business news in context, analysis with attitude

Published on: July 12, 2021

KC is back from what his family likes to call Kev-cation.  (They also say that "Vacation-Kev" is more fun than "Work-Kev.") Either way … he brought back with him some business lessons.

Published on: July 12, 2021

The Federal Trade Commission (FTC), according to a government posting, "finalized a new rule that will crack down on marketers who make false, unqualified claims that their products are Made in the USA. Under the rule, marketers making unqualified Made in USA claims on labels should be able to prove that their products are “all or virtually all” made in the United States."

According to the posting, "The new rule codifies a broader range of remedies by the FTC, including the ability to seek redress, damages, penalties, and other relief from those who lie about a Made in USA label. It will enable the Commission for the first time to seek civil penalties of up to $43,280 per violation of the rule.

"While stiff penalties are not appropriate in every instance, they send a strong signal to would-be violators that they abuse the Made in USA label at their peril."

The posting goes on:  "Commissioner Rohit Chopra was joined by Chair Lina Khan and Commissioner Rebecca Kelly Slaughter in a statement, which noted the rule will especially benefit small businesses that rely on the Made in USA label, but lack the resources to defend themselves from imitators."

Published on: July 12, 2021

From the Washington Post:

"Live-streamed shopping events — part entertainment, part ad blitz — have become the latest frontier in online shopping. Retailers and brands as varied as Walmart, Amazon, Gucci and L’Oréal are experimenting with new streaming formats to sell a growing array of beauty products, clothing, electronics and home furnishings. The events take place on such platforms as Facebook, Instagram and TikTok, but they’re increasingly on retailers’ own websites."

Ken Fenyo, president of advisory and research at Coresight, describes them this way:  "It’s a version of the Home Shopping Network, souped up for the modern age.  Live streams marry video, interactivity and content — along with a little bit of the thrill of shopping in person.”

However, the Post writes, "some analysts are skeptical that live streams will translate to long-term sales growth, given the endless streaming options Americans already have on social media and such platforms as Netflix and Hulu. Home-shopping channels, they say, were born of an era when audiences were largely captive to their television sets. It’s no longer as simple to attract — or hold — the attention of today’s viewers, who can access entertainment on their smartphones, watches and computers at any time."

And, the Post goes on:  "Analysts say many live streams entice fewer than 1 percent of the viewers to buy. (The most successful of streams can capture sales from 10 to 20 percent of the audience.) There also are wide disparities in consumer engagement. Analysts said events that offer entertainment and allow shoppers to buy products from the same screen as the live stream generally fare best, but retailers are racing to figure out other winning formulas."

Published on: July 12, 2021

CNBC reports that Dollar General, following a pattern set by retailers that include Amazon, Walmart and CVS, is signaling a major health care play by looking to recruit a chief medical officer and expanding its HBC offerings in-store.

According to the story, Dollar General has "hired Dr. Albert Wu as its chief medical officer. He previously worked for McKinsey & Company, where he led a team that focused on health-care-related projects, such as providing care to thousands of rural patients, modeling how to support pandemic relief efforts and designing a digitally driven health insurance."

At the same time, the retailer "will add products such as cold and cough medication and dental supplies to shelves as it aims to become a health-care destination," CNBC reports,' addressing concerns that have been expressed by lawmakers about its lack of healthy products.

Some context from the CNBC story:

"The fast-growing discounter has more than 17,400 stores across the country, including many in rural areas that don’t have many other grocers or major pharmacies nearby.

"However, it has been criticized by some lawmakers for selling few healthy foods, such as fresh fruits and vegetables, and boxing out other retailers that would otherwise open in the areas and sell a wider array of groceries.

"In recent years, Dollar General has added fresh produce and meats to more of its stores. It has fresh produce in more than 1,300 stores — or roughly 7% of its total stores. It has said it may expand that assortment to up to 10,000 stores.

"It has piloted new ways to provide medical care, too. Last month, it offered free Covid-19 testing at select locations through a partnership with the Virginia Department of Health. The Centers for Disease Control and Prevention said it was in talks with the company about turning stores into Covid vaccine sites, though the CDC and Dollar General have yet to announce any official plans.

"Dollar General’s new and remodeled locations will also make room for more aisles of health products and coolers of food. The company said in the spring that it is building bigger stores, as it opens more than 1,000 new locations this year."

Published on: July 12, 2021

Yahoo Finance reports that "The Back Space, a newly launched retail spine and neck care subsidiary of IMAC Holdings, Inc., has partnered with Walmart.

"The unique partnership will make it possible for the Company to provide spinal health and wellness services through its own branded locations directly within select Walmart locations. 

"The Back Space's goal is to fill a void for affordable chiropractic and spinal healthcare by introducing a cost-effective daily service and inclusive membership plan in providing natural healthcare solutions for the spine and neck … The cooperation will enable The Back Space to provide a depth of services, including chiropractic adjustments, nerve and muscle stimulation, and percussion tool therapies for soft tissue recovery, muscle relaxation, and spinal wellness through walk-in and appointment-based care — an array of services delivered in an unparalleled way in the industry."

Yahoo Finance reports that "The Back Space, a newly launched retail spine and neck care subsidiary of IMAC Holdings, Inc., has partnered with Walmart.

"The unique partnership will make it possible for the Company to provide spinal health and wellness services through its own branded locations directly within select Walmart locations. 

"The Back Space's goal is to fill a void for affordable chiropractic and spinal healthcare by introducing a cost-effective daily service and inclusive membership plan in providing natural healthcare solutions for the spine and neck … The cooperation will enable The Back Space to provide a depth of services, including chiropractic adjustments, nerve and muscle stimulation, and percussion tool therapies for soft tissue recovery, muscle relaxation, and spinal wellness through walk-in and appointment-based care — an array of services delivered in an unparalleled way in the industry."

Published on: July 12, 2021

Sunday Today with Willie Geist had a fascinating story yesterday, premised on the possibility that because of climate change, "up to 85% of land in wine-growing areas will no longer be viable."

But there may be a solution, one that currently is being crafted in the Israeli desert.

Fascinating stuff:

Published on: July 12, 2021

•  Bloomberg reported last week that "some high-ranking Black managers at Walmart say career advancement is difficult at the retail chain and they wouldn’t recommend working there, a recent internal survey commissioned by the company found.

"The report, which was presented to members of the company’s senior leadership late last year and seen by Bloomberg News, asked 56 Black supervisors, senior managers and directors about the barriers that made it difficult to achieve their career goals. A majority of those surveyed gave mediocre rankings for career satisfaction.

"The findings, which have not been made public before, include the following:  Lack of diversity in leadership deters Black employees looking for support and career modeling … Black workers feel there is a heavier emphasis on external recruitment than developing existing talent … Unequal access to career and growth opportunities and/or information makes it difficult for Black people to thrive and progress … Compared to their peers, Black staff feel that they must perform at an exceptional level and take on more complex workloads with little room for error to maintain their position … Favoritism, internal politics and having to conform to unspoken social norms or present in a digestible manner negatively impacts Black employee morale and motivation."

According to the story, Walmart responded to questions about the report by saying that  "the study was 'early research' with an 'unscientific and limited sample size.'  It was commissioned by one of its employee-led 'shared value networks,' which were created last summer and focus on driving systemic change in areas like education and criminal justice."

“Hiring, developing, and retaining diverse talent is a top priority for Walmart,” a company representative told Bloomberg. “While we are proud of the progress we have made, we are always looking at our own systems and processes with a critical eye for ways we can do even more.”

Bloomberg writes that "the sobering report underscores the significant hurdles for the world’s biggest retailer in diversifying its upper ranks, an effort that has gained urgency since the murder of George Floyd put a spotlight on systemic racism in the U.S. Walmart, like many other big American corporations, has pledged in recent months to address racial inequities. The company set aside $100 million to create a center on racial equity and has enhanced its disclosure of diversity statistics … While Black workers account for 21% of Walmart’s 1.6 million-person U.S. workforce – a higher percentage than their 13.4% share of the U.S. population – the representation is largely concentrated at lower levels of the organization. In the U.S., 8.4% of Walmart’s corporate officers are Black, about the same level as in 2015. Women, who make up just over half of Walmart’s U.S. workforce, by comparison, have fared much better."

Published on: July 12, 2021

With brief, occasional, italicized and sometimes gratuitous commentary…

•  Reuters reports that Amazon "said its online stores had returned to normal services after a global outage disrupted shopping on its country sites.

"According to outage monitoring website Downdetector, services were disrupted for nearly two hours and at the peak of the disruption, more than 38,000 user reports indicated issues with Amazon's online stores. They occurred on Sunday evening in the United States and Monday morning for much of the rest of the world."

No reason has yet been given for the outage.

•  CNBC reports on how "investors have poured billions of dollars into on-demand grocery delivery firms — some of which are barely a year old — after the coronavirus pandemic accelerated a shift toward online shopping.

"Venture-backed grocery companies have already raised over $10 billion so far in 2021, according to data from Pitchbook, eclipsing the $7 billion raised by such firms last year."

One of the points of the CNBC story is that there are mixed opinions about what's next, with some people believing that we'll start to see a wave of consolidation.  I tend to agree with that perspective;  it makes sense that we'll start seeing some mash-up of companies that have been around for a little bit with newer ones that may have some unique software platforms and business models but not enough traction to succeed on their own.

•  The New York Times had a piece the other day about how many in the restaurant industry believe that the delivery component, accelerated during the pandemic, is here to stay as a significant force in the business.

From the Times story:

"Delivery services like DoorDash and Uber Eats became a lifeline for businesses during the pandemic. Restaurants learned the logistics of dealing with them — rearranging kitchens and stockpiling takeout containers in abandoned dining rooms — and reluctantly accepted delivery fees that cut into their already thin profit margins.

"Some of those changes are beginning to look like they may become permanent, because consumers aren’t letting go of their newfound fondness for getting food delivered to their front doors. In a recent JD Power survey, 71 percent of consumers said they would continue to order delivery as much as or more than they had during the pandemic."

However, "if delivery is here to stay, restaurant groups are pressing for ways to deal with it financially."  The Times writes that in California, the Golden Gate Restaurant Association "has lobbied to cap the fees charged by delivery companies, while allowing them to charge additional fees for marketing services. Early in the pandemic, many cities placed emergency caps on the fees that delivery companies could charge restaurants. But many of those orders are set to expire. If fees return to pre-pandemic levels, delivery will become unaffordable, business owners said."

•  Bloomberg reports that online membership-based retailer Thrive Market, which says it offers "guaranteed savings on your favorite organic brands, delivered to your door," is considering an initial public offering that would value the company at $2 billion.

According to the story, Thrive is working with Goldman Sachs, but is not commenting on the report.

•  CNBC reports that Nordstrom "has acquired a minority stake in four apparel brands owned by the online U.K. fashion house Asos.

"The brands — Topshop, Topman, Miss Selfridge and the activewear label HIIT — all target younger consumers in their 20s. Financial terms of the deal weren’t disclosed."

According to the story, "Nordstrom President and Chief Brand Officer Pete Nordstrom said he views the collaboration as a way to redefine the business model of a wholesaler, such as Nordstrom, working with a retailer. He also expects it to open up the possibility of further strategic partnerships in the future."

Published on: July 12, 2021

With brief, occasional, italicized and sometimes gratuitous commentary…

•  The Seattle Times reports that "after more than 40 years under tobacco company ownership, Ste. Michelle Wine Estates has been sold to a private equity firm for $1.2 billion, owner Altria announced Friday.

"The sale is expected to close in the second half of the year, subject to buyer Sycamore Partners’ obtaining the necessary financing and antitrust clearance … Here in Washington, the sale highlights the mammoth role Ste. Michelle plays in the state’s wine industry and its rocky financial path even before the coronavirus upended business in bars, restaurants and tasting rooms.  

"The broad reach of Ste. Michelle means its ups and downs can have ripple effects. The company accounts for about 60% of all Washington wine sales, by volume, and describes itself as the nation’s third largest wine company, farming nearly 30,000 acres across Washington, Oregon, and California."

•  CNBC reports that "Subway is hoping that upgrading its ingredients and mobile app will help draw customers back to the sandwich chain.

"Starting July 13, the company’s U.S. restaurants will offer nearly a dozen new or improved ingredients, as well as 10 revamped or original sandwiches."

Subway has taken some hits from more aggressive competition, and some that have been self-inflicted - like a foot-long sub that isn't a foot long, and tuna that may not actually be tuna.  Its parent company is called Doctors Associates, which seems appropriate, since some major treatment of its brand identity and value proposition seems called for.

Published on: July 12, 2021

With brief, occasional, italicized and sometimes gratuitous commentary…

•  Fidji Simo, head of ther Facebook app and an executive with that company since 2011, is leaving to become CEO of Instacart, which the New York Times describes as "the on-demand grocery start-up that is preparing to become a public company."  She will replace Apoorva Mehta, "Instacart’s founder and chief executive, effective immediately. Mr. Mehta will become Instacart’s executive chairman."

Simo has been a member of Instacart's board since January of this year.

I trust that in a relatively short period of time, MNB will become Simo's bête noire.  Not because I want to be disagreeable, but because I think that Instacart, with something akin to genius, is undermining the value proposition offered by many retailers - and getting these retailers to unknowingly surrender with hardly a second thought.

•  Reuters reports that "Amazon has appointed Tony Hoggett, a veteran of British supermarket chain Tesco, to run its physical stores, the U.S. group said on Friday.

"Hoggett has been with Tesco, the UK's biggest retailer, for over 31 years and is currently chief strategy and innovation director … Over three decades he rose to become CEO Asia and then group chief operating officer before starting his latest role in April."

"It was a big decision to move on from Tesco but after meeting members of the Amazon leadership team and hearing the ambitions for the business and physical stores, I know it’s a journey and an opportunity that I want to be part of," said Hoggett, who will relocate to Seattle."

Best I can tell, Hoggett had little or nothing to do with Fresh & Easy, Tesco's disastrous attempt to break into the US market.  Which is a point in his favor.

•  Walmart announced that it has hired Chris Cracchiolo, most recently SVP & GM, Global Membership Rewards & Loyalty Benefits at American Express, to run its Walmart+ membership program.

•  Schnuck Markets announced that Ted Schnuck, the great-grandson of the company's founder and currently the vice president-Fresh at the retailer, has been named  executive vice president, supermarkets.

•  Auto-replenishment and predictive shopping platform Replenium announced that it has hired Marcia Webb,  most recently Vice President of Retail Intelligence (National Accounts) for NielsenIQ, as its new Vice President of CPG Sales.

Full disclosure:  Tom Furphy, who contributes regularly to MNB's Innovation Conversation, is the CEO of Replenium.

•  The Wall Street Journal this morning reports that "food-service company US Foods Holding Corp. named a new chief information and digital officer amid the company’s push to boost digital offerings to customers.

"John Tonnison, previously CIO at technology distributor Tech Data Corp., will lead US Foods’ IT infrastructure, cybersecurity and technology innovations operations starting July 12," charged with leading "development of new digital services and e-commerce tools."

Published on: July 12, 2021

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

•  Here are the current US Covid-19 coronavirus numbers:  34,732,753 total cases … 622,845 deaths … and 29,244,103 reported recoveries.

The global numbers:   187,681,587 total cases … 4,050,192 fatalities … and 171,629,112 reported recoveries.  (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 67.6 percent of the US population age 18 and older has received at least one dose of vaccine, with 58.8 percent being fully vaccinated.

•  From the Wall Street Journal:

"Hospitalizations related to Covid-19 are rising in the U.S. after a long decline, federal data showed, providing evidence of the human toll the Delta virus variant is taking on unvaccinated Americans.

"Just under 2,000 new patients were admitted to hospitals each day over the week ending July 5, a 6.8% increase over admissions during the previous week and an 88% decrease over a seven-day average of 16,492 patients admitted daily in early January, according to data collected by the Centers for Disease Control and Prevention.

"New cases are up too, to a seven-day daily average of 13,859 on July 6, about an 11% increase over the previous seven-day average, CDC Director Rochelle Walensky said Thursday at a White House briefing."

•  The Wall Street Journal reports that "the Centers for Disease Control and Prevention said Friday that teachers and students who are vaccinated against Covid-19 don’t need to wear masks in schools. Unvaccinated adults and children under 12, for whom vaccines haven’t yet been authorized in the U.S., should wear masks and students of all ages should continue to learn 3 feet apart, the CDC said.

"Where that isn’t possible, the CDC said, classes should be held anyway in conjunction with other precautions like ventilation and cleaning. Even where Covid-19 cases are rising as the highly contagious Delta variant spreads, the CDC said that all students and teachers should continue to meet in person and that those who are unvaccinated should be tested weekly.

"The guidance advances the CDC’s incremental rollback in recent months of measures adopted to prevent the spread of Covid-19. As vaccines have helped push new cases to a fraction of the peaks reached last winter, the CDC has moved in stages to relax its guidance on face masks, travel and schools."

•  Public health officials are saying that the vast majority of all new Covid-19 coronavirus cases - more than 99 percent - are affecting people who have not been vaccinated.

What if insurance companies established a policy - no pun intended - that if you had access to a vaccine and refused to get it (as opposed to being unable to get it because of age or geography or a health condition), then they will not cover expenses incurred during treatment for the coronavirus?  (According to HealthCare Finance, the "average cost of hospital care for COVID-19 ranges from $51,000 to $78,000, based on age.")   If you don't follow public healthy experts' recommendations, then you have to cover the expenses yourself … and could, if you don't have that kind of cash lying around, lose your house, savings and other assets.

And here's an ever bigger question.  If an insurance company that is publicly traded made that announcement, do you think its stock would go up or down in the immediate aftermath?  I think its stock would go up.

Published on: July 12, 2021

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

•  From the Washington Post:

"President Biden signed an executive order on Friday taking aim at industries where certain companies dominate the market, kicking off a major new battle between the administration and corporate titans that could reshape aspects of the U.S. economy.

"The executive order — which contains 72 initiatives — is striking in its scope and ambition, challenging the business practices of America’s enormous technology, health-care, agricultural and manufacturing firms while also aiming to shake up smaller sectors dominated by only a handful of companies, such as the hearing aid industry … The effort reflects a major change in Democratic policymaking circles, where a new generation of economists has produced research and advocacy arguing that corporate consolidation has harmed workers and consumers. It also tees up a major challenge for the administration, which is likely to face sharp resistance from businesses that may seek relief through courts that have shown skepticism about competition arguments in the past."

The Post descriBes some of the initiatives proposed:

"It encourages federal regulators to craft new rules on tech companies’ data collection and user surveillance practices, targeting the path that such giants as Facebook, Google, Apple and Amazon took to dominance … Biden wants to reduce broadband providers’ market control by restoring net neutrality rules … The order also tells the Food and Drug Administration to work toward allowing the importation of cheaper drugs from Canada and calls for new rules limiting 'noncompete' agreements, which prevent employees from switching jobs … Other recommendations include compelling airlines to disclose “add-on fees” for seating and baggage and making it easier for consumers to get refunds on flights, as well as requiring banks to let customers take their financial transaction data when they switch to a competitor."

Published on: July 12, 2021

Not all my commentary is about retailing and business, and, naturally, the reactions I often get don't always fall within the so-called lines to which MNB mostly dedicates itself.

Which is great.

Take, for example, the brief review I did before I took some time off about the latest season of "Bosch" on Amazon prime Video, based on the Michael Connelly novels.

MNB reader Jon Berg wrote:

While I always enjoy your POV and stance on the business issues you present, I really like the fact that you balance all that with entertainment, sports, politics, etc.  Because none of us lives in a business acumen "only" world.  I think your balanced approach is totally spot on.  Which leads me to your recommendation for "Bosch."  I picked up on the series long ago, based on your review.  I have thoroughly enjoyed it.  My wife was born and raised in inner city LA and later east LA.  We both agreed, watching the show is like a mini-mosaic of visiting there.  The good, and the not-so-good of course.  Please keep the recommendations coming, they are a core part of your well rounded approach with MNB.

But, of course, not everyone agrees.

Another MNB reader wrote:

The Bosch character is a self-righteous prig who allows his passion to rule his brain.  In Season 8, for instance …

Well, I'm going to stop there, because the rest of the email sort of gives away the end of the eight-episode series.  I don't want to do that, and I tried to avoid giving away the game in my review.

I do think that it is possible to be self-righteous without being a prig.  It also is possible to be a prig without being self-righteous.

I did a little checking, and  the dictionary definition of "prig" is, "a self-righteously moralistic person who behaves as if superior to others."

The dictionary definition of "self-righteous" is, "having or characterized by a certainty, especially an unfounded one, that one is totally correct or morally superior."

Which is interesting, because going into this dialogue I would've thought that I'd rather be self-righteous than a prig … but, in fact, according to the dictionary, it is entirely possible that it may be the other way around.

Then again, maybe it is a moot point.

I think there are people in the world - in fact and fiction - who try to make decisions because they believe those decisions are the right thing to do.  In fact, the American detective novel is founded on the notion that the protagonist is willing to go farther than anyone else to do what is necessary to make things as they ought to be.  With more concern for individuals than politics or power structures, to fight for the little guy vs. the institutions that often rule our lives.  It often is framed as a battle between ethics vs. expediency.

And sure, sometimes passion rules the brain, because the protagonist of such novels often has a passion for a kind of justice that less honorable people do not.

Raymond Chandler, who in many ways invented the form, wrote:

“Down these mean streets a man must go who is not himself mean, who is neither tarnished nor afraid. He is the hero; he is everything. He must be a complete man and a common man and yet an unusual man. He must be, to use a rather weathered phrase, a man of honor—by instinct, by inevitability, without thought of it, and certainly without saying it. He must be the best man in his world and a good enough man for any world.

“He will take no man’s money dishonestly and no man’s insolence without a due and dispassionate revenge. He is a lonely man and his pride is that you will treat him as a proud man or be very sorry you ever saw him.

“The story is this man’s adventure in search of a hidden truth, and it would be no adventure if it did not happen to a man fit for adventure. If there were enough like him, the world would be a very safe place to live in, without becoming too dull to be worth living in.”

To characterize such people - in fact or fiction - as "self-righteous prigs" is to miss the point, which is that someone has to be willing to go down those mean streets and behave in an honorable manner that is utterly unfamiliar to those who say they are concerned about the greater good, but actually are more focused on their own well-being, and glowing their own power, influence, or wealth.

At this point, you may be reading this and wondering if I had way too much time to think during my days off.  Which is fair.  And maybe true.

So, I'll just end with this.  The MNB reader who takes issue with "Bosch" refers to "season 8."

But there has been no season eight.  Not yet anyway.  Though, as I pointed out, Harry Bosch will return in a new series on IMDBm, during which he will follow a different path - though on familiar mean streets - originally laid out for him in more recent Connelly novels.

I'm thrilled to be able to go with him.

Published on: July 12, 2021

•  At Wimbledon, Novak Djokovic defeated Matteo Berrettini of Italy in the men's singles finals, 6-7(4), 6-4, 6-4, 6-3, earning his third grand slam championship of the year and putting him on course to sweep all four majors if he wins the US Open, and perhaps even win an Olympic gold medal in the same year.

In the women's singles finals, Ashleigh Barty defeated Karolina Pliskova, 6-3, 6-7 (4), 6-3, to win her first Wimbledon title.

•  At the Euro 2020 football championships in London, the Italian national team defeated the English national team 2-1, ending the British team's hopes of ending a half-century championship drought