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    Published on: February 1, 2021

    Fast feeder Subway has hired a licensing company to help it sell its products through, among other places, supermarkets.  KC thinks this is a lousy idea - for supermarkets - and to be honest, he gets a little hyped up about it.

    Published on: February 1, 2021

    The Wall Street Journal reported over the weekend that Julie Jenkins Fancelli, described as "a prominent donor to the Trump campaign and heiress to the Publix Super Markets Inc. chain," contributed $300,000 to fund the January 6 rally on the Elipse in Washington, DC, which "served as a jumping-off point for many supporters to head to the Capitol," where they engaged in widespread vandalism and, in some cases, threatened the lives of some members of the US Senate and House of Representatives - actions that have been described as an insurrection against the sitting government.

    The total cost of the rally was $500,000.  Another $50,000 was donated by talk show host Alex Jones, in exchange for a prominent speaking slot.  Jones also reported got Fancelli, involved in the event, and the Journal dives into Fancelli's deep involvement in the event.

    It is a story that has been major news especially in Florida, Publix's home market, which virtually every newspaper, news site and media outlet reporting on the controversy.

    In a statement Sunday, Fancelli, a daughter of the company's founder, said: “I am a proud conservative and have real concerns associated with election integrity, yet I would never support any violence, particularly the tragic and horrific events that unfolded on January 6th.”

    Publix released the following statement:  "Mrs. Fancelli is not an employee of Publix Super Markets, and is neither involved in our business operations, nor does she represent the company in any way.  We cannot comment on Mrs. Fancelli's actions.

    "The violence at the Capitol on Jan. 6 was a national tragedy. The deplorable actions that occurred that day do not represent the values, work or opinions of Publix Super Markets."

    Axios writes this morning that "the donation is only the latest in controversial political spending by associates and beneficiaries of the incredibly popular Lakeland-based grocery chain, which employs 225,000 people and had $38.1 billion in retail sales in 2019 … Fancelli and her two children contributed as much as the law allows to Trump’s re-election campaign in 2019: around $171,000 … She gave more than $980,000 to both the Republican Party and Trump’s campaign in the 2020 cycle … In 2018, Publix leaders gave $670,000 to the campaign of Republican  gubernatorial candidate Adam Putnam, who declared himself a 'proud NRA sellout,' prompting 'die-in' protests led by survivors of the Parkland shooting … In 2019, heirs to the Publix fortune gave $25,000 to a PAC supporting Gov. Ron DeSantis."

    KC's View:

    It is hard to know the degree to which this hurts Publix.  The social media outcry seems to be considerable, with a number of calls for a boycott of Publix's stores.  But such tumult can be both illusory and ephemeral;  in part that's because the half life of social media outrage can be incredibly short, and in part it is because a polarized citizenry means that 40-50 percent of Public's customers may agree with Fancelli, and will be outraged by the outrage.

    What we don't know is the degree to which a straight line can or will be drawn from the rally to the invasion of the Capitol, and whether there was causation or just correlation.  If it is the former, the dominoes may continue to fall, and this could be a longer-term problem for Publix.

    Will "Saturday Night Live" or John Oliver decide to pay some attention?  If so, it will only prolong the news cycle, and Publix has to be prepared for that.  A lot more serious is the fact that the US Department of Justice is treating January 6 as one of the biggest domestic terrorism investigations in the FBI's history, according to the Washington Post.

    It does strike me as disingenuous for Publix to simply disavow someone who continues to have a considerable financial stake in its success or failure, and I'm not sure that the "we cannot comment" comment cuts it.  They can comment, but they choose not to.

    I also think that it will be interesting to see how Publix handles it if actual company employees are implicated in the events of January 6.

    Published on: February 1, 2021

    Reuters reports that Southeastern Grocers Inc, the operator of U.S. supermarket chains Winn-Dixie and Harveys, has decided to cancel its just-announced initial public offering (IPO).  It also canceled a planned IPO in 2014.

    “The company will continue to evaluate the timing for the proposed offering as market conditions develop,” the company said in a statement.

    Reuters reports that internally, the company was unhappy with the price range that it seemed likely to hit in an IPO.  "Southeastern Grocers shareholders had aimed to sell 8.9 million shares on Thursday at a price range of $14-$16 per share, which would have earned them up to $142.4 million. Southeastern would not have received proceeds from the IPO.

    "Southeastern Grocers was formed in 2012 by private equity firm Lone Star Funds to house the Winn-Dixie and Bi-Lo grocery store brands. The company filed for bankruptcy in 2018, hit by competition from bigger retailers."

    Seeking Alpha reports that "the move also came hours after rival grocer Albertsons Cos. tumbled 13.9% on an analyst downgrade. Kroger also fell 8.7 percent Thursday in sympathy, and both stocks were trading another 1% or so lower Friday heading into the close."

    Published on: February 1, 2021

    The San Jose Mercury News reports that "San Jose and Oakland may force large retail businesses - primarily grocery chains - to give their front line workers 'hazard pay' until the disease is finally vanquished.

    "Workers in both cities would see their paychecks boosted by $5 an hour if their respective city councils approve emergency ordinances on Tuesday."

    According to the story, "In Oakland, the emergency ordinance would immediately apply to large grocery stores — which it defines as '15,000 square feet in size …  that (sell) primarily household foodstuffs' and have 500 or more employees nationwide. Such stores in Oakland include Cardenas Markets, Safeway/Albertsons, Save Mart, Target, Trader Joe’s and Whole Foods, according to a city memo.

    "In San Jose, a proposal by Councilmember Sergio Jimenez would target corporate grocery stores, chain supermarkets and retail stores that sell groceries and employ at least 300 workers total nationwide. Small grocers and stores would be exempt on the assumption they’ve already been disproportionately hurt by the pandemic."

    The Mercury News notes that "if the councils move ahead, San Jose and Oakland would join Long Beach, Seattle and Santa Monica in doing so while Berkeley and Los Angeles weigh whether to follow suit."

    KC's View:

    I have the same reaction to this story as I did when other communities passed similar mandates - it is bad public policy to mandate hazard pay for just some retail entities and not others, especially when the rules don't seem to factor in accommodations and compensation already offered by some of the retailers.

    Whether or not the retailers can afford it - or even whether they should offer hazard pay - is almost beside the point.

    Published on: February 1, 2021

    The Wall Street Journal has a piece about whether cash - which fewer people are using during the pandemic - will make a recovery when disease and contagion are less top-of-mind.

    "Digital retail sales were up 37% in the third quarter, seasonally adjusted, from the same period a year earlier, according to the Commerce Department. Cash wasn’t an option for those payments: Spending online or using an app like Uber Eats requires an electronic method such as a debit card or PayPal account … Around the world, fears of infection have driven an increase in contactless payments - electronic payments like Apple Pay and tap-to-pay offerings that avoid even swiping or inserting cards - according to credit-card companies."

    And, the story says, "The shift to more electronic payments could spur consumer spending, giving economic growth a boost, once widespread Covid-19 vaccinations enable a fuller economic recovery, analysts say. When shoppers pay with plastic, they tend to spend more."

    Still, the Journal writes, "while shoppers’ embrace of digital commerce looks likely to last, economists say it is too soon to know if U.S. consumers’ shift to cashless payments will as well, for several reasons.

    "To start, U.S. household spending overall remains below its pre-pandemic level. As spending rebounds, so might cash payments.

    "Also, much of the shift was forced. Business closures and other restrictions pushed much shopping online. It is unclear whether people will readily reach for bills and coins again once more widespread vaccinations enable them to return to stores."

    KC's View:

    Before the pandemic, all the outrage seemed directed at retailers that did not want to take cash anymore.  That largely seems to have subsided … I wonder if the US Depart of the Treasury is developing plans for digital currency?  

    And if not, why not?

    Published on: February 1, 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, there now have been a total of 26,767,229 confirmed cases of the Covid-19 coronavirus, resulting in 452,279 deaths and 16,403,843 reported recoveries.

    Globally, there have been 103,582,807 confirmed coronavirus cases … 2,239.043 resultant fatalities … and 75,205,464 reported recoveries.  (Source.)


    •  From the Wall Street Journal:

    "Newly reported Covid-19 cases were down from a day earlier, as were hospitalizations and deaths, following a month when all three metrics hit records before abating … Hospitalizations were at 95,013, down from a day-earlier 97,561 and the second day in a row the number was less than 100,000 since entering six-digit territory on Dec. 2, according to the Covid Tracking Project.

    "Even after weeks of decreases, the numbers are still higher than what the U.S. experienced during earlier surges. New daily cases rarely exceeded 70,000 during the worst days of the summer; hospitalizations never exceeded 60,000."


    •  The Washington Post reports that "at least 25.5 million people have received one or both doses of the vaccine in the U.S.  This includes more than 5.8 million people who have been fully vaccinated … 49.9 million doses have been distributed."


    •  The Wall Street Journal reports on how "the job of vaccinating much of the American population is about to fall largely on retail pharmacies, with chains like CVS, Walgreens, Walmart and Kroger saying they have the manpower and physical space to handle mass vaccinations.

    "The U.S. fell short of its initial goal of inoculating 20 million people by the end of 2020. As of Friday, 27.9 million shots had been administered, out of 49.2 million distributed since mid-December, according to CDC data.

    "Among the biggest challenges now for retailers is dealing with customers eager to know when it’s their turn."


    •  Axios reports on how "mutated versions of the coronavirus threaten to prolong the pandemic, perhaps for years - killing more people and deepening the global economic crisis in the process … The U.S. and the world are in a race to control the virus before these variants can gain a bigger foothold. But many experts say they already expect things to get worse before they get better. And that also means an end to the pandemic may be getting further away."

    The premise is that there actually two epidemics with which scientists and public health officials have to deal - the original strain and the mutated versions.

    "There’s light at the end of the tunnel for the first epidemic," Axios writes.  "Although the virus is still spreading uncontrolled across the U.S. and much of the world, cases and hospitalizations are down from their peak, and vaccinations are steadily increasing.

    "But the next iteration, fueled by variants of the virus, is already taking hold … A more contagious and more lethal strain of the virus could easily send cases, hospitalizations and deaths soaring right back to record levels, even as vaccinations continue to ramp up."

    Dr. Michael Osterholm, an infectious disease expert at the University of Minnesota, said on Meet The Press yesterday, "That hurricane's coming … We are going to see something like we have not seen yet in this country."


    •  The Washington Post reports that the new variant of the Covid-19 coronavirus that first was detected in South Africa now has been found in both South Carolina and Maryland - and the people who contracted it apparently had not engaged in international travel and have no connection to the others.

    "The mutation appears to spread more easily than other variants," the Post writes, reporting that "Scott Gottlieb, former director of the Food and Drug Administration, has suggested that this variant might be more resistant to antibody therapies. While additional research is still required, vaccines will likely still be effective against the mutation, top infectious-diseases expert Anthony S. Fauci said in January."


    •  The US Centers for Disease Control and Prevention (CDC) is mandating that people in the US will have to wear face masks on all forms of public transportation and in all public transportation hubs.

    The mandate goes into effect tomorrow.

    “Requiring masks on our transportation systems will protect Americans and provide confidence that we can once again travel safely even during this pandemic,” according to the 11-page order signed by Marty Cetron, director for CDC’s Division of Global Migration and Quarantine. “Increasing universal masking by 15% could prevent the need for lockdowns and reduce associated losses of up to $1 trillion or about 5% of gross domestic product.”


    •  From the Washington Post:

    "A number of leading grocery chains are offering small cash bonuses and other incentives to encourage employees to get the coronavirus vaccine, in an effort that experts say could help speed protection of some of the country’s most vulnerable workers: low-paid, hourly retail workers.

    Dollar General, Trader Joe’s, Aldi and Lidl, as well as Instacart, have announced plans to promote the vaccine among employees, including flexible work schedules, paid time off to visit a vaccination site and bonuses of up to $200.

    "The restaurant industry may also be moving toward incentives. On Tuesday, Darden Restaurants, which employs more than 175,000 workers across Olive Garden, LongHorn Steakhouse and many more brands, said it would offer up to four hours of paid time off to get the vaccine.

    "However, few other companies have followed suit, potentially in part because of legal uncertainties involved with health screening questionnaires leading up to vaccination.

    "The Washington Post reached out to more than 85 major employers across hospitality, retail, manufacturing and financial services to ask about incentive plans. About half responded; only two said they had current plans to compensate workers for getting their shots. The rest were still puzzling through their plans for vaccines and their workforces."

    One of the problems, apparently, is that there could be legal issues if you offer incentives that some people are not able to access because they have medical conditions that prevent them from being vaccinated.


    •  From Bloomberg:

    "Years from now when the pandemic’s impact on global business is analyzed, it’s likely that the most lucrative change will be how it pushed—or actually shoved—massive markets into the modern e-commerce era.

    "In many countries, online shopping hadn’t been easy because of underdeveloped infrastructure and the reluctance, or inability, of consumers to use banks and electronic payment. That stalled growth in a lot of the world, but Covid-19’s disruption has forced rapid change.

    "Take Mexico, where fewer than half of adults have bank accounts and less than 5% of retail sales occurred online before the pandemic—a third of the global average. The lack of access to banking and mistrust of the financial system left it out of the online boom happening in Europe, China and the U.S. But when stores closed to slow Covid-19, millions of holdouts moved to the web. Mexican companies responded on the fly—igniting a 54% jump in web sales—and accelerated the online ecosystem by years. This kind of upheaval also took place in other major economies, like India, Russia and Brazil, that were slow to e-commerce."


    •  The Washington Post has a story about how some front line grocery workers, who thought they'd be prioritized for vaccination, and now being pushed lower on the list as some states have expanded eligibility to older residents.

    "Many states are trying to speed up a delayed and often chaotic rollout of coronavirus vaccines by adding people 65 and older to near the front of the line," the Post writes.  "But that approach is pushing others back in the queue, especially because retired residents are more likely to have the time and resources to pursue hard-to-get appointments. As a result, workers who often face the highest risk of exposure to the virus will be waiting longer to get protected, according to experts, union officials and workers."

    The additional problem is that a high percentage of front line grocery workers also tend to be people of color - whose communities have been disproportionately harder hit by the coronavirus than White communities.

    "The shifting priorities illuminate political and moral dilemmas fundamental to the mass vaccination campaign: whether inoculations should be aimed at rectifying racial disparities, whether the federal government can apply uniform standards and whether local decision-making will emphasize more than ease of administration."

    The inconsistency from state to state and even county to county can be frustrating.  In some states, if you're 65 or older you can get vaccinated, but in Connecticut, where I live, it currently is 75 or older.  In some states, teachers can get the vaccine, but again, not in Connecticut - and I live with two teachers.  I'm not complaining here … just pointing out that there seem to be different standards in different places.


    •  From the New York Post:

    "Travelers passing through Oakland International Airport will now be able to grab a COVID-19 test out of a vending machines, officials said.

    The self-administered kits are available for about $150 at the contactless kiosks in each terminal … Oakland is the first US airport to sell the coronavirus tests in vending machines, officials said."


    •  The Wall Street Journal reports that "Americans are splashing out on pricier whiskey, tequila and other spirits during the pandemic, helping distillers post their strongest sales in four decades despite widespread bar closures.

    "People who can’t spend on concerts, travel and watching live sports are splurging instead on high-end spirits to drink at home, say alcohol executives. That drove U.S. distillers’ revenue up 7.7% to $31.2 billion last year, according to the Distilled Spirits Council - or DISCUS - a trade body. It said the figures marked the fastest growth and highest sales for at least 40 years."


    •  Variety reports that "the April dates of the Coachella Valley Music and Arts Festival and its companion Stagecoach country music festival have been canceled due to the ongoing COVID-19 pandemic, according to Riverside County Public Health Officer Dr. Cameron Kaiser. A rep for the officer tells Variety that it remains possible that the festivals could be rescheduled for later in the year, although she deferred to Goldenvoice, the festivals’ promoter, for further details."

    Published on: February 1, 2021

    •  The Washington Post reports on how smart shopping carts, on companies' radar screen the past few years, have become much more desirable in a Covid-19 world where face-to-face contact with a checkout person is to be discouraged for public health reasons.

    "For the past few years, connected shopping carts were billed as a way to cut down on labor costs, get customers to spend more cash and shift patrons out of stores more swiftly."  Now, however, proponents say that "the pandemic has pushed more companies to check out the trend to reduce face-to-face interactions amid the ongoing pandemic."

    These same proponents maintain that "smart carts drive customers to spend more cash since the baskets can tally up totals in real time and expose people to more marketing materials while shopping."  Caper, the AI company that is working with Kroger on its  smart cart program, says that "if you buy cereal, it might recommend that you buy milk as well. The firm says an average shopper’s checkout total increases 18% when using its product."

    Published on: February 1, 2021

    •  CNBC reports that Walmart has updated its plans "to boost diversity within its own ranks and contribute $100 million over five years to help fight systemic racism across the country … Walmart and its foundation will distribute the first $14.3 million to 16 nonprofit organizations.

    "The grants will go toward groups that are tackling racial inequities in various ways, such as educating communities of color about the Covid-19 vaccines, reducing debt for students at historically Black colleges and universities and providing internet access and technology to children who are attending school remotely."


    •  Insurance Business  reports that "Nationwide has announced a partnership with Walmart to launch a first-of-its-kind pet prescription program.

    "The Nationwide Pet Rx Express gives Nationwide’s pet insurance customers access to more affordable prescription medicines for pets and introduces an expedited in-store claims process. Members can sign up for the program online and access a digital ID card to present at Walmart pharmacies … The program’s preferred pricing and the ability to have claims for covered drugs processed at the counter of a major retail pharmacy are both firsts for the pet insurance industry, Nationwide said. Through the partnership, Nationwide pet insurance customers will have access to Walmart’s most commonly prescribed pet-specific medications for chronic disease and flea, tick, and heartworm prevention."

    Published on: February 1, 2021

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Bloomberg reports that Aldi is going to start selling ProForm treadmills for $249.00 = pricier than its usual merchandise, but with the expectation that its relatively low price, compared to other, similar treadmills, will generate significant consumer interest, especially because "the pandemic has caused intermittent shortages of treadmills and similar items over the last year as consumers buy up the equipment that they used to rely on their gyms for."

    "The treadmill won’t be a regular item at Aldi - it’s part of the company’s so-called 'Aldi Finds,' which are weekly deals on merchandise the retailer is able to source for lower-than-normal prices. The constant rotation of items, which generally include packaged food and home furnishings, spark return visits by treasure-hunting shoppers … While it’s not uncommon to see exercise products such as weights in the Aldi Finds aisle, the treadmill is somewhat unusual for a retailer where space is at a premium."


    •  The Associated Press has an interview with Marc Pritchard, Procter & Gamble's chief brand officer, in which he acknowledges that the company got lucky a year ago when it introduced a new product - disinfectant spray Microban 24, which was certainly in the right place at the right time for a world beset by pandemic.

    Less lucky has been P&G's Gillette brand - "sales have slumped as men skip their morning shave routines while they work from home instead of the office."

    Gillette's solution - "it is now selling beard oils and balms, a major shift for a brand that has promoted clean-shaven faces for more than a century."


    •  From CNN:

    "Toys R Us is closing its only two stores roughly a year after a highly anticipated relaunch of the storied brand.

    "Tru Kids Inc., which bought the retailer in a 2018 liquidation sale, confirmed that its two locations in New Jersey and Texas that opened in late 2019 have permanently closed because of the pandemic."

    The story notes that Tru Kids said that "demand for the brand 'remains strong' and the company will continue to invest in it."

    Which may be the very definition of "throwing good money after bad."

    Published on: February 1, 2021

    Got this email from MNB reader Mike Moon:

    Concerning your story about Kroger's test of an all self checkout store; I sure hope Kroger has the technology streamlined. The checkouts aren't very smooth or intuitive at their Dillon's locations.

    My family had spent years behind the cash register in our stores, so we aren't afraid to try the self checkout lanes at various merchants. We have found that Walmart and Home Depot are very smooth, usually trouble free checkouts. Kroger (Dillon's) in Kansas and Safeway, where we vacation, are not. Too many prompts; no hand held scanners for bulk items; loyalty card input was clunky; not a smooth flow to the payment screen.

    And don't try to use any coupons. I had a transaction in a Dillons store that required the assistant multiple times. I was almost embarrassed by how much help I needed. I only need one Walmart associate when an item won't scan, or if I need something that is held securely, like a propane cabinet exchange. If Kroger doesn't have the technology right, it is doomed.


    Regarding the decision by Southeastern Grocers to cancel its planned IPO, one MNB reader wrote:

    Interesting story.  I think the public sector has spoken again on the lack of confidence in the SEG organization.  I found it perplexing that they came out with this right after they sold off their BILO and part of Harveys banners.  To me this looked like a continued erosion of their business and not something investors would want to touch.  At least not this investor.


    Finally, responding to the story about GM's plan to end the manufacture of gasoline-powered cars by 2035, one MNB reader wrote:

    Hopefully by the time we convert to electric cars on a major scale they figure out the charging times. Imagine a cross country trip and spending an hour at a station to charge you car and that's for the Tesla Supercharger.

    Poor Sebastian Maniscalco, he would never survive waiting that long.

    I had no idea what this last line meant … but luckily, this reader provided a YouTube link:

    Published on: February 1, 2021

    •  ESPN reports that "the Major League Baseball Players Association is mulling over a proposal by MLB to delay the start of the 2021 season … The league's proposal to push back the start of spring training to late March and the beginning of the season to late April includes a 154-game schedule that would pay players their full 162-game salaries, according to sources."

    According to the story, "The proposal concerns the MLBPA on multiple fronts, players and union sources told ESPN. With pitchers having ramped up to start spring training around Feb. 17, they are reticent to shut down and start again by the proposed March 22 spring training start for a season that would begin April 28, according to sources. Further, players believe language in the proposal would grant commissioner Rob Manfred power beyond what he currently has to cancel games and, accordingly, potentially cut into players' pay."

    MLB owners disagree with that characterization.

    "If the union does not provide a counteroffer early next week, spring training is likely to start in mid-February as scheduled, sources familiar with the situation told ESPN."