business news in context, analysis with attitude

We wrote last week about how Winn-Dixie is planning to open a new upscale store, believing that it will give the company entrée to new markets as well as a vehicle with which to develop new strategies that it can apply to its mainstream stores.

Not everybody is convinced, however. One MNB user wrote:

“This all sounds good from Winn-Dixie, but I have yet to see where they have ‘committed’ to any upscale-kind of image in the past. The new Market Place Stores were beautiful, but the follow-through was never there. I am not sure if this chain can carry the burden of commitment for an upscale image.”

Skepticism noted. However, we have to point out that in recent months, Winn-Dixie has been adding some excellent people to its management, people who have quieted the consistent rumors that the company might be for sale.

Let’s give these folks a chance to show what they can do.

In a story last Friday about Albertsons facing intensified competition from Wal-Mart, it was a noted that one of the ways the company was looking to solidify its grip on consumers was to introduce a loyalty marketing card in specific markets. MNB user Jane Larson responded:

“Hello! Has Albertsons been asleep during all those discussions about how loyalty marketing cards just annoy the bejeezus out of consumers? I refuse to shop in any store that has a 'super saver' card, just on pure principle. Fleming's Rainbow format had said card, and look at how great their market share...

Oops. Never mind.”

We love irony when it comes from MNB users…

We also wrote that Albertsons seems satisfied with its existing price image. But MNB user Don Sutton differs with that conclusion:

“Albertson's may be comfortable with it's prices, but a lot of consumers are not, especially "captive" market areas like Lewistown, Montana. Lewistown, population 8,000 +, is in the center of a grouping of small towns with total population total of a little over 150,000. Several years ago, Albertson's bought the Buttreys stores, including the one in Lewistown. The first thing they did, according to local residents, was raise prices.

“The first thing many area residents did was to start planning shopping trips to Billlings or Great Falls. Sam's Club is now a big favorite. Some residents car pool their shopping trips. If Albertson's thinks people who check prices are happy with them, they are kidding themselves.”

Last week, after we ran a story detailing some of Wal-Mart’s recent labor troubles, including fresh lawsuits being filed about wage abuses, we ran an email from an MNB user who believed that Wal-Mart would sidestep any controversy or long term impact on its business:

“Besides, as long as Wal-Mart has the strong "Good Citizen" image in the South, Mid-West and Southwest, who's there to believe all that Northern labor propaganda?”

But a Northern Illinois user of MNB wrote to respond:

“I am a Mid-Westerner (whatever that indicates besides geographical residence), and I neither welcome Wal-Mart or grant it high value as a ‘Good Citizen.’ And what's with this ‘Northern labor propaganda’ comment?

“Aside from it's hugeness and the impact it's had on downtowns across America, Wal-Mart just plain and simple doesn't pay a living wage for many of it's associates. And on top of it, it appears it doesn't really treat them all that well, or there wouldn't be these stories popping up from different parts of the country about workers being forced to stay late on the clock, work through breaks, etc. This should alarm everyone in every industry because Wal-Mart is the nations largest retailer, it's the largest corporation, with the largest workforce. Whoever you are, whoever made that comment and sees anyone who criticizes Wal-Mart's labor practices as just part of some ‘Northern labor propaganda’ needs to pull their head out . . . Perhaps if it were you working for less than a competitive wage, or overtime without compensation, or through your legally mandated breaks, you'd feel differently.”

We happen to know that the person who replied to the story last week is a Wal-Mart store-level employee…so without giving any more away, it’s important that they have some level of credibility on this issue.

MNB user Bob McMath wrote to us last week to describe a less-than-satisfactory experience he had at the Panera Bread Co., a fast-growing foodservice operation. His letter prompted several responses from other members of the MNB community:

“Bob McMath really had a bummer of an experience, but that's not necessarily grounds for blasting the whole operation. The company has grown because most customers don't have that kind of problem. Face it, if even 10% of their customers ran into this their reputation would be toast.

“I don't get over to our local Panera very often because it's just too far, in most instances, to drive. When I'm already in the area I stop occasionally, usually with my wife, and it's generally pretty good fare. It's not the top of the gourmet list, but it certainly is far better than what Bob ran into. We stopped in the first time on the recommendation of satisfied customers who are really picky.

“What Bob needs to do is carefully note the quality problems and send his evaluation to the local or district management. Don't toss insults, don't call names, just do it in a firm, unimpassioned way. If you were livid, just say "I was really livid when I left your store," but stop there. You'd be surprised at the response you get. I have a habit of doing this and you'd be surprised at the apologies, free products and genuine apologies I get from operations running the gamut from a popcorn company to Office Depot. I usually throw in something like "I thought you would like to know" and treat them like someone who wants to make things better. Works every time with good operations and I rarely run into the same problem twice.

“For operations trying to run a tight ship, negative feedback can be more valuable than positive, because it identifies things that need to be fixed and the people responsible can be informed. The language you couch this in will dictate the impact your individual complaint makes.

