retail news in context, analysis with attitude

There were lots of emails on a wide variety of subjects before I went off on vacation…so I thought I’d leave them posted in case you'd like to peruse them…

On the subject of the continued protests over a Walmart that may be built near a Civil War battleground in Virginia, MNB user Cheryl Lewis wrote:

I live near the Wilderness Battlefield and am highly upset about the Orange County Board's decision. The worst thing is there are pieces of suitable land as close as three miles down the road that Wal-Mart could have built on, but they refused. You vote with your dollar and my dollar vote will not be going to that store. There are many people who feel this way as well and spoke out at the community meetings. They were ignored.

Another MNB user wrote:

While know can disagree that any Walmart built any where would generate need tax dollars no matter what the economy may look like. History is something we should learn from and not repeat. If in fact this is a historic battlefield then I think we also would agree that building any store on or near the site would in fact effect the site. I find it hard to believe that there is not some other land in the town that would work well. Lets be real, If you build a Walmart " they will come". I hope were not to the point that money as important as it is, is what will be the driver in this decision. Seems a lot of bad decisions both in government and in business is made thinking only of money and the short term gains.

I suspect this debate is going to continue.

MNB reported on a new Rainbow store in Minnesota that is smaller but with more services than other units operated there by Roundy’s, which led one MNB user to ask:

I would be interested in what your thoughts are on this. What does this say to Roundy’s customers at the other Rainbow locations.

I don't think it’s a big deal…lots of retailers operate different kinds of stores under the same banner…. It will allow Roundy’s to judge what works and what doesn’t.

Got the following admonition from an MNB user:

Please refer to this flu as H1N1 and nor preface as SWINE FLU. As responsible journalists to persist with the misnomer of "Swine Flu" is a disservice to the Pork Industry.

It may be. But I think it’s going to be hard to shake that particular name. But I do promise not to stop eating pork.

And another MNB user wrote:

I don't know about the rest of the country, but here in the Northeast, H1N1 influenza won't be coming back -- because it never left. Kids in summer camps here have spread it all summer, and now they are going back to school. At the peak of flu season last winter our stores saw over 10% absenteeism for a period of weeks even though many of our staff had been vaccinated. Now there is no H1N1 vaccination readily available for the average healthy adult, and H1N1 will spread among our employees in addition to the seasonal flu. Add the parents who will have to stay home with sick kids and the at-risk population such as pregnant women and immuno-compromised individuals who should stay away from exposure, and I don't doubt for a minute that we will need to deal with some significant reduction in staffing for a period of time.

A second point: if we're going to protect pork sales in our industry, we need to adopt the CDC designation of H1N1 and stop referring to it as "swine flu."


MNB user Jim Perko wrote:

There have been committees in communities preparing for this for over six months now. My wife (through our parish) has been serving on this committee addressing potential concerns and actions if and when this occurs.

I took it lightly and as time progressed started seeing more and more of what she was telling me becoming more of a reality than not.

You are read by many daily (if not daily by the week-end people reading your column in a ‘catch up’ phase). It will obviously affect more than the areas you mentioned. Just like the recession has had.

Not only will how we do things be impacted, but it will be important as a society as to how we reach out to minimize the suffering and what compassion we will show to those affected.

Thanks for the update.

I have never had a flu shot – but am considering it this time around.

I wrote yesterday about McDonald’s instituting a breakfast dollar menu, and speculation that this means the fast feeder isn’t selling as much coffee in its McCafés as it hoped. I used the opportunity to tell of a recent experience drinking a McDonald’s latte that tasted, to be honest, like swill. (I got the taste out of my mouth with a Starbucks latte…which some will think makes me a coffee snob.)

MNB user Guadalupe Gutierrez responded:

While I agree that specialty coffees such as lattes and cold coffees at McDonald’s are awful, I think their regular drip is really quite good, most mornings this is where I purchase my drip coffee.

Okay… (I have my morning coffee in the kitchen while writing MorningNewsBeat…)

MNB user Carla Baughman wrote:

I'll be a coffee snob with you. When McD's introduced their iced coffee, I thought I'd give it a try. I took 1 sip and thought it disgusting. I only took the 2nd sip because I tried to convince myself it wasn't that bad. The rest went down the drain.

Hope the pipes survived.

And another MNB user wrote:

I had a similar experience with a product they compare to a Starbucks “Mocha Frapachino” and it was hot and had a density similar to water. Not worth the $1 discount from the real thing in my opinion.

Still another MNB user wrote:

The ROI for all the McCafé remodel stuff that the stores and owners had to do isn't
there. Besides that the coffee is not that good.

On the subject on online shopping, MNB user Thomas Murphy wrote:

Online food shopping, whether for pickup or for delivery, will go the way of self-checkout. The early adopters will have a unique service to offer to attract business…a consumer “satisfier” if you will. Eventually, everyone else, e.g., the late adopters, will have to offer this service as a defensive measure to avoid a consumer “dissatisfier”. It just depends on whether you want to lead or follow.

I’m with you.

One MNB user objected to my quoting Jimmy Buffett the other day, saying he didn’t like the singer/songwriter because he finds him to be both politically liberal and anti-Christian. Which sort of surprised me…and this other MNB user:

Wow - that's a new one ... If I recall from his books he was raised Creole/Catholic and now is somewhat agnostic I guess - this gentleman needs to relax a little – more room for us at the shows I suppose - " a thin line between Saturday night and Sunday morning " is playing in my head - back to work…

Most of the email I’m getting continues the discussion of Whole Foods CEO John Mackey’s op-ed piece on health care in the Wall Street Journal, and how his opposition to the Obama health care reform plans has inflamed many of the liberal/progressive customers who disagreed with his opinion.

There was a story yesterday about an investment fund linked to organized labor calling for Mackey’s ouster as CEO, and I commented that it didn’t seem likely that this particular fund would have a lot of sway over Whole Foods’ board. But one MNB user replied:

Doesn’t really matter who backs or owns the investment group…what does matter is what percentage and type of Whole Foods’ stock they own…it takes only a small percentage to get the boards attention.

Much of the response in the last 24 hours has been to yesterday’s “Kate’s BlogBeat,” which looked at the responses to Mackey’s piece that exploded on the Internet…concluding that perhaps Mackey should stay away from the computer keyboard for a while because this kind of viral reaction is a reality of 21st century marketing.

One MNB user wrote:

First…what were you thinking… “But since 11-year-old boys and some corporate CEOs can be rather dense, can someone please take John Mackey’s laptop away, at least for a week?” This statement was a little off colored. Let’s not denigrate down to sexism in your blog discussions.

Secondly…this issue is not about social media…it’s about corporate social activism and how it can impact your brand.

Two cases, 1) Coors Beer during the 70s… leadership at Coors (the family) spoke up on some very hotly contested and very conservative social issues. The comments were discussed on 60 minutes and other “news editorial” venues. Their customers and consumers revolted at their conservative stance and the company was forever altered…the brand began to lose its “Mystical Iconic Brand image” and the company was forced to begin investing large sums of money into advertising (which they had never had to do prior to this issue) 2) Now, nearly 40 years later, Mr. Mackey injects corporate social activism from the boardroom of Whole Foods. What price the company will pay…who knows at this point.

But the issue is corporations becoming social activists without considering their core consumer base or what the consequences might be to their brand.

The only difference between the two examples is the speed at which the comments were spread – one via television (more slowly, but still effective) and one via the Internet (almost instantaneous, outcome unknown).

I absolutely agree with your “lesson learned” conclusion. The issue is not whether you engage in a conversation on radio or in newspaper…or TV…or the Internet social media sites…it’s what you say and whether it is consistent with the corporate brand identity that Whole Foods had so deftly managed (up till now) and the brand image Whole Foods’ loyal and core consumer base has established in their minds through cumulative experiences with the brand.

Verdict: Unless Mr. Mackey takes some key brand driver lessons from the marketing department…he should permanently keep his mouth shut. This is not a “time-out” issue.

At one point in Kate’s piece, she wrote:

There is some intelligent discourse on health care policy in the blogs. But much of it has deteriorated into stereotypical liberal/conservative bashing, with snotty asides spread equally between the “champagne socialists” and “right-wing teabaggers.” And as is always the case with the internet, it is largely uncensored.

Which prompted one MNB user to write:

I am surprised that you would use the term “teabaggers” in describing the non-socialist position. You either do not know its derivation or you are one of the socialists.

True, Kate did use the term. But she was quoting from blogs where those terms were being thrown around indiscriminately. (I’m pretty sure she isn’t a socialist, though I haven’t confirmed her political affiliation. Maybe we should hearings?) I’m not positive about this, but I am pretty sure one can know both the carnal and political uses of the word and not necessarily be a socialist.

Na zdorovje!

Another MNB user wrote:

Boycott Whole Foods, remove the CEO – because he used the brand reputation to champion his personal political views… are you kidding me?

Celebrities and Sports figures do it all the time- in concert, at award show’s, acceptance speeches, talk shows.. and if they do it often enough i.e.: Arnold Schwarzenegger, Jesse Ventura, Sonny Bono, Bill Bradley(Knicks), Jim Bunning (Tigers, Phillies), Jack Kemp (Buffalo Bills) – they get elected to public office OR even become President (Ronald Reagan!).

President Obama himself, when awarding the Medal of Freedom (Recipients included Sidney Poitier, Rev. Joseph Lowery and Billie Jean King.) said: "The recipients of the Medal of Freedom did not set out to win an award….., guided by passion, committed to hard work, aided by persistence, often with few advantages but the gifts, grace and good name God gave them … Their tremendous accomplishments span fields from science to sports, from fine arts to foreign affairs. Yet they share one overarching trait: Each has been an agent of change. Each saw an imperfect world and set about improving it, often overcoming great obstacles along the way.”

Does this not in some way describe the vegan entrepreneur, John Mackey? But because we do not agree with his passions and those things he chooses to be an agent of change for…we will boycott, write editorials and call for the removal of him as CEO- for WHAT? Being outspoken, passionate, committed, persistent….

I am not saying I agree or disagree with his statements; I am simply pointing out that he is not unique in our history and our reactions have been less swift, less severe and sometimes even rewarding…

You make a legitimate point. The only thing I would note is that the people who are attacking him and calling for a boycott of his company are equally outspoken, passionate, committed, persistent … and that this is what makes the debate so fascinating. It is about when passion and commitment collide with brand building and business sense, and whether such things can co-exist. It is a great debate without easy answer.

Another MNB user wrote:

Although I totally disagree with Mackey on Health care, I find that this is an excellent example of why politicians can never speak the truth as they see it. Neither do most public figures whose income depends on perception. We seem to want everyone to agree completely with our “perception” of what’s right. Mackey’s views on Health Care have nothing to do with the quality of food that is sold by “Whole Foods”, nor their pricing structure. If he said he supported slavery to keep prices low then that is a different ball game. Whole Foods sells meat – I don’t eat meat but that doesn’t mean I won’t shop there because of a policy. I agree his laptop should be taken away for the Wild Oats issue but not this one. I do not ask my Doctor what her political views are. I do ask about her qualifications as a Doctor. There are certainly social and moral issues over which I would support or not support a retailer, but the CEO’s view on health care, his political affiliation (with a few exceptions) would not be one of them.

MNB user Ben Ball wrote:

If the issue is that “CEO proselytizing” is inappropriate, why isn’t Mike Duke receiving equal excoriation?
Because on this issue, at least, Duke and Walmart are perceived by this particular group of customers as being on the right side of the issue – they’re in favor of health care reform. (Though I suppose it is entirely possible that the same people who are making their voices heard at town hall meetings around the country could end up protesting at Walmart…which actually raises a very good question. Why aren’t they? Do they not see Walmart as being complicit in what some say is the Nazi/Socialist/unconstitutional efforts by the Obama administration?)

On the other hand, Walmart gets excoriated plenty. Maybe this just isn’t their turn.

Another MNB user wrote:

I like to think of myself as one of the “well-educated progressives” you mentioned in your article. I love Whole Foods, know I am paying more, but also know that “long after price is forgotten, quality remains.” I am a far, left-wing Republican who has been a big supporter of President Obama and his program of change. My initial thought on Mackey was that he was a flaming idiot; however, I never even considered a boycott…where would I go?

MNB user William J McCollum wrote:

I disagree with your assessment of John Mackey’s comments in the Wall Street Journal. First, if people read his op-ed piece, they would note that he stated that health care in the U.S. needs reform and he suggested eight points that would help to address the health care situation.

Second, your statistics of complaints that you site are small relative to the customer base of Whole Foods. With over $8 billion in sales, Whole Foods gets over 150,000,000 million visits a week (based on average sales per customer of $50 per visit, a guess on my part).

Third, many of the strongest voices against Mr. Mackey seem to be union, as evidenced by the “boycott” that was to take place at the Columbus, OH stores yesterday promoted by the unions.

Here’s the question I would ask. Forget about social media for a second. If any retailer in this country - any retailer – received almost 30,000 letters opposing its position on a single subject, don't you think that retailer would rethink its position pretty quickly?

I also think that saying that these are just union activists is an easy way out – it allows you to relegate them to the fringe without taking them seriously.

MNB user Jeff Reinartz wrote:

In response to Kate's blog, considering the fact that Whole Foods' stock is up, maybe all the liberals who are boycotting Whole Foods have been replaced by an equal or larger number of conservatives who agreed with what he wrote. Maybe Mackey's a genius for having the guts to speak his mind after all. Just putting it out there.

I would note that the stock has been up for a while, but you’re right – it hasn’t taken a hit because of this controversy.

And if you’re right – and this was part of a well-planned strategy to get rid of all those annoying liberal customers and replace them with even more conservatives dedicated to natural and organic foods – then Mackey is a marketing genius.

MNB user Don Longo wrote:

For every customer Whole Foods will lose due to Mackey’s comments, there is at least one customer they will gain or who will shop more often at WFM. In case you haven’t noticed the polls, public opinion is running in favor of Mackey and against government-run health care.

We’ll see.

Another MNB user offered:

I suppose I am one of the well-educated progressive champagne socialist Whole Foods shoppers. While I haven't twitted myself yet on the topic, Mackey's tactics/antics have given me cause to revisit my previously passionate allegiance to this store. I voiced my upset to the customer desk on Saturday. (They are armed with a one-page handout written by the store manager.)

Anyway you look at the spin control on this debacle, there are those of us whose bubble has been permanently burst and the stars are no longer in the eyes of many. The giddy romance is done and WF has entered the regular fray. Sorta...Now they are just an expensive place to shop with baggage. The TJ's, Safeway's and Kroger's of the world must be jubilant.

I don't condone censoring Mr. Mackey and taking his laptop away. His freedom of speech, however much I do not agree with his viewpoints, is a good right to have and employing it openly (and honestly) is good. I am actually glad this surfaced so we all have a clearer view of things, Whole Foods and Mackey. Clearly there are a pile of WF followers that had rose-coloured glasses on that needed to be taken off to see better. We now just see price tags on the champagne and sprouts.

Free speech? Yes. Smart speech? No.

And another MNB user wrote:

Although I totally disagree with Mackey on Health care, I find that this is an excellent example of why politicians can never speak the truth as they see it. Neither do most public figures whose income depends on perception. We seem to want everyone to agree completely with our “perception” of what’s right. Mackey’s views on Health Care have nothing to do with the quality of food that is sold by “Whole Foods”, nor their pricing structure. If he said he supported slavery to keep prices low then that is a different ball game. Whole Foods sells meat – I don’t eat meat but that doesn’t mean I won’t shop there because of a policy. I agree his laptop should be taken away for the Wild Oats issue but not this one. I do not ask my Doctor what her political views are. I do ask about her qualifications as a Doctor. There are certainly social and moral issues over which I would support or not support a retailer, but the CEO’s view on health care, his political affiliation (with a few exceptions) would not be one of them.

Which reminds me of a line from the great Michael Kinsley, who once wrote that “a gaffe is when a politician tells the truth.” And maybe when a CEO does the same thing.

Another MNB user wrote:

So your contention here is that a CEO must wear a muzzle outside the office? Mackey, acting as a private individual, submitted a compelling Op Ed to the most respected daily paper in America. Mackey doesn't exactly fit the mold of cigar chomping capitalist looking to grind the workers. (I've stolen the list below from the Whole Foods Forums)

• Mackey lectures at Universities about the horrors of factory farming.
• He says “Right now, Americans have to pretend factory farms don’t exist. They turn their eyes away, because there’s no alternative, there’s no choice. Once there is a choice, we will allow ourselves to be outraged.”
• He makes $1 a year and donates his stock portfolio to charity.
• He set up a $100,000 fund to help his employees with personal problems.
• He’s a vegetarian and his company will not buy from producers that treat their animals unethically.
• He flies commercial, rents the smallest cars, and stays in the cheapest hotel rooms - not because he’s cheap, but because he has no need for largesse.
• He and his wife participate in yoga.
• He gives over $1 million a year to animal welfare groups, education, relief work, and spiritual movements.
• Employees have full say in who they work with - a new employee must receive a 2/3 vote in order to make it past probation.
• Employees also vote on all company-wide initiatives.
• There’s a salary book in every store - “no secrets” management believes everyone should know how much everyone else is making.
• Executive salaries are capped at 14 times the lowest workers salary - If they want more money, everyone else has to get more money first.
• Non-executive employees hold 94% of company stock options.
• Pay is linked to team performance - profit sharing.
• At least 5% of annual profits go to local charities.
• Full-timers get 100% of their health care costs paid for - under plans the employees have selected.
• “They just have a lot more respect for you as a person here” says an employee.

Will we be silencing well reasoned dissent in the name of political correctness?

The problem isn’t that he spoke out. The problem is that he spoke out in a way that irritated so many of his shoppers, who for the moment probably don't give a damn that he does yoga. (Though, if the emails being posted here are to be believed, there is at least some dispute as to whether this will have a long-term impact.)

By the way, I wonder if all the company employees voted on whether Mackey should write the piece in the Journal. Just asking.


For reasons you will see in just a moment, I hesitated before deciding to run this email….

MNB user David Livingston wrote:

Kate wrote "Which begs the question: What was he thinking? Particularly when he had to know what the consequences would be?"

First I'm not going to question the actions of a retail genius. Mackey has made Whole Foods one of the highest sales per square foot grocers in the country. And in the Whole Foods size category, they are probably the highest. The same questions came about when Mackey posted messages about Wild Oats. The result was a few crybabies crying foul but Whole Foods in the end was able to buy Wild Oats and eliminate a competitor. Turned out to be a smart move.

I think Kate is just looking at the reaction on those pinko-commie Facebook pages. I doubt Mr. Mackey is losing much sleep there. I wonder if Kate wrote an op-ed piece of Wall Street Journal would print it?

Really, I wonder just how many of those flunky dope smoking Facebook posting art majors who join the local college's Peace and Justice Coalition even read the Wall Street Journal? For some free advertising in the WSJ, I would write a communist manifesto. John Mackey is a retail superstar and to celebs like John, any press is good press. Let just see where the stock price of Whole Foods is in two years. That will be the real test.

First of all, I would observe that David Livingston would write anything for anyone if it would give him good publicity. That’s been amply demonstrated over the years, and why I hesitated about giving it to him here.

But he makes a point worth addressing.

If there are any retailers out there who think about the people on Facebook and other social networking sites as “pinko-commies” or as “flunky dope smoking Facebook posting art majors,” then they are making a serious mistake. First of all, nobody deserves to be described in such a demeaning and condescending way…especially the millions of people who take advantage and utilize social networking sites on a consistent basis.

The fastest-growing user group on Facebook, I read the other day, is women between the ages of 55 and 65 … not usually the demographic in which one finds “pinko-commies.”

The people using these technologies are your customers. They’re talking to each other about a wide variety of subjects, including the foods they eat, the products they buy, and the retailers they patronize.

The Whole Foods controversy – no matter how you feel about the Mackey op-ed – demonstrates forcefully how vital and vibrant this virtual back fence is. You ignore it, you marginalize it, and you demean it, and you do so at your own risk. And if you listen to people who suggest such a narrow-minded and, to be honest, mean-spirited approach to marketing, then you deserve everything and anything that happens to you.
KC's View: