Today, retail lessons from Dilys Winn, who more than 50 years ago did something extremely innovative for the time. In doing so, she teaches us that bringing together a community of enthusiasts can be an enormous advantage for a retailer.
"Walmart is laying off hundreds of employees at e-commerce facilities across the country, as the big-box giant and other retailers brace for a tougher year ahead … A spokesperson for Walmart confirmed it was cutting jobs at fulfillment centers. In a statement, the company said it made the cuts 'to better prepare for the future needs of customers.'
'This decision was not made lightly, and we’re working closely with affected associates to help them understand what career options may be available at other Walmart locations,' the statement said."
The affected fulfillment centers are in Pedricktown, New Jersey; Fort Worth, Texas; Chino, California; Davenport, Florida; and Bethlehem, Pennsylvania.
CNBC writes that "Walmart, the nation’s largest private employer, is shrinking its workforce as many retailers plan on roughly flat or declining sales. Inflation and the shift back to services is taking a bite out of sales of goods, particularly after a Covid pandemic-fueled spending boom.
"Walmart’s e-commerce rival, Amazon, announced 9,000 job cuts on Monday, following 18,000 layoffs in January. Amazon has also closed, canceled and delayed the opening of new warehouses, as some online sales shifted back to stores. Another competitor, Target, plans to cut up to $3 billion in total costs over the next three years, but CFO Michael Fiddelke said at a February investor day that the company is 'not backing away from investments in our team and guest experience'."
KC's View:
My sense, from numerous conversations, is that Walmart's cuts are surgical, and that while the company is looking to restore some balance to its e-commerce operations, it remains committed and active on the innovation front.
I think it is a pretty good bet that hen the year is over, Walmart won't have taken as big a hit as other retailers, and will be well positioned for a future that requires flexibility.
The US House of Representatives Energy & Commerce Committee welcomed TikTok CEO Shou Chew yesterday, though "welcome" might not be the word that he would use, as both Republicans and Democrats repeatedly attacked his company as a national security risk tied to the Chinese Communist Party.
The appearance came as TikTok's ownership and influence have become matters of international debate. The Biden administration, along with a bipartisan group of lawmakers, has called for its parent company, ByteDance, to spin off its US operations in a way that would completely separate the two entities. Short of a separation, it is possible that the US Congress and the Biden administration could ban TikTok from the US.
Meanwhile, the Chinese government has said it opposes a forced spin off of TikTok's US business.
The Information reports that "Chew largely reiterated points shared by the company in the past, including highlighting its Project Texas initiative to sequester U.S. user data with partner Oracle, which he said TikTok has already spent $1.5 billion on. 'TikTok is not owned or controlled by the Chinese government,' Chew said. He said TikTok was 'building what amounts to a firewall to seal off protected U.S. user data from unauthorized foreign access.'
"During the roughly five hour testimony, Chew largely stuck to TikTok’s talking points or tried to deflect lawmakers’ questions on Chinese government policy. He did admit that some ByteDance employees in China have access to data stored in the U.S., although he said that will no longer be the case once Project Texas is done."
The New York Times describes the hearing as "a rare display of bipartisan unity that was harsher in tone than previous congressional hearings featuring American executives of social media companies," and that "Republican and Democratic lawmakers repeatedly asked Mr. Chew if TikTok was spying on Americans on behalf of the Chinese government, cut him off midsentence and angrily demanded 'yes' or 'no' answers from him."
The Times goes on:
"Over the past few years, Republican and Democratic lawmakers have increasingly coalesced around the growing animus against Chinese businesses in the United States, with government bans on exports to Chinese telecommunications companies and several bills that aim to limit TikTok and other technologies tied to hostile foreign governments.
"At the hearing, more than 50 lawmakers expressed deep skepticism of Mr. Chew’s defense. They portrayed TikTok as a danger to national security, accusing it of invading people’s privacy, harming the mental health of teenagers and leading to the deaths of some young people. August Pfluger, a Republican lawmaker from Texas, told Mr. Chew that the chief executive had inspired political unity that hadn’t been seen in three or four years."
And, the Washington Post writes:
"The hearing exposed no new evidence to support lawmakers’ unsubstantiated claims that the Chinese government has abused TikTok to access Americans’ user data or promote government propaganda. Yet lawmakers appeared atypically focused in their concerns about the national security threat of the app.
"Bipartisan momentum to ban or otherwise restrict TikTok has been growing on Capitol Hill. The White House-endorsed legislation, the Restricting the Emergence of Security Threats that Risk Information and Communications Technology Act, is now backed by 20 senators from both parties, lead sponsor Sen. Mark R. Warner (D-Va.) said Wednesday."
KC's View:
I'm not an expert on this stuff, but is strains credulity to say that the Chinese government does not have influence over ByteDance and TikTok, and is able to manipulate their operations to its own advantage. Wasn't Jack Ma, the cofounder of Alibaba, essentially taken off the global technology playing field after he criticized Chinese financial regulators?
Beyond that, there also are issues about how TikTok and its social media brethren are affecting the mental health of young people. I think it is entirely fair to say that social media is creating a national health crisis among teens, and that regulators ought to be as harsh with the tech industry as they were with the tobacco business.
There will almost certainly be challenges to any attempt to ban TikTok, possible led by businesses that use social media sites to peddle their products and influence young minds. The battle will play out in the courts, but there are enough significant concerns that this deserves a nuanced and very public discussion.
• "The results of Axios’ informal survey of COVID changes at stores and restaurants are in: Readers say they despise the move to QR menus the most — with many complaining in all caps."
• "What do we love? The clear winner was curbside pickup and increased delivery options."
KC's View:
An informal and unscientific survey, sure. But these results strike me as likely representative of the broader population's opinions.
Ethisphere, which modestly describes itself as "a global leader in defining and advancing the standards of ethical business practices," is out with its 17th annual list of the world's most ethical companies.
The list, which includes 135 companies, celebrates businesses that "have demonstrated a commitment to ethical business practices through programs that positively impact employees, communities, and broader stakeholders, and contribute to sustainable and profitable long-term business performance."
“People look to businesses today to lead on important issues and to do right by all of their stakeholders,” said Ethisphere CEO Erica Salmon Byrne in a prepared statement. “It takes vision and values to explain your why and create the programs and practices that turn those statements into actions."
No food retailers made the list, though a number of CPG companies did: Colgate-Palmolive, Grupo Bimbo, Kellogg, Kimberly Clark, and PepsiCo. Several nonfood retailers also made the list: Best Buy and Kohl's. As did Starbucks.
KC's View:
While I think that it is laudable to celebrate ethical companies, it is worth pointing out that some of this is subjective. For example, the folks trying to unionize at Starbucks and meeting what they would call inappropriate and illegal resistance probably would argue that the company's position and actions are unethical, especially as it concerns employees and "broader stakeholders."
I think lists like these are both interesting and by their very nature limited - you have to apply to make the list. So the group is essentially self-selecting.
Again, I'm not really criticizing the list. Just trying to provide a bit of context.
Amazon has a new commercial running, directed by actress Olivia Wilde, that is designed to throw a spotlight on the advantages of Prime membership. It is one of a series that it says will look at how, "through savings, convenience, health, and entertainment, Prime connects members to the best on Amazon and beyond."
In this case, the ad "follows a young woman as she encounters unwanted facial hair for the first time. Initially dismayed, she tries to remove it until she realizes that her icons have mustaches, too … she learns to triumphantly embrace and love the way she looks."
KC's View:
Commercials like these have the effect of giving people who might be struggling with self-image to feel like they're being seen. It is a small thing, but important. And, they position Amazon as being part of a more enlightened culture. Which has value.
Interesting piece in The Information that looks at the financial twists and turns being taken by Good Eggs, a 12-year-old e-grocery company that has been struggling to stay afloat.
An excerpt:
"As more startups struggle to raise money from venture capitalists and approach bankruptcy, they are going to extreme lengths to stay afloat. The latest example is Good Eggs, which delivers fresh produce and other groceries.
"The company this month raised around $7 million from Greenwich, Conn., hedge fund Glade Brook Capital Partners at a pre-investment valuation of $15 million, said two people with knowledge of the deal. That represents a 94% valuation drop from late 2020, when the pandemic boosted food-delivery services and the startup raised $60 million at a pre-investment valuation of $270 million, one of these people said. The new deal also effectively wiped out the value of stakes held by earlier investors such as Benchmark that chose not to contribute more money."
And sources provide some context:
"Good Eggs grew revenue to more than $100 million in 2020 from $59 million in 2019 as the pandemic prompted customers to buy food online, said a person with knowledge of the company. Revenue peaked at $106 million in 2021 before falling 18% to $86 million in 2022 while the company’s negative profit margins and cash burn worsened, this person said. The results suggest that the company didn’t move quickly to cut costs as its business declined."
Recently, the story says, "Good Eggs was generating more than $6.5 million in monthly revenue—a pace of $80 million annually—and has dropped its monthly cash burn to around $1 million this month from $2.5 million per month late last year by raising prices and making cuts, such as reducing sales and marketing costs, this person said. The company has $28 million in debt, including from Silicon Valley Bank and TriplePoint Capital, but has struck an arrangement that allows it to not make principal payments for the next 18 months and lowers its interest payments more than 40%, this person said."
"Federal labor regulators have concluded that Amazon’s policy of restricting the warehouse access of off-duty employees is illegal, backing a contention of the union that has represented workers at a Staten Island warehouse since winning an election there last year.
"In a written communication sent to the union on Wednesday, a lawyer for the National Labor Relations Board’s Brooklyn region, Brent E. Childerhose, said the regional office had determined that the company broke the law by adopting the access rule last summer in response to union activity, and that it had applied the rule in a discriminatory fashion against union supporters.
"The Amazon Labor Union contends that the access policy makes it difficult for workers to exercise their right to talk to co-workers about joining or supporting a union.
"An Amazon spokeswoman, Mary Kate Paradis, said that the company had adopted the rule to protect employee safety and building security, and that it applied the rule fairly and in a way that 'has nothing to do with whether an individual supports a particular cause or group.' Employees continue to have access to nonwork areas outside company buildings, she said."
• The Information reports that "Toyota is phasing out support for Amazon’s Alexa in its vehicles as it focuses on improving its own in-house voice assistant, including by potentially integrating OpenAI’s ChatGPT, The Information reported on Wednesday.
"The auto giant has already dropped support for an app that allowed users to operate Alexa in their cars through their smartphones in 2023 models such as the Corolla, Prius and RAV4. It will be phased out from additional models in the coming years, according to a person close to the automaker.
"An Amazon spokesperson noted that the company still has partnerships with Audi, BMW and Chevy, which are among the car brands that have Alexa built into their infotainment systems."
• Bloomberg reports that "Apple Inc. plans to spend $1 billion a year to produce movies that will be released in theaters, according to people familiar with the company’s plans, part of an ambitious effort to raise its profile in Hollywood and lure subscribers to its streaming service … The list of potential releases includes Martin Scorsese’s Killers of the Flower Moon, which stars Leonardo DiCaprio; the spy thriller Argylle, from director Matthew Vaughn; and Napoleon, Ridley Scott’s drama about the French conqueror … The investment is a significant increase from years past. Most of Apple’s previous original movies have either been exclusive to the streaming service or released in a limited number of theaters. The company has pledged to put movies in thousands of theaters for at least a month."
The story notes that Apple's move follows a similar strategic decision by Amazon, which, Variety notes, has made a "commitment to putting 12 to 15 new movies in theaters annually." Both companies are shifting away from their previous strategy, which focused on bypassing theaters as a way of driving people to their streaming services. Now, the companies seem to have concluded, theatrical runs for selected high-profile films could serve to promote both Apple TV+ and Amazon Prime Video.
Bloomberg writes that "Paramount, Walt Disney Co. and Warner Bros. Discovery Inc. are looking to increase their output of movies for theaters after experimenting with distributing films on streaming services alone. The one outlier in this return to the theaters is Netflix Inc., which wants its movies to appear in theaters and online at the same time, or within a couple weeks."
"The labor market continues to defy Federal Reserve attempts to cool hiring, with US applications for unemployment benefits down again last week and remaining at historically low levels.
"Jobless claims in the US for the week ending March 18 fell by 1,000 to 191,000 from the previous week, the Labor Department said Thursday.
"The four-week moving average of claims, which flattens out some of week-to-week volatility, fell by 250 to 196,250, remaining below the 200,000 threshold for the ninth straight week.
"Applications for unemployment benefits are seen as a barometer for layoffs in the US."
• Fast Company reports that New York's iconic Magnolia Bakery, which gained fame when it showed up in movies like The Devil Wears Prada and TV shows like "Sex And The City," is going to start showing up in US supermarkets.
"You won’t be able to get all - or even most - of the goodies that you can find in a physical Magnolia Bakery location, Fast Company writes. "As a matter of fact, Magnolia Bakery is starting its grocery adventure with just one treat: the new Banana Pudding Cookie … The cookies come in four-packs, but each is individually wrapped. Starting today, the cookies will be sold at grocery stores across the United States, including at Fresh Market and Harris Teeter locations, and will retail for a suggested price of $7.99 per pack."
The story says that in "announcing the grocery store expansion, Magnolia Bakery cited a recent brand study showing that more than 70% of participants said they’d rather see Magnolia Bakery launch its products in grocery stores than see it open new Magnolia Bakery locations near them." And, "If the grocery store near you doesn’t stock Magnolia Bakery’s Banana Pudding Cookies yet, you can also order them right from Amazon."
• Shake Shack, which first opened in New York as an experiment in 2004 and has turned into a chain with 290 locations in 32 U.S. states, and 150 international locations, said this week that it will open its first two units in Canada.
The CBC reports that it will "partner with two Toronto-based investment firms — Osmington Inc. and Harlo Entertainment Inc. — to open its first Canadian location in 2024." The first two are set to be in Toronto, but "the chain says it plans to have up to 35 locations across the country by 2035."
• Heritage Grocers Group announced that it has promoted Eric Stover to be CEO of its Cardenas Markets division. Stover has been chief merchandising officer for Cardenas since 2020.
I know I am late to the party, but I've just begun watching "Yellowstone," and have worked my way through season one and about halfway into season two. So far, my reaction is that it sort of combines elements of "Bonanza" with "Dallas," except that it takes place in Star trek's Mirror Universe, where people give way to the devils on their shoulders, not the angels.
That said, I'm addicted. Haven't watched "1883" or "1923" yet - these apparently are prequels to what happens in 'Yellowstone" - but I'm totally engaged with what's happening to the present-day Dutton clan.
I don't want to say too much, for fear or ruining it for anyone who hasn't yet discovered the series. But I will say this - and I'll be curious how many people agree with me - my favorite characters so far are Rip Wheeler (played by Cole Hauser) and Jimmy (played by Jefferson White). Not sure why, since they are very much supporting roles, but for me they pretty much define the ying and yang of "Yellowstone."
We're watching the third seasons of both "The Mandalorian" and "Star Trek: Picard," and I recognize that one's reaction to these series depends on whether one identifies more with "Star Trek" or "Star Wars." But for me, the latter is far, far superior, less about mythology and more about family. I've always been a "Star Trek" fan, but the magic of this series is the degree to which the characters and actors - all of them from "Star Trek: The Next Generation," with a few additions from other iterations of the franchise - are so welcome to those of us who have followed them over the years through the series' original run and countless reruns. They're older now, and more fragile, with different priorities. But in a weird sort of way, they're family. I love spending time with them, and will miss them when they're gone.
I've fallen in love with a new French red - the 2020 Domaine de la Pousterle Luberon Rouge, a Grenache from France's Rhone Valley, which has amazing body to it and just a little bit of spiciness. Once a week I make a dish I call "Shrimp It's All Greek To Me," and I usually try a bunch of different wines with it to see what I like. This was a total winner - it took me aback how good it was.
That's it for this week. Have a great weekend, and I'll see you Monday.
