business news in context, analysis with attitude

Published on: January 9, 2017

by Kevin Coupe

The Washington Post had a piece over the weekend in which it went to human resources experts and employment lawyers to solicit predictions about how the workplace is likely to change in the coming year ... and here's some of what they came up with.

• The annual pay raise will become less important, as companies wrestle with whether smaller, more frequent bumps in pay will actually create more motivation and reward; this trend would combine with a desire to give star performers greater rewards, but not necessarily tied to the calendar.

• Exotic perks such as video games or yoga classes will become less important to millennials, and "what some companies may add instead — particularly those interested in offering cushy perks but unable to afford them all — are what consultants call 'life planning accounts.' Employers fund these taxable accounts with $500 to $2,500 in cash that workers can use on approved expenses, such as pricey gyms or the closing costs for buying a home. Other prized perks, especially as millennials age, include more paid parental leave and help paying off student loans.

• Adjusted drug policies. As more states legalize marijuana use, companies will have to update their drug testing policies. Not in every case and not for every job, but where and when appropriate.

• "The technology is already out there for employers to track employees' public social media to see if they're about to quit and go to a new job," the Post writes. "Next up could be high tech that lets companies use location data to track the movement of workers. Whether through corporate-issued phone data or sensors on employee badges, human resources consultants say companies are experimenting with how they can put that data to work."

The question that occurs to me is whether millennials will be willing to accept the notion of being tracked in exchange for more frequent raises and recognition, more relevant benefits, and even the ability to smoke a joint from time to time without fear of retribution.

They may not fear loss of privacy; after all, the way they engage on social media suggests that privacy isn't exactly their first priority.

I do think that the general tenor of the story makes an important point - that companies need to adjust even long-held policies to make sure they are apropos to the people they need and want to employ.

It is, I think, an Eye-Opener.

Published on: January 9, 2017

Walmart announced on Friday that Rosalind Brewer, CEO of its Sam's Club division, will leave the company on February 1, to be succeeded by John Furner, currently Sam’s executive vice president and chief merchandising officer.

The Wall Street Journal reports that as part of her contract, Brewer "is prohibited from working for another global retail company with revenue of more than $5 billion for two years ... a clause typical of Wal-Mart executive employment contracts."

The Journal also offers some context about Brewer's tenure:

"Sam’s Club has long struggled to turn around sluggish sales, vying for attention and investment dollars within its parent company to compete with fast-growing Costco Wholesale Corp ... Midway through Ms. Brewer’s tenure, she presented Wal-Mart’s board with potential strategic shifts for Sam’s Club, including spinning it off from the parent company, according to people familiar with the situation. Ultimately Wal-Mart decided to analyze which Sam’s locations could appeal to higher-income versus middle- and lower-income shoppers, stocking shelves with more relevant merchandise, a plan that has been discussed publicly over the last year ... Ms. Brewer refocused Sam’s Club’s attention on attracting wealthier shoppers, less on Wal-Mart’s core lower-income consumer. Sam’s Club executives believe higher-income shoppers are drawn to wholesale clubs that require membership fees, thereby lessening head-to-head competition with Wal-Mart itself."

The Journal also notes that Brewer was criticized in some quarters for promoting diversity programs at the company's vendors; she was "the first female African-American chief executive at the company, and her departure leaves no women or people of color with a CEO title at Wal-Mart."

Published on: January 9, 2017

The MSLGroup is out with its annual list of top food trends for the coming year, suggesting that technology will continue to play a growing role in how people acquire and consume food. "Food delivery and meal kit services will continue to change our food ways…and yet continue to face profitability questions," the report says. "In 2017, SmartLabel technology will also allow us to know practically anything about the foods we eat and drink. The resulting 'extreme transparency' will challenge foodmakers, delight some consumers and overwhelm others."

At the same time, the report says, food will continue to emerge "as the leading topic of conversation on social platforms, food bloggers have become powerful social influencers with four times the following of other bloggers. That's only natural – food is a common interest with endless variety and frequent consumption. Food attracts clicks in huge numbers. That's why in 2017, every consumer brand manager will be asking: How can we use food to start a conversation about our brand?"

And part of that conversation will mean crafting a compelling and resonant story: "Marketers will be going all out to rapidly craft and evolve food and beverage products to win raves and thereby consumption. Products debuting to bad reviews may be withdrawn as quickly as a panned Broadway show. Online food shopping will continue to thrive, in part because the reviews are baked in."

Published on: January 9, 2017

In the UK, the Daily Mail reports that discounters Aldi and Lidl, each of which has been making strides in achieving market share increases at the expense of traditional retailers such as Tesco and Walmart-owned Asda, "are said to have become victims of their own success with customers put off by 'overcrowding' and huge queues ... Retail experts have suggested 'overcrowded' shops and 'understaffed tills' are leading to shoppers staying away."

However, both retailers have reported strong sales in the weeks before Christmas, and recently have been increasing employee wages and benefits as they compete for better employees.

Published on: January 9, 2017

The Puget Sound Business Journal reports that Starbucks is suspending its "Starbucks Evening" program, and will no longer sell beer and wine at more than 400 stores around the country.

Starbucks originally embraced the program - after a single-store test in Seattle - as a way of building traffic and sales in the evenings, and it hoped that alcohol and an expanded food menu would turn its stores into an evening magnet for consumers.

The Business Journal writes that the move seems aimed at using the space and time to focus on its "Reserve" business, which is designed to sell even more upscale and expensive coffee: "Starbucks also plans to open 1,000 or more Starbucks Reserve stores and have Reserve espresso bars – an espresso bar that makes coffee in a variety of different brewing methods – in at least 20 percent of existing and new Starbucks stores, Schultz has said."

Published on: January 9, 2017

• The International Business Times reports that the US Department of Agriculture (USDA) is partnering with a number of retailers on a two-year pilot program that will allow online retailers to accept food stamps.

According to the story, the plan "will give families participating in the families participating in the Supplemental Nutritional Assistance Program (SNAP) the ability to order groceries online and have them delivered to their doorstep. The program, which will launch during the summer of 2017 and run for two years, will be available to SNAP participants in Maryland, New Jersey, New York, Pennsylvania, Oregon, Washington and Iowa.

"Amazon, FreshDirect, Safeway, ShopRite, Hy-Vee, Hart's Local Grocers and Dash's Market are all partaking in the program. The firms selected for the pilot program represent a wide variety of options, ranging from national retailers to regional grocery chains and local offerings."

Published on: January 9, 2017

• The Toronto Sun reports that Walmart has agreed to begin once again accept Visa cards at some of its Canadian stores because of what it described as excessive merchant fees charged by the credit card company.

"In July, Walmart began refusing Visa credit cards at its three stores in Thunder Bay, Ont., citing excessive fees," the Sun writes. "In October, it extended that ban to Manitoba, where it has 16 stores. The retail giant had been planning to phase out the cards at all of its 400 stores in Canada."

Last week it reached an accommodation with Visa and once again is accepting the cards. The details of that deal have not been disclosed, however, and some small businesses have questioned whether they - with less negotiating juice than Walmart - will end up paying higher fees.

Published on: January 9, 2017

Fascinating piece on the Thrillist site about what is being termed a "perfect storm" of factors that could wreck what some think of being as a Golden Age of Restaurants.

"Rising labor costs, rent increases, a pandemic of similar restaurants, demanding customers unwilling to come to terms with higher prices -- it's the Perfect Restaurant Industry Storm," the story says ... and it is a storm that is affecting the food industry from coast to coast.

You can read the story about the bubble that is about to burst here.

Published on: January 9, 2017

• The Associated Press reports that " Keurig, the maker of single-cup coffee machines, says it is teaming up with beer giant Anheuser-Busch InBev to build an at-home booze maker. The companies said Friday that they hope to create a product that could whip up beer, cocktails and spirits."


• Columbus Business First reports that The Limited, owned by Sun Capital Partners, has closed its entire chain of 250 stores, though it is keeping its website open for now.

"The news comes amid a tough week for brick-and-mortar retailers with closings announced by Macy's and Sears and Kmart," the story says.

The closures are expected to eliminate some 4,000 jobs nationwide.

Published on: January 9, 2017

• Arkansas Business reports that Dollar Tree has announced "the promotion of Gary Philbin to enterprise president and the addition of Duncan Mac Naughton as president and COO of Family Dollar, which it acquired in 2015."

Mac Naughton, the story notes, "was chief merchandising and marketing officer of Wal-Mart U.S. from 2011-14, executive vice president of Consumables Health & Wellness and Walmart.com from 2010-11 and chief merchandising officer of Wal-Mart Canada from 2009-10. From 2006-09, he served as executive vice president of Merchandising & Marketing for Supervalu Inc. and was head of the Health & Wellness Division.

"Philbin has worked for the company for more than 15 years as president and chief operating officer of Family Dollar; president and chief operating officer for the Dollar Tree banner; and senior vice president of stores."

Published on: January 9, 2017

The annual National Retail Federation (NRF) "Big Show" is scheduled to take place next week, from January 15-17, in New York City's Jacob Javits Convention Center ... and I'm planning to spend some time there next Monday, January 16.

If there are any MNB readers who'd like to get together, I'll be camping out from 1:30-3 pm at the MyWebGrocer booth, #612 ... I'll have some copies of my books to give away, and I'm always happy to catch up with members of the MNB community.

Hope to see you there...

Published on: January 9, 2017

Last week, we had a story about a 37-year-old Spokane man who was banned from a Starbucks there after he hit on a 16-year-old barista, and then complained about ageism and said that he believes in "age gap love" - I said he was a creep and that if he'd hit on my 16-year-old daughter, I would use my baseball bat to persuade him to focus his attentions elsewhere.

Some MNB readers thought I was being hyperbolic in my response, and others thought I was right on. But no email touched me more than this one from an MNB reader:

I want to thank you for your outrage about an older man “hitting” on a young woman. I liked the baseball bat comment more than you will ever be able to appreciate. You see, I was the girl who wasn’t defended.

A talented musician, I was studying with a prominent classical performer at the age of 12, maybe 13. During one lesson, he was teaching me how to breath properly but his hands wandered into very inappropriate areas and I had no idea how to handle the situation. I told my mother, who had her own problems, about what happened and she made me promise that I would never tell my father. I continued to take lessons and the molestation continued but I never mentioned it again. When I finally refused to continue taking lessons from him, she branded me a loser and a quitter – probably out of guilt.

A year later I mentioned a man in his twenties who really liked me and she told me I was a fool. Later that evening I was raped.

I tell you this only because I want you to understand the importance of defending your children in ways they can understand. It’s not about actually hitting someone with a baseball bat, it more about letting them know they can trust and depend on others for their safety. Strange as it might seem, I read your comment and cried. It would have been nice to know that there was at least one person who cared.

I am honored that this reader would share this with me.

I’ve always believed that my kids felt that I cared about them and that they could always count on me. But I'm also sure we cannot say it too much. When the issue of sexual assault came up during the presidential race (which must’ve been enormously painful for people like this reader), I took advantage of the moment to have a long conversation about it with my daughter.  (And my wife, to be honest.)

I feel awful that this reader didn't have someone on whom she could depend.  I fervently hope that she has that in her life now.

Published on: January 9, 2017

In Wild Card games in the National Football League...

Oakland Raiders 14
Houston Texans 27

Detroit Lions 6
Seattle Seahawks 26

Miami Dolphins 12
Piuttsburgh Steelers 30

NY Giants 13
Green Bay Packers 38