business news in context, analysis with attitude

Got the following email from MNB reader Rich Heiland:

Been reading your site about Sears and want to add something...

In many small towns, the "Sears" store is really a local store. It is a franchise owned by hometown folks.

Take my small town, Huntsville, Texas. For years the Sears store was small - appliances, electronics, tools. Good folks, good service and they grew. Two years ago they moved into a vacated "kinda big box" in a shopping strip. Alas, it was a failing strip and a year-and-a-half ago HEB bought it and announced plans to put in a mega-store.

HEB has been very fair and generous about helping the surviving stores in that strip move and the folks with the Sears franchise are about halfway through building a new store on the end of the newest, most upscale strip in our town with a Target, Academy Sporting Goods, Kroger Signature, Ross, etc. 

So, what happens to these folks - not even open yet and no doubt in debt - if Sears goes belly up? What happens to the brands, inventory supply chain?

I totally agree the Sears-Kmart story is one of total mismanagement, even incompetence. But the pain is not going to be just in big boxes. It is going to be felt on "Main Street."

No answers, no opinions really. Just an observation.

On a related subject, got an email from MNB reader Ken Wagar:

Today in your MNB comments you made reference to Fast Eddie Lampert. I have no interest in him, I agree with your comments about Sears/Kmart and it is clear he has been a poor steward of those companies.

However, it struck me that while he has often and for a long time been referenced as "Fast Eddie" there is little difference between calling him Fast Eddie and calling Hillary, Lying Hillary and to 100 other nasty prefixes that have become common in this divided country in which we live. Maybe a very small step in a better direction would be to start referring to people by their names rather than the often derogatory adjectives we seem to find being used for everyone from the disabled, the disadvantaged to immigrants to the President. I know this is a very small thing, but it did strike me as not helpful to real communication.

I think this is a very good point. I'm willing to take the small step in a better direction that you suggest.

MNB user Larry Richardson wrote:

Kevin…in your article (“The Impending Death of a Retail Icon”) I believe a lot of analysts/consumers probably have seen the Sears debacle play out the way it has been anticipated.  I have been saying for some time now that I also believe that Shopko will shortly follow suit on the commerce chopping block.  Retail companies need to stay fresh and relevant.

MNB reader David White wrote:

Sears is still open? Imagine that…

Got the following email from an MNB reader about Hy-Vee, which, we reported last week, is testing the use of traffic lights to tell customers which checkout lanes are shortest.

Which prompted one MNB reader to write:

The best can stackers strike again. The bane of our industry. Nothing against Hy-Vee, who actually tends to be, relatively speaking, one of the more innovative companies in our industry.  My point is that the most efficient, most disciplined, most risk averse are typically the individuals who have risen to the top in an industry which prides itself on efficiency, discipline and risk aversion.

What word is missing? Imagination.

This is why, IMHO, the industry as a whole is having such a difficult time with the most difficult retail environment I have seen in my 30+ years in the industry. Imagination, true outside of the box imagination, is a skill which has rarely been rewarded in this industry simply because the price of failure is typically too high. Additionally, the patience necessary to cultivate and experiment with an operational concept, retail format, or merchandising idea, allowing such imaginative innovations to mature to fruition, is rarely taken. (So as not to tar with too broad of a brush, there are always exceptions, Wegmans and HEB leap to mind in the more conventional segment of the industry just to name two.)

I’ll not sound the death knell of the supermarket industry here, as I have seen it rung too many times over the years and yet the industry has always proven itself to be remarkably resilient. However, there are, again IMHO, definite winds of permanent change mounting in this retail environment such that unimaginative, incremental alterations around the edges will not be sufficiently adequate to address but shall be ignored at a retailer’s peril.

From another reader:

I’ve never understood why grocery doesn’t do the same things as airlines and banks…one line to queue in? Whole Foods does this at Columbus Circle in Manhattan and it prevents customers from searching for the shortest line, or worse yet becoming upset because in the line they’ve chosen has an issue with an item price, broken eggs, or worst of all…someone who writes a check and doesn’t even dig for it until the receipt is handed to them. With a queue system no one feels hurried or delayed.

MNB reader Claire Tenscher wrote:

I hope Hy-Vee has taken into consideration that the shortest line isn’t always the quickest! I’m having a fun time imagining shoppers rushing back and forth between lines that have a green light, akin to cars switching lanes in a traffic jam.

In commenting on this story last week, I wrote:

Forgive me, because I don't want to denigrate what Hy-Vee is trying to do here. Anything that reduces checkout lines is a good thing. But...when compared to the technology being tested by Amazon in Seattle that will eliminate checkout lines and lanes, this seems like small ball.

It just strikes me as a vivid difference in thinking.

Which prompted one MNB reader to write:

A team or company has to go with the roster it has at the time. They can’t always swing for the fences and a homer, but sometimes must go for a single, double or even a bunt to compete.

Fair enough.

On Friday, MNB reported on how President-elect Donald Trump said he would nominate Andrew F. Puzder, CEO of the company that franchises the Hardee's and Carl's Jr. fast food chains, to be his secretary of labor, and noted that there are those who suggested that Puzder has not made workers and their careers a centerpiece of his business strategies.

Puzder, the New York Times reported, has been "an outspoken critic of the worker protections enacted by the Obama administration," and a firm critic of efforts to boost the minimum wage. Puzder also has advocated for replacing fast food employees with robots. Machines, he once said, were “always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall or an age, sex or race discrimination case.”

I commented:

I found myself curiously conflicted yesterday when I heard the Puzder quote about automation. On the one hand, I feel bad for the poor fast food employees being replaced by robots. But on the other hand, I took a different position on automation when Amazon made its revelations earlier in the week. Is Hardee's any different from Amazon, at least in this regard.

Here's what I think. The problem is not automation replacing people. That's inevitable. As one MNB reader said yesterday, when was the last time you went to a bank teller as opposed to using an ATM or banking online? Cars replaced horses, which put buggy whip manufacturers out of business. People read newspapers and magazines online, which reduces the need for newspaper delivery boys and girls. This stuff is inevitable.

What is important, in my mind, is where you go from here. Once you accept that technology creates the displacement of humans in certain segments, you then have to look forward and figure out where the next jobs will be. And that's what you train people for. Tomorrow's jobs, not yesterday's.

If I were president (and this is something that nobody would want), I think I'd want a Labor Secretary who came from a company like Linked In or Monster - someone who knows where the jobs are going, as opposed to where they have been. I'd want someone who thinks in terms of the highest common denominator, not the lowest. I'd like someone who created a company that invested in employees and did not see them as liabilities.

But that's just me. And I'm not president.

MNB reader Edward Zimmerman wrote:

Good comment ... One element to consider, the restaurant industry is the largest private employer in the country representing 10% of jobs. Having a Sec who “gets it” is not a bad idea to manage a structural transition toward your thought of where the jobs are going …

From another reader:

Agree with you, plus have you eaten at Hardee’s or Carl’s? Talk about lowest common dominator.

MNB reader Jeannine Wilkins wrote:

I’d prefer you as president over the new guy coming in! And, your ideas about who to select for Labor Secretary are very insightful and it would be great if that could happen!

And MNB reader Rick McNeil chimed in:

You said “If I were president (and this is something that nobody would want)”.  You are too modest.  The bar has been set low.  I’m sure many of your readers who would prefer you to the other choices we’ve had recently.

Trust me. The bar cannot possibly be that low.

Though ... talk to me again in 2018.
KC's View: