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    Published on: May 14, 2021

    KC ruminates about the implications and complications of yesterday's CDC decision that fully vaccinated people no longer have to wear masks indoors or outdoors, except in certain places.  It has been a long time coming … but he admits that he still has trust issues, and wonders how retailers will deal with the current scenario.

    Published on: May 14, 2021

    Apollo Global Management said yesterday that it will sell Smart & Final, the Southern California-based retailer, to Bodega Latina Corp., the US subsidiary of Mexico's Grupo Comercial Chedraui, for more than $600 million.

    The Wall Street Journal notes that this is just the latest case of an international player expanding its US footprint:  "Japan-based Pan Pacific International Holdings Corp. agreed to buy Gelson’s Markets in California earlier this year, while Korea’s E-mart Inc. bought Good Food Holdings, the owner of Bristol Farms and New Seasons Market, in 2018."   Bodega Latina already owns the El Super and Fiesta Mart chains, and this "acquisition will boost its geographic footprint in the western U.S., including California and Arizona."

    The story points out that Apollo took Smart & Final private two years ago for $1 billion, and since then has sold the company's warehouse business to US Foods for $970 million.

    KC's View:

    Why is it always companies from outside the US coming here to buy retailers, but we rarely read about US retailers buying up their global brethren?

    I've never understood this.

    As for this deal … I've always liked the Smart & Final company and the people there, and I'm happy for any deal that gives it the financial resources to compete in an increasingly cutthroat marketplace.

    Published on: May 14, 2021

    The Wall Street Journal reports that "some of the biggest U.S. employers of entry-level workers are adding tens of thousands of new positions as the economy roars back from the coronavirus pandemic. Many are raising wages or adding perks to entice workers from other jobs or off the sidelines of the labor market.

    " Inc. said Thursday that it would hire 75,000 more workers and offer $1,000 signing bonuses in some locations, its latest hiring spree in a year of tremendous job growth at the e-commerce giant. McDonald’s Corp. said it wants to hire 10,000 employees at company-owned restaurants in the next three months and that it would raise pay at those locations. Chipotle Mexican Grill Inc., Applebee’s and KFC are among other chains seeking to hire tens of thousands of workers as they restore indoor seating and seek to bolster staffing there."

    The story notes that "demand for workers is so high that wages are rising, too. Average hourly earnings for private-sector employees rose by 21 cents to $30.17 last month, according to a recent Labor Department report. The gain is notable because strong hiring in the lower-wage hospitality sector would typically put downward pressure on average earnings, economists said."

    KC's View:

    I know that there is a growing feeling out there that unemployed people are getting so much government assistance that they're not going back to work, and there may be some element of truth to that.  

    I do think it is a little more complicated that that - we are actually coming out of a pandemic, and there are residual fears and personal issues with which people are grappling.  Yes, they have to get back to work, and yes, we shouldn't make it too easy for them not to.  But a little compassion isn't a bad thing.

    I also think it is important to remember that what some folks portray as extravagant government benefits isn't actually all that much money.  The dollars we're talking about are what some people - among them the very people who are complaining about the benefits - drop in T&E on a weekend.  The people getting these benefits are, for the most part, using the money to pay their bills, feed their kids, make rent or mortgage payments.  And it isn't like they are buying cryptocurrency on the side with all the extra dollars.

    It may be that the current scenario is creating an environment in which low age workers will become not-quite-so-low wage workers, putting them in a position where they can more comfortably pay their bills, feed their kids, make rent or mortgage payments.

    Published on: May 14, 2021

    The New York Post reports that Amazon plans to open an Amazon Fresh grocery store in the second of two former Fairway locations in New Jersey that it bought out of bankruptcy.

    The two stores are in Woodland Park and Paramus.  The Woodland Park location's conversion to an Amazon Fresh was confirmed by the company late last year, and now the Post reports that the Paramus store will get the same treatment.

    The Post writes that "Amazon may be looking to scoop up some more Fairway locations to expand Amazon Fresh’s footprint in the Northeast. Only seven of Fairway’s 14 stores were sold at last year’s bankruptcy auction, including the two that went to Amazon. Village Supermarket, which operates Shoprite stores, acquired at least four of those locations as well as rights to the Fairway brand."

    KC's View:

    My sense of the Fairway stores is that they probably are a little larger than ideal for the Amazon Fresh format … but that means that there could be plenty of space in which Amazon could operate some version of a micro fulfillment center that could effectively integrate its bricks-and-mortar and online operations.  You'd think this would be the sweet spot that Amazon is aiming for.

    There's a Stamford, Connecticut, Fairway store that's been closed for some time, and that, best I can tell, hasn't been picked up by any other retailer.  It doesn't seem like a big stretch to think that this also could be on Amazon's wish list.

    Published on: May 14, 2021

    CNet reports that Walmart and Target have removed trading cards - including NFL, MLB, NBA, Pokemon and other brands - from their shelves, citing "inappropriate customer behavior" and a desire "to ensure the safety of our guests and team members."

    CBS News frames the circumstances leading to these moves:

    "Trading cards have surged in popularity during the pandemic. Pokemon cards, especially, are flying off the shelves so fast the printing press can barely keep up. Some early editions of the card game, which turns 25 this year, have fetched hundreds of thousands of dollars in online auctions; even recently printed Pokemon cards are quickly climbing in price.

    "Soaring card prices are driving some would-be collectors to extremes. In recent months, scalpers have targeted Pokemon cards destined for McDonald's Happy Meals and ravaged cereal boxes on supermarket shelves to extract the special-edition cards within. In Japan, one man allegedly climbed down a rope to break into a store and carry away $9,000 worth of Pokemon cards, according to"

    The CBS story notes that "last week, a shopper leaving a Target store in Wisconsin was attacked by three men in the parking lot, leading the victim to pull out his gun and neighboring stores to impose momentary lockdowns. No shots were fired, and the victim suffered only minor injuries, according to reports.  It's unclear which type of trading card was the cause of the scuffle."

    KC's View:

    Y'know, I try hard to be an optimistic person, to be charitable, temperate and tolerant if my view of people and their beliefs and priorities.

    And then I read about bullcrap like this, and I decide that the world is going to hell in a hand basket.  When people start attacking each other over trading cards, I begin to think that the decline of western civilization may be irreversible.

    Oy.  Freakin' morons.

    Published on: May 14, 2021

    In Colorado, the Daily Camera reports that Kroger-owned King Soopers intends to reopen the Boulder store that was the scene of a mass shooting last March, probably by late fall.

    "The company is working to expedite renovations of the interior and exterior of the store, King Soopers spokesperson Jessica Trowbridge said during a news conference on Wednesday.  'The redesign will be thoughtful and will include input from both our associates and the community,' she said.

    "'We know that the building is just part of what makes this store so special and that restoring it is just another step in the journey … as we continue to rebuild and heal,' she later added."

    Published on: May 14, 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…

    •  The Centers for Disease Control and Prevention (CDC) yesterday revised its guidance to say that fully vaccinated people can participate in both outdoor and indoor activities without wearing a mask, with certain caveats.

    Those exceptions include travel on mass transit - planes, trains, buses - and while in train stations and airports, as well as while in hospitals, doctors offices and other healthcare facilities, plus correctional facilities and homeless shelters.

    "If you are fully vaccinated, you are protected, and you can start doing the things that you stopped doing because of the pandemic," said CDC Director Rochelle Walensky.

    People should still adhere to local regulations that are stricter than the federal rules, the CDC said, as well as follow rules set by businesses - like supermarkets - that still want people to wear masks indoors.

    I'll say it again.  I am totally comfortable with a national vaccination program that makes it easily determined who has been fully inoculated and who has not.  Vaccine passports strike me as being entirely reasonable, at least for the short-term future.

    In fact, I'll go even farther.  I've believed all along that businesses ought to require their workers to get vaccinated (with exceptions for religious or health reasons).  But I also think that any business that took government money during the pandemic ought to be required to mandate employee vaccinations … and at the very least, you can't get forgiveness of your government loan if you don't implement such a mandate.

    •  In the United States, there now have been 33,626,097 total cases of the Covid-19 coronavirus, resulting in 598,540 deaths and 26,667,199 reported recoveries.

    Globally, there have been 161,900,605 coronavirus cases, with 3,360,651 resultant deaths and 139,741,990 reported recoveries.  (Source.)

    •  The CDC says that 46.6 percent of the total US population has received at least one vaccine, with 35.8 percent being fully inoculated;  55.2 percent of people 12 or older have gotten one vaccine and 42.5 percent have been fully vaccinated;  58.9 percent 18 years of age or older have gotten at least one vaccine, with 45.6 percent being fully vaccinated.

    •  Axios reports that "three-quarters of people between the ages of 18-29 say vaccination should be required to return to campus or work, according to new Generation Lab/Axios polling. 37% would refuse to come back unless those conditions are in place."

    This matters, the story suggests, because "young workers have pressured CEOs to take action on social and political issues, and have plenty of capital to exert on reopening policy."

    •  The New York Times this morning reports that "Delta Air Lines will require new hires to be vaccinated against the coronavirus, but will exempt current employees from that mandate, making it one of the first major corporations to embrace such a requirement."

    CEO Ed Bastian said yesterday that "while current employees will be exempt … he expected 75 to 80 percent of the airline’s work force to be vaccinated anyway and that he would 'strongly encourage' the rest to do so. Unvaccinated employees could face some restrictions, such as not being allowed to work on international flights, he added."

    Published on: May 14, 2021

    •  CNBC reports that "Walmart’s former e-commerce chief Marc Lore said he’s ready to make big bets on digital retail as he teams up with baseball star Alex Rodriguez on a new venture capital firm."

    Lore told CNBC that "they will write bigger checks and take bigger stakes in early-stage companies … The new company, called Vision Capital People or VCP, will start with $50 million of Lore and Rodriguez’s own money … He said they will pay attention to 'mega trends in retail,' such as social commerce and conversational commerce as they pick companies."

    •  The Wall Street Journal reports that DoorDash's revenue "tripled in the first quarter, showing sustained demand for food-delivery services even as coronavirus vaccinations picked up and the nation moved toward reopening."  The company said that its Q1 revenue was $1.08 billion, up from $362 million in the same quarter a year earlier.

    "DoorDash slightly narrowed its loss to $110 million from a loss of $129 million in the same quarter last year," the Journal writes.

    Published on: May 14, 2021

    •  Bloomberg reports that Walmart is acquiring Zeekit, an Israeli technology company that "lets customers try on clothing without ever entering a store’s fitting room," allowing them to see "a digital rendering of themselves wearing an item of clothing … Shoppers can upload a picture of themselves, or choose a model that best represents their height, shape and skin tone."

    "Zeekit" is the Hebrew word for "chameleon."

    The story says that as part of the deal, Zeekit will stop working with other brands, though it is unknown when Walmart customers will be able to access the service.  

    Terms of the deal were not disclosed.

    Clearly an indication of exactly how much emphasis Walmart is putting on its apparel business going forward, and the degree to which it is investing in technologies to propel it into a new world of customer service.  

    Published on: May 14, 2021

    •  The US Department of Labor said yesterday that "the number of Americans seeking unemployment benefits fell last week to 473,000, a new pandemic low and the latest evidence that fewer employers are cutting jobs as consumers ramp up spending and more businesses reopen."  The Associated Press writes that "Thursday’s report from the Labor Department showed that applications declined 34,000 from a revised 507,000 a week earlier. The number of weekly jobless claims - a rough measure of the pace of layoffs - has fallen significantly from a peak of 900,000 in January."

    The decline is the fourth in the past five weeks.

    •  Business Insider reports that Chick-fil-A is testing the chicken wing business, opening up a virtual kitchen that is selling wings, roasted chicken, and salads, under the name Little Blue Menu.  

    Published on: May 14, 2021

    •  John Lucot, the former and longtime president-COO at Giant Eagle, has joined e-commerce solutions company Mercatus as a senior strategic advisor.

    Lucot retired from Giant Eagle in 2016 after 42 years with the company.

    Here's the thing about John Lucot - many years ago, he came to Portland, Oregon, to talk to the marketing class I was teaching at Portland State University.  He didn't have to do that.  It was a long trip.  But he did, and he gave my students access to someone they never would've met under any other circumstances, and, quite frankly, gave them a unique view of the world east of the Rockies.  That was invaluable, and I'll always appreciate it.

    Good move by Mercatus.

    Published on: May 14, 2021

    Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

    •  The National Grocers Association (NGA), the trade association representing the independent supermarket industry, has sent a letter to President Joe Biden urging his administration to advance policies that encourage unemployed Americans to seek work and provide resources to businesses in need of help.

    “Congress, governors and the administration must focus its efforts on fixing the broken unemployment insurance program to ensure the system does not discourage recipients from finding work,” NGA President and CEO Greg Ferrara wrote to President Biden. “While unemployed Americans certainly need a safety net as they try to get back on their feet, the benefits of combined unemployment and stimulus policies should not meet or exceed prior compensation, or businesses will be competing with the government for labor.”

    A recent NGA member survey  said that "100 percent of respondents reported workforce and labor access challenges, with problems becoming significantly more acute in the last two months since Biden signed the American Rescue Plan."

    Published on: May 14, 2021

    From the New York Times this morning:

    "Spencer Silver, a research chemist at 3M who inadvertently created the not-too-sticky adhesive that allows Post-it Notes to be removed from surfaces as easily as they adhere to them, died on Saturday at his home in St. Paul, Minn. He was 80."

    The Times goes on:

    "Since their introduction in 1980, Post-it Notes have become a ubiquitous office product, first in the form of little canary-yellow pads — billions of which are sold annually — and later also in different hues and sizes, some with much stickier adhesives. There are currently more than 3,000 Post-it Brand products globally.

    "Dr. Silver worked in 3M’s central research laboratory developing adhesives. In 1968, he was trying to create one that was so strong it could be used in aircraft construction.

    "He failed in that goal. But during his experimentation, he invented something entirely different: an adhesive that stuck to surfaces, but that could be easily peeled off and was reusable.

    "It was a solution to a problem that did not appear to exist, but Dr. Silver was certain it was a breakthrough … He patented the adhesive (technically called acrylate copolymer microspheres) in 1972. But two more years passed before someone at 3M paid serious attention to it: Art Fry, a chemical engineer in the tape division lab, who was looking to develop new products."  

    And the rest is history.

    Published on: May 14, 2021

    Earlier this week we took note of a Los Angeles Times report that in Southern California, the South Coast Air Quality Management District has adopted new regulations - said to be the first in the nation - designed to cut down on pollution and reduce the health risks in communities where 'massive logistics warehouses' have been built.

    With the opening of these warehouses, the Times writes, have come "increasing numbers of diesel trucks … plying routes closer to homes, schools and neighborhoods," which tend to be "disproportionately Black and Latino … already burdened with some of the dirtiest air in the nation."

    I noted that One of the passages that I found most telling in the Times story was this one:

    "A report by the Inland Empire-based People’s Collective for Environmental Justice and the University of Redlands examined e-commerce sales to find that the communities with the greatest concentrations of warehouses, such as Ontario, Fontana and San Bernardino, do the least online shopping among large cities in the Greater L.A. region."

    One MNB reader responded:

    This is just throwing legislation against a perceived problem without thinking it through. 

    First of all, this is not a victimized issue.  It affects everyone.  So take that off the table … Here could be a great example of how both public and private would work together for solutions.  Government wants solar?  Ok, provide incentives.  The same for electric fleets and charging stations.  Provide incentives, not punishments.  As far diesel engines, great progress has already begun in this area with ULSF diesel and DEF additives.  DEF is standard for all newer diesel engines since at least 2017 which changes diesel emissions to nitrogen and water.  ( you could run your truck in the garage.)  Then ULSF (ultra low sulfur fuel ) which has been mandated for many years too, which dramatically reduce emissions.  Which BTW law enforcement check as part of truck stops through a dye test.  So let’s ask both sides of the aisle, where is the need for additional legislation??? 

    Not sure I agree that there are no victims here.  The story makes clear that there are - and the regulations are designed to look out for the communities where people are being victimized.  In this case, government is acting as those communities' voice.

    Doing it without regulation would be preferable.  I'm just not persuaded that it would get done.

    On Monday we reported on a Washington Post piece suggesting that another way to look at the current jobs crisis is that "there is a great reassessment going on in the U.S. economy. It’s happening on a lot of different levels. At the most basic level, people are still hesitant to return to work until they are fully vaccinated and their children are back in school and day care full time. For example, all the job gains in April went to men. The number of women employed or looking for work fell by 64,000, a reminder that child-care issues are still in play.

    "There is also growing evidence - both anecdotal and in surveys - that a lot of people want to do something different with their lives than they did before the pandemic. The coronavirus outbreak has had a dramatic psychological effect on workers, and people are reassessing what they want to do and how they want to work, whether in an office, at home or some hybrid combination."

    One MNB reader responded:

    I do agree that we need not place blame on just one part of this puzzle, however we do need to assign responsibility to all for getting people back to work.  To have both the private and public sectors working in conjunction with a singular goal of getting people employed is the only way our economy will come back and grow.  Right now, these two opposing “towers” are not working in conjunction.  Businesses are reevaluating their needs and working to stay afloat since the forced economic shut down, government is doling out free money without requirements.  Total opposite focuses.  The best, and longest lasting approach may be to have the public “tower” assist the private “tower”, enabling them to provide training and opportunities for the long haul.  Just throwing money at people, is such a near sighted approach, that has zero potential of sustainability.  Call it the “Work for Welfare” program.

    Reacting to the poem about tortillas, one MNB reader wrote:

    I know what I'm having for dinner tonight!

    Right?  There's nothing like a warm, fresh tortilla.  Getting hungry just thinking about it … especially the tortillas they use for the fabulous breakfast burritos at the Enchanted Sun booth at the PSU Farmers Market … my stomach is rumbling just thinking about them.

    Finally … Axios reported yesterday that "new rankings from the Axios/Harris 100 poll — an annual survey to gauge the reputation of the most visible brands in the country — show that brands with clear partisan identifications are becoming more popular."

    The survey suggests that Patagonia - which has been aggressive in its promotion of environmental causes in ways that have veered into the political - is the top brand in America.  But it isn't just companies with liberal positions that have benefitted.  Companies like Chick-fil-A, Hobby Lobby and Goya either moved up on the list or appeared on it for the first time.  (Awareness doesn't always translate into trust, though:  MyPillow has high awareness, but a negative reputation, the survey showed.)

    MNB reader Howard Schneider wrote:

    I’m a little ambivalent here. I do support companies whose values reflect my own, and I know that choosing brands based in part on their values (and actions) is a growing and powerful trend – and mostly, a good thing.

    But I feel some regret at the increasing politicization of almost every aspect of American life. If I’m in the grocery store wearing my mask and my Patagonia jacket, and the unmasked customer next to me is buying Goya products, will we feel just a little bit of resentment toward each other based on our assumptions about the political statements our brand loyalties imply? Sorting people into tribes sporting signals as recognizable as street gang colors makes it harder and harder to find common ground.

    I think that masks are a different issue … there is a public health issue involved (which now is not a problem because of the CDC ruling).

    But I have to be honest.  I'm trying to think of a time when I ever looked to see what other people were buying, and passed judgement on them.  I never even think about it.

    You're right - if we get to the point that fights break out between people buying Ben & Jerry's and people buying Goya, we've probably gone down a political/cultural rabbit hole from which there may be no return.  

    I'd like to say that such a situation is unlikely.  But on the other hand, we know that there are morons who are fighting over trading cards, so anything is possible.  Maybe even probable.

    Published on: May 14, 2021

    I found myself this week watching Sullivan's Travels, the classic 1941 Preston Sturges movie that seemed like an appropriate antidote to the often grim times in which we live.  I was right to revisit the movie, which I don't think I've seen since it was shown during one of my college film courses;  while it is very much of its time, it absolutely stands up.

    Sullivan's Travels is the story of Hollywood director John L. Sullivan (Joel McCrea), who always has made slapstick comedies and musicals, but who  feels the urge to make something serious that reflects the Great Depression the country has just gone through and the World War on the horizon.  The name of his passion project:  "O Brother, Where Art Thou?."  (Yes, the Coen brothers stole the name for their film.)

    In order to better understand what he thinks of as the plight of the common man, Sullivan decided to become a hobo, an effort complicated both by circumstance and made more pleasurable by his encounter with a wannabe actress, played by veronica Lake.  The plot takes twists and turns, and does veer into both the melodramatic and what we would now think of as political incorrectness, but the ultimate message is an enduring one - the power of laughter as a cure for much of what plagues us.

    There's a new series running of HBO Max called "Hacks," which would seem a little derivative if it weren't for two terrific lead performances that are totally worth watching.

    The plot does like this:  a young comedy writer gets blackballed because she's posted a politically incorrect joke on social media.  She's desperate for work, and so her agent pairs her with another of his clients, a aging standup comic who is closer to the end of her career than the beginning and who, to be honest, could use some fresh material.  Two episodes in, all they've really done to this point is get on each other's nerves, but you can tell that there is going to be redemption and renewal emerging from the culture and generational clashes.

    What makes it special - other than the writing, which is slam-bag - are the actresses who breathe life and vigor (and a little bit of vinegar) into their roles.  Jean Smart, who can apparently do anything (judging from how different she is these days in HBO's "Mare of Easttown"), plays the older woman without vanity and with simmering rage at an industry that seems to be all about tomorrow, with no memory of yesterday.  Hannah Einbinder, a standup comic I've never heard of, plays the younger comedy writer and is absolutely fearless as she struggles to figure out her next career move and this new employer who may be her last shot.

    There is an exchange, at the end of episode two, that seems like it is the stuff of a business class in 2021.  Smart's character, fed up with her employee's whining, says:

    Good is the minimum.  Good is the baseline.  You have to be so much more than good.  And even if you're great, and lucky, you still have to work really bleeping hard.  And even that is not enough.  You have to scratch and claw and it never bleeping ends.  And it doesn't get better.  it just gets harder.

    "Hacks."  You have to have HBO Max to watch it, but it is totally worth it.

    Amazon has announced when the seventh and final season of "Bosch," based on the Michael Connelly novels, will drop.  June 25.  Can't wait, though I'll be sad to see it go (but happy a spinoff will move to Amazon's IMDB channel).

    Here's a preview:

    My wine of the week is the 2017 Mary Taylor Pascal Biotteau Anjou Blanc 2017, a delicious Chenin Blanc which is subtle and honeyed and perfect when served ice cold on a warm day.

    That's it for this week.

    I hope you have a great weekend, and I'll see you Monday.

    Stay safe.  Be healthy.