business news in context, analysis with attitude

Published on: April 12, 2023

by Michael Sansolo

There's the message.  There's the way it is delivered.  And there's the perspective that informs it.  All three factors matter when communicating.

For example:  A while back I was in a quick serve restaurant that featured the usual tip jar with a very unusual message.

Rather than plead for gratuities the jar offered up an interesting bit of philosophy: “If you hate change, leave it here.”  It is a double message, in that it both asks for tips and embraces the anxiety we all feel, every day.

And perhaps never more than now.

Just think about some of the stories you read here on MNB each day. The stories may be different and far-flung (for KC, the further-flung, the better), but the lessons are always pretty straightforward, with a common through-line:  Change is simply inevitable and those who try to ignore it rarely make out well.  We all have a choice - keep up, or fall behind.

A great example of this was the story earlier this week about the new effort at Walmart to start installing electric vehicle charging stations at its stores. It’s a small story with the potential for massive impact.

The reality is that electric vehicles, no matter how you might feel about them, are coming and fast.  The federal approach to public policy is aimed at assuring that a significant percentage of new car sales will be of electric vehicles with a decade.  It’s impossible to watch anything on television without seeing ads for all new types of electric vehicles from muscle cars to pick-up trucks. And the reality is the drivers of those vehicles are going to need to charge up, which makes Walmart’s move look both prescient and brilliant.

As we've suggested here numerous times in the past, charging vehicles brings an entirely new reality to retail because it can take a significant amount of time to full charge an EV, even with today’s rapid chargers. So at a minimum you need to think of ways to happily occupy shoppers for that length of time.

The executive of a European convenience store chain a few years back predicted that her stores would soon feature manicure stations and yoga classes as ways to help customers pass the time productively while their vehicles charge.

One has to believe that Walmart recognizes this as well. A vehicle charging for, let’s say 90 minutes, in a Walmart parking lot means that shopper has lots of time to kill while browsing the many aisles in a supercenter. That, in turn, might well lead to some additional sales and profits.  Perhaps even some new categories in which Walmart sees opportunity, creating new competition for existing businesses.

Supermarkets need also consider how the marriage of EV charging stations and in-store eateries might also produce some wonderful results.  Think about how cooking classes might take on added importance for people who have time to kill and are looking for productive ways in which to fill it.

The reality is this: you won’t be the only business thinking along these lines. No doubt restaurants and other retailers will also see the benefits in providing shoppers a needed EV charge and a place to spend a chunk of time eating or handling chores.

So like it or not, the world of electric vehicles and charging stations is coming for you and as Walmart’s announcement makes clear, the time to jump on board is now.

The message to shoppers will be simple:  We can fill your EV-related needs.

The way that message is delivered will matter:  Retailers will have to find ways to do so with a little panache, some style, even some humor.  These things will differentiate the retailer from others.

And perspective will matter:  Retailers need to factor these new opportunities into their broader brand images and value propositions, in ways that are consistent and sustainable.

One final note.  Every narrative can be delivered with a different perspective.  Consider KC's discussion this week of the classic Broadway show "Camelot."  The original Lerner & Loewe show had one take on the King Arthur legend, which writer Aaron Sorkin has updated in a new production that keeps the original music but updates the book in a way that frames its discussion of democratic values in a more informed context.

But Sorkin isn't the first to take a new approach to this narrative,  Monty Python did the same thing in 1975, in Monty Python and the Holy Grail, though its political perspective was a little more tongue in cheek (though also, in an odd way, a take on what the simple folks do).  Watch this clip.

It’s a reminder that the truths, challenges and opportunities we all face can look very different depending on our perspective. 

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.

For information about hiring Michael to speak at your next meeting or conference, click here.

Published on: April 12, 2023

Foxtrot Market is a growing convenience store chain with some two dozen locations in Chicago, Texas and the Washington, DC metro area, built on what it calls a love of food and food people, an eclectic and highly edited approach to product selection, and a cool vibe that I think is looking to marry an artisan mindset to a largely young, urban clientele.  While in Chicago recently, I visited one, and also took some pictures that you can see below.

As one might expect from a store with this orientation, it also is making a stong e-commerce play.  Here are some screen shots from the Foxtrot app:

And here is how Foxtrot is selling its wares:

Published on: April 12, 2023

by Kevin Coupe

New research from Hub Entertainment says that there are some 204 million smart TVs in US households, marking the first time the number has exceeded 200 million and reflecting the degree to which the home entertainment sector has evolved.

The company's “Connected Home” study found that 77 percent of TV households say they own a smart TV, up from 66 percent three years ago.  The research also shows that 61 percent of all TV sets are said to be smart sets, up from 45 percent in 2020.

So here's my question, in response to this Eye-Opening research:

At what point are we going to stop calling them TV sets?  The name hasn't changed since people were watching "I Love Lucy" on 15-inch black-and-white screens in the 1950s, and yet the technology and the experience - not to mention the content - have changed in enormous and fundamental ways.  "TV set" doesn't seem to capture the reality, and I think we need to come up with a new name that reflects this evolution.

Published on: April 12, 2023

Albertsons yesterday released its Q4 and fiscal 2022 results, saying that same-store sales for the fourth quarter were up 5.6 percent and digital sales were up 16 percent, while annual same-store sales were up 6.9 percent and digital sales were up 28 percent.

That said, profits and margins were down, reflecting both higher costs and inflationary pressures.

Albertsons said that Q4 total sales rose five percent to $18.27 billion, while Q4 profit was $311.1 million, down from $455.1 million in the same quarter a year ago.

Full year sales were $77.6 billion, up from $71.9 billion a year ago, while profit was $1.5 billion, down from $1.6 billion a year earlier.

Albertsons also noted that membership in its loyalty program increased 15 percent during Q4, to more than 34 million people.

Vivek Sankaran, Albertsons' CEO, cautioned that "as we look ahead to fiscal 2023, we believe … that the economic backdrop is uncertain and is likely to be more challenging later in the year. We have prepared our business for a more difficult consumer environment, and are expecting significant labor investments and inflationary cost increases. Additionally, we expect further declines in COVID-19 vaccination and at-home test kit revenue."

The coming year also will see continuing efforts by Albertsons and Kroger to complete their proposed merger by persuading the Federal Trade Commission (FTC) that it is not anti-competitive and will be good for consumers.

Published on: April 12, 2023

Walmart yesterday announced that it closing four of its Chicago stores, saying that collectively, its Chicago stores have never been profitable.

At the same time, Amazon-owned Whole Foods said that is closing its San Francisco flagship store just a year after it opened, saying it was making the move because of concerns about employee safety.

In announcing its decision, Walmart wrote:

"The simplest explanation is that collectively our Chicago stores have not been profitable since we opened the first one nearly 17 years ago – these stores lose tens of millions of dollars a year, and their annual losses nearly doubled in just the last five years. The remaining four Chicago stores continue to face the same business difficulties, but we think this decision gives us the best chance to help keep them open and serving the community.

"Over the years, we have tried many different strategies to improve the business performance of these locations, including building smaller stores, localizing product assortment and offering services beyond traditional retail. We have invested hundreds of millions of dollars in the city, including $70 million in the last couple years to upgrade our stores and build two new Walmart Health facilities and a Walmart Academy training center.

"It was hoped that these investments would help improve our stores’ performance. Unfortunately, these efforts have not materially improved the fundamental business challenges our stores are facing.

"Community and city leaders have been open and supportive as we met with them over the years to share these challenges. As we looked for solutions, it became even more clear that for these stores, there was nothing leaders could do to help get us to the point where they would be profitable."

Walmart said that "all associates are eligible to transfer to any other Walmart or Sam’s Club facility.   Representatives from surrounding facilities will be in each of these stores to help associates find their next opportunity. 

"All associates will be paid until Aug. 11, 2023, unless they transfer to another location during that time.  After Aug. 11, if they do not transfer, eligible associates will receive severance benefits."

The Chicago Sun Times writes that this leaves four Walmarts in Chicago, and that the closures means that those units join "other grocery stores — particularly on Chicago’s South and West sides — that have closed in recent months."

Meanwhile, CNN reports that "an enormous Whole Foods in downtown San Francisco that opened just last year is temporarily closing. The company said concerns about worker safety forced it to shut down. Incidents of theft in San Francisco have gained national attention, though crime has generally fallen over the past six years.

"The nearly 65,000-square foot location at Trinity Place in the city’s Mid-Market neighborhood shut its doors Monday to 'ensure the safety' of its employees, a Whole Foods spokesperson said. Although Whole Foods did not share any additional information on the conditions that led to the store closing, the spokesperson added that it was a 'difficult decision to close the Trinity store for the time being.' Affected employees will be transferred to nearby stores.

"The store at 8th and Market streets will not open Tuesday, the spokesperson said. The store’s website has also disappeared."

The San Francisco Standard reports that this location had previously reduced operating hours last year because of theft and changed its bathrooms after employees found syringes and pipes.

CNN provides some context:

"Property crimes in San Francisco have garnered national attention because of several attention-grabbing videos of thieves in action. Though still well below 2017 levels, the city saw a 23% increase in property crimes between 2020 and 2022, with spikes in burglary and theft headlining the surge, according to San Francisco Police Department data.

"Meanwhile, violent crime statistics in San Francisco have remained relatively steady in recent years. Preliminary police data reports 12 homicides in San Francisco this year, an uptick of 20% compared to the same period in the previous year. In total, there were 56 homicides in San Francisco in 2022, which is the same number of homicides the city saw in 2021."

Published on: April 12, 2023

From the Cincinnati Business Courier:

"The CEO of Phoenix-based specialty grocery chain Sprouts Farmers Market Inc. is not too worried about the potential $24.6 billion merger of Kroger and Albertsons Cos. affecting his company, and he doesn’t know how much it’ll actually help the two large chains compete against Walmart.

"Sprouts CEO Jack Sinclair said his company operates on a completely different side of the grocery industry than downtown Cincinnati-based Kroger and Albertsons and their brands.

“I think it is neutral to us. If they drop the price of Tide or Coca-Cola it is not going to affect us. We don’t sell that anyway,” Sinclair said. “Maybe I’m a little bit naïve, but I don’t think it is going to bother us very much … I’m not sure putting two big things together to make a bigger thing, but still smaller than Walmart, is going to do anything.  I don’t know how that unravels itself. There will be some efficiencies the customer gets, but it will still be more expensive than Walmart.”

Published on: April 12, 2023

With brief, occasional, italicized and sometimes gratuitous commentary…

•  The Wall Street Journal this morning writes about how the fastest-growing trend in e-commerce may be the backing away by consumers from "demands for urgent delivery that have fed a race among online retailers and parcel carriers to fill orders in just a day, within an hour and even faster. Delivery apps including Instacart have started offering delivery in as little as 15 minutes, a service aimed at food and pharmacy orders.

"The competition accelerated early in the Covid-19 pandemic, when locked-down households began ordering all kinds of goods online and triggered a boom in e-commerce business. That has also quickened the search for faster paths to last-mile delivery, including technology such as drone delivery aimed at overcoming hurdles such as traffic and distance. 

"Now, some consumers are showing more willingness to wait and greater reluctance to bear the costs of getting basic household items in hours rather than days."

The economics of super-fast delivery never made sense, or least never had been proven;  venture capital groups were investing in promises that I always felt would be hard to live up to.  It was like nobody in that sector ever had been in traffic.

•  From The Information:

"The U.S. Federal Trade Commission on Monday handed down a fine against an Amazon seller for abusing the site’s reviews system to boost its products, representing the agency’s first enforcement action for what it calls 'review hijacking.'

"The Bountiful Company, a supplements maker, tricked customers into believing that newer products had more reviews and higher ratings by repurposing reviews from older products, the FTC said … The FTC’s commissioners unanimously approved a consent order requiring The Bountiful Company to pay a $600,000 fine. The order also bars the company from using similar deceptive tactics in the future, the FTC said."

•  Amazon announced that it now is featuring PickleTV - described as "a new free, ad-supported streaming television (FAST) channel dedicated to professional pickleball matches, tutorials, interviews, and original content … the only streaming channel dedicated to pickleball 24/7" - on both Prime Video and Amazon Freevee in the U.S.

According to the Association of Pickleball Professionals, it is estimated that there are currently 36.5 million pickleball players in the US - up from five million in 2021 was roughly 5 million.

"There is an increasing demand for pickleball content from pickleball players but, more importantly, from people that have never played the sport. The country is curious about this game called pickleball. A 24-hour channel will provide, not only pickleball matches but learning tools for new players through clinics and instructional content. It is the perfect time to launch this great asset to the sport," said Terri Graham, owner/co-founder of the US Open of Pickleball, in a prepared statement.

Published on: April 12, 2023

With brief, occasional, italicized and sometimes gratuitous commentary…

•  WCPO-TV News reports that "local Kroger employees are about to get a pay boost, thanks to a rarely used contract maneuver by the United Food and Commercial Workers Union Local 75.

"UFCW members are expected to ratify a contract modification Sunday that will bring 50-cent hourly raises to 11,000 clerks and department heads in its Cincinnati and Dayton stores.

"The 50-cent bump is on top of already scheduled pay raises required by UFCW’s existing contract. Kroger rarely adjusts wages in the middle of a contract, but UFCW President Kevin Garvey got the company to consider it after the union agreed to help the company test a new way to sell fresh-cut fruit in eight local stores."

•  From the Washington Post:

"The U.S. Postal Service is raising mail prices for most users, pushing the cost of a first-class stamp from 63 cents to 66 cents.

"The new rates, which also cover other mail items including periodicals and advertising mailers, are poised to take effect July 9 unless overruled by the postal regulator.

"The 5.4 percent increase across all first-class mail products is the agency’s fourth rate hike in two years. It also brings the price of a stamp, a baseline for postage products, up 32 percent since 2019, when a stamp ran 50 cents."

•  From Front Office Sports:

"The Chicago Cubs are making history with a drink.

"The team will be the first MLB team with a CBD sponsor.

"The Cubs are working with Chicago-based MYND Drinks, which will have signage and beverages in three flavors at Wrigley Field. The product met the criteria for working with MLB teams by receiving the NSF Certified for Sport designation.

"The team is leaning into CBD’s relaxing qualities to promote the deal: The Cubs are releasing a guided meditation on YouTube, narrated by their radio play-by-play announcer Pat Hughes.

"MLB is the first major sports league with a CBD sponsor, having linked up with CBD company Charlotte’s Web in an exclusive multiyear deal inked last October."

Wouldn't you like to hear Harry Caray do a commercial for this stuff?

•  From NBC News:

Legendary food storage brand Tupperware has hired advisers to help turn around the company after notifying securities regulators it may have to close up shop.

"In a release dated April 7, the Orlando, Florida-based company announced it was seeking to improve its capital structure in order to 'remediate its doubts regarding its ability to continue as a going concern.'

"That same day, Tupperware issued a going-concern notice after warning it could be heading for a default if its lenders demand payment for maintaining access to the company's main line of credit … the company says it is exploring all options to regain its financial footing, including accessing new lines of credit, tapping new investors, selling some of its real estate and further cost-cutting."

NBC News notes that "while Tupperware still sees more than $1 billion in quarterly global sales, it lost $28.4 million in its most recent quarter amid higher costs, inflationary pressures and lower sales."

Ironic, isn't it, that a time when food waste is top of mind for many people, perhaps the best-known name in food storage can't make a profit?  

•  From the New York Times this morning:

"Dog ownership boomed during the pandemic, with Americans buying or adopting millions of pets, including canines. Sales of dog food surged to around $25 billion last year, up nearly 39 percent from $18 billion in 2019, according to the consumer research firm NIQ.

"But as inflation has driven up the prices of even conventional kibble, the options in the dog food aisle have become increasingly bespoke and expensive. There are holistic, plant-based varieties, and those with freeze-dried goat and wild boar. Some options are frozen and raw … One of the fastest-growing and most competitive categories is human-grade dog food … According to the Association of American Feed Control Officials, a nongovernmental organization that provides guidance to the industry on animal feeds, human-grade dog food contains fresh ingredients — like meats or vegetables — that are fit for human consumption, and is manufactured in a plant that is federally regulated and inspected."

And, because if nothing else this segment is ripe for satire, here's how "Saturday Night Live" recently weighed in on the subject:

Published on: April 12, 2023

Executive Suite is sponsored by Robin Russell Executive Search.

•  Lowe's Companies announced that it has hired Juliette Pryor, for the past three years executive vice president, general counsel and corporate secretary for Albertsons, as its new executive vice president, chief legal officer and corporate secretary.

The move creates executive movement at Albertsons as its proposed merger with Kroger "faces regulatory review and at least one court challenge," Bloomberg reports.  "A federal lawsuit filed in February claims that combining the top two US supermarket chains could create a 'behemoth,' that could easily raise prices and eliminate competition in some markets."

According to the story, "Jon-Peter Kelly, the company’s senior vice president of litigation, will report to Albertsons CEO Vivek Sankaran and oversee legal matters related to the proposed merger, a company spokesperson said. Elena Dietrich, senior vice president of field operations and employment law, will oversee day-to-day legal matters."

Published on: April 12, 2023

…will return.