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    Published on: August 3, 2020

    Today, part one of an extended conversation about the food industry's unique challenges with Scott Moses, managing partner at PJ Solomon and head of its grocery, pharmacy and restaurants practice.

    In this segment, Scott talks about how the pandemic has affected the deal climate, where the opportunities for retailers are, and how the CEOs with whom he works are viewing the future - whether retail will go back to some semblance of past normality, or if the retail world has been forever, inexorably altered.

    Published on: August 3, 2020

    The New York Times reports that Trader Joe's has declared that its ethnic food labels, using terms such as "Trader José," "Trader Giotto," and "Trader Ming," are not racist, and that it will not change them.

    The announcement comes after an online petition argued that these names tended to reinforce racial stereotypes.  Trader Joe's responded by saying last month that even before the petition it was re-evaluating the names.

    Kenya Friend-Daniel, the company’s national director of public relations, said that "while this approach to product naming may have been rooted in a lighthearted attempt at inclusiveness, we recognize that it may now have the opposite effect — one that is contrary to the welcoming, rewarding customer experience we strive to create every day.  With this in mind, we made the decision several years ago to use only the Trader Joe’s name on our products moving forward."

    This weekend, however, Friend-Daniel said that she only was referring to labels created since 2017.

    Now, the company is saying that "we disagree that any of these labels are racist.  We do not make decisions based on petitions."

    KC's View:

    I don't know what decision Trader Joe's ought to be making about its labels, but I am pretty sure that they need to make some changes in how it handles public relations.  There are few things worth than the kind of public dithering in which it engaged.

    I assume that Trader Joe's decided that it would do less harm to its brand by keeping the names than changing them, and that's a legitimate conclusion … as long as they realize that they may take a hit from consumers who feel differently.  It is a calculation.

    Me, I would've changed the names and erred on the side of sensitivity.  I would've decided that what I saw as lighthearted might be seen as offensive by others.

    When people use derogatory terms to talk about me, they usually are not specific to my heritage.  I can imagine that I might be offended if a retailer started describing Irish products as being perfect for "bog trotters."

    Published on: August 3, 2020

    From Bloomberg:

    "Executives in the $3.9 trillion retail industry are facing their toughest call yet in an unprecedented year of hard decisions: What should they do inside their physical stores on Black Friday, amid a deadly pandemic that’s still likely to be raging?

    "Walmart Inc., Target Corp. and other big chains have already said they will close stores on Thursday, Nov. 26, for Thanksgiving Day -- a move long advocated by employees. But whatever happens the following morning needs to feed the frenzy of American consumers hungry for a bargain, even if Black Friday no longer marks the start of the holiday shopping season."

    The story goes on:  

    "Options under discussion include limiting opening hours on Black Friday to help control crowds, especially in the wee hours when lines usually form. Adding security to enforce social distancing, mask-wearing and one-way aisles could also work. Given that many shoppers want a contactless experience, it’s also critical to enhance curbside pickup. And retailers could bring some products off the shelves and set up temporary displays under tents in their parking lots.

    "While all retailers are likely to push shoppers online early and often, doing so carries extra costs to fulfill orders, and web-only exclusives risk angering customers who still prefer to shop in brick-and-mortar boxes. Target has already said it will offer 20,000 additional items on its website this year; Walmart takes pains not to treat different pools of customers differently."

    KC's View:

    Last year, 14 percent of holiday shopping was online.  The year before, it was 10 percent.

    I'd have to guess that as much as we've seen acceleration of e-commerce trends over the past five months, we're going to see things move even faster once we get into November.

    Published on: August 3, 2020

    Fox Business reports that the US Food and Drug Administration (FDA) and Centers for Disease Control and Prevention (CDC) are saying that "the recent Salmonella Newport outbreak that has hit the U.S and infected nearly 400 people may be linked to several onion brands … As of Sunday, 396 people have contracted a salmonella-related illness in 34 states, according to recent data from the CDC. Fifty-nine of these cases have required hospitalization.

    "The four states with the highest number of reported infections are Oregon, 71; Utah, 61; California, 49 and Montana, 33."

    The story notes that "Thomson International Inc., a California-based grower, packer, shipper and supplier was named in the government agencies' public safety announcements, which noted that the company has voluntarily recalled a variety of onions for potential Salmonella contamination.

    "The onions that are in question were shipped from May 1 to present and were distributed in cartons weighing between five and 50 pounds and mesh sacks between two and 50 pounds. Red, yellow, white and sweet yellow onions are included in the recall among Thomson's 11 brands, including: Thomson Premium, TLC Thomson International, Tender Loving Care, El Competitor, Hartley's Best, Onions 52, Majestic, Imperial Fresh, Kroger, Utah Onions and Food Lion."

    Published on: August 3, 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, we've now had 4,813,984 confirmed cases of the Covid-19 coronavirus, with 158,372 deaths and 2,380,548 reported recoveries.

    Globally, there have been 18,254,639 confirmed coronavirus cases, 693,154 fatalities, and 11,457,259 reported recoveries.

    •  From the Washington Post:

    "Cases of the new coronavirus in the U.S. reached a record for the month of July, as the White House coronavirus coordinator said the pandemic is more pervasive in the country than at any other time.

    "The U.S. is experiencing the world’s largest outbreak and saw more than 1.9 million new cases of the disease in July, which is more than double the number of new cases recorded in any single previous month, according to data from Johns Hopkins University."

    The Post reports that "numerous states reported record daily fatalities in recent days, including California, which reported 219 on Saturday, according to tracking by the Washington Post. Florida reported a record 257 deaths on Friday, and seven-day averages for new deaths reached new highs in states across the South, the West and the Midwest."

    The Post goes on:  "Nationwide, the daily coronavirus death toll exceeded 1,000 for the sixth day in a row on Saturday, according to the Post’s data. The 1,198 new fatalities marked the most that officials have counted on a Saturday, when death reports tend to be lower than those tallied midweek, since May 9.

    "The Centers for Disease Control and Prevention’s most recent analysis of pandemic fatalities shows weekly reports of new deaths increasing over the next month, with 5,000 to 11,000 new deaths projected in the third week of August. The national death toll could climb to more than 168,000 by that time, with a high estimate of 182,000, according to the CDC’s review.

    "Deborah Birx, the physician overseeing the White House coronavirus response, warned Sunday that the United States had entered a 'new phase' of the pandemic and urged people to take extreme health precautions as infections and deaths rise sharply nationwide … Birx did not rule out an estimate from former Food and Drug Administration commissioner Scott Gottlieb that virus deaths could top 300,000 by the end of the year, saying 'anything is possible.' Such an outcome would be far less likely, Birx said, if people practiced social distancing and avoided large gatherings."

    There are signs, the Post reports, "that the virus is spreading freely in much of the country. Experts are focused on upticks in the percentage of positive coronavirus tests in the upper South and Midwest. It is a sign that the virus could soon surge anew in the heartland. Infectious-disease experts also see warning signs in East Coast cities hammered in the spring.

    "Alaska is in trouble. And Hawaii, Missouri, Montana and Oklahoma. Those are the five states, as of Friday, with the highest percentage increase in the seven-day average of new cases, according to a Post analysis of nationwide health data.

    "'The dominoes are falling now,' said David Rubin, director of the PolicyLab at Children’s Hospital of Philadelphia, which has produced a model showing where the virus is likely to spread over the next four weeks."

    •  The Houston Chronicle has a story saying that "Texas, unlike 27 other states, excludes the results of increasingly popular, rapid COVID-19 tests from the numbers it reports publicly - obscuring the scope of the pandemic, records and interviews show. The antigen tests are used in doctor’s offices, hospitals and stand-alone clinics and deliver results in less than 30 minutes."

    In other words, Texas's pandemic numbers are worse than are bering publicly reported.

    The story goes on:  "While there is no way to independently estimate the scope of the undercount, based on the 11 Texas counties that publish antigen tests results separately of their own accord, the state’s tally is short by at least tens of thousands of cases — but likely far more, a Houston Chronicle analysis found.

    Some context from the Chronicle story:

    "The antigen test was approved by the U.S. Food and Drug Administration in May under an emergency authorization. They are considered to be less reliable than the molecular polymerase chain reaction, or PCR tests — which are highly accurate but typically have to be shipped out to laboratories for analysis. With the current backlogs, those tests can take a week or more for results.

    "But according to the FDA, the risk is not that the antigen tests will result in false positives — indicating someone has COVID-19 when they do not. The concern is that they are more likely to result in a false negative — meaning they fail to detect when someone has COVID-19.

    "The state, following U.S. Centers for Disease Control and Prevention instructions, considers people with a positive antigen test to be a 'probable' case of COVID-19. And DSHS policy is to report only confirmed cases to the public, although that may soon change, said Chris Van Deusen, the agency’s spokesman."

    •  Axios reports that most indications are that the back-to-school season will be tough on many retailers, as students look at either being schooled at home from day one, or the likelihood that they'll end up doing e-learning before the school year is too far along.

    It is, the story notes, "the second-biggest revenue generating period for the retail sector, after the holidays. But retailers say typical shopping sprees will be smaller with students learning at home — another setback for their industry, which has seen a slew of store closures and bankruptcy filings since the pandemic hit … Research firm GlobalData expects the lowest level of back-to-school spending for elementary and high school students since 2015 — while spending for back-to-college shopping would crater nearly 40% from last year."

    One possible bright spot for retailers - electronics, as parents invest in new computers for kids who may be more dependent on them than ever for the about-to-begin school year.

    The complicating factor will be the economy - families in which people have lost jobs or are insecure about their immediate futures are not likely to be investing in electronics.

    •  The Wall Street Journal reports on how business executives in a number of channels believe that they " are getting a better grip on what a world transformed by the coronavirus looks like, giving them more confidence to lay out strategies that account for the new reality.

    "Corporate leaders are changing company operations and resetting assumptions, after having absorbed months of fresh information about how customers act with everyday life often marked by working and staying home, traveling less and social distancing. In response to the emerging environment, businesses are retooling pricing, store designs and production - for the immediate and long-term future."

    Some examples cited in the story:

    "Church & Dwight Co., the consumer-product company behind the Arm & Hammer brand, added manufacturing capacity in the second quarter—including the installation of a new liquid-laundry detergent line at one factory—to accommodate increased demand."

    "Snack maker Mondelez International Inc. is removing a quarter of product types it produces to better focus on its most important brands."

    McDonald's, the story says, having struggled during the early says of the pandemic, "is ready to ramp up marketing" and has "moved to a limited menu in the quarter, helping to simplify operations."

    •  The New York Times has a story this morning saying that "an expanding universe of distinctive small businesses - from coffee shops to dry cleaners to hardware stores - that give New York’s neighborhoods their unique personalities and are key to the city’s economy are starting to topple.

    More than 2,800 businesses in New York City have permanently closed since March 1, according to data from Yelp, the business listing and review site, a higher number than in any other large American city.

    "About half the closings have been in Manhattan, where office buildings have been hollowed out, its wealthier residents have left for second homes and tourists have stayed away.

    "When the pandemic eventually subsides, roughly one-third of the city’s 240,000 small businesses may never reopen, according to a report by the Partnership for New York City, an influential business group. So far, those businesses have shed 520,000 jobs."

    The Times notes that "while New York is home to more Fortune 500 headquarters than any city in the country, small businesses are the city’s backbone. They represent roughly 98 percent of the employers in the city and provide jobs to more than 3 million people, which is about half of its work force, according to the city.

    "When New York’s economic lockdown started in March the hope was that the closing of businesses would be temporary and many could weather the financial blow.

    "But the devastation to small businesses has become both widespread and permanent as the economy reopens at a slow pace. Emergency federal aid has failed to provide enough of a cushion, people remain leery of resuming normal lives and the threat of a second wave of the virus looms."

    •  From the Boston Globe:

    "With the fall semester fast approaching and coronavirus infections still rampant, numerous colleges and universities nationwide are reversing course and abandoning plans to bring students back to campus.

    "Last week George Washington University, Georgetown University, and American University, all in the Washington, D.C., area, announced that they would be almost entirely online in the fall, backing away from previously announced plans to offer in-person classes. Two weeks ago, three historically Black universities in the Atlanta area — Spelman College, Clark Atlanta College, and Morehouse University — announced they would start the semester online, after previously saying they would bring a portion of their students back to campus and teach both in-person and online.

    "Other universities that have switched gears include the University of California Berkeley and Miami University in Ohio, which both recently announced their fall semesters will start with all classes online. Both had previously planned to teach some classes in-person."

    •  From the Wall Street Journal:

    "With a coronavirus outbreak on one team and cases now growing on another, Major League Baseball is tightening its safety protocols on the fly in hope of completing this tumultuous, pandemic-shortened season.

    "The moves come after a full week of play in which things have not gone smoothly. Nearly two-thirds of the Miami Marlins’ roster has tested positive, forcing MLB to postpone 14 games and rejigger the schedules of six East Coast teams. A string of positive tests on the St. Louis Cardinals cost them their weekend series in Milwaukee and will likely throw their upcoming slate into turmoil as officials wait to learn the full extent of the spread."

    The story says that "the early issues have prompted MLB and the Major League Baseball Players Association to seek improvements to the sport’s 101-page operations manual, aiming to promote greater social distancing and avoid eruptions of positive tests like the one on the Marlins, people familiar with the matter said. The people declined to elaborate further on most of the specific proposals under consideration, citing ongoing negotiations, but the two sides are expected to reach an agreement in the coming days."

    On Friday, the Journal writes, "MLB commissioner Rob Manfred spoke with MLBPA executive director Tony Clark and said that if outbreaks continue, the season could shut down."

    As a Mets fan, I'd just like to say that if they want to end the season now, I'm okay with it.  What a freakin' disaster.  

    •  The Associated Press reports that the annual Sturgis Motorcycle Rally, which usually brings a half-million or more bikers to the South Dakota community and the surrounding area, is going to be held as usual this year, despite concerns about the pandemic.

    According to the story, "The Aug. 7 to 16 event, which could be the biggest anywhere so far during the pandemic, will offer businesses that depend on the rally a chance to make up for losses caused by the coronavirus. But for many in Sturgis, a city of about 7,000, the brimming bars and bacchanalia will not be welcome during a pandemic.

    "Though only about half the usual number of people are expected at this year’s event, residents were split as the city weighed its options. Many worried that the rally would cause an unmanageable outbreak of COVID-19."

    The story notes that "rallygoers have spent about $800 million in past years, according to the state Department of Tourism. Though the rally has an ignominious history of biker gangs and lawlessness, bikers of a different sort have shown up in recent years — affluent professionals who ride for recreation and come flush with cash. Though the rally still features libertine displays, it also offers charity events and tributes to the military and veterans."

    The AP writes that "when the rally is over, every year the city weighs all the trash generated to estimate how many people showed up. This year, they will also conduct mass coronavirus testing to see if all those people brought the pandemic to Sturgis."

    Published on: August 3, 2020

    Tailored Brands, which owns both Men's Wearhouse and Jos. A Bank, filed for bankruptcy yesterday, saying that its sales had plummeted since the beginning of the pandemic, endangering the company's already tenuous existence.

    The same day, department store chain Lord & Taylor, which was acquired less than a year ago by Canada-based fashion-rental subscription service Le Tote Inc., also filed for bankruptcy.

    The Wall Street Journal writes that Tailored Brands "warned in late July that it had substantial doubt about its ability to continue as a going concern."  It also said it "would lay off 20% of its corporate staff, reduce its supply-chain footprint and close as many as 500 retail locations."

    Lord & Taylor, the Journal writes, "temporarily closed its 38 bricks-and-mortar locations in March but has continued to operate through online channels as restrictions on nonessential shopping went into effect during the coronavirus pandemic.  In court papers, the company said it would conduct going-out-of-business sales at the Lord & Taylor stores, anticipating a liquidation of the bricks-and-mortar footprint."

    KC's View:

    I can't comment on this any better than Willie Nelson…

    Published on: August 3, 2020

    Excellent piece in the New York Times  the other day in which writer Kashmir Hill decided to conduct an experiment - she worked to eliminate the influence and presence of Amazon, Apple, Facebook and Google from her personal and professional life.

    An excerpt:

    "To do that wasn’t easy. From my years writing about digital privacy, I knew these companies were in the background of many of our online interactions. I worked with a technologist named Dhruv Mehrotra, who designed a custom tool for me, a virtual private network that kept my devices from sending data to or receiving data from the tech giants by blocking the millions of internet addresses the companies controlled.

    "Then I blocked Amazon, Facebook, Google, Apple and Microsoft, one by one — and then all at once — over six weeks. Amazon and Google were the hardest companies to avoid by far.

    "Cutting Amazon from my life meant losing access to any site hosted by Amazon Web Services, the internet’s largest cloud provider. Many apps and a large portion of the internet use Amazon’s servers to host their digital content, and much of the digital world became inaccessible when I said goodbye to Amazon, including the Amazon Prime Video competitor Netflix."

    You can read the entire story here.

    Published on: August 3, 2020

    •  The New York Times writes this morning about how Nordstrom is using social media influencers to offer to consumers "a glimpse into pandemic-era retailing and the ways stores are trying to bring shoppers back in person … By hiring influencers to highlight safety measures, retailers, especially those that sell apparel and other discretionary goods, are trying to restore a sense of normalcy to activities like in-store shopping that were utterly banal six months ago but now may seem dangerous to many customers."

    Nordstrom's efforts in this area for the moment seem to be "unique to the New York flagship store, a colossus that opened its doors less than a year ago. The pandemic forced it to close in March, but it opened again on June 24. Mr. Subramanian said he anticipated that influencer marketing around safety would remain local or regional because of the unpredictable nature of the virus and the differing infection rates across the country.

    "Scott Meden, Nordstrom’s chief marketing officer, said in a statement that working with influencers was an important part of the retailer’s marketing program and that many of its customers look to them for fashion and lifestyle tips."

    •  Add Facebook to the list of technology companies that have no plans to bring employees back to the office anytime soon.  CEO Mark Zuckerberg said late last week that there is "currently no end in sight for when our teams here will be able to return to our offices."

    Published on: August 3, 2020

    •  Coca-Cola said last week that it will offer a new coffee-infused cola product next year in the US.

    According to the company, Coca-Cola will combine its flagship cola with Brazilian coffee, will come in three flavors - Dark Blend, Vanilla and Caramel - and will be sold in 12-ounce cans that contain 69 milligrams of caffeine per can.

    •  The Wall Street Journal reports that "fuel maker Marathon Petroleum Corp. said it has agreed to sell its gas stations to the owners of the 7-Eleven convenience store chain for $21 billion in the largest U.S. energy-related deal of the year.

    "The all-cash agreement with 7-Eleven Inc. comes less than a year after Marathon agreed to spin off its convenience-store chain, known as Speedway, under pressure from activist investors including Elliott Management Corp."

    The story quotes Ryuichi Isaka, president of Seven & I Holdings Co., the Tokyo-based parent of 7-Eleven, as saying it was "the chance of a lifetime."  Isaka said that "he saw convenience stores in the U.S. as the biggest growth driver for the company, whose department stores and supermarkets in Japan are struggling."

    Published on: August 3, 2020

    Wilford Brimley, the former ranch hand, wrangler and blacksmith who became Hollywood's prototypical cantankerous old coot, has passed away of a kidney ailment.  He was 85.

    Among his best-known films:  The China Syndrome, Absence of Malice, The Natural, The Firm, In & Out, and Cocoon.  He also was the spokesman for Quaker Oats for years, intoning in gruff tones that people should eat oatmeal because "it's the right thing to do."

    KC's View:

    There may have been commercial spokespeople who were as good and authentic as Brimley, but it is hard to think anyone who was better.

    It always has been kind of funny to me that when he did the original Cocoon, Brimley was just 50 years old … 15 years younger than I am now, and about two decades younger than co-stars who were playing his fellow retirees - 76-year-old Don Ameche, 75-year-old Jessica Tandy, 73-year-old Hume Cronyn, and 76-year-old Jack Gilford.

    In most of his roles, Brimley evoked a kind of curmudgeonly integrity - when he came onscreen, it was like shorthand … you knew who and what he was.  For me, the short scene that is one of his best is in Absence of Malice (as a matter of interest, he was 10 years younger than Paul Newman when they did this scene) … and you can see it here.

    Published on: August 3, 2020

    Regarding liability lawsuits that are being filed against companies accused to acting in bad faith when dealing with employees and coronavirus conditions, one MNB reader wrote:

    The legal community seems to be running amok in their desire to profit from COVID.  Car accidents are down as we’re driving less and staying / working from home.  COVID expertise is being discredited every day. Which creates the perfect situation for a “gotcha” at a time when businesses are trying hard to do the right thing by its employees and customers.  It doesn’t go unnoticed by me the legal community is acting now to sue for COVID while all of us are still learning about how to counter COVID and its affects.

    We’ve seen many stories on MNB and elsewhere showcasing employees willingness to take action when they feel their health is compromised. More companies have announced work from home policies good through at least 1H’21.

    This story got my attention, less because of Walmart. My HOA is worrying about the ambulance chasing portion of the legal community coming after our HOA (using COVID as its reason) because we have a swimming pool, jacuzzi and sauna (all of which are currently closed) but can be accessed despite fences, locks, big warning signs being well-placed. In short, our HOA is using best efforts to keep users away but the Attorneys are looking for the “gotcha”.

    To me, there’s no conflict, Kevin. We should have legislation for anyone wishing to sue anyone or any business for a COVID related infraction that they must prove beyond a shadow of doubt that the injured person occurred because of malicious and harmful intent.. This should apply to any business, of any size, in any state, no matter if you’re Walmart, one of the up-and-coming “good for you” suppliers within the MNB community - or a HoA.   

    We need proactive action from our Congress to guide the legal actions taken by the likes of Dewey, Cheatem and Howe surrounding COVID, to require proof of malicious and harmful intent. It doesn’t go far enough to protect Walmart and Tyson, both of whom have many Attorney’s. We need to protect all businesses (including HOA’s) to prevent attorney-driven insurance cost hikes. 

    On the same subject, from another reader:

    Just what we needed, a bunch of lawyers getting involved in this mess.  I also agree that employers who did nothing to minimize the COVID impact or made it worse by their actions/inactions deserve what ever happens to them.   

    BUT something needs to be done to: 1.) Avoid windfall income by law firms harvesting off the misery of others.  Yes, they deserve something for their efforts but some places will end up receiving more than their clients.  Class action lawsuit firms (aka, the one’s you see advertising on TV) deserve a special place in hell along with the employers who ignored common sense.  2.) Allow for some type of accommodation for those companies who tried their best but missed the mark.  There’s enough blame to go around for everyone since directives, advise, procedures, etc. all have changed many times over the last several months.  Don’t add to the list of companies that end up on the ‘also killed in the crash’ list simply because they couldn’t provide/do this week what was prohibited last week.

    Remember, insurance companies distribute money from their customers.  Payouts in this year come from income received next year.  Future rates will increase. 

    Regarding Amazon's plans to launch low-orbit satellites that will enable people with poor internet service to have access to broadband, MNB reader Mike Bach wrote:

    I find the story about Amazon providing satellite-based broadband service to remote areas of the US interesting on a couple of fronts.  This will be a direct competitor to Elon Musk’s Starlink.  SpaceX released a story on Saturday, indicating 700,000 individuals have expressed interest, which prompted SpaceX to ask regulators for as many as 5 million terminals. Since there are so few choices for internet providers in many parts of the US, many consumers will welcome choice.  As I write this to you, I’m in Vail, Colorado where the second internet choice is a DSL service. And, the bandwidth of #1 is consistently below promised rate, according to those that live here year round.

    I am keen to see how the 1934 Communications Act will impact how the FCC regulates bandwidth. And, pricing – most of us feel gouged by pricing of current internet services.  Will the Amazon and Starlink value proposition be solely price-based?

    This Amazon initiative feels a lot like what Dollar General did to solve the food oasis issues in many parts of the US.  The biggest difference being that $G created jobs in these food oasis whereas Amazon will most certainly kill jobs. I also find it interesting that Amazon now has a way to understand this shopper's needs.  It does make me wonder: Is Amazon a retail business or a logistics business? I realize both but which has priority?  If Space-net is an Amazon business then should Amazon also provide its own electricity? Water? HVAC services?