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    Published on: May 27, 2021

    We are about to begin Memorial Day weekend, and I'm going to start it a day early … I'm  taking Friday off because my oldest son, who lives in Chicago, is coming home this afternoon … and because of the pandemic, we haven't see him since December 26, 2019.  Frankly, I just don't want to be distracted while he's here.

    MNB will be back on Tuesday, June 1, with fresh and hand-crafted news and commentary.

    I hope you have a great weekend … Stay safe … Be healthy.

    Sláinte!

    Published on: May 27, 2021

    Yesterday, KC bemoaned the fact that in Italy there's a vending machine that makes pizza and in Spain, a robot that makes paella.  In his wisenheimer way, he suggested that this strikes him as taking technology too far.  But in The New Yorker, there is a piece that softened his attitude - a program that has provided more than 20,000 animatronic pets to elderly people dealing with loneliness.

    You can read the entire New Yorker piece here.

    Published on: May 27, 2021

    by Kevin Coupe

    Over the years, I've often described Michigan's four-store independent retailer Westborn Market as the best food retailer in the US that nobody has ever heard of.  That's an assessment that I'll stand by - the company, founded by the Anusbigian family more than a half-century ago, continues to do an extraordinary job with its relentless focus on quality food and service.

    The thing about service is, it requires great people.  They can be hard to come by these days, as everybody deals with staffing issues.

    One way to become an employer of choice is to work to make the employee feel like he or she is part of something bigger than just a job.  That's exactly the approach that Westborn is taking these days in its recruitment and hiring - which can be seen in this video that new employees watch during the training process.

    I think the message is an Eye-Opener.  Enjoy.

    If you're interested, here is a piece that I did about Westborn back in 2017, and a video I shot at the time.

    Published on: May 27, 2021

    A coalition of trade associations has sent a letter to several US agencies asking them "to issue statements 'emphasizing that state and local rules should not place the burden of verifying vaccination on employees'."

    The letter comes as a direct response to a new Oregon policy requiring store employees "to verify the vaccination status of customers."  It urged the federal agencies "to recognize the peril that these types of policies will create for employees and make public statements emphasizing that state and local rules should not place the burden of verifying vaccination on employees."

    "As with mask mandates, requiring employees to confront customers in this way is calculated to lead to anger and violence," the letter says.  "Many people feel strongly about their decisions regarding whether or not to get vaccinated. It simply is not the job of employees trying to serve Americans to challenge those beliefs - and that is undoubtedly how many individuals will take questions about vaccination status."

    The letter was signed by the National Association of Convenience Stores (NACS), FMI- The Food Industry Association, the National Grocers Association (NGA), the National Retail Federation (NRF), the International Franchise Association, the Asian American Hotel Owners Association, the American Hotel & Lodging Association, and the Energy Marketers of America.  It was sent to the U.S. Department of Health and Human Services (HHS), the U.S. Occupational Safety and Health Administration (OSHA) and the Centers for Disease Control and Prevention (CDC).

    KC's View:

    This is a hard one, in some ways.  Retailers need to be concerned about their health of their employees and customers, and if unvaccinated people are putting them at risk by not complying with CDC guidance, that's a problem.

    But it also is not fair to turn store employees into enforcement agents, which the Oregon rule effectively does.  

    I think stores need to be clear about their expectations, and hope people behave responsibly, and with a sense of the public good.

    Published on: May 27, 2021

    Reuters reports that Amazon "is considering the launch of brick-and-mortar pharmacies in the United States … The talks are mostly exploratory and any meaningful rollout of stores can take more than a year," the story says.

    Amazon has not commented on the story, though a spokesperson did say that the Amazon Pharmacy division "is focused on making at-home delivery pharmacy easier and more convenient for customers."

    Reuters notes that "the e-commerce giant launched an online pharmacy in November for delivering prescription medications in the United States and stirring up competition with drug retailers such as Walgreens Boots Alliance, CVS Health and Walmart.

    "The move was built on its 2018 acquisition of PillPack, which Amazon said would remain separate and cater to customers who need pre-sorted doses of multiple drugs.  The company, founded as an online bookseller, has disrupted multiple industries including retail and technology, and its potential move into the physical pharmacy space will pit it directly against established players."

    Axios provides some perspective:

    "Amazon still isn't disrupting the prescription drug industry. Amazon is maybe, possibly considering a way to capture a marginally bigger piece of the extremely small slice it has … Amazon owns approximately 500 Whole Foods stores.  If Amazon built and staffed up pharmacies in each of those stores, along with some standalone pharmacies, its footprint would pale in comparison to the pharmacies owned by CVS Health (9,900), Walgreens (9,000), Walmart (5,000), Rite-Aid (2,500), Kroger (2,300) and other chains.

    "As we reported in 2018, after its purchase of online drug retailer PillPack, Amazon 'will have to build or acquire more parts to make a big difference.'  More pharmacies, or a pharmacy benefit manager, would likely need to be next — if Amazon even proceeds with this direction."

    KC's View:

    Disrupting the drug store business would seem to be right in Amazon's philosophical wheelhouse, but I have no idea whether it makes sense to create yet another bricks-and-mortar format at this point.  I wouldn't think so, but I could also be suffering from a lack of imagination.

    Published on: May 27, 2021

    CNBC reports that "Walmart has inked a multiyear deal with Gap to create a home goods brand, as the discounter looks to drive more online sales and the apparel retailer hopes to strengthen its brand among shoppers.

    "The brand, Gap Home, will launch on Walmart’s website on June 24, and eventually bring the most popular items to some of the big-box retailer’s stores. It will start with about 400 pieces of bedding, bath and decorative accessories. The initial collection will range in price from $15.88 for a denim-styled pillow to $64.98 for a king comforter set.

    "Financial terms and the duration of the deal were not disclosed. Yet both companies said the brand is the start of a long-term partnership. Anthony Soohoo, Walmart’s executive vice president for home, said customers should expect to see many denim- and chambray-inspired collections over the years."

    KC's View:

    A few years ago Walmart went on a tear acquiring smaller niche retailers, most of which it has divested at this point.  Making deals like this with Gap would seem to be a lot more sensible … less risky, and perhaps with more upside.

    Published on: May 27, 2021

    That's the question posed by Fast Company, with the following answer:

    "The business model is feasible now, says venture capitalist Hans Tung, a managing partner at GGV Capital, one of the investors in the new round and an early investor in the startup. Lighting is one of the biggest expenses for indoor farming, but the cost of ultra-efficient LED lights has fallen steeply over the past decade. Automation has advanced enough that it’s cost-effective to do much of the work inside an indoor farm with robots. Software to manage complicated growing systems has also advanced."

    The story notes that "growing food in a warehouse has some advantages over traditional agriculture. With crops in stacked trays or planted on vertical walls, many more plants can fit in the same footprint. LED lights tuned to shades of pink or purple help plants grow faster and can be tweaked to change the nutrition or taste. Because the plants are in a controlled environment, no pesticides are needed, and with no limitations from the seasons or weather, crops can grow year-round. Instead of growing greens in drought-prone states like California and Arizona and then shipping them to the East Coast, it’s possible to use a hydroponic system with 95% less water and deliver produce the same day it’s picked."

    You can read the entire story here.

    KC's View:

    One start-up in the vertical farming space refers to the segment as "post organic," which is interesting in that it suggests that to some degree, if the method gains real traction, it could marginalize what we think of as traditional organic farming.  That could have an impact on a business segment that has been growing steadily, and I have to wonder if definitions need to be changed.  

    I don't know much about farming, though I did have this experience a couple of years ago in Bend, Oregon, with vertical aquaculture company Volcano Veggies.

    Published on: May 27, 2021

    CNBC has a story about "the growing number of Black-owned brands that national retailers have begun to sell over the past year in a push to better reflect diverse customers and a commitment to advancing racial equity after the murder of George Floyd.

    "Companies have made pledges and earmarked donations over the past year. Yet the expanding assortment of Black-owned goods on national retailers’ shelves and websites has become one of the most visible signs of change in the corporate world."

    After Floyd's murder, a Black entrepreneur named Aurora James challenged companies via social media to adjust their product lines to represent demographic reality - if the nation's Black population is 15 percent of the total, shouldn't retailers also make sure that 15 percent of the products on their shelves represent the Black community?  She founded the nonprofit 15 Percent Pledge with the intention of driving this kind of change.

    "A year later, 25 companies — including prominent retailers like Macy’s, Sephora and Gap — have pledged to do that," CNBC writes.  "James said she has seen progress made by the companies firsthand. A company that joins the pledge signs a contract with the nonprofit, which audits it each quarter. She said the nonprofit looks at its purchase orders and tracks representation of products on shelves. The group also shares resources, such as a database of Black-owned businesses and suggests strategies that companies can use to grow a diverse base of suppliers.

    "Beyond growing the number of products, retailers are becoming stronger and more supportive business partners, James said. For instance, she added, companies are not only reaching out to Black entrepreneurs who have historically been left out, but are guiding them through common challenges experienced by early-stage businesses. Examples she cited include assisting with package or logo design or paying deposits to businesses when orders are placed to provide upfront capital."

    Published on: May 27, 2021

    Amazon founder Jeff Bezos announced yesterday at the company's annual meeting that he will step down as the company's CEO on July 5, which the Seattle Times writes is "27 years to the day after founding Amazon" in his garage.  The company he hands off to his successor, though, is a far more complex one - beset by far more challenges - than the online bookseller he originally created.

    The Times writes that "Bezos had announced this spring that Amazon Web Services chief Andy Jassy would replace him as CEO, but the precise date of the transition was unknown until Wednesday’s meeting. Bezos will remain chair of Amazon’s board of directors, a position in which he is expected to continue to exert considerable influence on the company."

    “I guarantee that Andy will never let the universe make us typical,” Bezos said.  "He has the energy needed to keep alive in us what has made us special.”

    The Times notes, however, that Jassy's portfolio of issues will not be easy.

    "The many challenges besetting Amazon were a focus of Wednesday’s meeting, which featured testimony from two leaders of a rare union campaign at an Amazon warehouse in Bessemer, Alabama," the story says.

    "Though the campaign ended in defeat, union organizers Jennifer Bates and Darryl Richardson seized the meeting as an opportunity to take their concerns about worker safety and Amazon’s hiring practices directly to shareholders, speaking in favor of proposals urging Amazon to elect a warehouse worker to its board of directors and assess the company’s impact on racial equity.

    "Neither of those proposals, or nine others put forward by outsiders, received a majority of votes cast, despite unprecedented support from institutional shareholder-advisory firms amid a rising tide of shareholder activism. Amazon had recommended votes against all 11 shareholder proposals.

    "Activist investors say they’re less concerned about 'passing' a resolution than they are with generating publicity, putting Amazon on the record about the issues at hand and showing the company that a sizable percentage of its shareholders - even if not a majority - support changes to Amazon’s business practices."

    Amazon continues to take on regulatory fire about how it treats its warehouse workers, even as it says it is taking steps  to improve workplace conditions and make its many warehouses safer.

    And, Amazon inevitably will face more antitrust scrutiny, which probably will only be heightened by the announcement yesterday that it will acquire MGM - the legacy move studio with rights to the James Bond and Rocky franchises, among others - as a way of building greater value into its Prime membership.

    Published on: May 27, 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…

    •  Here are the current US Covid-19 coronavirus numbers:  33,971,207 total cases … 606,179 deaths … and 27,662,268 reported recoveries.

    The global numbers:  169,156,978 total cases … 3,514,148  fatalities … and 150,810,824 reported recoveries.  (Source.)

    https://www.worldometers.info/coronavirus/

    •  The Centers for Disease Control and Prevention (CDC) says that 61.8 percent of the US population aged 18 and older has received at least one dose of vaccine,  with 50.3 percent being fully vaccinated.

    Published on: May 27, 2021

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Amazon said yesterday that its Q4 advertising revenue grew 64 percent to $7.95 billion, compared to the same period a year ago, a figure that it said was higher than that generated by its subscription services, including Amazon Prime.

    The thing is, traffic and revenue beget even more traffic and revenue.


    •  In the UK, the Wiltshire Times writes that "Tesco is trialling a new service for customers ahead of a potential rollout to more areas across the UK.

    "The supermarket chain is launching a new rapid delivery service which will mean it can deliver groceries to customers within an hour.

    "The retail giant is initially trialling the Whoosh delivery service at one store and will then assess potential opportunities to expand the model.  It said the one-hour service will be available for customers in selected postcodes around its Wolverhampton Willenhall Express store."


    •  The Wall Street Journal reports that Google has signed a deal with national hospital chain HCA Healthcare Inc. "to develop healthcare algorithms using patient records, the latest foray by a tech giant into the $3 trillion healthcare sector."

    According to the story, "Nashville, Tenn.,-based HCA, which operates across about 2,000 locations in 21 states, would consolidate and store with Google data from digital health records and internet-connected medical devices under the multiyear agreement. Google and HCA engineers will work to develop algorithms to help improve operating efficiency, monitor patients and guide doctors’ decisions, according to the companies … The deal expands Google’s reach in healthcare, where the recent shift to digital records has created an explosion of data and a new market for technology giants and startups. Data crunching offers the opportunity to develop new treatments and improve patient safety, but algorithm-development deals between hospitals and tech companies have also raised privacy alarms."

    Published on: May 27, 2021

    •  The Wall Street Journal reports this morning that "worker filings for jobless benefits fell again to a fresh pandemic low, extending a steady downward trend and adding to signs of a healing labor market as the economy opens more fully.

    "Initial unemployment claims for regular state programs, a proxy for layoffs, fell last week to 406,000 from 444,000 the prior week, the Labor Department said Thursday. That level represents the lowest levels of claims since the coronavirus pandemic’s onset last year and the fourth consecutive week claims have reached a new pandemic low. Economists surveyed by The Wall Street Journal had forecast there were 425,000 new claims last week.

    "Separately, the Commerce Department reported that orders for durable goods—items designed to last at least three years—fell 1.3% in April, and U.S. gross domestic product in the first quarter grew at a 6.4% seasonally-adjusted annual rate, the same as initially estimated.

    "Taken together, the data point to a labor market that is gaining strength as Covid-19 cases steadily decrease, more Americans receive vaccines against the virus and governments ease restrictions on businesses, although the broader economic recovery remains uneven."


    •  Kroger announced that its Cincinnati-Dayton division and United Food and Commercial Workers Union Local 75 members in Cincinnati, Dayton, Northern Kentucky, and Southeastern Indiana have ratified a new labor agreement today … The Cincinnati-Dayton division is investing $159 million in wages across the five-year agreement … By the end of this contract cycle, the average hourly wage for an associate in the Cincinnati-Dayton division will be nearly $20 per hour not including comprehensive benefits like healthcare and pension."

    Published on: May 27, 2021

    •  The National Association of Convenience Stores (NACS) announced that Doug Kantor, most recently a partner at at Steptoe & Johnson LLP, where he worked with the NACS government relations team, has joined the trade association as general counsel.

    Published on: May 27, 2021

    Yesterday we reported about the antitrust suit filed against Amazon "alleging that the e-commerce giant wields monopoly power that has resulted in higher prices for consumers."

    I commented:

    I have to admit I am a little skeptical about this suit, largely because Amazon is transparent on its own site when products are being offered by marketplace vendors for a lower price than even Amazon sells them.  It would just seem to run counter to Amazon's commitment to eliminating friction and doing things that are consumer-centric.

    But, who knows?  Maybe there are incriminating documents that will prove the case.  Maybe Amazon has been fooling us all these years.

    But I'm dubious, and think it may be hard to prove that Amazon is bad for consumers.

    One MNB reader responded:

    After reading your views on this story I have to say, as a top seller on Amazon in the US, it’s a company far from being transparent.  The seller forum board is on fire today with so many happy sellers excited about this.  Amazon quietly removed from their TOS recently that we (we sellers) can now, or are able to, sell the same item elsewhere for a lower price.  That includes being terminated as a seller if you sell for less elsewhere like eBay and Walmart.  PRICE FIXING at its finest.

    You said, “… hard to prove that Amazon is bad for consumers”, I have to ask, are they hosting your site and did they make you say this?  I cannot be the only seller who wonders this exact thing…

    I have no business connection to Amazon, and they've never told me to say anything.  And if they did, I'd report it here.


    On another subject, MNB reader Dan Jones wrote:

    Thinking about your quote, “Essentially [Kroger] is looking to prove that in some cases and some places, stores may not be necessary.” 

    Perhaps Kroger is not in the Food Business, which features aromas, creativity, authenticity and expertise.  Maybe they are just in the Food Distribution Business – and that is entirely different.

    Excellent point.


    Lots of email yesterday about our pandemic coverage.

    One MNB reader wrote:

    The following contradictory information was in your COVID update section.

    •  The Centers for Disease Control and Prevention (CDC) says that 61.6 percent of the US population has received at least one dose of vaccine, and 50 percent has been fully vaccinated.

    •  There's an excellent piece in The New Yorker entitled "The Beginning of the End of the American Pandemic," that looks at what the future may hold for the country as the pandemic recedes.  An excerpt:

    "The shift toward reopening is not without risk. The first issue is timing. Less than half of Americans have received even one shot of a covid-19 vaccine, and only around four in ten have been fully vaccinated. This means that the majority of the country remains susceptible to infection and disease. 

    Which is true? IMHO, it’s really a glass half full or half empty at this point.


    The eastern part of the country suffered greatly with the virus early and that set a tone that lives on. Some want to focus on scariants and some want to focus on how amazingly effective the vaccine is. As more time goes on, we find the vaccine effectiveness gets longer. Also, the scariants keep being blocked for the most part. I follow epidemiologists on Twitter now (like Monica Gandhi from San Francisco), no more NYT, NPR, Wash Post with their “may happen,” boogey-virus garbage.

    First of all, remarkably enough, I found Dr. Gandhi quoted quite often in the Times, Post, and on NPR … as they do what they're supposed to do, which is get a lot of different views and opinions on this kind of stuff.

    As for the difference in the numbers … that has more to do with a difference in deadlines than anything else, I'd guess.  My numbers were sourced yesterday morning, and I'm not sure when that issue of The New Yorker went to bed.

    I think that it is entirely fair to say that the vaccines, from all reports, seem to be as effective, maybe even more effective, as could be expected.  That doesn't mean that we shouldn't be conscious of the variants (I think we should), of the possibility that there could be a resurgence, and the greater the vaccine hesitancy the higher the possibility that we could get more outbreaks.

    Of course, we might not.  But vigilance is all.

    From another reader:

    Shaw's is no longer requiring masks for those that are vaccinated. No proof is required from vendors or customers(how could it be?). However associates that are not vaccinated must still wear masks, and they know who they are because of the $100 bonus we received for getting the vaccine.

    Seems that it's going to be an HR/HIPPA issue, as some associates are threatening to quit, unfortunately.

    Also got an email about a note we posted yesterday from an MNB reader:

    It is interesting that Rich Heiland would go out of his way to update us on the US mask policy or lack there of. Once again - who cares? And the reader who watched the PGA and the first thing that came to mind is "no one is wearing a mask". Wow - what a crappy life if that is what comes to mind.

    In the post truth era - We have everyone looking over everyone's shoulder so that they can define the truth, so that they can judge others while clearly stating that they are superior by either getting the vaccine or wearing a mask when they dont have to.

    Stay in your lane folks. The first amendment is beautiful and we should not let go of it, at any cost, because it provides insight into the Gladys Kravitz' of the world... Which there seems to be a lot of today.

    Clearly you are letting your readers do the heavy lifting on the mask syndrome. 

    I think you are making a lot of assumptions there … Rich Heiland never made mention of "truth" - he simply reported what he was seeing.  (By the way … Rich Heiland may be the only MNB reader who has won the Pulitzer Prize, so I'm inclined to believe his reporting.  Just sayin…)

    As for the person who noted the lack of masks at the PGA … well, I noticed the same thing, and I don't think I have a particularly crappy life.  I just have eyes, and spend an awful lot of time trying to understand this stuff and then write about it.

    The science, as I understand it, says that vaccinated people are overwhelmingly likely not to get Covid, but they can, and if they do, are likely to have mild symptoms or be asymptomatic.  But, if they do get it, they can pass it on.

    In addition to all the people who don't believe that Covid exists, don't believe the death toll, or don't believe that the vaccine or masks are necessary, there also are people who are immunocompromised, may be too young to get the vaccine, or just haven't been able to get it yet.  Non-vaccinated people run the risk not just of getting Covid, but also of giving the disease to these other people.

    This isn't a judgement, the way I understand what most scientists are saying. It is just a recitation of the facts as they are understood by experts right now.

    I will say this, though.  You may be the first person who has accused me of letting readers do the "heavy lifting" on the mask issue.  I got a lot more email suggesting that I was talking about it way too much … and everybody is entitled to their opinion.  But I'm sort of proud of the fact that I was calling for stores to establish and enforce mask mandates as early as April 7, 2020.


    Responding to yesterday's piece about robots that make paella and drones that deliver Girl Scout cookies, one MNB reader wrote:

    I am an old Irish Catholic guy who grew up on meat and potatoes every night.  I had to look up what was a paella... pretty sheltered life.

    Robot chef and drone delivery might allow me to try my first paella.

    Yesterday I wrote:

    One note in the story that sort of surprised me was that alarm clock sales doubled during April.  Not that people need to be more conscious about when they wake up these days, but rather that people actually use alarm clocks.  I haven't used once since I got my first smart phone, and I sort of assumed that everybody else was the same way.

    One MNB reader wrote:

    These alarm clocks are not for old guys like us that figured out a long time ago how to use the alarm clock feature on our phones. These are for the kids that are finally going back to "in person" school for the first time in over a year. Many in this age group still do not have their own phone (which is a great thing from my perspective) so they need something to get them up and going in the morning (which is something a lot of them haven't had to do for a long time). My youngest daughter isn't much of a morning person so I was a part of this group in April looking to buy a basic alarm clock. I was shocked how tough it was to find a one. There were plenty of alarm clocks that came with a million different options but very few choices for a basic alarm clock. This is a good business lesson for companies that sometimes focusing on (and not forgetting about) the basic needs of your customers can help ensure you are able to meet their needs.

    Just in case you are curious, my daughter's alarm clock is now set for 6:30, 6:35 and 6:40 each morning for school... :).

    How old are these kids do not have their own phones?  And are they Amish?

    MNB reader Steven Ritchey wrote:

    One of the first things a smart manager learns in the supermarket business is to not make assumptions.  To assume others don't use a product because you don't is dangerous.  I've seen too many managers lose out on a new product because they erroneously thought if they wouldn't buy it, neither would anyone else.

    Oh, and by the way, I still use an alarm clock at home.

    I'm not a retailer, so I didn't get that lesson.  But I am a pundit, and the same lesson applies … which is why I made a point of it.

    The Wall Street Journal story that prompted this exchange said the following:

    "As vaccination rates climb and restrictions on human interaction ease, shopping carts are filling up with items designed to facilitate people’s re-entry into civilization instead of toilet paper and baking flour … Deodorant, teeth whitener and condoms are in high demand. Sales of perfume, nail polish, swimsuits, sunscreen, tuxedos, luggage and alarm clocks are climbing fast, according to companies that make these products and large retailers."

    Prompting one MNB reader to write:

    You will receive commentary I’m certain but one cannot allow the increased sales of condoms to be a Trojan horse for male consumers with high expectations and clearly for retailers, this is where the rubber meets the road. 

    Boom!


    And finally, thanks again to all of you have enjoyed the Bob Dylan song videos, as we observe his 80th birthday.

    Today, we have one last video … a read oddity … Dylan doing a duet with Joan Baez, covering Jimmy Buffett's "A Pirate Looks At 40."  It's weird, but I love it.