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    Published on: February 26, 2016

    by Kevin Coupe

    The digital economy has claimed two more victims, in this case magazines that have been around for decades.

    The Wall Street Journal reports that after 40 years, Soldier of Fortune magazine is shutting down its print edition and is transitioning entirely to an online version.

    According to the story, "Aging readership - the magazine is largely read by Vietnam vets - and changes to the business of freelance warfare, had taken their toll on circulation and the number of ad pages." At its height, Soldier of Fortune had a staff of 50 and sold 150,000 copies a month; it no longer discloses sales numbers.

    Meanwhile, Advertising Age reports that More magazine, the self-described "magazine for style and substance" since 1997, is shutting down.

    Owner Meredith Corp. blamed the decision on "advertising challenges in the luxury marketplace," as well as a drop in circulation numbers, and said that will invest instead in "more profitable activities."

    Being a product of print journalism - both newspapers and magazines - I have some understanding of the challenges facing the old world order. I think it is entirely possible for such enterprises to find their way through the challenges of a digital economy; I'm constantly amazed by how The New Yorker, for example, has adapted ... with expanded online coverage as well as podcasts, video offerings and even live events that, in its own way, looks to create a kinds of New Yorker ecosystem.

    (I got an email the other day from someone who said that he was surprised to learn that The New Yorker was still being published. He clearly wasn't paying attention, because I refer to the magazine a lot here on MNB, and continue to believe that it may be the best general interest magazine being published today. In the interest of full disclosure, I should point out that 30 years ago I spent a bit of time doing public relations for The New Yorker, and had my copy edited by the legendary William Shawn. I must confess, however, that I have no idea where he would've come down on the one space/two spaces controversy.)

    Like retail entities, print publications can adapt ... or will die. By adapting, I don't mean just creating online versions of what they've traditionally done. I think one has to rethink the entire approach to content when moving online, and find ways to differentiate yourself instead of doing the same old thing.

    Clearly, Soldier of Fortune and More didn't really figure this out. It is an Eye-Opener.
    KC's View:

    Published on: February 26, 2016

    The Associated Press reports that federal officials "are preparing to enforce an 86-year-old ban on importing goods made by children or slaves under new provisions of a law signed by President Barack Obama. There are more that 350 items that are covered under the law, including fish and shrimp from Thailand and peanuts from Turkey.

    According to the story, "The Tariff Act of 1930, which gave Customs and Border Protection the authority to seize shipments where forced labor was suspected and block further imports, was last used in 2000, and has been used only 39 times all together largely because of two words: "consumptive demand" — if there was not sufficient supply to meet domestic demand, imports were allowed regardless of how they were produced. The Trade Facilitation and Trade Enforcement Act signed by Obama on Wednesday eliminated that language, allowing stiffer enforcement."
    KC's View:
    It is a shame that it took us 85 years to get to this point. But better late than never, I suppose.

    Published on: February 26, 2016

    The Dallas Morning News reports that Walmart is opening 200 academies around the country "with dedicated teaching staffs and students commuting from its nearby Supercenters and Neighborhood Markets ... The students are Wal-Mart’s department and assistant store managers who operate its 4,600 U.S. stores. The goal is for all of the academies to be open by the end of 2017 and for 140,000 employees to go through the program each year."

    The story goes on to note that the effort is meant to address Walmart's persistently low customer service rankings, and "is part of Wal-Mart CEO Doug McMillon’s plan to improve customer service by paying people more and offering them better training. Wal-Mart said last year, it’s spending an additional $2.7 billion over two years on hourly raises, improved benefits and training."

    Walmart said this week that it is laying off 100 headquarters employees, all from its "information systems department, part of the retailer’s recently created Walmart Technology group, which merged staff that works on the company’s website and store technology staff."

    Walmart laid off 450 headquarters people last fall, and another 150 Sam's Club employees in January.
    KC's View:
    A window opens even as another closes.

    Here's the deal. Walmart has to focus on the things that are customer-facing, and look for ways to improve the shopping experience in as many ways as possible. Because this costs money, they have to find efficiencies wherever it can.

    For example, Fortune reports that Walmart, anxious to improve the laggard position that Sam's Club traditionally has occupied compared to Costco, "is making major changes to its business model, putting a much bigger focus on improving store food brands, opening new Sam’s Club locations in higher income zip codes, and giving regional buyers more say in what the retailer sells, particularly as it pertains to gourmet and natural foods."

    Sam's Club CEO Rosalind Brewer describes the strategy as "absolutely a reset for our business." Which is what every retail business has to do, on an ongoing basis.

    Published on: February 26, 2016

    We reported earlier this week on how UK retailer Tesco has stopped selling croissants in their traditional curved shape, and now is only selling a straight version that it says will easier for Brits to spread jam on."

    That decision created a lot of social media buzz, and now The New Yorker has weighed in with an excellent piece that puts the so-called controversy into context, drawing inspiration from the likes of Umberto Eco and PG Wodehouse and suggesting that how the decision by an English company reflects a broader British antipathy towards France.

    The story is very clever, extremely well-written (as one expects from The New Yorker), and can be read here.
    KC's View:

    Published on: February 26, 2016

    • Grocery delivery service Instacart said this week that it is now delivering alcohol in the Boston market by partnering with a liquor store called Vinodivino, describing it as "a natural vertical for us to be in."

    According to the Boston Globe, "The delivery service will be joining a market space that local alcohol delivery companies like Drizly, Buttery, and Drync already occupy. Boston will become the sixth city where Instacart has rolled out alcohol delivery; customers in Chicago, Los Angeles, Austin, San Francisco, and Miami can already get booze delivered using the app."

    The story notes that Vinodivino is not prevented from working with other delivery apps, and will launch with Drizly in the near future.
    KC's View:

    Published on: February 26, 2016

    Reuters reports that Sears Holdings CEO Eddie Lampert is saying that his company's inability to compete in the marketplace and virtual hemorrhaging of market share is at least in part "because of moves to increase the minimum wage and different tax rules for online retailers like Amazon ... In an annual letter to shareholders, Lampert described a U.S. operating environment stacked in some ways against traditional companies like once-iconic Sears, which has lost more than $8 billion over the past five years, all under his watch."
    KC's View:
    Lampert forgot to blame the weather. And the dog that ate his homework.

    I'm not saying that the marketplace is not a challenging one, and that an increased minimum wage and some tax laws don't create issues. But if he actually were able to stock attractive merchandise and get customers into stores that are not anachronistic, maybe the other problems would be of lesser consequence.

    Published on: February 26, 2016

    Reuters reports that Amazon said yesterday that it will support Apple's efforts to fight legal efforts by the FBI to force it to develop software that would allow law enforcement officials to hack into an iPhone used by one of the terrorists responsible for the San Bernardino mass shootings.

    The FBI position - so far backed by the courts, but under appeal by Apple - is that it should be able to command technology companies to help it with investigations related to national security. Apple's position is that it is inappropriate for the government to force it to develop such a "back door" hack, and that such a tool would violate its customers' privacy and would be misused by other governmental agencies once it exists.

    Also supporting the Apple position are technology companies Google and Microsoft.
    KC's View:
    This is a tough one. It is entirely possible to be sympathetic to both sides even if one believes in one side's position over the other. I tend to be more supportive of Apple, and that feeling has been buttressed by the fact that there have been news reports about other prosecutors and agencies lining up to use the back-door tool once it is developed, which is exactly what Apple has been saying would happen.

    Published on: February 26, 2016

    • Sprouts Farmers Market announced the hiring of Brad Lukow, the former CFO at Canada's Shoppers Drug Mart, to be its new chief financial officer.
    KC's View:

    Published on: February 26, 2016

    Got the following email from an MNB reader who took exception to the way I wrote about McDonald's:

    I'm in the retail food industry for many years, so I'm always interested in new programs. So many retail formats are on the down side of growth, but one of the best performers in QSR is MickyD, I don't patronize the chain but respect the operation. Obvious you don't respect all good operators.

    I'd like to think we can disagree on what makes a good operator. I think it is entirely fair to say that McDonald's has developed an impressive international machine for the making of fast food and delivering it at a cheap price. And that can be a pretty enticing model ... I was stuck at O'Hare the other day for about 10 hours, and it took all my will power to resist the McDonald's in the terminal. (I knew I would like it while eating it, and then would hate myself afterwards.)

    But I think that quality of food is at least as important as scale. When I pick on McDonald's, it is from that perspective.

    Got a number of emails about the discovery that some grated parmesan cheese includes wood pulp as a filler.

    MNB user Liz McMann wrote:

    Wow.  Wood pulp in our parmesan. What year is this?

    For anyone who is wondering if consumer food co-ops are still relevant in this highly competitive grocery industry, the answer is yes.  The same fraudulent and deceitful food practices that led to the start of the first (successful) consumer food co-op in 1844 are still happening. When the grocery store is owned by the shoppers, you get transparency and trust, along with great food.

    MNB user Kevin C. Lavin wrote:

    As a Food Broker for the last 35 years, I have seen a number of mislabeled and adulterated products.

    Inexpensive pear juice added to apple essence and labeled 100% Apple Juice.  Lemon juice with citric acid and water added making it imitation lemon juice but labeled as 100% reconstituted lemon juice.  Ketchup labeled as fancy grade when in fact the solids indicated standard or extra standard grade.  And the list goes on.

    It is difficult to compete when competitors do this and many retailers do not want to hear about it because they like the price.  The government is also very slow to act on any information.

    And MNB user Chuck Jolley wrote:

    Reminds me of a large end cap display I saw at a major supermarket chain.  Boxes and boxes of “Blueberry muffin mix” and on the back in the prep instructions was “Just add your own blueberries.”

    Got a nice note from MNB reader Monte Stowell about Michael Sansolo's column about the unique collegiality between US Supreme Court Associate Justices Antonin Scalia and Ruth Bader Ginsburg:

    Perhaps one of the best columns I have read in a long time. I was quite humbled when I had read about how Justice Ruth Bader Ginsberg felt about her colleague Antonin Scalia. I have sent Michael’s column to many of my friends and family for a lesson to be learned from how we can all learn and be better people. Listening is probably the best life learned skills we can have as a person. 

    In criticizing a new study by the Corn Refiners Association that suggests enormous costs to consumers if Vermont's GMO labeling law takes effect, I suggested that "if manufacturer 'A' changed the formulation of its products to eliminate GMOs and sales dropped, causing the stock price to go down, you can be damned sure that the executive team would figure out a way to bring prices down and revive sales, because their jobs - and high-value benefits packages - would depend on it."

    To which one MNB user responded:

    It's always been fascinating to marvel at how you've been able to sustain a successful newsletter while continually voicing so much contempt for many of its readers.

    I think the real problem is that some people cannot tell the difference between contempt and healthy irreverence and legitimate skepticism. If people want obsequiousness and reverence, there are plenty of other choices.

    On the other hand, I'm just glad this fellow considers MNB to be successful...
    KC's View:

    Published on: February 26, 2016

    We've always been pretty lucky with our dogs.

    Our first dog, which Mrs. Content Guy gave me long before she was Mrs. Content Guy, was a present for my birthday in 1980. I was 26. It was a memorable day for lots of reasons. Ronald Reagan was elected president that day. My then-girlfriend gave me a watch (a Seiko that I still own and wear), and a golden retriever-lab mix that we called Kipling.

    Kipling was a sweetheart of a dog. About a year after we got her, she was hit by a car and ended up losing one of her front legs. Somehow, it only made her sweeter, and she lived a long time - amazingly mobile and agile for a three-legged dog - and was a member of the family in that way that only a great dog can be.

    We currently have two dogs at home. One, a purebred yellow lab, is Buffett ... she's more than 11 years old now, and as I write this, she's curled up around the base of my chair, snoring lightly and occasionally having a dream in which her legs start to move faster and faster, just like a puppy's. (I can relate.) One of her unusual qualities is that she hates water, and doesn't even like to go out in the rain - even though that's one of the things for which labs are bred. Her idea of a big evening is a good meal, and then to sleep in front of the fire. A dog after my own heart.

    Our other canine in residence is Parker, who is my son Brian's dog. (The dog's name tells you I raised Brian right.) Parker is a rescue dog, part yellow lab and maybe part beagle and probably something else; no matter how much we love her, there always will be something unknown in her past that makes her just a little bit suspicious of the world around her, but she's a good girl, full of energy and just a little bit rambunctious. She adores Buffett, and while I suspect Buffett would never admit it, she loves Parker.

    I tell you all this for a reason beyond the fact that I tend to get sentimental about our dogs.

    We had another dog who played a big part in our lives - a black lab named Fan.

    Fan was very special, because she came to us as a puppy from a wonderful organization called Guiding Eyes for the Blind. We volunteered to raise her, to get her used to the world, and to get her ready for what eventually would be more rigorous training as a seeing eye dog. To be honest, we were a little surprised when she made the cut; despite all of our best efforts (and I give Mrs. Content Guy all the credit here), Fan was always a little bit undisciplined, a little resistant to being boxed in. Again, a dog after my own heart. But when after 18 months it was time for her to be tested, Fan passed with flying colors. It was as if she knew that line from the Bible, about there being a time to put away the things of youth.

    Fan went off to training, and eventually was assigned to a young blind woman, who wrote us a couple of letters over the years. I remember one of the letters telling us of a very specific incident in which Fan saved her life. It was years after Fan had lived with us, but we were proud. That's our girl.

    As pretty much always happens with guiding eye dogs, there came a time when Fan burned out, and she was retired, and sent to live with another family. We never trained another Guiding Eyes dog in the same way, though a number of times we've brought in puppies for days at a time to "socialize" them. But giving up Fan after 18 months was hard on the family, almost as hard as when Kipling died, and it seemed easier on everybody not to make the longer commitment. Whenever we'd have those puppies, though, we'd think of Fan.

    Got a call this week from Guiding Eyes. They just wanted us to know that after a long and happy and very, very useful life, Fan had passed away.

    When I heard the message, I surprised myself. I cried a little bit. Because she wasn't just a dog after my own heart, but even after all these years, like Kipling and Buffett and Parker, she was a special dog who was in my heart.

    I just wanted to tell you about her.

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


    KC's View: