retail news in context, analysis with attitude

Random and illustrative stories about the global pandemic, with brief, occasional, italicized and sometimes gratuitous commentary…

•  As of this posting, there have been 14,372 cases of the Covid-19 coronavirus reported in the US, and 217 deaths.

Globally, there have been about 254,654 reported cases in the pandemic, and 10,440 deaths.

•  CNN has a story suggesting that the ways in which consumers have been forced to change their shopping habits by the Covid-19 coronavirus pandemic are likely to have a lasting impact on the supermarket industry, getting them accustomed to online shopping and maybe, just maybe, getting them to prefer it to going to the store:

"While shopping for books and electronics online and ordering dinner through delivery apps have become staples of American life, most customers still prefer to purchase their meat and vegetables at the store. Last year, just 4% of grocery sales in the United States came online, according to Nielsen.

"However, with shoppers stuck in their homes in the wake of the virus, online grocery shopping is exploding. Downloads of Instacart, Walmart's grocery app and Shipt increased 218%, 160%, and 124% respectively last Sunday compared with a year prior."

One result of this shift, the story suggests, could be a consolidation of power by big companies, which are better capitalized and therefore better able to adapt.

From the CNN story:

"Consumers adopting online grocery shopping may add to the pressure small and mid-sized grocers already face, analysts say. These smaller chains don't have as much capital to invest in building out their delivery infrastructure. And delivery is less profitable for grocers than traditional purchases in stores."

Check out the story here.

I'd like to suggest something radical here.  I know that every company, big and small, is swamped and challenged by the demands of the moment.  But I think that every company that wants to be prepared for what the market is going to look like when we get to the end of the tunnel ought to have a small task force charged with figuring out what that company needs to look like at that point.

What products and services will the company offer that it did not offer before?  What did the company offer before that needs to be jettisoned?  How should the company's management structure be redesigned to be more responsive?  To what degree can stores and the company's front lines be better empowered to be more responsive, relevant and resonant?

You cannot wait to ask these questions until the crisis is over.  You need to ask the questions and begin formulating answers now.  Every company will be transformed, but the question is whether they will transform themselves or be transformed by events.

•  Bloomberg has an interview with Kevin Holt, CEO of Ahold Delhaize in the US, in which he "admits there’s no game plan for the coronavirus, which has forced executives to flex finely-tuned supply chains, soothe harried employees, and all the while ponder how shopping could forever change in the aftermath.

"In the short term, with supply and demand of items like hand sanitizer, disinfecting wipes and toilet paper still out of whack, Ahold and its suppliers have agreed to reduce the variety of items available in certain categories. That allows manufacturers to focus on making more of just a few core products, and simplifies the replenishment process on the retailer’s end."

The story goes on:  "Holt has made other, less perceptible changes across his 1,995 U.S. stores. In addition to cleaning checkouts and shopping carts more often, he’s removed some of the clutter in aisles, to help customers maintain some social distance. He’s adding staff and trucking routes. He’s also reduced orders of a few products -- combs, say, or light bulbs -- that aren’t in danger of being hoarded.

"On the employee-benefits side, he’s looking at accelerating the accrual of sick days so new associates can access them sooner."

And, Bloomberg writes, Holt is "talking with economists and other experts to try and figure out which shopping habits, adopted in haste to cope with the crisis, might prove lasting behaviors."

See my commentary above.  My only suggestion is that it is not enough to talk to economists and "other experts."  You have to put into place a team that is charged with coming up with an action plan that is not just ready to be put into place when the world shifts back to a more normal existence, but actually creates a new normal for the company.

•  From Bloomberg, a story about the ripple effects of the pandemic:

"Across the globe, governments are imposing travel limits in a bid to stem the spread of coronavirus. The unintended consequence is a squeeze on migrant labor that’s a cornerstone of food production.

"American produce growers preparing to harvest crops are warning of a devastating impact on fruit and vegetables after the U.S. Embassy in Mexico announced a halt to visa interviews for seasonal farm workers. Slaughterhouses also may face labor shortages."

Robert Guenther, senior vice president for public policy for the United Fresh Produce Association, tells Bloomberg, “There won’t be anyone to harvest the crops.  It will be devastating to growers and ultimately to the supply chain and consumers. They won’t have the food."

The story notes that "the timing for the disruptions in some ways couldn’t be worse. In the Northern Hemisphere, farmers are gearing up for their peak spring and summer growing seasons. Ranchers also tend to sell more animals to slaughter at this time of year."

•  Walmart said yesterday that its charitable foundation is committing $25 million to support organizations that are responding in various ways to the coronavirus, including the global health response.

The company said that roughly $10 million will be devoted to improving food security;  the first set of grants are expected to be made as soon as this week.

•  The Los Angeles Times reports that California Gov. Gavin Newsom last night ordered statewide shelter-in-place restrictions, mandating that people must stay in their homes except to go to the supermarket, drug store, access health care, or go outside to get exercise (but only in small groups).

The Times writes that "the governor’s order comes at a critical time in California, where 19 people died and another 958 have tested positive for the disease. 

"Officials hope telling people to remain in their homes and restrict social interactions will slow the spread of the virus and ultimately prevent hospitals from being overrun with sick patients. The request for all residents to quarantine at home marks the strongest escalation of the Newsom administration’s response to the virus."

The story notes that "Newsom on Thursday also asked Congress for $1 billion in federal funds to support the state's medical response to the novel coronavirus, which he said he expects will infect more than half of all Californians."

California has the third-most coronavirus cases in the US,  New York is first, with 5,713 cases and 38 deaths, and Washington is second, with 1,377 cases and 74 deaths (the highest mortality rate in the US).

•  Yahoo Finance reports that Walmart "plans to hire 150,000 hourly associates in the U.S. and announced $550 million in cash bonuses to reward workers amid the coronavirus (COVID-19) pandemic."

The story says that Walmart "is reaching out to folks in the restaurant and hospitality industry to provide jobs."  While the Walmart jobs largely will be temporary, those people from the hospitality industry are out of work and are seen as a good source of immediate labor.

•  CNBC reports that Amazon has shut down its Prime Pantry service for the time being because of its inability to keep up with orders generated because of the coronavirus pandemic.

Prime Pantry allows member consumers to order discounted grocery and household items for delivery, with the requirement that each order hit a certain level to qualify for shipment.

The Amazon site says:  "Pantry is temporarily closed. We're busy restocking.

"Due to high order volumes, Pantry is not accepting new orders at this time. This means that items listed as 'Ships & Sold from Pantry' cannot be added to your cart. We apologize for this inconvenience, and are working with our partners to get these items back in stock as quickly as possible. 

"You can still shop for household staples and other essentials through the following stores: Fresh, Whole Foods, Grocery or Household products. At this time, due to high demand, our other stores may have limited availability and delivery. "

CNBC notes that Prime Pantry isn't the only part of the company's business that has been affected.  "Amazon’s same-day and next-day grocery delivery services have also been hit with delays as shoppers have turned to online retailers amid product shortages at physical stores. Prime Now and Amazon Fresh delivery windows remain scarce or, in some areas, unavailable for several days. Prime Now shows a notice warning shoppers of limited delivery availability in their area. 

•  Hy-Vee announced yesterday that it is installing temporary window panels at its checkouts as  away of protecting its personnel from the Covid-19 coronavirus.

"These panels are being installed at the checkout, as this is the point in the store visit where customers and employees are in the closest contact," the company said.  "In the aisles or at our service counters, customers and employees have more flexibility in placing distance between themselves but the setup of the checkout limits that ability. These panels are in place in our Des Moines-area stores, and will be installed in all other Hy-Vee locations over the next few days."

Hy-Vee also said it is for the time being banning the use of reusable cloth bags in its stores, since it is harder to guarantee their cleanliness.

“The spread of this virus is asking us all to take extraordinary measures and change the way we live our lives,” said Randy Edeker, Hy-Vee’s chairman, CEO and president. “We are continuing to adapt at Hy-Vee so that we can serve our customers and keep everyone in our stores as safe and healthy as possible.”

•  The Associated Press reports that the US Department of State has issued an alert to American citizens, warning them against all international travel because of the Covid-19 coronavirus pandemic.

“The Department of State advises U.S. citizens to avoid all international travel due to the global impact of COVID-19,” the State Department said.  “In countries where commercial departure options remain available, U.S. citizens who live in the United States should arrange for immediate return to the United States, unless they are prepared to remain abroad for an indefinite period. U.S. citizens who live abroad should avoid all international travel.”

A "level four" alert generally is reserved "for specific countries embroiled in conflict, natural disasters or where Americans face specific risks," the AP writes.

•  Variety reports that it may be an indication of China moving beyond the most insidious spread of the Covid-19 coronavirus there that its movie theaters are expected to begin opening soon … even as they have been closed virtually everyplace else.

“Our cinema is preparing to re-open, but we haven’t been formally told when exactly we can officially resume,” Yang Yang, programmer at the Broadway Cinematheque in central Beijing, tells Variety.  “It’s unlikely a nation-wide directive to re-open will come down from the film bureau, because every province and region is at a different stage of epidemic prevention, so the requirements for re-opening will vary. It’s more likely that over a period of time, cinemas will slowly, progressively re-open.”

Yesterday, it was reported that while Beijing continued to see cases of the coronavirus from people who came to the country, so-called "local transmission" of the virus on Monday was zero … suggesting that the pandemic there is on the downward slope.

•  The Sacramento Bee reports that Raley's there "has begun posting off-duty sheriff’s deputies outside some of its markets to help keep things calm."  One of the officers said that they've been contracted to provide store security for the next two weeks.

•  Tyler, Texas-based Brookshire Grocery Co. announced that it is giving its almost 14,000 employees a special bonus in appreciation for their outstanding effort and service over the past month. The discretionary bonus is equivalent to up to one half week’s pay for active employees. 

“We want to show our appreciation for the incredible hard work and dedication of our employees supporting each other, our neighbors and communities during these unprecedented times,” said COO Trent Brookshire.  “As our stores are an essential destination for our communities, it’s been amazing to witness our team pull together to serve our customers like never before. We believe it is the right thing to do to give back to our partners as they have demonstrated grit, determination, commitment and care for our guests and communities over the past few weeks.”

•  Delish reports that signs are going up at some Costco stores informing customers that they cannot return certain high-demand items - like toilet paper, paper towels, rice, water, sanitizing wipes, and Lysol.

The story suggests that Costco is trying to prevent panic buying, which not only affects the customers who cannot then get these items, but also throws the supply chain into confusion.

While it is hard to imagine at this moment that anyone would be returning this stuff, the other thing this prohibition probably does is make sure that items that may have been infected are not then being returned to store shelves and resold to unaware consumers.

•  A press release received yesterday:

"Today the International Foodservice Distributors Association (IFDA) and FMI-Food Industry Association announced an ad-hoc  partnership motivated by widespread consumer needs fueled by the coronavirus pandemic.  The partnership is a matching program that connects foodservice distributors that have excess capacity (products, transportation services, warehousing services) to assist food retailers and wholesalers that require additional resources to fulfill needs at grocery stores, which are experiencing skyrocketing demand."

It goes on:  "While food industry resources are stretched to capacity, foodservice distribution resources are in need of economic sustainability. This partnership will not only fill a crucial gap, but will also serve the American population from one end of the country to the other."

•  One measure of how the pandemic is affecting the restaurant and hospitality business - online reservation application OpenTable says that "the number of diners in the U.S. was down 17% Y/Y on Monday, down 21% on Tuesday, down 22% on Wednesday, and down 32% on Thursday."

•  The Washington Post reports that "Domino’s Pizza announces it will hire 10,000 workers to meet delivery demand during the coronavirus outbreak … Domino’s spokeswoman Jenny Fouracre-Petko said the new hires could involve 'anything from delivery driver to pizza maker to customer service representative, or manager'."

That number represents a significant bump in Domino's workforce;  the story notes that "Domino’s and franchise locations employ 120,000 people across the United States."

•  CNBC reports that "Best Buy is turning all in-home consultations virtual and limiting the number of customers in each store to 10 to 15 at a time, the company said in a statement … Customers will be escorted by an employee, who is six feet away. The company said it will have fewer employees working at any one time. It will pay employees who are not working two weeks’ wages.

"Best Buy will continue curbside pickup and drop off of products that need repair by the Geek Squad -- but the company said it will not allow people to cluster in groups to maintain safe social distancing. Online orders will continue to be shipped to homes. 

"All in-home consultations will become virtual and deliveries will be done, if permitted and safe, the company said."

•  FMI, The Food Industry Association, yesterday issued a statement commending the Cybersecurity and Infrastructure Security Agency (CISA) "for including food and agriculture and transportation and logistics among its essential, critical infrastructure. This allows grocery stores and their supply chain partners to maintain their daily operations to serve customers."

•  The Motley Fool reports that Simon Property Group has announced that it is closing its some 200 malls in the US until Sunday, March 29.

"The health and safety of our shoppers, retailers and employees is of paramount importance and we are taking this step to help reduce the spread of COVID-19 in our communities," the company wrote.

At the same time, USA Today reports that "all 32 Westfield malls across the United States, including World Trade Center, Garden State Plaza and Century City locations, will be shut down for all but 'essential' retail outlets due to the coronavirus pandemic."  These closures also will end on March 29.

•  USA Today reports that "Bed Bath & Beyond is temporarily closing 800 stores due to the coronavirus pandemic, but plans to keep approximately 700 'essential' stores open with reduced hours."  The closures will last until April 3.

According to the story, "The stores staying open are 'essential' because they 'sell health care, personal care, infant care, cleaning supplies, or food and beverages.'  The essential stores include Bed Bath & Beyond stores that have health and personal care departments, the company's buybuy BABY and Harmon store concepts."

Hate to say it, but Bed Bath & Beyond may end up seeing this as a silver lining … because a few weeks ago, few people would have described anything about the company and its stores as being "essential."

•  The Washington Post reports that Uber is projecting a worst-case scenario of ridership that will down be down by as much as 80 percent this year.

Already, the story says, "passenger trips have declined by 60 percent to 70 percent in cities worst hit by the spread of the novel coronavirus, including Seattle, Uber chief executive Dara Khosrowshahi said in a call with analysts. Trips declined in Hong Kong by 45 percent but are on the rebound."

•  From the Seattle Times, a sobering assessment of the pandemic's impact on the region:

"More than 400,000 workers in the Puget Sound region are in industries facing immediate risk due to impacts from the coronavirus pandemic, and more than 500,000 additional workers are in industries facing near-term risk, says a white paper commissioned by the Seattle Metropolitan Chamber of Commerce and released Wednesday.

"The region’s economy is experiencing “an economic shock that will take many months and beyond to recover from,” with impacts likely to result in wage reductions or at least temporary layoffs in about 40% of the approximately 2 million jobs in King, Pierce and Snohomish counties, according to the study by the Seattle-based research firm Community Attributes Inc. (CAI)."

•  From Bloomberg:

"Ocado Group Plc has temporarily closed its website as it struggles to cope with demand from shoppers trying to stockpile groceries.

"The U.K. online grocer said it would close until Saturday as it is trying to manage a 'simply staggering amount of traffic to our website right now and more demand for products and deliveries than we can meet.' Its decision means shoppers cannot edit any existing orders or book a new delivery for the next few days."

•  Some reassuring news from the Wall Street Journal:

"You wouldn’t know it from the bare grocery store shelves across the country, but America has plenty of food. The challenge is getting it from the farm to your table.

Companies that supply meat, vegetables and other staples are struggling to redirect the nation’s sprawling food supply chain to meet a surge in demand caused by the coronavirus pandemic.

"Restaurant closures and shoppers’ rush to stock their pantries are forcing the agriculture industry to boost production, hire new employees and set up 'war rooms' to keep grocery stores stocked … To meet demand, processing plants are churning out more supermarket-ready packs of chicken breasts, pork chops and salad greens while companies build volunteer teams to deploy across facilities if workers fall ill.

"Companies’ plans include cross-training employees to do various tasks; monitoring possible disruptions to the H-2A visa program used to import agricultural workers; and talking with hospitals and churches about setting up child-care options for workers if schools close."

You can read the full story here.

•  Finally, the New York Post has a story about how people are able to rise to the occasion, even in the toughest of circumstances.

New York City Mayor Bill De Blasio issued a call for retired and private practice doctors and medical professionals to contribute their time and energies to helping the city cope with the pandemic's impact on the health care infrastructure.

One thousand volunteered the first day.

According to the story, "They join the 9,000 medical professionals already registered with the city’s Department of Health as part of the Medical Reserve Corps. to pitch in during times of emergency."