business news in context, analysis with attitude

Published on: February 9, 2021

One more thing…

I loved that line when Peter Falk, as Lt. Columbo, used to say it … usually right before he confronted the murderer with proof that the perfect crime wasn't all that perfect.

Or when Steve Jobs used to say toward the end of one of his presentations, usually right before he unveiled a new product - like the iPhone.

Today, I'm happy to present the first of a two-part conversation with Andrew Parkinson and Thomas Parkinson, who in 1989 created Peapod, the world’s first online grocer.  

Now, they're back … with one more thing.  Their new company, officially being launched tomorrow, is called Sifter, which they describe as "an advanced, new online grocery site built for the 200 million consumers who need to avoid certain allergens or ingredients, address a dietary medical need, or follow a specific lifestyle diet. The interactive site delivers an unprecedented level of product information and allows consumers to shop and select products based on their personal dietary needs and preferences. Sifter increases retailer basket size and brand sales through enhanced shopper engagement."

In part one, we talk about the genesis of Sifter, how it can be used by consumers and utilized by retailers … and set the stage for tomorrow's broader conversation about the state of the online grocery business.

Enjoy.

You can find out more about Sifter here.

Published on: February 9, 2021

by Michael Sansolo

There was a time, not that long ago, when film processing and videocassette rentals were among the more profitable services offered by supermarkets. While neither was foolproof nor simple, both services offered multiple benefits to operators.

First off, these services enhanced the notion of one-stop shopping and both required at least two trips to the store, which could only lead to the potential for additional sales. But just a few years later, thanks to digital photography and Netflix, both businesses are basically defunct.

Honestly no one, including Kodak - long the dominant company in photography - saw it coming or, more correctly, acted as if they did. 

With that in mind, we all need recognize that a future warning has been given and pretty loudly. It was hard to ignore the recent announcement from General Motors that one of the world’s largest car companies plans to phase out gasoline powered internal combustion engines in 15 years. It’s hard to imagine that similar announcements won’t be coming soon from GM’s domestic and global competitors, from Ford to Toyota.

Heck, the new direction was even the subject of an expensive and somewhat comical Super Bowl ad starring Will Ferrell.

But that’s where the laughing should stop and the planning should begin. For many years now, supermarkets have added gas stations - once again working to complete the image of one-stop shopping.  Indeed, fuel is the foundation of the entire convenience store industry.

But this change should not be looked at as a completely negative situation.

The shift to electric powered-cars presents both challenge and opportunity. Barring some major technological leap, the truth about electric cars is they can take a substantial period of time to recharge. That means the typical five minutes of gas pumping time is about to expand to one, two or more hours at a recharging station.

Let’s put the pieces together here. The goal of one-stop-shopping was to allow the shopper to accomplish many chores in a single location. Less hassle, less traveling around and more satisfaction were the goals. Looking at electric cars that way, supermarkets may have an edge. A full stock-up shopping trip can take close to one hour in a supermarket so shoppers might find it wonderfully convenient to charge their cars while filling shopping carts.

What’s more, it might make in-store eating areas more popular as shoppers look for ways to occupy that time.

But that benefit doesn’t fall automatically to supermarkets. Restaurants might also see the benefit of adding charging stations to provide a value-add to a one-hour meal. And convenience stores are not going to part with the business easily and they too will look for ways to change the dynamics of a shopping trip.  (An executive for a European convenience company two years ago predicted to me that her stores would add space for yoga classes and manicures to help occupy shoppers during recharge time.) Anything is possible.

At the minimum it means services such as in-store Wi-Fi, dining areas and better quality food might become new table stakes in stores.  Needless to say there are likely countless other services and challenges that stores will add that are beyond my abilities to foresee. (Obviously, it’s going to require a lot of charging stations with all those costs and complications.)

But the hard truth is this: General Motors has basically just given us a glimpse into the future. To assume it won’t impact you ignores the reality that everything about modern shopping has been shaped by the automobile. So ignore this signal from the future at your own peril.

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: February 9, 2021

New York State-based Price Chopper/Market 32 and Tops Markets yesterday announced they they plan to merge, a move that will create a much larger company, with almost 300 total stores in the northeastern US, that they hope is better equipped, with lower costs, to compete in an increasingly cutthroat marketplace.

Terms of the deal have not been announced.  It is expected that the merger, which should not raise any antitrust issues, will close in "the coming months."

The announcement by the two companies said that "this transaction unites two iconic New York-based grocery chains with deep ties to their local communities and shared commitments to service, savings, and convenience."

The companies said that Scott Grimmett, Price Chopper/Market 32's President and CEO, will be CEO of and serve on the Board of Directors of the new parent company.  Frank Curci, Tops Markets Chairman and CEO, will serve on the Board of Directors of the new parent company and as a consultant to assist in the transition. Blaine Bringhurst, Price Chopper/Market 32's Executive Vice President of Merchandising, Marketing and Store Operations, will lead the Price Chopper/Market 32 business. John Persons, Tops Markets President and Chief Operating Officer, will lead the Tops Markets business.

The new parent company will be headquartered in Schenectady, NY., with the banners retaining main offices in Schenectady and Williamsville, NY, under local management.

Curci said that the conversations between the two companies predated the pandemic, saying that "we have long believed that this merger makes sense."

"This merger marks a major step forward and collectively elevates our ability to compete on every level," said Grimmett. "It leverages increased value for our customers; advances shared opportunities for innovation; fortifies the depth of our workforce, community and trade partnerships; and ultimately accelerates our capacity to deliver a distinctively modern and convenient shopping experience."

Scott Moses of PJ Solomon, who advised Price Chopper/Market 32 on the transaction, said:  "As Amazon/Whole Foods, Walmart/Sam’s, Target, Costco, BJ’s, Aldi, Dollar General, Dollar Tree/Family Dollar, Walgreen, CVS and Ahold/Hannaford continue to use their enormous size, and very low cost of capital to make extraordinary investments in their powerful, ubiquitous store and online grocery ecosystems, it is ever more critical for regional grocers to build the scale required to enable them to also invest in price, people, marketing, technology and growth (albeit far less given their relative size).

"This transaction is a clear reflection of that imperative. It has been a true honor to help these two local pillars, both beloved for generations and based in my home state of New York, to enhance their ability to continue to serve their teams, customers and communities across the Northeast, particularly after the heroic service they have provided over the past year."

Published on: February 9, 2021

The Wall Street Journal reports on how "a battle over vanilla is playing out in federal courts across the U.S., with more than 100 proposed class-action cases filed over vanilla flavoring … At issue is one question: Is vanilla really vanilla without vanilla beans?"

The story says that the plaintiffs argue that "food manufacturers are duping consumers by implying products are made with vanilla when they contain at most a trace of the plant."

Opposing them are "companies - McDonald’s Corp. , Wegmans Food Markets Inc., Trader Joe’s and Chobani LLC among them - that argue consumers don’t expect to find real vanilla in their vanilla soy milk or vanilla Greek yogurt as long as it tastes like vanilla."

You can read the story here.

Published on: February 9, 2021

DoorDash announced yesterday that it is buying Chowbotics, a startup that uses robotics to make salads and bowls.  Terms of the deal were not disclosed, but the Wall Street Journal reports that "Chowbotics was valued at $46 million in 2018, when it last raised money."

The Journal writes that DoorDash is exploring how to deploy Chowbotics' technology "across restaurants, a person familiar with the matter said. Ideas include using the technology to help restaurants expand their menu - such as enabling a pizzeria to offer salads - or to allow a salad bar to try out new locations- a kiosk at an airport, for instance - without the need for more manpower."

Published on: February 9, 2021

New York Times columnist Nicholas Kristof has a piece that questions the treatment of Costco's famed rotisserie chickens.

An excerpt:

"Rotisserie chickens selling for just $4.99 each are a Costco hallmark, both delicious and cheap. They are so popular they have their own Facebook page, and the company sells almost 100 million of them a year. But an animal rights group called Mercy for Animals recently sent an investigator under cover to work on a farm in Nebraska that produces millions of these chickens for Costco, and customers might lose their appetite if they saw inside a chicken barn.

"'It’s dimly lit, with chicken poop all over,' said the worker, who also secretly shot video there. 'It’s like a hot humid cloud of ammonia and poop mixed together.'

"You may be thinking: Huh? People are dying in a pandemic. Donald Trump is facing a Senate impeachment trial. And we’re talking about chicken, er, poop?

"Yet we must guard our moral compasses. And some day, I think, future generations will look back at our mistreatment of livestock and poultry with pain and bafflement. They will wonder how we in the early 21st century could have been so oblivious to the cruelties that delivered $4.99 chickens to a Costco rotisserie.

"Torture a single chicken in your backyard, and you risk arrest. Abuse tens of millions of them? Why, that’s agribusiness."

You can read the piece here.

Published on: February 9, 2021

The National Grocers Association (NGA) said yesterday that its in-person show, which had been planned for May 2021, now will be held in Las Vegas from September 19-21 at the Paris Hotel and Casino.

Greg Ferrara, NGA president and CEO, said that "the safety of our attendees will continue to be our top priority. We are confident that, by employing best-in-class protocols and procedures, the 2021 NGA Show will be one of the best ever."

The NGA Show is managed by Clarion Events Food & Beverage Group.

Published on: February 9, 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, there now have been 27,700,629 confirmed cases of the Covid-19 coronavirus, resulting in 476,405 deaths and 17,512,584 reported recoveries.

Globally, there have been 107,070,293 confirmed coronavirus cases, with 2,338,182 resultant fatalities, and 78,951,522 reported recoveries.  (Source.)

•  The Washington Post this morning reports that "at least 32.6 million people have received one or both doses of the vaccine in the U.S.  This includes more than 9.7 million people who have been fully vaccinated … 59.3 million doses have been distributed."

The Wall Street Journal writes that "10 states have vaccinated 10% or more of their residents with at least one shot, and a further 19 states are about to hit that goal … Alaska leads the country, with some 15% of residents vaccinated, with West Virginia following at 12.18% and New Mexico at 11.97%. The daily vaccination rate per hundred people over a seven-day period is highest in Wisconsin, according to data from the Centers for Disease Control and Prevention."

•  Facebook announced that it will remove postings that make erroneous claims about the efficacy of the various Covid-19 vaccines, the New York Times reports.

Among the kinds of inaccurate claims being made are comments saying that the vaccines are more dangerous than the disease itself, or that vaccines can cause autism.

The Times writes that this represents a continuing evolution on the part of Facebook, which in October "prohibited people and companies from purchasing advertising that included false or misleading information about vaccines. In December, Facebook said it would remove posts with claims that had been debunked by the World Health Organization or government agencies.

"Monday’s move goes further by targeting unpaid posts to the site and particularly Facebook pages and groups. Instead of targeting only misinformation around Covid-19 vaccines, the update encompasses false claims around all vaccines."

•  From the Wall Street Journal:

"The U.S. reported fewer than 100,000 new coronavirus cases for the second day in a row, as data showed that in several states, more than 10% of residents have received an initial dose of Covid-19 vaccines … Hospitalizations in the U.S. due to Covid-19 continued to decline. As of Monday, there were 80,055 people hospitalized across the country due to the disease, the fifth consecutive day the total has been under 90,000, according to the Covid Tracking Project. The number of Covid-19 patients requiring treatment in intensive care units also fell, with 16,174 people in ICUs, the lowest level since Nov. 20, according to the Covid Tracking Project."

•  The Wall Street Journal writes that "World Health Organization officials expressed confidence that AstraZeneca PLC’s Covid-19 vaccine can prevent severe cases of the disease, as well as hospitalizations and deaths, despite questions about the protection it offers against a fast-spreading strain of the virus first detected in South Africa."

•  From the Wall Street Journal this morning:

"The virus that causes Covid-19 most likely jumped from one animal to another before entering the human population and is highly unlikely to have leaked from a laboratory, a leader of a World Health Organization investigative team said at a news conference in the Chinese city of Wuhan … the WHO team said Tuesday it was also possible that it may have been transmitted to humans through frozen food, a theory heavily promoted by Beijing. But the team said the most likely scenario was one in which the virus spilled over naturally from an animal into humans, such as from a bat to a small mammal that then infected a person."

•  The Wall Street Journal reports that Rep. Ron Wright (R-Texas) died Sunday "after contracting Covid-19, according to his campaign office, becoming the first member of Congress to die from the coronavirus while in office."

Wright's office said that he was being treated for cancer before contracting the coronavirus.

•  Some Covid-19 context from Axios:

"In New Jersey, which has the highest death rate in the nation, 1 out of every 406 residents has died from the virus. In neighboring New York, 1 out of every 437 people has died, Axios' Caitlin Owens and Michelle McGhee report.

"In Mississippi, 1 out of every 477 people has died. And in South Dakota, which was slammed in the fall, 1 of every 489 people has died.

"California, which has generally suffered severe regional outbreaks that don't span the entire state, has a death rate of 1 in 899.

"Vermont had the lowest death rate, at 1 of every 3,436 residents."

•  Also from Axios:

"Tampa Bay fumbled its pandemic-era Super Bowl win with postgame mass celebrations."

The story notes that warnings from public health officials did not stop "throngs of maskless fans from swarming downtown Tampa and SoHo."

Now, the story says, "The Hillsborough County health department put out a national call requesting information on COVID-19 cases associated with Super Bowl LV.  Hillsborough will document all confirmed cases, Florida resident or not, of patients who report having attended the game or any official events surrounding it, health department spokesman Kevin Watler said."

•  Fox Business reports that "without a fresh round of COVID-19 aid from the federal government, about a third of the nation's pandemic-stricken small businesses are warning they won't be able to survive.

"That's according to a new report published by the Federal Reserve, which found that sales for 88% of small businesses have not yet returned to pre-crisis levels.

"About one in three -- roughly 30% -- of businesses said they expected they could not stay afloat without further assistance from the government, according to the report from the U.S. central bank’s 12 regional offices."

•  The Associated Press reports that Delta Air Lines "will continue to block some seats on all flights through spring break and Easter to provide a bit more space between passengers.

"The Atlanta-based airline announced Monday that it will limit capacity on flights through April 30. Delta said it will block middle seats in most cabins although groups of three or more passengers can choose to sit together."

•  Interesting story in USA Today about how one of things changed by the pandemic has been ther imposition of fines by libraries for overdue books.

"Since March, dozens of libraries have abolished the fees, citing the economic barrier they create for low-income patrons<' the story says.

USA Today makes the point that the pandemic actually has accelerated - sound familiar? - the trend, as some libraries already had stopped assessing the fines because they ended up hitting economically challenged patrons who could least afford them.

Published on: February 9, 2021

•  Bloomberg reports that "some of the biggest names on Wall Street and in Silicon Valley - JPMorgan Chase, Advent International, Khosla Ventures among them - are pumping billions of dollars into mom-and-pops selling everything from tea kettles to jock itch remedies on Amazon.com Inc.

"Investment banks, venture firms and private equity shops are backing so-called Amazon aggregators - often led by e-commerce veterans - that are betting they can take up-and-coming sellers, who often operate out of their garages, and transform them into global brands. The aggregators say they have the expertise to select strong products and avoid faddish ones that flame out before they have a chance to grow."

•  CNBC reports that Amazon "plans to buy half of the energy produced by a huge new wind farm in the Netherlands. 

"Shell and Eneco secured the right to build the 759 megawatt wind farm in the North Sea last July, and Amazon said it would now purchase more than 380 MW of its output to power its operations in Europe. "

According to the story, "The offshore wind farm will include five technology prototypes that have the potential to be implemented at full scale in the future, including a floating solar park and 'optimally tuned turbines'."

Published on: February 9, 2021

•  The Washington Post reports that "an Israeli company unveiled the first 3-D-printed rib-eye steak on Tuesday, using a culture of live animal tissue, in what could be a leap forward for lab-grown meat once it receives regulatory approval … Aleph Farms’ new 3-D bioprinting technology - which uses living animal cells as opposed to plant-based alternatives - allows for premium whole-muscle cuts to come to market, broadening the scope of alt-meat in what is expected to be a rich area of expansion for food companies."

You can read more about it here.

•  JJ Fleeman, president of Ahold Delhaize-owned Peapod Digital Labs, and Roger Wheeler, president of Ahold Delhaize-owned Retail Business Services (RBS), said yesterday that they have joined the CEO Action for Diversity & Inclusion, described as "the largest CEO-driven business commitment to advance diversity and inclusion within the workplace."

The companies say that they are joining a "growing coalition of over 1,500 CEOs pledging to cultivate workplace environments where diverse experiences and perspectives are welcomed and where employees feel comfortable and empowered to discuss diversity and inclusion."

Published on: February 9, 2021

Mary Wilson, a founding member of The Supremes with Diana Ross and Florence Ballard, has passed away at age 76.  The New York Times this morning quotes Berry Gordon, the founder of Motown, as saying that Wilson was a "trailblazer," and that the Supremes "had opened doors for other Motown acts."

Published on: February 9, 2021

Got the following email from an MNB reader about Kroger's decision to pay employees $100 if they get the Covid-19 vaccine:

From the Unintended Consequences potion of the program, some general questions:

1.       What does Kroger plan to do with the information they collect from employees relative to the administration of the vaccine, or the refusal to get the vaccine?  They compile/sell massive amounts of data to manufacturers – what makes you think they won’t compile/sell this data?

2.       With whom will this information be shared internally?  Co-workers, supervisors, no one, everyone?

3.       Will employees who get the vaccine be considered for promotion over those who don’t?  And even if Kroger says no (which I assume they will), see question 2.  Will it become an unconscious factor?

While I applaud Kroger for taking this first step, I would urge them (and all retailers/public facing companies) to be very careful how they proceed here. 

Classic slippery slope.

I'm pretty cynical, but your suspicions put me to shame.

On another subject from an MNB reader:

Just to piggyback on the Ahold story of a pickup Kiosk for online orders.  It looks as though Hy-Vee is planning a similar venture.  I just wonder how much money this will cost to retro fit the stores for this online shopper. Could this be put to better use?  Hannaford out of Maine has a similar style program where you order online, they shop for you and then bring it to your car.  Cost to implement was a couple signs and poles to designate pick up spots.  Theirs was implemented long before the pandemic, and seems a much more pleasant experience.  Plus, you don’t have to get out of your car during inclement weather.  Which as you know in the NE is a frequent occurrence.  

And from another reader:

The locker idea has some merit,  but I don’t think it can grow market share or basket size for the locations with this feature installed. Yes, maybe capturing some of the online orders, but I see the consumer still cherry picking add items and buying smaller orders.  For me, if I’m paying to have my order picked, I would want it delivered as well.   I think they would be better served taking that “innovation” and putting towards providing greater service to get people out of their stores quicker.  It seems to me, that, is the real issue.  I hear “hey we have this neat thing for you, so you don’t have to wait in our long lines.”

Some things in this business are not that hard.