retail news in context, analysis with attitude

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An LL Bean pop-up store making the rounds in New England made me think about the importance of getting out among customers, past customers and potential customers - hoisting the flag, sampling the wares, and demonstrating both relevance and resonance to shoppers.

Walmart yesterday said that it is acquiring Alert Innovation, described as "a market leader in e-grocery fulfillment automation" with which it has been working since 2016.  Alert has been providing customized technology for Walmart’s market fulfillment centers (MFCs) and began piloting the Alphabot System in Walmart’s first MFC in Salem, New Hampshire in 2019.

Terms of the deal were not disclosed.  Alert Innovation will continue to operate under the Alert Innovation brand based in the Boston area.

“I am proud that Alert Innovation is one of the most innovative and capable automation companies in operation today. Our mission to improve people’s lives through innovation will now be dedicated to Walmart customers and associates which is an inspiring undertaking,” said John Lert, Alert Innovation Founder and Executive Chairman. 

There was a Reuters story yesterday that suggested where things are going:

"Walmart Inc is planning to cut more than 1,000 jobs at an Atlanta facility that fulfills orders placed on Walmart.com.

"In a Worker Adjustment and Retraining Notification (WARN) filed on Wednesday, the nation's largest retailer said it would lay off 1,458 workers at the e-commerce fulfillment center located in Fulton Parkway in Atlanta, Georgia.

"Walmart confirmed to Reuters that it was cutting its workforce at the facility and that workers were notified about the move in late August.  'We're converting the fulfillment center on Fulton Parkway to support our growing WFS (Walmart Fulfillment Services) business,' Scott Pope, a spokesperson for Walmart, said.  'As part of the conversion, the facility's infrastructure, operational resources, processes, staffing requirements and equipment are being adjusted to meet the building’s needs'."

KC's View:

This underlines the degree to which companies are making major bets on upgrading their e-grocery fulfillment infrastructures, clearly believing that over the long term, the trends that got accelerated during the pandemic will continue to shape the industry.  And automation is a huge part of that.

I have to say that I'm thrilled for John Lert.  It was many years ago - even before he started working with Walmart, if I am remembering correctly - that he drove down from Boston to meet me at my local Starbucks and explain his vision.  My memory is that I was impressed but maybe a little skeptical about the ability to deliver on the value proposition;  I think that it just struck me as being a tough road to navigate, though everything Lert said made sense.

Obviously, my skepticism was misplaced.  This one goes into the "win" column for both John Lert and Walmart, but not so much for me.

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From the Los Angeles Times:

"After proliferating globally, a historic wave of avian flu has entered Southern California, where it is worrying farmers and bird lovers and could add to complications with supply chains and food prices.

"Already, poultry operations have had to euthanize domestic flocks of chickens and turkeys, while thousands of wild birds have also died. Wildlife experts say they are seeing a wave of dying birds moving south — already as far as Irvine — as the fall migration begins.

"Authorities describe the surge as 'unprecedented' in scope, breadth and lethality.  In North America alone, an estimated 50 million birds have succumbed, which experts say is probably a vast undercount. And though government officials are primarily concerned about poultry farms, the epidemic has struck wild birds, too — from waterfowl to raptors and vultures … Humans are not thought to be at risk for infection, but the fact the flu has spread to some mammals concerns experts, given that humans are mammals."

KC's View:

I've had a variety of conversations with retailers who have suggested to me that there could be a real shortage of turkeys for Thanksgiving this year because of bird flu-related issues.  They're trying to figure out alternative sources, and maybe even how to encourage customers to embrace alternative options - a new tradition of steak for Thanksgiving, perhaps? - going forward.

(Not a problem in my house.  We made steak and short rib macaroni and cheese our holiday tradition years ago.)

I do think that as a culture we need to retire the word "unprecedented."  The one thing that is not unprecedented, it seems to me, is that we're going to get slapped upside the head by something almost daily.  A pandemic here, potential nuclear armageddon there … it's always something, as Roseanne Roseannadanna used to say.

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CT Insider has a story about how years before Wegmans opens its first Connecticut store on Route 1 in Norwalk, one supermarket competitor - just a quarter-mile or so away - already is getting busy competing.

Here's how the story frames the scenario:

"ShopRite customers in Norwalk will see the bustle of activity near the entrance before long, as a new addition carves out space for home deliveries for people picking out selections from home.

"But it is the action shoppers will take in at the rear of the store that Tom Cingari Jr. sees as most important — the section where employees are prepping food for both aisles and delivery vans — that he thinks will bring new customers to ShopRite, in advance of the Norwalk arrival of one of the most formidable names in the industry.

"Grade A Markets is in the midst of an upgrade to its ShopRite store in Norwalk, ranging from new interior decor evoking farm stands, to an exterior addition for delivering groceries, to additional kiosks for self-checkout.

"The ShopRite renovations will be complete long before Wegmans breaks ground on its first Connecticut store a short distance up Connecticut Avenue, on the heels of its successful debut just west of Greenwich in Harrison, N.Y.

"'We're going 180 degrees from what shoppers are used to from a design perspective,' said Tom Cingari Jr., vice president for Grade A Markets, during an interview last week at the ShopRite store in Norwalk.  'When you walk into the meat department for instance — totally brand new, like you are walking down one of the streets over in SoNo'."

The story says that "Cingari said that Grade A Markets had the wheels in motion for the ShopRite renovation long before Wegmans signaled its intent to build a new store."

KC's View:

This is a story with which I have some personal familiarity - the Grade A ShopRite on which the story focuses is about three miles up the Boston Post Road from where I live.

The Grade A ShopRite, as I've described here before, is just one of numerous retailers likely to be affected by the Wegmans arrival.  Others include the original Stew Leonard's, Ahold Delhaize-owned Stop & Shop, Costco, Walmart, Trader Joe's, CTown, and Palmer's Market.

I was in Grade A the other day, and I'd like to gently suggest that these renovations are long overdue - the store struck me as tired, beaten up and badly in need of modernization.  That said, it also had a completely filled parking lot … so something is working.  (ShopRite stores always are tough competitors.). Compare that to the Stop & Shop across the street, where there were plenty of parking spaces to be found, and which feels to me to be even more worn out than the Grade A.

These stores are smart to be launching their competitive efforts now, instead of waiting until Wegmans opens it doors.  Stew Leonard's also is engaged in a major remodel that will bring the original store up to par with some of the newer stores that it has built in recent years.  As in the case of Grade A, the project is said to have been planned before Wegmans announced its intentions, but there is no time like the present.

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•  Fox Business reports that "Tesla founder Elon Musk announced PepsiCo will be the first recipient of his company's electric semi-trucks, which are set to finally start production after lengthy delays.

"Musk said in a tweet on Thursday that the battery-powered Class 8 truck, which sport a 500-mile range and are 'super fun to drive,' will arrive on Dec. 1.

"The trucks are expected to reduce fuel costs and overall fleet emissions for the company."


•  Elektrek reports that "Amazon is ordering 20 electric trucks from Volvo as part of its electrification effort for its large delivery and supply chain fleet … Volvo Trucks will deliver fully electric heavy-duty trucks to Amazon in Germany by year end. The 20 Volvo FH Electric are expected to drive more than one million road kilometres annually, fuelled with electricity instead of diesel.

"The Volvo FH Electric is an 'up to 44 tonnes GCW' capacity truck with a range of up to 300 km (186 miles)."


•  Reuters reports that "IKEA's home deliveries will be made by electric vehicles by 2025 as part of a target at the world's No.1 furniture brand to drastically reduce greenhouse gas emissions over the next eight years … some cities (are) already fully electric for home deliveries, and many were working hard to build the infrastructure needed."

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With brief, occasional, italicized and sometimes gratuitous commentary…

•  From  Bloomberg:

"Amazon.com Inc. is shutting down tests of its home delivery robot, the latest sign that the e-commerce giant is starting to wind down experimental projects amid slowing sales growth.

"Work on Scout, an autonomous machine launched about three years ago, has already been halted, according to a person familiar with the situation. Amazon spokesperson Alisa Carroll said the Scout team was being disbanded and would be offered new jobs in the organization. About 400 people were working on the project globally, according to the person, who requested anonymity to discuss a private matter. A skeleton crew will continue to consider the idea of an autonomous robot, but the current iteration isn’t working."

Lessons:  Amazon is willing to take big swings, and willing to admit when it has struck out.  

Question:  What did Amazon learn from this failure that it will apply to some other project, which likely - is history is any indicator - to be an enormous success?

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•  From the Associated Press:

"More Americans filed for unemployment benefits last week, the largest number in four months, but the labor market remains strong in the face of persistent inflation and a slowing overall US economy.

"Jobless claims for the week ending Oct. 1 rose by 29,000 to 219,000, the Labor Department reported Thursday. The previous week’s number was revised down by 3,000 to 190,000.

"The four-week moving average inched up by 250 to 206,500.

"The total number of Americans collecting unemployment aid rose by 15,000 to 1.36 million for the week ending Sept. 24."


•  From the Wall Street Journal:

"U.S. employers added 263,000 jobs in September, continuing a gradual cooling pattern in the labor market as high inflation and rising interest rates weighed on the economy.

"The unemployment rate fell to 3.5% from 3.7% in August, the Labor Department said Friday, matching a half-century low that was last reached in July, a reflection of people leaving the job market. Wages rose 5.0% in September from the same month a year earlier, a slower pace than August’s 5.2% annual rate."


•  Kroger said this week that the new line of meal kits developed by television chef Rachael Ray for the retailer's Home Chef business now will be available in its banners' stores nationwide.

According to the announcement, "The first Rachael Ray Home Chef meal kit, in stores now, guides customers through an easy-to-follow recipe created by Ray herself for a delicious Steakhouse Burger with Dijon mushrooms and onions. The series will include meals like Pork Lo Mein with carrots and bok choy, Spicy Sloppy Joes with oven fries, and more.  New meal kits featuring Rachael Ray recipes will be available each month in more than 1,300 stores across the Kroger Family of Companies through mid-March."


•  From the New York Times this morning:

"Shipping and commodities prices have seen steady declines recently, but Costco Wholesale Corp. isn’t yet in a position to pass savings on to customers, the CFO said.

"Pricing at the retailer’s 839 global warehouse stores hasn’t decreased, according to Chief Financial Officer Richard Galanti, despite the lower prices for shipping goods and for things like gasoline and steel. Costco in some cases locked in prices it pays to suppliers months ago and inflationary pressures from rising labor costs persist, which means the drops in shipping and commodities prices aren’t necessarily benefiting the company’s balance sheet yet."

•  Stater Bros. Markets announced that Phil Smith is retiring as chairman of the company, to be succeeded in the role by Pete Van Helden, who will retain the CEO title.

Smith, who has been with Stater Bros. since 1987, came out of retirement to become chairman in 2016 following the death of longtime chairman Jack Brown.

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Got the following email yesterday from MNB reader Tom Jackson:

In response to your “Common Language of Food” – it reminded me of something I have always said  “  The shortest path to a person’s heart is through the stomach."

You're playing my song.  Both professionally - I've been preaching that here for years - and personally.

I talked about the "Common Language of Food" in my faceTime video yesterday, recorded at the Big E - a state fair "on steroids" featuring the six New England states.

MNB reader Tom Gordon wrote:

Such a great experience to visit!

I do have to call out, I always go to the Maine booth, not just because I’m originally from Maine.  I think there are other states that also do the baked potato to try to steal some of Maine’s thunder, but its nice that a Maine staple got some love.

It also reminded me of the story in the Portland Press Herald about Maine potatoes being shipped west to supplement a poor crop out west earlier this year…

"Westward Ho! Maine potatoes travel far after Western drought:  While Maine is known for its lobsters, the state was once the nation’s potato capital through World War II. Other states later stepped up production in the 1950s. Idaho and Washington State are currently Nos. 1 and 2 while Maine ranks ninth, according to the USDA."

Thanks for sending some love to New England and the Big E, as well as the humble Maine potato!


Reacting to yesterday coverage and comments about the Major League Baseball playoffs, one MNB reader wrote:

The major problem with MLB is the lack of a salary cap & floor which means the coastal large markets play “meaningful baseball” in October.  It’s the same every season – LA and NY (oh, and St Louis).   Expanding the playoffs did nothing but give lip service to “competition” and the expansion will now stretch the World Series into November.

Sorry, but baseball needs to be over by Halloween and it would be nice to see some other teams once in a while, and not just the ones like Kansas City who catch lightning in a bottle every 20 years or so.

I have no problem with a salary cap as long as there also is a salary floor - the Oakland Athletics should not be allowed to have an annual player payroll that is more than $200 million lower than the team with the biggest payroll.  (That would be the New York Mets.  Though, I have to admit that as a Mets fan, I'm less concerned about spending these days than I was under previous ownership.)

That said, the Seattle Mariners are ranked 21st out of 30 teams in terms of payroll, and the Cleveland Guardians are ranked 28th.  Both are in the playoffs.

The Boston Red Sox are 6th, Chicago White Sox are 7th, Los Angeles Angels are 10th, San Francisco Giants are 13th and Chicago Cubs are 14th - and none of those teams are in the playoffs.  So success also has to do with how you spend money and - regardless of your payroll - how your team performs.  Money is just one (though a big) factor.

As for being over by Halloween … Take your point.  But, I must tell you that I have an early November birthday, and as a kid I always was sorry that there wasn't baseball on my birthday.  This year, there is at least the possibility that Game 6 of the World Series will be played on my birthday, and I'm totally cool with that.


And finally, this note yesterday from MNB reader Jeff Gartner:

Wow Kevin, I was surprised (but not really) at the negative vehemence of a couple of your commenters in today's MNB. I didn't realize you were forcing them to read MNB. If a person doesn't like what you're  reporting and commenting on, my goodness, just don't read it. And it's free! So no worries about stopping and not getting what you paid for.

BTW, you said you might be getting "older and crankier."  Is that the onset of transitioning into a "curmudgeon" (I always loved that word)? 

Maybe.  Though I'd like to think of myself as a lovable curmudgeon.

But I love it when people disagree with me and express their views. That's what I signed up for.

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In Thursday Night Football action (though "action" may be the wrong word to describe this awful game), the Indianapolis Colts defeated the Denver Broncos in overtime, 12-9.

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Sometimes, water finds it own level.

That's what I was thinking yesterday when Netflix announced that it will premier Glass Onion: A Knives Out Mystery in theaters for one week on November 23 before making it available for streaming worldwide a month later.

The New York Times writes that "the largest theater chains — AMC Theaters, Regal Cinemas and Cinemark — have all agreed to the deal, a first for the top exhibitors. Cinemark screened Netflix films in the past. But Regal and AMC previously refused to work with the company because it would not agree to the exclusive theatrical release periods and financial terms that are usually offered by traditional studios. Terms of the deal for Glass Onion were not disclosed.

The original Knives Out came out in theaters in 2019 and was a big hit, which led Netflix - always seeking proprietary content to differentiate itself from the streaming competition - to spend $465 million to make two sequels.  

The new release schedule is a recognition by Netflix that there may be some value for a theatrical release of what is perceived as an "event."  It also is an recognition on the part of theater chains that they have an eroding business model and that changes have to be made.  (The Times points out that during September, "theaters generated just $328 million in ticket sales. That was the lowest number in September since 1996, with the exception of the pandemic year of 2020.)

I don't know where I'm going to see Glass Onion, but I'm all-in … I was a huge fan of Knives Out.


I had a little bit of a flashback this week, as I watched Margin Call, the excellent 2011 drama written and directed by JC Chandor, which looks at a particularly perilous 24 hours during 2008 in the life of the American economy as seen through the events at one Wall Street investment bank that has made, to say the least, a series of bad bets.

The acting is uniformly great - of Paul Bettany, Jeremy Irons, Zachary Quinto, Simon Baker, Demi Moore, and Stanley Tucci all bring a lived-in quality to their characters.  (There is one problematic actor in the cast - Kevin Spacey, who it is hard to watch without thinking about all the allegations against him.  But in this case, I got past it … largely because his character is so morally compromised.)

Also, fantastic dialogue, some of which really resonates as we go through another period of economic uncertainty.  Examples…

At one point, Tucci's character, Eric Dale, says that in a previous life he was a construction engineer and once built a bridge, which offered more tangible rewards than investment banking:

It went from Dilles Bottom, Ohio to Moundsville, West Virginia. It spanned nine hundred and twelve feet above the Ohio River. Twelve thousand people used this thing a day. And it cut out thirty-five miles of driving each way between Wheeling and New Martinsville. That's a combined 847,000 miles of driving a day. Or 25,410,000 miles a month. And 304,920,000 miles a year. Saved. Now I completed that project in 1986, that's twenty-two years ago. So over the life of that one bridge, that's 6,708,240,000 miles that haven't had to be driven. At, what, let's say fifty miles an hour. So that's, what, 134,165,800 hours, or 559,020 days. So that one little bridge has saved the people of those communities a combined 1,531 years of their lives not wasted in a (expletive deleted) car. One thousand five hundred and thirty-one years.

At another point, Irons, as the bank's CEO, points out to Spacey's character that he is "one of the luckiest guys in the world, Sam. You could been digging ditches all these years."  The response:

That's true. And if I had, at least there'd be some holes in the ground to show for it.

And finally, this ominous line from Simon Baker's risk management executive:

“Sometimes in an acute situation such as this, often, what is right can take on multiple interpretations.”

Yikes.

If you've never seen Margin Call, check it out.  And if you have, revisit it - it is a terrific and perceptive piece of filmmaking.'


My wine of the week is the 2021 Domaine Sautereau Sancerre, a refreshing white wine that has a nice bit of volume in its mouth feel.  Just lovely.


Guess where I was…


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

Sláinte!!

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