retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: January 16, 2007

    What are the keys to finding the best executives?

    Relationships. Access. Commitment. And an intimate understanding of retailing and manufacturing.

    That’s why when Sun Capital needed a new CEO for Marsh Supermarkets, it turned to Samuel J. Associates – the best kept secret in the executive search business.

    Food industry companies looking for thought leaders at virtually all levels turn to Samuel J. Associates. Companies such as Price Chopper, Weis Markets, Lowes Foods, and Roundy’s. And so should you.

    Samuel J. Associates’ consultants are food industry executives who manage each assignment personally, and who have fostered relationships that go beyond the “placement process”.

    ”We don’t just place “titles” – we place PEOPLE.”



    For more information, go to:
    KC's View:

    Published on: January 16, 2007

    The Wall Street Journal reports this morning that there is a small but definable movement on the part of retailers around the nation to encourage their customers to use PIN-based debit cards with low transaction fees instead of higher-fee signature-based debit cards.

    The Journal writes, “Fed up with the rising cost of accepting plastic, a growing number of merchants are taking matters into their own hands. In the industry, the practice is known as "steering" -- encouraging customers to pay using methods that carry low transaction fees, in particular PIN-based debit cards.

    “Steering may be a boon to merchants, but there's a potential downside for consumers. Banks rarely offer debit-card rewards if customers use a PIN. That's because banks want to encourage customers to sign, which earns them a higher fee. In some stores, it can be hard to figure out how to sign when payment devices are set to ask for a PIN.”

    However, “banks are trying to make signature-debit payments more attractive for customers. In one of the most popular strategies, banks are developing debit-rewards programs that dole out points for signature transactions. PIN-debit users typically don't receive rewards for purchases.”
    KC's View:

    We’ve been urging retailers – both through MNB and whenever we go into a store – for years to push the PIN-based cards. While retailers have been willing to get involved with lawsuits challenging the banks’ practices and transaction fees, many have seemed unwilling to go this far. Until now.

    We’ve always been amazed that a number of retailers didn’t seem to understand why we, as a consumer, would care. (Gee, we’d say, if your costs go up our prices go up. Make sense? And they’d stare at us like we’d begun speaking in tongues.)

    We got particularly annoyed when Visa started spending millions of dollars to promote the Visa Check Card, an entity that, as far as we could tell, has little practical value beside the fact that it generated higher transaction fees for Visa.

    Retailers need to stand up for themselves and their consumers. And we’re glad to see that this is finally happening.

    Published on: January 16, 2007

    The Dayton Daily News reports this morning that a Springfield, Ohio, woman has filed a complaint against Wal-Mart with the state as well as with an abortion rights group, charging that Wal-Mart workers “wouldn't give her morning-after contraceptive pills that don't require a prescription.”

    “Tashina Byrd, 23, of Springfield, said the pharmacist ‘shook his head and laughed’ when a pharmacy attendant asked this month about giving the woman and her boyfriend Plan B. The hormone pills can help prevent pregnancy if taken within 72 hours of unprotected sex.” The attendant reportedly told the woman that the pills were in stock but that nobody would dispense them.

    The US Food and Drug Administration (FDA) has ruled that the so-called Plan B pill can be dispensed without a prescription to woman over the age of 18.

    According to the paper, the pharmacist told the media that “he denied the couple's request for the contraceptive pills because ‘I do not believe in ending life, and life begins at conception.’

    After the pharmacist turned them down, the woman and her boyfriend asked for a store manager who "came over and said, 'The pharmacist has the law on his side.’”

    A Wal-Mart spokesman said that the company is investigating, and that corporate policy says that “any Wal-Mart worker who does not feel comfortable dispensing a product can refer customers to another pharmacist, pharmacy worker or sales associate.”
    KC's View:
    A pharmacy is a government-licensed entity. The government has said that the Plan B pill can be dispensed without a prescription if a person is older than 18. Like it or not, an individual pharmacist has a responsibility to operate within the law, not foist his or her personal morality on a customer.

    If a pharmacist has a problem, then get someone else to do it. But if there is nobody else available, they still have to live within the law. Or get another job.

    Wal-Mart’s responsibility here is to the customer and to the law. And it needs to be decisive in dealing with this event and the guy who decided his views were more important than the entirely legal views held by the customer.

    Published on: January 16, 2007

    This Is London reports that Tesco, along with the rest of London facing “a crippling shortage of affordable homes with rising house prices,” has decided to start building affordable housing for its employees.

    The company is piloting the program in the community of Streatham, about five miles south of downtown London. Tesco plans to build 250 homes, as well as a leisure center and an ice rink; more than 100 of the homes will be designated as “affordable” and made available to Tesco employees. According to the report, Tesco staff will be able to keep their housing if they leave the company.

    Tesco says that if the program proves successful, it could replicate it in as many as 20 other locations around the city.
    KC's View:
    We are reminded of how, in much more dire circumstances two decades ago, Raymond Ackerman of Pick ‘n Pay in South Africa bought homes for black employees…homes that were in neighborhoods that black people were not normally allowed to live in. This was during South Africa’s apartheid period, and it is just one of the reasons that we respect Ackerman as much as anyone we’ve ever met in business.

    The Tesco story, and the Pick n’ Pay story, illustrate how some companies see the issue of employee relationships in different terms, believing that their workers are assets worth investment, as opposed to liabilities to be relegated to the “cost” budget line.

    Published on: January 16, 2007

    The Wall Street Journal this morning reports that while supermarket shelves “are increasingly crowded with pricey organic versions of everything from milk and eggs to hot dogs and beer…some of the options pitched as healthier may not always be worth their higher price tags.”

    Organic food, according to the Journal, “isn't necessarily more healthful than conventionally produced food, say many scientists. Some conventional foods are already low in chemicals and high in nutrients. For instance, most of any chemical residue on a nonorganic banana or orange gets thrown away with the peel, anyway, nutrition and environmental experts say. So careful consumers who want food that packs a health benefit in addition to supporting a cleaner environment may want to consider what organic foods are really worth the higher prices.”

    A guide issued by the Environmental Working Group, the Journal writes, suggests that products like broccoli, asparagus, avocados and onions probably don’t need to b e organic to be safer to eat, while peaches, apples, sweet bell peppers, strawberries and imported grapes tend to be high is pesticides, making organic choices healthier.

    In the case of organic milk and meat, the Journal writes, the animals that they come from “must be given pesticide-free organic feed or graze on land on which pesticides haven't been used for at least three years. The animals also can't be given antibiotics, which critics say can contribute to the spread of drug-resistant bacteria. Nor can they be fed animal byproducts -- leftovers from the slaughter and processing of other livestock that some fear might help spread mad-cow disease.”

    However, the Journal also writes that “not every organic steak or carton of milk hails from a bucolic family farm, where cattle roam on grassy meadows. As bigger companies have entered the organic market, an increasing percentage of food comes from large, industrial-style facilities. It still fits government standards for organic, produced without chemicals or bioengineering. But beef touted as ‘grass-fed’ may in fact come from cattle that spent only a small portion of their lives in a pasture, some critics say.”
    KC's View:
    The complexity of the organic issue means that a) it seems appropriate to cut retailers a little slack when they mess up in terms of signage, and b) we actually need to create a system that is more transparent and specific in terms of giving consumers viable, usable information.

    Published on: January 16, 2007

    The Puget Sound Business Journal reports that Costco CEO Jim Sinegal says he is “disappointed” with the decision made by a federal judge late last week to grant class action status to a gender discrimination lawsuit against the company. The suit alleges that the company has systematically and purposefully denied promotions to more than 700 women.

    Sinegal released a statement saying, in part, that Costco "has a well-deserved reputation for fairness to our employees.

    "It is obvious that there are more men than women in certain warehouse management positions, but statistics cited out of context do not always tell the whole story,” Sinegal said. “We look forward to the opportunity to tell the whole story in the proper forum and at the right time.”
    KC's View:
    Costco does have an overwhelmingly positive image in terms of how it deals with its employees. We’ll trust in the legal system, and we’ll be disappointed if the company is found to be guilty of gender discrimination.

    Published on: January 16, 2007

    The Houston Chronicle reports that as many as four hundred employees at a Smithfield Foods hog slaughterhouse skipped work yesterday to protest the company’s decision not to make Martin Luther King Jr. Day a paid holiday.

    However, Smithfield said that there were not that many absentees and that it could not confirm the reason for the walkout.

    According to the story, “Workers sent a petition to management last week demanding the King holiday. The company said there wasn't time to consider the request but workers could use one of their annual 12 unpaid personal days to observe the holiday. Anyone using up the personal days is subject to being fired after being warned,” the company said.

    Martin Luther King Jr. Day has been a federal holiday since 1986.
    KC's View:
    We think that giving people the day off for Martin Luther King Jr. Day probably would be the easy thing to do. Though maybe, in the spirit of Dr. King’s legacy, it would make more sense for people to take the day off to actually do something to address the issues of poverty and racism.

    That includes all the school kids who get the day off.

    Published on: January 16, 2007

    The Los Angeles Times reports this morning that freezing temperatures in California have destroyed as much as 70 percent of the state’s orange crop.

    According to the Times, “It will take days to make a full assessment of the losses to the $1.1-billion orange crop. But the state's top agriculture official said Monday that damage to fruit and vegetable crops overall will be greater and more widespread than in the devastating freeze of 1998, which destroyed $700 million worth of produce across California.”

    Analysts say the freeze will have an impact on consumer prices, though how high orange juice prices are likely to go is unknown.
    KC's View:

    Published on: January 16, 2007

    The Florida Times-Union reports on the market disruption taking place in Jacksonville, much of it caused by Wal-Mart.

    “While Publix still reigns as the top grocery store in the area with 42 stores and 33.17 percent market share last quarter, its market share dropped 1.19 percent points when compared to the same time period in 2005,” the Times-Union writes. “In second place is Wal-Mart, which brought its Supercenters to the Jacksonville market in 2003, with 12 locations and 26.68 percent of the area's market share, 8.48 percent points up from the same time period in 2005.

    “Winn-Dixie, which has only recently emerged from bankruptcy, was first knocked out of its No. 2 position by Wal-Mart in September 2006.” At the moment, “Winn-Dixie's 45 locations captured 22.83 percent of the market share, down 2.89 percent from 2005.”

    According to the story, “The shake-up means traditional grocery stores are reinventing product mixes and creating niches to maintain market share and sustain sales growth, all while capturing the attention of an increasingly disloyal army of shoppers. Retail analysts say the key to luring customers back to grocery stores is to offer them something unique: Top-notch customer care, eclectic and exclusive products or an innovative store floor plan were examples given.”
    KC's View:
    The challenge, of course, is that some retailers actually reinvent themselves, and some indulge in purely cosmetic makeovers. The latter never work.

    Published on: January 16, 2007

    • Anyone interested in getting into the Spanish retail business should get in touch with Caprabo, the retailer that currently has supermarkets and hypermarkets there. The company says it plans to sell the 65 units it has in Comunidad Valenciana, Andalusia and Murcia regions, stores that have been determined by the company to be in non-strategic areas.

    • There are reports in the UK that Wal-Mart’s Asda Group and Sainsbury have begun to negotiate the possibility of opening a joint distribution center. Asda CEO Andy Bond tells the Sunday Times that while the two chains are intensely competitive, environmental and economic concerns might make it advisable for some sort of collaboration.

    KC's View:

    Published on: January 16, 2007

    • Tesco reports that it generated a 5.9 percent increase in Christmas sales during the final weeks of 2006, and a 9.9 percent increase in total sales during the last six weeks of the year. The numbers were above those forecast by analysts, according to press reports.
    KC's View:

    Published on: January 16, 2007

    We had a lot of debate here on the site last week following the vote by the US House of Representatives to increase the minimum wage.

    One MNB user wrote then that “This whole minimum wage debate seems pointless. Realistically, every household makes a minimum of about $20 per hour. If you make minimum wage the rest comes in the form of government subsidies (Food Stamps, WIC, utility assistance, public housing, Medicaid, Earned Income Tax Credits, etc). If someone gets an increase in pay its just less assistance they can qualify for.”

    To which we responded:

    Hot damn! Talk about an epiphany! We used to think that poverty was a real problem in this country, but we now have been officially disabused of that notion.

    It ends up that every household makes $20 per hour, and that all people in the lowest wage categories aren't really disadvantaged - just stupid and irresponsible.

    One MNB user responded to the debate:

    It's not "politically correct" to say it, but let's be honest and admit that (with some very, very rare exceptions) that the poor in America are either stupid (this includes people that are "mentally retarded" in the traditional sense, have serious learning disabilities, or had kids without a place for them to live) and/or irresponsible (this includes people who don't show up at work and get fired and/or people that drink so much or use so many drugs that they can't remember where to go to work). I live in San Francisco and there is no such thing as a smart hard working guy who "just does not make enough"...

    As for San Francisco, we are going to get a lot more chain stores as more
    and more smart hard working small business owners just give up since
    this year they will have to start paying for:

    1. Higher Wages (even to waiters and bartenders who make over $100K a
    year in tips)
    2. Health care
    3. And the Big one more paid time off (for people who are sick or have
    friends that are sick).

    Another MNB user chimed in:

    I would not have believed it if I did not have an employee that was working the system for all it was worth.

    She wanted to make money but not too much because she would lose all the government benefits. She was making $10.00 per hour (20,800.00) per year. But towards the end of the year she would call out sick or leave early because she did not want to lose the food stamps, WIC and housing that the government helped pay for, not to mention the subsidized day care for which she paid $13.00 per week. Health care was not important because there was always the emergency room. When a promotion came up she deliberately failed the typing test because her standard of living would have gone down if she was promoted.

    Her tax refund was over $4000.00 which by my calculation was probably more than she paid in. She got the check on a Friday and she proudly came in on the following Monday and told me she had spent the whole thing, it was incredible.

    However, not everyone feels this way. One MNB user wrote:

    Wow! I realize the retailing community can be a conservative bunch, but the venom displayed towards an increase in the minimum wage surprised me. It's one thing for a small business owner to raise the issue, but that wasn't the argument raised on Monday.

    Ray England claims that "A federal minimum wage is a joke when it comes to the government doing something for working families." His trickle down economics (hasn't this theory itself been proven to be a joke?) states everyone above the minimum wage earner will be impacted, eventually eliminating the minimum wage job. Minimum wage earners must appreciate Mr. England's thoughtfulness. The minimum wage is at its lowest inflation adjusted value in over fifty years and hasn't seen an increase in ten years during which it suffered a 20% reduction in value.

    He went on to say, "I just can't believe that there are millions of working families dependent on the main wage earner bringing home minimum wage." According to the Economic Policy Institute, "An estimated 1,395,000 single parents with children under 18 would benefit from a minimum wage increase to $7.25 by 2008. Single parents would benefit disproportionately from an increase * single parents are 9% of workers affected by an increase, but they make up only 7% of the overall workforce. Approximately 3.9 million parents with children under 18 would benefit."

    But if Ray England doesn't believe it, then it must not be true.

    KC, I share your views on the user who didn't think low wage earners could handle an increase in pay.

    It's not only the content of these two views that is bothersome, it's the arrogant nature of them. 82 Republicans voted for the increase and small business concerns will be addressed by amendments in the Senate and by the President. But these two users are so against putting money in the hands of the poorest WORKING Americans that they felt the need to offer harsh criticism.

    And another MNB user wrote:

    I was disheartened to read some of the comments regarding the Congressional approval for a minimum wage increase. I think it particularly apt to quote two lines from Dr. Martin Luther King's Nobel Peace prize acceptance speech, Oslo, Dec 10 1964, when he said "I am mindful that debilitating and grinding poverty afflicts my people and chains them to the lowest rung of the economic ladder." It was the case then and unfortunately for millions of Americans it is the case 40 years later. In that same speech he also said "I refuse to accept the idea that the "is-ness" of man's present nature makes him morally incapable of reaching up for the eternal "ought-ness" that forever confronts him."

    Can't we as a society, just for once, get beyond our selfishness and cynicism and allow this Congressional move to stand as a national commitment and promise to our working class poor to make things better?

    Still another MNB user wrote:

    Does (the person) that wrote the paragraph about everyone making at least $20 / hour know that $20 / hour would equal $41,600 per year and the national MEDIAN is $46,000?

    On the subject of food from cloned animals, MNB user David Farnam wrote:

    There was a piece on PBS probably a year ago that was completely eye opening. They were interviewing an emissary from Africa who was on tour meeting with various agricultural research companies like Monsanto and the like.

    I will never forget what this woman said about organic foods. I don’t have a quote but the gist of her message was that she was all for bioengineered foods and making farming easier and producing higher yield crops. They showed farmers in her country struggling against pests, plant disease and substandard soil conditions. She seemed to think that the only reason the US has an organic movement at all is due the plentiful supply of food we enjoy.

    In the fight against starvation I can see her point.

    In the fight against cancer our family chooses organic natural foods.

    In the case of food and milk from clones, we feel strongly that everyone should be able to make a choice – which is why we believe it is so important that these foods be accurately labeled.

    But you’re right. For many people, the choice will not be between cloned food and organic food. It will be between eating and not eating…and it would be arrogant for society not to do everything and anything possible to make sure that their hunger is addressed and eliminated.

    For us, that is a moral issue that is far more important than whether cloning is ethical or moral.

    Regarding the class action suit against Costco alleging gender discrimination, one MNB user wrote:

    Those 700 women at Costco who were denied promotions don't have to feel alone. My guess is that thousands of men at Costco have been denied promotions as well. Imagine someone at Wal-Mart reading this story?

    Working at Costco is like the Holy Grail of retail jobs. Some people pray every day they will someday work for Costco, make a decent wage and get some nice benefits. For others, it’s not good enough. They want to sue the hand that feeds them.

    MNB user David Mace had some thoughts about the news that Tesco won’t be opening stores in the US until the fourth quarter of this year:

    From the ‘tales’ I’ve been hearing the past few years, this chain is for real, notwithstanding the delay in setting up its US stores. From what I hear from KC and others, this outfit doesn’t make a lot of mistakes, figuring it can afford to be a bit cautious in order to do the right thing. This is only a momentary reprieve for US competitors who will soon be faced with an adversary that offers shoppers more of what they want in terms of taste, convenience, variety, freshness and service.


    We got a number of emails responding to last week’s MNB Radio commentary about the importance of doing the little things right, which we illustrated by talking about how the buttons on LL Bean shirts are vastly superior to those on shirts by Territory Ahead shirts…and how not doing the little things right can hurt a brand’s image and sales.

    MNB user W. Patrick McSweeney wrote:

    You’re hit a hot button here (pun intended) and are absolutely right. I’ve got shirts from LL Bean and Lands End that are more than 10 years old and the buttons (as well as the shirts) continue to last. Yet similar shirts I’ve purchased from department stores or other mail order outfits haven’t stood up like those from Bean or Lands End. So I’m hesitant to purchase from anyone else because I know I’m getting a dependable product at a fair price and great value from the folks in Maine and Wisconsin.

    Another MNB user wrote:

    I feel your pain with the buttons. Thanks for a great story to help illuminate this point. When I talk about quality, I frequently use shirts as an example.

    And MNB user Steven Ritchey wrote:

    I think a number of stores would increase their sales if they would pay attention to the details. An example, last year around Labor Day I went to a local chain store to get charcoal and lighter fluid for a group cookout. Found a large display of Kingsford charcoal on the back aisle of the store, no lighter fluid with the display, none on the shelf either. Nothing else was merchandised with it, no butane lighters, rubs, seasonings, just charcoal on the pallet it shipped on. Part of the risk of course is when the customer sees something like this, they will walk and buy their entire bill of groceries elsewhere. As it was, I went across the street to a competitors store and got what I needed. This is not the first time I’ve seen this happen. I think instead of looking for the next “big idea”, a number of retailers to look at how well they do what they do now and get the little things right, this is how you sustain business.
    KC's View: