Former Ukrop's Ban Fundraising Outside of Stores

Target builds stores on an organic basis. They have the ability to control message, from their perspective, out of Minneapolis. Target has consistently been able to point to their enormously generous contributions to charity (5% of profits) to communities all about the country.

Ahold's has purchased a very well run, family operation in Ukrop's. The right step for Martin's Foods is to have a solid conversation with Bob Ukrop, gather his perspective on how the chain has handled local fundraising outside of stores over the years, and then formulate a strategy that fits those mid-Atlantic markets.

A crafty Speaker of the House, Tip O'Neill once wisely opined, "All Politics is local." Ahold would do well to LISTEN first for understanding.

Roger Saunders, Managing Director, PROSPER BUSINESS DEVELOPMENT / BIGinsight

I believe the issue of fundraising outside of stores needs to be considered within the retailer's overall strategy and particularly within its community strategy. Ukrop's was heralded as the epitome of community involvement--Sunday closings, no alcohol sales, etc. While the banner may now say Martin's Food Markets, the community of shoppers are still Ukrop's customers.

One could question the wisdom of rolling the 25 Ukrop's stores under the Martin's Food Markets banner (subject for another BrainTrust discussion). However, there should be little discussion relative to the merits of changing policies that made Ukrop's the dominant player in its market.

Unfortunately, these types of discussions have little positive benefit to the offending marketer. Martin's Food Markets are now on the defensive and facing a potential PR nightmare--for what purpose? To merely extend Ahold's policies to each acquired banner without consideration of the impact on the target market makes little marketing let any PR sense.

Acquisitions like this work best when the acquiring firm combines its operational efficiencies with the marketing effectiveness of the acquired organization.

Richard J. George, Ph.D., Professor of Food Marketing, Haub School of Business, Saint Joseph's University

In order for Ahold to incorporate Ukrops into their sterile corporate environment, they need to break these local ties. Sure it will hurt business but as part of Ahold's business model they are willing to accept a loss in sales to make Ukrop's like their other divisions. Ahold does not like dancing around political correctness boundaries.

Is this a smart thing to do? Probably not. Ahold has never been known to be the brightest bulb on the Christmas tree when it comes to retail execution. That's why they seem to be closing or selling off so many stores over the past few years. The smart thing to do is to get involved with the community, beyond the token charitable donations with oversized photo op checks.

David Livingston, Principal, DJL Research

Roger Saunders is right. This could also to some degree be a big-city vs. small-town type thing. In a major urban market, having people you don't know out in front of a store can be seen as an annoyance. When I lived in NYC, I felt that way. Of course the groups seeking donations could be really pretty aggressive. Now, in small-town Vermont, I see my neighbors and friends outside the stores soliciting for one thing and another, and it's an enjoyable experience all around. I get to chat with friends, make a donation, and feel that the store is doing its part as a member of the community. It's a whole different culture, and you should be cognizant of that as a merchant. Roger's suggestion that the new ownership speak with the former owners is spot-on.

Warren Thayer, Editor & Managing Partner, Frozen & Dairy Buyer

Don't we harp all the time about how companies big and small should take every opportunity to build connections with the local communities they serve? I guess Ahold's Martin's Food Markets isn't listening.

Banning the Girl Scouts is definitely not going to elevate them in the minds of the local moms; quite the opposite, actually. At a time when they're taking over an iconic brand whose founder prided himself in his company's support of the local community, the last thing they should do is change their policy on charity and community support.

Marge Laney, President, Alert Technologies, Inc.

There's nothing like buying a company and then attacking its intangible assets. Happens all the time, never works. Let the kids sell their cookies--or start looking for new customers to replace the ones you'll lose. This isn't a one rule fits all situation. Ukrop's customers are used to a certain standard of community relations and it ought to be preserved.

Ryan Mathews, Founder, ceo, Black Monk Consulting

Of course it will hurt them. "Taking revenge on shoppers doesn't build shopper loyalty."

Sandy Miller, President, Miller Zell

I'm torn on this one. From an ops perspective, I think keeping the front clear makes for a less distracted shopper. A better idea is for the customer to come into the store and see banners and posters touting the local charities the store has donated to. I think this is a common practice and singling out Martin's and Target sends the wrong message. On the other hand, this could be a great opportunity for independents to fill another void created by big box.

Doron Levy, President, TheMortgageMachine.ca

I think charity, like other things is most effective when it's focused, measurable and deep-set into the culture of the company.

My personal belief has always been that it's better to choose one cause that the majority of your constituents can accept as worthy and then put ALL of the organization's efforts behind it.

You may not make everyone happy by doing this but you will cause measurable good that falls in line with company values and culture.

Doug Stephens, President, Retail Prophet

Whatever they may wish to call it, it is a disregard for humanity. Unless they, themselves, are gathering resources to pass on to the needy, there is no sound reason for a ban. Should such a ban persist, I would encourage people to shop elsewhere.

Manuel Escalante, Senior Consultant, Marketing Management Company

When the Target/Salvation Army controversy arose, I made a comment in this forum about the "gauntlet effect" created by solicitors outside store entrances. It was widely picked up in the media. I still have mixed feelings about that.

Nobody likes to see the efforts of worthy charities hampered by restrictive policies. But no retailer wants its shoppers to have an experience just prior to a shopping trip that results in a smaller basket.

In extending this policy to its re-bannered Martin's locations, Ahold may have made the right business decision - but it's a cold decision.

James Tenser, Principal, VSN Strategies

They are not Ukrop's anymore. Whether or not the decision is good or bad, is up to the consumers to decide. They can decide with their wallets. Will they? Likely not. Few consumers really do make choices with their wallet that equal their words and thoughts. Convenience will rule out or a good price on ground chuck will overrule their trepidation over the balance in the Girl Scouts fund.

Cynical? Sure. Reality? Yes.

Even as strongly as we felt, as a consuming household at the time of the Target/Salvation Army decision, we still make occasional purchases there. Have they lost some potential dollars from us? Sure. Have they lost much from it overall? Not so much. Yet, the fact that it still somewhat affects their image is true or they wouldn't be part of this discussion today or remembered. It should be remembered. It should have impacted them.

Will this be remembered? Maybe. But it's likely nothing that a great sale on Coke and Pepsi won't fix. Sadly, consumers have a conscience of a moment. But when they see next week's ad? Not so much.

Nevertheless, overall it may be time for organizations to take a new approach. I wonder, do you think that the Salvation Army wishes they had thought of texting 90999? I wonder if the Girl Scouts might think of something so innovative. Hmmm...maybe a new merit badge?

'Scanner'

Martin's needs DAMAGE CONTROL fast.

When I lived in Richmond, Ukrop's was the corporate citizen along with defunct A.H.Robins pharmaceutical company, Reynolds (now Aloca), Miller and Rhoads department store, defunct, long gone Best catalog showrooms, Circuit City, and other local merchants and large companies. These companies carried the corporate giving for the entire community.

They can't just ban fundraising activities without repercussions from a sizable part of the community. Opening on Sundays and selling beer and wine is one thing, being Scrooge and banning fundraising symbols such as the red kettle and the Girl Scout cookie table are down right sacrilegious.

'weo'

I did not have an issue with Target's decision to ban the Salvation Army. I think treating each customer to a small dose of guilt as they enter your store isn't good for the company or generally wanted by the customer.

Ukrops - right now - is different, however. They were an integral part of the community. (I have lived in Richmond for more than 3 decades.) In fact, I can think of no other Richmond brand that stands more for the community.

Richmonders are curious how well Ahold will retain the aspects of Ukrop's that made them special and are watching with a critical eye. Ahold should not tamper with community-related policies until they can transition customers. A year or two from now, ban the Girl Scouts, but right now they are giving people a reason to not like them during a time when people are forming opinions. Terrible move, Ahold.

'atdrake'

Since Tarjeh, as we call it, banned The Salvation Army, I drive by my local "T" without ever leaving a dollar in their till.

My local Ahold-run Supermarket has The Salvation Army kettles at the exit at Christmas, and Veterans passing out poppies for appropriate holidays. I wonder who makes these decisions? Clearly it is someone totally out of touch with the neighborhood. A local Shop Rite has kids from local schools bagging for tips that go to their organizations. If an individual shopper is so put off by the panhandlers at the door, why risk pissing off the mothers to placate one or two cheapskates? How weak kneed is the person who can't walk by a kettle or card table? They don't grab you and shake you for loose change. Grow up!

'FreezerFreak'