business news in context, analysis with attitude

Published on: March 19, 2018

by Kevin Coupe

The Washington Post has a story about how a French baker got a rise out of authorities when he decided to do something radical - he didn’t take a vacation.

According to the story, “Cedric Vaivre, who owns a bakery in the tourist region of Lake Bakey in Lusigny-sur-Barse, which is about 120 miles south-east of Paris,” got hit with the equivalent of a $3600 fine for working too much.

The reason? He worked seven days a week during the summer making croissants and baguettes, when “local labor laws state that small businesses can only work six out of seven days maximum.”

While the laws are there to protect labor from having to work seven days a week, there are those in the area - including some 500 who have signed a petition supporting Vaivre’s right to work seven days a week - who think that there is no reason to prevent business owners from working as much as they want.

And Christian Branle, the town’s mayor, told local journalists that “these kind of laws are killing our businesses. You have to show some common sense if you’re a small rural community in an area where there is not a lot of competition.”

Interesting story. Sort of a funny problem to have in 2018. And certainly an Eye-Opener.

C’est la vie.

Published on: March 19, 2018

The New York Times has a story about a robotics installation, described as “part of the automation trend rippling through the worlds of shipping and online retail, was the first significant deployment of mobile robots inside a FedEx hub. Amazon and our e-commerce shopping habits are big reasons it’s happening … In 2012, Amazon acquired a robotics company called Kiva. Since then, it has moved many of that company’s robots into its network of more than 210 fulfillment and package-sorting centers. Now, many Amazon partners and competitors are moving in the same direction, including big shipping and logistics operations like FedEx and DHL.”

The advance of robotics, however, is not having an enormous impact on jobs held by actual flesh-and-blood people.

The Times writes that “what has happened at the FedEx hub may be a surprise to people who fear that they are about to be replaced by a smart machine: a robot might take your role, but not necessarily your job.

“Yes, the robots replaced a few jobs right away. And in time, they will replace about 25 jobs in a facility that employs about 1,300 people. But the hub creates about 100 new jobs every year — and a robot work force still seems like the distant future.”

This appears to back up a report recently issued by the McKinsey Global Institute, which, the Times writes, “predicted that about one-third of workers in the United States will have to switch occupations because of technology-driven automation by 2030.”

Published on: March 19, 2018

Reuters reports that Amazon is tracking customer behavior at its checkout-free Amazon Go store in Seattle, “and so far, the verdict is they keep coming back.”

Gianna Puerini, the Amazon vice president in charge of the store, tells Reuters that people “who work very close, like in the building up above, will come down even just to grab a drink because it’s so fast and easy.” They tend to do so frequently, she says, and employees at the store spend a lot of time restocking the shelves - all of which are positive signs for the format.

These details, Reuters writes, provide “an early glimpse at how the store, known as Amazon Go, is faring two months after opening its doors to the public. Shopping frequency, sales and other metrics reviewed by Amazon will likely inform how it thinks about expanding the concept elsewhere in the United States, if at all.”

Published on: March 19, 2018

Bloomberg reports that Kroger has decided to remove all publications about assault rifles from its stores. There apparently aren’t very many of them, but from now on readers will have to find them elsewhere.

The decision comes just weeks after Kroger said that it would no longer sell any gun or ammunition to people under 21 years of age in its Fred Meyer stores in the Pacific Northwest. That decision followed similar moves by both Dick’s Sporting Goods and Walmart.

All of these actions have come on the heels of the the school massacre in Parkland, Florida, in which a 19-year-old with a legally purchased gun killed 17 people at a local high school. Those killings have ignited an enormous amount of citizen response, with young people pushing for stricter gun laws, staging a walkout from classrooms all over America in solidarity with the Florida students, and using both traditional and social media to generate support for and participating in a planned March 24 “March for Our Lives” protest in Washington.

The Associated Press story notes that Fred Meyer “sells guns at nearly 45 of its 132 stores in Oregon, Washington, Idaho and Alaska,” and that the company says that “the firearms category represents about $7 million annually of its revenue and sales have been declining.”

Published on: March 19, 2018

The New York Business Journal has a story about an ice cream parlor in Manhattan called Tipsy Scoop, where all the ice cream has a five percent alcohol content - you have to be 21 to get in and order.

According to the story, “Tipsy Scoop launched in 2014, not as an ice-cream shop, but as a caterer that specialized in ice cream for special events such as weddings and corporate events. It also started producing packaged ice cream pints, which are now sold at Whole Foods, Morton Williams, Brooklyn Fare and many specialty shops.

“When the business took off, the team opened ice cream carts. And then videos of Tipsy Scoop’s ice cream went viral on Facebook, attracting more than 14 million views.”

Tipsy Scoop co-owner Melissa Tavss tells the Journal, “Our intent isn’t to get people smashed. We get them a little tipsy.”

The story says that “Tipsy Scoop’s main customers are women ages 21 through 40, perhaps because of the visually appealing packaging, according to Tavss. Also, many millennials flock to the store with their requisite smartphones to take photos of the alcohol-inspired ice cream. Having multiple revenue streams - special events, packaged ice cream and the retail shop - has enabled Tipsy Scoop to keep growing. Tavss said about 50 percent of its revenue stems from special events, 30 percent from packaged ice cream and 20 percent from the retail shop.

Published on: March 19, 2018

ARM Insight is out with an analysis of consumer spending data showing that while “nationwide, Amazon continues to gain considerable ground on Walmart,” its momentum “is much more pronounced in California and New York, where the online retailer actually overtook Walmart in share of spend in December 2016 and did so again for good in May 2017.”

Not so in states like Florida and Texas: “Millennials, and consumers overall, in Florida and Texas still spend considerably more at Walmart than Amazon … Walmart still enjoys more than 60 percent share of spend among millennials in these two states and has maintained far more stable share of the market over the past three years … In fact, Florida consumers' Walmart spend is more than twice that of their Amazon spend, which is more than twice their Target spend.”

Published on: March 19, 2018

The New York Times has a fascinating piece about how, when the National Institutes of Health (NIH), the federal agency that is “considered one of the world’s foremost medical research centers, investing over $30 billion of taxpayer money in biomedical research each year,” decided to do a study into he health benefits of a daily alcoholic drink, it apparently had an inappropriately close relationship with liquor companies and alcohol-oriented trade associations with a rooting interest in the results.

According to the story, “The 10-year government trial is now underway, and Anheuser Busch InBev, Heineken and other alcohol companies are picking up most of the tab, through donations to a private foundation that raises money for the National Institutes of Health … documents and interviews show that the institute waged a vigorous campaign to court the alcohol industry, paying for scientists to travel to meetings with executives, where they gave talks strongly suggesting that the study’s results would endorse moderate drinking as healthy.”

The study is designed to do what previous studies have not: “At a cost of $100 million, the new trial aims to resolve a persistent medical conundrum. Though excessive drinking is harmful and problem drinking is on the rise in the United States, many observational studies have found that moderate drinkers outlive abstainers and have less heart disease.

“These studies don’t prove that moderate drinking is the reason these people live longer, however. The new trial, called the Moderate Alcohol and Cardiovascular Health Trial (M.A.C.H.), is intended to answer that question.”

You can read the entire Times story here.

Published on: March 19, 2018

• AOL News reports that Amazon has posted a job that the story says mat suggest the next service that it may offer - what is described as “a pickup service for Whole Foods and a ‘marquee’ of other retailers … This means that shoppers could soon be able to pick up their Whole Foods groceries, Amazon orders, and, potentially, purchases from other merchants in one location.”

The job posting reportedly said that Whole Foods is “looking for a finance manager to help launch ‘the Whole-Foods delivery and pick-up service on the ultra-fast Prime Now app and enable our Prime customers to shop from a set of marquee third party retailers’.”

Published on: March 19, 2018

• The Wall Street Journal reports that in the dollar store category, Dollar General seems to be putting some distance between itself and its competition, meeting or exceeding financial expectations while buying back stock and investing in its store fleet. At the same time, Dollar Tree’s performance has disappointed a bit, largely because it “is essentially still paying for its acquisition of Family Dollar, investing to upgrade stores and planning to spend around $100 million this year on wages, maternity leave and employee training. Dollar Tree is facing further pressure because Walmart and Target have also increased wages and issued bonuses.”

“Now, having made smart investments last year,” the story says, Dollar General is “looking strong while its rival struggles with an acquisition that still needs a lot of work.”


• The New York Times reports on how Peter B. Robb, the new general counsel at the National Labor Relations Board (NLRB), is trying to negotiate a settlement between McDonald’s and employees in a case that focuses on whether a corporation should be considered a joint-employer at franchise locations; it is were to be defined that way, companies like McDonald’s “could be required to bargain with unionized workers at disparate franchise locations” and could find themselves legally culpable when franchisees end up in legal hot water.

What’s interesting about the settlement discussions is that they come as the McDonald’s case actually has gone to trial. Robb, the story says, wants to engineer a settlement so that a court decision against McDonald’s does not set a precedent that could have an enormous impact on the fast food business. The trial is underway, but the judge in the case halted the trial temporarily so that the two sides could negotiate under Robb’s tutelage; that delay was set for 60 days, but the period ends today.

Published on: March 19, 2018

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

• CNBC reports that Amazon’s Grand Challenge team, which it describes as “its equivalent of the Google X lab for moonshot technologies,” has hired Taha Kass-Hout, the former U.S. Food and Drug Administration chief health informatics officer. According to the story, “Kass-Hout will serve in a business development role focusing on health care projects.”

The story notes that while “Amazon has remained secretive about its health care ambitions, with a few exceptions … It did announce a collaboration with J.P. Morgan and Berkshire Hathaway to bring down health care costs and improve quality for its own employees. But it hasn't said much about how that will work, or who will run it.”

I think this qualifies as a hint.


• UK-based Tesco said that week that it has hired Guus Dekkers, most recently chief information officer at Airbus, as its new chief technology officer. He succeeds the recently retired Edmond Mesrobian.

Published on: March 19, 2018

Got the following email from an MNB reader:

Wanted to share a retailer’s version of delivery option gone wrong (in my opinion).   Yesterday, I received an email from Costco advising they now offer same-day and two-day delivery options.  LOVE that idea as shopping there is not close to home and I always spend too much money when we do finally make it in store.  However, there are several staple items we buy because they are less expensive in bulk (such as toilet paper, paper towels, paper plates, dog treats, etc).  So, with that in mind, I logged in this morning to see how it would work.  While fine with a 2-day delivery, minimum order, as I started to build my cart, the first item I went to select was $7.00 more expensive than shopping in store ($20 vs.$13 in store).  Why call something FREE delivery when they simply jacked up the price?

Moving on to the next item which happens to be in the monthly sale flyer, it’s not available for delivery service (the toilet paper we use).  Conclusion is, unless you’re willing to pay a hidden convenience charge, don’t bother with their version of “free” delivery.  Furthermore, why bother if consumer still must go in-store to get a needed purchase?  Bad first impression for sure!




We had some discussion recently about the ownership structure at Eataly in the US, which prompted MNB reader Beatrice Orlandini to write:

Eataly USA may be partly owned by Mario Batali and Lidia Bastianich BUT please bear in mind that it is entirely a concept by Oscar Farinetti.

So, whatever misdemeanor Batali may have done, I find it hard to identify Eataly with him.

If, understandably, you want to boycott all Batali-related activities, I guess there are a lot among which to pick: TV? own-brand products? Other?

Certainly a lot. But not Eataly.

In Italy Eataly has other partners (top and foremost leading food retailer Coop), but on the forefront there is always the genius of Oscar Farinetti.

Everyone identifies Eataly with him.

BTW worth checking the recently opened food theme park in Bologna: FICO

Apologies for my chauvinistic/patriotic rant.

Not at all. You make excellent points.




On the subject of retailers selling expensive survival kits in the event of an apocalypse, one MNB reader wrote:

I agree with your take KC, no survival kits for me either.  Judging from people's behavior in the lines of every coffee drive thru I drove by the morning after last week's storm, and there were many, I shudder to think what would happen in a long term power outage situation.  I love my coffee but the every man for himself I witnessed the other day was something else!

Published on: March 19, 2018

The National Association of Professional Baseball Leagues (NAPBL) announced last week that it is imposing a number of changes in how minor league games are run, including the decision that whenever a game goes into extra innings, each of those extra innings will start with a runner on second base.

That runner will be the last person in the order during the previous inning, with authorities saying that the rule change is necessary in order to make games go faster.

In addition, ESPN reports, “a 15-second pitch clock when there are no runners on base will be implemented at Triple-A and Double-A … The timer will remain at 20 seconds with runners on base, the same as it has been since 2015.” And, the story says, “New limits on mound visits without pitching changes also will be added, the minor league governing body said. The maximum will be six by managers, coaches or players at Triple-A, eight at Double-A and 10 at full-season Class A. There will not be any limits at short-season Class A or in rookie leagues.

“An additional visit will be added for each extra inning. A team with no remaining mound visits may ask the plate umpire for additional trips to deal with crossed-up pitch signals.”

"We believe these changes to extra innings will enhance the fans' enjoyment of the game and will become something that the fans will look forward to on nights where the game is tied late in the contest," NAPBL president Pat O'Conner said in a statement posted by ESPN). "Player safety has been an area of growing concern for our partners at the Major League Baseball level, and the impact that lengthy extra innings games has on pitchers, position players and an entire organization was something that needed to be addressed.”