OPERATIONS

Kroger appoints diversity officer

BY Staff Writer

New York City — Kroger Co. appointed Reuben Shaffer as its chief diversity officer, effective immediately.

Shaffer has been the company’s VP of retail operations for the Cincinnati/Dayton division since 2001. In his new position, he will oversee Kroger’s diversity initiatives, including supplier diversity and integrating the company’s ongoing commitment to create an inclusive culture into business and organization initiatives.

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Promotional pace held steady in May

BY CSA STAFF

Some companies were more aggressive with promotions last months and others were less so, but Target held steady producing the same number of circular ad pages (109) in May 2011, and it did the same month the prior year, according to data collected by the Chicago based firm Market Track.

Conversely, in keeping with Walmart’s renewed emphasis on every day low prices, its average number of promotional pieces per market decreased to two in May compared with 2.8 the prior year, however the average number of pages increased to 40 compared with 30, according to the Chicago-based firm Market Track.

On average, across a retailer set that includes many of the nation’s top companies, both the number of inserts and number of page counts decreased when comparing May 2011 to May 2010. Notable standouts for the insert counts include a decline of 39% for Home Depot and an 11% decrease for Lowe’s. While both Home Depot and Lowe’s dropped fewer inserts this year compared with last year, Home Depot’s decline was more pronounced from nearly seven inserts in 2010 to four in 2011. Interestingly, while home/hardware retailers experienced decreases in number of drops, the number of pages did not parallel the same level of decline. Home Depot’s pages only dropped by 7% and Lowe’s actually increased their average page count by 9% in 2011 compared with 2010. Sears charted the greatest percentage increase in inserts with 37% increase this May over May 2010.

When looking at number of pages, Macy’s, Safeway and Walmart showed the strongest increase in number of pages on a year over year comparison, while Best Buy and CVS decreased their pages by 24% and 18% respectively.

It’s important to note a number of factors that should be considered when examining the number of inserts and pages retailers send into the marketplace. Market Track’s granular level of data reflects regional versioning and market specific differences. This is accomplished through an extensive collections process, including physically obtaining the ads from the various markets in which they are distributed. In the instance that retailers send additional circulars to a limited number of markets, Market Track’s information reflects these nuances through numbers with decimals (for average number of inserts per market) and odd numbers (for average number of pages).

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Shareholders not interested in Target’s growth plans

BY CSA STAFF

They are however interested in which political candidates and trade associations receive political donations from the company and what the decision-making process is behind those donations. At least it’s what anyone who attended or listened to a webcast of the company’s shareholders’ meeting last week is left to conclude after listening to the line of questioning that followed prepared remarks by Target chairman, president and CEO Gregg Steinhafel.

Shareholders could have used the occasion of the annual to meeting to gain new insight into what gives management the confidence it will be successful with its entry in to Canada, considering it is late to the market and going up against well-established competitors including Walmart; how the gross margin impact associated with the 5% rewards program and what level the company sees the penetration rate of purchases made with the REDcard leveling off at in the future; or maybe even a question about the relaunch of Target.com and the type of mobile and social media functionality the company intends to integrate into its new online offering. What about the four City Target stores opening next year? It would be interesting to know management’s thinking around the availability of real estate and the time frame required for approvals as that would shed light on the growth potential.

The answers to any one of these questions would presumably be of interest to a shareholder concerned about the company’s prospects to deliver on the ambitious financial goals outlined by chairman, president and CEO Gregg Steinhafel.

But nooooo! Apparently no one interested in the company’s business bothered to show up to the meeting, or at least they didn’t bother to ask a question during the portion of the event that was webcast. Instead, what the company got was one person after another asking the same question in a slightly different manner about a donation made eight months ago to a political candidate who belonged to an organization opposed to gay marriage.

There were questions about the process, how Walmart vets candidates, what trade associates it gives money to, how the process works, how decisions are made about which celebrities to work with and more questions about the process.

Steinhafel was very diplomatic initially, answering the first few questioners with detail and thoroughness. But then the questions just became redundant and questioners were directed to the company’s website where a high level of detail resides as Target has become quite transparent with its political giving process. Appeals by Steinhafel for shareholders to ask questions about the business went unheeded and more questions were asked about political donations to which Steinhafel replied the topic had been exhausted.

A slight reprieve came when one long time shareholder rose to comment on the fine work done by Target’s front line store employees, many of whom were in attendance at the meeting since it was held in a store. The shareholder asked that the employees be recognized and Steinhafel obliged with some kind words about their important contributions.

Shortly thereafter the one hour meeting was dismissed. All total, Steinhafel spent about half the time being badgered by shareholders who seemed to care only about political giving and not about the ambitious goals to grow sales to $100 billion and profits to $8 a share within six or seven years that Steinhafel had outlined at the start of the meeting.

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