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    Published on: February 18, 2022

    by Kevin Coupe

    Axios has a story suggesting that "2022 is shaping up to be one of the hardest years ever to run a company — even harder than 2020, when the pandemic first hit."

    The reason:  "Uncertainty, which CEOs dread, abounds. Supply-chain snarls, lingering COVID disruptions, labor shortages, inflation, rising pay and soaring demands for new benefits and work flexibility are driving up costs and complexity.  Toss in a surge in individuals starting their own small businesses —and others simply quitting work altogether — and you see why C-suite anxiety is spreading fast."

    Axios notes that in addition, CEOs are coming to thee realization that "they'll have to navigate remote and hybrid work even after the pandemic. That means figuring out new ways to manage teams and rally employees.

    "So CEOs are scrambling to bring in talent experts who can answer questions about the future of work. Human resources job postings on Indeed are up 133% compared with February 2020."

    Adding to the challenge, Axios writes, is the employees are being poached by competitors:  "Outside recruiters are so busy, some are turning away business."

    We spend a lot of time here talking about how tough it is to be on the front lines, and so, in the interest of equal time, I though it would be fair to point out that CEOs' lives aren't all stock options and private jets.

    Not all, anyway.

    Published on: February 18, 2022

    The Dallas Morning News this morning reports that Kroger is continuing its strategy of opening an online-only business in markets where it does not have stores - it already is doing so in Florida, and has said it plans to do so somewhere in the northeastern US - with an expansion into Oklahoma City.

    According to the story, Kroger plans to use an Ocado-powered robotics warehouse being built in Dallas to serve the Oklahoma City market.  "The Dallas facility was announced in 2019 and is nearing completion," the Morning News says.  "Dallas is a hub in a highly automated hub-and-spoke system … Kroger will use a 50,000-square-foot spoke facility on 8801 North I-35 Service Road in Oklahoma City to receive orders from the Dallas hub … The Oklahoma facility will be able to deliver to customers within 200 miles from it. The facility is expected to become operational this year and will employ up to 191 full-time employees."

    Gabriel Arreaga, Kroger’s senior vice president and chief supply chain officer, tells the Morning News that this move is part of Kroger’s strategy “to double its digital sales and profitability rate by the end of 2023 … The spoke facility will provide unmatched, impeccable customer service and improve direct access to fresh food in areas eager for the variety and value offered by Kroger."

    KC's View:

    I've said all along that it makes a ton of sense for Kroger to establish digital beachheads in markets where it doesn't have stores.  It can build on whatever brand recognition it already has without all the headaches of bricks-and-mortar stores, and then can decide whether it wants to open stores or buy an existing company to build on the digital foundation.

    Which creates competitive issues for existing retailers in these markets.  They have to start competing aggressively with Kroger with the expectation that it is going to have an impact on sales.  These retailers have to find ways to get closer to their customers.

    One thing I might bet on is the possibility that once Kroger gets its digital businesses going in these markets, it could open dark stores that could function as mini distribution centers, but build them in a way that allows customers access to them.  They'd be bare bones, with different kinds of expectations than traditional stores, but could also disrupt market dynamics.

    Published on: February 18, 2022

    Albertsons and DoorDash said yesterday that they are introducing "express grocery delivery, a new service that offers consumers faster and more convenient delivery of fresh groceries in under 30 minutes."

    According to the announcement, "As part of this launch, consumers in more than 20 major cities across the U.S., including Los Angeles, Denver, Seattle and more, will now be able to access express grocery delivery from their local Albertsons Cos. banner stores including Safeway, Vons, ACME Markets, Jewel-Osco, and Tom Thumb in 30 minutes or less via the DoorDash marketplace. DoorDash plans to expand this offering to additional Albertsons Cos. banners in the coming weeks.

    "Albertsons Cos. will offer more than 6,000 items for express grocery delivery."

    The companies note that "DoorDash customers can enjoy Albertsons Cos. loyalty pricing and promotions on express grocery orders where available, and Albertsons Cos. local banner loyalty program members, such as Albertsons for U and Safeway for U, can choose to link their account in the DoorDash app to earn loyalty points on purchases."

    And, they say, "DoorDash's introduction of express grocery delivery with Albertsons comes on the heels of its ultra-fast grocery delivery offering of deliveries in 10-15 minutes from select DashMart locations."

    KC's View:

    I do think it is funny that the "under 30 minute" promise contains an asterisk, with the note that "delivery speed is not guaranteed and will vary depending on various factors."

    No kidding.

    There are going to be places and times where delivering in 30 minutes will require defying the laws of physics, not to mention traffic (which can have a more immutable impact on forward progress).

    Regardless, this announcement signifies the degree to which the stakes are constantly being raised in the delivery segment, with everyone looking for an edge and a partner and value proposition that they hope cannot be matched.

    I understand why Albertsons wants to make this deal and roll it out.  After all, it continues to face strong competition from the likes of Walmart, Amazon and Kroger, and the latter is doing its own stakes-raising by doing things like going to markets where it has no stores with an online-only offer.

    But I continue to believe that companies outsourcing their delivery functions to companies that then hire gig workers to handle the actual tasks are distancing themselves from their shoppers in a way that is problematic.

    I worry - for retailers - that when DoorDash CEO Tony Xu tells CNBC that "we eat three times a day … That’s over 100 shopping occasions a month … And so, when I think about how many shots on goal there are, there just are a lot of moments to capture,” what he's really talking about is capturing customers regardless of whether there is a retail partner.  Which potentially puts its retail clients in jeopardy, depending on the degree to which DoorDash is able to establish itself as a retail brand, not just a delivery service.

    Published on: February 18, 2022

    From Fox News, a story about the gathering unionization momentum at Starbucks, as "nearly 100 Starbucks locations around the nation have joined the Starbucks Workers United movement and are pushing to form a union.

    "As of Wednesday, 97 locations in 26 states had filed for a petition to unionize, according to Starbucks Workers United, which has been seeking to organize a union with workers around the country."

    And it isn't just Starbucks.  The Washington Post reports:

    "Employees at several Apple Stores across the country are quietly working to unionize, according to people familiar with the efforts, as growing dissent among hourly workers threatens to disrupt one of the most stolid tech giants.

    "Groups at at least two Apple retail stores are backed by major national unions and are preparing to file paperwork with the National Labor Relations Board (NLRB) in the near future, said the people, who spoke on the condition of anonymity to discuss confidential plans. At least a half dozen more locations are at less-advanced stages in the unionization process, these people say.

    "Spurred by wages that have stagnated below the rate of inflation, and encouraged by successful efforts by Starbucks employees to form unions, retail workers say they hope they can push the world’s most valuable company to share more of its record-setting profits with the workers who sell, repair and troubleshoot the products it sells."

    KC's View:

    To be clear, there are close to 10,000 company-owned Starbucks stores in the US, so there is a long way to go.  But it wasn't that long ago that unionizing efforts at 100 of them would've been unthinkable.  Now, not so much.

    Apple has 270 stores in the US.  Also a long way to go there.  But there was a story this week about there is some investor resistance to a compensation package for Apple CEO Tim Cook that could total close to $100 million a year, which could make a unionization movement play out differently than in the past.

    There's something happening here … and what it is seems to be becoming clearer with every passing day.  I'm not sure it is as much about a rebirth of the union movement on a broad scale - I think that horse may already have left the barn - as much as it is a reflection of a further bifurcation taking place within American business.  Even companies that traditionally have been seen as having progressive, pro-worker cultures are now seen as lacking.

    It would be foolhardy for any company to think, "This cannot happen here."

    Published on: February 18, 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…

    •  Here are the US Covid-19 coronavirus numbers:  79,915,734 total cases … 955,497 deaths … and 51,019,315 reported recoveries.

    The global numbers:  420,852,878 total cases … 5,884,197 fatalities … and 345,243,634 reported recoveries.   (Source.)



    •  The Centers for Disease Control and Prevention (CDC) says that 76.1 percent of the total US population has received at least one dose of vaccine … 64.5 percent is fully vaccinated … and 43.1 percent has received a vaccine booster dose.



    •  From the New York Times this morning:

    "Although new federal data suggests that the effectiveness of booster shots wanes after about four months, the Biden administration is not planning to recommend fourth doses of the coronavirus vaccine anytime soon.

    “'We simply don’t have enough data to know that it’s a good thing to do,' Dr. Peter Marks, who heads the division of the Food and Drug Administration that regulates vaccines, said in an interview this week.

    "In a separate interview, Dr. Anthony S. Fauci, the chief medical adviser to the White House, said the vaccines are still a firm bulwark against severe illness, despite data from the Centers for Disease Control and Prevention showing that booster shots lose some of their potency after four to five months.

    "The C.D.C.’s research, released last Friday, analyzed hospitalizations and visits to emergency rooms and urgent care clinics in 10 states by people who had had booster shots of either Moderna’s or Pfizer-BioNTech’s vaccine. The study showed the level of protection against hospitalization fell from 91 percent in the two months after a third shot to 78 percent after four to five months. Effectiveness against visits to emergency rooms or urgent care clinics declined from 87 percent to 66 percent."

    I would guess that at some point they'll recommend that folks get another booster going into the fall and winter, in the same way that they recommend regular flu shots.  Some will get them, some won't.  I will tell you this … my plan is to be first in line.

    Published on: February 18, 2022

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Variety reports that "AMC Networks says it plans to sell three addressable ad slots in each linear hour of original programs on its flagship cable network as well as WeTV, the latest expansion of technology that allows advertisers to hone their pitches to radiational mass TV audiences.

    "The spots are slated to run on Comcast, Charter and Cox cable systems and have the potential to reach 35 million U.S. homes. Amazon has already agreed to purchase some of the inventory as part of a year-long relationship across multiple programs. AMC will work with data company 605  to track and measure results as the campaign progresses."

    The story notes that "more TV networks are trying to harness addressable technology that allows them to beam different ads to different households, all in the same 'slot' in a commercial break.  Horizon, the independent media-investment company, said Tuesday it planned to deploy addressable ads in national linear inventory on networks owned by A+E Networks and Fox Corp. that appear in households that subscribe to Dish, SlingTV and DirecTV and on other networks and distribution systems. Horizon is working with Adcuratio,  an ad-tech company that helps create the addressable modules and has already started work with ViacomCBS. AMC Networks last year began working with Omnicom Media Group and Volkswagen to run addressable campaigns on its flagship cable network during national commercial time."

    Amazing.  Companies like these are developing addressable advertising models, which is the ultimate customization feature, showing different ads to different households while they are watching the same program, and then there are retailers out there who are sending the same print ads to all their customers, often using newspapers and direct mail as delivery vehicles.  How quaint.



    •  DoorDash said yesterday that its 2021 "revenue and order volume last year topped 2020, showing food-delivery’s resilience as restaurants reopened across the U.S.

    "The largest food-delivery company by market share in the U.S. reported revenue at $4.89 billion in 2021, up 69% from the previous year when nationwide shutdowns propelled blistering growth for DoorDash and its food-delivery rivals. Revenue for the three months through December stood at $1.3 billion, up 34% from the same quarter in 2020."

    Published on: February 18, 2022

    •  From the Seattle Times:

    "Amazon, Starbucks, Microsoft Philanthropies, billionaires Steve and Connie Ballmer, the Bill & Melinda Gates Foundation and a host of other corporations and philanthropists announced Thursday they intend to spend more than $10 million in an effort to dramatically decrease homelessness downtown and in the Chinatown International District.

    "Their investment will help set up and fund a team from the new King County Regional Homelessness Authority, designed to triage and alleviate homeless camping from Belltown to Little Saigon."

    The story goes on:  "While many of these corporations have previously invested money toward addressing homelessness, they usually stick to programs that focus on children and families. It’s rare to see them put a large investment into mitigating the kind of chronic homelessness that, while it’s only a portion of the overall homeless population, dominates public discourse."

    Published on: February 18, 2022

    So … yesterday I noted that the other day I went off on New York City Mayor Eric Adams for saying that a cheese addiction and a heroin addiction essentially are the same thing.  (At least physiologically.  Not legally.  At least not yet.)

    "Stupidity," I called it.  Not fair to people who love cheese, and certainly not fair to people who struggle with heroin addiction.

    But then an MNB reader sent me an article from several years in GQ which said that it "turns out cheese triggers the same excitable brain-parts as some of your favorite hard drugs … The study, researched at the University of Michigan (seriously how did the University of Wisconsin get scooped on this) and published in the U.S. National Library of Medicine, investigated why some foods cause addictive behaviors and other foods are lentils … the most addictive foods in the study contained cheese. That's partly due to its high concentration of casein, a protein that can ignite your brain's opioid receptors…"

    I posted part of the story, acknowledged that maybe I owe Adams an apology, and then joked, "I wonder if Eric Clapton ever considered writing a song called 'Casein'?"

    To be honest, I didn't think much more about it.  Didn't do any more research.  I just figured that once again my tendency to be a wisenheimer had maybe gone a little too far.  And I left it at that.

    Well, I got a bunch of email about this, which, to be honest, was a little unexpected.

    I'll share a few of them with you.

    One MNB reader wrote:

    Regarding the article you reference, GQ misinterpreted the findings of the study. You can read a brief Time article on it here.

    The gist? Quoting from the article:

    “…the dietician who made the questionable claim works for an advocacy group called Physicians Committee for Responsible Medicine, which pushes veganism and urges people to shun cheese. Hardly an objective voice.”

    Fair enough.

    Two lessons here.  Do more research.  And don't take dietary advice from GQ.

    Check.

    I have to be honest.  I didn't really take this story all that seriously.

    On the other hand, there was this email from MNB reader Stacy McCoy:

    Well. This explains a lot. A LOT. One of the most interesting things I found when I had to use a delivery service to get groceries when my husband and I were both sick and quarantined with Covid was the unbelievable amount of cheese that I had to reorder each week. It’s not something I ever noticed when I was just throwing tons of cheese into my grocery cart at the store each week, but realizing I had to reorder it on a list made it painfully clear. We are addicted to cheese.

    Now I'm totally confused.

    But MNB reader Jeff Lenard was able to clear up one thing:

    Clapton’s song “Cocaine” (as well as “After Midnight”) were written by J.J. Cale. But if Clapton were to write a song about cheese, it’d probably be to refute lactose intolerance.

    Okay, that's laugh-out-loud funny.  Extra credit to Jeff.



    On the subject of how the work-from-home trend is reshaping the culture, one MNB reader wrote:

    I appreciate the recap and statistics on the WFH trends.  I don’t believe we’ll ever return to where we were before the pandemic when it comes to accommodating, and in some cases being forced to allow WFH options just to compete for talent.

    But a whole additional trend/issue has developed.  This WFH scenario and the pressure to return to the office has created a dynamic where many employees are seeking doctor’s permission (much like a high school doctor’s note) to allow them to WFH on a more permanent basis.  This has really forced managers and leaders to think about the in-office team environment desired goals in a different way.  As in many areas of industry, Covid-19 is reshaping a lot of what we once knew or took for granted.

    MNB fave Glen Terbeek also made a good point:

    Hopefully for retailers, "work from home” will transition into a  "work from store” trend.  Remote from headquarters, close to the local shoppers.  In my experience, the key success factor for great retailers is the amount of time the management spends in the stores;  where their shoppers and first line of essential workers serving shoppers are located.



    On another subject from MNB reader Randal O'Toole:

    I'm sure you know that Oregon passed a law requiring grocers to charge a fee for single-use bags. I haven't seen anything in MorningNewsBeat about the grocers' response: increasingly, they offer reusable bags. Safeway was the first I knew about; now Fred Meyers' does too.

    Interestingly, though the bags are marked "reusable," they don't say "free." When you check out at the self-check-out aisles (as I do), the machine asks, "How many bags are you taking?" and charges you the appropriate fee. But if you check out at a human checker aisle, if you ask they will say the bags are free.

    I wonder how many reusable bags are used only once and thrown out? Since the bags are much thicker, Oregon's law may have the perverse effect of adding even more plastic to the dumps.

    That would be perverse.  Hard to imagine, but perverse.

    Published on: February 18, 2022

    Let's start off this way - the new Amazon series "Reacher," based on the bestselling Lee Child series of novels, manages to be a) faithful to the source material, b) really good, and c) so popular that it already has been renewed by Amazon Prime Video for a second season.

    Which is a good thing, because it is the kind of series that instantly had me craving more.

    MNB readers know that I have been a longtime fan of the books, though my enthusiasm has waned over the recent books as Lee Child's younger brother, Andrew Child, has taken over primary writing duties.  Lee Child has said that he's just ready to move on, and has been spending more of his time on the series.

    It has been time well spent, in my judgement.  The Jack Reacher movies were okay, but as has been written about ad nauseam, their biggest problem was that the guy playing the titular role, Tom Cruise, simply isn't very big, and Reacher's largeness is more than a physical attribute - it is an intrinsic part of his character.

    The series has solved that problem by casting Alan Ritchson, who is both enormous and an actor with Clint Eastwood-like range.  Which is to say, not a lot, but plenty for the role.  The first season of "Reacher" is based on the first novel in the book series, "Killing Floor," and it is an excellent decision because it allows for character development, some nice performances by a largely unknown (at least to me) supporting cast, and a simmering tension that serves the story well.

    The plot unfolds in a small Georgia town where Reacher - a former military policeman who has retired and now is wandering the country with just the clothes on his back, some cash, and a folding toothbrush - has gotten off the bus so he can see where the blues musician Blind Blake supposedly died.  However, he is arrested while attempting to enjoy a piece of peach pie in the local diner and accused of murder, which propels him into a narrative that I won't describe any more here.

    One thing about "Reacher" is that it captures the brutality of its protagonist with sometimes sickening specificity;  Jack Reacher only is violent when he has to be, but when he has to be there is little question about the fact that his opponents are going to feel it and he is going to win.

    For those of us who have loved the Reacher novels, the series is a must-see.  And I think it also will appeal to folks who have not read the books but who have enjoyed other Amazon series like "Bosch" that have expanded upon their source material while respecting it.



    I have a terrific movie to recommend to you this week - Kimi, which is streaming on HBO Max and is a nifty, tight, 89-minute thriller directed by Steven Soderbergh and written by David Koepp.

    Kimi takes place in Seattle where Angela Childs, effectively played by Zoë Kravitz, works at home monitoring data streams and audio generated by a smart speaker system called Kimi.  (Think Alexa.). Angela suffers from PTSD and agoraphobia because of a previous assault, and things haven't been made any better by Covid lockdowns.

    But then, one day she hears what sounds like a sexual assault recorded by the Kimi system, and she endeavors to find out whose device has recorded it and then to get her company, Amygdala, to notify law enforcement.  Amygdala, however, is about to go through an IPO, so negative publicity is not exactly what they are looking for.

    Kimi has elements of Rear Window and The Conversation going for it, with a little Panic Room thrown in, though the 21st century technology gives it an added kick - you may never think if Alexa the same way again.

    I suspect that Kimi didn't cost a ton of money to make, but it is a great example of what solid, inventive moviemaking can be.  No superheroes, no explosions, no special effects - just an engaging story well-told.  Plus, it has what amounts to a cameo by Rita Wilson in a role that struck me as what Facebook's Sheryl Sandberg may really be like (which I think was the intention).

    Great stuff.



    I'm really enjoying the new season of "Billions" on Showtime, and have concluded that it hasn't suffered at all from the departure of Damian Lewis's Bobby Axelrod, who has been replaced by Corey Stoll's Michael Prince, who is a very different kind of billionaire foe for Paul Giamatti's Chuck Rhoades.

    Here's why.  Axelrod, as played by Lewis, was a memorable character - rapacious, power-hungry, always seeking angles and not particularly caring if he was liked as long as he was feared.  Michael Prince, on the other hand, is a billionaire who sees himself as above such petty desires, the show now is asking a fascinating question - can a billionaire actually be a good guy, or does the very act of accumulation ion that scale scar your soul, even if you don't know it.

    We're only a few episodes into the new season, so we don't have an answer yet.  But the narrative is fascinating, the production values first-rate, the performances sterling, and "Billions" shows us a different side of the same world occupied by "Succession."



    My wine of the week:  the 2020 Filippo Cassano 'Calx' Primitivo, a wine from the Puglia region in southern Italy that somehow manages to be both light and structured enough to stand up to spaghetti and meatballs.  I loved it.



    One last thing … one of the best parts of this weekend will be that HBO's "Last Week Tonight with John Oliver" comes back on Sunday night from a long hiatus.  Yippee.

    One of the reasons I like Oliver so much is his general attitude.  For the last few years, he has delighted in being merciless in his criticisms of AT&T, which owns HBO.  Now, as HBO is about to be acquired by Discovery, he's ready to take aim at the new owners if it seems called for.  "There is no tastier hand than the one that feeds you," he tells Variety.  "There is nothing more satisfying to chomp down on."

    Delicious.

    Published on: February 18, 2022

    Monday is President's Day, a national holiday here in the US, and so MNB is taking the day off.

    Have a good weekend, and I'll see you Tuesday.

    Sláinte!