business news in context, analysis with attitude

Yesterday we took note of a Boston Globe story about how Spring Hill Dairy Farm, which has been identified as the source of tainted water that was sold under private labels at chains that included Whole Foods, CVS, Stop & Shop, Market Basket and Roche Brothers, has closed down its water business. The company blamed the media and the regulatory environment for the move, continuing to maintain that it had operated within federal regulations.

I thing it was rather disingenuous - and that’s putting it mildly - to blame the media for reporting on an entirely legitimate story; I also commented that while the regulatory issues did create problems, that’s no excuse:

I still think there is a problem that when chemicals like PFAs are found in water, there needs to be a mechanism for everybody to be told - stores and customers - and the water gets taken off the market. Way too many regulatory loopholes here for my taste.

Not to mention companies that may have been more interested in their bottom line than consumers’ well-being.

MNB reader Carl Jorgensen responded:

We recently bought 6 gallons of Whole Foods 365 brand spring water. Then we saw the Boston Globe article about Spring Hill Dairy Farm water being contaminated with PFAs. We checked the 365 water labels, and sure enough, the water was from Spring Hill Dairy Farm. We took the bottles back to Whole Foods, where our money was immediately refunded, and the customer service desk told us that it had been recalled by Whole Foods. That’s the right way for a retailer to handle a situation like this, regardless of state vs. Federal standards.

Agreed … but I would suggest that retailers can and should go farther. If you paid for that water with a card - and especially if you used an Amazon Prime membership at checkout - Whole Foods should’ve known that you bought that water, and reached out to you proactively.

Yesterday we also reported that D-I-Y retailer Lowe’s is laying off thousands of store employees who do things like assemble barbecue grills and perform janitorial services; the company will be outsourcing those jobs in an effort to cut costs and improve profits.

I commented:

This strikes me as an Instacart-style mistake. Short-term it may save some money and make the quarterly results look better. But long-term, Lowe’s may be giving up the kinds of services that could be a differential advantage if properly deployed. You outsource stuff like this, and you suddenly have people doing things that could end up undermining your brand equity and value proposition.

One MNB reader wrote:

Almost everyday I receive an email from Home Depot about some special promotions.  On the other hand, I have a Lowes credit card and shop their occasionally, but I have never received an email from them.   Their stores are brighter and cleaner than Home Depot, but to me they have no image other than convenience.  And as they close stores, the convenience factor is going away.

Finally, we reported yesterday that as United Parcel Service (UPS) and FedEx introduce Sunday deliveries as a way of keeping up with an e-commerce economy in which customers want everything tomorrow and retailers want to keep them happy, they’ll be paying the Sunday delivery folks lower wages than paid to weekday drivers.

I commented:

I could be wrong about this, but the situation strikes me as one that is ripe for labor discontent, which wouldn’t be good for FedEx and UPS if suddenly its Sunday workforce got a case of why-don’t-we-make-as-much-as-the-the-folks blues. I understand that in order to make Sunday delivery work, they need to make it cheaper to execute. But this strikes me as yet another case in which consumers are being sold something but they don’t really understand what it costs. Which is fine, until it falls apart, which it well could.

One MNB reader disagreed:

Nobody is forcing these people to take those jobs.  If the salary makes the supply of workers lag the demand for workers, the companies will obviously either have to increase them or abandon Sunday deliveries.

The one thing they won’t be able to do is abandon Sunday deliveries. Once that door has been opened,. it can never be closed … at least, not without doing severe damage to the business’s customer appeal and competitiveness.
KC's View: