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    Published on: November 16, 2020

    The "slow death" of cable television, according to a new report from Axios, may be hastened if leagues decide to cut out the networks and go direct to consumers … such a move could allow them to have a direct relationship with their fans and give them access to enormous amounts of data that they may be able to monetize.  KC suggests that there's a lesson for retailers, who have their own channels - and competitors - to worry about.

    Published on: November 16, 2020

    Walmart announced that it is selling a majority stake in Seiyu, with private equity group KKR buying 65 percent and Japanese e-commerce company Rakuten buying 20 percent of the 329-store retail chain in which Walmart began investing 18 years ago and fully acquired for more than $2 billion in 2008.

    The deal values Seiyu at about $1.6 billion (US).

    The Wall Street Journal writes that the move continues Walmart's "retreat from slow-growing global markets in favor of e-commerce bets … In October, the Bentonville, Ark., giant agreed to sell U.K. grocery-store chain Asda Group Ltd. to a private investment group in a deal valuing Asda at the equivalent of $8.8 billion. Walmart said it expected to recognize a noncash after-tax loss of about $2.5 billion. And on Nov. 6, Walmart said it would sell its retail operations in Argentina in a deal that would result in a noncash after-tax loss of about $1 billion."

    Walmart retains retail operations "in some places, including China, Mexico and Central America," the Journal writes.

    The Financial Times offers this analysis:

    "Walmart’s initial strategy to export its US strategy into the Japanese market also failed to woo Japanese consumers.  Talk of the US retailer’s retreat from Japan surfaced two years ago, but people close to the discussions say Walmart has had difficulty finding a buyer. The agreement with Rakuten follows a two-year partnership between Walmart and the ecommerce group aimed at cracking Japan’s nascent but growing grocery delivery market.  For KKR, the deal comes as the private equity fund continues to position Japan as its 'highest priority' market outside of the US, particularly as the coronavirus crisis has accelerated restructuring and disposal of assets by Japanese businesses."

    KC's View:

    I'm trying to remember any time over the past 18 years when Seiyu was described to me as a money-making move by Walmart.  It was always seemed to defined in the same terms as are used in the Journal story - as a "perennial money loser."

    Published on: November 16, 2020

    DoorDash, the nation's largest food delivery service, has announced that it still plans to go public even as it said that it was losing money despite the fact that the pandemic increased the demand for its services.

    The New York Times writes that DoorDash's "performance renewed questions about whether 'gig economy' businesses, which rely on armies of contract workers, can turn a profit. DoorDash primarily connects restaurants, drivers and customers to facilitate takeout orders.

    "DoorDash was a clear winner of the pandemic. It reported revenue of $1.92 billion in the nine months through September, more than 200 percent above the $587 million for the same period last year, according to the prospectus filed for its planned initial public offering. It had 543 million orders through September, compared with 181 million in the same period last year.

    "Even so, the company continued losing money. Its net loss in the first nine months of this year was $149 million, compared with a loss of $533 million a year earlier. In the second quarter, DoorDash squeezed out a $23 million profit, but returned to a loss in the third quarter. It also said the growth in orders spurred by the pandemic would likely slow … DoorDash’s deep losses reflect the dismal economics of the food delivery business, said Len Sherman, an adjunct professor at Columbia Business School.

    KC's View:

    The economics of the delivery business may be why DoorDash is getting into the retail business, with its DashMart c-store offering that essentially competes with its c-store clients.  If so, that certainly highlights why we're going to see Instacart do the same thing, competing with its retail clients from whom its already has been able to commandeer customer and transaction data that will give it a real advantage.

    Published on: November 16, 2020

    The Wall Street Journal has a story this morning essentially saying that retailers that close stores in the hope that "by cutting expenses associated with physical locations, the chains can become more profitable and start growing sales again as customer purchases shift to their remaining locations and websites," may be deluding themselves.

    The Journal writes, "Retailers that closed stores in recent years often continued to shrink, sometimes to the point of disappearing altogether, according to research from Citigroup Inc. and BMO Capital Markets.

    You can read the story here.

    KC's View:

    This isn't really surprising.   Many of the retailers that have found themselves in trouble didn't have differentiated value propositions, compelling product and service offerings, cultural values that set them apart from the competition, or employees who bought into the company's mission.

    It wasn't about the stores, or the threat of e-commerce (though the latter didn't help).  It was about mediocre retailers with me-too offerings that did very little to communicate with or even understand their customer base.

    One other thing that they generally had in common:  they blamed Amazon for their troubles.

    Published on: November 16, 2020

    USA Today reports that Costco is selling annual memberships for a private aviation service, Wheels Up, that will give its members a $4,000 flight credit, nationwide aircraft availability 365 days a year, a one-year membership in a luxury vacation club, and a $3,500 Costco Shop card.

    The story notes that "Wheels Up operates more than 300 planes and has access to more than 1,250 'partner aircraft'."

    Cost of the package:  $17,499.99.

    KC's View:

    Thank goodness.  We sold the MNB jet once the pandemic kicked in and we just weren't using it as much as we used to, so this option makes a lot of sense.

    One thing, though.  The USA Today story doesn't mention whether they're providing masks for the flights.  Because that would be a deal-killer.

    Published on: November 16, 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 11,367,214 con firmed cases of the Covid-19 coronavirus, resulting in 251,901 deaths and 6,937,236 reported recoveries.

    Globally, there have been 54,896,579 confirmed coronavirus cases, with 1,325,422 fatalities and 38,197,709 reported recoveries.  (Source.)

    Every once in a while I'll get an email from an MNB reader wondering a) why the numbers I am citing here each day are different than those in the Wall Street Journal and other papers, and b) if the difference in the numbers indicate that it is all fake news.

    Since the beginning of the pandemic, I've been going each morning to Worldometer, which says it "manually analyzes, validates, and aggregates data from thousands of sources in real time and provides global COVID-19 live statistics" to governments, media outlets, universities and other institutions all over the world.  Worldometer describes its process this way:  "We collect and process data around the clock, 24 hours a day, 7 days a week. Multiple updates per minute are performed on average by our team of analysts and researchers who validate the data from an ever-growing list of over 5,000 sources under the constant solicitation of users who alert us as soon as an official announcement is made anywhere around the world … Our sources include Official Websites of Ministries of Health or other Government Institutions and Government authorities' social media accounts. Because national aggregates often lag behind the regional and local health departments' data, part of our work consists in monitoring thousands of daily reports released by local authorities."

    So that's why the numbers here are a little different from those being cited in other news sources - often a little ahead of the others, but the bad news is that the numbers posted by other media sources always catch up.  And no, they're not fake news.

    •  Axios reports:

    "New coronavirus infections surged by roughly 20% over the past week as cases continued to climb in every region of the country … All signs indicate that the pandemic will keep getting worse throughout the winter, making it harder and harder to eventually control — even if there's a new president, and even with a vaccine."

    The story goes on:  "Over the past seven days, the U.S. averaged about 85,000 new cases per day. That's a 20% increase from the week before, and it's the highest caseload of the entire pandemic.

    "Cases rose in 35 states," the story says, "held steady in 10 and declined in just five."

    •  From the New York Times this morning:

    "In Chicago, a sweeping stay-at-home order goes into effect on Monday. Philadelphia is expected to announce new restrictions on movement later in the day. In-person classes for high school and college students in Michigan have been canceled … Michigan will suspend all in-person learning for college and high school students and indoor dining for three weeks, Gov. Gretchen Whitmer said. Other indoor gathering places, like casinos and movie theaters, must also close as part of the order, which takes effect Wednesday … Ms. Whitmer’s announcement came just after Gov. Jay Inslee of Washington said he was ordering fitness facilities and restaurants to stop serving customers indoors, shutting down museums and limiting retail stores to 25 percent of capacity indoors."

    The Times writes that "from a statewide, two-week lockdown in New Mexico to a new mask mandate in North Dakota, governors and mayors across the United States are taking increasingly stringent steps to slow the coronavirus after a staggering one million cases were recorded in the country over the past week alone. Cases are rising in 48 states."

    Dr. Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota, went on Meet The Press yesterday, the Times notes, to say that the coronavirus pandemic is "the most dangerous public health crisis since the 1918 influenza pandemic, which killed an estimated 50 million worldwide, including some 675,000 Americans.  'My worst fear is we will see what we saw happening in other countries, where people were dying on the streets,” Osterholm said.  'The health care system is breaking, literally breaking'."

    •  From the Washington Post:

    "On Friday, Virginia Gov. Ralph Northam (D) tightened limits on restaurants and indoor gatherings, effective at 12:01 a.m. Monday, while the governors of California, Oregon and Washington state issued a joint statement discouraging travel and advising visitors to quarantine upon arrival for 14 days … Similar measures are taking effect or under consideration elsewhere, including Chicago, where the mayor on Thursday issued a stay-at-home advisory just hours before Illinois Gov. J.B. Pritzker (D) threatened a mandatory statewide order. The renewed clampdown is reminiscent of the worst days of the pandemic in early March, when sports leagues, movie theaters and restaurants abruptly went into hibernation in hopes of curbing the contagion."

    The Post goes on:

    "On Thursday, the United States for the first time reported more than 150,000 cases in a single day. Within the next week, the daily total will top 200,000 and is likely to reach 300,000 by early December, according to Ian Shepherdson, chief economist for Pantheon Macroeconomics.

    By mid-December, hospitals will be swamped with twice as many coronavirus patients as during the pandemic’s earlier waves 'unless most large-population states impose much more severe restrictions on the leisure and hospitality sectors, and on indoor gatherings, very soon,' he wrote in a note to clients Friday."

    •  The New York Times writes:

    "As Covid-19 cases surge in almost every part of the country, researchers say the United States is fast approaching what could be a significant tipping point — a pandemic so widespread that every American knows someone who has been infected."

    •  From the Wall Street Journal:

    "In earlier surges, infections were concentrated in cities such as New York and Chicago, or populous states like Florida and Texas. Many of the outbreaks then were linked to travelers returning from overseas or so-called superspreading events such as conferences, weddings and rallies.

    "Now, it is everywhere. People are becoming infected not just at big gatherings, but when they let their guard down, such as by not wearing a mask, while going about their daily routines or in smaller social settings that they thought of as safe—often among their own families or trusted friends."

    •  The New York Times writes that "health care workers in some hard-hit states have taken to social media to issue urgent pleas for new restrictions to slow the spread of the virus and for the public to take precautions more seriously.

    "In Nebraska, Dr. Dan Johnson, a critical care anesthesiologist with Nebraska Medicine, a major health network in the region, posted on Facebook about the crisis last week, saying that current measures were not enough to stop the high rate of transmission.

    "The state has seen new virus cases reach an average of 2,033 cases per day, an increase of 99 percent from two weeks earlier."

    •  Good news from the Wall Street Journal this morning, which reports that "Moderna Inc. said its experimental coronavirus vaccine was 94.5% effective at protecting people from Covid-19 in an early look at pivotal study results, the second vaccine to hit a key milestone.

    "Of 95 people in the study who developed Covid-19 with symptoms so far, 90 had received a placebo and only five Moderna’s vaccine, the company said Monday. The findings move the vaccine closer to wide use, because they indicate it is effective at preventing disease that causes symptoms, including severe cases.

    "The vaccine also showed signs of being safe, though researchers and regulators must wait for more-complete safety data from the study, expected later in November."

    •  The Associated Press this morning reports that "one of the scientists behind the experimental coronavirus vaccine developed by BioNTech and Pfizer says he’s confident that it could halve the transmission of the virus, resulting in a 'dramatic' curb of the virus’ spread."

    •  The Washington Post reports that "more than 130 Secret Service officers who help protect the White House and the president when he travels have recently been ordered to isolate or quarantine because they tested positive for the coronavirus or had close contact with infected co-workers, according to three people familiar with agency staffing."

    •  From the Associated Press:

    "After Vermont saw its highest daily number of coronavirus cases to date this week, Gov. Phil Scott announced new restrictions on social gatherings Friday, closing bars and clubs to in-person service and banning multiple-household gatherings, both inside and out.

    "He also announced a pause of recreational sports leagues, outside of the Vermont Principal’s Association sanctioned sports."

    “I want to be clear: We’re in a new phase of this pandemic. The days of very low risk are over,” Scott said, noting that "many of the state’s clusters and outbreaks are traced to private gatherings such as baby showers, tailgate parties, deer camps and barbecues … The recent surge in cases has come 12 days after Halloween, when people gathered for parties. Such activities are still happening even though the state had been warning against them for weeks," the story quotes the governor as saying.

    •  The Associated Press reports that "Connecticut Gov. Ned Lamont is self-quarantining after his chief spokesperson tested positive for COVID-19.

    "The Democratic governor’s chief spokesperson, Max Reiss, identified himself as the senior staff member who had tested positive, in a release posted to Twitter late Friday … Contact tracing has begun and all members of the administration who have been within 6 feet (2 meters) of Reiss for 15 minutes or more will self-quarantine for 14 days. In addition to Lamont, chief of staff Paul Mounds and chief operating officer Josh Geballe will self-quarantine."

    •  From the Wall Street Journal:

    "Tyson Foods Inc. is using infection-tracking algorithms and ongoing employee testing to shield workers at the biggest U.S. meatpacker from a fresh surge in coronavirus cases and keep grocery stores stocked, its chief executive said.

    "The Arkansas-based company, like other meatpackers, is spending heavily on protective gear and planning longer-term defenses against Covid-19. Tyson Chief Executive Dean Banks said the company is adding more space for workers at existing plants and designing new ones to include workstation dividers and other safeguards."

    “Everyone is concerned about a second or third wave,” Banks tells the Journal.

    •  The New York Times has a story about an unfortunate byproduct of the pandemic:

    "Thousands of medical practices have closed during the pandemic, according to a July survey of 3,500 doctors by the Physicians Foundation, a nonprofit group. About 8 percent of the doctors reported closing their offices in recent months, which the foundation estimated could equal some 16,000 practices. Another 4 percent said they planned to shutter within the next year.

    "Other doctors and nurses are retiring early or leaving their jobs. Some worry about their own health because of age or a medical condition that puts them at high risk. Others stopped practicing during the worst of the outbreaks and don’t have the energy to start again. Some simply need a break from the toll that the pandemic has taken among their ranks and their patients."

    •  Fascinating story in Time that addresses very different approaches to dealing with the pandemic taken by two elite universities.

    "At the Stanford Graduate School of Business in Northern California, the stories got weird almost immediately upon their return for the fall semester. Students say they were being followed around campus by people wearing green vests telling them where they could and could not be, go, stop, chat or conduct even a socially distanced gathering. Some say they were threatened with the loss of their campus housing if they didn’t follow the rules … On the other side of the country, students at the Harvard Business School gathered for the new semester after being gently advised by the school’s top administrators, via email, that they were part of 'a delicate experiment.' The students were given the ground rules for the term, then received updates every few days about how things were going. And that, basically, was that.

    "Two elite programs, two wildly different approaches in tone and execution. In terms of the substance of their efforts, though, Harvard and Stanford wound up aligning very closely with one another—and that may explain why, in the end, the schools both have achieved ongoing success in limiting the spread of COVID-19 in the age of pandemic … So far, both Harvard and Stanford have posted low positive test rates overall, and the business schools are part of those reporting totals, with no significant outbreaks reported. Despite their distinct delivery methods, the schools ultimately relied on science to guide their COVID-19-related decisions."

    Personally, I prefer the Harvard approach - treat people like responsible adults, and expect that they will act like responsible adults, and hope that the the results reflect your faith.  (Of course, you always know that if your faith in not rewarded, here's always Plan B.)  Things break down when people who are adults don't act like it.

    Published on: November 16, 2020

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Rolling Stone reports that "Tower Records, the beloved music chain that shuttered all of its U.S. physical locations 14 years ago, has been revived as an online store.

    "After nearly a year of teasing its return via a social media presence, the new Tower Records officially relaunched this week, complete with the return of its Tower Pulse magazine as well as online performances."

    Tower Record filed for bankruptcy and closed all its US locations in 2006, the story says - only one bricks-and-mortar location remains, in Tokyo, Japan.

    I think the things that surprised me most about this story were a) that it took so long for this to happen, and b) that it was 2006 when Tower closed all its stores.  It seems like a lot more recently than that … but maybe that's just because the years are beginning to run into each other.

    Published on: November 16, 2020

    •  The Minneapolis/St. Paul Business Journal reports that Dollar General plans to open one of its new DGX format stores early next year in "a long-vacant Nicollet Mall storefront in downtown Minneapolis."  

    The 6,000 square foot store "will have fresh fruits and vegetables, refrigerated and frozen food, an expanded health and beauty section, pet supplies, candies and snacks, paper products and home cleaning supplies. It will also have home decor, electronics and season offerings, according to Dollar General."  In short, the store will be designed for urban customers.

    The Journal writes that "Dollar General opened its first DGX store in Nashville in 2017 and has since opened them in Philadelphia; Cleveland; Columbus, Ohio; Raleigh, N.C.; Tulsa, Okla.; and Omaha, Neb.

    •  Bloomberg reports that "Guitar Center Inc., the largest musical instrument retailer in the U.S., said it expected to file for bankruptcy after reaching an agreement to restructure its debt.  The plan will include as much as $165 million in new equity investments from funds managed by its private equity owner Ares Management, as well as the Carlyle Group and Brigade Capital Management, the company said in a statement Friday. It also aims to reduce debt by almost $800 million -- it will get $375 million in financing from certain existing noteholders and lenders, and $335 million in new senior secured notes."

    The story notes that "Covid-19 related shutdowns have hit nonessential retailers hard, and Guitar Center is vulnerable during economic downturns because purchases of musical instruments are highly discretionary, according to a June 2019 report by Moody’s Investors Service. The pandemic has cost tens of millions of Americans their jobs, and many who are still employed have seen their pay cut substantially."

    •  Delish reports that Waffle House is getting ready to launch its own beer.

    Naturally, it smells like bacon.

    The story says that Waffle House is "collaborating with Greensboro, Georgia brewing company Oconee Brewing Company," and that "the new brew will be called Bacon & Kegs!"

    Published on: November 16, 2020

    Paul Hornung, who won the 1956 Heisman Trophy with Notre Dame and then went on to an All-Star career as a running back with Vince Lombardi's Green Bay Packers, winning four National Football League championships, has passed away from dementia.  He was 84.

    The New York Times writes that "Hornung’s career was marred when the N.F.L. commissioner, Pete Rozelle, suspended him indefinitely in the spring of 1963 for gambling on pro football, including Packer games, over several seasons. Hornung said he had bet on Green Bay only to win, and the league found no evidence to the contrary, but he remained suspended for the entire season … Hornung had to wait until 1986, his 15th time on the ballot, to be selected to the Pro Football Hall of Fame, evidently because of his suspension."

    The Times notes that "Hornung filed a lawsuit in July 2016 seeking damages against Riddell, the longtime supplier of helmets to the N.F.L., saying he was suffering from 'dementia and other neurodegenerative disease(s) caused by repetitive head trauma' as a result of Riddell’s failure to inform players that it knew its helmets could not prevent concussions.

    "The suit said he had incurred numerous concussions while wearing Riddell helmets as a Packer. His case was later consolidated with many others filed by former N.F.L. players against Riddell and was in federal court in the Eastern District of Pennsylvania."

    Published on: November 16, 2020

    Got the following email from an MNB reader on Friday:

    As I sat here reading your article on Amazon in garage delivery  I heard footsteps on my back deck and it was the Amazon Van delivery driver. I said you did not have to come all the way around the back and he stated, I don’t like to leave packages on the front porch this time of year.  Not sure if that is the direction they are giving the drivers or if that was on his own initiative. Nice touch, although come the holidays those extra steps are going to add up and not to mention to occasional unleashed dog.

    On another subject, from an MNB reader:

    Thank you for sharing the SuperValu Christmas Ad – when it got to the end, tears welled up in my eyes.  This year will be the first in 22 years that my kids won’t be seeing their grandfather at Christmas.  Very poignant and relevant.

    I suspect there will be a lot of them this year, and I encourage MNB readers to tell me about them so I can post them here.

    And finally, MNB reader Brian Holmes sent me an email about our exploding whale story that referenced a sitcom moment that also came to my mind when I was writing the story:

    “As God as my witness, I thought turkeys could fly.”


    The show was "WKRP in Cincinnati," and the episode aired in 1978.  While the series itself was rather forgettable, the episode was hysterical and featured one of the funniest lines ever uttered on TV:

    Published on: November 16, 2020

    •  Kim Ng, who has been working in baseball for three decades for teams that included the Chicago White Sox, New York Yankees and Los Angeles Dodgers, on Friday was named the new general manager of the Miami Marlins - becoming not just the first woman general manager for a major North American sports team, but also baseball's first Asian American GM.

    ESPN reports that it has been 15 years since Ng first interviewed for a general manager's job, and has interviewed for - and been passed over for - five GM jobs in Major League Baseball.

    The ESPN story quotes Joe Torre, Ng's former colleague on the Yankees, as saying, "I always talk her up at owners meetings.  At some point, somebody just has to ignore the fact that she's a woman and just make a baseball decision. And if they do that, then I think she will get an opportunity. Somewhere.''

    •  Dustin Johnson, just one month after having tested positive for Covid-19, won this year's Masters, finishing finished 20-under par—the lowest Masters score ever.

    •  In Week 10 of National Football League play…

    Houston Texans 7, Cleveland Browns 10

    Washington 27, Detroit Lions  30

    Jacksonville Jaguars 20, Green Bay Packers 24

    Philadelphia Eagles 17, NY Giants 27

    Tampa Bay Buccaneers 46, Carolina Panthers 23

    Denver Broncos 12, Las Vegas Raiders 37

    LA Chargers 21, Miami Dolphins 29

    Buffalo Bills 30, Arizona Cardinals 32

    Seattle Seahawks 16, LA Rams 23

    San Francisco 49ers 13, New Orleans Saints 27

    Cincinnati Bengals 10, Pittsburgh Steelers 36

    Baltimore Ravens 17, New England Patriots 23