retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: June 23, 2015

    by Michael Sansolo

    It’s hardly news that bad managers can make life miserable for their employees. What is news it that apparently the worst keep figuring out new ways to do just that.

    There were a couple of interesting articles this weekend that helped reinforce the importance of good managers. First, there was a special section of the Washington Post profiling the best places to work in the Capital region. One article detailed what conditions make employees most content. As many previous surveys have shown, compensation was low on the list, trailing far behind workplace atmosphere and nurturing managers.

    The flip side of that second point was laid out in a story in the New York Times about the impact bad bosses have on the health of their staffers. Consider one small example: stressful workplaces increase the risk of cardiovascular events in workers by 38 percent.

    Managers at all levels need understand both the incredible impact they have on the lives of their subordinates and the incredible difference small improvements can make. Open communication, sharing credit and not shifting blame are small but significant steps any manager can make and the results can be powerful.

    (An easy to follow compilation of these behaviors can be found in “Mapping Management Practices that Drive Performance,” a study done a few years back by the Coca-Cola Retailing Research Council of North America. The study can be found here.)

    But sometimes seeing the negative can help show a great deal. The Times article included some of the rude behaviors subordinates see most from bosses, including: interrupting people, being judgmental of those who are different, show little interest in others’ opinions or never saying please or thank you. That last one would seem be an easy place to start if anyone is looking for some simple self-improvement.

    Worse yet, there was a list of negative behaviors people admit they use themselves, including: hibernating in e-gadgets, using jargon that confuses others, not listening and taking others for granted. Perhaps not surprisingly, pretty much everyone admitted to using please and thank you less than they should.

    Wisconsin retailer Dave Skogen made a number of points about management styles in the session he and I recently did at the FMI Future Leaders program. Skogen, an outspoken proponent of servant leadership through which bosses strive to lift up subordinates, talked about the difference of management and leadership.

    Managing, he said, is easy compared to leading. Too many managers focus on tasks, whereas leadership requires a broader view, greater responsibility and risk taking. They’re all points worth considering.

    I bet Skogen would agree with the power of good management as the building block of future leadership. Good managers build success by building their teams and getting them to succeed. Great leaders take that to an entirely different level.

    Maybe we could start at an even more basic level by accepting that good management relies on some key behaviors, especially valuing and building a team. Sure, that’s not easy, but the reverse is a path to endless problems.

    Maybe it’s time to start saying please and thank you.

    Michael Sansolo can be reached via email at . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
    KC's View:

    Published on: June 23, 2015

    by Kevin Coupe

    It was a vivid illustration of the power of social media.

    "I knew you were trouble," Taylor Swift essentially said to Apple.

    "Stay, stay, stay," Apple essentially responded.

    That's what happened this week when Swift - arguably the biggest pop star on the planet - argued publicly that Apple was not willing to pay royalties to singers whose music is not part of a three-month free trial period for its new streaming music service. Swift's position was that artists should be paid for their art - and she underlined her point by saying that Apple could not use her "1989" album on the service.

    Swift made her position public by using social media ... and the resulting attention forced Apple's hand, as the company - arguably the world's most powerful brand - quickly agreed to pay full royalties even during the free trial period.

    Variety writes: "When was the last time you saw Apple — or any corporation anywhere near its size, really — buckle that swiftly to that kind of attack, especially considering the source was a twentysomething waif?

    "It’s rare to see any Fortune 500 company move so nimbly when it comes to counteracting a potential negative shift in the court of public opinion. Commend Apple if you will, though it’s worth wondering why it even came down to Swift’s camp needing to resort to targeting the company rather than settling matters at the negotiation table before this could even get public."

    The New York Times writes that when Swift raised her objections, she said that "she was also speaking for other musicians who were afraid to speak up about the issue, and her comments found wide support in the music world."

    On Twitter, Elvis Costello reportedly called Swift "our future President.”

    Hail to the Chief.

    If nothing else, she knows how to campaign, and to use social media effectively. It was an Eye-Opener.
    KC's View:

    Published on: June 23, 2015

    Reuters reports that both Walmart and Sears said yesterday that "they would stop selling products bearing the Confederate flag, a week after a white gunman shot nine dead at a historically black South Carolina church ... The accused white gunman posed with the flag in photos online. Supporters, who fly the flag or wear it on clothing, see it as a symbol of the South's history and culture, as well a memorial to the Confederate casualties during the 1861-65 Civil War."

    The move came as "South Carolina Governor Nikki Haley called on lawmakers to take down the flag, considered by opponents to be a symbol of slavery and racism, at the state capitol grounds." Reuters notes that Target does not appear to sell any Confederacy-themed products, but that Amazon does - though they all seem to be sold by third-party providers selling through Amazon's Marketplace ... Rival eBay Inc listed over 1,000 Confederate flags and related items offered by third-party sellers on its web site."
    KC's View:
    When this story appeared yesterday, one MNB wrote to me...

    Pleasantly surprising, though depressing it takes such a tragedy to drive the change.  You'd think something representing oppression and racism would have found its way off the shelves sooner.

    You'd think. It is encouraging that the political climate seems to have shifted so quickly that many politicians seem to be lining up to remove the flag from the statehouse grounds.

    BTW ... I was curious and went on Amazon to check out its selection of Confederate flags ... and then, out of curiosity, checked on something else. You can also find an ISIS flag on Amazon ... which was even more disconcerting.

    Published on: June 23, 2015

    The Albany Business Review reports that as Golub Corporation transitions its Price Chopper stores to its new Market 32 format, it will no longer sell tobacco products.

    CEO Jerry Golub tells the paper that "cigarettes do not fit into the health-conscious identity that his company is building as it invests $300 million to rebrand itself, moving from the Price Chopper name to Market 32."
    KC's View:
    Good for them.

    By the way, I've been looking at the early reviews for Market 32, and they've been extremely encouraging. I'm looking forward to driving up to see these new stores when I get back to the east coast.

    Published on: June 23, 2015

    The Virginian-Pilot has a story about Dollar Tree's plans for Family Dollar once the Federal Trade Commission (FTC) finally approves the planned acquisition, including price cuts that get the chain back to its core competency.

    CEO Bob Sasser said last week that "Family Dollar, which sells items for $10 or less, traditionally targets urban and rural consumers with lower incomes. Dollar Tree, in contrast, has items for up to $1 and aims for suburban middle-income shoppers. Family Dollar began charging too much for some items and opening stores in suburban areas, Sasser said. Some of those suburban stores might become Dollar Tree stores after the deal is complete."

    According to the story, "Sasser described the merger as a 'transformational opportunity to serve more customers in more ways with more products.... Strategically, it ensures our future for many, many, many years to come." When combined, the companies will have a total of about 13,000 stores, and annual revenue above $19 billion.
    KC's View:
    Somehow, it doesn't feel like such an easy fix to me. Nothing is easy when there are 13,000 stores being managed. And very little ensures anyone's future for many years to come, especially in this competitive environment, with Aldi expanding and Lidl coming to the US.

    That said, I saw a lot of small towns during the past week where dollar stores seemed to be the only grocery store. And so there is an enormous foundation on which to build.

    Published on: June 23, 2015

    Fortune has a story about how Walmart is trying to compete more effectively with Amazon, "to further build its e-commerce muscles to help combat recently tepid growth in sales and traffic at its brick-and-mortar stores — especially when Amazon and others are pouring billions of dollars into their own e-commerce plans."

    The story notes that "Walmart has in recent years equipped more than 80 of its U.S. super centers to help fill online orders and speed up delivery. That’s about the same number of distribution centers Amazon operates. The retailer now also lets shoppers pick up online non-grocery orders at any of its 4,500 U.S. stores, a concession to consumers’ growing demands for convenience. And Walmart recently opened four new automated distribution centers dedicated to filling online orders, each 1.2 million square feet in size — or as big as 20 football fields."

    Four other passages from the story:

    • "Other Walmart initiatives include rolling out a simplified checkout process on in the U.S. to improve the shopping experience on mobile devices, the source of most of retail’s e-commerce growth."

    • "To compete with Amazon’s Prime — a subscription service that garners repeat trips from customers who want to get their money’s worth for their $99 annual fee — Walmart is turning to the old-fashioned price competition on which it built its empire. Earlier in June, it started testing, on an invitation-only basis, a new delivery service called Shipping Pass. The unlimited free three-day delivery service costs $50 a year, or half of what Amazon charges for Prime, which currently offers free two-day shipping."

    • "Where Walmart could prove to be a particularly formidable rival to Amazon and its AmazonFresh service, a service similar to Prime but for grocery in that new front in the delivery wars.

    "Walmart gets 56% of U.S. sales from food (or about $161 billion last year), making it by far the biggest U.S. grocer, with much more expertise in selling food than Amazon. It’s testing out a kiosk, called Walmart Pickup-Grocery, near its headquarters in Bentonville, Arkansas, that looks a lot like a gas station (see below) but is really a new way to get groceries to customers."

    • "More generally, the company is expanding its online assortment. Walmart said it will offer 10 million different kinds of items (shelf-keeping units, or SKUs, in retail parlance) online by year-end, compared to 7 million now and 700,000 just a few years ago. That is dwarfed by Amazon’s 250 million-item selection. But it’s a much bigger selection that what is available in a Walmart super-center large-format store, which typically stocks only 100,000 SKU’s."
    KC's View:
    There's no question that Walmart is going to able to grow its e-commerce business, and I continue to believe that at some point it will announce a big, fast expansion of its click-and-collect/kiosk business to an enormous number of stores around the country.

    But I also believe that the big difference between Amazon and Walmart is that Amazon seems more focused on customers, and Walmart on supply chain ... and I think that's a weakness. But I also think there's going to be a lot of collateral damage from this war...

    Published on: June 23, 2015

    Reuters reports that "fresh fruit and vegetables are the new frontline in Aldi Inc's assault on Australia's $70 billion supermarket sector, as the German discounter looks to beat the most profitable duopoly in global groceries at their own game.

    "For the first time, Aldi's Australian arm plans to ship fruit and vegetables direct from farms in Australia to its stores, according to one major fruit supplier, removing the only competitive advantage for incumbent heavyweights Woolworths Ltd and Wesfarmers-owned Coles ... This would hit Woolworths and Coles where it hurts. For decades, the duo have fought over who offers the freshest fruit and vegetables, while Aldi's main weakness since it entered Australia 14 years ago has been its lack of a competitive fresh-food alternative."

    Indeed, "the strain - from the foreign competition but mainly from Australia's sluggish economy - is starting to show on the two market leaders, which for half a century have banked more than 70 cents of every supermarket dollar spent in the country. Australia's No.1 grocer Woolworths on Wednesday warned of its first profit decline in two decades and announced the shock resignation of its CEO, as it cut hundreds of jobs as part of an restructure unveiled last month."
    KC's View:
    I would expect that we're going to see a lot more of this in the US as well, especially with Lidl coming to our shores.

    Published on: June 23, 2015

    Ad Week has a story about Starbucks' decision to close down the 23 La Boulange bakery chain locations that it acquired - in addition to the recipes and the ability to bring those products to all of its own stores - in 2012 for $100 million.

    The story says that in part it is because Starbucks couldn't figure out a way to effectively grow the bakery chain. But in fact, experts tell Ad Week, Starbucks may have been okay with that - since it still has all of La Boulange's intellectual property, and "a hundred million is not a lot of money" for Starbucks to spend in order to solve its well-documented problems with food.
    KC's View:
    To paraphrase Senator Everett Dirksen, a hundred million here and a hundred million there, and pretty soon you're talking about real money...

    And if you don;t know who Dirksen is, go Google him.

    (He's also the fellow who once said, "I am a man of fixed and unbending principles, the first of which is to be flexible at all times.")

    Published on: June 23, 2015

    The Milwaukee Business Journal reports that Wisconsin-based Roundy's, which operates the Pick 'n Save, Metro Market, Mariano's Fresh Market and Copps grocery chains, "has rolled out its newly revamped ad campaign ahead of Grand Rapids, Mich.-based Meijer's market debut" there this week.

    The campaign "plays up Roundy's 'Wisconsin-ness' - and not subtly," using phrases like "our produce has deep roots in Wisconsin. Literally," and criticizing the new competition for being from out of town.

    The story notes that "it's an effort to bolster Roundy's Wisconsin base, where Pick 'n Save has dragged down same-store sales even as the company grows its profitable Chicagoland banner, Mariano's. Roundy's predicts continuing losses in the year ahead, with a projected 0.75 percent to 2.75 percent drop in same-store sales for 2015."
    KC's View:
    The piece also makes the point that Roundy's isn't just dealing with Meijer, but also a bunch of other out-of-town competitors - like Walmart. It is going to take more than a good ad campaign to blunt their impact on sales and profits.

    Published on: June 23, 2015

    • The Indianapolis Star reports that "Angie’s List has sued Amazon Local, accusing it of stealing provider lists and other proprietary information from Angie’s. The federal lawsuit, filed Friday in Indianapolis, alleges that Amazon Local executives and other employees got access to the information by signing up as members of Angie’s and downloading provider profiles, member reviews and other information" that it is using to compete in the home services procurement market.

    • In the New York suburbs, the Journal-News reports that financially troubled D’Agostino's has closed its Rye Brook store, which was the only unit it operated outside Manhattan. It closed the store, apparently, without even notifying its landlord, and is not commenting to the media about the closure.

    • The Associated Press reports that "General Mills is dropping artificial colors and flavors from its cereals, the latest company to respond to a growing desire for food made with ingredients people see as natural. The company said on Monday that Trix and Reese’s Puffs will be among the first cereals to undergo the changes."

    Variety reports that "Martha Stewart Living Omnimedia has been bought by the retail licensing company Sequential Brands Group for about $353 million." The company's publishing properties were licensed out last year to the Meredith publishing company.

    The New York Times notes that the sale price is just a fraction of the $1 billion that Stewart's company was worth at its peak.
    KC's View:

    Published on: June 23, 2015

    Yesterday, describing it as "a point of personal privilege," I used the Eye-Opener piece to talk about the recent events in Charleston, South Carolina, and how the community's reaction to a hate crime that clearly is an act of domestic terrorism demonstrates an amazing level of faith, hope and love.

    The first email I got from a reader contained the following three words:

    Stick to business!

    I take your point. But the answer is no.

    Sure, MNB is about doing business ... but over the years it has been about a lot more, and sometimes I'm just going to write about whatever the hell I want to write about, whatever moves me.

    Sometimes it will be baseball, movies, wine, or beer. Sometimes, other stuff.

    I just hope that most folks will be patient with me.

    Luckily, some are.

    MNB reader Mark Heckman wrote:

    Well said, my friend.  We can all be encouraged and learn a great deal about the goodness of humanity by how the people of Charleston have rallied around faith and love.  Evil exists, but has no chance against good people who truly love their neighbor as themselves.

    MNB reader Tom Robbins wrote:

    Very well expressed and I can only pray that ALL of your readers feel the same.

    And, from MNB reader Jeff Totten:

    Your comments are right on the mark. Love conquers all. We must pray for the sanity and civility of our nation and leave the judging to God. Hate loses. Amen!

    As I said yesterday, I'm not that big a person. I'm perfectly willing to do a little judging right now.

    MNB took note yesterday of National Public Radio's The Salt story about how California-based Raley's is "taking a swing at the food waste problem by trying to get customers to embrace the differences" between "cosmetically perfect fruits and vegetables" and variations that are less pleasing to the eye but may taste just as good. The goal is to use product that might otherwise be thrown out anywhere in the supply chain.

    One MNB user wrote:

    Hi Kevin. Been a fan of yours since Retail Insights...I'm currently retired and live in a small town in Virginia. We have a small Food Lion, where the policy is not to give "day old" produce to humans or animals.


    We live in a rural area. Lots of animals could eat day old. Or we could even put it on our compost piles. Or better yet we might even be able to give some to the food bank. Or soup kitchens!

    I am informed it is "policy." Well, hello. This is 2015... Might be time to rethink policy.

    Might be. Attention, MNB readers at Food Lion.

    MNB reader Julia Nufer wrote:

    The quality of the produce department is a key factor driving consumers’ overall ratings of grocery stores, and loyalty to them.  If consumers see Raley’s as selling inferior produce, it could erode brand equity substantially.  This underscores the importance of a successful campaign to get consumers to “embrace the ugly”.  I’ll be curious to see the messaging Raley’s uses in its education campaign.  Seems to me it will be crucial to not only communicate that the blemished produce is good to eat, but to successfully link buying blemished produce to feeling good about yourself, being responsible, doing your bit to save the world.

    From another reader:

    Typical of such a left wing progressive organization; making assumptions that make no practical sense what so ever. Where does one start with such an initiative. OK, let’s see, I’m a supermarket chain working to prove to consumers that the produce my chain offers is better than what my competitor offers right across the street. What to do? Oh I know…I’ll offer ugly produce! Produce that typically does not grade high enough to make it to retail shelf! Hmm, how am I going to price this ugly produce compared to the premium offerings in stock today? Will it justify a higher retail? Hmm…no, probably not. How low will retails have to be to get folks to choose it over my premium offerings? I mean there has to be enough of a difference to justify the premium but fair prices I’ve been charging all these years. Will it be price that drives customers to buy this offering or will it be an altruistic motive to pay a fair price for produce that farmers typically can’t afford to pack because the return is too low? How much will I have to sell to maintain my average sales per customer and gross profit dollars?

    The reality is that the majority of fresh produce sales by grade, reputation (as in brand equity), inventory, and demand. Whether a box of apples grades Washington Extra Fancy Premium, or U.S. Fancy, the agricultural costs, harvest, transportation, and packing costs are the same, and if FOB prices aren’t high enough to cover those costs, the grower loses money and at the end of the day, they make decisions based on these returns to determine what crops to grow….But wait, I know, why don’t we just lobby congress to set a national minimum FOB by commodity, regardless of supply, demand or quality? Just like the national minimum wage?

    Wait a minute. Raley's is a left wing progressive organization? Or are you referring to the venture called Imperfect Produce that is trying to change people's perceptions and eliminate waste? Or MNB, for writing about it? Or all of the above?

    Finally, we had a piece yesterday about how Neil Young has released a new album attacking Monsanto, Starbucks and Walmart, among other corporations.

    Which led MNB user Daniel Harriton McQuade to write:

    And the 80 Million millennials said "Neil Who?"

    You're right. Poor kids probably never heart of 'Heart of Gold" or "Rockin' in the Free World."
    KC's View: