business news in context, analysis with attitude

Published on: January 12, 2021

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.

Sterling and KC look back at 2020 and make some predictions about how the retail world will continue to change, focusing on safety (in all its permutations), seamlessness and friction-free shopping, and expanding use of data/artificial intelligence.

You can listen to the podcast here…

…or on The Retail Tomorrow website, iTunes or Google Play.

Published on: January 12, 2021

dunnhumby is out with its fourth annual Retailer Preference Index (RPI), described as "a comprehensive, nationwide study that examines the approximately $1 trillion U.S. grocery market," and this year concluding that Amazon is most preferred by US consumers - a leap seen as driven by safety concerns created by the pandemic.

According to the story, "Of the 56 retailers included in the survey, the retailers in the First Quartile with the highest overall customer preference index scores are: 1) Amazon, 2) H-E-B, 3) Trader Joe’s, 4) Wegman’s, 5) Aldi, 6) Market Basket, 7) Sam’s Club, 8) Costco, 9) Publix, 10) Target, 11) Fresh Thyme, 12) ShopRite, 13) Sprouts Farmers Market, and 14) Walmart.

dunnhumby says that "the overall RPI ranking evaluates retailer performance on seven drivers of customer preference: Price, Quality, Digital, Operations, Convenience, Discounts, Rewards & Information and Speed."

Grant Steadman, President of North America for dunnhumby, said in a prepared statement:  “Covid has led to record highs and lows in economic metrics, along with huge shifts in where and how consumers shop food retail, changing the competitive trajectories of retailers who were winning and those who were struggling before the pandemic. As a result, we viewed 2020 through a different lens than we’ve viewed the grocery industry in previous years.

"Amazon accelerated past every other retailer on our Covid Momentum Metric and customer safety ratings, due to its speed to shop and virtual store format."

However, Steadman said, "As we begin to emerge from the pandemic, we should expect value perception to come back strongly. Beyond Covid, retailers with Customer First strategies will best adapt to changing behaviors and deliver what matters most to their customers."

Published on: January 12, 2021

CNBC reports that Walmart is working with a venture capital firm to create a fintech startup that it says "will develop unique and affordable financial products for Walmart employees and customers."

The name of the new company has not been disclosed, nor a timeline for when its technology-enabled financial services products might be available.  It is known that Walmart will own the majority of the company, and that its CFO, Brett Biggs, and the CEO of Walmart US, John Furner, will be on its broad of directors.

The venture capital group involved is Ribbit Capital, which is one of the groups behind Robinhood, a fee-free investing start-up.

CNBC offers some context for the move:

"With more than 4,700 stores across the country, Walmart interacts with millions of customers each year – including some who don’t have a relationship with a bank or a financial advisor.

"Six percent of adults don’t have a checking, savings or money market account, according to the Federal Reserve. About 16% are 'underbanked,' meaning they have a bank account but also use alternative financial service products, like a money order. Those Americans are more likely to turn to short-term solutions, such as a pawn shop or a payday loan, which can lead to additional charges or high interest fees."

Published on: January 12, 2021

UPS and Verizon reportedly are teaming up to ramp up a commercial drone delivery program.

According to the announcement, UPS Flight Forward and a Verizon company called Skyward will collaborate "to deliver retail products with drones connected to Verizon 4G LTE, as well as 5G testing and integration for delivery."

First up - delivering retail products via connected drones at The Villages in Florida.

The announcement notes that "UPS has operated more than 3,800 successful drone delivery flights since the creation of UPS Flight Forward, its drone delivery company, certified by the Federal Aviation Administration in 2019. But in 2020, drone delivery emerged as much more than rapid delivery of essential healthcare items — during the global pandemic it provided high-risk seniors a rapid and contactless delivery option to remain healthy at home."

Published on: January 12, 2021

Random and illustrative stories about the global pandemic and how businesses and various business sectors are trying to recover from it, with brief, occasional, italicized and sometimes gratuitous commentary…

•  In the United States, here are the numbers:  23,143,197 confirmed cases of the Covid-19 coronavirus … 385,249 deaths … and 13,680,461 reported recoveries.

The global numbers:  91,392,390 confirmed coronavirus cases … 1,955,171 fatalities … 65,409,960 reported recoveries.  (Source.)

•  From the Wall Street Journal this morning:

"The number of newly reported coronavirus cases in the U.S. edged down, but remained above 200,000 for the seventh day in a row.

"The U.S. reported more than 204,000 new coronavirus cases for Monday, according to data compiled by Johns Hopkins University, a decline of more than 10,000 cases from the previous day and sharply lower than the daily totals at the end of last week.

"The number of people hospitalized in the U.S. due to Covid-19 was slightly higher than the total a day earlier, with 129,748 patients in hospitals, according to the Covid Tracking Project. While elevated, that number was still a decline from the record numbers of hospitalizations seen last week. Intensive care units remained under stress. The number of patients in ICUs across the country topped 23,000 for the 13th day in a row Monday, according to the Covid Tracking Project."

•  From the New York Times this morning:

"The Trump administration will recommend giving a coronavirus vaccine to everyone over 65 in the country, in an attempt to accelerate lagging distribution as Covid-19 deaths have soared to their highest levels since the pandemic began.

"The Department of Health and Human Services is expected to announce the new guidelines at a briefing at noon Eastern on Tuesday, according to an official briefed on the plans who was not authorized to speak publicly about the change. Axios earlier reported the new guidelines … Health officials are also expected to recommend that the vaccines be given to all adults with pre-existing conditions that make them more likely to develop serious illness from the virus. Currently, the vaccines are largely being distributed to people in the highest-risk categories, including frontline health care workers and older people in nursing homes.

"In addition to the eligibility changes, health officials are also adding more community centers and pharmacies to the list of places where people can be vaccinated.

"H.H.S. will also no longer hold back vaccine doses to ensure that those who receive a first dose will have a second dose in reserve. Instead, all existing doses will be sent to states to provide initial inoculations. Second doses are to be provided by new waves of manufacturing.

"That change comes just days after aides to President-elect Joseph R. Biden Jr. said his administration would make a similar adjustment by using more of the already procured vaccines for initial doses. Mr. Biden’s team said it would aim to distribute the doses more quickly at federally run vaccination sites at high school gyms and sports stadiums, and mobile units to reach high-risk populations."

•  According to the Washington Post this morning, "Ireland, which currently has the world’s higher per capita rate of coronavirus infections, may ask people who have already contracted the virus to wait to be vaccinated … While there is no definitive guarantee of how long coronavirus antibodies provide immunity against future infections, the emerging scientific consensus suggests that recovered covid-19 patients are protected for approximately eight months on average. For countries struggling to get enough vaccine doses to immunize their entire population, prioritizing people who haven’t already been sick could make logical sense.

"But some experts have been skeptical, since trying to figure out who’s already been infected could further complicate the distribution process. In many countries, shortages of supplies have proven to be less of an issue than the slow speed of the vaccine rollout."

•  Disneyland in Southern California, which has remained closed because of concerns about the pandemic, finally will start to see people lining up there - it has been identified by Orange County officials as a "super" point-of-dispensing site for the Covid-19 vaccine.

Dodger Stadium in Los Angeles also is being used as a super vaccination site.

It is expected that these large-scale vaccination sites will be able to inoculate thousands of people per day.

•  The Washington Post reports that "three gorillas at the San Diego Zoo have contracted the coronavirus, marking the first known instance of infections among great apes. The animals were tested after they began coughing and are believed to have contracted the virus from an asymptomatic staff member.

"Given the biological similarities between humans and apes, scientists have raised concerns that the coronavirus could pose a threat to endangered primates."

Published on: January 12, 2021

The Wall Street Journal this morning reports that Staples has made a two-billion-dollar-plus unsolicited bid to acquire rival retailer Office Depot, the third time it has tried to do so.

"Previous efforts, including a deal worth $6.3 billion five years ago, were blocked by antitrust enforcers," the Journal writes.

The story notes that "the retail landscape has changed since the companies’ last attempt to merge, with Amazon.com Inc. expanding deeper into office supplies and the Covid-19 pandemic leaving many people working or learning from home. Both Office Depot and Staples have large e-commerce operations, but Office Depot’s revenue has suffered as many corporate offices have been closed. Closely held Staples doesn’t disclose its financial results.

"After the last failed deal, Staples was taken private by Sycamore Partners, a hedge fund that has scooped up battered retail chains, in a leveraged buyout in 2017. The company, now controlled by a Sycamore subsidiary called USR Parent Inc., said Monday it is proposing to buy ODP for $40 a share in cash."

Published on: January 12, 2021

With brief, occasional, italicized and sometimes gratuitous commentary…

•  KRON-TV News reports that San Francisco's board of supervisors "have passed a resolution Tuesday to give them hazard pay, after urging large chain grocery stores to raise hourly wages for employees by $5.

"The $5 in hazard pay would last while the city remains in the purple, red or orange tier on the state’s tiered system … A similar measure was passed in Los Angeles also on Tuesday, which they called 'Hero Pay'."

The story says that "the extra compensation would not be required of small mom-and-pop groceries."

All in favor of hero pay, but I have trouble with applying such assessments to just one retail segment … and in this case, just one part of the segment.

•  Ben & Jerry's is getting into the dog treat business.

USA Today reports this morning that the Unilever-owned company is "introducing a line of frozen dog treats, its first foray into the lucrative pet food market. Doggie Desserts, sold in 4-ounce cups, go on sale in U.S. groceries and pet stores this month.

"The treats come in two flavors: pumpkin with cookies and peanut butter with pretzels. Both are made with a base of sunflower butter. They're made from the same ingredients Ben & Jerry's uses in its non-dairy human desserts."

The move is canny, since dog adoptions have gone way up during the pandemic - people spending more time at home decided they wanted a pet, top the extent that the Washington Post this morning has a story about how "some shelters and humane rescue groups are seeing double the typical number of requests from people to adopt dogs since the pandemic hit the United States in early spring."  In fact, some shelters have a puppy shortage … though there are some concerns about what will happen to these pets once people go back to the office in a post-pandemic world.

•  The Wall Street Journal reports that "Tyson Foods Inc., the biggest U.S. meat company by sales and the nation’s top chicken supplier, and Pilgrim’s Pride Corp., the second-largest U.S. poultry processor by sales, separately said Monday they struck agreements to help resolve a four-year legal battle over alleged collusion in the $65 billion chicken industry.

"Restaurant chains, supermarket operators and food distributors have accused Tyson, Pilgrim’s and other major chicken companies of coordinating production and pricing to boost prices for staples like chicken breasts, tenders and wings."

The story says that "both settlements remain subject to court approval, and neither company has admitted to the chicken buyers’ claims.  The agreements don’t cover lawsuits filed separately by individual plaintiffs."

Published on: January 12, 2021

•  Coborn's announced that it has promoted Dave Meyer, the retailer's executive vice president, to the role of COO.

In addition, the company announced the hiring of Troy Vosburgh, most recently vice president of fresh foods at Skogen's Festival Foods, as vice president of fresh merchandising.

Coborn's also announced three promotions:  Dusty Kerssen, to senior director of human resources …  Chris Schlichting, to director of continuous improvement … and Peter Coborn, to director of strategic pricing.

Published on: January 12, 2021

Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

•  Axios has a story worth reading this morning, entitled, "How CEOs became the 4th branch of government."

The piece suggests that private-sector CEOs can - and have - "managed to act as a faster and more effective check on the power of the president than Congress could. They have money, they have power, and they have more of the public's trust than politicians do. And they're using all of it in an attempt to preserve America's system of governance."

These CEOs, Axios writes, "must be considered a permanent political force, wielding awesome power … But now these executives will face continual questions about their choices or their silence."

Interesting analysis … and you can read it here.

Published on: January 12, 2021

Yesterday, recipients of the MNB Wake Up Call got two of them.  I got several emails asking why.

The answer, actually, is pretty simple.  I goofed.  I hit the "send" button twice.  (Of course, I didn't realize I'd done it until I started getting email about it.)

Forgive me for cluttering your email.

Mea culpa, mea culpa, mea maxima culpa.

Published on: January 12, 2021

Yesterday's FaceTime video was about how the late Feargal Quinn, who founded the iconic Irish supermarket chain Superquinn, used to say, "Never let the accountants win" … in other words, don't make the mistake of prizing efficiency over effectiveness.

Got lots of email about this.

MNB reader Mike Carter wrote:

While working at HEB, I was on a task force to improve customer service. We went to Ireland to tour Feargal’s stores and visit with him on his philosophy … He was so passionate about taking care of his employees which would then translate to wonderful customer service.

From another reader:

Kevin, I loved the message of today “Don’t let the accountants win”, and it dove tails with a phrase I often used in our organization who were “accountant-like” as “Directors of Sales PREVENTION”.

One of the great things about prompting these memories is that it does something that my friend Anne O'Broin calls, "Keeping Feargal in the present tense."

By the way … I checked, and you can get a copy of Feargal's must-read book, "Crowning The Customer," on Amazon - in paperback and for your Kindle.

MNB reader Beatrice Orlandini wrote:

Not only "don't let the accountants win"…

During one of my (many) visits to Superquinn my group was met by Feargal himself and he was very gracious in answering all our questions.

Someone asked him what criteria he used when selecting new employees.

Did they require specific skills?  Years of experience?

No, the only thing he searched for were "people skills".

It can take you days to learn how to cut meat, but in the end everyone gets there.

But people skills... either you have them or you don't.

That's why - especially in the golden years of Superquinn - it was always such a joy to visit their stores.

My friend Beatrice also wrote to me about my headline - Molto Buona - used for the "Your Views" note about opera singing in an Italian supermarket.  She wrote:

I hope you don't my my giving you private Italian lessons.

Buono (masculine) or buona (feminine), means "good", especially referring to taste.

In this case it would have been more appropriate to say "molto bello".

When speaking in general we use the masculine unless it is obvious that we are referring to something explicitly feminine (e.g. a view is "vista" => feminine).

This said - and I apologize for always sounding so pedantic when it comes to anything Italian - anything that livens up the shopping experience is always a good idea.

Mind?  Are you kidding?  My name is Kevin Coupe, and your name is Beatrice Orlandini … I think I'm well advised to take any advice about Italian that you're willing to offer.

I must admit that I don't speak Italian … I know just a few words.  If I had a better ear for languages and some extra time, Italian would be the one I'd want to learn.

One of my favorite words - in any language - is grazie. There is something lovely and musical about the word, and I often will use it instead of saying  'thank you."  My kids - and, if I'm honest about it, Mrs. Content Guy - all roll their eyes when I do it.

But I don't care.  Just saying grazie gives me pleasure.

Or, piacere.  (Hope I got that right.)

Responding to our mention of Tommy Lasorda's passing, MNB reader Bob McGehee wrote:

I don’t know if this is true or just a urban legend BUT:

Tommy Lasorda said he wanted a place on his headstone to put the Dodger’s schedule every year.  His thinking was as people were visiting the cemetery or even his grave, he would be able to let them know if The Dodgers were in town so they might catch a game.

A true supporter even beyond life. 

I know he said it.  I have no idea if they'll do it.

One MNB reader had a response to my piece about Instacart's new CFO, the likelihood of an IPO, and why the clock may be ticking on the company's value proposition:

As (almost) always, agree with your assessment of the story.  In my new role as Grocery Front Line Essential Worker (a.k.a. low person on the totem pole), I’m evaluating your posts at the store level.

Instacart treats their shoppers like s$&t.  A former event planner was nearly in tears as she struggled to find the “Artisanal Bleu Cheese” crumbles her customer wanted.  If the Shopper needs to suggest a substitute, the Customer must approve!  That means texting, messaging, whatever and waiting for a reply.  And the clock is running!  The shoppers get dinged for going over.  And my manager, one of the most outgoing people on the planet, remarked that if one more person stuck a phone in his face (English is often not their first language), he was going to smack them.  And, when the Shopper ditches the items cut specifically for them, who pays?

Love to be able to charge them back.  Thanks for entertaining my rant !

My pleasure.

Finally … yesterday MNB noted that Donald Rouse Sr., the co-owner of Louisiana-based Rouse's Markets, is facing criticism and boycott threats because it has been reported that he attended the rally in Washington, DC, last Wednesday that devolved into an invasion and ransacking of Capitol Hill.

Rouse said he attended the rally, but did not go to capitol Hill, and was appalled by the violence and destruction.

I commented, in part:

I have no idea if Rouse joined the mob that invaded the Capitol last week.  I'm willing to take him at his word, but he'd better hope that no video shows up that contradicts that position.  If so, potential boycotts will be the least of his problem - he's likely to end up being visited by the FBI.

Not only are we seeing stories from all over the country about people being arrested for being part of an invasion of the Capitol last week that is being widely described as seditious and insurrectionist, but we're also seeing stories about companies firing people who have been identified as being part of the mob.  (Ironically, many of these people have identified themselves - they went on social media and bragged about their behavior, often with pictures.  Members of the bozo fringe group QAnon, who made up some of the mob, apparently are not very good at staying anon.)

Taking political positions is one thing.  Protesting is one thing.  Civil disobedience is one thing.  I get it - I'm a child of the late sixties and early seventies.  But what we saw last week was something else … and I suspect the repercussions will be felt for years.

I pointed out that there are numerous companies that now are backing off political donations, and quoted the Wall Street Journal as saying, "The violence at the Capitol appears to have companies scrambling to figure out how to react as they increasingly realize that this is not an ordinary political dispute and the option of sitting on the sidelines grows increasingly unsatisfying."

One MNB reader responded:

There are 74 million of us and allot of those own businesses, so we must fight back in every legal way possible.

I think the most important word in your email is legal.  Seems pretty clear that the law enforcement community is persuaded that the folks who invaded the Capitol were way outside the bounds of what is legal.

From another reader:

I find it more than a bit ironic to see you and others blasting Donald Rouse for expressing his views. Where were you when politicians and practically every Hollywood elite was aligning themselves with radical BLM and Antifa thugs as they actively engaged in violence against the Police, government and private businesses? 

It was okay then, but heaven forbid if the average American opposes the anti-American radical left wing extremists working to destroy our country. 

You have been fortunate to live in a period of our history where opposing views were allowed. That period is quickly coming to an end. 

The hypocrisy is a bit overwhelming. 

I would suggest that you go back and read what I wrote.  At no point did I "blast" Donald Rouse for expressing his views.

In fact, I think I was pretty careful about not getting political.  (Well, other than my crack about QAnon.  But those folks are just nuts.)

I simply said that I hoped Rouse is being accurate in how he characterized the extent of his participation, because there could be legal (and business) repercussions if it is proven otherwise.

I reported - fairly, I think - that there are people in the markets he serves who clearly were going to hold him accountable for his opinions and participation in the rally.  That's their right, just as it is his right to express his political opinions.  But he's a retailer, dependent on the good feelings and approval of customers, and so when he does so, he runs a risk.

To be honest, I got a number of other emails on the subject of the Capitol Hill melee and the broader subject of the domestic terrorism, but I'm not going to run them because they will take us down a political rabbit hole from which it will be difficult to emerge and I don't want this subject to dominate MNB.

I only mentioned it because of the Rouse story, and will only come back to it when there is a retail/business component that makes it worth reporting.

Published on: January 12, 2021

In last night's College Football Playoff Championship, the University of Alabama defeated Ohio State University 52-24.  The win gave coach Nick Saban his seventh college football title, passing Paul "Bear" Bryant to become the college coach with the most championships.