business news in context, analysis with attitude

Published on: September 28, 2021

by Michael Sansolo

During the recent Jewish High Holidays, the Rabbi emeritus at my temple spoke about how life might change once Covid is finally behind us.  There were plenty of business lessons in what he had to say.

To be honest, it was an easy topic for him to use. For all the non-Jews out there, let me provide a simple bit of context about my religion. Jewish temples, like other religions, have services every week. However, attendance is always somewhat spotty on most of those Friday nights and Saturday mornings.

The high holidays (the Jewish New Year) are completely different or as Ben Stiller explained in “Keeping the Faith,” it’s the Super Bowl of services. At my temple, for example, the number of seats offered is usually three to four times a regular week and frequently we have two or three overflow parking lots.

Except, that is, for the past two years. As our Rabbi noted, he was still struggling with running remote services. In this new setting, he said, he couldn’t tell if anyone was laughing at his jokes or falling asleep during his comments.

I’m hoping they didn’t do the latter because I found what he said insightful.

He opined that people never fall backward; rather as a society we all fall forward. Once Covid is fully tamed, he said, we won’t go back to life as it was. Rather we’ll move to a new normal very different that what we knew in 2019.

Quite honestly, I think he missed one ironic twist there. I wonder if a lot of religious services might be part of this new normal. I, for one, miss the community of gatherings in so many ways, yet I find the video services much easier to follow, more engaging thanks to the intimacy of zoom lenses, and really quite enjoyable. As we fall forward we are likely going to see more remote workplaces, video gatherings and possibly even more remote religious services.

If nothing else, it would entirely change the economics of religious institutions, like many businesses, that spend so much money on real estate.

But it won’t stop there and it won’t all be complex. For retail, falling forward comes with challenges such as omni-channel operations, new competitors and demands for entirely new services from shoppers. Yet there are some benefits.

If you’ve managed to eat at a restaurant in the past few months you’ve likely experienced another place for falling forward: QR code links to menus. Honestly, I can’t imagine why paper or plastic coated menus would return.

Being able to quickly upload a menu on my phone means I no longer need my reading glasses and certainly I will never again see a menu that’s somewhat beat up, stained or damaged in any form. Nor do I have to wait for the server to bring one nor do I have to share one when the restaurant is busy.

Plus the restaurant no longer has to invest in menus and that’s just the start. With digital menus, pricing can be more dynamic especially on seasonal items.  And we won’t all strain to remember what the server explained about the two daily specials because the menu can be changed daily, hourly or whatever. 

For supermarkets, the growing use and acceptance of QR codes could provide the ability to offer all manner of information throughout the store from featuring insights on various produce items, offering maps to better explaining the source of local products or even guiding shopping to nutritional insights and recipes. It’s possible that QR codes, which at one point seemed to have missed their moment, may be ready for prime time.

In countless ways, Covid has been an enormous pain that has stressed everyone and everything beyond belief. But if we accept that we are falling forward into a new reality and look for ways to improve and build advantage, maybe we can get some good out of this at last.

We can only pray.

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 here.

And, his book "Business Rules!" is available from Amazon here.

Published on: September 28, 2021

A recent Wall Street Journal piece about the growing use of gender pronouns in business settings - part of broader diversity initiatives, in this case designed to support co-workers who may be transgender or nonbinary - got KC thinking about the need for caring cultures, even when some of these issues are hard to understand.

Published on: September 28, 2021

The new edition of the dunnhumby Consumer Pulse Survey found that "64% of U.S. consumers reported that grocery stores are not doing a good job with COVID-19, compared to February 2021 when 50% of respondents reported grocers were doing a good job. Furthermore, 83% reported that the government isn’t doing a good job either, marking the lowest point of confidence in the government’s handling of the crisis, and the second-lowest globally."

The report continued:  "Consumers’ concerns with grocery stores span from worries that things are not returning to normal (76%), unvaccinated shoppers in the stores (34%), and still extremely worried about the virus (26%). Although 21% said there was no store that provides good value for the money, Walmart continues to be cited as providing the best value (29%), with Aldi (12%), Kroger (7%), and Target (6%) following respectively. Amazon fell out of the top five stores for value and landed with 4%."

“After living with the pandemic for 20 months, consumers are now twice as concerned about their personal finances as they are about Covid itself. With inflation persisting, and government stimulus’ phased out, the majority of shoppers are now looking for greater value,” Grant Steadman, President for North America at dunnhumby, said in a prepared statement.  “Retailers who are perceived as offering more value, and respond to their customers increasing need for this, will earn the loyalty of the new customers they gained during the early phases of the pandemic.”

Other findings:

•  "During the 18 month study, consumers have changed how often they shopped from a low of just 3.8 trips a week in March 2020, to 5.6 trips a week in July 2020, to six trips a week in September 2021."

•  "Similarly, over the same period, visits to restaurants for carryout, delivery or eat-in have ranged from a March 2020 low of 62% of consumers, to 78% in July 2020, and 82% in September 2021, the highest amount since the start of the study. The number of consumers eating in a restaurant has also increased from just 10% in March 2020 to 49% in September 2021, also the highest point in the study."

•  "While consumers’ outlook on the economy has improved, 55% still feel the economy is weak, and 40% report that their personal finances are also weak."

•  "The number of people who shop both store and online has increased to 47% since the beginning of the pandemic when it was at 35%."

Published on: September 28, 2021

Portland, Oregon-based New Seasons Market and New Leaf Community Markets, both part of Good Food Holdings, announced yesterday "a starting wage increase to $16.25 per hour for staff across Oregon, Washington and California, effective October 6, 2021.

"In addition to higher starting pay, the grocers will adjust wage scales in order to recognize the contributions of all hourly store staff. These wage investments will raise the average pay of current hourly staff to $19.98 per hour across banners, building on each grocer’s longstanding culture of supporting staff with competitive pay and benefits."

“Supporting staff with competitive pay and benefits is a deeply rooted commitment aligned to the founding values of New Seasons Market and New Leaf Community Markets,” Nancy Lebold, CEO of both banners, said in a prepared statement.  “Grocery workers are vital to the success of our regional food economies. This investment will advance equity in our stores and continue moving the food industry to support livable wages for all workers.”

The announcement continued:  "New Seasons Market and New Leaf Community Markets share a commitment to progressive policies and programs that nurture staff and the communities served by the grocers’ combined 24 stores. The banners were early adopters of a $15.00 per hour starting wage and invest 25% of every sales dollar back into compensation and benefits programs. As the first B Corp Certified grocery stores, New Seasons Market and New Leaf Community Markets also lead the industry with comprehensive benefits packages that include robust healthcare for all kinds of families, paid parental leave, secure lifestyle scheduling, paid volunteer opportunities, career development and more."

Published on: September 28, 2021

Business Insider reports that "Costco has joined Home Depot in renting its own container ships to prevent delays and keep costs down as the global shipping crisis rages on … Costco CFO Richard Galanti said the company had chartered three ships to import products from Asia to the US and Canada. This would help Costco avoid spending six times the normal price on shipping or containers through a third party, he said."

The story notes that "the big-box chain is among a large group of retailers grappling with an ongoing supply-chain crisis that's causing delays and shortages. 

Falling demand in the first half of 2020, followed by a surge at the back end of the year, has led to delays, port traffic jams, and blockages. A lack of containers and dock workers has made the situation worse.

"At the same time, retailers are being hit by truck and driver shortages, leading to further delays and higher costs."

Published on: September 28, 2021

Insurance Age reports that "insurtech start-up Superscript has partnered with Amazon Business to provide insurance for UK micro and small businesses, as well as sole traders, through Amazon membership programme Business Prime."

Superscript says that "its technology and underwriting expertise will streamline the insurance-buying process for UK Business Prime members, with customers receiving customised insurance."

Published on: September 28, 2021

From CNBC:

"Supply chains are snarled and manufacturing is constrained. For weeks, headlines have been telegraphing a clear message to shoppers: This holiday season shop early.

"In years past, early bird shoppers may have turned to layaway plans to reserve holiday gifts and pay for the purchases over time. But many retailers — including the nation’s largest, Walmart — have done away with or scaled back these programs. One reason is shoppers have new tools at their disposal to spread out payments.

"A popular option for consumers are buy now, pay later plans. Retailers are big fans as well. The point-of-sale loans are easy for retailers to manage, and research shows these options lead to bigger baskets and greater customer loyalty. RBC Capital Markets estimates a BNPL option increases retail conversion rates 20% to 30%, and lifts the average ticket size between 30% and 50%."

The story notes that BNPL is popular with "younger shoppers, like the much-desired Gen Z and millennial consumer" because of "the promise of a handful of equal payments spread over a relatively short period of time, with no hidden fees. Often, the plans are interest-free."  They're also attractive to "consumers that either do not have access to credit, or for a variety of reasons, do not want to purchase with a credit card. The option also makes a lot of sense for shoppers who don’t have the funds to cover the total purchase, but will over the next several paychecks."

Published on: September 28, 2021

The Ford Motor Company yesterday announced that it will spend more than $11 billion to build three battery factories and an electric truck plant, creating some 11,000 jobs, in what the company says is a ramping up of its commitment to vehicles powered by something other than the internal combustion engine.

The move to electric vehicles is a response to climate change issues that have continued to move to the fore of global consciousness, and is part of a "hard pivot" being taken by a number of auto manufacturers around the world.

“I think the industry is on a fast road to electrification,” Ford’s executive chairman, William C. Ford Jr., said in an interview with the New York Times. “And those who aren’t are going to be left behind.”

Published on: September 28, 2021

Random and illustrative stories about the global pandemic and how businesses and various business sectors are trying to recover from it, with brief, occasional, italicized and sometimes gratuitous commentary…

•  Here are the US Covid-19 coronavirus numbers:  43,942,335 total cases … 709,119 deaths … and 33,394,833 reported recoveries.

The global numbers:   233,186,563 total cases … 4,771,696 fatalities … and 209,935,091 reported recoveries.   (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 75.3 percent of the US population age 12 and older has received at least one dose of vaccine, with 64.8 percent being fully vaccinated.

The CDC numbers also show that just 64.4 percent of the total US population has received at least one dose of vaccine, with 55.4 percent being fully vaccinated.

•  CNBC quotes Dr. Scott Gottlieb, the former commissioner of the Food and Drug Administration (FDA), as saying that "vaccinating children against Covid is a crucial step in changing the way many Americans view the coronavirus going forward."

"“I think the reason why a lot of people are overestimating the risk of coronavirus, or are still worried about it even if they’re vaccinated ... is because the kids are still vulnerable,” he says, adding, “Once adults are able to vaccinate their kids, the anxiety about getting a breakthrough infection — knowing that you’re probably not going to get very sick, your odds of getting very sick are very low if you’re vaccinated, but you could bring it back into the house — I think that’s going to start to resolve."

Gottlieb went on:  "We’re going to evolve to a place where this is an endemic virus where this becomes a way of life, or a fact of life, if you will. It’s going to be an evolution. It’s not going to happen overnight … It’s going to be when we can vaccinate the children, when the prevalence declines, when the hospitalizations and deaths start to decline, and they will. They will on the back end of this delta wave."

•  From Bloomberg:

"American men lost 2.2 years of life expectancy last year because of COVID-19, the biggest decline among 29 nations in a study of the pandemic’s impact on longevity.

"Deaths among working-age men contributed the most to declining lifespans in the U.S., according to research led by demographers at the U.K.’s University of Oxford. Only Denmark and Norway, who have excelled at controlling their outbreaks, avoided drops in life expectancy across both sexes, the study published Sunday in the International Journal of Epidemiology found."

Published on: September 28, 2021

With brief, occasional, italicized and sometimes gratuitous commentary…

•  WOOD-TV News reports that  that the last Kmart store in Michigan - the state where it was incorporated in 1916 and in which the retailer was headquartered in its halcyon days - will close sometime in November.

The store is in Marshall, about 107 miles due west of 3100 W. Big Beaver Road in Troy, Michigan, where Kmart's international headquarters were located, and where the building reportedly remains vacant since the company was sold to Sears Holdings in 2005.

I remember visiting Kmart headquarters sometime in the late eights/early nineties to do an interview with then chairman-CEO Joseph Antonini, and I remember thinking then that the building seemed more like a shrine than a headquarters.

•  In Illinois, the Belleville News-Democrat reports that Schnucks is cutting back its stop hours, closing at 9 pm instead of 10 pm because of what it calls "the challenging labor market."

The reduction is reported by the paper to be only affecting the company's Illinois stores for the moment.

•  Reuters reports that "German discount supermarket group Aldi will invest 1.3 billion pounds ($1.8 billion US) in Britain over the next two years, opening a new store every week to try to accelerate its rapid growth in market share, it said on Monday."

In addition, "Aldi will create 2,000 jobs and open another 100 stores across the UK over the next two years as part of a £1.3bn plan to take a larger share of the British grocery market."

•  From the Wall Street Journal:

"Burger King, which is owned by Restaurant Brands International Inc., this year plans to test serving burgers in reusable sandwich boxes and pouring drinks in reusable cups.

It will charge a refundable deposit for each package, which customers can recoup by scanning the container in the Loop app and returning it to Burger King or other Loop collection points. Burger King did not disclose the price of the deposit.

"Certain Burger King locations in New York City and Tokyo will be among the first to test the program."

The story points out that this is part of a broader trend:  "McDonald’s Corp. , Burger King and Tim Hortons have committed to pilot tests with TerraCycle Inc.’s Loop, a program that collects, cleans and redistributes reusable packaging."

Published on: September 28, 2021

Reacting to yesterday's discussion of the increased pressures and hazards being dealt with by retail front line employees, one MNB reader wrote:

Kevin, there is a real attitude issue in the retail workforce today.  The overall feeling that “I” am essential has been pushed to the point where that is the only point being stated. 

The reality is, you are essential if you produce and add value to the company.  So, you will feel like you are disposable if you don’t produce.  Especially now with the demand for minimum wage going up.  You still must earn your stripes if you want to be appreciated. To those that don’t feel appreciated, work harder and smarter.  Then you might find yourself actually being “essential”.   I also have to wonder how the person in that LA Walmart “asked” people to social distance or wear a mask.  I seriously doubt they would be “coached” for politely asking “can you please wear a mask around me because I feel very uncomfortable."

If you have lived your entire career never feeling disposable no matter how hard you worked and how productive you were, then good for you.

Suggesting that people who are not appreciated just have to work harder and smarter to turn things around strikes me as naive. At best.  Maybe you've just spent too much time on the privileged side of the conversation.

Sure, some employees have attitude.  So do some managers.

And, by the way, one of the things managers are supposed to do, it seems to me, is actually manage their people, not just their departments.  That means getting the best out of them and getting past whatever attitudes they might have.  That's called leadership … and to my mind, there is a big difference between leaders and managers.

Regarding Whole Foods' decision to start charging $9.95 for deliveries, MNB reader Monte Stowell wrote:

Simple question about the $9.95 delivery fee at Whole Foods. They state that this fee will allow them to be competitive. With their prices, who are they referring to? Their prices are already higher than any other mainstream grocery retailer.

From another reader:

Just had my Kroger order delivered to rural Kentucky for $7. Pretty sure the groceries were cheaper too.

And from another:

The reason for the $9.95 is to enable WFM to keep the same everyday competitive prices.  Who are they comparing themselves to???  Quite frankly, the in-store prices are still high and the cost of doing business with them is through the roof.  I guess they don’t make enough from the buy and sell sides of their items.  Now they want to charge for deliveries.  With the increased quality offerings from traditional grocers, the high cost format  of WFM is going to come under further pressure.  Thought I do admit I am jaded, since I have always thought their prices were in outer space.

I am sensing a theme here.

On another subject, from an MNB reader:

I was hoping you could help me understand something that just doesn't click for me.

Over a month ago (August 18th to be exact) you had reported that 70.1% of the US population had at least 1 dose (if not fully vaccinated) of the COVID vaccine. Here we are about 40 days later, and one would expect that would be the % fully vaccinated.  Instead today there are slightly less than 65% fully vaccinated. 

What happened to the other 5%? Are people just not taking the second shot, or is reporting running that far behind?

I find this intriguing that some one would start the process and not complete it. Is that common with this vaccine?

I'm not even sure where to go for this type of information, but thought it surprising and that you might have an avenue from where you are pulling your data.

Thank you for all of your great coverage, I look forward to reading your insights on the industry every weekday.

I don't have an answer for you. I don't have a lot of answers about why so many Americans are resistant to vaccines.   I'm just relaying CDC numbers.  But I'll try to chase this down.

Following up on the competition in Dallas and what will happen when H-E-B comes to town, one MNB reader wrote:

Regarding the Dallas Market and HEB.  It will take time but as Dandy Don Meredith used to sing to us every Monday Night “Turn out the lights-the party’s over”. WHY? HEB “out competed” Albertsons and Kroger in South Texas by understanding each stores customer.  These two chains are no longer is South Texas.  HEB then went over to Houston and amazingly in a short period of time “out competed Kroger and Wal-Mart” by understanding each stores customer.  Kroger and WMT are still in Houston BUT HEB has the leading market share.  To those who may say Kroger and WMT are “to big” to know and understand each of their stores customers, ok I’ll give them that lame excuse.  What they can’t justify, in my opinion, is operating a boring, lifeless, cookie cutter store.  Seems consumers in Houston agree.

Because HEB builds each store according to the areas demographics, the consumer has a desire to actually GO TO THE STORE!  To those who say going to store is dead-ok if you say so BUT HEB owns their own delivery service-FAVOR.

“Turn out the lights, the party’s over."

And, reacting to my conversation with Webstop CEO Shawn Tuckett, one MNB reader wrote:

Kevin, I thoroughly enjoyed watching this video but it also infuriated me. It is so presumptuous to think that everyone over 60 (or even younger) owns a smart phone or gets online to shop. I know so many people who are at least 70 plus who have chosen not to use a smart phone or don’t like getting online to check out grocery sales.

Grocery stores have to be engaging – clean, well-stocked and have an overall appeal to shoppers. That’s the input I get from almost every age from 30 to 85. The second is that most shoppers like and appreciate the print flyers received in store as well as in their mailbox. Print is still a great way to communicate and entice grocery shoppers. Marketing people have to remember that one size does not fit all. Isn’t it better to remember that a solid mix of media is what will reach the maximum number of shoppers?

I agree with much of what you said, except about [print, which I think iS an endangered species.  And I think that retailers that went all-digital during Covid had the opportunity to make that stick … and missed their moment when they didn't.

So we'll agree to disagree.

Published on: September 28, 2021

In Monday Night Football action, the Dallas Cowboys defeated the Philadelphia Eagles 41-21.