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    Published on: March 31, 2022

    The horrific pile-up on Interstate 81 in Pennsylvania earlier this week gave one retailer a moment in which to demonstrate the importance of compassion and empathy within an organization.  I was particularly touched by how one 28-year employee talked about it on Facebook … illustrating vividly why, if you treat workers like assets instead of costs, they actually behave like assets.

    Published on: March 31, 2022

    by Kevin Coupe

    Here's a demographic shift with which food retailers will have to contend…

    Axios reports that "Americans are more than twice as likely to live in multigenerational family households than they were half a century ago … The number of people living in multigenerational households quadrupled from 1971 to 2021, while the share of the population in such an arrangement more than doubled to 18%."

    According to the story, "A majority of adults who live in multigenerational households say financial issues are a key reason.  50% of lower-income adults in such households say the arrangement helps them at least a little financially, compared with 36% of middle-income and 24% of upper-income adults.

    "Young adults moving away from home, postponing marriage or getting jobs later in life is a contributing factor."  In addition, "Population growth among people of color is a big reason for the increase, as they are more likely than white Americans to live with extended family, according to Pew."

    "This is not a phenomenon that has peaked," D’Vera Cohn, one of the authors of the report, tells Axios.

    Which is an Eye-Opener.

    Published on: March 31, 2022

    Albertsons said yesterday that its customers will be able to use supplemental benefits, like those funded through Medicare Advantage plans, "to purchase over-the-counter medications and fresh produce in the company’s stores."

    According to the announcement, "The new program provides convenient access to customers using pre-paid cards funded by Medicare Advantage plans, employer incentives, healthcare providers, or local governments, furthering the company’s commitment to support the health and well-being of the communities it serves … Albertsons Cos. has partnered with technology payments platforms such as Solutran’s S3 to make it convenient for eligible cardholders to use their health plan funds to shop for hundreds of fresh produce and over-the-counter products in Albertsons Cos. stores. Customers can use their pre-paid cards in stores to easily shop for eligible items and make healthier choices."

    “We are committed to offering solutions that deliver access to healthy produce and meals, reduce food insecurity, and provide solutions for chronic condition management,” said Omer Gajial, EVP of Pharmacy and Health at Albertsons, in a prepared statement.   “Using supplemental benefits enables shoppers to conveniently shop for fresh food and over-the-counter medications contributing to their overall health and well-being.” 

    Published on: March 31, 2022

    From CNBC:

    "Bright yellow robotic arms are becoming a bigger part of Walgreens’ workforce.

    "Inside of a large facility in the Dallas area, they fill thousands of prescriptions for customers who take medications to manage or treat high blood pressure, diabetes or other conditions. Each robot can fill 300 prescriptions in an hour, the company said — roughly the same number that a typical Walgreens pharmacy with a handful of staff may do in a day.

    "Walgreens Boots Alliance is opening the automated, centralized hubs to keep up in the fast-changing pharmacy industry. The pandemic has intensified the drugstore chain’s need to stay relevant as online pharmacies siphon off sales and more customers have items from toilet paper to toothpaste delivered to their doorstep. The global health crisis has also heightened demand for pharmacists, as hospitals and drugstores hired them to administer Covid vaccines and tests."

    Walgreens CEO Roz Brewer tells CNBC, "We’re doing all of this work, so that the pharmacist has an easier job, so that they can get back to being front and center, building a relationship with that patient and interacting the way they were trained — the work that they love to do."

    The idea is that "as more prescriptions get filled by robots … pharmacists can take on other duties that Walgreens can bill to insurers or customers, such as testing and treating medical conditions like strep or the flu and writing prescriptions for people at risk of HIV.  For example, as part of a pilot program, pharmacists in Ohio are counseling and managing care for patients with asthma and chronic obstructive pulmonary disease."

    The story says that "pharmacists will continue to fill time-sensitive medications and controlled substances at local stores as the company expands its use of robots."

    KC's View:

    It has been fascinating just in the last few days to see a number of stories about ways in which automation is being employed in a variety of ways.

    Axios has a story about "a company called RoboBurger is out with a machine that will make you a burger with custom toppings in six minutes for $6.99."

    The Wall Street Journal today has a story about the Gitamini, which is actually a kind of robotic backpack on wheels, and is described as " sleek, rounded cargo carrier on two wheels. Released at the end of 2021 by Piaggio Fast Forward, a Boston-based subsidiary of the company that makes the Vespa, it’s the brand’s second attempt to crack the category of personal porters. The progress is clear. At 28 pounds, the Gitamini (or Mini) is more agile than its older sibling, the Gita (pronounced jee-ta). And while it can only carry 20 pounds of stuff, half that of the Gita, the Mini can take its cargo almost twice as far on a single charge." 

    Axios also reports that "autonomous trucks could one day replace more than 90% of all highway trucking, which could have a profound impact on as many as 500,000 long-haul truckers, a new study found."  That's a good thing, since, as the story notes, " Long-haul trucking is a grueling job, with a high turnover rate. Last year, the industry faced a record shortage of 80,000 drivers."

    The story says that this new business model would work this way:  "Many automated trucking developers envision the use of transfer hubs, where cargo trailers would be handed off between humans and robots.  Autonomous trucks would carry freight on the highway, between the hubs.  Human drivers in conventional trucks would then take over on local streets to the final destination."

    The trend is clear.  The problem is that there's a real Terminator vibe in the air.  I'm just waiting to find out that some company called Cyberdyne Systems is behind all of these technologies, and that there is a linking platform called Skynet…

    Published on: March 31, 2022

    Business Insider reports that "an executive at an Applebee's franchise group has been fired after suggesting locations pay workers less."  According to the story, "Wayne Pankratz said rising gas prices and inflation make people desperate for work, so they can be hired at lower wages."

    The story says that "Pankratz's now-deleted LinkedIn page listed him as executive director of operations of American Franchise Capital, also known as AFC Brands, which owns dozens of Applebee's and Taco Bell restaurants in the Midwest and on the East Coast.  When reached for comment, Applebee's said Pankratz was employed through franchisee Apple Central LLC, which is owned by AFC Brands."

    Business Insider writes that Kevin Carroll, Applebee's COO, said in a prepared statement that "this is the opinion of an individual, not Applebee's.  The individual has been terminated by the franchisee who owns and operates the restaurants in this market. Our team members are the lifeblood of our restaurants, and our franchisees are always looking to reward and incentivize team members, new and current, to remain within the Applebee's family."

    In his email, Pankratz observed that "most of our employee base and potential employee base live paycheck to paycheck … Any increase in gas prices cuts into their disposable income. As inflation continues to climb and gas prices continue to go up, that means more hours employees will need to work to maintain their current level of living … As prices rise, people who [were] relying on unemployment money, simply will have less money to spend. It will force people back into the workforce."

    And, he suggested, pay them less because they're desperate.

    KC's View:

    There was an irony here.  Pankratz ended his email by suggesting that the company ultimately need to "have the culture and environment that will attract people."  That said, once the email came out, his company reportedly saw "four of six managers and at least 10 other workers" walk off the job or give their notice.

    I'm actually not sure if Pankratz really offended his employer's sensibilities, or if he just got caught saying the quiet part out loud.  Either way, the message to employees - both current and prospective - was that this is a company that cares more about its bottom line than them.  And that's a bad look for anyone in the service and hospitality businesses.

    Published on: March 31, 2022

    Bloomberg yesterday broke the story that "Apple Inc. is developing its own payment processing technology and infrastructure for future financial products, part of an ambitious effort that would reduce its reliance on outside partners over time, according to people with knowledge of the matter.

    "A multiyear plan would bring a wide range of financial tasks in-house, said the people, who asked not to be identified because the plans aren’t public. That includes payment processing, risk assessment for lending, fraud analysis, credit checks and additional customer-service functions such as the handling of disputes … The push would turn the company into a bigger force in financial services, building on a lineup that already includes an Apple-branded credit card, peer-to-peer payments, the Wallet app and a mechanism for merchants to accept credit cards from an iPhone."

    KC's View:

    This is an example, albeit one that seems to push the envelope a bit, of a brand wanting to own as much of the customer experience as possible.  True, Apple has the financial wherewithal to do this, but the branding lesson applies to everyone - as much as possible, it is critical not to outsource the experiences that define that customer's relationship with the brand.

    Published on: March 31, 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:  81,740,722 total cases … 1,006,445 deaths … and 65,073,099 reported recoveries.

    The global numbersL:  487,221,736 total cases … 6,163,095 fatalities … and 422,440,166 reported recoveries.   (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 76.9 percent of the total US population has received at least one dose of vaccine … 65.5 percent are fully vaccinated … and 44.8 percent has received a vaccine booster dose.

    The CDC also says that 49.8 percent of the eligible US population has not received a vaccine booster shot.

    Published on: March 31, 2022

    •  From CNBC:

    "More than 2,300 ballots were cast in a closely watched union election at one of Amazon’s Alabama warehouses, according to the Retail, Wholesale and Department Store union.

    "Roughly 39% of the 6,143 eligible voters cast their ballots in the election. That’s lower than the first election last spring, when turnout was about 55%.

    "Workers at the Bessemer, Alabama, warehouse are voting for the second time on whether to join the RWDSU. Last spring, Amazon workers at the warehouse, known as BHM1, overwhelmingly rejected unionization. The National Labor Relations Board ordered a new election after it found Amazon improperly interfered in the union contest.

    BHM1 workers had from Feb. 4 to March 25 to mail in their ballots. The NLRB on Monday began counting the votes privately, during which Amazon and the RWDSU had the opportunity to challenge ballots."

    The counting of ballots is expected to start as soon as this afternoon.

    •  Politico has a story about the Connected Commerce Council, which bills itself as a lobbying group that represents thousands of US small businesses and "opposes legislation that would clamp down on the tech industry’s giants."  Amazon and Google are "partner companies" in the entity known as '3C,' and support its "membership programs, research, webinars and skills workshops."

    Here's the problem:  Politico writes that when it "contacted 70 of those businesses, 61 said they were not members of the group and many added that they were not familiar with the organization.

    According to the story, "Rob Retzlaff, the executive director of 3C, said all of the businesses listed as members have signed up for at least one of 3C’s campaigns, such as in-person events, email lists or the group’s small business resources."

    3C has scrubbed its site of the questionable names, Politico writes, but lawmakers being lobbied by the group say that they are not surprised by the ploy.

    Colorado Rep. Ken Buck, who serves on the House Judiciary antitrust subcommittee, says, "The fact that Big Tech’s so-called grassroots support is fraudulent doesn’t surprise me … This news is one more brick in the wall of a lobbying campaign that would have embarrassed Big Tobacco in its heyday."

    Some context:

    "Lobbyists for Amazon and Google have mobilized an army of small businesses as well as users who rely on their platforms to discourage Congress from passing bills aimed at curtailing their power. Hundreds of small business owners have signed petitions, met with members of Congress or contacted congressional offices to share their concerns. 3C has played a significant role in that advocacy, facilitating dozens of meetings with small business owners and their representatives in Congress.

    "Google and Amazon lobbyists have argued in conversations with lawmakers and staff that the House and Senate antitrust bills, particularly the American Innovation and Choice Online Act, S. 2992 (117), could harm the digital tools that small to medium-sized businesses use every day."

    Published on: March 31, 2022

    Got a number of emails yesterday about two stories that ran on MNB…

    First, we took note of a Des Moines Register report that in a 12-minute video posted to an internal communications platform, Hy-Vee CEO Randy Edeker addressed the recent layoffs of 121 corporate/headquarters employees by saying, ""The reality is, and I never lose sight of the fact, this office does nothing."

    Edeker made the point in the video that he is trying to make Hy-Vee more store-centric … that he is cutting back on e-commerce operations and centralizing it in fewer stores … and that the company's foodservice operations will put a greater emphasis on breakfast and lunch to regain pre-pandemic momentum.

    All of which seemed to make sense to varying degrees, but I questioned the tone of statements like those saying that headquarters personnel "do nothing," and that if they don't want to work in the stores, "I don't want them to be a part of the company"?  And that he finds such sentiments "offensive?"  I wasn't sure these were the best messages to send, and that they created negative, rather than positive, energy.

    One MNB reader wrote:

    From your comments it sounds like you are already hearing a lot on Randy Edeker's video on the layoffs, though I wanted to pass along my thoughts as I started my career 25 years ago working my way up at Hy-Vee, with my mom and step dad both working in Hy-Vee's HQ when it was located in Chariton IA.

    I started off in the bakery at Hy-Vee in Omaha while in high school and then worked my way through other departments, working full time, during college before being promoted to assistant manager my last 2 years in college and being accepted into their Store Director training program in 2001.  I ended up leaving Hy-Vee after I graduated as I got an offer from Procter & Gamble that was double that of Hy-Vee's even after working 5 years with them.

    Now that I'm in a headquarters role for another CPG company I do look back at all the things I learned while in store at Hy-Vee but could never go back to working retail, even if the pay was the same as my current job.  Store work was physically & mentally exhausting with 10-12 hour shifts on your feet on hard concrete dealing with hundreds of customer and employee issues.  I couldn't keep up with that physically or mentally. 

    I wonder how many of the 102 employees that were offered retail roles have only said yes while they get their resume updated and start interviewing with other companies, or will soon be after a couple of weeks in a store role. 

    Randy's comment on "the office doing nothing" as having been on many family holidays as a kid where my mom and step dad both had to take time to work to make sure Hy-Vee stores got the products they needed or a find a missing load of lettuce it shows how disconnected from the reality of his HQ employees Randy has become.  

    Your comment about HQ people being there to support the people in the stores is spot on, as I've seen it across many companies that both sides (HQ & Sales) forget how much they rely on each other.  Comments like "HQ is just sales prevention" or "Without us there wouldn't be anything to sell" get tossed around at many companies, it is the truly great companies that have both groups aligned on a common goal and vision that outperform their competition.  When your CEO is driving a wedge between these groups, instead of being the visionary that bring them together, it is a recipe for low moral and issues to come up that will only lead to Hy-Vee losing many of their great HQ people. 

    MNB reader Cindy Sorensen wrote:

    Randy Edeker's comments took me back to 1983 when I was young in my career.  It was our annual region meeting.  Our region manager was speaking to an audience of about 80 sales people.  It was a time when my employer was purchasing several smaller food companies. With so many new brands in our portfolio, our workloads had definitely increased.  Everyone was a little stressed, tired and a bit overworked.  Our region manager faced the team and said the following: "I know we are putting a lot on your plates, but if you can't handle it, we'll just find people with bigger plates." I've never forgotten his comment and that was nearly 40 years ago.

    The sad thing about his comment is that it was true; at the time, the U.S. was experiencing an unemployment rate of nearly 10%.   My employer could have replaced any one of us in no time at all.   There's no doubt it helped to build a strong work ethic on my part....but at what cost?  There was definitely a personal cost to be managed with such fear. I rarely felt my work was valued, but instead felt I was being constantly critiqued by management to identify weak spots in my performance which maybe they thought someone else could do better.   The leverage was definitely in the hands of the employer to demand from the workforce unreasonable objectives in demanding environments. 

    Randy Edeker is within a few years of my age; I have to wonder if some of his attitudes were developed in those early days of his careers in the 1980's when things were much, much different in the attitude towards, and treatment of, employees. I was surprised to hear such words from a CEO in 2022, especially in our industry when we need to be recruiting, hiring and creating a work environment which promotes retention of employees, not one that runs them off because they do not feel valued for the work they do.  

    Edeker is 59, which makes him about eight years younger than I am.  But I'd like to think that with age comes the ability to evolve, to understand that what might have seemed effective and/or appropriate when I was younger simply won't work or is in any way acceptable today.

    From another reader:

    I agree 100 % with you.  I would not want to work for Mr. Edeker.  One of the things he misses is the other 50,000 employees watch how he treated the 121 impacted ones and project that on themselves.  He seems to think that everyone is disposable and should thank God everyday that they have a job at Hy-Vee.  He also seems to have that attitude about customers, like tough we are no longer do online shopping at your store. I don’t want to offend anyone, but it sounds more like a CFO attitude, rather than an Operations/ Customer focus one.  

    He needs a key person that he trusts to help him filter his communications.  The very same message could have been delivered in a much more sensitive manner.

    Lastly, some years ago working for Pathmark, we participated in share groups with Hy-Vee and I was very impressed with them. I don’t think the founders would agree with his approach. This is not the way to build the culture that leads to success.  

    And from another reader:

    Edeker added:  "Nobody in the country makes money on e-commerce the way it is done today.  So we've got to figure out, how do we control the costs.  Some customers are not going to be happy, but strategically, there's no choice.  We probably literally waited about nine months too long."

    Right now it is obvious that to control the costs most shift them to those who drive to and from the store and spend the time to do their own shopping, and then spend more time waiting in line to check out.

    I worked retail for a few years earlier in my life.  It was enjoyable except for the constant unreasonable demands from the suits at the corporate level.

    We also had a piece about a Wall Street Journal report that "billionaire activist investor Carl Icahn is seeking two board seats at Kroger Co., pushing the U.S. supermarket giant to make changes among its pork suppliers and to address what Mr. Icahn said was a widening gap between worker and executive pay."

    MNB reader Joe Gilman responded:

    This is rich, no pun intended, coming from Mr.Icahn.  He made his fortune without concern for workers.

    I am old enough to remember pictures of him cracking open the front door of his home and telling TWA flight attendants to “go back to work” as he was in the process of firing them for going on strike.

    This is not to say that he is wrong about Kroger, just curious if this posturing or a true change of heart.

    Not sure what Icahn makes a year, but he's reportedly wroth about $15 billion.

    There's a line quoted in "The Godfather" that goes, "Behind every great fortune there is a crime."

    Not necessarily a legal crime, of course.  Sometimes it is a moral, ethical crime.

    Another MNB reader wrote:

    Thank you for your article on Kroger pay and animal welfare. After I retired from the food industry( mid-level management at high profile companies) , I got bored and decided to get a part time job at Kroger. Never in 46 years have I seen people so mistreated for such meager pay ( or any pay for that matter)! Unconscionable!

    And, from another reader:

    Kroger…how much will the new board members whom Mr. Icahn is nominating be paid to be part of Kroger’s Board of Directors?  Is he nominating current Kroger store associates?

    Not to my knowledge.  Good point.