business news in context, analysis with attitude

Published on: May 24, 2022

by Michael Sansolo

There are times when, for countless reasons, things are kept from open view of the public. But in many ways piercing that veil of secrecy is worth considering as a way to excite, interest and engage an entirely new audience. Let me offer an example.

For most of its 64 miles, the Washington DC beltway is a massively nondescript highway circling the nation’s capital without ever offering a glimpse of the area’s monuments and majestic buildings. That is with one major exception.

Just off the Beltway near Chevy Chase, MD, sits a spectacular edifice that in so many ways resembles the Emerald City in the Wizard of Oz. (For decades, a railroad bridge near the building was spray painted with the words “surrender Dorothy” to cement the link to the famed movie.

The structure is actually a Mormon (or more correctly, the Church of Jesus Christ of Latter Day Saints) temple. Recently refurbished, it is briefly open to the locals (like me) for the first time in 50 years.

Go figure.  I found a business lesson there.

First, as a non-Mormon, let me say the structure is spectacular inside and out. And the church members do a wonderful job of directing, guiding and at-times teaching the outsiders as they walk through the multi-level structure.

One guide told me that more than 100,000 people had visited the building before the day I was there last week with 200,000 more expected through mid-June. The guides obviously cannot know if these visits are producing any converts, but there was something special about being welcomed into and guided through such an awesome structure.

I have to believe the rare insight into the temple will at minimum improve relationships between the LDS community and the surrounding neighbors who finally had a chance to see behind the curtain, both demystifying and glorifying the place. Years ago, I wrote about how the same LDS community deftly embraced the comical and very irreverent “The Book of Mormon” Broadway show when it came to town.

The lesson I would argue for businesses is to take a page from the LDS temple in Washington and recognize the power and benefit of letting people peek behind the curtain every so often. So many of the back room tasks at a supermarket are in many ways inviting and entertaining, plus a bit reassuring to customers curious about how their food is handled in much the way that many of us like restaurants where the cooking is done in plain sight.

There's a lyric from "The Book of Mormon:"

The skies are clearing and the sun's coming out.

It's a latter day tomorrow.

That's what we're talking about - casting a little bit of sunlight on things previously hidden.

Some of the most entertaining stores (think Stew Leonard’s) provide that bit of theater. Many others do it in bakery or certainly with sushi or the deli; heck there was even a time when, as kids, we could and would peer through windows to see inside the kitchen at McDonald’s and watch them make French fries from actual potatoes.

I fully understand that not everything can or should be done in full sight of customers and not everyone will react the same way. (For example, my wife joined me on the trip to the temple and came away feeling very differently about the experience.) However, much of what is behind curtains can be done in plain sight. And pulling back that curtain every so often might create some excitement, connection and maybe enhanced customer trust.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com.

His book, “THE BIG PICTURE:  Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available here.

And, his book "Business Rules!" is available from Amazon here.

Published on: May 24, 2022

I have some thoughts this morning about something called the Mitigate Racial Bias in Retail Charter, described as a coalition of major retailers that is pledging to create a more welcoming environment for Black, Indigenous and People of Color.  I have to wonder, a week after the shooting in a Buffalo, New York Tops store, if it is enough.  If it is too little, too late … since we seem to live in a world where white supremacists no longer feel the need to wear white hoods, but rather brag about their predilections on social media.

Published on: May 24, 2022

The Associated Press reports that Walmart has decided to pull from its stores a new special edition ice cream that commemorated the new Juneteenth federal holiday that observes June 19, 1865, the day on which Union soldiers informed enslaved Black people in Galveston, Texas, that the Emancipation proclamation - two and a half years earlier - had freed the slaves.

"Juneteenth holiday marks a celebration of freedom and independence," the company said in a statement. "However, we received feedback that a few items caused concern for some of our customers and we sincerely apologize. We are reviewing our assortment and will remove items as appropriate."

Here's how Black Enterprise characterized the outrage:

"As Juneteenth approaches, social media is spiraling regarding rumors about Walmart’s release of a 'celebration edition' ice cream to highlight the federal holiday. Folks are outraged deeming this move racist and exploitative.

"The Juneteenth ice cream features a swirled red velvet and cheesecake flavor. The carton shows an image of two Black hands with a yellow, green, red, and black background. The major retailer left consumers with a message on the container that reads, 'share and celebrate African-American culture, emancipation, and enduring hope.'

"Twitter users are displeased with Walmart’s audacity to even trademark the national independence day that commemorates the end of slavery for all Black people. One user called it 'gentrification'."

Published on: May 24, 2022

The Financial Times reports this morning that the US Securities and Exchange Commission (SEC) "is poised to crack down on exaggerated environmental, social and governance credentials in investment products, preparing standards for a sustainable funds industry that has boomed to almost $3 trillion … Rules being prepared by the Securities and Exchange Commission would specify disclosures to be made by investment funds that have terms such as 'ESG,' 'sustainable,' or 'low-carbon' in their names. The rules are expected to require information about how ESG funds are marketed, how ESG is incorporated into investing and how these funds vote at companies’ annual meetings, according to people familiar with the SEC’s thinking."

Published on: May 24, 2022

Walmart announced today the expansion of its DroneUp delivery network "to 34 sites by the end the year, providing the potential to reach 4 million U.S. households across six states – Arizona, Arkansas, Florida, Texas, Utah and Virginia. This provides us the ability to deliver over 1 million packages by drone in a year.

"Between the hours of 8:00 a.m. and 8:00 p.m., customers will be able to order from tens of thousands of eligible items, such as Tylenol, diapers and hot dog buns, for delivery by air in as little as 30 minutes. For a delivery fee of $3.99, customers can order items totaling up to 10 pounds, so simply put, if it fits safely it flies."

In a blog posting, David Guggina, Senior Vice President of Innovation and Automation for Walmart U.S., wrote, "After completing hundreds of deliveries within a matter of months across our existing DroneUp hubs, we’ve seen firsthand how drones can offer customers a practical solution for getting certain items, fast. More importantly, we’ve seen a positive response from our customers that have used the service. In fact, while we initially thought customers would use the service for emergency items, we’re finding they use it for its sheer convenience, like a quick fix for a weeknight meal. Case in point: The top-selling item at one of our current hubs is Hamburger Helper.

"Participating stores will house a DroneUp delivery hub inclusive of a team of certified pilots, operating within FAA guidelines, that safely manage flight operations for deliveries. Once a customer places an order, the item is fulfilled from the store, packaged, loaded into the drone and delivered right to their yard using a cable that gently lowers the package."

And, Guggina wrote:

"Walmart packages aren’t the only thing the drones will deliver. A core value at Walmart is to give back to the communities in which we operate, which is why as we scale our drone infrastructure, we’ll continue to influence the expansion of drone technology and enable other businesses to explore its benefits, too. This means DroneUp will offer local businesses and municipalities aerial drone solutions in areas like insurance, emergency response and real estate. For example, a local construction agency can work with DroneUp to monitor on-site job progress through aerial drone photography.

"Not only will the added revenue help offset the cost of delivery, but it also serves the entire drone industry by gathering more flight data as we work together to expand drone operations in a safe and regulated way."

Published on: May 24, 2022

Fascinating piece in the New York Times by columnist David Gelles, based on his book “The Man Who Broke Capitalism," which looks to re-evaluate the influence of Jack Welch, the influential former CEO of GE.

Gelles writes:

"During Mr. Welch’s two decades in power — from 1981 to 2001 — he turned G.E. into the most valuable company in the world, groomed a flock of protégés who went on to run major companies of their own, and set the standard by which other C.E.O.s were measured.

"Yet a closer examination of the Welch legacy reveals that he was not simply the 'Manager of the Century,' as Fortune magazine crowned him upon his retirement.

"Rather, he exerted a powerful and lasting influence on American business, informing how workers are treated, how shareholders are rewarded and how C.E.O.s comport themselves in an increasingly divisive age. When Donald J. Trump is elected president, when Jeff Bezos argues about inflation with the White House, when Elon Musk negotiates his $44 billion deal to buy Twitter by using the poop emoji — this is the world that Jack Welch helped create."

Gelles goes on:

"Almost immediately after Mr. Welch retired in September 2001 with a $417 million severance package, G.E. went into a tailspin from which it would never recover.

His pupils, though, went on to run dozens of other major companies, including Home Depot, Albertson’s, Chrysler and Boeing. Most of them failed.

"And in the decades since Mr. Welch assumed power, the economy at large has come to resemble his skewed priorities. Wages stagnated and jobs moved overseas. C.E.O. pay went stratospheric and buybacks and dividends boomed. Factories closed and companies found ways to pay fewer taxes.

"Beyond his enduring influence on the economy, Mr. Welch also redefined what it meant to be a boss, personifying an aggressive, materialistic style of management that endures to this day."

And:

"G.E. was worth $14 billion when Mr. Welch became C.E.O., just months after Ronald Reagan took office. Not long before Mr. Welch retired, just days before Sept. 11, 2001, the company was worth $600 billion, the most valuable company on Earth.

"But the ways in which Mr. Welch created so much shareholder value often did more harm than good.

"He was a compulsive dealmaker, fueling G.E.’s growth with a relentless series of mergers and acquisitions that took G.E. far from its industrial roots and set in motion a wave of corporate consolidation that would reduce competition in industries as diverse as airlines and media.

"He closed factories and fired employees by the tens of thousands, unleashing a series of mass layoffs that destabilized the American working class. He devised systems like 'stack ranking,' which mandated that the bottom 10 percent of workers be fired each year, and took root at other companies. And he embraced offshoring and outsourcing, sending labor overseas and turning to other companies to provide back-office functions like accounting and printing."

You can read the article here.

Published on: May 24, 2022

The Dallas Morning News has a story about how a North Texas Olympic bronze medalist is suing H-E-B and a supplement manufacturer for deceptive marketing and trade practices.

Here's how the News frames the story:

"After winning the bronze medal for the United States at the 2016 Olympic Games, Jaqueline Galloway began the long and arduous process of training for her next competitions.

"But a bottle of supplements and a failed drug test sullied her reputation and dealt a swift kick to her taekwondo career, Galloway testified Monday in a Collin County courtroom. She sued H-E-B, which owns Central Market in Plano where she bought a bottle of magnesium, calcium and zinc multivitamins in February 2019. The trial began this week."

Galloway says that she "had taken the supplements for just over a week when she was given a random drug test. Her urine tested positive for ibutamoren, a substance on the U.S. Anti-Doping Agency’s list of prohibited substances, and she was banned from competition … Galloway’s lawsuit accuses H-E-B and Nexgen Pharma, which manufactured the vitamins, of deceptive marketing and trade practices.

"The bottle of multivitamins, she testified, mentioned nothing on the label about Nexgen being the manufacturer. Had the label mentioned Nexgen, Galloway said she would have done more research into the company before buying the vitamins.

"The label also said the supplements were guaranteed 'for potency and purity.'  Galloway told jurors she took that to mean the product contained no other substances other than what was listed on the label … Galloway said she stood in the aisle before buying the bottle, comparing the listed ingredients to a list of banned substances. She found none. She had been taking the supplements every day. She still took the supplements after submitting a sample of her urine.

"But in late February, she received a letter notifying her that she failed the drug test, she testified. Galloway was immediately suspended from competition."

The News writes that "during their opening statements, lawyers for both H-E-B and Nexgen told the jury that they’re not accusing Galloway of knowingly taking the banned substances.

"Russell Schell, a lawyer for Nexgen, told the jury that other bottles of the supplement — including ones from the same lot Galloway bought — had been sent for testing, with no results for the banned substance.

"But when the exact bottle Galloway bought and opened was sent for testing, the banned substance was found, Schell told jurors in opening statements. The substance was found on the surface level of the multivitamins but not in an equal amount on each pill, Schell said. Lotz, the H-E-B attorney, told jurors that, out of the batch of 1 million pills that Galloway’s bottle came from, only four pills in Galloway’s opened bottle tested positive for the substance."

Published on: May 24, 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:  85,113,962 total cases … 1,029,121 deaths … and 81,701,524 reported recoveries.

The global numbers:  528,402,463 total cases … 6,302,103 fatalities … and 498,834,264 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 … 66.5 percent are fully vaccinated … and 46.5 percent of fully vaccinated people have received a vaccine booster dose.

Published on: May 24, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  From the Financial Times:

"Amazon shareholders will challenge the company on executive pay, tax transparency, working conditions and unionisation, as chief executive Andy Jassy faces his first annual meeting at the helm of the ecommerce and cloud computing giant.

"The $1tn tech company is opposing all 15 of the shareholder proposals, the most it has faced since 2010, according to regulatory filings. In that time, no proposal has secured 50 per cent support and voting has historically followed the board’s recommendations. Founder and former chief executive Jeff Bezos himself controls 12.7 per cent of the overall vote.

"Still, the strength of opposition could force the company to alter its policies and practices, as Big Tech companies are increasingly challenged by investors who want them to become more responsive to public controversies."

•  The Seattle Mariners announced that the new "Walk-Off Market" at T-Mobile Park - featuring both Amazon's Just Walk Out checkout-free technology and Amazon One biometric payment technology - will open tonight for the Mariners' game against the Oakland Athletics.

It is the first major league stadium to be equipped with both technologies.  The "Walk Off Market" is being run by hospitality company Sodexo Live!.

The opening comes at the same time as Amazon is expanding use of its Amazon One contactless payment system to Whole Foods stores in both California and New York.

Nice to know that in a season where the Mariners already are nine games out of the first place in their division, and the last-place Athletics are 10.5 games out, at least the fans will be winners with a new frictionless shopping experience.

Published on: May 24, 2022

•  DC Velocity reports that "Warehouse robotics vendor Symbotic LLC is expanding its ties with Walmart Inc. and now plans to provide its robotics and software automation platform in all 42 of the retail giant’s regional distribution centers over the coming years, up from its previous plan to implement the technology at 25 of those sites.

"Terms of the deal were not disclosed, but Symbotic said it now has a backlog of more than $11 billion in committed sales, up from its previous level of $5.3 billion on March 1."

The rollout of the technology at Walmart is expected to take as long as eight years.

Published on: May 24, 2022

•  CNBC reports that "after 15 years operating in Russia, Starbucks will exit the market, joining companies like McDonald’s, Exxon Mobil and British American Tobacco in withdrawing from the country completely.

"The coffee giant announced Monday that it will no longer have a brand presence in Russia. Starbucks has 130 locations in the country, which account for less than 1% of the company’s annual revenue. They are all licensed locations, so the Seattle-based company itself doesn’t operate them.

"Starbucks said it will pay its nearly 2,000 Russian workers for six months and help them transition to new opportunities outside of the coffee chain."

Have to believe that while the Starbucks brand may not be in Russia, there will be little attention paid there to observing trademarks and intellectual property rights.  

Published on: May 24, 2022

…will return.