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Barbara Farfan

Recent News From Below Average Retail Brands - Do Starbucks, Macy’s, Jaguar and Domino’s Deserve Their Below Average Ratings? (SBUX, M, TGT, SHLD, EAT)

By October 23, 2012

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If you were to ask the average U.S. consumer for words to describe retail brands like Starbucks (SBUX), Macy's (M) and Jaguar, you would no doubt get a wide variety of adjectives. But one phrase you probably wouldn't expect to hear very often is "below average." Whether you love or hate the Starbucks, Macy's, and Jaguar products and retail experiences, there's still an acknowledgement by business and marketing experts that the brands themselves have a certain prominence, particularly in the U.S. retail industry.

So when a list of 2012 Below Average Brands was recently released by the HarrisInteractive research company, it was more than a little bit surprising to see Starbucks, Macy's and Jaguar on it. According to the Harris researchers, though, these three retail brands, along with 51 others received below average ratings for "appeal," "familiarity," and "positive impact" from consumers. The key factor in this study, of course, was the consumers. Experts and consumers look at retail brands in very different ways, apparently.

If the HarrisInteractive research conclusions are valid, then we should easily be able to spot signs of the below-averageness of these companies in their latest news and activities. Let's see if we can spot that in a roundup of recent news from some of the 2012 Below Average Retail Brands...

Below Average Neiman Marcus And Its Cutting Edge Partnership

Neiman Marcus is probably not happy to be designated as "below average" in any way. The luxury Neiman Marcus chain is anything but average in its unprecedented decision to partner with Target (TGT) discount stores in the 2012 Christmas holiday shopping season. The Target + Neiman Marcus Holiday Collection has already been unveiled and includes 50 limited-edition designer products which are priced from $7.99 to $499.99.

The last time I was in Neiman Marcus I think the only thing priced at $7.99 was a Godiva mini-truffle sitting next to the cash register. The Target-Neiman holiday partnership is all about trendy affordability, which shoppers have always known they wanted to buy, but which U.S. retailers haven't always known how to sell. It's going to be really interesting to see the effect that lower-priced merchandise has on Neiman's customer demographics, and the impact that aspirationally-priced merchandise has on Target's holiday sales.

After Above Average Store Closings Sears and Kmart Aggressively Pursue an Above Average Holiday Shopping Season

it's really not surprising to see both Sears (SHLD) and Kmart on the Below Average Brands list since Sears and Kmart store closings have been in the news headlines all year long. The leaders of the Sears and Kmart chains are still aggressively pursuing a retail turnaround, announcing free layaway, ship-to-store Internet shopping, a customer rewards program, and mobile POS checkout terminals for the 2012 holiday shopping season.

These Christmas retailing strategies from Sears and Kmart are great, but it leaves two important questions unanswered for these iconic American retail chains. That is, whether they can get customers in the front doors of their brick-and-mortar stores, and once inside, whether those customers will find anything that they WANT to layaway, checkout, or earn loyalty points for. Hopefully the answers to those questions will not be below average, otherwise we might see another above average list of Sears Holdings store closings in 2013 as well.

Volvo Looks to New Leadership to Turn Below Average Sales Into Faster Than Average Expansion In China

The leaders at Chinese-owned Volvo seem to realize that the Volvo brand is below average and are looking to a new chief executive, Hakan Samuelsson to turn things around. Samuelsson was named as the new leader about a month after CEO Stefan Jacoby suffered a stroke and went on medical leave. Since being purchased by Zhejiang Geely Holding Group Co., the Volvo team has been trying to refocus to embrace major expansion into the Chinese market with below-average success.

So far sales for the below-average Volvo brand have fallen more than 5% in 2012, resulting in a $38 million loss. So while the Volvo brand is still strongly associated with safety, it hasn't recently been associated with "safe investment."

Domino's Pizza Global Performance Defies Its Below Average Rating

Unlike Volvo, there's not much about the performance of the Domino's Pizza chain - financial or otherwise - that aligns with a "below average" label.

The "below average" Domino's Pizza brand opened its 10,000th store in in Kaligthane, Turkey outside of Istanbul in September. The number of international Domino's Pizza locations surpassed the U.S. store count earlier this year, and international stores now contribute more than half of the Domino's $7 billion in annual revenue.

And speaking of revenue, in its last quarterly earnings report, Domino's Pizza reported same store sales were up 5% internationally, and up 3.3% in the U.S. So while Domino's was on the Below Average Brands List, and didn't make it onto the 2012 Zagat's Best Fast Food List, the second largest pizza chain has made the Hold and Buy list of plenty of stockholders and analysts... at least until the next quarterly report...

Below Average Brinker Chains Pledge Above Average Care Before Its Little Piggies Go to Market

The Brinker International (EAT) owned Chili's restaurant chains was rated as a "below average brand." And recent news from Brinker might confirm that "below average" rating in the minds of Chili's dining consumers.

Brinker recently pledged to force its suppliers to treat their baby-back-rib-growing pigs with above average care. Brinker's "short-term" goal is to force suppliers to eliminate the gestation cages which keep breeding pigs confined in spaces so small that they are unable to move. The pork suppliers only have a "short-term" deadline of five to seven years to make nice with their pigs, or risk losing the Brinker's baby-back-buying business, which wouldn't be so nice.

Assistant Manager Would Probably Rate Her Arby's Employment Experience Below Average

An Arby's assistant manager was fired in Fairborn, Ohio after escaping an attempted robbery at knifepoint. The firing happened not because the assistant manager left the robber inside the restaurant when she crawled out the drive-thru window, but because she had violated the Arby's safety and security policy about never having just one employee alone on the premises.

There are not too many fast food employees who wouldn't view this Arby's employment experience as below average. The fired assistant manager seems to agree and says she didn't want her job back anyway. But there are above average odds that the Arby's legal team will find itself defending the firing and the corporate policy that justified it. And if things would then follow the recent employee lawsuit trends, the ousted Arby's assistant manager may have an above average settlement in her future. Such a legal outcome wouldn't make up for the whole thing, but would at least make for an above average ending to the story.

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October 25, 2012 at 11:02 am
(1) Dana Delikat says:

This news is not shocking to me. Retailers are more and more focusing on their “BOTTOM LINE”…profits.

Working in retail in and out for the last 30 years, I have seen the fact that management now in stores are sales driven, to the point of overlooking excellent customer service, friendly and fair work environment, and rewarding and treating both customers and employees alike like they really matter. It is numbers, numbers, numbers. It has become very cut throat and while at the same time cutting corners.

You get what you pay for. The real bottom line is good customer service. Marketing 101 teaches us that it is a losing battle to compete with price. Yet that is what has happened. Sales all the time.

But to have sales with scarce sales help to the point that customers have to go searching for someone to ring them up is ridiculous. Then most of the sales help you find many times are not trained adequately, are not paid enough, and are to the point of not caring. It is just a job.

The managers that are in place are stretched too thin many times, but also are not in the mind set to care about the customer. “If they don’t like it, they can shop at @@@”! I have heard this so many times.

I have been around enough to have worked at Bloomingdales in the 1980′s when it was so much fun and so much has changed! Why would customers go out to deal with traffic, deal with parking, go to a store where the customer service equates to sales help talking to each other and smacking their gum, and not having the joy of selling installed in them? I would shop online too.

But something is missing when shopping online. Sight, smell, touch, and the experience of nice human contact. People who are happy with what they do. Is that too much to ask?

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