retail news in context, analysis with attitude

Got the following email from MNB reader Victor C. Farr:

I enjoyed your piece on the Washington Post Article which states how 50% of store managers are using a "gut feeling" when managing store inventory.

I do agree with you that good store managers need to have insight and an understanding of what will sell and when it will sell, but more importantly I think the article points out the lack of innovation in the food industry. With companies like Amazon now getting into the mix, it will be impossible to compete if retailers rely on a store manager to manage inventory levels.

I was fortunate to be apart of USC Marshall's Food Industry Management (FIM) program this past spring and the Capstone group I was so lucky to be a part of researched this very topic - Automated shelf replenishment. 

In case you are interested, here is a video of our presentation at the WAFC convention for your reference: .

Now I am not saying the solution presented is the perfect answer to everyone's problems but it touches on certain operational aspects of the industry that must be addressed.

In summary, I believe the existing players within the food retail industry are going to suffer if investments are not made in technology. New entrants to the industry, like Amazon, are certainly making a dent.

Agreed. (See "The Innovation Conversation," above.)

Responding to Michael Sansolo's piece about business lessons that can be learned from NBC's coverage of the Summer Olympics, MNB reader Tom Murphy wrote:

Michael hit the nail on the head, but did not come down hard enough of the primary difference between the BBC & NBC…the BBC allowed their audience to curate their own experience.  Infinitely more of those than NBC could ever have discovered or delivered…that is the real message for retailers!

But another MNB reader thought Michael was a little bit harsh:

If it was necessary, you could probably label me as a "millennial cord-cutter".  I gave up on my cable subscription more than a year ago for a more cost effective portfolio of streaming services (Hulu, Amazon Prime, Crackle, TED, Youtube, etc.).  My daily news source is a free news channel on my Roku from CBSN and my guilty pleasure is a subscription with to (painfully) watch the Philadelphia Phillies.

I was concerned with what access I would have to the Olympics when they came around, but I must admit that I had access to stream every Olympic event via my Roku streaming source and the NBC Sports/Olympic channel.  I was able to enjoy watching whichever event whenever I wanted, right through my Roku - Handball, Fencing, and Water Polo were among my favorites – and if I wanted to watch the live primetime coverage with NBC, I could watch that too.  My friends and I had watch parties through our streaming services and sometimes even streamed to our laptops through the Olympics website at the office.  I could watch old matches over again (like replays of Phelps' gold medal races), or fast forward through parts of a basketball or volleyball match I didn't want to watch.  It was a beautiful thing.
I wouldn't argue that NBC's primetime coverage was disappointing, untimely, and drowned in endless backstories.  But from my perspective… as a millennial cord-cutter… someone with no daily access to a traditional cable network… I was more than pleased with the access to the Games in Rio, and can't wait for PyeongChang.

At least one MNB reader is unhappy with Macy's announced plans to open on Thanksgiving an hour earlier than it did last year:

I have shopped at Macy's every year for Christmas.  I do not have any friends or family in retail at Macy's.  But with this news they are staying open on Thanksgiving, tearing up the families of employees for that one day of an assured family gathering, they are officially on my #$%#$% list and will not see much business from me this season.  I will go out of my way to buy elsewhere.  It is unconscionable, greedy, shortsighted and outright stupid management decision. I hope they have sullen employees that day and their sales project the face of those employees.

REI took a position on Black Friday last year not to be open sending their employees to enjoy the day (AND THANKSGIVING) and they got at least $4-500 dollars of my Christmas shopping for the noble and gutsy act.  I went there first to reward them.  Shame on Macy's!

Responding to our coverage of the New York Times story about how Walmart seems to achieved cleaner, higher-performing stores by paying employees better, MNB user Joe Axford wrote:

Refreshing to see Walmart putting associates and customers first, not Wall Street. Your line from the past, "treat your associates as assets, not liabilities" really resonates in today's business world, KC.

Even a broken clock is right twice a day.

But another MNB user wrote:

I can tell you that this is not happening at the large Northeast chain I work for, where we are treated as liabilities, not assets. It's all about cutting labor, not training associates to be future managers and ambassadors for the company.

And from another reader:

While I agree with the premise, I think this is a very simplistic way of looking at a complex issue.  There are obviously diminishing rates of return.  You can’t pay all the Walmart employees $30 an hour and expect to make more profit.  So what is the right balance - that is different for every person. Secondly, how long does it take for a retail employee to become complacent?  Equity theory (Adams 1969) would suggest that once an employee realizes he/she is doing better work and making the same pay as the co-worker who is just getting to go along for the ride, the original employee backs off their extra effort.   
In other words, you cannot reward everyone the same for different levels of work and expect sustained long term results.  It may take more management training to recognize, but here is a novel idea, let’s try rewarding those that give the extra effort and stop treating everyone like a number.

I have no problem with that, though I do think in many cases the floor has to be higher just so people can survive.

Another MNB reader is less than impressed with Walmart:

Let me get this right?  Wal-Mart is now following the strategy that Costco has had in place for many years (one of the few retailers growing comp each year...) and now they're getting a similar result?

"Slow follower" would be seem an appropriate label.

A fair point.

On another subject, MNB reader Dean Balsamo wrote:

Several years ago after Lidl first announced their interest in coming to the States, I began reaching out to them – to their German headquarters and later with the first CEO they’d named for this country.  Around that time one of the Lidl executives based in Europe was quoted as saying they needed to go more upscale in their offerings.
Of course I kept tracking Lidl news so we’d be ready to make a proposal. I noticed that in the UK Lidl has made a big thing out of having more gourmet and upscale offerings in general.

And if you’ve followed the various presentations Lidl has had to make to the cities-like Richmond, VA for instance-where they intend to open stores you see that on average Lidl is looking at stores in the 30-35,000 sq. foot range - not the usual small, hard discount format. I would say they have more upscale features planned. Their staff in this country from what I’ve been able to glean is overwhelmingly on the young side so I’d expect some more contemporary aspects to their merchandising and stores here.

And MNB reader Bob Vereen wrote:

As a regular Aldi shopper, I can report that the company has been promoting organic products heavily for more than a year, and increasing its emphasis and assortments almost weekly.  It seems to be promoting them more aggressively than Kroger and Walmart.  Also, low-cal products under Fit & Active label.

Finally, Todd Hale had a thought about my infatuation with the Echo/Alexa system from Amazon:

You are sounding a bit like Joaquin Phoenix who fell in love with an “intelligent operating system with a female voice” in Her.

Have your wife and kids been looking at you any stranger than normal?

No stranger than normal. But they give me strange looks all the time.

And by the way, I really liked Her when I saw it. And I don't even want to think about how much time I'd spend talking to my Echo if Alexa had the voice of Scarlett Johansson.
KC's View: