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    Published on: August 31, 2022

    Walmart-owned Bonobos has adopted a customer service idea that I really like - if an online customer reaches out with a question or complaint, they frequently are connected to employees working in the company's physical stores, who are better positioned to deal with their issues.  It is all about customer-centric retailing, and getting employees closer to all the action.

    Published on: August 31, 2022

    MarketWatch reports on a new JP Morgan survey saying that Walmart raised its food prices during the past quarter more than  any of its major competitors - 5.5 percent, compared to 4.6 percent at Target, 4.4 percent at Kroger, 2.9 percent at Albertsons, and 0.5 percent at Sprouts.

    KC's View:
      Sounds like this is marketing ammo for anyone who competes with Walmart and can prove that their average food price increases are lower than those imposed by the Bentonville Behemoth.

    Published on: August 31, 2022

    The Conference Board yesterday said that its Consumer Confidence Index "increased in August, following three consecutive monthly declines. The Index now stands at 103.2, up from 95.3 in July. The Present Situation Index - based on consumers' assessment of current business and labor market conditions - improved to 145.4 from 139.7 last month. The Expectations Index - based on consumers' short-term outlook for income, business, and labor market conditions - increased to 75.1 from 65.6. 

    CNN suggests in its analysis that the glass may be half-empty:  "Lower gas prices helped consumer confidence bounce back in August, breaking a three-month stretch of worsening sentiment. However this improvement, while welcome, is tempered by ongoing worries that the US economy may be heading toward a recession."

    Meanwhile, CNBC writes that "there were nearly 1 million more job openings than expected in July, an inflationary sign that the U.S. labor market is still extremely tight, the Bureau of Labor Statistics reported Tuesday.

    "Available positions totaled 11.24 million for the month, well in excess of the 10.3 million FactSet estimate, according to the Job Openings and Labor Turnover Survey. The total was about 200,000 higher than the 11.04 million in June, a number revised up from the initially reported 10.7 million."

    And, Axios reports, "More job searchers are looking for work that pays $20 an hour, surpassing searches for $15 an hour … Inflation and a labor shortage pushed up wages faster than anyone could've imagined a decade ago — when Fight for $15, a union-led push to organize fast-food workers, was founded."

    And, from ABC News:

    "Labor unions reached their highest level of approval in the U.S. since 1965, according to a new Gallup poll.

    "Seventy-one percent of poll respondents said they approve of such organizations, up from 68% last year. Prior to the pandemic, 64% of poll respondents said they approved of unions.

    "Support for unions peaked in the 1950s, when three in four Americans said they approved of unions, Gallup data showed.  The increase in support for labor unions arrives amid a surge of labor activity nationwide. Petitions for union elections increased 57% over the first six months of fiscal year 2022, which ended on March 31, compared with the same six-month period a year prior, the National Labor Relations Board said in April."

    KC's View:
      I find myself wondering if the labor market has changed permanently, and if assumptions and certainties that seemed to exist just a few years ago are now gone forever.

    I'm no economist, but I'm fascinated by the degree to which experts seem a little gobsmacked by circumstances that normally would not be happening in tandem, leading to uncertainty and disagreements about how to deal with the economy.

    Published on: August 31, 2022

    Axios reports that "Christmas trees are already on display at Costco and Sam’s Club — and Walmart today released its annual list of hot toys."  

    The fact is that "the holiday shopping season is getting off to an earlier-than-ever start this year, as consumers stung by high inflation attempt to stretch their budgets … Holiday shoppers are looking to ease the price strain by spreading out purchases over a longer period of time."

    One positive note for consumers:  "Stores continue to mark down excess inventory," which could lead to bargains for shoppers.

    KC's View:
      Maybe this makes sense for retailers and shoppers.

    But it is hot and humid outside.  It just seems Way. Too. Early.

    Published on: August 31, 2022

    In the UK, Starbucks has launched a new series of commercials using the theme, "Every Table Has A Story."

    The goal, trade journal More About Advertising writes, is to position "Starbucks as an inclusive 'third space' where all are welcome to sit around and do their own thing as they drink coffee and make use of the free wi-fi."

    Iris, the ad agency responsible for executing the campaign, notes that "at every table, in every store, real life is playing out. Through a cinematic lens, we’ve told the small but powerful story of one inspirational woman, leaving behind a legacy that demonstrates the emotional punch of creative storytelling.”

    Here's the initial commercial:

    KC's View:
      I like the commercial a lot, though I do find myself wondering whether circumstances are different in the UK than they are in the US, where take-out and online ordering seem to have outpaced the whole third-place vibe.  It just doesn't seem to matter as much here as it used to, and so a similar campaign in the US might seem ill-timed.

    Actually, the question is whether things are different in the UK, or if there is a yearning among Starbucks' management for the good old days which is disconnected from current realities.  The latter is certainly possible - one of CEO Howard Schultz's constant refrains is that the company and its stores have grown out of touch with customer needs.

    Published on: August 31, 2022

    Random and illustrative stories about the global pandemic and how businesses and various business sectors are trying to recover from it, with brief, occasional, italicized and sometimes gratuitous commentary…

    •  From the Wall Street Journal this morning:

    "Life expectancy in the U.S. dropped in 2021 for a second consecutive year as Covid-19 and overdoses drove up mortality rates, preliminary data showed.

    "Americans’ life expectancy last year fell 0.9 year on average to 76.1 years, according to data from the Centers for Disease Control and Prevention released Wednesday. It was a smaller drop than in 2020, when life expectancy decreased 1.8 years, the data showed, but the combined figures for the two years were the largest since the 1920s, the CDC said … The data demonstrated that some groups have been hit particularly hard by the pandemic as well as the opioid crisis, which claimed some 108,000 lives last year. Indigenous Americans had the biggest drop in life expectancy in 2021 at 1.9 years, the data showed, bringing their life expectancy to 65.2 years, down 6.6 years since 2019.

    The decline among Native Americans was driven by higher Covid-19 death rates than in 2020, unintentional injuries including overdoses and chronic liver disease and cirrhosis."

    The Journal writes that "Covid-19 accounted for more than half of the increase in deaths among white people in 2021, the data showed, while unintentional injuries including overdoses accounted for about 12%.  Life expectancy declined less among Black people than white people in 2021, the data showed, reflecting in part the higher burden of deaths among some minority groups in the early phases of the pandemic."

    Published on: August 31, 2022

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Business Insider reports that Walmart "will roll out an alpha version of a video ad format that appears in searches on its website and app … The ads will be sold using a cost-per-click model that charges advertisers each time someone clicks on an ad — a popular way for e-commerce advertisers to buy retail media."

    The story notes that "while Walmart already sells on-site video ads itself and partners with adtech firm The Trade Desk to sell video ads outside of its own properties, the new sponsored video units will let sellers promote items based on consumer searches. The new ad format will also appear on the homepage of Walmart's website."

    The video ad format is designed to "help Walmart catch up to competitors Amazon and Instacart, who both have similar offerings," the story says.

    Interestingly, Forbes has a story looking at the video ad business from Amazon's perspective, saying that the extent of the real estate on Amazon being dedicated to "video content, lifestyle content, and influencer content" suggests that "Amazon is starting to look more like a social media app than ever before."

    There's a good reason:  "Amazon is, after all, on track to become the world largest retailer. But the battle for eyeballs is arguably more important for Amazon. More eyeballs means more first-party data: an understanding of what we have been researching, buying, and pining for. Brands selling on Amazon, as well as non-endemic brands like car manufacturers and insurance companies, can leverage this audience targeting data to get in front of their ideal customer rather than wasting budgets on mass-media campaigns with a lot of wastage.

    "In this way, Amazon’s foray into making a more immersive, social media-like shopping experience is beneficial to brand advertisers."  And, if it is beneficial to brand advertisers, it will help Amazon become ever more dominant in its business units, and do battle with the likes of Walmart and Instacart.

    •  AutoWeek reports that Walmart and Canoo have begun testing the EV vans that the retailer recently signed a contract to acquire:

    "The company has already modified its LDV to Walmart's specifications, each offering 120 cubic feet of cargo volume aimed at food and meal delivery. But the vans are otherwise based on Canoo's initial delivery van design, which rides on a skateboard platform that incorporates the battery, motor, and leaf spring suspension. The LDV is designed for high frequency, last-mile deliveries but still offers a range of up to 250 miles—perhaps in excess of what its vans will cover in each 24-hour cycle.

    "At the moment, Walmart is testing the Canoo vans in the Dallas-Fort Worth area, ahead of the start of series deliveries in 2023."

    Walmart has contracted to buy 4,500 of the Canoo vans.

    Published on: August 31, 2022

    •  From Wine Spectator:

    "On the afternoon of Aug. 14, a violent storm and small tornado hit the French town of Bédarrides, with 120 mph wind gusts and large hailstones inflicting damage in vineyards along the eastern side of Châteauneuf-du-Pape.

    "According to reports from local vignerons, the primary impact was felt in La Crau, the famed vineyard on a plateau in the southeast of the appellation, considered by many to be Châteauneuf’s finest parcel. Well-known wineries, including Vieux Télégraphe, Château La Nerthe, Château de Nalys, Domaine La Boutinière and Guillaume Gonnet, among others, source fruit from this lieu-dit for their top cuvées."

    While the damage was significant, hitting both grapes and leaves, the story suggests that local vintners believe that the vineyards - some of them over a century old - will be able to make a recovery in time for the next vintage.

    The storm was "described as a 'tornade Americaine' by the French newspaper, Le Dauphiné Libéré, for its resemblance to weather phenomenons more commonly seen in the U.S. South and Midwest … This was the latest freak weather occurrence in a season filled with evidence of a changing climate; Europe has experienced a summer marked by extreme drought, heat waves and forest fires. Two days after the wind and hail ripped through, on Aug. 16, record-breaking thunderstorms in Paris triggered destructive flash flooding; two days after that, heavy rain and hurricane-force winds over 136 mph left eight dead in France and Italy."

    Published on: August 31, 2022

    •  Ahold Delhaize-owned, Landover, Maryland-based Giant Food said that Diane Hicks is rejoining the company, as Senior Vice President of Operations.  Hicks most recently has been Vice President of Operations at Ahold Delhaize-owned Stop & Shop, but before that  spent a dozen years at Giant Food in various roles.

    Published on: August 31, 2022

    The other day we had a story about how the California Air Resources Board issued a new ruling that will "put in place a sweeping plan to restrict and ultimately ban the sale of gasoline-powered cars," effective in 2035.  The rule also sets interim targets, requiring that 35 percent of new passenger vehicles sold by 2026 produce zero emissions. That requirement climbs to 68 percent by 2030.

    One MNB reader wrote that "this is so reminiscent of the Soviet Union’s obsession with manufacturing what the government wanted to make . . . with zero regard for what their citizens wanted to buy," prompting my retort:

    I think that's an absurd comparison.

    California is recognizing and dealing with an issue that presents an existential threat to humanity.   It actually is showing leadership.  Sure, it may be ahead of where consumers/citizens are, but that's the definition of leadership.

    The Soviet Union had different priorities in mind, I think.

    One MNB reader chimed in:

    Respectfully, I think you got a bit aggressive in denouncing the reader who laid out their position that California is practicing an economic model similar to the U.S.S.R.  Further, if you remove the Soviet reference, the perspective is still correct.

    Let’s say in 2026, California’s estimated car sales are 100,000 thus they have to sell 35,000 zero emission vehicles.  What happens if new car buyers have purchased 65,000 gasoline powered vehicles by end of June?  Do you remove all gasoline vehicles and offer only electric or do you revise your estimate?  Or do you operate on a strict ratio of 35%/65% and only sell electric each month end when the ratio is out line?  Do you plan to penalize shoppers who travel to neighboring states if they choose to purchase elsewhere?  While the plan is certainly well intentioned, particularly for individuals who accept the existential threat and corresponding solutions.

    But ultimately, it is about building demand.   Not government regulation.

    I think your points are legitimate, and I'm honestly not sure how implementation will work.  I do accept the existential threat, though, and hope that California figures out how to make it work.

    My pique was prompted by the Soviet comparison, and I'll stand by it - I'm guessing that citizens of the Soviet Union would find little familiar about California's culture, economy and general vibe, and I get tired of people picking on the state using specious comparisons.

    Along the same lines, yesterday we linked to a story from Bloomberg about how "drought is shrinking crops from the US Farm Belt to China’s Yangtze River basin, ratcheting up fears of global hunger and weighing on the outlook for inflation" I referred to this as a 'Holy Crap!" story because "Eye Opener" just didn't seem adequate.

    One MNB reader responded:

    I am sure that it is implied that this drought is a result of our current climate issues.  I believe that there may be some truth in that. My point in this is not debate the history of the recorded weather events.  I would like to bring up another Holy Crap moment that is currently taking place in Canada and the Netherlands.  Their governments want farmers to cut down on Nitrogen.  An August 21, 2022 Wall Street Journal article points out that the nitrogen produced by farm animals, and used to fertilize the crops needs to be reduced and quickly.

    Based on the policies set forth by these countries, there will be shortage in a food supply as a result of these policies.  Now we will not only be dealing with a drought, but reduction in food supply as result of these governments policies.

    I too believe we need to do a better job of protecting our planet.  The problem is that Canada, The Netherlands and the US for starters are not weighing the costs or effects of cutting off nitrogen or fossil fuels.  I am not talking about costs in terms of dollars and cents.  I am talking about costs to the earth and society.  For example, batteries for EVs require lithium.  Lithium requires a lot of mining in order to keep up with the demand of batteries.  This mining will destroy wild life habitats potentially worse than what we have seen in the Amazon.  Not fertilizing crops and reducing livestock will lead to food shortages.

    We need to let technological developments create pathways to get us to a cleaner environment rather than the current knee jerking we are seeing here in the US and abroad.  There are developments currently in the works to resolve the nitrogen issues. Implementing those developments make more sense to me than cutting live stock numbers in half, and stop fertilizing, which will lead to food shortages.

    I want a safe place for our family tree to expand.   Drop the agenda and finger pointing on the climate. Lets fix this but do this smart and discuss how to get there without creating further damage to our planet.

    Responding to my piece about Nugget Markets, one MNB reader wrote:

    I have been calling on Nugget stores for years as an Acosta sales person.  You are right, if there was one of these stores in my area I would shop there.  They are clean, friendly, and a true partner when it comes to their business.  Thanks for doing this, was a great piece and spot on.

    On another subject, from an MNB reader:

    The “healthcare is hard to disrupt” view is still valid. Why was Amazon forced to buy One Medical, and fold a failing Amazon Care? p.s., One Medical (1Life) is not profitable, reporting operating and bottom line losses, burning cash and adding debt. That deal will have it’s own challenges.

    Reacting to Michael Sansolo's column yesterday about lessons from the Duolingo language instruction app, which we titled "Más Que Diversión y Juegos," MNB reader Bob Thomas wrote:

    A person who speaks many languages is called MULTILINGUAL.

    A person who speaks two languages is called BILINGUAL.

    A person who speaks just one language is called AMERICAN.

    True.  I fear that I am one of those one-language Americans … I just don't seem to have an ear for languages, as my high school Spanish teachers would confirm.

    Finally, regarding the passing of Erby Foster, one MNB reader wrote:

    I was very sad to hear we lost Erby way too soon.  He was a huge supporter of mine during my early career with Clorox, my involvement with the Network for Executive Women (NEW), and Clorox’s Women’s Resource Group.  Erby had a impact on everyone he met and left our industry a better place for all.

    And, from MNB reader Joy Nicholas:

    Erby was a great man and the real deal in the industry DEI space.  He helped shape NEW and he will be missed.  Thank you for sharing, Kevin.