business news in context, analysis with attitude

Published on: April 8, 2020

Tom Furphy and Kevin Coupe focus on the learnings that retailers should have garnered from the crisis created  by the pandemic, and on investment priorities that retailers should set for themselves going forward ... a challenge, since there has been a kind of shift in the e-commerce space-time continuum.

Published on: April 8, 2020

"After The Pandemic."  Could the current situation give way to a time of civil unrest that could have a real impact on retailers?  It is possible ... or at least, that's what some business leaders are telling MNB 'Content Guy' Kevin Coupe.

Published on: April 8, 2020

The Los Angeles Times reports that "Los Angeles Mayor Eric Garcetti announced an order Tuesday evening requiring all residents to wear a face covering when visiting essential businesses in hopes that it will protect workers and slow the spread of the coronavirus.

"Effective Friday at midnight, residents must wear a mask, bandanna or other type of covering over their noses and mouths when in grocery stores, restaurants, hotels, taxis, ride-hail vehicles and any other essential businesses."

The order reads:  “All essential, non-medical workers required to wear these face coverings must frequently (at least once a day) wash any reusable face coverings, for the health and safety of themselves and others.  Single-use face coverings must be properly discarded into trash receptacles."

There are other communities in California that have discussed similar measures, but to this point, California Governor Gavin Newsom has not goner that far.

“We put out guidelines that if individuals want to have face coverings, that is a good thing and a preferable thing, in addition to the physical distancing and the stay-at-home order,” Newsom tells the Times. “We have been very clear that if you are going into an environment where physical distancing is all but impossible, for example, into a grocery store with small aisles and a long queue, that we do believe it would be additive and beneficial to have a face covering.”

Politico adds:  "Garcetti said he’d been in discussion with Los Angeles County Public Health Director Barbara Ferrer about the order in recent days, but waited to issue the directive until he was confident the city had the supply of face coverings to meet the demand.

Published on: April 8, 2020

Reuters reports that Amazon will postpone the June rollout of the delivery service that it intended would compete with both FedEx and UPS.

The reason:  Amazon needs the people and infrastructure to devote to the significant increase in its business caused by the Covid-19 coronavirus pandemic.

"We regularly look at a variety of factors across Amazon to make sure we're set up in the right way to best serve our customers," the company tells Reuters.

Published on: April 8, 2020

The Washington Post reports that Sen. Edward Markey (D-Massachusetts), convinced that the food industry needs guidelines that will bring precision and uniformity to how it protects customers and employees during the pandemic, is calling on the US Food and Drug Administration (FDA)(n and Centers for Disease Control and Prevention (CDC) “issue and promote clear guidance for workers in the retail food industry and their customers.”

The story notes that there is a disconnect between what employees say they want and what various retailers are providing.  Many workers, even as they are getting bonuses and temporary raises to compensate for working under difficult, even treacherous conditions, say they need safer conditions;  retailers, meanwhile, have "adopted new procedures (checking employees’ temperatures, maintaining six feet of space in checkout lines) and/or modified their physical properties by installing plexiglass barriers between consumer and worker."

But the lack of consistency strikes Markey as problematic.  "I think that at a minimum, [agencies] should provide better guidance on the types of PPE to use and when,” Markey tells the Post.  "I think they should leave it less up to employers so that workers are better protected, and I think they should actually take steps to make sure companies are complying with the guidance. But at a minimum, there should be some kind of PPE that is provided to protect the workers."

Published on: April 8, 2020

Random and illustrative stories about the global pandemic, with brief, occasional, italicized and sometimes gratuitous commentary…

•  In the US, there are 400,549 Covid-19 coronavirus cases as of this morning, with 12,857 deaths and 21,711 reported recoveries.

Globally, there are 1,447,513 reported, coronavirus cases, 83,109 deaths and 308,712 recoveries.

•  From the  Dallas Morning News:

"Albertsons and the nation’s largest food employees union are working together to try to get grocery workers classified as first responders during the coronavirus pandemic.

"The United Food and Commercial Workers International Union and the grocery chain, one of the nation’s largest, said Tuesday that the designation would assure that supermarket workers get access to testing and personal protective equipment.

"Albertsons Cos. chief executive Vivek Sankaran and UFCW president Marc Perrone released a joint statement saying grocery employees have been 'working tirelessly to make sure that America’s families have the food and groceries they need'."

•  From CNBC:

"The family of a Walmart employee in Illinois who died from complications of COVID-19 filed a wrongful death lawsuit Monday, alleging the retailer knew about the man’s symptoms and disregarded them.

"Wando Evans, 51, died March 25. He was a 15-year employee of Walmart who worked as an overnight stock and maintenance associate in Evergreen Park, about 16 miles southwest of Chicago, according to the lawsuit.

"Evans told store managers about his symptoms, but was ignored, the lawsuit, which was filed in Cook County said. The store sent him home from work on March 23 and he was found dead in his home two days later, the lawsuit said."

In a statement, Walmart said that it is “heartbroken at the passing of two associates at our Evergreen Park store and we are mourning along with their families" … The retailer said it deep-cleaned the store, even though the two employees had not been there in more than a week. It said it also hired a company to clean the store and had a third-party and a health department inspect it."

•  From the Wall Street Journal:

"First, the store doors shut. Now, the walls are closing in.

"Retailers have furloughed hundreds of thousands of workers, cut executive pay and stopped paying rent, all to conserve cash. For the most indebted retailers, particularly those already struggling before the crisis began, those measures may not be enough.

"Neiman Marcus Group Inc. and J.C. Penney Co., both of which have looming debt payments, have been reaching out to creditors in the hopes of buying more time, according to people familiar with the situation. Representatives for Neiman Marcus and Penney declined to comment."

The story goes on:  "The retail industry was going through a shakeout before the coronavirus pandemic hit. As shoppers migrated away from malls and bought more online, specialty-apparel retailers and department stores were among the hardest hit. A record number of chains have filed for bankruptcy protection in recent years, and others have closed hundreds of stores. As the virus keeps American businesses temporarily closed, the weak will only get weaker, analysts said."

The Journal notes that "companies with debt payments coming due this year are the most vulnerable. They include Neiman Marcus, with $120 million due next week; J.Crew Group Inc., which has a $4 million payment due at the end of the month; and, J.C. Penney, with $147 million due in June, according to Fitch and company filings."

Here's a question that may not make me popular in some circles.  If a company was weak and/or failing before the pandemic, should we be using public money to bolster their abilities to survive when they might not have been able to otherwise?

Just asking.

•  WCVB-TV in Boston reports that the state of Massachusetts is imposing guidelines on supermarkets, requiring them "to limit the number of people they allow inside.

Many stores have already made similar changes, but the state now says all supermarkets should only be 40 percent full at any given time.  Local boards of health will oversee the new requirement."

I suspect that many if not most retailers are doing this already, but maybe it will be able to convince recalcitrant customers if there are regulations, not recommendations, in place.

•  Add Shipt workers to the list of those who are dissatisfied with how the company is treating them during the pandemic, as yesterday some - it was difficult to ascertain how many - walked off the job to draw attention to their situation.

As the walkout took place, Target-owned Shipt announced that  "it was handing out $100 bonuses to shoppers who completed between 50 and 100 orders last month and $200 bonuses to shoppers who handled more than 100 orders."  However, as the Minneapolis Star Tribune writes, "the bonuses added up to less than the $5 per order in hazard pay asked for by a loosely organized group of Shipt workers. The group — which is calling for workers to not take additional deliveries until their demands are met — also wants more immediate access to face masks and other protective gear, among other requests."

•  Fast feeder Subway has turned more than 100 of its Southern California units into de facto grocery stores, selling not just sandwiches but sandwich makings - bread, meat, cheese and condiments - to customers having trouble finding such items in supermarkets.  Curbside pickup and delivery both are available.

The company has not decided whether to roll the program out beyond Southern California.

Yet another example of how restaurants are rethinking their traditional boundaries.  They've been forced to by circumstances, but may find that these new business segments will serve them well - by serving their customers well - once the pandemic has receded.

•  Variety reports that Walt Disney Co. executive chairman Bob Iger has floated the notion that when the company's various theme parks eventually reopen, it is possible that staffers will take guests' temperatures before allowing them to enter - one way, Disney execs hope, to address concerns about a further spread of the Covid-19 coronavirus.

"One of the things that we’re discussing already is that in order to return to some semblance of normal, people will have to feel comfortable that they’re safe,” Iger says.  “Some of that could come in the form ultimately of a vaccine, but in the absence of that it could come from basically, more scrutiny, more restrictions. Just as we now do bag checks for everybody that goes into our parks, it could be that at some point we add a component of that that takes people’s temperatures, as a for-instance … “Let’s prepare for a world where our customers demand that we scrutinize everybody.  Even if it creates a little bit of hardship, like it takes a little bit longer for people to get in.”

•  From Fast Company, an article about how consumers should think about ordering grocery for delivery:

"If you don’t feel safe going to a supermarket to shop and wait in long lines with other shoppers who may be sick, it’s reasonable to question whether it’s ethical to ask a low-wage worker to do the same thing on your behalf. The answer isn’t simple; if a gig worker relies on orders to make a living, not ordering could affect their ability to pay their bills. But the sheer volume of deliveries now makes that unlikely … If you don’t face particular risk from shopping yourself, you may want to rethink using delivery.

"In many places, delivery services have been so overwhelmed with orders that some of the people who need it most, including disabled people who relied on grocery delivery prior to the coronavirus crisis and those who are most at risk if they get COVID-19, say that they are struggling to find available delivery slots. Going to the store yourself is not a full pass from ethical questions, however, as grocery store workers are starting to get sick and die, as well. Ideally, you can shop at stores that provide their workers with proper protection, and try to shop as little as possible."

It is hard enough to find a delivery window to place an order … now people have to worry about the ethical implications of online ordering?

Well, if course they do … just as people should consider the ethical implications of everything they do, all the time.  As Albert Einstein once said, ""Relativity applies to physics, not ethics."

There is an excellent piece in the New York Times today about how "the continuing risk to the restaurant industry’s millions of workers — many of whom are already underpaid and undervalued, uninsured and unemployed — is high, and only getting higher."

But while "takeout seems, on some days, like an entirely superfluous luxury that’s putting restaurant workers, whose choices are more limited than mine, at risk," there are other days that it seems like "even if takeout isn’t quite enough to keep restaurants afloat, it’s crucial — the only way to sustain the precarious businesses fighting to stay open through the pandemic."

The writer goes on:  "The word 'restaurant' comes from the Latin 'restaurare,' to renew, and even without dining rooms, without regular menus and service, without consistent customers, even in the midst of a global pandemic, mass unemployment and deep uncertainty, restaurants are tapping into their extraordinary power to make people feel safe, nourished and restored."

But it is critical never to ignore or underestimate the importance of the people on whose backs this restoration will be built.

•  The BBC reports that Tesco is telling customers that if they want to shop for food, it makes more sense to come to the store than have it delivered.

The reason:  ""Between 85% and 90% of all food bought will require a visit to a store and here significant changes to the store environment have been implemented to maximise safety for colleagues and customers," CEO Dave Lewis says.

Plus, the BBC notes, the demand for delivery has been so high that Tesco has not been able to meet it.

•  The Associated Press  reports that REI is saying that it will "keep its 162 retail locations closed and furlough some of its roughly 14,000 employees without pay for 90 days as the COVID-19 pandemic continues to halt much of the retail industry."

CEO Eric Artz says that he and the board of directors will not take any compensation for six months, and that "senior executives will take a 20% pay cut and forgo any 2020 bonuses while other corporate staff will see their pay cut 25%. Furloughed employees will continue to receive health benefits during the 90-day period."

•  The New York Times reports that the pandemic has claimed another victim - the healthy eating habits practiced by many Americans, who find themselves now irresistibly drawn to processed foods - canned soup, mac and cheese, potato chips, ice cream - that give them at least temporary, sometimes illusory, succor.

"As the coronavirus shutdowns continue across the United States, two growing trends involving how people eat — the rising amount of money spent on meals outside the home and the increased purchase of fresh or organic foods in grocery stores — have been reversed," the Times writes.  "Many restaurants have closed, and shoppers are reaching for frozen pizza and boxes of cereal instead of organic greens and whole grains.

"That’s good news for big food companies like Kraft Heinz and J.M. Smucker, which have struggled in recent years to adapt as Americans shied away in great numbers from highly processed foods. Now, in a moment of crisis, shoppers are turning to old standbys that they may not have had in years or even decades."

It's true.  "Essential" takes on a whole new meaning in this environment.  Grilled cheese sandwiches never have tasted so good.  Graeter's ice cream is a kind of nirvana.  And Tito's - though not mentioned in the Times story - has become a staff of life.

Published on: April 8, 2020

Content Guy's Note:  The Covid-19 coronavirus pandemic is having an enormous impact on people of all ages, backgrounds, and places around the globe;  some are having shared experiences, and some are individual to specific people and circumstances.

Among the people I've been thinking about are the young people who have just started or are about to start their careers, and who now may be facing enormous uncertainty and questions about what comes next.

I decided to reach out to some young people I know - some of them former students of mine at Portland State University in Oregon, as well as at other schools with which I have developed relationships - to ask them to answer a pair of questions:

•  How has the pandemic has affected you personally or professionally?

•  How do you think the world - including but not just the business world - should be different whenever and however we come out of this.

This series of occasional guest columns continues this morning with a contribution by Kyle Wade, who is a Food and CPG Marketing senior at Western Michigan University, as well as VP of Professional Events for Western Michigan's Food Marketing Association.

by Kyle Wade

How has the pandemic has affected you personally or professionally?

This pandemic has affected personally in the fact that I am no longer constantly busy. When school is in session I participate in as many activities as I can outside of the classroom to occupy my time and advance my learning. I am finding it hard to stay busy and getting stir crazy.

Professionally, I have learned that communication is key during a time like this. I have been in communication with the company I am interning with this summer to make sure that plans are going to remain the same. The pandemic has caused a lot of uncertainty for a lot of people and the best way I have found to combat this is better communication. 

How do you think the world - including but not just the business world - should be different whenever and however we come out of this?

This has proven that we are not ready, nor equipped, to handle a large scale pandemic, whether from natural causes, or biological attacks on the country. We have learned exactly how unprepared the United States is as COVID-19 plagues the nation. I think companies currently reinforce a negative stereotype about calling into work while you are feeling ill. This leads to a greater likelihood of virus transmission throughout the workplace.

I feel companies need to understand that the health and safety of all of their employees are vital to the organization's success and by pressuring employees to come to work while they are ill, they are risking every other employees health and potentially aiding in a large scale pandemic. 

We'll have more essays in coming days.  Stay tuned. - KC

Published on: April 8, 2020

•  CNBC reports that President Trump used the White House podium on Tuesday to once again blame internet companies, including Amazon, for the hard times being faced by the US Postal Service (USPS).

There have been concerns lately that the USPS could face bankruptcy by the end of summer if it does not get some financial relief from the government;  conventional wisdom is that a core problem for the Post Office is the way the US Congress requires to account for employee pensions and benefits.  A change in how the rules are written, experts say, would provide considerable relief for the USPS.

However, no relief for the Post Office is included in any of the bailout/stimulus bills passed by Congress to this point.

At his daily press conference yesterday, however, the President said, "I’ll tell you who’s the demise of the Postal Service, are these internet companies that give their stuff to the Postal Service...They drop everything in the post office and they say, ‘You deliver it.’ And if they’d raise the prices by, actually, a lot, then you’d find out that the post office could make money or break even, but they don’t do that, and I’m trying to figure out why.”

Experts say, in fact, that e-commerce in general and Amazon in particular have created more volume and revenue for the Post Office;  it is the drop-off in regular mail - which has gotten worse during the pandemic - that has had a greater impact.

Published on: April 8, 2020

•  John Prine, who for almost 50 years established himself as one of the country's most prominent singer-songwriters, has passed away.  He was 73, and died from complications related to the Covid-19 coronavirus.

Doesn't get much better than this:

And there's this wonderful duet, which may be worth thinking about as we spend more time than we might want cooped up with our spouses and partners:

Published on: April 8, 2020

Yesterday, in a couple of places on MNB, I said that we are at the point where retailers ought to require consumers to wear masks when entering their stores - in essence, "no mask, no service."

I suggested that stores could loan laundered/cleaned masks to people without them, or could take people's lists and to the shopping for them.  But in the end, I said, retailers need to say that their employees' health and other customers' health is the most important thing.

Got a lot of responses.

One MNB reader wrote:

Your challenge to the retailers is interesting. I have a couple sincere questions for you.

With your proposal is the retailer now  expected to “police” appropriate masks and their usage?

How do you suggest EVERYONE who wants to shop in a store get a mask? Last I checked they aren’t available on line etc so a person can’t shop until they can source a legitimate mask?

Are we supposed to think that a scarf or fabric over your mouth and nose is as effective as an N95 mask for instance? 

Shelter in place is a direction from the CDC as well, why are you ok to go to a store everyday? Are you considered an essential business?

I can feel your sincerity - especially in that last question, which I knew I'd get from someone.  The last reference is to the fact that I went to Whole Foods on Sunday and Stew Leonard's on Monday (which was clear because I recorded videos in both places).

The fact is that I mostly went in my role as someone writing about what's going on in the industry … I was there, so I picked up a few things.  But my primary motivation was my work;  it'll be at least another week before I venture out to the store.

(MNB readers are invited to decide for themselves whether I am an essential business.) 

And yes … I think retailers should "police" their stores to make sure that everyone is wearing a mask (the same way they police their stores to make sure everybody is wearing shoes) … I recognize that there seems to be a mask shortage, but a lot of people seem to be making up for that with homemade varieties … I also think that I'd give folks a bit of time before enforcing the rule.

But … in Los Angeles, they've decided to bite the bullet and just go for it.  I agree with the decision.

Besides, some already are doing it.  Got this email from MNB reader Brian Kvistad:

We closed our store to shoppers a little over a week ago, and have moved entirely to BOPIS (or I should probably say BOPFD “Buy Online, Pickup at (our) Front Door”).  We are also now requiring employees to wear (non-medical) masks during their shifts—something that most of them were already doing before we made it mandatory. 

I know of other independent stores across the country that are doing this also.  I also know of other stores who are open to public shopping, but who are requiring masks for customers. 

Certainly it would be nice if the big industry players would do this, but my point here is that you ask in your piece who the “first retailer” would be to take these measures.  I can attest that that ship has already sailed.  There are already a lot of firsts out there in this regard—and most of them are at small, independent, community-minded stores where leadership and staff work closely with each other and are able to adapt to concerns in a more proactive way.  Not huge blips on the industry radar, but very significant in the lives of those communities touched by the dedication of these store owners, leaders, and employees. 

Thanks for your continuing coverage on this.  I appreciate your work and commentary.

One more MNB retailer wrote:

I just heard from my eldest daughter at the dinner table last night of one local independent grocery store in the area that turned away her friend and her mother from entering the store without face covering.  First time I’ve heard of any business enforcing this on customers but if the local, state and federal officials are not going to mandate it the private sector will need to decide whether or not a “voluntary” decision is worth putting customers and associates at risk.

From another reader:

I am all for that.  Makes perfect sense.  Is the store going to provide the mask?  Because I can’t get them anywhere…oh I can order online but arrival is somewhere between May 3 and 31st.  The local convenience store/smoke shop has a few for $4.99 each (rip off).  Yes I can use a bandanna (don’t have that) or make one out of a coffee filter or napkin (Keurig- no filters).  So the problem of finding masks and gloves needs to be solved as well.

From another reader:

I'm in agreement.  Where can we get masks though……?

And another:

Wholeheartedly agree except for one big problem. Where the heck is one going to find a mask to buy and what about us guys who do not know how to make a mask? I have been checking every imaginable retailer for 4 weeks to find 2 masks, one for my bride and one for me. Most manufactured masks are going to the medical profession. Yes they are on eBay for totally usurious prices. Is a bandana going to be an acceptable substitute as a mask? Where can you find a place to buy a bandana? Heck unless you are a cowboy, a farmer or work on a farm, most urbanites would not even know what a bandana is. Several retailers here in the Portland area have been enforcing social distancing and only let X amount of people in the store, 1 out 1 in, 3 out 3 in etc.  Also some retailers have cut back on the number of grocery carts are available for use.  I think the retailers here in Oregon are doing really well in their choices for a safe shopping experience for their customers, plus the people have been practicing social distancing for several weeks. 

No argument.   We're also using scarves.  Whatever works.  I'm prepared to be creative … because I don't want to freakin' die.

Yet another MNB retailer wrote:

I understand not coming in without a mask but after checking multiple sites and calling numerous retailers, they will not have masks until May or June. Does my family not eat until then? Grocery deliveries in my area are not available until late April.

And from another:

Kevin, that assumes everyone can get a mask!  Then what about the homemade versions?   Someone is going to look at everyone coming in the door and then pass judgement on whether the handiwork applied passes as acceptable or does anything go?   I don’t disagree with the thought, but the implementation is tricky and ripe for issues and conflict.  If the retailer provides a mask at the door, then that would be an awesome solution, but good luck getting masks right now! 

I get it.  This rule would not be easy.  

But people are at risk.  Hard moves have to be made.

From another reader:

Great idea on masks, but where exactly would we get some to hand out to customers? We ordered washable, reusable masks for staff weeks ago and are still waiting on shipment. We were able to get some simple disposable ones in the meantime for staff, but those are dwindling. We are putting out a call to our shoppers who want to thank our employees to make masks for staff. We are strongly encouraging shoppers to adopt safe behaviors and even put ourselves out there FIRST before the bigger chains did about this with our local media. 

We are not a large retailer like Kroger, we have 4 stores and our director team has been managing this crisis in realtime, putting up screens at registers and service counters, encouraging and supporting employees that are elderly, high-risk or have day care issues, pulling together a curbside pickup program and more. 

I spoke with a friend this week who works for Walgreens corporate. They have an entire response team yet still, they don’t have screens in place at registers. Grocers aren’t the only essential store in our state. Hardware stores are considered essential, like Lowes, but what are they doing? 

I never, never thought this would be my job a month ago - to lay away at night hoping that none of my coworkers die because we can’t do enough. 

One MNB reader wrote:

I agree wholeheartedly that retailers should begin enforcing mandatory masks in their buildings for all employees, DSD contacts and consumers.

Until we are truly past this pandemic infection risk, why would you not have this. All employers have indicated their #1 priority is the safety of their employees.

Given that, it is very appropriate and reasonable to expect and then for all of the population to support this type of measure.

And another:

I fully agree with your assessment and suggestion.  I was in a Safeway on Sunday and intentionally counted how many customers were wearing face masks  It was just over 20 with upwards of 60 or more people shopping at the time.  Of the store employees I saw, only two were wearing masks.  Even though I had mine on I did feel I was still at risk. 

One MNB reader wrote:

I’m all for it. We’ve been throwing around the term “essential workers” for weeks. Time to put your mask where your mouth (and nose) are! The companies that do will earn good will and those that must shop will appreciate it too. 

From another reader:

HEAR HEAR!  (It kind of reminds me of the words of Tracy Morgan’s 30 Rock Tracy Jordan character, when he says, “Sometimes you have to do the right thing, even when the wrong thing would be a whole lot easier.”)

And from another reader:

Agree 100% Kevin.  Grocery workers are putting their own health on the line everyday.  While every company appreciates the greatly increased sales, and the employees are enjoying the extra hours and money; they need to be protected.  Wearing a mask is a small price to pay.  The mask is not to protect the person wearing it, but to protect those around them, especially the supermarket workers who day in and day out are exposed to people potentially pre-symptomatic the COVID-19.

And still another:

Can’t help wonder why supermarket chains don’t have people handing out masks as people enter the store. It is an easy solution! This certainly would help keep everyone, from the shoppers to store employees, protected.

MNB reader Ron Johnston wrote:

Right on, Kevin. It’s about time!

MNB reader Jessica Perri wrote:

Love your blog. I work in consumer insights and live in Chicago. My colleague from China told me this past weekend she went to the supermarket in Chinatown to pick up some things and before you enter the market, they: 

1. Check your temperature

2) Give everyone disposable gloves to wear in the store 

I was amazed by this because it's businesses like this who are making a difference in the community and now I want to shop there (even though it's requiring me to bridge out of my comfort zone). Wanted to share! 

And finally, from MNB reader Eric Carlson:

Kevin, entirely agree with you. First retailer who requires customers (and employees) to wear masks will be scared to do it. But somebody should. Holding them back:

•  People like my father-in-law (who works at a grocer store) are convinced that you have to be in close contact with someone for a full ten minutes before you can catch the virus.

•  Concern that customers and/or employees will perceive that something is wrong with that particular store.

•  The "President"  says wearing a mask is a choice, and you don't have to wear one if you don't want to.