retail news in context, analysis with attitude

We’ve had a lot of discussion here on MNB in recent days about private label and specifically the role of Daymon Worldwide - some of it generated by that company’s loss of the Supervalu and Safeway business, and some of it generated by accusations that some have raised about Daymon’s business practices.

MNB user Tal Vance wrote:

I'm curious why the "long dissertation" from the passionate Daymon employee who responded earlier this week did not sign his name?  You didn't point out that he ask to be anonymous so I'm assuming it was your choice.

But in "your views" today on the Daymon subject you point out that the reader ask to remain anonymous?

I'm guessing that the Daymon response was a collaborative effort by Daymon Corporate folks.  What do you think?

I appreciate your fondness for the people at Daymon...that is not the issue.  The issue is the legality of their practices.


To reiterate my policy on anonymous emails...

While I know where emails come from, my policy is not to use the name if there is not a signature at the bottom, and to use the name if there is.

Occasionally, someone will ask for anonymity even if they have signed their name, and I have no problem with that. Sometimes I will not use a name even if it has been signed, simply because I have a gut feeling that the person might get in trouble or even lose their job if their name were to appear - and that isn’t good for anyone. And rarely I will not use names even when people sign their emails, simply because I think they are using MNB to promote a personal agenda or business, and I try to be careful about that stuff.

To be honest, I don’t recall whether the email from the Daymon defender earlier this week asked for anonymity, or whether they simply did not sign it. But the reason that I noted that anonymity was requested by yesterday’s correspondent is because the person was making some serious allegations, and that the request ought to be up front.

in other words, I made an editorial judgement. That’s what you pay me for.

Another MNB user wrote:

I am glad you included the lengthy email you received from the ex-Daymon rep.  I can’t agree more w/one of her main points.  The manufacturer pays the bill, but the Daymon rep works for the retailer.  The Daymon people could care less who makes the p/l; they will get paid regardless.  In fact, when there’s a change, it’s better for them because they can then earn more for their accessory departments such as art design.  Of all the brokers we have, our largest annual payment is to Daymon, and we probably get less for this money than w/any of our other brokers.

As to SV and SW, let it be known that both houses have already let us know that they expect the moneys we were paying to Daymon to now be redirected to them in some way.  Since this was “throw-away” money anyway, it’s just possible that we may actually get something more for it than we were.


On the same general subject, MNB user Ken Hillman wrote:

I have already received a message from a former co-worker asking if I was "that guy" who sent the Daymon letter to you...allow me go on record, no. It was not (I left the company back when it was still Daymon Associates not Daymon worldwide, and if I still that that much anger inside me after nine years, I might have exploded long ago). And in the spirit of never writing anything I don't sign my name to, here are a few thoughts:

In-house entities are legal, as are the investments they make as a spend towards supporting and growing the business. Those "spends" do have a spectrum, and Daymon is more on the conservative side of that spectrum.

Having more to do than time to do it is not only a function of every broker in the world (brand, private label, in-house, out-house) but a function of today's world. Live with it, work harder and make sure the balls that drop aren't the ones that explode. The pressure on brokerage rates is constant and simple activity based costing will show that all of the activities designed to run a successful brokerage business generally run higher than the rates. In situations where the only activities are HQ calling, the vendor has a choice of whether to take the brokerage and put it into a direct resource, but strong broker service packages are rarely that simply replaced...

It is my understanding of the Robinson Patman Act that it protects ONE broker in a relationship as the cost of sales and that more than one is not protected. Therefore a brokerage split CAN be impacted by a retailer decision. It is actually a smart decision by Daymon not to split...

The news of Supervalu and Safeway may have been troubling to Daymon but you are correct, they will diversify and continue on successfully. You are also correct in that this says a lot more about the consolidation of retailers and the "critical mass" those retailers can bring to bear on their business. My feeling is that the length of time Daymon has worked with these very large retailers speaks more about their professionalism and ability to show value to buck the trend of a retailer bringing in their own talent than anything else...


And MNB user Tim Heyman wrote:

My back ground -  successful store manager, Kroger Co., Director of Sales/Retail Operations, Wetterau Pittsburgh Division, Category Manager, Wetterau Pittsburgh Division (largest division of Wetterau when Wetterau was either 2nd or 3rd largest wholesaler in USA), Store owner/operator, Foodland supplied by SUPERVALU, Currently Proud member Daymon Worldwide. I believe that I know the industry/business from many sides, angles and views.

As a former category manager who worked at Wetterau without an in house broker, then going to one, once SUPERVALU bought Wetterau, I can say first hand, how much more and better information was given to me, and how we grew the business with new Private Branded items once Daymon was involved. The national brokers that represented some of the product lines prior were NOTHING in comparison to how involved on all issues, from plan-o-grams, terms, deals, cost of product, frequency of ads etc., once the Daymon folks got involved. 

As a franchise owner, who attended some of the ad meetings that I ran as an employee of Wetterau/SUPERVALU, I can attest as to the same support as a retailer.  I’ve been with Daymon for almost 2 years and have never heard ANYONE state a Fear factor for the suppliers or anyone. It is with great gratitude for ones business to the supplier partners and to the retailer, who we represent.

We as Daymon DO work for BOTH the supplier partner and the retailer, maybe this is something this ex employee of Daymon couldn’t comprehend and is why he left to go out on your own.  Being in business for ones self is very, very hard, I know as an owner/operator for over 8 years.  Once it was financially determined that I sell the store, my fit at Daymon is like none that I could imagine.  My background and all the teachings from Kroger and SUPERVALU/Wetterau are the same fine principles that make Daymon, our supplier partners and retailer a pleasure to work for.

Glad for the writer that got that $40,000 more with company car and benefits in manufacturing but that means he left THAT position also if he’s now an independent broker. 

As an employee of Wetterau with a position of Category Manager (we were called head buyers back then), I know first hand the insights and reasons of the Robinson Patman Act, to which apparently the writer does not.
 
By the way, unlike the prior writer, I don’t wish to remain “anonymous”.





We had an email yesterday from an MNB user who said that he believes that the reason the unemployment rate remains at more than nine percent is that a lot of people, enjoying their extended unemployment benefits, have decided they don’t want to work anymore. Which I thought was deeply cynical.

An MNB user responded:

In reading the statement of one of your readers regarding the extension of unemployment benefits I have to say that I don't think he's just cynical, he's out of touch.  I'm against citizens abusing public assistance programs as much as anyone, but I believe it's just wrong to infer that all people in this situation are lazy freeloaders.  Please see the e-mail below I received from a co-worker on behalf of a good friend of his just two weeks ago.  It might help to remind people of the sobering reality.  It did me.

To my family, friends and business associates,

I am reaching out now as a final gesture to ask for your help in my situation. I have been out of a job for six months and on the verge of being evicted from my apartment by the first week in April (see attached).  I do not have any alternative living arrangements.  I have not been able to secure a temporary job (sales associate at major retail stores; fast food restaurants; etc.) because I am over-qualified.  My vehicle will be repossessed at the end of the month if I don't pay my monthly payment.  I will be placing an ad in Craigslist today to sell my furniture to pay for my car payment and have some money to live on.

I am asking the recruiters to search for any type of work I can do even if it is something lower than my level of expertise.  At the same time, I am asking my friends to distribute my resume (attached) to anybody you know that needs either temporary or permanent help.  I may still have a chance to salvage my apartment if I can show the community director of the apartment complex that I am gainfully employed and would submit to an aggressive rent payment program.  And, finally, I am asking if any of you know anyone with living accommodations I could ask to stay until I resolve this situation I am presently in.

This has been a very difficult e-mail to write but as the saying goes: "Sometime you have to swallow your pride".  I thank you all in advance and be rest assured, I am a survivor and will get out of this mess I am presently in.


Another MNB user wrote:

I have to respond to the person who wrote that there is "Plenty of new opportunity but no one seems to want to work. "   What utter nonsense!  I'll chalk this up to spurring the discussion, because the statement is crap!
 
From  http://www.epi.org/publications/entry/jolts_20100209/ :

"At the same time, the number of unemployed workers decreased by 73,000 to 15.3 million, resulting in 12.8 million more unemployed workers than job openings in December, or 6.1 job seekers per available job. This is a slight decline from 6.3 in November."
 
Also, from http://www.workforce.com/section/06/feature/26/55/70/:

" The BLS’ estimates of the number of unemployed workers appear extraordinarily conservative, because the agency counts as employed any person who worked for even one hour during the week in which the monthly employment survey is conducted. It counts as unemployed only those who have activity looked for work during the four weeks preceding the survey.
    

At Accolo Inc., a network-based recruitment process outsourcing firm based in Larkspur, California, president and CEO John Younger sees mounting evidence of mass unemployment in the number of applicants that respond to job postings.

“The average number of applicants across the board, including applicants for executive positions, is more than 200 per job,” he reports. “In the first hour that we looked to fill an executive assistant position, we received 500 applications and shut down the search.”
 
Finally, from http://www.patriotledger.com/business/x497924316/Thousands-apply-for-160-jobs-at-the-new-BJ-s:

"Job fairs for those interested in working at the BJ’s Wholesale Club store that is opening this spring in South Quincy drew some 1,500 applicants, according to the company.

The turnout was on top of 1,000 applications the company received via mail for the Quincy location, company spokeswoman Maria Fruci said. The Natick-based company plans to hire about 160 people for the Quincy location."

The writer thinks it is a lifestyle choice, but the thinking does not seem to be based on fact.

The writer also seems to have not thought about all the frictions involved in moving to where you think the jobs are, if you are unemployed.  What are your real-estate (not a liquid asset) needs in the sale or rental market at both the origin and destination?  What do you do about links to family, friends, schools, places of worship, community and other sources of support?  How sure are you that once you move, you'll be selected for a job - would you be better off looking where you are?  Is someone likely to hire a carpetbagger over someone who is struggling locally?

To be sure, there are some lazy people out there collecting benefits, but I don't know how many, and obviously, neither does the previous writer.  We can be certain, however, that there are a lot of Americans out there busting their humps to get a job (as cited above).  These people need a bridge between employment placements to pay their bills, maintain their shelters, and feed their families, and it seems to be bad public policy to cut off benefits to all these decent people who want to be hard-working, successful Americans, further increasing their financial distress, to ensure that the bad apples don't collect anything.  We can debate the length of the bridge and the fanciness/ordinariness of the bridge, but let's not have any more flawed assumptions and assertions not backed by fact as the basis for discussion.





Finally, on another subject, MNB user Andrea Marsh wrote:

I love to read the “Your Views” section of MNB but you are killing me with the sports (although not enough to make me stop reading MNB regularly but disappointing nonetheless). I prefer the wine suggestions we usually get on Fridays.

Thanks for all of the great stories over the past few years! MNB is my favorite industry news source.


Then you must be happy with today’s MNB. No sports!

It’s been an unusually busy week in sports, between the Final Four and the beginning of the Major League Baseball season. That’s over...and I don’t do baseball scores on a daily basis because there are too many of them. However, I can’t guarantee you how long it will be before there is another sports report - the Masters begins today, after all.

And to be honest, if I’m near a TV this afternoon, I’m going to be watching ESPN at 1:42 pm...because there is one particular golfer I’m interested in watching. I suspect I won’t be alone.
KC's View: