Today, I engage in an extended conversation with Lisa Sedlar, the founder of Green Zebra, a "healthy convenience store" that looked to combine the DNAs of Whole Foods and 7-Eleven. Sedlar announced a few weeks ago that Green Zebra would be going out of business, and she closed the doors for the final time last week. Now, just days later, Sedlar was generous enough to spend some time with me via Zoom, talking about the reasons Green Zebra was unable to survive and what she has learned from the experience.
If you'd like to listen to our conversation as an audio podcast, click below.
Yesterday, while out running errands, I went into our local Starbucks to pick up a latte for Mrs. Content Guy. I'd ordered it via the mobile app, and was told that it would be ready at 12:09 pm.
It wasn't. I hung out in the store for about 10 minutes waiting for it to be ready.
It was a mild annoyance, but I could tell the lone barista was working hard to keep up.
I also noticed that the floor was pretty dirty. Again, a mild annoyance. But there weren't a lot of employees working, and so I just figured they didn't have enough staff to keep things clean.
But then I saw a sign behind the counter, and took a picture:
It seems to me that there are two things wrong with this sign.
If these Reserve Coffees have "just arrived," why are they sold out?
Why the hell is there a sign for "just arrived" Christmas blend posted on March 27?
I went home with the coffee and told Mrs. Content Guy about my experience. We agreed that the delay and the dirt could be attributed to staffing issues, but then she said:
Those two are people problems. But the sign is a stupid problem.
I agree. I wouldn't blame the overworked staffers, though. I'd blame whoever is the store's manager, and I'd blame whoever the division managers are - they should be in the store and paying attention to such things.
They may be in the store, but they clearly are not paying attention.
I'm tempted here to suggest that Howard Schultz would blame this on Kevin Johnson (who both followed him and then preceded him as CEO), but that would be to focus too much on the past.
Today, Laxman Narasimhan is the Starbucks CEO.
He's made a big deal about how he wants to streamline the number of cups and lids, the variety of which he sees as unworkable, and how he plans to work in the stores as a barista once a month so he can stay in touch with the front lines.
All of which is fine, but it doesn't address what I would call the nobody-gives-a-damn syndrome that I think this Eye-Opening sign reflects.
Last week's story about Narasimhan finally taking over the CEO job quoted him as saying, “Why it is so aggravating to get a 'simple' cup of coffee," suggesting that is something he wants to address.
One MNB reader wrote:
The only "simple cup of coffee" served at Starbucks is a “drip” coffee, which is a small percentage of total drinks….
The point being that maybe the new CEO is focused on the wrong things. Part of the problem at Starbucks is that 7 out of 10 drinks ordered are cold drinks, which the stores are not built to make and serve at that volume. Simple cups of hot black coffee simply aren’t the real issue.
The real issue, I'd argue now, is nobody-gives-a-damn syndrome.
One more point, if I may.
The retailers reading this story and seeing that sign ought to take it to heart, and immediately go out and walk their stores. Don't take it for granted that your stores don't suffer from nobody-gives-a-damn syndrome. Go find out. Check out every sign, every wall, every aisle and every department.
Take pictures. Make sure the problems get fixed. And see the problems not as a product of lackadaisical employees, but as a result of your own leadership. It is easy to blame others, and much harder to take the responsibility. But if you do the latter, and double-down on creating a culture that actually gives a damn, then that will be some level of leadership.
The Information reports that as "returns have become a costly problem for the e-commerce industry more broadly after skyrocketing during the pandemic," a new feature introduced by Amazon shows that it is not immune from the problem.
According to the story, "Amazon in recent months has started warning customers that an item they’re about to buy has been 'frequently returned,' suggesting customers check 'the product details and customer reviews' before they purchase." Amazon also has "raised the fees it charges sellers using its fulfillment services earlier this year, in addition to often charging sellers an additional processing fee for 'unfulfillable' inventory that can’t be resold after return. The new policy comes as Amazon is grappling with a sharp slowdown in e-commerce sales, causing it to trim costs and lay off staff."
The Information notes that "Amazon’s return policy generally allows customers to return new and unused items for 30 days after purchase, including by dropping them off at Whole Foods stores. While Amazon’s policy helped free returns become commonplace for e-commerce retailers, it’s resulted in mounting costs for sellers."
The story notes that it appears that shoppers who buy from third-part sellers "on Amazon are more likely to return items than shoppers from other channels, most likely due to Amazon’s easy checkout, which requires just a few clicks to complete, and its quick Prime shipping."
KC's View:
So here's a crazy concept. Stop selling items that are "frequently returned," either because of poor quality or crappy reviews.
Sure, that may be at odds with the whole "everything store" thing. But a lot of things that Amazon is doing these days don't seem consistent with its traditional approach, at the cost of its vaunted customer-centric values. This would be something that Amazon could do that would serve its shoppers better - a little curation of the merchandise might be a welcome bit of customer service.
BTW … I'm not sure how bad the costs are, but I'll bet they're high, and I'll be they're also high on the list of things that Andy Jassy wants to trim. So look for Amazon to make it a little less easy or a little bit more costly for shoppers to make returns.
MNB reader Daniel McQuade sent me a note yesterday that pointed out how Jeff Bezos, a long time ago (and seemingly in a retail galaxy far away) said:
"Amazon is not too big to fail. In fact, I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years.”that "one day, Amazon will fail, but our job is to delay it as long as possible."
Daniel observed, with some logic, that at the moment the priority at Amazon isn't focusing on the customer, nor is it on innovating faster and more aggressively than anyone else. Rather, the focus seems to be on delaying the expiration date.
There is a new survey out from Incisiv, conducted in collaboration with FMI-The Food Industry Association, concluding that "74% of grocers believe that digital shopping has made shoppers less loyal … 88% believe that a poor third-party experience negatively impacts shopper loyalty … (and) 76% of grocers believe that a poor web and mobile experience reduces shopper loyalty."
According to the report, "Despite these challenges … improving shopper loyalty has become a critical aspect for grocery retailers. According to the report, 71% of grocers say that improving shopper loyalty is a C-level priority in 2023. With the rise of digital grocery sales, it is more important than ever for grocers to prioritize technology and infrastructure investments to stay ahead of the competition and meet the evolving needs of their shoppers."
The report, entitled “Shopper Loyalty in the Digital Age,” focuses "the importance of offering a seamless omnichannel experience for shoppers to foster loyalty, including providing a well-designed digital platform, integrating with digital channels, and offering personalized experiences that meet the needs and expectations of individual shoppers."
KC's View:
It is an interesting set of conclusions that should not surprise anyone. If I told you that 74 percent of grocers say that a poor store experience makes shoppers less loyal, you wouldn't blink an eye - in fact, we'd all probably wonder what the hell the other 26 percent of grocers are thinking. Or smoking.
In 2023, it should not shock anyone that customers are more loyal to shopper-centric, integrated retail experiences that speak to what they need and want.
One thing I would point out is that the grocers who blame "a poor third-party experience" may have only themselves to blame. These grocers - often for legitimate reasons, since they needed to find fast solutions to immediate problems during the pandemic or because they were concerned about Amazon/Whole Foods - outsourced their e-commerce business, but didn't maintain enough of a hands-on approach going forward.
Even if third parties are facilitating elements of e-commerce programs, retailers have to own the whole thing, since it is their name on the door and on the website. Customers, in the end, don't really care who is really to blame. They attribute their problems to the retailer with which they were doing business, and, if pushed hard enough, move on.
Wakefern Food Corp. the nation’s largest retailer-owned cooperative, said yesterday that Mike Stigers - since 2019 the CEO of UNFI-owned Cub Foods - has been named the company's new president.
Stigers will take on the role effective June 1. Joe Sheridan, who announced his retirement as Wakefern president last year, will remain with the company through the end of the year to assure a smooth transition. Sheridan has been with Wakefern for almost a half-century, serving as president for the past 11 years.
Wakefern’s Chairman Joe Colalillo said in a prepared statement, “Mike brings with him five decades of industry leadership, proven success and respect among his peers and the supplier community. Wakefern will benefit from that broad knowledge base and leadership experience … On behalf of the board of directors, I want to thank Joe Sheridan for his decades long dedication to Wakefern and for his role in the search and selection process – it has been invaluable."
Before taking on the CUB CEO job, Stigers spent eight years at SuperValu, beginning in 2011 as the president of Shaw’s/Star Market in New England. In 2013, he went on to lead SuperValu’s northern wholesale region and then in 2014, he was named president of Cub Foods. In 2016, he was promoted to the position of executive vice president, SuperValu Wholesale and Supply Chain Services, and occupied that role until it was acquired by UNFI in 2018.
The New York Times reports that since 2017, the Occupational Safety and Health Administration (OSHA) unit of the US Department of Labor "has inspected more than 270 Dollar General stores and found 111 instances of workplace safety violations. The agency has also imposed more than $15.5 million in penalties during that period, according to data provided by a White House official.
"OSHA inspectors have found issues such as obstructed fire exits and boxes of merchandise cluttering the aisles or stacked precariously high.
"In some cases, federal inspectors have gone into a store to demand that a hazard be fixed, only to find in a follow-up visit that the problem was still there, according to two federal officials who spoke on the condition of anonymity to discuss the violations.
"The fines represent a tiny fraction of the billions of dollars in sales that Dollar General generates every year. And until recently, the officials said, the company was not willing to engage with OSHA about resolving these issues broadly, and it has contested many of the penalties."
“What we have found time and time again at Dollar General stores is that there are obvious, preventable hazards that are putting workers at risk,” Douglas L. Parker, assistant secretary of labor for occupational safety and health, tells the Times.
Dollar General responds: "We regularly review and refine our safety programs, and reinforce them through training, ongoing communication, recognition and accountability … When we learn of situations where we have failed to live up to this commitment, we work to timely address the issue and ensure that the company’s expectations regarding safety are clearly communicated, understood and implemented."
The Times goes on: "The safety issues go deeper than a few rogue stores, federal officials said in interviews. Dollar General’s business model relies on lightly staffed and relatively small box stores with high sales volume. Often there are not enough employees to unload a delivery truck and immediately stock the shelves, Mr. Parker said. That means inventory can linger in the aisles, creating hazards for employees and customers."
The bottom line: OSHA has expanded its Severe Violator Enforcement Program "to include any type of company that willfully or repeatedly violated safety standards. The first to be added under the program’s expanded scope: Dollar General."
KC's View:
The Times story makes the point that Dollar General's entire business model seems to depend on being a fast-growing, lightly staffed entity where it costs less to pay the fines than to actually address the issues being raised by OSHA.
Assuming that the charges are both legitimate and provable, it'd be nice of regulations actually had some teeth. Like fines that are so onerous that they are not so easy to simply pay and move on. Like the ability to post obvious signage attesting to individual stores' safety violations. And maybe even force the closure of stores that are severe and repeat violators.
Are we going to wait for a store to have a fire, and for people to die because they can't access a fire exit? And if that happens, will we allow high priced lawyers and lobbyists to help this company - or any company - avoid legal consequences? Because that's the road we're headed down.
If stores are not willing to address safety issues because it is the right and responsible thing to do, then regulators ought to be able to force them to deal with these issues because it is too expensive, too inconvenient, and too negative for their brand image not to.
Kroger-owned Harris Teeter has rolled out a new commercial as part of its new marketing campaign with the slogan “In Food With Love."
KC's View:
The thing I like most about this commercial is that it is about a supermarket, and the focus is entirely on food and family. No prices, not even really a sales pitch. Just lots of great food shots designed to make the viewer hungry. (Silly me, but that's what I think that's what every food store should endeavor to do.)
It ties in perfectly with the tagline, "Harris Teeter. We’re in love with food, but we’re really In Food with Love!"
CNBC reports on a new survey from direct-to-consumer analytics firm ESW saying that more than "27% of millennials plan to spend 'significantly more' online and less in-store this year … 73% of millennial survey participants said they plan to spend 'the same or more' online this year … In all, only 15% of millennials said they planned to spend less online in 2023."
It is, the survey suggests, at variance with the broader post-pandemic trends, which have many shoppers retreating from the Covid-era e-commerce habits and returning to bricks-and-mortar stores.
With brief, occasional, italicized and sometimes gratuitous commentary…
• Instacart has announced a new program - dubbed Instacart Marketing Solutions - that it says will "give retailers the ability to let customers sign up for and access savings from their loyalty programs directly in the Instacart App. Dozens of retailers – including Bristol Farms, New Seasons Market and The Save Mart Companies – are already using Instacart Marketing Solutions, while The Fresh Market will soon enable loyalty sign ups directly from the Instacart App."
The company says that "retailers of all sizes can leverage Instacart Marketing Solutions to create marketing campaigns that help increase sales by engaging customers through tailored promotions such as a percentage or dollars off select items and 'buy one, get one' discounts … Instacart Marketing Solutions helps retailers of all sizes expand their offerings on the Instacart App or their Instacart Platform-powered websites and apps, driving incremental revenue and better serving omnichannel customers. Retailers can choose from a range of campaign options depending on their budget and business goals – spanning from self-service to full-service marketing solutions – to drive targeted promotions that help acquire and engage customers."
• TikTok announced a new partnership with Cymbio, described as "a leading marketplace and drop ship automation platform," to enable "seamless, on platform shopping for sellers, buyers, and creators" on TikTok.
Some context from the announcement:
"As social commerce hits an all-time high, brands are on the lookout for fun and engaging ways to meet consumers. With growing competition for brands of all sizes, entertainingly engaging with consumers has never been more critical. TikTok Shop, the innovative new shopping feature that enables merchants, brands and creators to easily showcase and sell products directly within the TikTok app - utilizes Cymbio’s automation technology, connecting products directly to TikTok’s in-video, live-shopping. Launching first in the UK, users will have the ability to checkout with a single click, which is expected to expand into the US market by the 4th quarter."
None of which will necessarily mean much in the US if government officials continue to move in the direction of banning TikTok as long as it is under the Chinese government's control. The addition of greater shopping capabilities, which will target the vast number of young people who use TikTok, is worrisome from where I sit.
• From Bloomberg:
"Alibaba Group Holding Ltd. plans to split its $220 billion empire into six units that will individually raise funds and explore initial public offerings, the biggest overhaul of China’s online commerce leader since its inception more than two decades ago.
"The move frees up the Chinese company’s main divisions from e-commerce and media to the cloud to operate with far more autonomy, laying the foundation for future spinoffs and market debuts. Its shares climbed 8% in pre-market trading in New York.
"The shift to a holding company structure is rare for major Chinese tech firms and could present a template for Alibaba’s peers. Decentralizing the company’s business lines and decision-making power addresses one of Beijing’s primary goals during its sweeping crackdown on the technology sector.
"The government had criticized the influence of online platforms, particularly those of Alibaba and WeChat operator Tencent Holdings Ltd. That will likely mean the restructuring would draw support from government regulators who have been concerned that concentrated power in tech suppressed innovation."
With brief, occasional, italicized and sometimes gratuitous commentary…
• The Nashville Business Journal reports that Dollar General has opened its first international store, Escobedo, Nuevo León, Mexico, under the banner Mi Súper Dollar General.
The plan is to have 35 Mi Súper Dollar General stores operating in communities in northern Mexico by the end of the current fiscal year.
• In western New York, the Democrat and Chronicle reports that Hegedorn's Market, a single-store independent grocer, will close after seven decades in business.
"It's a tough gig to be an independent grocer now," says Jonathan Gonzalez, grandson of the store's founder. "It's sad but its been a great run. This business has come to an end of its life cycle."
"In 1953, Bruce Hegedorn and his wife, Mary, opened a 2,000-square-foot market at the corner of Ridge and Hard roads in Webster as an IGA store," the story says. "After several expansions, the store is now 45,000 square feet, with a floral shop, bakery and a large selection of craft beers, but it remained family-owned and -operated. Second- and third-generation owners of the market work side by side with staffers who have worked there for decades and know their customers."
The story also features comments from a number of customers bemoaning the closing of the store, but clearly there were not enough of them doing their shopping at the store to keep it open. Gonzalez is right about it being a tough market - Hegedorn's is about a dozen miles northeast of Rochester, as well as being one mile from the closest Wegmans, three miles from the nearest Walmart, and eight miles from a Tops store.
• ABC News reports that CVS is closing on its $8 billion acquisition of health care services company Signify Health, which it writes makes CVS "among the first pharmacy chains in the U.S. to enter the at-home health care space after building its successful Minute Clinics … Signify Health has thousands of employees including physicians, nurse practitioners and other clinicians which provide a 'holistic suite of clinical, social, and behavioral services to address an individual's healthcare needs and prevent adverse events that drive excess cost, all while shifting services towards the home,' the company said in a press release."
• It isn't just the technology companies that are laying people off as they seek to streamline their operations.
Variety reports that "Disney will begin layoff notices this week for more than 7,000 staffers whose positions will be eliminated as part of a deep cost-cutting effort that will be felt across all of the company’s key divisions.
"Disney CEO Bob Iger confirmed Monday morning in a memo to employees that the layoffs will come in three waves, starting today. Iger disclosed the plan to significantly cut Disney’s overhead with massive staff reductions on Feb. 8. The cuts are expected to hit across the board and hit senior management levels as well as lower-level executives … The mass layoffs reflect the depth of the transformation that Disney and other media companies face amid the difficult transition from analog TV and traditional movies into the on-demand streaming era.
"One area of Disney employment that is expected to be mostly spared is employees who interact with guests at the company’s theme parks. After the pandemic shutdowns, the resiliency of demand for Disney’s global theme parks has been a vital ballast for the company in turbulent times for Hollywood."
• Flashfood announced the hiring of Jordan Schenck, most recently the co-founder, chief marketing officer and chief revenue officer at "plant-powered beverage company" Sunwink, as the company's new Chief Brand Officer. She previously served as head of consumer marketing for Impossible Foods.
And, Flashfood also announced the hiring of Sepideh Burkett, most recently the VP of Store Experience at Meijer, as the company's Head of Partner Development.
Regarding the possibility that the US government could try to ban TikTok unless the current Chinese owners spin it off into a US-owned company, MNB reader Andy Casey wrote:
Not that I have any doubt China may have nefarious intent, but somebody help me understand just exactly how TikTok (or really, anything on the internet) can be banned in the United States? That pesky First Amendment would seem to be an obstacle along with the well documented inclination of Americans to seek out that which has been forbidden to them (remember prohibition?). And frankly, “national security issues” surrounding China knowing what the average American teenager does on the internet seem a little overblown.
My understanding, as far as it goes, is that trade issues would be invoked. Scott Galloway argues that since China does not allow US social media companies to operate there unfettered, and when it does allow US companies in it often is to steal their IP, the US government should be able to play hardball.
Another MNB reader wrote:
I don't disagree that we need to be mindful of the psychological impact of social media on young people...but if that is indeed the focus here - how about we do something real and meaningful about gun violence in our schools.
You'll get no argument from me.
Though I fear that "real and meaningful" steps to deal with gun violence in general, and especially in our schools - like we saw just yesterday in Nashville - is unlikely.
On the subject of the scary UN report on climate change, I commented, in part:
Earth scarring solar panels? Bird-killing wind farms? Really? I love it when I come upon a field of solar panels, or I see windmills on the landscape. It makes me feel that there are some people in some places who are connected to reality.
One MNB reader responded:
You love seeing solar fields and wind farms? Wow. I would rather see rolling fields being farmed, mountain tops with natural lines. In upstate NY we have both alternate energy sources, and to me it is very disheartening when you use to come up over a ridge and see beautiful landscapes for miles and now you see silver solar panels covering the farm land. Not to mention the 25yr life span of a solar panel. What do they do with them then? Burn them?? But hey, I guess in your eyes you see people connected to reality. What reality I don’t know.
I like open fields, too. But I think we have to get real about our energy sources.
On another subject, from MNB reader Jerome Schindler:
My observation is that in general consumers are essentially immune to being educated, especially when it comes to food. . Examples among many: (1) MSG is bad for you. (2) Preservatives are bad for you. 3. Artificial anything is bad for you. 4. Milk and any other dairy products made with milk from cows treated with rbST are bad for you. 5. GMO is bad for you. 6. Natural is always good for you.
1. Scientific consensus is that MSG has gotten a bad rap. Double blind studies have shown no significant difference is side effects from ingestion of MSG. compared to ingestion of a placebo. 2. Preservatives are generally harmless and reduce food spoilage and waste. Cheese with no mold inhibitor often grows mold after it is opened and then discarded. Sorbic acid once was widely used and retards mold growth but presents no hazard. 3. There is no difference between a compound made chemically and one from nature. 4. rbST is undetectable in milk from cows treated with rbST. And while rbST falls within the technical definition of a hormone , it is not an estrogen and nowhere near chemically to what consumers think is a hormone like diethylstilbestrol. 5. The proven benefits of GMO technology far exceed the theoretical and speculative risks of ingesting GMO ingredients. 6. Just because it is natural does not mean it is less harmful.
So, no matter how much the proponents try to educate consumers, as long as meat is reasonably available I do not see a significant market for lab grown substitutes.
And just like food companies blast claims such as no this and no that on their labels, in reality implicit claims that such is harmful, I am sure the sellers of real meat will tout "not lab grown" on their products implying that there is something wrong with being lab grown.
This is marketing to unfounded fears.
On the subject of the composting of human remains, MNB reader Carl Jorgensen wrote:
Loved your human composting piece today. I think it’s a lovely trend. Somewhat related is this story out of Kenya, which has recently experienced some Biblical-style plagues of locusts. One community is collecting the locusts and composting them to produce a rich fertilizer.
I mentioned in my FaceTime that I'd like at least some of my remains to end up in the corner of some vineyard in the Willamette Valley, which prompted MNB reader Deborah Faragher to write:
I love this piece, Kevin. Talk about giving back! I had to forward it to my friend Karen at Willamette Valley Vineyards. I hope she shares with Jim Bernau!
On the subject of the 3D printing of food, one MNB reader wrote:
Sounds disgusting but on a positive note, this will likely help with our national obesity problem.
And finally, in response to my mentioning a dish I'd made, MNB reader Mark Thorngren wrote:
Have you ever posted the recipe for Shrimp, It's all Greek to me? Sounds good.
I can do better than that. From MNB, almost two years ago:
