CEOs Drop Warm and Fuzzy in 'Ruthless' Push to Squeeze Workers

Summary

Bloomberg Businessweek Podcast Summary

Episode: CEOs Drop Warm and Fuzzy in 'Ruthless' Push to Squeeze Workers
Air Date: May 22, 2026
Hosts: Carol Massar, Tim Stenovec
Guests: Matthew Boyle (Bloomberg News), Nakul Duggal (Qualcomm), Stu Leonard Jr. (Stu Leonard’s)

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Episode Overview

This episode explores a fundamental shift in corporate culture: CEOs are ditching the “warm and fuzzy” approach, doubling down on “ruthless” performance cultures to maximize worker productivity and profitability. The conversation dives into how global firms are recalibrating power dynamics, the influence of AI on layoffs and corporate efficiency, and the impacts on ordinary workers. The episode also includes a discussion on inflation’s effect on food prices with supermarket CEO Stu Leonard Jr., and an update on Qualcomm’s expanding partnership with Stellantis to bring AI into next-generation vehicles.

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The Ruthless CEO: Corporate Culture’s Hard Pivot

Main Discussion: 02:16 – 09:55

Key Points

• Performance Culture’s Expansion:

  • “CEOs are done pretending to be nice” (Tim Stenovec, 02:16).
  • Not just a Wall Street or Silicon Valley paradigm; companies like Nestle, Unilever, and Novo Nordisk now tout “performance culture” in earnings calls.
    • “Mentions of ‘performance culture’ were rising... not just on Wall Street.” (Matthew Boyle, 03:00)

• From Bureaucracy to Ruthlessness:

  • CEOs frustrated with slow, bloated, bureaucratic organizations, and “B and C players.”
  • Cultural transformation attempts proliferate—but succeed only 15% of the time.
    • “85% of cultural transformations are not deemed successful internally.” (Matthew Boyle, 05:18)
  • The main failure: managers tell people “what” goals to achieve, but not “how” or “why.”
    • “Like a basketball coach saying, ‘I want you guys to score 100 points,’ but he doesn’t call any plays.” (Matthew Boyle, 05:40)

• Success Stories & Methods:

  • Microsoft: Trained 27,000 managers on behavioral changes.
  • Ford: Created “street teams”—cultural ambassadors modeling the CEO’s expectations.
  • The best transformations avoid “just a bunch of speeches” and focus on modeling and middle-management buy-in.

• Case Focus – Novo Nordisk:

  • CEO Mike Doustar’s mission: halve senior VP ranks, crush consensus-driven inertia.
    • “He immediately says, ‘this place, I can’t stand this headquarters culture… it takes five meetings and three committees to make one decision.’” (Matthew Boyle, 07:08)
  • Culture of ‘Novo Nys’—don’t speak up, reach consensus, slow decisions—abruptly overturned.
  • Reflects a larger “get lean, move fast” model now being adopted abroad (e.g., Bayer).

• Impact of AI and Economic Backdrop:

  • CEOs blaming layoffs on AI and efficiency quests—even when over-hiring or under-performance is the real rationale.
    • “AI washing, where they say, well, we’re going to lay off people and, you know, say it’s because of AI efficiencies—when it’s really just people maybe they didn’t like.” (Matthew Boyle, 09:19)
  • In a tight job market, fewer workers can just “walk out”—power has shifted even more firmly to management.

Notable Quotes

• “CEOs are done pretending to be nice.”
  — Tim Stenovec (02:16)

• “85% of cultural transformations are not deemed successful internally.”
  — Matthew Boyle (05:18)

• “Just go do it faster. Faster, leaner, leaner. And everyone’s thinking, ‘okay, well, what do we do now?’”
  — Matthew Boyle (05:42)

• “He [Novo Nordisk CEO] immediately says ‘this place, I can’t stand this headquarters culture… it takes five meetings and three committees to make one decision.’”
  — Matthew Boyle (07:08)

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AI in Cars: Qualcomm & Stellantis’ Expansive Partnership

Segment: 13:04 – 24:02

Key Points

• Stellantis and Qualcomm Deepen Collaboration:

  • Snapdragon Digital Chassis and next-gen AI/ADAS integration across Chrysler, Fiat, Dodge, Peugeot, Citroën, and more.
  • “This is a new change in the way Stellantis is developing their vehicles. It’s one single architecture that gets homogenized so that you can move fast, you can become a software company.” (Nakul Duggal, 14:32)

• The Digital Transformation of Automaking:

  • AI will power not only driver-assistance but the ‘in-cabin’ digital experience: voice assistants, personalized settings, shopping, entertainment.
    • “The experience you’ll have in your in-car cabin will be no different than what you’re starting to see on your smartphone.” (Nakul Duggal, 16:04)

• Timeframe & Industry Impact:

  • AI-first vehicles rolling out starting with model year 2028.
  • The “full removal” of the driver is “much farther out,” but significant semi-autonomy and advanced digital cabins are imminent.
    • “You will start to see… in the next two years, AI entering the digital cabin and cars becoming much more intelligent…” (Nakul Duggal, 21:09)

• Financial Opportunity:

  • Automotive business for Qualcomm is now $6 billion ARR, growing 25% per annum.
  • “It could be a much, much bigger part” of revenue as digital transformation accelerates. (Carol Massar, 24:02)

Notable Quotes

• “The experience you’ll have in your in-car cabin will be no different than what you’re starting to see on your smartphone.”
  — Nakul Duggal (16:04)

• “The car is probably one of these products… so central to where you spend time… you will start to see, I would say, in the next two years, AI entering the digital cabin and cars becoming much more intelligent.”
  — Nakul Duggal (21:09)

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Memorial Day and the Price of Food: Interview with Stu Leonard Jr.

Segment: 27:38 – 34:36

Key Points

• Inflation and Consumer Behavior:

  • Food prices are up—3% at Stu Leonard’s compared to last Memorial Day—due to supply chain challenges, weather events, and higher transportation costs.
    • “Our prices at Stu’s compared to last Memorial Day are probably up about 3%. They’d only be up like 1% if it wasn’t for me.” (Stu Leonard Jr., 29:25)

• The Cost of Protein:

  • Steak and premium cuts (like $70 tomahawk ribeyes) see price-sensitive shoppers trading down to hamburger, pork, and chicken.
    • “We notice people switching a little bit… going to chicken… going to pork, it’s like $10 a pound less.” (Stu Leonard Jr., 30:21)

• Supply Chain & Labor Pressures:

  • Droughts, herd size declines, and weather disruptions continue to strain meat supplies.
  • “We’re at a 50-year low in herd price sizes… not as much grass out in the field for the cattle to eat.” (Stu Leonard Jr., 31:20)
  • Labor costs are structurally inflationary—$25/hour plus benefits for in-store prep work.
    • “Labor’s not going to go down. That’s inflationary right now.” (Stu Leonard Jr., 33:57)

• Optimism for the Future:

  • Meat prices may moderate in the coming years as herds recover.
  • Fuel prices could also decrease as global conflicts, like those in the Middle East, are resolved.

Notable Quotes

• “Our prices at Stu’s compared to last Memorial Day are probably up about 3%. They’d only be up like 1% if it wasn’t for me.”
  — Stu Leonard Jr. (29:25)

• “We’re at a 50-year low in herd price sizes … not as much grass out in the field for the cattle to eat.”
  — Stu Leonard Jr. (31:20)

• “Labor’s not going to go down. That’s… inflationary right now.”
  — Stu Leonard Jr. (33:57)

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Memorable Moments & Additional Insights

• CEOs adopting ‘ruthless’ performance-driven models across industries, not just in tech or finance.
• AI’s role as both a tool and an excuse for layoffs and restructuring.
• Automotive digital transformation: “We’re going to stop soon calling it a car… going to have to come up with some other name.” (Carol Massar, 22:13)
• Consumer strategies amid inflation: trading down protein sources, heightened sensitivity to price changes at the grocery store.
• Underlying optimism for the eventual moderation of food and fuel inflation.

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Timestamps for Key Segments

• The Ruthless CEO & Performance Cultures: 02:16 – 09:55
• Qualcomm & Stellantis AI Partnership: 13:04 – 24:02
• Food Price Pressures & Stu Leonard Jr.: 27:38 – 34:36

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For listeners interested in today’s power shift in the workplace, the future of AI in everyday life, or the inflation you see at the grocery store, this episode delivers clear insights from top industry voices and people on the ground.

Transcript

[IBM Representative]

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[Stu Leonard Jr.]

Bloomberg

[Carol Massar]

Audio Studios Podcasts Radio News this is

[Bloomberg Businessweek Announcer]

Bloomberg Businessweek daily reporting from the magazine that helps global stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg businessweek Daily Podcast with Carol Massar and Tim Stanvak on Bloomberg Radio

[Tim Stankus]

the focus now building on performance cultures where expectations of workers are dialed up, B player risk getting managed out and executives losing patience with the usual bureaucratic strangleholds on affairs. Efficiency. In other words, Carol, CEOs are done pretending to be nice.

[Nakul Duggal]

Yep.

[Carol Massar]

Thing of the past.

[Tim Stankus]

Matt Boyle writes this. He's Bloomberg News senior reporter for Work and Management. He joins us here in the Bloomberg Interactive Brokerage Studio. Yes, you know, apologies for just completely just ripping off your entire, you know, nut graph there. Which I did. But it was so good I had to read it. Carol makes a really good point and that's exactly where we want to start, which is this piece does such a good Job of illustrating the change in power dynamic between executives and sort of the labor force. And I think it really speaks to where we are right now.

[Matthew Boyle]

Yeah, exactly. I mean, we started to see it, like, with the RTO mandates, right? Get back to work. And we were seeing that in 2023 into 2024, then all, you know, AI hits and, you know, what, the white collar recession. So all these things are kind of building. And we looked at each other on our team and said, you know, we're starting to hear a lot more CEOs talk about performance cultures. And you hear high performance culture, you're like, oh, I've heard that before. They do that on Wall Street. They do that in startups in Silicon Valley. But what struck us is we were hearing this from, like, Nestle. We were hearing it from Unilever, Novo Nordisk, you know, 3M, all these companies from different sectors. Not Wall street, not Silicon Valley. So we're like, there's something going on here. So we started looking into it, and we found that the mentions of performance culture were rising on earnings calls and in annual reports when they were like, all right, we got to hear from these CEOs. What are they talking about? How are they justifying it? Why are they doing this? Right, and why now?

[Tim Stankus]

Is it because they're all watching the same Instagrams about grind culture?

[Matthew Boyle]

Well, there's a bit of that and a lot of these CEO, I mean, but they're not all American. This isn't all just American hustle culture. One of these. The CEO of Nestle, the CEO of Novo Nordisk, grew up in America, but he's born in Iran, spent his entire career in international operations. So essentially, the commonality is these are CEOs. A lot of them have been inside these companies for years, and they're tired of what they feel is a sclerotic, slow, you know, bloated culture. Too much bureaucracy, too many excuses given for, you know, B and C players. And for them, they're saying, it's over.

[Carol Massar]

Now, Matt, is it about CEOs acknowledging that, or is it just a case of we want to be more profitable and we've got AI that we can

[Adobe Representative]

do more with less?

[Matthew Boyle]

There's a bit of that. I mean, you know, new financial metrics are always a part of this. Layoffs are always a part of this. And we all know what happens when you lay off people. Your stock goes up, your labor costs go down. So that's usually good for margins. But they really want it, the ones who do it well, anyway, really Want to get into the muck, into the inner workings of the company. Now, not all of them are successful at doing that, though. It's a really interesting statistic in that 85% of cultural transformations are not deemed successful internally.

[Carol Massar]

Wait, what Was that statistic?

[Matthew Boyle]

85%. So only 15% of the time are they getting this right. And you ask why? And here's the reason. The reason is that often people are told what to do differently, but not told how to do it or why. I got a great analogy from a performance coach who said, this is like a basketball coach saying, I want you guys to score 100 points this game. But he doesn't call any plays. So it's just faster. Go do it faster. Exactly. Go do it faster. Faster, faster, Leaner, leaner, leaner. And everyone's thinking, okay, well, what do we do now? There are examples of really good cultural transformations. Microsoft is one, and their CEO, Satya, along with the head of HR, they trained 27,000 managers on what they were expecting, how to do things differently. So it wasn't just a memo from on high, you know, thou shalt do this. At Ford, they created these sort of cultural. What they called street teams, which is basically ambassadors, people running around the company, middle managers and VPs and the like, who knew exactly what the CEO wanted to see and so was able to model that. So that's what these cultural transformations require, not just a bunch of speeches.

[Tim Stankus]

You mentioned Novo Nordisk CEO Mike Doustar. What. What does he want to do at Novo Nordisk?

[Matthew Boyle]

He wants to get rid of, I think, all of headquarters, if he could. He was. We had an. At an ed board back in January here in New York. He said he just cut the ranks of senior vice presidents in half.

[Tim Stankus]

But they're in a unique position.

[Matthew Boyle]

Exactly. Very.

[Tim Stankus]

What happened with the rise of.

[Matthew Boyle]

Yes. So they were first sold the market. Exactly. They were early to the GLP1.

[Tim Stankus]

I mean, they were the Danish economy.

[Matthew Boyle]

Yeah, essentially. Essentially. And if you got a job in that, you know, you were set for life. But then Eli Lilly comes in and starts eating their lunch. So CEO of Novo Nordisk is ousted. Mike gets thrust in. He had been doing an amazing job. He started there at like 21 or something.

[Tim Stankus]

Yeah, 33 years he started.

[Matthew Boyle]

He's a lifer. And he immediately says, this place, I can't stand this headquarters culture. You know, he said something like, it takes, you know, five meetings and three committees to make one decision. And I mean, everyone I've talked to inside Novo Nordisk and some outside now because they've been laid off. But there was a lot of truth to what he was saying from what we heard.

[Chase Representative]

Amen, brother.

[Carol Massar]

Right. Too many.

[Matthew Boyle]

Like you've heard about Amazon talking about, we want to get rid of the meeting. Before the meeting. There was a lot of that. And this is a Danish culture where it was consensus driven. They called it Novo Nys. You know, don't speak up if you got a different opinion. We're gonna come to a conclusion here. It might take eight meetings. Mike's like, this is all gone. I'm sick of this.

[Tim Stankus]

That's a tall task.

[Matthew Boyle]

It is exactly. At a very. At a big company. It's one thing to do this at a startup with 30 people doing this at a massive company, but, you know, CEOs are trying to do this. A company we didn't even talk about Bayer, another European healthcare company, Their CEO is also trying to get leaner faster. You know, it's happening everywhere.

[Carol Massar]

Mike, how much of this is people watching what happened?

[Adobe Representative]

For better, for worse.

[Carol Massar]

But the federal government being shook up and shutting essentially complete depart. What did I say? Did I call you a different name? Oh, did I say that? Call you Mike?

[Tim Stankus]

We're talking about Mike. Novo Nordic.

[Matthew Boyle]

I've been called worse. You know, this.

[Carol Massar]

I'm like, did I actually say that? I know Matt really well. Matt, is it all right, going back, think again.

[Matthew Boyle]

What happened in the Doge stuff?

[Carol Massar]

Yeah, the Doge stuff and what Elon.

[Matthew Boyle]

I mean, some of this predates Doge. I'm not going to say, though, people weren't looking at that and going, wow, that's interesting. I mean, what Elon did at TW when he basically laid off half the company, people certainly looked at that like, I wonder now we're seeing it like at block, right, with Jack Dorsey laying off tons of people. So I think that's certainly happening in the backdrop and it's giving people more maybe freedom or allowance, but probably not inspiring everyone because there's enough problems inside these companies that they don't even need

[Tim Stankus]

Elon's inspiration just to go tie things up. Matt, I'm just wondering about the low, higher, low fire environment and to what extent the sort of macro environment has to.

[Matthew Boyle]

Well, it's true. There's the low, higher, low fire. And one thing we haven't mentioned, shockingly, is AI as well. You know, giving CEOs sort of the freedom or the AI washing, where they say, well, we're going to lay off people and, you know, say it's because of AI efficiencies when it's really just people maybe they didn't like or people they overhiered three years ago is a big part of that, certainly. So there is this sort of backdrop of if you don't like it, lump it. I mean, a lot of These people, maybe 10 years ago, five years ago, made it, might have been able to say, I don't like what this crazy CEO is doing. I'm out of here. But now in this job market, you might have to just sit there and take it.

[Carol Massar]

He is Matthew Boyle. We love him here at Bloomberg. We're back in a moment.

[Tim Stankus]

Stay with us. More from Bloomberg Businessweek Daily Coming up after this

[IBM Representative]

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[Tim Stankus]

Yeah Stellantis and Qualcomm expanding their multi year collaboration integrating Snapdragon digital chassis systems on chips across the next generation of Stellantis vehicles for cockpit connectivity and advanced driver assistance systems. Non binding letters of intent for AI Motive to join Qualcomm Technologies that's owned by Stellantis that bought AI Motive. That's the hungry based AI and autonomous driving software company that was back in December of 2022. So a little bit of a background.

[Carol Massar]

Yeah.

[Tim Stankus]

For this partnership.

[Carol Massar]

Try to explain it because we've got a great voice to talk about it. Let's head to San d and to Qualcomm's head of its automotive, robotics and IoT businesses. Nakul Dougal is with us joining us. Nicule, so great to have you here with Tim and myself on Bloomberg. Tell us about this partnership and I want you to kind of go into exactly what this means by expanding it for those who understand your world and maybe for those smart investors who don't totally understand it. Break it down for us.

[Nakul Duggal]

Thank you Carol. Thank you Tim. Great to be with you. Yeah. You know, our business in automotive has been on a tear over the last many years. We are going to exit FY26 at a $6 billion of annualized revenue which has grown up 8x over the last six years. The partnership with Stellantis is actually one of a kind. We've been building for the digital future of cars for a number of years and physical AI, as you know, is coming into every single vehicle. The digital chassis that we build essentially allows an automaker to be able to modernize all of their vehicles across the Board from connectivity to the in cabin experience to the driving experience of a vehicle. And this partnership with Antonio and Ned at Stellantis is a one of a kind. This essentially means we get to deploy starting in model year 28 across all of their platforms, from Chryslers to Fiats to Dodge to the Peugeot brands, the Citroen brands, across every global footprint the Stellantis vehicles are deployed in, which is really every market outside of China, our entire fleet of products. This is a new change in the way Stellantis is developing their vehicles. It's one single architecture that gets homogenized so that you can move fast, you can become a software company working with partners across the board to be able to bring self driving air into every single cabin and of course connected vehicles. And you know, we've been building this for really the entire industry over the last many years and this is what we're going to do with Stellantis.

[Tim Stankus]

So if somebody buys a Stellantis after that model year, any vehicle across Stellantis portfolio, as you mentioned, after that model year, will Snapdragon technology, this technology that you are talking about right now, be included in that vehicle?

[Nakul Duggal]

That's right, that's right. And already a supplier to them. And this is now going to happen across adas, Cockpit and telematics.

[Tim Stankus]

So what does that mean for the driver experience?

[Nakul Duggal]

You know, you are starting to now see AI essentially come to the fore, especially for platforms like a car which is a physical platform. It's your daily driver, it's something that you spend a lot of time in. And bringing AI into the in car cabin experience essentially allows your personal space to be completely transformed. We've been preparing for this with the entire ecosystem. We've been working with this with companies like Google, with of course our automotive suppliers and partners and Snapdragon cockpits are now AI ready. That means the experience that you will have in your in car cabin experience will be no different than what you're starting to see on your smartphone. You can have a conversational experience with your car, it shops for you, it sets up appointments, it entertains you. That experience in your car changes the entire way that consumers will engage with the vehicle. And then that same thing extends over to the driving experience. So as you are starting to see technology like FSD get deployed very broadly, this is also something that's part of the partnership that we've built with Stellantis where we will power their self driving stacks along with our silicon. And this essentially is a brand new type of product that starts to get deployed starting 28.

[Carol Massar]

Nicole, is it. It's an expansion. So you guys were already involved, right, in terms of not only kind of the AI or experience that sounds like it's taking it to another level, but you were already involved in kind of the mechanics, if you will, or the inner workings with Stellantis, is that correct?

[Nakul Duggal]

We've been working with both Fiat Chrysler and Peugeot for a number of years. I think this big shift is really as the technology transforms with AI becoming such a central part of the transformation of the car. This allows us to be able to help Stellantis move into this new architecture and to do this across the board. As you know, the car industry is complex, a lot of different architectures. This is going to be a one of a kind change because this is one common harmonized architecture across their entire global fleet of vehicles. So any change that is made brings that experience to every tier of vehicle deployed across any part of the world. And that is what makes this partnership very unique.

[Carol Massar]

Is it exclusive? I know it's an expansion of the partnership. Exclusive or are there other companies, AI or tech that are. This is similar parts.

[Nakul Duggal]

This is, this is a partnership between Stellantis and Qualcomm on all of the silicon and all of the self driving software capability and of course all the connectivity that we are building. So it is something that we are building. We are the ones that are their dedicated supplier for this next generation.

[Carol Massar]

Why expand it and why now? And talk to us about the financial opportunity for what it means for Qualcomm for us.

[Nakul Duggal]

We've been growing our business in automotive actually by looking at the car architecture and thinking about it in the context of what does the digital product mean for a car. And to do that you really have to be able to envision what type of technologies a car is going to deploy. AI has now become very central, both for driving, but now also in car cabin experiences. You have to focus on every tier of vehicle that you have to supply to. You have to focus on the global nature of this business in that this is 90 million cars produced all over the world. Automakers are designing for a software product. We are growing our business. We've been growing at about 25% plus over the last many years. And we really see automotive as this definition of what a physical AI product looks like. And so far it's, it's really been going great. We are super happy with the way that the business has grown. We're going to share more at the investor day that we have coming up in June. We will talk A lot about what we are doing in automotive and of course, other areas.

[Tim Stankus]

Well, you've done a lot in automotive for a lot of years with a lot of different partners, of course, apart from just Stellantis. You're working with Chinese EV makers as well. Toyota, Honda, BMW, Mercedes Benz, among others. Since you have such a good view on what you are calling an embodiment of physical AI, what's a realistic time frame for you to tell us that we as drivers will be removed completely from the equation when it comes to this technology?

[Nakul Duggal]

I would say that the driver completely removed is probably much farther out because this is, at the end of the day, a safety product. But I think the car essentially taking over for a number of scenarios where the driver is involved, but perhaps not deeply engaged, that is upon us now. And maybe let me describe it like this. I think the rate at which AI is accelerating, even I would say in the last 12 months, the capabilities of the models, what they can do, both for conversational AI, the human facing AI, but then also the machine and the physical AI, the car is probably one of these products, one of these parts of our life that is so central to where you spend time, your personal time, your time with family. It is a global product. You will start to see, I would say, in the next two years, AI entering the digital cabin and cars becoming much more intelligent in terms of the way that they are driven. This will drastically accelerate because all of the other pieces are in place. The silica is in the SoCs, the silicon is in place. We've been building that for a number of years. We have standardized the architectures. We have made them such that they can be applied to really any tier of vehicle. We are obviously doing this globally. This is not specific to any region. So this acceleration is something that every automaker has been waiting for. And I think the Stellantis deal is a reflection of how quickly can automakers really leapfrog a legacy way of working, a legacy way of thinking, and just embrace what is bound to happen. And this deal for us was actually an indicator of how fast this is actually coming. I would expect by 28, you will start to see this get deployed across multiple parts in the. In the Western world.

[Carol Massar]

Yeah, we're going to stop soon. Calling it a car, I think we're going to call it. I don't know, we're going to have to come up with some other name, because if you think about the amount of technology that are in our vehicles today, it's just pretty astounding.

[Tim Stankus]

I mean, a lot of observers have said you have to think about Chinese EVs as smartphones on with wheels.

[Carol Massar]

Yeah.

[Tim Stankus]

But I don't know if we're there.

[Carol Massar]

Yeah.

[Tim Stankus]

It's hard for me as a New Yorker who's like doesn't have a new car, you know, doesn't spend any time in cars to relate My my car

[Carol Massar]

is in full surf driving and it's old, it's more than 10 years old but you can literally take your hands off the wheel and it drives itself like the systems have been.

[Tim Stankus]

Are you sure?

[Carol Massar]

It tells me to put my hands back on it after about 40 seconds. But it is pretty amazing. Nicole, what we're seeing and what I'm wondering about in terms of I was just looking at the FA page on the Bloomberg. You guys are at least the forecast that we have I guess for the the street and guidance looking at over 42 billion in revenue for you folks this year when you wrap up the fiscal. But I'm just thinking, I think you guys shared some numbers that in the second quarter of this year you guys clocked 1.33 billion in automotive segment revenue. How much more could it be as a result of deals like that that this becomes maybe a bigger part of your top line? And just Forgive me about 40, 45

[Nakul Duggal]

seconds here, I think it's a great question. Look, I think we've been preparing for the way that this business is growing. I think this deal that you saw is an indication of the market saying hey, we are now ready to really scale up. I would say that the car becoming a digital product both on the self driving side and the cabin is going to happen across the board. And every automaker is now essentially waiting to figure out how do they accelerate that. We've been growing 25%. I think we see similar trajectories continuing certainly in the near future.

[Carol Massar]

Sounds like it could be a much, much bigger part. He listen, stay in touch. We love talking about this stuff. Nicole Dugal, he is of course head of Qualcomm's Automotive, robotics and IoT business, of course at Qualcomm. As we said, stay with us.

[Tim Stankus]

More from Bloomberg businessweek Daily coming up after this.

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[Carol Massar]

We're thinking about Memorial Day. We're thinking about what goes into a Memorial Day picnic and celebration. This is happening as global food prices climb to their highest level in more than three years as the Iran war disrupted supply chains. You know, we kind of kicked it off talking with Stuart And Mike, Michael McKee, of course, about inflation concerns, and that includes food. So we've got a great voice to get into all of this.

[Tim Stankus]

Let's head to Stu Leonard's in Norwalk, Connecticut. The President CEO of Stu Leonard, Stu Leonard's Jr. Stu Leonard Jr. Joins us. Stu, happy summer. I just want to start off with the question, is it. Is it a happy summer at this point? What are sales telling you? What are customers telling you?

[Stu Leonard Jr.]

Well, first of all, hi, Carol and Tim. How you doing? First of all, the thing that would make me happier if you didn't talk about all the rain and everything that happened, you know, that that doesn't help our sales. We want everybody to go out and barbec and cook cheeseburgers out in their backyard. No, but I would say right now, sales are brisk, customers are buying, but they're also complaining. Okay, they're complaining about the prices of food right now, and not only just food, but I think their overall expenses in their normal lives. As an example, the other morning, I got a phone call from our farmer, tomato farmer in Florida. He said, you know, I got some bad news. He said, you know, we had a big freeze down here. I had to replant my crop. Tomato prices are going to be up, and it's going to cost me $2,000 more to send a tractor trailer truck from Florida up to the New York area to your stores. And then I come down here in the store and I'm talking to a customer that just said, hey, I just went and filled up my Suburban and that cost me $50 more and my energy costs at home, insurance, everybody. So I'm stuck in the middle a little bit. You know, on one hand, I got to negotiate with this farmer, which I did, and we're going to split the cost, but I can't raise price. So, you know, our prices at Stu's compared to last Memorial Day are probably up about 3%. They'd only be up like 1% if it wasn't for me. You know, and you asked me about some props earlier, but, you know, here's one of our great. Oh, Tomahawk. Oh, yeah. This is what. You know, if you can put this on the grill this weekend, you know, for crowd pleaser.

[Tim Stankus]

But Stu. Yeah, it would be. But that's going to set you back. I mean, you're talking about a very expensive cut of meat there. And you mentioned cheeseburgers earlier. Mike McKee talking to us a little earlier and he said, you know, at some places they're charging you just for walking by the meat department. That's how expensive it's gotten.

[Stu Leonard Jr.]

Yeah, but you know, one thing people are doing is they're switching from their protein. Like, you know, that's obviously the most expensive thing you can buy is a big ribeye steak. But then you can also go down to just getting some plain hamburger. So we notice people switching a little bit. They're going to chicken. That's only in the 4 to $5 a pound range right now. They're going to pour. I've even been doing that. Instead of having a steak, get a nice pork chop and it's like 10 bucks a pound less.

[Tim Stankus]

How much is that tomahawk that you held up per pound?

[Stu Leonard Jr.]

Oh, gosh, I bet you this will be about $70. Okay, get this. But hey, if you went to a restaurant and you ever ordered something like this, you'd be paying 150 or at least double or more for that thing. So how many people can, how many

[Carol Massar]

people can eat that chop?

[Tim Stankus]

How much would I eat?

[Carol Massar]

I know my husband be like, that's mine. But I'm just two or three people could probably chop into that, right?

[Stu Leonard Jr.]

Oh yeah, for sure. You know, it really depends. I mean, who's a big meat eater? You know, your husband probably would love to devour. I got a son in law who loves meat all the time and he, he could make a big dent in that. So, you know, but, but you know, it's, you know, right now you're seeing people really just trying to save money. But you know what the thing would meat right now is we're at a 50 year low and herd price sizes in. We just had some of our ranchers back from the Midwest and they're really just saying there's just less cattle. And why is that? Because, you know, it costs them a lot of money to feed them because of the droughts and everything that happened in the Midwest. And there's not as much, you know, grass out in the field for the cattle to eat. They gotta import the corn and the soy and alfalfa for the cattle to eat.

[Carol Massar]

Stu, that was a problem, I feel like last year too. Like we've been talking about the herd situation for a while. Is that as you talk to the ranchers, any of that going to get better or easier or. No, it's.

[Stu Leonard Jr.]

It's getting better now, but it takes two years to really grow a little calf from like 3, 400 pounds when they're born, all the way up to maybe 1600 pounds when they're, you know, harvested. So, you know, it takes time, but you're seeing it build right now. It is growing. And that's why I'm optimistic about a couple of things. One of them is I do think meat prices are going to be coming down in the future. You know, even our ranchers and everything agree with that. And the second thing, I really think fuel prices are going to come down once we get things straightened out in the Middle east, which can't be forever. I mean, it's got to be resolved at some point. So I think we're going to see some softening on these inflation numbers as far as food goes in the future. But you know what? Here, here's what's really interesting, Carol. I think you have to break up this inflation into the supply and demand and actual cost, like from our standpoint. Like, I'll give you an example. You can go buy this watermelon right here, by the way. Watermelons are great right now. They're really sweet. So here's. Here's a watermelon. You can go buy that. It's about six bucks or seven bucks at the store. Or you can do this. We can have somebody cut these up. The labor for me to have a nice lady or guy back there cutting these up. It's for us nearly $25 an hour right now without benefit.

[Tim Stankus]

And that's never going.

[Stu Leonard Jr.]

That's never going down. And so there's a couple things that are not going to go down. Labor's not going to go down. That's. Yeah, that's inflationary right now. But. But I think the supply and demand of food, like for instance, I always laughed when I would read about people saying about egg prices. Eggs had nothing to do with inflation.

[Public Representative]

Right.

[Stu Leonard Jr.]

That. No government policy or anything. That just had to do with the avian flu. So supply and demand is a. Is built in. And if you look, we just had some fires out in Semi Valley. As I mentioned, the cold snap down in Florida.

[Carol Massar]

Right.

[Stu Leonard Jr.]

So the droughts out. These affect food prices.

[Carol Massar]

We gotta run. Always love checking in with you, Stu. Happy Memorial Day. We're gonna keep our fingers crossed you don't get rain. Stu Leonard Jr. Of course, president and CEO of Stu Leonard's, enjoyed talking with him. We talked with his daughter Blake, who runs their spirits and wines business. A little bit earlier.

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