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    Published on: April 14, 2020

    In a new series of weekly Retail Tomorrow podcasts, Sterling Hawkins, co-CEO and co-founder of CART-The Center for Advancing Retail & Technology, and MNB "Content Guy" Kevin Coupe team up to speculate, prognosticate, and formulate visions of what tomorrow's retail landscape will look like post-coronavirus.

    Episode 2:  Hawkins and Coupe look at how supermarket employees have established themselves as being 'essential' during a pandemic and what that means going forward … the growing movement toward making the wearing of a mask a requirement when entering a store … how restaurants and fast feeders are getting into the grocery game and the implications for the future … and how 'we're all in this together' apparently means less to some retailers than others.

    THE RETAIL TOMORROW PODCAST CAN BE ACCESSED HERE, AS WELL AS ON ITUNES AND GOOGLE PLAY.

    Published on: April 14, 2020

    by Michael Sansolo

    Let’s be honest, things haven’t been fun lately. But reading Monday’s MNB, I found myself unexpectedly uplifted. It seemed like story after story examined ways businesses and consumers are learning to grow, evolve and change as we navigate the Covid-19 period.

    What was most uplifting was a single e-mail to KC from a reader who is discovering the joys of cooking. I have a feeling that person isn’t alone.

    To kill time (I seem to have so much of that these days) we’ve been spending many evenings binge watching various shows on Netflix and thanks to my adult daughter we’ve finally found a family favorite. It’s called “Nailed It” and might well be meanest, funniest and most instructive reality show I have ever seen.

    "Nailed It" operates with a simple premise: three amateur bakers are challenged to make intricate cakes, only they have both far too little time and way too little skill. The results are laugh out loud funny in most cases and the commentary from the expert judges is both educational and biting.

    But the show makes me think about more than the schadenfreude of seeing other people struggle. It reminds me how unskilled I personally am.  In fact, my wife and daughter have decided that once our semi-quarantine is ended, they are going to challenge me to bake up some goods. (My wife is an expert in the kitchen and her baked goods are both beautiful and delicious, so this is totally unnecessary.)

    Many years ago a retail friend gave what I still think is the smartest quote ever. He said that the incredible popularity of cooking shows is basically analogous to pornography. In his words, it’s things people like to watch, but will never, ever do themselves.

    I think that has to change with cooking, however, and maybe this virus will provide the push.

    Back when I was in school, home economics was required for all girls and shop for all us guys. Frankly, both should have been required for everyone, but sadly, as I saw with the education of my children, neither are required for anyone anymore.  At the moment, I’m sure my children think cooking and home repairs are far more important than, say, calculus.

    Given the incredible hit on municipal budgets I doubt either course in life skills is returning anytime soon, but there may be a fabulous opportunity for food retail to connect with shoppers in powerful ways by teaching them how to shop, store and cook smarter - skills that suddenly seem really important again. It won’t require creating a full academic curriculum, but maybe the industry can help by simply offering insights that inexperienced and lousy cooks (me included) can use.

    The New York Times had a simple article this weekend explaining how to find suitable substitutes for products when making assorted recipes with limited pantry options.  As so many of the stories on MNB made clear yesterday, look for opportunity to build on the centrality of food retail to modern lives.

    This crisis has made so many unexpected things possible in the way that necessity is always the mother of invention and growth. My 90-year-old parents managed to master Zoom.com technology (no small thing, by the way) so that we could hold a remote Passover Seder last week, bringing together family from five states and two countries. I have to believe that necessity is making a lot of us glad we've mastered modern skills, but also leave us wanting to get better at life skills long ago seen as unimportant.

    And that seems like a huge opportunity and certainly a way to find a bright spot in all of this.

    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 14, 2020

    Sure, there is a lot to be done every day.  There is barely enough time to get the things done that need to be done if the business is to keep up with the challenges of the moment and survive.  But … MNB Content Guy Kevin Coupe suggests that it is not too soon to consider the implications, challenges and opportunities of as post-pandemic world.

    Published on: April 14, 2020

    Axios reports on a new survey done in conjunction with Ipsos concluding that 70 percent of Americans "now consider going to the grocery store a risky act."

    In addition, the survey concludes:

    •  "One in five Americans now know someone who's tested positive."

    •  "57% of those still leaving the home to work as they normally would say they feel that doing their job is moderately or very risky, compared with 13% of those working from home."

    •  "African Americans (50%) and Hispanics (47%) are more likely than non-Hispanic whites (37%) to see their work as risky to their health or well-being."

    •  "Four in five worry about the possibility of getting sick themselves, though only one in five is 'extremely concerned'."

    •  "73% say airplane flights or taking mass transit poses large health risks."

    •  "Just 28% said having food delivered to their homes poses a moderate or large risk, compared to 33% for picking up takeout."

    •  "56% said they wear a mask occasionally, sometimes or all the time (30% said all the time), while only 37% said they ever wear gloves out."

    •  "Respondents' already high trust in their employers has climbed steadily, from 68% to 79%."

    •  "And 84% said they have either a great deal or fair amount of trust in local health officials and health care workers."

    KC's View:
       

    I must confess to tracking right along with all these survey results … and feel strongly that every time I go into the store - even stores that I think are doing a good job at facilitating physical distancing, practicing aggressive sanitation, and providing safety equipment to employees - I am putting my life at risk.  I try not to allow it to be paralyzing, but it is very much on my mind, in part because the stories and footage from hospitals around the country are so vivid and the ability to track and treat the virus so limited.

    And I wonder - as many people do, I suspect - when this will go away.

    Published on: April 14, 2020

    Smithfield Foods has shuttered "until further notice" a Sioux Falls, South Dakota, processing plant that represents more than five percent of US pork production, but where more than 250 people have been felled by the Covid-19 coronavirus.

    The sickened employees represent about half the total number of South Dakota residents diagnosed with the coronavirus, and close to 10 percent of the plant's employee count.

    National Public Radio reports that this is just one of several plants closed by the pandemic.  "JBS USA has closed a Souderton, Pa., beef plant until at least Thursday and has reduced production at a second facility in Greeley, Colo., because of high absenteeism among employees.  Cargill and Tyson Foods have also closed plants in Pennsylvania and Iowa."

    The US Food and Drug Administration (FDA) has said that there is no evidence that the coronavirus can be passed through food or food packaging.

    “The closure of this facility, combined with a growing list of other protein plants that have shuttered across our industry, is pushing our country perilously close to the edge in terms of our meat supply. It is impossible to keep our grocery stores stocked if our plants are not running. These facility closures will also have severe, perhaps disastrous, repercussions for many in the supply chain, first and foremost our nation’s livestock farmers. These farmers have nowhere to send their animals,” said Smithfield president/CEO Kenneth M. Sullivan in a prepared statement.

    The Hill reports that "consumer and worker safety groups say the Smithfield incident highlights that more must be done to ensure the welfare of those working in the industry as well as those buying food. And there are worries that if more plants close, American consumers could be hit by shortages."

    Meanwhile, the New York Times reports that this is all part of a broader continuum, as  "the nation’s food supply chain is showing signs of strain, as increasing numbers of workers are falling ill with the coronavirus in meat processing plants, warehouses and grocery stores.

    "The spread of the virus through the food and grocery industry is expected to cause disruptions in production and distribution of certain products like pork, industry executives, labor unions and analysts have warned in recent days. The issues follow nearly a month of stockpiling of food and other essentials by panicked shoppers that have tested supply networks as never before.

    "Industry leaders and observers acknowledge the shortages could increase, but they insist it is more of an inconvenience than a major problem. People will have enough to eat; they just may not have the usual variety. The food supply remains robust, they say, with hundreds of millions of pounds of meat in cold storage."

    KC's View:
     

    It almost has become a cliche to say that the people who work in the food business - whether in supermarkets or factories or trucks or delivery vans - are first responders, helping to keep us all from starving - and doing so, in my experience, with efficiency, proficiency, and uncommon good cheer.

    But the stories of people getting sick and dying while doing these jobs - stories that will become more common and more alarming with every passing day - will remind us of how fragile the chain is, and how, if it breaks to any significant degree, we may be faced with far more than just inconvenience.

    From the Times story:

    "The coronavirus pandemic has cultivated a growing appreciation for people who work in grocery stores, pharmacies and meat plants. Laborers who were once considered unskilled are now 'essential employees,' even heroes to some, because they are providing the nation with food and other crucial supplies at a time when the risk of infection is acute.

    "How employers and public health officials protect these workers has become a critical issue during the outbreak. Some workers’ rights advocates fear that safety standards are eroding at a time when they should be strengthened.

    "Last week, the Centers for Disease Control and Prevention issued new guidelines saying it is OK for essential employees to keep working after potential exposure to Covid-19 if certain conditions are met. Previously, those workers were told to quarantine at home for two weeks. Some say the new recommendations will put already vulnerable workers at even greater risk."

    Manufacturers and retailers need to do everything possible to protect their people, thinking not just short-term but long-term, understanding that at some point hard questions will be asked about their priorities and policies … and their answers will tell us much about these companies' culture.

    There seem to be examples of bad behavior - like the Reuters story saying that "at a Wayne Farms chicken processing plant in Alabama, workers recently had to pay the company 10 cents a day to buy masks to protect themselves from the new coronavirus."

    If that's true, it isn't just inappropriate.  It's disgusting.

    Published on: April 14, 2020

    Yesterday we reported that in a memo to vendors provided to MNB by one of those suppliers, Ahold Delhaize thanked the manufacturers for "continued support" meeting the challenges of the pandemic, and told the companies that it needs their help "in making sure we deliver on our commitments."  But it also told the vendors that "pandemic-related costs will be evaluated. As we continue to evaluate the impacts of this pandemic on our business, we will review ancillary costs we are incurring and revisit with each supplier as needed at a later date."

    Suppliers with whom MNB spoke saw the memo as serving them notice that Ahold Delhaize intends to charge them for as many of the costs incurred during the pandemic as it could.   And they were not pleased.

    Several suppliers then reached out to share a similar letter they received from SpartanNash, which reads as follows:

    Dear Vendor Partner,

    With the escalation of the coronavirus (COVID-19) pandemic, SpartanNash has unfortunately experienced a significant increase in cases whereby our inbound purchase orders have had items reduced or not filled due to the unprecedent (sp) high demand and manufacturers struggling to keep pace.  In addition to “fill rate” issues this is causing with our valued customers, we are also seeing multiple trucks -- that SpartanNash hires for customer pick up -- loaded light by our vendors as a result.

    In light of this unfortunate situation, we have made the decision that beginning with the ship date of March 16, 2020 and until the COVID-19’s impact on deliveries is rectified, SpartanNash will deduct for freight dollars owed based on either of the following:

    • Difference between ordered versus shipped quantity.

    • Difference between average quantity/order (truck) prior to COVID-19 versus shipped quantity.

    • Applicable to vendors who offer freight allowance with “delivered” pricing.

    • Applicable to vendors who offer FOB versus delivered pricing.

    We appreciate your support and understanding that SpartanNash cannot be burdened with a higher landed cost of goods due to product availability issues and we are not able to order excess inventory (not needed) to achieve a best truckload bracket price.

    The letter was signed by David Frizzle, SVP SpartanNash Transportation, and Steve Bidgood, Regional VP - Transportation.

    One of the vendors who supplied the letter to MNB wrote:

    Amazing how some companies can be isn’t it??!!  Check out this letter received today from SpartanNash…talk about the middle finger!

    They had already told buyers not to adjust their POs for products that weren’t available…guess I should have seen this coming…

    And another wrote:

    I know you have published a few letters about retailers that have been working with manufacturers during these crazy times and I thought you might find the attached letter from SpartanNash intriguing.  Not only do they want manufacturers to pay for shortages on freight this letter was sent on 4/9 (Good Friday) but they are also back dating these fines for orders starting on 3/16.

    KC's View:

    Seems to me that companies are going to be separated into two groups - those that were partners, and those that were not.

    And it seems to me that going forward, most companies will be better served by being in the former group.  It is hard enough to deal with actual competition, but when you also are fighting against the entities that you need to be successful, it has to run into a time and energy suck.  Which ends up sucking for everyone.

    Published on: April 14, 2020

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

    •  In the US, there are 587,173 confirmed cases of the Covid-19 coronavirus, 23, 644 deaths and 36,948 confirmed recoveries.

    Globally, we've almost reached two million coronavirus cases - this morning, the toll is 1,936,576 confirmed cases, 120,536 deaths and 458,987 reported recoveries.


    •  The Wall Street Journal this morning quotes from a Morgan Stanley report suggesting that "the path to re-opening the economy will be long. It will require turning on and off various forms of social distancing and will only come to an end when vaccines are available, in the spring of 2021 at the earliest."

    While optimism is a good thing, the report says, caution is prudent.


    •  Two groups of governors, one on the east coast and one on the west coast, announced yesterday that they will begin working regionally and cooperatively to figure out how to effectively lift pandemic-related restrictions in a way that will help their economies while protecting the public health.

    On the east coast, the governors' group includes the chief executives from New York, New Jersey, Connecticut, Massachusetts, Rhode Island, Pennsylvania, and Delaware.

    On the west coast, the governors of California, Oregon and Washington State said they would be working together.

    "Working together" does not mean that all the states will do the same things at the same time, but rather that they will consult with each other to make sure that their efforts are not oppositional.  The different states have different economies, different needs and different realities - New York is very different from Rhode Island, just as California is very different from Oregon - and so their approaches need to be fine tuned to what will work for their industries and citizens.

    The New York Times writes that "several of the governors who spoke Monday made it clear that they did not intend to let businesses in their states reopen until experts and data suggested it would be safe to do so. They noted that their fates were bound by geography.  'The reality is this virus doesn’t care about state borders, and our response shouldn’t either,' Gov. Gina Raimondo of Rhode Island said.

    “'We can put together a system that allows our people to get back to work,' Gov. Ned Lamont of Connecticut said. But he warned against reopening too soon and risking a second wave of infections."

    The Washington Post writes that "governments and companies face a difficult choice in coming weeks: They can either reopen with layers of stifling and expensive hygiene controls, or return to work with fewer controls and accept the risk of second-wave infections. No silver bullet exists against further community spread, yet the global economy cannot sustain a lockdown until a vaccine is developed, which could take a year or longer."


    •  Business Insider reports that "Walmart plans to have more than 20 coronavirus testing sites operating in at least 10 states by the end of April, the company told Business Insider on Monday.

    "The retailer has been working with the federal government to set up drive-thru testing sites in its parking lots. The first two sites opened in the Chicago area on March 22 … The sites are staffed by the US Department of Health and Human Services, as well as Walmart pharmacists who volunteered to support the locations."


    •  The Financial Times reports that Amazon, having hired 100,000 new employees to deal with the sharp increase in business that it has seen during the pandemic, now wants to hire 75,000 more people.

    The FT story notes that this bucks "the trend of mass job cuts in the US economy even as the online retailer's infrastructure shows signs of severe strain. The hiring of additional workers to help meet customer demand and fulfill orders will bring Amazon's workforce to just under 1m worldwide, a more than 20 per cent increase in headcount over the past quarter."

    The Wall Street Journal notes that Amazon isn't alone:  "Companies such as Walmart Inc. and CVS Health Corp. have also announced plans to hire hundreds of thousands of additional workers to keep up with consumer-buying practices in the pandemic, even as a broad economic shutdown has brought layoffs for millions of Americans.

    "Walmart, which is hiring about 5,000 workers a day, has added about 100,000 positions of a previously announced plan to hire 150,000, according to the company.

    Kroger Co., KR 0.87% the nation’s biggest supermarket chain, has hired more than 23,500 workers and plans to bring on an additional 20,000 people over the next several weeks. Instacart Inc. is looking to add 300,000 shoppers for its grocery-delivery service."


    •  The Wall Street Journal reports that Amazon "will begin allowing third-party sellers on its platform to resume shipping so-called nonessential items this week, a signal that the company is ramping up to meet broader consumer needs, according to people familiar with the matter … Sellers of items unrelated to health, wellness and cleaning will be able to send inventory to Amazon later this week, but there are limits on how much they can ship to ensure there is warehouse space for essential goods, people familiar with the matter said."

    In other words, Amazon is looking toward the post-pandemic world…


    •  GMDC/Retail Tomorrow officially announced yesterday that its 2020 General Merchandise Conference, postponed because of the coronavirus pandemic, now will run concurrently with its 2020 Selfcare Summit in Atlanta.  GM20 will take place September 30-October 4, while Selfcare Summit will run October 1-5.

    Meanwhile, the organization said that its Retail Tomorrow immersion originally scheduled for last month in Atlanta, now will take place there from October 20-23.

    The Retail Tomorrow immersion conference scheduled for Chicago, July 14-26, remains in place.


    •  The Specialty Food Association’s Summer Fancy Food Show, scheduled for June 28-30 at the Jacob Javits Center in New York, has been cancelled because of circumstances related to the pandemic, including the fact that the Javits Center has been turned into a field hospital serving Covid-19 patients.


    •  Mayor London Breed of San Francisco has announced that third party delivery companies' must cap their fees at no more than 15 percent of the bill - a restriction that will last as long as coronavirus pandemic restrictions on the opening of restaurants there remain in force.

    The cap applies to services such as Grubhub, DoorDash and Uber Eats.

    Breed said the cap was justified by the fact that "restaurants across San Francisco are struggling to stay open.  In these tough financial circumstances, every dollar counts and can make the difference between a restaurant staying open or shuttering. It can make the difference between staying afloat or needed to lay off staff.”


    •  The Associated Press reports that Massachusetts has opened a coronavirus testing site at the New England Patriots' Gillette Stadium, in Foxboro, and designated it for first responders - including supermarket employees.

    “While the effects of this public health emergency are obviously keenly felt by all of us, some of the greatest challenges associated with meeting it head-on are being met by our men and women in public safety,” said Gov. Charlie Baker. “These professionals are working in high-risk environments to protect our communities, and we felt it was important to continue to expand our capacity to support them.”


    •  From National Review, a story about getting to the end of the tunnel:

    "Walmart’s China branch announced at an investment conference hosted by the Wuhan city government on Wednesday that it was committing 3 billion yuan ($425 million) to expand its presence in the origin point of the coronavirus pandemic over the next five years.

    "According to Walmart China, the company will be putting up at least four new Sam’s Club stores, 15 additional shopping malls, and more community stores in the capital of China’s Hubei province. The U.S.-based retailer already has 34 stores and two distribution centers in the city, where the global coronavirus pandemic first emerged in December."


    •  From Variety:

    "Vince McMahon’s XFL has filed for Chapter 11 bankruptcy, a move that had been expected after the startup football league was forced to cut short its comeback season amid the coronavirus lockdown.

    "In a Delaware bankruptcy court filing, the XFL listed $10 million-$50 million in debts and an equal amount in assets. When the XFL ended its season last month, the league vowed to pay all player salaries for the 2020 season and that it would play 'a full season in 2021 and future years'."


    •  The Boston Globe reports that "colleges and universities in Massachusetts and across the country have begun planning for what was once an unthinkable scenario but now may be a real possibility: a fall semester without students on campus.

    "Boston University, Brown University, the University of Massachusetts system, MIT, and Harvard University are among those discussing potential scenarios for a dramatically different start to the upcoming school year due to the coronavirus pandemic.  University officials say they hope to welcome students back on campus in late August, but much will depend on the public health outlook, the availability of COVID-19 testing, and state rules about large public gatherings. And even if students are allowed to return, international students may be blocked from entering the United States or have trouble getting their visas on time."

    The story notes that this approach by colleges around the country also will create growth inhibitors in markets where schools serve as important economic engines.

    Published on: April 14, 2020

    There is a lovely story in the Boston Globe about Al Davis, store manager at a Market Basket in Nashua, New Hampshire, and his interaction with a 15-year-old employee who, with his mother, decided he could no longer work in the store because of concerns about the coronavirus.

    The lessons are simple.  The storytelling is effective.  And I'm not going to provide any spoilers.  Just read it.  Here.

    Published on: April 14, 2020

    …with brief, occasional, italicized and sometimes gratuitous commentary…

    •  Occasionally, it is nice these days to get a press release that doesn't include the word coronavirus.  Like this one:

    "La Tropicana Market has implemented Local Express, the provider of the most functional e-commerce platform for community-based retailers, to help the company bring all the benefits of online shopping to their customers. La Tropicana Market, based in the northeast Los Angeles neighborhood of Highland Park, serves a diverse and vibrant community,  and sells a finely curated assortment that includes many upscale grocery items, vegan foods and house-made favorites from ethnic items like hummus and tabouli to brownies and cookies … The Local Express e-commerce platform offers a full-service, omni channel (web & mobile) solution for independent retailers. It features a database with more than 1 million grocery items along with multiple options for store pick-up and delivery."

    Yippee.  

    Though, it must be noted (by me) that the ability of small retailers to find e-commerce solutions that help amplify their brand messages and compete with the big boys in the best of times also is something that can help them be relevant during the pandemic.

    So good for them.

    Published on: April 14, 2020

    •  Bloomberg reports that Costco's March sales "soared … but not as much as expected: Curbs the retailer placed on its operations to cope with coronavirus-related demand slowed the pace in the back half of the month.   The retailer’s comparable U.S. sales excluding fuel -- a key metric watched by analysts -- rose 12.1%, it said Wednesday."

    Costco said that food sales during March were up 35 percent, while general merchandise sales declined.


    •  From Columbus Business First:

    "The Clintonville Lucky’s Market is staying Lucky’s Market.

    "Dave’s Market, which has 13 groceries in Northeast Ohio, acquired the Columbus and Cleveland units of the Colorado-founded market chain for $1.25 million late last month.  Despite the new owners, the name is staying the same, the staff is being retained and operations are not changing."

    The story notes that "Lucky’s, which had been in Chapter 11 bankruptcy protection, last month auctioned off six stores, including those two Ohio units. Other stores that had been closed were sold to a variety of purchasers including Publix Super Market, Aldi Inc. and Dollar General, as well as other small chains like Dave’s Market."


    •  CNBC reports that "Nordstrom said its financial situation could become distressed if its stores stay dark for much longer because of COVID-19 … Nordstrom has already taken a number of measures to cut costs and raise additional liquidity, as have many other retailers. It has furloughed the majority of its workforce, suspended its quarterly dividend payment effective in the second quarter of 2020, drawn down $800 million on its revolving credit facility and halted share repurchases.  It has closed all of its bricks-and-mortar stores, with no firm reopening date set."

    In a filing, Nordstrom said that "the longer our stores remain closed to the public, the greater impact it will have on our results of operations and financial condition, and if our physical locations remain closed to customers for an extended period of time our financial situation could become distressed."

    Published on: April 14, 2020

    …with brief, occasional, italicized and sometimes gratuitous commentary…

    •  The National Grocers Association (NGA) announced that Jim Dudlicek, formerly the editorial director at Progressive Grocer magazine, is joining the organization as Director, Communications and External Affairs.


    •  eBay announced yesterday that it has hired new CEO - Jamie Iannone, who most recently served as chief operating officer of Walmart eCommerce.

    Reuters notes that Iannone previously held leadership roles at EBay from 2001 to 2009.


    •  Fast casual chain Mod Pizza has named Josh Guenser - formerly senior vice president, finance, Americas, for Starbucks - as its new CFO.

    Meaning, I think, that Mod Pizza has major growth ambitions … because when you hire people from Starbucks, it means you want to be on almost every corner in America, and beyond.

    Published on: April 14, 2020

    As noted in the SpartanNash story above…

    Yesterday we reported that in a memo to vendors provided to MNB by one of those suppliers, Ahold Delhaize thanked the manufacturers for "continued support" meeting the challenges of the pandemic, and told the companies that it needs their help "in making sure we deliver on our commitments."  But it also told the vendors that "pandemic-related costs will be evaluated. As we continue to evaluate the impacts of this pandemic on our business, we will review ancillary costs we are incurring and revisit with each supplier as needed at a later date."

    The memo was signed by Kevin Holt, CEO of Ahold Delhaize USA, as well as by the presidents of all the company's US banners.

    The vendor who provided this memo to MNB reacted this way:   "This struck me as very cold and goes to your point of some advertisers on TV being tone deaf to what is going on.  In essence, get ready for Ahold Delhaize to billback suppliers for their COVID-19 costs.  I can hear the statement:  'Our store sales were up.  We had to hire more associates.  You benefitted.  Here is your portion of that bill'."

    I commented:

    What this vendor is suggesting to MNB, in essence, is that while Albertsons is offering a nice gesture, Ahold Delhaize can be seen as using another gesture - a middle finger - to suppliers.

    If this is the broad perception, and I can see how it might be, memories will be long.  And maybe some companies will be seen as not learning from the crisis.

    One reader wrote:

    What an atavistic approach to business. Has Ahold not learned anything in the last 20 years? They are demonstrating once again that they are intent at making a profit by shifting as much of their operating expenses onto the backs of their suppliers rather than collaborating for mutual success. This goes beyond being tone deaf. Any major CPG supplier that succumbs to this type of extortion needs new customer management executives. And retail executives like these who wonder why manufacturers explore direct to consumer options need only look in the mirror.

    From another MNB reader:

    I feel bad for Hannaford, a great company where I spent some time last year. This is something I don't think they would ever do, and I believe being tied to Stop & Shop in the Northeast was the worst thing that could have happened to this venerable chain.

    I agree.  This seems completely out of character for a company like Hannaford.

    Another MNB reader wrote:

    The fact that Ahold would communicate this in a broad memo, is their first mistake.  Is Ahold so insignificant that they are not able to have these conversations directly with suppliers?  This community we live and work in is being redefined in real-time.  Publishing a note like this basically communicates the following:

    -Ahold wants any money that isn’t being spent in Trade Funds to be banked for them, as they’ll be coming after it, even if they have to deduct it.  Ahold doesn’t care about any incremental costs suppliers have incurred, they only want their money.

    -Ahold should not be thought of as a strategic partner, but prefers to be seen as a transactional customer.

    This Ahold memo is surely open for interpretation, but it sounds like they missed the mark in a big way.

    From another reader:

    Thank you for publishing this.

    We received the memo as well. What seems to be forgotten by Ahold is that suppliers have incurred significant additional costs to manage the pandemic in all of our facilities as well. Last time I checked, we are not planning on sending a cost increase to cover these expenses along to our retail partners which would ultimately impact the consumer. How does a short sided memo like this make sense when we are not even remotely through this crisis? Let's all continue to focus on maximizing our supply chains to make sure there is food on store shelves for families to purchase when they most need it. 

    Once we get past this and return to "normal" , we can then compare expenses and net out the burden.

    And another:

    Ahold's position with their vendors fails to recognize or acknowledge the Herculean efforts their suppliers have made to maintain service levels with them through this crisis. Key suppliers focus on maintaining service levels has been unprecedented. 

    You mentioned in your talk this morning how the world will change due to this pandemic. Our new world will require a high degree of empathy in business relationships where all of us have a greater understanding and appreciation for the work and challenges from another person or groups perspective. Punitive fees or an unbalanced promotional funding philosophy simply is not sustainable.

    In this respect its a shame that Ahold has their present view in the rear view mirror on how supplier partnerships worked in the past. The future of our new world needs to be about a shared environment in a new risk society and an understanding and appreciation of the steps each partner takes to provide the other with what they both need to sustain and elevate their partnership.

    Another MNB reader chimed in:

    Not a surprise with Ahold Delhaize – that is the European attitude and style of business with suppliers surfacing.

    MNB reader Rob Stuebner wrote:

    Interesting story and I agree with your COMMENT. I am writing this with the perspective of a retired supermarket executive who competed against Ahold two decades ago in two different markets.  They very seldom took a long-term view; and their approach most often seemed to be: what extra can we squeeze out now!  After retiring, I now live in Richmond, VA suburbs where Ahold purchased Ukrops locations resulting in long list of stupid costly actions and reduced market share before selling only some of the locations to Publix.  Even I was surprised at the "good riddance" message in both written and social media when Ahold closed their Martins stores and crawled out of the market, while the FTC let them keep their smaller; service absent Food Lion brand.

    And from yet another reader, a word of advice to vendors:

    Knowing what is coming from Ahold, vendors have the hammer. Move them down the priority list.

    Good point.  You wouldn't think that a company would want to start issuing threats when the supply chain is so fragile.

    Another MNB reader had an argument with my observations, which were put in the context of another story:

    It was interesting to see your comments to this article in juxtaposition to your commentary in a later piece that Ahold was in effect “giving the middle finger” to its suppliers by suggesting it may attempt to recoup costs incurred during the COVID crisis.  If Amazon does, as you suggest, establish a two-tier system under which all Prime customers’ needs are fulfilled before anyone else is served, aren’t they in effect “giving the middle finger” to those who have displayed the audacity (maybe because they couldn’t afford the annual fee?) not to sign up for a Prime membership?

    It would come across to me as a spiteful maneuver, in effect punishing non-members and using fear of future deprivation as a tool to generate new business.  In addition to the questionable ethics of such an approach, this just doesn’t seem like a prudent business model.  Whole Foods already has the perception of being out of reach for the working class shopper, wouldn’t it be more effective for Amazon to use a carrot rather than a stick and use its vaunted ingenuity to reach out to non-prime members by finding a way to service them during a time of crisis?   

    I get your point, but let me ask you a question.  Do you feel that Costco is flipping you the bird when it doesn't allow you to shop its store if you are not a member?

    Because that essentially is what I am suggesting.  I agree that it could alienate a lot of folks … but there is an enormous overlap between people who shop at Whole Foods and people who are Prime members (who spend a lot more money on Amazon than other people).  Isn't this just a way of taking better care of your best customers?

    I get your argument.  Just for the hell of it - because I like a healthy conversation - I'm making the opposite one.


    One more thing.  Yesterday we took note of Walmart CEO Doug McMillon saying that we've gotten to the point in the pandemic where it isn't just toilet paper that is hot - it also is hair dye and clippers, and beard trimmers.

    Prompting me to comment:

    I told my wife and daughter that I wasn't going to trim my beard until they stopped working from home.  (They're teachers doing e-teaching.)  That was when I thought they'd be out of the house by mid-April.  Now it looks like May 20 at the earliest, with the real possibility that it could be the fall.  A which point I will either have gone back on my commitment, or will look like Mandy Patinkin in "Homeland."

    One MNB reader responded:

    The Mandy Patinkin/Saul Berenson beard looks neatly trimmed.  Maybe your beard will have more of a Jan Rubes/Eli Lapp look.

    First of all, extra credit for the Witness reference.  

    You're right.  The look I think I'm going for is more like this:

    Published on: April 14, 2020

    I'm happy to announce that on Friday, between 5:30 and 6:30 pm EDT, we're going to do it again … an MNB Virtual Happy Hour.

    We did one back on March 27, and people seemed to enjoy it, and so, since we're all still grounded for the duration, I thought it was worth another effort.

    The folks at GMDC have once again agreed to sponsor and host it, and I'll have a link and instructions for you later this week.

    Hopefully, you can put it on your calendar … choose a libation for Happy Hour … and then prop up your laptop or warm up your computer on Friday for a conversation and a drink.  (You don't have to let me know you're coming, but it would be nice to know.)

    One other thing - if you are on the west coast and the timing is a little early for you, I'm going to do another one on Friday, May 8, but I'll do it at 5 pm your time just to make it easier.  Of course, everybody is welcome to join either one or both.

    More to come…