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    Published on: September 8, 2022

    One of the keynote speakers at next month's National Grocers Association (NGA) Executive Conference and Public Policy Summit will be Bruce Mehlman, a well-known lawyer, public policy analyst and former Assistant Secretary of Commerce for Technology Policy in the President George W. Bush administration.  Mehlman's topic will be "the shifting political landscape," which, when I read it, struck me as the understatement of the year - I'm more a "the political, economic and cultural world is going to hell in a hand basket" kind of guy.  I didn't want to wait until October for Mehlman to talk me off the metaphorical ledge, so I reached out, he agreed to have a conversation, and we scheduled a Zoom call to talk about all this stuff, including the impact on retail businesses.  Which you can watch here:

    If you'd rather download and listen to this conversation as an audio podcast, click below.

    For more information about the NGA Executive Conference and Public Policy Summit, click here.

    Published on: September 8, 2022

    Instacart, a company that started out as a delivery company to which retailers could outsource their e-commerce functionality but now likes to describe itself as "the leading grocery technology company in North America," announced yesterday that it has acquired Rosie, which describes itself as "the premier e-commerce platform for local and independent retailers and wholesalers."

    Terms of the deal were not disclosed.  The acquisition comes as Instacart has been circling a planned initial public offering (IPO) that has not yet been scheduled.

    As a result, the two companies said, "the Rosie team will lead Instacart’s business strategy and technology development for local independent grocers, as Instacart continues to build best-in-class e-commerce and fulfillment solutions for this critical segment of the grocery industry."  This part of the business will keep the Rosie brand name, sources tell MNB, and in fact the entire Rosie team is said to be staying with the company post-acquisition.

    Sources also tell MNB that before an acquisition was considered, Instacart and Rosie had an alliance that was presented to retailers and industry partners, and so the deal simply builds on a relationship that already existed.  The expectation, based on reactions to this point, is that there should be no loss of business post-acquisition, sources say.

    With this acquisition, Instacart said, it is "deepening its commitment to serving local and independent grocers and expanding its Instacart Platform e-commerce offerings."

    Bloomberg notes that "Rosie is Instacart’s second acquisition this month, following its purchase of pricing and promotions platform Eversight Inc."

    Some context from the announcement:

    "Founded in Ithaca, NY in 2013, the Rosie team has spent nearly a decade building relationships and supporting local and independent retailers like Rosauers Supermarkets, Lee’s Marketplace, Niemann Foods, Inc., and Geissler’s Supermarkets across more than 40 states. Rosie offers independent grocers affordable and easy-to-use branded e-commerce websites and mobile app capabilities that power order flow, fulfillment, and customer insights. Rosie’s product features include shoppable weekly ads, store loyalty and rewards programs integrations, third-party fulfillment logistics integrations, payment processing and more – all developed for local and independent grocers. Rosie’s turnkey e-commerce solutions get grocers online quickly and efficiently, helping customers easily find and discover local stores.

    "With the acquisition of Rosie, Instacart is introducing new e-commerce solutions built specifically for local and independent retailers that complement the company’s existing Instacart Platform offerings. Through the Instacart Platform, Instacart is further enabling grocers to chart their own digital transformation through a suite of enterprise-grade technologies. With Instacart Platform, Instacart gives retailers access to the solutions behind Instacart’s consumer marketplace, helping retailers like Schnucks, Tops Friendly Markets, and The Fresh Market create new online and in-store solutions that enhance the customer experience and help their businesses grow … Adding Rosie’s offerings to the Instacart Platform gives more retailers access to tools and technologies that can lead to growth in their businesses and deeper engagement with their customers – all while retaining their unique store experience and brand identity."

    KC's View:

    My expectation would be that there will be at least some tensions among clients and alliances created by this deal, though they can be handled if Rosie's team is able to a) deliver on their value proposition, and b) expand the offerings available to independents without retailers losing any level of independence.

    I've certainly had my issues with Instacart over the years, though, in all fairness, I've had a bigger issue with retailers who essentially were handing over their customer data to Instacart and not preserving their unique access to their most important asset.  Instacart was brilliant in creating a business model that could help retailers compete with Amazon;  I blamed the retailers for not being proprietary or brand-centric enough.

    This seems to be shifting as Instacart makes different options available to its customers, and to be honest, independents and regionals may need its portfolio of products even more than larger chains.  This is a big deal, and I look forward to seeing how it plays out in coming months.

    Published on: September 8, 2022

    Axios reports that new data from reservation app OpenTable suggests that occurrences of dining out have passed pre-pandemic levels.

    The irony, Axios, suggests, is that people seem more willing to eat out than return to the office:  "Average workplace occupancy is just 44% in a 10-city back-to-work barometer from office-security giant Kastle."  As Axios writes, "While the fight rages on over going back to the office, other areas of our lives have returned to something like normal."

    KC's View:

    I'm someone who has long worked from a home office and hasn't actually worked in an office with other people for close to 30 years.  It had nothing to do with a pandemic, but rather because, as Mrs. Content Guy likes to say, I don't play well with others.  (I don't think I'm that bad, but…)

    Because of this, I am sympathetic to people who don't want to return to the office, but also think it isn't really fair for folks to use the pandemic as an excuse if they're willing to go to restaurants, sporting events and concerts.  Let's call it what it is - a personal preference.

    Now, it is hard for some companies to argue that it hurts the business when people aren't in the office, if productivity and profit numbers are up over the past few years.  Which, at a lot of companies, they have been.

    As it happens, CNBC reports that "Amazon CEO Andy Jassy said the company doesn’t plan to order corporate employees to return to the office.

    "'We don’t have a plan to require people to come back,' Jassy said on stage Wednesday at the Code Conference in Los Angeles. 'We don’t right now. But we’re going to proceed adaptively as we learn.'

    "Amazon tech workers were told to work from home in early 2020 as the coronavirus spread rapidly. In October, Jassy said Amazon would leave it up to individual managers to decide how often workers would be required to come into the office, which marked a sharp reversal from its earlier goal of returning to an 'office-centric culture.'

    "Jassy said Wednesday most employees have returned to physical offices and are spending some days working from home. Certain teams tend to be at the office more often, such as hardware or creative units, while others, such as engineers, continue to work largely remotely, he added."

    So, what we really need to have here is a nuanced discussion of company and personal needs and preferences that is fact-based while still taking place in a culture of caring - people who are happy tend to be better employees, though companies can fairly argue that it is harder to nurture a culture when everybody is remote.  I tend to think that some sort of hybrid arrangement probably is the best choice, though for people who want to be mentored, want more opportunities to shine (and yes, even suck up to their bosses), and want to advance their careers, I think returning to the office will be a higher priority.

    Published on: September 8, 2022

    Target Corp. said yesterday that CEO Brian Cornell has re-upped for three more years in the job, which will take him past the company's mandatory retirement age of 65.

    The Wall Street Journal writes that "the decision keeps the 63-year-old at the helm of the company, which has slashed its financial forecasts several times this year after misjudging demand and being stuck with excess inventory. Target shares have fallen nearly 30% this year … The retailer joins other companies, including 3M Co. and Merck Co., that in recent years have relaxed or removed mandatory retirement ages for chief executives. Last year, Boeing Co. said it was raising the retirement age for CEO David Calhoun to 70 from 65 so he could stay in the role.

    KC's View:

    I'm a little conflicted about this philosophically.  I do think it is important to infuse companies with younger and more diverse DNA, and when older guys don't leave, it sort of clogs up the executive supply chain.

    But … speaking as someone who would be out of a job if MNB had a mandatory retirement age of 65, I also think that there are a lot of folks who aren't nearly ready to give up being productive when they hit that age.  (Thank goodness I write the MNB rules.)

    Published on: September 8, 2022

    Misfits Market, which describes itself as an "online grocery platform driven by accessibility, affordability, and sustainability," said yesterday that it is acquiring online grocer Imperfect Foods, which is described as being "at the forefront of eliminating food waste and building a better food system."

    Terms of the deal were not disclosed.

    According to the announcement, "The planned acquisition will unite both brands to deliver a better, more sustainable grocery experience and put the combined business on track to cross $1 billion in sales and reach profitability by early 2024."

    "As a result of the acquisition," the companies said, "Misfits Market will be well positioned to continue building out a supply chain that tackles inefficiency, lowers prices, and continues to fundamentally improve how consumers shop for groceries online. While the brands will continue separate operations in the short term, Misfits Market founder and CEO Abhi Ramesh will serve as CEO of the combined company, with executives from Imperfect Foods joining the Misfits Market leadership team."

    "We have a tremendous opportunity to advance the shared mission of both brands, which is nothing less than a fundamental re-imagining of both the grocery category and the broken U.S. food system,” Ramesh said in a prepared statement.  “The strengths of the Imperfect Foods organization, from its in-house delivery fleet and robust private label program to its sustainability commitments and innovation, add immediate scale and depth to what we’re building at Misfits Market.”

    Imperfect Foods CEO Dan Park noted that "both organizations have made significant progress as individual brands - together we have already rescued nearly 500 million of pounds of food that may otherwise have gone to waste, and driven innovation in a category propped up by antiquated technology and thinking. The combined experience and expertise of this newly merged team will exponentially increase our ability to take on established players in the traditional grocery space.”

    Some context about the two companies:

    Misfits Market "delivers organic produce, high-quality meats and seafood, plant-based proteins, dairy, bakery, wine, and other grocery items to nearly every zip code in 48 states at up to 40 percent off traditional grocery store prices," while Imperfect Foods "works directly with farmers and producers to rescue, redistribute, and develop goods across multiple grocery categories, including its own private label offerings."

    MNB fave Scott Moses of Solomon Partners is serving as exclusive financial advisor to Imperfect Foods.

    Published on: September 8, 2022

    Fortune is out with its list of the best retail workplaces, and Wegmans - as often happens - tops the list of large retailers cited in the annual compendium.

    In order, the other large retailers making the list are Target, Sheetz, Altar'd State (a lifestyle and fashion brand), Publix, and Nugget.  Aldi comes in at #16, and Southeastern Grocers (which operates the Fresco y Más, Harveys, and Winn-Dixie supermarkets) is #20.

    Published on: September 8, 2022

    Interesting coverage by the Financial Times about how Travis Kalanick - the controversial and deposed CEO of Uber - "has quietly built a large food and convenience goods business across Latin America as the Uber co-founder seeks to capitalise on the region’s fast-growing ecommerce market."

    FT writes that "the billionaire has rapidly expanded his US-based CloudKitchens start-up by buying and building local 'dark kitchens' in Latin America over the past three years as part of an attempt to build a worldwide network of food delivery centres, leveraging his experience of building Uber Eats during his tenure as chief executive.

    "Alongside the dark kitchen business, which buys property to use as space to prepare delivery or pick up takeaway food, he has launched Pik N’ Pak. This business stores convenience goods, such as pet foods and medicine, from almost 50 CloudKitchens locations across 11 cities in Brazil, Mexico and Colombia. As with the kitchen operations, Pik N’ Pak goods are sent to customers by local delivery app companies."

    FT reports that "the link between Pik N’ Pak and CloudKitchens, previously undisclosed, comes as part of a deliberate push to expand secretively, with local entities kept distant from the parent company to avoid being linked to Kalanick, according to three former CloudKitchens employees, who spoke on condition of anonymity because of strict non-disclosure agreements … The secretive culture reflects Kalanick’s approach to business following his acrimonious departure from Uber. Employees are forbidden from mentioning they work at the company on LinkedIn, instead listing 'stealth start-up' as their place of work — a term typically reserved for companies yet to launch."

    FT also reports that "Microsoft is the first US-based investor in Uber known to have backed CloudKitchens … Since receiving the cash boost, CloudKitchens has been able to supercharge its growth globally … with more than 4,000 employees across the US, Latin America, the UK and the Middle East."

    KC's View:

    I'm not a Kalanick fan, but I think his investment in the cloud kitchen sector is fascinating and, likely, ideally timed for where the take-out business is going.  He has showed that he has good instincts for business opportunities, even if those instincts are rather less honed when it comes to things like ethics and transparency.

    Here's the question I'm dying to see an answer to:  How many investors who got used and abused by Kalanick at Uber come back for more by investing in his new business?

    Betcha it'll be more than a couple.

    Published on: September 8, 2022

    CNBC reports that "outgoing Starbucks CEO Howard Schultz says that he’ll never return to the top job after the coffee giant announced a new succession plan last week … Laxman Narasimhan, who is currently CEO of Lysol owner Reckitt, will join the coffee company in October and take the reins in April. Schultz will remain on Starbucks’ board after Narasimhan succeeds him and act as an advisor."

    The story notes that "Schultz, 69, returned to Starbucks for his third stint as CEO in April after Kevin Johnson retired. Despite speculation from Wall Street and industry insiders, Schultz held firm to his promise that his current stretch would just be temporary."

    “I’m never coming back again, because we found the right person,” Schultz tells CNBC.

    KC's View:

    Yeah, right.

    I predicted he'd be back for a third term as CEO, and while I'm not ready to suggest that he'll be need a fourth time, I certainly wouldn't bet against it.  A messiah complex is hard to cure.

    If things go well under Narasimhan, then things will be fine.  But if the new CEO, who has no operational retail experience to speak of, is unable to recapture the old magic, or come up with some new transformative tricks, then I think it is entirely possible we'll seem him again.

    There is a line from "Hamlet:"  "The lady doth protest too much, methinks."

    Methinks the same thing about Schultz.

    Published on: September 8, 2022

    •  From Vox:

    "Amazon CEO Andy Jassy appears unwilling to accept the outcome of the historic union election in Staten Island that marked the first win by a union at an Amazon warehouse in the United States.

    "In an onstage interview at the Code Conference in Beverly Hills, California, on Wednesday, Jassy claimed 'very disturbing irregularities' in the vote of workers at the JFK8 warehouse in New York City, and alluded to a prolonged battle with the National Labor Relations Board (NLRB), which oversaw the election. Amazon had indeed contested the union victory, claiming more than 20 issues with the union’s behavior, including harassment of voters and how the NLRB ran and staffed the election. But an NLRB official who oversaw the objection hearing recently recommended that all of Amazon’s objections be thrown out and that the Amazon Labor Union win be certified. Jassy’s comments on Wednesday suggest Amazon will continue to battle the NLRB on the issue.

    "'I think that’s going to take a long time to play out because I think it’s unlikely the NLRB is going to [rule] against themselves,' Jassy said on Wednesday."

    Published on: September 8, 2022

    •  C-store chain Yesway announced that it has acquired Tres Amigos, a nine-store convenience store chain with units serving various Texas markets, where it joins the Allsup's chain also owned by Yesway.

    Terms of the deal were not disclosed.

    Yesway now has more than 400 locations in nine states - Texas, New Mexico, South Dakota, Iowa, Kansas, Missouri, Wyoming, Oklahoma and Nebraska.



    •  The Wall Street Journal reports that, as expected, "Cineworld, the world’s second-largest movie theater chain behind rival AMC Entertainment Holdings Inc., filed a chapter 11 petition in the U.S. Bankruptcy Court in the Southern District of Texas … While movie-theater attendance has recovered somewhat as Covid-19 fears wane, ticket sales still lag behind their prepandemic levels. Aside from a couple of superhero films like 'Black Panther: Wakanda Forever' scheduled for release this fall, theaters are contending with a sparse content slate as some Hollywood studios have limited production, delayed releases or gone straight to streaming amid uncertainty as to when audiences will return in force."