business news in context, analysis with attitude

We continue to get email on the subject of Country of Origin Labeling (COOL) legislation, as one MNB user wrote:

I'm not authorized to have you use my name with this, Kevin, but I finally feel the need to respond to your view on COOL.

I can tell you - and I believe many of my colleagues would echo my experience as a consumer advocate - that the overwhelming majority of our customers are NOT clamoring to know the country of origin relative to fruits, vegetables, meats and fish. Our customers DID clamor for information about calories, fat, sodium, and cholesterol. The response to that clamoring was the development of the Nutrition Facts label that provides relevant, frequently-requested information and continues to be modified to reflect the true concerns of consumers.

If you randomly ask a customer, "Say, would you be interested to know where these tomatoes were grown?" they would most likely respond, "Sure." If you told them that in order to provide this information in a responsible, accurate and consistent manner, it would probably mean they'd have to pay more, they would most likely respond differently.

The very few times a question of this nature has been asked, we've been able to provide the information with one quick phone call. If the question is asked at the store, a quick check of the shipping carton is all that would be required in order to answer it.

I am not hearing an outcry from consumers dying to know country-of-origin or even if a product is genetically modified. I hate to see mandatory
regulations that will only increase costs - and ultimately retails - especially for those already struggling to put good food on their tables.

Fair enough. But we still wonder if an event will take place - perhaps years from now, but maybe in just a few months - that will make COOL legislation look like the smartest thing since sliced bread.

We'll see.

MNB user Al Kober wrote:

I get really concerned when those opposed to COOL only look at the $$$. It's not the cost that is reason to be against it. It is because COOL has no dollar value to the industry. It has no dollar value to most consumers, regardless what the surveys say. If it has perceived value to any company,

Great let them try to recoup the additional cost as just another cost of doing business, but why should all have to play. It just doesn't make good business sense. to charge the customer for a something that does not have any value to them. It is just another Marketing tool and that's all it is.

Another MNB user made an excellent point:

I am not sure that people won't get lulled into thinking the meat they are purchasing is better and safer because it is labeled with the country of origin. The safety of the meat you buy is a lot more concerned with how it was handled in the plant where it was prepared, shipped to the store, and then handled in the store, etc. Improper temperatures, poor sanitation practices, etc., will all affect the safety factor, in many cases a lot more important then where the meat was purchased originally.

We got two very different emails yesterday about the ability of Dorothy lane Market in Dayton, Ohio, to compete effectively with a new Wal-Mart supercenter in the area.

One MNB user wrote:

Your comment about this company not playing Wal-Mart's game was right-on. I believe that most companies would fare better against "Wally World" if they would use the same strategy. That is, if they were ever successful in the first place!

However, another MNB user weighed in:

Dorothy Lane will soon disappear.

Gee, that seems so harsh…

But we'd be surprised - shocked, in fact, if Dorothy Lane can't compete effectively with Wal-Mart. We'll bet on Norman Mayne and company every time…

Of course, it won’t be easy. As MNB user Ken Fobes wrote:

As I like to say, "Wal-Mart is the place everyone hates to shop ... EVERY SATURDAY!"

We reported yesterday that McDonald's will conduct a three market test in the US that will allow children - at a cost of 20 cents - to replace the French
fries in their Happy Meals with apple slices that can be dipped in caramel. Of course, we thought it is unlikely that caramel was exactly what nutritionists had
in mind as a replacement for French fries...

MNB user Derrek Newell responded:

The apple replaces the fries and the caramel replaces the ketchup (known as a "vegetable" in certain circles). And again this points to a significant problem with trying to eat healthier - you often will be expected to pay more for it.

MNB user Steve Duryea added:

Why in the world would they add caramel ? I thought they were on a slight health kick. Apple slices are delicious without the caramel. It appears McDonalds will never "get it."

On the subject of self-checkout, we got the following email from an MNB user:

I have come to hate them. A Giant that I often stop in on my way home from work recently underwent a large expansion and remodeling that included installing a number of these lanes. Last night, I had nothing but trouble with it, then the system crashed when I tried to use a debit card to pay. The thing that really bothers me is that during a peak shopping time--lots of people also stop there on the way home--they usually have only two non-express lane registers staffed, and of course, those have long lines. I feel that I'm being forced into the self-checkout against my will.

Another MNB user had a different perspective:

I've done self-checkout at Giant Eagle and just about drove myself nuts. It was slow, cumbersome and annoying. Not to mention if something rings up wrong you're stranded until a Giant Eagle employee takes pity on you!

However, the speediest checkout system I've ever been through belongs to Aldi. Bar codes are repeated on several surfaces of their products and the cashiers absolutely fly through the order. Then I can bag the items myself however I want. This speedy cashier (probably just having beaten her personal best time) always has time for a smile, too.

On the re-emerging trend of customer service as a strategic imperative, we got the following email:

Living in the Northeast, I can say that the customer service at either a Nordstrom or Target store far exceeds any other retailer out there. I can always find someone in the department that is there to help. On the other hand, Home Depot and Wal-Mart have a lot of work to do. Customer Service is not a word spoken at their stores.

Yes, developing a strong training program is key (Target has a great one). But, it is up to the retailer and store management to make sure their employees actually put the training to use.

And let's face it, half the challenge that retailers face is finding adequate employees that actually give a damn about their job and will put any effort into it.

Since Wal-Mart is a subject oft discussed here on MNB, the following email seems particularly relevant:

I decided to go the library and grab a copy of Sam Walton's book, which I do consider to be a must read for anyone in retail. However, a few things of today's Wal-Mart stand out.

I was at my local Wal-Mart (I live in Wal-Mart's back yard in the Ozarks), and it's (in theory) well known that if you find a lower price elsewhere, Wal-Mart will match it. It is truly AMAZING how few customers were taking advantage of this. For example, the local Kroger-owned store was running 12 packs of coke 2 for $4.98, whereas Wal-Mart was charging 2.74. NO one other than me was asking Wal-Mart to match that price.

Sam in his book said "They could be pretty sure they wouldn't find it cheaper anywhere else". Well, it is truly amazing to me how few people actually check this. Comparing advertised prices between Wal-Mart and everyone who competes with them is that a LOT of things are cheaper at Wal-Mart, but is Wal-Mart matching the competition? No. They are living off the theory that customers perceive them to have the lowest price.

Another point of his book was the idea of being merchandise driven, which Wal-Mart has deviated from. Sam said you're either operations driven (working to cut costs), or merchandise driven. One can walk into the Wal-Mart of 2003 and see that they're clearly operations driven (for example, try to find the butcher at your Wal-Mart, or donuts made in house).

I really wonder what Sam would think of his company today. I'm not sure
he'd be happy with the way things are today.

On the subject of Whole Foods promoting itself as a chain that does not sell products containing trans fats, one MNB user wrote:

If consumers are as concerned about this issue (or frightened into being concerned about it) as reported, Whole Foods is really in the right place at the right time. Their ability to make this "no trans fats" claim has to look enviable to a food providing community beleaguered by those with litigious intent.

By the time trans-fat labeling takes effect one has the feeling that if food purveyors have anything to put on that new nutrition label line, they're painting themselves with a very big target.

And, on the subject of Wal-Mart test of used car sales from its parking lots - a test that seems to have been abandoned for the moment - MNB user Dave Tuchler wrote:

I agree with your POV that you can't second-guess Wal-Mart.

#1 - they have obviously been right more than they've been wrong, mostly because they understand their consumers (notwithstanding the fact that their recent foray into urban markets/marketing might be a bit more challenging). People come to W-M because they want a good deal, from a retailer they can trust. And trust is one of the most significant drivers of used-car buying

#2 - regarding 'dumb ideas' -- who would have guessed that an online auction, requiring people to buy expensive things they can't try, based solely on a picture and description, and also requiring long-distance credit and shipping, would have been successful?

#3 - regarding why would someone want a used car in this environment: In some ways, there has never been a better time to buy a used car. - - a) vs. new, you always save a bundle and don't pay all the taxes; b) with more people buying new, the used car inventory is better and younger (and better value) than ever before.

We got a few emails on the subject that we've discussed at some length over the past few days - the fundraising efforts by Safeway's Steve Burd on behalf of the Bush re-election campaign, and how they might compromise him in the eyes of customers and shareholders.

One MNB user wrote:

The MNB user that applauded the efforts of Stephen Burd and Ron Burkle in their fundraising efforts on behalf of George W. Bush and (Bill Clinton) is either amazingly naive or just as unethical as Burd and Burkle.

When suppliers are coerced into supporting political candidates regardless of their political persuasions or feelings, it is an unhealthy mix of business and politics. Another MNB user cited his or her experience at Dominick's with Ron Burkle's aggressive campaign fundraising efforts - this unethical practice has become all too commonplace. Burkle did the same thing in Southern California with another chain, where suppliers were forced into writing personal checks for large campaign donations to skirt campaign finance laws. The V.P.'s were given "quotas" and told to tell suppliers that their business was in "severe jeopardy" unless they supplied personal checks from between $1,000 to $5,000 (business checks were a violation of campaign laws) for a wide range of democratic candidates from President Clinton to Willie Brown. Suppliers that refused to donate were penalized in many cases with less promotional or advertising support or in the discontinuation of several marginally selling SKUs. Where did this money come from? As noted in the Dominick's case, it came primarily from the marketing funds allocated to the retailer, which basically created a "money-laundering" relationship between the retailer and supplier to funnel funds into a political candidate's campaign fund. Several suppliers that "donated" funds expressed serious doubts about the legality of these donations. Were these donations done "voluntarily"? Of course not! It is amazing to me that the Fair Political Practices Commission has not caught onto this type of practice and cracked down on it.

Supporting a political candidate whose views that you agree with is the right of every American, but coercing others into supporting them, is not! This is an unethical practice that is unfair and must stop in our industry.

Maybe Stephen Burd will create the supermarket industry with our own version of Watergate. As "Deep Throat" said, "follow the money"!

MNB user Scott Johnson wrote:

Wow, guess all it takes to wake up people and stuff the mailboxes is a little political talk, huh? Listen, don’t avoid politics or any other subject. That’s what I like about MNB… Keep up the good work sending the daily digital caffeine! No subject related to retail is off-limits.

And, thinking that perhaps we were feeling badly about the people who told us to stop writing about politics, MNB user bob Thomas wrote:

Re the guy who only wants you to write about business info in YOUR free newsletter. He should know about looking into a gift horse's mouth or vice versa. Good commentary like MNB is as hard to find as weapons of mass destruction.

We're not touching that one…

Finally, we got the following email that revisited an old topic:

I enjoy your column because it's informative, thought-provoking, and a bit irreverent. As a new subscriber, I may have missed an earlier explanation of why you continually refer to yourself as "we". At first, I thought you were speaking for your organization. However, when you said "we" worked at a clothing store during high school, I began to wonder if you had multiple personalities. I don't mean to "nitpick" your grammar, but it can be very confusing when you do use the word "we" in the context of a group. Then I'm not sure who you're referring to.

The quick answer: we have no organization (and are, in fact, completely disorganized), and often have been accused of having multiple personalities.

Seriously, it was funny to get this email, since the same subject was raised several weeks ago, and we asked the MNB community whether we should use "we" or "I."

The overwhelming response was that the use of "I" seemed egocentric, and that people preferred "we."

So "we" it is.
KC's View: