business news in context, analysis with attitude

MNB user John Blanton wrote to us about the ongoing California grocery strike:

I am a 25 year veteran of the Southern California retail food industry. I was a product of the now gone Alpha Beta Co. during my entire food industry experience with time spent both as a union employee and in non-union management positions. Although I worked in an era that was very competitive with many more major retail chains than today, I always felt that the union employees of our company shared a common interest with non-union employees as being proud of working together to make our company better. Both union and management had their own agendas at times but seemed to always be able to come to an agreement for the common good and health of the industry.

In this long strike of today, it seems to me that the companies are so afraid of Wal-Mart that they are missing the easiest way of dealing with the situation. The companies and union should come to an agreement and together start picketing and using there combined strength against Wal-Mart and show how Wal-Mart is not good for the whole Southern California business community. This is the only way that the current companies will remain in business and preserve union jobs in the future.

Another MNB user chimed in:

For those people who say that the grocery workers should just "go back to work," "we have to pay for our insurance, why can't you," or "I won't let anyone tell me where to shop," I have one response:

If a member of your family worked at one of the big 3, would you still feel the way you do?

The grocery workers are fighting for your future and the future of your children and their children.

To make statements like that is purely ignorant.

Another member of the MNB community offered some thoughts about the story that some toy manufacturers are looking to support retailers other than Wal-Mart, and that CPG companies are complaining about the impact Wal-Mart has had on prices:

It troubles me that an organization would be "punished" for successfully communicating a vision and implementing and executing a strategy that through their very own performance, efforts, focus and hard work have made them America's retailer -- an honor bestowed upon them by the consumers voting with their hard-earned spending dollars... a dynamic that is critical to keep in mind.

It is also disturbing that an organization is singled out for being too successful ... or is Wal-Mart being singled out because their competitors are being "too unsuccessful"?!?!

I find it difficult to condemn a company like Wal-Mart who, unlike other retailers and marketers, actually delivers on their marketing statement and their compelling commitment to "Low Prices. Always".

Let's also not forget, these same toy companies were for years, happily raking in all of those Wal-Mart sales dollars. They became 'hooked' on Wal-Mart purchase orders like a drug; doing everything in their power to continue to "feed the craving" -- and in the process, to meet their own expanding sales and profit goals that were now being so significantly influenced by Wal-Mart -- either thru Wal-Mart's own growth or the decline of Wal-Mart's competitors.

So what's the surprise to the toy companies? How difficult was it to project out Wal-Mart's purchase and sales and realize where this road was leading? Ditto for General Mills, Campbell Soup and Del Monte. Or is greed simply as blinding as they say?

But alas! Now the toy companies and others seem to recognize that their short-term thinking has compromised their long-term health ... greed is blinding -- if only temporarily.

All that said, and with a continuing admiration of Wal-Mart for being successful at what they do, here's where I contradict it all:

I believe that consumer-products companies, even the short-sighted and greedy companies, have the right -- and the responsibility to their employees, shareholders, suppliers and business partners to control their own destiny by closely managing those variables that impact their business, vision and livelihood.

In other words, I'll respect, foster, benefit from and marvel at your success until it threatens my own success.

So if the toy companies feel forced to take such measures as limiting sales to Wal-Mart and developing unique products that allow other retailers to co exist with Wal-Mart in order to control their own destiny and their ability to succeed -- so be it.

The alternative is simply too high of a price to pay. Always.

Also about Wal-Mart, one MNB user wrote:

I believe they have too much power. As many people already know, they put smaller businesses out of business. I think they are becoming a monopoly and there are laws against that.

Several cities in California have kept them out of their cities with zoning laws, etc. I am embarrassed to say that there is one of their stores in my city. The only thing I can do to protest their being there is to not shop there.

Regarding the new Maytag home vending machine that we wrote about yesterday, MNB user Paul Schlossberg wrote:

Some useful background might put this in perspective. Vending equipment sales have been down (versus prior year) for some time. The economic slow down in manufacturing across the US (factories are a big part of vending volume) has slowed vending product sales and hurt equipment sales in almost category except ice cream machines. They're simply going after a new market, in this case vending machines at home, for their established products.

Look at the problems Skybox could solve for thirsty sports fans at home. No need to leave the room for "a cold one." All that beer (and maybe even some soft drinks) will no longer occupy valuable space in the kitchen refrigerator. You don't need to have any coins or bills as you approach the vending machine.

As for Maytag - it seems to me that the Skybox introduction is worth their time and effort. Give people a choice. They can open a refrigerator door and take out a cold beverage. Or they can walk up to vending machine, featuring their favorite team logo, push a button and get their favorite cold beverage.

This is, for the moment, a potential growth market without competition for Maytag. That is much different from what has been happening in the traditional vending channel. It will be interesting to see if Skybox is success.
KC's View: