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    Published on: March 2, 2023

    The Las Vegas skyline has a certain amount of dissonance, I think it is fair to say, but nothing prepared me for what I saw when, after a few days in the city for the National Grocers Association (NGA) Show, I finally looked out my hotel room window.  (Had aliens landed?)

    Published on: March 2, 2023

    by Kevin Coupe

    I've gone on the record here - one might say I've shown my true colors - as someone who will give up my manual transmission when they pry it from my cold dead fingers.

    The evidence seemed to be that I was in a shrinking minority, but a Wall Street Journal story (that many of you emailed to me) gives me hope:

    "Stick shift loyalists aren’t taking the electric-car revolution lying down.

    "Following a decadeslong decline, three-pedaled vehicles are experiencing a modest but real resurgence. Manuals accounted for 1.7% of total new vehicle sales in 2023, according to data analytics company J.D. Power, up from 1.2% last year and a low of 0.9% in 2021. The Autotrader marketplace reports a 13% rise in page views for new manual cars in 2023 compared with this time last year.

    "Manual sedans no longer necessarily get better fuel mileage, cost less or accelerate faster than automatic ones do, auto pros say. Drivers who are sticking with sticks say that taking control of their clutches not only makes driving more fun but also provides a counter to an increasingly automated world—especially as more buyers shift to mostly single-gear electric vehicles."

    According to the story, "Mini recently added three new models to its lineup of stick shifts, with four more coming this month. Manual is now the only option on three of Mazda’s five versions of MX-5 Miata. Acura brought a manual option back to the Integra in June after discontinuing stick shifts in its lineup in 2015. The company is releasing a higher-performance Integra with no automatic option later this year."

    But here's what's really interesting - it doesn't seem to be curmudgeons like me who are driving the resurgence:

    "These cars entice younger consumers in the same way that vinyl records and point-and-shoot cameras do, manufacturers say. Over half of those who opted for manual Integras are between 18 and 46 years old, and about a quarter of those who bought manual Miatas in 2022 are between 18 and 35, the companies say."

    One of the advantages of having a young person driving a manual transmission, parents say, is that their kids can't text if they need both hands to drive.

    The Journal notes that "manufacturers acknowledge that traditional stick shifts might not be around forever as they take their fleets electric. Manufacturers sold 43 different manual models in 2022, according to J.D. Power, compared with 69 in 2019. While a few EVs do have more than one gear, auto makers are still figuring out how to translate the experience of maneuvering a manual to their electric car lineups more broadly."

    For almost 30 years, my cars - all ragtops - have had manual transmissions - two Miatas, and now, a Mustang.  Before that, we actually had a Toyota Camry station wagon with a manual transmission (which admittedly wasn't the best idea, since we also had kids riding in it).  And for a brief time I had an old Triumph Spitfire with a manual transmission.  (Which actually was the only part of the. car that worked - the electrical system was horrible, and I finally had to sell it because it was too expensive to keep on the road.  When I bought my first Miata, it was like driving a Triumph that actually worked.)

    I'm happy about the generational resurgence that manual transmissions are experiencing.  The Journal story is an Eye-Opener, reflecting a trend that is rooted in the love of actual driving, when you can sense the road and feel the gears and even, in my case, the wind and sun and the promise of a good day.

    Published on: March 2, 2023

    Advertising Age reports that "eight years after merging with Safeway and five months after announcing a planned deal with Kroger, Albertsons is unifying marketing for its two dozen grocery chains through a new campaign that offers a matching theme while each brand retains its own name.

    "For the first time, the Boise, Idaho-based retailer, known for grocery chains such as Jewel-Osco, Acme and Tom Thumb, will promote its 24 grocery store brands under one marketing message.

    "Called 'Sincerely,' the brand positioning functions as a promise to customers that Albertsons can provide the products and services needed for their everyday lives. A series of videos showcase different types of cuisine and family gatherings as a voiceover personifies food."

    According to the story, "Albertsons’ new strategy comes as shoppers continue to evaluate their grocery buying amid record-high price increases. The costs of everyday essentials, such as eggs, have soared by triple-digit percentages in recent months and retailers need to provide compelling reasons for customers to shop at their stores. Recent reports suggest consumers are turning to alternative lower-price options such as dollar stores for groceries."

    Ad Age points out that "the campaign includes in-store ads, digital video, audio and display ads, as well as local TV spots in its various markets … All employees featured in the campaign are actual Albertsons staffers."

    KC's View:

    It makes absolute sense for Albertsons to unify its broader marketing message in this way, though it also would make sense to allow for local tweaks in places where it makes sense.  I would hope that the divisions would be smart enough to understand that a marketing message like this should be centralized (and if they resisted, the powers that be in Boise would step in and make it so).

    It is interesting timing.  While the Ad Age story says that work on the campaign began before the announcement of the proposed $24.6 billion deal with Kroger, a more timid approach would've been to wait and see what happens with the merger.  That wouldn't be smart, though - Albertsons has to keep moving forward, spending money and competing as if the deal is not going to be approved.  For one thing, it might not be.  Plus, if regulators got the sense that Albertsons is not competing aggressively and not making the moves it had committed to before the merger, they might make the case that this actually proves that deal is bad for competition.  That could be a death knell for the acquisition by Kroger.

    Published on: March 2, 2023

    From the New York Times this morning:

    "Since 2019, at least 75 communities have voted down proposed dollar stores, while roughly 50 have enacted moratoriums or other broad limits on dollar store development, according to a new report by the Institute for Local Self-Reliance, an organization that is critical of corporate retailers and their impact on communities.

    "By comparison, from 2015 to 2018, about 25 communities voted down proposed dollar stores while only six enacted moratoriums or ordinances limiting their growth.

    Although the number of blocked stores is much smaller than the thousands that Dollar General and similar chains have opened in recent years, the movement against the industry has created an unusual group of allies. On many other issues, they disagree, but they are united in their fight against dollar stores.

    "Rural, Republican-leaning communities in places like southern Virginia and North Carolina are pushing back against dollar stores … And leaders in cities like Toledo, Ohio, and Birmingham, Ala., have also mounted opposition, saying the stores are fueling crime and unhealthy food choices. Across Georgia, 18 cities and towns have restricted dollar store development, according to the think tank’s report."

    There also is a sense in some of these communities that employees are being exploited by dollar store management.  "The stores typically operate with lean staffing, and their employees, by some measures, are paid at the bottom of the retail industry’s scale. According to a survey by the Economic Policy Institute, a liberal think tank, 92 percent of Dollar General workers earn less than $15 an hour, lower than many other companies surveyed, including Burger King, Walmart and Dunkin’. About 20 percent of Dollar General workers earn less than $10 an hour.

    "At the same time, the company is highly profitable. In December, Dollar General said its quarterly operating profit had increased about 10 percent from a year earlier while net sales had increased 11 percent, to $9.5 billion. Dollar Tree, which also owns the Family Dollar chain, is posting strong results as well. On Wednesday, Dollar Tree said its profit in fiscal year 2022 increased 23 percent to $2.2 billion and net sales rose 7.6 percent to $28.3 billion."

    KC's View:

    The fact is that dollar stores are in an enormous growth phase - in 2021 and 2022, more than a third of all store openings in the US were by dollar stores. The Times writes that "Dollar General alone opened 2,060 locations during those years, far more than any other retailer, according to Coresight Research, and the company now operates 19,000, more than twice as many as Walmart and Target combined."

    Another reality in the current economic environment - inflation is a significant problem, and people have a recessionary mindset even if the country is not in a recession - is that dollar stores in a lot of ways are becoming the benchmark against which more traditional retailers are having to measure themselves in the marketplace.  

    One of the ways that retailers need to do this is to stress value, not price - they're not the same thing.  Sure, they have to be as sharp on price as possible, and have to make sure that they give customers strategic wins whenever possible, but they also need to emphasize that sometimes cheap food is not the best value.  And, they have to point to the local folks they employ and the higher wages they pay as contributing back to the community.  I'd be putting these folks front and center of my marketing efforts, and getting aggressive about smacking around the dollar store companies as being bad for their employees, bad for their customers, and bad for the communities they serve.

    Of course, there are a lot of communities where dollar stores are the only option, and so this suggestion is irrelevant.  And I suspect there are some places out there facing Hobson's choice.

    Published on: March 2, 2023

    From the Associated Press:

    "A federal labor judge has ordered Starbucks to reinstate seven fired workers, reopen a shuttered location and stop infringing on workers’ rights after finding that the company violated labor laws 'hundreds of times' during a unionization campaign in Buffalo, New York.

    "The decision issued late Wednesday by Administrative Law Judge Michael Rosas of the National Labor Relations Board requires Starbucks to post a 13-page notice listing its labor violations and workers’ rights in all U.S. stores.

    "The order also requires Starbucks’ interim CEO Howard Schultz to read or be present at a reading of employees’ rights and distribute a recording of the reading to all of Starbucks’ U.S. employees.

    "Rosas cited Starbucks’ 'egregious and widespread misconduct' in his 200-page decision, which consolidated 35 unfair labor practice complaints at 21 Buffalo-area stores filed by Starbucks Workers United, the labor union organizing Starbucks’ stores. Rosas found that Starbucks had threatened employees, spied on them and more strictly enforced dress codes and other policies."

    KC's View:

    I suspect that Starbucks will use every legal option available to it to fight this decision, and certainly won't want Schultz to be involved in an "employees' right" reading.

    But I'm really glad that the judge made this part of his decision - Schultz has been the face of Starbucks' anti-union activities, except when the US Senate wants him to come in to testify.

    Here's how a recent CNN story framed the Schultz position:

    "When Schultz re-joined the company last year, he spent months visiting with employees as part of a listening tour that helped him develop a new roadmap for the company, which he said had 'lost its way.'

    "'I’ve talked to thousands of our Starbucks partners,' he told (CNN reporter Poppy) Harlow. 'I was shocked, stunned to hear the loneliness, the anxiety, the fracturing of trust in government, fracturing of trust in companies, fracturing of trust in families, the lack of hope in terms of opportunity.'

    "American companies are 'faced with unionization because [workers are] upset, not so much with the company, but the situation.'

    "Still, Starbucks made some specific missteps, he said, during his absence.

    "Before he became interim CEO last year Schultz served in the top spot from 1987 to 2000, and then again from 2008 to 2017. But even when he had ceded the role for the final time, he remained involved as chairman of the board — until 2018, when he retired … Especially during the pandemic, 'some decisions were made that I would not have made,' he said, without specifying which. When asked for more details, a spokesperson pointed to the resumption of training programs in 2022.

    "'As a result of that, I think people did lose trust in the leadership of the company.'

    "Efforts to unionize, he said, were spurred 'because Starbucks was not leading in a way that was consistent with its history.'

    "Still, he sees the union as a relatively minor issue that represents the desires of a small group of people."

    Okay, let's deconstruct this a bit.

    First, I'm glad he talked to thousands of Starbucks employees during his listening tour.  I'd love to know if he spent more time talking or listening.  And, when he was listening, was he actually hearing.

    I'm sure workers are upset with lots of things, but I wouldn't discount the possibility that they are as upset with their employer as much as anything else - especially since Schultz's sense of personal moral superiority is based on the idea that the company did dumb stuff when he wasn't there, stuff he wouldn't have done had he remained involved.

    Which, by the way, is nonsense.  For example, one of the things that has upset employees is the fact that the stores were not built for the business they were doing.  For example, they were built for a world in which hot drinks dominated, but cold drinks now are more popular.  I'd be willing to bet that this shift already was underway the last time Schultz was CEO, and isn't it the job of a great CEO to be able to stay ahead of the wave?

    The next CEO (what the hell is his name again?) will have a real challenge.  He will have to have his eyes firmly fixed on the future, but he'll also have to have eyes in the back of his head, since Schultz's shadow will be looming.

    Published on: March 2, 2023

    Arts and crafts chain Michael's has announced that it is launching a new online marketplace that will use third-party sellers to triple the number of products it makes available to shoppers - at the moment, the SKU count stands at 250,000, and the marketplace should add another 750,000.

    The move is part of what Michaels has been calling its "digital transformation."

    For the moment, admission to the marketplace for sellers to invitation-only, limited to "experienced, professional sellers in the arts and crafts space." 

    All shipping, refunds and return policies will be up to the individual marketplace sellers.

    KC's View:

    Timing is everything, and in this case, Michaels may be a little late to the party.

    Just got a press release saying that "according to Digital Commerce 360’s 2023 Global Online Marketplaces Database, consumer spending through platforms of the big four - Taobao, Tmall, Amazon and - alone represented an astonishing 77% of total GMV by the Top 100 online marketplaces globally."

    In other words, if you are not one of the global big four, you've got some work to do to attract consumer spending.

    This isn't to say that other companies shouldn't try.  Certainly Walmart is developing its own marketplace offering, and Michaels has a big enough customer base that maybe it can make this work.

    But I'd also argue that while Michaels believes that leaving things like shipping up to the individual vendors will be less expensive and give it deniability, it may in fact not be so.  Shoppers who make purchases on Michaels' marketplace may not make the distinction, and mishaps, mistakes and even malfeasance could erode its brand equity.

    Published on: March 2, 2023

    The Wall Street Journal reports that McDonald's new celebrity-sponsored meals, "which have generated strong sales for the chain, are drawing criticism from franchisees who say some of the artists don’t reflect the company’s values."

    For example, "Some owners said a number of McDonald’s locations have declined to promote the current Cardi B and Offset meal, because of concerns about being associated with the artists.

    "In messages sent to the U.S. division in recent weeks, several McDonald’s franchisees said that the artists’ lyrics and lifestyles aren’t aligned with the company’s brand. Some owners wrote that the chosen celebrities could erode McDonald’s family-friendly image, and urged other franchisees to remove advertising and merchandise associated with the Cardi B and Offset meal in their stores."

    The Journal notes that it is unclear how many of McDonald's US franchisees have objected.  "McDonald’s said Tuesday that the chain has received widespread support and excitement from owners and their restaurant employees regarding the Cardi B and Offset meal. The company said the couple’s promotion was meant to focus on love and celebrating special moments."

    And, most important, the celebrity-endorsed meals apparently are driving sales increases … and so some franchisees are having to pass on big fat checks and big large bills, simply because things are a little bit too complicated.

    KC's View:

    It is a big and polarized country, and it is no surprise that some celebrities are going to be anathema to some people.  This is the world in which we live.

    To be honest, there are some of us who are going to have no idea.  I knew that Cardi B was a rapper, but I didn't know that some of her songs had "objectionable lyrics" until I read it in the Journal.  I also didn't know - and I know I'm going to get grief for this - what an Offset was.  A band?   A person?  (I had to Google the name to find out.)

    Published on: March 2, 2023

    •  From the Wall Street Journal this morning:

    "Instacart Inc. is adding OpenAI’s ChatGPT chatbot technology to its grocery-delivery app, joining a growing list of companies that are turning to the humanlike artificial-intelligence language tool in efforts to boost customer services, marketing and other automated tasks.

    "Instacart will use the chatbot to power a new search engine designed to respond to users’ food-related questions, such as asking for recipe ideas and ingredients, or healthy meal options, the San Francisco startup said Wednesday. By tapping ChatGPT’s language software, the search engine’s responses will come in the form of a dialogue, rather than a list of search-engine results, Instacart said. It expects to roll out the new feature, called 'Ask Instacart,' later this year, the company said."

    The Journal writes that "by integrating Instacart’s own AI software with ChatGPT, the new search tool will tap data from more than 1.5 million products stocked by some 75,000 grocery stores in Instacart’s partner network."

    Published on: March 2, 2023

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  The New York Times reports this morning that "five leading supermarket chains in Britain have limited the number of some vegetables that customers can buy, deepening the pressure on policymakers to confront the shrinking supply of salad ingredients.

    "Last weekend, Lidl, the German discount supermarket chain, said it was limiting the sale of cucumbers, peppers and tomatoes to three per customer, joining four other chains — Tesco, Asda, Morrisons and Aldi — that have capped the sales of some produce. Lidl said there was good availability in its stores and that the measures were precautionary."

    The reason?  The Times writes that "frosty temperatures in Spain, the primary supplier of British vegetables, have damaged crops, particularly in the Spanish province of Almería, where tomato sales were down 22 percent in the first two weeks of February, compared to a year ago, according to Fepex, an organization representing Spanish producers and exporters of fruits and vegetables. Cucumber sales fell 21 percent and pepper and eggplant sales fell 25 percent, the organization said."

    The story notes that the UK has seen more availability issues than other European countries because the chains there have been focused on keeping prices low - an unwillingness to raise prices has simply led to a shortage of produce.  Elsewhere in Europe, supermarkets "have been more willing to pay higher prices for vegetables in short supply, earning them preferential treatment from suppliers."

    •  BrightFarms announced that it "is expanding with four new regional greenhouse hubs offering sustainably grown leafy greens to more people across the Eastern and Central U.S. The new locations will begin shipping to retailers in 2024 to help fulfill increasing demand. This expansion and commitment to innovation is expected to set BrightFarms up for 10x revenue growth … Construction is underway on the first regional hub in Yorkville, Illinois, and BrightFarms will break ground on similar facilities in Macon, Georgia and Lorena, Texas this summer, followed by another hub in the Northeast later this year. Each location is strategically positioned near a major metropolitan area, and has a combined up to 200-acre footprint with the ability to produce approximately 150 million pounds of leafy greens per year once complete."

    Forget Texas and Georgia … maybe BrightFarms ought to think about building facilities outside London.

    •  NBC News reports that "the Department of Homeland Security has widened its investigation into migrant children found cleaning slaughterhouses and is now working with the Justice Department to examine whether a human smuggling scheme brought migrant children to work in multiple slaughterhouses for multiple companies across multiple states, according to two U.S. officials familiar with the investigation.

    "At the heart of the investigation is determining how Central American children, some as young as 13, wound up working dangerous jobs that are legal only for American adults by presenting identification stolen from U.S. citizens, the officials said. 

    "Last month, the Labor Department found that Packers Sanitation Services Inc., known as PSSI, employed 102 children at 13 slaughterhouses across eight states. The children were cleaning blood and animal parts off the floor of meatpacking plants by night and going to school by day, the Labor Department investigators said … So far the investigation is focused on smugglers who may have provided the children with false identities and possibly led them to dangerous jobs. The companies themselves are not targets of the investigation, the officials said."

    Published on: March 2, 2023

    Executive Suite is sponsored by Robin Russell Executive Search.

    •  The USC Marshall Food Industry Management (FIM) program announced that will honor Kevin Curry, president of the Southern California Division of Albertsons, Vons, and Pavilions, has been named its 2023 Executive of the Year. 

    The announcement notes that "every year the USC Executive of the Year award is presented to an individual food industry executive who has demonstrated extraordinary leadership and commitment to education. Curry is both a Food Industry Management Program graduate and a USC Marshall MBA Alumnus."

    “Kevin has partnered with USC Marshall for the past 23 years to inspire and motivate future leaders for our industry,” said Dr. Cynthia McCloud, director of Marshall’s Food Industry Programs. “We share a passion for encouraging those in our span of care to go back to school and complete or enhance their education journey so they are prepared to help their companies compete in this rapidly changing market. 

    •  Kohl's announced that it has hired Dave Alves, most recently president and chief retail officer for Bealls Retail Group, to be its new president and chief operating officer.

    Alves previously held leadership roles at TJX Canada and TJX Europe, Hudson’s Bay and Sterling Shoes.

    Published on: March 2, 2023

    Yesterday I had a story in MNB that took note of a Fox News report that the Attorneys General of 19 states "warned major retailers against the Food and Drug Administration’s (FDA) attempt to let pharmacies mail out the abortion pill, and said doing so would subject to legal action from the states."

    At issue is the reading of a federal law that they say prohibits the selling of mifepristone by mail.  Fox News wrote that "the Biden administration in early January developed a plan to change an FDA rule in a way that would allow companies with a retail pharmacy to apply for a certification to distribute by mail a two-step abortion-inducing drug.

    "Prior to the rule change, mifepristone, the first pill used in the two-part abortion process, could be dispensed only by some mail-order pharmacies or by certified doctors or clinics."

    The Attorneys General essentially are warning the retailers - including Costco, Walmart, Kroger, CVS, Walgreens and Rite Aid - that they can expect legal action if they abide by the changed FDA rule, which is likely to be challenged in the courts.

    It was, therefore, a relevant story to a segment of the MNB readership.

    I commented, in total:

    This is exactly where retailers want to be - caught in the crossfire during a culture war.  


    Cleary there are different opinions about federal law.  I have no idea how retailers should navigate this particular landmine-laden landscape, except that, if choices must be made, they probably should do their best to satisfy most of their customers, choosing the reading of the law that supports that position.  The courts then probably will sort it all out, but retailers can be reassured that they put their shoppers first.

    MNB reader Steve Anvik sent me the following email:

    “Choose a path the supports the majority of their customers”? Yikes, besides our differences in viewpoints re: abortion ending a life - why from a business POV would you advocate placing a company in the crosshairs of a state AG looking to make legal precedent?? Your true colors, which you deny, are showing. I dare you to print this view.

    Well, first of all, you don't know me very well. I would've posted this email even without the dare. 

    Second, I don't think I am advocating that those companies should be "in the crosshairs of a state AG looking to make legal precedent."  Those Attorneys General are doing that.  it is then up to the companies to decide how best to react.  I would argue that you have to advocate for your customers, though I would acknowledge that on this issue, taking any position creates the likelihood that the other side will be inflamed.  Which is exactly what the Attorneys general are counting on.

    This is not the place for an abortion debate.  The reasons I made the point about retailers needing to do their best to satisfy most of their customers is that a) customer-centricity is the most important value for a retailer that wants to be essential, and b) surveys show that there is roughly a 60-40 split between U.S. adults who say abortion should be legal in all or most cases (61 percent according to the Pew Research Center) and those who think abortion should be illegal in all or most cases (37 percent according to Pew).

    This makes it harder for these retailers, not easier.  I do not envy them their position, whatever decisions they make.

    Finally, I wasn't aware I'd ever "denied" my "true colors," whatever the hell that means.  I think I'm pretty much of an open book.

    Weighing in on last week's discussion about store employees who don't stop shoplifters, one MNB reader wrote:

    A lot of the reluctance of grocery employees to stop shoplifting is because the management forbids the staff to actively stop shoplifters for fear of injury to the employee or customers or misidentification as a shoplifter. Employees have been fired if they confront a suspected shoplifter.

    I completely understand that.  In the case we were discussing, though, the employee made a decision not to intercede because of a belief that the shoplifter needed the food more than the retailer needed the money.  I simply don't think that this is an ethical decision - it was not the employee's money, and not the employee's decision to make.

    On another subject, MNB reader Monte Stowell wrote:

    Regarding your missive today regarding Target’s performance. It is plain and simple why their financial performance numbers were not better. Go onto a Target and look at the in stock position up and down the aisles. The out of stocks are horrendous. I would think Cornell would be having meetings with all the category managers and buyers in all departments and find out what the bigger issues are and how they could get back into stock sooner rather than later, especially in the food departments. The out of stocks IMHO, in the food department, are the worst of any major retailer here in the NW. 

    Regarding the bananas that are packaged so that there are items of varying ripeness…

    … MNB reader Celeste Kososki wrote:

    I had no idea that I was so cutting edge?  I have been buying “orphan” bananas in various stages of ripeness for more years than I can count. 

    I don’t even put them together in a produce bag unless I have to so I can avoid “ripening” them on the way home if my trip gets too long or the weather is too hot.

    And they don’t “live” near each other on my kitchen counter either.

    That’s the good news.  The bad news is that there isn’t much banana bread around my house these days. . .

    And finally, this email from MNB reader Rich Heiland:

    My first reaction to restaurants offering subscriptions was "cool." But then I thought about where I live, right in downtown West Chester, PA. I have something like 25 eating and drinking options with a few blocks of home - everything from coffee shops to bagel places to pizza to bars to fine dining. I don't know that I would subscribe to just one. We have lived here more than two years and there are still so many places with a walk, or even a short drive, that we have not sampled. Variety is the spice of life...

    Fair point.

    I agree with you about trying different places.  But I always think about what used to be Etta's in Seattle, and how important it was for me to have what the Irish call a "local" when I was in town.  I liked trying other places, but I loved being a regular, even if one who lived 2,894 miles away.  (But who's counting?)