Published on: September 23, 2021
KC was walking through San Francisco International Airport the other day, and encountered something he didn't expect - a robotic barista. It was a sight that seemed both efficient and inherently theatrical, with implications for a world in which good help is hard to find.
Published on: September 23, 2021
The NPD Group is out with a study concluding that "despite bad weather and the delta variant spread, consumer online and physical restaurant visits in August continued to recover from last year's steep declines."
According to the study, "US restaurant traffic increased by +5% over the -10% decline in August 2020 and declined by -5% compared to the pre-pandemic level in August 2019. Larger average check sizes drove a +13% increase in dollars compared to a year ago and a +3% gain in dollars over the same month two years ago."
NPD also reports that "while restaurant visits are improved overall, dine-in or on-premises traffic continues to struggle compared to pre-pandemic levels. Dine-in visits were down -34% in August compared to August 2019. Off-premises orders, which gained significant ground during the pandemic, represented the majority, 73%, of all restaurant visits this August. Of off-premises services, delivery continues its meteoric growth, with orders increasing by +128% in August compared to the same month two years ago, and now represents 10% of off-premises visits.
"Carry-out visits, which hold a 49% share of off-premises traffic, increased by +6% compared to pre-pandemic levels. Drive-thru visits rose by +11% in August compared to August 2019 and represented 41% of off-premises visits in the month. Although digital ordering has grown by triple-digits since the pandemic began, non-digital orders represent the bulk, 85% in August, of all restaurant orders."
I don't think there is any question that people are yearning to go to restaurants again, but it also is interesting the degree to which the take-out portion of the industry continues to grow. I continue to believe that, especially if a resurgence of the pandemic continues to place limitations on their traditional business models, we're going to see some new constructs, such as the growth of ghost kitchens that allow for entrepreneurism and innovation. And, I'm interested to see if we see new "restaur-markets" that will compete from a different angle with so-called "grocer-ants."
Published on: September 23, 2021
Fast Company has a story about Stitch Fix, which has built a $1.7 billion business with 4.1 million active users out of a styling service model that uses "a combination of data and human stylists to send customers boxes of personalized products from dozens of brands."
Now, the story says, Stitch Fix is launching "a new platform called Freestyle that creates a customized store for every shopper. It’s designed to mimic the discovery process of a traditional department store, where brands and styles are showcased together, rather than a typical e-commerce site, where you have to search for exactly what you want. This new approach to shopping has the potential to grow Stitch Fix’s business beyond its subscription model - and also transform the way we shop online."
Here's how it works:
"You start by taking a short quiz and sharing your aesthetic preferences, sizes, and budget. Then you enter your own personal shop where you’re presented with a feed of 24 looks. You don’t see the prices or the brands on this screen; instead the pieces are neatly placed next to one another on a clean white background. (You can also shop according to category if you prefer, and those results will be personalized as well.) The products in your feed change constantly, based on Stitch Fix’s current inventory, so you’re incentivized to buy items you like, as they may not show up in your shop again."
The story notes that "this entire experience is powered by the data Stitch Fix has collected over the past 10 years of curating boxes of clothes for clients." Existing customers will see their personalized store based pin previous purchase decisions, while new customers will see a selection based on how they answered the quiz and seem similar to people who previously have shopped on Stitch Fix; as the platform gets more information, ideally the selection will get more customized.
“Retail as a whole shrunk in the last year, while we grew,” says CEO Elizabeth Spaulding. “We really believe that this will be the future of retail.”
Before the pandemic, I was a Stitch Fix subscriber, but I stopped because I just didn't need that much clothing, and it was just a pain in the neck to have to deal with the regular shipments that I kept sending back. I cannot be the only one who felt that way, and so it is interesting to see how the company is pivoting. Which is what every retailers has to do in these days of fluctuating consumer needs and priorities.
Published on: September 23, 2021
The Private Label Manufacturers Association (PLMA) announced yesterday that its annual trade show, originally scheduled for November 14-16, 2021, now will take place January 30-February 1, 2022. The location is the same - the Donald E. Stephens Convention Center in Chicago.
In a prepared statement, Peggy Davies, president of PLMA said, "PLMA recognizes the tremendous value of making in-person connections; we were especially looking forward to hosting our first in-person U.S. trade show since 2019 just a few weeks from now. As we know, the Delta variant came along and changed almost everyone’s plans … By the start of the new-year, we expect that significant nationwide progress toward normalcy will be evident, borders will be open, and corporate travel will resume."
I admire PLMA's optimism about the new year, though it seems a little overly so considering that pandemic numbers generally get worse during the winter months, not better. And it isn't like PLMA will be able to have outside events - it will be late January in Chicago. In fact, weather could end up being a bigger problem than Covid.
Published on: September 23, 2021
The Specialty Food Association (SFA) yesterday announced that it is relocating its 2022 Winter Fancy Food Show from Moscone Center in San Francisco to the Las Vegas Convention Center, on February 6-8, noting that "SFA is working in partnership with Las Vegas to ensure that all show safety protocols meet the needs of the specialty food community.
The 2021 edition was canceled because of the pandemic.
“The Specialty Food Association continues to be focused on exploring new opportunities for our members, and safely continuing the growth of the $170.4 billion specialty food industry during the pandemic,” said Bill Lynch, president of the SFA. “We are excited to be partnering with a premier trade show destination like Las Vegas, which has been the leader in the return of in-person events.”
It is possible that San Francisco - even though California's current Covid numbers are low - simply was not equipped to handle the show in 2022, though having just spend a few days in Vegas, I'm dubious that the city's safety protocols will be sufficient.
As I said in a FaceTime earlier this week, despite the mask mandate that exists in the city, there were an appalling number of people in the casinos and hotels not wearing masks. Doesn't matter what trade associations put in place for their specific events, if people are going to be hanging out at the tables or in elevators without masks.
Published on: September 23, 2021
Bloomberg has the story of Landfleischerei Marx, a butcher shop in Woltersdorf, Germany, where owner Svea Marx turned to vending as a way to keep her business alive during the pandemic, when people were avoiding traditional in-store retail experiences.
"To ease their concerns," the story says, "she ordered a vending machine where shoppers can choose their steaks, sausages, or salami, pay with a card or cash, and retrieve their meat after it drops into the bin - without having to queue inside or interact with a salesperson."
Now, Bloomberg writes, vending "is a growing part of her business. Most stores in Germany must close on Sundays and public holidays, but no such restrictions cover vending machines, leading to an upsurge of sales when the shop is shuttered. Thanks at least in part to a billboard Marx put on a nearby Autobahn, customers who haven’t sufficiently prepared for their Sunday at the grill come from as far as Hamburg to pick up bratwurst or barbecue. Once, when Marx’s husband saw a police car stopping by in the wee hours, he feared something was amiss, but the officers simply wanted breakfast supplies."
The story notes that "while keeping the machines stocked has added to the workload, it’s not a huge hassle since her house is adjacent to the shop. Marx has about 70 different offerings in the three machines, including snacks and soft drinks."
Just an example of how a decision made out of some level of desperation ends up being a kind of inspiration, creating a sustainable offering with greater relevance to shoppers. It is interesting to see how something that didn't exist in a retailer's bag of tricks not that long ago becomes essential. How many other opportunities are there like this one?
Published on: September 23, 2021
The Los Angeles Times reports that, as expected, California Gov. Gavin Newsom has signed into law legislation that "gives Amazon and other warehouse workers new power to fight quotas, which critics say have fostered dangerous conditions by pressuring workers to skip bathroom breaks and skirt safety measures … The measure requires warehouses to disclose quotas and work-speed metrics to employees and government agencies and prohibits penalties for stopping work to use the bathroom and other activities that affect health and safety. It also prohibits retaliation against workers who complain.
"Current or former workers alleging illegal labor practices will have the ability to pursue injunctive relief, meaning that instead of simply suing a company to secure penalties or damages, workers who lost their jobs could file suit to try to reverse their termination."
The Times notes that the bill was opposed by the California Retailers Association, where the organization's president, Rachel Michelin, "said in a statement Wednesday that the legislation will stick higher prices on clothes, diapers and other supplies, and hamper the movement of coronavirus tests from warehouses to hospitals, pharmacies and doctors’ offices heading into the winter months. 'With California’s ports facing record backlogs of ships waiting off the coast and inflation spiking to the fastest pace in 13 years, AB 701 will make matters worse for everyone,' Michelin said in the statement.
The bill takes effect on January 1, 2022.
Published on: September 23, 2021
From Fast Company, a story about how 25 Kroger-owned Fred Meyer stores in Portland, Oregon, are featuring a new section that "will sell common products, like hand soap, in reusable packaging that customers can later bring back to the store," using Loop, a platform for reusable packaging.
According to the story, "Customers pay a deposit on the package, which they get back when they return it to a drop-off bin in the store. Then Loop sorts the packaging at a 'micro node' nearby, and sends it to a larger facility for cleaning and sanitizing, before ultimately returning it to a manufacturing facility to be refilled and reused. Some of the brands in the platform use standard packaging that just hasn’t been reused in the past, like Gerber baby food in glass containers."
The system is similar to one being tested by Tesco in the UK.
Kroger says that if the system works, it will roll the Lop platform out to other markets it serves. Fast Company writes that "Kroger chose to launch first in Fred Meyer stores in Portland … because the company knew that customers in the area were particularly interested in sustainability (the stores also have a larger physical footprint than some of the company’s other supermarkets, so there was more space available for the new display)."
I love this conceptually, but launching this during a pandemic strikes me as possibly counter-intuitive. Though, maybe they just have to do an even better job of communicating the advantages and safety of the system than they would otherwise.
Published on: September 23, 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 United States, there now have been a total of 43,404,877 Covid-19 coronavirus cases, resulting in 699,748 deaths and 32,947,854 reported recoveries.
Globally, there have been 230,982,390 total cases, with 4,734,891 resultant fatalities, and 203,690,120 reported recoveries. (Source.)
• The Centers for Disease Control and Prevention (CDC) says that 74.9 percent of the US population has received at least one dose of vaccine, with 64.3 percent being fully vaccinated.
• The Food and Drug Administration (FDA) yesterday approved the use of a Pfizer-BioNTech Covid-19 vaccine booster shot for people age 65 and older as well as other high-risk adults.
The Wall Street Journal writes that the booster shots are approved "for people who got two doses of the Pfizer-BioNTech messenger RNA vaccine … The people should receive a booster at least six months after they had taken a second dose, the FDA said."
Now, it is up the CDC to shape the government's official guidance. The New York Times writes that while "a third dose undoubtedly amps up antibody levels … it’s unclear so far how long that increase lasts, whether it translates to meaningful extra protection against severe disease, and whether it can significantly decrease transmission of the virus."
• The Associated Press reports that "United Airlines says more than 97% of its US based employees are fully vaccinated against COVID-19 now that there is less than a week before a deadline to get the shots or get fired.
"The airline said Wednesday that the new figure does not include a 'small number' of employees who are seeking a medical or religious exemption from vaccination."
“Vaccine requirements work,” United said in a memo to employees.
• Los Angeles Magazine writes that "last winter, California couldn’t catch a break. More Californians died of COVID-19 in January 2021 than had during any previous month since the start of the pandemic and that month, a Johns Hopkins research project estimated that one in 17 people in Los Angeles County were carrying the virus.
"To say things have turned around would be an understatement. New data (again compiled by Johns Hopkins) indicates that California currently has the lowest positivity rate of any state in the country, with 24.99 new confirmed cases reported for every 100,000 people as of Saturday night. Other success stories include Maryland (25.34 new cases per 100,000 people) and New Jersey (26.74 new cases per 100,000 people), while Florida is in the worst shape, with an outrageous 262.3 of every 100,000 people testing positive.
"Data from the Centers for Disease Control also shows that California also has the lowest case rate in the U.S. According to the CDC’s community transmission map, California is the only state where the risk of transmission is 'substantial' rather than “widespread,” the worst of the tiers."
• The New York Post quotes Dr. Scott Gottlieb, the former Commissioner of the Food and Drug Administration (FDA), as saying that “we’re in for a whopper” of a flu season this year because of a lack of immunity in the US population.
The problem is that there essentially was no flu season last year - people did't get sick because of mask usage, increased and improved hygiene, and a Covid reality in which people were working from home and not traveling or going to restaurants. This means that people didn't develop any immunities that would serve them well this year, and Gottlieb says that "when the flu does come back, and it will come back, it’s going to come back very aggressively."
This is going to create even greater staffing challenges for businesses, he said, as they deal with employees kept out of work because of contracting the flu.
Published on: September 23, 2021
• Ahold Delhaize-owned Giant Food announced that it is reducing order minimums and eliminating midweek delivery fees on midweek online purchases.
The company said that "for Giant Delivers customers throughout the region, the changes remove delivery fees on midweek orders between Tuesday to Thursday. For orders Friday to Monday, the delivery fee has been reduced in half to only $3.95. Minimum order requirements have also been halved, going from $60 to $30.
"Available at 155 Giant stores, Giant Pickup users can now also enjoy no minimum order requirement on orders any day of the week, as well as Giant’s everyday low Pickup fee of $2.95."
“Convenience and value are cornerstones of our mission at Giant, and that extends to our eCommerce offerings, especially as consumer demand for delivery and pickup options increase,” Gregg Dorazio, Director of eCommerce for Giant Food, said in a prepared statement. “We are at the forefront of this growing space and believe lower delivery fees and order minimums will make these convenient services even more accessible to consumers.”
• The Seattle Times reports this morning that "more than 60% of the nearly 400,000 U.S. workers Amazon hired into its lowest-paying hourly roles between 2018 and 2020 were Black and Hispanic, and more than half were women, according to new employee demographic data for the years 2019 and 2020.
"Meanwhile, the company’s highest-paid tiers remain overwhelmingly white or Asian and male, despite some progress on hiring a more diverse workforce in recent years, according to the data, which Amazon reports annually to the federal Equal Employment Opportunity Committee. The company stopped releasing EEOC data in 2016, but agreed to resume doing so after New York City Comptroller Scott Stringer threatened to oppose Amazon’s board of directors candidates at the company’s 2021 shareholder meeting if the company did not disclose the information.
"The new figures seem to underscore concerns from some employees and observers that a racial divide lies between the company’s corporate and tech workers and its warehouse workers. While Amazon was one of the first large employers in the country to offer a $15 minimum wage — its average starting wage is now $18 — the wealth generated by the company has largely not trickled down to its hourly workers, those employees say."
• Amazon yesterday said that its Amazon One system - which allows people "to use their palm to enter, identify, and pay" - now is available for use in more than 60 of its physical stores in the US. The banners in which it is available include Amazon Go, Amazon Fresh, Whole Foods Market, Amazon Books, and Amazon 4-star, as well as Amazon Pop Up locations, in states that include Arizona, California, Colorado, Connecticut, Florida, Maryland, Michigan, Minnesota, Missouri, North Carolina, Nevada, Tennessee and Texas.
Published on: September 23, 2021
• CNBC reports that "Impossible Foods’ latest meatless product is set to hit tables from Thursday: plant-based pork that claims to be tastier and healthier than the real deal.
"The ground pork product will first be available in restaurants in the U.S., Hong Kong and Singapore, with further plans for retail expansion in those markets in the coming months. It marks the California-based company’s third commercial launch after ground beef and chicken nuggets as it seeks to solidify its position in the growing plant-based protein space."
• Marketing Daily reports that Ikea "is wading into the circular economy, testing a new Buy Back & Resell service in one of its Pennsylvania stores.
The company says the three-week pilot is part of its efforts to become a circular business by 2030. Members of its loyalty program (which is free to join) can sell their gently used items as-is. The only requirement is that it be fully assembled, functional, and not subject to any safety recall.
"After evaluating the results from the pilot at its store in Conshohocken, a Philadelphia suburb, Ikea says it plans to roll out the service to additional markets in the U.S. Ultimately, it hopes to make it a permanent part of all U.S. stores."
• Reuters reports that Macy's "plans to hire about 76,000 full- and part-time workers at its stores, call centers and warehouses ahead of this year's holiday season, indicating a return to pre-pandemic levels of hiring.
"The department store chain's push to hire more workers comes during a major labor crunch in the United States that has spurred retailers to raise wages to attract workers during the crucial end-of-year shopping period … Macy's said about 48,000 of the new roles this year were specifically for the holiday season, while the remaining were for permanent positions beyond the holidays. About 21,200 roles are for the its fulfillment centers.
I'll echo the comment made by an MNB reader about an earlier story about a retailer looking to hire tens of thousands of employees - where the hell does Macy's expect toe find these people?
• From StreetInsider, a story about how c-store retailer Yesway has filed for an IPO, hoping to raise up to $100 million.
The company's pitch to investors: "Yesway is one of the fastest-growing convenience store operators in the U.S., with 403 Company-operated stores as of June 30, 2021, up from 140 as of December 31, 2018. We operate our portfolio primarily under two successful brands, Yesway and Allsup’s. Our sites are differentiated through a leading foodservice offering, featuring Allsup’s famous deep-fried burrito, and a wide variety of high-quality grocery items and private-label products. Our geographic footprint consists of stores located in attractive rural and suburban markets across the Midwest and Southwest, where we often are the convenience retail destination of choice and effectively the local grocer. We have a successful track record of growing through acquisitions and believe we are well positioned to continue to solidify our market position and grow our store count."
Published on: September 23, 2021
• Cardenas Markets announced that Prabash Coswatte, the company's chief information and administration officer, has been promoted to the role of COO.
Published on: September 23, 2021
Yesterday MNB reported that the National Labor Relations Board (NLRB) has ruled that Kroger-owned "Fred Meyer and QFC stores violated federal labor law last fall when they barred employees from wearing Black Lives Matter buttons at work."
This is criminal. What if I dont want to be involved in politics. What if I don't believe in the merits of the organization of BLM. The government shouldn't be able to tell me what "pins" I can wear and what I cannot wear. What happened to private industry?
Are people OK with this Soviet/Cuban style law? WOW we are rotting from inside out like all great empires have done.
A republic is built on individual freedoms and property rights. A Republic is not meant to be centralized nor heavy handed. It is meant to be a reflection of its constituency. We are upside down and backwards.
I'm not sure this is the "individual freedoms" hill that I'd choose to die on, but different strokes for different folks. (I also think that if there is a disconnect between employee and employer over this issue, it actually may reflect a broader disconnect that needs to be addressed … especially now, at a time when labor is so tight.)
One other thing. I'm guessing that the Soviet and Cuban authorities would be more likely to tell people not to wear such buttons as opposed to saying that people should be allowed to wear them.
MNB took note of a story in Minnesota's Star Tribune in which retiring Target CIO Mike McNamara made the point that one of the most important things that has happened in his six years with the company has been the move away from outsourcing its technology needs.
I commented:
To be fair, Target has the resources to make that shift. Many retailers do not.
But there also is something attitudinal here - an understanding that as much as possible, a retailer needs to own the customer experience (in-store and online), defining and differentiating it whenever and however possible. It is about thinking strategically, not just tactically.
And, it means not depending on an outside vendor to execute an increasingly important part of the business model, lest one lose that business to an increasingly rapacious vendor.
(Gee, I wonder who I was talking about?)
One MNB reader had a visceral response:
I’d like to know why, when I get an email from Target, featuring an item I’m really interested in, and I click on the email, I can *never* find that product. It’s a complete fail.
So, not impressed, huh?
Also got the following response from MNB reader Robert Hemphill:
Kevin I think Mike has a very valid point for retailers with over 100 stores who can really afford to hire the staff and management to run their IT and internet tech. Thirty years ago a number of chains developed their own point-of-sale systems. The experience I had in managing internally developed POS turned out to be a short term benefit but a long-term challenge.
Independents don’t have the same wherewithal to afford to do the quality of tech needed today to compete. In the last 25 years I’ve seen that Independents need a lot of help with Internet technology, such as e-commerce, digital coupons, fully interactive digital fliers, and etc.. and building this technology is only part of it - you have to maintain it and keep it fresh. In my years running a digital marketing company we’ve provided over 2000 stores (single store operators as well as 200 store chains) with websites, email, and many advanced tech solutions. Independents usually benefit greatly by some of the solutions offered by outsource specialists who have developed very effective solutions that they can afford.
For the record, the company that Robert is referring to is Webstop - and based on my experience with them, one of the things that Webstop does is put the client's brand first. That's different from the increasingly rapacious vendor I referred to in my original commentary.
Also, if I may, a point of personal privilege here…
The folks at Webstop let me know recently that Robert is retiring from the company, and I wanted to say something here about that.
Robert came to me almost 20 years ago, when MorningNewsBeat was in its early days and my online presence was, to be honest, less than optimal. (That’s putting it kindly.). Robert said that he saw enormous value in having an ongoing relationship with MNB, and wondered if I would be interested. I checked him and Webstop out with retailers I knew, and everybody said the same thing - class guy, solid organization, good values, and they’re in this internet thing for the long haul.
Well, these retailers were right on all counts. (Not a lot of companies in this space have survived all these years.) Not only was Webstop instrumental in taking MNB not just to the next level, but to several levels above where we’d been playing, but I was always made smarter by Robert’s wise counsel (even when we occasionally disagreed). And the level of customer service that Webstop offered to me was reflective of the degree to which the company - and the wonderful people who work there - have served not just as a service provider to their retail clients, but as a partner, deeply invested in these companies’ success.
This is, I feel certain, because of Robert’s core values as a person and as a business leader. I feel equally certain that as MNB enjoys its 20th year in business, I never would’ve made it, much less enjoyed the success we’ve had, if not for Robert Hemphill.
And I just wanted to say that about him.
