Optimal Retail in Traffic Challenged Times – Part 1

This series of entries will deal with three overarching themes to ensure you maximize your business when the malls aren’t as busy as they used to be and when the consumer is tightening their spending habits due to economic uncertainty and lack of confidence.

This first theme is entitled “Strategy”. There are three areas of a retailer’s strategy that must be buttoned down in order to try and optimize one’s business in tougher times:

It is imperative that the leaders in the business over-communicate to the point of nausea. There is enough uncertainty out there that your employees don’t want to be left in the dark about anything to do with their company. Ensure that all levels receive weekly (if not daily) messages about company direction, overall company health, new products, marketing campaigns, human resource initiatives etc. Employees will be doubly nervous during this economic upheaval that they may become paranoid and start rumours if they hear very little about the company, its plans, direction and/or its performance from the company itself. An engaged and fully informed staff will be more productive and will be more focused on the task at hand – which is to maximize sales and “Convert Every Customer”.

At this time, it is imperative that any initiative, any forecast, any product launch, any company directive is planned down to the very last detail leaving nothing to chance. Inventory by store by department and classification should be planned down to every fixture by week. Every marketing campaign should be planned down to the penny and examined at every turn in terms of performance. No marketing initiative should be undertaken unless it can be measured very specifically against performance of driving traffic and sales generated in the stores. Global branding marketing (billboards etc.) that cannot be directly correlated to a boost in performance should be shelved.

The stores should have a certain ‘Snap, Crackle and Pop’ to borrow a phrase from Rice Krispies. Every store should focus on making the product and assortments sing. The stores should be vibrant and colourful. They should emanate an energy and vibe that is conducive to shopping and spending time. They should be humming with friendly and efficient staff (not over plentiful) who can multi-task and handle multiple customers at the same time. If your stores (and be objective here) do not hum or the product does not sing, then you should stop everything and make it so. That is the one strategy that should prevail above all other marketing and corporate initiatives.

These are challenging times for everyone. But everyone is in the same boat. There may not be as much money being spent out there this holiday season, but people do have to spend. The question is whether you have the core strategies to maximize what is out there and ensure you get more than your competition.

TheRetailTherapist

“Change or Fail”

These words cast an indelible impression on me as Don Fisher, Co-founder of Gap, Inc. sat on a solitary stool alone on a stage in front of over 3000 store managers and senior management from around the world in Las Vegas, Nevada in the late nineties. This was his mantra and he wanted to share it with everyone in the company. His deep baritone cast a spell on the audience as the white on black words appeared on three screens surrounding him on that stage.

He spoke about the humble beginnings of the Gap concept in San Francisco in 1969 and how he and Doris decided to go into the retail business after being in real estate for his entire career. Now, at 41, he decided to make his first big CHANGE.

His next big CHANGE came as he reached an inflection point in the Gap brand life cycle. He had built a terrific business based on being in stock in Levi’s jeans and he knew he needed to do something to drive his company further 16 years later. Being a real estate visionary and not necessarily a merchant, he decided what he needed was to hire himself a crackerjack merchant, and that he did. Mickey Drexler (now of J. Crew),  from Ann Taylor, was convinced to move from New York to San Francisco and become Don’s “partner” as they liked to call themselves. That was a brilliant move as Mickey effectively turned the company into what it is today, a multi-billion dollar, multi-national concern with four apparel brands (Gap, Old Navy, Banana Republic and Athleta), a burgeoning online business named Piperlime, and brand identities others crave to own.

There were many CHANGES in the business as Mickey helped steer the ship. Purchasing Banana Republic and re-positioning the brand. Conceiving of Old Navy and turning it into one of the largest specialty retail brands in the world. Pushing an online business which is the envy of the industry in performance and functionality. Occupying the best real estate in the country. Expanding internationally one step at a time in Europe and Asia and now licensing in several other countries.

Don was never afraid of CHANGE and as an entrepreneur, one can’t afford to be. He implored everyone in the company to embrace CHANGE and become a CHANGE agent, seeking it out before it is foisted upon us. He was our mentor, our father figure and our friend at the same time. I will never forget him calling me (when I was running Canada for Gap) several times to tell me how much he and Doris  appreciated my efforts on behalf of the company and that he was so proud of me. I will never forget him as long as I live and I will try to do him proud from this day forward.

Don Fisher passed away on Sunday, September 27th at his home in San Francisco, with his family by his side. His incredible legacy endures not only in the company he conceived and continually transformed, but in the San Francisco community, in the world of modern art and in his charitable work, specifically trying to revolutionize the educational system in the U.S. one step at a time. His story is one of humility, of fearlessness, of strength of convictions and of charity.

The true measure of his impact is that his message and his efforts have been and will continue to be felt by literally millions of people. What a life’s work. Rest in peace Don, you have earned it.

TheRetailTherapist

Optimal Retail Part 3

My last installment in this “pause” I am pursuing is regarding the need for productivity. Heaven knows that rents and those dreaded “extras” are making retailers small and large weep on a daily basis. The notion of improving productivity (and its cousin efficiency) must be woven into every initiative a retailer undertakes.

As an example, the easiest one to pinpoint is the largest store expense, (along with the label as its largest “bugaboo”) staff payroll. Almost always measured as a percent to sales, the old fashioned way of detecting an increase in productivity is having the percentage go in a downward direction (often what I call a “death spiral”). This does more damage to your brand and any increases in productivity from a sales perspective than anyone can tabulate.

It is an easy thing to do: Decree to “cut payroll”. The Brick and Sears are living examples right now of what happens to sales and profits when a short-sighted leader announces that it is necessary to cut back hours on the sales floor and that the stores must “hit a number without fail”. I wish it were that simple. The Brick has since come back from the brink of insolvency to add more hours and ensure that customers are looked after and sold some merchandise. What a revolutionary notion!

To be honest, if you operate stores, they are your faces to the consumer. This is what the consumer can touch and feel and see. Why mess it up with some arbitrary goal of payroll percent? If you want to talk productivity, then give each staff member a Sales Per Hour (SPH) dollar goal and track it. Once each sales person accomplishes these goals, you have more than paid for their services, added sales and made customers happy. You have therefore improved your brand position.

Or, you can track conversion, which is my favourite statistic. If you increase conversion (increase the number of purchasers from the actual number of people that wander into your store aka traffic), you are improving productivity. That is a goal worth pursuing in store.

Productivity of inventory is another form of generating cash flow and ensuring smart investments and returns. It is obvious that if the wrong merchandise is bought and is therefore not selling, that affects productivity (not to mention Gross Margin per Square Foot productivity as well after you have to take massive markdowns to clear the slow moving merchandise). But you could have the right merchandise, just not in the right quantities. Or you could have the right merchandise but not in the right places (ie what is selling well in Vancouver is not in Halifax and vice versa, therefore you are sitting with productive merchandise but in the wrong places). This makes the art of allocation, planning and distribution very important. Personally, they should be the smartest people in the room.

Productivity in the distribution centres is critical to ensure timely deliveries of fresh merchandise as well as replenishment of fast selling merchandise. But can your distribution centres turn on a dime, re-route, change their daily and weekly routines based on the trends and needs of the business? A flexible system, along with a very clever and sophisticated software package to analyze the business will yield higher productivities as well.

The final element I want to mention regarding productivity is based on the marketing dollar spent in a particular season or campaign. The question usually isn’t whether the campaign worked or was effective, but how does the campaign get measured? How can we tell whether it was effective or not? How do we pinpoint the exact cause of the dip or surge in sales? Those are questions that should be asked before designing and deciding on a particular marketing program.

In today’s retail reality, productivity is king. Every dollar must be squeezed out of every asset from people to real estate to size, colour and style of merchandise, not to mention vendor.

TheRetailTherapist

Optimal Retail Part 2

This second Optimal Retail installment focuses on what I am calling ‘Sophisticated Leadership’. The word “Leader” or “Leadership” is bandied about today throughout society at schools, regarding sports teams, in boardrooms and throughout the ranks at all levels of corporate life.

Is he/she exhibiting leadership tendencies?

Is he/she an effective leader?

What style of leadership is someone employing?

There certainly can never be too much of a good thing called ‘leadership’ but what I have found is that the more ingrained the leadership qualities are throughout an organization, the more consistent the performance. When a company exhibits a certain level of leadership, it does not need to be constantly and overtly spoken about or critiqued on a daily basis. There is a sense of maturity about an organization that permeates all levels and all facets of the business when there is a healthy dose of sophisticated leadership.

Some of the telltale signs that an organization is demonstrating sophisticated leadership skill sets are as follows:

• The company has a focused set of goals and objectives that have been cascaded effectively to all levels
• Every employee at every level can articulate the mission or vision of the company
• Meetings throughout the company are effective, efficient and always relevant
• Employees feel engaged (see Part 1) and are enjoying their jobs and find their work rewarding
• Store contact from head office is frequent, supportive and positive – the store is always the priority
• Store visits are frequent, effective, engaging and educational for all parties – they are never dreaded
• There is a “delegate and develop” mentality that permeates the organization
• Everyone throughout the organization cherishes learning
• All levels throughout the organization feel a high degree of accountability
• The culture is positive and persuasive not demanding and authoritarian

Peter Drucker used to say that the no. 1 job of leaders is to develop other leaders. This is true of any organization exhibiting ‘Sophisticated Leadership’. This does not mean that every person needs to possess a post graduate degree, much less a university degree. It certainly doesn’t mean that there is an intellectual air to the people running the company. Most of the time it actually is to the contrary, where messages, goals and job descriptions are kept very simple and user friendly and everyone understands their role. Southwest Airlines would be an excellent example of Sophisticated Leadership without any intellectual overtones, just a real Texas/southern drawl to CEO and founder Herb Kelleher and very simple, understandable and executable messages.

There is a way to test and assess how sophisticated a company’s leadership is. First you have to walk the halls, sit in a few meetings, visit stores and observe behaviours. But it can be a real eye-opener. There is no way to optimize a retail business without continually optimizing the level of sophisticated leadership of the organization.

TheRetailTherapist:)

Optimal Retail Part 1

I am going to take a different tack for the next little while. I hope you will indulge me. Even though I am trying to make a living on some of the advice I am about to impart, I figured the retail scene could use some help from any and all corners to get through this tough environment.

I have compiled two checklists (because in retail, we all love our checklists ) to assess whether a retailer is maximizing their business and, if not, to identify some areas that retailers can look at in order to help them achieve “Optimal Retail” status. The second list is a “Top Ten Non-Negotiables in Tough Traffic Times” list (with apologies to David Letterman). This list will give you my own take on what cannot be overlooked in these softer times in order to help retain “Optimal Retail” status.

We will start with a few excerpts over the few entries from my basic “Optimal Retail” checklist and follow up with a few excerpts from the “Top Ten” List. I will pick and choose a few in each list. For the full list, please do not hesitate to hire me …

One common trait of any great organization, regardless of industry is an elevated amount of “Employee Engagement”. The more the employees of the organization at EVERY level understand the business philosophy, buy in to the direction and culture of the product and the brand and the more they are encouraged to participate in the communication processes set up for them, the healthier the organization usually is.

This is the first thing I look for when I assess an organization. How committed are the employees? What is the turnover like and at what levels? Do the front line employees understand the “mission” of the company? Why do the front line employees want to work for that company?

Some of the little engagement keys to look for are:

• Types and frequency of communication vehicles
• Do all employees have access to the information they need?
• Do employees feel they can make a difference in the company and that they have a voice?
• What is the ratio of HR professionals to the total employee base?
• Is there an annual employee survey?
• What is the compensation philosophy of the company ie. is there profit sharing or options available for ALL levels?
• What does the performance review process look like and more importantly, what do the employees think of the process?

The old adage of  “keeping morale high amongst the troops” doesn’t necessarily cover all the bases any longer. Employees need to be constantly stimulated and engaged in the inner workings, creative development and decision making of any company. If they feel like they have the ability to provide input and that their feedback is being heard and acted upon, their productivity will soar and the newest, freshest ideas will be unleashed to provide the company with a great competitive advantage.

Peter Drucker always used to say that companies should treat their employees as if they were volunteers. This simply means making them feel appreciated, making them feel special, expecting a lot but understanding that they are more prone to walk out on you today than ever before. A very well respected employee base is a productive one for sure.

I will leave you with one further thought…I remember when I ran a division for a big global retailer and I made sure I read every exit interview in the division. One comment resonates with me to this day: “My work was appreciated but I wasn’t”.  Those 7 words have stayed with me for over a decade and they inspire me improve every day in the area of employee engagement.

TheRetailTherapist:)

Brand Stories

With the opening of the 40,000 square foot Hollister “Flagship” store by the Abercrombie and Fitch group in the last week or so, it gave me pause to think of the relevance of investing in this type of brand experience.

Of course, Ralph Lauren pioneered this type of branding effort by deciding to create its own environment in order to increase brand presence, showcase exactly the way the Ralph Lauren brand should be merchandised to the public and increase awareness for their labels which were (and still are) carried by almost every department store in the country. I remember the hew and cry emanating from their wholesale accounts that these stores would cannibalize sales and that it would ruin the relationship. The end result was that business everywhere increased substantially as people became more familiar and comfortable with the Ralph Lauren name and brand and this led to every other designer opening their own stores to show off their true brand essence.

Nike was also at the forefront in opening their own homage to the swoosh and the sporting icons they had under contract and called it “NikeTown”. They opened usually in the highest profile areas in major metropolitan centres and created a buzz when athletes showed up for autographing sessions or product launches.

But what is the real purpose of these “Brand Stores” (usually built several stories high and at huge expense to the company)? What should the real purpose be?

As retailers know, most of the time, these stores cost almost twice as much to build per square foot (not to mention the footprint usually being at least five times larger than the average store – in Hollister’s case around 8 times), the rent is usually exorbitant as it is usually located smack in the middle of the highest profile metropolitan shopping hub and the operations of a store like this one is not only different than the company is used to, but takes that much more effort, staffing, security and inventory than any other store in the chain by a wide margin.

So, why bother? What, exactly, is the point?

Most wholesale brands do not have the retail capacity or mentality to operate stores profitably or properly, nor do they want or need to. To them, it is a sidelight purely for increasing their brand profile. Ralph Lauren is the exception, since he has been able to hire and develop a retail division and create a business model that works. But he has been an exception to the norm in many ways (his outlet, off-price channel is actually his most profitable channel in the entire company, but that’s a different story for a different day). I don’t believe NikeTowns have made money since day one. But I am not sure that really matters.

To my mind, opening a flagship, brand-illuminating store should be all about marketing and public relations. The store should be run independently of either a standard retail chain or a wholesale division with the goal of breaking even. Even if it does lose some money on an annual basis, it should be part of the marketing department’s budget as opposed to hanging the retail operations team with that burden. This way, everyone wins.

There is no better vehicle for showcasing exactly what your brand is about (be it retail or wholesale) than an actual store where your marketing department, your visual merchandising department, your buying teams and even your human resources department can create the ultimate brand expression. The downside is time and energy for sure, but if both those are compartmentalized and the emphasis on maximizing profits on these locations is not the driving force, these flagship stores like the 40,000 square foot Hollister “Soho Grande” can be successful at helping build brand loyalty and customer share of mind.

TheRetailTherapist:)

Postscript: I forgot to mention Apple stores for their brilliance and their ability to increase their market share almost instantaneously and creating awareness and the ultimate brand image for themselves. They are extremely profitable which flies against my theories above. They are a unique case though but worth mentioning. TRT:)

Forever 21 – The Death of Retail?

There is no question, especially in these harsh economic times, stores such as Forever 21 are pretty popular. The formula is simple: Knock off the hottest and latest fashion trends, move the merchandise into the stores within weeks, jam the stores full of every category a woman could want, create an “environment” that is fairly innocuous, schedule minimum staff to at least clear the fitting rooms, play the music loud and watch the cash roll in.

Sound familiar?

There are many examples of this kind of retail formula all across North America, which is basically a take on the European model of Zara and H & M, but from the looks of it, severely “dumbed down”.

I, for one, can’t stand it. I do, however, envy their margins. While these types of concepts draw the crowds (usually young, ethnically diverse and fashion conscious) what is it really saying about the state of retail merchandising as we have come to know it?

Instead of high concept, we get red and yellow signage shouting at us about the 50-70% off promotions. Instead of friendly and knowledgeable sales help, we get no sales help, clothes strewn all over the floor and toxic attitudes. Instead of unique store design and some branding elements, we get plain vanilla stores juiced up by a chandelier or two, loud music and chrome 4-ways.

Peter Glen would not be impressed. Neither am I. But the customer is king, and they seem to be voting with their pocketbooks as Forever 21 and others like it keep opening stores at an alarmingly fast rate. Some of these players keep gobbling up more and more chains, who, in their previous incarnation, were unique and branded on their own. Now, each banner carries similar (if not the same) merchandise and carries out the same strategy. The stores all start to look the same – the only real difference is the name above the door.

This is depressing and infuriating. Being a merchant, I have always aspired to creativity, concept and branding to ensure the customer doesn’t stray even in tough times. Obviously, the keepers of brands such as Abercrombie & Fitch, Gap, Old Navy and even Eddie Bauer have done a poor job of keeping their customers happy and streaming back.

I think the difference may be that brands and their stores need to reflect exactly what their customers are going through and empathize with all the stages of their customers’ lives and they have not done a good enough job in this regard. If that means that Abercrombie, for instance, has to pare back a bit on their bells and whistles they engineer into their cargo shorts and come up with plainer ones so that their prices can be adjusted to fit their customers’ state of minds, then they should do that. A brand has to understand its customer and their moods more intricately than ever probably forever now. The brand must become a reflection of their customer. Once it does, the brand will never lose their customer like so many have.

Retail branding is an exercise in life cycles like everything else. Having a “concept” does not absolve you from sticking your head in the sand when real life hits. The customer is too smart and too fussy these days. She will realize when you are being too stubborn and when you are being accommodating and understanding of her needs as they change with the cycles of her life.

Forever 21 and their ilk are not the answer. At least I hope not.

TheRetailTherapist:)

All Talked Out “Ain’t Satisfactioning Me”

I am tired of all the talk and am exhausted from doing the talking myself. Retail is tough these days, everyone knows it. There is a shift in the customer’s shopping behaviour and perceptions to be sure. But let’s not keep beating a dead horse.

It may not be business as usual but it still is business. People are shopping – it’s a natural and necessary phenomenon and usually a huge part of a woman’s means of entertainment (this is not a sexist comment rather a sad commentary on the 21st century male who still is averse to shopping for anything other than a big screen TV from Best Buy, a winch from Home Depot or fishing lures from Bass Pro Shops and they would do it all online if they could to avoid browsing the stores themselves).

But we have been talking about the economy for over 8 months now. It is time to act as retailers:

1) I am tired of talking about Gap’s recovery and how much cash they have: Do something bold and creative and re-invent that company! Tinkering with the Old Navy format is nice and may drive some comps (although they have probably lost a total of 50% of their volume from their peak by now so 5-10 comps aren’t bold enough to my mind). With $1.7 billion in cash, they could acquire or create something to revolutionize the retail industry. Continuing to talk about how well they have managed their expenses and cash does not cut it with the consumer. Gap brand has been an issue for over 5 years now. Old Navy seems irrelevant in the market right now with H and M and Uniqlo set to continue to eat their lunch. Banana Republic is the most surprising disappointment to me. It occupied a unique niche in the market and in these times, the brand should be excelling at playing up their position as the fashion alternative to expensive designer offerings and the anti-Neiman Marcus, if you will.

2) I am tired of talking about the woes of the Canadian department store business and what the future holds for these large consolidated national players. The Canadian department store business has shrunk considerably in the past 5-10 years. With new ownership (yet again) at The Bay / Zellers parent company, it is time for bold action. I don’t think going “upscale” to compete with Holt Renfrew at this time is the reinvention The Bay needs. It needs creative thinking about what each floor in their portfolio represents, who each floor targets and how to create excitement, energy and impulse buying. The Bay can become anything it wants as the name is that strong. An upscale fashion resource may not be the right overall message to reinvent the brand.

As for Zellers, it has been an enigma for so many years. Rumour after rumour about Target and others looking and passing on purchasing the company because of the onerous real estate issues regarding size and numbers of non-performing locations have all created a stasis in the business. Who does Zellers appeal to? How can it knock the socks off that customer and compete against Wal Mart at the same time? I would like to see some bold action taken and for Zellers to come out and stand for something other than “The Lowest Price is the Law” and “Everyday Value”. Apparel offerings may be a place to successfully compete with Wal Mart as they cannot seem to get that right. Everyone knows about the Zellers value proposition, thecustomer can get value in many places right now. What other type of “value” are you going to offer your customers aside from price?

3) I am tired of talking about expense cuts and layoffs and “belt tightening” and having Wall Street applaud companies for that. Firstly, in every business cycle, these are natural occurrences. Maybe the company was too fat to begin with. Anyway, my point is that there is never enough credit given to or talk about creativity and unique merchandising in the industry. I realize the current economic conditions but that is when, I believe, fresh merchandise that emanates value to the customer from the standpoint of being style right, colourful and that makes people stop and say “Im Lovin’ It” and entices others to ask them “Where Did You Get That?” People want to feel good about themselves, especially in these tougher times and those retailers that can constantly figure out what merchandise and/or experience helps them achieve that goal, will thrive. Look at Tesco or Buckle or Aeropostale or Family Dollar. They have adjusted to the times or have gained market share by standing out in terms of value, experience and offering.

It’s time to stop talking and start taking action to lure more customers back to your stores. To quote Elvis Presley:

A little less conversation, a little more action please
All this aggravation ain’t satisfactioning me
A little more bite and a little less bark
A little less fight and a little more spark

That’s the recipe for sustained retail excellence and performance no matter what the climate!

TheRetailTherapist

Anticipation

In this day and age, I am constantly reminded of Carly Simon’s iconic song “Anticipation” which actually became famous mostly because of a Heinz ketchup ad in the late 70’s. Carly wrote it while waiting for Yussuf Islam (formerly known as Cat Stevens) to pick her up on a first date.

Not only has the anticipation built for a new blog entry (;)), but in the retail industry today, everyone is anticipating a recovery in consumer spending shortly. Whether or not that happens sooner or later several questions will be answered over the course of the next 12 months regardless:

1) Will Abercrombie and Fitch come down off their high horse and figure out how to lure consumers back into any of their stores? Yes, I was a proponent of their staying the course without markdowns, but I, like most everyone else, never realized the depths that this recession would reach. It is too bad they didn’t think of knocking themselves off (like Gap did with Old Navy in a manner of speaking), because those that did (read Aeropostale and American Eagle Outfitters) have become quite successful and created billions of dollars in market capitalization on their own.

2) When will Gap start increasing same store sales? I am still a fan of their once iconic brands (that includes Gap, Gapkids, babygap, Gap Body, Banana Republic, Old Navy), but I know they are working hard at tweaking assortments and re-designing stores (again). Will it be enough to lure consumers back or have they already been fragmented out?

3) Can Buckle continue its amazing streak? They have yet to fall victim to any recessionary trends and their approach remains the same as it was when they had 5 stores (they now have close to 400). What will they do to continue to comp in the double digits?

4) What will really happen to the high end retailers? Will consumers learn to be happy with less in terms of material things including apparel and accessories?  I know consumers will always shop but will their shopping habits be forever altered and shift to better “value” and more economical merchandise? Will the Neiman Marcuses of the world have to close some stores and pare back their reach because of this new reality? Or, will the consumer treat this as a hiccup and go back to the way they were, purchasing high end merchandise with abandon? I gather it will depend on how long the recession lasts and how quickly the equities and housing markets recover.

5) And, finally, what will the mall landlords do? Will they load up their centres with service oriented merchants to fill the gaping holes in their malls or will they leave some of the spaces empty until they can get the rents they need to command? (just like Taubman Centers has always done – by choice mind you) Or will the mall landlords and retailers truly become partners and share the upside in any recovery and work together to forge a “New Deal”?

So, those are some of the reasons why that song keeps resonating in my head as I think about what the immediate future holds for specialty retail and the industry in general…

“And tomorrow we might not be together
I’m no prophet, I don’t know natures way
So I’ll try to see into your eyes right now
And stay right here, ’cause these are the good old days”

I am fine with the waiting, I just hope when the answers come, the red ketchup doesn’t spill all over the place…

TheRetailTherapist

Where’s the Beef?

I used to love that commercial. Wendy’s (!) made fun of McDonald’s and the entire world started using that phrase to single out thin arguments, lack of facts or just plain superficiality.

But, we use it here to describe what has ailed Loblaw’s (or is it Loblaw? – more on that in a minute). In a failed attempt to counter the Wal Mart effect in Canada, Loblaw’s (the largest grocer in the country with multiple banners) started a massive effort to sell everything but the kitchen sink (but lots of accessories to use in the sink itself). The company tried to restructure its entire supply chain itself to handle the gidgets, gadgets and apparel that they never used to handle. Alas, even before this economic downturn, they went into a tailspin and it cost their bright CEO his job.

But what about the beef? In the interim, the worst thing that happened is that they forgot they were a food retailer, and they used to be an exceptional one at that. Their trail blazing private label brand “President’s Choice” had ME reading their Insider’s Report for goodness sake to see what creative food items they had come up with on a monthly basis. This franchise was gaining traction internationally where they sold the brand into major supermarkets in the U.S. and abroad. But they took their eye off the ball and let the 500-pound gorilla in the room dictate their strategic thinking. Not to say it isn’t difficult, but when you have a huge advantage in a staple like food and you have the largest market share of any competitor, my advice is to get better at what you do and in that way you will keep that gorilla at bay.

It didn’t work out that way. It became an obsession. Not only did it distract the entire company but as a result, their core business suffered. Time and again the shelves weren’t fully stocked, our family’s favourite cheese was constantly out of stock and lean ground beef was nowhere to be found. It has been better lately although they have a new merchandising strategy for some locations as they call them “Loblaw” and they do not carry such common items as a mop or a duster like all supermarkets carry. The Loblaw without the apostrophe ’s’ denotes food only. Who thinks of these ludicrous things?

Anyway, they are trying now to pump up their private label brands once again. In addition to “President’s Choice”, they are pushing their “Blue Menu” healthier brand, their “PC Green” environmentally friendly brand and their “No Name” value brand. They have also struck some gold with their “Joe Fresh” apparel brand thanks to Joe Mimram. That is something at least Wal Mart cannot get right (and should have) -inexpensive fashionable apparel. It is just not in Wal Mart’s bones.

I am hopeful that Loblaw’s (or whatever they want to call themselves) will ultimately prevail. I have to say that Metro is looking better and better and giving them a run for their food dollar. Hopefully Loblaw’s has learned their lesson not to look in their rearview mirror so much and keep their eyes firmly fixed on their own road ahead which was already smoothly paved for them long ago.

TheRetailTherapist