business news in context, analysis with attitude

Sorry that "Your Views" has been missing in action the last few days; between traveling and some lousy internet connections, it has been hard to find the time to get through the email.

So let's start with a response to my piece about IGAS deciding to provide its retailers the option of offering online shopping, which I suggested was way too little for a fleet of stores that needs to do a lot more to achieve relevance.

The email was from Jim Walz, VP of brand development at IGA:

Thanks for sharing your comments about IGA GO and IGA overall. When you send a press release to morningnewsbeat.com, you know there’s not going to be any holding back on the commentary.

So why is our online ordering program presented as “optional” in a retail environment where, we agree, competitors like Amazon are knocking at our door? The short answer is that IGA is taking a similar approach as many chains which are gradually expanding their e-commerce roll-out as they continue to test and learn how to market and satisfy customers with this new strategy. Leading IGA retailers understand the importance and urgency of competing with e-commerce and we are making it as easy as possible for all of our retailers to get started with partners who have demonstrated they can make it work for independent operators.

But understanding your point was about “optional”, not e-commerce, we couldn’t agree more that success in the future for IGA will require new thinking about what is optional. That IGA is celebrating its 90th anniversary this year suggests that IGA Retailers have been able to change over time. But IGA and IGA Retailers know there is no guarantee for the future. The key to IGA’s future success is moving to a system that focuses more on interdependence than independence. That doesn’t mean every program will be mandatory. What needs to be mandatory is treating each shopper with an experience that when done right, attracts and holds their preference for the locally owned independent store over all others. IGA retailers are adapting more every day, aligning themselves with programs that put them in a better position to compete.


Fair enough.

But at the risk of seeming overly harsh, let me suggest to you that the changes that IGA retailers have seen take place over the last 90 years may pale in comparison to the challenges they will see in the next nine. And I would continue to argue that IGA needs to be a lot tougher about its minimum standards - there have to be minimums that every one of its retailers must meet if they want to keep the banner, and those minimums cannot be optional. And, quite frankly, I think you have to raise the bar every year.

Another MNB reader seems to agree with me:

I think you are being optimistic when you date the stores only 20 years behind the times. I have seen some that look like they haven’t been updated since the 1980’s or earlier. Narrow aisles, dark lighting, limited selection. The only positive seems to be friendly checkers.




Got the following email from MNB reader Rich Heiland:

You have written a lot about Tesco so I thought I would share a couple of experiences. We spent much of this month in England, Scotland and Ireland.

In Dublin we stayed in the Temple Bar area, using an AirBnB with a very small fridge so we became European shoppers - buying what we needed for the evening and next morning.

There was a Tesco Metro a five-minute walk away. I was very pleasantly surprised at the size and selection for an urban small market. The store was clean, well-laid out, easy to navigate. The selections seemed geared to an urban market - smaller packages of meat etc. They had more staffed registers than I think you would find in a store of similar size in the States as well as self-check. No bags unless you buy 'em so we used our back packs for groceries. One thing I noticed by shopping European is that we shopped for "what do you want to eat tonight?" more than at home where we just start piling stuff in the cart. Probably healthier?

I will add we stopped one day at a Tesco Express on the way back from a museum and I was surprised at how much this smaller store had.

We just had a Kroger Country Market open in our town, which I am spoiled on, but I have to admit that being in a small, well-laid-out and easy to navigate urban store was quite pleasant. So, in spite of some of the issues Tesco has going on, down on the ground we were very pleased.


I've always liked Tesco's small stores in the UK, which made it so surprising that it screwed up Fresh & Easy so badly. Thanks for the report.





Got the following email from MNB reader Bob Vereen about the growing competition from Aldi:

Shopping for groceries for us  (and I suspect many others) now is conducted down two pathways - for all the basics, Aldi, especially when milk is $1.29 a gallon; diet cola, $2.29 for a dozen cans, and a very decent Winking Owl cabernet sauvignon at $2.89.   (I know—you wouldn’t drink such a cheap wine, Kevin).   For specialty items and non-basics, Walmart or maybe Kroger.

I think many others. And for the record, you'd be amazed what I'd drink; one of my favorites is a good $8 chianti. (Though, to be honest, $2.89 for a bottle does seem a little low...I can't even get grapes for $2.89 a pound.)




Got several emails about the brewpub in Bruges, Belgium, that used crowdfunding to finance a beer pipeline under the town.

MNB reader Mark Boyer wrote:

My wife and I honeymooned in Bruges 24 years ago, and at the time the town was known mostly for their lace and chocolates. And it was a very beautiful and quaint town with boat rides though the river/canal that runs through the town.
 
Sounds like it might be time to go back.


From another reader:

This past week I was able to take a VIP tour of the new, New Belgium Brewery in Asheville, NC. It is new, it was built on a brownfield site with environmental issues, it is state of the art and environmentally sound. It is a beautiful facility, built on a tubing and canoeing river with a walking and jogging path, includes a ping pong area and a two story slide for employees. It is employee owned, was opened with just about 15 seed employees from Ft Collins and hired close to 170 locals. The employee benefits are significant.

It fits with so many of the issues you report on and also is a brewery so it is a perfect fit for you. I highly recommend you visit and tour if you get a chance.

This past week I was able to take a VIP tour of the new, New Belgium Brewery in Asheville, NC. It is new, it was built on a brownfield site with environmental issues, it is state of the art and environmentally sound. It is a beautiful facility, built on a tubing and canoeing river with a walking and jogging path, includes a ping pong area and a two story slide for employees. It is employee owned, was opened with just about 15 seed employees from Ft Collins and hired close to 170 locals. The employee benefits are significant.

It fits with so many of the issues you report on and also is a brewery so it is a perfect fit for you. I highly recommend you visit and tour if you get a chance. Our guide was Mike Craft and he was an amazing guide. If I were you I would try to contact him directly about a behind the scenes tour. That is part of what he does and he does it very well.

Noted. Just have to find a reason to go to Asheville.

And from another reader:

Kevin, loved that story and was wondering if you were aware of BrewDog, the Scottish Brewery that has raised over £25 million in the UK through a crowdfunding model and is now building a new US brewery in Columbus and attempting to raise up to $50 million in the same fashion ... The similarities are that at certain investment levels you get perks (% off at their bars or on-line, free beer, swag, etc).

Y'know, I drive through Columbus every June on my way to Oregon. Just found a reason to stop there for the night...




MNB reader James Tenser weighed in on the notion of robotic/mechanical clerks:

I too am fascinated with mechanical clerks ... What was a cute trend story a year ago has expanded to the next level. Soon we’ll be bumping into robo-clerks in the aisles, in malls and in parking lots.

Makes me think that young people looking for a lucrative career path may want to prepare for an emerging area of liability law – robo-torts.





Had a story recently about the number of bags Ahold said it has saved over the past few years, in both all its bricks-and-mortar chains and in its Peapod e-grocery operation. Leading one MNB user to write:

I find this hard to believe --- I get groceries delivered from Peapod weekly and EVERYTHING comes in plastic bags -- 8 to 10 per order. They are making NO effort to reduce plastic bags @ Peapod.




Regarding the bonuses that are being distributed to Walmart employees by management, MNB reader Tom Murphy wrote:

Wow, if my math is correct, it is an average of $215 per hourly employee…no doubt along the lines of what management received!

Irony noted.




Responding to our piece about how a sizable percentage of US CEOs could be characterized as psychopaths, one MNB user wrote:

They must have interviewed my former boss as he would have met all of those qualifications. At least he wasn’t the CEO.

The “dangerous, yet effective mix of a lack of empathy, self-centeredness, deviousness, and self-regard” can be described much more simply:  A BULLY.   Standing up to that bully led me to a much better career. I consider myself blessed every morning when I get out of bed.


Got a number of emails from people wondering if the decision by the Washington Post to run the piece about psychopath CEOs might be related to a CEO currently running for high political office in this country.

My answer would be yes ... though that CEO's name never was mentioned in the piece.




Did a FaceTime piece the other day decrying the fact that American Airlines is running ads suggesting that customers have to be responsible for their own happiness when flying, and how some hotels have begun charging for in-room coffee because, well, they think they can.

MNB reader Daniel McQuade responded:

Agree with you (as a frequent flyer) on the AA ad program....perhaps THEY need to put more latitude in their attitude!

Also on the smell the coffee...stayed at a CityFlats concept hotel in Grand Rapids, went down to down to the lobby early one morning, asked for a cup of coffee to go. As I went to pay I asked if the coffee was free. Was told no...it's complimentary. Point. Taken.


MNB user Brian Blank wrote:

I find it interesting that you are so fond of the in-room coffee experience in hotels.  Judging from my Twitter timeline, you are in the minority there.  Most people’s thoughts (that I’ve seen, at least) are that anyone presenting that liquid to be “coffee”—or even consumable—has a lot to answer for.  Of course, that just further supports the feeling that it shouldn’t be charged for.  IMHO, I’d say to just take the coffee makers out of the rooms if they don’t want to provide a free amenity.  (I’m sure there are plenty of Airbnb hosts who’ll provide actual good coffee to their guests for free.)

As for the American Airlines commercial—true, the airlines (not just AA) have brought so much of the hostility on themselves, but equally true is that, in the air or on the ground, people just don’t know how to behave these days! (See certain political campaigns.)  Do we need to go back to having those dorky How To Behave Like A Human films in school?  (If so, seems like American is leading that charge…)  Maybe the airlines just need to replace the inflight magazines with copies of Highlights so that Goofus and Gallant can teach us about window shades and being nice to flight attendants.


I didn't say the coffee was always good. Just that when I'm doing MNB, hot caffeine often comes in handy.




Regarding scientific studies saying that the five-second rule is bogus, and that any food that hits the floor ought not be eaten, one MNB reader wrote:

In our house, the 5 second rule is the time it takes for one of the dogs to pick up the tasty morsels!

Good point.




We had a piece the other day about how CVS is offering curbside pickup at a number of stores, prompting MNB reader Dan Mellyn to write:

Won’t this kill impulse purchases & decrease basket size if the consumer never gets out of the car and goes into the store?  Why not have the items bagged and ready to go at the register at least get them 10 feet into the store.  I can see the convenience for people who are disabled.
Hopefully CVS which discontinued selling tobacco as it was not a healthy offering draws the line on orders that call for two large bags of Cheetos, a pint of Ben and Jerry’s and half gallon of Coke, those people need the exercise...


Another MNB user wrote:

This will be interesting to watch.  A lot of retailers offer this (BOCSPU) as well as buy online, pick up in store (BOPUIS).  While the concepts are simple, the execution is anything but.  Everything from order storage space, to parking and traffic issues, to no inventory in the store, to no employee available to bring it out.  Plenty of retailers give it a whirl in pilot mode only to realize these complexities.  It is a real opportunity for CVS to exceed customer expectations…or to step on a land mine!




Regarding the growth of Amazon Prime, MNB reader Gregory Grudzinski wrote:

I’ve always found the idea of “paying $99 for free shipping” to be an oxymoron and an example of how smart marketers (e.g. Amazon) can reframe the facts of the matter to fit a narrative.
 
Amazon could have positioned Prime as “the more you buy, the less you pay for shipping,” but the company understands that age-old axiom that FREE is one of the most powerful words in the English language.





Responding to our piece about Amazon taking over on-campus bookstores, one MNB reader wrote:

Delivery was noted, by me and others, as a trend with potential to disrupt providers of onsite foodservice, vending and other immediate consumption services operating at B & I (business and industry), colleges, hospitals, etc.

Amazon on campus will be much more than books and electronic stuff. Food and snacks will be more readily available for convenient delivery and then easy pick up on campus. Forget cookies from home. Now it will be snacks from amazon.com.

It's a very interesting evolution:

1. Colleges ran their own book stores.
2. Then Barnes & Noble et. al. came to campus,
3.  Next it was Walmart on campus.
4.  Now the ultimate disruption, Amazon.com on campus.

This will impact every retail store and food seller on or near campus.

Hope that I recall Jeff Bezos' quote correctly, "Your margin is my opportunity."





We had a piece the other day about how some supermarkets are being less strict about the number of items that can go through the express lanes, leading one MNB reader to write:

I noticed this for the first time a few days ago. I can't say I have ever used these express lanes because to your point, I don't think they move any faster than other lanes and I doubt that the average shopper cares to pay attention to how many items they have. People who truly only have a few items are more likely to go through the self-checkout anyways.

And from another reader:

As a grocery store veteran, it has been my experience that those who will give you hell if you get in the express lane with too many items is the customer behind you….and they can be a pretty rough lot….you don’t want to mess with someone in the express line…




Regarding the possibility that we could have self-driving tractor trailer trucks careening around the country, MNB reader Jackie Lembke wrote:

First movie that comes to mind is Maximum Overdrive, one of my favorite cult classics. If you take it further the movie included lawn mowers, tractors and other machinery working without benefit of human operators. It has been done by Stephen King.

Another reader had a similar observation:

I think that was the plot of a Stephen King book/movie from the early 80's - Maximum Overdrive - where machines went crazy due to an asteroid (or something like that).  Most of the story was about trucks and people trapped in a truck stop.




Finally, regarding a petition being circulated online calling for In-N-Out to begin offering a veggie burger, one MNB user wrote:

So I’m born and raised in So Cal.  In & Out is an institution in my book.  They cater to anything custom – so if I were the CEO, I would say we already carry a meatless option - cheese, lettuce, tomato, and onion on a bun.  It’s funny,  I would never go to a Vegan restaurant and demand a beef burger.

Good point.

But another MNB reader had a different take:

Just my humble opinion but I’m guessing this is not an effort to draw customers in solely to eat a veggie burger at In-N-Out, but there may be other families similar to mine. We have two teen daughters, one of which is currently on a veggie kick. Trying to select a restaurant that would satisfy everyone’s needs while away from the house can be challenging. Offering a non-meat option, makes it viable for the 4 of us to eat at In-N-Out. In other words, In-N-Out has added an option that allows them to sell three additional burgers simply by offering a veggie burger.

Not to say that said daughter might opt in to a tasty beef patty once confronted with the odors wafting out of the restaurant, but at least she has the option, and we have 1 less “discussion” about where to eat.

KC's View: