retail news in context, analysis with attitude

Yesterday, MNB took note of a Wall Street Journal report that objections are being raised to an effort by the troubled and bankrupt Great Atlantic & Pacific Tea Co. (A&P) to “ask a bankruptcy judge to approve $1.76 million in payments to four of its top executives, part of a $6.8 million ‘key employee retention plan’ that covers 146 non-union employees.”

According to the story, “creditors, unions and the U.S. Trustee's office all (object) to what they say amounts to ‘retention’ rather than ‘incentive’ packages ... Lawyers for the United Food & Commercial Workers Union call the bonus requests ‘astounding’ considering the short time since the bankruptcy filing to evaluate A&P's performance, and also the fact that the grocery chain hasn't presented a one-year business plan to the court.”

I commented:

Listen, I don’t expect every executive who comes in to try to save a dying company to take a salary of $1 a year, like Steve Jobs did at Apple. Just like I don’t expect every executive who comes in to save a company to get Steve Jobs-like results.

But...at a time when a company no doubt will be looking for some concessions and lot of cooperation from employees during very trying times, at the very least this looks insensitive.

Get the job done, and bonuses ought to be paid. But at this point, it just looks like feathering one’s own nest.


One MNB user responded:

It's not just "creditors, unions, and the US Trustee's office" that take offense to the nest feathering. How about tenured middle management leaders and other associates that have devoted their careers to A&P? As it turns out, many of these folks are not underperforming sluggos but rather dedicated, hardworking industry pros that had the misfortune to already be working at A&P when the recent team arrived from Mt Olympus. The retention payouts are slated for newly hired executives only. Nice touch!

The "underperformers" that were already fired (some of which were really just victims of the new brooms) may have one axe to grind, but now everybody else has another one.  Talk about creating an "us versus them" atmosphere in Montvale? It's a good thing that all the decisions made by the new regime will work out perfectly so history will validate the bonus money and it won't seem as much like nest feathering over time.

We love it when a plan comes together. We hope.


Another MNB user wrote:

Rather than the A & P board of directors approving that their new CEO should “ask a bankruptcy judge to approve $1.76 million in payments to four of its top executives, part of a $6.8 million ‘key employee retention plan’ that covers 146 non-union employees” ... the board ought to be considering the decision they made in hiring him for the job, in my opinion.

The board had to know the request would be made. They share the blame.

Another MNB user wrote:

You said it when you said "Get the job done, and bonuses ought to be paid."  Have we learned nothing from the "retention monies" financial institutions paid out?  Does A & P want to retain the people who brought them to this dance?

A question I would have to ask, who are the four employees worth a $400,000 bonus while the other 142 are only worth about $35,000?

I came into retail food in Feb 1971 and A & P was already trying to go out of business back then.  It has been a long slow process but they finally achieved bankruptcy.  There have been some strong people who have passed through their offices but nothing seemed to change.  Must be the air or something.


The real question, I think, may be how deep in the gutter A&P has to sink before Ron Burkle and Yucaipa step in to rescue what is left at a deeply discounted price.




MNb reported yesterday about new efforts by the National Cattlemen's Beef Association, which represents beef producers, to launch a “Masters of Beef Advocacy” (MBA) program designed to counter the aggressive and effective moves made by People for the Ethical Treatment of Animals (PETA) to reduce meat consumption in the US.

I commented:

I guess the thing that gets me about all this discussion is that it seems so absolutist. I wish we could get to the point where the people at PETA could promote their agenda without demonizing everybody who disagrees with them.

Here’s where I stand ... and I have the suspicion that a lot of people are just like me:

I like eating meat. I have no moral, ethical or nutritional problem with it. But I also like eating seafood, love pasta, am okay with fruits, and will even nibble on a veggie and put soy milk on my cereal from time to time. My goal is great taste first, decent nutrition second ... and I want as many food-related experiences as possible. I don’t mind when people explain their positions to me, but don’t lecture me and don’t demean my choices...and I promise not to demean yours.


One MNB user responded:

I have been a vegetarian for 25 years and I too have experienced much
absolutism. I have never demeaned omnivores and am not an evangelist of the
cause, but my personal food choices have surprisingly raised the ire of
many.

I was surprised that instead of dealing with the meaty  food issues that
are embedded in this article you took a shot at vegetarians.

The only mention of PETA in the WSJ article was:

"Meanwhile, veggie evangelists at People for the Ethical Treatment of Animals have turned heads with ever-more-racy campaigns, including sending models clad only in strategically placed leaves of lettuce to hand out tofu hot dogs on street corners nationwide.

"PETA says its tactics work. Last year, the nonprofit fielded 850,000 requests for "vegetarian starter kits" packed with recipes like Tofu Tamale Pie and testimonials from celebrity supporters like actress Natalie Portman."

I do not see anything demeaning (or demonizing) in this PETA reference, but you choose to tackle that in your comments instead of evaluating meat of the article (pun intended) like the controversial idea that the feedlot owners would like to suggest and claim that all feedlot cattle are grass-fed even though only a small portion of the caloric value of a head of cattle is from natural grazing vs. that which is finished with corn and other fillers at the feed lot. That is a food issue, Kevin. Instead you lashed out at vegetarians in a way that was out of context, in my opinion.

I see it all the time.


I was very careful to quote the WSJ in context, but you’re right...my commentary went beyond that.

I guess that over the years, it has been my impression that PETA’s definition of “ethical treatment of animals” means not killing them for food ever, as opposed to treating them humanely at every step along the food chain. I also think that at various junctures, it has seemed to me that PETA was more concerned with ethical treatment of animals than it is about ethical treatment of humans.

I certainly was not trying to demean all vegetarians. Far from it.

Another MNB user wrote:

Grass-fed beef, raised without antibiotics and not fed corn or grain, has a very unique taste. It can be found by buying direct from local farmers. When I compromise myself by buying beef from my local supermarket…there just isn’t any taste. If the beef council was really concerned about increasing beef consumption, shouldn’t they produce a better product…

And another MNB user wrote:

Could you clarify the difference between explaining my position to you and lecturing, demeaning and demonizing you?  For example, if I were to say “I don’t eat meat because there is plenty to eat without resorting to killing animals” would that be explaining my position or lecturing?  What’s okay to say and what is crossing the line?

No, I’m okay if you say that. I don’t take that as a personal attack. But I have a thick skin, and think that people are entitled to their opinion ... and would hope that you would respect me if I ordered a bacon cheeseburger. Which I probably would not do if we had dinner together, out of respect for your position.

But do you respect my position as much?

MNB user Mark Raddant wrote:

When our family began finding a broader assortment of protein sources, ranging from fish to beans and lentils.  We saved enough money that now, when we do eat meat, the cuts of beef, pork and even fish are much higher quality, leaner, and far more satisfying taste-wise.

Beef and pork are great, but they are very inefficient means of getting protein into your system. Surprisingly, the beans and lentils can be really tasty also—which has been a very pleasant surprise for our family.


But I’m not eating for efficiency. I’m eating for taste and flavor and enjoyment. And I like beef and pork and chicken and rabbit and venison and reindeer and ... need I go on?




Regarding Starbucks’ expansion plans, one MNB user wrote:

You know that I always support Starbucks…I worked with the boys that took them towards “Lifestyle;”  they are all gone now. It feels like a whole new team has emerged to spend Starbucks equity. I may not be as supportive as I have been in the past.

There does seem like there could be some hubris in evidence at Starbucks HQ. We’ll see.




And, responding to the new slogan chosen by the National Pork Board, one MNb user wrote:

It might be time for a new slogan, but "be inspired?" Are they hoping people will confuse pork with PBS?  "The other white meat" was at least original, referred to the product, and encouraged people to think about pork in a new way. The new slogan does none of that, and whoever came up with it was anything but inspired.

Agreed.




Yesterday’s Eye-Opener referenced a New York Times story saying that “New York has spawned a breed of hard-line restaurants and cafes that are saying no. No to pouring takeout espressos, or grinding more than a pound of coffee at a time. No to taming the intensity of a magma-spicy dish. And most of all, no to the 21st-century conviction that everything can be accessorized to the customer’s taste.”

In essence, I wrote, what this comes down to is that at least some chefs have decided to fly in the face of the axiom that says “the customer is always right,” and instead say that “in certain cases, when the customer is wrong, the customer can take a flying leap.” It is an unusual stance to take in a service-based economy, and an even more unusual stance to take during a time when patrons are displaying recessionary impulses.

I suggested that “the chefs’ stance actually is more than that. It is a statement that a patrons should expect more than food and ambience when they go out to eat - they should also expect intelligence about the food being served, and should expect to be educated as well as fed. This won;t work everywhere, of course, and not all restaurant patrons will accept such conditions. But what these chefs actually are looking to establish is a great sense of trust between them and their customers ... which is what all retailers should aim for - and it will be interesting to see if their resolve pans out or flames out.”

And, I said, the debate reminds me of the art vs. commerce argument at the heart of the great movie Big Night.

MNB user Richard Lewis wrote:

I don't know that this is so unusual and I don't think it's about art : it's about market positioning. At some point, brands like Dior and Louis Vuitton decided they weren't meatball guys. At some point, Sam Walton decided he wasn't a risotto guy. And at some point, every business has to decide what customers they want, target those people and let the others, well, take a flying leap.

I actually think we live in a world where more retailers than ever find themselves in the mushy middle, unwilling to take such a firm position and possibly alienate a shopper.

Another MNB user wrote:

I just wanted to say it’s always a pleasure to read an article of yours, then think back to something it reminds you of, and then see the same reference further along in the article – in this case the movie Big Night.  GREAT movie!!!!  Stanley Tucci had a wonderful performance.  Love the feast at the end...




In my “OffBeat” piece last Friday, I mentioned that despite Toyota’s problems of late, I’ve had two excellent experiences recently driving Corollas in serious blizzards...and was impressed.

To which one MNB user responded:

I've been driving my US-made Buicks in CT/NY/MA in conditions like that for many years.. 35,000 miles/year through all kinds of weather and, never, ever once been stuck! Let's give American cars their due credit too.

Just to be clear ... a nice thing said about Toyota wasn’t a slam on US-made cars. If anything, I was actually surprised by how well the Corollas drove, and thought it worth mentioning.

I’ll save my comments about crappy rental Chevys that I’ve driven for another time.




Finally, MNB user Steven Ritchey had a comment worth considering about changing retail models:

I can’t help but wonder if 20 years from now, if someone will come along and dethrone Amazon, Netflix and maybe Apple.  The way the business cycles are compressed these days, maybe it won’t take that long, but at some point, the business models these guys are using will be obsolete and I wonder if they will be able to adapt, particularly if their current management retires, or even if they don’t.

As a joke, but also partly serious,  I also wonder when that day comes who will be the recipient of your unabashed adulation.


Of course those companies will be faced with irrelevance ... unless they change with the times and embrace the changes rather than avoiding or trying to mitigate them. These days, successful companies stay successful by understanding that they need to be disruptive ... and operate each day as if they can be put out of business by someone else. Complacency and hubris are the enemies of success.

As for what companies I will adore when Apple and Amazon lose their mojo, I can only hope by that time I’ll be dead. (But that won’t happen anytime soon. I hope. For their sakes, and mine.)
KC's View: