business news in context, analysis with attitude

We had a piece on Friday about Mark Murray - the former president of Grand Valley University who apparently has only been in supermarkets as a customer but now is the new president of Meijer Inc. The board apparently believes he has the right leadership abilities to guide the chain.

Our comment: Leadership is a good thing, and probably in too short supply in an industry where sometimes it seems like there are more managers than leaders.

That said, some modicum of experience in the retailing business might be useful in the competitive cauldron of Michigan retailing. In academia, where Murray comes from, the biggest challenge is publish or perish. But in retailing, the stakes and the pressures are a lot greater. This will end up either being a master move by Meijer, or an utter disaster.

This generated a fair number of responses…

One MNB user wrote:

Collaboration and consensus are the usual means of leadership in academia (It’s all about “we.”) versus the dictate and tirade style common in corporate America (It’s all about “me.”). We may see that Meijer isn’t so much bold as visionary.

MNB user Phyllis Palmer wrote:

Reminds me of the line in the original “Ghostbusters:”

“Personally, I liked the university. They gave us money and facilities, we didn't have to produce anything! You've never been out of college! You don't know what it's like out there! I've ‘worked’ in the private sector. They expect ‘results’.”

MNB user Jackie Lembke wrote:

I would disagree somewhat about academia being simply publish or perish. That might hold for the instructors, but the president's job is more marketing than publishing. Universities must also have a point of difference to attract students. There are lots of choices for post-secondary education and appealing to a wide range of consumers is a necessity for any university or college to survive. I am not disagreeing that some retailing experience wouldn't be helpful, but both jobs demand that you find what attracts you to your target and emphasize why your entity is a better value than the one down the street or online.

You’re right. The “publish or perish” line was us being glib. Murray deserves better than that.

Besides, as MNB user Bill White wrote:

Let us not forget what a great CEO & leader Joe Pichler made at Dillon's and then at Kroger. His previous job - Dean of the Business School at Kansas University! I was working for King Soopers at the time he was hired to take over Dillon's, and was similarly skeptical about his lack of a retailing background. However, one meeting with him and my skepticism turned to utmost respect. I realize that was in the early eighties, and that today is a different environment in retailing, but let's give Mark a chance, if only because we have the Joe Pichler success story as historical fact. Sometimes a very smart guy who has only been a customer can be a great help to a company such as Meijer, an outsider looking at things through the eyes of a customer can be a really good thing!

It was mentioned in the story that on a tour of Meijer’s stores, Murray was accompanied by other members of the Meijer management team, including Doug Meijer, co-chairman, and Paul Boyer, vice chairman and co-CEO, a position he shares with Hank Meijer.

Which led one MNB user to observe:

Who makes decisions at Meijer with Chairman, Co-Chairman, Vice Chairman, Co-Vice Chair and President? I’d love to see their job descriptions. Trying to put everyone in a decision-making role is a recipe for disaster especially when some are family members!

The Chicago ordinance giving employees of big box stores a higher minimum wage continues to be an attention-getter, especially since Target decided last week to pull out of at least one development it was planning on for the Windy City.

MNB user David Livingtson wrote:

Target was probably not over ecstatic about opening those Chicago stores in the first place. Even without the wage ordinances, it takes years to get site plans approved and permits issued anyway. They probably needed a real good excuse not to pull the trigger and now they have it. Now they will hope to make the Chicago city council their whipping boys to make a point and send a message to other governments.

Hopefully Target and Wal-Mart will milk this for all its worth. This is not bad news for the big box stores. Similar to the way Whole Foods got out of the unprofitable live lobster business. They are able to get more mileage if they claim it was cruelty to animals instead of being an unprofitable product. The suburbs will be tripping over themselves to offer Target, Wal-Mart and others corporate welfare and quick planning approvals. I don't think the city and unions would want them even if they paid $15 an hour. Wal-Mart would be a big threat to Jewel and Dominicks and probably result in multiple store closings and the loss of hundreds of union jobs. Otherwise, the city would have made it fair and had the wage ordinance apply to all billion dollar retailers like McDonalds and Walgreens. This is all about protecting union jobs. Which maybe is not all that bad.

MNB user Ken Fobes wrote:

I have some serious doubts as to whether this legislation would hold up in a court of law (i.e. Maryland). If this legislation isn't discriminatory, I don't know what is.


MNB user William Schober wrote:

Some of the more radical members of the city council either voted for the corporate chains (Dorothy Tillman) or clearly signaled grudging support by abstaining (Helen Schiller). I think they understand that the lower prices those chains will bring to their entire neighborhoods will have the effect of raising the purchasing power for everyone -- a tremendous social benefit that nobody seems to acknowledge. It was the working/middle-class aldermen who were pushing this thing.

If Wal-Mart had a history of entering a market, running competitors off with artificially lowered prices that could then be raised back to profitable equilibrium later on -- I'd vote to keep them out. But that is not Wal-Mart's practice. They keep their pencils sharp.

By the numbers, the council vote was termed veto-proof. But a lot of aldermen did not know how to vote because the Mayor didn't tell them what to do. When he snaps his fingers, they fall in line.

I am sure the city has an agenda here. The Mayor makes the rules in this town, and he seems to be playing the game in a peculiar way right now.

The vagaries of Chicago politics elude us, to be honest.

Another MNB user wrote:

If you live in the Midwest, you can’t be looking at what Ford and GM are going through and not realize that laying off welfare costs on private industry is a bad idea. Both these companies are fading in the glare of the Japanese sun because they can’t produce a competitive car due to significantly higher legacy costs. Now the folks who thought that was a good idea, now want to do the same thing to the successful large scale retailers. Mayor Daley is right to fight it . If they create a “big box ring” around the city limits a lot of sales tax money will go with it. And Chicago will be left with mom and pops, hard discounters like Aldi, and Dollar Stores...not a group of retailers known for their generous wages and lavish benefits.

Responding to the accusation that MNB has turned into a Wal-Mart apologist, one MNB user wrote:

I, for one do not think you are being an apologist for WM or any big box retailer. Maybe I have missed part of the debate the past few weeks, but has anyone thought about how this plays out for the small retailers supposedly protected by this legislation? First of all, I suspect that a majority of the small retailers are paying minimum wage or slightly above, and I do not know if they are offering any benefits. If they are chain drugs like Walgreens, or smaller chain stores that have the infrastructure, they most certainly do. However, do we know if the companies with less than a billion and stores under 90,000 square feet are providing any better for their employees than the box stores? Would like to see more information. I also believe that if jobs are available, people will travel to them, based on the traffic I see on the “el” and the CTA train from O’Hare to downtown and back I have ridden many times when I have traveled to the city for business. People are on there commuting 15 and 20 miles to jobs, so with an excellent transportation system and housing that is affordable within the tolerance of the worker, it seems that a living wage can be made. Anything beyond that is up to the individual, so I don’t buy the City Council’s logic.

I think if Mayor Daley allows it to become law, we will see the impact in 4-5 years, when the 'burbs ringing the city pick up all the sales and property tax revenue, and City of Chicago has either a) more businesses leaving because the amenities remaining can’t handle the demand of the workers remaining, or they cannot attract workers because the amenities are not there. I hope they rethink the whole thing or show the public the facts and figures behind the bill so we can see what they see in the future. I’d hate to see the city go into a “death spiral” and fall to Houston as #3…

On the broader issue, MNB user Doug Galli wrote:

Since when has it become the responsibility of an employer to make sure that everyone is paid a living wage and is provided with full health benefits. This is a free market economy and we should let the market decide. If an employer can't find enough good workers they will offer more pay and benefits as they compete with other employers. By mandating a certain wage and benefits, they only people that will pay for this is the buying public.

For example with the increase in minimum wage for both NY and PA, the company I am associate with will begin to raise retails because our payroll will increase substantially next year.

The officials only want to get re-elected and have no idea of what it takes to run a business.

MNB user Al Kober wrote:

This idea that Wal-mart is so unfair to its employees keeps coming up.. Did anyone see anything about just how Wal-Mart treated their employees after Katrina. They follow up of about 95% of their staff that was displaced and offered them jobs at other Wal-Mart so they would not loose their income.. The new Wal Mart in Chicago needed 350 new employees and 5000 turned out for those jobs.

People who do not work for them seem to be the most vocal about just how terrible they are , but how about letting their employees speak for themselves. They do that everyday when they decide to go to work.

Some of them, of course, also file lawsuits and seek unionization. But granted, that seems to be a minority.

MNB user Rush S. Dickson III wrote:

What is it about us that keeps from getting to and dealing with the fundamental issues at hand?

When government attempts to "manage" the market place reaches a certain point of interference, market forces triumph. The notion of a mandated minimum wage is an arrogant chimera. Who is to say what a given job is worth to someone other than oneself? That issue is a function of supply and demand and should be allowed to be negotiated accordingly.

Why did 20,000 applicants show up for 300 jobs at WMT?

The notion that the government is capable of setting the market price for health care is just as absurd for the same reason. Why are health care costs out of control? Demand (inflated via third party payment that reduces the cost burden to the individual) is greater than supply. DUH. It is our government (US, the voters) that has created this situation.

Have you ever stopped to wonder why the cost of living in large metropolitan areas is so expensive? Might it be a function of the tax burden that results from too much support for too many unproductive people through this or that program, agency, etc?

We allow government to control just enough of the factors in the economic equation (usually supply and demand) to throw it out of balance.

And MNB user Tom Drummond wrote:

I too believe in a complete 'living wage' that is fair for all retailers, and employee's. But, I commend Target in threatening to pull out, and not allowing the City Council of Chicago telling them how to run their business. Typical City Council power control move, and also reflects why Chicago has had the corrupt political reputation that it has had for so many decades.

MNB user Ray England had some thoughts about the Senate’s vote against the increase in the minimum wage as well as against a more permanent repeal of the estate tax:

Two different thoughts here; the logic behind the minimum wage is idiotic, and the estate tax is immoral. Frankly I don’t know what to think about Republicrats (Republicans in name only, they act and vote like liberal Democrats). They continue to miss opportunities to do what the folks that elected them expect from them.

The argument behind the minimum wage is ridiculous. The theory is that minimum wage earners can’t support a family on the minimum wage. That’s true, but the minimum wage was never meant to enable an individual to support a family. Look, when the minimum wage goes up, the cost of goods goes up, and retail prices go up proportionally. So, where does that leave the minimum wage earner? Everyone looses with a government dictated wage hike; businesses and consumers alike.

The estate tax is nothing but class warfare. One may not like the fact that Paris Hilton will inherit millions without having to work for it, but that’s just the way it is. Perhaps your folks weren’t rich, but taught you how to be a good person, how to stay out of infra-red camera light, become a model citizen, and how to make your way in this world with some success. But watch out, if your folks did a better job of that than some crack smoking, non caring parent. The government may try to take some of your hard earned money because it is not fair that you enjoy success that others less fortunate don’t. Oops, forgive me, but our government already does that with the income tax they confiscate from your paycheck; silly me.

For the Republican Republicrats in the House to tie a minimum wage increase to a repeal of the estate tax is just down right stupid and shows how they continue to “misunderestimate” their constituency.

Finally, we wrote on Friday about ignoring the politics of the Dixie Chicks and taking our 12-year-old daughter to their terrific concert at Madison Square Garden because “it is good for a young girl to see assertive, talented and obviously empowered women owning the stage and the audience."

One MNB user responded:

Your comments are totally true….and you deserve credit for being the dad that takes her to the concert and is therefore telling her "and I'm a guy and I think it's okay for you to be this way". I know we're not in the 50's anymore but a gender gap still exists and many times women cannot be seen as assertive, talented and empowered without also being called many other names. Never discount the impact a father has on his daughter. Thanks!

Our pleasure.

We were driving with our daughter the other day and she asked us what the best universities in the country were. We responded with the usual list: Harvard, Yale, Stanford… She smiled and said, “I think I’ll go to one of those…unless I decide to be a chef and go to the Culinary Institute.”

All of which gave us tremendous pleasure. Nothing like knowing you have options.

We’re big on empowered women.

You should meet Mrs. Content Guy.
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