business news in context, analysis with attitude

Lots of reactions to my video last week about how the price of Thomas's English Muffins has become a benchmark for how people feel about the economy.

MNB reader Don Barthel wrote:

Hi KC - your English muffin video definitely hit home with me!

Once inflation took off, I started boycotting many of my favorite brands due to what I perceived were unreasonable price increases.

I quickly found myself with many difficult purchase decisions.

But, I soon figured out that if I shifted my diet to the items my grocer promoted that week…I had plenty of choices!

Now I’m in the habit of making my grocery list once I pull up the weekly ad online…and I’m saving a ton.

Additionally, I’m trying countless new items and discovering many new favorites.

And…I’ve learned that my old favorites are typically promoted once a month or so, meaning I still get to enjoy them occasionally, or can even stock up that week.  I’ve changed the way I shop, and eat, probably forever now…and I’m enjoying it!

One quick note - maybe the most important word in that email was forever.

MNB reader Deborah Faragher wrote:

You need a Publix!  While the price on the Thomas’ English Muffins is 5.79, they are regularly offered at Buy One Get One Free.  And, at Publix, if you only buy 1 pack, it’s 1/2 price!  

MNB reader Thomas Parkinson wrote:

I grew up with an English mother.  On the problem of the cost of Thomas' English Muffins, switch to crumpets. They're much better anyway.

Another MNB reader wrote:

On the English Muffin front, Thomas worth the extra money as compared to the PL I have tried that mostly taste terrible. I checked the Jewel website and they are selling Thomas at $5.29 too ( although currently on sale at $4.59). That said, will always opt for Bay’s muffins as they are fantastic ($3.99 at Jewel)- several varieties too.

The retail increases on Thomas per the writer are more like 50% not the 70/75% quoted. $.30 or so more a muffin per day is not so bad.

And from another:

Regarding English Muffins as an economic barometer, I too, enjoy a breakfast with an English muffin and quickly noticed my Thomas brand price increases through the pandemic.  I quit buying the Thomas brand in the grocery stores and started buying them at my Costco for a much more reasonable unit cost.  Sure, I now have to buy a pack with 18 muffins but at least I can put half in the freezer and feel like I’ve had a small victory against food inflation.

And yet another:

Thomas's English Muffins are one of those products that no other brand - at least not one I could find - can compete with in taste and quality. While I could easily afford them they had already lost me on price before covid when they went for around $4.29 for six muffins. Just seemed an overpriced indulgence. I would wait for Shop Rite to run a BOGO on Thomas's which happened about every 3-4 weeks. I have left the northeast but if Shop Rite is still running BOGOs on Thomas's muffins I would buy them at the higher price. 

Reacting to my story last week about Bristol Farms closing its Irvine store, MNB reader Greg Broadwater wrote:

Great coverage Kevin. I rewatched your video on this today. I have been to that location about three times and was always impressed with how the store looked, felt and ran. Looking forward to the next iteration that the team will open soon!

Regarding the California law mandating that major retailers have gender-neutral toy aisles, MNB reader Andy Casey wrote:

One of the silliest laws of all time – can’t retailers just put all the toys on one aisle with a big sign that says “TOYS”? Maybe sort them by manufacturer or similar to avoid sexist labelling. Doesn’t seem that hard (or useful) honestly.  

And from another reader:

I admit I am not a frequent visitor of the toy aisles. My children are adults and I don't have grandchildren, just a trio of children (one teenager, a preteen and an 8 year old) for whom I buy presents. I am not sure what a gender neutral aisle is. I haven't seen anything that suggests a girl can't go look at trucks, action figures or whatever and boys can't go down the doll or Barbie aisle in any store. What makes it gender neutral? The game and puzzle aisle would be the very definition of gender neutral to me. Not sure of the impact of this except to raise eyebrows and cause head shaking.

We took note last week of a Fast Company article suggesting that "at least 50% of the skills leaders need today are skills they don’t yet have … and the other 50% are skills that were always needed, but are now required at much higher levels."

I commented, in part:

If you are a business leader at any level - whether a CEO or a store manager or even a department manager - and you think you have all the skills you need to lead, you're kidding yourself.  In fact, if you think you even know what all the skills are you need to lead, you're kidding yourself.

MNB reader Bob Wheatley wrote:

I would say there’s a vast chasm between managers/management and leaders/leadership. The former is more prevalent in organizations as individuals who perform well get pushed ahead into positions of responsibility over others. Yet many (most?) of these people believe their job is to effectively, efficiently “manage” the assets under their control – for profit and effectiveness. This is different, I believe, than leadership which centers on providing a team/organization with vision, mission, a sense of purpose and a unifying belief system for pursuing those higher goals.

Manager or Leader – incumbent on organizations to know the difference and recruit, promote accordingly.

On the subject of the now closed Amazon Fresh Pickup locations, MNB reader Brad Halverson wrote:

I live near the Amazon Fresh Pickup location in Ballard, tried it many times. Was efficient. It had ample traffic early but seemed to taper off in 2019. 

The smart move was placing the location on one of the most heavily traveled residential corridors in all of Seattle, and on the right-hand side, capturing commuters heading home from work downtown. But there are also seven decent to good grocery stores along this corridor (including Whole Foods which eventually added several parking spots for online pick up), most of them having ample parking for a quick stop to add a few items.

The idea to remove the hassle of going into the store and save a few minutes was compelling, but not enough to overcome the appeal of shoppers also having 40,000 items stocked and ready nearby, just in case.

Maybe the lesson here is the online pickup business model is best located at the store itself. Or place online pick up locations away from competitors, where the time it takes to get to grocery stores is truly a hassle.

Reacting to the Stew Leonard's video in which Stew Jr. visited the chicken farm that supplies his stores, one MNB reader wrote:

Love this! Maybe Stew has found a new genre in marketing retailers should consider: Real-vertising. No artifice. No script. No slick production. Out in the field with the farmer.

Years ago when Whole Foods’ ethos was more front and center in its retail behavior, they used to have a video series that did the exact same thing. They had a guy touring farms to tell stories about their commitment to organic practice and higher quality fresh products. Seems to me retailers might want to consider the consumer’s increasing demand honesty, truth and transparency. Stew nails it.

"Real-vertising." I love it!

We had a story last week about how, after Costco employees at one Virginia unit voted to unionize, outgoing CEO Craig Jelinek and incoming CEO Ron Vachris wrote a memo to all employees saying that they were “not disappointed in our employees; we’re disappointed in ourselves as managers and leaders … The fact that a majority of Norfolk employees felt that they wanted or needed a union constitutes a failure on our part."

I commented how unusual this was, and wrote, in part:

I've made this point consistently about unionization - companies can look at it as an attack on their authority values, or as an opportunity to figure out where the problems are and address them.  At Starbucks, Howard Schultz seem to take it all personally, which wasn't helpful at all.  And at Amazon, my argument has been that if it was as innovative in dealing with employees as it has been in so many other areas, it could redefine management-labor relations.

One MNB reader wrote:

For me the proof of the CEO’s intent will be if changes are made to improve worker’s pay, benefits, etc. from their level or if their response will be to place the burden of “fixing” things at the feet of store managers, asst. mangers, etc.

Too often I have heard wonderful words come from the mouths of those with the power to effect change (I worked for Kmart and Fast Eddie Lampert), but saw no substantial actions taken except to spread blame far and wide and place the responsibility for change on people who do not have the power to influence change in how the business operates (mostly middle management). It’s easy to say the right thing, to say that they’re taking responsibility- it is another thing altogether to actually make changes and take the associated risks that come along with change.

As a wise person once said, I think it was Dave Barry- “As long as there’s someone to blame, it’s not your fault!”

You're right.  The real proof will be in actions, not words.

We also took note of a Wall Street Journal report that Carrefour "which operates thousands of stores across more than 30 countries, said it would stop selling Pepsi, Doritos and other products in France, Italy, Spain and Belgium."

The company said it will post signage on store shelves explaining that the decision was made because of "unacceptable price increases."

I commented:

It is an article of faith here that retailers need to act as agents for the shopper, not sales representatives for manufacturers.  Not only that, they need to communicate that priority at every turn.

There are few things that retailers can do to reinforce this point than stop carrying products and saying that the reason is "unacceptable price increases."

I'll make two predictions here.

One is that PepsiCo will cave.

The second is that when PepsiCo's quarterly results come out next month, they'll exceed the company's forecasts - revenue will be higher, and profits will be even higher than that.  Raising the question whether the price increases are related to inflation, or greedflation.

I wonder if any other retailers will take a cue from the Carrefour actions and also move against "unacceptable price increases."  Not just against PepsiCo, but other companies that they may feel are taking advantage of the moment to feather their nests.

Could a global retailer/consumer uprising be on the horizon?

(Not to suggest that retailers never are guilty of "unacceptable price increases."  That also happens, and it violates the principle of being agents for the consumer.)

One MNB reader wrote:

I have a different view on this, and the role of a retailer in representing the voice of the shoppers they serve.  I believe retailers should provide their shoppers with choices in product assortment.  "Shoppers" will decide if a recent "price increase" is unacceptable, through their purchase decisions.  When a retailer pulls products off the shelf to strong-arm a manufacturer, they remove the shopper from the equation.  Personally, I don't need a retailer doing this, and will simply source the product from somewhere else.  Don't mess with my Cheetos please!

From another MNB reader:

I certainly don’t disagree with your basic point of consumer advocacy being an opportunity for retailers. However, when their profitability is hugely dependent on skimming manufacturers’ consumer oriented promotional spending, most fall painfully short of the opportunity. Moreover, anyone who has ever been involved in the “annual terms negotiation” with Carrefour can attest to the fact that their basic motivation is to extract more of those promotional dollars….a good percentage of which never reach the consumer. Unfortunately, they still prefer to make more money by buying than by selling.

And yet another:

Carrefour discontinuing Pepsi products is all part of the European annual negotiation ritual.

In many European countries, there are annual negotiations for all suppliers…….. “pay to stay”.

In the past, we learned of similar actions against Unilever and Kraft Heinz. Retailers pick one massive supplier, publicize the delisting (often non core sku’s) to scare all the other suppliers to submit to their demands for better trade conditions or else face delisting (like Pepsi). 

Don’t misread this as Carrefour taking the high road to attack inflation, or else they would have discontinued Coke which has similar pricing and much higher market shares. As always, large retailers are primarily focused on hitting their own profit targets just like their suppliers.

And finally, this reaction to my "business lessons from Shecky Greene" video:

A classic!  And even though I knew what was coming I still laughed like crazy. Thanks for the memory !!

Thanks. (Next up, Henny Youngman.)