business news in context, analysis with attitude

Interesting email from MNB user Russell Jones:

As a long-time observer of the retail industry, I fully support your view that some (many?) retail executives are focusing on the wrong customer.

Although focusing on the analyst customers may produce short-term run-ups in stock price and options values, the too-frequent result is that shopping customers start going elsewhere. I have adopted an approach to evaluating retailers that I call the “customer/consumer frequency”. This entirely subjective measure looks at the statements of retail CEOs and COOs to see how often the word customer or consumer is used. The higher the frequency of the use of this term, the better the retailer performs compared to its peers.

Analysts don’t put value on “good” employees or the level of customer focus by a CEO because it is difficult to measure and the link to customer value is much less direct than the link to SG&A %.

Another MNB user wrote:

In the last 30 or so years the Stock market seems to be the most important part of many a corporations thought process. Too many worry about their today price and forget long term growth. Stuff happens and often this will effect a corporation or industry for a short term. Those that immediately react to try and keep their stock price up and producing high growth figures each year are doing their employees, customers and yes the stockholder a disservice. Who's been in real trouble the last few years and what were they doing when they got caught. My money is on the steady companies, who year after year look to improving their products, giving better value to their customers, taking care of their employees and finding out that the long term profits enjoyed by the stockholder is always there.

The United States people have short term satisfaction and thinking. This will hurt many in trying to get the quick buck. It will hurt us all as others are waiting to hurt us but maybe not today. Tomorrow, next month, or in a couple of years is fine with them as long as their long term goal of hurting us is met. Economically, politically or even physically. Many don't like us, our way of life and our corporations who interfere with their philosophy.

Another email was prompted by our story about Costco being criticized for paying its people too much, and our comment that Costco is vastly superior to Sam's Club. MNB user Donald Greenberg wrote:

I had been a loyal Sam's Club customer for years....and all I ever heard about from kids was how great Costco was (their Mom is a member) and that I should try it. Well, a few months ago I did, and I never looked back! It's not that Costco offered a significant savings over Sam's, it's not that the selection was any better than Sam's, it's not that the store was in a better location than Sam's.....what convinced me to drop my Sam's club membership and join Costco was the service! The fantastic service levels of the Costco employees was surprising based on my experience for so many years with Sam's Club. Costco has built a better mouse trap and the their competitive advantage is their employee. If I were sitting in the Chairman's seat at Costco, I would stay focused on long term shareholder return, keeping my employees and high level of customer service! Watch out Sam's comes Costco!

MNB user Richard Lowe had some thoughts about our essay on "The Human Connection":

It is not only retail, it is the size of all companies. You are absolutely correct in the lack of human connection. Yes, computers, the internet, answering machines, big companies and all that tech stuff may lead to big profits, but it also leads to customer disloyalty. Nothing is done to make the customer feel loyal. So the customer jumps ship as soon as a better deal comes along. Your story today Highland Park Markets is magnificent! I find that I am hating every time I have to deal with any big company, retailer or not. They have all lost the concept of the customer.

On Jan 5th I purchased from Lowe's a new stove, refrigerator, and dishwasher. The salesman was a terrific older gentleman who had been in the business for years. They had a 12 month same as cash program going on at the time. I had to open a Lowe's charge account to facilitate this. In February I received a statement on the credit card showing a payment owed with no mention of the 12 months. I placed two calls the credit card billing number and gave up on both occasions after ten minute waits. I then called the salesman who checked it out and got back to me saying I should just ignore those and pay next January, that it is just procedure.

About five weeks later after the March bill I am home and get an automated call and then a person asking if this is me. I take offense at such a solicitation and she says this is a personal matter and she cannot confirm it until she know my identity. So I give in and she is from the credit card company saying I am in arrears and must pay. I explain what has happened and she says I must contact the store for them to correct it. I said it is not my problem that they should correct it. She insists, so I call the store manager. He wants me to bring in my paperwork. I said he has the problem and needs to fix it. So he says let me check it out and get back with you. Which he does and has it all fixed. This is what is wrong with BIG companies. The right hand does not know what the left hand is doing!

We wrote yesterday about the shift from cork to screwtops by winemakers, in part because of the shortage of cork…but noted that they have a big perception problem to deal with. We recently bought a wine on the recommendation of a friend, and were utterly dismayed to find that it had a screw top. It ruined the experience…it almost didn't matter whether the wine was any good.

MNB user Gretchen Murdock responded:

I am certainly all for advances in the wine business, but I am horrified by the addition of more screw tops on what I would consider decent wine. I don’t even like the plastic corks that some of the wineries have gone to. While a child of the sixties and a liberal thinker, this time they’ve gone too far!

Another member of the MNB community wrote:

We have recently returned from a year plus long stint in New Zealand working within Progressive, parent company to many food retail formats there. Some of the wineries there have moved to a screw closure (even higher end brands). The acceptance has been mixed, but gaining a footing. Yes, much of the romance is lost with a screw top...but what does one do, give up consumption of a favorite wine? I think not.

And another MNB user wrote:

The romance of wine is in the juice, not the container.

By the way, MNB user John Phillips continues to have a problem with our attitude:

Maybe the fact that you are in London is the reason you continue to have trouble understanding and appreciating what Wal-Mart has done for the U.S. economy.
KC's View: