business news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: June 24, 2019

    by Kevin Coupe

    Talk about market potential.

    Published reports say that a new poll from says that close to 40 percent of people between the age of 18 and 24 have not used deodorant in the last 12 months, and that close to half of people in that age range have not purchased deodorant in the last 12 months.

    Based on a recent experience, I’d suggest that a sizable percentage of them are riding the New York City subway system.

    People slightly older - 25 to 34 - apparently smell slightly better. The same poll says that 37 percent of them say they haven’t bought deodorant in the past year, and 31 percent of them say they haven’t used it in the past month. As they get older - 35 to 44 - they get even better … only 22 percent of them say they haven’t used it in the past month, while only 16 percent of people 45 and older say they do not wear deodorant.

    It is an Eye-Opening generational portrait … and at least one company seems to think it has figured out how to get young people to use deodorant. Schmidt’s is teaming up with Justin Bieber for a new natural deodorant line called Here + Now.

    This wouldn’t necessarily be my choice for how to entice young folks, but hey, whatever works…

    KC's View:

    Published on: June 24, 2019

    Fox Business reports that Walmart has installed cameras powered by artificial intelligence in more than 1,000 of its stores, “in an effort to combat shrinkage — loss due to several causes including theft, scanning errors, waste and fraud.”

    The cameras, according to the story, were rolled out about two years ago, and Walmart says that it “has seen positive results since then,” with shrink “reduced in stores where the cameras have been added.”

    “Walmart is making a true investment to ensure the safety of our customers and associates," says Walmart spokeswoman LeMia Jenkins. "Over the last three years, the company has invested over half a billion dollars in an effort to prevent, reduce and deter crime in our stores and parking lots.”
    KC's View:
    It is a little disconcerting that so much of our lives are being captured on camera, but it isn’t really surprising. My assumption is that this is a trend that is unlikely to be reversed, and that there will only be more cameras and microphones.

    If it is a matter of fighting shrink, fine. If it is a matter of ensuring employee and shopper safety, fine. But I do worry that the temptation will be there to do more with this technology, and that basic civil rights will be at risk.

    Francis Ford Coppola totally got this right - 45 years ago. If you’ve never seen The Conversation (1974), you need to. It is an amazing movie about a surveillance culture that, in retrospect, was just beginning. Gene Hackman is the lead, and he never was better.

    Published on: June 24, 2019

    The Los Angeles Times has a good story about how both Amazon and Walmart, looking to provide better service and greater convenience, “are now offering to send delivery people inside your house to safely deposit your packages indoors and your groceries inside your fridge. To calm fears that delivery people might get up to no good, both companies are promising to let you watch the deliveries happen live on video.”

    But, the Times points out, “There’s one catch: Amazon and Walmart get to hang on to that video too … With little formal accountability or transparency on how these companies store, process and monetize the video and audio recordings of your home, privacy experts are concerned that consumers could be signing up for more than they realize.”

    The fact is, “with the advent of computer vision analytics, which offer the ability to extract consumer insights from millions of hours of video, the companies behind these smart-home services could use imagery from your living room to improve their ad targeting or as raw material to train their computer vision algorithms.”
    KC's View:
    Interesting that this story would come out at around the same time as the one about Walmart’s in-store surveillance initiatives. It is one thing about being watched when I go to the store … but it is another when I’m urged to invite the store to come into my home and, in effect, surveil me there.

    It would be very easy for Amazon, Walmart or anyone else to alleviate privacy concerns. Just promise to encrypt all the video, and only access it when given permission by the homeowner. Short of that, I don’t think I’m going there. Short of that, companies like Walmart and Amazon are just begging for a public relations nightmare that could totally change the public narrative about their companies. That’s irresponsible, in my view.

    But, it gets worse…

    Published on: June 24, 2019

    National Public Radio reports that Amazon has won approval from federal regulators for a patent on "home surveillance" drones.

    According to the story, “the patent papers describe a future in which Amazon customers order drones to hover around a home and scan for things such as a garage door left open, a broken window, graffiti or a fire. As Amazon envisions, a customer can have a package delivered by drone and then instruct the unmanned aerial vehicle to conduct a ‘surveillance action,’ the authors of the patent wrote.

    “When the drone detects something awry, a text message or telephone call can be sent to the homeowner or to local authorities.”

    NPR notes that “to address some of the privacy concerns that arise from the proposed service, Amazon says it will use geofencing, or placing a digital perimeter around a specific location, to ensure that the homes of people who do not want their properties videotaped will not be recorded.”

    The approvals come as Amazon is saying that within months it will be sending up Prime Air delivery drones to deliver products from fulfillment centers.
    KC's View:
    I love Amazon, but for me, this is just adding to the narrative that it is getting too big, too pervasive, too intrusive. I understand the value proposition, I think, but I also think that Amazon needs someone to be sitting at the table who is questioning the wisdom of initiatives like these.

    It is the Jurassic Park lesson - Just because you can do something doesn’t mean you should do something.

    Published on: June 24, 2019

    The Los Angeles Times has a story about how history in Southern California may repeat itself.

    Here’s the lede:

    “Nearly 16 years ago, the largest and longest supermarket strike in U.S. history reshaped the Southern California grocery industry.

    “Tens of thousands of workers at Albertsons, Vons, Pavilions and Ralphs stores spanning from San Diego to San Luis Obispo went on strike or were locked out, starting in October 2003 and lasting more than four months … During the strike, the chains in the labor dispute lost a combined $1.5 billion in sales.

    “And now it might happen again.”

    The story points out that this week, “members of the United Food and Commercial Workers union in Southern and Central California plan to vote on whether to authorize another strike, this time by 46,000 unionized workers. Negotiations have stalled on a new contract with Albertsons — which now owns Vons and Pavilions — and Ralphs.”

    While a strike vote doesn’t necessarily mean a strike will happen, it does serve notice that the union is serious. And, the Times points out, the “employees are still working under a three-year contract that expired March 3.”

    You can read the entire story here.
    KC's View:
    I remember that strike … MNB was still young (as was I, at least relatively speaking), and there was, as I recall, almost daily coverage of the labor discord.

    The biggest takeaway was the degree to which local shoppers observed the picket lines, and how the strike reshaped a lot of people’s shopping habits. The competition is tougher and more numerous today, and I don’t think that a mainstream, traditional chain can afford to endure a similar scenario today.

    Published on: June 24, 2019

    The Associated Press reports on how “major retailers have diversified their inventory for Pride month, selling apparel and other goods that celebrate LGBTQ culture to mark the 50th anniversary of the Stonewall uprising.”

    It isn’t just in New York, a place where it might be expected that the LGBTQ would find greater acceptance, a heartier embrace, and marketing efforts designed to sell them more stuff.

    But, the AP writes, it also is in places like Oklahoma City and Fresno, places politically distant from cities like New York and San Francisco, but where Pride Month suddenly seems to be in vogue.

    “It took decades,” the AP writes, “but American businesses in recent years have introduced more LGBTQ-themed items, no longer considering them anathema to mass marketing. The LGBTQ presence in retail has never been as visibly mainstream as in 2019.”

    It isn’t always simple: “Some companies participating in Pride campaigns have also been criticized for having their apparel made in countries where being gay is illegal, or where persecution is commonplace.” At the same time, “Many companies with Pride-branded apparel lines are also making donations to LGBTQ organizations or are giving a percentage of their sales.”
    KC's View:
    Some of this may be a matter of social conscience, but there also is the matter of making sales. I do believe that the bottom line plays a role here … though I also hope that this is not all that is being considered.

    Published on: June 24, 2019

    The Wall Street Journal reports that a number of restaurant chains are “pushing back against fees charged by delivery companies, turning up the heat on young businesses already wrestling with rivals in an increasingly crowded market for bringing food to people’s doors.”

    The goal is to not just negotiate lower commissions with the delivery companies, but also ask “delivery partners to spend more on marketing and promotional discounts.” The renegotiations are occurring in some cases because some restaurant companies “were too quick to accept unfavorable terms from delivery companies, fearing they would otherwise meet the same fate as clothing stores and bookstores whose sales have been felled by online delivery.”

    The Journal writes that “delivery has quickly emerged as one of the biggest conundrums facing the food business, from restaurants to groceries. Consumers want the convenience, but the technology and logistics required to get it right - whether in-house or through an outside provider - often are more costly, outweighing any additional revenue generated.”

    At the same time, “Restaurateurs say high fees dent their profits. They add that lower fees and more promotional spending by delivery companies could increase customer choice by enticing more establishments to offer delivery.”
    KC's View:
    There is so much competition in the delivery category here - the players include names like DoorDash and rubHub and UberEats - that Amazon actually got out of the business. That doesn’t happen all that often.

    That much competition means that some of the restaurant chains have some leverage in making these demands.

    Published on: June 24, 2019

    Bloomberg reports that the new ownership of the Toys R Us retail brand plans to have as many as six bricks-and-mortar stores open in time for the end of year holiday shopping season, each one about 10,000 square feet in size, or about a third of the size of the banner’s old units.

    According to the story, “The locations will also have more experiences, like play areas. The startup costs could be minimized with a consignment inventory model in which toymakers ship goods but don’t get paid until consumers buy them.”

    Bloomberg writes that “Richard Barry, a former Toys R Us executive who is now CEO of new entity Tru Kids Inc., has been pitching his vision to reincarnate the chain to toymakers, including at an industry conference this week … It remains to be seen how much of a boost the retailer’s comeback will provide the toy industry, including giants such as Hasbro Inc. and Mattel Inc. The original Toys R Us, the only national toy chain, left a huge hole when it went under. It had been generating about $7 billion in sales a year in the U.S. through more than 700 locations, including the Babies R Us brand.”
    KC's View:
    I may be wrong about this, but I am not yet persuaded that the world needs the return of Toys R Us. I’ll want to see what they’re bringing to the table that is different and compelling and able to compete effectively.

    Published on: June 24, 2019

    Fast Company has a story about how Ikea, which has staked a claim to being the world’s sixth largest food retailer, now “is thinking about expanding its food footprint even further into home deliveries.”

    Ikea has built its food business on “meatballs, cinnamon rolls, and herring that hungry shoppers grab in Ikeas around the globe,” the story says that the retailer is said to be readying a delivery component in Paris. It will focus on “its Swedish foods - which include salads, salmon, beets, and cabbage - and which are distributed out of its two-story, 58,000-square-foot urban store located centrally in the city. If the pilot is successful, Ikea may bring the idea to Spain and other European markets in the future.”

    The Fast Company story says that some things remain to be decided, such as whether hot foods will be delivered as well as chilled and frozen foods. “But the motivation behind this project isn’t difficult to deconstruct,” the story says. “Ikea has been building more small stores in urban locales. It’s investing in a better app and website. And it continues to hone its food program, eyeing how its meat-based menu can be more sustainable into the future.”
    KC's View:
    Why not? The water is warm, and everybody else seems to be jumping in.

    Published on: June 24, 2019

    The Financial Times reports that France-based retailer Carrefour has sold 80 percent of its China business to, described as “a Chinese retailer with more than 8,881 stores in more than 700 cities.”

    The cash deal is said to be worth more than $700 million, and includes a provision that allows Carrefour to sell the 20 percent of the business that it still owns during “several liquidity windows.”

    The FT story says that “Carrefour entered the Chinese market in 1995 and operates a network of 210 hypermarkets and 24 convenience stores in the country,” but the business has remained “troubled,” and Carrefour has been looking for the exit door.
    KC's View:
    Carrefour has been adjusting its business model as it adapts to tougher competition from online retailers and discounters. This means fewer hypermarkets and more c-stores and online offerings … and, apparently, less of a global footprint.

    How the world has changed.

    Published on: June 24, 2019

    Venture Café, a non-profit focused on growing inclusive entrepreneurship in New England, announced that it has “teamed up with Retail Business Services (RBS), the services company of Ahold Delhaize USA, to launch a new supply chain immersion program. The 10-week program is designed for early-stage entrepreneurs focused on building a next-generation products or services to solve problems in the retail supply chain.”

    Entrepreneurs/teams can apply here.

    According to the announcement, “the Supply Chain Seed Program, powered by Retail Business Services, an Ahold Delhaize USA company, will combine the best of Venture Café’s programming prowess with exclusive access to supply chain executives. Five entrepreneurs/teams will be selected to participate in the program and will receive workshop training, industry mentorship, startup coaching, and tour Retail Business Services’ new information technology office, which includes the company’s innovation lab, Propulsion Labs. The program will culminate in the Supply Chain Innovation conference held at Venture Café Cambridge where the program participants will demo their solutions and pitch a panel of investors.”
    KC's View:
    This is more than just a one-off. I had the opportunity late last year to moderate a panel discussion on supply chain issues that was sponsored by RBS and held at the Venture Café location in Cambridge, Massachusetts, in the shadow of MIT, and I found it illuminating and provocative. Lots of brain power there, and I think RBS is doing a good job of trying to access it to drive its business forward.

    It is a good model for what companies can and probably should do.

    Published on: June 24, 2019

    The Associated Press reports that 7-Eleven “is launching a service that lets customers order everything from its trademark frozen drink to a battery charger and have it delivered to a public place like a park or a beach … more than 2,000 7-Eleven ‘hot spots’ including New York’s Central Park and Venice Beach in Los Angeles will be working starting Monday. Customers need to download 7-Eleven’s 7NOW app and select ‘Show 7NOW Pins’ to find a hot spot near them.”

    According to the story, “The chain foresees eventually having 200,000 hot spot locations … The strategy follows a similar service run by Domino’s that lets customers order pizza and other items on its menu and have them delivered to more than 150,000 public locations.”
    KC's View:
    Like I said. The water is warm. Getting warmer.

    Published on: June 24, 2019

    The Wall Street Journal reports this morning that FedEx “is offering big discounts to woo online merchants to its air network as it seeks to refashion a delivery system ill-equipped for the rise of e-commerce … The deals are being given to try to win over shippers from FedEx rival United Parcel Service Inc. and to get them to switch from what has historically been a lower-price shipping option in FedEx Ground.”

    The Journal points out that this is just one of a “flurry of changes” that FedEx is embracing, demonstrating “a pivot toward a deeper tie to e-commerce shippers.” Among them are its decision to “deliver packages seven days a week starting in 2020 to serve online shoppers,” as well as “shift some two million packages out of the U.S. Postal Service network and deliver them on their own.”

    In addition, “FedEx said that it would end its domestic air-shipping contract with Amazon, which makes up 1.3% of FedEx’s annual revenue, so that it can focus more on serving the broader e-commerce market, including large retailers like Walmart Inc. and Walgreens Boots Alliance Inc.

    “FedEx also is vastly expanding its physical presence with plans to open on-site locations in about 8,000 Dollar General Inc. locations. That gives FedEx a wider rural footprint, where shoppers can pick up and drop off packages, including returns.”
    KC's View:
    FedEx may want to be more competitive against UPS, but it also recognizes that it needs to compete with Amazon, which is in the process of putting its own distribution/delivery network into place. Amazon’s overall approach - which has created hundreds of distribution centers around the country designed to be as close as possible to consumers, to facilitate easier and faster delivery - is different from the revolutionary approach pioneered by FedEx some four decades ago, which now requires some updating and adjustment.

    There’s a lot of business at stake. The Journal writes that “FedEx is projecting growth in online shopping will double the number of packages shipped in the U.S. to 100 million a day by 2026. It is trying to capitalize on that growth after initially balking at handling too much of the lower-margin e-commerce shipments.”

    Published on: June 24, 2019

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

    USA Today has a piece about how record-breaking rains in Ohio have “put thousands of acres – and farmers – underwater across the state.

    “This time of year, Ohio's farmland should be alive and brand new again, peppered with the pop of bright green corn stalks already reaching the height of a tall man's shins. Instead, standing water comes up to the knee in some fields. Plots are more like muddy swamps where the only thing that's growing is mold and disease and mosquitoes.” There has been far less planting than there normally would be at this time of year.

    What this means, according to the story, is that “fewer plants mean lower yield means less money in the bank. All of this also means more hardship and heartache for a position that already has the highest suicide rate of any job in this country, double even that of veterans.

    “This isn't just about the farmers, though. These crops – corn and soybeans – are tied up in a lot of what we all eat and how much we spend on it. So the long term and less obvious impact of today's rain and mud? That could show up on higher grocery bills.”

    And, as USA Today writes, this is “not a problem that stops at the Ohio border. The planting season, overall, is at its slowest pace in 40 years.”

    Bloomberg reports that Panera Bread Co., “which does most of its business at lunch with its soups and sandwiches, wants to draw more customers for dinner, so it’s testing new menu items in two cities that are designed to resonate later in the day … The dinner menu will be available in Lexington, Kentucky, starting in July and Providence, Rhode Island, in September. The new items will leverage existing ingredients like dough for flat breads, but additional staff will be required in the evening to prepare and cook the dinner foods, the company said.”

    Panera believes, the story says, that it will be able to use “the drivers it has hired in its nationwide food delivery expansion” to reach customers who might never have thought of the company for dinner in the past.

    • The Wall Street Journal reports that “San Francisco is expected to become the first city in the U.S. to ban e-cigarettes this week, a move that will likely pit the city against one of its fastest-growing startups: Juul Labs Inc.

    “The San Francisco Board of Supervisors will hold a final vote on the ordinance, which bans the sale, distribution and manufacturing of e-cigarettes, on Tuesday. The measure will then need to be signed by the mayor, London Breed.”

    Even if the ban goes through as expected, it won’t necessarily be permanent; the Journal writes that permanence will depend “on a Food and Drug Administration assessment of the health risks of e-cigarettes. Currently, the agency is giving Juul and other e-cigarette companies until 2022 to submit their products for a health review by the FDA.”

    The story notes that “Juul has voluntarily stopped selling sweet and fruity flavors in bricks-and-mortar stores, curbed its use of social media and strengthened the age-verification tools on its website.” But it also just accepted a $13 billion investment from tobacco producer Altria … which some of us would suggest has a history of addicting young people to poison, and so there’s little reason to think that it suddenly has its customers’ best interests at heart … which has to play into the thinking of San Francisco lawmakers.
    KC's View:

    Published on: June 24, 2019

    We are having what seems to be an endless debate about whether bakers should be allowed to discriminate against gay customers by refusing to bake a wedding cake for a same-sex wedding. (I am self-aware enough to know that I’ve given away my position in a the phrasing of the issue. I could’ve said, “We are having what seems to be an endless debate about whether religious freedom should be constrained by being forced to bake a same-sex wedding cake.”)

    MNB reader Bob McGehee weighed in:

    When did we make the leap from "I don't like it, I don't think it's right so I'm not going to do it" to "I don't like it, I don't think it's right so YOU'RE not going to do it"?  Who decides which are the correct opinions? 

    Just to be clear, I'm not talking about endorsing unlawful acts, promoting anarchy, etc. I'm just trying to understand why some people are so convinced there is only their way and fully expect everyone to conform to it or suffer dire consequences.  If it truly causes you to go off the rails, just change the channel, don't buy it, do go to it, just ignore it.  Just give other people the same right as you which is to have an opinion.

    I'm pretty sure that most people respect other's race, political stance, color, sexuality, religion, etc. BUT to expect them to be revered above all others smacks of hubris and sure-to-be unfulfilled expectations.

    I get your point, but I don’t think it is a matter of everybody being allowed to have an opinion. Nobody is suggesting that the bakers in these cases are not entitled to their opinions; if their religious beliefs are such that they disapprove of same-sex weddings, then they should not marry someone of their own gender. Don’t go to the wedding, even if you are invited. Don’t send a gift.

    It gets dicey … and becomes a subject for ongoing, often contentious debate … when religious beliefs create a situation in which people are discriminated against. I don’t think it is hubris for a gay person to ask for a bakery to bake a cake that will be consumed at a same-sex wedding. I think it would be terrible for someone to look at me and decide not to sell me something that he or she sells everyone else just because of something about me of which they do not approve. The argument that religious beliefs have been used to justify discriminating against mixed-race weddings, and that this has been established as being illegal, strikes me as an apt comparison.

    It is not a matter of being correct or incorrect. It isn’t even a matter of being politically correct or incorrect. It is a matter of whether discrimination should ever be acceptable in a free society, regardless of how it is justified.

    Last Friday, the Eye Opener was about how an organization called the American Society for the Defense of Tradition, Family and Property has managed to accumulate more than 20,000 signatures on a petition demanding that Netflix take down a series called “Good Omens,” which is a tongue-in-cheek look at the apocalypse. The petition calls the show “a mockery of religion for depicting ‘God as a tyrant and the Devil as being good.” CNet wrote that the group also took issue with other aspects of the show, like “God being voiced by a woman, the portrayal of the Antichrist as a normal kid, the four riders of the apocalypse as a biker gang and more.”

    I commented:

    First, I’d like to know how many people who signed the petition actually have seen the show. Second, I’d like to know if the people who signed the petition understand they nobody has to watch the show … if you start it and you are offended, turn it off. If you don’t like what you read about it, don’t start watching it.

    On the other hand, a little viewer outrage often is good for business. It makes people who haven’t watched a program wonder what is so offensive about it, and they add it to their queues.

    Like I have. The previews didn’t do it for me, and so I had no plans to watch it. But now I’m intrigued.

    One MNB reader agreed:

    This kind of petition nearly always makes me wonder if the person signing has actually watched the show. I haven’t but now like you I want to see for myself what it is about. I kind of like the idea that the four riders of the apocalypse are a biker gang. And don’t even the most devout at times question the loving nature of God. God doesn’t mind the questioning.

    I was educated by the Jesuits, and was taught that God gave me a brain so that I would think and ask questions for myself. To do otherwise, and to not use my brain, would be a waste … which means being willing to be challenged, and to understand, as the great Pete Hamill once said, that ideology is a substitute for thought.
    KC's View: