business news in context, analysis with attitude

Published on: February 11, 2022

Content Guy's Note:  Long before I got into the internet business, I was in the video business, writing/producing/hosting business videos about great retailers all over the world.  My co-producer/director, Bruce Becker, and I recently unearthed a trove of tapes and DVDs that provide a kind of video time capsule, looking at the industry and critical issues from what seems like a long time ago in a galaxy far, far away.

And so, I'm inaugurating Fallback Fridays - in the weeks and months to come, I'll offer some glimpses backward that may actually provide some lessons about how we do business going forward.  First up - a video about food safety that I shot at Tesco in 2007 (with some other embedded flashbacks) for a CIES Food Safety Conference.

It is about 12 minutes long - people had longer attention spans in those days - but I think that whether you watch two minutes or all 12, there may be something to learn from it.

Enjoy.

Published on: February 11, 2022

Technology writer Kara Swisher has an excellent column in the New York Times in which she talks about what in some circles is being called "Web3," in which "actual guardrails might be erected" to control what the growth and ubiquity of giant tech companies.

This comes after a pandemic period that allowed big tech to grow unfettered, and "valuations of the largest firms rose to unprecedented levels and their owners and executives, already among the richest in the world, padded their portfolios to become among the wealthiest in recorded history."

Swisher suggests that "we’re entering a new period in which these powerful forces will be under greater pressure than ever to fend off those who would rein them in (I am looking at you, regulators)."  However, she also believes that, until proven otherwise, bigger still will be better:

"In the near absence of U.S. government tech oversight and the inability of lawmakers to agree to more funding for regulatory bodies like the Federal Trade Commission (listen to my Sway interview with F.T.C. head Lina Khan), expect to see a flood of mergers across the industry. Sure, the threat of regulatory action is always present, but most big companies have made the calculation that it is a far, far better thing to agree to stipulations later than to miss out while the getting’s good."

At the time, Swisher writes, expect new disruptions:  "Whether it is Mark Cuban’s attempt to blow up big pharma or the growing number of crypto companies moving closer to mainstream acceptance (ignore the roller coaster price of Bitcoin, which is still more of an asset than a usable currency) or the host of startups figuring out how to assist remote work, I am heartened again by the level of innovation I am seeing. And it’s not just commerce, communications, search and social media.

"The pandemic has allowed for a hard reset on just about everything and allowed us to discard what doesn’t make sense. Expect to see a range of new companies that will someday supplant the giants of today."

Published on: February 11, 2022

Bloomberg reports that "DoorDash Inc., the U.S.’s biggest meal-delivery service, is launching a financing arm to offer business loans to restaurants on its app.  With DoorDash Capital, merchants will be able to apply for financing to fund business operations such as purchasing equipment, paying rent, hiring and payroll."

According to the story, "Working with Parafin Inc., a fintech startup for small businesses, DoorDash Capital will determine a repayment structure based on a restaurant’s revenue. Eligible merchants can view cash advance offers within the app and can accept terms without additional paperwork or an impact to their credit scores. Funds will be disbursed in as little as one to two business days."

Bloomberg notes that "the financing venture is the latest effort by DoorDash, which commanded 58% of the market for meal-delivery in the U.S. as of December, to expand into new revenue streams."

Published on: February 11, 2022

New Food Magazine reports that "Tesco is set to open its first store dedicated to healthy food products, with the supermarket also launching 'under 100 calories' sections across multiple stores across the UK.

"The new store, which will be opening later this month, will only offer healthy products, with no foods high in fat, salt or sugar available. This is another step in the company’s attempt to get consumers to eat healthier, and is part of a four year plan that will include a major new programme of reformulation to improve the health profile of products, and increased promotions on healthy foods … The supermarket giant has created dedicated bays offering low-calorie versions of typically unhealthy foods such as crisps, sweets and children’s cereal ahead of a legal ban on promotions of foods high in fat, salt or sugar (HFSS) later this year."

Tesco says that it is embracing UK government activism in this area:

"We welcome the Government’s ongoing focus on obesity and are working closely with them to understand the detail of the new legislation and to make sure we can implement the changes effectively and communicate the changes to customers. This process is ongoing and forms part of our wider strategic approach to healthy and sustainable diets, and the work we are doing to deliver against our health commitments."

Published on: February 11, 2022

Save A Lot said yesterday that it has completed "its ongoing re-licensing program and its transition to a pure play wholesale model. This follows the sale of nearly 300 corporate-operated locations to Retail Partners, who will continue to operate the stores under the Save A Lot brand."

In all, the company said, it has "completed 34 transactions by selling Corporate-operated locations outside of St. Louis, Mo. to local operating groups. Operators taking ownership of the stores include a number of existing Save A Lot retailers such as Fresh Encounter, Inc., the Janes Group, Leevers Supermarkets, Inc., and Save Philly Stores, who added 51, 18, 17 and 14 stores to their portfolios, respectively. Additionally, Save A Lot welcomed 15 new ownership groups, including Yellow Banana, LLC, a portfolio company of 127 Wall Holdings, LLC, which purchased 38 stores across five states, and Ascend Grocery, LLC, which purchased 33 locations in Florida.

"The Company retains 18 stores in its home market of St. Louis as a test market for new innovations and programs."

The company said that "the completion of the transition dovetails with the Company’s recent appointment of new Chief Executive Officer, Leon Bergmann, who joins on February 21.  'Incoming CEO Leon Bergmann brings significant wholesale and grocery experience that is ideally suited to lead this model,' said Justin Shaw, board chairman, in a prepared statement.  "The Board and management team are excited for this next chapter of growth for the Save A Lot business and to support the entrepreneurial ambitions of all our dedicated Retail Partners.”

Scott Moses from Solomon Partners advised Save A Lot on various conversion sale transactions.

Published on: February 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…

•  The US Covid-19 coronavirus numbers:  79,052,681 total cases … 939,427 deaths … and 49,435,538 reported recoveries.

The global numbers:  407,159,831 total cases … 5,811,406 fatalities … and 327,245,757 reported recoveries.   (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 75.8 percent of the total US population has received at least one dose of vaccine … 64.3 percent is fully vaccinated … and 42.6 percent has received a vaccine booster dose.

•  The Wall Street Journal this morning reports that Amazon "will allow fully vaccinated employees to go maskless inside of its warehouses and is taking steps to adjust its paid time off policies after several states lifted indoor mask mandates this week.

"The e-commerce giant said in a memo to employees Thursday that the masking policy change would go into effect on Friday. Amazon in December began to require masks for all employees due to the rapid spread of the coronavirus’s Omicron variant. The company earlier had only required staff who weren’t vaccinated to wear masks.

"Amazon is also taking away Covid-19-related paid leave for employees who aren’t vaccinated. By March 18, workers must have received two doses of the vaccine to receive the paid leave. Amazon in January reduced its isolation period for workers who test positive for Covid-19 to seven days."

•  The New York Times this morning reports that "school districts around the country are rapidly rolling back Covid-19 policies that have built up over nearly two years, with many eyeing a return to more normal classroom life and operations as infection rates fall and fewer students and teachers miss class."

The story notes that "schools are dropping mask mandates, easing Covid-19 testing regimes and, in some cases, moving toward requirements for vaccines. The changes are geared toward keeping up with the evolving character of the pandemic and the changing wishes of students, families and teachers, said Dan Domenech, executive director of AASA, the School Superintendents Association."

I completely understand why school districts want to drop mask mandates, but I do think they need to be more judicious and nuanced in their thinking.  In my town's school district, for example, they've announced that masks no longer will be required as of February 28 … which happens to be the Monday on which students and teachers return to school after a one-week break.  It would make a lot more sense, I think, to have kept the mandate in place for another couple of weeks, since people will be vacationing and congregating during the break, which will increase the possibility that they'll get Covid.  Keep the masks on for another couple of weeks and you can mitigate that possibility and protect the health of both students and teachers.  But no, that's the kind of nuance that seems to escape some members of our local school board.  (Don't get me started …)

Published on: February 11, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  Advertising Age reports that as Amazon begins selling commercial packages for its Thursday Night Football package - it will have exclusive rights to those games beginning in September 2022, running through the 2033 season, the first all-digital deal for the NFL - it could be charging as much as 20 percent more to advertisers than they have been paying for broadcast television time.

"Over the past two weeks, Amazon has sent proposals to the NFL, which is presenting the options to official sponsors, according to media buyers, who spoke on the condition of anonymity," Ad Age writes. "It’s common for NFL broadcasting partners, which now include Amazon, to offer the league’s top sponsors the right of first refusal."

The story says that "Amazon has asked for up to $30 million from sponsors, which ad buyers said was an expensive first salvo. Amazon is offering the traditional sponsorships, with pregame, pre-kick, halftime, and post-game slots, according to media buyers."

Ad Age offers some context:  "The most-watched Thursday game this season, not including the one on Thanksgiving Day, drew more than 20 million viewers; but audiences are typically smaller, ranging between 10 million and 20 million viewers … Media buyers also said that Amazon is expected to raise the CPMs or cost to reach 1,000 views."

It is all part of Amazon's plan for world domination.  Amazon is taking no prisoners when it comes to the football package;  there have been reports that it could lure sportscasters like Al Michaels and Tory Aikman into the Thursday night booth.  (I wonder if Amazon will be able to make the play-by-play - no matter who does it - available via its Alexa system?)

•  Axios reports that "Los Angeles-based Coco, a remotely piloted delivery service, has officially expanded to Austin … The Austin rollout is expected to include 50 new Coco 1 bots."

Coco is described as a "a driverless, four-wheeled robot," and in Austin "the company has partnered with Austin favorites: Arpeggio Grill, Bamboo Bistro, Clay Pit, DeSano Pizzeria, Tuk Tuk Thai and Aviator Pizza."

According to Axios, "Company officials said they are targeting Dallas, Houston and Miami in the next few months."

Published on: February 11, 2022

•  Bloomberg reports that "the number of Americans applying for unemployment benefits declined for the third straight week.

"Jobless claims fell by 16,000 to 223,000 last week, from 239,000 the previous week, the Labor Department reported Thursday.

"The four-week average for claims, which compensates for weekly volatility, declined by 2,000 to 253,250 after rising for five straight weeks as the Omicron variant of the coronavirus spread, disrupting business in many parts of the United States."

•  From the New York Times:

"Union efforts that began late last year at three Starbucks locations in Buffalo have spread across the country, and now they have landed in New York.

"Employees at three Starbucks stores in Manhattan and Brooklyn, including the company’s marquee roastery in the meatpacking district, and a store on Long Island filed petitions by Thursday morning with the National Labor Relations Board to organize with Workers United, an affiliate of the Service Employees International Union.

"The employees are asking to hold a vote on March 3.

"These locations join more than 60 Starbucks stores that have sought to unionize over the last several months. Unions at two stores in Buffalo have been established. There are 9,000 corporate-owned Starbucks locations in the country."

•  Also from the New York Times:

"The retailer Kohl’s is under increasing pressure on multiple fronts. On Thursday, the activist investment firm Macellum Advisors, which has been fighting for changes at Kohl’s for more than a year, sought to take over the retailer’s board as part of its push to persuade the company to sell itself.

"Kohl’s has recently received takeover approaches but rejected them as too low. Last week, it said it had hired the investment bank PJT Partners and Goldman Sachs to field any further interest. It also put in place a 'poison pill' provision that makes it harder for an acquirer to put a bid directly to Kohl’s shareholders. It made an exception for 'qualified' offers, which requires the bids to be fully financed, among other conditions."

The story notes that "like most department stores, Kohl’s has struggled to fend off competition from online retailers and brands themselves, which are increasingly sidestepping department stores altogether. It has worked to carve out a place for itself by focusing in part on athleisure wear, which makes up more than a quarter of its sales.

"Analysts have lauded Kohl’s for creative use of its real estate, like partnerships with Amazon and Sephora, to rethink profitability of its more than 1,000 stores. But they have also warned about the potential impact of supply chain challenges on sales."

Published on: February 11, 2022

We had a story yesterday about how IAC/InterActiveCorp, the media group owned by Barry Diller, announced that it will end the print publication of six magazines that it gained control of last year with its acquisition of Meredith Corp.

Several of the six magazines are familiar to people who spend time at supermarket front ends:  Entertainment Weekly, InStyle, EatingWell, Health, Parents and People en Español.

In an internal memo, Dotdash Meredith CEO Neil Vogel said that "the company plans on investing in its 19 remaining print magazines - which include People, Better Homes & Gardens and Southern Living - by enhancing paper quality and trimming sizes. Dotdash Meredith also plans to invest $80 million in 2022 in content across all brands."

I commented:

I'm not sure it will just be naysayers who will see this is as a nail in print's coffin.  The thing is, just spending more money on the remaining print properties doesn't strike me as a compelling narrative for how they will survive in a market that seems to be all headwinds.  That's not to say they can't - the argument that Diller's company was buying lifestyle brands, not magazines, is a compelling one.  (And there's a metaphor here for bricks-and-mortar food retailers, who maybe ought to think of themselves as lifestyle brands, not just as the repository for other people's brands.)

But somebody has to explain the narrative - explain to me how the content disseminated by People, Better Homes & Gardens and Southern Living is best absorbed through better paper quality as opposed to a vibrant website.

I started out as a daily newspaper reporter.  I love print.  I'm open to the argument.  I just don't hear anyone making it in a compelling way.

One MNB reader responded:

I worked in the retail sales segment of print magazines for five years, with the largest publisher that no longer exists.  My job was eliminated because of the precipitous decline in retail sales of print magazines.  Sales of print magazines may have been artificially maintained by automatically renewable subscriptions, which were bound to ultimately decline.  The issue was not that people no longer wanted to read magazines, but rather that the content provided by magazines was made obsolete by the internet. 

Think about entertainment, celebrity, and sports news and how quickly you are able customize what you want to see.  I think there is still a place for hobby-based publications, like automotive or crafts that amalgamate resources into one place. 

It puzzles me to see that someone is still paying for front-end, magazine rack space in food stores.  Of course, the retailers will take the money, but someone has to realize that they are paying for exposure and retailer space that does not generate a return on investment.

Responding to my piece about a company that wants to turn returns into a subscription business, one MNB reader wrote:

Good morning Kevin,

I brought an item back to Kohls that I received from Amazon and the experience was wonderful! I printed off label but it back in box and dropped it off, within a couple hours I received the money back on my card and a discount to shop in Kohls if I wanted to.

It took all the fears away!

Yesterday we took note of a Globe and Mail report that the Weston Family Foundation, named for the family behind the Loblaws grocery chain and Weston Foods, has announced ther spending of more than $25 million (US) on an "innovation hub" designed to bolster the country's food security through the use of "new technologies to grow fruits and vegetables year-round in Canada."

MNB reader Carl Jorgensen wrote:

This is so interesting to see this happening in Canada. The pandemic has brought the inherent fragility of long global supply chains into sharp relief. The risks associated with breakdowns in these supply chains is perhaps most pronounced in the food sector, because we are talking about food security. Significant disruptions in food supplies could potentially lead to dangerous shortages of key foods, even in developed countries. That’s something we usually don’t think can happen here, but the possibility is real.

I have been working on a project for the U.S. plant-based foods industry to help reduce companies’ reliance on imported ingredients, and instead build robust domestic supply chains. A nice benefit of this initiative is that it brings the opportunities of a fast-growing sector to American farmers and rural communities.

On a different subject, MNB reader Steve Burbridge wrote:

Finished "Reacher" (the Amazon TV series)  this morning (early morning, indoor bike ride).  Great finish leaving me wanting for more.

By the way, "Reacher" has been renewed for a second season.  According to Deadline, "Amazon said that 'Reacher' ranked in its top five most-watched series ever in the U.S. and globally over a 24-hour period – though it’s worth noting that all eight episodes of the series launched at once. The company added that it also was among its highest-rated original series, with subscribers giving it an average rating of 4.7 out of 5."

I wrote yesterday about the passing, at age 85, of Syl Johnson, a widely respected Chicago blue and soul singer known for being an enormous influence on the hip-hop community, has passed away.  I'd never heard of him before, but was blown away by his music, which prompted one MNB reader to write:

WOW is right, I never heard of him either…terrific! Thanks for the introduction.

My pleasure.

Published on: February 11, 2022

Content Guy's Note:  Mark Greaney, the best-selling author of the "Gray Man"" series, returns to MNB today for a candid conversation about his newest novel, "Sierra Six," which I think is a terrific page-turner that I only put down when my iPad ran out of juice at 2 a.m.

"Sierra Six" is something of a departure for Greaney, who essentially has written two novels in one, with one timeline offering a kind of origin story for his protagonist, Court Gentry, and a second taking place in the modern world of terrorism.  The book moves seamlessly back and forth, building tension and complexity while maintaining a strong focus on character development.

In our conversation, Greaney talks about the challenges inherent in writing "Sierra Six," and also explores the demands of maintaining what has become a highly recognizable brand.

Enjoy.

If you'd like to listen to my conversation with Ace Atkins as an audio podcast, click below.

Mark Greaney's "Sierra Six" will be available starting Tuesday on Amazon, the iconic Portland independent bookstore Powell's, on Bookshop.org, and wherever books are sold.