business news in context, analysis with attitude

Yesterday we reported that Kroger announced that its Dallas division s launching Kroger Restaurant Supply there, which it says will offer "an alternative to ordering in large quantities that have highly variable pricing and require deliveries on a set schedule. This service offers competitive wholesale pricing, opportunities to purchase items by the case or unit and seven-day-a-week delivery."

MNB reader Joe Hermes wrote:

I read this yesterday and my first thought was they can't keep their stores in stock, why are they going to dilute the service to the stores by spreading scarce inventory over a broader customer base?

Then I started to think strategically.   This opens the door to another "class of trade" and the inventory and deal monies available in food service.   

Now Kroger is playing chess instead of checkers.  Good move. 

And, from MNB reader Tom Russell:

I was in a Food Lion recently got into a conversation about supply chain issues; she said restaurants are now shopping her store for supplies.

Chess, huh?  Good point.  And, as I said yesterday, I cannot imagine that this will be limited to Dallas.  If it works, other divisions can do it … as can the Ocado-powered warehouses that Kroger will be using to serve markets where it does not have physical stores.  This has the potential to be a disruptive, opportunistic play.

Got a number of reactions to our various stories about Howard Schultz's return to Starbucks.

One MNB reader wrote:

Stopping the stock buyback of $20 billion? That alone says they were more interested in stock price, than they were teammates and facilities. Way too many companies spend way too much on stock buybacks ( equals nice executive rewards) than investing in people, innovation and nuts and bolts. 

I’m not a union person, but they certainly will make executives refocus on what they lost sight of.  Interesting times right now. 

Another MNB reader wrote:

Wow, Howard Schultz's savior complex on full display.  Does he really need to return...again?  Had Starbucks not put together a leadership succession plan, or was the plan for Howard to come back all along?  

Tired of C-Suite employees squeezing every last bit out of their compensation packages either via handling the negotiating themselves or through their recruiters.  However, they get upset when rank and file employees, most of whom have never gone through a negotiating training, start demanding increased benefits.  Labor is not there to be exploited, Howard should consider himself in a store-support role and not the almighty coffee deity he acts like.  The C-Suite greed is appalling in this country.  I would boycott Starbucks, but I already stopped buying their burnt/over roasted 'coffee' years ago and began supporting my local coffee roaster.  Would love to stay on the soap box, but I think I'll go patronize my local establishment instead and include an extra large tip in Howard's name. 

And, from another reader:

Howard has a rather well-developed Messiah complex and it’s gonna get ugly at Starbucks. 

From another:

I've asked this question before, and feel the need to do so again after reading your Starbucks piece this morning. What are the employees who vote in favor of unionization looking for, or demanding?  I still have not seen anything anywhere detailing what their gripes are, or what they want Starbucks to do.  Could be I missed something along the way, but seriously, I don't think so. Again, this company seems to be one of the most forward thinking regarding the benefits it provides its employees, even the part time ones.  College tuition assistance, solid healthcare insurance, good pay, etc.  I mean, what more is there?  Do you have insight to this?

Regarding Schultz getting out to the stores vs sitting in HQ,  I  agree wholeheartedly.  He'll either get a  better understanding of the demands, and perhaps pledge to accept them, thereby staving off unionization, or he will educate the "partners" so they won't feel the need to unionize.

I think the employees at some stores - still a very small minority - believe that the company was insufficiently sensitive to their concerns and safety during the pandemic.   And, there are issues about scheduling.  Fair to say, I think, that Starbucks' reputation as a progressive employer has been lost on some employees.

Yet another MNB reader wrote:

Schultz would be smart to reach out and bring back Jim Donald, a person who knows how to relate to front line associates and one of the best communicators in the business. 

MNB reader Bob Joyce elaborated:

In his time as Pathmark CEO, Jim sent about 10,000 letters a year to associates. Associates loved Jim and he knew success was in the hands of front line associates. 

Agreed.  But, I think Jim has another gig at the moment.