business news in context, analysis with attitude

We’ve stored up a ton of emails from the last week, and we’ll be reviewing them over the weekend for posting next week. But we thought it was worth taking a look at some of them.

On the subject of the lawsuits filed by the Retail Industry leaders Association (RILA) challenging legislation in Maryland and New York forcing retailers of a certain size to spend a minimal percentage of their payroll costs on healthcare, we got the following email from MNB user Jenny Keehan:

First, full disclosure: I work for RILA and have been involved in the filing of our lawsuits in Maryland and Suffolk County, New York challenging laws forcing companies to pay a minimum percentage of payroll for healthcare or pay into a state fund. Though I am sympathetic to your feeling conflicted on the issue as you characterize it, you should also recognize these laws for what they are – political gimmicks aimed at punishing a select few companies; and for what they’re not – a real solution to a real health care issue.

I think your readers will agree that the problems of soaring healthcare costs and access for the uninsured are problems for all their companies, even unionized ones. It is an issue that calls for a national debate among all the stakeholders, not punitive laws that not only do not address the challenges but also divert attention and resources away from the real problem. In fact, according to the Heritage Foundation, Census Bureau data shows that state and local governments in Maryland employ over 20,000 uninsured workers. This collection of uninsured government employees is greater than the entire workforce of any single private employer in the state. But, of course, state and local governments are carved out of the Maryland law.

RILA is being attacked, not surprisingly, as doing Wal-Mart’s dirty work, but RILA’s Board of Directors voted unanimously to pursue these suits. Our members recognize that laws such as these have the potential to impact retailers and businesses of all sizes. In the 30+ states that have introduced similar legislation, the size of the covered companies is as little as 99 employees, and the required health benefit expenditures vary 6 to 10.5 percent of payroll. It is also noteworthy that in Maryland, the NFIB, the state’s small business lobby, opposed this law even though it will not impact a single one of its members.

We hope MNB will keep covering this issue, but not just as a Wal-Mart story. The entire retail industry ought to be concerned about these laws, but also be willing to enter the health care debate with a sincere focus on controlling spiraling costs and expanding access.

Fair enough. We promise to keep an open mind.

But we would respond with two points.

One is that we don’t think we attacked RILA for being a tool of Wal-Mart’s interests. We understand that it is more than a Wal-Mart story…though you’re right, in most cases the legislation has been targeted at the Bentonville Behemoth.

The other point is that we think that governments that force companies to live up to standards from which they exempt themselves are hypocrites. Vote the bums out.

Responding to yesterday’s story about Meijer outsourcing IT jobs to India, MNB user Thomas D. Murphy wrote:

As a former IT executive in the grocery and transportation industries, and now a consultant to same, I can tell you that selective outsourcing in IT and the business is critical to remaining competitive in the U.S. market and certainly in the world market. I find that the best-managed companies have figured out where they can add value and they hoard that work. Everything else becomes a commodity service that gets bid to the best price/quality (value) large, multidivisional companies, this could be a centralized service, e.g., accounting service centers.

Some common examples in IT include network management, help desk, document management, report & shelf label printing/distribution and disaster recovery centers. On the business side, some common ones for grocery include ad production/distribution (not design), coupon handling, check collection and store equipment maintenance. The companies that struggle to make it seem to believe that they can do anything better than anyone else, even on irrelevant commodity services where it is the providers entire business. This is often because grocers only look at the expense line items that are 100% committed to the delivery of the service, never looking deeply in an activity based cost analysis to understand true costs.

Not looking at selective outsourcing makes about a much sense as buying your own sewer company to manage your store waste because you are sure you can do it better than your local government. Go figure!

And, regarding Tesco’s planned entry into the US with “convenience stores” that will roll out on the west coast, MNB user Jim Trella wrote:

I think if Tesco can enter the US market with a truly unique concept in the convenience format, it will do quite well. 7-11, Murphy Oil, Circle K and the like seem to be trying to revamp an old concept with some success, while not doing anything really innovative.

However, the trade class is doing very well as a whole. California is definitely the place to try "something new and different" as well as having the sheer numbers and diversity of consumers to target with a new concept. Tesco certainly has the financial muscle and successful experience in different formats to pull this off.

FYI- I didn't see this article anywhere else in the industry rags this morning. Nice work on getting out an important piece of retail news that all the other guys didn't.

We agree…and thanks for noticing.

And MNB user Brian Fox wrote:

It’ll be interesting to see whether these are convenience stores only or convenience banks that serve slurpies & hot dogs when you consider the Financial Services model they operate in Britain.

The one thing you can count on is that when Tesco opens its c-stores, it won’t be slurpies, beef jerky, cigarettes and gasoline. (Now, we’re painting with an intentionally broad brush here, and we’re not suggesting that this is what all convenience stores are like today. So, don’t barrage us with emails accusing us of slandering the category…we’re just trying to make a point.) It will be different and it will be innovative, and we’d bet on a heavy emphasis on fresh and frozen foods and an unusually high percentage of own-label, value-added products.

Finally, there is one subject that we probably are not going to revisit when we start posting emails from the past week – and that is the subject of our tongue-in-cheek joke about truckers.

We continue to get email on the subject, some of them saying that they enjoyed the joke, and many of them still outraged by our characterization of truckers. Some of them thought that our explanation that we were only joking was inadequate. One person even asked if we were too proud to apologize for humor gone wrong.

The simple answer to that question is no. We’re not. And we do apologize if we offended anyone in or related to this nation’s community of truckers.

We also want to make a promise.

We’re probably going to make a joke that offends someone again. And soon. (Though it almost certainly won’t be about truckers.)

Because we think life is too short to be politically correct, to take things too seriously, and to not take risks. Because everybody should have enough perspective to laugh at themselves. Because we think that often jokes can offer a unique window on the truth. And, to be brutally honest, because we think we’re twice as funny as we probably are.

We know that this means that occasionally we’re going to get smacked around by some in the MNB community, and that’s okay. We’ll post the emails that attack us, giving equal time to all opinions. If this means some people don’t want to read MNB, that’s okay. Go read the other guys – they won’t offend anyone.

We also have a thick skin. And we laugh at ourselves more than anyone.
KC's View: