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    Published on: November 19, 2020

    Ahold Delhaize said yesterday that, in concert with investment group Centerbridge Partners, it is acquiring pure play e-grocer FreshDirect, which is based in New York City and delivers fresh food and prepared meals there and in select markets between Connecticut and Washington, DC.

    Terms of the deal were not disclosed.  Ahold Delhaize will have 80 percent ownership of FreshDirect, while Centerbridge will own the remaining 20 percent.

    According to the announcement, "After the deal closes, FreshDirect will retain its brand name, report to a seven-person board, and continue to independently operate out of its facility in New York City."

    In a prepared statement, Ahold Delhaize CEO Frans Muller says, "With its unparalleled quality of fresh food, exceptional brand recognition, and dedicated people, (FreshDirect) has generated remarkable customer loyalty. This acquisition further propels our omni-channel evolution … The deal allows us to reach additional customers in the New York trade area and therefore will add incremental sales to the business. It further enables us to address customers’ growing preference for convenient ways to shop."

    From David McInerney, FreshDirect CEO:  “We are strong believers that the future of grocery retail involves getting customers the best quality food, exactly when they want it, with the best customer service. We have built FreshDirect into a reliable and recognizable business to serve this purpose. This transaction marks an important milestone in the continued growth of FreshDirect. I believe Ahold Delhaize’s global scale, focus on strong, leading local brands, and ability to utilize cost-of-goods synergies, will allow FreshDirect to achieve its full potential.”

    KC's View:

    There is something I don't really understand about this acquisition.

    On the face of it, the deal makes sense.  In some ways, it reminds me of how, some two decades ago, Ahold acquired Peapod … which I always thought was one of the smartest moves that the grocer made.

    But it was also about a year ago that Ahold Delhaize said that they were backing off the use of the Peapod brand, and was abandoning the midwest, which is where the brand started.

    Ahold Delhaize says it plans to keep the FreshDirect brand alive, but I'm not sure that the FreshDirect brand name has greater equity than the Peapod brand did.  So is this just a temporary strategy, and the company plans to eventually retire the FreshDirect banner?  Or is this a different set of circumstances requiring a different decision?  Not sure … but I wouldn't bet the over on how long FreshDirect lasts as a brand name.

    One other thought, if I may.

    There are essentially two kinds of acquisitions.  There's the kind in which the acquiring company respects the culture and value proposition of the business it is buying and endeavors to enable it, grow it, and learn from it, while offering appropriate synergies.  And, there's the kind in which the acquiring company acts more like a conquerer, believing that it now is going to impose its own operational, functional and cultural imperatives on the business it has bought.

    Make no mistake.  FreshDirect has had its economic issues, and needs help.  But it is a unique business with very little in common with my local Stop & Shop or your local Giant.  This can be a very smart move for Ahold Delhaize, but they have to be very smart about how they proceed.

    Published on: November 19, 2020

    Target said yesterday that its third quarter online sales grew 155 percent compared to the same period a year ago, while same-store sales were up 9.9 percent.

    The retailer said that third-quarter net income rose to $1.01 billion, from $714 million a year earlier, while total revenue grew 21% to $22.63 billion from $18.67 billion last year.  CNBC says that "so far this year, the company said it’s picked up $6 billion in market share, with $1 billion in share gains coming during the latest quarter."

    CEO Brian Cornell tells CNBC that transaction data shows that customers are shopping across categories and "taking advantage of our one-stop solution."

    KC's View:

    Target continues to over-perform expectations, and if I'm not mistaken, it appears to be doing so by playing its own game and not engaging in a tit-for-tat with the likes of Walmart and Amazon.  I'm sure they're paying attention to the competition, but Cornell and his folks seem very focused on executing on their own strategies.

    Which is the best way to go.

    Published on: November 19, 2020

    From the New York Times this morning:

    "New claims for unemployment insurance remained elevated last week amid a surge in coronavirus cases, the government reported Thursday.

    "More than 743,000 workers filed new claims for state benefits last week, before adjusting for seasonal factors, an increase of 18,000 from the week before. With seasonal swings factored in, the latest figure was 742,000, virtually unchanged from the previous week, the Labor Department said.

    "Claims had drifted lower in recent weeks but remain far above the levels reached in previous recessions. What’s more, the coronavirus resurgence in much of the country in recent weeks has caused new restrictions on business activity, leading to more job cuts."

    Published on: November 19, 2020

    The Washington Post this morning writes that "a sizable number of the recipients of federal aid programs such as Medicaid and food stamps are employed by some of the biggest and more profitable companies in the United States, chief among them Walmart and McDonald’s, according to a new report from Congress’s nonpartisan watchdog … Walmart was one of the top four employers of SNAP and Medicaid beneficiaries in every state. McDonald’s was in the top five of employers with employees receiving federal benefits in at least nine states."

    You can read the entire story here.

    Published on: November 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…

    •  The United States now has had a total of 11,876,240 confirmed cases of the Covid-19 coronavirus, resulting in 256,311 deaths and 7,168,482 reported recoveries.

    Globally, there have been 56,674,523 confirmed coronavirus cases, with 1,356,824 fatalities, and 39,470,929 reported recoveries. (Source.)

    •  On MSNBC yesterday, Assistant Secretary of Health at the Department of Health and Human Services (HHS) Dr. Brett Giroir said, “Right now, we are in an absolutely dangerous situation that we have to take with the utmost seriousness … This is not crying wolf. This is the worst rate of rise in cases that we’ve seen in the pandemic in the United States and right now there’s no sign of flattening.”

    At the same time, a report from the White House coronavirus task force said that the nation is facing “aggressive, unrelenting, expanding broad community spread … reaching most counties, without evidence of improvement but rather, further deterioration.”

    •  The Wall Street Journal reports that pandemic-related hospitalizations "hit another record, their ninth in a row, with 79,410 people hospitalized because of the disease as of Wednesday, according to the Covid Tracking Project. The number of people in intensive care also hit a record high of 15,350."

    The Journal goes on:

    "As the latest surge in the coronavirus pandemic sweeps the U.S., states have been implementing a patchwork of new restrictions to combat its spread. Kentucky, Minnesota, Wisconsin and Illinois on Wednesday announced various measures including extended mask mandates, bar and restaurant closures and limits on private gatherings.

    "The rise in deaths, while still climbing, hasn’t been as sharp as in previous surges. Epidemiologists and public-health leaders say many factors have contributed to a lower mortality rate than in previous months, including earlier detection due to increased testing availability, more younger people becoming infected, and better treatments and therapeutics to combat the virus."

    And, the story says, "New York City Mayor Bill de Blasio said Wednesday that schools in the nation’s largest school district would temporarily close Thursday, at least through the end of the month."

    •  From the Los Angeles Times this morning:

    "The COVID-19 pandemic is hurtling toward crisis levels in Los Angeles County, with officials saying hospitals are in danger of being overwhelmed and significant new restrictions are possible.

    "The dire picture painted Wednesday illustrates the ferocity with which COVID-19 has roared back to life over the past few weeks, and underscores the grim consequences facing the county if that trend continues … At top of mind for many is how the significant spike in cases will strike the county’s healthcare system."

    •  Also from the Wall Street Journal this morning:

    "Around 50 million Americans are expected to travel for the Thanksgiving holiday next week. Public-health officials are begging them to stay home.

    "As the pandemic enters its ninth month in the U.S., many families are grappling with whether to meet up with friends or family for traditional celebrations. But the holiday comes at a particularly precarious time in the current virus surge, and doctors and government officials say even gathering with one other household is too much of a risk … The warning has taken on a more urgent tone in recent weeks, shifting from officials discouraging travel and large gatherings to outright pleading with the public to stay put and stay away from others."

    The story points out that "last year, around 55 million Americans traveled for Thanksgiving. AAA forecast a 10% decline in holiday travel this year, to 50.6 million. Air travel is expected to drop by half - but that still means about 2.4 million people making their way through airports."


    "Last week, the U.S. Centers for Disease Control and Prevention released guidance saying any Thanksgiving celebrations including people outside of the household should be small and outdoors. The agency also recommended people stay home, saying travel increases the chance of getting and spreading Covid-19.

    "Enforcing mask wearing, social distancing and other guidelines for small, celebratory gatherings has been a challenge for public-health directors—especially as the pandemic wears on."

    •  From the New York Times this morning:

    "With coronavirus cases rising across the country, retailers are preparing for another rush from shoppers worried about new lockdowns and pandemic shortages.

    "But many retail workers, heralded as heroes during the first wave of the pandemic, are not being provided with the same level of bonuses and raises this time, even as the health risks for them increase. Even as some companies have announced new hazard pay in recent days, some industry observers say many retailers are not sharing enough of the profits they have earned during the pandemic with their workers, but are instead benefiting shareholders through stock buybacks."

    Cited in the story are Amazon, which said that no new hazard pay is planned … Walmart, which "has not raised wages broadly as a way to reward workers during the pandemic" … and Kroger, which "offered raises at the start of the pandemic and bonuses through mid-June, but those have ended. Employees nationwide have staged protests outside stores asking Kroger to reinstate the pay, especially given its booming business — sales are soaring, and it recently said its 2021 business results 'will be higher than we would have expected prior to the Covid-19 pandemic.' This week, the company told workers that they would receive discounts at its fuel centers and a $100 store credit as a 'holiday appreciation'."

    To paraphrase Forrest Gump, Essential is as essential does.  If things get hairy during the long winter of the pandemic, stores are going to need people who they may be at risk of disenfranchising (though, to be fair, an increased unemployment rate may give retailers a stronger bargaining position).   Still, I'd be thinking hard about how to keep my employees engaged and invested.  You reap what you sow.

    •  The Iowa Capital Dispatch  reports that "a wrongful death lawsuit tied to COVID-19 infections in a Waterloo pork processing plant alleges that during the initial stages the pandemic, Tyson Foods ordered employees to report for work while supervisors privately wagered money on the number of workers who would be sickened by the deadly virus … The lawsuit alleges that despite the uncontrolled spread of the virus at the plant, Tyson required its employees to work long hours in cramped conditions without providing the appropriate personal protective equipment and without ensuring workplace-safety measures were followed."

    Tyson has said it "vigorously disputes" the allegations.

    The story, if accurate, is appalling.  You can read it here.

    •  Wonder Woman's Lasso of Truth apparently has encountered an undeniable fact - Covid-19 is stronger than it is.

    Variety reports that the much-anticipated Wonder Woman 1984, a sequel that was expected to be a major blockbuster when it was supposed to open earlier this year, now is going directly to at-home streaming.

    "Warner Bros. announced that the superhero sequel will debut on the streaming service HBO Max on Dec. 25, the same day it will open in U.S. movie theaters," the story says.

    “As we navigate these unprecedented times, we’ve had to be innovative in keeping our businesses moving forward while continuing to super-serve our fans,” said Ann Sarnoff, chair and CEO of WarnerMedia Studios and Networks Group, which includes Warner Bros. Pictures. “This is an amazing film that really comes to life on the big screen and, working with our partners in the exhibition community, we will provide that option to consumers in the U.S. where theaters are open. We realize that a lot of consumers can’t go back to the movies due to the pandemic, so we also want to give them the option to see Wonder Woman 1984 via our HBO Max platform.”

    At a cost of $200 million to produce and almost as much to market, Wonder Woman will have to generate a lot of new HBO Max subscriptions in order to come close to recouping its cost.  But the studios, like a lot of business, are facing the very real possibility that their traditional business model no longer is viable, and they have to find new ways to approach the business … not t mention compete with the likes of Amazon Prime Video and Netflix for eyeballs.

    •  Willamette Week has the story of how one Portland, Oregon, business is trying to attract customers during the statewide freeze that has been instituted.

    According to the story, "Shine Distillery and Grill will open a 'drag-thru': While customers wait for their takeout orders, they can watch drag performances from their cars … Drag queens Bolivia Carmichaels and Lulu Luscious will perform from Shine's garage-style doors. Shine already had a sound system, and has installed a makeshift, greenhouse tunnel along North Williams Avenue, where customers can idle in their cars while they watch the show and wait for their to-go orders. Since Shine operates more like a brewpub than a bar, it can remain open for takeout during the freeze, offering pub food, cocktail kits and bottles of housemade booze."

    Whatever works.

    Published on: November 19, 2020

    CNBC reports that "the biggest U.S. mall owner Simon Property Group said Tuesday it is partnering with Narvar to give customers the option of dropping off returns at the concierge desk at a half-dozen of its malls, including The Mills at Jersey Gardens in New Jersey and the Forum Shops at Caesars Palace in Las Vegas. The service is kicking off during the holidays but will last indefinitely, the companies said.

    "To start, about two dozen retail brands will be participating in the platform, the companies said, including Levi’s, Gap, Vera Bradley and Dockers. When initiating a return online, customers for these brands will now begin to see nearby Simon malls as an option, in addition to putting a return in the mail. They’ll simply bring a QR code to Simon’s guest services desk, where a Simon employee will handle the rest of the returns process."

    The arrangement is similar to how Navar and other third-party returns platforms like Happy Returns are working with companies like Walgreens and FedEx to facilitate the process of sending back unwanted merchandise to online retailers.

    KC's View:

    Malls are seeking relevance wherever they can find it, and so I guess that serving as  a kind of real-life Island of Misfit Toys makes as much sense as anything.

    Though, there's a lot of other ways to send stuff back these days.  In some ways, I'd guess that going to the mall would be my last choice, not my first.

    Published on: November 19, 2020

    The Wall Street Journal this morning reports that Retail Ecommerce Ventures LLC, which recently has acquired assets from dead-brand-walking companies such as Pier 1 and Modell's, is buying RadioShack's brands and online business.

    Terms of the deal were not disclosed.

    The story notes that "REV also acquired RadioShack’s patents and private label brands, such as Enercell batteries and Powerhorn speakers, as well as the trademarked slogan 'You’ve Got Questions, We’ve Got Answers.' The purchase allows REV to expand into the electronics category for the first time."

    RadioShack's previous ownership, General Wireless IP Holdings, reportedly will retain a minority stake in the company.

    The Journal says that RadioShack primarily exists online, though there are some 400 stores that carry the banner but are independently owned.  There also are about 80 store-within-a-store RadioShack counters inside Hobby Town stores.

    KC's View:

    I guess it all depends on the vision for how to reinvent the company's value proposition and make it a preferred option - tough to do when there is so much competition - instead of a last-ditch alternative.  Hard for me to imagine, but I'm willing to be surprised.

    Published on: November 19, 2020

    •  The Financial Times reports that "Amazon is laying off dozens of R&D and manufacturing staff working on its much-anticipated delivery drone project, as the company turns to outside help to get its heavily delayed ambitions off the ground."

    Amazon reportedly has "reached tentative deals with two external manufacturers to build component parts of its long-awaited drone, billed as a future method of delivery for smaller Amazon packages."

    Published on: November 19, 2020

    •  CNBC reports that "Starbucks is raising hourly wages for its baristas as the restaurant industry braces for a higher minimum wage when President-elect Joe Biden takes office.

    "Starting Dec. 14, baristas, shift supervisors and cafe attendants will receive a pay increase of at least 10% if they were hired before Sept. 24, according to an internal memo obtained by CNBC. Employees who have worked at a company-operated location will receive an increase of at least 11%. And starting wages will be hiked 5% to help cafe managers find more staff."

    •  Home Depot continues to show strong fiscal results as many people continue to spend a lot more time at home that unusual because of the pandemic,. as Q3 revenue  rose to $33.54 billion, up 23% from a year earlier.  Same-store sales were up 25 percent, as net profit was $3.43 billion, compared with a profit of $2.77 billion in last year’s third quarter.

    Published on: November 19, 2020

    It all started with an email in which an MNB reader expressed the opinion that "fear-mongering is the new news," and that the pandemic "should not grind our lives to a halt … We should be able to function and survive without ruining our jobs, relationships, travel & recreation, and everything else that makes life worthwhile. Politicians who believe that shutdowns are necessary and try and take away our freedoms need to be voted out of office. They obviously have a hidden agenda. We need to be able to live our lives and not have to hide in a closet!"

    I took his point, but disagreed - I said that shutdowns are only necessary when people don't act like mature adults and wear masks, wash their hands and practice appropriate physical distancing.  It also means making sacrifices sometimes - I cited the case of my son, who lives in Chicago (where cases are spiking) and decided not to come home for Thanksgiving because he did not want to risk bring home the virus.

    He came back at me in an email I posted yesterday:

    Thank you for confirming our views. You are living in hiding, and you might think you are doing the right thing. I guess when someone has a different opinion that doesn’t agree with yours ... then they are selfish and unAmerican? 

    Our kids are coming home for the Holidays .. these years are more important to us as we get order since there may be fewer opportunities. Temps will be talked and masks will be worn... common sense.... but well worth the effort .

    To which I responded:

    I hope you find their visit worth the effort, and that, in the end, you find not just that there are fewer opportunities going forward, but fewer years because of your reckless behavior.

    When I re-read that statement now, I think I understand why I got the following email:

    What a statement - you hope people die because they want to be with family? You are a prick. Plain and simple. You and your family have chosen not to be together - good for you - so no one else should and you hope they die because of it.

    You are a microcosm of everything that is wrong with society as a whole.  Attempt to shame those who think different than you. ANTIFA with a smile. Shut down - metaphorically as well as actually - this is your go to.

    A man neutered. Not a pretty sight. 

    Let me just reply by saying that I am mortified by the thought that anyone would've believed that I was hoping anyone would die.  I was actually trying to say the opposite - that I hoped he would not regret his decision and that his holiday get-together would not be proven to be a spreader event.

    I should've written it this way:

    I hope you find their visit worth the effort, and that, in the end, you don't find that as a result there are fewer opportunities and fewer years because of your behavior.

    Still harsh, I suppose.  Certainly judgmental.  But I don't think any more judgmental of this reader and people who agree with him than their opinion of me is.

    I changed the passage after I got the above email.  My original language was clumsy, and I have only myself to blame for that.  I work without a net, and sometimes I fall.  Like this time.

    Mea culpa, mea culpa, mea maxima culpa.

    On another subject (thank goodness!) - Amazon's new pharmacy offerings - from MNB reader Mike Bach:

    Good interview with Furphy.  Amazon, being imbedded inside retailers, is also a membership grab opportunity. I do think they need to lead from the front and install Amazon Pharmacy in every Whole Foods store.  Why wouldn’t Kohls, who is already processing Amazon returns, consider this to bolster their traffic?

    Most company sponsored health care requires 90 day mail-in after the initial fill at a local drug store, for long term use.  Its ingrained in the culture of Americans. Its now possible, through prime, that 90 day scrips are not necessary, improving the cash flow and supply chain for everyone.

    The biggest downside I see is that some Rx users need to have some counsel with Pharmacist so the easier this can be made, the better.  Express Scripts and others do little of this as well.

    Other downside – what does CVS and Walgreens do to reinvent themselves?  ( “Timing is everything”; maybe Larry Merlo is getting out at the right time?)  That’s a lot of stores are now becoming a little less essential in our lives. Beauty, photo and greeting cards are not massive trip creating categories. One already has to watch for expired goods inside these stores because traffic is down.

    I’m already seeing real estate investors, which have been getting a guaranteed payment for investing in specific sites, to being told by Walgreens they will move their store unless the investor agrees to a lower payment. A good site means investor can say “I don’t agree” and force Walgreens hand.  Not so with the poorer sites. 

    Addressing the coronavirus from another angle, one MNB reader wrote:

    Reading that Sen. Grassley had tested positive I was curious if there were any COVID statistics of the number of positive cases in Congress by political party?  I found my answer … Here is the breakdown:

    Senate - 6 positive cases, all Republicans   

    House - 21 positive cases, 14 Republicans, 7 Democrats.

    This includes Rep. Nydia Velázquez (NY-7) who was diagnosed with presumed coronavirus infection but did not get a COVID test and Resident Commissioner Jennifer González-Colón (Puerto Rico's At Large District) who, as a delegate with limited voting privileges, can currently vote in committee and in certain votes on the House floor, but not if their vote would be decisive.

    On the subject of consumers choosing retailers based on how they deal with data issues, MNB reader Andy Casey wrote:

    These issues have been around since the earliest days of data based marketing and smart companies pay serious attention not only to getting the policy right but communicating both that and the benefits to customers. There is a real difference when your local supermarket lets you know items you buy frequently are on sale and for example, when people casually Google something and find themselves inundated with offers for weeks afterward. Relevance is key and why the former is seen as helpful but the latter is just seen as intrusive, and frankly, weird.

    Published on: November 19, 2020

    It is time to play the game once again - what franchise will Theo Epstein turn around next?

    ESPN reports that Epstein, who now has run two organizations that won World Series championships after decades-long droughts, the Boston Red Sox and the Chicago Cubs - announced that he is leaving the Cubs after nine seasons as the club's president of baseball operations.

    Epstein has long said that he believes a decade in such jobs is about right, and that the Cubs need to reach decisions better made and executed by someone planning to stay in the job.

    KC's View:

    If Epstein has a hankering to turn around the New York Mets, it would make a lot of fans very, very happy.  Just sayin'…

    Published on: November 19, 2020

    Amazon Prime Video currently is featuring the video version of a Broadway show entitled "What The Constitution Means To Me," written and performed by Heidi Shreck.  I'd heard a little bit about this show, but hadn't paid much attention … but when it popped up as I was scrolling around the other night, I thought I'd give it a shot.

    Great decision.  "Constitution" starts from a real place.  Shreck, when she was a teenager, won a series of American Legion contests - enough to pay for her college tuition - in which she talked about the meaning of the US Constitution.  She isn't a teenager anymore, though, and she used her own personal history as a starting point in which to offer a highly personal and revealing perspective on what the Constitution does well and what it does not do, sometimes inadvertently and sometimes deliberately.

    "Constitution" can be very funny and very sad, sometimes almost at the same time, and it has an excellent way of illustrating big issues in a granular and impactful way.  And it ends the way Shreck's story began - with an actual debate about whether the US needs a new Constitution.

    However you might answer that question, 'What The Constitution Means To Me" is highly provocative - enough so that it cannot help but make think about the US Constitution in a whole new light.

    The timing is pretty good, too.

    I have a confession to make.  I like old-fashioned network television police procedurals.  They tend to be formulaic and don't often surprise, but an episode of a show like "NCIS" or "Castle" or "Stumptown" or "The Rookie" can be the TV version of comfort food.

    Last night, "NCIS" returned for the new season, and I must admit that I found it enormously comforting.  The mystery had nothing to do with the pandemic, nobody was wearing masks, and it was a reminder, however temporary, of a less complicated time.  It was a comforting hour, and I'll be back next week.  For sure.

    One of my favorite styles of wine is Chiaretto - this Italian rose seems to work really well with pastas and seafoods, but it is hard to find here in Connecticut.  So it was lovely to have a new one - the Zeni 2018 Classico Vigne Alte, which has just a bit more punch than some versions, as is a deal at less than $15.

    I also tried the 2018 Rotation Cellars Cabernet Sauvignon from California, which is just rich enough to go with the beef stew I made.

    All good.

    Published on: November 19, 2020

    In addition to today being MNB's birthday, tomorrow is Mrs. Content Guy's birthday.  It also is a day on which, just three weeks after her knee replacement surgery, she needs a little morning help from me … and so I'm going to take the day off.

    The good news is that for one day, you won't have to read the unrelentingly grim Covid-19 stories that I've been posting since March (at least, not here).  The bad news - Monday's coverage probably will be as bad, or worse.

    But we all can use a day off.

    So have a good weekend … I'll see you Monday.

    Stay safe.  Be healthy.