business news in context, analysis with attitude

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

CNBC reported last week that Amazon “plans to retrain a third of its U.S. workforce — or 100,000 workers — by 2025 to help its employees move into more advanced jobs or find new careers … The planned program is among the biggest corporate retraining initiatives ever announced, at a cost of roughly $7,000 per worker, or $700 million.”

According to the story, Amazon “intends to expand its existing training programs and introduce new ones. The training will be voluntary, and most of the programs are free.”

Among the retraining programs are “Amazon Technical Academy, which equips non-technical employees with the skills to transition into software engineering careers” and “Associate2Tech, which trains fulfillment center associates to move into technical roles.”

• Ahold Delhaize USA’s Retail Business Services division announced the opening of “a fresh processing facility and culinary innovation center in Rhode Island” that “will process fresh food items for area grocery stores, including cut fruit and cut vegetables, leaf, grain and pasta salads, sandwiches, wraps, and other items commonly found in deli or grab and go sections of supermarkets. Initially, the facility will serve the Hannaford and Stop & Shop brands.”

The facility will be run through the company’s Infinity Fresh Kitchen subsidiary.

I hope there is a real effort here to put a focus on high quality - there are plenty of mediocre brands out there, and I think that mainstream retailers would do well to decide to make quality food - produced by people who understand food culture - a marketing centerpiece presented as a differentiator.

Fox Business reported that Starbucks has “opened its first express retail store in China aimed to transform pickup and delivery for its customers.”

Dubbed Starbucks Now, the store “opened in Beijing’s financial district and featured a minimalist design and limited seating — much different from its typical stores. One or two baristas will be at the express location to help with walk-in orders as well as those made on its app and website.”

But the main feature is “an in-wall system where delivery riders are directed to a designated pickup portal for the order they are delivering” - the store is designed for ease of use by delivery personnel who are taking its coffee from the store to the offices and homes where it has been ordered.

The story notes that “Starbucks has been expanding its delivery program in China amid competition from other chains such as Luckin Coffee. Starbucks said it plans to open more Starbucks Now stores in ‘high-traffic areas’ in the country.”

No plans to expand the concept to other markets, like the US, have been announced.

CNBC reports that CVS plans to expand its HealthHUB concept - which offers expanded “health services and products like blood testing and sleep apnea machines” - which has been successfully piloted in the Houston market.

CVS “announced last month it would add 1,500 HealthHUBs by the end of 2021,” the story says, and “in the first half of 2020, CVS will open HealthHUBs in Boston, Dallas-Forth Worth, Florida, Maryland, North Carolina, Ohio, and Virginia. It will also open a handful of stores in Hartford, home of CVS’s newly acquired Aetna’s headquarters, New York City and Washington, D.C.”

The story notes that “HealthHUBs embody CVS’s vision for the $70 billion acquisition of health insurer Aetna it completed last fall. CVS hopes that in combining drugstores, pharmacy benefits and health insurance, it can better tailor its stores to treat chronic diseases and other costly conditions, improve the stores’ performance and lower health-care costs.”

• The Seattle Times reported that Starbucks has decided to stop selling newspapers in its 6,800 US stores, beginning in September.

The move, according to the story, “will eliminate the three national dailies that are now sold in racks at Starbucks — The New York Times, which Starbucks has carried since 2000, and The Wall Street Journal and USA Today, both of which have been in the stores since 2010. It will also do away with local newspapers, including The Seattle Times, which has been available at Starbucks stores across the Pacific Northwest since at least the early 1990s.”

The Times writes that “Starbucks spokeswoman Sanja Gould said the move follows the decline of in-store newspaper sales and is part of the company’s broader attempt to respond to ‘changing customer behavior’.”

The story points out that this isn’t good news for the newspaper business, which has been suffering for years (though it has seen something of an uptick in readership - especially in digital editions - since 2016). The Times also points out that Starbucks was such a valuable venue for the three national papers that some were willing to offer free advertising to Starbucks in exchange for a continued presence. Not enough, I suppose, in the end … but this is a shame. I’ll miss seeing newspapers there, though, to be honest, if I were reading the paper while drinking coffee it almost always is on my iPad.

• The Minneapolis/St. Paul Business Journal reports that Lunds & Byerlys plans to close “all 14 of its pharmacy locations next week,” transferring its patient prescriptions to nearby Walgreens locations.

"Unfortunately, it has become increasingly difficult for retail pharmacies given a number of economic challenges within the industry," the company said in a statement.

The Journal writes that “the pharmacies are all located in the Twin Cities metro area and are connected to existing Lunds & Byerlys stores. The company said it was remodeling the spaces, though it's unclear if they would be converted into more grocery-store space or used for some other purpose. The fate of the pharmacy employees is also not known.”

• The New York Times reported that department store chain Kohl’s is “now accepting Amazon returns at its more than 1,100 stores after running a pilot program in 100 locations. The retailer, which will pack, label and ship the returns for free, expects the program to benefit millions of shoppers along with bringing more people into their stores, Michelle Gass, the company’s chief executive, said in a statement … It timed its national rollout to the back-to-school shopping season.”

The story quotes Oliver Chen, a retail analyst at Cowen, as saying that “it’s an interesting marriage because what Kohl’s needs is store traffic, and what Amazon needs is to make customers happier with a place to return their items. The dream is that it’s a fair but attractive split where that shopper will come in and purchase other items.”

• The Sacramento Bee reports that California is changing its definition of beer “to include varieties fermented with fruit, honey, spices or other foods.” The bill making the changes was signed by Gov. Gavin Newsom.

According to the Bee, “Tom McCormick, executive director of the California Craft Brewers Association, said the new law won’t change what the average consumer thinks of as beer, which is made from malted grain or a malt substitute. California brewers have already been brewing beers using fruit for flavoring, he said.

“Under prior California law, using fruit in the fermentation process required a wine license, but the new law clarifies that beer brewers can use fruit and other ingredients to supplement their products, McCormick said.

“The change puts California law in line with federal law, which already allows for fruit and other ingredients to be used during beer fermentation.”
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