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    Published on: November 2, 2022

    The continuing goal of "The Innovation Conversation" is to explore some facet of the fast-changing, technology-driven retail landscape and how it affects businesses and consumers. It is, we think, fertile territory ... and one that Tom Furphy - a former Amazon executive who led the team that developed Amazon Fresh, and currently CEO and Managing Director of Consumer Equity Partners (CEP), a venture capital and venture development firm in Seattle, WA, that works with many top retailers and manufacturers - is uniquely positioned to address.

    Today, Tom Furphy and KC consider the financial headwinds that are facing every business, especially technology companies such as Amazon, and the degree to which the current situation could constrain their ability to innovate.  They focus on the importance of "not turning off the innovation engine," and continuing to make calculated bets on initiatives that are customer-centric.  And, they use Hell Gate - a narrow and treacherous strait where the East River, Harlem River and Long Island Sound converge - as a metaphor for what retailers need to do to survive.

    If you'd rather download and listen to The Innovation Conversation as an audio podcast, click below.

    Published on: November 2, 2022

    by Kevin Coupe

    I loved this email from Wegmans, which dropped yesterday.

    The concept was simple:  Thanksgiving is less than four weeks away, and customers have different holiday deal needs.  Some of us need a tons of help, including recipes and meal planning, some are looking for catering, others are looking for some pre-made options and sides, and others don't even know what their needs are.  

    Wegmans' message: We can help with all of that.   And the link embedded in the email takes the shopper to a remarkably detailed and comprehensive website focusing on various elements and alternatives.

    The email is very user friendly, and does something that we talk about here on MNB all the time - it puts the retailer in the position of being an agent for the shopper.  (And certainly makes the retailer a more viable option than going to a restaurant.)

    My only, minor quibble … each of the options embedded in the email takes one to the same page.  It might've been even more impactful to bring folks to different places on the Wegmans site, geared to various priorities.

    Either way … the Wegmans approach is an Eye-Opener.

    Published on: November 2, 2022

    The Seattle Times reports that Washington State Attorney General Bob Ferguson has filed a lawsuit in King County Superior Court looking to prevent Albertsons "from paying investors a $4 billion dividend set to be paid out ahead of the grocery retailer’s proposed merger with rival Kroger."

    The argument is that the "dividend would sap Albertsons’ ability to keep its stores open during the years it likely would take to complete the $20 billion-plus merger. The Attorney General’s Office also requested a temporary restraining order to block the dividend payment, which Albertsons expects to complete Monday, until the lawsuit is resolved."

    The Times writes that "according to the lawsuit, Albertsons expects to cover the $4 billion amount using $2.5 billion in cash on hand and another $1.5 billion in loans.

    Albertsons needs $10 billion to operate over the next year, according to the suit, which contends that a $4 billion payment 'will cripple Albertsons’ ability to operate its stores and meaningfully compete with Kroger during the time before the deal closes and leave it in a weakened state if the deal subsequently falls apart'."

    Bloomberg reports that the dividend was announced by Albertsons after the merger agreement was announced, though the company says that it was decided upon before the merger talks started as "part of a plan to return capital to shareholders."

    The Times writes that "the lawsuit argues that a similar crisis followed the 2015 Albertsons-Safeway merger: divested stores were sold to Haggen, a local retailer, but Haggen’s cash reserves were so diminished by a dividend payment to its own private equity firm owner that Haggen was ultimately unable to operate the stores, many of which were eventually acquired by Albertsons. Nine of the divested locations are no longer supermarkets, according to the suit."

    AG Ferguson is one of several state Attorneys General who wrote a letter last week objecting to the dividend payment and threatening a lawsuit;  he appears to be the only one - to this point - to follow through on the threat.

    KC's View:

    Whenever the dividend payment was concocted, the optics are less than optimal - it leaves Kroger and Albertsons vulnerable to the argument that this merger is more about rewarding shareholders than helping shoppers.  And the extension of that argument is that there could be less effective competition if the deal is allowed to go through.

    As I wrote here yesterday, the victory this week by the US Department of Justice in blocking a $2.18 billion merger of Penguin Random House and Simon & Schuster, two of the world's top five publishers, because it would be bad for competition, creates yet another potential roadblock to the Kroger-Albertsons deal.

    And, opponents of the deal have created unlikely political bedfellows, with the Senators Elizabeth Warren (Democrat from Massachusetts), Bernie Sanders (Democratic Socialist from Vermont) and Mike Lee (Republican from Utah) all expressing skepticism.

    Lots of potential problems, but plenty of time - since the estimates have been that it will take until early 2024 to complete the deal - to resolve them.  And, as I've said here before, the lawyers and lobbyists are going to get rich.

    Published on: November 2, 2022

    From Bloomberg this morning:

    "CVS Health Corp., Walgreens Boots Alliance Inc. and Walmart Inc. have tentatively agreed to pay more than $12 billion to resolve thousands of state and local government lawsuits accusing the chains of mishandling opioid painkillers, according to people familiar with the matter.

    "The proposed settlement -- potentially one of the last big accords spawned by more than five years of litigation over the highly addictive painkillers -- calls for CVS to pay $4.9 billion, Walgreens to pay at least $4 billion and Walmart to pay $3 billion, according to the people, who asked not to be identified because they weren’t authorized to speak publicly about the tentative deal.

    "The settlement won’t be finalized until enough states, counties and cities agree to it, the people said. That’s the way a $26 billion opioid accord involving Johnson & Johnson and the three largest US drug distributors was structured in 2021."

    The Wall Street Journal notes that CVS "said the agreement isn’t an admission of guilt and that it would continue to defend against any litigation that the settlement doesn’t resolve."

    KC's View:

    Sure.  Because nothing says "I'm not guilty" like writing a $5 billion check.

    I'm sure that there are all sorts of reasons that companies are allowed to cut deals like these in which they are allowed to claim that they haven't admitted guilt.  It is such a crock, reflective of a culture in which shame and responsibility seem to be alien to how companies do business.

    Executives from all the companies that contributed to the opioid epidemic - and all the lives it destroyed - should get their own, special, particularly fiery circle of hell.

    Published on: November 2, 2022

    Walmart is turning to Office Space, the 1999 cult-favorite comedy, for a holiday promotion campaign.

    Here's how Variety frames the story:

    "Walmart, the massive U.S. retailer, is reviving the movie with a new ad campaign that uses the talents of actors Gary Cole, who played the infamous corporate manager Bill Lumbergh and Ajay Naidu, who played the rebellious tech worker Samir Nagheenanajar. Despite the fact that their workplace, home to the soul-enervating Initech, burned to the ground at the end of the Mike Judge movie, both are back on the job, doing many of the same things they did more than two decades ago."

    According to the story, "Walmart is trying to create a new image for 'a case of the Mondays,' a workplace malady that strikes many nine-to-fivers each week and that served as an essential theme of the movie, which portrays working stiff Peter Gibbons and his efforts to navigate around all the rules and regulations of life at Initech. The new reason to celebrate the first working day of the week, at least in the view of the retailer, is that most if its holiday-sales efforts are moving there. Walmart has in recent years tried to expand the concept of 'Black Friday,' the one-day retail rush that takes place on the day after Thanksgiving, to the broader pre-holiday season. Many of its sales and bargains show up online — at the start of the week."

    Here's the first commercial in the campaign:

    Published on: November 2, 2022

    Reuters reports that Dollar General Corp "was sued on Tuesday by Ohio, which accused the company of baiting shoppers with low prices on store shelves, only to then charge more at the register.

    "Citing inflationary pressures faced by consumers, Ohio Attorney General Dave Yost said he sued after receiving 12 complaints about overcharges, including from a shopper charged $2 for shampoo that was listed at $1 on the shelf.

    "Yost said Ohio lets stores have error rates on overcharges as high as 2%, but that testing last month at 20 Dollar General stores in Butler County, just north of Cincinnati, found error rates of 16.7% to 88.2%."

    KC's View:

    Isolated cases can be characterized as mistakes.  But when the problem is systemic, and the company seems to be going out of its way not to do anything to rectify the situation, "dishonest" does seem to be the appropriate word.

    Dollar General never should've let it get this far.  I'd call it retail malpractice.

    Published on: November 2, 2022

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Axios reports that Brendan Carr, one of five commissioners at the Federal Communications Commission (FCC) has gone on the record as believing that "the Council on Foreign Investment in the U.S. (CFIUS) should take action to ban TikTok" in the US."

    According to the story, "It's the strongest language Carr has used to date to urge action on TikTok. With more than 200 million downloads in the U.S. alone, the popular app is becoming a form of critical information infrastructure — making the app's ownership by a Chinese parent company a target of growing national security concern.

    "The FCC has no authority to regulate TikTok directly, but Congress previously acted after Carr voiced concerns about Chinese telecom companies, including Huawei … TikTok is currently in negotiations with CFIUS, an interagency committee that conducts national security reviews of foreign companies' deals, to determine whether it can be divested by Chinese parent company ByteDance to an American company and remain operational in the United States."

    The story notes that "a series of recent reports have challenged TikTok's claims that U.S. user data is secure because it is stored outside of China and that the company does not comply with Chinese government content moderation requirements."

    I think there a lot of reasons for the US to be concerned about Chinese ownership of TikTok.  The discussion has to be about national security, not politics, but it has to take place.


    •  The New York Times has a story about how advertisers are nervous about Elon Musk's ownership of Twitter, which isn't a good thing, since ads provide about 90 percent of Twitter’s revenue.

    According to the story, "the billionaire, who is meeting advertising executives in New York this week, has spooked some advertisers because he has said he would loosen Twitter’s content rules, which could lead to a surge in misinformation and other toxic content.

    "IPG, one of the world’s largest advertising companies, issued a recommendation on Monday through its media agencies for clients to temporarily pause their spending on Twitter because of moderation concerns, three people with knowledge of the communication said. The Global Alliance for Responsible Media, a coalition of platforms, advertisers and industry groups that is fighting harmful content on social media, also said this week that it was monitoring how Twitter planned to deal with content moderation.

    "Twitter has been in disarray as it adjusts to a new reality under Mr. Musk, who closed his $44 billion buyout of the company last week. Mr. Musk immediately fired Twitter’s chief executive, its chief financial officer and others before moving quickly to install close confidants and trusted engineers from his other companies at the social media firm.

    "Since then, Mr. Musk and his advisers have been working on product changes and major cuts to Twitter’s rank and file. Managers at Twitter, which has about 7,500 employees, have said they are finishing up lists of high- and low-performing workers, most likely with an eye toward layoffs. While several employees have already been let go, the timing and scope of mass layoffs remain fluid."

    Twitter is going to be a real s-show under Musk.  No question in my mind.  He may be brilliant, but he's also a lunatic with a warped sense of responsibility and an apparent willingness to use social media to spread misinformation, disinformation, and outright lies.  

    Published on: November 2, 2022

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Walmart this week announced a "major savings on a Walmart+ membership … For two days only, new members can sign up for an annual Walmart+ membership for just $49, amounting to an epic six months free off its everyday price. This limited time offer on the first year of an annual membership is available starting today through Nov. 3."

    The membership, Walmart says, will allow customers to "take advantage of early access to the hottest holiday deals this season."

    Since Walmart+ essentially the competitive answer to Amazon Prime, it is safe to assume that Walmart is making the same calculation about its members - that they'll spend significantly more money on the site on an annualized basis.  So anything you can do to bring more people into the fold is a good thing.  For Amazon, that means spending billions of dollars to get exclusive rights to Thursday Night Football games;  for Walmart, it means giving new members a deal.

    My only question is:  what happens to people who paid full price for Walmart+ membership a week ago?  Timing is everything, but Walmart may get some complaints…

    Published on: November 2, 2022

    •  Bloomberg reports that Amazon "is freezing staffing levels in its profitable advertising business, according to a person familiar with the matter, showing that the world’s largest e-commerce company is taking more drastic measures to align expenses with slowing sales. 

    "The headcount freeze was announced internally Tuesday, said the person, who asked not to be identified because the plans are private. Amazon will continue to fill vacancies in its advertising business, but won’t create any new positions, the person said."

    More context from Bloomberg:

    "The decision to keep the advertising unit workforce at its current level shows Amazon is looking to squeeze more profit out of the fast-growing business in the busy holiday quarter. Chief Financial Officer Brian Olsavsky said in a media call last week that Amazon would continue to invest in its advertising division and its cloud-computing unit, Amazon Web Services, while looking for other places to cut costs.

    "Amazon’s advertising business -- largely sponsored search results on its web store -- generated $9.55 billion in the quarter ended Sept. 30, an increase of 25% from the same period a year earlier."


    •  From Business Insider:

    "Amazon ordered employees to save all documents and data related to the Federal Trade Commission's ongoing investigation into the Prime sign-up and cancellation process.

    "An internal email shared on Friday, and obtained by Insider,  from a representative of Amazon's litigation and regulatory unit instructed a group of employees to 'preserve' all company files relevant to the FTC-Prime investigation. They are 'required to preserve relevant documents and data' stored in their work and home computers, as well as personal devices and even CDs and DVDs, the email said. Files of interest can range from hard copies and electronic documents to emails, instant messages, and calendar entries.

    "Only a select group of employees 'who might have such information' received the email, it said.   'You should preserve all relevant documents and data regardless of when the documents and data were created or received by you, whether you created the document or not, and even if the relevant portion is only a small part of the documents or data,' the email read.

    "Amazon's spokesperson did not respond to a request for comment."


    •  From the New York Times this morning:

    "The Walt Disney Company announced on Tuesday that it would begin a 'limited test' to determine the viability of selling themed merchandise alongside certain Disney+ shows and films. Until next Tuesday, Disney+ subscribers will have exclusive access to a smattering of new products tied to franchises like 'Star Wars,' 'Black Panther' and 'Frozen.' The items include light saber collectibles ($250 to $400) and themed clothing ($27 to $100) that will go on sale in regular retail stores next week.

    "The shopping option is available only on Disney+ profiles in the United States that have been verified as belonging to users who are 18 and older. The number of Disney+ subscribers in the United States is not known; Disney has said the service has about 45 million customers in North America.

    "The effort reflects a business reality: Disney+ has more than 150 million subscribers worldwide, up from about 115 million a year ago, but the days of easy growth are over. Disney must work harder to sign up new subscribers and find ways to keep current ones from canceling, especially with a possible recession on the horizon. Exclusive access to merchandise could be one sweetener. Another could involve perks at Disney theme parks, including early access to new rides. Disney+ subscribers have already received discounts at Walt Disney World hotels in Florida."

    Published on: November 2, 2022

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  The New York Times this morning reports that "the nation’s extreme shortage of job seekers worsened in September, the Labor Department reported Tuesday, after easing the previous month.

    "Employers had 10.7 million positions open as summer ended, up from 10.3 million in August. That left roughly 1.9 posted jobs for every unemployed worker, a persistently high ratio even as the economy appears to be decelerating because the Federal Reserve is working to quell inflation."


    •  Publix Super Markets said this week that sales for the three months ended Sept. 24, 2022, were $13 billion, a 9.2 percent increase from $11.9 billion in 2021. Same-store sales were up 7.6 percent.  Net earnings for the period were $394.1 million, compared to $856.9 million in 2021, a decrease of 54 percent.

    Year-to-date sales were $39.2 billion, up 10.7 percent from the same period a year ago, with same-store sales up nine percent.  Net earnings for the nine months were $1.6 billion, compared to $3.4 billion in 2021, a decrease of 51.2%.


    •  Ahold Delhaize-owned Stop & Shop "announced the launch of its annual Turkey Express program, a month-long initiative dedicated to donating holiday meals to hunger relief organizations and families in need ahead of Thanksgiving. Stop & Shop has a longstanding history of giving back to the communities it serves with a focus on fighting hunger, an issue that continues to be prevalent amidst inflation and rising food costs. According to Feeding America, in 2021 alone, 53 million people turned to food banks and community programs for help … Stop & Shop will deliver 25,000 Thanksgiving turkeys, equaling a total of nearly 400,000 pounds, to 30 community partners and hunger relief organizations across Massachusetts, Connecticut, Rhode Island, New York, and New Jersey."

    Perhaps even more impressive this year at a time when there is much conversation about a turkey shortage.  (Though I am told that for retailers and shoppers who have been aggressive early in placing order, it won't be as acute as some might have feared.)


    •  In Minnesota, the Star Tribune reports that "Target will add a bit more pomp to its grocery aisles this holiday with the addition of British retailer Marks & Spencer's popular treats.

    "In the first time it has partnered with the British brand, Target will sell a limited collection of chocolates, biscuits, teas and other goods from Marks & Spencer starting in mid-November.  Customers will find products like a shortbread biscuit tin in the shape of a red double-decker London bus and Percy Pig sweets."

    Published on: November 2, 2022

    •  Julie Powell, the best-selling author whose blog tracked her efforts to make all 524 recipes from Julia Child's 1961 classic “Mastering the Art of French Cooking, Volume 1," has passed away.  She was 49, and the cause was listed as cardiac arrest.

    Powell's blog was first turned into a best-selling book, "“Julie & Julia: 365 Days, 524 Recipes, 1 Tiny Apartment Kitchen," and then into a hit 2009 movie, with Amy Adams as Powell, and Meryl Streep and Stanley Tucci as Julia Child and her husband, Paul (who were portrayed in flashbacks).

    Published on: November 2, 2022

    Lots of conversation about California's decision to ban the sale of new gas-powered cars as of 2035, and individual communities' decisions to not allow the building of new gas stations.

    One MNB reader wrote:

    I’m sorry, but as with most things done in California, this is a wrong-headed approach. They need to let the market decide. Business owners won’t invest millions of dollars on a new gas station/convenience store if the demand is not there. It will be a number of years before the internal combustion engine is in the rear view mirror. I’m glad I don’t live in that state. Unfortunately I live in New York which is not far behind.

    From another MNB reader:

    Regarding your article on the “planning” of California Communities Ban New Gas Stations; here’s my perspective:

    This would cause less Supply and therefore greater Cost to consumers.

    CA will surely then complain that costs are too high and throw more Taxes on the companies that sell oil – which will only increase consumer costs…

    Current refinery availability v demand is creating higher costs to consumers – so the “blue-print” is there.

    Demand will change to what level is TBD.

    CA does such a Great Job in “planning” that we continue to have our annual fires – despite all the “planning” that goes on …

    How about that wonderful plan for the high speed train from S.Cal to Las Vegas – is that an example of planning?

    Homelessness???

    I can go on.

    CA has a plan to improve energy availability?  What are the details?

    MNB reader Martin Salerno wrote:

    I would feel better for the current owners of gas stations in California if they passed some sort of law enticing these gas stations to incorporate electronic charging units at their stations.

    Incentivize the small business owner to convert to this new energy model, not just put them out to pasture.

    I have no problem with the idea that as societies go through major transitions, governments should try to figure out ways to ease those transitions in ways that are good for both businesses and consumers.  

    Speaking of transitions…

    Yesterday, an MNB reader weighed in on what he believes is California's general fecklessness by writing:

    There is a far bigger issue. CA electric grid has insufficient size today, with blackouts common. No planned hydro, atomic, or fuel cell stations. Solar and wind have no projects announced. The grid isn’t up to more electric demand, period. All else is just rearranging Titanic deck chairs.

    But another MNB reader took issue with this, and sent me a link to something called the Redwood Coast Offshore Wind project, described this way:

    In 2018, the Redwood Coast Energy Authority (RCEA) ran a competitive tender to select a partner to form a public-private partnership for the development of a floating wind project in Northern California. The RCEA selected a consortium led by Principle Power and including Ocean Winds, Aker Offshore Wind, H. T. Harvey & Associates, and Herrera Environmental Consultants Inc. 

    The resulting public-private partnership is now developing a 150 MW floating wind farm 40 km off the coast of Eureka, CA (Humboldt County), that will use the WindFloat® technology to access a site with waters up to 900 meters deep.

    And this reader wrote, he is proud to live in Humboldt County.

    I would suggest that the words "public-private partnership" are key here … here is some more information:

    Since the formation of the public-private partnership, the partners are working with stakeholders, including fisherman, tribes, environmentalists, and regulatory authorities to identify the most suitable location for the project. The proposed project site, which will feature between 5 and 15 wind turbines depending on project and wind turbine size, avoids or minimizes impacts on marine navigation corridors, major commercial fishing areas, and environmental resources while maximizing power generation potential thanks to the siting flexibility offered by the WindFloat® platform technology … The project is expected to drive significant investment in local infrastructure at the Port of Humboldt Bay, which can become the leading hub for the offshore wind industry on the West Coast of the United States, requiring skilled labor and thus creating significant local economic benefits.

    You can find out more here.

    This strikes me as the best kind of public policy initiative - including all stakeholders, with an eye on the future.

    The great Ross Macdonald once wrote, "We're all in the game. We all drive cars, and we're all hooked on oil. The question is how we can get unhooked before we drown in the stuff.”   And he wrote those words in 1973.

    It is about time we do something about it, and I, for one, admire California's willingness to try, even if sometimes the flesh is weak.


    Respond to yesterday's FaceTime video expressing frustration that supermarkets are allowing fast feeders to make the case that they are cheaper places to eat;  they may be less expensive on the surface, I said, but supermarkets always are a better value, and supermarkets that don't make that case are either lazy or complacent.

    One MNB reader responded:

    Wish your Facetime posting this morning would be seen in millions of homes, not to hassle grocers but to make the nutrition value argument.

    I'd love it if millions of homes would see it, too … but retailers can and should make the case themselves.

    Another MNB reader wrote:

    Got a chuckle from your message this morning. There is another factor that causes grocery stores to lose out to fast food restaurants. Recently went to dinner at our son’s house. My 8 year old grandson, wanted to know what we were having for supper.  His mom told him that we were having lasagna and he replied, “ I’m tired of eating groceries”, let’s go to McDonalds! 


    On another subject, from MNB reader Tom Murphy:

    Regarding the article about the new online shopping/delivery service announced by SEG:  With all due respect to you and Meredith Hurley, SEG's Director of Public Relations & Community, I believe the majority of customers could care less about the proprietary differentiation (in this case, mixing technologies) that occurs behind the curtain.  For myself, I believe the service quality is the differentiator and I doubt that SEG has a proprietary advantage on that!  Too late to the party and too much competition to call this proprietary no matter how you define it.


    And, regarding my CVS criticisms, MNB reader Annette Knapp wrote:

    First, our town of 8K is losing its only stand-alone pharmacy - a Rite Aid. There is a Giant Food Store across the street that seems to be eating its lunch. Folks on the neighborhood Facebook group have been warning people that they never had anything in stock at the pharmacy and to go elsewhere. They weren't wrong.

    Next town over is a CVS (two miles-ish away) - stopped in there about a month ago to pick up some Scunci hair ties. Pharmacies always have the best selection of hair do-dads. No customers up front. I go to check out and the cashier asks me if I'd like to use the self-check out that they just installed. Um, no - you're right there dude. So, he comes around to the self-checkout and checks me out from there instead of the register. I was not sure what to make of that, but it was bizarre. I felt like I was imposing on him during the 'splaining session. It makes me wonder how long that CVS will be sticking around too.


    Yesterday we took note of a New York Times story about manufacturers raising prices beyond their need to cover costs.  I commented:

    I have to think - in fact, I hope - that the companies taking advantage of their customers, feathering their own nests at a time when a lot of people are struggling, end up having to deal with consumer blowback.

    I have no problem with companies doing their best to cover their costs by raising their prices.  But if you use the moment to exploit customers in an effort to increase your own numbers, raise your stock price and - not coincidentally - increase your own compensation, then I sort of have a problem with you.

    On the other hand, if you are a company that understands that you are best served by being perceived as an agent for the consumer, then I'm on your side.

    One MNB reader responded:

    Manufacturers have had no choice of late but to raise prices.  Our company had 3 in the span of 12 months!  Fuel, labor, and supply chain costs have all gone up.  In normal periods, manufacturers can gain profits through greater distribution, innovation, or through manufacturing efficiency; all of which have long lead times and capital expenditure to come to fruition.  Some like to think it is all due to Corporate greed.  But if that were true, then why now?  Why not in other times or all the time.  The answer of course is competition in a system of Capitalism is that keeps corporate greed in check.

    What we have today are governmental and economic policies run amuck.  Modern Monetary Policy which embraces almost limitless borrowing and spending has come home to roost and finally been exposed.  Inflation simply put is too many dollars chasing too few goods.   COVID and Ukraine did not cause inflation, but how our government reacted to them did.  To many of our leaders were eager to pump money into our economy during COVID without thinking of the consequences.  And their brilliant fix?  Canceling student debt and the ironically named Inflation Reduction Act! Essentially to spend even more money, which is akin to putting out the fire with gasoline.  Inflation has triggered a massive Social Security increase.  Again, more government spending causing more inflation.  Labor is demanding more compensation, causing more pricing pressure and inflation.  We are in an Inflationary Death Spiral!

    The Fed, in raising interest rates, is battling both existing inflation but also additional Congressional spending policy.  I don’t see how we can avoid a recession before the Fed can get this inflationary death spiral under control.  Of course, another option would be to reduce government spending, but I don’t see the political will in either party to do so.  The real question is can we keep it from becoming a Depression the likes of which we’ve not experienced since the 1930’s.  We are not too big to fail or to avoid economic realities.

    So, if I understand you, everything everybody has done is wrong … except for the companies that seem to be raising prices beyond their need to cover cost increases.

    Look, at one level you are right - capitalism means that companies can do what they want.  Raise prices as high as the market will bear, and believe that there will be no repercussions in terms of brand equity or consumer acceptance.

    But as a consumer, I have a right to impose and encourage repercussions.

    That's also part of capitalism.


    More reactions to the Kroger-Albertsons merger…

    MNB reader Joe Axford wrote:

    Starting to think Albertsons may want to get regional buyers lined up, just in case...

    From another reader:

    I doubt these companies would have entered into this agreement if they didn’t feel they could get it done. If everyone recalls when Albertsons purchased Safeway they were required to divest approximately 150 stores and the FTC allowed them to divest to a company that had I believe maybe 20 stores so they went from 20 to a 170 overnight and I don’t think they made 6 months and guess who got the stores back? So there was no divesture. My point is I think both Kroger and Albertsons know how to get this done.

    Probably what Staples and Office Depot thought.  As well as Penguin Random House and Simon & Schuster.

    My point would be that both companies have lawyers and lobbyists who are going to make a lot of money arguing that they know how to get this done.

    But wishing doesn't make it so.


    Finally, yesterday MNB reported that there have been several stories out there about how Hooters is teaming up with NASCAR driver Chase Elliott on a new virtual chicken format that will deliver a variety of poultry dishes via Grubhub, DoorDash and Uber Eats.

    The items will be delivered from some 196 Hooters locations around the country, but will not be available in those restaurants.  The name of the ghost kitchen brand:  Chase Elliott's Chicken Tenders.

    I commented:

    I continue to believe that this is an interesting business model - using existing kitchens in restaurants to create new brands, and then using e-commerce to test their viability.  One can imagine that if this concept takes hold, the next step would be to create physical locations that can build on already-established brand equity.

    Though I have to admit that I'm not sure what Chase Elliott's chicken connection is.

    Hard to figure out why a brand like Hooters would come up with a new chicken concept and not call it Legs & Breasts.

    One MNB reader responded:

    Saying the chicken is good at Hooters is like saying you read Playboy for the articles. 

    The pandemic shut down our one and only local Hooters. Guess they couldn’t make their “restaurant” work just on carry out meals. 

    (Also, good riddance to this sexist, exploitative business model - ugh.)

    Who said the chicken is good?

    And who is arguing with you about Hooters being a sexist, exploitative business model?

    Published on: November 2, 2022

    •  In Game Three of the World Series, the Philadelphia Phillies used a five-home-run barrage to beat the Houston Astros 7-0.  The Phillies now lead the best-of-seven series two-games-to-one.