business news in context, analysis with attitude

Published on: June 2, 2020

This weekly series of Retail Tomorrow podcasts features Sterling Hawkins, co-CEO and co-founder of CART-The Center for Advancing Retail & Technology, and MNB "Content Guy" Kevin Coupe teaming up to speculate, prognosticate, and formulate visions of what tomorrow's retail landscape will look like post-coronavirus.

This week, Sterling and Kevin are joined by Chris Walton, CEO and Founder of Omni Talk, one of the fastest growing blogs in retail, and Third Haus, a retail technology lab and joint venture with Xenia Retail, to talk about opportunities both embraced and squandered during the pandemic.  Chris refers to the moment as a "retail reckoning" rather than as a "retail apocalypse," and talks about both small and large companies' approach to a changed marketplace.  Plus, Chris, Sterling and Kevin are examples of past prognostications that they got right - and admit to a few that haven't worked out the way they expected.

You can listen to the podcast here, or on iTunes and Google Play.

Published on: June 2, 2020

by Michael Sansolo

Despite all the complexity in the world, we Sansolos had great cause for celebration this past week. My mom turned 90 and  in keeping with the times we all gathered on Zoom to wish her a happy birthday from five states and two countries. By all, I mean all of her children, grandchildren, great-grandchildren and two family dogs.

I want you to think about my mom for a second (and no, gifts aren’t required).  She was born in 1930, which means by the time she turned 15 she had experienced the Great Depression and nearly all of World War II. Obviously, I wasn’t around for any of that, but thanks to stories from her and my dad, we had a sense of the hardship of those times.

Plus, we kids witnessed how those times shaped our parents in the decades to come. Both my parents always had a deep sense of frugality and a dislike of waste. They heavily disliked credit and debt and to this day my father prefers to pay cash (if anyone still accepts it) over anything else.

I bring that up in large part because of the wonderful FaceTime Kevin ran last Wednesday examining today’s young people (whom he called the “Exposed Generation").  Kevin wisely (and that’s a term I don’t use often with him) questions what members of the Millennial generation would consider “essential” commerce—a term so important in our Covid environment.

As Kevin pointed out, these young people have seen their early lives buffeted by the 9-11 terrorist attacks, the 2008 Great Recession and now whatever Covid-19 has to bring. As economists have pointed out, this younger generation (and those that follow it) already was falling far behind the financial achievements of their parents. That has to make us all wonder what kind of consumers they’ll grow up to be in the decades to come.

It’s a question worth pondering because it is an incredibly large generation and they’ll be everyone’s main shoppers very soon if not already. 

Someone recently shared with me an article from Buzzfeed that might fuel your thinking on this topic. 

The article argues that the pandemic lockdown and the deep recession that seems to be developing in front of us, might finally end decades of rampant consumerism driving the American economy.

That’s a challenging but important premise for any of us to consider because it flies directly in the face of store and product development for many decades now. But if a new consumer frugality is in the offing, we’re going to need painful self-reflection on how to gear stores to a generation of shoppers who might question why a store that carries 100 varieties of olive oil say, ran out of toilet paper. The entire equation of customer satisfaction might suddenly come under assault, which in turn means the approach to building a winning experience might be shifting as well.

The reality is that we already have competitors that seem perfectly positioned for the kind of world Buzzfeed suggests we will be seeing soon. We’ve argued here before that all those Aldis, Grocery Outlet and Dollar variety stores seemed placed like vanguard soldiers simply awaiting an economic downtown and possibly a population yearning for frugality and simplicity.

The future, it seems, is here and as always, it isn’t for the faint-hearted.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com.

His book, “THE BIG PICTURE:  Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available here.

And, his book "Business Rules!" is available from Amazon here.

Published on: June 2, 2020

The decision by speaker company Sonos to launch its own streaming music service - dubbed Sonos Radio - strikes KC as a good example of a business looking to form direct, relevant and resonant connections to its customers.

Published on: June 2, 2020

The Washington Post this morning reports on how "scenes of destruction have created chaos and concern along the path of the nation’s protests over the death of a black man in police custody in Minneapolis … Retailers and other businesses in cities across the country, including the Bay Area, the District of Columbia, New York, Atlanta, Philadelphia and Minneapolis, experienced broken windows, thefts and other violence over the weekend.

"The actions prompted a number of businesses to shut their doors and raised questions about how exactly the actions relate to the protesters, many of whom were peaceful."

The temporary closures across the country by retailers big and small came after many of them "already cut back on operations or shut completely in March because of restrictions implemented to protect people from the novel coronavirus. Those weeks of closures have already pushed some companies into bankruptcy, including J.C. Penney and Neiman Marcus, plus smaller businesses that couldn’t survive a prolonged downturn."

The Post notes that "the theft of T-shirts, computers and food appears to run counter to the message from demonstrators who have filled streets in cities and towns from coast to coast following the death of George Floyd, some professors who study the topic said. The looting also can feel distinct from the unrest’s vandalism and property destruction."

The Post goes on:  

"The weekend’s actions were reminiscent of the Los Angeles Rodney King protests in 1992, said Darnell Hunt, dean of social sciences at UCLA. In this case, though, the destruction did seem to take place in more affluent neighborhoods, he said. Some business owners put up signs noting it was a minority-owned store to try to be spared.

"Not all of them were saved, according to reports on social media.

"The protests are not just a critique of police brutality, Hunt said, though that is the main issue at play.  'It’s an explosion of frustrations and anger about a range of interconnected structures in our society that have disproportionately undermined the livelihoods of people of color, particularly African Americans,' he said."

Meanwhile, the Post writes, "Corporate America is adding its voice to the protests sweeping the country."

Some examples:

"Merck CEO Kenneth Frazier, who is black, said in a CNBC interview Monday that Floyd 'could be me,' calling how Floyd was treated 'less than human'."

"ViacomCBS cable properties, including MTV and Comedy Central, said they would suspend programming for eight minutes and 46 seconds at 5 p.m. Monday as a tribute to Floyd and the Black Lives Matter movement."

"Netflix said Saturday on Twitter that 'to be silent is to be complicit. Black lives matter. We have a platform, and we have a duty to our Black members, employees, creators and talent to speak up'."

Rashad Robinson, president of the civil rights campaign group Color of Change, tells the Post that "he has received more than 20 calls in recent days from companies asking for his input on corporate statements related to the crisis. 'What I am seeing is a level of urgency like I’ve never experienced before, that a lot of everyday black people who work inside companies have helped to create'."

And, the story says, "Marketing experts say the ongoing crisis is different from past uproars over matters such as immigration or climate change, during which companies could choose whether to speak out. Because those who remain neutral have been tagged as contributing to the problem of racism, companies that have traditionally preferred to say nothing are being forced to wade in."

Here's how the New York Times frames the story:

"The outbreak of protests and riots during the weekend roiled retailers of all stripes, adding new stress to an industry that has already been upended by the coronavirus pandemic. But even as major chains boarded up stores and halted operations, they largely sought to convey empathy for protesters following the death of a black man, George Floyd, while in police custody, and did not condemn the damage to their businesses. Many large retailers would not discuss the extent of the damage or how many stores they had to close because of the unrest."

The Times goes on:

"The National Retail Federation, an industry trade group, sought to address the looting but blamed it on 'the actions of a few,' in a Monday statement that largely focused on the reality of racial injustice in the country and peaceful protests.

“'Defacing, looting and plundering businesses, whether viewed as a direct outgrowth of fury or an opportunistic act of vandalism and theft, impedes progress and healing,' said Matthew Shay, the group’s president.  'We urge people to stop looting and destruction under the name of protest'."

Published on: June 2, 2020

Random and illustrative stories about the global pandemic and recovery efforts, with brief, occasional, italicized and sometimes gratuitous commentary…

•  In the United States as of this morning, there have been 1,859,597 confirmed cases of the Covid-19 coronavirus, resulting in 106,927 deaths and 615,426 reported recoveries.

Globally,  there have been 6,388,317 confirmed coronavirus cases, 377,883 fatalities and 2,922,563 reported recoveries.

•  The Wall Street Journal reports that "the first major federal effort to measure the deadly impact of the new coronavirus in nursing homes found around 26,000 deaths, a total that likely falls short of showing the full toll on some of the most vulnerable Americans.

"The new survey of nursing homes, released Monday by the Centers for Medicare and Medicaid Services, showed 25,923 resident deaths tied to Covid-19, the disease caused by the virus, and 449 deaths among the facilities’ staff. The survey also found about 95,000 infection cases at nursing homes across 49 states, about a third of them among staff members."

Which means, if my math is correct, that roughly a quarter of all pandemic deaths in the US were in the population of the nation's nursing homes.  Which strikes me as appalling (if oddly reassuring for those of us not living in a nursing home).  Seeing those stats, however, makes me wonder who the hell would ever go into one of those places.  Not me.  And I know not Mrs. Content Guy.

•  From the Associated Press:

"The Congressional Budget Office said Monday that the U.S. economy could be $15.7 trillion smaller over the next decade than it otherwise would have been if Congress does not mitigate the economic damage from the coronavirus.

"The CBO, which had already issued a report forecasting a severe economic impact over the next two years, expanded that forecast to show that the severity of the economic shock could depress growth for far longer.

"The new estimate said that over the 2020-2030 period, total GDP output could be $15.7 trillion lower than CBO had been projecting as recently as January. That would equal 5.3% of lost GDP over the coming decade.

"After adjusting for inflation, CBO said the lost output would total $7.9 trillion, a loss of 3% of inflation-adjusted GDP."

•  From the Wall Street Journal:

"Companies are starting to roll out tests that can diagnose coronavirus infections at home, offering people who are seeking to return to work a potentially safer, more accessible option to check their health.

"Yet experts worry about the accuracy of the results generated by the at-home tests, costs that insurers often don’t cover and other factors that could limit use … While the technology behind at-home kits is similar to what other Covid-19 diagnostic tests use, where and when the sample is collected can affect accuracy, said Alan Wells, professor of pathology at the University of Pittsburgh and medical director at UPMC Clinical Laboratories.

"A sample taken from saliva or a nose swab could return a false negative, Dr. Wells said, if the disease has moved onto the lungs, as it often does."

•  The New York Times has an excellent summation of what, at this point, we think we know about the Covid-19 coronavirus.

An excerpt:

"Summer is almost here, states are reopening and new coronavirus cases are declining or, at least, holding steady in many parts of the United States. At least 100 scientific teams around the world are racing to develop a vaccine.

"That’s about it for the good news.

"The virus has shown no sign of going away: We will be in this pandemic era for the long haul, likely a year or more. The masks, the social distancing, the fretful hand-washing, the aching withdrawal from friends and family - those steps are still the best hope of staying well, and will be for some time to come."

The Times goes on:

"Some scientists think that the longer we live with the virus, the milder its effects will become, but that remains to be seen.

"Predictions that millions of doses of a vaccine may be available by the end of this year may be too rosy. No vaccine has ever been created that fast.

"The disease would be less frightening if there were a treatment that could cure it or, at least, prevent severe illness. But there is not. Remdesivir, the eagerly awaited antiviral drug? 'Modest' benefit is the highest mark experts give it.

"Which brings us back to masks and social distancing, which have come to feel quite antisocial. If only we could go back to life the way it used to be.

"We cannot. Not yet. There are just enough wild cards with this disease — perfectly healthy adults and children who inexplicably become very, very sick — that no one can afford to be cavalier about catching it. About 35 percent of infected people have no symptoms at all, so if they are out and about, they could unknowingly infect other people."

The bottom line, the Times writes: 

"Wear a mask, keep your distance. When the time comes in the fall, get a flu shot, to protect yourself from one respiratory disease you can avoid and to help keep emergency rooms and urgent care from being overwhelmed. Hope for a treatment, a cure, a vaccine. Be patient. We have to pace ourselves. If there’s such a thing as a disease marathon, this is it."

•  USA Today reports that the nation's supermarket shoppers can "expect months more of seeing store employees wearing masks and gloves – and store signs urging shoppers to follow suit.

"But industry officials believe the pandemic crisis and shopping frenzy are beginning to settle into a busy new grind as America tries to reopen the economy.

"The 'new normal' that's unfolding includes:  A big shift to e-commerce … Continued occasional shortages for meat and produce items (though toilet paper is predicted to become reliably restocked on shelves by the end of summer) … Higher prices as supermarkets continue to pick up the slack of feeding Americans amid wide restaurant shutdowns."

The story goes on:  "What lies beyond depends on whether consumers or their finances ultimately change during the pandemic and once it ends. Industry officials wonder if Americans might keep cooking more at home. They also don't know how much a worsening economy will change consumer needs."

•  Pandemic trend news from Bloomberg:

"New York reported 54 daily deaths from the coronavirus, the fewest since the pandemic began and down from the state’s peak of almost 800 a day in April. New cases in Italy fell to the lowest level in three months … Florida reported 56,830 cases on Monday, up 1.2% from a day earlier, compared with an average increase of 1.4% in the previous seven days. Deaths reached 2,460, an increase of 0.4%.

"California cases rose 2.2% to 113,006 while deaths increased 0.9% to 4,251, according to the state’s website."

Plus, Bloomberg writes:

"New Zealand could remove most of its remaining restrictions on people and businesses as soon as next week after successfully wiping out the coronavirus.

"Prime Minister Jacinda Ardern said that cabinet would bring forward its decision on a further relaxation of measures to June 8 and the move could take effect on June 10. The nation’s Alert Level would be reduced to 1, which denotes 'very few restrictions,' Ardern told Radio New Zealand.

"The country has just one active case remaining and no new infections for the past 10 days."

•  The Wall Street Journal reports that Starbucks "said it would further limit employee hours to match pared-back operations at its U.S. stores, reflecting expectations that sales won’t bounce back from the coronavirus pandemic until at least this fall."  The company is "encouraging workers to take unpaid leave until September because it has decided to keep the dining rooms at most of its thousands of U.S. cafes closed for now. The latest reduction comes after the chain in May reopened stores with reduced operations and had to trim employee hours as a result, limiting sales to drive-throughs, delivery and pickup.

"Starbucks has pared down its business because many restaurant owners remain concerned over how to protect workers and customers, the company said. Executives haven’t said when cafe service will return."

•  National Retail Federation (NRF) Chief Economist Jack Kleinhenz yesterday offered some perspective on the economy's recovery from the pandemic:

"Is it possible the worst of the coronavirus pandemic is behind us? Maybe, but we are not out of the woods yet, and uncertainty abounds,” Kleinhenz said. “Predicting what will happen is even more challenging than usual. While history often helps guide us, previous downturns offer little guidance on what is likely to unfold over the next six to 12 months. There is no user’s manual in which government, businesses or consumers can find precise solutions for what we are going through.”

"Record drops in employment, gross domestic product, retail sales and other indicators have resulted in 'such unparalleled numbers that it is not comparable to anything in economic history and it has yet to catch up with the reality of what we are experiencing,' Kleinhenz said.  'With such sizable disruptions, it is difficult to tally the damage or determine the future'."

•  From the Seattle Times:

"A Seattle-based factory trawler cut short its fishing season off the Washington coast after 85 of 126 crew tested positive for COVID-19 in screening results obtained Saturday,  according to a statement released by vessel operator American Seafoods.

"The test results for the FV American Dynasty are a somber finding for the North Pacific fishing industry, which has been trying to keep the novel coronavirus off the ships and out of the shore-based plants that produce much of the nation’s seafood.

"The outbreak also underscores the toll coronavirus continues to take on the food processing industry across the nation. In Washington state, outbreaks in meat plants, fruit and vegetable fields and packing facilities prompted Gov. Jay Inslee to order new protections for agricultural and food processing workers."

•  The Wall Street Journal asks whether, "as some American theme parks gingerly begin to reopen this week," if "cash-strapped, jittery thrill seekers will return in the face of a still-spreading coronavirus pandemic."

The story notes that "the parks, which closed across the nation in March, are requiring masks and temperature checks and social distancing for guests. But it remains uncertain whether enough people will venture out to the parks to stave off a financial shock for the companies."

The Journal writes that a big uncertainty is season-pass sales:  "For years, theme parks—especially regional operators such as Six Flags and Cedar Fair—competed by building bigger, faster and zanier rides. From Six Flags’ 50-mile-per-hour Batman: The Ride to Cedar Point’s iconic Millennium Force, the companies have laid out big bucks to lure visitors.

"In recent years, theme parks have increasingly shifted their business models, and marketing budgets, toward season passes, which provide a stream of cash from loyal customers. That helps steady revenues and is attractive to big investors."  But those passes may seem like less of a good deal to customers dealing with pandemic realities, not to mention recession-related concerns.

•  The Associated Press reports that "Parisians who have been cooped up for months with takeout food and coffee will be able to savor their steaks tartare in the fresh air and cobbled streets of the City of Light once more — albeit in smaller numbers.

"The city famed for its vibrant cafe society and coffee culture will get some of its pre-lockdown life back as cafes and restaurants partially reopen Tuesday."

However, "Dampening the mood of new freedom, social distancing of one meter (about three feet) between tables will be obligatory and drastically reduce the numbers. For the city well-known for its tiny chairs and fashionably-small 50-centimeter-wide (20-inch-wide) round tables that often touch, this will lower capacity in some outside areas by over half.

"To help matters, the normally space-restricting Paris City Hall is now allowing restaurateurs to be expansive — and have issued an authorization for them to enlarge their outside areas, or create one, without the normal legal red tape until Sept. 30. To do this, they will have to sign a charter promising to respect 'pedestrian traffic, the cleanliness of the premises, safety or even noise reduction vis-à-vis residents'."

C'est la vie.  Mieux vaut quelque chose que rien.  (If my French is imprecise, well, excusez-moi.)

•  CNN reports that in Germany, "The Helmholtz Center for Environmental Research is leading a trial that's sampling wastewater from plants serving some of the largest urban areas and trying to find evidence of the coronavirus.  The ultimate goal is for almost all sewage plants to install these coronavirus early warning systems so as to track the spread of Covid-19."

"If it would be possible to have an idea of the concentration of coronavirus in the wastewater, we can calculate the number of infected people in Leipzig and this would be very interesting in the coronavirus strategies," Dr. Ulrich Meyer, the technical director of Leipzig's waterworks, tells CNN.

However, skeptics suggest that this process is both complex and potentially imprecise.

Not to mention a breeding ground for bad puns.

•  The BBC is reporting that the International Civil Aviation Organization (ICAO) has issued new guidelines covering how airlines should deal with keep passengers safe even as the coronavirus pandemic continues to claim victims.

One recommendation:  restricted access to toilets.

Yikes.  This could be a problem.  Especially for those of us of a certain age who may find restricted bathroom access to be a little…well, restricting.  I wonder if they'll start putting colostomy bags next to the barf bags in the seat pockets.

There's only one bit of good news here - the ICAO guidelines also are calling for limiting or eliminating food and drink services on short-haul flights.

Published on: June 2, 2020

From the Financial Times:

"Amazon locked in some of the lowest borrowing costs ever secured in the US corporate bond market on Monday, underscoring the rise of the ecommerce giant during the coronavirus pandemic and the boost the Federal Reserve has provided through its historic interventions. 

"The company raised $10bn in an offering that included three-year notes carrying an interest rate of just 0.4 per cent, according to people briefed on the matter. The interest on the new three-year note was less than two-tenths of a percentage point above the rate investors charged the US government when it issued debt of a similar maturity in May - a stunning turn for a company whose debt was considered junk as recently as 2009.

"Amazon paid 1.9 per cent on a three-year note when it last tapped bond markets in 2017, to fund its takeover of the grocer Whole Foods Market. The rate it secured on Monday was below the previous record low of 0.45 per cent secured in 2012 and 2013 by companies including Apple, IBM and Walt Disney."

Published on: June 2, 2020

USA Today has the story of McCann's Local Meats of Rochester, New York, where owner Kevin McCann is reopening the store after having been closed for two months.  Aware that the rules of the retailing game have changed and that many customers will wan t to reduce their contact with employees because of the pandemic, McCann has installed a new vending machine in the remodeled vestibule.

"Its nine levels of revolving shelves will be stocked with things like freshly cut uncooked steaks, burgers, sausages, pork chops, chicken and bacon," the story says.  "There might also be some of the shop's prepared foods, such as mac salad, potato salad, macaroni and cheese, baked beans and soup. The machine will accept credit cards and Apple Pay, but no cash."

The story notes that "McCann got the idea from Joshua Applestone, with whom McCann worked in the past. Applestone owns Applestone Meat Co., which has two shops in the Hudson Valley that offers fresh-cut meat from vending machines and are open 24/7."

The vending machine also will have products available when the store is closed, essentially making many of its items available on a 24-7 basis.

Published on: June 2, 2020

•  Bloomberg reports that the coronavirus has forced Walmart to cancel its usual celebrity-laden annual meeting in Northwest Arkansas, at which it celebrates the past year and preaches the Walmart gospel in grand scale.

According to the story, "The Covid-19 pandemic forced Walmart to pivot to a virtual gathering on June 3. This wouldn’t be a big deal for most corporations, but then most corporations don’t invite baseball legend Joe DiMaggio, pop star Taylor Swift or Bill Clinton to their annual meetings. The event — first held at a coffee shop in 1971 and staged since 1994 at the 19,000-seat Bud Walton arena at the University of Arkansas — has never been canceled. Local businesses, already reeling from state-imposed restrictions on their operations, will now have to make do without the influx of visitors they’ve come to rely on this time each year."

Published on: June 2, 2020

With brief, occasional, italicized and sometimes gratuitous commentary…

•  The Dallas Morning News has a story with the headline:

"Think Amazon wouldn’t buy J.C. Penney? Think again."

Here's the reasoning:

"Plenty of analysts and other retail observers expect Amazon to buy Kohl’s, instead of Penney. Both chains have real estate to offer, but Penney has not just stores but a solid distribution network and its popular private-label lines.

"Penney built its strength by developing private labels in a different era when powerful regional department stores could squeeze out the national chains — Penney and Sears — from the brands that they wanted exclusively."

The argument is that JC Penney, despite all its issues, could bolster Amazon's apparel businesses.  And sources say that Amazon has a "team on the ground," discussing various issues with management at JC Penney's Texas headquarters.

•  Ahold Delhaize-owned Food Lion said yesterday that customers using its Food Lion To Go pickup or delivery services now will be able to "use digital coupons and redeem their 'Shop & Earn' MVP rewards program savings. Customers can also see their accumulated Shop & Earn rewards on their checkout screen, in addition to viewing which clipped digital coupons will be applied to their order. These new services offer customers additional ways to save while ordering groceries with the click of a button."  This integration, the company said, represents just the latest improvement in its Shop & Earn program.

The Food Lion To Go "allows customers to experience the same low prices and fresh food items while shopping from home just as they would in-store."

•  Benzinga reports that Amazon has patented a blockchain system that the story says is designed to "ensure that consumer goods sold on Amazon's e-commerce site are authentic," and that "would enable manufacturers, couriers, distributors and end-users, among others, to gain real-time visibility of the item as it moves through the supply chain."

According to the story, "The patent acknowledges the rapid increase of 'systems and databases that can often lack transparency, coherency, referential integrity or security,' and explains how the reliably immutable nature of blockchain will ensure that consumer goods sold on Amazon's e-commerce site are authentic."

Which, of course, has been something of an issue for Amazon's third-party marketplace site.

I love the idea that this blockchain system will be accessible to consumers - that kind of transparency ought to be every retailer's and manufacturer's goal.

•  CNet reports that "Amazon is quietly discontinuing the Echo Look, a hands-free camera joined with the Alexa voice assistant that offered to help keep track of your wardrobe and provide guidance on what to wear."

Not surprisingly, the company said that the reason for it being discontinued is that it has learned as much as it can from the technology.

"When we introduced Echo Look three years ago, our goal was to train Alexa to become a style assistant as a novel way to apply AI and machine learning to fashion," an Amazon spokesperson told CNet. "With the help of our customers we evolved the service, enabling Alexa to give outfit advice and offer style recommendations. We've since moved Style by Alexa features into the Amazon Shopping app and to Alexa-enabled devices making them even more convenient and available to more Amazon customers. For that reason, we have decided it's time to wind down Echo Look."

Consign the Echo Look to the same warehouse where Amazon keeps products - like its smart phone - that didn't have long-term legs but from which it learned something about technology, consumers, and how they interact.  The death of the smart phone led directly to the birth of the phenomenally successful Alexa-based technology.  Let's see what emerges from the Look's demise…

Published on: June 2, 2020

With brief, occasional, italicized and sometimes gratuitous commentary…

•  The Toledo Blade has a story about one retailing success story:  "With unemployment in Ohio now at 16.8 percent and joblessness nationally at 14.7 percent, many consumers are flocking to dollar stores for their low prices, supplies of everyday goods, and smaller footprints that lessen the chances of large crowds and a spread of the coronavirus."

•  The Wall Street Journal reports that personal shopping service Stitch Fix is laying off about 18 percent of its staff, or about 1,400 people.

The majority of those being laid off are California-based stylists, who will be replaced by "about 2,000 stylists in lower-cost locations like Dallas, Pittsburgh, Cleveland, Minneapolis and Austin, Texas, beginning this summer, and going through 2021."

The California stylists will have the opportunity to relocate.

Stitch Fix is supposed to release its quarterly numbers next week.  It would seem to be a good bet that they may not be pretty.

Not to say that the curation model isn't a good one.  I actually think it is … but as the world slides from pandemic into recession, it may not be the sweet spot for a lot of people.

Published on: June 2, 2020

•  FMI-The Food Industry Association yesterday announced the hiring of Krystal Register, MS, RDN, LDN, to lead health and well-being initiatives for the association. Register, a long-time Wegmans Food Markets retail dietitian, will carve out "a unique position at FMI during a time when its members say they place greater value on their health and well-being initiatives.," the organization said.  "Register will lead health and well-being programs and activities and serve as the issue expert on all health and well-being and nutrition policy, operations, and communication issues for FMI members."

•  MarketWatch reports that Tesco CFO Alan Stewart will retire on April 30, 2021, after the planned departure of CEO Dave Lewis.    The company plans an internal and external search for his successor.

Published on: June 2, 2020

MNB yesterday took note of a Wall Street Journal piece about the challenges facing Wegmans in the current competitive environment.

"'A huge part of our business has been treating our customers really as guests and entertaining them. We can’t do that anymore," chairman Danny Wegman told the Journal.  "We lost our mojo. We have to replace it'."

I commented:

It is interesting that Danny Wegman referred to have to "replace" the company's lost mojo, not "regain" it.

I am confident that the folks at Wegmans will figure this out, and that the stores will be better for it.  I'd even suggest that while the circumstances prompting these decisions and adjustments are far from what one would want, I think this will be a good thing for the company.

Internal disruption and renewal always is a good thing.  A little discomfort can be a positive experience.  That's where Wegmans' folks find themselves, and that's okay.  They'll embrace it.

MNB reader Holly Aglialoro wrote:

I’ve been a Cherry Hill Wegmans Merchandiser for 14 years, and the changes in the store brought on by COV-19 coronavirus have been surreal—and sad.

During the height of the pandemic, while the low production in Bakery led to my manager working as crowd manager outside, I was moved to Front End to be a floating grocery bagger.  Meanwhile, the Head Chef of all Wegmans stores came down to manage the removal of the many self-serve bars—and to stock frozen dinners! 

One thing that unites all veteran Wegmans employees and employers is that no matter how different or difficult the task, the focus is on making the customer experience as smooth and pleasant as possible.

I am back to the Bakery now, as is the Manager.  No more self-serve donuts or bagels, but fortunately, fresh breads and pastries remain relevant no matter what.

Thank you again for so many insightful, intelligent, and entertaining newsletters.

And MNB reader Jim Meister wrote:

As the retired CEO Of Kings  Super Markets I knew Bob and Danny  Wegman well.  In my mind they are still the leader  in US food  retailing. They will find their way through this. 

I agree.

And it will be interesting.  The shifts we see taking place in retailing do not play to Wegmans' traditional strengths - big stores, lots of experience and interaction, and a tactile approach to connecting customers to food.

I think it can be fairly argued that Wegmans has not approached e-commerce with the same commitment.  After all, rather than investing in its own proprietary approach, where it could control the customer experience from online ordering through delivery, it decided to farm it out to Instacart.  It was the easy way out … which is out of character for Wegmans.

I think that Wegmans may have to consider a different kind of future.  Smaller stores, perhaps, focusing on fresh food.  Owning the e-commerce experience to a greater degree, and using it to move non-differentiated CPG items (and its own estimable private label).  Using auto-replenishment to build loyalty to that side of the business.  

Will it require Wegmans to reinvent the wheel a bit?  Sure.  But that is sort of in Wegmans' DNA.

(Of course, I recognize that Wegmans doesn't need the likes of me charting its potential future…)