business news in context, analysis with attitude

Published on: September 1, 2020

KC takes the newspaper metaphor he used in yesterday's FaceTime and offers another example of how businesses sometimes provide certain products and services out of habit rather than customer need.

Published on: September 1, 2020

Walmart this morning announced the September 15 launch of Walmart+, a program designed to compete effectively with Amazon Prime.

Here's how Walmart describes the program:

"Walmart+ uses the company’s unique assets to make life easier for busy families. Along with the power of its online presence, Walmart+ has the reach of more than 4,700 stores, including 2,700 stores that offer delivery as fast as same day. Members will receive unlimited free delivery from stores, fuel discounts and access to tools that make shopping faster for families.

"Membership will be available to all customers on Sept. 15. It will cost $98 a year or $12.95 a month and includes a 15-day free trial period. In the future, the company will leverage its wide-ranging strengths to add additional benefits for members in a variety of services and offerings."

Walmart lists the specific benefits this way:

"Unlimited free delivery: In-store prices as fast as same-day on more than 160,000 items from tech and toys to household essentials and groceries. This service was previously known as Delivery Unlimited – a subscription service that allows customers to place an unlimited number of deliveries for a low, flat yearly or monthly fee. Current subscribers will automatically become Walmart+ members."

"Scan & Go: Unlock Scan & Go in the Walmart app — a fast way to shop in-store. Using the Walmart app, customers can scan their items as they shop and pay using Walmart Pay for a quick, easy, touch-free payment experience."

"Fuel discounts: Fill up and save up to 5 cents a gallon at nearly 2,000 Walmart, Murphy USA and Murphy Express fuel stations. Sam’s Club fuel stations will soon be added to this lineup."

In its coverage, the Wall Street Journal notes that "the new program doesn’t include free delivery from Walmart.com, which sells millions of items. Walmart offers free shipping on most web orders above $35."

"We are a company committed to meeting our customers’ needs," said Janey Whiteside, Walmart's chief customer officer, in a prepared statement.  "Customers know they can trust us and depend on us, and we’ve designed this program as the ultimate life hack for them. Walmart+ will bring together a comprehensive set of benefits where we see the greatest needs from our customers and where our scale can bring solutions at an unprecedented value."

The Journal points out that Amazon Prime, which launched 15 years ago, "includes free, fast delivery of millions of items as well as access to video entertainment, streaming music and other perks for $119 a year. Last year, Amazon added AmazonFresh grocery delivery for Prime members, dropping an extra monthly fee. It expanded online grocery pickup from Whole Foods stores amid the coronavirus pandemic."

Published on: September 1, 2020

CNBC reports that Amazon has gotten approval from the Federal Aviation Administration (FAA) to fly its Prime Air delivery drones, "a milestone that allows the company to expand unmanned package delivery."

The story goes on:

"The approval will give Amazon broad privileges to 'safely and efficiently deliver packages to customers,' the agency said. The certification comes under Part 135 of FAA regulations, which gives Amazon the ability to carry property on small drones 'beyond the visual line of sight' of the operator.

"Amazon said it will use the FAA’s certification to begin testing customer deliveries. The company said it went through rigorous training and submitted detailed evidence that its drone delivery operations are safe, including demonstrating the technology for FAA inspectors."

The story notes that "Amazon began testing delivery drones in 2013, aiming to drop off packages at customers’ doorsteps in 30 minutes or less."

Published on: September 1, 2020

The Wall Street Journal reports this morning that "proceedings for the eviction of retail tenants are picking up across the country as courts reopen and states’ moratoriums on evictions are expiring or getting curtailed as the economy reopens.

"In Miami, a luxury-shopping-center landlord began legal proceedings to evict Saks Fifth Avenue two weeks ago for nonpayment of rent amounting to $1.9 million as of early July.

"In other parts of the country, smaller retail landlords also have filed lease termination and eviction notices to restaurants, bridal shops, entertainment operators and co-working tenants that haven’t paid rent and weren’t able to come to mutually agreeable modifications to their leases. Before the pandemic, most of these disputes end up getting resolved before the sheriff throws them out, but lawyers said they are seeing higher volumes of disputes which could lead to more evictions."

The story goes on:  "While overall retail rent collections have improved to 77% in July from around 54% in April, some tenants, particularly from the apparel, fitness and theater categories, have continued to struggle with payments, according to data from Datex Property Solutions, a real-estate data firm that tracks rent collection on thousands of properties across the country.

"During the coronavirus-shutdown period that started mid-March and extended to as late as August in some cities, tenants have implored their landlords for deferrals and lower rents to stay in business … Landlords said they have modified tens of thousands of leases over the past few months, including deferrals or discounts in exchange for lease extensions or other concessions, such as the removal of clauses that prohibited certain types of tenants in the neighboring space, such as direct competitors or other uses of common-area space. But for some, negotiations reached a stalemate and landlords said they have no choice but to resort to litigation."

Published on: September 1, 2020

Random and illustrative stories about the global pandemic and how businesses and various business sectors are dealing with it, with brief, occasional, italicized and sometimes gratuitous commentary…

•  In the United States, we now have 6,211,816 confirmed cases of the Covid-19 coronavirus, with 187,737 fatalities and 3,456,263 reported recoveries.

Globally, there have been 25,656,610 confirmed coronavirus cases, 855,146 deaths, and 17,955,331 reported recoveries.

•  From the Wall Street Journal:

"The U.S. recorded its smallest number of daily coronavirus cases in months, continuing a slowdown in new infections."

However, Arthur Reingold, head of the division of epidemiology and biostatistics at the School of Public Health at the University of California, Berkeley, tells the Journal that it is "highly plausible" that "cases would increase in coming months compared with August as schools reopen and people tire of precautionary measures such as social distancing."

•  The Washington Post reports that "the country’s known cases have more than tripled since June 1 as the pandemic accelerated beyond the East Coast, and over the past week infections have trended upward in parts of the Midwest, including Iowa, Kansas, Nebraska, Minnesota and the Dakotas."

•  The New York Times elaborates:

"As U.S. cases decline elsewhere, the Midwest sees a worrying spike.

"Reports of new cases have fallen significantly around the country since July; they are now flat in 26 states and falling in 15 others. But in nine states, cases are still growing, and in some, setting records — especially in the Midwest.

"Iowa, Kansas, Minnesota, North Dakota and South Dakota all added more cases in a recent seven-day stretch than in any previous week of the pandemic. Together, they reported 19,133 new cases in the week ending Sunday, according to a New York Times database — 6.4 percent of the national total, though the five states are home to only 4 percent of the population. In each, some of the biggest surges in new case numbers have come in college towns.

"The Dakotas, which had made it through the summer without suffering the big increases seen in some other parts of the country, have both recently set single-day case records. On Saturday, South Dakota added 425 new cases and North Dakota added 374, their worst days yet. Grand Forks, home of the University of North Dakota, has one of the highest per capita growth rates in the country.

"Iowa’s recent outbreak, so serious that it prompted Gov. Kim Reynolds to shut down bars and nightclubs in six counties, has been most pronounced in college towns like Ames and Iowa City, which reported greater numbers of new cases per capita over the past two weeks than any other metro area in the country."

•  From the Los Angeles Times, a report on how Gov. Gavin Newsom has unveiled a new plan "to rekindle a California economy decimated by the COVID-19 pandemic, a four-tier system in which counties must show consistent success in stemming the transmission of the coronavirus before allowing businesses greater flexibility to reopen and group activities to resume.

"In doing so, Newsom appears to be taking a far more cautious approach than his first effort in the spring, when his decision to rapidly ease restrictions led to such a major surge in cases that he ordered another statewide shutdown … For most of California, the new rules won’t result in many immediate changes because restaurant dining, religious services, gyms and fitness centers, movie theaters and museums will remain restricted to outdoors only in the vast majority of counties in the state."

"We’re going to be more stubborn this time," Newsom says.  "This more stringent, but we believe more steady, approach."

•  The Washington Post reports that Bali has announced that it will not allow foreign tourists until 2021, with experts saying that such dramatic moves may be necessary in order to insure - to the greatest extent possible - long-term survival.

I'm glad the airlines have started eliminating change fees. I was really looking forward to seeing Bali for the first time...

But seriously, Bali won't be alone.  Count on it.

•  One day after United Airlines announced that it was eliminating change fees on most of its flights, American Airlines and Delta Air Lines followed suit, making the  issue of fees a "new competitive battleground among airlines … The sluggish rebound in passenger demand since April and concerns that Covid-19 cases could rise during the fall and winter have pushed airlines to identify new competitive strategies. The carriers are seeking to provide passengers with more reassurance about returning to the skies. Southwest Airlines Co. has never charged baggage or change fees, a policy it has used as a marketing tool."

•  USA Today reports that "Walt Disney World is postponing the reopening of its Polynesian Village Resort until next summer, as the coronavirus pandemic continues to hammer hotel occupancy in central Florida.

"Disney has postponed the reopening of the Polynesian Village multiple times. As of late June, it was supposed to reopen on Aug. 12; as of July, it was supposed to reopen on Oct. 4.

"Two other Disney World Resorts, the Beach Club Resort and BoardWalk Inn, will remain closed indefinitely."

The story points out that "hotel occupancy in Orlando continues to be among the lowest in the country, according to STR, which tracks hotel occupancy data. As of the week ending Aug. 22, occupancy in the Orlando market was 29.3%, well below the national average of 48.8%."

•  From the Boston Globe:

"The best Boston sports bar of all time closed for good late Sunday night. The Fours on Canal Street is the latest victim of COVID-19 … The Closing of the Fours was inevitable. It can’t be easy to pay the rent when you own a neighborhood joint across the street from Boston Garden and you rely on crowds from Bruins games, Celtics games, and rock shows. No gatherings means no games or concerts and that meant nobody bellying up to the bar or sitting in a nice wooden booth at the two-story sports bar/restaurant in the shadow of the Causeway Street barn.

"This one hurts. And not just among the thirsty/freeloading sports media crowd. The Fours was a sports bar for fans, players, coaches, owners, and team personnel. It had the greatest collection of sports memorabilia in the region.

"When news broke of The Fours’s demise, Richard Johnson, curator of the New England Sports Museum said, 'The apocalypse has officially begun. The beloved flagship is closing'."

Published on: September 1, 2020

Winery Kendall-Jackson and United Way Worldwide announced "the launch of the Grocery Worker’s Relief Fund to provide emergency relief for the immediate needs of frontline grocery store workers."

Some context from the announcement:

"In the United States, the grocery industry employs more than 2.7 million people. According to the recent Washington Post article about the current state of employees in the grocery industry, workers are feeling 'overworked and overwhelmed' and are facing unique challenges.

"In an effort to show appreciation to grocery workers for their contributions during this crisis, Kendall-Jackson searched for a national relief fund that directly benefited the workers, but one did not exist. As a leading producer in the wine industry, Kendall-Jackson embarked on an opportunity to partner with United Way Worldwide to establish an emergency fund."

Kendall-Jackson has pledged an initial $200,00 to the fund,  and committed to $2 million by 2030.

According to the announcement, "The Grocery Worker’s Relief Fund will raise funds to alleviate the challenges these essential workers are facing. The fund will offer emergency support, mainly in the form of cash cards, to provide urgently needed relief, and will connect workers with holistic local help through the 211 network, a national social services helpline. The Grocery Worker’s Relief Fund is available to any individual currently employed by a grocery store, including retailers with grocery departments, to apply for eligibility for financial assistance."

In a prepared statement, Barbara Banke, chairman of Jackson Family Wines, owner of Kendall-Jackson, said, "They have been frontline heroes during the pandemic, risking their health and safety for all Americans. By launching the Grocery Worker’s Relief Fund, we can provide immediate relief to the workers who have supported us for nearly 40 years and need it now, more than ever."

Published on: September 1, 2020

With brief, occasional, italicized and sometimes gratuitous commentary…

•  Wired reports on how both Amazon and FedEx - each of which has developed "personal delivery devices," or robots that can navigate streets and sidewalks to make deliveries - are investing in lobbying efforts to get bills passed around the country that will allow the devices to be used.

According to the story, "Amazon and FedEx seeded and backed … bills permitting delivery robots in more than a dozen states this year. At least six have become law."

Wired goes on:  

"FedEx’s bot, which is called Roxo and looks like a small refrigerator, has completed on-road tests in four cities. Scout, built to deliver Prime packages, also is testing in four cities. The companies present similar visions: A delivery van full of robots would arrive in a neighborhood, and robots would travel the 'last mile' to customers’ doorsteps without human aid."

Both companies concede that the delivery robots are not quite ready for prime time.  But they're getting closer, hence the lobbying efforts.

I think the thing I find most distressing about these robots is their speed.  They apparently move at an approximate speed of six miles per hour, which means they are doing a 10-minute mile.  When I go jogging, my aging knees allow me to do 12-minute miles.  If I'm out for a run and one of these things pass me, I might cry.

•  CNBC reports on how Best Buy this month "will start testing a ship-from-store hub model. About 250 stores — about a quarter of its approximately 1,000 stores — will be specially designated to handle a higher volume of packages, though all stores ship online orders."

CEO Corie Barry said that "the new approach will help speed up orders and improve efficiency over the holidays and beyond.  She said the role of stores has changed but not diminished, and she described them as a 'unique and powerful asset.'  About 60% of Best Buy’s online orders are either picked up at stores or by curbside or shipped from them."

Published on: September 1, 2020

With brief, occasional, italicized and sometimes gratuitous commentary…

•  Costco announced that it is "committing $25 million to an innovative new impact investment fund that will fuel Black-led financial institutions and community development efforts.

"The Local Initiatives Support Corporation (LISC) rolled out the Black Economic Development Fund this summer, encouraging corporations to make investments specifically designed to improve economic opportunity for Black Americans. By doing so, the fund seeks to help close the racial wealth gap, which could cost the U.S. economy as much as $1.5 trillion by 2028 if not addressed."

"We are thrilled to be a part of an investment strategy that will help some of the communities where we operate in the U.S.," said Craig Jelinek, President and CEO of Costco. "With LISC, we are supporting a more inclusive economy, to break down race and class as barriers to opportunity and growth."

•  Reuters reports that bankrupt JC Penney has reached an impasse in its negotiations with landlords, "pushing the department store to the brink of collapse unless it can reach a deal within days to be taken over by lenders."  September 10 has been set as a deadline for coming to an agreement that would include "a deal with Simon and Brookfield to take over the company’s retail operations."

I cannot imagine why anyone woulds want JC Penney's retail operations.

•  The Houston Chronicle has the story of how "the Midtown Sears is being converted to a tech hub. Crews are tearing down the Memorial City Sears in west Houston. Now, the free-standing Sears on North Shepherd, the last active Sears department store in the city, is set to close Aug. 30.

"Once the nation’s dominant retailer — and now a case study in how not to adapt to a changing environment — Sears may soon fade from Houston’s memory. But its real estate is being rethought for the future."

The story goes on:  "Crews tearing down the former Sears building at Memorial City Mall are making way for a new outdoor “lifestyle” and retail district — phase one in a redevelopment process that focuses on consumer experience and walkability. In Midtown, Rice University readies to transform a former Sears into a $100 million tech hub, called the Ion, signaling another tectonic shift in the economy.

"Elsewhere, the former Sears store in the Westwood Mall is now a car dealership, while the one at The Woodlands Mall lives on as a Nordstrom."

In other words, these spaces are ABS … Anything But Sears.

Published on: September 1, 2020

•  Fortune reports that former Rite Aid Corp. Chief Executive Officer John Standley has been hired to run Walgreens Boots Alliance’s US business, which includes some 9,300 stores.

The story notes that "Walgreens is trying to revitalize its business amid broader shifts in the U.S. retail and health-care businesses. CVS Health Corp., its fiercest rival, purchased a health insurer, while Walgreens has inked a slew of smaller partnerships."

Published on: September 1, 2020

•  JohnThompson, the first Black coach to take his team to an NCAA men’s basketball championship, has passed away.  He was 78.

The Associated Press writes that "Thompson went to Providence College as one of the most touted basketball prospects in the country and led the Friars to the first NCAA bid in school history. He graduated in 1964 and played two seasons with Red Auerbach’s Celtics, earning a pair of championship rings as a sparingly used backup to Bill Russell.

"One of the most celebrated and polarizing figures in his sport, he took over a moribund Georgetown program in the 1970s and molded it in his unique style into a perennial contender, culminating with a national championship team anchored by center Patrick Ewing in 1984 … Along the way, Thompson said what he thought, shielded his players from the media, and took positions that weren’t always popular. He never shied away from sensitive topics — particularly the role of race in both sports and society — and he once famously walked off the court before a game to protest an NCAA rule because he felt it hurt minority athletes."

And, the AP writes, "A stickler for academics, he kept a deflated basketball on his desk, a reminder to his players that a degree was a necessity because a career in basketball relied on a tenuous 'nine pounds of air'."

Published on: September 1, 2020

Yesterday we reported and commented on Powell's Books decision to stop selling online via Amazon's third-party marketplace.  This prompted one MNB reader to challenge:

I find your comment "I'm not entirely persuaded that this is the best business move..." in regards to Powell's ceasing sales on Amazon's platform, very counter to previous statements.

You consistently decry that supermarkets should not outsource their online services (i.e. Instacart) and should differentiate themselves by developing and owning their own customer interface, service, and last mile delivery, which is extremely expensive and difficult to do. Yet here is someone doing that exact thing by pulling back from the behemoth.  It's not always the best business decision to work with these other services, but many times its the only thing that some retailers can do to save share, jobs, and ultimately buy them enough time to figure out a solution.

I applaud Powell's for taking this step. It is very difficult, and may impact their sales and profitability. However, I would figure that they are probably working out how they can still provide digital sales through other marketplaces that aren't also stealing their customers away in droves.

You're right.  I was wrong and inconsistent … quia peccavi nimis cogitatione, verbo et opere: mea culpa, mea culpa, mea maxima culpa.

Regarding our pandemic coverage, one MNB reader wrote:

I am not a math major. 

But the numbers that you presented this morning show a 0.03 death rate from the C virus in the US and a 0.03 death rate globally. 

Again, I am not a math major but I think I got this right.

These are not pandemic numbers. 

The Spanish Flu Pandemic killed 20 to 30 percent of the world's population. 

My wife works in the ER at the main county hospital in Milwaukee.  Milwaukee built an entire off site structure to take care of the coming masses of people coming in with C.

No one was ever treated there.

She tested positive for Covid in June and our entire family had to quarantine for three weeks at home.  We all lost wages and time working for a month.

I am not saying that the virus doesn't exist. Because it does.

Just something to think about. 

First of all, I looked up "pandemic," and it has nothing to do with mortality rates.  It does have to do with global spread across a numb er of nations.

Second, I would hope that we have lower mortality numbers than in 1918.  I mean, if we can't do better than that, we ought to just give up and accept a dystopian future.  

But the US is losing about one thousand people a day.  That's 25 percent of the global daily deaths, though we have about four percent of the global population.  That strikes me as worthy of attention.

Third, lucky Milwaukee.  Do us all a favor and keep all the ventilators and PPE you didn't use, and send them to the next place that has an outbreak.  (For the record, Wisconsin has been fortunate in terms of the pandemic.  It ranks 28th among the states in total deaths, with 1,122.)  But keep in mind that one of the reasons that you did so well is that places like New York, California and Massachusetts went first and taught everyone else how to deal with the coronavirus.

We all appreciate your wife's service in an ER, and I am sorry that you all had to quarantine.  But one of the reasons that Milwaukee and Wisconsin have such low numbers is because you quarantined.

Just something to think about.

Regarding Publix's decision to end the use of one-way aisles, which were instituted to allow for ease of physical distancing, one MNB reader wrote:

I’m in Publix stores often and customers often violated the floor arrows.  I never saw Publix employees correcting customers either.  To me, this decision by Publix is a “non-event."

I still think that Publix is premature in making this decision.  Florida still ranks third among the states in terms of total cases, and fifth in terms of total deaths.  I might've given this a little more time.

As for customers not paying attention to the directional signs … this speaks to customers' being unwilling to accept minor inconveniences as a way of fighting the coronavirus.  I see the same thing in stores I visit, and I find it appalling … and a reflection of American exceptionalism - exceptional selfishness.  Sort of like not wanting to wear a mask.

Responding to yesterday's FaceTime video, one MNB reader wrote:

This video reminded me of my store visit today to Whole Foods.  My wife accompanied me and I was explaining certain aspects (she has allowed me to do the shopping in pandemic times to help cut down on household members being exposed), of how things have changed (newspaper hard copy vs online).

I counted more Amazon pickers for shopping (pickup or delivery), than actual shoppers.  It was lunchtime so regular folks during their lunch were well outnumbered by pickup/delivery employees which caused quite a few people in the store. I see this in Frys, Albertsons/Safeway and Sprouts too, but not to the degree that the the store was overwhelmed. I explained that accounts are designing ghost stores to help alleviate this but we're not quite there yet. I also commented about the increased labor it must take to keep the store stocked. 

Second, I showed her the "old" self help section, which their were empty islands of trays where you used to dish out meals, sides, salads, etc., that no longer are used (tv listings). Meat section, deli, untold areas not being utilized,  at least for now.

It had been awhile,  but she really didn't recognize the store so much.  Sort of an uncomfortable feeling. 

We are not much for ordering food on line for pickup/delivery as being in the industry I like "being there". But for her it was a "wake up call"!

Regarding the movies by some companies to make it easier for people to vote on November 3, MNB reader Tim McGuire wrote:

It’s disappointing that in the country that claims to be the cradle of democracy it is up to the good intentions of individual companies to make sure their employees have time to exercise their right to vote.  Canada’s Election Act has mandated for many years that all employees must be given 3 consecutive hours to vote while the polls are open, and that no pay be deducted for that time.  It doesn’t mean that every employee gets special time off - if your shift normally ends at 5:00 pm and the polls in your region are open until 8:00 pm then no special accommodation is required.  But if your shift doesn’t provide 3 uninterrupted hours of poll time, the employer is required to adjust your hours to accommodate voting.  For countries run by popular vote, shouldn’t the ability to vote be a basic right for every eligible voter?  Even better would be Australia’s laws that mandate every eligible voter must vote - even if they spoil their ballot or write in a candidate they are required to cast a ballot or face a small fine.  Our ancestors fought and died for the right to vote - use it, don’t lose it.

Yesterday's "Eye-Opener" featured a wonderful email from an MNB reader who wrote about being a transgender woman in transition working in the modern supermarket industry.  

You can and should read the piece here.

MNB reader Alison Kenney Paul responded:

Bravo – to the writer who wrote with her true story and expressed so many important truths in doing so -- and to you for printing it and more so, for LEADING with it – when people bring their whole selves to work (and to anything for that matter), it benefits everyone – and many times, we will never know who.

Thanks.

One MNB reader responded:

In response to the letter you shared from the transgender woman in the grocery business, I am glad to be in a world in which she is able to become the person she was born to be.  The are people who disagree, but my optimism convinces me that there are far more people that support her than do not.

From MNB reader Mike Peterson:

Wow…that is one of the best personal testimonies I have ever read and that you have published.  I think she speaks to what others are feeling & wish they could express, whether they are transgender or people of color.

Thanks for publishing her response – I share you & Michael’s encouragement and message of love.

And from MNB reader Jesse Sowell:

I can't tell you how much I appreciated the note you printed as today's Eye-Opener, for many reasons.

First and foremost, I am inspired and humbled by the courage of the writer. I have been privileged to get to know several transgender people as friends, and have seen that living as their true selves can be a difficult path to walk, marked by incredible bravery and honesty but many challenges. I wish the writer well, and am hopeful that she will find the welcome and true acceptance that she deserves, in our industry and in her community. I would love to meet her someday.

Thank you for making MNB more than just another industry newsletter. You're really good at writing an industry newsletter. But you've also built a community around MNB that allows for this kind of sharing, that can make each of us more and better, and I'm glad to be a part of that.

Me, too.