business news in context, analysis with attitude

We've had a couple of stories recently about community-owned supermarkets, prompting MNB reader Larry Elias to write:

A city-owned grocery store makes sense in some instances. I've worked with several small town grocers, many of them in Kansas, and some of those were city-owned. But the key to success has little to do with the ownership structure.

I've often found that small towns (and big cities like Chicago) are looking for a "silver bullet'' that simply doesn't exist. A former Chicago city council member is quoted in this article saying that running a grocery store "isn't rocket science." True. In fact you could say that much of it is mundane. But being successful at it (and many other endeavors) requires "mastering the mundane."

Grocery stores operate in a high volume, low margin world, so whatever happens, good or bad, is magnified. Unless Chicago is willing to subsidize a supermarket operation, making that cost part of the city budget expense, they need to focus on what it takes to attract a retailer to take the risk to open one. In the case of small towns that want their own store, it's not just about citizens being loyal, it's about the retailer being competent. A very wise man who taught me a lot about the business once said that customers were fickle-- "I like you--but I like me better." The reality is you need to earn their business every day.

I would suggest that while the vast majority of grocers wouldn't be good at rocket science, the vast majority of rocket scientists would make lousy grocers.

Regarding the possibility that Chicago could invest in city-owned supermarkets, one MNB reader wrote:

This seems to be doomed for several reasons: 1) “The Chicago Way”, several key managers will likely be highly nephews, brothers-in-law, nieces , godsons, etc., of the local alderperson or a mayoral favorite that will be highly compensated regardless of performance; 2) unless the shoplifters are arrested and prosecuted the store is likely to be more shoplifted because it is operated by the City and even less connected to the community; 3) in order to employ teens the mayor promised will be totally untrained, and based on the CPS test scores will probably lack competence to learn the basics of working in a grocery store;  4) the store will likely have to provide transportation vouchers so that the employees can get to and from work as this the latest citywide mandate on employers; and 5) finally, the labor unions supporting the mayor will demand that the likely inexperienced employees be paid the $25 hour living wage.

Maybe if a police sub-station is co-located within the store it might reduce the shoplifting and swarming within the store.

It might be possible that the operating losses of several hundred thousand dollars per year is cheaper that some other program.  But it hard to see how this is going to work, financially; but maybe some will gain some experience to move up, which might make it a beneficial program.

All legitimate concerns.  I'd address the first one by hiring a seasoned, tough food retail executive and letting him/her do the job without the kind of interference you describe.  

I got a lot of email yesterday about my "Bathroom Break" video, almost all of which made the following point:

Did you also observe that the door swing opened into the bathroom so you would need to touch and pull the handle to exit?  They should add an automatic door opener or have push to exit.


And finally, regarding my recommendation that the folks who produce the Oscars should hire Taylor Swift to host the show, which would instantly make them relevant and produce enormous ratings, MNB reader Tim Wendel wrote:

Interesting thought on having her host the Oscars, but it will not happen.  The movie industry was shut out from the distribution rights and the studios are not getting their cut of box office.  They would view this as a onetime event that they could not market, capitalize or make a buck off her.  Too male old school dominated industry.

You may be right, but that would be the kind of short-term thinking that dooms businesses.  "The Eras Tour" won't be the last movie Taylor Swift makes;  I believe she's indicated an interest in directing.  If I'm a studio executive, I use the opportunity to prove that I'm open to disruption and that I want to be in business with her.

Petty grievance is a lousy attitude to bring to work.