business news in context, analysis with attitude

Published on: March 2, 2021

by Michael Sansolo

Thanks to our hyper-politicized environment there’s a chance that many of you might have skipped over the story MNB ran yesterday about the retiring editor of the Washington Post, simply for political reasons.

However, I’d argue that it’s an incredibly relevant article to your business today, so give it a second look just with a slightly different perspective. That is, the world is changing rapidly - only more so due to Covid. What happened at the Washington Post is happening to supermarkets right now and, in fact, is happening in life throughout the world.

Here’s why. The article focuses on how retiring Post editor Marty Baron guided the paper through the transition to the new realities of the Internet age. It meant rethinking everything at the newspaper from its methods of reporting the news to the entire economic model of a newspaper. That economic change is the reason so many local and regional newspapers no longer exist.  In the words of one analyst, Baron and the Post had to be wedded to the news without being wedded to paper.

In many ways, what Baron and the Post faced was the challenge of becoming an omni-channel newspaper on the fly much as many retailers are having to do with their businesses. Granted, the Post had some advantages, chiefly an incredibly wealthy new owner in Jeff Bezos who knows a thing or two about e-business.

By chance there was a story in the same Post last week that offers another, possibly even more relevant view of the omni-world. It focused on the challenges facing teachers as they have to pivot on the fly to facing classrooms on-line and, at times, on-line and in-person at the same time. Not surprisingly it isn’t going easily and it might resonate even more with those of you who are simultaneously running brick-and-mortar and e-stores.

What becomes clear from the teachers and the Post is that the entire world seems to be omni-channel right now and everyone is learning and struggling on the fly. As the Post demonstrates, the model of financial and editorial success is completely altered. Education seems to be no different, just without the backing of Bezos and his money. (You might relate to that.)

What is clear is that the consumer - be it a student, a newspaper reader or a supermarket shopper - still wants the product they expect no matter how they interact with us. As always, consumers don’t care about your problems in delivering in this new environment. They simply want you to deliver.

Depending on your age and family situation, there is a good chance you have some frustration with the local educational system right now as schools struggle to return to some semblance of normal. (Certainly, some of your staffers are facing that issue.) Use those struggles as an opportunity to learn how you can best adjust marketing, merchandising and shopping in this new environment.

Keep in mind that teachers are discovering that some students simply do better in the classroom and some, incredibly, do better on line. No doubt, some teachers are better in the classroom and some are better on line. Instead of trying to jam everybody into the same programs, maybe it would make sense to build a system that takes advantage of the fact that different people have different learning styles, and different teachers are suited to different scenarios.

All the same could be said about your stores, staffers and shoppers.

Like those teachers, you have countless new decisions to make and new strategies to employ to master this new situation. Like the Washington Post, your companies need to consider how to best address this new situation to understand the emerging financial and management challenges you are certain to face.

But keep in mind that the point of the article about Marty Baron was how he and the Post seem to be finding new forms of success in this new omni-world. That’s a small sign of hope, isn’t it?

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com.

His book, “THE BIG PICTURE:  Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available here.

And, his book "Business Rules!" is available from Amazon here.

Published on: March 2, 2021

An MNB reader recently wrote, "Why, a year into the pandemic, am I still seeing empty salad bars filled with any number of packaged dry grocery goods in every store I venture into? Time to pull the salad bar and rededicate that space, they're not coming back!"

The thing is, some retailers wait for things to go back to the way they were.  Some embrace the moment and create change.  KC has an example of the latter.

Published on: March 2, 2021

Walmart has decided to end the $35 minimum order requirement for free Express two-hour delivery service.

"Many customers use Express delivery for when they’re in a pinch, whether it be a missing ingredient for a weeknight dinner or a pack of diapers," said Tom Ward, senior vice president of customer product at Walmart, in a prepared statement. "Customers told us sometimes the items they needed in a hurry didn’t meet the minimum, so we’re removing it, making it even easier for customers to get what they need when they need it."

USA Today reports that the Express delivery service "is available at 3,000 Walmart stores. It typically costs $10 on top of the existing delivery charge. Members of Walmart+ only pay $10 for an order.

"Walmart expanded its Express delivery last year in response to the COVID-19 pandemic, as more Americans avoided shopping in person, opting to either buy using curbside pickup or delivery services."

Published on: March 2, 2021

The Wall Street Journal this morning reports that "chains such as CVS Health Corp., Walmart Inc. and Walgreens-Boots Alliance, Inc. are collecting data from millions of customers as they sign up for shots, enrolling them in patient systems and having recipients register customer profiles.

"The retailers say they are using the information to promote their stores and services, tailor marketing and keep in touch with consumers. The companies also say the information is critical in streamlining vaccinations and improving record-keeping, while ensuring only qualified people are receiving shots."

The story notes that "the ability to connect digitally and amass data on people who wouldn’t otherwise be customers provides a benefit to companies, which aren’t likely to see a financial windfall from their role in vaccinating the U.S. masses against Covid-19.

"Shots are given at no cost to the public and are covered by the government."

Published on: March 2, 2021

The New York Times reports that a unionization campaign at an Amazon warehouse if Bessemer, Alabama, that "had deliberately stayed under the radar for months has in recent days blossomed into a star-studded showdown to influence the workers. On one side is the Retail, Wholesale and Department Store Union and its many pro-labor allies in the worlds of politics, sports and Hollywood. On the other is one of the world’s dominant companies, an e-commerce behemoth that has warded off previous unionizing efforts at its U.S. facilities over its more than 25-year history.

"The attention is turning this union vote into a referendum not just on working conditions at the Bessemer warehouse, which employs 5,800, but on the plight of low-wage employees and workers of color in particular. Many of the employees in the Alabama warehouse are Black, a fact that the union organizers have highlighted in their campaign seeking to link the vote to the struggle for civil rights in the South.

"The retail workers union has a long history of organizing Black workers in the poultry and food production industries, helping them gain basic benefits like paid time off and safety protections and a means to economic security. The union is portraying its efforts in Bessemer as part of that legacy."

The Times writes that "Amazon’s countercampaign, both inside the warehouse and on a national stage, has zeroed in on pure economics: that its starting wage is $15 an hour, plus benefits. That is far more than its competitors in Alabama, where the minimum wage is $7.25 an hour.

"'It’s important that employees understand the facts of joining a union,' Heather Knox, an Amazon spokeswoman, said in a statement.  'We will provide education about that and the election process so they can make an informed decision. If the union vote passes, it will impact everyone at the site and it’s important associates understand what that means for them and their day-to-day life working at Amazon'."

Voting began in early February and will conclude at the end of March.  A simple majority wins the day.

You can read the story here.

Published on: March 2, 2021

Add Volvo to the list of car manufacturers making the transition to electric vehicles.

The Los Angeles Times reports that "Volvo says it will make only electric vehicles by 2030. But if you want one, you’ll have to buy it online.

"The Swedish automaker said Tuesday that it is phasing out the production of all cars with internal combustion engines - including hybrids … Volvo also said that, while its all-electric vehicles will be sold exclusively online, dealerships will 'remain a crucial part of the customer experience and will continue to be responsible for a variety of important services such as selling, preparing, delivering and servicing cars'."

Published on: March 2, 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, we've now had 29,314,254 total confirmed cases of the Covid-19 coronavirus, resulting in 527,226 deaths, and 19,817,532 reported recoveries.

Globally, there have been 2,552,090 confirmed coronavirus cases, with 2,552,090 resultant fatalities, and 90,792,009 reported recoveries.  (Source.)

•  The Washington Post this morning breaks the news that "pharmaceutical giant Merck & Co. will help make Johnson & Johnson’s single-shot coronavirus vaccine — an unusual pact between fierce competitors that could sharply boost the supply of the newly authorized vaccine."

According to the story, federal health officials "began scouring the country for additional manufacturing capacity after they realized in the first days of the administration that Johnson & Johnson had fallen behind in vaccine production. They soon sought to broker a deal with Merck, one of the world’s largest vaccine makers, which had tried and failed to develop its own coronavirus vaccine.

"Under the arrangement, Merck will dedicate two facilities in the United States to Johnson & Johnson’s shots. One will provide 'fill-finish' services, the last stage of the production process during which the vaccine substance is placed in vials and packaged for distribution. The other will make the vaccine itself, and has the potential to vastly increase supply, perhaps even doubling what Johnson & Johnson could make on its own."

•  Reuters reports that Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, continues to reiterate that the US needs to "stick to a two-dose strategy for the Pfizer-BioNTech and Moderna COVID-19 vaccines … He warned that shifting to a single-dose strategy for the vaccines could leave people less protected, enable variants to spread and possibly boost skepticism among Americans already hesitant to get the shots."

According to the story, Fauci "said the science does not support delaying a second dose for those vaccines, citing research that a two-shot regimen creates enough protection to help fend off variants of the coronavirus that are more transmissible, whereas a single shot could leave Americans at risk from variants such as the one first detected in South Africa."

•  From Axios:

"CDC director Rochelle Walensky warned states on Monday that 'now is not the time' to lift public health restrictions, as the recent dramatic declines in coronavirus cases and deaths 'appear to be stalling' … While the average of 70,000 new infections and 2,000 daily deaths is nowhere near the extremely high levels recorded at the start of 2021, the figures are still a poor baseline to 'stop a potential fourth surge' - especially with the threat posed by more contagious new variants, Walensky warned."

•  From the Washington Post:

"The global number of new coronavirus cases rose for the first time in nearly two months, the World Health Organization said Monday, blaming the surge in infections on circulating variants and premature efforts to lift public health restrictions.

"It would be 'unrealistic' to think that the virus crisis will be over by the end of this year, warned WHO’s head of the health emergencies program, Michael Ryan.

"Cases over the past week jumped in every region except for Africa and the Western Pacific, the U.N. agency said, after declining for six weeks straight. In the United States, a steady drop in new cases last month also appeared to be leveling off and there are fears it could reverse course amid yet another wave of infections."

•  The New York Times reports that the P.1 coronavirus variant, which was first detected in Brazil and because of a high degree of contagiousness "fueled a surge in coronavirus cases," seems to have gained the ability to reinfect people who already have had the coronavirus and might have been expected to be immune.

According to the Times, "P.1 is now spreading across the rest of Brazil and has been found in 24 other countries. In the United States, the Centers for Disease Control and Prevention has recorded six cases in five states: Alaska, Florida, Maryland, Minnesota and Oklahoma.

"To reduce the risks of P.1 outbreaks and reinfections," doctors say that it is "important to double down on every measure we have to slow the spread of the coronavirus. Masks and social distancing can work against P.1. And vaccination can help drive down its transmission and protect those who do get infected from severe disease."

•  CNBC reports that for the first time since the pandemic began, all 270 Apple stores in the US are open for business - though some of them are appointment-only and do not allow walk-ins.

•  The Produce Marketing Association (PMA) announced that Fresh Summit 2021 will take place, in-person, October 28-30, 2021 at the New Orleans Ernest N. Morial Convention Center in New Orleans, LA. 

PMA said that it "will welcome the industry back to the event with a variety of safety protocols and modifications developed with guidance from public health authorities."

“We all had that moment in the last year when we knew that things would never be the same,” said PMA CEO, Cathy Burns.  “I shared my belief I have no interest in going back to normal.  I am much more interested in using this opportunity to create our ‘new extraordinary’. I look forward to welcoming the industry back in person to grow a healthier world, which is especially powerful and essential in these times.”

Late October for an in-person event seems eminently reasonable … it'll be good to see these kinds of conferences returning.   PMA, especially, thrives on the ability to celebrate freshness in a common setting, and offer often unorthodox and compelling and relevant programming.

•  The International Dairy Deli Bakery Association (IDDBA) announced the decision to cancel this year’s event, citing concerns about the pandemic raised by exhibitors, members and its Board of Directors.

The conference had been scheduled for June 6-8 in Houston.  It is the second year in a row that IDDBA had to cancel the event because of the pandemic.

Then organization said that "planning for IDDBA 2022 is already underway and scheduled to be held in Atlanta, GA, June 5 – 7."

June 2021, on the other hand, is a little early for comfort.

•  One year ago today, NBC Nightly News featured an interview with a longtime government official with whom most Americans were not familiar - Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases.  It is remarkable the degree to which Fauci foresaw what would happen in the US over the next 12 months … and also interesting how much we didn't know.  (Note:  Watch the first moments of the interview, when Fauci shakes hands with correspondent Richard Engel.  Today, that is almost jarring.)

Published on: March 2, 2021

•  The Seattle Times reports that "Amazon manager Charlotte Newman filed a federal discrimination suit against the company Monday alleging executives of the Seattle-based commerce giant paid her less than similarly qualified white peers and used racial stereotypes to justify denying her opportunities for promotion.

"Newman, a Black woman who works for Amazon Web Services, Amazon’s cloud-computing division, also leveled allegations of sexual harassment and assault against a former Amazon director, whose employment was eventually terminated after an internal investigation, according to the suit."

The Times writes that "Newman filed her suit after the publication last week of an investigation by online tech outlet Recode detailing allegations by Black employees that Amazon routinely passed them over for promotion."

•  Raise your hand if you wish you had invested in Zoom back in early 2020.

Zoom's Q4 revenue was up 369 percent compared to the same period a year ago, to $882.5 million from $188.3 million.   Quarterly net income was $260.4 million, compared with $15.3 million a year ago.

MarketWatch notes that "overall for the fiscal year, Zoom reported adjusted profit of nearly $1 billion - $995.7 million - after barely clearing $100 million in adjusted earnings in the previous year, at $101.3 million."

Published on: March 2, 2021

•  Ahold Delhaize USA yesterday said that has reached "a milestone in its supply chain transformation to create an integrated self-distributed supply chain of the future" as one distribution center, Freetown Grocery in Massachusetts, "transitioned procurement from a third-party vendor to the self-managed network, providing direct control of inventory and replenishment at this facility … Freetown Grocery was founded in 2004 and is a 1.1 million square foot facility fulfilling grocery demand for the Stop & Shop brand. Stop & Shop continues to own the facility and fulfill orders, while ADUSA Procurement manages replenishment and inventory."

“Our work to transform the supply chain to an integrated self-distribution model of the future is not only on-time, but ahead of schedule,” said Chris Lewis, EVP, Supply Chain for Retail Business Services, Ahold Delhaize USA’s services company. “Today marks an important milestone in our journey with the transition of procurement at this facility, and we’re looking forward to other facility transitions this year. On top of that, we’ve launched new programs to begin to help us as we optimize the network at scale.”

•  Southeastern Grocers, parent company and home of Fresco y Más, Harveys Supermarket and Winn-Dixie grocery stores, announced that it will "work to identify and increase sourcing from suppliers that are at least 51% owned, operated and managed by people who are: disadvantaged, disabled, LGBTQ+, military veterans, minorities and/or women and sell grocery, general merchandise and/or beauty and personal care products."

Dewayne Rabon, Chief Merchant for Southeastern Grocers, said, “It is our responsibility to take purposeful steps to form stronger partnerships with our minority suppliers and connect with new, diverse businesses whose products reflect the tastes and preferences of our associates, customers and communities that we serve in our stores."

•  The National Grocers Association (NGA) is moving closer to where the power is, with the relocation of its offices from Arlington, Virginia, to Washington, D.C. - on Pennsylvania Avenue, about a mile southeast of the White House and a half-mile northwest of the US Capitol.

•  One casualty of the pandemic:  long retail leases.

CNBC writes that "as thousands of retail leases come up for renewal, their duration is increasingly shrinking, as businesses grapple with an unpredictable future and look for ways to slash costs, stay flexible and maintain leverage over their landlords, even after the health crisis abates.

"The risk is a two-way street, though. Because on one hand, in two or three years, mall and shopping center owners could have the chance to turn the tables back in their favor, by hiking rents or booting retailers out for another tenant. But more short-term deals could also leave landlords with even greater vacancies down the line."

•  CNBC reports that "Nordstrom has struck a deal with Tonal, a company that sells a wall-mounted workout station for $2,995.

"The department store retailer is bringing 40 mini Tonal shops into its stores beginning this month to showcase Tonal products and stir up interest around the brand.

"The tie-up comes as Nordstrom is plotting growth for its active business and is dedicating more space in its stores for athletic apparel and other fitness accessories."

The story goes on:  "For Tonal, the partnership will expand the fitness equipment maker’s reach to new customers at a time when many Americans have been investing in high-tech devices to enhance their at-home workouts during the pandemic. The company has just 16 brick-and-mortar locations - six of its own stores and 10 'shop in shops' with other business partners.

"Nordstrom, meantime, hopes to become a top destination for active gear and to give shoppers more reasons to visit its stores. Many of them are in malls that have been frequented less during the health crisis."

•  From the New York Times:

"Apollo Global Management and at least one other private equity firm have expressed interest in acquiring Michaels, the hobby retailer, according to two people familiar with the situation.

"A buyout would return the retailer to private hands after seven years as a public company. The values of the bids weren't clear.

"Bolstered by a pandemic boom in home crafts, shares of the retailer, which has more than 1,200 stores and some 44,000 employees, have risen by nearly 300 percent over the past year, giving it a market capitalization of around $2.3 billion.

"The people, who requested anonymity because the outreach is still confidential, said it is possible that Michaels would opt against a deal."

Published on: March 2, 2021

•  Kroger announced that Mike Donnelly, executive vice president and COO, is retiring from the company after more than four decades.  He started his career as a clerk at Fry's Food Stores in California in 1978.

""With his relentless focus on the customer, Mike has led the organization to prioritize what is most important to their experience – full shelves, fresh foods and friendly associates," said Rodney McMullen, Kroger's chairman and CEO. "He energizes our teams to deliver results and the best experience for every customer, every time. Importantly, Mike has mentored and developed countless associates, inspiring them to grow and reach their greatest potential – many of whom are in key leadership roles across the organization. His passion for people and developing world class teams will be one of his lasting legacies."

•  Skogen’s Festival Foods announced that Jeff Main has joined its senior leadership team as vice president of information technology.

Main, the company says, "has over 30 years of experience leading technology for large and small corporations, including his recent role as the head of software development for Union Pacific Railroad. Among his many noteworthy projects while at Union Pacific was the optimization of the company’s software design, development and delivery."

Published on: March 2, 2021

Vernon Jordan, the former president of the National Urban League and a longtime civil rights activist, has passed away.  He was 85.

Jordan, CNN reports, "began his career fighting segregation, beginning with a lawsuit against University of Georgia's integration policy in 1961. He worked as a field director for the NAACP and as a director of the Southern Regional Council for the Voter Education Project before he became president of the president of the National Urban League."

Published on: March 2, 2021

…will return.