Published on: January 7, 2021
John Mackey, founder and CEO of Whole Foods, gave an interview. In KC's view, it fairly dripped with condescension and no small amount of hypocrisy ... and he has some thoughts.
Day: January 7, 2021
- KC's View:
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Whatever the numbers, it doesn't take a ton of imagination, much less a survey, to conclude that a) people have shopped in stores less since the pandemic hit, and b) people would love to go back to stores but are more likely to do so if presented with a reason. Y'know, like a more compelling shopping experience. (I can certainly understand why a "digital signage and in-location experience management platform" would want to come to this conclusion.)
In fact, that's been the argument here pretty much since day one - and that the pandemic actually gives retailers the opportunity to re-evaluate their value propositions and figure out what is both essential and compelling, so they can make changes in their business models.
The real challenge is to create a new store model - it cannot simply be the box of the past. It has to be something more adaptable, more nimble, more fluid.
One conclusion that I did find to be a little jarring was the notion that the pandemic actually has reduced brand loyalty, which strikes me as being counterintuitive.
Interestingly, National Public Radio's Marketplace had a story about how online shopping and the "fast and efficient behavior" created by it actually has illustrated why the 40,000 SKUs carried by most physical stores may be too many.
Burt Flickinger, managing director at Strategic Resource Group, told Marketplace that "when ordering online for delivery or curbside pickup, 'people will buy the brands that he or she knows. They might not buy new brands'." And Doug Baker of FMI-The Food Industry Association, told Marketplace that "a website search bar lets shoppers focus only on what they want," and that a result has been that manufacturers “immediately started looking for slower-moving items that they could suspend.”
All of which sounds like greater brand loyalty to me.
- KC's View:
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This is a bad idea.
Not giving front line retail employees hazard pay. That's a good idea. If the industry really thinks they are essential, then they ought to be treated that way. Five extra bucks an hour sounds entirely reasonable to me.
But I don't think a county government ought to be getting into the business of mandating that one retail segment has to pay its people more than those in other segments for limited and specific periods. That strikes me as bad public policy.
Smart retailers will do the right thing for at-risk employees, and will be rewarded, I think. The other ones … well, they'll reap what they sow.
- KC's View:
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Fair enough.
The fact that it is national, not just if California, in some ways makes it worse. And I guess I would ask the following question:
If the goal is to "truly make eCommerce a competitive advantage," how is it an advantage if you are using the same delivery services utilized by your competition … and in fact may be enabling eventual competition by some of the entities with which you are contracting?
Just asking.
- KC's View:
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I have to imagine that Safeway and every other retailer in the DC market have to be thinking about what they're going to do in two weeks, when the Biden inauguration is scheduled to take place.
I'd like to think that all will peaceful, and that somehow law enforcement will have arrested and charged everybody who stormed Capitol Hill yesterday. But that's unlikely, and so the horrors that we saw yesterday in DC are likely to be repeated in a few weeks … those people were domestic terrorists, this was an insurrection, an attack on democracy, and these things are not put down easily.
Published on: January 7, 2021
Raydiant, which describes itself as a "digital signage and in-location experience management platform," is out with its second annual State of Consumer Behavior Report, concluding that "the public still craves in-location experiences," that despite the pandemic and its implications, "there will always be a large segment of the money-spending public that wants to experience life outside of their computer screens.
"The goal for big box stores, retailers, entertainment venues, hoteliers, restaurants, and others who depend on in-person experiences remains the same: Create an experience so memorable that a customer will put aside their concerns and return to your location."
Here are some of the survey's findings:
• "Many consumers still prefer shopping in person. 46% of respondents said that given the choice, they prefer to shop in person rather than online. This represents a 9% decline from our previous State of Consumer Behavior 2020 report."
• "Customers still prefer the experience of interacting directly with products. 33% of respondents prefer shopping at physical stores because they like to see and feel products, while 26% enjoy the overall experience of shopping in person."
• Because of the pandemic, "40% of respondents have visited physical locations less frequently since Covid-19 hit."
• "Brand loyalty is lacking. 48% of respondents said they have replaced products they typically purchase at physical stores with competitors’ online alternatives. 25% said that they switch brands more often today than ever before."
• "Positive offline experiences can make a big impact. 90% of consumers say they are more likely to return again, 61% of consumers say they are likely to spend more at a location and 65% of consumers say they are likely to spend more online with a brand - all if they have a positive offline experience."
Published on: January 7, 2021
KABC-TV News reports that the Los Angeles county Board of Supervisors voted 4-0 to "request the drafting of a hero pay ordinance" that would mandate that supermarket and drug store chains in the county pay front line employees an extra $5 an hour.
