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    Published on: December 12, 2012

    by Kate McMahon

    This is a story of following the footsteps of a hero to give back to those in need.

    Unloading cartons at a vacant supermarket-turned-relief center in storm ravaged Staten Island last Sunday, I was fortunate to count myself among the 10,000 volunteers who have done just that since Hurricane Sandy hit. Thousands more individuals and companies from across the country – through donations large and small – have also followed and reminded us all what the season of giving truly means.

    The footsteps belong to Stephen Siller, a New York City firefighter and father of five who was heading home from the late shift when the first plane hit the World Trade Center on Sept. 11, 2001. He turned around. When told the Brooklyn-Battery Tunnel was closed to traffic, he strapped his 60 pounds of gear to his back and ran through the tunnel to meet up with his fire company, Squad 1. Stephen Siller was one of 343 firefighters who perished in the terror attack, and his family and friends chose to honor him with a fundraiser the following September called the Tunnel to Towers Run.

    This is also a story of how that one run launched a national foundation to support first responders and our nation’s military wounded in the fight against terrorism, and then “turned on a dime” to become a relief agency after Sandy struck so close to home on Oct. 29th.

    Since then, the Tunnel to Towers Foundation effort has:

    • Opened relief centers in Staten Island, Brooklyn and Long Island.

    • Enlisted the help of 10,000 volunteers.

    • Distributed $7 million dollars in goods -- from baby food, toothpaste and canned goods, and blankets and socks, to gallons of bleach, shovels, appliances and sheets of drywall -- to storm victims in the New York area.

    • Gutted 1,000 damaged homes.

    • Raised $3 million in donations.

    T2T began accepting donations in a parking lot near the Staten Island Ferry four days after the storm, and moved into the vacated supermarket when the daily truckloads of supplies started rolling in. Squads of volunteers turned the space into a relief center, with sections of clothing, baby needs, food, toiletries, paper goods, cleaning and construction supplies, small and large appliances, and even dog and cat food.

    One such volunteer was Randy Payne, who works in corporate brand sales merchandising and planning at Kroger’s Cincinnati headquarters. He participated in the first T2T run in 2002, and has since helped launch a satellite run in Cincinnati to fund construction of a handicap-accessible “smart home” for a local serviceman severely wounded in Afghanistan. He lauds the support of Kroger, its associates and suppliers for T2T at home and in New York.

    “It’s an incredible thing to be part of this effort,” he said, working in the center before driving back to Ohio.

    For the families who came through the former Cangiano’s Pork Store that rainy Sunday afternoon, with their FEMA certificates and ID numbers in hand, the supplies were indeed a lifeline. For those still “camping out” in dark chilly homes, the ceramic heaters were a lifesaver. I was but a one-day (thus far) volunteer, unloading cartons and assembling family food cartons, struck by the commitment of those who made this organization run.

    Support from the foundation’s long-time “run” partners – including Walgreen and its Duane Reade division, Dunkin Donuts and UPS – remains steadfast during this post-Sandy effort for T2T. Much-needed shipments of new clothing were rolling in from The Gap and a charitable organization called Fashion Delivers, and countless others.

    A stellar example of quiet generosity came from the partnership of Welch’s, Giant Eagle of Harborcreek, PA, and Roberts Warehouse of North East, PA, which shipped a full truckload of juice and PB&J sandwich ingredients to the Staten Island center. The shipment included 8,964 jars of Welch’s Natural Concord Grape Spreads, 8,964 jars of BAMA Peanut Butter, 24,984 bottles of 10 ounce 100% grape juice, and two pallets of Giant Eagle bread.

    But so much more is needed, as T2T works tirelessly to help the families hoping to rebuild their homes, and lives, and to share the holidays with loved ones. As the folks in New Orleans and the Gulf Coast know only too well, recovery takes years. Organizations such as T2T, the Red Cross, the Salvation Army and more continue their efforts and need our support, during this holiday season and beyond.

    For more information on the Stephen Siller Tunnel to Towers Foundation, click here.

    It’s an honor to follow in his footsteps.
    KC's View:

    Published on: December 12, 2012

    by Kevin Coupe

    Interesting story in Bloomberg Business Week about executive changes recently made at Apple, and why CEO Tim Cook decided to push Scott Forstall - who essentially was in charge of Apple's software development - out of the company, and add software to the responsibilities held by Jony Ive, who was in charge of Apple's hardware development.

    According to the piece, Cook had two reasons - collaboration and consistency.

    Essentially it came down to this. Forstall was not good at dealing with other Apple executives; he was said "to be a political operator in the company, managing up, taking credit for other people's work, and shutting out other divisions."

    As for consistency, Cook tells the magazine that he believed it simply made sense to put the guy in charge of making the most elegant and imitated technology products on the market also in charge of "the overall feel of the product."

    This may be a view of the future of Apple, as it matures as a company. It seems smart, if not revolutionary ... but struck me as a Eye-Opener.
    KC's View:

    Published on: December 12, 2012

    It was just a week ago that Unified Grocers announced that it had hired Leon G. Bergmann, the former president, independent business at Supervalu, to be its new senior vice president of sales.

    Not so fast, said Supervalu, which claims that Bergmann signed a non-compete agreement, which prevented him from working for Unified, with which Supervalu competes in the western US. Supervalu now is suing to prevent Bergmann from taking the job.

    The Minneapolis/St. Paul Business Journal reports that "Supervalu filed a lawsuit in Hennepin County District Court after the announcement and sought an order barring Bergmann from working for his new employer or otherwise violating his confidentiality agreement and a 12-month non-compete. The breach-of-contract suit also accuses Unified Grocers of intentionally interfering with the agreements."

    Unified Grocers said it will respond to the suit at "the appropriate time," but reportedly has sued Supervalu "to invalidate the non-compete agreement."

    The Business Journal continues: "In its suit, Supervalu said Bergmann's new position will put him head-to-head with Supervalu in California and the Pacific Northwest, where Unified Grocers is one of Supervalu's 'fiercest competitors.' Supervalu's lawsuit said Bergmann will inevitably 'exploit his extensive knowledge' of Supervalu's pricing, strategy and customer information to compete with Supervalu."

    Two other interesting notes from the story:

    • When Bergmann resigned from Supervalu, he wrote "in his resignation letter to Supervalu CEO Wayne Sales that he had lost confidence in the company's turnaround efforts."

    • Supervalu "has taken additional steps to hold onto its top managers. This summer, it offered stock options and retention agreements worth up to $750,000 with four executives, including Herkert and Chief Financial Officer Sherry Smith. Bergmann wasn't one of the executives."

    Supervalu is not expected to stop the hiring of Sue Klug, formerly President, Southern California Division, of Supervalu-owned Albertsons, who has been hired by unified to be its Senior Vice President and Chief Marketing Officer. (She did not work for Supervalu corporate and had been gone from the company longer.)
    KC's View:
    Hard to know what to make of this, since there are so many conflicting signals. One certainly could not blame Bergmann for wanting to get off a ship he thought was sinking, though the implication is that he may have been upset by the fact that when they were handing out the life preservers, he didn't get one.

    It also could be argued that whatever Bergmann knows about Supervalu's strategies, the chief advantage would be his ability to tell Unified to do something else. Anything else.

    In addition, there's the whole issue of non-compete clauses ... some of which get enforced, and some of which do not. (Could it be argued that since Supervalu tends not to be very competitive, moving to Unified doesn't really mean Bergmann is competing with Supervalu?)

    In the end, though, there may be a signature on a legal document, and that could be that.

    Maybe they'll all come to some sort of negotiated agreement. Then again, maybe nerves are all too raw, and Supervalu needs a win somewhere, even if only in court.

    Published on: December 12, 2012

    The Bellingham Herald reports that Clarence Gabriel has stepped down as president/CEO of Haggen Inc., the 28-store Washington State-based chain. No reason was given for the departure, except to say that Gabriel - a former PepsiCo and Albertsons executive - would be pursuing other opportunities.

    Gabriel took the job in February 2011, succeeding Jim Donald, the former Starbucks and Pathmark CEO who was brought in to run Haggen in October 2009 and got the company into shape so that a majority ownership in the company could be sold to Comvest, a Florida private equity group.

    Haggen is creating a new Office of the President, and the company will be run by three people: Clement Stevens, senior vice president of merchandising; John Turley, chief operating officer, and Ron Stevens (no relation to Clement Stevens), the chief financial officer and chief information officer.

    The paper notes that "Haggen is in the midst of rebranding its stores with the Northwest Fresh brand, which is meant to better reflect the community with 'store within a store' specialty shops, a new look inside, and a focus on Northwest products."
    KC's View:
    Must be something in the air these days ... it seems like a lot of senior executives are losing their jobs lately, either voluntarily or otherwise.

    I always wondered about the Gabriel fit at Haggen, since he had more of a packaged goods background than a retail focus. Whatever happened over the last 20 months, the subtext here seems to be that it all wasn't working the way that Comvest wanted it to, and so a change had to be made.

    I like the folks at Haggen, and hope this works. But I'm not sure I'm reassured by a three-person leadership structure.

    Published on: December 12, 2012

    The London Evening Standard reports that the British city of Westminster has imposed a ban on the sale of all rare and medium rare hamburgers by restaurants, saying that food safety issues made the regulation necessary.

    The story says that the Westminster City Council is prepared to order random inspections of local establishments; there is resistance to the rule in the restaurant community there because of fears that the rule could hurt the burger business and be expanded to include how other foods are cooked.

    "You’re opening a Pandora’s box," one chef told the paper, "because where do you finish? Steak tartare, runny eggs … the list is endless."

    Westminster is in Central London, near Parliament. It is believed by some that if the Westminster ban stands, it could be imposed in other parts of the country.
    KC's View:
    It has been decades since Britain saw a Mad Cow Disease outbreak, and they choose to impose this rule now?

    I have to admit that over the years, I've had enough exposure to food safety issues that I've moved from eating rare and medium rare burgers to having them medium. (Michael Sansolo insists that I'm even playing with fire by having them cooked medium, but I just can't go any farther than that.) But I'm just not sure that an outright ban is necessary ... it just seems a little draconian.

    Is this food safety run amok? Or just a modern reality, instituted because we know more than we used to about such things? Not sure, but I'm keeping an open mind ... even while order my burgers medium.

    Published on: December 12, 2012

    The Boston Globe reports that will begin collecting Massachusetts sales tax for online purchases made by customers there, starting next fall.

    "This agreement is a win for all sides, and I am pleased it promises to generate millions in long-term revenue for the Commonwealth," said Gov. Deval Patrick in announcing the agreement.

    The Globe writes that "the state government lost out on an estimated $387 million in 2011 from Massachusetts residents buying products tax-free from online retailers, according to the Massachusetts Main Street Fairness Coalition, an association of retailers, unions and local officials. The group has been pressuring the Patrick administration to compel Amazon to collect and remit state taxes."
    KC's View:

    Published on: December 12, 2012

    Reuters has a story quoting Walmart CEO Mike Duke as saying that 75 percent of US consumers are aware of what the "fiscal cliff" is ... as opposed to just 25 percent of the country that understood the concept one week before the presidential election. In addition, Duke said, 15 percent of the people who understood the fiscal cliff are letting the political turmoil affect their holiday shopping.

    "The latest poll could bode poorly for retailers like Wal-Mart," Reuters writes, "which rely on the year-end holiday shopping season for an outsized portion of their annual revenue."
    KC's View:

    Published on: December 12, 2012

    • In California, the Press-Enterprise reports that Adrian Young of San Jose has launched an online petition drive - on - hoping to persuade Tesco to keep its Fresh & Easy stores in the western US open.

    Here's exactly how it reads:

    "Fresh and easy has a niche market, if these stores were to go they would be missed. most of all as many as 5000 US jobs would be lost.

    please show your support by signing my pettition and to keep the Quality of fresh and easy in California,Arizona and Nevada

    "Your help and your vote is needed and could make all the difference. these signatures are being fowarded to tesco UK and tesco corporate to get them to reconsider their decision to close Fresh and Easy stores in the USA."

    As of this morning, just 397 people have signed Young's petition.
    KC's View:
    Not to be unfeeling here, but what Young does not seem to realize is that there's always been a kind of petition drive available to people to keep Fresh & Easy open. They didn't have to sign anything...they just had to shop at one.

    Published on: December 12, 2012 reports that Ahold-owned Peapod "has signed a long-term lease for 345,000 square feet of industrial space in Jersey City, moving forward on a $34.6 million Urban Transit Hub incentive it was awarded in May to open the facility in New Jersey and create 380 jobs for the state."
    KC's View:

    Published on: December 12, 2012

    Yesterday, MNB took note of a Wall Street Journal report that "Supervalu managed to secure what it says is the last shipment of Twinkies in the country before the bankrupt bakery Hostess shutters its oven doors. [Supervalu] is selling them at their Jewel-Osco stores in the Chicago area, hopeful, perhaps, that news of the 20,000 boxes of iconic Twinkies will generate traffic to its struggling grocery stores.  [Supervalu's] sales have been lagging, and it has been trying to execute a turnaround while also cutting costs, as it looks for a buyer."

    I commented:

    I don't mean to be hard-hearted and cynical here, but in some ways this could be a metaphor for many of Supervalu's problems.

    Faced with declining sales and profits and desperate to do something to turn the company around, management decides to hitch its competitive wagon to a product being made by a bankrupt company that won't be available for very long, so the best it can get in a short-term, almost momentary, boost. And the thing is, if that bankrupt company announces today or tomorrow - which it could - that it has found a buyer for the Twinkies brand, all the air goes out of even this short-term promotion.

    Listen, I don't blame Supervalu for trying. And a short-term boost is better than no boost at all.

    But it is hard for me to get excited about 20,000 boxes of Twinkies, especially when the substance and value of what they offer Supervalu is about as substantive and nutritious as a Twinkie itself.

    One MNB user was prompted to write:

    Kevin, I worked for SV for close to a decade before my position was eliminated earlier this year.  A friend of mine who lost his job a couple of years ago called me after he learned my position was to be eliminated.  In an effort to make me feel better, he told me a story about a client that told him “he’ll take the Supervalu Alumni over the current team any day”.  Therein lies the problem.

    The leaders at Supervalu approved poor planning, couldn’t stick to a plan anyway and the ones they did stick to were implemented poorly; which resulted in the company’s poor performance.  Many of those decision makers are still there.  They caused a revolving door for many other executive positions after some very competent people were let go or left the company on their own.  Duncan McNaughten, Pam Knous, Mike Jackson, just to name a few.  These were the people that built a successful Supervalu prior to Craig Herkert.  Yes, in hindsight, the Albertson’s acquisition was probably a bad decision, but good decisions since then could have put the company in a much more competitive position.  The board stood by and let it go on way too long.  They allowed their CEO to deflect blame by throwing others under the bus.  They allowed him to keep the “yes men”, who still appear to be more interested in preserving their positions than for the stockholders or associates.  It cost me my job and countless other good people theirs.  It could have been avoided. 

    For the last 3-4 years the company has been most interested in short term strategies that would give it a bump at the next year end report. I understand why companies do this, but SV did it to such an extreme that it cost them their future.  Most of these decisions were transactional in nature, so they really would not be known by anyone outside the company; however, those that were a part of the process know that when you add them all up, they did have a material impact.  During the Craig Herkert era they made countless bad decisions that were made public.  They may not have been short term in nature but bad nevertheless. Following are a few:

    • Ignoring their wholesale business that was the bread and butter of their success.  Ironically, some rumors indicate that after they are split up, this may be all that’s left.

    • “Project SHE”, an acronym for “Simplify Her Experience. For obvious reasons, It was insulting to both men and women alike.  It was also short lived.

    • Their focus on doubling the size of Save A Lot in five years.  They opened them in any vacant location they could find and ended up with more failed locations on the books. Plan scrapped.
    Other impacts on employee retention and morale were as follows:

    • They hired companies to micro manage employee health to a point where it became intrusive.

    • In the midst of employee layoffs, they created new positions to manage diversity. 

    • They created positions to implement green alternatives that were supposed to save money, but ended up costing the company much more. 
    I’m all for ethically good alternatives and creating such employee positions when a company is rolling along.  It’s part of giving back.    But they failed to recognize the seriousness of their financial condition – something that was plainly obvious.  They should have put all efforts into solving their declining sales problem and decreasing their expenses.  Instead, these new and unnecessary positions were created and many of the skilled workers were let go.  It’s no wonder that they are beyond recovery.  The board just put too much faith in a few used car salesmen.  Most employees could recognize the bad decisions, we were just told to keep quiet and don’t rock the boat. Perhaps if those leaders had listened to the associates closest to the problems, they could have implemented achievable and effective plans.  Instead, they tossed many of the good employees out the door and hired those that were agreeable. 
    The week after my employment ended, the friend previously mentioned called me again to welcome me to the alumni team.  It’s sad, but we have a growing bench and a lot of prospects.

    Another reader thought I was being unfair to Supervalu:

    When someone is lying on the ground being gored by a razor back hog and his buddies it is easy to make a snide comment or perhaps ignore the situation as Kitty Genovese was ignored. SV still has some good people out there trying their hardest to keep the company from dying. I doubt that the Twinkie decision came from the C suite. The promotion has a very good chance of working so I don’t understand why you feel the need to mock the real heroes at SV, the guys and gals who are still giving their all.

    We have read the Titanic analogies but remember the crew knew they were going down, the crew knew that they were going to die and yet they helped save lives. They were real heroes. Kevin, stop being a jerk and stop disparaging the real heroes at SV, the ones who have no golden parachute, the ones that know their chances of employment are slim and yet are working for their fellow associates and their company.

    Another MNB user wrote:

    Your comments are right on regarding Supervalu’s Twinkie promo. Unfortunately, such an effort is way too common in such situations. My career path has taken me to companies on the cusp of spiraling into bankruptcy, indeed running head first into that dark place. I don’t know the particulars with Supervalu, but from what I’ve seen over the years these situations all run a path blazed by many before them.

    The symptoms of such situations are usually expressed in dwindling customer counts and compounded by a parallel reduction in Sales Per Customer, or transaction. Although these two measures are only symptoms of much deeper problems, they are easy to identify, so what is the best way to increase sagging customer counts; at least to a company in trouble? Hot Ads, one time promo’s, etc. etc. etc. Anything to drive more feet into the store. The issue with such tactics is that they exacerbate the underlying reasons for those per cap drops and ever shrinking customer counts in the first place, not to mention how they complicate inventory and margin management.

    I worked for a company that did seasonal walk-throughs before the holidays……..we would choose a store, bring in folks from area stores, have them work in the “show store” to clean it up and merchandise the heck out of every department, or at least get it to what were supposed to be company standards. Every single time we did this, sales in these show stores increased substantially in every department…with no hot ads; no margin spend. This sales halo, driven by increased per cap numbers would last two to three weeks, or until the store got back to its usual level of condition and customer service. Then the per cap numbers would creep back to pre-show conditions. One would think there would be a lesson in there somewhere.

    Customer service basics; defined by great conditions, friendly employees working with a sense of direction, pride, and sense of urgency driven by a keen understanding of who actually butters their bread never goes out of style. Too bad that unlike Twinkies, they don’t have a half-life of 50 years!

    Finally, one MNB user wanted to weigh in on the Walmart bribery scandal:

    I was in Mexico this weekend, for a very short time.  The 3 hour wait in line to come to the USA was a learning experience. About 95% of the people in the mile long line are workers coming across the border to work a shift or two at a minimum wage job.  They might do this 5 times a week.  A well placed bribe with a police officer gets you moved up the the line.  Perhaps $10 US per quarter mile.  Few do this because $40 is a hefty price to pay for an $8 per hour worker.

    Imagine your daughter is picked up by police in Mexico but is totally innocent.  All it will take is a well placed bribe to get her out of jail.  Would you do it?  Is that any different than Walmart, Hilton, McDonalds, Costco, or Holiday Inn just trying to get building permit approved?  Do you think all the stores, hotels, and factories owned by American companies in Mexico all just popped up bribe free?

    Yes, I think your daughter example is vastly different from companies paying bribes. It is a ridiculous comparison.

    In the scenario you painted about my daughter, she's innocent and caught in a system that has nothing to do with justice ... and I'd do anything to protect my daughter.

    As for the corporations, there are allegations that a number of them have systematically engaged in the bribery of foreign officials as a way of growing their businesses and generating profit...and doing so all the while knowing that they are breaking US law.

    Now, let's be clear. It may be that the only way to get things done in certain cultures is with a well-placed bribe. That may be simple reality. But that doesn't change the fact that it is against the law, and if you get caught, you have to pay the price.

    (The Walmart situation has a whole different level of irony because of what some people might say is a holier-than-thou policy that prevents its people for accepting so much as a soft drink from a vendor for fear that this will lead to widespread bribery.)

    But a father trying to rescue an innocent daughter is a completely different situation from a company trying to illegally grease the wheels to make things happen faster so it can grow faster and make more money.
    KC's View: