I mentioned the other day that the big companies launching retail media networks and looking for new revenue streams will be able to put smaller and independent retailers at a disadvantage.
One MNB reader responded:
Appreciate that you recognize that these advertising vehicles favor the large retailers. They also favor large suppliers. Costs to participate in theses retailer owned advertising platforms are often cost prohibitive for small suppliers.
Between slotting fees, swell allowance charge backs, data access fees (often required to purchase) and now advertising fees, small suppliers have an enormous disadvantage to large conglomerate CPGs. The further harm to retailers as they pursue these “alternative” revenue sources is a homogenized assortment.
Along these same lines, we cited a Reuters story the other day about how “Ahold Delhaize has hit ‘roughly half’ its goal to grow revenue from businesses beyond grocery stores to 1 billion euros by 2025 … an effort focused on selling ads on its supermarkets’ websites and monetising insights on consumer data.”
The story quoted CEO Frans Muller as saying that Ahold Delhaize, which owns supermarket chains including Stop & Shop in the United States and Albert Heijin in the Netherlands, uses revenue from advertising to keep food prices lower as inflation persists in Europe and the U.S.”
One MNB reader reacted:
I find it interesting that they state keeping prices down as a benefit of this new revenue stream. SNS has the highest pricing in their markets. I find this a corporate disconnect with their consumer.
Imagine what their prices would be without the new revenue streams.
Yesterday we took note of a Wall Street Journal report that “companies’ mentions of green and social initiatives during earnings calls have fallen off sharply in recent quarters, reversing a more boastful approach taken over the past few years amid intensifying pressure from some investors and conservative activists.”
I commented, in part:
Diversity can be smart business because it means the people in the room where it happens actually reflect a variety of backgrounds, upbringings, and perspectives, which means that leadership does not represent a monolithic view.
Sustainability can be smart business because more often than not, these initiatives save money. They require an initial investment, but reflect intelligent long-term thinking.
A focus on social issues can be smart business because a company’s existing and potential stakeholders – employees and customers – are affected by them. One of the things that most businesses try to do is expand their customer base so they can grow their sales and profits.
I would argue that it is entirely fair to suggest that factoring diversity, sustainability and social issues into a business’s operations may not be in synch with achieving short-term profits. Rather, it requires a more long-term focus.
For me, the bottom line is this. If people want to invest in companies that put short-term profits first, that do not consider diversity, sustainability and social issues when developing their strategic priorities, that’s fine. Invest in such companies. But if you want to invest in companies that do pay attention to such things, then you can do that.
MNB reader Robert Wheatley wrote:
I would add as orange sky and choking smoke over New York City attests, the impact of global warming is no ruse and we are running perilously close to blowing past the Paris Accords ceiling on the way to irreversible climate impacts — and the trillions in costs that will create to the global economy. Not counting the societal impacts for nations in the south who will be hardest hit, upending their agriculture infrastructure viability.
Businesses have an urgent obligation to be part of the solution in reducing emissions now, not later. Sustainability readiness is good for bottom lines, great for competitive advantage because consumers want sustainable choices, and vital to avoiding the disastrous consequences rapidly escalating carbon impacts could unleash if we fail to appreciate the horizon of change bubbling up around us.
And, on another subject, an MNB reader wrote:
Agree with your sentiment that print coupons are passé! I pulled out of FSIs recently – a 30% price increase for distribution and insertion fees was the kicker.
That said, there are certain demographics of the population that still shun digital coupons – i.e. older, lower income people. So may depend on your consumer target before fully pulling out of print coupons.
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