Brands Brief: Grocery Chain Albertsons to Acquire Rite Aid


Top Stories

  • Grocery chain Albertsons agreed to buy the remainder of drugstore chain Rite Aid, creating a combined company would have about 4,900 locations, 4,350 pharmacy counters and 320 health clinics across the United States. The combined company would have a value of about $24 billion, including debt, with Rite Aid Chairman and Chief Executive John Standley as CEO and Albertsons Chairman and Chief Executive Bob Miller taking the role of chairman. (CNBC)
  • Amazon.com Inc. said its Prime credit card holders will get 5 percent cash back on purchases at Whole Foods, the same reward cardholders get on purchases from Amazon.com. The announcement from Amazon, which bought Whole Foods last year for $13.7 billion, follows a move to offer Prime members free two-hour delivery of Whole Foods groceries in four U.S. cities, with an expansion expected later this year. (CNN)
  • Newsweek magazine published a story detailing legal and financial concerns at the magazine and its ties to a Christian college, with several Newsweek staffers making known to management that they would quit if the magazine did not publish the article. A group of reporters and editors said they had faced managerial opposition to the story for weeks, and earlier this month Editor-in-Chief Bob Roe, Executive Editor Ken Li, and reporter Celeste Katz, who had all been investigating the magazine’s business ties, were unexpectedly fired. (The Daily Beast)

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B2B Marketing Exchange 7 a.m.
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New Report: How Americans & Investors Are Reacting To Market Volatility

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Advertising

How United Airlines is taking more video content creation in-house
Ilyse Liffreing, Digiday

United has found that bringing more resources, especially video, in-house has allowed it to bypass long lead times and back-and-forth calls on the phone with its agencies. Last July, United hired Megan Mitchell, previously head of social media and video for publisher TravelZoo, as senior manager for integrated digital engagement.

Media Shops Face an Identity Crisis as Clients Move More Work In-House
Patrick Coffee, Adweek

The next round of big-budget media reviews has begun, and beneath it lies an existential threat to the established agency business model. Last summer’s rumored wave is now a real-world tsunami encompassing billions in RFPs from brands like Marriott, Mars, McDonald’s, Microsoft, Mondelez and more.

Media and Entertainment

Newsweek Staffers Threaten to Resign, Claiming Company Tried to Silence Investigation of Owners
Max Tani, The Daily Beast

Several Newsweek staffers threatened to resign earlier this week, accusing the company of attempting to muzzle the publishing of a story further detailing internal turmoil at the magazine and ties to a controversial Christian college. On Tuesday evening, Newsweek published a story about previously unreported ties between Newsweek Media Group (which also owns International Business Times) and Olivet University’s efforts to develop a campus in upstate New York.

Why Is The Manhattan DA Looking At Newsweek’s Ties To A Christian University?
Celeste Katz et al., Newsweek

In the summer of 2016, Olivet University, a small, California-based Bible college, was preparing to build a satellite campus in Dover, a town in upstate New York. As the school’s development arm sought tax breaks and construction permits from the town, it made a surprising offer to county officials: Would they like free advertising in Newsweek?

Fox Ties Disney to Sky News Guarantee to Win Takeover Approval
Joe Mayes, Bloomberg

21st Century Fox Inc. is sweetening its offer to U.K. regulators reviewing its takeover of Sky Plc, raising the prospect that Walt Disney Co. would guarantee the future of the European broadcaster’s news service. Rupert Murdoch’s Fox, which is in negotiations with competition authorities over its 11.7 billion pound ($16.4 billion) purchase of Sky, proposed this week a funding guarantee of at least 10 years for Sky News, the U.K.’s first 24-hour news channel.

Lionsgate Shake-Up: Top Film Execs Plan Exit 
Kim Masters, The Hollywood Reporter

Sources say Motion Picture Group co-president Erik Feig and Motion Picture Group co-chairman Patrick Wachsberger are making plans to depart the company ahead of a potential sale. Lionsgate may not want any turbulence as it looks for a buyer, but an executive reshuffling is in the works, The Hollywood Reporter has learned.

The New York Times names Kathleen Diamantakis MD of strategy for T Brand
Bennett Bennett, The Drum

The New York Times Company has announced the appointment of Kathleen Diamantakis as managing director of strategy for its content studio, T Brand. Diamantakis will have responsibilities across T Brand Studio, as well as experience design agency Fake Love and influencer marketing agency HelloSociety, both of which were acquired by The Times in 2016.

Spotify’s latest job listings show it’s ramping up efforts to produce hardware
Thuy Ong, The Verge

Rumors have swirled for a while about Spotify working on its own music hardware. Now, the company seems to be ramping up efforts, as indicated by three new job listings for its hardware division.

Report Detailing Harassment At NPR Cites ‘High Level Of Distrust’ Of Management
David Folkenflik, NPR News

An outside legal review of NPR’s handling of allegations against its former top news executive, Michael Oreskes, found that questions were raised about his behavior toward women even before he was hired. And concerns about misconduct were reportedly flagged throughout Oreskes’ 2 1/2-year tenure at the network right up to the day he was fired.

Publishers warily embrace Amazon program to run their content on Amazon.com
Max Willens, Digiday

After months of asking to get their content into Amazon, publishers finally got their wish. For the past several months, Amazon has been running a test with a small group of publishers where versions of publishers’ commerce-focused articles are accessible directly inside Amazon’s website.

Social Media and Technology

Russian Trolls Tweeted Disinformation Long Before U.S. Election
Rob Barry, The Wall Street Journal

Alice Norton posted an emergency message on a cooking-website forum on Thanksgiving 2015: Her entire family had severe food poisoning after buying a turkey from Walmart.

AT&T demanded the Justice Department hand over documents that could show Trump’s influence over the Time Warner deal. A judge said no.
Brian Fung, The Washington Post

A federal judge has ruled against AT&T in its effort to force the Justice Department to reveal whether President Trump inappropriately interfered with a regulatory review of the telecom giant’s $85 billion Time Warner merger. The ruling on Tuesday from Judge Richard Leon rejects AT&T’s argument that the government has singled out the company for special scrutiny.

Tesla’s cloud was used by hackers to mine cryptocurrency
Andrew J. Hawkins, The Verge

Tesla’s cloud account was hacked and used to mine cryptocurrency, according to a security research firm. Hackers gained access to the electric car company’s Amazon cloud account, where they were able to view “sensitive data” such as vehicle telemetry.

Getting a new iPhone battery is often a frustrating, weeks-long process
Hayley Tsukayama, The Washington Post

Some people across the country are reporting that they are having a tough time getting iPhone batteries replaced through Apple’s replacement program, which was launched after the company admitted that it slows down phones with older batteries to preserve the phones’ performance. From Silicon Valley to Washington, from Detroit to Atlanta, people are sharing stories of long waits, dropped customer service calls and hard-to-get appointments.

Airbnb’s Push Into ‘Experiences’ Has Been a Slog
Greg Bensinger, The Wall Street Journal

In November 2016, Airbnb Inc. featured photographer Martin Cohen in a public presentation touting its newly launched “Experiences” business line, which would let travelers book unusual and offbeat classes, tours and outings with self-proclaimed experts. Mr. Cohen was initially confident that, with Airbnb’s backing, he would have a steady stream of customers for his night-sky photography class.

PR and Marketing

Grocery chain Albertsons to acquire Rite Aid
Lauren Hirsch and Lauren Thomas, CNBC

Grocery chain Albertsons announced plans Tuesday to acquire Rite Aid in a cash and stock deal, as the traditional grocery industry continues to look for growth by broadening offerings, not just store base. A combined Albertsons and Rite Aid would have a value of roughly $24 billion, including debt.

Amazon’s latest Prime perk: 5% cash back at Whole Foods
Jordan Valinsky, CNN

Amazon Prime credit card holders just bagged a new reward. Beginning Tuesday, Whole Foods shoppers who use the Amazon Prime Rewards Visa card will get 5% cash back on purchases.

Amazon has quietly launched an exclusive line of over-the-counter health products
Angelica LaVito, CNBC

Amazon has quietly launched an exclusive line of over-the-counter health products in a possible challenge to pharmacy retail chains that could spark a price war and put pressure on store-brand profit margins. Technically, the company doesn’t own these products, which are produced by private-label manufacturer Perrigo, but it does put Amazon in a position to squeeze other retailers.

Gap brand CEO Jeff Kirwan to leave retailer, shares fall
Nivedita Balu, Reuters

Gap Inc said on Tuesday it was disappointed with the progress at turning around the fortunes of its eponymous brand and that the head of the business, Jeff Kirwan, was leaving. The surprise move comes just over a week before the apparel retailer is to announce fourth-quarter results.

Barneys Aims to Reinvent Luxury Marketing for Younger Shoppers
Christina Binkley, The Wall Street Journal

Daniella Vitale stepped into her role as chief executive of Barneys New York in early 2017 as a slew of headlines reported falling store revenues at retailers nationwide and shifting consumption patterns. Barneys felt the pain at its stores.

Domino’s Unseats Pizza Hut As Biggest Pizza Chain
Jessica Wohl, Advertising Age

Domino’s Pizza finally has the title it has been hungering for: top pizza seller. The chain wasted no time crowing about unseating Pizza Hut as the leading pizza chain both in the U.S. and worldwide.

Opinions, Editorials, Perspectives and Research

Rite Aid Was Albertsons’s Last Best Hope
Max Nisen and Tara Lachapelle, Bloomberg

We will soon have a pharmacy/insurer combination. We may yet get a pharmacy/drug-wholesaler merger.

Why We May Soon Be Living in Alexa’s World

My wife and I were just settling into bed one night when Alexa, the other woman in my life, decided to make herself heard. Without being summoned, the Amazon Echo Dot at my bedside — one of the half-dozen devices that Alexa inhabits in our house — lit up its spectral blue ring, as if it had heard its triggering wake word, “Alexa.”

Americans Hit the Brakes on Self-Driving Cars
RJ Reinhart, Gallup

By some estimates, 10 million self-driving vehicles will be on the road worldwide by 2020, however, Americans are currently skeptical of using the technology. More than half of the U.S. public (54%) says it is not likely to use the vehicles.

Programmatic TV is still 1 or 2 years away
Mark Weiss, Digiday

Only 32 percent of respondents believe programmatic TV to currently be a viable advertising channel. Lack of campaign measurement and attribution were the most often cited challenges associated with programmatic TV.

How to Monitor Fake News
Tom Wheeler, The New York Times

The indictment of 13 Russians filed on Friday by Robert Mueller, the special counsel investigating Russian efforts to influence the 2016 presidential election, details the secret workings of the Internet Research Agency, an organization in St. Petersburg, Russia, that disseminates false information online. According to American intelligence officials, the Kremlin oversaw this shadowy operation, which made extensive use of social media accounts to foster conflict in the United States and erode public faith in its democracy.