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    Published on: December 15, 2015

    by Michael Sansolo

    A few years back, as an industry executive accepted a prestigious lifetime achievement award, he observed that he likely would be the last person ever to win the award who actually knew the person for whom it had been named.

    I’ve no idea if that prediction was correct, but the implication was clear. With time, people, places and companies change and we sometime forget things we need to remember.

    There’s a special reason to bring up that moment here at the end of 2015. This year marked the end of the food retailer that once dominated the landscape like no one before or since. A&P, once the Great Atlantic and Pacific Tea Company, is no more. Its Wikipedia-entry now lists 2015 in obituary fashion, as the year of the company’s demise.

    Already there are countless people in this industry who have no personal knowledge of the company. They never entered an A&P store, never competed against it and quite possibly never gave the company a second thought because it didn’t matter to them. A&P now has been relegated to history.

    But that history should not be forgotten, even as we rush headlong into discussions of the emerging industry supercharged by the world of electronic commerce. The A&P story is one worth revisiting, even in the heavily abridged version offered by Wikipedia.

    It is an amazing story of how the company grew from nothing into a force so large that the US government kept finding ways to limit its power. The company’s history is a tale of visionary leadership using cutting edge ideas and incredible internal disciplines to grow in size and influence. At a time, A&P helped shape the entire national culture and influenced industries far from food and far from these shores.

    However, it also is a story of what happens when leadership loses its way, when succession plans are poorly thought out and short-term thinking blots out and obliterates internal disciplines. It’s a story of a company that lost focus on the cutting edge and lost its sense of changing customer needs and values.

    Lastly, it becomes a story of a company so desperate to regain relevance that resorts to grasping at strategies such as poorly conceived mergers to stem declines in sales and profits.

    And like any tragic story, A&P’s tale is complete with bad luck and poor timing that at every turn managed to overwhelm any strategic attempts the company made to revitalize itself.In other words, the story of A&P is a tale of a business empire’s rise and fall that is dramatic, instructive and sad beyond words. But here’s the thing: it’s a story that shouldn’t be forgotten because it so clearly demonstrates both the right and wrong way for a company to grow, prosper and deal with changing times.

    It could always happen again. If we are mindful of history, though, perhaps it is less likely that it will.

    In "The Lord of the Rings," JRR Tolkien wrote: “Some things that should not have been forgotten were lost. History became legend. Legend became myth.”

    The lessons of A&P's collapse are not as earth-shattering as Tolkien’s “ring of power,” but they remind us of how even the largest and most powerful company can lose its way and completely fail.

    That’s a tale that shouldn’t fall out of memory anytime soon, at the end of this year or any year to follow.

    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: December 15, 2015

    by Kevin Coupe

    Longtime MNB readers will know that we're total "Star Trek" geeks around here. Michael Sansolo and I probably have seen every episodes of every one of the TV series based on Gene Roddenberry's original concept, now 50 years old, and every one of the movies. We've also seen all the movies, and can pull out quotes, plot points and characters from all these iterations at moments that seem to call for business lessons from the final frontier.

    The third film in the reboot of the original series, Star Trek Beyond is scheduled for release on July 22, 2016 ... a date I already have marked off on my calendar. And yesterday, Paramount Pictures posted the first teaser trailer for the new movie online, ahead of its scheduled theatrical debut later this week when it will be seen before another outer space movie that will be released. (That movie is called Star Wars: The Force Awakens. Perhaps you've heard of it?)

    And because we're total "Star Trek" geeks, I'm posting the new trailer here.

    Now, to be honest, the new trailer is getting mixed reviews in social media. Directed by Justin Lin of the Fast and the Furious franchise, Beyond seems to have a looser, more action-oriented vibe ... it appears to be less serious-minded and grim than either Star Trek or Star Trek Into Darkness. It features some Beastie Boys music (also featured in the original reboot), and lots of stunts, space battles, and even a bit of classic repartee between Spock and "Bones" McCoy. The uniforms are new, and it doesn't really feel like classic "Trek" ...

    This may not be a bad thing. "Classic" Trek, I think always has been somewhat elusive as a concept. The very first Star Trek movie was written and produced by Roddenberry, but it sunk under its own weight and pretensions. Star Trek II: The Wrath of Khan rescued the franchise, and Star Trek IV: The Voyage Home was a comedy, of all things, that was an enormous hit. Star Trek VI: The Undiscovered Country was a metaphor about the collapse of the Soviet Union and farewell to the original crew that worked extremely well, but only one of the "next generation" films, Star Trek: First Contact was an unqualified success.

    I'm going to show up when Star Trek Beyond is released, perfectly willing to visit the final frontier with Kirk, Spock and McCoy ... because in the end, the best treks always have been the ones that have focused on these three friends as they go places that nobody has gone before.

    I'll hope that it'll be an Eye-Opener. And I hope it'll be fun.

    KC's View:

    Published on: December 15, 2015

    The Wall Street Journal has a story about how, "backed by vast amounts of data and powerful software, more businesses are varying prices by the day, the hour, or even the minute. Online sellers have used such tactics for years, but frequent price changes are increasingly common in the physical world, amplifying the effects of supply and demand on everything from parking spots to golf-course greens fees."

    The story goes on to say that "rapidly shifting prices highlight another way technology is reshaping the modern economy. Businesses have long used prices to smooth out demand, such as discounted matinee shows and bars’ happy hours. But the changes were often fixed, infrequent and based on intuition rather than data.

    "As more transactions move online, businesses amass more data on consumers’ purchase habits and competitors’ prices. Companies use that data, along with variables such as weather forecasts, to continually adjust prices. Online, businesses can alter prices more easily; there is no need to dispatch employees with pricing guns."

    The story features a ton of examples - from zoos to baseball games, from highways to in-flight wi-fi service - in which dynamic pricing is being employed.
    KC's View:
    I think some of the folks quoted in the story may underestimate the degree to which there could be consumer push-back on dynamic pricing, but I suspect that these reactions will be determined by the degree to which businesses appear to be ripping people off or taking advantage of them. The one thing that businesses need to keep in mind is that all this stuff is transparent ... people know what you're doing, and if you are marking things up during busy times, they'll know it.

    Some of it will seem reasonable to most people, but there will be points at which customers will say that enough is enough ... and businesses will be painted as exploitive.

    I continue to believe that the businesses that will thrive in coming years will be the ones that collect actionable data and then actually act on it ... but this ability does not give them carte blanche to do whatever they want.

    Published on: December 15, 2015

    The Associated Press has a long, fascinating and ultimately disturbing story about how "pervasive human trafficking has helped turn Thailand into one of the world's biggest shrimp providers. Despite repeated promises by businesses and government to clean up the country's $7 billion seafood export industry, an Associated Press investigation has found shrimp peeled by modern-day slaves is reaching the U.S., Europe and Asia."

    The problem, the story says, "is fueled by corruption and complicity among police and authorities. Arrests and prosecutions are rare. Raids can end up sending migrants without proper paperwork to jail, while owners go unpunished."

    The shrimp harvested by these slaves likely is finding its way into stores run by familiar companies. "Last month, AP journalists followed and filmed trucks loaded with freshly peeled shrimp from the Gig shed to major Thai exporting companies and then, using U.S. customs records and Thai industry reports, tracked it globally," the story says. "They also traced similar connections from another factory raided six months earlier, and interviewed more than two dozen workers from both sites.

    "U.S. customs records show the shrimp made its way into the supply chains of major U.S. food stores and retailers such as Wal-Mart, Kroger, Whole Foods, Dollar General and Petco, along with restaurants such as Red Lobster and Olive Garden.

    "It also entered the supply chains of some of America's best-known seafood brands and pet foods, including Chicken of the Sea and Fancy Feast, which are sold in grocery stores from Safeway and Schnucks to Piggly Wiggly and Albertsons. AP reporters went to supermarkets in all 50 states and found shrimp products from supply chains tainted with forced labor."

    This is a story definitely worth reading here.
    KC's View:
    This is a story that I think - and hope - will have legs, which means there will be follow-ups that will shine a spotlight on these appalling practices ... which inevitably will lead to customer reactions, maybe even protests and boycotts. I think retailers have to be cognizant of these possibilities, and be prepared to react in a way that shoppers find to be appropriate.

    Published on: December 15, 2015

    The Wall Street Journal reports that Toys R Us this holiday season "is still struggling with a chronic problem: running out of goods during the important holiday season."

    The story says that the company's new CEO, David Brandon, "asked engineers to design an algorithm to better predict when goods will run low. He also is filling shelves with more products—a move that is counter to the get-lean mind-set of Wal-Mart Stores Inc. and other retailers ... Mr. Brandon said Toys R Us has carved out a different position from rivals by having the broadest selection of toys. It is selling hundreds of 'Star Wars' products this holiday season, including some exclusives such as an interactive Chewbacca action figure. The company is trying to enrich the store experience with events like one in October that invited children to build and take home a Lego structure."

    However, the story also quotes Paul Berberian, CEO of Sphero Inc., maker of the “Star Wars” BB-8 Droid, described as "one of the season’s hot toys," as saying that he prefers to sell his products in Apple Inc., Brookstone and other specialty stores. “Consumers want higher quality, deeper experiences,” he tells the Journal. “Toys R Us is plastic by the pound.”
    KC's View:
    The problem, of course, is that the company isn't trying to solve this problem in a vacuum. There will, of course, be people out there who will be thrilled to go to Toys R Us and find products they want. But a growing number of people prefer to simply go on their computers and avoid the soul-draining, brain-killing experience that is a Toys R Us store.

    Count me among them.

    Published on: December 15, 2015

    The New York Times reports that the Federal Aviation Administration (FAA) has "announced new rules that will require nearly all owners of remote-controlled recreational drones to register the machines in a national database, an attempt by the agency to address safety fears."

    The story goes on to say that the FAA has "rushed to issue new rules on drones before the holidays, when an estimated 700,000 new drones are expected to be bought. Drone owners will be required to submit their names, home addresses and email addresses to the F.A.A., disclosures meant to encourage users to be more responsible, officials said."

    Of course, there are limitations to the FAA's enforcement capabilities: "A drone that collides with an aircraft would be destroyed, including the registration markings required by the new rules. And drone users who plan to use the machines for nefarious purposes may avoid registering at all."

    And, the new rules do not really address the issue of drones used for commercial delivery purposes, as championed by companies such as Amazon, FedEx and UPS.

    It will cost $5 to register a drone; failure to do so could result in up to three years in jail, or $27,000 in fines.
    KC's View:
    I love the irony of drone manufacturers objecting to the $5 fee, saying that it could inhibit the growth of their industry. I tend to think that anyone who can't pony up $5 for a drone registration probably shouldn't be flying one.

    By the way, I'd suggest to those who think that drones will be the next big thing for consumers that they should remember that hoverboards looked like a pretty good investment a few weeks ago...

    Published on: December 15, 2015

    Bloomberg reports that in the quarter ending December 6, Tesco's UK sales were down 3.4 percent, Walmart owned Asda's sales also were down 3.4 percent, and sales at Wm Morrison Supermarkets declined by 2 percent. J Sainsbury saw its sales go up 1.2 percent, while discounters Aldi and Lidl saw their sales go up 5.4 percent and 17.9 percent, respectively.
    KC's View:
    US retailers need to be watching these numbers carefully, examining what is working in the UK and, more importantly, what isn't.

    Published on: December 15, 2015

    • Walmart has responded to a recent Bloomberg Businessweek story detailing the extent to which it responded to labor protests by investing in a high level of intelligence gathering and surveillance of its own employees by suing a labor group.

    Bloomberg Businessweek reports today that "Walmart has accused labor activists of defying an administrative judge’s order by sharing private documents with Bloomberg Businessweek, which used them in a cover story about how the company combats protests. In a motion filed on Dec. 9, Walmart alleges the labor group OUR Walmart 'intentionally disclosed documents marked and designated confidential' to Businessweek reporter Susan Berfield, despite a judge’s protective order."
    KC's View:
    The problem, of course, is that in terms of public perception, it doesn't matter how the documents were released and whether any laws were broken. I'm not advocating the violation of a judge's legal orders, but the thing is, we now know something about Walmart's feelings about its employees that maybe we didn't know before.

    Can't put that genie back in the bottle. Some people will care. Others won't. But transparency wins again, even if it had to break the rules to do so.

    Published on: December 15, 2015

    comScore reports that "through the first 36 days of the November-December 2015 holiday season ... U.S. retail e-commerce spending from desktop computers ... reached $35.4 billion, marking a 6-percent increase versus the corresponding days last year. While the desktop season-to-date growth rate currently trails comScore’s 9 percent growth forecast, the benefit of an extra shopping day between Thanksgiving and Christmas vs. last year in addition to a more favorable calendar overall, provides confidence of being able to make up that ground before the end of the season."

    The analysis firm goes on to say that "Cyber Week, the week beginning with Cyber Monday, posted solid growth online, raking in $9.7 billion in desktop spending for an increase of 7 percent compared to the same week last year. This marked the fourth time ever, and the first time this season, that boasted the accomplishment of having five billion-dollar days during the work week, totaling $7.8 billion during that period."
    KC's View:

    Published on: December 15, 2015

    • The Richmond Times-Dispatch reports that Ahold-owned Martin's Food Markets "will close three of its 22 Richmond-area stores next summer." The company said that the leases were expiring "and a business decision was made not to extend the leases for these stores."

    The story notes that "the closings come as Martin’s is slated to be part of a proposed merger" by Ahold and Delhaize. "The planned merger is subject to approval of regulators and shareholders. Industry observers have said the Richmond area — with the Martin’s chain as the dominant grocer and with Food Lion’s 45 stores — would come under scrutiny and the merged company might have to give up some area stores."

    However, Martin's management says the closing are unrelated to the planned merger.

    • The New York Times has a story about the latest problem facing craft brewers - a can shortage.

    According to the story, "While the craft beer boom has benefited small breweries around the country, it has also left some scrambling for cans. The 16-ounce size is in exceptionally high demand; it’s slightly larger and has become a popular way for niche brewers to distinguish themselves from behemoths like Budweiser and Coors, which use 12-ounce cans ... Some brewers and can distributors say they started seeing a can shortage over the summer. Orders that normally took two to four weeks to fill suddenly were taking eight weeks, then 12 weeks or even longer."

    While can manufacturers are trying to address the problem, there seems to be little evidence that it will go away soon ... and so brewers are scrambling to figure out how to deal with the shortage.
    KC's View:

    Published on: December 15, 2015

    • Schnuck Markets announced that it has hired Mark Doiron - the former president of Sure Winner Foods, as well as the former Chief Supply Chain Officer at Hannaford Bros. and Delhaize Group, to be its new chief merchant. He succeeds Steve Harper, who retired earlier this year.
    KC's View:

    Published on: December 15, 2015

    ...will return.
    KC's View:

    Published on: December 15, 2015

    In Monday Night Football, the New York Giants defeated the Miami Dolphins 31-24.

    And, in Major League Baseball, Commissioner Rob Manfred announced that the lifetime ban imposed on Pete Rose, the game's lifetime hits leader who was exiled from the sport for gambling on ballgames while a player and manager, will be left in place.

    Manfred said yesterday that interviews with Rose did not persuade him that the former ballplayer was being truthful in addressing allegations about his gambling habits; one of baseball's most sacrosanct rules is that people working in the game may not under any circumstances bet on games. (It doesn't matter whether they bet on their team or against it.)

    Manfred did leave the door open - a bit - on whether Rose could be inducted into the Hall of Fame, saying that "the considerations that should drive a decision on whether an individual should be allowed to work in baseball are not the same as those that should drive a decision on Hall of Fame eligibility ... any debate over Mr. Rose’s eligibility for the Hall of Fame is one that must take place in a different forum."

    To this point, however, the Hall of Fame has maintained that being banned from baseball means being disqualified from being elected to join the luminaries enshrined in Cooperstown.
    KC's View:
    I think this seems entirely fair. I only know what I read about Rose and what I see on television, but he's always struck me as the poster child for denial ... he seems utterly without any self-awareness and not very repentant. I care less about the Hall of Fame than I do about baseball itself ... and I don't think he has any business being on a baseball field or in a front office.