business news in context, analysis with attitude

Yesterday, in my piece about the new Brooklyn Wegmans, I described parking as being a nightmare, prompting MNB reader Mary Ellen Burris to write:

Kevin, nice story on our opening.  There is a parking for 700 cars, and I’m told that even on opening day, there was still room for more.

I stand corrected. But I'm not entirely sure how clear that is to people pulling into the lot … I had a hard time finding a spot for the Mustang. But I'll take your word for it.

Last week, we reported on Amazon's quarterly results, prompted MNB reader Joe Axford
to write:

Great point KC, profits were just over $2 billion, nothing to sneeze at.

As an aside do you see Amazon buying a large chain (Albertsons/Safeway) or one of their banners to roll out it's store footprint quicker, or would that present more problems than it's worth?

My bet would be that this would load them up with legacy problems that they just don't need.

Another reader had a different take on Amazon's results:

Lower profits at Amazon and connections to foreign manufacturers that other retailers don't allow, two of your stories this week that might have a direct correlation . The transaction business at Amazon has been under profit pressures for several years and they have a reputation of sourcing products in unscrupulous ways to cut corners on costs. Sooner or later those practices come to light, they are not always connected into a single narrative.

Another comment on Amazon's sourcing issues from MNB reader PJ Stafford wrote:

Kevin, you have been highlighting recently the vulnerability of Amazon with regard to counterfeit and expired product.  Consider this about Fulfillment By Amazon (FBA), which is the third party logistics service (3PL) Amazon offers its sellers as a fulfillment option. In a prior job with an authorized distributor of products, we sold a lot of personal care and food product to Amazon third party sellers who directed us to ship the product directly to Amazon FBA facilities on their behalf. On occasion, those sellers would be hit with counterfeit and expired complaints from the consumer for items shipped from Amazon warehouses (for items shipped to FBA facilities that were not expired or counterfeit).

One option for sellers is for Amazon to co-mingle identical products from multiple Amazon sellers in their distribution centers. “Stickerless, commingled inventory” is the term that Amazon uses to refer to the products that are stored within their fulfillment centers that do not have a specific Merchant ID associated with them. So if 500 sellers are selling Caramel Almond Pumpkin Spice Kind bars, those specific Kind bars from each seller are not in separate locations by seller, but co-mingled.  That means that legitimate, authorized sellers who sell product with co-mingled inventory may get hit with a claim though the product they shipped to the Amazon FBA facility was perfect.    Certainly a risk FBA sellers need to consider.  As a consumer, I make a point to buy products “Sold and Shipped by Walmart” at to reduce the chance of getting expired or counterfeit products as they don’t have a “stickerless, commingled” inventory or an equivalent to Amazon FBA.

And on another Amazon issue, from another reader:

Even if you don’t buy clothing from Amazon, if you shop Amazon you are supporting these types of working conditions and global inhumanity. It isn’t always easy and sometimes, but not always, costs a bit more, but I choose other places to spend the majority of my money. And yes, I’m not perfect and sometimes give in to buying something from Amazon. They’re ubiquitous, and there are times or situations where I just don’t have the chops to keep searching for an alternative.

MNB reader Bob Thomas wrote:

Amazon is beginning to look like Alibaba more and more.  In a bad way.

Responding to a recent Michael Sansolo column about business lessons learned from his son's music career, MNB reader Howard Schneider wrote:

No, ragtime won’t replace rap. But quality music of all genres seems to endure. This isn’t the first time classic ragtime has had a renaissance. Back in the 1970s there was a ragtime revival, as people re-discovered Scott Joplin and his turn of the 20th Century contemporaries. Glad we’re having another revival; thanks for sharing that news!

Regarding a new anti-social media campaign being used by MillerCoors, MNB reader Ron Rash wrote:

First, as it is said, for every trend there is a counter trend. I think Miller is tapping into that counter trend (which seems to be growing rapidly as people reject FB, Twitter, etc.) as best they know how as a beer producer/seller.

There is little doubt in my mind, though anecdotally, that a strong counter trend has begun, and folks either feel the need to reconnect personally, or are just fed up with living their lives on FB. That being said, the enormous numbers involved in social activity far outweigh the counter trend… for now.

On our continuing coverage of environmental issues, one MNB reader wrote:

Having started my retail career working the backroom baler at a Skagg’s Albertsons, my son and I have often discussed the need for creating a home version of a cardboard baler.   Luckily, I have a large back porch to pitch the numerous boxes that seem to arrive daily at our house.  I do constantly think about the waste of home delivery, and believe that the right angle to address this problem could be a winning proposition.

One MNB reader had a comment about the New Yorker story suggesting that independent bookstores could charge an entry fee as one way of supporting their businesses:

The suggestion of monetizing the experience is a great insight; that’s exactly the kind of thing brick-and-mortar retailers need to do to remain relevant. I want to share one other point re: the morality and sustainability of buying stuff today. I recently got a library card (first time in thirty years), and have begun reading the latest books without buying them. I have a large home library which I love, but I am beginning to get over some of my desire to own every book. Books aren’t cheap; they take up space; they use scarce resources. (And I still prefer to read anything of length via print on paper, rather than pixels on a screen. My wife prefers audio books, another reduced-resource consumption option.) I LOVE books and booksellers, and will never stop buying books. But I am limiting my lifelong drive to build my  own physical collection.

On the same subject, from MNB reader Lisa Malmarowski:

Just yesterday, I took an extra 15 minutes out of my day to stop at local independent bookstore to pick up the next book my bookclub is reading (and then spend a few more bucks on two other books I didn’t plan on). Fifteen minutes. But it’s worth it to know that my local spending recirculates through my community and supports jobs in my neighborhood.

Consumers have power and choice - sliding into the easy Amazon trap for most things is a cop out because the vast amount of Amazon shoppers don’t need half the crap they buy and have the resources to shop other places. But gosh, it’s so darn easy to "one-click” isn’t it?

On the subject of my aquaponics-themed video commentary, MNB reader Carl Jorgensen wrote:

Terrific FaceTime segment today! I do a lot of work for investors evaluating sustainability propositions, and I agree that aquaponics is one of the most sustainable forms of vertical farming. Using fish effluent greatly reduces the need for external inputs and substantially reduces water usage. Organic certification of growing operations that do not grow plants in soil is still controversial in the organic community. Many certifiers will not certify vertical farms. However, I admire Volcano Veggies’ commitment to sustainability, and I hope that this issue will eventually be resolved. I like this quote from their website: “When we first started our farm, if we couldn’t do it organically, we were not going to do it at all.”

On another subject from an MNB reader:

Walmart’s use of robots to scan cases coming off trucks has a hidden benefit of increasing case count accuracy. Have you ever seen a cashier ring up different items of a family of products of the same size and price as a multiple of only one of the items? Now think of a truck with multiple pallets of a similar family of products being unloaded and counted as the item on the last pallet. This causes massive inventory issues throughout the supply chain as the wrong items get sent to the store because once received and put away, the location is coded as having the received product instead of the actual product. By correcting the initial receiving data, the entire system is more efficient. I watched the impact of this phenomenon for years and thought it was the real culprit for out of stocks and bloated back room inventories.

And, regarding Sears' continuing travails, MNB reader Andy Casey wrote:

Ok, enough already. It is long past time for pretending anyone has any intentions of doing anything but sucking all value out of Sears. This whole saga reminds me of the Sopranos episode where Tony and company bust out his buddy’s sporting goods store to cover gambling debts.

And, responding to Michael Sansolo's column yesterday about the “Ewing Theory,” which he described as "an idea created by a sportswriter," MNB reader Jesse Ehlen wrote:

So I have to ask, KC, are you and Michael unaware of the sportswriter who came up with the theory (Bill Simmons) or was this a conscious effort by two New York guys to deny credit to a Boston guy?

Well, I didn't know that, so we can eliminate the conspiracy notion. But … I asked Michael, and he did know it, and just decided not to mention it.

So you decide if it was a conscious effort by a New York born-and-bred columnist.
KC's View: