LETTERS TO THE EDITOR 1996-04-15

Assessing Fleming

I would like to take issue with a few of the opinions you expressed in the "Aisle Watch" [editorial opinion] in SN's March 25 issue regarding the Texas jury's verdict against Fleming.

I am a 44-year-old independent supermarket owner in the Nashville [Tenn.] area and a Fleming customer. I have been in the grocery business for almost 30 years. I also worked for Fleming (Nashville division) for three years as director of retail development just prior to purchasing the store I own presently.

I agree with you on several of the points you made in the [editorial]. I agree that the jury's damage judgment was ridiculously high (not surprising these days). I also agree that David's Supermarkets should bear at least 51% of the responsibility for their plight. I very strongly disagree with your assessment that Fleming merely engaged in "business as usual" and that everybody does it, therefore nothing is really wrong with Fleming's conduct in this case. Fleming has for decades engaged in the practices that were the heart of the suit in the Texas case. The Nashville division of Fleming also builds inside margins into private-label product as well as employing a dozen other "inside" tactics to contribute to their bottom line. The real problem with this method of doing business is that there is a conscious effort on the part of Fleming employees to conceal these efforts from their customers. You may not find such a statement in the Fleming employee manual, but it is definitely part of the culture. For the Fleming staff, these issues are like the crazy aunt kept in the attic that no one talks about.

Near the end of the [editorial] you wrote that any retailer could merely change suppliers if [they are] unhappy with Fleming. Not so! Fleming never extends any significant support service (loan, lease guarantee, etc.) to any retailer without obtaining a supply agreement that binds the retailer to purchase product from Fleming. Frequently, this leaves the retailer with no choice. [The retailer] must either purchase product from Fleming or go out of business because finding other lenders or lease guarantors is impossible. In my case, I have a very small loan from Fleming (less than 25% of my inventory value), yet I was required to sign a supply agreement. Fleming, on the other hand, maintains the right to do whatever it wants. Fleming can (and does) own and operate competing supermarkets (Mega Market). Fleming can (and does) supply product to my other competitors (Wal-Mart), yet I cannot make significant purchases from companies other than Fleming -- even if the price and quality is superior -- without violating the supply agreement.

I believe many of Fleming's business practices do constitute fraud.

I sincerely hope Fleming is not destroyed by this verdict and the many yet to come, but I do hope that Fleming's people will take an honest look at themselves and their business practices. I have been disappointed to see Fleming officers defending, up to this point, all that they do -- especially when a lot of it is indefensible. Fleming can come out of this a better company. The choice is Fleming's. -- BILL TIDWELL owner Piggly Wiggly 46 Hendersonville, Tenn.

Judging the Verdict

To the Editor:

I must disagree with the angle of the "Lawsuit Folly" Aisle Watch column in the March 25 issue, even though I couldn't agree more that lawsuits and our legal system are out of control. [Judgments] do lack common sense all too often.

But placing blame on David's Supermarkets for not seeking another wholesaler is wrong.

Reading the article outlining the suit and its findings in the same issue, I did not get the impression the issue was wholesaler inside margin at all. Based on memos that surfaced in the investigation, it seems to me there was willful and intentional fraud and deception that went on. The jury award may indeed be excessive, but based on what I've read about the case, guilty is the correct verdict. -- STEVE BRACKETT unit manager Kroger Co. Atlanta

Remembering

To the Editor: I just learned we have lost our founder, Mr. George Jenkins.

When I got the word, all that I could think about was how the world has lost a man of great vision, wisdom and compassion. He was a leader, an example and an inspiration to us all. In whatever business direction the company decided to move, his associates came first and were always treated fairly and with dignity. Prior to his stroke, his door was always open to us all, from the person bagging groceries in the store to the most senior vice president. He made time for us all. He is a legend in the industry. I and all of his associates at Publix Super Markets will miss him. -- JIM STEWART business systems analyst Publix Super Markets Lakeland, Fla.