Breaching Comes Home to Roost

In yesterday’s mail was a little surprise for my husband and me. In a bright-yellow envelope marked “urgent” was a printed note from our credit-card company, informing us that our account information had potentially been compromised by an “unnamed retailer” and that, in order to protect us from identity theft, we were being issued a new credit card and account number.

The company requested that we destroy our current credit card.

Because in tandem with my colleagues at Chain Store Age I routinely report on the sizeable security breaches that have occurred of late—TJX Cos. and Gap Inc. among them—I am certainly aware of the havoc wreaked by the leakage of personal information. But until it happened to me, I didn’t personalize it. Now it’s personal.

We found ourselves wondering if it was too late. Had our information already been leaked? Was there some spend-happy criminal out there perpetrating shopping sprees at our expense? If so, would we be held responsible?

My husband and I now count among the thousands—make that hundreds of thousands—of people who have experienced these same fears. You can bet that the next time I report on a newly announced breach, I’ll have a new level of empathy for the cardholders who receive that little note in the mail.

—Katherine Field

Memo to Mackey: Watch Out for the Joys of Blogging

John Mackey, CEO of Whole Foods Markets, is back to blogging after months of staying away from the keyboard after it was revealed that he blogged under a pseudonym on everything from the way he looks to the value of Whole Foods stock and the quality of the company’s competitors.

In his first new entry, which includes an apology for putting a “negative spotlight” on his company, Mackey also states, “I’ve learned many things from these events. The primary lesson I’ve learned is that because of Whole Foods Market’s success, I have become a public figure. My personal and work lives are now closely connected—and impact one another. Anything I say or do is now at risk of showing up on the front page of a national daily newspaper and therefore, I need to be much more conscious about the implications of everything that I say or do in all situations …”

Perhaps I am being too harsh on him, but where had Mackey been the last few years? Did he not see the coverage of Dennis Kozlowski of Tyco? Or Ken Lay of Enron? Or that of Robert Nardelli when he was at The Home Depot? Even the straight-laced Warren Buffet and Bill Gates are subjects of personality profiles. Did it have to take Mackey’s public embarrassment to wake him up to the fact that we live in a celebrity society, and that the heads of major companies, particularly public companies, and even more so companies that are frequented by the rich and famous and those who aspire to be, are targets for paparazzi and would-be Pulitzer Prize reporters?

Business journalism no longer is confined to a few select media outlets. It has gone mainstream, partly because of the cult of personality that has engulfed journalism. Fox is launching a new business cable channel. Conde Nast launched Portfolio last year.

New concepts and ideas, case studies and thematic strategic stories abound in all media, as they do at Chain Store Age. But the stories that gain the most attention are those tied into people. Executive profiles fascinate readers. We do our fair share at Chain Store Age, though we admittedly are careful not to focus on peccadilloes or other potentially embarrassing traits or frailties. Not so the consumer business media. They are after headlines—big, bold, banner headlines. The juicier, the more salacious the incident, the better they like it. So if I were John Mackey, I’d keep my guard up. It’s okay to blog again. Just be careful because the media is watching and waiting for you to slip once again.

—Murray Forseter

Weighing in on Linens ’n Things

News of impending store closings in Lincoln, Neb., is generating as many column inches as the Nebraska Huskers’ no. 5-ranked baseball team.

Bloggers are particularly busy trading rumors and predictions for facts as they try to anticipate what retailers are closing in Nebraska’s capital city.

The biggest buzz right now is over Linens ’n Things’ upcoming closure of 120 stores nationwide. Relieved that Lincoln wasn’t on the shutter list, but Omaha is, capital city residents have made LNT a hot topic of discussion.

“I know you were all worried ... [but] Lincoln’s Linens ’n Things is not among the 120 stores the company is closing due to its bankruptcy. However, Omaha isn’t so lucky,” blogged a Lincoln Journal-Star Biz Buzz writer on May 12. “While Lincoln dodged that bullet, there are a lot more coming. Chains that have announced plans to close multiple stores include Zales, Foot Locker and Charming Shoppes, which owns Lane Bryant.”

Bloggers are chatting back and forth about what stores they think are going to close, which ones they feel should close, the rapidly emptying Westfield Gateway Mall on the east side of town, the new corporate silence that surrounds what was supposed to be a new Kohl’s on the south side.

My bet is that my hometown isn’t alone in its retail chatter. The topic of store closures will likely be keeping bloggers busy for the rest of the year.

—Katherine Field

Capitol Makeover

Lincoln, Nebraska, is buzzing with the news that Wal-Mart has selected Nebraska as one of 20 state capitols to get an energy makeover – but not all the buzz is positive.

When the announcement came on May 5 that the world’s largest retailer would partner with 19 states and Puerto Rico to perform energy audits on selected government buildings and recommend ways to lower energy costs, Nebraskans were at once surprised, pleased and disgruntled at the news that our state got a nod. Although we don’t yet know which of the three nominated buildings – the state capitol or one of two state office buildings – will actually receive the audit, the responses have been prolific, and both under- and over-whelming.

One blogger to the Lincoln Journal-Star newspaper opined, “This is great news.” Another whined, “They [Wal-Mart] do a lot of good for the environment, just not for their employees.”

But the most far-reaching, and wary, response came from this blogger: “My concern is the size of the company. We all know they are big, but now big enough to do Nebraska a favor and select us so they can help us. Will we as a state be able to say no to them in the future if need be? What about other states across the country? When you consider their size and the amount of money they are spending lobbying and giving to political campaigns, it would seem that a thinking person would ask where this is all headed.”

Given the suspicious tone of this blog and plenty of others, it becomes quite clear that potentially being beholden to Wal-Mart isn’t a pleasant thought to a population of conservative Midwesterners.

—Katherine Field

Photo courtesy of the Lincoln Journal-Star

Sales Pitch

There’s no optimism in this headline: “The Continued Collapse of the Nation’s Teen Job Market and the Dismal Outlook for the 2008 Summer Labor Market for Teens: Does Anybody Care?” However, retailers looking to hire teens might see a half-full glass vs. the mostly empty glass teens are facing.

Published last month by the Center for Labor Market Studies at Northeastern University, the report has a plethora of facts and figures but the killer stat is this: “The teen employment/population ratio of 33.5% in the most recent quarter was the lowest ever recorded in the 60-year history of national teen-employment data going back to 1948.”

This hit a personal nerve at my house, where we’ve been watching an interesting retail phenomenon unfold. My 16-year-old daughter is seeking her first “real” job and has an interview at her favorite teen-apparel store next week. Whether or not the interview results in a job, it’s been fascinating to witness the recruiting expertise of this particular store manager.

Sorry, revealing the name of the multi-channel mall-based chain would compromise the confidentiality agreement I have with my family—and the point here is that the store manager’s approach could apply equally well to any chain looking to hire.

Case in point: At the mall where my daughter has her interview, another apparel store has a “now hiring” sign posted at the POS—but when an associate in the store asked my daughter if she’d like to take an application to work at that store, my daughter said “no thanks.” Go figure.

Conversely, the dialogue between my daughter and the store manager with the desired job has been going on for several weeks. It started in mid-March, when my daughter was shopping for a dress. The manager struck up a conversation, complemented her on the dress she was trying and then switched from “sell-the-dress” mode to “sell-the-brand.”

She asked my daughter’s age and my daughter immediately took the bait: “Sixteen, how old do you have to be to work here?”

“We prefer over 18, but I sometimes hire mature 16- or 17-year-olds,” answered the manager, who then did a great sales pitch on the value of working in her store, assuring my daughter that she respected and understood that high school students have academic, extracurricular and family obligations. “If you tell me what’s best for you, I schedule your hours accordingly.”

She then turned to me, saying, “And for high-school students, I like it if the parents have input into schedules as well so we don’t conflict with family trips or events.”

Wow, now she’s sold both mom and daughter and we’re thinking this could be the ideal teen job. My daughter left with the dress, an application and instructions to return it the first week in April—which she did.

On that return visit, my daughter reported that the manager continued her sales pitch—again extolling the virtues of working at her store. She ended by telling my daughter that she would not review applications or begin interviewing until the end of the month or the first of May, when she knew which of her college employees would be staying for the summer.

The entire month of April we dealt with typical teenage tenacity—no way my daughter would apply for another job because this was the store she wanted to work in. (Score another point for that store manager—and by the way, want to guess where my daughter shopped when she needed spring shorts in mid-April?)

On April 30 my daughter called the store and the manager promptly scheduled her to come in for an interview. The job may or may not happen—but every interaction with that store manager has left my daughter convinced this would be a great place to work and, if no job happens, it’s still one of her favorite places to shop.

Contrast that to the stores that are on the teen-taboo list. Yes, even when the economy is miserable and reports suggest few teens have viable job opportunities, the notoriously fickle Gen Y gang is choosy about where they will work. Sure, some of it is about working in a “cool store”—but the bigger factor is the store manager. Word spreads fast on stores and managers that are great to work for—and even faster on those that have bad reputations with teens.

Initially, I was surprised to learn that the movie theater and computer-game stores were high on the list of places never to work (after all, they are prime hangouts). But, employment is a revolving door at these establishments, which are all but black-listed by the local teen-texting network. Merchants in our market that have a waiting list of wanna-be associates are those where teens start working in high school and return to work in the same stores over college breaks. Target, Staples, Michael’s and Chick-fil-A are among the most-popular choices.

With unemployment on the rise, why should retailers work so hard to pitch jobs in their stores? Maybe because those teens who are worth stringing along from high school through college are hard to come by. On my daughter’s last shopping trip to the store where she has the interview, three associates were on the floor—one was texting on her cell phone; one was at the POS complaining loudly about the last customer she waited on; and the third was working hard. The manager was not present—but two strikes and one hit don’t produce the same results in store sales that it does in baseball.

—Connie Gentry

Follow Whole Foods Market’s Lead on Bags

With all the attention being given to the green movement, I think it’s time retailers got serious about reducing the use of plastic shopping bags. Just the other day, I went shopping at Target and the cashier used nine plastic bags for my order (a few, it should be noted, were filled with only one or two items). Once home, the bags were destined to sit in my kitchen cabinet—with at least 20 others.

But a message printed on the Target bag caught my eye: “California shoppers: Please return [this bag] to a participating store for recycling.”

That got me thinking. I know that it is not easy to start a citywide—let alone statewide—recycling program. But here’s a much simpler idea: What if grocers, mass merchandisers and drug chains took a lesson from Whole Foods Market and not only banned plastic bags, but also rewarded customers for bringing their own?

Whole Foods shoppers are encouraged to bring any bag from home, paper, plastic, or fabric, to carry groceries. And their proactive efforts earn them a refund of approximately $0.05 per bag.

You don’t have a bag? No problem. The grocer sells reusable bags, created from recycled plastic bottles no less, for $0.99.

If more retailers took advantage of similar programs, they could make that much stronger of an impact on the environment, and get shoppers in on the action.

I can’t imagine that I am the only one who is tired of being bogged down with plastic bags. And statistics show that only 1% of these bags are recycled worldwide anyway.

If all shoppers did their part–and got rewarded for it in some way—I’m willing to bet that one important component of the green movement would surely get underway that much quicker.

—Deena M. Amato-McCoy