retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: October 1, 2021

    The New York Times this morning has a story about how the dollar store business model seems to be "stumbling in the later stages of the pandemic."

    The story notes that dollar stores "benefited from the prevalence of poverty and disinvestment in the inner cities and rural America. Dollar stores, which pay among the lowest wages in the retail industry and often operate in areas where there is little competition."

    But, the Times writes, "Sales are slowing and some measures of profit are shrinking as the industry struggles with a confluence of challenges. They include burned-out workers, pressure to increase wages, supply chain problems and a growing number of cities and towns that are rejecting new dollar stores because, they say, the business model harms their communities."

    These troubles, the story says, "follow a year of soaring profits and a period of staggering growth in the industry. Roughly one in every three stores that have been announced to open in the United States this year is a dollar store, according to Coresight Research, a retail advisory firm, a sign of how well the industry did in 2020.

    The business model, which relies on relatively cheap labor and inexpensive goods, is designed to flourish even when its core customers are hurting financially. The strategy was honed during the high unemployment and wage stagnation of the Great Recession of 2008.

    "But dollar stores are not as well equipped for the surreal economy of today, when workers … are quitting in protest and a single coronavirus case on a container ship can cause a two-month delay in getting Chinese-made merchandise to the United States."

    KC's View:

    I must admit that this was a kind of unexpected story to read, since so much ink/pixels have been devoted to the extraordinary growth of the dollar store format around the country.

    One would also think that with so much uncertainty about the economy, the dollar store price proposition would be extremely attractive.  But it just goes to show that life isn't always as simple as one would like - if you can't get product to sell because of supply chain issues and can't get employees to staff the stores, it tends to inhibit success.

    For me, the problem with the dollar store format is that they never seem to be aspirational;  they always seem to focus on lowest-common denominator approaches that don't seek to inspire.  Sure, people want to save money, but I think that lots of folks are yearning for retail experiences that actually speak to their aspirations for their families, and that persuasively make the argument that value can be more important than price.

    If I were an independent retailer - this is the sector that generally is seen as most vulnerable to the dollar store format - that's the differentiated position I'd be staking out.

    Published on: October 1, 2021

    CNBC reports that as businesses struggle "to convince workers to work in person and face the threat of the highly contagious Delta variant," they are looking for ways to improve their benefits programs.  One benefit gaining currency:  tuition reimbursement.

    The story notes that "earlier this year, Walmart, the biggest employer in the world, announced that it would offer free college for all 1.4 million of its U.S. employees.   The benefit builds on a program introduced by the retail behemoth in 2018, which offered subsidized higher education for employees who would pay just $1 per day to earn an associate’s or bachelor’s degree in business or supply chain management from the University of Florida, Brandman University and Bellevue University."

    CNBC notes that "over the past several years, Walmart has been far from the only large employer to offer, expand, and advertise its employee education benefits. Some of the biggest employers in the country, including Amazon, Chipotle, Target and Starbucks now offer college as a benefit."

    The story points out that "according to recent research from EdAssist Solutions, 45% of American workers feel their education became even more important for their growth in the past year. Researchers also found that 30% of working adults list not having the money to pay for an education program as the top barrier to pursuing advanced education."

    KC's View:

    This isn't a new concept - tuition reimbursement used to be standard at a lot of companies.  Mrs. Content Guy got her MBA 40 years ago in part using tuition reimbursement programs offered by the companies where she worked.  (She's much better educated than I am.)

    What I hope retailers are realizing, even beyond the immediate need to attract employees, is that they need to find ways to treat workers as if they are assets, not costs, and demonstrate that they want to invest in those employees if they want their workers to feel invested in their companies.

    Published on: October 1, 2021

    Albertsons announced this week that it is working with the Napa Valley Wine Academy (NVWA) to develop a proprietary certification program for professional wine stewards.

    The company's beverage stewards "can take the courses online while on the job, to earn two different levels of certification: Wine 101 and Wine 201. The company is sponsoring the rigorous courses, which are on par in terms of depth and complexity."

    "Albertsons Companies understands the importance of wine education," said NVWA Founder Christian Oggenfuss, "The new wine certification program that we have developed specifically for their beverage stewards, reflects the mission of our academy, which is to prioritize the experience for the student. The beverage stewards will be able to study for certification at two levels, learning about domestic wines as well as wines of the world, furthering their knowledge and career."

    "By educating our beverage stewards with an advanced certification program developed by one of the top wine academies in the country, we are providing the tools that our alcoholic beverage professionals need, to help customers as they navigate hundreds of wine brands while shopping our aisles," said Albertsons' Curtis Mann, Master of Wine and Group Vice President Wine, Beer and Spirits.  "Many of our stores have more than 1,000 different wines on the shelf, and it is our job to help our customers find the right bottle for every occasion."

    KC's View:

    I love technology innovations, but for my money, these kinds of initiatives are equally important - raising the level of expertise on the front lines so that people can inspire their shoppers.  Kudos to Albertsons.

    Published on: October 1, 2021

    The National Grocers Association (NGA) has submitted comments to the Federal Trade Commission (FTC) on "how predatory action by dominant retailers in the grocery marketplace leads to unfair contract terms for independent grocers. This unchecked anticompetitive behavior leaves independent store owners and their customers with fewer options and paying more for products."

    NGA its asking the FTC to  "investigate whether power buyers like Walmart and Amazon are pressuring suppliers to give them favorable contract terms and in turn, charging higher prices and offering fewer products and product sizes to independently owned retailers."

    Published on: October 1, 2021

    Yet another Jeff Bezos-created business is under fire for workplace conditions.

    The Washington Post reports that Alexandra Abrams, the former head of employee communications at Bezos' Blue Origin spaceflight company, wrote an essay this week saying that its "culture sits on a foundation that ignores the plight of our planet, turns a blind eye to sexism, is not sufficiently attuned to safety concerns, and silences those who seek to correct wrongs."

    Some of the concerns seem to date back to 2019, when a senior executive at Blue Origin was terminated "after an outside law firm was brought in by the company to investigate employees’ allegations of his inappropriate behavior in the workplace, according to company officials and multiple people familiar with the matter."

    According to the story, "Abrams writes that she represents a group of 21 former and current staffers, employed throughout the company, who participated in drafting the post on the condition of anonymity. In an interview with the Washington Post, one of the former staffers who participated in the blog post confirmed the allegations. The Post spoke with two other former employees, who were not part of the group that wrote the blog post, who said that Blue Origin’s leadership has created a toxic work environment and that they were grateful the blog was made public. They, like others, spoke on the condition of anonymity for fear of reprisal."

    In a statement, Blue Origin said that the company “has no tolerance for discrimination or harassment of any kind. We provide numerous avenues for employees, including a 24/7 anonymous hotline, and will promptly investigate any new claims of misconduct.”

    The Washington Post piece can be read here.

    KC's View:

    Bezos may have a kind of blind spot, despite all his vision.  While he indisputably is able to conceive of enterprises that have the potential to change the world, he seems not to be fully cognizant off the more granular issues of basic human dignity, or treating people as more than just chess pieces to be moved around according to strategic and tactical imperatives.

    I wonder if a company can be truly great without a sensibility that integrates these kinds of sensitivities.

    Published on: October 1, 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:  44,314,424 total cases … 716,847 deaths … and 33,721,698 reported recoveries.

    The global numbers:  234,681,962 total cases … 4,800,056 fatalities … and 211,459,283 reported recoveries.   (Source.)



    •  The Centers for Disease Control and Prevention (CDC) says that 75.5 percent of the US population has received at least one dose of vaccine, with 65.1 percent being fully vaccinated.

    In addition, the CDC says, 5.5 percent of the US population age 65 and older has received a booster dose of vaccine.



    •  The Associated Press reports that "Merck & Co. said Friday that its experimental COVID-19 pill reduced hospitalizations and deaths by half in people recently infected with the coronavirus and that it would soon ask health officials in the U.S. and around the world to authorize its use.

    "If cleared, Merck's drug would be the first pill shown to treat COVID-19, a potentially major advance in efforts to fight the pandemic. All COVID-19 therapies now authorized in the U.S. require an IV or injection."

    According to the story, "Merck and its partner Ridgeback Biotherapeutics said early results showed patients who received the drug, called molnupiravir, within five days of COVID-19 symptoms had about half the rate of hospitalization and death as patients who received a dummy pill. The study tracked 775 adults with mild-to-moderate COVID-19 who were considered higher risk for severe disease due to health problems such as obesity, diabetes or heart disease."



    •  The New York Times reports that Tyson Foods, which on August 3 said that it would require all of its 120,000 US employees to be vaccinated, says that 91 percent of its workforce now has been vaccinated.

    The Tyson move "was notable because it included frontline workers when mandates applied primarily to office workers. At the time, less than half its work force was inoculated."

    The Times writes that "Tyson was one of the first major companies to mandate vaccines after incentives like paid time off to be inoculated started to lose traction. Other companies have also issued broad mandates and have reported similar success. United Airlines said this week that 99 percent of its work force was vaccinated, and scores of hospital workers have agreed to a shot after initial resistance. In California, health care employers have reported vaccination rates of 90 percent or higher."

    The reason that the Business Roundtable endorsed a national mandate being imposed by the federal government is that it gave businesses cover to be able to make the kind of public health-centric moves that Tyson and United made on their own.

    Published on: October 1, 2021

    •  The Chicago Business Journal reports that Amazon plans to open "three new Amazon Fresh grocery stores in the Chicago area — in Morton Grove, Westmont and Naperville.

    That will bring to seven the number of Amazon Fresh grocery stores in the Chicago area, joining the other locations in Oak Lawn, Schaumburg, Bloomingdale and Naperville."

    According to the story, "The three new Chicagoland stores will feature the company's 'Just Walk Out' technology.  They will be the first stores in the state to implement the system, which enables shoppers to enter the store, scan a credit card or an Amazon app, complete their shopping, and walk out without having to stand in a checkout line. Self-service checkout lines will be available for those who don't use the technology."



    •  From the Wall Street Journal:

    "Google, an unlikely underdog, is struggling to keep pace with Amazon in the battle for billions in e-commerce ad dollars.

    In its latest strategy shift, the Alphabet Inc. unit said Wednesday that it is updating the look and format of product search pages to feature images of apparel, accessories and other items to better resemble a digital store rather than a long list of links and text.

    "The change is part of a broader overhaul Google has undertaken during the pandemic to enliven its foundering e-commerce operation. Over the past year, Google has stopped requiring merchants to advertise to have their products listed in shopping searches. It also ceased collecting commissions on purchases and joined with Shopify Inc. to simplify search listings for 1.7 million merchants.

    "Google is seeking to protect its core search and advertising business from Amazon’s continued encroachment and the ambitions of Walmart Inc., Target Corp. and others that have begun selling ads as part of e-commerce operations."

    Published on: October 1, 2021

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  The Associated Press reports that "the number of Americans applying for unemployment benefits rose for the third straight week, a sign that the highly contagious Delta variant may be slowing the job market’s recovery.

    "Claims rose by 11,000 last week to 362,000, the US Labor Department said Thursday. Since topping 900,000 in early January, applications had fallen fairly steadily as the economy bounced back from last year’s shutdowns. But they’ve risen along with coronavirus infections.

    "The numbers, which are a proxy for layoffs, remain elevated: Before the pandemic hit the United States hard in March 2020, they were typically coming in at around 220,000 a week."



    •  From the Wall Street Journal this morning:

    "Consumer spending picked up in August, a sign the U.S. economic recovery is gaining steam heading into the fall.

    "Personal outlays on goods and services rose 0.8% in August from the month before, after a 0.1% decrease in July, the Commerce Department reported Friday.

    "Personal income increased 0.2% in August. The federal government’s distribution of enhanced tax breaks for parents had helped push up income by 1.1% in July.

    "The highly contagious Delta variant of the coronavirus triggered a summer slowdown in spending on meals out, hotels and airline tickets. Still, consumers remain in a strong position to help power the economic recovery. They have accumulated high levels of savings and are benefiting from an abundance of job openings and rising wages."



    •  CNBC reports that Target will begin its end-of-year holiday shopping season in about a week.

    According to the story, "The discount retailer announced Wednesday that from Oct. 10 through Dec. 24, shoppers for the first time will be able to request a price adjustment on any item purchased at Target if the company drops the price later in the season.

    "Target said it will continue to match select competitors’ pricing within 14 days of a customer’s purchase, as it has in holidays past."



    •  The Seattle Times reports that Washington State's ban on single-use plastic bags goes into effect today, with the goal being to " reduce contamination in recycling and compost systems and promote the use of recycled goods.  The ban is intended to encourage customers to bring and reuse their own bags when shopping."

    The story says that "certain carryout bags will be permitted, such as large paper bags and thick reusable plastic bags, but will cost customers an 8-cent fee per bag. The bags must be made with a certain amount of recycled content, and green or brown compostable bags are also allowed for use."

    The Times notes that "local bans are already in place in cities in Washington, including Seattle, Olympia, Tacoma and Edmonds. The new state requirements will override local laws, to create consistent policy and fees across the state."



    •  Reuters reports that a one-day auction tomorrow in the UK will determine the future ownership of supermarket chain Morrisons, the nation's fourth largest supermarket chain.

    According to the story, "The shoot out will pit U.S. private equity group Clayton, Dubilier and Rice (CD&R), whose 285 pence a share bid was recommended by Morrisons' board in August, against a consortium led by the Softbank-owned Fortress Investment Group.

    "CD&R is being advised by Terry Leahy, who was CEO of Tesco for 14 years to 2011."

    If CD&R wins the auction, I hope Leahy doesn't recommend that Morrisons should open a US division called Easy & Fresh.  

    Published on: October 1, 2021

    We had a story the other day about all these new gizmos that Amazon was introducing, and I commented:

    This just illustrates the point we've been making here on MNB for a long time - that Amazon's vision of its future has less to do with e-commerce and more to do with being intertwined in every facet of people's lives.

    While there is something disquieting about the degree to which it could be in our homes and lives, it is hard to argue with the proposition that its platforms can serve as an organizing principle, bringing together all these different elements that can make our live easier.  The questions are, a) will people actually buy into this vision, and b) how many of these products will prove to be viable in the long-term?  

    Prompting MNB reader Lisa Malmarowski to write:

    1. Does it really make our life easier? Maybe some of the things, but certainly not all. Plus you’ll have more electronics to both keep running and upgrade - and that’s frankly a pain and most often wasteful. 

    2. I would love to see companies like Amazon take their amazing intellect, resources and creativity and apply to climate change. Making more and more stuff that requires more and more resources, including fossil fuel to make and run them, and adding to the world of consumerism is hardly eco-conscious no matter how they try to wash it. 



    Responding to yesterday's breaking news alert about the retirement of Whole Food co-founder and CEO John Mackey, MNB reader Rickard Werner wrote:

    Kevin:  Here's my view:  John Mackey did more for the popularization of natural and healthy products than just about anyone before or since.  He did so by making these products attractive to well-heeled fashion conscious buyers.  In short, by making them cool.  

    I watched closely as WF gobbled up competitors, especially Wild Oats where I worked for seven years.  It was not the gobbling up of competitors that made WF successful.  They had lots of competition, but none of them, including WO,  offered the mix of product and environment that came anywhere close to what WF offered.  

    WF had great decor, lighting, real estate strategy and most importantly, great people.  It's the people-culture that really made WF, and what is most in danger now.  When WF bought WO I didn't see how the decentralized model they had could work for 300 stores.  I didn't see how it could work for 200 stores!  They made it to 400 stores before the pain really set in.  

    It took them years and getting acquired by Amazon to make it through to a more mature and controlled retail model.  But at what cost?  There is much less discovery at the stores and much less support (I believe) of small and local suppliers.  It seems from the outside that Team Member morale at the stores I visit is not what it used to be.  It will be interesting to see what the future holds.

    Another MNB reader wrote:

    Looking in my rear view mirror I think some of Whole Foods' thunder has been dampened by Costco.   To my disappointment Costco seems to be catering more and more to the "organic" crowd.  One example, the only choice now is high priced organic eggs.  The same is true for mushrooms and other produce.  As it is said, in most cases the only difference between ordinary and organic is the price.  I suspect the average Costco shopper is more into organic than a Sam's Club member.



    Yesterday's FaceTime video about why people should be nicer to each other generated the following response:

    I've been wondering about the current "Be kind to those who show up" thing and have arrived at this.

    When did being kind to other people all the time go out of style?

    One never knows what other people are dealing with and maybe brightening their day by simply engaging will help in some small way.  Plus, go ahead and be mean to the kid who's waiting on you and then consider what is happening to your food while it's out of your sight.

    My Wife and I flew on business across the country recently and bought a bunch of $5.00 gift cards for a national coffee chain always found in airports.  While boarding we handed them to the Flight Attendants and it was so fun to see the look on their faces when we said thanks for hanging in there during a really rough year. 

    While certainly not intended nor expected, we were treated like visiting royalty the whole time and had a ball.    (Who knew mimosas in To Go cups were a thing?)

    I commented on this trend by saying:

    It sometimes seems that we're just one variant or one natural disaster away from a complete breakdown of the social order.

    MNB reader Steve Anvik wrote:

    Or, perhaps the American spirit will continue, as in the last 250 years - to rise to each challenge and find new ways to succeed. I personally like your optimistic articles and comments better.

    I like being optimistic better.  But I think it is the world that changed, not me.

    MNB reader Deborah Faragher wrote:

    Couldn’t agree with you more, Kevin.  But, it strikes me as so sad that we have to implore people to “be kind”.  “Be nice to each other”.  What’s happening to us?

    And MNB reader Keith Gleason wrote: 

    Until then, remember, we're all in this together. Schooner Tuna. The tuna with a heart.

    Extra credit for the Mr. Mom reference.  I'm impressed.



    Regarding the Dollar Tree decision to sell some things that cost more than a dollar, one MNB reader wrote:

    Well this this annoys me.  Selling everything for $1.00 or less is what makes the Dollar Tree the Dollar Tree.  Make this move and they will just another store with dollar in their name, nothing special.

    Wow.  I suggested yesterday that…

    These days, I don't think too many people will take umbrage at Dollar Tree for this.

    Guess I got that wrong.

    Today's story about dollar stores facing headwinds puts the Dollar Tree decision in a different context. They need to grow their customer base and sales, but the question is whether this move takes the company off brand.



    And finally, reacting to my piece about gender pronouns, one MNB reader wrote:

    We do use pronouns on our email signatures (not company required; our internal committee on diversity brought the idea to our team members).  Most have adopted it.

    Now, as a white cisgender male, I can’t speak to whether someone who is transgender or non-binary sees this as a good thing.  But I can speak to why our organization did this.  I think it normalizes the concept that our team members have control over how they want to be addressed, especially when a majority if the staff adds pronouns to the virtual ID.  It also speaks to those who read these emails that they see an organization that understands inclusion is important.

    It may not be a major thing, and it may come across as odd to some recipients who don’t understand its purpose.  But to the current and future employees who prefer the use of pronouns, I hope it is seen as a reflection of  corporate values, and an awareness that for some, it is a major thing.

    Agreed.  Totally.

    Published on: October 1, 2021

    In Thursday Night Football, the Cincinnati Bengals defeated the Jacksonville Jaguars 24-21.

    Published on: October 1, 2021

    "The Problem with Jon Stewart" features the iconic host of "Daily Show with Jon Stewart" in his return to television - this time in a bi-weekly series on Apple TV+ that will look at a variety of current events and issues.

    The first episode dropped this week, and at one point Stewart acknowledges on camera that most people are likely to see the show in pieces, via clips that end up on YouTube.  If that's so, it'll be a shame, because the show takes an extended look at the serious health issues being suffered by US veterans exposed to "burn pits" - open waste disposal sites that spew forth toxic fumes, often close to US bases.

    This is all far closer to advocacy journalism than comedy or satire;  Stewart is more ironic than funny, but the show is powerful - it has a solid three-act structure, with Stewart laying out the facts in the first segment, talking with victimized veterans and their loved ones in the heart-wrenching second, and then engaging in a surprisingly tough interview with current US Secretary of Veterans Affairs Denis McDonough, whose inability to rise to the occasion is, to be honest, maddening.  (Stewart actually has a lot of street cred here - he has been a passionate advocate for 9-11 first responders over the years, bring enormous attention to their cause when politicians have let them down.)

    I'm not sure how much Stewart will be able to move the needle on Apple TV+, nor do I know if subsequent shows will live up to the promise of the first episode.  I do know that he has wisely steered clear of the advocacy-with-comedy format used by people like John Oliver, Samantha bee and Trevor Noah, all of whom used "The Daily Show" as both learning experience and template.  

    But on the basis of one episode of "The Problem with Jon Stewart," I have no problem saying that I'm all in.



    I've also been watching, on Peacock, the new TV series "The Lost Symbol," based on the book by Dan Brown.  The protagonist, symbologist Robert Langdon, is played by Ashley Zukerman as. much younger man than in the novels or the movies that featured Tom Hanks.

    The problem with the movies, for me, was that they adhered to the books too closely;  I yearned for them to throw a curve and change the identity of the bad guy or insert an unexpected plot twist.  The problem with the TV series is that it just plain boring - I read the book, I think, but I have no memory of it with which to compare the series version.  But it doesn't matter … "The Lost Symbol" is just sort of inert.

    Another "Lost Symbol" complaint … one of the things I really liked about the movies was the hauntingHans Zimmer theme, "Chevaliers de Sangreal," which they've decided not to use on the TV show.  That's a shame…



    I have a wonderful wine to recommend to you this week - the 2017 Girolamo Russo 'a Rina Etna Rosso from Sicily, which is rich and velvety.  I had it with a lamb pizza that was made with spinach and feta cheese, and it was fabulous.



    That's it for this week.  Have a great weekend, and I'll see you Monday.

    Stay safe.  Be healthy.

    Sláinte!