business news in context, analysis with attitude

Published on: March 18, 2022

This segment  dates back to 2009, and was one of a number of videos produced to be shown at the CIES Global CEO Forum, which was located in New York City that year.  (CIES has since morphed into the Consumer Goods Forum.)  The theme of the conference was "Ingredients for Success in Turbulent Times," and my goal was to travel around the country and give attendees from all over the world a taste of what they find in food retail beyond the Hudson River.

This five-minute video quickly looks at three companies - one that has continued to thrive, one that has moved on from the strategy portrayed here, and the third is out of business.  All offer lessons from the past that are applicable to the present.

Published on: March 18, 2022

by Kevin Coupe

A few weeks ago we reported here on Chicory's third annual Online Grocery Usership survey, but yesterday an MNB reader emailed me a chart from the survey that she said seemed particularly resonant in view of comments that I've made here over the years.  I missed this chart in my original reporting, so I thought I'd share it with you.

Here are my questions:

If you are outsourcing your e-commerce business to Instacart, how does this not scare the hell out of you?

If you're thinking of outsourcing your e-commerce business to Instacart, how can this not scare the hell out of you?

Again, this is a great chart for Instacart.  It demonstrates - vividly - the degree to which it has been able to absorb much of the e-grocery volume and traffic in the US.

But it also demonstrates, I think, the degree to which it is disintermediating retailers from their online customers, putting tangible distance between retailers and shoppers to a degree that it may not be possible to make up for it.  Instacart is servicing your customers, has your customer data, and is being defined by your customers as the online grocer that they use.

How does this not scare the hell out of you?

To me, this chart is the very definition of an Eye-Opener.

Now what are you going to do with it?

Published on: March 18, 2022

The Lakeland Ledger has a story speculating about whether Publix Super Markets could see its longtime dominance in the state challenged by online offerings by the likes of Amazon.  Here's how the Ledger frames the story:

"Publix Super Markets Inc. enjoys a loyal base of shoppers who repeatedly restock their pantries and refrigerators because of its focus on customer service. The employee-owned Lakeland-based grocer is also often rewarded with high rankings on top 10 lists for its efforts to keep those customers coming back and employees happy.

"Still, will it be enough?

"With its statewide investment in infrastructure, Amazon could someday cut into that with its potential to deliver more items to Floridians’ homes than Publix. While Publix seeks to compete in the e-commerce game by delivering through Instacart, Amazon and Walmart have been heavy players in this arena, selling the most groceries via e-commerce across in the United States.

"Throughout the United States, 80% of households have access to Amazon Fresh for home delivery or in-store purchases of groceries.

"In August, Amazon announced a new robotics fulfillment center and five new delivery stations in Florida, which brought its total investment in the state to an estimated price tag of $18 billion … Amazon also operates more than 50 sites in Florida that support customer fulfillment and delivery operations, including more than 10 facilities that launched in 2020 and one fulfillment center for its Amazon Fresh orders, according to a company release. The grocery e-commerce platform is currently available with limited range within Miami, Tampa and Orlando."  And, the story points out, Amazon reportedly has plans for an Amazon Fresh physical store in Boca Raton.

Published on: March 18, 2022

The Wall Street Journal has a piece about how, in his virtual address to the US Congress this week, Ukrainian President Volodymyr Zelensky called for elected officials to put pressure on companies in their states and districts still doing business in and with Russia, and called out some specific companies, including Nestlé SA, Mondelez International Inc. and Unilever PLC, among “other giants of the food industry."

The Journal writes that "many Western companies have paused their operations in the Russian market, with some citing dismay at Moscow’s aggression and others flagging the logistical challenges of operating in a country hit by sanctions. A handful of businesses have signaled intentions to leave altogether.

"Other companies are staying. Some have cited humanitarian reasons, including providing essential goods like food or medicine. Others say their hands are tied by joint venture or franchise agreements. Then there are companies Russian prosecutors have warned of asset seizures if they withdraw from the country, as well as threats that employees could be arrested."

Published on: March 18, 2022

Variety reports that Amazon has completed its purchase of the iconic movie studio MGM.  The $8.5 billion acquisition, according to the company, means that "the storied, nearly century-old studio — with more than 4,000 film titles, 17,000 TV episodes, 180 Academy Awards, and 100 Emmy Awards — will complement Prime Video and Amazon Studios’ work in delivering a diverse offering of entertainment choices to customers."

According to the story, "The completion of the transaction comes two days after the Amazon-MGM deal received clearance from the European Union’s antitrust regulator," which ruled that the deal was not anti-competitive.  However, in the US the Federal Trade Commission (FTC) has neither approved nor challenged the deal;  Amazon was able to complete it because the FTC had not challenged it before a mid-March deadline.

However, "an individual with knowledge of the matter told Variety the FTC does not formally approve transactions; it either challenges them or it doesn’t and, should the agency choose to challenge them, the FTC may do so before or after they are consummated."

Variety points out that in addition to the James Bond, Pink Panther and Rocky movie franchises, MGM’s film catalog includes “12 Angry Men,” “Basic Instinct,” “Legally Blonde,” “Moonstruck,” “Poltergeist,” “Raging Bull,” “Robocop,” “Silence of the Lambs,” “Stargate,” “Thelma & Louise,” “Tomb Raider,” “The Magnificent Seven,” “The Thomas Crown Affair” and … on the TV front, the studio has produced “Fargo,” “The Handmaid’s Tale” and “Vikings.”

The Variety story points out that "analysts believe that it is Bond that drove Amazon’s acquisition. The spy series continues to be popular and there’s the potential that it could be built out to include shows and other spinoffs."  However, "Barbara Broccoli and Michael G. Wilson, the producing team behind the James Bond series, have creative control over the movies and have made it clear that future 007 films will debut in cinemas."  If Amazon wants to build out the franchise "to include shows and other spinoffs … those would require the sign-off of Broccoli and Wilson," who have shown little interest in doing so.

Published on: March 18, 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:  81,350,883 total cases … 996,072 deaths … and 56,822,580 reported recoveries.

The global numbers:  466,685,201 total cases … 6,089,254 fatalities … and 398,386,996 reported recoveries.   (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 76.8 percent of the total US population has received at least one dose of vaccine … 65.3 percent are fully vaccinated … and 44.4 percent have received a vaccine booster dose.

•  From Bloomberg:

"The U.S. could soon see COVID-19 cases rise again and vulnerable people are likely to need a fourth vaccine dose, one of President Joe Biden’s top health advisers warned as the White House calls for more money to fight the pandemic.

"Anthony Fauci, the longtime head of the National Institute of Allergy and Infectious Diseases and a Biden adviser, said U.K. officials are already warning him of an increase there driven by the BA. 2 sub-variant, easing restrictions and waning protection from vaccines, and that the U.S. tends to be a few weeks behind case curves in the U.K.

"'We have all three of those factors right now in this country,' Fauci said in an interview Thursday. 'I would predict that we are going to see a bit of an increase, or at least a flattening out and plateauing of the diminution of cases. And the question is how do we deal with that'."

•  The New York Times reports that "Moderna said late Thursday that it asked the Food and Drug Administration for emergency authorization of a second booster of its coronavirus vaccine for all adults, a significantly broader request than Pfizer and BioNTech filed for their shot this week.

"The request is likely to intensify the latest round of an ongoing scientific debate over how long protection from the two most-used vaccines in the United States lasts in the face of new variants.

"On Tuesday, Pfizer and its German partner, BioNTech, asked for emergency authorization for a second booster for those 65 and older. The firm’s request was based heavily on data from Israel, where such shots are authorized for a somewhat broader group.

"Federal health officials have said they are concerned about waning potency of the booster shot that was authorized for both Moderna and Pfizer in the fall. But although there are indications that regulators could move swiftly on Pfizer’s request, it is unclear how favorably they will view Moderna’s more sweeping application."

•  The Seattle Times reports that "fully vaccinated travelers soon will be able to travel to Canada without presenting a negative coronavirus test, the country’s public health agency announced Thursday. The eased policy goes into effect April 1 and applies to visitors who arrive by air, land or sea.

"Until then, travelers who are 5 and older need to take a rapid antigen test within a day of their departure for Canada or a PCR test within 72 hours of their trip. A past positive test that is at least 10 days old can also be used as proof of recovery in lieu of a test.

"Canada requires travelers to upload the details of their trip and proof of vaccination to an online system called ArriveCAN.

"Travelers who are not fully vaccinated will continue to follow those testing protocols after April 1. People who are not fully vaccinated may be denied entry to Canada and have to undergo a 14-day quarantine and additional testing."

Published on: March 18, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  Fox Business reports that "a federal labor board is seeking to reinstate an Amazon employee who was fired in the early days of the pandemic after leading a protest calling for the company to do more to protect workers against COVID-19.

"Gerald Bryson, who worked at an Amazon warehouse in the New York City borough of Staten Island, helped lead the April 2020 protest. Frank Kearl, Bryson’s attorney, said while off the job during the protest, Bryson got into a dispute with another worker. Amazon later fired him for violating its vulgar-language policy.

"Bryson filed an unfair labor practice case in 2020, claiming Amazon retaliated against him. Later that year, the National Labor Relations Board said it found merit in the complaint."

The story notes that "Amazon workers are pushing to unionize at the Staten Island warehouse where Bryson worked and at a warehouse in Bessemer, Alabama. Pro-union workers have complained of long shifts and little time to take breaks.  The Staten Island facility will start in-person voting next week on whether to form a union, while those in Bessemer are currently casting mail ballots."

Yikes.  I'm glad MNB doesn't have a vulgar-language policy (except, of course, on the site).

Published on: March 18, 2022

•  The Associated Press reports that "fewer Americans applied for unemployment benefits last week as layoffs continue to fall amid a strong job market rebound.

"Jobless claims fell by 15,000 to 214,000 for the week ending March 12, down from the previous week's 229,000, the Labor Department reported Thursday. First-time applications for jobless aid generally track the pace of layoffs.

"The four-week average for claims, which compensates for weekly volatility, fell to 223,000 from the previous week’s 231,750. In total, 1,419,000 Americans — a 50-year low — were collecting jobless aid the week that ended March 5, down 71,000 from the week before that."

•  From CNBC:

"Target has rolled out one of the most visible displays of its efforts to become a greener company: Massive carports topped with solar panels that will power a big-box store in California.

"The panels, high above the parking lot, will produce enough renewable energy to power the entire store, from its refrigeration to its heating and air conditioning, the retail chain says. And the towering structures outside offer a striking visual clue into the environmentally conscious efforts going on inside the store.

"In aisles with items like milk, ice cream and frozen pizza, refrigerators and freezers will use a natural refrigerant to cut back on emissions. All sales floor lighting has been replaced with LED, and back outside, customers who arrive in electric cars can charge them in the parking lot.

"The Target location in Vista, Calif., about 40 miles north of San Diego, has become the company’s most sustainable store — and could become a national model for the retailer."

•  From the Wall Street Journal:

"Apparel retailers and department stores are bumping up against pockets of price resistance, a sign that consumers are curtailing spending as inflation remains at the highest level in four decades.

"Macy’s Inc. tried to raise prices on some mattresses and sofas by $100, but shoppers pushed back, Chief Executive Jeff Gennette said. Clothing brand Bella Dahl raised prices on its T-shirts by about $20, then sales fell and the company rolled back the price increase. 'There was a revolt,' said Steven Millman, its chief brand officer. 'If we go any higher, we’ll do half the sales.'

"With inflation at a 40-year high, companies across the spectrum have been charging more to offset rising costs with little resistance from consumers. That trend is starting to change, especially on lower-priced apparel and furniture, according to industry executives, analysts and consumers."

“We are seeing less demand as consumers pay higher prices,” Marshal Cohen, NPD’s chief retail industry adviser, tells the Journal.  “Price sensitivity is starting to show up. There is a threshold that consumers don’t want to go over.”

Published on: March 18, 2022

•  SpartanNash announced the promotion of David Sisk, the president of SpartanNash’s military division, to the newly created role of Chief Customer Officer.

Published on: March 18, 2022

MNB fave Glen Terbeek had his own memories of Irish supermarket legend Feargal Quinn, which he shared after seeing my piece yesterday:

I was fortunate to know Feargal for many years as he was a member of Smart Store's advisory board, and through industry association meetings, and of course the golf course.  But I really enjoyed the times I spent with Feargal visiting his stores. And particularly the time I sat in a shopper feedback sessions he held in one of his stores with 8 of that store’s shoppers. He personally held these sessions every other week covering all of the stores again and again over time. 

The session was focused on the shopper’s shopping experience (good and bad) starting with when they decide they need to go to the store, pulling into the parking lot, travel through the store, checkout, and leaving to go home. The notes from each session were communicated to the other stores to create ideas.

Frequently when I go into a store today here in the US I often see Feargal’s impact.  From the up front manager’s podium to greet and help the shoppers,  to marking produce ready to use today, to pricing produce by the each vs the pound, etc.  It was all about the boomerang model as you mentioned.  

To Feargal, the local shoppers were number one and the local store associates were number one as well.  He didn’t have a headquarters, he had a support center, supporting the local stores.  Feargal spent much of his time in stores.  That says it all.

In many ways Feargal will continue to live on in the future.  Thank goodness.

Agreed on all counts.

MNB reader Monte Stowell reacted to our piece about the new Whole Foods in Washington, DC, with Amazon's Just Walk Out checkout-free technology:

The store pics you posted on your article show a very sterile and cold looking store. This Whole Foods checkout free store does not appeal to me at all. I know the pictures do not show the whole story, but it shows enough that it would not be my go to store.

There's no question in my mind that this store format won't be for everyone.  It won't even be for Whole Foods purists.  If the store felt sterile, that may in part be because we were here at an off-hour … there were very few customers.

But make no mistake - this is a format and technology that is going to kick some serious butt down the road.

We wrote yesterday about Walgreens' testing of digital screens on its cooler doors, and quoted loyalty market expert Howard Schneider's dissatisfaction with the technology.

MNB reader Wes Horvath responded:

While I do find some merit with Howard's observation that Walgreens is off base on the consumer experience component, I really have to take exception to Howard's last paragraph, where he claims to find it "especially annoying" that Walgreens is testing this concept when shelves are empty and staff is reduced. He goes on to make the assumption that Walgreens is de-emphasizing stocking shelves and staffing stores in order to focus on this proof of concept test.  "C'mon Man" as our beloved president might say. That's a real leap. What does one thing have to do with the other?

I'm pretty sure that, as a test of this technology, Walgreens will gauge consumer attitudinal feedback as part of their decision process.  But of course they will also look at any sales impact of featured products, and measure ROI, incremental sales revenue, etc.etc.  And if this technology proves it can boost sales by an acceptable degree, and consumers don't find it offensive, and there is an additional revenue stream as the retail media vertical expands, well, that sounds like a good idea.  If not, Walgreens will obviously pull the plug. 

I get your point, but I'm also sympathetic to Howard's larger issue - which is that Walgreens may be delivering a substandard retail experience, and that digital screens can't cover that up.  I think that this is a fair observation, though I'm sure that there are Walgreens store that are not substandard.  There have to be.  Right?

Published on: March 18, 2022

It almost is not worth pointing out that Steven Spielberg is one of the most successful and influential directors of his generation, not to mention one who continues to work in a variety of genres.  No resting on laurels for Spielberg.

That said, I just cannot get excited about his remake of West Side Story.  The script is by Tony Kushner, with music composed by Leonard Bernstein with lyrics by Stephen Sondheim, though their position in the story has sometimes is shuffled by Spielberg and Kushner … but for me, there isn't enough new to make the new version worth doing, and it lacks the energy of other recent musicals, In The Heights and tick, tick…BOOM!

One positive is the casting - ethnic characters are played by people of their actual ethnicity, which gives it authenticity.  Dialogue in Spanish is used without subtitles, and it totally works.  And Rachel Zegler, Ariana DeBose, and Rita Moreno are powerful (and, I think, stronger than their male costars).

But the whole thing just felt largely inert to me.  Respectable, certainly,  Well-made, of course.  But I didn't feel enthralled, and that's a problem.

I have a wonderful wine to recommend this week … the Lievland 2018 Pinotage from South Africa, a blend (it has bits of Syrah and Grenache) that I served the other day with a sirloin steak made with Korean barbecue sauce, along with basmati rice and a chopped salad.  It was terrific, and we'll be going back to get more ASAP.

That's it for this week.  Have a great weekend, and I'll see you Monday.

Sláinte!!