retail news in context, analysis with attitude

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.