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    Published on: October 12, 2018

    by Kevin Coupe

    A couple of weeks ago, Kate McMahon wrote about the ‘Waffle House Index,” an actual term used by the Federal Emergency Management Agency (FEMA) to track the severity of various weather events.

    Florence, I thought the morning news show was playing a clip from a late-night standup comic. And one in bad taste, at that. The measure, she wrote, “is based on Waffle House’s reputation for keeping its 2,100, 24-hour locations open during severe weather events such as hurricanes, tropical storms and tornadoes.

    By this standard, it was a tough week. Hurricane Michael, which this week ravaged the Florida panhandle, forced the closure of 30 Waffle House restaurants this week - 22 in Florida and eight in Georgia.

    Certainly, the pictures and news from the southeastern US this week have been horrible, and it will take months and billions of dollars to begin to put the region back together.

    But we’ll know a lot based on when these restaurants reopen. As FEMA has said, "The Waffle House test just doesn't tell us how quickly a business might rebound — it also tells how the larger community is faring. The sooner restaurants, grocery and corner stores or banks can reopen, the sooner local economies will start generating revenue again — signaling a strong recovery for that community.”
    KC's View:

    Published on: October 12, 2018

    Bloomberg reports that Walgreens Boots Alliance has plans to open a minimum of 600 medical testing facilities inside its drugstores, as it moves “to offer more services and products at its stores …The health-care supply chain is consolidating, and retailers are facing their own pressure, forcing Walgreens to find new ways to draw customers through its doors.”

    The move comes at a time when its chief retail rival, CVS, is acquiring the Aetna insurance company in its own attempt to redefine its role within the health care system by offering more services inside and outside its stores.

    The testing labs will be run by Laboratory Corp. of America Holdings,, one of the nation’s biggest medical testing companies, “follows a Walgreens partnership with Theranos Inc. that fell apart after the blood-testing startup’s technology failed to work.”
    KC's View:
    This goes back to something we’ve been talking about for a long time here on MNB - the importance of retailers being more than just a source of product, and evolving into being a trusted source of information for consumers.

    That, essentially, is the approach being taken by both Walgreen and CVS … they’re not satisfied (nor should they be) with just selling stuff to people, but want to be insinuated into various parts of peoples’ lives. That’s how you differentiate yourself these days, and it is the kind of approach that more retailers ought to be embracing.

    Published on: October 12, 2018

    Variety reports that Walmart has invested $250 million in a joint venture with Eko, described as an “interactive video firm” that will “develop cutting-edge entertainment and advertising content that the retail behemoth hopes will drive more customers to its digital platforms.”

    According to the story, the joint venture - dubbed W*E Interactive Ventures - will “develop a range of content for Walmart’s website and its Vudu video service. Some of that might be branded entertainment and advertising-oriented and some may be purely entertainment based. Eko is known for its innovative technology that allows users to select storytelling options as the content unfolds.”

    The New York Times writes that “Walmart sees interactive storytelling - essentially a video version of ‘Choose Your Own Adventure’ books- as something that can be used in both entertainment and advertising. There could be a cooking show, for instance, that helps viewers buy the ingredients online as they watch. Or a love story in which viewers can choose what happens to the characters. In turn, each choice could help Walmart glean insight into the viewers’ preferences and attitudes.”

    Eko is based in both New York and Tel Aviv, with plans “to open a Los Angeles outpost to strengthen ties with Hollywood’s creative community.”

    The investment comes the same week as Walmart struck a deal with MGM to have that studio create original content for Walmart’s Vudu video service, and the Wall Street Journal writes that “the moves are indicative of the growing competition between Walmart and Amazon.com Inc., which is investing heavily in video as well, in large part to lure potential customers to its platform.”

    And, the Times writes that Walmart “has been seeking to expand its business beyond brick-and-mortar retailing. With most of the nation saturated by its big-box stores, Walmart has been experimenting with a flurry of new ventures, including starting a high-end concierge service in Manhattan and acquiring India’s leading e-commerce site, Flipkart. Now it’s turning to content creation.”
    KC's View:
    I have to admit that I’ve been a little skeptical of Walmart’s ability to have an impact with its entertainment ventures, mostly because I wondered if they’d be willing and/or able to really differentiate themselves with distinctive projects and approaches.

    But then I read about this new deal, and it made me think a little differently. Maybe Walmart actually has some creative ambitions that go beyond simply having a platform to compete with Amazon and Netflix.

    But then I read this piece in Advertising Age this morning:

    The first original content out of the MGM deal will be a remake of '80s comedy "Mr. Mom," which starred Michael Keaton as a hapless stay-at-home dad whose wife goes back to the workforce. The premise will need some freshening up for a 2018 audience. A writer for pop culture site The Mary Sue asks whether it's wise to reinvest in the idea that ‘a man doing housework or raising his children is so abnormal as to be grounds for an entire comedy series’.”

    Really? If that’s the best that Walmart and MGM can do, they’d better stop now.

    Published on: October 12, 2018

    The Washington Post has a long and fascinating piece about a new study - published in Nature and authored by 23 global experts - concluding that “a sustainable food system that doesn’t ravage the environment is going to require dramatic reforms, including a radical change in dietary habits.”

    The story says that the authors “reviewed the many moving parts of the global food system and how they interact with the environment,” and argue that “the current methods of producing, distributing and consuming food aren’t environmentally sustainable and that damage to the planet could make it less hospitable for human existence.

    “A core message from the researchers is that efforts to keep climate change at an acceptable level won’t be successful without a huge reduction in meat consumption.” In other words, “Cheeseburgers are out, and fruits and veggies are in.”

    The Post writes: “At the core of this research is the argument that Earth has several limits, the ‘planetary boundaries,” that can’t be exceeded without potentially dire consequences. These boundaries - which involve factors such as climate change, loss of biodiversity, deforestation, atmospheric aerosols (smog), stratospheric ozone depletion and the supply of fresh water - define the ‘safe operating space’ for humanity. Proponents of the hypothesis say that human civilization has thrived in the geological epoch known as the Holocene, covering a period of roughly 11,700 years since the end of the last ice age, but that damage to the environment could put humanity into an existential crisis.”

    You can read the whole piece here.
    KC's View:
    The Post notes that “the report comes on the heels of a warning from the U.N. Intergovernmental Panel on Climate Change that global leaders need to take unprecedented action in the next decade to keep the planet’s average temperature from rising more than 1.5 degrees Celsius above preindustrial levels.”

    I know some folks think this is all hogwash. I got emails to this effect after I mentioned the UN Climate Change report last week. (I didn’t post these emails because, to be honest, I felt this was going to take us down a rabbit hole from which there would be no return, focusing on a subject about which there would be no resolution, at least not here.)

    I’m not a scientist. I can only read the various stories and try to make a reasonably intelligent judgement. And I’ve made the decision to believe that the planet is more fragile than some folks would like to believe, and that humanity can be arrogant about its ability to survive everything and anything.

    I see no downside in trying to conserve natural resources and being nurturing about the environment rather than invasive and exploitive. I’m willing to sacrifice a little bit of economic growth if that means extending the life of the planet, though I’m not sure that’s necessary … I think there is a lot of growth to be found in a more environmentally sound approach to public policy, if only we’re willing to take a long term view. Capitalism and environmentalism can work hand in hand, if only we’re willing to be patient and creative.

    Published on: October 12, 2018

    Real estate company JLL is out with a new study looking at the move by e-commerce companies into bricks-and-mortar retailing, as they look to capitalize on digital success by building broader consumer exposure, with companies like Casper, Allbirds, and Adore Me - in addition, of course, to Amazon - looking at physical environments as important to long term brand sustainability.

    As many as 850 such stores are expected to be opened in the next five years.

    According to the company, “JLL analyzed the histories and expansion plans of 100 of the top digital retailers to evaluate their strategies. Through their analysis, JLL found that New York remains the top city for both pop-ups and first permanent locations with marquee markets like Los Angeles and San Francisco being popular choices for retail locations as well. In fact, more than half (59.5%) of clicks-to-bricks retailers opened up pop-up locations in New York, with more than a third of them (41.3%) opening their first permanent location there.”
    KC's View:
    As I’ve said here before, only a fool would argue that stores are dead. This is proof-positive … but the stores that these companies are going to put out there are going to be differentiated and worth visiting. That’s what is required to make physical retail work.

    Published on: October 12, 2018

    CNN reports that Amazon is joining forces with the Travelers insurance company to launch “an Amazon storefront where its customers can buy discounted home security equipment. The security kits can include cameras, motion detectors, water sensors and Echo Dots, and are cheaper for Travelers customers … Those who buy the kits also get discounts on their home insurance policies.”

    The story notes that “the partnership … gives Travelers a new avenue to connect with policyholders. Like many of its competitors, the company wants to better integrate its products into customers' daily lives.” At the same time, it gives Amazon a bit of an edge if it makes a move into the insurance business, as has been rumored.
    KC's View:
    If CVS can buy Aetna, can/should Amazon buy Travelers? Just wondering.

    Published on: October 12, 2018

    The Wall Street Journal has a story about how the expansion of distribution systems designed to support e-commerce companies is putting a strain on transit systems run by states, cities and counties - there are lot of jobs, but no way for many workers to get to them.

    Expanding transit systems put additional stresses on already overstressed budgets, and businesses and taxpayers argue that the businesses creating the demand for new systems ought to pay for them. These tensions increase “across the country as companies, often chasing cheaper land and tax incentives, add jobs farther from city centers, extending what public policy experts at the Brookings Institution research center have called ‘job sprawl’.”

    Some other excerpts from the story:

    • “Public transit agencies are spending more but ridership hasn’t kept pace. According to the American Public Transportation Association, spending on U.S. public transit rose by more than 50% between 2005 and 2015, reaching $65 billion in operating and capital spending nationwide. Over that time, the number of transit passenger miles, a rough measure of ridership, rose only 18%, according to APTA.”

    • “Some federal programs provide funding to help local governments get people to work in peripheral and rural locations. And many businesses are working with local agencies to improve transit services to their new facilities.”

    • “Amazon has created a corporate team, Amazon Ride, that works with transit agencies to ‘identify opportunities to bring new service or improve existing service to our sites based on head counts and shift schedule to help with the planning process,’ Amazon spokeswoman Ashley Robinson, wrote in an email.”
    KC's View:

    Published on: October 12, 2018

    CNBC reports that “Apple is preparing a new digital video service that will marry original content and subscription services from legacy media companies, according to people familiar with the matter. Owners of Apple devices, such as the iPhone, iPad and Apple TV will find the still-in-the-works service in the pre-installed ‘TV’ application, said the people, who asked not to be named because the details of the project are private.

    “The product will include Apple-owned content, which will be free to Apple device owners, and subscription ‘channels,’ which will allow customers to sign up for online-only services, such as those from HBO and Starz.”

    The story notes that “Apple is spending about $1 billion on original content this year, targeting ‘PG-rated’ shows that appeal to wide audiences and won't get the company in trouble by making them available for free to owners of all devices, said the people. Apple is also looking for ‘tent pole’ franchises that could serve as linchpins to a paid Netflix-like subscription service down the road, two of the people said.”
    KC's View:

    Published on: October 12, 2018

    • BJ’s Wholesale Club has announced a new promotion allowing people to shop its stores between October 15 and November 4 even if they are not members. There is no obligation to join, though discounts will be available for those who want to.
    KC's View:

    Published on: October 12, 2018

    • C&S Wholesale Grocers announced the hiring of Chris Smith, most recently a senior vice president at McKesson Corp., to be its new chief supply chain officer. He succeeds Peter Fiore, who is retiring.
    KC's View:

    Published on: October 12, 2018

    In Alabama, the Selma Times-Journal reports on the passing of Greg Calhoun, a supermarket industry executive who owned and ran stores in Selma and Montgomery, at age 66.

    According to the story, Calhoun died in Los Angeles, where he “lost consciousness and never woke up.”

    The Times-Journal writes that in addition to his business ventures, “Calhoun also founded the Greg Calhoun Foundation, which hosted a golf tournament for many years that brought in hundreds of thousands of dollars for the Sickle Cell Foundation. Calhoun also partnered with entertainer Steve Harvey on a number of projects, including Alabama State University’s Turkey Day Classic, which they helped promote until 2017 … Calhoun was involved in business ventures with Magic Johnson and had connections with Michael Jackson and Prince.”

    He was a past member of the Food Marketing Institute (FMI) Board of Directors.
    KC's View:
    I didn’t know Greg Calhoun, but Michael Sansolo did, and this morning he dropped me a quick note to say that Calhoun “tried hard to bring a new perspective to the industry and he championed minority owned businesses and the potential and need of the inner city urban market.”

    Published on: October 12, 2018

    …will return next week.
    KC's View:

    Published on: October 12, 2018

    In Thursday Night Football action, the Philadelphia Eagles defeated the New York Giants 34-13.
    KC's View:

    Published on: October 12, 2018

    Just a few quick notes this week…

    We can always count on Lee Child coming out with a new Jack Reacher novel every year, and more often than not, that also means that he comes out with an e-short story that can only be read on Kindles or iPads or other tablet computers. This fall, true to form, Child is out with “The Christmas Scorpion,” and it manages to effectively whet the appetite for “Past Tense,” due out November 6.

    “The Christmas Scorpion” is very much an appetizer. As usual, Reacher is on the road, in this case looking for a warm place to spend the holidays. As usual, things go awry - he finds himself not just stranded in a snowstorm, but also aware of an impending assassination. The problem is that, while he knows who the target is, he does not know who is going to do the killing … and time is running short.

    It is direct, simple and entertaining - just like every Reacher novel.

    Can’t wait until November 5. I pre-ordered mine from Amazon back on February 26. That is going to be a good week … the new Michael Connelly novel, “Dark Sacred Night,” comes out on October 30 …and I preordered that from Amazon on January 25.

    Good things come to those who wait.



    I have a couple of excellent wines to recommend to you this week.

    First of all, there’s the 2016 Nitida Sauvignon Blanc, from South Africa, which is a very drinkable wine that went perfectly with the Mark Bittman shrimp recipe I told you about the other day.

    Bittman calls it his “Simplest and Best Shrimp Dish,” and he’s pretty much got that right. It basically has four ingredients - olive oil, shrimp, cumin and hot paprika - and I loved making it and eating it. You can find the recipe here, and I urge you to try it, and enjoy it with a bottle of wine.

    The other wine is the 2016 Trim California Chardonnay, which is excellent. I’m not a chardonnay guy, but this tastes more like a sauvignon blanc … bright and excellent with spicy food.



    That’s it for this week.

    Have a great weekend, and I’ll see you Monday.

    Sláinte!!
    KC's View: