retail news in context, analysis with attitude

Last week I was critical of an email that Clarion Events, which runs the National Grocers Association (NGA) annual show, sent out to previous attendees selling booth space for the 2021 event in Las Vegas … which struck me as tone-deaf at a time when businesses are stressed, a lot of people are sick or dying, and nobody has any idea what 2021 will look like.

Not surprisingly, this prompted a response from Laura S. Strange, NGA's Senior Vice President, Communications and External Affairs:

I read the Eye Opener in Friday’s blog post, and while I appreciate your perspective and certainly agree that these are uncertain and challenging times for everyone, most especially for our members who are on the frontlines, I must share that we were taken back by the tone. We have been in contact with our members on a daily basis, offering support and resources, along with advocating on their behalf in Washington, DC.  Additionally, the Clarion Events team has worked with us to make vital connections between suppliers from the 2020 Show and independents and wholesalers in need of specific services or equipment.  We understand these are times where it’s not business as usual, and therein lies the offer to extend discounted rates to vendors who are already signing up for the Show – a far cry from the characterization of “hitting people up for cash” – in addition to the Clarion Red Cross donation.  A 5% donation of a booth or sponsorship to the Red Cross could range anywhere from a $200 - $5,000 donation – per exhibitor or sponsor. There were nearly 400 exhibitors at the 2020 NGA Show. Doing the math, that could add up to a sizable donation for the Red Cross, an organization that relies on voluntary public contributions to carry out its programs and services, especially during a crisis like this. 

Yes, this is a time of uncertainty, but as our government and country look to safely and responsibly reopen our economy, we also have a responsibility to prepare for the future and plan a path towards the new normal, together.  While I understand your intent may not have been to “attack” either organization, unfortunately the small snippets taken from the email and used in the post lead to a narrative that we feel was not an accurate depiction.

Fair enough, though I'd argue that I represented the email accurately.  (I did mention the Red Cross donation.)  But we're all entitled to our opinions.

A friend of mine pointed out that generating some revenue could be a matter of survival for Clarion - the events business is a treacherous place to be these days.  Also a fair point.

However, I would also point out that I was not the only person to have this reaction to the email.  In fact, it was forwarded to me by several people before I even saw it in my email box.

MNB had several stories last week detailing treatment of vendors by two companies - Ahold Delhaize and SpartanNash - that suppliers found to be tone-deaf, insulting, and, in the end, bad business.  By the end of the week, though, both companies seemed to be backing off to varying degrees, making nice with those vendors via emails.

The story about the backtracking on Friday generated almost as much email as the original stories about the mistreatment.

It apparently isn't just Ahold Delhaize and SpartanNash, as one MNB reader wrote:

Wanted to pass along this letter we got from our “friends” at C&S yesterday to go along with those that were received from Ahold and SpartanNash which you mentioned in the newsletter. Yet another company that has decided that the pandemic is completely the responsibility of the vendors and we’re apparently sitting on a huge pile of cash to pay for all of their efforts to protect their employees. Don’t get me wrong, they should protect their employees just like all companies should. It’s just that companies like mine can’t just deduct the cost of those efforts somewhere up the value chain. Really amazing that companies like this continue to do whatever they can to alienate their “partners”. 

Another MNB reader wrote:

I am an Ahold produce vendor and received the same letter recently. Two years ago they implemented a program in which there are 29 ways they can fine a vendor $400 for the orders they bring in (I have attached the list). One of the criteria is #20 – shorted product. So when the COVID-19 outbreak caused huge spikes in demand vendors that shorted product will get a $400 fine deducted upfront when they get paid. So in addition to this they want to take more money after the fact to pay for their expenses incurred to sell more product. This just doesn’t make sense and it is downright abusive.

The vendor fine program was created and administered through Retail Business Services which is a separate entity than the Ahold banners and they write the checks. So when you get hit with these deductions you get no proof of the violation and can’t argue it with your buyer because RBS administered it. Regarding shorted product you can be short 2 cases of $12 product and get a $400 fine. Another example: You can have  a substandard pallet and instead of allowing us to pay a lumper $20-$30 to re-stack the pallet we get fined $400. Some of the banners in Ahold/Delhaize only fine for a handful of things for produce however Stop & Shop takes full advantage of this vendor fleecing. I am the owner of the business and seriously considering letting the S&S business go. It simply isn’t worth it and I hope more owners are willing to do the same.

One more MNB reader wrote:

Doesn't sound to me like Ahold is backing off at all, and if I was a vendor I'd tell them where to put their $5 off $20 purchase coupon!

And, from another MNB reader:

Seems to me that whatever amount of time and energy expended in contemplating, deciding and writing these letters to the vendor community was wasted.  As you’ve pointed out in several articles and commentary, this is a time for all businesses to focus on two things: doing what they can short term to adapt and hopefully survive this situation and observing and documenting “lessons learned” to simultaneously innovate and differentiate for the future.

The accelerator has been pushed on the food industry as a whole and similar to what’s happened on how we consume entertainment there is a very clear line of sight to increased competition for share of stomach.  Think about restaurants who are now getting into the groceries business, farmers who, once reliant on the restaurant trade, are going direct-to-eater and the foodservice companies/distributors who are starting to open their doors to shoppers.

When this starts to migrate back to the “new normal" I firmly believe that businesses will need to diversifying your portfolio to hedge downturns in the market, finding new revenue streams to augment your traditional business will be a way to create a buffer from future circumstances beyond any of our control.  Restaurants, by way of example, will not be able to operate in the traditional manner if they’re restricted to 50% capacity due to municipal/state orders.

I said last week that I had no idea if the stories on MNB had any role in getting the two companies to change their tunes a bit, but that I was glad they had.

Which prompted one MNB reader to write:

You absolutely played a role in both of these companies backing off.  Isn’t it fun to know that your voice, and others, can be heard.

Now…I think it’s time to take on Trump.  I want to see him respond to something you say in one of his tweets.  What could we possibly agree to poke him with?  Ahhh, the list is so long.

I hope he has better stuff to do than pay attention to me.

We've had some stories about how Amazon has been disappointing some customers, as even it has been stressed by demand created by the pandemic.

One MNB reader wrote:

I have appreciated your viewpoint and perspective since I started reading MNB four years ago, and never more so than during these past 8 weeks.  You provide loads of information & insight that I’ve incorporated into my thinking and my work, often with the added bonus of making me wish I had thought of it and adding a smile to the whole mix.

So, I did wonder when you wrote, “…without being an Amazon apologist…” what you expected folks to think because I feel that what needs to be added to that is, well, then don’t be an Amazon apologist ….  Hold them to the same expectations your hold for all retailers & companies you write about.  I think it would not be too difficult to find a comment you’ve made in the last 4 weeks where you weren’t cutting a company/person/organization any slack over missing expectations that could be argued were not realistic in this pandemic… 

Needless to say, at our house, we are still waiting for an Amazon Fresh delivery window to open for an order we started on April 10th – needless to say, half of the items are now out-of-stock.  You can say all you want about unrealistic expectations – but when you need food, you need food, not in 5, 6 or 7 days – so if it seems unfair to Jeff Bezos and company, I’d guess I’d say that’s too bad.  Maybe he could generate some good will by donating any new net worth he’s gained while 29K have died and another 22 million filed for unemployment.  But I’m sure he’s putting all that wealth towards other good uses…

From another reader:

Unreasonable to expect Amazon or any other company supplying services to meet the spikes created by pandemic in their "usual" manner.  "Tiresome attitude" on the part of complainers, to put it as politely as possible. 

And another email, from MNB reader Betsy McGinn:

While also not being an Amazon apologist, Amazon was actually a bit ahead of the curve on this. They stopped employee travel weeks before most companies, they responded swiftly by shutting down non-essentials to focus on what people really need (rather than allowing a seller to send in more wind chimes or crop tops) to optimally use their warehouse space and other resources. And I can't think of another company that could swiftly hire 175,000 employees to try to serve their customers. Even with nonessential products showing long delivery windows on the site, I have seen many instances of those products arriving within a few days. As far as grocery delivery, I think we are all seeing grocery stores struggle with in-stocks as our supply chain is not particularly adaptable to the increased demand caused by dollar shifts from food service to retail grocery. That said, I believe Amazon should have responded to the grocery delivery glitches much faster by prioritizing existing/Prime customers.

Regarding Amazon's decision to create waitlists of people who want to buy groceries on its site but have not done so before, essentially giving priority to existing and best customers, one MNB reader wrote:

Waitlists are only as good as your ability to scale up capacity, and currently this is a huge challenge. Supermarkets are capped on max a few hundred online orders a day unless they're a well-designed dark store (not many of those out there). We have ~ 50K viable stores. Assuming an aggressive average 150 orders a day per store, that's roughly 7.5M people households served a day, out of a total of 128M households in the US. We're in trouble unless we can scale up capacity rapidly as an industry, while actually making orders profitable. 

Responding to our story about what may be the inevitable demise of a number of department store chains, one MNB reader wrote:

Completely agree -  JC Penney, Kmart, Sears, …  Just make it stop.  Get the inevitable over with already and let’s move on. Nostalgia is the only thing keeping these businesses alive.

But another wrote:

I love JC Penney. The store near me closed several years ago, but I still drive 15 miles to another one.

You're the one?  Wow.

And finally, this cheerful note from an MNB reader:

The American people have no clue damage to our way of life this has caused.  This is a generational sized event that will take years to dig out of. It will require the ingenuity, hard work and stick togetherness of every American to recover(not to mention copious amounts of Titos).  Prayers to our leaders that they find a way to work together. 

I'm with you on the Tito's.