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: November 1, 2019

    There is a lovely piece in the New York Times about the new Wegmans store in Brooklyn … penned by Jesse Wegman, a member of the Times editorial board, who writes:

    "I am not, alas, a Wegman Wegman. Or, more precisely, the Wegmans of Rochester, N.Y. — who founded the most beloved grocery chain in America, which opened its first New York City store, and its 101st store over all, in Brooklyn on Sunday — have yet to claim me. As far as I know, I am just a garden-variety Wegman."

    Jesse Wegman concedes that he has had little personal experience with Wegmans stores to this point, though he has frequently encountered - because of his last name - the unbridled enthusiasm that so many people have for the brand.

    "In the face of enthusiasm like this, the skeptical reporter in me is on high alert. But I will admit that the sheer size and positive energy inside the store was impressive, as were its alarmingly wide aisles. And it’s one of the company’s smaller operations.

    So what explains this level of passion for a grocery store? Some of it is the natural loyalty that attaches to a family-owned business, which Wegmans has been for more than a century. Some of it is the fact that Wegmans predated the current trend of massive, well-stocked, high-quality supermarkets. But what struck me most in the end was not the range or quality of the food options — after all, I can find the same at Whole Foods or other similar modern emporiums, albeit for more money. It was the sense of community, of shopping for food as reaffirmation of a shared civic life in which everyone looks out for one another. This sense seems to exist between the owners and the staff (Wegmans consistently ranks as one of the best workplaces in the country), and between the staff and customers."

    Excellent piece - Eye-Opening because it focuses on the connections that transformative retailing can forge with shoppers - and you can read it here.
    KC's View:

    Published on: November 1, 2019

    GeekWire reports that Amazon has confirmed that its Amazon Go team is working on a new 10,400-square-foot grocery concept in Seattle's Capitol Hill neighborhood, though details about the format have not been disclosed.

    We don't know if it will be a larger Amazon Go.

    We don't know if this will be an outpost for the company's new grocery chain concept.

    We don't know if it'll be something else entirely.

    We do know that the windows are covered and that the doors have a "no trespassing" sign.

    The GeekWire story says, however, that there are some clues based on permit filings:

    "The site features several hallmarks of Amazon Go. Drawings show space for the entry and exit kiosks where customers scan a QR code on the Amazon Go app that is used to enter the store and pay for items automatically upon exit.

    "No traditional checkout areas are shown in the drawings. There is a large general sales area with a section for alcohol, as well as an employee break room and storage."

    However, the story points out that there are "a few unique characteristics that make the store stand out and give credence to the possibility that it could be something different from the typical Amazon Go store … The total area of the retail space is about 10,400 square feet, and permit drawings show that the site is split roughly 3-to-1 between shoppable space and back-of-house operations. If that turns out to be the case, the Capitol Hill store could have somewhere in the area of 7,000 square feet of shoppable space, much bigger than the 1,500 and 3,000 square feet of front-of-house area in other Go stores."
    KC's View:
    Here's my question … How many places are there where Amazon is testing out formats that we don't know about?

    I'll bet there are more than a few. And I'll bet that a number of them will never see the light of day, though elements of them will be incorporated into concepts that do roll out.

    Amazon is in the business of creating secret sauces that will give it differential advantages., Like Prime. Subscribe-and-Save. Alexa. Etc…

    The more secret sauces it has in its repertoire, the better able Amazon is to anticipating shopper needs and desires.

    I have another question: What will be the next big thing that Amazon will unveil that none of us will see coming?

    And one more, and maybe even a better question: What is the next big thing that you are planning that your competitors won't see coming, and that will rock your customers' world?

    Published on: November 1, 2019

    Forbes reports that Walgreens is developing more than 30 small-format pharmacies for urban areas that will have a strong self-care and wellness component.

    The story frames the strategy this way: "As Walgreens examines its future real estate needs and sheds costs and corporate jobs to be more competitive in the future, look for smaller stores that the retailer will open 'in the big cities,' company executives disclosed this week. Walgreens plans to escalate cost cutting to more than $1.8 billion annually by fiscal 2022 from the current target of $1.5 billion annually and reconfiguring real estate and space will play a role."

    The move follows similarly heath care-driven efforts by CVS and Walmart, though those new operations appear to be larger than the Walgreens format.
    KC's View:
    I completely agree with the expanded focus on selfcare/healthcare … but I'm a little confused by the apparent belief that this shift in focus is a cost-cutting measure. Hate to say it, but this stuff requires investment, a tolerance for pain, a willingness to fail, and a belief that internal disruption and entrepreneurship are required to compete these days.

    Walmart and CVS don't appear to be thinking small. Far from it. It remains to be seen if Walgreens can measure up.

    Published on: November 1, 2019

    The Wall Street Journal reports that the New York City Council has overwhelmingly passed new legislation banning the sale of foie gras on the grounds that its production is unacceptably cruel to animals. The ban will be phased in over the next three years.

    Here's how the Journal frames the argument:

    "Foie gras, a mainstay at many upscale eateries, is fattened duck or goose liver that is produced by force-feeding the birds to expand their livers several times the normal size before slaughter.

    "Animal activists call the process inhumane. Duck farmers, many of whom are in and around the Hudson Valley, say the birds are treated well and live freely, unlike other poultry sold in supermarkets and shops … The Catskill Foie Gras Collective, comprising the three main producers of foie gras to New York restaurants and retail shops, said the ban restricts dining choices and will eliminate more than 400 jobs and cut millions in revenue. The group said it would challenge the ban in court."
    KC's View:
    I know this sort of identifies me as a gastronomic heathen, but they lose me at "liver."

    And maybe I'm soft-hearted, but the whole idea behind foie gras sort of bothers me. Though I recognize that all animal-based foods are produced by feeding and then killing said animals, and so it all is a matter of where you draw the line.

    By the way … will Daffy and Donald be showing up during the suit to testify in favor of the ban? Just curious.

    Published on: November 1, 2019

    The Financial Times reports that Sidewalk Labs, the Alphabet-owned operation in Toronto that is a sister company to Google, is dramatically scaling back its ambitions after getting grief from local authorities and activists about what was seen as a cavalier attitude toward privacy protections.

    The story notes that "Sidewalk has been drawing up plans to develop the Toronto neighbourhood 'from the internet up,' including self-driving cars, moving sidewalks, and underground delivery robots. Their approach calls for 'ubiquitous sensing' throughout the smart city, collecting data on everything from rubbish disposal to park benches."

    At one point Sidewalk Labs envisioned a 190-acre district on the city's waterfront, which was a dramatic expansion that struck some as a land grab. Now, as part of an agreement with the government-run Waterfront Toronto authority, to scale that back to the original 12-acre space.

    The New York Times story says that "protests from local residents and privacy advocates … characterized the project as a 'Google affiliate' trying to turn cities into 'corporate surveillance states, modeled after Disney-style developments'…"

    FT writes that the new deal - which still has more than a few hoops to jump through before final approvals - "also throws out the central tenet of Sidewalk’s plans to manage data in the new development. The idea of an independent Urban Data Trust to hold information collected in sensor-filled neighbourhoods has been dropped.

    Waterfront Toronto will now lead the effort to set up privacy protections and work with Sidewalk to come up with a new 'Innovation Plan,' based on Sidewalk’s earlier proposals. The city, regional and federal government will also have a say in whether the project goes ahead."
    KC's View:
    MNB originally reported on the Sidewalk Labs project here.

    I get the privacy concerns, and I do think that innovations like these are going to have to be far more mindful of them going forward. But I do believe that there have to be ways to develop the kinds of technological and infrastructural innovations envision for Toronto and avoid becoming a surveillance society.

    I do draw the line at "Disney-style developments," though. I have no desire to live in such a place.

    Published on: November 1, 2019

    Bloomberg reports that Starbucks this week opened a new small store format in Manhattan's Penn Station - a 300 square foot space that has no menu boards, no pastry case, and room only for a small cash register.

    "Customers who order via phone ahead of time can pick up their order when it pops up on a digital board," Bloomberg writes. "Walk-in orders are welcome but the space is designed to accommodate digital orders."

    The story goes on: "The idea is simple for the world’s biggest coffee chain: Keep sales humming while paying less in rent and wages. Starbucks plans to 'over-invest' in labor initially to get the pickup store started -- hire more workers than needed -- but the company sees the new prototype running with a limited crew."

    Similar openings are planned for Boston, Chicago and Los Angeles.

    The opening came as Starbucks announced that its Starbucks Rewards membership in the US reached 17.6 million active members at the end of the fourth quarter up 15 percent from the same period a year ago. This occurred as Starbucks announced six percent US same-store sales growth during the fourth quarter, and five percent same-store sales growth globally.
    KC's View:
    Lot of small store development being reported this morning. Sense a pattern?

    Published on: November 1, 2019

    • Smart & Final announced the launch of a new and improved online shopping experience that it describes as a platform better able to serve both business and household customers.

    According to the announcement, "Smart & Final customers now enjoy easy access to the retailer’s weekly digital flyers and coupons, shoppable recipes and meal planning, customized shopping lists, dietary preferences, payment and delivery options, all within the retailer’s branded web and mobile apps. Additionally, Smart & Final now offers delivery orders via … an integrated white-label, last-mile delivery solution that seamlessly connects Smart & Final household shoppers and business customers to a host of third-party delivery providers."

    The new Smart & Final online offering is powered by Mercatus.

    Full disclosure: Mercatus is a valued MNB sponsor.

    • Amazon announced that it is sponsoring "a range of Amazon Small Business Academy programs to help small businesses harness the power of the internet to reach more customers, build their brand, and grow sales. The initiatives includes in-person seminars, community college courses, and webinars … The Amazon Small Business Academy program also includes a grant to the National Association for Community College Entrepreneurship (NACCE) to help fund curriculum development and instruction of digital business courses in community college classrooms around the country. The classes will cover the fundamentals of online business strategies, marketing, merchandising, inventory management, and more."

    “Small businesses make up 99.9% of U.S. businesses, employ almost 60 million people, and are the backbone of our economy. We’ve heard from many of them that they want help and guidance to take advantage of the power of the internet and digital business, particularly in rural areas,” said Nicholas Denissen, Amazon Vice President of Small Business, in a prepared statement. “Amazon Small Business Academy is focused on accelerating small business’ digital capabilities, whether they are a brand new company or one that has been in business for generations.”
    KC's View:

    Published on: November 1, 2019

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

    Bloomberg reports that "Authentic Brands Group won court approval to become the new owner of bankrupt Barneys New York Inc. with plans to license the brand and close most of the chain’s stores." The bid was judged to be the only viable offer.

    "Authentic’s plan involves hitching the chain to another iconic retailer, with about 40 Barneys shops opening inside Saks Fifth Avenue stores," Bloomberg writes. "The chain may also have some free-standing locations, including one in Boston and a new site in Greenwich, Conn."

    There seems to be little question that the winning bid represents a deconstructionist approach to traditional retail. It could be a means to saving the brand via unconventional means (including a more robust online presence), or it could be just another series of steps in the brand's downhill path to oblivion. We'll see … but my cynicism makes me want to bet on the latter.

    Business Insider reports that "dollar stores are gaining ground against Walmart.

    "A report from marketing platform InMarket found that shoppers from low-income groups are more likely to shop at Family Dollar and Dollar General than at Walmart … Dollar Tree and Dollar General stores have largely defied grim retail trends and have been rapidly expanding across the US. Walmart quietly closed at least 22 stores in the US and Canada this year."

    • The Cincinnati Business Courier reports that "Procter & Gamble Co. is rolling out the Oral-B Genius X, a $220 electric toothbrush that employs artificial intelligence to let users track where they have brushed."

    According to the story, "P&G consumer research indicates that most people miss certain areas of the mouth, use either too much pressure or don’t brush long enough, so a smartphone app provides personalized details for each user and notes areas that require additional brushing. The Cincinnati-based maker of consumer goods such as Crest toothpaste said the Oral-B Genius X uses sensors to monitor brushing pressure, keep track of brushing time, and detect the brush’s location and orientation. Data is sent to the Oral-B app, which leverages the Genius X artificial intelligence algorithm to identify in real-time where users are brushing."

    Got a $25 Quip. Happy with my $25 Quip. Can't imagine why I'd want to spend $220 on a new toothbrush. Sounds to me like P&G is a day late and a lot of dollars too expensive.
    KC's View:

    Published on: November 1, 2019

    …will return.
    KC's View:

    Published on: November 1, 2019

    In Thursday Night Football, the San Francisco 49ers defeated the Arizona Cardinals 28-25, reaching the midpoint of their season without a loss. The 49ers are just one of two undefeated teams in the NFL - the other is the New England Patriots.
    KC's View:

    Published on: November 1, 2019

    Remember ... for most of us in the US, this weekend marks the end of Daylight Savings Time and a return to Standard Time. On Sunday, November 3, at 2 am, it will be time to turn your clocks back an hour. (Assuming, of course, you have clocks that require manual changing.)

    Enjoy the extra sleep.
    KC's View:

    Published on: November 1, 2019

    Emerging technologies in the health and wellness segment are empowering consumers who more and more are invested in self-care … which can best be defined as a cultural trend keyed to people who want to feel good, look good, live longer and live better. In this new Retail Tomorrow podcast, recorded in front of a live audience at the recent GMDC Selfcare Summit, we talk about the technologies and trends that we heard about there, provide insights into how consumers will interact with them, and offer guidance to companies looking to invest in this burgeoning segment.

    Our guests for this podcast are members of the regular Retail Tomorrow podcast family:

    • Tom Furphy, CEO and Managing Director of Consumer Equity Partners.

    • Nancy Giordano, a strategic futurist who specializes in the post-digital world.

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

    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 brought to you by GMDC, the Global Market Development Center.

    Pictured, below, from left: Kevin Coupe, Nancy Giordano, Tom Furphy, Sterling Hawkins

    KC's View:

    Published on: November 1, 2019

    It is an embarrassment of riches.

    In a matter of a few weeks, there are new books from Michael Connelly, Lee Child, and Ace Atkins. Be still my heart. These are the guys who would be included on my personal Mount Rushmore of favorite living novelists (though this particular Rushmore would have more than three heads). What can one say about a month in which I get to read about Harry Bosch, Jack Reacher, and Spenser?

    Pretty much perfect.

    First up is "The Night Fire," Connelly's latest entry in the Harry Bosch series; in this one, he once again teams up with Renee Ballard, who he introduced several books ago in "The Late Show." Bosch and Ballard are at very different stages of their lives and careers. Bosch is in retirement, but continues to work cold cases, unwilling to give up on his longtime belief that "everybody counts or nobody counts"; he believes fervently, with some justification, that the system is less concerned with justice than with speed, deniability and the preservation of power.

    Ballard, on the other hand, is a new detective in the LAPD, demoted to working "the late show" - the midnight shift - after filing a sexual assault complaint against a powerful superior. In her own way, she's as committed to justice as Bosch is, an attitude informed by her own experiences with injustice.

    In "The Night Fire," Bosch has been given a "murder book" that was kept by an old mentor who has just passed away. It details a 20-year old murder case that was never solved, and Bosch - and then Ballard - feel compelled to see if they can bring the murderer to justice. Where it gets really interesting and more complicated is when the case intersects with others, with Bosch and Ballard trying to figure out not just who committed the crime, but why it never was solved and why Bosch's mentor felt responsible. Or maybe culpable.

    "The Night Fire" is exactly what one would expect from a Connelly novel - compelling insights into the Los Angeles political and cultural; landscape, strong characters, sharp plotting, and a resolute moral backbone rooted in reality. Plus, it is a great read. Check it out.

    I'm not sure if this is common, but there were two things about Halloween that sort of surprised me last night.

    1. Only about a dozen kids came trick-or-treating across the entire evening. Sure, the weather wasn't great, but even though there have declining numbers of recent years, this seemed like a precipitous decline.

    2. Nobody came as an Article of Impeachment. Just sayin'.

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

    Back Monday.


    KC's View: