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    Published on: December 6, 2021

    A new and no doubt expensive study says that an industry in crisis got that way because "the pandemic intensified, accelerated, amplified all of the nascent trends that were already underway," and that, if it wants to win back lost customers, that industry must address rising prices and lousy experiential value.  

    To which KC responds:  Go figure.  The industry being addressed isn't retail, but KC suggests that the problems are similar, and require solutions now, before the situation gets worse.

    Published on: December 6, 2021

    by Kevin Coupe

    The degree to which many Americans are fed up with their work lives is illustrated vividly, the New York Times suggests, by the decibels used by many to announce that they are leaving their employers.

    "There once was a time," the Times writes, "when broadcasting the decision to quit a job might have seemed unwise, or at least uncouth. Career coaches traditionally advised their clients not to disparage former employers online. Though there was always a subset of workers who quit loudly on principle, recruiters often raised their eyebrows at candidates who’d gone public about negative experiences in their previous roles. But after over a year of laboring through a pandemic, protests over racial justice and all the personal and societal tumult that followed those events, some workers are ready to reject stale professional norms and vent."

    The Times goes on:  "If quitters think they can punch back at their old bosses without fear of alienating potential future employers, they might be right. The supply-demand curve of the labor market is working in their favor, and employers are growing less choosy. The share of ZipRecruiter posts that require 'no prior experience' has jumped to 22.9 percent this year from 12.8 percent in 2020. The share requiring a bachelor’s degree fell to 8.3 percent from 11.4 percent. Some parts of the United States are seeing significant gaps between job openings and job seekers — Nebraska, for example, has 69,000 positions unfilled and 19,300 unemployed people. Experiences that might have once hurt a job seeker’s prospects, like having taken time off for child care, are being forgiven."

    “People are frustrated, exhausted, triggered,” J.T. O’Donnell, founder of the career coaching platform Work It Daily, tells the Times. “When people are triggered, you see fight or flight responses. This is a fight response.”

    Seems to me that this trend is one that retailers need to think about, if only because it would be naïve to think that they will not be affected by growing employee discontent - which is especially dangerous for a business model that depends on front-line workers to interact with and serve customers.

    And the level of noise being created by discontented workers, it must be understood, is even more amplified by social media, which gives a megaphone to anyone who wants one.

    Seems to me that businesses that want to remain effective need to keep their Eyes Open, and give greater emphasis to creating nurturing cultures that are both customer-centric and employee-driven.  Or maybe customer-driven and employee-centric.  

    Wanting to leave a job with some sort of rhetorical flourish isn't a new impulse, though it has become more commonplace.  The great Robert B. Parker, in 1962, decided to leave his job in the advertising department of Prudential Insurance, where he was chafing under the restraints of a stifling bureaucracy.

    His resignation letter read as follows:

    I hereby resign from The Prudential Insurance Company of America, effective September 1, 1962.

    Looking back over my years with the company, I note that there have been three of them.


    Robert B. Parker

    Best resignation letter ever.

    Published on: December 6, 2021

    CVS Health and Microsoft last week announced what they are calling "a new strategic alliance focused on developing innovative solutions to help consumers improve their health, while empowering over 300,000 CVS Health employees – including frontline workers – with tools to better serve more than 100 million people."

    Ther announcement goes on:  "The collaboration with Microsoft will help CVS Health accelerate a data-driven, personalized customer experience, while complying with the company’s patient privacy and confidentiality policies. By combining information from different areas across the company with high agility, CVS Health will enhance its omnichannel pharmacy capabilities and deliver customized health recommendations when and where consumers need them. CVS Health will also scale up retail loyalty and personalization programs that use advanced Machine Learning models running on the cloud computing service Azure."

    And:  "In addition to creating a more personalized and seamless experience for consumers, data science will also be used to improve access to care and health outcomes. The ability to create a simple, easy-to-use patient experience has been critical to CVS Health’s role in the national COVID-19 vaccination effort, delivering insights and recommendations to ensure equitable and efficient administration of approximately 43 million vaccines."

    “We are rapidly transforming into a consumer-centric, integrated health solutions company, taking a digital-first, technology forward approach to all that we do,” said Roshan Navagamuwa, Chief Information Officer, CVS Health, in a prepared statement.  “Business services at this scale requires a new level of partnership."

    KC's View:

    There is this sense that folks are choosing up sides, creating alliances that will build on individual companies' strengths in a way that serves consumer needs and capitalizes on trends.  Now, this doesn't always play out the way everybody expects - like Haven, the now-disbanded healthcare joint venture formed by Amazon, Berkshire Hathaway and JPMorgan Chase.

    But, I suspect that even the failures will create greater knowledge that will serve these companies for the long term.

    That said, it will interesting to see the degree to which this plays out at retail.  My local CVS is mediocre at best - to the extent that Mrs. Content Guy has moved all of her business to the local independent pharmacy.  I've stayed with CVS for now because I travel so much - or used to before the pandemic, and expect to again in 2022 - and think it is smart to be doing business with a national chain.  But that makes CVS a default choice, not a preferred choice.  Which is not where a retailer wants to be.

    Published on: December 6, 2021

    Fox News reports that "U.S. labor board prosecutors have alleged that Amazon-owned Whole Foods Market illegally banned employees from wearing 'Black Lives Matter' masks and punished workers who did … The grocery store chain maintained appearance rules at U.S. locations to prohibit staff from displaying Black Lives Matter messages on their apparel, the National Labor Relations Board’s San Francisco regional director wrote in a complaint issued Friday on behalf of the agency’s general counsel."

    The story goes on:

    "In Friday’s complaint, the agency's lawyers said that Whole Foods, by banning Black Lives Matter messages, was restricting employees from exercising their legal rights to participate 'in concerted activities for their mutual aid and protection.'

    "'Issues of racial harassment and discrimination are central to employees’ working conditions, and the National Labor Relations Act protects employees’ right to advocate for change,' Jill Coffman, the NLRB regional director in San Francisco, said in a statement. 'Through this complaint, we seek to enforce the act and protect workers’ rights to speak up about these important issues'."

    In a statement, Whole Foods responded:  "Our dress code policy is designed to ensure we are giving Team Members a workplace and customers a shopping experience focused entirely on excellent service and high-quality food.  We do not believe we should compromise that experience by introducing any messages on uniforms, regardless of the content, that shift the focus away from our mission."

    KC's View:

    I'm not sure about the legislative and regulatory constraints, but I think that a retailer that wants a store environment to remain assiduously non-political - or non-partisan - ought to have the ability to say so.  It ought to apply to everyone - if you ban BLM t-shirts, then you also have to ban MAGA paraphernalia.  You ought to be able to say, "Look, I respect your right to free speech, and urge you to protest, vote, and exercise your political conscience in as many legal and hopefully civil ways as you wish.  But, we're going to be consistent in our neutrality, and want to bring down the temperature in our stores, not raise it."

    There are lot of good reasons for this.  A political message, one way or the other, could alienate a sizable percentage of customers.  And, conflicting political opinions emblazoned on clothing could create active conflicts among employees and between employees and customers - these days, this isn't just a theoretical concern.

    This gets a little more complicated, of course, because retailers, like other businesses, are being drawn into political positions and debates because everything in this country is so freakin' political.  (Even not wearing masks or not being vaccinated, even when such actions would help prevent the spread of a pandemic, are posited as political acts.). And so the ice is thin, and retailers need to be careful where they step.

    But - you'll forgive me for switching metaphors - if a retailer wants to create an oasis from the madness, then that ought to be acceptable.

    Published on: December 6, 2021

    The Verge writes about "Amazon Toll Road, a report from the nonprofit Institute for Local Self-Reliance (ILSR), found that Amazon charged third-party sellers a total of $121 billion in fees this year alone. According to the report, written by ILSR co-director Stacy Mitchell, those fees — for things like advertising, referrals, and shipping — usually mean that small businesses lose money to Amazon; Mitchell said that in 2014, sellers paid Amazon $19 of every $100 in sales, and today, it’s more like $34 per $100 in sales.

    "And, Amazon obscures the profit it makes from these small businesses in its financial reports, lumping it in with other less lucrative divisions 'because showing that they generate these profits from small businesses is not a good look,' Mitchell said."

    These fees, the report suggests, subsidizes Amazon's low prices on some items and programs like Subscribe & Save that create a steady base of regular customers.

    According to the story, "Brooke Oberwetter, an Amazon spokesperson, said in a statement emailed to The Verge that the ILSR report was 'intentionally misleading' and that it conflated Amazon’s selling fees with the cost of 'optional services' that some sellers purchase, like logistics and advertising. Those fees range from 8 to 17 percent of the selling price, Oberwetter said. 'These selling fees are highly competitive when compared to other selling options such as marketplaces like Walmart, Target, eBay, Etsy, and others, or direct-to-consumer via companies like Shopify and BigCommerce.'

    "In addition, Oberwetter said, some Amazon third-party sellers buy its Fulfillment by Amazon logistics service, which she said offered fulfillment services 30 percent cheaper than other logistics providers, as well as faster shipping."

    KC's View:

    I can understand why, if this is true, third party vendors would be upset with this.

    But isn't this what every retailer does - subsidize low prices in some segments and categories with higher prices elsewhere?  

    Published on: December 6, 2021

    The New York Times reports that bagel purveyors in the city are grappling with a cream cheese shortage that "is threatening one of the most treasured local delicacies: a fresh bagel with cream cheese."

    According to the piece, "New York bagel sellers go through thousands of pounds of cream cheese every few weeks. The recipe for the beloved spread, which according to the Kraft Heinz Company originated in New York sometime in the 1870s, is fairly simple: lactic acid, pasteurized milk and cream. Many shops start their mixes with Philadelphia cream cheese, a Kraft Heinz brand, which arrives on huge pallets."

    But those pallets have been coming up short over the past few weeks, throwing bagel shops into a frenzy.

    "Problems have popped up at every point along the supply chain that brings cream cheese from factories to the morning bagel … including a labor shortage in the manufacturing sector that began at the height of the coronavirus pandemic, a lack of truck drivers because of resistance to vaccine mandates and a scarcity of packaging supplies … Jenna Thornton, a Kraft Heinz spokeswoman, said in a statement that the company was seeing a spike in demand for several of its products. To accommodate the increases, she said, the company had been shipping out 35 percent more product than last year to food service partners, including bagel shops."

    KC's View:

    The horror.

    If there ends up being a concurrent lox shortage, I'm really going to get upset.

    Published on: December 6, 2021

    The Wall Street Journal this morning reports that "an activist investor is urging department-store chain Kohl’s Corp. to consider a sale of the company or a separation of its e-commerce business.

    "New York-based hedge fund Engine Capital LP wants the retailer to examine the two alternatives to improve its lagging stock price, according to a letter sent to Kohl’s board Sunday … Engine said in the letter that assuming online sales revenue of around $6.2 billion, Kohl’s digital business alone would be worth $12.4 billion. Engine also said it believes there are private-equity firms that would pay at least $75 a share and that interactions with potential buyers suggest they could do so by monetizing Kohl’s real estate.

    "Kohl’s didn’t immediately respond to a request for comment."

    KC's View:

    Seems pretty clear to me that while it might increase short-term shareholder value, spinning off the e-commerce business would not position Kohl's as having the kind of customer-centric value that a retailing business needs to go the distance.   As for selling the company … well, I'm not qualified to pass judgement on that suggestion, but my guess is that if a hedge fund is suggesting it, such a deal may be good for the fund's bottom line and not necessarily in the best interests of the retailing entity.

    Save me from the craven manipulations of hedge funders and investment bankers who know absolutely nothing about retailing.  If these clowns get their way, the thing they are most likely to achieve is turning Kohl's into Sears.  (Isn't Fast Eddie Lampert, who has driven Sears' and Kmart's retail businesses into the ground, a hedge funder?)

    Published on: December 6, 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…

    •  In the United States, there now have been 49,969,856 total Covid-19 coronavirus cases, resulting in 808,763 deaths and 39,523,573 reported recoveries.

    Globally, there have been 266,234,254 total cases, with 5,273,613 resultant fatalities and 239,872,813 reported recoveries.  (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 75.5 percent of the US population age five and older, and 71 percent of the total population, has received at least one dose of vaccine;  63.7 percent of the five-and-older population and 59.9 percent of the total population has been fully vaccinated.

    The CDC also says that 25.1 percent of the 18-and-old US population and 23.3 percent of the total US population has received a vaccine booster dose.  Almost half - 47.4 percent - of the US population age 65 and older has received a booster shot.

    •  The New York Times reports that "vaccine demand has spiked from an average of under a million doses a day for much of October to an average of 1.5 million a day in recent weeks, according to data from the Centers for Disease Control and Prevention. Demand for boosters and first time doses seems to be driving that increase."

    As a result, the Times writes, "many vaccination clinics and local officials are reporting long lines and delays in booking vaccination appointments recently, the product of expanded eligibility on booster shots and fears of the Omicron variant, experts said."

    •  From the Washington Post:

    "The United States is averaging more than 100,000 new coronavirus cases each day for the first time in two months, as the delta variant remains dominant amid fears of the new omicron variant … The last time it topped 100,000 was Oct. 6, when the country was averaging over 101,000 new cases daily."

    Keep in mind, from the beginning public health officials said that in order to say we have Covid-19 under control, we have to get the daily case rate at 20,000 or lower.

    •  The Associated Press reports that "U.S. health officials said Sunday that while the omicron variant of the coronavirus is rapidly spreading throughout the country, early indications suggest it may be less dangerous than delta, which continues to drive a surge of hospitalizations."

    Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said that while scientists need more information, “Thus far, it does not look like there’s a great degree of severity to it.  But we have really got to be careful before we make any determinations that it is less severe or it really doesn’t cause any severe illness, comparable to delta.”

    • And, from the Times:

    "Mayor Bill de Blasio announced a sweeping Covid vaccine mandate for all private employers in New York City on Monday morning to combat the spread of the Omicron variant.

    "Mr. de Blasio said the aggressive measure, which takes effect Dec. 27 and which he described as the first of its kind in the nation, was needed as a 'pre-emptive strike' to stall another wave of coronavirus cases and help reduce transmission during the winter months and holiday gatherings."

    The Times adds:

    "The coronavirus variant has spread to at least 45 nations worldwide, with the United States and much of Europe reporting a number of new cases in recent days. And while much uncertainty remains about what impact the Omicron variant will have on the pandemic, many nations have scrambled to impose travel restrictions — or in some cases introduced more serious measures.

    "With cases of Omicron now growing worldwide, the prospects of even more stringent restrictions are looming over a holiday period that many had hoped would be a return to some normalcy. In Europe, already the epicenter of a surge in the pandemic in recent weeks, the uncertainties raised by Omicron have ignited fears that the winter ahead will be more difficult than anticipated."

    •  Brinkwire reports that worries about the new variant has prompted Tesco in the UK to require all customers to wear face masks when shopping at its stores.

    Published on: December 6, 2021

    •  The Verge reports that Amazon has expanded its Alexa-based systems' capabilities so that they can detect certain sounds and then send alerts to the user.

    For example, the Alexa devices now will be able to detect when your washer or dryer chimes go off, and let you know via text or email.  Or, it can let you know if you've left the water running.  Previously, the story says, the "device could only recognize dogs barking, babies crying, snoring, glass shattering, as well as smoke alarms beeping."

    In addition, the story says, "if you’re an Amazon Pharmacy customer, you can now say, “Alexa, refill my medications,” when you need a refill on your prescriptions. Alexa will provide you with updates on when your medications are delivered, and you can also ask Alexa to call Amazon Pharmacy if you need any assistance. In the past, the ability to request refills through Alexa was only available to Giant Eagle Pharmacy customers."

    Published on: December 6, 2021

    •  CNBC reports that Dollar General, satisfied with the test of a new Popshelf format "aimed at wealthier, suburban shoppers who enjoy the hunt for a good deal," has decided to "have approximately 1,000 of the stores by the end of the 2025 fiscal year — including about 100 more locations that will open next fiscal year. It has 30 Popshelf stores in six states as of Oct. 29. It plans to open its first stores in Texas in the early spring."

    According to the story, "Popshelf stores are roughly 9,000 square feet and carry items such as home goods, seasonal decor and party supplies, including items from Dollar General’s private brands."

    And, Bloomberg reports that Dollar General "is preparing its first international expansion, with plans to open as many as 10 stores in Mexico by early 2023."

    Published on: December 6, 2021

    •  Bloomberg reports that "a former Inc. executive who worked on its Alexa voice assistant has joined Google as a vice president.

    "Alex Spinelli recently started at Alphabet Inc.’s Google after leaving LivePerson Inc., which makes chatbots for businesses to connect with customers. Spinelli joined LivePerson in 2018 from Amazon’s Alexa unit, where he worked on the software powering the e-commerce company’s digital assistant."

    Published on: December 6, 2021

    •  Former Kansas Senator Bob Dole, who overcame severe injuries suffered in the waning days of World War II to become a revered figure in US politics - serving in the Senate for 27 years, including 11 as the GOP leader, running for president three times (and gaining the nomination once, in 1996), and despite a cutting sense of humor able to evince grace, bipartisanship and statesmanship - has passed away at age 98.  Dole had announced earlier this year that he'd been diagnosed with Stage 4 lung cancer.

    Published on: December 6, 2021

    We had a story last week about how Amazon's dominance and size may be turning into a kind of vulnerability.

    I commented:

    It seems to me that Amazon often tends to get defensive about stories like these, arguing that they are based on misperceptions and errant observations, more a result of the enlarged target on Amazon's back than an accurate portrayal of reality.

    I get that.  It is hard to hear such things - even for one of the world's biggest and most influential companies.

    But I would argue that Amazon really needs to create a kind of ombudsman position whose job is making sure that these criticisms are not just taken seriously, but dealt with transparently.  There is no shame in saying, "We tried to do our best.  We fell short.  We're going to do better."

    The entire company is founded on the premise that established business models can be disrupted and made obsolete, but it seems to me that new CEO Andy Jassy needs to put less of a premium on disruption and more of a focus on living up to the value proposition that it has sold to both customers and vendors.  There will remain plenty of room for disruption in both new and existing businesses, but somebody has to recognize that there is a broader narrative playing out, a narrative that may be spinning out of Amazon's control.  And so, Amazon has a choice - write the next chapters itself, or let them be written by others.

    I know which one I'd choose.

    MNB reader  Steve Anvik responded:

    Your point is well said, and it’s up to Amazon to regulate.  To the many critics of Amazon, with both big and small complaints - I’m not a blind fan.  Frankly, Chewy beats Amazon 24/7/365 in their segment. But I am an unapologetic Prime member who cheers when Amazon does well, and in turn does well by my interactions.  Similar criticisms were leveled at Walmart, Costco, Meijer, etc. – each in their stratospheric rise(s).  Yet I remain eyes wide open fan of all, each for various reasons.  I also love many local shops (and local restaurants), but being a large player is Not by itself bad.  We’re all consumers, and thus our aggregated spending will ultimately create the changes we seek in the marketplace.

    I did a FaceTime video last week about the dangers of epistemic closure, referring to a New York Times piece by columnist Jane Coaston about how "knowledge bubbles work against us."

    MNB reader George Denman wrote:

    What a great video Kevin and one that I plan to incorporate into my Miami University Marketing #315 class in Professional Sales. In so many instances a seller goes into a sales call with a retailer trying to sell his “stuff” without any idea what is important to the buyer. He is trapped in his knowledge bubble  and is basically offering what my friend Warren Thayer describes as “deja poop” which is defined as the feeling you’ve seen all this crap before. If the buyer was more familiar with the retailers store format, go-to market methodology, what his KPI’s were then there is just one question that needs to be answered. “How are you going to help me make my number?” The seller then can be brief, be bold and be gone in just five slides.

    There was a piece last week in which Albertsons various initiatives were listed:  "…an AI-powered grocery cart, app-based checkout, membership program, robotic delivery carts, automated grocery pickup kiosks, robotic aisle scanners, small fulfillment warehouses, and more."

    I said that I liked that list a lot, and added:

    I'll betcha the "more" could be even more interesting and impactful on the company's future.

    Prompting one MNB reader to chime in:

    I love that list too, but how about some more cap ex for their fleet of stores, like Shaw's which could use a lot of remodels and updates.

    We've had an ongoing conversation about consumer-centricity, with some discussion about the degree to which the old Efficient Consumer Response (ECR) initiative ignored consumers.  Another MNB reader weighed in:

    Your readers are chiming in on the ECR process that retailers are or have utilized.  That is really funny when you have these statements of how consumer directed their operations are.  Especially when I just received an email from  one of my broker representatives that a retailer sent out.  “I am going to revise the slotting rates for the balance of 2022 resets (cycle 7 forward) to $76,000 which is about a 5% increase from the original number.  I will allow any brand that has not had a cost increase in 2021 or 2022 to pay the $72,000 which was originally posted.  If you are a manufacture that has raised costs on any of your brands than the new slotting rates will apply.” 

    None, zero, nada, of this goes to the consumer.  To go a little deeper, this is per item not per brand. This is only a 6 month guarantee that the item will stay on the shelf ( of until the next reset cycle). Plus the manufacturer has to spend promotions on top of this in an attempt to keep it there. The cost to just slot a new item nationally is well into 7 figures.  So maybe the FTC should factor in these BS charges into their equation, as to what is causing pricing increases.  I sincerely hope that this makes the cut because the time has come to out these ridiculous practices.  I wonder, not really, what the consumer would say if they knew.

    Finally, I got what I thought was a really smart email from MNB reader Grant Krause, reacting to my brief mention on Friday of the new Amazon series about Jack Reacher, which looks to rectify some of the problems that the Tom Cruise movies had in translating the Lee Child novels to the screen.

    Can't wait for the new Reacher series.  Tom Cruise as Jack Reacher is what happens when you trust your valued asset to a third party...

    Exactly.  Extra credit for finding a way to link Jack Reacher to my continuing observations about the dangers of retailing trusting their most valuable assets - their customer data - to companies like Instacart.

    Like I said … a really smart email.

    Published on: December 6, 2021

    •  Two veterans committees have elected Buck O'Neil, an All-Star in the Negro Leagues who later became the first Black coach in American League or National League history, and Gil Hodges, an eight-time All-Star with the Brooklyn Dodgers and the manager who brought the New York Mets to the 1969 World Championship, to the Major League Baseball Hall of Fame.

    Joining O'Neil and Hodges in the Hall of Fame - they will be inducted posthumously on July 22, 2022 - will be the late Minnie Minoso, who ESPN described as "a two-time All-Star in the Negro Leagues before becoming the first Black player for the Chicago White Sox in 1951;"  Bud Fowler, "born in 1858 … often regarded as the first Black professional baseball player;"  and former Minnesota Twins teammates Tony Oliva and Jim Kaat, who  are both 83 years old and the only living new members elected over the weekend.  ESPN writes that "Oliva was a three-time AL batting champion with the Twins whose career was cut short by knee problems. Kaat was 283-237 in 25 seasons and a 16-time Gold Glove winner."

    •  In Week 13 of National Football League action…

    Indianapolis Colts 31, Houston Texans 0

    Minnesota Vikings 27, Detroit Lions 29

    NY Giants 9, Miami Dolphins 20

    Tampa Bay Buccaneers 30, Atlanta Falcons 17

    Philadelphia Eagles 33, NY Jets 18

    Arizona Cardinals 33, Chicago Bears 22

    LA Chargers 41, Cincinnati Bengals 22

    Jacksonville Jaguars 7, LA Rams 37

    Washington 17, Las Vegas Raiders 15

    Baltimore Ravens 19, Pittsburgh Steelers 20

    San Francisco 49ers 23, Seattle Seahawks 30

    Denver Broncos 9, Kansas City Chiefs 22