Published on: August 10, 2022
Go figure … wine bottles may actually contribute to climate change. (It's bad a bad few weeks for my favorites, like arborio rice, parmesan cheese, and olive oil.) I learned a lot about the problem and its causes from a recent New York Times story, and came to some conclusions about what we need to do. Or, at least, what I'm willing to do. It is, I think, a matter of logistics, but also of will.
Published on: August 10, 2022
The July Brick Meets Click/Mercatus Grocery Shopping Survey is out, concluding that "total U.S. online grocery sales for July jumped 17% year over year to $7.8 billion, driven by inflationary pressures and strong demand for Delivery and Pickup services triggered by ongoing COVID concerns."
According to the survey, "During July, more than 68 million households went online to buy groceries, a 3% gain versus last year but only the Pickup and Delivery segments benefited from that increased demand. Pickup’s monthly active user (MAU) base expanded more than 5% and Delivery’s expanded nearly 4% during the month.
"Ship-to-Home’s MAU base contracted more than 4%," however.
“COVID-19 concerns coupled with inflation have forced a tradeoff between two fundamental desires for shoppers – not getting infected and not paying more than necessary,” said David Bishop, partner at Brick Meets Click. “While online shopping – especially delivery – costs more than in-store shopping, using an online service may help prevent illness which could cost more in the long term due to lost wages and other life complications.”
It so happens that there was piece in the Pittsburgh Post-Gazette yesterday about the degree to which growth in online grocery shopping, which spiked during the pandemic, is largely here to stay. And it cites Giant Eagle as having "an advantage for online ordering. Not only does the company command the highest percentage of the Pittsburgh-area grocery market — 25.6% in 2021, according to supermarket intelligence provider Chain Store Guide — it had the resources several years ago to develop its own in-house ordering system.
"Other retailers, like Kuhn’s Quality Foods and Save A Lot, rely on third-party deliverers like Instacart and Shipt. Those apps can open the retailers up to new customers, and get their store name in front of people who otherwise might not have shopped there, but it’s a tradeoff … Instacart, and similar products like Shipt, control how you appear on their platform.
"While those companies take care of ordering infrastructure for smaller grocers who didn’t want to pay the upfront costs it takes to invest in delivery tech, they also are in charge of the data the retailers get - information that could have been useful to the grocers trying to navigate their business in the newly online era. Giant Eagle can see who’s ordering what, and when — useful stats when trying to develop business. On Shipt, Kuhn’s just sees a number."
The larger point is this: E-grocery is not going away. There may be some ebbs and advances, depending on circumstances, but an entire generation - several of them, actually - has gotten a taste of what it is like to buy non-differentiated products online, and they're not going back. And retailers would be well advised to embrace the possibilities and own the moment to the greatest degree possible. And that means owning the customer, and never allowing shoppers to be just a number.
Published on: August 10, 2022
The New York Times reports that "Walmart has held discussions with major media companies about including streaming entertainment in its membership service, according to three people with knowledge of the conversations, part of an effort to extend its relationship with customers beyond its brick-and-mortar stores.
"In recent weeks, executives from Paramount, Disney and Comcast have spoken with Walmart, the people said, as the retailer ponders which movies and TV shows would add the most value to its membership bundle, called Walmart+ … It is unclear whether any of the streaming companies are inclined to reach a deal with Walmart. Disney operates the Disney+, ESPN+ and Hulu streaming services; Comcast owns the Peacock streaming service; and Paramount runs the Paramount+ and Showtime services."
Walmart has not commented on the report.
Currently, Walmart+ membership costs $12.95 per month and includes free shipping on orders and discounts on fuel. It also includes a free six-month subscription to the Spotify Premium music service.
This really isn't hugely surprising, since Walmart's approach to developing a membership program has been largely modeled on Amazon Prime, which has video streaming as a prominent feature. The whole idea is to create an ecosystem that envelops members, keeping them from going elsewhere.
It also wouldn't be the first time Walmart got into this game. It acquired Vudu in 2010 to offer video, but ended up selling it off. And, it has tried to develop its own proprietary video service, but it never really has gone anywhere.
One of the challenges for Walmart is that sometimes the streaming content at any of these services - yes, even Disney+ - veers away from the family-friendly approach that Walmart generally prefers. If it links up with any of these companies, it won't have control over content, which might create some conflicts.
Don't misunderstand. I think offering Paramount, Disney and Comcast content as part of the Walmart+ portfolio probably is a good idea, and one way to add value top Walmart+ while giving a streaming service access to more viewers. Let's just see if they can make a deal that is satisfactory to all parties.
Published on: August 10, 2022
Amazon announced yesterday that it is expanding its Amazon One palm-reading payment technology to more than 65 Whole Foods store in California.
Previously, the technology only was available in select stores in Austin, Los Angeles, New York City and Seattle, as well as in a few Amazon Go and Amazon Fresh locations. Amazon's new Style fashion store in Southern California also uses Amazon One tech.
Engadget offers the following assessment:
"So long as you link your palm and payment card to the service, you just have to hover your hand over a scanner to complete a purchase. While you still have to stop at a checkout terminal, you don't have to pull out a phone like you do with Amazon's camera-based Just Walk Out system.
"Third-party adoption may be trickier. While Amazon has touted plans to use One at concert venues and sport stadiums, there's been a mounting backlash over worries palm data could be misused or stolen. Amazon has maintained that it holds info in secure, One-exclusive cloud storage, but politicians have still been concerned enough to grill company leadership over its practices. There's a reluctance to trust biometric tech like this, and the Whole Foods expansion isn't guaranteed to assuage people's fears."
This is all about finding different ways to eliminate friction from the shopping experience. There may be some privacy concerns to be addressed, but I think most people will embrace the opportunity to avoid lines and delays.
Published on: August 10, 2022
From the Wall Street Journal this morning:
"The last Domino’s Pizza Inc. franchises in Italy have closed after the American brand failed to break through in the birthplace of pizza.
"EPizza SpA, the Milan-based company that held the master franchise rights to operate the Domino’s brand in Italy, said increasing competition hurt its stores, according to documents filed in April in Italian bankruptcy court. Locally run restaurants and pizzerias began using food-delivery services, eating into the revenue of the Domino’s franchises, according to the documents."
According to the Journal, "The pizza chain had ambitious plans to expand across Italy when its first franchise opened in Milan in 2015. EPizza said in 2020 it planned to open 880 locations by 2030. But Italy never became a major part of Domino’s international business.
"EPizza directly managed 23 stores in Italy as of 2020, while an additional six locations were run through sub-franchising, according to the bankruptcy documents. The last of the stores are now closed, according to the Italian Domino’s website."
I deeply, deeply hope that blaming the pandemic for Domino's abject failure to get any traction in Italy is just a rationalization, and that the real reason for the failure is the fact that Domino's doesn't really serve pizza. Sure, it sort of looks like pizza and has some of the same ingredients as pizza … but it isn't pizza in all its spirt-lifting, stomach-filling, mouth-watering possibilities.
To me, pizza falls into what I would call the "life is too short…" category. Life is too short to drink cheap wine … crappy beer … and eat inferior pizza. We all have our own "life is too short" lists, and pizza is certainly on mine.
Published on: August 10, 2022
Fortune has a story in which it looks to assess the degree to which food inflation is affecting average Americans.
"The annual inflation rate hit 9.1% last month," Fortune writes. "But that doesn’t mean that Americans are seeing their bills or their grocery store receipts go up by 9% across the board. In most cases, the rise in prices has been far greater.
"In fact, food prices have been consistently outpacing the overall Consumer Price Index. Last month, the index tracking grocery prices showed a 12.2% spike over the last year, making it the largest 12-month increase since April 1979. And month-over-month, prices rose by 1%.
"Now 12.2% may not sound like the biggest jump; it usually means an extra few cents here or there for each product. But that can add up fast—especially when almost all products have seen some type of increase. And when you do your grocery shopping you might be shocked to see how much certain, individual food products have increased much more in price.
"To get a sense of what Americans are seeing when they shop, Fortune asked Datasembly to analyze the average promotional prices—in other words, the cost shoppers are likely to pay—of eight everyday grocery products…"
Spoiler alert: "The burden of these price increases aren’t falling on all Americans equally. Not only are rural shoppers potentially seeing bigger spikes, but low-income and younger households are also feeling more of the price pressures."
You can read the entire story here.
Published on: August 10, 2022
• From Axios:
"In what Amazon calls a first, the e-retailer on Tuesday sued a Rhode Island man and his company for allegedly selling fake, 5-star reviews to bolster seller feedback of third-party retailers who peddle products on Amazon.com … The lawsuit, filed in King County Superior Court, alleges that Trey King and his online business, AuctionSentinel.com, has been selling fake 'verified feedback' to retailers, and posting reviews to 'artificially inflate sellers' feedback ratings in the Amazon.com store'."
Axios writes that "the suit is Amazon's first aimed at stopping 'fake review brokers' who attempt to manipulate product reviews by the posting of fake seller feedback as part of a broader effort to crack down on deceitful practices across its retail site, per the company."
Published on: August 10, 2022
• From the Wall Street Journal this morning:
"U.S. inflation was 8.5% in July, the Labor Department said Wednesday, holding close to its highest annual rate in four decades despite easing energy costs … Elevated inflation is the byproduct of rapid growth as the U.S. rebounded from the Covid-19 pandemic, fueled in part by lower interest rates and government stimulus. The Federal Reserve faces the challenge of tightening monetary policy to cool the hot labor market and slow demand enough to curb inflation, but not enough to set off a recession."
• CNBC reports that Sweetgreen, the fast food salad chain, is laying off five percent of its support center workforce "and will downsize to a smaller office building to lower its operating expenses," as sales slowed due to "a number of factors, including 'unprecedented levels of summer travel,' a slow return to the office and another wave of new Covid-19 cases."
The CNBC story notes that in Q2, "Sweetgreen’s net sales rose 45% to $124.9 million. Its same-store sales climbed 16%," but these numbers were inflated by a six percent menu price increase. "For the year, Sweetgreen now expects annual revenue of $480 million to $500 million, down from its prior forecast of $515 million to $535 million. The chain also revised its outlook for same-store sales, predicting growth of 13% to 19%, down from the previous projection of 20% to 26%."
• NielsenIQ and NACS have released their inaugural global convenience retailing industry report that provides industry-leading data, macro trends, and analysis across 23 countries in North America, Europe, and Asia-Pacific regions. Among the highlights:
"Thirteen countries experienced growth in convenience store sales during the first quarter of 2022 versus the first quarter of 2021, while 10 countries experienced sales declines … Nine of the 13 growth countries were from the Asia-Pacific region, while European countries accounted for 8 of the 10 countries with sales declines … U.S. convenience stores, which sell an estimated 80% of the fuel purchased in the country, saw revenues per store per month increase 32% in Q1 2022 versus the same time period in 2021, largely a result of higher gas prices."
Published on: August 10, 2022
Reacting to the naming by the Western Association of Food Chains (WAFC) of Patrick “Pat” Posey, a longtime retail executive in Southern California, to succeed Carole Christianson as the organization's Chief Operating Officer when she retires next month, MNB reader Brad Halverson wrote:
WAFC couldn’t have found a better person than Pat Posey to lead as COO. Pat’s experience, passion for helping others, and his naturally winsome personality is perfect for the industry. They got a good one!
Totally agree.
On another subject, from MNB reader Steven Ritchey:
I checked my bank balance today, and it was less than I anticipated. It turned out that Amazon had charged me my annual charge for "Amazon Prime", pardon my ignorance, but while I knew it would happen at some point, I didn't know it would today.
I went into the self service area and found where I could request a notification for when I'd be charged for Amazon Prime.
My response is, I shouldn't have had to do that. I think it's on them to make me aware of when I'm going to be charged for this service. Now that it's $139.00 annually, plus taxes which brought it up to a smooth $150 plus change, some people may need to know it's coming.
It's not like they don't have my email address, hardly a day goes by that I don't get an email from them regarding something they think I can't live without. BUT, something I do need to know about, they don't automatically notify me, it's up to me to ask for that notification.
It makes no sense to me, how about you and your readers?
Maybe it's my fault for not checking this out, but, I believe I shouldn't have had to. In my mind, it's a failure in their customer service processes.
I was intrigued by this, because I would've sworn that Amazon always has notified me when my Prime membership was renewing, and I couldn't remember ever asking to be notified.
So I checked. In fact, every year since 2011 (the last year for which I've kept emails), I've gotten an email from Amazon in early November telling me that my membership would renew on December 11.
Then I went on Amazon, and saw that my membership would once again renew on December 11, 2022 … but noticed that there was a place to check a box that would result in me being reminded about that renewal. I've never seen that before, but I immediately checked it.
I have to wonder if this is something new. Regardless, I completely agree with you - Amazon should inform Prime members in advance of renewal, and in fact should inform all customers before their credit cards are charged for anything. That seems like pretty basic to me.
Yesterday we took note of a BBC report that "the price of olive oil is set to rise as heatwaves hit production in Spain," and I commented:
This whole climate change thing is hurting my soul - in the past few weeks, we've had stories about how it is impacting the production of parmesan cheese, the rice used to make risotto, and now olive oil. Not that climate change is about me … because of course, it's not … not really, anyway … but at some level we all need to internalize the degree to which climate change is going to impact the ways in which we live our lives and find pleasure. It becomes less abstract that way, and maybe our institutions will become more responsive … and maybe individuals will stop whining about little things, like getting rid of single-use plastic bags. Bringing your own bag may not change the world all on its own, but every little bit helps.
Prompting one MNB reader to write:
I don’t see the correlation between single use bags and climate change. But whatever. Climate change is not a US issue it is a global issue and until all countries buy into change, then we are trying to change the tides by spitting in the ocean. We can stand up all day and speak to how we are leading the cause for climate change, but so far all we have done is create added pressures on our economy while funding others. This is global, not national.
I wasn't being literal. Just making the point that it is better to do what we can and not whine about inconveniences.
As to your other point … the nature of being a global leader, I believe, is that you don't make your leadership contingent on other countries being willing to follow. You do what you can and what you must, and set an example. Otherwise, what's the point of leadership?
In our story about Amazon's proposed acquisition of iRobot and likely fascination with its subscription services, I commented about how this allows Amazon to continue to get inextricably intertwined with our lives. This led one MNB reader to write:
This is what metastatic cancer does!
To another MNB reader, this was an unfortunate metaphor:
As a cancer survivor, I take issue with the comment … How in the world does comparing cancer to an Amazon acquisition make sense? More importantly, it appears the comment was made by a person with a “juvenile sense of humor”.
Your “blog” is better than to publish a sorry attempt by an individual to be funny with “middle school” humor and at a very serious medical condition. My hope is that this person gets educated on the world of cancer as it is certainly not a disease to be used as humor.
Published on: August 10, 2022
• Tennis legend Serena Williams, winner of 23 Grand Slam events and one of the most iconic sports figures of her era, announced that she will step away from the sport after the US Open next month.
"“I have never liked the word retirement,” she wrote in Vogue. “It doesn’t feel like a modern word to me. I’ve been thinking of this as a transition, but I want to be sensitive about how I use that word, which means something very specific and important to a community of people. Maybe the best word to describe what I’m up to is evolution. I’m here to tell you that I’m evolving away from tennis, toward other things that are important to me. A few years ago I quietly started Serena Ventures, a venture capital firm. Soon after that, I started a family. I want to grow that family.”
It was noteworthy - and absolutely accurate - for Williams to point out that if she were a man, she would not have to step away from the sport in order to grow her family.
""If I were a guy, I wouldn't be writing this because I'd be out there playing and winning while my wife was doing the physical labor of expanding our family," Williams wrote. "Maybe I'd be more of a Tom Brady if I had that opportunity. Don't get me wrong: I love being a woman, and I loved every second of being pregnant with Olympia. ... But I'm turning 41 this month, and something's got to give."
• National Football League owners have approved the sale of the Denver Broncos - for a reported $4.65 billion - to an ownership group led by Walmart heir Rob Walton, his daughter Carrie Walton Penner and her husband Greg Penner, the chairman of Walmart.
The ownership group also includes former Secretary of State Condoleezza Rice, seven-time Formula One world champion Lewis Hamilton and Ariel Investments President and co-CEO Mellody Hobson.
The Athletic points out that "NFL commissioner Roger Goodell, who officially introduced the Walton-Penner group to the media shortly after the vote was made official," has made the point in the past that the league was seeking greater diversity in ownership groups: "Three of the six known members of the new ownership group are Black. Three are women."
