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    Published on: January 8, 2010

    IGA Inc. confirms this morning that Thomas S. Haggai, the organization’s longtime leader, will relinquish his titles as president/CEO of both IGA Inc. and IGA Global, though he will remain as chairman of IGA and as the company’s ambassador to China.

    Mark Batenic, who has been serving as president/CEO of IGA USA, will take on the roles that Haggai is ceding.

    The organization says that this is part of a natural evolution as Haggai, 79, steps back a bit from the company that he has served for almost 40 years.
    KC's View:
    It’s funny. When I started writing this piece, I inadvertently wrote that Tom Haggai was IGA’s spiritual leader. But when I thought about it, I decided that this is precisely correct - that he has served as far more than the organization’s chief executive. He’s been an effective evangelist for both the spirit and reality of independent retailing, and that isn’t going to change just because he’s stepping back from some official responsibilities. I fully expect that one of these days, I’ll be getting on a plane and there he’ll be, jetting off to some foreign country where he’ll raise the IGA flag and preach the IGA religion with unlimited enthusiasm.

    IGA clearly is in good hands, by the way. Mark Batenic is smart, savvy, tough, and just as committed to independent retailing. He has a different style than Tom Haggai, but maybe that’s a good thing when you are following someone of just long-standing stature.

    It isn’t an easy time to be an independent. But smart and committed leadership is critical if IGA is going to continue to survive even in these extremely tough times.

    Published on: January 8, 2010

    The Sacramento Business Journal reports that Michael Teel, the former CEO of Raley’s Inc., has a new job - as the CEO of Raley’s Inc.

    Teel is the grandson of company founder Tom Raley, and the son of Raley’s owner Joyce Raley Teel and her husband, Jim Teel.

    He left the company in 2002 and launched a specialty foods business called Good Eats. The story says there is no word yet what will happen to that venture.

    Teel said that his goal is to retain the company’s status as a privately held chain. “This is a special company,” he said. “We are unique in how our employees offer service to our customers. I value that strength, and see it as essential to who we are. As a leader, my role is to foster this unique quality and allow it to thrive.”

    The company’s previous CEO, Bill Coyne, resigned from the company late last year.

    In other Raley’s news, the company’s CFO, Don Ball, is departing after just a year on the job.
    KC's View:
    Staying independently owned while remaining relevant and vibrant isn’t going to be the easiest job in the world for Raley’s. When you see legendary regional companies like Ukrop’s being sold, you have to wonder what the future is for such chains.

    It isn’t impossible. But it ain’t gonna be easy.

    Published on: January 8, 2010

    Here’s the kind of story that you want to have written about your company, this from the Albany Times-Union:

    “Wegmans corporate jet came to Albany on Thursday, but not to scout out sites for new supermarkets.

    Instead, a top Wegmans official and several representatives of the Hillside Work-Scholarship Connection, a highly successful 22-year-old effort to keep inner-city students in Rochester from dropping out of school, were meeting with Gov. David Paterson's staff, which is looking at the possibility of supporting a similar program statewide ... The work-scholarship connection, established in 1987 by Bob and Danny Wegman, seeks to help economically disadvantaged children in Rochester's most troubled areas.”

    According to the story, “The graduation rate of the participants has doubled to 62 percent from 31 percent, he said, and when the student also works at Wegmans, the graduation rate goes to 73 percent. The program currently serves 2,300 students in Rochester, but the goal is to increase that number to 6,000. Wegmans also has begun a program in Syracuse.”
    KC's View:

    Published on: January 8, 2010

    Supervalu is out with what it calls its “Inaugural Snack Down Survey,” revealing that “nearly 90 percent of American football fans say they ‘never’ or only ‘sometimes’ feel guilty about what they eat when watching football games, yet 81 percent admit to eating ‘none’ or just ‘a few’ healthy or better-for-you foods during a game.”

    Other details from the survey:

    • “The survey shows that chips or other salty snacks, such as peanuts, popcorn and pretzels, are hands down the favorite game-day snacking items among American football fans.”

    • “While 89 percent of fans surveyed plan to watch one or more of the NFL playoff games or Super Bowl in the comfort of their own homes this year, the recession hasn't changed Americans' habits with respect to how much money they intend to spend on football game parties.”

    • “About 78 percent of gridiron fans plan to spend about the same amount as previous years, with 12 percent saying they will spend more.”

    Snack favorites seem highly regionalized, with In Philadelphia, football fans saying that Philly cheese steaks are their top game-day snack tradition, Chicago fans going for hot dogs and Chicago deep-dish pizza, and Boston fans preferring clam chowder and Boston baked beans.
    KC's View:
    Based on what I hear on New York sports radio, if the Jets don’t win the game against the Bengals this Saturday, the snack of choice there is going to be hemlock.

    Published on: January 8, 2010

    California-based Unified Grocers, which serves as a grocery distributor to retailers in the western US, announced that it has “exercised a provision in its current revolving credit agreement that increases the total committed funds available to the Company from $250 million to $275 million.” According to the prepared statement, “The provision allows Unified to expand the capacity of its existing credit agreement to a maximum of $300 million without changing the favorable terms and conditions of its existing revolving credit agreement, which expires in 2012.”

    “We believe it is prudent to increase our borrowing capacity when we have the opportunity to do so and the terms are favorable," said Unified’s president/CEO Al Plamann. "This transaction meets that criteria and will provide us with greater flexibility in the future.”
    KC's View:

    Published on: January 8, 2010

    The Wall Street Journal reports that members of the Cadbury PLC board of directors have meet with their brethren on the board of the Hershey Co., hoping to convince them to launch an acquisition bid to rival Kraft’s efforts to acquire the British chocolate manufacturer.

    According to the story, “The Cadbury board members have told the Hershey directors that they would support a bid by the Pennsylvania company, and they have provided some guidance on the kind of price that would draw board support, these people said. In these talks, Hershey has sought direction from Cadbury and disclosed financial terms and the structure of a possible offer. Hershey has also inquired whether Cadbury would be open to selling certain assets, these people said.”

    However, the Journal notes that these discussions are highly preliminary and that Cadbury, on the record at least, continues to state a preference for remaining independent.

    The Journal writes that if it decides to make a move for Cadbury, “Hershey faces some major obstacles if it bids for Cadbury. As a result of a Pennsylvania law enacted after an aborted $12.5 billion sale of Hershey to the Wm. Wrigley Jr. Co. in 2002, the Hershey Trust must get the state attorney general's approval for any transaction that could threaten the trust's control of Hershey.”
    KC's View:

    Published on: January 8, 2010

    • BJ’s Wholesale Club reports that its December sales were $1.16 billion, up from $1.06 billion during the same month a year earlier. Same-store sales were up 4.8 percent.

    • Target Corp. said that its December same-store sales were up 1.8 percent, with total sales for the month up five percent to $9.7 billion.
    KC's View:

    Published on: January 8, 2010

    This happened while we were off, and so MNB missed the fact that Don Watt, founder of Canada’s DW+ Partners and the man behind Home Depot’s orange logo, and the look used for the President’s Choice and No Name brands, passed away late last month at age 73.
    KC's View:

    Published on: January 8, 2010

    MNB had a story a couple of days ago about a new poll suggesting that a lot of people in this country are unhappy in their jobs. It generated a lot of very interesting reactions...

    MNB user Joe Manganiello wrote:

    Gosh! Let’s see how has the tax base increased over the past 22 years, not only on paychecks, but on  employers? Is more expected because it is getting harder to generate sustainable profits under existing business models due to continued intrusions of government regulations? Especially  small business, at least spoken of as the backbone of American business, is fracturing under the burdens currently imposed and potentially imposed with new health care reform and cap and trade legislations. Like you, I would agree, those who have jobs should be grateful to be employed in the current environment. I am sure the stress of an unstable future, combined with shrinking net pay/disposable income and poor saving practices put a “squeeze” on attitudes. Just a thought.

    Another MNB user wrote:

    On the one hand, I fully agree that we are responsible for our own happiness.  On the other hand, I totally understand the reasons for declining job satisfaction.

    When I entered the work force (not saying when) I worked a 40 hour week.  I did my job with enthusiasm and joy.  I had a career, and knew that some day far in the future I've have a good pension and retiree health care benefits.  I got 14 days vacation, right from the start.  14 sick days per year.  And, if I did work more than 40 hours per week, I had my choice of overtime, or comp time.  I had an hour for lunch (amazing!) and my co-workers and I would go out for lunch or for a walk. I had time to spend with my children after work each day.

    During the 90's came the great "productivity boost". Employers decided they could do more with less.  My work load increased, since there were fewer people to do the same job.  Work days lengthened, lunch shortened. I didn't have time to go out to lunch with friends anymore. I got home later each night.

    During the 00's this trend expanded, since laptops meant we could work at home, too.  Now, the work day never really ends. And there's enough work to fill 24 hours, if I could work without sleep. (not all of it productive in my mind). Oh, and my pension is no more…  nor will I have health care benefits when I retire.  I only interact with co-workers during meetings, since I long ago stopped having time for lunch at all. I have no sick days, and if I'm off work more than 1 day I need a doctor excuse.  If more than 3 days, I don't get paid unless I go through a lengthy claim process.  I know that at any time my company is likely to outsource my job (new euphemism for outsourcing office jobs is "shared services"). I know I won't be able to get a new job making what I make now.  I still love my work, I just wish I had time for a real life, too.

    One can argue that American workers had it "too good" in the past, and needed to be competitive with foreign workers.  I think that's as stupid as when I hear some people say that teachers shouldn't have pensions, because no one else does. Why not try to raise the level of all workers, rather than lower American standards?  European nations have managed to prosper while maintaining their standard of living. The US never even tried.

    We did have it good.  And we would still have it good if American companies felt some sort of patriotism towards their country.  Some sort of pride in our way of life, and our lifestyle.  Instead, as American workers were asked to do more and more, good manufacturing jobs were sent overseas, so that companies could sell product cheaper to those same American workers. Retailers demanded lower prices from manufacturers, never caring what that would eventually do to their customers.
     
    Our middle class is shrinking.  Our children will likely be the first generation in the history of our country not to have as good a lifestyle as their parents did.  They realize this. They understand that they may work very very hard their whole lives, and still not be any better off than they are now.

    So, you can tell American workers to stop whining and be happy they have a job, but I think it's too late at this point.  As Joe Strummer once sang:  "If you want the honey, don't go killin all the bees".


    MNB user Art Ames wrote:

    This past year, our Co-op experienced the lowest employee turnover rate ever. When the economy first substantially changed, we let our staff know that their jobs were safe, that we would not reduce their hours and add to the “underemployed” statistics, and that we would reduce personnel expenses through attrition. It helped all of us feel confident that we could indeed work together. However, we also let our employees know that there was no longer excess room for abusing the established system and those weaker performers would need to “pick up their game”.  As employers, I believe that we often underestimate the capacity of our employees to adapt and cooperate, and often simple and inclusive communication is all that it takes.

    That being said, for the last several years I have absolutely noticed that the percentage of perennially dissatisfied employees is rising. We all know “the type”. When confronted with this type of personality, I do like to ask the individual to describe the last job where s/he was indeed happy or satisfied. Most often, I’ve been met with silence and a blank stare. Somewhere along the way, the relationship between employer and employee has changed. Ideally, this should be a “two way street”, with clearly identified expectations. Those employers who insist on taking and not giving back through living wage structures and even handed treatment will suffer if or when the economy improves. Those employees who are consistently dissatisfied in spite of best efforts or who continue to have an exclusive” what’s in it for me” attitude perhaps also need to adjust accordingly or find themselves among growing unemployment statistics.


    Another MNB user wrote:

    Reports of declining job satisfaction have missed a few probable causes:
     
    1. Many workers may perceive that advancement isn't likely despite their best efforts because such opportunities are rarer and because, above mid-level management, they’ve often been filled by outside talent over the last two decades.
     
    2. Over the same period an ever-widening compensation gulf has spread between the uppermost echelon and those just a rung or two down the ladder … and that gulf is widening ever faster. Many may feel they’ll only witness prosperity from the opposite shore.
     
    As the compensation gap widens, all too often a communication gap follows suit. Wealth insulates. Often, your immediate circle is equally well-compensated and perhaps unaware or unappreciative of the increasingly complex and  dynamic role your mid- and low-level managers fill. It’s a disconnect that takes a great deal of effort to overcome.
    In short, the past two decades have seen an almost perverse excess in executive compensation even as salaries for most workers are flat, benefits are being cut, workplace demands are increasing, and advancement seems less possible. You should be thankful for your job and career, to be sure – but “satisfaction” is  a higher bar to achieve. To do so, you must believe what you do provides for your basic needs, has value to others, and lays a path to future success.


    And, from another MNB user:

    There are several reasons for the low happiness quotient of workers. Top management has found ways to pay themselves more money by either removing defined pension benefits, lowering employee's salaries and wages, reducing or eliminating health care benefits or just plain laying us off! Who would be happy in this kind of work environment? When expanding profits is at the expense of my job or the benefits of my job, how can that strategy contribute to my happiness?

    The CEO's in America are not fostering a climate of creativity. Workers feel unappreciated and enslaved by their jobs in addition to how difficult it is to get ahead in their company. As they have seen their standard of living decline they are using more credit cards to pay for the basics. Now the banks have taken advantage of them by increasing their interest payments. The financial mess on Wall Street caused the current high unemployment rate and a largely unregulated banking industry --thanks to congress who has only protected the perpetrators not the consumers. The government who is supposed to protect us citizens has abandoned us by listening only to lobbyists who feed their re-election campaign coffers because it is so expensive to run for office. This is also why our food supply is unhealthy, why we cannot get affordable health care and a host of other issues that favor the monied interests.


    Another MNB user wrote:

    I wonder how many of the 55% unhappy were only temporarily unhappy with their job. No matter how much you love your job….there are those days or periods that you would like to…well you get my drift.

    And, if companies cared about their people and the natural resources they consume daily as much as they do their capital and facilities…we would all be happier.


    This email also makes a point worth paying serious attention to:

    I'd like to see a worker happiness survey that shows dissatisfaction by generation. My guess is the millenials that are just entering the workforce will most often be dissatisfied by the "nature of their positions". I say this as a millennial who has friends that have entered the workforce within the past 2-3 years.

    As a generation, millennials want positions that offer them true responsibility and the chance to make choices that affect business results. The unfortunate reality is that most companies place their entry level employees in positions where their day-to-day decisions cannot affect business results. These companies have various reasons for this, most commonly "they don't understand the industry yet" and "they don't understand the Company X way of thinking yet." The companies (mostly Fortune 500 by the way) go out and spend thousands of dollars recruiting bright young minds with unlimited potential and then don't give them a chance to flourish. Most companies need to give their employees, especially those entering the workforce now, the chance to spread their wings. Limiting how they can affect the business eliminates some risk but also eliminates potential rewards.

    I realize that a lot of people will say that millennials should be "happy to have a job" or that they should "learn to pay their dues" but that type of thinking is postulated by those who haven't taken the time to understand the new generation of workers. On the job happiness is much more important to this generation then salary, benefits, and job security. 3-5 years of not being able to directly affect the business will result in young talent fleeing the company. Even worse, in tough economic times, it will result in young talent staying in their positions, lacking motivation, turning in work that's just good enough to keep them moving towards the next promotion, finding ways to avoid doing tough projects, talking bad about the company to fellow employees and potential recruits, and using your company as a paycheck while they focus on finding a better opportunity. Nothing is worse than a worker who is no longer engaged and is using his or her brain power to avoid doing work while still appearing to be a good employee to supervisors. And if you think this isn't happening right now at your company...you're deceiving yourself.





    MNB user Luci Sheehan had some thoughts on the passing of former Stop & Shop and Ahold USA CEO Bill Grize:

    What a great guy and such a huge impact on the industry.  Even after his retirement, Bill continued to give back.  He served with me on the Board of the Network of Executive Women.  There are only a few men on this board, but Bill’s contributions to NEW’s growth and development were significant.  He brought great down to earth, reality check comments to the blue sky thoughts of some of the women on the board—and always with a smile and light touch.





    At the risk of seeming to pay myself on the back, I do want to run the following email from MNB user David L. White:

    I just wanted to drop you a line and let you know that, mainly because of you, I am now the proud owner of a Kindle from Amazon.com.  I had no real knowledge of the Kindle prior to the references you made on Morning News Beat; after reading your comments, I got curious and did a little research.  When my wonderful bride asked what I wanted for Christmas, I only had the Kindle on my list.  Sure enough, she took care of me and I found one under the tree and absolutely love it.

    Within a couple of minutes of taking it out of the box, I started reading my first book and using the Kindle feels just as natural as holding a book.  My only complaint is that the screen is not backlit for night reading, but I am about to order a reading light to take care of that.
     
    I just thought you might be interested in your on-going influence in your reader’s lives.


    I’m flattered. Enjoy.
    KC's View:

    Published on: January 8, 2010

    The University of Alabama Crimson Tide defeated the University of Texas Longhorns 37-21 last night in the BCS Championship Game.
    KC's View:

    Published on: January 8, 2010

    Tina Brown’s TheDailyBeast.com is one of my favorite websites, serving both as an aggregator of content as well as generating original editorial material. This week, Brown started the year by listing four things that she thought people should stop complaining about. (Actually she used another word, not “complaining.” But you get the picture.)

    Anyway, one of the pieces of conventional wisdom that she believes is essentially incorrect is the notion that newspapers are being killed off by the internet, and that investigative journalism is an endangered species. Here, in part, is what she said about this fallacy:

    “American newspapers are dying mostly because they were so dull for so long a whole generation gave up on them. They needed to innovate back in the Fax Age of the 1980s but were too self-important and making too much money with their monopolies to acknowledge it.

    “In the U.K., there is a banquet of glorious newspapers to feast on in the morning despite the presence of the Internet. All of these papers look nothing like they did 15 years ago. Furrow-browed broadsheets like The Times of London and The Guardian got snappy new overhauls, cut down to a more modern-feeling tabloid size, with a use of pictures and color that's imaginative and striking and appealing to the younger demographic.

    “These ‘serious’ papers are replete with sexy culture coverage and hip fashion stories as well as foreign reporting and brainiac columnists that make them a guilty pleasure to read. It's one of the biggest fibs going that American newspapers are now being forced to give up their commitment to investigative reporting. Most of them gave up long ago as their greedy managements squeezed every cent out of the bottom line and turned their newsrooms into eunuchs.”


    Think about these observations for a second. They are about an industry that was complacent, that didn’t change as fast as the population, that was so focused on the bottom line that it did not understand that its product was gradually becoming less and less relevant to its consumers. And then, the industry whined about the competition that did see where things were going...not understanding that the enemy was within.

    Such observations could apply to any business, to any industry.

    We ignore them at our own risk.

    I’ll give you an example of how newspapers have made fatal misjudgments. I was talking to a reporter yesterday who told me that his newspaper now only runs paid obituaries.

    Now, this is extraordinary. Obits - which were the first thing I wrote when I started out in newspapers - are the some of the most locally oriented stories that any newspaper can run. It is one section that almost everybody reads. And yet, looking for some source of revenue and looking to cut down on costs, this particular newspaper decided to virtually eliminate them as an editorial component.

    It simply doesn’t make sense. But it is the kind of eyeshade-driven, myopic business decision that companies make all the time.

    It is looking at the short-term, not the long term.

    BTW...if you want a terrific further discussion of this topic, check out Michael Sansolo’s chapter on The Bridge On The River Kwai in our new book, “The Big Picture: Essential Business Lessons From The Movies.” To learn more about the book, click here. >

    Sorry for the shameless plug. I can’t help myself.




    I have long said in this space that Burgerville, the Pacific Northwest fast food chain, is my idea of what such a chain should be all about - offering things like natural beef and Tilamook cheese, along with some fabulous berry smoothies.

    Well now, they’ve apparently taken their differential advantage - fast food that actually tastes good - to a new high, selling a “Roasted Portobello Focaccia Sandwich that features a garlic- and olive-oil roasted Portobello mushroom cap topped with provolone cheese, caramelized red onions, spring greens and garlic aioli, served on fresh baked, parsley and honey focaccia bread with a sundried tomato spread.” All for $4.49.

    Now, that’s my definition of fast food.




    I fly a lot, and so I’ve been paying very close attention to all the debates about security screenings. Here’s where I come down on the issue.

    You can full body scan me all you want.

    Just don’t make me look at my own scan.




    I saw so many movies over the Christmas holiday that I can’t possibly write about all of them in one “OffBeat.” So let me focus today on the best of all the films I saw, and the one that offers the most specific business message.

    “Up In The Air,” starring George Clooney and co-written and directed by Jason Reitman, is easily one of the best movies of the year, and will end up being considered one of the best movies of the last decade.

    The basics of the plot are fairly simple. Clooney plays Ryan Bingham, a consultant who flies around the country firing people at companies run by people who do not have the stones to do it themselves. It is a heartless job, but Bingham copes with it by keeping his own life as uncluttered as possible - his apartment is less homey than the average hotel room, and he is pretty much disconnected emotionally from friends and family. Bingham’s great consolation is frequent flyer miles - he’s got travel down to a science, and he’s well on his way to having ten million miles on American Airlines.

    But two things happen to Bingham. First, he meets a woman, played by Vera Farmiga, who seems to share his priorities, travels as much as he does...and therefore, is someone who can get past his emotional roadblocks. And, he finds his whole way of life threatened when another woman (Anna Kendrick) joins his company and begins to implement a plan that will have all the layoffs done via online conferencing.

    The ad slogan for “Up In The Air” is an apt one: “The story of a man ready to make a connection.” But this doesn’t just go for Bingham. in fact, the entire movie is about the importance of human connections. While Clooney’s character may seem like has has a heartless job, the fact is that he understands the importance of being present - really present - at an emotional moment that will be one of the most important in many of these people’s lives.

    These kinds of connections often are underestimated by businesses, especially today, that are obsessed with cutting costs, with being efficient, with making the numbers. We can see them everywhere we look. In voice mail systems that give us buttons to touch but seem to delay until the last possible moment giving us a human being with whom to speak. In self-checkout systems in supermarkets that eliminate the last human touch point - sometimes the only human touch point - that exists in that retail environment. In e-commerce businesses that are almost completely automated, and in which the only customer service personnel are located in a faraway land with only a passing familiarity with English. In self-service gas pumps. In the town where I live, there will no longer be a guy selling train tickets at the commuter station, and all tickets will have to be bought from the kiosk. The list goes on and on...

    Now, a perfectly legitimate argument can be made for all of these changes, and I must admit that in some ways, these shifts make our lives easier and more convenient. But there is a level of depersonalization going on, and we have to wonder what the long-term impact will be. The risk of not considering it, I’m afraid, is that our culture morphs into something less than it should be before we even know it has happened.

    It should be noted that when they started working on the script for “Up In The Air,” it was designed to be something of a farce. But the recession intervened, and the filmmakers were smart enough to change course - even to the point that they used real people in the beginning and end of the movie, talking about their experiences being laid off. It gives the film an anchor in reality, a compelling reality that is hard to shake.

    “Up In The Air” is a serious movie for serious people, done with a light touch. Clooney is a the top of his game, cementing his position as someone with both move star glamour and rare good taste in the projects he chooses. (Think about a career that includes “Out of Sight,” “Three Kings,” “Ocean’s Eleven,” “Confessions of a Dangerous Mind,” “O Brother, Where Art Thou?”, “Good Night, and Good Luck,” and “Michael Clayton.” All pretty much in a single decade. Be hard to point to many other actors with that kind of creative track record.) But he also shows a thoughtful vulnerability in “Up In The Air,” a side that he hasn’t much shown before.

    “Up In The Air” is a terrific movie. It almost certainly is going to get a bunch of Oscar nominations. But more importantly, it is that rarity these days - a movie that makes you think about serious issues.




    I told you before Christmas that this was going to be our holiday wine, and now I’m going to tell you that the Roads End 2007 Pinot Noir from Oregon is one of the best pinots I’ve ever tasted. It was so smooth, so supple, so elegant, so delicious...I was sorry I only had one bottle, because it was hard to find something to follow it.

    Yumm....



    That’s it for this week. Have a great weekend..and I’ll see you Monday.

    Slainte!
    KC's View: