business news in context, analysis with attitude

Published on: January 24, 2022

KC has some thoughts from the shopper's point of view about what retailers can and should be doing to mitigate supply chain issues that are creating empty shelves - and, he suggests, even challenging brand loyalty and established habits - and staffing issues that result in long lines at checkout.  You may not be able to repair this broken chain, at least not right away, but you can do things to prevent lasting damage (like watching your customers escape through it).

Published on: January 24, 2022

The Denver Post reports that "striking King Soopers employees across the Denver area left the picket lines Friday after the company and union negotiators announced a tentative agreement … The strike that began Jan. 12 covered more than 8,000 King Soopers employees at 78 stores in Boulder, Parker and across the metro area."

Members of the United Food and Commercial Workers Local 7 will vote today on whether to ratify the three-year agreement, details of which have not yet been released.

Published on: January 24, 2022

Much has been made in recent months of the degree to which the pendulum has swung in labor's direction, with workers - organized or not - able to demand and/or negotiate for higher wages at a time of low unemployments and millions of unfilled jobs.

But the Boston Globe has a story suggesting that despite the higher ages, workers may not in fact be satisfied - since inflation in many cases has wiped out whatever financial giants they may have made.

The Globe writes that "although average hourly wages rose 4.7% last year, overall wages fell 2.4% on average for all workers, when adjusted for inflation, according to the Labor Department.

"The only sector where pay increases outpaced inflation last year was in the leisure and hospitality industry, where workers generally make the lowest hourly wages of any sector. Workers there saw a 14% average raise from about $17 an hour to more than $19.50, according to an analysis of Labor Department data."  At the same time, "Gas prices are up 50% from a year ago, while the price of meat, fish and eggs is up nearly 13%, according to the U.S. consumer price index."

The potential problem is that this could all spiral out of control: "Most economists consider this round of wage growth a natural result of the strong economic recovery, as well as competition for workers, but some worry the cycle of high inflation and demand for higher wages can become self-reinforcing, as they were during the late 1970s and early 1980s.

"If consumers and businesses start expecting inflation to continue for a long time, each side will keep trying to outbid the other - businesses by charging higher prices and workers by asking for higher pay - fueling yet more inflation."

Published on: January 24, 2022

Advertising Age reports that Walmart has informed its home good vendors - supplying categories that include "kitchen and dining products, home décor, bath and shower, bedding, furniture, and storage and organization products" - that all their products must "carry radio frequency identification (RFID) tags by September, and projects it will extend the mandate to more categories over time, in a major expansion of a tracking technology that appeared all but dead only a few years ago."

According to the story, "The full-on embrace of RFID by the biggest U.S. retailer brings large new swaths of product categories into the so-called 'internet of things.' That could eventually spawn new marketing, analytics and research capabilities - particularly in studying in-store behavior or enabling touchless checkouts.

"But for now the move is aimed at improving Walmart’s supply-chain efficiency by making it easier to track items everywhere they go in stores, which has become a much greater concern as the retailer’s curbside pickup and Walmart+ delivery businesses grow. Customers of either service can attest that it’s common for Walmart’s app or website to show items in stock and ready for delivery from stores when they’re really not, which leads to last-minute substitutions and sometimes causes cancellations or forces the retailer to make good on free deliveries that fall below order minimums."

Published on: January 24, 2022

As part of its "Corner Office" column, the New York Times has an interview with CVS Health CEO Karen S. Lynch, an experienced insurance executive who came to the company through its acquisition of Aetna and took over from longtime CEO Larry Merlo last year.

Some excerpts about ther challenges of running a company with "health" in its name during a pandemic:

•  "I stepped back and said, 'What is our true purpose of the company?'  What I want to do is make sure that people have access to high-quality, affordable health care, and that we as a company can help people navigate the health care system. Because we’re so central in people’s lives, we have the ability to be even more central in people’s lives. That’s the mark I really want to make, is to be part of someone’s everyday life where if they’re healthy, they’re engaging with us to stay healthy. If they have health issues, they’re engaging with us so that we can help manage and navigate that."

•  "Our role is offering an alternative site of care, either in our retail locations, or in the home with virtual connections. We’re entering into the primary care space because we believe that primary care has real significant influence over the cost of health care.

"And I’m pretty passionate about the fact that the head is attached to the body, and most people experience behavioral health issues when they are experiencing physical health issues. We only deal with the physical health. We don’t deal with the behavioral health part, and I think there’s more we can do."

•  We’ve been working in the communities to educate people. We actually put vans in communities and we’ve used all of our resources. When we started, we put the stores in these underserved communities first, and about 40 percent of our vaccines are in those underserved communities. Obviously there’s more work to be done. It’s education on all of our parts. We’re doing our part. I know the government is doing their part. And I’ve also done it with a little bit of a stick with my own team, by doing a vaccine mandate.

"We’re in health care, and this is a public health issue, and we should be on the forefront of that. I don’t think vaccines are going away. I think this is going to be an endemic thing, and I think we’re going to see these annual shots. That will be part of a role we continue to play in keeping America healthy."

Published on: January 24, 2022

The Street reports that billionaire entrepreneur Mark Cuban has launched a new online pharmacy - dubbed the Mark Cuban Cost Plus Drug Co. - that is designed to directly compete with the likes of CVS, Walgreen, Rite Aid, Walmart and Amazon in the increasingly crowded prescription drug business.

According to the story, the business launch comes "just weeks after establishing its pharmacy benefit manager operation with a goal to help shield consumers from inflated drug prices … Mark Cuban Cost Plus can bypass middlemen and large markups as a registered pharmaceutical wholesaler, the company said. The pharmacy's prices reflect actual manufacturer prices plus a flat 15% margin and pharmacist fee."

"We will do whatever it takes to get affordable pharmaceuticals to patients," said company CEO and co-founder Alex Oshmyansky in a prepared statement.  "The markup on potentially lifesaving drugs that people depend on is a problem that can't be ignored. It is imperative that we take action and help expand access to these medications for those who need them most."

The story goes on:

"Consumers can expect a seamless, secure e-commerce experience as they navigate the pharmacy's website, built and powered by digital healthcare company Truepill.

"Customers will have access to prescription fulfillment and delivery through Truepill's nationwide pharmacy footprint.

"The Dallas-based online pharmacy will be a cash pay venture, since the company refuses to pay spread prices to third-party pharmacy benefit managers in order to be allowed to process insurance claims. Patients can immediately purchase a broad array of medications at prices often less than what most insurance plans' deductible and copay requirements would total, the statement said."

Published on: January 24, 2022

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, we've now had 71,925,931 total cases of the Covid-19 coronavirus, resulting in 889,197 deaths and 44,365,669 reported recoveries.

Globally, there have been 352,456,465 total cases, with 5,616,183 resultant fatalities and 280,341,540 reported recoveries.   (Source.)

•  The Center for Disease Control an d Prevention (CDC) says that 75.5 percent of the total US population has received at least one dose of vaccine … 63.4 percent is fully vaccinated … and 39.9 percent has received a vaccine booster shot.

•  From Bloomberg:

"President Joe Biden’s chief medical adviser expressed optimism that the omicron surge that has pushed Covid-19 infections and hospitalizations to records will soon peak, though that decline won’t be uniform throughout the U.S.

"'Things are looking good,' Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said on ABC’s 'This Week' on Sunday. 'We don’t want to get overconfident, but they look like they’re going in the right direction right now.'

"Infections are 'starting to come down rather sharply' in the U.S. Northeast and Midwest, Fauci said, in line with the variant’s trajectory in South Africa and other places. He said he expected that states in the South and West where cases are still rising will soon follow the same downward path, depending in part on vaccination rates."

Fauci said there are two likely scenarios.  One is that Covid-19 becomes “less virulent” and can be controlled, but the "worst-case scenario is the emergence of a still-more dangerous variant, he said. He said this possibility is more reason for people to get vaccinated and receive booster shots, and to make testing and medical treatment more widely available."

Published on: January 24, 2022

•  In Canada, Loblaw Companies has been caught napping .. except that in this case, it is a good thing.

Here's the announcement:

"Canada's leading omnichannel and direct-to-consumer specialty sleep retailer announced today the launch of the Sleep Country store on Loblaw Marketplace, the grocery retailer's digital offering, selling thousands of products, not sold in store … Sleep Country will be the exclusive provider of traditional mattresses on Loblaw Marketplace, offering a wide assortment of mattress brands such as Tempur-Pedic, Sealy, Serta, Simmons, Simba, Purple, Casper and more, along with the company's white-glove home delivery and installation service.  Also available will be a leading assortment of sleep essentials including pillow, sheets, duvets, mattresses-in-a-box and lifestyle bases."

The announcement notes that, "launched online in 2019, Loblaw Marketplace carries a wide variety of products and trusted brands in a variety of categories including home, baby, pet, toy and more, allowing customers to earn PC Optimum points on purchases delivered directly to their home."

•  Engadget reports that "the National Labor Relations Board (NLRB) has determined that Amazon illegally fired former worker Daequan Smith for trying to unionize its warehouses in Staten Island, New York. Smith, who was one of the organizers for the Amazon Labor Union (ALU), was fired in October 2021. The group filed an unfair labor practices complaint with the NLRB after his dismissal, accusing the company of illegal retaliatory firing over Smith's outspoken support for unionization."

According to the story, "the board has found merit in the group's allegations and plans to issue a formal complaint against the e-commerce giant if the case doesn't settle … Smith wasn't the only ALU organizer that Amazon had fired. ALU president Chris Smalls also lost his job after he held a walkout at Amazon's JFK8 facility over the e-commerce giant's handling of COVID-19 safety at the warehouse in 2020."

Published on: January 24, 2022

•  Bloomberg reports that "department store retailer Kohl’s Corp. is fielding interest from two suitors at the same time that it’s grappling with multiple activist investors pressuring it to sell.

"The latest potential takeover offer comes from Sycamore Partners, which has reached out to Kohl’s about a deal, according to people familiar with the matter, just days after another bidder emerged with a $9 billion bid backed by hedge fund Starboard Value LP. 

"It’s unclear how much Sycamore, a private equity retail specialist, is willing to pay for the company, the people said, asking not to be identified because the matter is private. Talks are preliminary and might not result in a transaction, they added."

Among's Sycamore's previous retail bets are Staples, Ann Taylor Loft and Express

The New York Times writes that "Kohl’s, based in Menomonee Falls, Wis., and founded in 1962, is a department store focused on casual wear, home wares and sporting goods. Unlike other retailers like Nordstrom, Kohl’s stores are frequently found in smaller shopping centers, rather than malls. That has made its real estate more valuable as malls have fallen on hard times."

At the same time, Kohl's has been under pressure from activist investors to spin off its e-commerce business into a separate entity.

•  The Financial Times reports that "Nelson Peltz’s activist hedge fund Trian Partners has built a stake in Unilever, ratcheting up the pressure on the FTSE 100 company after its abortive pursuit of GlaxoSmithKline’s consumer health business.

"People with direct knowledge of the matter told the Financial Times that the $8.5 billion New York-based hedge fund had taken a position in the UK group’s shares, adding to the challenges facing chief executive Alan Jope.

"The Unilever boss is already facing simmering shareholder discontent after its £50 billion attempted takeover of GSK Consumer Health. He now confronts a fierce activist fund known for demanding streamlining and governance reforms at consumer goods groups including Procter & Gamble, Sysco and Mondelez … The revelation comes after a tumultuous week for Unilever in which it was forced to acquiesce to shareholder demands that it halt its pursuit of GSK’s consumer health business after three failed bids."

Published on: January 24, 2022

•  From NJBiz.com:

"Jim Dorey will join Inserra Supermarkets Inc. as senior vice president, effective immediately, to eventually transition to the roles of president and chief operations officer when Ron Onorato retires within the next two years.

"Dorey previously served as president of Price Rite Marketplace, a registered trademark of Wakefern. He first joined the retailer-owned cooperative in 2004 as a manager in the Real Estate and Business Development department, and then moved to the Frozen Foods division at Wakefern as procurement manager.

"In 2009, he joined the Price Rite team as the director of marketing and rose through the ranks until he was promoted to president in 2017. In that role, he led the company through a rebranding effort that included a refresh of all 62 stores."

Published on: January 24, 2022

On Friday I did a FaceTime video about a new federal program that will train people to drive tractor trailers at age 18, a move that is designed to address a national trucker shortage.

To be honest, I was always a little nervous when my kids were that age and I let them drive my car;  this solution strikes me as a solution that is potentially ingenious.  Or scary.  Maybe both.

One MNB reader responded:

If the US military allows 18 year old men and women to operate expensive, technical machinery, these same young people can certainly be trained to drive trucks.  Besides, they will be provided with extensive training and monitoring that will insure that these drivers are far more competent than your average teenage driver. 

And, from MNB reader Dale Tillotson:

I agree with everything thing you say on this subject, then my inner self tells me about this same age group building roads driving big rig equipment and getting shot  or blown up in Afghanistan (pick the war).

Fair point.

Not to digress, but doesn't this logic also mean that maybe we should make it legal for these folks to drink a beer?

The other day we took note of a New York Times piece about how "the pandemic has led to price spikes in everything from pizza slices in Manhattan to sides of beef in Colorado. And it has led to more expensive items on the menus at fast-food chains, traditionally establishments where people are used to grabbing a quick bite that doesn’t hurt their wallet."

I commented, in part:

For supermarkets, the word for this is "opportunity" - certainly they are having their own supply and pricing issues, but in the end, food bought in the supermarket is almost always going to be less expensive than restaurant food.  It is going to last longer, since leftovers can be one of the great pleasures in life.

Prompting one MNB reader to write:

Thinking your list of greatest pleasures needs to be tightened up a bit.

On the contrary, I've rather happy with the idea that I take great pleasure in some many things - it makes life a lot more interesting sand fulfilling.

Though, to be honest, a little more frustrating over the past two years, when a number of those things were canceled out by the pandemic.  Which is when great leftovers come in - like leftover meatloaf turned into a sandwich … leftover potatoes and chorizo sausage mixed into a frittata … leftover risotto … leftover pizza … shall I go on?

Finally, I got several emails about my choice of old movies that I referenced in Friday's OffBeat…

MNB reader Stacy McCoy wrote:

If you’re a Cary Grant fan, have you ever seen him in Father Goose? It’s a great movie showcasing him in a very non-typical Cary Grant role.

If you haven’t seen it, you MUST.

And, from another reader:

You mentioned Cary Grant today but it was the serious / acclaimed / great movies that seemed to capture your attention.  However,  I recommend Father Goose and Operation Petticoat to understand the comedic side of his acting range.  Silly, fun and great for the family.

I've seen both … and as a matter of interest, I have a special affection for Operation Petticoat.  The film was nominated for an Academy Award for Best Original Screenplay, and one of the writers was a fellow named Joseph Stone.  Joe wasn't just a screenwriter  — before World War II, he won the California state amateur lightweight boxing championship. Then, after serving in the Navy during the war, he became a boxing referee and judge, and refereed some 5,000 fights and judged about 2,000.  He was inducted into the World Boxing Hall of Fame in 1994.

While he was doing all that, he also earned bachelor’s and master’s degrees in English at Loyola University and USC … and after that, for some four decades taught English and writing for the screen and television at Loyola and Loyola Marymount University.

Which is where I met him.  Joe, who passed away in 2001 at the age of 87, was my television writing teacher while I was at LMU, and was one of the best teachers I had there.  He was fit as can be - he looked like a former lightweight champion - and I can remember him telling me at one point, "The only things I regret are the things I didn't do." 

Which, as it ends up, wasn't all that much.

(It was not  an entirely original sentiment, but I can hear his voice saying it like it was yesterday.  Which is something, since it was almost 50 years ago.)

And that's my Operation Petticoat story.

Published on: January 24, 2022

In the National Football League Divisional Playoff Weekend … perhaps the best weekend of playoff football ever played:

Cincinnati Bengals 19, Tennessee Titans 16

San Francisco 49ers 13, Green Bay Packers 10

Los Angeles Rams 30, Tampa Bay Buccaneers 27

Buffalo Bills 36, Kansas City Chiefs 42

The 49ers will travel to Los Angeles to play in the NFC Championship game next weekend, while the Bengals will go to Kansas City for the AFC Championship game.