German Food Chain Faces Backlash After Airbrushing Crosses From Churches On Food Packaging

Europe’s war on religion has reached an absurd milestone.

According to the Telegraph, customers of budget supermarket Lidl have expressed outrage after the company airbrushed Christian symbols from packaging of its "Eridanous"-branded Greek-food line, which featured images of the Anastasis Church in Santorini, Greece, in order to remain "religiously neutral," as the company claimed.

“The German chain"s Greek food range features images of the famous Anastasis Church in Santorini, Greece, complete with its world-renowned blue dome roof."

Shoppers have taken to the company’s Facebook page to express their "disappointment" that the cross was photoshopped. One user, Daniel Novak, wrote: "I"m highly disappointed in a company that is bending over to cater to specific people. Why are you hiding from the history?”

"We are all to learn from history, removing it with Photoshop will cause the same mistakes of the past to be done over and over again."

One user demanded to know who the company thought it would be offending with the crosses.

“Steve West added: ‘Why have you taken the crosses off the top of Greek churches in your advertising?

‘Is there somebody you will think takes offence? There is. Me, Greeks and many others. I definitely won"t be using you again if you don"t reverse this policy.’”

Another asked why the company felt compelled to erase reality.

“And Daisy Matthews wrote: ‘Why are you erasing the reality from a photo?’

If there were products from Hindu, Sikh, Jewish, or Muslim countries with their symbols depicted on there I wouldn"t have a problem buying them.”

Still others said they felt discriminated against as Christians, and doubted that the company would treat an image of a mosque the same way.

“‘As a Christian I feel really hurt, discriminated against, upset and disappointed that you have done this, if it is the case I won"t be shopping at your store anymore.’

The "Eridanous" range features Greek delicacies such as olive oil, Moussaka, yogurt and gyros.”

In fact, customers have also pointed out that some of the packaging for Halal meats sold at Lidl appear to feature buildings with minarets, a piece of Islamic religious architecture. According to the Telegraph, the row has spread across Europe, with shoppers in Belgium and Germany criticizing the policy.

The company quickly apologized, but it did little to quiet customers’ anger.

"We have been selling our highly popular Eridanous own-label range in Lidl stores across Europe for over 10 years now, and in that time the design of the packaging has been through a number of updates.

"We are extremely sorry for any offence caused by the most recent artwork and would like to reassure our customers that this is not an intentional statement. In light of this we will ensure that all feedback is taken into consideration when redesigning future packaging."

But the Belgian arm of European TV and radio station RTL, which originally picked up the story after a reader who noticed the packaging wrote in, said it had been given a different statement.

Ironically, the company said it airbrushed the cross because it didn’t want to “exclude” customers of different faiths.

“‘We are avoiding the use of religious symbols because we do not wish to exclude any religious beliefs,’ it quoted a spokesman as saying.

‘We are a company that respects diversity and this is what explains the design of this packaging.’”

"Our intention has never been to shock," said the supermarket"s spokesman.

"We avoid the use of religious symbols on our packaging to maintain neutrality in all religions.

‘If it has been perceived differently, we apologize to those who may have been shocked.’”

Lidl’s experience is one that’s becoming increasingly common in the modern PC-dominated culture: Companies offending large groups of customers while actively trying to do the opposite.
 

"Robots, Drones" Mean Mass Layoffs For Whole Foods Employees

When describing the logic behind Amazon"s blockbuster acquisition of Whole Paycheck Foods, a deal that made the "greedy bastards" over at Jana Partners $400 million richer in just a few months, Credit Suisse analyst Stephen Ju explained that he views this acquisition as "an offensive expansion move to accelerate its progress in the largest consumer spend category. In other words, Amazon is paying roughly 3% of its enterprise value for an improved position in an addressable segment that amounts to ~$1.6 trillion according to the US Dept. of Agriculture’s ERS, especially as progress at Amazon Fresh (in terms of regional rollout) has been admittedly slower than we expected."

He may be correct in the long-run but in the medium-term, Amazon Foods faces major hurdles, including a significant slowdown in how much Americans spend at food and beverage stores...

... and the arrival of German mega-discounters Aldi and Lidl on US soil, eager to steal market share by offering products below cost, already prompting a panicked response by the likes of Walmart (see "The Germans Are Coming... And Their Groceries Will Cost Up To 50% Less Than Wal-Mart").

But the biggest risk facing the combined company in the short-term is the same one that follows every acquisition: "synergies" and how these will change the corporate culture at Whole Foods. In his letters to employees, this is what Whole Foods CEO John Mackey said:

Dear Team Members,

Today marks the beginning of an incredible new chapter in Whole Foods Market"s history. In my nearly 39 years as co-founder and CEO, I could have never dreamed of this happening, but I am excited to announce that Whole Foods Market has entered into an agreement to merge with Amazon at a terrific value for our shareholders.

This partnership presents an incredible opportunity to take Whole Foods Market"s mission and purpose to new levels and best positions our company and our Team Members for future success.

* * *

As you know, we are in a metamorphosis phase. While everyone processes change differently, this is an exciting new step to fulfill our higher purpose. Together, we have built an amazing company and have positioned ourselves to deliver outstanding value for Whole Foods Market shareholders -- which includes many of you.

But not all, and as Bloomberg reports the initial step in the integration will be wholesale "cost-cutting", i.e., mass layoffs to boost margins in what is already a cutthroat industry. Jeff Bezos "will try to keep the grocer’s reputation for premium fresh foods while cutting prices to shed its "Whole Paycheck" image." To do that, "Amazon expects to reduce headcount and change inventory to lower prices and make Whole Foods competitive with Wal-Mart Stores Inc. and other big-box retailers, according to a person with knowledge of the company’s grocery plans. That includes potentially using technology to eliminate cashiers."

As a result, Whole Foods employees are on edge about the monumental changes about to take place and as Reuters adds, some employees "expressed fears ranging from layoffs to the loss of their laid-back corporate culture."

They have good reason to be worried, because what comes next is a wholesale deflationary replacement of the existing labor force with "robots and drones."

Carmen Clark, 37, a six-year employee at a store in Mount Pleasant, South Carolina, said some workers worry that Amazon-led automation could lead to job cuts. "Everybody"s been kind of joking that it"s going to be robots and drones," Clark said of potential changes from Amazon, which uses robots in its warehouses and is testing drones for delivery.

For now, Clark said she is giving Amazon the benefit of the doubt. "I have purchased from Amazon for five years. It"s a good company," she said.

And she is right... if referring to consumers and shareholders. For employees it will be vastly different: Amazon is said to be considering extending the cost-cutting effort with the no-checkout technology it’s developing at its Seattle convenience store, “AmazonGo,” according to Bloomberg. The technology lets people pay with smartphones without seeing a cashier or going to a checkout kiosk, which would help Amazon differentiate itself in the brick-and-mortar setting and reduce labor costs at Whole Foods stores. The employees remaining would help improve the shopping experience, while terminating many of the company"s existing workers.

It is those same workers that Reuters approached for interviews in California, New York, Illinois, South Carolina and Rhode Island. While many said they had been told by managers not to speak to reporters, some expressed their concerns:

Some workers at the nonunion grocery chain wondered whether Amazon, known for its hard-driving culture, would mean big changes to their pay, benefits or employment. "I think that they are a very profit-driven company, so there might be some streamlining as far as labor," said Sasha Hardin, 28, of the Mount Pleasant store, who has been with Whole Foods for 6-1/2 years.

A Los Angeles deli worker in his 30s, who is expecting his first child this summer, is worried about layoffs. "I want to keep working," said the worker, who did not want his name used.

Whole Foods has a corporate culture that prizes inclusive decision-making, such as allowing workers to vote on benefits every three years and disclosing executive pay.  "I"ve heard that Amazon"s culture is really cutthroat. That worries me," one bagger at a Providence, Rhode Island, store said.

Another major question is how the cultural change will impact the shopping experience, and whether it will accelerate what is already its worst sales slump since going public in 1992. Speaking to Reuters, at least one customer was concerned that an Amazon purchase would further distance Whole Foods from its roots as a purveyor of premium, organic and specialty foods.

"This store has become a money-making machine," said Tony Castro, a 40-year-old private chef, who shops daily in Whole Foods" sprawling downtown Los Angeles store.

Ironically, none other than CEO Mackey predicted failure for Amazon as it tried to enter the grocery space: two years ago, Mackey predicted imminent doom for rival Amazon in the fiercely competitive grocery business. "Amazon Fresh is their Waterloo," said Mackey, known paradoxically both for his earthy passion for organic foods and his imperious business swagger. "What’s the one thing people want? Convenience. You can’t do that with distribution centers and trucks."

* * *

But no matter whether Bezos" gamble on "bricks and mortar" pays off, two things are certain: between the aggressive push by Germans to steal existing market share, and Amazon"s disruptive, "price-cutting" entry into the grocery sector, prices across the industy are set to slide, resulting in yet another deflationary impulse hindering the Fed"s tightening efforts, as noted yesterday:

Between Lidl and Amazon Foods, the Fed may want to revise its food deflation forecast

— zerohedge (@zerohedge) June 16, 2017

The other sure thing is that while the company"s employees count the days until the pink slip arrives, shareholders stand to reap the profits. As CEO Mackey said, "we have positioned ourselves to deliver outstanding value for Whole Foods Market shareholders." And none more so than the "greedy bastards" whom Mackey was blasting just a fey days prior.

As for Bezos" ultimate vision, Bloomberg sums it up best:

The deal is stunning many of Amazon’s closest observers and then, upon a moment’s reflection, finding a comfortable place in their understanding of the limitless ambitions and wily determination of Bezos, the world’s second-wealthiest man. In a sense, the surprising deal is preordained by his mission to construct the everything store: A company that delivers everything to everyone, at the best possible price and within the shortest amount of time.

In other words the creation of a monopoly unseen since the Gilded Age, and one in which the Trump adminitration may have a final say.

The Germans Are Coming... And Their Groceries Will Cost Up To 50% Less Than Wal-Mart

Back in February we reported that as America"s deflationary wave spread through the grocery store supply chain, the scramble for America"s bottom dollar was on, and it prompted America"s largest low-cost retailer Wal-Mart to not only cut prices, but to squeeze suppliers in a stealthy war for market share and maximizing profits, a scramble for market share which is oddly reminiscent of the OPEC 2014 price fiasco and is certain to unleash a deflationary shock across wide portions of the US economy.

As Reuters reported at the time, Wal-Mart had been running a "price-comparison" test in at least 1,200 U.S. stores and squeezing packaged goods suppliers in a bid to close a pricing gap with German-based discount grocery chain Aldi and domestic rivals like Kroger. Citing vendor sources, Reuters said that Wal-Mart launched the price test across 11 Midwest and Southeastern states such as Iowa, Illinois and Florida, focusing on price competition in the grocery business that accounts for 56% of the company"s revenue.

Notably, while Wal-Mart was considering cutting prices to match its competition, the near-monopoly retailer was also seeking offseting cost cuts from its own vendors, in what could lead to a deflationary shock that would ripple across the entire US grocery store supply-chain, with dropping prices leading to margin collapse inside the entire industry, and eventually a default domino effect. 

And, as we also reported, as part of the relentless competition among the largest grocers Wal-Mart would have no choice but to proceed with even more aggressive price cuts in the future. The reason for this is that Germany-based discount grocer Aldi had emerged as one of the relatively new rivals quickly gaining market share in the hotly competitive US grocery sector, which already boasts Kroger, Albertsons Cos Inc and Publix Super Markets as stiff competitors on price.

A second Germany-based discount grocer, Lidl, was planning to enter the U.S. market this year, which together with German Aldi would pose a serious threat to Wal-Mart"s U.S. grocery business.

Now, thanks to a follow up by Reuters, we can safely assume that the upcoming grocer price war is about to turn nuclear because the abovementioned German discount grocery chain Lidl, which is opening its first U.S. stores this summer and is eager to capture US market share at all costs, said its products would be up to 50% cheaper than competitors... which are already caught up in a margin-crushing price war.

"This is the right time for us to enter the United States," Brendan Proctor, chief executive officer for Lidl U.S., told Reuters at a media event in New York late on Tuesday. "We are confident in our model. We adapt quickly, so it"s not about whether a market works for us but really about what we will do to make it work."

And as first order of business, what Lidl will do is generate huge losses by massively undercutting prices in hopes of capturing market share from established names like Walmart, Kroger and Albertsons. Think Uber but for grocery stores. 

There is already a case study of what happenes next, should the two German invaders prove successful. Lidl, which runs 10,000 stores in 27 countries, and German rival Aldi Inc have already upended Britain"s grocery retail market, hurting incumbents like Tesco Plc and Wal-Mart Stores Inc"s ASDA supermarket chain.

Looking ahead, Lidl said it would open its first 20 U.S. stores in North Carolina, South Carolina and Virginia, starting on June 15. Eighty more will follow in the United States within the first year, which Procter said would create 5,000 jobs. Analysts cited by Reuters estimate the company will have more than 330 U.S. stores by 2020.

The stores will be 20,000 square feet in size and have only six aisles. The retailer"s in-house brands will account for 90 percent of the products.

And while the latest German invasion may lead to dramatic changes within the hierarchy of established US grocers, one thing is certain: the US consumer is about to be the biggest winner yet again, as prices for (subsidized) groceries are about to plunge across the nation.