retail news in context, analysis with attitude

Got a lot of emails on Friday responding to our report and commentary about the dismissal of A&P CEO Ron Marshall after less than seven months on the job - a move that was described here as merely symptomatic of a company in disarray and possibly unable to compete because of its own dysfunction.

One MNB user wrote:

This is such a sad story.  Can anyone dig A&P out of the mess it is in?  How many times have we read this story, the words may have been tweaked slightly, but it’s the same issue, time after time.  It’s like trying to bail out the Titanic with a Dixie Cup!  Pathmark was once a wonderful organization, a true leader and innovator in the supermarket industry.  The associates who worked at Pathmark were very proud of Pathmark and what it stood for – clean stores, high quality products and great prices.  It was truly an family oriented company.  Unfortunately, Pathmark was the victim of the economic downturn, coupled with the greediness of investors.  Sad to say, most of the Pathmark associates who were let go back in 2008 after the consolidation with A&P have yet to find work, or anything comparable to what they once had.  One could only wonder what would have happened if the tables were turned and Pathmark purchased A&P?

MNB user Pat Patterson wrote:

I entered the retail food business on Feb 1, 1971, a point in time when A&P had sales in the 5 - 6 billion dollar range & Kroger was third with sales around 3 billion.

A&P has successfully been attempting to go out of business at least from that point in time regardless of who was running the show.  Enough said.

MNB user Ed Dowd wrote:

I sold A&P a number of private label products in then 80's and 90's and they never understood the value of P/L and where it fit into its scheme. They never took advantage of their strengths and then they let the whole dept. go in 2001 and brought in "analysts" with no grocery experience who managed the business to zero. The last bid an analyst sent me on cheese, had estimated volumes down 50% and they had no guarantees that the number would hold. So, after supplying at least part of their cheese program for 50 years, I passed. It wasn't worth it.

MNB user Marty Gillen wrote:

I've said it before, but it looks like there is not much time left for A&P,  so I'll say it again:  please take this horse and put it out of its misery with a shot to the brain.
Another MNB user chimed in:

All you have to do is go back and read the classic book called “The Rise and Fall of The Great Atlantic and Pacific Tea company” to see why a lot of businesses fail! The main reason is they forget about what is important to the customer and only worry about what is good for the stock holders and investment bankers. The problem with A&P is that Marshall is probably right when he says that it is systematic, deep and profound in the core business values of the company. Maybe it is time that Haub is asked to leave since he is part of the values and direction the company keeps going or sell the company in pieces? Sometimes the problem is not with the players or the coach it is with the owners or the GM.

If they’re trying to maximize shareholder value, they’re doing a lousy job.

I think it is important to note here that not everyone is a Ron Marshall fan, and I’ve gotten more than few emails from industry friends suggesting that one of the reasons he was unable to make any progress in a half-year on the job is that he was an autocrat with inadequate people skills.

But even if this is accurate, the fact remains that Christian Haub and the board hired him,...and have to take responsibility for yet another management change that disrupts the company.

I was pretty tough on Haub last week, which led one MNB user to write:

Come on, KC, how do you really feel?

Being honest is what you pay me for. But to be clear, this is business, not personal.

I’ve met and interviewed Christian Haub numerous times over the years, and I’ve always found him to be a gentleman - he seems like a genuinely nice guy. But A&P is just a mess...and he has to take some responsibility for that.

Last week, in a story about how President Obama signed the landmark Wall Street Reform and Consumer Protection Act, which included a provision to reform and regulate credit and debit card swipe fees, I noted that “Rep. John Boehner (R-Ohio), the House minority Leader who hopes to become Speaker of the House if the GOP is able to capture control of the body in this year’s mid-term elections, already has called for a repeal of the bill.”

This led one MNB user to challenge me:

Nice distortion of the facts!  Where is the journalistic objectivity?  Boehner is calling for the repeal of the law NOT because of the impact on credit card exchange fees and the new transparency – you make it sound like he is against that idea – but rather because it is one more example of government getting bigger.  Like most overreaching legislation, the few positives are far outweighed by the negatives and the last thing we need right now is more onerous government regulation and a giant new bureaucracy.  The nanny state steps in again to try and protect us from our own stupidity, irresponsibility, and/or greed.  Add to that the fact that it does nothing to reign in or fix the disasters we call Fannie and Freddie, and there are plenty of reasons to call for its repeal along with the health care bill and no doubt the cap and trade bill that Congress will rush through ahead of the November mid terms.  This administration and this Congress are a joke!!  If you are going to take time to report on an issue, why don’t you report both sides of the argument?  Do you really just want to be another left-leaning cheerleader for disastrous policies?  It’s your publication – you have every right to print what you want.  And, I have every right to no longer subscribe if it just gets to be more than I can stand.  We are very close to that point.

This is actually a reasonable criticism ... and shortly after receiving it, I took out the offending paragraph. I would have elaborated on it, but I was about to go onstage to give a speech, and didn’t have time, and so I thought it was better to simply eliminate it and explain later.

My original intention was to do something that I’d done before - which was to point out the irony that Democrats passed a bill that a Republic-leaning retail industry had been pushing for, and to suggest that if people actually talked to each other and negotiated in good faith - as opposed to staking out positions as a way of appealing to the base and getting elected - then we might have a more functional government. I wrote that paragraph as a way of reminding myself that I wanted to do so, but I screwed up and forgot to make my original point. Simply put, I goofed.

I will say this, though. I try really hard to be fair here. It wasn’t that long ago that I wrote a piece praising Boehner for a position he’d taken - and so I hope I cannot be characterized merely as a “left-leaning cheerleader for disastrous policies.” I actually do try to see and comment on both sides of most issues. I try not be an ideologue, simply because I think ideology generally tends to be a substitute for thoughtfulness.

I’m not an economist, but it seems to me that there is a more than enough blame to go around on both sides of the aisle for the “disastrous policies” that resulted in the economic state of affairs in which we find ourselves, and that continues to influence consumer behavior.

I’m not pro-bureaucracy or pro-regulation, but I do think it is fair to say that one of the reasons we found ourselves on an economic precipice is because there was not enough regulation of the financial services industry. What worries me that is that all the new regulations don’t do anything to really fix the problem ... and I am concerned that the people in Washington writing the regulations may not sufficiently understand the businesses they are trying to regulate.

I made a comment in “OffBeat” on Friday about sitting on a plane reading my Kindle, sitting next to a guy with an iPad, and how I felt like I was using old technology...and immediately got iPad envy.

Which led one MNB user to write:

Does the Kindle do what you require of it?  Is the IPad going to give you more things that you really need?  Sounds like my 24 year old son.  He sees the new gadget and says I need that.  Most of the time he is disappointed and reflects that the old one really worked better for him.

You compare me to your 24 year old son, and I’m supposed to feel bad about that?

Not at my age.

You’re right that sometimes “the new gadget” disappoints...but in my experience, it often is a genuine improvement in terms of the experience. And you’re right... I’m a sucker for a new experience, especially when it comes to technology like the iPad.

(Damn you, Steve Jobs!)

On Friday, my “Eye-Opener” piece concerned CEOs - specifically Danny Wegman of Wegmans and Ric Jurgens of Hy-Vee - who see their roles as “changing the world,” not just making the numbers ... an attitude of which I completely approve.

MNB user Lorinda Olivas responded:

Thank you for your positive comments in the Friday eye-opener. As a Wegmans employee for 13 years now, I am proud to live the experience of not just working for a supermarket, but working for a company continuously trying to change our communities for the better. I feel I make a difference in someone’s day every day I work. Because we know we’re working for a bigger purpose than just selling product. I know that’s what makes our company successful. 

Can’t say it better than that.

The power of a CEO with a vision is that it enables employees to have a greater vision.
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