business news in context, analysis with attitude

In commenting about the poisoned pet food story on Friday, we wrote: It’ll be interesting to see what the long-term shake out is in the pet food business, now that it has become fairly evident that there may not be much difference between various labels. If nothing else, this ought to be positive for the private label business.

Several MNB users thought we were jumping to conclusions…

MNB user Terry Pyles wrote:

I’m not sure how this tragedy leads one to conclude, “It has become fairly evident that there may not be much difference between various labels”. Just because there is one common ingredient does not mean that there are not significant differences in other ingredients. What it does show conclusively however is that all brands are subject to the same potential risks if strict standards are not followed for all ingredients.

Fair enough.

Another MNB user wrote:

Interesting that you feel this will be good news for Private Label when it predominantly hits private label brands. Though there are some brands that are affected by this, it seems that this would point to the value of brands that truly own their production and quality control. Perhaps not a COOL endorsement but it could indicate where some of the support for initiatives such as this stem from.

Yet another MNB user brought up an interesting point:

So……anyone wonder how easy it would be for this to happen to the human food supply? Maybe when the FDA is done taking care of mad cow disease they'll find time for this.

Responding to our ‘Good for the Soul” radio commentary last week, about companies that try to do good in addition to being profitable and successful, one MNB user wrote:

Whether a person believes Al Gore & other highly esteemed scientists or not, why not follow good judgment, morality & ethics regarding this great planet we all live on? I am a "boomer" having grown up in the 60's & I recycle, I buy green as much as I can, & I want to leave this Earth a better place for my children, grand-children and all the children. We have become such a "throw-away" society (we even throw babies away), we will run out of places to dig holes for landfills & dumps. Then what are we going to do? Dump everything in the ocean? That's a whole other set of environmental problems.

If people did just ONE THING - recycle aluminum cans & plastic bottles or replace lights with eco-friendly ones or buy recycled products ranging from toilet paper to outdoor furniture, it will make a difference.

I shopped Wal-Mart once about 10 years ago. It was not a pleasant experience & I haven't shopped there since. However, the fact that they want to make sure they are on the right side of the environmental issue, I will re-consider. I already buy from Starbucks, Microsoft, PepsiCo (PepsiOne is the BEST), & Whole Foods. I stopped buying from Home Depot but I forgot what they do for Habitat for Humanity so will do so again. I don't eat fast food, but McDonalds is a good stop for a diet soda or salad.

As more companies follow & tout their support to stop global warming, I believe consumers will shop these companies more. I plan to make it a point to shop only those companies wherever & whenever I can!

We wondered aloud last week whether Giant Food, by switching to self-service seafood and floral in a number of its stores, might be paying too much attention to efficiency at the expense of effectiveness.

One MNB user wrote:

I agree that you need good people in the stores to connect with the customers, but at what point do you stop? Do you need 3 people working a floral department that doesn't get that busy? 5 in seafood? How about 1 associate per customer to walk around with them in case they need something? Obviously, I am exaggerating and personally would hate having someone next to me while I shop, but hopefully you can see my point.

Having more people isn't always the answer. Putting someone in the store just to say you have them there doesn't work either. Besides, the Wegmans that is close to my friend's house (which I check out once a week when I see him to see what they are doing) has a self-serve florist department.

I guess my point is that there is no exact science here, finding the right mix of personnel and service can be different by store, division and company.

And another MNB user chimed in:

There are two sides to this just as there are of every issue. On the benefit side for the consumer, in a small volume store, a self-service seafood department could have several reason why the consumer would be better served with self-service. One being a fresher product. Self-service cases will hold product at a lower, more consistent, temperature than a service case.

If seafood is displayed on ice and is not sold in a very short period of time, the contact with the ice will draw out the moisture, making is loose weight, adding shrink, and will diminish the eating experience. Food safety is more difficult to maintain in a service case, where the fish is exposed to more cross contamination possibilities then that an over wrap product.

The one constant would be the level of service and the education of those available to answer questions. The fact that a retailer has a service case in the store doesn't mean that they provide service. Many times the deli clerk, with no seafood knowledge is asked to cover the department. Sales are also lost when there is no one there to service the customer. At least with self-service the opportunity for a sale is present as long as there is product in the case.

Service still depends on people and not the type of case that is used to display the product. In short, A self service seafood case that is well displayed with a good variety of fresh product is better that a service case where the product quality and service are poor.

And another MNB user wrote:

Obviously sales in seafood and floral will decline when Giant converts these departments to self-service. You know it, I know and Giant knows it. And what is more interesting is that Wegmans knows it. It's know secret that labor costs have been hurting Giant for years and the labor savings should more than outweigh the loss in sales, over the short run. In the long run, Giant will just become another A&P going into a vicious cycle of cutting labor, lower sales, then cut labor again etc.

KC, I think you were right. Giant probably did staff these departments with the wrong people. Much of Giant's labor force is unionized whose wages and benefits are determined by labor contracts rather than by individual productivity.

Still another MNB user wrote:

It's all about the bottom line and nothing to do with what the customers want. Every since Ahold purchased Giant Landover, the chain has been in a "death spiral" and no one seems to care. We used to spend over $8000 a year at My Giant and now we use it as a "fill in" shopping store only because it's the closest store to our home.

What caused us to shop elsewhere:

• Consistent out of stocks, regular and sale items.
• Reduced SKU's/item selection -local and regional items in particular.
• Eliminated the in store bakery.
• Changed the Ad calendar - put weekly Ad's in Wednesday paper and the sales start on Friday - Question - what day of the week has the highest newspaper sales and when do the "majors" start there weekly sales. This may try to differentiate you from the market, but it's not working.
• Deteriorating produce section - doesn't most produce come from the same general area?

And now these new changes. If "My Giant" is a low volume Giant, it's because of the way the chain is managed, not because of the demographics of the neighborhood. So where do we shop:

• Safeway - two miles down the street - a floral person that know my wife and I and will make you anything you want and makes you feel special, a great little Starbucks, better item selection, better in stock - if they advertise it, they have it (what a unique concept), a superb Produce, Seafood and Deli departments, and an in store bakery that smells so good it makes you buy something every time you are in the store.

• Bloom - next block over from the Giant, and has made strides since the upgrade from the Food Lion Banner.

• Coming soon to my neighborhood - Harris Teeter and Wegmans which we now travel 15 miles to shop occasionally.

I hope someone buys Giant before the bean counters from Ahold close the rest of the stores. The Marketers at Stop and Shop/Ahold are long past their prime.

In a commentary last week about deposed and convicted Wal-Mart vice chairman Tom Coughlin, who is trying to keep his retirement benefits despite the fact that he defrauded the company, we were pretty critical of the former executive and essentially suggested he should count himself lucky that he’s enduring house arrest instead of hard time somewhere.

To which MNB user Joe Fagan responded:

If Tom Coughlin invites you down to Arkansas to go bird hunting, I believe if I were you I would turn down the offer.

Noted. Our business plan mandates that we stay away from executives with loaded firearms.
KC's View: