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    Published on: May 18, 2021

    by Michael Sansolo

    In our technological world it seems the limits of what can and will be done are always left in the dust. Kevin and I like to speculate on future technologies; needless to say, with us the discussion always comes back to Star Trek.

    But in many ways life seems like Star Trek. Consider those 17-year periodic cicadas I’ve talked about before. The last time they emerged in 2004 there was no such thing as an iPhone.  In fact, there were no smart phones. None of us knew what 5G stood for, could have imagined ransomware choking fuel supplies, having watches that give a rapid EKG, electric powered unicycles or drones delivering our groceries. (Or think about the technology Kevin wrote about on Friday that allows people to “try on” clothing virtually.)

    Of course, cicadas won’t worry about any of that stuff. You, however, must, because all this new technology always finds a way to quickly change life for consumers everywhere and that impacts your business.

    Just last week, IBM announced the development of a new, denser computer chip that once available (in five years, they estimate) could quadruple the battery life in your smart phone and that’s just the start.

    It’s been years since I’ve heard anyone talk about Moore’s law, the long ago technology prediction that every two years the power and capability of computer chips would double, while costs would essentially drop by 50%. Gordon Moore (later the CEO of Intel) made that prediction in 1965 (and edited it a decade later) when neither people nor cicadas could have possibly imagined the technology we’d all have at hand today. (Everyone that is except Gene Roddenberry, the creator of Star Trek, which first aired in 1966.)

    So let’s consider where things go next. If we’re soon to see chips that are exponentially faster than today’s and linked to 5G networks that are themselves substantially faster, that means today’s technological dreams are coming true faster than anyone might have imagined.

    In turn that means we are just a few years from smarter homes, smarter appliances and an expectation of smarter stores that are armed with artificial intelligence and more, and that will take the mundane shopping trip to new technological heights and frankly to places I can’t imagine. Perhaps we’ll finally achieve the Star Trek vision of food replicators that turn waste back into desirable edibles, but more likely our future phones and watches will guide us through the supermarket to the products we need based on what our refrigerators told them.

    That’s, of course, if we need go to a store at all.

    Here’s the thing: we aren’t cicadas who get to emerge every 17 years and try to somehow survive whatever changes the world has created. We do it day after day. That means even now companies need people thinking about the impact of vastly enhanced smartphone chips and networks, not to mention shoppers who’s expectations will rise exponentially with every change.

    For many businesses the challenge isn’t so much Moore’s Law as “we expect more” law, of consumers’ rising demands. And either you rise up with them or you become as relevant as the computers Gordon Moore likely battled in 1965 to get them to complete a simple math equation.

    Change, competition and consumers are all constants, but mainly in how they keep growing.

    Michael Sansolo can be reached via email at

    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: May 18, 2021

    The word is that Amazon - willing to do and spend almost anything to establish and maintain dominance in any category in which it plays - is negotiating to acquire MGM for $9 billion.  But it means more than just movies to run on Amazon Prime Video.  KC explains.

    Published on: May 18, 2021

    Walmart said this morning that its total Q1 revenue was up 2.7 percent compared to the same period a year ago, to $138.3 billion, on same-store sales that were up six percent.  Walmart said that its "U.S. eCommerce sales grew 37% with strong results across all channels, contributing approximately 360 basis points to comp sales. Sales more than doubled over the last two years."

    Net income totaled $2.73 billion, compared with $3.99 billion last year, a drop clearly connected to last year's pandemic sales and the relative segment quiescence this year.

    The company said that "Walmart International net sales were $27.3 billion, a decrease of $2.5 billion, or 8.3%, and eCommerce sales increased 49%. Net sales were negatively affected by $4.2 billion, or 14.1%, related to recent divestitures."

    KC's View:

    As I post this, I haven't seen any comments from Walmart about the efficacy and growth of its Walmart+ program, which looks to compete directly with Amazon Prime.  But, as CNBC notes, that's what a lot of observers are looking for - "investors and analysts will listen to clues about whether the program is helping the retailer deepen relationships with its shoppers and sell them other kinds of services. Hanging on to market share and driving trips to the store has grown in importance, particularly as consumers get vaccinated and feel free to return to more typical pre-pandemic spending patterns.

    Walmart+ is part of the retailer’s plans to broaden its business beyond retail and use its reach to make money in other ways, from advertising and financial services to health-care."

    Published on: May 18, 2021

    NBC News reports that "Texas grocery giant H-E-B has announced it will offer free curbside pickup for Lone Star State shoppers," on orders of $35 and more. The service previously came along with a $4.95 charge with a minimum of $35 on orders."

    “Our goal with H-E-B Curbside is to give Texans an easier, more convenient way to shop for the products they want and need, and we are excited to now offer this service free to all our H-E-B customers,” said Rachael Vegas, Senior Vice President of eCommerce Merchandising.

    KC's View:

    I wonder if this is one way for retailers to wean themselves off the third-party delivery companies that are representing them to consumers - not always well - and take greater control of the e-commerce customer experience.

    Making curbside free may be one way to encourage people to use this rather than delivery … and, among other things, click-and-collect is a lot more profitable.

    Published on: May 18, 2021

    The Jacksonville Daily Record has a story about how "Kroger is building-out a logistics operation in North Jacksonville to deliver fresh groceries," opening a 62,000 square foot  facility that will be used as "a cross-dock for mercantile goods."

    The opening seems to be part of Kroger's broader strategy in Florida, where it operates just one store - a Harris Teeter in Fernandina Beach, just south of Amelia Island.

    Kroger is reported to be opening a small Tampa warehouse on the other side of the state;  these two facilities will be "spokes" that will serve the Groveland customer fulfillment center (CFC), a robotic operation powered by Ocado technology.

    The Groveland operation has been described as positioned to serve south Georgia and south Alabama customers, as well as Florida shoppers.

    Groveland is about 170 miles south of Jacksonville, and about 75 miles northeast of Tampa.

    KC's View:

    Kroger has been a little cagey about its Florida strategy, but it seems clear that at least to some degree, it is planning for some sort of pure-play e-grocery offering there, serving customers without actually having stores - a very 21st century approach to doing business.

    Unless, of course, it is in negotiations to buy Winn-Dixie.

    Published on: May 18, 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 33,747,439 total Covid-19 coronavirus cases, resulting in 600,533 deaths and 27,202,309 reported recoveries.

    Globally, there have been 164,333,208 total cases, with 3,406,346 resultant fatalities and 143,111,873 reported recoveries.   (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 59.8 percent of the US population age 18 and older has received at least one vaccine, with 47.4 percent being fully vaccinated.

    •  The Wall Street Journal reports that "hospitals are seeing fewer Covid-19 patients but increasingly the ones who do land in the hospital are 50 or younger, according to national data.

    "With older Americans vaccinated at higher rates, health officials and epidemiologists said they aren’t surprised that more hospital beds are being filled with younger patients.

    "But some are concerned about the potential stumbling blocks the trend poses. They worry that stagnating vaccination rates among younger Americans could persist and delay the pandemic’s end. Others are concerned that new, more transmissible and possibly deadlier coronavirus variants are contributing factors sending more younger people into hospitals."

    •  The Los Angeles Times reports that Los Angeles County public health officials "have been contacting a number of retail chains to emphasize that existing rules that require everyone to wear masks indoors in a store remain in effect in California.

    "The education effort came after the Trader Joe’s in South Pasadena posted a sign in front of its store on Friday that gave permission for vaccinated shoppers to enter its market without a mask - a policy that violates California orders."

    "'Our teams are out notifying all of the chains that have made announcements nationally that they would be relaxing their masking requirements' that California’s mandatory mask policy within stores statewide remains in effect, L.A. County Public Health Director Barbara Ferrer said.

    "'Absolutely, masking requirements are in place here and all across California,' Ferrer said. 'So this is going to be pretty easy for businesses and customers, residents and visitors to understand - because there’s one standard for the whole state. And it requires that we continue to wear our masks until June 15'."

    Jimmy Fallon had a pretty funny line on The Tonight Show last night, commenting that it is a pretty confusing time when Best Buy has tougher mask-and vaccine restrictions than the CDC.

    •  Axios reports that "Target and CVS Pharmacy on Monday were among the latest to update policies to allow fully vaccinated guests in their stores without face coverings, unless it is required by local law.

    "CVS will still require employees to wear masks while at work … Target is also 'providing paid time to U.S. hourly team members when they get their vaccines' as well as offering free Lyft rides, up to $15 each way, for their workers to drive to and from their vaccine appointments."

    •  Hy-Vee said this morning that it "no longer requires fully vaccinated customers and employees to wear face coverings in its stores, except where it’s required by local ordinances. Face coverings, however, continue to be strongly recommended for Hy-Vee customers who are not fully vaccinated and are still required by the company for employees who are not fully vaccinated."

    The company said it "will continue to implement its extra safety and sanitization procedures that have been in place since COVID-19 first began. Hy-Vee will also maintain its Plexiglas barriers all manned check stands, self-checkout stations, pharmacy counters, customer service counters and convenience store checkouts."

    •  The Detroit Free Press reports that "Grand Rapids-based Meijer announced on Monday that fully vaccinated customers now can enter its stores without a face covering.  But the Grand Rapids-based retailer will still require its store team members to wear a face covering."

    •  The Boston Globe reports that the state of Massachusetts plans to fully reopen, following the revised CDC guidelines on May 29 - including Fenway Park, where the Boston Red Sox - currently in first place in the AL East - will be able to play in front of a full capacity crowd for the first time in more than a year.

    "Governor Charlie Baker on Monday said Massachusetts will lift all restrictions on businesses Memorial Day weekend, moving up the full reopening date by two months. It was a telling sign that the state is returning to something akin to normal after more than a year of death, sickness, and punishing lockdowns."

    •  Axios reports that "the 50th running of the New York City Marathon will be on the customary day — the first Sunday in November — but with 33,000 entrants instead of the usual 55,000."

    •  ABC News reports that New Jersey Gov. Phil Murphy said yesterday that the state will "lift the outdoor mask mandate for all people in public spaces, while indoor rules remain in place … Murphy said it's unfair to put the burden on business owners and frontline employees to police every patron."

    "Our indoor mask mandate remains in place in public spaces," Murphy said. "The majority of New Jerseyans are still unvaccinated, and keeping this mandate in place in public settings protects you, your family, essential workers, and our entire community."

    •  The Washington Post reports that "the Tokyo 2020 Games start in 66 days, but a major Japanese doctors’ group is calling for the already delayed event to be canceled over fears that the country’s health-care system cannot accommodate the potential medical needs of thousands of international athletes, coaches and media amid a surge of coronavirus cases in the country.

    "'We strongly request that the authorities convince the [International Olympic Committee] that holding the Olympics is difficult and obtain its decision to cancel the Games,' said the Tokyo Medical Practitioners Association.

    "Tokyo hospitals 'have their hands full and have almost no spare capacity,' the association of roughly 6,000 primary care physicians added. It is at least the second group of Japanese doctors to ask that the Olympics and Paralympics be canceled."

    Published on: May 18, 2021

    •  Reuters reports that "Germany's antitrust watchdog said on Tuesday it has launched a new investigation into whether U.S. ecommerce giant Amazon is exploiting its market dominance.

    "'In a first step, we are looking at whether Amazon is of outstanding, cross-market importance for competition,' the Federal Cartel Office said in a statement.

    "Should it find that such a marketing position exists, new rules for digital companies would allow it to prohibit any anti-competitive behaviour at an earlier stage, the watchdog said.  Changes to Germany's antitrust laws for digital corporations, which came into effect earlier this year, give the Cartel Office more power in identifying and prohibiting some companies' dominant positions."

    •  Amazon has released its 2020 Brand Protection Report which it says "provides a comprehensive view of how it ensures customers shop from authentic products in its stores."

    Some details:

    "Amazon invested more than $700 million to protect its stores from fraud and abuse … Amazon employed more than 10,000 people to protect its store from fraud and abuse … 

    Amazon’s verification processes prevented over 6 million attempts to create selling accounts, stopping bad actors before they published a single product for sale … Only 6% of attempted account registrations passed Amazon’s robust verifications processes and listed products for sale … Amazon seized more than 2 million products that were sent to its fulfillment centers and that it detected as counterfeit before being sent to a customer. Amazon destroyed those products to prevent them from being resold elsewhere in the supply chain … Amazon blocked more than 10 billion suspected bad listings before they were published in its stores … Fewer than 0.01% of all products sold on Amazon received a counterfeit complaint from customers. Those complaints were then investigated for accuracy."

    •  The Wall Street Journal reports that Amazon "is establishing a program focused on improving the health and wellness of its hourly warehouse staffers, after years of criticism over worker safety at its depots and a pledge by Chief Executive Jeff Bezos to offer a better vision for employees.

    "The company said Monday that its new program, called WorkingWell, aims to better educate some of its employees on how to avoid workplace injuries and improve mental health on the job. The online retailer began testing parts of the program two years ago and plans to expand it to 1,000 facilities by the end of the year, said Heather MacDougall, vice president of world-wide workplace health and safety at Amazon. The company said it aims to cut recordable incidents in half by 2025. The program has been in 350 sites in North America and Europe."

    Published on: May 18, 2021

    •  Eater Boston reports that Massachusetts-based Market Basket this week will open its first Rhode Island store, in Warwick, with plans to open a second unit in Johnston.

    Market Basket also operates in Massachusetts, New Hampshire, and Maine.

    •  In Canada, Empire Company Ltd. announced that it has completed the acquisition of 51 percent of Longo's, the Toronto-based specialty grocery chain, and its Grocery gateway e-commerce business.

    Longo's shareholders will have the ability to sell their shares to Empire over time, though the Longo family has reiterated its intention to maintain its stake in the company.

    Published on: May 18, 2021

    On the subject of why foreign companies invest in US retailers, but we rarely see US retailers investing in companies outside the US, one MNB reader wrote:

    I spent over 20 years marketing food products in outside the US and have a very clear understanding of why US Retailers do not look to foreign markets for expansion.  US retailers are blessed with FREEDOM to an extent that exists nowhere else in the world for business. The US market is the most attractive place in the world to operate a business and US retailers struggle to find a reason to expand outside the US as long as there are growth prospects here.  

    The only countries in the world with a single market size that compares to the US are India and China and access to those countries are significantly controlled by the government.  Every other country for a US company to expand to, adds currency risk and complications, regulatory issues that protect the entrenched local retailers and social differences between the populations even within smaller countries,  and the size of the opportunity is smaller than expanding to an adjacent US market.

    Retailers in other countries view entry to the US market as the opportunity to enter a market several times larger than their home market with a single currency, simpler regulatory environments and therefore worth any risk they foresee.  We are fortunate to be in the best place in the world for business and for all the problems that we obsess over, should never forget that FREEDOM overcomes all issues.

    I'm glad to hear that.  Listen to some folks talk about the business climate in the US, and they talk less about FREEDOM than they do about REGULATION and TAXES, saying there is way too much of each.  The fact that an American business person would say that "the US market is the most attractive place in the world to operate a business" makes me feel better about that whole schmegegge.

    Responding to yesterday's story about companies retraining some employees in things like computer coding as a way of solving some labor woes, one MNB reader wrote:

    OMG.  What a novel idea!!!  Snicker.  Hire from within has always been the best way to maintain the culture of your company.  Now if your company is in trouble, then go outside for talent.  But, if things are going in the desired direction, promote and retrain current loyal employees.  The company creates loyalty, career paths, and reduces costs for hiring and training new, reduces turnover.  I cannot believe that there are companies that actually think this is just now, a great idea.  Sad.

    I think this is a little different than promoting from within;  it is more like making a significant investment in the re-education of employees in areas with which they may not have been familiar.  It may not be reinventing the wheel, but let's give credit for companies who are finding workable solutions to difficult problems.

    Regarding Kroger CEO Rodney McMullen's $22.4-million pay package for 2020, one MNB reader wrote:

    The extravagant corporate bonus for CEO’s is the fault of companies in general.  I look at it like “slotting”.  It only took one to start it and now you all must to pay to play. The companies have to be the ones to stop it.  As long as someone does, then all have to.  If you want the “best” candidate.

    Yesterday we took note of a story about how the recent defeat of a unionization vote at an Amazon warehouse in Bessemer, Alabama, could be in question with reports that Amazon had access to a mailbox the premises used to collect ballots.

    The National Labor Relations Board (NLRB) on Friday heard testimony that Amazon security guards used keys to open the mailbox, which was located near the entrance of the facility in Bessemer, Alabama.

    One MNB reader wrote:

    Concur that IF Amazon management opened a USPS drop box the behavior was both criminal and stupid.

    That said, pretty sure votes could be dropped into any USPS Dropbox and/or handed to their residential mail carrier for introduction into the mail system.

    And, several emails about the current state of the pandemic.

    One MNB reader wrote:

    Kevin I agree with your views on this completely. I know and work with more than a few people who have no intention of ever getting the vaccine. They apparently only care about themselves, and not at all for their fellow man... it's sad that they can't or won't see the big picture. I'm also back on the front lines, and we have no idea whether somebody has been vaccinated or not.

    I went to a local meat market in Salem NH last week, a small chain of 3 stores, that has a hot foods bar. Same as before with the sneeze guards, masks still required, and now disposable gloves you have to wear before picking up the tongs. It seemed to be doing well, I'm just not sure I'm 100 percent there yet, and I'm fully vaccinated. 

    And from another reader:

    Is everyone now on the “Honor System” to wear a mask?  Not going to happen!  We will continue to have confusion until someone sues because they “caught covid because someone wasn’t wearing a mask".