business news in context, analysis with attitude

Published on: June 18, 2019

In this new episode of the Retail Tomorrow podcast, recorded on the exhibit floor at the annual United Fresh Produce Association show in Chicago and produced by GMDC, we focus on the the opportunities and challenges that the self-care movement creates for companies looking to take advantage of it, how retailers can go beyond their four walls and develop an “outpost marketing” strategy, and the degree to which information can be the most compelling marketing tool.

Our guests:

• Michael Stebner, director of culinary for Sweetgreen, the salad-centric fast casual restaurant chain

• Peter Steinbrick, director of national sales at Melissa’s, an importer and distributor of exotic and specialty fruits and vegetables

The host: Kevin Coupe, MorningNewsBeat’s “Content Guy.”

You can listen to the podcast here, or on iTunes and GooglePlay.

This edition of the Retail Tomorrow podcast is sponsored by Hillphoenix, shaping the future of retail through technology and design innovation.

Published on: June 18, 2019

by Michael Sansolo

There are countless reasons to dread one’s birthday. Certainly I’m at an age where it’s a reminder of how old I am getting. But increasingly there’s another reason to dislike the day: modern technology.

As the New York Times reported this weekend, birthdays have become the reason for individuals to get flooded with messages from the awkward to the unwanted to countless sales pitches tied to our big day. Consider this: according to the article, some 45 million people send birthday wishes daily - just on Facebook. From personal experience I have found that not listing my birthday on Facebook is no defense. Each year, I am bombarded.

But the Times article hit on more than the annoyance. It’s the notion that all this technology that we love so much at times becomes irritating and more. Another Times article on the same day painted a dark picture of how stores used GPS beacons to track shoppers as they move through the aisles.

It’s easy to imagine that countless readers of those two articles will take a whole new, and far more negative attitude, toward technology even if they will never let you drag their smartphone from their hands.

This is a topic retailers need to consider - now. The Coca-Cola Retailing Research Council (for which I serve as research director) recently released a new report on how technology is shaping the future shopping trip. It’s worth visiting our website to watch a short video assembled by our study partner to provide a view of the shopping trip of the future.

Here’s the thing: As one council member commented to me recently, there is nothing in that video that is science fiction or impossible technology. Everything shown - 5G, AI, IOT, AR, VR and more abbreviations that you need to know now - already exists. It’s just that no one company has managed to employ them all together.

Essentially the question isn’t if this will happen, it’s when. Just think Amazon Go.

Yet another retailer watching the video offered a very different reaction. He found the video - with the 5th generation cellphones, artificial intelligence, Internet of things, augmented reality, virtual reality and technologically enable customer service - somewhat creepy. But that same retailer predicted that shoppers under age 35 would view it in a completely different way. They might see it as cool and essential.

So obviously, there are some complex issues here.

I would suggest that the challenge facing businesses (and the Times articles make this clear) is how to utilize these emerging technologies in ways that clearly enhance each shopper’s interaction with us, rather than just annoy them with endless birthday “specials.” Clearly we are going to need to explain why we use these technologies and how it will lead to a better experience.

It goes back to an important lesson from Jurassic Park — that too often we do things because we can, not because we should. Companies will have to examine these technologies and contemplate how to best use them to delight shoppers.

Nothing else matters.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.

Published on: June 18, 2019

by Kevin Coupe

Y’know how some folks say that Facebook stopped being cool when parents and grandparents started using it, promptly grossing out their kids and grandkids, who had to find some other option less accessible to their elders?

Well, the corollary to that happened over the weekend …

OJ Simpson and Bill Cosby decided to weigh in on the events of the day.

Bill Cosby went on Twitter to say, “Hey, Hey, Hey...It’s America’s Dad...I know it’s late, but to all of the Dads... It’s an honor to be called a Father, so let’s make today a renewed oath to fulfilling our purpose - strengthening our families and communities

He apparently did not actually tweet himself from prison, where he has begun serving 10 years for three counts of aggravated indecent assault related to a number of accusations of sexual assault on women who he drugged. His lawyer did it for him, but at his direction.

Doesn’t matter, though. Cosby is not someone many people would think of these days as “America’s Dad.” And the idea that he has any access to social media, even if via proxy, and the inclination to share his thoughts about parenting is downright creepy.

But, weirdly enough, not the creepiest appearance in social media over the weekend by a disgraced celebrity. That ignominious honor belonged to OJ Simpson, who went on Twitter to promise that he plans now to use social media to offer his thoughts and opinions about sports and politics, and “set the record straight” about his past.

That past, of course, includes his career in the National Football League, as an actor in movies like The Naked Gun and his acquittal in the murders of his ex-wife, Nicole Brown Simpson, and Ronald Goldman - though he was later held accountable in civil court and ordered to pay $33.5 million to the survivors. (Oddly enough - but I suspect not coincidentally - those murders took place almost exactly 25 years ago last week.)

Simpson is out of jail these days - he later was jailed on charges of robbery and kidnapping - and he also said in his tweet, “I’ve got a little getting even to do.” (I’m pretty sure he’s out on parole; one wonders what his parole officer thinks of his social media escapade.)

But as terrific as social media may be, I’m not sure I want to share any sort of venue - virtual or otherwise - with these guys. I feel like I want to say, “That’s it. I’m done.”

I suspect I’m not alone.

Published on: June 18, 2019

Ahold Delhaize USA announced yesterday that Mark McGowan, the president of its Stop & Shop division, is stepping down “to pursue new opportunities.” He will be succeeded by Gordon Reid, currently the president of the company’s Giant Food division.

Ira Kress, SVP, Operations for Giant Food, has been appointed as the division’s interim President.

In a prepared statement, Kevin Holt, CEO of Ahold Delhaize USA, said, “Mark McGowan has had a tremendous impact for the Ahold Delhaize USA brands, as well as the communities they serve, and we thank him for his 30-years of tireless service. Under his leadership, Stop & Shop has built a strong foundation for transformation and expanded success that continues through our ‘Reimagine Stop & Shop’ initiative. As Mark transitions, I have full confidence that Gordon Reid is the right leader to continue this transformation by repositioning the business for future success and rebuilding customer loyalty.”

Reid is scheduled to move over to Stop & Shop late next month. McGowan currently is slated to stay with the company until the end of the year “to ensure a seamless transition.”

The Boston Globe points out that the change comes “less than two month after a disruptive 11-day strike by Stop & Shop workers in New England,” though the company said that the management change had no connection to the strike.

Published on: June 18, 2019

The Chicago Tribune has a story about Foodhaul, a start-up there that is creating a virtual food hall that builds it own restaurant brands and then delivers meals from its own kitchens — “without relying on GrubHub, DoorDash, Caviar, Uber Eats or other third-party delivery platforms to get meals to customers’ doors.”

Foodhaul, the story says, offers “a variety of culinary concepts at a flat $5 delivery fee, promising to ease family tensions over what to order in when one person is craving Italian and another is rooting for barbecue.”

The story says that “the goal is to give Chicagoans access to dishes they couldn't find locally and give chefs a way to test the local market and scout possible bricks-and-mortar locations based on where people are ordering from. Care is taken to source ingredients exactly as the original recipe calls for, except for some produce and meats that will come through Local Foods (a local market). Unlike some virtual restaurants that lease space in shared kitchens, the cooks making the food are all employed by Foodhaul, so participating chefs have to make a minimal investment.”

Co-founder George Madzhirov tells the Tribune that having ownership over delivery as well as the cooking “gives us the unique opportunity to elevate the whole experience.”

Published on: June 18, 2019

The Washington Post reports that Domino’s pizza will soon begin delivering its products to customers via autonomous, unmanned vehicles developed by robotics company Nuro, and that “resemble a giant pill bug on wheels and can reach 25 miles per hour as they operate on major roadways alongside cars.”

The story says the offering “will be limited to customers who place online orders” at one location inn Houston, the same city where Nuro has been working with Kroger on a similar delivery program. The test is scheduled to start this fall.

The Post writes that this is part of a larger continuum: “On college campuses around the country, food deliveries via robot are becoming an increasingly common sight. After a fleet of 25 delivery robots from the Bay Area start-up Starship Technologies descended on George Mason University’s campus in January, campus officials recorded a spike in breakfast orders … Last week, Uber announced plans to begin testing the first-ever commercial application of food delivery by drone in high-density urban areas, joining companies like Amazon and Google that are seeking to make unmanned commercial deliveries using the same technology.”

A Domino’s autonomous delivery costs $5.95 per drop-off; the Post writes that the pizza retailer “has been testing autonomous delivery systems for several years. In Michigan, and later in Miami, the pizza giant teamed up with Ford to create a delivery service using autonomous vehicles. The company’s chief rival, Pizza Hut, is also testing driverless delivery with Toyota Motor Co.”

Published on: June 18, 2019

Interesting piece in Fortune about a new trend in Seattle - restaurateurs opening small spaces close or adjacent to their more traditional locations, “super personal concepts” that thrive “on face-to-face interaction.”

It is, the story says, “the kind of playful, niche idea that Seattle has seen a lot less of in the last few years, as real estate prices skyrocketed and the labor market dried up. For a long time, that double whammy seemed to keep restaurateurs playing it safe with proven concepts and well-established spaces. But perhaps with the right spot, the time has come for the city’s culinary professionals to innovate their way into better - but not bigger - restaurants.”

The idea is for these chefs and restaurant owners to “seize upon an intersection of their own creativity and turn the traditional limitations on opening restaurants into a format giving them, if anything, a bit more freedom, while offering diners an intimate and incredible experience to boot.”

You can read more about this here.

Published on: June 18, 2019

National Public Radio’s Marketplace reports that “Impossible Foods vs. Beyond Meat just might be the Coke vs. Pepsi of the alternative meat world.” While the two companies have different strategies and target markets, the current reality is that “restaurants tend to be loyal to certain brands over others, and now they’re pledging their allegiance to the companies that produce fake meat.”

You can read more about the coming battle here.

Published on: June 18, 2019

AI company Spoon Guru is out with a new study saying that “72% of consumers do not understand the recommended levels of salt, fat and sugar consumption,” and that “just 28% of shoppers think they can confidently decipher the value of nutrients in food.”

What this means, Spoon Guru suggests, is that retailers have an opportunity “to offer new tools to give better transparency.”

Some other data from the study:

• “54% of US shoppers want retailers to do more to encourage healthy eating.”

“A quarter of Americans believe retailers should offer tools in order to identify the right foods to improve health and dietary requirements.”

Forty percent of Americans say they are afraid of developing a serious illness and 19% fear an early death due to an unhealthy diet. As a result, 74% of those surveyed stated they have tried to improve their health and wellbeing over the past year - however the new study suggests they are failing with a staggering 88% revealing their diet is still unhealthy.”

“68% of respondents revealed they eat five or more processed meals a week, despite half of Americans (50%) claiming they have been eating less processed food over the past year. The conflicting results suggest shoppers may be attempting to eat healthier but are unaware processed foods include cereals, pasta, cheese, etc.”

“To encourage healthy eating,” the study says, “US consumers want “lower costs on healthy options (67%) … more promotions of healthy products (44%) … healthy snacks by the checkout (35%) … better placement of healthy foods in-store (32%) (and) suggestions on healthy food swaps (26%).

Published on: June 18, 2019

The New York Times reports that Facebook has revealed a plan to “create an alternative financial system that relies on a cryptocurrency that the company has been secretly working on for more than a year.”

The system, called Libra, currently has 27 partners, including Uber and Mastercard, and Facebook says that it would like to have a many as 100 by the time it launches, perhaps as soon as next year. “It would be the most far-reaching attempt by a mainstream company to jump into the world of cryptocurrencies, which is best known for speculative investments through digital tokens like Bitcoin and outside-the-law e-commerce, like buying drugs online,” the Times writes.

The story offers some details on how it would work:

“The currency … is being built so that any software developer in the world can build a digital wallet or other services on top of it, similar to the way that Bitcoin can be sent between people.

“The structure of the new Libra currency is based on the blockchain technology made famous by Bitcoin.

“The blockchain concept makes it possible to hold and move digital currencies almost instantly, usually with low transaction fees. Because blockchains are shared databases, they can function without any central operator like the central banks that have historically governed currencies. This structure will allow Libra to be overseen by many companies.

“Customers will be able to hold and spend their Libra with businesses that accept the currency, and there will be services that quickly convert Libra into traditional currencies and send the money to traditional bank accounts, according to project documents released on Tuesday.”

Published on: June 18, 2019

The New York Times has a story about the “boutique ‘fitness clusters’ around the country that have emerged in suburban shopping developments and gentrifying city neighborhoods. These new storefronts are rendering the old concept of ‘mall walking’ absolutely antiquated, if a comparative bargain … As brick-and-mortar retail stores have taken a beating from the internet, yoga, Pilates, rowing, boxing, cycling, barre and H.I.I.T. studios are entering the spaces formerly inhabited by apparel, books and electronics stores: catering to a consumer class seemingly more interested in investing in the shape of their bodies than the clothes that cover them.”

It used to be, the Times writes, that “a visit to an upscale suburban mall or a city shopping district (would) be marked by stops at Gap, Sharper Image and Barnes & Noble, ending in a pile of shopping bags. Now it’s about taking a $36 Pilates class, maybe followed by a $36 indoor cycling session if you’re really committed, then hitting the organic market to slam a $10 coconut water before making a quick stop for $40 cryotherapy.”

Published on: June 18, 2019

• Yahoo Finance has a story about how Walmart’s recent decision to close 17 stores in the US and Canada may be related to cannibalization … it has so many stores that they started competing with themselves: “That finding was made by data analytics firm Placer, which used location analytics to examine where Walmart was closing stores. The firm found that, rather than being the latest victim of retail’s ugly store closure trend, Walmart was largely cannibalizing its own traffic.”

Published on: June 18, 2019

• The Washington Post reports that the UK’s Advertising Standards Authority (ASA) has issued new guidelines that ban the use of gender stereotypes in commercials, print ads, and on social media.

According to the story, “The new guidelines prohibit ads that play up roles deemed more feminine or male, as well as derogatory messages around body image. That would include a TV spot, for example, that shows children making a mess while a man props up his feet and a woman cleans up; or ads showing a man who can’t change a diaper or a woman who can’t park a car. Advertising that links physique and body image to a successful romantic or social life is also, as are ads that belittle men for doing stereotypical ‘female’ tasks.”

The Post writes that “regulators will review any ads that could break the rules individually. And the guidelines don’t cover everything: They wouldn’t necessarily block ads that are targeted at one gender or simply show a woman shopping, for example.”



• Published reports say that Bolthouse Farms has been sold by Campbell Soup Co. to private equity group Butterfly.

Terms of the deal were not disclosed.

Bolthouse’s new CEO is Jeff Dunn … who also is its old CEO. Dunn was president/CEO of Bolthouse when it was bought by Campbell in 2012 and then became president of Campbell’s fresh division before leaving in 2016.

Published on: June 18, 2019

MNB yesterday took note of Bill Murphy Jr. column in Inc. in which he wrote that Amazon’s recent decision to shut down its underwhelming Amazon Restaurants food delivery service actually illustrates a key belief held by the company’s founder-CEO, Jeff Bezos:

“People who are right a lot listen a lot,” he says, “and they change their mind a lot … They wake up and reanalyze things and change their mind. If you don't change your mind frequently, you're going to be wrong a lot … The smartest people are constantly revising their understanding, reconsidering a problem they thought they'd already solved. They're open to new points of view, new information, new ideas, contradictions, and challenges to their own way of thinking.”

Murphy writes that “of course, it's one thing to say that in the abstract. It's another entirely to act on it -- especially when changing your mind could cost you money (sunk costs) or cause other people to think less of you.” Bezos actually does it - he is willing to re-examine the situation, especially in the light of new facts - without apparent concern for appearances.

I commented:

I agree with Murphy 100 percent on this.

Tom Furphy makes this point often. Amazon always has had failures, all of which it has learned from … it is just that now, being bigger and far more visible, the failures end up being bigger and more visible.

MNB reader Bill Kadlec observed:

The Murphy/Furphy piece this morning is another example like the one last week reflecting on how Amazon will figure out how to use physical stores to serve the current generation's way of buying.

Thomas Edison said, "I have not failed. I've just found 10,000 ways it won't work.”



We had a piece yesterday about the continued growth of department store flagships in New York City, which led me to note that there are no Walmart supercenters in Manhattan - the result of extreme pressure by powerful union interests placed on local politicians, who have so far prevented the nation’s largest retailer from opening a store there.

It always has struck me as farcical that Walmart has been essentially banned from Manhattan, while it is safe for the likes of Costco and JC Penney to operate there.

Ironically, of course, Walmart is in Manhattan now. Sort of. Its Jet e-commerce business delivers in the city, and it has established a small beachhead with its Jetblack upscale delivery business, which only operates in Manhattan for the moment.

MNB reader Andy Casey wrote:

It will be interesting to see how this plays out going forward.  When you consider Kroger’s announcement of building an automated warehouse in Florida where they have no physical stores along with Walmart’s new delivery offering, an automated, delivery-only Walmart operation somewhere in the city doesn’t seem that far of a stretch.

Agreed.



Finally, MNB reader Glenn Cantor had some thoughts about the continued concern that many retailers have about expanded tariffs that may be placed by the Trump administration on products exported from China to the US:

Increased tariffs on imported goods will increase consumer prices, which will lead to increasing inflation.  The inflation rate has been relatively stagnant for about 30 years.  Therefore, any indication that inflation will rise more than we have experienced will result in reduced investment in business, declines in house sales, and ultimately lost US jobs.  This will have the opposite effect of President Trump’s promises.  Besides, much of the debt incurred by the US government is owned by China.  President Trump is playing with fire in this trade war.