Tractor Supply CMO Kimberley Gardiner on the Power of "Life Out Here." PLUS The K-shaped Economy and Grocery's Shaky Middle

**Michael LeBlanc** (0:07)
Welcome to Remarkable Retail Podcast, episode number 306 I'm Michael LeBlanc.

**Steve Dennis** (0:13)
And I'm Steve Dennis.

**Michael LeBlanc** (0:15)
On this episode, our guest is Kimberley Gardiner, Chief Marketing Officer, Tractor Supply Company, recorded live on the main stage at the CommerceNext growth show last week in the Big Apple.
This interview is the pickup of Steve's opening keynote at the conference, and it was a great way to kick off a great conference. Now, you've known Kimberley for a while, right Steve?

**Steve Dennis** (0:35)
Yeah, actually, we met.
She reached out to me when she was at Volkswagen and wanted me to do a virtual session with her team on Remarkable Retail. So that was, I don't know, five years ago or so. And then maybe a year later, I don't remember the exact timing, she ended up at Tractor Supply. So as people will hear, she's been there about four years now. So yeah, it was great. She's a wonderful executive. And I think people will enjoy her perspectives.

**Michael LeBlanc** (1:03)
It was really great to meet her in person and she shared she's a fan of the pod as well. So thank you to Kimberley for listening and everyone else to tuning in as well. Now, as we said, we're just back from New York and we took an extra day to do some remarkable store visits. So lots to see as always in the Big Apple. I was particularly impressed with our visit to Buck Mason and of all places, the flagship Nespresso Cafe in the Flatiron District. We're going to have lots of little short videos coming up over the course of the summer. Steve, it was a pile of fun. What was your favorite visit?

**Steve Dennis** (1:36)
Well, I guess just in general, as many people would know, I'm sure, particularly downtown and SoHo area, there's just such a concentration of up and coming as well as established, mostly direct to consumer brands.
So there are a lot that I really like. Some of them have been in before, so we didn't necessarily go back there. Buck Mason for sure, lots of people probably don't know that brand. But just in terms of really having consistent, powerful branding, great design, everything kind of hanging together. But we'll create a little suspense. But yeah, we'll have quite a few videos from our trips downtown, as well as a visit to Bloomingdale's to see what is behind their great results in Nordstrom and some general commentary. So we'll be rolling those out over the next couple months.

**Michael LeBlanc** (2:27)
And all of the interviews that we did at CommerceNext, we videotaped them all. So keep your eyes peeled to our YouTube page. Lots of great content coming up over the course of the summer. All right, let's get into the news.
I was thinking about what's going on in the Strait of Hormuz. And it reminded me of some old Bugs Bunny, Daffy Duck episodes. The Strait is open, the Strait is closed. The Strait is open, the Strait is closed. Holding signs up. And there's a lot of risk talking about anything connected to this and as much as events moved pretty quick. Last week we had some stuff going on. But let's talk about what seems to be the broader implications from a retailer's perspective. And what are you observing?

**Steve Dennis** (3:05)
Try to make this quick because I feel like it is Groundhog's Day. It is an episode, like you say, of the Bugs Bunny thing.
Well, overall, as I'm sure most people listening would know, there's good news here in that for the most part, other than the little shooting that went on last Friday, the hostilities are ended. Again, who knows? By the time people listen to this, something could flare up. Oil prices are coming down a lot. Now, that's the crude oil prices, the price at the pump not coming down as quickly, which appears to be something that tends to happen. So we'll see where that goes. But people have called this the art of the MOU instead of the, you know, instead of the art of the deal, because there isn't actually a deal, to the extent that the war is over. It's pretty, I saw somebody say that, this is the only war where everyone has lost. So you go through, you know, Israeli didn't get what they want. You know, the US clearly didn't get, you know, really any of the objectives that were laid out. Obviously, Iran's had death, destruction, et cetera. And the world economy has been hit pretty significantly. So the Strait is very clearly not close to being fully open, but the supply is increasing. So, you know, it's unclear where this will settle out, whether we'll revert back to hostilities and the Strait being completely closed, whether we'll see an uptick in supplies pretty quickly. And obviously, depending on how that goes, that has a lot of implications. One thing just to keep in mind, even though the fuel costs are coming down, they are still, at least at the moment, quite a bit higher than they were going into the incursion, excursion, whatever Trump is calling it this week. The real perspective as an economist, I like Justin Wolfers talks about is, really the way to think about it is not that they're coming down, it's really like where would they have been had the war not happened, and where are they relative to last year? So, one thing to keep in mind, we've talked about a bunch of times, so again, I'll be quick about it, that some of the derivative impacts of high fuel costs, which we see reflected somewhat in the producer price index, so you know what suppliers are experiencing, so fuel is obviously important to input costs. You know, we haven't necessarily seen most of that yet. We have seen Amazon and UPS add fuel surcharges. Another ripple effect that I don't think we've talked about on the pod is several, and not probably just for the fuel cost reasons, but J.Crew, Barnes & Noble, a number of other retailers have raised their shipping minimums.