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    Published on: January 4, 2023

    It wasn't just Southwest Airline's flight schedule that went south over the holidays.  It also was the company's reputation … and deservedly so.  One Southwest pilot took to social media to offer an explanation, and it is one that I think should sound alarm bells for many businesses.

    Published on: January 4, 2023

    by Michael Sansolo

    Let’s be honest.  It's 2023, and we're all sick of Covid-19.  We're sick of it as an illness, as a memory, even as a topic of discussion.  New variants emerge, and the popular reaction is that we just want it all to end so we can get on with our lives.

    No such luck.

    The fact is that Covid-19 will have an extended and lingering impact on both shoppers and business.  Covid-19 is an old acquaintance that can’t be forgot.  Not yet.

    The Washington Post recently ran an interesting article on how the virus and the accompanying pandemic impacted the restaurant industry. There are a lot of parallels to the supermarket industry. After all, both sectors are seeking share of stomach.

    As the Post reported, the impact is felt in...

    •  Where people eat and how restaurants are changing to serve increased drive through service;

    •  How people order, especially the incredible growth of digital ordering;

    •  What people order and how orders have changed thanks to the bout of inflation still following the pandemic.

    Supermarkets, like restaurants, had to respond to these substantial changes in consumer behavior at heightened speed, while still coping with an array of other problems from supply chain breakdowns to labor shortages.

    It is something we've talked about a lot here on MNB over the past three years - the pace of innovation achieved by many businesses was almost unprecedented, largely because they didn't think of it as innovation.  They thought of it as survival.

    While I've talked to a lot of people in recent months who speak wistfully about moving on and returning to the way things used to be before the pandemic, the Post article makes it clear that this isn't possible.  Moving on means moving forward, and means accepting that, in terms of operations and customer habits and expectations, our world has changed.  For good.

    I'd suggest, in fact, that we have to do more than accept this fact.  We have to embrace it.

    Many of the innovations that occurred during the height of the pandemic actually served to strengthen and cement stores' connections to shoppers.  Remember, this was the time when stores became essential in new and, hopefully, sustained ways.  

    What passes for "normal" is constantly changing.  What also has to be "normal" is our businesses' ability to change and adjust and pivot as consumer habits do, and as new issues emerge.  There is continuing inflation to deal with, as well as a possible recession, persistent labor shortages and who knows what else.

    Whether it is a Happy New Year under such circumstances is up to each of us.


    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com.

    His book, “THE BIG PICTURE:  Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available here.

    And, his book "Business Rules!" is available from Amazon here.

    Published on: January 4, 2023

    From the New York Times:

    "For the first time, retail pharmacies, from corner drugstores to major chains like CVS and Walgreens, will be allowed to offer abortion pills in the United States under a regulatory change made Tuesday by the Food and Drug Administration. The action could significantly expand access to abortion through medication.

    "Until now, mifepristone - the first pill used in the two-drug medication abortion regimen - could be dispensed only by a few mail-order pharmacies or by specially certified doctors or clinics. Under the new F.D.A. rules, patients will still need a prescription from a certified health care provider, but any pharmacy that agrees to accept those prescriptions and abide by certain other criteria can dispense the pills in its stores and by mail order.

    "The change comes as abortion pills, already used in more than half of pregnancy terminations in the U.S., are becoming even more sought after in the aftermath of last year’s Supreme Court decision overturning the federal right to abortion. With conservative states banning or sharply restricting abortion, the pills have increasingly become the focus of political and legal battles, which may influence a pharmacy’s decision about whether or not to dispense the medication."

    The story goes on:

    "Mifepristone, which blocks a hormone necessary for pregnancy development, is authorized by the F.D.A. to be taken in the first 10 weeks of pregnancy, although many clinics and telemedicine providers have begun offering it up to 12 or 13 weeks into pregnancy, a step they can legally take because there is scientific evidence that the pills are safe and effective in that time frame.

    "The second drug in the regimen, misoprostol, has never been as tightly restricted as mifepristone and is used for many different medical conditions; it is easily obtained at pharmacies through a typical prescription process. Misoprostol, which causes contractions that expel pregnancy tissue, is taken 24 to 48 hours after mifepristone.

    "Tuesday’s action is a result of an agreement between the F.D.A. and the companies that make the pills. The agreement was worked out in negotiations that took about a year and considered issues such as whether to allow pharmacies to offer the pills in stores or only via mail order and how to keep the identity of prescribing doctors confidential to protect their privacy and safety, according to people familiar with the discussions."

    KC's View:

    I would expect that this will become a flashpoint in a lot of communities, as the political and philosophical debate over whether these pills should be allowed boils over in a way that puts stores with pharmacies right in the middle, whether they like it or not.

    Pro-choice advocates will demand that stores have these pills available, and anti-choice forces will pressure retailers not to carry them.  The debate will rage online, in pulpits and town meetings, probably in parking lots as demonstrations take place, and retailers that just want to take their of their customers may be forced to make decisions they'd rather not make.

    It is not going to be pretty.

    Published on: January 4, 2023

    Axios writes that "sidewalk delivery robots are cute and cool, but pilot tests in four U.S. cities found that it takes more than smart technology for a successful deployment."

    The story goes on:

    "The pilots — in Pittsburgh, Miami-Dade County, Detroit and San Jose — originally sought to examine the socioeconomic changes that autonomous vehicles might bring if widely deployed.

    "The project, supported by $5.25 million from the John S. and James L. Knight Foundation, intended to test the impact of passenger robotaxis, but researchers switched to automated delivery robots during the pandemic … The cities partnered with Kiwibot, a maker of sidewalk delivery bots, to test different use cases on real streets and to explore ways to engage the community in decision-making.

    "The pilots were slightly different in each city, but they shared common objectives: learn about the technology, educate the public, and collaborate with private businesses to refine robot deliveries.

    "What they found: In some cases, it wasn't the robot that failed, but the local infrastructure.  In Pittsburgh, for example, robots had difficulty navigating rough sidewalks with overgrown bushes.  In Detroit, robots had a hard time making it across wide boulevards before the light turned red."

    Axios notes that "automakers and tech giants are pouring billions of dollars into everything from sidewalk bots to self-driving cars and delivery trucks."

    KC's View:

    Somehow it is not surprising that the infrastructure is not in place to handle all this new technology.  Better roads, sidewalks and street crossings would make sense even if these new technologies hadn't come along, but we live in a nation where neglect of such things is commonplace.  Remedying the situation at a time of economic stress isn't going to be easy, but one hopes that all that infrastructure money will be spent somewhere that it can have real impact on people's lives, not just where it will make robots' path smoother.

    Published on: January 4, 2023

    Really good piece in the New York Magazine "Grub Street" column about a new restaurant format with big ambitions:

    "At any of Tacombi’s 11 outposts in New York, you can purchase carne-asada tacos and sautéed-mushroom quesadillas or guacamole and cold beer. Inside, the white-tiled rooms are uniformly pleasant. Whether you are at the store on Amsterdam Avenue or Bleecker Street or Austin Street in Forest Hills, you can find the same pineapple agua frescas and pastor breakfast tacos, which are — conveniently — 'served all day!' according to the starburst note on the menu.

    "You’d be forgiven for thinking that Tacombi is simply a collection of restaurants. It is that, but it is more than that. Tacombi is a surprisingly efficient delivery and catering operation. Tacombi is very good prepackaged tortillas that you can buy at Whole Foods as well as spicy-chicken burritos in the freezer aisle. Tacombi is a nascent empire, and this year will mark the start of a massive expansion across the country. A year ago, Tacombi announced that it had received $27.5 million in a funding round led by Danny Meyer’s Enlightened Hospitality Investments and revealed it would use that capital to expand to 75 locations over the next five years. Coming soon: Chicago, Connecticut, New Jersey, and Long Island. Tacombi could be the Shake Shack of Mexican food, except Shake Shack is merely a chain with enjoyable fast-food burgers, while Tacombi — according to its founder and CEO, Dario Wolos — is in the business of exporting Mexico to the entire rest of the world."

    The Tacombi business model is focused both on its own restaurants and grocery stores as venues in which its products can be purchased.  There also are reflections of the company's original New York City store, which was "never entirely about the food. It was a vibe with its strung-up lights and potted plants and Elizabeth Street customers perched attractively at folding tables on exposed concrete floors."'

    Meyer says that "the real value proposition of the company is not simply its tacos or even its tortillas but in its concept of 'Mexican Hospitality,' which … sounds suspiciously similar to 'good service.' Incoming Tacombi employees hear about the company’s 19 core tenets, including “Know Our Menu,” “Offer Guests Your Full Attention & Focus,” and “Be Better Every Day,” which are perhaps not revelatory in concept. But how many companies, really, offer a customer experience that is genuinely pleasant?"

    KC's View:

    I think this last question is a good one.  

    How many companies, really, offer a customer experience that is genuinely pleasant?

    I would argue that a lot fewer than the number that tell themselves that they offer a pleasant customer experience.

    Tacombi's eyes may be bigger than its stomach, but the ambitions suggest that this could be the kind of format that, to some level, helps to set customer expectations.  For me, any food format that looks to raise people's expectations and educate their palates is a good one.  I'm excited to see that Tacombi is coming to Connecticut - I did a quick check, and see that it will be opening soon in Westport, about a dozen miles from my house and, from all appearances, probably worth the drive.

    It also has a cool menu, which you can see here.

    BTW…

    It was interesting to read a piece in the New York Times about El Cholo, a landmark Mexican restaurant in Los Angeles that has been around for 100 years, "perpetuating the traditions and the tastes that have made El Cholo a destination for celebrities, college students and generations of Southern California families."

    Ron Salisbury, 89, has been presiding over the family-owned company since 1954, and there is a new generation of family members ready to take over.  Salisbury also makes the point that the restaurant continues to innovate - tinkering with recipes in ways that adhere to its traditional values but reflect evolving tastes - and grow.

    “It says something that after 100 years, we’re not limping to the finish line,” he says. “We’re doing even more aggressive things, positive things.”

    Which is the definition of competition.

    Competir es un verbo.

    Published on: January 4, 2023

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Forbes reports that "FedEx will offer customers an easier returns process, featuring wider access to a network of locations for dropping off unwanted goods using a simple QR code."  No packaging will be required.

    The story points out that "retailers have found that consolidating returns can increase efficiency and reduce costs by using fewer supplies and less labor to pack and ship the products. Ground transportation's consolidation process also generates fewer carbon emissions and leaves a smaller environmental footprint than shipping individual items back to retailers.

    "Customers are advantaged with a simplified return process. Shoppers are increasingly making buying decisions based on a retailer’s return policy, expecting returns to be free and easy."

    Sounds a lot like what Amazon offers … when we want to return something to Amazon, we just take the item and a QR code down to our local Whole Foods and drop it off.   It is amazingly convenient, and from all reports, is more efficient and sustainable for Amazon.


    •  Reuters reports that Amazon has "reached an agreement with certain lenders to provide the e-commerce giant an $8 billion unsecured loan.  The term loan will mature in 364 days, with an option to extend for another 364 days and the proceeds would be used for general corporate purposes."

    Published on: January 4, 2023

    •  Hy-Vee has announced that Donna Tweeten, the company's executive vice president/chief marketing officer/chief customer officer/chief of staff, has been named president, Hy-Vee, Inc., overseeing "Hy-Vee’s private brands, merchandising, marketing and digital initiatives. She will also oversee the operations of Hy-Vee’s new retail media network Red Media."

    The company noted that "Tweeten’s promotion marks the first time a woman has been named president of Hy-Vee."

    At the same time, Hy-Vee said that Aaron Wiese, president of Hy-Vee Healthcare, LLC, also has been named president, Hy-Vee, Inc., "responsible for the operations of all Hy-Vee’s healthcare and retail pharmacy locations, as well as Hy-Vee’s newest subsidiary Hy-Vee Healthcare, LLC. Wiese will also oversee new technology initiatives for the company and continue his leadership of overseeing several Hy-Vee subsidiaries, along with Hy-Vee’s supply chain and distribution operations across the company’s region."

    The company also said that Hy-Vee CEO Jeremy Gosch has been named vice chairman of Hy-Vee’s board of directors.

    Published on: January 4, 2023

    Got the following email from MNB reader Duane Kolsrud regarding Starbucks' decision to make freebies harder to earn in a revised rewards program:

    Doubling what it takes to get a reward while inflation is already hurting people is a terrible idea.  This is a time when Starbucks could step up and show their loyalty to their best customers(heck, lower the thresholds) but instead some accountant got involved and will ruin this program.  Good luck getting new customers to play while you may see a fall off from your best customers.  It's about retaining your best customers, you know, the one's that have been loyal throughout the past years during lockdowns. Loyalty programs always suffer when economy is struggling when in reality it should be the tool that helps keep customers returning. Dumb!!!

    Good point.  I hadn't thought of it within the context of inflation.


    Regarding the plethora of Amazon Fresh stores reportedly scheduled to be opened in Michigan, one MNB reader wrote:

    I can tell you there is one location already built and ready to load in the Rochester area (it's been there for a while too.)

    Also - we see ads for Amazon Fresh during Thursday night football (I live in Oakland County) and have to assume they are targeted to this region (or regions that have locations.)

    Having locations chosen and "ready to load" is one thing … but there seem to be more than a few of these locations where Amazon, at least for the moment, is delaying actual openings.


    And, responding to our piece about Dollar General charging all its vendors basically 10 percent of expected/projected  2023 purchases by a new warehouse that it is opening, and then deduct that amount from whatever invoices the vendors submit, one MNB reader wrote:

    I had to smile at this article, as this practice is neither the most unusual or the most egregious between grocers and vendors.  The big guys, e.g., Walmart, Kroger, Albertsons/Safeway, Amazon, and international players to a lesser degree, have been perpetuating similar practices for years…just add this one to the long list which includes promotional monies, slotting allowances, spoilage charges, etc.  What does surprise me is that DG made this so public…usually this stuff is deeply buried in individual contracts so it never sees the light of day.  Talk about a lack of transparency!

    In fact, think back on ECR (Efficient Consumer Response...for your younger audience).  You can ask Michael Sansolo as he was in the thick of it, but what parts of ECR never made any headway?  Of course, it was anything like promotions, invoicing, and special fees that could reduce the grocer’s leverage over the vendor.  Now, to be fair, this is a two-way street as the vendors do some of this as well.  It is just that the grocer has the downhill lane.

    Published on: January 4, 2023

    I just want to thank the folks at Webstop for all their hard work on the MNB redesign - I love the way it looks, the new logo, and I'm energized about MNB's future even more than 21 years after the very first edition.  

    There will, of course, be glitches.  And I hope that you'll share any that you find with me. We'll work those out as we go along, and appreciate your patience as we endeavor to make MNB both more functional, more illuminating and more useful to you.

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