Jadeyzma and Jenifer both shared this story from the Chicago Tribune: JC Penney CEO Ron Johnson is OUT today, and has been replaced by… his predecessor.
J.C. Penney Chief Executive Ron Johnson, who tried to replace sales and coupons with everyday low prices, is out after sales plunged 25 percent last year, and the department store chain said it will replace him with his predecessor Mike Ullman.
Shares in J.C. Penney rose nearly 11 percent after the initial CNBC report that Johnson was out, then fell 6 percent after the company said Ullman was back.
And here’s another report from the New York Times:
Still, it is a curious move to go back to Mr. Ullman. Most of the senior employees that he had assembled at Penney either left or were dismissed by Mr. Johnson. And it was dissatisfaction with where Mr. Ullman was taking the company that led Mr. Ackman to look for another leader in the first place. Though profitable, Penney was seen as a mediocre retailer that was losing ground to competitors like Macy’s and Kohl’s.
Now, it is unprofitable, still losing ground to Macy’s and Kohl’s, and in the midst of a very expensive turnaround, the future of which is uncertain. Though some of Mr. Johnson’s plans can no doubt be jettisoned, his new merchandise is arriving in stores, the stores are undergoing extensive renovations, and Penney has already revised pricing several times. The company is also fighting Macy’s in court over Penney’s attempt to sell Martha Stewart home goods in its stores.
What do you think — are they going to be able to turn it around with Johnson now gone?
I thought this was an interesting article yesterday over on the Bloomberg site: Customers Flee Walmart Empty Shelves for Target, Costco.
It’s not as though the merchandise isn’t there. It’s piling up in aisles and in the back of stores because Wal-Mart doesn’t have enough bodies to restock the shelves, according to interviews with store workers. In the past five years, the world’s largest retailer added 455 U.S. Wal-Mart stores, a 13 percent increase, according to filings and the company’s website. In the same period, its total U.S. workforce, which includes Sam’s Club employees, dropped by about 20,000, or 1.4 percent. Wal-Mart employs about 1.4 million U.S. workers.
A thinly spread workforce has other consequences: Longer check-out lines, less help with electronics and jewelry and more disorganized stores, according to Hancock, other shoppers and store workers. Last month, Wal-Mart placed last among department and discount stores in the American Customer Satisfaction Index, the sixth year in a row the company had either tied or taken the last spot. The dwindling level of customer service comes as Wal- Mart (WMT) has touted its in-store experience to lure shoppers and counter rival Amazon.com Inc.
What do you guys think, especially those of you who regularly shop Walmart — has this been your experience?
So there’s yet another in a series of articles on the decline in coupon usage on the front of the Today site today: “Coupon Clipping Declines as Shoppers Get Savvier.”
Leaving aside the misleading nature of the headline itself, let’s look at what they’re actually saying. A couple of relevant quotes:
But experts say that while frugality is still in vogue, many shoppers have gotten so savvy at saving money that they’ve moved past the coupon.
“It was like the training wheels … to teach people how to save money,” Phil Lempert, the chief executive of Supermarket Guru, said of coupons.
Training wheels? lol — I guess it’s better than the JC Penney CEO comparing coupons to drugs, but… What’s interesting is that there is a lot in here about what consumers want in order to move beyond “training wheels,” but I read some of this as more what the industry thinks we should want. For instance.
Some customers have started to want more than a one-size-fits-all coupon that you clip out of a Sunday newspaper, Mounts said. Instead, more shoppers are looking for personalized deals that more closely match their shopping habits. They also want deals that are delivered digitally so they don’t have to manage a stack of paper.
Can anyone say Just for U? I read quotes like these and hear these sentiments from people, and then think about the amount of time I have spend in line at customer service at Dominick’s. My “stack of paper” lets me down a little less often. Yes, I use JFU (and other digital coupons) and appreciate the deals, but not because that’s what I’m looking for per se. Instead, it’s because that’s what we have to do now because it is being pushed on us.
I think the actual reason for the decline in coupon redemption is pretty clearly spelled out earlier in the article:
For starters, there were slightly fewer coupons. The industry distributed about 310 billion coupons in 2012, down from 313 billion in 2011 and a big drop from 336 billion in 2010, according to Inmar’s research.
Last year’s batch of coupons also tended to be for smaller discounts and to expire more quickly than in the past, Mounts said.
Does anyone else ever want to respond to these with a: Well, duh. Fewer coupons — and especially, fewer food coupons — coupled with lower values and shorter expiration dates make it harder for people to redeem coupons in the quantities they did in the past. Add to that fewer store promos, language limiting the number of coupons you can use (in some cases to one per transaction!) and tightening retailer restrictions, and it’s not really a surprise.
What do you think? Are you using fewer coupons in the past? Am I wrong, and you all really do want all digital, all the time?
Here are a couple of articles to check out regarding what might happen at Jewel now that the chain’s sale has gone through:
- From the Chicago Tribune (also in paper tomorrow): Jewel’s New Boss Focused on Price, Store Experience.
- From Coupons in The News (thanks, Ashley!): Changes Coming to Albertsons, Acme, Jewel, Shaw’s, and Star Market.
Here are a couple of interesting quotes. First from the Trib, here’s a quote from new Jewel-Osco president William Emmons: “We took over the business on Friday and immediately made a decision to adjust prices across all Jewel-Osco stores on many regularly purchased items, like milk and bread. We want to show customers, from day one, that Jewel-Osco is serious about winning their business — and that begins with offering fair and competitive prices. Because our company has a decentralized operating structure, each market is enabled to make its own decisions in the best interests of operating great stores.” Huh — have you guys noticed immediate price adjustments?
And from Coupons in the News: — from an Albertsons LLC spokesperson, but reading this with a sense of foreboding if they extend it to Jewel: ““We don’t think that one coupon policy is something that we could arrive at,” spokesperson Christine Wilcox told Coupons in the News today. She dismissed a corporate coupon policy as being a “cookie cutter” approach that does not fit in with Albertsons LLC’s philosophy, of letting local stores decide how best to serve their own communities. She did not indicate exactly when such a change would take place at the newly-acquired chains, saying it was too soon to talk specifics. But she did offer that “we hope our customers will be delighted with any changes they may see.”
So what do you guys think — and what would you LIKE to see change?
Hmm. Most articles aren’t as dire as The Daily Beast’s Why Groupon and LivingSocial Are Doomed, but LivingSocial just laid off 400 people (10% of its workforce), and neither site is doing as well as it used to.
Both companies are likely suffering from a few fundamental problems. David Reibstein, a marketing professor at the Wharton School at University of Pennsylvania, was an early daily-deal skeptic. In May 2011 he argued that the business would eventually suffer because merchants would realize that the coupons aren’t a great deal for them. Reibstein argued that Groupon’s customers were likely “price-sensitive,” meaning they search for the best deal they can find. This means that they are not likely to turn into repeat customers. So the merchants offer a deal, sometimes at a loss, but then get little future business.
This effect has been confirmed empirically by a team of marketing researchers who tracked three businesses for a year after they offered a social coupon. All three companies lost money the month they offered the coupon and will have difficulty earning it back. According to analysis done by the two researchers, V. Kumar and Bharath Rajan, the companies would need 15, 18, and 98 months (almost eight years) to earn back their lost profits. The reason? “The three businesses had difficulty retaining most of the new customers who were attracted to the coupon offers,” the two researchers wrote in the MIT Sloan Management Review.
There’s a reason I don’t often post TRU online deals any more… remember the $1.00 games fiasco from last year? Now check out this article from Consumerist:
Toys R Us went after customers in a big way this holiday weekend, opening early on Thanksgiving to compete with Walmart and Target, and offering deep discounts on coveted items. But the company may have overextended itself, as shoppers are complaining about canceled orders and having to wait ridiculously long times just to speak to a human.
Consumerist reader Kelly says she ordered 10 items over the weekend, including some for in-store pick-up. But now she’s finding out — after she could have shopped elsewhere — that three of those orders have subsequently been canceled.
Like many other people, she attempted to contact Toys R Us by phone, but gave up after 45 minutes without an answer….
Want some entertainment? Head over and read the comments on the Toys R Us Facebook page.
Look what popped up on CNN this morning — Hostess Brands is closing for good: Shutting down all their plants and putting their brands up for sale:
Hostess Brands — the maker of such iconic baked goods as Twinkies, Devil Dogs and Wonder Bread — announced Friday that it is asking a federal bankruptcy court for permission to close its operations, blaming a strike by bakers protesting a new contract imposed on them.
The closing will result in Hostess’ nearly 18,500 workers losing their jobs as the company shuts 33 bakeries and 565 distribution centers nationwide, as well as 570 outlet stores….
Wow! Beef Products Inc. has filed suit against ABC News for their initial “pink slime” stories back in March and April of this year.
ABC News was hit with a $1.2 billion defamation lawsuit on Thursday by a South Dakota meat processor that accused it of misleading viewers into believing a product that critics have dubbed “pink slime” was unsafe.
Beef Products Inc sued over ABC reports aired in March and April about the nation’s largest producer of “lean finely textured beef.”
In court papers, the company said ABC falsely told viewers that its beef product was not safe, not healthy and not even meat, resulting in the 31-year-old company’s loss of hundreds of millions of dollars in profit and roughly half its employees.
What do you guys think — I’m not sure this is going to fly. They’re also suing several people personally, including Diane Sawyer and the former USDA guy who coined the term.
(Thanks for the heads up, Coupons, Deals and More)
Here’s a new article from Bloomberg about SuperValu’s business woes, saying that they’re looking for a buyer for the whole but that it’s more likely that parts will be sold off. In IL, our SuperValu is Jewel-Osco and Save-A-Lot; in other parts of the country they own Albertson’s, Shaws and more.
“It’s going to be very difficult to sell Supervalu as a whole,” Charles Cerankosky, a Cleveland-based analyst at Northcoast Research Holdings LLC, said in an interview. “The most likely scenario, as opposed to what the board or management would like to do, is the company ends up being broken into pieces.”
Supervalu was valued at 3.82 times earnings before interest, taxes, depreciation and amortization as of yesterday, while Cincinnati-based Kroger Co. was valued at 6.64 times Ebitda. While it is less expensive than peers, one element that makes the sale of the whole business difficult is that Supervalu’s chains are very different from each other, Cerankosky said.
“Jewel in Chicago is very different than Save-A-Lot, which is very different than Albertsons in southern California,” he said. “What all of the operating units have together is poor performance, which makes it difficult to go to a single buyer and say: ‘This is a growth story’ or ‘This is easy to fix.’”
They talk about the different chains, and again, prices come up as a big issue.
“The No. 1 problem is, everything in Supervalu costs too much” and is more expensive than Kroger and the discounters, said David Dietze, president and chief investment strategist at Summit, New Jersey-based Point View Wealth Management, whose clients own Supervalu shares. “Customers are saying, ‘I can’t afford to pay those prices, I’m going to drive out of town and stock up the minivan to save.’”
So what do you guys think? Is “gotta love lower prices” at Jewel too little, too late, or do you see serious efforts to turn things around? Stories like this make me sad, but I’ve been shopping a bit more at Jewel lately. They lured me back in this week for a semi-larger trip. Did they get you in there, too?
Brace yourself — Midwest drought = higher food prices in our futurePosted by rachel in articles, news
I just spent a gloomy bit of time reading about this summer’s drought and the upcoming impact on food prices. Here are a few articles:
- Amid unusually widespread drought, warnings on food prices (CSM).
- Grocery prices headed higher as drought lingers (MSNBC).
- Grain prices set records as US drought, food worries spread (Chicago Tribune).
Aside from the impact on farmers, let’s talk about what we might expect as consumers. The price of corn is already increasing and expected to soar further. Bad news: Corn is in everything. This is also impacting feed corn, so farmers are expected to take action to decrease herd sizes. We’ll probably see the price of beef, for instance, decreasing in the short term as they thin the herds, then later we’ll see it go up as the supply decreases. So the short term might be a good time to stock your freezer with beef and other meats before the expected price increases.
They’re also expecting price increases on milk (harder to stockpile, but you can freeze it), as well as products like oil and salad dressing (because soybean crops are also heavily impacted by the drought). Cereal is expected to rise more slowly, because we already saw big price hikes last year.
Are you going to think ahead and try to prepare for higher prices? What might you try to stockpile now?