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    Published on: September 15, 2021

    The Brick Meets Click/Mercatus Grocery Shopping Survey for August 2021 is out, reporting that the e-grocery market "generated $8.6 billion in sales … a gain of 4.7% versus a year ago."

    Ship-to-home sales dropped nearly 22% to $2 billion during the period, while the combined delivery/pickup segment grew over 16% to $6.6 billion.

    The survey goes on:  "Compared to one year ago, the number of U.S. households that bought groceries online in August, using any of the three receiving methods, jumped 25% to 69.0 million households. Versus one month ago, the monthly active users (MAUs) for August represented a more modest 4% gain as the rapid rise in COVID cases started at the beginning of July 2021."

    And:  "Monthly active users placed an average of 2.73 online orders during August 2021, down 3.7% versus the prior year, but to put that into perspective, the current performance was 35% above the pre-COVID level in Aug. 2019."

    KC's View:

    These numbers would suggest that the Covid bump that we saw last year largely is being sustained by consumer habits that have become more ingrained.  No surprise here;  I always thought the folks who were predicting a so-called "return to normal" were engaged in wishful thinking.

    Published on: September 15, 2021

    CNBC reports that the Walmart+ membership program, launched a year ago as a response to Amazon Prime, has grown to a membership level of about 32 million US households, according to an estimate from Deutsche Bank.

    The story says that "about 25% of respondents said in June and July that they have Walmart+, Deutsche Bank said. That’s up from prior months, where penetration hovered around 19%. In comparison, about 57% of survey respondents said they belong to competing membership program Amazon Prime, according to the most recent survey.

    "There is significant overlap with the programs: About 86% of current Walmart+ subscribers have Amazon Prime, according to Deutsche Bank’s survey. They have similar demographics, too: About 61% of Walmart+ members earn an annual household income of more than $50,000, and 33% make $100,000 or more per year, versus 63% and 28% with Prime members, respectively."

    KC's View:

    That's a pretty strong number for a program that is barely a year old, though I'm a little surprised that experts are seeing a "significant overlap" between it an Amazon Prime.  I still think that Amazon Prime is a more compelling offering - I'm a big prime Video fan, and become more so with every announcement of a major production.  Walmart isn't even playing on that same territory.  But it is a big country, there are a ton of Walmart stores out there, and the retailer is putting a lot of muscle behind it.

    Published on: September 15, 2021

    The Des Moines Register has story about a new Hy-Vee store in Grimes, Iowa, a 92,989-square-foot story that is sees as "a complete reimagining of its brand and what it means to grocery shop."

    Here's how the Register describes the store:

    "Both architecturally and in its technology and product offerings, the Grimes store is distinct from the rest of the company's more than 280-store portfolio. It's intended to be a one-stop destination for customers, checking off all the boxes on shopping and errand lists.

    "The new location at 351 N.E. Gateway Drive has a W Nail Bar, DSW Shoe department, a Joe Fresh clothing line area, a new food hall concept, a redesigned wine and spirits department, a pharmacy, a Starbucks, and even a showroom for exercise equipment. It also has taken notes from e-commerce giant Amazon's jump into creating more fully automated shopping experiences with state-of-the-art technology.

    "The entire Hy-Vee is seemingly digitalized, with hundreds of video screens providing in-store advertising. Dozens of kiosks are scattered across the store, allowing customers to order food or other products. Some kiosks allow shoppers to type in an item they're looking for and find out which aisle it's in … Throughout the store are hundreds of QR codes customers can scan on their phones to bring up coupons and other savings, order select products such as DSW Shoes not on display and provide other information."

    Published on: September 15, 2021

    The Bureau of Labor Statistics said yesterday that prices rose 5.3 percent in August compared with a year ago, but the Washington Post writes that the numbers suggest that "inflation showed early signs of easing amid the ongoing coronavirus pandemic … The August data breaks an eight-month streak of rising or steady inflation — and is a welcome sign for policymakers at the Fed and the White House, who argue that inflation will start to cool down as the economy heals. Their expectation is that as supply chains catch up with consumer demand, prices will land closer to the Fed’s 2 percent annual target for inflation."

    At the same time, the US Census bureau said that "median household income was roughly $67,500 in 2020, down 2.9% from the prior year, when it hit an inflation-adjusted historical high. The decline came as the U.S. last year witnessed the worst economic pain in more than a decade, with millions losing their jobs and national unemployment soaring from a 50-year low to a high of 14.8%.

    "The last time median household income fell significantly was 2011, in the aftermath of the 2007-09 recession."

    KC's View:

    Experts - and to be clear, I am not one - seem to feel that while the inflation numbers are encouraging, there remains considerable uncertainty about what is going to happen next.  Inflation may indeed be transitory, but a lot of folks won't be surprised if it is sustained over an extended period of time.

    As for income … well, the feeling here at least is that we could see a dramatic shift in the income numbers when folks get back to work and reap the benefits of wages that seem to be increasing because of the labor shortage.

    As for retailers … they continue to have to calibrate their offerings for an economy that remains in flux and hard to predict.

    Published on: September 15, 2021

    CNBC reports that Facebook has "announced a $100 million commitment to a program that supports small businesses owned by women and minorities by buying up their outstanding invoices.

    "By buying up outstanding invoices, the Facebook Invoice Fast Track program puts money in the hands of small businesses that would have otherwise had to wait weeks if not months to get paid by their customers … Facebook will buy the invoice from the small business and pay them within a matter of days. The customers then pay Facebook the outstanding invoices at the same terms they had agreed to with the small business. For Facebook, which generated nearly $86 billion in revenue in 2020, waiting for payments is much less dire than it is for small businesses."

    Published on: September 15, 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…

    •  The US has now reported a total of 42,288,205 Covid-19 coronavirus cases, with 682,341 deaths and 32,176,784 recoveries.

    Globally, there have been 226,672,138 coronavirus cases, with 4,663,045 fatalities, and 203,373,594 recoveries.  (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 74 percent of the US population age 12 and older has received at least one dose of the vaccine, with 63.2 percent being fully vaccinated.

    Published on: September 15, 2021

    •  The Wall Street Journal reports that " said it plans to add 125,000 employees in the U.S. and has lifted its average starting wage as it continues to rapidly expand its vast warehouse operations in a tight labor market.

    "The tech giant on Tuesday said it has opened more than 250 facilities this year and plans to open another 100 across the country in September, deepening its pool of locations used to store, sort and ship its packages.  It said it has lifted pay for workers in such facilities to an average of $18.32 an hour as it seeks to fill those locations and replace workers who leave existing jobs. That follows a move in April to increase wages between 50 cents and $3 an hour for more than 500,000 employees."

    •  Reuters reports that "workers at an Inc. facility in the Canadian province of Alberta have filed a request with the provincial labor board to carry out a union vote … in a new challenge to the e-commerce giant that has expanded rapidly without the formation of workers' unions.

    • The CBC reports that "Amazon Canada says it is hiring up to 15,000 more people in Canada and will boost the pay for its front-line workers to up to $21.65 an hour.

    "The e-commerce giant announced in a media release Monday morning that the hiring spree would boost its Canadian head count by about 60 per cent.

    "The wage hikes are immediate and will be for all current full-time and part-time staff, as well as new hires."

    Published on: September 15, 2021

    •  CNBC reports that Walmart-owned Sam's Club said yesterday that "it will raise its minimum wage from $11 to $15 later this month.

    "With the move, the membership-based warehouse club will now have a noticeably higher starting wage than its parent company, Walmart, where the minimum hourly pay was recently raised from $11 to $12. The pay increases at Sam’s Club and Walmart are effective Sept. 25."

    According to the story, "More than 34% of hourly workers at Sam’s Club will get a raise, as of late September, as a variety of roles get a pay bump, according to the company. For instance, hourly pay for team leads will now start at $19 an hour versus $18 previously, forklift drivers will start at $17 instead of $15, and personal shoppers will make at least $16 instead of $15."

    Published on: September 15, 2021

    •  From CNBC, a story about how Taco Bell is testing a new subscription program:

    "Customers with the Taco Lover’s Pass can order one crunchy taco, soft taco, spicy potato soft taco or Doritos Locos taco per day for 30 days straight on the chain’s app. The cost of the pass ranges from $5 to $10 a month, depending on the location. The Yum Brands chain is testing the program across 17 locations in Tucson, Arizona from Sept. 9 to Nov. 24."

    The pass is designed "encourage more consumers to download and use Taco Bell’s app," the story says.

    Published on: September 15, 2021

    Yesterday, in my FaceTime video, I said that a cover from The New Yorker from 1982 appeared 21 years before the 2001 terrorist attacks.

    Clearly, I got my math wrong.  It was 19 years.

    Thanks to all the MNB readers who pointed this out.  In my defense, I should point out that I have been recently diagnosed (not by a medical professional,  but rather by the two women who live in my house) as having Dyscalculia, which is defined as "a disability resulting in difficulty learning or comprehending arithmetic, such as difficulty in understanding numbers, learning how to manipulate numbers, performing mathematical calculations and learning facts in mathematics."

    It may be an amateur diagnosis, but that pretty much describes me.

    So, apologies for the mathematical mis-computation.

    Published on: September 15, 2021

    Variety reports that "Norm Macdonald, the deadpan comedian, actor, writer and 'Saturday Night Live' star, has died after a battle with cancer … He was 61."

    Variety notes that "Macdonald anchored 'Weekend Update" (on SNL) during the O.J. Simpson trial, where he delivered one of his most memorable jokes at the top of the episode following Simpson’s acquittal:  'Well, it is finally official: Murder is legal in the state of California'."

    Published on: September 15, 2021

    Kroger yesterday announced the launch of what it calling Kroger Delivery Now, a collaboration with delivery company Instacart that it says will allow it to deliver online orders in 30 minutes.

    I commented, in part:

    MNB readers won't be surprised to learn that I worry about the fact that Kroger is handing Instacart yet another arrow for its quiver.  This will allow Instacart to use infrastructure, functionality, data and learnings to both offer the service to other retailers and/or develop a standalone offering that won't depend on a retailer client.  This is dangerous stuff.

    MNB reader Tom Murphy wrote:

    As you may recall, I spent most of the 90’s working with Kroger in their corporate offices.  I can tell you that at that time, you would be drawn and quartered for even suggesting that you would somehow share customer information or risk the customer relationship with anyone outside of matter what the perceived value.  In fact, the leader of the pack on that was a young, controller at the time named…Rodney McMullen!

    Like you, I wonder about what retailers are giving up by developing a relationship with Instacart.  Some probably see it as the only option given a lack of will, discipline or capital to do it themselves.  Now, knowing that Kroger and Rodney have signed into some type of relationship with Instacart, I wonder if we are missing something.  I am reasonably sure that Rodney and team have figured out how to build a relationship with Instacart that is good for both parties yet somehow protects Kroger’s hold on customer information and protects their relationship with the customer.  I don’t know how, but Kroger must have leveraged its advantages in size, locations, costs of capital, supply chain and innovation to make this work.

    Could we be wrong?  🙂

    I always allow for the possibility that I could be wrong.

    Yesterday we took note of a Bloomberg story about how, while service industries (restaurants, hotels) often are singled out as being hardest hit by the national labor shortage, the numbers suggest that the manufacturing industry has been hardest hit.

    "And it is getting worse - especially because of Walmart and Amazon, which 'continue to raise their pay to be competitive in a tight labor market. We're used to America losing manufacturing jobs because companies can find cheaper workers abroad, but perversely, we might begin losing more of those jobs because factory owners can't offer what service employers can'."

    One MNB reader wrote:

    Meanwhile none of the major chains in New England are raising wages. I'm guessing no one wants to be the first, but they need to do something, and fast. They are losing help at a high rate, to Walmart, Amazon, and others.

    Prospective workers don't want to stock in grocery stores for $11 an hour, excepting MA where the minimum wage will go from $13 hr now to $14.25 in January 2022. NH is still at the federal level, $7.25, which is way out of touch with reality.

    Yesterday, Michael Sansolo wrote a column about how "the anniversary of September 11, 2001, always reminds me of the most heroic supermarket story I ever witnessed, albeit at a distance of time and space."  At two stores in the shadow of the World Trade Center, workers "quickly realized the disaster that was unfolding as they watched dazed survivors walk down the street coated in the dust and hellish soot of the collapsed buildings. And the workers at both stores sprung into action.

    "They ran into the streets with bottles of water to wash the faces of the passersby. Some brought out various eyewash products to help those in desperate need. They gave food and when possible gave anything that could be used for clothing, shoes or bandages. No one had a policy about how to do this, they just did it."

    Michael went on:

    "I pray we never know another day like 9-11, but sadly I know other horrible things will happen. And it will make me endlessly proud to hear stories of low-wage supermarket workers fighting through rain, snow, floods, fires and even terrorist attacks to get to work and provide an essential community service in good times and bad.

    "And every time that happens I’ll be endlessly proud yet again that I’ve gotten to spend so much time in the company of truly unsung first responders and heroes."

    One MNB reader wrote:

    Michael, I am a huge fan of your work and perspectives. However in today’s column I am slightly offended by your reference to ”low paid supermarket workers”.  You certainly could have left out the” low paid” part of their description unless only the courtesy employee helped the people in need. The term doesn’t reflect well on our industry.

    And from another reader:

    Wait - so you are more proud of people that make less money - so morality has an economic contingency? Good People do good things.. PERIOD. Doesn't matter how much money you make. And by the way. Low wage is something 99% of us go through as we work through life. Why are you "ENDLESSLY" proud? So we should be more proud of people that make less money - because they make less money? Come on. or are they inherently less moral that is why you are so surprised?

    Are They are better then the CEO who hands out a glass of water.. Are you more proud? Or the CMO who lends a hand up to someone? They both make the EXACT SAME CHOICE. 

    Also, We dont have a labor shortage. We have a GOVT problem. Private industry is competing with the GOVT. Stop paying people not to work. Stop paying people to NOT PAY RENT. 2021 could have seen some of the greatest economic expansion in history.. Except we dont have any adults in GOVT. 

    Michael responded:

    First, I always appreciate readers' responses and honestly, these comments are correct. I was trying to make a point about people charging into a difficult situation and their pay grade wasn't a factor at all. These were store level employees and that's all that mattered. 

    What always amazes me is how store level staff always shows up at the toughest times--think weather emergencies--serving their communities when their own homes and families are also impacted. That's not a function of pay, it's a function of caring.

    So my apologies for an unnecessary modifier.

    As an aside, on the issue of government payments creating a labor shortage I suggest you find some recent videos and writing from IGA CEO John Ross on the current labor situation based on a recent survey of workers across the country. The causes of the labor crunch, especially right now, are far more complex than we might imagine including fear of consumer-facing jobs during covid, to even the shortage of child care options. None of these are simple issues.