business news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: February 28, 2017

    by Michael Sansolo

    It’s a completely accepted tenet of business: execution always matters more than strategy.

    A business guru made the point simply many years back. A great strategy poorly executed always results in failure, while a flawed strategy that is well executed can still produce positive results.

    So for a moment, let’s examine two marvelous elements of relentless execution and the lessons they offer.

    Start with the University of Connecticut women’s basketball team, which just recorded its 104rd consecutive victory. Washington Post columnist Sally Jenkins wrote a piece recently highlighting the team’s stunning run of excellence

    Jenkins’ column on the team laid out the incredible discipline and system behind the entire program, to a point that UConn simply keeps winning despite losing its three best players a year ago and starting the season without a single expected All-American.

    As Jenkins wrote, “UConn’s trademark pouncing execution is the thing to watch.” It comes from focused practice of basketball’s most nuanced plays to ensure they are done correctly each time. “They do nothing casually—ever. And they take advantage of every casual thing by their opponent,” she wrote.

    Success in sports relies on such discipline. I recently visited three baseball teams in the midst of spring training and saw another version of this same theme. Most memorably, I watched the highly acclaimed pitchers on my beloved New York Mets (along with the Houston Astros and Washington Nationals) spend hour upon hour practicing the most basic of fielding drills; catching ground balls and throwing them on command to different bases.

    There’s a good reason for that. No one will remember the season the Mets are about to have based on these simple plays. But there’s no way the team can possibly have a great season without them.

    Sports teams run those boring basic drills for a simple reason. The repetition breeds good habits so that in the heat of the moment players do the right thing almost reflexively. In the case of UConn, good habits have produced great results. (With the Mets, I can only hope.)

    And let’s remember that no one on UConn or the Mets really needs these drills. All these players have been playing their sports for years and certainly have achieved significant mastery of their skills. What’s more, practice is no guarantee of perfect execution.

    Yet teams recognize that practice brings more than that. It serves as a reminder that big victories come from small steps and that all skills are sufficiently significant to merit attention.

    Obviously, business isn’t so simple. The playing field is never quite as neat or measured as in sports and the measures of success never quite as simple to observe. Yet the lessons of discipline and practice would still seem to apply.

    It could be as simple as repeated reminders of key elements of customer service or company goals. Consider how to make reinforcement and repetition of what matters a near constant exercise.

    Sure, practice won’t make it perfect, but it may make many things a lot better.

    Michael Sansolo can be reached via email at . 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.
    KC's View:

    Published on: February 28, 2017

    by Kevin Coupe

    Interesting piece in the Boston Globe yesterday that talked about how adult children continue ti live with their parents in ever-greater numbers.

    Here's how the Globe set up the story:

    "You can’t blame the economy — not anymore. Young adults continue to move back home with their parents, even though the United States has enjoyed seven straight years of economic growth, pushing the unemployment rate below 5 percent.

    "This was supposed to be a temporary phenomenon, a short-term rush for shelter set off by the financial crisis of 2007-2009. But it just keeps going. Every year, more and more 25-to-34-year-olds turn up in their parents’ houses, right through to 2016."

    Now, the story makes the point that there are a number of reasons for the trend. Like, high housing costs. And parents who are tolerant of the trend, and make it easy for them to live at home. (I can vouch for that one.)

    But the Globe also goes beyond the reasons to talk about the implications of the trend. This includes young people who rent rather than buy a home, who marry later than previous generations, who put off having children until later in life.

    In short, they are putting off many of the behaviors that traditionally have resulted in young people spending more money in stores on things like minivans, lots of food for their families, vacations, etc...

    Which inevitably is going to have an impact on the stores that have lived on the spending habits of such young people.

    They have to keep their Eyes Open about that. It is going to hit their bottom lines, and it should affect the stores they are building and merchandising.

    To not acknowledge and act upon such changes would be a mistake. A potentially enormous one.
    KC's View:

    Published on: February 28, 2017

    Fox News reports that Procter & Gamble-owned Gillette has decided to reduce the prices of some of its shaving products, some by as much as 20 percent.

    P&G CFO Jon Moeller says that the goal is to fill in "a gap in prices between P&G's higher-end razors and lower-end razors," the story says.

    Fox News explains: "Gillette once claimed a 71 percent market share in North America, but it now only maintains 59 percent as of last year, according to Fortune.  Startups, like Harry’s and Dollar Shave Club, which was acquired last year by Unilever for $1 billion, have steadily chipped away at that dominance with similar razor cartridges at a lower price.  The startups leapfrogged Gillette in the online razor market, with Gillette maintaining a relatively small proportion of online sales as of 2015."
    KC's View:
    Think of this as Disruption 101. It can happen to everyone. It probably will happen to everyone.

    Published on: February 28, 2017

    The Washington Post reports that Walmart is installing new systems that will create "express lanes in its pharmacy and money services areas, in which customers will be able to use new functions in the Walmart app as part of the transaction process. By allowing shoppers to do some things in the app instead of at the counter, and by letting them bypass the main queue, the theory is that customers should get in and out of the store more quickly ... The express lanes in both pharmacy and money services departments will arrive in a limited number of stores in March and should be available in almost all of the chain’s 4,700 locations by fall."

    The story notes that "long lines can be a particular frustration at Walmart’s money services counter, executives explained to reporters on Monday at a Walmart store in this New York suburb. On average, they said customers in the chain’s money services areas are waiting in line for 11 minutes. At peak times, such as around the 1st or the 15th of the month, when many people receive paychecks, waits can swell to 55 or even 70 minutes."
    KC's View:
    There are a couple of things at play here beyond the not-to-be-minimized importance of saving customers time and trouble.

    For one thing, by getting people to use their apps when they walk into the store, it enables Walmart to potentially know more about these shoppers, which will give them a greater ability to target those people. The retailer can then use those connections to market more effectively to those customers elsewhere in the store, which then leads to more information, and then an even greater ability to market in a focused kind of way.

    The other thing about this story that fascinated me was Walmart's assertion that "about one in five customers to that come into Walmart stores conduct some sort of money service transaction, including cashing a check, paying a bill, and so on." That's an important statistic, because it reminds us of all the people out there who may not have traditional banking relationships, who live paycheck to paycheck, and for whom some discussions about consumer and food trends may be largely irrelevant. It doesn't mean that they're not aspirational, but it does mean that they have other priorities - like stretching a buck as far as possible, and feeding their families in efficient ways.

    Published on: February 28, 2017

    The Chicago Tribune has a story about how, after a major expansion of grocery stores in the Chicago market after the closing of Safeway-owned Dominick's there in 2014, growth "is just now slowing to a crawl." However, the story also makes the point that this does not mean that competition is slowing - in fact, it may be tougher than ever because of non-traditional venues getting into the food business as well as growth in the online segment.

    Here's how the Tribune frames the story:

    "Jewel-Osco and Mariano's, which collectively hold more than 30 percent of the market share in the Chicago area, plan to open a combined five stores this year. But with much of the prime real estate already snatched up, there are fewer opportunities for grocery stores to expand.

    "Competition will remain fierce. As in markets across the country, Chicago grocery stores are facing steep economic challenges to survive. Some of those challenges, like deflationary food prices, are cyclical and taken in stride. But in an increasingly fragmented industry, shoppers are buying their food from a variety of retailers, including drug and dollar stores." And, "Executives with both Jewel-Osco and Mariano's, which is owned by Kroger, have acknowledged that they're studying e-commerce but have so far been mum on details for their future plans for implementation."
    KC's View:
    This isn't different from most other markets .... but it is a big one, and the competition is going to be particularly intense. I cannot help but feel that there are going to be players there with images and value propositions that are not distinct and differentiated enough to allow them to survive ...which will mean that they'll either be marginalized beyond the ability to survive or will be acquired for their real estate.

    Never stop fighting till the fight is done? It's never done.

    Published on: February 28, 2017

    The New York Times reports on the growth of "antibiotic-resistant 'superbugs'" that "pose an enormous threat to human health ... The rate at which new strains of drug-resistant bacteria have emerged in recent years, prompted by overuse of antibiotics in humans and livestock, terrifies public health experts. Many consider the new strains just as dangerous as emerging viruses like Zika or Ebola."

    The problem, the story suggests, is that the medical profession is "fast running out of treatment options."

    One of the categories of superbugs identified by the World Health Organization (WHO) as a critical priority is the Enterobacteriaceae family, which "includes familiar names like E. coli and salmonella, which live in human and animal guts and can cause food poisoning."

    Fascinating reading, and a subject about which everybody in the food business should be concerned, and committed to some sort of public policy approach that deals with the threat in a sophisticated and realistic fashion. You can read the story here.
    KC's View:

    Published on: February 28, 2017

    Reuters reports that US District Judge Katherine Polk Failla in Manhattan yesterday dismissed a lawsuit that accused Walmart "of defrauding shareholders in its Wal-Mart de Mexico unit by concealing its suspected bribery of public officials in Mexico."

    According to the story, the judge ruled that "holders of Wal-Mex's American depository shares (ADRs) cannot pursue claims that Wal-Mex's former Chairman Ernesto Vega and Chief Executive Scot Rank knew or were reckless in not knowing about the bribery allegations. She also rejected shareholder claims that Wal-Mex and Wal-Mart were liable for Vega's and Rank's activity, and that Wal-Mex misled shareholders by saying it operated legally and ethically during the alleged bribery scheme."

    Reuters notes that "the lawsuit is one of several targeting Wal-Mart after The New York Times in April 2012 reported that the Bentonville, Arkansas-based retailer bribed Mexican officials for years to speed up store openings."
    KC's View:

    Published on: February 28, 2017

    • Amazon announced that it is expanding its one-hour Prime restaurant delivery service to the Washington, DC, market, offering "delivery from 150 popular restaurants, including Maketto, Ben's Next Door, Hill Country Barbecue Market, Kapnos, b DC Penn Quarter, and many more. Amazon Restaurants is expanding its delivery territory from Northern Virginia to customers in the Capitol Hill, Georgetown, Adams Morgan, H Street, Shaw, and Downtown neighborhoods, to name a few."

    • Merchant Distributors, a division of Alex Lee and distributor to more than 600 retail food stores as well as parent company to the Lowe's supermarket chain, said yesterday that it is working with SparkShoppe to develop a digital strategy that will "deliver significant shopper marketing and sales value for both independent retailers and the brands."

    • SpartanNash, the Michigan-based wholesaler and retailer, said yesterday that it "plans to unveil a new e-commerce service that will allow customers to order products online and pick them up in store. SpartanNash will pilot the program with a Family Fare location in the greater Grand Rapids area in the first quarter of this year. If the project delivers the expected results, the retailer will roll out the program to an additional 25 stores by the end of this year. The pilot program is being powered by Unata.
    KC's View:

    Published on: February 28, 2017

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

    • The Triad Business Journal reports that Ahold Delhaize-owned Food Lion said yesterday that "it would spend $178 million renovating and updating 93 stores ... According to a release, the investment includes remodeling the stores, additional price investments throughout the year and investments in associates and the community through its Food Lion Feeds program."

    Smart move .., especially because competition from companies like Publix and Lidl is going to make the market a lot tougher.

    • Target said yesterday that its fourth quarter same-store sales were down 1.5 percent, with Q4 net sales down 4.3 percent to $20.69 billion, and net income down to $817 million from $1.43 billion during the same period a year earlier.

    Reuters noted that it is Target's sixth straight quarterly decline.

    • The San Jose Mercury News reports that "four of the five Andronico’s Community Market grocery stores that Safeway bought at the end of 2016 will reopen this week as Safeway Community Markets." The stores, scheduled to open tomorrow, are in Berkeley (two of them), Los Altos, and San Anselmo.

    The story says that "Andronico’s San Francisco location reopened in early February after a revamp but is still branded as Andronico’s. The goal is to transition the name of San Francisco store to Safeway Community Markets, said a Safeway spokeswoman, but the company has to obtain permits under the city’s formula retail rules."

    • In Florida, the Sun Sentinel reports that convenience store chain Wawa has announced plans to open its first three South Florida stores on March 23. The three units are just part of the company's Florida expansion plans following "years of Wawa development in the northern and western sections of the state."

    The company now has more than 100 units in Florida, with plans to open 50 locations in South Florida over the next five years.
    KC's View:

    Published on: February 28, 2017

    Got the following email from MNB reader Claire Tenscher:

    I’d like to elaborate on the New York Times statement that ‘the world’s growing appetite for soy and other agricultural crops’ is leading to deforestation in the amazon.’

    While that statement is at face value true, it could lead someone to believe that tofu loving vegetarians are eating the rainforest. In reality, “about 85 percent of the world's soybeans are processed, or "crushed," annually into soybean meal and oil. Approximately 98 percent of the soybean meal that is crushed is further processed into animal feed with the balance used to make soy flour and proteins.” Biofuel, animal feed, and cooking oil (our margarine, mayo and French fries)  are the true culprits here with production driven by our appetite for meat and cheap oil.

    I loved this email about the passing of actor Bill Paxton, from MNB reader Gordon Earp:

    My favorite of his films (with more than a little bias) was Bill Paxton's portrayal of Morgan Earp in the movie Tombstone with Kurt Russell (Wyatt Earp), Sam Elliot (Virgil Earp), and Val Kilmer (Doc Holliday).

    I love that one of Wyatt Earp's descendants reads MNB. It just makes me so happy.

    This reaction to our mention yesterday of "Italian piada sandwiches." MNB reader Richard Lowe wanted to know what they were, so he looked them up:

    Never heard of this! Love the title. FANCY ITALIAN WORD FOR A QUESADILLA!

    And since quesadillas are one of the world's great foods, this is a good thing.

    And finally, one MNB user had this comment about our mention of the Oscar winners:

    I’m proud to admit that I watched none of the movies, know none of the actors and could give a rats a** about Hollywood at all.

    So I guess our book, "THE BIG PICTURE: Essential Business Lessons from the Movies," wasn't a must-have in your house. Oh, well.

    I know the movies are not for everyone, but I like them, so I'm going to continue to write about them when it seems relevant. Or, when I just feel like it.

    Because I think that they can be a wonderful shared experience, an art form that can enlighten and illuminate and entertain, and a place to learn lessons applicable to how we live and work. Not always, but more than one would think.
    KC's View: