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    Published on: May 5, 2022

    Today, I'm reporting from Santa Monica, California, where a bakery called Tartine's has managed to create a small oasis of great food and pleasing ambience that puts one in mind of the French countryside.

    The menu and some bonus pics are below…

    Published on: May 5, 2022

    Bloomberg has a piece in which it suggests that Amazon's current situation - having overbuilt and over-hired during the pandemic, it now is pulling back on both fronts, looking to stabilize its business and numbers - is "probably the best leading indicator you can get that general inflationary pressures in the economy should begin easing over the next couple of quarters."  Amazon, the story suggests, "is a great bellwether for changes in macroeconomic trends because of its sheer size and the consistency of the company's growth and evolution."

    The analysis notes that "if you want to blame one company for the surge in inflation over the past year, blame Amazon. When e-commerce demand leaped at the onset of the pandemic in 2020, the retailer decided to expand capacity to meet higher growth forecasts. Then, when the labor market started tightening a year ago, Amazon pressed ahead, paying whatever it took to build more fulfillment centers, buy more trucks, and hire more drivers and distribution center workers … Because Amazon is so large, any effort to expand quickly is going to hurt its profit margins and push up prices in the supply chain. Slowing those ambitions should both improve Amazon's profit and lead to less inflationary pressure economy-wide."

    Bloomberg also offers a metaphor:

    "Inflation works kind of like freeway traffic. When you drive your car onto a road to go where you need to go at the same time a bunch of other cars are heading in the same direction, all those cars create traffic that blocks your progress. And every car views all the other cars as obstacles to their own progress. But if you and a lot of those other cars just stayed home instead, there wouldn't be any traffic slowdowns."

    For the moment, in this scenario, Amazon is staying home, which ought to eliminate at least some of the traffic jams.

    KC's View:

    So, essentially we are in "when Amazon sneezes, everybody gets a cold" territory.

    The interesting challenge for Amazon, it seems to me, will be tempering its expenditures and focusing on efficiency in a culture that largely has depended on a full-speed-ahead approach to innovation.  Not only is it usually out on the freeway, but also is lapping the competition.

    I think it is really important for its competition to continue the pace of innovation that they achieved during the pandemic.  The economy may be in flux, but that doesn't mean that people's needs and aspirations are going into some sort of stasis.  Far from it.

    Published on: May 5, 2022

    Bloomberg has a piece in which it writes that "while Instacart sales are still higher compared to pre-pandemic levels, its year-over-year sales growth and average sales per customer are declining. However, Instacart is continuing to see sales growth in some metro areas like Dallas, Philadelphia, and New York."

    There are a number of reasons for the lower growth.  Less demand for delivery in a post-pandemic world.  More competition.  Lower grocery spending overall.  Even some retailer trepidation about Instacart's ownership of their customer data.

    Bloomberg writes:  "In light of Instacart’s reduced valuation, investors may be wondering if an Instacart IPO should be expected this year. According to Instacart CEO Fidji Simo, the new valuation does not affect their plans for an IPO, but the company is in 'no rush' to go public.

    "Instacart is reportedly exploring new revenue streams through its self-service ad platform and its shoppable recipe partnerships with platforms like TikTok and Tasty. Last month, Instacart also launched the Instacart Platform, a suite of services for retailers that includes in-store smart carts, analytics tools, and nano-fulfillment centers that enable 15-minute delivery."

    KC's View:

    Of course growth has slowed.  How could it not?

    The Instacart model saw enormous growth because of the pandemic and abject fear on the part of many retailers once Amazon bought Whole Foods.  Well, the pandemic is (almost?) over, and it isn't like Amazon has turned Whole Foods into some sort of juggernaut.

    So the moment has cooled off.  For now.  But I fully expect Instacart to continue to innovate and, if it can get away from its traditional approach of owning retailers' customer data,  become an even bigger and more effective player.

    Published on: May 5, 2022

    LL Bean has announced that for the month of May, it is going off the grid, pausing all social media posting for the month and wiping clean its Instagram page.

    The company says the move is way to reinforce its commitment to the outdoors and underline the fact that May is Mental Health Awareness Month.

    LL Bean said that "during this time, we'll be going off the grid and prioritizing time in the outdoors, leaving behind a few resources encouraging people to get outside, with tips and tools to prioritize self-care. We encourage our followers and friends to follow us outside — however, wherever and whenever they can.

    "As part of Mental Health Awareness Month, we are also proud to announce a $500,000 grant to and two-year partnership with Mental Health America. This partnership will help reach people through community-based outdoor mental health-focused programs, research and multimedia campaigns aimed at creating connection and inclusion in the outdoors and uncovering the well-being benefits of time spent outside."

    The company notes that "studies have shown significant benefits of spending time in nature, including greater creativity, lower levels of stress, increased self-esteem and reduced anxiety. Spending time in green spaces, such as a park or other natural environment, for as little as two hours per week, has been shown to have a significant positive impact on both physical health and psychological health."

    KC's View:

    While I make part of my living online, I have to admit that I agree with LL Bean and mental health experts on this.  For a variety of reasons, I made the decision some time ago to limit my social media presence to business purposes;  I found that I was spending so much time chronicling my life online that I was spending less time actually living it.

    I think it is an excellent idea to go off the grid every once in a while - good for both physical and mental health.  I realized recently that for more than 20 years, I've never really gone anywhere without my laptop.  Even when I'm on vacation, I always have my laptop with me and always are checking and responding to email.  But I'm planning a trip now that will force me to turn off the laptop for a week and leave it home … which in the end, I am convinced, will actually make me better at my job.

    Published on: May 5, 2022

    •  National Public Radio (NPR)  filed a story about how "employees at an Apple store in suburban Maryland have begun unionizing, organizers announced Tuesday. They join two other retail stores in their unionization efforts within the tech company.

    Retail employees at Towson Mall in Towson, Md., have formed CORE, the Coalition of Organized Retail Employees. They sent a letter to Apple CEO Tim Cook saying the majority of employees at the store support forming a union.

    "'We are on the frontlines of the Apple experience,' employees said. 'As the face of Apple, we have the responsibility of showing up every day to do the best work of our lives.'

    "In the letter, the retail employees ask Cook not to engage in union-busting tactics.  'This is something we do not [do] to go against or create conflict within our management,' the letter said. 'Rather, we have come together as a union because of a deep love of our role as workers within the company and out of care for the company itself'."

    Published on: May 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 83,356,490 total cases of the Covid-19 coronavirus, resulting in 1,023,513 deaths and 80,836,418 reported recoveries.

    Globally, there have been 515,455,210 total cases, with 6,270,157 resultant fatalities and 470,212,202 reported recoveries.   (Source.)



    •  The Centers for Disease Control and Prevention (CDC) says that 77.7 percent of the total US population has received at least one dose of vaccine … 66.2 percent are fully vaccinated … and 45.9 percent of fully vaccinated people have received a vaccine booster dose.  The CDC also says that 49.4 percent of vaccinated, booster-eligible US residents have not received even a first booster dose of vaccine.



    •  From the Wall Street Journal:

    "The resiliency of the American consumer has been a hallmark of modern history. After events such as Hurricane Katrina in New Orleans or the attacks of 9/11, people have shown they will snap back to doing many of their favorite things, given time.

    "Rarely has it happened so broadly and rapidly as now, two years after a devastating global pandemic began. In the past few months, American consumer tastes have changed rapidly, again, and companies are scrambling to catch up."

    The Journal writes that "many Americans are resuming their prepandemic habits: rocking out at crowded concerts, doing deadlifts next to strangers at the gym and stocking a standard supply of toilet paper. Airlines, restaurants and child-care centers, which relied on government loans to stay afloat during Covid-19’s peak, can now hardly keep up with demand.

    "Live Nation, which owns Ticketmaster, said concert ticket sales were up 45% as of February 2022 compared with the same period in 2019, the last full prepandemic year. As of February, the company had 30% more concerts planned for 2022 than 2019.

    "Membership levels at gym chain Planet Fitness in January surpassed prepandemic levels following a stretch in which some 25% of the nation’s gyms closed, according to industry data.

    "Over two million people traveled by plane each day on average between April 17 and 23, according to the Transportation Security Administration. That figure averaged about 2.4 million in 2019.

    "At the same time, some pandemic stars like Peloton Interactive Inc., Netflix Inc. and Instacart Inc. have taken hits. From hoping that consumers had permanently shifted their behavior, the companies are now considering previously unthinkable changes. Netflix, hit with its first membership decline in a decade, is considering offering a lower-priced ad-supported version. Peloton, losing money and saddled with excess equipment, is lowering the price of its stationary bikes. Instacart slashed its valuation."

    Published on: May 5, 2022

    •  From Bloomberg, a story about how "Walmart-backed Flipkart India Pvt. launched an in-house innovation arm called Flipkart Labs to explore ways to expand onto the metaverse. 

    "Through the innovation arm, the Bengaluru-based e-commerce marketplace aims to test nonfungible tokens, or NFTs, virtual immersive storefronts and play-to-earn, according to a company statement Thursday.  One of the first areas of focus for Flipkart Labs is to collaborate with the web3 community and set the standard for commerce in the metaverse."

    The story notes that "Flipkart caters to over 400 million users," and that Walmart bought a controlling stake in the company in 2018 for $16 billion.

    Published on: May 5, 2022

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Axios reports that "Amazon subsidiary PillPack is paying $5.79 million to the U.S. and various states for fraudulently overbilling for insulin, according to a document filed this week with the Department of Justice …  As part of the settlement, PillPack … admitted and accepted responsibility for regularly giving patients a full carton of insulin pens rather than the appropriate amount - a practice that clearly exceeded the limits imposed by Medicare and Medicaid - and then falsely under-reporting it to avoid penalties."



    •  Yahoo Finance reports that Mumbai-based "instant grocery startup" Zepto "has raised $200 million in a new financing round as it looks to expand its 10-minute delivery service to more cities in India and grow its network of dark stores."

    Here's how the story describes Zepto's ascendency:

    "At 19, Aadit Palicha and Kaivalya Vohra co-founded Zepto. The duo, who had previously worked on a number of projects, including a ride-hailing commute app for school kids, and dropped out of Stanford two years ago, took Zepto out of stealth mode in November last year.

    "Its 10-minute delivery service is today operational in 11 cities across India and it processes hundreds of thousands of orders each day, Palicha, who serves as Zepto’s chief executive, told TechCrunch in an interview.

    "The startup’s current annualized revenue is between $200 million to $400 million, he said, a figure he is determined to grow to 'at least $1 billion' by the quarter ending March next year.  The surge in revenue comes as the startup has consistently grown by over 50% each month in recent months, he said. In the most recent quarter, the startup grew its revenue by 800% while slashing its expenses per order by more than five times, he said."



    •  The Information reports that "Netflix has long prided itself on giving managers the ability to pay what they see fit to attract and retain top talent. Now, as it grapples with stalled growth, it’s reining in that freewheeling practice.

    "The streaming company is establishing a new hierarchy of internal seniority levels and associated pay as it is looking to better control costs, according to people with knowledge of the work. It is in the early stages of creating formal salary bands like those big entertainment companies widely use, starting with staff in technical roles and working its way through other positions over time, the people said."

    Further explanation from The Information:

    "During the yearslong boom in streaming subscribers, Netflix lured talent with large compensation packages that gave it an edge on hiring over other companies. But that approach can contribute to pay disparities that can become costly and controversial to fix, compensation consultants say.

    "It also led to outsize and in some cases unpredictable costs. As recently as a few weeks ago, Netflix raised one product employee’s salary $100,000 to keep her from joining a competitor, said a person familiar with the discussions.

    "The overhaul of Netflix’s compensation structure comes as the streaming giant is facing a slowdown in subscriber growth that has cast a cloud over its long-term growth."

    I wonder if co-CEO Reed Hastings will have to edit and rewrite sections of its largely self-congratulatory book, "No Rules Rules."  

    Published on: May 5, 2022

    •  Kroger has announced "the second year of its groundbreaking Go Fresh & Local Supplier Accelerator, a program designed to enhance and accelerate the selection of local items sold in the Kroger Family of Companies.

    "The program provides a pathway to entry for local businesses of all sizes by allowing American-based growers and producers the chance to work directly with the retailer. Through the Supplier Accelerator, Kroger is continuing to expand its fresh departments – including produce, deli, bakery, meat, seafood, dairy, specialty cheeses, and floral – and commitment to being Fresh for Everyone."

    "Kroger is fully committed to supporting a diverse group of innovative, local suppliers who can bring a great assortment of fresh products to our customers," said Stuart Aitken, Kroger's chief merchant and marketing officer. "Kroger committed to investing $10 billion in diverse suppliers by 2030, and the Go Fresh & Local Supplier Accelerator is a successful way to catapult Kroger closer to that goal. We are excited to meet this year's suppliers who will help us advance our commitment to fresh in our nearly 2,800 stores."

    Published on: May 5, 2022

    •  Landover, Maryland-based, Ahold Delhaize-owned Giant Food announced that it has hired Brian Wanner as Vice President of Human Resources.  Wanner most recently was Director of Talent & Culture for The GIANT Company, another Ahold Delhaize banner.



    •  Publix Super Markets announced that Chris Litz, the company's Vice President of Product Business Development for Meat, Seafood, Bakery, and Grocery Refrigerated and Frozen, is retiring at the end of the month, completing some 35 years with the retailer.   Litz started his Publix career as a stock clerk in a Sarasota, Florida, store.



    •  The Wall Street Journal reports that "Walgreens Boots Alliance Inc. has named three senior executives to the customer division of its Walgreens brand to support the company’s push into health and well-being services.

    "Linh Peters, the former global chief marketing officer of Calvin Klein, was named chief marketing officer; Luke Rauch was promoted to chief merchandising officer from chief of staff to Walgreens Boots Alliance CEO Rosalind “Roz” Brewer; and Walmart e-commerce executive Bala Visalatha was hired as the drugstore chain’s first chief product officer."

    Published on: May 5, 2022

    Love this story, told by MNB reader Steve Ritchey:

    With the new "advent" of home delivery, I can't help but think of the stories my Dad used to tell me about working in small town grocery stores in my home town from the mid thirties until his induction into the Army Air Corps in WWII.

    He was a clerk in several small town stores in Plano, TX.  Plano was largely a farming community then.  Then a clerk did everything from stocking, running the counter, answering the phone, produce, and working as a butcher.

    He told stories of the grocery store owners feed pens for livestock being where a large Home Depot is now, how he'd go to the pens to kill a steer or hog, skin and cut it into sides to take to the store to "break down" into it's component sections.  Yes, the owner raised and fed out his own beef and pork, plus traded for live chickens.  He also bought eggs and butter from local famers, milk however did come from a dairy processor.

    He killed hogs, steers, chickens, butchered them and sold them.

    He also delivered groceries.  Refrigeration wasn't widespread then, people had iceboxes, a wooden box with two compartments, one on the bottom for perishables that needed to be kept cold, another one up top that held a 50 pound block of ice.  So, many things got delivered on a daily basis.

    You would be aghast at the sanitation in those days.  The delivery truck or "hoopy" as Dad said they called it, was an open bed truck with a rack over the bed to hang things from, like cans of kerosene.

    Most houses didn't have electricity yet, so they used kerosene lanterns for lighting.  The cans of kerosene hung on the rack over the truck bed.  He said Kerosene would slosh out and onto cans, produce, meat wrapped in butcher paper, the whole chicken he'd just killed and dressed. Imagine eating that.

    Remember, this was a 1930's era Ford Truck with almost no suspension, it literally rode like the proverbial "log wagon," not all the streets were paved either.

    So, when I read and see grocery delivery services, I can't help but think of the stories he used to tell us.  How he'd drive that old Ford Model T truck around town going into people homes when they weren't home and putting groceries away for them.

    I started in the business in 1976 and I've seen myriad changes. When I started, scanning technology was very, very new.  We still rang up groceries on electro-mechanical registers.  We still price marked everything.  But, it's kind of nice to see an old idea get new traction, even if people think it's a new concept, it's an old concept that's been dusted off and modernized to fit the times.



    And, on another subject, from another MNB reader:

    Amazon will never be unionized. End of story. Even with the Staten Island vote they will drag it out for years then call for another vote and by that time all the people that voted for the union will be gone . There will be another vote called and Amazon wins.  Bernie Sanders can yell and scream all he wants. Then will send him a free comb and he’ll go away. Once again Amazon will never be unionized. End of story.

    You may be right.  To me, the larger question is whether they will address some of the issues being raised by workers (and even some politicians) in any meaningful way.