There was a time when a retail buyer had to ultimately answer to two people: the consumer, and the company’s shareholders.
The consumer guided the buyer towards getting the right product on the shelf, at the right time, at the right price. The shareholder guided the buyer towards making sure the product assortment was going to meet or exceed financial objectives, and deliver the appropriate profitability to the bottom line. The two can, and have lived in harmony for many, many years, and should relentlessly be the only two guideposts in buyer decision making.
Now there is a third person in the equation a buyer needs to worry about: the social media activist (or “SMA” as we’ll refer to them from here on in)…..and they are determined to disrupt the entire applecart. Of course the SMA would argue they are the ultimate consumer and that their righteous opinion is the only course of action that must be followed. Hogwash.
This past week a SMA group entered into a huge food fight with grocer giant Loblaws, over Loblaws’ decision to drop French’s Ketchup, the knight in shining armor who stepped up to fill a void for a “Made in Canada” ketchup, when evil Heinz folded their red and white maple leaf tent and moved State side two years ago (according to the Globe and Mail, the only thing Canadian about French’s Ketchup are the tomatoes themselves. Everything else in the product’s value chain is American).
According to leaked Loblaws documents, the buyer discontinued French’s Ketchup based on appropriate and prudent decision making protocol : (1) sales were not meeting expectations (that’s the consumer side of the decision making equation) and (2) sales were cannibalizing the more profitable President’s Choice Ketchup, Loblaws’ flagship private label (that’s the shareholder side of the decision making equation).
At the end of the day (literally….the decision was made within the same business day), Loblaws capitulated to the SMA group, and the decision to remove French’s was reversed.
Ethics in buying decisions are crucial. A line in the sand cannot be crossed when it comes to products that violate factory health and safety standards, labor laws, or fair trade practices just to mention a few. When it comes to patriotism to the flag though, that is another matter. All else being equal, where a Canadian manufacturer can compete with a global competitor, of course a buyer should lean towards buying Canadian. Beyond that, purchasing decisions are compromised and both the consumer and shareholder loses. We are living in an ever increasing global economy folks, and trade barriers are falling faster than China’s currency. Country economies are being forced to reinvent themselves, or face losing jobs that existed for a very long time.
Canadian ketchup…..really??!! Will your fries really know the difference?? Let’s keep things into perspective. More importantly, this essay speaks to the power of social media, and the role it plays in our society…..or shouldn’t play in this case.
Kudos to the Loblaws buyer for dropping French’s Ketchup for all the right reasons in the first place, and a few rotten tomatoes thrown towards senior management for not supporting that decision.
Tony Whitehouse & Bruce Winder
Co-Founders & Partners
Retail Advisors Network™
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