business news in context, analysis with attitude

Published on: December 15, 2017

by Kevin Coupe

The New Yorker has a piece entitled “Mario Batali and the Appetites of Men” that is an almost proctological examination of the psychology of the celebrity chef-author-retailer, who has been accused of - and pleaded guilty to - sexual harassment.

The story makes it clear that Batali’s appetite for excess never was far from the surface:

“Batali has always in a sense been selling sex. It’s there in his worshipful gazes at ingredients held aloft, his exhortations to his friends, viewers, and dining companions to taste whatever rests on the tongue—to really taste it, to pour your body and brain into it, to concentrate yourself into nothing but a single scintillating bud of physical sensation. It’s there in his body itself, in an abundant, flushed fatness that seems to physically manifest a flagrant rejection of the superego. And it’s there in his language, his voice.”

In other words, Batali was celebrated for an approach to food that bled over into his behavior in a way that is, to say the least, troubling; it was, after all, just a year ago that Batali was on the main stage at the annual (and final, as it happens, though not for that reason) Food Marketing Institute (FMI) convention, talking about the role of food in our lives.

It is ironic, and worth noting as evidence of a double standard, the story says, “that appetites like Batali’s are, for the most part, not permitted to women; neither are bodies like his, with their evidence of hungers fulfilled … The world does not extend to women the courtesy we have granted Batali, that of reserving our condemnation until his indulgences cross the line into abuse.”

It is seen as a good thing that while “Batali’s disregard for boundaries has in the past been a foundation of his mythology, a thing not to recoil from but to admire,” there has been a cultural shift: “In the context of the current #MeToo movement, his behavior is just repugnant.”

You can read the story here, though fair warning: prepare to be disgusted.

To be clear, this isn’t just about ethics and propriety; it also is about business…

Walmart and Target said this week that in the wake of the allegations, they no longer are selling any of Batali’s cookbooks or food products. Even Eataly - which Batali co-owns - apparently has pulled his products from their shelves.

However … Business Insider reports that Amazon, Kmart, and Costco have made so such decision.

By the way … along the same lines … Walmart also announced this week that it has cut ties with PBS talk show host Tavis Smiley, who has been accused of sexual misconduct; Walmart was a sponsor of the TV show, as well as of an upcoming touring theatrical show.

For the record, Smiley has denied the allegations and accused PBS of conducting a sloppy and incomplete investigation, and that he intends “to fight back.”

Still, these are issues to which industry must pay attention, and in doing so must avoid being purely reactive.

It is a cultural moment that is, and should be, an Eye-Opener.

Published on: December 15, 2017

The Verge reports that 7-Eleven is testing a mobile ordering application at 10 of its Dallas stores, making the app available both through Apple and Google.

According to the story, “If you choose delivery, the app will find the nearest participating store and send the order to a third-party courier, which then delivers the goods. Customers can order and pay for snacks, makeup, gift cards, home goods, drinks, and other products through the app. This appears to be useful for neighborhoods with a single, inconveniently located 7-Eleven.”

7-Eleven’s loyalty program - 7Rewards - is supported in the app.

Published on: December 15, 2017

Last week, MNB reported that Google no longer was supporting its YouTube video service for Amazon’s streaming video devices - including Fire TV and the Echo Show - because Amazon was not supporting its video for Google devices, nor selling some Google tech products on its site.

But peace may be at hand.

Bloomberg reports this morning that Amazon “said it will start selling Google Chromecast gadgets again … the standard Google Chromecast video streaming stick, along with the Ultra model that can stream 4K video, will return to Amazon’s online store.”

"We are in productive discussions with Amazon to reach an agreement for the benefit of our mutual customers," a Google spokeswoman said in an emailed statement.

Published on: December 15, 2017

USA Today reports this morning that the National Labor Relations Board (NLRB) has “overturned a controversial Obama-era rule that held franchisees and other large companies liable for labor law violations by franchisees and subcontractors … The NLRB said Thursday a company would be considered a joint employer only if it had direct control over the workers.”

The story notes that “under the joint employer rule, a company such as McDonald’s could be sued by workers employed by the chain’s franchisees for violating safety or other regulations even though the larger corporation had only … The rule also could allow striking fast-food workers to negotiate with McDonald’s to form a union rather than with thousands of franchisees across the country. Similarly, temporary workers could sue the owner of a factory for better pay or conditions rather than the staffing agency that technically employs those workers.”

Published on: December 15, 2017

• Online wholesale club Boxed said yesterday that it “is launching a set of new features it hopes will make shopping easier for customers.

“First up, Boxed is introducing group ordering, which allows shoppers to send links to others to collaborate on building a shopping cart.” In addition, “Boxed is also adding augmented reality to its iOS app. This will let customers see exactly how large these bulk items are before they purchase them — and judge whether they will fit in their pantry. The initiative is starting out with 30 products, but Boxed says it could expand based on customer response.”

And, “Boxed is … launching a Facebook Messenger chatbot as another way to be where customers already are. The bot may suggest reordering items that customers are running out of — which it would know based on a machine-learning algorithm — or to order a new item it thinks they may like based on previous purchases.”

Published on: December 15, 2017

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

• Crain’s Chicago Business reports that “Sears Holdings has started to sell DieHard-branded battery-related accessories like jump starters and battery chargers on amazon.com. It marks the company's latest partnership with the online leader as it aims to reverse a longstanding sales slump” and “follows Sears' move in July to sell Kenmore-branded appliances on Amazon in some markets.”

Be interesting if Amazon just bought the DieHard brand, and became an exclusive seller of the iconic batteries. Sears needs Amazon a lot more than Amazon needs Sears.


• The Associated Press reports that Costco has posted Q1 profits of $640 million, up from $545 million during the same period a year ago, a 17 percent increase. Sales jumped 13.3% to $31.12 billion, compared to $27.47 billion during that same period last year, with same-store sales up 10.5 percent.

Most notably, Costco’s online sales for the period were up 43.5 percent.


• The Wall Street Journal reports that “Americans are spending more than expected this holiday season, fueled by income gains, confidence in the economic outlook, buoyant financial markets and modest inflation. The boost includes in-store and online spending at brick-and-mortar retailers such as Wal-Mart Stores Inc. and Nordstrom Inc., which clocked the largest year-over-year November sales increase in seven years. Home-furnishing stores and electronics-and-appliance stores also logged strong spending numbers, despite competition from online-shopping websites, which also posted robust gains … Altogether, sales at online retailers, brick-and-mortar stores and restaurants rose 0.8% in November.”

Published on: December 15, 2017

• The Trump-era Federal Communications Commission (FCC) yesterday voted to deregulate the telecom and cable industries yesterday, reversing net neutrality rules imposed by the Obama administration.

Net neutrality is essentially defined as a policy requiting all internet providers to treat all websites equally, regardless of size. The FCC decision yesterday essentially rolls back that requirement, saying that those rules reflected the ”heavy hand” of government excess that only served to inhibit innovation and research at telecom and cable companies.

The lines between the two sides of the issue has been fairly specific, with companies like Amazon and Google favoring net neutrality, and companies like Comcast, Verizon, AT&T and Time Warner lobbying for deregulation.

While the FCC has ruled, it is not necessarily a done deal. It seems certain that attorneys general from various states will file lawsuits challenging the FCC decision, and the Boston Globe reports this morning that there is a long-shot effort in the US Senate to undo the FCC decision; however, for at least the moment, that effort is unlikely to go anywhere since it is Democrat-sponsored legislation, and Democrats, at least for the next hear, are in the minority.

Published on: December 15, 2017

Some reactions to Target’s decision to buy delivery service Shipt.

MNB reader Tom Murphy wrote:

Kudos to Target for their brevity and for what might start a bidding war on Instacart.  However, given the horrendous quality and lack of appeal of the Target grocery segment…same day or any day has the same value to me…better yet…NO DAY!

MNB reader Jackie Lembke wrote:

I find it interesting that you mention that with the acquisition of Shipt, Target is trying to create its own ecosystem. At one time, I would have argued that Target had its own ecosystem. It was the store of choice for the young and hip who didn’t want Walmart, but couldn’t afford The Gap. Target lost a lot of that mojo as they tried to be all things to all people. Target missed the target and is now trying to catch up. Good Luck to them, I hope this acquisition is a good move.

MNB reader Ron Rash wrote:

In my humble opinion, Target should have learned better how to sell groceries, and then acquire a delivery service.

Also, I think it highly unlikely that HEB or Costco will want their data in the hands of a competitor... no matter the promises to not share it.




Regarding Walmart’s new initiative that will allow employees to access their wages early, one MNB reader wrote:

No, just NO. Walmart doing this is just setting their employees up for failure. This will have the same effect as the old mining towns in West Virginia. People would go down to the “Company Store” for their needs and the money would be deducted from their “Company Account”. So in effect they sold their souls to the company store. I think there was a song about this.

I suppose it is reflective of my age that upon reading your email, I immediately starting singing “Sixteen Tons” to myself, and thinking about Tennessee Ernie Ford.

Check him out here.

You load sixteen tons, what do you get?
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store…

From another reader, seeing the paid-as-you-go issue differently:

I drove for Uber a bit to earn some extra money. Earlier in the year Uber introduced a program that allows drivers to cash out earnings almost immediately after completing a trip for a small fee. Uber doesn’t withhold taxes so there would be additional steps more traditional companies would have to take to pay employees daily but the technology exists and I am sure many workers would view this as a huge benefit from their employer.




From another reader, Jeremy E. Couture, on another subject:

I enjoyed your Face Time regarding the Tappan Zee Bridge.  Years ago, when I was living in Connecticut, I crossed that bridge almost weekly, as my job had me calling on various supermarkets in New Jersey (Pathmark, A&P, Grand Union – all examples of retailers that knew they had problems, but did nothing about it until it was too late).  It always felt like I was taking my life in my hands crossing the TZ, and that was almost 20 years ago.
 
I also thought of the famous quote from George Romney, which is “There is nothing more vulnerable than entrenched success.”  Your example of Chipotle is right on, but I also thought of Kodak, which invented the digital camera, but sat on it for fear of ruining their own film business, Anheuser-Busch (and others) missing the craft beer movement, and numerous “Big Food” companies who have lost share as smaller players brought solutions sought by consumers to the market a lot faster and, to paraphrase Mad Men, “changed the conversation.”
 
The culprits of this dynamic are numerous (short-term incentive targets, Wall St. pressure on the next quarterly earnings, inertia, not wanting to take on a major capital project), but it’s a really good point that it’s always cheaper (and more effective) to treat early.

Published on: December 15, 2017

In Thursday Night Football action, the Denver Broncos defeated the Indianapolis Colts 25-13.

Published on: December 15, 2017

Let me offer this morning thumbnail reviews of three current movies…

• Mudbound, available on Netflix, is a gritty little movie that takes place in rural Mississippi in the years just following World War II. Based on a book by Hillary Jordan, directed by Dee Rees and written by Rees and Virgil Williams, it shines a spotlight on the racism - casual and virulent, deliberate and accidental - that infected the people and place. I liked this movie a lot, especially because despite the time in which it is set, the issue of race is one that continues to be front and center in American society. Heartbreaking at times, horrifying at others, Mudbound is the kind of movie that is almost pointillist in its ability to portray a specific place and time, and yet create a larger context. Terrific piece of work.

• Three Billboards outside Ebbing, Missouri is a movie that, like its protagonist portrayed by Frances McDormand, seems to be all exposed nerve endings. It is about a mother who, frustrated with the police department’s inability to find a suspect in her daughter’s rape and murder, rents three billboards and uses them to publicly challenge their competence and intentions. McDormand is amazing in the role, alternating from contained rage to open contempt for almost everyone in her town. Woody Harrelson plays the police chief and imbues him with unexpected compassion in difficult circumstances, and Sam Rockwell is excellent as a racist deputy with not-so-hidden motives. If I have any complaint about Three Billboards, it is that the movie is a little long; writer/director Martin McDonagh seems so intent on giving every character a full moment that he allows the film to wander from time to time, and lose momentum. But overall, Three Billboards is a challenging and unusual movie.

• What can i say about Star Wars: The Last Jedi? It almost certainly is going to be a ginormous hit, and much of the film hits the touchstones of action, comedy, science fiction and minor mysticism that we’ve come to expect from the series. As director, Rian Johnson gives the film a distinctive and beautiful look, but as a writer, I’m afraid he’s created a two-and-a-half hour movie that would be a lot better if it were about 30 minutes shorter. There is much about the movie that I liked, but there also are a number of scenes and plot points that wither don’t make sense or seem extraneous. It is good to see Mark Hamill back as Like Skywalker, and a little sad to see Carrie Fisher one last time as Leia. But to be honest, it sags when it needs to be crisp, and offers leaden dialogue when it needs to be jaunty. Ultimately I must admit to being disappointed … though the ending did give me some hope for what comes next.




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

Slàinte!