business news in context, analysis with attitude

We continue to get email about the likely sale of all or part of Albertsons and what appears to be CEO Larry Johnston’s contention that things aren’t all that bad.

We haven’t been buying…and most MNB user seem to agree with us. One member of the MNB community wrote:

Keep it up on Albertson’s…it is apparent that Larry Johnson doesn’t know what he is doing there…he may have been a wonderful exec at GE where the business and culture was already established, but from the outside, I can tell you that the company is doing its best to screw its vendors – and that type of behavior can ONLY come back and bite them in the butt in the end…

Another MNB user wrote:

Albertson's converted some of their markets to Extreme Super Saver Food Stores. What a joke. Even though the stores get their merchandise from Albertson's warehouses, you can't get half the product mix
Albertson's stores carry, the quality of meat and produce is lower grade than Albertson's, and as for Johnson tooting technological improvements it is a shame that independent stores have better equipment than Extreme. Johnson needs to go, period, but of course he and his cronies probably have some kind of golden severance package after screwing the regular hard working employees who have got nothing anymore.

Good riddance, Johnson. Go back to GE. NO wonder they passed him up for the CEO position.

Lot of bitterness out there…

We reported yesterday that Federated Department Stores announced that it is converting its Marshall Field’s stores to the Macy’s banner by autumn of next year. "We have great respect for the legacy and traditions of Marshall Field's, and we carefully researched customer preferences and studied alternatives before making this decision to incorporate Marshall Field's into the nationwide Macy's brand," Federated CEO Terry Lundgren said in a statement. The company also announced that it is “studying its options” for its Lord & Taylor division.

Our comment:

With all due respect, we think this is a load of crap.

We think that the only research that matters to Federated in this case is that done into its accountants’ preferences. The guys with the eyeshades no doubt believe that one brand name will cut down on advertising and marketing costs. But we cannot imagine any circumstances under which it makes sense to stop using a grand old retailing name with so much consumer resonance and history in America’s Midwest.

It so happens that we’re in Seattle, where we spoke at a conference sponsored by Associated Grocers. A similar change took place here, when Federated converted the Bon Marcher chain to the Macy’s name – and there wasn’t one person in the audience who seemed to think it had been a good idea. One person said that it only meant that the store had to offer more promotions to get people in the front door. (We’re not from Seattle, but even to us the Macy’s name on the building looks a little odd.)

This kind of centralization almost never makes sense, because it is based on the needs and the desires of the company – not the needs and desires of local consumers.

Lots of response to this story and analysis…

MNB user Jan Owens wrote:

You're right -- Federated's justification is a load of crap. As a former New Yorker, and someone who likes to shop at Macy's when I'm in New York, changing Marshall Field's name is a real come-down. I expect that anything special about Field's, where I shop now that I am a Midwesterner, will be to move the store to homogenized down-market.

When I get a minute, I'm canceling my Field's account, and I don't expect to get a Macy's card.

One MNB user wrote:

I’m not the biggest fan of department stores, but they certainly had something to offer when they represented the diversity of our country’s many regions. All this consolidation makes me wonder how the continual homogenization of our culture will play out, and when someone will step up to differentiate themselves in this arena.

Another MNB user wrote:

I couldn't agree with your view more. In fact, your words are nearly identical to what I said to my wife at breakfast this morning as I read the article. Federated's CEO has either been grossly misled by his subordinates or is engaged in the kind of nonsensical pleasant speak that characterizes many companies today.

I am not from the Mid-West, but my wife is. Consequently, I have enjoyed shopping at Marshal Field's many times when paying family a visit. Neither my wife nor I can imagine why an entire region of the country that has grown up with Marshal Field's and built fond memories with them (as my wife most certainly has) would cry out to change the name to Macy's.

It's hooey.

We don’t believe the CEO is being deceived by anyone.

Yet another MNB user wrote:

I live in Seattle and I still refuse to call our Bon Marche Macy's. The Bon was a longstanding tradition here in the NW and I'm sure the people of the MidWest will feel just the same . (Ironically, I grew up in the MidWest and have fond memories of going to Marshall Fields and Lord & Taylor).

They've got serious consumer brand loyalty to these names and they really don't seem to care.

And another MNB user wrote:

Plus they’re taking our beloved local Filene’s and converting it to a Macy’s. This is just bad marketing and poor judgment on their part. I don’t believe that Macy’s will have the long life enjoyed by our Filene’s. In fact, I predict it won’t last more than a year in the Rotterdam (NY) Mall. This is not a high-end area and I don’t see the local, predominately blue-collar population shopping Macy’s. You could always find great bargains at Filene’s and that is what this area looks for.

What are they thinking!

MNB user Richard Sokolnicki wrote:

It appears that a century or more of built up image equity in these names means nothing in the short run. So what will Wal-Mart rename all the stores when it eventually gets into that category of D store...and buys Federated? It's sad to say that it's becoming a very dull retail landscape out there...

Finally, we had a story yesterday about how the Starbucks coffee shop on the campus of Baylor University in Texas, operated by Aramark, has stopped using some of the familiar paper cups that bear a specific quote. (All of Starbucks’ paper cups carry one of more than two dozen quotes that are designed to range from the inspirational to the provocative.) The reason? Baylor is a Baptist institution, and the quote is from novelist Armistead Maupin, who happens to be gay – and the quote is seen as being inappropriate for a religious college.

In addition, at least one organization - Concerned Women for America, a national Christian women's organization – has accused Starbucks of promoting a homosexual agenda with the cup. The Gay and Lesbian Alliance of Central Texas has said that pulling the cups is unnecessarily restrictive.

The quote: "My only regret about being gay is that I repressed it for so long. I surrendered my youth to the people I feared when I could have been out there loving someone. Don't make that mistake yourself. Life's too damn short."

Our comment:

While Starbucks is happy to provoke and inspire, we’re not hearing any reaction from the company to the pulling of the cups. It understands that you have to respectful of people’s religious beliefs, even if it might not agree with them.

We noted that Starbucks likes to use the cups as “a way to promote open, respectful conversation among a wide variety of individuals.” And, we commented that we didn’t read the Maupin quote so much as promoting a gay lifestyle as promoting the notion that life should be lived without fear…which doesn’t seem like such a radical concept to us.

One MNB user responded:

The quotes on Starbucks cups, and the resulting controversy- surely a boycott by conservative and Christian groups will follow- highlights the problem of companies that want it both ways. Starbucks gives 100% of its corporate financial support to “liberal” causes. Their cups are another vehicle for them to support their cause/agenda in a more subtle way, or so they thought.

Starbucks can’t be an inclusive community if they intend to stake out and support a corporate position that is contrary to their customers’. I don’t particularly like their coffee, and like even less their politics, and therefore quit supporting them over a year ago. Surely I can’t be the only one.

MNB user Brad Morgan wrote:

Do you think they would also print some quotes from Jesus

I am glad Starbucks is interested in "promoting open, respectful conversation among a variety of individuals". Does this include Christians too? I doubt it.

We don’t know this for a fact, but we’d be willing to bet that a number of Starbucks’ top executives practice one religion or another, and that certainly some percentage of them are Christians of one kind of another.

As for including a quote from Jesus Christ, we don’t know. But maybe you should suggest it…on Starbucks’ website, it solicits ideas for new quotes to use.

We can think of one good quote:

“Let he who is without sin cast the first stone.”

And finally, another MNB user wrote:

To Christians, the homosexual lifestyle is a radical concept whether you like it or not. The MNB should stay out of this arena and stick to business commentary.

Seems to us that since some people believe Starbucks is a proponent of a radical homosexual agenda, it seems to us that it at some level is a business story, and therefore worthy of commentary. However, we understand if you want to actively disagree with us, or just ignore these stories and commentaries.

And here’s the other thing. Back in second grade, we were in a classroom run by Sister John Aquin. Even then, she used to tell us that there were plenty of questions we shouldn’t ask, and certain issues that we shouldn’t raise. But we weren’t very good at keeping our mouth shut…which explains the welts. We have sort of a constitutional inability to avoid stuff that people say we should avoid.
KC's View: