Tag Archives: supermarket management

Necessity & Innovation

Nearly everyone we ask says that they want to be innovative — the best returns come to those who are first to market with a new product; those who innovate new and better processes can provide much better quality at much lower costs; those who can create a management system or culture that constantly is clicking on all cylinders can have a powerful advantage.

But how often do they happen, and why?

In our experience and research, we find that innovation is truly enigmatic:

  • Large organizations have more wherewithal to invest in systematic innovation, but smaller organizations seem more capable of capitalizing on innovative ideas.
  • Most innovations come not from visionaries at the top but from people closest to the work. Yet paradoxically, strong leadership and vision at the top of the organization are required to create an environment that fosters innovation and risk taking. Without strong leadership, organizations become bureaucratic and risk-averse.
  • Outsiders often have the most innovative ideas, but insiders’ know-how and buy-in are required to get them implemented.
  • And possibly most relevant during the current pandemic, adversity or “necessity” often brings about innovative solutions.

A recent SupermarketNews article notes that current world challenges have been exceptionally tough for supermarkets, and that the associated difficulties have brought about significant and innovative improvements in how stores are being run… now and possibly in the future!

“The first hint of the virus reaching our communities ignited the shock of an overwhelmed supply chain,” said Randy Evins, Senior Principal and Industry Advisor.

“A couple of weeks later, the consumer experience was further diversified with online pickup services, home delivery and special hours reserved for vulnerable shoppers. Some local grocers have also installed plexiglass protectors around their checkout stations and added floor markers to help ensure shoppers are standing six feet apart while waiting in line.

“There’s unquestionably a lot of ingenuity happening in supermarkets right now. But there is one area of the business that still requires attention — especially if grocers want to continue surviving this constantly evolving time as well as the eventual rebound to come.”

The article goes on to stress the importance of leveraging digital technology to ensure that all variables are considered in “real time” when making inventory management and ordering decisions.

“Digital strategies must go even deeper to cover the entire value chain — addressing the need for connected processes, real-time transactional data and immediate visibility into store-level inventory,” Evins said.

“Supermarkets can no longer afford to order new products and additional inventory blindly. They need to know what is available on their store shelves, store backrooms and distribution centers — by SKU and quantity and in light of forecasted demand.”

In support of this perspective, the article cites predictive data indicating that 25% to 30% of a grocer’s sales volume will consist of digital orders by 2025, compared to 6% to 10% today.

Evins went on to say that the use of technology, as described, will enable store employees to “have the visibility and insight they need to work more efficiently, safely and productively while keeping consumers happy and coming back over and over again.”

Certainly, given today’s circumstances, necessity has truly been the “mother of invention.”

Read related newsletter…

Martin’s Supermarkets Adopts New Food Safety Compliance Solution

A recent EIN News article reported that Martin’s Supermarkets has started using Park City Group’s ReposiTrak® compliance management solution to manage regulatory and business documentation compliance within their supply chain.

“Martin’s Super Markets is the latest retailer to recognize the advantages of using ReposiTrak to reduce brand, regulatory and financial risk in their supply chain,” said Randall K. Fields, Chairman and CEO of Park City Group. “Their commitment to food safety and transparency for their customers makes us proud to have them utilize our system.”

Family-owned and managed since 1947, Martin’s operates 22 full-service supermarkets in Indiana and Michigan.

Stores of the Future?

Along the lines of customer-centric or consumer-led decision-making, some interesting perspectives were shared by supermarket leaders at a forum orchestrated by Portland State University’s Center for Retail Leadership.

Among other things, some expectations regarding the future of grocery retailing were shared during the May 12th event, which included:

  • Stores will be smaller
  • Stores will look more like lounges or cafes
  • Signs and price tags will be digital
  • Shoppers will have more pick-up and delivery options

Read full article… | Comment…

Grocery Retailers Among the Most Trusted Companies!

A recent article posted on LinkedIn Pulse referenced a report by The Temkin Group that listed grocery retailers as being among the most trusted companies in the country!  The report was based on data from an online survey conducted in January 2015 of 10,000 US consumers.

Wow – nice going, guys!

The article’s main theme, however, focused on the concept of customer-driven pricing, which seems like an impossible objective… after all, one might think that, if given the choice of setting a price, customers would tend to suggest zero dollars.

But the article addresses this issue, and also goes on to more specifically define the concept of customer-driven pricing. Author Graeme McVie also suggests that “…customers are sufficiently knowledgeable about the way the commercial world operates to realize that retailers need to make a profit to stay in business, and, as such, the retailer needs to charge them something rather than nothing.”

While the piece went on to present several ideas on pricing models and to pose a number of additional questions, there were no clear conclusions drawn about the best or most effective pricing strategies for supermarkets.

However, McVie stated that these questions would be addressed in upcoming articles and discussions on LinkedIn within the “Grocery Executive Network” group.

Maybe you’d like to join the group to see what comes up next?

 

No Absolutes in the DeMoulas Saga

Good guys? Bad guys? Winners? Losers?

Are there any in the Market Basket family squabble?

No matter how it turns out, the stories behind this family drama show that Arthur T is not all good (as has been portrayed by many) and Arthur S is not all bad (similarly portrayed by many).

Their fight goes deep. Based on court documents, Arthur T’s father defrauded Arthur S’s side of the family. Back in the 1990’s, a judge ruled in favor of Arthur S’s family and awarded them $500MM and control of 50.5% of the business, which set in motion (albeit more than a decade later) some of today’s issues.

Arthur T has been great at building the Market Basket business. He has treated the employees well and built a culture of performance. At the same time, he made some unilateral decisions for which board approval would generally be required, if not expected. He only notified the board “after the fact.” There is some evidence that as president of the chain, Arthur T may have engaged in some real estate business relationships that enriched his side of the family, perhaps at the expense of the chain.

Either way, the rank and file employees are still out of work; customers are forced to shop at other stores and the family fight goes on…

Comment…

DeMoulas Supermarket Update

Here’s an update on the Market Basket story from last week. The employees continue to rally outside the supermarkets. Since last week’s posting, Arthur T. Demoulas has offered to buy the 50.5% of the business that he doesn’t own. The Board of Directors met last Friday, saying that they would evaluate his offer and “all other offers received previously or since.”

The employees are fighting for their CEO and the Market Basket culture. Market Basket employees have long felt that they are part of a family and they have received good wages and have had a generous retirement plan. As we said last week, we don’t know how this will end.

Perhaps the new management believes that within the next week or so, the employees will tire of the rallies and decide that in order to support their families, they need to go back to work. But what about the Market Basket culture? Have the actions over the last two or three weeks irretrievably broken it?

For those who can’t imagine how the stores look, here are two pictures taken at one of the Nashua, NH Market Basket stores on Saturday, July 26, 2014.

market1 market2

Comment…

How Will the DeMoulas Saga End?

As many readers may know, the DeMoulas family, that owns and operates the Tewksbury, MA based Market Basket stores, has spent the last several decades fighting amongst themselves for control of the business.

Last month, Arthur S. DeMoulas took control of the board and summarily dismissed CEO and President, Arthur T. DeMoulas, his first cousin. Since then, many employees and customers have expressed concern about the future of the business via petitions, rallies (with hundreds and thousands of employees), and Facebook pages.

People want Arthur T. back in the business. Employees appreciated the family feel of the business and generous retirement plan. Customers appreciated the friendly service and the low prices. Sick-ins have had a major effect on deliveries to the stores. In many Market Basket stores, produce aisles are virtually empty. The new co-CEO’s have begun terminating leaders of the ‘Bring Back Arthur T’ movement.

How this will end? Arthur T. used to tell everyone that Market Basket was in the people business first, and the supermarket business second. Market Basket employees are now risking their livelihood, showing allegiance to Arthur T.

How will the Board of Directors and Arthur S. respond?

The DeMoulas Saga Continues

The DeMoulas family (Market Basket Supermarkets) saga continues on… sadly.

Last week, the dysfunction between the two scions of the DeMoulas family, Arthur S. DeMoulas and Arthur T. DeMoulas, once again was played out publicly as Arthur S. DeMoulas had the board votes to remove the CEO, his cousin, Arthur T. DeMoulas.  Two other senior executives were removed at the same time.  Others have since resigned.

“Arthur T.” is beloved by the employees of Market Basket and there is concern as to how the employees and customers will react to his removal.  The customer service offered at Market Basket stores has been recognized as being among the best in the northeast.  Employees felt well taken care of with generous retirement plans and a workplace with a ‘family feel’.  Now, we wonder what the morale is like.

Beginning earlier this year and as noted in an earlier post, readers may recall that Market Basket offered a 4% discount on almost all products that was to be carried until the middle of December.  Arthur T. was quoted at the time that the customers needed the money more than he did.

Now, we are left to wonder what the next story line will be.  With the family history of the last 40 years, the next chapter will probably be in the public for all to see.  What effect, if any, do you think the change will have on employee service and customers?