Retail Radar 27-Feb-2024

Welcome to "Retail Radar," your weekly insights offering innovative solutions and forward-thinking strategies to navigate the dynamic retail landscape, helping you lead effectively and stay ahead in an ever-changing market.

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Top of Mind - Is Washington State Overreaching on the Kroger – Albertsons merger?

A bill to protect Washington state grocery workers, presuming disruptions from the Kroger-Albertsons merger, is advancing to Washington State Governor Inslee's desk.

This legislation mandates that most grocery workers be retained for at least six months following the commencement of store operations under the new merger. Kroger and Albertsons plan to divest 413 stores, including 104 in Washington, as part of the merger process.

Representative Mary Fosse emphasized the bill's role in providing stability for workers who played a critical role during the pandemic.

The bill also stipulates compensation for employees who are laid off. Some lawmakers, however, view this measure as an overreach of government, suggesting it could have broader implications beyond the Kroger-Albertsons merger. The $25 billion merger is currently facing legal challenges, including lawsuits from the states of Washington and Colorado.

Several issues exist, starting with outgoing Governor Jay Inslee, who is in his final term with elections set for November 5, 2024.

• Inslee’s successor is left with the bill's consequences regardless of whether the K-A merger goes through.
• It’s a close race, with Attorney General Bob Ferguson being one of the top contenders. Ferguson launched the first attempt to block the merger.

This won’t stop the merger but will cost all parties, including state taxpayers, time and money. The legislation is a significant overreach of government controls and policy over a specific business sector.

The tl;dr of ENGROSSED SUBSTITUTE SENATE BILL 6007.

• t's very prescriptive and puts the government waist-deep into corporate governance for grocers in Washington State.
• The legislation establishes employment standards for grocery workers in Washington state, underscoring the critical role of grocery retailers in community welfare through health and safety standards.
• It requires incumbent grocery employers to provide successor employers with a list of eligible workers for a preferential hiring process, aiming to retain these workers for at least six months post-change in control to ensure stability and health standards.
• The act outlines provisions for a dislocated worker allowance, public notice requirements for changes in control, legal remedies for violations, and specific exemptions. It confirms it does not preempt stronger local ordinances, ensuring comprehensive protection for grocery workers during ownership transitions.

Rep. Suzanne Schmidt (R-Spokane Valley) commented, “I don’t think it’s the government’s responsibility or duty to dictate or to interfere in a buy-sell agreement.” I reached out to Rep Schmidt for a deeper discussion, but there is no reply from the representative or office.

There is an opportunity to bring the parties to the negotiating table. A wedding with shotguns is not helpful to anyone.

Tech Spotlight - Glympse

Glympse is the Seattle-based location-sharing app you probably use multiple times per week but may not recognize.

Known for its real-time, temporary location-sharing technology, it aims to transform food trucks into retail points of destination.

As it celebrates its 16th anniversary, the focus is on expanding into new markets, notably the burgeoning $2.2B food truck sector, which is expected to grow annually by 6% through 2030.

I interviewed Glympse's Chief Business Officer, Cami Zimmer , who highlights the company's innovative Premium Tags feature, designed to enhance visibility for food trucks by enabling real-time location sharing and advertising and promotional capabilities, thus turning every truck and surrounding location into a potential destination.

Everywhere becomes a destination.

The technology facilitates easier discovery and access to mobile vendors in vast outdoor settings like festivals or city landscapes and boosts customer engagement by making each visit a unique event.

This is evident from their successful collaboration with local fire departments during the holiday season, where the use of Glympse technology led to an 18% increase in food donations at Santa parades, showcasing the platform's ability to drive community engagement and participation.

It’s one data point, but it illustrates the opportunities for consumers to know where and when the trucks will be there.

Glympse differentiates itself from others like HERE Technologies by offering an end user-friendly solution that doesn't require extensive IT support, making it accessible for small businesses and individual operators. The service promises enhanced operational efficiency and customer satisfaction by providing live updates on service or delivery timings, essential for managing customer expectations in real time.

The trucks operate at an 8% margin with unique costs related to licensing, portable fuel, and maintenance. Adding the Glympse technology, which comes in at $99 annually, is one more item for trucks to budget.

A benefit of the service is confidence.

While the truck is en route, merchants and consumers receive a live and up-to-date view of the delivery timeframe. If the technology were added to drones, it would allow you to geo-fence a destination, alerting the consumer to be ready to receive. At the same time, the merchant could remotely activate a product or service, such as activating mobile service on a phone. Delivery trucks for select home goods stores use this today with high accuracy.

There are opportunities beyond food trucks to other mobile services like mobile dog grooming or auto repairs, emphasizing the potential of Glympse's technology to redefine how businesses (temporary, fixed, or mobile) interact with their customers by creating more dynamic and engaging experiences. The Glympse Premium Tags allow merchants to add promotions and other information, rounding out the experience.

Look for updates from me as the service is rolled out.

The Disruptors

In a world where food travels more than people and your dinner's passport has more stamps than yours, the FDA is laying down the law with FSMA (Food Safety Modernization Act) 204.

Imagine every bite you take backed by a digital ledger as meticulous as a librarian's dream, ensuring that the only thing you need to worry about is whether you want seconds. Welcome to the era where your food's journey to your fork is an open book, making each meal not just a feast for the taste buds but a victory for food safety.

With the FSMA 204 rule, part of the transformative Food Safety Modernization Act (FSMA) launched in 2011, the U.S. FDA is ushering in a new era for food safety and traceability in the United States. This rule specifically targets the traceability of high-risk foods, establishing stringent recordkeeping requirements to enhance the ability to rapidly track and trace food products within the supply chain. It's a clear signal from the FDA to the industry: be ready to hand over detailed traceability records within 24 hours upon request.

FSMA 204 pivots on three pillars:

1. Critical Tracking Events (CTEs): Key stages in the supply chain, including the growing, receiving, transforming, creating, and shipping of food products, are now under scrutiny. Any business involved at these stages is mandated to maintain comprehensive traceability records.
2. Key Data Elements (KDEs): For each CTE, specific data points are required. These details are crucial for painting a complete picture of a food product's journey through the supply chain.
3. Traceability Lot Codes (TLCs): Every record must include a lot code, a vital identifier that traces back to the product in question.

The rule is technology-agnostic, not prescribing any particular method for maintaining these records. However, it sets forth guidelines that subtly guide the choice of recordkeeping systems, including a two-year minimum for record retention, the necessity for records to be in a sortable electronic spreadsheet format to aid in outbreak scenarios, and the requirement for records to be legible and available in both electronic or paper formats.

Enter IBM’s Food Trust, which has been used by Walmart and other companies to trace food supply chains using blockchain. IBM's Food Trust is a blockchain-based platform designed to enhance food safety, freshness, and sustainability by fostering transparency across the supply chain. They key benefit is the speed and non-repudiation of blockchain-based reporting.

Participants, growers, processors, distributors, and retailers securely share food origin details, processing data, and shipping information, thus improving food traceability, reducing waste, and increasing efficiency.

This regulation aims to standardize traceability recordkeeping across the food industry, improving the FDA's ability to prevent foodborne illnesses before they occur rather than merely responding to them. With an emphasis on tech-enabled traceability, including the potential use of blockchain technology, FSMA 204 represents a significant step towards more efficient, secure, and transparent food safety practices. This approach not only ensures compliance with vital regulations like FSMA 204 but also builds a future where food safety is incontrovertible and infallible.

Onward.

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