business news in context, analysis with attitude

We got several emails about Wednesday's story about Wendy's offering low fat milk and fruit cup options with kids' meals.

MNB user Sandra J. Skrovan of Retail Forward wrote:

Being in the Columbus market with two young kids who frequent Wendy’s probably too often, we noticed the introduction of the milk and fruit cups last week. While I applaud Wendy’s for going this route, my kids say the fries are the best part of the meal. And why would they go to Wendy’s for a fruit cup? But, I probably could have talked them into splitting an order of fries and the fruit cup if it were something a bit more kid-friendly – like grapes, strawberries, or banana. Does Wendy’s really thinks kids go for cantaloupe and honeydew – at least those old enough to talk back?

Agreed. Though we do think Wendy's gets points for a food try,

By the way, we've made a decision in the Coupe household that hasn’t gone over well with the kids - no more supersizing, no more "biggie fries." If they eat fast food, they're going to have to deal with medium sized portions.

MNB user Matt Nitzberg chimed in:

We are fortunate parents whose son prefers melon to fries, so we applaud the Wendy's test and hope for its expansion.

From a marketing perspective, while some families will choose the fruit option, universal acceptance should not be anybody's expectation. After all, as the obesity reports are telling us, "eating healthy" is still a consumer segment not a mainstream lifestyle.

So, if only 10-20% of Wendy's kids' meals include melon instead of fries, that's 10-20% of Wendy's (paying) population who are happier with their options at Wendy's. That should be a good thing for the families and for Wendy's.

Hey, if the level of cancer/diabetes/heart problems dropped by just 10 percent in this country, that would be an enormous achievement.

We continue to get a lot of mail discussing the importation of inexpensive medicines from Canada, a practice reviled by the US Food and Drug Administration (FDA) and American pharmaceutical companies, while at the same time gaining more and more acceptance around the country.

Canadian MNB user Mark Rodrigues wrote:

I find it very interesting that the US Food and Drug Administration says that drug imports from Canada are both illegal and unsafe.

I wonder who they are protecting!

Do you really believe that Health Canada testing and quality control processes are any less than those of the FDA's?

It is very interesting to hear that the same "special interest groups" that
criticize Canada's high taxes and high spending of social services and health care (including quality control over prescription drugs) say that Canada's drugs are unsafe. Are they deemed to be "unsafe" because they are cheaper?
Maybe the question is: Why are the prescription drugs so much more expensive
in the U.S.?

The answer is of course: Because they can get away with charging more.

A response of a kind is offered by MNB user Glenn Cantor:

The danger with attempting to mix and match the best benefits from two separate health care delivery systems is that, ultimately, we will halt the impetus to develop new, innovative products that save lives and make millions of lives better. One sure way to damage long-term economic growth and opportunity for all is to over-regulate innovation and creativity in our American industries. Too much of American capital is already sent overseas. Unnecessarily regulating one of America's strongest, most innovative, most productive industries- pharmaceuticals- will surely force more capital, investment, and high-paying jobs overseas as well.

The health-care system in the United States offers open access to the best medical care to all citizens. There is a cost to being able to secure the best care possible. The Canadian health-care system is socialized and closed. As a result, Canadian citizens are not able to easily secure the care they need, particularly if the health care need is not life-saving but rather addresses "quality of life." Canadian citizens trade the ability to have open access for government controlled pricing of health care delivery, including pharmaceuticals, for lower costs. As a result, Canadians often come to the United States for better medical treatment.

American citizens can basically receive care from any doctor they desire,
whenever they need it. We have the capability to discuss treatment options with our doctors, and agree upon the most effective treatments available. The trade-off is higher costs. The best always costs more, and in America, our system has been able to provide our citizens with the best. True, we need to fix the system to provide easier, more cost-effective access to all citizens. That being said, to paint the pharmaceutical industry as greedy and single-mindedly seeking profits over humanity, is to denigrate one of the best things about America.

We should note, because it is pertinent to this discussion, that Glenn Cantor is with Pfizer- Consumer Healthcare.

And MNB user Ray Daiberl added:

I think the momentum is building and will soon reap results, medicine costs in this country are absolutely outrageous and out of control.

Let's just hope that the solution isn’t worse than the problem.

