retail news in context, analysis with attitude

Published on: November 19, 2008

November 19 is always a day of celebration around MorningNewsBeat World Headquarters, because it marks the anniversary of the first day – way back in 2001 – that we posted “news in context, analysis with attitude.”

Hard to believe it has been seven years. We started with fewer than 200 readers, and have grown to have an email subscription base of about 25,000.

When I started back in 2001, I wrote the following:

“MorningNewsBeat.com is offered free of charge...but I am going to ask you for something. If you like what I'm doing, tell a friend or co-worker. In fact, tell lots of them. And, when you sign up to receive a morning e-mail from me, suggest that they do the same.”

It remains a source of pride for me that so many of you have done this…to the point that even now, we get between 75 and 100 new subscriptions every week. And what is really amazing is how many of you take the time to send me emails – hundreds of them each week – about the issues, serious and light-hearted, that interest and concern you. I am humbled by this, every day.

Furthermore, there have been a lot of wonderful companies that have sponsored MNB over the years, and you have been good enough to show an interest in the products and services they offer. Today’s sponsors are listed on the right hand side of the home page, and I thank them and all the other companies that have kept MNB going over the past seven years. (I can't help but paraphrase the old George M. Cohan line: “My wife thanks you. My son thanks you. My other son thanks you. My daughter thanks you. Several college loan agencies thank you. And I thank you…”)

There have been roughly 1,750 editions of MorningNewsBeat, a total of more than 17,000 stories, and well over five million words (the vast majority of which, believe it or not, actually were spelled correctly!). And I’m going to keep doing it until I get it right…

It’s a privilege and a pleasure being a part of this community. I thank you for that.

That said, let’s get to work…

Published on: November 19, 2008

Interesting piece in the Wall Street Journal noting that at least some of the state sales taxes being paid by shoppers around the country are being kept by retailers, which essentially are being compensated by 26 state governments for collecting the funds.

The total being kept by retailers: approximately $1 billion. Walmart alone reportedly keeps more than $60 million a year through the programs.

According to the story, “Laws in 26 states, largely dating to the era before computerized cash registers, allow retailers to keep a small portion of sales-tax revenue they collect to compensate them for the expense of gathering the funds. Thirteen of those states impose no ceiling on the total amount kept by retailers.”

However, if these funds have been going directly to retailers’ bottom lines, they may find themselves losing those funds because of the current economic environment. The Journal notes that “many states are facing their most severe budget pressure in years. Adjusted for inflation, state tax revenues were down 2.6% in the most recent quarter, according to a report released this month by the Nelson A. Rockefeller Institute of Government. States are looking to fill multibillion-dollar budget gaps through a variety of tax increases and service cuts, including tightening Medicaid eligibility and raising tuition at public colleges.”

Eliminating the part of the law that allows retailers to keep the $1 billion in sales taxes is seen as an easy way of narrowing at least some of those budget gaps. However, it is just a small percentage of the total sales taxes collected in this country, which is more than $146 billion annually in just the 26 states that allow retailers to keep some of the proceeds.

Published on: November 19, 2008

A story on MSNBC says that a new study by the US Centers for Disease Control and Prevention (CDC) reveals that Burlington, Vermont, is the nation’s healthiest city…and Huntington, West Virginia, is the nation’s least healthiest city. The ratings are based on obesity rates, diabetes, exercise frequency and other standard measurements of good health.

Interestingly, as MSNBC writes, both cities “are out-of-the-way college towns with populations that are overwhelmingly white people of English, German or Irish ancestry.”

But there are differences – Burlington’s population tends to be slightly younger, better off financially, and better educated. And, MSNBC writes, the cultures also are different: “Bicycling, hiking, skiing and other exercises are common in Burlington. Neighborhood groups commonly focus on improving parks, working in community gardens and repairing and improving sidewalks … healthier foods are also popular. Grass-fed beef is offered in finer restaurants, vegan options are plentiful, and the lone downtown supermarket is run by a co-op successful in selling bulk rice and other healthy choices to low-income residents.

“Burlington is helped by the presence of IBM and other employers offering more generous health benefits and corporate wellness programs than companies in Huntington, some experts suggested.”

Published on: November 19, 2008

USA Today reports that the US Department of Agriculture (USDA) “has issued draft rules for organic milk that would require that the cows be on pasture at least half the year and get plenty of fresh grass. The proposals are meant to close a loophole that has allowed some huge feedlots to sell their milk as organic, even though their cows rarely grazed on fresh grass.

“Advocates for family dairy farms and organic consumers say that's not what shoppers think they are buying when they pay a premium for organic milk.”

Published on: November 19, 2008

The headlines may be all about the recession and economic hardships being suffered by many Americans, but apparently there remains room in some communities for a kind of luxury.

The Cincinnati Enquirer reports that Kroger has opened its 83rd and biggest Fresh Fare store, in Kenwood, Ohio, featuring “wide aisles, a gourmet experience and everything from dry-aged beef and a sit-down sushi bar to apple tortes and chocolate truffles made by an executive pastry chef … About one-third of the floor space is dedicated to heat-and-eat or ready-to-eat meals … Hearth-based pizzas, a bistro, desserts made from scratch, 12 chefs and 35 line cooks.”

And Gourmet Retailer reports that Bristol Farms has opened up its 16th and newest store, in Valencia, California, with a “a heavy emphasis on the peripheral departments, including deli and cheese, grab-and-go foods, specialty full-service meat, seafood, sushi, and locally grown produce.”

Published on: November 19, 2008

The Food Marketing Institute (FMI) said yesterday that it is launching “a global initiative designed to provide industry-wide leadership, education and advocacy for private brand products, one of the fastest growing segments in the retail business today.” FMI said that it will debut an annual Private Brands Summit and a yearly Business Conference in 2009 that “will feature research and educational programs exploring consumer attitudes about private brand products and how to increase loyalty. The conference will enable trading partners to plan the strategies and tactics needed to maximize private brand sales.”

According to FMI President and CEO Leslie G. Sarasin, “This initiative is a call to action for all sectors of the industry and all classes of retail trade to highlight the exceptional value of store brands to consumers, especially in these challenging economic times. FMI will work with retailers, wholesalers, distributors, manufacturers and other trading partners to facilitate innovation and increase consumer awareness of private brand products.”

“I applaud FMI for taking this action to bring all industry constituents together for such a powerful common cause,” said Milt Sender, chairman of Daymon Worldwide, in a prepared statement. “The message from the 2006 FMI Daymon Private Label Forum in Chicago was heard loud and clear, and that is that private brand is an integral and growing part of the retail food industry and an area of our business that requires greater focus and collaboration. FMI is the ideal organization to drive this process. From the astounding community response and demand, a group of leaders from the retailer, manufacturer, service provider and FMI communities bonded together to form the FMI Private Brands Group.”

Published on: November 19, 2008

• Reuters reports that lower gas prices have resulted in higher customer traffic for the nation’s Walmart stores, according to statements made by Walmart US CEO Eduardo Castro-Wright, who spoke at a Morgan Stanley investor conference. That stands in stark contrast to the reduced trips that were being made earlier this year when gas prices were rising almost every day.

• The New York Times reports that Walmart plans to “give more than 90 million pounds of fresh food annually to the nation’s largest nonprofit organization addressing hunger, Feeding America. The program … comes as food banks across the nation are reporting increased demand, though Margaret McKenna, president of the Wal-Mart Foundation, which oversees the company’s giving program, said the gift would continue far beyond the immediate crisis … The company will not seek a tax deduction for its gift, she said, and thus could not estimate its dollar value.

“Wal-Mart’s annual donation will account for more than 4 percent of the roughly 2.2 billion pounds Feeding America, formerly known as America’s Second Harvest, distributed last year.”

Published on: November 19, 2008

• The New York Times reports that the United States Food and Drug Administration (FDA) has opened its first office outside the US – in Beijing, China, where the FDA hopes to be better able to oversee and regulate the safety of food and medicine exported to the US. The decision to open the office – the first of several outside the US – came after a series of safety scandals virtually wrecked the reputation of Chinese goods ranging from dairy (that included toxic melamine that sickened more than 50,000 Chinese infants) to toys (that were made with lead paint).

• USA Today reports that Belgian brewer InBev has completed its $52 billion acquisition of Anheuser-Busch, creating the world’s largest brewing company, called Anheuser-Busch InBev. The new company will be based in Belgium, but will have its North American headquarters in St. Louis, Missouri.

Published on: November 19, 2008

• Food Lion’s Bloom Supermarkets has promoted Troy Leshko, the company’s director of Strategy and Innovation, to be its new vice president of Retail Operations.

• Golub Corporation/Price Chopper Supermarkets announced that Christina Maltbie has been promoted to the position of Vice President, Assistant Treasurer.

• Winn-Dixie announced that Cheryl Forehand, the company’s vice president of operations, has been promoted to Regional Vice President for the Jacksonville region.

Shawn Sloan has been promoted to be Winn-Dixie’s Vice President of Operations. He most recently was Director of Maintenance and Energy Management.

Rich Cline has joined Winn-Dixie as the Vice President of Operations Support. Most recently, he served as Vice President, Store Operations for Pamida, in Omaha, Nebraska.

Mike Istre, a division president at Winn-Dixie, has been appointed to Vice President, Maintenance, Energy and Property Management.

Published on: November 19, 2008

Got the following email from MNB user David Zahn about the stories covered on the site yesterday:

In one edition you covered the continuum of the industry - a story that had me shaking my head at one company's efforts and applauding another. The speed and efficiency brigade employed at Meijer's are perhaps well intentioned, but risk losing the critical element of reinforcing their standing as a "merchant" in the best sense of the word. Rather than emphasize the store's "soul-less" nature where transactions are completed with little regard for the shopper as a thinking/feeling person as mentioned by Michael Sansolo's commentary - the opportunity exists to make the visit to the store a warmer, more customer-focused, and more positive experience for the shopper/guest.

The other company is Top's that had me nodding in agreement with their willingness to bring Anchor Bar wings into their store. I immediately checked to see how close the nearest Tops store is to where I live to schedule a "market visit" there as quickly as I could!




More specifically, got the following emails about yesterday’s coverage of Meijer’s decision to measure cashier productivity to push for speed at the checkout and in the process reduce talk between the cashier and the shoppers. Both Michael Sansolo and I questioned this decision, wondering whether the company is sacrificing effectiveness for efficiency.

MNB user Jeff Folloder wrote:

I'm trying to decide if I agree with Michael or not. Some chat with the cashier/checker/clerk is probably good. The hard part is knowing where the line exists, the line that should not be crossed. Anything intrinsically personal, such as tampons and condoms, probably should not be commented on. Likewise, anything said that might possibly embarrass or demean the customer should probably be off limits (you'd might be surprised to know that the customer can't afford the brand of xxxx that the checker prefers and I'm sure the vendor would be less than thrilled about the partiality!).

Hearing the checker say "yummy!" when he passes the asiago and artichoke focaccia across the scanner is a good thing. Watching them grimace and say "ugh!" when he rings up the collard greens, not so much.

I remember going into a giant music store in the early 90's to browse and pick out some CD's. I had picked out a Frank Sinatra classic and something from Tears For Fears. As the teenaged clerk rung up the Sinatra CD, he asked me "wow, you really listen to this crap?" I was momentarily stunned and then asked him "wow, do you really work for minimum wage?". In my opinion, store personnel should steer clear of commentary that can be offensive. Bland chat is just fine and probably quite effective. Try finding a music store these days.

One MNB user responded:

How a checker can create a friendly atmosphere but stay productive? Complicated answers with many ideas/solutions from different perspectives. Throwing my hat in the ring ..... at least to start with. How about checkers, department heads and store management be required to learn customers names. I could see and hear how Norm felt ........ "Noooormm" everyone called when he walked through the door!!!! Starbucks has asked its employees to identify favorite beverages of good customers. That gives people a warm and fuzzy ...... develops a connection a sense of community........ a smile from the customer!! Frequently, using their name gets a response from the customer while the checker can continue their work. A bonus is that when other customers hear someone’s name being used, they, too, share in that feeling of a connection or sense of community.

Another MNB user wrote:

I think cashiers are a great last point of contact opportunity. Our cashiers must meet goals for speed and accuracy, speed is 20 rings per minute and accuracy is $.05 for every $500. They always make their goals and they chat it up with everyone. It is built right into our process. Our cashiers will confirm varieties, is it a Fugi or a Braeburn apple, organic or conventional lemon, is it your container or are you buying it new today? Is this a 4 or a 9? I am using your number and it rings up as bulk soap, but it looks like rice to me. Are you aware of the bottle deposit? Would you like a dime for each of your bags or shall I donate that for you? Are you a member? Yes, I can look
up your number. Would you like some help packing your groceries?

Sometimes the cashier will be fishing for dinner menu ideas, recipes, or the time dinner is served (at the customer's) if the cashier is starting to get hungry or curious to know what do you do with Burdock Root?

Cashiers are not automatons, they are the last point of contact for every customer. It should be sociable and pleasant. Some cashiers are really good right away, some not so savvy, but the good news is they get so much practice, they get really good very quickly. I am all for the interactive process.

Another MNB user offered:

I worked for Alpha Beta over 20 years ago and we also were judged by how fast we were. I could beat the system by signing off in between orders while I bagged groceries. To this day I still have nightmares of not being able to sign back on the register with my secret number while the customers back up in my line and stare at me. Another note……there aren't any more Alpha Beta stores or their parent American Stores.

Still another MNB user wrote:

I disagree with Michael Sansolo when it comes to cashiers commenting on my purchases…I’d rather they ring me up with a simple ‘Thankyoucomeagain’. However, I have to share my experience in Meijer (yes, Meijer!) a few months back. Besides some grocery items for the house, I purchased 2 pairs of Dora the Explorer panties for my fast-growing 4-year-old daughter. The cashier saw an opportunity to embarrass me (I’m the 6’, 220-pound father) when she said “Ooh, those are too small for you.” But I had the last laugh when she rang up the next item: a jock strap for my 5-year-old son. In the deepest voice I could muster, I said “That’s too small for me, too.” Her face immediately turned the most wonderful shade of red!

And yet another MNB user wrote:

I have to agree that I don't mind talking about my purchases with a cashier. I have had them ask my opinion on something because they've never tried it, or they have volunteered that they also enjoy an item that I've selected. But Michael's suggestion that they promote store specials strikes me as somewhat useless. If I'm in line and paying I am not going to stop the line to go get the special (if you're in line behind me you really don't want that behavior), and I'm not going to load my car and come back in for it unless it's an unbelievable deal.

As for Meijer - I thought the whole industrial productivity mind set of treating people as machines went out of favor years ago. Someone must have had a Eureka moment reading some old business texts, and no one else thought to stop them. Sounds like desperation to me.

MNB user Sue DeRemer wrote:

There is a local grocery store chain in my city that hires people with learning disabilities to help with bagging at the checkout. Now when I shop there, I know I could bag the groceries myself, and that would be faster and more efficient. And I know the process would go much faster if the bagger wasn't asking me what I was making for Thanksgiving, or telling me his plans for after work. But when I think about what the store chain has given this person, a chance for a good job, the ability to interact with people, then I am a pretty satisfied customer. Although you can't measure that with a computer program.

Now, if store chains want to focus on efficiency, why not do it at the express lanes? When I do my bi-weekly shopping, I EXPECT it to take a long time to check out. But when I'm popping in for a few items and going through the express lane, then I EXPECT it to be a fast, efficient checkout experience. Most of the time it isn't. I'm pretty slow at self-checkout, and I'd actually prefer a fast, silent clerk in the express lane.

MNB user Chris Connolly wrote:

It is disappointing to me how infrequently I am greeted at the checkstand when I check out and hear the term "thank you" at the end of the transaction even less frequently. I can recall starting in the business as a junior high student/employee and being told that I would be fired if I didn't greet and thank every customer. Back then, not only was it easy for employers to make those claims, it was easier to back them up. It served as quite a motivational tool.

I always encouraged my cashiers to ask customers, "Did you find everything you were looking for?" as they began checking out an order. Not only did it have the potential of increasing your average sale, but it kept the conversation focused on the customer. Often it led us to finding new items to carry that we didn't have on the shelves. If the customer didn't wish to encourage the conversation, they would simply reply, "Yes."

Most of all, it discouraged the casual chat between the cashier and bagger about what party they would be attending after work that evening……the type of conversation that is so commonplace today.

MNB user Al Kober wrote:

When I was a store manager, I was very active with the point of contact. There are three areas where this happens. The service deli, the service meat, and the checkout. The checkout being the last opportunity to make a lasting impression. That checker can remove any negative experience that might have happen during the shopping trip, by their behavior. My instructions were, when a customer enters your stand, in your mind, there is no one else in that store. It is your job to make a positive last impression. That customer has made a cartful of choices and she is not sure or confident about many of those choices. It is the job of the checker to reinforce the choices the customer has made. This can be done with a simple comment like, “Wow! That a great steak you chose. I am sure you are really going to enjoy that. Not becoming overbearing but complimentary.

But the first thing is to look at the customer and smile, like saying, I am really glad you chosen to come through my line. Do everything you can to make the customer feel confident with their choice of that store. Another idea is when they scan their store card, their name appears so the checker can read it and refers to the customer by name, Good morning Mrs. Jones. Try this and see the great response you get. Nothing is more rewarding than hearing someone use your name when addressing you.

And yet another MNB user wrote:

Personally, I think this is a lot about nothing. There will always be clerks whose social skills are weak and don’t know the difference between commenting about a woman’s tampon purchase and a wonderful new tangerine that is unbelievably sweet. Store management will always have to address those issues regardless of what type of productivity management tool is used.

On the other hand, I find there are far more complaints about poor customer service due to cashiers talking to friends, baggers and other employees while they should be ringing up orders. For the most part, a simple and sincere, “How are you doing today and/or did you find everything you wanted?” is not going to cost someone their job due to low productivity. Neither will a simple, “Thank you,” at the end of a purchase. The exchange only adds a couple of seconds to the total time.

As someone who spent a number of years as a productivity and labor manager, abet early in my career, a management tool can accurately include an acceptable and allowable time for customer contact. Yes, there will be times when some customers need more help than others, but that can be built into the system as a variable factor. Obviously, there will also be times when it is obvious that the customer doesn’t want any interaction with the cashier.

From a personal standpoint, I usually find that motivated employees like systems where they can prove they are getting better at what they do, while employees with below par work habits are always looking for excuses. One of the critical absences from most operational management tools is they don’t give enough immediate feedback to employees, so they can rate their own work and progress. I always loved knowing what the standards were, so I could do better and be proud of my accomplishments for the day, and it hasn’t mattered what job I’ve held. Actually, I feel the same way today.

This is the way I feel about it.

There are good checkout people and bad ones.

The bad ones are careless about how they scan things, talk to their baggers or friends while working, and don’t really look at or talk to customers.

The good ones are fast and efficient, ask customers if they found what they are looking for, and engage with shoppers appropriately about some of the products they are buying.

None of these folks, in my opinion, are operating in a vacuum. The bad ones have either been poorly hired or badly trained. The good ones…well, you get the picture.

It is management’s responsibility to hire the right kinds of people, and then train them correctly and make sure they feel invested in making the store experience a good one for shoppers.

Five seconds here or there on the checkout experience don't matter as much as some sort of human interaction that differentiates the store from the guy down the block or across the street.