business news in context, analysis with attitude

Published on: May 16, 2022

You may recall that a few weeks ago, I wrote about a new fast casual format called Chicken N Pickle that combines a strong food orientation with a sports bar vibe and lots of sports/entertainment options - including 11 pickleball courts. You can eat and drink and then play … or play and then eat and drink.  (I think I'd prefer the latter.)  The concept looks to cash in on the pickleball craze, which has turned into the fastest growing participatory sport in the country.  This weekend, I had a chance to visit the four-acre facility located in Grand Prairie, Texas, just outside Dallas, and I found a highly energized operation that gave me some ideas for how retailers ought to be thinking.

Below, see some pictures of the facility, which had more than a half dozen private events taking place in various locations, as well as an indoor section where they host lessons and leagues.  And - the food was very good, which I think is absolutely necessary for any operation like this to have staying power.

Published on: May 16, 2022

An 18-year-old White man has been arrested and charged with opening fire on the staff and customers of a Tops Friendly Market in Buffalo, New York, on Saturday, killing 10 people and injuring three more.  Eleven of the 13 people shot were Black;  four of the people shot reportedly were Tops employees.

Officials say that before committing the crime, the man posted a 180-page document online in which he describes himself as a white supremacist, and that he came to the store dressed in tactical gear, carrying an assault weapon, and live-streaming his actions online.

The Wall Street Journal writes that the man "appears to have been motivated by racist conspiracy theories he discovered on Internet message boards during the pandemic, according to a document posted online that police believe he wrote. In the document, the writer describes himself as a fascist, a white supremacist, a racist and anti-Semitic. The document includes details of a planned incident similar to what occurred on Saturday, including the writer’s goal to kill as many Black people as possible."

The man has pleaded not guilty, and is being held without bail.  Authorities have said they are investigating the shooting as a "possible hate crime."

The Washington Post reports that officials say the man "was investigated less than a year ago by state police after they received a report that he’d made a threatening statement at his high school. A state police spokesman didn’t confirm the name, but said that a student at the high school was taken into custody on June 8, 2021, and evaluated at a mental hospital. He was not charged."

The Buffalo News writes:  

"When Tops Markets opened its Jefferson Avenue supermarket in Buffalo 19 years ago, residents who had been calling for a full-service grocery store for more than a decade rejoiced that one had finally come to their neighborhood.

"But after Saturday, the joy will forever be obscured by a horrific tragedy."

The News goes on:

"A state of shock rippled through the neighborhood and beyond, on what was surely the darkest day in the supermarket chain's history. Four Tops employees were shot, including a recently retired Buffalo police officer who was working security at the store and was killed, law enforcement officials said.

"'We are shocked and deeply saddened by this senseless act of violence and our thoughts and prayers are with the victims and their families,' Tops spokesperson Kathy Sautter said. 'Our top priority remains the health and well-being of our associates and customers. We appreciate the quick response of local law enforcement and are providing all available resources to assist authorities in the ongoing investigation'."

The Post points out that "the mass shooting is the deadliest of 2022, according to data from the nonprofit Gun Violence Archive. It is also the latest massacre in recent years carried out by perpetrators allegedly driven by hate and racism, deadlier than the 2015 shooting at a historic African American church in Charleston, S.C., by Dylann Roof, who was referenced in the document."

And the Denver Post notes that "the shooting came little more than a year after a March 2021 attack at a King Soopers grocery in Boulder, Colorado, that killed 10 people. Investigators have not released any information about why they believe the man charged in that attack targeted the supermarket."

One day later, there was this story in the Los Angeles Times:

"A gunman attacked a lunch banquet at a Taiwanese church in Laguna Woods, killing one person and wounding five others Sunday before congregants tackled him, hogtied him with an extension cord and grabbed his two weapons, authorities said.

"'That group of churchgoers displayed what we believe is exceptional heroism and bravery,' Undersheriff Jeff Hallock said, later adding, 'It’s safe to say that had they not intervened this situation could have been much worse.'

"The violence left the south Orange County suburb — home to the sprawling retirement community once known as Leisure World — reeling and in grief, coming a day after a racist attack at a Buffalo, N.Y., supermarket left 10 dead."

Published on: May 16, 2022

The New York Times over the weekend reported on how the combination of higher prices and out of stocks created by inflation and supply chain issues, is - not surprisingly - forcing many consumers to develop new shopping habits and exercise frugality muscles that they may not have used for some time.

One of the things that is happening is that shoppers are spreading out their business and making one-stop-shopping a thing of the past - not all customers, but enough to be noticeable.  People may be going to their traditional store for fresh foods, but then are using coupon with greater alacrity than in recent years.  Then, it is off to ther likes of Trader Joe's or Aldi for other items, and then maybe a trip to Costco for others, as well as for the purchase of gas for what most people believe is the lowest price around.

The Times notes that "inflation is at the highest level in four decades. But how you experience it can vary greatly depending on what you eat, how you travel and a host of other factors.

"It is normal for grocery stores to have 7 percent to 10 percent of items out of stock, but the events of the last two and half years — pandemic outbreaks, extreme weather, Russia’s invasion of Ukraine — have caused that number to trend 3 to 5 points higher, said Katie Denis, a spokeswoman for the Consumer Brands Association."

The Times story is in line with a recent IRI study saying that 78 percent of US consumers changed their behavior during April in order to save money, up from 72 percent who said they did so in March.

Published on: May 16, 2022

From the Wall Street Journal this morning:

"Walmart Inc. wants to avoid a big problem: having too few store managers.

"It is a key position for the retail giant, one that requires long hours and in big stores overseeing an operation with roughly $100 million in annual sales and a team of 300.

Many managers leading the company’s roughly 4,700 U.S. stores have been in their roles for at least a decade, and Walmart executives say they need to find a new generation to replace them. The tight labor market and competition for workers create another challenge - even for a job that often pays more than $200,000 a year."

The story notes that "Walmart leans on U.S. store managers to fuel the engine of its largest and most profitable unit. Traditionally candidates for those roles are promoted internally, working over nearly a decade to train as assistant store managers and then what Walmart calls co-managers before taking the top job.

"Around 75% of Walmart managers started out as hourly workers at the company. Walmart aims to protect that pipeline by attracting more college graduates and outside hires and then fast-tracking them into managerial roles."

Part of the plan is to "create a program to recruit and train college graduates to become store managers, promising a starting wage of at least $65,000 a year and an accelerated two-year track into the top store job. The program, known as College2Career, launched with two recent graduates this spring and aims to bring nearly 1,000 applicants through this summer.

"The College2Career program is one piece of a shift inside the country’s largest private employer. Walmart wants to better use the 1.6 million U.S. employees it already has and broaden the company’s appeal to prospective job seekers. So far, that has included raising pay for thousands of workers and offering more and better opportunities for training."

Bloomberg, in a similar story, notes that "those aren’t the only jobs the company is trying harder to fill: It recently boosted starting pay for its truckers to as much as $110,000. And like other retailers, Walmart has been raising wages and adding educational and training opportunities in recent years."

Published on: May 16, 2022

The Seattle Times has an interesting story about how an Amazon shareholder named Stephen Nelson has launched a lawsuit aimed at the company's top leadership, challenging what he calls Amazon's "astronomical misuse" of customer data.

Here's how the Times frames the story:

"Taking a new approach to bringing attention to how Amazon uses individuals’ data, a shareholder is suing Jeff Bezos, Andy Jassy and 17 other Amazon leaders he claims knowingly allowed the company to violate state laws.

"Amazon has already come under fire for how its uses biometric data, things like fingerprints and facial images. It’s been accused of collecting and using individuals’ images without their consent as well as violating state laws that prohibit companies from profiting off individuals’ biometric data.

"Usually, legal actions are targeting the company. This time, shareholder Stephen Nelson’s lawsuit is aimed at Amazon’s top decision makers, on behalf of the company itself.

"The group of defendants – which includes executives like founder and Executive Chairman Bezos; CEO Jassy; Chief Financial Officer Brian Olsavsky; and General Counsel David Zapolsky, as well as all 11 members of the board of directors – knowingly allowed Amazon to make false statements about its use of biometric data, Nelson alleges in the lawsuit filed in a U.S. District Court in Seattle in April. Company higher-ups, his attorneys claim, 'made a conscious choice to turn a blind eye to Amazon’s conduct.'

"Amazon executives and board members 'caused substantial financial and reputational harm to Amazon,' the lawsuit reads.

"Amazon did not return requests for comment on the lawsuit."

Published on: May 16, 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 current US Covid-19 coronavirus numbers:  84,230,829 total cases … 1,026,670 deaths … and 81,282,964 reported recoveries.

The global numbers:  521,287,762 total cases … 6,288,495 fatalities … and 491,912,394 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 … 66.4 percent are fully vaccinated … and 46.3 percent of fully vaccinated people have received a vaccine booster dose.

Published on: May 16, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  The Los Angeles Times reports that "California’s minimum wage for all employers will rise to $15.50 an hour in January, advisors to Gov. Gavin Newsom said Thursday, the first time that rising inflation has triggered a provision of a 6-year-old state law governing automatic pay increases … The state’s minimum wage for large employers is currently $15 an hour, with employers that have fewer than 26 workers paying $14 an hour. Both pay levels went up in January, the presumed final step envisioned by a 2016 state law that gradually increased wages — in most years, by one dollar an hour. Small businesses were given more time to raise their pay."

The times writes that "the announcement came one day before Newsom unveils a revised state budget plan, a new spending proposal for state government that relies on an updated economic forecast and one that will offer rental assistance and cash rebates to struggling Californians."

I'm sure there will be a lot of pushback on this from smaller retailers who believe that this will raise their costs to the degree that it will be hard to be profitable.  But maybe it would help not to think about it as a cost.  Think about it as an investment, and figure out ways to make the extra money deliver an ROI that makes the store more competitive, not less.

•  Howard Schultz must have faith in his ability to return Starbucks to past glories in his third go-round as CEO - Seeking Alpha reports that he "scooped up $10 million worth of the coffee shop chain's stock this week.  Schultz purchased 137,500 shares on Tuesday in two transactions for prices of $72.61 and $73.10 a share, according to a regulatory filing."

Schultz is no dummy - beyond his belief that he can fix a number of Starbucks' problems, he also knows that the company's stock has been trading at a 52-week low, and this might be a good time to get back in at a lower floor.

•  WWD reports that "in a pop-up format, Nordstrom Local is headed to the Hamptons.

Nordstrom Local will occupy an 850-square-foot site at 395 Country Road in Southampton, from Memorial Day weekend to Labor Day weekend.

"The pop-up will provide pickups of online orders made on nordstrom.com and nordstromrack.com, returns, alterations, fashion advice from a stylist and gift wrap, and also take in used clothing and shoes for donations to Housing Works, and empty beauty packaging for recycling."  The story notes that "Nordstrom Locals are service hubs to make shopping more convenient and are not merchandised with products for shopping.

"There are seven permanent Nordstrom Locals — two in Manhattan and five in California, including two in Los Angeles and one each in Manhattan Beach, Newport Beach and Santa Monica."

I've always been a big fan of the Nordstrom Local format - it strikes me as a perfect example of how a big store format can take advantage of the e-commerce trend to expand its footprint in meaningful and tangible ways.  Just the definition of the format as a "service hub" gives voice to the company priority of providing high service levels beyond its traditional bricks-and-mortar presence.

Published on: May 16, 2022

Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

The Wall Street Journal reports that Amazon founder-chairman Jeff Bezos got involved in a Twitter spat with the Biden White House over the weekend, as he criticized the administration's contention that changing the corporate tax structure would bring down inflation.  In a Friday posting, President Biden wrote, “You want to bring down inflation? Let’s make sure the wealthiest corporations pay their fair share.”

Bezos, the Journal writes, "responded by saying the two issues should be discussed separately. 'Mushing them together is just misdirection,' he tweeted."

On Sunday, Bezos continue his criticisms, saying that "the passage of the $1.9 trillion America Rescue Plan, which Mr. Biden signed into law in March, contributed to high inflation. He also said that Sen. Joe Manchin (D., W.Va.)’s objection to Mr. Biden’s other spending plans kept the administration from adding to inflation."

The Journal goes on:

"Mr. Biden didn’t mention Amazon in his tweet, but he has previously called out the company as not paying enough in corporate taxes.

"Former President Donald Trump frequently called out chief executives of the nation’s largest companies, including Mr. Bezos, during his time in office. He attacked Amazon in tweets over taxes, its use of the U.S. Postal Service and its effect on other retailers. He also called the Washington Post, which Mr. Bezos owns personally, a lobbying arm.

"Amazon has been hit hard this year by inflation, including from higher labor costs, and the company has also struggled with supply-chain woes. In April, the company reported its first quarterly loss in seven years, a result that reflected broad economic trends but also surprised some investors who had come to see Amazon as a safe haven during the pandemic."

Published on: May 16, 2022

Last Friday we had a story about how H-E-B has signed on with Looma, a shopper education company, to use a network of smart tablets to tell stories about beer and wine products in a way that will inform purchase decision and connect customers to the people behind the products.  Which I found great, though I did argue that retailers ought to be able to do it without technology (Feargal Quinn was doing it decades ago), and should be telling more stories in more departments.

One MNB reader responded:

Agree with you regarding telling a story about products in many departments.  I’m sure as a Stew Leonard’s customer, you’ve seen the signage in their stores talking about the dairy that they get milk from, the butchers that they source poultry and beef, and the local organic farmers supplying produce. 

When you humanize the efforts that go into the food you buy, there is a sense of pride and a feeling that the retailer did more than shop the most convenient supplier to stock the shelves.  We all know of a favorite farm stand, bakery, or brewery that we like because the products and the producer speak to us.  No reason a retailer shouldn’t capitalize on this as well, when it is a story worth telling.

And from another reader:

I think Whole Foods used to do this too, but with shelf signs. They would tell people who the brand owner was and a quick snippet of their product. They would also include a picture of the owner. I don’t know if they do this anymore, but I found it helpful.

Consumers are looking for info on brands, and ultimately want a reason to connect with them.

I think HEB and Looma have found a way to expand on this idea. I can only see more and more of this coming down the road.