retail news in context, analysis with attitude

Published on: March 24, 2009

by Michael Sansolo

There’s no rule that says you have to answer when opportunity knocks. But that doesn’t mean you won’t lose, especially if the competition is busily opening every door possible.

Despite the gloomy state of economic news, many (including Kevin Coupe and me in our regular columns) have been urging you on to find opportunity. Sometimes when motivation doesn’t work, fear helps. Consider this:

Right now, unemployment is obviously higher than in many years, which has many companies reconsidering recruiting and retention programs. The logic is pretty strong: when the supply of labor is high, why work hard at getting and keeping people. It’s strong logic, but a losing long-term strategy.

And that’s where fear comes in. A number of large foodservice and restaurant companies have been talking about this issue recently with two interesting ideas that demand your attention.

The first is the simple truth that at the moment there is an uncommonly excellent group of potential employees to grab. With high paying jobs in financial industries drying up, top graduating students are having to look elsewhere for employment. That means all companies can view the current situation as an incredible opportunity (there’s that word again) to grab top-notch talent. Considering the demographic time bomb that is still looming in the someday retirement of the Baby Boom, this is a wonderful time to recruit a future generation of leaders.

Think about what happens if restaurant companies get that right and you don’t!

The second point is equally simple and also related to economics. In the current environment, cost containment is essential if not more important than ever. Again, restaurant companies are talking about the importance of stepped up training using the logic that a better-trained employee is more efficient and effective. The return on investment for training, in short, comes quick.

Now there are a couple of ways to look at this. One is to ignore statements coming out of the foodservice industry, which assumes that somehow you have missed just how large a percentage of meals these companies have taken from retail food in the past 30 years. Another option is to ignore the reality that these foodservice companies aren’t alone. No doubt very sharp retailers are thinking the same thing because there are companies (you can name them with little thinking) that never pass up a chance to grab opportunity.

Frequently in these columns I have to explain biases or conflicts of interest due to work I do with various companies. On the issue of training people, I must always offer an apology because my continuing work with FMI on the Future Connect leadership conference falls right into this area. However, this week I’m offering no apology.

The reason I’m working on the FMI conference is because it is an issue I believe in. I believe we have a stunning opportunity to link into the next generation and a stunningly large risk to destroy companies by not being proactive in this area.

It’s far too easy to pass up Future Connect or any other training program because times are tough, money is tight and labor is plentiful.

Or it is time to grab opportunity. It’s your call, but remember: the competition is acting.

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

Published on: March 24, 2009

Bi-Lo, the 215-store supermarket chain with stores in South Carolina, North Carolina, Georgia and Tennessee, has filed for bankruptcy protection.

The company said that its stores would continue operating as it reorganizes its finances.

The move came three days before a credit facility matured, which put the chain under tremendous financial pressure.

Published on: March 24, 2009

Reuters Health reports that a new study out of Tufts University says that people who have a glass or two of wine or beer each day could be increasing their on bone mineral density (BMD), and that beer and wine actually could be better for bone strength than calcium.

However, one of the researchers, Dr. Katherine Tucker, tells Reuters that it is difficult to gauge the benefits and risks of alcohol consumption these days, conceding that this new study comes on the heels of one that just a few weeks ago said that women who drank a glass or two of wine each day may increase breast cancer risk even while reducing the risk of heart disease.

Two important notes. One is that hard liquor does not seem to have the same positive impact as beer and wine, according to the study. The other is that there seem to be fewer downsides for men than for women.

Published on: March 24, 2009

Reuters reports that a new survey from Retail Forward and PricewaterhouseCoopers says that 75 percent of respondents said that they have changed their consumption habits because of the recession, and that the vast majority of these shoppers plan to maintain their new behaviors even as the economy improves.

Published on: March 24, 2009

The Financial Times reports that “US households are continuing to pay more for ‘green,’ environmentally friendly household products, defying a broad trend of shoppers ‘trading down’ to lower priced goods and retailers’ own-label brands.”

Companies like Clorox and Seventh Generation are saying that they are seeing continued growth in this category, which appears to be a testament to the commitment that devotees of the category feel to environmental issues.

According to the story, “The previously dramatic growth rates in the category have slowed, with IRI, the consumer products data company, reporting 30.8 per cent growth in the green cleaning category over the past 12 weeks, against the rates of 80 per cent reported last year.

“US organic food sales are also still rising, but growth rates have slowed sharply, with Nielsen reporting annualised sales growth of just 5.6 per cent in December, down from around 25 per cent a year earlier.”

Published on: March 24, 2009

Starbucks’ woes have been well documented in recent months, but that doesn’t mean that people are reducing their coffee consumption.

According to the 2009 National Coffee Drinking Trends survey, released by the National Coffee Association, 54 percent of Americans are drinking coffee each day, down slightly from 55 percent a year ago – a difference that the organization was statistically irrelevant.

However, 83 percent of those who said they drink coffee daily said they made it at home – up from 78 percent who said the same thing a year earlier.

Gourmet coffee/espresso drink consumption was 14 percent of coffee drinkers, down from 17 percent a year ago.

Published on: March 24, 2009

• The Chicago Sun-Times reports this morning that Chicago Alderman Howard Brookins plans to introduce an “amended redevelopment agreement” that would allow Walmart to build a new store within the city limits. The bill is expected to reignite debate between labor and some city interests over Walmart’s labor policies…which don't seem so onerous to some during a time when unemployment is rising and people have less disposable income to spend.

Published on: March 24, 2009

• Walgreen Co. said that its second quarter profit was down seven percent to $640 million, from $686 million during the same period a year ago. Q2 revenue was up seven percent to $16.48 billion, on same-store sales that were up 1.3 percent.

Published on: March 24, 2009

…will return.