retail news in context, analysis with attitude

MNB yesterday took note of a New York Times report on the coming legal battle over the rights of businesses to deny service to people with whom they disagree on religious grounds - specifically, people engaged in same-sex relationships and marriages - and when this becomes the kind of discrimination forbidden by the US Constitution.

I commented, in part:

I don't think that businesses ought to be able to deny service to gay people any more than they ought to be able to deny service to African-Americans, Muslims, or women.

Which led one MNB user to write:

If a chain I shopped at suddenly instituted a "no-White-man-over-65" policy, I would derive immense satisfaction out of giving my money to one of its competitors.

Which is a wonderful argument, albeit one that only would be made by a white man over 65, since white men over 65 rarely, if ever, have had to deal with this kind of discrimination in their lives.

I wonder how that argument would've gone over during the Civil Rights movement. ("Sure, that hotel won't let you book a room there, and that restaurant won't let you sit at the counter, and you can't sip from that water fountain, but you should derive immense satisfaction from sleeping in hotels, eating at restaurants and sipping from water fountains that actually want you.")

It also begs the question that discrimination is illegal.

What a crock.

We had a piece yesterday about how, as the Wall Street Journal reported, "the American Academy of Pediatrics (AAP) is officially saying that people should not use retail health clinics for children's primary medical care needs, that they work against the concept of having a personal physician with a sense of medical history, and 'don't provide the continuity of care that pediatricians do'."

I commented:

In a perfect world, every kid would have a dedicated and selfless pediatrician with unique knowledge of the child's medical history and a passionate service mindset. But we don't live in a perfect world - we didn't before Obamacare, and don't now.

I would simply argue that these two segments of the health care industry need to find a way to work together and get along. Because in the end, what's most important is making sure that kids get the care they need. Maybe it would make more sense to spend time and energy creating a more responsive system, rather than arguing that one is better than the other.

MNB reader Mike Franklin responded:

My comment…these two organizations need to continue competing, driving costs down…not begin a collusion driving costs up…similar to the comfortable working relationships between doctors, hospitals & insurance companies.

Kids are America’s assets…why do we find it so difficult to nurture them with decent healthcare, education and providing a slow, calm childhood!

Fair point.

I certainly didn't mean to equate collaboration and collusion.

Regarding Walmart's new "made in the USA" initiative, one MNB reader wrote:

Full disclosure: I’m a huge fan of the band Rush.

The new Walmart commercial caught my eye (and ear) yesterday when it aired during the Daytona 500.  It features one of my favorite songs, Working Man.  I couldn’t figure out what the spot was far until near the end when the graphic talked about Walmart’s pledge to buy $250MM in American made goods.  Then the irony hit me, their commercial features a song by a CANADIAN band.  Guessed they haven’t started that whole “buy American” thing just yet…..

From another reader:

If you watched the little bit of the Daytona 500 before the rain delay, it appeared Wal-mart had the most commercials, which were all geared toward made in the USA. I guess they know the NASCAR audience and what made in USA means to them. I agree with you that it may not be here to stay, and I think most of us remember they were the main company pushing for off shore production. The saga continues…

We had a piece yesterday about Mariano's, and I mentioned how people I know in Chicago love those stores.

One MNB user confirmed it:

Count me in on that double. Once as an industry observer and twice as a complete Mariano’s convert from the day they opened in my neighborhood. I haven’t set foot in the Jewel right across the street (which used to be “my store” for 15 years) ten times since they opened the door. The only other place that earns our food dollar these days is Costco.

But MNB reader Frederic Arnal had a different perspective:

I was initially enthralled with Mariano’s at first but have since cooled off.  Robert Mariano was known as a great innovator when he ran Dominick’s in Chicago.  They consistently came up with new formats  and approaches but often failed to sustain the execution.  Mariano’s today is a way for Mariano to get back into the Chicago market but I’m concerned that again he’s not fulfilling the promise.

The Mariano’s format today is essentially the Dominick’s Fresh Store concept from years ago.  An expanded bakery and prepared foods area was combined with a better-than-average produce department and a conventional center store.  That was enough then to create a difference.  Today with competitors like The Fresh Market, Sprouts and Whole Foods it’s not.  The produce department has fallen to just average.  Meat, seafood and deli need improvement.  Center store and frozen departments lack assortment.  Some of the stores are better than others, notably the city units.  The piano in the front of the store seems out of place.

Chicago has been one of the weakest supermarket environments in the country especially when compared to retailers at the level of Giant Eagle, Wegman’s, Hy-Vee, HEB, etc.  It’s dominated primarily by Jewel-Osco, a bland middle of the road retailer at best.  There is a tremendous opportunity here for Mariano’s.  I hope they seize it.

Regarding the situation at JC Penney, one MNB reader wrote:

It was nice to read the comments from your reader who, like me, felt the Ron Johnson approach to changing JC Penney was the right direction.  However, the number of commenters who attacked the Penney’s employee who submitted pictures of unkempt stores to the Huffington Post was a little disappointing.  Unfortunately, none of us knows the true motivation of this employee, or the exact context of the pictures.  Having worked on the retail front lines for quite a chunk of my life, for a variety of stores, I can recall many instances of being smacked down (figuratively, of course) for caring about my store/department.  Taking the initiative to make any improvements not rigidly spelled out by Corporate was NEVER acceptable.  I would be absolutely not surprised to learn that the shutterbug employee had been sent home early because of a mandate from somewhere above to control department (or store) labor costs, despite clear evidence that there was plenty of work to be done.

I think it is entirely fair to wonder about the employee's motives. But that doesn't mean the pictures misrepresented some of the problems facing the retailer … and denying that possibility is to defend the status quo … which strikes me as problematic if you work for JC Penney.

Going back a few days, we had a story about the problems facing Fairway, the NY-area food retailer that, I would argue, has been more focused on Wall Street than Main Street.

MNB user Don Stuart wrote:

"If you can make it in New York means you can make it anywhere."  This axiom doesn’t appear to ring true when it comes to grocery retailing.  Fairway’s IPO assumed the concept was scalable.  Whoops!  My daughter- a dedicated foodie and resident New Yorker-said, “no way this plays in Omaha, Dad”.  So, if you live in greater New York, enjoy the shopping experience; for all others, don’t invest.

The problem, of course, is that they're even having problems in the NY metro area.

One MNB user wrote:

We met with Fairway late last year and we have to we weren’t impressed. For a supposedly upscale brand for “foodies” as they themselves describe their position in the marketplace they had a decidedly down-market sensibility. Not only did we witness a Fairway employee in the office yelling at a colleague while we stood in the non-existent waiting area as if we were in a food stamps office waiting for our case worker, the person we met with who had a “VP” attached to his  name exhibited nothing of the kind of sensibilities we usually find when we meet with upscale food retailers around the country-which is our company’s focus.

The VP came from Pathmark - not exactly a “foodie” brand and spent a moment pining-it seemed to us-for the time when he was in charge of “magazines, cigarettes “ and other products as category manager. But his whole approach was one treating everything like a commodity.  His modus operandi revolved around how much he could beat up venders rather than truly evaluate what might be the best option for supporting the Fairway brand as upscale retailer. He didn’t appreciate anything about the differences in demographics between say Stamford, CT and Manhattan. It was one size fits all and how much slotting money is Fairway going to get rather than how will you help Fairway best serve its clientele.

It’s not surprising they’re  seeing a decline in same store sales when you consider how the customer is treated in the stores.  The original location is one thing, a product of a certain time … so why export the immigrant bazaar mentality to their other stores like Chelsea where there are … people who don’t want to be treated like cattle or they just got off the boat. We too have looking at their financials for a few years and we held off wanting to work with them because they don’t look right and after meeting with them we think we understand why.

Remembering Bill Davila, MNB reader Bill Renton wrote:

I worked at the Vons main office, first in El Monte, then in Arcadia, during Bill Davila's presidency (late '80s, early '90s), and an always interesting glimpse into Bill's humanity & effect on people would pop up every few months when Vons would publish a new edition of the company newsletter.  This news brief always contained short items honoring employees who had reached significant service milestones like 40 years, 45 years, etc.  The employees being recognized always had brief comments printed from being interviewed by someone from Corporate Communications, and invariably, there would be one or more quotes from long-time store employees along the following lines: "I was a Produce Clerk in store XYZ for 44 years, and the highlight of my career came one day in 1974 when Bill Davila toured our store; he walked through the produce department, came up to me and introduced himself.  Bill made me feel appreciated and proud to work for the Company."

Bill Davila was a truly great man, and knowing him on a face to face basis certainly was a highlight of my own career.

On another subject, MNB reader Larry Bourland wrote:

Your rebuttal as to whether a publicly traded company should reinvest income into higher wages is naive at best.  Management and boards are entrusted with delivering shareholder value which in most cases works directly against increasing expenses.  I would also argue that minimum wage should be tied to inflation given the basic economic formula that the only justification in increased wages is either a corresponding increase in productivity, or inflation.

Maybe I'm naive. But then, I'm just naive enough to think that shareholder value can actually be burnished by a philosophy that rewards front line employees, makes them feel both valued and engaged, and invests in the people who can make a difference.

And, BTW… many of the same executives who say it is their job to cut, cut, cut expenses at the front lines don't seem to worry about expenses when it comes to negotiating their own pay and benefits packages. You may think my argument is naive. But I think yours is cynical. Unfortunately, I think your POV seems to be winning.

MNB reader Denis Zegar wrote:

Platitudes about pulling oneself up from the boot straps is just that, platitudes with no basis in today's economic reality. Our economy is in a transitional stage moving from hands-on manufacturing to robotics, which requires new skill sets. Not everyone will be capable of making this transition. Does society abandon these individuals or does society enable them to make a contribution albeit limited by allowing them to retain some pride in what they are doing?

The constant bantering about "how I worked at a minimum wage job while going to college" is a non sequitur in today's world.  My college education at one of the best universities in the country cost all of $1000 for the 4 years.  Even in today's dollars my education 40 years ago was a pittance.  Getting an education, if you are poor, is daunting and unimaginable for most.  Raising the minimum wage will help many more than it will hurt. It gives people a fighting chance to move up the ladder of "working" poverty.  The alternative is the fostering of a "Downton Abbey" society.


Got the following email from MNB reader Skye Lininger, responding to my piece, “From Buggy Whips to E-Commerce.”

With every seismic innovation, there are winners and there are users. Buggy whip sales declined, but cars were a better solution. With cars came repair shops, gas stations, interstate highways, motels, and fast food. All this is celebrated in Steinbeck’s “Travel’s with Charlie.”

The Internet, software, and technological advances in chips and hardware form a triumvirate that is more powerful in its ability to create rapid innovation and disruptive change than anything that has preceded it. Every industry is in one phase or another in being impacted. And, this rate of change is only going to accelerate as the “wiring together” of everything—from devices to the “Internet of things” to the data about them and the people that use them—continues relentlessly. No industry, service, or way of doing things will be untouched. If you think your business is immune, you are just not paying attention.

What can you do? In our opinion, every business and service should have teams focused on understanding how disruptive technology could impact its business model. Unfortunately, we see many organizations leaving this to their IT departments, who are not equipped to think about disruption—their focus is day-to-day and operational; or under-funding and under-resourcing the teams or partners that could help lead them into the future.

In baseball terms, we are only in the early innings. The pace is accelerating. As Ken Kesey said, “You’re either on the bus or off the bus.”

Interesting comment from a reader about my review of Dave Barry's new book:

I’m a longtime fan of Dave Barry, so thank you pointing me to this new collection 🙂

But wow, does he have an appalling haircut; it only seems to be getting worse. I think this author’s name has enough recognition, and his picture is best restricted to the inside jacket.

Actually, I think when you are Dave Barry you can have any haircut you want. I was more surprised to find out he was 65 years old. Must have a portrait in his attic that is aging rapidly.

And, responding to one of my recent movie reviews, one reader wrote:

Loved your reference to The Train last week! I saw it recently with my daughter at a small repertory theater in Minneapolis. A great film that holds up well, even after 50 years. Hopefully The Monuments Men will draw attention to it and allow new audiences to find this under-appreciated classic.
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