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    Published on: August 6, 2012

    by Kevin Coupe

    Interesting interview in the New York Times yesterday with Laurel J. Richie, president of the WNBA, in which she discussed her management/leadership style. In one passage - which seems resonant in terms of recent retailing news - she talked about the importance of communicating to the troops:

    "I keep learning time and time again about how important it is as a leader to have a clear vision and communicate it often. I’m usually very clear in my head about where I think we should be going, and I’m always learning that you cannot overcommunicate that. I get a little bored with it because it’s familiar to me, but I realize it almost has to become a mantra so that everyone on the team knows where you’re headed ... You tell people, 'here’s where we’re headed and these are our priorities,' and then you just sense how often people are wandering. I always say that part of the job is keeping all the bunnies in the box. You start with all the bunnies in the box and then somebody gets a great idea to go do something else and you go help them all come back and get in line and then a bunny over here pops out. So the more the bunnies are getting out of the box, the more I realize I just haven’t done a good enough job communicating what our priorities are and what our focus should be."

    Richie goes on to say that "I want people coming in every day thinking this is a place where they can bring their very best, and I believe that if they feel that way, they will actually do it. I just don’t believe in terrorizing, intimidating, testing, catching people off guard. I don’t play games. Life’s too short, and we’ve got too much to do. I want people focusing on the work, not on how to navigate politics. I never want people sitting in their offices or their cubes thinking, 'What does she really mean or what does she really want?  What is she really asking?'  That’s just wasted time to me. That’s why to me, it’s my job to create an environment where they can bring their best selves, and good things will happen as a result."

    This is an important notion, I think ... that if everyone on the team is not moving in the same direction, working on the same goals, then it may be because the CEO has not communicated them clearly and passionately enough. In the end, that ought to be a primary responsibility of the CEO...and one of the things on which he or she is judged...
    KC's View:

    Published on: August 6, 2012

    Reuters reports that Fairway Market, which began as a fruit and vegetable stand in New York City during the Great Depression, has filed for an initial public offering (IPO).

    According to the story, "The company, majority-owned by private equity firm Sterling Investment Partners, did not provide details about the offering. It filed under its parent company, Fairway Group Holdings Corp."

    Reuters suggests that Sterling may have been encouraged to make the move by the positive stock market showings of Whole Foods and Fresh Market, both of which have been performing strongly in recent months.
    KC's View:
    Assuming this happens, it is a fair guess that the move will fuel even greater and faster expansion by Fairway. Which could be a good thing, if the company is able to remain true to its value proposition. The only problem is, some folks I know who shop at its stores feel that since it took private equity money, the stores are not quite what they used to be.

    Companies that go this route have to be careful that their priorities don't change, and that it becomes more about Wall Street than Main Street...

    Published on: August 6, 2012

    The Associated Press reports that the US Department of Agriculture (USDA) is saying that a California Holstein cow discovered to have bovine spongiform encephalopathy (BSE) - commonly known as mad cow disease - was an isolated case and never posed a threat to the food supply.

    According to the story, "A three-month investigation looked into the movements of the infected dairy cow, her offspring and the food eaten by the herd. The investigation turned up no other cases of bovine spongiform encephalopathy ... USDA investigators tracked the cow from the ranch where she was born to a heifer operation where she was raised and bred to activate her mammary glands and then to the Tulare County dairy where she spent her life."
    KC's View:
    I don't mean to sound cynical, but it is always an "isolated threat," just like it is always a "lone gunman."

    There are some interesting stats in the AP story...and I've italicized what to me are the significant words:

    • "The 10-year-old dairy cow, only the fourth with the sickness ever discovered in the United States, was found as part of an Agriculture Department program that tests for the fatal brain disease in about 40,000 of the 35 million cows slaughtered each year."

    • "Investigators found 282 cattle identified as birth 'cohorts and attempted to trace the 210 that might have made it into the food system. Ultimately investigators slaughtered one dairy cow that was the Holstein's offspring, but she was found not to be infected. There is no live-animal test for BSE."

    I cannot say that I am reassured.

    Published on: August 6, 2012

    The Chicago Tribune reports that Walmart says that "it has no objection to selling a new crop of genetically modified sweet corn created by biotech giant Monsanto ... Monsanto’s genetically modified sweet corn is resistant to a common herbicide, which allows farmers to kill weeds without killing the corn. It also contains a toxin that fends off certain pests." In advance of the decision, the consumer group Food and Water Watch presented Wal-Mart with a petition signed by 463,000 people asking it to boycott the product.

    "“After closely looking at both sides of the debate and collaborating with a number of respected food safety experts, we see no scientifically validated safety reasons to implement restrictions on this product,” Walmart tells the paper.

    The Tribune notes that "environmental and health activists expressed surprise and disappointment at Wal-Mart’s decision. Earlier this year, Whole Foods, Trader Joe’s and General Mills said they would not carry or use the genetically modified sweet corn."
    KC's View:
    The story also notes that "labeling of such foods is required in the European Union, China, Russia, Australia and Japan but not in the U.S. Although the FDA encourages companies to do safety studies, they are not required to do so."

    I do wish that GMO labeling was required in the US; I think that level of transparency is required in a 21st century business and cultural environment. I think not labeling it will, in the long run, be a mistake.

    While I am not happy with this trend, I do have to admit that I heard a story on NPR over the weekend about some small farmers who say that without GM corn, the drought would have just killed them this year, that modified corn has stood up to the horrible conditions better than traditional corn would have.

    Which at least got me thinking about both sides of the issue...

    Published on: August 6, 2012

    The National Cooperative Grocers Association (NCGA) announced it will reject the recently proposed $7.25 billion class action settlement with Visa Inc., MasterCard Inc., and several major banks. The settlement was offered in response to antitrust litigation alleging unfair practices by credit card and debit card issuers. NCGA is named as one of the plaintiffs in the lawsuit.

    "When NCGA signed onto this action, we did so in the interest of consumer fairness and in support of industry transparency," said Robynn Shrader, chief executive officer of NCGA. "This settlement falls short of providing true reform in the system by continuing to allow credit card issuers and credit card networks to exploit retailers and consumers without risk of repercussion."

    The NCGA, in making the decision is siding with the National Association of Convenience Stores (NACS), National Grocers Association (NGA), Walmart, and Target, all of which have stated their opposition to the terms of the proposed settlement.
    KC's View:
    Dead settlement walking? Not quite yet...but we're getting close.

    Published on: August 6, 2012

    Bloomberg reports that the digital media company Captivate Network is projecting that US companies will suffer productivity losses of $1.38 billion because of the national fixation on the London Olympics that is being fed by an "onslaught" of coverage available via "network and cable television, live streaming online, and on mobile devices."

    The stated goal of NBC, which has exclusive electronic media rights to the games in the US, has been to make them available to as many people as possible at all times, and the network seems have succeeded, with ratings up on virtually every channel and in every time slot. In fact, the numbers are so high that "this Olympics, originally expected to lose about $200 million, is now expected to break even and might be one of the most-watched Olympics ever," the story says.

    The productivity problems are part of a broader trend, Bloomberg writes: "Employers' battle against sports may not be winnable. During the 2010 World Cup, InsideView estimated that the United States lost $121 million in decreased economic output, and Britain lost $7.3 billion. Productivity lost to college basketball's March Madness this year cost employers an estimated $175 million during the first two days of the NCAA tournament, according to an unscientific estimate by Challenger, Gray & Christmas, an outplacement consulting firm."

    There is, however, at least one perceived upside.

    James Frischling, president and co-founder of New York financial advisory NewOak Capital - which keeps office TVs tuned to the Olympics after noting in the past that some employees were sneaking out to bars to watch - says, "There's a positive energy to have it on."
    KC's View:
    Tough to rationalize those losses when they are put in those terms. On the other hand, in today's world, anything that brings people together rather than breaking them apart is a good thing.

    Published on: August 6, 2012

    Here's a headline that was posted online over the weekend that rated high for being both unusual and utterly irresistible:

    Walmart Sex Show: Kan. Couple Stole Lube for In-Store Sex Act

    According to Reuters, a "Kansas couple was reportedly so enamored with each other that they just had to get it on in the middle of the Walmart. Right in front of other customers, 22-year-old Julian Call and 35-year-old Tina Gianakon allegedly began 'sexually fondling' each other ... Perhaps feeling a little shy, the couple also reportedly stole a tube of K-Y Jelly to help facilitate the act. Surprisingly, police say the couple appeared sober."

    The couple now faces charges of lewd and lascivious behavior. Whether or not the charges are misdemeanors or felonies will depend on the age of Walmart customers who saw them, the story says.
    KC's View:
    In Kansas? Really? And at a Walmart?

    Maybe they were going to a Kiss-In at a local fast food joint and got confused...

    Published on: August 6, 2012

    • The Financial Times reports that Tesco will begin selling home mortgages to customers who are able to put down a 20 percent deposit, offering rates ranging from "3.19 percent for a two-year fixed deal to 4.69 percent for a five-year tracker mortgage."
    KC's View:

    Published on: August 6, 2012

    The New Haven Register reports that as a result of its recent poll findings that a majority of local residents would like to see a Stew Leonard's store opened on the site of a long-defunct movie theater complex in Milford, Connecticut, Stew Leonard, Jr. stopped by the site to take a look.

    "“The site looked very nice and would make a solid location for a Stew’s,” Leonard wrote in an email to the Register. “When I was in our Newington store, I met a few customers from Milford. They all agree, they would love to have a Stew’s in Milford."

    However, Leonard said that as a family company, Stew Leonard's is not on a fast-growth path, and right now is more focused on Long Island than on further development in Connecticut.

    "Don’t read too much into this visit," he wrote the Register. "It’s curiosity more than anything."

    Stew Leonard's was stymied in a 10-year effort to open a store in nearby Orange, Connecticut, by local residents who did not want a high-traffic retail site there.
    KC's View:
    Unlike Fairway, a company that used to be similar to Stew Leonard's until they took private equity money and started expanding, Stew Leonard's has always been careful about expanding, understanding that to take outside investment dollars would be to give away control. And that's something that they don't want to do. IMHO, that's a wise choice for the family and the company, because it keeps the focus on the customer.

    Still, it's nice to be wanted...

    Published on: August 6, 2012

    • The Queens Chronicle in New York City reports on efforts by an organization called New Yorkers for Beverage Choices (NYFBC) to educate both businesses and citizens about Mayor Michael Bloomberg's proposal to ban the sale of jumbo sugared beverages by restaurants, in the hope of rallying opposition to its passage of the city's Health Department.

    "NYFBC was only formed seven weeks ago," the Chronicle writes, "but it already has 100,000 individual members and 2,000 businesses from all across the city, according to the group’s spokesman, Eliot Hoff."

    • Loblaws stores in Canada announced that beginning next week, they will begin using the Guiding Stars nutritional labeling program on store shelves. Guiding Stars, originally developed by Delhaize-owned Hannaford Supermarkets, uses an objective scientific algorithm to rate virtually every product in the store as good for you, better for you and best for you, giving these items one, two or three stores. Products that don't meet the criteria don't get any stars.

    • The Seattle Times reports on how Starbucks "is on an international tear," saying that "it plans to open 1,200 stores in the next fiscal year, which begins in October — about three shops a day. Fewer than half of those will be in the United States.

    "About 500 of the new stores will open in Asia - more than half in China, where the coffee colossus has operated for more than 13 years. Starbucks also plans to open a farmer-support center in China's Yunnan region this year."

    "We're in the early stages of growth in Asia," John Culver, president of Starbucks' China and Asia Pacific region, tells the paper. "It represents the fastest and largest retail growth opportunity in the company's foreseeable future."
    KC's View:

    Published on: August 6, 2012

    • In Minnesota, the Pioneer Press reports that "embattled grocery chain Supervalu said it will pay its new CEO Wayne Sales a base salary of $1.5 million a year, along with a signing bonus of $1.26 million."

    In addition, the company said that "its board chairman-turned-CEO will also 'be entitled to receive a cash bonus for the portion of Supervalu's fiscal year' of at least $1 million, and the opportunity to earn a bonus up to $3 million in 2013.

    "On Thursday, Supervalu's board also granted Sales 447,155 stock units. If he remains employed as CEO for another year, Sales will receive another $1.1 million in stock."
    KC's View:
    Essentially, regardless of whether he is able to turn Supervalu around or not, I think it is safe to say that Wayne Sales is going to have a good year.

    I don't begrudge Wayne Sales - or anyone else, for that matter - the opportunity to make a buck. But at a time when he continues to talk about tightening the company's belt, finding efficiencies, and laying off employees, these numbers inevitably are going to create some discontent within the ranks. I can hardly blame them, especially because there remains a view that as chairman of the company, Sales has at least some culpability for Supervalu's current "embattled" status.

    Published on: August 6, 2012

    Got several emails from readers who wanted to weigh in on the whole"customer is always right" discussion...

    One MNB user wrote:

    Of course, the customer is not always right, especially when they steal.  But I agree with you, when you said "always act like the customer is always right, because in the long run it is better for business than treating any customer like he or she is wrong."  I learned this 252 (dog) years ago when I started in the Retail industry.

    We had an ad which broke every Thursday with good sale prices on popular items.  One Wednesday afternoon, a lady asked to speak to the manager.  When he arrived, the customer said "You guys are trying to fleece your customers.  None of the items in this flyer are priced correctly."  When the manager responded that the ad started on Thursday, she said "But it IS Thursday."  The manager paused for a moment, then told the customer to get everything she wanted and he'd ring the sale items at the sale prices for her.

    After the customer left, I asked the manager why he had done that.  He said the lady seemed genuinely mistaken about what day it was, and he didn't see any upside in arguing with her.

    The next day when the store opened, the lady was back asking to speak to the manager again.  The customer apologized for her confusion the previous day, thanked the manager for his kindness, and offered to pay the difference between the sale prices and the regular prices.  Of course, the manager declined to take the extra money, whereupon the customer said, "Well I have to make it up to you somehow" and she proceeded to buy over $200 worth of high margin merchandise.  Then she went home and wrote a wonderful letter the the President, who visited the store and personally congratulated the manager on his customer service skills.
    The manager's simple response to this whole thing was "Even when the customer is wrong, sometimes they're still right."  It's a lesson I've obviously never forgotten.

    Fabulous story. Thanks for sharing.

    Another reader wrote:

    I learned the lesson that the customer is always right in my first job as a 16 year old when I worked in a family owned bakery. A crabby customer came in one time and I guess I must have rolled my eyes at her. The next day the owner talked to me and said, if you want to go in the back after the customers leave and say something about a customer, that’s perfectly fine, but don’t ever do something like that in front of a customer. He was so right and I was thankful to have learned that lesson early on.

    Still another reader, pointing out that on Friday I had disagreed vociferously with one reader's assessment of something I wrote, said:

    (Your) response did not have the tone of “the customer is always right”.

    Now, this reader did add that he was making the comment somewhat tongue in cheek...but he raises a good point.

    The difference between MNB and a retail store is that here, the stock in trade is ideas, and the whole enterprise is built on the notion that we can disagree in a civil fashion about concepts large and small. The fact is, when the disagreements get the most profound and the most passionate, my site traffic goes up. That's not usually the case with a retail store.

    I do have to say that I thought it was interesting last week when one MNB user wrote:

    It just dawned on me that I read you nearly every day more for this kind of discussion than for the retail food store content...

    Just trying to keep the conversation lively...

    On another familiar subject, one MNB user wrote:

    I too have read several comments that attribute the demise of Supervalu to the “Albertsons people”. Since my 20+ years with Albertsons is now 10 years in the past I have always just sort of let that go but one of your readers stood up for the “Albertsons people” and I felt his comments needed to be bolstered.

    The pre-American Stores Albertsons people are not who is to blame. Those people knew how to run stores, develop people, treat employees, treat customers and make money. The other reader is dead on, the biggest mistake Albertsons ever made was to buy American Stores. It went directly against the culture that had been preached for decades – “we don’t want to be the biggest, just the best” and my favorite was when I was traveling with the then President of the company John Carley and he was questioning a Division VP about the cost of a decorative architectural element of a new store being built. He then turned to me and asked, "Do you know why they don’t put chrome on a tractor? I doesn’t make it plow any better”.

    Trust me, the real Albertsons people felt exactly as the real Supervalu people now do – “Who the heck did you bring into our family and why are you letting them destroy it?”

    Regarding the lobbying of Congress for a national law requiring the collection of online sales taxes, one MNB user wrote:

    Most of the lobbying for this effort was by Wal-Mart espousing that Amazon had the advantage and operated in an unfair playing field of retailers.  Will Wal-mart allow their workers now to unionize, given their unfair playing field paying lower wages???

    Let's not get crazy now...
    KC's View: