business news in context, analysis with attitude

Published on: June 25, 2012

by Kevin Coupe

Maybe this is taking "all-natural" too far.

Then again, maybe not. It all depends on your perspective.

Business Insider International has a story about a new supermarket that opened in Süderlügum, Germany. The store manager wanted to generate a little buzz and a lot of traffic, so he offered the equivalent of a free $240 (US) shopping spree to the first 100 people who showed up to shop naked.

He got a surprise when 250 people showed up in the buff.

According to the story, "the majority of the naked shoppers were Danes, over the border to get cheaper German goods, and didn't mind being filmed and photographed while they got their groceries."

And if you want to, you can see the video here. (Note: there may be male and female nudity, but there is absolutely nothing titillating about it.)

Published on: June 25, 2012

Bloomberg reports that "a study conducted by Kantar Retail, a London-based research firm, compared prices on a wide range of 36 items and found that on average they’re 20 percent more expensive at Amazon than at Wal-Mart ... On goods such as food, Amazon’s prices were almost 60 percent more, though some items are cheaper, the study said."

The story says that "when it comes to controlling prices, Amazon is playing catch-up with Wal-Mart, which has been building its supply base, wringing costs from its vendors and amassing buying power for 50 years. Amazon is working on bringing in new vendors and lowering costs in its supply chain."

Published on: June 25, 2012

Last Thursday, MNB took note of published reports saying that Apple had decided to give everyone working in its US Apple Stores hourly pay increases of as much as 25 percent, a decision that the company said followed a review in which it was determined that the some 25,000 people working for Apple's retail operation were underpaid.

Just a few days later, in the Sunday New York Times, there was a 4,300-word story suggesting that while Apple has been a profit machine in recent years, with a current CEO, Tim Cook, who is the highest paid senior executive in the country, the people working in its retail stores have been getting the short end of the stick.

"By the standards of retailing, Apple offers above average pay — well above the minimum wage of $7.25 and better than the Gap, though slightly less than Lululemon, the yoga and athletic apparel chain, where sales staff earn about $12 an hour," the Times writes. "The company also offers very good benefits for a retailer, including health care, 401(k) contributions and the chance to buy company stock, as well as Apple products, at a discount.

"But Apple is not selling polo shirts or yoga pants. Divide revenue by total number of employees and you find that last year, each Apple store employee — that includes non-sales staff like technicians and people stocking shelves — brought in $473,000." And yet, the average store employee making $12 per hour would make only $24,000 a year if they worked eight hours a day, five days a week, 50 weeks a year - which seems a little low for someone generating almost a half-million dollars a year in revenue.

Apple's ability to pay so little, the story says, "rests on a set of intangibles; foremost among them is a built-in fan base that ensures a steady supply of eager applicants and an employee culture that tries to turn every job into an exalted mission. This is why Apple can do something unique in the annals of retailing: pay a modest hourly wage, and no commission, to employees who typically have college degrees and who at the highest performing levels can move as much as $3 million in goods a year."

Published on: June 25, 2012

The Los Angeles Times reports that Yale University's Rudd Center for Food Policy & Obesity is out with a study suggesting that the nation's major cereal manufacturers are guilty of sending mixed messages when it comes to marketing to kids - that while they may have improved the nutritional quality of cereals marketed to kids, they still are spending more time and money selling their least nutritious offerings.

According to the story, the Rudd Center "says that food companies spent 34% more in 2011 – a total of $264 million -- than in 2008 to promote cereal targeted to children. And none of its healthiest brands makes advertising to children a priority, says Kelly Brownell, director of the Rudd Center." For example, "In 2011, the average 6- to 11-year-old saw more than 700 TV ads for cereals; the average 2- to 5-year-old saw 595 such ads, the study said. Of those, the study said, 45% promoted General Mills’ Cinnamon Toast Crunch, Honey Nut Cheerios, Lucky Charms and Reese’s Puffs; and Kellogg’s Froot Loops."

In addition, while the report concedes that most kids' cereals have less sugar and sodium, as well as more fiber, it also suggests that they generally still have too much sugar.

Kellogg's responded to release of the study by saying, "“We’re pleased that the Rudd Center has acknowledged the important nutrition improvements we’ve made in our kids’ cereals since 2009. The consumption of breakfast cereals is linked to healthier body weights and more nutritionally complete diets. Kellogg has a long-standing commitment to responsibly market foods that meet strict nutrition criteria."

The Grocery Manufacturers Association (GMA) noted that "working through the Children’s Food and Beverage Advertising Initiative (CFBAI), America’s leading cereal companies have voluntarily adopted strict advertising criteria so that 100 percent of their ads seen on children’s programming promote healthier diet choices and better-for-you products.  Under CFBAI, they have reformulated products to reduce sugars, fats and sodium and to increase positive nutrients.  Since 2007, sugar reductions in cereals have ranged from 10 to 25 percent, and today 86 percent of cereals advertised to children contain no more than 10 grams of sugar per serving."

And, GMA added, manufacturers have introduced "more than 20,000 new product choices with fewer calories, reduced fat, sodium and sugar, and more whole grains since 2002."

Published on: June 25, 2012

• The Los Angeles Times reports that Walmart has ended its relationship with Mercury Public Affairs, the PR firm it had hired to lobby Los Angeles officials about a store that has been proposed for the city's Chinatown neighborhood. The firing of Mercury came after one of its employees, Stephanie Harnett, attended a closed press conference being held by a pro-labor group in Los Angeles that is opposing the store and represented herself to be a student reporter from USC.

Walmart condemned Harnett's actions as being “contrary to our values and the way we do business," and the PR firm, Mercury Public Affairs,said that her actions were "in no way approved, authorized, or directed by Wal-Mart or Mercury," and that she no longer worked for the company.

"We take this matter seriously and have taken the appropriate steps to ensure this type of activity is not repeated," said Walmart spokesman Steven Restivo.

Published on: June 25, 2012

The San Francisco Chronicle reports that the city's mayor, Ed Lee, is continuing a five-year tradition begun by former Mayor Gavin Newsom by proclaiming that San Franciscan's should enjoy a "soda-free summer." In his proclamation, Lee said, "I encourage everyone to rethink choosing sugary drinks and hydrate with clean, refreshing tap water."

However, the paper notes, despite its reputation for legislating public health issues - like banning toys from fast food Happy Meals as a way of making them less attractive to kids - the city is not planning any legislative moves similar to the jumbo sugary soft drink ban being proposed in New York City.

There are other cities considering legislative approaches focusing on soft drinks as a cause of obesity. As the Chronicle writes, "As obesity and diabetes rates soar in the United States, Richmond this fall will vote on a soda tax that would be the first nationwide ... A proposal in Los Angeles would end vending machine sales of sodas in parks and libraries."

In the case of San Francisco, however, Lee is seen as having a more low-key approach than some of his mayoral contemporaries elsewhere in the country, and he is more likely to focus on education and information transparency than legislative remedies that some see as restricting personal freedom.

Published on: June 25, 2012

The Associated Press has a report about a restaurant concept that is part of a "booming niche" seeing double digit growth at a time when many restaurants are seeing small growth or stagnation. It is called the "breastaurant," and is defined as a sports bar with scantily clad waitresses. While the biggest of the breed, Hooters, has been struggling because of a perceived staleness in its concept, other chains and independents - bearing names such as the Tilted Kilt, Twin Peaks, and Mugs N Jugs - are seeing significant growth.

What's interesting about this is that it isn't just young men fueling that growth. Rather, there are a lot of families patronizing these restaurants because the food is seen as being a) tasty, b) plentiful, and c) a good value.

It helps, one supposes, that the waitresses at all these concepts say that they believe their primary job is to make customers "feel special."

Published on: June 25, 2012

In the UK, the Telegraph reports on a new study done by the Boston University School of Medicine of more than 5,000 Canadians, finding that those who drink alcohol in moderation - "no more than 14 drinks a week and no more than three a day for women and four a day for men" - tend to rank better in terms of "dexterity, emotion, cognition and mobility" than people who abstain completely from alcohol.

In addition, the study showed that "subsequent changes in quality of life past 50 were similar in all groups, except for those who cut down on drinking from moderate levels - and these showed signs of decline."

Published on: June 25, 2012

• Delaware Supermarkets, a five-store member of Wakefern Food Corp., announced that Christopher L. Kenny, chief operating officer, will assume the role of president and chief executive of the company, effective immediately. Former president and DSI founder Bernard F. Kenny, Jr. will remain chairman of the board as his son transitions into his new role. Christopher L. Kenny is also a member of the DSI Board of Directors.

Published on: June 25, 2012

Last week, MNB took note of a Time, magazine piece about Zeynep Ton, a Professor of Operations Management at MIT’s Sloan School of Management, who argues that "viewing retail labor as an expense to be cut, rather than as an asset to be invested in, is unsound," and that "by underinvesting in their employees, retailers are actually making their operations much more inefficient, and therefore much less profitable."

According to the story, Ton has found after a decade of study that "companies that buck the status quo and invest heavily in their workforce actually are able to not only compete with their competitors on service but on price too."

One MNB user responded:

Great article! Ton might add to the challenges of the hours, evenings, weekends, and holidays. While I have chosen this field for my livelihood, it doesn’t make it any easier on the family times I have missed and will continue to miss. Young people entering into this industry often are amazed at the variation of hours in any given week, morning, afternoons, and evenings (over nights thrown in here and there). While I have found this a rewarding career, it is tough to start at the bottom and see a future.

True. But if one believes that one is being nurtured as a corporate asset, as opposed to a cost, it helps.

Trust me on this. I've spent my entire career in editorial, but when i've worked for other people, it was always the ad people who were treated like assets because they brought in sales dollars. We were treated like costs because we spent the money ... ignoring, of course, the fact that without editorial, there would be no sales dollars coming in. But it would not matter how long or hard or smart we worked ... editorial is the poor stepchild in many publishing organizations. So for those of you in retail who feel like they are not treated appropriately ... I feel your pain.

Another MNB user wrote:

I think Ton’s study further reinforces what I am observing and calling the self-inflicted demise of Walmart.

I shop one of their nicest stores in the NW Arkansas area. It was at one time the model prototype store, #5260.

Part of the less labor equation is we were not able to find an item after a store reset and we could not find ANYONE in the store who could find the item.

Not like the old days when an employee or possibly an Assistant Manager over grocery had control over a section of the store and new where stuff was.

Well, my wife and I did find the item by accident and they did not have the flavor we wanted on our first trip. On our next trip the item was out of stock. I want to attribute that to fewer employees and no one actually owning that problem. When I brought it up to an employee -  yep, a real human in the actual aisle of the store – he told me I SHOULD TALK TO THE MANAGER OR CUSTOMER SERVICE ABOUT IT.
'
I suggested he might be “my voice to management”. He kindly informed me “they don’t listen to us”. This type experience has happened at least three different times over the past 60 days.

So good for Walmart - they saved a buck on fewer employees – which apparently added to the frustration of both the shopper (ME) and an employee (based on his response to me).

Now guess what my emotion is that I tie to shopping at Walmart – DREAD. I can’t stand shopping there because everything they do makes the statement they do not care about my shopping experience or wants.

I have already modified my behavior so I now shop ANYWHERE ELSE within reason to buy ANYTHING Walmart sells just to avoid spending money with them. That’s my statement - that I can’t stand them.

Needless to say I am anxiously awaiting the opening of new food store just as close to my house as the model Walmart Super Center I shop today… congratulations Walmart on your lower labor expense.

To be fair here, I suspect that you could substitute a lot of names for "Walmart" in this email. And I wonder how many retail executives read this letter and say to themselves, "There but for the grace of God go I."




I continue to let lots of email responding to my piece about the importance of proper English usage, good grammar, and literate writing in business. Apparently, a lot of people have pet peeves in this area...

One MNB user wrote:

That reminds me of my now departed Father in-law.  If someone ever said in his presence they were mad about something, he’d interrupt with a grin and half a chuckle and say “dogs get mad, people get angry”, and then he’d just smile.  Back in the day, mad was used to refer to an animal suffering from rabies, which is still applicable I guess, but language does change over time, but he still loved pointing it out like you were some kind of idiot.  I sure do miss the wit and charm of that kind sweet old man!

From another reader:

AMEN!!  My personal pet peeve has been the "less" vs. "fewer" distinction. Thank you for mentioning this frequent gaffe. For a short time, I thought I'd gotten that corrected at the express lanes of my former employer but it's now hit or miss --- usually miss.

What difference does it make when the  sign is ignored anyway - by customers and the retailers.   [Where I shop you might get shot if you confronted a customer ignoring that restriction.]

Maybe they can't count.

Another MNB user disagreed:

I have enjoyed your blog immensely since I was first introduced to it several months ago, but I felt that the Wednesday Morning Eye-Opener failed to acknowledge the ever-changing nature of language.  To the extent that proper grammar is necessary to communicate clearly, it is, without question, essential, but all language is in a constant state of evolution.  IMHO, nit-picking over minor mistakes where the message is still blatantly clear (as in your less vs. fewer example) undermines a more basic value of language: that you need to know how to make yourself understood.  When poor grammar interferes with that ability, there is a problem, but these small "mistakes" may develop into the accepted form of language only to be remembered as an arcane footnote in the dictionary.

That being said, I whole-heatedly agree that we have gotten to the point where basic communication is being affected, so I am quite pleased that employers are requiring a better command of language.  It will serve as an important cultural force that will continue to develop language in the "right" direction.

Thank you for your work each day.  It has been a bright spot in my otherwise dull mornings.

I hesitate to disagree with someone who finds MNB to a bright spot, but I can't help but feel that small mistakes tolerated lead to basic standards being lowered.

Another MNB user wrote:

I am of the "younger" generation (graduated college in 2009).  I spent my childhood in four different public school districts (each rated very highly, and each in a different state), and attended a well-ranked public university.

I don't remember any significant time being dedicated to English grammar, in any of my schools.  There may have been a little, and I remember exercises around the proper placement of commas (which we needed to know to pass state exams), but it seemed as though reasonably decent grammar was something that we were just "expected" to pick up, just as native English speakers can often tell by how a sentence sounds whether it can be improved for better clarity and grammar.

In fact, I learned FAR more about English grammar in my Spanish classes, ironically enough.  Learning about the different tenses and moods in Spanish and the rules around when to use each gave me a much better understanding of English grammar.  When I speak with colleagues in their 20s, many of them say much the same thing: foreign language classes (now required in most high schools) taught them foreign language grammar, and in doing so, also taught them some of the finer points of English grammar, especially with regards to verb conjugation and when to use a given tense and mood.  My grammar still isn't perfect, and never will be, but I like to think that I'm passable, and I don't have the English department to thank for it.

Finally, I'd like to note that I am appalled at how few people use the subjunctive properly in English (again, something I never truly understood until taught how to use it properly in Spanish).  I drive by a sign on my daily commute that says, "Wish your office was on Elm St?". It takes a great deal of self-control to keep from calling the leasing agent up and replying, "No, I do not wish my office **were** on Elm St, but I do wish you were in English Grammar 101."

You make my point about standards, I think.

Just FYI...I used to be terribly guilty of saying "was" instead of "were." Not sure why, but for some reason I always made this mistake. When I started dating the woman who would later become Mrs. Content Guy, it made her nuts ... and so she said I had to pay her a quarter every time I used "was" instead of "were." Took me about a week and a couple of bucks to break the habit, if I recall correctly.

Someone complained about my use of language, which led another MNB user to write:

The next time someone complains about your use of the same word or phrase at the beginning of a clause or sentence, please send them here.
 
You were using an ancient rhetorical trope called "anaphora." I'm sure your professor of rhetoric will be pleased that you internalized it, but disappointed that you forgot the term.

I don't even remember having a professor of rhetoric....
 



Finally, thanks to all of you who wrote in about my Friday piece about jogging again, despite a couple of knee surgeries. I appreciate all your suggestions ... yes, my lower back seems to bother me more than my knees ... and I love the idea of always finishing with a beer, though I'm a morning runner, so this might not be the best way to go.

Published on: June 25, 2012

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