business news in context, analysis with attitude

Published on: April 26, 2023

For today's FaceTime I traveled to a Lunds & Byerly's store in the Highland Park section of St. Paul, Minnesota, where the 53,000 square foot unit features something unique - a corner that serves as an incubator for local restaurateurs who want to grow their visibility.  The initiative allows Lunds & Byerlys to create a little bit of magic sauce for the location, especially because the businesses occupying the corner will rotate - right now it is a local barbecue joint, but that will change every three months or so.

Published on: April 26, 2023

by Michael Sansolo

We hear a lot of talk these days on the importance of mentors in everything from building diversity to simply making new staffers quickly understand the details and importance of their jobs.

With that in mind, I want to offer a personal lesson on the power of mentorship.  Like KC, I began my career as a newspaper reporter and editor and frankly never imagined doing anything else. I was in my late twenties, I loved my job, but long hours and a paltry salary weren't what I needed as I approached my wedding date.

By luck, the father of one of my newspaper colleagues was the editor of Progressive Grocer, then a paragon of original research and merchandising insights. The magazine needed a new managing editor to run the mechanics of the monthly publication and he reached out to me.

Quite honestly, I had no interest in working in the supermarket industry. In fact, as a politics and crime reporter I dreaded the times when my editor assigned me to cover a new store opening. But in hopes of building a new career path I went off to Progressive Grocer in April 1983 and quickly sized up my new career choice.

I hated it.

But that’s where mentorship came in. My editor, Edgar Walzer - a legendary figure in the industry who passed away years ago and, unfortunately, is hardly remembered in the industry today - recognized my frustration and proposed a solution. He guessed that if I had a chance to learn about the industry, that I’d come to appreciate it, so he pulled me off of running the mechanics of the magazine and sent me out to do articles. 

He was right, I got hooked and quickly learned how essential and reflective of a changing world this great industry is.

In the years since, I’ve had the chance to work with countless people in this industry, learn about a wide range of incredibly interesting and challenging topics and almost never once looked back with regret on my career change. In those years, I’ve had the pleasure of working with many industry giants who in countless ways educated me and improved my life and I’m grateful to them all.

But I always remember my editor Ed and his insightful recognition of how I was feeling. Without his intervention, I might have stayed at the magazine for two years and drifted back into the publishing world never knowing all I would have missed. Honestly, I would have been greatly diminished.

I have had a front-row seat to countless changes in the industry and in the society it serves from the explosive growth of technology and data (yes, scanning was still relatively new in 1983) to wildly unexpected changes in competition and shopper desires. And it’s been endlessly fascinating.

I'm not writing this to say goodbye and announce that I am hanging up my computer keyboard.  I think there remains much to do, and, like KC, I feel energized by the chance to keep doing whatever I can at MNB and elsewhere.

I also know that none of this would have happened without a mentor who nourished something in me that even I didn’t see. And I hope that can encourage you to mentor others, in hopes that they might recall you and your deeds well after your career and name are remembered.

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 26, 2023

Yesterday we took note of a CNBC report that "Amazon delivery drivers at one of the company’s California facilities joined the International Brotherhood of Teamsters, the union said Monday, in a win for labor organizers that have long sought to gain a foothold at the e-retailer.

"A group of 84 workers at Amazon’s warehouse in Palmdale, California, won voluntary recognition by Battle-Tested Strategies, a third-party delivery contractor, to be represented by the Teamsters. That allows the workers and the Teamsters to sidestep the union election process, which can be challenging and last for many months … The story says that 'Battle-Tested Strategies is one of the legions of third-party delivery firms contracted by Amazon to shuttle packages to shoppers’ doorsteps'."

And I commented:

What's the over-under on how long it will take Amazon to decide to terminate its contract with Battle-Tested Strategies and replace it with another, non-unionized company?

If it is legally possible, the bet here is that Amazon will try to send a message to Battle-Tested Strategies and all the delivery firms it contracts with that unionization is to be opposed at all costs, not accepted.

Apparently, it is legally possible.

Business Insider reports that Amazon has terminated its contract with Battle Tested Strategies, and in fact had done so before the Teamsters deal was signed.

 Eileen Hards, an Amazon spokesperson, tells Business Insider that "this particular third party company had a track record of failing to perform and had been notified of its termination for poor performance well before today's announcement. This situation is more about an outside company trying to distract from their history of failing to meet their obligations."

Published on: April 26, 2023

Business Insider reports that Starbucks announced that "it would start holding meetings with store employees billed as 'connection' sessions.

"The two-hour meetings will include coffee tastings, group activities, and games, the company said. They will kick off with a video message from Laxman Narasimhan, the company's new CEO. 

"The meetings are not intended to address operational matters, and the company said it has previously held employee forums focused on business and culture. The new initiatives focus on connection and Starbucks' role in bringing people together, the company said.

"The moves come amid heightened tensions between some baristas and executives. Over 300 stores have voted to unionize, and the company has been accused of targeting union organizers."

Published on: April 26, 2023

The Conference Board is out with its monthly assessment of consumer sentiments, saying that its Confidence Index fell in April to 101.3 (1985=100), down from 104.0 in March.

"The Present Situation Index - based on consumers' assessment of current business and labor market conditions - increased to 151.1 (1985=100) from 148.9 last month.

"The Expectations Index - based on consumers' short-term outlook for income, business, and labor market conditions - fell to 68.1 (1985=100) from 74.0. The Expectations Index has now remained below 80 - the level associated with a recession within the next year - every month since February 2022, with the exception of a brief uptick in December 2022. The survey was fielded from April 3 - about three weeks after the bank failures in the United States - to April 19."

Published on: April 26, 2023

A story in the New York Times illustrates, perhaps inadvertently, exactly why Bed Bath & Beyond this week had to declare bankruptcy and announce that it would be closing all its stores.

"Customers - both loyal and lapsed - received an email from the home-goods retailer around 8 a.m. telling them that the company had decided to file for Chapter 11 bankruptcy," the Times writes.  "Its 360 Bed Bath & Beyond stores would soon be closing, as would its 120 Buy Buy Baby locations.

"Shoppers have until Wednesday to use their coupons. Around the country, they rounded up the ubiquitous blue slips of paper offering 20 percent off, stuffed them in pouches and plastic bags, and made their way to the nearest Bed Bath & Beyond.

"At a store in Manhattan’s Chelsea neighborhood on Monday, Sylvia Ward, a self-described Bed Bath & Beyond aficionado from the Bronx, said news of the closings had 'absolutely devastated' her. Then she learned she had only a few days to use coupons.  'I had to run down here today!' she said."

Over the decades, the Times writes, "those coupons reliably showed up in millions of mailboxes - and, more recently, email inboxes - offering a discount on home goods like kitchen gadgets, fluffy pillows and wooden hangers. People gave them as gifts to new homeowners and college students, kept them in kitchen junk drawers and car glove compartments. At least one customer used them as a calling card, writing their phone number on the back of the coupons and handing them to fellow patrons deemed attractive."

Published on: April 26, 2023

The Wall Street Journal reports that the US Department of Agriculture (USDA) is proposing new rules that are "aimed at minimizing salmonella outbreaks from some breaded chicken products, a move the industry said could significantly affect availability and price. 

"Part of a broader effort to contain salmonella, the new proposal takes aim at breaded, stuffed raw chicken products, such as frozen chicken cordon bleu. Because these products are often prebrowned, consumers might mistakenly think they are cooked, leading to consumption of undercooked chicken, the USDA said."

The Journal writes that "chicken producers are already required to test samples for salmonella, and they face more USDA scrutiny if contamination reaches a certain threshold. But consumer groups say contaminated chicken still sometimes ends up on shelves.

"Under the proposal, any breaded raw chicken product from a batch that tested positive for even a small amount of the bacteria wouldn’t be able to be sold. Companies could choose to cook the chicken, which kills the bacteria, for use in another product."

However, the National Chicken Council objects - it says that it "estimates that annually, more than 200 million servings of the breaded, stuffed raw chicken product would be lost, while production costs would rise, potentially closing smaller producers of the products and increasing consumer prices."

Published on: April 26, 2023

With brief, occasional, italicized and sometimes gratuitous commentary…

•  From the BBC:

"Amazon could soon be forced to recognise a trade union in the UK for the first time.

"The GMB union says it has enrolled a majority of workers at Amazon's Coventry warehouse which qualifies them for recognition by law.

"It has written to the company asking to be recognised.

"Amazon says it 'respects its employees' rights to choose to join or not join a labour union'."

Really?  Does it really?  

Published on: April 26, 2023

With brief, occasional, italicized and sometimes gratuitous commentary…

•  Some 33,000 Albertsons employees have been informed via a letter from management that their personal information may have been exposed in a data breach.

The letter informed employees that hackers infiltrated the company's computer systems last December and stole employee data, including names, birthdates and Social Security numbers.

The retailer said that the situation has been contained and that it is providing affected employees with support services.

•  The Wall Street Journal reports that Gap "is eliminating hundreds of corporate jobs from its global workforce as part of a broad restructuring aimed at making the company more nimble and less bureaucratic, according to people familiar with the situation.

"The current round of cuts is slated to be larger than in September, when Gap eliminated roughly 500 corporate positions, one of the people said. Those job cuts were mostly at its main offices in San Francisco and New York, and were part of efforts to save about $250 million annually.

"More recently, the leaders of each of the company’s brands—Gap, Old Navy, Banana Republic and Athleta—have been conducting a wide-ranging review with the goal of stripping out layers of management to speed decision making, the people said … In March, Gap said it identified an additional $300 million in cost cuts, including by stripping out layers of management. At the time, company leaders didn’t say how many jobs would be lost. But it announced the elimination of one high-profile position, that of chief growth officer."

I guess that when you're reducing the headcount to this degree, a Chief Growth Officer doesn't have a whole hell of a lot to do.

Published on: April 26, 2023

Executive Suite is sponsored by Robin Russell Executive Search.

•  The Information reports that "Amazon CEO Andy Jassy has picked Eric Rimling, a 14-year veteran of the company’s fulfillment operation, as his new technical adviser, according to two people with knowledge of the appointment. The highly coveted position, which involves working directly with the CEO on a daily basis, has been a fast track to promotions for Amazon staffers in the past, including Jassy himself.

"Rimling’s January appointment, which hasn’t been previously reported, is notable given Jassy had limited experience with Amazon’s delivery business prior to becoming CEO in 2021, having spent the vast majority of his career working on Amazon Web Services."

The story goes on:  

"People who occupy the technical adviser role typically serve for around two years, sitting in on top-level meetings and traveling with the CEO. The working relationship between the technical adviser and CEO is so close that the person occupying the role is often referred to as a 'shadow adviser.' Jassy himself worked as technical adviser to Amazon founder and then-CEO Jeff Bezos in the early 2000s before going on to help create and lead AWS.

"Rimling most recently held the post of vice president of global specialty fulfillment. He has held various fulfillment-related roles since joining the company in 2009, working on everything from grocery delivery for Whole Foods and Amazon Fresh to rural deliveries and customer pickups and returns."

Published on: April 26, 2023

The debate over the Bud Light situation continues.

At one point I referred to the people who were the most virulent and vehement in their reactions to Bud Light actually marketing its beer to the trans community as "transphobic cretins."  Though I did ask if that was "too far" or "too soon."

One MNB reader responded:

I think that you went too far with the comment.

You could be a little more balanced or neutral in your opinion here because those people are also expressing their opinion. We are too quick to name calling and labeling people who think differently and it’s a huge problem today. I like a lot of your commentary and have followed you for quite some time now. I don’t think that we need more division and polarizing comments like that.

There are extremes on both sides of issues like this and we could point both out.

Political and ideologies have permeated the grocery business and many facets of life like sports. Some out there are really tired of having a constant bombardment of some of the societal or political issues. This and the demonizing of certain people’s beliefs won’t solve anything. It’s not going to convince them that they are wrong. It will embolden them and create more of them.

I agree that there are people on both sides that take issues like this way too far and there are always extremes. These types of marketing decisions have become a bit political and they should have expected blowback, as you said. This is one where you could have left this comment out and I would have agreed with most everything is this post.

Also, I do think that companies do leave people out to dry when things like this happen. Maybe the company should be more careful with hot topics like this and maybe stick to their business and not societal issues. They aren’t given much choice at times but some companies don’t genuinely care about some of the issues that speak on. Some companies do care but some just support these issues when it’s popular.

A few things here.

First, it is really important to realize that Bud Light likely wasn't trying to make a political statement when it tried to get a trans influencer to promote its beer.  It was just trying to sell more beer.  Everything that followed has been political - and, on A-B's part, totally ham-handed.

Second, I'm doing this story because it is a marketing story, relevant to how the MNB community conducts business.

Third, if there were just about people expressing political opinions, that would be one thing.  But this is people expressing bigotry.  I see no rationale for ignoring it, or not calling it out as exactly that.

I know a lot of people who occupy various segments of the LGBTQ+ community.  In the end, the most important word in that sentence is "people."  They don't deserve this kind of abuse and bullying.

I think it is important for people who react this way to people in the LGBTQ+ community to think about how they would feel if the people who are the subject of their ire were their children, their siblings, or their friends.   I, at least, try to think about these scenarios within that context.

MNB reader Jeff Gartner wrote:

Just a quick reply to one of your readers who commented that sending a swag bag to an influencer who is transgender is a political statement and that they should just "run the company." Well, intentionally deciding NOT to send that swag bag to an influencer who is transgender is also a political statement. 

I still don't get the cruelty. How did Bud Light harm anyone who is opposed to transgenders? Apparently, their very existence is perceived as a personal threat. It's so cruel and so sad.

But another MNB reader wrote, in response to my commentary about the hypocrisy of Bud Light forcing two marketing executives to take a leave of absence:

Re: your comment that no one should have been fired.  I think that is totally unrealistic.  A-B’s marketing departments’ bonehead decision to pander to 1%’rs, in an attempt to expand their consumer base, backfired and lost the company billions.  If you had employees that cost you billions, wouldn’t you fire them?  Or would you pat them on the head and say that’s ok no worries.  I sincerely doubt it.

Pandering?  Really?

I would argue that when Bud Light tried to expand its customer base and grow its sales, that was a marketing decision.  But rolling over for the bigots and hanging marketing execs out to dry - that was pandering.

My point about the marketing execs is that they did not make that decision on their own.  There doubtless were dozens of meetings and memos and emails about the strategy and decision to try to grow the base and reverse the brand's decline.  I just think that the CEO of A-B clearly has never heard the phrase, "The Buck Stops Here."  But then again, he's mishandled pretty much everything about this situation.

On another subject, I joked yesterday: 

You've all read about the fact that Tucker Carlson is out from Fox News, and that Don Lemon  was dismissed by CNN.  And I just want you to know that it doesn't matter how much money Fox News and CNN may offer me - I'm not leaving MorningNewsBeat or you.

I just want to be clear about that.

MNB reader Carl Jorgensen wrote:

Whew! That’s a relief, KC! I’m sure that I’m not the one only one who’s glad to hear that when CNN comes knocking with a seven-figure offer, you will hold strong for your loyal readers.

Another MNB reader wrote:

That’s probably a pretty smart move Kevin!

And from another reader:

WHAT A RELIEF!!

(Their caps.  Not mine.)

And MNB reader Deborah Faragher wrote:

That put a smile on my face, Kevin.  Knew you couldn’t be bought!

Oh, I can be bought.  It is just that it seems more likely that I would sell MNB, along with my services, to a person or company that might be interested in giving it a lifespan beyond mine.

Not that I'm going anywhere anytime soon.