business news in context, analysis with attitude

Regarding Tesco's ongoing problems, one MNB user wrote:

Kevin, I’ve been in Europe this week, in /  out of a few Tesco stores. One of the key issues they face is that they haven’t really reinvented their in-store space. The Extra format stores are simply too large. The multi-level stores need to enhance their lease-space arrangements to include other ancillary stores. The Café seems to get so little traffic and their food selection is very poor. One would have thought Tesco might expand its restaurant offer.  The most exciting department in their stores is eReader / HUDL, where Tesco has done a great job at coming up with a platform to get into the game against Amazon. The phone shops seemed to have some traffic in them; the same cannot be said about the more conventional center store.  Their “price aisle” to compete against Aldi comes up short; reminds me of several US retailers who tried to create club pack aisles to compete against Costco, but prioritized price-only above the treasure hunt atmosphere element.

I also wonder if Tesco hasn’t become too reliant (self confident even) on their Dunnhumby data around what’s selling today vs. tomorrow. The stores just didn’t feel as “trend-right” as they have in the past. And, could the same thing happen to Kroger?

Got the following email from MNB reader Thomas Palmer:

A few years ago I took a little time to satisfy a long time desire to bolster my knowledge of sustainability technologies, a subject I touched on briefly many years ago in college – well before it was cool and could only be found in the Mother Earth News. So I went to my local community college to take classes and then did a few years consulting on the subject.

What I saw was a movement within the US to become more sustainable, but utility and fuel lobby groups were pushing back, as well as, some of the organizations that are known to protect the environment. The general lack of knowledge on the sustainability subject, ways to reduce environmental footprint, and the resistance to change put the small consulting group out of business, but I was involved in state of the art anaerobic digestion, solar, wind, and gasification projects – all renewable energy forms that produce less waste than current energy sources manufactured. That is right, energy is manufacturing that is regulated and taxed – a money train.

It is a shame that as technologically advanced as we are in the U.S., the story is about a European company producing energy from waste. This is the same biogas that exits our landfills – we vent it from under the dirt cap we place over landfills when we are done using them. You have seen these green pipes sticking up out of the ground if you pass an old landfill that has been repurposed. Rather than use this energy (which is methane), we vent it so it will not explode underground and in turn pollute the air. Burning it would be better than adding it to the air as methane is one of the worst greenhouse gases, 4 times worse than CO2 per molecule.

My hats off to the European firm that is making a difference and to all of Europe for their desire to get off the money train (which is much more expensive than in the U.S.) and provide a cleaner solution, take environmental responsibility to reduce waste, and add some self-reliance to produce energy from it.

And a little tidbit of information for thought – if you produce electrical energy, it is against the law to distribute it to anyone. You must sell it to the utility company so they can distribute it. And in my state, if you produce over 5 MW of it, the utility can stall you forever on negotiating a price. According to NPR this morning, something like 3 of 60 recent projects over 50 MW in my state has had a price successfully negotiated with the utility company. Lots of energy sitting there going unused.

Responding to last week's announcement that Bill Simon, who has been running Walmart's US discount business is leaving the company, one MNB user wrote:

Interesting assertion (by an MNB reader) that Simon might end up at Target. This is unlikely for a couple of reasons. First, the Walton family makes its senior leaders sign a multi-year agreement that prohibits them from going to a competing retailer for a sizable time period. Canada has served as a place to “park” a person who needs to sit out one of these type of arrangements when they come into Wal-Mart (for example).  I don’t believe any exiting senior WMT executive has been successful getting one of these agreements reversed.

Secondly, it’s hard to imagine Simon being a good fit for TGT. His personal style isn’t disruptive but his expertise would definitely be difficult to integrate into TGT.  Rather, I think Simon moves from retail to a larger theatre,  one in politics, where he would be a great asset in the next Presidential election.

On the subject of Foran:  he was Doug McMillon’s hire, so it’s no surprise Doug is supporting him. Given Doug’s young tenure in the role, the right person for the WMT-US job is someone that will be in the role for awhile, where they can contribute long-term value add and not get antsy after a few years. Greg’s got potential. What goes unsaid is that Foran really can’t put his name on anything he accomplished since joining WMT, Int’l.  He’s very accomplished – pre WMT.

Potential is the greek word for “ain’t done it yet”.

KC's View: