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    Published on: April 7, 2020

    MNB Content Guy Kevin Coupe argues that the time is coming - and in fact already may be here - for some retailer to adopt a strict policy:  No mask, you can't come in.  There will be blowback, but people without masks are putting employees and other customers at risk...and that's not acceptable.  And once one retailer does it, it should encourage others to do the same.

    Published on: April 7, 2020

    by Michael Sansolo

    A crisis, the likes of which we are having now, is incredibly disruptive, awful and frightening. In a strange way, it is also a gift.

    As even Psychology Today has written in the past, a crisis can be positive if it improves our focus on what’s most important and in how it creates the opportunity for dramatic improvement. Let’s hope that dramatic improvement is what will be coming whenever we emerge from the current situation. We need some positive thoughts after all.

    For possibly the first time ever, consumers are becoming aware of the importance of supply chains. In the very recent past, it was simply assumed that supermarket shelves would be constantly teeming with goods whenever any shopper decided to visit. Out-of-stocks were always an issue, but frankly were incredibly rare.

    No one gave much thought to all the incredible parts of the supply chain from truckers to warehouse workers to store clerkS dutifully refilling shelves. For good reason, those same workers (and others) are now seen as heroes.

    But again, a crisis can give us the chance to innovate like never before.

    There’s been interesting discussion here at MNB on the role the somewhat slimmed down supply chain played in product shortages in recent weeks. However, I find myself in agreement with FMI president Leslie Sarasin, who recently commented that the issue was more related to the sudden shocking increase in demand for specific products, rather than any fault in the supply chain.  (To be fair, several people interviewed here on MNB in recent weeks have argued the opposite - that the industry should have been better prepared to meet increased demand.)

    Let’s remember that the industry supply chain is a constant work in progress. Twenty-five years ago, I had the good fortune to be working at FMI on the massive efficient consumer response (ECR) initiative, which frankly I wish had lasted a lot longer.

    ECR started when the traditional industry questioned how then-upstart competitors (Costco and Walmart) were able to offer such incredibly low prices. An enormous industry study was produced with the expectation of finding favorable deals for the new players. What it found, instead, was the lower prices were largely the result of far greater efficiencies in the entire supply chain.

    So ECR (an effort that involved hundreds of executives from all parts of the industry) set out to help improve efficiencies in replenishment, assortment, promotions and new item introductions in hope of eliminating bloated inventories and making companies more responsive to consumer demands.

    In the face of incredible shopper patterns (or hoarding) in the past month, it might make some nostalgic for a less efficient supply chain. But we need remember that back in the mid-1990s, consumers voted with their shopping dollars to those companies who ran leaner. So a return to inefficiency is not an answer.

    Instead, we have to hope that this crisis creates renewed focus in supply chain improvement, such as addressing SKU proliferation. And more.

    In the past two weeks, MNB had a wonderful story about how H-E-B, one of retail’s best operators, managed to cope with the explosion of demand better than most. As the article from Texas Monthly outlined, H-E-B basically created an early warning system, alerting the company to coming shopper crunches and helping the company bulk up key inventory to meet expected demand.

    No doubt, history with hurricanes and floods in Texas have helped H-E-B improve that system.  Likewise there are retailers in other parts of the country whose experiences with wildfires, earthquakes, tornadoes, snowstorms and more have created similar institutional knowledge and a playbook for an unforeseen crisis like the one we have today.

    Nothing will make the current worries any less exhausting, but at least let’s have the hope that good things will come from it. As a Stanford economist Paul Romer once said, “A crisis is a terrible thing to waste.”

    Let’s not waste this one.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com.

    His book, “THE BIG PICTURE:  Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available here.

    And, his book "Business Rules!" is available from Amazon here.

    Published on: April 7, 2020

    The Washington Post this morning has a story about how "major supermarket chains are beginning to report their first coronavirus-related employee deaths, leading to store closures and increasing anxiety among grocery workers as the pandemic intensifies across the country."

    From Walmart stores in Illinois to a Trader Joe's in the suburbs of New York City to a Giant in Maryland, employees are reported to have died from the Covid-19 coronavirus.

    The Post writes that "though more than 40 states have ordered nonessential businesses to close and told residents to stay home to stem the spread of the virus, supermarkets are among the retailers that remain open. Thousands of grocery employees have continued to report to work as U.S. infections and death rates continue to climb, with many reporting long shifts and extra workloads to keep up with spiking demand. Many workers say they don’t have enough protective gear to deal with hundreds of customers a day. Dozens of grocery workers have tested positive for the coronavirus in recent weeks."

    KC's View:

    The Post story makes the point that at the same time as food retailers are looking to hire thousands of people so they can keep up with pandemic-driven demand, they also are playing catch-up in terms of adding elements to their stores - like plexiglass that separates checkout personnel from customers - that will do a better job of protecting people from infection;  they're also doing things like taking the temperatures of employees when they show up for work, as a way of pre-empting at least some potential problems.

    There have been some criticisms of retailers for not moving fast enough to make these adjustments, and even preventing employees from wearing masks.  Some of those criticisms are fair, but I think it is important to put those actions in context - a lot of those stores are operating in places where politicians have not taken the pandemic as seriously as they should, and have set a tone making it difficult to be more proactive.  Let me be clear, though - this is an explanation, not an excuse.  When public officials don't do their jobs, it is up to businesses to get ahead of the curve.  Which many have done over the past weeks.  Admirably, I would argue.

    Which brings me back to this morning's FaceTime commentary.  It is time for some retailer to step up and say that if customers are not wearing masks, they cannot enter the store.  Period.  Letting people in stores without masks right now is to put employees and other customers at risk.  Which is unacceptable.  If someone shows up without a mask, the store can offer to take his or her list and do the shopping for them, or, if they are available, offer them a mask that they must wear while in the store.  But the industry needs to take some leadership here.  And it needs to do so now.


    Published on: April 7, 2020

    Excellent piece in the New York Times about how "the youngest American adults are facing what is, for most of them, the first serious economic crisis of their working lives. By most measures, they are woefully unprepared.

    "While the last few years were largely good ones for the American economy, that did little to help set millennials up with a solid financial foundation. Overloaded with credit card and student debt, and underrepresented in the housing and stock markets, they entered this uncertain period with significant obligations and few resources.

    "Their position looks doubly precarious when measured against older generations today and relative to those generations when they were the same age, from 23 to 35 years old."

    The story notes that "the inequality among millennials is even more evident when race is taken into account. Young black families at all educational levels have fallen further behind their white peers over the last two decades in measures like household wealth and homeownership, according to research from New America."

    These disadvantages, the Times writes, "are already shaping the long-term prospects of young Americans. They are much less likely to be married, have children or own a house than Americans of a similar age in decades past."

    KC's View:

    And now, with many of them facing major financial issues that will not be resolved even when effective treatments for the Covid-19 have been determined, and a vaccine has been approved and been made widely available, these young people may have to adjust their expectations and belief systems … which is almost certainly going to affect their consumption habits, as well as their social/cultural/political behaviors.

    Not that this is a bad thing.  Every generation deals with something … though some generations have greater challenges than others.  They will have to deal with it, though I do think that the culture has some responsibility to helping millennials (not just because they will need the help, but because it will be important to keep the economy and culture thriving.  Keeping them engaged will be in our own self-interest.

    Published on: April 7, 2020

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

    •  In the US this morning, there are 367,659 cases of the Covid-19 coronavirus, with 10,943 deaths and a reported 19,814 recoveries.

    Globally, there now are 1,358,857 cases of the coronavirus, with 75,896 deaths and 290,643 reported recoveries.


    •  The Associated Press has a story about the conundrum being faced by some food delivery services that have found themselves in high demand because of the pandemic.

    On the one hand, they are so busy that consumers frequently cannot find delivery slots.  But on the other, the delivery businesses have to consider the extent to which they want to ramp up their investments in infrastructure … since they are working on the assumption that at some point the current scenario will come to an end.

    For Ocado in the UK, for example, "a cutting edge service that relies on warehouse robots, significantly increasing deliveries would mean a big investment in new machinery and warehouses too late to catch the spike in demand."  And what nobody knows is the degree to which demand will subside.

    In the US, the story says, "grocery shopping had only been slowly migrating online, making up 3% of the food retail market, according to a report last year by Deutsche Bank.

    "As the crisis hit, delivery orders surged as millions of Americans stayed home. During the week of March 2, even before some cities and states imposed “stay at home” orders, Instacart, Amazon, and Walmart grocery delivery sales all jumped by at least two-thirds from the year before, according to Earnest Research. Instacart, a platform that partners with more than 25,000 stores in North America, says orders in more recent weeks have surged 150%."

    I think this is a kind of existential question that the industry has to deal with, at a time when, quite frankly, retailers are dealing with a lot of existential questions.

    To me, it probably means being willing to question fundamentals about the business, and challenge assumptions up and down the line.  I've said this before - I think businesses ought to be forming teams (small ones, what Jeff Bezos might refer to as one-pizza or two-pizza teams) charged with envisioning how the business should be different when we all reach the end of this tunnel, and then figuring out how to make those changes.  You have to do this now … to think about it when you get to the end of the tunnel is way too late.

    I think this is something that Tom Furphy and I will talk about in tomorrow's Innovation Conversation.  Stay tuned.


    •  The Los Angeles Times has a story about how the retail apocalypse that many expected in 2020 may end up being a lot better scenario than what actually unfolds.

    "More than 15,000 stores could permanently close this year, according to Coresight Research, the Times writes. "That’s approaching double the 9,548 stores that big chains announced they would shutter in 2019, a particularly brutal year for retail with the bankruptcies of Payless, Gymboree, Charlotte Russe and others.

    "The year had started out well with 2,910 openings and 1,883 planned closures through March 22 — far under the 5,399 closures that were announced for the same period last year. Coresight had predicted closures to pick up by the end of the year to roughly 8,000, but that’s barely more than half the number expected now … The toll of virus-related closures, which for now are temporary, is immense, with at least 600,000 mostly low-wage workers furloughed last week despite President Trump signing a $2-trillion stimulus package that includes billions in loans to damaged industries."


    •  Kroger announced yesterday that it will " begin to limit the number of customers to 50% of the international building code’s calculated capacity to allow for proper physical distancing in every store … As an illustration, the standard building capacity for a grocery store is 1 person per 60 square feet. Under Kroger’s new reduced capacity limits, the number will be 1 person per 120 square feet. Kroger will begin to monitor the number of customers per square foot in its stores using its industry-leading QueVision technology, which already provides a count of the customers entering and exiting stores."


    •  Reuters reports that Uber is saying that "its app will list job openings in the delivery, food production and grocery industry that its U.S. drivers can access during a slump in ride-hailing demand due to the coronavirus."

    According to the story, "Uber also said it would reach out to the more than 240,000 of its registered drivers holding commercial licenses to connect them to logistics companies for employment and contract opportunities.  It also encouraged drivers to sign up for its Uber Eats food delivery service, saying restaurant orders have seen a significant increase since mid-March."

    Among the companies with which Uber says it will connect its drivers are McDonald’s, FedEx, United Parcel Service, Pepsico, Hertz, Walgreens, Domino’s Pizza, andTarget-owned Shipt.

    Smart move, and seemingly similar to how Amazon is working with Lyft.


    •  The Seattle Times reports that Washington State's "K-12 public, private and charter schools will remain closed through the end of the academic year, Gov. Jay Inslee announced at a Monday news conference. Distance learning should continue, he said, and schools are expected to resume a normal schedule this fall."

    Schools originally were scheduled to reopen on April 24, but Inslee always has stressed that the shutdown could be extended.

    "We simply cannot take the chance of reopening on-site instruction in this calendar school year,” Inslee said. “We cannot risk losing the gains we have made after the peak of this pandemic presumably will have passed.”

    I can tell you, as someone with a spouse who is a third grade teacher currently engaged in e-teaching, that Mrs. Content Guy never has worked harder.  (And she works really hard all the time.)  It is an enormous challenge, and I do think that two things may emerge from the experience - we'll all appreciate teachers a lot more, and parents especially will have an understanding of the demands of a modern education.


    •  The Seattle Times writes that "Amazon is donating 8,200 laptops to families of elementary-school students in Seattle Public Schools who don’t have access to a device needed for remote learning while schools are closed because of the COVID-19 pandemic, the company and school district announced Monday morning.

    "The donation also kick-starts the new fund, the Education Equity Fund, stewarded by the school district’s nonprofit partner, the Alliance for Education. Businesses, community groups and individuals will be able to donate to the fund, which aims to 'support students furthest from educational justice in accessing the technology, technical support and additional learning resources required to continue to learn during the COVID-19 crisis,' the announcement says."


    •  British Prime Minister Boris Johnson is said to be in intensive care in a London hospital this morning, fighting a serious coronavirus infection.

    Johnson is said to be the first head of government to have been infected with Covid-19.



    •  The Masters golf tournament yesterday announced that it has been rescheduled from this week to November 12-15, when it will be played, as usual, at Augusta National Golf Club in Augusta, Georgia.

    The New York Times notes that "the event, one of the most watched sporting events annually, has never been played in the fall, where it could conceivably be vying for attention with a weekend full of professional and college football games, if the N.F.L. and the N.C.A.A resume their regular schedules."

    The story also notes that the United States Open has been rescheduled for mid-September, and the P.G.A. Championship is now "scheduled to begin in San Francisco on Aug. 6. The British Open, the fourth men’s major, was canceled and will next be played in July 2021."

    I'm thinking that the oddsmakers in Vegas won't just be taking bets on who might win all these various events, but also will be entertaining wagers on whether they'll actually take place.


    •  Variety reports that London's West End theatre district will remain closed until June, shuttered as a result of the coronavirus pandemic.    An estimated 300,000 people attend West End theaters per week, the story notes.

    Published on: April 7, 2020

    The Boston Globe has a lovely piece by Jeneé Osterheldt in which she writes about her dad:

    "For 40 years, he’s worked in grocery stores. He keeps track of the inventory. He throws the freight. He stocks the shelves.

    "He has but one day off a week. And because he works the graveyard shift, his days are for sleeping. He rarely takes vacation.

    "He’s been held up at gunpoint during a robbery. He’s worked through aches and pains that come with age. He’s seen Amazon cut into the local grocery store business and force a lot of folks out of jobs.

    "But for my dad in northern Virginia, like us in Massachusetts and the rest of the world, coronavirus is uncharted territory."

    Osterheldt writes that her dad has seen both an upside and a downside in the current situation.

    “People never treated me nice,” my dad says of customers. “Are you kidding? No Neé, not in all my life. Now everybody is saying ‘thank you,’ but you know, I can’t find a face mask anywhere.”

    You can read the story here.

    Published on: April 7, 2020

    •   Reuters reports that Delhi Vyapar Mahasangh, an Indian retail group, has asked that country's courts to "allow the restart of an antitrust investigation into Amazon.com Inc and a Walmart unit that is on hold following a legal challenge by the companies … The appeal will likely be heard later this month at a time when both Amazon and Flipkart are battling slowing sales and logistical challenges during India's lockdown to tackle the coronavirus which has resulted in supply chain disruptions."

    The story notes that "the Competition Commission of India (CCI) in January ordered an investigation into business practices of the two e-commerce giants, but the High Court in Karnataka state put it on hold after Amazon argued the CCI did not have sufficient evidence to order it … Amazon and Flipkart have been facing mounting criticism from Indian retailers which accuse them of discriminating against small sellers and racking up billions of dollars of losses to fund deep discounts."

    Published on: April 7, 2020

    •  Tops Friendly Markets announced the promotion of Lenny Smith , the company's director of decision support, has been promoted to the role of director, decision support & pricing, responsible for providing "knowledge and skills across the decision support and pricing function to a 'best practice' level, with an emphasis on analytics, computer systems, merchandising, and retail operations practices."

    Published on: April 7, 2020

    •  Al Kaline, who played for the Detroit Tigers for 22 years, becoming a first ballot Hall of Famer with  3,007 career hits, 399 home runs and 10 Gold Glove awards, has passed away at age 85.

    The New York Times writes that Kaline "became the youngest batting champion in major league history in 1955 when he hit .340 at age 20."


    •  Honor Blackman, who first achieved fame as Cathy Gale in the second and third seasons of the British TV series, "The Avengers," and then reached icon status as Pussy Galore in the third James Bond film, Goldfinger, has passed away.  She was 94.


    •  James Drury, who played the title role on "The Virginian," a TV series that ran from 1962 to 1971 - making it, at nine seasons, the third-longest running western series after "Gunsmoke" (20 seasons) and "Bonanza" (14 seasons) - has passed away.  He was 85.

    Published on: April 7, 2020

    Responding to yesterday's "Burt Flickinger (Uncut)" Skype interview, MNB reader Joe Axford wrote:

    Excellent and informative interview Kevin. It's time for the big chains to up their game, move away from vendor funds as a source of income, and focus on the consumer. Perimeter departments, as you've been saying for years, are where stores can and should differentiate themselves. Keep up the good fight, I love these videos!

    And MNB reader Glenn Cantor wrote:

    I don’t ever watch 35 minute internet videos (with the exception of Robin Williams and Jonathan Winters as guests on a Tonight Show with Johnny Carson), but for Burt Flickinger I made an exception.  What a treat!

    And…he’s wearing a jacket and tie for a Skype interview.

    I told him he didn't have to.  But he insisted.


    I commented yesterday:

    I wonder if at some level restaurants - like supermarkets - may have to redefine their roles in communities over the long term.  It seems entirely possible that it could take many years for what we've come to think of as "restaurant culture" to regain past glory, and those creative people are going to be looking for outlets while still fulfilling their desire to feed people.  People often talk about "grocerants," as supermarkets that also can serve as restaurants.  But maybe we're also going to see "restaurmarkets," which will approach the creative and competitive challenge from the other direction.

    Prompting MNB reader Jason Wirl to write:

    As you probably know, Texas is BBQ country, and Austin (where I live) has it's share of good ones. Rudy's is one (that's also got stores outside of Austin and Texas) that has embraced the "restaurmarket" concept by taking their dining room and turning it into a marketplace. If you haven't been, the stores have both a restaurant side and a C-store side. The restaurant side has table-cloth covered picnic benches both inside and outside lined up end-to-end to facilitate getting to know someone you don't which will be frowned-upon for a little while. They've taken them out and put store shelves there and are selling some staples: bread, toilet paper and other things they get from their FS vendor. In the already-established coolers on the C-store side, there are items like eggs and milk in quantity they didn't have before. I didn't get any pictures as we were there only to pick-up an online order. When we go again and if we are still in the current status, I'll snap a couple. I agree it's a trend that MIGHT stick around to some degree.

    From another reader, on the same subject:

    Great story on HEB and partnering in the Houston market.  My wife tells me Nestle has partnered with local restaurants across the country to feed staff lunches at their various factories.  It’s really interesting and comforting to watch food companies reaching into their communities to help local businesses survive.  Long-term dividends will definitely pay out.


    On another subject, from another reader:

    An off topic question triggered by your comment about food service distribution employees finding temporary placement in the retail sector and an observation from a recent shopping trip.

    First the observation- This unnamed retailer, like many of their peers, was completely sold out of their regular brands of flour and sugar, but they had something on the shelves that looked suspiciously like food service flour.  It was in an clear bag and had what appeared to be a service department scale label on it.  I’ve declined  to name the retailer because I’m not certain all the required info was on the label, but I found this to be an innovative solution to satisfy some of their guests’ needs.

    Now the question.  All the restaurants and bars are closed or are open only for pickup.  What happened to all the face masks, gloves, disinfectant, hand soap, toilet paper, flour, sugar, etc. that the food service industry would normally be using?  Have their suppliers redirected these commodities into the retail sector and hospitals or are they sitting unused in warehouses waiting for the food service industry to rebound?  Just a thought.


    Regarding some changed consumer behavior during the pandemic, one MNB reader wrote:

    I haven’t stopped shaving (different folks draw the line differently I suppose) and I moved my Harry’s shipment forward to make sure I had enough of them & shaving cream.  Do the numbers include subscription services?  But I’ve stopped using cologne altogether….

    Okay. More than we needed to know.  🙂

    MNB fave John Rand wrote:

    Reading your website this morning when you (accurately) noted that sales in the Covid Era are up substantially for basic food supplies like bread and pasta, up for comfort items like ice cream and fell off a cliff for things like perfume and shaving supplies – and it suddenly occurred to me that I have seen this pattern in my life before; not from a virus, but from when I retired.  As soon as I stopped working, with its schedule of traveling, going to a company or a client’s office, frequenting airports and hotels, my habits and needs clearly changed.

    This pandemic may be an unparalleled opportunity for people of all ages to consider what their eventual retirement might be like. Can you cook for enjoyment? Do you have hobbies and interests that you can use to fill your time and keep yourself engaged? Can you enjoy your own company? Do you know your neighbors?

    This may be a good practice run, especially for people who are past the “young children” phase of life but might still be many years away from retirement age.

    Maybe … but a lot of the folks who are at home right now actually are working harder than ever, and when they think about retirement it may be in terms of asking certain questions, like…

    •  How soon do I get to retire?

    •  How hard did my IRA get hit?

    •  Forget retirement … when is it an acceptable time to open the wine?

    Not that I have any personal experience or anything.


    And finally, one MNB reader wrote:

    Just wanted to let you know that I have been enjoying MorningNewsBeat for a while now.  One of the things I enjoy most is FaceTime with the Content Guy.  Very glad to see that while we are all locked down, you are doing FTwtCG every day!  I can imagine that it’s a bit time consuming, but I think it’s a great idea to have these every day, especially right now as we all have such a lack of contact with people – so thank you!  I am hopeful that whenever the physical distancing is over and people return to their offices/everyday lives, that you still consider doing FTwtCG more than once per week.

    As you mentioned today, it’s a great time to reach out to people that you haven’t talked to in a while.  I have been doing this for a couple of weeks and it’s great.  I’ve really enjoyed catching up with old friends.  Long overdue and it’s too bad that it took something like Covid-19 to kick me into gear.

    I'm glad you like them.

    I have gotten the occasional question about why I'm no longer providing text versions of the videos, and it is simply because the vast majority of MNB readers don't seem to want or need them … and now that I am doing them every day - sort of running and gunning at a moment's notice, text versions don't seem to work as well.  I am trying to provide brief synopses, however.

    One or two people have mentioned that their employers do not allow them to watch videos on their work computers, and I feel bad about that.  But I'd really suggest that these employers need to join the 21st century and recognize that information isn't just communicated via text these days.  Businesses that block video (and, I'm guessing, audio) are putting themselves, their employees and, ultimately, their businesses at a competitive disadvantage.

    Trust your people, folks!  The vast majority will not waste time watching crappy YouTube videos … and the message you send with your distrust is a vivid one.


    And, one more thing…thanks again to all the members of the MNB community who have sent in puppy pictures.  As I've said, we're going to put together a montage of "The Dogs of MNB," and are still taking submissions.  Just email them in.

    Though it will be tough to top Spenser: