Omni Talk Retail Fast Five – September 17, 2025

Episode: Kroger’s Automation Reset, Starbucks & Why There Ain’t No Party Like A Walgreens Party

Hosts: Anne Mezzenga and Chris Walton
Location: Live from the Musion Group booth at NRF Europe, Paris

Episode Overview

In this high-energy edition of Omni Talk Retail's Fast Five, hosts Anne and Chris unpack five of the week’s most impactful retail stories, live from Paris. They analyze Kroger’s reassessment of its automated e-commerce network, Walgreens’ leap into the party supplies space, Starbucks’ rollout of Vision AI in stores, PacSun’s industry-first Youth Advisory Council, and the fast adoption of AI-powered search tools over Google. The duo brings their trademark banter and sharp industry insights, highlighting what these headlines signify for the evolving omnichannel retail landscape.

Key Discussion Points & Insights

1. Kroger’s Automation Reset

[05:08–09:20]

• Headline: Kroger is conducting a comprehensive, site-by-site review of its automated e-commerce fulfillment centers (partnered with Ocado) to improve efficiency and profitability.
• Context: While robotic fulfillment ‘sheds’ have performed well in high-density areas, results are mixed in lower-density regions. The interim CEO, Ron Sargent, is emphasizing store-level fulfillment for speed and cost-effectiveness.
• Chris’s Take:
  • “One of the first things you learn about in business school is like you don't ever want to fall into the sunk cost trap...” [06:27]
  • Applauds Sargent’s willingness to reassess rather than double down on existing investments.
  • Predicts the trend toward leveraging stores as fulfillment nodes will accelerate, paralleling moves by Target and Walmart.
  • Curiosity: Looks forward to interviewing Ocado CEO for deeper insights into automation trends transnationally. “I gotta imagine there's a lot of similarities in terms of what works across those countries as well as differences...” [07:24]
• Anne’s Take:
  • Reiterates the unique U.S. context, where stores are still critical for profitable last-mile fulfillment.
  • Points to the challenge for Amazon as they expand into grocery “with no stores” and expresses skepticism about success in non-urban areas.
    • “If Kroger's having problems with this … what does this mean for the continued expansion of Amazon with no stores?” [08:54]

2. Walgreens Parties Hard—Into Party Supplies

[09:20–14:55]

• Headline: Walgreens dedicates significant in-store space for party supplies, reacting to Party City’s bankruptcy and closures.
• Details:
  • 5x expansion in party supplies floor space, includes balloons, banners, cake toppers, and more, with many items available for fast pickup/delivery.
• Anne’s Enthusiasm:
  • “This is why this move is so brilliant...Walgreens is available. They're going to be open.” [11:24]
  • Predicts increased basket size as shoppers grab party supplies along with soda, candy, toys, etc.
  • Notes prevalence of significant party supply areas in European urban grocers, “and they are wiped out.” [12:08]
• Chris Agrees:
  • Cites Party City’s ~$2B business opportunity.
  • “There's so much slow moving stuff in here. Like, you could dedicate more space to stuff that you need...” [13:29]
  • Highlights Walgreens’ service counter as a logistical advantage for party supplies like helium balloons.
• Industry Insight: Chris reveals that Walgreens’ new chief merchant is Tracy Kolder, formerly of Party City and Target, suggesting expert execution ahead.
  • “If anyone's gonna do it, it's probably her.” [14:31]

3. Starbucks Rolls Out Vision AI

[14:55–19:14]

• Headline: Starbucks rapidly deploys computer vision (in partnership with Nomad Go) across thousands of stores to automate and improve inventory tracking.
• Impact:
  • Inventory counted 8x more frequently than before, leading to near real-time stock visibility and more frequent, precise replenishment (per CTO Deb Hall Lefebvre).
• Chris’s Rational:
  • “Starbucks needs to find a way to free up its staff to actually fill orders.” [16:18]
  • References Starbucks’ new Smart Queue system, which has improved sub-4-minute order fulfillment by double digits, but still leaves 20% unserved within that window—a major operational concern.
  • “That is just crazy to me. Anything that possibly chips away at that ... yeah, all in.” [17:41]
• Anne Highlights:
  • Surprised by the scale of Starbucks out-of-stock issues: “Starbucks is sold 100% on reliability ... If they don’t have the products in stock, I’m gonna stop going to Starbucks for that.” [18:07]
  • Recalls personal experiences with unavailable items (oat milk, vanilla bean, etc.).
  • Emphasizes that reliable inventory is foundational—before mobile ordering or customer experience enhancements.
• Chris adds: Points out that better stock visibility also improves efficiency and frees up working capital to potentially invest back into store labor.

4. PacSun’s Youth Advisory Council (YAC)

[19:14–24:41]

• Headline: PacSun forms a Youth Advisory Council, giving young influencers direct input in strategy and product. Distinct from influencer “ambassadors,” this council meets with execs and has a seat at the “leadership table.”
• Anne’s Perspective:
  • “Every retailer and every solutions provider ... is looking for this type of insight to really understand what this next generation is looking for.” [21:08]
  • Praises the move as brilliant for gathering authentic feedback and leveraging influencer audiences for product exposure.
  • Applauds PacSun CEO Brie Olson’s out-of-the-box thinking and ability to foster a culture open to youth-driven input.
• Chris’s Nuanced Take:
  • Skeptical of “advisory panels” in general as often performative, but sees PacSun’s approach—especially with high-profile influencer members—as closer to an actual advisory board with real influence and stakes.
  • “This is more ... like an advisory board, like a startup ... [with] people who could actually help drive the business as well.” [23:20]
  • Argues that all retailers should be able to make this work if they fix their culture.
    • “If you can’t make an idea like this work, you kind of suck. And your culture needs to change.” [24:41]

5. AI Search: Users Prefer Perplexity/ChatGPT to Google

[24:41–29:17]

• Headline: Nearly half of AI search tool users say they prefer tools like ChatGPT and Perplexity over Google, especially for research before purchase; usage is highest among Gen Z and Millennials.
• Stats:
  • 86% use Google, yet 81% have used AI tools recently.
  • 45% say AI search provides a better experience; 60% use AI search for product/service research.
• Chris Not Surprised:
  • Notes widespread, inter-generational adoption in his circles.
  • “The agentic AI movement—we’re not even in any one of that yet. And that potentially is still going to happen ... this will amplify those numbers even more.” [26:57]
  • Warns naysayers on LinkedIn that market disruption is just beginning.
• Anne’s Angle:
  • Points out that seamless e-commerce transactions within AI search haven’t even arrived yet.
    • “They’re already getting this much traffic when you can’t even just click and buy in all of them yet.” [27:11]
  • Predicts significant surges in adoption post-holiday shopping season.
  • Recalls insight from Instacart’s Ryan Hamburger about the need for retailers to prepare for agent-driven purchases.

Notable Quotes & Moments

• Chris on Sunk Cost Trap (Kroger):
  • “One of the first things you learn about in business school is ... you don't ever want to fall into the sunk cost trap ... he isn't gonna just keep doubling down ...” [06:27]
• Anne on Walgreens’ Move:
  • “This is going to increase the basket for some of those shoppers ... This is a very, very smart, strategic move for Walgreens.” [11:33]
• Chris on Party Supplies at Walgreens:
  • “I've gone through Walgreens all the time. There's so much slow moving stuff in here. Like, you could dedicate more space to stuff that you need...” [13:29]
• Chris on Starbucks Fulfillment:
  • “That means you have a massive problem ... 20% of the orders ... are still not meeting the customer service expectation of under four minutes.” [17:17]
• Anne on Starbucks Stockouts:
  • “Starbucks is sold 100% on reliability. If they don’t have the products in stock, I’m gonna stop going ...” [18:07]
• Chris on AI Search Disruption:
  • “To all the naysayers out there, I’d say I wouldn’t discount this so fast. No, I think you’re kind of risking things a little bit there.” [27:11]
• Anne on Culture and Innovation:
  • “Will this, would this work at any other retailer? You got to have the culture, you got to have the fit.” [23:46]
• Chris, bluntly:
  • “If you can’t make an idea like this work, you kind of suck. And your culture needs to change.” [24:41]

Segment Timestamps

| Segment | Timestamp | |-------------------------------------------------------|-------------| | Paris Banter & Food Faves | 02:21–04:43 | | 1. Kroger Automation Reset | 05:08–09:20 | | 2. Walgreens Party Supplies | 09:20–14:55 | | 3. Starbucks Vision AI | 14:55–19:14 | | 4. PacSun Youth Advisory Council | 19:14–24:41 | | 5. AI Search vs. Google | 24:41–29:17 | | French Lightning Round (Fun) | 29:21–32:03 |

The Lightning Round – French Edition

[29:21–32:03]

• Fun, rapid-fire choices on Paris bakery items, French vs. British public transit, and historical emperors—plus some playful food and music rationales.

Summary for Non-Listeners

Anne Mezzenga and Chris Walton deliver an insightful, candid breakdown of this week’s biggest retail stories from Paris, blending industry expertise and humor. Key takeaways are the growing skepticism about centralized automation in grocery, Walgreens’ strategic expansion into party supplies, the operational advances at Starbucks leveraging AI, PacSun’s bold embrace of youth-led advisory, and evidence of generational shift away from Google to AI-enabled search. Culture, adaptability, and technical innovation emerge as central themes, with the message that retailers must continually reevaluate strategies—or risk falling behind in a rapidly evolving landscape.

If you missed the episode, this summary covers all critical discussions, direct quotes, and the hosts’ personal insights so you’re up to speed on what’s driving the retail industry this week.