business news in context, analysis with attitude

Published on: April 5, 2022

by Michael Sansolo

Ideally, a brand's advertising slogan should be a declaration of its value proposition.  Or its values.  Or, a summation of its essential narrative.  (Or, all three, if you're lucky and the copywriter is supremely talented.)

But when a slogan goes wrong - when it seems at odds with basic facts - it can be dissonant in a way that harms the brand, creating a lack of trust and credibility.  Which are precisely what a brand doesn't need.

Recently, my wife and I walked past a delivery truck from a local appliance store with slogan on the side that someone clearly thought was very clever. Spoiler alert, we didn’t agree.

The slogan was something along the lines of: We are so local; we don’t need a GPS.

Now I get the point they are trying to make; that this company knows the area so well their delivery drivers can find any street. Except that I really doubt that’s the case because no one really knows every single court, cul-de-sac, lane and more in any village, no matter how small. And my town is not that small.

What’s more, I have to believe that even this company’s largest national competitors (Best Buy, Home Depot or Lowe’s) have drivers equally familiar with the local terrain. I seriously doubt they fly in a guy from Minneapolis to make deliveries in Bethesda, Maryland.

And worse, we all know that our new dishwasher or refrigerator wasn’t made down the street. If the covid-caused supply chain crunch taught shoppers anything it’s that nearly everything we buy and use comes from somewhere else, usually pretty far away. It’s likely shoppers also understand the reality that many fresh supermarket products can only be local depending on geography and weather.

(And by the way, the misuse of “local” can actually get much worse. Recently, two trucks passed by me with messages proclaiming the local status of their company. Only I know the company and that banner is not used in any stores within 100 miles of where I live.)

Now, I’m definitely no advertising genius, but I might have urged this appliance company to play up its local roots in countless other ways, maybe by talking about how many years they’ve been in the community or by referencing other local ties. I’m certain there was something more impactful they could have put on trucks rather than proudly stating they don’t have an app that virtually every other person has. (Although, it’s a good excuse for them if a delivery is late. “Sorry, but we got lost. After all, we don’t have a GPS…”)

Companies need to grab every opportunity possible to talk to consumers (current or potential) about their points of differentiation. It is critical not to waste words or opportunities - they don’t come along that often.  It is a cliché, but true - you never get a second chance to make a first impression.

You have to get it right.

If you have a chance, take another listen to the Facetime video Kevin ran last Thursday about workers at a Wegmans’ distribution facility in Pennsylvania who helped the victims of a massive traffic accident near their facility.  Or consider the countless stories we hear every year of local retailers - chains and independents - finding ways to connect and serve communities in the hardest of times. That kind of caring and involvement speaks volumes about being local in ways no simply sign or slogan ever could.

To paraphrase Forrest Gump, local is as local does.

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: April 5, 2022

There was an interesting study from Pew Research the other day concluding that "younger women have closed the pay gap or are outpacing their male counterparts in nearly two dozen U.S. metropolitan areas," for a number of very good reasons.  We have to be careful about patting ourselves on the back too much, though - I was fascinated to see that the longer women are in the workforce, the more like she is to fall behind in terms of pay and responsibilities.  At a time of a "great resignation," I think, this amounts to grievous unforced errors by companies that should know better.

Published on: April 5, 2022

The Los Angeles Times reports that last night, after a 30-hour marathon bargaining session, the United Food and Commercial Workers (UFCW) reached an agreement for a new three-year contract with Ralphs, Albertsons, Vons and Pavilions.  The tentative deal, which will be voted on by the rank and file next week, averts a strike that union members authorized last week.

The contract would cover some 47,000 employees in Southern California.

According to the Times, "The union delayed releasing details of the agreement until members ratify it. But it praised the result, which it said included higher wages and improved benefits for essential workers who have toiled through difficult conditions during the two-year pandemic. Ninety-five percent of UFCW members voted to move ahead with a strike if supermarkets refused to substantially raise their pay."

Some excerpts from the Times story:

•  "The top tier wage hike will also apply to workers at Food 4 Less, which reached an earlier settlement linking its contract to Ralphs’. Both chains are owned by Kroger, one of the nation’s largest grocery companies."

•  "For the first time, the bargaining included not just union officials but also working grocery clerks — a strategy that allowed members to draw on their firsthand experiences during negotiations."

•  "UFCW’s bargaining hand was strengthened by a labor shortage that has enabled workers to switch jobs in California and across the U.S. as they seek higher wages amid a spurt of inflation.  Militancy among the rank and file was also driven by fury over their eroding wages since a devastating 2003-04 strike spurred by the companies’ push to slash pay and benefits. In the last negotiations in 2019, UFCW workers authorized a strike, but a contract was agreed upon two months later, averting a work stoppage … Union activity is also on the rise across the country, spurred in part by the pandemic, with nurses and teachers striking over workplace conditions, and employees from companies such as Amazon and Starbucks seeking to unionize."

•  "In interviews, many grocery workers pointed to Kroger Chief Executive Rodney McMullen’s 2020 compensation of $22.4 million, his highest ever, and the near-doubling of Kroger’s operating profit to $4.3 billion from 2019 to 2021, even as the company fought extending hazard pay for workers."

Published on: April 5, 2022

In the wake of the pro-unionization vote that took place at one of its New York city warehouses, the New York Post reports that Amazon is updating an "internal social media-style app used by Amazon employees" so that certain words are blocked and flagged.

Words like "union,” “living wage” and “plantation."  Plus, “pay raise,” “prison,” “slave labor” and “restrooms."  The Post writes that "additional banned words reportedly include 'freedom,' 'bullying,' 'harassment,' 'petition,' 'diversity,' 'concerned' and 'robots,' as well as slurs and swear words.  Amazon managers would also be able to flag or suppress posts even if they don’t include banned words." 

Amazon has denied the extent of the program.  "Our teams are always thinking about new ways to help employees engage with each other,” Amazon spokeswoman Barbara Agrait tells the Post. “This particular program has not been approved yet and may change significantly or even never launch at all … If it does launch at some point down the road, there are no plans for many of the words you’re calling out to be screened. The only kinds of words that may be screened are ones that are offensive or harassing, which is intended to protect our team."

Published on: April 5, 2022

Axios reports that "the first commercial drone delivery service in a major U.S. metropolitan area will launch this week in suburban Dallas, where Google-owned Wing will begin delivering items from Walgreens and a few other partners … The launch marks a new, "more scalable" approach for drone delivery, says Wing."

According to the story, "Until now, drone delivery trials have been limited to small towns and rural areas, which are less congested. But Wing aims to prove it can provide on-demand deliveries in more complex urban settings as well … Aside from health and wellness products from Walgreens, prescription pet medications from easyvet and first-aid kits from Texas Health, Wing's drones will also deliver pints of ice cream from Blue Bell Creameries.

"Wing assures Axios that delivery is so fast the ice cream won't melt in the hot Texas sun."

Published on: April 5, 2022

On Sunday's edition of 'Last Week Tonight" on HBO, host John Oliver did an in-depth piece about America's trucking industry, making the case for how companies - and he singles out Amazon as a chief offender - exploit and abuse their drivers in ways that seem both inhumane and unsafe, all in the pursuit of greater profits.

"Trucking companies have been quick to complain they're suffering from a shortage of drivers. They've been saying that for a while now," Oliver argues. "The truth is, their actual problem is less a matter of driver shortage, and more one of driver retention. Hundreds of thousands of people become truck drivers every year, but hundreds of thousands also quit."

It is a tough piece … as usual with Oliver, occasionally profane and NSFW … but worth watching, especially at a time when labor discord seems to be at record levels.

Published on: April 5, 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…

•  The United States now has had a total of 81,867,963 total cases of the Covid-19 coronavirus, resulting in 1,008,679 deaths and 65,841,278 reported recoveries.

Globally, there have been 492,996,221 total cases, with 6,180,154 resultant fatalities and 428,695,049 reported recoveries.   (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 77 percent of the total US population has received at least one dose of vaccine … 65.6 percent are fully vaccinated … and 45 percent have received a vaccine booster dose.

•  Albertsons announced yesterday that "customers with Medicare Part B coverage, including those enrolled in a Medicare Advantage plan, will now be able to get free COVID-19 rapid tests at the company’s more than 1,700 pharmacies. Eligible individuals can get up to eight over-the-counter tests each month, without an appointment, through the end of the COVID-19 public health emergency."

Published on: April 5, 2022

•  The Information reports that Netflix, which is expected to spend as much as $19 billion this year on content acquisition and development as it competes with the likes of Amazon Prime Video, Apple TV+ and other streaming services, has cautioned employees "to be more mindful about spending and hiring."

The context:

"Netflix has long had a reputation for spending top dollar on content and allowing employees free rein to hire as necessary. Comments from executives suggest the company will slow down the rate of hiring. Its global headcount has expanded 59% over the past three years, to 11,300 at the end of 2021 … But Netflix for the first time ever is confronting a sustained slowdown in subscriber growth. Its subscriber count rose 8.9% in the fourth quarter, compared with 21.9% a year earlier, and it forecasts growth slowing to 8% in the first quarter … And the growth rate may be slower than projected, as Netflix suspended its Russian service after Russia invaded Ukraine. Netflix has between 1 million to 2 million subscribers in Russia, the company told employees, according to one of the people."

•  From the Wall Street Journal:

"Amazon.com Inc. is stepping up plans for its proposed fleet of internet satellites that would compete with a service operated by Elon Musk’s SpaceX, buying dozens of space launches from three rocket companies.

"Amazon’s Project Kuiper said it secured up to 83 planned launches that would ferry satellites to orbit over a five-year stretch. The unit of the Seattle-based e-commerce giant hasn’t sent up any satellites yet, though it has said it will have two prototypes launched this year.

"Project Kuiper and SpaceX, whose formal name is Space Exploration Technologies Corp., are among the businesses and government agencies racing to send broadband satellites into low-Earth orbit, in some cases and markets betting they can compete with traditional broadband providers.

"Amazon’s new planned launches depend on larger rockets still under development that must show they can fly as expected. The launch companies hired to take Project Kuiper’s satellites into orbit, including Blue Origin LLC, have faced delays in developing those rockets.  Executives from those launch companies declined to say when they may start blasting the Amazon unit’s satellites into orbit under the new deals."

Published on: April 5, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  From Fox News:

"A federal judge in Manhattan has dismissed a proposed class-action lawsuit accusing Kellogg Co. of using misleading labeling to exaggerate the amount of strawberries in its Frosted Strawberry Pop-Tarts … U.S. District Judge Andrew Carter said reasonable shoppers would not expect strawberries to be the main ingredient in a 'pre-packaged, processed sugary treat called Frosted Strawberry Pop-Tarts'."

According to the story, "The judge said Kellogg's labeling described Pop-Tarts' flavor instead of the source of that flavor, and shoppers like plaintiff Kelvin Brown of Bronx, New York, could check the ingredient list to resolve any confusion.

"Carter also rejected the idea that Pop-Tarts buyers missed out on the health benefits of strawberries.  'A reasonable consumer is unlikely to purchase a toaster pastry coated in frosting exclusively for the nutritional value of strawberries in its fruit filling,' he wrote."

I would've decided this differently.  Then again, I'm not a lawyer, so what do I know?  If the judge is right in his assessment of consumer expectations, though, I think it says something not particularly flattering about Kellogg's.

Published on: April 5, 2022

•  The Save Mart Companies and its new owner, Kingswood Capital Management, announced yesterday that Shane Sampson, most recently Albertsons' Chief Marketing and Merchandising Officer, has been named Save Mart's executive chairman.

Published on: April 5, 2022

Yesterday we posted an email from an MNB reader that reacted to our Friday story about how "workers at an Amazon warehouse facility in New York City appear to have voted in unionization, while in Bessemer, Alabama, warehouse workers have rejected unionization.  In New York, the story says, 57 percent of the vote was pro-union.  In Alabama, 53 percent of workers rejected the union."

This reader wrote:

I don’t find this too unusual.  NY has long been a pro union state.  Especially in the city.  Alabama, I don’t know about, but it seems that country folk tend to be more relying on themselves and less on someone or thing telling them what to do.  Especially when it is taking money out of their pockets.  I know I am.

My response … was one of annoyance:

Forgive me … but this stuff about "country folk" is the biggest load of crap I've ever heard, especially because of the implications it has about "city folk."

I think there is plenty of evidence out there that "country folk" can be as pliable and submissive as anyone else when it comes to following people who tell them what they want to hear.

Same goes for city folk, by the way … who can be equally annoyed as country folk by institutions taking money out of their pockets, especially for what they see as inappropriate reasons.

And city folk can be incredibly self-reliant.  In entirely different ways, of course, but self-reliance and rugged individualism are hardly characteristics exclusive to "country folk."

Another MNB reader chimed in:

Just a few facts I would like to point out given that, based upon some of the comments, it appears that some folks might be lacking in some salient background about the southern United States.

1. Bessemer AL is a suburb of Birmingham AL which is the largest city in AL. Granted it's not NYC, Boston, or even Atlanta; but it is not Shake Rag, TN either (yes, there really is a place with that name north of Memphis).

2. The name "Bessemer" comes from the Bessemer blast furnaces that were used by United States Steel back in the day. Birmingham, which at one time was known as the Pittsburgh of the south, was one of the most heavily unionized areas in the southern United States until the rust belt formed in the eighties with its incumbent layoffs of primarily union jobs and high unemployment.

3. For over fifty years "Right to Work" laws regulating (some would say discouraging) union organization has been part of the foundation of industrial recruiting by economic developers in the south. Not making a comment as to whether that is good or bad just saying that it is a fact. It is one of the main reasons that Boeing chose to relocate a substantial part of its manufacturing to South Carolina.

Ok, that's it, just trying to add a little context to prior commentary.

Thanks.

The dismissal of "city folk" by some people has always struck me as ignorance, probably because they watch "Billions" or "Succession" and think that all city folks are like the characters in those series who live in rarefied air.

The vast majority of people in New York - to use that city as an example - live in far less affluent neighborhoods in Manhattan, or in blue collar neighborhoods of the Bronx, Brooklyn, Queens and Staten Island.  My dad was from the Bronx, and my mom was from Queens … and they grew up in anything but affluence.

On the subject of Amazon's unionization loss in New York City, one MNB reader asked:

What’s to say Bezos doesn’t just pack up and move to Jersey?

He could, though I think it is unlikely.  Such a move wouldn't solve the real problem.

On another subject, from MNB reader Rich Heiland:

Regarding the old "third place" environment of Starbucks. Allow me to maybe do a long reach here.

Death of Third Place. Death of newspaper and books.

I remember "back in the day," going to Starbucks was leisurely. You'd read the paper, maybe a book, chat with others there. If it was your neighborhood you knew a lot of people. You'd get a refill. 

Fast forward. No newspapers, no books, all electronics. The world in a rush. Young people who maybe don't hang with strangers, are in more of a hurry….

If I am remotely correct it means that Starbucks is going to be challenged to be something more than just another cup of coffee, and an expensive one at that....I might suggest asking people in their 20s and 30s what would really hook them into a coffee shop.

Good question.

Published on: April 5, 2022

In the NCAA men's basketball final, Kansas defeated North Carolina 72-69 with an extraordinary second half comeback that was the largest in NCAA championship history.