We also got a response to MNB user Brad Morris's letter in yesterday's edition about economic hypocrisy, which was critical of the tax cuts that he believed were not doing what was necessary to bolster the economy. MNB user Adam Smith (and is that a great name for someone writing in about the economy?) wrote:

How true it is that people see the same process from such different perspectives. Mr. Morris sees the source of monetary resources as "the government's" to allocate to as they see fit, whereas I always thought that resources that this capitalist nation produced came from land, labor, capital, and enterprise. In other words, the government gets money from us, not we from them. It is in socialist economies where the government regulates the use of land, labor, capital, and enterprise and the deployment of resources.

When we elect representatives to our legislature, I always thought we elected them to represent our interests. As a result, we DO spend tax dollars on roads, education, welfare, the military, etc. (sorry, not on you personally). It's great to pay the teacher a bit of our earnings to teach our neighbor's child as well as our own, especially if we earn more than our neighbor; but, I personally don't think it's so great to pay the landlord part of my neighbor's rent when my neighbor thinks he needs house the same as mine even though he earns less. Better he earn more and pay for another neighbor child's education, too. But also better I choose who's rent I pay rather than the "gubment".

At our request, our representatives have decided that we should have some of our own money back (in proportion to what we contributed) with the expectation that some of it will contribute to the purchase of land, labor or capital to create more wealth. Consumer spending does stimulate more capital and labor. The fact that much of the rest of the world has caught-on to this phenomenon and has tapped into it is what I thought Americans have been championing for all of the last century and more.

If I'm wrong on this, please let me know; I'd be grateful to get some of my rich neighbor's wealth or get her to pay for my health insurance so I wouldn't have to work full time anymore.

Regarding self-checkout, MNB user Paul Schlossberg wrote:

Don't intellectualize the technology issue so much. In many cases consumers are very frustrated by poor and/or indifferent service - and those are in businesses where "human" service (allegedly) exists. That leads people to gladly accept a machine-based solution. Once that meant the Automat. It was good food, good coffee, and a rather pleasant experience. As one who (is old enough to have) experienced it, I wish it was still around - and I'm confident I'm not the only one who does.

Don't forget that the vending industry is an important "unstaffed" (food, and beverage) service business. You'll find something like 2,000,000 locations and 5,000,000+ machines (depending which data sources you use). Retail sales reached $40 billion. From the standpoint of locations - this is the most pervasive retail business.

Sure there are things vending operators can do to make the experience better (the same basic challenge facing other retail operations). But technology, service, and equipment have been improved, and continue to be enhanced. This is making the shopping experience consistently better for the customers vending serves.

There are situations where retail stores shift to technology - instead of staffed services - for their customers. Take a lesson from the leading thinkers in the vending channel - do it right. If you do, your customers will thank you - with repeat business.

While we hate to admit it, we also are old enough to have eaten in the old Horn & Hardart automat on 42nd Street in New York. And we have a feeling that because it is a memory of a distant, simpler time, the concept actually has been romanticized beyond its actual quality or value.

But even if it has not, we should emphasize that we are neither anti-vending nor anti-technology. We just think that retailers who devalue the human connection are doing their customers a disservice, and losing one way of differentiating themselves.

Our story yesterday about the Working Mother magazine list of the top 100 companies for working mothers noted that there's not a food retailer among them.

Which struck us as pretty remarkable, considering that working mothers happen to be one of the main demographic groups being served by food retailers. Wouldn’t you think that it would make sense for food retailers to develop cultures that are friendly to these folks, especially because they would bring their knowledge and sensitivity about this demographic to work each day? That's who we'd want working for us if we owned a food store - people who not only profess to understand the customer, but who also happen to be the customer.

This prompted some pretty interesting responses. One MNB user wrote:

I've worked in a particular segment of the food industry, perhaps one that is widely seen as slightly less progressive than even the norm in food, for over 13 years. I am also a single mother and sole purchaser of all food inputs for my household. Although our industry as a whole knows our customer is female, although our research tells us this over and over and over, we have virtually no females in positions to make decisions affecting the marketing and sales of our products.

In fact, the number of females working in this industry in ANY key position remains extremely low, and the influence those of us who continue to stick out the less-than-ideal atmosphere have is not any better. I've become increasingly disillusioned over time. While I still believe, as I did 13 years ago when I was fresh from college, that working for the production of a safe, healthy, nutritious food supply is an honorable and good thing, sometimes I wonder how many years I can take the sexism, the patronizing attitude toward working moms who must tenuously balance work and home, not to mention the blatant disregard for women's opinions and knowledge as purchasers, influencers and major decision makers in an industry that purports to cater to us.

MNB user Catherine Lanna chimed in:

I'm glad you pointed out the glaring lack of food retailers from the list. I happen to be in both groups; a full time working mom for a food retailer. It just seems like common sense that making this list would do wonders for boosting image and sales while contributing to the differentiation that we should all be striving for.

And MNB user Kathleen Whelen asked a question that also occurred to us:

It's hard to believe that Wegman's doesn't appear on this list - it has made the top 10 in other surveys!

We were surprised by that, too.

Regarding our story about airline meals and the marketing opportunity they represent for food retailers, MNB user Kathleen Leahy Born wrote:

Quick carry-on meals would seem such an obvious market niche that I am incredulous no one has developed a successful concept in the 3-4 years that the no-meals-on-flights trend has developed. If you want a meal on a 3 hour flight, choices usually vary from bad to worse at most US airports. Lines are long at all decent places and rarely do they have a good selection of healthy ready to go food. I have never encountered a vendor with an express check out line. My dream is of a spot inside security where you can grab a prepackaged meal in a bag with a handle (with choices that include salads and vegetarian options including sushi) and then swipe it through a check out and swipe your credit card to pay. My latest tactic is to find a Whole Foods market in the city where I am staying and either stop on the way to the airport or even the night before to pick up a meal. It seems to me that there is money to made on a good airport food-to-fly concept. By the way, Delta's new carrier Song actually has a decent but very limited menu of healthy options. I fly Song whenever I can.

We also got an email from an MNB user about our story regarding the treatment of employees in general:

I am constantly amazed at how little managers understand the employees that work for them. It would appear that most management believes a paycheck is all the incentive necessary to drive results. How foolish - and expensive. People will follow their leadership off of cliffs if they believe management genuinely cares about them, their families, and what is happening in their lives. How much does it cost to get to know your employees? -- To walk around once in a while and listen to what they have to say? If a managers interest in the team is sincere and the team knows this, they will give their best to supporting that manager -- and they'll do it without complaining about what they are being paid.

In response to a story yesterday about McDonald's Japan cutting HQ staff by 15 percent, one MNB user wrote:

Kudos to McDonalds Japan for making the choice to "cut the fat" from headquarters versus store employees. They have realized what most companies with declining profits do not; that customers don't see, meet, or care about the staff and what is going on at corporate level. Customers want to be served quickly by a familiar and smiling face, a face that isn't apologizing about the wait and complaining about how overworked they are due to staff cutbacks.

Unfortunately, in these times of declining profits and increased competition, many corporate cultures dictate that the fast and easy fix to decreased profitability is to cut overhead by means of cutting payroll at the customer service level. Yes, it does show an immediate spike in individual store profitability, but the damage to customer service and customer loyalty over time is irreparable.

How many bad experiences (waiting in long lines, poor employee attitudes, product mistakes) do consumers tolerate before deciding to take their business elsewhere? Not many.

All companies that deal with direct consumer contact, including grocery, discount, home improvement, and food service should take this into consideration on their road to recovering profitability.

Our friend Glen Terbeek likes to point out that retail companies pay a lot more attention to hire their CEOs than their checkout personnel - and yet it is the person at checkout who probably has a far greater impact on the customer service experience, and, by extension, the future of the company.

Finally, in response to yesterday's OffBeat piece about the best waitress we've ever encountered - and the immeasurable value that she brought to the dining experience - one MNB user wrote:

If you ever get a chance to go to Bamboleo, Main Street in Glastonbury (Ct.) it will be a great
I can make one general observation - independent restaurants are ALWAYS more friendly, attentive and enjoyable as compared to large chains where it seems they are short handed with servers and general help and rarely seem to care about the patrons.

Generally speaking, we think that is absolutely true.

We also think it often is true of independent supermarkets - but not always, and not nearly often enough.

And since it is one of the great advantages that an independent retailer can bring to the tough competitive climate, we wonder why any one would accept anything less as a standard.
KC's View: