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    Published on: October 21, 2022

    Today, I have a review (spoiler alert … it is an unmitigated rave) of Scott Galloway's new book, "Adrift:  America in 100 Charts."  The difference between being adrift and lost, Galloway writes, is that when you're lost, you at least know where you are going;  if you're adrift, you don't even know that, and he applies the metaphor to economics, culture, government and politics.  You may like his prescriptions, but the charts simply and indelibly make it impossible to ignore his diagnosis.

    Scott Galloway's "Adrift: America in 100 Charts" is available on Amazon, at the iconic Portland independent bookstore Powell's, on, Barnes & Noble, and wherever books are sold.

    Published on: October 21, 2022

    From the Wall Street Journal this morning:

    "Kroger Co. and Albertsons Cos. said their $20 billion deal to create a new supermarket giant will help them compete with larger rivals in an evolving grocery industry dominated by Walmart Inc. and targeted by Inc.

    "The antitrust authorities who review the planned merger, however, may be more focused on the supermarket down the street, according to lawyers and industry officials.

    "Kroger’s plan to acquire rival Albertsons, announced last week, would combine the biggest and second-biggest supermarket companies in the country by sales, which operate a combined total of about 5,000 stores stretching from California to Washington, D.C.

    "The companies’ combined market share of 13% of U.S. grocery sales would rank below Walmart’s 22%, and their combined annual sales of more than $200 billion would remain below the nearly $500 billion generated by Amazon, which has been pushing into the U.S. grocery market via its 2017 deal for Whole Foods Market and other services."

    KC's View:

    Wait.  Antitrust regulators are going to focus primarily on competitive impact of a Kroger-Albertsons deal?

    Isn't that the whole point?

    I agree with the idea that the Federal Trade Commission (FTC) needs to closely examine the impact of the deal on smaller competitors, but I don't think it is fair to suggest that a Kroger-Albertsons combo will be so much smaller than Amazon.

    Sure, Amazon may have almost $500 billion in annual sales, but only a fraction of that is in grocery, and most food retailers will tell you that Amazon has not yet proven that it knows how to be an effective omnichannel food retailer.  Of course, the smartest food retailers also will say that Amazon is just one big hire - of an accomplished and visionary food retail executive - away from figuring it out.

    But you have to compare apples with apples, not with pork chops.

    Published on: October 21, 2022

    The Information reports that technology-delivery company Instacart is likely to delay its long-planned initial public offering (IPO) until next year.

    CEO Fidji Simo informed employees of the shift in going-public plans in an email, noting that the markets are "extremely tumultuous ."

    According to the story, "Simo argued that the postponed IPO was a result of market conditions rather than the company’s financial performance.

    "Revenue and gross profit in the third quarter of the year had increased over 40% from the same period the previous year, and net income and adjusted profit before interest, taxes, depreciation and amortization had more than doubled since the second quarter of the year, she said."

    However, it was just last week that Instacart lowered its internal valuation for the third time this year, to $13 billion.

    The New York Times adds some context:

    "Instacart filed papers this year for a so-called confidential filing, which meant it did not yet have to disclose certain data about its business. The filing did not require Instacart to follow through with a public offering, but it was considered a big step toward one. The company had planned to make its financial information public this week, starting the official process, said two of the people with knowledge of the matter, who declined to be identified because the discussions are confidential. But amid market jitters, the plans were halted, they said.

    "Instacart is not withdrawing its filing and is awaiting more favorable market conditions to go public, one person said. Yet the window for going public this year is quickly shutting. Bankers prefer not to take companies public over the holidays, and the company is running out of time."

    KC's View:

    It is my sense at the moment that Instacart's leadership would rather not talk about the IPO, but would rather focus on the various moves and initiatives that it has been bringing forward, designed to buttress its preferred positioning as the entity that can help retailers - big and small - compete with Amazon.  Not only don't I blame them, but I think it is the smart move - if they'd talk to me, that's all I'd want to ask them about.  The IPO is important in the life of the company, but, at least to me, significantly less important than its operations and intentions.

    Published on: October 21, 2022

    Engadget reports that Amazon "has struck a deal with the NFL for Prime Video to livestream a yearly match on Black Friday, the day after American Thanksgiving. The first game airs November 24th, 2023 at about 3PM Eastern, with the teams to be announced once the league shares its schedule for that season.

    "Deadline notes the Black Friday deal is separate from Thursday Night Football. While it's not certain how much Amazon paid, the existing weekly arrangement has Amazon spending roughly $1 billion per year through 2033.

    "Amazon and the NFL aren't shy about the reasoning. On top of creating a yearly tradition, this will give you a reason to visit Amazon (and subscribe to Prime) right as the holiday shopping frenzy kicks off. You may come for the football, but stay to buy toys or an Echo speaker."

    KC's View:

    Brilliant move by Amazon … no doubt a highly profitable move by the NFL … and yet another example of how, at least in some ways, Amazon is playing a kind of three-dimensional chess while everybody else is playing checkers.

    Published on: October 21, 2022

    C-store behemoth 7-Eleven has joined the lengthening list of retailers starting up a retail media network, with the likely impact being that it will be able to siphon off ad dollars from suppliers.

    The name:  Gulp.

    The Path to Purchase Institute (P2PI) quotes Ben Tienor, director of brand and customer insights at 7-Eleven,  as saying that "Gulp differs from many retailer media networks on the market as 7-Eleven focuses more on fulfilling an 'immediate consumption purchase occasion' versus stock-up trips … with Gulp, 7-Eleven is more focused on marketing on third-party platforms and properties. It leverages first-party data to target the right consumers with relevant messaging. It partnered with IRI to mine through their first-party transaction data and answer the kind of questions you’d get if you looked at enough receipts, Tienor said."

    KC's View:

    The targeted customer and the shopping occasions may be different, but almost certainly the competition for ad dollars from suppliers is going to be against everybody else and their brother who is starting up these networks.

    Hard for me to tell if this is just the initiative de jour, or if we're looking at a long-term trend that will end up being foundational to how retailers communicate with shoppers.  As a consumer, I tend to worry about these things being just so much more noise and clutter … but I also recognize that I almost certainly am not the target customer.

    In the food retail space, I think these networks can be effective educational tools that build a high level of transparency and information.  But I think that they'll more likely be used as just one more way to extract dollars from manufacturers.

    Published on: October 21, 2022

    Bloomberg has a piece about how Shell is envisioning the gas station of the future:

    "Drivers filling up at the Shell station on Fulham Road in southwest London can get coffee, sodas, snacks, and basic groceries such as milk and eggs. One thing that’s not on offer: gasoline. Since January the station has been all-electric, with the old gas pumps replaced by 10 rapid chargers set under soaring wood awnings where people can plug in and top up … The Fulham station is one of several prototypes it’s planning as more cars shift to battery power, aiming to get feedback on what works while laying the groundwork to hit a target of net-zero emissions by 2050."

    Istvan Kapitany, who oversees Shell’s global retail operations, calls it "the future of mobility."

    The story notes that "Shell is busy cementing deals with fast-food and coffee chains for its stations in various markets. And in China, the world leader in EVs, it’s in the midst of a rapid expansion, with 3,000 chargers there. In one station in the coastal city of Xiamen, it has a dozen charge points, 28 fuel pumps, and a facility for swapping out batteries using a system designed by Chinese EV maker Nio Inc. Shell has 100 such sites in the works in China, and it’s planning to introduce them to Europe this fall."

    Some context:

    "McKinsey & Co. expects demand for gasoline to fall to $79 billion by 2030 from $87 billion in 2019. Nonfuel retail sales at stations will rise by more than a third over the same period, to $30 billion, and EV-charging revenue will hit $20 billion by 2030, McKinsey predicts. But McKinsey expects about 80% of charging to be done at home or the office, leaving Shell and other gas station operators to tussle over the remaining 20%.

    "And even there, they’ll face growing competition from the likes of Tesla Inc., which runs 35,000 supercharger stalls globally, and dedicated providers such as ChargePoint, Blink Charging, and Volkswagen’s Electrify America. Another threat is swapping stations, where a spent battery is removed from the car and replaced with a fully charged one. Most companies offering charging services, though, don’t have a retail component to generate extra sales."

    KC's View:

    It is noteworthy how this subject is getting a lot of attention - it was just a month or so ago that we had a story about how gas stations were being redefined as "mobility destinations," which implies an entirely different set of priorities and operational mandates.

    It has to be more than just replacing gas pumps with charging stations - it has to be an entire rethinking of both the outside and inside experience, making both relevant and resonant to shoppers.

    It probably was just an accident of timing, but Bloomberg has another story this week about how one c-store chain is changing for the future:

    "Green Thumb Industries Inc., one of the largest US cannabis producers, signed a deal with Circle K, the global convenience-store chain, to sell licensed marijuana at its Florida gasoline retailers. The partnership will begin next year with 10 of the company’s 600 locations in the state, Green Thumb said.

    "The deal is rare, given that legal marijuana has so far been sold only in stand-alone dispensaries in the US and within pharmacies in countries such as Uruguay and Germany. By selling marijuana, which is still illegal at the federal level, at gas stations where consumers buy staples like snacks and cigarettes, the partnership may help push the drug further into the mainstream."

    Published on: October 21, 2022

    Bloomberg reports that "in a survey of office-based US employees, only 52% said they 'completely agree' that Starbucks 'behaves in an ethical and responsible manner,' executives told staff at an Oct. 13 meeting, a video of which was viewed by Bloomberg News. Slightly fewer, 48%, said they completely agreed that they were 'proud of the role Starbucks has in making a social impact.'

    "Both of those statistics were 'historic lows,' according to a chart displayed at the meeting. Additionally, only 42% of staff fully endorsed the statement that Starbucks 'lives up to its mission and values,' while fewer than a quarter fully agreed that 'Starbucks leaders make the right decisions for the company.' Starbucks said the study is part of its efforts to engage with its workers.

    "This survey offers a rare glimpse inside the Seattle-based company as it grapples with unionization at its US stores. It also shows how Starbucks’ battles with retail staff have changed corporate-employee sentiment, generating unease at a company that for decades has nurtured a reputation for progressive views on issues such as racism, LGBTQ rights and the environment."

    KC's View:

    When I read stories like these, I cannot help but feel like all of Starbucks' labor issues are self-inflicted wounds.   They could've paid attention to how the market was changing.  They could've paid attention to how stores were not designed to cater to the shifting market.  And they could've paid attention to how front line employees were being stressed out by all of this.

    But they didn't.  I suspect they were so busy talking that they weren't listening.  The impact of the pandemic is an explanation … but not an excuse.

    Self-inflicted wounds.  They should stop playing the blame game and do more to fix the problems faster.

    Published on: October 21, 2022

    The Seattle Times has a lovely little valedictory for Medina Market, located in a small residential community just east, across Lake Washington, from Seattle, where Korean immigrants Jin and Hae SunYou have operated since 2011.

    Which isn't that long ago … but the store is closing now because the owners want to move back to South Korea, where one of their sons lives.

    An excerpt:

    "The customer base ranges in this wealthy enclave, which counts Bill Gates, Jeff Bezos and Charles Simonyi among its about 3,000 residents.

    "Billionaires have stopped by to purchase bottles of wine, and construction workers come in for lunch. Jin wouldn’t identify his famous customers — it was clear they wanted to be private, he added. Sometimes people come in and ask where Gates or Bezos live, but Jin won’t say. He likes that anyone, the billionaire or the hourly worker, can come in and feel welcome."

    The Times writes that "customers joked that the market, one of the only commercial businesses in the city, served as a makeshift community and child care center. Some boys were acting up one day, so Jin called their parents. Parents have called them to say that their kids were officially cut off from their house account after they got an unexpectedly high bill with ice cream and candy."

    This week, as the couple closed the store for the final time, "residents gave You and Jin one more send-off, raising $75,000 for the couple in their retirement."

    You can read the entire story here.

    KC's View:

    I wanted to take note of this story because it seems so reflective of a time gone by, when markets would in fact serve as community centers, where, in the words of one customer, "Everyone feels very seen."

    My only question is, doesn't 75 grand seem kind of paltry for a customer base with the means mentioned in the story?  But on the other hand, it is remarkable gesture.

    Published on: October 21, 2022

    •  Kroger said this week that it has officially opened "its newest Customer Fulfillment Center (CFC) in Romulus, Michigan. Powered by the Ocado Group, the CFC will leverage advanced robotics technology and creative solutions to redefine the customer experience for customers in the greater Detroit area … The approximately 135,000-square-foot facility, situated on Wahrman Road in Romulus, will reach customers up to 90 minutes from the site."

    "Kroger has served customers in the state of Michigan for more than a century and we are thrilled to bring Kroger Delivery to greater Detroit," said Bill Bennett, Kroger Vice President, and Head of E-commerce, in a prepared statement.  "We are passionate about delivering a fresh, convenient customer shopping experience with zero compromise on quality, selection, and affordability. From the refrigerated trucks, to the trained and uniformed drivers, to the white glove delivery experience at the door, Kroger Delivery brings that same zero compromise experience to a new delivery option for customers."

    •  Amazon announced that it is continuing "its legal efforts to shut down fake review brokers, filing its first criminal complaint in Italy and its first lawsuit in Spain. These two legal proceedings, plus 10 other new lawsuits recently launched in the U.S., target bad actors that operate more than 11,000 websites and social media groups that attempt to orchestrate fake reviews on Amazon and other stores in exchange for money or free products."

    More detail from Amazon: 

    "Amazon’s first criminal complaint in Europe targets a high-profile broker in Italy selling fake reviews. The defendant claims to have built a network of individuals who are willing to buy products on Amazon and post 5-star reviews in exchange for a full refund. Amazon’s decision to seek criminal proceedings in this case signals the company’s determination to stop bad actors who profit by misleading customers and selling partners. Individuals convicted of this type of crime in Italy may be subject to imprisonment and fines.

    "Amazon also filed its first civil complaint in Spain against the fake review broker, Agencia Reviews. The Spanish-based operator targets sellers and customers of and communicates via the instant messaging service Telegram to evade detection. According to Amazon’s investigations, the suspected fraudster fully reimburses customers once they publish a fake 5-star review."

    Published on: October 21, 2022

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  The New York Times reports that the New York City Department of Consumer and Worker Protection has ruled that the Van Leeuwen Ice Cream scoop shops in Manhattan and Brooklyn now will accept cash - which it wasn't, in violation of the city's cashless ban law.

    The company will pay $33,500 in outstanding civil penalties.

    According to the Times, "The city said that Van Leeuwen has refused to comply with the law, which forbids businesses to accept only credit card payments, since it went into effect in November 2020. Van Leeuwen has 19 locations in New York City and another dozen nationwide … The Office of Administrative Trials, which handles violation summonses from 19 city agencies, found Van Leeuwen to be in violation of the cashless ban more than 90 times, according to the settlement agreement.

    "The company repeatedly failed to appear at the majority of the administrative hearings and failed to pay 'some' of the outstanding penalties."

    The Times also notes that if you want to pay cash, you'd better bring a lot of it - a single scoop costs upwards of $6.50.

    Published on: October 21, 2022

    Got the following email from an MNB reader about Albertsons' quarterly sales and profit increases:

    The increase in $$ sales by 7.4% seems to be lacking the price increases of over 13%.  This is just accounting gymnastics.  Where it appears, the story is that unit sales are down so less goods are being purchased.  My question is will they be able to maintain strong $$ numbers when pricing starts to decline?  I would think the fall may be greater than the rise. 

    We've had a lot of conversation recently about inflation and recession - I can't imagine why - which prompted this email from MNB reader Tony Bartys:

    I can’t help but remember that inflation was rampant in Germany particularly before Hitler came to power. He offered simple solutions to complex problems. They didn’t work, but at the time he was raising a fervor and the people followed him. 

    With what’s happening in Ukraine, I pray Europe is not on the precipice of a repeat. King Solomon, with all his wisdom, recognized that there is nothing new under the sun,

    Wow.  Hitler and King Solomon in the same email.

    There is a basic truth in there, though - there are no simple solutions to complex problems.

    No matter what some people say and think.

    Nuance is to be celebrated, not demeaned or dismissed.

    On another subject, from an MNB reader:

    Here's a topic to mull over for you.  Many retailers and food service operators ask you if you want to round up for a cause, Red Nose Day, Breast Cancer, or round up to help the coin shortage with the round up being donated to charity.  As a consumer I wonder if this is actually going to the charity, they are supporting.  Does anyone track what this number is?  It would make sense to make this information available and a great PR tool. Your thoughts?

    My thoughts are that I think it makes total sense, from both an ethical and public relations point of view to be transparent about these numbers.  Maybe I'm naïve, but it never has occurred to me to question whether retailers actually are donating said funds as promised.

    Published on: October 21, 2022

    •  In Game Two of the American League Championship Series, the Houston Astros beat the New York Yankees 3-2, taking a 2-0 game lead in the best-of-seven series.

    •  In Thursday Night Football action, the Arizona Cardinals defeated the New Orleans Saints 42-34.

    Published on: October 21, 2022

    I recently picked up "IQ," a 2016 detective novel by Joe Ide, that I found to be an intriguing look at a milieu with which I was completely unfamiliar - East Long Beach, where an unlicensed private detective, Isaiah Quintabe (the IQ of the title), takes on cases from locals that the authorities won't or can't address.  What IQ brings to the table is a Sherlock Holmes-like intellect - he's razor smart and perceptive, and able to see things that most people don't even notice.

    In "IQ," the first in a series, Quintabe finds himself trying to find out who is trying to kill a strung out rap mogul, which brings him into the crosshairs of a hired killer.  The plotting is strong, the patois feels authentic, but what really is appealing is IQ's backstory - the events that led this high school dropout to this unusual line or work, and the guilt he carries with him and drives him.

    It's a solid entry in a genre I love, and I recommend it.  

    (Ide also has written a new Philip Marlow novel, "The Goodbye Coast," in which he brings Raymond Chandler's iconic private eye into the modern world.  "IQ" is so good that it made me want to check it out.)

    Somebody is going to have to explain the broad appeal of HBO's "The White Lotus" to me.

    I know the critics loved it.  I know the audience reaction was sufficient to get it renewed for a second season.  And I have no quibble with the writing and acting, all of which marinated the series' exploration of class and race in a Hawaiian resort a high level of acidity.

    But for the most part, I found "The White Lotus" to be off-putting because I never really care about or empathized with the vast majority of the characters.  I watched the entire first season, but found myself a) being glad that it was only six episodes, and b) having no inclination to watch a second season.

    I've watched the first few episodes of the "Quantum Leap" reboot - enough to be able to tell you that it is worth avoiding.  I was a big fan of the original, Scott Bakula version from the early nineties (not to mention time travel shows and movies in general), but the new one has none of the originality, none of the spark (provided by Bakula and his co-star, Dean Stockwell), and none of the energy that its time traveling premise unleashed.

    The new one has way too much exposition and none of the magic - I'd rather go back and watch the original on Peacock, or watch other time-traveling series like "Journeyman" and "Timeless."

    That's it for this week.  Have a great weekend, and I'll see you Monday.