Shownotes
In this week's OmniTalk Retail Fast Five, sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Quorso, Veloq, and R&S Logistics, Chris Walton was joined by A&M Consumer and Retail Group Senior Directors Brandon Pezely and Alex Brakebill for their monthly Fast Five appearance to discuss:
• DoorDash's new native Shopify integration, and whether the partnership positions DoorDash to become the "marketplace of marketplaces" or creates new risks by distancing retailers from their customers. (Source)
• OpenAI's rumored screenless AI companion device, and whether a voice-first, always-on assistant represents the next major computing platform or simply another gadget consumers don't need. (Source)
• The European Union's new ban on destroying unsold clothing, and whether the regulation will meaningfully reduce waste or simply encourage retailers to find new workarounds. (Source)
• Kroger's new in-store wine shop concept, and whether premium, localized retail experiences can help differentiate the grocer in an increasingly competitive grocery landscape. (Source)
• Wonder's reported plans to go public at a $9 billion valuation, and whether Marc Lore's vision represents the future of food commerce or another overhyped retail technology play. (Source)
Plus, in this week's Lightning Round, Chris Walton, Brandon Pezely, and Alex Brakebill discuss Lionel Messi's World Cup legacy, National Ice Cream Day, Avengers: Doomsday, UFO sightings, and much more.
P.S. Be sure to check out all our other podcasts from the past week here, too: https://omnitalk.blog/category/podcast/
P.P.S. Also be sure to check out our podcast rankings on Feedspot.
Music by hooksounds.com.
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Transcripts
Hello, and welcome to this week's Omnitalk Retail Fast Five.
Speaker A:I'm Chris Walton.
Speaker B:I'm Alex Brakebill.
Speaker C:And I'm Brandon Peasler.
Speaker A:And together, the three of us are going to dig into everything from buying wine in Kroger to selling snake oil.
Speaker A:Producer Ella, let's roll this week's episode.
Speaker B:I'm more of a skeptic, I think, than a believer in this.
Speaker A:Yeah.
Speaker A:On the software side of things or the technology play here, I just don't get it.
Speaker A:It feels like vaporware to me.
Speaker C:I looked up the Terminator timeline, right?
Speaker C: hen I heard about this device: Speaker B:A device in my pocket that does this.
Speaker B:Called an iPhone.
Speaker A:$9 Billion valuation that seems high for a food business.
Speaker B:With the expansion of GLP1s, you know, I think people just eating less.
Speaker C:Overall, retailers should constantly be testing new ideas.
Speaker C:If you're a retailer and you're not testing new things all the time, you need to be thinking through your strategy.
Speaker A:Hello, everyone.
Speaker A:We have two folks from the a.m. consumer and Retail group joining us today.
Speaker A:Brandon Peasley.
Speaker A:How have you been?
Speaker A:This is, what, your second time on the show, Is that right?
Speaker C:Hey, Chris.
Speaker C:It's so good to see you.
Speaker C:Yeah, it's my second time on the show.
Speaker C:Just a quick reminder of who I am.
Speaker C:My name is Brandon Peasley.
Speaker C:I'm a senior director here at Alvarez and Marsal, part of the consumer and retail group.
Speaker C:I spent about 10 years in the retail industry with, like, pretty deep experience around merchandising.
Speaker C:So today I help grocers and mass retailers, convenience stores solve a lot of their most challenging problems associated with merchandising.
Speaker A:So, Brandon, do you feel, like, well prepared now that you've already had your first rodeo under your belt?
Speaker C:Yeah, I mean, I feel like your questions, there's always some curveballs, so I've got to be ready for those.
Speaker C:But we'll see.
Speaker C:You'll have to give me a rating at the end of the show.
Speaker C:Let me know how I do, all right?
Speaker A:Okay.
Speaker A:All right.
Speaker A:Yeah, we may have to do that.
Speaker A:And you're also helping us break in a newbie.
Speaker B:Today.
Speaker A:We're christening his maiden voyage on.
Speaker A:On the Omnitalk Fast five.
Speaker A:Your co amer, Alex.
Speaker A:Alex Brakeville.
Speaker A:How are you doing today?
Speaker A:Did your colleagues give you a good rundown of what to expect?
Speaker A:Are you just jumping into the deep end of the pool here on your own?
Speaker B:You know, I got a little bit of a rundown.
Speaker B:Excited to be here.
Speaker B:In fact, my colleagues wanted to hear all my answers before we got on the show.
Speaker B:So I've been, I've been workshopped several times so far on, on some of the themes here as we think about this.
Speaker B:But let me go introd myself.
Speaker B:I've been doing retail and analytics for about 20 years.
Speaker B:Focus on commercial excellence, think pricing, inventory strategies, assortment.
Speaker B:Between two stints and consulting.
Speaker B:I also ran these functions at Gap Inc. And at Carter's.
Speaker A:Oh, awesome.
Speaker A:Awesome.
Speaker A:Now, is that par for the course at A and M crg where they're, they're making sure that you guys are, are up to speed in terms of how you can answer these questions, or is it, is it, is it more unique to you?
Speaker A:Alex?
Speaker B:I think my team just wanted to see me squirm, to be honest.
Speaker B:But, you know, they thought it more interesting than the topic at hand.
Speaker B:So we decided to divert from the topic at hand to a more fun topic.
Speaker A:Okay, awesome.
Speaker A:Awesome.
Speaker A:All right, well, let's get to this week's Fast 5, which is of course brought to you with the help and support of the A and M consumer and retail Group, Miracle Corso, Ocapo Capital, RNS Logistics, and Valak.
Speaker A:In this week's Fast5, we've got news on OpenAI unveiling its first hardware device, the EU's new ban on destroying unsold clothing.
Speaker A:Kroger launching in store wine shops, and Marc Laurie saying Wonder is gearing up for an IPO after raising $650 million at a $9 billion valuation.
Speaker A:But we begin today with DoorDash's new direct integration with Shopify.
Speaker A:Headline number one is of course, of course brought to you by our good friends at the A and M Consumer and Retail Group.
Speaker A:The A and M Consumer and Retail Group is a management consulting firm that tackles the most complex challenges and advances its clients, people and communities toward their maximum potential.
Speaker A:CRG brings experienced tools and operator like pragmatism to help retailers and consumer products companies be on the right side of disruption.
Speaker A:All right, Alex and Brandon, here we go.
Speaker A:Number one, DoorDash has launched a native integration with Shopify, allowing any Shopify merchant with a brick and mortar US presence to add their product catalog to the DoorDash marketplace directly from their Shopify admin.
Speaker A:No separate onboarding, no manual catalog uploads, and no workflow disruption is required.
Speaker A:DoorDash is positioning this around independent local retailers, gift shops, sporting goods stores, specialty food shops, not big box chains.
Speaker A:Citing that 90% of merchants in its own economic impact reports say DoorDash has helped them reach new customers.
Speaker A:The Integration launches in the US first with international expansion planned in the months ahead.
Speaker A:Alex, I will start off with my usual 1 to 10 question.
Speaker A:1 To 10 on the impact of the future of retailing scale.
Speaker A:How big of a deal is DoorDash's integration with Shopify?
Speaker B:I'll give this a 4 or 5.
Speaker B:This isn't a revolution, but I think it is an improvement.
Speaker B:If I think about where this does matter, it matters for small retailers managing inventory.
Speaker B:The seamless inventory integration is a big thing I think particularly during peak periods.
Speaker B:It also allows for some types of retailers to get in front of customers they wouldn't get in front of before.
Speaker B:I do worry about the disintermediation of the customer from the retailer and over time the long term effects of this are so I don't know necessarily it's entirely a positive in the long run.
Speaker A:Interesting.
Speaker A:That's interesting take.
Speaker A:I'm not sure I agree with that one.
Speaker A:Brandon, what do you think?
Speaker C:Yeah, I mean I'm for, for like smaller retailers, I'm probably a little bit more bullish.
Speaker C:You know, probably like a six or seven.
Speaker C:I mean the option of like a turnkey solution.
Speaker C:Right.
Speaker C:You know, you don't have to do any work, you get access into another channel.
Speaker C:You already have customers there.
Speaker C:Right.
Speaker C:It's probably like a quick win to grow another channel pretty rapidly for a lot of these retailers.
Speaker C:I would say the risk, I agree with Alex's risk assessment.
Speaker C:I mean you want to hold on to your customers long term, is there a risk of disintermediation?
Speaker C:I think there could be.
Speaker C:The other thing I was thinking is, as I heard this question is, you know, Shopify has already demonstrated the value of scale, right?
Speaker C:Scale when it comes to technology infrastructure.
Speaker C:You know, DoorDash is building out the infrastructure for delivery and at the end of the day you're going to have to aggregate a lot of that scale to drive the economics down to compete with the Walmarts and the Amazons of the world.
Speaker C:And so I think as people latch on to these platforms, you know, scale is going to be an advantage that they collectively share.
Speaker A:Yeah, that's why, I mean you kid at it a little bit for me there, I'm actually more like in the 8 or 9.
Speaker A:And if I was being like really hard on myself, I'd be like the 7 too because I think Doordash is really well positioning itself for the future of commerce here particularly.
Speaker A:It's got its dash pass, it's making AI investments in generative AI search on its site.
Speaker A:It already has a high usage rate given the food delivery aspect of what it does.
Speaker A:And so it's very well positioned to become like the marketplace of marketplaces as you look five to 10 years out.
Speaker A:And adding Shopify expands that reach overnight.
Speaker A:And it does it in a very differentiated way.
Speaker A:Like, you know, these, these, these, these retailers, these Shopify retailers, they're not necessarily positioned to be, you know, on, you know, I don't know, like how many of them are on Walmart's marketplace, how many of them are on Amazon's marketplace, but at least gives DoorDash the same availability of those products or gives their, their consumers the same product availability that they'd get somewhere else.
Speaker A:So I just can't get over how well run of a company DoorDash is too.
Speaker A:That's the last point I'd make here because they seem to be on top of it and moving with the trends here ahead of everyone else.
Speaker A:But Alex, I'll give you the last word since I kind of disagreed with you to some degree in terms of my assessment versus yours.
Speaker B:You know, look, my, my skepticism comes from two areas.
Speaker B:I think this place is where it's very valuable, where the overlap of a retailer like a florist, for example, is low to these big players like Amazon, Walmart, so forth.
Speaker B:I think where you sell similar products, it's hard to compete.
Speaker B:And then the logistics challenges, I think for a lot of these stores in terms of delivery and fulfillment can be challenging.
Speaker B:And then, you know, I think the professionalism of the consistency of the DoorDash delivery model is, is challenging as well.
Speaker B:I think it's good sometimes and bad sometimes, and it's less consistent than one of these bigger players overall.
Speaker A:Right, right.
Speaker A:That's a good point too.
Speaker A:Yeah, that's a good point.
Speaker A:That's a good point to end on too.
Speaker A:There's a lot of devil in the details in this story too.
Speaker A:Like, yeah, you can, you can link up your Shopify store to DoorDash, but then getting the delivery actually coordinated is a whole another, you know, step in the process that you're bringing up.
Speaker A:So.
Speaker A:And it all matters in the mind of the consumer at the end of the day.
Speaker A:All right, headline number two.
Speaker A:Headline number two is brought to you by Miracle, the catalyst of commerce.
Speaker A:Over 450 retailers are opening new revenue streams with marketplaces, dropship and retail media.
Speaker A:And succeeding with Miracle, you can unlock more products, more partners, and more profits without the heavy lifting.
Speaker A:So what's holding you back?
Speaker A:Visit miracle.com to learn more.
Speaker A:Headline number two, OpenAI is developing its first hardware device, a portable screenless smart speaker built in partnership with Jony Ives.
Speaker A:Love Forum.
Speaker A:Love from.
Speaker A:Excuse me, Love from.
Speaker A: by GPT Live with the rumored: Speaker A:According to Bloomberg, the device is designed as a quote, new kind of home computer for the AI era.
Speaker A:End quote.
Speaker A:Sounds cool.
Speaker A:Not another Alexa competitor, but a proactive personalized companion that learns it's over, that learns its owner over time.
Speaker A:The speaker has a rechargeable battery so it can move from room to room and features mechanical elements that let it move on its own to convey personality.
Speaker A:Wow.
Speaker A:It will run On GPT Live, OpenAI's most advanced human like voice mode that can listen and talk simultaneously and adapt mid conversation.
Speaker A:Brandon, OpenAI wants its new at home hardware to feel like a living companion.
Speaker A:Are you buying or selling a screen?
Speaker A:This moving AI speaker as the breakthrough home device category we've all been waiting for.
Speaker C:Well, Chris, I would say I'm selling, right?
Speaker C:Are you first?
Speaker C:Yeah, yeah, selling.
Speaker C:But first I have to look at, you know, I looked up the Terminator timeline, right.
Speaker C:Like when I heard about this device, you know, how close are we to the terminator timeline?
Speaker C: So: Speaker C:So that's when things are supposed to start.
Speaker C:So keep that in mind.
Speaker C:I would have to say I've always been a big fan of voice.
Speaker C:Right.
Speaker C:You know, my oldest son, one of his first ten words was Google.
Speaker C:Just because we use voice so much in our home.
Speaker C:But I've always been a bit underwhelmed by kind of that experience.
Speaker A:Right.
Speaker C:So in my mind there's a number of like technology challenges that have to be solved on the voice side and on the AI side to make this, you know, viable for people.
Speaker C:But if it works, I mean, it could be a game changer.
Speaker C:We're already seeing people developing pretty close relationships with these AI devices.
Speaker C:But my last point is I feel like there's a little bit of risk, you know, as we continue to rely more and more on technology.
Speaker C:Where's the human to human element?
Speaker C:You know, when I look past back at my life, you know, I feel like all the most important moments in my life for people I loved.
Speaker C:Right.
Speaker C:And as we continue to rely more on technology, I just worry, you know, what happens to society is we start replacing relationships with devices.
Speaker A:Yeah.
Speaker A:You know.
Speaker A:Yeah.
Speaker A:It's funny you say that like I'm actually selling this too, but I'm like weeks selling it is how I'd say it, Brandon.
Speaker A:Like I'm, I'm like A week sell on this?
Speaker A:Because, like, you know, to that point, like, I think of the phone and I think about what you said in terms of social connections like the iPhone.
Speaker A:I was kind of poo pooing that back in the day.
Speaker A:And, you know, I'd say the phone probably makes us, you know, in some ways more connected to other people, but also less connected to other people, if you think about it.
Speaker A:So.
Speaker A:So, like, is this.
Speaker A:Is this the.
Speaker A:The next version of the iPhone waiting to happen that we just don't know yet, don't understand, can't comprehend it yet, by the same guy that gave us it the first time?
Speaker A:I don't know.
Speaker A:I, I'm.
Speaker A:I'm.
Speaker A:Here's why I'm skeptical, though.
Speaker A:Like, I'm.
Speaker A:I'm skeptical because I'm like, what's the last thing this guy gave us?
Speaker A:Like, you know, was it the Apple virtual reality goggles?
Speaker A:Because those didn't really go anywhere, you know, and.
Speaker A:And this feels.
Speaker A:The other part about this is it feels really rushed.
Speaker A:It feels really rushed, like they're trying to get this out, like on a schedule to keep going with the tailwind that's, you know, behind them from an AI perspective.
Speaker A:So.
Speaker A:But I don't know.
Speaker A:I.
Speaker A:So I'm selling it, but like I said, it's a soft sell.
Speaker A:But.
Speaker A:Alex, what do you think?
Speaker A:Are you.
Speaker A:Are you with us on the sell side of this, or are you going to hard sell?
Speaker B:I'm going to borrow money.
Speaker A:Hard sell.
Speaker B:I. I feel like I already carry a device in my pocket that does this called an iPhone.
Speaker B:And I don't need to have another device that follows me around.
Speaker B:And this one's mobile because I put it in my pocket and carry it in the first place.
Speaker B:The other side of this is I think the AI game, you're going to win based on the quality of your agent itself.
Speaker B:And I think OpenAI needs to be working on building a better agent.
Speaker B:You know, another news, they just had an agent go rogue and hack a company while they were testing it.
Speaker B:Got out of the sandboxing on their core product versus distracting themselves on hardware and trying to build a captive audience on a platform that may not even be around in a couple years.
Speaker A:Yeah.
Speaker A:Yeah.
Speaker A:Although.
Speaker A:Although, as you say that I wonder if, like, all those people who said, what do I need the iPhone for when I have my BlackBerry, I wonder if they'll have the last laugh here, you know, I don't know.
Speaker B:Well, as someone who had two blackberries, maybe I'm not laughing on that one.
Speaker B:But I do have an iPhone now, so.
Speaker B:There we go.
Speaker A:Two blackberries.
Speaker A:My God, your fingers must have been tired.
Speaker A:All right, headline number three.
Speaker A:Headline number three is brought to you by Corso.
Speaker A:Your stores are full of data, but are your teams acting on it?
Speaker A:Corso turns retail data into personalized daily to dos that drive sales, reduce waste, and improve execution.
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Speaker A:Visit corso.com to see Intelligent management in motion.
Speaker A:All right, headline number three.
Speaker A:The European Unions.
Speaker A:This one's interesting.
Speaker A:The European Union's ban on destroying unsold clothing, accessories and footwear officially took effect on July 19 for large companies as part of the broader Eco Design for Sustainable Products regulation, otherwise known as the espr.
Speaker A:According to Chain storage, large companies operating in the EU can no longer destroy unsold apparel, clothing, accessories or footwear.
Speaker A: ,: Speaker A:An estimated 44 to 9% of unsold textiles in Europe were destroyed before ever being worn, generating roughly 5.6 million tons of CO2 emissions annually, nearly matching Sweden's total net emissions.
Speaker A:I'm curious, you're wondering about Sweden's annual net CO2 emissions?
Speaker A:Instead of discarding stock, companies are pushed toward resale, donation, repair, or recycling.
Speaker A:Limited exceptions remain for safety risks or damaged goods.
Speaker A: that takes effect in February: Speaker A:Alex, will the EU's ban on destroying unworn clothing change how fashion retailers manage inventory?
Speaker A:Or do large companies just find quieter ways around it in the long run?
Speaker B:You know, I'm a bit of a more bark than bite here on this one.
Speaker B:I agree with the sentiment behind this.
Speaker B:When I went worked Gap, the CEO would frequently say it's a shame to build to.
Speaker B:To, you know, create genes in China or Asia, ship them overseas to the US and then have them unsold and then have to destroy them.
Speaker B:Right?
Speaker B:Like this is.
Speaker B:This is a terrible thing for the environment, but also terrible for the company.
Speaker B:Like it's a shame this happens, right?
Speaker B:But I think the problem is relatively small and it's more concentrated in fashion luxury retailers than sort of your bread and butter retailer.
Speaker B:There's a lot of other ways to get rid of inventory, and I think that where they're forced to, they will move inventory to other places and find ways to dispose of it, which may be actually problematic for those locations the inventory is moved to.
Speaker B:So if you move it to other countries and you dispose of it there.
Speaker B:They can be problematic and then, you know, it's a dose of reality.
Speaker B:Having worked in a few of retailers and understanding the texture and quality of the data, it is actually very challenging to understand all the inventory data that exists at these companies.
Speaker B:I think audit's going to be a real challenge for this.
Speaker B:And so I think this is more of a aspirational law than a reality of a law.
Speaker A:Right?
Speaker A:Yeah.
Speaker A:You have some of the same concerns I was thinking about, like the governance of this is going to be really tricky.
Speaker A:And then the law sounds like it's targeting the really high end folks too that don't want to, you know, send their stuff out to the TJ maxs of the world and all of that to get it, you know, help them work through it and that essentially they end up destroying it.
Speaker A:But yeah, to your point, you're a little skeptical of whether this will work and they'll just figure ways to divert those to other countries where they allow the, the destruction of the garments.
Speaker A:That's what you're saying?
Speaker B:Yeah.
Speaker B:Or they dump the inventory on other countries and impact the local economy and local retailers.
Speaker C:Right, right.
Speaker A:Brandon, what is your take here?
Speaker A:Do you agree with.
Speaker C:Yeah, yeah, I agree with Alex here.
Speaker C:I mean if you're an executive at a company, right, like your number one job is to maximize shareholder value.
Speaker C:And the question is, is it easier to kind of work around some of these regulations or is it easier to kind of solve some of like the, the demand planning challenges that have existed for, for a long time.
Speaker C:And I think for most of those retailers it's probably going to be a little bit easier to find some, some loopholes, hold back inventory, push it to other markets, some of that skeptical that it's going to have a lot of teeth.
Speaker C:But I agree with intent.
Speaker C:I mean like as, as, you know, fast fashion especially has, has created more disposability when it comes to fashion products.
Speaker C:You know, it's something that we should all think about and be cognizant of and, and figure out ways to, to make sure, you know, these things just don't, don't end up in the trash.
Speaker A:Yeah, it's coming from the right motivation 100%.
Speaker A:The other point I'd make here in closing too is like, you know, whenever you see legislation, legislation seems to always beget more legislation.
Speaker A:Both, you know, in the, in the arena in which it was first put forward.
Speaker A:And then also like overseas, like, you know, will we start to see similar types of legislation or maybe more evolved legislation here in the United States at some point to this regard.
Speaker A:So that's the other reason I bring this headline up this week, because it's just important to keep an eye on here that like the European Union is trying to make a dent in what is, you know, ostensibly a big issue.
Speaker A:Now what happens from there will wait and see and you know, what comes of it and what further legislation comes down the road is also an important topic.
Speaker A:All right, headline number four.
Speaker A:Headline number four is brought to you by Ocampo Capital.
Speaker A:Ocampo Capital is a venture capital firm founded by retail executives with the aim of helping early stage consumer businesses succeed through investment and operational support.
Speaker A:Learn more@ocampo capital.com headline number four.
Speaker A:Kroger is rolling out a new in store wine shop concept at 14 stores in its Cincinnati Dayton division featuring a curated selection of more than 130 wines and tasting bars staffed by train wine stewards.
Speaker A:Always wanted to say stewards on the podcast.
Speaker A:According to Grocery Dive, the KRoger identified nearly 150 locations across its banners last fall where customers were seeking a more robust premium wine selection and is starting the concept rollout at 14 stores.
Speaker A:The shop and shop format includes tasting bars staffed by trained wine stewards, as I mentioned before, and features wine from quote, acclaimed and emerging producers.
Speaker A:End quote.
Speaker A:Brandon is a curated 130 bottle wine shop with tasting bars.
Speaker A:The vino veritas Kroger needs to chart a new direction in its business.
Speaker C:You know, I'm actually pretty bullish on this idea, Chris.
Speaker A:Are you?
Speaker A:Oh my God.
Speaker A:Why?
Speaker C:Yeah, I mean I would say a, I love the idea of testing.
Speaker B:Right.
Speaker C:Like retailers should constantly be testing new ideas.
Speaker C:Right.
Speaker C:If you're a retailer and you're not testing new things all the time, like you need to be thinking through your strategy.
Speaker B:Second.
Speaker C:Right.
Speaker C:When you look overall at the grocery market like we're seeing a pretty clear bifurcation, right?
Speaker C:Like a lot of the, the value focused retailers are winning.
Speaker C:You know, like the Walmart's, all these the costcos of the world.
Speaker C:You also see like really strong growth among kind of like the natural specialty retailers and the guys in the middle are starting to get squeezed.
Speaker C:So I think for someone like Kroger who already has a lot of scale starting to push, especially in kind of like the right stores with higher income into creating differentiation within their stores.
Speaker C:Makes a lot of sense.
Speaker C:You know, I've been in a lot of Kroger's where they have a large wine selection.
Speaker C:It seems really, really busy.
Speaker C:So I think for the, for the right stores in the right markets, you know, create that stickiness with the customer.
Speaker C:It's not going to be a panacea everywhere.
Speaker C:You know, maybe it's a few hundred stores that, that it makes sense, but, you know, love to see the results on how it works out.
Speaker A:Got it.
Speaker A:So you're kind of bullish on this.
Speaker A:You think they could get to the 150 stores that they're, they're, they're, they're, they're talking about in the, in the press release.
Speaker C:Yeah, I mean, I think like when you look nationally.
Speaker C:Yeah, I mean, there's definitely some Krogers, high end Krogers in the, in the.
Speaker C:Where it makes a lot of sense.
Speaker A:Okay, got it, got it.
Speaker A:Okay.
Speaker A:And.
Speaker A:All right.
Speaker A:Wow.
Speaker A:All right, so.
Speaker A:Okay, so I agree with, I mean, I agree with you.
Speaker A:I applaud the effort.
Speaker A:I think that I would agree.
Speaker A:The one thing I fundamentally agree with you is I think the test is worth running.
Speaker A:The one thing I'm a little, little dubious about is I say, like, I hate when I see, like I hate when people use a rationale, like it's a test.
Speaker A:And it's okay because I think there are some things that are bad tests that you shouldn't do.
Speaker A:But I think this is one where, yeah, let's prove out the hypothesis.
Speaker A:Like, it could go either way.
Speaker A:You know, it's like putting your finger in the way and be like, hey, which way is this tusk going to go?
Speaker A:But I don't know.
Speaker A:I, I disagree with you, Brandon.
Speaker A:I don't, I don't know that, I don't know that this is going to scale and it's going to be worth the effort.
Speaker A:Because I, like, I was thinking about this in Ralph's, you know, because I go to, I go to California, I go to Ralph's and like, it's Kroger's largest owned subsidiary, for example.
Speaker A:And I have trouble seeing a wine steward operating in Ralph's.
Speaker A:Maybe in the right market, the right environment, maybe, but it just doesn't feel aligned to the Kroger experience to me.
Speaker A:But then again, you know, I think the other question that this headline raises is what is the differentiating part of the Kroger experience?
Speaker A:Is what, which is what you were getting at, Brandon.
Speaker A:Right.
Speaker A:Like you've got to move up market to differentiate yourself.
Speaker A:And so I guess they have to start somewhere, but I kind of doubt this is it.
Speaker A:And the other point I'd make is, and Alex, I'm curious to get your take on this as well.
Speaker A:How lost Kroger is in terms of trying to find their identity will be foretold to me by how much they talk about this in their next earnings call because it's still 150 stores, even if it rolls out.
Speaker A:But if they're like really stumping this, it's like, whoa, they got a lot of issues.
Speaker A:That's my take.
Speaker A:But Alex, what do you think?
Speaker B:Look, I'm actually positive in some ways on this, which is are you proven concept.
Speaker B:You look at H E B, they have a very similar concept.
Speaker B:They've rolled across lots of stores.
Speaker B:They've been very successful.
Speaker B:Kroger's done a similar thing with Crowbar.
Speaker B:Actually, I live in Atlanta, so they have a couple of these bars in their stores here.
Speaker B:Been successful.
Speaker B:I don't think it's a solution for all their stores.
Speaker B:And actually I think it needs to go with a set of localized options across different stores.
Speaker B:And so if you think of it as part of a broader localization strategy, I'm, I'm enamored with it.
Speaker B:If I think of it as the, you know, the panacea for all else, I'm not.
Speaker A:Right, right.
Speaker A:So it's.
Speaker A:So you basically are saying like, on the margins it'll be good in the locations where it's deployed, but at the end of the day, it's not going to reverse the overall sales trend at Kroger.
Speaker B:You know, it, it allows for stores where it makes sense to have something extra.
Speaker B:And I'll tell you, I grew up around the corner from a store that had a very extensive wine selection, sold $100 bottles of wine, 500 bottles of wine.
Speaker B:They did very successful.
Speaker B:So I think in those kind of stores, it adds something extra.
Speaker B:It allows for a very profitable product to get sold in a greater extent.
Speaker B:But they need to add it to a number of.
Speaker B:It can't be the only bull in the gun.
Speaker B:Right.
Speaker B:Need to have a number of bullets in the gun.
Speaker B:It's just one of them.
Speaker A:Right, right, right.
Speaker A:Brandon, any final thoughts here after we, we just wrapped up this discussion?
Speaker C:Yeah, I mean, I agree in terms of like, Kroger has a number of challenges that it's facing.
Speaker C:You know, I'm thinking, you know, Greg Ferrand is their new CEO.
Speaker A:Yeah.
Speaker C:And when you look what he did at Walmart, like he fixed a lot of the basics, right.
Speaker C:Like he focused on prices, he focused on in store execution and, and getting really clean, efficient, well run stores.
Speaker C:You know, I'd imagine he's taking that playbook to Kroger and this move to specialty, I'd imagine we're not going to hear a ton about it in their next earnings.
Speaker C:All but interesting to see, like, you know, how much they talk about it.
Speaker C:Right.
Speaker C:Hopefully they get back to a lot of like those fundamentals and driving a great customer experience.
Speaker B:Yeah.
Speaker A:And it's funny, I mean that's, that's kind of why I do.
Speaker A:What I do is like point these things out where like, if you do see it, then you have to raise an eyebrow.
Speaker A:It's kind of like one of those things where you don't want to see it because you want it to work like you guys are saying.
Speaker A:But if you start talking about it too much, then it tells you that's the only thing you have to talk about.
Speaker A:Right.
Speaker A:So that's that, that, that's the fascinating thing about why we do this show every single week.
Speaker A:All right, headline number five.
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Speaker A:Mark Laurie tells Fortune that his food haul company Wonder is quote ready and prepared to go public early next year, end quote.
Speaker A: locations since May: Speaker A:Materials reviewed by the information.
Speaker A: billion in cash through: Speaker A:Lori, however, pushed back on this framing, saying the economics are often misunderstood.
Speaker A:You do need to make substantial investment up front, he said.
Speaker A:The robotics, the ingredient library, all those suppress profitability in the long term.
Speaker A:But there's a big prize at the end of the day, end quote.
Speaker A:He also reportedly said same service area sales are growing roughly 20% year over year and that the cost of goods sold is tracking better than planned.
Speaker A:Alex Wonder, is it the idea none of us knew we needed or is it Pure snake oil.
Speaker B:Well, Chris, I have to admit, I know people that work at wonder, so I have to be cautious of what I say here.
Speaker B:But I'm more of a skeptic, I think, than a believer in this.
Speaker B:I. I do.
Speaker B:I do believe in the underlying fundamental that, you know, the operation of these restaurants is challenging.
Speaker B:If you can get scale there, you can create a lot of profitability.
Speaker B:So I believe in that.
Speaker B:And the scale of the ingredients, the scale of the.
Speaker B:The actual cooking process, the scale of the marketing delivery, all those pieces, that all makes sense.
Speaker B:I also know that when I order from, you know, order from UberEats or DoorDash, I only order things I've been to before in person.
Speaker B:And I find these, honestly, these generic food halls to be sort of uninspiring.
Speaker B:So I've been to a few of them in Atlanta.
Speaker B:I probably wouldn't go there unless I had to.
Speaker B:And I'm just a little concerned that it feels a little bit generic and bland versus something that people get excited about.
Speaker B:So there is a market for it.
Speaker B:I just don't think it's the scale of what, what, you know, Mark is saying it is.
Speaker B:That being said, he's a good salesperson.
Speaker B:He sold a couple companies for lots of money.
Speaker B:Those companies don't really exist in the form he sold them in anymore.
Speaker B: So we'll have to see in: Speaker A:Yeah, so there's two point.
Speaker A:There's two parts you bring up there, Alex.
Speaker A:I think that are.
Speaker A:That are interesting.
Speaker A:There's one part which is the food business itself, which, you know, I was looking at it like, you know, $9 billion valuation that seems high for a food business like Wendy's.
Speaker A:$1.4 Billion market cap.
Speaker A:Market cap.
Speaker A:7,300 Stores globally.
Speaker A:Jersey Mike's just IPO today.
Speaker A:I think they have over 3,000 or they just released their valuation that they're going for with their IPO.
Speaker A:They have over 3,000 stores.
Speaker A:So 9 billion seems really high.
Speaker A:So then you have to say, okay, what else is there?
Speaker A:Well, then there's the whole idea of, like, the food super app that you can, you know, order whatever you want on demand, which I like as an idea, but I just don't know that we're at a place yet where we've actually seen that come to fruition, because I'm not hearing anyone talk about or use it.
Speaker A:And so the next question I have for you and Brandon, maybe you can jump in here, too, given your experience.
Speaker A:I don't Want to throw you off too, but like 20% growth in your same store locations in year, basically.
Speaker A:What's your year two?
Speaker A:That doesn't seem very high to me.
Speaker A:Like, am I.
Speaker A:Am I nuts on that?
Speaker A:That seems really low to me.
Speaker C:No, I completely agree.
Speaker C:When you think like a lot of new restaurants, right.
Speaker C:That they've opened, like first year comp, you'd expect.
Speaker C:Right.
Speaker C:Especially if it's gaining a lot of popularity to be a lot, a lot higher than this.
Speaker C:I mean, I agree with like, the overall idea, like, being able to go to one place, get a variety of different food.
Speaker C:Like, as the guy with four kids, like, that sounds great.
Speaker C:You know, my kids could get everything they want, I could get what I want fast service.
Speaker C:I mean, I just don't know if the technology is there to really support that model.
Speaker C:And then to Alex's point, I mean, if you look at Mark Laurie's history, I mean, like, successful exit with.
Speaker C:With quidsy and with jet.com but a lot of those assets have been written off.
Speaker C:And so I am a bit skeptical in terms of, like, is the.
Speaker C:Is there really technology there?
Speaker C:You know, is it advanced enough to roll this out?
Speaker C:And when you start talking about the financials and the economics, I mean, if it looks like it's a bit of a tough road ahead, they'll have to continue to raise money and, you know, not profitability for.
Speaker C:For several years.
Speaker C:I feel like it's just a tough spot to be in.
Speaker A:Yeah.
Speaker A:And the crazy thing, I mean, is these are really smart people that are continuing to invest in this, but yet all three of us are saying, like, look at the pattern here.
Speaker A:You've seen kind of the pump, pump up the hype, up the.
Speaker A:The concept and then sell out and then see it go away.
Speaker A:And so are we looking at that again?
Speaker A:I think is a really realistic question that we have to be asking ourselves because, yeah, on the software side of things or the technology play here, I just don't get it.
Speaker A:It feels like vaporware to me.
Speaker A:I mean, you know, you're rolling up basically grubhub and a restaurant chain, like, that's not all that innovative.
Speaker A:And also, like, what's the utility against just using DoorDash to do what I want anyway?
Speaker A:So, like, I'm just.
Speaker A:I'm just not.
Speaker A:I'm not.
Speaker A:I'm not seeing it.
Speaker A:I can't.
Speaker A:I can't get my head around how it's valued at $9 billion at this point.
Speaker A:And so I feel like at some point somebody's gonna be Left holding the bag.
Speaker A:But I just, I mean, the thing that bothers me about this headline most of all is like, you know, at what point do people realize this and be like, no, Mark, we're not, we're not giving you this.
Speaker A:Like, we're, we're not let.
Speaker A:Making, we're not making you another multi, multi billionaire off this idea until you show us that you've got an actual sustainable business.
Speaker A:But any one of you guys want the last word on this one?
Speaker B:Look, I'll also throw in.
Speaker B:I think the macro fundamentals are interesting because with the expansion of GLP1s, you know, I think people just eating less overall.
Speaker B:And if you're in an industry where you're trying to sell more meals, he said something like, I want 21 meals a week being bought through my store.
Speaker B:You know, I think that's not the case anymore.
Speaker B:And so there's just real macro trends working against him in this industry.
Speaker A:Yeah, that's such a hype sound bite too.
Speaker A:I mean, that point, the point I come back to too, is like 20% growth in your same store locations.
Speaker A:Like I just looked, Adidas is doing 20% year over year growth in E Commerce.
Speaker A:So like, that's nothing comparatively.
Speaker A:Like you should be.
Speaker A:You should be, you know, far exceeding that growth rate.
Speaker A:What's that?
Speaker B:You're like 2,000%.
Speaker B:Then I'm going to get.
Speaker A:Yeah, right.
Speaker A:It should be right.
Speaker A:I mean, you guys are consultants.
Speaker A:You see these numbers all the time.
Speaker A:Like that, that should be a flag to you.
Speaker A:Okay, all right, well, who knows, you know, who knows?
Speaker A:All right, let's go to the Lightning round.
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Speaker A:All right, Alex, first one to you.
Speaker A: in extra time to win the: Speaker A:Or 1 nil, as they probably say in Europe in what may have been Messi's final World cup match.
Speaker A:What's your one sentence eulogy for Messi's World cup career?
Speaker B:You know, Messi, the God of football, I think he's shown a lot of glory over the years, but this was glorious.
Speaker B:But also a bit of a comeback to Earth.
Speaker B:A little humanity there at the end.
Speaker B:So maybe not the way we want to see him go out, but the way people go out in general.
Speaker A:Oh, really?
Speaker A:Okay, Very nice.
Speaker A:I like how you did that.
Speaker A:I like how you did that.
Speaker A:All right, Brandon, it was National Ice Cream Day this past Sunday.
Speaker A:How did you celebrate?
Speaker C:Yeah, so a little bit of context.
Speaker C:So my family, on Sundays, we always have dessert, right?
Speaker C:Like, we always have a nice meal.
Speaker C:We always make a homemade dessert, and it's summertime, and so we made homemade snow cones.
Speaker B:Right?
Speaker C:Homemade snow cones, homemade custard.
Speaker C:You know, it's a family favorite treat that my kids have, so that's how we celebrate.
Speaker A:You guys make homemade custard?
Speaker C:Yeah, it's actually pretty easy.
Speaker C:It's like four ingredients.
Speaker C:We toss it.
Speaker C:We have like an ice cream maker that, you know, you toss it in, freezes, you know, makes it in 20 minutes.
Speaker C:It's actually.
Speaker C:It's pretty good.
Speaker A:Oh, God, my wife's gonna be listening to this.
Speaker A:She's gonna go buy a custard making machine.
Speaker A:Any good?
Speaker A:Any flavors?
Speaker A:Are you.
Speaker A:What are your go to flavors?
Speaker C:Yeah, so for.
Speaker C:For the snow cone, we actually went to Hansen's a few years ago in New Orleans.
Speaker C:Amazing, right?
Speaker C:So we tried to, like, replicate some of the food that we really like.
Speaker C:So my go to favorite favorite is coconut ginger lime, which sounds really funny, but they're really good.
Speaker C:So give it a try.
Speaker A:Snow cones are awesome for flavor, experimentation.
Speaker A:Yeah, 100%.
Speaker A:Like, we.
Speaker A:I had something very similar like that when I was in Hawaii recently.
Speaker A:All right, Alex, Avengers Doomsday's trailer released on Monday.
Speaker A:What has you geeking out about it the most?
Speaker A:And if you're not a fan, what do you think people are geeking out about it the most?
Speaker B:You know, I am pretty excited about this movie.
Speaker B:The last.
Speaker B:The last Marvel movie I saw that I was excited about was the last Avengers movie.
Speaker B:I think the smaller.
Speaker B:The smaller story lines don't resonate as much, so there's so much to like, see in this movie.
Speaker B:I'm.
Speaker B:I'm actually geeking a little bit about the little teaser of Captain America at the end.
Speaker B:And I wasn't quite sure what was going on there, so I'm intrigued to see what's there.
Speaker B:And if Iron man shows up at all in the weird sort of same actor playing two roles view that could possibly happen, I think it's gonna be a spectacular.
Speaker B:Although I gotta admit, the current spectacular I'm working on is going to get tickets to the Odyssey and 70 millimeter IMAX film, which I have to wait a month for.
Speaker A:Tell me about it.
Speaker B:See that?
Speaker B:And hopefully the trailer will be there as well.
Speaker A:Tell me about it.
Speaker A:Yeah, man, I'm feeling the same pain.
Speaker A:I tried to get tickets this week.
Speaker A:I couldn't do it.
Speaker A:So I'm.
Speaker A:I'm not going to see it on imax.
Speaker A:I'm going to go see it with the family.
Speaker A:Just in the regular old theater experience, which I hope I don't miss out, but maybe I'll go see it at the IMAX later.
Speaker A:But, yeah, that movie is supposed to be amazing.
Speaker A:Yeah, I feel the same way about, about Doomsday too.
Speaker A:I'm pretty geeked up about it.
Speaker A:All right, Brandon, last one.
Speaker A:A meteorite that crashed into a New Jersey home reportedly contained alien world chemistry.
Speaker A:That's a direct quote.
Speaker A:Alien world chemistry.
Speaker A:What's the closest you have ever come to contact with aliens?
Speaker A:This conversation with Alex and I have excluded, of course.
Speaker C:Yeah, it's a great question.
Speaker C:You know, personally, haven't had a ton of close contact.
Speaker C:Thankfully, though, I had this experience once where I went to a friend's house and they were talking about a UFO sighting and they brought up their phone and it was one of like those really grainy images where you see.
Speaker C:You saw like lights in the sky moving around in strange ways.
Speaker C:Couldn't really tell what was going on, but after that I was like, I don't know what to say to you.
Speaker C:Like, so, really, really weird experience, but that's the closest I've come.
Speaker A:So your contact is looking askew at someone who said they had contact with an alien.
Speaker A:That's the best way to sum that up.
Speaker C:Yeah, yeah, best way.
Speaker C:Best way to sum it up first.
Speaker A:Yeah, right, yeah, that's probably what I would do too.
Speaker A:I'd be like, yeah, that's an alien, right?
Speaker A:Yeah, I see that on your phone.
Speaker C:Yeah, it's really clear.
Speaker A:Really clear.
Speaker A:Right, right, right.
Speaker A:All right, Ella.
Speaker A:Producer Ella, come on in here.
Speaker A:Which headline caught your fancy this week?
Speaker A:Which one floated your boat?
Speaker D:Yeah, well, Chris, as you know, I'm a fashion junkie.
Speaker D:So my favorite headline or thought provoking headline was the EU banning companies from destroying unsold clothing.
Speaker D:And I think this is such a bigger conversation around over consumption.
Speaker D:I mean, I think we'd all be lying if we said we weren't part of the problem.
Speaker D:I mean, I. I feel like I need a new outfit for every occasion.
Speaker D:Right.
Speaker D:I mean, why aren't I shopping?
Speaker D:Secondhand resale, thrifting.
Speaker D:Why don't companies make this a part of their company by donating to nearby places.
Speaker D:So I know that just in reality, as the shopper voice, it's really hard to hear you guys say that even with legislation in place, companies are gonna find these loopholes.
Speaker D:And it sounds to me as you're talking that this might just be a black hole and it might take the company to take their sustainability claims within their organization for the bigger change.
Speaker A:So, yeah, you're bringing up a really good point there.
Speaker A:Like, what it makes me wonder is like, do some of the high fashion houses just say, you know what, we're going to play to the consumer desire, like someone like you or someone that, you know, shares your same philosophy and say, like, you know what, we're going to change our practice and instead of just destroying the product, we're actually going to figure out a way to, you know, get rid of it in other through other means.
Speaker A:You know, and that could mean maybe, you know, having relationships with distribution partners that they don't currently have relationships with or putting their products out for sale at prices at which they don't currently ever sell them.
Speaker A:So, you know, will that happen?
Speaker A:I don't know.
Speaker A:It's a big if.
Speaker A:But maybe somebody, somebody that maybe is hard up on the financials one year, maybe they, they bite, take a bite of the apple.
Speaker A:Who knows?
Speaker A:All right, well, happy birthday today to Willem Dafoe, Selena Gomez, and to the actor who is routinely, routinely, as one would normally say routinely instead of routinely the best thing about every movie he is in, Skyler Girondo.
Speaker A:And remember, if you can only read or listen to one retail blog in the business, make it Omnitok.
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Speaker A:Brandon, if people want to get in touch with you, you know, pick the brains of anyone at A and M crg.
Speaker A:What's the best way for them to do that?
Speaker C:Yeah, of course.
Speaker C:Thanks, Chris.
Speaker C:Yeah, we'd love to hear from any of you.
Speaker C:Please reach out.
Speaker C:You can find us on Alvarez and Marsal.com or hit us up on LinkedIn, Alvarez and Marsal can consumer and retail group.
Speaker C:Or of course, reach out to Alex or myself directly.
Speaker C:I'd love to chat, love to talk with you.
Speaker C:Thanks, Chris.
Speaker A:Awesome.
Speaker A:Well, thank you both for joining producer Ella and myself today.
Speaker A:Alex, Brandon, it was great to have you.
Speaker A:Great to discuss all of the week's top headlines.
Speaker A:And until next week, stay tuned, everybody.
Speaker A:But on behalf of all of us here at Omnitalk Retail, as always, be careful out there.