business news in context, analysis with attitude

Published on: July 19, 2016

by Michael Sansolo

When Serena Williams recently won yet another Wimbledon Championship it probably got almost none of you thinking about the parallels with modern business challenges. But it should have. In many ways, Williams represents a reality we all face.

Competition somehow only manages to get tougher.

in the Washington Post, sports columnist Sally Jenkins interviewed tennis legends Chris Evert and Billie Jean King about Williams, and through those interviews we see how technology and competitive realities continually alter the status quo. Specifically, their insights provide a stark reminder that what once was good enough to win championships, may today (and certainly tomorrow) be barely sufficient to compete. Again, the parallels to modern business challenges are clear.

Start with technological change. Evert and King both talked about how the game they dominated at various points has evolved thanks to technology. Any reader above a certain age can remember a time when tennis racquets had a hitting area that is fraction of today’s racquets.

Modern racquets enable Williams to hit regular (non-serve) shots at 70 to 95 miles an hour, three times the speed that Evert said many shots were hit in her era. What’s more, even the playing surface has changed, which also alters the game. King said she tailored her entire game at Wimbledon around the reality that the grass courts were inconsistent.

The technological changes for the retail food business are equally dramatic. Operating today without social media or ignoring the realities of e-commerce would be just as ineffective as using a 40-year-old wooden racquet in today’s game. You simply cannot compete without recognizing the impact of how technology is changing the game.

And that means constantly challenging yourself to understand how emerging technologies will shift whatever comes next. You and I might have no idea why so many millions of people have overnight embraced Pokémon Go, but it is certainly something we cannot ignore.

If that’s what delights and enthralls consumers, we need to understand why and determine if it matters to us.

But competing in the modern era also means taking your own game to a new level. Another wonderful lesson came when Chris Evert talked about how conditioning has completely changed the athleticism of her sport.

Evert recalled how she and long-time rival Martina Navratilova “would practice for the final and then have lunch together and travel to the next tournament. We practiced for two hours on the court and did nothing else."

It was only after watching Olympians train that both women recognized the need to improve their training and fitness. Tennis fans from that era will recall the physical transformation both Evert and Navratilova made as they raised their fitness and the level of their games and then dominated their sport.

What Evert learned is something all businesses must face. You need to benchmark yourself against a far wider range of competitors than ever - not just those you see across the net.

In today’s climate, you compete against every channel and at times against businesses you never considered a foe. Today’s shopper is expecting you to raise the level of your game to equal whatever they experience, whether it’s on Amazon, at the Apple store, CarMax, Victoria’s Secret, Southwest Airlines and more.

Whatever was once good enough for you and your customers simply isn’t enough today. You’ve got to find a way to be even better.

And like Evert you have to be honest with yourself.

Asked how well she would have fared against Williams if somehow all things could be equal, Evert said, “I would have a much better chance in our day with her using a wood racket than I would in this era. No matter how great I could have been in this era, I think (Williams) would just overpower me.”

Compete, we like to say, is a verb. The competition is a moving target.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.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.

Published on: July 19, 2016

by Kevin Coupe

As disruptive as Uber and Lyft have been to the traditional taxi business, providing application-based transportation networks to consumers who theoretically are able to exercise greater control over the experience, there's no question that sometimes they get negative publicity when passengers have been endangered by drivers of questionable rectitude. (I'm putting this as generously as I can.)

What this means is the disruptors may be ripe for disruption.

The Los Angeles Times the other day had a story about a new startup called See Jane Go that is designed to address perceived weaknesses in the Uber/Lyft businesses.

"The ride-hailing company, headed Kimberly Toonen, a former Apple and Cox Communications employee, plans to offer an alternative to Uber, Lyft and taxis by catering specifically to women who don’t feel comfortable getting into a car with a male stranger," the Times writes. "In Boston, a similar ride-hailing start-up, Safeher, also plans to launch later this year with a fleet of women drivers."

And they aren't the only companies seeing opportunity.

The Times reports that "the companies are among a number of start-ups popping up to serve customers that they believe the Ubers and Lyfts of the world are leaving behind: senior citizens, children and, increasingly, women. In L.A., HopSkipDrive has spent the past year signing up drivers with childcare experience to give rides to minors (Uber and Lyft don’t allow minors to ride alone). In the Bay Area, Zum offers on-demand transportation for kids, and throws in babysitting services too."

Now, success isn't as easy as just creating an alternative, even disruptive, business model. Uber and Lyft have considerable head starts, though, to be fair, only 15 percent of US consumers have used ride sharing services, so there remains considerable upside.

There also is a potential legal issue: "Another potential hurdle the companies face is claims of gender discrimination from men who might want to drive for the service (both See Jane Go and Safeher have features in place for men who want to ride with the service – the former will connect the customer with a third party ride-hailing company, the latter said it will transport men, but the app for male users will have different features than the women’s version. The company did not detail what these features will be)."

But the larger lesson, I think, is that disruption never ends ... and that the fissures created by disruptive companies often create cracks and even opportunities of their own.

It's an Eye-Opener.

Published on: July 19, 2016

Bloomberg reports that Walmart has begun the process of carrying through on its threat to stop accepting Visa cards in its Canadian stores unless the credit card company lowers its transaction fees. The first step - stop accepting Visa at three Walmart stores in Thunder Bay, described as "a port city of about 120,000 people on the northern shore of Lake Superior."

Walmart's strategy appears to be pushing Visa as far as it can before the credit card company blinks, which to this point, Visa hasn't done; the company says that it "remains committed to doing everything reasonable to ensure Canadians can use their Visa cards everywhere they wish to shop -- including at Wal-Mart stores,” though it hasn't yet lowered its fees.

The story notes that "Canada has emerged as an arena for early skirmishes between big retailers and payments networks over fees. In September 2014, Costco Wholesale Corp. told customers it would stop accepting American Express Co. cards at its Canadian stores the following year and switch to Mastercard. Five months later, AmEx and Costco announced they planned to end their exclusive U.S. relationship, as well."

Walmart has said that it has not yet "set a timetable" for when it will extend its strategy to other Canadian markets.

Published on: July 19, 2016

USA Today reports that luxury retail is beginning to take some hits as "threats to global stability — including terrorism, the United Kingdom's withdrawal from the European Union and China's slowdown — are rattling international shoppers of high-end goods. At the same time, luxury retailers are losing share to online sellers, an issue bedeviling mainstream chains. They're also suffering at the hands of discounters and fast-fashion luxury lookalikes."

The story goes on to say that "it's a strange turn for luxury, which looked unstoppable when the world's wealthy were riding high. Globally, the luxury market is growing. Personal luxury goods purchases have tripled in the past 20 years to more than $270 billion, according to a 2015 report from Bain & Co. North and South America combined have become the largest market for personal luxury goods purchases.

"But that growth has slowed in recent years. Last year, sales in the Americas were flat on a constant exchange rate basis, according to Bain."

Published on: July 19, 2016

The Chicago Tribune reports that Capital One plans to expand its coffee shop-financial services hybrid concept to two more Chicago neighborhoods, adding to a fleet that currently includes five cafes in Boston and one each in Chicago, Los Angeles, San Francisco, Philadelphia and St. Cloud, Minnesota. The bank also plans to further expand the concept, with as many as six locations in South Florida by the end of next year.

The story points out that "consumers need not be Capital One customers to visit the cafes," and that the facilities serve primarily as coffee shops - serving Peet's coffee and goods from local bakeries - unless the customer requests banking information. They also include community meeting rooms and ATMs.

Published on: July 19, 2016

Starbucks has announced what USA Today calls "sweeping changes to its benefits program Monday that will allow U.S. employees to choose from up to six different medical insurance providers instead of one."

The move comes after the coffee company already has announced wage increases for all its US store employees. The story notes that employees will "now be able to choose from five levels of medical coverage and three levels of dental and vision coverage." Individuals will be able to save as much as $800 a year with the new options, and families as much as $2600 a year; the options are open to any employee who works 20 hours a week or more.

USA Today writes that "the health care improvements are unusual because they come at a time when many companies have cut back on health care to try to control costs."

Published on: July 19, 2016

• Crain's New York Business reports that Fairway, just 10 days after emerging from bankruptcy protection and a reorganization that should save it millions in annual interest payments, has closed down one of its stores, in Lake Grove, New York, on Long Island.

The store had been open for just two years.

The story notes that Fairway has said it is continuing with plans to open a new Brooklyn store later this year.


• CBS News reports that ConAgra "has announced the recall of nearly 200,000 pounds of frozen chicken and beef entrees due to concerns the products may be contaminated with foreign matter such as metal. The products were being recalled as part of the expansion of a former recall that had included only 3,806 pounds of frozen entrees."

The story notes that "the metal fragments range in size between two and nine millimeters in diameter and are curled, malleable, and shiny," all contained in various PF Chang-branded products.


• The Boston Globe reports that BJ's Wholesale Club plans to "do away with many of its in-store food courts, replacing them with Dunkin’ Donuts kiosks or shops."

The reason? BJ’s CEO Christopher Baldwin says that "it seemed like a natural collaboration for two Massachusetts-headquartered companies."

Published on: July 19, 2016

• The Wall Street Journal reports that Venkat Achanta, who has been serving as Walmart's data chief, is leaving the company to join a company called Neustar as chief data and analytics officer. Neustar is described as a company that "collects and analyzes vast quantities of consumer data to sell security and marketing services," allow marketers to "use the information to better target digital advertising."

Published on: July 19, 2016

Yesterday, in a story about stores being divested by Ahold and Delhaize in order to gain FTC approval of their planned merger, MNB wrote that "Weis Markets will buy 8 Food Lion stores in Delaware."

That was wrong by about 30 stores - Weis actually is acquiring 38 Food Lion stores in Delaware.

Apologies for the goof.

Published on: July 19, 2016

On the subject of mandated GMO labeling passed by both houses of Congress, with expectations that it will be signed into law by President Obama, one MNB user wrote:

I see that the proponents of GMO labeling are upset that they were not successful in getting a plain text disclosure, what I have often dubbed a "scarlet letter", that would be misleading because it surely would be interpreted as a warning by many consumers.   This would likely cause food companies to do many reformulations to avoid that scarlet letter at a cost that will be borne by us non-believers in their GMO hysteria.  As for who has cell phones, it seems these days that is among one of the top priorities of everyone including the poor.

Also got an email from reader George Salmas:

Regarding new GMO labeling law: The Devil is in the details.  These are the key parts of the new law that affect industry:

• State GMO labeling laws are void. States can normally have tougher consumer protection laws than federal standards.  But not in this case.

• The Federal Department of Agriculture has two years to figure out how the law will work.  A law is passed without knowing its contents.  But we do know one thing: Since state GMO laws are illegal, and the new rules are not yet written, there will be no GMO labeling laws in the U.S. for at least 2 years.

• When the new GMO labeling rules go into effect in 2 years, manufacturers can identify GMO foods with a QR symbol identical to ones already on many foods. No need to write “GMO” anywhere on label.  That makes GMO labeling invisible to many consumers.

• There’s been talk Whole Foods and others may impose their own GMO labeling rules.   The new law provides:  “A food may bear a disclosure that [it] is bioengineered only in accordance with regulations promulgated by the Secretary [of Agriculture] …”  That precludes retailers from imposing their own GMO labeling rules.  We’ll know if there are any loopholes in 2 years when the regulations are published.  We’ll see if Whole Foods and others try to push back.

The new law suppresses GMO labeling in the United States at least for 2 years and possibly forever.  Whether one thinks that’s good or bad, it’s the fact.




And, regarding the various companies that are acquiring stores from Ahold and Delhaize, one MNB user wrote:

Glad to see the FTC got this one right and didn't make one buyer take all the locations, as they did with Haggen.

Published on: July 19, 2016

Once again, I've been getting emails from MNB readers living in the Portland, Oregon, area, asking for one of those casual get-togethers that we've done here the past few years. I'm game if you are...

Let's meet at 5 tonight at Nel Centro, located at 1408 SW 6th Ave, in Portland. I'll plan on being there for a couple of hours - if the weather holds, on the outside patio - and I hope that any MNB readers who'd like to stop by will do so.