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    Published on: November 11, 2021

    Supply chain issues have some brands thinking that it is a good time to pull back on advertising and promotion activities and save some money.  But KC thinks that lessons learned on a racetrack suggest that this is ther wrong approach.

    Content Guy's Note:  An earlier MNB piece referenced in the FaceTime video can be found here.

    And, here are some pictures of the events mentioned in the video.

    Published on: November 11, 2021

    The October Brick Meets Click/Mercatus Grocery Shopping Survey is out, reporting that "the U.S. online grocery market generated $8.1 billion in sales during October, driven by $6.4 billion from the pickup/delivery segment and $1.7 billion from ship-to-home."

    This is up slightly from September's reported $8.0 billion in sales during September.

    The survey concludes that "during October, about 50% of U.S. households (63.8 million) bought groceries online, whether just a few items or a full basket of goods."

    According to the survey, "Pickup continued to be the most popular way to receive online orders in October, with a monthly active user (MAU) base of 33.4 million households. Ship-to-home’s MAU base had 29.8 million households but has contracted each month since July 2021. Delivery served 26.2 million households in October but has experienced more volatility in month-over-month changes lately … The average number of orders placed by MAUs in October 2021 was 2.74, holding steady over the last few months. However, this order frequency is still 35% above pre-COVID levels and nearly 6% below the record high set in May 2020 when market conditions were significantly different. This illustrates how buying behavior is stabilizing versus last year at elevated levels compared to before the pandemic."

    “As the number of new COVID-19 cases in October continued to decline, key performance indicators (KPIs) for monthly active users, order frequency, and average order value are rebalancing from the record highs of 2020 and now provide a more stable and sizable base for building and forecasting the business in 2022 and beyond,”David Bishop, Partner at Brick Meets Click, said in a prepared statement.

    KC's View:

    Balanced.  Stabilized.  And permanent.  If you're not playing, then the odds are pretty good that you're not staying.

    Published on: November 11, 2021

    CNBC reports that new Bank of America research shows that "birth rates are up, more pregnancy tests are being sold, and more couples say they are trying to have a baby … That could spell good news for grocers, big-box stores and warehouse clubs that sell diapers, strollers and other baby merchandise - or are simply located closer to suburban homes where new parents may settle."

    Robby Ohmes, a equity research analyst with Bank of America, predicts that "the baby boom could start this year. Among the beneficiaries, he called out Albertsons, Kroger, Dollar General and BJ’s Wholesale Club.

    "Millennials have surpassed baby boomers to become the largest generation in the country, according to the U.S. Census Bureau. The group — made up of roughly 72.1 million people — ranges in age from 25 to 40, according to the Pew Research Center."

    The story goes on:

    " Sales of pregnancy tests have grown by an average of 13% year over year since June 2020, according to data from Nielsen and research by Bank of America. This compares with an average of up 2% year over year from 2016 to 2019.

    "If this plays out, it would reverse a decline in births during the pandemic. Live births increased 3.3% in June 2021, the highest level of growth seen since 2013, according to Bank of America research.

    "In a monthly survey by the company, 11.3% of respondents said they or their partner are expecting or trying to have a baby over the next 12 month period. That survey was conducted in October with approximately 1,000 people. It marked an all-time high since Bank of America launched the survey in December 2020."

    KC's View:

    Which means, I suppose, that we're going to hear a lot of singing…

    Published on: November 11, 2021

    IRI has posted its predictions for Thanksgiving shopping trends, and here are some key findings:

    •  "More shoppers than ever are shopping early. Sales uplift of Thanksgiving items in the three-week period ending Oct. 31 was 63%, compared to a historical uplift of 45% in years prior. This trend accelerated during the week ending Oct. 31, 2021, with sales lift up 86% compared to a historical average of 54%, driven largely by sales of wet broth/stock, turkeys, pie pastry filling and stuffing. Following widespread media reporting on supply chain challenges, 34% of consumers reported they are stocking up on certain items because they are concerned that the products might not be available the next time they shop. By closely monitoring these uplifts, manufacturers and retailers can more easily meet the needs of consumers with right products, prices and promotions."

    •  "Shopping behaviors differ significantly across income level and age demographics.

    "Lower-income shoppers wait to buy meat and sides items until closer to Thanksgiving, while middle- and high-income households are more likely to shop those categories ahead of the holiday week. However, data shows that households at all income levels buy pies, baking products and beverages in the weeks leading up to the holiday. Manufacturers and retailers without supply constraints who are targeting price-sensitive consumers should focus promotional efforts on pies, baking products and beverages as early as three weeks before Thanksgiving but wait to discount meat and sides until the week before or the week of the holiday.

    "Older households are typically more likely to shop for their Thanksgiving supplies early, while younger households are more likely to wait to shop until the week of Thanksgiving, and are also more open to new traditions and brand-switching. Manufacturers and retailers should launch holiday digital campaigns when holiday shopping is most relevant to their target demographic, and focus promotions targeting younger households on products that attract shoppers to a new category."

    •  "Meat and Pies categories have the most out-of-stock risk. Despite the continued acceleration of demand for certain Thanksgiving items ahead of the holiday week, in-stock levels for the week ending Oct. 31 were largely consistent with levels reported the week prior, with the exception of meat, which was down 3 percentage points. Meat and pies continued to be the only categories that show lower in-stock percentages compared to the year-ago period, down 13 and 3 percentage points, respectively." 

    KC's View:

    One of the things I keep noticing is how supermarkets are selling frozen turkeys for Thanksgiving, more than two weeks before the holiday.  I could be wrong, but is strikes me as earlier than in pst years … and is an appropriate move by retailers to get consumers to buy early and avoid potential shortages.

    We've never been turkey eaters on Thanksgiving - the kids always ask for filet mignon and short rib mac and cheese, and it always seems to me that the best kind of tradition is the kind of you create yourself.  This year, though, we're actually going to a relative's house - she has a new grandbaby - and considering all the shortages, I've never been so glad not to have to do Thanksgiving shopping.

    I'm bringing the wine - excellent Pinot Noir from Oregon's Willamette Valley.  Who could ask for anything more?

    Published on: November 11, 2021

    The Washington Post reports that "the on-again, off-again Subway tuna lawsuit is on again, and this time the plaintiffs are revealing their test results. They claim that 19 of 20 tuna samples from Subway locations throughout Southern California had no detectable tuna DNA, and all of the samples contained at least one other animal protein, whether chicken, pork or cattle.

    "Subway’s marketing, labeling and advertising, the lawsuit contends, duped the plaintiffs 'into buying premium priced food dishes based on the representation that the tuna products contained only tuna and no other fish species, animal products, or miscellaneous ingredients.'

    "If true, the claims would raise more than legal issues for one of the largest fast-food chains in the world. It would raise ethical, religious and dietary issues for consumers who, for example, avoid red meat or don’t eat pork because of their beliefs."

    “The plaintiffs’ latest attempt to state a claim against Subway is just as meritless as their prior attempts,” Mark C. Goodman, an attorney representing Subway, tells the Post. “These claims are false and will be proven to be completely meritless if the case gets past the pleading stage.”

    KC's View:

    Seems to me that this ought to be an easy case to decide.  Science is science, tests are tests, and if there is any animal protein in the tuna fish other than tuna, Subway ought to be found guilty.  Simple as that.

    What also ought to be simple is that the company's entire credibility and value proposition ought to be thrown into doubt.  Subway may not even be able to survive, and I'm not sure it should.

    And if there's only tuna in the tuna?

    Well, then … the plaintiffs not only ought to shut the hell up, but also ought to be forced all of Subway's legal bills.

    Next case.

    Published on: November 11, 2021

    CNN reports that when 2022 dawns in about seven weeks (when the hell did that happen?), Kmart will have just six locations open in the US.

    Some context from the story:

    "Kmart is owned by Sears, which purchased the chain out of bankruptcy in 2005. There were 2,100 Kmart locations at the time of its 2002 bankruptcy filing, and 1,400 when it was purchased by Sears. The combined company, Sears Holdings, itself filed for bankruptcy in 2018, and although it survived that process, it has since been closing stores under both brands in what retail experts describe as a 'slow-motion liquidation.":

    "Obviously they are all going to be gone shortly," Mark Cohen, director of retail studies at Columbia University, tells CNN. "This movie has ended, and we're watching the credits roll endlessly."

    KC's View:

    I would have chosen a different metaphor.  More like a long, seemingly endless death scene with wrenching and convulsing.

    CNN says that "a spokesperson for Transformco, the company created from the bankruptcy of Sears Holdings, did not respond to a request for comment on its closing plans."  Because what, exactly, are they going to say?

    (How about, to paraphrase an old joke, "We wanted to be in retail in the worst way, and we achieved our goal.")

    Published on: November 11, 2021

    Published reports say that Amazon is considering the renaming of its free, ad-supported IMDb television channel, believing that a rose by another name might actually smell a little sweeter.

    "IMDb TV," Amazon is said to believe, which was named after the popular Internet Movie Database and acquired by the online retailer in 1998, is a cumbersome and not particularly resonant name for a channel that it hopes will grow in popularity in the near future.  While to this point it has largely carried old TV series and movies, Amazon has been investing in proprietary content for the channel.  For example, a spinoff of the popular "Bosch" series, seven series of which streamed on Amazon Prime Video, recently completed production, and "Judge Judy" Sheindlin also has been signed to do a new series for the service.

    KC's View:

    I would agree that IMDb ain't a great name for a streaming channel … but I'm not persuaded that changing it makes a lot of sense - there's a lot of brand equity in that name, at least for those of us who use IMDb (the service, not the channel) with some level of frequency.  It'll all depend on what the replacement name is.

    Maybe Amazon Sub-Prime?

    Published on: November 11, 2021

    The Washington Post has a story about how "corner pharmacies, once widespread in large cities and rural hamlets alike, are disappearing from many areas of the country, leaving an estimated 41 million Americans in what are known as drugstore deserts, without easy access to pharmacies.

    "An analysis by GoodRx, an online drug price comparison tool, found that 12 percent of Americans have to drive more than 15 minutes to reach the closest pharmacy or don’t have enough pharmacies nearby to meet demand. That includes majorities of people in more than 40 percent of counties."

    You can read the piece here.

    KC's View:

    I read this story, and I see why a strategy that uses e-commerce to connect with these parts of America, perhaps supplemented by some sort of drone service that can get needed medicines to people quickly, would seem to make sense - whether developed by Amazon or some other retailer.

    Published on: November 11, 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 47,647,745 Covid-19 coronavirus, resulting in 780,236 deaths and 37,701,765 reported recoveries.

    Globally, there have been 252,337,780 total cases, with 5,092,273 resultant fatalities and 228,362,421 reported recoveries.  (Source.)

    Published on: November 11, 2021

    •  From CNBC this morning:

    "Chinese e-commerce giant JD.com has racked up 311.4 billion yuan ($48.6 billion) in sales across its platforms as of 14:09 p.m. Beijing time during the Singles Day shopping event, smashing through its record last year.

    "The figure JD.com released is referred to as transaction volume. It is the amount of money that is transacted across its e-commerce platforms and does not directly translate into revenue for the company — and it does not take into account returned items.

    "Still, it’s an indication of the appetite from shoppers on Singles Day or Double 11, a major shopping event in China that eclipses Black Friday and Cyber Monday in the U.S. in terms of sales.

    "Last year, JD’s transaction volume totaled 271.5 billion yuan. There are still several hours left of Singles Day this year with JD’s sales ending at midnight China time on Friday, so that transaction volume will increase."



    •  Uber Eats has announced a partnership with Serve Robotics, which calls itself a "leading autonomous sidewalk delivery company," for a new "on-demand robotic delivery service … available to Uber Eats customers starting in Los Angeles early next year."

    Dr. Ali Kashani, co-founder and CEO of Serve Robotics, noted in a prepared statement that "Uber is our first commercial partner and will be a strong source of demand for us as we use contactless delivery to power community commerce at scale."

    Published on: November 11, 2021

    •  The Dallas Morning News reports that Walmart has broken ground on an $800 million supply chain facility in Lancaster, Texas, a suburb of Dallas, that the story says "will be twice as productive as its traditional e-commerce fulfillment centers and grocery distribution centers that supply stores … A 1.5-million-square-foot e-commerce fulfillment center and a 730,000-square-foot grocery distribution center will boost Walmart’s capacity and the speed of delivery to its Dallas-Fort Worth customers and stores."

    The two buildings will employ roughly a thousand people, the story says.

    Published on: November 11, 2021

    •  The Washington Post reports that "prices rose 6.2 percent in October compared with a year ago, the largest annual increase in about 30 years, as rising inflation complicates the political agenda for the White House and policymakers’ road map for the economy heading into the end of the year.

    "Forecasters expected a surge in October’s inflation data, released Wednesday by the Bureau of Labor Statistics, in large part because of soaring gas and energy prices, plus ongoing supply chain backlogs in the used-car market. The energy index rose 4.8 percent in October compared with the month before, as the gasoline index increased 6.1 percent. Such high energy and gas prices are spilling into the costs of just about every other good, economists say, and pinching an already strained supply chain.

    "Yet, inflation expanded to other categories, increasing throughout the economy, with the BLS noting “broad-based” higher prices for energy, shelter, food, used cars and trucks and new vehicles among the larger contributors. The indexes for medical care, for household furnishing and operations, and for recreation all increased in October."



    •  Fox Business reports that the US Department of Justice has filed a lawsuit against Uber, taking aim at the company's policy "'of charging passengers wait time fees' with no exceptions to disabled passengers 'who take longer than two minutes to board or load into the vehicle'."

    According to the story, "The lawsuit, filed in the U.S. District Court in the Northern District of California, claims the ride-sharing service violated Title III of the Americans with Disabilities Act (ADA). In addition, the lawsuit calls for the court to order the company to comply with federal law that protects disabled people from discrimination and implement policies which adhere to the needs of disabled passengers."

    An Uber spokesperson tells Fox News that "the company had been in 'active discussions' with the DOJ prior to the 'disappointing lawsuit'."

    Published on: November 11, 2021

    •  Kroger announced that Laura Gump, vice president of merchandising for the Kroger Houston division, has been promoted to the division's presidency.

    She succeeds Joe Kelley, who earlier this month was named president of Kroger-owned King Soopers, based in Denver.



    •  Publix Super Markets announced that Chris Mesa, the comp[any's Director of Tax and Treasury, will be promoted to Vice President and Controller.

    At the same time, Doug Stalbaum, Publix's Director of Business Analysis and Reporting, also be promoted to Vice President and Controller.

    Published on: November 11, 2021

    Got several emails yesterday responding to the piece about how Sprouts has been unable to deliver on a planned strategic shift.

    One MNB reader wrote:

    Sprouts needs improved digital presence - primarily their digital circular - and the rumor is that they are looking for a new digital circular provider.

    My suggestion, for what it’s worth, is that they need a better digital messaging presence.  Web and mobile digital circulars, mobile push messaging, digital advertising placements, and targeted email campaigns as the modern way to communicate their value proposition.

    And from another reader:

    The transformation Jack Sinclair has made at Sprouts is amazing – FOR THE WRONG REASONS. I have been a loyal Sprouts shopper.  They have been a terrific option to Whole Foods and also have been “budget friendly” in providing organic foods.  Also their stores have been a pleasure and enjoyable experience to shop---odd for a grocery, right??

    When Jack Sinclair was named CEO, Sprouts was experiencing terrific growth and seemed all they had to do was “turn the heat up” on expansion.  So they guy comes in and changes things.  His track record at Wal-Mart was un-spectacular.  His track record at $.99 Stores was unspectacular.

    I look forward to the day when boards of directors stop hiring people based on WHERE THEY USED to work versus hiring based on WHAT THEY HAVE ACTUALLY achieved.  The BOD’s need to remember, it  is a very rare person who MADE THE COMPANY.

    And another:

    Sprouts needs to regain that Treasure Hunt vibe. I live in metro Atlanta, where we are blessed with Publix, Kroger, Target, TJ’s, Whole Foods, Fresh Market, Costco etc in every suburb.

    I used to pop into Sprouts every two weeks to purchase brands stocked only at Sprouts.

    Now those brands have been discontinued, replaced by the same brands sold at Publix & Kroger and Sprouts private label.

    Sprouts and other small format retailers like Aldi & Lidl need to create a compelling reason for shoppers to add another stop.



    Regarding the merger of Price Chopper/Market 32 with Tops, and the prevailing opinion that this sets up the company to be acquired by a larger entity, one MNB reader wrote:

    I always thought it would be a great move for PC and now Tops to become part of the Wakefern Co-Op.  They could have tremendous power within that organization and still remain independent.



    As a result of that merger, C&S is acquiring 12 stores as mandated by the federal Trade Commission (FTC) and converting them to a banner with considerable dust on it - Grand Union.

    One MNB reader wrote:

    C&S bought the stores as a defensive move to protect their distribution.  If the locations were sold to another player, C&S could lose those rights.  They have done this for years.  To revive the GU banner under the tutelage of C&S will only be an epic fail.   Wegmans thanks you.

    MNB reader Phil Herr wrote:

    At least it isn’t A&P!

    And from another reader:

    Is C&S crazy bringing this brand back? Back in 1991 Dannon moved me from Michigan to New Fairfield, CT and there was a Grand Union downtown. What a horrible store with aging equipment, dirty shopping carts and lack of customer service. This about as crazy an idea as General Motors introducing a new model in Mexico called Nova which loosely translates into “doesn’t run”….



    I did a FaceTime video yesterday wondering why cassette tapes seem to be coming back, which prompted one MNB reader to write:

    Hey don’t knock cassette’s. Still have one in my 1994 Toyota PU and have used it recently listening to Elvis…..yes I am old.

    Also have have original  cassette  deck players, some friends say I am junk collector….

    Still waiting for the Bell bottoms to come back…..

    But wait a draw back with cassette tapes is that I have yet to find a way to program them, so I can listen thru my hearing aids….  Music always sound better with hearing aids!

    MNB reader Joe Axford wrote:

    What's next, 8 tracks?

    Never know, nostalgia being what it is.

    And MNB reader George Denman wrote:

    As you probably know, like yourself I am a car aficionado owning a 1973 Corvette convertible, a 2001 Corvette convertible and a 2001 Cadillac STS. Both latter cars have their original stereo components including cassette players. But I couldn’t begin to imagine risking putting another cassette into their units. Don’t people remember the tapes getting twisted and caught in the unit heads? Now on the other hand I did ask my wife for a new turntable for Christmas. I have several original Beatle albums unopened purchased in Europe back in the 70’s including the 1st Beatles album under the name the Quarrymen. Can’t wait to play these classics.



    Yesterday, MNB took note of this Bloomberg story:

    "President Joe Biden spoke with the chief executive officers of Walmart Inc., United Parcel Service Inc., FedEx Corp. and Target Corp. on Tuesday to discuss easing supply chain bottlenecks, according to a White House official.

    "Biden and the executives - Walmart’s Doug McMillon, UPS’s Carol B. Tome, Fred Smith of FedEx and Target’s Brian Cornell - talked about potential moves to speed up deliveries and lower prices, the official said, without elaborating.

    "The executives told the president that store shelves will be well stocked for the holiday season, the official said. Biden has been under pressure to clear supply-chain logjams and ease inflationary pressures as consumers begin their holiday shopping."

    I commented:

    The problem is that while Walmart, Target, UPS and FedEX have the wherewithal to devote resources to getting products on the shelves, I'm not sure that this will translate to an up-and-down-the-supply-chain solution that will make things better for small retailers and suppliers.  They're likely to continue to have problems getting products, and for at least some of them, this will create all-new issues that will build on the problems suffered during the pandemic.

    One MNB reader wrote:

    Seems there are two major components missing from these talks – the suppliers and transportation companies.  Not many retailers receive their deliveries via FedEx or UPS.  And while retailers can promise that their shelves will be full, they have absolutely no control over whether the manufacturers will be able to successfully deal with labor and material shortages.  There is a shortage of aluminum cans; what are Walmart, Target, UPS and FedEx going to do to fix that?  There are labor shortages, preventing many manufacturers from being able to run at full capacity – same question as the last one.  This is posturing at its best.

    And from another reader:

    The worst problem seems to be there is absolutely no aspect of everyday life that the federal government doesn't want to get its dirty hands around.

    And you'd like the government to do nothing?  I imagine there might be some folks who would have a complaint to two about that.