business news in context, analysis with attitude

Published on: January 28, 2019

by Kevin Coupe

If I’d had to guess, it never would’ve occurred to me that Kraft - of all companies - would be the one that would end up pushing the limits on what is acceptable in a Super Bowl ad.

But there it is - an ad for Kraft’s line of Devour frozen food used the term “food porn,” which was rejected by CBS, which is broadcasting Super Bowl LIII next Sunday.

"My boyfriend is addicted to frozen food porn," the girlfriend in the commercial says. "He watches it at least two or three times a day.” And it goes on from there, replete with double entendres.

The media world being what it is, the folks at Kraft/Devour decided to release a 60-second “racy” version online, and save a 30-second “sanitized” version for the game. Which actually has given the brand and the commercial even more publicity, which is probably what the whole thing was about anyway.

Me, I don’t think the “racy” version is so bad … especially since it would run in between game segments in which acts of violence will be conducted between the lines, and we all know the long-term implications the game can have on the people who play it. (We could get into a long discussion here about why Americans tend to find violence more acceptable than sex, but that’s probably for a different time and place.)

Anyway, you decide … the commercial can be seen above left.

Published on: January 28, 2019

Albertsons said on Friday that it has signed a three-year deal with Microsoft that will apply the latter’s artificial-intelligence technology to its business and could lead to the development of checkout-free stores.

CNBC points out that Microsoft “is taking full advantage of the growing fear of Amazon.” In just the past month, Microsoft has signed separate deals with both Kroger and Walgreens Boots to bring its technology expertise to their retail businesses.

The deal with Albertsons will make “Microsoft Azure the grocer’s preferred public cloud,” the story says, adding, “Albertsons chose Azure to be its primary cloud because of its experience with big companies, history with large retailers and strong technical capabilities, and because it isn’t a competitor … While Azure is a distant second to Amazon Web Services, it’s winning large retail customers who are seeing Amazon’s dominance in commerce expand by the day.”

Anuj Dhanda, Albertsons’ CIO, says that “Amazon’s expansion has hastened his company’s efforts to modernize its infrastructure and in-store experiences.” He says that while Albertsons might not have developed the technology in the same way as Amazon has, the deal with Microsoft gives it the ability to deploy technology that Microsoft already is developing.

Published on: January 28, 2019

Bloomberg reports that Amazon is considering the opening of Amazon Go checkout-free stores “in London and across southern England.”

Amazon has not commented on the report, but the story says that Amazon has “selected a real estate agent” helping it look for appropriate space in London, as well as in “counties including Surrey, Kent, Berkshire, Buckinghamshire, Hertfordshire, Essex and Middlesex.”

Published on: January 28, 2019

The Wall Street Journal reports that Alphabet-owned Google and Amazon “are taking early steps to expand into the electricity business, as home-energy automation emerges as a rich new source of customer data.”

The focus, at the moment, is specifically on finding ways “to expand their smart speakers, internet-connected thermostats and other devices to harness information on consumers’ personal energy use. That data holds great power: It can be used to manage energy demand by incentivizing consumers to use less electricity during peak hours.

“While the energy ambitions of tech companies are currently limited, some executives anticipate a future where solar panels, battery storage and even electric vehicles all become part of a smart-home ecosystem. Under that scenario, any company that controls the software and systems that deliver energy could gain a formidable market position, according to executives and consultants.”

One estimate says that spending on home-energy devices exceeded $40 billion in 2018 and is set to double in the next five years.

Published on: January 28, 2019

The BBC this morning reports that Tesco is “finalising” plans for job cuts that could result in some 15,000 people being laid off, and the closure of some fresh food and bakery departments.

The story notes that Tesco is trying to cut the equivalent of almost $2 billion (US) from its operating expense budget as competition among the UK’s major chains “intensifies” as discounters Aldi and Lidl continue to grow market share.

The BBC also points out that some 10,000 jobs have been eliminated by Tesco since 2014, when the current CEO, Dave Lewis, joined the company in the wake of a major accounting scandal.

Without going into specifics, Tesco has acknowledged that it is "always looking at ways to run our business more simply and efficiently,” and that the company recognizes that “any changes will be hard for impacted colleagues, and unsettling for everyone.”

Published on: January 28, 2019

Howard Schultz, the former chairman/CEO of Starbucks, told “60 Minutes” in an interview aired last night that he is “seriously considering” a run for the US presidency - but said if he did so, he will reject the two-part system and run an independent candidacy.

Schultz said that he is rejecting the “revenge politics” practiced by both Republicans and Democrats.

“I've been a lifelong Democrat,” he said. “I look at both parties-- we see extremes on both sides well, we are sitting, today, with approximately $21.5 trillion of debt, which is a reckless example, not only of Republicans, but of Democrats, as well, as a reckless failure of their constitutional responsibility … I wanna see the American people win. I wanna see America win. I don't care if you're a Democrat, Independent, Libertarian, Republican. Bring me your ideas. And I will be an independent person, who will embrace those ideas. Because I am not, in any way, in bed with a party.”

Schultz said that he has “a long history of recognizing, I'm not the smartest person in the room, that in order to make great decisions about complex problems, I have to recruit and attract people who are smarter than me and more experienced, more skilled, and we've got to create an understanding that we need a creative debate in the room to make these kind of decisions.”

Schultz has said that he will make a final decision about whether to run by late-spring or early-summer. While he is a multi-billionaire, he has not said whether he would self-fund his campaign.

There have been reports that he already has started to assemble a staff, including Steve Schmidt, former campaign manager for Sen. John McCain’s 2008 presidential campaign, who recently renounced his membership in the Republican Party.

Published on: January 28, 2019

The Dallas Morning News reports that Kip Tindell, the chairman and co-founder of The Container Store chain - which has been much admired for its progressive corporate culture - has decided to retire, and will step down in September 2019. Also retiring at the same time will be Sharon Tindell, his wife and the company’s president/chief merchandising officer.

Kip Tindell, the story says, is “the last of the three founders working at the company and took the company public in 2013 after being courted by Wall Street for years. The other two founders are Garrett Boone and John Mullen.”

The paper points out that the retirements set in motion a number of personnel moves at The Container Store:

“Chief executive officer Melissa Reiff will become chairperson, and her employment agreement has been extended to March 2021. Reiff, who has been CEO since 2016, when she succeeded Tindell, also becomes president.

“Jodi Taylor, chief financial officer and chief administrative officer, also has a new employment agreement with a term ending in March 2021. A new CFO will be named sometime after March 1, 2020, and before Sept. 1, 2020. At that point, Taylor will stay on as chief administrative officer.

“John Gehre will succeed Sharon Tindell as chief merchandising officer at the end of the annual meeting in September. Gehre, the executive vice president merchandising and planning, was hired in July from San Antonio-based grocery retailer H-E-B.”

Published on: January 28, 2019

Reuters reports that CVS has formally adopted an initiative that requires the labeling of photos in its cosmetics aisles as “digitally altered”: when they have been so, making it “the first major American company to adopt such a policy in the face of rising concerns about doctored images setting unrealistic ideals of beauty, especially for young women.”

According to the story, “70 percent of all in-store beauty imagery was now flagged as ‘beauty unaltered’ or ‘digitally altered.’ The company announced its ‘Beauty Mark’ initiative a year ago, but only on Thursday did it appear in stores.

“CVS has promised that by 2020 all images in its stores nationwide will be marked. The policy has already been applied to all images on CVS.com and in marketing materials, including on social media, the company said.”

Reuters writes that the brands working with CVS on the policy include Neutrogena, CoverGirl, Revlon, Olay, Almay, Aveeno, Rimmel, JOAH, L’Oreal, Maybelline, Unilever, Burt’s Bees and Physicians Formula. The story says that “celebrities and others paid to promote products on social media are required to post only unaltered, unfiltered images.”

Published on: January 28, 2019

The Food Marketing Institute (FMI) has announced its annual leadership awards…

• The Sidney R. Rabb Award, for “commitment to the consumer, community and the industry,” to Randy Edeker, Chairman of the Board, CEO and President, Hy-Vee, Inc.

• The William H. Albers Award, for “commitment to trade relations and consumer service,” to Muhtar Kent, Chairman, The Coca-Cola Company, and Ern Sherman, the just-retired Vice President, Retail Industry Affairs, The Coca-Cola Company.

• The Robert B. Wegman Award, for “innovation and imaginative strategies,” to Tom Heinen, Co-President, Heinen’s Grocery Stores.

• The Glen P. Woodard, Jr. Award, for high standards in government affairs advocacy, was given posthumously to Greg Calhoun of Calhoun Enterprises.

• The Herbert Hoover Award, for dedication to service, was given to Mark Batenic, Chairman, IGA, Inc.

• The Esther Peterson Award, for excellence in consumer affairs, was given to U.S. Congressman Jim McGovern (D-Massachusetts).

Published on: January 28, 2019

• CNN reports on how Walmart has announced “that its more than 8,000 truck drivers will get around a $1,500-a-year raise. Walmart, the world's largest retailer, hopes higher pay will help it retain those drivers and hire 900 new ones this year … Although many companies outsource trucking to third-party carriers, Walmart has its own private fleet of 65,000 trailers, one of the largest in the country. Last year, Walmart brought on more than 1,400 new drivers.”

The hirings and raises are a business necessity, CNN writes: “A shortage of truck drivers nationwide and high turnover rates in the industry have hit Walmart at a bad time. The company faces pressure to deliver goods on time to its 4,700 stores and online distribution centers to compete with rivals like Amazon.”

Published on: January 28, 2019

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

• The Pittsburgh Post Gazette reports that StarKist Co. “has agreed to a settlement worth $20.5 million with Walmart to resolve antitrust claims.”

The story says that “StarKist, owned by South Korean parent Dongwon, is one of three major tuna suppliers who have been investigated for price-fixing in recent years. The U.S. Department of Justice has been looking into allegations that StarKist, Bumble Bee Foods, and Tri-Union Seafoods, which owns Chicken of the Sea, conspired to keep prices artificially high.

“A number of civil lawsuits were filed by retailers, grocers, wholesalers and suppliers. Chicken of the Sea settled with Walmart in May, although the terms also weren’t disclosed, other than to say the agreement included a cash settlement and a deal to participate in a series of programs and new product promotions in stores.

“Recently, Chicken of the Sea settled with numerous other companies — including O’Hara-based grocer Giant Eagle.”


• RTT News reports that for the time being at least, Starbucks has no intention of launching cannabis-infused drinks.

"We're going to keep watching this, but right now, it's not on the road map," says CEO Kevin Johnson.

It may not be on the road map at the moment, but I’d be willing to bet there are contingency plans for a fast detour if Starbucks senses the moment is right and the opportunity is too significant to ignore.


• The Wall Street Journal reports that Carl Rogberg, a former U.K. financial director at Tesco, has been acquitted of charges of fraud and false accounting that were tied to an accounting scandal that roiled the company. He is the third former Tesco exec to be acquitted of such charges.

Tesco paid million in fines and fees after it was determined that it had been systemically and systematically understating expenses and overstating revenues.


• Bloomberg reports that Aldo Bensadoun, the billionaire founder of the Aldo group, described as “a globe-girdling shoe chain with more than 3,000 locations,” has decided to fund a retail management school at Montreal’s McGill University, his alma mater, that will “incorporate many fields of expertise needed to thrive in today’s industry, from data analytics and anthropology to artificial intelligence.”

The story quotes Bensadoun as saying that “few business schools around the world provide a focus on retail management, which means graduates often aren’t ready to work for a company like Aldo. ‘They come to us and they studied marketing, and they think that’s retail,’ he says. ‘Retail is not only marketing.’

“‘To be a good retailer, he continues, “you need to understand sociology, you need to understand architecture, to be able to create the right atmosphere for that consumer to come and feel the experience of the brand. That’s why it’s extremely important to bring all these various disciplines into one school.”

Published on: January 28, 2019

• Kroger-owned Ralphs announced that Kendra Doyel, the company’s HR leader for both the Ralphs and Food 4 Less businesses, has been promoted to vice president of merchandising. She succeeds Victor Smith, recently promoted to be president of Kroger's Delta division.

Published on: January 28, 2019

• CNBC reports that a new study from The National Association of Business Economics (NABE) says that the recent $1.5 billion tax cut enacted by the Republican Congress and signed into law by President Donald Trump “appeared to have no major impact on businesses’ capital investment or hiring plans.” More than right out of 10 companies surveyed that thew tax cut had not changed their expenditure plans; “The White House had predicted that the massive fiscal stimulus package, marked by the reduction in the corporate tax rate to 21 percent from 35 percent, would boost business spending and job growth. The tax cuts came into effect in January 2018.”

The NABE survey also found that there could be “a further slowdown in business spending after moderating sharply in the third quarter of 2018.”

Published on: January 28, 2019

Albert J. Dunlap, who was known as “Chainsaw Al” for his strategy of cutting thousands of jobs - focusing on efficiency, not effectiveness, and putting the needs of shareholders above those of stakeholders - has passed away at age 81 after a short illness.

The Wall Street Journal notes that Dunlop himself was fired from his job as Sunbeam’s CEO “amid an abrupt deterioration in financial results. Sunbeam filed for bankruptcy protection in 2001.

“The Securities and Exchange Commission charged Mr. Dunlap and other members of his management team with devising illegal accounting maneuvers to mask Sunbeam’s financial troubles. In 2002, Mr. Dunlap agreed to be banned permanently from serving as a public-company official and to pay a $500,000 penalty to settle the SEC charges. He also paid $15 million out of his own pocket as part of the settlement of a shareholder class-action lawsuit against Sunbeam.”

Published on: January 28, 2019

…will return.

Published on: January 28, 2019

Novak Djokovic defeated Rafael Nadal 6-3, 6-2, 6-3 in the men’s singles finals at the Australian Open yesterday, becoming the first man to win the Australian Open seven times. This marked his third consecutive Grand Slam championship.

In the women’s singles finals, Naomi Osaka beat Petra Kvitova 7-6 (2), 5-7, 6-4.