business news in context, analysis with attitude

Published on: October 19, 2020

Take the dogs for a walk at 7:30 am on a Sunday, and - go figure - it ends up that KC's small Connecticut street offers a business lesson.

Published on: October 19, 2020

Content Guy's Note:  There's no question that Portland, Oregon - a city that I love and that I think of as being my home away from home - has had a tough year.  There was pandemic … civil unrest because of social justice issues … the resultant turning of the city into a political football … and then, as if that was not enough, wildfires that darkened the skies and threatened nearby areas.

For that reason, I decided to check in with Tom Gillpatrick, a longtime Portland State University professor with whom I've team-taught a summer retail-CPG marketing class, and Craig Ostbo, a local retail and CPG branding wiz who also is on PSU's adjunct faculty, to see how the city, the university and the local business community and food culture are faring.

Published on: October 19, 2020

BisNow reports that SpartanNash has signed a deal to lease out a 364,000 square foot distribution center in Severn, Maryland, in the Baltimore-Washington corridor that "offers a mix of freezer, cooler and room temperature warehouse space."

The lease is technically with NashFinch, the name under which SpartanNash operates in the region.

The announcement comes less than two weeks after SpartanNash announced that it had issued a warrant for Amazon to buy a total of 5.44 million common shares, which would represent about 15% of the company, and would represent an investment in SpartanNash of close to $100 million.

Published on: October 19, 2020

Fast Company has a piece about the most recent FutureBrand Index, from global consultancy FutureBrand, which ranks the world’s top 100 brands, while at the same time serving as a barometer of shifting consumer priorities.

"As priorities shift, so do the brands we gravitate toward, and we’re starting to get a deeper window into which brands will benefit from a world radically reshaped by COVID-19, at least in terms of consumer perception," Fast Company writes.  And some of the shifts are unexpected:

"Amazon, for example, fell three spots from 2018, which was when the last survey was conducted. It’s now No. 24 in the top 100, despite becoming far more integrated into the lives of most consumers over the last several months.

"And yet it’s the opposite story for Amazon’s biggest rival, Walmart, which shot up 34 spots from its 2018 ranking … At No. 41, Walmart still trails behind Amazon, but its elevated position is no less a comeback story for a company seen by many as an underdog to Jeff Bezos’s e-commerce behemoth. What’s more, 64% of FutureBrand’s respondents see Walmart pulling even further ahead in the coming years."

You can read the entire story here.

Published on: October 19, 2020

The Associated Press reports that "retail sales rose strongly in September, the fifth straight month of growth, as Americans spent more on clothing, cars and sporting goods.

"U.S. retail sales jumped 1.9% last month, the U.S. Commerce Department said Friday. That’s more than double what was economists were expected. And it’s up from the 0.6% increase in August … Even sales at department stores, which have been falling out of fashion with shoppers for years, rose 9.7% last month."

The AP notes that "retail sales have been recovering since plunging in the spring as stores and malls were ordered closed to help prevent the spread of the coronavirus. And spending has continued even after more than 20 million unemployed Americans lost a $600 boost in their weekly unemployment checks at the end of July … Whether people will keep shopping remains to be seen. The unemployment rate is still high, at 7.8% last month. Some economists say more federal checks for out-of-work Americans are needed to sustain spending. And some say rising COVID-19 cases could keep people away from stores."

Published on: October 19, 2020

Research firm Ipsos last week released the results of its first E-Commerce Experience Report, described as "a mystery shopping study on buy-online-pickup-in-store (BOPIS), curbside, and delivery offerings of major brands nationwide."

Results included:

•  "Walmart performed the strongest across all measured attributes. Most notably, Walmart excelled at posting visible signage directing consumers to the grocery pickup area in 86% of locations audited."

•  "Target performed exceptionally well against the categories surveyed and had grocery orders ready when promised at 98% of visited locations."

The top brands in curbside pickup in the grocery category were as follows:

•  "Sam’s Club ranked first with a near perfect performance, and notably for providing designated curbside parking at 100% of locations audited."

•  "Kroger closely followed in the categories customers noted caring about most, and had orders ready when promised at 97% of locations."

The top brands in delivery in the grocery category were as follows:

•  "H-E-B ranked first in grocery delivery for their 99% accuracy rate on delivery orders.

Whole Foods closely followed, with a 95% order accuracy rate."

•  "Aldi performed well across the board, and predominantly excelled at providing delivery notifications on 95% of orders."

The report concludes:  "As e-commerce offerings expand, brands must continue taking steps to ensure consumers have a positive end-to-end experience. While several retailers have started shifting to meet consumer demand, there is still a tremendous growth opportunity for all brands offering BOPIS, curbside, and delivery. Across the board, customers look for clear communication, but more than a quarter of all pickup and delivery shoppers say there is room for improvement with communication."

Published on: October 19, 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 now have 8,388,013 confirmed cases of the Covid-19 coronavirus, resulting in 224,732 deaths and 5,457,912 reported recoveries.

Globally, there have been 40,325,508 confirmed coronavirus cases, with 1,118,848 fatalities and 30,136,426 reported recoveries.  (Source.)

•  From the New York Times:

"More than 70,450 new coronavirus cases were reported in the United States on Friday, the highest figure since July 24, according to a New York Times database. More than 900 new deaths were recorded.

"At least nine states set single-day case records on Friday: Wyoming, Minnesota, Wisconsin, West Virginia, North Dakota, Indiana, New Mexico, Utah and Colorado. And as of midday Saturday, Indiana and Ohio had set records.

"The virus has also been surging globally: a record 415,000-plus cases on Friday, a record.

"Epidemiologists warn that nearly half of the states in the U.S. are seeing surges unlike anything they experienced earlier in the pandemic. Eighteen states and Guam added more cases this week than in any other week. The nationwide seven-day average has increased by nearly 8,000 daily new cases since last Friday."

•  The New York Times also has a piece in which it suggests that there is a growing "public weariness and a growing tendency to risk the dangers of the coronavirus, out of desire or necessity: With no end in sight, many people are flocking to bars, family parties, bowling alleys and sporting events much as they did before the virus hit, and others must return to school or work as communities seek to resuscitate economies. And in sharp contrast to the spring, the rituals of hope and unity that helped people endure the first surge of the virus have given way to exhaustion and frustration."

With the autumn's pandemic exhaustion, the Times writes, "has come another dangerous, uncontrolled surge of infections that in parts of the world is the worst of the pandemic so far … Health officials say the growing impatience is a new challenge as they try to slow the latest outbreaks, and it threatens to exacerbate what they fear is turning into a devastating autumn.

"The issue is particularly stark in the United States, which has more known cases and deaths than any other country, and has already weathered two major coronavirus surges; infections spiked during the spring in the Northeast, and again this summer across the Sun Belt … If the spring was characterized by horror, the fall has become an odd mix of resignation and heedlessness. People who once would not leave their homes are now considering dining indoors for the first time — some losing patience after so many months without, others slipping in a fancy meal before the looming winter months when the virus is expected to spread more readily."

•  Interesting piece in the Washington Post about how, in virtually every country studied, more men seem to be dying of Covid-19 than women.  In the US, 12 men have died for every 12 women who have passed away from the coronavirus.

The story points out that "the specialized group of researchers who study that relationship was not surprised. It prepared an array of hypotheses. One possible culprit was male behavior. Perhaps men were more likely to be exposed to the virus due to social factors; a disproportionately male workforce, for instance, could place more men in contact with infected people. Or men’s lungs might be more vulnerable because they were more likely to smoke in the earliest countries to report the differences.

"What has become more evident, 10 months into this outbreak, is that men show comparatively weaker immune responses to coronavirus infections, which may account for those added deaths."

Here's one sobering passage from the story:  "The power of the immune system wanes as people age, regardless of sex. But what is a gentle decline for women is an abrupt dive off a cliff for men."  The study says that "the T-cell response of men in their 30s and 40s is equivalent to that of a woman in her 90s."

Somehow, this just seems like a metaphor about so much else about life in general.

It isn't just biology, though.  The story notes that "broadly speaking, men may be less likely to be worried about covid-19 than women, fitting the pattern that women generally treat health risks more seriously. Women took a more cautious approach to the disease, a recent poll found, expressing more concern they could return to workplaces safely. Women are also more likely to follow expert advice such as mask-wearing and social distancing."

Like I said, a metaphor.

•  Yahoo News reports that Walmart "will go back to limiting the number of customers inside its stores to just 20 percent of the store's capacity during this year's Black Friday shopping experience … The retailer originally made this same change back at the beginning of April to 'encourage social distancing,' but eased up on this strict capacity over the last few months—moving to only limiting the number of people based on 'various state and local ordinances'."

•  The Wall Street Journal reports that the southern part of the US, despite seeing surges in coronavirus infections, seems to have avoided some of the economic pitfalls that affected the rest of the country when dealing with the pandemic.

According to the story, " by the end of summer, the South’s economy remained largely unscathed from the wave of infections. Its unemployment rate had fallen to 6.9%, the lowest of any region in August.

"The number of people employed was 6% lower in August than in February, before most of the country locked down, compared with declines of 10.6% in the Northeast, 8.2% in the West and 7% in the Midwest. Consumers continued to spend at relatively high rates."

The Journal goes on:  "The South is diverse with 16 states, including Texas, Florida, Virginia and Oklahoma, and not all shared the same pattern. Nonetheless, as a whole it owes its stronger economic trajectory since the initial shutdown not to success in containing the virus but to its relatively aggressive reopening of business and a greater willingness by consumers to venture out despite risks."

It probably helped that the South saw its surges come at a time when medical professionals had gotten better at therapeutics, which meant that some of the worst problems that affected the Northeastern US and West Coast could be ameliorated to some degree.

•  That said, the Wall Street Journal has another story pointing to the various ways that the pandemic is likely to affect the US economy.  "Households face the prospect of Halloween without trick or treaters, Thanksgiving without family travels, Black Friday without crowds, and a December without parties and in-person gift-giving,' the story says.

The Journal writes that "holiday sales—usually spanning November and December—represent roughly 20% of annual U.S. retail sales each year, according to the National Retail Federation. And retail spending accounts for about 25% of consumer spending in a typical year."

The result:  "A number of economists are predicting little growth or none whatsoever this year compared with 2019."  To be fair, "this year’s outlook is so unpredictable that some forecasters aren’t even making predictions. The National Retail Federation has delayed the release of its holiday forecast for the first time in decades, citing a lack of clear economic indicators and other variables, including the presidential election and a possible resurgence of Covid-19."  And there are some economists who "see reasons for optimism. Households, particularly the middle-income and affluent, have paid down debt and boosted their savings, giving them a financial cushion."

•  CNBC reports that "CVS Health said Monday that it wants to immediately hire 15,000 employees to prepare for an expected rise in Covid-19 and flu cases this fall and winter.

"More than 10,000 of those will be full-time and part-time licensed pharmacy technicians who can help dispense medications and administer Covid-19 tests … The larger workforce could also help CVS prepare for another major phase of the pandemic: The rollout of the Covid-19 vaccine, once it’s available. Federal officials will need to give authorization to companies, including CVS, for pharmacy technicians to administer the vaccines under the supervision of an immunization-certified pharmacist."

•  The New York Times  reports that "the chief executive of Pfizer said on Friday that the company would not apply for emergency authorization of its coronavirus vaccine before the third week of November … In a statement posted to the company website, the chief executive, Dr. Albert Bourla, said that although Pfizer could have preliminary numbers by the end of October about whether the vaccine works, it would still need to collect safety and manufacturing data that will stretch the timeline to at least the third week of November.

"Close watchers of the vaccine race had already known that Pfizer wouldn’t be able to meet the requirements of the Food and Drug Administration by the end of this month. But Friday’s announcement represents a shift in tone for the company and its leader, who has repeatedly emphasized the month of October in interviews and public appearances."

•  Variety  reports that "New York Gov. Andrew Cuomo has announced that movie theaters outside of New York City will be allowed to open beginning Oct. 23.

During a press briefing on Saturday morning, Cuomo said that movie theaters not located in the city can open at 25% capacity with a limit of 50 people per screening if they meet state safety regulations.

"Only counties that have an average COVID-19 infection rate lower than 2% over 14 days and no cluster zones will be allowed to open their theaters. Masks, assigned and socially distant seating and additional staff to enforce the new rules will be required, in addition to air filtration, purification and ventilation standards."

•  AMC, the movie theater chain that already has warned that it may run out of money by the end of the year because of a) lack of major movies being released to theaters and b) lack of people who want to go to a movie theater, now has gotten to the point where if you want to rent out an en tire theater and watch a movie, you may be able to do so for as little as $99.

The maximum audience for such a rental is 20 people.  (Which, at a total rental of $99, works out to $4.95 per person.)  CNN reports that rental fees can "increase to $349 depending on the movie, the theater's location and any other add-ons like food and drink. AMC's FAQ page lists renting a microphone to greet guests as an extra $100 charge, while more time to enter an auditorium, beyond the standard 15 minutes, will cost another $250."

To paraphrase the late Sen. Everett Dirksen (R-Illinois), 99 bucks here and 99 bucks there, and pretty soon you're talking about real money…

Published on: October 19, 2020

Considering that the original Die Hard came out in 1988, I'm not sure what took them so long.

However, the explanation may simply be that Sears owned the Die Hard brand, and Sears never has been known as the sharpest tool in the shed.   Now that  Advance Auto Parts owns the brand, having bought it last year for around $200 million … well, maybe the best commercial tie-in ever has been accomplished.

Yippee ki yay.

Published on: October 19, 2020

With brief, occasional, italicized and sometimes gratuitous commentary…

•  USA Today reports that while Amazon's Prime Day promotion is over, "the early holiday deals continue.

"Two days after the members-only shopping event, Amazon announced the kickoff of its 'Holiday Dash' sale Friday with more than a million deals worldwide throughout the holiday season.

"The deals posted at Amazon.com/holidaydash include 'deep discounts from small businesses and top brands' across multiple categories from toys to fashion, electronics, home, kitchen and beauty."

Seems likely that wherever and whenever possible, Amazon is going to keep its foot on the accelerator when it comes to end-of-year marketing and promotion.

Published on: October 19, 2020

With brief, occasional, italicized and sometimes gratuitous commentary…

•  AIThority reports that Walmart has installed a robotics kiosk in a Fremont, California,  store that delivers "customized, healthy, and delicious smoothies to consumers."

Made by a company called Blendid, the kiosk is designed to be "an innovative, autonomous, and contactless food automation platform that leverages machine learning, robotics, and artificial intelligence to create nutrient-dense and delicious smoothies, made on-demand, and customized to meet the unique health and taste preferences of individual consumers … Blendid’s stand-alone, contactless kiosk includes a robotic arm, blenders, a refrigeration system, and numerous dispensers that store and dispense a variety of ingredients including solids (such as fruits and vegetables), liquids (such as coconut water), and superfoods (such as chia, flax, and ginger)."

At a time when most food retailers are trying to figure out how to recapture some of the fresh and theatrical moments can could differentiate the consumer experience, knowing that certain things - like hot and cold bars - are simply not acceptable at the moment, coming up with these kinds of solutions may be one way to go.

Published on: October 19, 2020

With brief, occasional, italicized and sometimes gratuitous commentary…

•  Bloomberg reports that "Alibaba Group Holding Ltd. will invest about $3.6 billion to double its stake in Sun Art Retail Group Ltd., taking control of China’s largest chain of hypermarts to try and fend off rivals like JD.com Inc. in e-commerce’s hottest growth arena.

"Alibaba will raise its direct and indirect stake in the grocery chain to about 72% by acquiring equity from Auchan Retail International SA, then make a general offer to shareholders to buy out the rest of Sun Art."

•  USA Today reports that while Amazon's Prime Day promotion is over, "the early holiday deals continue.

"Two days after the members-only shopping event, Amazon announced the kickoff of its 'Holiday Dash' sale Friday with more than a million deals worldwide throughout the holiday season.

"The deals posted at Amazon.com/holidaydash include 'deep discounts from small businesses and top brands' across multiple categories from toys to fashion, electronics, home, kitchen and beauty."

Seems likely that wherever and whenever possible, Amazon is going to keep its foot on the accelerator when it comes to end-of-year marketing and promotion.

Published on: October 19, 2020

Got the following email from MNB reader Wayne L. Pulford:

After reading your newsletter today, I feel we are at the point where businesses need to put up signs saying, "No Mask, No Shirt, No Shoes, No Service". We have too many politicians who for whatever reason don't want to require masks in their communities or states. Business leaders have to step up to the plate and I think they need to do it again, kinda like when the railroads set the time zones, people didn't like it at first but they did eventually agreed to it in the end. We have been lacking leadership, right now we need to get it from where ever we can. Love your newsletter. Thanks for letting me vent. 

My pleasure.  You're playing my song.

Regarding the issues being dealt with by independent bookstores, one MNB reader wrote:

I love my local bookstore in Mountain View CA.  I’d rather order a book via my bookstore, than via Amazon. I’m not an Amazon fan. Too much waste with the packaging/boxes, and I like shopping local and in-person.

Responding to our story about how Starbucks will start pegging bonus numbers to meeting diversity goals, one MNB reader wrote:

Wow, applaud the action but this is sure to raise a lot of concerns maybe legal?  Be interesting to know where they got the target numbers.  Shame we can’t just do what’s right.

An observation from an MNB reader about Walmart CEO Doug McMillon:

This guy is genuine, and he does what he says he will do, period.  He has always been that way , but most of all he is a listener.......normally the “actions” have already started before you hear about it!

Also got an email about my complaint last week about retailers that give away turkeys for Thanksgiving when that's the only time of the year you can actually sell the damned things:

Regarding “giving the turkey” away for free at Thanksgiving, the original thought was that if one captured the Turkey sale any loss would be offset by profitability on the balance of the holiday shopping cart. However in grocer’s typical reaction to their competitors we migrated to let’s give the whole cart away at a discount. You now see yams, cranberries, pumpkin pie filling, stuffing ingredients, yams, little marshmallows, ingredients for green bean casseroles, shrimp for appetizers, potatoes, pumpkin and pecan pies,  and everything else one needs for a huge Thanksgiving meal all in the ad at discounts and on top of all of that many families have leftovers from that meal that they eat for additional days. Damn silly but “its what we have always done.”

And, MNB reader Brian Blank wrote in about Instacart's move to offer educational services to tech-challenged seniors who want to shop online … which led him to comment on a few other issues:

You’re right—that IS a very good offering by Instacart for the reasons you mention, and that is definitely something that other retailers could be doing on their own, for their own platforms.

I also got a chuckle out of your reaction to the Hey Senior robocalls.  As to your comments about age 60 being the starting point, I think since you were looking at it from a technology stand point, I think they were most likely looking at it from the “at-risk” demographic standpoint—after all, isn’t age 60 the age that B&M supermarkets start offering dedicated early shopping hours for seniors?

Also, to chime in on the catalog onslaught, sure, some of the ones I get go straight to the recycling bag, and some get tossed on the coffee table where they may or may not get a look before going into said recycling bag…but catalogs are a nice way to browse and get ideas from home, although to me, nothing beats going to a store and actually seeing products and touching them (remember touching?).  Online shopping IS convenient if you already know what you want, whether the specific item or at least the specific category (although that can even be a challenge when your fairly specific search term brings up a slew of bad hits—try looking for HDMI cables…you have to wade through dozens of unrelated items before you see the first HDMI cable). 

Online shopping is not conducive to “wandering” around to get ideas, but flipping through a catalog can give a spark to an idea—even if what is shown isn’t what you (or the person on your gift list) want, you might think to look for something else that hadn’t been in your mind a minute before.

Published on: October 19, 2020

On Saturday, the Tampa Bay Rays defeated the Houston Astros 4-2, winning the seventh and deciding game of the American League Championship Series and sending the Rays to the World Series.

On Sunday, in the seventh and deciding game of the National League Championship Series, the Los Angeles Dodgers beat the Atlanta Braves 4-3 and now move on top the World Series.

Game one of the best-of-seven series starts tomorrow night.

A couple of interesting notes about the Series from Axios Sports:  Because of a desire to create pandemic-sensitive bubble, the World Series between Los Angeles and Tampa Bay will be played in Arlington, Texas - the first time it has been played in a neutral stadium since 1944.

It also is a clash of teams of very different economic circumstances;  "the Dodgers paid nearly as much in signing bonuses this season ($25.3 million) as the Rays paid in payroll."

In Week Six of National Football League play…

NY Jets  0,  Miami Dolphins 24

Green Bay Packers 10,  Tampa Bay Buccaneers 38

Houston Texans  36,  Tennessee Titans  42

Cincinnati Bengals  27,  Indianapolis Colts  31

Atlanta Falcons  40,  Minnesota Vikings  23

Denver Broncos  18,  New England Patriots  12

Washington  19,  NY Giants  20

Baltimore Ravens  30,  Philadelphia Eagles  28

Cleveland Browns  7,  Pittsburgh Steelers  39

Chicago Bears  23,  Carolina Panthers  16

Detroit Lions  34,  Jacksonville Jaguars  16

Los Angeles Rams  16,  San Francisco 49ers 24