The Drive-Thru: Lowe's worker morale plummets, Target's back room nightmare continues, and McDonald's invests millions to speed up the drive-thru
Hello from The Drive-Thru, Business Insider's weekly newsletter about everything you need to know about shopping, fast food, and more. This is Kate Taylor, senior
Every Friday, I'll be giving a rundown on what the largest retail companies in the world are up to, and how these decisions impact everyone from Wall Street to grocery-store cashiers.You can sign up to become a Drive-Thru subscriber here. Let's get into what happened this week!
Lowe's restructuring is killing morale.
Áine has a deep dive into a restructuring at Lowe's that is driving away workers. Workers told Áine the company is eliminating roles, replacing full-time positions with part-time jobs, and rolling out a chaotic new scheduling system. According to workers, some of these changes are thinly disguised layoffs.
"It's the way corporate America works and we expect it, but no one likes it when it happens to them," said a former employee. According to this employee, Lowe's used to feel like a family; the changes convinced them to quit the company earlier this year after eight years on the job.
Lowe's restructuring is another entry on the endless list of cost-cutting measures that can end up being dangerously short-sighted. Even seemingly minor changes can have a huge impact on morale - or indicate bigger problems. 3G reportedly cutting off workers' Kraft cheese supply might seem like a minor quibble, but it reveals bigger strategic mistakes around cost cuts throughout the firm's Kraft-Heinz merger.
Morale sounds intangible and touchy-feely, but it can have concrete consequences if stores lose seasoned workers or are unable to fully staff locations. Lowe's is clearly worried - the CEO sent out an employee engagement survey on Thursday, soon after Áine's story went up.Read Áine's full report here, and get in touch at email@example.com if you've dealt with similar cost cuts on the job.
Inside Target's modernization nightmare.
Shoshy got her hands on Target's "Bible" for modernization. It's a 54-page document that spells out the chain's new stocking system, providing a window into Target's more general restructuring.
Unfortunately for Target, the plan isn't playing out as hoped. Following Shoshy's reporting on how modernization has created crowded and sometimes dangerous backrooms, workers said that stores started getting surprise visits from company inspectors and managers over the last week.
I'm guessing that a lot of inspectors are not liking what they're seeing. Shoshy has been getting pictures of Target back rooms around the US, and they looks pretty horrifying. If you need a visual for how corporate strategies can have massive, unintended negative effects on workers and stores, click here.
McDonald's is spending millions of dollars to speed up drive-thrus.
I got the scoop on a new McDonald's initiative to convince franchisees to update their drive-thrus. The most interesting nugget is that McDonald's is lowering the number of cars needed to qualify for a side-by-side drive-thru.
It sounds wonky, but it hints that McDonald's has realized that it can't just focus on kiosks and mobile ordering to boost traffic.McDonald's has done some showy deals to improve drive-thru times, acquiring Apprente and Dynamic Yield this year. But, sources tell me that the most impactful changes are behind the scenes, with a back-to-basics focus on menu simplifications and rewarding employee speed.
Taste test of the week.
Benihana feels like a throwback in 2019, as omakase counters, Korean BBQs, hot pot chains, and bubble tea shops enter the American mainstream. Irene visited to try and make sense of where exactly the sizzling chain fits into the modern restaurant landscape.
Irene's take: "Benihana is like my parents' generation of Asian immigrants to the US. It had to assimilate in order to have a chance of success in this country, and as a result, lost a lot of its home country's culture.
"But most importantly, it paved the way for the next generation to make an even bigger impact."
Piper Jaffray's biannual survey of American teenagers is out. Apparently, teens love Crocs! The polarizing shoe brand tied for seventh place among teens' preferred footwear brands, up from 13th place last year.Shoshy visited a Crocs store earlier this year to understand Gen Z's fascination with the shoe. She left a Crocs convert. If you don't understand why Crocs' sales keep growing, you should read about her experience.
I wish I wrote this.
Victoria's Secret is laying off roughly 15% of its corporate staff in Columbus, Ohio, according to a New York Times scoop. The cuts have reportedly affected about 50 people.
The lingerie brand has been hit again and again over the last few years, with negative headlines on everything from ex-CMO Ed Razek's comments about transgender models to L Brands founder and CEO Les Wexner's ties to convicted sex offender Jeffrey Epstein. With the layoffs, Victoria's Secret seems set to start revealing what its promised "new direction" will actually look like.
London-based Mary Hanbury - who has reported extensively on Victoria's Secret's highs and lows - once said that Columbus, Ohio, was the city she most wants to visit in the US. I'm not convinced, despite Columbus' reputation as the fast-food menu test capital of America. However, I think we would all love to understand what is going on at Victoria's Secret HQ right now.
Everything else you need to know.
- Amazon employees are ditching the company to make even more money by helping others understand the e-commerce giant.
- Lidl subtweeted Whole Foods with an announcement that it will give its part-time workers medical benefits.
- Áine and Rich Feloni talked to Dick's Sporting Goods CEO Ed Stack about the company's evolving approach to guns.
- LuLaRoe founder Deanne Stidham's life is even weirder and wilder than you imagined.
- Gen Z killed Forever 21.
- Yandy is selling a Sexy White Claw costume to pair with a Sexy Beyond Burger costume.
- Costco gives employees a special cake for their 25th work anniversary.