retail news in context, analysis with attitude

Published on: November 17, 2014

by Kevin Coupe

Last Friday, just days after Golub Corporation-owned Price Chopper announced that it plans to convert the entire chain to a new banner concept dubbed Market 32, Jerel Golub, the retailer's president and CEO, went on Facebook for for an hour-long "town hall" session in which he offered to answer questions from customers and employees about the coming change.

Golub ended up fielding hundreds of questions, which suggested that however people feel about the change - and opinions were mixed, to say the least - they feel passionately about their connection to Price Chopper.

And that's important.

One typical Facebook posting went like this:

Just 3 comments: 1. If the name Price Chopper doesn't define your market anymore, does that mean you won't be 'chopping prices?' 2. I know the new trend is to change a name but to quote from a wise and wonderful friend 'If it's not broken, why fix it?' 3. I don't like it at all…

Golub responded this way:

Saving our customers money will always be at the forefront of everything we do, whether it be in Price Chopper or Market 32. We did not start with the intention of changing our name. We started with the goal of determining the type of shopping experience that our customers are looking for now and in the future.

Another comment:

As a business owner, it's your right to spend your money as you wish. But don't forget - Price Chopper is synonymous with the Albany area, and people like to feel a connection to a name. By rebranding, you're losing that connection - and making it easier for a competitor to capitalize on their existing sense of connection to the community. Your marketing people obviously sold this idea to you as a way to "refresh" the brand. What they failed to understand - or didn't stress enough - is that you're creating a crack that competitors will surely exploit.

And Golub's response:

Thanks for your perspective, Bobby. We understand that there are a lot of positive feelings particularly in the Capital District for Price Chopper. We have done a number of things to help our customers make this transition, including having our Price Chopper brand products available in Market 32. We are also using "by Price Chopper" under the Market 32 logo to remind people of the connection.

One of the interesting things about watching the forum unfold was to see how most people tended not to read the questions and answers that came before, so they they would ask the same questions and Golub would have to answer them over and over again. More often than not, these questions had to do with price, as in, "Will you be raising prices to pay for the format change?" (The answer always was "no.")

People also used the forum to complain about specific stores, ask for more of this product or that category, and even to suggest that there were other ways that the company could (or should) spend the $300 million it would cost to re-banner, rebrand and reinvent the entire chain.

That's not to say there was not support for the concept; there were a number of people who used Facebook to express their support and to acknowledge that there comes a time in the life of every business that it must reinvent itself … and Price Chopper clearly believes it has come to that moment.

To be fair, I think there was more skepticism than approval … but it is early in the game.

As the Facebook session was winding down, I used the forum to pose the following question to Golub:

What do you know now that you didn't know before this "town hall" chat began? And do you think that you need to do anything different than planned to deal with the questions of substance and perception that have been raised?

And he responded:

Today's live chat reinforced my longstanding commitment to embrace social media as an important communication tool for our company. It also really highlighted a few things for me: While there can be a lot of negativity on Facebook at times, there are even more people who are truly interested in understanding the rationale behind our decision and are open to our responses. I was really pleased with all of the interest and comments we received from so many of our teammates. As you can tell we have lots of great people here, and we are very proud of all they do for our company. Finally, today's Facebook chat was a way for me to personally connect with so many of our customers and teammates and to respond to their questions and concerns. It was particularly useful in our effort to answer a number of important questions and clarify some misunderstandings that may have existed.

If I'm reading the situation right, I think there remain a lot of questions to be answered and a lot of misunderstandings to be clarified.

What Price Chopper is doing is very risky, and very hard. That doesn't mean that the company shouldn't do it … just that a total rebranding of a company carries with it the possibility that long-established brand equity will be diluted, and that the existing business could be imperiled.

Clearly, the folks at Price Chopper don't believe that, or at least have been persuaded that it is worth the risk … and that it is better to stay ahead of the curve than to be allow the company to be marginalized in the marketplace. Of course, there will be those who will suggest that Price Chopper may already have been feeling marginalized, and that this is an act of desperation.

(Two examples. Delhaize didn't decide to convert all of its Kash n' Karry stores in Florida to Sweetbay Supermarkets because things were going swimmingly; it decided to do so because Kash n' Karry had lost its relevance and it needed to do something radical and change the narrative. But when FedEx decided to retire the Kinko's name after it acquired that company, switching to FedEx Office banner, it was an act - in my view - of corporate arrogance, ignoring the fact that the Kinko's name had a lot of positive brand equity. When the dust settles, the Price Chopper/Market 32 doesn't want to be lumped in with either earlier scenario.)

One thing seems clear, regardless of the motivation. Price Chopper/Market 32 will have to demonstrate to customers - especially the passionate shoppers who feel like Price Chopper is their store - that the new format is as relevant as can be to shoppers' lives, needs and desires. If they do that, then they will have a significant head start on a process that at best will be challenging and laborious.

Either way, it will be an Eye-Opener.

Published on: November 17, 2014

The New York Times reports that while a number of retailers are competing to see who can be open earlier and longer on Thanksgiving Day this year, some retailers - including Costco, Barnes & Noble, Bed Bath & Beyond, Burlington Coat Factory, Crate and Barrel, Dillard’s, Nordstrom, Neiman Marcus, Patagonia, Marshalls, GameStop and T. J. Maxx - "are riding the backlash against holiday commerce by boasting that they will not relent: They will remain closed that day to show that they are family-friendly and honoring the holiday."

Richard A. Galanti, executive vice president and chief financial officer at Costco, explains it this way: "It’s an important holiday in the U.S., and our employees work hard during the holiday season, and we believe they deserve the opportunity to spend Thanksgiving Day with their family and friends. We’ve never opened on Thanksgiving, and when the trend to do so occurred in the last couple or three years, we chose not to because we thought it was the right thing to do for our employees."

Tony Bartel, the president of GameStop, says "it’s a matter of principle. We have a phrase around here that we use a lot — it’s called 'protecting the family.' We want our associates to enjoy their complete holidays.”

The Times writes that "the University of Connecticut Poll conducted a survey last November that found that nine out of 10 Americans said they didn’t plan to spend Thanksgiving hunting for bargains, while 7 percent said they planned to visit stores on Thanksgiving Day.
The poll of 1,189 adults, with a margin of sampling error of plus or minus 3 percent, found that 49 percent disapproved of stores opening on Thanksgiving Day, with 16 percent approving and 34 percent neutral."

Published on: November 17, 2014

The Boston Globe reports that in the wake of the recent contretemps at Market Basket, where employees walked the picket lines and even promoted a customer boycott when their preferred CEO, Arthur T. Demoulas, lost his job, it decided to conduct a survey of local employees to see what the would do if their CEO was canned.

Forty three percent of respondents said they'd do nothing, and 19 percent said they'd sign a petition in favor of his or her firing.

A whopping 11 percent said they'd walk off the job, while 25 percent said they did not know what they would do.

And, in one of the more curious responses, three percent said they'd post a picture of the fired boss in their workspaces.

However, CEOs interviewed by the Globe said that - regardless of the fact that the survey suggested they may not be as valued by their employees as Arthur T. Demoulas was - they'd learned much from the Market Basket situation. "The turmoil at Market Basket sparked corporate soul-searching in corner offices everywhere," the Globe writes. "Employee protests and a customer boycott crippled the popular grocery chain over the summer. The message: Don’t put profits before people."

Published on: November 17, 2014

The Financial Times offers an analysis of the decision by Amazon founder/CEO Jeff Bezos last week to end its months-long dispute with publisher Hachette over e-book pricing; the deal will allow Hachette to set e-book prices, with Amazon offering incentives to keep the prices low.

Here's how FT sees it:

"Mr. Bezos did not change approach because he has given up on the idea of cutting the cost of ebooks. Low prices are as important as ever to Amazon’s business model. Nor were the concessions entirely novel: he had already done a similar deal with another publisher, Simon & Schuster.

"Rather he did so because of the collateral damage the dispute was causing his business.

"Effectively hiding Hachette’s books in its storerooms – both physical and electronic – and telling potential customers that they were not available may have seemed an effective way to put pressure on the publisher during the dispute. Mr Bezos has pursued similar tactics with many publishers over the years.

"But it did not play well with Hachette’s roster of well-known authors, who found their books were not selling. Hachette’s book sales fell nearly 20 per cent year on year in the third quarter. Amazon ended up being denounced by some of the publisher’s best-known writers, including Donna Tartt and Malcolm Gladwell.

"Getting those books back on the shelves before the key Christmas selling period came to seem more important than winning every item on Amazon’s list of demands."

The analysis goes on:

"Mr. Bezos may look as if he climbed down last week. But it is less clear how much humble pie the Amazon boss has really consumed.

The settlement cauterises what threatened to be a damaging dispute with authors: an important constituency for Mr Bezos who would like to see more of them strike out on their own. Meanwhile, he keeps up the pressure on the publishers.

"The common feeling among those in the book industry last week was one of relief. While it all depends on one’s assessment of Mr Bezos’s tactical acumen, such sentiments seem a touch premature."

Published on: November 17, 2014

There was an interesting piece in the New York Times yesterday as part of the "Corner Office series in which four female CEOs talked about "the importance of taking stands, and of making sure they’re heard."

The CEOs: Dara Richardson-Heron of the Y.W.C.A. USA.; Sharon Napier of Partners + Napier; Jenny Ming of Charlotte Russe; and Jody Greenstone Miller of the Business Talent Group.

The story was designed to answer some specific questions: "What does it mean for women to have a “voice” in meetings? How can they navigate perceptions around assertiveness, particularly when they are often judged more harshly than men? And is much of the conversation around women and leadership really just about power?

"These are just a few of the themes that arose during interviews with four executives about the challenges they have faced at work over the years and the advice they would give to other women about surviving and thriving in the workplace."

It is a really good piece, the answers and experiences are very different, and you can read the entire thing here.

Published on: November 17, 2014

Last week, MNB took note of a New York Times report that the US Department of Agriculture (USDA) has approved for commercial planting a potato genetically engineered by JR Simplot "to reduce the amounts of a potentially harmful ingredient in French fries and potato chips … The potato’s DNA has been altered so that less of a chemical called acrylamide, which is suspected of causing cancer in people, is produced when the potato is fried."

Now, the Wall Street Journal reports that one of Simplot's oldest customers, McDonald's, will not be buying them to turn into french fries.

The reason? McDonald's says it doesn't use genetically modified potatoes.

According to the story, "This isn’t the first time the fast-food industry has resisted GMO potatoes. More than a decade ago, Monsanto brought its bug-resistant 'New Leaf' line of genetically modified potato to market. Buyers, led by the fast-food industry, rejected the Monsanto spud, and it was pulled from production because of lack of business."

Published on: November 17, 2014

• CNN reports that "a group of Walmart workers is planning to protest at stores" on Black Friday, the day after Thanksgiving, "asking for higher wages and fair schedules. This will be the third year of Black Friday demonstrations in a row. Protests are planned at 1,600 Walmart locations — the most ever — according to organizers from the union-backed group OUR Walmart."

The union-backed group OUR Walmart is not able to say how many people are expected to be involved in the protests, except to predict that it will be more than the people that it says protested at 1,200 stores last year.

According to the story, "Workers want to be paid at least $15 an hour, they want to be given more hours and to be given more consistent schedules. They’re also accusing the retailer of retaliating against workers who have protested against the company before."

Published on: November 17, 2014

• Kroger-owned Ralphs Grocery Co. said last week that "it is hiring to fill an estimated 1,200 permanent positions at its stores in Southern California." According to the company, "Ralphs is hiring for a variety of positions including front end, deli, bakery and store clerks. Ralphs is also looking to fill cake decorator positions and openings in its Murray's Cheese and Starbucks shops that are located in many of its supermarkets. These positions and more are available at Ralphs supermarkets in each of the Southern California counties served by the supermarket company, which include Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara and Ventura counties."

Published on: November 17, 2014

• Advertising Age reports that the Coca-Cola Co. is moving Emmanuel Seuge, currently the company's global VP for alliances and ventures, into a new job as senior VP-content in North America, a new position.

According to the story, "He will report to Wendy Clark, who on June 1 became president-sparkling and strategic marketing for Coca-Cola North America, after a stint leading the company's global sparkling brand center … The creation of the position is a signal of Ms. Clark's strategic priorities as she settles into the new position and assembles her team."

Published on: November 17, 2014

Regarding the Price Chopper decision to convert the chain to the Market 32 banner, one MNB user wrote:

I was talking to some Vietnam veterans last week and one statement that was made was, If you weren't there, no explanation will suffice, and if you were there, no explanation is necessary.  So, to paraphrase …

If the experience inside the [Market 32] store and the employee morale and corporate culture doesn't change, no rebranding will suffice. If it does change, then no rebranding is necessary.




Responding to the story about Berkshire Hathaway acquiring Duracell from Procter & Gamble, one MNB user wrote:

Duracell employees should be afraid…be very, very afraid.  Other companies know the pain of BH cost cutting.  Just ask Heinz and Anheuser-Busch (I know it was InBev that bought AB, but BH and 3G Capital were big players).  Think of the bathtub scene in Scarface with the chainsaw.

It is so bad there are employee advocacy groups in Canada trying to have the government step in on the sale of Tim Horton’s for fear of cuts (also another BH with 3G Capital purchase).

Extra credit for the movie reference.




Got the following email from MNB reader Margi Prueitt, chiming in on a discussion we were having last week:

I don’t know Larree Renda, but she rocks!  Many women will be cheering (and agreeing with) her comments!  As Kellee Harris, the Western Region Business manager for Giumarra and a participant in the PMA Foundation Women’s Fresh Perspectives Conference, told you in an email earlier this week, we have a fabulous group of women in leadership and many more ready for the challenge of leadership.  We hope to help build the understanding that, to be financially successful, companies must do far more than “COUNT” the women on their teams – they need to “COUNT ON” women to build successful strategies alongside their other leaders.  Thanks for bringing the issue to light.  You rock, too!

Hey, I live with two really smart women, and am lucky enough to work with lots of others … some of it had to rub off.

From another reader:

And that is why I have such respect for Larree Renda and why I think that Cerberus is making such a mistake by not making her part of the new organization!

Published on: November 17, 2014

In Week Eleven of the National Football League…

Atlanta 19
Carolina 17

Minnesota 13
Chicago 21

Houston 23
Cleveland 7

Seattle 20
Kansas City 24

Cincinnati 27
New Orleans 10

San Francisco 16
NY Giants 10

Denver 7
St. Louis 22

Tampa Bay 27
Washington 7

Oakland 6
San Diego 13

Detroit 6
Arizona 14

Philadelphia 20
Green Bay 53

New England 42
Indianapolis 20

Published on: November 17, 2014

Join independent retailers and wholesalers, food/CPG manufacturers, and service providers for unparalleled opportunities to learn, network, and drive profitable growth in the independent supermarket sector at the 2015 NGA Show, February 8 ­ 11, in Las Vegas!

Over the course of four days, attendees have the chance to take part in more than 30 education workshops on issues impacting their bottom line such as: consumer engagement, digital marketing, technology, food safety, data security and more!

The 2015 Expo Floor will have even more exhibitors and pavilions in categories such as produce, meat, technology, and GM/HBC, and numerous opportunities to see the solutions you'll need all in one place!

For more information, click here.

Published on: November 17, 2014

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Published on: November 17, 2014