retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: October 26, 2020

    Content Guy's Note:  We've had a number of stories and references on MNB recently about the continuing importance of education and training of workforces … which may not always have been a high priority since the pandemic kicked in.  But retailers cannot afford to ignore these components of their businesses, since trained, educated people can be an important differential advantage.

    With this in mind, I recently had a chance to chat about the Western Association of Food Chain (WAFC) Retail Management Certification Program with WAFC's Cherie Phipps, Mike Hendry of Northgate Markets, and Patrick Posey and Joe Reichard of Bristol Farms and Good Food Holdings.  One facet of their commitment that really intrigued me - the positioning of the program as part of the industry's ongoing role "in helping grocery retailers both advocate and foster social justice."

    I found it to be a provocative conversation getting to the heart of what makes a retailer a critical factor in any community, and I hope you enjoy it.

    You can find out more about the Retail Management Certification Program here.

    Published on: October 26, 2020

    by Kevin Coupe

    This presidential election cycle ends a week from tomorrow - early voting has been taking place for weeks, with close to 60 million ballots reportedly cast so far - and there apparently have been more than one thousand companies that have agreed to give employees time off to cast their ballots.

    The Hill has reported that "more than 1,100 companies have joined the Time To Vote movement, which was co-founded by Patagonia, Levi Strauss and PayPal to encourage employers to provide either several hours or a full day off for workers to vote."  About 400 companies participated in the effort for the 2018 mid-erm elections.

    Other companies agreeing to give employees time off to vote this year include Best Buy, Nike, Twitter, Coca-Cola, Cisco, Uber, Gap, JPMorgan Chase, Visa and J Crew.

    “We are incredibly pleased with how the movement is building and with the fact that it reaches workers in every state in the country in a variety of industries and in a variety of job functions,” JJ Huggins, spokesman for Patagonia, told The Hill. “We’ve gone out of our way to ensure that it’s nonpartisan.”

    Meanwhile, there is an op-ed piece in the Iowa Capital Dispatch suggesting that Hy-Vee's election efforts may have gone too far.

    Chairman-CEO-President Randy Edeker reportedly did a video for employees in which he said, "“I never endorse and I try not to ever push a certain candidate or a direction. I always try to speak about Hy-Vee. I have some of the concerns about some of the policies that are being discussed by some of the candidates. Some of the tax policies would be very impactful to Hy-Vee. And the changes in taxes were part of the way we were able to bring a lot of  good things to the employees this past year. Social unrest unfortunately continues to be a problem around the community and we continue to invest in our local groups who we really think can bring unity to our towns.”

    The op-ed piece notes that there is nothing illegal about the positions taken in the video, and that, in fact, Hy-Vee's Political Action Committee (PAC) has given money to some Democrats, though it definitely leans Republican.

    Where I think the op-ed piece goes too far is when it draws a connection between spiking coronavirus numbers in the Midwest, where Hy-Vee operates, and the perception that current official public policy has led to the spikes … which have been good for Hy-Vee's business.  The piece seems to suggest that Hy-Vee is okay with high pandemic numbers because it can make more money that way.

    That strikes me as a particularly heartless reading of Hy-Vee's motives.  I simply cannot believe that anyone would want people to get sick just so sales would go up.

    But I do think the op-ed piece does make one legitimate point.  One person's "social unrest" may be another person's quest for social justice.  There may be employees and customers who think that tax policies good for Hy-Vee may not be good for them.

    It may be a little disingenuous to say "I never push a candidate or a direction," and then, essentially, do so.  (Just as disingenuous as it may be for Patagonia to say it wants to be nonpartisan in its get-out-the-vote efforts, and then sell shorts that have tags reading, "Vote the assholes out.")

    Nothing illegal about it.  And nothing necessarily inappropriate.  It may be that Hy-Vee's political leanings are baked into its broader image, and absolutely nobody is surprised by Edeker's comments, just as nobody was really surprised by the Patagonia tags.

    The fact is that there are plenty of companies that are completely upfront about their political leanings … especially this year, when polarization is at epic levels.  (And there are even more companies that are working to get out the vote … I cannot even count how many emails I've been getting from businesses urging me to vote.)

    But … companies that do so have to understand that when they take a political stand, they run the risk of alienating a sizeable percentage of their customer base, and that a percentage of that percentage may respond by changing their shopping habits.

    Which is okay, too.  Because as much as companies have the right to be upfront about their positions, so do shoppers.

    Published on: October 26, 2020

    Interesting piece in the Wall Street Journal this morning about a new study from the Journal of Marketing Research concluding that while "online retailers have long used free shipping to encourage customers to buy more products," the fact is that "free-shipping promotions can reduce a company’s profits."

    The study "analyzed purchases made from a single large European retailer and found that free shipping did incentivize customers to buy more. But it also increased purchases of items that historically have higher return rates, such as clothing or products from lesser-known brands. Thus, returns also increased as a result of the promotions, to the point where profits were erased."

    According to the study, one of the results of free shipping policies was that people  more willing to take a risk on products they may not want to keep, which created the higher return rates.

    It recommends that retailers need to have a firm understanding of profitability before getting into the free shipping game, and also should do a better job of informing consumers about high-risk products' attributes, as one way of lowering risk in these purchases.

    KC's View:

    A factor in free shipping that seems to be ignored in the analysis is the notion of lifetime customer value.  If you trust a retailer and have a relationship with a retailer, you're more likely to go back again and again, even and maybe even especially to make so-called risky purchases.  That's a good thing.  That's the kind of connection that a retailer wants.

    The study suggests that 37 percent of "risky" purchases end up being returned.  But that also means that 63 percent of time, the sale sticks … and the relationship between the shopper and the shop may get stickier as a result.

    Published on: October 26, 2020

    The New York Times reports that "there is little denying that a vast amount of retail space is emptying during the coronavirus pandemic — 25,000 stores may close by the end of this year — all while the over-65 population is increasing by about 10,000 a day. So even though arena-like malls and strip shopping centers might never see another Sears, J.C. Penney or Lord & Taylor store, some are being transformed into something more interesting: comprehensive upscale retirement complexes."

    The Times points out that "the factors driving retail-to-housing transformation were set in motion years ago but have been accelerated by the pandemic. The demise of malls and shopping centers has also been amplified by the shift to online retailing in recent years … Ellen Dunham-Jones, a professor at the Georgia Institute of Technology, has researched the repurposing trend. Retail closings across the country have led to 400 proposals for retrofits, with some 315 projects completed or in progress."

    At least in part, this is because of one undeniable demographic reality:  "The 75-and-over population alone will grow by five million in the next five years, according to Marcus and Millichap, a commercial real estate firm."

    KC's View:

    It'll really be interesting if some of these malls are converted to a multitude of uses - like, part senior citizen housing, part community college, and maybe part health care facilities.  It wouldn't even be a bad thing to provide some young person housing, for people just out of college with loan debt that they need to pay off … maybe they could figure out a rent formula based on income and monthly loan payment size.

    This is an opportunity to find unique ways to create community as well as communities.  And that means being heterogeneous, not homogeneous.

    Published on: October 26, 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 are now up to 8,889,577 confirmed cases of the Covid-19 coronavirus, resulting in 230,510 deaths and 5,772,717 reported recoveries.

    Globally, there have been 43,388,054 confirmed coronavirus cases, with 1,159,742 fatalities and 31,922,400 reported recoveries.  (Source.)


    •  Axios reports that the United States reported 83,718 new coronavirus cases on Saturday, "marking the second day in a row that the country topped 80,000 daily infections."

    The previous record, set last July 16, was 77,362 daily coronavirus cases.


    •  The New York Times reports on a new report out of the Institute for Health Metrics and Evaluation at the University of Washington suggesting that universal mask wearing in the US could prevent as many as 130,000 fatalities.

    Christopher Murray, director of the Institute, tells the Times that the current surge of infection numbers "are likely to continue through the fall and winter, with a steady rise in cases and deaths until January and staying high after that point … 'We strongly believe we are heading into a pretty grim winter season,' Dr. Murray said."

    The Times goes on:  "The new study, published in the journal Nature Medicine, also offered a rough estimate of the pandemic’s toll in the United States: perhaps 500,000 deaths by March 2021, even with social distancing mandates reinstated in most states."

    The Times notes that "other experts cautioned that, as with any model, the new estimates are based on many assumptions and should not be seen as predictions."  One expert said that it should be seen as "a sophisticated thought experiment” the conclusions of which need not be realized if people change their behavior.

    "We can will this number out of existence,” said Shweta Bansal, an infectious disease modeler at Georgetown University.


    •  The Wall Street Journal reports on pandemic fatigue, writing that "from the corridors of Washington to the cobblestones of Paris, the coronavirus is roaring back and authorities are ramping up restrictions again. This time around, however, everyone is tired.

    "Hospital staff world-wide are demoralized after seven months of virus-fighting triage. The wartime rhetoric that world leaders initially used to rally support is gone. Family members who willingly sealed themselves off during spring lockdowns are suddenly finding it hard to resist the urge to reunite."

    This "collective exhaustion - known as pandemic fatigue - has emerged as a formidable adversary for governments that are counting on a high degree of public cooperation with the latest rounds of restrictions to flatten the infection curve. Too much pandemic fatigue, authorities say, can fuel a vicious cycle: A tired public tends to let its guard down, triggering more infections and restrictions that in turn compound the fatigue."

    The story goes on:  "Problems begin when the rules run up against the need for social connection. Gallup polling over the same May-to-September period showed the number of Americans avoiding small gatherings with family and friends had fallen from 71% to 45%."


    •  National Public Radio chimes in to point out that "unlike past surges, where a few states drove up case numbers, the current high is being propelled by many states. Texas currently has the most recorded cases, followed by Illinois, Wisconsin and Florida."


    •  The New York Times reports that "with the coronavirus spreading out of control in many parts of the United States and daily case counts once again setting records, health experts have warned that it is only a matter of time before the pressure on hospitals mounts to the breaking point.

    "In some places it’s already happening, with more than 41,000 Covid-19 patients hospitalized in the United States, a 40 percent rise in the past month."

    For example, "Hospital administrators in Utah have sent a grim warning to Gov. Gary Herbert that they will soon be forced to ration access to their rapidly filling intensive-care units, and requested approval for criteria to decide which patients should get priority … In Tennessee, the Maury Regional Medical Center in Columbia suspended all elective procedures requiring an overnight stay on Saturday to make room for an influx of Covid-19 patients. Most of the facility’s 26 I.C.U. beds are already filled … Hospitals in El Paso, Texas, are preparing to airlift some critical care patients to other medical facilities in the state after a record surge of Covid-19 hospitalizations."


    •  At least five people who work for Vice President  Mike Pence, including his chief of staff, Marc Short, have tested positive for the coronavirus.


    •  From the Washington Post:

    "Italy became the latest European country to announce new restrictions to stop the spread of the novel coronavirus on Sunday as countries across the continent continue to report surging infections.

    "France on Sunday announced more than 50,000 new infections, a new record for the fourth day running. Germany, widely lauded for its initial handling of the virus, reported a surge of its own. The number of coronavirus cases in Poland has doubled in less than three weeks. And Spain has also imposed new restrictions."


    •  Fox News reports that Costco now "is selling coronavirus test kits online.

    "The PCR saliva kits can be used without oversight at home … The at-home tests, which have been approved by the Food and Drug administration for Emergency Use Authorization, allow customers to test for coronavirus via saliva samples from home, in the office or in pharmacy self-administration.

    "According to Costco’s site, those who take the test can get their results within 24-72 hours from the time the lab receives the kit."


    •  CNN reports that Delta Air Lines now has banned a total of 460 people from flying on its planes - permanently - because they did not follow its mask policy.

    The number is up from the 270 bans announced in August.

    The story notes that "all major airlines now mandate that passengers wear masks in the absence of any new regulations from the federal government.

    "Airlines in June agreed to ban passengers from future flights for refusing to wear masks. But the airlines are not sharing information with one another about the passengers they have banned. So, for example, a passenger banned on Delta can still book a flight on American (AAL) and vice versa."

    The Centers for Disease Control and Prevention (CDC) has said that a) travel increases your likelihood of contracting the coronavirus, and b) wearing a mask helps to mitigate the likelihood of contracting the coronavirus.  Not sure why some part of the alphabet soup that makes up the federal government - the CDC or maybe the Federal Aviation Administration (FAA) - can't mandate both the wearing of masks on airplanes and the sharing of information by the airlines.


    •  For the moment, at least, it is no time to buy.

    Variety reported over the weekend that MGM, having delayed the theatrical release of the new James Bond movie, No Time To Die, several times because of the pandemic, actively explored selling the film to Apple, Amazon, Netflix or another streaming service for at-home viewing.

    No Time To Die is now slated to open in April 2021, a full year after originally planned.  The story suggests that the delays already have cost MGM between $30 million and $50 million.

    However, no sale has yet taken place - at least in part because MGM apparently put a price tag of $600 million on the movie, which was pretty rich even for Apple, Amazon and Netflix.

    The story notes that "other studios, such as Paramount and Sony, have raked in tens of millions by selling movies like Greyhound, Coming 2 America and Without Remorse to streaming services while the exhibition sector continues to struggle during the pandemic.

    That $600 million is a huge price tag, but one has to keep in mind that movies like these are expensive propositions.  No Time To Die reported cost about $250 million to make - which is less than the last Bond film, Spectre ($300 million) but more than the previous three Daniel Craig-led Bond films, Skyfall ($200 million), Quantum of Solace ($230 million) and Casino Royale ($102 million).  The rule of thumb is that movies on this scale have to make at least twice their production budgets to turn a profit … so to make money for MGM, No Time To Die would have to make $500 million or more.  So that $600 million price tag isn't so far off the mark.

    Here's my prediction.  If theaters aren't getting back to normal by early next year, No Time To Die will follow the streaming route, and MGM will find some sort of workable formula to make it work.

    Published on: October 26, 2020

    CNBC has a story about how, as Amazon warehouse workers increase their levels of protest and agitation for safer working conditions, perhaps opening the door to unionization,  Amazon itself has heightened its surveillance and intelligence activities to keep unions out.

    You can read the story here.

    Published on: October 26, 2020

    •  TechCrunch reports that "Instacart is making its grocery delivery and pickup services more accessible to lower-income customers by offering customers the ability to pay for groceries using their SNAP (Supplemental Nutrition Assistance Program) benefits. This is the first time Instacart shoppers have been able to use government assistance programs when paying for groceries, and follows earlier moves by larger retailers, including Amazon, Walmart and others in extending SNAP EBT to online grocery.

    "In Instacart’s case, the option is being made available in partnership with ALDI, which will offer the ability for SNAP EBT participants to access fresh food and other staples using the online service.

    "When shopping, Instacart users will be able to add ALDI’s EBT SNAP-eligible items to their cart, then select how much of their benefits they want to allocate to their order before checking out."


    •  Reuters reports that Amazon "has invested $100 million in opening new warehouses in Mexico, including its first shipping centers outside the populous capital area, in a bid to offer faster deliveries … The new sites include two so-called fulfillment centers - one near the northern city of Monterrey and another near the central city of Guadalajara - as well as a support building in the State of Mexico, just outside Mexico City … Amazon in total now runs five fulfillment centers, two support buildings and two classification centers in Mexico, where it launched its marketplace in 2015."

    Published on: October 26, 2020

    •  As part of its broader sustainability strategy, Walmart "aims to reduce emissions from its supply chain by 1 gigaton by 2030 via its Project Gigaton initiative," CNBC reports, "and it is now extending its buying power to its suppliers, who will be able to group together to buy renewable energy via its Gigaton PPA Program that launched in September."

    The story notes that "smaller companies can be priced out of the market for renewable energy, and there are only around 100 corporates buying renewable energy in this way, according to Walmart’s calculations and data from the Renewable Energy Buyers Alliance."


    •  Fox News reports that Walmart plans to extend its opening hours from 10 pm to 11 pm at most of its US stores.  In August, after it believed the peak of the pandemic had passed, Walmart moved its closing hours from 8:30 pm to 10 pm.

    Opening time will remain at 7 am, the story says.

    Published on: October 26, 2020

    •  From the New York Times:

    "Dunkin’ Brands, the parent company of the Dunkin’ and Baskin Robbins chains, is in talks to sell itself to a private equity-backed company, Inspire Brands.

    "The deal being discussed, which could be announced as soon as Monday, would take Dunkin’ Brands private at a price of $106.50 a share, said two people with knowledge of the negotiations, who spoke on condition of anonymity because the talks are confidential. The price would be a 20 percent premium over the company’s closing price on Friday, and implies a company valuation of about $8.8 billion. Dunkin’s share price has more than doubled since March, as investors took heed of its success in building up its app and drive-through services. Its shares are up about 18 percent from a year ago.

    "The transaction would add Dunkin’ Brands to Inspire Brands’ portfolio, which includes Arby’s, Buffalo Wild Wings, Sonic and Jimmy John’s. Inspire is backed by the private equity firm Roark Capital."

    Published on: October 26, 2020

    Jerry Jeff Walker, the singer-songwriter who wrote "Mr. Bojangles" and who was a charter member of the Texas outlaw movement that spawned Willie Nelson and Waylon Jennings, has passed away.  He was 78, and had been suffering from throat cancer.

    Walker once wrote, “Greased by drugs and alcohol, I was also raising the pursuit of wildness and weirdness to a fine art.  I didn’t just burn the candle at both ends, I was also finding new ends to light.”

    KC's View:

    My favorite Jerry Jeff Walker song is this one (which actually was written by Guy Clark):

    Published on: October 26, 2020

    In Major League Baseball, the Los Angeles Dodgers have taken a 3-2 game lead in the best-of-seven World Series, with 6-2 and 4-2 wins over the Tampa Bay Rays on Friday and Sunday;  the Rays won a nail-biter 8-7 on Saturday night.

    In Week Seven of National Football League play…

    Detroit Lions  23,  Atlanta Falcons  22

    Cleveland Browns  37,  Cincinnati Bengals  34

    Pittsburgh Steelers  27,  Tennessee Titans  24

    Carolina Panthers  24,  New Orleans Saints  27

    Buffalo Bills  18,  NY Jets  10

    Dallas Cowboys  3,  Washington  25

    Green Bay Packers  35,  Houston Texans  20

    Tampa Bay Buccaneers  45,  Las Vegas Raiders  20

    Kansas City Chiefs  43,  Denver Broncos  16

    San Francisco 49ers  33,  New England Patriots  6

    Jacksonville Jaguars  29,  Los Angeles Chargers  39

    Seattle Seahawks  34,  Arizona Cardinals  37