retail news in context, analysis with attitude

We’ve had a number of emails about the business lost by Daymon over the past couple of weeks, and this MNB user, who asked to remain anonymous, wanted to weigh in:

I am an ex-Daymon Associate who has been self-employed - I compete with Daymon as an independent Manufacturers rep - for over 8 years now. It is important for someone in our industry - I would hope it would be the PLMA and the vendor community - to stand up against the arguably illegal relationship between Daymon - and other in-house brokers - and the U.S. retailers with whom they partner with. The industry has ignored the guidelines laid out by the Robinson Patman Act. The reason is simple - "FEAR"!

I have heard the term many times from Daymon upper management - "we would rather have our principles - the vendors that pay us - Fear us as opposed to liking us or respecting us" - Fear wins every time!

The vendor community becomes fearful that the retailers will not award them business if they do not appoint Daymon as their rep - the vendors know very well that Daymon does not work for them - they work for the retailer. The vendor also knows that Daymon is not their loyal representative because they represent all of the competitors offering the same items - it is a win/win for Daymon - not for the vendors paying the commissions! Another key point - Daymon refuses to work in partnership with the local representative of a supplier because their commission would be reduced and control over the supplier diminished.

I have no problem if Daymon, Crossmark, MMI, or any other Store Brand Rep Firm wants to represent vendors selling store brands to U.S. retailers. They have every right to call on any customer  - they do not have the legal right to be inside their building! It is an illegal relationship - based on Robinson Patman - when a retailer invites a broker in our industry into its building and inside its business, its systems, and its cost of goods.

In House Brokers do not work for the manufacturers they represent - they work for the retailer and earn revenues from the vendors doing business with those retailers or wholesalers. Daymon can be defensive about it and call it what they want but at the end of the day they do kick back the revenues to the retailer's bottom line - illegal money laundering activities!

It may sound like I have sour grapes - I was told by many vendors that I worked with when I was with Daymon that I was "the best Daymon rep they have" - that is sad considering beyond the top two revenue producing principals on my desk, I had little to no time to devote to the other 30+ vendors I was responsible for. I left Daymon for the manufacturing community when I was offered 40k more a year, with a company car, better benefits, and a better career path - I was one of the lucky ones that broke free from being a part of an illegal and unethical industry - the in-house broker industry.

It is time that the Store brand industry recognize that the relationship between in house brokers - one in which Daymon Associates dominates - is not an ethical, legal, or responsible relationship!

These are serious charges, and to be honest, I debated with myself long and hard about posting this email. In the end, I decided that it would be intellectually dishonest not to ... especially because I happen to like the people at Daymon and would argue that these accusations - “illegal money laundering”???? - are overwrought and, in fact, do sound like sour grapes. But it isn’t my job to stifle discussion, but to encourage and provoke it.

I also think it would be a mistake to suggest that the decisions by Safeway and Supervalu to change the way they do private brand business were made for reasons other than a belief - perhaps accurate, perhaps misguided - that they could save money and exert greater control by bringing Daymon’s functions in-house. We’ll see how that plays out in the long run.

Responding to a story the other day about the slowly improving job numbers, one MNB user wrote:

Right now the economy is exploding with growth but unemployment is still high.  Plenty of new opportunity but no one seems to want to work.  One reason might be we keep extending unemployment benefits.  Perhaps once the benefits expire, people will opt back into the workforce.  I think right now, much of unemployment is a lifestyle choice.  If it was that bad, people would be migrating to the lowest unemployment rate states and they really don't seem to be.  Remember the recession of the early 1980s and cities like Houston, Dallas and Oklahoma City were exploding with population growth?  People were migrating there to take jobs.  Now with public assistance so lucrative, why bother to move?

This seems like a horribly cynical view of America’s work ethic. While there may be some who fit this description, I find it difficult to believe that most people would rather be on unemployment because of the extravagant benefits they are getting from the government.

We had a brief piece yesterday about a new “Double Down” sandwich being sold by KFC that uses two boneless chicken fillets as the bun - then squeezes two pieces of bacon, two slices of cheese and some sauce in between. I was disgusted by it.

MNB user David L. White wrote:

KFC needs to understand that just because you can make something like the “Double Down” doesn’t mean that you should.

MNB user Steve Sullivan wrote:

My first reaction was to check the date.  Nope, it’s NOT still April 1.  My second reaction (one I’m hoping is echoing around the country): EWWWWWWWWWWW!

And MNB user Kevin Bamford wrote:

I would have expected to see this story on April 1st.

Even I, with a perverse sense of humor, could not have come up with this one. Though it has me thinking about next year...

I waxed rhapsodic yesterday about the NY Mets winning their first game of the season, which led MNB user Tom Devlin to write:

Break up the Mets !!!

Okay just kidding but the first inning home run by David Wright  could set a tone. Thank goodness he did not strikeout four time or Castillo drop a ball or Santana get hurt. As a Met fan I agree, enjoy it while we can.....because we live in the middle of Yankee, Red Sox and Phillies Fans ,  Not a fun task. we have to bark like a Chihuahua to get heard. !!!!

But another MNB user was not so understanding:

Thanks for mentioning Albert Pujols!  Have you heard of him?  3-4/ 2 home runs MVP & why would you want to be a Mets fan?!

Because I was born in New York City and love National League baseball. (I would have been a Brooklyn Dodgers fan had they not moved to Los Angeles.)

This does not mean that I do not respect Albert Pujols. I do. Immensely. And St. Louis is one of my favorite places to watch a ballgame ... I was lucky enough to be invited by my great friend Joanie Taylor to attend (with my son) the last regular season game at the old Busch Stadium. And I’m hoping to make it to St. Louis this summer to see a game at the new ballpark.


Finally, a note from an MNB user about the men’s NCAA basketball finals:

What a great tribute to the Butler basketball program. They played a great game and had two decent chances to go ahead and/or win the game. I think they had more shots from inside the paint that could have won them the game if they would have fallen in. For them to step us against the mighty Duke program just shows that it is not always about the money but about heart. Did this not play exactly to the movie (Hoosiers), right down to the last shot? I was very impressed with the Butler team and how they handled themselves. They now have a new fan.

More than one, I’d guess.

Tells you a lot about the independent spirit. Great metaphor for business.
KC's View: