business news in context, analysis with attitude

Yesterday, we featured an Eye-Opener about how, in a message to customers, Stew Leonard, Jr. recommended that his customers go visit a newly opened Amazon Fresh store with checkout-free technology.

I commented:

When was the last time you saw a retailer recommend that customers go visit a competitor?'

I've been doing this a long time, and I can't recall it ever happening before.

Now, let's be clear - Stew Jr. is using the recommendation to draw some clear lines of differentiation between his stores and the Amazon Fresh.  He's arguing that his price of apples ($2.99/lb. vs. 99 cents apiece) is lower.  And, he's pointing out that there may be some flaws with the technology.

But, implicit in Stew Jr.'s email is enormous confidence that Stew Leonard's value proposition - strong on fresh, terrific theater, sharp pricing, and a limited assortment of some 1,200 items - can compete effectively with Amazon Fresh - in fact, he's confident that if you compare the two, you'll prefer Stew Leonard's.

One MNB reader responded:

Yes, it is a bold message.  The best part of the message is that Stew recognized a customer in an Amazon Fresh Store, spoke with this customer and then purchased the rotisserie chicken.  I hear you, I see you, and I am actually listening.  I can’t think of a better way to engender loyalty.  On the other hand, he points out that the Amazon store is sort of dystopian with cameras watching your every move, but failing to get it right. 

From another reader:

Harken back to the film, "Miracle on 34th Street" where Santa begins to recommend to parents of children that cannot find the item they are looking for at Macy's, that they can find that item at another store nearby.  We do the same thing and why not?  Isn't the point of operating a retail business to help the customer find what they are looking for?  If we don't stock it, or we're out of stock, let's help that customer find what they are looking for wherever that item may be found.  Even if it is carried by a competitor.  

In a column yesterday about the low unemployment rate in Minnesota, Michael Sansolo made a passing reference to the snow the state often gets.  Prompting MNB reader Henry Stein to write:

Common to any story about Minnesota, Michael Sansolo references “snow” in his concluding sentence about over and under employment rates in our state.

It’s always a good reminder that in Minnesota, we have no wildfires like California, no hurricanes like Florida and Texas, no flooding like Kentucky and Tennessee, few tornados like Oklahoma and Kansas, and earthquakes? Nope. Occasional snow. Not a bad trade-off.

Commenting yesterday on CVS Health's deal to acquire Signify Health, which runs a network of doctors making house calls, for roughly $8 billion, I made a point that I've made before - that I find it hard to imagine placing my healthcare needs in the hands of a retailer that runs such mediocre stores.

One MNB reader responded:

I agree with you about CVS.  I often find my local CVS to look like your picture.  Will it get worse because they will be focusing on non-retailing?  And you are right to question- can we trust them with healthcare if their retail is like this?

And, from another reader:

Long story short. Went to my primary care doctor of 30+ years, had my annual physical, did a stress test, that afternoon my primary care doctor saw the results of the stress test, I got a text from her with the message, go to the ER immediately. I did so, and found out I had 3 blocked arteries, and left the hospital with a triple by pass surgery 5 days later. 3 weeks to date, I am on the road to a complete recovery. The moral of the story for me is that I do not want my healthcare provided by Walmart or any other retailer who wants to enter the healthcare industry. I will leave it to the doctors who know my health history.

Agreed.  Hard to imagine CVS - or Amazon, or Walmart - being part of such a narrative.

In my FaceTime video yesterday, I noted that recently, outgoing Whole Foods CEO John Mackey said that younger people "don't seem like they want to work" partly because they want meaningful jobs.  "You can't expect to start with meaningful work. You're going to have to earn it," he said.

I disagreed.  Profoundly.  And to lead a company with an attitude like Mackey's, I think, is tantamount of managerial malpractice.  (I actually was tougher than that on Mackey, who has he's gotten older seems more and more misanthropic.)

One MNB reader disagreed:

Mackey is 100% correct. Must be easy making calls from the bleachers!  Talk to the hundreds of service oriented small businesses across the country and the majority would agree.

Do you read MNB?  What I do is make calls from the bleachers … but it doesn't make me wrong.

Another MNB reader wrote:

Regarding the beat down of the Whole Food exec :-)………Wow, think you were being a little tough on him , he gave an answer that boils with frustration and I would have to give him a break as I personally know how he got to where he is.  Don’t actually agree but remember he is probably dealing with youth that are the children of the millennials who suffered thru 3 recessions including 9/11, covid and dotcom.  They are also tagged as being the first generation in recent history to be less well off than their parents so their kids are a product of that.

I think the toughest job in an organization now might be human resources because the market now is in such disarray especially for youth. They are victims or the current strategic failure between education and the business community. First hand, I have seen students from secondary schools reading and writing at the elementary level, some not even being able to read at all.  And there are a significant number out there like that, and many of them have high expectations in a cruel world. The lack of cohesiveness between education and job market, or lack there of, seriously needs to be addressed.  Candidly,  many execs will tell you the same thing that the Whole Foods guys expressed, many for the same reason, frustration.  That doesn’t mean however business can’t start the process, flipping burgers or frying chicken can be an entry way, if it is used to teach understanding and knowledge of business enterprise.  Chick Fil A is one of the best at doing that. 

This problem is way bigger than Whole Foods and it starts with family and education, then nurturing by the professional community in a way that guides youth to a work future.  Show me a kid that can’t read or write today or has no job skills/training and I’ll show you one thats going to be a labor causality tomorrow.  That just points out the need to have meaningful instruction that leads to meaningful jobs, we all have a part and we shouldn’t allow frustration and a setback determine who we are or who we are not.

From another MNB reader:

Thank you for your thoughtful video.  You are spot on in your comments.  Perhaps, John Mackey has forgotten in his C suite that stocking the shelves, sweeping the floors, and bringing the carts in from the parking lot, not only have meaning, but on a fundamental level may have much more meaning than his role both to the customer and the employee.

And another:

Wow. Where do I start? Great stuff as always, Kevin. Here’s my take:

Generational differences. One of our senior leaders published an article in our company newsletter about this. We have so many employees of high school and college age, we can see it daily. They wrote about the different perceptions of younger people and different work ethic. They went further, though, explaining how it was incumbent on leaders to understand and respond to what this younger generation was looking for. The article was written in 1978. They were basically talking about me. Of course the differences are different now. They will be for the next generation, too. What hasn’t changed is that true leadership requires…

Meaningful work. Our former VP of Operations had a few favorite books he would share. One was Gung-Ho, which spoke about this very topic, the importance of helping people find meaning in the work they did, whatever it was, along with empowering and encouraging them along the way.

MNB reader Patrick Smith wrote:

I am retired from the food industry. I started in the 60’s working for Albertsons in the Pacific Northwest. I recall that my first store manager, at the division’s top store in 1964, made $42,000, much of it from bonuses. Not all stores produced these incomes, but it was a brass ring many reached for. The store department heads all bonused too. Young and aggressive store employees all worked hard to get one of the plum jobs in that organization.

Now, store managers may have multiple stores for which they are responsible and department heads get little beyond their salaries. I have numerous friends, at the time like me who were not college graduates, who had good careers with both Albertsons, plus their various northwest competitors. Now many of the jobs these people held either do not exist, or the financial rewards are far lower than in the past. I am aware that things do change, but some things do remain constant. If you read financial publications that rate successful companies, in all types of industries, a common thread they share is they hire and retain effective employees. They do this through valuing their work in both work environment and result driven compensation. It seems to me that retail grocery industry, by and large, has gotten away from this once proven policy. Just do the math and figure a 1964 salary of $42,000 per year in today’s dollars.