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Pundit’s Mailbag —
Spezzano Defends DiPiazza/Wal-Mart

Jim Prevor’s Perishable Pundit, November 10, 2006

Dick Spezzano, once Chairman of PMA and for many years Vice President of Produce at Von’s, sent a note regarding the Pundit’s piece on the state of Wal-Mart and Bob DiPiazza’s resignation from Sam’s:

First let me start with that I read your Perishable Pundit daily with great interest, and as I mentioned to you at the PMA, I wish you would cover less each day as it takes up so much of my time allocation to trade readings.

Even though I consider it lengthy, it is a “must read” on a daily basis.

I would like to make a few comments on the article about Bob DiPiazza’s resignation from Sam’s. I, like you, have known Bob for about 20 years, as we served on the PMA and PBH board of directors together, and our companies were members of a non-competing “Share Group”. I have always considered him to be one of the most progressive produce/floral merchandisers in the US, and I often visited his Dominick’s stores to gain new ideas, and more importantly, we are very good friends.

First of all, he is retiring from Sam’s/Wal-Mart, and yes, he will probably consider doing something as a consultant or a position on a full-time basis where he can be based out of Chicago. When he took the Sam’s Club job, he promised his wife Terry that this would be a seven-year deal, and it has been eight-and-one-half years.

You stated that you didn’t contact him for this article but you are inferring that the reason he is leaving Sam’s is because: “To us, it signifies a company has lost its way.” And “In other words, having to deal with bull excrement is causing losses for the industry far beyond the spinach fields.” I feel before you refer to someone in this way, you need to ask him why he is retiring from Sam’s as “it would be only fair to him.”

Secondly, you stated that the changes Wal-Mart is in the process of implementing, “but these particular changes seem randomly incoherent and unlikely to produce long-term results.” I, like you, am a Wal-Mart and industry watcher as it is the core of my business and probably true of yours. Over the years in watching Wal-Mart, I have noticed that they make few mistakes and usually quickly correct them. When they were developing their Neighborhood Stores, they just about wore the paint off the shelves replacing categories and remerchandising sections to find the right mix and presentation. Even now, they are still proceeding very slowly with this format.

Wal-Mart has been reporting 4% and less “same store sales,” which is way off their peak years of 8+%, and their stock price has been stuck at $45 to $50 per share for about five years. As a Wal-Mart stock holder, I would expect them to make “step” changes to their model and to update the model to today’s changing consumer. This should be especially true as they are encroaching on and entering the urban areas of the US.

I repeat myself… they make few mistakes and usually quickly correct them. Bob DiPiazza will be missed at Sam’s Club as he took them to new heights in their perishable buying, merchandising, and store equipment, that even Mr. Sam wouldn’t have dreamed of.

Thank you for allowing me to share my thoughts on my friend Bob DiPiazza and Wal-Mart.

— Dick Spezzano
Spezzano Consulting Service, Inc.

Before anything else, let me thank Dick for his note. To have a man of Dick’s stature in the trade call the Pundit a “must read” means a great deal, and we appreciate it.

We are working on the length of our Pundit, but we’ve gotten waylaid a bit with an extra 100 articles on E.coli, botulism and salmonella that weren’t exactly in the editorial plan. Truly, Dick, thank you.

Seeing Dick Spezzano and Bob DiPiazza’s names intertwined like this reminds me of the “good old days” when these gentlemen were leading PMA and the regional retailers they worked for. They, along with a few others, were the true fonts of innovation, passion and leadership in the trade.

It is also true that they did all this while maintaining their spirited personalities. In fact, as we’ve run our Pundit series on leadership here, here and here, and we’ve heard from so many readers about a style of leadership gone, we often remember the passion these gentlemen brought to everything, from the annual contest by board members to solicit more members to pushing 5-a-Day in its early years.

Dick had the Pundit out to give the keynote address for one of the old Von’s Produce Days, and I got to see a master at work. I still remember Dick’s enthusiastic words once as he pulled me aside during a PMA meeting, “Is this a great organization or what!?!”

That passion is still with Dick as he sticks up for his friend.

The Pundit apologizes if the piece came across as disparaging to Bob in any way.

We owe Bob a lot: First — and Bob may not even know this &dmash; we were both at an industry function at the Wig-Wam Resort in Arizona. While Bob and the Pundit were tied in meetings, Bob’s wife, Terry and the Pundit’s not-yet-wife, Debbie, sat next to each other at the pool.

It was Debbie’s first produce function, and Terry’s warm and friendly way, along with a bit of advice on how to handle produce guys, made Debbie feel so welcome she wanted to stay. It is many industry meetings, a wedding and two children later, but perhaps it happened the way it did, in no small part, because Terry was great that day by the pool.

Years later, our debt to Bob grew in another way. Last year’s publication of the Pundit’s sister publication, PRODUCE BUSINESS, may not have been printed in time for the PMA convention had it not been for Bob DiPiazza in a funny way.

After Hurricane Wilma knocked our power out for days, we needed to get up and running or we would miss the show. The Pundit made a mad dash to Orlando to buy generators but there were none to be had. We followed a truck to a Sam’s Club and offered to buy them off the back. The deal was made, but there was just one problem: We weren’t a member. No problem, the Pundit joined fast.

Then another problem arose: Sam’s Club only accepted Discover card (they just started accepting MasterCard on November 9, 2006). Unfortunately, our limit on the Discover card was a fraction of the cost of the generators, so we had to pay with a check.

Next problem: You had to have been a member 30 days and we weren’t a member for 30 seconds. We needed those generators badly and had no intention of letting them go. A life in the penitentiary briefly passed through our minds when they offered the chance to talk to the Club Manager.

Turns out the Club Manager had the authority to OK checks, but this was several thousand dollars more than he was used to accepting. We begged, we pleaded, we mentioned that we knew Bruce Peterson of Wal-Mart Supercenters. No interest. Then we mentioned we knew Bob DiPiazza, and the manager took a step back and said, “Well, any friend of Bob DiPiazza is a friend of mine.” Then he initialed the check and said I should say Hi to Bob.

So we owe Bob a lot.

We didn’t talk to Bob for that piece because, as we said: 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.

Had we spoken to Bob, this is what he would have virtually had to say, and, as Dick confirms, it certainly is true.

That is not to say, however, that if the world was different than it is, Bob might not have made a different decision. We could have asked Bob to speculate on this subject but, first, he is too smart to do so and second, we wouldn’t advise him to do so.

Some writers want to catch people in inopportune statements, but that is not the Pundit’s style. We would rather have a friend than a story. And, absolutely no good for Bob could come from talking about this subject.

Of course, things change and, when they do, Bob knows how to reach the Pundit.

Besides, the critique we made was not of Bob, but of Wal-Mart and, as Dick correctly points out, there are real reasons why there is intense pressure on everyone working at Wal-Mart:Wal-Mart has been reporting 4% and less “same store sales,” which is way off their peak years of 8+%, and their stock price has been stuck at $45 to $50 per share for about five years. As a Wal-Mart stock holder, I would expect them to make “step” changes to their model and to update the model to today’s changing consumer. This should be especially true as they are encroaching on and entering the urban areas of the US.

No question that everyone wants to see stronger performance. As Dick well knows, however, the easy part of getting stronger performance is wanting it.

The hard part is knowing how to actually make it happen.

Wal-Mart is an incredible company. Most companies would do anything to have the problems Wal-Mart has and my bet is they will work their way through these issues and succeed on a big scale. Still, the pressure is intense right now.

And that, inevitably, affects the personal decisions of people working at the company, including when to retire and when to stay.

We did, though, use Bob as a kind of vessel through which to talk about Wal-Mart, and if others interpreted that as Dick did, it was a bad idea. The Pundit’s company has a small office north of Chicago and Debbie loves Chicago, so we get there every now and again.

We pledge Bob and Terry a free dinner at the restaurant of their choice as penance. And since Bob will be retired from Wal-Mart by then, he can even accept.

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