retail news in context, analysis with attitude

Responding to the piece we linked to in The New Yorker about Amazon's economic impact, one MNB user wrote:

There once was a time when capitalist went gaga over companies that actually made money. Amazon has a P/E of 612. That means they make virtually no money. Google's P/E is 31 by way of contrast. If you think Amazon is creating a good economic life for America you are dreaming.

I can give you all kinds of quotes like this: "Oren Teicher, the CEO of the American Booksellers Association, wrote that for every $10 million that shifts from bricks-and-mortar stores to Amazon, 33 retail jobs are lost. “That would mean, for 2012 alone, Amazon cost the U.S. 42,000 jobs just last year."

It is what it is but I'd prefer that Amazon made money while destroying jobs as Walmart and Google did.

There's a reason your boy Bezos spends millions lobbying in Washington. He needs the juice the Fed is supplying every month to the economy. You may not pay the bill when it comes do, but I assure you your children will.

So we can put you in the "undecided" column?

One MNB reader had some words of advice for Home Depot as it invests in e-commerce initiatives:

If they want to make any money at it, I have a suggestion.  If you’re going to offer free shipping, don’t send individual items ordered separately.  I appreciated the free shipping, but was amazed that a tube of caulk came in one box (and a big box at that), the cord to heat your roof in another box, the plug to regulate the cord for your roof in yet another box, the brine sprayer (which did not work and ended up going back, but caused me to run to the store – grrrr, I was trying to avoid the store), and finally the bottles of brine.  I can see the liquids being shipped separately, but the rest could’ve all come together.  Maybe they came from different distribution centers, but it just seemed disorganized and expensive (for them) or maybe the markup is so high they can absorb that shipping cost?  That could be, since I found the same TV trays I ordered from Wal-Mart on Home Depot’s website for $30 more, LOL…

Regarding what I characterized as an epic blunder by the AOL CEO, one MNB reader wrote:

Interesting to see a CEO who came from Google, running a company founded on the internet, seemingly out of touch with the impact of social media.  It just goes to show why senior leaders should consider carefully scripted messages for their audiences.  It’s unfortunate since my experience is town hall forums tend to be informal and conversational.  Nothing is ever that simple.

And from another:

Interesting article on Tim Armstrong and his misspeak about “two distressed babies.”

My own company had a town hall meeting with employees about a year ago and a very similar situation occurred.

It became very obvious to employees (a company of less than 1,000) that a few people in our organization had incurred dramatic health issues and they showed in a bar chart, how that impacted the company’s profit numbers.  I think that just saying health care costs went up would have been sufficient but they called out a handful of chronic cases which made it easy to figure out who they were talking about.

What I find more disturbing is the hearts of people who don’t see a problem with calling it out.   People shouldn’t have to think about what they say when they are talking about the life and death of a child but in this day and age, that is not the case.  Greed in corporate America has gone beyond anything I’ve experienced in my 30 year career and I don’t see it getting any better.
It will be the downfall of a lot of companies long term.

Sometimes blunders like this are helpful because it wakes employees up to what they are dealing with and leaves no question about what some top executives really do care about. 

I say the employees at AOL are better off knowing than not knowing.  Just my thoughts…

It is like the old Michael Kinsley line, that when a politician commits a gaffe, it means he actually told the truth.

MNB reader Mike Franklin wrote:

Maybe, just maybe, Tim Armstrong should have said,  last year there were two distressed babies" that had cost more than a million dollars to care for, but because of our insurance plan,  the babies are doing well, and the parents have become a stronger contributing piece of our workforce. Oh, and by the way, Wall Street may begin to beat us up this year because we only made $2.2 billion, but as a socially conscience company we will maintain our current benefits…but I’m asking each and every one of you to help move this company forward with your hard work and creative contributions because I need you more than you need me!


On another subject, one MNB reader wrote:

I don't know if you recognized the irony that on the same day you quipped about McDonald's quality "It's not a cheap shot if it's true" you featured the story on the problem with Starbucks - that its own success has created a furious backlash. If you look at your original text, there is no reason one could not effectively substitute McDonald's for Starbucks at every turn. The McDonald's brothers were magnificent innovators. Following in the footsteps of other great innovators like Henry Ford, they created a reliable, affordable, great-tasting product within a wonderfully efficient experience. Ray Croc had the bold vision to bring this experience to the masses-in the process creating one of the world's most iconic brands. When McDonald's opened in Moscow the lines were more than 2 miles long(!).

Moreover, like Starbucks, McDonalds has reinvented itself several times. And to this day it enjoys great customer loyalty. True, its sales have been sluggish as of late, but that's nothing new, and that same scenario will almost inevitably plague Starbucks from time to time in the future.

And similarly, McDonald's success has inspired plenty of backlash. Many point to its global ubiquity, it's less-than-stellar quality and it's alleged "unhealthy" food. Plenty of people argue that Starbucks has dumbed down a true high-quality coffee experience and it too has been the subject of much scorn in the nutrition community for its ultra-high calorie concoctions.

Looking at grocery, what Starbucks has done for coffee is almost precisely what Whole Foods has done for food retail. Its team members are food experts, it has transformed traditional boring food retail into a theatrical experience. And yet, I never see you mock Safeway, Kroger and the like?

Just to be clear, like you I don't prefer McDonald's and I routinely visit Starbucks. Not because I love their brand, but because it's quick and it gets the job done.

P.S. I hope you take the following comment as constructive and not mean-spirited. When people write/speak about their own preferences in the language of a marketer or brander, they end up sounding like a giant douchebag. Marketers don't love their foods, products or experiences -- people do. I used to work with a guy who was a marketing professor and whenever we went someplace to eat he would often talk about how much he loved the brand experience "Gosh, Potbelly really knows how to inspire my customer's a great brand proposition that really resonates with my values.."

I would always have to intercede with "Hey (expletive deleted), shut up and eat your damned sandwich. Nobody's here to listen to your lecture or insights…"

First of all, I take very little personally. And I've been called worse than a "giant douchebag." By relatives. (Though that may be the first time I've been called that on MNB…)

I would only argue that a) this is all about taste, and b) it is my impression that people do come to MNB in part for my insights.

I suppose some would equate McDonald's and Starbucks. I wouldn't. I think one specializes in industrialized, mediocre food, and the other specializes in democratizing higher-denominator coffee and food. I cheerfully concede that this is a matter of taste; if you don't like Starbucks (see the next email), you won't agree with me on this.

But that's okay. These differences of opinion lead to interesting discussions and, quite frankly, keep me in business.

One other thing. I think the folks at Safeway and Kroger would disagree with the assertion that I've never mocked them. Just as I've taken shots at Whole Foods and, yes, even Starbucks, from time to time.

I believe in equal opportunity mockery.

From another reader:

I don't like Starbucks -- there, I said it.  And I don't care who knows it (although I'll ask to remain anonymous for other reasons...)

I don't like the taste of their coffee -- it tastes acrid and burned to me.  The explanation I was given by the owner of a small independent makes infinite sense to me -- that because they take so many beans, they sometimes end up buying inferior beans just to feed the massive demand that they've created, and so end up over-roasting everything to achieve that consistency across batches that is so crucial to quality control.  I'll give them kudos for finding ways to deliver a consistent product across 20,000+ outlets -- but it still tastes burned to me.

I find I no longer have a tolerance for over-sweetened anything -- so all the frappucinos and double-sugar lattes have zero appeal for me.  Better for my waistline, and my health in general.  And I'm one of the minority who can taste artificial sweeteners of any kind - pink stuff, blue stuff, yellow stuff, it all tastes funky to me.  I'm avoiding more and more artificial ingredients - I'm not a purist by a long shot, but I'm finding that the cleaner my food, the better I feel.

So I don't shop at Starbucks -- I bought a large coffee (regular coffee) last week in Vegas, because I was working a show and it was the only chance to get a cup of coffee.  It tasted burned and acrid, but I persevered for the sake of my team, as they hadn't done anything to deserve a boss who'd had no caffeine.

For me, it has nothing to do with envy -- it has everything to do with the fact that I just don't like the product.

All perfectly legitimate points.

And from another:

Appreciate you bringing the USA Today article about Starbucks to our attention – great and I’d argue thought-provoking read.  But I have to say, the prospect that there are millions of Americans (and untold others) that are jealous of and direct hate toward Starbucks for its success is immensely troubling and I gather systemic in the minds of a growing number.  I don’t generally get on the soap box, but talk about troubling – if it ever becomes “in vogue” to bash the entrepreneurial, meteoric successes of our business world, that seems to be a huge de-motivator for progress.  Maybe we’re already there?  I hope not. 
I’m no fan boy, but for those that bash and look with green-eyed-glare at Howard Schultz, consider this – we could do a lot worse.  The man has some quirks and whatnot but in general is an icon of American progress in business.  He hasn’t gone all Hank Rearden on the country, and there’s something to be said for that.

You get extra credit for the Ayn Rand reference. We appreciate cultural allusions here on MNB.

A few more emails about Bob Hermanns…

From MNB reader Terry Exner:

I want to thank you for your recent column.  I worked for Bob at Lucky North, and he WAS a true gentleman.  This was so important during a time when women were just beginning to make inroads into the world of supermarket executives.  Bob was a mentor and a joy to work with.  He will be missed.

From another reader:

Kevin, I worked for Mr. Hermanns briefly at Lucky stores NFD in the late 80s. He was a great mentor, giving and kind. and gone too soon. He will be missed.

Ands from MNB reader Jim Lukens:

Bob and I were good friends and work associates since the day he hired me in Minneapolis 30 years ago this week.

I've been in this business for 43 years and with the constant change in the industry it's easy to lose touch with friends and co-workers but Bob always made it a point to connect with me several times a year. Always asking questions and a superb listener.

In our work lives Bob and I had some difficult challenges to face but Bob's cool, calm and collected demeanor was an inspiration.  He was a brilliant guy and a good friend.

Finally, on a less sobering subject, I took note yesterday of the planned retirement of Derek Jeter of the New York Yankees at the end of the 2014 season, and I commented:

I'm not a Yankee fan, but I have nothing but respect for Jeter, who, it seems to me, played the game the way it ought to be played and showed nothing but respect for his fellow players, the fans, and the Yankees. That counts for a lot.

That said … I don't want to be a grump here, but I'm getting tired of these retirement tours that star ballplayers seem to take these days. That's what Mariano Rivera did last year, and I found it tiresome. I don't think that opposing teams should ever applaud an opposing team member … instead, they should show him enough respect to treat him like the enemy until his final game has been played.

MNB user Peter Stamos wrote:

Your comments on Derek Jeter…spoken like a true Red Sox Fan.

Except that I'm not.

MNB reader Gary Harris wrote:

I don't want to be a grump here, …but, since there aren’t any Mets who would receive the same sort of reaction, I'm getting tired of these retirement tours…

From another reader:

I am like you  - not a Yankee fan, but it’s hard NOT to root for a guy like Jeter. He is consistent, he is steady, he plays through injuries (when possible), he rarely, if ever, has a harsh word for other players, teammates or opponents, he doesn’t pout, he doesn’t complain about umpiring or other factors affecting the games and he doesn’t appear to be an “all about me” type of person. He also has a great track record of winning (having success in his chosen profession). He just does it by being a great example. He does it with respect for the game, others and with class…

Man if that’s not a leadership model, I don’t know what is…hats off to Derek Jeter - first ballot Hall of Famer (IMHO).

MNB reader Gary Zook wrote:

I agree with you to some degree about the retirement tours.  In the case of Jeter he is a good player and played the game the right way and I hope when the Yankees come to Chicago in May to play the White Sox that I don’t’ have to sit through a presentation for Jeter on his last game played in US Cellular Field.  It will be bad enough having to deal with all the Yankee fans that will be there Memorial Day weekend.  HAHA  On the other hand what Mariano Rivera did on his tour behind the scenes was very cool.  For him to take the time at each city to sit down with office people, concession stand workers and ground crews for them to meet him and ask him questions was truly class act.  This will be Paul Konerko’s last season with the White Sox and in baseball and I know he’s not going to want to do a retirement tour because that’s just not him.

Can’t wait for baseball to start.

Listen, I want to be clear about this.

I understand why people might think that this is just anti-Yankee bias speaking, and that I will change my tune in 2025 when David Wright retires from the Mets having led the team to three World Championships, won two MVP awards, and hit .330 for his entire career while finding as cure for world hunger during the off-season. (Man, I have to stop drinking in the morning….)

But seriously…I actually think that I'd feel exactly the same way about any player on any team. (I feel that way about football players who celebrate in ornate fashion after scoring touchdowns. Shut up and play the game. Scoring and winning ought to be enough.)

Remember the old John Updike line about Ted Williams, who hit a home run in his last career at-bat in Fenway Park and would not even take a curtain call, running into the dugout and then to the clubhouse, because "Gods don't answer letters."
KC's View: