business news in context, analysis with attitude

Published on: March 5, 2021

You're probably aware that a new streaming service launched yesterday - Paramount+.  Except that it isn't really new.  It is a rebranding of CBS-All Access.  Except in this case, KC argues, the service is trying to make an impact in a crowded space by using a brand that may have less equity and awareness than the original.  There's a lesson here…

Published on: March 5, 2021

•  Kroger said yesterday that its total 2020 sales were up 8.4 percent to $132.5 billion, with digital sales that were up 116 percent to more than $10 billion.  Same-store sales were up 14.1 percent.  The retailer also said that it has 2020 profit of $2.6 billion, a 5.6% increase. 

In reporting its numbers, Kroger also said that it has "invested an incremental $300 million in 2020 that has raised our average hourly wage $15.50.  Ongoing investment in health care, pension and retirement – which many of our competitors don’t offer – adds another $5/hour that brings Kroger’s total average hourly wage to over $20.  We plan to invest an additional $350 million more in 2021 alone to continue raising associate wages."

The Cincinnati Enquirer notes that "Kroger's growth was propelled by an epic shift of customers' food consumption habits amid the COVID-19 pandemic: nearly $1 of every $4 that Americans used to spend going out to eat has shifted away to food consumed at home – so that's $162 billion extra mostly going into supermarket coffers, according to the U.S. Department of Agriculture. In early 2020, Americans were spending 49 cents of their food dollars at grocery stores, they are now spending about 56 cents."

•  Costco yesterday said that its Q2 revenue was up 15 percent to $44.77 billion, on same-store sales that were up 12.9 percent.  Earnings were $951 million, compared with net income of $931 million in the year-ago quarter.

The retailer’s e-commerce sales rose 74.8% compared to a year ago, with the average ticket size increasing 11.9% company-wide.

Published on: March 5, 2021

The New York Times reports that in areas where Amazon has a presence, "low-wage workers at other businesses have seen significant wage growth since 2018, beyond what they otherwise might have expected, and not because of new minimum-wage laws. The gains are a direct result of Amazon’s corporate decision to increase starting pay to $15 an hour three years ago, which appears to have lifted pay for low-wage workers in other local companies as well, according to new research from economists at the University of California, Berkeley, and Brandeis University.

"The findings have broad implications for the battle over the federal minimum wage, which has stayed at $7.25 an hour for more than a decade, and which Democrats are trying to raise to $15 by 2025. For one, the research illustrates how difficult it can be for low-wage workers to command higher pay in the modern American economy — until a powerful outside actor, like a large employer or a government, intervenes."

The Times notes that "a mounting body of research in recent years suggests that labor markets don’t work in practice the way they do in some economic models. Employees often have less information about their worth than employers, or face greater risks to changing jobs, or can’t readily move between employers the way a pure market assumes. These “frictions,” in economic jargon, often benefit employers over employees, pushing down wages below where supply and demand suggest they should be.

"But that leaves room for other forces - in the form of political pressure, organized bargaining or a minimum wage - to push wages up."

Published on: March 5, 2021

CNN  reports that Dollar Tree plans to open 600 new stores this year - 400 under its Dollar Tree banner and 200 in its Family Dollar format.

Last year, it opened 400 stores, and it now has well over 15,000 locations.

The story notes that "the announcement comes as the pandemic has taken a toll on many retailers and forced thousands of stores to close. But dollar stores have surged as economically-strapped customers seek out bargains on food, household essentials and other items … Dollar Tree has lagged rival Dollar General in recent years. Dollar General has been opening roughly 1,000 stores a year and now has upwards of 16,000 US locations."

CNN writes that Dollar Tree also announced a plan "to crack the rural market by opening 50 new 'combination stores' that feature elements of Dollar Tree and Family Dollar outlets and sell a mix of merchandise — Dollar Tree's typical $1 seasonal items plus Family Dollar's food and essentials for more than $1.  The concept is targeted at towns with 3,000 to 4,000 people, and Dollar Tree sees an opportunity to open around 3,000 of these stores … Dollar Tree has a treasure hunt-like atmosphere in stores and caters to suburban, middle-income shoppers. It carries primarily seasonal goods, toys, stationary, home decor, kitchenware, and party items. Family Dollar is tailored to lower-income shoppers in rural and urban areas, and stocks more food and household basics than Dollar Tree."

Published on: March 5, 2021

The Des Moines Register reports that as early as next month, Hy-Vee will partner with the W Nail Bar chain to begin opening nail salons in some of its stores.

The retailer said that in addition to manicures, the salons will offer "pedicures, nail art, waxing and tinting," and will "follow the same safety protocols used in the chain's other salons, including ensuring cleanliness and operating at half capacity to ensure safe social distance."

“Through our partnership with The W Nail Bar, we are revolutionizing the way customers shop in our stores by bringing engaging, experiential and convenient services to our customers,” Randy Edeker, Hy-Vee chairman and CEO, said in a prepared statement.

Published on: March 5, 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 29,526,086 Covid-19 coronavirus cases, resulting in 533,636 deaths and 20,093,442 reported recoveries.

Globally, there have been a total of 116,307,456 coronavirus cases, with 2,583,349 resultant fatalities, and 91,960,954 reported recoveries.   (Source.)

•  The Washington Post reports that "at least 54 million people have received one or both doses of the vaccine in the U.S.  This includes more than 27.8 million people who have been fully vaccinated …109.9 million doses have been distributed."

The New York Times reports that this means that "providers are administering about 2.04 million doses per day on average."

•  From the Wall Street Journal this morning:

"Newly reported coronavirus infections ticked down slightly and deaths declined, as the number of cases each day appeared to plateau after a recent drop … While most states continue to see declines, some states are seeing an uptick. The Journal’s analysis showed that in more than 15 states as of Wednesday, the average number of new cases over the past seven days was greater than the average number of cases over the past 14 days, a sign cases are on the rise. Those states include Texas, Arkansas, New Jersey and Mississippi."

Texas?  Mississippi?  Really?  Wonder what they have in common?

•  Dr.  Anthony S. Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases (NIAID), weighed in on the decision by some states to end pandemic-related restrictions and mask mandates, saying, "I don’t know why they’re doing it but it’s certainly, from a public health standpoint, ill-advised."

The Washington Post writes that Fauci also called the decision "inexplicable."

Maybe not so much.

I am reminded this morning about Michael Sansolo's chapter about the movie Charlie Wilson's War in our book, "The Big Picture: Essential Business Lessons from the Movies."  In the movie - which tracks what happened in real life, Rep. Charlie Wilson (ironically, from Texas!) pushes for US funding of Afghan freedom fighters.  When it is delivered, the rebels begin to make strides in their battle against the Soviets.  However, when the Soviets withdraw, the US cuts off additional funding that would have built schools, restored plumbing, and dramatically improved conditions in Afghanistan - allowing the country to fall into chaos and proving a window for the Taliban.  In the words of the movie, "We F#@*&ed up the endgame."  Which is exactly what could happen here if we allow impatience and exhaustion to dictate our actions against Covid-19.

•  Great quote this morning from West Virginia Gov. Jim Justice, whose state has been highly effective at vaccine distribution, explaining why he is resistant to removing mask mandates and other restrictions at this time:

"One robin does not make spring."

•  The Wall Street Journal also reports that "Connecticut is lifting all capacity limits on offices, retail shops and restaurants in the state’s most expansive rollback of restrictions since the Covid-19 pandemic began.

"The restrictions, which currently cap capacity at 50%, end on March 19, according to state officials. Capacity limits at gyms, bowling alleys, libraries and houses of worship will also be lifted on that date. Personal-service businesses like barber shops and salons can also fully reopen.

"Connecticut’s mask mandate, however, will remain in effect."

“This is not Texas. This is not Mississippi. We are maintaining the masks,” said Gov. Ned Lamont.

Too much, too soon, methinks.  

But I also have to think that what the states says will be less important than how consumers react.  I know that it'll be awhile before I am comfortable going to a bar or sitting inside a restaurant, especially one that is crowded.  I'm guessing that some restrictions could be reimposed within six weeks.  I hope I'm wrong.

•  The Wall Street Journal reports that "a backlash is growing in Connecticut and Maine following the adoption of age-based eligibility rules for Covid-19 vaccinations that will force some people with serious medical conditions and essential workers to wait longer for their turn.

"The two states are the only ones in the country to base eligibility for the Covid-19 vaccine mostly on age. In recent weeks, both abandoned previous plans to also give priority to people with certain underlying medical conditions and people working in some occupations. In Connecticut, people 55 years and older are currently permitted to get the vaccine, and in Maine people 60 and older can get it.

"Younger people will become eligible in phases. Both states have carved out an exception for people who work in education."

The story points out that "the eligibility criteria for Covid-19 vaccines varies by state, but all have given priority to vaccinating their oldest residents and healthcare workers. The vast majority also follow the Centers for Disease Control and Prevention’s guidelines to give priority to people with high-risk underlying medical conditions and essential workers."

First - full disclosure.  I live in Connecticut, and I am old enough to have gotten my first Moderna shot more than two weeks ago.  Mrs. Content Guy got her first shot this week.  My daughter, who is 26, is a teacher and is scheduled to get her first shot later today.  So as a family, we've benefitted from the change in Connecticut policy and the fact that the governor has decided to ignore CDC recommendations.

I have to admit that I am troubled by the Connecticut approach - mostly because I know people with high-risk health conditions who are younger than I am, and who have been unable to get vaccination appointments.  They should've been able to go before me, and the Connecticut approach to public health policy was inadequate for the moment.

I will tell you, however, that whatever the inadequacies and inequities here, it could be a lot worse.  I did a remote speech to an Irish group this week, and at the beginning I asked how many folks had been vaccinated.  The answer was - nobody.  In Ireland, unless you are a healthcare worker or live in a nursing home, the demographic currently being vaccinated is age 85+.  (A large part of the problem there is vaccine supply, apparently.)  The Gaelic response to this, I think, would be, "Cac asail!"

•  The Seattle Times reports that "with federal COVID-19 vaccine shipments on the rise, Gov. Jay Inslee Thursday expanded the list of Washingtonians eligible for doses in the coming weeks to law enforcement, public transit and grocery workers, and to people incarcerated, people experiencing homelessness and people with underlying medical conditions.

"The new timelines — which are still tentative — nonetheless put some specifics to a vaccination plan that is picking up speed after a slow start … The governor pointed to the quickening pace of vaccinations in Washington, saying more than 1.7 million doses have so far been administered. That includes two recent days where more than 60,000 doses were administered each day, he said, calling it 'a remarkable acceleration of our vaccination program'."

•  The New York Times has a story about an additional vaccine problem occurring globally - there are not enough syringes.

From the Times story:

"Officials in the United States and the European Union have said they need more. And in January, Brazil restricted exports of syringes and needles when its vaccination efforts fell short.

Further complicating the challenge, not just any syringe will do the trick.

"Japan revealed last month that it might have to discard millions of doses of the Pfizer-BioNTech vaccine if it couldn’t secure enough syringes able to draw out a sixth dose from vials. In January, the Food and Drug Administration advised health care providers in the United States that they could extract more doses from the Pfizer vials after hospitals there discovered that some contained enough for a sixth — or even a seventh — shot."

According to the story, "The world needs between eight billion and 10 billion syringes for Covid-19 vaccinations alone, experts say."

•   The Washington Post reports that after eight gorillas at the San Diego Zoo were found to have Covid-19 earlier this year, the zoo said this week that "four orangutans and five bonobos have now received two doses of a coronavirus vaccine made specifically for animals. They’re the first nonhuman primates to be vaccinated against the virus, which has been shown to infect a number of mammals."

The Post writes that Pascal Gagneux, a zoologist at the University of California at San Diego, says that "the zoo made the right decision.  'It makes quite a bit of sense. These animals are incredibly precious.  There’s a very finite number of great apes in captivity."

•  From Fast Company:

"Ro, an online pharmacy that got its start prescribing sexual health products, is now offering to vaccinate seniors at home in New York.  The company is working with the New York Department of Health as well as local organizations on the effort."

The program is being tested in Yonkers, New York.

"Ro’s nurses, who are supplied through a staffing agency, pick up doses from healthcare providers and bring them directly to a roster of patients based on their proximity," the story says.  "After giving a patient a shot, nurses will monitor them for 20 minutes just in case there is a rare adverse event.

"Ro CEO Zachariah Reitano says he believes that his company will be able to deliver at least one vial of 10 doses per healthcare provider every day. If there are extra doses left over at the end of the day, Reitano says that Ro is working with the mayor’s office to give excess vaccines to essential workers like police officers and firefighters. The goal is to expand the program over time to other parts of the state."

Wait a minute.  An online pharmacy specializing in sexual health is going to nursing homes to give vaccines?  I hope they don't get their syringes mixed up.

Published on: March 5, 2021

•  The Cincinnati Business Courier reports that the first robotically-picked grocery order has rolled out of Kroger's new Ocado-powered, technology-driven warehouse, though Kroger is characterizing it as part of a "soft opening" in advance of the facility formally going online next month.

The Dayton Business Journal writes that the Monroe, Ohio facility "is a $55 million, 335,000-square-foot behemoth that will employ more than 400. Kroger broke ground on the building in June 2019."

Published on: March 5, 2021

•  CNBC reports this morning that "hiring surged in February as the U.S. economic activity picked up amid a progressive drop in Covid-19 cases and vaccines provided hope of more growth ahead.

"The Labor Department on Friday reported that nonfarm payrolls jumped by 379,000 for the month and the unemployment rate fell to 6.2%. That compared to expectations of 210,000 new jobs and the unemployment rate to hold steady from the 6.3% rate in January."

•  From the Wall Street Journal:

"Filings for unemployment benefits in the latter half of February reached their lowest level in nearly three months amid signs of slow labor-market improvement.

"The Labor Department said jobless claims, a proxy for layoffs, rose slightly to 745,000 for the week ended Feb. 27, from a revised 736,000 the prior week. The four week moving-average, which smooths out week-to-week volatility in claims numbers, was just under 800,000, its lowest level since early December … Despite the easing, worker filings for jobless benefits have remained elevated since the pandemic hit last March, holding above a pre-pandemic peak of 695,000."

•  USA Today reports that the woman who was wildly ridiculed for shaming a San Diego Starbucks employee who asked her to wear a mask - and was caught on video doing so - now is suing the person who created a GoFundMe campaign that raised more than $100,000 for that barista.

According to the story, the woman wants half the money raised, filing a lawsuit for "violation of her right to publicity," "misappropriation of her name and likeness," and "false light invasion of privacy." 

USA Today writes that "the case could be thrown out under California’s anti-Strategic Lawsuit Against Public Participation law, according to Eric Goldman, associate dean for research and a professor at Santa Clara University School of Law. The state law is designed to prevent lawsuits that discourage speech about issues of public significance."

Gee., she's not acting like someone who doesn't want publicity.  She's acting just liken the kind of person who would berate an employee for trying to do his job, and would ignore intelligent public health mandates.

Published on: March 5, 2021

Yesterday we reported on how some states - Texas was the most prominent - were ending pandemic-related restrictions like mask mandates, even as national public health experts warned that it was too early to do so.  A number of retailers said they will continue to mandate masks for customers and employees in their stores, but there was a Houston Chronicle report 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."

I commented, in part:

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.

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.

One MNB reader responded:

Are you really under the impression that retailers have been denying entry to customers that don’t wear masks? Certainly employees are wearing them and even most shoppers but after a confrontation or two, some of which got quite ugly, most retailers may still remind customers but don’t push back. 

I'm sure.

But I also know this.  In the year or so since the pandemic started, in the part of the country where I live, I have not seen one single person in a retail store not wearing a mask.  I have not read one local story about confrontations over mask-wearing.  I'm sure it has happened … but not to the degree that it seems to be happening in some other areas of the country.

Make of that what you will.

A question from another reader:

What if the retailer does not enforce the “no mask no service policy”, and someone contracts the virus that can be directly related to, say this incident?  Will, could, that person now take legal action against the chain?  Could be a very slippery slope.

Good question.  People have been sued for less.

Regarding the testing of vaccine passports, one MNB reader wrote:

OK, so help me understand, from what I know and I will admit I have not done a ton of research but the Vaccine does not prevent someone from getting the virus or from spreading the virus. From my understanding it only decreases the affects of the virus if and when you do get it. Is that the way you understand it?

If this is the case then what difference would it make for entry into a club, stadium, or gym. I get the vaccine but can still get it or pass it along.

I get your point.  But if the people who go into such venues all have been vaccinated, then doesn't that drive down the likelihood of a super-spreader event in which lots of people get very sick and end up in the hospital?  Doesn't it do what we need it to do - which is to drive down the seriousness of the disease and its spread?   After all, they all will have been vaccinated and, I assume, they'll be wearing masks.

I think people are just reaching for ways in which we can reopen parts of the economy that have been closed in as safe a way as possible.

Regarding Walmart's $350 billion commitment to USA-centric products, one MNB reader wrote:

Are they actually planning on paying more for US made goods?  Are they redirecting purchases from offshore to US companies??  If they are truly “investing” are they going to lower margin requirements so that prices remain the same?  All questions I feel they should provide answers to, before, they can put “Made in USA” on they tag.  Just for clarification, made in USA is not the same as buying materials offshore and assembling here.  That is just verbal mumbo jumbo.

I agree … which is why I called for Walmart to work with a credible certification system that will cut through the mumbo jumbo and provide radical, aggressive transparency.

Published on: March 5, 2021

I don't think it is too much of a stretch to suggest that someday - hopefully sooner rather than later - we'll be living in what people in a dystopian movie would call the "after-times."  But for the sake of simplicity, let's just call it post-pandemic.

I've been writing here on MNB almost from the beginning about how retailers needed to think about how they would be different coming out of the pandemic than they were going in … and one of the areas in which I think that virtually every food retailer needs to focus on is fresh.  Especially in an environment where e-commerce has gained market share, bricks-and-mortar retailers are going to have to get better at fresh in order to differentiate themselves as a worth-the-trip alternative, and e-grocery companies are going to work to be better as a way of growing their businesses.

Which is why I was so pleased to be asked to host/moderate a one-hour webinar next Wednesday on the subject of "The Quest for Quality Produce in a Post-Pandemic World," in which we'll be talking with a variety of expert players in fresh produce business about how they are working to assure a stronger and more reliable supply chain that will deliver the quality that consumers have every right to expect.

I hope you'll join us for this complimentary webinar, sponsored by iFoodDS.  My goal is to make sure the session is both illuminating and entertaining, while asking the questions that you'll want answered.  And if I don't - you'll be able to.

For information about how to register for this session, click here.

Published on: March 5, 2021

Supernova is the very definition of a "small movie."  Not much happens in its 93 minute run time.  Two middle aged gay men - one a writer, the other a concert pianist - are in a small RV, driving across England.  They talk.  Bicker a bit.  They stop to look at a beautiful night sky.  They visit friends.  They continue on their way, headed toward a venue where the pianist has a scheduled recital.  And that's it.

Except, that's not it.  Supernova may be small in scale, but it is an enormously affecting film.. Tusker, the writer played by Stanley Tucci, is suffering from early onset Alzheimer's, and while the effects seem to have been minor to this point, he knows that he is headed for an inevitable future in which he will not know Sam, his longtime partner, nor will he know himself.  And Sam, played by Colin Firth, is trying to figure out where he fits into what is left of Tusker's life, how to best care for this man he loves so deeply, and how he will survive in a world in which Tusker does not recognize him.

There may be no two better people on the planet better equipped to play these roles than Tucci and Firth, who slip effortlessly into their characterizations in a way that makes it seem less like acting and more like being;  the fact that Firth and Tucci reportedly are longtime friends only adds to the emotional intimacy they bring to the movie.  And the situation they face - both together and separately - is so familiar to those of us who have dealt with loved ones who have suffered from various forms of dementia that we are instantly invested in their relationship and characters.

I loved Supernova about as much as any movie I've seen recently - written and directed by Harry Macqueen with grace and heart and understatement, and acted by two professionals at the top of their games.   Supernova is available to be rented on Prime Video, Apple TV, and a number of other streaming services.

I have a lovely red wine to recommend to you this week - the 2018 Cantine Colosi Nero D'Avola, a Sicilian wine that is deep and dark with intense aromas - it would be perfect with pasta and a red sauce, though I had it with freshly made pizza.  And then had some more while I was watching part three of "Stanley Tucci: Searching For Italy" on CNN, which just seemed appropriate.

That's it for this week … Have a good weekend … and I'll see you Monday.

Stay safe.  Be healthy.

Sláinte!