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    Published on: March 31, 2023

    The New York Post this morning is reporting that even as TikTok CEO Shou Zi Chew was on Capitol Hill facing increased pressure to spin off the company's US business because of national security concerns, his boss - ByteDance founder Zhang Yiming - was in Arkansas meeting with Walmart CEO Doug McMillon.

    The subject of the meeting could not be learned, and Walmart, ByteDance and TikTok have not commented on the report.

    However, sources tell the Post that "two years ago Walmart had been in talks to partner with software giant Oracle to buy TikTok’s US operations under pressure from the Trump administration.

    "ByteDance in recent weeks has pooh-poohed the prospect of a sale of its US business.

    "Last week, the government officially said it would 'firmly oppose' any such deal.

    "A week earlier, TikTok had insisted it was '100% false' when On The Money reported it had begun talks about a possible sale.

    "However, when asked in recent days about Yiming visiting Arkansas, the company demurred."

    The Post goes on:  "Under the proposed deal with Oracle, Walmart – which has embraced TikTok as a way to reach younger shoppers – reportedly would have taken a 7.5% in TikTok’s US unit and McMillon would have taken a seat on the board."

    KC's View:

    First of all, let's be clear.  First of all, let's be clear.  Best I can tell, this is not an early April Fools joke.

    This is an unconfirmed report, and even if the meeting happened as reported - and it seems entirely credible to me - the stars would have to align correctly for such a deal to actually happen.

    That said, I find it fascinating, and a potential game changer.

    We know that TikTok has been growing its e-commerce footprint, and it is a platform that, as has been well documented, has 150 million, largely young, highly loyal US users.  For Walmart to have a piece of that pie, with the ability to use that foundation to grow its e-commerce business, would be an enormous advantage.

    I cannot imagine it would face any sort of regulatory challenge.

    It seems likely that the US government will push for a ban of some sort if ByteDance is unwilling to spin it off.  Scott Galloway keeps making the point that a spin is almost inevitable at the 11th hour, simply because there is too much money at stake that would be lost if a ban occurred.

    Walmart-Oracle would be an intriguing, very American acquiring team.

    And here's the bottom line - if this is properly marketed, this deal would make Walmart instantly cool and even heroic to generations of people that may not see it that way.

    I have no idea if this happens, or how the economics will work out.  But if it does, this deal would be a game changer.

    Published on: March 31, 2023

    Researchers at MIT are studying why, when you twist an Oreo cookie into two separate wafers, the creme ends up on one side or the other.  I have some thoughts, plus an observation about the actual best way to eat an Oreo.

    Published on: March 31, 2023

    by Kevin Coupe

    By now, we all know the degree to which pickleball has taken over the country.  It is everywhere.

    In New York City the other day, it was announced that the Wollman Skating Rink will be covered up for the summer months so that it can be converted to 14 pickleball courts, enough to allow for 196 hours of pickleball to be played there every day between now and October.  It won't be cheap - a court will rent for between $80 and $120 an hour, depending on whether it is prime time.

    From City Pickle

    In Stamford, Connecticut, there have been reports that a virtually desolate mall, the Stamford Town Center, may have part of its space converted to pickleball.  (Sounds like a good way to use crappy malls, if you ask me.)

    Now, Shake Shack has decided to get in on the action by launching a one-day Shake Shack Pickleball Club that in select cities will offer "a one-day program … to learn, play, and compete with great people and great music. Whether you’re completely new to the sport or a seasoned pro, we have a spot waiting for you in our 2023 National Tour in partnership with the Tennis Channel."

    There will be an introductory clinic, another clinic for intermediate/advanced players, and a round-robin tournament described as "the ultimate pickleball throwdown.," with men’s doubles, women's doubles and mixed doubles.

    I bring this up because it strikes me as a particularly savvy way to connect to a popular and cultural phenomenon - the kind of thing that people will remember if the event comes off as planned.

    This is what smart retailers do.  They move outside their comfort zone when opportunities present themselves, and look for new ways in which to connect to existing customers and attract new ones.

    In your community, there probably are pickleball courts.  (If your community is like a lot of others, there aren't enough of them.)  If so, why aren't you looking for ways to ride this vehicle to greater visibility?

    I think it could be an Eye-Opener.

    Published on: March 31, 2023

    Fascinating TED Talk, as part of its "Countdown Dilemma" series, by civil engineer and environmental sociologist Emily Grubert in which she talks about the infrastructure challenges of moving to a world that is fully electric.  What's refreshing about the talk is that she isn't just pointing us toward an electrified world without any regard for the implications and consequences of the shift.  Rather, as befits a talk entitled, "What happens to gas stations when the world goes electric?," she is very much focused on the dangers and opportunities inherent in the transition.

    Since many retailers own gas stations and depend on them for sales and - in both senses of the word - traffic, I thought it was worth bringing attention to.

    Published on: March 31, 2023

    Axios reports on a new PricewaterhouseCoopers' (PwC) study saying that "employees do not trust businesses as much as business leaders think they do … 79% of business leaders say employee trust is high, but only 65% of employees agree."

    "We are seeing a shifting landscape, and companies have to bring their people along on that journey," says PwC's chief strategy and communications officer J.C. Lapierre.  "Communications helps employees understand why these shifts are happening, which builds trust. ... It's a key tool for any business strategy."

    Axios writes that the study indicates that "when it comes to establishing trust, strong company values, opportunities for career advancement and workplace flexibility are table stakes at this point."  What employees want is "a transparent culture that offers fair pay, data privacy and clear communications."

    KC's View:

    I'm not surprised that there is a disconnect.  But I am a little surprised that 65 percent of employees say that worker trust in their companies is high.  That's a really high number - two-thirds! - and probably something of which US corporations should be proud.

    Published on: March 31, 2023

    •  From Bloomberg:

    "In the spring of 2022, Walmart Inc. created a new position among the roughly 15,000 employees who work at its headquarters in Bentonville, Arkansas. The job, called director of workplace mobility, comes with a very specific task: Figure out how to get 10% of the retailer’s local workforce to commute by any means other than driving alone. Walmart originally set the target in the summer of 2019, a couple months after unveiling plans for a new 350-acre corporate campus. The goal was to get 10% of the Bentonville staff commuting on bikes by this year, but reaching that mark has proven tougher than expected. So last year the company pushed the deadline back to 2025, when the new campus is set to open, and hired Kourtney Barrett to help hit it.

    "Barrett, 42, an entrepreneur and avid mountain biker who formerly led Bentonville’s chamber of commerce, has been asked to change Walmart’s home office from a workplace where the default mode is driving to one where thousands of employees choose active or public transit on a daily basis."

    The story reports that Cindi Marsiglio, senior vice president for corporate real estate at Walmart, says that "the push toward biking and other forms of micromobility … is meant to help Walmart not only cut carbon emissions but also make employees healthier, happier and more productive, and alleviate congestion in Bentonville. It’s also, like the new campus itself, part of an effort to make sure Walmart attracts the best talent with a lifestyle to match what tech companies on the coasts can offer. The idea is to make the surrounding Ozark countryside - what Marsiglio calls 'big nature' - more a part of the daily lives of employees and to show potential employees that thriving outdoor culture."

    Published on: March 31, 2023

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  From CNBC:

    "Elon Musk and dozens of other technology leaders have called on AI labs to pause the development of systems that can compete with human-level intelligence.

    "In an open letter from the Future of Life Institute, signed by Musk, Apple co-founder Steve Wozniak and 2020 presidential candidate Andrew Yang, AI labs were urged to cease training models more powerful than GPT-4, the latest version of the large language model software developed by U.S. startup OpenAI."

    The letter said, in part:

    "“Contemporary AI systems are now becoming human-competitive at general tasks, and we must ask ourselves: Should we let machines flood our information channels with propaganda and untruth?  Should we automate away all the jobs, including the fulfilling ones? Should we develop nonhuman minds that might eventually outnumber, outsmart, obsolete and replace us? Should we risk loss of control of our civilization?  Such decisions must not be delegated to unelected tech leaders.”

    The institute said it was calling on all AI labs to “immediately pause for at least 6 months the training of AI systems more powerful than GPT-4.”

    It is kind of rich that Musk, the guy who owns Twitter, is worried about information channels being flooded with propaganda and untruth.  What they're suggesting sounds like a reasonable idea, but for some reason I'm suspicious about their motivations.

    Published on: March 31, 2023

    •  From the Associated Press:

    "US applications for jobless benefits rose last week but remain at historically low levels despite efforts by the Federal Reserve to cool the economy and the job market in its fight against inflation.

    "Jobless claims in the United States for the week ending March 25 rose by 7,000 to 198,000 from the previous week, the Labor Department said Thursday.

    "The four-week moving average of claims, which evens out some of the week-to-week fluctuations, rose by 2,000 to 198,250, remaining below the 200,000 threshold for the tenth straight week.

    "Applications for unemployment benefits are broadly seen reflective of the number of layoffs in the United States."

    •  Pew is out with a new survey showing that "an outsized share of American workers don't take all of their available paid time off," Axios reports.  Indeed, "46% of workers said they take less time off than offered."

    According to Axios, "Pew asked about all paid time off, including not only vacation but sick time and personal days. But in explaining why they didn't use all their time off, none of the answers were about not getting sick.

    Lower-wage earners were more likely to worry about losing their jobs if they took too much time away, said Kim Parker, director of social and demographic trends at Pew.

    "Higher-income workers were more likely to keep working because they worried they'd fall behind."

    •  In California, KTLA-TV News reports that Cal-Maine Foods, the country's largest egg producer, has reported profit of $323 million during the most recent quarter - 718 percent higher than the $39.5 million reported during the same period a year ago.

    No yolk.

    The story quotes the company's president/CEO, Sherman Miller, as calling the profits “a solid performance" and "reflective of a dynamic market environment with higher average selling prices and favorable demand."

    Which, KTLA said, is an understatement, especially because of the egg prices that were "at crazy-high levels because of bird flu, which caused millions of hens to be put down."

    Published on: March 31, 2023

    We had a story the other day about how Amazon was trying to lower its returns-related costs.  The Information reported that "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."

    MNB reader Bob Thomas wrote:

    If Amazon is making money on the sale of frequently returned goods and on the charging of the vendor for the returns why would they stop selling them?

    I think they're getting to the point that the costs are outweighing the money it is making, and the bottom line is more important than ever.

    We took note the other day of a Fast Company story about an online venue called The Drop Store, where "pizza comes in pill form for $163. A bag of rice contains just 5 grains but costs $89. And a 15-milliliter bottle of “pure” water (about 1 tablespoon) will run you $198. If that’s not enough to quench your thirst, there’s also a 20-ounce bottle of “regular” water—but it’s still $199. And it’s brown."  The story emphasizes that "these products aren’t real. And yet they portray a future in which our water crisis worsens and water is a rare commodity. They also serve as a reminder that for billions of people around the world, water scarcity or access to clean water is already a pressing issue."

    MNB reader Howard Schneider wrote:

    Check out the recent novel, "Something New Under the Sun," by Alexandra Kleeman; it’s a rather fun, though dystopian, view of a not-too-distant future without natural water. Great read.

    Michael Sansolo had a column the other day in which he posted a photo from a New York Times column showing how AI can help people figure out how to use the leftovers in their refrigerator:

    One MNB reader responded:

    Regarding Michael’s column on AI and future uses, the photo from the NYT on what to make for a meal from your refrigerator made me laugh…..I like to eat and be as healthy as possible but I had to think, “no wonder they are leftovers”….

    On another subject, an MNB reader wrote:

    I have to say I strongly agree with your skepticism and doubt regarding the effectiveness of the NGA commercial that debuted today.  In addition to your two points, it made the shuttered "grocers" look like corner-store cigarette/beer stores which really won't tug at anyone's hearts.  There are plenty of examples where small community full-size supermarkets were closed due to anti-competitive issues and that is the core issue.  I guess I expected a whole lot more.

    We had a story yesterday about how Sprouts Farmers Market announced it "will eliminate single use plastic bags at checkout by the end of 2023. With this decision, Sprouts will remove over 200 million single use plastic bags from circulation each year."

    One MNB reader wrote:

    A couple of thoughts on these topics. 1. I’m curious as to how they are going to reduce water and plastic waste?  Do you have to fill your own bag like at the hotel??  2. Eliminating single use bags is not new so why the big announcement?  They are behind not in front.  Personally, the single use bags were not single use in my house.  We, as I am sure many, use them over again for trash bags, doggie bags, and other uses.  So they don’t give away 200 million bags.  How many are now purchasing more trash bags etc.??  What is the true net effect?

    On another subject, one MNB reader wrote:

    In today’s article you mention the shift of paper coupons to digital coupons and mentioned Kroger as an example of companies that have gone digital.  In my area (Scottsdale AZ) we have Kroger’s Frys Supermarkets. I will tell you that I absolutely hate having to do coupons at all. Do away with all the b.s. coupons and scan this and scan that and scan this QR code…… I personally think coupons are a PIA for everyone and I’d prefer an EDLP strategy, i.e. Walmart. Ever see a Walmart coupon?  Me neither. And in my area the Walmart is cleaner, better stocked, and less scary than my local Frys.

    From another reader:

    Old style paper coupons are cost prohibitive and historically have lousy redemption rates. ( unless like the old days when stores would have the “coupon room”)  Digital is much more efficient, thereby enabling manufacturers to provide higher value offers and reach more consumers with greater targeted focus.  Win win for all.  Even BJ’s is transitioning to the digital coupon.  Download the coupons from the app and they automatically come off at the register.  No more cumbersome clipping.

    On the subject of Howard Schultz's testimony before the US Senate Committee on Health, Education, Labor and Pensions about the company's anti-union positions and whether it has violated federal labor laws, one MNB  reader wrote:

    I watched the hearings on YouTube as I did work around the house yesterday afternoon.  Several things that stood out to me that were not mentioned by you or the excerpts you quoted were:

    The worker that started the union push in the first Buffalo store was on the union payroll the entire time they worked at the Starbucks store.  Only 6 of 21 workers in the initial store voted for the union, but only 4 voted against the union, 11 did not want to take a side so the union "won". Almost all of the workers who were at this store left employment after the union vote.

