retail news in context, analysis with attitude

Published on: October 26, 2018

by Kevin Coupe

There is an Eye-Opening piece in the Wall Street Journal about how investors are gravitating to the restaurant and food delivery segment, noting that “venture-capital firms have invested $3.5 billion in food and grocery delivery services so far this year, more than triple the amount they invested in all of 2017.”

You can read it here.

As these companies position themselves for IPOs or new rounds of fund raising, the numbers are staggering. Instacart says it has a $7.6 billion valuation (and we all know how I feel about Instacart … or at least about the companies hitching themselves to its flawed business model). Postmates is valued at around $1.2 billion. DoorDash - $4 billion. “UberEats, the food-delivery unit of Uber Technologies Inc., is credited with what bankers estimate will be $20 billion of Uber’s proposed $120 billion valuation if it goes public as planned early next year,” the story says.

There seems to be some difference of opinion about the sustainability of some of these companies. Some think that the delivery business will level off, in the same way that the meal kit business has after a flurry of investment activity. (Which it could, but I continue to believe that meal kits are a viable business, even as it evolves and matures.) Some think that there inevitably will be mergers and acquisitions. (Agreed. To me the question is what company is doing the acquiring, and what happens to the customer data.)

There also is the challenge, the Journal writes, that “customer loyalty largely lies with the food company, not the delivery service they use. Many grocery chains already run their own online pickup operations, and could eventually offer delivery services themselves.” (The problem, of course, is that companies like Instacart would like to disintermediate the retailers for which they “work” from their customers.)

Still, the delivery business - whether in-sourced or outsourced - is an enormous opportunity, albeit one that businesses must embrace with their Eyes Open.

Published on: October 26, 2018

Amazon said yesterday that its Q3 revenue was up 29 percent to $56.6 billion, with a profit of $2.9 billion, up from $256 million a year ago. The company was helped, analysts say, by Prime Day sales of about $2 billion.

The results come as Amazon prepares for the upcoming end-of-year holiday shopping season, which can be expected to be a gig revenue generator for the company. However, during that season it also will be facing off against competitors - from Walmart to Target to Best Buy, to name just a few - that have gotten better at e-commerce, at a time when the collapse of retailers such as Toys R Us and Sears will leave some gaps in the marketplace.

The New York Times quotes Gartner L2 analyst Cooper Smith as saying that Amazon is “saturating the core market in the U.S. for e-commerce. This is a company in transition right now,” he says, moving from a focus on acquiring more customers to getting more growth from people who already shop the site.

Published on: October 26, 2018

WinCo Foods has announced that Steven Goddard has stepped down as CEO, and has been succeeded by company president Grant Haag.

The transition has been in process since last April, when the company announced Goddard’s planned retirement.

Goddard worked at WinCo for more than 20 years, and Haag’s move into the role continues a company transition of internal growth - Haag has worked there for 34 years.

Published on: October 26, 2018

The New York Times this morning reports on a new study from France concluding that “the most frequent consumers of organic food had 25 percent fewer cancers over all than those who never ate organic. Those who ate the most organic fruits, vegetables, dairy products, meat and other foods had a particularly steep drop in the incidence of lymphomas, and a significant reduction in postmenopausal breast cancers.”

The story notes that the numbers surprised even the study’s authors, and that some outside experts say that the evidence is not enough to change basic dietary advice - that cancer prevention is aided by higher consumption of fruits and vegetables, regardless of whether they are organic.

The study, the Times points out, “was paid for entirely by public and government funds,” and not by organic interests.

Published on: October 26, 2018

Peter Larkin, president/CEO of the National Grocers Association (NGA), which represents the independent supermarket sector, announced that he will retire from the organization on December 31, 2019.

Larkin’s retirement, the organization said in its prepared statement, “caps off a nearly 40-year career in the supermarket industry. During Larkin’s tenure, NGA has experienced retail and wholesale membership growth that has more than doubled, ranging from single-store supermarkets to regional independent supermarket chains.  Member engagement for the organization is at an all-time high as evidenced by the numerous member driven share groups and committees, as well as the continued record breaking growth of The NGA Show, which has nearly tripled its attendance levels with Larkin at the helm.”

Published on: October 26, 2018

Forbes has a piece - contributed by the Environmental Defense Fund - that applauds Walmart and Unilever for using “the power of supply chains to tackle the persistent problem of tropical deforestation.

An excerpt:

“Earlier this month, the world’s foremost authority on climate change said we must keep global temperatures in check by 2030, or face dire consequences. Another report by Global Forest Watch said tropical deforestation now ranks third in carbon dioxide-equivalent emissions, behind the United States and China.

“It’s why Walmart and Unilever’s move to collaborate with local governments to reduce deforestation and drive sustainable development in their sourcing regions is so important.
By throwing their weight behind this strategy and by using actual market signals, these multinationals are showing industry at large how to meet deforestation reduction efforts in a meaningful way.”

You can read the entire piece here.

Published on: October 26, 2018

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

• The New York Times reports that tobacco manufacturer Altria has agreed to “discontinue most of its flavored e-cigarettes and stop selling some brands altogether,” as it looks to respond to criticisms that it was marketing those products to underage consumers.

The Times writes that “the Food and Drug Administration launched a campaign earlier this year against the makers of e-cigarettes, including the blockbuster start-up Juul, as well as major tobacco companies, that were marketing their products in ways that appealed to teenagers. The agency issued warnings on Sept. 12 to several companies, giving them 60 days to prove they can keep their e-cigarette devices away from minors.”

Altria also reportedly plans to “support federal legislation to raise the age to 21 for the purchase of any tobacco and vaping product,” a change in policy for the company.

Don’t trust them. Don’t believe them. They’ll give a little here, hoping to make up a little ground over there, and find a way to addict young people to products that they’ll pay for - dearly - for the rest of their lives.

Published on: October 26, 2018

James Karen, a veteran character actor who acted in more than 200 movies and TV shows, has passed away. He was 94.

The thing is, even if you don’t know Karen’s name, you know his face and his voice. He started his career understudying Karl Malden in “A Streetcar Named Desire” on Broadway. In the original Poltergeist, he played the real estate developer who moves the headstones but not the bodies. (Bad move.) In The China Syndrome he played the television station new director for whom Jane Fonda and Michael Douglas work. He also was in Wall Street, Any Given Sunday, Nixon, All The President’s Men, I Never Sang for My Father, Capricorn One, Thirteen Days, Return of the Living Dead, and, amusingly, Frankenstein Meets the Space Monster. He also played the bad guy in the series finale of “Little House on the Prairie,” in which his character (another real estate developer) buys up the town of Walnut Grove, which prompts the residents who he wishes to displace to simply blow the place up.

But here’s the business tie-in. For people who grew up in the New York metropolitan area, Karen was the face and voice of Pathmark supermarkets, appearing for years in thousands of the retailer’s commercials, usually saying, at some point, “Why pay more?”

The irony was that the “Little House” gig almost lost him the Pathmark job, people were so outraged by what his character did to Walnut Grove. Karen apparently was so concerned that he took it upon himself to respond personally to many of the letters and phone calls that Pathmark got urging it to fire him; he was able to persuade them that he actually was a nice guy, and that his exploitive real estate developer was just a character.

Published on: October 26, 2018

…will return.

Published on: October 26, 2018

In Thursday Night Football, the Houston Texans defeated the Miami Dolphins 42-23.

Published on: October 26, 2018

Not sure why, but while there is a ton of stuff to watch on all the various streaming services, I found myself the other day, with a couple of hours to indulge myself, drawn to watch the original, 1962 version of The Manchurian Candidate. (It is far, far better than the execrable 2004 version.)

Directed by the amazing John Frankenheimer and starring Frank Sinatra (his best film performance, I think), Laurence Harvey and an extraordinary Angela Lansbury, The Manchurian Candidate is the classic Cold War thriller, a marvelous mixture of suspense and satire. For those of you unfamiliar with it, the movie concerns Raymond Shaw (Harvey), the scion of a prominent political family who was brainwashed while serving in Korea; the question is why.

Sinatra plays Shaw’s former commanding officer, who finds himself piecing together fragments of memory from the brainwashing, frustrated by his inability to put the pieces together but sure that there is something nefarious at work.

The amazing thing about The Manchurian Candidate is how modern it feels, despite the fact that it was made more than a half-century ago in beautiful black-and-white. There is a pitched battle between left and right political factions, Communist meddling, manipulative machinations by senators who are presidential wanabees, and enough plot twists and irony to spare.

I’ve seen The Manchurian Candidate at least a dozen times, and it seems like every time I watch, it reveals new layers, feeling entirely fresh. And disturbing. And very much of 2018.



A great wine to enjoy with it - the 2012 Carlton Cellars Estate Pinot Noir, a delicious red from one of my favorite wineries. Enjoy.



That’s it for this week.

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

Sláinte!!