business news in context, analysis with attitude

Yesterday, MNB took note of an Acosta study saying, in part, that “thirty-three percent of shoppers go to more than one retailer due to not finding all the products/brands they want at one store.”

One MNB reader responded:

Loved this comment. That’s unchanged from a 1960 study done by Willard Bishop and Western Michigan University. Early in my CPG career I was able to utilize those results to help retailers and our field sales team see the (lost) value of out of stocks.  OOS=Lost Business. Too bad it remains relevant.

Thanks for the history lesson. I wonder if it is even more relevant today, simply because e-commerce companies often don’t have the same out-of-stock issues.

Regarding the contention that many companies will use lower taxes and higher profits for things like share buybacks and higher rewards to shareholders and executives, and not for higher wages and more hiring, one MNB reader wrote:

Buybacks can be seen as a signal that the company sees their stock as undervalued which investors love to hear.  Buybacks are also done in lieu of dividends when a company has excess cash and doesn’t know where to invest it.  I’m not sure I would use Home Depot as my “tea leaves” example of the implications of potentially changing tax policy.  After all they are in the retail sector, an area of the economy where everybody is skeptical of investing unless of course you’re buying Amazon stock.

MNB reader Joe Ciccarelli had some thoughts about the tax proposal currently in conference committee:

The Republicans blew this whole tax deal. The special “tax Holiday” of 10% on corporate profits parked overseas should have had some caveats – like the money has to be used for investment – plant, equipment, R & D, hiring’s and even a special extra deduction for bringing manufacturing back from a foreign country. Any of the money used for share repurchase, excessive bonuses or extra dividends - that portion gets taxed at the regular rate. I don’t see this tax plan as a win for the average working person or couple. And by the way, Trump is wrong – this is not the biggest tax cut in history – a guy name Reagan gave Americans the biggest tax cut followed by George W. Bush.

And finally … extra credit to all the MNB readers who appreciated the fact that I got the words ‘Fargo” and “wood chipper” into the same story yesterday.

Glad you’re paying attention.
KC's View: