business news in context, analysis with attitude

Published on: March 28, 2019

This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

Hi, Kevin Coupe here, and this is faceTime with the Content Guy.

I try not to use this space as a place where I can exact personal vengeance on retailers that I think have done me wrong, but I do think it is fair game to tell you about bad experiences that I think illustrate a larger problem.

That’s what happened the other day when Mrs. Content Guy asked me to bring our old Electrolux vacuum cleaner in to be repaired; the electrical cord was fraying, and the hose had a hole in it, making it pretty much useless. My schedule is a lot more flexible than hers - it is hard to walk out on a classroom full of third graders to run personal errands - and since the only vacuum cleaner place within any reasonable proximity of our home had limited hours, I was happy to do so.

The place was open from 8 am to noon, and then again from 1 pm to 4:30 pm. I double checked those times online before I left and then, making sure I have the store a little buffer, drove over so I’d get there shortly after 1:30.

When I arrived, I found a paper plate taped to the front door, saying, “Back at 2:30. Sorry.”

Sorry? Really?

It didn’t make sense to drive home and then turn around to come back, and so I cooled my heels for almost an hour. During that time, remarkably enough, three other customers showed up to drop off their vacuum cleaners, and they may have been more annoyed than I was.

This strikes me as a classic case of a retailer simply not delivering on a basic value proposition - it doesn’t get much more basic than being open during business hours. It is possible that this fellow has been lulled into a sense of complacency, thinking to himself, “I can do pretty much what I want because there isn’t any competition.” For the moment, he may be right.

But I’ll tell you this. He won’t be right forever. If I knew of a vacuum cleaner repair service that would’ve come to the house to pick it up, and then drop it back off when it was fixed, I would use it in a second. I wouldn’t even hesitate - any satisfaction I might’ve gotten from doing business with a local guy was pretty much eliminated by the fact that he didn’t hold up his end of the bargain.

Three interesting postscripts. One, when he finally showed up, there was no apology or explanation for not having been there. (He should’ve lied and said he was taking his aging, infirm grandmother to the doctor. It may not have been true, but it would’ve bought some sympathy and made me feel bad about my impatience.)

Second, while I was there, he tried to sell me a new vacuum cleaner rather than doing the repairs. It almost didn’t matter whether it made sense or not … I wasn’t giving him my business.

And third, he didn’t tell me that his was a cash-only business … so when Mrs. Content Guy went to pick up the vacuum cleaner the following Saturday (when he was only open from 9 am to noon), she had to leave the store and go find an ATM to get cash.

The lesson here, I think, is easy to identify - if you want customers to do business with you, it is kind of important act like you want to do business with your customers.

If the kind of vacuum cleaner pickup-and-delivery service that I described existed, I suspect that this guy’s business wouldn’t last very long. And as he closed his doors for the last time, he’d probably complain about how he was unfairly put out of business by people who didn’t care about supporting local merchants.

Which would be total crap.

When he goes out of business, as he inevitably will, it won’t be homicide. It’ll be suicide.

That’s what is on my mind this morning. As always, I want to hear what is on your mind.

Published on: March 28, 2019

by Kevin Coupe

Today is Major League baseball’s official Opening Day, and so it is appropriate to share with you a new video directed by Spike Lee and sponsored by Anheuser-Busch, entitled, simply, “Impact,” focusing on the legacy of Jackie Robinson.

The video intercuts between a dramatization of a group of fans listening to Robinson’s first game as a Brooklyn Dodger, during which he broke the Major League color barrier, and actual footage from the game. The theme is one of Robinson’s more famous quotes: “A life is not important, except for the impact it has on other lives.”

CNBC writes that “a three-minute online version of the commercial launched Tuesday, two days before the minute-long TV version airs during opening day. The ad will also be shown in baseball stadiums throughout the season and in movie theaters across the United States.

“Budweiser has partnered with the Jackie Robinson Foundation and will donate 42 cents — the number on Robinson's shirt — from each sale of limited-edition bottles of Bud to the nonprofit,” with those funds slated to go toward a long-gestating Jackie Robinson Museum in New York City.”

It is. I think, a moving piece of work, an Eye-Opening tribute to a man who was one of the most important people of the 20th century. Kudos to Spike Lee and Anheuser-Busch for this exceptional collaboration, which will, I hope, itself have an impact on people who do not know enough about Jackie Robinson, who would’ve been 100 years old this year.

Published on: March 28, 2019

Amazon-owned Whole Foods has opened what Crain’s New York Business describes as “Whole Foods Market Daily, which focuses on grab-and-go snacks with self-checkout lanes. The bodega-sized offering, at the corner of 7th Avenue and West 25th Street, offers a way to pick up breakfast or lunch without navigating the cart-filled aisles of the roughly 40,000-square-foot regular Whole Foods market next door.”

The convenience store-sized unit also offers a new coffee, juice and kombucha bar, a build-your-own station for acai bowls, and a variety of local items.

Published on: March 28, 2019

Kantar Worldpanel is out with a study saying that people who have a Google Home smart speaker tend to use it for more functions than people who own Amazon’s Alexa-powered devices.

Digital News Daily writes that overall, “some 58.4% of Google owners check the weather, compared with 53.7% of Amazon owners. Some 52.8% on Google ask general knowledge questions compared with 40.8% on Amazon, and 50.8% on Google check the news, compared with 37.9% on Amazon.”

In addition, the story says, “Owners of Google Home are more likely to order items such as takeout food and groceries. In fact, 15.6% of Google Home owners order takeout food, compared with just 6.2% of Amazon Echo owners. Similarly, 12.6% of Google Home owners order groceries, compared with just 4.6% of Amazon Echo owners.”

The study also spotlights some changes in owners’ behavior, Digital News Daily writes:

“For those who own a Google Home, 31.4% listen to more music than before, 16.2% switched from free to paid music streaming service, 14% ensure that new electronic devices are compatible, 13.5 use a table or smartphone less, 15.8% use a laptop or PC less, and 4.5% shop more with retailers through a virtual assistant.

“For those who own an Amazon Echo, 27.3% listen to more music than before, 12.2% switched from free to paid music streaming service, 11.5% ensure that new electronic devices are compatible, 10.2% use a table or smartphone less, 8.2% use a laptop or PC less, and 2.3% shop more with retailers through a virtual assistant.”

Published on: March 28, 2019

The Wisconsin State Journal reports that Hy-Vee has received the necessary approvals to build a new 19.650 square foot Health Market store in the community of Sun Prairie, which will include, along with a supermarket, “a health clinic, pharmacy and a fitness studio.” The property’s footprint also will include “a separate 6,500-square-foot Hy-Vee Fast & Fresh convenience store with fuel pumps.”

According to the story, Hy-Vee “debuted its HealthMarket concept last summer in West Des Moines, Iowa. The store, according to the company's website, includes sports nutrition and supplements, fresh produce, meat and dairy items, meal kits and frozen foods. In addition it offers high-end cosmetics and Basin natural beauty and body care products. The store has also partnered with Orangetheory Fitness while the facility also has nitro cold-brewed coffee, kombucha, and a Bevi infused-water machine.”

CEO Randy Edeker has said that he envisions opening as many as 50 or 60 Heath Markets.

Published on: March 28, 2019

BoiseDev reports that two years after acquiring meal kit company Plated, Albertsons is reducing the number of stores in which the brand is available.

According to the story, “The company began offering the kits in stores in select markets around the country shortly after the acquisition.”

But now, according to Plated Director of Public Relations Liz Marsh, after Plated has “enjoyed the ability to test and learn on a large scale because of Albertsons Companies expansive footprint that covers a wide range of markets and store brands,” the brand will be available only in “select stores while we temporarily reduce the overall scope of Plated’s retail distribution … This shift will allow us to focus on innovation for the future expansion of Plated within the Albertsons Companies ecosystem.”

Marsh says that the company remains “committed to growing Plated to serve customers in new and exciting ways.”

One of the markets losing the brand - Boise, Albertsons’ home base.

Published on: March 28, 2019

Amazon announced yesterday that its Amazon Web Services (AWS) business has signed a multi-year, global agreement with the Volkswagen Group “to build the Volkswagen Industrial Cloud, a cloud-based Industrial digital production platform that will transform the automotive company’s manufacturing and logistics processes.”

According to the announcement, “Volkswagen will rely upon the breadth and depth of AWS’s portfolio of services, including IoT, machine learning, analytics, and compute services to increase plant efficiency and uptime, improve production flexibility, and increase vehicle quality … The Volkswagen Industrial Cloud will bring together real-time data from all of the Volkswagen Group’s 122 manufacturing plants to manage the overall effectiveness of assembly equipment, as well as track parts and vehicles.”

Published on: March 28, 2019

• The Wall Street Journal reports that US chains owned by Ahold Delhaize “are turning to artificial intelligence to overhaul the way they order food from suppliers,” using a system developed by supply-chain software firm Relex Solutions “to improve how buyers predict demand and get perishables and other products to store shelves faster.”

Chris Lewis, executive vice president of supply chain at Retail Business Services LLC, Ahold’s U.S. business services company, says that the new technology “provides ‘one logical view of inventory across the brands,’ allowing buyers to aggregate demand across thousands of stores … The technology incorporates functions that had been spread across multiple systems and automates some steps, such as checking inventory levels at stores and distribution centers, that can take workers several hours to perform. Algorithms update recommended order quantities daily, factoring in variables like ‘if product gets refused at the warehouse, or if sales in particular regions are up because of weather,’ Mr. Lewis said.”

The technology was piloted at Hannaford and Food Lion and now will be rolled out to the rest of the company’s banners, including e-commerce business Peapod, over the next three years.

Published on: March 28, 2019

• The New York Times reports that McDonald’s has advised the National Restaurant Association that it no longer wants to be involved in any lobbying efforts designed to oppose increases in local, state or federal minimum wages.

A company vice president, Genna Gent, told the trade association, “We believe increases should be phased in and that all industries should be treated the same way … The conversation about wages is an important one; it’s one we wish to advance, not impede.”

The change in position, the Times writes, “thrust McDonald’s into the middle of the ongoing and sometimes contentious national debate about worker pay and what constitutes a living wage. Federal lawmakers, including several Democratic presidential hopefuls, have increasingly sought to help lower-income workers whose wages have remained stagnant as corporate profits have grown, housing prices have skyrocketed, and a homelessness crisis is gripping many urban areas.”

However, the story also points out that “the announcement was also greeted with some skepticism. An expert on restaurant lobbying who requested anonymity because of McDonald’s power in the industry said the chain’s repositioning appeared to be at least in part a political publicity stunt. More than 90 percent of McDonald’s restaurants worldwide are owned and operated by independent franchisees, according to the company’s website. It is those franchisees, not McDonald’s Corp.’s bottom line, that the expert worried could be most affected.”


• MarketWatch reports that Grocery Outlet Holding Co., currently majority owned by a private equity company, Hellman & Friedman, has filed for an initial public offering (IPO).

The story notes that Grocery Outlet “is still managed by the family of the founder, Jim Read, who established the first store in San Francisco in 1946” and “claims to have more than 300 stores that attract more than 2 million shoppers each week.”

Published on: March 28, 2019

• CNBC reports that Walgreen plans to sell cannabis-based CBD creams, patches and sprays in nearly 1,500 stores in Oregon, Colorado, New Mexico, Kentucky, Tennessee, Vermont, South Carolina, Illinois and Indiana.

CVS made a similar announcement earlier this month.

According to the story, “Consumers are increasingly curious about CBD, which promises to help everything from anxiety to pain even though there is scant evidence backing up these claims. And while CBD derived from hemp is now legal thanks to the farm bill Congress passed late last year, the FDA says companies still can't add CBD to food or sell it as a dietary supplement.”

"This product offering is in line with our efforts to provide a wider range of accessible health and wellbeing products and services to best meet the needs and preferences of our customers,” the company said in a prepared statement.

Published on: March 28, 2019

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.

• The Associated Press reports that Sen. Elizabeth Warren (D-Massachusetts) has argued as part of her campaign for the 2020 Democratic presidential nomination that what she calls “unfair farming monopolies” should be broken up and that the government also should break up “‘vertically-integrated’ agribusinesses — those, like Tyson, that control multiple levels of production and processing of a product.”

“Today a farmer can work hard, do everything right — even get great weather — and still not make it,” she said. “My new idea would level the playing field for America’s farmers by standing up to Big Ag and un-rigging the rules that are hurting competition.”

The AP writes that “if elected president, the Democratic lawmaker says she’d appoint regulators to review and reverse some mergers among farming corporations. She singled out Bayer-Monsanto as a merger that ‘should never have been approved’.”

Published on: March 28, 2019

Yesterday MNB took note of a USA Today report saying that as people send fewer greeting cards and instead use digital options, “major retailers, including CVS and Walmart, are poised to cut back on cards, and greeting card companies have closed hundreds of standalone locations.”

I commented:

I must admit that pretty much the only time I go buy a greeting card is when Mrs. Content Guy sends me to get one when we need a card at the last minute. (I say this as someone who believes in thank you notes. But I buy them in bulk on … Amazon.)

Not sure if it is me, but when I go to the CVS card section, I see something that doesn’t seem to have evolved very much in the past couple of decades. Maybe I’m wrong about that, or maybe they just don’t have cards that appeal to my somewhat sardonic sense of humor. But I wonder if these sections have evolved to the extent they should have, considering the new realities of how we live. I’m guessing no.

Got a lot of email on this one.

MNB reader Kenny Fried wrote:

We now get all of our cards at Dollar Tree, where they have a Hallmark sub brand for fifty cents each and a dollar a piece with the dollar cards a little better in quality.  The only negative is for people who get the cards they don’t see the $4.00 number on the back so they might not think we care as much for them since we aren’t spending the big $$.

MNB reader Dan Bay wrote:

Companies have priced themselves out of business. 5.99 for a card that cost pennies to make Is crazy!!

From another reader:

Totally agree, Kevin. I actually like to buy greeting cards, especially for birthdays, but virtually every time I go to buy one, especially in drug, grocery and mass, I get thoroughly disgusted by the terrible selection of cards, especially by the major brands. They are either way too long/mushy/sentimental, juvenile, unfunny or just plain stupid. My advice to retailers: find some suppliers of creative, original and appealing cards, or get rid of them all together.

And from another:

Well, welcome to “TODAY”!  Talk about low hanging fruit, the greeting card business has been on the ground.  What took these two retailers so long!!

And another:

Nothing evolved with greeting cards except the exuberant price to buy one.

And still another:

R.I.P. Hallmark and American Greetings. My family's small drugstore over 50 years ago had at least 30 feet of Hallmark greeting card racks.  The margins were 50%.

Today I can go to the Dollar Store just up the street and get a quality Greeting Card for 50 cents or a a dollar while even Target wants the full retail price of over $3 for something comparable.

Hallmark Crown stores are going out of business these days.

One MNB reader wrote:

I needed to share what my 40 year old daughter does today when wanting to send a greeting card. She goes into her preferred card shop and snaps a picture of the card she likes, then opens up the card and snaps a picture of the inside message. She the. Texts the message with a note.

Her comment was cards have gotten so expensive and people open them, read them and recycle them. She considers that a waste of money and a waste of trees.

I think cards are heading the way of DVDs, CDs, and Cassette tapes.

Kind of sad for some of us who are “Hopeless Romantics” like my wife and I who have saved every card we have given each other since we met. That’s a long time.

I respect your daughter’s environmental sentiments, and even agree with them, but, with all due respect, isn’t what she’s doing kind of like stealing?

And, from MNB reader Monte Stowell:

I know times have changed, as the younger generation does not buy and send greeting cards as do us older generations. I still believe that receiving a greeting card, especially a “Thank You” card in the mail, is a real pleasant treat or surprise. It shows a real appreciation. The cost of greeting cards $2.95 up, might also be an impediment, as one can go on line and buy a years subscription for less than an Andy Jackson. If the high price is a consideration for not sending cards, then the best place to buy cards is at a Dollar store. Alas, greeting cards are slowly going the way of the Dodo bird.