business news in context, analysis with attitude

Published on: November 6, 2018

by Kevin Coupe

Bloomberg has a story about how it is harder than ever for teenagers to get jobs working in fast food restaurants - because those jobs are being taken by senior citizens.

According to the story, “Restaurants are recruiting in senior centers and churches. They’re placing want ads on the website of AARP, an advocacy group for Americans over 50. Recruiters say older workers have soft skills - a friendly demeanor, punctuality - that their younger cohorts sometimes lack.”

Furthermore, the story says, “Two powerful trends are at work: a labor shortage amid the tightest job market in almost five decades, and the propensity for longer-living Americans to keep working - even part-time - to supplement often-meager retirement savings.”

Indeed, Bloomberg writes that “hiring seniors is a good deal for fast-food chains. They get years of experience for the same wages - an industry median of $9.81 an hour last year, according to the BLS - they would pay someone decades younger. This is a considerable benefit in an industry under pressure from rising transportation and raw material costs.”

And, “Seniors typically have more developed social skills than kids who grew up online and often would rather not be bothered with real-world interactions.”

I guess I only have one reaction to this - that maybe in this environment, we need to soft referring to social skills as “soft skills.” Because they seem pretty critical to me, and maybe it is time people have their Eyes Opened about that.

Published on: November 6, 2018

Contrary to the weekend reports that Amazon was planning to choose Crystal City, Virginia, as the home of its second North American headquarters, dubbed HQ2, this morning all signs and stories point to Amazon actually choosing two locations and splitting the new headquarters between Crystal City and Long Island City, New York, in the borough of Queens.

If this turns out to be the case, it would put the two new headquarters locations across the Potomac from Washington, DC, and across the East River from Manhattan - virtually adjacent to two of the nation’s largest power centers.

The New York Times writes this morning that “Amazon already has more employees in those two areas than anywhere else outside of Seattle, its home base, and the Bay Area.” The story goes on to say that “the need to hire tens of thousands of high-tech workers has been the driving force behind the search, leading many to expect it to land in a major East Coast metropolitan area … If Amazon goes ahead with two new sites, it is unclear whether the company would refer to both of the locations as headquarters or if they would amount to large satellite offices.

“Picking multiple sites would allow it to tap into two pools of talented labor and perhaps avoid being blamed for all of the housing and traffic woes of dominating a single area. It could also give the company greater leverage in negotiating tax incentives, experts said.”

When Amazon announced its HQ2 search, it promised that the winning community would see the addition of some 50,000 jobs and an investment by Amazon of about $5 billion.

Amazon has not commented on the report.

New York Governor, Andrew Cuomo didn’t deny the story when asked by reporters while on a campaign stop in his re-election bid.

“We’ve put together a very strong incentive package, and we’ve had great meetings,” he said. “It’s been very positive. And anything else I can think of that’ll get us over the top—anything they want named Amazon. I’ll change my name to Amazon Cuomo if that’s what it takes, because it would be a great economic boost.”

Published on: November 6, 2018

TechCrunch reports that convenience store chain 7-Eleven “is piloting a new mobile check-out process called Scan & Pay. 7-Eleven shoppers can track their items by scanning a product’s QR code with their phone and pay using the 7-Eleven rewards mobile app. The company, which operates more than 65,000 stores in 17 countries, is currently piloting Scan & Pay in 14 Dallas stores. It plans to expand the service to additional cities in 2019.

Digiday writes that “when a customer is near one of these 7-Eleven stores, the Scan & Pay feature will automatically appear within the 7-Eleven rewards app, available on Apple or Android. When shopping, customers scan barcodes of items and pay directly through their phones, either with a card, Apple Pay or Google Pay, applying any rewards to their purchases. Upon leaving these stores, customers scan a QR code in the store to confirm they paid.”

The only products that can’t be bought using the system are hot foods, lottery tickets, alcohol and tobacco.

Gurmeet Singh, 7-Eleven’s chief digital officer and chief information officer, tells TechCrunch, “For us, it was important to figure out how to continue to drive convenience in the digital age. We are ready to adapt to the changing consumer patterns and changing demands of the consumer.”

Published on: November 6, 2018

The New York Times reports on how hundreds of US companies - including Walmart, Tyson, and Levi Strauss - “have signed on to the Make Time to Vote initiative. They are easing the path in various ways, including giving employees paid time off to vote on Nov. 6. Walmart’s participation is notable because the retailer is the largest private employer in the United States, with 1.5 million staff.”

Patagonia, as noted here on MNB in the past, actually is closing its stores today so its staff can vote.

The story notes that “they are acting largely because a jumble of state laws and the lack of a national holiday will make voting a challenge for many workers.
United States federal law designates the first Tuesday of November for national elections, which is an inconvenience to many people because it falls on a workday.”

Published on: November 6, 2018

VentureBeat reports that Walmart and Microsoft plan to open a joint technology-engineering office in Austin, Texas, that “will involve engineers from both companies working side by side to develop new internal applications that utilize Microsoft Azure, as well as migrating existing operations to the cloud.”

Microsoft Azure is described by the company as “an ever-expanding set of cloud services to help your organization meet your business challenges.”

The story notes that this is part of a strategic “cloud partnership” that the two companies announced several months ago.

Published on: November 6, 2018

CNBC has a story saying that Starbucks CEO Kevin Johnson wants to “apply the lessons” the company has learned in China to its operations in the US.

Key to this approach, the story says, is Starbucks’ alliance with Alibaba.

“Aimed at expanding Starbucks delivery services to more Chinese cities, the alliance essentially integrates the Starbucks app into Alibaba's digital networks,” the story says. ‘For customers, that means delivered Starbucks items mimic in-store quality thanks to re-engineered packaging and spill-proof lids, Johnson said.

“Going forward, the company is going to leverage the delivery practices it's picked up in China and ‘apply them to other parts of the world, including the U.S.,’ the CEO said.”

Published on: November 6, 2018

The Wall Street Journal this morning reports that home improvement retailer Lowe’s plans to close almost 50 stores - 31 locations in Canada, including four offices and plants, and 20 in the US - as it seeks “to boost sales by shedding less-profitable locations and focus spending elsewhere.”

The move follows the decision by the company earlier this year to close its 99-store Orchard Supply Hardware chain.

“The store closures are a necessary step in our strategic reassessment as we focus on building a stronger business,” says Marvin Ellison, Lowe’s CEO.

The Journal writes that “Lowe’s sales have risen in recent years in line with a strong housing market and economy, but have been sluggish compared with competitor Home Depot.”

Published on: November 6, 2018

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

• The Denver Post reports that Amazon is opening its second and newest Amazon 4 Star store - featuring only products across a wide range of categories ranked with four or more stars on its website - in the Park Meadows mall, in Lone Tree, Colorado.

The first 4 Star opened in New York last month; another location has been announced for Berkeley, California.

According to the story, “The Denver-area store will have some things its New York sibling does not, such as a top-selling sports and outdoor items and a selection of the stuff selling best to Denver-area consumers online.”

The thing to remember is that Amazon’s access to granular data means that the SKU selection in Denver is likely to be very different from its New York store. It is that kind of targeting, I believe, that retailers need to achieve to be relevant.

Published on: November 6, 2018

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

• The Wall Street Journal reports this morning that sports-apparel company Under Armour has instituted a new corporate policy - employees no longer can charge visits to strip clubs to the company credit card.

The story notes that it was common for employees to take athletes and co-workers to such clubs and pay for their entertainment. It was part of a company culture in which “some top male executives violated company policy by behaving inappropriately with female subordinates … Women were invited to an annual company event based on their attractiveness to appeal to male guests.”

These occurrences, the story says, “were symptomatic of practices women at Under Armour found demeaning.”

Gee. Y’think? This stuff is utterly stupid and juvenile, but the idea that in 2018 a company has to make clear that it no longer is going to pay for it strikes me as almost unbelievable. The story makes clear that Under Armour’s corporate culture was pretty toxic for women, and that they still have a long way to go; I think every company needs to make sure that it is not enabling such behavior. If they don’t, and they get roasted, they deserve what they get.

Published on: November 6, 2018

…will return next week.

Published on: November 6, 2018

Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

CNBC reports that the Trump administration “is looking into antitrust violations by Amazon, Facebook and Google parent Alphabet.”

The probe into whether the three companies can be charged with having illegal monopolies was divulged by President Donald Trump in an interview with Axios that aired on HBO.

“We are looking at [antitrust] very seriously,” Trump said. “Look, that doesn't mean we're doing it, but we're certainly looking and I think most people surmise that, I would imagine.”

Trump also said that a “previous administration” had stopped earlier considerations of possible prosecution.

CNBC notes that Trump has long been critical of Amazon, accusing it of taking advantage of the US Postal Service; he’s also been critical of Amazon’s founder/CEO Jeff Bezos, who owns the Washington Post - which has engaged in aggressive reporting about the Trump administration - in a personal investment.

Published on: November 6, 2018

I wrote yesterday about the potential impact of the Amazon Go format on traditional stores, expressing a certain amount of disbelief that some pundits and analysts are minimizing how it will affect traditional stores.

MNB reader John Rand responded:

I totally agree with your POV on what Amazon Go (or any new and differentiated from of retail) can do to any entrenched incumbent, whether or not they want to admit it.

It put me in mind of a comment made many years ago by the then-head of CVS, who said something like (I am paraphrasing from memory) “Retail used to be like a boxing match. You squared off against a direct competitor, face to face, and fought it out for the customer’s dollar. Today, retail is more like a bar fight – anyone can come up from behind and hit you over the head with a chair”.
 
It was true then, and it is more apt than ever.

I love that image. I plan to steal it.

Another MNB reader wrote:

The comments about Amazon Go not competing directly with traditional grocers made me laugh. Some of these same "brainiacs" likely said the same thing about restaurants and Wal-Mart in the early 90's. Then a few years later, the industry realized that they had lost 10% share of stomach and Wal-Mart was now the largest grocer in the U.S.

My general corollary is that if your business is still doing the same things the same ways as two years ago, your boat is taking on water!

Lots of drowning going on out there.




I went on a rant yesterday about companies that support ballot initiatives like those against certain kinds of food taxes, but do their level best to hide the fact that they are contributing millions of dollars to their self-serving causes.

One MNB reader wrote:

Dark money is legal because the Supreme Court said corporations are people too. Except when they break the law, then no one goes to jail they just pay a fine. Count me as pissed about it.

I suspect we could form a club. An increasingly big club.

Published on: November 6, 2018

In Monday Night Football, the Tennessee Titans defeated the Dallas Cowboys 28-14.