business news in context, analysis with attitude

Published on: August 26, 2021

School has either started or is about to start in much of the country … which means it is a good time to talk about food education.  MNB always has been big on communicating with shoppers about what food is, where it from, how it is made or grown, and what the benefits are.  KC offers some suggestions about how that kind of communication can have tangible benefits, creating an ongoing relationship between store and shopper.

Published on: August 26, 2021

TechCrunch reports that Target-owned delivery service Shipt that is allowing online customers to identify and work with preferred personal shoppers when they place orders.

According to the story, "This 'Preferred Shoppers' feature will be available as a membership-only perk at no extra charge, offering customers what Shipt believes will be a more reliable shopping experience, where more of members’ orders are directed toward people they already know and trust to do a good job … customers who rate their shopper with five stars after their order is complete will be presented with the option to add the shopper to their Preferred Shoppers list. If the shopper accepts this request, they’ll be prioritized to shop for those customers in the future. (If the shopper declines, however, that won’t be shown the customer.) This list can be edited at any time, and if a customer downrates a shopper on a future order, they’ll be removed."

The story notes that the new program won't just be good for customers:  "The feature could also motivate shoppers to focus on building up a quality clientele, so they have a better shot at being assigned orders from customers they enjoy working with and where they could expect to see higher tips. Over time, as customers add more shoppers to their Preferred Shopper list, the likelihood of being paired with a highly rated shopper would improve, too. This could perhaps help to address some gig workers’ complaints over their work being undervalued, where bonuses are placed out of reach and customers are stingy with tips."

Published on: August 26, 2021

Internet Retailing has an interesting piece about a new format Ikea store in Shanghai that, if successful, could be rolled out to other markets starting next year.

The format, described as "interactive and intuitive," is seen as "a move away from its traditional out-of-town warehouse format, and is part of a global transformation as the business adapts to changing customer demand and equips itself for the future."

Here's how Internet Retailing describes the store:

"Digital services from Scan and Go to self-checkout and mobile food ordering sit alongside a series of new dedicated hubs in the newly renovated Shanghai Xuhui store.

Shoppers can register for events and book for design advice online, as well as using their own mobile devices to scan items – for more information or to add them to their basket – as they move around the store before using self-checkout to buy.

"Customers at the new look store can ask local experts for advice at a maker’s hub, where they can make and repair items or work on their own circular design projects. A design hub also features in-store advice, workshops and exhibitions, while a food hub offers the opportunity to test new ideas, such as urban farming. Each will function as a community hub, offering, says Ikea, 'everything from cooking and yoga classes to home furnishing workshops, while staying true to Ikea’s mission to create a better life at home within the limits of the planet.'

"The new store also moves away from the typical journey that leads shoppers through every part of an Ikea shop, with tills at the end the journey. Now, shoppers can get to a till to pay at any point. Play areas remain a key part of the design, as do restaurants and other food options.

Published on: August 26, 2021

Bloomberg has a fascinating story about how Target is working to recalibrate its relationship with Black communities in America, to "face pain with purpose,” in the words of CEO Brian Cornell.

In the wake of the murder of George Floyd in May 2020 by a policeman in Minneapolis, Target's hometown, the story says, "a lot of U.S. companies are evaluating their relationships with the Black community, but Target is grappling with a particularly raw set of challenges, especially in its hometown of Minneapolis. In a city with a legacy of racial segregation and police brutality, a yawning income gap between White and Black residents, and disproportionately high rates of arrest and incarceration of Black men, the unrest was in part born of a deeper pain that began well before a police officer took Floyd’s life - and that pain bears Target’s label as well, say community activists, academics, and even some former law enforcement and city officials."

You can read the entire piece here.

Published on: August 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:  39,157,249 total cases … 649,680 deaths … and 30,678,283 reported recoveries.

The global numbers:  214,935,638 total cases … 4,480,549 fatalities … and 192,254,119 reported recoveries.  (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 71.3 percent of the US population age 12 and older has received at least one dose of vaccine, with 60.5 percent being fully vaccinated.

•  From the New York Times:

"More people in Florida are catching the coronavirus, being hospitalized and dying of Covid-19 now than at any previous point in the pandemic, underscoring the perils of limiting public health measures as the Delta variant rips through the state.

"This week, 227 virus deaths were being reported each day in Florida, on average, as of Tuesday, a record for the state and by far the most in the United States right now. The average for new known cases reached 23,314 a day on the weekend, 30 percent higher than the state’s previous peak in January, according to a New York Times database.

"Across the country, new deaths have climbed to more than 1,000 a day, on average.

And hospitalizations in Florida have almost tripled in the past month, according to federal data, stretching many hospitals to the breaking point."

•  The Wall Street Journal reports that "federal regulators are likely to approve a Covid-19 booster shot for vaccinated adults starting at least six months after the previous dose rather than the eight-month gap they previously announced, a person familiar with the plans said, as the Biden administration steps up preparations for delivering boosters to the public.

"Data from vaccine manufacturers and other countries under review by the Food and Drug Administration is based on boosters being given at six months, the person said. The person said approval for boosters for all three Covid-19 shots being administered in the U.S.—those manufactured by Pfizer Inc. and partner BioNTech SE, Moderna Inc. and Johnson & Johnson —is expected in mid-September."

•  From the Washington Post:

"More than 100,000 people are hospitalized with covid-19 in the United States, a level not seen since Jan. 30 — when coronavirus vaccines were not widely available — as the country grapples with the delta variant’s spread.

Hospitalizations are highest across the South, where every state in the region has a higher portion of its population currently hospitalized with covid-19 than the national level, according to a Washington Post database. More than 17,000 people are hospitalized with covid-19 in Florida, which has the most hospitalizations for covid-19 of any state in the country, followed by Texas, which has more than 14,000.

"Amid a raging debate over mask requirements in schools, current pediatric hospitalizations for covid-19 have reached 2,100 nationally, topping 2,000 for the first time since August 2020.

"New coronavirus cases are being reported across the country at similar levels to those seen in January. About 151,000 new daily cases were being reported on average on Jan. 30; on Wednesday, that figure was 148,000. However, even as many hospitals are under strain and report shortages of intensive care unit beds, overall deaths are far lower; the daily average of deaths at the end of January was 3,100 and about 1,100 as of Wednesday."

•  The Wall Street Journal reports that Delta Air Lines has decided to impose a $200 monthly health insurance surcharge on employees who have not been vaccinated.  The company's punitive approach to unvaccinated employees - taken since the US Food and Drug Administration (FDA) gave full approval to the Pfizer vaccine - also includes the possibility that employees could "lose pay protection for missing work due to the disease."

The Journal writes that "the moves reflect a new front in companies’ efforts to keep employees safe and working. Until now, many employers had used incentives, such as cash bonuses, to motivate workers to get vaccinated, or have mandated vaccinations.

Delta’s approach instead focuses on the financial burden of Covid-19 and aims to transfer it to those resisting vaccination. Studies show vaccination greatly reduces the risk of severe disease or death from the disease."

Published on: August 26, 2021

With brief, occasional, italicized and sometimes gratuitous commentary…

•  Bloomberg has a piece about Enjoy Technology, described as "a startup that operates mobile retail stores focused on selling and helping users set up technology products."

What makes Enjoy interesting is that its founder is Ron Johnson, who soared when he ran Apple's retail business (and, to be fair, crashed in spectacular fashion when he later ran JC Penney).  One of the companies that Enjoy works with is Apple, partnering with the company in eight markets;  experts say that the Apple relationship represents a $4 billion opportunity for Enjoy, as it expands around the country.

Enjoy Technology sounds like a kind of mobile Genius Bar, offering free delivery, installation and even consulting services that are underwritten by the retailers with which it works.  It is a really smart idea, I think, which is at least part of the reason that it is going public via a merger with a special purpose acquisition company, or SPAC.

While Enjoy may be working with a number of retailers now, I have to wonder if there is an acquisition in its future - Apple could decide that it wants to own the at-home experience to a greater degree.  That could mean that it would purchase Enjoy.  Or, it could create its own at-home service, which would be bad news for Enjoy.

Published on: August 26, 2021

•  The Wall Street Journal reports that "Best Buy Co. executives say the electronics retailer has stocked up on enough goods to handle holiday sales demand this year despite supply-chain disruptions that have undercut the retail sector’s inventory restocking efforts … Executives said the retailer has pulled forward orders for goods earlier than normal and added to its transportation purchasing to rebuild inventories that were depleted over the past year by pandemic-related disruptions."

The story notes that "retailers have struggled to maintain inventories to meet roaring consumer demand for goods during the pandemic and merchants continue to face shortfalls on shelves as raw materials shortages among suppliers and persistent bottlenecks at ports and other shipping operations have locked up supply chains."

Published on: August 26, 2021

We referenced a story the other day from the Wall Street Journal about how "drought is blistering key U.S. cash crops, further elevating prices for staples including corn and wheat … Extreme heat is baking most of the U.S. North Dakota, South Dakota, Minnesota, Iowa and Nebraska all contain areas of extreme drought, according to data from the U.S. Drought Monitor. North Dakota and Minnesota, in particular, are experiencing near-record lows in soil moisture, according to data from the National Oceanic and Atmospheric Administration.

"As a result, many crops planted this spring are wilting. Some 63% of the U.S. spring wheat crop is in poor or very poor condition, versus 6% at this time last year, according to Agriculture Department data."

I commented:

While lousy weather and drought are part of a natural cycle, the concern that scientists seem to have is that the extended problems being suffered in agricultural regions around the world may have a permanent impact on the cost and availability of basic foods on which we rely and even have taken for granted.

Which, clearly, will have an impact on the retailers who sell these products and the consumers they serve.

But one MNB reader wanted to weigh in:

I spent hours driving from Wisconsin through Illinois Indiana and Ohio over the past 2 weeks, corn and bean crops looked wonderful every where I looked, no issues with those crops.

Another MNB reader responded:

Your reader who conducted a crop tour of WI, IL, and IN needs to head west into Iowa where we are truly in a drought condition…….there are areas of the state where rainfall totals are currently more than a foot below what a normal year’s rainfall would be. 

Even if you are a city dweller, you can see brown, burned up lawns and trees that are shedding leaves early.   At the very least, I believe we’ll be looking at reduced corn and soybean yields in many places as the crops mature early due to the lack of moisture previously during the growth stage.   It could be the difference between farmers having just a good or mediocre year rather than a great one. 

Another MNB reader wrote:

Just go 500 miles to the west and it may be a whole different story.

And from another:

The weather patterns over the past couple years have shifted more precip to the eastern part of the country and that includes snow pack as well.  Unfortunately the mid west / west are the areas that produce the majority of grain crops.  You can't grow hay in downtown NY.

So now here we are.  Less precip.  Greater population growth.  More pressure from expanded irrigation. Increased pollution due to wild fires and voila!  Drought.  How can it be fixed?  That is the multibillion dollar question.

And still another:

We have a serious drought here in Minnesota, the whole state is in some form of a drought. In northern Minnesota we have a 20,000 acre forest fire … I could smell the smoke in my house when I woke up yesterday and I am 100 miles from it. 

We have a lot of Hmong farmers here in central and southern Minnesota, they came over after the Vietnam war in the 70's and 80's, they were farmer in in their home land and now here. They are micro farmers, they rent land, 5, 10 15 acres grow their crops and sell them at the farmers markets and some of our local stores, they are great farmers and introduce Minnesotans to some new veggies, bonus for us. Since they rent the land they can't drill for wells or put in an irrigation system, their crops have been hit hard. They are micro farms, there is no farm program for them to use from the state or federal government, no crop insurance, nothing, they have no safety net unlike other farmers. Our farmer markets and local stores are suffering for it, much local less selection. 

MNB reader Rich Heiland had some thoughts about yesterday's MNB/In Conversation about California food chains:

A few years ago I was in the LA area on client work and pulled into an In-N-Out. (Actually you can program rental cars to automatically pull into any you pass by - an amazing APP! ).

What really struck me was how busy the staff was, not just cooking but cleaning. And, if they were near a door and saw someone coming, they opened it. After I finished my double-double and fries I went in to wash my hands. A staffer was in the restroom and immediately struck up a conversation (not something holders of a ManCard usually get into in a men's room).

He asked me if it was my first time - it was not. How did I like it? Loved it. Did it meet my expectations? Yes, and always. Then I asked him "how do you like working here?" He said he loved it, and what he loved most were the customers. "We don't get a lot of angry people in here." 

By the way, they did start opening in Texas. But, we left Texas in March for West Chester, PA and now that we hav joined you in the East, In-N-Out once again is a rare treat. We miss Whataburger as well.

And from another reader:

Kevin, enjoyed your conversation on California food. As a Southern Cal native, a couple places are worth mentioning… Tito’s Tacos with their famous crispy fried tacos, burritos, enchiladas etc. on Washington Place and Sepulveda Boulevard since 1959…it’s been a UCLA hang out for decades.

The Hamburger Hamlet was an institution for many years but disappeared for a variety of reasons.

A couple of current up and comers are The Habit, originally based in Santa Barbara and my favorite all-time Mexican food joint , Chronic Taco based in OC beach communities.

Hard to beat Southern Cal for Mexican food and great burgers!!!

I vividly remember Tito' Tacos from when I was a student at LMU in the mid-seventies.  I first saw it when driving up the 405 toward Westwood, and would see lines of people waiting to order.  Which told me that I needed to get off at the next exit and see what all the excitement was about.  Which I did.  Often.  And never was disappointed.