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    Published on: April 7, 2021

    The goal of "The Innovation Conversation" is to explore some facet of the fast-changing, technology-driven retail landscape and how it affects businesses and consumers. It is, we think, fertile territory ... and one that Tom Furphy - a former Amazon executive, the originator of Amazon Fresh, and currently CEO and Managing Director of Consumer Equity Partners (CEP), a venture capital and venture development firm in Seattle, WA, that works with many top retailers and manufacturers - is uniquely positioned to address.

    Today, Tom and Kevin consider how sometimes Amazon is a retailer, sometimes a platform, and sometimes an aggregator … and how this can result in a product bought on Amazon being delivered by FedEx (with which it does not do business) in a Walmart box.  The questions they consider is what this means for burnishing or eroding brand value, what it may tell us about its future intentions, and how retailers can use this intelligence in crafting their own strategic goals and brand propositions.

    If you're interested in listening to this Innovation Conversation, you can do so here (or can download this file):

    Published on: April 7, 2021

    From the Los Angeles Times, a story about how a new coalition of small business organizations called Small Business Rising "is urging policymakers to break up Amazon," calling for antitrust regulators to separate Amazon's own retail business from its third-party marketplace.

    Small Business Rising is said to represent "grocers, hardware stores, pharmacies and bookstores" via its alliance with trade associations such as the National Grocers Association (NGA), the American Booksellers Association, and the Alliance for Pharmacy Compounding.

    The Times writes that "convened in part by the Institute for Local Self-Reliance, a small-business advocacy group and a longtime critic of Amazon’s market power, the coalition is likely to ramp up the pressure on the world’s largest web retailer, which has thrived during the COVID-19 pandemic as homebound shoppers stormed online."

    The story goes on:  "Policymakers around the world have scrutinized Amazon’s practice of competing with the independent sellers who now account for most sales on its web store. Critics say Amazon treats sellers as disposable and beholden to its fees and other demands. The company also has been accused of using seller data to inform the design of its own products.

    "Amazon’s conduct and seller critiques featured prominently in a congressional antitrust committee report last year that found the company wielded monopoly power over small merchants."

    In a statement, Amazon has responded that its critics "are pushing misguided interventions in the free market that would kill off independent retailers and punish consumers by forcing small businesses out of popular online stores, raising prices and reducing consumer choice and convenience.  Amazon and third-party sellers complement each other, and sellers having the opportunity to sell right alongside a retailer’s products is the very competition that most benefits consumers and has made the marketplace model so successful for third-party sellers."

    KC's View:

    I've made the point here before that I'm not a lawyer, nor am I an antitrust expert.

    But while I completely understand the motivation behind this effort, and agree that there are ways in which Amazon makes it very tough on small businesses for which it provides a platform, I wrestle with the idea that this all makes it necessary to break up Amazon's two retail entities.

    I would guess that many of the businesses signing on to this effort - especially in the grocery sector - carry private label/own brand items that are similar to national brands that they sell.  They have the choice to price the private label products above or below the national brands, to give them better or lesser promotion, and higher visibility or lower visibility on store shelves.  They make the determination of which private label items to carry based often on sales data for national brands.

    In fact, if I go into the local grocery store, I have to do all the analysis myself - looking up and down the shelves to compare and contrast such items.  Amazon does it for me - telling me if other sellers offer an item at a lower price, though noting that they may not provide free shipping under Prime.

    I'd also guess that for every third party merchant that has found it difficult to do business on Amazon's marketplace  - and, by the way, they don't have to do business via Amazon - there are several that actually have discovered new markets, customers and opportunities because they're now able to scale.  They've understood that Amazon puts them in the middle of a competitive mosh pit, but it also serves as a magnet for shoppers that didn't even know they existed.

    In so many ways, Amazon has disrupted traditional retailing by doing what legacy companies always have done, except doing it faster, more effectively, and with greater customer-centricity.  In the process, it has become bigger and even better at what it does - and hardly a monopoly.

    I get that this is hard.  I get that small retailers are at an enormous disadvantage … but in many ways,  by depending on legacies rather than innovations for their raison d'être, they've put themselves in this position.

    Published on: April 7, 2021

    MarketWatch reports that "UBS analysts forecast 80,000 store closures over the next five years, as the COVID-19 acceleration in e-commerce forces retailers to shrink their fleet of bricks-and-mortar locations.

    "That will bring the total number of stores in the U.S. to 797,000, down from 878,000.

    "UBS also forecasts that e-commerce penetration will reach 27% by 2026, up from 18% in 2020."

    And, "UBS says e-commerce fulfillment from stores will rise to 20% in 2026 from 10% in 2020."

    The projections identify certain retailers seen as better equipped to adapt to new retail realities:  Walmart, Costco, TJX, Home Depot, and Lowe’s.

    KC's View:

    The question is, how many of these closures will be classified as homicides, how many will be death by natural causes, and how many will be suicides.

    I don't know the answer to this question.  But I do know this - there will be more suicides than there will be retailers willing to admit it.

    Published on: April 7, 2021

    The Plant Based Foods Association (PBFA) and The Good Food Institute (GFI) are out with new numbers saying that plant-based retail food sales in the US were up by 27 percent last year, passing the $7 billion mark.

    The growth in the sector was almost twice the 15 percent growth of the total US retail food business, the organizations said.

    Published on: April 7, 2021

    Fast Company has a piece about how "you won’t find breadfruit in the produce aisle at your local grocery store. But Patagonia Provisions, the food-focused offshoot of the outdoor apparel company, wants to help make the tropical fruit a mainstream ingredient.

    "It’s one of a handful of foods that the company has identified as tools to make the food system more sustainable and capture carbon in the soil."

    You can read the piece here.

    Published on: April 7, 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 31,560,438 confirmed Covid-19 coronavirus cases, resulting in 570,260 deaths and 24,122,221 reported recoveries.

    Globally, there have been 133,130,885 coronavirus cases, with 2,889,054 resultant fatalities and 107,368,388 reported recoveries.   (Source.)

    •  From the Wall Street Journal:

    "Newly reported coronavirus cases in the U.S. declined … The U.S. reported more than 61,000 new cases for Tuesday, according to data compiled by Johns Hopkins University that was published early Wednesday … Tuesday’s figure was lower than Monday’s revised tally of 77,794, when several states resumed reporting data after the Easter weekend."

    •  The Washington Post writes that "at least 108.3 million people have received one or both doses of the vaccine in the U.S.  This includes more than 63 million people who have been fully vaccinated … 219.2 million doses have been distributed."

    •  The federal government is saying that "all U.S. adults should be eligible for Covid-19 vaccines by April 19," advancing the May 1 deadline that was set just weeks ago.

    The Wall Street Journal writes that "vaccinations appear to be starting to reshape the pandemic in the U.S., with the Americans who have long faced the highest mortality risk increasingly protected.

    "Public-health researchers caution, however, that the pandemic is far from over. Officials have cited as reasons for concern the spread of new, highly transmissible variants, along with an increase in travel and looser restrictions in several states. Late last month, CDC Director Rochelle Walensky said she had a feeling of 'impending doom' about the increase in new Covid-19 cases."

    •  The Los Angeles Times reports that the state of California has set a reopening date - June 15, which the story suggests "is the clearest indication yet that the hard-hit state may be entering its final phase of the COVID-19 pandemic."

    However, the story notes, "Getting back to business as usual is dependent on two primary factors: a sufficient vaccine supply to inoculate all those who are eligible and willing, and stable and low numbers of people hospitalized with COVID-19."

    •  The New York Times has a piece about how unusual it is for people who have been vaccinated to test positive for Covid-19, writing that "one study found that just four out of 8,121 fully vaccinated employees at the University of Texas Southwestern Medical Center in Dallas became infected. The other found that only seven out of 14,990 workers at UC San Diego Health and the David Geffen School of Medicine at the University of California, Los Angeles tested positive two or more weeks after receiving a second dose of either the Pfizer-BioNTech or Moderna vaccines. Both reports, published on Tuesday in the New England Journal of Medicine, show how well the vaccines work in the real world, and during a period of intense transmission."

    •  The Washington Post reports that "nearly 8 in 10 teachers, school staff members and child-care workers have received at least their first dose of a coronavirus vaccine, federal officials said, after a push to make the vaccines available to them."

    The story goes on: "The CDC said Tuesday that more than 2 million teachers, school staff and child-care workers were vaccinated through the pharmacy program in March and another 5 to 6 million were vaccinated through state programs through the end of March.

    "Separately, a survey released Tuesday by the American Federation of Teachers of its members also found about 8 in 10 had been vaccinated. Among those who have not, about half said they do not want the vaccine."

    •  Target Corp. said this week that it will contribute $5 million to support US and global vaccination programs, with $1 million immediately earmarked for programs that offer free and subsidized Lyft rides to vaccination centers for people living in underserved communities.

    Published on: April 7, 2021

    •  The Wall Street Journal reports that Amazon's " share of the U.S. digital ad market grew to 10.3% last year from 7.8% in 2019, according to a new report from research firm eMarketer.]," which estimates that "Amazon’s U.S. ad revenue last year grew to $15.73 billion, up 52.5% from 2019."

    The story notes that "the company’s U.S. digital ad share is still small relative to Google and Facebook’s, which accounted for 28.9% and 25.2% of the business, respectively, in 2020, according to the report."

    Published on: April 7, 2021

    •  The Associated Press reports that police detectives have completed their on-site investigation at the Boulder, Colorado, King Soopers store that was the setting of a mass shooting on March 22 that left 10 people dead.

    However, the Kroger-owned store remains closed, with the company involved in ongoing discussions about when it should reopen and whether it should be renovated.

    •  GeekWire reports that "Starbucks is launching a new effort to cut down on waste from its ubiquitous beverage cups with a limited trial in Seattle of a 'Borrow a Cup' program.

    The program will offer customers the option to receive their beverage in a reusable cup which can be returned to contactless kiosks at one of five participating Seattle stores."

    According to the story, "The newly designed cups will have a $1 refundable deposit. When a customer is done with the cup, they can scan the cup at a drive-thru or lobby kiosk and then drop it into an opening. Then they scan their Starbucks App to receive a $1 credit to their Starbucks Rewards account, in addition to 10 Bonus Stars.

    "The program will run through the end of May, and the company says each borrowed cup will replace up to 30 disposable cups. Starbucks says it is committed to reducing single use cup waste as part of a larger goal to reduce waste by 50% by 2030."

    Meanwhile, the New York Times reports that "Starbucks says it plans to eliminate all single-use cups from its South Korean stores by 2025, the chain’s first move of this sort as it seeks to reduce its carbon footprint.

    "The coffeehouse chain plans to introduce a 'cup circularity program' in some stores beginning this summer, in which customers would pay a deposit for reusable cups that would be refunded when the containers are returned and scanned at contactless kiosks, the company said in a statement on Monday. The arrangement will be expanded to cafes across the country over the next four years."

    Published on: April 7, 2021

    •  Ahold Delhaize USA-owned Retail Business Services announced that it has hired Rom Kosla - most recently Senior Vice President and CIO of Corporate and Enterprise Solutions at PepsiCo - as its new executive Vice President, IT, and Chief Information Officer (CIO). 

    Published on: April 7, 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.

    •  Fortune reports that Amazon founder-CEO Jeff Bezos has declared that he is in favor of "an increase in the U.S. corporate tax rate, as well as the major investments in the country's infrastructure that the higher taxes would help fund."

    The statement came as the Biden administration has introduced a $1.9 trillion infrastructure plan that would require increasing the federal corporate tax rate from 21 percent to 28 percent, which is below the pre-2017 35 percent rate.  The bill has been criticized by some on the left as being too modest, by some on the right as being too expensive, and has generated debate about the definition of the word "infrastructure."

    In calling for "bold investments in American infrastructure," Bezos said via Twitter, "We recognize this investment will require concessions from all sides — both on the specifics of what's included as well as how it gets paid for (we're supportive of a rise in the corporate tax rate)."

    Fortune writes that "the support for a higher tax rate is notable because of Biden's repeated criticisms of Amazon in recent years for not paying what he said was its fair share—criticisms he aired as recently as last Wednesday. (Amazon responded at the time by saying the research and development credits it had used to reduce its tax bill had bipartisan support and were well established.) … According to calculations in February by the Institute on Taxation and Economic Policy, Amazon didn't come anywhere close to paying the current 21% rate on the record profits it earned in 2020 . ITEP, which last week took to task 55 major corporations for paying no taxes at all, said that Amazon's effective tax rate was 9.4%, meaning it used deductions, credits, and other accounting strategies to avoid $2.3 billion in taxes."

    Published on: April 7, 2021

    Yesterday, Michael Sansolo wrote a column about how The Loft may be self-destructing, and it carried the headline. "Suicide Ain't Painless."

    Prompting one MNB reader to write:

    Kevin, I find the headline 'suicide ain't painless' highly insensitive.  I get it refers to business but there are so many mentally fragile people in this world we live in now, that certainly a better choice of words could have been used.

    Apologies if you were offended.

    I thought that it was a clever - and appropriate, considering the column - headline that also was a movie reference - the theme song from M*A*S*H is entitled "Suicide Is Painless."  And you know how we love movie references around here.

    We also reported yesterday that New Seasons Market and New Leaf Community Markets announced  that they will be no longer sell single-use bottles of water from all stores.  The change in policy is effective April 22, 2021 - Earth Day.

    One MNB reader reacted:

    This is the only way, along with consumer change, that the massive pollution from single use bottles will change.  I hope more retailers take note and make a greater move towards multi use beverage containers.  That will also help in the use of those damn plastic straws too. 

    And finally, this note from MNB reader John Kemp:

    I noticed this morning that the Covid-19 update section seems to be shrinking at a rapid rate.  Planning to take this as a sign there is hope on the horizon and cling to that. (smile)

    I think so.  I hope so.  I look forward to the day when I don't have to write one at all.