business news in context, analysis with attitude

Got a number of emails responding to last week's piece about the coming end of Tesco's Fresh & Easy experiment in the US.

One MNB user wrote:

One of Tesco's big mistakes was not learning from all the other EU food retailers that entering the US market is not that “easy” and business here is not done the same way as over there. Having worked with many EU based food manufacturers and retailers I can tell you that they really don’t get the US, or if they do, think they can change it to their style of operations, forgetting about the size, difference in population and culture, brands vs. store brands and the list goes on. Said way back at the beginning, they wouldn’t make it.

And another:

Tesco’s failure in the U.S. points to one of the faults of marketing in the 21st century- what people say they want is not what they actually want.  Additionally, measuring the responses only from people who are willing to provide information ignores the vast, so-called “silent majority” who don’t provide marketing input. 

A great example of U.S. food marketing success is Shop Rite/Wakefern in the Northeast.  Stores are locally owned and decision makers know instinctively what their shoppers want.

The argument was made last week that Tesco's Fresh & Easy effort was one of the biggest flops in recent food retailing history, which led one MNB user to write:

I would put the purchase of Dominicks by Safeway right there with the Tesco flop.   Safeway purchased Dominicks for about 1.6 billion dollars and then tried to sell it off a few years later and could NOT command even 500 million dollars for a loss of over ONE BILLION DOLLARS.  what Safeway has done with a vibrant competitive chain is a travesty.  and Safeway made many of the same errors that Tesco delivered.  Safeway did please one group…..Jewel and Supervalu!!

And another MNB user chimed in:

Maybe we're finally close to sticking a fork in Fresh & Easy. In my mind it just appeared to be DOA. Small, conveniently located stores with fresh food sounds like a great idea. Tesco's execution seemed awful at every turn. Just the appearance of the stores was the first sign that something was seriously wrong. I fully expect someone to be wildly successful with this kind of store. Tesco just proved to not have a clue about the US market.

We continue to get email about the CVS decision to establish a new rule for its employees - they have to go through an annual evaluation of their weight, blood sugar, blood pressure, cholesterol and body mass, or pay an annual $600 surcharge on their insurance premiums. And "going forward," the company policy says, "you'll be expected not just to know your numbers - but also to take action to manage them." In addition, employees have been told that they have to stop smoking by May 1, 2014, or have enrolled in the company's smoking cessation program, or will face potential fines and penalties.

MNB user Peter McNaughton wrote:

Kevin ,you surprised me when you seemed to miss the obvious tone deafness CVS has displayed toward their employees. Many companies today including my own want this type of information to manage employee health programs with the obvious goal of reducing healthcare costs, but the heavy handed give us the info or we will surcharge you not nearly as effective as perhaps a program where the data is supplied and discounts given to employees premium contributions, for improvement in the numbers. Since that approach was taken with my employer several years ago, company average cholesterol, BP, and BMI numbers have decreased and employees have a positive attitude toward healthcare….or I guess a company can just tell it’s employees give us the info or we will surcharge you…all about the tone.

Another MNB user wrote:

Our company, too, has 4 major wellness scores that must be met in order to keep employee's medical insurance contributions to zero.  Fail one or two of those goals and premiums increase a certain amount.  Fail three or four of those goals and a higher premium contribution is required.  This is an annual process, has been so for several years.  Regardless of what some of your readers may say, our company's goal is to have every employee pay zero toward their coverage.

One of the intended consequences of this process is finding employees each year w/life-threatening scores in blood pressure, cholesterol, and/or glycemic index (smoking is the fourth criteria) that can be treated because the condition is now known (all names are masked to the company).  Even though our company has "Cadillac" insurance, there are still employees who never think of visiting a doctor.  As such, life-threatening conditions go undetected. It is not a stretch to say that our wellness plan has significantly affected specific employee's health in a most positive way.

And from another:

Hum, what I don’t get is people don’t want the government in the business, don’t want the employer in the business, don’t want Obama Care, don’t like the high cost of medical care, don’t want to ban smoking, large sodas, the intake of salt, sugar etc… BUT at the same time do little if anything themselves to help themselves, beside be part of a growing deadly health issue that is being passed down to the kids like the federal debt…

We had a piece the other day about a new Seattle store called Hointer, which sells men's jeans. According to the Seattle Times, at Hointer "designer jeans hang from metal racks attached to the ceiling, their QR code tags easily accessible. Shoppers use smartphones to scan what they like, and a robotic system in the back delivers items to their dressing rooms, where they can then send for different sizes and colors via the Internet. To make a purchase, shoppers simply slide their credit cards through a machine and leave without ever talking to a single salesperson."

One MNB user responded:

Regarding your mention of the new men's clothing store called Hointer, I've had the chance to visit it on two occasions and thought I'd offer a few observations. Contrary to its owner's assertion that it is an "ugly duckling" I thought it was actually really cool looking.

On each occasion there were numerous technological glitches, but I'm sure they will iron those out. The only thing I'd add is that the overall experience really isn't markedly different than purchasing jeans at Macy's.

You pick out a pair of jeans you are interested in, you try them on, decide whether or not to buy them, and then pay and leave. True that you can pay without talking to someone, but there are plenty of friendly workers to chat with while you're there. I'll certainly go back because they're in the neighborhood and the people were nice. But this is hardly some disruptive new retail experience.

From another reader:

I love this concept. It would be enough, if locally available, to have me upgrade to a smartphone. Pushy or intrusive sales people are one of my pet peeves, but alternatively, finding someone when you need the fitting room door opened can be even more challenging than dealing with an overzealous sales associate. I would frequent a store that made it easier for me to try on clothes and have alternative sizes whisked to my fitting room. I am ready to go shopping.

MNB user Don Skiver disagreed:

What the hell? Am I the last person on earth that actually enjoys talking to sales people, seeing people interact in a store and so not impressed with the whole “I can order, check myself out, and never interact with a human person” experience? I would hate to shop in a store like that.  Not saying there are people out there that might like it, but I am not ready to give up the human dynamics yet.  I refuse to use self-checkout.  Even bad experiences in checkout lines once in a while are not worth the trade off of missing the human interaction to me.

Finally, reacting to the fact that the federal General Accounting Office (GAO) has said that the US Postal Service (USPS) lacks the authority to simply stop doing Saturday mail delivery, one MNB user wrote:

I’m about two more mailboxes full of direct mail and political crap away from discontinuing my mail service completely. The only thing holding me back is figuring out how to get annual tax filing information sent to me online???

That's a good point. There ought to be a way, for example, to have companies send me 1099s via email, rather than using paper and stamps. I could then just forward them to my accountant, who could include electronic versions with my tax returns. Be a lot easier...
KC's View: