business news in context, analysis with attitude

We had a story yesterday about how Safeway CEO Steve Burd will not accept his bonus of $181,000, though he still is taking a $1 million salary and exercised stock options over the past year that earned him $13 million.

While we commented that this "seems at least a symbolic acknowledgement by Burd of Safeway's annual loss of $170 million, its drop in stock price, and the four-month strike in Southern California that plagued the company," we're also not sure that Safeway investors will be assuaged. "After all, how much money have they lost while Burd walks away with $14 million?"

We wrote, "Not accepting $181,000 may be Burd's way of saying 'I feel your pain'…but from this perspective, the words sound hollow.

We got a range of responses.

One MNB user, a Safeway employee who asked that his name not be used, came to his boss's defense.

You've missed the point about what happened in Southern California. Steve Burd had the courage to stand up to unions who couldn't see beyond their noses. As painful as it was in the short term, Burd's stand in Southern California was the right thing to do for shareholders and employees because it will allow Safeway to remain competitive in that market. I might also point out if you've been a shareholder since he become CEO in 1993, you've benefited with an eightfold increase in the share price. Those stock transactions were ten-year-old expirating options that Burd exercised on value that he and his management team created. Rather than begrudge, I take my hat off to Burd for all that he's done and will continue to do for Safeway.

But another MNB user wrote:

Burd not accepting $181,000 is like me not accepting a $2 tip. $181,000 will not make one bit a difference in his life or Safeway's. He probably thinks he has fooled a lot of people into thinking he is trying to show sincerity. This just shows how arrogant and out of touch he is. This is a slap in the face to all Safeway employees, shareholders, and customers.

Another MNB user asked:

Has anyone wondered if exercising his stock options caused the value of the company to drop?




We had a story yesterday about Aldi adding a line of grocery products, about which we received a number of responses.

MNB user Frederic Arnal wrote:

This story about Aldi adding a "gourmet" line plus a recent story regarding dollar stores expanding both size and assortment on the face of it seem like positive moves. But, the cynical brand manager part of my experience is starting to twitch. Jump the shark events are seeded with little shifts in strategy like these.

The laser-like focus that created the success of these limited assortment formats can just as quickly become diffused if the retailer (read "brand strategy") takes its eye off the target consumer and forgets who they are. Do Aldi customers really want "gourmet"? Doesn't Aldi management already have a Trader Joe's that targets that segment?

Other examples:

* Are Dollar Store customers looking for a full assortment experience?
If so, won't a conventional supermarket do it better... with full service?

* Is Meijer taking its eye off of its core constituency as it upscales
its product assortment? Or, at the same time disappoint prospective affluent
customers when the necessary service isn't provided?

* Should Target sever ties with their department store division, the
very important style/trend component that truly differentiated them from the other big-box discounters?

Not all retailers have the deep pockets and breadth of market penetration that will allow them to recover from strategic missteps like McDonald's who has successfully returned and improved their core business.

It gets curiouser and curiouser.





We wrote recently that more food retailers ought to teach customers how to cook as a way of getting them to spend more in the supermarket. Not everyone agreed, as one MNB user wrote:

Could take us back to the 40's and 50's when Mom did most of the canning for the winter months. Ball jars and lids would be the thing again. End bases in every store. Wax to seal the jam jars would be on display. Double boilers would sell very well at the garage sales. Back yard gardens would pop up all over.

Gee, might just be nice to see the basics again??? Not a chance Mom is not going to work that hard in this day and age.


First of all, let's not isolate Mom on this one. Second of all, isn’t there a midpoint between not cooking at all and doing your own canning?

But Rosemary Fifield of New Hampshire's Co-op Food Stores wrote:

We've been doing this since 1989. Is this truly a revolutionary idea? We also sell plants in season (annual and perennial flowers, vegetable plants, and herb plants) so we teach gardening classes as well.




Following up on our coverage of the deaths of frozen food magnate Harrison McCain, 76, and Brian Maxwell, 51, who helped create the PowerBar. In our original commentary we wrote, "Not to make light of either death, but it is indeed ironic that the father of the frozen French fry lives to 76, and the father of the PowerBar only gets to 51 and dies of a heart attack.

MNB user Tom Dominick wrote:

People need to look less at food and more at dealing with stress when heart attacks are a major cause of death. The solution is very simple for preventing many diseases.

1. Eat a well balanced diet.
2. Find a way to reduce stress through exercise, yoga, hobbies, etc.

The negative effects of unrelieved stress on blood pressure, arteries, etc. are well documented versus a lot of the junk science going on today with food and health. Sensational press releases on initial findings are put out and picked up by the media. The problem is very few people see the results of the follow-up studies. In most cases, the results disprove the original sensational preliminary findings. Have you ever noticed how the press releases on the studies end with a statement like "but further study is necessary"? Translated - this means more research dollars are needed to keep the researchers employed. You should take a look at some of the ridiculous studies the federal government has funded.


And in response to the people who recalled the premature death of jogging guru James Fixx, one MNB user wrote:

Would everybody just forget about James Fixx. He's one guy, out of millions, who was a top athlete that had heart disease he didn't know about. He's dead. Get over it. These people that don't exercise and belly ache about how hard it is to keep in shape and how miserable you are if you exercise hard...they are pathetic. Life, when you are in shape, is so superior to when you are not... that it is no contest. I know. I've been at both ends.. So please people, if you are going to bring up a reason not to exercise...find a now poster boy.

Our favorite email of the day came from an MNB user who responded to another MNB user who accused us of being sophomoric and insensitive in our commentary about these deaths. (We pleaded guilty on both counts.)

I wouldn’t read MNB each morning if it weren't sophomoric and insensitive.

Hey, you gotta have a niche.
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