business news in context, analysis with attitude

Last Friday, in a commentary about the financial bent exhibited by Kmart’s new board of directors, we wrote:

    “Our main criticism of the new board is that it is heavy on money guys and light on marketing and merchandising experience…The biggest problem with this industry may be that it is run by middle-aged white guys who don’t actually do the shopping. The question is whether Kmart in particular, and the industry in general, can be made or kept relevant by people who only see the process from one side.”

This generated some email.

MNB user Dan Raftery wrote:

“While I wholeheartedly agree with you about the importance of retail management staying connected to what goes on in stores, I don't think its fair to single out the CEO. As a matter of fact, I think that a store-aware CEO isn't enough. The entire corporate management team needs to be in the stores on a regular basis in order for the store culture to permeate the organization. These days we see it work in other channels more often than in the food channel, unfortunately.

“One big risk of not having a store culture is the alternatives that could exist in its place. Seems like corporations will have a culture of some sort. Reinforcing the focus on the consumer interface is part of the answer to blocking the spread of tempting but less healthy cultures that would otherwise grow in the fertile host. Unfortunately again, quite a few examples of other-than-store cultures can be found in the retail food business.”

Agreed. We were picking on CEOs because they are an easy target. But everybody at corporate levels ought to spend time in the stores.

MNB user Murray Raphel elaborated on exactly this theme:

“Enjoyed your comments in today's morning newsbeat about Kmart's executives shopping themselves.

Struck a familiar chord. In Feargal Quinn's best seller. "Crowning the
Customer," he says, "You need to be able to wear the customer's hat, to walk in their shoes. You need to get a "feel" for the customer. In a real sense you need to be able to become a customer. Few people realize how difficult this is. We call it, "Jumping the Counter."

"We have a rule which requires our top management to do their own household shopping once a month. This gives them first hand experience of what shopping is like, seen from the customer's perspective."

Murray doesn’t mention it, but we will. If you haven’t read “Crowning The Customer,” you should -- it isn’t just a terrific handbook on customer service, it is an entertaining read.

You can order it from, or from Murray's site,

Another MNB user had an opinion about Kmart shopping:

“Would any family member of Kmart's board of directors shop at a Kmart? I don't think even the housekeeper or maid would! It's highly unlikely the board can relate to the common Kmart shopper, let alone be seen shopping in the store. The board is only seeing dollar signs and I have a feeling they're going to be disappointed with the long term results. Kmart's reputation has been badly tainted and there's no reviving it.

“I'm not a snob, but I can't bring myself to enter a Kmart parking lot, let alone shop the store.”

And regarding our commentary in particular, MNB user Richard Lowe wrote:

“Amen! You are so right on! Same with most of the buyers!”

MNB user Gene Grabowski wrote:

“Good, strong point of view. I think you're on to something. Do board members actually visit their properties and shop? This may be an issue in ALL businesses.

Another MNB user asked:

“Are you referring to Mass Merchants or ALL retailers? The middle aged white guy presides over lots of industries where he never meets the end consumer and is proud of the fact that he doesn't have to consort with the people who shop in his establishment.

On the subject of Fleming’s deductions policies, which occupied a lot of our time and space here last week, one MNB user, who happens to be a wholesaler, wrote:

“I have been hearing about the deduction issues of both retailers and wholesalers for as long as I can remember. The whole discussion of deduction or slow pay abuse is an insult to those of us that pay our bills on time and deduct only when necessary or instructed to do so. Do suppliers have terms of sale or don't they, if a company violates those terms, cut them off. If manufacturers would put some teeth in their programs they wouldn't get abused.

“If a manufacturer is letting these things slide then he is does not have a level playing field. Some recent articles on the Ahold mess stated that they averaged 10 days more terms than other retailers. If it's true, I'd like to know how this could happen.

“Doing the right thing pays off over the long haul, but listening to these abuses and the whining of the abused gets tiring, especially when they can do something about it. I'm willing to bet that many of those that got hurt in the Fleming bankruptcy wished they would have toughened their stand a little sooner.

“I think paying your bills on time can be a competitive advantage, finally being proven at this moment.”

On the subject of a possible Tesco takeover of Ahold, one MNB user wrote:

“Tesco /Ahold marriage works from a strategic it builds critical mass for Tesco in Central Europe/Asia and gives Tesco a powerful entry into the USA and Netherlands. However, Ahold doesn't want to sell the crown jewels at fire sale prices and Tesco might be better served to wait until the legal issues are resolved. It all depends on if Ahold will have the cash flow to satisfy the short term requirements of the bankers. The small divestitures in South America don't make a dent in the mountain of debt.”

And, on the subject of Bill May’s promotion at Fleming, MNB user Marv Imus wrote:

“I know Bill from when he worked for Spartan Stores before he went to Nash Finch. I wish him well. It is an awfully tough situation to be placed in. He has the knowledge, the understanding of retail, and the personality and ability to communicate with the vendor and the retailer. If Fleming can meet the bills, Bill will be the right man for this job.”
KC's View: