business news in context, analysis with attitude

We got the following email from MNB user Jack Flanagan:

I've enjoyed the discussion of Effectiveness vs. Efficiency over the last several days. It seems to me, however, that casting the debate in these terms misses the larger point. Either approach, done in a shortsighted or excessive manner, can be problematic to a retailer operating dozens, let alone hundreds or thousands, of stores.

Any organization has a continual race going on between those actions that create value for the customer vs. those that destroy value for the customer. Value is measured by customers’ behavior, not a price point. The trick is to keep moving the organization heavily towards value creation while relentlessly rooting out activities that destroy value.

Costco, Trader Joe's, Whole Foods and Tesco are just 4 examples of food retailers who clearly stand (and for years have stood) for something very much valued by their customers. They all are, in their own way, both effective AND efficient. They create value that their customers are willing to pay for.


On the subject of cloned meat and its suitability for consumption, one MNB user wrote:

The more I think about cloned meat unidentified in the food chain, the more I get creeped out. Sometimes, being in the food business is both a blessing and a curse. The blessing…I know a lot more about where my food comes from than the average consumer. The curse…I know a lot more about where my food comes from than the average consumer.

But here’s my thought. If the FDA is unwilling to address people’s concerns about cloned animals entering the food supply, then I suppose a good retailer will have to step up. They don’t have to avoid the cloned animals they just have to identify it if they carry it. A creative retailer could even use it as a marketing strategy to create value on a line of “clone-free” meat. Ultimately when this issue ends up on 60 Minutes, retailers will have to answer that question for their consumers. They might as well get in front of the issue and create some trust with their customers.

We agree. Retailers should insist on providing the labels…though we suspect that the federal government would try and stop them. After all, this is the same government that didn’t want products that have been genetically engineered to be labeled as such, because “it would scare consumers.” Which isn’t just nonsense, but stupid. Consumers need to be informed, not denied information…and we have trouble respecting any entity that tries to deny consumers information or manipulate it.

Yesterday’s story about cloning focused on a story in the LA Times reporting about a dinner where both traditional and cloned beef were served…and that certain people refused to attend.

One MNB user wrote:

I applaud Mr. Schlosser and Mr. Hefter for not attending this PR Circus. Without legislated labeling requirements, these men were smart not to attend and thereby condone this blatant attempt to hide the truth of our food supply from the public. You Mr. Coupe should recognize the implications of such actions and their negative PR.

And, when was it that selective breeding become old technology? I think I remember Dolly the cloned sheep having a markedly shorter life span. I for one do not want to eat retarded cow no matter how succulent.

And haven’t you ever heard of the slippery slope? How long before the acceptance of cloned beef for human consumption leads to cloning blonde-haired blue-eyed 7-ft baby boys and girls because hey it worked on the cows? Jurassic Park was fiction wasn’t it?

I think this technology is not only wrong but dangerous and unnecessary.

We would disagree. We think that we all have to be conscious of both the practical and ethical implications, but to deny the existence and possible advantages of this technology would be a mistake.

And we would correct you on one point. This wasn’t a public relations stunt. This was the Los Angeles Times doing a perfectly legitimate story from an interesting perspective…and one that has a significant amount of resonance, to judge from the response. (We wish we’d thought of it!)

MNB user Dustin Stinett wrote:

I am consistently amused by folks who might believe that there can possibly be a "difference" in the taste, texture, or any other attribute of cloned beef or milk.

Given that it is an exact molecular copy, how would such a thing even be possible?

Whether it's plants or animals, biotechnologists have been fighting scientifically uninformed activists for more than a half-century.

The funny thing is, I've never seen an activist honored for saving the lives of millions of people from starvation by their contributions.

On the other hand, Dr. Norman Borlaug is a Nobel laureate for that very reason.

The only labels these foods need are the ones that are already on them: "Milk" or "Beef."

Eric Schlosser can go ahead and eat his running shoes. In the mean time folks like Alex Avery and Gregory Conko will continue to talk sense to a world in desperate need of a safe and sustainable food supply. Something of which cloning, with over 70 years of scientific evidence behind it, is a part.

Another MNB user wrote:

On one hand you seem to be implying that anyone who refuses to eat cloned meat (despite the fact that the all-knowing FDA has declared it safe) isn’t THINKING.

On the other hand, you ALSO do not trust the FDA.

Where does your “consumer confidence” in the safety of cloned meat come from?

We’re not sure that’s what we’ve been saying.

True, we do not trust the FDA.

But our feeling about cloned beef is that we have no particular problem eating it, more because we trust the science…not the FDA. But we also think that it needs to be labeled as cloned, simply because consumers need to be allowed to make their own decisions about it.

We had a story yesterday about how the United Food and Commercial Workers (UFCW) is trying to stop Tesco from selling alcohol in any of the Fresh & Easy neighborhood Markets that the UK-based retailer plans to begin opening later this year. The UFCW has said that it “is responsible for mailing and dropping off anonymous fliers to Valley homes last weekend that ask residents to protest Tesco's applications for liquor licenses for most of the 20 Fresh & Easy stores it plans to open around the Valley.” The flier “points out that Tesco stores in Britain have been caught selling alcohol to underage teens, a move that, the union says, makes it an undesirable retailer for the Valley. It asks residents to write to the Arizona Department of Liquor Licenses and Control, but the fliers don't say who is behind the campaign.”

The Arizona Republic noted that “the fliers are part of a larger strategy to persuade Tesco to take part in union negotiations by stunting its launch in the U.S.”

MNB user Mike Griswold observed:

This little stunt should not fool anyone. This is solely focused on the issue of organizing future Tesco stores. Maybe a MNB reader from the area can comment on the existing stores track record relative to not selling alcohol to minors. I am willing to bet the local 7-11 and Circle K’s have had their challenges in this area as well.

MNB user Dean Balsamo wrote:

As someone who works almost exclusively with food retailers it's always surprising to hear whom the various unions are targeting with tactics like this. For instance even though some of the San Francisco Bay Area's home grown retailers would like the unions to go after specific, existing non-union competition in their market-like Whole Foods and Trader Joe's-the union puts all of their attention on Wal-Mart. Why? Because that's where they get allot of mileage, with the press and in-turn create some crowd-pleasing accolades with union members-to the frustration of the store owners and managers who see the playing field and players with a different perspective.

Wonder why this union has targeted Tesco when they haven't even opened a store? What are they fighting ? What good does this accomplish-trying to limit business and jobs when the model isn't even up and running?

Another MNB user wrote:

The UFCW’s latest attempt to blackmail Tesco in Arizona illustrates its almost comical ineptness. They’re like a satirical caricature of a union. I can almost see the union boss in a smoke-filled room speaking in an Italian accent: “We’re gonna make them an offer they can’t refuse.” It’d be hilarious if it wasn’t hurting so many people. The union agreement in California this year will be pivotal and instead of far-thinking leaders, we have the UFCW representing us.

I’m an Arizona meat-cutter and, though I’m from a pro-union UAW family, the UFCW’s ham-handed approach to organizing our non-union store left me shaking my head. They tried a similar “blackmail” approach—sending groups of “guerilla” disrupters into the stores, recruiting spies to spot health code violations, and leaking negative observations to the press. All they did harden management’s resolve to keep them out and completely baffle the workers. How is this supposed to help us?

I work with a meat-cutter who moved to Arizona fleeing the aftermath of the destructive strike in California only to find that companies here, union or not, follow the standard set in California. The two-tiered wage structure is wreaking havoc in the day-to-day workplace environment. We haven’t received a cost of living raise in three years and we’re had to start paying part of our healthcare, all the while our companies continue aggressive expansion plans. We need help, but I’m not optimistic that we’re going to get with the new agreement.

It’s shame. With declining real wages and a health care crisis, we could use a strong union. But in this day and age, we need a new kind of union—a progressive-thinking union that will work with management to increase productivity, cut unnecessary costs, and reform healthcare while building stronger wages. After all nobody profits if the company doesn’t.

We recommended yesterday that Starbucks could get a little good press by switching to a free Wi-Fi model, which led one MNB user to write:

The free Wi-Fi offering is huge. I'm not sure why Starbucks and other retailers don't get it!

I got in the habit of visiting Starbucks at least 4 times a week to grab a cup of coffee and/or work on my PC as a break from my home office. However, with the opening of a Panera Bread store in my area, I've changed my allegiance. I now frequent Panera a couple of times a week and have dubbed Panera as my new "offsite office". I not only enjoy a spacious dining area and friendly servers, but also FREE HI-SPEED WI-FI. And, I can get a cinnamon crunch bagel (highly addictive, try one) and coffee for less than $3. I would guess that the revenue lost from Starbucks' pay-as-you-go Wi-Fi program would surely be offset with additional product sales from the increased traffic drawn in by the free Wi-Fi. And, it says something about the culture of the company.

Another thing. Panera offers a loyalty card for coffee drinks. Buy 10, the next one's on them. Safeway has Starbucks kiosks in many stores in my area and they also offer a loyalty program. Why doesn't Starbucks have a loyalty program? Seems like an easy call, unless Starbucks thinks that we are so loyal that we won't go elsewhere..... and that is dangerous thinking!

But MNB user Ted File disagreed:

I learned many years ago that "there is no such thing as a free lunch or latte." If I, as a consumer, were to take advantage as many of those who sign in and sit there for hours, and drink one very slow cup of whatever -- I would honestly feel guilty. Those people just don't get it....after an hour get up and go back to work or school. A nominal fee for the ambience of Starbucks is worth it.

And, regarding the whole "search for Starbucks’ soul” discussion, MNB user Jim Swoboda wrote:

I cannot applaud Howard Schultz's message enough. They are losing their way from my perspective and it is clearly driven by trying to be everywhere, all the time.

My personal experience is that the Starbucks stores are MUCH better than the Starbucks stores within a store. As an example, we have Starbucks in many food retailers in our city. The coffee is served from an air pot and they do not follow the 18-minute rule, or whatever time limit it really is, where they throw the coffee out if not sold. The stand-alone stores clearly do it better.

Having all of the locations in stores where the formula changes "waters" down the brand. Sometimes bigger is not always better. Quality can never be sacrificed for quantity or one runs the risk of losing one's way.

KC's View: