business news in context, analysis with attitude

Published on: March 4, 2020

by Kevin Coupe

Eater has a story about how, "according to research conducted by Unilever Food Solutions, the global supplier to the food and beverage industry that has taken an active interest in mental health in the industry, 74 percent of chefs are sleep deprived to the point of exhaustion, 63 percent of chefs feel depressed, and more than half feel pushed to the breaking point."

In fact, "a 2015 study by the Substance Abuse and Mental Health Service Administration (MHA) ranks the restaurant industry highest among 19 industries for illicit drug use and third highest for heavy alcohol consumption."  And the MHA believes that things aren't any better today.

Which is why, the story says, there are numerous organizations that have "sprung up over the past three years in an attempt to save a workforce that is collectively hanging by a thread."  Among them:  "Ben’s Friends, a support group for restaurant industry professionals who struggle with substance abuse, in 2016 to break that stigma. Today, there are chapters in 12 cities; the newest chapters in Louisville, Kentucky; Kansas City; and Washington, D.C. each had over 30 people show up to their first meetings … Restaurant owners and managers are seeking out seminars, trainings, and consultants to help their workers feel safe and stable at work.

"In addition to Ben’s Friends, chef Patrick Mulvaney’s I Got Your Back program out of Sacramento, California, offers employees peer-to-peer counseling; some restaurant groups are experimenting with capped working hours, wellness initiatives, and a more open kitchen culture where talking about mental health is the norm. Although restaurants’ individual policies differ, all of them align on one crucial step: It’s essential to make the effort to talk with every single employee on a regular basis to check in and see how they’re doing. In the restaurant industry, this basic human gesture is a radical act."

The restaurant business is known for being an incredibly tough place to work, with enormously high rates of addiction.  (Also sexual harassment … I wonder when they will come up with programs do deal with that.)  It is heartening to see that there are efforts being made to address the problems that high-pressure can create.

In Portland, Oregon, the story notes, restaurant group and charcuterie maker Olympia Provisions has started a program that encourages employees to skip that after-work drink and instead earn a token for doing things like "yoga, rock climbing, spin classes, and other physical activities that provide an outlet from work. Employees can even trade in 20 tokens for a spa treatment."

Eater goes on:  "Today, over half of Olympia Provisions’ staff participates in the program, opting to not have a shift drink once or twice a week in exchange for a token. This means that each month, employees are redeeming gift certificates for a range of activities.

"Ultimately, it comes down to caring for your staff in the way you would treat your family or friends."

Which is a good and Eye-Opening mantra for any business.

Published on: March 4, 2020

TechCrunch  reports that Amazon is ramping up its delivery speed to the point where in some cases and in some places, Prime members will be able to order as late as midnight and find packages waiting on their doorsteps the next morning.

The key to the strategy, TechCrunch writes, is "mini-fulfillment centers closer to where customers live in select U.S. markets, including Philadelphia, Phoenix, Orlando, and Dallas. The new facilities allow Amazon to reduce same-day delivery times down to just a few hours for Prime members in those areas.  The mini-fulfillment centers are around 100,000 square feet, or about a tenth of the size of a traditional fulfillment center, Amazon says."

According to the story, Amazon says that "having facilities closer to customers will help it to reduce its carbon footprint as drivers won’t have to travel as far in order to make their deliveries. The company claims it will help reduce aircraft transport as well, and provide more delivery jobs - including via its crowd-sourced Amazon Flex program."

TechCrunch goes on to say that "while Amazon declined to comment on specific future plans for more mini-fulfillment centers, the company confirmed that it’s exploring new ways to get Prime members their same-day orders faster in more cities across the US."

Published on: March 4, 2020

WCMH-TV News reports that Kroger is closing down its Fresh Eats MKT convenience concept stores in Ohio.

A spokesperson for the company said, "As part of a portfolio review, we have made the decision to discontinue the Fresh Eats MKT concept. From the pilot, we have learned many things about how to provide quality, fresh and new foods to our customers. We will incorporate these learnings in other parts of our business."

The Fresh Eats concept was a small-scale test that Jeff Parker, president of Kroger’s convenience store division, had called "a fresh, new way to shop … offering fresh products, friendly service and convenient shopping in a way we’ve never done before."

Published on: March 4, 2020

CNBC reports that "Amazon, Walmart, eBay and Etsy are among the online platforms that have been hit with price gouging or misleading medical products. All of the companies say this activity isn’t allowed on their platforms and that they’ve removed listings or suspended sellers that violate their policies. But CNBC was able to find examples of products that appeared to flout these rules, illustrating that the problem still persists."

According to the story, "The US Food and Drug Administration said it was monitoring the market for any products that make fraudulent coronavirus prevention and treatment claims. The agency said it would issue 'warning letters, seizures or injunctions against products on the market that are not in compliance with the law'."

From the CNBC story:  "Price gouging isn’t a new phenomenon on the web, but it’s likely to continue as the coronavirus spreads. Amazon faced complaints of price gouging during Hurricane Irma in 2017, when customers complained of sharply inflated prices for essentials like bottled water. 

"In some cases, sellers who inflate prices may not just be violating a site’s policies. Many U.S. states have laws in place to prevent price gouging. Sellers who fail to follow the law can face fines of tens of thousands of dollars in some states."

Published on: March 4, 2020

Bloomberg reports that Unilever is saying that it has achieved gender balance in its management ranks - half of its 14,000 managers around the world are female.

This includes, the story says, "50% of the finance department, an area where women have historically been underrepresented. About half of Unilever’s board is also female."

“Women constitute the majority of our consumers and we owe a lot of our success to them,” says Leena Nair, Unilever’s head of human resources.

Published on: March 4, 2020

CNBC reports that "Target is adding fresh food staples and alcohol to same-day services at hundreds of its stores this year. That means along with paper towels and bags of chips, customers can pick up a gallon of milk, a bunch of bananas or a six-pack without getting out of the car.

"The Minneapolis-based retailer also plans to test convenience store-sized brick-and-mortar locations in some markets … It will start testing fresh food pickup and drive up in the Twin Cities in late March and then add it to Texas and Florida stores. The company said it will expand the fresh food service to nearly half of its stores by the holiday season."

The story notes that "Same-day services have played a significant role in the retailer’s growth … Target’s same-day services grew more than 90% and accounted for nearly three-quarters of the company’s comparable digital sales growth in 2019. Its same-day drive up service had sales growth of more than 500% and its order pickup service had sales growth of about 50% in 2019."

Published on: March 4, 2020

The Washington Business Journal reports that Amazon is considering the extension of its telemedicine/virtual clinic concept, Amazon Care, to the employees working at its new HQ2 facility in Crystal City, Virginia.

The story notes that Amazon "launched its virtual clinic, Amazon Care, which lets employees schedule doctor appointments and send texts or video conference with a health care provider via a mobile app.  For now, this program has only extended to the thousands of employees living in and around its Seattle offices."

But Brian Huseman, Amazon’s vice president of policy, says that the company would “love to expand it into Virginia."

The Journal notes that Amazon "was watching with great interest the telehealth bill in the Virginia legislature, which passed with overwhelming support from both chambers Monday and awaits the governor's signature.

"The bill requires Virginia's Board of Health to encourage telemedicine services by establishing a framework for them at state-funded hospitals, primary care facilities, postsecondary schools and at emergency medical services agencies. It also requires that state-funded plans cover the costs of a wider range of telehealth services, including remote monitoring of chronic conditions. The bill also directs that data be collected as part of the telehealth program."

Published on: March 4, 2020

•  Mobile Marketer reports on a Kantar research study saying that 44 percent of members of Generation Z have "made a purchase decision based on a recommendation from a social influencer, compared with 26% of the general population."  In addition, "Seventy percent of Gen Zers follow at least one influencer on platforms like YouTube or Instagram … with 87% of the demographic group saying they follow at least one influencer whose race or ethnicity is different from their own … Gen Zers rely a wide range of social media apps, with 39% having four or more social media accounts, compared with 15% of the general population who use that many social platforms."

The story suggests that "the popularity of social media among Gen Z consumers and their willingness to listen to the opinions of influencers indicate that mobile marketers should develop an influencer marketing strategy to reach the demographic group. Influencer marketing is especially important in connecting with Gen Zers, who tend to be more difficult to reach through traditional media channels like TV and print. The ability to connect with younger consumers is driving greater spending on influencer marketing, which is forecast to reach $15 billion by 2022 from $8 billion last year, Business Insider Intelligence estimates based on Mediakix data."

Published on: March 4, 2020

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

•  The Buffalo News reports that "Tops Markets is closing its Orchard Fresh store in Orchard Park, ending the supermarket chain's seven-year experiment to push into the higher-end grocery market and cash in on the growing popularity of organic food … The idea was to come up with a store concept that would appeal to the same type of shoppers who were flocking to Whole Foods in other markets and buying natural and organic foods at Tops and its local competitors, including Wegmans.

"But the concept never caught on as Tops executives had hoped. Tops itself has made a big push to add many more organic and natural products at its own supermarkets. Other supermarkets did the same, making organic products more readily available at neighborhood stores."

I'll say it again … Breathe in, breathe out, move on…

•  The USC Marshall Food Industry Management certificate program announced that it will honor Oscar Gonzalez, co-president of Northgate Gonzalez Markets in Los Angeles as the 2020 Executive of the Year.

The announcement notes that Northgate Gonzalez Markets is "a family-owned supermarket chain that delivers authentic and fresh products to the Hispanic community in Southern California – and anyone else who loves Mexican food. Northgate has grown from its one store humble beginnings in 1980 to forty-one stores and over 6,000 associates in 2019. The chain has opened four new Mercado stores – with an emphasis on fresh, prepared foods, and the excitement of an open air market. The company has also been successful in the creation of related businesses – in real estate development and property management, financial services, and urgent care centers."

Everything you need to know about Northgate Gonzalez Markets can be summed up in the woman who rolls out a to-order guacamole cart in the morning, and almost always is greeted by a line of people who know that it doesn't get any better than that.  (Plus, they make one of the best breakfast burritos I've ever eaten.)  That's how you succeed as a bricks-and-mortar retailer - you offer something not offered by competitors (whether they be physical or digital), and you  do it with quality, quality, quality.  

Published on: March 4, 2020

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

•  The Fresh Market announced that it has hired Jason Potter, most recently the executive vice president of operations at Sobey's in Canada, to be its new CEO, succeeding Larry Appel, who has resigned from the company.

No reason was given for Appel's resignation;  he's been with the company since 2017, when he replaced Rick Anicetti as CEO.

Fresh Market has been frank about the fact that it is in need of a turnaround.  The question is whether Potter's main job is to get the company to the point where it can be sold by the current private equity ownership to someone else.  I'd guess the answer to that is 'yes.'

•  CNN reports that Jason Droege, the Uber exec who launched Uber Eats in December 2015 "and helped grow it into the company's second-largest revenue source behind its core ride-hailing business," is stepping down.

He will be succeeded by Pierre-Dimitri Gore-Coty, who was previously vice president of Uber's ride-hailing business outside North America.

•  The Wall Street Journal reports that Helena Foulkes, who left CVS Health in 2018 to become CEO of Hudson's Bay Co. in Canada, where she sold off peripheral businesses and positioned the company to go private in a $1.5 billion (US) deal, is leaving the company.

Richard Baker, Hudson’s Bay executive chairman, will become CEO.

The Journal says that Hudson's Bay "privatization transaction had closed," which management believes will give it the room to reinvent itself and better establish its e-commerce business without worrying ab out investors and quarterly reports.

•  Bed Bath & Beyond announced that it has hired Joe Hartsig, Walgreens’ chief merchandising officer, to be its own chief merchant.  Hartsig also will serve as president of the company's Harmon Stores division.

Published on: March 4, 2020

Got the following email from an MNB reader:

Thanks for the article on Joe Coulombe, Trader Joe’s founder. Several key people contributed to Trader Joe’s enormous success. Joe was the consummate visionary and a true renaissance man. The second CEO, John Shields, (Joe’s fraternity brother at Stanford), saw the enormous  potential of the company beginning with the expansion of TJ’s to Northern California in 1988. Doug Rauch introduced the first private label item, became the President of TJ’s and developed the business plan for TJ’s East expansion starting in 1996. Dan Bane became the CEO in 2001 and has overseen major expansion of the company into a national chain with over 500 stores in 42 states and the District of Columbia.  Lastly, thousands of dedicated Crew Members/Captains, a talented group of buyers, creative suppliers and sales agents contributed mightily to making Trader Joe’s one of the most highly respected food retailers in the world.

Regarding the coronavirus, MNB reader Mike Moon wrote:

Help me understand the hype of covid-19. The flu infected 45 million people in the US last year, and killed 61,000 (according to the CDC). The death rate of flu is far less, but the chance of infection looks far greater. And, a flu shot vaccine is available, that millions, obviously, don't think is necessary to get. Why aren't we jumping off the rooftops about the chance of getting the flu? Seems like the media gets a lot of the blame for the hype of covid-19. Or maybe I'm missing something.

From another reader:

This is another example where the media over play, over hype everything.  It’s true in politics, Hollywood and now the Coronavirus.   I read a piece this morning by Steve Glenn, a travel writer who said: 

For the last month, we have seen the world stampede in response to the Coronavirus outbreak in China. Wall street crashed over 10% down last week, airlines cut routes, businesses put international travel on hold, and basically the press started a tornado of worst-case scenarios that would and have frightened many people around the world. Last week I was interviewed by the Wall Street Journal and I said that it is right that we are cautious but wrong for us to become paralyzed. Now we must stop the panic and look logically at what is happening with the virus. How big is it, how bad is it, can it affect me and how can I protect myself, family and friends from it. You are 6 times more likely to die from Influenza and Pneumonia than Coronavirus in the last 6 weeks!

Relax, be smart about your personal hygiene and be cautious, not stupid!

And another:

We're already feeling the impact. We get UNFI deliveries 5 days a week. Today, for the first time ever, we didn't get a truck but a phone call from UNFI customer service.

The reason they cited was "overcapacity" at the warehouse. Amid many apologies, they said there were too many items in the warehouse to be able to pick for our delivery. Really?!

What I wonder … is how much Whole Foods/Amazon is dominating the supply chain at this time of panic buying, and what that will mean for out of stocks as the 800 lb gorilla is always first in line.

Shoppers are clearing our canned beans (we have no more black beans on the shelf) and frozen meat and vegetables are being wiped out. Our yr to yr comp on meat yesterday was nearly 100% over last year. What is even more alarming is that I don't know of a single coronavirus case in a 100-mile radius of our store. Imagine when the pandemic spreads to our backyard.

And still another email, from MNB reader Rick Rector:

Just cancelled a trip to Vegas for a trade show, my last before retirement. I’m not concerned about getting ill. Even though I’m “elderly” (how I hate that term), I’m pretty healthy. Rather, I didn’t want to risk that someone at the Mandalay Bay is found to have it and I have to spend two extra weeks in Vegas in quarantine. I have a business to run and can’t really do it remotely for an extended period of time.

I get that there is some pushback from  some quarters about this new coronavirus, but I am willing to accept the statements of people like Dr. Anthony Fauci, one of the most respected immunologists in the world who we are lucky enough to have running the National Institute of Allergy and Infectious Diseases.  Politico quoted him yesterday as saying that "I don't think that we are going to get out of this completely unscathed … I think that this is going to be one of those things we look back on and say boy, that was bad."

I have to be honest here.  Why wouldn't you believe Dr. Fauci?

You're right - influenza kills more people each year than the new coronavirus has to this point, but it has to be somewhat alarming that the mortality rate on this one seems to be significantly higher than the flu's.  And there are so many unknowns.

Here's what Bloomberg writes this morning:

"There is always concern when a new human pathogen emerges because people typically lack immunity to it and there usually aren’t specific treatments or vaccines available. Novel coronaviruses -- those unseen in humans before -- represent a particular concern because they have been known to spark complicated outbreaks that have sickened thousands of people, as SARS did as it swept across the globe from southern China."

People a lot smarter than me about all things scientific seem to feel that attention must be paid to this new virus … and I'm willing to accept what they say as credible.

One other thing.  The media didn't invent this thing.  The media is reporting what the scientists are saying - that there are more than 93,000 confirmed cases worldwide, more than 3,000 deaths, and that infections seem to be accelerating in the US and elsewhere.   If the media didn't report this stuff, it would be malpractice.

Published on: March 4, 2020

Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

•  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

•  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

•  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

•  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

You can listen to the podcast here.

This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.