business news in context, analysis with attitude

Published on: April 12, 2017

by Kate McMahon

“Why did you fire my wife?” - Bradley Reid Byrd

For a real time take on how that six-word query sparked a social media firestorm, look no further than Cracker Barrel’s Facebook page. And Instagram account. And Twitter. And Yelp. And even the bold signage outside a rival Chick-fil-A.

It all began last month when Brad’s wife Nanette was fired from her job as a retail manager at the Cracker Barrel Old Country Store in Corydon, Indiana. Angered that she was terminated from the Southern comfort food chain after 11 years of service, apparently without an explanation, Brad posted his question on Facebook.

Within hours, the internet was demanding answers as well.

The hashtags #JusticeforBrad’sWife” and #BradsWife went viral, a Change.org petition got the first of more than 25,000 signature and a BradsWife page was created on Facebook. Comedian Amiri King alerted his 2 million followers to the “absolute s**t-show going on at Cracker Barrel’s Old Country Store Facebook page.”

The execs and social media team at Cracker Barrel’s headquarters chose not to respond online, to press inquiries or comment publicly, and their social media nightmare only escalated.

According to the marketing tech company Amobee, Cracker Barrel’s digital engagement since the incident has skyrocketed by 226%, and yes, it’s all about Brad’s Wife. The merciless memes mix outrage, humor, exaggeration and cynicism, and show no signs of abating.

For example, a Facebook post about sweet maple pepper bacon prompted this response: “Sweet maple bacon? More like mother of sweet mercy, why did you fire Brad’s wife? Eleven years her smile lit up all of Cracker Barrel.”

A recent post about a peek-a-boo bunny Easter basket was met with the following: “The bunny is covering his eyes, because he can't bear to look at you monsters who fired Brad's wife.”

In what has been referred to as “digital vandalism,” internet trolls unleashed their fury on the Yelp and Google pages of Cracker Barrel restaurants, posting negative reviews and demanding justice.

In the meantime, Nanette Byrd has received plenty of job offers from fast food chains and retailers. Independent Chick-fil-A franchises from Texas to Tennessee chimed in with “Now hiring Brad’s Wife” signs that also went viral.

To be fair, Cracker Barrel is in a real bind with the Brad’s Wife debacle, since it is a personnel issue. The most effective way to slow down a social media runaway train is to get in front of it – quickly and decisively. Case in point: Last week’s tone deaf Kendall Jenner commercial from Pepsi, which debuted online. The internet backlash was immediate, and the soft drink giant yanked the ad within 24 hours and apologized.

But it’s a whole different story when an employee has been canned. Amid thousands of negative tweets, I’ve come across just one voice defending Cracker Barrel. A columnist for Inc. magazine posed this question: If you were so unfortunate as to lose your job, would you want the entire internet demanding to know why?

I was ready to state that Cracker Barrel should have at least come up with a response along the lines of “It is company policy not to comment publicly on a personnel issue.” Say the minimum, end of discussion. It seems the most reasonable position, likely to be supported by media, human resource and legal departments.

But then I came across the 2014 story of Cracker Barrel firing a 73-year-old Vietnam veteran in Florida for giving a piece of cornbread to a needy customer. In a statement, Cracker Barrel said he was terminated after multiple written warnings, counseling and his fifth violation of company policy. So much for saying the minimum.

I think this ongoing tale should prompt all companies to review their policies on how to handle a social media crisis, which like a tornado can come out of nowhere and leave a path of destruction. Just ask Cracker Barrel, which says it has a mission of “Pleasing People” at its 635 stores. In this case, all it took was one pink slip for a company with 72,000 employees to find itself over a barrel.


Comments? As always, send them to me at kate@mnb.grocerywebsite.com .

Published on: April 12, 2017

by Kevin Coupe

Call it yet another example of disruption in action.

Business Insider reports on how Netflix and Amazon "are spending big bucks" to "beef up their selection" of unique content, which in retailing would be known as private label.

Netflix has said it plans to spend $6 billion on content this year. Amazon is believed to have budgeted $4.5 billion. The only media company expected to spend more on content is ESPN, which invests heavily on rights fees for professional sports.

This content is designed to make people want to stay home (and buy stuff, if they are using Amazon), rather than go to the movies.

Which explains a story in the New York Times about the AMC movie theater chain, where the plan is to turn concession stands into "full-fledged fast-food restaurants."

According to the Times, "It’s part of a strategy to attract younger audiences and stay relevant in the streaming age of HBO Go, Netflix and Amazon Prime. While small theater companies like the 25-location Alamo Drafthouse have been offering full-restaurant cinemas for years — AMC itself already operates a 60-location chainlet of Dine-In Theaters — this effort will bring greatly expanded menus to more than 400 theaters in the United States ... AMC Feature Fare will include cheeseburger sliders, four types of stone-fired pizza, chili dogs, salami bites, chicken tenders, three new popcorn flavors and — for the health-conscious — seven gluten-free snacks."

In short, the hope is that people will leave home if AMC can offer more than just digital projection and more comfortable seats - both of which have been a hallmark of the changes AMC has been making in recent years.

Of course, the Times also points out that there is at least a possibility that the chili dog that attracts one customer might annoy the customer sitting next to him or her. But it is a calculated gamble, and one that AMC feels it has to make ... because otherwise, its customers may stay home and watch Netflix or Amazon.

It has to make the gamble, because AMC sees the changing entertainment business as an Eye-Opener.

Published on: April 12, 2017

USA Today reports this morning that Walmart plans "to offer a discount on thousands of items ordered online -- if shoppers will then go to their closest store to pick them up." The story says that "Walmart’s latest deal allows the world’s biggest retailer to offer the ease of online shopping while taking advantage of its thousands of stores, cutting costs while still offering convenience. Customers save on delivery costs and get their orders faster -- and maybe they'll even stick around and shop."

When the promotion kicks in next week, it will include about 10,000 SKUs, that are available exclusively online, with the plan to expand the promotion to more than a million items by summer.

Marc Lore, CEO of Walmart U.S. eCommerce, says that the promotion is being supported by the fact that all the deliveries will be made by Walmart's trucks to its stores, without the extra cost that gets built into the use of outside delivery vehicles. The promotion will offer the biggest price cuts on the biggest items, because that's where the biggest shipping savings can be realized.

The move is part of Walmart's ongoing effort to differentiate itself from and compete more effectively against Amazon.

Published on: April 12, 2017

Bloomberg reports that Starbucks, looking to synch itself up with traditional values in China, where it is looking to expand its footprint, has decided to "provide Chinese workers with health insurance that extends coverage to their parents, a unique offering by the coffeehouse chain that may be used by more than 10,000 people to treat conditions such as cancer, heart disease and Alzheimer’s." The plan represents a multimillion dollar commitment by Starbucks.

The story goes on: "The program addresses a critical need for an aging population that’s contending with increasing rates of major diseases from cancer to heart ailments. It’s also a strategic move to retain employees, many of them recent college graduates in low-skill jobs, and create goodwill toward the company at a time of increasing political tensions between the U.S and China."

Executive Chairman Howard Schultz tells Bloomberg, "This is the first time we’ve done anything like this, and the reason for that is that it was clear there was an emotionally driven concern among partners about their ability to take care of their parents. I heard firsthand very emotionally driven, tragic stories about what’s taking place with the parents who got sick, and many passed away ... Once we sit down and listen to those stories, we could not be a bystander."

Published on: April 12, 2017

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

There were a couple of stories yesterday about which there are additional notes that should be made...

• Supervalu announced that it will acquire Unified Grocers for $375 million - $114 million in cash, and the assumption of $261 million in debt. But Reuters reported yesterday that under the terms of the deal, Supervalu would "receive a termination fee of $8 million plus reimbursement up to $1 million in costs, if deal is terminated by Unified Grocers." In other words, if the deal is vetoed by Unified's owner-members, they will have to write a check for up to $9 million.

In the event that federal regulators prevent the acquisition, Supervalu would have to pay a reverse termination fee of $9.5 million to Unified.

One source close to Unified told MNB that the potential of having to write a check in that amount almost certainly would influence how those owner-members cast their votes. Based on my conversations, there doesn't seem to be much chance that Unified will reject the offer, but that doesn't mean that there aren't a number of retailers concerned that their levels of service will decline once they are absorbed into what they feel is a highly centralized Supervalu machine.

And, as one person pointed out to me, at least part of the problem is the debt that Unified incurred during the Haggen debacle - and that Haggen has managed to claim yet another victim.


• The Charlotte Observer notes that as activist hedge fund Jana Partners takes a significant position in Whole Foods and pushes for organizational change, it has called for the election of new members of the board of directors. One of those suggestions - Thomas “Tad” Dickson, the former CEO of Harris Teeter, who led the company "from February 1997 until the Matthews-based grocery store chain was sold to Kroger in 2014. Dickson’s primary business now is private investing, Jana said in its filing."


• Bloomberg reports that before Jana Partners made its investment in Whole Foods, Amazon was seen as a possible bidder for Whole Foods, and "pondered a takeover of the organic-food chain last fall but didn’t pursue a deal, according to a person with knowledge of the situation.

"The e-commerce giant considered internally whether Whole Foods would help invigorate its nearly decade-long push into groceries, said the person, who asked not to be identified because the deliberations were private. The discussions never turned into a concrete plan, according to the person.

I find this one really hard to believe. I mean, I can imagine that the possibility might've come up at a meeting, or at a Seattle bar somewhere, but I cannot imagine it got very far. I just don't see how an Amazon acquisition of Whole Foods makes any sense at all.

Published on: April 12, 2017

• The Danbury News Times reports that bricks-and-mortar furniture and design store Ethan Allen Interiors "will create a design studio and offer its products on Amazon." The Ethan Allen Design Studio on Amazon, the story says, "will display and offer furniture and decorative home accessories."

The attraction - Amazon's user base of more than 300 million people.

Published on: April 12, 2017

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

• The Philadelphia Inquirer has a story about something that we've reported on here on MNB - that "malls are again courting supermarkets to fill department store vacancies and appeal to a selective food customer."

Examples cited in the story: "A Whole Foods market will open later this year at Exton Square Mall, following another at Plymouth Meeting Mall and a Wegmans at Montgomery Mall. Other chains, such as ShopRite, are scoping out mall spaces long occupied by Macy's, Sears, and J.C. Penney. Nationally, grocery stores are reentering spaces long reserved for fashion retailers: Jimbo’s, a specialty food chain much like Whole Foods, opened at Westfield Horton Plaza in San Diego; Wegmans is replacing a Penneys near Boston; and College Mall in Bloomington, Ind., will welcome 365 by Whole Foods Market this fall."

The rationale, the story says, is that "malls need replacements for darkening anchor stores as e-commerce, especially Amazon.com, snaps up big chunks of traffic and sales. Mall restaurants have been steadily improving, making high-end grocers a logical next step.

"For their part, grocery stores represent one of the more internet-proof sectors in retail. Online U.S. grocery sales for 2016 accounted for less than 1 percent of the $1 trillion U.S. grocery retail market, according to a recent Moody's report."

I was with them right up until that "grocery stores are one of the more internet-proof sectors in retail" comment. Relative to books and clothing, maybe, but I think it is a mistake to underestimate the impact that e-grocery will have on traditional supermarkets.


• The Chicago Tribune reports that "Starbucks debuted its new Mercato lunch menu in 100 Chicago stores Tuesday, a line aimed at customers who increasingly demand vegetarian-friendly and protein-filled options for a midday meal. If the line is successful, it will be expanded nationwide. The menu consists of salads, in full or half sizes, sandwiches and also some options that Starbucks customers will already recognize, like Bistro Boxes and fresh yogurt and fruit options."

Published on: April 12, 2017

• Seattle-based Metropolitan Markets announced yesterday that CEO Todd Korman is stepping down from that role after 15 years with the company, to be succeeded by Ron Megahan, the company's COO.

The company said that Korman "remains an active company shareholder and will serve as an advisor to the company in support of the transition. Chairman Terry Halverson will also continue his mentorship of the CEO position."

Metropolitan Market recently opened its seventh store in Sammamish, Wash. and plans to roll out new online and delivery services later this year.

Published on: April 12, 2017

Dorothy Mengering passed away yesterday at age 95. And if her name doesn't sound familiar, perhaps it is because she was better known as "Dave's Mom."

Mengering was the mother of longtime late night talk show host David Letterman, who would bring her on his programs from time to time - usually with a remote from her Indiana kitchen, but sometimes as a "correspondent" from three different Winter Olympics.

Published on: April 12, 2017

...will return.