business news in context, analysis with attitude

We had a story the other day about turkey specials that Whole Food is offering to Amazon Prime members, leading MNB reader Lisa Malmarowski, of the Outpost Natural Foods Cooperative, to write:

Hmmm - we have local source verified organic turkey for $3.89/lb. FRESH antibiotic free local source verified, all natural for $2.49/lb. And are offering a deal with purchase on all natural, antibiotic free local turkey for $1.69/lb.

And folks don’t have to pay for a Prime membership.

We’ve worked hard to be competitive with our 4 stores in the market, to Whole Foods 2 stores, and all the other competition.

Guess we’ll just quietly go about doing what we do, in our niche, so the big guys can just carry on… nothing to see here folks.

For the record, if I had a choice between Whole Foods and a local coop like Outpost, IU’d choose the latter. No question.

My point in the story was just to point out how Amazon is trying to leverage Whole Foods.

Responding to our story about how some rental car companies are trying to alleviate pain points in the experience, MNB reader Harmonie O’Loughlin wrote:

Hertz offered to drive us to the terminal because we are new parents with lots of baby gear.  We were significantly impressed and thankful because it made our travels that much smoother and easier.  I am sure that will help with our loyalty to them.  The trap is if we decide to ask for the service the next time and they decline.  Then we would be pretty ticked off.  Policies will certainly protect against under delivering.

From another reader:

While the “convenience of getting on the road” after a flight definitely favors Uber / Lyft, the rental car companies have another anchor around their neck that few like to acknowledge.
Locally imposed fees put on rental cars has long been a way for communities to bring in additional income. I rent at least 50 times / year and pay the same midsize daily rate every time, but end up with dramatically different bills. For example, I rent a car in Bentonville airport and I pay 35% in fees above the daily rate, an additional $16.89 in local surcharges / taxes, per day.  At LAX that same additional surcharge is nearly $20/day, however renting off airport eliminates these fees. For example, a recent rental off-airport in Tampa was $5.18 / day (14%).  . There are many examples of how the local community tax decisions, all designed to generate business traveler income, are forcing the consideration of the ride sharing options. The San Francisco $20 “ride the tram” fee (to the car rental facility) discourages car rental/s.
And, if that’s not enough to insult those using rental cars, renters get the right to pay a refueling premium fee which is well above the locally posted fuel prices.
The rental car companies, which contribute jobs in addition to certain tax receipts for these communities, would be better served to speak up more to local decision makers about these imposed fees.  Charging yet another premium fee on top of their already heavily taxed structure, isn’t the answer to competing with Uber / Lyft.

Responding to another story, one MNB reader wrote:

I’m not certain what’s transformational about Walmart’s interest in hiring military veterans or military spouses.  Walmart has long had interest in hiring veterans because of their strong work ethic, ability to follow rules (execute) and that their health insurance is largely taken care of by US Gov’t.  Walmart stores are often close to Military installations.  This has been true since before their 2013 Welcome Home Commitment was announced by Bill Simon, himself a Navy veteran.
If anything, it seems to me Walmart has executed this now 5 year old initiative slowly at a time when they could have become the gold standard.

MNB the other day took note of an ABC News report that a New Hampshire judge has ordered Amazon “to hand over recordings taken by an Echo device in the Farmington, New Hampshire, home where Christine Sullivan lived with her boyfriend. Sullivan was found murdered in the backyard of the home on Jan. 29, 2017, along with Jenna Pellegrini, who was staying at the home … Police seized an Amazon Echo from the home, and, while it is “unclear whether there is any audio evidence on the device,” the court “found probable cause that the speaker could have recorded ‘evidence of crimes committed against Ms. Sullivan, including the attack and possible removal of the body from the kitchen’.”

One MNB reader responded:

This is precisely what scares me about these devices. No, not the ability to not cover up a murder… But when and what is that thing listening / hearing?
Could your in home political speech be captured, transmitted to a government listener and held against you? Could someone hack into the thing and listen to your private conversations? “Hey honey, what’s our bank password again?”

Lots of reaction to our HQ2 stories.

MNB reader Glenn Cantor wrote:

Long Island City, NY?  Has anyone making this selection ever tried to get to Long Island City.  While it is certainly noble to build a major company headquarters in one of New York’s urban, inner city neighborhoods, there is no existing infrastructure and the roads are already clogged.  Unless they are planning to drop people in by drones, this is an impractical location.

MNB reader Lori Stillman wrote:

I tend to agree with your perspective that the leak was not without AMZN’s knowledge and provided an early read on how they needed to prepare for the PR challenges that will follow.  The split decision makes sense for the number of reasons you mention and will still create some interesting opportunities as work force demands pressure housing, schools, etc.  For Crystal City, the market lost thousands of military offices in the years following 9/11 as a result of government decisions to dissipate their workforce away from Crystal City.  There are hundreds of thousands of vacant commercial space, with regional and metro train stations all connected underground.  I suspect the impact here will be less than other cites, which resulted on this space making the top cut.  The commute between DC and NY, however, will be a bigger challenge.  The failing Amtrak system can barely manage the load on this route as it is, much less see daily commuters traverse between the two cities.  The silver lining, however, is desired residential real estate locations will likely benefit.  We’re literally a two block walk from the commuter station and the unsolicited realtor calls have already begun.

From MNB reader David Spawn:

Your ignorance of neighborhood revitalization in the NYC area is showing…
That said, if a big chain store can get tax incentives to build a store, why shouldn’t Amazon get them to revitalize a neighborhood? I’m not nuts about the process, but I can’t blame Amazon for looking for the best deal that makes sense.
Long Island City is not in need of revitalization (from Amazon or any other corporate behemoth).  Since we moved here 4 years ago, we have watched 10 different apartment towers get topped off in LIC (with 5,000 apartment units), in addition to multiple new businesses and industries (fashion apparel firms have been leasing in the area for the past 5 years at least in search of cheaper rents, following the move by TV production studios) taking advantage of its proximity to Manhattan –
If Amazon really was just getting a leveled playing field in the incentives game to “revitalize a neighborhood,” there were plenty of opportunities on the list of submittals that wouldn’t have included these 2 prosperous & growing submarkets.  It seems you are making a false comparison.
PS - My guess is that Crystal City also does not need revitalization.

You’re right that I am not intimately familiar with Long Island City. (I spent more time when I was young in my mom’s Queens neighborhood, Elmhurst, which is five long miles to the east.) It certainly is my impression that Long Island City is pretty diverse, with both high-end development and some areas that could be improved.

In the words of the New York Times, while there are “wine bars and a cycling studio along the riverfront in Long Island City, among gleaming high-rise apartment buildings with views of Midtown Manhattan,” there are parts of “the census tract that will house Amazon’s new headquarters” that qualify as an “opportunity zone … eligible for tax credits meant to spur investment in low-income communities.”

From another reader:

You think Amazon wants to play fair? I think the whole getting all the cities “data” and thought process’ on where they want to go in the next 20-30-50 years was a genius play in order to win their new HQ (and then they do 2 of them)…

And another:

Actually, many of us are happy they did not pick Texas. For example, cost-of-living in Austin has tripled in the last 10 years due to the influx of companies coming from high cost states like California and New York. These companies are getting tax breaks but the we the taxpayer ends up footing the bill!!

And still another:

Man Kev, tough day for you. How to reconcile your unfazable man crush on Amazon with all your lefty East Coast friends?  How would you feel if Walmart pulled this ridiculous stunt?

Good question about Walmart. I think I’d have the same attitude … for years, I’ve been critical of NYC’s efforts to keep it out. I like to think I have an open mind.

BTW … I have a more righty East Coast friends than lefty East Coast friends. Just FYI.

Finally, I had an Eye-Opener the other day that referenced a New York Times story about how, “starting next term, Congress is going to have something of a new look, not just because of the striking diversity of race and gender in the House, but because of the new attitude toward image and self-definition that goes with that.”

Going away, to some degree, will be the blue and gray suits, white shirts and ties worn by the men who have dominated Capitol Hill, as well as the conservative dresses and pantsuits worn by women elected to the US Senate and House of Representatives.

The Times made the point that the new diversity of elected representatives means that wardrobes are changing, at least in part because newly elected women - whether it be the Native American/LGBTQ/former MMA fighter elected in Kanas, or the Minnesota Democrat who is not just a Somali-American but also the first women to wear a hijab in the House - will be wearing clothing and accessories that reflect their cultures and personalities, and not the traditions and legacies of the past. The Times wrote that “the move away from the pantsuit, the fake femininity, the pearls, the sprayed-into-submission-bob, may seem like a small thing, given how much else is at stake. To even see it as meaningful in any way may seem ridiculously frivolous … But in these choices is the beginning of different kind of declaration of independence.”

And I commented, in part:

I don’t think there is anything frivolous about it. In fact, it makes me proud, as an American, to see that the fashion quilt is so much more colorful and complicated and diverse than ever … to see that blue and gray suits will be less in evidence in the coming years. I don’t care what side of the aisle they sit on; I think we are better off when we are represented by people who look like all of us.

I think the same goes for business. It wasn’t that long ago, for example, that Starbucks didn’t allow its baristas to have visible tattoos. It changed, and relaxed its policies, understanding that the company as a whole would be better off if it reflected the diverse personalities of its staffers rather than trying deny them.

I think this acceptance, and even embrace, of the panoply of the American culture is critical to business success.

One MNB reader responded:

I can hardly wait for the replies you will be receiving regarding the dress code changes you are about to receive from your readers. They will make for a lot of interesting views.

Interestingly, this was the only email I received about this story and my comments. Which I hope means that people finally are getting it.
KC's View: