business news in context, analysis with attitude

Published on: August 18, 2021

A visit to the point in Massachusetts where the Mayflower first viewed land (though it didn't actually stop there) suggest to KC a metaphor about how important it is not to have such tunnel vision that one cannot see options and opportunities that present themselves.

Published on: August 18, 2021

The New York Times reports this morning that "Amazon has eclipsed Walmart to become the world’s largest retail seller outside China." according to estimates compiled by financial research firm FactSet.  The Times writes that "Wall Street firms had been expecting this retail baton to change hands in the coming years. But the pandemic accelerated the timeline, as people stuck at home relied on deliveries. Walmart’s sales rose sharply during the pandemic, but it has not matched Amazon, which has added hundreds of new warehouses and hired about 500,000 workers since the start of last year."

The story notes that "Alibaba, the giant online Chinese retailer, is the world’s top seller. Neither Amazon nor Walmart is a dominant player in China."

The Times also points out that "Walmart is still the largest private employer in the United States, with 1.6 million workers. And it sells more in the United States than Amazon, though J.P. Morgan estimates that Amazon will surpass Walmart in the United States next year."

More from the Times story:  "The quest to dominate today’s retail environment is being won on the internet. And no company has taken better advantage of that than Amazon. Indeed, the company’s delivery (many items land on doorsteps in a day or two) and wide selection first drew customers to online shopping, and it has kept them buying more there ever since."

Published on: August 18, 2021

As Covid-19 infection numbers linked to the Delta variant continue to grow, trade shows are beginning to take notice and respond, making proof of vaccination a virtual requirement for attendance.

Yesterday, the National Grocers Association (NGA) released a statement saying that at its upcoming Las Vegas show, "all participants, staff and vendors must show proof of full vaccination for COVID-19 OR show a negative COVID test taken no more than 72 hours from the event. Testing services will be available on site."

NGA already had established that it would be following Las Vegas mask mandates will be required indoors for all participants and vendors.

The NGA Show is scheduled to take place in L:as Vegas September 19-21.

Meanwhile, Groceryshop, which is scheduled to take place just a few blocks away from the NGA Show at virtually the same time, released a statement saying that it "will require all attendees, sponsors, staff and vendors at the event to either show proof of vaccination or a negative Covid test taken within 48 hours of arrival. Results will be uploaded to a third-party verification app that will be made available two weeks before the event."

This appears to be a new reality that trade show organizers seeking as being in place for the long haul.  Even as NGA and Groceryshop were making their announcements for shows taking place a month from now, the Consumer Technology Association (CTA) announced that the CES 2022 technology show, scheduled to take place in Las Vegas on January 5-8, 2022,  also "will require in-person attendees to provide proof of COVID-19 vaccination."

Unlike the other two, though, CTA said it is "assessing the acceptance of proof of a positive antibody test as an alternative requirement and will share more details on this later."  

CTA also said that it is planning to offer "a digital event that will run in parallel with the in-person program," as it did last year.

Published on: August 18, 2021

Walmart was out yesterday with its second quarter results, reporting that total revenue was $141.0 billion, up 2.4 percent compared to the same period a year ago," negatively affected by approximately $8.9 billion related to divestitures."

The retailer said that "US Q2 comp sales1 grew 5.2%," as "U.S. eCommerce sales grew 6% and 103% on a two-year stack."

Walmart said that "consolidated operating income was $7.4 billion, an increase of 21.4%, with strength across the company."

In its analysis, Bloomberg writes that "Walmart Inc.’s pandemic-driven gains in e-commerce slowed last quarter and profit margin fell, raising questions about the retailer’s ability to maintain momentum even after it topped Wall Street’s sales expectations … Online orders contributed only 0.2% to Walmart’s U.S. comparable sales gain in the quarter, compared with 6% a year earlier."

CNBC writes that "Walmart is gaining market share in grocery again, according to Nielsen data, as consumers return to old habits. Its food sales grew $2.4 billion versus a year ago, as Walmart attracted shoppers with lower prices and better managed to keep produce, meats and more in stock."

The Associated Press writes that "company executives told analysts Tuesday that shoppers went to stores for items like party supplies, luggage and clothing. For back-to-school, customers bought backpacks and paper supplies in addition to fashion."

Published on: August 18, 2021

The US Department of Commerce said yesterday that retail spending dropped 1.1 percent in July compared to the month before, "amid cooling purchases of goods and signs of some pullback in consumer demand as U.S. Covid-19 cases tied to the Delta variant rose," the Wall Street Journal reports.

The numbers include purchases at stores, at restaurants and online, as well as automobiles - the latter category being the one that, because of supply chain issues that hurt supply, really dragged down the overall number.

Without autos included, retail sales for the month were down 0.4 percent.

Restaurants and bars had a good month, with sales rising 1.7 percent.

Online sales were down 3.1 percent.

The Journal writes that "retail sales rose briskly earlier in the summer, as shoppers boosted spending on services, such as dining out and traveling, and away from goods. That shift occurred as more Americans became vaccinated and state and local governments eliminated many Covid-19-related restrictions, some of which have now been reimposed with the recent rise in coronavirus cases."

Published on: August 18, 2021

Business Insider has an interesting story about how a deli in Melbourne, Florida, has drawn social media criticism for a sign referring to minimum wage workers as "mediocre."

Here's how the story is framed:

"The sign notes that the deli is hiring for all positions and reads, 'Minimum wage equals mediocre person.'

"The sign also details expectations for workers at various levels of its pay scale.

"The deli says $9 an hour is for workers who are in their first job and 'willing to learn.' For workers who have 'some experience,' the deli would pay $10 an hour. Staff making $11 an hour should be 'reliable' and 'multi-taskers,' according to the sign. For $12 an hour, the deli expects that an employee 'works like 2 people.' At that hourly wage, the deli also wants workers to be 'better than most' and bring 'zero drama' to the workplace.

"The sign says workers making $13 an hour should be 'supervisory material.'  At $14 an hour, the deli wants a worker who 'cares like the owner does' and 'brings positivity to the environment.' For $15 an hour or more, the deli expects an employee who 'outshines and outperforms the owner'."

The story notes that after the sign went viral and the deli was barraged with social media criticisms, the sign was taken down.

"The manager of our Melbourne, FL, location did post a sign with the intent of letting prospective applicants know that we encourage upward movement for all of our employees through our Career Path," Jason's Deli President and COO Ragan Edgerly told Insider. "While the pay scale does reflect the average starting pay rate in that market, the descriptions used do not accurately reflect Jason's Deli's hiring practices and the sign was immediately removed."

Published on: August 18, 2021

Fast Company has an excellent piece in which it considers a question that is being pondered by food scientists and no doubt is vexing retailers, suppliers, and consumers alike:

If a food is biologically identical to dairy - meaning people with whey allergies will want to avoid it - but it’s made without animals . . . is it vegan?

Fast Company writes: "Emerging technologies like animal-free animal proteins are likely to complicate the conversation even further. Well-funded tech startups around the world are hustling to make cell-based—also called cultured, cell-cultured, cultivated, clean, and lab-grown—meat made by growing animal cells in a nutrient-dense medium outside the body of an animal. The idea behind these innovations, of course, is to create a delicious, perfect meat simulacrum without having to harm any living animals. Which begs the question: Is cell-based meat, then, inherently vegan?"

You can find the answer - as best as one can be arrived at - here.

Published on: August 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 US, there now have been a total of 37,896,582 Covid-19 coronavirus cases, resulting in 640,093 deaths and 30,289,989 reported recoveries.

Globally, there have been 209,383,410 coronavirus cases, with 4,394,784 resultant fatalities, and 187,671,664 reported recoveries.  (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 70.1 percent of the US population age 12 and older has received at least one dose of vaccine, with 59.5 percent being fully vaccinated.

•  Bloomberg reported that "the number of people getting a first dose of a Covid-19 vaccine has risen to almost half a million a day, a level last seen at the end of May when the U.S. vaccination campaign was still in full swing in much of the country.

"Unlike the spring rollout, however, the new bump in vaccinations has been driven by counties in the South, which earlier in the year were among the most resistant to getting the shots and still have lower rates of vaccination than many other places.

"Those regions, however, have been hit by a fast-moving wave of Covid infections that have sent thousands of people to the hospital."

•  The Wall Street Journal has conducted its own analysis of the national infection numbers, concluding that "the Delta variant of the Covid-19 virus appears to be breaking through the protection vaccines provide at a higher rate than previous strains … though infections among the fully inoculated remain a tiny fraction of overall cases, and symptoms tend to be milder."

According to the story, "At least 11 states including California and Mississippi counted more than half of their reported breakthrough cases between July 1 and early August, suggesting that the rise of Delta was causing more breakthroughs than earlier strains. In at least six states including Maryland and Minnesota, more than a third of breakthrough cases were reported during that period."

And, the Journal goes on:  "Health officials say the milder cases are evidence that the vaccines are working well, though they add some people have misinterpreted the higher rate of breakthroughs with the Delta variant as proof that they are ineffective."

•  The Associated Press reports that "federal officials are extending into January a requirement that people on airline flights and public transportation wear face masks, a rule intended to limit the spread of COVID-19.

"The Transportation Security Administration was scheduled to enforce the rule until Sept. 13. An agency spokesman said Tuesday that the mandate will be extended until Jan. 18.

"The TSA briefed airline industry representatives on its plan Tuesday and planned to discuss it with airline unions on Wednesday. The mask rule also applies to employees on planes and public transportation."

•  The Los Angeles Times reports that "San Diego County officials called on employers Monday to require their workers to get vaccinated against COVID-19 or receive a weekly test.

"The recommendation would apply to public and private employers as well as nonprofits. It’s the latest measure local officials have taken to combat a wave of infections and hospitalizations driven by the fast-spreading Delta variant of the coronavirus."

The Times makes the point that the recommendation only is as good as employers are willing to do the intelligent thing and follow it.

•  From the New York Times:

"Facing a continuing increase in coronavirus cases, Los Angeles County said Tuesday that it would require masks be worn at large outdoor concerts and sporting events that attract more than 10,000 people.

"The new regulation, which takes effect at 11:59 p.m. on Thursday, means that people attending the Hollywood Bowl and Dodger Stadium, as well as outdoor music festivals and what the county describes as “mega events,” will now have to wear masks. The rule will apply to people regardless of their vaccination status.

"People will be allowed to slip off their masks when eating and drinking, but only briefly."

•  MediaPost writes that about Clorox, in producing commercials for the back-to-school season that feature teachers and students back in the classroom but wearing masks, seems to have scored a win with consumers even as school mask policies in some geographic area create controversy.

The high ratings are based on viewer attentiveness, as ranked by an organization that ranks such things for brands.

“Rooted in key parent insights, we set out to capture the joy and optimism of a new school year by celebrating teachers who are helping to create safe and supportive places to learn,” a Clorox spokesperson tells MediaPost. “We made a decision to air the creative produced with masks in accordance with CDC guidance.”

Published on: August 18, 2021

•  Fast Company reports that 7-Eleven "has announced a collaboration with Minibar Delivery, an independent marketplace for alcohol delivery, that will see select stores in Florida, Texas, and Virginia offer beer and wine delivery direct to customers’ homes. In addition to alcoholic beverages, the new pilot program will also allow 7-Eleven customers to order snack hits such as Slurpees, Big Bite Hot Dogs, chips, and pizza.

"7-Eleven says 600 stores will take part in its alcohol delivery pilot. That includes stores in Orlando, Tampa, Fort Myers, and Miami in Florida; San Antonio, Dallas, Austin, and Fort Worth in Texas, and Virginia Beach, Richmond, Norfolk, and Alexandria in Virginia, with additional markets to come later this year. Alcoholic deliveries will, of course, be limited to those 21 years old and above."

Published on: August 18, 2021

•  Iowa-based Fareway announced that Garrett S. Piklapp, the company's Executive Vice President/Secretary/General Counsel , has been promoted to the role of president.

In addition, the company said that Michael (Mike) J. McCormick, executive vice president of merchandising, has been named Chief retail Officer.

And, Jacob (Jake) W. Moran, Senior Vice President Finance and Accounting at Fareway, has been named CFO, succeeding the retiring Craig A. Shepley, who is leaving the company after 36 years.

Published on: August 18, 2021

Yesterday we took note of a Wall Street Journal 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.

One of the points he made was about how "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."

I commented:

To me, this represents what is missing from many food stores.  Too few retailers put an emphasis on empowering employees to have a conversation with customers, addressing the issue of massive choice in a way that creates both simplicity and opportunities.

And, like at The Container Store, this can be an investment that builds sales and profits.  It isn't just a cost.

One MNB reader responded:

I read with interest your blurb about The Container Store.  Way back when I was a college student, I attended a lecture by their then CEO.  I was thoroughly impressed with how they treat their employees, and how they view their customers.  This mindset you describe in your article doesn't surprise me one bit.  You also said that supermarkets need to do the same thing, allow, even encourage employees to interact with customers and to help with buying decisions.  My counter to that is, first the supermarkets need to hire people who are capable of doing that.

My brother is now a retired college professor, before that he was a Meat Market manager for a major grocery chain.  He was a certified master meat cutter. At that time there were three levels of meat cutters, trainee, journeyman and master.  Most didn't get past journeyman, he wanted the extra money for being a master meat cutter so he went through that program.  Seriously, to this day he can go through a meat counter and pick out the store's mistakes, he can look at the rib eyes and tell what rib each one came from.  The problem is that fewer and fewer stores actually cut meat in store.  He went through training when they still bought sides and quarters, then broke them down.  He knows the two predominant meat grading systems we use in this country.  As a result, he and others like him were able to help customers make good choices in their meat purchases, he was also able to give them new ideas about preparation, how to grill, broil or otherwise cook what they bought.  I don't see much of that anymore, in any of the specialty departments.  Back in the day, I knew product managers with the same kind of knowledge, now they are glorified stockers.

Another area the food manufacturers and processor may be missing the boat a bit.  Our population is getting older, at least I know I am.  Many of us older people still enjoy cooking.  Many of us live alone or maybe with a spouse.  The package sizes of many products are meant for larger families, not families of 1 or 2.  Plus, as we get older, our hands may not be as strong as they once were.making it more difficult to open cans and packages.

What I personally would like to see is products, ingredients in sizes meant for single servings for one or two people, that are easy for older arthritic hands to open. I'm thinking that regardless of what nationality one is, there will be a market for such products.

But, first I think supermarkets could use a lot of people who know something about the products they are selling. In our haste to learn shopping trends, and compile data about our shoppers, we've forgotten that each shopper is an individual with individual needs.  Our demographics are changing, until last year, fewer people cooked anymore, last year forced some to learn.  It was the first time I ever saw stores run out of yeast and baking soda, ever.  But then, I saw lots of things for the first time last year. Who knows, I may write a book about being on the front lines in a pandemic.

From another reader:

Bottom line, customer service in retail stores is disappearing.  How many times have you asked a simple question like where is the salsa and gotten a blank stare?  The knowledge or training about the stores is incredibly lacking. That is if you an even find someone. 

Regarding the new Taco Bell format designed to ben faster and frictionless, one MNB reader observed:

Chick-Fil-A seriously has the best and fastest pick up system.  Plus, they still maintain the personal touch.  My question to Taco Bell would be, what if what you get the wrong order or missing pieces of an order?  How would that get remedied?  We’ll see how well this concept goes.

MNB reader Henry Stein weighed in on another story:

In reading your comment about the closing of Russo’s, I wanted to also note the announced closing of a true institution, Kowloon in Saugus MA.

Following 70 years of consistent successful ownership by the Wong family, Kowloon became more than a restaurant; a virtual entertainment palace with names through the years like Phyllis Diller, Frankie Avalon and Jerry Seinfeld and popular musicians performing as well. Sports heroes (and professional wrestlers) were regulars. 

Boston locals are already lamenting the upcoming loss of this famed establishment that knew what customer service was. Tough loss in this north Boston neighborhood. 

And finally, regarding my FaceTime video yesterday about Apt, the Cape Cod restaurant where the owner actually closed down for a period of time because the staff, in her judgement, needed time off to recover from abusive customers, one MNB reader wrote:

Thank you for sharing your experience and hats off to the owner for protecting her staff. “Be Kind” is my new mantra and I share it with anyone and everyone. It takes so much more effort and energy to be angry and say hateful things than to just smile. And all that negativity just breeds more negativity. I go back to a lesson I learned many years ago – “shadow of a leader”. And while movements can start from the ground up, until our leaders start acting like adults and treating each other with kindness, it’s going to be a long, hard battle upwards.

I totally agree.

MNB reader Joe Axford wrote:

Absolutely fantastic FaceTime KC, you were spot on about some customers - and the owner of Apt did absolutely the right thing. I'd be proud to work for someone like her!

And, finally, this email from MNB reader Deb Faragher:

In reading today’s MNB, I was struck by the juxtaposition of a few of the stories.  First, It was great that you visited Apt to experience it firsthand.  It is so disappointing to see the deterioration of social interaction and, as you said, sad that you’re not sure we’re living in a world where shame matters.  What a sorry state that this has to be a topic for discussion.  I agree that we need to treat each other with a level of decency.  

On that subject of customer interaction, the story of Taco Bell’s new concept being “frictionless” and “contactless”, even with the  2-way audio and video technology that allows customers to interact with team members, seems to be in contrast with the Container Store recognizing that stocking the store comes at the expense of customer interaction.  As the CEO stated, changing the replenishment function allowed them to put more people on the floor.  That allows them the time to have a conversation, understand the lifestyle of the customer and help identify what the customer is looking for.  Oh, and that interaction produced a double-digit increase in the average transaction.  That says a lot right there about how valuable that front line associate is.

These are two very different businesses, I understand, but it’s interesting to see efforts to move toward contactless experiences in some, and finding ways to increase customer interaction in others.  As you continually point out, companies need to be looking at all aspects but, as always, it has to be geared to making the customer experience one that will keep them returning.  Maybe some of the unruly and unappreciative customers of today will appreciate those contactless options.