business news in context, analysis with attitude

Published on: June 30, 2022

Okay, it is a little weird to include in this series of videos about business lessons gleaned in the Bahamas, a segment shot in the men's room.  But I think the lesson is an important one.

Published on: June 30, 2022

by Kevin Coupe

This isn't a business story, but I can't help myself.

The Washington Post reports that in the wake of last week's decision by the Supreme Court to overturn Roe v. Wade and the constitutional right to an abortion, a different medical procedure suddenly seems to have gotten more popular.

Vasectomies.

According to the story, "Urologists told the Washington Post that they have seen a spike in requests for the procedure in response to the Supreme Court’s decision."  One Florida urologist known as the “Vasectomy King”, Doug Stein, tells the Post that "before Friday, he received four or five vasectomy requests a day. Since the court’s decision was announced, that number has spiked to 12 to 18 requests per day … Stein said his practice is booked through the end of August with vasectomy appointments, prompting him to open up more days in his schedule to accommodate patients who have recently registered. He and his associate, John Curington, said the decision overturning Roe has directly factored into their patients’ requests for vasectomies. Men under the age of 30 who do not have children are requesting vasectomies in greater numbers than before, the physicians said."

Make of this Eye-Opening story what you will.  Maybe it is men finally taking responsibility for their actions.  And maybe it is time for doctors like Stein to be giving men who have gotten vasectomies cards that certify their inability to get a woman pregnant.

Published on: June 30, 2022

The Information analyzes the changes taking place in Amazon's leadership, as "Doug Herrington will replace Amazon’s Dave Clark as CEO of the e-commerce giant group previously dubbed Worldwide Consumer, which served as the center of power for Amazon’s retail and operations businesses over the past few years of explosive growth.

"Under Herrington, the group will look quite different—thanks to a slew of executive departures, a rebranding and a dramatic reorganization—with a greater focus on retail and consumer services. The operations team, responsible for warehousing and delivery services, will be pushed down a layer to report to one of Herrington’s subordinates.

"The shakeup reflects the deprioritization of the company’s sprawling logistics arm as CEO Andy Jassy contends with a costly glut of both warehouse space and workers, a result of overzealous internal forecasts about future growth. The shift in focus from expansion to retail services is one of the biggest changes Jassy has made during his first year as CEO."

And, the story says, "It’s not only logistics and delivery team leaders who have been pushed down the org chart. Dilip Kumar, an executive who oversaw the growth and implementation of Amazon’s cashierless-checkout technologies, now reports to Hoggett, who joined Amazon earlier this year to oversee its physical retail efforts and is a Herrington direct report. Kumar previously reported to Clark.

"Shortly after he arrived at Amazon, Hoggett was elevated to Jassy’s senior leadership team. According to an internal Amazon chart seen by The Information, he now has 10 direct reports, including the incoming CEO of Whole Foods, the executives in charge of its Fresh chain of grocery stores and the team working on rapid-delivery services for groceries."

Published on: June 30, 2022

From the Wall Street Journal, an interview with incoming Whole Foods CEO Jason Buechel in which he says that "price investments are resonating with Whole Foods customers, he said, particularly as inflation is changing the way people shop.

"As prices increase, the grocer is working with suppliers and deciding how much to pass on and how much to absorb, he said. Whole Foods is considering adjusting the number of items it sells and keeping prices competitive with the rest of the food-retail market, he added."

Buechel tells the Journal that being owned by Amazon actually has given Whole Foods greater latitude in making long term investments in pricing, as well as technology and the supply chain;  formerly, as a public company, Whole Foods had to take a more short-term view and worry about share price.  And, he says that Whole Foods "aims to re-emphasize its messages on sustainability and food quality as the grocer emerges from the pandemic."

Buechel is slated to succeed Whole Foods founder John Mackey as CEO in September.

Published on: June 30, 2022

Bloomberg reports that we can "add Fourth of July cookouts to the list of what Americans will pay more for this year - a lot more.

"Ground beef prices are up 36% from a year ago, while chicken breasts gained by a third, according to a survey from the American Farm Bureau Federation. Overall, revelers can expect to spend 17% more on food for a barbecue, marking the biggest increase since the lobbying organization began tracking data a decade ago."

However, the story points out that "not all foods in the survey saw big jumps in price. Strawberries sank 16% and sliced cheese fell 13%."

Published on: June 30, 2022

Amazon said yesterday that it is launching a new retail analytics service that is designed to "offer brands insights about the performance of their products, promotions and ad campaigns. The new service, Store Analytics, gives brands anonymized insights about their products in Amazon Go and Amazon Fresh stores in the United States that use Just Walk Out and Dash Cart technologies."  TechCrunch notes that "Amazon stressed that the data that is collected is aggregated and anonymized, and doesn’t contain any personal information. The company says it doesn’t share anything that can be linked back to individual shoppers. The data that’s shared only includes totals, averages and percentages about product, promotion and ad campaign performance. For example, Amazon will share the percentage of how often a brand’s product was taken off the shelf and then purchased either during that store visit or later on Amazon.com."

Consumers also will be able to opt out of the service if they wish on Amazon's Store Analytics website.

The goal of the service is to help CPG brands “evolve and refine their assortment, merchandising, and advertising over time," Amazon says.

Bloomberg writes that "if brands find the data useful, the initiative could help Amazon recoup the massive costs associated with developing and operating the technology. People working on the project, and at rival companies building cashierless systems, have long speculated that data on what items people consider, and how shoppers navigate stores, could be lucrative. Retail analysts tend to consider cashierless shopping a technological marvel but not yet a widespread commercial hit."

However, "Amazon didn’t include pricing details, and a company spokesperson declined to share them."

Published on: June 30, 2022

CNBC reports that "electronics companies have, for years, paraded around flashy, futuristic prototypes of consumer robots. They’ve pointed to a not-too-distant future where people will have roaming robot helpers around their home that can do the dishes or even act as a personal masseuse. So far, few of those predictions have panned out, and they largely remain the stuff of science fiction."

Amazon, for example, which has been in the robotics business for years, seems to be dumbing down its robots to some degree - at a recent conference, the robotics it displayed "were designed to look more practical, and many of the devices could only do a few simple tasks."

But that's not the end of it, as Amazon is considering opening up kits program to third party developers, which could allow for the building of new skills and fast track the process going forward.

You can read the story here.

Published on: June 30, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  From Business Insider:

"Weee!, the Asian and Hispanic grocery delivery service, recently cut 150 employees including several top executives, as the startup, recently valued at $4 billion, faces a tight funding market and broader ecommerce slowdown.

"The layoffs affected 10% of the company's workforce but were targeted mostly at its corporate ranks, including the marketing team which was almost entirely laid off, according to three people familiar with the matter. CEO Larry Liu also shook up his executive ranks, with his VPs of marketing and human resources out and his CFO, Ankur Shah, set to leave in the coming weeks, these people said.

"Weee!'s retrenchment is the latest in a wave of cutbacks within the grocery delivery world. In the last few months, rapid delivery startups like GoPuff, Gorillas, and Getir laid off hundreds of employees. Earlier this year, Instacart lowered its valuation to reflect the less exuberant economic environment.

"Weee! doesn't do rapid delivery and focuses on a subset of the market of people looking to buy Asian and Hispanic groceries, but the company still benefitted from the pandemic ecommerce boom. It has raised over $800 million since it launched in 2015 and earlier this year announced a $425 million Series E funding round led by Softbank which valued the company at $4.1 billion. Its other investors include Tiger Global, DST and Blackstone.

Liu told Insider in a statement that the cuts were not a reaction to a business slowdown or the economic environment, but instead were part of its long-term strategy."

Sure.  Because laying off almost your entire marketing team always is part of your long-term strategy.

Published on: June 30, 2022

•  Walmart announced today that it has reached an agreement to acquire Memomi, an augmented reality (AR) optical tech company, a move that the retailer says "reinforces Walmart’s commitment to frictionless and omnichannel optical care.

"Since 2019, Memomi has enabled digital measurements for all Walmart and Sam’s Optical customers, across more than 2,800 Walmart Vision Centers and 550 Sam’s Clubs, and powered the Optical eCommerce experience on SamsClub.com. Acquiring Memomi, an AR company, is the next step in Walmart’s journey of offering personalized, affordable access to optical care. This acquisition furthers Walmart Health & Wellness’ strategy to deliver integrated, omnichannel healthcare, leveraging data and technology to improve engagement, health equity and outcomes."

Published on: June 30, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  The Texas Tribune reports that "grocery retailer H-E-B and the Butt Family have committed $10 million to the Uvalde school district to build a new school to replace Robb Elementary, the site of the mass shooting that killed 19 children and two teachers last month.

"The donations were made to the Uvalde Consolidated Independent School District’s new nonprofit arm, the Uvalde CISD Moving Forward Foundation, which is seeking donations to make the district’s schools more secure, help build the new school and build a memorial park at the Robb location."

•  From the Wall Street Journal this morning:

"U.S. household spending growth slowed in May as Americans faced historically high inflation with incomes that haven’t kept up with price increases.

"U.S. consumers boosted their seasonally adjusted spending by 0.2% in May, a slowdown from the revised 0.6% increase in April, according to a Thursday report from the Commerce Department.

"Personal income grew by 0.5% in May, the same as April’s rate. Adjusted for inflation, after-tax income declined by 0.1% in May, showing that wage increases have been struggling to keep up with price rises. Inflation-adjusted spending declined by 0.4% in April."

•  From the New York Times:

"Americans are becoming more pessimistic about the economy, more worried about inflation — and now, more anxious about the job market, as well.

"Fifty-two percent of American adults say they are worse off financially than they were a year ago, according to a survey conducted for the New York Times this month by the online research platform Momentive. That was up from 41 percent in April, and was by far the highest share in the survey’s five years. Only 14 percent of Americans said they were better off than a year ago, the worst in the survey’s history.

"The dour mood is also reflected in other surveys. The University of Michigan’s index of consumer sentiment this month hit its lowest level in its 70-year history. Another measure of consumer confidence, from the Conference Board, has also fallen, though less drastically.

"There is no mystery as to what is causing consumers’ bleak outlook: prices that are rising at the fastest rate in a generation. More than nine in 10 Americans say they are concerned about inflation, according to the Momentive poll, including 70 percent who say they are 'very concerned,' up from 63 percent in April."

•  In Minnesota, the Star Tribune reports that "Target Corp. recently finished remodeling its 1,000th store, passing the halfway point in a chainwide renovation that began before the pandemic and has cost billions of dollars.

"This year is the most active yet in Target's massive program. Nearly 200 full-store remodels and 200 fulfillment-related remodels, which add features like canopies in drive-up areas, are scheduled for completion.

"Amid logistics challenges and ever-changing customer demand, Target executives say they remain committed to remodeling nearly all of its approximately 1,900 store locations."

•  The BBC reports that "Heinz has stopped supplying Tesco with some of the UK's family favourite products in a dispute over pricing.

"Baked beans, ketchup and tomato soup are among the cupboard staples missing from shelves in some Tesco stores.

"Kraft Heinz, which owns the brand, said its production costs were rising but it was working with Tesco to resolve the situation quickly.

"But Tesco said: 'We will not pass on unjustifiable price increases to our customers'."

The story notes that "earlier this year Colgate toothpaste disappeared from Tesco's shelves after a similar fall-out with US consumer products giant Colgate-Palmolive."

It send a powerful message to shoppers when a retailer stakes out a position as their advocate.  I think customers are willing to put up with a little inconvenience when the retailer explains the "why."

Published on: June 30, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  From Bloomberg:

"Former Amazon.com Inc. executive Alicia Boler Davis will take over as chief executive officer of Alto Pharmacy Inc., the company said Thursday.

"Boler Davis will start on Sept. 1, Alto said in a statement. She takes over from co-founders Matt Gamache-Asselin and Jamie Karraker, who were leading the company after the previous CEO Kevin Burns exited less than a year after his appointment to rejoin yogurt maker Chobani LLC."

Alto describes itself as a full-service online pharmacy that delivers prescriptions to your door for free, seven days a week.

•  The Wall Street Journal reports that Mark Tritton is out as the CEO of Bed Bath & Beyond, as the company "reported another quarter of plunging sales that pushed its stock down further."  Tritton became CEO in 2019, and "moved quickly to overhaul the home-goods chain by cleaning up crowded aisles, scaling back coupons and doing away with popular national brands in favor of new, private-label goods."

He has been replaced by Sue Gove, described in the story as "an independent director who is stepping in as interim chief executive officer while it searches for his successor."  (Gove formerly was CEO of Golfsmith International, ending that tenure in 2014;  currently she is a member of five different boards.)

It seems increasingly clear that Bed Bath & Beyond may be a retail format that has outlived its usefulness.  In the words of one analyst quoted in the LA Times, it may be time to "stick a fork in them."  They're done.

Published on: June 30, 2022

We had a story the other day about how Starbucks is going to test three different formats in Seattle, prompting MNB reader Gwen Morrison to write:

New store concepts usually test features that can be migrated or scaled across the majority of  formats. A retro “past” Starbucks might make sense as a one-off in their first market, (along the lines of a retro McDonald's in Chicago featuring the iconic Speedee). The “present," well, is that simply the best of what’s already been done?  The Future is where an investment in innovation will most likely re-imagine the next generation Starbucks. I’d keep my eye on that one.

On another subject, from MNB reader Matt Nitzberg:

Regarding the story on lower rates of coupon usage, I’ve got an additional hypothesis based on my own experience, as well as some encouragement for Retailers and Brand owners.

My additional hypothesis: Due to supply chain disruptions over the past year or so, I found myself at the store with coupons (in hand or in app), only to find the intended product out of stock. I’m assuming this was a broad enough experience for other shoppers that it contributed to reduced coupon usage, despite the fact that the intent to use the coupon was still present.

The broader encouragement is to avoid making big decisions about issuing coupons based on the results of the study. That’s because granular data (for example, loyalty card data) has shown wide variation among shoppers and segments regarding the usage of coupons. Businesses aiming to grow sales, profit, and share should be fully leveraging the best available data to support highly personalized offers for proven coupon users, as well as testing among those who have reduced usage but may be swayed to re-engage as prices and recession concerns rise.

Yesterday we took note of a Reuters report that the Federal Trade Commission (FTC) has filed a lawsuit against Walmart, charging that the retailer has "allowed scam artists to use its money transfer services for fraud that cost consumers 'hundreds of millions of dollars' … For years, the FTC said, Walmart policy was to issue payouts even when fraud was suspected and that the retailer failed to take other actions to prevent consumers from being defrauded."

The Reuters story says that the FTC is charging that "Walmart failed to properly train staff to help them prevent consumers from sending money to scammers," and is asking the courts "to order Walmart to return lost funds to consumers and to pay civil penalties."

I commented:

I'll be interested to see how this plays out, if only for educational purposes.  If I am scammed by someone, and I go to Walmart to send the scammer money via MoneyGram and Western Union, I'm not entirely sure how Walmart would know it, prevent it, or be culpable.

I'm not saying that Walmart is blame-free.  I'm just saying that I don't really understand the mechanics of it, and am willing to be enlightened - by both sides.

One MNB reader responded:

As a store manager of a store with Western Union services, the entire staff is trained to recognize the various types of scams and fraud out there.  We take pride in helping our customers understand when a scam may be happening and stopping them from becoming a victim. This can be a very difficult task as the victim is convinced it is real (grandson in jail needs bail money or lottery winnings and need to pay the taxes up front as examples). Do we catch it all?  Probably not but we do our best.  Also, Western Union is a big help and will talk to customers about the potential scam and help them understand.

It takes a bit of due diligence. 

Thanks for enlightening me.

I explained yesterday, when commenting on a Roe v. Wade-0related business story:

Over the past few days, I've covered the overturning of Roe v. Wade from a business perspective, because I think it is a legitimate business story with implications for a lot of companies.  I've gotten a number of emails on the subject that want to engage in a political debate on the subject, including a few that referenced pro-choice people as being in thrall to Satan.  (I am not exaggerating.). I'm not posting those emails, nor am I willing to engage in this debate on MNB … it is a rabbit hole that I'm not going down, because there will be no return.  This is not the place, and so I'm going to do my level best to keep the conversation business-oriented.

By the way, a couple of people have written to me suggesting that if businesses are going to provide money to employees in anti-choice states to travel to pro-choice states to get medical care, they should also provide money to pregnant employees who carry their babies to term.  In fact, I would point out, they do - health care coverage includes pregnancy and maternity care, and usually includes maternity (though not always paternity) leave.  And, if an employee needed a medical procedure and had to travel to get it, insurance almost certainly would cover that, too.

One MNB reader reacted:

A well reasoned and written response and appropriate action on your part. 

Thanks.

I did get some questions about my use of the terms pro-choice/anti-choice, as opposed to pro-life/pro-choice, and I'll explain here what I said in individual emails.

I’m comfortable with the construct, because I’m not sure the implication of pro-choice vs.pro-life is fair … there probably are a lot of people who are pro-choice who would argue that they also are pro-life, just not in the way that it is defined in the abortion debate.  I think saying pro choice vs. anti-choice (or no choice, if you’d prefer) is actually more accurate in terms of the politics of the discussion.

I know other people would frame it differently.  This just happened to be my choice.

And finally, yesterday I commented on a mass executive reshuffling at Dollar Tree:

Interesting that "chief rat hunter" is not listed among the jobs being filled, which it ought to be since Dollar Tree had to close a distribution center that was infested.  It was back in March that I wrote, "I don't how management at this company - 'leadership' would be the wrong word to use here - are keeping their jobs."

Maybe they just decided to fumigate the c-suite.

Prompting MNB reader Steve Anvik to write:

LMAO - Maybe the funniest thing you’ve ever written! Thank you for making my day!

My pleasure.  My work here is done.

Published on: June 30, 2022

The 4th of July weekend is about to commence, and MNB will be off until Tuesday, July 5th.

I hope you have a great weekend.

Stay safe.  Be healthy.

Sláinte!