business news in context, analysis with attitude

Published on: October 15, 2020

KC went to the mailbox and found a pile of catalogs, almost all of it irrelevant to his life.  Not only did it make him cranky - like, Andy Rooney-style cranky - but it drove home a marketing lesson.

Published on: October 15, 2020

Albertsons, through its Acme Markets division on the east coast, has won the bidding process to acquire Kings Food Markets and Balducci's Food Lover's Market for $96.4 million, giving it 27 fresh food-centric stores in the mid-Atlantic region.

KB Holdings, owner of Kings and Balducci's, filed for bankruptcy several months ago and put the company on the sales block.

The deal is subject to regulatory approvals.  The announcement says that "both Kings Food Markets and Balducci's Food Lover's Market will continue to serve their communities under their own banners through and after the closing of the sale."

Albertsons already operates on the east coast under banners that include Safeway, Acme, and Star Markets.

BoiseDev quotes Albertsons Companies’ Mid-Atlantic President Jim Perkins as saying, "Our company has a history of managing small, differentiated chains that offer an elevated experience, like Andronicos and Haggens in the western U.S.  When we leverage their team’s expertise and continue to deliver what their customers want, these stores can thrive. We are excited to add these two premium, gourmet banners to our east coast operations.”

Scott Moses of  PJ Solomon served as investment banker to KB US Holdings.

Published on: October 15, 2020

The Seattle Times reports that "Starbucks plans to significantly boost racial diversity among its workforce — and it’s making that goal a factor in the pay of its senior executives … Starting in 2021, the compensation of … senior executives will be tied to the company’s success at meeting those goals, although the company declined to offer details."

According to the story, "By 2025, the Seattle coffee giant wants people of color represented in at least 30% of roles in corporate operations and 40% of retail and manufacturing roles, CEO Kevin Johnson told employees Wednesday. The goals, part of an ongoing effort to encourage diversity, reflect the company’s obligation 'to build bridges and create environments where all are welcome,' Johnson said."

The Times writes, "Currently, 18.5% of its 43 top executives — senior vice-presidents and higher — are people of color, the company said. In its retail operations, people of color make up 23.5% of regional vice presidents, 27.1% of regional directors, and 34.9% of store managers.  By contrast, Starbucks has already reached its diversity goals in several categories. These include vice presidents (31.6% of whom are people of color) shift supervisors (44.3%) and baristas (48.5%)."

Published on: October 15, 2020

The New York Times reports that the  American Booksellers Association (ABA) has developed a campaign for its members that has signs appearing in bookstore windows saying things like "Buy books from people who want to sell books, not colonize the moon," "Amazon, please leave the dystopia to Orwell," and "If you want Amazon to be the world’s only retailer, keep shopping there."

The message is supposed to be stark:  if people don't patronize independent bookstores, they will not survive.

ABA says that the stakes are high, because "more than one independent bookstore has closed each week since the pandemic began. Many of those still standing are staring down the crucial holiday season and seeing a toxic mix of higher expenses, lower sales and enormous uncertainty."

The Times goes on:

"Even though book sales have been a bright spot in an exceedingly grim national economy — they rose more than 6 percent so far this year compared with last year, according to NPD BookScan — most of those purchases are not going through independent stores. Surging interest in specific categories, from educational books to titles on race and antiracism, continues to boost some booksellers but has dropped off for others.

"Still, local independent stores have hustled and reinvented themselves during the pandemic. Mailing books to customers, which used to be a minuscule revenue stream for most shops, can now be more than half of a store’s income, or virtually all of it for places that are not yet open for in-person shopping. Curbside pickup has become commonplace."

Published on: October 15, 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, there now have been 8,154,506 confirmed cases of the Covid-19 coronavirus, resulting in 221,888 deaths and 5,279,980 reported recoveries.

Globally, there have been 38,798,712 confirmed coronavirus cases, with 1,097,705 fatalities and 29,154,587 reported recoveries.  (Source.)

•  From the Wall Street Journal:

"The seven-day moving average of new U.S. infections, which smooths out day-to-day fluctuations, was 51,038 as of Tuesday, the highest since mid-August. The 14-day average stood at 47,498. When the seven-day average is higher than the 14-day average, as it has been since Oct. 5, it suggests cases are rising.

"While circumstances differ locally, 44 states and Washington, D.C., have a seven-day average of new cases greater than their 14-day average, according to a Wall Street Journal analysis of Johns Hopkins figures. That is the most states at that level since mid-July.

"The seven-day average of total U.S. test results reported has also reached new highs in recent weeks while the percent coming back positive has risen to an average of 5.1% over the last seven days compared with around 4.6% at the beginning of the month. This indicates more testing is needed to detect more individuals with undiagnosed infections."

•  The Wall Street Journal reports on a new WSJ/NBC News poll saying that "about 70% of registered voters surveyed said they would take a Covid-19 vaccine, although many want to wait until it has been available for a while to see if there are major problems or side effects … The survey found that 20% of respondents said they would take a vaccine as soon as one becomes available, while about half the respondents wanted to wait until they learned more information about the shot."

The story goes on:  "Together, the percentages of people who wouldn’t want to get vaccinated totaled 27%, according to the poll. Other recent polls have also found around a third of people surveyed opposed to getting vaccinated.  If too many people refuse to get the shots, businesses, schools and other establishments won’t be able to safely reopen, according to health authorities, because vaccines’ effectiveness hinges not only on how well each works in an individual but also on how widely they are used."

•  From Fast Company:

"The wholesale disruption of COVID-19 is taking a toll on the real estate market. A new survey suggests that offices will remain under capacity for months, retail and hospitality will continue to struggle, and, despite some increases in single-family home values, real estate across the board will see its value fall around 10% next year."

According to the story, "The hardest-hit sectors are the retail and hospitality sectors, with lockdowns and travel bans keeping customers away and threatening the viability of future investments. More than a third of respondents recommend that investors get out of main street retail, and more than two-thirds say to sell stakes in regional malls. Nearly all types of retail are seen by the majority of respondents as overpriced."

The story is based on findings from “Emerging Trends in Real Estate 2021,” a new report from the Urban Land Institute and PwC.

•  The Dallas Morning News reports that "Dallas County officials on Wednesday raised the county’s coronavirus perceived risk level back to red after lowering it six weeks ago to orange.

"That means Dallas County officials want you to think twice before getting a haircut, eating out or heading to the mall as new COVID-19 cases and hospitalizations begin to climb."

The story notes that "life in North Texas post Labor Day has picked up substantially.  While masks and temperature checks at doors are the norm, traffic has increased and shopping centers, restaurants, gyms, movie theaters, museums and libraries are almost back in full swing as they are now allowed to operate at 75% capacity."

•  The Financial Times reports that in the UK, "Londoners are to be banned from socialising with other households indoors from midnight on Friday evening in a bid to contain the spread of coronavirus in the capital … Sadiq Khan, the Labour mayor of London, told a session of the London Assembly on Thursday that London was at a 'critical moment' in its fight against coronavirus."

The new restrictions, which are defined as Tier 2, mean that "Londoners would not be able to meet anyone outside their household or support bubble in any indoor setting — whether private homes or pubs and restaurants. Residents would also be encouraged to cut the number of journeys they make and avoid public transport as much as possible."

•  Axios reports that "French President Emmanuel Macron on Wednesday declared a state of health emergency and instated a curfew on some of the regions that have been hardest hit by the coronavirus … The region surrounding Paris along with cities including Grenoble, Lille, Lyon, Aix-Marseille, Montpellier, Rouen, Saint Etienne and Toulouse will have a 9 p.m. to 6 a.m. curfew for at least a month, starting this Saturday.

People will be allowed to be out during curfew so long as they have a good reason.:"

The story notes that "a number of European countries have reimposed lockdown measures, as an uptick in COVID-19 cases has eroded the continent's earlier progress in containing the virus. Macron described the situation as a 'second wave'."

•  From the Wall Street Journal:

"A decline in mammograms and other screening procedures after the coronavirus pandemic struck is leading to missed and delayed cancer diagnoses, according to data from insurance claims, lab orders, Medicare billings and oncology-practice records, an emerging pattern that is alarming oncologists.

"Hundreds of thousands of cancer screenings were deferred after worries about Covid-19 shut down much of the U.S. health-care system starting this spring. Because many cancers can advance rapidly, months without detection could mean fewer treatment options and worse outcomes, including more deaths."

An example cited in the story:  "Cancer-care provider 21st Century Oncology, which has 300 locations around the U.S., said about 18% of its newly diagnosed breast-cancer patients this year through August had an advanced stage of the disease, compared with 12% in all of 2019. From 2015 to 2019, the share of its breast-cancer cases detected at an advanced stage was between 11% and 12.5%. The provider has also seen a higher proportion of its lung-cancer patients arriving with a more advanced stage of the disease this year."

•  From ESPN:

"Alabama football coach Nick Saban tested positive for COVID-19 on Wednesday, and he is self-isolating at home while continuing to oversee his team's practices via Zoom.

"Athletic director Greg Byrne also tested positive on Wednesday."

ESPN also reports that "Saturday's game between No. 10 Florida and LSU … has been postponed after the Gators saw a surge in positive COVID-19 tests this week, it was announced Wednesday.  The game has tentatively been rescheduled for the SEC's built-in bye week on Dec. 12, which is the week before the SEC championship."

Published on: October 15, 2020

•  Bloomberg reports that employees at an Amazon warehouse on Staten Island in New York have gone to court to accuse the company of "recklessly reinstated dangerous warehouse productivity quotas despite telling a judge that it was suspending them during the pandemic."  The workers say that the new quotas are tied to its Prime Day promotions this week, which put a lot of pressure on its distribution system.

"'Amazon has not been honest and forthcoming,' employees at a warehouse in Staten Island, New York, told the judge handling their lawsuit, which contends the company’s 'oppressive and dangerous' policies violated public-nuisance law and exacerbated COVID-19 hazards."

The story says that "Amazon acknowledged reinstating performance quotas and said workers still have adequate time to wash their hands and take other precautions."

•  TechCrunch reports that "Amazon has quietly launched a new augmented reality application that works with QR codes on the company’s shipping boxes to create 'interactive, shareable' AR experiences. Called simply 'Amazon Augmented Reality,' the retailer describes the app as a 'fun way to reuse your Amazon boxes until you’re ready to drop them in the recycling bin'."

According to the story, "different Amazon boxes will offer unique activities for the AR experience. For example, one screenshot shows someone drawing the face on a pre-printed white pumpkin to turn it into a jack-o-lantern. When they then scan the QR code, the pumpkin jumps out as an AR object. Another screenshot shows an AR pumpkin and bat wings over top an image of a dog. And one shows the Amazon box turning into a little blue AR car when the QR code is scanned."

The mobile app apparently "offers no other functionality if not used alongside an Amazon box that supports the new QR codes."

I'm having enough trouble dealing with actual reality these days.  Augmented reality may be more than I can handle.

•  The Wall Street Journal reports that Amazon "has struck a deal with the National Football League to stream a playoff game this season, people familiar with the matter said.

"The agreement, which the league disclosed to team owners Wednesday during a video meeting, deepens the relationship between the nation’s premier sport and the online retail and entertainment giant.

"Amazon already streams 11 Thursday Night Football games annually and has been looking to carry more football on its Amazon Prime Video platform. Amazon renewed its Thursday Night Football deal earlier this year for three seasons in a pact worth at least $75 million annually, according to an industry executive with knowledge of NFL media rights."

Terms for the playoff game deal were not disclosed.

Published on: October 15, 2020

•  From the Wall Street Journal this morning:

"The number of new applications for unemployment benefits remained above pre-pandemic highs last week, as persistent layoffs hold back the economic recovery.

"Claims rose to 898,000 last week, the Labor Department reported Thursday, the highest level since late August and holding above the pre-pandemic high point of 695,000. After steadily declining from a peak of near 7 million in March, claims have clocked in between 800,000 and 900,000 for more than a month as companies readjust their head counts."

The story goes on:  "The economy, more broadly, is flashing signs of slowdown. Monthly job gains have cooled in recent months, as has growth in job postings and consumer spending. More workers are reporting their layoffs are permanent."

•  In Maine, a story from the Portland Press Herald about how Ahold Delhaize-owned Hannaford "blames technology issues for failure to report pizza dough tampering.

"But the grocery chain did not explain exactly what went wrong in August when it failed to address reports that someone had tampered with fresh doughs sold at its Sanford store."

According to the story, "Reports of sharp metal in Portland Pie Co. brand pizza dough at Hannaford’s Sanford store in August weren’t revealed by police until Tuesday, more than a week after nearly identical incidents at the Saco store triggered a recall and a police investigation … The company apologized to consumers in a written statement issued Wednesday morning citing the technical problem. Hannaford, however, would not fully explain what went wrong with its internal system for tracking and acting on consumer product safety problems or respond to requests for more information."

A man who worked for Portland Pie Co. and described as disgruntled has been charged in the case.

•  The Wall Street Journal reports that "Brazil’s J&F Investimentos, which controls the world’s largest meatpacker, JBS SA, put an end to a long-running legal dispute in the U.S. over bribes it paid in Brazil, agreeing Wednesday to pay $128 million to settle the case.

"J&F admitted in 2017 to paying about $150 million in bribes to Brazilian politicians to secure cheap government funding to fuel one of the most ambitious global acquisition sprees in Brazilian corporate history. The affair landed its two major controllers, the billionaire brothers Joesley and Wesley Batista, in jail for several months.

"J&F Investimentos, in a federal court in New York on Wednesday, pleaded guilty to violating the U.S. Foreign Corrupt Practices Act."

Published on: October 15, 2020

With brief, occasional, italicized and sometimes gratuitous commentary…

•  C&S Wholesale Grocers announced that Bob Palmer, the company's former executive vice president and chief procurement officer, is ending his retirement to come back as the company's new CEO.

He succeeds Mike Duffy, who has been CEO of C&S since January 2018.  While not commenting on the reasons for the change, C&S did say, "We want to thank Mike for his contributions and wish him success in his future endeavors."

Seems clear that C&S was looking for someone with a better appreciation for the retail environment, and Palmer brings that, along with a real understanding of the C&S culture, to the table.  C&S has lost some business of late, and Palmer probably is better equipped to stanch the bleeding.

Published on: October 15, 2020

The other day, we posted an email from an MNB reader that read:

This is why we have to be skeptical of those in the KNOW. We dont know. ITS Ok for people to say they dont know.. But dont tell us they know. Lets get some balanced journalism. Most Americans are sick of being told what NOT TO DO. And if you look on the CDC website, overall more Americans died last year than this year. IN AGGREGATE.. Why would you mention that.. it is not draconian enough. Fear sells. Like most Americans - we are sick of it.

I had a long response to that, but here's one piece of it:

“It may in fact be that more people died in the US last year in aggregate than have died so far in the US this year.  But more than 200,000 people have died of this disease this year, and it is projected that more than 300,000 will have died from Covid-19 before the end of 2020.   If you want to argue that making this statement, and arguing that people should wear masks all the time and be careful about assembling in large groups, especially indoors, is selling fear, well, there's probably not much I can say to persuade you otherwise.”

Another MNB reader challenged me on this:

What we’re told is hospitals receive greater funding for covid related cases and are therefore incented to mark cases accordingly.  But that doesn’t mean they died of covid.  Your statement (and those made by so many) should read, in my opinion, more than 200,000 people who have died had covid, not “have died of this disease” or “will have died from Covid-19” because we really don’t know precisely what caused all the deaths.  My concern or question is how many people had covid but died from other complications (cancer, heart attack, pneumonia, diabetes, etc.) 

I think that’s the point your reader was trying to make in citing the total number of deaths last year vs. this year … too many causes are being lumped together.  In my opinion, this is probably the greatest unknown around this pandemic … it seems we’re able to determine through testing how many have covid (far fewer than H1N1) but unfortunately it seems we really have no idea how many have died from it.

My feeling is that if Covid-19 exacerbated an existing condition and caused a death, then I think it is fair to blame it on the coronavirus.

I suppose we can parse the numbers any way we want to create doubt.  I choose not to.  I also choose to believe that the vast number of medical professionals are being honest in their communications and estimations, and not goosing the numbers to make more money.

On another subject, MNB reader Shelley des Islets wrote:

In response to the piece about putting black employees in charge of diversity efforts whether they have any expertise or not in that work, you wrote (in part):

“I have to be honest.  I never thought about this issue from this perspective … it never occurred to me that asking the only Black person in the room to work on diversity issues could be seen by some as a kind of tokenism.

“I also have to be honest about something else.  Other than working assiduously to make sure that there isn't one Black person in the room, I'm not exactly sure what the best approach is for companies to take.  Would someone who looks like me have any credibility on this issue?”

First, thanks for owning your relationship to the perspective—it’s important for those of us who identify as white to share when a perspective is a new one.  It helps also to model taking in new information and allowing it to shift our perspectives accordingly.

To your second point, though, if a company were to decide to shift their focus or their production in a way that they had not done before, who would they engage to lead it?  Someone who has some background in that focus area or with that production activity, who may or may not be currently on staff.  Rather than assigning the current BIPOC (Black, Indigenous, People of Color) employees to lead diversity efforts, hire in someone who does have expertise in the field.  They may certainly reach out to current BIPOC employees for their perspectives and experience with the company to understand the current context. 

There is also a benefit to having someone ‘who looks like’ you and me lead the learning efforts, especially in companies where the vast majority of people who will be accessing the information and making use of new ideas will also be white people.

Though it seems counterintuitive, it can be at times easier to access some of the sticking points around change when it is someone from within one’s perceived group, at least in the early stages of moving toward greater understanding of institutionalized racism and the issues in a given company.  I have heard from a few black leaders and activists that there is real fatigue around educating white people about racism.  I see it as our failing, and our obligation to address.

From another reader:

As a manager for a Forbes 500 US firm that has been recognized for its efforts in diversity and inclusion and does lots of ongoing training in this area, I can’t help but think of this NYT story as yet another example of managers who are exhibiting unconscious bias and making assumptions about others as a whole.   Being a white, Anglo-Saxon Protestant person in a position of authority, I would need to simply ask the candidate I am considering for assistance with our firm’s diversity issues whether or not this activity is something that they would be interested in taking part in, rather than assuming that it would be something that they would want to do simply because of their genetic heritage or the color of their skin. 

Early in my career in the grocery business, I spent two days in an “urban potential seminar” sponsored by my employer that was led by the Rev. C.T. Vivian,  a field general and civil rights organizer for Martin Luther King.   Reverend Vivian certainly impressed upon us during that seminar that I could never begin to understand what it meant to grow up and live as a Black person in the US.   It would be an understatement to say that those two days left a lasting impression on me and shaped me greatly as a person.   Reverend Vivian passed away back in June of this year at the age of 95, having done more over his long life to speak up and stand up for civil rights over his lifetime than anyone else I know.  Even today, I could imagine hearing him with his firm but soft-spoken voice saying, “all you have to do is ask.”    

MNB reader Sandy Voit wrote in about Michael Sansolo's column this week:

Just a quick comment on Michael's column this morning, to say that food co-ops are leaders in this area as they usually have a triple bottom line to reflect that profit is not the sole determinant of success, but that social and environmental issues are nearly as important. (Yes, there is no SER without profit...) At nearly every food coop I have visited (more than 4 dozen so far), educating members/shoppers is integrally important. When LED bulbs are swapped for traditional bulbs, or more efficient refrigerant is used, or skylights are created over the produce area, etc., you better believe that we let our members/shoppers know - and why we made these changes. Our members/shoppers appreciate our efforts and expect us to do the right thing. I am hopeful that conventional grocers also see the benefits of these changes, and not just as economic savings... The same is true for supporting sustainable agriculture and aquaculture, and treating staff well by paying a living wage and providing benefits, providing farmers and vendors with prices that allow them to remain profitable, and in giving back to the community...

Got more email about the beer and crumb cake exchanges here yesterday.

MNB reader Howard Schneider wrote:

Thanks for the memories of the great old beer commercials. It reminds me about a long-ago campaign Budweiser used to run: Pick-a-Pair. Everyone knows, “lather, rinse, repeat” as one of the greatest marketing ploys of all time. Bud did something similar, in ads hosted by spokesdrinker Ed McMahon (and a simple jingle: “Pick a pair of sixpacks, buy Bud!”). The message was, “It’s Pick-a-Pair time, so be sure to pick up two sixpacks next time you shop…” No reason to get two, no promotional pricing, no tie to a sports event; just: buy two. As a guy who started out as a copywriter, I’ve always admired the chutzpah of that promo.

MNB reader Julie Anderson wrote:

I found myself singing along with the commercials. Great memories and great advertising.  Thanks for the memories.

MNB reader Craig Bolton wrote:

Isn’t that Mike Farrell from M*A*S*H fame buying everyone a round of Hamms in the bar?

Yup.  Extra credit to you.

Nice note from MNB reader Dan Jones:

Thanks so much for posting the old beer commercials. 

30 years ago TV was a touchstone.  There was no Netflix, few DVRs, and the only subscription service was HBO.  The nation watched Seinfeld at the same time, and all generations had something in common to talk about the next day.  No longer.

Not only has TV viewing changed, so have the commercials.  Maybe six beer brands advertise regularly, and they are all national/international brands.  CPG ads are extremely rare – even on Food Network.  The commercials of today feature insurance companies (with ducks or emus or whatever GEICO advertisers dream of) or pharma solutions with notoriously horrendous side effects. 

The advent of DVRs and more content has been great, don’t get me wrong.  But few in our industry build brands via TV advertising or other broad reach vehicles.  It is too bad – I expect the rate of people eating is higher than the rate of people looking to change insurance companies or suffering from Plaque Psoriasis.

From MNB reader Monte Stowell:

What a great trip down memory lane with these iconic beer commercials. Thanks for sending these along to all your faithful MNB readers.

Sure beats the hell out of all the e-mails about crumb cakes.

From another reader who clearly is shares my passion for crumb cake:

If you are ever in the Hackensack, NJ area, you need to stop in at B & W Bakery…Home of the Famous Heavy Crumb Cake.

They are located at 614 Main Street, Hackensack, NJ…couple of miles off Rt 4.

It is divine and  I hope you get to try it.  I love it when you showcase mom-and-pop shops with special products.  They are harder to find each and every day.

Next time I am in Hackensack, I promise….

Ands finally, from MNB reader John Rand:

You closed the loop nicely with the beer commercials and crumb cake.  Memory is powerful, so it may be redundant to say this: the very best crumb cake there ever was in the whole world was my Grandmother’s home made crumb cake.

I have no way to compare, of course. Grandma slipped away over 40 years ago, and nothing is as evanescent as the memory of a taste. But Grandma made it. She made it for me, sometimes while I watched, and she told stories along with it. It set the standard for baked goods, along with sponge cake and honey cake topped with sliced almonds and danish filled with homemade jam and a whole range of ethnic foods that she lovingly made, while she told me of my ancestors and her childhood migration across three countries to land in America.

You can’t buy that. But you can pass it on.

If there is a slim but positive thing to come from the current pandemic it might be people in the kitchen, together, making things and telling stories and filling the food with a taste you simply cannot buy anywhere but which stays in the mind, unmatched,  almost half a century later.

For me, it is my grandmother's potato pancakes, served with apple sauce.  (It was only later in life that I found out they were called latkes … and I get hungry just thinking about them.)

Published on: October 15, 2020

In the National League Championship Series, the Los Angeles Dodgers defeated the Atlanta Braves 15-3.  The Braves still lead the best-of-seven series 2-1.

FYI…the 11 runs scored by the Dodgers in the first inning was the most scored by any team in a single inning in postseason history.

In the American League Championship Series, the Houston Astros held on for a 4-3 victory over the Tampa Bay Rays.  The Rays lead the best-of-seven series 3-1.