business news in context, analysis with attitude

Published on: May 20, 2022

While in Texas during the past week, I had the chance to see the Texas Rangers play the Boston Red Sox at Globe Life Field in Arlington, Texas - the only major league baseball stadium where I had not attended a game.  (The Red Sox won 11-3, which I must admit pleased me enormously.)  The stadium experience, however, got me thinking about the act of replacing one facility with another - the current Globe Life Field opened in 2020, replacing the former home of the Rangers, which was opened in 1994 - and what businesses ought to be thinking about when they make such a move.  For one thing, the new building ought to offer a distinct improvement … and I'm not sure that Globe Life Field meets that standard.

One thing … back in 2016, I offered my ranking of all the major league ballparks … except for SunTrust Park, which was about to replace Turner Field in Atlanta.  I've been there since, and I'd rank it in about the same place as I put Turner Field (though I actually preferred Turner Field).

Also, because it was my list, and I can do whatever I want, I took three ballparks off the table for discussion - Fenway Park in Boston, Wrigley Field in Chicago, and Dodger Stadium in Los Angeles. These are the three oldest stadiums in the country, they are classics, and should not even be considered in the conversation.

You can check out my list here.

Published on: May 20, 2022

Albertsons said yesterday that it has reached an agreement with technology startup Veeve that will bring that company's Smart Carts "to customers at a few dozen stores across the country. Once launched later this year, consumers will be able to use the smart carts to skip the checkout line with a fast, convenient, and contactless way to shop."

According to the announcement, "Veeve Smart Carts offer a more personalized shopping experience enabled by a touch screen that provides a running total for in-cart items and a built-in scale for easy produce purchase. The tech-enhanced carts will also integrate with the Albertsons for U™ loyalty program. Once done shopping, customers can complete payment on their cart and walk out, completely skipping the checkout line."

Veeve says that its Smart Carts "are powered by computer vision and deploy seamlessly into existing stores with no additional retrofit required. The Veeve platform integrates with existing retailer mobile apps and ad-networks."

Published on: May 20, 2022

Family Dollar announced this week that it is closing down the West Memphis, Arkansas, warehouse that was discovered earlier this year to have a massive rodent infestation, which prompted a recall of items that were held there and might have been contaminated.  However, the company maintained that the closure was not related to the Food and Drug Administration (FDA) inspection that revealed the problem.

Back in February, the FDA said that fumigation of the warehouse revealed more than a thousand dead rodents.  During the previous year, more than two thousand rodents had been "collected," and the FDA said there was an apparent history of infestation.  Rodent contamination can cause salmonella and other infectious diseases.

According to the New York Times, "Randy Guiler, vice president of investor relations for Dollar Tree Inc., the parent company of Family Dollar, confirmed in an email that the distribution facility in West Memphis, Ark., would stop shipping to stores before the end of June. Mr. Guiler said approximately 300 workers would be affected."  Guiler said that the company had simply "decided that the facility was not adequate to 'continue serving the needs and requirements of our stores and customers'."

Published on: May 20, 2022

Business Insider has a story this morning about the degree to which inflation is affecting Amazon's retail business.

"The uncertainty over rising costs and consumer prices shows that even Amazon, a $1.1 trillion company obsessed with meticulous attention to detail, can be roiled by the rising inflation around the world — adding an unwelcome jolt to what has already been a volatile business environment since the pandemic started more than two years ago," the story says.

"Internal documents and employees who spoke with Insider shed light on the challenges Amazon has faced in the current inflationary environment. They show the retail business' dwindling margins and reliance on ad profits; consumer demand that fell short of internal expectations; and surging employee attrition that many attribute to below-inflation pay raises. These people spoke on the condition of anonymity because they're not authorized to speak to the press.

"Amazon's spokesperson didn't respond to a request for comment."

Business Insider notes that "rising costs are the most immediate fallout of inflation — a person familiar with Amazon's finances team said it's a 'big topic' internally.

"Those costs, which include higher gas prices, shipping fees, and employee salaries, directly affect Amazon's operations.

"In the first quarter, Amazon reported $6 billion in incremental costs related to inflation, lower productivity, and overcapacity issues, its chief financial officer, Brian Olsavsky, said during last month's earnings call. He said overseas shipping costs more than doubled compared with prepandemic rates, while fuel prices were 1.5 times what they were a year ago."

The story also points out that "it could have been worse, if not for Amazon's rapidly growing, high-margin advertising business, according to internal documents reviewed by Insider."

The story goes on:

"An executive recently said the retail team is scaling down on hiring targets this year until 'business accelerates' to reach certain growth targets. Amazon also plans to significantly curb the growth of its third-party delivery partners this year, following a two-year ramp-up period, Insider previously reported. Though Olsavsky said customer demand remained strong, Amazon announced it would stop expanding its physical and staffing capacity for now."

And, "Third-party sellers, who account for more than half of the products sold on Amazon, are learning to adapt as well. Shipping and fulfillment costs have increased significantly in the inflationary environment, causing sellers to raise prices or accept lower margins."

Published on: May 20, 2022

FMI-The Food Industry Association said yesterday that it will host an online webinar designed to find a new approach to dealing with active assailants in retail stores.

"As the recent events in Buffalo showed once again, tragic acts of violence continue to threaten the lives of our employees, consumers, and communities," FMI said.  "It’s a pervasive problem in our society that requires a renewed and urgent approach to preparation, response, and recovery.

"Join this vital and timely conversation to gain a better understanding of the changing nature of active assailant threats, the motivations behind them, and steps you should take now to protect your customers and employees.

"We’ll also discuss how we can collaborate more effectively as an industry to share best practices on identifying, preventing, and minimizing violent conflict, and learn about training and mitigation resources available to retailers through FMI’s partnership with The Power of Preparedness (TPOP)."

The online session is scheduled for Wednesday, May 25, at 2 pm EDT, and will be free to FMI members and non-members.  Details about participating can be found here.

Published on: May 20, 2022

Data tracking company Numerator is out with a new analysis of the "omnichannel landscape of retail subscription models," concluding that "while Amazon Prime retains the highest satisfaction rate and Walmart+ has shown the fastest adoption, Target’s Shipt Everyday is breaking out with same-day delivery and capturing more trips, spending, and share from subscribers than Amazon or Walmart."

Some excerpts from the study:

•  "Nearly two-thirds of US households subscribe to a retail membership. Memberships are mainstream, with over 62% of households subscribing to at least one retail membership."

•  "Over half of U.S. households subscribe to Amazon Prime – 6X more than Walmart+. Although Walmart+ has gained rapid adoption (8.1% of households) since its 2020 launch, Amazon has the majority, with 53.6% of U.S. households subscribing to Prime. Shipt Everyday has a smaller share (1.3%) as it is available in limited markets."

•  "Shipt Everyday program outperforms despite limited availability. While all programs capture higher amounts of trips, spending, and share among their subscribers vs. all shoppers, Shipt Everyday outperforms its baseline metrics by 2x -– capturing 10.1% of their subscribers’ share vs. 4.3% of their total shoppers’ share."

•  "Most consumers subscribe to a one retail membership program. 80% of households subscribe to one program, 13.8% subscribe to two programs, 3.7% subscribe to three, and 2.5% subscribe to four or more."

•  "Amazon Prime wins renewal intent and satisfaction, but Shipt leads Walmart+ in both metrics. 80% of Prime members intend to renew, compared to 49% of Shipt subscribers and 48% of Walmart+ subscribers. Nearly three-quarters (74%) of Prime Members indicate high satisfaction levels, followed by Shipt Everyday (55%) and Walmart+ (46%)."

•  "Most consumers subscribe to a one retail membership program. 80% of households subscribe to one program, 13.8% subscribe to two programs, 3.7% subscribe to three, and 2.5% subscribe to four or more."

•  "Multi-program subscribers are more likely to be affluent, ethnically diverse, and values-driven. They are more likely to be Black or Hispanic / Latino, from larger households, buy on impulse, and are more aware of the corporate values behind the products they buy."

Published on: May 20, 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:  84,799,040 total cases … 1,028,337 deaths … and 81,491,282 reported recoveries.

The global numbers:  526,032,674 total cases … 6,297,358 fatalities … and 495,817,033 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 … 66.5 percent are fully vaccinated … and 46.4 percent of fully vaccinated people have received a vaccine booster dose.

•  The Wall Street Journal reports this morning that "the Centers for Disease Control and Prevention recommended that children ages 5 to 11 receive the newly authorized Covid-19 booster shot from Pfizer Inc. and BioNTech SE.

"Following the recommendation Thursday, many of the nation’s doctors, pharmacies and other vaccination sites are expected to begin offering the extra doses to the 28 million U.S. children in the age group.

"The shots are to be given five months after the second dose. The extra dose is one-third the amount that those 12 years old and above receive.

"Also Thursday, the CDC said it was strengthening its recommendation that people 12 years and older who are immunocompromised, or who are 50 and older, should receive a second booster dose at least four months after their first."

Published on: May 20, 2022

•  From TechCrunch:

"Uber is partnering with Grocery Outlet to pilot on-demand and scheduled grocery delivery, the company announced on Thursday. Starting today, users can shop at 72 Grocery Outlet stores in California, Oregon and Washington state via the Uber or Uber Eats app. The new partnership signifies Uber’s push into on-demand and scheduled grocery delivery.

"Oskar Hjertonsson, the head of grocery at Uber, said in a statement that the goal of the new partnership is to 'provide a reliable and affordable grocery delivery option that works for everyone, no matter your budget. We see our partnership with Grocery Outlet as an opportunity to do just that by delivering customers the brands they like at the Grocery Outlet prices they love, on-demand, right to their door.'

"To mark the new partnership, the company is offering pilot customers free delivery on their first order of $30 or more through June 19. Uber One members can get free delivery on all Grocery Outlet orders with a $15 minimum purchase."

•  From The Information:

"Google, Facebook, Amazon and other digital advertising companies are the targets of new bills introduced Thursday by a bipartisan group of lawmakers led by Republican Senator Mike Lee from Utah and Republican Representative Ken Buck from Colorado.

"Under the bills the digital ad industry would be regulated much like securities markets. If passed they would block companies with more than $20 billion in digital advertising revenue from operating in more than one part of the online advertising, forcing Google and others to sell off large parts of their ad operations.

"The Senate’s Competition and Transparency in Digital Advertising Act … would also place a host of fiduciary responsibilities on companies with more than $5 billion in digital ad revenue. Those would mandate companies act in the best interests of the advertiser or publisher clients, and allow clients access to detailed data to audit compliance.

"Along with Lee, Texas Republican Ted Cruz, Minnesota Democrat Amy Klobuchar, and Connecticut Democrat Richard Blumenthal are also sponsoring the bill. A companion bill in the House also includes as backers Republicans Burgess Owens and Matt Gaetz from Utah and Florida, and Democrats Pramila Jayapal and David Cicilline from Washington state and Rhode Island."

The Information points out that "with a gridlocked Congress approaching a contentious midterm election, the bill is unlikely to become law this year."

Published on: May 20, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  The Associated Press reports that "more Americans applied for jobless aid last week, but the total number of Americans collecting unemployment benefits is at a 53-year low.

"Applications for unemployment benefits rose by 21,000 to 218,000 for the week ending May 14, the Labor Department reported Thursday. First-time applications generally track the number of layoffs.

"The four-week average for claims, which smooths out some of the weekly volatility, rose 8,250 from the previous week to 199,500."

•  FMI–The Food Industry Association yesterday announced what it called "a new general merchandise & health and beauty care (GM & HBC) initiative that extends its total store collaboration concept in grocery. This new portfolio will be led by consumer goods and retail industry veteran Tom Duffy and embraces a community of professionals – from grocery retailers to suppliers – for high-impact industry dialog and best-in-class capabilities … To lay the groundwork for this venture, FMI will organize an advisory group; identify priority areas; explore and exchange opportunities for best demonstrated practices; and analyze the changing economics that support investments in these categories."

“Since the FMI brand represents everything in the food, beverage and consumer goods retail basket, and embraces all categories in the marketplace, FMI is poised to further its stock in what’s sold at grocery,” said Mark Baum, FMI’s chief collaboration officer & senior vice president, industry relations, who will oversee this new initiative. 

“As a senior advisor to FMI on this initiative, I will support and provide grocery retailers with knowledge and insights that drive new ideas, products and solutions to grow their business across the GM & HBC,” Duffy, former vice president of member development at GMDC/Retail Tomorrow, said. “In turn, FMI will enhance trading partner collaboration to address challenges, opportunity gaps and innovations designed to drive profitable growth in GM & HBC categories and to better serve consumers.” 

•  Weis Market said yesterday that "it is making a multi-million-dollar investment to reduce prices on hundreds of its best-selling frozen products as part of its Low, Low Price (LLP) program.  This lower pricing includes brand-name and Weis Quality products. These price reductions are an expansion of Weis Markets’ Low, Low Price program, which launched in 2019 and includes more than 7,000 grocery products and nearly 80 produce items."

Expect to see a lot of these announcements going forward.

Published on: May 20, 2022

•  Telehealth provider MeMD said yesterday that it is changing its name to Walmart Health Virtual Care "as part of its official transition to the Walmart Health family. The name change marks the final stages of MeMD’s acquisition by Walmart Health, which was initially announced in May 2021."

The announcement notes that "Walmart Health Virtual Care provides enterprise-level organizations and groups nationwide with access to telehealth services, including urgent care, primary care and behavioral healthcare, complementing brick-and-mortar Walmart Health centers where patients can access in-person care. Walmart Health Virtual Care will be available in our Florida Walmart Health centers and expand to existing centers over the next several months."

Published on: May 20, 2022

An MNB reader offered this assessment of three stores visited this week in Los Angeles:

We visited 3 very different stores:  Amazon Fresh, Gelson’s and Vallarta.   Vallarta had energy, color, excitement and an amazing service meat counter.   Gelson’s had a great wine bar, beautiful produce, floral and prepared foods departments and unique product.   Both stores were very busy.  The Amazon store was flat, ok prices, and there were a lot of holes on shelves.  Customer traffic was pretty low and I could see why….

On another subject, from an MNB reader:

Just an observation after reading your thoughts about pricing and promotions.

I just came back from shopping at one of the national chain drug accounts.  According to my receipt, my total was $6.06.  When I looked further down the receipt it said that I saved $16.12.  I looked at the receipt two or three times to confirm I was reading the numbers correctly.

I am sure that the chain did NOT lose money on the transaction.  Why can't the prices I paid be the REGULAR low price?  How about the poor consumer who either purchased the same items the week before or did not sign up for the account's awards program. They pay higher prices.

Will EDLP pricing ever come back?  I doubt it!!

I know everyone is getting squeezed with inflation but it would be nice if pricing was more fair for everyone, everyday!

I wrote here yesterday, regarding the possibility that Covid-19- shots may be offered in the fall along with flu shots:

Speaking as someone who is double-vaxxed and double-boosted, I would say that I've been working on the assumption that when I get my flu shot in the fall - and I always get a flu shot, because it seems like the intelligent thing to do, just I've been happy to get vaccines for shingles, pneumonia, and pretty much anything my physician advises me makes sense.  I'm weary of the pandemic just like pretty much everyone else, but what I'm really weary of is getting emails from people who suggest that I (and most of the media) have not been sufficiently skeptical about masking and vaccination strategies and have not questioned the motives of those who push them.  It would be true that I made a decision to trust the vast number of public health officials who I think have been heroic in how they've dealt with the pandemic over the past two years, preventing far more deaths that would've occurred otherwise … though not as effectively as public health officials did in places like Australia.  Cast aspersions all you like.  I'm comfortable with both my personal and professional position on this, and we'll just have to agree to disagree.

Prompting one MNB reader to write:

I appreciate you still talking about this in this way.  I’m beyond weary of the pandemic. I still have a 3.5 year old at home with me, while my husband and I work full time.  The older kids are masked all day at school, and change clothes when they get home to protect their sister.  It’s really hard on all of us.  We still don’t have an approved vaccine for her, and you better believe I’ll be signing up the day it’s available. 

The other day we took note of a Newsweek list, generated by BrandSpark International, of the "most trusted grocery stores as voted by American shoppers. BrandSpark surveyed 3200 Americans to capture their real opinions of what grocery store brands they trust the most."

The national top four:  Walmart, Kroger, Aldi, and Meijer.

The northeast top four:  ShopRite, Walmart, Aldi, Stop & Shop.

The midwest top four:  Walmart, Kroger, Aldi, Meijer

The south top four:  Walmart, Publix, Kroger, H-E-B

The west top four:  Walmart, Safeway, Costco, Trader Joe's

I commented:

Forgive me.  This is not to denigrate any of the companies that made the list, but this is just a crock, illustrating the difficulty in ranking and comparing food retailers in such a big country.

Those 3,200 people may feel that way, but the ranking doesn't include some of the best food retailers in the country with the highest degrees of loyalty.  For example, where the hell is Wegmans … a company that, I'd be willing to best, engenders a lot more trust and loyalty in the northeast than any of the retailers mentioned.

Where is Lunds & Byerlys?  Dorothy Lane Market?  Central Market?  Stew Leonard's?  How about WinCo?  Schnucks?  

I give very little credence to any of these lists, which seem dominated by big names with big footprints, and yet seem to have very little nuance or understanding about what food trust really means.

MNB reader Steve Ham wrote:

Agreed.  Do a similar survey of “your most trusted pizza joint/Chinese restaurant/hair stylist”, and it’ll completely overlook local favorites that have only a small base, and instead come back with…. Dominos, PF Changs, and Great Clips.  Not my idea of where I want to go!

MNB reader Robert Dyer chimed in:

I am with you on your comments.  The key is the survey question(s).  Surveys are a lot like the usage of statistics (design and sample size matter) - Trust for lowest prices vs. trust to deliver a good shopping experience.  Or should the question be – Respect for a consistent delivery of an excellent customer experience.

Yesterday we quoted an Axios report that "the Food and Drug Administration is testing designs of a label that food manufacturers could voluntarily put on the front of packages indicating that a product is 'healthy' … The effort is controversial, in part because the meaning of 'healthy' continues to evolve. The FDA itself is in the process of updating its definition, which dates back to 1994."

MNB  reader Andy Casey commented:

You might call this the “full employment for tort lawyers” idea because what is considered healthy for most people is in fact deadly for some with allergies.  And before you say something about common sense (my first thought) let me just say – really?

An utterly fair point.

Responding to yesterday's FaceTime video about a drive-through Starbucks, MNB reader Rich Heiland wrote:

Having lived near Houston for 20 years I am well aware of its air quality problems. I couldn't help but noticing all those cars idling behind you. Starbucks has an entire page dedicated to all its doing to lower its carbon footprint. I would think moving away from drive-through only post-COVID and getting people back into the stores - which they used to call a "community" way back when - would be more in keeping with its stated environmental goals and values.

Regarding the mass shooting in the Buffalo supermarket, one MNB reader wrote:

Me venting, I know you won’t put this out there, so that is good.   File this under desperate times require desperate measures  -  caught in the act of a mass shooting, with both law enforcement witnesses and general public witnesses -  immediate execution.   No pleading not guilty, no jail time, no becoming a ‘celebrity’.  Brutal?  You bet.  So is taking the lives of so many innocent people, who are just living their lives.   Something dramatic must happen, gun control will not happen nor be the answer anyway.  Thanks.  

First of all, I did put it out there.  You said it.  I suspect there are a bunch of folks who agree with you.

However, the remedy you describe strikes me as very much the behavior of non-democratic, lawless, autocratic countries.  Pretty sure that's not where we want to go … I know it is not where I want to go.

And finally, this email from an MNB reader:

You have to love NY.  First the story on the governess announcing how bad Amazon treats their employees, which BTW she should not even weight in on, since one would think she has far more important issues to tackle like, excessive taxes, outward population migration, wasteful governmental spending, inflation costs, just to name a few.  Then a story on lawsuits against BK and MCD on the size of their burgers!!  Another colossal waste of time and money for the benefit of whom?  We all know whom, the attorneys.  It is no wonder that people are flocking away from NY.  It is a beautiful state, but the leadership and lawmakers are just messed up.  

First of all … "governess"?  Really?  Seems to me that when you describe the governor of New York that way, you betray a bias, and lack of seriousness.  Give me a break.

The governor of the state of New York has every right to weigh in if a she believes that the behavior of a company is negatively impacting the citizens she represents.  Seems to me that she's also been addressing a whole host of other issues, including some of those you mention.  (And she's done it without being a serial sexual harasser like her predecessor.)

As for the lawsuits …. those got filed in New York because that's where the lawyers decided to file them.  Is this a specious, wasteful lawsuit?  Maybe.  Lots of those filed every day, in every state of the union.

As for New York … sure, it has its problems.  Its politics can be screwy.   But it remains New York.  (I was born in Greenwich Village, by the way … and am immensely proud of that fact.) And New York State long has been, and will continue to be, the place where one of the greatest cities of the world is situated … a place that is dynamic and inclusive and vibrant, a place that is home to great businesses, amazing institutions, fabulous restaurants and great culture … and a place that continues to be the center of the universe in a way that wannabes like Texas and Florida and California and every other part of the US never will be.

Published on: May 20, 2022

"The Lincoln Lawyer," based on the "The BrassVerdict," the second book in Michael Connelly's series of novels about Los Angeles defense attorney Mickey Haller, is a terrific example of mainstream streaming television - and I mean that in the very best sense.

"The Lincoln Lawyer" doesn't break any new ground, substantively or stylistically.  Nobody will look back on it and utter its name in the same breath as "The Sopranos," or "Breaking Bad," or any of the other TV series that have emerged in this new golden age of television.  But it is, in its way, excellent - crisply written, engagingly acted, attractively set in the sunwashed climes of Southern California, and spinning a tale that remains a mystery that remains unresolved until the end.  Though even then, there is a moment that sets up a second season, which is inevitable since it already has been wildly successful for Netflix.

(The good news is that it has been roughly a dozen years since I read "The Brass Verdict" when it was first published, so I didn't remember the plot points - which made the series almost completely fresh for me.)

The series has been adapted by Connelly and the estimable David E. Kelley, and it offers Manuel Garcia-Rulfo as Haller, who begins the series as a recovering painkiller addict looking to redeem his personal and professional life.  (Matthew McConaughey played the part in the feature version of the first book, "The Lincoln Lawyer" - so named because his office is the back seat of his Lincoln Town Car - and the series actually is in synch with the books, in which Haller's mother is Mexican.  One thing not mentioned in the series - Haller's half-brother is Harry Bosch, but that's likely to go unexplored since "Bosch" is on Amazon and "The Lincoln Lawyer" is on Netflix, and never the twain will meet.)

Haller re-enters his career by being handed the entire law practice of a lawyer who has been murdered, which is just one of the crimes he has to deal with;  there are lots of small cases, but the big one is defending a video games entrepreneur accused of murdering his wife.  The cases are intertwined and range from being simple to complex, and Garcia-Rulfo is excellent at balancing a sense of vulnerability with a great deal of confidence in his lawyering skills.

There's a terrific supporting cast - Neve Campbell, Becki Newton, Jazz Raycole, Angus Sampson, and Christopher Gorham - and I four "The Lincoln Lawyer" to be utterly involving.  I really recommend it.

My wine of the week - the 2020 Domaine Fond Croze La Serre de la Garde Côtes du Rhône, a delightfully fresh white wine that's perfect for sitting in the back yard and sipping as the sun slowly goes down.

That's it for this week.  I hope you have a great weekend, and I'll see you Monday.

Sláinte!!