business news in context, analysis with attitude

MNB took note last week of a in the Washington Post that hinted at the kinds of problems that private industry will face in just a few years, saying that US federal agencies could lose as many as 25 percent of their employees by 2012, mostly through retirements by baby boomers – and that this trend could severely compromise the government's ability to deliver basic services.

And, the Post wrote, in a sentence that could reflect a lot of industries, not just the federal government, that "there are growing concerns that the government may be at a disadvantage in competing for talent, especially among young people, because of its slow and cumbersome hiring practices."

I commented that as the retirement wave approaches, it isn’t just the federal government that has to be concerned (and I'm pretty sure that there are plenty of people out there who think that a federal government with 25 percent fewer employees is a good thing).

The same problem is going to affect a lot of businesses, and retailers especially have to worry about how they are going to attract young people since they also are often at a disadvantage in attracting new talent.

Interestingly, I got an email from a MorningNewsBeat user who is thrilled with the incipient retirement of an entire generation…and it is relevant to this story:

"I am tired of them standing in my way and taking up space. I am 46 years old, been in the business all my life … I have been stuck behind these boomers all my career.

"Retire and get out of my way. I am ready to lead. Now that the Boomers are going away, perhaps there is opportunity. Many of these Boomers have looted companies and run them into the ground for their personal gain."

Pretty cynical. But maybe it points to a larger problem that the industry needs to address.

This apparent animus prompted an enormous amount of email…

MNB user Edward F. Ogiba wrote:

To solve the increasing demand for capable workers, most industries will need to do much more than attract and train young talent, as this source of supply won't meet the projected demand.

Today's slow economy is temporarily masking a growing shortage of qualified labor that's already become serious in some sectors. Today, industries as diverse as Silicon Valley and farming have a deficit of experienced workers at many levels. Filling senior and middle management needs is becoming a significant concern. HRH's survey showed one in six US companies are already bracing for a major shortfall of higher-level managers and executives in just 2 years. Most signals say these trends will become more prevalent and intensified.

In contrast, numerous studies report the majority of those approaching retirement or already there want to keep working to remain active and feel productive. One study claims 79% want to, with many also saying they need a paying position. But most boomers are not looking for a full time job and responsibility. Most want a more flexible job than most companies are currently offering.

As the increasing demand for proven help escalates, it seems evident that more companies will adapt to be more resilient hiring approaches to attract more boomers and take advantage of the increasing supply this talent pool offers.


Another MNB user wrote:

As a Gen X’er, I have also been waiting for the Boomers to “get out of the way” as your commenter from Thursday’s edition put it. I always thought that once they were out of the workforce, promotions would be easier to get and job openings would be plentiful as companies looked for experienced workers. However, in today’s economy, I’m wondering whether the retiring Boomers will be replaced at all. I can see a lot of companies salivating at the chance to re-absorb the salary dollars of top level Boomers right into their bottom lines without replacing them. This will lead to no promotions/raises and heavier workloads for those already employed as well as no new job opportunities for us Gen X’ers or the new Gen Y workforce.

Still another MNB user wrote:

That 46 year old, who has been standing behind older Boomers all his life is going to be shocked when he learns he also is a Boomer!!! But he does reflect what happened to many younger Boomers, well qualified, but always standing behind better qualified older Boomers creating a log jam of capable individuals. Your 46 year old "Boomer-in-denial" will also be shocked, when the older Boomers retire, and they are replaced by a very qualified, active, passionate, wired...and younger...Gen Xer - who digitizes the "passed over" Boomer's job.

Well, you just ruined his week…

MNB user Nate Lasko wrote:

Well it’s always nice to get a healthy dose of ignorance before 8 am. The older baby boomers have nothing to do with that particular gentleman’s career moves. He is responsible for his own career and financial decisions and if he was at a company that was not promoting or had no room for him to move up the ladder, he should have looked somewhere else or started his own business.

There are 75 million baby boomers retiring in the next five years. They will on average collect 1000$ per month for Social Security and the ones that were wise enough to invest in 401ks or other retirement vehicles will be cashing out on those. Anyone who knows anything about the markets can see that when there is a mass selling of stocks and bonds, it creates a sell off frenzy. With the Baby Boomers being the largest population group in the history of the US, this will inevitably put major pressure on our already declining economy. With the dollar losing buying power daily and inflation steadily climbing we as a nation are headed towards another recession if not depression in the next 5-10 years.

How you position yourself in the next few years to take advantage of the extremely low price assets like stocks and real estate will determine which side of the spectrum you end up on. Either the ever growing rich or the disappearing middle class!


MNB user Mike Jadrich wrote:

Just a message for the 46 year old individual wanting us Boomers to retire so they can lead: If you are stuck in a rut and frustrated….do something about it. Don’t blame the Boomers for your own career choices. Go out and start your own business. The beauty of living in such a free society is the ability create your own path. Sorry, I can’t feel sorry for you.

One MNB user wrote:

I can tell you that with baby boomers retiring - it will sure help companies to be put more dollars into wages (where many young people look first in deciding a career) versus dinosaur pension funds and completely employer sponsored health plans. These archaic ways of spending labor funds are draining companies and making it impossible to compete globally.

Employers should pay good, competitive wages and contribute to benefits for their employees - just as the employees should have a vested interest in their health care and retirement costs.

Can you tell I am a generation Xer and have never had a traditional pension plan?


And finally, MNB user Lorna Nelson wrote:

A lot of folks our age have no intention of retiring at 65, in spite of the statistics that we keep being fed. I for one, 50+ and recently divorced (with little retirement saving), may not be able to afford to retire in 15 years. As you have mentioned before, Boomers are in better shape physically and mentally than earlier generations, and many of us plan to work well past the magic age of 65. Look at Warren Buffett!

Kevin, it you are still writing this column at 80, I’ll still be reading it…


As long as my fingers keep working, I can't imagine what else I'd be doing. Unless I decide to box on the senior circuit.




On the subject of Wal-Mart apparently losing at least the short-term battle in Chicago, unable to open as many stores there at it hoped and being forced to focus instead on the suburbs, where union opposition is less strident, one MNB user wrote:

I would think that the great minds at Wal-Mart and the UFCW could figure this one out!

It seems to me that if Wal-Mart wants to take advantage of the lack of choices for urban residents, instead of playing the victim, they could do the right thing and bring low prices and GOOD jobs for families to Chicago's urban neighborhoods. Wal-Mart could do both and turn a turn a nice profit, but it seems that a nice profit is not enough. They seem to follow a scorched earth plan where they can go into a market and obliterate all competition and all the descent jobs that go with them, thus creating a new customers that can't afford to shop at places that provide good jobs...it's a social downward spiral! Profits/greed rules!


Another MNB user wrote:

I think you missed at least one point here: Wal-Mart could have allowed union workers at their stores. That would have created a win-win – urban stores and wages that provide above poverty living. The Unions were stubborn, but so was Wal-Mart.

Wal-Mart's perspective, of course, is that it does offer good jobs, good pay and good benefits…but that it doesn’t need the unions to get involved in the process because that would result in it losing its pricing advantages. (The story above that looks at Wal-Mart as a model corporate citizen would seem to support this premise.)

MNB user Bob Ahlstrom had a thought from a different perspective:

Is it a fact that there is a lack of food stores in Chicago? I think we heard the same arguments when Cub entered Chicago 25 – 30 years ago!

And another MNB user wrote:

As far as Wal-Mart moving into the suburbs, it might be difficult. I grew up in Oak Park, just across the street from the city limits, and those folks are more excited to MAYBE get a Trader Joe’s after that company had to jump through hoops. I think Wal-Mart would have to go further afield…maybe to southwest suburbs.




We had a piece the other day about Dublin, California, banning big box stores….which struck me as a little silly (though certainly within the community's rights) since apparently there aren't any big box stores looking to locate in Dublin. But this led a number of people to make observations similar to this one:

An interesting fact you may not be aware of. Safeway Corporate Headquarters is across the freeway from Dublin and can see most of the city from their corporate offices in the neighboring city of Pleasanton. Wonder if that had any effect on this vote?

Who knows?




There was another story last week that got a lot of attention – the decision by Baskin Robbins to, for the first time in its history, sell soft-serve ice cream.

Which prompted a bunch of emails in the same vein:

Any coincidence this happens right after one of the founders (Irv Robbins) passes away?

If not, he's rolling over in his grave.

And speaking of rolling over, MNB user Clayton R. Hoerauf wrote:

This strikes a chord due to the fact that my very first job was an ice cream scooper at Baskin Robins. Believe it or not we were taught to shave the ice cream so it would roll into a ball that was actually hollow in the middle. Now at least after nearly six decades looks won’t be deceiving.




We got a number of emails last week responding to our piece about Jim Donald's separation agreement with Starbucks, which among other things clearly established which companies it sees as the prime competition – McDonald's and Dunkin' Donuts – by preventing Donald from going to work for them.

I noted in my commentary that several Starbucks executive shave bemoaned the departure of the former Starbucks CEO, saying things like, 'I would follow Jim Donald into hell."

One MNB user isn’t buying:

Okay, no one is allowed to say anything bad about Jim Donald but you can print that several current execs would “follow him into “hell” – perhaps you would better serve us here by not printing anything since you will get only one side of the story.

If he was “fired” there was a reason and if other management execs would follow the fired man into hell then there is probably a lot of dissension in the current management team. This will not be a good thing for Starbucks.


I don't know that I've ever banned people from criticizing Jim Donald (who, I have noted here before) is someone who has become a friend of mine. I think that legitimate discussion of his leadership of the company is perfectly acceptable, and I also think that there well could be some internal strife at Starbucks as the company looks to regain its equilibrium.

I also think you are right when you say that he was fired for a "reason." The "reason," I believe, is that the board needed to find a scapegoat and do something to juice up the stock price. And a lot of loyalty to him remains.

The following email from an MNB user seems pretty typical:

From a guy who worked for and with Jim at Wal-Mart I can say he is honest, loves people and works 24 / 7. I feel safe in saying Jim did what he felt was right for Starbucks while there. I can only wonder why Mr. Schultz never had any issue until the stock dropped ? Seems since taking over he is not doing much better and feels he has no competition. My bet is he will soon regret letting Jim go…

Another MNB user wrote:

Jim Donald will still end up as the winner. Integrity, visionary, and willing to get his hands in the dirt make him a person to follow....As for me, I will go where he wants me to go and with commitment.

Still another MNB user wrote:

In a day when solid leadership is at a shortage and in high demand, the board/ investors still make the decision based on the numbers. For a company that once proclaimed people as the greatest asset, this is a sad commentary; but not uncommon. It will be interesting to see where Jim lands and who will follow. The last few times in Starbucks, the profile of great service and premium brand has been diminished to less personalized service, display clutter, and unwiped tables. In viewing McDonalds and Dunkin as competitors, it would appear to be a self fulfilling prophecy … the principle of investment that I have been taught is very simple ...you reap what you sow... the harvest at Starbucks may continue to grow sparse.

And here's an interesting email:

Your piece on Starbucks and Jim Donald got me thinking -- why not bring him to FMI? He headed the DC Safeway division once, so he knows the area. Plus he certainly knows the industry. Don't know if he's interested, but he's the kind of leader they need.

The reference here, of course, is to the CEO position at the Food Marketing Institute (FMI), which is about to be vacant with the retirement of Tim Hammonds.

Good idea about Jim Donald. Perhaps the search committee, being chaired by former Hy-Vee CEO Ron Pearson, will take note and give him a call. (I have Jim's number if they're interested…) BTW, one of the theories I keep hearing is that Ron Pearson could end up being the Dick Cheney of this story – you'll remember that Cheney chaired the search committee charged with identifying the best candidate to serve as George Bush's running mate in 2000, and ended up picking himself. But this sounds like pure speculation…

It is probably worth pointing out that while at the FMI Show in Las Vegas last week, I found myself constantly being questioned about the CEO job…and in every case, the question was whether Michael Sansolo - who was senior vice president of education at FMI for more than a dozen years before leaving a year ago and, among other things, now writes a column for MNB - is interested in the job.

I think he'd be terrific, but I have no idea if he'd take the job or if the search committee even will consider him. And it isn’t something we talk about, because I think it is important to keep his FMI-related work (he is consulting with the association, working on next year's education-only Future Connect event) pretty much separate from what we're doing together.

So I'll tell you what I told the dozens of people at FMI.

You'll have to ask Michael. He can be reached via email at msansolo@mnb.grocerywebsite.com .

KC's View: