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FUD Can Be a Drag on Sales!

by Art Patch/Shelby Report columnist

A recent phone conversation with my son brought to my attention an acronym that was not only ­phonetically disturbing, but one I had not heard. He works for a technology startup company that has been looking for ways to shore up its financial base, including putting itself up for sale. When the conversation got around to “how are things at work?” his response caught me off guard. He countered with, “Except for an ­atmosphere of ‘fud,’ things appeared to be looking up.”

After asking for help with “fud,” he said it was an acronym for fear, uncertainty and doubt. His concern was that “fud” was creating a significant drain on productivity, as most of his fellow associates were spending a ­disproportionate amount of their time focused on “how will this affect me?” rather than their jobs.

When you think about it, prevailing conditions in the food retail industry make it susceptible to a major case of “fud.”

Until recently the economy was rightfully blamed for soft or declining sales in the food retail arena, but frankly, the economy is old news and no longer is an excuse for declining sales. With Safeway, Kroger, Publix, Costco and Whole Foods showing year-over-year identical non-fuel sales from break-even to Whole Foods at close to plus 10 percent, it’s hard to blame the economy. It could become a habit, a ­dangerous habit.

With CPG companies raising their prices to cover ­commodity increases up to 60 percent for sugar, 52 percent for corn, 24 percent for wheat, and meat and ­produce up 5-10 percent, inflation alone should grow sales year over year.

If your company is still showing declining sales, I’ll go out on a limb and say your problem is not the economy. It may be a case of “fud.”

Bottom line, if you’ve done any of the following over the last three years, chances are it’s “fud,” not the economy, impacting your top-line identical sales:

  • Have closed stores—without sharing reasons why with impacted employees.
  • Have a management team spending more time talking about cutting expenses than building sales.
  • Have had more than one headcount reduction.
  • Have reduced employee non-financial incentives and training to levels that makes them hardly discernible.
  • Have switched sales and labor store budgets from a bottom-up to a top-down function.

Sam Martin, CEO of A&P, shared his five-point recovery plan recently with the financial community. His five ­priorities are:

  1. Building a strong management team
  2. Strengthening liquidity
  3. Reducing structural and operating costs
  4. Improving the customer’s value proposition
  5. Enhancing the store experience

I may have missed it, but none of the five priorities focus exclusively on the employee. Lost is the notion Mac Anderson touted so profoundly in his book, “Companies Don’t Succeed… People Do!”

So what does a chain like A&P, currently in bankruptcy, do to minimize the impact “fud” has on the top-line sales generated by the remaining stores?

For all food retailers harboring “fud,” there is no time like the present to treat your employees like they are your customers, stop the incessant top-down never-ending chatter about cost cutting. Help them, by your example, understand how to be more productive.

Of the outside-of-your-company options for eliminating “fud” is Chuck Coonradt’s “The Game of Work.” He has identified the fact that people work harder at play then they do at work. Think about how hard an employee works to ski, rock climb, play ball and bike ride compared to the effort at work.

By using a simple set of scorekeeping ideas, the “game of work” makes work more like play which gets the store-level employee focused on customers and customer-related issues rather than fear, uncertainty and doubt.

Fighting “fud” could be as simple as a management team out in the field providing positive feedback to employees.

Don’t let your stores get the “FUD.”

After a 40-year grocery career that included executive level ­positions with Safeway, Lucky Stores, AppleTree Markets and SaveMart/Food Maxx, Art Patch retired from the grocery retail business in 2007. He is on the ExecuForce Team of Encore associates, is a counselor for SCORE, helping new and emerging businesses, and chairman of the board of the Stanislaus/San Joaquin County Food Bank. He ­welcomes your feedback. E-mail him at [email protected].

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