business news in context, analysis with attitude

The other day we took note of a piece in The Atlantic about how an "open embrace" of cheap products from around the world, more often than not sold by third-party merchants via its Marketplace has done two things - it has given shoppers access to an endless supply of merchandise, but also has transformed Amazon "into something that functions more like a global flea market than a traditional retail store."

The argument that Amazon actually is diminishing its own value as a trusted retailer hinges on a willingness to make available to shoppers an inexhaustible stock of "good enough" products of questionable provenance, and often not good enough products so cheap that when they break or don't live up to expectations it is more cost effective  to refund shoppers' money and allow them to keep the items instead of returning them.

MNB reader Annette Knapp responded:

The Atlantic must have our dining room table bugged because this was pretty much verbatim what I said last night after spending a few hours Sunday trying to find a thoughtful gift for a relative. She loves highland cows. Amazon was selling nothing but hundreds of sketchy items – magnetic mailbox covers (that you apparently need to put your own holes in and zip tie to the mailbox to make work), thin blankets with photoshopped pictures of cows printed on them, welcome mats with the same images, highland cow shaped planters that a reviewer said were practically made of Styrofoam. Most of the items had no reviews. I also know people who are paid by Amazon to write reviews in return for free products. I go to Reddit anymore for honest reviews.

I shop on Aliexpress for some craft items and Amazon is looking so much like that online retailer these days. Except Amazon is merely a middleman for drop shippers and is charging more for the items. If I want the same sketchy fare, I’ll order directly from Aliexpress and pay much less for the gamble. Also, I found on Sunday - Etsy is selling the same offerings. So, I sure wasn’t surprised to see them mentioned in economic dire straits just a few paragraphs down in today’s MNB. I’m willing to pay more for higher quality goods from Amazon and Etsy – they are just not selling them and I feel it will get worse. Sidenote - with all of the programming with ads on Prime these days, I’m considering cutting Prime loose in February. I didn’t get involved with streaming just to get socked with more ads for a service that I’m paying for. Not impressed these days.

Last week we reported that Sen. Elizabeth Warren (D-Massachusetts), Sen. Mazie Hirono (D-Hawaii), Sen. Cory Booker (D-New Jersey), Sen. Bernie Sanders (I-Vermont), Rep. Summer Lee (D-Pennsylvania), and Rep. Alexandria Ocasio-Cortez (D-New York) all have urged the Federal Trade Commission (FTC) to reject the proposed acquisition by Kroger of Albertsons, leading one MNB reader to write:

I’m just wondering, do Kroger and Albertsons have overlapping banners in these markets?  I didn’t think they did, so if not, how are the consumers they represent getting hurt?

I'm old-fashioned about this.  I think that politicians, while naturally should represent the needs of their own constituents, also need to pay attention to the bigger picture.  If something is bad for the country, even if it is good for their state or district, they ought to vote against it and then make the case back home.  To do otherwise, to my mind, is irresponsible and small-minded.

On another subject that we talk about a lot here on MNB, from reader Howard Schneider:

In uncertain times, loyalty programs are more important than ever. Not only to enhance consumers’ perception of value, but customers who are invested in a brand’s program are far less likely to defect because of pricing or holiday promotions.

On the subject on how egg prices may go up again, one MNB reader wrote:

Gosh.  Monoculture.  Again.  How many more times does it take before we realize that it is unsustainable?

Add a healthy dose of overcrowding and lack of concern for animal welfare in the name of profits and we have.....a recipe for a biological disaster.  Again. 

(I am omni....but vegans are dealing with shortages brought about by monoculture as a profit mechanism, too.)

Responding to Scott Moses' guest column last week, one MNB reader wrote:

There is no denying that C&S and Haggen are two very different animals.  I believe a more important debate is whether a wholesaler with relatively scant retail operational experience has the bandwidth to run a 400 store chain —with stores that in many cases will be competing with a Albertsons/Kroger stores that have been ‘synergized' by the same merger that created them.

While it is true that some wholesalers have been successful operating corporate stores, other wholesalers have abandoned that business and returned to their core competencies, as retailing requires a different set of skills and resources.  

From another MNB reader:

"I don't think the Haggen-C&S comparison is fair."

Depends on what is being compared. C&S is much bigger, and will operate known banners, two advantages over Haggen. But the comparison is valid in this sense - neither Haggen nor C&S had/have a track record of successfully operating large numbers of retail stores. That's the comparison I think the FTC will focus on. What is there in C&S's track record that gives the FTC (and eventually, I'm sure, the courts), that C&S can operate these stores successfully? They might fail in whole, or the stores might be sold off in parts, creating a number of small retailers that can't compete. The FTC will say that either outcome would lead to Kroger/Albertsons dominance in the affected markets, which the FTC will say would hurt consumers, workers, and other retailers.

C&S has advantages over Haggen, but I'm not sure they're advantages that matter very much.

MNB reader Doug Morales chimed in:

Always appreciate a different perspective, and creditably for acknowledging his current role w/ the Albertsons group.

No way could I argue his points on the Haggen/C&S comparison, he is correct on those differences.

But and you had to know this was coming, for this article he’s only looking at one piece of this puzzle.

I agree it is a point that will grab instant reaction and thus he’s casting a narrative based off this, which is what he should do representing that side.

What’s not discussed enough is the impact that this merger will have regarding competition in the marketplace.

I live in suburb south of Portland, OR-Wilsonville and for the better part of a decade we’ve had a Safeway and Fred Meyer to choose from. When the Albertsons/Safeway deal happened,  they closed the newer Albertsons location, and it has remained closed this whole time.

I do believe another store could survive in the town of this size, but that has never been an option. The property is owned by Albertsons and why would you let another store come in and compete against the Safeway.  Now talk of the merger with Kroger and it is even more unlikely this town will see another choice outside of the Albertsons/Safeway/Fred Meyer company.

This situation is hardly unique, there are many examples of this across the western US.

Now granted not knowing how the breakout will occur is certainly a factor, but for the consumer that is the heart of the issue.

On the subject of c-stores improving their foodservice offerings, one MNB reader wrote:

Agree with you that Foxtrot is a unicorn in the convenience store genre. Begs the question why a larger entity like 7-11 couldn’t disrupt its own category by inventing a new brand with a radically different concept like Foxtrot. Then again, this points to the systemic difficulty large organizations have on the requirement over time for radical differentiation, reinvention and innovation. As much as there may be claims by larger convenience chains about improvements to food quality and assortment, these are tweaks, half measures and baby steps rather than disruption of their supply chain traditions.

Thus why Foxtrot may continue to carve its new segment ownership of super premium food and highly curated packaged food/beverage assortment in a much refined store-plus-e-commerce model.

The recent marriage with Dom’s will be fun to watch – two concept innovators in food retailing working to scale the enterprise.

Responding to yesterday's story about a mobile grocery store - funded by public institutions - serving Atlantic City, since that community does not have a supermarket, one MNB reader wrote:

You know Atlantic City is our old home turf. It is the definition of a food desert. There hasn’t been a real supermarket in the city itself for many years, although there are a couple on the island in adjoining towns (the AP article gets that a little wrong, but they would be hard to get to via public transportation and pretty pricey). I’m curious how well other stores that have been state subsidized have done — do they survive in food deserts or do they eventually leave because they can’t make a profit?

And, this reaction to my FaceTime yesterday about getting a Yellow Pages in the mail, one MNB reader wrote:

I do the same thing every year.  Put in the drawer in my office and next year throw it away when the new one comes.

But the important question is why are businesses still paying for this anachronistic example of the past.  I just wonder if to get listed on the virtual book you must pay for the physical book?

So, I will keep my yellow pages and remind myself of land lines, party lines, and looking for information in the yellow pages.

And from another MNB reader:

You are old enough to most likely have been in newspapering when we spent a lot of time strategizing about how to sell newspaper ads against the Yellow Pages. They were a prime competitor. Looking back now it seems like it was a duel among the walking dead in which both ultimately lost.

On the subject of self check-out, MNB reader Rich Heiland wrote:

I am ceasing to be a fan. I go to Acme, Giant, Aldi, Wegman et al. Each checkout system is different. Some, if you put your own bag in the bagging area, tell you to remove it. Some even freeze the system. At one store one of the helpers told me to scan an item first, then put it into my own bag then put the bag in the bagging area. If I pause for even five seconds it tells me to "finish and pay." Add to this that often the helper for that area is doing double duty and is off somewhere. I am not a fan of monopolies but can't help thinking it would be nice if there was one kind of scanner.....

From another reader:

Grocery retailers should make sure the associates they assign to self-checkouts still walk around to make sure all customers are greeted and not having any issues with the process.  They should also help customers queue up and then identify the open self-checkout machines when customers approach the area.

And, reacting to yesterday's piece about child labor in the chicken processing business, one MNB reader wrote:

This is sickening. It’s 2024 and businesses are operating like it’s 1924 so that executives can pad their margins and bonuses. And because there aren’t real consequences they will keep taking advantage of desperate people in need of a paycheck. Smart money says that these are the same greedy executives that want to ‘close the border’.  Put them in jail. Make it hurt.  They are a disgrace.

You're right.  It is disgusting.  But in so many ways, in so many places, there are forces that wish to return us to the 50's, 40's, 30's and before.

And, reacting to my interview with Ralph Nader, one MNB reader wrote:

The Ralph Nader book is on my Christmas list !!


And from another reader:

Thank you for the interview with Nader, I was impressed that you received the interview.

I attribute it to luck and a publicist with whom I've worked in the past.

MNB reader Tom Kroupa wrote:

Your interview with Ralph Nader was soooo good. Nader has done so much to hold companies and governments accountable. Indeed, he set the standard for measuring integrity. Hard to believe he is almost 90 years old!