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    Published on: March 4, 2021

    As some states - think Texas and Mississippi - have rolled back pandemic precautions, including mask mandates, a number of retailers are responding by saying they will continue to require employees and customers to wear masks when entering their stores, abiding by recommendations from the Centers for Disease Control and Prevention (CDC) rather than from elected officials.

    The Wall Street Journal writes:  "In recent weeks, as Covid-19 cases have fallen and vaccines rolled out across the country, governors have dropped statewide mask mandates in states including Mississippi, Iowa and Montana. In some cases local governments have kept restrictions in place. In Texas, cities and counties are blocked from putting their own mandates in place."

    Dr. Rochelle Walensky, director of the CDC, has stated that "now is not the time to release all restrictions."

    Among them, according to various news reports and press releases issued by companies:  Kroger, Walmart, Starbucks, Target, CVS, Walgreens, Costco, Sprouts, Best Buy, Macy's, Kohl’s, Ulta, and Hyatt Hotels - though in some of these cases, the mask requirement will not be enforced by the business.

    USA Today this morning reports that Albertsons would not require customers to wear masks:   "For associates and vendors, we will continue to follow the CDC guidance and will require face coverings. For customers, we will encourage face coverings to be worn while in the store."

    The Houston Chronicle reports that H-E-B president Scott McClelland says that "while it has the power to require customers to wear masks before entering … H-E-B won't take that step – in part because of belligerent customers (and some workers) who have caused nearly 2,000 in-store incidents surrounding masks at Houston stores alone."

    "What's important to me is, I've got to ensure for the physical safety of both my employees and customers in the store," McClelland said. "That's what we have been doing, and frankly it's the same thing we'll continue to do."

    KC's View:

    I am sympathetic to the problem that McClelland  spotlights, though I have to admit that it reads to me like this:  "Because some of our customers behave like idiots, we're going to continue to let them behave like idiots."

    This is why it is a mistake for elected officials to end mask mandates now.  We're so close to an effective end to the pandemic that we can taste it, but ignoring the scientists' recommendations has the potential of setting us back.  Significantly.  And not just Texas and Mississippi, but any place that people from those states happen to go, potentially bringing the disease with them.  Keeping the mask mandates in place should have the effect of giving retailers a kind of safe harbor … though clearly that is not the case in Texas, if H-E-B alone has seen close to 2,000 in-store "incidents."

    The problem from the beginning has been how mask mandates have been framed.  They should have been positioned as an act of patriotism, of compassion and empathy, of the ultimate act of American exceptionalism.

    As an example, Kroger issued this statement yesterday morning:

    "The Kroger Family of Companies’ most urgent priority throughout the COVID-19 pandemic has been to provide a safe environment for our associates and customers while meeting our societal obligation to provide open stores, e-commerce solutions and an efficiently operating supply chain so that our communities have access to fresh food.

    "To ensure the continued safety of our customers and associates, The Kroger Family of Companies will continue to require everyone in our stores across the country to wear masks until all our frontline grocery associates can receive the COVID-19 vaccine. We also continue to advocate to federal, state and local officials to prioritize frontline grocery workers for the vaccine rollout plan, and we will offer a $100 one-time payment to associates who receive the recommended doses of the COVID-19 vaccine."

    That's exactly the right tone.

    Some people don't get it - witness the video we showed on MNB yesterday of those "protestors" at a California Trader Joe's.

    I have enormous respect for the retailers that are saying they will step up and continue to mandate masks.  They're showing backbone … and saying to their employees that they are willing to make their health a priority.

    I have to wonder if organizations that were planning in-person events for Texas locations later this year are rethinking their plans.  I would be … because the odds of a resurgence in Texas just went way up.  (Which suggests that despite all the talk about needing to eliminate mask mandates for the sake of the economy could have a negative impact in other ways.)

    I know which retailers seem enlightened at the moment, and which ones do not.

    Published on: March 4, 2021

    The New York Post reports that New York Governor Andrew Cuomo announced "the rollout of a new pilot program in which New Yorkers would have to flash a sort of COVID-19 passport in order to enter sports arenas, theaters and other businesses as the state continues reopening efforts.

    "The plan is to test the 'Excelsior Pass,' which will use secure technology to confirm if a person has gotten vaccinated or has had a recent negative COVID-19 exam result, during events at Madison Square Garden and Barclays Center, Cuomo said in a statement."

    "“The Excelsior Pass will play a critical role in getting information to venues and sites in a secure and streamlined way, allowing us to fast-track the reopening of these businesses and getting us one step closer to reaching a new normal,” he said.

    Meanwhile, the New York Times has a broader story on the subject, framing it this way:

    "The next major flash point over coronavirus response has already provoked cries of tyranny and discrimination in Britain, protests in Denmark, digital disinformation in the United States and geopolitical skirmishing within the European Union.

    "The subject of debate: vaccine passports — government-issued cards or smartphone badges stating that the bearer has been inoculated against the coronavirus.

    "The idea is to allow families to reunite, economies to restart and hundreds of millions of people who have received a shot to return to a degree of normalcy, all without spreading the virus. Some versions of the documentation might permit bearers to travel internationally.  Others would allow entry to vaccinated-only spaces like gyms, concert venues and restaurants.

    "While such passports are still hypothetical in most places, Israel became the first to roll out its own last week, capitalizing on its high vaccination rate. Several European countries are considering following. President Biden has asked federal agencies to explore options. And some airlines and tourism-reliant industries and destinations expect to require them.

    "Dividing the world between the vaccinated and unvaccinated raises daunting political and ethical questions. Vaccines go overwhelmingly to rich countries and privileged racial groups within them. Granting special rights for the vaccinated, while tightening restrictions on the unvaccinated, risks widening already-dangerous social gaps."

    You can read the Times story here.

    KC's View:

    This is an interesting subject, though I'm not sure we'll get to the point where retailers will require a passport to get in.  It is so much easier just to require people to wear a mask.

    The New York move is interesting … at some level, because I am a cynic, I think that what Cuomo really wants and needs is a vaccination that will keep him in office despite all the accusations swirling about deceiving the public about pandemic-related nursing home deaths last year, not to mention sexual harassment charges being leveled at him by multiple women.

    The political and ethical questions raised by the Times are real, since there already are many questions being raised about a higher percentage of Covid deaths seen in minority communities, and less access to vaccinations.

    Just yesterday, the Miami Herald reported on how, "as Florida’s eldest residents struggled to sign up to receive their first dose of the COVID-19 vaccine, nearly all those aged 65 years and older in a wealthy gated enclave in the Florida Keys had been vaccinated by mid-January … The management of Ocean Reef Club, located in north Key Largo, also acknowledged in the Jan. 22 message to residents that the rest of the state was grappling to get its hands on the vaccine."

    The one thing that virtually all the wealthy residents of the Ocean Reef Club have in common - they are politically connected.

    Passports that are seen as allowing some people in and those other people out will be problematic, I suspect, because they'll be seen as being about something other than whether folks got a shot in their arms.

    Published on: March 4, 2021

    Walmart yesterday announced "a new commitment: over the next ten years, Walmart will spend an additional $350 billion on items made, grown or assembled in the US," in addition to the $250 billion pledged to the same effort in 2013.

    In a statement,  John Furner, President & CEO, Walmart US, said, "We estimate that this spend will support more than 750,000 new American jobs.  We’ve identified six priority categories to focus on: plastics; textiles; small electrical appliances; food processing; pharmaceutical and medical supplies; and Goods Not For Resale (GNFR).

    "This commitment will mean a few more impacts, including an estimated 100 million metric tons of CO2 emissions avoided by sourcing closer to our customers.  It will also mean an increase in spending and support for small businesses and diverse suppliers and sellers who are based here in the U.S., and it will provide the opportunity for 9,000 entrepreneurs to become Walmart suppliers and sellers through our annual Open Call events."

    Furner also announced another initiative, called American Lighthouses:  "We plan to unite key stakeholders in specific regions of the country to identify and overcome top-down barriers to U.S. production. These Lighthouses will bring together participants from the supplier community (including manufacturers and NGOs) as well as others from academia, government and local economic development groups. By bringing together key regions and various stakeholders, we can make the supply chain more efficient. The aim is to bring U.S. manufacturing back in a sustainable, long-term way.

    "U.S. manufacturing really matters. It matters to our suppliers, to entrepreneurs and to the environment. It matters to our customers - more than 85% of which have said it’s important for us to carry products made or assembled in the U.S.  And most of all, because of the jobs it brings, it matters to American communities and the people who live in them."

    KC's View:

    The one thing that I don't see in all this verbiage - and maybe I'm just missing it - is how Walmart plans to certify the provenance of these USA-centric products.  Is there a third-party certification program that it plans to use to assure us that these claims are accurate?  Is it planning to offer its own certification program, one with teeth and credibility?

    Yes, the things that Furner is talking about matters.  But what also matters is that we can have faith in the process, which requires a kind of aggressive transparency.

    Published on: March 4, 2021

    The Wall Street Journal reports that "Google plans to stop selling ads based on individuals’ browsing across multiple websites, a change that could hasten upheaval in the digital advertising industry.

    The Alphabet Inc. company said Wednesday that it plans next year to stop using or investing in tracking technologies that uniquely identify web users as they move from site to site across the internet.

    "The decision, coming from the world’s biggest digital-advertising company, could help push the industry away from the use of such individualized tracking, which has come under increasing criticism from privacy advocates and faces scrutiny from regulators.

    "Google’s heft means that its move is also likely to stoke a backlash from some competitors in the digital ad business, where many companies rely on tracking individuals to target their ads, measure their effectiveness and stop fraud. Google accounted for 52% of last year’s global digital ad spending of $292 billion, according to Jounce Media, a digital-ad consultancy."

    According to the story, "Google says its announcement on Wednesday doesn’t cover its ad tools and unique identifiers for mobile apps, just for websites. But its plan is the latest sign that the tide might be turning on user tracking more broadly."

    KC's View:

    We can see from the actions of Google and Apple the fact that consumer concerns about privacy may have reached a kind of tipping point.  Facebook is going to do its best to tip things back to the way they've been, but hopefully it will be unsuccessful.

    Maybe we as consumers finally are understanding that if we're not paying for the product, then we are the product.

    Published on: March 4, 2021

    The 2020-2021 American Customer Satisfaction Index (ACSI®) Retail and Consumer Shipping Report is out, saying that " while much of the Retail sector anticipates a turnaround in 2021, customer satisfaction is not heading in the right direction.  Overall, the Retail sector declines 2.3% to a score of 75.5 (out of 100)."

    Some excerpts:

    •  "After four years of near-stable customer satisfaction, the supermarket industry plunges 2.6% to 76, with 17 of 20 major grocers posting lower scores year over year.

    "Trader Joe’s tops the supermarket industry – and the entire Retail sector – with a stable score of 84. Four companies tie for second place with scores of 82: Costco (down 1%), H-E-B (down 2%), Publix (down 1%), and Wegmans (down 2%).

    "The remaining top-tier performer from 2019, Aldi, slips 4% to tie with a stable Sam’s Club at 80.

    "At the low end of the industry, a group of big decliners languish further behind the industry average than they did in 2019. Southeastern Grocers slides 4% to 73, while Giant Eagle plummets 5% to 72.

    "Albertsons Companies also shows a steep ACSI drop, losing 5% to 71, tying for last place with Walmart, which declines 3%."

    •  "For 2020, online retail loses the most ground among all retail categories, tumbling 3.7% to an ACSI score of 78.

    "Nordstrom captures the industry lead despite retreating 1% to 81. In second place, Costco (down 1%), Etsy (down 2%), and Newegg (down 1%) are all deadlocked at 80. Former industry leader Amazon tumbles 5% to an all-time low score of 79.

    "With a stable score of 78, Target is the only e-commerce retailer to buck the downward ACSI trend. Most of the industry scores below the average of 78. Macy’s and Wayfair both tumble 4% to scores of 77, tied with eBay (down 3%)."

    •  "Following two years of customer satisfaction stability, the department and discount store industry retreats 1.3% to an ACSI score of 75. While two companies eke out small gains, 13 of 19 major store chains suffer customer satisfaction declines year over year.

    "Costco remains in first place for a fifth straight year, despite declining 2% to a score of 81. Its lead is also shrinking."

    •  "For a third year, customer satisfaction with the health and personal care (drug) store industry weakens, dropping 1.3% to an ACSI score of 75.

    "The group of smaller drug stores remains the industry leader, albeit with a lower score, down 4% to 79. CVS is next, steady at 77 for the third straight year, followed by Kroger, which slides 3% to a score of 76.

    "Walgreens stays below the industry average, inching back 1% to 74. Walmart is next, slipping 1% to 73. Rite Aid shares the bottom of the industry with Albertsons Companies, both tumbling 4% to 72."

    KC's View:

    While I think declining customer satisfaction always has to be a concern, I also believe that 2020 was just an weird year - with enormous demands on businesses, escalating expectations from shoppers, and a chaotic, surreal environment in which to conduct commerce - that it is important not to internalize these ratings too much. Just redouble efforts to serve shoppers, and keep moving forward. Surreality can't last forever. (Hopefully.)

    Published on: March 4, 2021

    The Los Angeles Times reports that "Walt Disney Co. plans to close 60 of its Disney Store locations throughout North America while the entertainment giant overhauls its online shopping platforms."  The stores being closed represent close to one-third of its US fleet, and 20 percent of its global retail footprint.

    “We now plan to create a more flexible, interconnected ecommerce experience that gives consumers easy access to unique, high-quality products across all our franchises,” Stephanie Young, Disney’s president of consumer products, games and publishing, said in a statement.

    KC's View:

    It wasn't all that long ago that Disney stores were everywhere … and then, a few years ago, they overhauled the concept to make it more relevant for the 21st century.  These closures aren't just expected, but inevitable … and I'd guess that we'll see a lot more closures before long as bricks-and-mortar becomes less important and malls - where many of these stores are located - start to have more cobwebs than customers.

    Published on: March 4, 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 29,456,377 confirmed cases of the Covid-19 coronavirus, resulting in 531,652 deaths and 20,003,325 reported recoveries.

    Globally, there have been 115,855,972 confirmed coronavirus cases, with 2,573,498 resultant fatalities, and 91,541,095 reported recoveries.  (Source.)

    •  The Washington Post reports that "at least 52.9 million people have received one or both doses of the vaccine in the U.S.  This includes more than 27 million people who have been fully vaccinated … 107 million doses have been distributed."

    •  The Wall Street Journal reports:

    "There were more than 65,000 new reported cases for Wednesday, according to data compiled by Johns Hopkins University and published early Thursday morning Eastern time. That number might update later. The tally was higher than the 56,758 reported a day earlier, but lower than the 74,429 reported a week earlier.

    "Deaths, a lagging indicator, rose for the third day in a row, with the nation reporting more than 2,300 for Wednesday, according to Johns Hopkins data. There were 1,924 a day earlier and 3,146 a week earlier."

    •  From the Washington Post:

    "The vast majority of global coronavirus deaths occurred in nations with high levels of obesity, according to a new report linking overweight populations with more severe covid-related illness and mortality.  The report, by the World Obesity Federation, found that 88 percent of deaths due to covid-19 were in countries where more than half the population is classified as overweight - including the United States. The organization called on governments to prioritize overweight people for coronavirus testing and vaccinations."

    •  From Variety:

    "Alamo Drafthouse Cinema did everything it could to weather the COVID-19 pandemic. It furloughed most of the staff, cut pay for those who remained, rented out theaters for private events, paused costly development projects, leaned on its merchandising business to keep revenue coming in, and launched an on-demand movie service.

    "In the end, it was not enough. The company - the largest privately held theater chain in the U.S. - filed for bankruptcy protection on Wednesday morning.

    "Alamo Drafthouse joins Studio Movie Grill and Cinemex, two other sizable theater chains that also found they could not survive the prolonged shutdown and the absence of new releases without bankruptcy protection."

    The 40-location Alamo Drafthouse chain will remain in business through the bankruptcy, as investors buy debt back from the banks and renegotiate with creditors,

    Published on: March 4, 2021

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  The New York Times this morning has a piece about how "Amazon has spent the pandemic embarking on a warehouse shopping spree in New York, significantly expanding its footprint in the biggest and most lucrative market in the country.

    "It has snatched up at least nine new warehouses in the city, including a 1 million-plus square foot behemoth rising in Queens that will be its largest in New York, and today has at least 12 warehouses in the five boroughs. And it has added to its roster more than two dozen warehouses in suburbs surrounding the city."

    Remarkably, the story points out, "No other large competitor has a single warehouse in the city and Amazon has largely left most of its chief rivals, like Wal-Mart and Target, behind."

    It is not a negligible advantage.  One of the the things the Times story says is that New York only has a total of about 128 million square feet of industrial space, which is not much for a major city.   By way of comparison, Chicago - which has the most of any major US city - has 1.2 billion square feet, or about 10 times as much.

    Let's use a football metaphor.  Amazon plays in effect offense to the point that it controls the clock - its time of possession, at least in New York City, dwarfs the opposition.  Which means, if you are a competitor, you'd better figure out a way to compete that neutralizes that advantage.

    •  The Wall Street Journal reports that Amazon appears to be on the verge of signing a deal with the National Football League that, beginning in 2022, could give its Prime streaming service exclusive rights to many Thursday Night Football games, possibly for as long as a decade.

    Such a deal would "represent the league’s deepest foray into streaming … Those games wouldn’t be available on traditional television outside of the local markets of the two teams playing."

    The Journal makes the point that an agreement would reflect the NFL's recognition that streaming is a significant factor in its future, though to this point viewership has not been as high on Amazon as on Fox, CBS, NBC and ESPN.    But the check Amazon would be willing and able to write certainly will compensate … and once it locks in a long-term contract, the odds are pretty good that Amazon will market this heavily (along with all the other major sports and games that it will acquire once the precedent is set).

    •  CNBC reports that fast feeder Wendy's is saying that its new loyalty program is expected to drive digital sales to 10 percent of total chain sales this year, three years ahead of schedule.

    “We didn’t think we’d get to 10% until 2024, pre-pandemic,” says CEO Todd Penegor.  "What we’re doing is driving a lot of active users into our app and people are engaging in the app. We’re seeing a lot more mobile ordering and it’s really because there’s a benefit.”

    CNBC notes that "Wendy’s also found success in the breakfast menu it launched last year. While fewer Americans commuted to the office during the pandemic, disrupting their odds of stopping at a restaurant for a morning breakfast sandwich or coffee, breakfast sales made up about 7% of total sales last year, the company said.

    "Penegor remained optimistic about being competitive with other restaurants in the morning rush. He expects the breakfast menu to account for 10% of sales by the end of 2022."

    •  CNBC reports that "Yum Brands announced Tuesday that it has bought Kvantum, a company that uses artificial intelligence for consumer insights and marketing performance analytics.  The Taco Bell owner plans to use the acquisition to optimize its marketing spending, giving it a leg up on fast-food rivals. In the last decade, deal-making in the restaurant industry has expanded from adding more portfolio brands to purchasing technology that can drive sales growth for the buyer."

    Terms of the deal were not disclosed.

    Published on: March 4, 2021

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  CNBC reports that Target "hopes to build on recent growth by investing about $4 billion annually over the next few years to speed along new stores, remodel existing ones and increase its ability to quickly fulfill online orders.

    "That represents a step up for the retailer, which invested about $2.65 billion in 2020."

    CNBC writes that "Target CEO Brian Cornell made the case that the retailer’s recent results aren’t a pandemic-related blip but the payoff of its long-term business strategy. He pointed to investments and decisions it has made over the past five years such as its growing collection of private-label brands, its partnerships with popular national brands and using its stores as hubs to fulfill online orders."

    •  Bloomberg reports that "the contemporary convenience store chain Foxtrot - known for 60-minute delivery guarantee of organic wine, hard seltzer, and locally made ice cream - has raised $42 million in Series B funding … The new investment round is led by the food-tech venture capital firm Almanac Insights, whose founder is David Barber, co-owner of the celebrated restaurant Blue Hill at Stone Barns, in Tarrytown, N.Y. (His brother, Dan, is the chef.) Other investors include chef David Chang, founder of Momofuku, and Nicolas Jammet, Sweetgreen Inc.’s co-founder and co-chief executive officer. Monogram Capital Partners and former Whole Foods Market Inc. CEO Walter Robb have also contributed funds. The company has raised $65 million to date."

    I'd love it if these same investors would train their eye on Green Zebra in Portland, Oregon, which strikes me as the kind of venture that might fit nicely into their vision of food retailing (though it may have a somewhat more eclectic vibe than Foxtrot seems to).

    •  Apollo Global Management is acquiring arts-and-crafts retailer Michael's in a deal that values the 1,200-unit chain at $5 billion.  The move is a bet, the New York Times writes, "that Michaels can continue to ride the wave of enthusiasm for crafting spurred by Americans stuck at home during the pandemic."

    •  The Associated Press reports that "Bed Bath & Beyond will launch a slew of new store brands to lure younger customers in a bid to energize sales at the home retail chain.  The chain will begin selling eight new store brands this year, six of them in the first half of 2021 … Store brands are expected to increase from roughly 10% of the retailer's overall sales to approximately 30% within the first three years."

    In addition, Bed Bath & Beyond plans to "begin selling thousands of exclusive products as it seeks a bigger share of the $180 billion home market."

    Now, if they can just get people to shop at its stores without grasping one of those blue-and-white discount coupons in their fingers…

    Published on: March 4, 2021

    •  Leslie G. Sarasin, president/CEO of FMI – The Food Industry Association, has been named the 2021 Association CEO of the Year by CEO Update, which is itself a trade association for trade association CEOs.   This recognition is awarded annually to the outstanding trade association CEO.

    Sarasin was nominated for the honor by the FMI Board of Directors:  "Under her leadership, FMI has emerged as a member-centered organization helping food retailing venues find new and future facing ways of feeding families and enriching lives," said Randy Edeker, Hy-Vee's chairman/president/ CEO, who currently serves as FMI's chairman.  "A committed collaborator, Leslie has infused FMI with a vision of cooperative action that amplifies the association’s ability to assist its members in addressing the critical industry issues of the day."

    •  SpartanNash said that Amy McClellan, the company's SVP - Retail Operations and Merchandising for Martin’s Super Markets and Division Vice President - Retail, has been promoted to the role of  Vice President, Fresh Merchandising, responsible for both the company's owned stores and independent retail customers.

    Published on: March 4, 2021

    Responding to yesterday's exchange about the protestors who behaved badly at a California Trader Joe's when they objected to pandemic-related mandates such as masks, one MNB reader wrote:

    Hillary Clinton would call those people “deplorables” and I would 100% agree.  

    From another reader:

    Now that these stupid idiots have ignored the store policy and refused to give a crap about anyone else, maybe, just maybe, this video can be used to track them down.  The pregnant lady, really?? I guess it is quite obvious where your priorities lie.  And who is the old guy in his roady outfit ??  What “movement” is he associated with??  This is so unbelievable, I don’t know how I would have handled it as the manager.  I guess start taking my own photos so I could show police who we are pressing charges against.  I hope that TJ has the courage to step up against this action.  I know as a customer if they didn’t, I would say goodbye.

    The pregnant woman protesting without wearing a mask really got my Irish up - she wasn't just putting herself and other people in the store at risk, but potentially her child.  Unacceptable.

    And yes, that group of protestors did sort of seem like a cheap road company version of the people who stormed the US Capitol on January 6.

    MNB reader Kevin Watkins wrote:

    Regarding the “cash drop” video at Trader Joe’s.  I defy anyone to show me a nicer group of people than those you will find staffing a typical Trader Joe’s store.  They did not deserve the treatment they received from that gang of extremely misguided, belligerent (fill in your favorite unprintable plural noun here).

    Those plural nouns are printable.  I've just chosen not to … though I've argued with myself about this for the last 24 hours.

    Yesterday we had a story about how Kohl's says that it acquired two million new customers during 2020 because of its Amazon relationship that allows people to return online Amazon purchases to a Kohl's store.

    MNB reader Bob Foisy responded:

    On the Kohl’s story about new customers, I have taken several things back to Kohl’s and the first time I was given a 25% off coupon that I could use for the next week. I thought that was nice and walked around the store for about 20 minutes trying to find something to buy and there was nothing that I could see that I wanted to buy. If they are counting me as one of their new shoppers then that is misleading since I have been in the store several times but have never bought anything.

    But another MNB reader wrote:

    The 20% Kohl’s discount coupon made my return happy.

    Different strokes…