business news in context, analysis with attitude

Published on: April 21, 2023

I recently had the chance to go to Shun Lee Cafe, one of the New York City's iconic Chinese restaurants.  It was a lesson on what happens when an "icon" starts to coast on reputation.  And reputation, as Norman Mayne once told me, is a word that really only exists in the past tense.

Published on: April 21, 2023

by Kevin Coupe

In upstate New York, the Daily Gazette has a story about Neil Golub, the former Price Chopper CEO who has made the resurrection of Schenectady his personal mission.

Golub is, the story says, "the driving force behind the $250,000 television and print “New Schenectady” campaign, which is designed to rebrand the city to residents of the Capital Region and beyond as a hub of business development, housing and entertainment … Golub, who is funding the ads, said the campaign would last six months, at which time he hopes the initiative will be carried on by Discover Schenectady, the county tourism agency."

Golub says that "this has been a 30-year journey for me.  The first part was to clean it (the city) up and the second part was to create a funding source (Metroplex) and the people that were brought in to run it did a great job. And now it comes time when we’ve spent 20 years of doing the fix up and clean up and all of these new facilities, that with a fresh new start it’s time to tell the world that we’re different. So my job is done when we’ve announced the new brand. We are new and we want the people to know that we’re not the old Schenectady, we’re the new Schenectady.”

I've chatted with Neil Golub about this in the past;  several years ago, he took me around the city to show me where investments were being by technology and medical companies, investments that he believed would reshape the city and the region.

But I bring this up now because we always talk about the community aspect of smart retailing.  Done right, a community can be created that connects a retailer's employees and customers, and creates a whole that is bigger than the parts.

Seems to me that this is what Neil Golub's commitment is all about.  To building community, to creating something that is better than how he found it.  It is about going above and beyond.  And it is an Eye-Opener.

Published on: April 21, 2023

The Wall Street Journal reports that Amazon-owned Whole Foods "is planning to cut several hundred corporate jobs … as the grocer reorganizes its structure to simplify operations."

According to the story, Whole Foods is reducing its nine regions to six, restructuring some of its corporate teams, and making staffing cuts.  No stores or other facilities are scheduled to be closed as part of the reorganization.

The Journal writes that "the company spokeswoman said changes are aimed at better serving stores and customers as Whole Foods continues to expand. The company isn’t eliminating positions in stores or distribution centers, she said. Whole Foods anticipates that the cuts will affect less than 0.5% of its total workforce, which is about 105,000 people. The company, which has more than 500 stores, currently plans to open about 50 new locations."

The story notes that "supermarkets are navigating economic uncertainty after experiencing a boom to their business during the Covid-19 pandemic, which has prompted people to cook more at home. Whole Foods executives have said that inflation is affecting customers and that the company aims to hold more sale events."  At the same time, Amazon is in the process of laying off some 27,000 employees across the board, making it one of many tech companies making cutbacks in the current environment.

Published on: April 21, 2023

Axios reports on "a new 'co-warehousing' facility in the Phoenix area (that) will provide private warehouses to local e-commerce companies that have outgrown their home-based operations … : The spaces, from logistics company Saltbox, range from $450 to $7,200 per month, depending on size."

The story notes that "Saltbox already has 11 facilities nationwide and serves more than 500 businesses, including Sock Fancy and BlackLIT, a monthly book subscription service highlighting Black authors."  Co-warehousing allows small e-commerce businesses "to compete with logistics giants like Amazon that can get goods to customers overnight."

Published on: April 21, 2023

From The Information:

"TikTok has ambitions to transform its app into a U.S. shopping destination and is open to working with big retail partners including Walmart to make that happen, according to TikTok’s head shopping executive in the U.S."

According to the story, Sandie Hawkins, TikTok’s general manager of U.S. e-commerce, says that "the company has been focused on partnering with brands and creators to jump-start its Shop service, which allows people to make purchases in the app … TikTok is also piloting an affiliate program in the U.S., in which creators can partner with brands to get a cut of TikTok Shop sales."

Some context from the story:

"After experiencing explosive growth in the past three years, TikTok has focused on e-commerce as integral to keep users engaged on the app and to drive revenue through advertising and commissions.

"Commerce 'enables people to stay on TikTok and continue to have that entertaining part of their day and not leave the app,' Hawkins said.

"TikTok’s ambitions contrast with those of other social media companies like Instagram that have pulled back from their own commerce efforts, in part because of the effort required to build out compelling shopping features and brands’ reluctance to share purchase data with other platforms.

"But Hawkins expressed confidence that TikTok would be available to convert American users to social commerce, in part because of its grip on their attention and the fact that many of its users have already tried live shopping."

Published on: April 21, 2023

Variety reports that "Netflix said it will stage a 'broad rollout' of its paid-sharing plan in the second quarter of 2023, including in the U.S., aiming to convert freeloaders borrowing someone else’s password into revenue-generating subscribers … As part of Netflix’s crackdown on customers sharing passwords with people outside their household, the company plans to start blocking devices (after a certain period of time) that attempt to access a Netflix account without properly paying."

Netflix has tested this approach to shared passwords outside the US, and seems confident that it can make the plan work in the US, though it concedes that there is likely to be some blowback from some subscribers.

According to the story, "Netflix estimates that passwords are being shared in violation of its rules with more than 100 million non-paying households worldwide. It first cited that figure a year ago, when the company told investors it was focusing on generating revenue from password-sharing users."

Published on: April 21, 2023

With brief, occasional, italicized and sometimes gratuitous commentary…

•  Reuters reports that Amazon "must face a proposed U.S. nationwide class action accusing the company of illegally monitoring private Facebook groups that delivery drivers used to discuss working conditions …  the lawsuit alleges that Amazon invaded drivers' privacy and engaged in illegal wiretapping by creating a 'social listening team' to monitor and intercept posts to private Facebook groups using automated tools."

Amazon had argued that the case had to go to arbitration rather than litigation because the driver who filed the original suit, Drickey Jackson, had signed an agreement mandating arbitration.  However, the San Francisco-based 9th U.S. Circuit Court of Appeals ruled that the agreement did not apply to this lawsuit because it did not related to his job performance.

According to Reuters, "The ruling means Jackson can continue seeking to represent a class of at least 800 Amazon drivers instead of pursuing his claims in individual arbitration."

Jackson, the story says, has "cited a leaked document purporting to show an internal social media monitoring list of 43 private Facebook groups that drivers ran in different cities.  He says Amazon used sophisticated digital tools to monitor the groups and gather information about planned strikes and protests, unionizing efforts, pay and benefits and whether researchers examining Amazon’s workforce had approached drivers."

Amazon has denied any wrongdoing.

I know you are innocent until proven guilty, but it sounds like Jackson may have the documents to prove his allegation.  It certainly sounds like something that Amazon could do;  it remains to be seen if it is something that it would do, or did do.

•  From CNBC:

"Two years ago, Amazon founder Jeff Bezos vowed to make the e-commerce giant 'Earth’s best employer' — and now, he might be one step closer to achieving that goal.

"Amazon is the No. 1 company to work for in the U.S., according to new research from LinkedIn.  For the third year in a row, Amazon has claimed the top spot on the networking platform’s annual Top Companies list, followed by Wells Fargo and JPMorgan Chase."

The story points out that companies that laid off more than a certain percentage of their workforce were not eligible to be on the list, and Amazon came in just under that percentage.  That said, I'll bet there are some 27,000 folks who might disagree with Amazon's topping the list.

•  Amazon has announced what it is calling "the Anti-Counterfeiting Exchange (ACX), an industry collaboration designed to make it safer to shop online and more difficult for counterfeiters to move among different stores to attempt to sell their counterfeit goods … ACX allows participating stores to share information about confirmed counterfeiters who attempted to use their services to try to sell counterfeit products. By sharing information about these counterfeiters, ACX participants can identify and stop perpetrators more quickly than they would in the absence of this collaborative data sharing. In accordance with industry standards and best practices, an independent third party provides anonymized access for participants to share and receive information."

Published on: April 21, 2023

•  From the Associated Press:

"The number of Americans applying for unemployment benefits rose last week but remains low by historic standards.  US jobless claims rose by 5,000 to 245,000, the Labor Department reported Thursday.

"The four-week moving average of claims, which evens out week-to-week ups and downs, fell by 500 to 239,750. At the start of the year, weekly claims were running around 200,000 and they have gradually moved higher.

"Overall, 1.866 million people were collecting unemployment benefits the week that ended April 8, up from 1.80 million the previous week and from 1.53 million a year earlier."

•  The Minneapolis/St. Paul Business Journal reports that United Natural Foods Inc. (UNFI) is selling the 133-acre campus in  Eden Prairie, Minnesota, that "for decades was the headquarters of grocery distributor Supervalu Inc. UNFI acquired it — along with the rest of Supervalu — in 2018."

According to the story, "United Natural Foods had around 900 employees working out of the campus prior to the pandemic, but most of its employees are still working remotely. UNFI expects to open a new regional office in the metro within the next 12 to 18 months … UNFI expects the new regional office to be a modern facility that operates as a home base for employees living or traveling to Minnesota. The space will likely be designed to host meetings, like those between retailers and suppliers, according to the statement."

Published on: April 21, 2023

Executive Suite is sponsored by Robin Russell Executive Search.

•  Dollar General announced the promotion of Kelly Dilts, the company's Senior Vice President, Finance, to the role of Executive Vice President and Chief Financial Officer.

Published on: April 21, 2023

In yesterday's FaceTime, I tried to puzzle out the Bud Light kerfuffle, and what exactly the problem was that inflamed so many people and led to more than 5,000 news articles and countless social media mentions. 

Not everybody thought I did a very good job.

One MNB reader wrote:

I have listened to your take on this issue, and you did not reference at any point Alissa Gordon Heinerscheid, who was hired to overhaul Bud Light’s marketing, with the vision of freshening up its image.  You may recall her team was responsible for the  “Bud Light Carry” ad during the Super Bowl.  Ms Heinerscheid has stated on record of her strategy to ditch Bud Light’s ‘fratty’ reputation and embrace inclusivity to attract a young generation of drinkers.  In fairness to her, she took on the job when the brand was in decline and her attempts to attract younger drinkers who could become the future for the brand is smart.  However, based on the outcry from the posts, it seems that majority of today’s Bud Light Drinker who are the “fratty”, NASCAR Loving, sports loving beer drinkers are not quite ready for new campaigns that are “Meant to feel different, to be lighter and brighter, with a confidence and magnetism, and it’s really critical to depict real people and real places”.

Yes a big part of the kerfuffle has to do with the trans aspect,  but this strategy is also ignoring its current base as well.  This campaign strategy does not scream out beer.  The pocket books of the consumer has spoken out and the direction the company is headed has cost them a lot of money and more.  Consumers have the right to choose where their money goes, but I agree with you on this, do it nicer.

One MNB reader wrote:

I think you missed the point. I believe the reason for the boycott is over the Bud Light Marketing VPs comments. She didn’t value the customers they already have.  She offended current drinkers of the beer so they are walking away. I think Dylan Mulvaney created the publicity but transgenderism isn’t the issue.

FYI, the comments from Alissa Heinerscheid, Bud Light's VP of Marketing, included:

"We had this hangover, I mean Bud Light had been kind of a brand of fratty, kind of out of touch humor, and it was really important that we had another approach."

Another MNB reader wrote:

On the topic of Bud Light – classic case of marketing not understanding their target audience. The Bud Lite marketing manager stated that she wanted to make Bud Lite less “fratty.” Well – breaking news – Bud Light drinkers are fratty and predominantly male. So by using a transgender influencer to market to that audience was just asking for backlash. I am sure that there were other brands in the Anheuser Busch portfolio that would have been a better target audience for the campaign – and better influencers (Kid Rock?) for the Bud Lite campaign.

And from another reader:

For a guy who says he is objective in looking for the truth your position on the Bud advertising is amusing.  Bud has the right to advertise as they feel and customers have a right to vote with their dollars.  Bud missed the mark on understanding how their customers would react to a socially targeted stunt to bring in a widen base and bare the embarrassment of financial devastation.   Keep up these editorial comments and you may find that a portion of you listening base may turn you off as well.  This Bud is for you!

Well, probably not for me.  But not because of their advertising or marketing or social/cultural attitudes.  I would've thought that the real problem was that the beer is crappy.  But that's just me.

But let me be clear about a few things.  First of all, my comments fall into the category of commentary.  That's means they are opinion.  I make no pretense about being objective once I've reached an opinion.  I try to be fair and open-minded and willing to entertain other opinions, but my opinions are exactly that.

That's the business model.  If you have a problem with that, you are welcome to go read somebody else.  (The difference between us may be that I am not only willing to read the opinions of people who disagree with me, but also am willing to post them on my website.)

Let me respond to some of the above comments:

I agree that Bud Light had the right to advertise anywhere it wanted to, and appeal to any demographic it wanted to.  Absolutely.

I agree that consumers can vote with their wallets.  If you disagree with how a company does business, take your dollars elsewhere.  (I do.)

I agree that the Bud Light folks didn't calculate into their marketing plans the reaction of people who appear to make up some portion - admittedly a vocal portion - of their core customer base.

I'm not sure that Bud Light can be blamed for wanting to expand its customer base.  I did a little checking, and trade journals suggest that this year, before this controversy got traction, Bud Light's volume is down more than five percent and sales are down 0.4 percent.  (Sales aren't down as much as volume likely because of inflation.). So they're trying to goose their sales.  Saying that "Bud Light had been kind of a brand of fratty, kind of out of touch humor," may not have been artful, and not necessarily complimentary to core customers, but it strikes me as a reasonably accurate assessment.  That core customer base just wasn't enough to grow sales, and so they tried something different.

Should Bud Light's marketing folks have known better?  Maybe.  This story certainly may inform other companies' marketing decision-making processes going forward if they're thinking of doing something different.

So, I pretty much agree with most of what was said above.

(One thing:  I do not believe it is true that Dylan Mulvaney created the controversy.  Dylan Mulvaney is the victim here.  The only victim here.)

Here's where we really part company.

I think the virulent reactions by some people to the use of a transgender person to publicize Bud Light was, in fact, trans-phobic.

I continue to believe that the reaction of Anheuser Busch CEO Brendan Whitworth, expressed in an official statement entitled "Our responsibility To America," was weak sauce.  Remember, here's what he said:

As the CEO of a company founded in America’s heartland more than 165 years ago, I am responsible for ensuring every consumer feels proud of the beer we brew.

We’re honored to be part of the fabric of this country. Anheuser-Busch employs more than 18,000 people and our independent distributors employ an additional 47,000 valued colleagues. We have thousands of partners, millions of fans and a proud history supporting our communities, military, first responders, sports fans and hard-working Americans everywhere.

We never intended to be part of a discussion that divides people. We are in the business of bringing people together over a beer.

My time serving this country taught me the importance of accountability and the values upon which America was founded: freedom, hard work and respect for one another. As CEO of Anheuser-Busch, I am focused on building and protecting our remarkable history and heritage.

I care deeply about this country, this company, our brands and our partners. I spend much of my time traveling across America, listening to and learning from our customers, distributors and others.

Moving forward, I will continue to work tirelessly to bring great beers to consumers across our nation. 

With the exception of 12 words that barely referenced the controversy ("We never intended to be part of a discussion that divides people."), Whitworth managed to release a statement that could've been issued on any day.

What I think he should've said - and just to underline this, I am about to state an opinion - is this:

We make beer.  We want everyone to drink our beer.  Conservatives.  Liberals.  Heterosexuals.  Members of the LGBTQ community.  Old people.  Young people (if you're 21).  Men.  Women.  Frat boys.  Athletes.  Nerds.  Techies.  And not only do we want all of you to drink our beer, but we hope you will tell your friends to drink our beer, whether in a local pub or via social media.  But what we do not want is for any of our customers to act out against other customers simply because they are different.  Because that goes against the fabric of who we are and what we stand for.

But he didn't say that.  (To be fair, maybe he doesn't feel that way.  Which would somehow be worse, in my opinion, than being mush-mouthed.)

By the way, Howard Schneider, who writes a marketing newsletter, made an excellent point about this:

There’s a counterpoint to this lesson, and while it may be apocryphal, it shows how the same beer company, decades ago, forayed more successfully into “influencer marketing” back in the day. After Jackie Robinson broke the color barrier in baseball (the anniversary of which was just last week), the St. Louis Cardinals, owned by the Busch family, was slow to integrate. The story is, Mr. Busch called in the team’s general manager and asked why they hadn’t signed any Black players while other teams were hiring the likes of Willie Mays, Henry Aaron, and Don Newcombe. The GM hemmed and hawed, believing that the largely-white border-state audience wouldn’t accept players of color. Mr. Busch reminded the GM that Black folks drink beer, and the owner of both Budweiser and the Cardinals insisted that Black players be included on the team – now.

This is all a pretty good business lesson, I think.  It also is a good lesson in the difference between tolerance and intolerance.  Also good business and bad business.

Not everyone disagreed with my opinion on the issue.

One MNB reader wrote:

Interestingly, I heard about the so-called Bud Light controversy only from a certain circle of my friends, and then again in your Facetime commentary.  This was not mentioned on any of the news channels I watch, nor in any of the two newspapers I read.   When my friends were talking about this story, it was distorted to be that AB was changing their Bud Lite cans to feature a transgender person on the can, and not that it was only one can.  That is the kind of so-called news that is being communicated as truth.  We, in this country, have got to fix our divisive culture.  Those divisions are based on hate and untruths.  Hopefully the next generation will be more accepting than my generation has become.

And, from another reader:

It feels like there are loud folks out there who just want folks like my wife and I and Dylan and others to go back in the closet. Not sure how that's going to make the world better but they want us invisible. 

I don't think everyone feels that way.  I don't even think most people feel that way.  Unfortunately, many of the people who do feel that way seem to have a bullhorn.

One good thing, I think, is that years from now, our grandchildren will look at these debates, arguments and culture wars and wonder what was wrong with us that we would allow ourselves to be consumed by prejudice and intolerance.  At least, I hope so.

On the subject of DVD rentals, one MNB reader wrote:

In my major metropolitan city, I enjoy fast and mostly reliable internet that can support video calls and streaming.  However, in my parents’ Appalachian town of 30K, their ‘high speed’ internet, which they pay a premium for, struggles to stream a show from any streaming service.  True high-speed internet simply isn’t offered in their geography. 

I think many city dwellers, myself included, are quick to forget that high speed, unlimited data internet is a privilege not enjoyed by millions of low income or geographically remote Americans.  DVD rentals, whether from a kiosk or ship-to-home service offer a more reliable and sometimes more affordable opportunity for entertainment for some populations and are far more convenient than watching a buffering or glitchy screen on your movie night.  

Which is why Redbox remains in business and highly viable.  My only point was that there probably isn't much overlap in the customer base that streams and the base that still rents DVDs.

From another reader:

Longtime (almost since the beginning) DVD Netflix customer here. DVDs of movies not available streaming (Kind Hearts and Coronets for instance) and captions (my wife needs them) available long before they were available streaming and the opportunity to see newer movies (in that short window between screenings at the theatre and "renting" online) made a huge difference for us. I am totally bummed (I know, first world problem) about no longer being able to see classics, and my wife not getting to enjoy really new movies with captions. 

Have you tried the Criterion streaming service?  They tend to have a lot of classics.

Following up on our story and my commentary about the shooting that took place this week in an H-E-B parking lot, MNB reader Kevin Duffy wrote:

It’s getting to the point in the world where in addition to fishing reusable grocery bags out of your trunk before going into a store you also should fish out a Kevlar vest. 

And on the subject of the Oakland A's moving to Las Vegas, one MNB reader wrote:

How perspectives change with age.  When I was 7 the A’s left me and it was the most devastating thing in my childhood. (Which say something about how blessed I was)  Charles Finley was the devil and then they had the audacity to start winning after they left!

Now, having been to multiple games at the Oakland Alameda Colosseum, I hold no grudge against them making this move.  I haven’t been to all of them as you have but a fair number and this is by far the worst.  Some minor league venues are much better. 

And from another reader:

What … No comment on poor misunderstood Oakland? Yet another successful city, first cousins to Portland, Chicago, Philly, LA, Seattle, NYC, etc.  It’s progressivism failing .. but still robust enough; like … cancer.

All the cities you mentioned have problems that include crime, homelessness, and drug addiction.  As I said the other day, some of these problems have been created and/or exacerbates by misguided policies, and some of them have been caused by circumstances either unforeseen or beyond their control.  

I was curious about the cities in America with the highest violent crime rates per capita, so I went online and did a little research - in 2022, according to the FBI, the 10 cities with the most violent crime were Memphis, Detroit, Little Rock, Tacoma, Pueblo, St. Louis, Kansas City, Cleveland, Springfield (Missouri), and Rockford, Illinois.  (Source:  https://www.populationu.com/gen/most-dangerous-cities-in-the-us)

The cities that did not make the top 60:  Portland, Chicago, Philadelphia, Los Angeles, New York, and San Francisco.  Seattle was #37 out of 60.  To be honest, I was shocked by this.

My only point is that there are an awful lot of cities in the US that are suffering, and they are not all the usual suspects.  Speaking for myself, I'm open to any and all ideas for how to cure their ills in ways that combine law and order with compassion. (That's compassion for everybody, especially the victims of crimes.)

Published on: April 21, 2023

My usual reviews of movies, TV shows, wine and whatever else happens to be on my mind will return next week.

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

Sláinte!!