business news in context, analysis with attitude

Published on: October 27, 2016

This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy.

I normally am in general agreement with the rock that is at the front of my local Stew Leonard's. You know, the one that says that rule number one is "the customer is always right," and that rule number two is, 'when the customer is wrong, re-read rule number one."

When I say "general agreement," I mean that I think the customer usually needs to be treated like he or she is right. But not always.

I was in Columbia, South Carolina, last weekend, and encountered a story that vividly illustrated how wrong a customer can be.

The story happened at a Cracker Barrel restaurant, where, reportedly, a couple in their mid-fifties had their dinner and, instead of leaving a tip for the waitress, instead left her a note written on a napkin. The note was riddled with grammatical errors and misspellings, but the meaning was unmistakeable. Here it is ... just as written:

Dear Renee, Thank you for your excelent service today – your a good waitress. Here’s your tip:

The womans place is in the home. You’re place is in the home. It even says so in the Bible. You may think that your contributing to your household by coming into work, but your not. While your in here ‘working’ this is the reason your husband must see another women on his way home from a long day at his work. Because you should be takeing care of the household duties. You may think what you are doing ‘working’ is right, it is really essentially a disgrace to his manhood and to the American family. So instead of coming to your ‘job’ and looking for hand out’s to feed your family, hows about going home and cleaning your house and cooking a hot meal for your husband and children, the way you’re husband and God intended, and (I swear to you, this was in the note) help make America great again. Praying for families and our nation.

Love, The Watley’s

First of all, let me be clear. If this is the arrangement that Mr. and Mrs. Watley have, that's okay with me. None of my business. I hope they are very happy together, and that Mrs. Watley is completely fulfilled by cooking and cleaning so that Mr. Watley won't be tempted to break his marital vows.

Beyond that ... give me a break.

I don't want to dwell on what I view as the total arrogance of this couple. Not that it matters, but it ends up the waitress, Renee, is single, has no children, and is working her way through school. But that really doesn't matter, because even if she were married with six children, it is her right to work or not. I guess if they didn't want to leave her a tip, that'd be fine ... but it is not their job to tell her how to live her life.

It really makes my blood boil.

What really makes America great is that Renee can live her own life and make her own decisions. She doesn't need help from the Watleys or anybody else.

But I do think that this is a moment when Renee's employer has the opportunity to step up ... and provide a lesson for customers like the Watleys and an example for other employers.

Maybe it is time for some sort of advertising campaign that says, essentially, that they are proud of all their employees. No matter what color they are, whether they are straight or gay, married or single, old or young ... that they are proud because these employees, no matter who they are, make Cracker Barrel a success through their hard work and commitment.

Maybe they ought to come right out to customers and say, "Here's a tip for you - they don't come any better than Renee." Or Tom. Or Mary. Or whoever.

That's a message that every company ought to send about their employees. It is a message that every company ought to communicate to their employees.

We are who we are because of you. Not in spite of you. And any customer who does not think that is flat out wrong.

That's a message worth communicating.

It is what is on my mind this morning. As always, I want to hear what is on your mind.

Published on: October 27, 2016

by Kevin Coupe

The Washington Post reports on a new Mintel study saying that "Americans increasingly don’t want to leave their homes - not even for food."

The story says that "about half of U.S. adults said they had ordered food delivery in the past three months ... Among them, nearly 60 percent said they had done so to avoid venturing out into the world.

"Other reasons for ordering in: Being able to catch up on television shows and movies (cited by 41 percent of respondents), and the appeal of eating alone (about 25 percent)."

The report goes on: "Unsurprisingly, food delivery was most popular among millennial men in urban areas, with 69 percent of them having ordered in during the past three months, compared with 58 percent of women aged 18 to 34. Overall, 45 percent of Americans of all ages had ordered restaurant delivery of some kind."

There is a business impact in these numbers: "As a result, companies including Amazon, Uber and Google have added restaurant-delivery services in recent months ... At Grubhub, one of the country’s largest delivery companies, revenue hit a record high of $120.2 million last quarter. The Chicago-based company processes roughly 271,100 deliveries per day, more than double what it did three years ago."

This is what I call an Eye-Opener.

Though I'm not sure it says entirely positive things about the culture.

Published on: October 27, 2016

Ahold Delhaize-owned Peapod has announced that it is teaming up with Gina Homolka, blogger, cookbook author and founder of the Skinnytaste brand, to offer both meal kits and access to easily shoppable exclusive recipes.

After accessing the recipes via Peapod, the company said, "with just one click customers can seamlessly fill their Peapod cart with the ingredients for at-home delivery. Peapod is also introducing the Skinnytaste by Peapod Chicken Cacciatore Meal Kit this fall featuring all of the ingredients pre-measured and pre-cut for stress-free cooking."

"Gina is at the forefront of the digital food community and was a natural choice for Peapod to collaborate with on content creation and product development," says Tony Stallone, Peapod's VP of Merchandising, in a prepared statement. "We're viewed as a solution to help our customers get a delicious dinner on the table. We understand this takes more than just groceries and that's why we have created one-click, ready-to-cook meal kits, a library of shoppable recipes, and quick how-to videos."

Published on: October 27, 2016

The Seattle Times reports this morning on a new survey from Morgan Stanley suggesting that while Amazon and Costco are both Seattle-based companies that "fight for the hearts and minds of a similar set of well-heeled customers willing to pay an annual fee" for either access to products to expedited shipping, it seems entirely likely that they can co-exist relatively peacefully.

"Based on a survey of some 2,700 people," the story says, "investment bank Morgan Stanley said in a report Wednesday that 'Costco and Amazon can coexist.' In fact, 45 percent of Costco members had a Prime membership, showing a high degree of overlap. 'Members of both Costco and Prime have not and generally do not intend to spend more with one retailer/e-tailer at the expense of the other,' the report says.

Two other notes from the Times story...

First, Costco's position seems to be that its advantage is "quality and quantity at the lowest possible price," in the words of CFO Richard Galanti.

Second, the story quotes a recent Cowen & Co estimate that there are 49 million Amazon prime members in the US (a figure Amazon does not confirm), a number that has doubled in just the last three years ... while the warehouse club business has been stagnant in terms of membership size.

“Our key take-away from the survey is both Costco and Amazon have very loyal customer bases, and this loyalty should serve as protective moats around their businesses,” the Morgan Stanley analysts say.

Published on: October 27, 2016

The Washington Post reports this morning that online deals site Groupon is buying rival online deals site Living Social. Terms of the deal were not disclosed.

The story notes that Living Social was once hyped as being worth $6 billion, but lately the business has "sputtered," with the company having laid off more than half its workforce.

Groupon "has also been struggling," the story says, and this week "reported a loss of nearly $38 million on revenue of $720. 5 million in the quarter ending Sept. 30. Last year, Groupon said it would lay off more than 1,000 employees as it shuttered offices in six countries."

Published on: October 27, 2016

In the UK, Retail Gazette reports that Tesco "has rolled out new Tap&Tag technology, which aims to replace paper receipts completely with digital ones."

The story says that the new system will allow consumers "using a contactless card or mobile phone payment" to "simply tap a console at the checkout counter and receive their receipt via email instantly."

Published on: October 27, 2016

• The Washington Post this morning reports that Walmart plans to expedite store traffic this holiday season by "investing in specialized teams of store workers known as 'holiday helpers,' recognizable by their bright yellow vests, Santa hats and their festive shoulder bags. These staffers are going to be primarily focused on keeping checkout lines moving as efficiently as possible: They might direct you to an available cashier, open up an extra register, or run back into the aisles to get an item you forgot to grab."

The story goes on to say that "Walmart’s investment in holiday helpers is evidence that, even in the digital era, retailers are focused on fine-tuning the in-store experience. This is especially essential for a retailer such as Walmart, which still draws the vast majority of its sales from brick-and-mortar stores."

Published on: October 27, 2016

...with brief, occasional, italicized and sometimes gratuitous commentary…

• Fortune reports that Target hopes to cut through both the holiday sales clutter and election tumult by "tweaking its media mix" and leaning "more on social media sites like Pinterest and cable television channels like the Food Network and home improvement channel HGTV, and advertise more heavily in move theaters."

Fortune also notes that "shoppers can expect to see Target, eager to return to sales growth, focus more on deals and value than it did in 2015 - since it is, after all, a discount retailer. Some 60% of messaging in Target’s ads and social media campaigns will focus on value, up 20 percentage points over 2015, according to the company."

CEO Brain Cornell says that while there is a lot of noise out there at the moment, "We’re entering the holiday season with a consumer who is feeling good about the state of play,” and he argues that this in large part is because of higher wages, lower gas prices, and lower grocery prices. The premise is that an optimistic, even "joyous" message from Target will find a receptive audience.

Wait a minute. If people are feeling so good about higher wages and lower prices, how come there is so much noise out there about how the country is in such lousy shape? And as for consumer optimism ... let's see how people feel on November 9.


• USA Today reports this morning that fast feeder Arby's plans to begin testing venison sandwiches is select markets, describing it as "100% deer meat,  with premium cut top and bottom round steaks from the hind quarter of the deer." The meat is said to be "free-range farmed deer that feed on fresh grass."

According to the story, "The new sandwich will be offered for a limited time at 17 Arby’s restaurants across the country ... the locations were chosen in heavy deer hunting areas in Wisconsin, Minnesota, Michigan, Pennsylvania, Tennessee and Georgia."


• Business Insider reports that Chipotle, still trying to regain its mojo after a debilitating series of food safety problems that affected traffic and sales, has decided to no longer invest its Shophouse chain, which specializes in Asian food. The company will "pursue strategic alternatives" for Shophouse, and "will instead focus its efforts on its namesake brand and pizza and burger concepts, Pizzeria Locale and Tasty Made."

Published on: October 27, 2016

• The Network of Executive Women (NEW) announced yesterday that Joan Toth, a founding member of the organization who was named executive director in 2002 and appointed to the new post of president/CEO in 2011, will step down at the end of the year.

"After growing NEW from a fledgling organization with a handful of members and partners to the great organization it is today, it’s time to move on to the next chapter of my career,” Toth said. "I will stay on through the end of the year to ensure a smooth transition.”

NEW has begun a search for Toth's successor.

Published on: October 27, 2016

Got the following email from an MNB reader:

In your post about Amazon's 3rd place in the denim market, I found the most interesting bit to be the top 2 places- Nordstrom and Old Navy. I think it's telling that the top 2 denim retailers represent essentially the polar extremes of the mass market in terms of quality/price.  It would seem that Amazon has figured out how to live in the middle, while Kohl's and Macy's still struggle.  Could be an interesting case study for grocery retailers who are struggling to find how to survive in the widening gulf between Aldi and Whole Foods.

Keeping mind that the denim market we're talking about is online - not the total market - you're absolutely right. It could be that most retailers will have to occupy either end of the spectrum, and that Amazon's dominant position will be firmly in the middle.

If this is true, that is a potential roadmap for how to compete with Amazon ... because it isn;t called the "mushy middle" for nothing.




Regarding the potential advantages that Kroger's c-stores may give it in any long-term battle against Amazon, one MNB user wrote:

The point being made about Kroger having an advantage in owning convenience stores is valid only if Kroger chooses to reinvest in its properties.   In our market, they have owned a group of stores they purchased from a competitor almost 30 years ago.  The closest Kroger supermarkets would be at least 70 miles away.    During this time, Kroger has spent almost no money on any of their Kwik Shop locations, other than a coat of paint or a minor cosmetic facelift.

Kwik Star/Kwik Trip of LaCrosse, WI has opened six new stores in our market within the last 24 months and has taken a large share in a very short time, primarily because their competitors were 10 to 20 years behind in updating their stores.

From another reader:

Being a loyal Kroger (Fry’s) shopper, I can tell you one of the big attractions of their C-Stores is that you save up to 40 cents per gallon based on store purchases. This is a benefit of using their customer card. Hard to believe that Amazon couldn’t duplicate this program for Prime users. I’m sure that there are fuel retailers who would be tempted to do a deal to get all that traffic.




Responding to the criticism of CVS for not going far enough when it banned tobacco products, one MNB user wrote:

Some people just need something to complain about KC, and instead of applauding CVS for removing tobacco products, go after the foods they carry.

What would they have CVS do, sell prescription drugs and nothing else? Come on!




MNB reader Beatrice Orlandini had some thoughts about Michael Sansolo's column about business lessons learned from the new Bruce Springsteen autobiography:

Oh Michael, only a great fan of the Boss like you could write such a beautiful article!

I haven't read the book yet but have seen great reviews even on the Italian press.

With all these comments in mind I can only feel even safer in buying it.

This said, this proves that lessons - non only for retail but life in general - can be found anywhere. Even at a rock concert or in a rock star's autobiography.

Thanks for reminding!

Don't forget business lessons from the movies. I think there's a book about that...




Got the following email from MNB reader Tony Moore:

Have to pass along an experience that I think you would appreciate. I shop at a Giant (Carlisle). Recently they installed near the front of the store reserve parking spots for Associate of Year and Month.  As the store is never that busy, it's not really pushing customers to the back of lot, but I was still a bit taken back that a business would visibly put employees in front of customers. Several months in I've never seen the spots occupied.   Yesterday I had an occasion to go to Customer Service and decided to jokingly asked if the Associates had either resigned or been let go.  The two employees at the desk expressed no knowledge of rewarding these reserved parking spots to these recognized Associates.  I was then informed that the Associate of the Year wouldn't be able use the spot since he doesn't drive.

Strikes me as a lose, lose, lose program.  Shoppers  told employees are to be to be shown preference over customers, employees never communicated to about the rewards of being selected in a recognition program, and such valued employees are unable to take advantage of this recognition.  If I was to ever see a manager in the store, I'd pass along my thoughts.



Got several emails responding to Kate McMahon's column about Martha Stewart's ability to rebuild and maintain her brand.

One MNB user wrote:

Why would your waste you time on a column of a wash-up/convict that is little to no interest on a blog like this? She a total has-been and this delivery service will go nowhere just like blue apron. She will collect a few million and her partners will get screwed in the process.

Post another story in three years telling everyone of the success and I will then be a believer.

You haven't been paying attention. Stewart got out of jail in March 2005, and since then has continued to grow her brand in efficient and effective fashion. I'm not a big fan, but I respect her ability to adapt and evolve and get past some pretty big hurdles in retaining her cultural sway.

From another reader, Jerome Schindler:

I am not a fan of Martha Stewart.  I have always gone out of my way to avoid buying anything with her (or Donald Trump's) name on it.

However, I thought sending her to prison on that insider stock trading charge was a major overkill and totally out of line with punishment of others for "crimes" of that nature.  I think her notoriety worked against here in that instance.

That said, from what I have read she handled it well and became a better person for it and I greatly admire her for that.




Regarding Whole Foods' decision to sell Purple Carrot meal kits in select stores, and my suggestion that the retailer could take the learnings and start its own meal kit business, one MNB user wrote:

Kevin, not sure I am in agreement with you on this one. Given the supply chain and ingredient complexity of the business, much more likely, Whole Foods is testing the Purple Carrot with the goal of purchasing the business if the test works out.

Fair point.




We continue to get email about the protests by NFL players over concerns about racism, being staged at games around the country.

MNB reader Mike Winterbottom wrote:

Call me altruistic, but … I guess it all boils down to what any given person believes is the reason why we all typically stand side-by-side and pay respect to the nation’s flag, prior to a public event.  I was always taught that this is one of the few moments during which we stand together to demonstrate our respect for the country in which we all live, and acknowledge all of those who have made the ultimate sacrifice for that country.  A symbol, yes … but there are very few moments that I believe we can all agree are simply unassailable, with regard to whether or not they are deserving of our unfailing respect … a funeral for a fallen soldier’s funeral would be one, and so would that brief moment just prior to public events during which we place our hands over our hearts and show gratitude to all who have fallen for our sake.  While I respect the right, and applaud the courage required, to protest an issue in the face of significant adversity … I simply have no empathy for those who choose to do so on a sacrosanct platform such as the funeral for a fallen soldier … or the honoring of all who have fallen during our national anthem.  An apt comparison, indeed.

From MNB reader Jim Huey:

Kevin, I think perhaps we are all missing the point on the anthem protests and the negative feelings it inspires in some of us. For me to believe that Colin Kaepernick and others are simply trying to raise awareness about issues they see as needing additional exposure, we must presume that this is only possible by their protest. If it is possible for these HIGHLY PUBLIC and FOLLOWED athletes, who do national interviews on a weekly basis, to raise awareness in a different way, I think we then can reasonably ask ourselves what might be their motive for choosing this way to make their point. When I was a younger manager I was fond of using shock and awe to “inspire” those I led. It did tend to get results in the short term, but it never endeared people to me and the reality was I was simply being rude. It stunted my career growth for years.

However, the entertainment/sports industry often lives in denial of this. Bill Belichick throws his tablet down on the sideline and the announcers praise him for caring so much. When I have behaved that way in business it has gotten me labeled a hothead and emotionally unstable. Just because something works does not mean it is the right or best thing to do.

From another reader:

I actually started a note to you on this when it first came up, and didn’t send it because anything anybody says can be nit picked and made to look ignorant.

So now I’ll say it.  I was surprised that it didn’t occur to you that the National Anthem “issue” that the NFL has chosen to ignore, isn’t impacting viewership.  I for one am not watching this season.  I’m not protesting people expressing themselves.  I watch football for entertainment, to take my mind off of serious issues and “zone out” for several hours.  And it irritates me that the NFL won’t allow certain expressions of glee when a player sacks a player, or scores a touchdown, but they can protest during the pre-game ceremony.

Hey, I travel overseas a lot, and when I’m out of the country I’m always reminded how luck we are to be able to say “Hillary is a bum!” and not worry that the secret police will follow me or put me in the Gulag.

Ok, this is a stretch, but can you imagine cast members at Walt Disney World being allowed to wear Trump for President” pins, or protest during their flag lowering ceremony on main street?  What, they can’t express their free speech at work?  What if the local meat cutter working the service counter at Kroger had a KKK button on his apron.  Or down here in Tennessee some folks fly the confederate flag, and that offends some (myself included)? 

So my choice is NOT supporting organizations that have different important or foundational beliefs (or offensive) than me, whether it’s the church I attend, the charity I donate to, or the shows I watch.  I do not think the NFL, an entertainment service, should allow their “product” to be denigrated with political protests of any kind. Or maybe they think this makes them MORE relevant?  Their choice.  I don’t want to watch Football and have somebody yelling into the camera something about wiki leaks, Bill Clinton is a rapist, etc.  It’s entertainment not a “public place for assembly”.

When I get mistreated at retail, or find the service horrible, I’ve always felt my best move it to stop going to the retailer!  So in this case, I’m just not going.  And there are a lot of people not watching because of this issue.

Yes, I will watch the Super Bowl.

MNB reader Gregg Raffensperger wrote:

I don’t agree with the analogy that free speech and protesting from an individual should be compared to a corporately sanctioned, charitable giving initiative.  I don’t feel that a corporate work place is the time or location to protest individual feelings.  Now regarding OUR flag and what it stands for.  Our flag is a symbol of opportunity, sacrifice, and freedom.  It stands for the ability to voice ones opinions and that is why you stand and support it.  To kneel in disgrace of that symbol because you don’t agree with events, that may or may not be totally and truthfully portrayed, is not right either.  I don’t agree with Obama, but I will never not show the respect for OUR flag.

But, MNB reader Steve Paul had a different perspective (and he gets extra credit for a movie reference):

You wrote:

“…….it always kind of bothers me when folks who normally embrace the notion of freedom of speech have a problem when folks with whom they disagree actually practice it.”
Well said, thanks.

Also might remember this movie quotes...

"America isn't easy. America is advanced citizenship. You've gotta want it bad, cause it's gonna put up a fight. It's gonna say 'You want free speech? Let's see you acknowledge a man whose words make your blood boil, and who's standing center stage and advocating at the top of his lungs that which you would spend a lifetime opposing at the top of yours.'

You want to claim this land as the land of the free? Then the symbol of your country cannot just be a flag. The symbol also has to be one of its citizens exercising his right to burn that flag in protest. Now show me that, defend that, celebrate that in your classrooms. Then you can stand up and sing about the land of the free.’’

From The American President, written by Aaron Sorkin.

Published on: October 27, 2016

In Game Two of the 2016 World Series, the Chicago Cubs defeated the Cleveland Indians 5-1, evening the best-of-seven series at one game apiece. The series now moves to Chicago, where game Three will be played on Friday night.