business news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: April 20, 2020

    "Conflicting Impulses."  MNB Content Guy Kevin Coupe reflects on how at the same time we endeavor to practice social responsible physical distancing, it seems antithetical to our basic human desire to connect.  It is weird, he says...but maybe we just have to get used to weird for awhile.  (Which sounds about right for a guy who sees Portland, Oregon as a kind of spiritual home.)  But people will always find ways to connect, which was what happened last Friday night when several dozen folks gathered online for an MNB Virtual Happy Hour.  (Pictures below.)

    Lots of great drink selections … mine was the 2015 Roads End Pinot Noir from Carlton Cellars in Oregon's Willamette Valley … owned and run by some of my favorite people, making one of my favorite pinots.  Hard to get if you're not in Oregon, but worth checking out here.

    A good time seemed to be had by all … and there will be another one on Friday, May 8, timed later in the day so that more west coast folks can join in (and enjoy a libation while doing so).

    Stay tuned for details.

    Published on: April 20, 2020

    by Kevin Coupe

    The Atlantic has a terrific story about the impact of the pandemic on consumers and the supermarkets they patronize.  An excerpt:

    "For years, the cumbersome grocery business has seemed a relic ripe for a Silicon Valley 'disruption' - one that might erase and utterly remake supermarkets as we know them. In a way, the pandemic is that moment. When this all ends, it will have changed supermarkets forever. People will shop differently. Grocery workers’ jobs will shift. Stores will take on new shapes and sizes. But those changes won’t spell the end of supermarkets. Instead, they’re likely to tighten supermarkets’ grip on American life."

    The story goes on:

    "Just as a new appetite for one-stop, self-service shopping led to supermarkets after the First World War, the pandemic could inaugurate a seismic shift in grocery shoppers’ habits. Right now, consumers are not dining out, because of lockdowns, but they still have to eat. Restaurant delivery is growing, but online grocery shopping - both delivery and pickup - is cheaper, reduces the number of trips that food workers have to make, and keeps shoppers out of stores, where personnel are at serious risk of infection."

    You can read the entire analysis here.

    The Atlantic (which, by the way, has been doing great work covering the various components of the pandemic) suggests a number of likely developments in the grocery business, one of which seems almost inevitable to me - that the bigger are going to get even bigger and more powerful - because the likes of Walmart, Costco, Kroger and Amazon have, despite glitches, been largely better able to adapt to the crisis because they have more resources, they are going to emerge in a post-pandemic world as even more dominant.

    This isn't to say that smaller companies and independents will become obsolete.  There are plenty, I think, that have done an excellent job taking care of their shoppers.  (I'd bet that food co-ops largely have kept their customer bases, for example.)  But it will be the exceptional ones that maintain their differential advantages, because they will continue to work those advantages, never becoming complacent.

    The Atlantic notes that "the shift to smaller-scale, more attentive grocery service has already taken place, in part," and will continue … though I suspect that if the economy recovers more slowly than some are predicting, even some of those retailers will have to shift their focus a bit.

    I do think that these changes will play out differently for different retailers and demographics - shoppers who go to Walmart and WinCo will want and need something different from those who shop at Dorothy Lane Market and Zupan's, in part because they may live in different financial circumstances but perhaps even more importantly because they have different priorities and a different relationship with the food they eat.   And that's okay … even in an economic downturn, there is room for a lot of players.

    Not all players, though - the middle-of-the-road, undifferentiated stores will be more at risk in the future than they were six months ago, and they were skating on thin ice then.

    One big piece that The Atlantic  didn't explore was the role of auto-replenishment in grocery's future.  Services like Amazon's Subscribe & Save will, I think, be even more prevalent and relevant in the future, especially because they will bring commodities and frequently bought items right to the home, reducing the number of times people have to go the the store to the times when it actually matters.

    How this plays out in the future will be a real Eye-Opener.

    Published on: April 20, 2020

    CNN reports that even as dozens of supermarket employees around the country have died from the Covid-19 coronavirus, "supermarkets have resisted the most draconian policy: banning customers from coming inside."  But now, "some worker experts, union leaders and small grocery owners believe it has become too dangerous to let customers browse aisles, coming into close range with workers. Grocery stores are still flooded with customers, and experts say it's time for large chains to go 'dark' to the public and convert to curbside pickup and home delivery for food and other essential goods."

    The story notes that "public safety officials are not requiring essential stores to shut down to customers, but the US Labor Department last week recommended that retailers start 'using a drive-through window or offering curbside pick-up' to protect workers for exposure to coronavirus.  The California Department of Industrial Relations said this week that companies should 'encourage customer use of online order and pickup'."

    CNN goes on:

    "Companies are making their own safety rules as the federal government stands aside

    Some big grocers are slowly starting to move in this direction. Whole Foods has closed down a store in New York City's Bryant Park area and transitioned it into an online-only store, focused solely on deliveries. Kroger and Giant Eagle have switched a few stores to pickup and delivery-only locations.

    "But these are a fraction of stores in their wide networks. And most large chains have hesitated to shut down to the public. Instead, they are implementing more limited policies like taking workers' temperatures and restricting the number customers inside stores at a time. Companies are calling on families to cut back on their trips to the store and shop alone if they can.

    "City and state governments are stepping in to force stricter safety measures than the companies have adopted. Los Angeles, Miami, Washington DC, New Jersey, Maryland and New York have ordered shoppers to wear masks or face coverings in stores. Vermont has required big box chains like Walmart to close down their 'non-essential' sections like furniture, home and garden equipment and arts and crafts."

    KC's View:

    There would be problems associated with such a major shift in policy.  For one thing, it would cost retailers a lot more to have enough employees to do all the shopping for their customers.  It would probably mean charging some sort of fee for the service, or marking up merchandise costs to compensate.  That wouldn't be good for low-income shoppers, who would be disadvantaged by higher prices and fees.  And, it wouldn't be a perfect solution - employees and customers would still interact to some degree.

    But … if stores adopted a Subscribe & Save-style replenishment model - helping customers easily obtain, either via pickup or delivery, regularly purchased items (especially CPGs) on a subscription basis - it might help alleviate some of the stresses and actually turn this into an opportunity and selling point.

    There's also another problem.  Some elected officials and business leaders are pushing for the economy to be opened up, at least in some areas of the country, and there is something discordant about beaches and theme parks being opened in some sections of the country and supermarkets being closed in others.  As has been pointed out by a number of health experts, the virus doesn't understand or respect borders or rules, and so these two approaches could end up working against each other.

    That said … one of the things I noticed at Stew Leonard's this weekend was the number of people who were not respecting physical distancing, who pushed through and ignored six-feet-apart recommendations and even got impatient with those of us trying to be respectful.   (And Stew's has been about as transparent and emphatic as possible about explaining how to shop safely.)  And I've noticed the same thing at Whole Foods, where some people just ignore the highly visible signs about one-way aisles.  (They mostly seem to be Fairfield County, Connecticut, women who drive Range Rovers, don't wear face masks, and have hair that seems suspiciously coiffed at a time when the salons are all closed.  But I may be painting with a broad and cynical brush here.)

    Turning supermarkets into dark stores would be a radical move.  But as the story points out, it is a move that already is taking place to some degree.  Companies like Sedano's in Florida were doing it before the pandemic, and companies like Kroger, Giant Eagle and Whole Foods have done it since it erupted.  No reason to think that, one way or another, the trend won't continue even in a post-pandemic world.

    Published on: April 20, 2020

    From The Atlantic:

    "How many people have the coronavirus in the United States? More than two months into the country’s outbreak, this remains the most important question for its people, schools, hospitals, and businesses. It is also still among the hardest to answer. At least 630,000 people nationwide now have test-confirmed cases of COVID-19, according to The Atlantic’s COVID Tracking Project, a state-by-state tally conducted by more than 100 volunteers and experts. But an overwhelming body of evidence shows that this is an undercount."

    The story points out that "there is clearly some group of Americans who have the coronavirus but who don’t show up in official figures," such as homeless people and people who die at home but are not reported as victims of the pandemic.  "Now, using a statistic that has just become reliable, we can estimate the size of that group - and peek at the rest of the iceberg."

    Here's where it gets a little scary:  "According to the Tracking Project’s figures, nearly one in five people who get tested for the coronavirus in the United States is found to have it. In other words, the country has what is called a “test-positivity rate” of nearly 20 percent.

    "That is 'very high,' Jason Andrews, an infectious-disease professor at Stanford, told us. Such a high test-positivity rate almost certainly means that the U.S. is not testing everyone who has been infected with the pathogen, because it implies that doctors are testing only people with a very high probability of having the infection. People with milder symptoms, to say nothing of those with none at all, are going undercounted."

    The Atlantic piece is sober-minded and nuanced, and worth reading here.

    KC's View:

    The Atlantic points out that "the positivity rate is not the same as the proportion of COVID-19 cases in the American population at large, a metric called 'prevalence' … Prevalence is a crucial number for epidemiologists, in part because it lets them calculate a pathogen’s true infection-fatality rate: the number of people who die after becoming infected."  But test-positivity remains a way of tracking how contagious a disease is, which can inform how governments, businesses, health care systems and even individuals decide to react to it.

    The one thing that seems clear to me is that we don't really know how many people have it, and I am leery of reopening efforts that get ahead of this number.  Not because I like being sheltered at home - like most people, I am anxious to get back that part of my life that has been subsumed by the pandemic - but because I hate the idea that things could get reopened only to get closed down again, which would be an enormous blow to … yes, governments, businesses, health care systems and individuals.

    Published on: April 20, 2020

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

    •  In the United States, as of this morning there are 764,265 confirmed cases of the Covid-19 coronavirus, with 40,565 deaths and 71,012 reported recoveries.

    Globally, there are 2,418,429 confirmed coronavirus cases, 165,739 deaths and 632,895 reported recoveries.

    •  From the New York Times:

    "As some governors consider easing social distancing restrictions, new estimates by researchers at Harvard University suggest that the United States cannot safely reopen unless it conducts more than three times the number of coronavirus tests it is currently administering over the next month.

    Average Daily Coronavirus Tests in the U.S.

    "An average of 146,000 people per day have been tested for the coronavirus nationally so far this month, according to the COVID Tracking Project, which on Friday reported 3.6 million total tests across the country. To reopen the United States by mid-May, the number of daily tests performed between now and then should be 500,000 to 700,000, according to the Harvard estimates.

    "That level of testing is necessary to identify the majority of people who are infected and isolate them from people who are healthy, according to the researchers.

    •  The California Grocers Association (CGA) noted over the weekend that its president/CEO, Ron Fong, has been appointed by Gov. Gavin Newsom "to serve on his bi-partisan Task Force on Business and Jobs Recovery, responsible with helping plan the state’s economic recovery following the financial calamity resulting from COVID-19."

    The 80-member task force is co-chaired by former U.S. presidential candidate and billionaire philanthropist Tom Steyer and Gov. Newsom’s Chief of Staff Ann O’Leary, and includes representatives from business, labor, environment, social justice, state legislature and four former California governors.

    Good move to have someone from the food retail business - which has been fighting way above its weight class for the past few months - at the table as decisions are being made and recommendations are being formulated.  California was way ahead of the game in terms of dealing with the pandemic and keeping its numbers down, and I would expect that it will be way ahead of the game when it comes to rebuilding the state's economy and dealing with its repercussions in a  way that is nuanced, effective and, hopefully, with an eye on constructing a future rather than just recapturing the past.

    •  From the Washington Post:

    "Texas Gov. Greg Abbott is encouraging retailers to start operating next Friday as 'retail to go,' in which customers would order ahead of time and pick up items curbside. State parks will reopen Monday, but visitors will be required to wear face coverings, he said. Restrictions on non-coronavirus-related surgeries and procedures will also be loosened."

    •  Axios reports that "Detroit Mayor Mike Duggan announced yesterday that the city will start making diagnostic tests available to all employees of 'essential' businesses, and to city employees performing essential services.  It’s the first program of its kind, and a model for other cities to follow. And it’s a reminder that testing remains the limiting factor in every facet of our response to the coronavirus…"

    •  The Wall Street Journal reports that Amazon is actually cutting back on its usual policy of suggestive selling, in which it basically tells people that if you like this one thing that you bought, you might like this other stuff.

    Now, it actually wants to sell fewer products, since it "is struggling to meet an immense surge in order volumes and contend with worker absences during the coronavirus pandemic."  And so, it is disabling algorithms, coupons and widgets that are designed to sell more stuff.

    As part of this approach, the Journal writes, Amazon has decided to cancel Mother's Day and Father's Day promotions, and is postponing its annual Prime Day promotion to a date still to be determined.

    •  Vox reports that Amazon "is using thermal cameras in warehouses to screen workers for fevers, in hopes of preventing the spread of coronavirus at its facilities in the United States," and that the cameras “in effect measure how much heat people emit relative to their surroundings” and “require less time and contact than forehead thermometers, earlier adopted by Amazon.”

    Forehead thermometers will remain a secondary tool used to check on employees flagged by the thermal cameras.

    •  The Wall Street Journal writes that "Walmart is being tested like never before by a coronavirus pandemic that has shut down much of the nation, put 10% of its workforce on leave and led to at least 18 deaths at the company. Managing the health of workers and shoppers, reassuring local officials, and keeping stores and warehouses staffed have become a massive effort inside Walmart at a time when customers are relying more than ever on the nation’s largest retailer … Walmart executives have debated various issues, such as whether to give masks and gloves to workers, when to close and clean stores, how to control shoppers who get too close to workers and each other, and even whether to disable the theft-detection systems connected to self-checkout machines, according to people familiar with the discussions."

    Starting this week, the story points out, Walmart is requiring "all workers to wear masks … in line with a new wave of local laws and in anticipation of new standards as businesses open up as the virus wanes."

    •  Reuters reports that Walmart plans to "hire 50,000 more workers at its stores, clubs and distribution centers to meet a surge in demand for groceries and household essentials from consumers stockpiling during the coronavirus outbreak … The retailer said it had reached its earlier target of hiring 150,000 workers six weeks ahead of schedule, taking in 5,000 people per day on average at a time when millions of Americans are losing their jobs amid unprecedented 'stay-at-home' orders from state and local governments."

    •  From USA Today:

    "As cases of COVID-19 spike in Black Hawk County, Iowa, the local sheriff is blasting Tyson Foods, and local officials are calling for the company to shut down its plant in Waterloo, raising concerns for the community's safety and the continuity of the nation’s meat supply.

    "Black Hawk County Sheriff Tony Thompson said he’s concerned that COVID-19 will overrun his community if the Tyson Foods plant doesn’t take proper precautions, including temporarily shutting it down."

    Iowa "released figures Friday that showed 138 people had tested positive for the virus and one person has died with the virus in Black Hawk County. Amid more testing, the number of positive cases has nearly doubled in the county this week, according to state figures … Gov. Kim Reynolds acknowledged a potential outbreak at the Waterloo meatpacking plant earlier this week and has sent increased testing materials to both Waterloo and Columbus Junction, where a Tyson plant closed as the virus spread among its workers."

    •  The New York Times has a story about what happens when any of the nation's major slaughterhouses are shut down by the coronavirus pandemic, writing that "after decades of consolidation, there are about 800 federally inspected slaughterhouses in the United States, processing billions of pounds of meat for food stores each year. But a relatively small number of them account for the vast majority of production. In the cattle industry, a little more than 50 plants are responsible for as much as 98 percent of slaughtering and processing in the United States, according to Cassandra Fish, a beef analyst.

    "Shutting down one plant, even for a few weeks, is like closing an airport hub. It backs up hog and beef production across the country, crushes prices paid to farmers and eventually leads to months of meat shortages."

    The story notes that "more than a dozen beef, pork and chicken processing plants have closed or are running at greatly reduced speeds because of the pandemic. This past week, the number of cattle slaughtered dropped nearly 22 percent from the same period a year ago, while hog slaughter was down 6 percent, according to the Department of Agriculture. The decline is partly driven by the shutdown of restaurants and hotels, but plant closings have also caused a major disruption, leaving many ranchers with nowhere to send their animals … Large numbers of employees have become infected in other businesses where people work close together, like grocery stores and e-commerce warehouses. But the pandemic has caused more serious disruption in the meat industry, where decades of consolidation have given outsize importance to a relatively small number of plants."

    This is just another reflection of the tensions that are emerging because of the pandemic, or are being exacerbated by it - businesses of all kinds facing closure because of it, and then facing pressure to open because it will help get the economy back on track, but with concerns remaining that the real problems are not being addressed, and then accompanying concerns that if we handle this wrong, the worst could be ahead of us, not behind us.  Tough moments of decision.

    And yet, the thing in this story that sticks with me is that there is a meat analyst named Cassandra Fish.  Which is just so great.

    •  CNN reports that "Illinois Gov. J.B. Pritzker announced Friday he will not reopen schools for in-person instruction because of the coronavirus, ensuring the unprecedented disruption to the education of the state’s 2.2 million students will continue through the end of the academic year.

    "The governor announced the decision at his daily afternoon press conference, joining 27 states and three U.S. territories that have either ordered or recommended the same action, decisions that have impacted more than 25 million students."

    •  From the Financial Times:

    "Walt Disney will stop paying more than 100,000 employees this week, nearly half of its workforce, as the world' s biggest entertainment company tries to weather the coronavirus lockdown.

    "Suspending pay for thousands of so-called cast members will save Disney up to $500m a month across its theme parks and hotels, which have been shut in Europe and the US for almost five weeks. But slashing fixed costs in a more severe way than other theme-park owners such as NBCUniversal and Warner Media has raised significant reputational risks for the century-old empire behind Mickey Mouse.

    "The decision leaves Disney staff reliant on state benefits - public support that could run to hundreds of millions of dollars over coming months - even as the company protects executive bonus schemes and a $1.5 bn dividend payment due in July."

    Wait a minute.  Taxpayers are going to help keep Disney - the largest and most successful entertainment conglomerate on the planet, owner of both the Marvel and Star Wars universes - afloat?  Really?

    •  From the Los Angeles Times:

    "The burger chain Shake Shack says it has obtained new funding and will return a small-business loan it got to help weather the coronavirus crisis.

    "Shake Shack has laid off or furloughed hundreds of its employees and needed the assistance, its CEO Randy Garutti and its founder Danny Meyer said in a statement seen Monday.

    "But the company was able to get extra funding late last week through an 'equity transaction' and decided to 'immediately return' the $10 million paycheck protection loan it obtained through the CARES Act."

    •  The Washington Post reports that Twitter was awash in #FloridaMorons references over the weekend, as "Gov. Ron DeSantis gave the go-ahead for local beachfront governments to decide whether to reopen their beaches," and both Duval and St. Johns counties decided to do so - leading to droves of people showing up to swim, sunbathe and walk, often without observing the social distancing that has become the accepted norm during the pandemic.

    It was sort of amusing to read comments by elected officials saying that people going to the beaches were respecting limitations and guidelines recommended by health experts, even as the pictures and videos showed that a lot of folks there were either ignorant or disbelieving of the recommendations.   I suspect that when it is all sorted out, it won't be quite as bad as the pictures suggested … but the question of whether it was smart to open the beaches at this point will remain open.

    But it only is sort of amusing.  It will be considerably less so if Florida sees a new outbreak of Covid-19.

    •  Elsewhere in Florida - in Ocala, in the central part of the state, about 80 miles northwest of Orlando - there is evidence of an old business model finding new relevance.

    A drive-in theater.

    News4Jax reports that "even as movie theaters across the country shut down to help slow the spread of COVID-19," the small Ocala Drive-In theater continues "to show new films and classics to moviegoers desperate for a night out."

    The story notes that "only 14 movie theaters were open in the U.S. last week, according to Deadline, and 13 were drive-in theaters. According to research done by writer Ernie Smith, the Ocala drive-in made up the entire revenue of the top-grossing film of last weekend, Swallow, which brought in $1,710."

    “Anybody that knows me and knows the drive-in knows I don’t close,” says owner John Watzke.  “I’ve had hurricanes come, I’ve stayed open until the power went off and I had no one in the parking lot … The old cliché ‘the show must go on’ is not a cliché in my family: It’s a way of life."

    •  The Boston Globe reports on that city's mask vigilantes, who are pulling few punches in their efforts to make sure that everyone is living up to what they see as a critical social compact.

    An excerpt:

    "Never mind that the Centers for Disease Control and Prevention recommends that people wear cloth masks in public settings where social distancing is hard to maintain, that Massachusetts and some cities and towns are urging or ordering residents to cover their faces, and that a new study suggests that simply speaking could transmit the COVID-19 virus.

    "Some people still consider the whole germ-transmission thing a hoax. Or they don’t think they’ll get infected, or don’t like having their glasses fog, or their Amazon order hasn’t yet arrived, and they can’t sew, or, apparently, tie a bandana. Or, the rules are so confusing about what you’re supposed to wear where that they actually think they’re doing the right thing and that it’s the mask scolds who are in the wrong.

    "Or, whatever.

    "Mask tension is turning intense, as believers try to enforce a social contract that some others want no part of."

    In all seriousness, I think before long we'll be seeing news stories about fights breaking out, weapons being brandished, and people being arrested … all because of mask etiquette.  The world just feels like that at the moment.  (I'm trying not to be a vigilante about it, but I must admit that I find the people who don't wear masks to be selfish … wearing one helps to prevent people from infecting others.  I figure it is the least I can do as a citizen of the planet.)

    I just hope we don't get to the point of mass hysteria…

    Published on: April 20, 2020

    New York Times science writer Donald G. McNeil Jr. has yet another great piece about the Covid-19 coronavirus pandemic, reporting on what we may be facing in the coming year.

    An excerpt:

    "In truth, it is not clear to anyone where this crisis is leading us. More than 20 experts in public health, medicine, epidemiology and history shared their thoughts on the future during in-depth interviews. When can we emerge from our homes? How long, realistically, before we have a treatment or vaccine? How will we keep the virus at bay?

    "Exactly how the pandemic will end depends in part on medical advances still to come. It will also depend on how individual Americans behave in the interim. If we scrupulously protect ourselves and our loved ones, more of us will live. If we underestimate the virus, it will find us."

    It is a great piece.  Read it here.

    Published on: April 20, 2020

    Excellent piece in the Wall Street Journal - co-authored by Scott Gottlieb, former commissioner of the Food and Drug Administration (FDA) and Stephen Ostroff, former FDA deputy commissioner and deputy director of the National Center for Infectious Diseases at the Centers for Disease Control and Prevention - about how to keep people safe in the workplace, especially as the economy begins to reopen.

    "The virus will have fresh opportunities to spread as workers return to the job," they write.  "But businesses can take steps to minimize risk and make the country safer. Employers need to start crafting plans for safe, healthy and productive work environments in an age of Covid risk."

    You can read the piece here.

    Published on: April 20, 2020

    •  Reuters reports that the UK's Competition and Markets Authority (CMA) has provisionally approved Amazon's $575 million purchase of a minority stake in food delivery company Deliveroo, which competes with the likes of Uber Eats.

    Originally there were objections to the purchase on the grounds that it would give Amazon too much market power and would stifle competition, but Reuters notes that "the CMA said on Friday it had become clear that the health emergency was having a significant negative impact on Deliveroo's revenues, given the closure of a large number of the restaurants available through its platform during the lockdown."

    An Amazon investment, in other words, would give Deliveroo a lifeline it may need in order to stay viable through the pandemic crisis.

    Reuters  reports, meanwhile, that Amazon is planning a launch of something it is calling Ultra Fast Fresh in the UK, which would essentially replicate what it has been offering in the US for some time.

    The goal is to take advantage of Ocado's problems in the UK, as it struggles "to open additional grocery delivery slots for consumers due to unprecedented demand caused by COVID-19 related lockdowns."

    Amazon has offered grocery delivery for a fee, paid either per-order or on a monthly basis.  The change would basically make it part of Amazon Prime, and "is aimed at bringing rapid grocery delivery to almost 40% of UK households by the end of the year."  The move will require Amazon to retrofit "nine existing depots within the country to handle fresh produce and fulfill grocery orders within hours."

    Published on: April 20, 2020

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

    •  MarketWatch reports that "Nordstrom Inc. can withstand a year of store closures, according to Cowen analysts, who think other department-store retailers, including Macy’s Inc., have far less time should stores remain shuttered … Updating its previous forecast, Cowen analysts said Macy’s has about four months, Kohl’s Corp. has six months and J.C. Penney Co. Inc. about seven months."

    Part of the problem that these department stores face is that they need working capital to buy product to sell later this year, and that access to capital is severely constricted by the pandemic.  Which leaves them facing the possibility that even if things do turn around, they won't have enough merchandise to capitalize on it … if indeed they are able to make it to the end of the year.

    The story notes that "Nordstrom announced last week that it would offer $600 million in 8.75% senior secured notes that mature in 2025, bolstering the company’s coffers."

    The question for company's like JC Penney and Macy's is how long they would have had to survive if there had not been a pandemic.  I think it is fair to suggest that while the pandemic certainly has been devastating and a shock to the economic system, it also has spotlighted and accelerated the problems that a lot of companies already had.

    •  Reuters reports that "Neiman Marcus Group is preparing to seek bankruptcy protection as soon as this week, becoming the first major U.S. department store operator to succumb to the economic fallout from the coronavirus outbreak, people familiar with the matter said."

    The company is said to have been left "with few options after the pandemic forced it to temporarily shut all 43 of its Neiman Marcus locations, roughly two dozen Last Call stores and its two Bergdorf Goodman stores in New York.

    "Neiman Marcus is in the final stages of negotiating a loan with its creditors totaling hundreds of millions of dollars, which would sustain some of its operations during bankruptcy proceedings, according to the sources. It has also furloughed many of its roughly 14,000 employees."

    Same comment as above.  Neiman Marcus's problems may be heightened, but they also are foundational … it simply may not be the definition of a 21st century retailer.

    •  Land O’Lakes has announced that it is changing its packaging so that it no longer feature the picture of a Native American woman with a feather in her hair, and will phase in a new design "ahead of its 100th anniversary," the New York Times writes.  "Instead of the depiction of the woman, some products will be labeled 'Farmer-Owned' and feature an illustration of a field and lake, or photographs of its farmers, the company announced."

    The new design. which will be fully rolled out by the end of the year, was applauded by the Native American community, where activists called it an "antiquated symbol" not reflective of their culture.

    CEO Beth Ford said in a statement that it recognized the need for “packaging that reflects the foundation and heart of our company culture.”

    There will be some who decry this as politically correct pandering.  But it sounds to me like Land O' Lakes just wants its brand imagery to keep in synch with its reality … which makes a lot of sense.  And if that disposes of outdated images that some find offensive, that's a bonus.

    Published on: April 20, 2020

    Last week I was critical of an email that Clarion Events, which runs the National Grocers Association (NGA) annual show, sent out to previous attendees selling booth space for the 2021 event in Las Vegas … which struck me as tone-deaf at a time when businesses are stressed, a lot of people are sick or dying, and nobody has any idea what 2021 will look like.

    Not surprisingly, this prompted a response from Laura S. Strange, NGA's Senior Vice President, Communications and External Affairs:

    I read the Eye Opener in Friday’s blog post, and while I appreciate your perspective and certainly agree that these are uncertain and challenging times for everyone, most especially for our members who are on the frontlines, I must share that we were taken back by the tone. We have been in contact with our members on a daily basis, offering support and resources, along with advocating on their behalf in Washington, DC.  Additionally, the Clarion Events team has worked with us to make vital connections between suppliers from the 2020 Show and independents and wholesalers in need of specific services or equipment.  We understand these are times where it’s not business as usual, and therein lies the offer to extend discounted rates to vendors who are already signing up for the Show – a far cry from the characterization of “hitting people up for cash” – in addition to the Clarion Red Cross donation.  A 5% donation of a booth or sponsorship to the Red Cross could range anywhere from a $200 - $5,000 donation – per exhibitor or sponsor. There were nearly 400 exhibitors at the 2020 NGA Show. Doing the math, that could add up to a sizable donation for the Red Cross, an organization that relies on voluntary public contributions to carry out its programs and services, especially during a crisis like this. 

    Yes, this is a time of uncertainty, but as our government and country look to safely and responsibly reopen our economy, we also have a responsibility to prepare for the future and plan a path towards the new normal, together.  While I understand your intent may not have been to “attack” either organization, unfortunately the small snippets taken from the email and used in the post lead to a narrative that we feel was not an accurate depiction.

    Fair enough, though I'd argue that I represented the email accurately.  (I did mention the Red Cross donation.)  But we're all entitled to our opinions.

    A friend of mine pointed out that generating some revenue could be a matter of survival for Clarion - the events business is a treacherous place to be these days.  Also a fair point.

    However, I would also point out that I was not the only person to have this reaction to the email.  In fact, it was forwarded to me by several people before I even saw it in my email box.

    MNB had several stories last week detailing treatment of vendors by two companies - Ahold Delhaize and SpartanNash - that suppliers found to be tone-deaf, insulting, and, in the end, bad business.  By the end of the week, though, both companies seemed to be backing off to varying degrees, making nice with those vendors via emails.

    The story about the backtracking on Friday generated almost as much email as the original stories about the mistreatment.

    It apparently isn't just Ahold Delhaize and SpartanNash, as one MNB reader wrote:

    Wanted to pass along this letter we got from our “friends” at C&S yesterday to go along with those that were received from Ahold and SpartanNash which you mentioned in the newsletter. Yet another company that has decided that the pandemic is completely the responsibility of the vendors and we’re apparently sitting on a huge pile of cash to pay for all of their efforts to protect their employees. Don’t get me wrong, they should protect their employees just like all companies should. It’s just that companies like mine can’t just deduct the cost of those efforts somewhere up the value chain. Really amazing that companies like this continue to do whatever they can to alienate their “partners”. 

    Another MNB reader wrote:

    I am an Ahold produce vendor and received the same letter recently. Two years ago they implemented a program in which there are 29 ways they can fine a vendor $400 for the orders they bring in (I have attached the list). One of the criteria is #20 – shorted product. So when the COVID-19 outbreak caused huge spikes in demand vendors that shorted product will get a $400 fine deducted upfront when they get paid. So in addition to this they want to take more money after the fact to pay for their expenses incurred to sell more product. This just doesn’t make sense and it is downright abusive.

    The vendor fine program was created and administered through Retail Business Services which is a separate entity than the Ahold banners and they write the checks. So when you get hit with these deductions you get no proof of the violation and can’t argue it with your buyer because RBS administered it. Regarding shorted product you can be short 2 cases of $12 product and get a $400 fine. Another example: You can have  a substandard pallet and instead of allowing us to pay a lumper $20-$30 to re-stack the pallet we get fined $400. Some of the banners in Ahold/Delhaize only fine for a handful of things for produce however Stop & Shop takes full advantage of this vendor fleecing. I am the owner of the business and seriously considering letting the S&S business go. It simply isn’t worth it and I hope more owners are willing to do the same.

    One more MNB reader wrote:

    Doesn't sound to me like Ahold is backing off at all, and if I was a vendor I'd tell them where to put their $5 off $20 purchase coupon!

    And, from another MNB reader:

    Seems to me that whatever amount of time and energy expended in contemplating, deciding and writing these letters to the vendor community was wasted.  As you’ve pointed out in several articles and commentary, this is a time for all businesses to focus on two things: doing what they can short term to adapt and hopefully survive this situation and observing and documenting “lessons learned” to simultaneously innovate and differentiate for the future.

    The accelerator has been pushed on the food industry as a whole and similar to what’s happened on how we consume entertainment there is a very clear line of sight to increased competition for share of stomach.  Think about restaurants who are now getting into the groceries business, farmers who, once reliant on the restaurant trade, are going direct-to-eater and the foodservice companies/distributors who are starting to open their doors to shoppers.

    When this starts to migrate back to the “new normal" I firmly believe that businesses will need to diversifying your portfolio to hedge downturns in the market, finding new revenue streams to augment your traditional business will be a way to create a buffer from future circumstances beyond any of our control.  Restaurants, by way of example, will not be able to operate in the traditional manner if they’re restricted to 50% capacity due to municipal/state orders.

    I said last week that I had no idea if the stories on MNB had any role in getting the two companies to change their tunes a bit, but that I was glad they had.

    Which prompted one MNB reader to write:

    You absolutely played a role in both of these companies backing off.  Isn’t it fun to know that your voice, and others, can be heard.

    Now…I think it’s time to take on Trump.  I want to see him respond to something you say in one of his tweets.  What could we possibly agree to poke him with?  Ahhh, the list is so long.

    I hope he has better stuff to do than pay attention to me.

    We've had some stories about how Amazon has been disappointing some customers, as even it has been stressed by demand created by the pandemic.

    One MNB reader wrote:

    I have appreciated your viewpoint and perspective since I started reading MNB four years ago, and never more so than during these past 8 weeks.  You provide loads of information & insight that I’ve incorporated into my thinking and my work, often with the added bonus of making me wish I had thought of it and adding a smile to the whole mix.

    So, I did wonder when you wrote, “…without being an Amazon apologist…” what you expected folks to think because I feel that what needs to be added to that is, well, then don’t be an Amazon apologist ….  Hold them to the same expectations your hold for all retailers & companies you write about.  I think it would not be too difficult to find a comment you’ve made in the last 4 weeks where you weren’t cutting a company/person/organization any slack over missing expectations that could be argued were not realistic in this pandemic… 

    Needless to say, at our house, we are still waiting for an Amazon Fresh delivery window to open for an order we started on April 10th – needless to say, half of the items are now out-of-stock.  You can say all you want about unrealistic expectations – but when you need food, you need food, not in 5, 6 or 7 days – so if it seems unfair to Jeff Bezos and company, I’d guess I’d say that’s too bad.  Maybe he could generate some good will by donating any new net worth he’s gained while 29K have died and another 22 million filed for unemployment.  But I’m sure he’s putting all that wealth towards other good uses…

    From another reader:

    Unreasonable to expect Amazon or any other company supplying services to meet the spikes created by pandemic in their "usual" manner.  "Tiresome attitude" on the part of complainers, to put it as politely as possible. 

    And another email, from MNB reader Betsy McGinn:

    While also not being an Amazon apologist, Amazon was actually a bit ahead of the curve on this. They stopped employee travel weeks before most companies, they responded swiftly by shutting down non-essentials to focus on what people really need (rather than allowing a seller to send in more wind chimes or crop tops) to optimally use their warehouse space and other resources. And I can't think of another company that could swiftly hire 175,000 employees to try to serve their customers. Even with nonessential products showing long delivery windows on the site, I have seen many instances of those products arriving within a few days. As far as grocery delivery, I think we are all seeing grocery stores struggle with in-stocks as our supply chain is not particularly adaptable to the increased demand caused by dollar shifts from food service to retail grocery. That said, I believe Amazon should have responded to the grocery delivery glitches much faster by prioritizing existing/Prime customers.

    Regarding Amazon's decision to create waitlists of people who want to buy groceries on its site but have not done so before, essentially giving priority to existing and best customers, one MNB reader wrote:

    Waitlists are only as good as your ability to scale up capacity, and currently this is a huge challenge. Supermarkets are capped on max a few hundred online orders a day unless they're a well-designed dark store (not many of those out there). We have ~ 50K viable stores. Assuming an aggressive average 150 orders a day per store, that's roughly 7.5M people households served a day, out of a total of 128M households in the US. We're in trouble unless we can scale up capacity rapidly as an industry, while actually making orders profitable. 

    Responding to our story about what may be the inevitable demise of a number of department store chains, one MNB reader wrote:

    Completely agree -  JC Penney, Kmart, Sears, …  Just make it stop.  Get the inevitable over with already and let’s move on. Nostalgia is the only thing keeping these businesses alive.

    But another wrote:

    I love JC Penney. The store near me closed several years ago, but I still drive 15 miles to another one.

    You're the one?  Wow.

    And finally, this cheerful note from an MNB reader:

    The American people have no clue damage to our way of life this has caused.  This is a generational sized event that will take years to dig out of. It will require the ingenuity, hard work and stick togetherness of every American to recover(not to mention copious amounts of Titos).  Prayers to our leaders that they find a way to work together. 

    I'm with you on the Tito's.