business news in context, analysis with attitude

We missed a couple of days worth of ‘Your Views” this week because I’ve been dealing with root canal issues that had me taking Xanax and Vicodin (I feel a little like Dr. House from the TV series); I found myself falling asleep early and waking up late, and that was taking away from the ‘Your Views” time. (I have only myself to blame for this…I am phobic about dentists and hadn’t been to one for ten years, but time and decay finally caught up with me.)

But I’ll try to make up for it today…

Responding to yesterday’s rant about the cancellation of the FMI Future Connect conference – I said they were right to cancel it but were waiting too long to announce new plans – one MNB user wrote:

“The…pundit….doth protest too much, methinks.” (copyright and apologies to Bill Shakespeare).

What’s done is done. Let it be. You were Paul Revere in April. Quit rationalizing. Just realize or acknowledge that the cancelation affected more than FMI. Every attendee was affected – financially and personally. During that same time period, Warren Buffett conducted his highly attended conference, NBA and NHL playoff games continued, the MLB schedule and attendance did not suffer and no college or university suspended classes. Our stores did not close. Our warehouses did not close. It’s all about informed choices and… having worked behind the scenes for Future Connect…I don’t see the transparency you ascribed to their decision process.

Point taken. I certainly wasn't trying to rationalize the FMI decision, though, and the last thing I would ever accuse FMI of would be transparency.

One note here – I’ve heard from a lot of folks that they thought FMI was overly secretive in how it dealt with the conference issue.

But I was really making a larger point yesterday – that we all need to be transparent and speedy in how we conduct business. Which led MNB user Craig Espelien to write:

In your “MNB Radio” piece today you touched on how stuck many industries are in old ways of thinking. Years ago Theodore Leavitt wrote an article for HBR that talks about Marketing Myopia – how industries become so internally focused they forget who they really should be. His main example is the railroad industry – an industry that to this day focuses more on the fact that they want to be in the railroading business than the transportation business – and how they became somewhat irrelevant because of the focus being too close in. He also uses A&P (from about 25-30 years ago) with their small store on every corner thought process. Too many retailers are stuck in the “way things used to be” mode – heavily invested in old ways of doing business and not focused enough on who their consumer could be and how they could serve that consumer.

Also, too many businesses (retail and other) talk a lot about change – but only want it if it is exactly like what is currently happening. I had a friend who once said “everyone wants to get to heaven but nobody wants to die” – a perfect encapsulation of how people who are so heavily invested in the way things used to be that they can not let go of the present to embrace the future.

All businesses – whether retail, technology, healthcare, etc. – all need to focus on what products the consumer needs/wants, how they are being used and now something better can be created to solve the problem of the ultimate end user. Unfortunately, the journey between yesterday and tomorrow is fraught with challenge as consumers also tend to embrace the way things are – until they do not.

I love the Jean Luc Picard quote – “Things are impossible until they are not” – so much meaning about how business could evolve – if only they would see beyond the end of today.

Someone once said that it is always easier to see what’s broken than it is to replace it.

A relevant comment, I think.

And MNB user J. Curtis Alpeter chimed in:

I also loved the analogy this morning on MNB Radio on race car driving. As a fellow Skip Barber participant, which I have to believe you have participated in, I thought I would clarify your analogy to race car driving. I believe the expression is "look to where you want to be", not "to where you are going". The point being the car is taking you where you are going, perhaps off the track, and you want it to take you where you want to be, the apex of the corner. Which is your case in point, that companies do not necessarily look at where they need to be but focus too much on either where they are heading, which is often not the right path, or where they have been.

Thanks for clarifying. You are clearly both a better businessman than I am, and a better race car driver.

Loved the following email from MNB user Clayton R. Hoerauf:

This is only slightly related to your topic but my wife and I spent last week wondering how we could relate our experience at our convention to the MNB world. Our industry had a conference scheduled for Vienna Austria and we also had some of the same concerns about traveling.

Fortunately we went through with the trip and attended the minimally required BS, which is for Business Sessions, of course. However, the fondest memories we brought home with us were believe it or not, the fabulous Billa grocery store in the lower level of the Ring Street Galleria which happened to be connected to our hotel. That is until we discovered the Julius Meinl store on Kohl Street. Being the true “grocery geek” and mentor to us MNB disciples I can only assume you have also had or will have the pleasure of experiencing these gems. Whole Foods won’t seem quite so impressive next time…….

I’m not sure I’ve ever been to Vienna. Hopefully, one of these days someone will ask me to give a speech there, and I’ll get a chance to visit the stores that you describe.


We had an MNB user the other day who inquired if there were any research done about how often people bring their kids to the store and specifically into the produce department. We got some responses…though I’m not sure that this is what he was looking for…

MNB user Kathy Schuster wrote:

My unscientific response would be - too many bring their kids to the store. When I walk into my favorite grocery store, there is an area where parents can leave their kids (supervised of course) and there are TVs all around the store where you can glance up and see how they’re doing. UNFORTUNATELY few parents seem to take advantage of this. This could be because the store has little carts with flags saying “shopper in training” and some that are built to carry the kids and still have room for the groceries.

Would be okay if they would train their kids to behave instead of letting them scream and carry on. I don’t dislike children, but I’ll tell you from experience that you only have to say once “If you don’t behave we’re going home” and actually do it, they learn to behave for the next time…

Another MNB user wrote:

In our family we avoid, at all cost, taking our kids with us to the grocery store. Why? Because most grocery stores, beyond the basic meat, dairy, and produce sections, are my worst junk-food nightmare; well-lit, strategically designed labyrinths of visually enticing, high-calorie, low-nutrition, processed products that have little in common with what I consider good, clean, healthy food.

The notion of trying to market to kids in the produce section is noble, but you’d be arriving late at the party, because the rest of the store will have you outspent in marketing dollars 10,000:1.

I actually feel sort of bad about these responses.

I always took my kids to the grocery store when they were little. Never had a problem. They knew they had to behave, and they knew not to beg. And I’d say, by and large, it was usually a pleasant experience for all of us. (Enough so that I can vividly remember the time my oldest looked at me when we were on the checkout line at Stew Leonard’s – he couldn’t have been more than four years old at the time – and said, “I don't feel well”…and then promptly threw up all over me. What I also remember is how fast the folks at Stew Leonard’s got out there with rags and paper towels, helped me clean myself off, and then made sure that everything in the cart was clean before handling the entire checkout process for me. And you wonder why I’ve been shopping there for 26 years?)

On the subject of “renting customers,” which a study the other day suggested that a number of stores were doing through price cutting strategies, MNB user – and MNB fave – Art Turock had a thought:

I was in the gym yesterday talking to a produce manager for a Seattle independent who competes against several big chains including Safeway. Even in produce where suppliers don't have major trade promotion budgets, the retailers are competing on price. He says the weekly specials ads are kept as top secret information until their appearance in media so as to be sure not to tip off the competition who are stocked substantially by the same suppliers.

Renting customers is rampant in the grocery industry where the recession trio of moves is to cut costs, cut prices, and increase private label. When a marketplace's key competitors mimic each others moves, the long term result is for every retailer to lose profits and brand equity. In the absence of strategies that differentiate, no one is playing for a competitive advantage.

What ever happened to retail format innovation? Remember King Kullen invented the first supermarket in 1933, right in the midst of the Great Depression.

I agree completely. There’s too much imitation, not enough innovation.

But I’m not sure that this is a problem created by recession.

I was pretty critical of Target the other day, and it prompted a number of emails.

MNB user Ronni Blumenthal wrote:

Target is one of my personal favorites for shopping. I have the benefit of working for an organic produce company so I don't spend much time in the produce department, but I find the selection of well priced organic foods in the other departments to be excellent and constantly expanding. I agree with your comment about individual wrapping of produce not being the best measure of food freshness. (I'm paraphrasing). Organic produce customers choose their food not only for taste and health, but also to support sustainable living. Single wrapping produce items has nothing to do with freshness. It does, however, require melting plastic around the item. That is not very appealing to organic eaters who might fear leaching from the plastic. The other issue would be the plastic waste that is generated when each item is single wrapped. I think Target would do well to use both bulk and trayed items in the produce department, particularly for the growing audience of people who are particular about their eating.

MNB user Dean Sparks was even blunter:

How many plastic trees in the plastic jungle have to be felled to create enough plastic to wrap all the potatoes in all 1,200 Target store locations?

I dunno, cause my Eco-Organic-I-Don't-Give-A-S$%t-About-The-Environment Calculator only goes to 9 digits........

Excellent point. While Walmart reduces packaging and creates a “green” image, Target is wrapping potatoes in plastic.

And they wonder while a new board of directors might be in order?

Another MNB user is even more pointed:

As a manufacturer that sells to both Target and Walmart, there couldn’t be two more different customers. Walmart says, give me your best price, and let’s move on. A rare deduction but always for something that is authorized. They couldn’t be any easier to deal with. Then, there’s Target. I do not exaggerate when I state that most of us in the office will not step foot in a Target because just the idea is upsetting after dealing w/them all day. Our IS manager got a call from his wife that she was on her way to Target to buy an X because it was $50 cheaper there than anywhere else she could find it. He told her to forget the $50 and just go somewhere else and buy it but to definitely not buy from Target.

We probably average 10-20 deductions from them/week for a myriad of “offenses”. As soon as we figure out what they’re doing and we adjust, they move down their list of deductions to something else and we start all over again. This is our favorite. We are penalized if we ship more than one purchase order at the same time. However, they pick up. You see where this is going. When they pick up, naturally, they want to be efficient. So, they pick up more than one purchase order at the same time. And then they fine us for shipping more than one purchase at the same time. But it gets better. They buy our product on pallets. Yet they continually send in those little FedEx trucks (yes, the same ones that pull in your driveway w/your new toaster) to pick up pallets and pallets of product. So, we call them and tell them the product won’t fit on the truck they sent. We remind them they need to send in a BIG truck. Somehow, this is our fault, also, so another deduction. In short, dealing w/them could give Scott Adams and Dilbert story material for a year. We’ll take Walmart any day…

And another MNB user wrote:

Don't know if there are any Targets near you, but we have two near us (and two Walmarts). Traffic in Target is always very light, even in the one that is a Super Target. Food side, too.

Unfortunately, Target is suffering as its customers concentrate on basics and cut back on discretionary spending, whereas Walmart thrives on basic needs, plus improving stores and selections at the same time, all the while maintaining those low, low prices.

On the subject of the FDA challenging General mills’ claims about Cheerios being good for lowering cholesterol, MNB user Sharese Alston wrote:

We are suffering from the marketing of all sorts of fatty, sugary, death traps and this is the one FDA chooses to go after?? I guess everyone prefers an easy fight. Regardless of if “it’s a drug” or not, Cheerios are a good, healthy choice for anyone trying to maintain a decent weight or manage health issues … It’s strange to me that our government would rather regulate a product like Cheerios and leave the Twinkies, Pepsis and Big Macs of the world with their billion dollar campaigns alone to kill us all. Someone other than me has to think that’s simply crazy, right? I sure do hope so.

MNB user Roy Bitz agreed:

This makes my hair hurt.

Where has the FDA been for the two years GM has been promoting this claim? Where are they on the things that matter----food safety for instance?

I sincerely hope GM has done their homework on this so I won't have to buy my Cheerios in the HBA aisle.

But another MNB user…not so much:

Good for the FDA.... I had a chance to meet with them over several issue two years ago. Let me tell you they are a misunderstood agency that does have our interest top of mind. Unfortunately lobbyist and certain US Senator along with manufactures run the FDA and pressure these folks and kill many good programs they have.

"Truth in advertising " for many years in many categories has taking a back seat to sales and marketing hype. If General Mills can prove it good for them, they need then to show us the data, if not...

Regarding a proposed federal tax on soda and other sugary drinks, one MNB user wrote:

How about the feds quit spending and start cutting the beast we call government. Then they won't need to tax everything that is enjoyable in life. Seriously, this is getting absurd. How about we just sit around in rocking chairs, drink water, and eat vegetables? If people do not want to exercise and they want to eat unhealthy food and drink unhealthy beverages, that is their choice. Or is this the new China?

But another MNB user disagreed:

I would like to call this the " Save Your Children Life Tax ". As a person who has diabetics and has attended many classes on the issue I can tell you that soda / fructose is not good for anyone and diet soda isn't any better.

Obesity is a national epidemic and we all need to recognize this fact and deal with it. Thank God, the kids of today have more information about health and are paying more attention to it then any other generation. Over all I like most people don't like taxes but in this case its the right thing to do.

Finally, on a completely different subject, I got the following email from an MNB user:

Tom Devlin's comments on aluminum bats can be traced back to the late 60's and early 70's as the then minimally financed little league teams struggled with the large number of wooden bats that broke and the impending cost. I remember as a kid the coach letting us try out some test bats from the Reynolds company (hate to say it but a bat named after mom's tin foil did not seem appealing) as well as some fiberglass versions I think from Wilson.

At the time the coaches never even pondered the ability to hit the ball farther they just wanted to maximize their shoestring budget (remember passing the hat during the game to collect $$). And as they say the rest is history. Fast forward 40 years or so and some of the local softball teams have actually moved back to wooden bats to limit injuries and level the playing field.

As with Tom I am also confused that aluminum bats are used all the way up through college. That's why the Cape Cod league is so interesting because for many it is the first time those gifted players use a wooden bat prior to playing pro ball.

Agreed. For me, baseball played with aluminum bats isn’t real baseball…sort of the same way that baseball played with the designated hitter isn’t real baseball.
KC's View: