retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: October 7, 2014

    by Michael Sansolo

    Among the many complexities facing business leaders these days, there may be none more challenging that learning how to cope with the multiple generations of employees and shoppers around today.

    We know we need to fill the aisles of stores with a combination of people who read circulars and are puzzled by “twittering,” mixed with people who download news and binge watch television shows. And that’s just the start of the generational balancing act.

    That’s why when we get the rare gift of a wildly public example of generational mismatches in the workplace we need pay attention and try to learn, no matter how distant the lesson. The mistakes made really far from your workplace can still help you.

    Now that’s a long way of explaining why this year you need to care about what happened at the Ryder Cup, a golf tournament that many of us (me included) managed to miss completely a few weeks back.

    The tournament is the rare time golfers play in teams. Every two years it pits players from the US against their counterparts in Europe in a series of different formats. Since this is MNB, I've found the inevitable management lesson…

    The story from the Cup this year wasn’t the European victory, which has become somewhat commonplace in the past decade. Rather, the dominant story has been the open griping by most accomplished American player, Phil Mickelson, about the management style of team captain Tom Watson.

    Watson’s management style seemed to be basically: my way or the highway. He was criticized for his decisions (selecting which players would play at specific times) and for not developing much rapport with his all-star team. As sports reporters on the scene pointed out, Watson seemed to have trouble connecting with his youngest players—hardly a surprise since at age 65 he’s three times their age.

    In a press conference immediately after the defeat, Mickelson talked about the need for the US team to bring back the leadership approach used by a past captain; an approach that involved the players more deeply in every element of the tournament. It should be noted that he said this with Watson at his side.

    Now obviously, this isn’t a typical workplace or even a typical athletic team. This was a short tournament featuring extremely talented and wealthy performers who usually work on their own, forced for a week into a collaborative effort.

    Then again, it’s very typical. We hear repeatedly that the younger generations - the Xers and Millennials - thrive under different workplace conditions than their elders. Involvement, communication and feedback are very different today than they were decades ago when I started my career.

    Our younger associates these days have grown up in the era of constant communication and feedback. Imagine someone who is used to getting instantaneous text responses waiting a year for an employee review or being told their input isn’t wanted in how decisions are made?

    Here’s the thing: depending on your age or experience you might view the kerfuffle over the Ryder Cup very differently. Some may see Mickelson as a malcontent who didn’t get his way and groused. Others may see him wanting greater involvement to help his team succeed.

    Conversely, some may blame Watson for failing to properly motivate his team and understand how to make them excel. Others may praise him as a very straightforward manager trying to get the most from his team.

    And to be clear, it isn't like Mickelson is a kid. He's 44. But in this case, he may have a better sense of how to connect to and communicate with younger players than Watson did.

    Either way, we can see a clear example of today’s workplace generational gap and it’s a topic you need to consider. This gap is simply too big to avoid.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here.
    KC's View:

    Published on: October 7, 2014

    by Kevin Coupe

    So every year, at the Branzi Fair in northern Italy, there is a contest called the World Hand Milking Championship, which, according to Modern Farmer, "specifically challenges a pair of competitors — one human, one cow — to produce as much milk as possible in two minutes. No machines are allowed, which makes for a very tough challenge. Usually a machine-milked cow will produce as much as 25 liters in a day, but the former world record (as listed by Guinness) for hand-milking is only two liters in two minutes."

    Except this year, the story says, "Gianmario Ghirardi, a 31-year-old from Malonno, in Brescia, took the title with an astounding 8.7 liters of milk extracted from his steadfast partner, Mirka the Cow … the duo defeated a field of 43 competitors, coming from as far away as India, to claim the prize."

    Ah, but as in so many professional athletic endeavors, the winners have been tainted by accusations of performance-enhancing drugs. “For a competition at this level, I would have expected strong anti-doping checks on the cows and milkers to protect the animals and guarantee transparency of the top positions,” said last year’s champion Maurizio Paschetta, who declined to participate in this year's event.

    However, as Salon reports, "It is unclear whether or not Paschetta is accusing the man or the cow of doping."

    Either way, it would be an Eye-Opener. (And thanks to MNB reader Ken Wagar for alerting me to this udderly delightful bit of news.)
    KC's View:

    Published on: October 7, 2014

    The New York Times reports that Walmart has announced "an initiative to reduce the environmental impact of the food it sells and to help customers improve the nutrition in their diets."

    According to the story, "Walmart’s effort to enhance sustainability has four legs: reducing the overall cost of food, including its environmental footprint; increasing access to more nutritious food; making it easier for its customers to eat healthier foods; and improving food safety, with greater transparency about where food comes from and how it is produced.

    "The company says it has been working with a variety of partners, including nonprofit groups, food manufacturers like General Mills and PepsiCo, and agricultural businesses like Monsanto and Cargill. Walmart and General Mills, for example, are sponsoring a challenge that will reward farmers who show the most progress in reducing emissions through better use of fertilizers.
    To reduce food waste, Walmart says it has begun developing more ways to use a 'whole crop' in its private-label food production and to reduce spoilage."

    The Times notes that because Walmart "is the United States’ largest grocer, and food is its biggest business." it has "enormous clout with food producers and food processing companies — influence that it can use, for example, to sway how much water is used to produce a crop, or to shorten the distance a load of strawberries is shipped."
    KC's View:
    There no doubt will be some cynicism about Walmart's motives in this case, not to mention bridling at Monsanto being described as an agricultural business - it more accurately would be described as a agrochemical and agricultural biotechnology corporation (with an emphasis on the words "chemical" and "biotechnology").

    Still, I think that Walmart's efforts in the environmental and sustainability areas have largely been laudable. This is about saving the planet but also, inevitably, saving money … and that's just fine.

    I love the line about "greater transparency about where food comes from and how it is produced." That's important, and I'm looking forward to seeing how it plays out.

    Published on: October 7, 2014

    The BBC reports this morning that UK retailer Tesco has asked Kevin Grace, the company's commercial director, to step aside in the wake of the company's admission that its first half profit projections were overstated by the equivalent of more than $400 million (US) because of what the company acknowledged was "early booking of revenue and delayed recognition of costs."

    Grace is the fifth executive asked to step down from their responsibilities, though the company has said that the moves are not "disciplinary or an admission of guilt." The company also has not said that deliberate fraud caused the financial misstatements.

    The four other executives are reported to be Chris Bush, who ran Tesco's UK business; UK finance director Carl Rogberg; food commercial director John Scouler; and the head of food sourcing, Matt Simister.

    Tesco has said that it is conducting an internal investigation, while the UK's Financial Conduct Authority also has launched a probe.
    KC's View:
    Hard to imagine any way in which this story doesn't get worse for Tesco long before it gets better. I just thing that all these investigations have to be done quickly - get the news, whether it is bad or good, out quickly. Purge the people who made mistakes, and move on.

    Published on: October 7, 2014

    The San Francisco Chronicle reports that the US Supreme Court tomorrow will hear arguments in a case that "could help redefine companies’ reach over hourly workers." The case specifically concerns lawsuits brought against Amazon by some of its warehouse employees, who objected to having to go through metal detectors each day to assure that they were not stealing - but did not get paid for that time.

    According to the story, "The suits underscore the growing tensions between employers that seek to minimize costs to gain a competitive edge and the workers who may suffer the consequences. While companies such as Amazon use the screens to guard against theft, employees such as Busk say what’s being taken is their own time, for Amazon’s benefit."

    If the Supreme Court rules in the employees' favor, the case will then "be allowed to move forward in a federal trial court. Ultimately, Amazon and various staffing agencies it uses could be required to pay as many as 400,000 workers back wages amounting to $100 million or more, according to plaintiffs’ attorneys involved in the case … If Amazon prevails, employers could feel emboldened to squeeze more time out of workers without pay, pushing the boundaries of a 67-year-old law that defines what constitutes compensable work."

    Amazon is hoping that the Supreme Court will stop the case from moving forward, arguing that "security-line waits are no different than time spent walking to and from a work area, which courts have determined isn’t compensable."
    KC's View:
    I'm no lawyer, but it simply makes common sense to me that these folks ought to be paid for time spent walking through metal detectors. It isn't like going from home to work…this is very specifically work related.

    At the very least, let the case go forward. It needs to be heard in the courts, not shut down by SCOTUS.

    Published on: October 7, 2014

    Bloomberg Businessweek reports that the European Union will conduct an investigation into a tax deal that Amazon made with Luxembourg, which the EU says allows the e-tailer to shelter its European profits there without being taxed.

    According to the story, "The EU inquiry into Amazon comes amid a global crackdown on corporate tax-avoidance as governments struggle to increase revenue and reduce deficits. It expands a probe into Apple in Ireland, Starbucks Corp. in the Netherlands and Fiat Finance & Trade in Luxembourg. The commission has said tax avoidance and evasion in the EU cost about 1 trillion euros ($1.3 trillion) a year.

    "Luxembourg hasn’t provided any detail about any expiry date for that tax ruling, a person familiar with the case said. The Brussels-based commission has the power to ban and order recovery of selective public subsidies, including tax advantages, that distort competition."
    KC's View:
    The EU probably doesn't mind it when US companies avoid taxes by moving their headquarters from the US to Europe. But doing the same thing within Europe? Simply not acceptable….

    Published on: October 7, 2014

    The Washington Post this morning reports that the rash of data breaches at major retailers seems not to be having much of an impact on the consumer psyche.

    Here's how the Post frames the story:

    Shoppers, it writes, seem to "have become numb to reports that their credit cards and other personal information have been compromised as incidents have piled up in the last year. Target suffered a major breach during last year’s holiday shopping frenzy. Restaurants P.F. Chang’s and Jimmy John’s have acknowledged hacks this year. So have Neiman Marcus, Michaels and Sally Beauty Supply. SuperValu says it was hacked twice this year.

    "There have been 579 data breaches this year, a 27.5 percent increase over the same period last year, and it is only expected to become more common as consumers become more dependent on Internet-connected devices, according to the Identity Theft Resource Center.

    "Recent research suggests that many consumers have become complacent about these intrusions: Some 32 percent of consumers said they “ignored the notifications and did nothing” when they were alerted to a possible data breach involving their personal information, according to a study by the Ponemon Institute, which studies information security. In the same study, 71 percent of respondents said they did not stop doing business with the company that had been breached."
    KC's View:
    Consumers may be numb, but retailers cannot afford to be. Because if they are complacent, this thing is going to come back and bite them on the tucchus … i think consumers may be numb only because they don't see it as impacting them, but it won't take much to turn that around…

    Published on: October 7, 2014

    • The National Retail Federation (NRF) is saying that it expects that end-of-year holiday sales this year will be up 4.1 percent to $617 billion, an increase that "would top last year’s 3.1 percent gain and the 10-year average of 2.9 percent." Online sales are project to rise as much as 11 percent to $105 billion, the organization says.

    Part of the reason for optimism is the nation;'s steadily improving employment rates, which are giving consumers more money to spend and more confidence to spend it, though the desire to look for bargains is not expected to recede anytime soon.


    • The Associated Press reports that "Starbucks says more than 1,000 of its workers have enrolled for an upcoming fall semester at Arizona State University to take advantage of a program that helps pay for their tuition. That's from about 4,000 workers who started the application process, 2,000 who completed it, and 1,800 who were accepted by the school, according to Starbucks. The Seattle-based company said the most popular degree programs being pursued are psychology, organizational leadership, health sciences, mass communications and media studies and English."
    KC's View:

    Published on: October 7, 2014

    • The Food Marketing Institute (FMI) yesterday said that it has hired Margaret Edgell Core to be its new vice president of industry events, primarily responsible for developing the breadth and depth of the FMI Connect show and educational event. Core most recently ran strategic sales initiatives at the National Apartment Association, and previous to that she spent six years at the Biotechnology Industry Organization (BIO) as managing director of sales and marketing, and also was vice president, Marketing and Organizational Development at Consumer Electronics Association.
    KC's View:

    Published on: October 7, 2014

    • Geoffrey Holder, who with his distinctive height and Caribbean-infused voice was perhaps best known as a longtime spokesman for 7Up - saying that the "Uncola" was “absolutely maaarvelous” - as well as the villainous Baron Samedi in Roger Moore's first James Bond film, Live and Let Die, has passed away of complications related to pneumonia. He was 84.
    KC's View:
    Like most people, I knew Holder's work from his commercials and Bond movie. I sort of vaguely remembered that he had a background in dance and theater, but I really didn't know much about it.

    So I was genuinely amazed when I read Holder's obituary in the New York Times - he was a renaissance man, having lived an extraordinary life of artistic accomplishment. Not everybody will care about this, but if you want to be impressed and even a little bit awed, check out the Times obit here … I was absolutely blown away by it, and sort of disappointed in myself that I did not know more about him before reading the obit.

    Published on: October 7, 2014

    Yesterday, in the Eye-Opener, I led with this bit of news…

    "Redbox and Verizon announced over the weekend that their Redbox Instant service, designed to compete with Netflix's streaming service, is being shut down as of tomorrow."

    Except that when I posted the story, I had a small misspelling - "shut" was spelled with an "i" instead of a "u." Which made it a very different word.

    Within about five minutes of posting MNB, I got dozens of emails - almost of them good-humored - pointing out the mistake, and I fixed it pretty quickly. Most of you never even saw it, but I thought it was important to apologize to those of you who did.

    I did think it was sort of amazing how fast the feedback came. It told me that if nothing else, you all are paying attention … which is gratifying.

    And I appreciated the understanding that sometimes, shut happens. If you know what I mean.

    As one reader told me in an email, "Don't worry about it. If any of your competitors made that mistake, nobody would care. Or even notice."

    Which made me smile.
    KC's View:

    Published on: October 7, 2014

    On the subject of Mariano's tweaking its stores, and the sense in some quarters that the retailer needs to work harder at being profitable, one MNB user wrote:

    Having been in many of the Mariano’s…since they began…including the last several they’ve opened like Ravenswood, I’ve never gotten the impression these great stores are marketing themselves on price. When you’re having a piano player playing at your openings , when you’ve an oyster bar, great looking pastry counters, bottles of spirits displayed like it’s jewelry and other impressive stations, echoing the food courts in Europe,  a focus on all the sexy perimeter offerings Mariano has—like Central Market in TX for example-you’re not marketing to people pinching pennies but to those seeking an experience-one that hits all the senses.

    Mr. Mariano is marketing an immersive experience in the artistic, sensual nature of food presentation not a trip to a discounter. Look  at  most of the locations-Glenview ( a planned “organic” store), the South Loop site on Clark, Ravenswood in a hipster area, Aurora by Naperville-a corporate headquarters lined corridor. Yes some of the stores-like Gurnee and Hoffman estates are not exactly in the most upscale areas but all of these stores are catering to aspirational and upscale shoppers willing to make Mariano’s a destination trip, someone willing to spend a little more on their foods because they are attracted to food as sensation as well as nourishment. The artistic nature of its presentation in these stores feed that. No doubt many of the Mariano’s shoppers have already been shopping at Whole Foods, Sunset Foods, Treasure Island and other purveyors of the more foodie experience.

    While the Roundy’s sourcing and other buying logistics gave the Mariano’s stores a great start and allowed them to offer attractive pricing, the Mariano’s stores have developed into a chain of their own. It has a different mission than the regular Roundy’s stores.  In my opinion as long as the Mariano’s stores keep conscious of their particular approach, adhere to their core character-let that guide their decisions -they’ll continue to grow and be able to sustain their stores even if prices have to rise.





    On another subject, one MNB reader wrote:

    The reader who questioned Walmart’s decision to build depots for their (so-far experimental) click-and-collect grocery service, rather than just installing depots at existing stores has apparently not spent much time in a Walmart, let alone in the parking lot of a Walmart!  These places are free-for-alls—like a bumper car ride meets Mad Max, particularly at peak times.  To be sure, Walmart will need to do careful real estate studies and a lot of trial-and-error in determining the best execution, traffic flow handling, etc. to make the depots successful in the real world.
    KC's View:

    Published on: October 7, 2014

    • In the National League Major League Divisional Series last night, the Washington Nationals defeated the San Francisco Giants 4-1, staying alive in the best-of-five game series that the Giants now lead 2-1. And, the St Louis Cardinals defeated the Los Angeles Dodgers 3-1, to take a 2-1 lead in their best-of-five series.


    • In Monday Night Football, the Seattle Seahawks defeated the Washington Redskins 27-17.
    KC's View: