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    Published on: June 9, 2017

    by Kevin Coupe

    The New York Times reports that Pirate Joe's - the Canadian retailer that would satisfy Trader Joe's fans north of the border by shopping in bulk at a Trader Joe's in Seattle and then bringing the stuff to British Columbia and selling it at inflated prices - has shut down its operations "after a protracted legal battle with the American corporation."

    Mike Hallatt, the founder of Pirate Joe’s, first got sued by Trader Joe's in 2013, accused of "trademark infringement, unfair competition, false designation of origin and false advertising." Buying enough product to make the project worthwhile was a complicated affair, with Hallatt sometimes wearing disguises or dressing in drag to make the purchases, and sometimes hiring other people to shop for him.

    According to the story, "A Federal District Court in Washington ruled that the violations had occurred in Canada, where Trader Joe’s has no stores, and that Trader Joe’s had failed to prove that Pirate Joe’s affected its business in the United States. In August 2016, a federal appeals court sent the case back to the lower court for a trial, which was scheduled to take place in November."

    Hallatt reportedly wanted to continue the fight, but a crowdfunding effort to raise enough money to pay the lawyers came up short, and "on Wednesday, the two sides reached a settlement."

    I sort of feel bad about this. Not that I want Trader Joe's rights to be infringed upon, but the idea that there was this guy out there who was working so hard to smuggle its products into another country just sort of appealed to me.

    That kind of passion is an Eye-Opener.

    It is a shame that it didn't appeal more to Trader Joe's, and that there wasn't a way they could've worked with him - even if obliquely - to make its products available in the Vancouver market even before it opens stores there.

    On the other hand, a pirate who has been co-opted by the man really isn't a pirate anymore ... and he finds out that the occupational hazard is that his occupation's just not around."
    KC's View:

    Published on: June 9, 2017

    The Temkin Group is out with its annual Trust Ratings list, which looks at the "the level of trust that consumers have with 329 companies across 20 industries" - and not only are six of the top 20 food retailers, but the number one company on the list is H-E-B, the Texas supermarket chain.

    Publix comes in at number nine ... Amazon, the Apple Store, and Hannaford are all tied for 15, and Wegmans comes in at number 20. Chick-fil-A is the highest ranked fast food chain, at number 11.

    Amazon Fresh is 24th on the list, tied with Trader Joe's.

    It won't come as much of a surprise to most people that 10 of the bottom 30 are cable companies that offer both TV and internet services, including Cox Communications, Comcast and, last on the list, Time Warner Cable.

    Radio Shack is 311 out of 329 companies, Kmart is 302, and Sears is 273.
    KC's View:
    In the end, trust is the most important quality that a retailer - or any consumer-facing business - can have ... and retailers that do not realize this run the risk of finding themselves in a bad place. And if you have it and lose it, trust can be extraordinarily difficult to get back.

    Remember the Latin proverb that I'm find of quoting here:

    Trust, like the soul, never returns once it goes.

    Published on: June 9, 2017

    It is a big week for the ranking business ... as the Harris Poll is out with its annual ranking of the top companies in the nation for corporate social responsibility (CSM) efforts - the three retailers are on top of the list.

    Wegmans is number one, Publix is number two, and Amazon is number three.

    The study says that "only eight of the 100 companies measured achieved 'excellent' CSR ratings this year; while this is the most ever in the 18 years Harris Poll has measured CSR as a major dimension of corporate reputation, it falls far from expectations.

    Harris, in evaluating social responsibility, prioritizes employee treatment, ethics, and respectful treatment of customers as the most important corporate social responsibility issues, followed by providing affordable and accessible products and services and safety.

    Rounding out the top 10 are Tesla, USAA, Lowe's, UPS, LL Bean, Walt Disney and Whole Foods.

    The bottom 10 are AIG, Bank of America, Volkswagen, ExxonMobil, BP, Takata, Halliburton, Goldman Sachs, Wells Fargo and, in last place, Monsanto.

    There is an interesting split in terms of how consumers perceive social responsibility efforts on the part of the companies with which they do business.

    "Forty-five percent of consumers agree that companies develop corporate social responsibility programs because it is the role they believe they should play as leaders in their communities and is primarily motivated by their responsibility to do what’s right," Harris said in its statement. "Conversely, 40 percent of consumers say that when companies develop corporate social responsibility activities, they only do so to bolster their image and are primarily motivated by publicity possibilities; they are not truly focused on the effectiveness of their social responsibility efforts."
    KC's View:
    I've always felt that it isn't that hard to tell the difference between companies that are heartfelt about social responsibility and those who are just doing it for positive press. You can just tell the people who only want to write a check ... they're always just a little too aggressive about getting out the press release, and they tend to be more scattershot than focused.

    I do think there are some warning signs in the list ... especially among the companies at the bottom. The Monsanto positioning may speak volumes about some of the reasons people tend to be distrustful about its approach to GMOs. And as for Goldman Sachs ... I worry a little bit that so many people from that company's culture now seem to be running the country, which ought to be a height of social responsibility.

    (Think about it. Halliburton, Goldman Sachs, Wells Fargo and Monsanto are all seen as being less socially responsible than Takata - the air bag manufacturer that has admitted to poor manufacturing processes that resulted in 17 people getting killed, that was responsible for the biggest auto safety recall in history, and that had to pay $1 billion in penalties for its sins.)

    Published on: June 9, 2017

    My friend Bob Wheatley, CEO of Emergent, which helps companies strategize around and communicate about healthy living, had a blog posting the other day focusing on how "the single most important and disruptive change in food culture, now winding its way through virtually every part of the industry, is the overwhelming desire for fresh foods.

    "Call it the quest for all-things real ... the packaged food world finds itself facing a state of transition as fresh versions overtake and replace their processed cousins."

    It isn't happening everywhere, and it isn't happening for everyone. But it is happening on enough fronts, Bob suggests, that to a great extent "we are moving from a production-fueled system to a demand-driven system, founded on the consumer’s interest in real foods and a parallel desire to know more about ingredients, sourcing, transparency, and sustainability."

    Which creates challenges for suppliers and retailers ... and Bob offers seven strategic and tactical suggestions to help them embrace the opportunities.

    You can read about them here.
    KC's View:

    Published on: June 9, 2017

    PriceLocal, a Michigan-based company, is trying to make some noise with what it promotes as an ability to "allow shoppers to search on Amazon and then get the product they want same day from a local store at the Amazon price."

    According to the company, "More than 10,000 price matching stores have been added to PriceLocal’s search results, including Target, Walmart, Bed Bath & Beyond, Office Depot, Fry’s, Toys R Us and more, in addition to the smaller local stores already participating in the PriceLocal network. Other retailers’ immediately available local inventories can be searched with PriceLocal without the price match, including Home Depot, Macy’s, Kohl’s, and Barnes & Noble."

    MediaPost reports that "some retailers provide a product feed, while others do not. When the retailer doesn't provide a product feed, PriceLocal crawls the Web site for local product inventory information ... The tool works as a browser extension in Chrome for Safari on laptops and desktops, but PriceLocal Founder and CEO Matt Chosid said the company will expand to allow consumers to search from mobile devices in the coming months."

    The company says its primary advantages include "the ability to search from Amazon, where 55% of all online product searches start according to BloomReach," and "same day pick up, which 79% of consumers say they strongly value according to Boston Consulting Group."
    KC's View:
    Somehow, this seems vaguely reminiscent of when Priceline got into the grocery business, creating a "name your own price for groceries" model; I always understood why Priceline wanted to work with supermarkets, but it never made sense for supermarkets to get into bead with Priceline ... they saw it as an easy way to develop an early-days internet strategy, but all it did was abdicate responsibility for innovation and, in many ways, void their own differential advantages.

    I think the same may apply here. This persuades retailers that the service allows them to compete with Amazon on price, which makes all the difference ... but it ignores all the other differential advantages that Amazon is developing for itself.

    This is, at best, a short-term tactic ... a way to buy time while developing a real and persuasive approach that differentiates oneself in the mind of the shopper. But a long-term play?

    Not so much.

    Published on: June 9, 2017

    Reuters reports this morning that members of the Nordstrom family are "considering taking the company private as it struggles with an industry-wide sales slowdown."

    Such a move, the story says, "would involve raising debt, would be a risky but potentially profitable bet by Nordstrom's founding family and largest shareholder bloc that the company can reshape itself and emerge from the retail meltdown stronger." Going private would give the company a little more room to do any necessary restructuring, though it would be replacing the pressure that can be place don the company by Wall Street investors with pressure - hopefully more informed and patient - from whatever private equity group decided to work with it.

    The move has not yet been formally proposed, so there still is the possibility that it might not happen. Reuters reports that "the company's board has formed a committee of independent directors to explore the possibility of any transaction that could be made by the group."

    The New York Times adds that "the decision signals the Nordstrom family’s commitment to its core retail business at a time when investors and lenders are deserting the industry in droves. It also reflects optimism that a private equity firm or a sovereign wealth fund would be willing to invest in a large retailer, after many major investors got burned in debt-fueled buyouts that went bust."
    KC's View:

    Published on: June 9, 2017

    • Nielsen is out with a new study just in time for summer, pointing out that "the rosé wine category is worth more than $207 million annually, growing at 53% in the latest 52 weeks, outpacing the category as a whole which is growing at a modest 4%.

    "While Rosé only represents 1.5% of the total table wine category," the report says, "it is growing at a rate unheard of in other categories, 70% in the last year alone ... Sparkling Rosé is also having its moment in the sun with $139 million in annual sales and growing at 19%, more than double the total sparkling wine categories 9% dollar growth."
    KC's View:

    Published on: June 9, 2017

    ... will return.
    KC's View:

    Published on: June 9, 2017

    There's been no time for books, movies or even TV shows (not even the new season of "House of Cards," I'm afraid), so I have little to offer you this week.

    But...I can recommend to you the Erath 2016 Oregon Rosé of Pinot Noir, which was just delicious when I had it this week ... of course, it helped that I was in Seattle, was sitting at the bar at Etta's, the wine was being poured by my friend Morgan, and I was chowing down on Tom Douglas' fabulous tuna sashimi with green onion pancakes. It's been a crazy week, but it was good to grab a few minutes for a taste of the good life.

    I've been listening to Glen Campbell's new - and last - album, made up of a bunch of standards - "Funny How Time Slips Away," "Everybody's Talkin'," "Don't Think Twice, It's Alright" - that he apparently loved to sing but never recorded.

    It is a bittersweet album. Campbell has been suffering from Alzheimer's, and is now at the point where he cannot speak and does not understand speech. But in this album, his voice is in amazing form. (There was an excellent documentary about how he grappled with the disease called Glen Campbell: I'll Be Me, which I reviewed about 18 months ago, and that I also recommend.)

    The album is called "Adios," which also happens be the last song. Touching, sentimental stuff.

    That's it for this week.

    Have a great weekend.

    KC's View: