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    Published on: December 10, 2020

    KC reflects on the lessons of chef/restaurateur Rick Bayless, and how he's bringing his skeptical attitude toward take-out into a take-out business in his Chicago restaurants.  It is all about the food - and talking to customers in a way that is musical, not pedestrian.

    Published on: December 10, 2020

    The US Federal Trade Commission (FTC) and more than 40 states Attorneys General yesterday filed a series of lawsuits that accuse Facebook of making acquisitions designed to eliminate competition, and called for the deals to be "unwound."

    The two main deals at the center of the suits are Facebook's purchase of Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion, with the plaintiffs saying that Facebook and its founder-CEO, Mark Zuckerberg, made those acquisitions because he was concerned that eventually they could have challenged Facebook's dominance.

    In 16 years, in part aided by a series of acquisitions, Facebook has become a social media behemoth worth in the neighborhood of $800 billion.

    Facebook's defense:  the deals now being challenged by the federal and state governments were approved by antitrust regulators.

    In its analysis, the New York Times writes:

    "The lawsuits, filed in the U.S. District Court for the District of Columbia, underscore the growing bipartisan and international tsunami against Big Tech. Lawmakers and regulators have zeroed in on the grip that Facebook, Google, Amazon and Apple maintain on commerce, electronics, social networking, search and online advertising, remaking the nation’s economy."

    Hostility toward big tech companies is that rare bipartisan issue, with both President Donald Trump and President-elect Joe Biden having expressed to varying degrees concerns about the power held by some technology companies.

    The Times goes on: 

    "The lawsuits against Facebook will set off a long legal battle. The company has long denied any illegal anticompetitive behavior and has a deep well of money to put toward its defense. Few major antitrust cases have centered on mergers approved years earlier … If the prosecutors succeed, the cases could remake the company, which has experienced only unfettered growth … The case is also being widely watched as a gauge for future mergers within the technology industry, which have continued to boom during the pandemic. Last month, Facebook said it was buying Kustomer, a customer relationship management start-up, for close to $1 billion."

    Axios provides some additional analysis:

    "With Google already facing an antitrust lawsuit from the Justice Department and state attorneys general, the Facebook case is another major test of the government's power to police internet giants … Eleven Republican state AGs joined the DOJ's lawsuit against Google in October, while a separate state investigation of the search giant is expected to wrap up soon."

    The story also notes that "The Facebook cases will have to wind through court. With Joe Biden taking office next month, the FTC's case will ultimately be seen through by an agency with a different lineup of commissioners and a new chairperson."

    From the Wall Street Journal:

    "The federal-state coordination signals the depth of legal pressures Facebook is facing, as well as the leading role state law-enforcement officials are playing in antitrust battles with the nation’s most powerful tech companies … In Facebook’s early stages, public attention centered on the platform’s ability to grow and make money while minting cultural touchpoints and viral trends. But in more recent years the focus has turned to Facebook’s power: its extensive collection of data and its ability to shape users’ emotional states, accelerate the spread of hateful conspiracy theories and potentially influence democratic processes including elections. The company’s sway in business has come in for scrutiny, too, over its ability to blackball particular apps, cut preferential deals and use its financial power to acquire promising startups."

    KC's View:

    Two things here.

    One, if you have not seen The Social Dilemma, an extremely effective and provocative dissection of the social media business model currently available on Netflix, you should.  It may make you think that breaking up these companies isn't nearly enough, that what we need to to do is delete those apps from our devices.  (Tom Furphy and I will be talking about The Social Dilemma on our Innovation Conversation next week.  So stay tuned.)

    Two … this makes me wonder when they're going to come for Amazon.  The issues will be different, but the hostility toward the company's e-ubiquity is tangible.

    Published on: December 10, 2020

    CNN reports that Starbucks said yesterday that it plans to have 55,000 stores in its global fleet by 2030, up from its current store count of 33,000.

    According to the story, "The company is betting that by flooding the market with new types of stores, including smaller locations and ones with drive-thru and curbside pickup, it will be able to steal more customers from the competition."

    Roz Brewer, the company's COO, told investors yesterday that "though we are growing off a large base, there is ample room to expand in regions where the Starbucks brand is less penetrated."  The current base of stores is weighted toward "high volume, high margin, suburban drive-thrus."

    "As we introduce more efficient formats, we're reducing the long lines that sometimes occur in metro locations, unlocking more sales," Brewer said.

    CNN notes that Starbucks "has been struggling to regain the business lost during the pandemic, when commuting routines were disrupted as many office employees worked from home."  Many Starbucks stores closed for a time, and when they reopened were limited to take-out service, undermining the company's core value as a "third place" for consumers.

    KC's View:

    To me, it is not the number of new stores that is most interesting.  Rather, it is the new formats that Starbucks is going to test as it pivots away from the traditional store format that has gotten it this far.  I suspect there will be some lessons therein from which a lot of retailers will be able to learn.

    Published on: December 10, 2020

    The Baltimore Sun reports that Ahold Delhaize-owned "Food Lion has completed a yearlong project to remodel its 52 Maryland supermarkets, adding more than 1,100 store employees statewide.

    "The grocer unveiled $108.2 million worth of upgrades Wednesday, part of a multiyear effort to reposition the 'everyday low price' chain in its 10-state market area. The retailer, based in Salisbury, North Carolina, is rebranding itself with its slogan 'easy, fresh and affordable'."

    According to the Sun, "All Maryland stores have been redesigned with new layouts, upgraded decor and lighting, new front-end registers and expanded product assortments that include more organic, gluten-free and local items, and expanded fresh produce and meat departments … Stores also have added more selection in deli and bakery departments and more prepared meals, grab-and go-choices, and pre-sliced deli meats and cheeses. The remodeling effort has been underway for about a year."

    Company president Meg Hamm said the company is striving "to compete not only on price but hopes to fill the niche of 'neighborhood grocery store'."

    Published on: December 10, 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 15,822,734 confirmed cases of the Covid-19 coronavirus, resulting in 296,745 deaths and 9,231,811 reported recoveries.

    Globally, the numbers are these:  69,380,480 conformed Covid-19 cases, 1,578,625 resultant fatalities, and 48,155,437 reported recoveries.  (Source.)

    •  From the Washington Post this morning:

    "For the first time in the course of the coronavirus pandemic, the United States reported more than 3,100 deaths in a single day, according to a Washington Post analysis. With overtaxed intensive care units running out of beds in many parts of the country, there was also a record number of those hospitalized with covid-19 at 106,000 on Wednesday.

    "The pandemic’s new heights in the United States came as Britain began to distribute the Pfizer-BioNTech two-dose coronavirus vaccine, which Canada approved Wednesday. An advisory panel will meet Thursday to decide whether to recommend the Food and Drug Administration approve the vaccine in the United States."

    •  From  Bloomberg:

    "For six of December’s first eight days, the trailing-week average of new coronavirus cases has been at a terrifying peak. The Centers for Disease Control and Prevention forecasts the U.S. will surpass 300,000 deaths by Christmas … The numbers are a frightening reminder of the virus’s seemingly limitless ability to grow -- and the wake it leaves. The newest round is challenging hospitals facing staff and bed shortages as they treat a disease more than twice as deadly for Americans as World War I."

    I think terrifying is the right word.  Just imagine - more people died yesterday from   causes related to the pandemic than died on 9-11.

    •  From the Wall Street Journal:

    "Infections continued to rise across the country. California, which has been struggling to contain a recent surge in infections, reported more than 33,000 new cases for Wednesday, the first time the daily number has topped 30,000, according to Johns Hopkins data.

    "California health officials are placing the greater Sacramento area under a new lockdown as intensive-care hospital beds in the region fill up with Covid-19 patients. The stay-at-home order takes effect Thursday, just before midnight, officials said. It prohibits private gatherings of any size, closes certain businesses and requires masks and social-distancing compliance in all businesses that do remain open, officials said.

    "Record numbers of newly reported cases were seen in several states. Tennessee, Virginia, Mississippi and Idaho all reported their highest levels of daily cases since the start of the health crisis."

    •  And, from Bloomberg:

    "Thirty-one countries around the globe have reserved more Covid-19 vaccine per capita than the U.S., according to a Bloomberg analysis of country vaccine agreements.

    "The U.S. Operation Warp Speed program is credited with shaving years off the typical development timeline for vaccines that are now on the brink of being deployed. But after leading that effort, the U.S. has yet to exercise some options to lock down additional supplies that could offer extra insurance against manufacturing problems or scientific delays.

    "Bloomberg has reviewed more than 80 agreements between vaccine makers and countries around the globe to reserve allocations while they are still in development. Canada, the U.K. and Australia top the list, with enough vaccine doses reserved to cover their populations several times over. 

    "The U.S., meanwhile, ranks 32nd in per-capita vaccine reservations. It is behind the 27 European Union countries that banded together to pre-order vaccines in larger quantities, and sandwiched between Chile and Japan in 31st and 33rd, respectively, according to Bloomberg’s analysis."

    •  Reuters reports that "Britain’s medicine regulator said anyone with a history of anaphylaxis to a medicine or food should not get the Pfizer-BioNTech COVID-19 vaccine, giving fuller guidance on an earlier allergy warning about the shot … The Medicines and Healthcare Products Regulatory Agency (MHRA) said there had been two reports of anaphylaxis and one report of a possible allergic reaction since rollout began."

    The UK started "mass vaccinating its population on Tuesday, part of a global drive that poses one of the biggest logistical challenges in peacetime history."

    •  The Wall Street Journal reports that "Canada became the third country to authorize use of the Covid-19 vaccine produced by Pfizer Inc. and BioNTech SE, racing ahead of the U.S. Food and Drug Administration and Europe’s main regulator to approve shots for its most vulnerable citizens.

    "Canada will now begin its immunization rollout as early as next week - a daunting challenge for a country that is the second-largest in the world in terms of land mass yet sparsely populated. The country is on schedule to begin inoculations next week, with a portfolio of vaccine candidates that it argues is among the most diverse among large economies."

    Published on: December 10, 2020

    •  Amazon said this morning that "26 new utility-scale wind and solar energy projects totaling 3.4 gigawatts (GW) of electricity production capacity" will bring its "total investment in renewable energy in 2020 to 35 projects and more than 4 GW of capacity."

    This is important for two reasons.  Amazon says that this represents "the largest corporate investment in renewable energy in a single year," as well as making Amazon "the largest-ever corporate purchaser of renewable energy."

    Here's how Amazon describes its commitment:  

    "Amazon has now invested in 6.5 GW of wind and solar projects that will enable the company to supply its operations with more than 18 million megawatt hours (MWh) of renewable energy annually. This is enough to power 1.7 million U.S. homes for one year. These projects will supply renewable energy for Amazon’s corporate offices, fulfillment centers, and Amazon Web Services (AWS) data centers that support millions of customers globally. They will also help advance Amazon’s goal to reach net-zero carbon emissions across its business by 2040."

    Amazon also said yesterday that " 13 new signatories - Atos, Brooks, Canary Wharf Group, Coca-Cola European Partners, ERM, Groupe SEB France, Harbour Air, ITV, Microsoft, Neste, Rubicon, Unilever, and Vaude - have joined The Climate Pledge, a commitment to be net-zero carbon by 2040, a decade ahead of the Paris Agreement’s goal of 2050."

    Amazon is a co-founder, with Global Optimism, of The Climate Pledge.

    Published on: December 10, 2020

    •  United Natural Foods Inc. (UNFI) said yesterday that its Q1 net sales increased six percent to $6.67 billion, while it suffered a net loss of $1 million.  Q1 e-commerce sales were up 93 percent.

    CEO Steve Spinner told analysts yesterday that "he expects many people will continue to work at home<' even as the pandemic recedes.  "At UNFI, administrators and support staff still work from home, he said, and the company has been able to sell the real estate it no longer uses—including some former SuperValu properties."

    •  In Louisville, the Courier Journal reports that c-store chain Thorntons is working with the Urban League there "to build a convenience store in the nonprofit's new West End multiuse sports and learning complex.  And the convenience store chain will donate 100% of its profits from the new store to the Louisville Urban League, leaders of both entities said Wednesday."

    In addition, they said, "Thorntons will use the site as a recruiting and training center to place employees into other Thorntons stores."

    Published on: December 10, 2020

    •  Starbucks yesterday said that it has named Mellody Hobson, co-CEO of Ariel Investments and the coffee company's vice chair, to be its new chair, succeeding Myron Ullman, who is retiring.

    The appointment takes effect in March 2021.

    Bloomberg writes that the move makes Hobson "one of the highest-profile Black directors in corporate America … Hobson’s promotion comes at a time when the top ranks of the biggest U.S. companies are still largely dominated by White men. The representation of women and people of color in U.S. companies has come under increasing scrutiny this year, especially following calls for social justice after the death of George Floyd in May. As pressure mounts for companies to improve the diversity of their leadership ranks, a number have moved in recent months to add Black women to their boards -- sometimes for the first time.

    "Only 15 companies have a female chair among S&P 500 companies where the director is not also the company CEO, according to Bloomberg data. None of those women are Black. Ursula Burns preceded Hobson as a pioneering Black female chair when she led Xerox Corp.’s board from 2010 to 2017."

    KC's View:

    A few months ago, the Wall Street Journal had an interview with Hobson as part of a series of pieces about how senior executives were dealing with the challenges of the pandemic.  In it, she reflected on some advice she got from her husband that made a difference…

    "My husband is very, very wise and in the early days of being inside, I was a little whiny and he looked at me one day and he said, 'You know Mellody, Europeans lived in bunkers for five years during World War II.'  That just hit me super hard. He was like, 'Just think about that. Bombing around you, rations, five years. It’s been a week and you have everything you need.'

    "I was disappointed in myself and a couple of days later, it crept back in for a minute and he looked at me and he said, 'How long did Anne Frank live in that attic?' Two years, I looked it up, and then she died. And then he took it a step further and he was like, 'And you’re not in a Syrian camp right now.' It’s like one of those things that anchor you in, all of the gifts you have and all of the gratitudes that you should feel. Even though I know people are really struggling right now, we’re not in a Syrian war camp. We do have to look at some of the positives here, that bombs aren’t dropping around us, and that perspective has really, really, really helped me."

    She also noted that her husband has some experience in the wisdom business:  "The joke I make with people is, I married Yoda’s dad."

    Hobson is married to Star Wars creator George Lucas.

    (Smart woman - she didn't brag about being married to Jar Jar Binks' dad…)

    Published on: December 10, 2020

    Got the following email from MNB reader Doug Peterson:

    I was really disappointed to see that you published the inaccurate letter about EBT fraud. I applaud your commitment to broadcasting many different viewpoints, but I really think you ought to draw the line at reheated false right-wing concerns about “welfare queens.”

    Most EBT users cannot use their EBT at fast food restaurants:

    “Since 1977, the Restaurant Meals Program has been an important part of the food stamps program. It enables qualified elderly, disabled and homeless SNAP recipients to buy food at authorized restaurants. Any state or county can enroll in the Restaurant Meals Program.”

    Clearly the program was designed to provide food assistance to those who cannot or may have difficulty in preparing meals or storing food, either due to their disability or lacking a home. How can anyone be against that? Maybe the writer should have provided some additional context demonstrating an actual problem. Context is important.

    Also there are claims of lack of accountability are also false. Fraud rates are tracked and are a tiny percentage of overall benefits administered. Less than a percent!

    Furthermore, the majority of recipients are women and their children. The program is highly effective and is, in my opinion, the absolute bare minimum any functioning society should do to support its neediest people. The idea that we need to somehow shame or be judgmental of how those folks use their benefits is not helpful and is not intended to improve the quality of life in this country. The program is to support people, not force them to make the same decisions others would make.

    Most folks who make these claims about EBT are silent on the personal choices made by those who benefit from other forms of “government largesse,” especially ones they likely benefit from themselves. Should the federal government supply some strict moral and ethical standards on the money it essentially gives to people in the form of the mortgage interest deduction, as an example? That particular form of government welfare costs $60 billion, not much less than what EBT costs. And most of it goes to people who don’t need it to help keep their children alive and fed. I find such hypocrisy frustrating but unsurprising.

    Again, I applaud your commitment to being a place for many views. I think blatantly false right-wing propaganda with a clear agenda has no place in any respectable publication.

    Fair enough.

    I'm actually less disappointed in myself for running the earlier email than I am for not commenting on it.  Though, to be honest, you did a much better job taking it apart than I would've.

    It so happens that I googled "welfare queen" after reading the earlier email, and while there were in fact people who took advantage of the system, there was an unfortunate tendency to characterize all people in the system as being like the few who were abusing it.  And I did wonder to myself, how many people take advantage of programs like SNAP and EBT compared to, say, the number of bankers and stockbrokers and hedge fund who exploit every loophole and break tax laws for just a little bit more money in their pockets?

    Thanks, Doug, for making an important point.

    Got the following email from MNB fave Glen Terbeek:

    If “work from home” seems to be working during the pandemic, then maybe “work from stores” should be the new model for retailers long term.  Each store's market place is different as defined by the shoppers in its trading zone and by the local and virtual competitors.  I always wondered why the “headquarters" are often located at the distribution centers.  Actually I know, it is a hangover from the central buying, distribution model to a standard store that developed the industry into saturation.  It is time to go back to the local value added real, shopper focused stores, managed locally.  Of course, this smaller store will be leveraged by virtual shopping for all “staple” items needed, for pickup or delivery. Remember, the shoppers only care about the shopping experiences in “their” market area, and care less about the chain.  It is "back to the future” in many ways.

    Yesterday we had a story about how there is a new proposal on the table in the New York City designed to close a multi-billion dollar budget deficit at the Metropolitan Transportation Authority (MTA), which at least in part has grown because of the huge drop in people commuting since the dawning of the pandemic.  The notion is simple:  Impose a $3 per package surcharge on all deliveries of packages ordered online, though food and medicine would be exempted.  Such a tax could raise more than a billion dollars a year, proponents say.

    I commented:

    If this were to pass, I have a suspicion that it might create a domino effect - cities all over America (and maybe beyond) would adopt the idea as a way of raising revenue at a time when they all are caught short.  It wouldn't just be cities - towns and villages also might impose such surcharges, where it is legal to do so, as a way of closing budget gaps.

    Three bucks a package strikes me as a little steep, but if my town wanted to charge a buck a package for all those items delivered by FedEx, UPS and Amazon trucks in a given day, and then use those funds to modernize the schools and develop plans for making it ready to meet the challenges of the mid-21st century, I'd actually be okay with that.

    There will be those who will argue that these funds will be mis-used and will lead to government bloat, and I think that is a legitimate concern.  But I think that at a time when the pandemic has imposed enormous stresses on a lot of communities' budgets, and when infrastructure is crumbling at both the national and local levels, we're going to have to find the money somewhere to pay for these issues to be addressed.

    Well, I got this last part right.

    MNB reader Steve Foege wrote:

    This is what governments do ! What’s next ?  Use your imagination.  Governments have proven their inability to balance a budget in any circumstances with any amount of money. Now would be a good time to start looking for useless/outdated programs and exempt law enforcement and K thru 12 education from the ax. Where is leadership ?  As long as we just roll over and see things as just a dollar we will all end up broke for no real gain.

    And from another reader:

    Hard to imagine that one more “usage” tax designed to maintain infrastructure today will magically be used correctly. I guess that places me in the camp with those mentioned below.

    If you want to call me a cockeyed optimist for thinking that government can and should do better in how it allocates funds from a program like this, go ahead.

    My feeling is that the schools have to be funded and modernized for the 21st century … the roads and bridges have to be repaired and/or replaced … the lights have to be kept on … the police and firefighters have to be paid … and basic services have to be provided to all citizens.  I'd rather pay lower taxes, too … but I also know that everything has a price tag.  If we can figure out ways to use the shifts that are affecting our culture and economy to pay for some of the things that these shifts make necessary … well, that certainly seems worth exploring.

    Finally, Michael Sansolo wrote yesterday about how, "ff the Covid world has taught us anything, it’s that sometimes we all need to consider 'what if' scenarios where the unimaginable becomes possible. And then we need to figure out what to do should the impossible actually take place - even if the entire exercise is, to be honest, upsetting."

    Prompting one MNB reader to write:

    I had a “when” moment during the epidemic. I used my stimulus money to buy a cemetery plot.  I hope my family sees the value in my planning.