business news in context, analysis with attitude

Published on: September 12, 2022

This weekend, I had the privilege to once again emcee the annual City of Hope Harvest Celebration Ball, sponsored by the Pacific Northwest Food Industries Circle, at which I learned some amazing details about cancer treatment … which, go figure, also translated into a business lesson.

Published on: September 12, 2022

by Kevin Coupe

Thanks to my friend Patrick Spear, who passed along this Tweet that he saw online:

The Queen's reign saw:

•  6 Popes

•  14 US Presidents

•  15 Prime Ministers

• 0 Profitable 15-minute grocery delivery companies

LOL.  

Published on: September 12, 2022

The Information has an assessment of "instant-delivery startups, which last year raised billions of investor dollars to finance a rapid expansion across the U.S., Europe and Latin America," but now are "confronting a bleak fundraising environment … they’re continuing to burn through cash despite their efforts to cut costs, raising a question of how long they can keep operating.

"With prospects for hefty venture fundraisings looking grim, some companies have been looking to sell themselves but hitting dead ends for months, multiple executives and investors told The Information. Some startups have also been turning to their existing investors in an attempt to extend their runway … For now, instant-delivery management teams and investors are focused on cutting costs and ditching expensive locations. That means instant-delivery firms are unlikely to buy others in the sector, particularly those that don't fit in with existing services or locations."

The story notes that "bigger firms that might have an interest in expanding into instant delivery are also unlikely to pull the trigger right now. Amazon, for instance, last year had considered investments or acquisitions of several midsize Europe instant-delivery startups such as Flink and Zapp, but talks never progressed beyond exploratory talks, two people familiar with the discussions said. Amazon declined to comment when reached.

"Grocery-delivery company Instacart has been actively making deals - including the purchase of Rosie Applications it announced on Wednesday - but it hasn’t yet inked anything with an instant-delivery startup. Instacart has attempted to differentiate itself by reiterating a commitment to delivering groceries on behalf of retailers, rather than following the instant-delivery model of buying and delivering its own inventory. Any sort of deal in the instant-delivery market would rock the boat with the merchants with which it has partnered.

"'We have absolutely no plans to work with or partner with any online, quick-commerce players,' an Instacart spokesperson said in a statement."

Published on: September 12, 2022

CNBC reports that even "with the S&P Retail Index down nearly 30% this year, most of the industry is boosting investment in capital spending by double digits, including industry leaders Walmart and Amazon.com. Among the top tier, only struggling clothier Gap and home-improvement chain Lowe’s are cutting back significantly. At electronics retailer Best Buy, first-half profits fell by more than half – but investment rose 37 percent."

The rationale is that "investments made by big-spending leaders like Walmart, Amazon and Home Depot are likely to result in taking customers from weaker rivals next year, when consumer discretionary cash flow is forecast to rebound from a year-long 2022 drought and revive shopping after spending on goods actually shrank early this year."

There's a historical precedent cited in the story:  "After the 2007-2009 downturn, 60 companies Gartner classified as “efficient growth companies” that invested through the crisis saw earnings double between 2009 and  2015, while other companies’ profits barely changed, according to a 2019 report on 1,200 U.S. and European firms."

CNBC also notes that Amazon appears to be the biggest spender of them all, even though it is cutting back and shifting some of its spending.

Published on: September 12, 2022

Acosta has released the preliminary findings of an Online Grocery Landscape Report, which it describes as "a new shopper insights study on the attitudes and preferences surrounding online grocery shopping habits," and concluding that "consistent with levels observed in fall 2021, half of U.S. shoppers are at least occasionally purchasing grocery items online."

The study goes on:

"More than half (57%) of online grocery shoppers say they stick with the retailers they shop in-store, thus providing omnichannel-focused retailers with a big advantage in building loyalty with consumers."

"A significant majority of online pickup shoppers (7 in 10) go into the store when picking up an order, mainly to grab a forgotten item or to pick out something personally. This shopping behavior presents an opportunity to re-engage the shopper in-store."

"Consumers are still experimenting and determining their preferred delivery fulfillment options, with only 57% using a single mode. Millennials are utilizing at-home delivery at nearly twice the rate of Baby Boomers."

"Nearly one-third of online grocery shoppers use subscriptions, with pet needs and coffee/tea at the top of the list."

"While 46% of shoppers utilize retailer websites to place orders, there is slow adoption to retailer apps with more than a quarter of respondents declaring that they currently do not use retailer apps."

"Digital coupons are embraced by 80% of online shoppers, with younger shoppers more likely to look for them while they shop."

"The balance between online and brick-and-mortar continues to evolve, with more online grocery shoppers preferring the in-store experience for discount opportunities and new product discovery."

Published on: September 12, 2022

The New York Times reports that "drought has ravaged dozens of crops throughout Europe - corn in Romania, rice in Italy, beans in Belgium, and beets and garlic in France. Among the hardest hit is the olive crop of Spain, which produces one half of the world’s olive oil. Nearly half of Spain’s output comes from Jaén - pronounced hi-EN - a landlocked southern province of 5,200 square miles, about the size of Connecticut, that yields far more olive oil annually than all of Italy, according to the International Olive Council. It is often called the olive oil capital of the world.

"Farmers and political leaders are now searching for answers to a pressing question: What happens to a one-crop economy when that crop is scorched by record-breaking temperatures?"

According to the Times, many of those who remain in the region "are fourth- or fifth-generation farmers who can trace their holdings back more than 100 years. They have an attachment to the business that transcends facts and figures, tiptoes into romance and bursts with civic pride. Oil from here winds up in dozens of different varieties sold around the world, many of which can be purchased online directly from local mills.

"The landscape has inspired some of Spain’s greatest poets (Miguel Hernández, Antonio Machado), singers (Juanito Valderrama) and painters (Rafael Zabaleta). Now the groves are turning up on social media. One Jaén farmer who has 1.7 million followers on TikTok makes gargantuan sandwiches, all generously slathered with olive oil."

Now, social media celebrity is begetting olive oil-centric tourism:

"With a nudge from the local government, a nascent olive oil tourism industry, dubbed oleoturismo, is starting to grow. There are spas with olive oil treatments and specialty shops, like Panaderia Paniaceite, that sell dozens of varieties of olive oil. One almazara, as traditional mills are known, offers olive oil tastings like wine tastings at a vineyard. Visitors can also spend a day working and living as an olive farmer, meals included, for 27 euros."

However, the Times notes that "tourism will never offset losses in the fields nor thwart a variety of tectonic shifts that go far beyond the weather. A harvest that once took tens of thousands of people, including a massive influx of seasonal migrant workers, now requires a fraction of manpower because so much of the work is now done by machines. Most notably, there is the vibradora, a hand-held, gasoline-powered device — it looks like a chain saw with a very long, thin snout — that shakes olives out of trees by clamping on to branches and rattling them."  And, since the average age of olive farmers in Jaén is 60, with many of their children having moved to cities where they are less tethered to an industry trouble, it may not be that long before there's nobody left.

Your Views:

Yet another example of how the realities of climate change threaten things that many people have grown to count on, to love.  I know I keep coming to these kinds of stories, but I think it is important that we not all labor in some sort of alternate reality where these kinds of things are not happening.

Another example…

The Wall Street Journal this weekend reported that "high temperatures in the Western U.S. are hitting the produce industry, damaging crops, shrinking shipments and leaving fewer leafy greens and fruits on supermarket shelves.

"A California grower said some of his lettuce leaves are turning brown and melting in the fields because of crop diseases intensified by the high temperatures. In Pennsylvania, a retailer said its stores went a week without having strawberries to sell. A New York distributor has substituted honeydew melons for watermelons, which have become scarce.

"Supermarkets say they are giving less shelf space to products with weather-induced discolorations, bruises or burns. Stores are cutting prices on poor-quality items to avoid getting stuck with them, and increasingly receiving products from Canada, Florida, New Jersey and Ohio instead of California, long the go-to source for U.S. grocers."

One example of the impact:  "California vegetable growers said the current heat wave could be fueling diseases that kill or damage lettuce, leaving less to sell to restaurants or grocery stores. High temperatures can promote diseases such as pythium wilt and impatiens necrotic spot virus, or INSV, according to produce growers, researchers and trade groups. Pythium wilt is a soil-borne disease, while INSV is transmitted to lettuce by small insects known as western flower thrips."

Published on: September 12, 2022

Kroger on Friday said that the inflationary pressures prompting more people to shop in its stores and then cook and eat at home has been good for its bottom line - Q2 profit was $731 million, up from $467 million during the same period a year ago.

Same-store sales were up 5.8 percent;  e-commerce sales were up eight percent.

Total company sales were $34.6 billion in the second quarter, compared to $31.7 billion for the same period last year.

CFO Gary Millerchip said in a prepared statement that "our second quarter results provide another proof point that Kroger has the right go-to-market strategy. Our consistent execution of this strategy is building momentum in our business which, combined with sustained food at home trends, gives us the confidence to raise our full-year guidance … Our business model has proven to be resilient in a variety of operating and economic environments and we remain confident in our ability to deliver attractive and sustainable total shareholder returns of 8-11% over time."

Published on: September 12, 2022

•  CNBC reports that "Amazon has acquired Cloostermans, a Belgian company that makes technology used in warehouses, the company announced Friday. Terms of the deal weren’t disclosed.

"Amazon began working with Cloostermans in 2019, using its technology to help move and stack heavy palettes and goods, as well as package products together for delivery, the retail giant said.

"Cloostermans will become part of Amazon Robotics, Amazon’s division focused on automating aspects of its warehouse operations. The unit was formed after Amazon acquired Kiva Systems, a manufacturer of warehouse robots, for $775 million a decade ago."

•  From the Los Angeles Times:

"A coalition of workers at an Amazon warehouse in Moreno Valley announced Friday a push to join the Amazon Labor Union, which mounted the first successful unionization effort at any Amazon warehouse in the United States … The union organizing effort is significant because Moreno Valley and the surrounding region is crucial to Amazon’s business. The Inland Empire, spanning Riverside and San Bernardino counties, is the nation’s biggest warehouse center. Amazon is the region’s largest employer, with an estimated 40,000 logistics workers.

"Amazon spokesperson Paul Flaningan said via email that the company prefers to work directly with employees rather than negotiate with a union."

Published on: September 12, 2022

On Friday, our Eye-Opener cited an NBC News reports on a new Gallup survey saying that at least half of all US workers are what is known as "quiet quitters" - doing "the bare minimum of what's required from them at their jobs," consciously rejecting "the hustle culture that has dominated conversations around work and career for decades."

The survey concluded that "there are still more workers who are engaged at work (32%) compared with people who are actively disengaged, a third category that Gallup refers to as 'loud quitters,' who make up 18% of survey respondents. They have checked out of their jobs and are not hiding it."

I commented:

This study seems right in line with issues we've been discussing this week on MNB - the fact that business leaders have a responsibility to provide clarity about a company's purpose and the employee's meaning within that framework.  Many workers are disconnected because organizations don't make an effort to connect them to the broader ecosystem, which isn't smart.  Or forward looking.  Or fiscally responsible.

"Quiet quitting" has been getting a lot of attention in the media, but it ought to be an Eye-Opener - not about workers, but about the organizations within which many of them toil.

One MNB reader wrote:

I say good for those that may change the corporate culture.

Early in my career I, and many others, went above and beyond only to find we were resetting the “expectation”. So, what was extra effort now became the standard.

The company was good to me and I am not saying I would do anything differently but the real winner was the company.

From another reader:

I've worked at a northeast supermarket chain for forty years.  The problem here isn't what may be defined as "quiet quitters".  It's management's attitude towards the work force that has changed.  There seems to be no expectation that a new hire work with a sense of urgency.  As a matter of fact, I dare say that management expects its "old timers" to do more to pick up the slack rather than address these new hires.  The pervasive attitude is that it's just the way things are nowadays and at least they show up.  Until that managerial attitude changes, nothing will change and animosity from the more senior employees will keep building.  Many of us (senior employees) joke about what will become of the company when we leave or retire and none of us foresee a positive outcome unless this attitude changes.

And from another reader:

There is nothing new here. It’s called “phoning it in.” I’ve done it, my father did it and I imagine my grand and great grandfather, most likely, did it as well.

The only difference is we kept it to ourselves.

For whatever reason, people can’t keep their mouths or social feed shut in todays “bare it all” world.

And, finally, from another:

Looks like another big step down the slippery slope towards socialism.

Let me take this last one first…

I had to go check the definition of socialism to see if there was something I'd missed back in political science class, but didn't see anything that related to "quiet quitters."  I can only say that for some folks, whenever and wherever people behave in a way that they do not find acceptable, it must be socialism that's the problem.

Now, let me address the other comments for a moment.

I don't honestly thinking that there is anything wrong with companies having high expectations of their workers, and that when they meet those expectations, it raises the bar for everyone.  it is a lot worse in an organization when the bar is set so low that nobody innovates and excels.

I'm not sure that this what "quiet quitting" is addressing.

Let me repeat:

"Business leaders have a responsibility to provide clarity about a company's purpose and the employee's meaning within that framework.  Many workers are disconnected because organizations don't make an effort to connect them to the broader ecosystem, which isn't smart.  Or forward looking.  Or fiscally responsible."

Expectations without context, without feedback, without reward … these are things that create problems in organizations.  That's what people are responding to.

Is this "phoning it in" in the traditional sense?  Maybe, except that I think that the "quiet quitting" trend is something larger than that, something more reflective about a disconnect between leadership/management and employees.

And you can get angry about people talking about it, or posting comments about it on social media, but that strikes me as counter-productive.  That's how several generations express themselves.  Seems to me that it would a better idea to actually address the problems.

We had a story last week about how Target Corp. said 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.

I commented:

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.)

One MNB reader responded:

When you say "clog up the executive chain", that assumes the leader needs to go.

Ageism is the only 'ism' that is actively practiced that never gets acknowledged but rarely ever addressed. I would argue that age restrictions should be eliminated and let performance dictate tenure. All organizations owe it to provide career opportunities knowing if they unable to do so, good leaders will find a path elsewhere. But if you have a good leader in place, this can happen. It does all the time.

Well, I did say I was "conflicted"…

And this note from MNB reader Monte Stowell:

I had to smile after reading the changing demographic of who is shopping at the Dollar or Dollar and twenty five cent stores. Being retired from the food industry, as are many of my friends who are doing quite well financially in their retirement years, it is interesting to hear many of them who say that they shop in the Dollar stores here in the NW. One category really stands out, Greeting cards and party favors. Hallmark cards sell for $1.00, and you can go elsewhere to buy Hallmark cards at major food chain stores, and are paying $4.00 and up. That is how you make 300-400% on your money. I finally got my bride to buy greeting cards at the Dollar store. 

What the hell is a "greeting card?"

Actually, I'm just kidding.

But young people today have no idea what a greeting card is, or if they do, they'd probably relegate the concept to the same dusty warehouse where they store rotary dial telephones, buggy whips, and first class stamps - all things that seem irrelevant to their lives.

I'm glad your dollar stores are doing a big business in greeting cards, but I'm guessing that this is a category with an expiration date.  (An observation that no doubt with earn me the enmity … and some resentful emails … from some MNB readers.)

Published on: September 12, 2022

•  The Los Angeles Dodgers became the first major league team team to clinch a playoff spot, defeating the San Diego Padres 11-2.  MLB.com writes that "with a 96-43 record, they appear to be cruising toward home-field advantage in any series they play."

•  In the US Open Tennis Championships, Iga Swiatek won the women's singles final by defeating Ons Jabeur 6-2, 7-6 (5).

In the men's singles final, Carlos Alcaraz defeated Casper Ruud 6-4, 2-6, 7-6, 6-2, winning his first career Grand Slam title.

•  In Week One of the National Football league season…

Philadelphia Eagles 38, Detroit Lions 35

San Francisco 49ers 10, Chicago Bears 19

Pittsburgh Steelers 23, Cincinnati Bengals 20

New England Patriots 7, Miami Dolphins 20

Cleveland Browns 26, Carolina Panthers 24

Indianapolis Colts 20, Houston Texans 20

New Orleans Saints 27, Atlanta Falcons 26

Baltimore Ravens 24, New York Jets 9

Jacksonville Jaguars 22, Washington Commanders 28

Green Bay Packers 7, Minnesota Vikings 23

New York Giants 21, Tennessee Titans 20

Las Vegas Raiders 19, Los Angeles Chargers 24

Kansas City Chiefs 44, Arizona Cardinals 21

Tampa Bay Buccaneers 19, Dallas Cowboys 3

•  Finally, in what is sort of a sports story, Food & Wine reports that the San Francisco Giants, while having a less-than-stellar year on the field, plan to do better when it comes to fields in which grapes are grown - the team has hired its own Master Sommelier.

According to the story, "Billed as the 'first-ever Master Sommelier for a professional sports organization,' Evan Goldstein was announced this week as the latest addition to the Giants, with the club saying the partnership has the goal of 'enhancing the gameday experience and further solidifying [the Giants'] connection to the wine industry'."

The story goes on:

"The Giants suggest that breaking ground for Major League Baseball in this department is nothing new: In 1977, the old Candlestick Park became the first MLB ballpark to offer in-stadium wine service. And currently, Oracle Park has an almost overwhelming wine selection that the team describes as 'a dedicated wine bar on each level, California Wine Carts along the Promenade and View Levels and seven unique locations that offer wine on tap.'  With Goldstein's help, the Giants hope to elevate things even further … The Giants presented Goldstein's new duties in six bullet points — including handling wine tastings, facilitating wine pairings, assisting the ballpark with selecting wines, curating other wine-related experiences for the Giants community, working with current and former Giants players either involved in or interested in becoming a part of the wine industry, and exploring wine-related opportunities for the club in general."