retail news in context, analysis with attitude

Responding to our piece the other day about a new Walmart Express format opening in Mexico, one MNB reader wrote:

I was on the team that created Walmart Express in the US. We were the "Small Formats" modular (WMT term for plan-o-gram) development team. Bill Simon was CEO of WMT US and Anthony Hucker (sound familiar?) was President (or some lofty title) of Small Formats (actually, I think it might have been of Walmart Express). The format was mostly grocery with very limited GM.

When we opened our first store in Gentry, AR, I was standing next to Anthony at the GO and he showed me an email from Bill. "Congratulations on your 1st, 10,000 more to go." This was going to be HUGE!!

Several Sr. leadership changes later, Walmart Express was no more. WMT can run Supercenters but had no clue how to run 12,000 sq/ft stores in the US profitably, or for that matter, how to get product to them efficiently and cost effectively.

I believe the format will be much more successful in Mexico because that business unit has "bodega" experience.

MNB took note the other day about an op-ed piece in the Iowa Capital Dispatch suggesting that Hy-Vee's election efforts may have gone too far when Chairman-CEO-President Randy Edeker did a video for employees promoting a political point of view.

One MNB reader responded:

After reading your comments regarding Kathie Obradovich’s story on Randy Edeker, I felt a need to weigh in.   During Randy’s time as Hy-Vee CEO, his management style has evolved to become more than somewhat similar to that of the political candidate he was specifically endorsing.  Randy’s authoritarian leadership has stifled originality and the right to dissent among Hy-Vee’s key management people and he has demonstrated that he will not hesitate to demote or discharge those who would challenge him.   I do not find it surprising that he would choose to use this bully pulpit to advance his political beliefs, whether he admits to it or not.

In a bit of irony, Randy is also a past chairman of the National Association of Chain Drug Stores (NACDS) and currently serves on its Board of Directors.   During his time as chair of NACDS, Randy railed about the use of DIR fees (Direct and Indirect Remuneration fees) on the part of pharmacy benefit managers to claw back revenue from community pharmacies, sometimes taking back funds paid to pharmacies as much as 18 months or more after the prescription transaction has been completed.   DIR fees have had a tremendously negative impact on the bottom line of community pharmacies including Hy-Vee, driving many larger firms to consolidation and pushing enormous numbers of independently owned pharmacies out of business.  Randy has made no secret of the fact that DIR fees have had an enormously direct effect on Hy-Vee’s corporate bottom line and he specifically has mentioned them when reviewing Hy-Vee’s financial results with its stockholder employees.   However, the political candidates whom Randy perceives will benefit Hy-Vee from a tax standpoint in this election are the same politicians whose pockets are legally being lined by the pharmacy benefit managers through their campaign contributions......and those candidates will be highly discouraged from voting for DIR reform by virtue of accepting those same contributions from the PBMs.   Nothing is going to change.

Whether you are the CEO of an $11 billion company or a single parent struggling to raise children on a minimum-wage income, this story illustrates the risks of voting for a cause or a candidate on the basis of a single issue.  Unfortunately, there is no one on the executive staff who would risk telling the emperor that he is not wearing clothes.

What distresses me the most about this email is the suggestion that Hy-Vee, traditionally the model of decentralized management, may now have a culture in which there is "authoritarian leadership" that "has stifled originality and the right to dissent."

I guess my message would be that if this is inaccurate, Hy-Vee at the very least has a perception problem … because I don't think this email is coming from someone who could be described as a disgruntled employee.

We had a piece the other day about how in New York City the iconic Strand bookstore's owner Nancy Bass Wyden appealed to customers to help it stay viable.   One of those orders was "a purchase of 197 books from a customer in the Bronx. 'I’ll have to write her a thank you letter,' Ms. Wyden said."

I commented:

If it were me, I would've put the 197 books in the back of my car, driven them up to the Bronx and delivered them myself … and would've checked with the customer to see if I could pick her up some Starbucks on the way.

I hope to hell a thank-you letter isn't all that customer gets.

Because if that's the best the Strand can do to demonstrate loyalty to its customers - as opposed to begging for loyalty from them - then it may explain a lot about its competitive issues, and suggest that the pandemic may just have accelerated them, as opposed to having created them.

One MNB reader responded:

Easy there Crusty.  Maybe the reason Strand had such an amazing response to their plea for business was because they have, over their 90+ years in business, delighted their customers.

Perhaps Ms. Wyden was a little tongue in cheek with her response...I’m sure more than a thank you letter is awaiting this customer. 

Years ago I read a great quote from Indra Nooyi on “the best advice I ever received.”  It was “assume positive intent,”  which I think fits here.

Maybe.  But that's not what she said.  And if I were talking to the New York Times, I would've made that clear.