This is the first of two stories about the changing frequency and nature of tipping.

Much appreciated: Saltie Girl, a restaurant with locations in Boston, Los Angeles, and London, adds to all checks a kitchen appreciation fee of 3%, to be split among kitchen staff.

It is “to directly benefit the back-of-house staff,” explained automotive website Wide Open Roads, “a massive nod to the under-appreciated and unseen humans that make the culinary magic possible.”

Kathy Sidell, president of the MET Restaurant Group, which owns Saltie Girl, told the Wall Street Journal that she instituted the fee to help lure kitchen staff back to the restaurant with a higher wage, but kept it in place because she wants to keep boosting kitchen pay even though her food costs are rising and she’s reluctant to raise prices.

“Our costs have increased exponentially, but there’s just a certain amount that someone’s going to pay for a lobster roll,” Sidell said.

Restaurants have long struggled with pay parity since servers earn tips and kitchen staff generally do not. And these days, one way to address it—the kitchen service fee—is sauté-pan hot:

• The number of restaurants adding service fees to checks increased by 36.4% YoY in April 2022, according to data from point-of-sale software developer Lightspeed cited in the WSJ.
• Fee revenue for restaurants nearly doubled for the same period.

But to consumers, the fees can seem like yet another tip they’re expected to pay, part of the expanding role of tipping beyond restaurants and Uber rides.

These extra charges can seem, that is, like tipflation.

Fee my guest: Unlike its portmanteau cousin, shrinkflation—which Merriam-Webster added in 2022 (and we declared 2022’s word of the year)—tipflation hasn’t made its way into the dictionary. But Wiktionary has an excellent crowd-sourced definition: “The phenomenon of tipping becoming both increasingly widespread and expensive (in terms of acceptable percentage) in society.”

Keep reading here.—AAN

On Tuesday, Dunnhumby released its sixth annual retailer preference index—a nationwide study examining 63 retailers in grocery that surveyed 10,000 consumers—and found that H-E-B was the most preferred grocer in 2022.

• Costco came right after H-E-B, followed by Amazon, Wegmans, and Sam’s Club to round out the top five.
• H-E-B retook the top spot from Amazon, which held it for the past two years.

“The surge to digital and e-commerce adoption by customers—a large chunk of it has stuck. [We] knew that also a large chunk might be temporary,” Erich Kahner, director of competitive strategy and insights at Dunnhumby, told Retail Brew. “H-E-B resuming its spot, pushing Amazon back down, reflects that more temporary nature of all of that shift.”

In evaluating grocers, Dunnhumby examines five preference drivers: price, promotions, and rewards; quality; speed and convenience; digital; and operations. Kahner explained that these factors are what drive long-term retailer results, with costs and quality as the two most important factors.

• Plus, as inflation spiked to 40-year highs last year, consumers sought out grocers that maintained a healthy balance between affordability and product quality.

The devotion of H-E-B’s shoppers tracks to before the pandemic, when the Texas-based grocery chain clocked in at No. 1 in 2019.

• Other grocers that charted highly in the rankings were regional chains, such as Winco and Market Basket, that were able to deliver on a better customer value proposition compared to some of their bigger competitors.

Rounding out the top 10, we have: Market Basket, Amazon Fresh, Trader Joe’s, Winco, and BJ’s Wholesale.—KM

“Luxury retailer Hermès and non-fungible token designer Mason Rothschild faced off in court yesterday in the first major test of how trademark law applies to NFTs and other digital designs,” writes Morning Brew’s Jamie Wilde:

Hermès claims Rothschild infringed on its trademark by digitally depicting furry versions of its iconic Birkin bag in his collection of 100 “MetaBirkin” NFTs. But Rothschild argues that MetaBirkins are a lawful, artistic interpretation of the brand’s product—similar to Andy Warhol’s prints of Campbell’s soup cans.

Though the crypto downturn has deflated the value of NFTs…Hermès says that Rothschild swooped its chance to capitalize on digital collectibles at the height of the craze, like its peers did.

Read the whole story here on Morning Brew.

Today’s top retail reads.

Texas two-step: Inside “Project Plato,” Johnson & Johnson’s alleged plan to mitigate liability for asbestos claims related to baby powder—a plan first tested by Koch Industries. (The New Yorker)

Seller’s market: There’s another angle to consider amid the flood of Bed Bath & Beyond headlines: What will become of the commercial real estate left empty if the debt-ridden retailer succumbs again to bankruptcy? (The Wall Street Journal)

(K-)Pop off: If partnerships with BTS members are anything to go by, the world’s biggest luxury conglomerate, LVMH, is all in on winning over the Korean market, which has long been a key target for luxury brands. (Insider)

The holiday season is one of the most significant moments for retailers, bringing in nearly $800 billion annually.

But what happens after the holiday rush? Many businesses enter a so-called “post-holiday slump,” which can pose a serious financial challenge if they’re not prepared to combat it.

Don’t let that happen to you. Check out Retail Brew’s guide for quick tips on finding sales success in the new year.

What happened in the world of retail this week in…1886 and beyond? Retail Brew takes you way, way, way back.

• On January 29, 1886, Carl Benz applied for a patent for a “vehicle powered by gas engine”—the first modern automobile.
• On January 31, 1990, McDonald’s first brought the iconic golden arches to Russia, in Moscow’s Pushkin Square.
• On January 31, 1893, the now-famous Coca-Cola logo was trademarked with the US Patent Office. At the time, the word “trademark” was written inside the tail of the first C, but later iterations of the logo removed it.
• On February 2, 1925, the first Sears retail store opened in Chicago, featuring both an optical shop and a soda fountain.

Catch up on the Retail Brew stories you may have missed.

• Does sustainability in the metaverse translate to IRL?
• C-suite moves that kicked off the year
• The story behind Coca-Cola’s iconic bottle