retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: September 7, 2011

    by Michael Sansolo

    The great philosopher Linus, of Peanuts comics fame, once easily summed up everything we need to know about the world. “I love mankind,” he said. “It’s people I can’t stand.”


    I started thinking about Linus’s outlook recently as I watched discussion about the differences in people’s political outlook, generational feelings or even sports teams. What puzzles me is probably the exact same thing that puzzles so many of you: How is it possible that people look at the exact same situation I’m looking at…and see it all so wrong? I mean, how is it possible they don’t agree with me when I’m always right?

    But I don’t say it like that. Rather, I find myself asking a question over and over: Whatever happened to common sense?

    There actually is a better question: What is common sense?

    Most of us might quickly default to the basics such as, treat others the way you wish to be treated yourself ... don’t litter ... and always drive on the correct side of the road. But my brother-in-law raised this topic with me as we discussed problems in the world we find so perplexing. He frequently reflects back on a college lesson from the 1960s when a professor was talking about the myth of common sense. The professor argued that common sense relies on a group of people having common values, common experiences and common needs. When they don’t have all that in common they find there is simply no way they will see everything the same way.

    And when that happens, common sense starts meaning lots of different things to many people. What’s absolutely right to one group is, incredibly, absolutely wrong to another. In business and especially management, this can be a big problem.

    What’s really essential, I think, is un-common sense.

    At a recent Supervalu University conference where I had the opportunity to speak, one of the other presenters had attendees take a quick personality/management test. The DISC test - Myers-Briggs is another example - helps us all understand our decision-making and leadership styles. And, it reminds us that our teams, our families and our communities are made up of people with very different styles. We’re not just different by generation, racial, economic or ethnic reasons. We are simply different.

    What I perceive as bossy management, someone else sees as decisive and another welcomes as offering structure and guidance. What I might see as inspirational discussion, someone else sees as chaotic and a third sees as overly touchy-feely. As the speaker reminded us, we need to understand and even recruit to these different styles. Otherwise we end up with a group of people who think and act the same way, handicapping our ability to achieve creativity, diversity and change.

    Or put another way, we need un-common sense to our way of thinking. We need people who do things differently, who behave in ways that irritate or annoy us because without those differences we’ll find change and greatness almost impossible to achieve. At the GMA Executive Conference, former Disney CEO Michael Eisner made this point a different way, talking about the importance of partnerships among leaders. The best pairs, he said, have different strengths and perspectives, which enable great decision-making. The recent resignation of Steve Jobs provided another example of exactly this point. We’re all learning about Jobs’ successor, Tim Cook, who apparently took care of the details that made Apple’s innovations possible.

    Another great philosopher, the late comedian George Carlin, once talked about his relationship with other drivers on the road. People who drove faster than him, Carlin said, were maniacs; people who drove slower were idiots. In other words, they were different and therefore, had to be wrong.

    Un-common sense is everything it seems. And I’m sure you agree because it isn’t possible that I’m wrong. Right?

    Michael Sansolo can be reached via email at . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
    KC's View:

    Published on: September 7, 2011

    by Kevin Coupe

    The World Economic Forum is out with its annual study of global competitiveness, and the United States has fallen from fourth to fifth place; the study says that the drop in rankings comes because of economic problems, government inefficiency, and declining public trust.

    According to the BBC story,”the report uses 12 categories to assess a country's ranking: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.”

    Now ranked above the US are Switzerland, Singapore, Sweden and Finland; it is followed on the list by Germany, the Netherlands, Denmark, Japan and the UK. No so-called “emerging markets” made it into the top 10, as China was ranked 26th,, and Brazil, India and Russia didn’t even make it into the top 50. The BBC writes that “although the report pointed to the shift in fortunes from developed countries to developing, saying that competitiveness in advanced economies has stagnated over the seven years since the WEF began compiling it, emerging markets made little headway up the rankings.”

    Much is made in the US about the notion of “American exceptionalism.” It will be a phrase that will be often used in this political season.

    But as often is suggested here on MNB, “American exceptionalism” is not a birthright, is not something to be taken for granted. It is earned every day ... and a decline in competitiveness has to be alarming. (We get beaten by Finland?)

    When I read these stories, I always think of what iconic retailer Norman Mayne once told me. Mayne is always a little embarrassed and sheepish when people and publications describe his Dorothy Lane Markets as being legendary. That’s very nice, he says, but “legendary is what we were yesterday. Today, we have to earn it all over again.”

    That’s how you are competitive. Not by being complacent. But by waking up like your hair is on fire.

    And I always think this is - or ought to be - an Eye-Opener.
    KC's View:

    Published on: September 7, 2011

    USA Today reports that some restaurant industry players are lobbying the US Congress to allow food stamps recipients to use them at their establishments.

    According to the story, “That's a prospect that anti-hunger advocates welcome, but one that worries some current food stamp vendors and public health advocates.

    The effort apparently is being led by Yum! Brands, which owns Taco Bell, KFC, Long John Silver’s and Pizza Hut.

    USA Today writes that “federal rules generally prohibit food stamp benefits, which are distributed under the USDA’s Supplemental Nutrition Assistance Program (SNAP), from being exchanged for prepared foods. Yet a provision dating to the 1970s allows states to allow restaurants to serve disabled, elderly and homeless people, USDA spokeswoman Jean Daniel said.

    “Between 2005 and 2010, the number of businesses certified in the SNAP program went from about 156,000 to nearly 209,000, according to USDA data ... There is big money at stake. USDA records show food stamp benefits swelled from $28.5 billion to $64.7billion in that period.”
    KC's View:
    This is nuts.

    I know “entitlement” is a dirty word these days, and for some very good reasons. That said, people who cannot afford to buy food - and there are more of them than ever - ought to have access to food stamps.

    But use them to buy KFC? Or Taco Bell?

    Give me a break.

    Published on: September 7, 2011 has an interesting piece, noting that “this shopping perk has gone from a rare bonus to almost an entitlement in consumers' minds. Nearly half of transactions last year involved free shipping, and 61 percent of consumers say they will cancel their purchase if free shipping isn't offered, according to a recent comScore survey.”

    The story notes that free shipping can take many forms - from always free to everybody (think LL Bean) to free shipping to members only (think Amazon Prime), from free shipping for a minimum order size to free site-to-store shipping.
    KC's View:
    I’ve been saying for years that free shipping - however you construct it, and I’m a big fan of the Amazon Prime program - was going to be a cost of doing business for e-tailers, and that they were going to have to start figuring out the economics.

    Published on: September 7, 2011

    The Lakeland Ledger reports that the Coalition of Immokalee Workers was unsuccessful in its most recent effort to get Publix Super Markets to join its Campaign for Fair Food, which gets businesses to agree to pay a penny more per pound of food, money said to go to the improve farmworkers’ financial state. According to the story, nine major retailers have agreed “to purchase from Florida farms that follow a new code of conduct this upcoming season, which mandates access to shade, water and a right to report abuse without fearing retaliation.”

    Yesterday, some 25 members of the Coalition completed a 200-mile bicycle ride at Publix headquarters, where they said they were hoping to meet with Publix CEO Ed Crenshaw. However, a Publix representative said that they best he could do was pass the groups’ demands on to Crenshaw.

    The Ledger writes, “Shannon Patten, a Publix spokeswoman, said Crenshaw wouldn't meet with the group. ‘This doesn't have anything to do with Ed personally,’ Patten said. ‘This is a labor dispute, and they are asking us to get involved in something we are not a part of.’ Patten said Publix has maintained its position on this issue for years.”
    KC's View:

    Published on: September 7, 2011

    • The Chicago Sun Timesreports that 77 Chicago-area Walmart stores now are featuring Ticketmaster touchscreen kiosks that allow people to buy tickets to live events and then save printing and shipping fees by printing them out right there. The kiosks are said to be exclusive to Walmart.

    “By integrating ticketing into Wal-Mart stores, we are able to offer fans this convenient way to learn about upcoming events and to purchase and take home tickets without leaving their neighborhood,” Nathan Hubbard, CEO of Ticketmaster, tells the .
    KC's View:

    Published on: September 7, 2011

    • In the UK, the Mail reports that Tesco has stopped giving out free plastic bags at its Express store in Somersham in Cambridgeshire, a move that the paper says is “a landmark move that could set the template for Britain’s biggest retailer.”

    According to the story, Tesco is falling in line behind a voluntary local initiative that banned the handing out of free plastic bags. And, the retailer says, it will be tracking customer reaction to see if the initiative is both expandable and sustainable; at the same time, the Mail suggests that Tesco’s acquiescence could lead to other communities putting similar pressure on the retailer.
    KC's View:

    Published on: September 7, 2011

    • H-E-B announced that it has launched an early childhood literacy initiative to educate parents and caregivers about the importance of reading to children a minimum of three times per week and to provide families with the tools and resources they need to prepare their early learners for school.

    The H-E-B Read 3 campaign is said to be the brainchild of H-E-B CEO and Chairman Charles Butt who has a strong commitment to education. In Texas, the company points out, “almost one third of the state's children entering the first grade are living in poverty while one in four Texas preschool children are not read to on a regular basis ... The H-E-B Read 3 campaign has three basic components -- an in-store learning and shopping experience for customers, access to affordable books and community outreach.”

    H-E-B plans to open 10 literacy centers in 10 of its stores by fall 2011. Currently, the company has two literacy centers -- one in Tomball, Texas and the other in Laredo, Texas.

    • Fitch Ratings is out with a new report on the US supermarket industry, indicating that it “is beginning to stabilize after two difficult years due to a more rational pricing environment together with higher food inflation.”

    However, the report also says that “the long-term challenges facing the industry - which include ongoing increases in healthcare costs, built-in increases in union labor rates, and the encroachment of new competitors and discount formats - will make it difficult for traditional supermarkets, with the exception of Kroger, to produce a sustained turnaround that enables them to restore margins to their pre-2009 levels.”

    Reuters reports that William Tennant, a former Duane Reade executive,
    has been spared a prison sentence for his fraud conviction related to the falsifying of books at the chain between 2000 and 2005. The judge sentenced Tennant to time already served, three years of supervised release, and a $10,000 fine.

    • Safeway announced that it is now offering walk-up flu shots, nasal mist and high-dose flu vaccines at more than 1,100 Safeway, Vons/Pavilions, Carrs, Dominick’s, Genuardi’s and Tom Thumb/Randalls stores with pharmacies across the country.

    • The Associated Press reports that the US Food and Drug Administration (FDA) “wants to revise the nutrition facts label—that breakdown of fats, salts, sugars and nutrients on packaging—to give consumers more useful information and help fight the national obesity epidemic.

    “A proposal is in the works to change several parts of the label, including more accurate serving sizes, a greater emphasis on calories and a diminished role in the daily percent values for substances like fat, sodium and carbohydrates.”
    KC's View:

    Published on: September 7, 2011

    • The Kroger Co. announced that Joe Fey has been named to be the new president of its Quality Food Centers (QFC) division, succeeding Donna Giordano, who has moved south to be president of Kroger’s Ralphs division in Southern California.

    Fey has been vice president of merchandising for Kroger’s Michigan division.

    • The Salt Lake Tribune reports that “Associated Food Stores President and CEO Richard Parkinson,who led the grocery cooperative to notable growth and also oversaw the purchase of the financially troubled Albertsons’ Utah supermarkets, is retiring.”

    He will be succeeded by Neal Berube, who has been serving as the company’s executive vice president and is its former CFO.
    KC's View:

    Published on: September 7, 2011

    MNB had a piece yesterday about how the US Postal Service is teetering on the brink of default, and could actually stop making deliveries this winter if the US Congress doesn’t do something to act on its situation. We also had a piece about how reportedly is testing a delivery depot concept using automated lockers in 7-Eleven stores in the Seattle area.

    Which prompted MNB user Jeff Folloder to write:

    You and I have been hurling wonder at the inevitable demise and possible resurrection of the USPS.  So I will acknowledge the 80 bajillion pound creature in the room with us: Amazon. Amazon certainly represents an enterprise that has been able to wring profitable commerce and maximum share out of the digital landscape.  And it is certainly the digital landscape that has cratered USPS.  You point out that Amazon is experimenting with delivery lockers in 7-Eleven stores.  Well, who has more deliver lockers than anyone?  USPS.

    I humbly volunteer myself as lead broker/mediator for the acquisition of USPS by Amazon.  Let's get it over with already.  USPS needs to be privatized and Amazon's own the entire supply chain philosophy might actually make the thing functional (and profitable) again.

    MNB fave Glen Terbeek had some thoughts about how Amazon is said to be redesigning its site, maximizing its mobile shopping functionality.

    KC, you said "What Amazon is doing is what every retailer should do - as much as possible, control the entire supply chain and turn it into a differential advantage.”

    Actually what Amazon is doing is recognizing that the shoppers are now in control through information, and as a result, Amazon is trying to control the "entire demand chain".  Supply chain is so ECR-ish!

    Amazon is trying to be the one, go to portal where shoppers can logically find what they need (or even determine what they need), and get it for delivery or pickup depending on what works for the shopper whenever and wherever they want it.  Price will not be a competitive advantage anymore since it will be driven to the lowest common denominator via price comparison like Amazon does today. Shoppers will be connected directly to the suppliers of what they want via the portal.  And the more the shopper uses it, the more personalized it becomes, making the switching barrier higher and higher.  Shoppers will not want to go to multiple sites to make their purchase decisions, and they don't want to deal with multiple ways of getting what they ordered. 

    The current retail stores, yes even supermarkets, are going to have the same problems as the post office is having today.  They will lose their relevance.

    In my opinion, the futures is all about the personalized demand chain.    Just like the Chicago river's flow was reversed many years ago, we need to change the flow of the consumer products industry.   It starts with the shopper, not with the manufacturers and retailers.

    Also on the Postal Service situation, MNB user Cheryl Lewis wrote:

    One thing the postal service does well is keep the prices of UPS and FedEx in check.  The first thing that will happen if the Post Office closes is the rates for everyone else will skyrocket very quickly.  A competitor will be gone and that will not be a good thing for the consumer.

    Another MNB user chimed in:

    I agree that nothing will get done to solve this issue – no different than Social Security or our Tax system.  We know there is a problem – we know it needs to be fixed – and no one has the courage to step up and offer solutions.  Where is our leadership?

    This is an easy one – anyone with general business sense knows that we have too many post offices – they deliver too often – we could close many – deliver every other day – cut half the workforce – use the remainder to deliver in two areas every other day – cancel Saturday and make this thing work.  How about actually giving some customer service to try and drive some business?
    Nothing will happen and the taxpayers will pay.

    From another MNB user:

    I’m surprised you aren’t talking more about the huge public employee union implications to the USPS story.

    The fact is that these workers have benefits that simply aren’t tenable in today’s retail world, and as long as our government allows unions to control the conversation in a way that they no longer do in publicly held corporations, they will not be able to effectively compete with them.

    To be fair, I think I have made reference to the employees benefits issue. Though perhaps not as much as you think the subject merits.

    MNB user John Franklin wrote:

    My local post office has a self-service station in the vestibule that’s not 24 hours, but it’s open longer than the counters inside. I haven’t had to go in and wait in line for a human staffer for at least a year; I’ve been able to send Express Mail, certified, small packages, etc. from the self-serve machine. If I need to send something bigger, I log online to my FedEx account, print a label and drop it off at the nearest Kinko’s/FedEx, which seem to be in more locations than there are post offices.

    Yet another MNB user wrote:

    I agree that the US Postal Service needs a major overhaul and that discontinuing Saturday delivery is a great start, but I disagree with your “respectful funeral” comment. It will be a sad day when the handwritten word has to be scanned and e-mailed, or when we have to gather ‘round the laptop to view the day’s Christmas cards. Will UPS and FEDEX start delivering post or will Hallmark and American Greetings just go out of business?

    Last time I checked, when I read something on my computer it is still the written word. It is the paper that has been eliminated, not the writing.

    I get your point. But I’m talking about the business problem. Tradition doesn’t pay the bills. (Let’s see how many people send Christmas cards if they actually have to pay what it costs to send a card from here to there. Suddenly, those emailed holiday greetings are going to look a lot more palatable.)

    I’m amazed that when the issue of smoking in bars and restaurants came up, we got as many emails as we’ve gotten saying that these bans are bad and invasive laws; I thought this was an old battle that had pretty much been decided (and I’m entirely comfortable with the way in which it has been resolved).

    An example, from an MNB user:

    Used to be a smoker, but feel that these restrictive laws are out of sync with our capitalist society.

    All establishments should just post a sign at the door. “smoking allowed” or “no smoking.” If you want to use the establishment then go ahead. If you don’t want the smokey environment then don’t go in. If you are an employee who smokes then no problem, if you are a non-smoker employee then get a job somewhere else.

    As the smokers become less and less a majority, the smoking establishment will have less and less Sales. The non-smoking facilities with increase in sales.

    Let the free market system work and stop legislating our way of life.

    And yes, I still want to have a cigarette every once in awhile. Almost 6 years.

    Be strong. That crap will kill you. And whatever I have to do, I have no intention of letting it kill me.

    Another MNB user wrote:

    Just one more point on the smoking issue addressing the comment (from an MNB user) printed in your article today.

    What’s to say that next time the government will tell people they can’t smoke in their house, car, backyard….

    As a non smoker with a spouse who is asthmatic, my next door neighbor moved in a year ago, and is a smoker.  We have had to nicely ask him NOT to smoke outside on the side of his house that faces us after an asthma attack was brought on by his smoke lingering in my yard.  Smokers do have rights, but every smoker infringes upon everyone else’s rights unless they are confined in a room with no windows when they smoke.  You cannot even drive behind a smoker without your own car filling up with the stench and odor.  Why should 90 people have to suffer for the enjoyment of one?????  Who cares about the tobacco industry more than the health of self and loved ones?????

    As you said – let’s get with the times and stop penalizing the masses for the enjoyment of one smoker.

    Actually, if I’m not mistaken, California actually considered a law a few years ago that would have banned people from smoking in their cars if they have children with them.

    Now, as much as I feel for those kids - and I think any parent who smokes ought to ask themselves hard questions about the behavior they are modeling and what they are doing to their kids’ lungs - I said at the time that I felt this was way over the line in terms of invasiveness.

    And I say this as someone who grew up with a mother who smoked two packs a day, which disgusted me almost from the time I became aware of it. (Amazingly, none of my six younger brothers and sisters ever smoked, nor did I.)

    But public places - including bars and restaurants and sports stadiums and airports and you name it - are entirely appropriate places for smoking to be banned. Even if they are privately owned.

    On the retirement of Costco’s Jim Sinegal, MNB user Dennis Sirianni wrote:

    I fully agree with you Kevin.  I just felt compelled to chime in supporting your views.

    Jim Sinegal always amazed me, and each week that my wife and I went to Costco to make our purchases of things we “had to have”, I was reminded of the outstanding culture he had build and sustained, and always felt good that the people who made the local Costco tick, were paid well and treated as part of the whole experience.

    Even in Jim’s statement announcing Craig Jelinek as his replacement, Jim showed humility, confidence, and general class in turning over the reins.  Should I ever raise to the ranks of Jim, I hope to be able to adhere to those same qualities of character.

    Finally, MNB user Craig Espelien had some thoughts about a critique yesterday of Walmart’s ad messages:

    In your piece on “Mixed Messages” I think that Ad Age has completely missed the mark or are at least ignoring what actually happened.  Walmart’s performance when they first launched the “Save Money. Live Better.” slogan was actually accelerating – they launched this right around back to school of 2008 – and were seeing traffic and basket increases based on the consumer’s need for a one stop shop as well as great prices.  The pundits at the time talked about how Walmart’s ownership of price combined with a message that it is okay to save a couple of dollars and still get good stuff was the perfect message.

    The issue is not with the message – but with Walmart’s lack of understanding that price was their foundation.  A foundation that they damaged through the use of high/low merchandising and pricing tactics that abandoned their core consumer for the sexier – but more fickle – higher end consumer.  They systematically confused their consumer (the Great Value redesign launched at roughly the same time – and was not popular with consumers due to it’s “in your face” nature reminding each consumer that they had just bought a cheaper/inferior product each time they looked in their cart or in their cupboard) by not continuing to trumpet price (the Save Money. Live Better. mantra was supported by an aggressive “Unbelievable Prices” slogan – but that was used for the high/low items) as an every day part of their DNA.

    I think it was the overall approach to abandoning every day low prices that is at the core of Walmart’s struggles – not the fact that they attempted to refine their image in the face of stiff competition from Target, dollar, drug, club and grocery.

    KC's View:

    Published on: September 7, 2011

    Good news and bad news for the Washington Nationals.

    First, the good news. Stephen Strasburg, the pitching phenomenon often described as the future of the franchise, returned to major league action from the disabled list after Tommy John surgery on his arm, and threw five shutout innings against the Los Angeles Dodgers. According to the Washington Post, “The radar gun again registered in the high 90s. The 90 mph change-up remained almost unhittable. The main man himself downplayed his accomplishments, as he always does, while his manager, teammates and opponents exhausted their supply of superlatives.”

    The bad news? He only pitched five innings. Once the Nationals’ bullpen took over, it blew the lead, and the Dodgers won 7-3.

    But in Washington, DC, hope springs eternal ... or at least for five innings.
    KC's View: