business news in context, analysis with attitude

We received several emails in response to our criticisms yesterday of Kmart’s new board of directors, which seems long on financial experience but short on any sort of marketing or retailing expertise. (We wondered if any of them actually have shopped in a Kmart or a Wal-Mart.)

One MNB user responded:

“You are ‘right on’ to ask when any of these new board members ever patronized a discount store so they could judge Kmart against Target and Wal-Mart -- or the apparel appeal of Kohl's.”

Another member of the MNB community wrote:

“Does anyone on the board actually have experience selling merchandise? Kmart's strategy seems to based on making Wall Street customer #1.”

Exactly our point.

And yet another email:

“Just once, wouldn't you like to see a name listed in one of these announcements, followed the title "Store Manager" or better yet, "Store

Sure would. But it’ll never happen.

One MNB user responded to yesterday’s story about Ahold selling off its South American operations:

“Tough time to be selling retail operations in South America. Will be interesting to see who the bidders are........particularly if Wal-Mart uses this as an opportunity to bolster their minimal presence in Argentina and Brazil. Ahold has excellent locations in Argentina & Brazil, albeit supermarket size boxes. Also.... look for Tesco to make a run at Ahold's Eastern European & Asian operations.”

Agreed. See the story above in FastNewsBeat about Tesco looking at Ahold’s Poland operations.

In response to yesterday’s story about a lawsuit filed against In-N-Out Burgers because of a child who came down with E.coli after eating there, we got the following email from MNB user Rich Hunsaker:

“The sickest my wife and I ever got was after eating at an In-N-Out Burger restaurant in Las Vegas. We didn't even think to consider e-coli. By the way, that was our last visit to that particular chain.”

We had a story the other day about a piece that ran in the Baltimore Sun detailing how supermarkets are getting into nonfood items so they can compete better against discounters and supercenters that are selling food. One MNB user responded:

“Retailers such as Wal-Mart and K-Mart sell groceries along with their soft line products. Consumers can pick up a loaf of bread along with their purchases.

“Grocery stores are trying to use the same concept, EXCEPT do customers really pick up lawn furniture, CD players, etc, as an impulse item?

“As they are shopping for their weekly menus, do they pass by the display of lawn furniture and exclaim, ‘OH, I forgot I NEED one of those. I'll have to pick one up!’

“Selling items that are not normally carried in supermarkets, do not make that store more unique. All that does is make less room for the store to carry items, or products that the consumers would buy.

“Supermarkets would be far better off by improving their line of perishable goods than to try to compete with retailers by stocking the over-run or discontinued items.”

That’s our sense of it. We understand the impulse to compete in these areas, but we’re not confident that it is to the long term health of diverse and innovative food retailing.

And speaking of diverse and innovative food retailing, we got the following email from a member of the MNB community:

“I just came from the FMI's Marketing and Advertising convention. This was my second year since joining the world of food retailing. For two years now, most of the convention speakers have addressed the need to create differentiation --- to BRAND the supermarket experience. However, all I saw around me were the ‘same old, same old’ look-alike, price and item circulars. I don't know if the speakers were preaching to the choir. I don't know if my marketing brothers and sisters are as frustrated as I am. It seems the organizational design of the food retailing industry is hell-bent on omitting the consumer or anyone who represents her interests from any influence beyond advertising! I'm afraid we've got what's coming to us!”

One of the problems with any conference or exhibition is that there can be a disconnect between the educational elements, which tends to be visionary and challenging, and the exhibits, which are left to manufacturers’ and service providers’ sense of what customers want and will accept.

Retailers have to demand more out of suppliers. Of course, that means they’ll have to give more -- more trust, more collaboration. And we believe that suppliers are willing and able to step up to that plate.

The problem with the food industry -- and this cuts across all segments -- is one of institutionalized timidity. Paralyzed by fear of both Wal-Mart and what the stock market might say, too many retailers take baby steps to satisfy the wrong customer (financial analysts).

Look at the stories that dominate MNB almost every day. Ahold’s US Foodservice debacle. Fleming’s bankruptcy. Kmart’s ongoing nightmare. Are these stories about companies that have put the consumer first, that have really focused on being shopkeepers or helping shopkeepers cater to the shopper.

We think not. We think that these are stories about companies preoccupied with misplaced priorities.

Sure, this is painting with a broad brush, but these are tumultuous times, and they require not just vision, but the unique and dynamic ability to act upon a real vision not just of what the present will accept, but how the future will be.

Time to take a risk. To cast the words “same-old, same-old” from our vocabularies.

In fact, here’s a radical notion. Maybe we never ought to use the words “same store sales” again…because never, from year to year, do we actually have the same stores.


Thus endeth the Friday pontification, fueled by six cups of coffee and a hunk of Irish soda bread.

Have a good weekend.
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