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    Published on: July 8, 2022

    I recently went to a concert by The Chicks - formerly known as The Dixie Chicks.  Now, I'm aware that they likely are anathema to many in the MNB audience.  But that's okay … and, in fact, there's actually a business lesson there.

    Published on: July 8, 2022

    There is a terrific piece in Inc. that focuses on recent comments made by Meta Platforms chairman/CEO Mark Zuckerberg in an employee Q&A session during which he was addressing the current economic environment and its impact on the company.

    "If I had to bet, I'd say that this might be one of the worst downturns that we've seen in recent history," Zuckerberg said. "Part of my hope by raising expectations and having more aggressive goals, and just kind of turning up the heat a little bit, is that I think some of you might decide that this place isn't for you, and that self-selection is OK with me."

    And, he said, "Realistically, there are probably a bunch of people at the company who shouldn't be here."

    Inc. argues that "at first glance, Zuckerberg's comments may seem like par for the course with a global recession on the horizon. But it actually reveals signs of a major problem, one that could severely damage Meta's outlook for years to come, namely:

    "Prioritizing short-term financials over people is a recipe for disaster."

    According to the piece, "these comments lack emotional intelligence and empathy."

    While many leaders may believe that "flawless execution and ruthless prioritization are necessary evils in times like this," the fact is that "research shows that employees thrive in an environment that promotes psychological safety, where people feel safe to take risks and make mistakes. By 'turning up the heat,' as Zuckerberg put it, the company adds unnecessary pressure and makes a bad situation worse.

    "Further, the idea of 'prioritizing ruthlessly,' combined with stricter management and monitoring of employee performance, relegates people to second place. It prioritizes the bottom line, while forgetting the people responsible for company success. (These comments couldn't have come at a worse time, with Sheryl Sandberg, who actually had a reputation for empathy and emotional intelligence, recently leaving the company.)"

    While some might argue that the only people who have to worry are the low performers, it doesn't always work out that way.  Top performers hear the words, and "even Meta's best employees make mistakes.  They get sick.  They start or grow families.  Their kids get sick.  They lose loved ones.  They get depressed.

    "By sending this type of message, Meta adds pressure to all its people. People who, after having a bad month, or week - or even a bad day - will fear how their manager is looking at them. Or how their next evaluation will go. Or how long they will have their job.

    "This is the opposite of a psychologically safe environment; it's psychologically damaging.

    "Working under pressure like this isn't sustainable. It hurts your people, hurts your culture, and hurts your cause."

    However, "when company leaders see the big picture, when they make employees feel safe, that mistakes are ok, that they've got their backs--those employees will not only perform better over the long term, they will be inspired to remain loyal to the company … Do this right, and you can still cut costs, execute well, and help your business to survive tough times - but you'll do so without alienating those who have helped you get here in the first place.

    "Most importantly, you'll build a sustainable, emotionally intelligent culture that both you and your employees can be proud of."

    KC's View:

    I think this is an important piece in Inc., especially because it comes at a time where it is a pretty good bet that a lot of businesses will be focusing on ruthlessly cutting costs as a way of making it through economic tough times, ignoring the fact that these decisions may be undercutting their essential value propositions.

    Let's repeat:

    "Prioritizing short-term financials over people is a recipe for disaster."

    Published on: July 8, 2022

    In Minnesota, the Star Tribune reports that Kamau Witherspoon, the new CEO of Target-owned delivery business Shipt plans to "expand by diversifying the stores it delivers from including places such as local ethnic grocers. The business unit can build its last-mile delivery service further, including more packages from Target sortation centers."

    "There's tremendous amount of room for additional growth in our space not only in our traditional shop-and-deliver model, which is our [Shipt] Marketplace, but also new product lines," he says.

    To continue to grow, Witherspoon says "the company is adding smaller, local stores and ethnic grocers. It recently added Lunds & Byerlys in the Twin Cities, for instance.  'We have to make sure we have something for everybody available on our platform so that's why we are so hyper-focused on just diversifying our mix of retailers through ethnic grocers, Black-owned businesses, other diverse-owned businesses, as well as small, local and regional groceries,' Witherspoon said.

    The Star Tribune puts the current competitive climate into context:

    "Since the start of the pandemic, Shipt tripled its national network of personal shoppers.

    But more recently, there are signs that grocery delivery demand may be slowing. Instacart, which dominates the grocery delivery platform market, saw sales decline 4% during the first quarter of 2022. Target doesn't break out Shipt's performance in its quarterly results.

    "According to recent data by Coresight Research, 54% of U.S. consumers have bought groceries online in the last 12 months. That's up from 37% in 2019 but down from the around 60% in 2020 at the height of the pandemic."

    Witherspoon says that there are "some larger trends working in Shipt's favor."

    "Many of our customers are working from home permanently or they're working some sort of hybrid working arrangement," he says. "For those customers, they are even more likely to order groceries online."  He also suggests that "younger shoppers are also more likely to pay a premium for convenience."

    To continue to grow, Witherspoon said the company is adding smaller, local stores and ethnic grocers. It recently added Lunds & Byerlys in the Twin Cities, for instance.

    "We have to make sure we have something for everybody available on our platform so that's why we are so hyper-focused on just diversifying our mix of retailers through ethnic grocers, Black-owned businesses, other diverse-owned businesses, as well as small, local and regional groceries," Witherspoon said.

    KC's View:

    I understand all the economic reasons for retailers to do business with a Target-owned delivery company, but I still worry that competing retail brands are giving up something special taking a calculated risk by getting into bed with the enemy.

    Published on: July 8, 2022

    Business Insider reports that "Costco has raised prices on two items in its beloved food court: the chicken bake and the 20-ounce soda … The chicken bake, a breaded dish filled with chicken, cheese, bacon, and a Caesar dressing, now sells for $3.99 — $1 more than in June. The soda price increased from $0.59 to $0.69, an increase of 10 cents or about 17%.

    "Fans of Costco's famous hot dog and soda combo can rest easy for now, though. In May, Costco Senior Vice President Robert Nelson told investors that there were no current plans to increase the $1.50 deal, despite 'online rumors.'

    The story notes that CEO Craig Jelinek has consistently said that the hot dog's $1.50 price tag will not change, and that he was once told by Costco founder Jim Sinegal, If you raise the [price of the] effing hot dog, I will kill you. Figure it out."

    KC's View:

    It is amazing - and a testimony to what Sinegal created all those years ago - how central to Costco's identity those food court prices are.  He was right - the price of the hot dog can't be increased, because that would signal something that Costco does not want to signal.

    Published on: July 8, 2022

    Women's Wear Daily reports that "CVS Pharmacy is getting into the prestige beauty game … launching a new format for merchandising skin care, dubbed the Skin Care Center. The space will feature an array of brands, from mass market giants CeraVe and La Roche-Posay to the channel’s newcomers, like Blume and Volition Beauty, both of which are entering mass for the first time. Wander Beauty, the prestige skin care and makeup brand, will also be participating."

    The move is similar to those being made by other retailers in conjunction with beauty-centric retail brands - Kohl's and Sephora, Target and Ulta, Walmart and Space NK, for example- creating stores within stores that focus on engagement and education.

    According to the story, "CVS teamed with L’Oréal on the space’s services components, which are robust. The Skin Care Center’s beauty consultants, which include licensed aestheticians, are trained in on-site diagnostic tools, such as SkinScope’s LED technology and ModiFace’s Derm Skin analyzer."

    Published on: July 8, 2022

    •  From the New York Times this morning:

    "For the second time, plans by Amazon to substantially expand its presence in the New York area have been abandoned after labor and community groups mobilized in opposition.

    "In 2019, Amazon abruptly canceled plans to build a second headquarters in New York City after facing a barrage of criticism that it did not anticipate. This time, the e-commerce giant was unable to complete a deal for a cargo hub at Newark Liberty International Airport.

    "The project, which hinged on a 20-year lease worth hundreds of millions of dollars, attracted opposition after the Port Authority disclosed it last summer.

    "'Unfortunately, the Port Authority and Amazon have been unable to reach an agreement on final lease terms and mutually concluded that further negotiations will not resolve the outstanding issues,' Huntley Lawrence, the Port Authority’s chief operating officer, said in a statement on Thursday.

    "Advocacy groups and unions involved had said they could not support the lease unless Amazon made a set of concessions that included labor agreements and a zero-emissions benchmark at the facility.

    "'This victory signals that if Amazon wants to continue growing in New Jersey, it’s going to have to do it on our terms,' said Sara Cullinane, director of Make the Road New Jersey, an advocacy group that had questioned the deal.

    "Amazon, which expressed confidence in May that the deal would close, expressed disappointment in a statement, adding that 'we’re proud of our robust presence in New Jersey and look forward to continued investments in the state'."

    •  Peapod Digital Labs (PDL), the digital, e-commerce and commercial engine for the companies of Ahold Delhaize USA, has announced "the launch of an Incubator Program for diverse-owned suppliers, specifically targeting suppliers for its Private Brands portfolio. The Incubator is designed to develop new, exceptional quality, private-labeled products in partnership with certified, diverse-owned suppliers. During the two-and-a-half-month program, the chosen participants will learn from PDL’s Private Brands team about the private brand structure and goals, will grow their knowledge of the brands of Ahold Delhaize USA, and, ultimately, will propose product concepts for consideration."

    According to the announcement, "Participants selected for the Incubator will get a concentrated look at Peapod Digital Labs and the brands of Ahold Delhaize USA. The program will include educational sessions and discussions on best practices with various functional subject matter experts. Participants will also be paired with their own personal private brand mentors, who will help them prepare for their final pitch."

    Published on: July 8, 2022

    •  Patent Pending reports that Walmart has applied for patent on a system that would "pair an autonomous ground vehicle (AGV) with a drone, or an unmanned aerial vehicle (UAV), creating a dynamic air-ground duo to fulfill deliveries … The UAV could 'ride piggy-back' on the AGV, serving as the back-up delivery device when obstacles arise, per the application. The UAV could also recharge via an AGV-connected charger, which would alleviate some of the range limitations drones currently have."

    Published on: July 8, 2022

    •  From the Associated Press:

    "More Americans applied for unemployment benefits last week, and although layoffs remain low, it was the fifth consecutive week that claims topped the 230,000 mark and the most in almost six months.

    "Applications for jobless aid for the week ending July 2 rose to 235,000, up 4,000 from the previous week and the most since mid-January, the Labor Department reported Thursday. First-time applications generally track with the number of layoffs. Until early June, claims hadn’t eclipsed 220,000 since January and have often been below 200,000 this year.

    "The four-week average for claims, which evens out some of the week-to-week volatility, inched up by 750 from the previous week, to 232,500.

    "The total number of Americans collecting jobless benefits for the week ending June 25 rose by 51,000 from the previous week, to 1,375,000. That figure has hovered near 50-year lows for months."

    •  From the Wall Street Journal:

    "The U.S. economy added 372,000 jobs in June, extending a streak of strong gains despite signs of slowing economic growth. The jobless rate remained at 3.6%.

    "The labor market, in which demand for workers far outpaces unemployed people looking for work, has held up stronger than the rest of the economy, which is rapidly cooling. Consumers are starting to pull back on spending partly because of inflation, which is running at a four-decade high. Home construction is slowing as the Federal Reserve attempts to pull down inflation through aggressive interest-rate hikes. Manufacturing production is declining as Americans are reluctant to buy big-ticket items and household goods."

    •  From the Canadian Press:

    "Canada will require that companies add nutrition warnings to the front of pre-packaged food with high levels of saturated fat, sugar or sodium, starting in 2026 … The government says the labels are meant to help Canadians make healthier choices, as those nutrients have been linked to conditions such as cardiovascular disease and Type 2 diabetes.

    "Health Canada says the new labels will complement, rather than replace, the more detailed nutrition information that’s typically on the back of food packaging.

    "In general, they’ll apply on pre-packaged foods that contain more than 15 per cent of the suggested daily value of saturated fat, sugars or sodium."

    Published on: July 8, 2022

    Responding to our reference to a Taste article about the unique intimacy of the grocery shopping experience, one MNB reader wrote:

    As part of our training approach we talk about the vulnerability factor, that our shoppers are showing us the items they are purchasing, and we gain a glimpse into their personal choices, and we need to honor, respect, and support this every step of the way.  And we need to take good care of these items, recognizing the time it has taken our shoppers to gather them, upon payment they own them, and we need to do all we can to protect their goods from the register to the destination.  

    Grocery is a noble profession in all respects.  We are helping to feed the world.  We are also supporting our customers on a highly personal and intimate level.  The more our entry level Team Members understand that the more successful our business will be.  

    Regarding the decision by CVS to pull out of the National Association of Chain Drug Stores (NACDS), one MNB reader wrote:

    This is all about the conflict with the NACDS and their support of the FTC in reviewing the anti-trust nature of PBMs.  Independent pharmacies and grocer owned pharmacies have been taking it in the shorts for years with various contract provisions with their suppliers because of contracts their suppliers have with PBMs.  And remember, PMB don’t sell any tangible products like drugs or pharmacy related supplies.  But they do control reimbursements to pharmacies, and many times pharmacies get hit with bills for hundreds of thousands of dollars, YEARS after the pharmacies have dispensed the drugs to their customers just because of these PBMs.  This is what the FTC is exploring in the nature of anti-trust matters.  Its not a matter of whether trade associations are in support of the status quo and won’t support new business models, but more a question of whether trade associations will support anti-competitive behavior which harms the majority of their members as a result of this new business model.

    Health care costs and reimbursements are one of the biggest shell games going in this country and its one of the main reasons why costs continue to escalate so much faster than general inflation.  The more people know about the details, the quicker they will see how abusive these practices are.

    On another subject, from an MNB reader:

    The  report of a "27-year employee of a Burger King in the Las Vegas International Airport operated by HMSHost, whose years of service were recognized in a pathetic, insulting fashion by his employer" reminded me of a similar pathetic event during my time at the Borden (remember them)  Columbus, Ohio headquarters.

    One year, probably 30 or so years ago, the HR department hired a "Santa Claus" to go floor to floor and hand out to each employee a Holiday Gift/Bonus - which consisted of a box of Cracker Jack and a $5 gift certificate redeemable at the company store.  Of course in today's dollars that might be equivalent to a ten.  Over the years I have enjoyed telling and retelling that story many times. 

    After Walmart said it was going to fold its InHome delivery service into its Walmart+ program, and I continued to express skepticism about strangers coming into my house to stock the fridge, one MNB reader wrote:

    That’s a hard NO for a stranger to come into my home uninvited. I see all kinds of unintended consequences occurring.

    And from another reader:

    On WM's INHome delivery, I've not used this service and won't until I've learned they've trained their employees a bit better.  I know I've told the story here of when I was home with Covid, sick as could be, weak as a kitten and had groceries delivered by WM, half gallon's of milk, OJ and grape juice, 10 pack of mini cokes, and other items all stacked right in front of my storm door, where I had to shove them away with the door.  Hardly what I'd call a good delivery, do you think I want them rummaging around in my fridge, they'd put the milk in the freezer, or in the oven.  Nope, I'll pass for now.

    And finally, from another reader:

    I agree with most assessments that we are now in a recession.  I’d explain the economic principles but as I remember I struggled to get C’s in all my Econ classes.  Not entirely my fault since they mostly started at 8 o’clock in the morning and there is only so much information that can be absorbed thru muffled ears and bloodshot eyes.  I personally think they were trying to keep it a secret but I could be wrong.

    Here’s some definitions that stuck with me:

    Recession – When you neighbor loses their job

    Depression – When you lose your job

    Panic – When you spouse loses their job

    Published on: July 8, 2022

    James Caan, who turned breakout roles as Brian Piccolo in "Brian's Song" and as Sonny Corleone in The Godfather into a 50+ year career, died Wednesday night.  He was 82.

    KC's View:

    I think it is fair to say that Caan - who amassed more than 130 acting credits in his career - was a very good actor who made some legitimately terrific movies:  The Gambler, Rollerball, The Killer Elite, Thief, and, of course, Misery.  It also has to be said that while he played a lot of thugs and gangsters, he wasn't afraid to sing - Funny Lady and For The Boys - and tap dance - in Kiss Me Goodbye.  And he even directed - once - a movie called Hide In Plain Sight, which I personally think is underrated.  While as he got older, he got smaller parts in not-so-great movies, he was always good and sometimes even great when he got the right material.

    One of my favorite late Caan performances is almost impossible to find - he played an aging Phillip Marlowe in Tom Stoppard's adaptation of Robert B. Parker's "Poodle Springs for HBO.  (An example of a movie that was better than the book … a subject I explore below in "OffBeat.") Here's the (somewhat hyperbolic) trailer:

    Published on: July 8, 2022

    It is a rare feat when a television or movie adaptation of a book actually works better than the source material.  Jaws and The Godfather are the most prominent examples.   But I'd also argue that most of the movies based on Tom Clancy books were better than the novels.  (Though it betrays my bias - I hate technobabble, and the movies cut that stuff out.  If you like technobabble, you'll disagree with me.)

    Along these lines, I'm holding my breath for the Netflix version of "The Gray Man" - I love the books, have enjoyed the couple of times I've interviewed author Mark Greaney here on MNB, and hope they don't screw it up to the degree that Mark Wahlberg and Peter Berg butchered Robert B. Parker's iconic detective protagonist in Spenser: Confidential, a title that was as stupid as the screenplay.  The best-in-class award along these lines, in my view, goes to "Bosch" and "Bosch: Legacy," which have done such a fine job adapting and in some cases deepening Michael Connelly's novels.  (Honorable mention to the recent Netflix version of Connelly's "The Lincoln Lawyer.")

    All of which is a long way of getting to my point - I'm really enjoying the Hulu version of the Thomas Perry novel, "The Old Man."  Jeff Bridges stars as Dan Chase, a former CIA agent who has been off the grid for decades, having made some questionable organizational (but completely ethical) decisions while serving in Afghanistan.  The series starts with Chase having to go on the lam because he's found living in a small northeastern town, and the episodes toggle back and forth between past and present, peeling back the plot like an onion.  There are some great supporting turns by John Lithgow, Amy Brenneman and Joel Grey, and Bridges is nothing sort of magnificent in the role - he turns what could be a standard spy-on-the-run part into a deeply conflicted and in pain man who is trying to be honorable in a dishonorable world. (This is not a Liam Neeson shoot-em-up ... it is far more layered.)

    I really liked the novel version, and without going into detail, they've made some significant changes in the TV version.  But the changes largely seem to be for the better - there are some intricacies and plot twists that work really well, and it is sort of fun as someone who has read the book for me to not always know where things are going.

    "The Old Man."  On Hulu.  Check it out.

    I found myself deeply disappointed with the Disney+ series "Obi-Wan Kenobi," in part because I actually liked the first episode or two and thought it was fun to see Ewan McGregor return to the title role.  But by the conclusion of episode six, the finale, I was done with the whole thing - in my view, the writers and producers had done absolutely nothing to move the Star Wars narrative forward, or surprise us with revelations that would deepen our appreciation for that galaxy far, far away.  It ended up being pretty much a waste of time.

    Though, to be fair, not nearly as much as big a waste of time as Doctor Strange in the Multiverse of Madness, which I finally caught up with on Disney+.  I'm not going to try to explain the movie to you, except to offer one basic insight - when it seems like almost every shot in the movie has been constructed and accomplished through computer-generated imagery (CGI), and there's nobody in the film who even remotely seems like he or she is a real human being, that's not a movie I'm likely to enjoy.

    I have a couple of wines to recommend to you this week…

    the 2020 Muga Rosado, a lovely and refreshing rosé from Rioja, Spain, that has a fair amount of fruitiness to it but works well with a summer salad. Or even a hamburger.  (What can I say?  I love rosé.)

    the 2020 Backsberg Chenin Blanc from South Africa, which goes down very smoothly and, I found, was great with seafood, especially my Shrimp-It's-All-Greek-To-Me recipe.  (Probably would be great with a hamburger.  Or maybe a salmon burger.  I'd try it with a good conch burger, but you can't get conch in Connecticut.)

    That's it for this week.

    I hope you have a great weekend, and I'll see you Monday.