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    Published on: August 9, 2019

    by Kevin Coupe

    The New York Times writes that “the world’s land and water resources are being exploited at ‘unprecedented rates,’ a new United Nations report warns, which combined with climate change is putting dire pressure on the ability of humanity to feed itself.”

    Which, if you are in the food business, ought to matter. A lot.

    The report, the Times writes, “found that the window to address the threat is closing rapidly. A half-billion people already live in places turning into desert, and soil is being lost between 10 and 100 times faster than it is forming, according to the report.

    “Climate change will make those threats even worse, as floods, drought, storms and other types of extreme weather threaten to disrupt, and over time shrink, the global food supply. Already, more than 10 percent of the world’s population remains undernourished, and some authors of the report warned in interviews that food shortages could lead to an increase in cross-border migration.” The report says that “food shortages are likely to affect poorer parts of the world far more than richer ones. That could increase a flow of immigration that is already redefining politics in North America, Europe and other parts of the world.”

    Indeed, the report also suggests that “a particular danger is that food crises could develop on several continents at once,” which would create a “multi-breadbasket failure” that would be incredibly difficult to address, much less resolve.

    (The report was “prepared by more than 100 experts from 52 countries and released in summary form in Geneva on Thursday.” The he Intergovernmental Panel on Climate Change is described as “an international group of scientists convened by the United Nations that pulls together a wide range of existing research to help governments understand climate change and make policy decisions.”)

    The Times writes: “Barring action on a sweeping scale, the report said, climate change will accelerate the danger of severe food shortages. As a warming atmosphere intensifies the world’s droughts, flooding, heat waves, wildfires and other weather patterns, it is speeding up the rate of soil loss and land degradation, the report concludes.”

    It isn’t all bad news. (Mostly, but not all.) The writes that the report “offered a measure of hope, laying out pathways to addressing the looming food crisis, though they would require a major re-evaluation of land use and agriculture worldwide as well as consumer behavior. Proposals include increasing the productivity of land, wasting less food and persuading more people to shift their diets away from cattle and other types of meat.”

    But it will, the report says, require not just Eyes Open, but also specific and quick action. The Times story is worth reading, and I just hope that people who have the responsibility and capability for creating change read it and take it seriously.
    KC's View:

    Published on: August 9, 2019

    Barnes & Noble is now in the hands of James Daunt, the New York Times writes, as the private equity fund that now owns the retailer hopes that it can achieve some of the same results it achieved at UK book retailer Waterstones.

    Daunt became CEO of Waterstones in 2011, as it seemed headed for bankruptcy, and the turnaround has been remarkable: “The changes have filled Waterstones’ 289 shops, mostly in Britain, with books that customers actually want to buy, as opposed to the ones that publishers are eager to sell. And store managers have been given plenty of leeway to transform their shops into places that feel personally curated and decidedly uncorporate.” In essence, the story says, Daunt created a chain of independent bookstores that “returned to profitability in 2015 … and earns a steady 10 percent margin on sales of roughly $500 million.”

    The Times writes that “Barnes & Noble has been sliding toward oblivion for years. Nearly 400 stores have closed since 1997 — there are 627 now operating — and $1 billion in market value has evaporated in the last five years. This week, Elliott Advisors, the private equity firm that owns Waterstones, closed its deal to buy Barnes & Noble for $683 million. Mr. Daunt will move to New York City this month and serve as the new chief executive.

    “He has said little about his plans, but his playbook at Waterstones offers clues about what’s coming. His guiding assumption is that the only point of a bookstore is to provide a rich experience in contrast to a quick online transaction. And for now, the experience at Barnes & Noble isn’t good enough.”

    You can read the Times story here.
    KC's View:
    I’ve long been pretty skeptical about Barnes & Noble’s ability to survive, mostly because the experience generally has been crappy - mausoleum-like and homogenous all at the same time, with little personality; it is no wonder that independent bookstores have seen a revival even as B&N has continued to suffer.

    But … call me a cockeyed optimist, but the Times story gives me a little bit of hope that maybe Barnes & Noble can find a new way. It won’t be easy - it is a much bigger country, with more than twice as many stores as in the Waterstones chain.

    There are a few things in the story that impress me.

    One … the notion that Daunt believes in the long game. Here’s the relevant passage from the Times:

    “Some Waterstones locations, like tiny Southwold Books in Suffolk, aren’t called Waterstones. Others, like the shop on Gower Street in London, have cafes with added electrical sockets and are swarmed day and night with laptop-toting college students, most of them consuming more electricity than coffee. ‘We’re playing the long game,’ Mr. Daunt said. ‘When those students are rich and famous, they’ll buy books from us and the cost of the electricity will be paid back in spades’.”

    I’m a little surprised that private equity is funding such an approach, but this strikes me as exactly the right way to make this work.

    Two … Daunt’s understanding exactly how much the experience needs to change. Here’s his quote from the Times:

    “Frankly, at the moment you want to love Barnes & Noble, but when you leave the store you feel mildly betrayed. Not massively, but mildly. It’s a bit ugly — there’s piles of crap around the place. It all feels a bit unloved, the booksellers look a bit miserable, it’s all a bit run down. And every year, fewer people come in, or people come in less often. That has to turn around. Otherwise …”

    Exactly.

    Three … Daunt seems to be understand what it means to be a merchant. The Times describes him a perhaps “a bit too erudite for a mass-market retailer; his style was more sommelier than salesman.” That means he understands the notion of curation and recommendation. At the same time, he vetoed at Waterstones the acceptance of what essentially were slotting allowances, which would’ve meant making money on the buy not the sell. That’s huge and exactly, in my mind, the appropriate way to define a differential advantage.

    Daunt has faced some controversy from employees over wages in the UK, but he seems to have weathered them; he didn’t give raises when the company was in severe trouble, but he recently gave everybody in the company a four percent bonus to celebrate its resurgence. Wouldn’t that be something if he could repeat the feat in the US?

    Let’s be clear. Daunt’s job will be, well … daunting.

    But I’m a little hopeful … and I wish him luck.

    Published on: August 9, 2019

    CNBC reports that CVS has decided to slow its rate of store openings this year and next, and instead “will focus its efforts on remodeling stores into ‘HealthHUBs’,” which offer expanded healthcare services such as blood testing and even limited dental services.

    The story says that CVS normally opens about 300 stores a year, but this year “will open about 100 stores and next year will open about 50.”

    The HealthHub concept originally was launched with three stores in Houston, but CVS says it plans to have 1,500 of them operating by 2021.
    KC's View:
    Not just a source of product, but a resource for consumers.

    Need I say more?

    Published on: August 9, 2019

    Morning Consult is out with a new survey saying that “adults of all ages are cutting back on drinking. Nearly half of consumers, regardless of age, have purchased non-alcoholic alternatives, and just over 4 in 10 of the drinking-age population doesn't drink, suggesting that the ‘sober curious’ trend has enough momentum to reshape parts of the alcohol industry.”

    More details from the survey:

    • “Forty-three percent of the drinking-age public doesn't drink: 28 percent said they used to drink but don't anymore, and 15 percent said they've never drunk alcoholic beverages.”

    • “46 percent of the drinking-age population has tasted a non-alcoholic beer or cocktail. That share stays roughly similar no matter the age. Notably, those who regularly drink are more likely to have bought a non-alcoholic drink than teetotalers, suggesting there is money to be made by the growing non-alcoholic beverage industry.”

    • “Desiring a healthier lifestyle (67 percent), wanting to save money (55 percent) and losing weight (44 percent) were the top reasons people have started to drink less.”

    Indeed, almost one-third of drinkers said they are drinking less than a year ago … but the survey emphasizes that this does not seem to be a generational issue - the move away from alcohol seems to cut across all ages, with Baby Boomers as likely to be making changes as Millennials.
    KC's View:
    Not that retailers are going to have to get rid of their beer/wine/liquor sections - if they have them - but this does strike me as information worth having.

    Published on: August 9, 2019

    • Walmart said yesterday that it has committed “$400,000 in direct cash grants to support local community foundations that have set up funds for those impacted by” last weekend’s mass shootings at a Walmart store in El Paso, Texas, by what is being described as a white nationalist domestic terrorist.

    According to the announcement, “To address the urgent need of support, Walmart is providing cash donations to the El Paso Community Foundation's Shooting Victims’ Fund and Paso Del Norte Community Foundation's El Paso Victims Relief Fund. Walmart is also working closely with local officials and government entities to help meet the needs of those affected.”

    “Our hearts ache for El Pasoans,” said Greg Foran, president/CEO of Walmart US. “As we work on helping our associates through this tragedy, we also want to help ensure the community has the resources it needs by providing funds to support the important work the El Paso Community Foundation and the Paso del Norte Community Foundation are doing during this difficult time. We want to support the people of El Paso every step of the way.”

    Walmart has been under pressure to stop selling guns - it sells firearms in approximately half of its US stores - but to this point it has resisted making that change.
    KC's View:

    Published on: August 9, 2019

    • H-E-B announced that will build a new state-of-the-art technology center at its San Antonio, Texas, headquarters that will house some 1,000 employees focused on expanding the company’s digital capabilities. It will be the second such tech facility built by H-E-B; this past June it opened what is called its Eastside Tech Hub in Austin, Texas.


    Internet Retailer reports that “1-800-Flowers.com Inc. will acquire Shari’s Berries, among other assets of FTD Companies Inc. gourmet food business, for $20.5 million,” giving it “more than 450 domain names, copyrights, trademarks, customer data, phone numbers and other intellectual property, related to FTD’s gourmet food business.”

    The story notes that “in June, FTD filed for bankruptcy and announced it would sell off its business in pieces. FTD also owns ecommerce brands FTD.com, ProFlowers.com, PersonalCreations.com, ProPlants.com, Gifts.com and interflora.co.uk."
    KC's View:

    Published on: August 9, 2019

    • Ahold Delhaize USA’s Retail Business Services division has announced “the launch of a new just-for-kids private brand product line. The new line, Nature’s Promise Kids, is an extension of the current Nature’s Promise free from line, which includes many organic options … The Nature’s Promise Kids line, ideal for children ages four and up, features products that are nutritionally equivalent or better than similar traditional products.”

    The line is expected to find its way into Ahold Delhaize US chains between now and the end of the year, with “assortment of products and in-store timing will vary by retail brand.”
    KC's View:

    Published on: August 9, 2019

    Continue to get email about the Walmart-guns issue…

    One MNB reader wrote:

    While many may choose to focus on Walmart’s response to gun sales in its stores as a response to the recent shootings that have occurred in its parking lots, on the flipside of that coin is the question: is it safe to go to a Walmart?  Indeed, is it safe to go anywhere?

    I asked my PSU class this week, as part of a larger discussion, how many people felt less safe compared to a week ago. More than half of them raised their hands. Just FYI.

    From another reader, about the Walmart employees who staged a protest of their company’s current position:

    I am not a gun owner, but I do have a bit of an issue with protesting the selling of guns by Walmart. Did the recent shootings occur with guns bought at Walmart? It may be a fine distinction but Walmart not selling guns isn’t by default going to stop shootings at Walmart. I don’t believe the gun owners I know bought their weapons at Walmart. I understand the sentiment but disagree with the cause and effect. Does something need to be done? Yes, but it goes deeper than the ability to buy a weapon at Walmart. I think the discussion needs to move beyond the ability to buy a gun and to the underlying cause of not understanding that shooting a crowd of people is just wrong.

    From MNB reader Mike Bach:

    Kevin, Walmart is in a tough place with no easy choices.  As the largest retailer on any number of dimensions, including shoppers / week, it can’t be missed that a gun incident in any one Walmart store has larger audience (and impact) than most other venues the mentally unstable can find.

    Growing up in middle America, Walmart was the shopping choice for many bird hunters and skeet shooters.  This isn’t the shopper that’s likely to create violence issues, hence the conundrum for Walmart leadership.   Walmart shouldn’t be forced to make choices when state legislatures are tasked with this responsibility.


    I’m not sure that I’d agree that Walmart shouldn’t have to make choices, but I do feel - strongly - that we have to cut CEO Doug McMillon some slack. This is really, really hard. It isn’t that Walmart would lose sales if it no longer sold guns, but rather that Walmart could face an enormous backlash if it made that decision, with a lot of people potentially saying they’ll never shop at Walmart again.

    This cannot be the only measurement, but it cannot be ignored, either.
    KC's View:

    Published on: August 9, 2019

    In this new Retail Tomorrow podcast, recorded at GMDC’s annual GM conference in Denver, we focus on the ways in which startups are working to disintermediate traditional retailers … how retailers can turn these innovations to their own advantage … why cultural resistance within companies can be the ultimate enemy of progress … and even brainstorm about a business model that could’ve made Toys R Us relevant again.

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

    The Retail Tomorrow podcast series is a production of GMDC, the Global Market Development Center.

    Our guests:

    • Patrick Fore, CEO and co-founder of Fleat.

    • Sterling Hawkins, co-founder of the Center for Advancing Retail & Technology (CART).

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

    Pictured, left to right: Patrick Fore, Kevin Coupe, Sterling Hawkins






    KC's View:

    Published on: August 9, 2019


    One of the great pleasures of being in the Pacific Northwest each summer - for those of you who are somehow unaware of this despite how often I mention it here, I am on the adjunct faculty at Portland State University and teach there each summer - always is heading up to Seattle at least once to hang out at Etta’s, the Tom Douglas-owned restaurant just north of the Pike Place Market.

    The appeal of Etta’s, for those of you who don’t know, can be summed up in one word - Morgan. Morgan is the bartender at Etta’s who I’ve gotten to know over many years as a patron; I’ve written about him in both books as being a paradigm of what it means to be in the service business, and how he’s taught me about the power of treating customers as if they are regulars. Plus he’s a great guy … and make incredible recommendations.

    That’s what happened last weekend, when I was hanging out in what I think of as my chair at Etta’s (think Norm in “Cheers”). He poured me a glass of a fantastic glass of wine - the 2018 Chateau de Campuget Tradition Rose, which was perfect for a warm summer day, cold and refreshing and just wonderful.

    Then came an even better moment. Morgan asked me if I was thinking a crab cake sandwich or sashimi, and I told him to surprise me … I didn’t have a craving, and was willing to trust him. I was glad I did … he brought out this extraordinary braised octopus, served with chilled green beans, miso citrus, black sesame, and toasted rice.

    That’s my idea of a great surprise.

    I’ll tell you what I tell everybody. You get to Seattle, you go to Etta’s, ask for Morgan, tell him Kevin sent you … and then trust him.



    I went to see Hobbs & Shaw this week, and I normally would describe it as dumb fun - it is a one-note movie about bickering and bromance between Dwayne Johnson and Jason Statham, playing characters that they’ve played before in some of the more recent Fast & Furious movies.

    But considering the real violence that we’ve been exposed to in this country in the past week … and the inevitability that we’ll be exposed to more of it any day … I’ve decided that I am tired of the wanton, relentless, excessive and gratuitous violence and destruction in which movies like this traffic. I’m not trying to be politically correct here. I just think it is exhausting and, at the end of the day, a substitute for actual creativity and imagination.

    I like both Johnson and Statham. Johnson’s career evolution has been extraordinary, and I actually think his work in HBO’s “Ballers” has a level of subtlety he doesn’t go for in his movies; I think Statham was terrific in both The Bank Job and The Italian Job. But they’re better than this nonsense, which, of course, will is making a ton of money and probably will end up with more sequels and more violence.

    I’m not saying I won’t go to any more movies that include violence. But I’m just saying I’m going to get a lot more choosy and try to avoid the exploitive.



    Another mass market movie that I saw recently - Spider-Man: Far From Home, which features Tom Holland (charming in the title role) and basically is a sequel to both Avengers: Endgame and Spider-Man: Homecoming. It is exactly what you’d expect - that’s not a bad thing, and it does have some nice moments.

    But it is what it is.



    One final thing. Last Sunday I had the chance to go to a concert given by rock violinist Aaron Meyer at the Stoller Vineyard in the Willamette Valley, benefitting a music education program that Meyer runs. Meyer is amazing - he was ably backed up by not just a wonderful band and the terrific Brown Sisters, but also by a number of his students - and it was wonderful to see so many people who believe in the value of arts in the schools.

    It all was lovely … as was the participation of so many food industry people who support Meyer’s efforts. And thanks especially to Ron and Karyn Brake for inviting me to join them. It was my privilege and pleasure.



    That’s it for this week. Have a great weekend.

    Back Monday.

    Slàinte!

    KC's View: