Published on: May 12, 2022
I saw a couple of stories yesterday about how Apple is going to stop making the iPod Touch, the last of a line of music players that first was launched in 2001. You can still get one for $199, but when supplies run out, the iPod will be consigned to memory. That said, it is important to remember exactly how influential the iPod was - not just in terms of Apple, but in how other innovators and consumers think about what is possible.
Published on: May 12, 2022
The Wall Street Journal this morning reports that Instacart filed "confidentially" a draft registration statement with the US Securities and Exchange Commission (SEC), a first step in the process of an initial public offering (IPO).
The New York Times explains that a confidential filing means that "it does not yet have to disclose certain data about the company. The filing does not require Instacart to follow through with an initial public offering, but it is considered a big step toward one."
From the Journal coverage:
"The filing comes as Instacart’s growth slows following a pandemic-fueled boom, when people turned to the company’s app to order groceries online rather than going to physical stores. The company raised more than $265 million in March 2021 from investors at a $39 billion valuation. It became the biggest grocery delivery company, counting supermarket giants Kroger Co. and Walmart Inc. as customers. Instacart also began delivering from nonfood retailers like Best Buy Co. and expanded its advertising business, an effort to boost sales and offset costs associated with delivery."
Instacart recently cut its valuation by 40 percent, a reflection of the degree to which its growth has slowed.
And, the Times writes: "If Instacart does go public, it will be doing so at a risky time. Wall Street, spooked by inflation and the war in Ukraine, has been cool to tech stocks in recent months, and the number of I.P.O.s fell 80 percent from a year earlier as of May 4, according to Renaissance Capital."
The Times also notes that Instacart has been engaged in discussions with both DoorDash and Uber about a potential acquisition of Instacart last year."
The Financial Times writes that "increased competition from the likes of Amazon, which has invested heavily in its grocery delivery operation through Whole Foods, and rapid delivery apps such as Gopuff have placed Instacart in a considerably more crowded market."
FT also writes that the company's CEO, Fidji Simo, "has positioned Instacart as a friend to existing grocery store players and has pledged to never carry its own inventory, unlike its rivals. The company partners with 70,000 stores and a range of retailers that represents 80 per cent of the US grocery industry."
Simo wrote in a blog posting yesterday that, “At Instacart, we believe the future of grocery belongs to those that invented it — not tech goliaths or newcomers trying to drive grocers out of business.”
Buckle up. I'm about to say something nice about Instacart…
To be fair about this, Instacart - which did an extraordinary job of stepping up to the plate during a pandemic in which retailers desperately needed a company to which it could outsource e-grocery functionality - seems to be pivoting to a business model that depends on stronger and more sustainable partnerships with client retailers.
They're pledging not to become a retailer. They're offering a platform to retailers that does not give away all of their shopper data (which for me always was the problem with Instacart's model). And they're acknowledging that the after-times will not be the same as the halcyon e-grocery days of the pandemic.
I can't say that all my skepticism has vanished. But there does seem to be a transition taking place.
Published on: May 12, 2022
Two interesting stories - one from the Wall Street Journal and the other in the New York Times - about the differences between the unionization efforts taking place at Amazon and Starbucks, two companies that have been targeted by labor organizers in recent months.
The Journal writes:
"As of May 10, more than 250 Starbucks locations have filed election petitions; the majority of those stores have not yet held or completed elections, according to National Labor Relations Board officials. The petitions cover more than 6,800 Starbucks employees who could potentially vote to unionize."
The latest of these, by the way, are in California, where two Starbucks stores in Santa Cruz voted to unionize. A third Santa Cruz store will vote on unionization next month. These are the first Starbucks stores in California to organize.
On the other hand, the Journal writes, "Amazon had only a handful of union elections to date, and most have failed. Some Amazon workers who voted against unionizing said they didn’t think the union could substantially improve their workplace. Amazon pays a starting average of $18 an hour and provides employees with healthcare, 401(k) and other benefits."
The Journal observes that a key difference between the two companies is that the Starbucks unionization efforts are taking place store-by-store, and "in small establishments with few employees, like Starbucks stores, union organizers have the advantage of personal connections, easy access to co-workers and trust … Smaller units, such as Starbucks stores, limit the number of arguments employers can make to challenge the process of forming a union, said Cathy Creighton, director of the Cornell University ILR Buffalo Co-Lab and a past lawyer for the National Labor Relations Board.
"In large establishments with many different job titles, she said, companies can delay union votes by questioning which job classifications should or shouldn’t be included in the proposed bargaining unit.
"In addition, she said, in large establishments, it’s tougher for organizers to gather contact information for thousands of employees, plan and find space for big meetings, and talk one-on-one with co-workers."
The New York Times describes the differences this way:
"The two campaigns share some features — most notably, both are largely overseen by workers rather than professional organizers. And the Amazon Labor Union has made more headway at Amazon than most experts expected, and more than any established union.
"But unionizing workers at Amazon was always likely to be a longer, messier slog given the scale of its facilities and the nature of the workplace. 'Amazon is so much harder a nut to crack,' John Logan, a labor studies professor at San Francisco State University, said by email. The union recently lost a vote at a smaller warehouse on Staten Island.
"To win, a union must get the backing of more than 50 percent of the workers who cast a vote. That means 15 or 20 pro-union workers can ensure victory in a typical Starbucks store — a level of support that can be summoned in hours or days. At Amazon warehouses, a union frequently would have to win hundreds or thousands of votes."
The Times adds:
"Amazon, with about a million U.S. workers, and Starbucks, with just under 250,000, offer similar pay. Amazon has said that its minimum hourly wage is $15 and that the average starting wage in warehouses is above $18. Starbucks has said that as of August its minimum hourly wage will be $15 and that the average will be nearly $17."
But, the story says, "Despite the similarity in pay, organizers say the dynamics of the companies’ work forces can be quite different. At the Staten Island warehouse where Amazon workers voted against unionizing, many employees work four-hour shifts and commute 30 to 60 minutes each way, suggesting they have limited alternatives."
Starbucks always has been seen as a progressive employer. Amazon, not so much … though it generally has paid people more money to work in its facilities, even if the working conditions haven't always been seen as optimal.
And yet, both are being targeted … and I have to wonder if one thing that they have in common is that their employees expect more of them. For different reasons, sure … but both Starbucks and Amazon have achieved a certain level of ubiquity in our lives, and with that ubiquity comes some level of responsibility.
That's a good thing … it is to be treasured and nurtured. And certainly not abused.
Published on: May 12, 2022
Kim Lupo, Walmart's Senior Vice President Global Total Rewards, wrote in a blog posting this week that the company is reinforcing its "commitment to the mental and emotional well-being of our associates" by "launching Mental Health First Aid training that teaches associates how to identify, understand and respond to people who are struggling with mental health challenges. This four-hour training program, which will be available virtually and in-person at the Bentonville Walmart Home Office, will prepare associates to: Recognize signs and symptoms and provide direct assistance and support … Properly reach out to emergency services on someone’s behalf … Implement the Mental Health First Aid Action Plan … (and) Access emotional well-being benefits and resources."
Lupo wrote:
"We will continue to offer 24/7 confidential counseling services with licensed therapists at no cost to all associates and their family members, and we will continue to offer our associates the opportunity to get connected anytime of the day, with confidential and anonymous virtual support groups with people who are struggling with similar issues.
"Additionally, we recently expanded a pilot program with AiRCare Health that proactively reaches out to associates enrolled in a Walmart medical plan to check-in and see how they are doing. As a result of the service area expansion to Texas, Florida, North Carolina and Georgia, more than 258,000 associates will benefit from this proactive emotional well-being approach.
"Well-being is not just the absence of illness — it is the active presence of wellness. As we head into Mental Health Awareness Month in May, benefits like these will be front and center as we work to raise awareness for those living with mental or behavioral health challenges and ensure that those who are struggling know that they are not alone. We have resources available to help. This is all part of our commitment to helping people live better."
Interestingly, there was a piece in the Wall Street Journal this week about how "one of the most sought-after management skills right now is empathy - in other words, taking a genuine interest in co-workers’ lives and what makes them tick. Empathetic leadership has long had corporate disciples, but the concept has become a bigger focus of management training and executive coaching as businesses seek ways to bolster staff worn down by the pandemic’s stresses, or at least show they are trying."
At some level, that's what Walmart appears to be doing. I'm sure there will be some folks who will think this is all for show … but I'm willing to believe that an enlightened senior management is in touch with the degree to which these kinds of services are critical going forward, in a time of great tumult and polarization.
Published on: May 12, 2022
Here's an excerpt from an "On Tech" newsletter posted by the New York Times and written by Shira Ovide:
"I’ve written about the downsides of companies that bring groceries or prepared food to our doors, like Instacart and Uber Eats. App-based fresh food deliveries take a toll on our neighborhoods and impose punishing demands on workers.
"But today I want to focus on a positive aspect of delivery apps. Newly published research from the Brookings Institution found that app companies are making fresh food available to millions of lower-income Americans who can’t easily buy it in person.
"While the researchers acknowledge problems with food delivery apps, the two analyses published Wednesday are largely a counterpoint to the notion that these services are mainly ways for relatively affluent people to save time and avoid hassle while inflicting a high cost on our communities. Delivery apps may be that, but they are also democratizing both access to and purchases of fresh food.
"Broadly, the Brookings research is a validation of the notion that good can come from technological change, and a call to action to shape emerging technologies to better serve all Americans."
Ovide goes on:
"The message from the research is that policymakers and the public should treat these apps not as novel curiosities, but as a part of the U.S. food system, one which should serve all of us and take into consideration our communities, our workforces, the environment and the economy … Their policy suggestions included permitting food stamps to cover delivery fees and other added costs of online ordering, expanding pilot programs for other government food benefits to include online purchasing and experimenting with government subsidies for internet service, so that more people could have access.
"The Brookings analysis also said that more research is needed to understand the systemic effects of all types of digital change, including delivery apps, automation in agriculture and food warehouses, technology for tracking food safety and checkout computers in grocery stores.
"It’s a useful message. Technological change is not something that just happens to us. It requires smart and effective policy to harness technology and use it to achieve what we collectively want."
Really smart. In some ways, who needs grocery delivery more than a single parent of limited means who is trying to balance work and family and make ends meet? If systems can be created that are affordable and that afford these parents the ability to do the important things that go into parenting, then that strikes me as a positive step in the right direction.
Published on: May 12, 2022
Chile-based retailer Cenoscud will spend $676 million to acquire a 67 percent stake in The Fresh Market, its first move into the US marketplace.
The Fresh Market has 160 stores (100 percent leased) across 22 states, with an average store size of approximately 21,000 square feet.
Published on: May 12, 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 current US Covid-19 coronavirus numbers: 83,953,371 total cases … 1,025,764 deaths … and 81,107,296 reported recoveries.
The global numbers: 519,262,399 total cases … 6,282,679 fatalities … and 474,088,005 reported recoveries. (Source.)
• The Centers for Disease Control and Prevention (CDC) says that 77.8 percent of the total US population has received at least one dose of vaccine … 66.3 percent are fully vaccinated … and 46.1 percent of fully vaccinated people have received a vaccine booster dose. The CDC also says that 49.4 percent of the eligible US population has not received a vaccine booster dose.
Published on: May 12, 2022
• Ahold Delhaize USA said that its Q1 net sales were up 5.8 percent to $13.68 billion, on same-store sales that were up 4.1 percent overall and 3.3 percent excluding fuel.
Q1 e-grocery sales were 4.6% to $1.08 billion.
• The New York Times this morning has a piece about "the rising cost of cooking oil," writing that "extreme weather and the war in Ukraine have tightened global supplies of the four most commonly used types of vegetable oil — staple ingredients that are as ubiquitous in home kitchens as they are in restaurants and packaged foods. In low-income countries, cooking oil represents one of the biggest weekly expenditures for poor families and the source of about 10 percent of the world’s daily calories, according to the International Food Policy Research Institute.
"But even in affluent countries, these higher prices are being sharply felt." The Times points out that District Doughnut, in Washington, DC, has seen its vegetable oil prices double in recent months and has "increased the price of single doughnuts for customers at their five shops but are trying to hold steady on the pricing for multiple doughnuts so they don’t lose too much business."
Published on: May 12, 2022
We had an open letter to Jeff Bezos the other day that was highly critical of a new Amazon Fresh store, prompting MNB reader Monte Stowell to write:
This open letter to Jeff Bezos by the 69 year old shopper is a call to action by Jeff Bezos. Does one believe that Jeff Bezos is aware of the grand opening snafus and problems at his grand openings? I do not think he is. Retail is not just about all the new tech bells and whistles. A very important part of retail is the human element, and it is obvious that this new store format is deficient in its training and expectations for making the grand opening a positive experience for its customers. The letter this gentleman wrote to Jeff Bezos was spot on as to what needs to be addressed and corrected. Thanks for posting that letter. It will be interesting the response this gentleman gets from Jeff Bezos or from someone else in Amazon.
We had a story the other day about the continuing debate about credit card swipe fees, about which major trade associations were testifying before the US Senate.
I commented:
This is an argument that seems to be without end, with very little possibility of a resolution. It is like the old African proverb about how, when elephants fight, the real loser is the grass.
In this case, shoppers are the grass.
Got the following email from an MNB reader:
Shoppers are indeed the grass, and not just because these fees will be baked inside of rising prices, but because these fees will impact small businesses in a bigger way and ultimately force some of these businesses to close their doors or raise their prices beyond what shoppers are willing to pay to “shop local". I can tell you that a HUGE part of our costs as a small grocery chain are from these fees. Between that and rising insurance costs, it’s untenable. But we have to accept cards because this is our world today.
Bitcoin anyone?
But another MNB reader wrote:
Actually, the only shoppers that are losers are the shoppers that don't use credit cards.
And you never seem to acknowledge that there are also retailer costs associated with cash and checks. The Brink's truck doesn't pick up that cash for free. I presume there is a not insignificant backroom labor in handling cash and depositing checks not to mention losses from checks that "bounce".
On the subject of Best Buy expanding beyond its traditional categories into health, fitness, personal electric transportation, outdoor products and other potentially big ticket areas, MNB reader Steve Anvik wrote:
Makes sense in that many home devices, beyond electronics to the ones mentioned - are smart devices (or have some micro processing capabilities), that some consumers will not only need assistance with .. but an opportunity for Best Buy to up sell some extended warranty.
On another subject, one MNB reader wrote:
Interesting that you report on a study by Brick Meets Click without mentioning its late founder Bill Bishop. I’m obviously wrong, but I always assumed that it was a one man show from a well known food industry pundit.
Nope. Brick Meets Click was more than just Bill, though he certainly was the guiding intelligence behind its founding.
Got the following email from MNB reader Andy Casey responding to some of our unionization stories:
Last time inflation was this bad, back in the late 70’s and early 80’s, I was a young father trying to finish college and grad school while working full time at a unionized national grocery chain to support my family. For the most part, I had little use for our union readership (often seemed more interested in their livelihood than mine) but one thing I will give them props for is negotiating early on a CPI based cost of living adjustment that kicked in every six months or so. Made a huge difference in helping members keep up with rising prices.
The other day we had a piece citing a story from the Associated Press about how "the federal government has arranged for 20 internet companies 'to provide discounted service to people with low incomes, a program that could effectively make tens of millions of households eligible for free service through an already existing federal subsidy' … The program means that 'families of four earning about $55,000 annually — or those including someone eligible for Medicaid — will get a $30 monthly credit, meaning about 40 percent of Americans will qualify'."
One MNB reader was outraged:
The estimate of “40% of Americans” will qualify for this subsidy is quite frankly obscene.
We are experiencing the highest inflation in 40 years. So let’s pour gasoline on it through more wasteful government spending! Unbelievable!
Keep in mind that, according to the AP, "the $1 trillion infrastructure package passed by Congress last year included $14.2 billion funding for the Affordable Connectivity Program, which provides $30 monthly subsidies ($75 in tribal areas) on internet service for millions of lower-income households." So the money already had been budgeted.
Maybe I'm wrong about this - and to be honest, I'm not entirely sure how the income threshold was determined - but I think helping people who might not be able to afford high-speed internet to have access to a service that is critically important to modern life … well, that doesn't seem like such a bad deal to me.
Responding to yesterday's FaceTime about how many seniors are far more tech literate than they are given credit for, one MNB reader wrote:
Amen! Preaching to the choir here, but thanks for this one. Today’s seniors are increasingly made up of the Baby Boomers who spent their adult lives adapting to advances in technology; from broadcast TV to cable and then streaming, from records to tapes to CD’s to MP3’s to music apps, the list goes on.
I often tell folks that when I got into corporate training in the late 80’s we wrote courses on legal pads then handed them off to admins who would type them up and thus begin a cycle of red ink and re-typing until we got it where we wanted. Then off to our advertising area for typesetting and, literally, cutting and pasting images on the master pages. My lobbying efforts for a PC were finally successful with a DOS IBM and a program called Professional Write. Then came Windows, then MS Office and something called PowerPoint (what’s this for?) Then ½” VHS video recording, then digital, then training delivered on a computer disc, and now we’re authoring our own web-based courses, editing digital video and images, and tracking/assigning/delivering training through a web-based Learning Management System.
This senior (I’ll be 70 next year), and many others I work with, have kept up. Here’s the kicker. My Mom worked until her last week on this earth, using email and keeping the financials for my sister-in-law’s business using QuickBooks. At the age of 88. Back in 2014. As we keep learning, the things we think we know about any group of people is often more determined by our preconceived notions than rooted in reality. Attention must be paid!
Another MNB reader wrote:
How true this story is about senior citizens! I think the retailer may want to think about the next generation of senior citizens that are in their 50’s. By the time he gets the technology in all his stores these people will be ready, willing and able to use it. My mom is 86 and uses iPhone, computer and I-pad. On the other hand my Dad at 87 …..not so much.
Regarding IKEA's expansion, one MNB reader wrote:
I live in a NO IKEA zone. They won’t deliver to me because it is too far. Ok why have a catalogue? The company seems to be very arrogant, and I think that will have to change at some point. I love their product, but am very frustrated with them.
That's such an odd turn of phrase … you'd think in 2022, there's be no such thing as a "no-any-retailer zone."
And finally, MNB reader Matt Nitzberg noticed a joke opportunity that I missed:
Regarding your item on Redbox:
“Variety reports this morning that ‘Redbox Entertainment, the DVD kiosk and streaming video company, has set a deal to be acquired by Chicken Soup for the Soul Entertainment in an all-stock transaction.’”
An “all-stock transaction” by Chicken Soup. It was right there, Kevin.
Boom! Can't believe I missed that. Thanks for keeping me honest.