    Starbucks management has attended 85 meetings to begin negotiations with union stores only to leave because the union wanted to conduct negotiations by zoom or teams instead of appearing in person for the negotiation. Starbucks wanted to ensure they knew who was attending the negotiation sessions, the negotiations were not done in public and that the negotiation sessions were not being recorded which could not be done if the sessions  were held virtually. They had concerns for employee safety if the identities of local Starbucks management participating in the negotiations were made public and targeted for their roles.

    Union workers did not get benefits that were announced to non-union workers after the union votes because Starbucks thought that these benefits would be part of the initial contract negotiations that have been delayed. 

    The NLRB Inspector General is investigating several NLRB employees for showing favoritism in disputes between the union and the company where in-person votes were accepted in union elections where only mail-in ballots were to be accepted:

    "National Labor Relations Board (NLRB) personnel in NLRB Region 14, and elsewhere, have engaged in highly improper, systemic misconduct involving Starbucks and Workers United. The election misconduct by NLRB personnel has been reported by a NLRB career professional"

    One Republican Senator noted the conflict of interest that many senators had in chastising Starbucks as a union buster given the almost unanimous donation activity of unions to democrat politicians.

    My lasting impression was that a business owner who started life in public housing could build a company from 11 stores to over 325,0000 employees, offer generous pay and significant benefits, be outspoken for liberal causes would still abused by liberal politicians for not toeing every part of their line.

    Not to pick nits, but at least two of things you mentioned - the charge that the worker that started the union push in the first Buffalo store was on the union payroll the entire time they worked at the Starbucks store, and the probe into the NLRB - were mentioned in my commentary.  No problem - there was a lot there, and I had to go back to make sure I'd included it.

    And I've written here several times about Starbucks' assertion that the law says it could not offer the same wages and benefits to unionized employees as it did unilaterally to non-union workers.  (Not every legal expert agrees with Starbucks on that, by the way.)

    I am troubled by the argument over whether the negotiating sessions had to be completely in-person, with Starbucks refusing to meet when some people were attending via zoom.  Seems to me that this ought to be an easy one for the union - make sure everybody is in the room, which essentially forces Starbucks to the table.

    I think that Schultz made his case relatively well.  But I'll challenge you on two points.

    One Republican Senator noted the conflict of interest that many senators had in chastising Starbucks as a union buster given the almost unanimous donation activity of unions to democrat politicians.

    Is this really a conflict of interest?  Because I would think that conceptually we should applaud politicians who bite the hands that feed them.  I don't think it happens that often.  (I'm also not so naive to think that what we saw in the hearing was about nobility.  It wasn't.  Not on either side of the aisle.  On the Democrat side, it largely was about one set of self-interests outweighing another set of self-interests.)

    My lasting impression was that a business owner who started life in public housing could build a company from 11 stores to over 325,0000 employees, offer generous pay and significant benefits, be outspoken for liberal causes would still abused by liberal politicians for not toeing every part of their line.

    I don't care how successful a business person is, how many people they've employed, and how many politicians they've bought and paid for.  They don't get to break the law.  I want the law to be applied evenly, fairly and judiciously.   I'm not sure that's what happening here, but I would like to see the process play itself out.

    From another MNB reader:

    Thanks for the recap. I was interested in what would happen but knowing how painful these hearings are to endure and your penchant for all things Howard I knew I could skip and get your report. Truly not miss TV would be you interviewing Schultz and Sanders in the same room at the same time!

    Probably not going to happen.  But thanks.

    Published on: March 31, 2023

    Yesterday was Opening Day for Major League Baseball, with every team playing:

    New York Mets 5, Miami Marlins 3

    San Francisco Giants 0, New York Yankees 5

    Baltimore Orioles 10, Boston Red Sox 9

    Detroit Tigers 0, Tampa Bay Rays 4

    Pittsburgh Pirates 5, Cincinnati reds 4

    Toronto Blue Jays 10, St. Louis Cardinals 9

    Chicago White Sox 3, Houston Astros 2

    Atlanta Braves 7, Washington Nationals 2

    Milwaukee Brewers 0, Chicago Cubs 4

    Philadelphia Phillies 7, Texas Rangers 7

    Minnesota Twins 2, Kansas City Royals 0

    Colorado Rockies 7, San Diego Padres 2

    Los Angeles Angels 1, Oakland Athletics 2

    Cleveland Guardians 0, Seattle Mariners 3

    Arizona Diamondbacks 2, Los Angeles Dodgers 8

    Here, by the way, is a video created by ad agency Wieden+Kennedy, that offers a 60-second look at just some of the things that make baseball, in the words of Robert B. Parker, "the most important thing that doesn't matter:"

    Published on: March 31, 2023

    …will return.

    In the meantime, have a great weekend.  I'll see you Monday.