Trouble on Aisle 1

Having a great reputation in the community and being a local legend among businesses don’t protect you from the ravages of the rumor mill. Just ask the Ukrop family of Richmond, Va.

Ukrop’s is a family-owned grocery store chain with an ardent following. For loyal patrons, shopping there is not so much a household chore as it is a social event. The company is deeply embedded in the community, sponsoring a number of civic and cultural events. It has been recognized nationally as a great place to work. For many years, Ukrop’s staved off major regional and national grocery chains to remain the top food seller in the Richmond market. And it did so despite being closed on Sundays and refusing to sell alcoholic beverages — counter-intuitive decisions rooted in the Ukrop family’s beliefs and values.

The most recent rankings of grocers’ market shares, however, revealed trouble on Aisle 1. Ukrop’s fell to the #2 position. Then, just a few days later, a local blog reported that the Ukrop family was looking for someone to buy the business. The rumor made the rounds on local social-media outlets and even made it into the newspaper, although the reporter was careful to note the speculative nature of the information. Ukrop’s offered no public comment.

After the story appeared in the newspaper, company president Bobby Ukrop sent a short note to employees in an attempt to restore calm and dispel the rumors. The newspaper posted the note on its website. Comments on blogs and on the newspaper’s website dismissed the note and speculation continues to run rampant.

As of this writing, a cornerstone of the Richmond business community is showing some cracks. It’s an interesting real-time case study in public relations that already offers some valuable lessons:

• “No comment” doesn’t work in the age of social media. In fact, “no comment” didn’t work very well in the age of traditional media, but it really fails today. Early on, at the first rumblings of rumors, Ukrop’s should have decided how it would engage the community and the media — including local bloggers. Engagement does not allow for “no comment.” You can engage without saying much: “We’re aware of the speculation out there concerning the future of our business. We don’t respond to rumors. We choose instead to focus on serving our customers.”
• Be careful what you say. Many commenters on local media outlets are calling for Ukrop’s to say something — either to deny the rumors of its pending sale outright or to acknowledge that it might happen. From a business management standpoint, there is probably good reason for Ukrop’s not to say anything of substance. If the company is engaged in negotiations, public comments could negatively affect the deal. The company has nothing to gain by denying or confirming rumors at this point and there are ways to engage the public and employees without adversely affecting a possible business transaction.
• Let your fans do the talking. Loyal Ukrop’s customers and employees are just as active on blogs and news websites as critics. Of course, they don’t officially represent the company, nor do they claim to, but they jump to the company’s defense against critics. Creating a devoted following is one thing Ukrop’s has done well over the years through great customer service and by nurturing a generally positive work culture. Now those practices are paying off.
• Say something to employees. Bobby Ukrop tried to calm employees and dismiss the rumors in a memo to employees. It is not exactly a shining example of employee communications. He acknowledges that rumors are swirling, but then makes a huge misstep: “Anything I say at this point would just add fuel to fire. For example, I could say that, yes, other companies are interested in buying Ukrop’s. But, the truth is that there have always been companies interested in buying us, so there’s nothing new here. So, I’m not going to comment on rumors…” Well, he just did. Instead, Ukrop should have simply acknowledged the existence of rumors and then immediately refocused attention on the company’s priorities. On the positive side, Ukrop commits to informing employees first if there is anything to say about the company’s direction.
• Don’t expect to control the message. Business leaders want to try to control information, which is one of the reasons so few embrace social media. The truth is, however, that they never had control of information and never will. In the age of social media, the name of the game is engagement. Engage in the conversations about your company where it makes sense. Assess the risks and benefits of saying something publicly, even if you really say nothing at all. At some point, however, accept that the conversation will take place whether or not you are part of it. The rumor mill is as old as time — and time marches on in spite of it.