retail news in context, analysis with attitude

Got the following email following up on a discussion we had earlier this week that compared the Mariano's takeover of Dominic's stores in Chicago with Haggen's takeover of Safeway/Albertsons stores on the west coast:

The point of the comparison was to illustrate how Mariano’s is taking over those stores - which of course Mr. Mariano knows well since he was their President at one time-came in and did something significant to let people know these were now under the Mariano’s banner.

The best analogy I can use is real estate. Anyone who owns a home, anyone buying one or selling them as private person or real estate agent knows there are certain things address to enhance the value of the home.

Some of these are “curb appeal, bathroom and kitchen.” That was the point about comparing Haggen and Mariano’s. The latter understands there are  specific things you address in order to hit the right buttons with a prospective buyer - the customer you’re trying to attract and keep - in order to make a great  impression.

The people overseeing the roll out of the “new” Haggen stores in Southern California seem to be unaware of the equivalent kind of considerations as they apply to a grocery store.  When Mariano’s took over the Dominick’s they made them their own through the various perimeter strategies they adopted. It had less to do with utilitarian measures than aesthetic enhancements which also delivered new and improved services and product offerings that demonstrated a new regime was in charge, one that is giving you a more exciting shopping experience backed up of course with knowledgeable, enthusiastic store personnel.
Despite the signage above the converted Haggen stores, in my opinion they failed to make these new stores their own. They certainly aren’t like the original ones up in WA which do have things that establish a Haggen identify through signature looks like the display of Washington State produced spirits that are arranged behind the check stands  in one store up there. Or the flowers lining the entrance which is an A frame like shape speaking to the native architecture of the Northwest…etc.

Regarding the "reinvention" of Sam's Club by Walmart, one MNB user wrote:

The real issue with Sam's is they can't really stay focused on their customer.  If you look at Costco they are focused on their customer, delivering what the customer wants,  or having a great ideal of what the customer is looking for.  Merchandising is flat at Sam's there is no wow factor and at best they present their product in a Kmart fashion compared Costco.  I do agree that they are more reflective of BJ as a club than of Costco.  Sam's is in that ugly spot of  "who is my customer" the business person or lower end. This is where the merchandise tells the story, and what it screams they have given up the Costco customer all together.  When you give up competing with the leader in the market place and try to copy the #3 in the market you just have no hope of being top dog.  Sam's has been giving up ground for years to the competition hopefully they will wake up soon, it really is a question of leadership of which they have a short supply.

From MNB reader Mike Freese:

Not one of these initiatives addresses two major problems with Sam's Club.

Their out of stock situation is so severe that at times you would honestly think they are getting out of the meat and seafood business.

And as a frequent shopper of Costco, comparing the customer service in the two chains is dramatic. In Sam's they have at most 2 check lanes open with no help unloading your purchases. At Costco, at least 4 check lanes open with someone emptying your basket(s) and smiling and engaging the entire time. And if you need to find and associate in a Sam's to direct you to something you are looking for…..good luck. At Costco, you find many associates who literally walk you to the requested item.
If my closest Costco wasn't 340 miles away, I would never shop at Sam's Club.

Following up on our story about how US airports seem to be moving toward allowing Uber to operate there, MNB user Tim McGuire wrote:

I think your conclusion of "consumers want what they want - deal with it" is simplistic.  The existing taxi regulations were put in place to protect the consumer from unsafe or unscrupulous operators - for example, requiring taxis to be inspected to make sure they are safe; requiring vehicles and drivers to be properly insured; requiring fares to be fair and not take advantage of people who needed to rely on the service.

Uber wants to innovate, and that is great - but they aren't just changing business practices (which I'm al for) but have effectively declared that laws don't apply to them.  No authority inspects the Uber vehicles to make sure they're safe to be on the road.  No authority checks the licenses and driving records of their drivers. Uber says they check all those things and everyone should just trust them to be good. The ultimate arrogance is Uber's insistence that regulators and passengers should "just trust that we have sufficient insurance" but refuse to prove to authorities that they have any insurance because their top-secret insurance policy is such a competitive advantage that only 4 people in the world are allowed to know how it works.  How do you think it will work next time you get pulled over for a traffic violation and you tell the police officer "trust me, I have insurance"?  Should we let food manufacturing plants tell safety inspectors "trust us, those ingredients are safe"?  There are lots of examples of consumers not getting what they want because it's not safe - not safe for them, not safe for others around them.  Motorcyclists want to ride without helmets.  Drivers want to drive without seat belts.  Just because consumers want it doesn't make it right.

Now does that mean I don't want Uber to be available?  Not at all.  But they need to play by a logical set of rules - proof of insurance, proof of safety of the vehicles and the drivers they use.  Hard to make that sound like an unreasonable restriction on a new business model.  Then we need to solve one other issue, which is tougher because there's lots of money involved.  Taxi licenses were sold by local governments to taxi operators in return for the right to be the only providers of that type of passenger service.  Those licenses in many cities are very expensive.  Allowing Uber (or Lyft, or any similar service) to compete for that business without paying for a license makes the competition unfair, and opens the cities up to thousands of lawsuits from license-holders who see their business devalued by the government not protecting the exclusive business rights they sold with the license.  Someone has to figure out how to either:  1.  Compensate the license-holders for the loss of the exclusive rights they paid for; or 2.  Restrict Uber and others from operating without a license.  Otherwise it's like a retailer signing a lease with the exclusive right to be the only grocery store in the mall and then the landlord changing their mind and letting 3 competitors build stores in the same mall - imagine the lawsuit there.

I'm a consumer - I love Uber.  It's a fast, convenient, reliable service.  But we can't just say they're allowed to play by a different set of laws than anyone else because they're cool guys from Silicon Valley.  Change the laws, or shut them down.  That's the "deal with it" that is needed.

On another subject, an MNB user wrote:

The $5.5 billion dollars that the banks have to pay for “Currency Manipulation” is a rounding error for these big banks. RBS, CHASE, CITI, JP MORGAN, etc. The punishment for bad behavior was way too lenient. Ditto for what happened in the 2008 meltdown. When are going to learn that we cannot tolerate the behaviors of the these gigantic financial institutions? They pretty much control the world financial markets and have way too much power. Personally, I have been with a much smaller financial institution for a long time and have developed personal relationships with the people at KEY Bank.

Regarding Staples, one MNB user wrote:

First, I just wanted to comment on the Staples insight from Friday. I actually tried to shop at Staples for moving supplies last week, but ended up leaving empty handed because I thought everything there was 3xs more expensive than other places and the atmosphere was horrible… Maybe I don’t know proper moving item costs, but bubble wrap was $20, tape was $10, and boxes were around the same…I can get boxes for free from a grocery store and just use newspaper and save $40. I think the atmosphere had a lot to do with me leaving empty handed as well. At Target the store is nice, upscale, clean, and has bright lighting so if something is more expensive it makes sense to me because I trust in the company and the quality of the product. I walked into Staples and it was dark and dirty, if they aren’t putting money into their own stores to make them nice, why would I trust that their product will be of good quality.  It doesn’t surprise me that they are having to reanalyze their business tactics.

Regarding Fairway's poor performance and my reaction to it, one MNB user wrote:

Kevin, after reading the Fairway CEO's statement, I had the same thought that this was a company focused around financial performance rather than attracting customers and enhancing their shopping experience.

Not a way to succeed, IMHO.

And, regarding our ongoing "Millennial Mind" discussion, one MNB user wrote:

Always amazing to me that particularly the Millennials are “so busy” doing all their most important stuff, yet have time to check their Smartphone’s when using some of their precious time in a grocery store…and then demand “speed of light” service at checkout. Equally interesting the Millennials are also the group struggling financially, yet the Boomers (with the money) are under marketed too.

Guess what. They have different priorities than you do. Than we do.   
KC's View: