Page 5 - INSIDE ACCESS NOVEMBER 1ST EDITION

FOOD FOR THOUGHT
Leadership and Business Lessons
Inthe1970s, populargrocerystore,TheGreatAtlanticandPacificTeaCompany, also known as, A&P faced changing customer preferences. People were looking for bigger, superstores with more choices and a whole lot of various conveniences. Rather than accept and strategize based on these findings, Ralph Burger, then CEO of A&P, discarded all these findings believing that A&P's hundred years of success would overcome everything. The company was criticized for being slow to respond tomarketconditions, notonlyinfailingtoconnectandappealtocustomersbut alsoinnotmodernizingitsdatedlook.Burgerhadfailedtoseeand acceptthe truth.
It is believed the grocer's demise can be attributed to its misguided focus and its inability to evolve with the changing market. This led the business to be overrun by competitors like Whole Foods and Kroger that appealed more to customers whose interests had shifted in the past years to include organic and healthy food.
Fifteen years before the existence of Wal-Mart, founder, Sam Walton had been running a chain of independent variety stores in small towns, generating revenues of $1.4 million by the 1960s. Things were fine but in the meantime, Sam kept researching the developments in the retail industry. His research showed that the future of retail lay in 'discount stores' due to changing customer preferences. He saw how some larger stores were generating revenues of more than $2 million from each store compared to $1.4 million from his 15 stores. He visited many discount stores around the country and studied the concept in depth. It was clear that this new model would eventually dominate the market. “Buy it low, stack it high, sell it cheap” was the guiding principle of discounting.
Now, Sam had two choices, stay in the variety store business which would eventually be hit hard by the discounting wave, or open a discount store. He was not afraid of the brutal truth staring him in his face and wisely decided to act on it. He closed his variety stores and opened 'Wal-Mart'. The rest is history.
“You cannot make good decisions without first confronting the brutal truth.”
-Jim Collins
Contributed by Oye Jolaoso
from Top CEOs
Accept the Brutal Truth
PAGE 5 INSIDE ACCESS | NOVEMBER 2020 1ST EDITION