business news in context, analysis with attitude

Got the following email from an MNB reader:

Regarding Giant’s test of selling expiring food at a discount, note that when stores “dispose” of food soon to expire it does not mean that it is literally thrown in the trash. Many times such stores give perishable items to food banks.  Time will tell if this initiative will could ultimately change that supply for people who depend on it.  Having seen high margin store branded goods nearing their expiration date distributed at food banks, no questing that selling products at a deep discount rather than writing them off as a donation is more profitable.

On the same subject, from MNB reader Kevin Bamford:

While I agree with your take that this is a good move by Giant, consumers and retailers would be better served by a universally agreed upon product expiration dating system that eliminates waste of perfectly good product.

The other day we took note of an Associated Press report about how in a statewide referendum, Maine voters passed what is called "the nation's first 'right to food' constitutional amendment," declaring that "all individuals have a natural, inherent and unalienable right to grow, raise, harvest, produce and consume the food of their own choosing for their own nourishment, sustenance, bodily health and well-being."

I didn't really know what to make of this, but one MNB reader decided to educate me:

This question didn’t get a lot of airtime in the state, as most of the attention (and funds) was for a different question. However, if you dig even a little bit, this was a very deceptive measure that will likely cause issues. Here’s how the question appeared on the ballot:

“Do you favor amending the Constitution of Maine to declare that all individuals have a natural, inherent and unalienable right to grow, raise, harvest, produce and consume the food of their own choosing for their own nourishment, sustenance, bodily health and well-being?”

However, here’s how the amendment to the Maine constitution will read:

“Section 25. Right to food. All individuals have a natural, inherent and unalienable right to food, including the right to save and exchange seeds and the right to grow, raise, harvest, produce and consume the food of their own choosing for their own nourishment, sustenance, bodily health and well-being, as long as an individual does not commit trespassing, theft, poaching or other abuses of private property rights, public lands or natural resources in the harvesting, production or acquisition of food.”

It’s that first part that wasn’t on the ballot that will likely cause lawsuits. If people have a “…natural, inherent and unalienable right to food…”, who has the obligation to provide it to them? Now, this won’t lead to people/businesses being required to give food to anyone that wants it, but what if someone says SNAP benefits are inadequate? Or that there isn’t a food pantry close enough to their house? Or a supermarket?

Legislators have taken to writing vague laws and simply letting the regulators fill in the details.

Regarding Kroger's new paid membership program, Boost, one MNB reader wrote:

"…most affordable free delivery membership…” is an interesting concept.    Remember, pre-Prime, when “free” was free?

And, in response to our story about Southeastern Grocers cancelling its scheduled IPO, MNB reader Tom Murphy wrote:

I am trying to walk a fine line here.  While I am not surprised that SEG dropped their IPO, I also have a lot of friends who have worked there and are working there now.  But here is the problem…SEG was cobbled together years ago from a number of chains that had lost contact with the consumer over time.  These chains had failed to keep their assets in good shape, failed to invest in technologies and business practices that gave them a competitive advantage, and most recently have been plagued by private equity leadership whom we all know has a dismal record in retail turn-arounds.  Add to this that where they have their best stores is in very competitive markets and the remainder of their stores are in small communities that are being overrun by dollar store formats.

None of this adds up to a reason for someone to invest in their IPO.  However, to be clear, there are very good and dedicated people in these stores and in the corporate offices…that is where the SEG value is…but that is a hard place to generate value for investors.  The only way for this to get better is for SEG to spend less time worrying about IPOs and private investor exit strategies and more time focused on their employees and consumers…’cause that is where the rubber meets the road in retail!

Finally, as promised, here are emails responding to the ongoing commentary about how to deal with out of stocks, and the FaceTime commentary I did yesterday reacting to the person who questioned my credentials to be commenting on how supermarkets should do business.

In case you missed them, here are the two relevant FaceTime videos:

MNB reader Ira Kress (who, because he references his company in this email, should be identified as president of Giant) wrote:

I’ve never written or commented previously about any of your articles or various opinions expressed therein, but I found myself wanting to do so this time.

I absolutely LOVED your FaceTime video today.   I, like many, read your article about the out of stock challenges we are all experiencing, along with your recommendation on how retailers could turn this challenge into a deeper connection with their customers.   Sure, it may not be realistic – for every item, or every customer, or every time.   To me, that’s not what was important about your comments.   What was important, and what links directly to your FaceTime commentary today, was that your perspective was one of a CUSTOMER!

Candidly, I too had no idea whether you had previously worked in retail or managed a supermarket.   I never thought about it, and never cared.   You are a writer and reporter, sharing his perspective on the various goings-on in this crazy retail world…and sharing his beliefs based on what you have experienced in and through retail, and through your many connections with leaders across our industry.  I appreciate that for exactly what it is.

BTW – while we never implemented a “corporate edict” on the recommendation you proposed, we have had many, many managers take it upon themselves to do exactly that….take a customer name and contact them when the product they’ve been looking for comes in (long before the pandemic hit, during the craziness of the pandemic itself, and to this very day)….and those managers that have taken this level of personal responsibility and care for their customers in fact are the ones who have continued to build the personal customer connections you mention.

Stay well, and keep the perspectives coming!

Reacting to emails I've posted from people who explained all the reasons why what I suggested couldn't be done, one MNB reader wrote:

Having worked in a variety of businesses other than supermarkets, I can attest that OOS is a problem common to all of them. After reading the statements disguised as excuses, I think there are too many people in this business who would rather say "it can't be done" than "it must be done."  Afterwards, when the business goes down the tubes, they wring their hands, blame the customer or anyone else they can tag, and wonder why they failed.  It's a recurring problem in every business, though. It's easier to make excuses than to work toward a resolution.

Another MNB reader agreed:

As to the out of stocks I would think that a retailer could hire a local college student or even high school student to develop a program that would start with a QR code on a display in the Out of Stock facing that would then lead to a landing page where the consumer could put their contact details and the name of the product.  Sure, not everyone would use it, but everyone would know the retailer cares.

MNB reader Brian Harris wrote:

Brilliant commentary my friend! Like you I’ve been asked that same question over my career. Our unique opportunity to talk with, observe with and listen to so many great retailers all over the world all these years give us such a unique perspective and credibility in being able to share our thoughts and ideas as we strive to move our industry forward. We simply would not have been able to do this if we had spent our career working in retail.

From another reader:

I am a long time appreciative reader.

I’ve often thought of sending a note just to say “thanks” for your humor and pretty darn good insights.  I never did, but today’s FaceTime made me do it. 

I never spent a lot of time thinking about it, but I was pretty confident that you had little experience in the business, albeit not evident in your knowledge or writing.

At least 98.132% of the time, I agree with your assessment and commentary on most of the subjects that you discuss. 

Where I believe that you earn credibility is your ability to listen, you do talk a lot (your job), but you listen more, ask provocative questions of the industries top experts and

you always present your opinion, as your opinion, not of fact, even when they may be just that.

I enjoy your humor, and on subjects that I may have a different perspective, you encourage me to think differently, which is healthy.

I spent 45 years in the supermarket business, starting as a bagger & stock clerk until I could find a good job.

45 Years later, I retired from the same company as the SVP, so much for the better job….

So, please keep doing what you’re doing, your perspective may be better not having worked in the business, as often the customer is absent in C-Suite conversations.

Bravo to you for addressing it, makes me more loyal.

MNB reader Dale Tillotson wrote:

Great honest face time KC now it is official you are the Howard Cosell of retail reporting and color commentary, Have a cigar my friend and keep on doing it for another 20 years.

And from another reader:

Howdy!  I’m a 30 year veteran of “working in grocery stores” and have to say that the guy asking the questions IS part of the problem.  Thinking that you can only know the answers because of your work history is old school way of thinking.

When I worked for Central Market HEB we looked for people without produce experience.  Why?  They brought new perspectives & ideas to the department.  What they didn’t bring was baggage and a “this is the way we do it” mentality.

I never had a thought about you working in the retail sector.  Why?  Because you BRING so mush MORE to the table!  Your perspective is YOURS and that’s what makes it great.  I enjoy spending part of my morning reading through MNB.

I also happen to agree with your thought that started this whole conversation.  Is it a lot of work to keep up with and do it.  YES!  But the payoff could be a lifetime customer!  If they have kids then more lifetime customers.

If it was easy EVERYONE would be doing it!

And from MNB reader Steve Workman:

I feel the need to respond to this morning's FaceTime with the Content Guy.

Personally, I have worked in Retail my entire short career of now 40 years.  First job pushing carts and stocking shelves in the Watchung NJ Shop-Rite. Damn that hill looked a lot steeper when I was pushing those carts up it….

Then after graduating college I worked for a year in my family owned Independent Retail Paint Store.  After that a 10 year stint reprinting Fortune 500 CPG companies Unilever and Entenmann’s bakery.  Then I found the Retail Service path.  First and an Entrepreneur, then representing several large, medium and small Third Party In-store Service Providers.  I am still at it today and am proud to say that the “Morning News Beat” is a daily read for me.  It is a big part of my morning routine, after my prayers of course.  I find that the content gives me a well rounded approach to my day with current happenings, impacts, technology advancements, insight, approaches and anecdotes all around the world of Retail.  There is also a lighter side with Sports Desk and Movie, Restaurant and Wine Reviews.  I repeat, a well rounded way to start my day.

Since I am in Sales, I also read it for the opportunity to identify any prospective clients that may arise.  I have forwarded many a link to my prospects and current clients that I felt relative to our relationship.  Therefore, coming from a “Lifelong Retail Guy”, I am on the side of appreciating and respecting the content that you put out every day.  I look forward to it like I look forward to my first cup of coffee.  Keep it up!

MNB reader Allen F. Wysocki wrote:

Loved your Face Time this morning and I hope you continue to challenge the industry with ideas on things like out of stocks. I taught a sales class for over ten years and I believe I added value to the class, not because I was wildly successful as sales manager for a small produce distributor. In fact, we had a hard time making a go in this business, so I re-evaluated my life’s calling and ended up in academia. I taught sales with an eye towards what not to do. I became passionate about selling and had a mission to educate students that selling is a noble and rewarding profession if done properly.  Your dirty little secret is safe with me.

And from MNB reader Tom Jackson:

You handled that email regarding your Grocery experience, very well !!  You are an insightful person with the ability to communicate to various audiences. In my opinion, you do not position yourself as a technical writer. But, rather one who takes a practical and creative approach that I am sure stimulates productive thinking. Keep up the good work my friend!

From another reader:

KC, towards the end of your facetime, you suggested that some of us might now start listening to somebody else.  Wait, there’s somebody else who does what you do?!  Seriously, never wondered how much time or even if you have spent time working in retail.  Always knew from your very open communications that your background was in research and reporting and never gave me any reason to question the information and suggestions you have to offer.  So keep on making your observations and providing us with great insight!  I’ll stay around for your next 20 years…..that is, if you decide to continue offering us the choice well into what should be your (and my) retirement years!

From MNB reader Rich Heiland:

Thank you for your confession. I will still read and listen….Like you I started my career in journalism but before I landed there I worked in men’s clothing, hospitality, managed a big rock and roll beer bar. In newspapers I worked up to the CEO level. When I started my facilitation, training and consulting business I worked with an amazing array of companies that provided and ongoing graduate course in all things business. When I started to work almost exclusively with private practice optometrists, through a friend’s company, some of the docs were skeptical. They acknowledged my business background but wondered what I could bring to them because “you’ve never worked in optometry.” The first time I was asked that I thought for a second then answered “I come as your patient. I’ve been a patient all my life.” I told them “my vision of your practice comes from outside your tunnel.” Carry on…

You'd think optometrists, of all people, could appreciate someone with vision.

And, one more:

Great stuff!  Keep doing what you are doing.  Over the years, you dropped enough hints to indicate you never worked in a supermarket.  Didn’t matter then, doesn’t matter now, you bring a great perspective and we get to choose whether to accept your view or think through it and come up with our own thoughts.  That’s what you do for us, the reader.  

BTW if your flock flees, I have a job for you in the store I manage!

Good to know.

I was overwhelmed by the volume and sentiments of the emails I received on this one, and was reminded of what John Lennon said on January 30, 1969, after the Beatles played their final public performance in a rooftop concert atop their Apple Corps. recording studios:  "I hope we've passed the audition."