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    Published on: June 5, 2020

    This morning, KC wants to recommend a book:  "A Kids Book About Racism," by Jelani Memory, which he found to be a powerful, eloquent and elegant way to talk to children (and adults) about a subject on everyone's mind these days.  You can get the book, or you can watch the YouTube video below in which Jelani Memory reads his book.   Powerful lessons, either way, and a great way to begin an important conversation with your kids or grandkids.

    Published on: June 5, 2020

    From the New York Times this morning:

    "Unemployment fell to 13.3 percent in May, with a gain of 2.5 million jobs.

    "The unemployment rate fell to 13.3 percent in May, the Labor Department said Friday, an unexpected improvement in the nation’s job market.

    "The unemployment rate fell from 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II.

    "Many economists expect that unemployment will begin to ease as states reopen and businesses call employees back to work. But it will take far longer for the economy to climb out of the hole than it did to fall into it."

    KC's View:

    Those gasps you hear are from all the economists who were expecting something far different, and now are struggling to explain the decline in the unemployment rate, especially in view of other data.

    Maybe they should've been more optimistic about the immediate impact of all that stimulus money.

    Maybe we've hit the low point and are bouncing back … but that may depend on whether we have a second wave of disease, and whether there is a corresponding economic decline.

    We'll see.  After all, economists only exist to make weather forecasters look good.

    Published on: June 5, 2020

    The Financial Times has a piece by columnist Tim Harford about something called "hysteresis," in which the systems that existed pre-pandemic do not automatically return to their previous condition once the current crisis has passed - especially if we slide right into any sort of extended recession.

    The metaphor that Harford uses is this:  "Stretch a rubber band, and you can expect it to snap back when released. Stretch a sheet of plastic wrapping and it will stay stretched."  The economy and the culture, he argues, will be more like the plastic wrap.

    "The effects can be grim," he writes.  "A recession can leave scars that last, even once growth resumes. Good businesses disappear; people who lose jobs can then lose skills, contacts and confidence."

    What will change permanently?  Harford writes:

    "Start with the most obvious impact: the people who have died will not be coming back. Most were elderly but not necessarily at death's door, and some were young. More than one study has estimated that, on average, victims of Covid-19 could have expected to live for more than a decade. But some of the economic damage will also be irreversible. The safest prediction is that activities which were already marginal will struggle to return … Ask, If we were starting from scratch, would we do it like this again?

    "If the answer is No, do not expect a post-coronavirus rebound."

    KC's View:

    I think that is a really smart observation.  Businesses that ask themselves when things will go back to the way they were, when things will get back to normal, are missing both the likely reality and the potential opportunity that the pandemic can provide.

    I've been arguing here pretty much from the beginning of the news about the pandemic - before it even was called a pandemic - that every company ought to have a small, two-pizza team charged with figuring out how that business would and should be different coming out of this.

    The opportunities are many, and not just in business.  Education and politics and entertainment are just a few of the institutions that can and should undergo self-led disruptions.  Not to say that all that came before needs to be tossed out;  rather, this is a moment to figure out what is … yup, here comes that word again … essential, and what is not.

    "Never let a good crisis go to waste."  That's a phrase commonly attributed to Winston Churchill, but the provenance almost doesn't matter.   This is a time for innovation, though it probably is important that even as hysteresis occurs, hysteria is avoided.  Embrace the moment.

    Published on: June 5, 2020

    National Public Radio's Marketplace has a story about how the food truck industry has adapted to a new reality imposed by the pandemic.

    "Food trucks are one of the many industries that have been flipped upside down by the coronavirus crisis," the story says.  "As cities around the country started shutting down, many food truck operators had to rethink their business models."

    That meant - like a lot of city dwellers - food truck owners started looking to the suburbs.

    Marketplace talked to Matt Geller, founding president of the National Food Truck Association, who said that "food trucks traditionally have had lunches as their bread and butter. And within a week’s time, we saw every lunch just shut down. And so our job was to figure out what was next. We changed our app — we’ve updated our app six times in six weeks for more features, easier features, better features for the trucks. This traditionally lunchtime business turned into almost exclusively a nighttime, evening, go into a neighborhood, have people online order and then pick up their food."

    Traditionally, Geller says, "you’d think more dense equals better. Now, the suburbs are so well connected in a lot of communities, unlike Los Angeles. I talked to one person from one area, and she runs the Facebook page for 400 homes. And when she says a food truck’s coming, everybody knows it. The truck goes there and they knock it out of the park.

    "Food trucks are serving suburban communities that are very well connected, because they don’t have to do advertisements or social media, they just have to get ahold of the one person that runs the Facebook page, or the Nextdoor page or even a WhatsApp stream in some communities. You get to that one person, you get to everybody. And that’s much more of a suburban thing than a dense, city thing."

    The food trucks also have changed the way they do business - having people wait on line to order and get their food no longer makes sense.  And so, waiting on line has shifted to going online.

    "When we started online ordering two years ago with Best Food Trucks, food trucks were like, oh, that’ll ruin my business, I can’t have that," Geller says.  "But when this happened, everything changed. [Now it’s] we need online ordering, we need it now. And then it was, we need online ordering, we need preordering. I want my customers to preorder 24 hours in advance. And then it was, I want them 48 hours in advance. So I mean, it has been a paradigm shift that came basically in one week."

    KC's View:

    I love this … and not just because it could mean that food trucks - one of the things I love most about city living - might find their way to the suburbs, one of which is a place where I am currently ensconced.

    I love the ides that faced with change, these trucks adopted new approaches that would keep them relevant.  They adapted.  That's what retailers do.

    It'll be interesting to see if they are able to move the competitive needle in some of these suburbs.  One of the things that food trucks often do is bring a sense of culinary adventure to the people they serve.  That can be an enormous differential advantage, and it could challenge retailers that take a lowest-common-denominator approach to the food they serve.

    Published on: June 5, 2020

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

    •  In the US, there now have been 1,924,189 confirmed cases of the Covid-19 coronavirus, resulting in 110,179 deaths and 712,252 reported recoveries.

    Globally, there have been 6,720,315 confirmed coronavirus cases, with 393,540 fatalities and reported recoveries that number 3,263,987.

    •  The Wall Street Journal reports that mall owner Simon Property Group has filed suit against Gap Inc. trying to collect unpaid rent for April, May and June.

    “The requirement that The Gap Entities timely pay rent due under the leases has not been excused,” said the complaint.

    Gap has said it is trying to work with its various landlords on “mutually agreeable solutions and fair rent terms."

    Not being a lawyer, I have no idea how this works.  Sure, Gap didn't pay rent … but weren't the malls closed because of the pandemic? I understand that Simon has its own bills to pay, but this strikes me as a time to work together, not go to court.

    •  The New York Times reports that clothing icon Brooks Brothers, which has touted its "made in America" credentials since its founding in 1818, may be on a path to closing down its US factories, which would leave it importing virtually all its products from abroad.

    According to the story, "Brooks Brothers plans to lay off nearly 700 employees this summer at the factories, in Massachusetts, New York and North Carolina. The company is also trying to find buyers for the factories by mid-July, and expects to close them if it can’t.

    "The plans emerged through filings under the federal WARN Act, which requires companies to give workers at least 60 days’ notice before mass layoffs or plant closings. Shortly after, Gordon Brothers, the expert in retail liquidations, announced it would provide a $20 million secured loan to Brooks Brothers."

    Sure, a pandemic that shut down all of Brooks Brothers' stores was a blow.  But the question is whether Brooks Brothers would've been in trouble anyway, a victim of some bad decisions and a trend toward casual clothing that did not play to its more formal traditional strengths.  I think I know the answer to that question … and it seems to me that this may be yet another example of a company using the pandemic as a convenient excuse.

    •  The Mission Viejo Patch reports that while Disneyland in California has not yet officially announced when it will reopen its resort facilities to the public, its hotels and ticket services appear to have begun taking reservations for July 15 and beyond.  The date, however, will depend on when California gets to Stage 3 of its reopening process.

    Disney Word in Florida has been approved to begin its reopening process on July 11.

    The Patch makes the point that Disneyland has been hiring people to play First Order Storm Troopers at the park, and some believe that it will use those Storm Troopers to maintain proper physical distancing among guests.

    Not sure that using Storm Troopers for this purpose is the best look.   Maybe Yoda instead?  "Enough space you do not have," he could say.

    •  Great piece in the New York Times about how the Covid-19 coronavirus pandemic is "doing a number" on many people's bodies.

    Even for people who don't have ther coronavirus, the possibility that they might get it, or that family members might get it, creates all sorts of stresses with physical manifestations.

    It can create blood flow issues, gastrointestinal problems, skin disease and even hair loss - all of which can then lead to depression and other emotional and physical dysfunctions.

    •  Basketball is back.  Or will be soon.  Sort of.  (Unless you are a Knicks fan.)

    The New York Post reports that the National Basketball Association has decided "to bring back their season with training camp beginning June 30 and the season re-opener July 31 with a 22-team format, the league announced … Teams will be secluded in a bubble atmosphere at Disney World and go through coronavirus testing."

    Commissioner Adam Silver said in a prepared statement, "“The Board’s approval of the restart format is a necessary step toward resuming the NBA season.  While the COVID-19 pandemic presents formidable challenges, we are hopeful of finishing the season in a safe and responsible manner based on strict protocols now being finalized with public health officials and medical experts. We also recognize that as we prepare to resume play, our society is reeling from recent tragedies of racial violence and injustice, and we will continue to work closely with our teams and players to use our collective resources and influence to address these issues in very real and concrete ways.”

    The NBA was the first league to shut down because of the pandemic, and now will be the first major league to reopen.

    I just don't know what happens when one or two players test positive for Covid-19.

    Published on: June 5, 2020

    Food tech start-up Impossible Foods, which makes the the plant-based Impossible Burger, said yesterday that it is supplementing its retail strategy - which has its products in supermarket chains that include Kroger, Albertsons, H-E-B, and Wegmans - with a new direct-to-consumer website that will ship to the continuous US states " with compostable, recyclable packaging, free shipping and two-day home delivery."

    KC's View:

    Is it supplementing the 3,000 retail stores that carry its products?  Or setting the stage for long-term disintermediation of traditional retail?

    Just asking.  Because I think we're going to see more of that in coming months, and this could be part of a larger trend.

    Published on: June 5, 2020

    The Wall Street Journal reports on the iguana hunters in South Florida who, using weapons ranging from air rifles and traps to nets, slingshots, and blowguns, look to bag as many of the reptiles so they can be used for food.

    "The high-protein, low-fat iguana is served hot off the grill or in curried stews, tacos and soups," the story says, and is "a staple in South and Central America, as well as in the Caribbean.

    " Connoisseurs call them 'chicken of the trees'."

    Iguana hunters, apparently, live for those rare Florida nights when it gets cold - because iguanas are immobilized by such temperatures.  "At dawn, thousands of iguanas were splayed lifeless on streets and sidewalks, feet pointed to the sky. Some continued to fall with a thud on car hoods and patio umbrellas."

    One hunter referred to it as a "target-rich environment."

    KC's View:

    That hardly seems sporting, but I'd just like to say for the record that I'd eat iguana - at least once.  A nice curried iguana stew sounds very tempting.

    Published on: June 5, 2020

    Peggy Davies, vice president of association relations at the Private Label Manufacturers Association (PLMA), has been named acting president of the organization.

    She succeeds Brian Sharoff, who held the position for almost four decades.  Sharoff passed away on May 23 after a brief illness.

    Published on: June 5, 2020

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  C&S Wholesale Grocery announced yesterday that it has contracted with delivery service Instacart " to offer e-commerce and same-day delivery solutions to more than 3,000 C&S independent grocery retailers across the U.S. The new partnership shows both companies’ continued commitment to supporting independent grocers across the country and the diverse communities these retailers serve … As part of the partnership, C&S will help bring their network of independent grocers onto the Instacart marketplace. The companies will work closely to help retailers establish an e-commerce and delivery offering to meet the needs of their customers."

    I get this.  I'm sure in a time when e-grocery is accelerating its penetration among consumers because of the pandemic, with expectations that much of that online business will remain in place going forward, C&S and its retailers were looking for a solution.  Maybe even were desperate for a solution.

    But they need to know that they are handing Instacart all sorts of customer data that will eventually put them at a competitive disadvantage when Instacart starts opening its own dark stores and walking a more autonomous business path.  C&S is a big enough company that it could've developed a more proprietary system for its retailers, outsourcing some of the operations but making sure its retailers would be more protected.  If I were one of these independents, I think I'd be concerned that while the short-term impact might be positive, the long-term implications could be far more dire.

    •  Bloomberg reports that "Tesla Inc. Chief Executive Officer Elon Musk said it’s 'time to break up Amazon' in a tweet Thursday, escalating a rivalry with Inc. CEO Jeff Bezos, another billionaire investing in space exploration."

    Musk added, "Monopolies are wrong."

    According to the story, "Musk’s post came in response to a tweet from a writer who said his book titled 'Unreported Truths About COVID-19 and The Lockdown' was being removed from Amazon’s Kindle publishing division for violating unspecified guidelines.

    "An Amazon spokeswoman said the book was removed in error and is being reinstated. 'We have notified the author,' she said in an email."

    Published on: June 5, 2020

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  From the Seattle Times:

    Amazon announced "$10 million in new cash donations to 11 organizations 'working to bring about social justice and improve the lives of Black and African Americans,' the company said.

    The donations follow social media posts in recent days by Amazon and other companies expressing solidarity with the Black community amid an uprising across the country over ongoing racial injustice, sparked by the death of George Floyd. Four Minneapolis police officers have been charged in his death."

    Among the organizations getting the grants are Amazon's own Black Employee Network (BEN), as well as the ACLU Foundation, Brennan Center for Justice, Equal Justice Initiative, Lawyers’ Committee for Civil Rights Under Law, NAACP, National Bar Association, National Museum of African American History and Culture, National Urban League, Thurgood Marshall College Fund, UNCF (United Negro College Fund) and Year Up.

    •  USA Today reports that JC Penney has identified the first 154 locations out of the total 254 stores that it plans to close.

    According to the story, "The closures include nine in California, nine in Ohio, eight in Indiana, eight in Florida, seven in Georgia, seven in New York, seven in Texas, six in Kentucky, six in Oklahoma, six in South Carolina, six in Tennessee.

    "The announcement comes as J.C. Penney is gradually reopening stores that have been temporarily closed due to the coronavirus pandemic. The company said nearly 500 had reopened as of Thursday."

    Once the store closings have taken place, JC Penney will have a 600-store fleet.

    For now.  Bet the under.

    Published on: June 5, 2020

    Yesterday, responding to a story about H-E-B's decision to no longer require customers to wear masks in its stores, one MNB reader wrote in to criticize the decision, saying , in part:

    We used to say that we needed to be better than “good enough”. But in dealing with the coronavirus “good enough” became the motto. They let down their Partners and they let down their customers who tried to act responsibly. 

    MNB reader Mark Delaney disagreed:

    Given that HEB was so far ahead of many retailers in dealing with the pandemic and in fact has a senior executive whose sole function is to deal with crises like this doesn't anybody want to know why rather than throwing stones? There is very little MD or Phd supported evidence that healthy folks wearing masks makes any difference whatsoever. There is on the other hand tons of politically charged opinion around the subject. The WHO came out and stated pretty clearly that healthy people wearing masks could actually be hurting themselves by wearing masks - driving their bodies resistance down to the point that the common cold could take them out. Numerous MD's have stated similar POV's. I'm not straying into the politically correct nonsense as it is simply nonsense but perhaps before one is critical of such a well regarded retailer someone should ask why they made that decision? I suspect the answer might surprise some - but it's the right thing to do before piling on.

    I think it is entirely fair to defend H-E-B.  Also, as it happens, to feel let down by one of its decisions.

    However, in response to your comments about masks - I'm sure my certitude on this issue must've annoyed you - I would refer you to a CNN story from May 27:

    Dr. Anthony Fauci on Wednesday called for a cautious approach to reopening the US and implored Americans to wear face masks in public, comments that are at odds with President Donald Trump's push to have America quickly return to normalcy.

    "I want to protect myself and protect others, and also because I want to make it be a symbol for people to see that that's the kind of thing you should be doing," Fauci, the nation's top infectious disease expert and a member of the White House's coronavirus task force, told CNN's Jim Sciutto on "Newsroom."

    Fauci said he believes that while wearing a mask is not "100% effective," it is a valuable safeguard and shows "respect for another person."

    Few things in life are 100 percent effective.  If Dr. Fauci wants to implore me to wear a mask, I am inclined to listen … and not write it off as "politically correct nonsense."

    But that's me.

    We had a piece yesterday about how Campbell Soup CEO Mark Clouse in which he said that he expects the sales increases generated for the company by pandemic-induced changed consumer shopping habits to be sustained over time.

    I commented:

    Companies like Campbell Soup are seeing bottom line improvements at the moment because of the pandemic, in which consumers wanted highly processed food that they could keep in the basement for long periods of the time.  They may continue to see an improvement in the short-term because, as the nation slides from pandemic to recession, many consumers may want cheap food.

    But I think believing that highly processed, highly storable, cheap food is a long term strategy is not very evolved.  Big Food companies that had problems before the pandemic are eventually going to have those same problems again, and to think otherwise is foolish.  So enjoy the traffic, cash the checks … but invest some of that money in trying to get ahead of the shopper so you're not always playing catch-up.

    One MNB reader responded:

    You provided perfect commentary for the article! I wish I could have said it better, but you nailed it.

    Thanks.  I get one right every year or so.  (This probably covers me until 2037.)

    Regarding the transformation that Southeastern Grocers says it is going through, one MNB reader wrote:

    They are three years into a five-year transformation? Really? I suspect the only transformation here is the continued sale of stores and DCs as the company slides deeper into obscurity.

    On another subject, MNB reader Steve Worthington wrote:

    Regarding your RIP for Bruce Jay Friedman this morning; I was curious over the use of 'execrable.'  I must admit I had to look it up, not knowing the definition.

    Having only been fortunate enough to attend Long Beach Sate and USC, I was wondering if this is a Loyola Marymount word or a Portland State word?

    I think you're kidding … but to be honest, I'm not sure.  I just like the word, mostly because it is a polite synonym for another word less appropriate for polite conversation and family websites.

    And finally, responding to my commentary about the AMC movie theater chain saying it lost more than $2 billion in Q1, and has "substantial doubt" about its ability to stay in business, MNB reader Rich Heiland wrote:

    When I was a small town kid, going to the movies was the treat of the week. Every Saturday after I collected my paper route I would take my earnings and go straight to the Murphy Theater for a double feature - 25-cents for the ticket, a nickel for a coke and another nickel for popcorn.

    Today, I probably go to the movies a couple of times a year, usually when I am visiting kids and grandkids. I am not sure why. Here in Huntsville our six-screen cinema has a heck of a deal for senior citizens - three bucks a pop. If it came down to money, we should be going a couple of times a week. But, we don’t. The only thing I can come up with is it’s the fault of that big screen TV with Netflix, Amazon Prime, YouTubeTV. I know it’s not the real big screen, and the sound sure isn’t the same. But it’ll do. I am not sure what it would take to get me to go to the movies on a regular basis.

    What's the line from Sunset Boulevard?  "It's the movies got small…"  And maybe, these days, more suitable for home screens.  (In 2020, Norma Desmond probably would be making a miniseries for Netflix…)

    Published on: June 5, 2020

    When Michael Connelly, then already known for his Harry Bosch novels, introduced a new character, reporter Jack McEvoy, in "The Poet" in 2003, the news business was a very different place than it is today.  "The Poet" was not a treatise about the news business, though.  It was a terrific thriller about the search for a serial killer whose latest victim was McEvoy's police detective brother. And McEvoy was a character clearly close  to Connelly's heart;  like his creator, he was a newspaper reporter (for the Rocky Mountain News), and from the novel's sentence - "Death is my beat" - Connelly delivered a propulsive thrill ride in the guise of a finely crafted piece of storytelling.  (Or maybe it was a a finely crafted piece of storytelling in the guise of a propulsive thrill ride.  Doesn't really matter.)

    When "The Poet" takes place, McEvoy's laptop is seen in the story as something of a curiosity.  Connelly waited six years to write another McEvoy novel - "The Scarecrow" - by which time the internet had become far more popularized, which gave Connelly a narrative frame upon which to build another thriller.  In "The Scarecrow," McEvoy is being laid off by the Los Angeles Times, a victim of an internet that was putting newspapers out of business or dramatically cutting their news budgets.  That gave Connelly a terrific backstory for McEvoy's search for yet another serial killer, and he had yet another success on his hands.

    I tell you all this because Connelly is out with another Jack McEvoy novel - "Fair Warning."  While I'd read "The Poet" and "The Scarecrow" when they first came out, it's been a while, and so I went back and re-read them in the days before "Fair Warning" was released.  It was a good thing to do, since it gives the characters added context and texture I might not have gotten otherwise, but not necessary.  (Unless, of course, you just want to read a bunch of great novels.)

    "Fair Warning" finds McEvoy now working for a consumer website, but when a woman he knew is found murdered, old instincts kick in and he finds himself finding connections between a series of murders - and yes, pursuing a serial killer.  Connelly has found yet more fertile territory on which to place his story - the world of DNA testing and tracking - which shows us how much the world has changed since "The Poet."  The result is an exciting, propulsive, can't-put-it-down thriller.

    McEvoy is a fascinating character - he's obsessive to an almost dangerous degree, he puts his profession above his relationships (and has in all three books, which explains his problematic relationship with FBI Agent Rachel Walling), and he's flawed in his willingness to bend the rules to get the story.  But he's also a throwback to a time when journalists were heroes, when news with which we were uncomfortable wasn't automatically labeled "fake," and when it was a noble pursuit to comfort the afflicted and afflict the comfortable.  (Why they haven't turned any of these books into a film or TV series is beyond me.)

    I'm not sure if the next McEvoy novel is three or five or 10 years in the future, but you can sign me up right now.

    My wine of the week - the 2018 Chateau de Berne  Romance Rosé, which is a lovely and light summer wine with a ton of flavor … perfect as the nights get warmer and the humidity gets higher.

    That's it for this week.  Have a good weekend, and I'll see you Monday.

    Stay safe.  Stay healthy.