business news in context, analysis with attitude

Published on: April 15, 2020

Retailers are offering their employees bonus and temporary pay bumps to get them through the crisis created by the pandemic.  But MNB Content Guy Kevin Coupe has an idea for another bonus that will be both timely and appreciated.

Published on: April 15, 2020

STAT has a story about a new modeling study of the Corona-19 coronavirus pandemic, suggesting that "intermittent periods of social distancing may need to persist into 2022 in the United States to keep the surge of people severely sickened by Covid-19 from overwhelming the health care system."

The story goes on:  "The research, published Tuesday in the journal Science, looked at a range of scenarios for how the SARS-CoV-2 virus will spread over the next five years. Those scenarios included variables like whether people who are infected develop short-term immunity - less than a year - or longer-term protection. But, overall, the research concludes it is unlikely that life will return any time soon to the way it was before the virus’ emergence."

Also from the STAT story:  "The authors suggest a number of factors will play a major role in the path the disease will take over the coming years — if transmission subsides in summer and resurges in winter, if there is some immunity induced by infection and how long it lasts, and whether people get any cross-protective immunity from having been infected with related human coronaviruses that cause common colds … The model predicts that a one-time social distancing effort of the type currently being employed in most parts of the country will not stop transmission of the virus. If treatments are developed that can prevent Covid-19 patients from progressing to severe disease or if a vaccine is developed, movement restrictions could be loosened without health care capacity being overwhelmed, the researchers said."

Published on: April 15, 2020

Good piece in Forbes, suggesting that even as stores limit the number of customers walking their aisles because of the pandemic, moves described as "smart and well-intended," there is "still even more that can be done to make store traffic control even safer for both customers and employees.

Specifically, retailers should make scan-and-go mobile checkout a functional option within their operations as quickly as possible."

Here's the argument:

"For years, retailers have experimented with scan-and-go checkout-free retail, i.e. the practice of customers using their mobile phones to scan items, bag these items themselves, pay electronically, and then just walk out the door. Unfortunately, few retailers have had the guts to put it into large scale practice and, as a result, they and the nation’s public health could soon be paying the price for their inactivity … But, now the arguments against scan-and-go technology no longer hold water. Now the conditions for its implementation are ideal, and all the hang ups retailers have had for years about the technology, if they really care deep down about their customers and employees, should go out the window. The time is right now more than ever for retailers to press the technology into service as fast as possible," because it is safer, requiring less contact between staff and customers.

Published on: April 15, 2020

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

•  In the US, there have been 614,246 confirmed cases of the Covid-19 coronavirus, with 26.064 deaths and 38,820 reported recoveries.

Globally, there have been 2,013,935 confirmed coronavirus cases, 127,587 deaths and 491,765 reported recoveries.

•  National Public Radio (NPR) reports that "New York City has drastically increased its estimate of the number of people killed by COVID-19 to include probable victims who were not tested. The new number is 10,367.

"For weeks, firefighters and paramedics have been recording a massive spike in deaths at home around New York City. The deceased were presumed to be victims of the coronavirus but were never tested. Now city officials have recalculated the toll that the virus has taken and reached a staggering number — adding nearly 4,000 to the total."

Meanwhile, the Wall Street Journal reports that "newly published figures show deaths linked to the new coronavirus in the U.K. have far exceeded preliminary estimates, adding to a growing body of evidence across Europe that closely watched daily death tallies don’t reveal the virus’s true toll.

Behind the discrepancy are lags in recording some deaths that can stretch to a week or more, as well as deaths in nursing homes and other non-hospital settings that aren’t normally captured by rapid-fire estimates used to track the pandemic.

"Similar issues have complicated efforts to get an accurate read in France, Spain and Italy. The fog risks clouding tricky judgments facing officials about when the outbreak has peaked and restrictions on work and travel can be eased, while also fueling some suspicion that governments are lowballing the death count."

Great.  The pandemic actually is worse than previously believed.  The problem is, would any of us really be surprised to find out that it is even worse than is being recalculated now? 

• Politico reports on a new Harris Poll posing the following question:  "When do you think Americans should start returning to work and life as normal?"

The results:

9% … 1-2 weeks from now

23% … 3-4 weeks from now

51% … More than a month

18% … More than six months from now

•  The Cincinnati Enquirer reports that "Kroger wants federal and state officials to classify its nearly 460,000 workers nationwide as 'extended first responders' or 'emergency personnel' as the nation battles the coronavirus pandemic … Kroger CEO Rodney McMullen on Tuesday joined the United Food and Commercial Workers International Union (UFCW) in calling for the temporary official 'first responder' designation that would improve supermarket workers' access to still-scarce personal protective equipment (PPE) such as masks.

"'Given the significant daily risk these workers face, we are calling on all of our federal and state leaders to take immediate action,' McMullen said in a joint statement with the UFCW president Marc Perrone. 'Make no mistake, this designation is absolutely critical as it will ensure these front-line workers have priority access to personal protection equipment like masks and gloves'."

The call is similar to one made last week by the UFCW and Albertsons.

•  The Cincinnati Enquirer also reports that Kentucky Gov. Andy Beshear has announced a partnership with Kroger "to increase COVID-19 drive-thru testing … The goal is to test up to 20,000 people statewide over the next five weeks, Beshear said. The state had tested 25,866 people through Saturday, so their goal is to nearly double their testing."

According to the story, "Kroger will provide the medical staff, the PPE and the signup portal. The state is contracting UPS and Gravity Diagnostics, a small medical lab based in Covington. Gravity Diagnostics is working with the state to provide a 48-hour turnaround on COVID-19 tests."

The Enquirer quotes Beshear as emphasizing that "Kroger is not charging the state one penny for this.  I don't know anywhere else in the country that people are doing that. They might be, but that's really incredible that they are providing the people and the PPE to do it. They did this portal on their own dime. Now, we as a state are paying for the kits and the shipping, but we really, really appreciate that. It's going to help us scale up." 

•  California Gov. Gavin Newsom yesterday laid out the parameters that the state will reopen its economy - which is the largest in the US and, if it were a sovereign nation, would be the fifth largest on the planet - as officials there look to slowly move into a post-pandemic world.

CNBC writes that Newsom outlined "six key indicators that will guide the state’s decision as it considers lifting the stay-at-home order:  The ability to monitor and protect our communities through testing, contact tracing, isolating, and supporting those who are positive or exposed … The ability to prevent infection in people who are at risk for more severe COVID-19 … The ability of the hospital and health systems to handle surges … The ability to develop therapeutics to meet the demand … The ability for businesses, schools, and child care facilities to support physical distancing … and the ability to determine when to reinstitute certain measures, such as the stay-at-home orders, if necessary.”

The story notes that California was the first US state "to issue a statewide stay-at-home order on March 19," which experts say has helped the state minimize spread and avoid the devastating numbers that have been seen in New York State.  (While New York has had more than 203,000 cases and more than 10,000 deaths related to the pandemic, California has had fewer than 26,000 cases and fewer than 1,000 deaths.)  Newsom said yesterday that "even once the stay-at-home order is lifted … society won’t snap back to normal. For example, he said restaurants will likely have to limit capacity and face coverings in public will likely be common.  'There’s no light switch here. It’s more like a dimmer,' he said at a news briefing."

Newsom also established no timeline for the lifting of its stay-at-home order.

California gets a lot of grief for its policies and politics - some of it deserved - but it is important to remember that the government there is managing what is virtually a country, not just a state.  Which lays bare problems as well as creating opportunities.

By any standard, it is impressive the degree to which California's actions have managed to inhibit the virus's spread.  They seem to have accepted the notion that short-term pain will be compensated for by long-term advantages.  Living as I do in the shadow of New York State, this strikes me as a persuasive argument.

By the way, there was an interesting note from Reuters yesterday about how the 10 states that have begun coordinating their plans for slowly reopening their economies - California, Oregon and Washington State working together in the west, and New York, New Jersey, Connecticut, Delaware, Pennsylvania, Rhode Island and Massachusetts in the east - together "generated 38.3% of the total U.S. economic output in the fourth quarter of 2019."  I hadn't thought of it in those terms…

•  Axios reports that the International Monetary Fund (IMF) is projecting that "the coronavirus pandemic will bring about the worst economic downturn since the Great Depression … The organization expects a recession 'far worse' than the 2008 financial crisis. In a revision to its earlier forecast, the IMF said global GDP growth will fall to -3% this year, a drastic downgrade from its forecast of +6.3% in January."

The IMF believes that "global GDP will face a cumulative loss of about $9 trillion — larger than the economies of Japan and Germany combined … The United States is projected to experience -5.9% growth, while the eurozone will see -7.5%. Italy, the country in Europe hit the hardest by the pandemic, is projected to experience -9.1% growth."

But there is potential good news, according to Axios:  "The IMF projects growth will partially rebound to +5.8% in 2021 if the pandemic fades in the second half of 2020 and if 'policy actions taken around the world are effective in preventing widespread firm bankruptcies, extended job losses, and system-wide financial strains,' according to the report … The IMF urged policymakers around the world to keep using lockdown policies to stop the virus from spreading, noting that they're the best way to eventually be able to resume normal economic activities."

•  The Los Angeles Times reports this morning that "Los Angeles County leaders on Tuesday passed new rules aimed at protecting the health of food delivery workers, who are playing a key role in getting meals and groceries to housebound residents."  The new ordinance - aimed directly at the likes of Instacart, Doordash and Shipt - "requires food delivery platforms to provide access to face coverings and gloves or hand sanitizer to workers, either by supplying workers directly or by making sufficient funds available to workers to purchase this personal protective equipment.

"Companies are also required to provide a 'no contact' option, so that workers can make deliveries without being physically close to customers. Grocery and pharmacy stores will be required to allow delivery workers to use their restrooms to wash their hands."

The new rules come following accusations from various quarters that some delivery workers are being put at risk because of insufficient protections.

The story quotes John Grant, president of the LA-area local of the United Food and Commercial Workers (UFCW), as saying that “UFCW members serve as frontline workers in grocery and drug stores throughout Los Angeles County. They are putting their health and safety on the line during this pandemic.  The requirements to provide PPE and regular hand washing, among other measures, will promote public safety and health throughout Los Angeles County and flatten the curve of the pandemic.”

•  From Cleveland.com:

"Giant Eagle will expand its curbside-pickup-delivery center format to Garfield Heights in a week, the store announced Thursday," converting an existing store into a warehouse to serve online shoppers.

"The company sees last week's conversion of the Howe Avenue store in Cuyahoga Falls as a pilot-program success because of the volume of orders it can handle during the social-distancing measures that are in place to fight coronavirus … The Garfield Heights store will finish in-store-customer business Friday, April 17. It will be converted Saturday, April 18, into a clearinghouse to allow employees to do the shopping and loading, and be ready to handle orders Sunday, Giant Eagle spokesman Dan Donovan said.

The story says that "Northeast Ohio remains a grocery guinea pig of sorts for the company's use of dedicated pickup-delivery centers. Whether the new approach remains and for how long will be determined by the marketplace…"

Yet another example, I think, of what Tom Furphy talked about in last week's Innovation Conversation - the pandemic has created a kind of rip in the space-time continuum that has propelled e-grocery several years into the future.  There's no going back … there is likely to be some moderation as we move into a post-pandemic era, but there is no way that things go back to the way things were in 2019.  (Remember 2019?  It seems like a decade ago…)

•  From USA Today:

"Grocery store workers are on the front lines of the spreading coronavirus epidemic, and thousands have taken off work and some have died after being exposed to the respiratory illness in the U.S., according to a new report.

"At least 30 supermarket employees have died as a result of COVID-19, the United Food and Commercial Workers International Union (UFCW) said in a release on Monday. Another 3,000 have called out of work after showing signs of illness or other possible coronavirus-related complications.

"To make matters worse, most supermarket workers say customers aren't adhering to safety precautions, the union says."

This latter situation in part exists because there remains some confusion among consumers about what "responsible behavior" entails, and in part because some people continue not to take the pandemic seriously.  I get the first one, but cannot for the life of me understand the second.

•  MarketWatch reports this morning that Walmart announced yesterday that it "will reserve the hour between 7 a.m. and 8 a.m. for order pickup for groups most at risk for becoming ill with Covid-19, including those 60 years old and up, first responders and customers with disabilities. The order pickup process follows social distancing guidelines and can be contactless."

•  USA Today reports on the retailers that were in trouble before the pandemic, and may not survive the current crisis.

"While some retailers are flourishing – namely chains with major grocery sales like Walmart, Target, Kroger and Costco – others are trying to stave off doom. In many cases, these retailers were already in trouble already as Americans shopped increasingly online.

"Forever 21 and J.C. Penny were hanging by a thread, while Sears and Kmart have been waiting for the final shoe to drop for years. Now these and other chains, including Neiman Marcus, David's Bridal and Ascena Retail Group, are losing cash rapidly while they await the chance to reopen their doors. But there’s no guarantee that customers will come flocking back to shop amid serious concerns about their finances and getting exposed to the still lingering virus."  In addition, the story says, " chains like GNC, J. Crew and Rite Aid are fighting for their lives."

For the record, "U.S. retailers have already announced 2,184 permanent closures this year, most of which were announced before the pandemic began, according to retail analytics firm Coresight Research."

•  The BBC this morning reports that the French government  has ordered Amazon there to only deliver essential goods - meaning "food, hygiene and medical products in the country."

The government says that the limitations have been placed on Amazon "amid claims it is failing to protect its workers from coronavirus," and will allow regulators to assess the accuracy of those charges.

However, Reuters reports that Amazon plans to appeal the order, saying, "We're puzzled by the court ruling given the hard evidence brought forward regarding security measures put in place to protect our employees … We're assessing the consequences of this decision and our options and we think we will appeal."

•  From the Charlotte Observer:

"Bi-Lo and its parent company surprised frontline workers of the novel coronavirus crisis this week with free groceries in all of its stores.

"Southeastern Grocers, parent company of Bi-Lo, Fresco y Más, Harveys Supermarket and Winn-Dixie grocery stores, paid the grocery bills for thousands of health care professionals and first responders Monday night."

The story notes that the retailer "took the lead from filmmaker and actor Tyler Perry, who last Wednesday during the senior and high-risk shopping hour paid for the groceries in 29 Louisiana Winn-Dixie stores, according to a company statement … 'We were inspired to pay it forward and hope to inspire others so we can continue to lift spirits during this difficult time,' said Anthony Hucker, president and CEO of Southeastern Grocers."

One of the ways that a retailer proves itself to be "essential."  It is not a matter of just serving a community, or selling to a community.  It is about being of a community.

•  The Puget Sound Business Journal reports on an interview with former Starbucks CEO Howard Schultz in which he said that "the federal government’s stimulus package falls woefully short and is largely aimed at securing the future of big business." He said that "it is a crucial time for small businesses and in particular, the restaurant industry, due to business disruptions caused by the COVID-19 pandemic."

“It is one thing for elected officials to constantly say that the engine of economic growth is small business, and it is another to ignore what small business and its employees definitely need to survive. ... That is not being discussed,” Schultz said, adding, “If we wait another month or two," he said, "we will have lost the opportunity to save them.”

The story notes that "Schultz and his wife Sheri recently created ThePlateFund, which is disbursing one-time $500 payments to thousands of laid-off restaurant workers in King County."

•  Finally … even in a pandemic … perhaps especially in a pandemic … it doesn't do to have too much distance from barbecue.

And so, according to the Kansas City Business Journal, Jones Bar-B-Q there has created a "barbecue vending machine. And don't think it's just stocked with bottles of barbecue sauce.  This temperature-controlled vending machine is accessible 24/7 and offers myriad options, including signature sides, chicken wings and sandwiches, such as beef, turkey and burnt ends. It's stocked daily … Only debit and credit cards are accepted.

Published on: April 15, 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 Holly McCarthy, a graduate of Western Michigan University's Food Marketing Program, and currently  Manager, Omnichannel Customer Marketing - Kroger for The J.M. Smucker Company .

by Holly McCarthy

How has the pandemic has affected you personally or professionally?

The COVID-19 pandemic has provided perspective on what I thought was already a 2020 full of change. I had relocated from my Company’s (The J.M. Smucker Company) headquarters to a field office in January, and my husband, Austin, joined me in the beginning of March when we closed on our house. Our first week in our new city together was the first week we were encouraged to work from home. Coincidently, this was also the first week Austin would start his new completely work-from-home role. We do not have kids or pets, so other than realizing each other’s working quirks – he whistles constantly, I need to use headphones for calls to stop being so loud – it’s been pretty seamless. Outside of work, we’ve stayed busy with house projects, at-home workouts, and truly resetting our minds after the stress of moving. I’m not one to get bored, there’s always something to do, and no, I’m not going to watch "Tiger King."

Professionally, we’re both very thankful to be working for the same company and in roles that can be done remotely. I manage Omnichannel Marketing for my account, and he is in Customer Supply Chain Initiatives for his account. Needless to say, it’s a busy time for us both. 

I’m endlessly proud of the care Smucker has shown toward not only their employees, but the community at large through donations to the Red Cross, Feeding America® and the United Way. Our efforts through fostering digital community has made us feel closer than ever before through employee-led yoga and meditation, virtual spirit weeks, live “Jam Session” concerts, and involving us to help in the efforts to give back. Without a doubt, Smucker not only had the infrastructure in place for business to continue as usual, but also to help employees thrive during this time. 

My PB&J consumption has gone up exponentially, and it was already high, with some experimenting based on ideas from co-workers. My favorite combo is PB&J oatmeal.

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

When we think of generation-defining events, this pandemic will be one of them. The changes that need to be made are apparent too across healthcare testing and protection, supply chain flexibility, and government preparedness. The local economies, small businesses, and service and restaurant industries no question are impacted more than most. When life goes back to normal, or more likely,  the "new normal," we need to fix the weak points proactively after this is over. Every industry is finding areas of opportunities in this crisis, and those who have more to improve on are seeing openly how to get there due to the transparency and spread of constant news and knowledge during this time. 

We’re getting to the point where we know someone within a few degrees of separation who has contracted COVID-19. Personally, that’s when my “happy face” started to falter. As the weeks go on, we must continue to do our parts in the actions to slow the spread. I think of the home front in World War II, each American doing their part that truly did help the greater whole. At the end of this, I don’t want to be disappointed in my actions. 

I challenge you all with this – if you haven’t already, start a journal today. Write a few sentences or a few pages a day. You may say you will always remember what happened during quarantine, but we all know how that goes. The joys in my day right now are so simple and I love it – running by the chalk art the neighborhood kids drew, video chatting with fellow Western Michigan University Food & CPG Marketing alumni or eating a PB&J lunch with my co-worker/husband. These are the bright moments that will help us to put on a genuinely happy face. 

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

Published on: April 15, 2020

…with brief, occasional, italicized and sometimes gratuitous commentary…

•  From the Wall Street Journal:

"Amazon … has fired at least three warehouse employees and reprimanded several others who say they were singled out after pushing for better working conditions during the coronavirus pandemic, a contention the company denies.

"The current and former employees, who don’t belong to a union, say they are being retaliated against as they pushed the company for better treatment after helping to process an extraordinary surge in orders during a time of elevated worker absences.

"Amazon denied that the firings were connected to seeking better treatment and said the individuals were terminated or reprimanded for violating internal policies, including harassing a co-worker and violating social-distancing and other safety guidelines."

I think a lot of tension is building up - and is exploding - because of the current stresses being put on systems.  But I would suggest to Amazon that part of being a new world company is having an enlightened approach to labor relations … and there is a lot of evidence at the moment that it does not.  Now, it may just be that Amazon has lost control of the narrative, though I'm not sure I'm buying that.  But I do think it needs to do a better job, if only because its shoppers expect it.

Published on: April 15, 2020

…with brief, occasional, italicized and sometimes gratuitous commentary…

•  Fast Company reports that famed chef/restaurateur Thomas Keller - who owned both The French Laundry in California's Napa Valley and Per Se in New York City - is suing his insurance company.

The reason:  After laying off most of his 1,200 employees after his restaurants were forced to close because of the pandemic, he applied to his insurance company, Hartford Fire Insurance Co, looking for coverage of pandemic-related losses.  And was rejected.

Keller tells Fast Company, "I am suing my insurance company … because right now, when we need them, they won’t help us. Since opening The French Laundry, we’ve paid about $15 million over 25 years for business interruption insurance. But now that we need the payouts, they are denying us and many others relief because in many policies events like viruses are excluded. A lot of insurers made sure of that after SARS broke out in 2003. It’s like being denied medical insurance because of a preexisting condition. It’s irresponsible and amoral.

"I have a special clause in my policy to cover events like this—and I am still not getting money from them. If they’re not using the cash we pay them to help us, what are they using it for? If they don’t help us now, who is going to trust insurance companies going forward? I hope my case will set a legal precedent. If restaurants survive because [insurance companies] help them, we’re going to come back and keep paying for insurance. It’s a better situation than half a million restaurants closing."

Good for him.  I hope he not only wins, but sets a precedent that will put a lot of insurance companies in the middle of the target for desperate businesses.

Published on: April 15, 2020

•  Sprouts Farmers Market said yesterday that Gilliam Phipps, most recently vice president of branding, marketing and 'Our Brands' at Kroger, will join the company as senior vice president, chief marketing officer.

Published on: April 15, 2020

Sorry to hear about the passing two weeks ago of Peter A. Marotta Sr., who passed away at age 80.

Marotta was a founding member of Store Planners, Engineers and Customers (SPECS), and, while leading the store planning team at Shoprite, pioneered efforts to create stores that were friendly to disabled shoppers - a quarter-century before the passage of the Americans With Disabilities Act (ADA).

Published on: April 15, 2020

From one MNB reader:

I had to share...

On Saturday April 4 the hubs and I headed to Lowe's in Meridian, Idaho to pick up some project materials. The store was busier than we had ever seen. We decided it was a bad idea to join the crowds and left. We went back on Sunday to see if anything had changed and Lowe's had set up flow control limiting the number of people in the store. This was a positive move. There were only a fraction of the shoppers there compared to the day before. We got in line and waited 5 minutes before we could enter. It was interesting to see how few people had masks on, and no employees with PPE.

This past Friday (10th) we went again and every parking stall was filled. Whole families were going into the store. I did not see anyone wearing PPE. We drove on. That scene looked like trouble.  On Saturday I ordered online for pickup.  My order was ready in under 4 hours - huzzah!  We went to pick it up and again the parking lot was maxed out. It looked like everyone in town was there. Whole families, again. No PPE on shoppers or employees, again. I asked the associate what happened to flow control and he said the store in the next town did not implement flow control and their sales were 3x better than this store. So the manager pulled the plug on flow control.  

Besides being completely irresponsible by Lowe's, it strikes me as ironic that individuals would think it's safe to be elbow to elbow in Lowe's (with the whole family) but wear a mask and shop alone at a grocery store.  I'm shocked Lowe's would choose sales over the health of their employees and community. It's these choices by businesses and the public that force governments to dictate the rules.

It's a Lowe's low moment for sure.

I continue to get email about the way that Ahold Delhaize and SpartanNash appear to be treating their vendors.

One MNB reader wrote:

It would be interesting to understand what % of business SpartanNash represents for any given mfg.  I am guessing it is a rounding error for any large CPG company.  I’d give serious thought to cutting SpartanNash off completely, rather than pay any ridiculous “chargebacks”.  I guess the transportation execs at SpartanNash do not understand what happens in a supply chain when “demand” exceeds “supply”.  Other Wholesalers should take note, as soon to be former SpartanNash clients, may be open for discussions.

From MNB reader Jim Swoboda:

I read the Ahold and Spartan letters shared in the past couple days along with the comments on Ahold’s.  Back in the ECR days that Sansolo talked about last week, these types of things were openly discussed, jointly worked on and there was common ground to work together to focus on delivering maximum consumer value.  I know as I was part of the effort with the ECR Operating Committee. Just to put time in perspective, this all took place in the years 1994 to 2000…roughly.

Now, being mostly retired from the industry and an interested observer, I find it deeply disappointing that our industry, looks more like it did in those years than anyone would admit to.  It’s like time traveling, “Back to the Future”.  Old is current.  It’s all so so frustrating and stupid.  The retail practice of pushing their costs back to suppliers is just wrong.  And these two examples are not alone.  I think what is lost are some very basic principles….

a)  a retailer chose to be a retailer with all that defines that.  It is their operations, it is their decisions on what to carry and what to promote.  They can say yes or no.  Simply as that.  Consumer then decide.

b) a manufacturer chose to be a manufacturer and with all that defines that.  They choose how to promote, what items to develop, what proliferation in sku counts they pursue and so on.  They own that.  And then consumer decide.

I could provide a laundry list of fees, charges, practices that still exist to that existed in the ECR years.  I would suggest about the only real change that occurred has been driven by technology, not by actual changes in business practice.  Faster, more accurate data has lead to more efficient, e.g. less total inventory levels.  Technology has worked to create more the efficient production of goods driving down costs per units allowing other increased expenses to be absorbed.   But what actual practices have been changed.  I would suggest very very few, to none.  And the letters are an indication of that.

From another reader:

I agree with your commentary that companies will either be sympathetic or less with vendors during this unprecedented time.  What I find interesting about the SpartanNash letter is it is authored by the Transportation department.  They have very limited front line interaction with vendors, and are held to finite metrics.  They rely on someone else in the organization (merchandising) owning the relationship.  I am sure the merchandising department is not aligned with this move (I left there two years ago after many years).  So we now have companies very similar to our government.  Governors making plans, President stating he is in charge.

Another reader pointed out:

Ahold Delhaize made sure everyone knows how much this is costing them.

This referred to the company's assertion that it has spent $185 million across its retail brands to respond to the pandemic, a number that it said included safety measures, charitable donations and hiring 40,000 additional employees.

I feel compelled to point out that these strike me as costs of doing business, just as vendors, I'm sure, also had increased costs.

But charitable donations?  Is Ahold Delhaize saying that when it donates money to a charity, it can charge back vendors for some of those donations?  If you do that, it isn't really charity, is it?  It is just spending other people's money.

From another reader:

What a joke, particularly with SpartanNash,  a “C” level operator at best.  My thought to them - Dear Retailers, you CHOOSE to be a retailer.  With that comes the nuances of BEING a retailer.  YOUR issues do not become MY issues.  If I was a LARGE NATIONAL VENDOR, my reaction to their “threatening” memo would be to simply respond by saying “Memo received and with your new terms we will no longer be able to ship to you”.  I’m sure MOST vendors would be happy to take whatever the Ahold orders would be and the tiny SpartanNash orders and ship to perhaps THE BIG 5 or 6 grocers.  This would make the big 5 or 6 grocers VERY happy and the vendor look like a hero in their eyes!  I would love to see it happen.

Also, does anyone REALLY think there is a TRUE partnership amongst vendors and retailers??

And another:

I read the report on the Ahold letter to the trade and was not surprised, business as usual for this organizations that says so much about their view of the business.  In my 40+ year career in the food manufacturing business too many retailers looked at suppliers almost mythically as the source of the retailers financial woes.  I remember a retailer executive years ago revealing in a speech that trade funds represented 7% of their sales and net profits as 2% of sales or below;  retailers have become dependent on trade funds to survive.  It sounds like suppliers are reducing promotions and trade spending in times where they struggle to supply the surge in consumer demand at retail outlets and Ahold wants/ needs the promotion funding because they feel entitled to it.

And finally … I mentioned yesterday that retailers need to factor into their strategies and tactics the fact that customers may feel unsafe when going into their stores, and said that I had to admit that I feel to some extent when I enter stores that I am putting my life at risk.

One MNB reader scoffed:

Putting your life at risk by going into a Grocery store? Really? Unless your health is compromised and you are like me, an older person, this statistically is not life threatening. Especially when you pay close attention to all of the preventive details like;  social distancing, cover your face when in public places, keeping your hands washed, and do not touch your face until you do wash your hands.....the majority of us will be fine until we get this figured out. 

We now know people who have had this virus and recovered completely, while reporting it was like having a strong case of the FLU...which also kills! What did you do last Flu season? Did your stop going to the Grocery store then? 

Scaring people does nothing but paralyze us, which may have been the intent of this virus from the beginning. Who knows? But fear mongering is definitely the wrong approach! This thing doesn’t just jump you from behind as your walking by...

What happens next Flu season is the real question now?

First of all, I wouldn't say that I've been paralyzed.  I go to stores.  I'm just aware of being vulnerable.

I am statistically part of an at-risk group just by virtue of my age (65).  Now, I'm in good health … not to mention boyishly energetic … 🙂 … but I also know that marathon runners half my age have been knocked on their rear ends and even killed by this thing.  And yes, we all know people who have survived it, but increasingly we all are going to know people killed by it.

It isn't the flu, because there is no vaccine … which, let's admit, gives us a sense of security.  (Maybe a sometimes illusory sense, but there it is.)

I'm not trying to scare people.  I was actually just being honest about how I feel, and suggesting that there probably are a lot of people who may feel the same way, and that attention must be paid … at least by marketers who are thinking about their customers.

Published on: April 15, 2020

There is very little normal going on in the sports world these days, so it is worth pointing out this morning that on this date in 1947, Jackie Robinson played his first game for the Brooklyn Dodgers, breaking Major League Baseball's color line.

Robinson - the only player to have his number (42) retired by every Major League baseball team - played for 10 seasons, had a .311 lifetime batting average, was the 1947 Rookie of the Year, a six-time All Star and helped the Dodgers win the 1955 World Series.  He was inducted into baseball's Hall of Fame in 1962.

Published on: April 15, 2020

I'm happy to announce that on Friday, between 5:30 and 6:30 pm EDT, we're going to do it again … an MNB Virtual Happy Hour.

We did one back on March 27, and people seemed to enjoy it, and so, since we're all still grounded for the duration, I thought it was worth another effort.

The folks at GMDC have once again agreed to sponsor and host it, and I'll have a link and instructions for you later this week.

Hopefully, you can put it on your calendar … choose a libation for Happy Hour … and then prop up your laptop or warm up your computer on Friday for a conversation and a drink.  (You don't have to let me know you're coming, but it would be nice to know.)

One other thing - if you are on the west coast and the timing is a little early for you, I'm going to do another one on Friday, May 8, but I'll do it at 5 pm your time just to make it easier.  Of course, everybody is welcome to join either one or both.

More to come…