“Smile Bob, and share your feelings with them. You might be surprised, you might even find some people who really care. If you don't, then tell your friends they're no good.”

And, MNB user Ryan Kane wrote:

"In response to Bob McGrath's comment about his experience at Panera Bread Co., I'm not entirely surprised, but there are some worthy things to note here. Some may recall that Panera Bread was once called St. Louis Bread Co. (at least in my area), and when it was, I used to eat there often. Ultimately, I was kept away by the higher than average costs, which, I suppose, were justified by this place being a sort of "upscale casual" establishment. I went back after the ownership/name change a couple years later, and it almost seemed the quality wasn't as good as I remembered. Could this be the common effect of something being new and great in the beginning, but then after a fair amount of success, those who created it figured they didn't have to try as hard to make the venture stand out as a unique and engaging experience?

“Then again, Bob's problems with the food could depend on two other things: what he ordered and what time of day he ordered it. As for the time of day, it's a bit like the fast food experience -- ever tasted Wendy's french fries just made versus lukewarm? -- the best ever in the former, and nearly inedible in the latter. Such is the experience (though not quite as drastic) with some bakeries. As for that crusty bread, Bob, try the softer offerings there; they aren't so tough on the jaw. The pumpkin muffins were always excellent, the gourmet coffee drinks were quite good and the chicken noodle soup in a big 'ol breadbowl was good on a winter day in Kansas.

“On a different note, Wendy's recently opened one of its Baja Fresh Mexican places in my area, and I wholly recommend a trip there. Everything is made fresh, so you do have to wait five or ten minutes for your order sometimes, but the flavor and quality makes up for it. TONS of menu options and a fresh salsa bar add to the appeal. Baja Fresh makes burrito eateries like Chipotle and Zteca look like novices in the ‘better than Taco Bell’ game.”

Our story last week about Fleming management saying that the company’s business is “strong” brought out at least one disbeliever in the MNB community:

“I personally think Fleming has done a horrible job as a grocery wholesaler. At one time they were the jewel of grocery wholesalers for independent retailers, but now they have no programs for the independent grocery retailer. They have put all of their efforts into Kmart and we all know where that is going. Hansen really sugarcoats the effect of the Kmart chapter 11, saying it won't have a big effect on Fleming. That is a bunch of bull in my opinion. One thing no one talks about is how much money Fleming put into the infrastructure to service these Kmart Supercenters. They spent a lot of money for warehouses etc, ignored the independent retailer, lost some good solid retailers to Supervalu, and are selling their retail stores. The only retailers they have left are ones that owe them money and can't go to another wholesaler. But ‘Fleming is stronger than ever.’ And I believe in the tooth fairy.”

On the subject of GMO labeling, especially the email from GMA’s Gene Grabowski criticizing our pro-labeling position, we got an email from one supportive MNB user, Alicia Rockwell:

“Dear Kevin,

“Thank you for providing such a wonderful service! I am fairly new to this industry (about 5 years) and have had the pleasure of being a member of the FMI Consumer Affairs Committee the last few years. This group has provided me with a wealth of information and insight into this industry.

“We have had many conversations regarding GMO and food labeling. I just finished reading some of your reader comments on this issue. Here is my two cents....sounds to me like GMA needs to help us educate our consumers so we can manage the fear of the ‘unknown’....of course, it doesn't help that most of Europe considers it evil technology at least in their communication of would also help if we started creating consumer friendly language for new food technologies...(irradiation sounds so safe and appetizing, ugh..)...the bottom line is we could be saving lives everyday if we could just take a little of the science out of the science if you know what I mean. Thanks for listening and providing a guaranteed smile with your sharp and witty commentary.”

Obviously one of our more perceptive and refined MNB users…

On the subject of Starbucks cafes going into Target stores, MNB user Brad Haggen wrote:

“It is going to be interesting to see what happens to the Starbucks brand over the next few years, as they continue to let other retailers operate coffee shops under the Starbucks banner. As far as I can tell, the major difference between what Starbucks is doing and other franchises, is the letting the consumer know that the Starbucks they are in is not a real Starbucks. The employees wear names tags from (Target), the receipt says (Target) and some credit card readers say (Target). Why would they allow that? I was recently in a corporate owned store and asked the Starbucks employee about the Starbucks in the Fred Meyer store (Portland). She responded that the Fred Meyer Starbucks was not a REAL Starbucks.

“At one time Starbucks was all about coffee and the experience. Today, it seems to be all about maintaining growth through whatever means. In the earlier years Starbucks used to only allow their fresh coffee beans to be around for seven days, before tossing them out. Today, it is six months. The wheel of retailing would say that some day there should be an opportunity for another coffee shop to replace Starbucks as the premium coffee operator, while Starbucks slips into mediocrity. It is no longer the same company Howard Shultz started that had a passion for excellent coffee, but has changed into a bean counter (ouch) driven conglomerate.”
KC's View: