retail news in context, analysis with attitude

Published on: December 22, 2009

by Michael Sansolo

Life has a way of handing you lessons. While shoveling 24 inches of snow off my driveway this weekend, I had plenty of time to contemplate the importance of preparation. Had I taken maybe five minutes in November to check if my snow thrower were actually working, I might have enjoyed this weekend a lot more.

But I didn’t, and shoveling was my penalty.

I’m betting I’m not the only one who makes mistakes like that. Especially in business, we all too often forget one of the great lessons from the Bible: that Noah built the ark before it started raining. No doubt, I would have missed out on that too, but then again Noah didn’t have the NFL on HDTV.

So as I moped my way through the snow it got me thinking about the small things that trip us up. I could reflect on the great experiences I had in the past year because of a small kindness provided by a single individual or, sadly in greater number, the headaches caused by those who found a way to make things harder.

And that got me thinking about George Bailey. You no doubt know by now that Kevin Coupe and I just released a new book on the lessons easily gleaned from movies. (If you haven’t, trust me: there’s an ad for “THE BIG PICTURE: Essential Business Lessons from the Movies” below.) The reason those lessons strike us as working so well is that stories or narratives simply help us say things better. Consider how easy it was to relate to the point on Noah up above.

George Bailey tells us a great story. If you don’t get the reference, George is the main character of It’s a Wonderful Life, the timeless Christmas classic, directed by Frank Capra, about a man who discovers the value of his own life by seeing what the world would have been like without him. (To be honest, this isn’t my favorite seasonal movie. I can watch hours of Ralphie trying to get his BB gun in A Christmas Story, but one viewing of George Bailey is more than enough for me every few years.)

But the scene from It’s a Wonderful Life that gets me is this: It’s when George sees his brother’s tombstone in a cemetery and says that just can’t be. His brother, Harry, has to live because he wins the Congressional Medal of Honor in World War II for a daring aerial attack that saves troops on a transport ship. But because George wasn’t there to save Harry from drowning in childhood, Harry wasn’t in that plane and all the men on the transport died. One life impacts many, many others.

In short, everything we do - good and bad - has consequence; it’s just that often times we don’t know it and unlike George Bailey, we won’t ever get the chance.

So as we close the door on 2009, a year destined to be remembered for tough times, slow sales and dwindling profits, keep George Bailey in mind. Keep in mind that small steps and small gestures may be even more important this year to associates, customers, family and whoever else. Those small steps, especially taken proactively, could mean the difference between success and failure next year.

So have a great holiday no matter what you celebrate. And let’s hope the New Year brings improvement in everything we do.

Oh, and if you know how to fix a snow thrower ... Give me a shout. Quick!

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His new book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .

Published on: December 22, 2009

In upstate New York, the Observer reports that bankrupt Penn Traffic’s creditor, GE Capital, has agreed “to extend its deadline for bids to sell as many of the company's grocery stores as possible. Previously, the deadline to submit bids had been Monday. However, late Sunday night GE Capital confirmed that the deadline to submit bids would be extended to Jan. 20 or 21 with the goal of having a deal wrapped up by Jan. 31.”

Meanwhile, the Watertown DailyTimes reports that Tops Markets “has submitted a bid of more than $90 million to purchase all 79 stores operated by Penn Traffic,” which would put it in direct competition with a $54 bid made by Price Chopper to buy 22 Penn Traffic units.

The paper says that Price Chopper does not intend to enlarge or sweeten its bid in the face of the Tops move.

In addition, “a bid of $36.5 million for all of Penn Traffic's assets also has been entered by a group of four companies specializing in liquidation,” the paper writes.

Published on: December 22, 2009

BrandWeek has one of those late December stories in which it looks at where experts believe that retail and manufacturing innovation will occur during the coming year.

Among the “best bets” for 2010:

• While value has been a key factor during the past year and will continue to be even as the economy improves, BrandWeek writes, “smart marketers are differentiating brands through innovation—with new products, new flavors, new packaging and with marketing/media campaigns with a heavy emphasis on social media to build rapid awareness and product trial. Brands that fail to innovate may also fail to win buyers back from store brands.”

• Retailers will be more specific about product assortment, with some choosing a more edited grocery selection in order to keep costs down, while others will chose to be more expansive as a way of differentiating themselves from the likes of Walmart.

ª Economic improvements can be tracked, the magazine suggests, by how many people choose to eat healthier. The more confident they feel, the healthier their diets are likely to be.

• A plethora of promotional options will mean that traditional trade promotion spending is likely to tighten up.

• Consumers are more and more going to seek out and patronize options that allow them to either buy directly from manufacturers or use online options such as Amazon.com and Alice.com.

Published on: December 22, 2009

The Wall Street Journal reports that while the re-importation of prescription drugs into the US from other countries is not permitted under the US Senate version of the health care bill that was passed over the weekend, the Obama administration plans to “push ahead with efforts to open the market.”

The re-importation of prescription drugs would allow pharmaceuticals produced and approved in the US and then exported to be sent back to the US, where they often are sold at lower costs than identical drugs not exported in the first place.

According to the story, “The pharmaceutical industry opposes re-importation, and the Food and Drug Administration has for years raised questions about the safety of re-importing pharmaceutical drugs into the US,” though the White House is seeking to improve safety procedures and allay such concerns.

It was just last week that the US Senate killed a bill that would have loosened the restrictions on importing prescription drugs into the US from Canada and other countries.

Published on: December 22, 2009

The Beacon Journal reports that Giant Eagle has made a deal with Akron, Ohio-based Summa Health System to operate walk-in medical clinics inside its supermarkets in Wadsworth and Stow, Ohio, and with University Hospitals to run clinics in its Cleveland stores.

The clinics are expected to begin opening early next year.

Published on: December 22, 2009

• Dow Jones reports that Walmart has committed to “boost its investments in Brazil by some 40% in 2010 as it seeks to take advantage of robust growth prospects for Latin America's largest economy, a top company executive said Monday.” This means the company will spend more than a billion dollars (US) there in 2010 - the biggest investment it is making anywhere in the world other than the US. - and open more than 100 stores, increasing its fleet there by about 25 percent.

Published on: December 22, 2009

• The United Fresh Research and Education Foundation announced that it will offer a one-day post-show conference on produce sustainability, April 23, at the Palazzo Resort and Casino in Las Vegas, Nev. The conference will immediately follow United Fresh 2010, which runs from April 20-23 at the Sands MegaCenter in Las Vegas.

“The Global Conference on Produce Sustainability will bring together experts from all points in the supply chain to explore the opportunities afforded by sustainable produce industry practices,” said United Fresh President/CEO Tom Stenzel in a prepared statement.  “Minimizing environmental impact, corporate social responsibility, and economic profitability are the cornerstone principles that will define sustainable practices for every segment of the produce industry.”

• The San Jose Business Journal reports that Phoenix-based Sprouts Famers Market plans to open its first Northern California store, in a former Circuit City store in Sunnyvale.

• TreeHouse Foods Inc. said yesterday that it will acquire Sturm Foods, which manufactures hot cereals and powdered soft drink mixes, for $660 million.

• Costco Wholesale said yesterday that its president/CEO, Jim Sinegal, got a 28 percent total compensation cut during 2009 - his $350,000 annual salary was unchanged, his bonus was cut six percent to $75,000, and his returns on deferred compensation and stock options accounted for most of the compensation cuts.

Published on: December 22, 2009

• ConAgra Foods reports that its second quarter profit was up to $239.7 million, from $168.1 million during the same period a year ago. Q2 sales were off three percent to $3.17 billion.

Published on: December 22, 2009

Teri Richman, a longtime staffer at the National Association of Convenience Stores (NACS), where she served as vice president of research, and more recently a political consultant, died over the weekend after a battle with pancreatic cancer.

Published on: December 22, 2009

We’ve had a lot of emails lately about superior customer service being offered by Aldi...and here’s a new one:

In another example of how Aldi goes above and beyond, I would like to share the experience I had yesterday with a store in Illinois.  After a particularly long and awful day where everything seemed to go wrong I finally made it home to put the day behind me.  I realized several hours later that my wallet was missing.  I knew that I had to have dropped it outside of Aldi as I had made a quick stop there to pick up a few groceries.  I drove back to the store and was thrilled to hear that a good Samaritan had turned it in.  The Store Manager than said she had tried calling me but my home number was unlisted, what she then said floored me “I was just going to drive to your house to return it to you”.  I’m quite certain that had this happened at one of the larger grocer’s in town that this kind of courtesy would not have been extended.




While Ahold is promising to maintain many of Ukrop’s cultural traditions as it acquires the Virginia retailer, one MNB user is skeptical:

Ukrop’s decision to go with Ahold can not possibly have had anything to do with Ahold’s promise “to do the most to prevent layoffs.”  All they needed to do was look at the bloodbath that was caused at Finast when they became part of Tops…Tops when Carlisle took over…or at Giant when Stop & Shop took over.  I can’t think of a company with less of an interest in retaining talent and protecting local marketing than Ahold.

To date, there is no compelling evidence that Ahold has figured out the error of their ways and this is the “kinder gentler Ahold” that we are about to see.




We had a story yesterday talking about the late Sol Price’s approach to employee relations as a paradigm of hoe to do it right, which led one MNB user to write:

Hear, Hear and Kudos, Kevin, for championing a larger world view than 'what's in it for my portfolio' amongst corporate executives!  We should not be surprised that so many of the  current generation of execs have such a polemic view, they are products of the "Me" generation.  If it is all about Me, can you be surprised if they can't see past the inner circle? 
Sol Price was a man of honor and one to be honored.  He kept his eyes on the ball and saw the bigger picture, where he fit in and what he do and do within an honor system that probably made him sleep well at night.  Rest in peace kind sir.  May your legacy resonate yet.
PS. It seems to me that Costco’s Jim Sinegal from all I have read on the man over the years , is a man very much in the tradition of Sol Price.  Too few of these gents are in charge today.  Kevin, keep the message alive and remind folks about  values that  are praiseworthy.  Somebody has to counter the noise from the change-purse.

See the story about Jim Sinegal’s compensation package in “Your Views.”

MNB user Jeff Folloder wrote:

With regard to the two articles in your 12/21 edition regarding Ukrop's and Sol Price... It strikes me that there is a clear line in the sand to delineate the old way of doing business versus the new.  That line is the sobriquet that "Our success is wholly based upon our ability to attract and retain quality associates."  The old way of doing business actually believed it.  It is evident in the Ukrop's desire to give some of the $140 million to their valued employees.  It is evident in how Sol Price took care of his front lines.  It was evident in how my father treated every employee at the food brokerage as a member of the family.  It was once the norm to treat your employees as a valuable, organic asset that demanded cultivation and commitment.  That insured that all were prosperous (sure, some more than others).  Today's employees may be considered valuable, but they are also easily replaced.  How does that build a culture of quality?




We had an exchange yesterday in this space with MNB user Ken Wagar, who thought that I was being hypocritical when I said I mourned for the demise of the Orient Express while being perfectly willing to accept a rule that like that recently imposed in the UK that will eliminate the use of paper checks by 2018.

I responded that while I accept change, it doesn’t prevent me from mourning the passage of certain institutions.

But Ken isn’t buying my rationalization:

My point exactly! Sometimes you don’t seem sensitive to or supportive of the fact that others also mourn personal choice losses that come about due to inevitable change whether it be check writing, newspapers disappearing, books becoming electronic, movies going from theaters to streaming on the internet, the end of Ukrops etc etc.

I realize that most change is necessary and that your role is to be an agent of and supporter of change, this is just a reminder that we all experience changes that are difficult in the short term and while we need to get past them it’s OK to morn them at least initially.
 
Love what you do, just looking for continued balance in your views and commentary.

I have never begrudged anyone the right to mourn changes that some view as progress and that others view as intolerable. At least, I don’t think I have.

On the other hand, I have also suggested that resistance in certain cases, actually is futile...and that it is better to embrace change than to try to stave it off.

As for myself, sometimes I know that it is better to get the hell out of the way.

Published on: December 22, 2009

In Monday Night Football action, the New York Giants whupped up on the Washington Redskins 45-12.