Published on: February 17, 2022
KC is pretty sure this is the only time this year that he'll do a FaceTime commentary that will contain the words "retail" and "psycho-sexologist." Unless, of course, the after-times really sends traditional retail into some very unorthodox directions.
Published on: February 17, 2022
by Kevin Coupe
The other day I went off on New York City Mayor Eric Adams for saying that a cheese addiction and a heroin addiction essentially are the same thing. (At least physiologically. Not legally. At least not yet.)
"Stupidity," I called it. Not fair to people who love cheese, and certainly not fair to people who struggle with heroin addiction.
To be clear, I eat cheese. I like cheese, especially in a lasagna or on pizza or on a cheeseburger (which Adams, a declared vegetarian, also would not approve of). But I wouldn't particularly describe myself as a cheese addict.
This morning, though, I am going to eat … crow.
MNB reader Cindy Sorensen passed along a 2016 story from GQ with the title, "Science Says Cheese is Basically Cocaine."
As soon as I saw it, I knew I was in trouble.
Here's what it said, in part:
"Turns out cheese triggers the same excitable brain-parts as some of your favorite hard drugs … The study, researched at the University of Michigan (seriously how did the University of Wisconsin get scooped on this) and published in the U.S. National Library of Medicine, investigated why some foods cause addictive behaviors and other foods are lentils.
"It found that the more processed and fatty the food, the more likely it was to cause addiction, which is why no one has ever been addicted to carrots but there are still Little Debbie brownies. The most addictive food was, oh hey this is weird, pizza. (On a college campus? Crazy.)
"Indeed, the most addictive foods in the study contained cheese. That's partly due to its high concentration of casein, a protein that can ignite your brain's opioid receptors and produce the familiar craving for another hit enjoyed by all those pockmarked yellow-skinned people in the police blotter.
"Casein is found in all dairy products, but the cheese-making process concentrates it—which is awesome because Americans consume 35 pounds of cheese a year. That's a lot of of sweet, sweet casein."
Eye-Opener, huh?
So, apparently I owe Eric Adams an apology.
I wonder if Eric Clapton ever considered writing a song called "Casein?"
Published on: February 17, 2022
Walmart this morning announced that its Q4 comparable US sales (both bricks-and-mortar stores and digital) were up 5.6 percent, as quarterly online sales grew one percent.
The Wall Street Journal writes this morning that "Walmart’s U.S. sales got a boost from the grocery category due in part to being able to offer lower prices than competitors as overall prices rise, the company said. The health and wellness category benefited from more people filling prescriptions and the company’s administration of the Covid-19 vaccine, Walmart said.
"The company swung to a profit of $3.56 billion, or $1.28 a share. Overall revenue rose less than 1% from a year ago to $152.9 billion.
"For the latest quarter, supply-chain costs were over $400 million higher than expected at the start of the quarter, the company said. Wage costs increased, which was partially offset by slightly lower Covid-19 related costs and sales growth, Walmart said."
The company also said that "total revenue was $152.9 billion, up 0.5%, negatively affected by $10.2 billion due to divestitures."
For the full year, Walmart said that "total revenue was $572.8 billion, up 2.4%, negatively affected by $32.7 billion related to divestitures … Walmart U.S. comp sales increased 6.4% and 15.0% on a two-year stack … Walmart U.S. eCommerce sales grew 11.0% and 90% on a two-year stack."
Published on: February 17, 2022
The National Retail Federation (NRF) was out yesterday with new numbers showing that "retail sales powered through COVID-19’s omicron variant, inflation and other challenges to post strong increases in January … The U.S. Census Bureau today said overall retail sales in January were up 3.8 percent seasonally adjusted from December and up 13 percent year-over-year. By comparison, December sales were down 2.5 percent from November but up 16.7 percent year-over-year. Despite occasional month-over-month declines, sales have grown year-over-year every month since June 2020, according to Census data."
“January’s numbers show that 2022 is starting very strong for consumers and retailers, especially on the heels of a record holiday season and record sales in 2021,” NRF President and CEO Matthew Shay said. “While the year ahead has challenges with inflationary pressures, labor shortages, COVID-19 impacts and uncertainty related to international tensions in Russia and China, today’s numbers show that despite these concerns, consumers are spending, and the economy remains in good shape."
From the CNBC story:
"On a year-over-year basis, retail sales overall rose 13%, pushed higher by a 33.4% surge in gasoline station sales and a 21.9% burst in clothing stores.
"The numbers came with the economy facing the worst inflation in 40 years, which helps feed into the retail sales numbers. The Federal Reserve is expected to enact multiple interest rate hikes this year to combat rising prices, with markets looking for the central bank to boost its benchmark short-term borrowing rate by perhaps half a percentage point in March."
Except for inflation - and that's a big "except" - the economy does seem to be in pretty good shape, though I do tend to have a house-of-cards mentality about the whole thing. There are a lot of headwinds out there, and one stiff breeze from the wrong direction could have an enormous impact on consumer behavior and the economy in general.
With credit for Mel Brooks…
Hope for the best, expect the worst
Some drink champagne, some die of thirst
No way of knowing which way it's going
Hope for the best, expect the worst!
Published on: February 17, 2022
From CNBC:
"In the first half of 2022, Walmart plans to test alternatives to single-use plastic for curbside pickup and home delivery, said Jane Ewing, Walmart’s senior vice president of sustainability. Those services are fast-growing parts of Walmart’s grocery business, after shoppers got used to the convenience during the pandemic."
Here's the background:
"When Walmart rolled out a new grocery delivery service, it tested a bold premise: customers letting a stranger walk into their homes to deliver milk, eggs and other products directly into the fridge.
"Now that expanding service, InHome, is testing whether the country’s largest grocer and its shoppers can phase out reliance on single-use plastic bags and other kinds of disposable packaging that wind up in shoppers’ homes — and ultimately, the landfill.
"Last fall, Walmart swapped out disposable bags for tote bags that it collected, washed and used again for the subscription service.
"The pilot project, which was limited to a single store near the New York metro area, is part of Walmart’s broader effort to deliver on a pledge to move toward reusable, recyclable or industrially compostable packaging for its private brands and reach zero waste in its own operations in the U.S. and Canada by 2025."
From a shopper point of view, it is all about creating the habit. I can't remember the last time that I had to get a paper or plastic bag at a supermarket … I just keep a bunch of reusable bags in the trunk of the car, and have trained myself to remember to bring them in the store.
Sort of like wearing a mask into stores - once I got used to putting one one, it was no big deal.
Published on: February 17, 2022
CNBC reports that "Amazon will face a union election at one of its warehouses on New York’s Staten Island next month, according to a labor group behind the effort.
"Workers at the Staten Island warehouse, known as JFK8, will cast their ballots between March 25 and 30, according to the Amazon Labor Union, a labor group that is seeking to represent JFK8 workers.
"The election will take place in-person, in a tent outside the warehouse, the group said in a tweet. That’s a departure from the National Labor Relations Board’s protocol in recent elections. Over the past year, many union drives have taken place via mail-in ballots as a safety measure due to the coronavirus pandemic."
Amazon says that it remains "skeptical that there are a sufficient number of legitimate signatures to support this election petition. But since the NLRB has decided the election will proceed, we want our employees to have their voices heard as soon as possible.”
Published on: February 17, 2022
The Pew Research Center is out with a report saying that "nearly two years into the COVID-19 pandemic, roughly six-in-ten U.S. workers who say their jobs can mainly be done from home (59%) are working from home all or most of the time. The vast majority of these workers (83%) say they were working from home even before the omicron variant started to spread in the United States … This marks a decline from October 2020, when 71% of those with jobs that could be done from home were working from home all or most of the time, but it’s still much higher than the 23% who say they teleworked frequently before the coronavirus outbreak.
"The impetus for working from home has shifted considerably since 2020. Today, more workers say they are doing this by choice rather than necessity. Among those who have a workplace outside of their home, 61% now say they are choosing not to go into their workplace, while 38% say they’re working from home because their workplace is closed or unavailable to them. Earlier in the pandemic, just the opposite was true: 64% said they were working from home because their office was closed, and 36% said they were choosing to work from home.
"For those who do have access to their workplaces but are opting to work mainly from home, their reasons for doing so have changed since fall 2020. Fewer cite concerns about being exposed to the coronavirus – 42% now vs. 57% in 2020 say this is a major reason they are currently working from home all or most of the time. And more say a preference for working from home is a major reason they’re doing so (76% now vs. 60% in 2020). There’s also been a significant increase since 2020 (from 9% to 17%) in the share saying the fact that they’ve relocated away from the area where they work is a major reason why they’re currently teleworking."
The report goes on: "Looking to the future, 60% of workers with jobs that can be done from home say when the coronavirus outbreak is over, if they have the choice, they’d like to work from home all or most of the time. This is up from 54% who said the same in 2020. Among those who are currently working from home all or most of the time, 78% say they’d like to continue to do so after the pandemic, up from 64% in 2020."
You can read the entire report here.
To me this is fascinating stuff because it has the potential of not just reframing the workplace, but, in some ways, the culture. Sure, it is positive for people who can work from home and see it as offering them greater work-life balance. And sure, it may give companies the ability to cast a wider net for talent, and in turn allow talent to work for certain companies without actually having to move to headquarters. That's all good. At least potentially.
But I can say as someone who essentially has worked from home for most of the past three decades, there is something that is lost in terms of collaboration when people are not together. (Probably why Michael Sansolo, who also works from home, and I spend so much time on the phone each day, to the point that our wives question how much is work and how much isn't. Our response is that even the stuff that isn't strictly "work" is still grist for our writing. That's our story, and we're sticking with it.). Companies that see some advantages in a remote work model may actually be better off figuring out how to hybridize it to some degree, or look to figure out new models for bringing people together on a regular basis.
I also think that companies will have to be careful about creating bifurcated workforces, in which people who cannot work from home (because, say, they work in retail stores) do not feel that they are second class citizens compared to those who can. That's yet a new challenge for leadership, but one that needs to be confronted.
Published on: February 17, 2022
The Wall Street Journal this morning reports that Amazon and Visa have "reached an agreement allowing customers to use Visa credit cards across the online retailer’s websites and shops, the companies said, resolving a monthslong dispute.
"Amazon in November told customers it would stop accepting Visa credit cards issued in the U.K. starting in January because of the card network’s high fees. Last month, Amazon said it would allow customers to keep using their cards past that date while it negotiated an agreement with Visa."
Terms of the deal were not disclosed.
Published on: February 17, 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 United States now has had a total of 79,808,643 cases of the Covid-19 coronavirus, resulting in 952,603 deaths and 50,821,020 reported recoveries.
Globally, there have been a total of 418,822,261 cases, with 5,872,081 resultant fatalities and 342,344,947 reported recoveries. (Source.)
• The Centers for Disease Control and Prevention (CDC) says that 76 percent of the total US population has received at least one dose of vaccine … 64.5 percent is fully vaccinated … and 43 percent has received a vaccine booster dose. The CDC also says that 50 percent of the US population that is eligible for a vaccine booster dose has not received one.
• From the Associated Press this morning:
"The omicron wave that assaulted the United States this winter also bolstered its defenses, leaving enough protection against the coronavirus that future spikes will likely require much less — if any — dramatic disruption to society.
"Millions of individual Americans’ immune systems now recognize the virus and are primed to fight it off if they encounter omicron, or even another variant.
"About half of eligible Americans have received booster shots, there have been nearly 80 million confirmed infections overall and many more infections have never been reported. One influential model uses those factors and others to estimate that 73% of Americans are, for now, immune to omicron, the dominant variant, and that could rise to 80% by mid-March.
"This will prevent or shorten new illnesses in protected people and reduce the amount of virus circulating overall, likely tamping down new waves. Hospitals will get a break from overwhelmed ICUs, experts agree."
• From the New York Times this morning:
"The Republican attorney general of Texas on Wednesday sued to strike down the Biden administration’s mandate requiring travelers to wear masks at airports, on airplanes and on commuter bus and rail systems.
"The suit comes as many governors, including in states governed by Democrats, have been rolling back mask mandates for indoor public settings as infections from the Omicron variant of the coronavirus have plummeted following a record-setting surge last month. But forms of public transportation are regulated by the federal government.
"Since it was first introduced a year ago, the federal mandate requiring travelers to wear masks has been extended several times, most recently until at least March 18. Brief breaks for eating and drinking are permitted. There are exemptions for travelers younger than 2 and for people with certain disabilities who cannot wear masks safely. Travelers who refuse to comply can be fined.
"The suit by the Texas attorney general, Ken Paxton, was filed in federal court in Fort Worth. It argues that the mask mandate is unconstitutional and that the Centers for Disease Control and Prevention lacks the authority to impose the requirement. The Supreme Court recently declined to hear another case that sought to block the mandate."
Published on: February 17, 2022
• Yahoo Finance reports that "Grubhub is teaming up with 7-Eleven to offer "on-demand convenience delivery" from the Grubhub app. Following a successful pilot in Manhattan, the service — called Grubhub Goods — launches nationwide on Feb. 15 and offers delivery from more than 3,000 locations in the U.S.
"Delivery items include some of 7-Eleven's most popular items, including energy drinks, ice cream, and personal care products, among others."
• In California, Save Mart Companies announced the exclusive launch of "an on-demand grocery delivery service at its Lucky California flagship store and 'innovation lab' in Pleasanton in partnership with the world’s leading provider of autonomous delivery services, Starship Technologies."
According to the announcement, "Lucky California is the first grocery store in the San Francisco Bay Area to partner with Starship Technologies. The new service follows the May 2021 reopening of the Pleasanton Lucky California location that had been remodeled and re-invented to meet the evolving shopping needs of the community, offering the best value on local and fresh products and reflecting the familiar array of multicultural flavors enjoyed by Bay Area residents.
"In September 2020, the Save Mart flagship in Modesto was the first grocery store in the U.S. to offer Starship Technologies robot delivery service. Since its launch, the store has expanded its delivery area to serve over 55,000 households. As of today in Pleasanton, more than 1,500 households can experience a robot delivery for the first time, and this delivery area is expected to grow rapidly in the coming months, similar to Modesto."
• The Wall Street Journal reports that "Google plans to adopt new privacy restrictions to curtail tracking across apps on Android smartphones, following Apple Inc. in putting restraints on an advertising industry that has covertly collected data across billions of mobile devices.
"Google’s plans for Android could hasten an end to more than a decade of advertising practices across smartphones in which companies including Meta Platforms Inc.’s Facebook layered their code into hundreds of thousands of apps to track consumer behavior.
"Apple’s changes, which went into effect last year, have already upended the digital-ad industry and contributed to a wipeout of more than $300 billion from Meta’s market value.
"Google said Wednesday that it plans to develop more privacy-focused replacements for the alphanumeric identifiers associated with individual smartphones that some apps use to gather and share information about users."
Published on: February 17, 2022
• CNBC reports that Canadian doughnut chain Tim Horton's is "slated to open its first location in Houston this summer, signaling the Canadian coffee chain’s strategy to move further south for its next phase of U.S. expansion.
"The Restaurant Brands International chain has more than 600 U.S. locations, which makes it the third-largest coffee chain in the country, trailing behind Starbucks and Dunkin’. But it’s a distant third place, and the chain has struggled to take hold with U.S. consumers despite past attempts, dating back decades ago when it was owned by Wendy’s."
The story notes that "most of Tims’ current U.S. locations are concentrated in states that share a border with Canada: New York, Michigan and Ohio. The next phase of U.S. expansion will focus on markets like Texas and Florida," places where Canadians travel during the winter or move permanently in retirement.
Published on: February 17, 2022
I received a lot of email about yesterday's interview with former New Jersey Gov. Chris Christie.
Let's start with this one, from MNB reader Alan Shepherd:
Really disappointed in your Christie interview, you let him make multiple unchallenged political statements and gave the clear impression you were on board with all he said. Don't assume all of your audience is Republican and keep it to business, not overt politics. Sometimes they mix but not always. By the way, I would feel the same of you had a prominent Democrat on as well and let them make unchallenged political statements. Keep it to business. Very disappointed.
Noted.
MNB reader Todd Ruberg disagreed, however:
Kevin……what a coup (no pun intended, Mr “Coupe") getting Chris Christie on MNB! And a much better interview than you get on cable news, he seemed liberated to be more candid.
I’ve always appreciated his candor, and I’m hungry for a practical “centrist” given the parties have tended to far to the poles IMHO. I worried a bit that he seemed to fall into some standard republican talk points/positions vs, being the maverick of his reputation ——“Radical Left wing agenda”……. the labor shortage and spending are solved by less gov’t spending (Agree those are factors...We wish it was that singularly simple)…and supply chain will be solved by less dependance on foreign manufacturing (in our industry a significant portion of CPG items are manufactured in US…..think “Toilet paper”).
Loved your question on his role model Republican! James Baker! 20 years removed from serving…..interesting he didn’t name anyone serving today.
Agreed. I actually think it is telling that he named Baker.
From another reader:
You conducted a great, meaningful interview with Governor Christie, particular after your questioning moved beyond the normal, Republican platform.
Yesterday we referenced a piece in the Boston Globe about how supermarkets in poorer neighborhoods often reinforce poor food choices, as opposed to stores in more affluent communities, that point shoppers toward healthier options. It used five different Stop & Shop locations in the Boston area as examples, demonstrating specifically how stores in poorer neighborhoods seemed to have different priorities than those serving more affluent communities.
The story, by Chaseedaw Giles of Kaiser Health News, can be read in its entirety here.
I commented:
The comparisons are stark, but give Giles credit for acknowledging that "Stop & Shop has started to try to redress the inequity, with changes coming first to its Dorchester location, including an in-store dietitian. The Grove Hall store also sends out an ad circular that features promotional pricing on better-for-you items, which may include fish, vegetables, and fruit. It has joined the Fresh Connect food prescription program that allows participating doctors to prescribe to patients a prepaid Visa card that can be used to purchase fruits and vegetables."
So Ahold Delhaize-owned Stop & Shop is trying … though the story also points out that it seems to be caught between two impulses. On the one hand, it has a stated commitment to healthier foods, but there's also a marketing imperative toward localizing stores so they reflect a community's buying habits and preferences, which means that stores in poorer areas may be less aspirational than in wealthier neighborhoods where people have had greater exposure to better-for-you foods.
The story also makes the point that manufacturers pay for product placement, and may be more willing to pay for better placement of healthier products in stores serving affluent communities.
The broader point is that retail and CPG brands are commercial enterprises making "largely commercial decisions" that "make it more difficult for people in low-income areas to eat healthfully, encouraging those with poor diets to continue the habits that landed them with diet-related illnesses."
But I wish that folks would see aspirational marketing - to everyone - as a good long-term commercial strategy, feeding into building relationships with shoppers as opposed to just being transactional.
Got a number of reactions to this story.
One MNB reader wrote:
I manage a store which caters to what my customer buys. Yes, we provide healthy options and a great Produce department but the reality is, it is not what my customers buy. I cannot make shoppers buy heathy or eat healthy.
I see a stark difference from our sister store less then ten miles away. College town with many educated people. My town is working class, meat and potatoes, I like to say.
As you say, give the customer what they want - now seen as disingenuous. In my town as the shopper demographic slowly changes to more Spanish shoppers, we have provided these folks with the items they are looking for, how is this any different than giving any shopper what they want. Bottom line, educating shoppers about how to eat right/healthy is what is needed.
From another reader:
I find this statement (from the writer) the most relevant: “ I’m glad my mom taught me how to make those choices early on. “ The people of the community must take on the responsibility for better eating. Like all things good or bad, it is a learned direction. People need to stop pushing for others to take on their own responsibility. It is not the duty of the retailer stock items that don’t sell. The retailer will stock what the community purchases. The fastest way to affect selection is not to buy the soda, chips, candy bars, unhealthy choices, etc. If something doesn’t sell it’s gone, and replaced with something that does. I guarantee that if healthy options sold in certain communities, the retailer would stock them. There are reasons that WFM is not in low-income markets. It is not driven by racial undertones, but rather by plain old economics.
MNB reader Steve Ham wrote:
I don’t believe that grocery store executives have a hidden health initiative – either for or against healthy food choices based on equality. As you pointed out, “stores in poorer areas may be less aspirational than in wealthier neighborhoods”, and it very probably comes down to category segment ROI. If soda or pre-packaged food sells better with higher ROI on space used in store A, it’ll be featured more prominently and get increased footage. If organics, sushi or more fresh produce in store B gets higher ROI, ditto. Every retailer would love to pull up the bottom 20% of stores higher in sales/profitability.
Sadly, transactional success is what category managers are likely measured against. To deviate from that, all retailers would have to accept the idea that they’d essentially make less money in the short to push consumers in another direction. That’s a big ask, and a vicious circle hard to break free of.
Another MNB reader wrote:
This articles lens of racism driving what is stocked in stores strikes me as nonsense and I question the author's experience in wholesale and retail grocery. Her lens of racism is distorting her perceptions of reality. I have been in the grocery industry for thirty-five years and have witnessed massive changes in offerings by manufactures and consumers willingness to try something new over the years.
While there can be no denying that everyone should eat better; disposable income is a larger factor than racism in those purchase. With SNAP benefits being what they are even that argument is losing steam.
A savvy retailer will always work to customize their offerings and devote space to those items that their customer wants to capitalize on sales, in-stock conditions, and waste mitigation. Period. Is it a retailers responsibility to police (force) customers to buy fruit instead of cake? When does the consumers free will to choose cake come into play? Should the retail bear a huge waste responsibility so they can virtual signal about how they are working towards equity in purchases? Nonsense. Personal responsibility needs to be embraced for ones own health and purchasing decisions.
Just in the interest of accuracy, the word "racism" is only used once in the entire 1,100-word article, and it is a quote from Andrea Richardson, a policy researcher focused on nutrition epidemiology at the Rand Corp. and professor at the Pardee Rand Graduate School. The article's writer, Chaseedaw Giles, actually is far more nuanced in her assessment, as is Phil Lempert, who is quoted several times in the piece.
Which is the point made by yet another reader:
I think the deeper point was that her initial reaction of what must be racial bias softened through her journey of investigation. I like how the author sort of comes full circle with the help of Phil Lempert, in the end acknowledging how she learned a lot about all the science behind how a supermarket is organized. Lastly this story reminds me of the school lunch programs not long ago where they were placing healthy foods on kids lunch trays only to discover most of the healthy food ended up in the trash. As the old saying goes, You can lead a horse to water…
On another subject, from an MNB reader:
Kevin, I may have missed something here, but I am unclear what the employees and unions are specifically seeking from Starbucks. I recently saw a piece on this topic after the first store voted to unionize. Never was there a specific "ask" or list of "demands" from Starbuck's discussed.
My understanding is that Starbucks is already a very generous employer in terms of base pay, college tuition assistance, benefits package, etc.etc. Do you know what they employees are looking for here?
I think that is a fair assessment; I'm not sure I've seen a single list of demands on any sort of national scale.
We also have a dissenting view on my take on the Instacart-TikTok story:
I have a slightly different perspective on this story as I feel both sides did things incorrectly
First. complaining on TikTok about a customer, not cool and a stupid move. Was the customer demanding, very much so and maybe the customer had some valid reasons, but you take your issues to your leadership, not the public forum.
On the flip side, it seems the customer felt entitled to "demand" all these things, which is just foolish at best. Most normal people don't act like this or expect this type of service for shopping. Seems like a page right out of the movie The Devil wears Prada. And the fact KC, that you didn't call out this sense of entitlement is a shame. The customer has every right to ask for things, but she doesn't have the right to demand things which are outside the Business model. (Maybe it's a Business case for Instacart to sell one/one personal shoppers.)
Seriously, asking that she be the only customer, etc... that's beyond the pale. If she wants this type of service, she needs to shell out the money and hire a professional personal shopper.. Then she can make all the demands she wants and control every aspect of the transaction. She might as well have asked the shopper to only look for items canned/made in the past month or is only packed with water from a spring on top of a mountain where flowers are in bloom all year round.
I'm not sure I endorsed the customer's actions. But that, in my mind, is almost beside the point I was trying to make about how retailer hired a company to handle its e-commerce business, which then outsourced the tasks specific a gig worker, who then went on social media and attacked the retailer's customer.
The customer may have been out of line, but the system, and the dependence of so many companies on Instacart, strikes me as out of whack.
