business news in context, analysis with attitude

Published on: October 4, 2022

Today, I go inside the new Amazon Style store in Glendale, California - a three-story facility that combines elements of StitchFix (the algorithms respond to both your entered profile and your clothing choices) and Hointer (a fascinating - but now defunct - Seattle concept of about a decade ago that sold jeans through the use of robotics).  I take you through the trying-on process, and suggests the weaknesses and potential strengths of the concept.

Note:  Because of copyrighted music playing in the background during my video, I'm unable to embed it here on MNB.  But you can go to YouTube and watch it here.  And I hope you will.

Published on: October 4, 2022

The New York Times this morning writes that "by many measures, the labor market is still extraordinarily strong even as fears of a recession loom. The unemployment rate, which stood at 3.7 percent in August, remains near a five-decade low. There are twice as many job openings as unemployed workers available to fill them. Layoffs, despite some high-profile announcements in recent weeks, are close to a record low.

"But there are signs that the red-hot labor market may be coming off its boiling point.

Major employers such as Walmart and Amazon have announced slowdowns in hiring; others, such as FedEx, have frozen hiring altogether.

"Americans in July quit their jobs at the lowest rate in more than a year, a sign that the period of rapid job switching, sometimes called the Great Resignation, may be nearing its end. Wage growth, which soared as companies competed for workers, has also slowed, particularly in industries like dining and travel where the job market was particularly hot last year.

"More broadly, many companies around the country say they are finding it less arduous to attract and retain employees - partly because many are paring their hiring plans, and partly because the pool of available workers has grown as more people come off the economy’s sidelines."

Published on: October 4, 2022

The National Retail Federation (NRF) is out with its assessment of August spending, concluding that while "consumers remain worried about high inflation and Federal Reserve interest rate hikes intended to bring inflation under control," they are not so worried that they've stopped spending.  The rate of spending growth may have slowed a bit, but "consumer spending held up better than expected in August as overall retail sales reported by the Census Bureau grew 0.3% from July and 9.1% year over year. Year-over-year increases in retail sales have been mostly in the upper single digits since spring, not as dramatic as the double-digit numbers seen most of last year into early 2022 but still healthy."

“The economic situation in the United States is unsettling,” says NRF Chief Economist Jack Kleinhenz. “Consumer confidence is down, consumer spending’s rate of growth has slowed, and economists and consumers alike are worried about the possibility of a recession, all reflecting persistently high inflation and rising interest rates. Nonetheless, spending continues to grow, and many economists say a recession – if there is one – will likely be mild … Consumers have become cautious – but they have not stopped spending.  Growth is not as high as last year, but households continue to spend each month as more jobs, wage growth and savings backstop their finances and help them confront higher prices."

NRF goes on with its analysis:

"Higher interest rates have driven up the cost of carrying credit card balances or financing a home or car, and the combination of inflation and interest rate worries has consumer confidence at its lowest levels in years despite an uptick in September. But consumers are becoming more optimistic, expecting inflation to be at only 5.7% a year from now, according to an August survey by the Federal Reserve Bank of New York, down from 6.2% expected a month earlier. Consumers expect inflation to be at 2.8% three years from now rather than their earlier expectation of 3.2%, and 2% in five years."

Published on: October 4, 2022

TechCrunch reports that Amazon is innovating in the "affordable shopping" space, launching a consumer hub called Amazon Access, designed to allow shoppers "to explore the programs, discounts and features" that will help them find more economical options.

According to the story, "The new Amazon Access hub gives customers access to information on options like payment with SNAP EBT and Amazon Layaway, which lets users reserve selected items for 20% of the total cost and pay the rest over time. The hub also lets customers clip coupons and find deals on everyday essentials. It also includes information about paying with Amazon Cash, which lets you shop on the marketplace without a debit or credit card.

"In addition to surfacing information about Amazon’s affordable shopping options, the hub will also display accessibility options. Customers will see an option to change their shopping language, learn about accessibility features and contact accessibility customer support."

Amazon has renamed its discount Prime membership program Prime Access; it "gives eligible customers access to a Prime membership for just $6.99 per month, which is normally priced at $14.99 per month. The membership option is available for EBT and select government assistance recipients. Amazon says the launch of the new name will make more users aware of the affordable option."

Published on: October 4, 2022

Food banks, Axios reports, more and more are relying on "donated services" to reach people in need "who can't or won't make the trek to pick up groceries."

Examples cited in the piece:

"DoorDash last week unveiled a partnership with 18 mayors that will provide funding for delivery and logistical expertise to help get donated food to people in need … Instacart announced a pilot program with the Partnership for a Healthier America that will provide needy families with a restricted stipend to buy nutritious food, along with a free Instacart membership and waived delivery fees," and Amazon, which in 2020 "began a Community Delivery program - donating transportation and logistical support to food banks - in 2020. It's in 20 states + D.C., and is on track to deliver 315,000 boxes of food this year."

Published on: October 4, 2022

The Wall Street Journal reports that Walgreens is using robotics to help compensate for staffing shortages in its retail pharmacies, "setting up a network of automated, centralized drug-filling centers that could fill a city block. Rows of yellow robotic arms bend and rotate as they sort and bottle multicolored pills, sending them down conveyor belts. The company says the setup cuts pharmacist workloads by at least 25% and will save Walgreens more than $1 billion a year."

The goal, the Journal writes, is to "give pharmacists more time to provide medical services such as vaccinations, patient outreach and prescribing of some medications. Those services are a relatively new and growing revenue stream for drugstores, which are increasingly able to bill insurers for some clinical services."

The story points out that "Walgreens in the past two years has opened eight automated drug-filling centers serving 1,800 stores and plans to operate close to two dozen by 2025.  One of the biggest, near Dallas, fills 35,000 prescriptions a day, serving about 500 stores in Texas, Louisiana and Arkansas.  Roughly 20% of prescriptions filled by those locations are done at the centralized locations."

Published on: October 4, 2022

Bloomberg reports that "Florida’s farmers and ranchers are facing 'widespread destruction' from Hurricane Ian that threatens to curb supply from a key US source of fruit and vegetables this winter.  Along with citrus crops the state is famous for, other fruit, vegetable, livestock and dairy operations have been devastated by the storm."  And, "in addition to farm damage still being assessed, bee colonies are under threat, potentially impacting crops like blueberries, almonds and squash beyond the hurricane’s path."

The Florida Farm Bureau says that "while the full extent of Florida’s agriculture losses aren’t yet known, it has become clear that in areas of Florida’s citrus belt, 'there has been significant fruit dropped from the trees … Fall vegetables once rooted are now lost."

Published on: October 4, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  The Information writes that informed sources say that an Instacart IPO is unlikely over the next few weeks, owing to market volatility which has made good timing both critical and difficult.  "If Instacart doesn’t go public in October, the most likely opportunities for an IPO before the end of this year are the weeks before and after Thanksgiving or in early December," sources tell The Information.

The story notes that "companies typically try to plan IPOs to avoid market jitters in the days around events like Federal Reserve meetings or inflation data releases. The U.S. midterm elections in November are another event to navigate around, as an unexpected result could move stocks.  But the market slump has been so persistent this year that even once-promising IPO windows are all but closed. After the U.S. Labor Day is traditionally a hot time to list - but that’s not been the case this year."

•  Standard AI, which has become one of the major non-Amazon players in the checkout-free retail space, announced innovations that it says builds on automated checkout to "offer retailers and convenience stores the ability to understand and transform shopper behavior and in-store operations from a brand new lens."  Dubbed Vision OS^, the new offering "gives retailers the ability to truly understand store operations and how customers shop."

The goal, the company says, is to answer a series of questions:  "Where do people typically go in a store, and how do they interact with the products? … Where do people dwell? What items do they choose between? … Which items are out of stock, and when do they go out of stock? … What items are on the shelves, and where are they located in the store?"

The system, which Standard AI says can be retrofit to existing stores, offers "Mission Control," described as "a unique app-based dashboard that helps in-store teams better manage the operations and the shopper experience. Specifically, it helps them understand things like: which shelves need restocking, when their store is out of planogram compliance, when a shopper picks up an item that might require an ID to purchase, and more."  The new products also provides what the company calls "unprecedented views into shopper behavior and operational performance."

Earlier this year, I did an "MNB/In Conversation" with Michael Suswal, co-founder and Chief Business Officer at Standard AI, which you can watch here.

Published on: October 4, 2022

•  Albertsons announced that it is "relaunching Waterfront Bistro and affirming its commitment to providing customers with high-quality, traceable seafood from environmentally and socially responsible sources. Waterfront Bistro, which can be found at Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Tom Thumb and more, features the Responsible Choice logo indicating that 100 percent of its seafood items meet Albertsons Cos.’ Responsible Seafood Policy.  In an effort to continue working towards industry best practices in traceability, Waterfront Bistro seafood is third-party audited to ensure every fish, shrimp or shellfish has been raised or caught in ways that help safeguard future supplies and keep ecosystems thriving."

•  ArsTechnica reports that "pharmacy giants CVS and Walmart will have to face trials over claims that placing ineffective homeopathic products alongside legitimate over-the-counter medicines on store shelves deceives consumers into thinking that the pseudoscientific products are akin to evidence-based, Food and Drug Administration-approved drugs.

"The claims come from the nonprofit organization Center for Inquiry (CFI), which filed nearly identical lawsuits against CVS and Walmart in 2018 and 2019, respectively, to try to boot homeopathic products from pharmacy aisles for good. CFI claimed that deceptive placement of the water-based products violated the District of Columbia Consumer Protection Procedures Act (CPPA).

"Two lower courts initially dismissed the lawsuits. But, in a unanimous ruling last week, a panel of three judges for the District of Columbia's highest court overturned the dismissals in a consolidated appeal, allowing the trials to move forward."

•  Car & Driver reports that "New York has joined Washington and California in introducing efforts that will phase out the sale of new gas and diesel-engined cars and light trucks in the coming years. New York Governor Kathy Hochul directed the State Department of Environmental Conservation to take steps that will gradually phase out the sale of new internal combustion engine vehicles by the year 2035, with a number of interim targets between now and the target year."

New York's plan, the story says, "is more conservative than that of the state of Washington, which is working toward a phase-out of the sales of internal combustion engine cars and light trucks by 2030 according to legislation that was signed into law by Governor Jay Inslee earlier this year. Washington has a head start on many other US states for a number of reasons, including current EV adoption rates, but will still have to take significant steps to bring about a 2030 ICE vehicle sales ban."

Car & Drive writes that "EV adoption rates in many states, especially between the two coasts, currently lag behind the announced targets, and could create vastly different car sales environments in different neighboring states."

Published on: October 4, 2022

…will return.

Published on: October 4, 2022

In Monday Night Football, the San Francisco 49ers defeated the Los Angeles Rams 24-9.