If the ordinance is approved, which could happen as soon as January 26, it would be in force for 120 days.
"The COVID-19 pandemic has made clear the importance of industries deemed essential, including grocery and drug retail employees," said Supervisor Hilda Solis, who co-authored the motion. "Since the beginning of the pandemic, these workers have continued to show up to their jobs despite the dangers of being exposed to COVID-19."
Published on: January 7, 2021
Got a note yesterday from Chris Wilcox Anderson, Albertsons' GVP, Communications, in which she addressed the MNB stories about the retailers' California banners deciding to outsource its delivery functions:
Just want to offer a little clarification on the third party delivery story: this is in several market areas across 10 states – not just California – and DoorDash is one of the providers but not sole provider. All of these positions are non-union.
In case it’s helpful – below is the full statement.
In early December, Albertsons Companies made the strategic decision to discontinue using our own home delivery fleet across a variety of market areas and states, beginning February 27, 2021. Our HR teams are working to place all impacted associates in stores, plants, and distribution centers.
We will transition that portion of our eCommerce operations to third-party logistics providers who specialize in that service. While we know that this move will help us create a more efficient operation, it wasn’t a decision we made lightly or without a great deal of consideration.
This decision will allow us to compete in the growing home delivery market more effectively. Since the COVID-19 outbreak, our eCommerce business has risen to new heights and has become more strategically important to Albertsons Companies. Our goal is to truly make eCommerce a competitive advantage.
Regarding the associates who are currently in these positions: While it’s too soon to speculate how many associates will ultimately accept positions, Albertsons Companies Divisions plan to offer positions to each impacted associate interested in working in the Divisions. We can tell you that all associates who stay in their current roles through the end of this transition but choose to leave may be eligible to receive severance benefits according to the company’s plan – we will work with them on their individual situation. We are also offering an incentive bonuses to associates in those positions who stay through February 27.
Published on: January 7, 2021
The Washington Informer reports that Safeway closed all 12 of its Washington, DC, locations yesterday at 4 pm, with plans to reopen them at 7 am this morning.
The move came as an insurrectionist mob stormed Capitol Hill, forcing the US Senate and House of Representatives to flee their chambers and suspend debate surrounding the counting of Electoral College votes certifying the election of Joe Biden as the 46th President of the United States.
The mob was removed from the halls of Congress during the evening, and both the House and Senate returned to their chambers and completed the vote certification in the early morning hours.
The Safeway closures came as DC Mayor Muriel Bowser ordered a citywide curfew from 6 p.m. to 6 a.m. Thursday.
Published on: January 7, 2021
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, here are the updated pandemic numbers: 21,857,616 confirmed cases of the Covid-19 coronavirus … 369,990 deaths … and 13,024,142 reported recoveries.
Globally: 87,744,324 confirmed coronavirus cases … 1,893,473 deaths … 63,212,429 reported recoveries. (Source.)
• From the Wall Street Journal:
"The number of people hospitalized in the U.S. due to Covid-19 hit a record as newly reported coronavirus cases rose to over 250,000.
"More than 132,000 people were hospitalized because of the disease as of Wednesday, according to the Covid Tracking Project. Intensive-care units were also stretched, with more than 23,700 patients in ICUs across the country.
"The U.S. daily case total for Wednesday was higher than the nearly 230,000 new coronavirus cases reported Tuesday, according to data compiled by Johns Hopkins University. The nation also reported 3,865 fatalities for Wednesday, a single-day record, according to Johns Hopkins."
• The New York Times writes that "with no robust system to identify genetic variations of the coronavirus, experts warn that the United States is woefully ill-equipped to track a dangerous new mutant, leaving health officials blind as they try to combat the grave threat.
"The variant, which is now surging in Britain and burdening its hospitals with new cases, is rare for now in the United States. But it has the potential to explode in the next few weeks, putting new pressures on American hospitals, some of which are already near the breaking point."
The problem, the Times writes, is that "the United States has no large-scale, nationwide system for checking coronavirus genomes for new mutations, including the ones carried by the new variant. About 1.4 million people test positive for the virus each week, but researchers are only doing genome sequencing — a method that can definitively spot the new variant — on fewer than 3,000 of those weekly samples. And that work is done by a patchwork of academic, state and commercial laboratories.
"Scientists say that a national surveillance program would be able to determine just how widespread the new variant is and help contain emerging hot spots, extending the crucial window of time in which vulnerable people across the country could get vaccinated."
• CNBC reports that "CVS Health and Walgreens said Wednesday they are on track to complete the first round of Covid vaccine shots at nursing homes across the country by Jan. 25.
"The federal government partnered with the two pharmacy chains to administer the shots to residents and staff in long-term care facilities … Less than 1% of the U.S. population lives in long-term care facilities, but they account for about 38% of all Covid-19 deaths in the country as of Dec. 31, according to the Covid Tracking Project.
According to the story, "With their updates this week, the companies offered a bright spot for a vaccine rollout that has been slower than federal officials and public health officials anticipated. The U.S. has distributed just over 17 million doses, and 4.8 million people have been given their first shot as of Tuesday — far short of the country’s original goal of immunizing at least 20 million people by the end of 2020."
• From the Washington Post:
"The federal government is accelerating a plan to distribute coronavirus vaccines through retail pharmacies, Health and Human Services Secretary Alex Azar said Wednesday.
"In a briefing with reporters, Azar and other officials from Operation Warp Speed acknowledged the slow rate of vaccine administration and said the administration is taking 'immediate action' for states to speed up getting shots into arms."
According to the story, "The partnership with more than 40,000 pharmacy locations from 19 chains will be one way for states to allocate doses of vaccine directly to these locations, Azar said. The original plan had been to ramp up the program over time because there isn’t enough vaccine supply to spread across all the pharmacies.
"The CDC sent instructions to state health departments this week to allow states to 'turn on' the process. The CDC is recommending that one or two pharmacy partners in each jurisdiction be selected to receive vaccine as part of the program, according to information sent to the states."
• Reuters reports that "the US Centers for Disease Control and Prevention (CDC) said on Wednesday it is carefully monitoring allergic reactions to the coronavirus vaccines from Pfizer Inc and Moderna Inc and urged individuals who had a serious reaction not to get the second dose.
"In a conference call with reporters, the U.S. public health agency said allergic reactions are occurring at a rate of 11.1 per 1 million vaccinations. That compared with flu vaccines, in which such reactions occur at a rate of 1.3 per 1 million shots.
"The severe reactions are still 'exceedingly rare,' they said, stressing the need for people to get vaccinated when the shots become available to them, given the threat of death and serious disease from the coronavirus that has already claimed more than 357,000 lives in the United States alone."
• From the Washington Post:
"The mutant variant of the novel coronavirus first seen in Britain is likely to be present in much of the United States. Although the variant has so far been detected in a very small fraction of infections, it shows signs of spreading and may become significantly more common in coming weeks, according to the Centers for Disease Control and Prevention and infectious-disease experts.
"The cases have been mostly isolated: One in New York, one in Florida, one in Georgia and two in Colorado. The exception has been California, and specifically San Diego County, where a robust surveillance operation has found 32 cases of the variant.
"National Institutes of Health Director Francis Collins told the Washington Post on Wednesday: 'I would be surprised if that doesn’t grow pretty rapidly.'
"There is no evidence that the variant, which has recently been detected in more than 30 countries, carries a greater risk of severe disease or death. But the appearance of coronavirus variants, including another mutation-laden variant that has shown up in South Africa, presents a challenge for every country hoping to crush the pandemic.
"A more transmissible virus could drive more patients into hospitals and boost the covid-19 death toll. It also could prolong the march toward herd immunity."
• USA Today reports that "Amazon is now selling COVID-19 tests for customers to use at home as cases continue to rise in the U.S.
"The DxTerity COVID-19 Saliva at-Home Collection Kit detects the presence of the virus but does not confirm immunity or detect antibodies. DxTerity's molecular-based PCR test received approval from the Food and Drug Administration last month. The test differs from the quicker and less expensive antigen tests, which use a nasal swab or throat swab to detect the virus.
"A single COVID-19 testing kit is listed for $110, and a 10-pack bundle is available for $1,000. "
• The Washington Post reports that "students on the campus of the University of California at San Diego can now access free, self-administered coronavirus tests at vending machines, in a first-of-its-kind approach that eases the burden on staff and provides more flexibility as the school scales up testing.
"The 11 machines were introduced Jan. 2 as the school switches from biweekly to weekly required testing for the 10,000 students on campus (about a quarter of UC-San Diego’s total enrollment.) The school plans to install nine more machines in the coming weeks."
The paper says that "students use their school ID cards to obtain tests from the machines, swab their nostrils and drop off their samples. The samples, once collected, would be analyzed at campus labs within 72 hours. Thousands of students and employees have taken advantage of the machines, UC-San Diego Chancellor Pradeep Khosla said in an email."
• Placer.ai is out with a new study about the impact of the pandemic on the restaurant industry, which, it notes, "has been completely upended by COVID, though with dramatically different effects on sub-sectors. QSR restaurants benefitted from their strength in drive-thru, delivery, and takeaway allowing them to offset losses and even drive strength during the pandemic. And the year to come could be especially well suited for their offerings as economic uncertainty could further boost the appeal of their high-value offering.
"But what about sit-down chains? There is a real concern that the current environment could cause further damage to an industry that had already been facing challenges prior to the pandemic."
Unsurprisingly, the company says in a blog posting, "the current resurgence of COVID cases has been especially unkind to the sit-down restaurant sector," with major chains seeing significant traffic decreases, sometimes (as in the case of Denny';s, seeing decreases of as much as 50 percent during certain weeks.
• Sears is back. But not as a retail entity.
The Wall Street Journal reports that "public-health agencies and health-care organizations from Iowa to Florida are using some of the hundreds of closed Sears department stores to help with the nationwide effort to administer Covid-19 vaccines to millions of people.
"Vast floor plans, sprawling parking lots and easy access to highways that attracted property developers and shoppers during the retailer’s heyday are drawing the attention of health officials. The stores are well-known destinations, and house enough space for workers and vaccine recipients to adhere to social-distancing guidelines."
Published on: January 7, 2021
The Wall Street Journal reports that "Trader Joe’s has signed a lease to open a store in Harlem, marking the grocery-store chain’s 13th location in New York City."
The 28,000 square foot store is scheduled to open in 2023 and "will be an anchor tenant for the Urban League Empowerment Center, a $242 million, 17-story development project that closed on financing in July. The hub will include a civil-rights museum, the new headquarters for the civil-rights organization National Urban League, office space and at least 170 units of housing for low-income New Yorkers."
The Journal writes that "the store’s commitment to Harlem is a boost for the neighborhood, which has enjoyed booming retail and home values in recent years but has also been hard hit by the opioid epidemic and coronavirus pandemic."
Published on: January 7, 2021
The Wall Street Journal reports that "Walgreens Boots Alliance Inc. said it agreed to sell the majority of its pharmacy wholesale unit to AmerisourceBergen Corp., a move it said would help the drugstore chain to better focus on its retail pharmacy business and health offerings."
AmerisourceBergen reportedly will pay $6.5 billion for the wholesale business, Alliance Healthcare.
Reuters reports that Walgreens "has an agreement to source branded and generic drugs from AmerisourceBergen in the United States and that will be extended by three years until 2029."
Published on: January 7, 2021
With brief, occasional, italicized and sometimes gratuitous commentary…
• Interesting story from CNBC about how privacy settings being created by Apple for its iPhones are likely to have a considerable impact on the likes of Facebook and Snap.
Here's how CNBC frames the story…
"Apple’s change will take a privacy option for users to share their advertising ID, or 'IDFA,' that was previously buried deep in users’ phones and put it front and center when they open an app. Before using an app such as Facebook that tracks your data for targeted advertising, you’ll be asked to enable the tracking. Companies such as Facebook fear Apple’s notice will discourage people from enabling tracking, therefore limiting their ability to target ads, the core of their businesses.
"Players in the industry currently use that ID, when it’s available, to target ads and measure how effective they are. But the change is expected to dramatically impact the ability of advertisers to target ads the way they have been since people likely won’t opt in … analysts said based on these parameters, Facebook and Snap have the highest potential headwind due to IDFA changes, followed by Twitter and Pinterest. They said Google and Amazon have the lowest relative exposure. "
Published on: January 7, 2021
With brief, occasional, italicized and sometimes gratuitous commentary…
• Bloomberg reports that "Tyson Foods Inc. is adding breakfast sandwiches with soy-protein patties to its Jimmy Dean product line. The plant-based sandwiches are the latest offerings from America’s biggest meat company that cater to the fast-growing alternative protein segment, and they’re the first under the iconic Jimmy Dean sausage line."
The move is seen as yet more evidence of the continued traction seen in the alternative meat segment.
• Eater reports that "for the next three months, buzzy NYC-based burger chain Shake Shack is selling a new, limited-time menu of Korean fried chicken sandwiches and nuggets at all of its U.S. locations, the company has announced. The sandwich, priced at $7.19, features a gochujang-glazed crispy chicken breast sprinkled with toasted sesame seeds, set on a bed of white kimchi slaw. The chain’s lauded crispy fried nuggets are served with a side of gochujang sauce and priced at $5.19 for six pieces and $7.19 for 10 pieces."
I tried the Shake Shack Korean fried chicken sandwich yesterday, and it was delicious … sweet and spicy and everything one could ask of a fast food chicken sandwich.
Published on: January 7, 2021
• AWG announced the retirement of Jack Wall, Vice President and Division Manager for its Gulf Coast Division. He will be succeeded by Mike Schumacher, who joined the company in 2010 and most recently has been Division Manager of the Great Lakes Division.
At the same time, Robert Rothove will succeed Schumacher as Vice President and Division Manager for the Great Lakes Division; Rothove has been Director of Center Store in the Great Lakes Division.
AWG also announced that after over 25 years with AWG, most recently as Division Manager in Oklahoma City, Linda Lawson has announced her retirement from the company. Louis Stinebaugh, currently Vice President of Sales and Support and before that the Director of Member Services for the Nebraska Division, has been named to replace her.
Published on: January 7, 2021
Got the following email from a reader responding to MNB's coronavirus coverage…
It seems that COVID is presenting ethical challenges every day to those front-line health care workers. Imagine the feelings of anger, fear and betrayal that they must be experiencing having to turn patients away because they don’t have the space in ICU’s, oxygen , or supplies needed. I read in horror how some LA County hospitals are telling paramedics to not transport patients that they do not fee will survive but to treat them as DOA. What “frickin” world am I living in today that has to let paramedics make these decisions?
Reminds me of some of the scenes in M*A*S*H where Hawkeye and BJ have to do triage and determine which patients get prioritized and the others to be left to die. Ohio is currently running TV spots highlighting pleas from the front-line nurses to take this Pandemic more seriously. Nurses crying about hard it is holding the cellphone for a patient to call their family prior to the chest tube being inserted. You can feel their pain watching these commercials pleading for the public to take this Pandemic for real.
We need our leaders on both sides to find the necessary resources to help the front liners battle this scourge of a virus, to stop the politicization, pointing of fingers and mobilize resources to battle this accordingly. The delays in immunization is reckless. Politicians and the wealthy jumping line for the vaccine reminds me of the scene on the movie "Titanic "where some wealthy men jumped line in front of women and children to get on the lifeboat. Ugh…
Maybe I am taking COVID so seriously because it has hit my own family so hard:
My 35 year old daughter contracted the virus back in March attending services at Solid Rock Church when the state had locked down churches earlier that month . She spent 2 weeks on a ventilator alone in an ICU and went through hell and continues to do so trying to battle the continuing side effects.
My younger sister was just released from a Dayton hospital after a two week stint contracting the virus working as a front-line worker in a local nursing home for retired priests. She is on oxygen 24/7 now, still has not gained her senses of taste or smell, and has now contracted diabetes related to the massive doses of steroids she was given. She is in misery not being able to enjoy any food offered her.
My 32 year old niece who is pregnant and due February 1st and works as a hospital front-line receptionist was diagnosed last night with COVID. Imagine her fear right now
And we have people protesting in stores refusing to wear masks because they believe that they have the right to make their own decisions on what goes on their face? Put them in the same line as the line jumpers for the vaccine. Straight to hell.
Responding to Michael's column yesterday about the Bee Gees' adaptability, one MNB reader wrote:
Another musician that I think changed and adapted was Kenny Rodgers. When he first started out he was what I call more pop/soft rock. He even had that hit “Something’s Burning.” Somewhere along the way he crossed over to Country and became a megastar. I love all of the duets with Dolly Parton.
Thanks for the Bee Gee’s reference. It made me harken back to the days of wearing dress boots with about a ½-1” heel, Angel Flight pants with the flared bottoms, my polyester dress shirt and my Member’s Only jacket. I could never bring myself to wear the gold chain or as often seen out here on the west coast, Puka Shell necklace.
Yesterday, we took note of an Associated Press report that Amazon has spent an undisclosed amount to buy 11 jets from Delta and WestJet, intending to use them to improve its fast-expanding delivery network that competes with the likes of FedEx and UPS.
I commented:
Every time I see a gray Amazon delivery truck come down my street, I think about how it would be completely natural for it to carry products other than those sold by Amazon. I have to imagine that this is in the cards before too long, and the same thing goes for its planes.
One MNB reader responded:
Kevin...what DON'T They sell?
And from another reader:
I have a similar thought when I see the growing fleet of Amazon vans: shouldn’t they be the obvious choice to takeover/replace the USPS?
Haven't they already, to some degree?