business news in context, analysis with attitude

Responding to our story about increased customer satisfaction measurements, MNB user Mark Heckman of Strategic Retail Solutions wrote:

“Increased customer satisfaction could be driven by many things and is generally good news. If the University of Michigan is asking how satisfied customers are overall and across all channels, it's likely this is being driven by the increasing number of shopping options and store formats. However, As an experienced researcher in the supermarket channel, I have found satisfaction to be an increasingly weak predictor of customer loyalty (which is really how most retailers interpret high satisfaction scores). There are research techniques available that dig a bit deeper into the stability of a retailer's customer base, but asking consumers how satisfied they are with stores, departments, etc, is dangerous.

“Satisfied supermarket customers are spending more and more of their dollars with alternative formats creating the opportunity for a false sense of security for retailers whose research tells them they are satisfying their customers needs.”

MNB user Mike Hamelin put it another way about the same subject:

“Clearly, we're lowering our standards.”

Here’s our feeling: the studies may suggest that customers are satisfied, but think of your family, friends, neighbors and acquaintances. How many of them speak glowingly of how satisfied they are with the shopping experience? And how many complain?

Yesterday we wrote about Albertsons testing Toys R Us departments in five of its stores. MNB user Susanna Wilson wrote:

“From supply-side, this is a good thing as orders from manufacturers should increase. Perhaps better quality, higher end merchandise (introductions) will also improve.

“But, will store-within-a-store tactics diminish/improve sales at the main outlets ... as in cosmetic sales in grocery stores vs. department stores?”

Good question.

Commenting on yesterday’s exclusive e-interview about Cannondale’s PoweRankings, MNB user Mark Boyer wrote:

“Appreciated the interview w/ Cannondale on what makes a company a leader. Have sent the article on to a number of retailer and supplier clients.”

That’s what we’re here for, (See “A Note From The Content Guy” below…)

On the subject of country-of-origin labeling, MNB user Tom Dominick wrote:

“It appears that the real point behind the country of origin labeling is to differentiate those items grown, produced, etc. in the USA and promote US products. Instead of mandating full country of origin labeling, why not just make guidelines for grown, produced, etc. in the USA? Anything not labeled as such would be assumed to be from outside the US.”

Commenting on our story about Kroger promoting Donna Giordano to the presidency of Quality Food Centers, MNB user Richard B. Oakley wrote:

“Donna is one very sharp lady and well-deserving of this promotion. I first worked with her when she was in charge of bakery at King Soopers where she did a great job of turning the bakery program around.

“I think she will be a definite plus for QFC in the Seattle/Portland market!”

Finally, we have an assessment of the Safeway-Dominick’s situation from one of our favorite people, Glen Terbeek:

“The Safeway situation once again proves that the fascination with centralization, standardization, and scale (supply chain efficiencies) quickly and easily looses to local marketplace relevance. It is particularly costly when "it is done to" local market effective retailers and their employees. It is obvious that the demoralizing impact on these very front-line people that make the local market work is quickly felt by the very customers that they serve.

“I believe that the same thing happened to Kmart when it centralized to their new Troy, Michigan headquarters in the 70's; they demoralized a very effective and profitable decentralized organization at the time. From marketplace relevance to centralized irrelevance. Will they ever recover? On the other hand, Wal-Mart continues to gives the people at the local market significant local market authority; relevance.

“I would guess that no one in California is relevant to the local markets of Dominick's or Genuardi's. Or for sure to their customers and employees. When will retailers start listening to the shoppers and employees that serve them, and not just the manufacturers of nationally branded (non-differentiated) products?

“The sustainable future (as always) will be built on organizations that are relevant to the local marketplace, store by store. The first step is to start measuring retail success around marketing productivity, not supply chain productivity; the later is for distributors. All chains started with market productive local stores, why do they lose it? I would guess that the shoppers and the employees at the local stores know.”

We’ve said this before, but for those of you who weren’t paying attention…

Glen’s book, “"Agentry Agenda: Selling Food in a Frictionless Marketplace,” is must-reading for anyone who wants to cast a fresh eye on how to do business in the food industry. It’s available via -- so do yourself a favor and buy it.
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