business news in context, analysis with attitude

Published on: February 2, 2022

Content Guy's Note:  Our series of "Retail Tomorrow @ MNB" conversations continues this week with Troy Beeler, co-founder and general manager of the Future Commerce Initiative (FCI).  Troy joins Patrick Spear, co-founder of Retail Tomorrow to talk about the international track that he will be running during the Retail Tomorrow block of educational sessions scheduled for the National Grocers Association (NGA) show in Las Vegas.

Among the subjects discussed today are lessons in innovation and uncommon partnerships that can be gleaned from retailers in China and Europe … the mindset that all retailers, especially entrepreneurially minded independents, need to bring to the battle for market share (and survival), and the investment priorities that retailers ought to be adopting.

You can find out more about the Retail Tomorrow sessions taking place at NGA here.

If you'd like to listen to this conversation as an audio podcast, click below:

Published on: February 2, 2022

Nourish + Bloom Market, which describes itself as "the first African American owned autonomous grocery store in the world," said yesterday that it "has partnered with UST, a leading digital transformation solutions company, to launch their first frictionless grocery store in the United States."

The store is located in Fayetteville, Georgia, and is described this way:  " The store is approximately 1500 sq. ft (autonomous section, HYBRID section, Bistro, back-office facilities) and stocks more than 1500 SKUs. Nourish + Bloom Market offers items such as produce, meats, baked goods, dairy and prepared meals, alongside everyday grocery items with no checkout. Anchored in the Nourish + Bloom market is the Bistro offers freshly prepared breakfast, lunch, and dinner items, including sandwiches, salads, and healthy rice bowls. The highest priority is given to local brands to reduce the carbon footprint."

Jilea Hemmings, Founder and CEO of Nourish + Bloom Market, said in a prepared statement, "The idea of the store occurred to us during the pandemic. We wanted to provide a solution for customers where they wouldn't have to wait in line or touch anything while checking out. With UST's help, we have successfully created a Hybrid autonomous technology to offer that solution and combat food insecurities in underserved communities. We are confident that this technology will change how customers shop in the next 3 to 5 years."

Here's a video created by Nourish + Bloom:

Here's how the technology is described:

"The store uses UST Vision Checkout for large merchandise assortment outside the autonomous store. UST Vision Checkout is a Self-checkout POS that uses Computer Vision to identify SKUs. Along with this, Voice and Gesture AI technology leads to a 3X faster checkout experience for customers of Nourish & Bloom. UST Vision Checkout also has bar code scanning and touch screen functionality that takes care of specific merchandise sections like age-restricted products, frozen assortment, and fruits and vegetables as well as Bistro. Nourish & Bloom has also deployed UST Scan & Go solution for specific events and customer types."

Published on: February 2, 2022

Fast Company has a piece about Parkland, described as "a Canada-based gas station operator with 3,000 locations in 25 countries," which recently teamed up with an organization called Electric Autonomy Canada to sponsor a design competition focused on creating a vision for what gas stations will look like when they no longer are selling gasoline.

The winning design, Parkland says, "was created by James Silvester, an award-winning Scotland-based architect with extensive global experience designing sustainable architecture. Named, ‘More with Less’, the design creates a relaxing environment, where electric vehicle drivers can take a breath, and recharge not just their vehicles, but themselves."

Darren Smart, SVP Energy Transition and Corporate Development for Parkland, says that "the environmentally friendly materials and modular nature of the ‘More with Less’ concept, provides tremendous versatility.  It can be scaled large or small, accommodate the amenities we know EV customers value while they charge, such as our ON the RUN convenience stores and high-quality dining. It also creates a series of outdoor spaces.

"The result is a destination that customers can enjoy and an environment where nature is integral to the structure. We look forward to working with James to further hone the design and identify a suitable location where we can bring it to life and create a world-class experience for EV drivers."

Fast Company writes that "Silvester’s design is a long linear building with charging ports ringing its perimeter. At the center is a mall-like space made up of stores, vendors, and non-commercial spaces meant to help drivers take a break from the road … Designed with a modular system that allows the oval-like shape of the station to stretch out to fit different-size locations, Silvester’s EV charging station can provide a broader variety of services and spaces than a typical gas station. In addition to the traditional food and drink options available, his design offers space for things like an exercise area, massage therapy, and even just a small plant-filled garden where drivers can rest while their battery recharges. (Of course, charging technology itself is rapidly evolving, so it’s possible in the future, EV charging times will be much shorter, too.)"

Silvester points out that "the building needs to respond quite differently from a five-minute quick fill and drive off.  It’s got to offer people some sort of destination or unique experience that can keep them entertained. If I was in a car for 40 minutes at a gas station, I’d be pulling my hair out by the end."

Published on: February 2, 2022

National Retail Federation (NRF) Chief Economist Jack Kleinhenz yesterday released a statement suggesting that, "coming up on two years since the short-lived 2020 recession, the United States appears to be at the midpoint of an economic cycle that should continue to see growth even as the Federal Reserve raises interest rates to bring inflation under control."

“The maturing economy remains in growth mode and there is good reason to expect it will soon approach normal trends,” Kleinhenz said. “Despite ongoing challenges, we are clearly still in an expansion phase. The question is how long it will last as policymakers strike a delicate balance between encouraging growth and taming inflation … The key to extending the expansion is to balance growth, inflation and interest rates.  Clearly, this expansion is different from the past, and the policy approach will be different."

Published on: February 2, 2022

Reuters reports that unionized employees at Kroger-owned King Soopers in Colorado have ratified a new three-year contract.

According to the story, "A document seen by Reuters showed per-hour raises ranged between $1.23 and $5.99 in the first year. The union said over 95% of the workers will get increases of $2 or more in the first year, with around 250 pharmacy technicians eligible for the highest bump.

"The union had initially sought a raise of at least $6 in the first year of the contract for all workers, while King Soopers had proposed increases of up to $4.50 based on job classification and tenure … King Soopers will invest $170 million in wage increases through the life of the agreement, with additional health-care investments."

The agreement follows a 10-day strike by the employees which also included, the story says, "the possibility of a sympathy strike by stores in California and Seattle."

Published on: February 2, 2022

The Washington Post reports that in the United States, "Some 4.3 million people quit or changed jobs in December — down from November’s all-time high but still near record levels, as the labor market remained unsettled and the omicron variant swept through the United States.

The Post writes that the disruption came as "parents scrambled to navigate their work lives as schools and day cares closed due to growing virus cases. Employees grappled with sudden outbreaks at work, with little of the social safety net protections or pandemic-controlling measures that helped cushion the blow from earlier waves. And the vaccine-evading omicron variant shook the nation’s confidence that a future without the virus was on the near horizon.

"These forces magnified the desire for many workers to quit their jobs. At least 4 million workers resigned each month during the second half of 2021, with many of them departing to find work that had better pay, better benefits or more flexible schedules."

Published on: February 2, 2022

Axios reports that "Zipline, a leading drone operator, will begin delivering prescription medicines to patients' homes in a suburb of Charlotte, North Carolina," a reflection of the fact that "drone delivery in the U.S. is poised to accelerate as companies like Zipline and Google-owned Wing push ahead with increasingly sophisticated trials with the FAA's blessing."

According to the story, Zipline "will partner with the pharmacy unit of Magellan Health to deliver prescriptions — including high-cost specialty medications — directly to patients' homes, Axios is first to report.

"The trial, which awaits the FAA's nod, will take place in and around Kannapolis, North Carolina, where Zipline has a distribution center serving nearby hospitals.

"Zipline recently started a delivery-by-drone pilot with Walmart, dropping packages of 4 pounds or less in customers' yards in rural Pea Ridge, Arkansas.

"The company plans a third distribution center in Salt Lake City, which will expand the number of communities it can serve."

Published on: February 2, 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, there now have been 76,516,202 total cases of the Covid-19 coronavirus, resulting in 913,924 deaths and 46,647,029 reported recoveries.

Globally, there have been 382,822,389 total cases, with 5,708,256 resultant fatalities and 303,417,937 reported recoveries.  (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 75.4 percent of the US population has received at least one dose of vaccine … 63.8 percent is fully vaccinated … and 41.7 percent has received a vaccine booster shot.

•  The New York Times reports this morning that "two years into the pandemic, the coronavirus is killing Americans at far higher rates than people in other wealthy nations, a sobering distinction to bear as the country charts a course through the next stages of the pandemic."

The story says that "the ballooning death toll has defied the hopes of many Americans that the less severe Omicron variant would spare the United States the pain of past waves. Deaths have now surpassed the worst days of the autumn surge of the Delta variant, and are more than two-thirds as high as the record tolls of last winter, when vaccines were largely unavailable … Some of the reasons for America’s difficulties are well known. Despite having one of the world’s most powerful arsenals of vaccines, the country has failed to vaccinate as many people as other large, wealthy nations. Crucially, vaccination rates in older people also lag behind certain European nations.

"The United States has fallen even further behind in administering booster shots, leaving large numbers of vulnerable people with fading protection as Omicron sweeps across the country."

•  The Wall Street Journal reports that "Pfizer Inc. and partner BioNTech SE asked U.S. health regulators to authorize use of their Covid-19 vaccine in children under 5 years, the last age group without access to the shots.

"The application, which the companies said they began submitting to the Food and Drug Administration on Tuesday, could lead to the shots becoming available in March for children ages 6 months to under 5 years."

Published on: February 2, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  From the Wall Street Journal this morning:

"Amazon.com Inc. workers at a company warehouse in Alabama are set to begin voting for the second time in a year on whether to unionize.

"The National Labor Relations Board on Friday will start to send ballots to roughly 6,100 workers at the facility in Bessemer, Ala. In recent weeks, organizers and managers at the facility have clashed over election procedures and company policies. The ballots must reach the NLRB regional office by March 25.

"Last year about 71% of Amazon workers who voted decided against unionization, an overwhelming victory for the company. The NLRB found that Amazon violated labor law during the vote and late last year ordered a new election.

"Amazon has said that it didn’t violate labor law and that it has worked hard to listen to its employees and offer “great pay and benefits in a safe and inclusive workplace.” The company said in a statement this week that it recognizes the right of employees to vote to join a union and aims to provide information to workers on the potential impact of unionization. In the past, Amazon has told workers that such a step is unnecessary.

"As the second vote nears, organizers say the primary difference this time is the high vaccination rate among the U.S. public, which they said has made it easier to meet with workers. During the previous election, the union communicated largely through mail brochures and phone calls."

•  Advertising Age reports that Amazon will return as a Super Bowl advertiser this year … and will use its spot to promote the fact that it has the rights to Thursday Night Football games starting next year.

Which all by itself is a vivid reminder of how the world has changed.

Published on: February 2, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  Starbucks said yesterday that in its fiscal first quarter US same-store sales were up 18 percent over the same period a year earlier, a reflection of the degree to which the pandemic inhibited established consumer behaviors.

Starbucks' total Q1 revenue rose 19% to $8.1 billion; operating income increased to $1.1 billion, up from $802.8 million a year earlier.

The Associated Press notes that "Starbucks raised prices twice - in October and December - to account for higher commodity, transportation and labor costs, but it didn’t dampen U.S. customer enthusiasm. More price increases are planned for this year, the company said … The omicron variant did start to cut into U.S. sales - and limit store hours as more employees called in sick - toward the end of the fiscal first quarter, the company said. Omicron-related staffing shortages at Starbucks’ suppliers forced the company to spend more on alternative shipment methods."

While the company is facing unionization calls around the county, CEO Kevin Johnson said yesterday that "all of its U.S. workers will earn at least $15 — and up to $23 — per hour by this summer. Workers can also get a $200 recruitment bonus to help attract new employees."

However, it also was widely reported yesterday that Johnson's total compensation for 2021 totaled $20.43 million in 2021, up 39% from $14.67 million in 2020, which was down from $19.24 million in 2019."  Which - fairly or unfairly - may not help Starbucks' argument against unionization.

•  Reuters reports that Home Depot plans to "hire more than 100,000 workers across its stores and warehouses, as the retailer gears up for its key spring selling season when demand for home-improvement products is at its peak … The company has typically hired around 80,000 workers for spring over the past several years."

The jobs reportedly will include "full-time and part-time roles, including customer service and sales, store support, freight, and warehouse workers."

According to the story, "Home Depot has enjoyed a surge in demand for its products during the COVID-19 pandemic as stuck-at-home consumers splurged on remodeling their living spaces. The company has further benefited from professional builders and handymen resuming work on projects that were stalled during the pandemic.

"The hike in hiring numbers comes at a time when companies ranging from retailers to restaurants are facing widespread labor shortages, while a fast-spreading Omicron variant threatens to dent businesses across sectors."

•  The Wall Street Journal reports that Google parent company "Alphabet on Tuesday reported fourth-quarter revenue of $75.33 billion, an increase of 32% from a year earlier when ad spending began to swell in anticipation that the economy would snap back in 2021 after the Covid-19 pandemic receded. Profit rose by a third, closing out a year when the company recorded its fourth largest annual profit since going public in 2004."

However, the story says, "The quarterly sales gain was the lowest the company has recorded for a three-month period since late 2020 and marks a deceleration from the 41% increase reported in the July-to-September quarter. The moderating growth has divided investors, with some optimistic Google will extend its momentum over the coming year as Covid-19 wanes and travel returns, while others fear TikTok will dent YouTube’s video dominance and rising costs will cut into margins."

Published on: February 2, 2022

•  Harps Food Stores announced the naming of a new president - J. Max Van Hoose, who joined the company a quarter-century ago and most recently served as the company's executive vice president.

Published on: February 2, 2022

I did a FaceTime video yesterday in which I suggested that retailers ought to embrace the popularity of air fryers by setting up special sections with foods that can be cooked in the devices.

Not everyone agreed.

One MNB reader wrote:

While I do agree with you that this is a great idea, the timing isn't great due to staffing issues, and in many cases product out of stocks, which have been huge in produce departments recently. We are dealing with regular customers, Instacart shoppers, and the in store pickers for customer pick up.

Excuses all, but they are legit. It's a struggle right now just to fill the department, so I think this is an idea for later in the year when/if staffing issues ease up.

And, from MNB reader Scott Gehrke:

Your comments about creating a merchandising location for items or recipes particular to preparation in an air fryer reminds me of another time years ago when another cooking tool was finding it’s place on kitchen countertops ( I am dating myself!).

I’m talking about the microwave oven.  Early adapters mostly used the new oven for warming up leftovers.  At the time, there were limited recipes and limited items in the stores with “microwave” cooking instructions. 

When customers started looking for microwave items many retailers responded by creating and merchandising a “microwaveable” category. 

The category grew so fast they had difficulty maintaining it.  Manufacturers scrambled to develop new items or even just incorporate microwave cooking instructions for existing items.

The end for the new “category” came as microwavable items proliferated and customers sought items where you would expect— in their traditional categories! 

I think it is possible the air fryer could have almost as much impact on meal prep as the microwave oven.

If I were a manufacturer, I would quickly be considering incorporating “air fry” cooking directions (and highlighting the information) on appropriate items!  

As a retailer, I would not plan a long term merchandising display as you apparently suggest but there are any number of other opportunities to develop and promote the new air fryer cooking.

I would argue that the phrase "long term merchandising display" ought to be banished from retailers' vocabulary.  I'm not sure of the section would last three weeks, three months or three years … if I wanted to be more competitive, more differentiated, and more likely to survive in a cutthroat environment, I'd be looking for any way possible to cash in on an existing shopper trend.

And sure, staffing issues create problems.  Not to be overly flip, but everybody has staffing issues.  Putting hardball competitive initiatives on hold until things ease up strikes me as a recipe for obsolescence.

Yesterday we reported that Ahold Delhaize-owned, Carlisle, Pennsylvania-based The Giant Company yesterday announced "the launch of Ship2MeT by GIANT and Ship2MeT by MARTIN’S, giving customers access to an expanded assortment beyond traditional grocery categories and all delivered directly to one’s home."

I commented:

I admire the impulse, but what I've never resolved in my own mind - and I am open to guidance here - is whether a food retailer, which by definition should be what used to be called a category-killer in the food category, is well-served by a long-tail approach that embraces categories not connected to what should be a core expertise.

Would food retailers be better served by culinary investments that strengthen their core value proposition?

I do think that related categories are fair game - cookware, for example.  Small appliances.  Cookbooks.  (All things available through Ship2Me.  But bedding?  Shower heads?  (Also available through Ship2Me.)

I'm just not sure.  Guidance welcome.

One MNB reader responded:

Totally agree that Giant needs to focus on their CORE business (and making that better) before trying to become an “Amazon” solution.

I am a Giant customer and do the majority of my food shopping with them. Can’t tell you how many times I stand in front of my loaded pantry and fridge and think what can I make for dinner? Giant knows what is in my basket (and my pantry). How great would it be for them to send me a recipe a week with ideas of how to use some of those pantry items? And maybe throw in an idea of items I do not typically buy but are related to other items I do buy, along with a recipe to try those new items. Giant needs to stop worrying about Amazon and Walmart and start thinking about how they can become more meaningful to their loyal customers before those customers are not so loyal anymore!

Fair point, delivered efficiently.  And pointedly.

And, from another reader:

This was a thing a few years back, or was it ten years ago? Several supermarket chains tried it but it just kind of went away. I'm guessing it wasn't very profitable.

Lots of things have been tried and failed … but not always because they were bad ideas.  Sometimes they just weren't done well.

Maybe now is the time.  I remain skeptical, but open-minded.

Published on: February 2, 2022

• Tom Brady, the sixth round pick of the New England Patriots who went on to become perhaps the greatest quarterback of all time, a seven-time Super Bowl winner with career records that include the most touchdown passes (624) and most passing yards (84,250) in his 22 seasons, as well as being named Super Bowl MVP five times, yesterday announced his retirement.

Brady played 20 seasons with the Pats, and the last two seasons with the Tampa Bay Buccaneers.

"I have always believed the sport of football is an 'all-in' proposition -- if a 100% competitive commitment isn't there, you won't succeed, and success is what I love so much about our game," Brady said in his statement on Instagram. "There is a physical, mental and emotional challenge EVERY single day that has allowed me to maximize my highest potential. And I have tried my very best these past 22 years. There are no shortcuts to success on the field or in life.

"This is difficult for me to write, but here it goes: I am not going to make that competitive commitment anymore. I have loved my NFL career, and now it is time to focus my time and energy on other things that require my attention. I've done a lot of reflecting the past week and have asked myself difficult questions. And I am so proud of what we have achieved. My teammates, coaches, fellow competitors, and fans deserve 100% of me, but right now, it's best I leave the field of play to the next generation of dedicated and committed athletes."

The New York Jets, a team bedeviled by Brady as much as any, went on Twitter to say, "Congrats on a first-ballot, Hall of Fame career … We may not miss seeing you on the field, but the entire football world will."

• And, in breaking football news this morning, the Washington Football Team - previously known as the Redskins, a name that was dropped after 87 years because it was seen as a racist slur against Native Americans - announced that it now will be known as the Washington Commanders.  Ownership said that the new name is a "tribute to the culture of leadership in the Washington area," and that the team's colors will remain burgundy and gold.

KC'S View:

Actually, if the team wants to pay tribute to the culture of leadership in DC, they'd call the team the Washington Gridlocks, and the colors would be changed to red and blue.

Also, for the record, it seems like the team has a lot of other problems to deal with, like an investigation into a workplace culture that seems to revel in sexual and verbal harassment. 

Y'think the team's new nickname will bw the Washington Commies?