business news in context, analysis with attitude

Published on: October 2, 2020

The Irish are looking to save civilization - or at least a small part of it - yet again, as a court there has ruled that the bread that Subway makes isn't really bread - it has too much sugar to qualify under Ireland's rules.  Subway's response is that bread is bread … but of course that's not true … and KC spins this into a metaphor about aspiration and differentiation.

Published on: October 2, 2020

National Retail Federation (NRF) Chief Economist Jack Kleinhenz said yesterday that "forecasting 2020 holiday sales is like assembling a jigsaw puzzle without all the pieces."

“Completing a puzzle is highly probable given patience, having all the pieces and having the picture on the box to guide assembly,” Kleinhenz said. “But it’s not the same when attempting to fit pieces of the economy together in today’s environment. Many of the pieces are missing … I am cautiously optimistic about the fourth quarter in terms of the economy and consumer spending, but the outlook is clouded with uncertainty pivoting on COVID-19 infection rates. The recession appears to be behind us and the re-opening of the economy over the past several months has created momentum that should carry through the fourth quarter. The test is whether consumer spending will be sustained amid wildcard puzzle pieces including policy surprises, the election and a resurgent virus."

Published on: October 2, 2020

The Wall Street Journal this morning has an interesting story about a shift in consumer behavior created by the pandemic - binge reading, which while not quite at the scale of binge watching TV series on Netflix, has become a real trend.

"In August 2020, year-over-year sales of print books in the U.S. were up 13%, according to NPD BookScan, which tracks book sales across the US," the Journal writes.  "Publishers also report a notable increase in purchases of e-books, as well as all books about politics or related to civil rights, racism and diversity."

For MNB purposes, of course, the lesson is in how retailers responded:  "Independent booksellers, as well as publishers and authors, deserve considerable credit for fueling the page-turning trend. When statewide lockdowns shut the doors on many bricks-and-mortar bookshops, and publishers could no longer promote new releases via in-person readings, the book business rewrote the rules of engagement."

Some offered free shipping and delivery, as well as contactless pickup services.  Some did readings and book clubs via Zoom.

Here's one cool idea:  "In Evanston, Ill, Page 1 Books established a subscription service, where customers fill out an online profile, noting their literary tastes, and then receive a package each month, a mix of hardcovers and paperbacks."

Published on: October 2, 2020

Good Food Holdings, the US company owned by South Korean retailer Emart that operates  a group of West Coast specialty and natural food retailers, has named Neil Stern, a senior partner at  consulting firm McMillanDoolittle, to be its new CEO.

Stern succeeds Managing Director Matt Turnbull, who is leaving the company.

The chains owned by Good Food Holdings include Southern California-based Bristol Farms and Lazy Acres, Portland, Oregon-based New Seasons Market and New Leaf Community Markets, and Seattle-based Metropolitan Market.

Stern has served on Good Food's boards for two years.

Published on: October 2, 2020

From the Wall Street Journal:

"A key measure of demand for big warehouses soared 51% in the first half of 2020 as the pandemic-driven surge in online sales sent companies scrambling for space to store and deliver goods to locked-down consumers.

"The rush toward distribution centers was most pronounced at the largest end of the market, real-estate brokerage firm Colliers International Group Inc. said in a report released Thursday, as Amazon. com Inc. and other e-commerce and logistics providers accelerated a push toward sprawling facilities to process, package and ship digital orders … Overall, the Colliers report said the net change in occupied big-box space—known as net absorption—rose by 51% in the first half of this year in the markets covered from the same period in 2019, to nearly 79.8 million square feet."

Amazon is defined in the story as being at the head of the pack:  "The online behemoth leased an estimated 26.9 million square feet in the first half of the year, and is expected to occupy nearly 98 million square feet across the U.S. in 2020 alone, the report said."

Published on: October 2, 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 US, there now have been 7,494,671 confirmed cases of the Covid-19 coronavirus, with 212,660 deaths and 4,736,621 reported recoveries.

Globally, there have been 34,519,817 confirmed coronavirus cases, resulting in 1,028,230 fatalities and 25,691,112 reported recoveries.

•  Of all those cases, there was one that got all the attention overnight - yesterday President Donald Trump was diagnosed as having contracted Covid-19. along with First Lady Melania Trump.  Diagnosed earlier, and possibly the source of the infection, was White House aide Hope Hicks, who traveled with the President this week.

•  From the New York Times this morning:

"For months, public health experts have been eagerly watching the companies developing spit tests for the coronavirus that could be used at home, producing results in a matter of minutes.

If these rapid saliva tests worked, as many news articles have pointed out, they could greatly expand the number of people getting tested. Some experts have even said they could perform as well as a vaccine in curbing the spread of the coronavirus and paving a path back to normalcy.

"But so far, the technology is not panning out as some have hoped.

"E25Bio and OraSure, two companies pursuing rapid at-home coronavirus tests, have abandoned efforts to use saliva in their products. Their tests, which detect pieces of coronavirus proteins called antigens, will for now rely on shallow nose swabs instead.

"'If I was placing a bet - which I am, because I’m leading an antigen-based testing company - I would say it’s going to be very difficult for antigen-based testing to work on saliva samples,' said Bobby Brooke Herrera, an E25Bio founder and its chief executive. The notion that the virus sets up shop in the mouth and produces enough antigen to be picked up by today’s technology, he said, 'is far-fetched'."

•  NBC News writes that "despite Florida Gov. Ron DeSantis’ rollback of coronavirus restrictions, Publix says it is not making any changes to its current mask policy.

"The mask requirement has been in place at Publix since July 21. The grocery giant announced last month it was getting rid of its one-way aisle policy."

The story notes that "DeSantis lifted all restrictions last week on restaurants and other businesses in Florida, and banned local fines against people who refuse to wear masks as he seeks to reopen the state’s economy despite the spread of the coronavirus."

Good for Publix.  Taking away mask mandates right now is way premature, and it is entirely fair for a retailer to require them, in much the same way that it can require pants and shoes.

•  The Washington Post reports that Amazon said yesterday that "nearly 20,000 of its U.S. employees had tested positive, or had been presumed positive, for the coronavirus since the pandemic started spreading through the country this year … Amazon said in a blog that the number of employees who have had the illness includes its workers at its grocery store chain Whole Foods Market. In total, 19,816 employees have had covid-19 between March 1 and Sept. 19, it said, or about 1.44 percent of the 1,372,000 front-line workers employed by Amazon during that period."

The Post notes that Amazon "has faced harsh criticism this year as hundreds of workers and critics have said it hasn’t done enough to keep employees safe as they work in its warehouses amid a surge in demand to send items to shoppers across the country."

•  The Washington Post has a story about how, while "corporate America has long been defined by physical offices," in just a few weeks earlier this year "the pandemic upended that as thousands of companies mandated their employees work from home. What many thought would be a temporary workaround is now a mass experiment with no end in sight, as many companies await a vaccine or other developments to ensure workers’ safety.

"While many companies are anxious about the new reality, fearful of reopening and worried about the loss of workplace connection, some employers have embraced it — even going so far as making remote work permanent. Outdoor apparel company REI, Facebook and Ottawa-based Shopify have all announced some measures making work from home the new norm.

"Twitter, the first major U.S. company to make a public announcement in May about its permanent work-from-home plans, has a big head start in identifying the pitfalls and advantages of work from home.

"For the last two years, Twitter has been quietly dismantling its office culture, making changes that resulted in blessing employees … who asked to relocate - whether it was Hawaii, rural Ireland or back home in a cheaper state. However complicated, the official policy on employee relocation requests was 'get to yes'."

In fact, the Post writes, Twitter is "preparing for a future when the company anticipates half of its employees will permanently work from home. (Prior to the pandemic, it was only 3%.)"

One of the most important things to note about Twitter's decision is that it started the process several years before the pandemic, after founder Jack Dorsey had a particularly productive day working from home and started the process of considering the implications of a "distributed workforce."  To me, the real lesson here is not about working from home, but rather about being willing to consider new possibilities even when you don't have to.

•  Swedish retailer H&M announced that it will permanently close 250 of its 5,000 stores, saying that the effects of the pandemic has created an environment in which it makes sense to consolidate stores and focus more on online sales.

•  The National Football League announced that the Tennessee Titans game this week against the Pittsburgh Steelers has been indefinitely postponed because of a growing number of coronavirus cases on the Titans team and staff.  The count is now 11, and the NFL has banned any in-persona activities for ther team until further notice.

The NFL had hoped to allow the game to be played on Monday or Tuesday.

The Minnesota Vikings, who played the Titans last weekend, have not had any cases of Covid-19.

Published on: October 2, 2020

•  Digital meal planning service eMeals yesterday announced "the expansion of its online grocery coverage to include integrations with Albertsons and Safeway … subscribers can now send their weekly eMeals-generated shopping lists directly to Albertsons and Safeway stores."

The announcement notes that eMeals also is working with "Walmart, Kroger, Amazon and all the retailers served by Instacart and Shipt for curbside pickup or delivery."

Program benefits include "curated meals offering weekly variety and easy preparation … a choice of 15 food-style meal plans such as Quick and Healthy, Keto, Clean Eating, Low Calorie, Low Carb, Kid Friendly and Vegetarian … (and) the ability to choose meals from any of the weekly suggestions or from past recipe favorites."

Published on: October 2, 2020

With brief, occasional, italicized and sometimes gratuitous commentary…

•  Politico reports that "US layoffs remain elevated" as some 837,000 people filed for unemployment benefits last week.  While the number is a slight decline from a week earlier, the story says, it is "evidence that the economy is struggling to sustain a tentative recovery that began this summer."  It "suggests that companies are still cutting historically high numbers of jobs, though the weekly numbers have become less reliable as states have increased their efforts to root out fraudulent claims and process earlier applications that have piled up."

At the same time, Politico reports, "The nation’s unemployment rate fell to 7.9 percent in September, the Labor Department said Friday in its final snapshot of the job market before Election Day.  Employers added 661,000 jobs during the month, a further slowdown in job growth that still leaves the economy more than 10 million jobs short of its pre-coronavirus levels."

•  The Center for Growing Talent (CGT) yesterday announced that its annual Women's Catalyst Award - recognizing individuals who have a significant impact supporting women in the industry - is being renamed for the late Frieda Rapoport Caplan, founder of Frieda's Specialty Produce.

The award is given each year at the Women’s Fresh Perspectives Leadership Breakfast which takes place during the Produce Marketing Association (PMA) Fresh Summit. Last October, CGT said, "Frieda Rapoport Caplan accepted the award in recognition of her own work mentoring and elevating women in the industry.  She spoke to a sold-out breakfast crowd who hung on her every word as she addressed the importance of civic participation for young people, and more."

Caplan passed at the age of 96 earlier this year.

One of the things that I am pleased about this year is that back on February 22 - which seems like a decade ago - the Caplan family was able to pull together an in-person celebration of Frieda's life and impact on everyone she touched.  Her influence on all of us just required a lot of people being able to get together in a room an d talk and hug and share … and, as fate will have it, that was pretty much the last weekend when people were able to do that.

•  Iowa-based Casey's General Store announced that it is changing its name and logo, and becoming, simply, Casey's.

The Des Moines Register reports that the new, streamlined logo reflects the changes that have taken place "in the guest experience," as the company "has expanded to become the fourth-largest convenience store operator in the nation. In the last two years, Casey's has launched a smart phone app and online rewards program, as well as curbside and delivery options."

Plus, the company said, there was a basic reality - in 2020, nobody knew was a "general store" was.

Published on: October 2, 2020

Michael Sansolo had a column earlier this week in which he wrote about effective emails he'd received from Panera and Nordstrom.  This prompted one MNB reader to write:

I want to comment on the emails received from the two companies cited in the piece.  Emails are one thing but how about true value instead!  We started an online ordering system about 3 months ago and we decided that when a customer reached 10 orders we'd give them a coupon for free delivery as a gift for their loyalty.  And recently we decided that when we have a first time user of our system we would provide them with a swag bag of goodies to thank them for giving us a try.  While emails are fine and do signify excellent customer service, there is a different value proposition to explore, which includes real value, worth dollars, and to us that makes much more (cents).  

I think Michael would agree with all your observations.

Yesterday I wrote about how Portland, Oregon - which has had a tough year - will be the locale for the next season of Bravo's "Top Chef" … which made me happy.

MNB reader Annie Hoy wrote:

As usual, the news about "Top Chef" sucked me in and then I had to read everything. Down here in southern Oregon (Ashland) we would be very excited if the chefs could take a tour of our local bounty of stone fruit, organic farms and amazing wineries...all just a 5-30 min. drive from here.

Now that I know you love "Top Chef" and also appreciate sports, have to listened to the podcast "Pack Your Knives" hosted by NBA writers Kevin Arnovitz and Tom Haberstroh? You must listen. They are currently rewatching old seasons so we are too and after each one we tune in to the podcast. They break down the show just like it is a sporting event, which is both hilarious and insightful. Check it out!"

I will.  Thanks.

Another MNB reader wrote:

It is truly great news that Top Chef is saluting the excellent cuisine that PDX restaurants offer. The sad news is that the pandemic, the ongoing protests, and  rioting in downtown PDX, is causing people to not go to downtown restaurants. Unfortunately, we are losing several downtown restaurants, as their business has gone down the tubes, and are forced to close their doors. Sadly, two of the unintended consequences are due to the protests, because people just do not feel safe, and the pandemic does not let people be close to enjoy the great dining experiences PDX restaurants have offered their clients.

And, regarding the new robots being used by Schnuck Markets, one MNB reader wrote:

This is a great invention to help streamline out of stocks/pricing errors. How many times are sales lost out on or time spent at the register because pricing is not right. This should give more time for employees to engage with customers while stocking the shelves and more importantly always having full shelves.

Published on: October 2, 2020

In the Major League baseball Wild Card series…

•  In the third and deciding game of the American League Wild Card series, the Oakland Athletics defeated the Chicago White Sox 6-4 and now will move on to face the Houston Astros in the AL Divisional Series.

Over in the National League…

•  The Los Angeles Dodgers beat the Milwaukee Brewers 3-0, to win their best-of-three series 2-0,

•  The Atlanta Braves defeated the Cincinnati Reds 5-0, sweeping their Wild Card series 2-0 and moving on to the NL Divisional Series.

•  The San Diego Padres beat the St. Louis Cardinals 11-9 to tie their best-of-three series at 1-1.

•  The Chicago Cubs-Miami Marlins series was postponed because of weather.  Miami retains its 1-0 series lead.

In Thursday Night Football, the Denver Broncos defeated the NY Jets 37-28.

Published on: October 2, 2020

There is a terrific piece on the Esquire website talking about how, during the last time the country was dealing with social unrest and high anxieties, one of the positives that came out of it was some terrific movies that reflected depression, disillusionment and some level of paranoia.

What's interesting about the piece is that two of the films mentioned are a pair of movies that I've watched recently - I saw them as sort of comfort films, but maybe they were tapping into some sort of inner angst and I wasn't even aware of it.

They're both thrillers - Three Days of the Condor and The Parallax View - and they are absolutely worth revisiting.

Three Days of the Condor, directed by the great Sydney Pollack, stars Robert Redford (just before he made All The President's Men, which also is a pretty good example of political paranoia filmmaking) as a low-level CIA analyst, Joe Turner, who returns from lunch one day to find the entire office murdered, and quickly discovers that he is neck-deep in a government conspiracy and only accidentally has been left alive.  The supporting cast is great - Faye Dunaway, Cliff Robertson, Max von Sydow, and John Houseman.  Condor, if you haven't seen it, is worth a screening - it'll leave you disquieted.

Though maybe not as disquieted as The Parallax View.  Warren Beatty plays Joe Frady, a smalltime newspaper reporter who is on the scene when a presidential candidate is murdered atop the Seattle Space Needle.  Then, he discovers that one by one, all the witnesses are dying, and Frady begins to investigate, eventually going undercover to infiltrate a secretive organization that he thinks may be behind the assassination.  Once again, there's a great supporting cast - Hume Cronyn, William Daniels, Paula Prentiss, Kenneth Mars.  And director Alan J. Pakula - who would next direct All The President's Men - bathes the entire movie in deep and abiding paranoia.

Perfect movies for the seventies.  And maybe perfect for 2020.

Speaking of older movies … my eldest son, a huge movie buff, called the other night to tell me that he'd just seen The Natural for the first time, and loved it.  I told him I liked it, but am less a fan of it than I am of Bull Durham and Field of Dreams, which in my book are tied for number one sports movie.

Well, he'd never seen Bull Durham either - clearly I was not a very good father - so he went and watched that, and loved it.  The great thing was that it generated a discussion about best sports movies, which I suspect will be ongoing.   (Hardly the first time I've had this discussion, and it is always worth reconsidering how they should be ordered, though I suspect that most of my top 10 will remain the same:  after Bull Durham and Field of Dreams they will include Raging Bull, Tin Cup, North Dallas Forty, and Hoosiers.)

I have a couple of excellent red wines to recommend to you this week.

First up, the 2018 Rotation Red Blend from California, which is what I think of as a terrific pizza-hamburger wine - not expensive, versatile, and eminently drinkable.

The other is the 2015 Carlton Cellars Estate Pinot Noir, which is a wonderful example of a Willamette Valley pinot, balanced and distinctive, and from one of my favorite Oregon wineries.

That's it for this week.  I'll see you Monday.

Have a great weekend … stay safe … be healthy.

Sláinte!