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    Published on: August 4, 2022

    I found myself yesterday at the Port of Oakland, in Northern California, as part of the Retail Tomorrow Immersion event in Northern California, sponsored by the California Grocers Association (CGA) board of directors.  It was fascinating learning experience, and afterwards I moderated a panel about supply chain … and I offer some thoughts pulling it all together.

    Published on: August 4, 2022

    Walmart, faced with a toughening economy and falling profits, plans to eliminate hundreds of corporate jobs, the Wall Street Journal reports this morning.

    According to the story, "The retailer began notifying employees in its Bentonville, Ark., headquarters and other corporate offices of the restructuring, which affects various departments including merchandising, global technology and real-estate teams, the people said. Around 200 jobs in total are being cut, said one of these people."

    Walmart tells the Journal that it isn't all cuts.  Part of the restructuring means that the company is "also investing in other areas and creating some new roles," a spokesperson said.

    Some analysis from the Journal:

    "Walmart was one of several retailers that was caught off guard this spring as shoppers shifted their spending away from products that have been in high demand throughout much of the pandemic. In addition, some products arrived late due to supply-chain snarls, causing oversupply as shopper interest waned. Target Corp. in June issued a profit warning after it reported quarterly results that, like Walmart, showed a surge in inventory levels. Last week, Best Buy Co. cut its sales and profit goals, saying consumers had pulled back on electronics.

    "Walmart is the largest private employer in the U.S. and while much of its workers are hourly staff, it has thousands of people in corporate roles. Walmart employed 2.3 million worldwide, including 1.7 million in the U.S., as of Jan. 31."

    The Washington Post writes that in a statement, "spokesman Jimmy Carter said the company is 'updating our structure and evolving select roles to provide clarity and better position the company for a strong future.'  It will invest more in e-commerce, technology, health and wellness, supply chain and advertising sales, the statement said, while also creating new roles in services for customers and suppliers."

    KC's View:

    I'm sure some of this has to efficiency and making decisions about where to invest and where to back off, but it also seems like it is a pretty good bet that Walmart also is concerned about investor perceptions.  When profit growth slows, investors and analysts want to know that retailers are tightening their belts.

    That said, the argument could be made that as one of the world's biggest companies, Walmart is better served by a strategy of expanding its investments and commitment to new things, and that cutting people isn't necessarily the best way to do this.  But that's a hard argument to make to people who only have short-term returns and dividends on their minds.

    Published on: August 4, 2022

    CNBC reports that "CVS said Wednesday that it plans to acquire or take a stake in a primary-care company by the end of the year, as competition heats up with Amazon and Walgreens.

    "CEO Karen Lynch said on the company’s second-quarter earnings call that the company wants to team up with a provider that has a strong management team and tech background and the ability to grow quickly."

    The story notes that while CVS operates Minute Clinics where patients can get vaccinations and low-level medical care, it does not have offices where people can get checkups from either a doctor or nurse practitioner.

    CNBC says that "other health-care players have already made moves in the space. Rival Walgreens Boots Alliance is opening hundreds of doctor offices in partnership with VillageMD and became the majority owner of the company. Walmart has a small, but growing number of clinics where people can visit a doctor, dentist or therapist for a low price.

    "Amazon ratcheted up pressure by announcing last month that it would acquire primary-care provider One Medical for about $3.9 billion. The boutique health-care company has 188 medical offices across 25 markets, according to its latest quarterly results."

    The story quotes CEO Lynch as saying that CVS can build “from the strong foundation that we already have."

    KC's View:

    I understand the impulse;  CVS, with its various initiatives, has long signaled its desire to get into primary care and have a broader presence in the health care continuum.  The Amazon purchase of One Medical probably accelerated things a bit.

    That said, I continue to believe that CVS needs to do a lot better job in the businesses where it already is operating before people start trusting it for a greater level of medical care.

    I went to a local CVS in Connecticut the other day to pick up a prescription.  There were three checkouts at the pharmacy counter, but only one person was working there.  The wait was more than 15 minutes.  And, while I was waiting, this is what I was looking at:

    Doesn't exactly inspire confidence.  This is, to be blunt, a mess … and if they can't get the small things right, I'm not sure anyone should trust them with the big stuff.

    Published on: August 4, 2022

    The United Food and Commercial Workers (UFCW) is out with a new study, conducted by the University of Nebraska Medical Center (UNMC), looking at the continuing impact of Covid-19 on the "essential" workers that make up its membership.

    Some conclusions:

    •  UFCW members who reported having COVID infections before May 2021 were twice as likely to be reinfected in the past year.

    •  Of those UFCW members who contracted COVID, 59% said that they believed it was likely they contracted the virus in their workplace.

    •. Six percent of respondents contracted COVID needed to be hospitalized, which is a significantly higher rate than the nationwide 2% rate of hospitalization.

    •  Four percent of workers reported being unable to return to work after contracting COVID.

    •  In May of 2022, half of respondents report that their lives were still deeply impacted by COVID.

    “The unique partnership with UFCW has recorded the full scope of the markedly increased risk of COVID infections among union essential workers,” said Ali S. Khan MD, Dean College of Public Health, UNMC. “Policies to protect these essential workers are critical to weathering the current surge of COVID cases nationwide and being ready for the next pandemic.”

    Published on: August 4, 2022

    The New Yorker has a long piece about the unionization movement at Starbucks, noting that "baristas nationwide are remarkably organized."  Here's an excerpt:

    "The Starbucks 'clean play' is corporate jargon for what’s essentially a very deep clean. When business slows down at a café, the manager assigns baristas to scrub the pastry case or rid the toaster oven of oily crumbs or scour the floor. A clean play makes a store just right - which is why workers are using the term in a new, subversive way. A clean play, to members of Starbucks Workers United, the group trying to unionize one of the country’s largest employers and most recognizable brands, is an outreach maneuver to non-union stores. Workers map out their region and target cities or neighborhoods that have yet to unionize. Instead of relying on outside organizers, as is common in the labor movement, Starbucks employees themselves recruit new members. The idea is to connect, in person, with an interested worker and guide them through the steps of organizing. One clean play after another could, in theory, unionize all the Starbucks stores along a stretch of freeway, or even across the country."

    While Starbucks and its once-again CEO, Howard Schultz, are playing hardball with the labor organizers, The New Yorker suggests that unionizing workers are "highly disciplined. They used private group chats to mull strategy and teach one another about labor law, not only at their own stores but with others in the region. With the élan of wedding planners, they scheduled election-viewing parties (votes are counted over Zoom, by the National Labor Relations Board, or N.L.R.B.) and staged choreographed strikes. Their work as baristas made them adept at juggling tasks, making conversation, and responding to emotional cues - all essential for organizing."

    In other words, Starbucks trained the guerrilla fighters who have now turned against it.

    You can read the entire story here.

    KC's View:

    Seems to me that the pendulum has moved, at least for the moment, to a place where even retailers that are progressive in their treatment of employees are being targeted.  This is likely to create some challenging moments going forward, as retailers try to stay true to their values while dealing fairly but firmly with forces that they see as a threat to their viability.

    Published on: August 4, 2022

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Schwan’s Home Delivery, which has had pretty much the same operating model for some seven decades, has announced that it is rebranding the business as Yelloh!, and is working with Amazon Web Services to upgrade the technology behind the offering.

    The company says that it now will be using texts and emails to notify existing customers when a Yelloh! truck is in their neighborhood, giving them the option to place an order or request that the truck visit their home or office.

    First of all, I think that "Yelloh!" is a dumb name.  It doesn't say anything about the products or the service.  I also am not sure I have a lot of confidence in Schwan's ability to deliver on the premise - they've been contemplating this sort of move for years, and have been really slow to execute and implement.

    Published on: August 4, 2022

    •  From CNBC:

    "So far this year, retailers in the U.S. have announced 4,432 store openings, compared with 1,954 closings, according to data from Coresight Research, resulting in a net of 2,478 openings.

    "Before the pandemic, the industry was seeing net closures of thousands of stores every year as consumers increasingly moved their spending online. In 2019, Coresight tracked 9,832 closures, compared with 4,689 openings. Last year, the retail industry eked out a net addition of 68 stores."

    The story points out that "the biggest shopping mall owners in the United States say retailers are still forging ahead with plans to open new stores in spite of growing recession fears and decades-high inflation that’s squeezing shoppers’ budgets.

    "Simon Property Group, the country’s largest mall owner, said the pipeline of businesses slated to open up at its properties remains strong. The company reported an occupancy rate at its U.S. malls and outlet centers of 93.9% as of June 30, up from 91.8% a year earlier."

    Published on: August 4, 2022

    •  Ahold Delhaize announced that Jan Ernst de Groot has been appointed as Chief Sustainability Officer (CSO), saying that "in this newly created role, he will be accountable for the success of Ahold Delhaize’s integral vision, strategy and goals relative to all aspects of environmental sustainability, healthy eating, social impact, ethics, human rights and governance."

    The announcement says that "de Groot is well known in the Dutch and international sustainability community, with a track record of leading transformative sustainability programs at companies and supervisory roles at NGOs and civil society organizations. He will retain his other, separate accountabilities as Ahold Delhaize’s Chief Legal Officer, an Executive Committee role he has held since 2016."