retail news in context, analysis with attitude

There are a bunch of emails that I've received over the past week or two that didn't make it onto MNB, and I thought this was a good time to catch up.

On the subject of Best Buy and the fact that the majority of the people on its top management team happen to be women, one MNB user wrote:

This has been bugging me since I read this article with Best Buy and their recent hiring of women in their senior mgmt. I have been in this retail world getting real close to 4 decades now. When I started out in the stores and then at HQ’s, when interviewing I always looked for the person with the skill set, and the personality that fit the position to be filled. I never based anything on if the person was male or female or of color, if that person was capable for the position they got it. Maybe I am too much of a glass half full person, and I’m going to go with Best Buy had that same thought of mind and hired the right person for the job. So I wonder now why any type of racism needed to be added to this article in the first place. Are we simply getting out of control with the increasing politically correct world we now live in?

I reject the notion that by noting the absence of black people in senior management the original article was being racist. It was just a simple acknowledgement that "diversity" is complex, and that companies need to be aware of it and maybe not pat themselves on the back too much or too soon.

Regarding the ongoing controversy about transgender bathroom access in North Carolina and elsewhere, one MNB user wrote:

It boggles my mind that this transgender bathroom issue is still being fought over. It seems to me that there is a really simple solution. Most places have a "family restroom" these days. You know the one where you go in as a single occupant and can lock the door.

Stores just need to have one of those available and make it clear that anybody who doesn't feel comfortable sharing the restroom with somebody has the family restroom option.

From MNB reader Ben Loy:

If an individual identifies with a gender other than the one endowed at birth and dresses in accordance with such gender identity I do not see a problem with such and individual using the public restroom designated for use by their gender identity. I would really find it unnerving if someone entered the men’s restroom dressed as a woman if I were using such facilities. However, if an individual choose to dress as their birth gender then they should use the restroom designated for their birth gender. Most men’s and women’s public restrooms have stalls which should afford some privacy. Additionally, most states and cities have laws that address the use of public restrooms and if a person who appears to be a man enters a restroom designated for use by women then that individual could face charges irrespective of a company’s policies.

Another MNB reader had a thought about the fact that Target finds itself in the middle of this controversy:

Who would even use a bathroom at Target?  As a guest, I have never seen such disgusting looking doors.  Next time you are exiting the restroom, look at the filth on the door (Maple Grove, MN)!  I wonder if the CEOs bathroom looks like that…

From MNB reader Jackie Lembke:

Out of curiosity I checked on the history of public restrooms segregated by gender. In the US this did not occur until the late 1800’s because of lack of facilities for women in the workplace. I find the whole issue tiresome and a lot of noise about nothing. How many women have used a public restroom designated as “Men” when the only “Women” restroom is full, the line is long and the need is urgent? If you are concerned for the safety of your child or yourself, don’t go alone or send the child alone. I believe we have larger issues to deal with than which restroom to use. I am more concerned with the fact that student debt is so high that entry level jobs even at the professional level do not offer enough income to support one person let alone a family. To me that is much scarier than who is in the stall next to mine.

Ah, student debt. I also got email about that piece.

One MNB user wrote:

The ONLY debt which you can't walk away from via bankruptcy in the US is student loan debt .  An individual must demonstrate earnest effort to repay the loans for 10 straight years before the debt can dismissed.  Not true for banks, car companies, supermarkets, or presidential candidates.  And the artistry of the colleges and banks is that people (students and parents) don't actually see/feel a bill until 6 months after graduation.  That's when it begins to become real.  A colleague of mine has a daughter who graduated from college last May.  She finally got a job making $38,000.00 per year.  Her loan payments are over $1,400.00 per month.  Almost half of her pre-tax income is going to student loans.  New car?  TV? Vacation? Good luck.  And this is with her for at least 10 years.

From another reader:

The issue with college debt and linking that to the plight of millennials having less $ to spend in the future……I think you were addressing the symptom vs. the problem. The symptom is debt/ability to pay/impact on future disposable income. The problem is the choices that they and their parents made to get them into the financial mess in the first place. A four year degree is no guarantee of employment (e.g. your daughter –congrats on that). And, there are options available: junior college, get a job and work while going to school, trade school, etc. The premise that student loans are unavoidable is a myth (and remember that one of the few recession-proof industries is 4 yr colleges). Your comment about government attention to help with this – just look at our national debt -- don’t get me started! Mix in some millennial impatience and instant gratification, and you have a mess.
Let’s teach our kids how to make good choices about financial responsibility, saving for goals (how antiquated, right), hard work, and setting reasonable expectations for their success. I would hardly paint millennials as victims, although I do agree that the ability to afford a college education is a huge challenge for many families.

And another:

I live in Iowa, which ranks in the top eight states for the highest level of student debt held by its college graduates.

While going through the process of helping two children select a college, we found very little guidance when it came to the topic of borrowing money to pay for school.   Finally, we had an advisor at private school share his philosophy regarding student loans:  they told students to not borrow more than what they would expect to earn as a first-year starting salary in their field.    If the student was going to be an English teacher, they would not exceed $30K in loans.  If the student was going to be a pharmacist, they would not exceed $100K in loans.   He felt confident that rule of thumb would prevent the student from immediately being overwhelmed by loan payments after graduation and (in extreme cases) a student could live at home one additional year and have the majority of the debt paid off before going out on their own.

I’m guessing there are lots of graduates out there who would have benefited from that kind of information before they started college.    Whether it be consumer debt, home mortgages, or student loans…..our society is very quick to help us borrow money when needed but not as quick to help us manage the debts we incur.

From MNB reader Ken Wagar:

I sure wouldn't argue directly with your thoughts on the impact of college debt, it is a real and a serious issue but at the same time, in my 67 years I have watched significant parts of each generation face financial obstacles and/or limitations yet find a way to prioritize their purchasing in a way that spends the money where it brings them the most satisfaction. That doesn't mean it's the smart choice always but they do make choices. Often food and housing are major parts of that. For others it may be a fancy car, a bass boat, exotic vacations or any number of other things.

My guess, and it is a guess, is that food will remain very important to millennials and they will continue to focus some significant dollars there. They may eat different things, it's highly likely they will support lower price retailers, etc. but if they are going to require greater information about their food, refuse GMOs, support fresh food delivery services etc., there is a good chance they will be spending more for the food they buy than earlier generations.
They will always find a way to buy or lease the latest version of the technology they have grown up with and I suspect they will find a way to eat pretty well also.
Obviously this is completely separate from the fact that those providing food to them will have to make significant changes in the way they go to market.

From MNB reader John Phillips:

Your comments struck a nerve with me. Having put 3 kids through Northeast private colleges (over the past 8 years) I have observed with great interest what I feel is a real shell game with private colleges and their price lists for student services, rights and privileges.

My kids, like yours, are leaving school debt free but I see the strain in my kids' friends, who have substantial loans and are trying to figure out how to manage all of their living costs (and hopefully save a bit) over the next few years.I had 2 kids attend the same private university and their costs have risen 12 % since the first child started in 2010. I just received another price increase letter from this university for a 3.5% tuition increase and a 3.0% residential increase in the 2016/2017 school year. I wrote the dean a letter expressing concerns for these increasing costs and the viability for them (in light of domestic flat wage growth and a stagnant US stock market). As expected I have yet to get a response. This particular Catholic school has a fine academic standing but is lacking in the quality of student housing and food service (which I pointed out to them).

The cost/benefit here has reached a breaking point. Kids are leaving schools with grown maturity, increased skills and competencies and are well educated but they are challenged to secure viable employment that match these skill sets.They are also deeply in debt and are in a financial spiral they may never get out of. Private colleges need to take more responsibility over these costs given present circumstances. For instance a quarterly P&L showing how tuition and room and board are being spent and how schools are seeking to raise quality ( Food Service) at the same time as cutting costs would be one thing in the right direction.

Hopefully Hilary or Donald will place this important topic on their platforms. I won’t be holding by breath on this one.

Me neither.

From another reader:

One of the underlying problems I feel,  is the fact that we are now in the times of instant gratification and people do not plan for the future.   I realize that college has gone up tremendously from 30 years ago when I attended, but how many parents today plan for their kids’ college or instill upon their kids the means to learn to save to afford going to college? 

One could make the argument that there are more financial vehicles available today for households to save for college education than ever before but are they being fully utilized?  Are kids being taught in school the future value of simple compounding of money and what it could purchase in the future instead of buying the latest Apple phone? Who says you have to attend an expensive college anyway?  Also I can’t help but shake my head when I hear the amount of money being spent on degrees that are so limitless they verge on being worthless or requiring grad school just to have that individual to become qualified so they can find a job which means more debt.  I remember when the kids coming out of school with debt were in the medical field after 8 + years of schooling, at least there was a payoff point in the not too distant future them, unlike some of the crazy degrees you hear of now. 
Advice to kids today would be go into the trades, you are going to make a whole lot of money and you won’t be in debt.

When I was a little kid, my Uncle Larry told me that if I wanted to have the best job on the planet, I should become a night watchman - they get paid and since nobody is around, they get to sleep during the night. Which I think illustrated my Uncle Larry's lack of ambition more than anything.

I don't think everybody should go to college. But I think if we as a nation are going to compete in the global economy, we have to find a way to make more education and better education available and affordable to more people, not fewer.

MNB reader Mike Nichols had a comment about another story:

couldn’t help but notice your comment about the new Walmart two-day shipping service. You said, “What Walmart is doing makes sense, and it illustrates the degree to which Amazon is setting the rules of the game, challenging its competitors to play the game as well as it does.”

That comment strikes me as being out of character with, if not outright contradicting, your usual position. You typically say that companies should not get sucked into playing by their competitors’ rules; they should differentiate themselves by playing their own game. Now you are saying that it makes sense for Walmart to play by the rules being set by Amazon. I’m sure you have a deeper point that reconciles these seemingly opposing positions. Care to elaborate?

Another reader made a similar point:

This also illustrates Walmart's mistake. By playing according to Amazon's rules, they can never expect to be better than Amazon - by definition, the best they could ever achieve is parity. If Walmart were to wipe the slate clean and start with how the shopper wants to shop, they would no doubt identify several ways to define their own go-to-market strategy, instead of using Amazon's.

I guess I'd refer you to the quote from Scott Thompson, CEO of ShopRunner, that we had in "The Innovation Conversation" on Wednesday: "You’re crazy if you compete against Amazon and you don’t recognize they are bigger, stronger, faster ... They’re playing their sport on their field with their referees and their fans." The thing is, you have to play their game to some extent if you're going to be in the e-commerce business, just because they've become the standard ... and then you have to differentiate yourself by innovating around the edges until you can come up with the single, big game changer that allows you to reset the rules.

On another subject, from MNB reader Jeff Reinartz:

I was going to stop at a Chipotle in Rochester, MN last Sunday, but I opted not to when I pulled in and found the parking lot full and a line of people out to the door waiting to place their orders. Granted, it was around 12:30-1:00 in the afternoon, but at least at that Chipotle you'd have never known there was a problem. I was glad to see it.

Consumers are giving them a Mulligan. Not sure if they'll get another one.

Responding to the story about San Francisco's decision to require health warnings on soft drink ads, one MNB user wrote:

Totally disagree with San Francisco requiring the health warnings for soft drinks. Control of soft drink consumption, as much as possible, should be a parental function. If anything, there should be warnings on video games, televisions and internet devices for children under 12 that when they open those devices says “It’s a beautiful day in the Bay Area, go out and play!”

I commented that it seemed to me that the warnings will counteract to some degree the fantasies created by millions of dollars in advertising for soft drinks, which prompted one MNB user to write:

Come Kevin, are you kidding me? Soft drink companies deserve this because they create a “fantasy world”?  What do you mean by that?  That they simply invest in the ubiquitous practice of advertising?  What advertisement and messaging have you seen that does not offer some consumer need that is aspirational?

If that is your criteria for the need for government intervention, you must have a very long list for who’s next…

We had a story the other day about a report from the National Academy of Science concluding that GMOs are safe to eat. MNB user Jeff Weidauer responded:

I agree that this report probably won’t solve anything, as both sides are firmly entrenched in their beliefs, and no quantity of facts is likely to change anyone’s position this late in the game. The major problem with GMOs is really no longer the safety or lack thereof – it’s the ocean of rhetoric from both sides, and the resulting distrust from consumers. The default position outside the industry is that GMOs are bad, either inherently or due to the pesticide use they allow. Either way, it’s a bell that can’t be unrung. And the industry’s perceived unwillingness to be transparent about their use has only fanned the flames of that distrust.

MNB reader Gary Loehr chimed in:

I don’t see how scientists, or anyone else, can make sweeping conclusions about GMO’s.  It seems to me that there are so many different applications of the science that each would need to be evaluated on an individual basis.  The idea that GMO’s are good or bad seems to oversimplify a much more complex issue.

And regarding the new government ruling extending overtime pay provisions to millions of salaried employees, one MNB user wrote:

This rule will have no affect on our salaried workers. We will just figure their hourly rate based upon their current salary with their previously scheduled 45 hours and have them punch the clock. With the labor market as tight as it is currently, it is another waste of time by Obama and company.

And I'm sure your salaried employees will love and respect you for it, and feel an ever-deepening investment in the success of your company.

On another subject, from MNB reader Tom Murphy:

While the demise of Sports Authority certainly can be blamed on a myriad of factors, one of the key causes was that SA tried to build its multi-channel customer experience on the cheap…resulting in a miserable experience that eventually destroyed credibility impacting both store and e-commerce sales.

A large number of retailers have failed to upgrade their technology foundations and operational practices for 10 to 15 to even 20 years.  They then try to cobble together a customer experience based on human intervention, work-arounds, and quite frankly, hope!  Basic building blocks for enterprise inventory and enterprise order management, cross-channel supply chains, singular merchandising and pricing practices…as well as updated core technologies such as POS and wireless networks, were ignored in favor of the “shinny object” of the day, e.g., mobile apps, in-store kiosks, etc.  The underlying infrastructure and operating processes could not support it.
This is similar to ignoring any maintenance on your house for 20 years, and then trying to spruce it up on the cheap…the foundation crumbles, the pipes are rusting, and the wiring is deteriorating.  And there are a lot of retailers, particularly in the grocery and department store segments, that continue to roll these dice.  Stay tuned for more…

Another MNB user had some thoughts about the impact e-commerce had on Sports Authority:

Another example of the evil know as Amazon putting thousands out of work and contributing to the de-socialization of America. Certainly Amazon is not going to add to their payroll to off-set this latest round of (mostly) low wage job cuts. Not to mention the collateral damage caused by the large vacant space in the mall and the damage to the other mall retailers in terms of foot traffic….Can the Gap be far behind?

Evil? Really?


Funny that you don't blame Sports Authority for being unable to compete in a changed retail environment. They were built for yesterday ... not today, and certainly not for tomorrow.

Nobody is evil in this scenario. Just good at their jobs, and not so much.

I got a number of emails about what will happen to Sports Authority Field at Mile High in Denver now that the company is shutting down, and they all were like this one, from MNB reader Dave Duley:

A great chance for one of Colorado's legal marijuana companies to buy the Broncos field naming rights….After all, it is 'Mile High'.

Finally, we had an email yesterday from MNB reader Chuck Jolley that took exception to a characterization made by another reader, who said that millennials ought to be referred to as the "snowflake generation," because "they melt in the face of any heat, they cannot be faced with any opinion that differs from what they are spoon fed by the liberal professors and an even more liberal media. Chuck wrote:

Spoken like a true old fogey who has reduced himself to standing on his front porch and yelling at the neighborhood children to get off his damn lawn.

Well, that original reader had a response:

Maybe you and reader Chuck Jolley should understand where the snowflake comment came from. My statement is based on the fact that colleges are having to create "safe spaces" so students can go someplace where they won't hear anything they disagree with. The comment comes from hearing of universities that have traumatized students because someone wrote the word "Trump" in chalk on the sidewalk. The comment comes from seeing students shout down any speaker that comes to campus that they don't agree with (if the speaker even gets to speak).

I'm not the old guy yelling "Get off my lawn." I'm the old guy yelling, "Life isn't always going to be fair, and everyone you meet isn't going to agree with you - face it and get over it."

I think you think less of colleges and college students than I do.
KC's View: