business news in context, analysis with attitude

We got a number of emails responding to our story last week about the confusion consumers experience over dated products.

MNB user Dan Raftery wrote:

If retailers installed enough signs to educate shoppers about the increasingly complex product offerings in stores, there wouldn't be much room left for the products. A better solution to the date coding confusion is industry standardization for packaging information. This subject comes up every so often at industry committee meetings. Could be a lot of points for the one that finally does something here for consumers.

One MNB user wrote:

I can't believe that the government hasn't stepped by now to mandate a common dating system to be used by all. If you consider that many companies even have coded dating that often the customer, much less store personnel, is unable to decipher. It just seems to me that this would be as paramount an issue with our government as whether or not my bananas came from Mexico.

Another MNB user wrote:

Food retailers and wholesalers have been asking manufacturers to provide understandable and open dating for the 30 years I have been in the business.

You need to put the heat on where it belongs. Only the manufacturers of the product are capable of making this prediction or claim, they print whatever message they want to send on the carton. If the retailers could understand it themselves they might be able to do something about it. There needs to be a standard…

Another MNB user offered:

Since there doesn't seem to be any industry standard for these dating, wouldn't it be easy for the consumer to ask the manufacturer via e-mail or 800 number, both of which seem to be appearing on more packages every time I look?

An industry standard would be nice and easy but since there is little likeliness of one coming anytime soon, IMHO, why don't people just use common sense and ask if they don't understand what "Use By, Sell By, Better By" means?

Maybe they could do that. But isn’t it the industry’s responsibility to provide enough information that such calls or emails aren’t necessary?

And MNB user Axel Doerwald wrote:

These get even more confused in the fresh food area because the printhead alignment on most scale/printers used is always out by a few millimeters which invariably means that the sell by date is printing the use by date field on the label or vice-versa. I have seen many preprinted labels where the two date fields are very close together, usually above and below on the label yet only one date is printed. A printhead misalignment means the date prints squarely in the middle of the two date fields leading to further confusion on the part of the consumer. Is it the sell-by or the use-by? Retailers should ensure that their labels text is adequately spaced to minimize this confusion due to misalignment of the printhead and should have regular maintenance done on their scale/printer equipment to correct misalignment issues.

Also got lots of email about the advertising campaign created by Wal-Mart to shore up its labor image.

One MNB user wrote:

It read to me as a help wanted ad...comments?

We didn’t read it that way…but you make a legitimate point.

Responding to our Friday story on the ads, which quoted union leaders’ reactions to them, MNB user Howard Evans wrote:

It would be more fair and balanced to quote comments from some source other than the two major labor unions who are trying to unionize the stores, and therefore have an antagonistic attitude toward management. I’ve been in the industry for over 30 years, and have found union “claims” like those quoted to be exaggerations or downright falsehoods. Wal-Mart follows the law as much as any other retailer does – their strength is what they offer the consumers. How many union employees (remember – most state and federal employees, a huge number – belong to a union!) shop at Wal-Mart?

For the record, we quoted the ad copy in our Thursday story, and didn’t think we needed to do so again in our Friday piece. We think we gave the two sides equal time.

Another MNB user wrote:

My takeaway after watching Lee Scott on Good Morning America yesterday - Deja Vu. The interview sounded so much like the spin control rhetoric that spewed from the recent presidential campaign that the thought occurred to me, "Is Lee Scott preparing for a political career?"

He’s running Wal-Mart…and these days, that is a political job.

Another MNB user wrote:

I don't think Wal-Mart is worried about the American consumer finding out "the truth." The consumer already knows and doesn't care so long as Wal-Mart keeps their prices low. Like you say, Wal-Mart won our wallets and our hearts and minds followed.

MNB user Richard Lowe wrote:

The real problem is the Wal-Mart mentality represents a death wish spiral for the long term. Now I am talking about 50 years, 100 years or more. If one continually seeks the lowest price and Wal-Mart continually seeks the lowest price who wins. Capitalism has survived based on the concept of making the most one can. NOT on making the least one can!!! Everyone pays in supporting Wal-Mart low price quest. Their employees, their vendors, the towns, the states, the federal government and society as a whole. Their quest is to always find the least expensive way do to business only to their corporate benefit. The corporation is a heartless, soulless entity when it comes to the objective of obtaining the lowest cost and selling at the lowest price. This is NOT GOOD for our society or the world as a whole. If all business developed this attitude it would put us all on the chain gang. There has to be a different attitude for society to live to higher expectations. Just like the oil cartels, the railroad, and the telephone monopolies.

And, we continue to get emails about Ahold’s continuing problems and the guilty pleas last week by nine present and former vendor executives who cooked their books so that Ahold’s US Foodservice could show a greater profit than it actually had.

One MNB user wrote:

Perhaps the best business to be in is SELLING products to customers instead of turning BUYING products and pursing promotional allowances into your major profit center.

And MNB user Glen Terbeek offered:

Using allowance monies to cook the books to fool the external investment community is an extreme abuse of promotional monies, and should be punished appropriately. This is the worst form of "collaboration, partnership and supply chain management". Obviously, a few companies have been caught as examples.

However, equally as bad is how management fools itself internally, because of the "false economics" of these same allowance dollars. How can they evaluate an individual item's true contribution to its category's and store's performance without applying all costs and allowances to that item's actual supply chain activity and promotional performance? No wonder Wal-Mart is winning in many ways with their net, net costing; they take all of the guessing out of the already difficult retail game.

Allowances are an important part of the industry, but they need to be "book kept" to reflect true marketplace performance, and therefore company performance. This is true for the manufacturers as well, by the way. And it is interesting to note that the industry has all the technology in place to do it, if it wants to.

I believe that the most important thing that the industry can do today (retailers and manufacturers) is to address the destructive nature of allowances before it is too late.

I have an idea, let's start after we make next quarter's numbers!
KC's View: