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    Published on: November 6, 2019

    by Kate McMahon

    “That’s all I can stands, ‘cause I can’t stands no more!” – Popeye

    Leave it to the iconic cartoon “sailorman” to succinctly describe the excruciating wait for the much-hyped Popeyes chicken sandwich, “re-released” this week amid a fast-food social media frenzy.

    Popeyes debuted the sandwich on August 12th, and sold out two weeks later. Completely. As in no more chicken filets. This set off the Great Chicken War of 2019 with Chick-Fil-A, which condescendingly clucked on social media about Popeyes’ production woes. The viral sparring and ensuing publicity generated an estimated $65 million in media value for Popeyes, according to marketing estimates.

    Popeyes came back swinging by re-releasing its chicken sandwich on National Sandwich Day – this past Sunday – a day when Chick-Fil-A is closed across the nation, and fans lined up to try it.

    The ever-intrepid Content Guy and I ventured to our local Popeyes just after noon on Monday. The drive-thru line snaked onto and down the Boston Post Road, the parking lot was full and patrons – about 80 percent male – were jammed into the small ordering area.

    When we finally placed our order for one classic and one spicy sandwich at 12:39 p.m., we were told the wait would be 15 minutes. Disgruntled customers, many on a lunch break from work, complained about supposed 10-minute waits turning into 35 minutes and more.

    So, we waited 10 minutes. Then, since we planned to do a taste test versus Chick-fil-A, KC ambled down the Post Road to that franchise, ordered two comparable sandwiches, got them, and strolled back. We waited another five minutes. We finally sat down at a Popeyes table to sample the Chick-Fil-A offerings, finished them, and yes, kept waiting. Forty minutes after placing the order, a beleaguered employee with laryngitis finally called out our lucky number – 47.

    The classic sandwich – toasted brioche bun, a large chunk of chicken breast, mayo and two pickle slices - was piping hot and tasty. The signature spicy sandwich was barely warm, and the chicken filet was smaller and less crispy. Which was mystifying, since they'd been ordered and delivered at the same time, and consistency is supposed to be one of the great advantages of fast food - even when it is delivered very, very slowwwwwwwly.

    The Chick-fil-A sandwiches, on the other hand, were both hot, well-proportioned and consistently delicious. The $4-plus price tags were comparable, and we exited Popeyes like all the other patrons - grumbling.

    Meanwhile, in the online arena, Instagram and Twitter have been buzzing with photos of the Popeyes sandwiches and tales of long lines and alternatingly delighted and disappointed customers. Chick-fil-A has been mum online - it probably figures it is better to just do a better job and serve disgruntled Popeyes customers.

    (Pictures below, from left: Popeyes' sandwich, the Chick-fil-A offerings, the line at Popeyes, and the absence of a line at Chick-fil-A.)

    My take is this: Popeyes squandered an amazing opportunity fueled by luck and social media. Forty-five minutes for a sandwich? Ridiculous. Popeyes had two months to plan for this re-release, and yet the franchise was clearly unable to meet the demand. The employees put on a brave face and were working as fast as they could, but every patron I spoke with said “never coming back.”

    The last time I trekked to this row of fast food joints on the Post Road I was in search of Burger King’s Impossible Whopper, which also debuted to social media fanfare and was unavailable in 99.9% of the country. Since the plant-based burger has been credited with boosting BK’s second quarter same store sales by 6%, KC and I decided give that a try as well. (Gluttons for punishment? Maybe.)

    Other than the higher price tag ($5.99), the Impossible Whopper resembled the regular Whopper: a bland piece of “meat” topped with flavorful ketchup, lettuce, mayo, tomato and chopped white onions. No lines, though. Make of that what you will.

    By the end of our Burger King, Popeyes and Chick-fil-A adventure, one constant remained: heartburn. With a bad taste in our mouths.

    And, to use another Popeye line, "Disgustipated."

    Comments? Send me an email at .

KC's View:

Published on: November 6, 2019

by Kevin Coupe

Yesterday's Eye-Opener mentioned that an Oregon cheese - specifically, Rogue River Blue - won this year's top prize in the World Cheese Awards, which some likened to the time that a California Chardonnay beat out French wines in an international competition (the subject of the film Bottle Shock), which presaged the growth of a great American wine industry.

Today, the Washington Post has a story suggesting that, indeed, American cheese may be about to have its moment.

Quality is part of the reason. But tariffs on foreign cheese may force the issue.

From the Post story: "The Trump administration imposed tariffs on about $7.5 billion in European Union goods. And on Oct. 18, they went into effect, prices skyrocketing on goods such as aircraft products, wine, olive oil and some cheeses.
Cocktail parties, holiday gatherings, gift baskets: November begins the most cheese-intensive part of the year. It is, say many food industry experts, the worst time for an additional 25 percent tariff on products that in many cases are already subject to tariffs. Parmigiano-Reggiano, Romano, Roquefort, manchego, Swiss and cheddar — the lineup of affected cheeses reads like a greatest-hits list, many of these imported cheeses without an obvious or equivalent American corollary."

This, the Post writes, "will narrow the price differential between domestic cheeses and similar imports — American artisan cheeses, usually small and 'boutique,' have tended to carry a higher price point because of a lack of economies of scale — this development could make people give American cheeses a new look."

In other words, it could be an Eye-Opener.
KC's View:

Published on: November 6, 2019

The Cincinnati Business Courier reports that Kroger yesterday unveiled a new slogan, "Fresh for Everyone," and a new ad campaign that will focus on its fresh food offerings.

Kroger describes its campaign theme this way: "As America’s favorite grocery store, we believe that no matter who you are, where you’re from, how you like to shop or what you like to eat, everyone deserves to have affordable, easy-to-enjoy fresh food.” And it says that the nine main criteria used by people to choose where to shop all are fresh-centric, and so its new ad campaign is designed to differentiate itself both through content and style.

Joe Grieshaber, Kroger’s senior vice president of merchandising, at an investor event, said that "in conjunction with our focus on fresh as a sales driver in 2020, we will relaunch our brand this week. We are relaunching with fresh in a big way."

The announcements yesterday came about a week after it was reported that Kroger was planning a major rebranding in response to internal concerns that its brand image had become fragmented, that the company wasn't getting enough credit for its brand equity, and that consumers did not have a strong enough sense of what Kroger represents.

According to the Courier, "The commercial also points out Kroger is launching a test of free pickup in some of its markets. That could be extended more broadly to other stores and markets, depending on the results. (Grieshaber) didn’t say if that service will be tested in Cincinnati, although Kroger frequently tests new ideas in its home city."

Amazon and Walmart both have been lowering and/or eliminating delivery fees as a way of trying to capture traffic and sales.

In its story, the Wall Street Journal focused - not surprisingly - more on the investor side, suggesting that Kroger is making strides in persuading the investment community that its investments in the "Restock Kroger" initiative are paying off.

"The planned investments were seen by investors as a necessary response to the changing grocery landscape, including the rise of e-commerce, competition from low-cost rivals such as Aldi, and Amazon’s acquisition of Whole Foods," the Journal writes. "But worries lingered over the company’s profit margins and capital returns as it spent to keep up with trends … Kroger finally put those concerns to bed at its investor day on Tuesday. The company issued strong guidance for its 2020 fiscal year, which ends in January 2021. It expects same-store sales growth of greater than 2.25% excluding fuel, an acceleration from its fiscal 2019 pace of 2.0% to 2.25%." Investors seemed assuaged, since Kroger stock "surged in response."
KC's View:
It seems to me that slogans and ad campaigns are a good thing, but they only take you so far.

I guess the question I would ask - and that I assume the folks at Kroger are asking - is if the problem is perception, or something deeper? And I'd ask if the changes that Kroger seems to be promising in the new campaign are going to be realized in some sort of fundamental way in the stores (and online).

There were at least a couple of folks in the MNB community who wrote in after the rebranding story to suggest that their shopping experiences at Kroger may suggest deeper issues than can be resolved with a new campaign. (I can't say this personally - I live in one part of the country where Kroger does not have a presence, so my shopping experiences at Kroger are infrequent.) But I would suggest that Kroger needs to be sure that it is able to live up to any new promises it makes … because credibility can be a fragile thing, especially if you've already conceded that your brand equity has become fragmented in the minds of the consumers.

Published on: November 6, 2019

Bloomberg reports that Walgreens Boots Alliance "has been reviewing a potential deal to take the company private in what could become the largest leveraged buyout in history … The company has recently held informal talks with private equity firms including KKR & Co."

The advantages, according to : "A buyout would give Walgreens Boots time to adapt to a fast-changing retail landscape, free from the quarter-by-quarter demands of public shareholders.

"The company is under immense pressure from online competitors including Inc., which have chipped away at front-of-the-store sales of household and beauty items. While top rival CVS Health Corp. has grown into a vertically integrated health-care giant, Walgreens Boots has doubled down on retail, announcing pilot partnerships with retailers including grocer Kroger Co.

"It has also announced an ambitious $1.8 billion in annual cost cuts and plans to shutter its in-store health clinics."

The story notes that a private equity deal likely is being championed by CEO Stefano Pessina, who also is Walgreens Boots’s largest shareholder with a stake of about 16 percent. It would not be his first such deal: He "previously ran Alliance Boots, which he had acquired with KKR in 2007. The transaction came at the height of the buyout boom and underscored the challenges of financing jumbo take-privates, as banks struggled at the time to find buyers for the loans to pay for that deal."

Bloomberg writes that "Walgreens Boots is the largest retail pharmacy in the U.S. and Europe, with more than 18,750 stores in 11 countries," and "a market value of about $55 billion and $16.8 billion of debt."
KC's View:
Aside from its relationship with Kroger - an initiative that I really like - there is very little about Walgreens is doing that I find to be progressive and ambitious, especially when compared with CVS. When I read about this possibility, I have to wonder if it will add so much debt to its balance sheet that it will have to cut rather than invest, which will make it harder to compete in an environment where healthcare and selfcare are undergoing radical changes.

Published on: November 6, 2019

From CNBC:

"Less shopping is happening on Amazon, and consumers are favoring Walmart, according to a new survey.

"The frequency of people buying items on Amazon six times or more per month has dropped to 40% this year from 80% in 2017, according to surveys by First Insight, a retail analytics firm that collects data to help retailers such as Dick’s Sporting Goods, Crocs and Kohl’s make product decisions … A majority this year, 55%, said they prefer to shop at Walmart versus Amazon, up from about 47% a year earlier. The percentage of people who favor Amazon has dropped to 45% from about 53% in 2018."

The story goes on: "Amazon has disclosed it has more than 100 million Prime members worldwide. But according to First Insight, signups are dropping. The firm said it found 52% of survey respondents were members in 2019, down from 59% a year earlier.

"The survey’s findings could be a sign that Walmart’s e-commerce investments are paying off, and Amazon still has its work cut out for it."

"The excitement of the Amazon box coming to your house is kind of dwindling off," says First Insight CEO Greg Petro. "I think the novelty of Amazon is wearing off."
KC's View:
Well, I think that Petro has that right … the novelty of an Amazon box showing up has work off, because Amazon has become so much a part of our lives.

This is a snapshot, it seems to me, not a big picture. I know Walmart is getting better, and it seems entirely possible that Amazon's growth has slacked off a bit. But to argue that Walmart is winning the e-commerce battle isn't even fair, because they are fighting two entirely different wars.

Walmart is a retailer. Amazon wants to be part of our lives in fundamentally different ways. Some will prefer the former, and others will want a relationship with a company that does the latter. But they are different companies, with different visions.

Published on: November 6, 2019

Wakefern's ShopRite this week announced two new store brands, saying that its "launch of Bowl & Basket and Paperbird food and household lines kicks off a transformation of the supermarket’s own brands with newly designed and carefully crafted products, starting with approximately 100 items in November, expanding to 300 by year’s end, and more than 3,500 newly branded products by the end of 2021."

Bowl & Basket foods pair what the company calls "thoughtfully selected ingredients at a budget friendly price," while Paperbird "offers a new line of effective and beautifully designed household products that look as good as they clean."

“The launch of Bowl & Basket and Paperbird is the catalyst for an ambitious redesign of ShopRite store brands,” said Chris Lane, executive vice president of Wakefern Food Corp. “We are ready to deliver this next generation of innovative, high-quality and exciting own brand products at ShopRite.”
KC's View:
Private label = differentiated offerings. No argument here … this is exactly what retailers have to do to succeed.

Published on: November 6, 2019

Engadget reports that CVS and United Parcel Service (UPS) have "completed their first paid home deliveries of prescriptions, hauling medicine to two homes (one of which was a retirement community) in Cary, North Carolina … The drones flew autonomously and lowered the packages to the ground with a cable and winch, although there was a human operator ready to take control."

The story goes on: "It's not exactly a booming business with just two deliveries. However, it's still a significant milestone. The deliveries point to a future where you don't have to travel to the pharmacy, or else wait for a courier truck to make its usual rounds -- you could get the medicine you need within minutes of your supply running out. It also bodes well for mainstream adoption of drone delivery, even if it's likely to be a long while before you can assume your prescription pills will descend from the skies."
KC's View:
No question that this is a limited test, but it does tell us something about what the future may look like.

I am disappointed by the cable-and-winch component, though. I'm totally into the idea that was floated by Amazon, which would attached little parachutes to packages and would allow them to be floated gently to earth, landing on little targets put outside by customers.

Published on: November 6, 2019

The Washington Post reports that Wall Street executives are feeling a little less anxious about the state of the economy these days.

"Top U.S. and Chinese officials are talking about a trade war truce," the Post writes. "Many economic indicators, especially jobs and consumer spending, still look solid, if not strong. The stock market is back at record highs, and many corporate earnings are coming in better than expected. Even the bond market, which was flashing red at the end of the summer when the yield curve inverted, now looks a milder yellow.

"As recently as August, some models predicted a fifty-fifty chance of a U.S. recession in the next year. Now many top Wall Street firms are telling clients the risk of a recession in the next year is modest. Goldman Sachs puts the risk level at 24 percent. Barclays says less than 10 percent. Morgan Stanley says 'around 20' percent."

The story goes on: "While few outside the White House are predicting an economic surge heading into 2020, there is widespread relief that the economy is cooling but most indicators have stabilized this fall. And the pullback in business investment does not appear to be spilling over to consumers."
KC's View:
Recession is inevitable. It is all a matter of when, not if. And, I suspect, there are a ton of factors, some of which we can't anticipate, that will influence the timing.

Published on: November 6, 2019

Bloomberg has an excellent piece about how wearable tracking devices are being used in the workplace, and the tensions they are creating.

They can, the story suggests, "supplement existing safety programs by identifying employees who need extra coaching, while also helping single out locations in its operations that should be redesigned to reduce the chances of injury."

But … "Unions and researchers who study workplace surveillance worry that employers who begin gathering data on workers for whatever reason will be unable to resist using it against them. Productivity tracking is already widespread throughout the industry - and workers can be fired or punished if their performance dips. The opacity of data-analysis tools can make it difficult for workers to fully understand how much employers can see."

Good piece, and you can read it here.
KC's View:

Published on: November 6, 2019

CNBC reports that "Tesla has settled with Walmart after its solar rooftop installations caught fire atop seven of the retail giant’s stores.

"Walmart sued Tesla for breach of contract in August in a New York state court, accusing Tesla of negligence and faulty installation, and asking the company to shoulder the costs of removing their solar panels from more than 240 Walmart stores to avoid further fires."

While there may be a settlement, details were not disclosed in the announcement, which mostly focused on the notion that safety is a high priority for both companies.
KC's View:

Published on: November 6, 2019

• It isn't just his McDonald's CEO job that Steve Easterbrook lost this week after it was revealed that he'd had an inappropriate and consensual relationship with a company employee.

Easterbrook also had to resign his position on the Walmart board of directors.

Tears not necessary, though. CNBC reports that Easterbrook is expected to make millions in severance and bonus payments this year, despite the circumstances of his firing; for two years, however, he will not be allowed to work for competitors, including a long list of fast food chains and convenience stores.

KC's View:

Published on: November 6, 2019

…will return.
KC's View:

Published on: November 6, 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: