retail news in context, analysis with attitude

I love this email from an MNB user who wanted to weigh in on all the discussion of Walmart being investigated for violating US law for bribery of officials in places like Mexico, India and China:

Are you aware of the incredibly stringent policy Walmart has for its employees with regard to receiving gifts, gratuities, etc. Although I’ve never attended one, I’m told that every vendor must attend, in person, an annual briefing on their policy. I also believe that each vendor must send a high-level executive to these briefings and sign a statement acknowledging the policy and their agreement to adhere.
Even a simple vendor-paid lunch, is grounds for dismissal.
The Walmart culture is to never accept gifts or entertainment from any supplier, potential supplier, government, or any person the associate has reason to believe may be seeking to influence business decisions or transactions. Associates also may not accept a gift or gratuity from a customer for work performed by the associate in a store or club, except as required by local or national policy ... Imagine the gall of a company that says you can be fired for accepting a t-shirt at a conference while they go around the world bribing public officials to the tune of millions!

This is an excellent point. Thanks for making it. And it is a rejoinder to the folks who say that Walmart is just doing business the way business is done.

A week or so ago, we had a story about how some businesses were trying to figure out how to pass on the cost of Obamacare. One example - John Schnatter, CEO of Papa John’s, estimated that the ACA could cause him to tack a few cents onto the price of his pizzas. Another talked about putting the surcharge on the receipts for his restaurants.

I wrote:

I am absolutely sympathetic about the costs of Obamacare. I've never been sure that this is the best solution to the nation's health care problems, but it is the law of the land, so we'd better get used to it. (I was amused the other day when I heard a retailer who was anti-Obamacare say that he would prefer a single-payer system ... because he would have assiduously opposed such a system before Obamacare was passed.)

I will say this. If I order a pizza from Papa John's, and they want to indicate on the receipt that the pizza costs 15 or 20 cents more because they want to provide health care to their employees, I am happy to pay the extra money. I might even choose to patronize restaurants that say they are providing health care to employees and are up front about how much it costs, and what the customer has to pay for it.

I'm realistic. Health care is important, and the costs have to be paid by someone. Better to be transparent about it than to just increase prices. (My wife is a teacher, and we have health care as part of her contract. The cost of health care for teachers in the system is a matter of public record, and is published in the newspaper once a year. I'm okay with that.)

Later, responding to some heated emails, I pointed out that Schnatter, CEO of Papa John’s and one of the loudest anti-Obamacare voices, makes $2.7 million a year: I'm not suggesting that he isn't worth it ... but the optics of someone making that much money complaining that he'll have to either lay people off or charge 11-15 cents more per pizza to cover health care costs just strike me as a little odd.

One MNB user responded:

When did making money become such a bad idea for business? Why shouldn’t Mr. Schnatter make $2.7mil? You point out on the Hostess story that management may be at fault for not making changes so that they would be profitable. Agreed. But even if the current targeting for a tax increase of the “rich” (those making $250K, which in my neck of the woods is not “rich”), the increased taxes to the federal govt would only fund it for about 8 days. That is an ineffective political solution, not a common sense solution for the American people. Again, we should expect more.

First of all, I never said Schnatter should not make $2.7 million a year. I just suggested that the optics are a little off ... and in the current transparent environment, optics matter.

I also think that when all is said and done, it seems likely - or at least possible - that the people who are supposed to govern may come up with a reasonably equitable solution to the whole fiscal cliff situation. They'll make cuts in entitlement programs, they'll figure out a way to raise revenues (probably more through changing tax rates on capital gains than earned income), and maybe even start a long-term initiative that looks to address tax code inequities.

Maybe I'm a cockeyed optimist, but I'm feeling confident. Or at least hopeful. Sane heads will prevail, and people will see that governing requires compromise, and the nation requires governing.

I heard a great line over the weekend, in which someone said that the one time that the nation's leaders were unable to compromise, it resulted in the Civil War. Despite all the secession movements developing around the country, I cannot believe that we've reached that level of stupidity as a nation.

From another reader:

I can understand John Schnatter being bitter about the increased cost due to the health care but isn’t this the process of all businesses?  For any number of reasons there are countless items that cause a cost increase and the business owners are forced to make concessions or pass the costs on to the consumer.

MNB user Jessica Duffy wrote:

I like your idea about patronizing those businesses that respond to Obamacare by raising the price of their product a bit to provide healthcare for their employees. I would gladly pay a little extra to buy my products or services from a company I know is providing a living wage and health benefits to full time employees rather than a company that operates  with less-well-paid (and probably less-well-trained) part-timers. If everyone is participating, then theoretically the overall costs will come down for companies and individuals. I’m hoping that will lead other companies that already provide benefits but have reduced their full-timers in response to rising costs, to be able to increase their percentage of full-timers again.

BTW ... I have a son who lives in Chicago, is an actor/writer, and works at Starbucks. Where he gets health benefits. Which, as far as I am concerned, earns the company a lot of points in my book.

A shopping anecdote from an MNB reader:

I recently moved into a new apartment, and Lowes sent me a 10% off coupon as a “Welcome to your new home” incentive- I’m assuming they pair with the USPS to get address changes- good marketing on their part.

In any case, I am planning on purchasing a Dewalt Cordless Drill for my significant other this Christmas, and thought the coupon would be a great way to support my Brick & Mortar retailer, Lowes. Before doing so, I did some comparison shopping on three websites- Lowes, Home Depot and of course, Amazon. Each had the product in stock- with Amazon, it would be delivered, with Lowes and HD, I could either pick up in store, or have delivered. However, as is the case for most of us, price was the real determining factor.  Amazon had the product for $109, a savings of $39, as advertised on their website. Home Depot- $199, and Lowes $189. That’s right- the Brick & Mortar retailers were at least $40 over Amazon’s regular price, and almost $100 over their sale price. Amazed that this could be the case, I checked out Black Friday ads for Lowes. Sure enough, the same drill will be “on sale” for $99 on Black Friday- only $10 less than Amazon’s everyday price.
For the record, I refuse to go out on Black Friday, and will be working anyway. Looks like Amazon wins this round.

On another subject, an MNB user wrote:

An interesting note that Carrefour seems intent upon divesting of its operations in less developed global markets yet still has a complete absence here in North America.  I wonder if the French ever contemplated another run at North American grocery, and if so, what they might do with SUPERVALU - the croissants would certainly have to be better:). Bon chance...

Hard to imagine.

I cannot remember whether it was an executive with Carrefour or Auchan - two French retailers attempting US incursions a number of years ago - but a senior executive at one of the companies told me that he was not concerned that their stores seemed counterintuitive for a US consumer. "We will teach Americans how to shop," he said in a French accent that fairly dripped with contempt.

Besides, the Tesco experience here in the US may not say "go west, young man" to the folks at Carrefour. They have enough problems.

Regarding the Hostess debacle, one MNB user wrote:

There is a lot of blame to go around for the financial plight of Wonder Hostess. Certainly Executive salaries and the investment companies which have run the company have not been good for them. But, blame also has to be placed with the union. The union fought for many years to keep the cake and bread routes separate. Hence you had two trucks pulling into every grocery store with $100 worth of product each when one truck could have delivered the goods much more efficiently. Stupid.

It seems evident to me that there is more than enough blame to go around.

Finally, I defended the right of critics and pundits to opine, and suggested, in a response to an MNB user who commented that "dimwitted TV anchors" would appreciate such license, that critics and pundits are "a far cry from hiring someone to deliver the news just because they have a pretty face."

Which led MNB user Blake Steen to write:

I’m assuming and I know I shouldn’t that your pretty face comment about news anchors is a stab at Fox News anchors who are very pretty.  I would encourage you to look up the degrees and accolades of all the Lady Fox News anchors.  It is mind blowing.  Almost as mind blowing as their pretty faces. 
If this is not who you were talking about then I’m sorry for assuming wrong.

Let's be clear. Fox News anchors never even entered my mind when I made the "pretty faces" remark.

And I cannot even imagine why you thought I was.

I was thinking William Hurt in Broadcast News ... one of the best movies ever made about how the TV news business does not to its job.

FYI...Fox News was launched in October 1996. Broadcast News came out in December 1987.

To paraphrase Shakespeare in "Hamlet" ... perhaps you doth protest too much.
KC's View: