business news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: May 11, 2022

    I've had two encounters in recent days that sparked this (relatively mild) rant - one with a retailer skeptical about senior citizens' ability to navigate the world of technology, and another with a doctor who told me as story that vividly illustrated exactly the opposite.

    Published on: May 11, 2022

    The Dallas Morning News reports on how Walmart - which already has a one-third market share in Dallas-Fort Worth - is spending millions of dollars on remodeling some 50 stores there in anticipation of H-E-B's move into the marketplace with its eponymous stores.

    According to the story, "Walmart has been building up its online pickup and delivery capabilities and is now turning its attention back to its stores."   Here's the News evaluation of the first of the remodels, in the community of Forney:

    "'Walmart blue' is back inside and out … Lettered section and aisle numbered signs that correspond with the Walmart app’s navigation are prominently displayed and bigger. Marketing photos on the store walls have been replaced by simple but big signs: Seafood, Bakery, Electronic, Lawn and Garden, etc … The aisles really are wider in grocery and the new shopping carts have holders for a drink and a phone."

    The story goes on:  "At the front of the grocery entrance is a grab-and-go section with cold soft drinks and individual size chips, candy, sandwiches and salads.  At the general merchandise entrance is a Target knock-off 'dollar shop.' Seasonal merchandise aisles have been expanded and moved to the front from behind the pharmacy, which now has a 'patient services' room."

    Ulises Correa, a 27-year Walmart veteran who was moved from San Antonio to run store operations here as D-FW regional vice president, says that "we want to make it easier for you to find everything you need," and that newly remodeled store are “meant to get our customers in and out faster. To remove friction.”

    KC's View:

    It is an article of faith around here that retailers need to start battling with incoming competitors long before they open their stores;  you can't just wait until the new guys swing open their doors so that shoppers can sample their wares.

    Not sure that this will make all that much difference in Dallas, where I have to imaginer that H-E-B - legendary in Texas - is going to get a lot of sampling from local shoppers.  But Walmart can't go into this battle with an aging fleet of stores, and so these remodels are the bare minimum of what it has to do.

    Published on: May 11, 2022

    SpartanNash announced what it called "an innovative partnership" with delivery provider DoorDash that it said would expand its "grocery services and solutions across both digital and physical platforms through various different initiatives."

    According to the announcement, "DoorDash is partnering with SpartanNash to offer on-demand grocery delivery from more than 100 SpartanNash owned stores including Family Fare, Martin’s Super Markets and more. The partnership will also include the opportunity for SpartanNash’s network of 2,100 independent retail customers to leverage both the DoorDash marketplace app and website as well as DoorDash Drive, the white-label fulfillment platform that powers direct delivery for businesses, to address their local commerce needs and offer on-demand grocery delivery to consumers in their communities."

    As part of the omni-channel partnership, SpartanNash said it "will also serve as a distributor of pantry and household items to DoorDash DashMart locations beginning in New York City with plans to scale to additional locations in the future."

    Tony Sarsam, SpartanNash's president-CEO, said that "this partnership with DoorDash complements our collective strengths and will drive growth across the food ecosystem- from food distribution to eCommerce - to deliver the ingredients for a better life."

    Published on: May 11, 2022

    The Information has a story about how food delivery firm Gopuff, while at one point during the pandemic being valued at $15 billion, is experiencing some growing pains.

    According to the story, "Last fall, discussions led by the founders about raising up to $1 billion in new funding fizzled after some investors balked at Gopuff’s cash burn, according to two people familiar with the efforts. Since then, they’ve overseen two rounds of layoffs totaling hundreds of workers. Earlier this year, Gopuff instituted a temporary hiring freeze for employees and also shuttered a fledgling pharmacy delivery business, say people familiar with those efforts. And they’ve lost several executives recruited from tech companies like Facebook and Airbnb to modernize their e-commerce software and build a new advertising business.

    "That upheaval has raised questions among some employees about the leadership abilities of co-CEOs Yakir Gola and Rafael Ilishayev. At an all-hands meeting for the product and engineering teams in early April to address the past month’s layoffs—a meeting from which Gola and Ilishayev were absent—one employee asked whether the founders were still fit to helm the company, given what that employee said was a lack of business experience … The increased strains on Gopuff’s leadership comes as a potential economic recession threatens to further slow down delivery sales growth and narrow prospects for easily raising more cash. The freewheeling funding environment that allowed Gopuff to raise over $2 billion in cash last year to back its money-losing expansion into Europe and large U.S. cities like New York and Los Angeles has ended. It has already delayed plans for an initial public offering, which had been expected for the second half of this year, amid a sharp sell-off in technology stocks. Investors in both public and private tech companies are now focusing on backing companies with more-predictable revenue streams and lower costs."

    The story notes that "last year, the delivery service lost $500 million in cash before one-time expenses like stock compensation and acquisition costs, while the Gopuff app generated around $1 billion in sales, said two people with direct knowledge of the matter. In 2020, the company similarly lost an amount that was roughly half of its e-commerce revenue, which totaled $340 million, one of the people added. (A Gopuff spokesperson said its total revenues for 2020 was close to $500 million.)

    "DoorDash, which investors frequently compare to Gopuff, went public in December 2020 with a much healthier business. In 2020, the firm generated $2.9 billion in revenue and made $189 million in comparable profits, or adjusted earnings before interest, taxes, depreciation and amortization."

    KC's View:

    One of the things that is mentioned the story as being of concern to employees is "the founders’ remote management."

    Here's how it is described by The Information:  "The two men, friends who started Gopuff as college students in Philadelphia, moved to a swanky Miami suburb near Aventura after the outset of the pandemic. That relocation and lifestyle has added to worries about their ability to lead a company attempting to go public, according to three former employees. A Gopuff spokesperson said the founders moved to Miami for personal and professional reasons and that the city has become a second headquarters for the firm, with almost 100 employees working there."

    I've been binge-watching a number of TV series about business leaders who lost their way, including "Super Pumped: The Battle for Uber," "WeCrashed," and "The Dropout," all of which portrayed founders of disruptive businesses who lost their way, believing it was all about them.  I have no idea whether this story is a precursor to a TV series about Gopuff, though I have a feeling that down the road there could be a series about all the e-grocery delivery companies racing down parallel lanes and yet seemingly on a collision course - in part with reality.

    Published on: May 11, 2022

    The Wall Street Journal reports that IKEA plans to spend the equivalent of $3.16 billion (US) "opening city-center stores and outfitting existing big-box locations to act as distribution hubs for online orders as the furniture giant looks to adapt to changing shopping habits."

    According to the story, "The company said it would look to modify between 30% and 40% of its big-box stores so they include new additions like parcel distribution centers. Rather than increase the footprint of existing stores, it plans to redistribute space."

    KC's View:

    The idea of redistributing space in traditional IKEA stores makes a lot of sense considering the redistribution of sales to the e-commerce channel, but I'm even more impressed by the expansion of the retailer's city center store concept.

    I've been a fan of the concept since the first time I visited the one in New York City, which I reported about here.

    These stores are less about selling product than about selling solutions … it is a different approach, but one that I think is in synch with changing customer needs.

    Published on: May 11, 2022

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  The Associated Press reports that "Amazon has fired two employees with ties to the grassroots union that led the first successful US organizing effort in the retail giant’s history."

    One of them, Michal Cusick, was fired because, Amazon says, he “failed to show up for work since an approved leave ended in late April, despite our team reaching out to him and even extending his leave.”  Cusick says that his original leave was scheduled to go until April 29, but when the company reduced it until April 26, it used the discrepancy as an excuse to fire him.

    The other employee, Tristan Dutchin, was fired, Amazon says, for failing to live up to productivity goals.  Dutchin has not commented on his firing.

    Amazon spokesperson Kelly Nantel tells the AP that "while we normally wouldn’t discuss personnel issues, we think it’s important to clear up some misinformation here."

    Amazon also says that the "cases are unrelated to each other and unrelated to whether these individuals support any particular cause or group."

    Is it just me, or does the Amazon explanation strain credibility just a little bit?  I'd expect a lawsuit to be filed any moment.

    Published on: May 11, 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 83,778,760 total cases of the Covid-19 coronavirus, resulting in 1,025,104 deaths and 81,059,093 reported recoveries.

    Globally, there have been 518,586,237 total cases, with 6,280,556 resultant fatalities and 473,474,905 reported recoveries.   (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 77.8 percent of the total US population has received at least one dose of vaccine … 66.3 percent are fully vaccinated … and 46 percent of fully vaccinated people have received a vaccine booster dose.

    Published on: May 11, 2022

    •  Reuters reports that "a New York state appeals court on Tuesday dismissed state Attorney General Letitia James' lawsuit accusing Inc. of failing to adequately protect thousands of workers at two New York City facilities against COVID-19.

    "The Appellate Division in Manhattan said federal law preempted James' claims that Amazon violated state labor law by retaliating against two employees, Christian Smalls and Derrick Palmer, who protested against working conditions.

    "It said issuing a ruling could also pose a 'substantial risk of interference' with the National Labor Relations Board, which is considering essentially the same allegations of retaliation against Amazon, the second-largest U.S. private employer.

    "The four-judge panel also said James' effort to require Seattle-based Amazon to comply with state COVID-19 workplace guidelines was moot, because the state had withdrawn the guidance that she sought to enforce."

    •  Variety reports that "Netflix may dive into the ad-supported VOD space as soon as the fourth quarter of 2022 — sooner than it originally signaled.

    "Last month, as Netflix reported an unexpected drop in streaming subscribers in Q1 and forecast a 2 million sub loss for the second quarter, the company announced plans to roll out a lower-cost version of its streaming service with ads."  While the timeline originally was said to be "the next year or two," Netflix "has evidently accelerated that timeline: Netflix informed employees of a Q4 target date for the ad-supported tier in a recent memo … No details have come to light about what Netflix’s AVOD tier would cost or how advertising would be presented. In the U.S., Netflix’s standard two-stream HD plan is $15.49/month."

    Published on: May 11, 2022

    •  Breaking news from the Wall Street Journal this morning:

    "U.S. consumer inflation eased in April to an 8.3% annual rate, taking a slight edge off the steepest run of price increases in four decades as energy prices moderated.

    "The Labor Department’s consumer-price index reading last month marked the first decline in eight months, down from an 8.5% annual rate in March. The CPI measures what consumers pay for goods and services … The annual rate of inflation has risen sharply since early 2021, when the U.S. economy’s rebound from the Covid-19 pandemic accelerated, leading to supply disruptions and other imbalances that have put upward pressure on prices."

    •  From Axios this morning:

    "The Food and Drug Administration (FDA) said Tuesday that it is 'doing everything in our power' to improve the supply of baby formula."

    The story notes that "the nation's baby formula shortage has intensified in recent weeks due to supply chain issues and a recent recall of Abbott Nutrition products."  It is a problem, Axios writes, because "about 3-in-4 babies are fed formula for the first six months of their lives as a substitute for human milk products."

    “We recognize that many consumers have been unable to access infant formula and critical medical foods they are accustomed to using and are frustrated by their inability to do so," said FDA commissioner Robert Califf in a statement.

    •  Food & Wine reports that "Heinz's ketchup bottle might be more iconic than the condiment inside — the shape, the slow moving pour, the tapping on the '57.'  But as brands across the globe look for more environmentally-friendly packaging, Heinz might be willing to give the glass away for a package that would certainly be attention-grabbing: a paper ketchup bottle.

    "Today, Heinz announced that the brand had teamed up with Pulpex — the Diageo-backed sustainable packing company that also created Johnnie Walker's paper whisky bottle — to develop a renewable and recyclable bottle made from 100-percent sustainably-sourced wood pulp. Heinz adds that, in doing so, they are 'the first sauce brand to test the potential of Pulpex's sustainable paper bottle packaging'."

    •  Variety reports this morning that "Redbox Entertainment, the DVD kiosk and streaming video company, has set a deal to be acquired by Chicken Soup for the Soul Entertainment in an all-stock transaction.

    "The company will operate more than 38,000 kiosks nationwide as well as digital media services spanning ad-supported and transactional video services.

    "The deal comes after Redbox in October 2021 became a publicly traded company after merging with a special purpose acquisition company (SPAC). Last month Redbox laid off 150 employees, roughly 10% of its total headcount, amid a slowdown in business and growing net losses."

    Published on: May 11, 2022

    •  Walmart Canada announced that Nabeela Ixtabalan, the company's Executive Vice President, People and Corporate Affairs, has been named Chief Operations Officer.

    In addition, the company said, its COO, Sam Wankowski, has been named Chief Merchandising Officer.

    And Laurent Duray, who has held the roles of Vice President of Strategy and Senior Vice President of Fresh, Grocery and Consumables at Walmart Canada, has been named Chief E-commerce Officer.

    And John Bayliss, Senior Vice President of Logistics and Supply chain of Walmart Canada, is now Executive Vice President, Transformation Officer.