business news in context, analysis with attitude

Published on: December 4, 2018

by Michael Sansolo

As you might have noticed, we have a thing here at MNB about metaphors. Kevin and I believe there are countless lessons that we can glean from all kinds of things happening around us especially movies, old television shows and even (as I wrote about last week) the Macy’s Thanksgiving Parade.

But sometimes things are much simpler and straightforward. Such as talking to the consumer in language they understand and about topics that they might actually discuss.

Incredibly, this all starts with the Washington Post, the local newspaper in the area where I live. I still love reading a newspaper in paper - antiquated behavior, yes, I know - because it gives me the incredible range of ads and other items that make up a newspaper. Call it texture. Call it context.

It should surprise no one that the Washington Post always focuses heavily on politics and the issues surround government. And in many editions, there are ads for highbrow symposia on policy issues such as foreign and domestic affairs, crime and punishment, education and more.

In the midst of that, Albertsons-owned Safeway - still an important local chain - is nailing it.

Just yesterday the supermarket chain ran a simple ad explaining the difference between broccoli and broccoli rabe and explaining why people comfortable with the former might want to try the latter.

Similar ads have run in recent weeks tackling topics such as bananas vs. plantains.

Clearly, these aren’t highbrow discussions, but to my eyes they are simple and perfect. They take an issue that clearly most shoppers (me included) don’t fully understand and they are educating us to make better decisions. When we do that, we make our shoppers feel smarter and better enabled to make choices that might broaden their recipes and family eating habits.

The broccoli rabe ad for example offers up information on how the product tastes and how to best prepare it. Plus it provides a link to a website to provide further education.

With a simple series of ads, Safeway is helping shoppers find products they’ll feel good about buying, eating and giving to their families. As the ad explains, we’re all more interesting in produce these days, but we don’t sample the incredible variety of products because we don’t understand how to select, serve and consume so many of these items.

Let’s remember that sometimes providing straightforward information is simply good for shoppers and the stores that sell them products. Call it texture. Call it context. Call it plain talk.

No metaphor needed,

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: December 4, 2018

by Kevin Coupe

The New York Times has a lovely little story about a new pop-up store in New York City where people can go in and buy stuff (sleeping bags, blankets, solar lamps and onesies, for example … all of which is then shipped to “refugees in faraway camps.”

According to the story, “The store, Choose Love, is a New York offshoot of a successful pop-up that was created by the nonprofit group Help Refugees and made its debut in London last winter. Help Refugees was founded in 2015 to deliver donations to refugees in Calais, France, where displaced people from Syria, Afghanistan, parts of Africa and elsewhere struggling with violence were trying to make their way to Britain. The charity now distributes items to and serves more than 80 projects in Croatia, France, Greece, Iraq and Turkey, among other places.”

Last year, the Times writes, “the London store and its online equivalent raised nearly $1 million, which helped provide refugees with 800,000 meals, accommodations for 3,556 nights, 25,000 winter items for adults, and 100,000 essential items for babies and children, including 77,000 packages of diapers, according to Choose Love.”

An Eye-Opening example of what is possible when people think less about themselves and more about people who actually need help.

Published on: December 4, 2018

Bloomberg has a story about how some online retailers, facing increasing “bounce rates” that chart how often people abandon their online carts or e-commerce sites because of various levels of dissatisfaction, are “testing new ‘Customer 360’ software from Salesforce.com Inc. and upstart rival Freshworks Inc. that lets them build a Facebook-style profile of each shopper, the better to understand what they want and how to keep them happy and clicking ‘pay’.”

This software, the story says, is “designed to give them a 360-degree view of shoppers. The idea is to bring together on one dashboard data from the traditionally siloed marketing, help-desk and sales departments.”

These profiles then enable the software to create “chatbots” that are “increasingly ubiquitous and getting better at holding a meaningful conversation with customers. And behind the scenes retailers are training customer-support people to act more like traditional salespeople with the expertise once available only at top brick-and-mortar establishments.”

Published on: December 4, 2018

Bloomberg reports that Walmart “is rolling out 360 autonomous floor-scrubbing robots in some of its stores in the U.S. by the end of the January, it said in a joint statement with Brain Corp., which makes the machines. The autonomous janitors can clean floors on their own even when customers are around.”

The story notes that the robots, “which look like a cross between a miniature Zamboni and a motorized wheel chair, already scrub floors at airports in Seattle, San Diego, Boston and Miami.”

Bloomberg notes that this is part of a broader strategy at Walmart, where the retailer “has already been experimenting with automating the scanning of shelves for out-of-stock items and hauling products from storage for online orders.”

Unsurprisingly, labor forces criticized the move.

Making Change at Walmart put out a statement saying that “Walmart’s move to autonomous floor cleaners is not about better serving customers and workers. This latest job-killing venture has the potential to destroy over 5,000 maintenance jobs in the U.S. if it is implemented in every Walmart store. That’s 5,000 salaries back in Walmart’s pocket.

“Walmart needs to clarify that this partnership is not just an attempt to automate thousands of hardworking Americans out of a job.”

Published on: December 4, 2018

Bloomberg reports that a new study from menu researcher Datassential suggests that fast food not sold on chains’ value menus is actually getting more expensive.

According to the story, the study says that “median fast-food hamburger prices have jumped 54 percent over the last decade to about $6.95 … Chicken sandwiches are up 27 percent. Both surpass overall U.S. price inflation during that same time.”

Experts seem to believe that they have to increase prices in order to compensate for not just higher ingredient costs, but also for the higher wages and benefits that they have to pay these days in order to attract employees. While these chains are being aggressive about their value menus - largely because of a decline in fast food consumption connected to, go figure, an increase in at-home cooking - they then are increasing prices on other items that people might want to order once they’ve been lured through the doors.

Published on: December 4, 2018

Bloomberg reports that a federal court has scheduled a hearing for later this month at which CVS will have to justify its already-completed $68 billion acquisition of Aetna … and if they can’t, he could order them to keep their operations separate.

Here’s how Bloomberg frames the story:

“U.S. District Judge Richard Leon in Washington set a hearing for Dec. 18 where he will consider ordering the companies to keep their assets separate until he weighs approval of the antitrust settlement with the government, a process that could take months.

“The ruling complicates CVS’s plans for the Aetna acquisition, a $68 billion deal that creates a health-care giant with a hand in insurance, prescription-drug benefits and drugstores across the U.S. CVS closed the takeover on Nov. 28 after obtaining final regulatory approvals and now faces the prospect that its plans for the combined company will be put on hold.”

Background from Bloomberg:

“The Justice Department cleared the deal in October after requiring the sale of Aetna’s Medicare prescription-drug plans to WellCare Health Plans Inc. The sale is intended to address the government’s concerns that the merger would otherwise harm competition.

“A federal law known as the Tunney Act requires court approval of settlements the Justice Department reaches with merging companies to resolve competition problems. The law doesn’t prohibit companies from closing and integrating operations while the settlement is considered. The risk is that a settlement is rejected, requiring revisions to the agreement or the unwinding of the merger.”

Published on: December 4, 2018

The Gothamist has a story about how in New York, “the largest union town in America, the arrival of a virulently anti-union company has riled up plenty of progressives. There have been rallies and protests over Amazon’s decision to plop a new campus, with as much as $3 billion worth of city and state subsidies, in Queens, and leading the way has been the influential Retail, Wholesale and Department Store union and their voluble president, Stuart Appelbaum.”

The thing is, the Retail, Wholesale and Department Store union may be largely on its own … a fact that illustrates the degree to which the union movement has fragmented.

“Amazon won’t be landing in New York without labor help,” the Gothamist notes. “One of the state’s most prominent unions, 32BJ SEIU, is in support of the deal, as is the Building and Construction Trades Council of Greater New York, a close ally of Governor Andrew Cuomo.

“Other leading unions not impacted by the deal, like the United Federation of Teachers and 1199 SEIU, the state’s largest union, have been silent. As in past labor battles, the unions affected most are left to fend for themselves while others watch on the sidelines - or pursue a course that puts them in direct conflict with their allies in the labor world.”

Published on: December 4, 2018

• CNet reports that Amazon Prime members “purchased more than 2 billion items on the site with one-day or faster delivery” so far during 2018.

The most popular item sold on Amazon Prime Now - bananas.

Amazon says that “among the fastest Amazon Prime Now deliveries clocked this year were a Nintendo NES Classic delivered to a customer in Kirkland, Washington, and a High Sierra Loop Backpack delivered to a customer in Charlotte, North Carolina -- both in 9 minutes after the order was placed. The most popular items among Amazon Prime subscribers were its own Fire TV Stick with Alexa Voice Remote, followed by its Echo Dot smart speaker.”

Prime members are Amazon’s most frequent and profitable customers - they pay $119 a year for the privilege, but spend roughly twice as much on Amazon as non-Prime customers.

Published on: December 4, 2018

• The Boston Globe reports that Ahold Delhaize-owned Stop & Shop plans to close the Brighton, Massachusetts, location of its small-store urban “bfresh” format, as the company folds the remaining stores - in Somerville and Allston, Massachusetts - into its larger corporate structure.

The Globe writes that “a new store in Newton will still open in 2018. A related venture in Rhode Island, Eastside Marketplace, will also remain open.

“However, Stop & Shop spokesman Phil Tracey said the company will decide on a new brand and format for all of those stores at a later date.”

There have been reports that one or more of the bfresh units could be converted to a new small-format concept under the Stop & Shop banner.

Published on: December 4, 2018

• The Phoenix Business Journal reports that “Amin Maredia, the CEO of Sprouts Farmers Market Inc., will leave the Phoenix-based company at the end of the year … ‘to pursue other interests’.”

The story says that “Jim Nielsen, the company’s president and COO, and Brad Lukow, Sprouts CFO, will serve as interim co-CEOs while the grocery chain completes a comprehensive search for a new permanent CEO.”

Published on: December 4, 2018

Got the following email from an MNB reader about our story concerning J. Crew’s decision to back off its value-brand strategy:

J Crew has struggled with defining the Mercantile concept for several years – they could never figure out if it was a store, a merchandise line, or an actual brand.  They had actual “Mercantile” labeled stores that felt more like overpriced outlets – some full-price goods on sale, some outlet-branded goods, stuff with a Mercantile label.  They did not seem to have that trouble with Madewell but this concept fell apart before they even opened a store.  I think it reduces the confusion with the consumer to not have two concepts that are effectively doing the same thing.



Yesterday, we took note of a Business Insider report that Cleveron, described as the technology firm that designed the pickup towers being used in some Walmart stores, has developed “a self-driving car that delivers packages to homes and businesses. The car uses a robotic arm to place the packages in pickup lockers outside homes and businesses. Eventually, it will be able to deliver to mailboxes and pickup towers as well.

“Autonomous delivery could be a boon for retailers, which have seen shipping costs balloon in recent years.”

I commented:

Vox has a story about the same subject, suggesting that while a majority of Americans worry about being transported in autonomous vehicles, there is less concern about packages and products being transported in such vehicles.

I don’t know about you, but I worry more about getting hit by one of the damn things than riding in them.

Like drones, autonomous cars probably will take a little longer to gain popular and regulatory acceptance … but we’ll get there. It won’t be for everyone, everywhere. Some cars - like my manual transmission Mustang convertible - will be seen as dinosaurs, driven by dinosaurs.

But I won’t judge you if you won’t judge me.

One MNB reader responded:

I would never call you a dinosaur - because I drive a Mustang convertible, same year, I think only automatic transmission. (Sorry, the 405 is a pain.)

But I think the thing most people miss about automated driven cars is the number of accidents that DON'T occur. Off course, it's a statistic that can't be measured because it doesn't happen. That's tragic, because it doesn't get a lot of play in the media. But I think I would feel safer in these cars than by some of the Uber and Lyft drivers I have been with.

You’re right about the accidents … I remember reading somewhere how one of the unintended consequences of self-driving cars likely would be a drop in available organs for transplants, since many of these organs only become available after fatal car accidents.



An MNB reader yesterday was quoted here as saying:

The idea that “we shouldn’t do anything about climate change because other countries aren’t doing enough” is equivalent to being in a leaky lifeboat and refusing to bail the water out of the boat because there are other passengers who aren’t bailing the way you think they should. You may feel justified in doing nothing but you’re still going to drown.

I agreed.

But MNB reader Jim Huey said, no so fast:

If the Trump administration were indeed arguing that we shouldn’t do anything, this point would have merit. The Trump administration is saying we aren’t going to do as much as the Paris Accords call for. There is certainly an argument to be made for being part of the Paris treaty but let’s keep the discussion to facts. Arguments like the one above are great for riling up the base (I know Trump is the king of this so I don’t feel sorry for him when he gets pushback like this) but really only diminish a particular sides’ point.

I’m not sure the original correspondent was criticizing the Trump administration specifically; the comment, I thought, was more aimed at a broader spectrum of thought.

It is worth noting that this morning Larry Kudlow, director of the White House National Economic Council, is quoted as saying that the Trump administration wants to end all electric car subsidies in the near future - meaning 2020 or 2021.

Now, it apparently remains to be seen whether this is an actual plan or just political rhetoric - the incentives were put into place by Congress, and it seems dubious that they could be ended via executive order … and with Democrats controlling the House of Representatives starting in 2019, it seems less likely to get through the Congress.

But, the question is why we’d want to do anything that gets in the way of encouraging smarter use of energy. In my view, this has nothing to do with what other countries are doing. It has to do with being smart, with conserving energy where possible, and showing leadership. Sometimes, if other folks aren’t rowing enough, the biggest, strongest and smartest folks in the boat have to row harder and faster.

Published on: December 4, 2018

In Monday Night Football, the Philadelphia Eagles defeated the Washington Redskins 28-13.