Continued commentary from the MNB community about Wal-Mart's approach to health care…
MNB user Bob Vereen wrote:
I don't want to be an apologist for Wal-Mart, but have been thinking about the WSJ article you quoted yesterday and again today.
Given the normal turnover one gets at retail, is it that unusual for employers to wait a while before covering hourly workers with health insurance? I think not. I don't know how long the normal waiting period would be (that would be an interesting thing to determine, wouldn't it?) With more than 1 million employees, it would seem that WMT might have found the 6-month wait identifies "career" employees. Can you imagine the administrative headache of immediately covering an employee who stays on the job just a month or so?
As Paul Harvey says, there may be "another side of the story."
Also, it would seem to me that a $1,000 deductible is not unreasonable. Wonder what the normal deductibles are for other retailers?
We have less of a problem with a six month waiting period for new employees than we do with what we understand is an interminable period of making them hang by their thumbs waiting for enough hours to qualify for full-time health care. Again, we're only reacting to what we've been told by Wal-Mart employees and their families.
We also continue to get email on the subject of importing inexpensive Canadian medicines into the US as a way of keeping costs down. One MNB user wrote:
I have no issue with individuals going to Canada for prescription medicines to same money. I do, however, have an issue with the same individuals who complain about jobs being sent overseas!
My parents use the Internet to order their cigarettes from other countries and at the same time they continue to support companies & products made in the USA! Something does not seem right!! You cannot have both!
Hypocrisy is annoying, whether writ large or small.
Another MNB user wrote:
The major importation of drugs started years ago below the radar screen as major wholesalers and the drug chains purchased goods from Canada and Internationally. This was done to enhance the gross margins and stop the margin decline. Now the ultimate consumer is getting smarter and fed up with the US Government protected drug manufacturers. Therefore, the consumer is seeking fair prices.
Another MNB user wrote:
I make an annual trip to Thailand, Malaysia or another Asian country for variety. Current price of round trip ticket is $715 to Bangkok on United Airlines. The cost of the a/c hotels I stay in is $150/week (a nice, friendly guest house) and meals for the week cost a grand total of about $100. My parents pay for the ticket and I pay the rest.
I buy my annual supply of clothing for my family at a cost savings of over $1,500.
While there, pick up an annual supply of all major medications for my elderly parents, saving them about $3,500.
The drug manufacturers are the same (such as Merk, Pfizer, Eli Lilly, etc), occasionally they are British or German.
Point taken. Are you listening, America?
We also got email about the small Minnesota town that is banning big box stores. One MNB user wrote:
I’m not sure how meaningful it is for a town of 2,400 to declare its opposition to big-box retailers, given the fact that the big-box retailers have made it abundantly clear they’re not interested in towns of 2,400.
Now, when a community of 50,000 or so that positions itself as a regional shopping destination takes a similar stance … THAT will be something noteworthy.
True.
And MNB user Steve Blanchard wrote in about big-box bans:
I believe that similar legislation is currently being considered or is in the process of being proposed in the state of Illinois, limiting stores to a maximum of 100,000 sq ft.
MNB user Jerry Gelsomino wrote in on a related topic:
I track emerge customer trends and the industry at large. Here's a trend to watch and I don't know whether it's good or bad. In my town of Santa Monica, CA, to spur retail growth of smaller independents, the City has a new ordinance for Third Street Promenade, the hottest retail area in the Westside of LA, that no store can have more than a 50-foot frontage. This virtually eliminates most of the big box retailers. Unfortunately, most of the smaller retailers who fit this size are terrible merchants. We'll see what happens next.
We got the following email following our story about Core-Mark being put on the market:
Please withhold my name, but as a long time and current Core-Mark employee I give full credit to Mike Walsh, Core-Mark CEO, for working with single minded determination to try and pull us out of the Fleming mess. Although we were owned by Fleming for only a short period of time and operated independently (Fleming only wanted our cash) Core-Mark's great reputation in the c-store industry has been put in jeopardy. As a very profitable and growing company we were the only good thing that Fleming had going for them, so don't lump us in with the ex-crowd from Lewisville, Kevin. Shortly we will emerge from this terrible situation and regain our momentum. While Core-Mark's marketing presence is predominately Western US and Canada we have "inherited" Fleming's Eastern c-store DCs, several of which were solid performers prior to Fleming acquiring them. So ultimately, in a strange twist, Core-Mark will return bigger and better than ever and shed the Fleming stigma. Sooner the better!
Regarding yesterday's piece about Eckerd, MNB user Ed Nalley wrote:
Allen Questrom - Chairman of Eckerds - only needs to visit about 10 stores of Eckerds and then visit 10 stores of Walgreens--etc. to view the problems. PLUS they charge $13,500 per sku plus 3 pieces per store free to a new company to obtain distribution. A small company cannot offer to sell to Eckerds--thus Eckerds doesn't have new ideas--unless they come from the larger companies.
Eckerds inventory and store merchandising of products are very poor. The last 4 times I went to Eckerds to shop on advertised specials they were out of stock on the very 1st day of the Sunday AD. Why? Because they have a lot of restrictions on how many pieces per item they can order. If you do the same at Walgreens--etc they have 3 X's the inventory per item stock--and very clean and well merchandised stores. My contacts nationwide tell me this is true in all states for Eckerds.
Building more stores is not the solution--its about clean--well merchandised stores--improved inventory--and a new approach to having new innovative items in the stores from small companies who can't afford the current New Item Policy.
We wrote yesterday about a University of California at San Francisco (UCSF) study suggesting that "food with lots of sugar, fat and calories appears actually to calm the body's response to chronic stress."
Which prompted one MNB user to respond:
So if product offerings continue to be lightened, de-sugared, and in other ways have all the fun surgically removed from them we’ll be a healthier but more stressed-out populace.
Bring on the Oreos…
On the subject of Wal-Mart, one MNB user wrote:
Thought you might be interested in a personal note. The other day my wife and I went into a Wal-Mart supercenter, which apparently had recently undergone remodeling.
Very handsome. Floors in the soft goods departments (men's and women's clothes) looked like wood flooring. Aisles seemed wider; signing less cluttered.
We are getting a Wal-Mart supercenter near where we live. I am anxious to see if this is the company's new look. If so, it may be taking aim at Target to a degree, or maybe reacting to Kohls.
We think that Wal-Mart probably believes that now that Kmart has been rendered impotent, it needs to upgrade precisely these departments in order to undermine the appeal of Target. Let's see if it works.
We got several emails about our story regarding the Ohio price wars. One MNB user wrote:
I agree with the perception that the chains in Cleveland have been over charging the consumers. Giant Eagle has raised prices as much as 40% in some categories since it took over Stop n Shop a few years back, and Tops has followed. Giant Eagle started raising retails the week after they took over and have not stopped.
Insiders have told me that Giant Eagle's sales are slightly up, but the customer count is way down. What does that tell you?
You stated that nobody wins in a price war. I respectfully disagree with that statement. Two groups, the consumers and the manufacturers. The consumers because they can once again buy groceries at somewhat reasonable prices and the manufacturers because they now have an opportunity to sell more product at these reasonable prices. Wal-Mart...Welcome to Cleveland!
But if everyone else goes out of business and only Wal-Mart is left, does the consumer really win?
And MNB user Jack Ericsson wrote:
The reason for the price wars may be because of local competition that isn't usually discussed nationally. Marc's Deep Discounter in Cleveland may be the last of the Deep Discounter's and have stores throughout Northeast Ohio. When I lived in Canton, Marc's was a unique shopping experience similar, but different, to Jungle Jim's and probably like Stew Leonard's, though I've never been there. Price was everything and they knew how to merchandise. Marc Glassman would buy odd lots, last year's hot toys, etc on his trips around the world. I remember buying a water sprinkler for the lawn in the middle of a Northeast Ohio winter because Marc's had a great price on it. Every store visit offered something different. There was very high loyalty to shopping Marc's in addition to shopping your grocery store.
Another possible factor in the price wars is a small local grocery chain in Canton that you rarely hear about- Fisher Foods of Canton. When I was there, they were a 6 store, full service grocery that offered just about every brand but in limited size choices, usually the best selling size. They set the aggressive pricing for Canton yet they paid their people well. The service was outstanding that packed your groceries and took them to the car for you. They had a great produce and Meat dept. along with a deli carry out that was the busiest place in Canton at 5 pm. They found a way to offer a high end product, pay their employees well, AND still have the lowest prices in town. They had quality people throughout their organization. By the way, they also have Fisher's Optical attached to each store where, you guessed it, they offered great products and services on eyeglasses and contacts at a significant discount to everyone else.
Before Giant Eagle and Tops, it was Seaway's Stop n' Shop and Finast stores wrestling with these same issues. Back then, the Acme stores were called Acme Click's and they dealing with the same issues in Akron Canton. These price wars were going on long before anyone had even heard of Sam Walton in Northeast Ohio.
And finally, on the subject of still-declining French wine sales in the US, Australian MNB user Wayne Wood wrote:
I'm delighted to see that French wines have not picked-up in the US. Like Americans Australians fought for the French in WW2 and in Vietnam.
To have an ally like France is like having a pet monster in your back yard you never know when he's going to bite you.
Australian's have always supported the US. It's nice to see it is reciprocated in purchasing Australian wines. The disappointing thing, is the fact that the US rarely sees the full range of top wines made by the smaller vineyards in our country. Put pressure on your liquor stores to be more adventurous and find out what really is available form our sunburnt country.
Actually, one of our life goals is to travel to Australia to visit some of the small wineries of which you write. We've read about some of them, and can't wait to visit. Someday.
(With luck, we'll write all about it on MNB…)
MNB user Bob Vereen wrote:
I don't want to be an apologist for Wal-Mart, but have been thinking about the WSJ article you quoted yesterday and again today.
Given the normal turnover one gets at retail, is it that unusual for employers to wait a while before covering hourly workers with health insurance? I think not. I don't know how long the normal waiting period would be (that would be an interesting thing to determine, wouldn't it?) With more than 1 million employees, it would seem that WMT might have found the 6-month wait identifies "career" employees. Can you imagine the administrative headache of immediately covering an employee who stays on the job just a month or so?
As Paul Harvey says, there may be "another side of the story."
Also, it would seem to me that a $1,000 deductible is not unreasonable. Wonder what the normal deductibles are for other retailers?
We have less of a problem with a six month waiting period for new employees than we do with what we understand is an interminable period of making them hang by their thumbs waiting for enough hours to qualify for full-time health care. Again, we're only reacting to what we've been told by Wal-Mart employees and their families.
We also continue to get email on the subject of importing inexpensive Canadian medicines into the US as a way of keeping costs down. One MNB user wrote:
I have no issue with individuals going to Canada for prescription medicines to same money. I do, however, have an issue with the same individuals who complain about jobs being sent overseas!
My parents use the Internet to order their cigarettes from other countries and at the same time they continue to support companies & products made in the USA! Something does not seem right!! You cannot have both!
Hypocrisy is annoying, whether writ large or small.
Another MNB user wrote:
The major importation of drugs started years ago below the radar screen as major wholesalers and the drug chains purchased goods from Canada and Internationally. This was done to enhance the gross margins and stop the margin decline. Now the ultimate consumer is getting smarter and fed up with the US Government protected drug manufacturers. Therefore, the consumer is seeking fair prices.
Another MNB user wrote:
I make an annual trip to Thailand, Malaysia or another Asian country for variety. Current price of round trip ticket is $715 to Bangkok on United Airlines. The cost of the a/c hotels I stay in is $150/week (a nice, friendly guest house) and meals for the week cost a grand total of about $100. My parents pay for the ticket and I pay the rest.
I buy my annual supply of clothing for my family at a cost savings of over $1,500.
While there, pick up an annual supply of all major medications for my elderly parents, saving them about $3,500.
The drug manufacturers are the same (such as Merk, Pfizer, Eli Lilly, etc), occasionally they are British or German.
Point taken. Are you listening, America?
We also got email about the small Minnesota town that is banning big box stores. One MNB user wrote:
I’m not sure how meaningful it is for a town of 2,400 to declare its opposition to big-box retailers, given the fact that the big-box retailers have made it abundantly clear they’re not interested in towns of 2,400.
Now, when a community of 50,000 or so that positions itself as a regional shopping destination takes a similar stance … THAT will be something noteworthy.
True.
And MNB user Steve Blanchard wrote in about big-box bans:
I believe that similar legislation is currently being considered or is in the process of being proposed in the state of Illinois, limiting stores to a maximum of 100,000 sq ft.
MNB user Jerry Gelsomino wrote in on a related topic:
I track emerge customer trends and the industry at large. Here's a trend to watch and I don't know whether it's good or bad. In my town of Santa Monica, CA, to spur retail growth of smaller independents, the City has a new ordinance for Third Street Promenade, the hottest retail area in the Westside of LA, that no store can have more than a 50-foot frontage. This virtually eliminates most of the big box retailers. Unfortunately, most of the smaller retailers who fit this size are terrible merchants. We'll see what happens next.
We got the following email following our story about Core-Mark being put on the market:
Please withhold my name, but as a long time and current Core-Mark employee I give full credit to Mike Walsh, Core-Mark CEO, for working with single minded determination to try and pull us out of the Fleming mess. Although we were owned by Fleming for only a short period of time and operated independently (Fleming only wanted our cash) Core-Mark's great reputation in the c-store industry has been put in jeopardy. As a very profitable and growing company we were the only good thing that Fleming had going for them, so don't lump us in with the ex-crowd from Lewisville, Kevin. Shortly we will emerge from this terrible situation and regain our momentum. While Core-Mark's marketing presence is predominately Western US and Canada we have "inherited" Fleming's Eastern c-store DCs, several of which were solid performers prior to Fleming acquiring them. So ultimately, in a strange twist, Core-Mark will return bigger and better than ever and shed the Fleming stigma. Sooner the better!
Regarding yesterday's piece about Eckerd, MNB user Ed Nalley wrote:
Allen Questrom - Chairman of Eckerds - only needs to visit about 10 stores of Eckerds and then visit 10 stores of Walgreens--etc. to view the problems. PLUS they charge $13,500 per sku plus 3 pieces per store free to a new company to obtain distribution. A small company cannot offer to sell to Eckerds--thus Eckerds doesn't have new ideas--unless they come from the larger companies.
Eckerds inventory and store merchandising of products are very poor. The last 4 times I went to Eckerds to shop on advertised specials they were out of stock on the very 1st day of the Sunday AD. Why? Because they have a lot of restrictions on how many pieces per item they can order. If you do the same at Walgreens--etc they have 3 X's the inventory per item stock--and very clean and well merchandised stores. My contacts nationwide tell me this is true in all states for Eckerds.
Building more stores is not the solution--its about clean--well merchandised stores--improved inventory--and a new approach to having new innovative items in the stores from small companies who can't afford the current New Item Policy.
We wrote yesterday about a University of California at San Francisco (UCSF) study suggesting that "food with lots of sugar, fat and calories appears actually to calm the body's response to chronic stress."
Which prompted one MNB user to respond:
So if product offerings continue to be lightened, de-sugared, and in other ways have all the fun surgically removed from them we’ll be a healthier but more stressed-out populace.
Bring on the Oreos…
On the subject of Wal-Mart, one MNB user wrote:
Thought you might be interested in a personal note. The other day my wife and I went into a Wal-Mart supercenter, which apparently had recently undergone remodeling.
Very handsome. Floors in the soft goods departments (men's and women's clothes) looked like wood flooring. Aisles seemed wider; signing less cluttered.
We are getting a Wal-Mart supercenter near where we live. I am anxious to see if this is the company's new look. If so, it may be taking aim at Target to a degree, or maybe reacting to Kohls.
We think that Wal-Mart probably believes that now that Kmart has been rendered impotent, it needs to upgrade precisely these departments in order to undermine the appeal of Target. Let's see if it works.
We got several emails about our story regarding the Ohio price wars. One MNB user wrote:
I agree with the perception that the chains in Cleveland have been over charging the consumers. Giant Eagle has raised prices as much as 40% in some categories since it took over Stop n Shop a few years back, and Tops has followed. Giant Eagle started raising retails the week after they took over and have not stopped.
Insiders have told me that Giant Eagle's sales are slightly up, but the customer count is way down. What does that tell you?
You stated that nobody wins in a price war. I respectfully disagree with that statement. Two groups, the consumers and the manufacturers. The consumers because they can once again buy groceries at somewhat reasonable prices and the manufacturers because they now have an opportunity to sell more product at these reasonable prices. Wal-Mart...Welcome to Cleveland!
But if everyone else goes out of business and only Wal-Mart is left, does the consumer really win?
And MNB user Jack Ericsson wrote:
The reason for the price wars may be because of local competition that isn't usually discussed nationally. Marc's Deep Discounter in Cleveland may be the last of the Deep Discounter's and have stores throughout Northeast Ohio. When I lived in Canton, Marc's was a unique shopping experience similar, but different, to Jungle Jim's and probably like Stew Leonard's, though I've never been there. Price was everything and they knew how to merchandise. Marc Glassman would buy odd lots, last year's hot toys, etc on his trips around the world. I remember buying a water sprinkler for the lawn in the middle of a Northeast Ohio winter because Marc's had a great price on it. Every store visit offered something different. There was very high loyalty to shopping Marc's in addition to shopping your grocery store.
Another possible factor in the price wars is a small local grocery chain in Canton that you rarely hear about- Fisher Foods of Canton. When I was there, they were a 6 store, full service grocery that offered just about every brand but in limited size choices, usually the best selling size. They set the aggressive pricing for Canton yet they paid their people well. The service was outstanding that packed your groceries and took them to the car for you. They had a great produce and Meat dept. along with a deli carry out that was the busiest place in Canton at 5 pm. They found a way to offer a high end product, pay their employees well, AND still have the lowest prices in town. They had quality people throughout their organization. By the way, they also have Fisher's Optical attached to each store where, you guessed it, they offered great products and services on eyeglasses and contacts at a significant discount to everyone else.
Before Giant Eagle and Tops, it was Seaway's Stop n' Shop and Finast stores wrestling with these same issues. Back then, the Acme stores were called Acme Click's and they dealing with the same issues in Akron Canton. These price wars were going on long before anyone had even heard of Sam Walton in Northeast Ohio.
And finally, on the subject of still-declining French wine sales in the US, Australian MNB user Wayne Wood wrote:
I'm delighted to see that French wines have not picked-up in the US. Like Americans Australians fought for the French in WW2 and in Vietnam.
To have an ally like France is like having a pet monster in your back yard you never know when he's going to bite you.
Australian's have always supported the US. It's nice to see it is reciprocated in purchasing Australian wines. The disappointing thing, is the fact that the US rarely sees the full range of top wines made by the smaller vineyards in our country. Put pressure on your liquor stores to be more adventurous and find out what really is available form our sunburnt country.
Actually, one of our life goals is to travel to Australia to visit some of the small wineries of which you write. We've read about some of them, and can't wait to visit. Someday.
(With luck, we'll write all about it on MNB…)
- KC's View:
