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    Published on: July 26, 2021

    The Cleveland Indians are becoming the Cleveland Guardians.  The announcement on Friday stirred some memories (remember Rocky Colavito?) for KC, and well as suggesting some business lessons.

    Here's the announcement video:

    Published on: July 26, 2021

    The June  Brick Meets Click/Mercatus Grocery Shopping Survey2021 is out, pointing to a "23% decline in total online grocery sales for June vs year ago," that, "much like in May, was driven by decreases in the number of monthly active users (MAUs), order frequency, and spending per order."

    Some additional insights from the report:

    •  "Monthly active users (MAU) dropped 12% to 63.5 million in June 2021 from 72.0 million in June 2020."

    •  "The MAU base declined across all age groups with the youngest (18-29 years old) and the oldest (>60 years old) each dropping by more than 15%. The core customers (30-44 years old) dropped only 6%."

    •  "Pickup’s monthly average user base jumped by almost 16% on a year-over-year basis, while delivery’s base declined 1% and ship-to-home’s base experienced a drop of 6%."

    •  "During June 2021, monthly active users placed an average of 2.70 online orders, down 6% from 2.89 orders one year ago."

    •  "Spending per order shrank as the weighted average across all three receiving methods declined nearly 7% in June 2021 versus a year ago, mostly driven by a drop in delivery’s average order value (AOV) that exceeded 11%."

    •  "Compared to pre-pandemic spending levels, June 2021’s AOVs remained elevated, with delivery up 6%, pickup up 12%, and ship-to-home up 14% versus August 2019."

    KC's View:

    Two things that immediately occur to me.

    First, the phrase "compared to pre-pandemic spending levels" means everything.  Online grocery always was going to back off once people started feeling more confident about going back out into the world.  That said, certain patterns have been established as being viable and even desirable.  

    Second, I'm not sure I'd bet the farm on how long people will feel confident about venturing into the world, now that the Delta variant is wreaking havoc and infection numbers are climbing to way past the point where we can suggest that we have the pandemic under control.

    Published on: July 26, 2021

    The Associated Press reports that Amazon "is pushing landlords around the country — sometimes with financial incentives — to give its drivers the ability to unlock apartment-building doors themselves with a mobile device.

    "The service, dubbed Key for Business, is pitched as a way to cut down on stolen packages by making it easy to leave them in lobbies and not outside. Amazon benefits because it enables delivery workers to make their rounds faster. And fewer stolen packages reduces costs and could give Amazon an edge over competitors.

    "Those who have installed the device say it reduces the constant buzzing by delivery."

    However, security experts say that there are hazards in having any device connected to the Internet that could allow bad actors to open doors.

    Amazon created the program several years ago, and "has already installed the device in thousands of U.S. apartment buildings but declined to give a specific number. It sometimes leaves a clue, placing a round sticker with the Amazon smile logo on buzzers where the device has been installed."  And, the story says, "Amazon salespeople have been fanning out to cities across the country to knock on doors, make cold calls or approach building managers on the street to urge them to install the device. The company has even partnered with local locksmiths to push it on building managers while they fix locks. Amazon installs the device for free and sometimes throws in a $100 Amazon gift card to whoever lets them in."

    KC's View:

    Wow.  Give away keys to an entire apartment building, and you get a $100 gift card.

    What a deal.

    There are all sorts of realities that this program addresses.  One is that many apartment buildings simply are not equipped to handle the volume of boxes that come in on a daily basis, which got only larger during the pandemic.  I took this picture back in 2019 at the apartment house in Portland, Oregon, where I sublet a place during my summer adjunctivities at Portland State University;  the mail room was consistently struggling with how to deal with the daily deluge of packages, most of them from Amazon.

    This is one of the reasons that Amazon also has an Amazon Hub Apartment Locker program that it makes available to buildings, essentially managing and automating mail rooms functions.

    When you combine this with the Amazon Prime delivery system - not sure about you, but we see more gray Prime trucks on our street than we do USPS, UPS and FedEx trucks - you see how Amazon is looking to dominate the last mile to the greatest degree possible.  I don't think it will be long before other retailers start contracting with Amazon to have Prime trucks delivering their products … and then we'll see even greater domination.

    The question we need to consider if this is a good thing.

    Published on: July 26, 2021

    The Seattle Times reports that "Amazon Web Services (AWS) CEO Adam Selipsky has launched an investigation into the business segment’s culture after more than 550 employees signed a petition accusing the cloud-services division of tolerating racial and sexual discrimination and harassment."

    The petition, according to the story, says that there is "an underlying culture of systemic discrimination, harassment, bullying and bias against women and under-represented groups."  And the Times writes, the petition also "criticizes Amazon’s mechanisms for investigating and resolving discrimination claims."

    The story says that Selipsky has hired an unnamed outside firm to conduct the investigation, and that Amazon says he hired the firm even before the petition was delivered.

    The Washington Post reports that "the petition cites a lawsuit filed in May by Cindy Warner, a gay executive in Amazon Web Services professional services business, who accused a manager of making homophobic comments and alleged she was fired in retaliation. It also refers to a LinkedIn post last summer by Laudon Williams, a former employee of the group, who wrote that he left the company over concerns about gender and sexual-orientation discrimination … The petition had asked Selipksy to approve the establishment of an employee council to work with the external investigator 'to hold the company to account in how it responds to the investigation and any recommendations made, and to ensure the voice of employees is central to the review process.' The authors also requested Selipsky to present findings from the investigation by October 30."

    KC's View:

    It probably is worth pointing out that Selipsky has just returned to AWS after five years as CEO at Tableau Software.  (He was vice president of Marketing, Sales & Support at AWS for 11 years before that.)

    But what this suggests is that the environment being described by the petitioners is one that festered while Andy Jassy was CEO at AWS.  Jassy, of course, has just succeeded Jeff Bezos as CEO of Amazon.

    Could this come back and bite Jassy?  Certainly possible.  Stranger things have happened.

    I'm not going to say this is going to occur, but it strikes me as entirely possible that if the situations described in the lawsuit are found to be systemic and that Jassy has some culpability, his tenure as Amazon CEO could be short-lived, and Bezos could be back in the CEO job.  I know this is a big leap from where the story is now, but it is the kind of thing that could happen.  

    One warning to Amazon and AWS as they deal with this internal probe:  Keep in mind that the coverup always is worse than the crime.  Don't make that mistake.

    Published on: July 26, 2021

    The Guardian reports that Jacek Olczak, the CEO of Philip Morris International is saying that the UK government ought to ban cigarettes within the next 10 years, and that the world would be a better place without cigarettes - "and actually, the sooner it happens, the better it is for everyone."

    Olczak says that government action would reduce confusion - and, presumably, the opportunity for a black market to take hold.

    According to the story, "Philip Morris International (PMI) recently said it wanted half its turnover to come from non-smoking products as it morphs into a 'healthcare and wellness company' with executive pay tied to its new mission to 'unsmoke the world' by phasing out cigarettes."

    KC's View:

    If this happens, it would be remarkable … but forgive my skepticism that these folks are going to abandon all tobacco products.  They going to get out of chewing tobacco?  Vaping?  

    If it happens, maybe we can take US tobacco subsidies and apply that money to something a little more worthwhile.

    Published on: July 26, 2021

    LA Magazine has a story noting that "over the last 16 months or so, our shopping habits have fundamentally changed—and likely for good … But a year and a half of isolation and our increasing reliance on e-commerce left many wanting more, and a crop of independent business owners seemed to sense a desire to return to something more local: the neighborhood market."

    The story profiles several Los Angeles stores that seem to be touching the human desire for connection, "each one an intimate retail space focused on community and driven by a strong sense of personal narrative."

    It is a story totally worth reading, here.

    Published on: July 26, 2021

    The Associated Press has a story about how "the landscape of a post-pandemic workforce is changing and depending on an unexpected demographic – teens.

    "Teenagers have become one of the largest segments of the working population. The Associated Press reported that, in May, 33.2% of teens ages 16 to 19 were in the national workforce, the highest figure for teen workers since the Great Recession of 2008."

    The reason?  While some people are concerned about going back to work because they're worried about getting sick, or have child care or elder care responsibilities that became more clear during the pandemic, or for the moment are making as much not working as they could working, there is one demographic - teens - that its willing and able to work.

    "Teens have an impact on the industry because they are willing to come in and work jobs that not everyone is willing to work in,"  John Longstreet, president and CEO of the Pennsylvania Restaurant and Lodging Association, teaks the AP. "It's a win-win scenario. It gives a young person an opportunity to make some money, get good work experience, and it helps fill the labor gap that we are facing."

    KC's View:

    One of the great advantages of hiring teens is that it reflects a community orientation that always works to the business's advantage in the long-term.  It creates a literal sense of family, and that's a good thing.

    Published on: July 26, 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 US Covid-19 coronavirus numbers:  35,199,465 total cases … 626,762 deaths … and 29,511,909 reported recoveries.

    The global numbers:  194,967,707 total cases … 4,178,305 fatalities … and 176,888,707 reported recoveries.  (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 69 percent of the US population age 18 and older has received at least one dose of vaccine, with 60 percent fully vaccinated.  The CDC also says that 66.4 percent of the population age 12 and older has gotten at least one dose of vaccine, with 57.4 percent fully vaccinated.

    •  The Associated Press quotes Dr. Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases, as saying that "'the United States is in an 'unnecessary predicament' of soaring COVID-19 cases fueled by unvaccinated Americans and the virulent delta variant.

    "We’re going in the wrong direction, Fauci said, adding that "recommending that the vaccinated wear masks is 'under active consideration' by the government’s leading public health officials. Also, booster shots may be suggested for people with suppressed immune systems who have been vaccinated, Fauci said … He noted that some local jurisdictions where infection rates are surging, such as Los Angeles County, are already calling on individuals to wear masks in indoor public spaces regardless of vaccination status."

    “This is an issue predominantly among the unvaccinated, which is the reason why we’re out there, practically pleading with the unvaccinated people to go out and get vaccinated,” Fauci said.

    •  Bloomberg reports that "a growing number of public-health experts are urging the Centers for Disease Control and Prevention to recommend that even fully vaccinated people wear face masks in public amid the resurgence of virus cases fed by the Delta variant … CDC Director Rochelle Walensky said July 22 that the organization was sticking with its recommendations that fully vaccinated people don’t usually need masks, while allowing that wearing one may have some advantages."

    “Communities and individuals need to make the decisions that are right for them based on what’s going on in their local areas,” she said. “You get exceptional protection from the vaccines, but you have the opportunity to make a personal choice to add extra layers of protection if you so choose.”

    I've started wearing a mask again when I go to stores.  I'm fully vaccinated, but I know that I could still get Covid-19 and, even if asymptomatic, spread it to other people.  Which I am determined not to do to the best of my ability.

    •  The Wall Street Journal reports that "Florida is recording more Covid-19 cases than any other U.S. state, as hospitalizations in some areas increase at the fastest rate since the start of the pandemic.

    "The state accounts for one in five new infections in the U.S. and logged 73,181 cases over the past week, according to the Centers for Disease Control and Prevention. Florida had 341 cases per 100,000 people over the past week, second only to Louisiana. The weekly total of new cases reported by Florida jumped more than fourfold between July 1 and July 22, reaching its highest point since mid-January.

    "Deaths in Florida totaled 319 over the past week, the most among states, with a rate of 1.5 per 100,000 people, fourth-highest, according to the CDC.

    "Epidemiologists say various factors are at play: large numbers of unvaccinated people, a relaxation of preventive measures like mask-wearing and social distancing, the spread of the highly contagious Delta variant of the coronavirus and the congregation of people indoors during hot summer months."

    •  From the New York Times:

    "After an all too brief respite, the United States is again at a crossroads in the pandemic. The number of infections has ticked up — slowly at first, then swiftly — to 51,000 cases per day, on average, more than four times the rate a month ago. The country may again see overflowing hospitals, exhausted health care workers and thousands of needless deaths.

    "The more contagious Delta variant may be getting the blame, but fueling its rise is an older, more familiar foe: vaccine hesitancy and refusal, long pervasive in the United States. Were a wider swath of the population vaccinated, there would be no resurgence — of the Delta variant, or Alpha variant, or any other version of the coronavirus.

    "While mild breakthrough infections may be more common than once thought, the vaccines effectively prevent severe illness and death. Yet nearly half of the population remains unvaccinated and unprotected. About 30 percent of adults have not received even a single dose, and the percentage is much higher in some parts of the country.

    America is one of the few countries with enough vaccines at its disposal to protect every resident — and yet it has highest rates of vaccine hesitance or refusal of any nation except Russia."

    It is worth noting that from almost the very beginning of the pandemic, Fauci was saying that the US had to keep the daily case rate below 20,000 if we were to have any claim to being in control of the pandemic.  It took us until early summer 2021 to get to that point;  our high, last winter, was more than 300,000 cases a day.  But now we're up in the 50,000-cases-per-day area, and there are two things that we know about that number - it is unacceptable from a public health point of view, and it is almost entirely preventable.

    Published on: July 26, 2021

    •  The New York Times reports that "hundreds of Frito-Lay employees ratified a contract on Saturday, ending a nearly three-week strike over forced overtime and long hours that many workers said had pushed them past the point of exhaustion, union officials said.

    "The agreement, which was ratified in a vote that one union official described as close, puts an end to what workers at the Frito-Lay plant in Topeka, Kan., call “suicide shifts” — back-to-back 12-hour shifts with only an eight-hour break in between … The workers in Local 218 said they went on strike because the company had refused to address their concerns about the shifts, which they said took away time with their families and did not even allow enough time to get a full night’s sleep."

    “The outcome of this strike was a testament to the tenacity and grit of the Frito-Lay workers in Topeka,” Anthony Shelton, international president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents the employees who are members of Local 218, said in a statement … In a statement, Frito-Lay said the new two-year contract includes a 4 percent wage increase for all job classifications and “additional opportunities for the union to have input into staffing and overtime.”

    •  The Puget Sound Business Journal reports that "Starbucks Corp. announced Friday it will donate $100 million toward hunger relief over the next decade and that the company reached another milestone for its food share program.

    "All U.S. company-owned stores, nearly 9,000, are now participating in Starbucks’ FoodShare donation program, up from 60% two years ago. Starbucks began the program in 2016 in partnership with Feeding America. Since then, the Seattle-based coffee chain has donated more than 33.7 million ready-to-eat meals to local food banks across the nation.

    "In addition, Starbucks is donating another $1.7 million to Feeding America, building on the $2.69 million it has already donated to food bank mobile pantry programs since 2019. The new funding will be distributed to 16 food banks where Starbucks Community Stores are located — in neighborhoods that are experiencing high rates of food insecurity."

    •  From the Washington Post:

    "Crocs is suing nearly two dozen companies, including Walmart and Hobby Lobby, alleging they copied the 'iconic design' of its ubiquitous clogs.

    "In four lawsuits filed last week, the Colorado-based manufacturer claims the knockoffs infringe on its trademark for the distinctively clunky $50 shoes made with buoyant foam and ventilation holes that can be adorned with charms.

    "'These actions underscore our determination to take forceful steps to protect our trademarks and other intellectual property,' the company’s chief legal officer, Daniel Hart, said in a statement. 'It is essential that we protect Crocs’ iconic DNA, and we will not tolerate the infringement of our rights or those who try to freeride on the investments we have made in our brand'."

    According to the story, "The litigation builds on a federal complaint Crocs filed in June seeking to block the import and sale of copycat products. The U.S. International Trade Commission last week said it would look into Crocs’s allegations of trademark infringement against more than 20 companies, including sneaker giant Skechers and luxury brand Loeffler Randall."

    Published on: July 26, 2021

    The Irish Times has a lovely obituary for Vincent O’Doherty, who recently passed away at age 85, noting that as the former chairman of the legendary Superquinn chain, "he played a quiet, behind-the-scenes role but was nonetheless a driving force of the expansion of a company whose public face was the ebullient Feargal Quinn."

    Described as "the engineer behind the entrepreneur," O’Doherty in 1972 "became a non-executive director of Superquinn, the start of an almost 40-year association with the company, brought about by his friendship with Feargal Quinn. In 1981, he became executive chairman of the company with responsibility for strategic financial management and all property acquisition and development.

    "He had particular knowledge of shopping centres and, while Quinn was the public face of the business and was adept at reading consumer tastes and trends, it was O’Doherty who provided the outlets - literally - that saw the business, and their partnership, flourish."

    KC's View:

    The thing is, every great entrepreneur is better with an engineer … and every great engineer is better with an entrepreneur.   They are, in fact, better together … and I think it is fair to say that in its heyday, Superquinn was nonpareil when it came to food retailing.  And Vincent O’Doherty was a big part of that.  (And, by the way … ebullient is the understatement of the year when it comes to describing Feargal Quinn.)

    Published on: July 26, 2021

    We had a story the other day noting that Whole Foods has been putting in self-checkout systems in some stores, which I suggested works against its traditional value proposition.

    One MNB reader responded:

    Don't remember how often you go to Whole Foods ....They have self-checkout!!!! At least here in Massachusetts.

    Now, Market Basket seems to be the only hold-out. 🙁

    I actually go to my local Whole Foods, which is a less-than half mile walk from my house, about 4-5 times a week.  This store, at least, still does not have self-checkout.

    On Friday we reported that Instacart announced yesterday what it called the "first phase of the company’s next-generation fulfillment initiative designed to bring automated technology solutions to retailers across the U.S. and Canada," saying that it will work with automation partner Fabric to build warehouses for its retail partners, using them to make the fulfillment process more efficient and effective.

    I commented:

    Instacart is like heroin - and I say that with grudging admiration - in that it is building a system that will relieve retailers of many of the responsibilities of fulfilling e-commerce demands, while simultaneously creating a mechanism that won't need retailers.  It has the customers, delivery systems, and now it is going to have warehouses - which, by the way, will be able to operate as dark stores, selling directly to those shoppers, should relationships go asunder.

    Instacart doesn't need to pick its retail clients' pockets - those clients are simply emptying their pockets and handing everything over to it.

    One MNB reader wrote:

    There is one differential advantage that can’t be taken from retailers and that is their own brands.  If retailers do business with Instacart but elevate their own brand offering through the ecommerce shopping experience, the transition of Instacart to a direct to consumer model may be a bit more challenging.

    Last week we took note of a Wall Street Journal report saying that,  "faced with rising costs for materials, transportation and workers, companies are charging more for products from metal fasteners to Oreo cookies, helping fuel inflation like the U.S. hasn’t seen in more than a decade.

    "As customers accept the price hikes, some big companies said they expect to raise prices even more. Others are more cautious, unsure if U.S. consumers have the appetite to absorb additional increases."

    I commented:

    My sense from talking to a number of retailers is that there is some level of skepticism about some of these price increases.  There's no doubt that the cost of some raw materials is going up, but there's also a suspicion that in many cases, companies are taking advantage of the moment.

    One MNB reader responded:

    The first problem is you spoke with numerous retailers.  Retailers historically feel the manufacturer has hidden pots of money, or that they are in this case gouging the consumer by using covid as an excuse in increase prices.  That feeling, idea, premise, whatever you want to call it is absolute HS.  Every,  bar none, manufacturer that I have ever worked for looks internally to cut costs before they go the final step and increase prices.  Herein lies one of the fundamental issues between retailers, distributors and manufacturers, retailers con’t understand or don’t want to accept the fact that manufacturers just want to sell their products not sell programs, food shows, shelf space, ad fees, preferential contracts and the list goes on and on and on.  We as manufacturers have one objective, sell our product.   What is so difficult to understand???

    I take your point.

    I was just relaying retailer skepticism, not attesting to its accuracy.

    But I also have a problem with the implication that manufacturers are pure of heart and intent, and that retailers are crafty, duplicitous and manipulative creatures.

    Some of the things that you suggest that retailers are focused on exist in part because manufacturers at least helped to create mechanisms that were less dedicated to selling products than perhaps one would like.

    And finally, this email from an MNB reader and fellow wine lover:

    Thanks for the recommendation of the Occhipinti SP68 wine from Sicily. My wife and I were quite struck with Arianna Occhipinti as well, and plan to visit her the next time we are in Sicily.

    Me, too.  Next time I'm in Sicily.