business news in context, analysis with attitude

We took note the other day of a Washington Post story about specific food product shortages that exist in a number of different countries.  The one identified in the US was Sriracha, which prompted me to joke about hoarding a bunch of it after I read about a coming shortage several months ago.

One MNB reader seemed appalled:

Kevin, congrats on beating your neighbors out of sriracha sauce. I hope you sleep better at night knowing that you don’t have to forego this basic necessity.

Really Kevin, I saw the headline and read the article expecting to see a screed about the perils of food shortages around the globe. In your vain attempt at humor, you come off looking pretty high-brow and elitist.

I did a long piece yesterday about Amazon's healthcare intentions, prompting MNB reader Andrew Huth to write:

Missing from the discussion is the biggest question that none of the interested parties wants to ask (because they know the answer) – should my health care be a profit center for any organization? The rational answer is, of course, a resounding “NO” but we are alone among all developed nations in consistently answering “YES.” Until that changes American healthcare will not improve. It is not a business; it is a right.

But we live in a country where healthcare is not seen as a right.  It is a business.  Not that there is anything rational about that approach.

We had a piece the other day of how Walmart is canceling billions of dollars in orders around the world as it deals with too much inventory, prompting one MNB reader to write:

This is the exact reason I tell my clients to not do business with Walmart until they are no more than 10% of your business, or 20% if you have good reserves of cash to weather things like this. If all these vendors had ordered, or received inventory it could be devastating. But what we don’t know is how far into the order process they were cancelled. Let’s hope they cancelled new orders and not ones that were ready to ship.

MNB also pointed out a story about higher grocery transaction costs in Texas, which led to that rarest of things - an email critical of H-E-B:

As a loyal HEB customer, I can attest to the higher transaction cost. Unfortunately, those of us in the San Antonio market do not have great alternatives. There is Walmart, a few Whole Foods, and a couple of  Trader Joe’s. Consequently, HEB has pricing power.

For those of us who actually like the store experience, I wish that there were more options. I know Kroger is establishing an online ordering system for delivery, but that’s no fun. 

It just exemplifies what happens when there is not adequate competition in the market.

On the subject of whether grocery stores can make malls more attractive and viable, one MNB reader wrote:

A few weeks ago, Costco announced it will be replacing a Sears store in Escondido, Ca at the Westfield North County Mall. This location also lost a Nordstrom’s after Covid hit. What I find most interesting about this location is there are 3 other Costco’s within 10 miles of this planned store.

Yesterday we took note of a Business Insider report that Amazon, having "struggled to open physical stores amid high costs and tension with Whole Foods," has decided to pause "the rollout of self-checkout Amazon Fresh stores following disappointing sales and economic headwinds."

I commented:

Okay, time for some hard truths and tough love.

If the Amazon Fresh physical stores are not living up to expectations, it is because …stick with me now, Amazon … they are crappy stores.

Now, to be clear, I have not been to all of them.  But the ones I have been to have struck me as underwhelming, poorly merchandised, and basically designed to be dark stores that happen to let customers in to shop.  The technology is great, but the stores themselves are soulless.

Want to fix the dysfunction?  Hire someone with strong store operational experience and empower them to do what is necessary to make these stores run right.  Amazon, if you want some suggestions, call me.  Email me.

I actually don't think this is hard to fix.  But I do think it is a matter of misplaced priorities and poor leadership, and it will require some strong hands at the tiller to put things right.

One MNB reader wrote:

Agree with you- they are underwhelming.  We’ve been to the new one in Paramus, NJ for 3 Saturdays in a row.  Yes- it is cool to just put items in your bag and walk out.  But:

Very dark store- thanks for confirming that I’m not the only one who thought that.  Dark floors (warehouse like) and lighting was weird. 

I did not get my emailed receipt for several hours.  This might be a tech glitch because they just opened.

While their produce looked great- no flavor at all (except the corn on the cob).

Some days, we weren’t charged for items; other days, we were charged for items we did not purchase.  Seemed to even out cash wise - so I didn’t report anything.

Small deli - and only one person working there.  The slowest person.  While she was working on our order- the two people behind us on line left. AND, they didn’t have any turkey.  No turkey in a grocery deli?  UNHEARD of.  All we bought was cheese.

Merchandising - I’ve been in grocery for over 10 years.  But I’m on the finance side- forecasting, budgeted etc.  I am NOT a merchant - nor do I want to be.  However, I even know that you need to block out shelves, and make them look full.  Make it look welcoming.  This Fresh store just looked dark and dingy to me.

This location was a former Fairway Market - a bright store with beautiful tiled floors (with their own issues).  Sad to see Fairway changed into this.

To summarize- we will not go back.

MNB reader Steven Ritchey wrote:

You seem to be almost begging them to call you so you can fix them.  Now, I've never been in one of their stores so I only have your description of them to go by.

Honestly though, I'd like to see you in charge of turning a store around, just to see if you can do it.  Pardon me if it seems I'm taking a dig at you, as I'm really trying not to.

But, it always seems as if pundits who want to tell others how to fix their businesses, frequently have no real experience in running that kind of business.  It's easy to tell others how to do things when your job isn't affected by the success or failure of your ideas.

I made some comments like this several years ago, and your reaction to my comments suggested you thought I was full of it, or at least was being disrespectful of you.  Believe me, I'll never try to tell you to run your blog, as I'd have no clue how to make something like this work.

I like your other idea better, it seems they really do need someone who has a real background in merchandising to bring their stores up to something a consumer wants to visit and maybe buy a few things..

Seriously, no disrespect intended.

First of all, I'm not begging them to do anything.

And I certainly am not capable of fixing anything.  Never said otherwise.  What I said was this:

Want to fix the dysfunction?  Hire someone with strong store operational experience and empower them to do what is necessary to make these stores run right.  Amazon, if you want some suggestions, call me.  Email me.

I am, to be clear, completely unqualified for the job.  I do have some ideas about people who would be.

That doesn't mean that I don't have some basic understanding - based on covering the industry for more than 30 years and having spent a lot of time with a lot of folks who a) are a lot smarter than I am, and b) have been willing to share their knowledge and experience with me - of what needs to be fixed.

But here's the deal.  Looking at the business, and seeing things that don't work and then writing about bow they might be better, is kind of what I do for a living.  People can agree with me, or disagree with me.  My goal is to get people think about stuff differently, as well as to get them to make me think about stuff differently.