business news in context, analysis with attitude

Published on: October 25, 2022

The Washington Post recently ran a piece about all the devices Amazon either has developed or acquired that are collecting data about users.  You know, us.  The potential for abuse underlines what I think ought to be a sacrosanct rule - data belongs to the shopper, and cannot be used, sold or otherwise provided to any entity (commercial or governmental) without the consumer's permission.

Published on: October 25, 2022

Engadget reports that Amazon "is experiencing high levels of attrition (regretted and unregretted) across all levels, totaling an estimated $8 billion annually."

According to the story, ";'Regretted attrition' – that is, workers choosing to leave the company – 'occurs twice as often as unregretted attrition' – people being laid off or fired – 'across all levels and businesses,' according to this research. The paper, published in January of 2022, states that the prior year's data 'indicates regretted attrition [represents] a low of 69.5% to a high of 81.3% across all levels (Tier 1 through Level 10 employees) suggesting a distinct retention issue.' By way of explanation, Tier 1 would include entry-level roles like the company’s thousands of warehouse associates, while a vice president would be positioned at Level 10. It also notes that 'only one out of three new hires in 2021' stay with the company for 90 or more days.

The story says that "the documents, which include several internal research papers, slide decks and spreadsheets, paint a bleak picture of Amazon’s ability to retain employees, and how the current strategy may be financially harmful to the organization as a whole. They also broadly condemn Amazon for not adequately using or tracking data in its efforts to train and promote employees, an ironic shortcoming for a company which has a reputation for obsessively harvesting consumer information. These documents were provided to Engadget by a source who believes these gaps in accounting represent a lack of internal controls."

The documents are part of a "tranche … marked 'Amazon Confidential' provided to Engadget and not previously reported on."

Engadget also writes:

"Amazon repeatedly declined to answer specific questions related to these documents. Reached for comment, a spokesperson wrote: 'As a company, we recognize that it’s our employees who contribute daily to our success and that’s why we’re always evaluating how we’re doing and ways we can improve. Attrition is something all employers face, but we want to do everything we can to make Amazon an employer of choice. This is accomplished through offering good pay, comprehensive benefits, a safe workplace, and robust training and educational opportunities that are effective, yet always improving.' Amazon also declined to confirm or deny any of the specific claims or figures made in the documents, instead generalizing that internal documents are sometimes 'rejected due to lack of reliable data, or are modified with corrected information' without indicating if that was the case here."

The entire Engadget story can be read here.

Subsequently,  Forbes elicited a response from Amazon and reports:

"'We weren’t afforded the opportunity to review the draft documents cited in the Engadget article,' Steve Kelly, an Amazon spokesperson, said via email.

'That said, they are most certainly early drafts that weren’t appropriately refined or vetted, let alone finalized. Basing articles on unverified documents - without knowing when they were written, if they were validated, or if they were later corrected – can be misleading, as is the case with the Engadget article'.

"Amazon has a rigorous document review process - oftentimes documents never make it past the draft stage, are rejected due to lack of reliable data, or are modified with corrected information,' Amazon said in a statement.

'After the Engadget article published, we believe we were able to identify all of the leaked documents in question and can confirm that none them had been fully vetted or approved,' Amazon said."

Maybe not "fully vetted or approved."

But not necessarily inaccurate.

And certainly an Eye-Opener.

Published on: October 25, 2022

Bloomberg has a fascinating piece about "a class of startups that soared during the pandemic, trying to solve a logistics and math puzzle that’s dogged Silicon Valley for decades: Can an e-commerce company whisk products to your house in under an hour? And more important: Can it actually make money doing so?

"Flying cars and nuclear fusion it certainly isn’t. But the problem has confounded nearly everyone who’s tried to solve it, starting in the 1990s with Kozmo.com, whose bike messengers swarmed New York and a handful of other cities, offering free one-hour delivery of everything from magazines to 16-ounce Cokes, before it was vaporized in the dot-com crash.

"Two decades later, Covid-19 lockdowns created the perfect conditions for the model to finally work - billions of people trapped at home, desperate to have anything and everything delivered as quickly as possible, for almost any price. Nearly $10 billion of venture capital gushed into so-called quick commerce companies like Gopuff and the Istanbul-based Getir in 2021, according to PitchBook Data Inc. That didn’t include the exponential growth of delivery apps like DoorDash, Uber Eats, and Instacart, which ferried food from restaurants and supermarkets. Meanwhile, the biggest deliverer of all, Amazon.com Inc., was notching a 40% annual growth rate."

Now, Bloomberg writes, "the transition from peak pandemic to a new normal has interrupted the party. Once-wary shoppers have returned to stores looking for discounts, inflation is back, and the economy has foundered. The market values of DoorDash Inc. and Uber Technologies Inc., both public companies, have fallen 67% and 33%, respectively, in 2022. Instacart Inc. pivoted toward developing software to help supermarkets run their websites and shelved plans to go public this year. Gopuff clones like the New York-based Fridge No More and Buyk went spiraling out of business; another, Jokr, withdrew from the US to focus on South America. Earlier this month, Berlin-based Gorillas, which has been desperately hunting for a cash infusion, entered into advanced talks to be acquired by Getir. Even mighty Amazon shed 40% of its mid-pandemic market cap, closed warehouses, and laid off employees."

And Gopuff, which "had an Amazon-like approach of storing and stocking products in its own mini warehouses staffed by full-time employees, then using contractors to deliver products to people’s doorstep for $1.95 an order," last year alone burned through "roughly $700 million in expansion mode," and in recent months has "laid off almost 2,000 employees."

You can read the entire story here.

Published on: October 25, 2022

Schnuck Markets announced that it is launching, via a partnership with Instacart, a "Schnucks Now" 30-minute delivery service.

A description from the retailer:

"Schnucks Now is a new online grocery shopping method, ideal for smaller orders, focused on fulfilling convenience orders fast. The new service allows customers to shop from our assortment of fresh groceries, pantry, household essentials, alcohol, meals, snacks and more for delivery in as fast as 30 minutes with no priority fees and lower delivery fees. The service is available to customers via the Schnucks Rewards App and the Instacart Convenience Hub, an Instacart marketplace product feature designed to streamline convenience shopping … Schnucks Now is available during regular store operating hours. There is a $10 minimum purchase on all Schnucks Now orders. Service charges do apply."

The 20-minute delivery service is available in all Schnuck's markets.

Published on: October 25, 2022

Two stories in the Boston Globe about companies addressing the issue of food waste:

•  One is about a startup company called Divert, which has as its aim helping "the grocery industry reduce its food waste by 50 percent by 2030, consistent with US and United Nations goals … Stores send Divert expired and damaged items, which the company sorts with optical scanning technology. Edible goods are sent to food pantries, while other waste is converted into renewable energy."

According to the story, "For food waste that cannot be diverted to food banks or other uses, Divert turns it into clean energy via a process called anaerobic digestion. Food waste is combined with bacteria, which turn the waste into renewable natural gas, or RNG, which can be used to produce electricity, heat homes, or power vehicles.

"With 250 employees, Divert now operates 10 plants processing 232,000 tons of wasted food per year from more than 5,000 retail stores.

"Reducing waste at the retail level, as Divert does, is one of the most promising strategies for cutting overall food waste, according to Emily Broad Leib, founding director of the Harvard Law School Food Law and Policy Clinic."

•  The other story is about how "local restaurants are exploring a creative way to reduce that food waste. One of them is OAK Long Bar + Kitchen, a popular upscale eatery in the heart of the Fairmont Copley Plaza hotel.

"The restaurant has partnered with the app Too Good To Go, which sells unsold food at a fraction of the original price to its visitors. For chef Zaid Khan and his team at OAK Long Bar + Kitchen, the new initiative is a chance to reduce the restaurant’s carbon footprint while getting more customers in the door.

The story goes on:

"For OAK Long Bar + Kitchen, app users can order a few hours ahead and secure a bag of leftover food. At the end of breakfast and dinner services, Khan and his staff clean up and wipe down the kitchen. Then, they package leftover food into 'surprise bags' containing a variety of options. Customers then pick up their surprise bag from the restaurant at a selected time, just like any other takeout order.

"Three large bags are sold after each breakfast and dinner service, to the customers who are quickest to the punch when ordering. For breakfast, that could mean croissants, pastries, yogurt parfaits, or fresh fruit. The dinner deal includes some combination of clam chowder, grits, roasted chicken, and baked bread.

"Each bag is priced at $6.99, a third of its estimated value. Unsurprisingly, college students on a budget are eager to swoop in and grab a bag."

The Globe makes the point that "wasted food is a surprisingly large culprit in global warming, responsible for 7 percent of greenhouse gas emissions worldwide. In the United States, food loss and waste are responsible for 170 million metric tons of greenhouse gas, equal to the annual output of 42 coal-fired energy plants, according to the Environmental Protection Agency."

Published on: October 25, 2022

Ahold-Delhaize-owned, Maryland-based Giant Food said yesterday that "local shoppers can now purchase a selection of products in reusable packaging thanks to a new partnership between Giant Food and Loop, the circular reuse platform developed by TerraCycle. Customers can walk into any of the 10 participating Giant supermarkets and purchase more than 20 products from leading consumer brands, all packaged in reusable containers instead of single-use packaging … An assortment of products in reusable Loop containers from well-known brands including Kraft-Heinz and Nature’s Path will be found in branded displays at participating Giant stores. When finished with a product, the empty packaging is returned to a Loop Return Point at any of the participating stores. From there, the containers are sent to Loop to be sanitized, then returned to the CPG suppliers to be refilled and returned to the store for future purchase. Customers are charged a small packaging deposit at checkout, and a full refund is given once the container is returned."

Published on: October 25, 2022

•  Arkansas-based Harp Food Stores said yesterday that it is acquiring "The Markets, an independent grocery retailer with six locations in central Louisiana and one store in southwestern Mississippi - new markets for Harp's.

"Financial terms of the deal were not disclosed, but Harps said the deal is expected to close by the end of the year."

•  News site Semafor reports that Goldman Sachs has "pegged the risk of a U.S. recession in the next year at 35%. That is still three times as high as the typical average for a year, but the investment bank’s projection is far lower than others. The consensus in a recent Wall Street Journal survey was 63%, while Bloomberg analysts put it at 100%. The Federal Reserve meets next week, and is likely to raise interest rates by another 0.75% in a bid to combat inflation, which could slow the economy further."

Published on: October 25, 2022

•  From Bloomberg:

"Amazon workers seeking to join a union at a company warehouse in Southern California have backed away from their attempt to hold an election, a setback for the upstart Amazon Labor Union following its defeat at a New York facility last week. 

"The union withdrew its petition for an election at a warehouse in Moreno Valley, California, according to a National Labor Relations Board docket that includes a letter, dated Friday, approving a request to stop the vote. Unions that make such requests aren’t asked to give a reason, NLRB spokesperson Kayla Blado said. Amazon Labor Union organizers didn’t respond to messages seeking comment."

Published on: October 25, 2022

Yesterday we quoted a Benjamin Lorr op-ed piece in the Los Angeles Times in which he wrote about the Kroger-Albertsons merger:

“The supermarket industry is trapped in an unsustainable model, "chasing higher and higher volume to fund cheaper and cheaper prices. Which by necessity means grocers are always looking over their shoulder at their competition. Getting underpriced is an existential threat. Growing bigger is your only chance at survival.”

Prompting one MNB reader to write:

Wasn’t Jeff Bezos the person who said, Your margin is my opportunity."

It was.

Also on the subject of the merger, one MNB reader wrote:

I see this merger in a direction that will put increased pressure on the store level ops which in turn will have a detrimental effect on their labor force.  I am not familiar with Kroger, however I am with A/S.  The A/S side has no help in the stores now and perceive that automation is path to the future.  Unless their store op direction changes the Market Baskets and Shop Rites of the food industry will eat their lunch.   

Another MNB reader wrote:

Your comments today on Lorr's LA Times piece immediately reminded me of Seth Godin's thinking on the race to the bottom:  you may just win.

And MNB reader Andy Casey wrote about competitive concerns:

These days I’m not even certain how to define local competition – I frequently buy groceries from a chain that doesn’t have a store within 250 miles. 

Fair point.

One line I often use in speeches is, "Competition does not know borders, nor inherent limitations. Market share and trade area analyses may become obsolete constructs."

Old metrics need not apply.

We took note the other day of a Bloomberg 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."

One MNB reader responded:

This scares the bejeepers out of me.  It is bad enough with drunk or impaired drivers now.  I can not imagine the impact of marijuana being so easily available as well.  All this does is reduce the perception of marijuana being an impairment inducing drug and that more people will feel they can handle the impairment factor produced.  Questions some intelligent regulators should ask.  “ How long does it take to recharge at these fast charge stations?  What do you think people that smoke pot will do while they wait???”  Not a good future.  I can just see the new ads,  Stop in at your local C- Store for your “Charge and Buzz” discount by using your loyalty card. Limited time offer.   Ugh!

"Charge & Buzzed" isn't such a bad promo line.  Or how, about, "Now you and your car can get buzzed at the same time."

Engadget reported the other day 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 … 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."

One MNB reader wrote:

Great marketing idea.  Only issue I have is that the coverage of TNF is not as good as other stations.  The visual is off.  It looks almost cartoonish and we are still seeing as many or more commercials.  Oh well, I guess I will be in the minority,  as usual.

I'm not sure you're in the minority on this.  But it'll probably allow Amazon to sell better routers and wifi extenders.

On another subject - two stories we ran yesterday - MNB reader Dale Tillotson wrote:

Two stories in a row - one about a turkey shortage followed by whiskey in the UK.  You should have combined them into one:  Wild Turkey.

Bada-boom.

We had a story yesterday about how "United Natural Foods, Inc. (UNFI) announced a new deal with digital coupon provider CoupDog."

Prompting one MNB reader to write:

I’m amazed that you didn’t already have the rights to the name “CoupDog”, given that some of your younger readers or college students at PSU (or some of your younger family members) might prefer to address you in that way…

My kids have long referred to me as "K-Dog."  (Among other things, I suspect, depending on the familial mood…)

And finally, regarding the MLB postseason, one MNB reader wrote:

Will baseball be over by Thanksgiving?    And they wonder why interest in the non-coastal markets is close to nil.

Bang the trash can slowly!! 

Not sure Houston can be considered a coastal market.

This wouldn't have been my choice for a World Series matchup, but every one of the teams I was rooting for got beaten.

I may not be as Astros or Phillies fan, but both teams won decisively, the games have been largely riveting, and I think the Series has the chance of being really exciting.

And FYI … the latest the World Series can go, if it lasts the maximum seven games, is Saturday, November 5.  As I've said here before, I'm good with that - when I was little, my fervent wish was to be able to watch baseball on my birthday.  This year, maybe that will be possible.

Published on: October 25, 2022

In Monday Night Football action, the Chicago Bears defeated the New England Patriots 33-14.