business news in context, analysis with attitude

We had a piece last week about how the new president/CEO of Kmart, Aylwin Lewis, plans a four month trip around the country visiting the company’s stores and meeting with customers, employees and vendors as he attempts to map out a viable strategy for the company.

This prompted a number of emails.

One MNB user wrote:

I suggest the CEO of Kmart travel undercover and travel alone. First, probably 99% of the employees and managers in the stores have no idea who he is or what he looks like. If you walk into a store with a group men in monkey suits (or women with bad hair and briefcases), you will blow your cover and put everyone on edge. You won't get an honest answer from anyone. He should tell his fellow execs which stores he is going to and then go the opposite direction into an entirely different group of stores.

MNB user Glenn Cantor wrote:

Note to Aylwin Lewis, as you embark on your Kmart store road trip:

While you are in your stores, try to secure an RMU, with a working battery, in order to correct and refill out of stocks in your stores.

The exercise of trying to find a working RMU is a microcosm of what you will need to fix.

Also, when you visit your stores, don't tell them who you are or when you are coming, and then try to find rear-view mirror windshield adhesive (or some other obscure but important product that you sell). Or, once again, don't tell them who you are, and then buy a bag of heavy lawn fertilizer. See if anyone offers to help.

That's what you need to fix.

MNB user Richard Sokolnicki wrote:

So what has the rest of Kmart’s HQ management been doing...sitting in their offices and evaluating their ailing sales figures? This is only a great symbolic gesture by Lewis in my mind.

I've stopped at Kmart stores in recent months. They're sick and on life support. It doesn't take a four-month fact finding mission to figure that out. It's a company with name recognition but little image equity at this point.

Another MNB user wrote:

You got it Kevin,.... he will need a lot of luck.

However, I applaud his effort in getting to ground zero to determine what the plan needs to incorporate to turn the place around as a retailer. At least he won't be hiding out away from his associates and customers in his corner office looking at the P&L to figure out what to tell Wall Street about their business.

We have made the observation that too many retailers treat their employees like costs and liabilities rather than as assets…and that such an approach can undermine a retailer’s ability to be effective.

To which one MNB user responded:

I started in the grocery biz 30 yrs ago and then the employee was treated like an asset. When Chainsaw Al Dunlop got away with firing everyone for management's benefit, it seems all the companies took notice and followed suit.

The economy will pick up and those companies that were the worst offenders may find that they will get help, but the help will be the bottom of the barrel available and that serves them right if it happens.

We got several emails responding to our piece about Jungle Jim’s International Market. One MNB user wrote:

I happen to be one of the very fortunate few who work in the food industry and live less than 5 minutes from one of the best run retail food operations in the world. Not only does our family shop there but I also have the privilege of walking the store with industry colleagues when they visit our company. Most people's first impressions are the eccentricities of Jungle's (Jim Bonaminio) operation. From the singing Elvis bear (how many retailers have 3-8 year children dancing in the aisles of your grocery stores?), to the mammoth provolone, to their own branded wine fermenting in Oak Barrels, to restroom entrances with port-a-potty facades, to full size replicas of the S.S. minnow, to the fish farm, etc, etc, etc...

What most people miss is how savvy of an operator he is by requiring employees take owner ship of their departments. Employees are not a liability there are a major part of the stores success. It is a true store within in a store concept as each department manager is responsible for managing inventory and generating sales, running each department as its' own business. Knowledgeable employees talk to you. You are treated as you are the most important reason for being in the store. No matter what they are doing, if they see you coming, you are the first priority, they stop and pay attention to your needs. Sampling is everywhere. They feed the masses, setting up 8' folding tables loaded with store made cheese balls and specialty crackers. Must be profitable, especially when cheese balls average $7 per pound and they sell. On weekends, it is a packed wall to wall with shoppers, yet all employees personally talk to you and encourage sampling and cross selling. How many grocery store deli departments run no weekly deli specials to generate traffic and sales? It has been at least a year since I have seen an advertised "special" in Jungle's Deli.

If you want a real treat, call and arrange a personalized tour. They have a full time employee dedicated to giving tours. Hint, it is another profit center. The most revealing comment I heard came from a 48 year old third generation owner of 22 stores, " I grew up in and thought I knew the grocery business, now I know I am not in the grocery business."

Last Friday, we interviewed Tim Hammonds, president/CEO of the Food Marketing Institute (FMI), about the impact of last week’s elections on the industry’s agenda for the next four years.

We got two emails that questioned the piece. One was from MNB user Dave Lichtman, who wrote:

Identifying Tim Hammonds solely as the President/CEO of the FMI and not referencing that he is a very prominent Bush backer (and one time a member of the Bush transition team) was a disservice to your readers.

That full disclosure would have given your readers a better context in which to read his comments.

Good point. For the record (and this doesn’t make things any better), we were sloppy rather than deliberate in that omission. Tim Hammond’s personal political involvements have been a matter of public record and well-known within the industry, and it simply never occurred to us that we had to mention them.

It should be noted that many industry folks that we’ve spoken with believe that Hammonds’ connections are a positive for FMI and the industry. Many folks, but not all…as MNB user Lisa Malmarowski wrote:

I know you work closely with FMI and while I appreciate some of the lobbying work they do on behalf of the grocery industry, they do not represent all of the grocery industry.

Yes, we need an energy policy capable of addressing the realities of today's global marketplace. Will we get that with this administration? Doubtful. Unless we as a nation and as the largest user of global natural resources use our technological smarts to figure out how to develop sustainable usable energy sources and fund these initiatives appropriately, we will continue to see rising energy costs.

The mega-supermarkets of today use an enormous amount of energy just to run equipment, light the aisles, etc. What are stores doing to decrease their energy consumption? We as an industry have the potential to really make a difference. What are we doing?

I can tell you that we have remodeled and built our locations using sustainable design. We have integrated day-lighting systems. We use environmentally friendly finishes. We've built a building that will live on in the event we no longer house a store there - it will have other uses and not sit empty like a big metal warehouse. We've done what we can, but our stores are small (under 15,000 sq. ft.).

What are the big guys doing? What is FMI doing for stores like ours?

In the interest of fairness, perhaps we should have suggested that there is an excellent counterpoint to Tim Hammonds’ view of the potential for the next four years, and it can be found over on Phil Lempert’s It details the potential impact on consumers of four more years of George W. Bush, and can be found at:

Finally, we continue to get email about the episode of “South Park” that satirized Wal-Mart’s impact on America…

One MNB user wrote:

”South Park” was a very funny episode, but the writer did not mention to you that they were careful to spell it Wall-Mart in the show, to avoid any lawsuits. It was hilarious.

At least they spelled “Bentonville, Arkansas” right.

MNB user Joe Fraioli wrote in about the episode of “Without A Trace” last week that had as one suspect the manage of a Wal-Mart look-alike store:

I saw the episode too and it not only talked about no overtime but that employees were accustom to not being able to make it financially and a second job was a necessity. Perhaps Wal-Mart will decide not to carry “Without a Trace” on DVD because they were truthful.


Last week, like many weeks, was one replete with Wal-Mart news and commentary, but apparently the “South Park” and “Without A Trace” references were more than MNB user Paul Higham could take:

Enough of the arbitrary Wal-Mart bashing. It’s getting real tiring.

Wait a minute. Wal-Mart gets criticized on “South Park,” and we’re being arbitrary?

Ironically, there are sites out there on the Internet that refer to MNB as being a “Wal-Mart apologist.” And there are those who believe that we have cast Wal-Mart as the devil in some sort of climactic battle between good and evil.

Some think that this is appropriate casting, some think it is absurd. Both are wrong.
KC's View: