business news in context, analysis with attitude

In commentary about the mad cow situation the other day, we urged the government to take the bull by the horns and create a meaningful and credible infrastructure to track and deal with these issues…though we also said that sometimes there seems to be a different kind of bull involved. Which led one MNB user to write:

I think you're absolutely right about another bull at work here. This whole issue has been dealt with in a very negligent way. And the benefactors aren't scared and confused consumers.

Why would an agency knowingly put people's lives at risk (no matter how small they might think the risk is)? The repercussions would far out weigh any short term profits/benefits.

All of the efforts made by the USDA seem to be incredibly short sighted. Enforcing feed laws that should have been strictly enforced when they were first introduced in 1997, banning downer cows from the human food chain (wasn't this something that was already supposed to be happening too?), destroying questionable cows but not testing them?? Most of this appears to be too little to late. And some of it seems pretty suspect - by not testing any of the destroyed animals, there won't be any more bad news that another infected animal has been found. And the consumer will have the "confidence" to continue to eat meat.

Earlier this week, we referenced a line from a Newsweek article that noted that allergy-related recalls seem to be given higher priority than the current mad cow-related situation. This prompted one MNB user to write:

I have heard several references to the high priority given to recalls involving potential allergens, like eggs or peanuts. The Newsweek piece stated, "let a noodle fall into a vat of soup and the food safety net is there to catch it," and your comments yesterday also referred to this. The implication seems to be that if these are high priority recalls, warranting immediate action, why then are BSE-related meat recalls not given the same attention?

As parent of a severely allergic child, I can certainly understand the disconnect, and think we need to apply a bit more common sense and perspective to our reasoning. If my child - who is highly allergic to eggs, peanuts, tree nuts, and seeds - eats a mislabeled product that contains any of these ingredients, he will have a reaction, likely an anaphylactic, life threatening, lung-squeezing one. There's no maybe - he WILL have a reaction - and it will be immediate and serious, not something that may or may not affect him ten years from now. Accurate labels are the only way I can ensure this will not happen to him.

Let's all keep a sense of perspective: there have been only 150 deaths from the human form of mad cow disease in the UK (the most affected country in the world) in the past decade, while each year about 200 children die in the U.S. from food-induced anaphylaxis . I certainly agree that many aspects of this case have been mishandled, but let's not allow irrational fear to dominate the BSE discussion.

Fair point. Sometimes those of us lucky enough never to have had to deal with kinds of life-threatening allergies forget about the very real dangers that some parents and children live with every day.

One MNB user shared the following story:

A friend works for a large, privately-owned natural foods grocer in the Midwest. I asked why they had not jumped on the BSE issue to promote natural beef & by extension, themselves. Friend tells me that the store is sitting on it until they could ascertain from their suppliers that their meat was actually grain-fed & naturally raised. Seems to me that if you are a natural foods grocer & have made your reputation based on standards that you publish to the world, including carrying ONLY naturally-raised, grain-fed meats, you damn well better be selling only that! But honestly, I'm not surprised--disappointed, not surprised.

On the subject of mad cow, MNB user Linda Allen had the following observation about one of the phrases we used:

What constitutes being "widespread in Canada and Japan"? My understanding is that for Canada there is the one last May, and now our Washington Canadian animal! And in Japan, about 8 animals. If that is the case, "widespread" would not seem to be the case in my definition.

That was a misstatement on our part - fueled, we suppose, by either too little or too much coffee at too early an hour. Clearly, the UK is the region with the biggest problem in the past…and that's what we should have written.

Sorry about that.

MNB user Michael Davis had some thoughts about yesterday's report about the decrease in the number of c-stores in the US:

While the decrease in the number of c-stores is a bit alarming, many of stores that closed were smaller units with a couple of gas pumps and a limited assortment of products (Cokes & smokes). These units could not compete with other c-stores let alone the clubs and supermarkets. Also one other point, a few of the big oil companies (that expressed their desire to reduce their retail operations) have closed sites and cashed in on the real estate, selling it to the big drug chains.

I would say the industry is actually in a renaissance period. If you look at the designs, sizes, and assortments of the newest stores, say Sheetz, Quick Chek, Wawa, etc. have opened on the East Coast alone, I think most people would agree. Also, a rather powerful competitor from Canada - Alimentation Couche-Tard - has entered the Midwest in a big way and will be opening some rather remarkable locations as well. Se many of us are very optimistic about our industry's future.

In response to a line of discussion that spoke to the importance of building community in stores by stressing education and information, one MNB user wrote:

Just think, we could make good happy customers and keep them around for awhile instead of trying to kill them off with chemicals and mad cow disease. The customers would still shop at our stores like we cared for them…

Wild Oats offers discussions on new food trends, diets, yoga, pilates, message, disease etc.

Which may be why the Wild Oats-type retailers in the US are seeing healthy growth.

Which reminds us...we got the following email from MNB user Bill Jones, who illustrates why having smart, engaged people at the checkout lanes (and even in the aisles) can be a critical difference in the shopping experience:

I applaud your insight. So many times I have said to those who comment on what I do at Whole Foods, "Their time on line is no less because I am there, but I'm a distraction and they seem to like that.

From my side in the situation, it's fun to meet so many different people. Their kids love me and that makes my job worthwhile.

A great person at checkout can be an enormous differential advantage for a retailer. And too few retailers make that a priority.

As our friend Glen Terbeek is fond of pointing out, shoppers care a lot more about the people who work in a store than they do about the company's CEO…and yet which search is given greater priority by most companies?

Two of the ongoing issues - they are connected, really - that concern the supermarket business are productivity and compensation. MNB user Ted Vinzani offered some good insights on both:

Pay-by-the-hour does nothing to truly increase productivity. A raise will produce increased productivity initially. After some time the person believes they are “worth” the new rate and the old productivity level returns. When they feel they should be given another raise, they tend to be less productive. ”They aren’t paying me what I am worth. Why kill myself?”

Until pay plans include incentives that can mean significant additional pay for increased productivity, productivity will always be either at a pace less than optimum or begrudgingly given at optimum.

If a person is forced into increased productivity by the economy or whatever, how productive will she truly be? What will be the long term ramifications? There are numerous discussions of a coming manpower shortage in the years to come.

Though completely outside this industry, Nucor Corp. is the perfect example. This is a US steel producer that can compete handily in the markets they chose. Their employees can make multiples of their base pay. Union organizers have been physically threaten by employees and had to be protected by Nucor managers while escorted off of the properties.

I doubt we will ever see a similar pay-for-productivity plan in a food store. But before someone says it cannot be done, let’s ask this question: “How many store owners would like to have their employees anti-labor union and doing everything they can to make the store more profitable?”

That's been our point all along. Until management and labor can forge some sort of new agreement that takes these issues into consideration - perhaps through some sort of profit sharing - then old battles will continue to be played out and no new progress will be made.

On the subject of Southern California's troubled labor relations, one MNB user wrote:

Having been associated with one of the more recent debacles in labor relations, I come to wonder if attitudes will ever change between management and labor.

The grocery business was one of the most highly organized areas of labor at one time. Union workers had some of the best wages, benefits, and working conditions of any group in the country. Working in the grocery business was a sought after occupation of the middle class, (fast disappearing, the only thing that Robert Reich said that I ever agreed with) in this country. Whether you work at retail or wholesale, you did not need a college degree, (although skills could be involved), and you could work your way up to a comfortable life.

In the early eighties that began to change, as companies sought to become more competitive, labor began to take the first hit, productivity became a central issue, as well as wages and cost of benefits. These have been ongoing concerns, and of course brought to the forefront by Wal-Mart, who controls all of these factors very well, if not the best.

Organized labor saw its base diminishing as labor saving practices came into play, boxed beef, bar codes, scanners, computerize labor standards, and RF technology, among many others.

Management saw these as ways to become more competitive, labor saw these as ways to lose good jobs.

Management moves up the ranks based on tenure and skill, (of course, it does not always work that way), and Union leaders are by and large elected. Both have bottom lines they are held accountable for, however they are not the same. Maybe they should be the same but in reality they are not. Throw into the mix some giant egos, and its hang on for the ride.

A great deal of time and money have been spent trying to find the answer to this vexing issue referred to as labor management relations, but not with a great deal of success for combatants such as in Southern California. My guess is there is total mistrust by both sides, and that will be a huge hurdle for the participants to overcome. There may be a settlement but neither side will be satisfied, and will be looking forward to the next encounter.

In the meantime the Bentonville behemoth just keeps flattening everything and everyone in its path.

We also got some email about Michael Kinsley's pro-Wal-Mart perspective that aired on National Public Radio and was dutifully reported upon here:

One MNB user wrote:

In one breath Michael Kinsley says that people are free to shop elsewhere and in another admits that Wal-Mart’s tactics may have closed the downtown district. When Wal-Mart forces out the competition, what choice is there but to shop there! It’s a self fulfilling prophecy! That is precisely what has happened to our New Hampshire town. All the self-serve, low end department stores are gone. Want a small appliance, kids cloths, college furniture, or batteries? Wal-Mart is your only in-town option. Before Wal-Mart there were several options and they competed against each other. Not now.

We honestly grieve for towns that go through what you describe. But what Kinsley is saying - and he has a legitimate point - is that Wal-Mart didn't make this choice. It provided choice, and it was the everyday decisions made by consumers that put the competition out of business.

Is it a level playing field? Hell, no. Does there need to be careful scrutiny of Wal-Mart's growth to make sure that it doesn't get so big and powerful that viable competition simply isn't possible? Hell, yes.

But the stores that didn't provide consumers with viable choices after Wal-Mart came to town have to shoulder some of the responsibility in this turn of events, don't they?

Another MNB user wrote:

Kinsley makes a fine point. This is America, the land of choice. I chose not to haul for Wal-Mart & wait 90 days to be paid my freight bills. Most temp controlled product is sold way before 90 days. When there is no one left to haul for but Wal-Mart, then it is my choice to sell my fleet & retire. These choices are what makes America GREAT.

Regarding Subway's decision to create Atkins Diet-friendly products, MNB user Philip Herr wrote:

I cannot help but wonder what Jared will be eating now. After all he lost weight by eliminating fat (or so they tell us). Now that Subway has positioned itself as the "healthier" alternative to burgers and fried chicken, how can they sell high fat sandwiches also intended to help you lose weight, without confusing their customers? I eagerly await their advertising for these new sandwiches.

We've seen some of the ads. Jared seems to be AWOL.

Regarding the ongoing troubles at Safeway and its Dominick's chain in Chicago, MNB user Mark Heckman wrote:

Kevin, to the extent (new CEO) Randall Onstead is successful navigating through the issues at Dominick’s and the Chicago-based marketplace, the model he creates should have application at other underperforming Safeway acquired properties - particularly Randalls/Tom Thumb in Houston and Dallas.

Safeway appears to be in the process of better understanding the negative ramifications of transitioning the marketing of an established retail brand (Dominick’s and Randalls) to a more standardized, less personalized corporate image. While measurable efficiencies are gained on the “buy side” of the business, clearly consumers relate to the image, services, and quality that took the acquired retailers years to cultivate. Many consumers defect when they sense that “their store” is losing its persona.

Leveraging, not destroying, the equity of the acquired retailer brand is answer for Safeway. Randall Onstead, having been a big part of the successful branding at Randalls, understands that concept as well as anyone in the industry!

For Dominick's sake, we hope you’re right.

We received the following email from MNB user David J. Livingston regarding A&P's steps in Detroit as it works to keep Farmer Jack competitive:

This is typical A&P. Out of touch and of step. They hire people to develop stores. The problem is A&P runs bad stores and therefore new stores are not successful. So what happens? The development people can't go back to Montvale and say "Listen, we run bad stores so there is no point in us building new ones. All we will have is just newer and more expensive stores doing low volume and losing money." If they did that they would be fired. So what they do is take whatever deals they can find, convince Montvale it will work, and it buys them time on their job for 2-3 more years. Then they get fired and the cycle starts all over.

One MNB user weighed in about the recent suit filed by the UFCW in Southern California:

How is it that when a company locks-out its employees and then allows a few to return using false names and Social Security numbers they should be allowed a free pass?

The UFCW has tried to negotiate, removed pickets at the warehouses, and made concessions, only to be faced with an opposition who refuses to budge. Ralphs obviously is looking for qualified, trained personnel since their business is better than the other 2 chains involved. They got caught with their fingers in the cookie jar. They now will be investigated to determine whether or not they are playing fair.

Let the courts decide!

We suspect there will be other precincts heard from on this subject…

On the subject of yesterday's report about President Bush advocating amnesty for the nation's illegal aliens and a change in immigration laws, MNB user and Santa Maria, California, resident Don Edwards wrote:

My most emphatic "NO," on any sort of approval of illegal aliens. Our city is a glaring example of the problems they have caused.

Not surprisingly, we got a lot of email about our report that a new study says that six cups of coffee or more a day can help reduce the risk of diabetes. We were thrilled by this, and only wished that the same could be said of doughnuts.

MNB user Martin Samuelson wrote:

Of course we like your opinion, it agrees with ours. Ditto on the donuts.

MNB user D. Ayer wrote:

I am glad to hear that much coffee is good for something, but before we all get too excited, it is important to remember the key is no sugar and no cream, unless we all want to die off heart complications due to high blood pressure and clogged arteries. If we were to follow every new finding, we could never keep up. I still say, everything in moderation is still the key to a happy lifestyle.

Another MNB user chimed in:

Why not coffee? Dr Atkins has finally proven that greasy, fat laden bacon with eggs and a side of sausage is actually healthy for us. Can it be far behind that research will prove cigarettes to be a healthy for society's population control? How about discovering that a pint of whisky a day will kill the new strains of viruses that have become immune to modern antibiotic drugs?

Maybe our forefathers had it right - eat what you want and die peacefully when the good Lord decides to take you home.

And another MNB user wrote:

Of course 6 cups of coffee a day reduces your risk of diabetes -- with that much caffeine in your system, your metabolism is wired to a level at which any sugar in your bloodstream is not metabolized -- it's vaporized!

If that were true, we'd be the shape of a broom handle…not that of a fire hydrant.

We recently ran a piece about a store in Germany that is specially designed for elderly shoppers, which got one MNB user to email us:

It's about time, I say.

Only - I don't think their should be a specific age associated with our elders... (I think it is really important to not label people).

For that matter, working moms and tired people in general or folks that
are not well would benefit from such a store.

How about tired working dads?

Y'know what really annoys us? Over the years, when Mrs. Content Guy has gone out somewhere and we've stayed home with the kids, people say we're "babysitting." But we're not…we're just taking care of our kids, which is different. (You hire babysitters, and babysitters aren't responsible for college educations.)

The same goes for the whole "working mom" thing. If mom works full time and has kids, she's gets called a "working mom" because the assumption is that in reality she is holding down two jobs. Which she is.

But so, very often, are dads.

And it is about time that they get a little credit.

MNB user John Welsh had the following observation:

Saw a story in the newspaper this week that said that children in the U.S. were more obese and overweight than in any other industrialized nation. The headline said our kids were heavier than even those in Israel or Greece.

Greece? Next thing you know the Greek filmmakers will produce "My Big Fat American Wedding."

Hey…we're supposed to be doing the jokes here!

Regarding our opinion at Pete Rose ought not to be cut any slack by Major League Baseball for admitting - after 14 years of steadfast lying - that he bet on baseball while managing the Cincinnati Reds, MNB user Glen N. Foresman wrote:

It’s interesting to note that in the US we hold our athletes to higher standards than our Presidents………………

First of all, baseball is more sacred than government. Second of all, if we find out that an administration has been laying odds as to when Saddam Hussein would be caught or when the war in Iraq will end, we'll have some serious questions to ask.

The other day, MNB user Mark Boyer waxed enthusiastic about the public relations value of the new black-and-white M&M's, noting that Oscar Wilde once said that "the only thing worse than being talked about, is not being talked about."

Which prompted MNB user Kathleen Whelen to email us about another famous Wilde quote:

His other famous quotation, which was about foxhunting, nevertheless
rings true about the USDA:

"The unspeakable in pursuit of the uneatable."


True. True.

Wilde, of course, being an Irish writer, is a font of great wisdom. He once wrote about wine:

"Now and then, it is a joy to have one's table red with wine and roses."

Words to live by.
KC's View: