retail news in context, analysis with attitude

Published on: June 2, 2014

by Kevin Coupe

Carmine Gallo, the author and communications coach, has a piece on Forbes.com in which he suggests that the late author/poet/historian/civil rights activist Maya Angelou had a great quote that seems tailor-made for businesses seeking a differential advantage. I agree, and thought ti was worth passing along in this space…

People will forget what you said, people will forget what you did, but people will never forget how you made them feel.

Wow.

(You can read his whole analysis here.

I think this is true not just of customers who patronize your store or buy your products. I also think it is true of the people who work for you, who serve as your face to the consuming public. In the end, maybe that's a supply chain that more business leaders ought to pay attention to … a supply chain of good feelings that say to the employee that this is a good and supportive place to work, and say to the customer, you should feel both good and smart about shopping here.

Not to say that price and convenience and selection are not important. They are. But maybe in some ways they are slightly less important - and therefore less of a differentiator - in an environment that stresses the feeling one gets when walks inside a store or chooses a specific product. Maybe that how you make your customers and employees feel can be an enormous differential advantage…

People will forget what you said, people will forget what you did, but people will never forget how you made them feel.

Maybe how you make your customers and employees feel can be the ultimate Eye-Opener.

Published on: June 2, 2014

Walmart announced that it has promoted Shelley Broader, president/CEO of Walmart Canada, to the role of executive vice president/president/CEO of Walmart EMEA, which puts her in charge of leading the company's operations and retail development in Europe, the Middle East, Sub-Saharan Africa and Canada.

Broader will report directly to David Cheesewright, president and CEO, Walmart International. The company said that it will name a successor to Broader in Canada at a later date.

"Shelley has been a strong leader since joining Walmart Canada and is the ideal person to leverage the tremendous potential the EMEA region holds for our company," Cheesewright said in a prepared statement. "Shelley's leadership of our business in Canada during a time of increased competition underscores her knowledge of the retail environment which will serve her well in her new role."

Bloomberg Businessweek reports that "the move continues a reshuffling in Wal-Mart’s overseas operations that began last month. Greg Foran, the CEO of Wal-Mart’s Chinese unit since 2012, is taking over as president and CEO of Asia from Scott Price. Price is moving to the company’s headquarters in Bentonville, Arkansas, to become an executive vice president. Those changes also take effect June 1 … In making the management changes, CEO Doug McMillon is putting his stamp on the company after almost four months at the helm. He is working to reinvigorate Wal-Mart’s sales after a slowdown both at home and abroad."

Broader is a former executive at Delhaize - both at Hannaford and at Sweetbay (where she ran the company) - and Michaels, the arts and crafts chain.

Published on: June 2, 2014

The always excellent David Carr has a column in the New York Times this morning in which he writes about the fact that the book business, left for dead by some who thought that it would be totally supplanted by other content options, seems to be thriving these days - to the extent that Amazon's battle with the publishing company Hachette over prices has been making headlines for weeks as the e-commerce giant has blocked the sale on its site of Hachette-published books.

"As the uproar grows," Carr writes, "Amazon is learning that while it may own the publishing industry with a 40 percent market share of all new books sold, according to Publishers Weekly, it doesn’t own the debate. By blocking inventory, Amazon has become the less-than-everything store. Books may be a small fraction of what it sells, but books are precious, troves of speech, not just products for commerce. They were also the linchpin of the company’s early march to retail dominance. The symbolism is profound."

Great column … and you can read it here.

BTW … the Times also has an interview with Malcolm Gladwell, the author of "The Tipping Point" and numerous other bestsellers, and one of the Hachette-published writes affected by Amazon's actions. Gladwell assesses the debate, saying that it is "sort of heartbreaking when your partner turns on you. Over the past 15 years, I have sold millions of dollars’ worth of books on Amazon, which means I have made millions of dollars for Amazon. I would have thought I was one of their best assets. I thought we were partners in a business that has done well. This seems an odd way to treat someone who has made you millions of dollars … My publishers, Amazon and I have been in business together, an extremely successful business. We should all be celebrating together instead of fighting."

And, Gladwell adds, "if this keeps going, the authors are going to have to get together. It’s Hachette now, but I don’t think anyone is under any illusions it stops with Hachette."

A couple of other notes on this issue…

• CNN reports that this is not the first time Amazon has done battle with a publisher, though it seems to be drawing a much tougher line this time around: "Amazon has been through this before -- and lost. In 2010, it gave in to publisher Macmillan, which wanted to raise by $2 to $14.99 the e-book price of best-sellers."

• CNN also notes that Walmart has begun taking advantage of Amazon's position, "offering nearly 400 Hachette titles for 40% off, with delivery dates as soon as this week. The sale was given prominent placement on the Walmart.com home page. On Friday, Walmart said sales of physical books (excluding e-books) were up 70% since Tuesday.

"Barnes and Noble's website is also offering discounts for Hachette books."

Published on: June 2, 2014

Bloomberg Businessweek reports that public policy group Demos is out with a new report, entitled "Retail’s Choice: How Raising Wages and Improving Schedules for Women in the Retail Industry Would Benefit America,” which "argues for an increase to $25,000 a year, or $12.25 an hour. The average hourly wage for saleswomen is now $10.58."

Amy Traub, author of the report, notes that "as of 2012 almost 93 percent of low-wage female retail workers are at least 20 years old and more than a third have children at home. Almost 40 percent contribute at least half of the family’s income, and 19 percent are the sole source of income for their household. She cites all sorts of convincing studies to show that companies could afford to pay workers more because doing so would improve employee productivity and give the workforce more money to spend at those same stores."

Published on: June 2, 2014

The New York Times reports that Amazon and a division of toy company Mattel are teaming up to create what is being called a "content hub" for American children, built around a website that will offer episodes of a British TV series, "Fireman Sam," along with related products - toys, games, clothing, backpacks, etc… - for sale.

It is, the Times suggests, "a potentially controversial experiment that, if successful, could create a new model for marrying television shows with related merchandise."

The episodes will be rolled out starting tomorrow; 13 will be made available immediately, with about 75 slated to be online by the end of the year. The assorted products will start being sold in October.

Published on: June 2, 2014

• Crain's New York Business reports that "despite pulling back on efforts to open its first store in New York City, Wal-Mart Stores Inc. is continuing to give millions in charitable donations to nonprofits in the five boroughs. On Friday, the retail giant announced it had given $1.2 billion nationally in donations over the past year, including $3 million in New York City. The donations may indicate that the Arkansas-based company maintains an interest in opening a location here, despite continuing political opposition to the company here."

Published on: June 2, 2014

• The International Business Times reports that the California State Senate has voted down a bill that would have required the labeling of all products containing genetically modified (GM) ingredients.

According to the story, "The vote marked the second time in two years that California has rejected mandatory GMO-labeling, dealing a major setback to the vocal anti-GMO movement in the Golden State.

"The state would have been the second in the nation to institute such a labeling regime if it had approved the measure. Vermont Gov. Peter Shumlin, a Democrat, signed the nation's first state-level unconditional mandatory GMO-labeling law into law on May 8. Connecticut and Maine previously passed GMO labeling laws, but the laws do not put labeling requirements into place unless other states pass similar bills."


• In the UK, the Daily Mail reports that the pressure is likely to increase this week on Tesco CEO Philip Clarke, who is expected to announce this week that Q4 sales were down as much as four percent, largely as a result of competition from discounters such as Aldi and Lidl.

Analysts are quoted in the story as saying things like they've "never been so gloomy about Tesco's prospects in 20 years, and that this is "a dangerous and frankly untenable place for a mass-market leader to be."


• The Los Angeles Times reports that the California State Assembly will consider a bill. already passed by the State Senate, that "would make it illegal to offer to sell misbranded seafood, and last week it passed the Senate on a 36-0 vote … The law would be enforced by the state Department of Public Health along with state and local prosecutors. First-time violators could be punished with a fine of up to $1,000 and a year in jail, plus civil penalties."

Oceana, the conservation group, recently "found over a two-year period that 84% of sushi samples and 52% of all fish were mislabeled in Southern California. About one-third of all fish tested nationwide — 1,200 samples from 674 retail outlets in 21 states — was mislabeled, based on U.S. Food and Drug Administration guidelines."


• Reuters reports that the US Federal Trade Commission (FTC) has approved the proposed acquisition of Jos A Bank Clothiers by Men's Wearhouse for $1.8 billion. The FTC said there would be little impact on competition because Jos. A Bank appeals to an older consumer and Men's Wearhouse caters to a younger, "trendier" customer.


• Call it yet another casualty of the technology/information revolution.

Source Interlink Distribution, described by the Wall Street Journal as "one of the biggest distributors of magazines in the US," is going out of business, ending "substantially all" of its operations and putting 6,000 employees out of work.

The story notes that the company had been unable to strike new deals with publishers and distributors, which it needed to do in order to remain viable in a digital world where fewer people than ever buy magazines at newsstands.

Published on: June 2, 2014

Ann B. Davis, best-known as Alice, the beloved, common-sense housekeeper on "The Brady Bunch" in its various television incarnations, passed away over the weekend after falling and hitting her head, which resulted in a subdural hematoma. She was 88.

Davis first rose to fame - earning several Emmy awards - as Schultzy, the secretary on the old "Bob Cummings Show" in the late fifties.

Published on: June 2, 2014

We had a story last week about the things that make Costco different, which led one MNB user to write:

Kevin, I’m amazed by the differences in Costco units as I see their outlets in the most far-flung of places. I think that’s the “Costco advantage”.

I’m in Kona for a convention and was at the Costco store on Friday. The store is located in an industrial park; hard to find as it's not well signed off of Hwy 11. The gas station was packed with cars and I joined the queue; I filled my rental car as the fuel price was $4.09, about .35-40 / gallon below many of the gas stations in the area. The club has a wine section at least double most other Costco’s; prices were 10-15% lower than other wine shops in the area. The most interesting thing was a prepared foods, deli-like counter that served different types of raw and cooked seafood, including poke ahi, shoyu, wasabi, shoyu with Hawaiian seaweed, 3 types of shrimp and other stuff I didn’t write down. All portions were sold by the pound so members could ask for how much they wanted. I stood in a long line to get a lunch portion. They offered 20%+ discounts for many Maui / Kona local helicopter tours. In the parking lot, there were local families breaking down larger club packs and sharing them. They needed more seating for the “Costco restaurant” area; I counted 23 people in line at one point waiting to place an order.

One worker I talked with said “No one leaves, once they get a job here”.  Only their softlines areas seemed un-shopped (tables displayed stacked clothing on nearly every table) and reflected less localization than any other department in the club.

I mention the Kona club as an example to make the point that Costco does a very good job of being a local merchant above all else. The Kona store may have benefited somewhat from the polar vortex for visiting members who could find the store, but it seems to be a real treasure for local shoppers. That’s the secret for Costco to continue to get its renewals.

From another reader:

Last weekend I went to Costco for a specific item, which they didn’t have.  However, I did purchase 3 things I did find that I wasn’t planning on buying.  Two of them were in & out type of things that were here today, gone tomorrow or whenever they sell out.  I always enjoy going to Costco, I never know what I will find, or get to sample, and generally will end up buying something I didn’t plan on buying.

And another:

I have worked with all the major retailers in my day in various capacities(CPG sales to loyalty marketing to website creation) and what sets Costco apart is not only the pricing but the quality of the brand name merchandise they bring into the stores. They sell the Kirkland brand but don't force it down your throat. 

And to top it off, their produce/ food area is top notch. Do you ever hear someone brag about the great strawberries or muffins they got at Sam's, Target or Walmart?  If the quantities weren't so big, we'd go there weekly just for that- ask my spouse.




On another subject, MNB user Brian Blank wrote:

Today, you wrapped up your commentary on the ISS call for the ouster of the majority of Target’s board of directors saying “One has to wonder how things would have been different if those moves against Target's board had been successful,” referencing the 2009 call  for similar action by William Ackerman; the implication being that perhaps the data breach might never have happened.

Obviously, we’ll never know, but IMHO, logic and history would suggest that a board recommended by a hedge fund founder with the goal of being more competitive with Walmart would have been even less focused on  throwing money at data security and other areas that don’t drive sales/increase profits. 

Just sayin’ is all.

But MNB reader John Franklin wrote:

You're right on with regard to the Target BOD. Here in Minneapolis, where it seems that each household is required to shop at Target at least once a week in order to maintain our residency (!!), we feel Target's pains very personally. More than anything else, I hope that the Board seizes this opportunity to separate the Chairman and Pres/CEO roles, as they well should be. How can one be the Business Leader and the Chief Employer at the same time? This is the same Board that just a few years ago included the CEO of General Mills, another great local Twin Cities company, but also one of Target's key suppliers -- just a bit too close in my opinion. It's not just Target, but Corporate Governance in general that needs to be restructured. Look at what's happening at Sears, and you have to believe that a more separate BOD would have stemmed their slide a few billion dollars ago…




On the subject of school lunches, MNB reader Tom Herman wrote:

I love to give you grief about your “progressive” views.  It might be a good idea if you started getting your news about this from more sources than the New York Times and Politico.  There are valid reasons other than “lobbyists”.  That tactic is used when you want to impugn other peoples motives.  It is a trick that is used by “progressives”.  Our motives are pure, the other side is illegitimate.  I believe that decisions about our children are best made by parents first and the lowest form of government next; that being the local school districts.  Those are philosophical differences, not merely political or “lobbyists” positions. Big brother gives local schools money so that they become addicted to it like a drug and then big brother gets to dictate what they do … I don’t for one minute believe that most school districts were serving children “crap” … Broadening the menu and giving children more good healthy choices are great.  Removing butter and salt entirely from the menu wasn’t a wise decision either.  In moderation, they are fine.  Remember the not butter, use margarine thing.  That didn’t turn out very well.

On a side note, Northgate has a healthy living program called “Viva la Salud”.  The Hispanic community has higher levels of obesity and their related diseases.  We take the health of the communities we serve very seriously.  Michelle Obama has been to our stores since we serve customers in former “food deserts”.  She is a nice person and I respect her desire to improve the health of our children.  We also run the Orange and LA counties “Cooking up Change” program.  This is a program where local schools compete with each other to develop healthy lunches for school cafeterias.  They have to follow the new Federal guidelines, and being a judge I am very familiar with them.  The schools that won here at our Northgate headquarters have gone onto Washington DC to compete at the national level.  Our schools are 2 time national champions and we feel confident we can win it again this year.  Their winning lunch recipe is served in school cafeterias around the country and also in the House of Representatives cafeteria.

I think I'm fairly consistent about my disdain for lobbyists - and the role of big money - on both sides of the political aisle. And I'd like to think that I have a fairly eclectic list of news sources…though you're welcome to disagree.

I'm not entirely sure that every community and school district take nutrition issues as seriously and personally as Northgate. You're to be commended …

Published on: June 2, 2014

The Los Angeles Kings defeated the Chicago Blackhawks last night, 5-4 in overtime, in game seven of the Western Conference finals … sending the Kings to the NHL Stanley Cup finals against the New York Rangers. Game one is Wednesday night.

Published on: June 2, 2014

As shoppers look for lighter ways to enjoy their favorite baked goods, Wholesome Sweeteners is answering that call with Organic Sweet & Lite, a Sugar and Stevia Blend. With only half of the calories of sugar, Organic Sweet & Lite is a multipurpose, low calorie sweetener perfect in anything from cupcakes and cookies to teas and tartlets. It’s delicious and performs perfectly, so no one has to sacrifice taste or texture. 

SPINS reports that Stevia-based baking blends are quickly becoming the low calorie baking choice for consumers. These blends garnered a 34 percent growth in the natural channel and a 30 percent growth in the conventional channel during 2013’s busy holiday baking season.* Consumers are quickly trading up to natural Stevia and Sugar Blends instead of artificial sweeteners.

To add Wholesome Sweeteners Organic Sweet & Lite to your set, please contact 1 (800) 680-1896 or CS@OrganicSugars.biz .

*SPINS, latest 52 weeks ending 12-21-13, Total U.S. Conventional Channel

Published on: June 2, 2014

Published on: June 2, 2014