business news in context, analysis with attitude

Published on: March 15, 2022

by Michael Sansolo

A number of years ago a well-known diplomat made a very undiplomatic comment about a group with which he was negotiating, that they “never missed an opportunity to miss an opportunity.”

That comment could apply to marketing and merchandising events for retailers as well. There’s simply no excuse for missing an opportunity to build fun, excitement, customer experience and, let’s hope, sales and profits. Minus those events, created or otherwise, shopping really does become nothing more than a chore.

What got me focused on this was the occurrence this week of what has to be the best and most completely ridiculous celebration of the year - Pi day.

Pi day is a celebration of the mathematical constant Pi (it starts 3.14—ergo, March 14th), which is essential in determining the area of a circle.

To be honest, I, like most people, haven’t used Pi at all since my last math class back in the 1970s, but I thoroughly appreciate the co-opting of the day in honor of a great food item: pie. 

Upon entering our nearest Wegmans this weekend we ran right into (there was no avoiding it) a simple display for Pi day; basically a small table, some signs and balloons and a bunch of pies. It was so simple and yet, so effective at the same time. Yet, when I went to a second store later that day, I found a large calendar noting all the various strange celebratory days we have in March, but I didn’t encounter anything as effective or as obvious as the little table at Wegmans.

In many ways, March is a great month for building excitement. First, it’s loaded with holidays from St. Patrick’s day to Palm Sunday and Easter, and even the Jewish holidays of Purim and Passover, which both revolve around food. And, of course, there is the March Madness men’s and women’s basketball tournaments, which lend themselves to regional cuisines or even simple watch party planning. 

Pi day just adds to the possibilities.  And opportunities.

Unlike many of my columns here at MNB this one doesn’t require tortured metaphors or weird connections between current events and store operations. Marketing and merchandising are as important and as straightforward as it comes especially at a time when shoppers have a litany of reasons to feel depressed. A table of pies and a couple of balloons that can make everyone chuckle, maybe feel a little less world weary for a second and, yes, in the mood to buy.

We have constant articles here about the industry’s masters of merchandising and marketing, whether we're talking about Dorothy Lane Market or Stew Leonard's.  It is important not to lose sight of the impact and importance of simply making shopping trips and meals a little more interesting and fun.

In other words, let’s never miss an opportunity to grab an opportunity.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com.

His book, “THE BIG PICTURE:  Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available here.

And, his book "Business Rules!" is available from Amazon here.

Published on: March 15, 2022

Physical music sales are "exploding," according to experts.  And not just vinyl.  CDs, too … which leads KC to ask the questions:  Why is this happening?  And what are the broader implications?

Published on: March 15, 2022

In Minnesota, the Star Tribune has an interview with Rick Gomez, Target's chief food and beverage officer.  Some excerpts:

•  "We have been on a multiyear journey in food and beverage really to build credibility in the grocery space. I'm so proud of what the team has done. We have a rallying cry in which we say we've gone from being just a retailer that just sells food to a retailer that celebrates food. There are a couple of examples that really differentiate Target from others. The first is our industry-leading same-day services so [customers can] drive up, order pick up or Shipt. It really was about safety and contactless during the pandemic, but it's evolved and become a really easy and convenient way to get your groceries. The second thing that really differentiates Target is our owned-brand portfolio. So Good & Gather (Target's private label organic brand) we launched two years ago. It's well over a $2 billion brand…"

•  "Being inclusive with our assortment is very important to Target. It makes our assortment more relevant and more compelling. We have really accelerated our work to have more brands that are from Black-owned and Black-founded companies in particular. I'm really proud of that work. A year and a half ago we had about a dozen and we are on pace to have more than 50 Black-owned brands by the end of this year. They are great products. ... There's a brand that has a great story behind it called Me & the Bees and it's a little girl, a little African American girl who has a line of beverages that are lemonade that are made with honey. And it's her [great] granny's secret recipe and we have it now in four different flavors and it makes me really proud that we are making a difference by having more Black-owned brands in our assortment."

•  "During the pandemic, we saw guest behavior change. We saw a lot of trial of our same-day services. For a lot of people, it was their first time trying these contactless services. The feedback from guests has been incredibly positive. What started as a trial looking for a safer option during the pandemic has continued as a really easy, convenient way for our guests to get their groceries. We expect that those services will continue to grow. The growth that we've seen in same-day services is really astonishing. We grew 45% last year and that's on top of over 230% over the previous year. ... We think that will continue."

Published on: March 15, 2022

The Wall Street Journal reports that "phased retirement programs - which allow workers nearing retirement age to cut back on their hours while keeping some pay and benefits - are growing in popularity … In a forthcoming survey of 1,736 HR executives world-wide from consultant Mercer LLC, about 38% say they offer phased retirement, more than double the 17.2% that did so before the pandemic.

"In the U.S. 23% of employers had these arrangements in 2021, up from 16% in 2016, according to the Society for Human Resources Management. A growing subset—8%, up from 6% in 2019—have introduced formal programs, which generally target older workers who meet certain criteria. Another 15% offer the option on an informal or ad hoc basis, frequently to employees in hard-to-fill roles."

Phased retirement programs seem to be gaining traction in part because during the pandemic, companies got used to the idea of flexible work schedules … and people nearing the retirement age found the whole concept to be attractive.  At the same time, experts tell the Journal, developing formal phased retirement programs can help address the talent and brain drains that are affecting many industries.

It isn't always easy to create such programs because they can create legal and financial challenges for companies' HR departments.  But  Andrés Tapia, a senior partner at consulting firm Korn Ferry, says he encourages clients to add the programs to “find ways to leverage rather than lose that voice of experience.”

Published on: March 15, 2022

The Financial Times reports that it would be misguided to expect US farmers to be able to compensate for wheat shortages likely to be created by the War in Ukraine - the fact is that "most of this year’s American wheat crop is already planted, while soaring costs for fuel and fertilizer are blunting the economic incentives."

FT goes on:

"The US was the world’s second-largest wheat exporter after Russia in 2020, while Ukraine ranked fifth. Russia’s attack on Ukraine has disrupted wheat shipments from both countries, raising fears of food shortages in import-dependent nations.

"The global grain market typically responds to shortages in one part of the world by tapping other regions that have a surplus. When Russia banned wheat exports after a severe drought in 2010, US shipments helped picked up the slack.

"But any response from the US this time round will take time. After a poor harvest last year, domestic wheat stocks are at their lowest level in 14 years, according to the US Department of Agriculture. Farmers have already seeded 34.4 million acres with winter wheat, which accounts for the majority of US production, and there is a worsening drought in important winter wheat states such as Kansas."

Published on: March 15, 2022

The Washington Post has a story about how meal kit businesses - which saw strong growth during the pandemic, with some of them rescued from likely death by a surge in people cooking and eating at home - are struggling to remain relevant as the nation starts to put Covid-19 in the rear view mirror.

According to the story, "Meal-kit delivery giants like HelloFresh, Sunbasket and Blue Apron are faring worse or dealing with much slower growth, especially compared to 2020 record highs, partly due to fierce competition from more than a dozen newer companies like Freshly, EveryPlate and others. Plus, several grocery stores, like Kroger, are also getting in on the action, with its purchase of Home Chef. Competition is also coming from fully reopened restaurants hustling to regain customers, as well as delivery companies like DoorDash and Uber Eats."

At the same time, the story says, "rising inflation across most categories of food has meant more families are increasingly budget-conscious, which means cutting back on meal kits."

Published on: March 15, 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 US, there now have been 81,216,268 cases of the Covid-19 coronavirus, resulting in 991,038 deaths and 56,282,006 reported recoveries.

Globally, there have been 460,374,351 total cases, with 6,069,038 resultant fatalities and 393,773,038 reported recoveries.  (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 76.7 percent of the total US population has received at least one dose of vaccine … 65.3 percent is fully vaccinated … and 44.3 percent has received a vaccine booster dose.

Published on: March 15, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  The Dallas Morning News reports that a new Amazon Go store is scheduled to open this summer in the Dallas Forth Worth International Airport (DFW), which will make it both the first Amazon Go in an airport and the first of the breed to be opened in Texas.

According to the story, "The 600-square-foot kiosk will be located in Terminal D, according to planning documents filed with the state. Construction is estimated to cost $650,000 and is expected to be finished by July 31."

Amazon currently operates Go stores in Seattle, San Francisco, Chicago and New York;  Just Walk Out technology also has been licensed to Hudson, a  retailer operating in a number of airports, such as Newark Liberty International and Dallas Love Field.

•  From The Information:

"Some large investors in Instacart have marked down the value of their stakes in the privately held grocery-delivery company by as much as 18% since it raised funds a year ago at a $39 billion post-investment valuation, previously unreported figures show. The moves indicate that the recent sell-off in technology stocks may be starting to affect investor perceptions of startups that raised at high prices last year, particularly in competitive sectors like online delivery.

"Fidelity’s Growth Company Fund, which holds stock in both private and public companies, on November 30 valued Instacart shares at $102 apiece, an 18% decline from the $125 share price it paid when it invested in the startup’s Series I round in February 2021, according to public filings. The move implied the investor believed Instacart’s valuation had dropped on paper to a little under $32 billion."

Make of this what you will.  

Published on: March 15, 2022

•  From USA Today:

"Costco will soon drop its senior hours after holding them for more than two years amid the coronavirus pandemic.

"The special operating hours will be in place until April 17 for members 60 and older, healthcare workers and first responders, the wholesale club said Monday in an update on its COVID updates webpage. The hours have also been for members with disabilities or those who are immunocompromised."

The story points out that "this is not the first time Costco has planned to drop or reduce the dedicated shopping time.

"Last July, the retailer planned to end senior hours but then reversed course to reduce them from five days a week to twice-weekly events as infections and hospitalizations were rising nationwide. Since the week of July 26, most clubs have held the hours from 9 to 10 a.m. Tuesday and Thursday.

"In July 2020, Costco also initially planned to reduce hours from five days to twice weekly but changed plans at that time 'due to an increase in COVID-19 cases'."

•  From the Seattle Times:

"As Starbucks looks to expand its store portfolio, it’s turning to data.

"Using a calculator that measures the self-defined 'very basic ingredients of human well-being,' it plans to open more stores in communities that it thinks would benefit most from the jobs, community spaces and coffee.

"Ahead of its annual shareholder meeting Wednesday, Starbucks says it’s looking to expand its commitment to inclusivity — both with accessible store designs and new locations in communities positioned to benefit from a new coffee joint. It announced Monday it will open or rebrand 1,000 community stores globally by 2030, expanding its community footprint by hundreds."

According to the story, "Starbucks has partnered with Measure of America, a Brooklyn-based nonprofit that researches and analyzes human-development data, to use the Human Development Index, a way to calculate well-being that goes beyond 'money metrics.'  To decide where to open each new location, Starbucks has turned to a calculator that measures 'the very basic ingredients of human well-being: health, education and income'."

Published on: March 15, 2022

Responding to yesterday's commentary by Michael Sansolo and me about how Amazon's Just Walk Out checkout-free technology is being employed at a Whole Foods store in Washington, DC, MNB reader Ken Pentheny wrote:

Having spend 25 years of my career in Supermarket retail, I think this technology has a place, just like self checkout.  The downfall in the strategy with the Amazon model and the front-end strategy of main line retailers is that they are all sacrificing people contact in the shopping experience with the goal to cut cost and overhead.  How does a store like this handle large basket shopping?  Where is the bagging area, whether you are using paper or your own bags?  Do you bag your purchase in cart while you shop (if you are bagging in cart, is there a redesign coming for shopping carts to make it easier to lift full bags off the cart instead of hefting them over the high sides of conventional carts?)? 

I think a lot of these newer business models underestimate the value of human contact, and that is a shame.  If, and this is a big if, grocery retailers took a hard look at the people aspect of their business model and focused more on that, the industry would benefit.  Why does everyone chase Wegmans as best in class?  Focus on people.

Based on our experience, I would say that large basket shopping doesn't seem to be a problem.  The system encourages bagging in the cart, and the carts seem designed to make it easy.

I would suggest that we can spend all time trying to find holes in the system, but we do so at the risk of ignoring the long-term impact that checkout-free systems are going to have.

And sure, great people can heighten a retail experience.  But how many supermarkets can honestly say that a majority of their checkout personnel are doing that?  I'd argue that great people working in the aisles - maybe actually selling - can be far more effective than checkout personnel at improving the shopping experience.

MNB reader Steve Workman chimed in:

Loved your report on the Whole Foods with Amazon Go in play.

You mentioned a statistic of some % of people in the US that will be exposed to a pay as you go technology.

I just read this morning that Amazon just finalized plans to put a 600 square foot locations at DFW airport.

That should get a lot of exposure……

Agreed.  (And we have that story above.)

On another subject, one MNB reader wrote:

While I applaud CVS's stand on harassments and I hope they do take accusations of harassments seriously. as in my mind there is no room for it and never really has been.  I also hope they stay vigilant for false accusations.  Sexual harassments is something where you are guilty until proven innocent, if you can prove you are innocent.  I know of at least one case where a young lady accused a man of sexual harassment because he got a minor promotion she felt she should have had.  The only reason she was found out was that she bragged to a coworker about what she did.

So, my word is to investigate the hell out of it, if the guy is guilty, hang him out to dry, get rid of him.  But, be on the lookout for false accusations as they make it harder for women with real, true stories of harassment to get their stories heard and acted on.