business news in context, analysis with attitude

Responding to our stories about Hampton Creek sending out employees to buy its products to drive up sales, MNB reader Peter Talbott wrote:

This story reminds me of the Mad Men season 4 “Public Relation” episode.  Peggy and Pete pay two women to stage a faux fight over the last Sugarberry ham in a supermarket, and alert news crews in order to generate publicity with a minimal budget.  Naturally things go awry.  When Don finds out he responds, “I don’t think it’s funny or cute.   I try and stay away from these kind of shenanigans”.

And MNB reader Jim deLuca chimed in:

This reminded me of a business case that we covered back in college.  At some point, 409 cleaning spray got some industrial espionage about a new competitor running a test market and went with a BOGO on their 409 in order to undermine the sales of the new product.... shoppers would not need any new spray for way past the test of the competitor so the competitor might decide not to go to market...

Regarding the acquisition of King's and Balducci's by a private equity group, one MNB user wrote:

I hope the recently announced acquisition of Kings and Balducci’s provides them with the capital they need to expand their newest format to more stores.  Kings does an amazing job of carving out a unique position in the highly competitive, Northern New Jersey market.

I was just in the King's store in Old Greenwich, Connecticut, the other day, and I found it to be a little gem, with a terrific staff that seemed totally engaged with shoppers. So I agree.

We had a story the other day about how Walmart's acquisition of Jet could hurt Jet's ability not to charge sales tax in most markets around the country. Leading one MNB user to write:

As noted in the reporting, the current sales tax advantage that internet-only companies is enjoying, is a price advantage that has been legislated/ruled, creating an unfair competitive advantage for them.  I wonder what will happen to stock prices and continuing sales if this unfair playing field is leveled.  I believe the initial advantage created in the 1992 Supreme Court ruling is out-dated and has served its purpose in jump-starting e-commerce.  We need to return sales tax revenue back to the local economies, as well as encourage more jobs locally.  I view with interest and support the work that FMI, NRF, and others are doing to lobby and bring legislation forward to correct this issue.

Regarding the study saying that self-checkout systems encourage usually law-abiding people to steal, MNB user Chuck Lungstrom wrote:

Back in the day when I attended a seminar concerning loss prevention, the guest speaker relayed some interesting and rather disturbing facts about the subject of theft.  This study included both customers and employees (and sales representatives and vendors for that matter). Basically, anyone that walks in the door.  People are people whether they work for you or not.

According to him the breakdown was as follows:  40% of our customers/employees will look for opportunities to steal and then do so, 40% of our customers/employees will not look for opportunities; however if the opportunity is presented to them....they will take advantage of the opportunity.  That leaves only 20% of our customers/employees that will not steal from us.  Really, only 20% . .  . . . 80% of our customers/employees when given the opportunity will steal from us and only 20% will not!  Disturbing!

Our job as retailers is to minimize the losses.  Prevent the 40% that will look for opportunities, dissuade the 40% that can be dissuaded, and applaud the 20% that are honest.

This is a perfect example of Pareto's 80/20 rule gone askew.  Oh, that it would be the other way around.  Unfortunately, I have adopted a rather pessimistic view on this subject after many years of experience processing loss prevention claims against customers, employees, vendors and even sales reps . . . . . . many of which I would not have thought possible.

And from another reader:

I always enjoy reading your commentary as well as views from readers.  I wanted to add a “positive” comment regarding the story of the study around theft at the self-checkout machines.  I had the benefit of being able to run an analysis of many metrics of these machines while I worked for a large grocer.  Aside from the usual thefts or “mistakes” that can occur, I was also able to note a positive feature of the machines.  In the product lines that might be considered embarrassing to purchase (condoms, pregnancy tests, etc), stores with the self-checkout units had lower shrink of these items versus stores without the self-checkout machines.  In addition, when looking at the items from shoplifter reports (items stolen), again stores with these units had much lower instances of theft of these items.  So along the lines of thought that people might be enticed to steal when given a chance (at a self-checkout), you can also make the case that at these machines, others might be more enticed to pay for their items.

Finally, I got this note from a reader about a reference I made to a horrible meal I had in Rawlins, Wyoming, last week:

Oh my gosh, I can’t believe you mentioned Penny’s Diner. My husband and I and my parents went on a road trip from Kansas to Boise in July. We stopped at that same Penny’s - for the same reason you did. We had the same experience and got a few “can you believe it” stories out of it. Awful!

I guess there's something to be said for consistency...
KC's View: