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    Published on: December 20, 2011

    Winn-Dixie Stores announced yesterday that it is going private, selling the company to Bi-Lo LLC for $560 million.

    According to the Wall Street Journal story this morning, Bi-Lo will pay $9.50 per share for Winn-Dixie shares, “a 75% premium to its Friday close, at which time the stock was down 24% so far this year.”

    Bi-Lo, which is owned by private equity group Lone Star Funds, currently operates 207 supermarkets in North Carolina, South Carolina, Georgia and Tennessee, while Winn-Dixie has 690 grocery stores in eight Southeastern states. The announcement says that there is no overlap between the two companies, and hence there should be no regulatory hurdles to overcome.

    “With no overlap in our markets, the combined company will have a perfect geographic fit that will create a stronger platform from which to provide our customers great products at a great value, while continuing to offer exceptional service,” says Bi-Lo Chairman Randall Onstead.

    As the Journal notes, “Both companies had faced difficulties over the past few years, with Winn-Dixie filing for Chapter 11 bankruptcy protection in February 2005 and emerging a year later with hundreds fewer stores. Bi-Lo filed in 2009 as a result of maturing debt and exited a year later.”

    The two companies say no decision has been made about leadership positions at the newly combined company, which will continue to operate under both banners.

    The deal is expected to close within 120 days.
    KC's View:
    Industry experts tell me that this is a smart deal, especially for Winn-Dixie, as it is being acquired by a smaller but stronger retail entity. A lot of people simply don’t think that Winn-Dixie had the muscle to compete in a marketplace dominated by bigger and more accomplished players. In addition to taking away some of the demands that come with being as public company that has to be managed as much for Wall Street as Main Street, this also will give the combined company a lot more buying power, which should enable it to offer lower prices.

    As for leadership ... while it is likely that the new company’s top positions will be take by people already within the fold, it also is at least possible that they could bring someone in from the outside, someone with experience in motivating people, integrating operations and helping grow companies. But we’ll see.

    BTW ... Almost as quickly as the acquisition was announced, a number of law firms - Powers Taylor LLP, Levi & Korsinsky, Harwood Feffer LLP, and others - said that they were investigating the sale - and, essentially, trolling for potential clients.

    Which is interesting, since Bi-Lo is paying a 75 percent premium for Winn-Dixie’s shares, and Winn-Dixie recently has been suffering from declining same-store sales. And while I am woefully ignorant about how such things work, it seems to me that anyone in possession of Winn-Dixie shares ought to be fairly happy about the price being paid, and anyone interested in the retailer remaining a viable shopping alternative ought to thing that the odds are better today than they were last week.

    But that’s not really what the legal maneuvering is about, is it?

    Published on: December 20, 2011

    by Michael Sansolo

    It’s fitting that Kevin’s Eye-Opener last week about his local bookseller is generating one of the last big MNB discussions of 2011. Because while many of the stories covered here throughout the year were so complex, that one story gets back to what it’s all about:

    How can a company, a store or an individual stand out and succeed in the crazy market in which we operate today?

    In many ways, the keys remain as simple as ever, which is a fitting end to this or any other year. The fundamentals of good business can be found anywhere and need time in the spotlight to remind everyone why they matter so.

    On Monday, the Washington Post highlighted a great example in Total Wine & More, a stunningly successful retailer that is inexplicably based in the suburban town I call home. Total Wine’s story of growth to 78 superstores grossing in excess of $1 billion from a single store grossing $300,000 is a checklist of key steps every company must take.

    Total Wine is the brainchild of the Trone brothers, who actually grew up on a family farm and cut their teeth in retail through a small beverage shop owned and run by their mother. Thirty years later they have 2,700 employees and stores up and down the east coast.

    The brothers’ steps were incredibly simple. They built their original business by taking a laser focus on cost cutting in every aspect of daily operations to keep themselves running in the black. That allowed them to cut margins, which in turn allowed them to build sales volume. It was the classic virtuous cycle of efficiency leading to lower prices, extra sales, greater efficiency, more sales and so on…

    They recognized the realities of selling wine, beer and spirits and understood they had to learn a lot about regulations, licenses and more. So unlike many small businesses they threw themselves into the business of getting to know government officials and regulators. That enabled them to work for flexibility in legislation and regulations on their stores and products, which then created its own virtuous cycle allowing additional selection and an improved shopping experience.

    Lastly, they embraced all aspects of their business to make sure it is a singular shopping experience. Each of the company’s stores has a classroom where customers and employees can learn about new products and hear speakers. In addition, store employees wear headsets that enable them to quickly communicate and get answers to any customer’s questions.

    Simply put, they thought small when it came to the details, but big when it came to growth.

    Interestingly enough, Yahoo! news on Monday featured an article on the humble beginnings of many of today’s most successful technology companies. The article included photos of the suburban garage where Steve Jobs and Steve Wozniak built their first Apple computer or the similar space where Sergey Brin and Larry Page created Google. Like oak trees, huge companies grow from acorns, especially when those companies are supported by inspiration and hard work.

    Sure, 2011 was incredibly complex in so many ways and 2012 promises more of the same. Economic realities remain brutal. The demographics and values of our associates and customers are changing constantly and in stunning ways. Technology is reshaping how we communicate, connect and more. And all the old headaches from competition to regulation promise to be just as challenging in the year ahead as ever.

    That’s when stories like Total Wine matter most as a reminder to focus on what you can control, to collaborate when it’s the best option and to make the customer experience better than ever. Nothing less will do.

    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: December 20, 2011

    There is a terrific piece in Fast Company Design that plays right to the MNB “sweet spot” - comparing great retail to the opening sequence of Raiders of the Lost Ark.

    Here’s how the magazine frames the issue:

    “By now, most of us get the message--we need to consider the entire customer journey, the complete experience, surrounding the products and services we offer to customers.

    “But in this frenetic, multitasking, app-happy society, how do you prepare people to pay attention in the first place, let alone get actively involved in your carefully planned customer journey?

    “As brands aspire to create deeper connections with an endlessly distracted consumer, storytelling in design has become ever more crucial. And to get it right, we might as well borrow (i.e., steal) ideas from those who know best--our friends in show business. How do great plays and movies prepare their audiences for their stories? How do they prime us all to be engaged regardless of what mood we are in? It’s simple: with an overture. Great brand experiences do exactly the same thing.”

    And here is where Raiders of the Lost Ark comes in:

    “In the movie world, great opening scenes perform the same function as musical overtures. The opening sequence of Raiders of the Lost Ark is a great example. It’s a 13-minute masterpiece of storytelling, despite the fact that what happens is completely independent of the actual storyline of the rest of the film. However, the scripted storyline is really not what the movie is about ... The opening sequence functions as an overture that funnels a broad audience through a narrowly defined, intense tunnel of experience, training them on the rules of this particular world, and then expands again into the main thread of the actual storyline. Once the entire audience has been on that wonderful opening ride, they are all on the same thematic page, no matter how they entered the theater. That’s the goal we should all aim for as designers of brand experiences.”

    Fast Company Design offers six “secrets” to Raiders-style branding, and you can read all about them here. But here is my favorite, just as a taste:

    Know what your story is about, not just what happens. This is the most important thing to figure out, and also the most difficult. It’s similar to the difference between your product and your brand. The product is what your company sells, but the brand is what your company is about. You must know this inside and out in order to encapsulate the brand and communicate it effectively from the beginning.”

    This should not be an Eye-Opener, but for many retailers, it will be. (The best retailers know it, and are vigilant about it.)
    KC's View:

    Published on: December 20, 2011

    Forbes reports that comScore is out with new data saying that “for the first 46 days of the November – December 2011 holiday season, online spending increased 15 percent year-over-year to $30.9 billion ... The most recent work week (Dec. 12-16) saw four days surpass $1 billion in online spending, led by Monday, December 12 with $1.13 billion and Friday, December 16 (known by the online retail industry as “Free Shipping Day”) with $1.07 billion ... Free Shipping Day, now in its fourth year, is a one-day, online-shopping event when thousands of merchants offer free shipping with delivery by Christmas Eve.”
    KC's View:

    Published on: December 20, 2011

    • The Chicago Tribune reports that Toys R Us “is giving last minute holiday shoppers a break this year, thanks to round-the-clock shopping right up until Christmas.” The retailer said its stores all over the country “will stay open for 112 hours straight starting at 6 a.m. Tuesday, Dec. 20 and continuing through 10 p.m. on Christmas Eve” - the second year in the road that the toy retailer has done so.
    KC's View:
    I cannot tell you how thrilled I am that I will not be one of the customers perusing the aisles of Toys R Us or any other retailer in the days before Christmas.

    Published on: December 20, 2011

    • Family Dollar Stores announced that Paul White, the company’s senior vice president of Apparel, Home and Seasonal, has been promoted to the role of Executive Vice President -- Chief Merchandising Officer.

    White joined Family Dollar in 2011, and previously was president, CEO, and director of Goody's, LLC.
    KC's View:

    Published on: December 20, 2011

    We continue to get a lot of email about the recommendation by the National Transportation Safety Board (NTSB) that the states ban the use of cell phones by people driving cards - even hands-free cell phones.

    One MNB user wrote:

    While I am against the ban, I can't help but admit that had a loved one been injured or killed by a distracted driver using a phone I would feel differently.

    From another MNB user:

    Regarding the reader’s question:

    Is there some kind of difference between hands free cell phone conversations and the ones I have with my wife sitting beside me in the car each day on the way into work?

    If the reader’s wife is anything like mine, I’d say the hands free cell phone conversation is more relaxed and less disruptive. I vote we allow hands free cell phones and ban driving with wives.

    I won’t put your name to that email...

    Another MNB user wrote:

    What about using the GPS function?  The pleasant voice on my phone giving me turn by turn is less distracting than checking printed Mapquest directions.

    MNB user Mike Franklin wrote:

    Oregon has banned cell phones in cars for over a year now…there has been no change in cell phone usage by either business people or non-business people. However, when the law is enforced…Oregon gets easy revenue, and car insurance rates go up because of the extra moving violations accumulated.  Good tax scheme…not very progressive!

    Interesting story…individual was pulled over in downtown Portland and given a $350.00 cell phone ticket…he told the police he just forgot about the law…his phone rang and he just picked up.  The same cop stopped him three blocks later and gave him another ticket for talking on his cell phone…this time he told the officer that he just had to tell his friend that he had just gotten a ticket.

    I had a long conversation with my brother Tim about this the other day, and he made an excellent point. Whatever the arguments against what some people will feel is government intrusiveness by pushing for such a ban, it seems obvious and quantifiable that talking on a cell phone while driving is distracting, and distracted driving can lead to accidents, injuries and death. It is akin, at some level, to driving drunk ... and we would never suggest that government has no right to pass DWI laws. (Well, maybe some loony tune people would.)

    MNB had a piece the other day referencing a Harvard Business Review piece suggesting that the key to great retail is great front line people. Which led one MNB user to write:

    Agree to some extent with your comments; but I believe it is location, purchase trip, and person specific.  I am a busy person and when I am shopping, I want to be left alone unless I want them to help me.  And I want to get out of the store as quickly as possible when I am done shopping.  I love any process that allows me to play a role in making that process quicker because I am in control and not at the mercy of a cashier.  I personally would love those systems used in Europe that auto-scan products as the pass through the belts; because I am in-charge and set my own pace (which is fast).

    On the flip side, I want someone available in a clothing store available at all times to let me in the “try on room” at my beck and call.  With technology changing so fast, I want someone available when I need them in the electronics area to explain to me why I would chose one product over another.  I want the Pharmacist available to make recommendations for me with healthcare.  I want a strong person available with a large cart near any item that is big and bulky that I cannot load or meander myself.  I don’t need anyone bothering me in the pet department, in the appliance area, or trying to up sell me to anything; which I find quite aggravating.  I do love the taste testing for new products but don’t want to see how well a sweeper works.  I use consumer reports, friend referrals and the web as part of my decision process on those items.  In a nutshell, most of the time, I want to be left alone.  I want to determine when I want help; not have the employees harass me; and I have never felt the desire to bond with my cashier.

    And I agree. The thing is, great front line people know when to help the customer, when to be available to the customer, and when to leave the customer alone.

    From another MNB user:

    Another of those "I remember when" tales.  In the early 70's I was a store manager for Kroger.  We actually trained people to be clerks, checkers, baggers, etc.  In fact, Kroger had a mock up store in Cincinnati above a store on Vine Street and Cincinnati new hires went to school.

    To shorten the story I'll focus just on the checking out process.  When we opened a register we typically ensured we had at least one bagger for every two registers and one bagger per register during peak hours.  This team approach provided a high service impression at the point of purchase, two opportunities for customer - employee interaction, and a second set of eyes to watch for irregularities such as items on the bottom shelf of the shopping cart.

    To focus on the checkers, our division didn't have a formal training facility, but checkers worked dummy orders for a day, then went into a live register with an experienced clerk.  Their training included the normal stuff a checker would face e.g.., paperwork, refunds, order reversal, ringing up an order, etc.  Remember this was pre scanner, even pre UPC.  A big piece of the checker training was smiling at the customer, greeting them when their order was being processed, and addressing them by their last name when they presented a check.  Part of this process, especially the last step, was a security device to see if the customer responded to the name.  The key was the lowest paid people in the overall Kroger operation was generally the only employee contact many of our shoppers experienced.  Kind of a minimum wage employee represented a multi- billion dollar corporation.

    I fully understand the impact of the wage line on a P & L but look at the contrast between service at Sam's/Walmart and Costco.  Costco floor staff typically earn twice what a Sam's employee earns and delivers a much warmer friendlier impression while Costco is able to maintain competitive price points. 

    Smoke and mirrors, no, just a customer orientation and a willingness to adopt a customer oriented business model Vs a bottom line mentality.

    MNB user Frank Loffa wrote:

    Agree with your comments on great retail, the machines have taken a significant piece out of American Retailing….the chit-chat with a friendly cashier. It seems like it has gotten down to  -  have plastic…serve yourself and move on. It also seems like there is never anyone at the customer service desk to help you with items such as a winning lottery ticket or a simple question.

    Here’s a great example, from another MNB user:

    I have to share a story with you that I know you will sincerely appreciate.  How timely since the story in today’s blog mirrors it.  “Retail needs to get more human at all levels”.  I have been reading your column since 2004.  I finally made the leap and bought the Apple iPad 2.  Having followed your posts about the Apple store I decided that I would purchase it there.  I wanted that human interaction and customer service. 

    On my second visit to my Lancaster, PA store.  I was immediately paired up with an associate to make the transaction.  No standing in lines and no counter between us. Joseph was deaf and had an iPad to enable us to communicate.  How amazing!  There were no issues only a smooth customer service experience.  The teamwork in the store was extraordinary.  He used his mobile device to ring it up and in short order someone brought my new iPad and accessories to us.  I then was paired up with Judean who helped me set up my new device.  She answered my questions and was extremely helpful and wonderful.  The entire experience was life changing for this new Apple convert.  The idea that they hired someone who is deaf is simply astonishing. Customer service is certainly alive and well at the Apple Store.

    Astonishing is precisely the right word for that story. Thanks for sharing.

    I described McDonald’s hamburgers the other day as tasting like cardboard, which led MNB user Rob Clark to write:

    First to qualify….follow you daily, love the selection of stories and love even more the commentary.  What happened on this one?  Interesting story, but you used it to hate on Mickey Ds and promote where you can afford to eat vs. giving us your angle on the strategy to highlight growers.  We know the food there isn’t gourmet, but it’s a successful company doing really well right now...maybe we can learn from their tactics.

    You’re right. McDonald’s decision to focus on its growers is a smart move, and is worth emulating. I’m not a fan of fast food in general - with some exceptions - but maybe I was a little cranky that morning.

    And another MNB user wrote:

    I really like McDonald’s burgers.  Will never forget the first one I had.  About 1975, a new McD in far northern MN opened.  Our family of nine waited in a line that stretched about 2 miles to get those burgers.  There are better burgers around sure but McD is not "crappy" in my book.  Respect your opinion though, keep them coming.

    I am always raving about Graeter’s ice cream....and MNB user Jan Fialkow was paying attention:

    I bought a pint of Graeter's Black Raspberry Chocolate Chip at Fresh Market after you mentioned it the last time. My taste buds say thank you, my hips mot so much!

    I feel your pain. I eat Graeter’s, and I think of the old Rhoda Morgenstern line:

    I don't know why I'm putting this in my mouth. I should just apply it directly to my hips.

    Finally, I’ve been extremely critical of the Lowe’s home improvement chain for pulling its advertising from a TLC series called “All-American Muslim,” which is designed to portray American families in Michigan who happen to be Muslims. Lowe’s pulled the ads after being hit with complaints by the Florida Family Assn., described by the Los Angeles Times as “a conservative Christian group that lobbies companies to promote ‘traditional, biblical values’.” The story says that the Florida Family Assn. calls the show "propaganda" that "hides the Islamic agenda's clear and present danger to American liberties and traditional values."

    I commented, in part, that “they knuckled under to the complaints of a fringe group that would rather demonize Muslims than see them humanized. A fringe group, I believe, that does not represent the essentially fair-minded character of the American people ... This is a case of intolerance winning out. And when that happens, these so-called protectors of American values do much to diminish American exceptionalism.”

    Which led MNB user Bill Lineberger to write:

    Please take a few minutes to research surveys of Americans who profess to have faith as Judeo or Christian believers, and I believe that you will find that likely about two thirds to three fourths of Americans fall into this category.  Referring to this huge segment of American citizens as a ‘fringe’ segment is simply untrue.  The truth is that it appears that you fall into a ‘fringe’ segment.

    I will add you to my prayer list praying that you will check out the claims of Jesus Christ as recorded in the Bible, as I did at age 40, and discovered that He died on a cross to pay for my sins and offer me eternal salvation.  A friend at that time suggested that I begin with the book of John in the Bible, which I did, so I humbly pass along that suggestion to you.

    First of all, I never turn down anyone who wants to pray for me.

    I would suggest, with all respect, that there may be better things to pray for. World peace? And end to global hunger? Continued success for the Denver Broncos? I’m simply not all that important.

    But I sort of like what the late Christopher Hitchens wrote about people praying for him when he was diagnosed with cancer:

    “I don’t mean to be churlish about any kind intentions, but ... please do not trouble deaf heaven with your bootless cries. Unless, of course, it makes you feel better.”

    I also want to be clear about something.

    I was not describing people who have Judeo Christian beliefs as being a fringe segment.

    I was describing people who are intolerant of people who do not share their beliefs as being a fringe segment. And I simply do not believe that such intolerance typifies the essentially fair-minded character of the American people, who understand that not every Muslim is a terrorist.

    Timothy McVeigh, I believe, was raised a Roman Catholic.

    Maybe people of faith really ought to be praying for an end to intolerance and for the strength to see beyond their own prejudices.
    KC's View:

    Published on: December 20, 2011

    In Monday Night Football, the San Francisco 49ers defeated the Pittsburgh Steelers 20-3.
    KC's View: