business news in context, analysis with attitude

Published on: June 7, 2013

This normally would be the stuff of fiction.

But this weekend, the Associated Press reports, "some of the world’s most powerful people are gathering near London for a shadowy annual gathering that has attained legendary status for anticapitalist protesters and conspiracy theorists."

Included on the guest list: former US Secretary of State Henry Kissinger, International Monetary Fund chief Christine Lagarde, Amazon founder/CEO Jeff Bezos, and Google chairman Eric Schmidt.

They will meet, the story says, at the annual confab "for prominent politicians, thinkers and business leaders" that "has been held since 1954 in either Europe or North America. No minutes are taken, there is no media access and the public is kept away by a large security operation."

It is not secret enough, apparently, since the AP is writing about it and protestors intend to get as close to Watford’s Grove Hotel as security will let them.

I imagine the group has a name. Like Spectre. Or Quantum. Or something similarly sinister. (The Trilateral Commission?)

One can only hope.

Published on: June 7, 2013

The Seattle Times reports that two wheat farms in Oregon have filed suit against Monsanto, charging that their businesses have been harmed by the discovery in the state of a field of genetically modified wheat from seeds that Monsanto developed and supposedly discontinued almost a decade ago. At the same time, the Center for Food Safety has filed a similar suit. It is possible that one or both of the suits could achieve class action status.

The suits essentially say that farms in the state will lose business because of the discovery. Japan already has stopped importing wheat from the US because of fears that it could be genetically modified.

Monsanto says the suits are baseless and continues to deny any culpability in the case.

“While we have not yet had the opportunity to review the lawsuit,” said Monsanto Chief Litigation Counsel Kyle McClain in a prepared statement, “plaintiff’s filing suit now is premature since the facts to date show the report of [Roundup]-tolerant wheat is limited to one field in Oregon, and no such wheat has entered the stream of commerce.

“USDA has said the wheat crop is safe, [the Food and Drug Administration] confirmed food and feed safety in 2004, and USDA has stated repeatedly that there is no indication that glyphosate-tolerant wheat has entered commerce.”

Published on: June 7, 2013

The Sacramento Bee reports that California supermarket chain Raley's has reported "that a portion of its computer network systems may have been the target of a 'complex, criminal cyberattack'."

The company has ordered an immediate internal investigation, but said that "at this time, the company has not confirmed any unauthorized access to payment card data, but its investigation remains ongoing ... Raley's does not believe that debit PINs could have been accessed." and said that it does not collect drivers license or Social Security numbers. However, the company recommended that customers double-check their personal accounts and report anything out of the ordinary.

Published on: June 7, 2013

The New York Times reports on how Walgreen "is building an experimental 'net zero energy store' just north of Chicago that it hopes will produce more energy than it consumes ... Alternative energy equipment at the store under construction in Evanston, Ill., includes more than 800 solar panels on the roof, two 35-foot wind turbines and a geothermal energy system dug hundreds of feet beneath the store’s foundation.

"Walgreen building planners and engineers estimate the net zero store will use about 200,000 kilowatt-hours of electricity over a year’s time while generating about 256,000 kilowatt-hours during the same period."

The story notes that "the net zero concept is part of the retail giant’s overall sustainability plan to reduce energy use by 20 percent by 2020 across all of its more than 8,000 stores, including Duane Reade stores in the New York area."

While the company is not specific about the financials, expectations are that it will cost twice as much to build the new store as a normal unit, but that "executives expect to recoup the extra costs from reductions in the store’s energy use, tax credits and rebates from utility companies."

Published on: June 7, 2013

• Reuters reports that Walmart is saying that it "has no immediate plans to expand its U.S. online grocery delivery beyond a test in California because it is not yet convinced there is sufficient demand.

"We are not making any announcements about other markets for grocery delivery in the U.S. right now," Neil Ashe, the president and chief executive officer of Walmart Global eCommerce, told reporters on Thursday afternoon.

Walmart has been testing online grocery ordering and delivery in Northern California. The statement from Ashe comes as Amazon has begun rolling out its Amazon Fresh service - this week in Los Angeles, with San Francisco scheduled to see it later this year.

"We'll have to wait and see whether the customer wants it," Ashe said.


• The Los Angeles Times reports that a new report released by Democratic Congressional staffers suggests that "Walmart wages are so low they force many of its employees onto the public doles, creating a drag on taxpayers and the economy ... The report analyzes data from Wisconsin’s Medicaid program, estimating that a single 300-person, Wal-Mart Supercenter store in that state likely costs taxpayers at least $904,542 per year and could cost up to $1,744,590 per year, or roughly $5,815 per employee."

The report, an update of a 2004 study, uses Wisconsin data because it is believed to be the most up-to-date, and "released Medicaid enrollment by employer as of the fourth quarter of 2012.
Wal-Mart was first on the list with 3,216 employees enrolled in BadgerCare, the state’s Medicaid program.  Including the children and dependents of these employees, Wal-Mart accounts for 9,207.

"The report assumes that about a quarter of the store’s employees enroll in other taxpayer-funded programs, including Section 8 housing, National School Lunch programs, the Earned Income tax credit and others."

Walmart has rebutted the study, saying the conclusions are "flawed" and "vast generalizations."

Published on: June 7, 2013

• Bloomberg Businessweek reports that Tesco CEO Philip Clarke has "promised to step up an overhaul of the grocer’s U.K. non-food business to fix a part of the company that caused first-quarter sales to miss estimates.

"About a third of the space dedicated to underperforming general-merchandise items such as televisions will be replaced by stronger-selling products including dinner plates, clothes and stationery, Clarke said today on a conference call. A new non-food range will be introduced in 850 hypermarkets and superstores, he said, without being more specific."

Published on: June 7, 2013

You need to check out this terrific piece in Crain's Detroit Business about an independent grocer operating in the shadow of that city's new Whole Foods ... and glad to have the new competition.

You can read the piece here.

Published on: June 7, 2013

Yesterday, I referred to "a new Anderson Forecast from the University of Southern California (UCLA).

Oy.

I received an enormous number of emails from folks complaining, quite rightfully, that the University of Southern California is USC, and that UCLA is the University of California at Los Angeles.

Which I knew. And as soon as I saw the emails, I fixed it.

Mea culpa, mea culpa, mea maxima culpa...

Can I blame the mistake on a NyQuil haze?

Published on: June 7, 2013

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

• There is a story making the rounds about how Whole Foods suspended two employees in one of its New Mexico stores for allegedly speaking Spanish to each other while on the job, which was said to be against company policy.

However, Whole Foods is challenging the story, saying that the workers were suspended not for speaking Spanish to each other, but for being disrespectful when called into the office for a meeting with their manager. The employees misunderstood the meaning of the suspensions, Whole Foods says.

Here's the question I would ask. When these two employees were speaking to each other, should they actually have been talking to a customer? Because there's nothing more annoying to a customer than having employees chatting each other - in any language - when they should be engaged with the shopper.


• The Business Courier reports that Kroger is expanding its Ruler Foods concept, described as "small, discount grocery stores that mainly carry its in-house brands." The 18th store in the chain opened this week, the story says, and while Kroger officially says that it remains a "test concept," outside sources say that the retailer is actively looking for possible locations.


• MarketWatch reports that PepsiCo is in negotiations to buy SodaStream, an Israeli company that manufacturers machines that turn tap water into carbonated beverages, for $2 billion. However, SodaStream is expected to "entertain other options" before making any deal.

Why do I have a feeling that Pepsi's plan to drop every SodaSteam on the planet, not to mention the plans, into a deep, dark hole where nobody will ever find them? or, just maybe, Pepsi is entertaining the idea for a whole new business model...?


• Reuters reports that Mondelez International's Cadbury division "is close to introducing heat-resistant chocolate it can sell in Africa and other hot regions of the world." While no details have been given, the chocolate is said to be able to withstand heat as high as 104 degrees Fahrenheit.

As much as a decade has been spent developing the product. The company did not give a date when the new chocolate could be rolled out.

Published on: June 7, 2013

• The Wall Street Journal that AG Lafley, the former CEO of Procter & Gamble who recently returned to the job, has named "four senior executives to run major business units and report directly to him, effectively identifying some of the people in the running to succeed him at the helm of the consumer-products giant.

"Two other executives also will now report to Mr. Lafley in addition to two vice chairmen," the story says.

Here's how the story describes the new roles:

"The company said Martin Riant would oversee global baby, feminine and family care, which includes paper-based products like Pampers diapers, Charmin toilet paper and Tampax tampons.

"Deborah Henretta was named group president of global beauty, which includes Pantene shampoo, Olay skin creams, and P&G's prestige business, which sells luxury fragrances and SK-II skin-care products.

"David Taylor was named group president of global health and grooming, which includes Crest toothpaste and Gillette razors. He will also oversee P&G's pet-care business, which includes Iams pet food.

"Giovanni Ciserani will be group president of global fabric and home care with responsibility for products like Tide laundry detergent and Swiffer mops.

"Melanie Healey, who has been head of P&G's operations in North America since late 2009, will also report to Mr. Lafley in addition to Werner Geissler, the company's vice chairman overseeing global operations. Ms. Healey previously reported only to Mr. Geissler and P&G said the change 'reflects the size and impact' of North America, which accounts for roughly 40% of its total sales.

"Dimitri Panayotopoulos, who previously oversaw the global business units, will remain a vice chairman and will become an adviser to Mr. Lafley."

Published on: June 7, 2013

• Esther Williams, a championship swimmer and accomplished diver who saw her talents parlayed into a successful Hollywood movie career in the 1940s and ’50s, when she appeared in a series what were called "aquatic musicals," has passed away. She was 91.

Published on: June 7, 2013

Still under the weather here, but the email system is finally up and working, so let me try to get through a few of them...

Regarding the Cheerios commercial that showed a bi-racial family and managed to elicit racist comments from some ignorant bottom feeders around the country (yes, but tell us how you really feel, Kevin...), one MNB user wrote:

Thank you, Kevin, for your comments dealing with the delightful Cheerios ad. Started out my day on a great note. Would that you reached those who instead are tuned to Fox News this morning.

MNB user Ken Wagar wrote:

Thanks for bringing the Cheerio’s commercial to those of us that had not seen it.

The racist reactions are simply inexcusable in this day and age even though we know it exists.
Your comments and reaction were right on!

MNB user Glenn J. Rosati wrote:

My wife and I dealt with a similar situation years ago albeit that in our case we are not a bi-racial couple but that we adopted a special needs child.  Our daughter was 100% Native American and there was no mistaking it with her complexion, facial features and hair.  My wife is blonde and blue eyed, and I am fair skinned, so when we were out with our daughter people would do double takes between her and us.  Sometimes there were just long outright stares.  Apparently, a mixed race family was not something many people could handle or wanted to see.

Some adults were politely inquisitive while others were seen to be shaking their heads.  When my mother-in-law’s now ex-fiancé mentioned off handedly in front of us that he felt bi-racial marriages and families should not be allowed that hurt more than all the double takes and stares we ever received.

What struck me then and still does today is that never once did a child stare or question the fact that we were her parents.  I think that to the children it was just natural that we were a family.

As my wife reminds me from time to time when we see similar instances, and as sung in "South Pacific," people have to be taught to hate.  Maybe what we all need to do is to spend some more time in touch with our innocent childhood memories and feelings and a lot less time being judgmental adults.

MNB user Don Goodwin wrote:

As a Caucasian father of an adopted daughter who is from Latin America, I have experience as to the bigotry that still exists in our world. It is amazing that we still have to have this discussion.

Thanks for covering the story.  I, too, plan to buy an extra box of Cheerios!

And from another reader:

I really loved what you said about the Cheerios commercial yesterday, and your timing was impeccable, as always. I had not seen the commercial, but was getting breakfast for my kids yesterday while the Today show was on in the other room. I saw something about Cheerios out of the corner of my eye, so when my 8 year old daughter came in I asked her why that commercial was on the news. She said they were saying it was bad. I asked her why, and she said she wasn't sure, she guessed because maybe it was too sad for kids because the girl's daddy was sick and she had to put Cheerios on his heart. I figured that wasn't it but was too busy to investigate further, and didn't find out the real story until I caught up with Morning NewsBeat. It made my heart proud that my daughter didn't even blink that the mommy was white and the daddy was black. (maybe even a little more prouder because we chose to move to a rural area in the South to raise our kids, and I've always been a little worried that they're not in a very diverse setting to grow up.) I thought I would write you, because maybe it's a glimmer of hope that what you said is true, Saatchi & Saatchi and General Mills are advertising to the America that is. A few idiots that still remain, but hopefully their numbers are shrinking.




Regarding the expanding marketing and usage of wet disposable wipes by men instead of toilet paper, which we wrote about yesterday, one MNB user wrote:

Is this an April Fools type prank? Or are you just trying to see if we are reading your stuff?

From another reader:

I had to laugh when I read this today….only because I met a guy that used wet wipes instead of toilet paper and thought he was crazy. I thought maybe it was because he was a single father of a young 7-year old. I think retailers need to make sure that the product packaging clearly states the disposal instructions – since most just say “dispose of properly.” Well if it doesn’t say it is flushable then how to people know how to properly dispose of them. Thanks for the laugh – I may just have to ask my guy friends their opinion on this matter in the future.

From yet another reader, who asked to be described as "clean as a whistle":

About 14 years ago, when I had my son I realized wipes were the way to go, we started with baby wipes and evolved to "personal" wipes.

Over the years since then I have always had wipes available in every bathroom, used by the whole family.

My son is off for a week in Washington DC with his 8th grade class and I asked him if he wanted me to pack wipes and he said YES.

To sum up my opinion on wipes, a former co-worker once said, imagine you got a little poop on your arm, what would you want to wipe it off with, toilet paper or a wipe??

You should give them a try!

And another:

After reading today’s MNB I have  a question…what’s the difference between tushy wipes for men and something already in production like Charmin wipes or some other brand (I thought they were for everyone) that may be more cost-effective?  Is there something about the male anatomy I may have missed?

MNB user Matt Mroczek wrote:

Your skepticism about butt wipes takes Farts Law to a whole new level.

On a more serious note, butt wipes could be similar to power windows and text messaging:  They seemed so unnecessary until you actually used them for a while; then there was no going back.  Maybe TMI, but my dad started using butt wipes before text messaging (I, however, stick with dry paper purely for economy).

Yes, that would fall into the category of TMI.

And for the uninitiated, Fart's Law says that the likelihood of something succeeding usually runs in direct proportion to the number of old farts who say that it will never work.

And from still another reader:

Too Funny…that cracks me up! I think that care should always be taken in using the terms wet wipes and gaining traction in the same sentence when discussing the cleansing of one’s fundamental orifice. Perhaps that only works when the reference is Howard Stern. But seriously, I don’t think that as you suggest, that these guys are nuts….they just want them clean! I could go on, but I do wonder how many adult males in the U.S. are married, and of that percent, how many buy the toilet paper in their household? So at the end of the day, or after a shower and shave, the way you clean you bum is probably up to the woman in your life….just like everything else.

MNB user Rich Heiland wrote:

OK, I admit up front to being an old fart. As a kid my grandfather's barn had a privy with the cheapest toilet paper around. So, using a "wet wipe" is something that never occurred to me and I frankly had not heard of that possible use until I read this morning's NewsBeat. Is this just a part of what seems to me to be almost a paranoia over germs? Going back to my days in the barn of shoveling crap, grooming my horses, hauling hay and hardly ever washing my hands I wonder how I ever survived? Not to mention, these things are wet. So, you use them and your rear end is.....wet? Do you then use toilet paper anyway as a drying step? Do we start to demand toilets with some kind of Dyson dryer built into them? I guess it's hard to ague when 51 percent of the market says it wants something. Maybe it's a natural evolution from the corn cob and leafs to the Sears Catalog pages to two-ply to four-ply but I think my evolutionary journey most likely is at an end in this case.

Getting extra credit for a movie reference is MNB reader Mike Overschmidt:

You just made me LOL recalling the campfire scene from Blazing Saddles.




Finally, some comments about my obituary earlier this week for John Lightfoot.

MNB user Paul McGillivray wrote:

I appreciated your comments on John today.  I certainly did not know him well, but appreciated  the personal opportunity he gave me early in my career, in the late 80’s, when he invited me to speak to a group of Eastern European retailers that he had organized in Warsaw, Poland.  It was just after the fall of the Berlin Wall and a fascinating time to be in that part of the world, which I’m sure I would never have done on my own.  From your letter I get the sense he was very supportive of young people in their careers and he certainly touched mine in a way I will always remember.

MNB reader Glen Mealman wrote:

John was a special friend.  We first met when he helped me judge contests in retail stores.  He was never above doing the little things that allowed him to share with the industry the latest and best ideas.  Later we traveled to Europe to see the hypermarts and Aldi type stores.  With his help I was able to work with Sam Walton as he developed their first super stores.  John along with Gene Hoffman, our competitor from Supervalu, shared so many ideas.   We became personal friends and have stayed in touch during his illness and yes he did have pride in your work.  He was a special person that loved the business.

And finally, from Bill Lightfoot, John's son:

Just wanted to say how much we appreciated your post today. You have done a great job capturing dad...he was quite something - stubborn as a mule, opinionated, possessed with a 'barb wire' personality, and a great sense of humor. Dad was dad, and sometimes we don't know the value of the exchanges we have with people like him until he has passed.

Again, thanks - it touched us deeply.

It was my pleasure.

Published on: June 7, 2013

will return next week.

I promise.

Have a good weekend.

Slàinte!