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    Published on: January 9, 2015

    Normally, I provide a text version of my video commentaries. But in this case, I thought I wouldn't ... that this one actually is better for seeing and hearing it.

    I will tell you the general subject though. It is about generational leadership, and it is a business lesson that I was pleased to find on the cold streets of Norfolk, Nebraska.

    Enjoy.

    KC's View:

    Published on: January 9, 2015

    Politico reports that the US House of Representatives "easily passed legislation Thursday afternoon changing the Affordable Care Act’s definition of a full-time workweek to 40 hours, the first step in the new Republican Congress’ plan to dismantle as much of Obamacare as it can."

    While the GOP-controlled House has passed more than 50 bills designed to repeal or place limits on the Affordable Care Act (ACA) since the landmark health care legislation became law, this is the first time that it has been able to send a bill to a US Senate that also is under Republican control. However, Senate rules require 60 "yes" votes in the 100-member body for a bill to pass, that it is uncertain that there is sufficient support to pass the measure.

    Even if the Senate were to pass the bill, President Obama has promised to veto the change, saying that it "would significantly increase the deficit, reduce the number of Americans with employer-based health insurance coverage, and create incentives for employers to shift their employees to part-time work — causing the problem it intends to solve.”

    Politico also writes that "business lobbyists pushing the change in this Congress had been looking for strong bipartisan support for the bill in the House, as it could improve the bill’s fortunes in the Senate. Backers include the U.S. Chamber of Commerce, National Restaurant Association, Retail Industry Leaders Association and the National Federation of Independent Business." The Food Marketing Institute (FMI) and National Grocers Association (NGA) also have come out in favor of the House bill.
    KC's View:
    I made a rather glib comment here the other day about the whole notion of it being ludicrous that a 30-hour work week would be considered full-time, which just seems antithetical to the way the economy seems to function these days. While I think I was right about that, I also think I missed the point when it comes to this legislation.

    (I'll address this more in "Your Views," below ... prompted by some readers who took me to task. They were right.)

    The Politico story makes a point that I do find thought-provoking - that the bill, if it were to be passed, might actually result in the federal government having a greater role in the way health care is delivered in this country, not a lesser role. Politico notes that even some conservative columnists have raised concerns about the bill since "the longer-workweek definition would mean fewer workers must be offered health insurance by their employer under the health law’s employer mandate."

    From a selfish point of view, I have to say that I am intrigued by another passage from the Politico piece, which says that "the American Federation of Teachers, one of the groups lobbying against the House bill, said the longer workweek would 'close off a much-needed health insurance option' to contingent workers, including college and university adjunct faculty."

    Ultimately, I don't think it is going to matter, because I suspect that the bill won;t pass the Senate, and even if it does, it'll be vetoed by the President.

    Published on: January 9, 2015

    USA Today reports this morning that despite having posted holiday sales numbers that were "on the high end of muted expectations," both Macy's and JC Penney plan to "head into 2015 with a focus on smaller operations and fewer employees."

    Perpetually troubled Penney is said to be closing 39 underperforming stores and laying off some 2,250 employees, while Macy's plans a restructuring that will close 14 stores and lay off more than 2,000 employees.
    KC's View:
    I'm particularly interested in a quote in the story from consumer psychologist Kit Yarrow, author of "Decoding the New Consumer Mind." Yarrow tells USA Today that "retail is in a massive transformation period. Consumers have lost their enthusiasm for trolling through massive stores hunting for a bargain. They can do that online. The only big department stores that will remain relevant to consumers are those that incorporate tricks and treats into the shopping mix — like product offerings you can't find online, special demonstration or sampling, cushy or fun relaxation areas."

    I think this is something that every bricks-and-mortar retailer needs to consider.

    Published on: January 9, 2015

    MarketWatch reports that Whole Foods CIO Jason Buechel is saying that the retailer has seen double-digit growth in the use of Apple Pay week-over-week.

    "We are the largest retailer (for Apple Pay) both in terms of transactions and sales dollars," he says.

    The story notes that Whole Foods was one of the first retailers to adopt the Apple Pay mobile payments system, which allows shoppers to pay for products using their iPhone 6 smartphones. While other retailers, including McDonald's and Nike, are accepting Apple Pay, other retailers such as Walmart and CVS are not because "they are part of a consortium called Merchant Customer Exchange that introduced a rival mobile payment product."
    KC's View:
    Not surprising, especially because there's got to be a big overlap between Apple shoppers and Whole Foods shoppers. They're smart, and they have money. That's a nice combination for a retailer to be targeting.

    Published on: January 9, 2015

    The Wall Street Journal has a story worth reading this morning about how Marc Lore, "the co-founder of Diapers.com, which was bought by Amazon.com Inc. in 2010, is preparing a new e-commerce site aimed squarely at his former employer.

    "The online marketplace, Jet.com, has grand ambitions, including a planned half-billion-dollar marketing budget and projections for $5 billion in annual transactions by 2020, according to slides distributed to potential merchants."

    You can read the entire piece here. And it is worth reading in part because it suggests just how more crowded the online marketplace could get in coming years.
    KC's View:

    Published on: January 9, 2015

    The Associated Press reports that "Founders Fund, the $2 billion San Francisco venture capital firm run by Silicon Valley stars including Peter Thiel, co-founder and former CEO of Paypal, is investing in Privateer Holdings, a marijuana company that owns several pot-related brands."

    No dollar figure was put on the investment, but it said to be several million dollars.

    "Privateer, based in Seattle, owns Canadian medical marijuana producer Tilray and the pot information service Leafly. It is introducing a brand of marijuana and products with the family of Bob Marley called Marley Natural," the story says. Founders Fund partner Geoff Lewis, who is leading the firm's investment in Privateer, said in an interview that he believes the broader legalization of marijuana is inevitable ... There are 23 states that allow the use of marijuana for medical purposes, and Colorado has legalized its recreational use."
    KC's View:
    I remain personally conflicted about the legalization about pot, though I also think it is inevitable ... and that's what we are seeing in this investment move.

    Published on: January 9, 2015

    • The Washington Post reports that "Family Dollar Stores, the discount retailer at the center of a takeover battle, posted a 47 percent decline in first-quarter earnings as a new pricing strategy and a shift to lower-margin products took a toll on profits."

    The story notes that "even as the retailer struggles to get its business back on track, it has drawn takeover bids from two rivals - Dollar Tree and Dollar General - that want to use Family Dollar’s 8,100 stores to bolster their chains." Family Dollar has said that it prefers the Dollar Tree bid, even though it is lower, because it believes that a Dollar General deal will require too many stores to be divested because of antitrust concerns.

    The Federal Trade Commission (FTC) currently is evaluating both bids.


    • The New York Times this morning reports that Coca-Cola is saying that it is "cutting 1,600 to 1,800 jobs globally as part of $3 billion in costs it hopes to pare over the next several years ... The company had 130,600 employees worldwide as of December 2013, the most recent figure available."

    According to the story, "Sales of sugary soft drinks continue to decline as more health-conscious consumers adjust their eating and drinking preferences. As the industry leader, Coca-Cola has not made adjustments to its business until now, while PepsiCo and the Dr Pepper Snapple Group started making cuts a few years ago."


    Food Business Review reports that "the US Department of Agriculture's (USDA) Food Safety and Inspection Service (FSIS) has delayed mandatory labelling for mechanically tenderized beef products until about 2018 ... When issued, the regulation will require food manufacturers to display specific cooking instructions on the packaging for meat products.

    "The tenderisation process softens the meat with tools and devices that are known to cultivate pathogens that can lead to foodborne illnesses, which can be prevented by cooking meat for long enough."


    • The Wall Street Journal reports that "Keurig Green Mountain Inc. signed a deal with Dr Pepper Snapple Group Inc. to sell capsules that make its sodas in Keurig’s planned cold-drink machine, giving the maker of coffee and brewing machines two of the top three soda companies on a platform central to its long-term expansion plans." Coca-Cola made a similar deal last year, and also "took a 16% stake in Keurig last year.

    "Keurig said the new deal means it will have at least 30 beverage varieties - including multiple brands from the two soda partners - for the new machine, which it expects to come out in September."
    KC's View:

    Published on: January 9, 2015

    • Starbucks COO Troy Alstead plans to take an indefinite and unpaid leave of absence from the company on March 1, with no word on when he will return. Alstead, who has been with Starbucks for almost a quarter-century, said he was taking the leave to give his family “dedicated time and attention.”

    According to the Wall Street Journal story, "A spokesman said that all Starbucks employees become eligible for a yearlong leave after 10 years with the company, and that Mr. Alstead, who joined the company 23 years ago, first requested taking an extended period off in 2008. But Starbucks at the time was reeling from a steep slump in its profits and the decision to close hundreds of stores, and Chairman Howard Schultz persuaded Mr. Alstead to stay. Mr. Alstead recently requested again to take the leave, the spokesman said."


    • Golub Corporation/Price Chopper Supermarkets announced that Robert Allen, the company's Workers’ Compensation Manager, has been promoted to the position of Director, Insurance & Workers’ Compensation.
    KC's View:

    Published on: January 9, 2015

    • Rod Taylor, the muscular Australian actor who had two major starring roles early in his career - in the George Pal film adaptation of HG Wells' "The Time Machine," and in Alfred Hitchcock's The Birds - has passed away. He was 84.
    KC's View:
    Taylor's career never lived up to the promise of those early performances, and to be honest, I always thought of him as kind of a lesser Burt Lancaster. But he's really, really good in The Birds, which remains a masterpiece of terror more than 50 years after it was made. And he's also quite good as Winston Churchill in Quentin Tarantino's Inglorious Basterds.

    And in reading his obit, I found out something I didn't know - that he is the voice of Pongo in the original 101 Dalmatians in 1961.

    In all, that's a pretty good career.

    Published on: January 9, 2015

    On the subject of the full-time legislation making its way through the Congress, one MNB user wrote:

    A debate can and will be had about the number needed to be eligible for “full-time” designation, but it’s clear that the intention was to prevent employers – in all sorts of industries -- from dropping their full-time people down from 40 to 30 hours just so that they weren’t eligible for benefits.  Altering that number will create opportunities for employers to do just that – cut payroll hours and health benefits while increasing the number of employees that can be defined as part-time.

    The other side of your statement – that only people working 40-50 or more hours will be “successful” really confuses me.  What does that mean? They’ll be rewarded and promoted because of the number of hours they punched in for? Perhaps in some companies, but the number of hours one works should hardly an indicator of any loyalty or success they may earn or receive in return.

    In this economy, often with little choice, many Americans make ends meet with multiple part-time jobs. Their success should be measured largely by the quality of their work performance. 

    Today’s economy includes over 8 million part-time workers in a variety of industries, with the retail food industry among many that are dependent on those workers.

    You state that 40-50 hours “is what it takes to be successful,” right after your quote of Ms. Sarasin insisting that full-time should be a much higher number than 30 hours. She wants a broader definition of part-time staff so as to have fewer full-timers in her industry, while you’re saying that only people working 40-50 hours can gain success.

    The vast majority of customer-facing staff in the food industry is part-time. I’m wondering what message a well-intentioned part-timer who wants to work her way up the ladder in the food industry would take away from all of this.


    On the same subject, from another reader:

    I am not sure you gave much thought to this response regarding insurance coverage for workers. Not all but certainly most employers will do their best to avoid providing health insurance to workers. I am now retired but Full-time in our country has always meant 40 hours, never more than that.Has that changed in the last few years? During my working life, management was expected to work however many hours it took to get the job done and was or should have been paid with that in mind. I was in management for the last 30 or so working years and for most of those years worked 50-60 hours a week, until the last two years. I was successful (in my mind anyway). However, most of our employees worked 40 hours for a salary and were given extra pay for any work over 40 hours or compensatory time off.  These people were ALSO successful and did great jobs. Some people work 30 hours a week and are successful, others 20 because that is there wish. In mu opinion, Success does not come in hours worked nor is it measured by anyone other than the individual. We all have differing views of success. 

    The medical insurance problems we have in this country are another issue and I separate those issues from my comments on your view of success above.

    The reason the ACA made 30 hours full time was to get more people into the insurance pool which would help lower premium costs. I am sure that many companies made sure that 29 hours was max for employees so insurance coverage could avoided. The minute the law goes to 40 you will see employers reducing some of their  workers hours to 35- 39, not management. Most management positions have medical coverage as that is a “perk” to keep good people. Look at what our retail grocery industry did slowly over the years with cashiers, stockers and other workers, reducing fill time positions to part time and you know why. benefit payment reduction. I am one of those who think we do need to go to a single payer system where everyone is covered. Not sure but I think medical bills remains the number one reason for personal bankruptcy in the United States and that should not be. No one should lose everything because they or someone in their family got sick. Of course, this is a political and ethical issue different from what success is. It is sad that many successful people are ruined because of medical issues. To be fair, my views are tinted as  I watched my step-father’s life be destroyed because of illness to three children in one year. He never recovered financially but he sure was a successful human being.


    And another:

    Of course FMI wants to raise the full time hours to 40.  They want grocery stores  to have the freedom to hire lots of part time people and not offer a job with a dependable number of hours to most of their employees.  I occasionally hire cashiers who worked at a well known chain and I learned from them that the schedule they get depends upon how available they have been beyond their scheduled hours.  So if the Front End manager has a sick out, she calls other part time cashiers not on the schedule to get the empty spot filled.  Totally fine.  However, if the part timer says no to the call, his hours are cut back in the next schedule cycle.  The store seems to treat these employees like full timers but does not want to pay them like full timers.  Punishing employees for not being willing to come in on a day off seems unfair. Of course, if they are never available to fill in, that is a problem. But that problem is often caused by the need for a second part time job....

    ACA does not imagine that 30 hours is a full time job; it just is set up to get health insurance for more people.  At my store we offer health insurance to any staff member who works 20 hours or more a week.


    As I said above, I think my comments the other day were too glib and not nearly well-thought-through enough.

    My comments about 40-50 hours reflected my feeling that I don't know anyone who is really successful who works less than 50 hours a week ... but, upon reflection, that's actually irrelevant to the discussion. We're talking about people who often want as many hours as they can get, but are being limited, often because employers prefer to have part-time workers who, they think, cost them less in the long run.

    That's an interesting perspective, because I think the opposite argument actually can hold some water. Sure, there may be lower short-term expenses attached to a part-time worker. But is there faster turnover among part-timers? And resultant higher training costs? And does this mean that the front-line people in stores who are responsible for being the face of the retailer end up being people who are less committed to the mission, more focused on finding another, better-paying job? Is it possible that when you look at the big picture, these part-timers end up costing their employers more than insurance coverage would have?

    I suspect that there are number crunchers on both sides of this discussion who would come up with statistics to support their positions. My feeling is that if I ran a store, I'd want to assemble a team, not just a bunch of part-timers with competing priorities. And I think one of the ways you do that is with benefits, and for a lot of people, that includes health care.

    I understand why all these trade associations and businesses are making this argument. But I also think that there is a good argument that it could be a short-sighted approach.




    I wrote the other day about Starbucks' new Flat White drink, which led MNB user Jason Bullock to write:

    I was in Starbucks this morning and inquired to the manager about the item and exactly what it was.  She explained it similar to your post, but she did stress that it is made with whole milk.  I am a non-fat, no foam latte drinker so I inquired if you could sub skim milk in.  She stated "Unfortunately, no".  This caught me by surprise as one thing that has always drawn me to my favorite coffee place was the ability to customize your drink to pretty much anything you want that was behind the counter.  The reasoning was to keep the intended flavor profile intact.

    It will be interesting to see how long this stays on the menu with a lack of customization options or if the mindset will change and you can get a 'skinny flat white'.


    MNB reader John J. Toner V had one, and wrote:

    It’s amazing.

    Point taken.




    We had a story the other day about how they are building an underground beer pipelines in Bruges, Belgium, prompting one MNB reader to advise me:

    Many years ago my wife and I spent part of our honeymoon in Bruges. Put this on your list of places to go w/ Mrs. Content Guy before you die. She will appreciate the fine lace and chocolate. You can stand around waiting for a pipe burst.

    Actually, my wife hates lace. Loves chocolate, though. And, bless her heart, beer.




    MNB reader Ted File had some thoughts about the list of retail rules for the new year:

    Here are the 3 elements that I would like to add to yours.

    Personality:   How do retailers/manufacturers retain the personality of their company day in and day out. "The boss is coming tomorrow" so department heads, stockers, clerks, bag persons etc.......get going and make our store no. 1.   Personality is what it is.....maybe the owners..i.e. a Dee Smith, Joe Albertson, etc.

    Consistency:   What we are today is what we need to be tomorrow.  Having walked through many retailer's stores I've found that their operations i.e.: meat looks great on Friday but what happens the rest of the week?   Clerks working stock and keeping the shelves in stock 24/7.

    Maintenance:   Floors, equipment working 24/7; checkers always with a smile and "thank you."





    And from MNB reader Kathleen Whelan, regarding the judge's decision to overturn California's ban on foie gras:

    Foie Gras illustrates everything (well, not everything) that's wrong with our society.  Take some animals who know when they have eaten enough to sustain them, and force them - painfully - to eat too much.  Then kill them and sell the foie gras at outrageous prices to rich folks who have money to burn while other folks can barely afford to eat at all.

    Ugh.


    Ugh is right.
    KC's View:

    Published on: January 9, 2015

    Thoughts about just some of the movies I saw during the Christmas break...

    There is a lovely line in The Imitation Game that, I think, sums up everything that the movie is about, both explicitly and implicitly: "Sometimes it is the people no one imagines anything of who do the things that no one can imagine."

    It is a turn of phrase that both captures the spirit of this elegant, fascinating movie about the breaking of the German's Enigma code during World War II, as well as offers a lesson to leaders - business, political, religious, or any other kind - about the importance of creating an open, nurturing environment that prizes differences rather than marginalizes them.

    Benedict Cumberbatch ("Sherlock") plays Alan Turing, the highly idiosyncratic mathematician who led a team of cryptologists assembled by the British government to break the Nazi code, an effort that most felt was critical to being able to win the war. Cumberbatch submerges much of his natural charisma to play Turing, who in additional to being brilliant and arrogant also was a social misfit; he was gay at a time when homosexuality was a criminal offense, and his personal struggles informed much of his behavior. Oddly enough, this also made him good at keeping secrets - which made him just what the war effort needed.

    The Imitation Game is one of my favorite movies of the season - rich with historical detail, beautifully directed and written, and populated with some wonderful supporting performances, especially by Knightley, Mark Strong, Charles Dance, Rory Kinnear, Matthew Goode, and Allen Leech. Unlike some period dramas, this one is paced like a thriller … despite the fact that most of the main characters are mathematicians and scientists; unlike The Theory of Everything, which also was about a brilliant yet challenged Brit, this one gives the audience a sense of the scientific process rather than just glossing over it. And it is full of twists and turns that kept me utterly captivated.

    Most of all, The Imitation Game is about how important it is not to make assumptions about anyone, and how anyone, given the opportunity, can make a contribution to a larger cause. All they require are confidence, nurturing and a sense of belief. (This doesn't just go for the people who hire Turing to lead the code-breaking effort. It also goes for Turing, who at the beginning is so brilliant that he alienates his entire team. He learns - the hard way - to reach out to them, which only makes the enterprise more successful.)

    "Sometimes it is the people no one imagines anything of who do the things that no one can imagine." Word to live by, especially if you are a leader engaged in your own kind of war. Which most are.



    I love a movie that makes me think, that creates conversation, that does not appeal to the lowest common denominator.

    Just such a movie is the Swedish film Force Majeure, which can be seen now on iTunes. I don't know the director, the writer or the actors … but the movie has prompted several days of discussion around our kitchen table.

    The setup is simple. A man who is a borderline workaholic takes his wife and two kids on a four-day skiing vacation in the French Alps. The idea is to reconnect with his family.

    One day, they are eating in an outdoor restaurant at their ski lodge, and they see what appears to be a controlled avalanche … except that the avalanche quickly gets out of control and seems about the envelop the deck where they are sitting. At the last moment, the husband grabs his cell phone and keys and runs … leaving his wife and kids behind. Everybody survives, but the decision sets up a series of conversations, discussions and confrontations that throw into question his integrity, commitment and marriage. And it isn't just his relationship that gets questioned … it is that of every other couple they encounter and tell about the event.

    Fascinating stuff, which can be seen from a lot of different angles, eliciting a lot of different opinions. (My kids found it funnier than I did, seeing in it a kind of absurdist comedy; my wife and I found it kind of sad.) And several days after watching Force Majeure, we're still talking about it.

    I recommend it highly.



    Foxcatcher is a hard movie to like, but an easy movie to admire - cold as ice, but with some terrific performances. Steve Carrell is getting all the notices as John duPont, but Channing Tatum and Mark Ruffalo are equally impressive as the Schultz brothers, Olympic wrestlers in the eighties who fell, to varying degrees, under duPont's spell. Foxcatcher is about moral and ethical corruption, and how people can't just be leaders because they declare themselves to be. They have to earn it, and work for it, and it rarely is easy. It also is about how leadership is very different from manipulation ... which is something that a lot of bosses (including a few I've known) ought to learn. Be prepared for a movie that is supremely creepy, but Foxcatcher is worth the effort.



    The Skeleton Twins is an interesting little independent film, starring the former "Saturday Night Live" stars Kristen Wiig and Bill Hader as similarly depressive twins who have not seen each other for more than 10 years, but are brought together when Hader's character, a gay out-of-work actor living in LA, attempts suicide. Wiig, despite all her own problems, takes him in, and over a period of weeks they find themselves alternately cheered and depressed by the other.

    The movie is an interesting character piece, helped immeasurably by the presence of Luke Wilson as Wiig's husband. (I've never understood why Owen Wilson is a bigger star than his younger brother.) And Wiig and Hader are revelatory - they really inhabit their characters in a way is utterly persuasive.

    The Skeleton Twins has moments of great humor, and also can be extremely depressing. But the movie, directed by Craig Johnson and written by Johnson and Mark Heyman, is a good piece of work, and worthy of your attention.




    That's it for this week. Have a great weekend ... and I'll see you Monday.

    Slàinte!
    KC's View: