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Personnel choices loom large

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As the new year dawns, mass retailing is facing several questions critical to its future, questions turning on personnel or, more specifically, who will fill key positions going forward.

As the new year dawns, mass retailing is facing several questions critical to its future, questions turning on personnel or, more specifically, who will fill key positions going forward.

Difficult as it is to prioritize, one must wonder, initially, who will run Walgreen Co., in 2015 and beyond, as the world’s most important drug retailer/wholesaler prepares to assume what is perhaps the key role in global retailing.

Complicating this decision, or perhaps simplifying it, is the Boots factor. More specifically, the Boots drug chain, now part of Walgreens Boots Alliance, brings to the U.S. chain drug industry a variety of seasoned and talented staffers, many of whom could run Walgreens. Complicating things is the fact that few U.S. retailers know who these people are or what strengths they would bring to the Walgreens drug chain. This much is certain: No task in mass retailing promises to be as challenging as the integration process facing the next permanent Walgreens CEO. It may well be Stefano Pessina, the architect of the Walgreens-Alliance Boots merger, though he professes no interest in the assignment. It could be a current Walgreens staffer or, as likely, a Boots executive. Whatever the choice — and it will be made before too much time has passed — the future of chain drug retailing in America depends on it.

Speaking of choices, the departure late last year of Duncan Mac Naughton as Walmart’s chief merchant opens another guessing game: Who will replace him? Clearly, this job is among the most critical in mass market retailing, simply because no major mass retailer has ever succeeded without a qualified head merchant. But people of this caliber are rare today, perhaps rarer than they’ve ever been. Walmart does not lack for qualified candidates. But qualified does not necessarily mean special. Here again, then, the person who succeeds Mac Naughton will automatically assume one of the key positions in all of retailing — and will largely determine the fortunes of Walmart going ­forward.

If dollar stores can now be accurately classified as a segment of mass retailing, rather than specialty retailing, several questions arise about its future. Foremost among them: What will become of Family Dollar, the No. 2 dollar chain (behind Dollar General) in the segment. Whatever the ultimate fate of this Charlotte, N.C.-based retailer, it will prove an asset to the retailer that ultimately absorbs it. Additionally, wherever Family Dollar winds up, the dollar store retail segment will be stronger and more formidable as a result.

And speaking of the dollar chain retail segment, can anyone seriously overlook Five Below any longer without seriously misreading this entire segment? Clearly, Five Below is the most exciting dollar chain in America today. It is impacting every competitor by offering what serious retailers have always offered: value. Failing to acknowledge this dollar chain’s success will only hurt those competitors who continue to ignore it. Moreover, recognizing the creativity of the Five Below offering is still no guarantee of offering meaningful competition.

A wealth of other personnel questions beg to be addressed as the new year begins. Many revolve around the strengths of the various merchandising organizations within the major companies. Walgreens. CVS. Walmart. Target. Rite Aid. The list is unending. And subject to serious speculation. Put another way, does there exist any mass retailer today that can honestly admit to total confidence in its merchants? They’re all good. But surely, they could all improve.

Finally, we revert to Sears and Kmart, the two unknowns in the mass retailing community. They remain upright, despite predictions that they cannot continue to operate as they have done for too many years now. The Christmas selling season, for each, was a dismal one. Plans for the future look no rosier. Moreover, the retailing community can no longer afford the luxury of remembering Sears and Kmart as they once were. They need to acknowledge them for what they have become: substandard practitioners of the retail art who stand for nothing in the eyes of the consumers who increasingly shun them in favor of more appealing choices.


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