Things don’t always go as planned. A famous general once said that wars are won by the side that recovers best from lost battles, because the reality is, we all lose. The trick is getting over those losses quickly and learning from them.
That's something that Amazon has built into its culture from Day One - the company seems intolerant of incompetency and complacency, but very tolerant of mistakes and losses. (You can look this up on your Amazon Fire smart phone. Don't have one? That's because it was an enormous failure for Amazon, which turned learning from the experience into its Alexa-powered smart speaker ecosystem.)
But sometimes it takes a new set of eyes to see how to turn even the worst decisions into the potential for a win or celebration.
A terrific example is possibly the most infamous contract in all of professional sports - the one given in 2000 one-time New York Mets player Bobby Bonilla decades ago; a contract that draws national attention every July 1 because on that date the long-retired player gets an annual paycheck for nearly $1.2 million.
The details of the incredibly awful deal are far too numerous to list here but the abridged version is that it involved the notorious Bernie Madoff, the Mets’ then cash-poor owners and the perennially unlucky lovable Mets.
Essentially Madoff sold the Mets owners on a financial scheme to restructure Bonilla’s contract with visions of how much money they would actually earn in the process. But shortly afterward Madoff’s Ponzi schemes unraveled, the Mets’ owners had to sell the team and Bonilla keeps getting his annual check. (He’ll be getting paid for another 13 years.)
The incredible contract now belongs to the Mets’ new owner, Steve Cohen, and he is providing us with a lesson in how to shine a different light on the disaster. As USA Todayreported, the Mets’ new owner recognizes the attention long focused on the ridiculous contract and the widespread attention given to “Bonilla Day” by sports fans far and wide.
So he wants to turn the day into an event featuring NFTs (non fungible tokens) with Bonilla’s autograph on various baseball memorabilia and possibly having the retired player at the stadium to greet the crowd. Among the ideas under discussion are having Bonilla ride around the stadium in a car and having the infamous contract itself on display.
There’s even speculation that the contract will sell at a memorabilia auction and could fetch a higher value than Bonilla’s annual check.
The lesson in all of this would seem to be that we’re all going to make mistakes, just hopefully not on the same scale as the one done by the Mets’ previous owners. Sometimes, as happened with the Mets, the mistakes might become widely known and even ridiculed.
But with a sense of humor and some creative merchandising, even a mistake can become cause for celebration and maybe some redemption.
Michael Sansolo can be reached via email at firstname.lastname@example.org.
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.
"Trust, like the soul, never returns once it goes," is a Latin proverb oft quoted by me here on MNB. While in the Bahamas, I found a good lesson in trust at a beach bar in Great Guana Cay called Grabbers.
Last month, the Los Angeles Dodgers honored their legendary pitcher, Sandy Koufax, with a statue in front of Dodger Stadium (still one of the best ballparks in baseball and, amazingly, the third-oldest major league stadium in the country).
What made the moment noteworthy was the fact that Koufax, now 86, gave a short speech at the event. Koufax is extraordinarily reticent about such things; he didn't even speak on the record with his biographer, Jane Leavy, though he did confirm some stories and allow her to speak to friends and family. ("Sandy Koufax: A Lefty's Legacy," remains a terrific read.)
In his speech, not surprisingly, Koufax didn't engage in any kind of self-promotion. Here's how the Los Angeles Times characterized it:
"It was, appropriately, a breathtaking curveball.
"It was, stunningly, a 10-minute speech from a man who hasn’t publicly spoken that much in 50 years.
"It was, wondrously, the humanizing of Los Angeles’ phantom legend, a rare public pulse from a pitcher whose greatness has mostly existed in Dodgers mythology.
"It turns out, at age 86, he just wanted to say thank you.
"'Conventional wisdom has always said don’t give an old man a microphone, he’s got too many years to talk about,' said Koufax, looking forever young with fashionable sunglasses and a full head of white hair. 'Well, I tried not to, but I’m going to start way back at the beginning …'
"And he was off, spending the entirety of his speech tracing his career from high school outfielder to Hall of Famer, expressing gratitude for figures both great and obscure, from Jackie Robinson and Don Newcombe to sandlot coach Milton Laurie and clubhouse manager Nobe Kawano.
"'The list of people is incredibly long, but I’m going to go through some as quickly as I can,' he said, and so he did, from his first pitching coach, Joe Becker, to all four of his roommates, citing each by name, Doug Camilli, Carl Furillo, Norm Sherry and Dick Tracewski.
"'He thanked his catchers. He thanked his trainers. He thanked his relievers. He thanked his outfielders. He thanked his infielders. He thanked two different Dodgers’ ownership groups. He thanked the fans.
"'Most of all I thank my teammates, all of them,' he said, before listing nearly all of them."
In other words, Koufax - one of the greatest pitchers of all time - understood that his greatness was enabled by others, built on the hard work of others.
In doing so, Koufax displayed remarkable leadership … the kind of leadership that business leaders - even those, especially those at the highest levels of compensation and achievement - ought to demonstrate. They may occupy corner offices, they may enjoy extraordinary compensation packages, but they are only there because their achievements and careers have been enabled by others.
It was an Eye-Opening performance by Koufax, who once again showed the world that he knows how to pitch.
If you want to watch Koufax, here it is:
By the way, there was another, different example of servant leadership in Hartford, Connecticut, other other night, when New York Mets ace Max Scherzer pitched a rehab game for the Binghamton (NY) Rumble Ponies. Afterwards, Scherzer paid for dinner for the entire team at nearby Fleming Prime Steakhouse. "They're eating well tonight," he said.
This is, in fact, a tradition in minor league baseball. When rehabbing major leaguers are in town for tune-up games before returning to their teams, they pay for dinner … a small but important way to demonstrate an understanding that they owe something to the systems and minor leaguers that serve as an infrastructure for their own success.
Content Guy's Note: Scott Moses, Managing Director and head of the Grocery, Pharmacy & Restaurants investment banking practice at Solomon Partners, last week posted on his company's website an analysis of the Federal Trade Commission's recent Merger Guidelines Listening Forum videoconference, designed to allow the FTC's leadership to hear from members of the public about the effects of mergers and acquisitions on a range of market participants.
In this analysis Moses argues - as he has consistently in recent years, both here on MNB and elsewhere - that there is no time like the present for the FTC to change the way it defines the "traditional grocery market" in a way that reflects reality, allowing smaller grocers to gain the benefits of scale in a way that in turn benefits consumers.
Here is his analysis:
The mandate of the Federal Trade Commission to protect consumers from anti-competitive behavior is critically important, particularly during a difficult inflationary time. However, when evaluating grocery mergers, the FTC continues to define the traditional “grocery market” in a narrow manner — supermarkets, which is plainly inconsistent with the realities of the present-day marketplace.
This directly undermines the existential scale-building efforts of traditional regional supermarkets, whose viability challenges from much larger, far better-capitalized, non-traditional “Grocery Giants” like Amazon, Walmart, Target, Costco Wholesale, Aldi and Dollar General have been well-documented.
Ironically, this calculus effectively benefits precisely the same Giants that the FTC has professed the need to rein in (namely Amazon, America’s fifth-largest grocer, allowing the Giants to get bigger, stronger, take more customers and make it harder for the smaller traditional operators — whose heroism fed thousands of American communities during the pandemic and countless previous crises — to survive in the long-run.
When grocers merge, the combined business’ stores almost always still compete with a long list of traditional and non-traditional grocers, including supercenters, club stores, drugstores, dollar stores and other discount grocers. Amazon, Walmart, Target and Costco are also America’s largest online operators. They all offer delivery services that meaningfully widen the radius of customers for whom they are able to compete, in many cases without having a store nearby. Kroger is now opening Ocado facilities in various markets where it does not have stores.
The FTC has historically argued that “other types of retailers” such as discount grocers — such as Aldi, Lidl, Dollar General, Dollar Tree/Family Dollar — and warehouse club stores like Sam’s Club (Walmart), Costco and BJ’s Wholesale are not part of the relevant grocery “market” because they do not have a supermarket’s full complement of products and services. They are not viewed by FTC orthodoxy to be “adequate substitutes for supermarkets” and therefore are excluded from the FTC’s view of the “grocery market” when evaluating grocery mergers, as are online grocers, whose rapidly growing sales are essentially excluded.
While the FTC rightfully aims to ensure that grocers do not employ monopolistic pricing power, in 2022 (not 1992, when this calculus was more fairly employed), there has never been so much pricing transparency quite literally at our fingertips. As such, it is nearly impossible for a small regional grocer to meaningfully raise prices without losing countless customers to the lower-priced, ubiquitous non-traditional operators from whom they can order groceries online, at will, in most U.S. markets. Online grocery has tripled in the past three years and is expected to double again in the next five years.
Hopefully, there are some changes coming.
Last week, the Federal Trade Commission held its Merger Guidelines Listening Forum videoconference to hear from members of the public about the effects of mergers and acquisitions on a range of market participants. FTC Chair Lina Khan and FTC Commissioners Noah Phillips, Rebecca Slaughter, Christine Wilson and Alvaro Bedoya all attended the event, which included brief remarks from distinguished speakers from a wide range of industries. There were a variety of astute, important points made that will hopefully help advance the FTC’s “grocery market” definition calculus to reflect modern market dynamics.
Commissioner Phillips, in particular, provided insightful perspective on the current state of the grocery industry, consumer challenges and the importance of mergers in enabling grocers to become large enough to be able to afford to keep prices lower for customers and mitigate the impact of the significant inflation being experienced across the country:
“Our nation is emerging from one crisis, the Covid-19 pandemic and is well into another. As we face historic inflation, Americans are struggling to fill up their gas tanks and feed their families. We want to encourage companies big and small to enter and grow to meet consumer demand during this time. We want them to be more efficient so that they can drive down costs and pass the savings on to consumers. Competition-enhancing mergers and acquisitions is one way they do that. M&A benefits consumers by spurring innovation, improving quality and lowering prices. Smaller firms can join forces to compete more effectively and efficiently against larger rivals; combining can put financially struggling firms on firmer footing and lower their cost of [the] capital...they need to spend in order to grow. Traditional retailers, for example, have seen reduced investment and bankruptcy as they face competition from the Amazons and Walmarts of the world. Combining – merging – can help them compete...[D]iscouraging efficiency, and failing to put consumers first, will mean higher prices,” Phillips said.
One speaker in the forum was Mark Gross, a 25-year grocery industry veteran and co-chairman of Northeast Grocery Inc. (Price Chopper/Market 32, Tops Friendly Markets), executive chairman of Southeastern Grocers (Winn-Dixie, Harveys Supermarket, Fresco y Mas), a director at Acosta and CEO of Kernel Group Holdings. He also is former CEO of distributor Supervalu (now part of United Natural Foods Inc.) and former co-president of distributor C&S Wholesale Grocers.
Gross began his testimony by articulating three key conclusions:
1. “We have to fully update our definition of the grocery market to include all non-traditional grocers, whether they offer a full shop or not.”
2. “We need to understand the economic dominance of these non-traditional grocers and how they assert that power.”
3. “To foster competition with the Grocery Giants, we need to be more accommodating of regional grocers’ merger activity.”
Of the top 15 U.S. grocery sellers, Gross noted, only five are traditional supermarkets. He explained that the growth in non-traditional grocers has resulted in the reduction of traditional grocery stores. He added that non-traditional grocers are the primary store for most consumers, who shop at multiple channels and banners every week, and that fact does not seem properly reflected when the FTC measures the grocery market and market share.
“Because of the economic dominance of the grocery market by a handful of companies,” Gross argued, “the market has to be viewed in its entirety of who is competing in this space and who yields market power.”
In demonstrating the economic dominance of America’s Grocery Giants, Gross observed that Walmart’s capex spend last year was $13 billion, more than half of which (over $7 billion) was on technology. A regional grocer, he noted, will spend at most $200 million on capex, of which only about $20 million is on technology. That $20 million spend versus $7 billion is “disproportionate,” he said.
Gross also talked about the merger completed last year between Price Chopper/Market 32 and Tops Friendly Markets in upstate New York (on which, for full disclosure, I served as financial advisor to Price Chopper). For background, Tops’ operating pressures from Grocery Giants such as Amazon, Walmart, Aldi, Dollar General and Family Dollar led it into bankruptcy in 2018. Tops was fortunately able to avoid liquidation and exit bankruptcy in 2019, but remained too small to properly compete with the fast-growing Grocery Giants, who have a much lower cost of capital and nearly unlimited capacity to make investments in price, wages, marketing, technology and growth.
“The transaction was pro-competitive, enabling stores to offer better choice for consumers vis-à-vis the Giants and enabling the merged company to generate various improvements and leverage technology spend, which helps us to operate more effectively and better serve our customers and our 30,000 associates ... in over 100 communities,” Gross asserted.
Finally, in arguing that the FTC should properly recognize the market dominance of the Grocery Giants and their ubiquity as leading online grocers, Gross lamented, “Our team spent nine months explaining this to the [FTC] staff and compliance officers. ... We spent countless hours and millions of dollars demonstrating that Aldi and Dollar General are bona fide grocers who sell the same merchandise we do. ... Amazon, Walmart and Target are the largest American online grocers, and they sell a lot of food in our markets.”
Another speaker, Stephanie Martz, chief administrative officer and general counsel of the National Retail Federation, made an important point regarding the calculus that the FTC uses in evaluating the competitive market for potential mergers She argued that the FTC must also incorporate e-commerce competitors as well as brick-and-mortar players.
“I can’t emphasize this enough,” Martz noted. “It seems inconsistent to express concern, on the one hand, that some of these e-commerce players are too large and on the other fail to account for their effect on individual market segments.”
Some have argued to the FTC in previous sessions that consolidation among smaller traditional grocers should be limited and that the government should instead rein in the conduct of the Grocery Giants like Amazon and Walmart. Specifically, merger opponents argue that the only path to more effective competition in the market is to more aggressively enforce the Robinson-Patman Act, which would, they suggest, equalize the wholesale price of grocery staples. Their argument is that if a small grocer pays the same price for milk as does Walmart, competition problems will take care of themselves.
There are various flaws in this argument; I would focus one in particular: It would not level the playing field as its proponents suggest. While Grocery Giants do use their scale to negotiate lower costs from suppliers, equalizing the cost of those products would not alleviate the gross difference in scale enjoyed by the Giants. The inherent benefits of that scale — including a lower cost of capital, more efficient distribution and logistics, cheaper store and corporate contracts, and higher profitability from basic fixed-cost leverage — gives these Giants an extraordinary advantage that won’t be undone by effectively raising the price of milk at Walmart or Target. To the contrary, this would just exacerbate the inflationary challenges consumers are experiencing.
However, when smaller traditional grocers are allowed to gain the benefits of scale, consumers benefit because there are more options available to them to shop at more grocers that are more efficient and can offer lower prices on more goods. Larger, consolidated entities (albeit still much smaller than the Grocery Giants) might finally be able to exert some restraint on the Giants, which have not faced serious competition for many years and continue to grow at a staggering rate.
After America’s regional grocers stores stepped up to feed their nearly locked-down communities at the height of the pandemic and for the past two-plus years since, it is surprising there still is not more clear recognition among regulators of the critical role that smaller regional grocers play serving customers in crisis after crisis; the existential challenges they face; the consumer benefits of enabling them to grow and become more efficient; and the fact that, without more scale to compete, many of them may not be around in the next crisis to help feed our communities. The department store industry remains a clearly analogous cautionary tale that folks should remember when considering the scale that regional grocers are trying to build in order to better compete with the Grocery Giants and continue to serve as pillars of thousands of American communities.
Source: Solomon Partners
You can find out more about Scott Moses and contact him here.
The Wall Street Journal offers an assessment of the current state of the US economy. Some critical points from the story:
• "Consumers’ short-term outlook on the U.S. economy reached the lowest point in nearly a decade, the Conference Board’s latest consumer-confidence survey showed. A separate survey of consumer sentiment fell to its lowest point on record."
• "Higher prices are denting consumer spending, the economy’s main engine. U.S. household spending eased to its slowest pace this year in May, the Commerce Department said."
• "Weakness in spending appears to have since continued: Outlays at retailers slightly deteriorated in early June compared with the end of May, according to credit- and debit-card spending figures from data company Earnest Research."
• "Cutbacks in consumer spending threaten to weigh on U.S. economic growth, which is flashing signs of slowdown. Many forecasters are increasingly fearful that the economy could fall into a recession under the weight of rising inflation and the Federal Reserve’s attempts to curb it through aggressive interest-rate hikes."
• "Consumers across income levels have cut their spending in recent weeks. Workers who earn less than $100,000 annually curtailed their spending at the fastest pace of all income groups between late May and the week ended June 15, according to Earnest.
Consumers spent less at sit-down restaurants in the week ended June 15 compared with a year earlier, Earnest data show.
"As restaurant costs surge, consumers are finding little relief at grocery stores, where prices for food jumped 11.9% in May from a year earlier, the biggest increase since 1979. As a result, grocery shoppers are shifting their spending habits, after splurging on higher-end groceries and food delivery in 2020 and 2021. For example, Whole Foods customers are switching to lower-price species of fresh fish, according to its operating chief."
Seems to me that this is a perfect time for food retailers to do something we often talk about here on MNB - become more than just a source of product, but also a resource for consumers.
In this moment, that means providing some level of education to shoppers about how to stretch their money … helping them figure out how to make meals that meet their aspirations while not spending more money in restaurants … and taking an approach that stresses that value is not always the same as low price. People may want to spend less money, but they also want more value for what they do spend.
This won't be a short-term effort. The broad expectation that the current period of inflation will be followed by a period of recession. This will affect customers and employees, and this will be a perfect time to create a sense of community around the food store experience.
By the way .. the National Retail Federation (NRF) last week challenged conventional thinking about recession, suggesting that while "the US economy is slowing … consumers remain financially healthy and the nation is unlikely to enter into a recession during the remainder of 2022."
National Retail Federation Chief Economist Jack Kleinhenz said, “I am not betting on an official recession in the near term, but the most recent research pegs the risk over the next year as about one in three and it will be touch and go in 2023. In the meantime, a contracting economy short of a recession is not out of the question.
“Regardless of the prospect of a downturn or whether it will meet the threshold of a recession, the consumer outlook over the next few months remains favorable,” Kleinhenz said. “The economy is moving away from extremely strong growth toward moderate growth, but increased income from employment gains, rising wages and more hours worked is expected to support household spending. Policy issues will likely be the deciding factor shaping the economic outlook this year and next.”
"Whole Foods Market says it is finding it easier to hire retail workers. Turnover at Chipotle has stabilized after ticking up last year, according to the burrito maker. Grubhub says it is having no problem attracting drivers.
"Several executives, speaking about the labor market at the Wall Street Journal’s Global Food Forum in Chicago, said they are seeing some early signs that labor pressures are easing for entry-level positions. However, many said that hiring and retaining staffers still takes much time and attention.
"The U.S. unemployment rate, at 3.6% as of last month, remains historically low, and employers have offered signing bonuses, higher pay and stepped-up training and onboarding in recent months to draw staffers. Some employers expressed optimism at the Journal event that the headaches in staffing restaurants, grocery stores and other businesses who employ many hourly workers might be beginning to improve, even as others insisted that they still needed many more employees."
If the labor pressures on retailers ease, I hope that businesses don't take advantage of the moment to take some level of revenge on the workers who took advantage of the climate in recent months to press for more money and better working conditions. The pendulum always swings, but retailers would be better off if they look to create more labor stability by continuing to invest in their associates, creating an environment in which workers feel more invested in the business.
We also may be treading on relatively unexplored territory. The Journal had another story over the weekend about how unusual the current economy is:
"The U.S. economy has experienced 12 recessions since World War II, and each one included two features: Economic output contracted and unemployment rose.
"Today, something highly unusual is happening. Economic output fell in the first quarter and signs suggest it did so again in the second. Yet the job market showed little sign of faltering during the first half of the year. The jobless rate fell from 4% last December to 3.6% in May.
"It is the latest strange twist in the odd trajectory of the pandemic economy, and a riddle for those contemplating a recession. If the U.S. is in or near one, it doesn’t yet look like any other on record.
"Analysts sometimes talked about 'jobless recoveries' after past recessions, in which economic output rose but employers kept shedding workers. The first half of 2022 was the mirror image - a 'jobful' downturn, in which output fell and companies kept hiring. Whether it will spiral into a fuller and deeper recession isn’t known, though a growing number of economists believe it will."
Fast Company reports that legislation under consideration in California would mean that "any large brand that sells products in plastic packaging will have to start planning to eliminate some of that plastic - including by switching to some reusable and refillable packaging options."
SB 54, or the Plastic Pollution Producer Responsibility Act, would address the fact that "as the amount of plastic packaging has grown, it’s created not only huge environmental challenges - and potential health challenges, as plastic starts to show up in living humans - but also new costs for cities trying to manage all of that waste."
The California bill, according to Fast Company, says that "producers will also have to cut the amount of plastic packaging and foodware by 25% over the next decade. As much as 10% of the packaging will have to be eliminated without being replaced by a different material, forcing companies to adopt new models like reusable packaging."
The story says that some environmental groups "argue that the bill doesn’t quite go far enough; it doesn’t ban polystyrene foam packaging, for example. (It does require a 20% polystyrene recycling rate by 2025, which the Ocean Conservancy says would create a de facto ban since recycling programs for the material are limited.) Other advocates are pushing for a ballot measure instead, which would ban foam packaging and could give the state more control over the whole program. If the ballot measure moves forward, Californians will vote on it in November."
With brief, occasional, italicized and sometimes gratuitous commentary…
• From Bloomberg:
"Amazon will deliver packages to customers by bike and on foot for the first time in the UK as the retailer announces new methods of reducing emissions.
"The delivery giant said its new 'micromobility' hub in London will lead to a million more customer deliveries each year, while others are expected to open across the UK in the coming months.
"Delivery drivers will ride e-cargo bikes and walk to customers' homes and offices in central London, replacing thousands of traditional van journeys in the city's congested roads.
"Amazon has taken steps to electrify its fleet with 1,000 electric vans now on UK roads, as it strives to deliver half its shipments with net-zero carbon by 2030 and all by 2040."
• Business Insider reports that "Amazon has recently tested a new internal survey aimed at learning more about employee sentiment throughout the week, Insider has learned.
"The new program asked how employees felt about their jobs during the week, including questions about how positive or negative their emotions were for that day, according to people familiar with the program. Only select employees were invited to the trial test, which was conducted over email and ran for three days earlier this month. The survey questions were sent at around 2 p.m. Seattle time each day.
"The limited test was an extension of Connections, Amazon's daily survey program through which employees answer one question confidentially about their experience when they sign in for work every day. Questions for Connections are wide-ranging, such as thoughts about their managers and the length of their meetings, or in some cases, how crowded bathrooms get."
The story notes that "the new trial survey comes at a time when Amazon is grappling with a spike in attrition and executive turnover. By collecting more data about employee sentiment, Amazon can potentially better identify employees with low morale or higher risk of leaving."
We appear to have come. along way from the days when Jeff Bezos wanted to pay disaffected employees to leave, on the theory that keeping them would end up costing the company a lot more money.
• From CNBC:
"Enjoy Technology, a retail startup founded by former Apple and J.C. Penney exec Ron Johnson, filed for Chapter 11 bankruptcy protection on Thursday, mere months after it made its stock market debut.
"The company’s liquidity has dwindled while its business has suffered from staffing shortages. Enjoy, which operates mobile retail stores, went public in October through a merger with a special purpose acquisition company, or SPAC.
"Enjoy said in a filing that it plans to sell its assets in the United States to the technology repair company Asurion."
The story notes that "Johnson, who is also CEO of Enjoy, founded the company in 2014. He is best known for helping to create Apple’s retail business and for trying to turn around the J.C. Penney department store chain, albeit unsuccessfully. He was there from 2011 to 2013, a period in which his strategy alienated the retailer’s core customers."
Enjoy describes itself as "a technology company that is reinventing 'Commerce at Home' by partnering with the world’s premium consumer brands to provide a personalized, high-touch retail experience in the comfort of home … Enjoy’s technology platform integrates orders, matches them in real-time to Experts and inventory, and coordinates logistics for delivery. Enjoy’s full-time, trained Experts currently offer delivery, setup, activation, data-transfers, product trade-ins, and additional shopping all in one convenient, free visit."
It always sounded great … but for the life of me, I could never figure out the economics of it. Apparently, neither could they … and economic shifts made the road ahead even more inhospitable.
With brief, occasional, italicized and sometimes gratuitous commentary…
• From the Associated Press:
"Slightly fewer Americans applied for unemployment benefits last week, reflecting a robust job market despite rising job cuts in some sectors of the economy that have cooled in recent months.
"Applications for jobless aid for the week ending June 25 ticked down to 231,000, a decline of 2,000 from the previous week, the Labor Department reported Thursday. First-time applications generally represent the number of layoffs.
"The four-week average for claims, which evens out some of the week-to-week volatility, rose by 7,250 from the previous week, to 231,750.
"The total number of Americans collecting jobless benefits for the week ending June 18 was 1,328,000, down 3,000 from the previous week. That figure has hovered near 50-year lows for months."
• CNBC reports that "Kohl’s announced Friday that it is terminating talks to sell its business, saying that the retail environment has significantly deteriorated since the beginning of its bidding process … The retailer’s decision to end deal talks comes as its stock price slumps and its sales decline. Kohl’s has faced months of pressure from activist investors to pursue a sale and shake up the business with a new slate of board directors. Earlier this year, it rejected a different firm’s buyout offer of $64 a share, which it considered too low. The stock closed Friday at $28.68.
"Kohl’s on Friday said rocky conditions in the retail industry and the overall economy effectively doomed the deal with Franchise Group, after it engaged with more than 25 different parties with help from bankers at Goldman Sachs."
• The Taipei Times reports that Costco purchased the 45 percent stake in Costco's business there that it did not own for $1.05 billion US, making the local company a fully-owned unit. The story notes that "three Costco stores in Taiwan — in Taipei’s Neihu District, New Taipei City’s Jhonghe District, and one in Taichung — were among the top 10 most profitable Costco outlets worldwide."
• Axios reports on the likelihood of a new shortage: "there are reports of Dijon shortages in France because of bleak mustard-seed harvests in Canada."
First sriracha, and now Dijon mustard? Sounds like the end of western civilization to me…
• Fresh Thyme Market announced that Liz Zolcak, the company's Vice President of Operations, has been promoted to the presidency, succeeding the retiring Gerald Melville.
• Online food retailing platform Rosie announced that it has hired Lori Brown, most recently the regional vice president leading Post Consumer Brands in the West Region, as its new senior vice president of industry and customer development.
I've had a number of stories over the past week or so about the impact on businesses created by the Supreme Court decision overturning Roe v. Wade … and even a non-business story on an increase in vasectomies.
These stories prompted the following email from an MNB reader:
Thank you for mentioning the horrific impact of the SCOTUS Roe V Wade decision in the MNB. I wanted to add that men are not the only ones rushing to protect themselves. Women are also rushing to get their tubes tied, a more permanent solution to protecting oneself from unwanted pregnancy. Here is an article link which cites numerous stats on the increase in requests for the procedure.
It is important to note that while men are immediately booked for a vasectomy procedure when they request it, women are denied a majority of the time. Many need written permission from their husbands or are asked to wait until they are 35 or older in case they "change their minds." I was one such unlucky woman who requested this procedure multiple times in my 20's and was always denied. Sadly, women never truly had bodily autonomy or our wishes would have been respected by doctors. I wish I hadn't been denied as it could have spared me from a miscarriage in my 30's where I almost bled to death. Now, I'm in my 40's and still don't want children and have absolutely no regrets that I don't have them.
The most important part of the Daily Beast article is the reference to an online list of doctors in every state who are friendly to women's wishes for getting their tubes tied. It can be found directly in the Reddit link below. I hope you will consider sharing this as it takes the expense and agony out of trying to find a doctor who will respect a woman's wishes. It is only a tiny percentage of gynecologists, so it really is like finding a needle in a haystack.
If you share the article or my comments, please don't use my name. I live in Texas and am concerned about the punishment laws for "aiding or abetting" someone seeking an abortion. They say contraception is next. You can see how easily women won't just lose their right to an abortion, they will lose information on how to help themselves too. The injustice is staggering.
Thank you for all of the great daily updates on the retail/grocery industry. I have been a reader for at least 15 years. I know you are a more enlightened man, and I hope my email has been an Eye-Opener.
I'm not sure how enlightened I am, but I appreciate the compliment.
It's just that I have a wife, and a daughter, sisters, plus a lot of women friends. I just try to pay attention.
Take care. Be safe.
We took note last week of a Dallas Morning News story about how "H-E-B has taken the lead in a consumer preference index as the top e-commerce grocer ahead of second- and third-place finishers Amazon and Amazon Fresh."
The H-E-B sample has to be smaller than Amazon's, but it is not surprising that when H-E-B does e-grocery, it does it right. That's usually the case with everything H-E-B does.
MNB reader Jana O'Connor responded:
I have worked for this great company since 1974. I could not agree with you more. Thanks for your positive words.
Last week, in one of my videos from the Bahamas offering a variety of business lessons, I talked about an amazingly clean bathroom at a beachfront bar, and what it tells us about business priorities.
MNB reader Tom Jackson responded:
I have a simple statement regarding restrooms---You will have clean restrooms when the CEO/President/Owner demands clean restrooms. And, of course you will sustain clean restrooms when a maintenance/cleaning program is put in place, preferably on an hourly basis. Yes. It is essential for food/beverage businesses to have really clean restrooms. You will have clean restrooms –when management decides to have them!
From another MNB reader:
Your FaceTime from a restroom in the Bahamas reminded me of the Jungle Jim’s International Market restroom which, in 2007, received the Cintas “America’s Best Restroom” Award. You may have seen this before, but the restroom was not only clean, but also played off Jungle Jim’s playful, entertaining, and even eccentric branding. To your point in your FaceTime, everything across the retailer, like it or not, supports its branding…including the restroom in the store.
Here is a link to the News story.
From yet another MNB reader
Yes, the cleanliness of bathrooms is important. Back in the 1980’s I worked for Safeway Stores, Inc. and clean bathrooms were a high priority for the store. Why? Because at that time women would pick the store they shopped at partially based on the cleanliness of the bathroom. They wanted to make sure that if they or a child had to go to the bathroom, and we all know children enjoy exploring bathrooms even if they don’t need to go, the mother wanted to make sure that the bathroom would be clean enough to use.
Today, even I pick certain stores based on their clean bathrooms. And if my wife and I are traveling, we pick the gas stations based on bathrooms or we go visit either a Publix Grocery store, if they are in the area, or we go to Target. We know those restrooms will be clean.
And finally, my favorite email on the subject, from MNB reader Henry Stein:
Kevin, well done coverage of the clean restrooms in the Bahamas.
As always, I appreciate urinalysis of these situations.
That line made me laugh out loud … I wish I'd thought of it.
Daily Kos has the story of 54-year-old Kevin Ford, a cook and cashier at a Burger King in the Las Vegas International Airport, who in 27 years of employment has never missed a shift. Never.
According to the story, Ford "took the job once he found out his then girlfriend and now wife was pregnant with their first child.
"His dreams of a higher education was dashed by responsibilities and sacrifice. And he kept the job as his family grew, now with four children. And he was able provide for his family and to send and put all four daughters through college on his, to many, meager wages … He kept the job because that location was and is unionized, and provided the health insurance his family needed."
The story goes on:
"On his anniversary, his 27th, Burger King decided to thank him with gifts that they thought commensurate with such loyalty.
"A goody bag of thanks.
"He decided to open the bag on his TikTok account, in disbelief at the callous injustice.
You see, Kevin was given …. sigh…. a Starbucks reusable tumbler, a bag of Reese’s candy, a couple of disposable pens and two rolls of Lifesavers.
"Oh, and a single movie ticket."
As happens so often in such cases, the video went viral.
Daily Kos goes on:
"Those that saw the video were outraged, shocked and dismayed.
"His daughter Seryna started a gofundme page to help her father, who was always there for her and her siblings, again, at great sacrifice.
"The goal was to raise $200 for a trip…. an economy round trip to New York... for Kevin to see his grandchildren, whom he couldn’t afford to see for four years.
"Remember, that almost fully 50% of American families cannot afford a single $500 emergency."
As of this morning, the GoFundMe page has raised $352,479.
To be fair, this isn't really a Burger King issue - that restaurant is operated by HMSHost.
This seems like a particularly tone-deaf moment. Most of the retailers I know would not be so callous in their treatment of longtime employees.
But it is a moment worth recognizing, if only because it does reflect a broader disregard for the people who work on the front lines.
Steven Johnson, the CEO of HMSHost, has a salary package worth hundreds of thousands of dollars a year … but he need to understand that without people who show up and cook the food and clean the tables and take the money and do all the other things that go into running his restaurants, he's pretty much useless.