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    Published on: July 13, 2020

    KC talks about how he and Michal Sansolo, during those times when they're off from MNB, find themselves occasionally yearning for a soapbox to talk about this story or that.  In this case, KC says, the story that concerns him is the coronavirus ... and how, when he left for a few days off, the nation was in early July, and when hew returned, it seemed more like April.  It wasn't a rip in the space-time continuum ... just reality, rearing its ugly head.

    Published on: July 13, 2020

    In Rochester, WHAM-TV News reported on the retirement of Mary Ellen Burris, Senior Vice President of Consumer Affairs at Wegmans, who is stepping down from the company after almost a half-century.

    The story notes that Burris essentially wrote her own job description when she joined the company, foreseeing a “revolution in consumer thinking” and "bridging the gap between the consumer and the company.”

    From the WHAM story:

    "That description was prophetic, as bridging the gap between company and consumer is what Burris has done for Wegmans for nearly 50 years. One example is the hundreds of columns she wrote on topics ranging from cooking your Thanksgiving turkey, to cultural diversity, all aimed at educating consumers. For many years, those columns were part of the weekly Wegmans ad in newspapers. Later, they moved to social media.

    "Burris' relationship with consumers was always a two-way street. Whether through handwritten letters, emails, or tweets, Wegmans customers have always been more than willing to share their compliments and criticisms."

    The story notes that " a recent knee replacement and being at home due to the pandemic helped make the retirement decision easier.  'I liked being home,' she said. 'Every retired person I ever talked to you said you'll know when it's time. And they were right. I just knew. Now is the right time.'"

    Even more importantly, Burris was in the right place at the right time with the right vision for how consumers would be empowered by education and transparency … which even 50 years after she started, remains an Eye-Opening and enlightened approach to food marketing.

    Published on: July 13, 2020

    Walmart last week announced the launch later this month of Walmart+, which Re/code describes as "its own membership program that it hopes will eventually become an alternative to Amazon Prime … It will include perks like same-day delivery of groceries and general merchandise, discounts on fuel at Walmart gas stations, and early access to product deals."

    The program was originally planned to be rolled out a few months ago, but the pandemic pushed back Walmart's plans.

    Some more context from the Re/code story:

    "When Walmart+ launches, the $98 annual membership is expected to include unlimited same-day delivery of groceries and other goods from Walmart Supercenters, reserved delivery slots and open-slot notifications, as well as some access to Walmart’s new Express two-hour delivery offering, though not unlimited usage. During the pandemic, customers have run into issues securing grocery delivery slots in some parts of the country as companies like Walmart and Amazon struggled to handle drastic increases in demand for online grocery services.

    "Walmart+ perks are also expected to include discounts on fuel at Walmart gas stations, early access to some product deals, and a Scan & Go service that would allow shoppers to check out in Walmart stores without waiting in line — a tool Walmart briefly tested but discontinued nearly two years ago. A Walmart+-branded credit card will also be introduced at some point after launch.

    "Walmart also has plans to add video entertainment components to the program, though the details of this remain unclear."

    Re/code writes that "launched in 2005, Amazon Prime has become a loyalty program that now boasts more than 150 million members globally and sports a portfolio of perks, including express delivery of groceries and other items, access to a large catalog of TV shows and movies, as well as exclusive discounts at Whole Foods stores. Amazon Prime members, who pay $119 annually in the US, shop more frequently and spend more on Amazon than non-Prime members do. They also do price comparisons less across competitor sites."

    One of the challenges for Walmart, Re/code notes, " is the fact that more than half of its top-spending families now have Amazon Prime memberships … It’s a trend that has been several years in the making, as Amazon has made moves for Prime to appeal to households with less disposable income that historically have favored shopping at Walmart."

    KC's View:

    The best commentary I've seen on this move is from Scott Galloway, who describes the Walmart+ initiative as an attempt to counterpunch in a way that creates a fundamental shift in how business is done.

    Writing for Business Insider, Galloway lays it out this way:

    "The most accretive action taken by any $10 billion or larger business is to move from a transactional model to recurring revenue. This exploits one of the fundamental flaws of our species, the inability to register time. Time flies — it goes faster than our estimated consumption of a product during a given time period. Only 18% of gym members go to the gym consistently. 

    In addition, the markets are a reflection of ourselves, and humans hate uncertainty. Waking up next to a stranger is exciting in the short run but exhausting in the long (see above: recurring revenue). Walmart interacts with American families transactionally, while Amazon lives in 82% of their homes. That could begin to shift with Walmart+."

    As someone who long has advocated for subscription and auto-replenishment services that allow retailers to effectively compete with Amazon's Subscribe & Save, I totally agree with this … though the keyword in Galloway's analysis is "could."  Saying it and doing it are different things.

    But … retailers that compete with Walmart and Amazon have to realize that every subscription is not just a single sale they did not get, but potentially a lifetime of sales of whatever that item is that no longer will take place in their stores.  Every subscription is a brick in a wall that serves to keep the shopper inside an ecosystem being constructed by Amazon and Walmart, and opposing retailers outside.

    And outside the ecosystem is a dangerous place to be.

    This won't all happen overnight, nor will it affect every category.  But it is a long-term strategy that has potentially devastating implications for many retailers and many segments of their businesses.

    Published on: July 13, 2020

    BuzzFeed News reports that Costco is dealing with backlash from some employees who feel that it has been selective in its enforcement of dress code regulations - allowing certain kinds of statements and adornments, but not permitting Black Lives Matter paraphernalia.

    According to the story, "After Costco began requiring all employees to start wearing masks to help prevent the spread of COVID-19 in late April, some chose the logos of their favorite teams, Harry Potter characters, or colorful designs and patterns, while others picked styles with a message, such as glittering rainbows for Pride and black, white, and blue American flags synonymous with supporting police. No one objected, said employees at several of Costco’s nearly 550 US warehouses."

    But now, BuzzFeed reports, some employees are saying that "despite its public statements about supporting Black employees, the company is selectively enforcing an otherwise-ignored dress code - and even invoking anti-harassment policies - to punish workers who wear Black Lives Matter apparel. One employee took to social media to post an outraged letter of resignation to the company’s CEO. Another started a petition, which has to date gathered nearly 600 signatures."

    Some context from BuzzFeed:

    When "Niko Bracy, a cashier at a Costco warehouse in Louisville, Kentucky, heard that six of his colleagues sent home for wearing Black Lives Matter masks - which he says he considers a basic 'statement of equality' - he wrote a letter to Jelinek announcing his resignation.

    :"'As a citizen of the United States of America, I have a right to refuse to dedicate my time, my labor, and my talents to a company that believes I am essential enough to risk my life, but not essential enough to stand against my death.'

    "The Louisville workers who were sent home do not appear to be an isolated case. In addition to the six workers there, five employees at Costco warehouses in Delaware, Chicago, and New Jersey have all said they were sent home or ordered to ditch BLM masks or suffer repercussions, including potential suspensions — in some cases even as other coworkers were allowed to wear masks with pro-police messages. Their expressions of frustration to managers didn’t amount to much, but Bracy’s letter, which he also posted to Facebook along with some of his colleagues’ complaints, had a dramatic effect, spurring the CEO of the $140 billion company to fly from Seattle to Louisville this week to personally meet with workers and discuss the controversy."

    The story goes on:  "Employees argue that supporting Black Lives Matter is not political, nor should it be seen as controversial, especially given Jelinek’s June letter stating that 'all individuals and organizations can use this moment as a catalyst for change.'  Costco, Jelinek wrote, will not tolerate 'racism, discrimination or harassment' and at the same time would improve by 'listening to each other’s perspectives with respect, patience and humility'."

    KC'S View:

    I wrote about this before going on hiatus … how there were a lot of companies that made strong statements of support about racial and social justice that then were faced with having to live up to those comments in the real world.  I do think that Starbucks had the right approach - admittedly gotten to after making its own misstep - in coming up with its own t-shirts that supported Black Lives Matter, and then distributing them to any employee who wanted to wear them.

    Retailers do have to decide what is "on-brand" for them - what is right st Starbucks may not be right for Costco.  But they also have to be careful about communicating a disconnect between words and actions.

    Published on: July 13, 2020

    Bloomberg has an excellent story about how "grocery stores are doing whatever it takes - including deploying robots - to save their lucrative salad bars from becoming a relic of pre-pandemic shopping.

    "In a frantic push to ease skittish consumers and shore up sales, some chains are tossing prepackaged salads into the bar’s now-empty bins, a stopgap measure that’s easy to do, but eliminates the customization - extra onions, less croutons, etc. - that shoppers crave."

    The story quotes experts as saying that while salad bars have been attractive to supermarkets (low labor, high cost per pound), sales in fact have been declining in recent years as "salad-centric restaurant chains, like Sweetgreen, Chopt and Saladworks, have expanded and lured away some of that kale-loving crowd."  Plus, even in pre-pandemic times, they were seen as unhygienic and  a potential problem.

    Now, the story says, "they face an existential threat. More than 80% of consumers said grocery-store salad bars are too risky, according to a survey from researcher Datassential. Retailers have turned maximizing selling space into a science, and they aren’t about to let an underperforming part of the store wallow for long. But what to replace them with?"

    KC's View:

    Oner of the more interesting observations in the story is that there may be the potential for supermarkets to forge alliances with the likes of Sweetgreen, Chopt and Saladworks … this may be a case in which outsourcing might make sense.

    One company I might consider talking to about a possible alliance is Evergreen Salad - which has as its CEO Wendy Collie, who used to be CEO of New Seasons, so she understands the demands and economics of the supermarket business.  (For the record, Wendy does not know I am making this observation/suggestion, and may well be appalled by it.  It is just an idea, and possibly a lousy one. )

    Published on: July 13, 2020

    Bloomberg has a postgame analysis of Uber's move last week to acquire Postmates for $2.65 billion, saying that it "isn’t just about the need for consolidation in the food-delivery industry. The company also has its eyes on a bigger prize: nabbing business from Amazon.com and Walmart in the local commerce market."

    Bloomberg goes on:  "A combined Uber Eats-Postmates would vault the company to second place in the U.S. food-delivery market with total share of about 30%, versus DoorDash’s 45% share, according to the latest Second Measure data … But as important as the merger is in creating a bigger player with the chance of improving profitability and increasing scale, it also opens the door for an even more important longer-term opportunity to compete with big retailers for all categories in local commerce, Uber CEO Dara Khosrowshahi told investors. He explicitly called out Amazon and Walmart.

    "Uber Eats has experimented with non-food deliveries. Earlier this year, the company expanded partnerships with supermarkets and local stores in a small number of markets to deliver groceries and certain essential items. But the merger will help to accelerate such efforts because of Postmates’ advanced technology platform, which offers better capabilities for batching orders together and increasing efficiencies."

    KC's View:

    At a time when e-commerce has been accelerated several years into the future, expect there to be a lot of activity in this space, as everyone looks for an angle and advantage.  

    The one thing retailers have to be careful about is not being swallowed up by this activity.  They have to put their own brand equity and their own customers first - if they do business with any of these companies, they have to be tools, not a replacement.

    Published on: July 13, 2020

    Slate has an interesting story about how the US beer industry is basically monopolized by two companies, and may be worthy of antitrust attention.

    Here's how Slate frames the story:

    "Countless industries have consolidated over the past few decades, but the number of companies brewing beer in the U.S. grew from about 100 in 1987 to more than 8,000 today. The democratization of beer, the story goes, happened because of a state-by-state regulatory system that clamped down on monopoly power in an industry where anyone with a little cash and a love for beer could join.

    "To most beer drinkers, small businesses have triumphed. Bars teem with interesting ales and stouts, and retail beer aisles seem as diverse as ever.

    "But the reality is not what it appears to be. Call it the illusion of choice—or the illusion of competition. Beer drinkers might see plenty of options, but in the multibillion-dollar beer industry, Big Beer companies, and distributors that are beholden to their power, use an unseen network of influence to restrain new, independent brewers and recapture profits that were lost in the craft boom.

    Today, two powerful brewers continue to dominate the American beer market. Combined, Anheuser-Busch InBev and Molson Coors (called MillerCoors until this year) sell around 65 percent of all beer in the U.S."

    However, Slate argues, the real monopoly has less to do with percent of market and more to do with footprint and influence:

    "Despite the popularity of craft beer, the two global beer titans have managed to maintain their grip on the industry largely by influencing how beer is distributed and what is found on store shelves. Almost 90 percent of beer sold in most places in America is handled by distributors whose primary customer is one of the two big brewers, giving AB InBev and Molson Coors outsize control over which beers appear on bar taps and in retail coolers. Meanwhile, the two companies have purchased about 20 smaller 'craft' beer brands - brands that then fill taps and shelves where independent brews might otherwise appear.

    You can read the story here.

    Published on: July 13, 2020

    The Washington Post reports that "the committee assembled to help formulate the 2020 Dietary Guidelines for Americans is taking aim at sugar-sweetened beverages and added sugars … The committee, a group of 20 doctors, registered dietitians and public health experts, recommends reducing added sugars to 6 percent of daily calories, from 10 percent.

    "The previous Dietary Guidelines took a major step forward in 2015 by suggesting added sugars be limited to 10 percent of total daily calories, but leading health organizations, supported by science, have long argued that lower limits would better protect health."

    In addition, the story says, "for the first time, the committee made recommendations for children up to 2 years old, suggesting a ban on sugar-sweetened beverages. The experts argued that calories from sugar-sweetened beverages may displace those from nutritious foods and increase the risk of the child becoming overweight."

    The Post notes that the committee's recommendations are designed to guide "the Department of Health and Human Services and the Agriculture Department in determining the 2020 Dietary Guidelines for Americans, which help shape federally funded food assistance programs and the contents of school lunches, how foods are labeled and what our doctors exhort us to avoid or embrace.

    "With half of American adults suffering from one or more preventable, chronic diseases and about two-thirds of U.S. adults overweight or obese, the committee’s recommendations come at a critical time."

    KC's View:

    And the problem, of course, is that people with those chronic diseases are more susceptible to catching the Covid-19 coronavirus and suffering serious problems as a result.

    The story also makes clear, as I understand it, that while these may be the committee's recommendations, that doesn't mean that food industry lobbyists won't work overtime to water them down, and that HHS and USDA won't be accommodating to the industry pressure and less accepting of the science-based recommendations than some would want them to be.

    Which to me just sounds like a deeply cynical reading of the situation.

    Published on: July 13, 2020

    Random and illustrative stories about the global pandemic and how businesses and various business sectors are trying to recover from it, with brief, occasional, italicized and sometimes gratuitous commentary…

    •  In the United States as of this morning, there are 3,414,105 confirmed cases of the Covid-19 coronavirus, resulting in 137,787 deaths and 1,517,560 reported recoveries.

    On July 2, before I took a one-week breather, we reported 2,780,152 confirmed cases of the coronavirus and 130,798 deaths  … which means that there have been more than 600,000 new infections and just shy of seven thousand deaths in just the last 10 days.

    Globally, there now are 13,058,349 coronavirus cases, with 571,984 fatalities and 7,605,053 reported recoveries.

    Again, on July 2, globally there were 10,829,468 confirmed coronavirus cases, with 519,397 fatalities … meaning that there have been more than 2.2 million new infections and more than 52,000 fatalities in the past 10 days.

    Just to put things in context.  


    •  The Wall Street Journal reports this morning that "new coronavirus infections topped 15,000 in Florida, the largest one-day increase in any state since the start of the pandemic, while more than half U.S. states - including some that avoided a significant surge in the spring - were reporting steady climbs in new cases."


    •  This weekend also was the time when Walt Disney World was reopened to the public.  "After closing in March because of the pandemic, the mega-resort near Orlando began tossing confetti again at 9 a.m. on Saturday," the New York Times writes.  "Two of its four major parks, the Magic Kingdom and the Animal Kingdom, welcomed back a limited number of temperature-checked visitors, with some attractions and character interactions unavailable as safety precautions. Epcot and Disney’s Hollywood Studios were set to reopen on Wednesday."

    And, a nice piece of writing from the Times story:

    "…Optimism is the foundation of the Disney experience. In case the wafting smell of fresh fudge and pipe-organ soundtrack don’t immediately jolt you into another dimension, there are signs at the entrances reminding visitors, “Here you leave today and enter the world of yesterday, tomorrow and fantasy.” No matter how terrible things seem outside the gates, here is a place where everything is OK: people are nice, the windows all sparkle, there are stuffed animals to cuddle, the speedway cars never run out of gas.

    "To safely reopen, however, the Magic Kingdom had to allow some of the grimness of pandemic life to puncture the utopian fantasy. To ward off germs, Disney now leaves rows of seats empty on rides like Pirates of the Caribbean. Employees constantly disinfect ride vehicles and lap bars. Face masks are mandatory, and, for some visitors, the coverings quickly grew wet with sweat."


    •  The Wall Street Journal writes that "the number of daily infections in the U.S. surpassed 60,000 for a third consecutive day on Saturday, after reaching a record of more than 66,000 cases the previous day, data compiled by Johns Hopkins University showed.

    "The 15,299 new cases in Florida on Saturday represented an uptick of about nearly 5,000 over Friday’s numbers. The state, which has seen a surge in cases in recent weeks, hadn’t topped 12,000 new cases in any prior day since the start of the pandemic. California, Texas, and Arizona reported near-record daily Covid-19 cases on Saturday.

    "Other states across the country were beginning to see significant rises in new infections, too. Case counts in 13 others—Alabama, Alaska, Arkansas, Georgia, Hawaii, Idaho, Louisiana, Montana, Nevada, Oklahoma, South Carolina, Tennessee and West Virginia—were up more than 20% in the past week, according to Johns Hopkins. Thirty-two states had increases of at least 10% in the past week.

    "The accelerating spread, which is fast moving beyond several big Sunbelt states to other pockets of the country, has some public-health experts voicing dire warnings."


    •  From the New York Times:

    "The country’s seven-day death average reached 700 on Saturday, up from 471 on July 5, but still well below the more than 2,200 deaths the country averaged each day in mid-April. And eight states set single-day death records over the last week: Alabama, Arizona, Florida, Mississippi, North Carolina, South Dakota, Texas and Tennessee. Alaska reached a new single-day record. on Sunday, with more than 110 cases."


    •  The New York Times also writes that "two of the Trump administration’s top health officials acknowledged Sunday that the country is facing a very serious situation with the onslaught of rising coronavirus cases in several states … Adm. Brett Giroir, an assistant secretary with the Health and Human Services department, and Dr. Jerome Adams, the surgeon general, both emphasized their concern about surging outbreaks, many of them in areas where people have not followed recommended public health guidelines to contain the spread of the virus."


    •  From Axios:

    "Health care workers faced severe shortages of face masks, gowns and other protective equipment at the beginning of the coronavirus pandemic, and they're afraid it's happening again now … Health care workers are sounding the alarms that they have to reuse masks and other supplies, and are worried their grievances are going unnoticed again."

    The story goes on:

    "'Supply is still coming in, but not enough to meet demand,' one industry official told the House Committee on Oversight and Reform earlier this month.

    "It's a lot worse for nursing homes and other long-term care facilities, which are 'begging for PPE,' an official with the American Health Care Association told Axios."


    •  From the Puget Sound Business Journal in Washington State:

    "Covid-19 is surging back. Cases are spiking as more businesses open and people venture into the summer sun a month after Gov. Jay Inslee ended the state's pandemic lockdown, which had effectively shut down the state's economy.

    "On Thursday, Inslee announced a statewide order precluding businesses from serving customers who aren't wearing masks. That measure goes into effect next week.

    "The governor also leveled new restrictions on restaurants and bars and paused further steps to reopen the state's economy."


    •  Los Angeles Magazine reports that Los Angeles Mayor Eric Garcetti "is warning that locals could once again be ordered to stay at home if the county’s infection rate doesn’t get under control … Garcetti revisited the city’s new color-coded warning system. The city is currently at 'threat level orange,' which means risk is high and residents should 'minimize all contact' with people outside of their own households. If the city makes it to 'threat level red,' aka extreme risk, stay-at-home orders could be reinstated."

    According to the story, "Garcetti didn’t say exactly what stats would move the dial to red—i.e. how much or how rapidly the case count or infection rate would have to rise—but threat level red is described as 'Severe and uncontrolled level of COVID-19 infection is spreading in the community and overwhelming the health care system. Outbreaks are spreading rapidly and testing and contract tracing is strained or above capacity. Hospitals are at capacity or overwhelmed'."


    •  From the Wall Street Journal:

    "Grocers are having trouble staying stocked with goods from flour to soups as climbing coronavirus case numbers and continued lockdowns pressure production and bolster customer demand.

    "Manufacturers including General Mills Inc., Campbell Soup Co. and Conagra Brands Inc. say they are pumping out food as fast as they can, but can’t replenish inventories. Popular items such as flour, canned soup, pasta and rice remain in short supply.

    "As of July 5, 10% of packaged foods, beverages and household goods were out of stock, up from 5% to 7% before the pandemic, according to market-research firm IRI."

    The story goes on:

    "Food makers and grocers expect prolonged shelter-in-place orders and restrictions on restaurants, as well as the battered economy, to result in a longer stretch of eating at home. Added safety measures at plants are slowing operations, too. There is enough food in the U.S. to keep people fed, executives say, but every product might not be available everywhere while inventories are strained."


    •  From USA Today:

    "Costco Wholesale Club will continue to offer special operating hours for members 60 and older and vulnerable shoppers every weekday morning.

    "The retailer previously announced plans to reduce its senior hours to twice a week effective the week of July 13 but said on its coronavirus updates page that 'due to an increase in COVID-19 cases, Costco will maintain current Special Operating Hours until further notice' … At most clubs, the designated hour for senior shoppers, members with disabilities or immunocompromised is 9 to 10 a.m. Monday through Friday."


    •  The closure of so many bricks-and-mortar stores during the pandemic, as has been reported here and elsewhere, led to a shortage of coins;  as the Federal Reserve explained it, the pandemic 'significantly disrupted the supply chain and normal circulation patterns for U.S. coin."

    Now, Fox News reports, "If you pay with cash at one of Kroger’s cashier checkouts, you won’t be getting coin change for a while … Kroger spokesperson Erin Rofles confirmed Friday the grocer will no longer return coin change to customers. Instead, the remainders from cash transactions will be applied to customers’ loyalty cards and automatically used on their next purchase.

    "Customers are also encouraged to ‘Round Up’ to support the company’s Zero Hunger/Zero Waster Foundation."


    •  The Wall Street Journal reports that Starbucks "will require customers in the U.S. to wear masks at company-operated stores … as retailers look to keep employees and patrons safe amid rising coronavirus cases in parts of the country."

    The new rule takes effect on Wednesday.

    The Journal writes that "Starbucks is sending signage about the new mask requirement to store managers and offering them resources on how to de-escalate situations where customers won’t wear masks, the Seattle-based company said in a message to employees viewed by The Wall Street Journal. In some cases, workers may have to 'respectfully refuse service with kindness,' according to the memo."

    I agree with the decision. I'm just n ot sure why this was not the mandate when Starbucks started reopening stores weeks ago.


    •  Fox News reports that Walmart has come up with a way to capitalize on the physical distancing requirements across the country that are keeping many of the nation's movie theaters closed - it is "turning 160 of its store parking lots into drive-in movie theaters … The drive-in tour is set to begin in August and will run through October. Walmart said additional details will be announced closer to the start of the tour."

    Walmart is teaming up with Robert De Niro's Tribeca Enterprises to promote and program the series.

    Published on: July 13, 2020

    From the New York Times:

    "Amazon on Friday asked its employees to delete the Chinese-owned video app TikTok from their cellphones, putting the tech giant at the center of growing suspicion and paranoia about the app.

    "Almost five hours later, Amazon reversed course, saying the email to workers was sent in error.

    "In the initial email, which was obtained by the New York Times, Amazon officials said that because of 'security risks,' employees must delete the app from any devices that 'access Amazon email.'  Employees had to remove the app by Friday to remain able to obtain mobile access to their Amazon email, the note said.

    "In a statement sent later on Friday, company spokeswoman Kristin Brown said, 'There is no change to our policies right now with regard to TikTok.'

    "But by then, the initial email had already added to the storm surrounding TikTok, which has been popular with young audiences in the United States for its short, fun videos and is owned by the Chinese tech company ByteDance. Because of its Chinese ownership and heightened tensions between the United States and China over issues such as trade and technology dominance, TikTok has come under increasing scrutiny in Washington over its security."

    The story continues:

    "TikTok has long been a concern of American intelligence officials, who fear the social networking app is a thinly veiled data collection service. Over the past six months, security researchers have only furthered those concerns with a series of discoveries.

    "Last month, a researcher uncovered that TikTok had the ability to siphon off anything a user copied to a clipboard on a smartphone — passwords, photos and other sensitive data like Social Security numbers, emails and texts. The researcher began posting the findings on the online message board Reddit.

    "The researcher, who goes by the handle Bangorlol, also said that TikTok was capturing data about a user’s phone hardware and data on other apps installed on the phone. Many of these abilities are found in other apps, but TikTok’s developers had gone out of their way to prevent anyone from analyzing the app, the researcher said."

    Published on: July 13, 2020

    Brooks Brothers filed for bankruptcy last week, "joining the running list of retailers that have stumbled amid the coronavirus pandemic," GQ writes.  "It had already made the decision to close 51 of its more than 200 stores in early April, but is moving ahead with plans to reopen its remaining stores as America undergoes a rocky emergence from the pandemic-mandated shutdown."

    However, while the company blames the shutdown for its woes, GQ (which knows about this stuff) notes that Brooks Brothers was unable to adapt to changing consumer tastes.  It was "once a go-to for postgraduates with Wall Street dreams, and suit-clad career men with Wall Street realities, and grandfathers everywhere," but "as business dress standards relaxed - Goldman Sachs even pivoted to a casual dress code in March 2019 - the 'business casual' uniform became less codified, and suits more expressive.

    "Aesthetically, young American men have pivoted to streetwear labels like Supreme and Palace for the off-duty wardrobe that was once dominated by preppy basics, while brands that mix nouveau prep codes and streetwear shapes, like Aimee Leon Dore, Noah, and John Elliott, have usurped the mental space that was once reserved for J. Crew and Brooks’ office-appropriate basics."

    The Puget Sound Business Journal reports that when Sur La Table filed for bankruptcy protection last week and announced its intention to sell itself, it was at the end of a five-year road in which three different CEOs and $15 million in capital from its private equity owners could not reverse a "meaningful revenue decline."

    Current CEO Jason Goldberger wrote that Sur La Table’s “business operations, like those of many of their peers in the retail space, have been negatively impacted by adverse market trends, including the shifting of sales from traditional brick-and-mortar retailers to online retailers, a marked decline in at-home cooking, and changing consumer preferences."

    The pandemic only made things worse, the Business Journal writes:  "Sur La Table, which pays $45 million annually for its rental spaces, couldn’t make its monthly payments to landlords. It furloughed 94% of its nearly 3,000-strong workforce. At one point, five people ran operations in its Seattle headquarters. Going into the pandemic, the retailer had at least $80 million in debt and an additional $37 million-plus owed to vendors. As a result of the pandemic, Sur La Table permanently closed 23 locations."

    KC's View:

    I actually think I own one Brooks Brothers suit - navy blue - but I have no idea where it is, and have no idea when I last wore it.  It isn't like I am an avatar of fashion, though … when GQ writes about more current brands such as Aimee Leon Dore, Noah, and John Elliott, I have no idea who or what they are.

    But even for someone of my age, when I would walk by a Brooks Brothers window, it would seem as if it were from another time, like some sort of "Twilight Zone" episode.  (I'm thinking "A Stop At Willoughby," from the series' first season.)  As charming as that may seem, there's a difference between being retro and just gathering dust … and Brooks seemed to be more like the latter than the former.

    I'm more upset about Sur La Table, because I would go into one of those stores and wander/fantasize … some guys like hardware stores, but for me, Sur La Table was all about wish fulfillment.  But again, it didn't seem to find a customer sweet spot, and the fast turnover of CEOs suggests that there was no strategic intelligence with a long-term view.  Then again, maybe thinking long-term is more difficult when the short-term seems so perilous.

    Published on: July 13, 2020

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  From the Seattle Times:

    "Amazon is preparing to open its second automated-checkout grocery store on the Eastside and is hiring managers for a third store in the nation’s capitol.

    "The commerce giant’s grocery strategy is also advancing on another front, with new locations of its conventional checkout grocery stores coming to Seattle, California, and the Chicago and Washington, D.C., areas.

    "The company says on its website a Go Grocery store is 'coming soon' to what was formerly a Sears automotive building in Redmond near its border with Bellevue, where it is also adding corporate offices. Amazon opened its first Go Grocery on Capitol Hill in Seattle this year after a lengthy development period, its latest move in an ongoing effort to capture more of consumers’ grocery budget.

    "The Go Grocery concept is a larger version of the Go convenience stores it began testing publicly in late 2016 and which now number 26 locations in Seattle, New York, Chicago and San Francisco, though several are temporarily closed. The stores are equipped with cameras and other sensors that enable the company to bill shoppers through an app for items they pick off shelves, eliminating the need for a checkout line."

    The Times points out that "Amazon also introduced a grocery store format with a conventional checkout — separate from the Whole Foods Market chain it acquired in 2017 — at a store in Woodland Hills, California, that opened early this year but was converted temporarily in March to fulfill online grocery orders only as the company struggled to catch up with a rapid increase in demand amid the growing coronavirus pandemic. A second store in Irvine, California, was similarly repurposed."


    •  From Axios:

    "Grocery delivery company Instacart has raised $100 million in new funding, on top of the $225 million it announced last month, the company tells Axios. This brings its valuation to $13.8 billion.

    Why it matters: This funding comes at what could be an inflection point for Instacart, as customers it acquired during coronavirus lockdowns decide whether they want to continue with the service or resume in-person grocery shopping … Instacart has raised over $2.2 billion since its 2012 inception and says it's accessible to over 85% of U.S. households in all 50 states, and more than 70% of Canadian households."

    The other inflection point could come if retailers realize that by doing business with Instacart they are sleeping with the enemy - a company that has total access to their data and the contractual right to weaponize it against them, a company that is planning to open its own dark stores that will serve markets where it does not have retail partners or where those partners have decided to go it alone.

    Published on: July 13, 2020

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  USA Today has a story about Bed Bath & Beyond, which is closing some 200 of its stores, or about 21 percent of its fleet, as it tries to "right-size" the company to be more competitive.

    One interesting note from the story - while the stores that have going-out-of-business sales likely will stop accepting the company's ubiquitous blue-and-while coupons, the use of them for the remaining stores is likely to become  more "surgical."

    "I think it's fair to say that the coupon is absolutely part of our DNA, and we want to use it more strategically and more surgically going forward," says CEO Mark Tritton. “It will not disappear; it is part of who we are."

    Those coupons are more like a disease embedded in the company's DNA - they've been used so aggressively over the years that a lot of people won't go to a Bed Bath & Beyond without clutching one in their hands, which sort of undermines the whole notion of value.  It is like nothing in the store is worth the price, which is sort of a weird message to be sending.


    •  The New York Times reports that "the Trump administration on Friday said it would impose new tariffs on $1.3 billion worth of French goods, including cosmetics, soap and handbags, in retaliation for a French tax that largely hits American technology companies, escalating a trade dispute that threatens to further damage the global economy.

    "Notably absent from the tariff list, published by the United States Trade Representative, are French cheese, sparkling wine and cookware, which the administration had threatened to tax in December. Wine retailers and other U.S. importers of French goods had voiced opposition to those potential tariffs, saying they would hurt American companies and their workers.

    "The 25 percent tariffs will be delayed 180 days and take effect in January 2021, a hiatus meant to give both countries time to resolve their differences over a digital tax that will hit American tech companies."


    •  The New York Times writes that when Barnes & Noble had to close all its bricks and mortar stores because of the pandemic, CEO James Daunt - charged by the retailer's private equity owners with revitalizing the troubled company - decided to take advantage of the moment.

    Rather than stick to the two-year plan to "refurnish and refurbish" stores, "Barnes & Noble used lockdowns around the country as a chance to refresh more than 350 of its 614 stores throughout the United States, using small teams to move furniture around, paint walls and bring in new books. Revamping the stores was part of a broader plan to revive the company, a difficult task to begin with that has become a lot more formidable under the weight of the pandemic."

    “I knew I wanted to rip these stores apart and put them back together in a different way,” Daunt tells the Times.    “And then suddenly: ‘Oh my goodness, they’re all shut. Let’s get to work.’"

    The Times writes:  "Some of the walls are painted blue now, and the signs look a little different. Many more of the books face out on shelves, so that customers can see the covers as they walk by. The books have been reorganized — for instance, nutrition titles and cookbooks are next to each other now, instead of on opposite ends of the store. And overall, the floor feels much more open. Many of the bulky displays have been thrown away  — Mr. Daunt said every store got a dumpster — and replaced by smaller tables that are easier to browse and to walk around … Fundamental to his approach, he said, is to keep the efficiencies and buying power of a big chain while giving individual stores a bit more independence, which would, in theory, allow them to better reflect and cater to local tastes. Each store’s manager will have more say in how they augment stock. If a book sells through and they don’t think it makes sense to restock it, they don’t have to — though there are limits."

    Published on: July 13, 2020

    •  Kroger has announced the retirement of Joe Grieshaber, senior vice president and chief merchant, who has worked for the company for almost four decades, starting as a store management trainee in 1983.

    Grieshaber will be succeeded by Stuart W. Aitken, currently senior vice president of alternative business and CEO of 84.51˚, Kroger's data analytics subsidiary. Yael Cosset, senior vice president and chief information officer, will assume responsibility for alternative business and 84.51˚.

    Published on: July 13, 2020

    Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

    •  Goya Foods is the subject of a consumer backlash on social media and threatened boycott because of comments made by its president, Bob Unanue, last week about US President Donald Trump.

    As the New York Times reports, Unanue "was at the White House on Thursday to announce that the company would donate one million cans of chickpeas and another one million pounds of food to food banks in the United States as part of the Hispanic Prosperity Initiative, an executive order from Mr. Trump that was created to improve access to educational and economic opportunities."

    What Unanue said was this:  "We’re all truly blessed at the same time to have a leader like President Trump, who is a builder.  And so we have an incredible builder. And we pray. We pray for our leadership, our president, and we pray for our country, that we will continue to prosper and to grow."

    The Times writes that "Unanue’s comments drew swift condemnation on social media from people who were upset that a company whose products are popular among Latinos and others would so openly support a president who has vilified immigrants, especially those from Latin America, and whose harsh policies have targeted them. The hashtags #Goyaway and #BoycottGoya quickly formed to share criticism from many, including those who routinely buy Goya products."

    Unanue defended his comments in an appearance of Fox News, and noted that he'd said positive things about the Obama administration while working with First Lady Michelle Obama in 2012 on a healthy meals initiative.  "So you’re allowed to talk good or to praise one president, but you’re not allowed, when I was called to be part of this commission to aid in economic and education prosperity and you make positive comment, all of the sudden that’s not acceptable,” Unanue said, referring to the boycott calls as "suppression of speech."

    KC's View:

    I actually think that Unanue makes a legitimate point about having said nice things about both Obama and Trump, though it also is fair to suggest that maybe he was a mite tone deaf about the degree of hostility toward the Trump administration held by many in the Latino community.  If he'd praised the initiative and left it there, he probably wouldn't have had a problem.  But, he spoke his mind, and that's okay … Goya is a private company, he's third-generation ownership, and so it isn't like he is going to lose his job.

    That said, it really isn't "suppression of speech" for people to object to what he said and even call for a boycott for political reasons.  People do that all the time - they boycott the consumption of grapes, or the programs of a TV network, or the products made by certain companies or in certain countries.  That's what free speech is … and, by the way, we're living in a highly polarized time when a lot of companies - public and private - actually are aware that they are taking a risk by taking a stand on the important issues of the day.  It would be disingenuous of them, for example, to suggest that if someone wanted to boycott their business because it supports the Black Lives Matter movement, it is an act of attempted suppression of speech.  It is just a risk they've decided is worth taking.

    Published on: July 13, 2020

    The Washington Post reports that the Washington Redskins will announce this morning that the team name is being changed, though expectations are that a new name will not yet be disclosed.  "The decision to change the nearly 87-year-old team name comes amid mounting pressure on the franchise from corporate sponsors and the broader nationwide discussion of race," the Post writes.

    The new name will have to decided soon, since pre-season games - if they take place - currently are scheduled to begin in about a month.

    The Post writes that "two people with knowledge of the team’s plans said Sunday that the preferred replacement name is tied up in a trademark fight, which is why the team can’t announce the new name Monday."

    Walmart, Target and Amazon have all removed Washington Redskins merchandise from their websites, joining the ranks of companies that have shown solidarity with those calling for the team to change its name to something less racially offensive or stereotypical about the country's indigenous people.  Those moves came after FedEx informed the team that if it did not change the name, it would take its name off the stadium where the team plays.

    CBS News writes that "the team and the NFL have faced years of mounting pressure to rebrand, and recent protests have sparked renewed interest in the name, which is considered a racial slur against Native Americans. 

    "After FedEx, the title sponsor of the team’s stadium, urged the team to change its name last week, owner Dan Snyder, who has previously resisted the change, said he would consider it. PepsiCo and Bank of America also encouraged the change."  Nike also removed the team's merchandise from its website.

    In a statement, National Congress of American Indians President Fawn Sharp said, "This moment has been 87 years in the making, and we have reached this moment thanks to decades of tireless efforts by tribal leaders, advocates, citizens, and partners to educate America about the origins and meaning of the R-word.  NCAI looks forward to immediately commencing discussions with the league and team about how they will change the team's name and mascot, and a prompt timetable for doing so. Indian Country deserves nothing less. The time to change is now."

    KC's View:

    I'm sure there will be some folks who will argue that this is just political correctness run amok.  But then again, they probably are people who did not have their land stolen from them, their people oppressed, and their cultures minimized, dismissed, and/or stereotyped over hundreds of years.  I'm okay with this change, but frankly, my opinion doesn't matter.