business news in context, analysis with attitude

Published on: August 17, 2021

by Michael Sansolo

I’ve heard it said that the easiest ways to get really rich are, in no particular order: get born into the right family or discover that your house is sitting on top of oil.

I prefer to seek a third option, which is to find an unsolved problem and solve it. That seems far more achievable to me and probably to most.

With that in mind, I was interested to read a recent article in the Washington Post about how a number of retailers - from JC Penney to Zappos - have focused on solving what may be a multi-billion dollar problem. That is, creating clothing choices for people with special needs.

As the article explains, it’s estimated that 25 percent of American adults or 60 some million people have some kind of special need and there are millions more children with similar issues. And these people might have all manner of problems with traditional clothing choices from sensitivity to tags, seams and specific fabrics or the simple need to conceal medical devices such as feeding or breathing tubes.

The upshot of all of this is the belief by industry experts that efforts to provide friendlier clothing to this large population cohort is already a billion dollar business that could grow to $60 billion in no time.  As my wife works for a charity that provides social opportunities for people with developmental differences I’ve become aware at just how large and important a market this could be.

I share the happy belief that this population is far from invisible to many supermarkets that, through the years, have found ways to employ and creatively use staffers with developmental issues. It’s a great credit to the industry.

But the point of this column isn’t to talk about one population segment, but rather the endless hunt for opportunity. The food industry more than any other serves all population groups. For that reason, I’m hoping that the recently reported findings from the 2020 census are being studied and considered at length. No matter where you stand politically on the growing diversity of the country, as business people we all need recognize that the shifts in demographics represent challenges and opportunities to business. (Kevin wrote about this topic in Monday’s MNB.)

More than ever, the food industry need understand all the emerging and growing population groups because, as the census made clear, virtually all population growth is coming from these groups. That may mean rethinking assortment and merchandising to ensure your products, services and stores are geared to the population groups you currently serve who, in many cases, are quite different from those you served not many years ago.

It also brings challenges and opportunities when it comes to staffing. We hear many retailers especially, talk about the importance of store staff looking like the communities those stores serve. Based again on what the census found, that means companies are going to have to do a significantly better job of recruiting and retaining Hispanic employees among others.

And a key to that might be ensuring that more members of these emerging groups are in the leadership pipeline in your company.

Certainly, none of this will be easy or will happen instantaneously, but just like those clothing solutions for folks with special needs, the opportunity to build growth in this area seems far too large and important to ignore. And delay at your own risk of being left behind competitors who more quickly learn how to find oil under their communities and a new path to riches and success.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com.

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: August 17, 2021

Remember the restaurant on Cape Cod where the owner had to shut it down for a period of time because some customers were being so abusive to the staff?  Well, KC was dying to know what kind of establishment would elicit such a reaction from patrons … and this is what he found.

Published on: August 17, 2021

The Wall Street Journal had a good piece about Satish Malhotra, CEO of The Container Store, in which the self-confessed former hoarder (who previously was chief retail officer and COO at Sephora) talks about how his new company changed his life - and hopes to change those of its customers.

Early on in his tenure at The Container Store, Malhotra says, "quite a significant amount of staffing was doing operational tasks, stocking, replenishment. That’s important, but it shouldn’t come at the cost of being able to be there for customers. So we optimized the way that we were doing replenishment, doing time studies, finding operational efficiencies.

"We took that labor we saved and put it all back on the selling floor.

"Now we can take the time to have a conversation, understand your lifestyle. Maybe you come in for storage-lid organization, but I’m actually having a conversation with you about baking. Our basket [the average value of a customer’s shopping cart] saw a double-digit increase."

He goes on:  "If you come into a Container Store, maybe you’re new to organization. We have to be able to break it down for you, narrow down choices so you don’t have cognitive meltdown. You have to really take the time to understand what a customer is looking for, or it doesn’t take."

Published on: August 17, 2021

The Boston Globe reports that  Russo's, which has been serving the Watertown, Massachusetts, market for 100 years with an emphasis on fresh fruits and vegetables, will close in the fall.

The reason:  Tony Russo, who has been working there for more than seven decades, is retiring.

On the company's website, there is an explanation:

"Our business began as a small farm in Watertown more than 100 years ago. Every day at Russo's - while surrounded by fresh produce - Tony is reminded of working alongside his grandparents on the farm and later, of working alongside his father and uncle at their wholesale warehouse. Their work ethic became his inspiration. Throughout the years, Tony has worked in all areas of the retail and wholesale business including trimming vegetables, driving trucks, loading and unloading trailers, putting up wholesale orders, sweeping the floor, buying produce and overseeing the most subtle details of the retail store. At any time, customers can find him involved in the displays of the fruits, vegetables, flowers, bakery, deli, cheese and garden departments. His days begin around 3:30 AM and end after 8 PM … Tony deeply appreciates and will truly miss the employees who have worked everyday, sometimes outside in the harshest of weather conditions. These employees represent the backbone and the energy of the Russo’s environment, and their efforts will never be forgotten."

Local sources say the Watertown location is for sale, with expectations that it could be sold for real estate development.

Published on: August 17, 2021

Taco Bell announced that it is breaking ground on a new format - called Taco Bell Defy - that it describes as a "3,000 square-foot, two-story model (that) features first-of-its-kind Vertical Works Inc.-licensed design and technology … The revolutionary pickup experience at the Defy restaurant is expected to be the fastest way ever to get Taco Bell – from cruising into any of its four lanes, to checking in, to grabbing your Taco Bell favorites – it's the frictionless future of Taco Bell."

According to the announcement, the restaurant "reimagines the traditional drive-thru experience with four lanes, three of which are dedicated to mobile or delivery order pickups, providing fast, skip-the-line service for customers who order via the Taco Bell app and third-party delivery services. These three lanes will supplement one traditional lane, easing the flow of traffic and ensuring a speedy experience. All of this will help Taco Bell Defy's footprint, which is smaller or equal to existing store footprints, serve even more customers.

"The Defy concept takes Taco Bell's digital infrastructure to new heights, too. Digital check-in screens allow mobile order customers to scan in their order via a unique QR code, then pull forward for a pickup experience that defies gravity: food is delivered seamlessly and in a contactless manner via a proprietary lift system, while two-way audio and video technology lets customers interact directly with the team members above in real time. The elevated kitchen design will optimize and streamline operations for the benefit of both Taco Bell team members and customers."

Published on: August 17, 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 numbers for the Covid-19 coronavirus:  37,736,986 total cases … 638,798 deaths … and 30,227,302 reported recoveries. 

The global numbers:  208,705,201 total cases … 4,383,786 fatalities … and 187,093,715 reported recoveries.  (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 70 percent of the US population age 12 and older has received at least one dose of vaccine, with 59.4 percent being fully vaccinated.

•  The Washington Post reports that federal officials are "planning to announce that most Americans who have received the coronavirus vaccine will need booster shots to combat waning immunity and the highly transmissible delta variant that is sparking a surge in covid-19 cases, according to four people familiar with the decision.

"The administration’s health and science experts are coalescing around the view that people will need the boosters eight months after being fully vaccinated, according to the people, who spoke on the condition of anonymity to discuss a decision not yet public. The decision is likely to be announced as soon as this week.

"The administration of the boosters would not occur until mid- or late September, after an application from Pfizer-BioNTech for the additional shots is cleared by the Food and Drug Administration, the individuals said.

"The conclusion that boosters will be broadly needed was reached after intense discussions last weekend involving high-ranking officials who scrutinized the latest data from the United States and other countries on the effectiveness of the shots."

Sign me up.  No hesitancy here.  The sooner the better.

•  Bloomberg writes that "the number of people dying with Covid-19 in hospitals is hitting previous highs in some hot-spot states with low-to-average vaccination rates, upending hopes the virus has become less lethal.

"In Florida, an average of about 203 people a day are dying in the hospital with confirmed or suspected Covid-19, matching the state’s November 2020 peak, according to U.S. Department of Health and Human Services data. That’s a daily average of about nine per million residents, the data show.

"Louisiana, Arkansas and Missouri have also seen deaths among patients with Covid-19 soar in the past two weeks.

"Officials had hoped that targeted vaccination campaigns would dramatically reduce the number of fatalities associated with Covid-19. Hospital administrators say the vast majority of Covid-19 patients haven’t been vaccinated."

•  From the Washington Post:

"Nearly 1 in 3 American workers under 40 have thought about changing their occupation or field of work since the pandemic began, according to a Washington Post-Schar School poll, conducted July 6 to 21. About 1 in 5 workers overall have considered a professional shift, a signal that the pandemic has been a turning point for many, even those who did not contract the coronavirus.

"Many people told The Post that the pandemic altered how they think about what is important in life and their careers. It has given them a heightened understanding that life is short and now is the time to make the changes they have long dreamed of doing. The result is a great reassessment of work, as Americans fundamentally reimagine their relationships to their jobs.

"It’s playing out in record numbers of Americans quitting their jobs and a surge of retirements and people starting new businesses."

Published on: August 17, 2021

With brief, occasional, italicized and sometimes gratuitous commentary…

•  Forbes reports that Hudson's Bay Company's decision to "split its physical store operations from its e-commerce side," a move also made by sister company Saks Fifth Avenue, means that "the parent company continues to focus on maximizing the value of its stock price while minimizing the effectiveness of its retailing business."

The story notes that "nearly every other major retailing company in North America has been working hard to integrate its in-store and online sides to make the shopping process easier, both for customers and their own employees. Omnichannel, format neutral, platform agnostic: whatever you want to call it, the ability to service consumers seamlessly has become perhaps the defining characteristic of a successful retailer right now."

The analysis goes on:  "HBC isn’t wrong trying to make its company more valuable and boost its share price. Those are good things. But nothing it is doing is in support of its core business, which is retailing. Splitting up unified brands into separate operating units and repurposing real estate may help the balance sheet but where are the initiatives to build a better retailer?"

Hard to ask the question any better than that.  The retailers that put efficiency ahead of effectiveness are the ones that may find themselves facing as tough road ahead.

•  The Los Angeles Business Journal reports that Amazon "is looking to hire hundreds of workers for its new Amazon Fresh grocery stores set to open in the coming months in La Habra and Cerritos.

"But don’t expect many cashiers to be among an estimated 600 positions available — the stores will be first in California to feature the ecommerce giant’s 'Just Walk Out' technology.

"Shoppers will enter the store using a credit or debit card linked to their Amazon account or scan the QR code in their Amazon app. The proprietary technology detects what products shoppers take from the shelves and keeps track of the selections in their virtual cart.  When done shopping, customers exit the same way they entered, by scanning a QR code or inserting their credit card. The stores will also feature traditional checkout lines where shoppers can pay with cash or cards."

•  Bloomberg reports that "Rivian Automotive Inc., the electric-vehicle startup backed by Amazon.com Inc., is in talks to invest at least $5 billion to build a factory near Fort Worth, Texas, according to a document obtained by Bloomberg News.

"The factory - codenamed 'Project Tera' according to the document - would be able to produce 200,000 vehicles a year and would create at least 7,500 jobs by 2027."

Published on: August 17, 2021

•  Fox Business reports that "Walmart is looking to get in on the action with cryptocurrencies as the United States' largest private employer has initiated a search … for a digital currency and cryptocurrency product lead … The retailer's move comes days after its competitor Amazon announced its own search for a cryptocurrency lead as the e-commerce giant reportedly looks to begin accepting digital currencies as payments for its products 'as soon as possible'."

Published on: August 17, 2021

•  The Wall Street Journal reports that "discount supermarket chain Aldi aims to hire more than 20,000 workers in the U.S. this year as its network grows and as it prepares for holiday shopping, the company said Monday.

"Jobs that Aldi is hiring for include cashiers, stockers and associates at its more than 2,100 American stores and its 25 warehouses. The company will be drawing from a tight U.S. labor market in which openings have recently exceeded the number of people looking for work.

"Against that backdrop, wages have been rising, including for low-skilled workers. Following a recent internal wage rise at Aldi, workers in the new positions will earn a national average of $15 an hour for store jobs and $19 an hour for warehouse jobs, the company said. The jobs come with healthcare and retirement plans and paid time off, Aldi said."

•  There tend to be a lot of stories here on MNB about adapting to new realities … which is exactly what the Boston Globe is talking about in a piece about how Procter & Gamble-owned Gillette is adapting to a world in which razors have lost a little bit of their usefulness.

"It’s safe to say beards were among the winners of the COVID-19 era," the Globe writes.  "Now, with life gradually returning to normal, the world’s largest shaving company is trying to figure out what men’s faces will look like going forward.

"Gillette, with its World Shaving Headquarters in South Boston, has come to embrace the beard … In a well-timed move last year, Gillette released a new line of men’s grooming products named after the company’s founder, King C. Gillette, which includes a line of beard oils and balms. It’s one of many ways the shaving giant is now aiming to reposition itself."

"We’re no longer a wet shave business,” says P&G CEO David Taylor.  "We’re truly a grooming business."

Published on: August 17, 2021

•  CNBC reports that "Amazon confirmed on Monday that Wei Gao, a top grocery executive, is leaving the company.

"Gao most recently served as vice president of grocery tech, product and supply chain. She held a number of roles throughout her 16-year tenure at Amazon, including senior positions on the company’s Kindle and inventory planning teams before becoming a vice president of forecasting."  She also served as then-CEO Jeff Bezos's "shadow from July 2018 to January 2020.

The story notes that Gao’s departure "adds to recent turnover among Amazon’s leadership ranks. Last week, Amazon confirmed that Charlie Bell, a top executive in its cloud business, is leaving the company. Jeff Wilke, CEO of Amazon’s worldwide consumer business, stepped down earlier this year. Wilke was considered a candidate to replace Bezos, who in July handed the role of CEO to cloud boss Andy Jassy.

"Other high-profile female executives have recently departed Amazon. Last March, Maria Renz, who served as Bezos’ first female shadow adviser before becoming vice president of delivery experience, left to join online finance company SoFi. In April, monitoring and security software company Splunk said it hired Teresa Carlson as president and chief growth officer."

•  Healthy food retailer Sweetgreen said yesterday that it has hired Wouleta Ayele, most recently the senior vice president of Starbucks Technology Services, to be its new Chief Technology Officer.

Published on: August 17, 2021

Got the following email from an MNB reader:

First let's talk about Albertsons.  I call on Albertsons and some other chains they own.  I read with interest your blurb about their new "Fresh Pass" initiative.  While it may be a good idea, I have to wonder how successful they will be with it.  I call on 5 major chains in my area, Albertsons which also owns two other chains which I call on.  I also call on Kroger and Winco.  Now, this is subjective to a degree, but it seems that across the board, Albertsons, and the other two chains they own here have higher prices, sometimes, much higher prices than the competition.

A few weeks ago they were running an ad on some meat marinades.  I didn't have the heart to tell them that their sale price was higher than other retailers' regular price.  This happens a lot.  They have a store within walking distance of my house, but I seldom go there to shop, because they are too expensive.  I don't care how convenient they make it, if their prices are too high, I won't shop there.  I am an Amazon Prime customer, and while I have my issues with Amazon, mostly on how they treat employees, I still use them because of the convenience and I generally get a competitive price on what I order.

Second, Covid.  I am fully vaccinated, I got vaccinated as soon as I was able to.  Since I spend several hours each day surrounded by people who I don't know if they are safe or not, it seemed prudent to be vaccinated.  I also had Covid back in January of this year, before I was able to be vaccinated.  I was one of the lucky ones, in that I never required hospitalization.  Though my RN girlfriend told me later I probably should have been in the hospital.  Call me a coward if you want to, I was scared. I had visions of me ending it all alone and on a ventilator, so unless I just had to, I was going to tough it out at home if I could.  I'm still working in the stores 8-10 hours a day, and I wear a mask, every day, because I don't want the Delta variant, and I don't want to pass it to someone else, which is still possible, even vaccinated.

The message behind this is, GET VACCINATED.  Covid is not the flu, it's not a cold.  I had a relatively mild case, and it was far, far worse than the worst case of the flu I've ever had, and in 62 years, I've had it more than a few times.  This was by far the sickest I've ever been.

I'm going to be blunt, my right to do as I please stops short of doing something that harms you.   Think about that.  We have a lot of freedoms, but with those freedoms come responsibilities, to ourselves and to those around us.

I think we are headed to more and more mandates to be vaccinated as a condition of employment.  It wouldn't surprise me a bit if insurance companies make it mandatory to be vaccinated  to have health insurance or make it available at a greatly increased cost.  Other countries may make being fully vaccinated a conditioned of being allowed past customs when we travel.  The area I live in has no more Pediatric ICU beds, yes, that many kids are getting it.  We are fast running out of adult ICU beds.  I personally know of three adults in ICU's on vents who were never vaccinated, because they thought it wasn't important, it wasn't that big of a deal.  I'm sorry to be harsh, but I can't help but think that they did it to themselves, it would have been so easy to prevent.

I know  you probably won't publish this email.  To be honest, I wouldn't blame you if you didn't.  But, when I look around me at what is happening, to adults and children alike I think, "We can do better than this, we can do so much better."

I'm sorry to be on a soapbox here, but, this is the time for us to decide if we are going to be responsible or not.  There are those who for medical reasons, can't be vaccinated.  But for those who can, do it.

Why wouldn't I publish this email?

On Covid, you're playing my song.

On Albertsons … I think the company is in the middle of a transformation.  I'm willing to give it time to see how it works out, though it should be noted that it doesn't have forever.

On another subject, from MNB reader Monte Stowell:

History does repeat itself with Rite Aid buying Bartell Drugs. I remember when Payless Drug stores on the west coast was bought out by Rite Aid. Payless was a powerhouse retailer that had great customer service, great selection of merchandise that was competitively priced, and was a go to retailer for many goods that the customer wanted. Rite Aid came along and raised prices, the merchandising and ads to drive customers into their stores forced people to shop elsewhere. With the loss in volume, store sizes were drastically reduced, and everyday shelf prices became non-competitive. Sadly, I think the once really top shelf retailer, Bartell Drugs, is going down the same road that happened to Payless, and will move Bartell customers to other venues to buy their necessities.