It was announced yesterday that Whole Foods has entered into an agreement to buy their largest like minded competitor Wild Oats, for $545,000,000.
This will be interesting to watch. One thing that Whole Foods has shown is that they know how to assimilate acquisitions and make them better. A feat SafeWay, AHOLD, and Albertsons, never figured out. I don't know why this is, perhaps it is because culturally, natural food stores are similar in their retailing view, regardless of where they are located.
In most acquisitions, the driving force that defines the culture of a company is lost in the company that is acquired. Acquisitions of this sort usually result in new policies, new procedures, new demands, and synergies galore that are touted to cut costs and make the new organization leaner and meaner. Usually that means cutting labor, raising prices, and then forming task forces of all types to try and figure out what the heck happened to the business.
Just my opinion, but Whole Foods operates among the best merchandised food stores around with a consistently high level of execution. I don't see them trying to operated a service oriented store on a 9% wage or mandate that their produce department manage a super high rise wall rack, and hand stack the entire department on a $180.00 SPLH. These people seem to get it. They know that they must invest in the people and the process. For this reason, I believe that Whole Foods will make this acquisition a success.
I have to believe that any MERCHANT that has ever worked in a retail environment believes in their very core that when given the resources, a store can increase sales and margin. Combine those resources with a superior go to market strategy and you have the recipe for success. In essence you have Whole Foods.
Friday, February 23, 2007
Friday, February 16, 2007
Is Publix Really all That Good?
I subscribe to a daily newsletter where there has been a lot of discussion about Publix and if they are really as good as their reputation.
Yes, they are. In many different ways. In my former life as a Produce VP competing with Publix I learned to respect them not only for their consistent high level of execution, but for the culture they have created in what must be a pretty good place to work.
I can recall a certain individual that worked as a clerk in one of our produce departments. In my book his work ethic was not worth the paper his weekly check was printed on. He was slow, sloppy, and completely without an ounce of initiative. When I heard that he had quit and went to work for Publix, I think I laughed out loud.
Not too much later, I ran into this individual while making a competition check at Publix. He seemed like his old self, I did not see him lasting too long.
Well, about two months later I was checking out a Publix grand opening and there he was, in a crisp white shirt, walking around talking to customers, directing clerks, working with a sense of urgency, and taking initiative. He came up to me and told me how he was working to become a produce manager and that he was in line to do so in a short period of time. He was truly excited about working at Publix; excited about his future.
Now I don't know if this says more about the poor culture at my former company, or a great culture at Publix, but changes like this just don't come out of nowhere.
I for one admire what Publix does. They know who they are in the marketplace and they create a culture where their employees truly like working there. At least that is the way it looks from the outside looking in.
Yes, they are. In many different ways. In my former life as a Produce VP competing with Publix I learned to respect them not only for their consistent high level of execution, but for the culture they have created in what must be a pretty good place to work.
I can recall a certain individual that worked as a clerk in one of our produce departments. In my book his work ethic was not worth the paper his weekly check was printed on. He was slow, sloppy, and completely without an ounce of initiative. When I heard that he had quit and went to work for Publix, I think I laughed out loud.
Not too much later, I ran into this individual while making a competition check at Publix. He seemed like his old self, I did not see him lasting too long.
Well, about two months later I was checking out a Publix grand opening and there he was, in a crisp white shirt, walking around talking to customers, directing clerks, working with a sense of urgency, and taking initiative. He came up to me and told me how he was working to become a produce manager and that he was in line to do so in a short period of time. He was truly excited about working at Publix; excited about his future.
Now I don't know if this says more about the poor culture at my former company, or a great culture at Publix, but changes like this just don't come out of nowhere.
I for one admire what Publix does. They know who they are in the marketplace and they create a culture where their employees truly like working there. At least that is the way it looks from the outside looking in.
Friday, February 9, 2007
Cut fruit in vending machines?
According to a January 31 story in the Packer On line www.thepacker.com
Dole Food Company is planning to launch a test program in five cities where school students will have access to vending machines stocked with cut fruit and salads. A program that could expand to other cities later this year.
I for one am all for kids having the opportunity to eat more nutritious food while at school; especially food from vending machines. However, and this is a big however, just who is going to make sure that this cut fruit is safe to eat. I am sure that Dole has plans in place to assure that this product is handled appropriately and that the cold chain is maintained, but produce is produce and the expiration date on a bowl of cut fruit does not mean by any stretch of the imagination that it is fit to eat a day before the expiration date even if held at 33 degrees for every minute after it was cut.
Look, I've been a retailer for over thirty years and the hardest product to maintain freshness on at store level is cut fruit. How many of you retailers out there routinely visit stores and pull cut fruit that is "in date" because the melons are translucent, or the cup is too watery. Just who is going to maintain the integrity of this product once it is in a vending machine? The guy that stocks the coke? Just my gut but Dole and their partners really need to be careful with this venture.
Dole Food Company is planning to launch a test program in five cities where school students will have access to vending machines stocked with cut fruit and salads. A program that could expand to other cities later this year.
I for one am all for kids having the opportunity to eat more nutritious food while at school; especially food from vending machines. However, and this is a big however, just who is going to make sure that this cut fruit is safe to eat. I am sure that Dole has plans in place to assure that this product is handled appropriately and that the cold chain is maintained, but produce is produce and the expiration date on a bowl of cut fruit does not mean by any stretch of the imagination that it is fit to eat a day before the expiration date even if held at 33 degrees for every minute after it was cut.
Look, I've been a retailer for over thirty years and the hardest product to maintain freshness on at store level is cut fruit. How many of you retailers out there routinely visit stores and pull cut fruit that is "in date" because the melons are translucent, or the cup is too watery. Just who is going to maintain the integrity of this product once it is in a vending machine? The guy that stocks the coke? Just my gut but Dole and their partners really need to be careful with this venture.
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