggressive in its coverage of the Trump administration.

    In its story about the executive order, the New York Times writes that “while the service has consistently reported net losses for a decade, much of its financial woes are the result of a prolonged decline in the volume of marketing mail and first-class mail. The service makes money on packages, and Amazon is the service’s biggest single shipper of packages.” In addition, the USPS has been mandated by the US Congress to prepay its pension obligations, which has created, in the minds of most experts, an unsustainable financial burden.

    The Times also writes that the order calls of the task force to examine “the ‘expansion and pricing’ of the package delivery market and the service’s role in competing with other, private delivery companies. The task force should look at the decline in mail volume and the implications for the service, Mr. Trump said. The order also calls for the task force to look at the service’s ‘universal service obligation,’ which requires the service to deliver to everyone in the United States, given changes in technology and e-commerce.”

    And, the Times writes, “Some parts of the order appear to hint at further privatization of the Postal Service, indicating that members of the task force should examine ‘the U.S.P.S. role in the U.S. economy and in rural areas, communities, and small towns’.”
    KC's View:
    I think this is an excellent idea. An honest, unbiased and objective look at the USPS’s financials probably is long overdue, and the country ought to welcome it. If it ends up that such an examination proves, in fact, that Amazon is abusing the system, then things should be changed. If the pension issues are such that they are the biggest problem, then maybe the Congress will do something about that.

    I will say this. While I believe in disruption, I’m not sure I’d want to go down in history as the president who privatized the post office and/or ended the universal service obligation. There are certain technological realities for which the USPS’s operations certainly need to be adjusted. But there’s something about being able to get mail that is important to the nation’s social fabric.

    Published on: April 13, 2018

    Ahold Delhaize-owned Peapod said this week that it is “doubling down on why it's the country's leading online grocer with the announcement of several new ways to save: site-wide price reductions on thousands of customers' most valued items, innovative new bundle offers and the launch of PodPass MidWeek delivery.

    More specifics:

    • The company said it will offer “thousands of lower prices on products that matter most to customers such as natural and organic items, meat, fresh produce and dairy. On these everyday price changes, customers will see the old price slashed with the new, lower price. On many of these items, customers will also see flags indicating additional savings via weekly promotions.”

    • “Peapod has introduced Bundles of Savings to offer discounts on groups of products that are commonly bought together … Customers that buy a certain number of products within the group and additional discounts are applied. The Taco Tuesday, Spaghetti Thursday, Morning Coffee On-the-Go and Salad Fixings bundles are already very popular with shoppers.”

    • PodPass MidWeek is described as “a discounted version of its popular free-delivery subscription PodPass. PodPass MidWeek is less than half the price of the regular subscription and offers a whole year of free deliveries on Tuesday, Wednesday or Thursday for just $55.”
    KC's View:
    It long has been my feeling that Peapod is both one of the best things that Ahold Delhaize has going for it, but also that it is an asset that needs to be exploited to a much greater degree. I have two Stop & Shop stores within a mile or so of my house, but I see very little in the way of aggressive marketing that attempts to woo me away from Amazon. I’m not sure what needs to change, but Peapod’s status as an early adopter that has stood the test of time ought to be an advantage. Instead, it just seems unappreciated.

    I’m glad to see that they’re trying to send a stronger message. But this has to be an ongoing process.

    Published on: April 13, 2018

    The Washington Post has a story about how some toy industry experts are suggesting that as Toys R Us goes out of business, leaving fewer physical stores from which to peddle their wares, toymakers ought to target grocery stores “and their customers prone to impulse purchases with fidgety kids in tow.”

    Tim Hall, CEO of the analytics startup Simporter and a former Hasbro executive, tells the Post,“There’s opportunity for both the toy companies and for the supermarkets to figure out new ways to do that. It’ll take a little bit of creativity.”

    And Steve Pasierb, president/CEO of the trade group The Toy Association, points out that despite its issues, Toys R Us has been “a very significant place” for the toy business. “That business isn’t going away. That business is going to move.”
    KC's View:
    I would suggest that the business already has moved. Which is why Toys R Us is going belly-up. These toy industry execs are looking for any old port in a storm, and supermarkets seem convenient.

    I also would suggest that most supermarkets should avoid such an initiative like the plague. They will be better off if they focus more aggressively and effectively on food, as opposed to other stuff that they can get elsewhere. They won’t be well served if they start carrying items that don’t differentiate them.

    As a consumer, I know this. When my kids were little, I avoided taking them to Toys R Us because a) I hated going there, and b) bringing kids rarely made the experience better. If my supermarket decided to start carrying toys, I’d either have to change supermarkets or avoid taking my kids there.

    Published on: April 13, 2018

    Heinz seems to have stepped in it this week with the Twitter revelation that it plans to begin marketing in the US - if it gets enough positive reaction via social media - a combination of ketchup and mayonnaise that for the moment, it is calling “mayochup.”

    The problem, the Washington Post reports this morning, is that “for many Americans, particularly those in the Latino community, the concept of combining mayonnaise and ketchup is nothing new … Sometimes adding a touch of garlic or adobo seasoning, Puerto Ricans smother it on just about anything fried: mofongo and tostones — both made with fried plantains — yuca, french fries, and more.”

    In addition, the story says, “The condiment is popular across Latin America, with different names and variations based on the country. In Costa Rica, Colombia, Venezuela and other places, it’s referred to as ‘salsa rosada,’ or ‘pink sauce.’ In Colombia and Venezuela, one might spoon a dollop of the condiment on an arepa, and in Costa Rica, one might eat it with a pejibaye, a peach-palm fruit.”

    The Post writes that under a variety of names and in a number of permutations, this sauce has been around since the 1920s, and “some on Twitter even accused Heinz of ‘appropriating,’ ‘gentrifying’ or even ‘colonizing’ the beloved mayo-ketchup combination.”
    KC's View:
    Obviously, nobody at Heinz ever saw Step-Brothers, where it memorably was called “fancy sauce.”

    Heinz’s mistake was trying to pass this off as something new, as opposed to bringing a treasured and popular ethnic product to the US.

    Published on: April 13, 2018

    The Wall Street Journal this morning reports that “some Rite Aid Corp. shareholders plan to oppose a merger with grocer Albertsons Cos. that they believe undervalues the struggling pharmacy chain.”

    According to the story, “Rite Aid investors who oppose the approximately $24 billion deal say they aren’t getting a big enough share of the company that would be formed by the combination. These investors say Rite Aid would be better off overhauling its pharmacies on its own … Critics of the deal also say executives at the two companies are too close, noting that Albertsons Chief Executive Bob Miller previously served on Rite Aid’s board.”

    The Journal writes that “one of Rite Aid’s 10 biggest shareholders, which declined to be named, said it planned to vote against the deal because it doesn’t give shareholders a fair premium.  Under the deal, Rite Aid investors may exchange 10 of their shares for a share in the combined company plus $1.83 in cash, or alternatively 10 shares for 1.079 new shares. They would own about 30% of the new business.”

    However, Rite Aid CEO John Standley says that the deal “makes sense for us strategically and financially. The merger will transform Rite Aid.” And Loren Trimble, CEO of AArete, a management consulting firm, tells the Journal that “both companies are getting squeezed. If they do nothing, it’s a death sentence for both of them.”

    The story notes that “closely held Albertsons hasn’t faced the same pushback. Its largest investor, Cerberus Capital Management LP helped broker the deal, which would return Albertsons to a public listing after 12 years of private ownership.”
    KC's View:

    Published on: April 13, 2018

    Seattle-based cooperative PCC Community Markets (PCC) announced this week its new “subscription-free ‘Scratch-made Meals at Home’ meal kits now available throughout Seattle via Instacart and Amazon Prime Now, and for in-store purchase at Greenlake Village PCC. Created by PCC’s in-house chefs, each kit features simple-to-follow, original recipes — like Sesame-Gochujang Steak with Kimchi Fried Rice & Shirred Egg, and Simple Cassoulet with Chicken and Sausage — with best-in-class ingredients like almost entirely organic produce and non-GMO, locally raised meats. All ingredients are hand-packed in PCC kitchens, in packaging that is almost entirely compostable or recyclable.”

    The program will roll out to the rest of the coop’s stores in coming months.
    KC's View:
    To me, it is the “subscription-free” part of this announcement that makes the difference. When I talk to consumers, it usually is the subscription part of many meal kit operations, which takes away control from the shopper, that irks them. That said, meal kits are an expanding and attractive business to be in, which is why supermarkets that do them on their own are smart not to require subscriptions. Which is also the approach that Blue Apron should take when it starts marketing its meal kits through stores.

    Published on: April 13, 2018

    Yesterday’s FaceTime with the Content Guy featured a story about the new Starbucks Reserve store format that I visited in Seattle … but while there was video of me talking outside the store, for reasons that are entirely my fault, it didn't include the pictures that I planned to run at the bottom of the piece.

    And so, in the sincere hope that late really is better than never, here they are … giving you a look at a beautifully designed store, the Princi bakery and coffee bar, and the excellent caprese sandwich that I enjoyed with something called a Nitro Cascara Cloud.


    KC's View:

    Published on: April 13, 2018

    • The Wall Street Journal this morning reports that “more big trucking companies are looking to cash in on home delivery of bulky items as consumers grow more comfortable shopping online for furniture and other goods too big for conventional parcel networks.”

    The reason, according to the story, is that “shoppers accustomed to getting online purchases in days, not weeks, and tracking those packages, now look for similar service when they buy big items like couches, washing machines and exercise equipment. Such objects often require installation or special handling, and may not fit in the highly automated systems that carriers like United Parcel Service Inc. and FedEx Corp. use to sort millions of packages each day. That has drawn in large trucking operators who want to use their scale to lure large retailers as customers for home-delivery services.”

    Expanding into this segment, the Journal writes, gives trucking services the ability to “move into one area in the retail world that is growing rapidly as digital sales carve away business from brick-and-mortar stores.”
    KC's View:

    Published on: April 13, 2018

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

    • Sears announced that it will close its last store in the city of Chicago - a place that, as USA Today writes, it has “called home or been closely connected to for 120 years.”

    While Sears has been closing a lot of stores, the story notes that “the shuttering of the last Sears in Chicago is especially poignant. The city has been tied to the retailer's identity since it first moved its headquarters there from Minnesota in 1887 and later put its stamp on the city's skyline with the Sears Tower, the tallest building in the world when it became Sears' corporate base in 1973.”

    Sears reportedly will continue to operate stores in the suburbs.

    The story also says that the Sears store being closed “is part of a batch of 265 Sears and Kmart locations that were purchased by the real estate investment trust Seritage Growth Properties in 2015, then leased back by the retailer. An investment firm owned by Eddie Lampert, Sears Holdings' CEO, has a significant ownership stake in Seritage.”

    Gee. That last bit is such a surprise.

    • The Pittsburgh Business Times reports that “Giant Eagle has committed to a deal to put Ace Hardware sections inside some of its locations. Four stores will be remodeled to accommodate home improvement supplies,” with the first one to be opened by summer.

    The goal, a company spokesperson says, is to "continue to innovate both within and outside of our supermarkets to succeed in our increasingly competitive food retail environment.”

    I’m not sure that selling hammers and screw drivers is the best way for a food store to differentiate itself. But maybe that’s just me.
    KC's View:

    Published on: April 13, 2018

    …will return next week.
    KC's View:

    Published on: April 13, 2018


    I was so happy this week that in his Los Angeles Times column, writer Michael Hiltzik took note of the 90th birthday of Tom Lehrer.

    Now, I’m guessing that many MNB readers never have heard of Lehrer. You have to be of a certain age to know anything about Lehrer, who during the early sixties was right up there with Mort Sahl and the Smothers Brothers, delivering sharp satire.

    Wait. You may not know about the Smothers Brothers or Mort Sahl, either.

    Let me explain. Tom Lehrer was a Harvard-trained mathematician - he began his Harvard career at age 15, and started graduate school at age 18. He was , in a word, brilliant.

    He also was a terrific songwriter, crafting satirical gems that took aim at a wide variety of subjects - government, politicians, the war in Vietnam (especially), NASA, the Catholic Church, the Marines, pollution, brotherhood, and even the periodic table of elements. He’d sit at the piano, in clubs and on television, and would make his points with lyrics that ranged from delicate to savage.

    The legend - though he later denied it - was that Lehrer stopped performing after Henry Kissinger got the Nobel Peace Prize; once that happened, he was reputed to have said, he knew that satire was dead.

    I was so glad to read Hiltzik’s column, because it reminded me of how much I enjoyed listening to Lehrer when I was growing up. I had a bunch of his records, though they’ve been lost to the ages (but I’ve replaced them via iTunes). And for your entertainment, above you can watch a video of Lehrer performing one of his best songs - a little ditty called "So Long, Mom (A Song for World War III),” which somehow seems entirely timely these days.

    Enjoy. And Happy Birthday, Tom Lehrer.

    A few other Friday notes…

    • HBO is featuring as two-part documentary, “The Zen Diaries of Garry Shandling,” written and directed by Judd Apatow, which in my view is totally worth the time it takes to watch it. Apatow, who worked with and was mentored by Shandling before his death from a heart attack in 2016, and he has created a meticulous, affectionate and detailed look at Shandling’s life and career, using the comedian’s copious notes and journals as a framing device.

    Shandling was a terrific comedian - from his stints on “The Tonight Show” to his groundbreaking “Larry Sanders Show,” he specialized in a kind of comedy of pain and fear, and his personal emotional journey was infused in every moment he spent onstage. Using extensive clips and interviews, the documentary looks at both the art and business of comedy, concluding that the old adage is correct - dying is easy, but comedy is hard. I recommend it strongly.

    Chappaquidick left me with mixed emotions. It was interesting in how it framed the 1969 car accident that forever defined the life and career of Ted Kennedy and resulted in the death of Mary Jo Kopechne, who was a campaign aide to Bobby Kennedy before he was assassinated in 1968. To this day, some feel it was nothing less than murder; there seems little question that Kennedy got off easy, coddled by a legal system in thrall to his family name.

    Kennedy is seen as lost in continued grief over the deaths of his brothers, and he makes nothing but bad decisions before, during and after the accident. It indicts him for his actions, and yet it is hard to forget that only two people know what really happened that night, and they’re both dead - which means that much of the film is speculation. The cast is strong - especially Jason Clarke as Kennedy and Ed Helms as his cousin, Joe Gargan - but I felt vaguely uncomfortable and voyeuristic while watching the movie.

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


    KC's View: