business news in context, analysis with attitude

Published on: January 11, 2022

by Michael Sansolo

“No pain, no gain” or, “Go the edge of failure!”

Those are phrases you hear frequently when working out with a trainer or in a gym class and frankly both are pretty damn annoying. The thinking is to push yourself to the limit, such as by doing as many repetitions of an exercise as you can, and only stopping once you cannot to find and test your limits.

Believe me, it’s very annoying!

But it also offers a powerful lesson. When working out, the only way to improve is to get uncomfortable. Comfort is great in countless situations, but not when you are trying to improve conditioning, strength, flexibility or anything else. It’s only by finding your limits can you find the path to improvement and hopefully start to break down those same limits.

We all hate discomfort. In the gym it means being breathless, aching and lots of sweating. (And yes, I’m speaking from personal experience here.)

The parallel to business is obvious. It’s great to operate in comfort, but it’s also incredibly risky. If you are simply comfortable - which in business would translate to profitability - you put yourself at risk. History has shown us repeatedly that others will recognize that state of comfort or profit and attack.

Your comfort zone becomes someone else’s opportunity.

Jeff Bezos used to analyze it another way.  Recognizing that many retailers find comfort in their margins, he once said, "Your margins are my opportunity."

Right now is a time of challenge in so many ways. The list of problems - so many related to the pandemic - such as labor and product shortages, rising costs and prices, and endless challenges posed by technology, makes it clear that this isn’t a time of comfort. It’s a time of challenge.

And the reality is that times of challenge produce winners and losers. No one knows for sure who will fall into each of those buckets, but here’s a good guess. Those who are pushing the limits, who are straining to find improved ways to operate and address the challenges of the day, are the ones likely to position themselves to survival and success.

Just take a quick look at yesterday’s MNB and the articles about Kroger and Deliveroo to get a sense of how some companies are trying new ideas.  Sure both are very large, but the competitive reality is that companies of all sizes will need some very creative thinking at the moment.

In contrast, those who are comfortable and just want to stay that way are likely in trouble.

In the gym, I never relish the chance to grab a heavier weight or set a stationary bike to a higher speed, but I do it because I know it’s the way to improvement.

And right now in business, it’s time to do the same. Take a hard, cold look at some of the problems you are facing and question how could you meet the challenges. It might require new thinking, new approaches to old problems, but it certainly isn’t optional. 

These are certainly not easy times by any measure and there are plenty of reasons to believe times are only getting tougher. Yet again, history has shown us that good businesses always manage to thrive in such periods by stepping it up, becoming great, interesting and differentiated.

Remember, comfort is overrated, in the gym or elsewhere.

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: January 11, 2022

There was a Los Angeles Times story the other day about Disney's new patent for a "Virtual World Simulator" that could track park visitors and project images that are customized to their behavior.  In the end, the technology could end up replacing animatronic characters or actors in costumes … and KC has some thoughts about this and offers a metaphor for retailers to think about.

Published on: January 11, 2022

by Kevin Coupe

This has nothing to do with retailing (though I'm sure I could find a metaphor in there somewhere), but this story from the New York Times struck me as an Eye-Opener that I could not resist…

"A 57-year-old man with life-threatening heart disease has received a heart from a genetically modified pig, a groundbreaking procedure that offers hope to hundreds of thousands of patients with failing organs.

"It is the first successful transplant of a pig’s heart into a human being. The eight-hour operation took place in Baltimore on Friday, and the patient, David Bennett Sr. of Maryland, was doing well on Monday, according to surgeons at the University of Maryland Medical Center."

The Times goes on:

"Last year, some 41,354 Americans received a transplanted organ, more than half of them receiving kidneys, according to the United Network for Organ Sharing, a nonprofit that coordinates the nation’s organ procurement efforts.

"But there is an acute shortage of organs, and about a dozen people on the lists die each day. Some 3,817 Americans received human donor hearts last year as replacements, more than ever before, but the potential demand is still higher.

"Scientists have worked feverishly to develop pigs whose organs would not be rejected by the human body, research accelerated in the past decade by new gene editing and cloning technologies. The heart transplant comes just months after surgeons in New York successfully attached the kidney of a genetically engineered pig to a brain-dead person.  Researchers hope procedures like this will usher in a new era in medicine in the future when replacement organs are no longer in short supply for the more than half a million Americans who are waiting for kidneys and other organs."

Published on: January 11, 2022

From the Los Angeles Times this morning:

"More than two-thirds of Kroger workers struggle to afford food, housing or other basic needs due to low wages and part-time work schedules, a report published Tuesday by a Los Angeles-based research group found.

"Fourteen percent of Kroger workers are homeless now or have been during the last year, according to the report.  Three-quarters are food insecure, meaning they lack access at all times to enough food for an active, healthy life, according to the definition set forth by the U.S. Department of Agriculture. That’s seven times the rate of food insecurity in the general population. Fourteen percent of workers report getting food stamps or food from a food bank or community donation program … Adjusting for inflation, wages for the most experienced Kroger food clerks have declined between 11% and 22% across the regions surveyed since 1990, the report found. Kroger is the only employer for 86% of the workers surveyed."

The Times quotes Kroger spokesperson John Votava as saying that "Ralphs and Food 4 Less paid average compensation of more than $24 an hour to cover wages, healthcare and retirement benefits, compared with the $18-an-hour average compensation for U.S. retail workers."

The Times says that the study was conducted by the Economic Roundtable, was based on "a survey of more than 10,000 workers at Kroger-owned stores in Southern California, Colorado and Washington," and was commissioned by the United Food and Commercial Workers International Union (UFCW).

You can read the LA Times story here.

You can read the original report here.

Published on: January 11, 2022

Seattle based co-op PCC Community Markets said yesterday that it is collaborating with Target-owned Shipt to offer customers same-day delivery, sometimes in as little as one hour.

The announcement says that after building their PCC order online, "customers will schedule their delivery, and a Shipt Shopper responsible for fulfilling and ensuring accurate delivery will bring it directly to their door in as soon as one hour … New customers can sign up and learn about availability in their area by visiting shipt.com/pcc-markets or by downloading the Shipt app."

In a prepared statement, Darrell Vanoy, PCC's  senior vice president of Merchandising and Marketing, said, “PCC is committed to providing exceptional products and experiences for our customers – whether that’s in our stores or getting our trusted products delivered to their door.  Partnering with Shipt and their people-first philosophy aligns with our vision to inspire the health and well-being of our community. We are excited to bring this convenient option to both of our customers.”

Published on: January 11, 2022

Axios reports on how, "as labor grows scarcer and pricier, stores are turning to cashier-less checkout to stay in business … Businesses increasingly face the almost unheard-of predicament of figuring out how to keep their doors open with fewer — or no — employees."

The story goes on:

"Amazon has had success with its cashier-less Go convenience stores, and the retail behemoth is even taking that model to full-size grocery stores.

In addition to Amazon, there are startups like Standard Cognition that will outfit any small store with AI-powered checkout.

"While some bigger chains put 100 to 200 cameras in ceilings and along aisles to make cashierless work, Standard Cognition has a more digestible approach for mom-and-pops and does it with just 27, co-founder Michael Suswal tells Axios."

And, the story says, "Look for self-checkout to gain popularity as the labor shortage persists.  Retailers that didn't offer self-checkout before the pandemic — such as Kohl's and DSW — have embraced it because it reduces contact as well as the need for workers."

Published on: January 11, 2022

FMI-The Food Industry Association announced yesterday that it is canceling its upcoming Midwinter Executive Conference, originally scheduled to take place later this month in Orlando, Florida.

Leslie Sarasin, FMI's president-CEO, said yesterday in an email that the event - the first in-person conference that the trade association had planned in almost two years - needed to be "paused" because "it is not in the best interest of the industry" to meet "in light of the Omicron variant surge and the difficulties this has brought to your business operations."

"I look forward to being back in touch with plans to perhaps reconvene at a later date in 2022," Sarasin said.

Published on: January 11, 2022

"The Securities and Exchange Commission is preparing to force more transparency from big private companies, as regulators grow concerned about the lack of oversight of the private fundraising that has fueled their rise," the Wall Street Journal reports this morning.

Some context from the Journal piece:

"Private capital markets have become an increasingly popular way for companies to raise money in the U.S. in recent decades, allowing firms to acquire funding from institutions and wealthy individuals without the regulatory burdens of going public. The number of so-called unicorns—private companies valued at $1 billion or more—has continued to grow even amid the recent boom in initial public offerings.

"The SEC, Wall Street’s top regulator, has begun work on a plan to require more private companies to routinely disclose information about their finances and operations, according to a semiannual rule-making agenda and people familiar with the matter. It is also considering tightening the qualifications that investors must meet to access private markets, and increasing the amount of information that some nonpublic companies must file with the agency."

The Journal points out that "the SEC’s push is at an early stage, but it is likely to garner stiff resistance from Silicon Valley and other sectors, such as oil and natural-gas infrastructure, that rely heavily on funding from private markets. The information that public companies have to disclose—about their earnings, business outlooks, risks and manager pay—is closely guarded by private companies."

Published on: January 11, 2022

Reuters reports that "a Starbucks cafe in Buffalo, New York, became the second unionized company-owned Starbucks Corp (SBUX.O) location in the United States after the federal labor board on Monday certified the results of last month's election there … The union, called Workers United, had challenged several ballots for the Genesee Street location because it claimed the employees actually worked at a different store. The National Labor Relations Board (NLRB) agreed with Workers United that the ballots should be tossed out, making the final vote 15-9 in favor of the union."

Published on: January 11, 2022

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 current US Covid-19 coronavirus numbers:  62,661,272 total cases … 861,336 deaths … and 42,505,374 reported recoveries.

The global numbers:  311,378,882 total cases … 5,515,031 fatalities … and 260,862,686 reported recoveries.  (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 74.4 percent of the total US population and 79.1 percent of the population that is age five and older have received at least one dose of the coronavirus vaccine, while 62.6 percent of the total population and 66.5 percent of the five-and-older population have been fully vaccinated.

The CDC also says that 36.5 percent of the total population has received a vaccine booster shot.

•  There is a report out of Cyprus that there may be a new variant of the coronavirus, dubbed “Deltacron” because it seems to have properties of both the Delta and Omicron variants.  There have been just 25 cases detected to this point, with more research continuing.

However, Dr. Ashish Jha, Dean of the Brown University School of Public Health, said yesterday that he was confident that even if this proves to be a new variant (and he was a little skeptical), there is every reason to believe that current vaccines will work against it.  "Our vaccines work against Omicron, and they work against Delta," he said on MSNBC yesterday.  "If there somehow has been a combining of genomes…our vaccines will do fine."

Published on: January 11, 2022

•  The Columbus Dispatch reports that "BJ's Wholesale Club, which left the Columbus market nearly two decades ago, is returning. 

"The Massachusetts-based retailer is building a 100,000-square-foot store in the Hamilton Quarter development, next to the new Sheetz location at North Hamilton Road and East Dublin-Granville Road on the Northeast Side.

"It will be the chain's first store in Greater Columbus since closing its two local locations in 2002, at 6060 E. Main St. on the Far East Side and at 6825 Dublin Center in Dublin.  The New Albany-area location would be the seventh Ohio site for BJ's, which operates six stores in the Cleveland-Akron-Canton area. The chain, founded in 1984, opened its 224th store Friday."

Published on: January 11, 2022

•  ROFDA (Retailer Owned Food Distributors & Associates) has announced the appointment of a new president-CEO - Jeff Pedersen, who most recently was Executive Vice President, Chief Sales and Support Officer at Associated Wholesale Grocers (AWG) in Kansas City.

Published on: January 11, 2022

There are two emails that I want to highlight this morning that, to be honest, make absolutely no sense to me … though I know they represent a line of thinking with some currency out there.

The first one:

Regarding the rise in covid cases:  A friend of mine put it quite succinctly.   Obviously with more testing more people are positive with covid.

If we had more IQ tests we'd have more idiots, too.

I'm not sure what the point is - that self-delusion is better than accurate knowledge about the severity of the problem?

And then this one, from MNB reader Steve Anvik:

Just wondering if I’m imaging something KC … Vaccine defenders seem unusually incensed and vocal about anti-vaxxers.  Why does the former, care about the latter?  As one reader said today, “.. when they are all dead ..”.   If the vaccine really works, what’s the worry about exposure.  Yet your columns are generally filled with reader’s invective.  Since I know you’re fair and balanced, it must be your mail runs that direction - about 74.3%?  Which leads to my point: perhaps one of the unknown side effects of the vaccines are increased irritability, etc.  I’m vaccinated, but not acerbic – wonder if my vaccine worked? 

Oy.

Okay, one more time.  But probably not for the last time.

The vaccine clearly has been proven to be effective, certainly at preventing serious disease and death in most cases, and at least when applied to the variants we've seen to this point.  It does not prevent transmissibility , if I'm reading the reports right.

However, there are people out there who can't be vaccinated for whatever reason, and/or who may be immunocompromised, and if they catch it, they could get very, very sick.  The goal is to do our best not just to protect ourselves, but also our neighbors.  As in, Love thy neighbor as yourself.

That's the logic.  

Now, I would disagree with the characterization of most reader email as being filled with invective.  I think there's a lot of frustration, and yes, some annoyance - the belief is that if more people were fully vaccinated and boosted, even the new variants might have a harder time breaking through.  Which would be good not just for the public health, but also the economy.  The "when they are all dead" line was, I think, evidence of exhaustion as opposed to malice.

I don't think you have to worry about the vaccine causing irritability.  As for acerbity … well, I was capable of that way long before Covid-19 entered the mainstream and skepticism about the public health heroes doing battle with the pandemic entered the national bloodstream.

Moving right along…

Last week we reported that for ten bucks a month, Taco Bell customers can purchase a new Taco Lover's Pass that will allow customers "to redeem one of seven iconic tacos a day for 30 consecutive days at participating U.S. locations."

I commented:

Once one is willing to accept the notion that what Taco Bell is selling are actually tacos - and yes, I know I'm being a bit of a snob here - then this looks like a potentially effective program.  Because, let's face it, nobody is going to eat just one … and the potential for creating a fast food habit is strong.  And that's what you want - to be thought of as the first, best option for whatever it is you are selling.

MNB reader Tony Moore responded:

I recall strongly objecting to your dismissal of PF Changs's a few years back. I believe I did call you a snob.  However, with regards to Taco Bell, not need to apologize here. No, you are certainly not a "snob" by turning your nose up at this chain.  They lost me years ago when I saw them putting the sauce on my order with a grease gun!

On a side not, no sure I'd want to eat any food 30 days in a row.  This offer could be a two-edge sword with some taste bud fatigue causing drop out beyond the end of promo.

The thing is, Taco Bell is counting on the fact that the vast number of customers won't eat there 30 days a month.  They just want folks, when thinking about fast food, to make Taco Bell their first choice, and then buy more than just the one taco.

At the same time, the program is designed to generate data for Taco Bell that it then case use to communicate with them directly - an increasingly important feature at a time when all these third-party delivery apps threaten to disintermediate the business from the customer.

Published on: January 11, 2022

In the NCAA College Football Playoff National Championship game last night, the University of Georgia Bulldogs defeated the University of Alabama Crimson Tide 33-18 to win its first title since 1980.