retail news in context, analysis with attitude

I got a number of emails here about my Forbes blog/column regarding Sam Martin the CEO of A&P, and how he is trying to change the culture of the company.

One MNB user wrote:

Thought your article was very good.  Sam Martin has a lot of great ideas and I wish him well.  I think the best thing Sam can do is take that horse (A&P) outside and shoot it.

From another reader:

Great column.  Makes me want to root for Sam Martin and A&P.  I know culture change is incredibly tough to accomplish and doesn’t happen overnight, so I’ll not put too fine a point on the fact that my local A&P doesn’t seem to have bought in yet.  Mr. Martin mentioned how he visited 50 A&P stores before taking the job, and only one employee greeted him.  This has always been my biggest complaint about my local store.  It’s not that the employees are rude, it’s just that they are totally indifferent.  They speak only when spoken to, and then only a word or two.

I was impressed with your objectivity in your column.  I remember a lot of comments you have made over the years that made it clear you were no big fan of A&P.  One comment that has stuck with me you made after it was announced that A&P was acquiring Pathmark back in 2007; you “could imagine no worse news than coming to work in the morning and finding out that A&P is about to acquire your company”.  One of your best lines ever.

Yet, in spite of your frustration with A&P’s continuous announcements over the years that they were fundamentally changing their business model, your assessment of Mr. Martin was nothing but professional and objective.
 
As you made clear, Martin has one of the most difficult missions in all of retailing.  After reading your piece I can’t help but hope he succeeds.


I feel the same way. I'm not sure I'd put money on his chances, but I'm rooting for him.

As far as the stores, I agree with you. I've taken my father to a couple of different A&P stores over the past few weeks - in Greenwich and Riverside, Connecticut - and I've found the folks working there to be generally indifferent. Not mean, not rude ... but not going out of their way to be friendly, either.

That shows how tough Martin's job is.

From still another reader:

I do not know if A&P will survive and re-invent themselves, but Sam Martin is a winner!

Also my impression.  The thing is, sometimes winners play for the Yankees, and sometimes for the Mets.  This time around, he may be playing for the Mets.

MNB user Dean Balsamo was less impressed:

From all reports Sam Martin is a dedicated person and well respected. And your piece does a good job of bringing that out, it’s written well. But content wise it reads like the same kind of article that’s already been recycled a half dozen times ... The impression I get from reading these articles and having personal experience in working with A & P in trying to get an upgraded magazine program into their Food Emporium stores last year ... is that any turn around for A & P is doomed. Can you say “Fresh & Easy"?

While there might be some great people there who want to do something good there is too much legacy baggage to shift through and not enough time and money to ever turn this company around. The decision to sell the Food Emporium strikes me as a questionable  idea - given the locations of the stores in Manhattan and the demographics and population density they seem like the only stores worth saving in the company as the other brands they have  in the Tri-State area need so much work to upgrade their offerings, merchandising, store format design and relevance in general coupled with the fact some of the people we came in contact with seemed to have a hard time conceptualizing let alone actually initializing changes given  their layers of management and reluctance on the part of anyone  to actually sign off on anything-that it appears they just have too much to overcome.

This is the real story about A & P, in my opinion.  Mention this latest turn around and other grocers are skeptical about the prospects. The powers that be have holed up in Montvale for too long instead of getting out  and actually visiting their own stores with their eyes wide open-and those of their competitors –to be in a position to know what they have to do and actually do it.  It  seems their whole modus operandi at this point is survival –not exactly a position of strength to work from and in the end a  long, drawn out descent into irrelevance is what appears to be on the horizon.
 

And from another reader:

Great article. Sam Martin did his homework prior to taking the job. However, maybe you should have written more about what A&P once was, how they were terribly mismanaged and what their likely outcome will be…dead. I hope Sam pulls off a surprise win.

The Forbes pieces are designed to be short columns for a broader audience than reads MNB, and to be more focused in terms of subject. A treatise on A&P history simply wasn't what I wanted to do ... though I understand why some might have found it interesting.

I'm including links to the columns on MNB simply because I hope that some folks will find them interesting.





We had a story the other day about hotels using social media to gather intelligence about consumer attitudes. One MNB user followed up on it with this email:

I spend a lot of time at on the road annually and my hotel needs are simple. Price is extremely important.  Tasty contemporary decor, wonderful gardening, impressive art and large screen LED TV's are enjoyable, but not worth paying exorbitant rack rates.   I always negotiate reduced rates to keep clients' expenses low.

A room must be clean, quiet, have a comfortable bed, and have shower and bathroom fixtures that work well.  I require a well-planned workspace; with a reasonably sized desk, a comfortable chair, convenient power outlets and a strong WiFi connection.

I don't care about hotel breakfasts; I eat meals at places that specialize in food. Having hot coffee available 24/7 in the lobby is a huge plus.  Most hotel employees are friendly, but it's wonderful when they remember special requests, like leaving extra (regular) coffee packets in the room.  I start early and work at night editing notes, photos and completing data entry, so having good coffee is important.

A hotel must have a safe and convenient location, near my work, with easy accessibility to airports and restaurants.  The nicest hotel amenities cannot make up for feeling on edge in a sketchy neighborhood.  Early in my career, I stayed (first night only) at a hotel with razor wire topping a wall around the parking lot.  Never again… I know where to avoid in metro areas by now.

I fill out hotel questionnaires; especially if a hotel or an employee has done an outstanding job, or to explain why I left early, if a hotel hasn't done well.  I'm sometimes curious about who does their market research, due to some of the inane questions asked.  if a question is particularly amusing, I'll attempt to provide an equally amusing reply in the comments section.  Providing for my needs should not be rocket science.  Some chains don't get that and they won't get repeat business.


I said that I thought it was important to be transparent about complaints, because that allows you to be transparent about addressing them. Which led one MNB user to write:

I think your assessment is dead on.  I recently was reading reviews from a site that only contained glowing reviews and it was beyond obvious that they were culling.  However, the challenge for all product and service providers is that you have to be extremely disgruntled or overwhelmingly surprised to choose to take the time to review.  Ultimately, these two groups may comprise a very small percentage of people who are plain and simply satisfied.
 
If I were providing a recommendation to the hotel, it would be to provide comments (just like the “Your Views” concept of a popular site….) either offering corrective actions taken or some tongue in cheek comments for the complaints that are beyond correctable!





On another subject, I got the following email from MNB user Frieda Rapoport Caplan:

Around mid-February, you ran comments entitled: "For product launches, Kraft needed greater investment, more focus".  I printed this off because of the experiences Frieda's Inc. has had over the years in introducing  new and exotic produce items to the nations' retailers and chefs..  Sometime, we have found that it is more a factor of timing than the investment and promotion of the idea itself.

To illustrate ... it took  fully 18 years for our introduction of the kiwifruit to take off. Spaghetti squash took 11 years. The habanero chile was literally an overnight success (thanks to food editors across the nation).

But what reminded me of your February article was the fact that the first produce item Frieda's introduced 50 years ago ... the sunchoke (originally known as the Jerusalem artichoke) ... just this year made the list of the 10 hottest items that chefs are featuring in menus around the country.

Go figure!


The thing is, with any product introduction you need a combination of science and art and no small amount of luck to be successful .. and you have to be willing to invest and be patient.

I'm reminded of what the great pitcher Lefty Gomez once said: "I'd rather be lucky than good."

BTW ... I have to tell you that it is a thrill to find out that people like Frieda Caplan, who started Frieda's Specialty Produce more than 50 years ago, is an MNB reader. I just think that it is the coolest thing...




Last week, we had a story about nine-year-old Hannah Robertson, who lectured McDonald's CEO Don Thompson about the company's nutritional profile at the company's annual shareholder's meeting.

I commented:

Longtime MNB readers know that I am no fan of McDonald's. But I'm also not a fan of parents using nine year old children as a way of spotlighting their own political views or goals. Sure, McDonald's tries to use every method at its disposal to sell fast food. So as a parent, use every tool at your disposal to teach your own kid to make good choices. Let Hannah be a kid. Not a poster child for your own issues.

But maybe that's just me.


One MNB user disagreed:

I could not disagree more.  I think nutrition advocacy SHOULD use Hannah, in fact use an army of Hannah’s, use Spongebob, Ironman, Derek Jeter, the First Lady, etc. to bring attention to the issues of childhood obesity and poor nutrition that plague this country.  Fast feeders and nutrition-less food manufacturers have used children in advertising, have use pop icons, have used clowns, etc. to peddle their wares, I think you fight fire with fire.  You said a parent should “use every tool at your disposal to teach your own kid to make good choices”, well I think parents need a few more tool in their toolbox.  But maybe that’s just me.

But another reader wrote:

Spot on…let children have their childhood…give them time to play, evolve socially…at their pace…too many parents think they have the most brilliant child ever and force the child into the parent’s spotlight and by doing so do not let the child seek his or her own spotlight on their terms when they are ready.

MNB user Andy Casey chimed in:

Kevin, I could not agree more with you.  Parents need to grow up and be parents; kids are not born knowing what foods are good for you and which not and parenting is about teaching kids to make good decisions.  If parents can’t handle a nine year olds demand to eat at McDonalds, God help you (and us) when they get to be teenagers.




On the subject of Monsanto, GMO food, and the "rogue" field of genetically altered wheat found to be growing in Oregon, one MNB user wrote:

While the health environmental concerns are also important, the real issue is this monster corporation completely controlling our food supply by creating a product that has to be purchased every year – only from them.  Over the entire course of human history, agriculture has progressed by the saving of seeds from year to year. This has allowed natural improvement of the seed over time for each place and climate and disease pressure that the plant may face. It has also ensured that people had some control over the production of their own sustenance. We simply cannot sell our soul to Monsanto and let them control all the food of the future…

From another reader:

I happened across a documentary a few weeks ago called “David versus Monsanto”, which I must admit was my first exposure to who Monsanto is. It was appalling to see their ruthless tactics in enforcing patents on their seeds and controlling farmers’ activities.  It was a real eye-opener for me.  The GMO wheat discovery here in Oregon is big news because wheat exports are a sizable part of the agriculture economy, and about 75% of the wheat crops across the region are exported to GMO-wary Asia and Europe.  So far Monsanto is saying that GMO testing is sophisticated and can produce false-positives, and won’t comment until they receive samples for their own testing.  And we’re supposed to trust their testing results more?  Unlikely.

And another:

Note the prohibited GMO wheat was uncovered by a wheat farmer with the integrity to notify USDA through an Oregon State University researcher.  It probably would have gone undetected otherwise. Kudos to him/her.
 
Ironic that it was only last weekend when several Oregon cities were sites of anti GMO/Monsanto demonstrations.


And another:

What some may have over looked is the GMO seeds have been so cross pollinated with “regular” seeds, either by accident or by plan that it’s not only hard to tell, but has been done for so long that trying to stop it now makes little sense as the world food supply is so low that doing this only makes matters worse. This discussion should have been years ago, but like oil and other issues big money won and now we ALL get to deal with this…




On the subject of a Chinese company's takeover of Smithfield Foods, one MNB user wrote:

Right on, right on, right on. I think you hit the nail on the head in wondering how long current business practices will stay intact at Smithfield once the acquisition is in place. I’ve worked for three different companies that were acquired and in the beginning the talk is all the same from the acquisition company or investment group……….We’ll keep current business practices; you know, it’s because of the people and the business practices that we bought the company in the first place! That’s what is said publicly anyway. Especially when the acquired company is viable and successful.

The reality with most acquisitions is about broadening distribution through entering new markets and identifying synergies that work to  enrich profitable revenue and return on investment. Synergies that usually start with questions like why do we need two marketing departments, what about buying; can’t we increase our buying power through pooling our processes? Do we really need two accounting departments? And so it goes.

Smithfield is a formidable brand in the meat business and is the go-to brand name for many consumers….especially in some areas of the Southeast where meat department sale can easily reach 30% of a stores total sales and space distribution dedicated to pork outweighs beef. One has to wonder how those core consumers will react to this transaction, of if they will even hear about it. If I were a competitor of Smithfield, attaching China to Smithfield would be a high priority.


Another MNB user wrote:

You have to wonder if the North America leadership will be arrested and executed for failure like they have down in the past in main land China.




I asked last week which is more or less trustworthy when it comes to the food system - Monsanto or the Chinese?

MNB user Elizabeth Archerd answered:

The Chinese bought Smithfield in order to get a quality product that meets US standards. They want to export the pork back to China due to serious quality problems in China.

So in this case, I'd say trust the Chinese food company MORE than Monsanto, for sure.





Had a piece the other day about tax issues, which prompted MNB user Gail Nickel-Kailing to write:

Your comment: "...maybe I need to move MNB global headquarters out of Connecticut and to a no-state-income-tax state like Washington" might not be such a good idea. If you do  a little more research you'll find that we've traded an income tax for multiple taxes, fees and licenses (for both businesses and property) that by far offset income taxes. That's why Bill Gates, Sr., has been so vocal on rationalizing Washington's tax system and instituting a progressive income tax.

I'd by far rather pay a reasonable income tax than the various surcharges on my car tabs that are/were supposed to pay for things like research on a monorail system that never got built or to bolster a failing public transit system. Or to deal with the mess of business taxes that include a "head tax" for employees and a city business tax called the Square Footage Business Tax that I have never actually figured out... Or state, county, and city B&O (business and operations) taxes... Or as a consumer pay 9%+ sales tax...

Unfortunately our taxes and fees are generally levied for specific uses and we don't have much of a "general fund" that states with income taxes have. That makes it difficult to move funds from one use to another...


Fair enough. But on the upside, you get to live in the best part of the country...




And, we had a piece about how "Margaritaville" is the most lucrative song ever written, in part because in one word it manages to communicate volumes about brand equity.

Which prompted MNB user Scott Johnson to write:

If for no other reason than the mention of Margaritaville makes me smile.  How many brands can do that???

And MNB user Jim DeLuca wrote:

Waay back in the late '60s or early '70s (who can remember...)   I went to see Jimmy at a small club in Atlanta.  I was concerned that he would not play because there could not have been more than 20 people in the audience.   Jimmy came out and played a full set with gusto; what a pro.  All the way back then.

While I am not a fan of the Margaritaville lifestyle, I can easily understand how Mr Buffett has created such a successful enterprise.


Agreed. For the record, though, I am an enormous fan of the Margaritaville lifestyle.
KC's View: