business news in context, analysis with attitude

Published on: October 13, 2017

by Kevin Coupe

It’s Friday, the weekend is about to begin, so I’m devoting this space this morning to the new trailer for Star Wars: The Last Jedi, which is scheduled to be released in December. Mark Hamill is back as Luke Skywalker, along with all the younger actors who helped make Star Wars: The Force Awakens such a rocking return to sci-fi action form a couple of years ago. (A little sadly, Carrie Fisher also is back, one last time, as Leia … she finished shooting the movie shortly before her death.)

This just looks hugely fun and exciting, and I’m ready to buy my tickets right now.

So enjoy. It is an Eye-Opener.

And may The Force be with you.

Published on: October 13, 2017

Barely a year after it opened, the 365 By Whole Foods store in Bellevue, Washington, will close this weekend.

The store, located at one end of an upscale mall in a city just east of Seattle, was the third of the format opened by Whole Foods as an attempt to combat its “whole paycheck” image and attract millennials with a greater emphasis on technology and private label. (The first two were in the Los Angeles and Lake Oswego, Oregon; those remain open, as do three other locations.)

Whole Foods Global PR Director Robin Kelly issued a statement saying that “the decision was made by company leadership prior to the Amazon merger after careful evaluation of both store performance and the site challenges that exist for successfully operating a grocery store … We remain committed to the 365 format, and will continue to sign new leases and open stores in a variety of markets, including Concord in the San Francisco Bay area (opening Dec. 6) and our first New York City location in Fort Greene (opening in early 2018).”

Published on: October 13, 2017

The New York Post reports that in “ a town hall meeting of Jet.com employees at the 3-year old company’s Hoboken, NJ, headquarters,” staffers were informed that parent company Walmart “will have its youngish Jet.com e-commerce unit focus on shoppers in New York, Chicago, Boston and other large cities, while the 55-year-old discounter’s online store will focus on the rest of the country.”

This two-Americas strategy - “Jet.com for urban millennial customers and Walmart for the remainder of the country” - is said to have “left some Jet.com employees deflated. They felt Walmart bought their startup in August 2016 for $3.3 billion to have it lead the discounter’s online charges across the country.” However, the Post reports that others were relieved, since they were worried that their company and culture would “simply be subsumed by Walmart.”

Published on: October 13, 2017

The Food Marketing Institute (FMI) is out with its Grocery Industry Economic Impact analysis, which it says “outlines the food retail industry’s annual economic impact” and points out that “food retailers have a significant economic impact on federal and state economies, employing roughly 4.8 million workers and producing more than $363 billion in economic activity in 2016. Food retailers also paid nearly $168 billion in wages to associates with diverse skill sets throughout the operations of a grocery store.”

At the same time - and this is timely since the Trump administration and the US Congress have pledged to take up tax reform - “the analysis demonstrates that the food retail industry faces a disproportionately heavy tax burden. The $153 billion the industry pays in taxes makes it exceedingly difficult for food retailers to hire new employees, raise wages for current workers, and meet the demands of the new consumer and marketplace.  For each person food retailers employ, they pay nearly $32,000 in taxes.

“Low profit margins compound the burden, as the average food retailer only nets one percent (1%) in profit after accounting for taxes, overhead and other costs, a consistent trend for the last three decades. Like all businesses, food retailers appreciate that they have a responsibility to supply government revenue and support public projects, from roads and bridges to law enforcement. But a tax system that picks winners and losers puts undue pressure on the nations grocery stores.”

Published on: October 13, 2017

There’s a new study out from OnBuy.com and YouGov looking into how issues, social and political affiliations affect people’s consumption decisions.

Among the conclusions:

• “Brands’ affiliation or endorsement of a politician/party/movement was the biggest reason as to why consumers boycotted a brand at 51%.”

• “A product(s) with negative consequences on consumer health as well as racism in a company’s culture/practices were the joint second most cited reasons at 44% each.”

• “Unfair practices related to market dominance was the lowest-ranking factor which contributed to consumers boycotting a brand at just 24%.”

• “‘Harm to the environment’ influenced 42% of consumers decision to boycott a brand. Closely followed by faulty product/products recall, cover ups and corruption – all at 41%.”

However, the study also notes that according to Edelman, only “17% of American consumers would alter their buying behavior depending on a brand’s position concerning certain issues.”

Published on: October 13, 2017

Cleveland Research is out with an analysis, apparently being circulated to its manufacturer clients, in which it analyzes the moves being made by Kroger to change the ways in which it operates and looks to regain sales and profit momentum. Key to the strategy, the Cleveland Research report says, will be less reliance on national brands even as the retailer demands that all its branded suppliers reduce the cost of goods; at the same time, the report says, it expects Kroger to raise selected brand prices “to help enhance gross margins.”

Meanwhile, the analysis says that Kroger plans to put a heightened emphasis on private label, using as its informal benchmark high own-label penetration numbers in Europe. The retailer is said to be persuaded by blind taste-testing that its private label flavor profiles are superior to those of national brands.

In addition, the report says, “Slotting will be collected for appropriate warehouses. Swapping out flavors is considered a new item and does require slotting. Only size and formula changes to same flavor item is excluded.”

Published on: October 13, 2017

Variety is reporting that Roy Price, president of Amazon Studios, has been suspended immediately and indefinitely after he was accused of sexual harassment by Isa Hackett, an executive producer on Amazon’s original series “The Man in the High Castle.”

The original allegations about events that took place some two years ago were made public last August, but have gained new attention and currency in the wake of the sexual harassment scandal that has engulfed producer Harvey Weinstein, who has been accused of multiple incidents of harassment and assault, prompting his firing by the company he co-founded and an investigation into his behavior by the New York Police Department.

Price has not commented on the charges. Weinstein has simultaneously concede that he has behaved badly, denied he raped anyone, and has threatened to sue the New York Times, which broke the story of the allegations and payoffs he made to actresses to insure they would remain quiet.

Amazon has said in the last week that it is re-evaluating production deals that it has with the Weinstein company for two new TV series.

The Variety story notes that one of Weinstein’s accusers, actress Rose McGowan, has tweeted that “a top-level Amazon Studios executive had rejected her claims that Weinstein had raped her.”

And, Variety writes: “The Amazon Studios president’s departure comes amid renewed sexual harassment allegations and multiple signs that Amazon and others in the industry had withdrawn their support from the embattled executive. Insiders have speculated for months about Price’s possible departure from his role as head of Amazon’s original-video arm. Multiple agents and producers who spoke to Variety in recent weeks speculated that such a departure may come soon.”

Published on: October 13, 2017

• AdWeek has a story noting that the announcement that Target plans to make its inventory available online via Google Express sets up an unusual confluence of rivals, since Walmart also is working with Google Express. So, for that matter, are Costco, Kohl’s and Walgreens.

But, since “Amazon’s dominance continues to grow, stealing shoppers away from brands’ ecommerce sites,” it has created an opening for “an intriguing partnership” that shows how “retailers could be more willing to put their differences aside and work together to fend off Amazon’s encroaching competition. While Google said that it will keep the two partnerships separate from a data-sharing perspective, the deals show how major retailers are willing to back the same initiatives for the sake of shaking off Amazon.”


• Ahold Delhaize-owned Ahold USA has announced its rolling out of “innovative ways to personalize and digitize the shopping experience,” saying that these “digital growth strategies include significant investments in new digital tools including relevant digital coupons, new websites, mobile app improvements, and a new recipe center.”

To this point, the company said, it has achieved some significant benchmarks: “One million new digital users and counting over last year” … “new ‘Load to Card’ Digital Coupon activations up 179%” … “76% increase in monthly app users and tripling of mobile app downloads” … and “more than “one million social media followers across platforms.”


• USA Today reports that Amazon plans to hire 120,000 temporary seasonal workers for the end-of-year holiday shopping season, almost doubling its workforce in its warehouses for the period. The story notes that this “about the same as 2016, but the company has added thousands of permanent positions since then at dozens of fulfillment centers, sortation facilities and customer service locations.”

Published on: October 13, 2017

• The New York Times reports that “Vegemite, the classic condiment found on breakfast tables in every corner of Australia for nearly a century,” and which “has long had an unassailable place in Australian culture,” has “released a new and more expensive version of the product this week, raising questions about whether the brand had abandoned its humble roots in favor of a more affluent demographic.

“The new variety, Vegemite Blend 17, is sold in achingly artisanal packaging that includes an unnecessary cardboard box, a gold-colored lid and a price tag more than double that of a traditional jar, coming in at 7 Australian dollars, or nearly $5.50.”

Published on: October 13, 2017

…will return.

Published on: October 13, 2017

First, in Major League Baseball…

In the fifth and deciding game of the best-of-five National League Divisional Series, the Chicago Cubs held on to beat the Washington Nationals 9-8. The Cubs will now play the Los Angeles Dodgers in the best-of-seven NL Championship Series, which begins on Saturday,.

Tonight, the New York Yankees face off against the Houston Astros in the first game of the best-of-seven American League Championship Series.



Also last night, in the National Football League, the Philadelphia Eagles defeated the Carolina Panthers 28-23.

Published on: October 13, 2017

Count me among the folks who were very excited for Blade Runner 2049, the 35-years-in-the-making sequel to the classic science fiction film directed by Ridley Scott and based on Philip K. Dick’s “Do Androids Dream Of Electric Sheep?”

I was a big fan of the original, having seen it when it first came out and then watched nit various times at home. Blade Runner was a film that was a lot more influential than it was successful, at least when it was first released; Scott’s unique combination of science fiction, film noir, and hardboiled detective fiction has served as a kind of template for all sorts of dystopian films and TV series, though I think it is fair that few have done it nearly as well and nobody has done it better.

Despite the fact that I’d seen the original several times, I decided to watch it again just hours before I wanted the sequel. And I made sure to watch what is called “the final cut;” Scott has offered several versions over the years, not having been satisfied with the studio-approved version that first was released.

The original is a model of crisp moviemaking - less than two hours long, a fascinating mix of spare storytelling and voluptuous art direction and physical design, loaded with subtext and below-the-surface heat delivered by an amazing cast - Harrison Ford, Sean Young, Rutger Hauer, M. Emmet Walsh, Edward James Olmos, Joanna Cassidy and Daryl Hannah. For those of you unfamiliar with the original, Ford plays Rick Deckard, a 21st century detective who hunts down “replicants,” androids who have begun rebelling against their use as slave labor; the movie explores what it means to be human and to have a soul, but never dawdles over these questions as the plot steamrolls along.

(One interesting observation - made in 1982, Blade Runner was set in 2019, and while it was prescient in some of its observations about a culture in which vast numbers of people are seen as simple commodities by the rich and powerful, it got a lot of stuff about technology wrong. Flying cars are not common, and in the movie there’s no suggestion about the degree to which things like computers, flat screen TVs and smart phones have become real-life everyday tools.)

I’m not sure, in retrospect, that watching the original first was the best idea, because the sequel - which is quite good in many ways - struck me as being ever so slightly narratively flabby. It comes in at almost three hours long, which is almost 50 percent longer than the original. Director Denis Villeneuve had big shoes to fill (Ridley Scott just produced the sequel), so I’m not sure I entirely blame him for this. After all, he didn’t want this to turn into 2010: The Year We Make Contact, director Peter Hyams’ little remembered sequel to Stanley Kubrick’s 2001: A Space Odyssey; the sequel would be a pretty good movie on its own, but it was following a classic, and it was an almost impossible task.

Anyway … it is better that I not tell you very much about Blade Runner 2049, except to say that Ryan Gosling is excellent as a blade runner who still is hunting down recalcitrant replicants, Harrison Ford is back (and great) as Deckard, and the theme remains the very nature of humanity. 2049 doesn’t remake the original story, nor does it exploit it or serve as a simple homage … it actually advances the story and its themes while seeming very much original. While I may not be nuts about the length, I liked it very much, mostly because it actually is about something. Beyond that, I’m not going to be the one who exposes the secrets of Blade Runner 2049 - better to go in a little bit blind, and let its considerable pleasures come to you in waves.




That's it for this week. Have a great weekend, and I'll see you Monday.

Sláinte!!