business news in context, analysis with attitude

Published on: December 16, 2019

by Kevin Coupe

The Seattle Times has a story with an elegiac quality about it … about the imminent demise of First & Pike News, a newsstand that has been operating in Seattle's Pike Place Market since 1979.

"Owner Lee Lauckhart has decided to close the landmark newsstand on Dec. 31," the story says. "The stand was built of words, but the numbers just don’t add up, he says. Declining newspaper and magazine readership means declining sales. It’s that simple … Lauckhart used to carry 180 different newspapers, but has let that number drop to 55. He once carried 2,000 magazines, but has cut that by about 300 … He’s had just 33 employees over the decades; now he’s down to three."

The Times writes that "for the past 13 years, Lauckhart has not collected a salary. He has been living on his Social Security while still paying his employees $15 an hour long before it became law. He also provides health benefits, even if the employee only worked one shift a week."

First & Pike News, the story notes, is very much old school: "There is no cash register. Clerks keep cash in their aprons ('Old school,' Lauckhart said, wagging the front of his apron) so they can wander around. In the tiny kiosk that serves as a counter, there is a credit-card reader, rubber bands and scissors."

I used to swing by First & Pike News when in Seattle. It was just steps away from the fish market, and maybe a quarter mile north walk to Etta's, my "local" when I'm in the city. The newsstand was a reminder of similar stores in Harvard Square and New York City that I used to visit when I was younger, placed that were bursting at the seams with newspapers and periodicals that would, if you read any of them, tell stories about people and places hitherto unknown or unfamiliar. They were places of connection, and when I was young, I spent way too much of my money on magazines and out of town papers that would take me beyond myself.

But that's old school, too. The world comes to us now via gadgets and screens, and we don't need to peruse the offerings of such newsstands. It doesn't mean we don't read, just that we read differently. Though maybe not for the better.

Lauckhart's daughter Aana tells the Seattle Times that "her father has been keeping the newsstand alive — and taking the financial hit — as a matter of principle. 'It’s because of his deep belief in the free press,' she said, 'and how democratizing a newsstand can be'."

Democratizing, I suspect, in the sense that newsstands would encourage the seeking out of a variety of opinions and positions, as opposed to finding refuge in the people and institutions with which we already agree.

I'm not really surprised by the demise of First & Pike News after 40 years, though I can't call up any outrage about its closing. This is the world as it is, not how we'd like it to be.

But I'm still sad, and wanted to Open your Eyes to it. In the words of Arthur Miller, "Attention must be paid."

Published on: December 16, 2019

The Wall Street Journal this morning reports that in Oklahoma City, the City Council is considering legislation that would mandate "new retailers in the area to designate at least 500 square feet of space to fresh food. The measure is expected to pass."

The move is a response to the fact that "in the nine square miles that cover the 73111 ZIP Code in northeast Oklahoma City, there isn’t a single grocery store. The last one closed over the summer. There are, however, four dollar stores in the area, where 32% of the 11,000 residents live below the poverty level—roughly three times the national average."

Similar legislation has been passed in places that include Wyandotte County, a part of Kansas City, Kansas, and Tulsa, Oklahoma.

This is just one of the tactics being used to improve the fresh food offerings available to people living in disadvantaged zip codes. Of which there are many. "The USDA estimates that 39 million people, or 12.8% of Americans, live in food deserts," the story says. "Residents of these neighborhoods often must travel significant distances to reach stores with fresh food. Compounding the problem, many don’t have reliable means of transportation."

The Journal notes that Dollar General, which has 16,000 stores, expects to have 650 of them selling fresh produce within the next few months.

Published on: December 16, 2019

The New York Times this morning reports that new tariffs that may be imposed by the Trump administration on products from the European Union could be "as high as 100 percent on Scotch and Irish whiskey, Belgian waffles and wines from across Europe." Other products that could be affected would include a variety of cheeses and both olives and olive oil.

The tariffs, according to the story, are retaliation for financial support that EU countries have provided for aerospace giant Airbus for more than a decade. The World Trade Organization (WTO) ruled in favor of the US position earlier this year and authorized the imposition of new tariffs.

The Times writes that "the Trump administration has increasingly seized on tariffs to punish Europe. In addition to considering tariffs on German cars, the United States is mulling separate tariffs on French wine and other products as retaliation for a new tax that the administration says unfairly targets American technology companies.

"This year, France passed a so-called digital service tax, which hits large companies that sell and advertise to French consumers but have not faced large tax liabilities in France."

Published on: December 16, 2019

The New York Times has a fascinating piece detailing how Amazon may be using its size and ubiquity to unfair advantage over smaller rivals.

From the story:

"Not since the mid-1990s, when Microsoft dominated the personal computer industry with Windows, has a technology platform instilled such fear in competitors as Amazon is now doing with its cloud computing arm … While cloud computing may appear obscure and wonky, it underlies much of the internet. It has grown into one of the technology industry’s largest and most lucrative businesses, offering computing power and software to companies. And Amazon is its single-biggest provider.

"Amazon has used its cloud computing arm — called Amazon Web Services, or A.W.S. for short — to copy and integrate software that other tech companies pioneered. It has given an edge to its own services by making them more convenient to use, burying rival offerings and bundling discounts to make its products less expensive … Some of the companies have a phrase for what Amazon is doing: strip-mining software. By lifting other people’s innovations, trying to poach their engineers and profiting off what they made, Amazon is choking off the growth of would-be competitors and forcing them to reorient how they do business, the companies said.

"All of this has fueled scrutiny of whether Amazon is abusing its market dominance and engaging in anticompetitive behavior."

You can read the entire story here.

Published on: December 16, 2019

The Financial Times writes that "US department stores and clothing retailers, trying to weather the continued onslaught of online shopping, are resorting to some of the biggest discounts since the 2008 crisis to woo consumers, heightening concerns of a squeeze in profit margins." The story quotes industry data saying that "special offers have lasted long beyond the traditional Black Friday promotional period and are also steeper than in previous years."

While some retailers, such as Walmart and Target, have been saying that they feel good about 2019 holiday sales, the problem is that while revenue may increase, margins and profits may tighten to the point that some retailers may find their businesses to be economically unsupportable.

The situation is not helped by the continued growth of online shopping, which puts even greater pressure on retailers to engage in price promotion activity.

Published on: December 16, 2019

NBC News has a story about how a new study "on the long-term health effects of electronic cigarettes finds that the devices are linked to an increased risk of chronic lung diseases … investigators found people who used e-cigarettes were 30 percent more likely to have developed a chronic lung disease, including asthma, bronchitis and emphysema, than nonusers."

While the study found that people who smoked traditional tobacco products "had a higher risk of developing chronic lung diseases than those who used only e-cigarettes," it also found that "many adult smokers who tried e-cigarettes ended up using both forms of tobacco."

Some context from NBC News: "The research adds to a growing body of evidence that vaping can cause physical harm, whether it's chemical burns to lung tissue, toxic metals that leave lasting scars on lungs, vitamin E oil that clogs lungs or even overheated batteries that explode.

"The illnesses described in the new research are different from the recent spike in vaping-related illnesses, called EVALI, or e-cigarette or vaping associated lung injury. Last week, the Centers for Disease Control and Prevention reported 2,409 cases across all 50 states, plus Washington, D.C., Puerto Rico and the U.S. Virgin Islands. Despite months of investigation, no single cause has been identified to explain all of those cases … The vast majority of cases have involved vaping marijuana's psychoactive ingredient, THC. And in many cases, counterfeit vapes were used."

Published on: December 16, 2019

• The San Antonio Business Journal reports that "local grocery retailer H-E-B has been working with Apple Inc. and Salesforce on enterprise mobile applications that streamline processes for its employees, an example that was recently highlighted by Apple CEO Tim Cook during Salesforce's annual Dreamforce conference."

"We're really proud to be working with H-E-B. Grocery is changing in a major way, and they're really leading the charge," Cook said during the conference.

“H-E-B’s partnership with Apple and Salesforce enables us to quickly innovate, and this gives our partners an exceptional mobile experience with the enterprise reliability and scalability we've come to expect from these two companies,” Mike Georgoff, chief product officer of H-E-B Digital, told the Business Journal in an email. Through this partnership, H-E-B has developed mobile solutions to enable their employees to more easily access schedules, track work orders, monitor products and provide feedback to ensure quality and safety, Georgoff said."

The story adds: "This partnership is an example of recent technological moves the company has made. In June, it opened its technology hub in East Austin, and it subsequently announced plans to build a 150,000-square-foot, five-story tech center at its headquarters in August. In July, it also announced a pilot program to test self-driving vehicle delivery locally."

Published on: December 16, 2019

• Costco reports that in its Q1 sales were up 5.6 percent to $36.24 billion, on total same store sales that increased 4.3 percent; US same store sales were up 4.7 percent.

Net income for the quarter was $844 million, up from $767 million during the same period a year ago.

E-commerce sales for the fiscal first quarter were up 5.5 percent.


• The Washington Post reports on "a new review published in the American Journal of Lifestyle Medicine suggesting that one of the reasons that conventional wisdom has changed about how healthy eggs are - shifting away from concerns about cholesterol - "could be the result of faulty industry-funded research."

One of the reasons this could be important: "The U.S. government is poised to withdraw longstanding warnings about cholesterol Several meta-analyses have concluded that egg consumption does raise cholesterol levels. According to a 2019 meta-analysis, eating an egg each day raises LDL cholesterol by about nine points. The study, published in the American Journal of Clinical Nutrition, combined the findings of 55 prior studies, finding that every 100 milligrams of added dietary cholesterol (approximately half an egg) raised LDL cholesterol levels by about 4.5 milligrams per deciliter of blood."

Organizations that have done the new, less-worrying research maintain that where they get research dollars has no impact on what the research concludes.

Published on: December 16, 2019

…will return.

Published on: December 16, 2019

In Week Fifteen of National Football League action…

Chicago 13
Green Bay 21

New England 34
Cincinnati 13

Seattle 30
Carolina 24

Houston 24
Tennessee 21

Miami 20
NY Giants 36

Philadelphia 37
Washington 27

Denver 3
Kansas City 23

Tampa Bay 38
Detroit 17

Cleveland 24
Arizona 38

Jacksonville 20
Oakland 16

Minnesota 39
LA Chargers 10

LA Rams 21
Dallas 44

Atlanta 29
San Francisco 22

Buffalo 17
Pittsburgh 10

Published on: December 16, 2019

Past Retail Tomorrow podcasts have focused on how technology can have an impact on business models and people's lives. In this edition, however, we drill down to talk about how technology affected one life … and, in fact, makes living a best life possible.

Our guest: Heidi Dohse, senior program manager in Google's Cloud - Health and Life Sciences division. Dohse's personal and professional story makes for a compelling narrative that is at once provocative and inspiring.

Hosted by 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.