Hey Snackers,
A Bug's Life is expensive – also: great Pixar movie. High-tech bug farm Ÿnsect (intense) just raised an extra $224M to do the worm.
Stocks ticked up despite ongoing stimulus uncertainty. President Trump made comments supporting individual aid measures, while House Speaker Pelosi pushed for a broader package.
Outdoing everyone (10 times over)... Yesterday, JPMorgan Chase announced that it'll spend $30B over the next five years to help close the racial wealth gap. That's the biggest monetary commitment any company has made to advance racial equity by far.
Pull up the stats... In 2016, the net worth of a typical white family was ~10X greater than that of a typical Black family ($171K vs. $17K). The legacy of slavery, discrimination and the fact that Black families are more likely to be denied mortgages all contribute to this massive gap in generational wealth-building. So:
The purpose of the corporation has changed... For decades, public companies were all about returning value to shareholders through profits. Generally, more profit = more dividends and/or higher stock price. The $30B that Chase pledged to spend over the next 5 years represents ~83% of its total 2019 profit ($36B). But it might just be enough to change JPM’s image of "big bad corporation" into "big good corporation." That's strategic.
Googling "how to be special"... First, change your name. Dollar General is tired of selling you $2 necessities like Cool Whip and Drano. So the discount chain is launching "Popshelf" (so fun, so fresh) — a store aimed at higher-end shoppers who still love a good deal. Inside, it looks like a mashup of Ulta Beauty and Blick Art Supplies. Hence...
The thrill of the hunt... DG wants to cash in on the "affordable splurge" treasure hunt experience that TJ Maxx thrives on. Most Popshelf items will cost less than $5 and will be changed out on the reg to surprise customers (and encourage more visits). Instead of rushing out of one of DG's ~16K stores with Clorox, you're spending an hour in Popshelf browsing scented candles and charcuterie trays. The fun experience leads to more spending.
Nail the target, then expand it... Dollar General is living its best life with its lower-income target customers. Wallets are corona-hurting, so DG's thrifty basics are winning. Sales jumped 19% last quarter and DG stock hit at an all-time high yesterday. This growth means it's a perfect time for DG to reach beyond its tapped-out customer base to wealthier shoppers.
The good kind of ghosted... Grocery hero Kroger is getting into the Halloween spirit with the debut of two "ghost kitchens" — aka, delivery-only restaurants. Kroger is pivoting from generic pasta and frozen pizza to e-nnovation with Casper-like kitchens.
Left on red (cabbage)... Kroger's collabing with ClusterTruck (lol), a ghost restaurant service that'll set up its kitchen in two Kroger stores. It's a smart, low-lift way for Kroger to test out the prepped meals delivery/pick-up concept. Meals have more profit-potential than groceries: Bread + avocado = $3. Avocado toast = $12. Womp.
The lines between grocery and restaurant are getting hazy... Kroger is a grocery chain trying to get into prepped meal delivery. Ironically, restaurant delivery services like Doordash are now getting into grocery delivery, too. We've seen this trend accelerate in the pandemic — restaurants closed for in-store dining, and started selling grocery items like olive oil and bread to survive. Now companies are seeing that the more food-related-anything you can drop at a doorstep, the better.
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Earnings expected from Infosys
Disclosure: Authors of this Snacks own shares of JPMorgan Chase and Moderna
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