retail news in context, analysis with attitude

Regarding my belief that increased wages can result in a more motivated, productive and invested workforce - a notion with which some MNB readers disagree - one MNB user wrote:

You’re not smoking anything. Being in favor of a higher minimum wage proves that you have good business sense and that you were just raised to have empathy, also good for business. Both do not have to be mutually exclusive, which is where most people go off track.

On another subject, one MNB user wrote:

Interesting story about Wal-Mart wanting to take on HEB in San Antonio.  That is a battle that has gone on for over 20 years, and I have not seen a single victory for Wal-Mart yet.  In Houston, HEB is priced lower than Wal-Mart across the board and provides a great shopping experience with excellent service.  As you often point out, a retailer needs to have a point of difference.  Wal-Mart has none in markets where HEB operates once Wal-Mart loses the price battle.  I have seen no indication that Wal-Mart possesses the operational talent to be a competitive winner in San Antonio or Houston.  Wal-Mart’s only attribute seems to be that they can open a lot of stores.

If I had to place a bet, I'd bet on HEB. Always.

On the subject of the proposed merger of Ahold and Delhaize - which I've suggested seems more focused on efficiency than effectiveness - MNB reader Tom Murphy wrote:

Over the years, I have been involved in a lot of M&A efforts, some small (125 stores from ABS to Save Mart), some large (Kroger acquiring Fred Meyer), and some international (FedEx acquiring Flying Tiger and multiple European companies) ... I am always amazed by three things:

The executives usually pop the champagne corks and sing Kumbaya when the paperwork is signed with little idea of how to accomplish what they have signed for and little realization that the easy, 1% of the effort has just been accomplished.

Executives always see financial synergies, as you noted – concentrating of savings, not growth & opportunities – maybe because they think that is the quick way to appease shareholders.

And finally, probably most importantly, executives fail to understand that success is all about cultural integration – “culture eats strategy for lunch.” (Jack Welch said that, I believe.)
In every M&A, when these thoughts have been shared, the executive response is generally…”but we are different”!  Any wonder that more than 60% of all M&A’s fail to achieve their stated objectives!

From another reader:

Totally with you on your comments about this merger and nothing be said about learning etc. from each other.

If this happens I wonder what will happen to Ahold’s new small format Everything Fresh. The first store in Philly is great. Downtown, lots of fresh vegetables, homeopathic remedies, even hardware…in a 3,000 sq. foot store. I’ve been in several times, it’s always busy with a lot of young shoppers. Good Energy, enthusiastic employees. They have more planned. But I wonder if this merger goes through….everything may just stop while the executives figure what should stay and what should go.

It would be shame to see this promising start…stop.

It would.

On the subject of yesterday's "Eye-Opener" about an interview on "The Daily Show" with retired Gen. Stanley McChrystal, one MNB user wrote:

You shared some fascinating insights from Gen. Stanley McChrystal from his new book, "Team of Teams: New Rules of Engagement in a Complex World." On the one hand, it was nice to see a military leader who "gets it"...a forward-thinking leader who is much more reassuring and visionary when it comes to an ISIS strategy than anything we hear out of our President or either political party. On the other hand, I was disheartened when I re-read your eye-opener and realized (I think I already knew it) that Gen. McChrystal is retired. 

From what I understand Gen. McChrystal was basically forced out after some unflattering comments he made came to light. However, I sure hope that the US military practices practices effective succession planning for the next generation of military leaders because we need more like Gen. McChrystal to face today's complex challenges from ISIS, Iran, N. Korea, etc. Or at the very least, I hope that the current military leadership (including our Commander in Chief) is listening to the valuable advice of Gen. McChrystal and putting him on the military equivalent of their Board of Directors. Whether it's the military or in business, don't cast off and dismiss the wisdom of great leaders after they retire.  I think there is another business lesson in there somewhere!

There is.

I have no idea whether the Obama administration uses McChrystal as a sounding board or not ... but I agree that it should.

For the record, McChrystal resigned after being quoted in a magazine article as being disappointed in the Obama administration's national security team. Whether you agree with Obama's policies or not, he is the Commander in Chief, and McChrystal acknowledged that his comments reflected "poor judgment and should never have happened. Throughout my career, I have lived by the principles of personal honor and professional integrity. What is reflected in this article falls far short of that standard."

Ironically, of course, he was succeeded in his role by Gen. David Petraeus, who later resigned from the Army to become CIA Director ... and then had to resign from that job after it became public that he'd had an affair with his biographer; later, he pled guilty to a misdemeanor charge of mishandling classified information.

My general (no pun intended) feeling is that while maybe these guys deserved to be taken out to the woodshed, they also probably deserved to be allowed to come back. (That would be the case whether the officer in question had criticized a Republican or Democratic president.) Then again, I'm not the best judge of issues of military discipline, seeing that everything I know about it I learned from The Caine Mutiny and A Few Good Men.

From another reader on the same subject:

It struck me immediately that Gen McChrystal’s diagram reflected the situation of the American Revolution; the British troops were the regimented, the colonists were the disorganized guerrilla force. How far we’ve come in two centuries to be the ones trapped in the past.
KC's View: