business news in context, analysis with attitude

Published on: October 4, 2021

Content Guy's Note:  It was just a few months ago that the esteemed data analytics and insights firm 84.51° issued a report entitled "Shaping a new normal: What brands need to know about the post-pandemic grocery shopper."  But since that time, expectations about when me might reach the post-pandemic stage have been challenged by the surge in the Covid-19 Delta variant, as well as continued resistance to public health mitigation efforts from some quarters of the population.

And so, I reached out to Barbara Connors, VP of Commercial Insights at 84.51°, to talk about how the extended nature of the pandemic affected the acceleration of some retail trends … how consumers perceive retailers' varying efforts to deal with Covid-19 … the too-often equating of "price" and "value" in the shaping of retailers' images and consumers' perceptions … and the degree to which "healthier habits" will be sustained long-term.  And, we also chatted about a more recent 84.51° report about expectations for the upcoming end-of-year holiday season.

I hope you enjoy our conversation.

If you want to listen to this conversation as an audio podcast, you can hear and download it here:

If you want to access the two 84.51° reports referred to in our conversation, just click here and here.

Published on: October 4, 2021

Bashas', the family-owned supermarket chain that has served Arizonians since 1932, has announced that it is selling the company to Raley's Holding Company.

According to AZCentral, "Bashas' has 113 stores across Arizona, New Mexico and the Navajo Nation. That includes all of its Food City and AJ's Fine Foods stores, too. The sale is expected to close by the end of the year."

CEO Edward Basha said that "the pandemic showed his family it was time to sell the chain his grandfather launched in metro Phoenix nearly 90 years ago," the story says.  He recalled 'fighting' for shipments of toilet paper and paper towels during supply shortages caused by the pandemic. Time after time, the big corporate stores would beat out the family-owned business for resources.

"So when Raley's — a family-owned company which operates Raley's, Bel Air Markets and Nob Hill Foods in northern California and Nevada — approached the Basha family in mid-2020, he said they knew it would be a good fit."

"That added scale would be an added benefit to our members and also to the customers," Basha said. "It was a question of taking an honest assessment, putting our egos aside and considering what was best for our members and customers."

Published on: October 4, 2021

Seth Dallaire, Instacart's chief revenue officer, is moving over to Walmart and taking on the same role.

AdExchanger writes that Dallaire will work "to scale Walmart Connect, the retail giant’s ad platform unit," as well as on Walmart+ and “data monetization and business partnerships.”

Published on: October 4, 2021

New York magazine has a piece about how the Teamsters, at the brink of a new era of leadership, seems to have one major goal (though different opinions about how to achieve it) - unionizing Amazon.

According to the story, "The Teamsters think they can succeed where other unions have failed. A formidable union, they represent 1.4 million members in the U.S. and Canada. While the archetypal Teamster in the public imagination likely drives a truck, the union’s ranks include public defenders, funeral directors, and zookeepers. An increasing number of Teamsters are women and people of color, and they have big dreams for their union when it comes to Amazon. Over the summer, Teamsters overwhelmingly approved a resolution to organize Jeff Bezos’s conglomerate and in September, Teamsters Canada filed for the union’s first election at an Amazon warehouse in Alberta. Were a union to organize Amazon, it would transform working conditions for the company’s massive workforce, which is among the nation’s largest."

The priority comes at an interesting time for the Teamsters, the story notes:  "There has been a Hoffa at the head of the Teamsters for 37 of the past 64 years. James R. Hoffa presided over the union from 1957 until 1971, a few years before his infamous disappearance. His son, James P. Hoffa, took over as president in 1998 and is now set to retire, launching a major contest for the future of the storied union."

There are two leadership slates vying for the top job at the Teamsters, but they have different opinions about how tio achieve that goal.  One side, the slate that has been e endorsed by current leadership, believes that the union's depth and breadth and diversity will create a more organic approach to unionization at Amazon;  the other slate is creating a kind of insurgency approach, believing higher levels of militancy and aggression are what's needed to take on Amazon's formidable anti-union forces.

 

Published on: October 4, 2021

Deloitte Insights is out with the third annual edition of its Future of Fresh series, focusing this time on the competition between fresh and frozen foods.

An excerpt:

"Fresh sales were up over 10% in 2020, reaching unexpected new highs.1 The initial big question for 2021 was whether this increased demand could be sustained. Many were concerned that competition from the return of restaurants would cause retail food sales to plummet. Yes, sales are indeed off their highs, but sales in the first half of 2021 still significantly outpaced those of 2019. Fresh seems likely to leave this pandemic period better off in terms of revenue than before it started.  For the consumer, eating at home is sticking around and that’s great news for fresh.

"But another kind of competition is lurking just a few aisles over. The market for frozen food is less than half the size of fresh. Frozen is the David to fresh’s Goliath. However, frozen food sales were up 21% in 2020; basically double the growth of fresh food sales in that same period.  Within frozen, the closest equivalents to fresh food (namely, a combined group of frozen meat, poultry, seafood, fruit, and vegetables) grew even faster and so far in 2021, frozen growth continues to outpace fresh. In the food fight, to capture growth in at-home consumption, frozen appears to have gained an advantage. Why? Will it continue?"

You can check out the entire report here.

Published on: October 4, 2021

The New York Times reports that diapers seem to be one of the latest products affected by the pandemic and supply chain shortages.

"The pandemic has upended global supply chains and created a run on many products, including diapers," the Times writes.  "Kimberly-Clark and Procter & Gamble, two of the country’s largest diaper manufacturers, increased the prices of baby products this year. A typical package of 100 diapers costs $30 to $50 from most online retailers."

But that can be a problem:  "Even a small price increase can put a strain on families, many of whom pay around $75 for a month’s worth of diapers for one baby, according to the National Diaper Bank Network. Many parents have to choose between buying diapers or other necessities, and some will leave their child in a soiled diaper because they can’t afford a replacement."

Hence the existence of organizations designed to address the issue.  For example, there's the National Diaper Bank Network, which the Times describes as "an organization that provides diapers to children."

"Diaper banks across the country have reported recent surges in families who couldn’t afford diapers," story says.  WestSide Baby, which is based in Seattle, distributed 2.4 million diapers last year, up 60 percent from 1.5 million in 2019, according to Sarah Cody Roth, the organization’s executive director. WestSide Baby is on track this year to meet or exceed last year’s total, she said.

"Diaper banks in Oklahoma and Pennsylvania have reported similar trends. Many banks give families 50 diapers per month, which covers about two weeks, said Cathy Battle, the executive director of the Western Pennsylvania Diaper Bank. That’s often not enough for families who can’t afford diapers."

The Times points out that "the federal government does not provide funding for diapers, but that may change if Congress passes the End Diaper Need Act of 2021, which would funnel grant money to social services that support low-income families and adults with disabilities."

Published on: October 4, 2021

Green Zebra, the Portland, Oregon-based "healthy convenience store," last week reopened one of the two stores that it closed during the pandemic.

The store is located on the campus of Portland State University (PSU), and the reopening coincides with the school's decision to once again hold in-person classes after more than a year during which most learning was remote.

“2020 was hard for so many, Green Zebra included,” said Lisa Sedlar, CEO of Green Zebra Grocery. “We were saddened to have to lay off our staff and close the PSU store last year. So it feels particularly rewarding to be reopening it. We are all so enthusiastic to have the opportunity to reconnect with our eaters and realize our mission of increasing access to healthy food. I'd like to extend my thanks to our team, our vendors, our community and to Portland State University, all of whom have been incredibly supportive on our journey to reopen.” 

Last summer, Green Zebra closed both the PSU store and one located in the Lloyd district, locations that during the pandemic were unable to generate enough traffic and sales to remain viable.  Green Zebra was able to keep its original store, on North Lombard Street in north Portland, and open a new one, on SE Division Street in southeast Portland;  these two locations are in primarily residential neighborhoods better able to support the format even during the pandemic.

Published on: October 4, 2021

Over the weekend, "Saturday Night Live" made its season debut, and among the skits was an evaluation of Jeff Bezos' ambitions for space travel.

Enjoy.  (I did.)

Published on: October 4, 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 US, there now have been a total of 44,518,437 Covid-19 coronavirus cases, resulting in 719,933 deaths and 33,938,147 reported recoveries.

Globally, there have been 235,779,925 total coronavirus cases, with 4,817,459 resultant fatalities and 212,644,501 reported recoveries.  (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 75.8 percent of the US population age 12 and older has received at least one dose of vaccine, with 65.4 percent being fully vaccinated.

In addition, the CDC says that 7.4 percent of the US population age  65 and older has received a booster vaccine.

•  From the New York Times:

"The Food and Drug Administration on Friday scheduled three days of public meetings with its panel of independent vaccine experts for later this month, as the agency prepares to make high-profile decisions on whether to authorize emergency use of the Pfizer-BioNTech vaccine for children ages 5 to 11 and booster shots for adult recipients of the Moderna and Johnson & Johnson vaccines.

"The F.D.A. typically issues its decisions within a few days of advisory committee meetings, during which members discuss safety and efficacy data. The timing of the upcoming meetings indicates that the agency intends to move quickly to decide whether to authorize both the booster and children’s shots.

The Times also reports that "Johnson & Johnson is planning to ask federal regulators early this week to authorize a booster shot of its coronavirus vaccine, according to officials familiar with the company’s plans. The firm is the last of the three federally authorized vaccine providers to call for extra injections, amid mounting evidence that at least the elderly and other high-risk groups need more protection.

"Federal officials have become increasingly worried that the more than 15 million Americans who received the Johnson & Johnson vaccine face too much risk of severe Covid-19. The Food and Drug Administration on Friday scheduled a meeting on Oct. 15 of its expert advisory committee to discuss whether to grant emergency use authorization of a booster shot of Johnson & Johnson’s vaccine."

•  The Wall Street Journal reports that the state of California will require all eligible students to be vaccinated against Covid-19, making it the first state in the union to impose such a mandate.

"The new mandate will take effect once the Food and Drug Administration grants full approval for the Covid-19 vaccine for people aged 12 and older," the Journal writes.

Gov. Gavin Newsom said that the mandate will kick in for the first academic term after the FDA's approval, like to be either January 2022 or July 2022.  "The mandate will be phased in across grade levels, with students in grades 7 through 12 among the first to be required to be vaccinated," the story says.  "Mr. Newsom said waiting for full FDA approval will allow officials to build more trust and confidence with parents and educators before the requirement takes effect."

•  The New York Times reports that American Airlines, Alaska Airlines and JetBlue have all decided to impose a vaccine mandate for em ploys.

In all three cases, the companies used the federal vaccine mandate for government contractors as cover for making their decision.  Timetables for the three companies were not announced.

United Airlines announced a vaccine mandate in August, and recently said that only a few hundred employees out of 67,000 have not been vaccinated to this point.

Published on: October 4, 2021

•  USA Today reports that Amazon already has started rolling out Black Friday-style deals units site, a reflection of a current reality in which supply chain issues are likely to create a shortage of product as we get closer to the end-of-year holiday season.

Target also has started its holiday promotions early this year.

In addition, USA Today writes, "Amazon said this year Prime members in the U.S. can send gifts with the mobile app if they don’t know the recipient’s address with an email address or mobile phone number."  And, "Amazon's extended holiday return period also has begun. Most items purchased Oct. 1 through Dec. 31 can be returned through Jan. 31, 2022."

•  Reuters  reports that electric vehicle manufacturer Rivian Automotive - which is backed by Amazon as well as Ford - said in an IPO filing on Friday that it lost close to $1 billion during the first half of the year.

The story notes that "Rivian had about 48,390 preorders for its R1T pickup trucks and R1S SUVs in the United States and Canada as of last month.

"The company is currently pursuing a two-track strategy: building electric delivery vans for Amazon and developing an electric pickup and SUV brand aimed at affluent individuals.

"Amazon has ordered 100,000 of Rivian's electric delivery vans as part of the e-commerce giant's broader effort to cut its carbon footprint."

Published on: October 4, 2021

•  Reuters reports that "Clayton, Dubilier & Rice (CD&R) has won the auction for Morrisons with a 7 billion pound ($9.5 billion) bid, paving the way for the U.S. private equity firm to take control of Britain's fourth-biggest supermarket group … CD&R's victory marks a triumphant return to the UK grocery sector for Terry Leahy, the former chief executive of Britain's biggest supermarket chain Tesco, who is a senior adviser to CD&R."

The story notes that "CD&R has committed to retaining Morrisons' headquarters in Bradford, northern England, and its existing management team, led by CEO David Potts.

It also says it will execute the supermarket chain's existing strategy, not sell its freehold store estate and maintain staff pay rates.

"These commitments are not legally binding, however."

•  The Washington Post reports this morning that "as consumers chafe at growing food price inflation, the Biden administration is pointing a finger at some of the country’s largest meat companies, suggesting pandemic profiteering may be responsible for the steep rise in the prices of beef, pork and poultry.

"Recently, the prices for beef, pork and poultry have all increased far more than other kinds of food, accounting for as much as half of price inflation at grocery stores.

"National Economic Council Director Brian Deese has drawn connections between consolidation in the meat industry and increasing prices of meat. A July executive order focused on antitrust enforcement, directly addressing meat industry consolidation.

"Unsurprisingly, the meat industry has pushed back against the White House’s allegations. So have some economists, saying consolidation is not entirely to blame for higher prices. As with other industries, escalating costs in the meat business have driven up prices: Rises in feed, labor, transportation and packaging costs — along with pandemic-related labor shortages — have caused beef, chicken and poultry producers to pass those increases along to consumers."

•  CNBC reports that "The pandemic pushed consumers out of dining rooms and onto sidewalks, parking spaces and open streets. Now the push is coming from restaurant owners to keep their outdoor dining structures, tents and sheds around forever."

The story suggests that the fish is coming in both big cities and smaller communities, at least in part because that extra capacity is relieving some of the financial pressures that built up during the pandemic and people shifted to eating mordant home.

However, the story notes, "while making outdoor dining a permanent fixture is popular with restaurants, there are some opponents. Some eateries have fielded complaints about noisy outdoor customers and the loss of parking spaces."

And, "Even as cities try to resolve those issues, restaurants may find that customers aren’t as eager to sit outside year-round. Last winter, many braved cold temperatures rather than dining indoors, leading operators to invest in propane heaters and other features to warm customers … This year, many restaurateurs are planning on maintaining their street-side dining set-ups throughout the winter, although they may change their plans based on demand."

Published on: October 4, 2021

Got the following email from an MNB reader:

In regard to the National Grocers Association (NGA) submitting 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, the ROBINSON-PATMAN ACT has been around since 1936 but rarely ever been enforced in recent decades.  Of all the useless Congressional hearings perhaps Congress should schedule one to look into this lack of enforcement in detail.  A lot of small retailers can often buy merchandise from the major ones for less than they can from their wholesaler or even direct from the manufacturer.  A lot of the discrimination hides under what is called "trade spending" and services that don't show up on product invoices.   

On another subject - the reportedly toxic culture at Jeff Bezos' Blue Origin spaceflight b business - from MNB reader Tom Kroupa:

It is really unfortunate that for all that Jeff Bezos has done to create monumental change in the way we buy things, there are so many issues with employees. His policies range from Jeff Sting-Like-A-Bezos to Jeff Me-zos. It would be helpful if he would evolve Amazon to Jeff We-zos!

We had a story the other day about retailers providing tuition reimbursement to employees, which prompted MNB reader Carole Christianson, COO of the Western Association of Food Chains (WAFC), to write:

Even better than tuition reimbursement, which you noted has been used by many employers for years, is scholarships or prepaid tuition.

Most all supermarket chains represented by the WAFC board of directors, prepay tuition for their workers to take the eight class community college Retail Management Certificate Program. All of the companies represented by our current officers: Stater Bros., Smart & Final, Bristol Farms, and Raley’s pay tuition for their employees.

In addition, the WAFC provides up to 35 full tuition ($30k per student) scholarships to food industry associates nominated and accepted into the prestigious Food Industry Management Program at the USC Marshall School of Business. The 64th class will begin their journey on January 6, 2022.

I highly encourage people visit to our website and explore these and other options for advanced education we offer.

www.wafc.com

I should note that I've had the great pleasure several times to teach in the WAFC-USC program, and it always is highlight - I'm always disappointed during the years when they don't call.

And, reacting to my commentary on the subject, another MNB reader chimed in:

Well said! People are not commodities! They are assets if treated properly.

Published on: October 4, 2021

It was an exciting weekend in Major League Baseball, as the final postseason matchups remained in flux, depending on how some of the final series of the year turned out.

Here are the teams going to the postseason:

National League

East - Atlanta Braves

Central - Milwaukee Brewers

West - San Francisco Giants

Wild Card - Los Angeles Dodgers, St. Louis Cardinals

American League

East - Tampa Bay Rays

Central - Chicago White Sox

West - Houston Astros

Wild Card - Boston Red Sox, New York Yankees

On Tuesday night, the Yankees will play the Red Sox in Fenway Park  to see who will play at Tampa Bay in the American League Divisional Series, beginning Thursday night.

On Wednesday, the Cardinals will play the Dodgers in Los Angeles to see who then will travel to San Francisco to play the Giants in the National League Divisional Series, starting Friday night.

I still think the Dodgers are the team to be reckoned with in the postseason.  But I wouldn't bet the mortgage.

It also was Week Four in the National Football League…

Baltimore Ravens 23, Denver Broncos 7

Pittsburgh Steelers 17, Green Bay Packers 27

Washington 34, Atlanta Falcons 30

Houston Texans 0, Buffalo Bills 40

Detroit Lions 14, Chicago Bears 24

Carolina Panthers 28, Dallas Cowboys 36

Indianapolis Colts 27, Miami Dolphins 17

Cleveland Browns 14, Minnesota Vikings 7

NY Giants 27, New Orleans Saints 21 (not a typo)

Tennessee Titans 24, NY Jets 27 (also not a typo)

Kansas City Chiefs 42, Philadelphia Eagles 30

Arizona Cardinals 37, Los Angeles Rams 20

Seattle Seahawks 28, San Francisco 49ers 21

Tampa Bay Buccaneers 19, New England Patriots 17