retail news in context, analysis with attitude

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

• The Washington Times reports that "the US Supreme Court rejected Monday an appeal from, requiring them to pay their warehouse employees as they go through anti-theft security screenings following their shifts." The ruling came on the first Monday in October, traditionally the beginning of the Supreme Court term.

The Times provides some background: "A group of Amazon workers filed a lawsuit in 2010 against the shipping giant and their staffing company for what they describe as mandatory 'post-9/11 type of airport security' screenings to combat theft by employees."

The workers argued that they should be paid for the roughly 25 minutes each day that they spent going through security. Amazon said the characterization was "grossly inaccurate."

Bloomberg has a story about how delivery service and online retailer Instacart has seen its sales rebound after its separation from Whole Foods - one of its first customers and an investor in its business - after the retailer was acquired by Amazon. According to the story, "The gig-economy startup has picked up enough new business from retailers like Costco Wholesale Corp., Publix Super Markets Inc. and Wegmans Food Markets Inc. to more than make up for the shortfall."

The story notes that "Instacart’s army of shoppers now weave their way through the aisles of more than 300 retailers, 100 more than it had in its network last year. It now covers 80% of U.S. households, up from 35% in 2017. Instacart is looking for more: It’s pushing to add alcohol to its food deliveries, a service that’s now available in more than 20 states."

And, it quotes Barclay's analyst Karen Short as saying that "both retailers and consumers are becoming increasingly reliant on Instacart."

What the Bloomberg story doesn't mention is that while Instacart is a strong short-term solution for retailers, it is a horrible long-term solution, since it is positioning itself to be a retailer competing with its client retailers, opening dark stores and selling its own private label, and not needing client retailers in many markets. More and more consumers say they are "Instacart customers," which is good for Instacart but a real threat to retailers that it is disintermediating out of the store-shopper relationship. Plus, there are examples out there of how Instacart has weaponized shopper data against its own clients.

The good news is that one of the things I heard at GroceryShop this year was that retailers are beginning to look for alternatives to their existing Instacart relationships … so maybe they finally are seeing the light.

• The Wall Street Journal reports that outlet stores, which long seemed "immune to pressures weighing on traditional malls, including the shift to online shopping that has sapped customers from physical stores," now seem to be showing signs of stress related to the same trends. "Outlets are feeling the effects of retail bankruptcies and the shift to online shopping, too. Chains including Gymboree and Charlotte Russe have closed locations in outlet centers, and Forever 21, which filed for bankruptcy protection this week, plans to close around a dozen outlet stores."

Which is why "Simon Property Group Inc., one of the largest mall owners, in conjunction with Rue Gilt Groupe, which operates flash-sale websites, has launched, where brands from Vince to Under Armour offer their outlet goods for sale online. It is one of the first curated websites to feature merchandise from outlet stores."
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