retail news in context, analysis with attitude

Last week, in a story about Aldi's current expansion in Southern California's Inland Empire, MNB noted that Stater Bros. Executive Chairman Jack Brown "has urged Aldi to 'bring it on;' Brown seems to find some solace in the failure of Fresh & Easy - and Haggen - to make a dent in the marketplace. 'We’ve been here for 80 years. We’ll continue to be the No. 1 supermarket in the area'."

I commented, in part:

I would caution (Jack Brown) to be careful about underestimating Aldi, which is not Fresh & Easy and not Haggen. It is an aggressive, ambitious, high accomplished retailing machine that has done a lot of damage over the years to retailers that understated its potential impact.

There's also a basic 2016 business truism that Brown makes the mistake of challenging. Just because you've been in business for 80 years is no guarantee that you'll be in business tomorrow.

I hope that what he meant to say was that Stater Bros. has survived and thrived for 80 years by being able to meet new challenges, by having a nimble management structure that can adjust to change, and by having a customer-oriented business model that will fight for every customer dollar. Not only do I hope that this is what he meant to say, but that these things are true. Because if they're not - if Stater Bros. is bureaucratically structured, locked into legacy systems and processes, and built for the good of the business instead of the good of the customer - then they are in more trouble than they know.

One MNB user responded:

As for Stater Bros. vs Aldi ... Innovate or die.   Unfortunately, just visited a Stater Bros and felt shorted on experience, products and pricing.   Minimal acknowledgment of us as customer.   Won’t return.

Within the same day, visited a Sprouts which was not only very good on all above….. the staff were thrilled to work there and told us how proud they were to represent the stores.   Hmmmm, maybe they are on to something.   Bricks and mortar have a competitive advantage if used right.

MNB user Randy Evins wrote:

Well said......I live in SoCal and love Staters. They have the best run grocery stores in SoCal. They are also VERY old school. Aisles are FULL and faced, perishables are fresh but not quite as good a quality as Costco. They don't know who I am and prescribe to the notion that loyalty is gained at the check stand only. They are anti technology and take great pride in under-spending on anything that is not a store. That policy/structure is about to be stressed.

Aldi placed 4th in quality and service in a Supermarket News survey (right behind Publix, Wegmans and HEB). They are NOT Tesco or Haggen. In fact ask Tesco what they think about them in their core UK markets. The combination of Aldi and Lidl is ranking market share from them as we speak.

Aldi offers price and quality....deadly in a SoCal grocery market that is dying for a good operator...

And that's from someone who loves Stater Bros.

I talked last week about a new startup called Screening Room, which challenges the traditional movie business model in which most movies are first shown in theaters and then, after a period of time, are available for at-home viewing. Now, that time has been shrinking in recent years as streaming services have gained traction, and in some cases, movies even can be seen at home before being released in theaters. But not big movies, not major studio releases.

Screening Room would charge consumers $150 for a living-room device that can be used to rent mass-appeal movies for $50 apiece, for a 48 hour window) on the same day they arrive in theaters. It is controversial in Hollywood, but my argument is that it is up to studios and theaters to provide more compelling content at the multiplex, or they'll have nothing to complain about.

The lesson, I wrote, should be learned by retailers. Want to get people to not use e-commerce? Create stores that are compelling, differentiated and worth leaving home for.

One MNB user responded:

Screening Room is yet another example of “bad technology” leading to the de-socialization of America. Not to mention one more piece of technology harming brick and mortar and eliminating low pay high school/college age jobs.

It appears people won’t be happy until they can do everything without leaving the comfort of their home. Is it any wonder today’s communication (business and personal) is as poor as it is?

I don't agree on one specific point.

Technology does not harm bricks-and-mortar ... bricks-and-mortar harm themselves by not offering compelling competition.

As for de-socialization ... Mrs. Content Guy and I went out to one movie this weekend, and watched another at home. Not sure one was a more social experience than the other. We also took walks, talked with friends and family, and had dinner with our kids every night...

I think you paint with way too broad a brush.

We hard an obit for Joe Garagiola last week, which prompted MNB user Howard Tobin to write:

One of the times that Joe Garagolia guest hosted the Tonight Show included the only appearance on that show with both John Lennon and Paul McCartney.


FYI...I tried to find the video online, but apparently it is among the tapes from Johnny Carson's early years on the show that NBC deliberately erased to save on videotape and storage space.


We had an evolving debate last week that was prompted by an MNB reader who wrote an appropriately snarky email noting that the late Andy Grove, the iconic Intel CEO, was in fact an immigrant to the US who changed the world ... and that such people ought to temper anti-immigrant attitudes in the US.

There was some blowback on that, mostly noting that Grove was a legal immigrant, not an illegal immigrant, and that this makes all the difference. And there were suggestions that MNB was veering into inappropriate political territory.

I commented, in part:

I agree that there is a big difference between legal immigration and illegal immigration, just as there are big differences between how different people would deal with illegal immigrants. I do happen to think it is unfortunate when some folks describe illegal immigrants as being thieves or drug dealers or whatever ... a lot of them are anything but. And I think the current political climate actually lends itself to an anti-immigrant tone ... even legal immigrants. Where I think this could have a business impact, for example, is on legal immigrants who may be working in retail stores and who may be targeted by the less tolerant among us.

Here's what I think I know. The subject of immigration is a highly complex one that deserves far more nuanced conversation and debate than we are getting in this country. Both sides of the political aisle are, for the most part, staking out positions and not budging, because they think that this is how elections are won. They may be right ... in which case, we're all screwed, because that certainly is not how you govern. And winning elections these days seems far more important that actually governing.

If you think this does not have an impact on the conduct of business, I think you are mistaken.

One MNB user wrote:

I think the point (people) are making is that Grove came here to be an American. He assimilated. He didn’t rape when he got here. And I’m guessing he didn’t study bomb-making prior to his arrival.

If you don’t think a non-nuanced view of illegal immigration can win an election, you have real eye-opener in store.

Maybe.  On the other hand, when we start bragging about being non-nuanced in how we see the world, we'll be guilty of epistemic closure on a grand scale.

One other thing. It seems to me that there are plenty of illegal immigrants who come to the US and never commit a rape, never build a bomb, and do the best they can to assimilate. And there are legal immigrants (and even people born in the US) who do commit rapes, do build bombs, and feel completely unassimilated.

We have to figure out as a nation how to deal with both, and all the people who fall in between the two extremes.

That's what's called nuance.

From another reader:

Seriously?  People are upset over this?  I took this solely as someone being sarcastic and probably anti-Trump.  Not for one instance did I believe this was someone actually writing you to complain about Mr. Grove being an immigrant from Hungary.

The original correspondent was being snarky to make a point.

And from another MNB reader:

Maybe it’s just me……but I absorbed your printed comments from your reader regarding the passing of Andy Grove as being completely tongue-in-cheek and they made me smile.   Once again, you have proved to be a source of (I hope) civil discourse on a subject that is not limited strictly to the grocery business.  

Even if we look at immigration policy strictly from an economic perspective, one thing is very clear:  there are too many jobs in the US that we would never fill with legal residents if we sent home all the current residents of this country who are considered to be here illegally.   There are millions of jobs here that existing residents refuse to fill which immigrants will happily take as a place to start.   We can debate for months the reasons why those jobs won’t be filled, but the fact remains that there are hard-working people elsewhere in the world who would risk their lives to get here and take those open positions as a way to establish a new home in a democratic society.    Without those indefatigable people, our country’s economy would not have had the ability to grow in the manner that it has since the end of World War II, making us the envy of every other nation in the world.

The term “immigration reform” shouldn’t be referring to actions such as building a wall around our country.  Instead, it needs to refer to the work the government must to do to improve the process of screening immigrants and helping them enter our country at a measured pace.   Will the government make mistakes and allow someone to enter who shouldn’t be here?   Absolutely.   Do you make errors at your job?   I know I make errors every day….but I also attempt to minimize them, correct them, and learn from them to be better in the future.

We need to allow our government to do the same if we don’t want our liberties restricted going forward in ways that the Founding Fathers could never have imagined.

Compare and contrast our society to a more closed one such as Japan where they allow few immigrants…..the Japanese have had limited economic growth for years, they have a rapidly aging population with fewer and fewer young people to support and replace their retirees, and they are currently proving they can’t generate economic stimulus strictly through the actions of its central bank.    If you are old enough to remember the first transistor radio or first imported cars from Japan, you can recall the concerns that our politicians exhibited at the time that Japan’s postwar economic growth and innovation was going to lead them to surpass us as the world’s largest economy.   Clearly, that never came to pass.

Unless you are a Native American, we are all immigrants or descendants of immigrants; we do not deserve to exhibit the hypocrisy of closing off or severely restricting future legal immigration opportunities for others.

And from MNB reader Jesse Sowell:

Kevin -- Your closing comments were terrific. I started to try to call out the points you made that I especially appreciated, but then realized that would be all of them.
I read MNB every day because of the industry news and insight you provide. I look forward to reading it every day because of writing like this.

Well said. Keep it up.


And, I got an email from the MNB reader who started this whole thing with his original email:

I see I hit a nerve.
It wasn’t hard.

A ton of nonsense on this issue of course, and made worse this particular election cycle. I am just glad to have been able to contribute a moment of snarkiness.  Never underestimate the value some of us find in using you for outlet therapy and a form of primal screaming ... Anyway, thanks for the platform and the many issues you raise ... Never stop. You have created something special with MNB. I may never get over being envious, but then it is totally rooted in admiration.

Well, I appreciate that. I have no intention of stopping ... in part because I really don't know how to do anything else.
KC's View: