Published on: June 15, 2015
Regarding the decision by one business leader to offer free college tuition to the children of employees who helped him launch his company, MNB user Jim Swoboda wrote:
I find fascinating, the continual revelations pointing to companies offering more perks to attract and retain great team members. Many of the articles on increasing the minimum wage, offering paid time off, providing for tuition assistance paint the picture that these are revolutionary ideas. They are not. They have always been used when the competitive market gets tight in regards to finding great people to join their teams.
Equally fascinating watching the pendulum swing away from cost cutting to investing back into people. It is people who have always made the difference and leaders in places to make a difference seem to be now learning that for the first time. Hard to fault them. They grew up during the cost cutting 90’s and 00’s all driven by the American consumerism that was driven by never ending price wars which led to off shoring to find lower labor costs. We each, personally, have to be introspective to that point. We complain when jobs move, when wages go down, yet our choices drive that behavior as we do want to buy goods made domestically, but we do not want to pay domestic wages. Interesting paradox.Be nice, wouldn't it, if companies actually were consistent and demonstrated their commitment to employees in good times and bad? Because the people who make the good times good are also the people who help you get through the bad times. Not the cause of the bad times, which always seems to be the message when corporate leaders talk about cuts, cuts, cuts....efficiencies, efficiencies, efficiencies.
Regarding some of the meal businesses that seem to be cropping up in some many places, MNB fave Glen Terbeek wrote:
Do you remember Ukrop’s Dinner for two which had a recipe and all of the ingredients in a "Dinner for Two" branded bag. It had to be 25 years ago. If I remember correctly they offered 3 different dinners each day and they published a calendar for the month with the recipes being offered each day.
The price was not the total of all of the ingredients’ retails, but a value added price for the meal idea and pulling it together as a solution.I do remember it. And you are absolutely right - this is not a new idea, but rather just the latest iteration ... and it is amazing that mainstream supermarket companies have not jumped on this bandwagon with alacrity, but rather are allowing start-up companies, often heavily funded by financial types in love with the latest bright and shiny object, to nibble around the edges and steal some market share.
On the subject on higher wages for retail employees, often mandated through minimum wage legislation, one MNB user wrote:
Once again we seem to ignore history. Look at our manufacturing industries' history. Higher wages eventually lead to more mechanized, robotics, or technologies replacing people. Some of our retail fast food chains are already trying self-order stations. How about self-check-out stations in groceries and home supply stores? ATM’s in banks. Raise wages too high and the answer to many businesses will be replace the humans with machines/technology. The next step in many cases was to ship the industry out of the country. Raising wages and assuming all will be well now is merely self-deception. It is not that simple.Nobody said it was simple. But if you are a retailer paying an in-store employee $8 an hour, say, and that employee works 40 hours a week, 52 weeks a year, that person is making a whopping $16,640 a year - before taxes. And while I know that many retail employees are younger and more part-time, I would also point out that I worked as a retail employee in both high school and college, and paid my entire way through Iona Preparatory School and Loyola Marymount University while doing so. I'm not saying that the same thing ought to be possible today, when college is a lot more expensive, but I think the disconnect is serious.
Regarding the new 365 by Whole Foods concept, MNB user Chris Utz wrote:
I believe that Whole Foods 365 is simply a competitive answer to Fresh Thyme, Sprouts, The Fresh Market et al. who have been cannibalizing the organic market at reduced prices; plain and simple!I don't think anything is that plain and simple...and I think you forgot someone.
One MNB user wrote:
Unless I’m missing something, this concept sounds more like a “ Trader Joe’s killer” than Walmart. Good for you food, limited selection, value, all sound like what would come out of the Trader Joe’s mission statement. TJ appears to be quite successful and I’m sure that it deserves imitation. It will be a challenge for a management team with a “Whole Paycheck” reputation to take on folks with Aldi roots. “Five Buck Chuck” just doesn’t have the same ring as “ Two Buck Chuck”. MNB reader Larry Owens observed:
With that name, guess they’ll be open on Christmas.We had a story last week about Publix's continued belief that you can't make money in the e-grocery business, which has led to continued reluctance to invest in the segment. My argument in part is that the Publix customer is changing and becoming more tech savvy, and that it will have to offer this option at some point. One MNB user agreed:
Publix, the land of the snowbirds! You can see a shopper “fall of the grid” in April/May, email them in Sept or Oct, welcome back to the land of sunshine with a shopping list of their average weekly purchases last summer, select a date and you have an instant online order to pick up (or deliver) the day you arrive to your snowbird location, and lock them in with replenishment orders weekly… as a marketer, I’d love this opportunity to instantly and regularly build my online shopping! I would love it as a customer, to have everything ready for me the day I arrived.Agreed. It is an opportunity. Also a challenge, but one worth embracing.
From another MNB reader:
If Publix made these statements without any effort to research or test online channels; I would agree 101% with your comment. You only have to go back to your own archives to know that few chains have tested every aspect of online like Publix. They consistently come back with the same reply – they can’t control or “deliver” the Publix customer experience profitably outside of the store.
Many retailers are jumping into relationships with unproven partners without considering the impact to the customer relationship. To quote a famous change agent "A man's got to know his limitations". I do think online has a place in the industry – but chains who rate low on the customer experience scale may regret a focus toward at the cost of “in-aisle” sales.I totally get your point. Public would hardly be alone if it believes that e-grocery works against its decades-long quest to create a differentiated store experience, but I think that it almost doesn't matter. If customers want it, you have to offer it, or risk irrelevance. You have to figure out how to extend the in-store experience to the online environment, and use it as bait to get people into the store rather than as something that hurts the store.
At least, that's what I think.
Responding to last week's story about Aldi's planned expansion and my comment that it should scare the crap out of a lot of retailers, one MNB user wrote:
Not only should retailers be scared, national brand foods better sit up and take notice! Just walk thru an Aldi’s and see how many national brands they sell. Very very little.From another reader, John Stanhaus:
You are right, in that some people should be scared, but it goes beyond just retailers. Sure mainstream retailers are at a economic disadvantage versus discounters, who according to a 2014 Supermarket News blog post “get by” with an over 11% lower gross margin, but generate higher store contribution percentages (2.6%) and EBITDA percentages (3.4%) due to lower operating costs and overhead.
But I’m thinking about the branded CPG manufacturers. All these new stores are not going to be stocking their products. This on top of the recently cited trends, I believe Target has told CPG brands that they will be placing less emphasis on their products, many of which also are processed and go against healthy market trends.
The trend toward lean management and zero-based-budgeting at Campbell, and Heinz/Kraft is no surprise. These major manufacturers are run by smart people and they see the direction that the market is moving. Own-brands at discounters or store brands at mainstream is where future growth, especially in center store categories, will come, so branded manufacturers either have to scale down their manufacturing base to reflect the new reality, possibly providing additional manufacturing capacity for private label manufacturers, or utilize that capacity to, perish the thought, start selling store brands! It is not as difficult to sell branded and private label out of the same company as some (Conagra) might make you believe, especially after adopting some management techniques such as lean, zero-based-budgeting, activity-based-costing etc.
I understand that in Europe, where private label penetration percentages are significantly higher than in the US, such successful dual trackers are rare and are limited to large enterprises, FrieslandCampina, a dairy, and Bonduelle a vegetable processor. But so are vertically integrated retailers, while in the US, Kroger and Safeway’s manufacturing capabilities are key element to their private label success.
It will be interesting to see how this all plays out.MNB reader Bob Vereen wrote:
I started out buying just one thing at Aldi years ago, suggested by a friend. Today it is our major food retailer - quality of its private brands is outstanding; produce decent and very competitively priced. Savings are really substantial, especially on basics like cereal, milk, etc.On the subject of Country of Origin labeling laws, which in some cases are falling in the face of international treaty challenges, MNB user John Rand wrote:
A very long time ago I had an uncle who was an accomplished editor and author, and who spent a lot of his life mentoring young writers. I remember a writer who came to review a draft of a book with which he was struggling, and he said something about publishing it under a pen-name. Uncle Lester was pretty direct: “if you aren’t proud enough of your work to sign your name, you should burn the manuscript and start over”.
I totally agree with your mantras of transparency. Whether I grow grapes in Chile or herd beef cows in South America and farm fish in Thailand – I ought to be proud enough of my industry and maintain standards that make me want to “sign my work”. The same goes for ingredients and nutrition in packaged goods and whether to label GMOs and every other thing we debate.
Sign your work. Or burn the manuscript and start over.As someone who signs his work for a living, I totally agree.
And another MNB reader saw an opportunity:
Then COOL will be voluntary. What an opportunity for a retailer to "differentiate" itself.I totally agree.
