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    Published on: December 8, 2021

    Today's "MNB/In Conversation" segment is with Vivek Sankaran, the CEO of Albertsons, who talks about how his views on innovation have changed over the past two decades, even as his career has shifted from consultant to the CPG world to retailing.  And, he and KC talk about effective leadership in the 21st century, and how effective retailing goes beyond simple transactions to building relationships with customers that enable their lives and livelihoods.

    If you want to listen to this Conversation as an audio podcast, click and download here:

    Published on: December 8, 2021

    by Kevin Coupe

    Axios notes that two years ago today, "the first case of a mysterious new respiratory disease was discovered in Wuhan, China … More than 5 million people have died since that first case. Most people on earth have lived through some form of lockdown. 54% of the global population has had at least one vaccination, though the shots have been distributed unevenly."

    Since that time, there have been well over a quarter-billion cases of Covid-19 globally, and more than 50 million just here in the US;  there have been more than five million global fatalities, and more that 800,000 deaths here in the US.

    And just two weeks ago, a new variant, dubbed Omicron, was identified by South African public health officials, which Axios suggests "has deepened concerns about just how much longer the coronavirus pandemic will last."

    It has become the very definition of an Eye-Opener, from which, if we pay attention, we learn humility every day.

    Published on: December 8, 2021

    The east coast data centers of Amazon Web Services (AWS), the world's largest cloud computing services provider, went down yesterday, wreaking havoc across an already stressed supply chain just weeks before Christmas

    From the Washington Post:

    "The company offered few details about the outage, instead pointing to the Amazon Web Services health dashboard, which noted by Tuesday afternoon that the 'root cause of this issue is an impairment of several network devices.' The issue, which hit AWS data centers in the eastern United States, had extended to its monitoring and incident response technology, 'which is delaying our ability to provide updates'."

    It wasn't just outside companies hit hard by the outage.  The Post reports that "the outage hampered Amazon’s business as well. The company’s vast warehouse operations, which also use AWS, saw computer systems disrupted, spokesman Richard Rocha said in an email. Computer systems at one Midwest warehouse were disrupted starting Tuesday morning, a warehouse worker said late in the day … And Amazon’s own Ring home security business noted on its website that its app was having problems saving changes made by customers, as well as live views from its cameras failing to connect to the app. Ring spokeswoman Emma Daniels said the services’ issues were related to the AWS problems."

    From The Verge:

    "The Amazon Web Services outage that started this morning might be worse than it seemed. That’s not only because it’s reportedly cutting off some streams from Amazon Prime Video, Disney Plus, and Netflix, but because the apps that keep warehouse, delivery, and Amazon Flex workers connected are down, too.

    "Amazon has confirmed it’s 'experiencing elevated error rates for EC2 APIs in the US-EAST-1' region, meaning that connections from one of its largest server operations are spotty at best. Posts in the Amazon employee subreddits say many people can’t access the AtoZ app that manages practically everything about their jobs.

    "Warehouse workers report entire facilities shut down due to network problems and have posted pictures of the company’s automated shelves sitting motionless. Truck drivers report they used pen and paper forms to check each load out, assuming they could leave."

    From CNBC:

    "The outage began around 11 a.m. EST. As of Tuesday evening, AWS said in an updated notice that many of the underlying issues causing the outage have been mitigated.

    All issues impacting its popular EC2 cloud computing service were resolved as of 6:30 p.m. EST, while other services were still having problems, according to AWS’ status page … The outage is hitting Amazon’s retail operations at a particularly inconvenient time. The company is in the middle of 'peak season,' when holiday shoppers place a flurry of orders and the e-commerce giant is under immense pressure to make sure their packages arrive on time."

    KC's View:

    In some ways, while this outage certainly is inconvenient and ill-timed, it isn't like the Earth stopped spinning on its axis.  It slowed down a number of businesses, but it is still more than two weeks until Christmas, and I think we're all going to survive.  (I may be more sanguine about this because MNB didn't go down yesterday.  That would've been calamitous.)

    But … this also is a reminder of how fragile the whole e-commerce and cloud computing ecosystem can be.  Choose your metaphor:  DominoesJenga?  The downside of Amazon positioning itself as a company without which we cannot survive, as being integral to how we live our everyday lives, is that when it cannot deliver on that promise, even for reasons beyond its control, attention is brought to bear on the company and its activities and priorities.

    Published on: December 8, 2021

    From the New York Times this morning, a story about how there has been a "seismic shift in the way companies market to consumers who have lived past their 55th birthday. The large and rapidly expanding demographic has enormous spending power, yet it has historically been treated as a homogeneous group that spends its days either in the louche leisure of a Viagra ad or the frail dependence of a Life Alert spot.

    "In contrast, longevity experts said, today’s most effective marketing campaigns focus on the specific needs a product or service addresses, and the lifestyle of the person buying it — ideally without explicitly mentioning age at all."

    KC's View:

    I think this is absolutely on-target … and if I'm not mistaken, I did a FaceTime video years ago about how annoyed I was when I'd get robocalls that started out, "Hello, seniors!"  (I'd usually respond with an epithet and hang up.  Nobody heard me, but I felt better.)

    But the broader issue illustrated by the Times story is that marketers are better off if they address needs and interests and not age - the approach won't alienate anyone, and may seem more resonant and relevant to people.

    That's very smart - and actually along the lines of something that Albertsons CEO Vivek Sankaran and I talk about today in our "MNB/In Conversation" segment above - how it is critical to get beyond the transaction and focus on creating meaningful relationships with customers.

    It's funny … there is a piece in Engadget that focuses on a product for seniors:

    "You can now use Alexa Together to help take care of aging family members. Amazon has launched the $20 per month ($199 per year) service, with a six-month free trial available for a 'limited time.' Care Hub users get a full free year from now until December 7th, 2022. Your loved one will need an Alexa-capable device, but after that it's relatively hands-off — they ideally get more independence while you get some peace of mind.

    "The elderly relative can reach an emergency helpline if they ask Alexa to 'call for help,' but Together is mainly useful for notifications. You'll get alerts if your family member calls that line, or simply for their first Alexa interaction of the day. Use a fall detection sensor from ATS or Vayyar (more device support is coming) and you'll also get word if there's an incident.

    "Amazon stressed that seniors would still have their privacy. They have to grant permission for you to remotely assist them by adding contacts, reminders and services."

    Three things occur to me here.

    One is that if the Times story is accurate, then Amazon may have to be careful about how it is marketed.

    Second, this story takes on different meaning in view of the outage at Amazon Web Services that occurred yesterday.  I assume this system would run on AWS, and if their services went down, I can imagine it would create a lot of anxiety in families with seniors in the system.

    And third … I just want to emphasize to any of my children who might be reading this, I absolutely do not need the Alexa Together system.  At least, not yet.  No matter what you think.

    Published on: December 8, 2021

    Ahold Delhaize yesterday said that following a successful test at its Stop & Shop banner of an Instacart-powered 30-minute delivery program, it now will expand the initiative to all of the companies it owns - including Giant Food, Giant/Martin’s, Food Lion and Hannaford.

    It was just two months ago that Ahold Delhaize-owned Stop & Shop and The Giant Company of Carlisle, Pennsylvania, signed deals with Instacart for express delivery programs.  In both cases, there were $10 minimum orders and a $2.99 delivery fees.

    Kroger adopted virtually the same 30-minute Instacart program two weeks before Ahold Delhaize did.

    KC's View:

    Three questions.

    One, as Instacart rolls this program out to more and more of its retail clients, to what degree will any of them have a differential advantage?

    Two, is the real differential advantage going to Instacart, which increasingly positions itself to compete with traditional retailers, not serve their brands?

    Three, are all of these companies confusing speed with frictionless?  I think they are … and I think that this means they are thinking tactically, not strategically.

    Published on: December 8, 2021

    Ahold Delhaize-owned, Landover, Maryland-based Giant Food said yesterday that it is launching "the Ship2Me marketplace within, adding tens of thousands of new items that significantly expands Giant's assortment beyond traditional grocery.

    "Featuring categories complementary to grocery, Ship2Me will offer products traditionally not found in store, and include expansions into health & beauty, home décor, seasonal items, kitchen & dining, outdoor, pet, and premium pantry items. Giant customers throughout Washington, D.C., Maryland, Virginia, and Delaware can find Ship2Me offerings as they browse the integrated shopping experience online and can add items from the marketplace to their cart alongside any Giant Pickup or Giant Delivers products for one seamless checkout."

    According to the announcement, "Customers can filter through categories within the integrated experience to view items offered by both Giant and Ship2Me for easy one-stop shopping. Items purchased via Ship2Me are always shipped directly to Giant customers. There is no order minimum for customers purchasing only Ship2Me items and ground shipping is always free on any order."

    "Online grocery demand continues to grow, and we are constantly working to increase our capabilities and offerings to best serve the communities we operate in," said Ira Kress, President of Giant Food. "We are thrilled to be the first brand under the Ahold Delhaize USA family to be launching Ship2Me and bringing this innovative and expansive marketplace to our customers."

    Published on: December 8, 2021

    The Wall Street Journal reports this morning that Starbucks "was dealt a setback Tuesday after a federal labor authority ruled that the tallying of ballots can move ahead in a worker vote on unionizing three of the company’s cafes.

    "The ruling by the National Labor Relations Board came after Starbucks Chief Executive Kevin Johnson warned that the formation of a union at the Buffalo, N.Y.-area cafes could disrupt the chain’s relationship with its workers. A direct line to workers has made Starbucks more responsive to employees’ needs, Mr. Johnson said, and the company already has pledged better wages and increased staffing as Buffalo baristas have raised concerns."

    Today, the story notes, "Starbucks baristas in New York’s second-largest city are slated to conclude voting on whether to unionize under Workers United Upstate New York, an affiliate of the Service Employees International Union. About 100 workers are eligible to vote across three stores in the 19-location market."

    KC's View:

    Making predictions is always hazardous, so I want to emphasize here that I am only guessing … but it just feels like Starbucks may lose this one.  The issue is then whether the pro-union mentality cascades through the company, and how management deals with it.

    And then (I'm only partly joking about this), what is the over-under on when Howard Schultz tries to retake the reins at Starbucks?

    Published on: December 8, 2021

    The Wall Street Journal reports this morning that "as companies across the U.S. fight to find workers, Amazon is emerging as a de facto wage-and-benefit setter for a large pool of low-skilled workers. Business experts have long researched what is known as the Amazon effect in disrupting traditional retailers. Now Amazon’s every move is causing ripple effects well beyond the retail space in local markets throughout America, including on inflation, regional job markets and labor standards, according to an examination of federal labor data and interviews with economists, researchers, local employment officials and current and former Amazon employees.

    "The nation’s second-largest private employer is planning mock fulfillment centers in high schools to plant the seeds of future careers, sending recruiters to local fairgrounds and bombarding job boards with promises of large sign-on bonuses and pay—in some cases nearly triple the federal minimum wage.

    "The effect is magnified because Amazon churns through hundreds of thousands of employees each year, creating an even more voracious appetite for labor that often compels the company to push up compensation or improve recruitment in other ways - especially during peak times such as the holiday shopping period now under way."

    KC's View:

    It isn't just these ripple effects to which retailers need to pay attention.  I've been arguing here for some time that with every innovation, whether online or in its bricks-and-mortar stores, Amazon raises the bar on what consumers want from their retailers.  Not that retailers need to play a copycat game, but they need to be aware of these innovations, and if they can't go toe-to-toe, they certainly need to figure how to do the things Amazon cannot do or will not do, playing to and bolstering heir own strengths.

    Published on: December 8, 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 50,270,136 Covid-19 coronavirus cases, resulting in 812,205 deaths and 39,742,867 reported recoveries.

    Globally, there have been a total of 267,582,011 cases, with 5,290,523 resultant fatalities and 241,028,113 reported recoveries.   (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 71.2 percent of the total US population and 75.7 percent of the five-and0-olde population has received at least one dose of vaccine, while 60.1 percent of the total population and 63.9 percent of the five-and-older population has been fully vaccinated.

    The CDC also says that 24 percent of the total population and 25.9 percent of the 18-and-older population has received a vaccine booster shot.

    •  The Wall Street Journal this morning reports that "Pfizer Inc. and BioNTech SE said a third dose of their Covid-19 vaccine neutralized the Omicron variant in lab tests, but the two-dose regimen was significantly less effective at blocking the virus.

    "A third dose increased antibodies 25-fold compared with two doses in the Omicron variant, the companies said. Still, two-doses may prove effective in preventing severe illness from Covid-19, they said.

    "Pfizer and BioNTech are working on an Omicron-specific vaccine that they hope to have available by March.

    "The companies’ early findings come a day after scientists in South Africa reported findings from early lab tests indicating the Pfizer-BioNTech vaccine generated one-fortieth of the infection-fighting antibodies against Omicron than against the original version of the virus."

    •  From the Washington Post:

    "Covid-19 hospitalizations are rising in the United States, driven by surges in four states that represent nearly half the increase nationwide.

    "Overall, the seven-day average number of people hospitalized with covid-19 has risen by nearly 12,000 people, or 29 percent, since Nov. 10, when about 40,000 people were being cared for in hospitals, according to the Centers for Disease Control and Prevention. On Dec. 5, an average of about 52,000 were hospitalized.

    "During that time frame, Michigan’s covid hospitalizations rose by nearly 1,900, CDC data shows, marking the highest figure for a single state. Hospitalizations also went up by more than 1,400 patients each in Ohio and Pennsylvania and by more than 900 in Indiana. The four states, which have some of the highest per capita current hospitalization numbers in the nation, are responsible for almost half of the country’s increase in covid hospitalizations between Nov. 10 and Dec. 5."

    •  Axios reports that "public health officials are warning that the U.S. may be on the verge of a dangerous double whammy: COVID and flu, spreading simultaneously … The Delta variant is still circulating across the U.S., and the Omicron variant isn't far behind. On top of that, experts see potential warning signs of a bad flu season, which could leave millions of Americans vulnerable and strain health care resources."

    While only six out of 10 US residents have been fully vaccinated against Covid-19, the CDC says that even fewer have gotten their flu shots - 41 percent of adults and 39 percent of children,"significantly lower than the same point last year," Axios writes.

    It is madness that the anti-vaccination madness that apparently has pervaded a sizable percentage of the population because of Covid seems to have spread to flu shots.  Maybe, if we really put our minds to it, we' can drive even greater skepticism about vaccines and give things like measles, chicken pox and polio new life.  

    Published on: December 8, 2021

    •  The Chicago Tribune reports that Albertsons-owned Jewel-Osco has "opened its first micro-fulfillment center Tuesday in southwest suburban Westmont, taking a page out of the game-changing Amazon playbook.  Located in a former Hobby Lobby next to a bricks-and-mortar Jewel store, the high-tech, 20,000-square-foot warehouse will be able to fill 1,000 online orders a day, expediting grocery deliveries to shoppers within 20 miles."

    “This MFC (micro-fulfillment center) carries approximately 6,500 items, which will cover about 60% of what you’d normally see in an online order,” Mike Withers, president of Jewel-Osco, said. “Then the rest of the order will be selected from the Jewel-Osco that’s adjacent to this building.”

    Published on: December 8, 2021

    •  From the Wall Street Journal this morning:

    "Companies are planning for steeper wage increases next year than at any point since the 2007-2009 recession, according to a new report, amid a tight labor market and the highest inflation in three decades.

    "A survey by the Conference Board set for release Wednesday finds that companies are setting aside an average 3.9% of total payroll for wage increases next year, the most since 2008.

    "The survey also shows that companies are planning on raising salary ranges, which would result in higher minimum, median and maximum salaries. That suggests pay raises could be broad-based and affect workers across a company’s pay scale.

    The results are a sign the recent acceleration in private-sector wages is likely to carry over into 2022.

    "Such a sustained rise in wages could push consumer prices higher, as companies raise prices to compensate for pay increases. The dynamic of higher wages and prices could further stoke inflation and increase the chance of a spiral of rising wages and prices feeding on each other that could be difficult to stop."

    •  The New York Times reports this morning that "about 1,400 striking workers at four Kellogg cereal plants in the United States have rejected a tentative agreement on a five-year contract negotiated by their union, the company said on Tuesday.

    "The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents the workers, did not reveal the vote totals but said in a statement that its members had 'overwhelmingly voted' against the agreement."

    Kellogg said in a statement that no further bargaining sessions were scheduled, and that it would “hire permanent replacement employees in positions vacated by striking workers.”

    •  The Pittsburgh Business Times reports that Massachusetts-based BJ's Wholesale Club will open its first store in Pittsburgh, Pennsylvania, this week, with a second location scheduled for early 2022.

    •  Bloomberg reports that "Daily Harvest, a company that specializes in frozen-food products, including ready-to-blend smoothies, is valued at $1.1 billion after its latest round of funding, said founder and Chief Executive Officer Rachel Drori.

    "The New York-based startup reached so-called unicorn status by raising $77 million in an equity-funding round led by Lone Pine Capital LLC that included participation from Lightspeed Venture Partners, an existing investor."

    The story notes that Daily Harvest "ships frozen products including soups, latte pods, almond milk, plant-based ice cream and flatbreads directly to consumers."

    Published on: December 8, 2021

    •  Raley’s has announced that "Laura Croff has been promoted to Chief Human Resources Officer of The Raley’s Companies, a newly formed enterprise that will oversee the organization’s independent operating divisions. Laura has served in various leadership capacities at Raley’s over the past 20 years, most recently as Senior Vice President of Human Resources."

    The move comes as Raley's prepares to complete its acquisition of Bashas’ Family of Stores later this month.