business news in context, analysis with attitude

We wrote yesterday about the increased calls for a food czar in the US who would run a cabinet-level department that would oversee the various agencies responsible for food safety issues. To which one MNB user responded:

In the past 25 years, we've had a drug czar, terror czar, and a soon to be named war czar. I believe we had a porn czar (Attorney General Edwin Meese). How are those projects (drug, terror, and the war) working out?

Not great. And not so great for the Russian czars, either.

Actually, the whole notion of a "czar" seems sort of anti-American. And we wonder why, when faced with an issue of tremendous importance, we immediately turn to an image that is completely undemocratic…like we can’t depend on our own system to solve the really big problems.

There's something wrong with that.

MNB reported yesterday that Wal-Mart's Japanese subsidiary, Seiyu, has decided to start selling US beef in 158 of its stores there, up from the just 20 units where it has been selling US beef since last March, when the Japanese government began allowing it back into the country, after having suspended its import because of mad cow disease fears.

We pointed out that during our trip to Japan last year, we were told by the folks at Aeon – the nation's biggest food retailer – that local consumers were not interested in American beef, and that it had no intention of selling it. We wrote:

There are two possibilities here. One is that Seiyu is getting so many requests for US beef that it is being forced to expand the number of stores in which it sells the product. The second is that Seiyu believes that it can force-feed US beef to the Japanese customer simply through force of marketing will.

Not sure why, but we'd bet on the latter.

One MNB user responded:

There’s always a third possibility. For the Japanese, the first answer in a negotiation is almost always, “No.”

Actually, it has been our experience that the first, second, third and fourth thing a Japanese person says in a negotiation is, "Please do it our way." Negotiation is possible and generally pleasant…but it takes some time to get there.

We had a piece yesterday about how Wal-Mart plans to "learn" from Tesco when the latter starts opening stores in the US, to which MNB user Mike Griswold wrote:

Tesco has been quite clear that anyone who sells food is the competition. While Wal-Mart has not “gone out of business” competing against Tesco around the world, they certainly are not lighting those parts of the world on fire. Tesco is spending $400 500 million per year on US operations over the next 4-5 years and has every intention (I believe) of competing head to head with Wal-Mart when the time is right. They certainly are not intimidated by Wal-Mart.

Good point.

We think that the Tesco mindset is that it is competing with Wal-Mart in every location, even if there is no Wal-Mart in the neighborhood. It isn’t just physical location – it is philosophy, it is format, it is the essential approach to the business and the customer.

We think that Tesco believes that Wal-Mart has succeeded in appealing to a mass customer base by stressing the lowest common denominator in the biggest possible stores. In the US, Tesco will challenge that by endeavoring to appeal to a mass customer base with small stores that have a more aspirational tone.

It'll be interesting. And fun.
KC's View: