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    Published on: June 18, 2021

    KC notes that the city of Miami, Florida, faced with several climate change issues that could dramatically affect its infrastructure and people in coming years, recently hired a CHO - Chief Heat Officer.  The question is:  Should you?

    Published on: June 18, 2021

    by Kevin Coupe

    Interesting piece in the New York Times about how "millennials were presumed to dislike cars because - thanks to alternatives like Uber, Lyft and helicopter parents - they often delayed getting a driver’s license. Financially strained with school loans, difficult job markets (the Great Recession and the just-now-fading pandemic set back careers) and an average new-vehicle cost of $38,000, they delayed car-buying even longer."

    But it ends up, the Times writes, that maybe one of the things they really hate is buying cars, and the inherent friction that the experience represents.

    "In 2020," the Times reports, "millennials bought more new cars than any other age group, accounting for 32 percent of total new-car sales, edging out baby boomers for the first time, according to the market research firm J.D. Power. And those millennials were nearly twice as likely as boomers to shop for and buy a vehicle — new or used — entirely online, according to Cars.com, which outfits dealers with technology for online sales."

    The bottom line:  "Millennial financial clout, disdain for dealerships and the pandemic have converged to shift how cars are sold, which may benefit car buyers and dealerships alike beyond the pandemic."

    Other changes that have taken place include Tesla's essentially sidestepping the traditional dealership model by owning its showrooms directly;  in states where that was not allowed, it simply had people take possession of their new vehicles in a neighboring state.

    The automobile industry has to come to grips with these changes - in addition to changing the ways in which it makes cars, it has to understand that a growing percentage of the population simply does not want to deal with traditional methods of buying cars.  That group is going to look for alternatives … and will favor the companies that offer them.

    I may not be a millennial (in "Your Views" this morning, you'll see that one MNB reader refers to me as a "liberal coastal boomer whining in his rose'), but I totally get this.  When I bought my Mustang five years ago, the absolutely worst part of the experience was the dealership … enough so that I will put off replacing it until I can figure out how to circumvent that process.

    By the way … this isn't exactly the same thing, but I think it is a similar issue that car companies ought to address.  I don't understand why, in 2021, people are not able to get the cars they want in any color they want - even colors not part of the regular palette offered by car companies.  If I wanted to buy a new Mustang in dark green, for example, I can't do it.  No way.  But you'd think that would be a relatively easy thing for Ford to offer - it might cost a little more and take a little longer, and they might even require picking it up at the factory (that would be cool, actually!).

    This is the kind of service and customization, along with a disruption of the traditional shopping experience, that people want.

    Now, here is the Eye-Opening question that I want to ask MNB readers:

    Are there components of your customer experience that are equally out of touch with consumer demands?  Are there places that impose friction on the experience rather than alleviating it?  

    Actually, I'll answer that question for you:

    There are.

    Which leads to two more important questions:

    1.  What are you doing to identify these issues?

    2.  What are you actively doing to eliminate them?

    Published on: June 18, 2021

    Kroger said yesterday that its Q1 sales were $41.2 billion down 4.1 percent (excluding fuel sales) from the same period a year ago, but up 14.9 percent compared to the same period two years ago - a comparison that is seen as more representative since the pandemic skewed 2020 results.  Same-store sales were up 14.9 percent from the same period two years ago.

    At the same time, Kroger said its Q1 digital sales continued to grow - up 16 percent from last year's first quarter and up 108 percent from the same period in 2019.

    Kroger also said that its first-quarter profit dropped 88.4 percent from a year ago to $140 million, reflecting one-time items, including pension withdrawals and an investment loss.

    In a statement, Kroger CEO Rodney McMullen said, "Kroger is even better positioned to connect with our customers than we were prior to the pandemic as a result of our relentless focus on leading with fresh and accelerating with digital. I am incredibly proud of our amazing associates who continue to be there for our customers, communities, and each other when they need us most and who strive to deliver a full, fresh, and friendly experience to every customer, every time.

    "Kroger’s strong execution delivered identical sales results in the first quarter that exceeded our original expectations. Customers are responding to the investments we have made in digital, as evidenced by our triple-digit growth in digital sales since the beginning of 2019. We were disciplined in driving costs out of the business and we achieved record growth in Kroger’s alternative profit business, demonstrating the power and attractiveness of our long-term model."

    Based on the Q1 results, Kroger said it was raising its sales and earnings guidance for 2021.

    Published on: June 18, 2021

    Walmart has invested in drone delivery company DroneUp as part of its efforts to find new ways to approach last-mile delivery issues, saying that "conducting drone deliveries at scale is within reach. DroneUp’s expertise, combined with our retail footprint and proven history of logistics innovation, puts us right where we want to be for that day. Because when it comes to the future of drone delivery, we know the sky’s the limit."

    John Furner, CEO-president of Walmart U.S., noted yesterday that "last year, we partnered with DroneUp, a nationwide drone services provider, to launch trial deliveries of at-home COVID-19 self-collection kits. The trial demonstrated we could offer customers delivery in minutes versus hours. Now, after safely completing hundreds of drone deliveries from Walmart stores, we’re making an investment in DroneUp to continue our work toward developing a scalable last-mile delivery solution.

    "DroneUp operates an on-demand drone delivery network that matches their database of more than 10,000 Federal Aviation Administration (FAA) certified pilots to missions nationwide. Since partnering with DroneUp last year, we’ve valued their technological expertise, world-class operations and experienced management team – and their commitment to helping the FAA ensure the highest levels of safety with every delivery … Walmart already has a significant part of the infrastructure in place – 4,700 stores stocked with more than 100,000 of the most-purchased items, located within 10 miles of 90% of the U.S. population. This makes us uniquely positioned to execute drone deliveries."

    Furner noted that Walmart's delivery innovations are not just taking place in the sky:  "In April, we announced a similar investment in Cruise, an all-electric autonomous vehicle company. Through these commitments, we’re learning how these technologies can get customers the items they need."

    KC's View:

    When Jeff Bezos gave that 60 Minutes interview a number of years ago in which he revealed Amazon's interest in drone technology, it was assumed that Walmart probably would never even consider such an investment, or at the very least would be late to the party.  The joke was that while Amazon was investing in drones, Walmart would be investing in anti-aircraft weapons.

    This announcement demonstrates exactly how far the technology has come, how fast it has gotten there … and, I think, the degree to which Walmart has evolved in just a few years.

    Published on: June 18, 2021

    Hy-Vee announced yesterday that it is launching a new financial services business, powered by its Midwest Heritage bank subsidiary.

    According to the announcement, "Customers across Hy-Vee’s eight-state region can now enroll in and apply for financial services, including checking and savings accounts, auto and home insurance, home mortgages, consumer loans and pet insurance. Additionally, Hy-Vee Fuel Saver + Perks and Hy-Vee Plus premium members can also access exclusive insurance services and additional savings on mortgage loans and pet insurance … Additional offerings such as life insurance policies, health insurance plans and more are expected to be added to Hy-Vee Financial Services within the year."

    The announcement notes that "over the past several months, Hy-Vee and Midwest Heritage have installed contactless kiosks inside 210 Hy-Vee locations to allow a convenient spot for customers to access an overview of the offerings available through Hy-Vee Financial Services. Using the kiosks, customers can access QR codes to learn more about specific services on their mobile device or pick up brochures for more information."

    "Customers are now seeking more affordable and more convenient financial options," said Hy-Vee's chairman-CEO-president Randy Edeker.  "By leveraging our ownership of our subsidiary Midwest Heritage, we are able to serve our customers in a new way that meets those needs."

    KC's View:

    One of the most important things retailers can do is find ways not just to be retailers, but to become as intertwined as possible in people's lives.  It allows them to become, to use a word much uttered during the past 18 months, essential.

    That would appear to be Hy-Vee's approach here.  It makes sense as long as it does not take its eye off the retailing ball.

    Published on: June 18, 2021

    President Joe Biden yesterday signed into law the Juneteenth National Independence Day Act , making it the eleventh federal holiday.  The law had been passed unanimously by the Senate and almost unanimously by the House of Representatives.

    The holiday celebrates the date - June 19, 1865 - on which slaves in Galveston, Texas, first were informed of the Emancipation Proclamation that had been signed by President Abraham Lincoln two and a half years earlier, completing - at least legally - the freeing of slaves in the US.  While Juneteenth has been observed by the African-American community in the US for decades, the racial strife of the past several years created momentum for it to be made a national holiday.

    USA Today reports this morning that "more than 460 companies are observing Juneteenth at this point, with many offering a paid day off or holiday pay, according to HellaCreative, an initiative launched by Black creatives in San Francisco to make Juneteenth an official holiday."

    Some of the companies observing the holiday - some of them started doing so years ago - include Target,  Starbucks, Home Depot, Best Buy, and Nike.

    However, while today is technically a federal holiday - because June 19 is a Saturday this year - the US Postal Service will be delivering the mail.

    "The U.S. Postal Service is fully supportive of the new Juneteenth National Independence Day Act and making June 19 a federal holiday. Unfortunately, it is not possible to cease the operations of the Postal Service to accommodate an observance over the next 24-48 hours," the USPS said in a statement.

    KC's View:

    I have to say that this year has been a real education when it comes to things like Juneteenth and the 1921 Tulsa Race Massacre - things I was never taught in school, and knowledge of which gives me greater understanding of what some of this nation's citizens have endured.  Though, of course, I can never really understand it … which is part of the problem that endures.

    I've started reading a fascinating book, "On Juneteenth," by Annette Gordon-Reed, in an attempt to educate myself.  

    Published on: June 18, 2021

    •  Fast Company reports that "since 2016, Shopify has partnered with Canadian universities to offer students an accredited computer science degree at no cost, coupled with a paid integrated learning experience with the global e-commerce giant.

    "Now the Dev Degree program is announcing an expansion to an online format that gives students an opportunity to enroll remotely from anywhere in Canada and in select U.S. states.

    "Like the in-person iterations previously delivered in partnership with Ottawa’s Carleton University and Toronto’s York University, the remote version of Dev Degree lets students transition between classroom education and real-world work opportunities at Shopify.

    "The Ottawa-based e-commerce company covers the cost of tuition and pays students for their time on the job; it says that the total package is equivalent to $110,000 USD worth of salary, tuition, and vacation over four years.

    "Furthermore, many graduates are offered a permanent job with Shopify, and 90% secure full-time engineering roles at Shopify or elsewhere prior to graduation, with the remainder finding work in their field within six months."

    You can read more about it here.


    •  Retailer-distributor SpartanNash Company announced what it called "expanded benefits available exclusively for its Fast Lane subscribers.

    "Annual Fast Lane subscriptions are available for $49 per year and include free, unlimited curbside pickup at any SpartanNash store that offers Fast Lane online grocery shopping (a $4.95-per-order savings). Now, Fast Lane subscribers can save even more with half-off delivery in available locations (an additional $4.95-per-order savings). The program could save shoppers an hour per week, in addition to $465 per year on pick fees and $208 per year on delivery fees to their home."

    Published on: June 18, 2021

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  The Associated Press reports this morning that "the number of Americans applying for unemployment benefits rose last week for the first time since April despite widespread evidence that the economy and the job market are rebounding steadily from the pandemic recession.

    "The Labor Department said Thursday that jobless claims rose 37,000 from the week before. As the job market has strengthened, the number of weekly applications for unemployment aid has fallen for most of the year. The number of jobless claims generally reflects the pace of layoffs."


    •  In Southern California, Gelson's announced that it "has introduced the Rewards Program Sampler Box as an innovative way to not only reward and thank their most loyal customers, but also to showcase some new and exciting products. VIP customers receive a box each quarter highlighting new items with live samples and high-value coupons. The box enables customers to try new products risk-free that they may then be encouraged to buy … The innovative program was co-created with Bunny James Boxes, a leading provider of food boxes tailored to various dietary preferences or restrictions. Bunny James specializes in e-commerce, corporate, and retail gift box experiences in the food and beverage arena."

    “Every quarter, our highest tier, most loyal customers will automatically receive a box at checkout containing a curated assortment of 10 to 15 sample size items. The response from our customers has been extremely positive,” said Rich Gillmore, Senior Director of Center Store Category Management for Gelson’s, in a prepared statement. “We are excited to do this for our loyal customers and introduce them to something new while providing our vendors the opportunities to get their products to a very targeted audience of our best customers.”

    A good example, I think, of something we talk a lot about here on MNB - the importance of loyalty programs that demonstrate a retailer's loyalty to the shopper, as opposed to just offering coupons that try to induce customer loyalty.


    •  From the Wall Street Journal this morning:

    "As the Covid-19 pandemic bore down last spring, America’s drugstore giants warned investors that the health crisis threatened their already tenuous turnarounds.

    "CVS Health Corp. and Walgreens Boots Alliance Inc. lost revenue as shoppers stayed home and skipped routine medical care. The companies spent hundreds of millions of dollars to roll out testing and vaccination programs.

    "This spring, something changed: Covid-19 turned into a moneymaker.

    "The nation’s largest retail pharmacy chains say consumers coming for vaccines are spending money in stores. Some vaccine recipients are switching their prescriptions to the chain where they got their shots. CVS, for instance, said it expects a 2% bump this year in so-called front-store sales, which don’t include prescriptions, at locations offering vaccines. The chains have launched a string of products, including at-home test kits, at-home antibody tests, and Covid-19 tests for people with no symptoms or exposure - for which companies generally collect out-of-pocket fees."

    The Journal notes that "other factors have bolstered the two companies. CVS says benefits from its 2018 acquisition of health insurer Aetna are beginning to show, while Walgreens has slashed costs and launched an array of strategic partnerships. Within the past year, both companies have ushered in new chief executives."


    •  USA Today reports that "the selection of coconut milk for sale at the nation’s largest grocer is shrinking.

    "Kroger … is the latest pledging not to stock coconut products from Thai suppliers who have been accused of using monkeys as forced labor, officials from the People for the Ethical Treatment of Animals exclusively told USA Today.

    "Kroger confirmed it will drop Chaokoh branded products after it sells through its existing inventory."

    Published on: June 18, 2021

    •  Reuters reports that Staples CEO Alexander Douglas is leaving the company "and be replaced by executive chairman John Lederer on an interim basis."  No reason was given for his departure.

    The story notes that "the move comes two weeks after Staples offered to buy Office Depot owner ODP Corp’s consumer business for $1 billion, in its latest effort to acquire its rival’s assets."

    Published on: June 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, we've now had a total of 34,377,592 Covid-19 coronavirus cases, resulting in 616,440 deaths and 28,641,439 reported recoveries.

    Globally, there have been 178,253,971 total cases, with 3,859,130 resultant fatalities and  162,750,586 reported recoveries. (Source.)


    •  The Centers for Disease Control and Prevention (CDC) says that 65 percent of the US population age 18 and older has received at least one dose of vaccine, with 55.2 percent being fully vaccinated.


    •  The Wall Street Journal reports this morning that the federal government "will invest more than $3 billion on developing and manufacturing antiviral pills to treat coronavirus, the Department of Health and Human Services said Thursday.

    "'New antivirals that prevent serious Covid-19 illness and death, especially oral drugs that could be taken at home early in the course of disease, would be powerful tools for battling the pandemic and saving lives,' said Dr. Anthony Fauci, chief medical adviser to President Biden and the nation’s top infectious-disease expert.

    "The $3.2 billion investment will be allocated from the $1.9 trillion coronavirus relief package Mr. Biden signed into law in March. In a briefing Thursday, Dr. Fauci said the funding could accelerate clinical trials 'already in progress' for some antiviral pills and potentially make some of them available by year’s end. The oral antiviral medicines would be designed to be taken at home and to treat symptoms early in the course of infection.

    "Dr. Fauci said coronavirus vaccines 'remain the centerpiece of our arsenal' in fighting the pandemic, but noted antiviral drugs would serve as an important complement in preventing severe illness and hospitalization.

    "Researchers are testing antivirals in pill form that could become a kind of Tamiflu for Covid-19."


    •  USA Today this morning reports that "Instacart has a new incentive to encourage more Americans to get vaccinated against COVID-19: Free snacks. 

    "The on-demand grocery delivery company announced Wednesday that it is teaming up with the White House for its 'Get Vaxxed For Snacks' sweepstakes in support of President Joe Biden's month-long effort to get 70% of Americans vaccinated by July 4.  Through June 30, vaccinated customers nationwide have a chance to win free snacks through a $500 gift card this summer, the company said in a news release.

    "The company says it also has been supporting vaccinations with its COVID-19 Shopper Vaccine Stipend Program and has paid out $2 million to support its paid shoppers who received the vaccine."

    Published on: June 18, 2021

    Larry Del Santo, who at varying points in his career served as president-CEO of Vons Grocery Co., CEO of Lucky Stores, and then returned to Vons to become chairman-CEO, has passed away.  He was 87.

    Published on: June 18, 2021

    Yesterday I did a FaceTime commentary about how Victoria's Secret, which is being spun off from L Brands later this year, is getting a new board of directors.  It is made up of seven women and one man (who may be there for diversity's sake).  I argued that this is may be an example of choosing leadership that reflects the consumer base as opposed to, at least in this case, is more interested in objectifying the people who purchase its products.

    Prompting one MNB reader to write:

    So - once again we get the liberal police telling us that because a woman wants to look good - feel sexy and probably feel good in Victoria's secret lingerie - it is because men objectify them? Soo now now that there are 7 women on the board. .. Do you want them to launch a line of Burqa's? What will these women change - they are selling sexy items. So what.  Lighten up francis. 

    If i want to look at a sexy woman - and she wants to be seen as a sexy woman - why do you even care? Overreach - dull - grey - monolith.

    Not only are you not enlightened - but because you see life through gray glasses doesn't mean we have to. Your Wokeness and the wokeness of this country is tired. it was tired before it was tired. we dont need you voicing public outrage over something that is nothing.  

    Your comments will change nothing - they reveal nothing - there was nothing profound - nothing but a liberal coastal boomer whining in his rose'.

    Two things.

    I'm confident in my assessment that Victoria's Secret has made a business out of objectifying women.  If you want to disagree, that's your privilege … and I think your choice of words speak for themselves.

    As for me being "a liberal coastal boomer whining in his rosé" … I'm pretty sure that on that particular evening, I was drinking Tito's and soda with a slice of lime.


    Regarding the Ohio pizzeria that is making a pizza topped with cicadas, MNB reader George Denman wrote:

    I live just 30 minutes from this pizzeria in Dayton, yet there is not enough money in the world to get me to try this concoction with our without the cicadas. Cabbage and bugs have no place on my idea of pizza. I’ll stick to my favorite pepperoni and black olives on a thin crust from Cassano’s in Dayton.

    On another subject, an MNB reader wrote:

    Kevin - years ago you offered some speculation as to what would happen when online companies started to collect sales taxes.  I was thinking about this the other day - I wonder what your thinking is these days about that?  Probably need to separate from pre-Covid and today though…

    It certainly doesn't seem to have slowed down the growth of e-commerce … not before Covid, and certainly not during the acceleration of the past 16 months.


    I did another FaceTime the other day about how businesses have to step up now there seems to be an epidemic of people deciding to change their careers, which prompted one MNB reader to write:

    I'll give you my take at my supermarket chain, Shaw's, and I'm sure other chains as well. Department heads are burnt out after the last year and a half dealing with Covid, etc. Staffing is very difficult, as people are taking higher paying jobs, especially HS age kids. Our corporate parent I feel definitely views us as liabilities, not assets. Morale couldn't be lower than it is right now. There are no qualified people to promote as we have no training programs, so if a department head leaves, it's disastrous.

    We had training programs back in the Sainsbury days, when Shaw's was doing really well. Frustrating to see a once great company being destroyed by Albertsons and private equity.

    From another MNB reader:

    Small retailers in particular walk a fine line between thinking long term and having to survive in the short term.  I know personally, due to unemployment and job prospects or lack thereof, I was forced to do things that I knew, I knew would hurt me in the long term, but, I had to keep my home, I had to eat, I had to survive.  Being in the Supermarket industry, I've seen lots of small operators face the same conundrum, some survived, some didn't.

    And another:

    Man oh man would I like to send your message today to our ownership group.  They have suspended the annual salary increase – indefinitely – until the company’s financial performance returns to acceptable levels.

    Mind you, we are still turning a profit at a rate above industry standards, and Sales reps whose territories have shrunk got commission rate increases “to keep them whole”.

    Oh, and they didn’t suspend their dividend.

    While many of us are grateful for still having our jobs, as Bill Murray says in Caddyshack “How about a little something, you know, for the effort?”


    Finally, Michael Sansolo did a column the other day about the recent news of Walmart deciding to give nearly a million workers free smartphones, complete with an installed app.

    One MNB reader replied:

    Good morning Kevin and Michael, 

    Thanks for your ongoing commitment to sharing your views and the news in retail.  I agree that connecting every employee has a massive impact, maybe the largest of any “technology” investment possibility today. 

    Note that Walmart isn’t first to do this in a modern way, meaning beyond the two-way radios of the retailers you mentioned and many more … Add The Container Store, Bass Pro/Cabelas, Macy’s, Home Depot Canada, Living Spaces, and many more. All have realized the power of connectivity to productivity, employee engagement, customer experience, and the bottom line. They’ve also entered the 21st century with a heads-up hands free approach that uses voice rather than screen and keyboard to ensure store employee are focused on customers and the job and not on a device in their hand. 

    Published on: June 18, 2021

    This week, as part of our series of author conversations, I chat with David Ricciardi, author of the Jake Keller series of espionage thrillers.  The newest one, "Shadow Target," is just out this week; the previous novels in the series are "Warning Light," "Rogue Strike," and "Black Flag."

    The conversation focuses on the art of crafting a thriller, the unique combination of skills that makes Jake Keller an intriguing hero, and on leadership issues on display in the books that often make for flawed decision-making (and that often can be seen in business organizations as well).

    I hope you enjoy my conversation with David Ricciardi.

    "Shadow Target" is available from Amazon, iconic independent bookstore Powell's, and wherever books are sold.