retail news in context, analysis with attitude

MNB had a story the other day about how Target responded when it was revealed online that a dress sold by the company online in standard sizes was described as coming in "Dark Heather Grey," while in "plus sizes," the same color was described as "manatee grey."

Once the difference went viral, Target responded quickly. A spokesperson quickly released a statement pointing out that the color "manatee grey" was used for a number of products, not just women's dresses. And the spokesman said that because different buyers handled "standard sizes" and "plus sizes," the discrepancy was inadvertent. And Target said: "We apologize for this unintentional oversight & never intend to offend our guests. We've heard you, and we're working to fix it ASAP."

The fix has been made: On the webpage for the plus-sized version of the dress, which is manufactured exclusively for distribution through Target, the color is simply labeled 'gray'.

I commented:

Props to Target for paying attention and moving fast when things started going bad. Go into a shell, or indulge in denial, and this thing can go bad nine different ways. but deal with it fast, and you are able to manage it on your own terms.Also ... Target gets credit for giving credit to its shoppers for bringing attention to the problem .... the words "we've heard you, and we're working to fix it ASAP" have enormous power.

One MNB user responded:

It shows the difference in attitudes between companies.  Rather than defend its out-of-stock position, it would have been much better for Wal-Mart to acknowledge the problem and commit to improvement rather than defending its position.  How about:  “We recognize the inconvenience that out of stocks create for our customers, and are committed to having available what you need every time you shop.”  Of course, such a statement requires that they actually implement a plan to drastically improve the in-stock position.

True on all counts.

Yesterday, MNB took note of a story in The Nation about how Walmart has been accused in a federal lawsuit of manipulating inventory levels in a way that could have artificially inflated the company's profit margins and stock price, and how the accuser - who once managed logistics at the company's Bentonville headquarters, oversaw human resources management in a five-state region, and once received the the Sam M. Walton Hero Award - now also says he was fired because he was black.

One MNB reader wrote:

It can be summed up in one word. DEDUCTIONS. Stores taking deductions for shortages from deliveries that may not have been short. More common then most people think.

MNB user Steven Ritchey wrote:

People have been inflating inventory levels for decades.  Back in my days in retail grocery, it was one of the not so well kept secrets, you used every trick in the book to inflate your inventory on hand to make your gross dollars look better, at least on paper.  I know how we did it then, before everything was computerized, today it would be harder to do, but still doable.  So while I’m no Walmart apologist, don’t make more of this than there is.  I was in retail grocery in the mid 70’s and saw it then.  I doubt it’s changed all that much, maybe the methods have, but the intent is still there.

For the record, I don't think I am inflating the story. I took note of the lawsuit, reported the allegations, and said that while I have no idea of any illegality is provable, the accuracy of the charges certainly seems plausible.

Another reader chimed in:

The accusation of Walmart manipulating inventory levels in a way that could inflate the company's profit margins bring back memories of 45 years ago when I worked for a drugstore chain owned by a major supermarket.  During the annual inventory the manager and district manager hid undocketed invoices for merchandise that was being counted.  This inflated the profit of the store - I don't have any idea how significant the difference was.  Looking back I assume that the profit level determined the manager and district manager's bonus.  The problem is that this really is just "borrowing" profits from the next year.  You have to hide as many invoices the next year just to stay even.   The District Manager was eventually fired when the company found out he was putting the arm on vendors to pay for managers meetings.  It would not surprise me if they discovered  he was soliciting kickbacks as well.

Regarding JC Penney, one MNB user wrote:

You speculated out loud that we'll presumably never know if Johnson's transformational efforts at Penney would have worked if he'd had more time & less pressure to succeed.  True enough, but why not conduct a reader poll on the issue?  I'll cast the first vote: no.

As you're fond of saying, I think Ron just breathed in too much of his own exhaust.

From another reader:

Wow I get that a lot of folks did like Ron Johnson and he earned much of the dislike. But with that said, is the board kidding us by replacing him with the ex CEO??? Let’s be honest, this guy got Penny’s in the mess that Johnson took over, he now gets a cleaned up stores, the inventory he put there is gone (at Johnson expense), better quality products. So with that said, beside having little money to deal with and needing to bring in some type of a customer based, I’d say the board could have done much better. But the street is saying that no one wanted the job. Odd that the board did this, one must ask themselves, what must the suppliers be think this far down the road. They have helped clean up merchandise that wasn’t theirs, help fund some of the remodels and now have a guy who may or may not keep them….

If it were I, the first thing I do is talk to the associates, then the suppliers, then the bankers, the my team, then ask what stores need to be sold. Last, with all the Johnson did right or wrong he took a personal hit, not only on his reputation, but the stock they gave him to replace his Apple is worth about 60% less, the stock he bought and has to hold on to for 6 years is down about the same. To me the board now has put the monkey on their back and monkey might be nice… gorilla might be the better word.

Two emails made similar observations. First:

The Ron Johnson situation at J C Penney brings reminders of Craig Herkert being brought into Supervalu. Neither one did anything positive for the companies they “led”, they brought in many of their own cronies and were later fired. One big difference – Herkert walked away with millions.  Another big difference – J C Penney brought back a former CEO who wasn’t able to lead the company to success, while Supervalu brought in a new CEO with new ideas and a history of success. I wish both companies success.


As you digest this story, close your eyes; doesn’t this sound familiar?  Iconic brand retailer, brings in CEO from another iconic brand, things go downhill quickly.  Seems eerily familiar to Larry Johnson’s tenure at Albertsons and we know how that movie ended.
And this dissenting voice:

I was in JCP with my son recently.

We selected a suit jacket which was priced at the rack, on sale $75.00. When it rang up $90.00, I mentioned it to the clerk.

Immediately, she said OK and set about correcting it.

I fully expected I’d have to SHOW her the sign, she’d need to get a manager to approve some over-ride,…something.

Nope! None of that.

The lady handled professionally, without delay, argument, or issue of any kind.

For all the grief they’ve taken recently, I sincerely respect the fact management has given clerks such autonomy…hopefully THAT will not change!

And finally, responding to Kate McMahon's column yesterday about Roger Ebert, with whom she worked when she was entertainment editor of the NY Daily News and ran his syndicated movie reviews, we got this email from MNB user Bev Bennett:

I thoroughly enjoyed your column on Roger Ebert, a colleague at the Chicago Sun-Times during my time there as a reporter in the food department.

Everyone who knew Roger has a favorite aspect to share. For me it was his egalitarian embrace of everyone. Roger could stop the newsroom with his stories. But he not only talked to editors and fellow columnists, he also engaged copy clerks in conversation. He valued everyone. That he embraced new technology to keep up the dialogue is no surprise to me.

I also read David Carr's piece in the New York Times and like this line best:

"For writers and media companies looking for yet more ways to adjust to the digital tide, Mr. Ebert demonstrated that it is much easier to surf a wave enthusiastically than to crankily swim against it."

I have to tell you that as a writer and movie fan, I've been astounded by the outpouring of emotion and affection since Roger Ebert passed away, and especially the stories that point out the degree to which he was a pioneer in new media and technology, and how his indomitable spirit could be found in every enterprise he touched.

Gives one something to aim for.

BTW...if you missed Kate's piece yesterday, you can read it here.
KC's View: