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    Published on: May 10, 2011

    by Kevin Coupe

    Yesterday, the management advice from a CEO posted here in Eye Opener was to allow people the freedom to know that if they something stupid, they don;t have to defend or justify it - that “everybody can be and will be momentarily stupid,” and that they need to be able to accept it, admit it, and then move on ... which saves time and money over the long run.

    Today’s management advice comes from Steve Jobs, courtesy of a San Francisco Chronicle story about an as-yet unpublished piece in Fortune.

    According to the story, Jobs apparently gives new Apple Inc. vice presidents the same speech, telling them that he once asked a janitor why his office garbage can wasn’t being emptied, and the janitor said that it was because the office door lock had been changed, and he didn’t have a key. It’s irritating, Jobs, says, but a legitimate excuse. Because he’s the janitor, he’s allowed to have reasons he cannot do his job.

    However, Jobs says, there is a point between the job of janitor and the job of CEO where reasons stop mattering - and the Rubicon is “crossed when you become a VP.”

    The message is that executives have to take responsibility for your actions and your failures. Excuses and reasons don’t matter.

    Now, this could be read as creating a culture that does not allow people the freedom to fail, a culture that stifles creativity. But at Apple, it seems pretty clear that this is not the case - it is a company that thrives not just on creativity, but on creating game-changing, disruptive technological applications ... and that certainly means that within the halls of Apple, there are plenty of mistakes, miscalculations and failures that the public never sees.

    But the story does suggest that Jobs - by all accounts an exacting and often difficult taskmaster - requires that people take personal responsibility for their decisions and actions. They’ve got skin in the game ... which is a pretty good way to get people all rowing in the same direction.

    And that’s our Eye-Opener for today.
    KC's View:

    Published on: May 10, 2011

    The Boston Globe reports that the federal Transportation Security Administration (TSA) is considering the implementation of a “trusted travelers” initiative that would allow certain travelers - identified via data culled from airlines’ frequent flier programs - to go through security lines faster and with less hassle. (They’d get to keep their shoes on, their laptops in their briefcases, and avoid full body scans.)

    According to the story, the “trusted traveler” program “would apply generally to flights deemed a lower security risk, such as those on regional jets to smaller cities or staffed by air marshals. The TSA will try out the program in stages. Starting this summer, the agency will allow some pilots and flight attendants to go through screenings without scanners or pat-downs. TSA will then run tests at different airports and ultimately make a decision about whether and when to go forward with full implementation.”
    KC's View:
    Those of us who spend a lot of time in airports know how frustrating the security process can be; I know that from my perspective, the worst part is the inconsistency of it all. And we know that if the TSA only knew who we are, and how often we fly, and why we deserve to be treated differently because we’ve earned it ... then the system would be a lot smarter and smoother.

    The thing is, that’s a terrific metaphor for retailing. I worry about the long-term efficacy of retailers that do not know who their shoppers are, how often they shop, and what they buy ...

    I would suggest that any retailer ought to think about that the next time they are in an airport security line, taking off their shoes, and wondering what the hell is taking so long. They should ask themselves the following question: “Do In know more about my shoppers than the TSA really knows about me?”

    If the answer is “no,” or even “I don’t know,” then that ought to be the beginning of an action plan.

    Published on: May 10, 2011

    The Wall Street Journal reports that “three leading book publishers are developing a website to sell physical and digital titles directly to consumers in a bid to widen the distribution of books as the number of bookstores in the U.S. continues to decline.”

    The story says that the new site, called Bookish, is “scheduled to launch this summer. The site will allow consumers to recommend books to friends and access a wide array of information about authors and titles ... Consumers will be able to buy books directly through Bookish and will be able to download titles to some mobile devices, though the venture hasn't yet determined which ones will be compatible with the site.”
    KC's View:
    One can only imagine these publishers walking down the streets of Manhattan, muttering to themselves, “I love the smell of disintermediation in the smells of victory.” Or at least, survival.

    Here’s what I think is the interesting passage from the Journal piece:

    “For publishers, helping consumers discover new works is growing more urgent because the number of bookstores where they can discover new titles is declining. Retailers like are capturing a growing share of printed and digital book sales, raising fears among publishers that sales are being consolidated in too few hands.”

    In other words, suppliers want to be more aggressive about mitigating the influence and power of retailers, which are defined as middle men getting between the manufacturer and the consumer.

    What this means is not so much that retailers ought to be afraid of manufacturers, but that they need to be better and more innovative retailers, and perhaps even better partners to manufacturers. (Of course, in venues where things like slotting allowances exist, that might mean getting rid of traditional revenue-generating schemes that only get in the way of really serving and understanding the consumer.)

    Now, if I’m, I’m not sure I’d be hugely worried about this, because I’m so much more than just a book retailer. Still, the initiative is interesting...

    Published on: May 10, 2011

    The Healthy Weight Commitment Foundation (HWCF) – a 160-member organization (including retailers, manufacturers and restaurants) committed to reducing obesity - especially childhood obesity – today launched a national campaign called the “Together Counts” program that encourages families “to eat meals together and engage in physical activities together to help counter obesity and promote good health.”

    “Kids derive strength from their parents,” said Ric Jurgens, chairman/CEO of Hy-vee and HWCF Vice-Chair. “When they engage in physical activity together, or sharing meals together, kids draw the resolve and discipline they need to keep at it.”
    KC's View:
    No argument here.

    Published on: May 10, 2011

    The Cincinnati Enquirer reports that the growth of organized retail theft has grown to the point where “retailers are losing $30 billion a year – a number so alarming that the nation’s largest grocer recently hired its own manager of organized crime. He oversees investigators in each of Kroger’s 17 divisions across the nation. They call organized retail theft a ‘gateway crime,’ opening up valuable leads into other cases involving foreign and U.S. currency counterfeit, guns and narcotics.

    “Last October, the Kroger team worked with federal immigration agents in Seattle to apprehend 32 people suspected of stealing $4.87 million worth of goods from six retailers over 16 months. Authorities say the ring shipped vehicles full of stolen goods overseas to be sold in Cambodia. Kroger lost $1.21 million.

    “Organized retail crime ‘is increasing constantly,’ says Dennis Dansak, manager of organized retail crime for downtown-based Kroger. ‘And I take it personally’.”

    The story goes on:

    “Kroger formalized its commitment to fighting organized retail crime in 2009 when it hired Dansak, a 34-year law enforcement veteran who had served with the FBI’s counterterrorism unit.

    “Kroger won’t share the exact scale of its organized crime-fighting effort. But Dansak says his teams study product losses and surveillance videos, analyze criminals’ behaviors and compare data with other retailers.

    “They also research and test new technology and anti-theft devices. Some retailers use sophisticated electronic surveillance systems at exit doors to track barcodes on products leaving a store. Spider Wraps, alarm devices attached with thin steel cables, can be wrapped around boxed items like DVDs and video games; they sound an alarm if they’re tampered with ... Kroger investigators provide products for law enforcement agencies to use for ‘reverse buys,’ in which an undercover officer sells items to a fencing operation to prompt an arrest.

    “Nationally, Dansak is working with federal immigration agents on five cases. An average organized retail crime case, industry-wide, involves more than $500,000 of lost goods.”
    KC's View:

    Published on: May 10, 2011

    Bloomberg reports that Andrew James Bond, a Walmart vice president testifying in South Africa about his company’s proposed acquisition of a 51 percent stake in Massmart Holdings there, said that his company is “more than happy” to “recognize labor unions where unions are relevant.”

    “The fact that low numbers of our U.S. workers are unionized must be seen against the fact that less than 5 percent of retail workers in the U.S. are unionized,” Bond said.

    The Massmart deal has run into some opposition because of concerns that Walmart’s legendary anti-union stance will cause job losses.

    Crain’s Chicago Business reports that the Lakeview neighborhood of Chicago has reached an agreement with Walmart, which wants to build a store there, that would limit the unit to a maximum 33,395 square feet. The covenant - which Walmart has not confirmed - would put size limits on Walmart there in perpetuity.

    • Walmart-owned Asda Group has announced that it is expanding its “Chosen By You” private brand line by adding 40 new meat and seafood products, as well as rebranding and reformulating another 20 items that already have been available in stores.

    The mid-priced line, according to The Grocer, will be broken up into four basic categories - 'summer eating', 'convenient for midweek meals', 'something special' and 'weekend roasts'.
    KC's View:

    Published on: May 10, 2011

    The Grand Rapids Press has a nice profile of GFS Marketplace, the cash-and-carry-style operation operated by Gordon Food Service, which has grown to 142 stores in nine states without getting much notice; in terms of locations, GFS actually has more stores in Michigan than Spartan Stores.

    According to the story, “Stores open in markets where the company’s main business of food distribution is thriving. The retail operation supports that business.

    “For the most part, growth began throughout the Midwest but expanded into Florida in 2003 when Gordon Food Service acquired nine stores from the Smart & Final chain and the California-based company’s Henry Lee food service direct business.

    “GFS Marketplace’s customer base is a mix of commercial buyers and individuals. But the retailer continues to draw regular shoppers looking to pick up food and supplies for special events from graduations to holiday parties ... GFS Marketplace sells bulk foods like a Sam’s Club or Costco but without the membership fee. The stores, small by grocery standards, are intended to make it easy for commercial customers to quickly pick up items.

    “Its 15,000-square-foot format is similar in size to Aldi stores. GFS Marketplace emphasizes customer service. Staff will take orders to cars or help create party menus.”
    KC's View:
    I had a chance to visit a GFS store recently in Ohio, and was impressed ... especially because it was a company I’d never really heard of before.

    Here’s the thing. This is an example of the kind of company that can sneak up on you, steal away revenue, and siphon off customers before you even know they are gone.

    A lot of people smarter than me believe that the next great competitor in the supermarket space will be a company that most folks have never even heard of. Which certainly sounds possible to me.

    Published on: May 10, 2011

    • ShopSavvy, the mobile shopping assistant, added 1.9 million downloads and 1.3 million unique users in April, bringing total downloads to 17.9 million and unique users to 9.3 million.  The unique user total represents 13 percent of the approximately 70 million smartphone owners in the United States.

    According to the company, “ShopSavvy has been downloaded from the app markets of Apple, Android, Amazon and Windows Phone 7, as well as from independent markets or directly from the APK application file."
    KC's View:

    Published on: May 10, 2011

    • The Buffalo News reports that Tops Markets has asked the Federal Trade Commission (FTC) for permission to sell three of its stores - in Ithaca and Cortland, New York, and Sayre, Pennsylvania - to Hometown Markets LLC, which plans to operate them under the P&C Fresh banner.

    The three stores, which used to be part of the Penn Traffic chain, are part of a larger agreement signed by Tops to sell seven of the 79 stores that it acquired from Penn Traffic last year.

    • Saint Joseph University’s Academy of Food Marketing announced that its Board of Governors will honor Ahold USA for its commitment to food marketing education. The award will take place at the Academy’s Citation Award Dinner on October 1 in Philadelphia.
    KC's View:

    Published on: May 10, 2011

    ...will take a short break this week. However, Michael Sansolo will be weighing in later this week with thoughts and commentary from the Food Marketing Institute (FMI) Future Connect conference in Dallas, Texas.
    KC's View:

    Published on: May 10, 2011

    Responding to yesterday’s piece about continuing food safety issues in China, one MNB user wrote:

    My wife and I just returned from visiting our daughter in China. Even the approved Chinese daily (in English) had articles on the importance the government is placing on food safety.  They are having difficulty there just as we are here. It appears they have different penalties when they catch owners knowingly doctoring the food.  They are still raising dogs for meat as we raise cows. We visited 5 cities and the air resembles 1970's Los Angeles everywhere. IT is good to be home.

    MNB also had a piece yesterday about how Tesco’s Fresh & Easy stores in California could have new problems because of a legislative proposal that would prevent people from buying alcohol using self-checkout systems, which is all that Fresh & Easy offers. We noted that the proposal is said to be driven by union interests, which may be more concerned with Tesco’s non-union labor force than with stopping minors from buying booze.

    One MNB user wrote:

    Timing is everything in this constant battle to assure no alcohol sales to minors. Anti-Tesco campaigns have been stirred up by the unions since before F&E’s openings. Consider that the unions will have lots more to worry about if the So Cal strike happens and the major food retailers lose customers to F&E.  Many of us changed our shopping habits and have not forgotten that period.

    And another MNB user chimed in:

    Just for the record, I'm 68 years old and cannot get through checkout with a bottle of wine without the personal intervention of an F & E staff member.

    Perhaps the most relevant email we could have gotten on the subject...
    KC's View: