Dear Mr. Johnson:
You and I have something in common — you’re the fellow who’s running Minyard’s for its new owners, and I shop at your Lakewood store. As such, I thought you probably need to know a few things you won’t find out sitting behind your desk, sorting through spreadsheets and figuring out how to increase margins enough to please your bosses.
Frankly, Mr. Johnson, I’m worried about Minyard’s future. I know a little about the grocery store business from writing about it, and the idea that a family-held company sold out to something called Acquisition Vehicle Texas II LLC does not fill me with confidence. They don’t sound like a bunch of guys who bought a grocery store chain because they like shopping.
Rather, they sound like the sort of people who dominate American business these days, the kind who buy companies to strip them of their assets and sell the pieces for more than the sum of the parts. After all, it’s becoming increasingly rare that big business makes money by selling goods and services. Rather, they do it by cutting costs, and that means laying off employees, eliminating benefits and closing stores. We’ve already had some of that here when Albertson’s gave its employees an early Christmas present by dropping most of them from full- to part-time (the company’s PR person called it “staffing our stores more effectively to match customer demand,” but I don’t think she fooled anybody).
Plus, Minyard’s has all this first-rate real estate, both in urban areas (check out where the Lakewood store is located) as well as in the suburbs. And the Fort Worth money that’s supposed to be behind Acquisition Vehicle Texas II LLC knows all about what to do with prime Texas real estate. Which even a poor businessman like me realizes is not keeping grocery stores open when someone wants to shove money at you.
But that’s not the best thing to do with Minyard’s. The best thing to do is to run it as a grocery store chain. It’s a good one, with terrific service, produce that holds its own with the high-end stores like Whole Foods and Central Market, and the best prices in town. I know this to be true not just because I have shopped at the Lakewood store for as long it has been around, but because I spend a lot of time in grocery stores. It’s not only part of my work, but it’s one of my hobbies. I’ve even been known to take in a store or two when I’m traveling (by the way, the Harris Teeter — where I’m told you got your start — in Charlotte, N.C., wasn’t all that impressive).
And yes, I know how difficult it is supposed to be for regional grocery stores to compete with Wal-Mart. But that doesn’t mean it’s impossible, and according to the newspaper reports I saw, Minyard’s has been profitable. Maybe you can explain this to me, but I’ve never been able to figure out why just making money isn’t good enough, why people like those behind Acquisition Vehicle Texas II LLC have to make lots and lots of money. Minyard’s is close to a $1 billion company. Why isn’t that enough?
Visit the Lakewood store. Talk to the customers — cranky old newspapermen like me, mothers with children, white-haired women buying cat food, a cross section of the neighborhood. Your employees know my name, know the names of lots of their customers, say good morning to us, ask us how we’re doing. And on the day the sale was announced, they were putting a brave face on things when anyone asked them about it. The cost cutters may not think much of that, but I think it’s pretty much what defines a successful business, when your employees stick up for you.
If you strip Minyard’s to the bone and dispose of it, I have no doubt you’ll receive a nice bonus. But what will those employees receive, after they helped make the company what it is? Unemployment isn’t much of a reward.
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