business news in context, analysis with attitude

Published on: December 12, 2017

by Michael Sansolo

For the past few years, hardly any sports team has posted a run of success to equal basketball’s Golden State Warriors. Eric Housen has had a big hand in that, though he has never played a minute.

Housen is director of team operations for the Warriors, charged with countless small, yet essential details. His duties range from overseeing the team’s travel needs to setting up locker rooms with the right equipment, stopping the occasional fight and even buying the exact snacks required by each member of the team.

A recent profile on Housen in the New York Times detailed the wide range of duties and absurd hours his job requires.

Housen does it all knowing the million details of his job make it easier somehow for millionaire athletes like Stephan Curry and Kevin Durant to guide the team to a championship.

Most employees don’t see their efforts translate into anything as straightforward as wins and losses or championships on a basketball court, but that doesn’t mean they see their jobs as anything less important than Housen’s. Retail jobs and those that support them are hardly glamorous, but the folks doing it recognize their importance and their purpose.

We’ve see that play out this year in areas hard hit by hurricanes or wildfires. Somehow stores stay open, staffers come to work and products get on the shelves. And we’ve seen the importance of these efforts in bringing both essential products and a feeling of normalcy to hard hit areas.

The value of those efforts might mean more to staffers than we might think possible. Inc. magazine had a recent article on the importance of meaning and connection to employees at all levels. As the article detailed, purpose and connection - between team members and with the larger community - can mean more than all the culture-raising efforts companies usually attempt.

And the implications can be measured.

The power of employee engagement was the subject of a recent study from the Coca-Cola Retail Research Council focusing on convenience stores. The study - available here - was able to show how engagement both with shoppers and other staff leads to improved sales, profits and customer loyalty.

What’s more, those same efforts lead to improved employee satisfaction and lower turnover. And as the report found, the key to building all this success frequently comes down to improved communication throughout the organization especially from each level of management to their subordinates. (Full disclosure: I serve as research director to the Coca-Cola Retail Research Council.)

In other words, by reinforcing the importance of front line jobs, we help our companies, our communities and even our bottom lines. That’s a winning combination that even the Golden State Warriors might find enviable.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com . 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.

Published on: December 12, 2017

by Kevin Coupe

There’s a part of me that hates writing this morning’s Eye-Opener, in part because it may appear to pick on one retailer. Which is not my intention. There probably are a bunch of retailers guilty of the same sins, but this one just happens to be one in my town where I live. And so, it becomes are focus of my commentary, and, I hope, an object lesson for other retailers.

I went into my local Ahold Delhaize-owned Stop & Shop over the weekend, and was a bit startled to find, just inside the front door, a display selling Amazon gift cards.

This wasn’t just Amazon gift cards hanging on a rack with hundreds of other gift cards for other retailers and restaurants. This was a standalone display, selling gift cards that come packaged in cute little facsimiles of Amazon shipping boxes. And all I could think to myself was, why don’t you just sign over your whole business to Amazon, and be done with it. Because that’s essentially what you’re doing by promoting Amazon so visibly and in such a high-profile position.

I just don’t think that’s very smart. And, by the way, I’ve never seen a Peapod gift card promoted in a similar position. And Ahold Delhaize owns freakin’ Peapod.

That’s not even the worst of it. Before I entered the store, I went to get a shopping cart … and found a corral that was so dirty (picture below left) that I didn’t even want to take one. (There weren’t a ton of carts there, but that was because many of them were scattered in the parking lot, not because the store was very crowded.)

I saw this corral, and all I could think was that if retailers want to win in an increasingly cutthroat competitive environment, they have to bring their A-game. Every hour of every day. That means, at the very least, being neat and clean and in-stock and with helpful, friendly employees who are getting it done.

As opposed to bringing a D-game that does little to persuade the customer that this is where I should be bringing my business.

Again, I’m not just picking on Ahold Delhaize and Stop & Shop here. But I do believe that this is an Eye-Opening object lesson about how not to compete.

Here is the question that I would ask every retailer: Are you absolutely sure that your stores are not guilty of the same sins?

Published on: December 12, 2017

The Seattle Times reports that Amazon, the city’s largest employer, “appears to be seeking the smallest number of new employees in the city in years after a feverish, four-year growth spurt that more than doubled its head count … Open job postings at Amazon’s headquarters, which stood at more than 9,000 as recently as June, have declined sharply and steadily in the last few months.”

The slowdown, the story notes, “is a reminder that Amazon’s frantic expansion during the last few years — contributing to a boom that nudged the city’s unemployment rate near record lows, pushed housing costs to a record high, and sparked a debate about the company’s civic role in Seattle — won’t last forever.” It is attributed by sources within the company as reflecting “hiring freezes or postponements, reorganizations to reduce redundancy or layers of management, and, in at least one case, cutbacks in travel spending.”

Ironically, it also comes as Amazon is evaluating hundreds of proposals from around the continent for what has been dubbed HQ2 - a second headquarters that would be built elsewhere, and in which Amazon would invest $5 billion and to which it would bring some 50,000 jobs.

Amazon has not commented on the slowdown in hiring.

Published on: December 12, 2017

The Newark Star Ledger reports that German discounter Lidl, which said earlier this year that it planned to open 100 store sin the US by the end of 2018, has “hit the brakes” on some of the proposed locations because of disappointing traffic and sales in its early units.

Stores that were planned for states including New Jersey, Ohio, Pennsylvania, and Virginia have been put on hold, the story says.

According to the Star Ledger, “Lidl's American debut began strong, drawing 11 percent of consumer visits to traditional grocery stops in nine markets in Virginia, North Carolina and South Carolina in June, according to marketing firm inMarket. By August, their share in those markets had dropped below 8 percent. Industry experts say Lidl's competition is figuring out how to fight back against the vows of lower prices and superior products from the newcomer.”

Published on: December 12, 2017

Mario Batali, celebrity chef turned retailer - he is a partner in Eataly USA - has been accused of sexual harassment by four women, and has admitted his guilt while stepping away from his restaurant and retail businesses as well as his co-hosting duties on ABC’s “The Chew.”

“I apologize to the people I have mistreated and hurt,” Batali said in a statement. “Although the identities of most of the individuals mentioned in these stories have not been revealed to me, much of the behavior described does, in fact, match up with ways I have acted. That behavior was wrong and there are no excuses … I take full responsibility and am deeply sorry for any pain, humiliation or discomfort I have caused to my peers, employees, customers, friends and family.”

Batali’s business empire - reportedly worth at least $250 million - includes five retail stores and 23 restaurants.

Published on: December 12, 2017

Digiday reports on how Kroger - like Amazon and Walmart - is developing an advertising platform, “is selling its suppliers ad units and solutions, and it is developing a programmatic platform that will go live next year.”

According to the story, “Like Walmart, Kroger boasts that its loyalty program data and purchase data gathered from its mobile apps, brand websites and around 2,800 stores across 35 states in the U.S. can help its suppliers (mostly consumer packaged goods companies like Procter & Gamble) serve targeted ads on Kroger’s properties and the open web.” But what Kroger has is the data analytics piece of the puzzle, provided by its its own consumer insights subsidiary called 84.51°, formerly known as Dunnhumby.

You can read the entire story here.

Published on: December 12, 2017

• Supervalu has announced that it is expanding its e-commerce profile to four of its retail banners - Cub, Farm Fresh Food and Pharmacy, Shop 'n Save, and Shoppers Food and Pharmacy - by offering same-day grocery delivery, click-and-collect, as well as integration of online coupons and loyalty rewards.

The expanded offerings from Supervalu are being powered by Instacart.

Published on: December 12, 2017

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

• Supervalu said that it has completed its previously announced $193 million acquisition of Associated Grocers of Florida, the retailer-owned co-op that serves businesses in Florida, the Caribbean, Central and South America.


• The San Francisco Chronicle reports that UK supermarket chain Marks and Spencer has begun marketing a safer avocado - one with no pit and tender skin, that can be eaten whole, and does not require the use of a knife.

This apparently is a big deal, especially with the growing popularity of avocado toast - there has been a trend toward hand injuries, including severed fingers and sliced tendons, because of difficulties people have had cutting up avocados.

Innovations can be small, or can be large. What matters is that they matter.


• The Financial Times reports that France-based mall owner Unibail-Rodamco has struck a deal to acquire Australia-based mall owner Westfield in a deal valued at $24.7 billion (US).

Westfield owns more than 30 malls in the US, but has been facing an uphill battle of late as bricks-and-mortar stores have been closing because of competition from e-commerce companies and changing consumer habits.

Published on: December 12, 2017

Yesterday, MNB took note of an Acosta study saying, in part, that “thirty-three percent of shoppers go to more than one retailer due to not finding all the products/brands they want at one store.”

One MNB reader responded:

Loved this comment. That’s unchanged from a 1960 study done by Willard Bishop and Western Michigan University. Early in my CPG career I was able to utilize those results to help retailers and our field sales team see the (lost) value of out of stocks.  OOS=Lost Business. Too bad it remains relevant.

Thanks for the history lesson. I wonder if it is even more relevant today, simply because e-commerce companies often don’t have the same out-of-stock issues.



Regarding the contention that many companies will use lower taxes and higher profits for things like share buybacks and higher rewards to shareholders and executives, and not for higher wages and more hiring, one MNB reader wrote:

Buybacks can be seen as a signal that the company sees their stock as undervalued which investors love to hear.  Buybacks are also done in lieu of dividends when a company has excess cash and doesn’t know where to invest it.  I’m not sure I would use Home Depot as my “tea leaves” example of the implications of potentially changing tax policy.  After all they are in the retail sector, an area of the economy where everybody is skeptical of investing unless of course you’re buying Amazon stock.




MNB reader Joe Ciccarelli had some thoughts about the tax proposal currently in conference committee:

The Republicans blew this whole tax deal. The special “tax Holiday” of 10% on corporate profits parked overseas should have had some caveats – like the money has to be used for investment – plant, equipment, R & D, hiring’s and even a special extra deduction for bringing manufacturing back from a foreign country. Any of the money used for share repurchase, excessive bonuses or extra dividends - that portion gets taxed at the regular rate. I don’t see this tax plan as a win for the average working person or couple. And by the way, Trump is wrong – this is not the biggest tax cut in history – a guy name Reagan gave Americans the biggest tax cut followed by George W. Bush.



And finally … extra credit to all the MNB readers who appreciated the fact that I got the words ‘Fargo” and “wood chipper” into the same story yesterday.

Glad you’re paying attention.

Published on: December 12, 2017

In Monday Night Football action, the Miami Dolphins defeated the New England Patriots 27-20.