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Tuesday, June 27, 2017

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Sansolo Speaks: Magical Thinking

by Michael Sansolo

Given the earthshaking events in retail over the past two weeks, it’s easy to accept a sense of impending doom. And frankly, it would be both wrong and inconsistent of me to suggest anything but taking these changes seriously.

Except we have to remember that things don’t always turn out as expected.

There are two important anniversaries this week that remind us of the power of new ideas and here’s hoping that one or both may inspire some interesting thinking inside your teams. And while these anniversaries have nothing in common except the calendar, they both remind us of the power creating opportunity where nothing previously existed.

The first, sure to be discussed heavily, is the iPhone. This week marks the 10th anniversary of its first appearance on the market. Think about that: just 10 years ago none of us really knew what a smart phone was or why we needed one so desperately.

Today we can’t imagine what we would do without them. Those phones play our music, guide our trips, take pictures and do thousands of other chores for us in addition to making phone calls. Whether you admired or loathed Steve Jobs, you have to recognize that the man had a way of impacting our lives by giving us technology we didn’t really know we needed.

The same could be said about the second big anniversary, but in a very different way. Yesterday marked exactly 20 years since the first Harry Potter book made its debut and, in truth, the world changed then, too.

Before the Harry Potter series, there were constant discussions as to whether children would read again or whether movies, video games and more had sapped their imagination. But with the flick of her wand - actually her keyboard - author JK Rowling showed us that none of that was true.

Thanks to Harry Potter, children (and adults) dove headlong back into books. Remember the incredible excitement that greeted each of the latter books in the series. People lined up in book stores waiting for the newest adventures, dressed as though they, too, were attending Hogwarts, playing quidditch or somehow finding another way to enter the world of wizards.

Luckily, my children were the right age at the time and my wife was astute enough to introduce the books, giving us all cause and opportunity to read all seven and attend all eight movies.

Again, we never needed Harry in our lives, but we’re so much richer for what Rowling brought.

I’m hoping that both these milestones can remind us that the solutions to current and future problems are never simple and neither do they all currently exist. For businesses out there worrying about how to merely survive this era of change the answer lies in finding a new way to solve customer needs or, at the minimum, to somehow turn the ordinary into the extraordinary.

It won’t take magic, just a lot of creativity.


Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.

Tuesday Morning Eye-Opener: The $15 Minimum Wage Debate

by Kevin Coupe

The New York Times has a story about how two studies looking at how an increase in the minimum wage to $15 in Seattle has impacted the city - and how they've reached differing conclusions.

"The first study," the Times writes, "by a team of researchers at the University of California, Berkeley, supports the conclusion of numerous studies before it, that increasing the minimum wage up to a level that is about half or less of an area’s typical wage leads to at most a small reduction in employment."

But, "the second study, which a group of researchers at the University of Washington released on Monday, suggests that the minimum wage has had a far more negative effect on employment than even skeptics of minimum-wage increases typically find ... The University of Washington authors held one significant advantage over other economists studying the issue: detailed data on hours and earnings for workers affected by the increase.

"This data allowed the researchers to measure the effects of the minimum wage on workers in all industries rather than relying on restaurants as a stand-in, a common technique. It also allowed them to measure a change in hours worked, a potentially more complete indication of the effect of a minimum-wage increase than the employee head count that many studies use."

The details and rationales behind the two studies can be found here.

I'm glad they're looking at this, and I'm not really surprised that they've reached different conclusions ... the story even has anecdotes from real people illustrating each of the conclusions.

Seattle is actually a tough market to do such a study - the economy is booming, and there are a lot of companies there paying more than minimum wage because they have to in order to attract people, as opposed to because the government mandates it.

I'm perfectly willing to accept the notion that a higher minimum wage might cause some companies to slow down hiring, but I also continue to believe that there is a public policy problem when the minimum wage is so low. It'd be great if people of varying political persuasions could get together to have a mature, nuanced discussion of the problem and possible shared solutions.

It'd be great. It's also incredibly unlikely, if not impossible.

Which is itself an Eye-Opener.

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From MyWebGrocer...

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From ProLogic Retail Services...



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Walmart Said To Be Not Considering Whole Foods Bid

Reuters reports that "Wal-Mart Stores Inc is not actively considering making an offer for Whole Foods Market Inc.," a source familiar with the matter said.

Indeed, Whole Foods - which Amazon has offered to buy for $13.7 billion - has not yet received any competitive bids.

There's also been speculation that Kroger, Costco, or Target could be potential bidders for Whole Foods.

KC's View: I'll be a little surprised if nobody makes a higher bid ... but then again, it seems to me that it is entirely possible that Amazon's major rivals could believe that this deal could sink it, and they don't want to get in the way. I don't agree with that opinion, but there almost certainly are people out there who feel that way.

Starbucks Hopes High Noon Will Lead To Higher Sales

CNBC reports that as Starbucks expands its food offerings, hoping they will provide incremental sales beyond its various coffee and beverage items, lunch is seen as a major opportunity.

Starbucks CFO Scott Maw tells CNBC that while 20 percent of Starbucks' revenue comes from food - up from 16 percent just five years ago - the company believes there is a lot of room to grow. "It's all about providing higher-quality, fresh food at lunch," he says.

The company is testing a "mercado" initiative that has "fresher options ... prepared by employees and sold the same day," as opposed to the company's traditional approach of having food "prepped and packaged off-site and delivered to stores weekly, with many items arriving frozen."

KC's View: It seems to me that I've written this story every year or two for the past decade. Maybe this time Starbucks will get it right...

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From Webstop...

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Amazon-Whole Foods Deal Updates

• The Wall Street Journal has a story suggesting that if the Amazon plan to buy Whole Foods for $13.7 billion goes through, Amazon's predilection for driving down prices could create margin pressure on companies such as Kraft Heinz, Kellogg and Mondelez - all of which already have been facing profit challenges.

The Journal writes that "Amazon’s initial priority will likely be to lower Whole Foods ’ operating costs so that it can charge less for groceries, in hopes of winning more customers, according to the people familiar with the company’s thinking." But the expectation is that it will also pressure brand manufacturers to lower their prices, as well as using Whole Foods' 365 private label as a cudgel when and where appropriate.


Reuters reports that an acquisition of Whole Foods by Amazon will only take it so far if it wants to become a dominant US food retailer:

"The e-commerce giant would need to add a large network of specialized grocery distribution warehouses, former AmazonFresh employees and logistics experts said. This is something Wal-Mart Stores Inc and other competitors have already done. Whole Foods, with a relatively small distribution footprint of its own, does little to change the picture for Amazon, they said."

While Whole Foods has about one million square feet of warehouse space, Amazon actually has 100 million square feet ... though the vast majority is not equipped to deal with fresh, refrigerated and frozen foods. In other words, the $13.7 billion Amazon plans to spend for Whole Foods "will be just the start of a long and costly process" as it ramps up.


• The Puget Sound Business Journal reports that Amazon will have close to $8 billion "left in its war chest after subtracting the $13.7 billion needed to buy Whole Foods Market ... That's according to Amazon's reported first-quarter cash and equivalents. Amazon's cash on hand hasn't dipped that low since the third quarter in 2014, when the company reported $6.9 billion in cash on hand."

The Journal goes on: "Considering the Seattle e-commerce company spent only $103 million on acquisitions last year and hasn't spent more than $900 million a year since it bought Zappos.com for $1.2 billion in 2009, $7.8 billion is plenty to finance more acquisitions in the immediate future."


Business Insider reports that John Foraker, president of Annie's Homegrown, believes that if Amazon is successful in acquiring Whole Foods, it could "meaningfully address (an) issue that plagues communities across the US: food deserts."

""The thought of Whole Food's mission combined with technology and the ability of a company like Amazon to help conquer some of the last-mile issues that have prevented access and distribution into really difficult places seems like a golden opportunity," Foraker tells Business Insider, adding, "If you live in an poor urban or rural neighborhood that doesn't have good grocery stores around, you think, 'I got to get in a car — if I have one — and drive 30 or 45 minutes to get to a place where I can buy fresher, healthier food. The idea of those two [companies] coming together will give you most of what you need to solve that."

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From Samuel J. Associates...Better To Light A Candle Than Curse The Darkness...


From MorningNewsBeat, September 15, 2016:

A US Department of Labor report recently revealed that there were 5.2 million jobs available in the United States ... which was said to be the highest level of job availability since these specific numbers started being tracked back in 2000. This despite the fact that there remains considerable debate, much of it cacophonous, about national unemployment and under-employment.. The problem, one expert said, is that what we have in this country is "one of the biggest mismatches between skills and lack of qualified help available in the nation's history."


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Don't just settle. Don't just make the easy choices. Allow Samuel J. Associates to work for you. We don't just believe in such people and companies. We actually put them together. And we have the track record to prove it.

Click here for more information from Samuel J. Associates.

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Worth Reading: Embrace The Narrative

The New York Times has a long piece about what it calls the "yogurt wars," and how Yoplait is trying to regain past glories lost to the likes of Chobani, Fage and Oikos.

Yoplait's attempt at a similar Greek yogurt was singularly unpopular, and the Times writes that the company decided - after much soul searching and navel gazing - that the only way to make an impact was to do something different, not something imitative.

The Times writes: "Yoplait is opening a new front in the cultured-milk battles. Next month, when you walk down the dairy aisle of your grocery store, you’ll see the company’s latest salvo, a new formula that executives say is innovative, exciting and — c’est possible? — passionate. They’re calling it Oui by Yoplait, in homage to the company’s French roots.

"Whether it will succeed remains to be seen. Yoplait has stumbled before. But if, as you are shopping, you happen to pick up a small glass pot of Oui and are momentarily transported to the French countryside, you’ll know that the company has finally figured out how to look beyond the data and embrace the narrative.

"Yoplait may have figured out how to fake authenticity as craftily as everyone else."

You can read the entire story here.

KC's View: We believe in narratives here at MNB. No so big on faking authenticity, but having a good story ... that's a huge advantage.

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From the Network of Executive Women...


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E-conomy Beat

City AM reports that "Tesco has launched a one-hour grocery delivery service to customers in central London ... The service is priced at £7.99 with no minimum spend on each order ... Customers can order up to 20 items from a range of 1,000 products – including fresh fruit and vegetables, meat, dairy, and baby and beauty products – via the Tesco Now app ... Orders will be sourced through a local store and delivered to customers via moped within 60 minutes. However, the service will be available in only some central London postcodes from 8am until 11pm on weekdays and 9am until 11pm at weekends."

KC's View: The deal is that Tesco wants to compete more effectively with Amazon. Period. End of story.

FastNewsBeat


• Here's an interesting tidbit from the Motley Fool ... Walmart has 2.3 million people working for the company, which has 11,723 stores worldwide. By comparison, Amazon currently has 351,000 employees. looked at from that perspective, "Amazon employees generate twice as much revenue as Walmart workers."

But, "i's important to note ... that Amazon's workers are becoming less efficient. The company's been on a hiring spree lately, with its employee count growing 43% year over year in the first quarter. That drastically outpaces its consolidated revenue growth of 23%.

"In fact, Amazon's employee count has increased more than 40% in five of the last six quarters. Sales growth hasn't topped 30% in that same period. One of the big reasons for the ramp in employment is that Amazon is undergoing significant investments to bring new fulfillment centers online. That requires a lot of overhead (including labor) upfront while it ramps up the usage of its new warehouses."


CNBC reports that Sears has opened a new 20,000 square foot small-store format in Pharr, Texas, which sells only Sears-brand appliances and national brand mattresses. The company says that these are two of its strongest categories, and it plans to open additional stores using the same format.

The news comes as Sears also is announcing the closure of yet another 20 stores, bringing to more than 260 the number of Sears and Kmart stores that it has said it will close this year.

Executive Suite

• The Wall Street Journal reports that Supervalu CFO Bruce Besanko is resigning effective next week “to pursue an opportunity outside the company."

KC's View: The Journal makes the point that this is the third major food business resignation in just the last few weeks - Ian McLeod, CEO of Southeastern Grocers, and Rock Anicetti, CEO of The Fresh Market, both recently stepped down. The story suggests that this reflects the tumult affecting the food retail business ... and if that's true, then I'd expect there to be a lot more job openings in the next few months.

Your Views: Moving Time

Yesterday, we took note of a Bloomberg story about how Target may be a major victim in an Amazon-Whole Foods deal, and I argued:

Target ought to outsource its grocery operations to Amazon/Whole Foods in the same way that it has outsourced its HBC/Rx business to CVS. Might be a real game-changing combination...

Prompting MNB reader Chris Westermeyer to write:

My personal thought is that this would be the perfect spot for Kroger to make a move – to acquire / merge with Target.  Large Kroger Marketplace stores now have thousands of square feet dedicated to furniture, clothing and other non-grocery items, and while they are not doing poorly, they don’t have the millennial heart-strings like the cooler, hipper Target. Target’s grocery woes are well known – and who does grocery better than almost anyone?  Kroger.  This would also give a foothold to Kroger in the northeast and Florida, where they have not expanded yet.  While there is some overlap, I’m surprised that more analysts are not pushing some combination of Target & Kroger to battle the big bad Amazon and Walmart.

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Stater Bros. Adopts ReposiTrak Food Safety Compliance Management Solution

SALT LAKE CITY - Stater Bros. Markets announced today that it has chosen ReposiTrak, Inc., the leading provider of Compliance Management and Track & Trace solutions for food and dietary supplement safety, to manage regulatory and business documentation compliance within its supply chain.

“Our top priority at Stater Bros. is to provide the safest and highest quality products for our customers,” said Dennis McIntyre, Executive Vice President of Marketing at Stater Bros. “ReposiTrak’s automated system will enable us to better manage our growing list of documents we require from our approved suppliers in order to verify their good business and safety practices.”

ReposiTrak, a wholly owned subsidiary of Park City Group, helps manage regulatory, financial and brand risk associated with issues of safety in the global food, pharma and dietary supply chains. Powered by Park City Group’s technology, the platform consists of two systems: Compliance Management, which not only receives, stores and shares documentation, but also manages compliance through dashboards and alerts for missing or expired documents; and Track & Trace, which quickly identifies product ingredients and their supply chain path in the unfortunate event of a product recall.

For more information about how to join the rapidly expanding community of retailers and suppliers using ReposiTrak's robust safety and compliance solutions, go to ReposiTrak.com.


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"GOOD IS NOT GOOD WHEN BETTER IS EXPECTED"

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism.  These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance;  Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there.  He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's

Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.

Want to make your next event unique, engaging, illuminating and entertaining?  Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.

Now back to regularly scheduled editorial...

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Good Is Not Good When Better Is Expected

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism.  These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance;  Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there.  He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's

Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.

Want to make your next event unique, engaging, illuminating and entertaining?  Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.

Now back to regularly scheduled editorial...

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Industry Drumbeat

"GOOD IS NOT GOOD WHEN BETTER IS EXPECTED"

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism.  These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance;  Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there.  He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's

Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.

Want to make your next event unique, engaging, illuminating and entertaining?  Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.

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