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    Published on: May 16, 2017

    by Michael Sansolo

    Her name is Shelby and in just two minutes of interaction she demonstrated to me exactly what the future of retail competition is going to demand.

    Shelby had no way of knowing that I would write about her or that this would follow a week’s worth of discussion here on MNB about Kate’s recent column on employee interactions. Serendipity is a wonderful thing.

    Here’s what happened. My wife, daughter and I were on a road trip and overdue for a rest stop and lunch. Our choices were limited when we hit Phillipsburg, NJ, on I-78 and pulled into the easiest roadside choice: McDonalds.

    We did one thing different, with each of us ordering one of the Mickey D’s new “signature” sandwiches. And if this column were just about this new offering, I’d say this: McDonalds is trying, but not hard enough. We had three different items and they were good, but none of us would rank them above Five Guys, Smashburger, Shake Shack or the other quick feeders giving McDonalds fits.

    Suddenly Shelby interrupted our meal, carrying a tray of samples of the new sandwich sauces. That was surprise number one: sampling and suggestive selling at McDonalds!

    Then, a few minutes later, she came by to ask what we thought of our sandwiches and if everything was okay. We gave some quick feedback on the meal and I raised a serious complaint. You see, I had ordered some fries and barely got any thanks to my two larcenous companions.

    Two minutes later, Shelby returned carrying a small bag. “Close your eyes ladies,” she said to my wife and daughter, who looked on quizzically. Then she handed me an order of piping hot fries.

    Now let’s think about all the aspects of this.

    First, Shelby made a roadside stop memorable with a single small order of fries. I have been eating at McDonalds for 50 years and I don’t recall ever getting anything for free. In fact, I don’t recall ever remembering an employee’s name there once. Shelby changed both those realities.

    But whoever runs that franchise also demonstrated something just as extraordinary - the power of a personal connection to lift up even a McDonalds meal.

    McDonalds, as we know, is built on efficiency. To permit a staffer to walk the eating area handing our samples and talking to customers runs contrary to that efficiency model in every possible way. Yet Shelby was accomplishing multiple goals, starting with introducing customers to new and more expensive menu items. The sandwiches will rise or fall based on taste and value of course, but without trial they are guaranteed to fail. Sampling builds that trial.

    And by roaming the eating area she is doing something that nearly all retailers need consider and value. That is the importance of using some of that labor saved by technology to create connections and experiences for our customers. The cost of even giving away an occasional small order of fries is trivial if it results in repeat customers.

    In fact, if someone at McDonalds is reading this, I’d suggest they start a new position called “Shelby” in every restaurant and follow this model.

    One last thing: I obviously don’t live anywhere near this McDonalds, but Shelby’s impact won’t go to waste. Thanks to her, I plan to visit a few more franchises to check out the entire sandwich line and, more importantly, to see if anyone else has their own Shelby.

    After all, she thought I deserved a break that day. And she gave me one.

    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: May 16, 2017

    Article Kevin Coupe

    Content Guy's Note: This week in Dallas, at the Executive Leadership Forum held by the Produce Marketing Association's Center for Growing Talent, retail and supplier executives are gathering to focus on Strategy, Culture and Talent - the goal is to equip them with insights and perspectives about the workplace that can help them lead their companies to new levels of success.

    One of the speakers charged with helping them transition to a greater understanding of how to navigate a changing workplace is Seth Mattison, founder and Chief Movement Officer of FutureSight Labs ... and I had a chance to engage him in a dialogue about these issues before he went off to Dallas ... allowing those of us not lucky enough to be at the Center for Growing Talent's Executive Leadership Forum to get a taste of what the conference has to offer.

    KC: It seems to me that one of the core challenges of leading an organization these days is dealing with the generational chasm that often exists, and that can be reflected in how people of varying ages view culture, politics, technology and work-life balance. Sometimes this can be reflected in how people dress (a subject you address on your website) and sometimes in the extent to which they use technology tools. So my first question is, what responsibility do leaders have to “manage down,” and try to understand the proclivities of the next generation of employees, and do what extent should they simply say, I’m the boss and you have to meet me on my terms?

    Seth Mattison:
    As owners, operators and leaders of organizations, you carry no responsibility to learn about, understand, and meet the next generation of talent where they are. However, I don't know how well that will serve you as we move toward a world where 50% of the workforce will be comprised of Millennials by 2020. Not to mention the fact that your customers are evolving at the same rate. Understanding Millennials and Gen Z, is essentially a practice in understanding the future of our business.

    I also think we like to make a bigger deal out of the "demands" the younger generations are making. Most of the things they're looking for, work-life balance, work that matters and impacts the company and community at large in positive ways, transparency and clarity on decisions happening in the business, flexibility and openness to new ideas and ways of doing business, and a chance to impact the organization in a meaningful way... who doesn't want those things?! 

    With that said, as leaders we have a responsibility and the opportunity to set any expectation around attitudes, values, and behaviors that we believe are important to the culture that we want. Our job is to make absolutely certain that our employees have 100% clarity around our rules of engagement. Including where we draw the line on debating and questioning leadership’s decisions and requests. 

    Get clear on your expectations right out of the gate and then hold people accountable to them.

    KC: Younger people, especially millennials, often are criticized for wanting more out of the workplace - they expect to be engaged and rewarded and recognized with greater frequency than people of their parents’ generation. I have to admit that as I think about this, I understand that this can be a challenge … but I’m not sure they’re wrong. To me, this is a less a matter of “everybody gets a trophy” than it is a case of “if you’re not going to allow me to contribute, I’m going to go someplace where I can … and yes, I expect to be recognized/rewarded for my efforts.”  Again, I’m not sure this is somehow a worse attitude than being willing to work for years, for small annual wage increases, and to be patient about career growth. What do you think?

    I couldn't agree more with you, and, as I mentioned, I've never met anyone that didn't want those things; the challenge for prior generations is that they simply didn't have the influence and the numbers to demand better. They dealt with a "get with the program or hit the bricks" type environment and in turn responded as such.

    KC: “Innovation” and “disruption” are two words thrown around a lot in these sorts of events, but I think most companies are molded into rigid forms that are designed to resist both - and sometimes genetically engineered to destroy disruptive antibodies before they can threaten the status quo. Can you give me an example or two of companies that have managed to transcend such a situation?

    Example 1: Berkshire Hathaway HomeServices Ambassador Real Estate.

    BHHS-Ambassador Real Estate earned an impressive ranking on Entrepreneur’s Top Company Cultures list, a comprehensive list of U.S.-based businesses exhibiting high-performance cultures. They placed 12th in the large company category. The Omaha, Neb. brokerage was also the only real estate firm in the large company category to crack the top 30 on the list.

    While these awards are for culture, I think it speaks directly to the fact that BHHSARE CEO Vince Leasey has created an environment where change and transformation is not only embraced but also encouraged. Not only have they embraced Millennials and the digital transformation that has left many real estate firms scratching their heads, Vince has re-imaged the real estate brokerage business by tapping the disruptive power of teams and team selling. Teams and team selling is a concept that, while talked about a lot in the real estate game, is very rarely embraced and virtually never executed well.

    Teams typically don’t work in the Real Estate game because it’s traditionally been a dog-eat-dog / loan-wolf type profession. Everyone is competition, even your colleagues carrying the same company banner. Not in the world that Vince has created.

    Example 2: Sparks+Honey.

    Sparks and Honey is a marketing and advertising agency with offices in NYC and LA. While there are many exceptionally creative agencies operating on Madison Ave., no one approaches the game with such open collaboration as S+H.

    And by open I mean literally open. Every single day S+H opens their doors to creators and makers, thinkers and influencers, experts, leaders in industry, the eclectic, diverse, and culturally curious.

    As it states on their website and as I learned firsthand while visiting their offices in April, “We reach out to the vast community of fascinating minds exploring our constantly changing world as we consider the cultural context shaping what people think, feel and do. Together we build and iterate, imagining, innovating, designing and executing as one.”

    Every single day S+H opens their doors over the lunch hour to “outsiders” where the Sparks and Honey team, along side thought leaders and the intellectually curious join together for one of their famed “Daily Culture Briefings,” a rapid-fire session covering 40+ cultural signals from the previous 24 hours, sparking new thinking about the now, next, and future.

    What impresses me most about these sessions is the radical level of openness that took place as they talk about client projects, new ideas, and transformational trends playing out in every vertical they were serving. But what if somehow someone from the competition snuck in? So what? There are more then enough good ideas to go around.

    The two biggest drivers for both of these companies and cultures speak to the next question you’ve asked, both companies, from Madison Ave in NYC to prairies of Omaha, operate from positions of humility and abundance. They believe there is always more to learn and there is more than enough to go around.

    KC: What do you think - and I concede this calls for a massive generalization - is the greatest weakness that most business leaders bring to their companies?  What do you think is the greatest strength?

    Very simple... they struggle with operating from a position of humility and abundance.

    Humility allows them to be open to new ideas and ways of doing business and gives them the freedom and permission to say "I don't know," which is required to innovate and grow today. If you can't say I don't know, you can't grow! 

    Abundance manifests in a culture when leaders create an environment where people believe there is more than enough to go around. In turn people share. People pour into one another. They look for ways to help and support. They know that when they help each other succeed, they all succeed. In cultures where this does not exist, the opposite occurs: hoarding.

    This absolutely has to start with leadership and if these two values are in place, they create the highest probability of the greatest transformation for the business, but it starts with leadership.

    KC: I think I have an understanding of how leaders can create a culture when they are starting a business from scratch … but when you speak at PMA, your audience will be largely made up of organizations that have existed for a number of years. So, I’m curious:  How does one recognize that one’s company has a culture problem?   And how do you remake a culture when things have gone bad or even have gotten toxic?

    Recognizing you have a cultural problem, in my experience, is never hard, you can feel it in the air, it’s changing an existing culture that requires serious serious commitment.

    First and foremost, we all have to own the fact that culture is a reflection of leadership. If we don’t like what we’re seeing, we need to take a long look in the mirror. Its starts with us.

    Once you’ve acknowledged that, you can move on to the second step, which is getting clear on what culture means to you and the organization. I find in my work, most leaders have a difficult time clearly articulating what culture means to their organization and it’s impossible to change a culture if you’re not clear on what it even is.

    To be clear, here is my definition of culture: The formal or informal, agreed upon, attitudes and behaviors that are either rewarded or corrected inside an organization.

    Key words in that statement: agreed upon.

    Do your people know, and have you clearly communicated to them exactly the attitudes and behaviors that are most important to you, and are you holding each other accountable to them? We make it complicated but it’s actually some pretty simple steps taken consistently every single day.

    I have leaders write down one or two attitudes and behaviors they want to see in their culture that would make a positive impact on turning the energy of the place around.

    Leaders have to start embodying these attitudes and behaviors. They have to start talking about them consistently every single day so that they become known. Recruit influencers that are committed to them as well. Hold each other and the team accountable to them. If someone isn’t living these new values, they get one chance to course correct, if they can’t get on board the decision to part ways is pretty easy.

    The most important point to remember: culture is a reflection of leadership.

    KC: So finally, when people leave your session at the Executive leadership Forum today, what actionable steps do you expect them to be able to implement to be better leaders when they return to their companies?

    We can’t lead others without first being able to effectively lead ourselves. Most people operate from a position of reaction. From the moment the alarm goes off we’re reacting to a digitally charged world that’s moving toward us at a blistering pace. This pace of change and transformation puts us on our heels and into a state of survival and protection of the status quo.

    In this session we’ll unpack new perspectives on what’s causing some of these fundamental shifts in the world of work and give leaders specific strategies to respond to change, overcome fear, embrace new ideas, leverage new communication channels, articulate vision, and harness the power of present moment awareness.

    KC: Sound like Eye-Openers to me...

    You can learn more about PMA's Center for Growing Talent here.

    KC's View:

    Published on: May 16, 2017

    The New York Times (among other publications) has a story noting the 20th anniversary of Amazon's initial public offering, pointing out that if you invested $10,000 in Amazon at the beginning, it'd be worth $5 million today.

    It has been a ride with more than its share of bumps. And failures. (Anyone remember its smartphone?) But...

    "Bezos has an authentic, legitimate claim on having changed the way we live," the Times writes. "He has changed the way we shop. He has changed the way companies use computers, by moving much of their information and systems to cloud services. He’s even changed the way we interact with computers by voice: 'Alexa!'

    "Along the way, he has bought — and fixed — The Washington Post, one of the nation’s premier journalistic institutions. And through his aerospace company, Blue Origin, he has invested billions of dollars in the race to space, a onetime hobby that, if successful, could change the world much more profoundly than free one-day shipping."

    Through it all, Bezos seems to have been remarkably consistent in his philosophy, strategy and tactics, and the Times quotes from his first letter to shareholders: “Because of our emphasis on the long term, we may make decisions and weigh trade-offs differently than some companies. We aren’t so bold as to claim that the above is the ‘right’ investment philosophy, but it’s ours, and we would be remiss if we weren’t clear in the approach we have taken and will continue to take.”

    Terrific story ... and you can read it in its entirety here.

    By the way .... it also is worth noting that, as Re/code reports, while "it took Amazon 18 years as a public company to catch Wal-Mart Stores in market value, but it took less than another two years for Amazon to be worth twice as much. On the 20th anniversary of its IPO, Amazon’s market capitalization stands at $459 billion while retail rival Walmart’s is at about $228 billion."
    KC's View:
    It will not be long before I get emails from a couple of MNB readers who will say that if Amazon indeed represents the future, then it is a future in which evil has trumped good, in which machines and algorithms have supplanted people, who are viewed as disposable.

    I know this because I always get these emails after I run pro-Amazon stories. I understand it, because the future can be scary. But I fundamentally disagree with it.

    There are plenty of evil executives and companies out there, but I don't think Amazon is one of them. I think its view of the future creates major changes in how and where and when people shop, which in turn implies major changes in how and where and when people work. I continue to believe, though, that much of shopping does not represent the heights of human ambition and endeavor, and to the degree that Amazon frees us to do other things (go for a jog, walk the dog, play catch with our kids, read a book, cook a meal with a spouse, fool around), this is a good thing.

    Sure, there have been bumps in the road. There will be more, and potholes, too. But as long as we go forward, in an aspirational way, that is a good thing ... and Amazon has been a very big part of that.

    Published on: May 16, 2017

    The Wall Street Journal this morning has a story about how Walmart is "bracing for the arrival" of Lidl, the German discount retailer that plans to open some 20 stores here by this summer, even as another German discounter Aldi, which already does business in the US, "plans to spend $1.6 billion to remodel and expand 1,300 U.S. stores and build 650 more by next year."

    The Chicago Tribune reports this morning that Aldi plans to spend $180 million of that to remodel "130 of its 150 Chicago-area stores by 2020 - part of a broader effort to move its no-frills model into modern times."

    The Journal story notes that "Wal-Mart executives have been laying the groundwork to compete, working to hone store-brand product selection, lower some prices and get the basics right, like speeding up checkout lines, its chief executive, Doug McMillon, said in an interview last month ... Wal-Mart stores need to be as convenient as possible to compete with discount retailers, said Mr. McMillon. To that end, the company is testing a system that lets shoppers scan products with a smart phone while shopping to bypass registers. It is also testing express lines at the pharmacy and money order counters."

    It is not an unfamiliar battle for Walmart. "With nearly $100 billion in sales and around 10,000 European stores, Lidl and Aldi have eaten into large European grocers’ territory and sales with low-price, popular store brands and fresh produce," the Journal writes. "In the U.K., where Wal-Mart’s local Asda chain already competes with Lidl and Aldi, Asda sales haven’t grown in the past 13 consecutive quarters. Aldi and Lidl now command 12% of the British market, growing steadily while Asda, Tesco PLC and other local grocers’ shares have fallen, according to Kantar Worldpanel."

    This isn't only a Walmart problem.

    "Kroger executives have visited European cities where the discounters operate to learn how other retailers have fought back," the Journal writes. "Kroger, which operates under the Harris Teeter banner near Lidl’s planned Southeast stores, will continue to cut prices and make sure its store brands can compete with the discounters, Chief Financial Officer Michael Schlotman said.

    "Procter & Gamble Co. , Nestlé SA, Unilever PLC and other consumer-goods companies count on Wal-Mart for millions of dollars in annual sales, so many are worried that price competition among retailers could squeeze them as well. One major supplier to Wal-Mart is considering offering distinct products—for example, a different size or flavor than Wal-Mart carries—to Lidl as a way to avoid a pricing battle with Bentonville."
    KC's View:
    I've written often here about how I think there will be a lot of collateral damage in the Amazon-Walmart-Kroger wars, and I think the same goes for the battles that will be created with the Lidl invasion and Aldi expansion.

    Now, let's be clear. Aldi has been in the US for decades, and has only been able to generate a one percent market share in the US. There's no reason to think that this will change overnight, nor that Lidl will be able to achieve sales levels that have eluded Aldi.

    But I do think that one of the things that both companies can do is create a lot of noise and change some consumer expectations, forcing other companies to respond by cutting prices, which will mean lower margins and probably, in some cases, cutting costs, which could lead to layoffs.

    I heard an expert on Lidl say recently that the thing that makes it most dangerous is that it is a private company with incredibly deep pockets - that if it wants to compete in the US for a century and lose money the whole time, it can.

    Fasten your seat belts, as Bette Davis said in All About Eve. "It's going to be a bumpy night."

    Published on: May 16, 2017

    The Wall Street Journal reports on Target's continuing timidity when it comes to online and digital offerings, as the profit-challenged retailer scales back its ambitions even as competitors (Amazon, Walmart, Kroger, for example) "invest heavily to diversify their online offerings."

    The Journal writes, "The Minneapolis-based retailer has revamped some e-commerce projects, eliminating an in-house startup and implementing new initiatives to save on shipping costs. It has also cut ties with digital partners like Curbside in favor of developing its own programs, and walked away from prospective deals, including an Arizona grocery-store chain (Sprouts) and online service, according to people familiar with the talks."

    After outsourcing its online operations to Amazon and then ending that relationship, Target "built a new infrastructure for its website after experiencing technical problems during busy shopping times.

    "Target has begun to centralize decision-making for digital projects. Earlier this year, it eliminated an in-house startup that was developing a marketplace for third-party sellers. The platform, internally called Goldfish, was to feature products from outside sellers and function separately from, according to people familiar with the project. Such marketplaces account for a substantial portion of the merchandise now sold on and"

    The timidity and indecision has had an impact: "Its online business generated about $3 billion last year, accounting for 4.4% of total sales. Digital sales grew 27% in 2016, falling short of Target’s goal of 40% growth."
    KC's View:
    Sure, Target is said to be playing with the idea of a curbside pickup program, but it just seems like it is being timid at a time when bold action and progressive thinking isn't just called for, but an absolute requirement for survival. Compare its approach to the Amazon's approach for more than 20 years, and what Walmart is doing in terms of major investment and culture change. With every day that passes, it is going to be harder to catch up. Soon, it may be impossible. (And that's probably when Edward Lampert will offer to buy Target and return it to past glory.)

    Published on: May 16, 2017

    The National Grocers Association (NGA) is out with its 2017 Independent Grocers Financial Survey, and here are some excerpts:

    • "Independents struggled to grow dollar sales in 2016 given the deflationary and highly competitive marketplace. Independent operators rated competition, led by supercenters, supermarkets and limited assortment stores, as their highest concern to growing sales and profitability. This is followed by healthcare costs and compliance, and local, state and federal government regulations. In a tough marketplace, sales declined for many retailers, with an average decrease in same-store sales of -1.62%. However, when adjusted for deflation, sales were flat compared with 2015, at -0.3% versus -0.4%, respectively."

    • "Independent grocers carefully managed inventory, assortment and margins. While deflationary conditions allowed for some margin relief in meat and deli, fierce price competition led by some of the nation’s largest chains resulted in margin pressure for other categories. Overall, the total store margin was stable at 27.13% in 2016."

    • "Controlling expenses remained a key focus in 2016. Expenses were largely unchanged from 2015, totaling 23.04% of sales in 2016. Labor and benefits remained the largest expenses, reaching a new record of 14.84% of sales. Lower unemployment resulted in rising store labor costs (12.63% of sales) and higher staff turnover, which averaged 48.9% among part-time and 17.1% among full-time employees."

    • "Dollar sales declines combined with flat margins and expenses led to a decrease in net profit before taxes in 2016, at 0.98% versus 1.44% in 2015. EBITDA was much stronger, at 1.85%, down from 2.46% — indicating that independents are still cash flowing. The profit leaders, measured as the top 25th percentile in net profit before taxes, averaged 4.70% in net profits. They actually improved their performance in 2016 and widened the gap between them and the other retailers. The profit leaders tend to operate slightly larger stores that averaged a greater number of weekly transactions, at a higher transaction size. Profit leaders focused on fresh, with a higher sales allocation hand in hand with higher margins. But they also focused on managing inventories, shrink and reinvesting into their businesses while minimizing long-term debt."
    KC's View:

    Published on: May 16, 2017

    DC Velocity reports that "crowd-sourced, last-mile parcel company Deliv has launched a service called Deliv Fresh to serve the grocery e-commerce sector with same-day delivery."

    The Deliv pitch suggests that grocers have two choices: "They can join marketplaces like Instacart and Amazon Prime Now, which take ownership of the customer transaction, or they can offer same-day delivery from their own branded sites, powered by last-mile companies such as Deliv.

    "By launching its new service, Deliv hopes to convince more grocers to choose the second option. E-commerce companies that use Deliv Fresh can get food to their customers faster, allowing items to maintain ultimate freshness and require less bulky and unnecessary packaging. In addition, Deliv's service allows omnichannel retailers to leverage their stores as local distribution centers and delivery hubs, Deliv says."

    According to the story, Deliv Fresh already "provides same-day service to grocers, meal services, and other perishable e-commerce providers such as FoodKick by FreshDirect, GetFedNYC, GreenBlender, Plated, BloomThat, The Cheese Store of Silverlake, Plum Market, and Eataly Chicago. The company currently operates its core service in 18 markets and more than 100 cities, providing same-day, last mile delivery services for retailers and businesses including Macy's, Best Buy, Kohl's, and PetSmart."
    KC's View:

    Published on: May 16, 2017

    • The Boston Globe reports that a "federal judge approved a $7.5 million settlement Monday in a class-action lawsuit against Walmart that found the retail giant violated gender-discrimination laws for years when it denied spousal benefits to same-sex couples ... The lawsuit was filed on behalf of a New Bedford woman by the advocacy group GLAD. The settlement was based in large part on US Supreme Court rulings affirming the rights of same-sex couples to marry and, in an earlier ruling, their entitlement to federal spousal benefits."

    A Walmart spokesman said that the company was "happy both sides could come together to reach a resolution . . . We will continue to not distinguish between same and opposite sex spouses when it comes to the benefits we offer under our health insurance plan."

    Reuters reports that "two former Wal-Mart Stores Inc employees have filed a lawsuit accusing the retailer of treating thousands of pregnant workers as “second-class citizens” by rejecting their requests to limit heavy lifting, climbing on ladders and other potentially dangerous tasks.

    "The proposed class action lawsuit was filed in federal court in Illinois on Friday by Talisa Borders and Otisha Woolbright, who say that until 2014, Arkansas-based Wal-Mart had a company-wide policy that denied pregnant women the same accommodations as workers with other disabilities. The class could include at least 20,000 women and possibly up to 50,000 who worked at Wal-Mart while pregnant before the policy change, according to the lawsuit."

    According to the story, "The company in a statement provided by spokesman Randy Hargrove denied the women's claims and said Wal-Mart's pregnancy policies 'have always fully met or exceeded both state and federal law.' The company said a separate anti-discrimination policy it maintains has long listed pregnancy as a protected status."
    KC's View:

    Published on: May 16, 2017

    ...with brief, occasional, italicized and sometimes gratuitous commentary…

    Crain's Chicago Business reports that "Jewel-Osco has submitted an offer and becomes the leading candidate to purchase 19 Strack & Van Til and Town & Country grocery stores in Indiana and 'certain other assets' of Joliet-based Central Grocers, the companies said today ... The proposed sale comes two weeks after Central Grocers filed for Chapter 11 bankruptcy and announced it would lay off about 550 workers in its Joliet warehouse."

    The story notes that "with a bid of about $100 million, Jewel, a subsidiary of Boise, Idaho-based Albertsons, will serve as the "stalking horse bidder" in a court-supervised sale for the grocery stores, which will be sold as going concerns. The proposed purchase price includes $70 million for the properties and about $30 million worth of inventory, according to a bankruptcy court filing."

    • In upstate New York, the Daily Gazette reports, Walmart has decided to close down a Walmart Neighborhood Market that has been open less than four years, citing a number of factors "including poor financial performance."

    There's a Price Chopper virtually across the street that I'm told continues to do very good business. It should be heartening to traditional retailers everywhere that it is indeed possible to do business successfully and compete against the Bentonville Behemoth.

    USA Today reports that Anheuser-Busch InBev is saying that it plans to invest as much as a half-billion dollars in its US operations, with a goal of making fresher beer, saving on shipping costs, and be more environmentally conscious, "as it grapples with nimbler craft brewers."

    The company also is trying to reverse a negative sales trend, as its US sales have dropped "between 0.5% to 1.5% annually over the last several years," the story says.

    • Go figure. A bricks-and-mortar retailer showing significant sales increases happens to be one that actually sells stuff like bricks and mortar.

    CNBC reports that Home Depot had Q1 sales of $23.89 billion, on same-store sales that were up 5.5 percent. Home Depot's net income climbed to $2.01 billion, from $1.80 billion during the same period a year ago.

    • The Daily Herald reports that Sears Holdings is suing One World, the Chinese company that makes its Craftsmen tools, accusing it "of attempting to break their supply agreement."

    According to the story, "The suit, filed in Cook County circuit court, said its agreement was signed in 2013 and remains in effect through 2018. But China-based One World, which has operations in South Carolina, has been attempting to break the contract and reduce Sears' supply because it said it has 'inadequate assurance' that Sears will continue to pay for the products, the suit claimed."

    I don't know the legalities of all this, but it seems to me that One World has every right to be concerned about Sears paying its bills. I have to admit, by the way, that I'm a little surprised to find out that Craftsmen tools are manufactured by a Chinese company.

    CNBC reports that Tesco has committed "to using 100 percent renewable electricity by the year 2030 ... Tesco said that since the historic Paris Agreement was reached at the end of 2015, it had been working with external partners to set new 'science-based targets' to help it become a zero-carbon business."

    According to the story, "Tesco said that in addition to its aim to source 100 percent of its electricity from renewables by 2030, it had set the interim goal of 65 percent renewable electricity by 2020. Stores in the U.K. and Ireland will get 100 percent renewable electricity this year, it added."

    Interesting that even as some countries - actually, only one country - considers walking away from the Paris Agreement, there are companies that have decided that it is good business to work within its limits. In fact, they don't see the Paris accord as limiting ... they see it as a map to more sustainable businesses.
    KC's View:

    Published on: May 16, 2017

    Responding to yesterday's Eye-Opener about a Marks and Spencer aspirational ad campaign, MNB reader Bob Wheatley wrote:

    I’m guessing here, but I would not be surprised if Marks and Spencer doesn’t invest early and often in consumer insight research. Because this ad is right down the pipe of a fundamental point about how we engage with people: The best communication is a mirror of the consumer’s own interests and passions.

    Right at the center of this ad is what? The human being they wish to reach. And in a moment of marketing unselfishness they’re earning a place in the consumer’s life. How? By recognizing and celebrating the desire for a higher quality and more meaningful life.

    Want a deeper relationship with your customer? Then imbue your brand with deeper meaning.

    Yesterday, responding to a story we had about a disappointing visit to Kroger's Main & Vine store, one MNB reader expressed some disappointment about what Kroger has done with Mariano's.

    Prompting MNB reader Joe Davis to write:

    One of your readers was bemoaning the presence of a toilet paper and detergent display by the specialty spices section at Mariano’s.  Perhaps the store manager was just showing some merchandising savvy.  We call them ‘occasion-based bundle offers’ at our company – multi-category displays that bring together related products.  Throw in some Pepto Bismol, along with that toilet paper and detergent, and you have a great bundled solution for the ‘adventure in cooking with obscure spices gone horribly wrong’.

    I am easily amused, by the way.

    Me, too.

    But another MNB reader wrote:

    What people are missing is that is more than just looking nice and perfect.  Any grocer can devote extra time and labor to look perfect.  Perhaps if Main & Vine was in perfect condition, Kroger knows that they would not really get more sales.  Mariano's used to look perfect as well at one time.  But Mariano's was a Ponzi scheme pumped up with cash for store conditions, extra labor and low prices. This was Bob Mariano showing off for his friends using other investors money.  Eventually the company collapsed and Kroger took over.  There is no way Kroger is going to man every cash register, hire a piano player, and lower prices to Walmart level.  Wall Street might win but your reader will have to settle for shopping at Kroger using Mariano's name.

    We had a story yesterday about how Domino's is using technology to improve its competitive position, and one MNB reader responded:

    After following you over the years to keep up with the retail industry a bit strange that today's Domino's story prompted action given the many prior opportunities to engage...

    Given the investments being made by Walmart in eCommerce/digital assets my experience this weekend was insightful. My daughter wanted a Walmart cookie cake for her birthday. I thought I would order online and pick-up in store but couldn't find a way to do it. Perhaps the capability doesn't exist, or their user interface is too complicated, or simply a lack of acumen on my part. So I call the store and their phone system doesn't have a prompt for the bakery so I wait for an associate to direct my call (who informs me they are in the back room and it's loud so I have to speak up). The bakery associate doesn't understand my order (double layer cookie cake which we have ordered previously) and continues to ask me questions not relevant to my order (1/4 sheet or 1/2 sheet? cookie cake's are round). A two minute or less transaction on a mobile phone [Bakery, cakes, cookie, layers = 2, message: Happy Birthday, comments: pink and white frosting please; pick-up time; name for order] turned into 15 mins I will never get back; retailers need to do better.

    KC's View: