business news in context, analysis with attitude

Published on: August 1, 2017

by Michael Sansolo

A man I never met and most of you have never heard of died recently. His name was Jim Vance and his death was mourned far and wide in the Washington, DC, metropolitan area where I live because for decades he was a household figure.

Jim Vance, you see, was the anchor of a local news broadcast and he was so popular that his ratings usually outranked all the competition combined.

In hearing all the tributes about him, what came through was his credibility - hardly an easily found commodity these days. No matter what the topic - news, politics, sports or even fashion - he came through as real and believable.

The secret to his popularity was pretty simple: People trusted him. As was said after his passing, people watch the news to actually watch the people delivering the news. People loved and trusted Vance and never stopped watching.

In our hyper-competitive world, there’s some wisdom to be gained from that. It may be that people will like shopping with people who they trust and who seem to have the credibility to help them understand complex issues and solve life’s problems.

For instance, consider the a story that the Washington Post ran last week, contradicting one of those scientific “facts” that I thought I understood.

The story concerned the use of antibiotics and how much patients really need take. The wisdom I’ve always heard (and likely you too) is that it’s important to always take a complete dose of any antibiotic. Anything less allows the remaining bugs in the body to grow stronger by surviving and, just like that, one has helped create superbugs.

Apparently we’re all wrong. The conventional wisdom on antibiotic use came from a speech given long ago by scientific legend Alexander Fleming. Only Fleming’s comments, according to current scientists, were based on anecdotal evidence and not scientific fact and study. Kind of like some of the rules my mom used to give me.

The emerging wisdom among today’s scientists is that some bugs definitely need the full dose, but many don’t. At least that’s the emerging idea and I’m sure it will be contradicted soon.

Here’s why I think this is relevant. Shoppers are constantly bombarded with news like this update on antibiotics. The vast majority, like me, aren’t scientists and really don’t understand what we are being told. Information comes from media, Facebook posts and countless other directions (even our moms) and somehow we are supposed to sort through it all and make sense.

Frankly, we don’t have the time or know-how. What’s more, we are all getting increasingly skeptical. Too often, we’ve been told that something is the best or worst thing for us to eat only to learn months or years later that we had it completely wrong.

The bacteria may not grow, but our confusion and skepticism sure does.

And in that knowledge gap we may find opportunity. More than ever businesses need find a way to be a trusted partner to our shoppers. We need provide them credible and consumable information that helps simplify the complex and offers usable guidance on a range of issues. Plus we need to position knowledgeable people in our companies as their trusted resources on a range of issues from recipes to health.

After all, the more reasons they have to trust us, the more reasons they have to shop us.


Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.

Published on: August 1, 2017

by Kevin Coupe

A refrain we hear frequently here on MNB - not from everyone, but from a coterie of MNB readers - is that one of the real problems with e-commerce is that it creates a population of anti-social customers who are too lazy to leave their houses, go shopping, and interact with other people.

I've never agreed with this characterization. I think there are some people who will take advantage of online options to be anti-social. Quite frankly, I think they'd probably be anti-social, anyway.

But there were two stories in recent days that I think spoke to the alternative view - that e-commerce actually can empower people to live better, happier more fulfilled lives. (To be clear, e-commerce doesn't create better, happier, more fulfilled people. They have to do that themselves. But it can open the window...)

One story was in the New York Times, and it didn't even focus on e-commerce. Rather, it was about a new study published in the Proceedings of the National Academy of Sciences, and concluded that "spending money to save time may reduce stress about the limited time in the day, thereby improving happiness ... For greater life satisfaction, according to the study, order takeout food, take a cab or pay someone to run an errand. This was found to be true regardless of income."

Go figure. Maybe money actually can buy happiness.

To be sure, the story concedes that some people find it easier to hire people to do these things than others. But there is another implication, I think - that in many ways, e-commerce democratizes the ability to outsource certain tasks; Amazon, after all, is not a service reserved for the affluent.

Which brings me to the second story, in Forbes:

"The answer to whether Amazon makes us all richer or not is obvious--yes, it does, without a doubt," the story says. "Things get a little trickier when we try to think about how it makes us richer. That things are cheaper when we buy them from Amazon, at least sometimes they are, does indeed make us richer. We've now got whatever piece of electronic tat it is that we wanted and we've also got some money left over: we're richer. However, there's a second effect which is a little harder to calculate. That Amazon is cheaper than many other retailers means that prices at all other retailers have been competed down."

But it is more than just money.

The Forbes piece references research from economist Michael Mandel, who "has offered up an intriguing third manner in which Amazon makes us richer. We're richer in time as a result of its existence. And we should note that time is the only truly non-renewable resource that we have." Mandel also says that e-commerce enables US households to save a total of 64 million hours a week ... hours, I've long argued, allow us to do things like cook, jog, play tennis or golf, play with our kids, coach Little League, read a book, watch a movie, take a walk with a spouse, or hundreds of other things that have nothing to do with shopping.

This is not to suggest that all shopping in physical stores is a waste of time. Far from it.

But I would submit that there is no moral superiority to be ascribed to people who go to physical stores. And it is up to bricks-and-mortar retailers to make sure that their stores are compelling, experiential, relevant and resonant, reflective of a core value proposition that people can't find elsewhere.

In other words, they have to make sure that for whatever the reason, their stores are Eye-Openers.

Published on: August 1, 2017

The Wall Street Journal has a story about how "commercial square footage of retail food space per capita last year set a record, with 4.15 square feet of food retail per person, according to CoStar Group, a commercial real-estate firm, nearly 30 times the amount of space allocated to groceries at major chains in 1950."

The story describes this as leaving the country "piled up with grocery shelves as consumers are shifting from big weekly shopping trips to more snacking and to-go meals. The mismatch has flattened retail sales and leaves the industry vulnerable to a wave of closures that some executives, bankers and industry experts think is coming soon."

There are a lot of moving pieces in this economic construct. There are not just more food stores, but also more stores selling food. The marketplace isn't just saturated, but also dealing with consolidation on both the retail and supplier sides. And, of course, there is the online competition - one analyst refers to it as an 'Amazocalypse' - which means that shoppers have other alternatives, which only heightens the level of competition fighting over the consumer dollar.

Published on: August 1, 2017

The New York Post reports that Staples may sell all of its 1,500 bricks-and-mortar locations to Office Depot - the same company that it wanted to acquire before federal regulators stepped in to prevent the deal on antitrust grounds.

The deal would come after Staples agreed to be acquired by private equity group Sycamore Partners for $6.9 billion.

Here's how the Post frames the story:

"Staples revealed in a public filing last week that on June 5, a bidder it called 'Party A' offered between $625 million and $700 million for Staples’ North American retail locations.

"'Party A' was Office Depot, which was angling to rebrand the Staples locations under its own name, according to a source close to the situation. Staples shunned the bid, agreeing instead on June 28 to go private under Sycamore in a buyout valued at 10 times the price of Office Depot’s retail deal. Indeed, Sycamore Partners paid a premium not for Staples’ stores, but rather to control the company’s lucrative business selling paper, pens and ink cartridges to mid-size and big corporate clients.

"As such, sources say Sycamore has signaled a willingness to offload the stores which, like much of the retail sector, are struggling as shoppers increasingly shift their buying to online rivals led by Amazon."

Published on: August 1, 2017

Marketing Daily reports on new research from Parks Associates indicating that "just about half of U.S. broadband households are willing to share their data and device control in exchange for discounts on electricity. Indeed, the findings are pretty much stable across the range of device ownership: 51% of smart thermostat owners, 50% of hot water heater owners and 48% of smart clothes dryer owners all said they’d be willing to share data and control in exchange for electricity discounts."

The survey goes on to suggest that "consumers are more likely to share their data in exchange for a variety of non-monetary incentives like warranties, product improvements, product education and remote technical support, rather than intangibles such as product recommendations or simplified ordering. As such, service providers and utilities should work to make sure their messaging aligns with those consumer priorities."

Published on: August 1, 2017

Great piece in the New York Times about Dan Bell, a filmmaker who has created something called the "Dead Mall Series" on YouTube, in which he has chronicled many of the malls around the country that have fallen on desperate times.

The Times writes that "though upscale malls in wealthy communities continue to do well, Mr. Bell isn’t interested in those; he visits dead malls, and among the deadest are ones in working-class and rural communities. Filming at the Bristol Mall in Bristol, Va., Mr. Bell discovered 10 stores that remained open in the entire center; the rest of the retail spaces sat empty behind lowered metal gates."

There is plenty of material for Bell to work with: "A report issued by Credit Suisse in June predicted that 20 to 25 percent of the more than 1,000 existing enclosed malls in America will close in the next five years," the story says.

The Times piece, and the YouTube videos, are elegiac in tone, and worth reading here and watching here.

Published on: August 1, 2017

CNBC reports that a new poll looking into what Whole Foods shoppers want to happen when and if the company is acquired by Amazon, the top response was "cashier-free checkout."

Also high on consumers' lists - "lower prices" and "in-store pickup for Amazon purchases."

The story notes that if Amazon does try to remove cashiers from the checkout process - something that it is toying with, based on its still-evolving development of the Amazon Go store in Seattle - the impact could be significant in terms on job loss in the US.

Published on: August 1, 2017

• Reuters reports that Walmart "has announced changes to its food leadership team in an internal memo, as it prepares for increased competition with grocery rivals and remains caught in a price war."

According to the story, "Some of Wal-Mart's key changes include one for Shawn Baldwin, senior vice-president and general merchandise manager for produce and global food sourcing, who will focus on a new initiative for Hispanic customers. The memo did not elaborate on the initiative.

"Martin Mundo, who has worked in Argentina and other countries for Wal-Mart, will replace Baldwin."

And, "Wal-Mart will also split leadership in its bakery and deli departments, the memo said. Kerry Robinson will be responsible for the bakery business but will no longer oversee the deli business. Tyler Lehr will be responsible for deli services."

Published on: August 1, 2017

• The New York Times has a story today about how Amazon's expanding influence on the culture and the economy is "giving rise to a whole new side of the advertising industry."

According to the story, "As more people live large portions of their lives in Amazon’s ecosystem, ad agencies are increasingly offering specialized services to help brands take full advantage of the company’s universe.

"That means adding flourishes like recipes and magazine-style images to product pages, coming up with creative ways to get customers to post reviews on Amazon and plotting how companies can best connect with people who are using devices like the voice-activated Echo.

"And Amazon itself, aware of its growing power, is encouraging companies to buy more ads through its own media group."

Published on: August 1, 2017

• Food Lion said yesterday that it has completed its $178 million capital investment in 93 Greensboro, North Carolina-area stores, largely focused on fully remodeled units, price reductions, expanded assortment and enhanced customer service.


• USA Today reports that "a group of high-profile Democratic Senators, led by Sherrod Brown of Ohio, wrote letters to the nation’s top retail CEOs Monday, demanding they crack down on trucking companies that turned their workers into modern-day indentured servants." The actions came in response to an investigation "that found port trucking companies in California forced their drivers into debt, pressured them to work up to 20 hours a day and paid them pennies per hour."

Published on: August 1, 2017

Sam Shepard, whose plays about family dysfunction almost invented the Off Broadway segment of the theater, and whose plays include "Buried Child," which won a Pulitzer Prize, and "True West," passed away yesterday at age 73. Shepard was said to be suffering from complications related to amyotrophic lateral sclerosis, or Lou Gehrig’s disease.

Published on: August 1, 2017

We had a story yesterday about an experiment being conducted that hopes to prove that there’s even more to that cork pop than meets the eye: Does the sound of a 'pop' actually make the wine taste better?

One MNB reader responded:

Many of my friends view me as a bit of a wine snob…a lot a wine snob! I am totally with you about the romance of the cork.

I have had a few high end cabs that have screw caps. The best examples are Plump Jack, and Cade, both from the same family of wines. If you buy a two pack of their reserve ($200- $300+ a bottle each) you will get a cork and a screw cap. I have to say if you don’t know wine, your guest look at you cross eyed when you open the screw cap of this wine versus the cork option.  I would agree that most tests point to screw cap for maintaining long term quality versus cork or synthetic.

For me the cork is the choice, even though you can lose a beautiful bottle...




Yesterday, MNB took note of a Fox Business interview with former Walmart US CEO Bill Simon in which he said that he won't be buying Amazon stock anytime soon, that "there’s only one direction for that stock to go ... and I think everybody knows that. I can’t tell you when it’s going to happen, but it’s inevitable." Simon continued a series of TV appearances in which he has been highly critical of Amazon, suggesting that there is no way its growth is sustainable.

One MNB reader responded:

Bill Simon sounds worried, not confident it seems to me, as well he should be.




Finally, we referenced a Business Insider report yesterday that "Chipotle is planning to test something that customers have been seeking for years: a drive-thru window ... Up until this point, Chipotle has been one of the few national quick-service chains not to offer a drive-thru option."

I commented:

The thing is, this is a really good idea because people will be on the road and can get to the emergency room faster after eating food bought at Chipotle.

Too harsh? Too soon?

MNB reader Jackie Lembke responded:

The comment was probably a bit harsh and too soon, but it still made me laugh.

That's enough for me.