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Wednesday, July 26, 2017

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Wednesday Morning Eye-Opener: Like A Rock

by Kevin Coupe

First, a confession.

Against all odds, because I normally dislike movie stars with this kind of persona, I've become a really big fan of Dwayne "The Rock" Johnson.

Go figure. I don't really like most of his movies, with the exception of Central Intelligence and Moana (in which he actually sang). But I think he's been terrific, with his gung-ho-for-anything attitude on "Saturday Night Live," and I think he's really good and surprisingly vulnerable on the HBO series, "Ballers."

He hasn't reached the I'll-go-see-anything-he's-in stratosphere in which I put a few actors and actresses - George Clooney, Matt Damon, Julianne Moore and Charlize Theron (can't wait for Atomic Blonde!) But there's time.

I bring all this up because Johnson is out with a new short film - in fact, it is an extended commercial for Apple's Siri voice-activated application. Entitled "The Rock x Siri Dominate the Day," the almost-four-minute spot focuses on all the things that Siri does to enable Johnson to accomplish his goals and define his dreams.

It is very, very funny and even at times self-referentially goofy. And it makes some very good points ... that it would be even better if Siri actually worked as well as the commercial suggests. (And I say this as a devoted Apple customer.)

What really was funny - and even Eye-Opening, to me - was how I kept thinking to myself, imagine how productive Johnson would be if he were using Amazon's Alexa/Echo system.

Still, the video is very good. Not to mention perfect for a summer Wednesday. And you can watch it above.

Enjoy.

Hy-Vee Said To Be Planning Big C-Store In Twin Cities

In Minnesota, the Pioneer Press reports that Hy-Vee "is looking to nudge its way into the local convenience store scene," and is "planning a super-sized convenience store and gas station in Lakeville, promising to offer time-strapped, on-the-go customers plenty of prepared meals and scaled-down versions of its typical produce, dairy and meat departments and Market Grill restaurant."

At 8,880 square feet, the story says, this Hy-Vee store "will be the first of its kind for the big-box retailer."

The Pioneer Press writes that "Hy-Vee already operates 142 smaller convenience stores, including 16 in Minnesota, throughout its eight-state business region. Most of the stores are adjacent to the chain’s supermarket stores or in a nearby lot ... Hy-Vee spokeswoman Tara Deering-Hansen said Friday that the company is scouting other Twin Cities sites for the super-sized convenience store concept."

KC's View: The thing that occurred to me when I read this story is how "supersized convenience store" is such an industry construct - picked up by the media - just like "supermarket," "c-store," and pretty much every other format reference.

I just don't think that customers think that way anymore. They think about relevance and they think about value (with all the things that means) and more often these days they think about values. But not format.

And retailers would be well-served not to think in terms of walls and formats, either. Think customers.

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From MyWebGrocer...

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Conspiracy Theories Arise Related To Chipotle's Food Safety Issues

Business Insider has a story about how Chipotle's newest food safety issues - two confirmed cases of norovirus in customers who ate at one of its Virginia stores, plus rodents falling from the ceiling of one of its Texas units - have "renewed speculation about a conspiracy theory that Chipotle is the target of corporate sabotage."

This theory "claims that parties shorting Chipotle's stock — meaning they stand to gain financially when the chain's shares plummet — orchestrated the illness outbreaks by planting harmful bacteria in Chipotle restaurants."

"Chipotle short-sellers saw their ambitions rewarded with $55 million in less than one day, thanks to this most recent incident," Aaron Allen, a principal at the restaurant-consulting firm Aaron Allen & Associates, wrote on LinkedIn this week. "Though it might seem far-fetched, there are some facts that suggest the near-endless food safety scandals plaguing Chipotle belie something more sinister than simple misfortune."

KC's View: To its credit Chipotle's leadership has not adopted this theory as a defense, and in fact has said that it "did not see any evidence to support them."

Which is the right thing to do. Because unless there is real evidence of a conspiracy - and I'm talking signed confessions from rats sporting Texas accents - this strikes me as a foolish path to travel. There probably were a lot of folks shorting Chipotle stock, if only because another outbreak seemed inevitable.

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From ProLogic Retail Services...



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Taco Bell Hopes To Give Its Sales A Lyft

The New York Times reports on how Taco Bell "is beginning a venture with the ride-sharing company this week that will allow Lyft passengers to request rides that incorporate a stop at a Taco Bell drive-through between 9 p.m. and 2 a.m."

It is, the story says, "an attempt to tap into the trend of young people increasingly car-pooling through apps like Lyft and its larger rival Uber, particularly on nights out with friends. While Taco Bell offers delivery to customers and advertises the locations of its restaurants through the navigation app Waze, partnering with a ride-sharing company represents a new type of 'experience innovation,' said Marisa Thalberg, Taco Bell’s chief marketing officer."

Taco Bell is said to be testing the idea for two weeks in Southern California before deciding if or how to roll it out elsewhere.

There's a video about the service here.

KC's View: It seems to me that this opens all sorts of possibilities. If I were a Lyft driver, I'd be sure to hang out near anyplace that sells pot, on the theory that consumption could very quickly lead to a Taco Bell craving.

The story mentions that a lot of Lyft drivers get requests from passengers to swing into this or that fast food joint, but to this point the rules discouraged it ... not to mention they are justifiably concerned about crumbs, garbage and odors. This test may not solve the latter three problems, but at least the rules may be adjusted so that they are in line with what customers want.

Next step, pot shops. I'm telling you, this could be a big deal.

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From Webstop...

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Worth Reading: The Productivity Conundrum

There is a really good piece in the New York Times that addresses an old platitude - that low productivity gains create slow economic growth.

The story notes that "productivity growth is the weakest it has been since the early 1980s," and that this is seen as "the root cause of slow growth in both G.D.P. and worker pay.

"At least, that is the standard way of thinking about productivity and its relationship to the economy. In a mainstream view, productivity is a kind of magic force that helps explain rising output. New labor-saving inventions come along or new management practices are taken up that miraculously allow companies to produce more output with fewer hours of work."

But - and this is a big "but" - "what if this is the wrong way of thinking about it?" The Times writes: "What if productivity growth is not so much an external force that proceeds in random fits and starts, but is rather deeply intertwined with the overall state of the economy and labor market?

"It’s a chicken or egg problem: Does low productivity cause slow growth, or does slow growth cause low productivity?" And, the Times adds, "What’s particularly interesting is that this diagnosis — though decidedly not the policy prescriptions — has some overlap with the arguments of influential conservative economists."

It is a thoughtful piece, and worth reading here.

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The MNB Walmart Watch

Business Insider reports on how Walmart is using an "easy reorder" app that tracks shoppers' repeat purchases, logs them, and then makes it possible for shoppers to access from a computer or mobile device to place a repeat order for those items.

"I have over 150 items that are in my recorder list," Jordan Sweetnam, vice president of product and customer experience for Walmart e-commerce, tells Business Insider. "I think of it as time management in my household with two kids. Everything is two touches away."

KC's View: This is Walmart dipping its oar into the subscription territory that Amazon has mined so effectively. It is a start ... but I still think that asking me to reorder amounts to imposing a step that I'd rather avoid.

E-conomy Beat

Reuters reports that Chinas e-commerce giant Alibaba "is trumpeting a push into bricks-and-mortar shopping. It’s not alone but the stakes are particularly high for the $392 billion giant led by Jack Ma as it marks a reversal of the asset-light model which fueled its extraordinary profitability."

According to the story, "Ma's so-called 'New Retail' strategy envisions marrying two worlds. The basic idea is that Alibaba will now build some of its own test stores from scratch and upgrade existing brick-and-mortar shops in partnership with established retailers to make them more efficient in both online and offline sales."

There is a sense, the story says, that Alibaba's online revenue model may be "reaching its limits," and the shift suggests that "Alibaba is asset agnostic rather than asset light."

FastNewsBeat

...with brief, occasional, italicized and sometimes gratuitous commentary…

• A new poll conducted for the Grocery Manufacturers Association (GMA) and Food Policy Action Network suggests that "nearly 60 percent of Americans have had a discussion within their household about the meaning of date labels on their food ... The poll findings clearly illustrate that the current range of variations of date labels such as “best by, use by, sell by, use or freeze by,” found on food products around the country is problematic for consumers."

The survey goes on: "The disparate terms cause confusion among Americans about what each of these different labels mean for product safety, and whether a food is still safe to eat. In fact, the survey found that 40 percent of adults say they have had disagreements within their household over whether a food product should be kept or thrown away."

The survey is seen as reinforcing the value of a voluntary initiative launched by the Food Marketing Institute (FMI) and GMA "to streamline and standardize the wording accompanying the date labels on packages to offer greater clarity regarding the quality and safety of products."


• The Boston Globe reports that the Organic Consumers Association has announced that it "found traces of glyphosate in 10 of 11 samples of the company’s ice creams — although at levels far below the ceiling set by the Environmental Protection Agency." Glyphosate, the story notes, is "the herbicide that is the main ingredient in the popular consumer pesticide Roundup ... Rob Michalak, global director of social mission at Ben & Jerry’s, said the company was working to ensure that all the ingredients in its supply chain come from sources that do not include genetically modified organisms, known as GMOs. None of its plant-based ingredients, for instance, come from a genetically engineered crop like corn or soy, where glyphosate is used in production."

The interesting thing about this, at least to me, is that I completely accept the rationale offered by Ben & Jerry's that they're caught by surprise by this and are doing their level best to meet the standards they've set for themselves. They've earned that kind of credibility. Unlike, say, Chipotle, which has no credibility in my view.


• McDonald's said yesterday that its Q2 US sales were up 3.9 percent, fueled by a new line of premium burgers and a $1 soda promotion. Global sales were up 6.6 percent to $6.05 billion. The Chicago Tribune notes that "the U.S. store count is continuing to shrink. The Oak Brook, Illinois-based company had 14,079 domestic locations at the end of the quarter, down about 100 stores from a year ago. Globally, it expanded and had more than 37,000 locations."

There is, apparently, life in the old burger chain yet...


• Smart & Final said yesterday that its Q2 net sales were up 3.9 percent to $1.078 billion, on same-store sales that were up for the period by 1.3 percent.

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From the National Grocers Association...


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From The MNB Politics Desk

FYI...stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

I'm flexible.


• It remains to be seen whether federal regulators in the Trump administration will try to derail the $13.7 billion acquisition of Whole Foods by Amazon, but Politico makes the point that President Trump continues to lash out at the e-commerce giant in the same breaths as he attacks the Washington Post, which is owned in a personal investment by Amazon CEO/founder Jeff Bezos.

In one tweet this week, Trump asked if the Post is "a lobbyist weapon against Congress to keep Politicians from looking into Amazon no-tax monopoly?”

KC's View: It is this kind of story that makes me think that the feds will try to stop the Amazon-Whole Foods deal, though it may have nothing to do with the merits of the acquisition.

Of course, we need to be clear about something - Amazon collects sales taxes in every state that imposes them. And I'm not sure what "monopoly" Amazon has.

Save The Date: An Invitation To Portland-Area MNB Readers

I may have been on vacation the past few weeks, but I've also been getting emails from Portland, Oregon-area MNB readers wondering if I am going to have one of those casual get-togethers that we've done here the past few years. I'm game if you are...

So, let's get together this Thursday night, July 27, at 5 pm, at Nel Centro, located at 1408 SW 6th Ave, in Portland. I'll plan on being there for a couple of hours - if the weather continues to be as amazing asa it has been the past few weeks, on the outside patio - and I hope that any MNB readers who'd like to stop by will do so.

Your Views: Educated Bets

Michael Sansolo yesterday had a column about how he found a new Lidl store in the US to be very strong in terms of consumer education and accessibility. This prompted one MNB reader to write:

Michael, what did you buy at Lidl ? Anything that you bought that would make Lidl a regular "trip"? Lots of PR about LIDL, but can anyone living in these areas tell us if the stores are busy?

Michael responds:

Thanks for your note and I'm sorry I didn't reference my purchases. But because it was a brutally hot day and I live more than 90 miles from this store, I couldn't do much shopping. However, I did buy one box of cereal, a snack item and one of their surprise features--a bicycling shirt.

If I were nearby the store I'd probably shop it regularly for wine (the selection and information was excellent) and some of the grocery items. But I'd check it regularly for the specials.

And the store was moderately crowded, especially for a mid-afternoon on Tuesday. By comparison, the nearby Aldi was a ghost town.


And MNB reader Tom Murphy chimed in:

One of the little things I noted in Michael’s comments was the picture of the Surprise section at Lidl’s…the sign says “Check back every Thursday and Monday for more surprises…”.  Might this also be a smart way to shift some of the shopping from the weekend to other days of the week?  This could certainly help spread the volume a little more evenly throughout the shopping week…which can’t hurt labor management.  It also straddles a lot of competitor ad weeks.
 
And from MNB reader Tom DeLuca:

Hey there! Just piggybacking on Michael’s observations of how Lidl knows how to talk to their shoppers, he didn’t touch on the notion of becoming a Lidl’er.  Like many, in the days before Lidl landed on our shores, I rolled up my sleeves to learn all I could and place bets on what I thought their impact would be. What fascinated me was the discovery that Lidl hosts an online “community” called, “My Lidl”, where Lidl shoppers, affectionately called, “Lidl ers”, can come and post “in the “My Lidl lounge” about all things Lidl. Lidl is listening as well as talking to their shoppers.




Regarding Albertsons saying that it plans to ramp up its investment in grocery delivery, one MNB reader wrote:

Maybe they should think about what they charge for slotting and concentrate on a real market strategy.




Responding to yesterday's story about Walmart "towers" designed to allow people to pick up online orders without actually interacting with employees, MNB reader Chris Esposito wrote:

Why does this remind me of filling out that slip of paper, handing it to the employee and seeing my item come out form the back on a conveyor at Service Merchandise…..

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Industry Drumbeat

"GOOD IS NOT GOOD WHEN BETTER IS EXPECTED"

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism.  These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance;  Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there.  He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's

Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.

Want to make your next event unique, engaging, illuminating and entertaining?  Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.

Now back to regularly scheduled editorial...

Editorial continues after a word from our sponsor...

Industry Drumbeat

Good Is Not Good When Better Is Expected

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism.  These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance;  Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there.  He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's

Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.

Want to make your next event unique, engaging, illuminating and entertaining?  Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.

Now back to regularly scheduled editorial...

Finally, a word from our sponsor...

Industry Drumbeat

"GOOD IS NOT GOOD WHEN BETTER IS EXPECTED"

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism.  These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance;  Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there.  He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's

Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.

Want to make your next event unique, engaging, illuminating and entertaining?  Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.

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