retail news in context, analysis with attitude

Got the following email regarding the decision by Eataly Chicago to close down on Monday - after a busy week - to "maintain standards."

Wanted to provide a local scoop on this store, as I work about 1.5 blocks away from it – so, to say nothing about the fact they couldn’t actually get their opening date right in the first place (initial stories months ago suggested October, then it was going to be EITHER November 22 or 29th….not so; finally, they DID open on the 2nd), once they were officially open [to the public] they had decals on the store’s doors that stated hours of operation, which [supposedly] began at 8 am each morning…still not so.  My colleagues and I walked over each and every day last week trying to get coffee from the LaVazza café around 9 am only to find a computer printed sheet of paper taped onto the door saying Eataly would open at 10 am instead (Pay no attention to the official decals permanently stuck to the glass doors!).  So much for stealing the morning coffee business in River North!  Guess the Starbucks down the block can breathe easily for another couple weeks.

Therefore, my thoughts are probably clear – doesn’t seem to me like Eataly Chicago was ever all that buttoned up about their operation…but, in the end, it probably won’t matter much.  I’m sure they’ll make lots and lots of money, whether they open at 10 am or close on random weekdays.  Is that an eye-opener?  Not sure….


Another email about Eataly:

We should contrast Eataly with the current U.S. distribution model to better understand why this store can draw 120,000 people and current grocery retailers are struggling.  It is not the products Eataly sells or how they sell them, but rather how demand is being created for their products.

Kellogg’s creates demand for Frosted Flakes through extensive marketing.  Then, they sell the product to many distribution channels: dollar stores, convenience stores, small grocery chains, mega grocery chains, big box stores, and mass merchants.  None of these channels owns the final product experience, which occurs at breakfast, in a bowl, with milk added.  No wonder everyone competes on price and delivery.  The most fundamental experience of the product is owned by someone else.

Eataly’s is creating demand for ITS STORE, and by doing so, ultimately for its products.  Eataly’s approach is for you to trust them with your taste buds, not trust them to have Frosted Flakes in stock.  They find the best products, and you love them for it.   Yes, I understand the whole shopping experience as differentiator, but if they were just another store at which to purchase Frosted Flakes, would this work?  I don’t think so.  They want to own your taste buds.  (That same message is reinforced times 23 with their eateries.)

This approach should sound familiar because Trader Joe's does the same thing.  They  create demand with exclusive taste profiles and hook your taste buds.   Demand is created for the store and you trust they will populate the store with products you will like.  Would Trader Joe’s positioning improve if you could buy Frosted Flakes at their store?  It would dilute their brand.

The overall distribution model of the U.S. is dated.  If grocery retailers are going to differentiate themselves, they have to start differentiation with the very products they are selling and move away from being “resellers”.   I see the current strategies followed as low cost provider and best shopping experience.  But by definition, only one company can be the low cost provider.   And as for best shopping experience, how does one succeed with a corporate mission of:  “Be the best reselling agent among the 14 reselling agents who sell Frosted Flakes”?

Retailers have to start owning taste buds.


Can we get an "Amen"?




Responding to our story about a study saying that there is an appalling (my word) lack of women on boards of directors of Fortune 500 companies, one MNB user wrote:

I agree with you completely Kevin. What would be nice to know in order to properly understand the void, is how does this rate and percentage relate to the percentage of women Vs men in the work force? Make sense?

My understanding is that women make up more than 46 percent of the workforce. Compare that to less than 17 percent of Fortune 500 company board seats held by women, and 14.6 percent of Fortune 500 company executive officer positions held by women.

Which makes no sense.




Regarding Amazon, one MNB user wrote:

I, like you, am a huge fan of Amazon, am a Prime Member and use Amazon for a lot of purchases.  But I have say, I disagree with your comment about Amazon and price leadership this Christmas season.  I normally default to Amazon for nearly all of my online shopping because they make it so easy and they are generally the price leader or in the ballpark of other outlets.  Not so this year on many kid toys.  I think both Walmart and TRU have done a great job at dropping prices to lead the markets and also of bringing in exclusive items.   Honestly, I’ve been surprised at how much HIGHER Amazon’s prices are on some items vs. these two stores.  And both WM and TRU have offered either free shipping or free pick up at stores which I actually don’t mind because there are some items I need to purchase in store as well and it allows me to have at least ½ my shopping done before I get there.  Looking at how much higher Amazon’s prices are vs. the competition this season has led me to think I need to recheck the prices on nearly everything I am buying from them.  I love the convenience of 2 day shipping but won’t stick with it if I’m paying significantly more than other outlets.  Just wanted to share.

And from another reader:

I recently got into a ‘debate’ with Petco as to why their Instinct Raw Boost dog food had increased to $79 in store.  On their website it was $67, but if you sign up for auto replenishment, the price goes up to $71.  Really?    Amazon has been $59 all year, delivered in one day to my doorstep. Petco has a price match policy, but only for other brick and mortar stores. 

To make it worse, they told me the price difference was due to their suppliers dictating their retails.  That was their first email.  When I challenged them, they wrote back and said it was because the store offers many other services and knowledgeable associates to answer questions.   All in all, 3 emails, 3 excuses and never once an offer to match Amazon.

You really can’t make this stuff up…





Finally…we continue to get emails about the ongoing discussion of the Associated Press report that a Colorado administrative law judge has ordered a Denver-area baker to make a wedding cake for a gay couple's wedding, despite the fact that the baker said that making such a cake would force him to go against his Christian faith.

My position was that discrimination is discrimination. But I think it is safe to say that most of the emails until now have disagreed with me. Like this one:

How many times have you seen a sign “we reserve the right to not provide service to anyone” in a store’s window? If the storekeeper has put his/her capital into a business and puts it at risk, who are you or the judge to decide who they may serve or not serve? The reason (disagree with a gay wedding, don’t like the color of one’s socks, like another sports team, etc.) doesn’t matter as the storekeeper should have the power to choose. That being said, a savvy entrepreneur will not last very long choosing not to serve many of his potential customers. That’s called free enterprise and customers will choose to buy or not buy from a business based upon their expressed beliefs (e.g. Chick Fil A).

Because of your emotion in support of gay marriage/rights, I think that you got caught up in the moment.

Also, I think that you are better than throwing out random biblical citations trying to convey the Bible as irrelevant to today’s society. You may hold that opinion and it’s your blog, but realize that many of your readers do not share your “intolerance” of the Bible and disagree.


So could those reasons not to serve someone include, say, the color of one's skin? Because if you can refuse to serve someone because of the color of his or her socks, I'm guessing that you can also do so because of the color of one's skin. Except that you can't. And should not be able to.

And let's be clear … I'm not intolerant of the Bible, nor of anyone who believes in its essential teachings. Far from it.

But I do think that in many of the specifics, it is a reflection of a very different time, and that maybe to take some elements of it literally in 2013 is a mistake. But that's very different from being intolerant of it.

From another reader:

This morning in the reader comments on the gay-couple/wedding-cake controversy, you wrote "...I want the mainstream media to be secular. There clearly is room for a religious media, but the big guys … they should be secular."  Not 100% clear what you mean here.  When you say "secular", are you wanting them simply to be fair-minded & objective, to not "become part of the story themselves", and not to be openly (or tacitly) advocating for or against religion (or not religion)?  Or are you actually wanting the big guys to be clearly "secular", as in "anti-religion"?  Clarification, please?

I think they should be neither religious nor anti-religion.  Ideally, they shouldn't be conservative or liberal either, but I think that horse has left the barn….

People who are secular are not (necessarily) anti-religion.  Just as people who are religious are not (necessarily) anti-secular.


Not everyone disagrees with me, however…

MNB user Michael Twitty wrote:

As you no doubt expect, over the years I’ve agreed and disagreed with some of your positions.  Sometimes, however, I wanted to stand up and cheer you for taking a particular stance.  This is one of those times.  Thanks for your clear thinking, clarity of expression and the neutral tonality of your responses.  It made me feel proud of all the times I have recommended your work to others.

From another:

I simply cannot find, as hard as I try, a rational argument for society (read that government) to sanction discrimination and by doing so label any group of citizens as worthy of less protection under the law. How otherwise intelligent people can objectify and denigrate an entire “class” of people, rationalizing that prejudice on a personal belief system is beyond my understanding. Bigotry, hate, and intolerance are insidious things. I think it was Edmund Burke who said, "All that is necessary for evil to triumph is for good men to do nothing."

And another:

What if the same gay couple went into a haberdashery to buy gloves for their outdoor wedding? Would the owners  not to sell them gloves because it went against their religious preferences?  Sound ridiculous but where does it stop?  What do bigotry and a duck have in common?  If it walks like a duck, quacks like a duck and looks like a duck, it must be a duck.  Bigotry is bigotry no matter how you want to disguise it.

MNB reader Elizabeth Archerd chimed in:

The reactions to the Great Colorado Cake Suit are stunning.

The idea that a business only has to serve who it wishes to ignores the fact that every food business has a license from a government authority, has to obey health codes dictated by at least one unit of government and is inspected to assure compliance with the same. My co-op is licensed by the city and has to comply with city health regulations, state agriculture regulations and FDA regulations. We also have to comply with both state and federal employment laws and regulations, IRS regulations, OSHA regulations, workers compensation regulations, regulations regarding how health and retirement benefits are administered, co-op statutes, and non-discrimination statutes.

By what stretch of the imagination is the bakery a "private" business?


And, along the same lines, from another MNB user:

People can hate anybody they like — blacks. Jews, gays, and Muslims are among the currently popular choices among ignorami whose lives are so pathetic that they need someone to feel superior to.

But if you’re going to run a business— an enterprise which is created, supervised, controlled, and taxed by the government —  you must get licenses under laws which require you to serve everyone regardless of race, color, gender, religion, and so forth. You must also meet the requirements of the public health laws, safety codes, sanitation codes, building codes, food and drug laws, employment discrimination laws, requirements of the disabilities act — and comply with the terms of your license, which may include hours of operation, signage, noise levels, occupancy limits, parking regulations, and so forth.

In other words, you are not allowed to do what you damned well please and thereby become an irritant to society. You cannot stuff 100 people in a room that the fire chief limits to 50 people. You cannot blast loud music out your front door to attract attention. You cannot serve spoiled food to customers. You cannot chop the fingers off shoplifters, or refuse to serve a blind person because she has a guide dog.

If you hate a class of people, and refuse to serve them, you cannot have a license, and you cannot run a business. It’s that simple. Nobody cares what your private religious briefs may be, or whether you attend church every week, or whether you’re nice to your grandmother. And nobody cares whether, deep down in your heart, you hate and despise the people you are serving.

If you want the benefits of owning/operating a business —making money by serving the public in some fashion — then you must, in fact, serve the public.


And another:

I agree with your analogy comparing discrimination against African Americans and other racial minorities with today's discrimination against gays. After the Civil Rights Act was passed, private businesses claimed that serving blacks violated their religious beliefs and used Bible passages to validate their opposition. No different than today. 

People should watch the many sports documentaries, movies, books and interviews depicting refusals to serve black athletes around 50 or even fewer years ago … the movie about Ernie Davis, the movie about the UTEP-Kentucky NCAA 1966 championship game, the recent documentary about Alabama playing USC in 1970, Bob Gibson's and Henry Aaron's recollections. You listen to these and wonder how could people think and act like that back then (of course, too many still think that way now). 

Twenty or 30 or 40 years from now, most everyone will look back and feel the same way about today's discrimination against gays. Fortunately, today's younger generations will become the critical mass to de-legitimize this discrimination.

You're right, if you never take a stand, these type of appropriate changes take too long. And why should someone wait decades to not be discriminated against.


I think you're right. It won;t be long before an entire generation will look at kerfuffles like this and wonder what the debate was all about. In a lot of ways, I think that is what most scares a lot of people.

We did run yesterday what I thought was an exceptionally enlightened email from a gay person I know who has been in a loving and committed relationship for more than 20 years, and who had a "turn the other cheek" philosophy:

Here's the thing I don't understand - were we to have a "real" wedding, I don't think I would have any interest in going to a bakery that discriminates. Whether it's because of religion, sexuality, political views....Why even even give these narrow minded folks a platform to preach their hate? And by suing them they get their platform.

Of course, anytime I hear someone talk about having their Christian values compromised I think of my dad - who I'm fairly certain believes Jesus would bake the cake himself.

I'm a bit torn on my inability to angry about the bigots.


I responded:

To me, this email represents much of what I was thinking when I first saw the story. While I was irritated by the discrimination and what I saw as intolerance, my first thought was that it was a shame that the gay couple did not simply go to another bakery, and that the ACLU got involved … that perhaps they should've just turned the other cheek and moved on … that one should not let acts of bigotry interfere with a marriage, which is an act of love.

But I'm not always good at turning the other cheek. Sometimes I do want to punch the other guy in the nose.


Which prompted one MNB reader to write:

Interesting that in one paragraph you cite your irritation at intolerance and in the next you state that you're not always good at turning the other cheek and sometimes "want to punch the other guy in the nose." Not very tolerant is it? I don't consider tolerance a virtue. There's nothing virtuous about compromising one's values. I think too many use tolerance as a weapon to bludgeon others with who don't share their beliefs. Ask Dan Cathy. Rather than tolerance, I think its more about respect for others and understanding that we can disagree on issues without hating each other.

I'm not sure I buy that tolerance means compromising one's values.

As for my admitted intolerance … what can I say? I'm imperfect. A work in progress. (Didn't Nelson Mandela say that "a saint is a sinner who keeps trying"?)

But I also don't buy the argument that people who preach tolerance need to be tolerant of those who are intolerant. At some point, you have to say, "Enough."

Now … the world is not a perfect place, and arguments don;t always fit into neat packages. The line is not always stationary.

Yesterday, an MNB reader forwarded me a 2008 story from the about a New Jersey man named Heath Campbell who named his three children Adolf Hitler Campbell, JoyceLynn Aryan Nation Campbell, and Honszlynn Hinler Jeannie Campbell. (This last one apparently was a reference to Heinrich Himmler … though in addition to being an idiot, he didn't know how to spell.)

The story was relevant because this clown went to a ShopRite and wanted a cake with the inscription, "Happy Birthday, Adolf Hitler." The store declined, and it made headlines.

The good news is that this guy eventually lost custody of his children, who had been growing up in a home filled with swastikas and Nazi memorabilia.

The MNB reader asked the question: Where do you draw the line?

Good question.

Though again, I think it is unfair to compare a man who was responsible for the death of six million Jews, not to mention World War II, with the 4-5 percent of Americans who are members of the LGBT community, who are behaving in a legal manner, seen increasingly as part of the mainstream.

(There was an AP story earlier this week saying that "corporate support for gay and transgender rights is reaching workers in new corners of the country and economy six months after the U.S. Supreme Court struck down the federal Defense of Marriage Act, according to a new report card from the nation's largest LGBT advocacy group. The Human Rights Campaign found that more than two-thirds of Fortune 500 companies and 90 percent of all large employers it surveyed are offering health insurance and other spousal benefits to same-sex domestic partners of their employees … Wal-Mart Stores Inc., Hormel Foods LLC and Wendy's International Inc. are among the corporations extending the benefits for the first time next year.")

In the Colorado case, it was about baking a cake.

I love the suggestion that Jesus would have baked the cake himself.

It makes me think of my father, who loves the following song:

God is love.
And he who abides in love, abides in God.
And God in him.


BTW…this is a business story, because as our population becomes more diverse and public attitudes shift, companies may find themselves facing these kinds of issues and making these kinds of decisions.

People and companies have to behave in a way that they believe is consistent with their values, but they should always do so with the knowledge that those decisions can then become part of the public discourse.

I love discussions like these not because I like to court controversy and annoy people with whom I disagree on these kinds of issues, but because I love open discussions. They're interesting. They're fun. And I'd like to think that they help folks think about these issues in different ways.
KC's View: