business news in context, analysis with attitude

Published on: February 8, 2013

by Phil Lempert

On Tuesday February 12 at 1:15pm, I’ll have the pleasure of releasing the findings of this year’s benchmarked survey from the National Grocers Association (NGA) and SupermarketGuru.. While there is no doubt that we have experienced much change in both the supply chain and consumer behavior during the past twelve months – the findings of the survey is designed to help and empower the Independent Grocer to navigate through the critical issues.

There’s encouraging news:

• Primary supermarkets earn more satisfaction scores of 8, 9 and 10 (on a scale of 10 where 10 is excellent) this year, up 5.4 points to 71.5%, as African-Americans and seniors 65+ dispense the most 10s.

• Independents may well benefit from less focus on price when consumers choose a primary grocer. Low prices alone won’t pull in shoppers seeking diverse appeals in a store. Low prices don’t even crack the Top 10 list of important store features: just 41.7% call it “very important”; this is well below the 51.0% peak in 2009 and 2010 and the 44.0% in 2011, though up a bit from 39.5% in 2012. The lowest-income households, the lightest grocery spenders, and minorities lead those who view low prices as “very important."

• A related sign that price matters less than other enduring appeals: for the first time in recent memory, less than half of consumers (49.1%) say items on sale/money-saving specials are “very important.” Down steadily from 60.0% in 2010, the two lowest income groups drive this measure.

So what should independents emphasize to align more effectively with consumers in 2013? Survey findings suggest focusing on healthy/fresh/local expertise and assortments to help people eat smarter, cooking insights to raise consumer confidence in the kitchen, easy store layouts and speedy checkouts.

The availability of nutritionists and dietitians could build momentum for supermarkets in this emerging area. New questions in this year’s survey explore the connection between consumers, grocers and these food-health professionals. Notably, nutritionists/dietitians trail only physicians and the Internet as the most trusted information sources—that’s more than traditional media, ratings systems on packages, and other choices.

As in past years, our panel of industry leaders will dissect and add their insights to the survey findings: Mark Batenic, Chief Executive Officer, IGA, Inc.; Jeffrey Brown, President and CEO, Brown’s Super Stores, Inc.; Alex Siskos, Vice President, Business Insights, CROSSMARK; and Art Potash, Chief Executive Officer, Potash Market, will join me on stage.

More than 2200 chief household shoppers completed surveys that detailed their experiences, behaviors and sentiments on what does or doesn’t appeal to them about supermarkets, as well as their purchase influences, eating habits and nutritional concerns. A total of 104 shopping attributes are addressed in this year’s survey.

To tell a complete story, when analyzing findings from this comprehensive national consumer study, the National Grocers Association and SupermarketGuru dug deep to show differences in demographics and lifestyles. For instance, we looked at differences between the nation’s heaviest weekly grocery spenders and the lightest. We also examined age, ethnicity, gender (since more males food-shop today), household size and household income.

In 2013, consumers will see supermarkets either as part of the problem or part of the solution to help them live better. Questions they ask, as they assess where they shop, will connect food with their lifestyles and focus less on price creating a special opportunity for independent supermarkets, which may lack scale to compete fiercely on price, but have many elements in place consumers covet.

To dig deeper into the survey results and gain actionable information, context and strategic recommendations, be sure to join us at Tuesday’s General Session. To purchase a copy of the survey after Tuesday’s release, please click here.

Published on: February 8, 2013

by Kevin Coupe

This morning, as we head into the weekend, I'm actually going to turn the 'Eye-Opener" over to the folks at Entrepreneur, as they address a subject dear to my heart: business lessons that can be found in the movies.

In this case, writer Lindsay Lavine looks at four business lessons that can be found in Quentin Tarantino movies ... specifically "what to look for when hiring, how to work with others, and what to look for in training programs."

It is a good piece, and you can read the whole thing here.

When you're done, and you're hungry for more business lessons from the movies .... well, have I mentioned that Michael Sansolo and I co-wrote a book on the subject?

It's an Eye-Opener.

Published on: February 8, 2013

The Indianapolis Business Journal and the Indianapolis Star have stories about the ongoing trial of former Marsh Supermarkets CEO Don Marsh, who is being sued by his former company, which charges that he spent more than $3 million in company money to pay for personal expenses.

The stories are fascinating.

One excerpt, from the Journal:

"Don Marsh belonged to several global organizations, including the World Presidents Organization, Chief Executives Organization, World Economic Forum, American Arbitration Association and American Management Association ... While Marsh Supermarkets never operated stores outside of Indiana, Ohio or Illinois, Don Marsh traveled around the world to such wide-ranging destinations as Cuba, India, Libya, Russia and Venezuela in hopes that the Marsh brand could gain market share in those countries.

"In Russia, for instance, Marsh private-label products were sold in Russian grocery stores for a short time until Don Marsh said he 'pulled the plug' after he couldn’t compete with cheaper, Chinese products.

"Russia is where he met the director of the Russian ice ballet, with whom he had an affair. Marsh put her up in a New York City apartment as he considered sponsoring the tour in the United States ... The affair was one of four extra-marital relationships Marsh has admitted to during this week's ongoing testimony."

The story goes on:

"He also flew to Libya a handful of times in an attempt to open a distribution center in the country to serve 'mom and pop' stores, he said. Marsh’s sale to Sun Capital Partners in 2006 interrupted the project, which Don Marsh said had the support of former U.S. Sen. Richard Lugar.

"Florida-based Sun Capital Partners terminated Don Marsh’s contract 'without cause' after it took over, then stopped paying his $4.2 million severance in early 2008, after it claims it discovered personal expenses charged to the company.

"Don Marsh is countersuing Sun Capital, claiming it still owes him about half of his severance."

The Star writes that Marsh's defense depends on being able to convince the jury that not only were Marsh's expenses business-appropriate, but that his board of directors knew about them and tacitly approved of them.

"The company knew what Don Marsh and others officers were doing," his lawyer told the jury. "He followed the rules that were in place at the time. Marsh Supermarket has changed the rules after the fact and that’s not fair."

Published on: February 8, 2013

Just FYI ... MNB started getting email late yesterday saying that the announcements of corporate-level layoffs at Delhaize America have begun, with some people saying that the many of them seem to be in Maine, where the company's Hannaford chain is based.

No store level cuts are said to be involved.

Published on: February 8, 2013

• The Wall Street Journal reports this morning on figures released by the Alliance for Audited media, saying that "newsstand sales of consumer magazines dropped 8.2% in the second half of 2012 from a year earlier, while paid subscriptions saw modest growth of 0.7%."

But here's the fascinating passage from the story:

"Nearly 65% of the magazines covered in the data have digital editions as part of their total circulation. In the latest period, 289 magazines had digital replica versions with a combined circulation of roughly 7.9 million," accounting for about 2.4 percent of total industry circulation. "A year earlier," the story says, "245 magazines reported roughly 3.2 million digital replica copies, representing less than 1% of the total industry."

Published on: February 8, 2013

Bloomberg reports that the UK Food Standards Agency has given that nation's beef suppliers one week to test all their products for the presence of horse meat and report back with definitive results.

The deadline was issued after the meat in a line of lasagnas was found to have 60 percent horse meat. According to the Bloomberg story, "U.K. supermarkets including Tesco Plc, Wal-Mart Stores Inc.’s Asda and Aldi have removed some ranges of frozen beef burgers from their shelves in the past month as concern has escalated over tainted meat. Tesco last week dropped one of its suppliers after the discovery of horse DNA in some products."

Published on: February 8, 2013

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

• Bloomberg reports that Sprouts Farmers Market, which currently is owned by Apollo Global Management, is considering an initial public offering that would take the company public. Sprouts currently has 150 locations, with 20 more scheduled to be opened this year.

• UPI reports that a McDonald's franchise in a suburb of Sydney, Australia, has gotten permission from corporate HQ to "test table service, complete with plates, glassware and silverware. The trial is expected to run for five weeks."

You can put lipstick on a pig, but...

Published on: February 8, 2013

• Ron Hodge, the just-retired CEO of Delhaize America, has joined Park City Group, the supply chain solutions provider, as a member of the board of directors. Hodge continues to serve as an advisor to Delhaize America as the company transitions to new leadership.

• RadioShack Corp. said yesterday that it has hired Walgreen executive Joseph Magnacca as its new CEO.

It has been a busy week for Magnacca. Last week, Walgreen promoted him to be executive vice president and president of Daily Living Products and Solutions, to oversee marketing and merchandising operations.

Walgreen said that Bryan Pugh, vice president of well experience deployment, will take on Magnacca's responsibilities on an interim basis.

Published on: February 8, 2013

I got the following email yesterday morning from MNB user Cheri Quast:

When I was reading your views section, I noticed that you posted comments that supported your disappointing comments about the Catholic Church. Maybe you got emails arguing against what you said and you chose not to post them which is of course your right but I wanted to email stating my feelings on your comments.

You like to brag about how you were educated by all these great Catholic institutions but I am sorry to tell you, either you were not taught very well or you forgot to what you were taught. The Catholic Church has always welcomed questioning and discussion but it also holds to the fundamental truths passed down by Jesus himself. These truths are found in the Bible so they were not made up men who just one day decided to make these rules. Jesus is the Word of God which means that he is the bible.

I mention this because homosexuality is discussed in the bible in several different passages and if you are interested to learn what the Catholic Church teaches on the homosexuality, read the Catechism. Just so you know it is not even close to what the media says it believes. Also Jesus knew several women yet he picked only men for the Apostles which go to show you that he wanted men for these positions. If you want to use the argument that was how women were treated back then and that is why Jesus only picked men because of it, then look in the bible. You will find many places where Jesus fought against the rules of the times so I would ask you then why did he chose to follow this rule while going against the others? They church has a very high regard for women and just because they do not ordain them does not mean that they hate them.

You think that the church does not welcome discussion or questioning then you need to look into some of the saints. An easy example would be St. Paul and the discussion he had with Peter and others about the circumcision of the Gentiles. Going by your comments, Peter would have just thrown Paul out because of his questioning of his authority but we know that is not what happened. In regard to Fr. Flannery, he was questioning the fundamental teachings passed down by Christ which the church cannot change. Knowing how the Catholic Church works, he was probably given warning after warning (probably several years’ worth) before they finally removed him from ministry because he kept teaching error to his congregation.

Now I am not excusing the whole pedophile scandal and I am definitely not saying that what they did was right. It was very wrong and it was a very dark time for the Catholic Church as a whole. You are right as a moral authority they were supposed to protect these children and they failed completely at that. With that being said, I would recommend not looking at what they did in the past but what they currently do to protect children. The old way of doing things is no longer the standard and new standards are put into place for the priests, volunteers, and especially for the children. I know this for a fact because I had to go through these trainings and have background checks done before I could work with children at my church. Many people like to use this incident in the church’s history as a way to take a cheap shot at a church that has been around for over 2000 years and has done a lot of good for the world (ex. hospitals, charities, education, etc.). The church has been making monumental efforts to change things when it comes to the abuse of children whereas other organizations such as the public school system still move teachers and officials to other schools/school districts when they are accused of abuse which is exactly what the Catholic Church once did. Tell me why you don’t hold those organizations to the same standards as the Catholic Church?

I need to be clear about something here. The Catholic Church came up because of what I thought was a legitimate business-related story, though I confess that I did take advantage of the opportunity to take a shot at what I view as corrupt organizational ethics. That said, I do not want to turn MNB into a forum where we are going to spend a lot of time discussing religion in general and Catholicism in particular. However, as Cheri Quast points out, I ran three emails yesterday that offered a hearty "Amen!" to my original comments, so I felt that since hers was the first email that I'd received that took issue with me, I ought to run it in the interest of fairness.

For now, the subject has been addressed ... until, of course, I decide to bring it up again. (Which I could do. Anytime. It all depends on my whims.)

Finally, a few quick responses to Cheri's email:

• I wasn't bragging about my educational background. I was stating fact, to put my comments in context.

• We will have to agree to disagree about many of the Church's official positions and its historical willingness to entertain debate and/or dissent. I'll call as my first witness Galileo.

• I would never argue that the Catholic Church has not done a lot of good work - educationally, socially, charitably.

• Finally, I do hold public schools - and virtually every other organization that deals with children - to the same standards that I hold the Catholic Church. I'm not sure why you assume that I do not.

I respect your faith. But I believe fervently that the religious organization in question ought to be there to serve the faith, and history suggests that the organization's leaders hold that the faith is there to serve their institutional needs.

Then again, I think that about most organizations, and most leaders. After all, leaders are people, and every organization is, by definition, created by people.

This is a business lesson, make no mistake. The minute you believe that the protection of the institution is more important than the preservation of the values that you are supposed to represent, then you have started going down a deep, dark hole.

Published on: February 8, 2013

I've spent more time than I should have over the past week or so watching "House of Cards," the new Netflix-only TV series that premiered last week. I watched the first episode with Mrs. Content Guy last weekend, and her reaction was that she really liked it ... and that we'd have to watch the additional 12 episodes over coming weeks.

I'm not ordinarily what one would call a "binge viewer," but that just wasn't good enough for me. I told her that I'd certainly watch "House of Cards" with her, but that I had a responsibility to MNB readers to watch the entire season ASAP. After all, I've been writing for months with great enthusiasm about the paradigm-changing approach taken by Netflix - creating for itself a differential advantage by getting into product production as well as product distribution, as well as offering the entire 13-episode series at once, so viewers could make their own decisions about how to consume it.

How could I address this issue without watching the whole series? And how could I take months to do so without violating MNB's basic value proposition?

At least, this was my argument at home. (Mrs. Content Guy is not really buying it; she's a little annoyed at me right now. Apparently, we've discovered yet another way that we are a mixed marriage....)

So, overt the past week or so, I've been stealing 30 minutes here, 60 minutes there, trying to watch the entire series .. and to be honest, I'm driven not just by my MNB responsibilities, but also by the fact that "House of Cards" is first-rate, can't-stop-watching entertainment with great writing and direction (from Beau Willimon and David Fincher, among others) and a terrific cast - if this were on HBO, it'd be the next "Sopranos."

At the core of its black heart, "House of Cards" is like the dark side of "The West Wing," a deeply cynical and mesmerizing look at how power is wielded in politics and government. If nobility and service were core values in Aaron Sorkin's "West Wing" universe, overriding and implacable ambition are central to "House of Cards" - not only does it suggest that power corrupts, but it suggests that this corruption is how and why our government works the way it does.

The driving protagonist is Kevin Spacey, as Rep. Francis Underwood (his initials are, advisedly, "F.U.") a Democratic Congressional leader who, in the first moments of the show, learns that he is not being nominated to be the next Secretary of State. This rejection serves to fuel every step he takes during the series - he yearns for power, and he is willing to do anything to achieve it.

And man, is he a walking, talking business lesson - in all sort of good and bad ways. Above all, he's a pragmatist: "It doesn't matter how it happened -- we can't make it unhappen," he says at one point. "Now we have to adapt."

In one of the series' most interesting conceits, Spacey draws the audience in, almost turning us into co-conspirators, as he occasionally breaks the fourth wall and tells us about his plans, his motivations, his thinking. Sometimes it is a soliloquy, sometimes it is just a look. But always, it is a technique that helps drive the narrative forward.

There are other strong performances: Robin Wright as Spacey's cool, inscrutable wife, who has her own agenda; Kate Mara as a political reporter with her own ambitions and a willingness to do almost anything to achieve them; and Corey Stoll as a Congressman with an addiction problem, who is just a pawn in the political chess game being played by Underwood.

I cannot rave about "House of Cards" enough. If you have Netflix's streaming service, you should watch it. And if you don't have Netflix, you should sign up now. (Which is exactly what Netflix hopes that people will say, and why it is investing hundreds of millions of dollars in original productions).

"House of Cards" is a home run. I can't wait to watch it again with Mrs. Content Guy, and can't wait until season two, which already has been promised.




I have just one other thing to say before signing off. As I write these words, I am staring out the kitchen window. Snow is falling, and the forecasts are all for a "historic storm."

I'm really getting tired of "historic storms." These days, it seems like they're happening every six months.



That's it for this week. Have a great weekend, and I'll see you Monday from Las Vegas.

(I hope.)

Slàinte!