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MNB - Morning News Beat Sponsored By retail news in context, analysis with attitude Friday, March 05, 2021 FaceTime with the Content Guy: Of Paramount Importance Kroger, Costco Report Strong Sales Growth Numbers Study: Where Amazon Goes, Increased Wages Follow Dollar Tree Plans 600 New Stores This Year Hy-Vee To Launch In-Store Nail Salons MNB Covid-19 Coronavirus Update E-conomy Beat FastNewsBeat Your Views: First Impressions An Invitation From The Content Guy OffBeat: Road Trip Read yesterday's news in the archive > S M L XL FaceTime with the Content Guy: Of Paramount Importance You're probably aware that a new streaming service launched yesterday - Paramount+. Except that it isn't really new. It is a rebranding of CBS-All Access. Except in this case, KC argues, the service is trying to make an impact in a crowded space by using a brand that may have less equity and awareness than the original. There's a lesson here… Back to Top What's your view? Kroger, Costco Report Strong Sales Growth Numbers • Kroger said yesterday that its total 2020 sales were up 8.4 percent to $132.5 billion, with digital sales that were up 116 percent to more than $10 billion. Same-store sales were up 14.1 percent. The retailer also said that it has 2020 profit of $2.6 billion, a 5.6% increase. In reporting its numbers, Kroger also said that it has "invested an incremental $300 million in 2020 that has raised our average hourly wage $15.50. Ongoing investment in health care, pension and retirement – which many of our competitors don’t offer – adds another $5/hour that brings Kroger’s total average hourly wage to over $20. We plan to invest an additional $350 million more in 2021 alone to continue raising associate wages." The Cincinnati Enquirer notes that "Kroger's growth was propelled by an epic shift of customers' food consumption habits amid the COVID-19 pandemic: nearly $1 of every $4 that Americans used to spend going out to eat has shifted away to food consumed at home – so that's $162 billion extra mostly going into supermarket coffers, according to the U.S. Department of Agriculture. In early 2020, Americans were spending 49 cents of their food dollars at grocery stores, they are now spending about 56 cents." • Costco yesterday said that its Q2 revenue was up 15 percent to $44.77 billion, on same-store sales that were up 12.9 percent. Earnings were $951 million, compared with net income of $931 million in the year-ago quarter. The retailer’s e-commerce sales rose 74.8% compared to a year ago, with the average ticket size increasing 11.9% company-wide. Back to Top What's your view? corporate drumbeat Study: Where Amazon Goes, Increased Wages Follow The New York Times reports that in areas where Amazon has a presence, "low-wage workers at other businesses have seen significant wage growth since 2018, beyond what they otherwise might have expected, and not because of new minimum-wage laws. The gains are a direct result of Amazon’s corporate decision to increase starting pay to $15 an hour three years ago, which appears to have lifted pay for low-wage workers in other local companies as well, according to new research from economists at the University of California, Berkeley, and Brandeis University. "The findings have broad implications for the battle over the federal minimum wage, which has stayed at $7.25 an hour for more than a decade, and which Democrats are trying to raise to $15 by 2025. For one, the research illustrates how difficult it can be for low-wage workers to command higher pay in the modern American economy — until a powerful outside actor, like a large employer or a government, intervenes." The Times notes that "a mounting body of research in recent years suggests that labor markets don’t work in practice the way they do in some economic models. Employees often have less information about their worth than employers, or face greater risks to changing jobs, or can’t readily move between employers the way a pure market assumes. These “frictions,” in economic jargon, often benefit employers over employees, pushing down wages below where supply and demand suggest they should be. "But that leaves room for other forces - in the form of political pressure, organized bargaining or a minimum wage - to push wages up." KC's View: I don't think there is any question that it is healthier for wages to be driven up by market forces than by government dictate, though this is not to suggest that there shouldn't be some sort of increase in the federal minimum wage. I've long been sympathetic to the notion that a one-store operator in Montana should not have the same minimum wage standard as a chain based in New York City … though market forces probably would mean that the NYC chain has to pay more than the minimum. I'm no economist, but I'm sort of intrigued by the idea that the federal minimum wage could be indexed to some measurement of states' individual economies, and after that to inflation … so that it is connected to reality on both ends. But this may require more nuance than is possible with the current crop of elected officials. Back to Top What's your view? corporate drumbeat Dollar Tree Plans 600 New Stores This Year CNN reports that Dollar Tree plans to open 600 new stores this year - 400 under its Dollar Tree banner and 200 in its Family Dollar format. Last year, it opened 400 stores, and it now has well over 15,000 locations. The story notes that "the announcement comes as the pandemic has taken a toll on many retailers and forced thousands of stores to close. But dollar stores have surged as economically-strapped customers seek out bargains on food, household essentials and other items … Dollar Tree has lagged rival Dollar General in recent years. Dollar General has been opening roughly 1,000 stores a year and now has upwards of 16,000 US locations." CNN writes that Dollar Tree also announced a plan "to crack the rural market by opening 50 new 'combination stores' that feature elements of Dollar Tree and Family Dollar outlets and sell a mix of merchandise — Dollar Tree's typical $1 seasonal items plus Family Dollar's food and essentials for more than $1. The concept is targeted at towns with 3,000 to 4,000 people, and Dollar Tree sees an opportunity to open around 3,000 of these stores … Dollar Tree has a treasure hunt-like atmosphere in stores and caters to suburban, middle-income shoppers. It carries primarily seasonal goods, toys, stationary, home decor, kitchenware, and party items. Family Dollar is tailored to lower-income shoppers in rural and urban areas, and stocks more food and household basics than Dollar Tree." KC's View: The domination of the value segment by dollar stores is something that traditional retailers have to factor into their strategies and tactic - the thousands of stores that are being opened have the potential not just for absorbing sales but also setting the terms of competition by establishing what a lot of folks will see as appropriate prices. Back to Top What's your view? corporate drumbeat Hy-Vee To Launch In-Store Nail Salons The Des Moines Register reports that as early as next month, Hy-Vee will partner with the W Nail Bar chain to begin opening nail salons in some of its stores. The retailer said that in addition to manicures, the salons will offer "pedicures, nail art, waxing and tinting," and will "follow the same safety protocols used in the chain's other salons, including ensuring cleanliness and operating at half capacity to ensure safe social distance." “Through our partnership with The W Nail Bar, we are revolutionizing the way customers shop in our stores by bringing engaging, experiential and convenient services to our customers,” Randy Edeker, Hy-Vee chairman and CEO, said in a prepared statement. KC's View: Never having had a manicure, I'm not absolutely sure about this, but I'm having trouble understanding how one can get a manicure in a salon while maintaining a six-foot distance. My daughter has been ...