DiPiazza Resignation Raises Questions
Jim Prevor’s Perishable Pundit, November 8, 2006
Sometimes the most significant news is shrouded in seemingly idiosyncratic announcements. So you may be surprised that in the midst of all these food safety crises, perhaps the most significant piece of news for the perishables industry recently is word from Bentonville that Bob DiPiazza, Senior Vice President and General Merchandising Manager for Fresh, is resigning from Sam’s Club.
The official word is that he wants to move back to Chicago (Bob was the Vice President of Produce at Dominick’s in Chicago) to spend time with the grandchildren and, doubtless, that is true.
But we’ve known Bob for two decades and he is still young and vibrant. Our bet is that his departure tells us something about Wal-Mart, because if each day at work was truly satisfying, we think he wouldn’t be resigning.
To us, it signifies a company that has lost its way.
When we listen to Wal-Mart CEO Lee Scott talk about sustainability, organics, upscale marketing — we know that the danger is not in any one of these initiatives; it is that the core culture of the company gets off track, that people don’t, in a sense, know anymore what they are supposed to do.
Lately the newspapers have been filled with reports that Wal-Mart is going to be ultra-competitive on price this holiday season. But what does that mean? This is a company whose fundamental appeal was built on Every Day Low Pricing (EDLP) — but this sounds suspiciously like a sale. And exceptionally low-sale prices are, inevitably, balanced by higher prices elsewhere to produce adequate margins. So is Wal-Mart abandoning EDLP?
Wal-Mart is now the biggest buyer of food in the country. An uncertain Wal-Mart will be like the proverbial bull in a china shop, knocking things over every which way as it tries to find a way out of its dilemma.
We made a point of not talking to Bob about this stuff. It wouldn’t be fair to him.
But Pundits are paid to read tea leaves, and Bob’s departure is emblematic of deeper issues. A team that built Wal-Mart on simple theories — buy stuff, keep expenses low, sell it cheap — is suddenly being pushed and prodded by 50 new consultants and new hires to do different things.
Now change can be good, but these particular changes seem random, incoherent and unlikely to produce long-term results. They strike at foundational values and methods of operation but replace them not with new, better values or methods but with a series of short-term tactics.
It seems as if being a publicly held company, where the family influence is now much less than it once was, encourages all kinds of actions to meet quarterly and annual numbers.
To someone like Bob, who knows produce cold and has become pretty facile with other perishables since being promoted, this constant yelping to do things differently to non sustainable purposes is probably more hassle than it is worth.
In other words, having to deal with bull excrement is causing losses for the industry far beyond the spinach fields.