Published on: October 8, 2020
Some 2800 businesses have closed in New York City since the pandemic hit the US, but some new businesses have opened and are doing well - a testament to how some retailers understand the notion of offering something different to see, hear and smell. Which, KC, suggests, ought to be standard operating procedure.
Published on: October 8, 2020
TechCrunch has a story about how eMarketer is predicting that "Amazon’s delayed Prime Day sales event will top last year’s by bringing in an estimated nearly $10 billion in worldwide sales when it runs later this month," suggesting that "consumers will continue to spend heavily on e-commerce and seek out deals ahead of the 2020 holiday season, benefitting the major sales event."
The US, the projections suggest, will account for more than $6 billion of that number.
"This is ahead of what Prime Day achieved in years past," TechCrunch writes. "In 2019, the sales event delivered $6.93 billion in sales … with $4.32 billion from the U.S. Total Prime Day sales in 2016, 2017 and 2018 were at $1.5 billion, $2.47 billion and $4.13 billion, respectively."
These numbers seem to be pretty much in line with what other organizations are predicting.
Me, I'd bet the over.
But let's be clear. All of these projections are even more speculative than in the past, since we really have no idea how the pandemic will impact consumers' buying habits.
A high percentage of these dollars, I'd guess, will come out of what we'd think of as traditional holiday spending. So it'll be interesting to see how those numbers are rejiggered in a few months.
Published on: October 8, 2020
Kroger announced this morning that it is launching "two on-premise kitchens, respectively at stores in Metro Indianapolis, IN and Metro Columbus, OH. Developed in partnership with ClusterTruck, a technology start-up that operates delivery-only restaurants, the kitchens will provide a variety of freshly prepared meals on-demand with no service or delivery fees."
According to the announcement, "the new concept will repurpose approximately 1,000 square feet at each participating store to create a culinary space for ClusterTruck staff to prepare meals for quick delivery and in-store pickup. Customers can order from a menu of more than 80 meals, spanning a variety of ingredients – and best characterized as food quality you can get at a sit-down restaurant with the personality of street food."
ClusterTruck is defined in the announcement as a "pioneer in the ghost kitchen space, building a proprietary software system that creates custom algorithms to optimize kitchen and delivery operations and removes the pain points of the third-party delivery model … The expansion of Kroger's relationship with ClusterTruck reflects the retailer's ongoing investments in providing a variety of prepared fresh food options and creating a seamless experience for customers. Kroger experienced a 127% digital sales lift in second quarter 2020, as customers continued to use digital ordering options, including pickup, delivery, and ship to home."
I like this idea a lot - it provides both functionality and theater, which is a pretty good combination.
I must admit that I'm more enthusiastic about the concept that Lunds & Byerlys launched a couple of weeks ago, beginning a rotation of actual food truck operators, judged to be be high level and aspirational in their approach to food, though several of its stores. For me, this has a little more grit and authenticity to it … but I'm a big fan of ghost kitchens as a concept that can help transform the foodservice space, and think Kroger deserves kudos for developing this alliance.
Published on: October 8, 2020
In this case, it seems, the early birds actually did get the worms.
Incisiv is out with its second annual Grocery Digital Maturity Benchmark study, concluding that " the top 25% of the most digitally mature retailers grew 19%, or 2.4 times the industry average … Those who invested in digital early on are now reaping the benefits of higher sales growth."
The study goes on: "With the increased importance of new fulfillment methods during COVID-19 shutdowns, Tesco outperformed BJ’s Wholesale Club, causing the retailer to jump from its No. 30 ranking in 2019 to No 1 this year. Another retailer recognized for its achievements is Publix, moving from No. 46 in 2019 to the third-most mature retailer in 2020. Brookshire Grocery Company debuted within the top five this year, further emphasizing the competitive nature of smaller players in the new retail landscape."
Some other findings:
• The biggest gains were made in onsite search and navigation, with 11% improvement in the ability to search category-specific options, and 13% improvement in the ability to view deals in the primary site menu.
• The 2020 benchmark showed 37% improvement in the ability to reorder from previous order history, and 16% improvement in the ability to see promotions while in the shopping cart view.
• The 2020 benchmark also found a 20% gain in grocers offering free delivery with a minimum order value. In addition, the majority of groceries added curbside pick-up in the US market.
• Digital maturation in 2020 pointed to an 18% gain in the ability for customers to save payment preferences and card details, and a 20% improvement in the number of grocers facilitating easy returns and refunds of products purchased online.
In order, the top 10 retailers in the in the 2020 Grocery Digital Maturity Benchmark are Tesco, BJ's Wholesale Club, Publix, Brookshire Grocery Co., Target, Costco, Kroger, Albert Heijn, Schnucks, and Whole Foods.
Published on: October 8, 2020
Random and illustrative stories about the global pandemic and how businesses and various business sectors are trying to recover from it, with brief, occasional, italicized and sometimes gratuitous commentary…
• In the United States, there now have been 7,776,796 confirmed cases of the Covid-19 coronavirus, resulting in 216,788 deaths and 4,984,154 reported recoveries.
Globally, there have been 36,429,108 confirmed coronavirus cases, with 1,061,144 fatalities and 27,432,096 reported recoveries.
• Axios reports that "the pace of coronavirus infections increased last week in 23 states plus Washington, D.C., and only declined in four states and Puerto Rico," leading to the not unreasonable conclusion that "the virus is not under control, or anywhere close to it."
This is "especially true in Washington, D.C., where the outbreak tied to the White House appears to be increasing the caseload. The District experienced a 26% increase last week, rising from about 40 new cases per day to about 50 … Nationwide, cases were up 6%, compared to the week before. The U.S. is now averaging roughly 43,700 new infections per day."
Axios goes on: "Just four states — Hawaii, Kansas, North Carolina and South Carolina — saw the pace of new infections slow over the past week.
In Wisconsin, the story says, "Gov. Tony Evers announced on Wednesday that a field hospital will be opened at the state fairgrounds near Milwaukee to expand care for coronavirus patients after hospitalizations more than doubled in the past month … Health officials attribute the state's increase to university and K-12 school reopenings and overall public fatigue on mask-wearing and social distance practices."
Also: "Testing was largely unchanged over the past week. The U.S. is conducting about 927,000 tests per day."
• ABC News reports that "the coronavirus outbreak has infected '34 White House staffers and other contacts' in recent days, according to an internal government memo, an indication that the disease has spread among more people than previously known in the seat of American government.
"Dated Wednesday and obtained by ABC News, the memo was distributed among senior leadership at FEMA, a branch of the Department of Homeland Security and the agency responsible for managing the continuing national response to the public health disaster."
It was pointed out on several news platforms that over the past seven days, the White House alone has been responsible for more Covid-19 infections than Taiwan or New Zealand.
• The New York Times has a story about how retailers are trying to calculate how many turkeys to buy this year, since "all indications are that the holiday gatherings that used to bring together dozens of people to share one or two turkeys will be scuttled in favor of smaller celebrations. That could lead to a run on small turkeys, a higher-than-usual demand for parts like whole breasts, and higher prices across the board. And although no turkey farmer likes to hear this, some cooks may simply decide to go all in on a big chicken."
The calculations, according to the Times, "are tricky. Contracts to buy the baby turkeys called poults are often written a year in advance, and growing those poults to the proper size for the market takes months. Even if farmers wanted to raise smaller turkeys, it’s not that easy. Genetics, coupled with economically driven feed formulas, produce birds that mature at a predetermined size in a set amount of time."
Won't be an issue in my house. By popular demand, we eat steak on Thanksgiving, accompanied by short rib mac and cheese.
• The Associated Press reports that "despite increasing coronavirus cases across the U.S., Hawaii officials hope to reboot tourism next week by loosening months of economically crippling pandemic restrictions, including a mandatory 14-day quarantine for all arriving travelers.
"The plan, which was postponed after the virus surged in the summer, will allow Hawaii-bound travelers who provide negative virus test results within 72 hours of arrival to sidestep two weeks of quarantine.
"But the Oct. 15 launch of the pre-travel testing program is causing concern for some who say gaps in the plan could further endanger a community still reeling from summer infection rates that spiked to 10% after local restrictions eased."
• From the Boston Globe:
"With Boston’s coronavirus positivity rate rising to 4.1 percent, Boston officials announced Wednesday they will delay the start of in-person learning for the next phase of students who were slated to return on Oct. 15, but will continue in-person classes for students who already have returned.
"Students in the Oct. 15 cohort — 3-to-5-year-olds in grades K0, K1, and K2 — will now start no sooner than Oct. 22, Boston Mayor Martin J. Walsh said during a press conference. City officials will reevaluate the coronavirus data before that date to determine whether it is safe for students to begin in-person instruction."
• The New York Times has a story about XpresSpa, best known "for offering manicures, pedicures, massages and waxing services at 25 airports in the United States and around the world, where travelers with some time between flights could get themselves spruced up."
This week, however, "the company began offering a rapid molecular coronavirus test, manufactured by Abbott Laboratories, that will return results within 13 minutes at Kennedy International and Newark Liberty International airports under the name XpresCheck … The company’s move comes as the number of people flying remains low — on Tuesday the Transportation Security Administration screened about 590,000 people, compared with more than two million on the same date in 2019 — whether out of fear of air travel or because the 14-day quarantine requirements in some states make travel unattractive.
"In recent weeks, airlines including United, Hawaiian Airlines and JetBlue, as well as airports, said they would begin offering coronavirus tests; with a negative test often meaning that the traveler can skip quarantine at their destination."
• CBS Sports reports that "as the NFL works not only to reduce the spread of COVID-19 between infected players but investigate potential team violations of COVID protocols, it's not out of the realm of possibility that the league could put a hold on the entire 2020 season.
"Asked Wednesday on NFL Network whether a temporary pause to the regular-season schedule is an option amid continued outbreak in Tennessee, as well as additional COVID cases in Las Vegas and New England, the NFL's chief medical officer confirmed as much."
• From the Los Angeles Times:
"Gov. Gavin Newsom said Wednesday that California theme parks have to remain closed for now — a stance that has put him at odds with park owners such as Walt Disney Co. and some legislators … California, home to the original Disneyland and Comcast Corp.’s Universal Studios, is among the last states to reopen its theme parks. Florida began letting them reopen in June, and Disney parks from Shanghai to Paris have also opened to guests after closing for several months this year due to the coronavirus."
Published on: October 8, 2020
The Seattle Times reports that "Bartell Drugs, one of the oldest companies in Washington state and one of the most familiar names in the Seattle business community, is being sold. The 67-store regional drugstore chain, which has been owned by the same family since its founding in Seattle’s Central District in 1890, will be acquired by Rite Aid for $95 million, the companies announced Wednesday."
According to the story, "Pennsylvania-based Rite Aid, which has about 2,500 stores in 19 states, including 69 in and around Seattle, will keep the Bartell name on the stores. It disclosed no plans to close stores or cut any of Bartell’s about 1,600 retail staff. The sale is expected to close in December."
Bartell's ownership said it was "the only answer" as competition got tougher; Rite Aid said that "Bartell’s presence across neighborhoods was a big part of the attraction."
Published on: October 8, 2020
• From USA Today:
"Sam's Club is the latest retailer to announce it is expanding its holiday sales amid the coronavirus pandemic.
"The warehouse club announced Thursday that instead of one-day sales, this year's sales – including one in November and another in December – will each last nine days.
"The Black Friday sale also will be longer at 10 days, instead of four, the duration in 2019, the company said."
Published on: October 8, 2020
With brief, occasional, italicized and sometimes gratuitous commentary…
• Interesting piece on CNBC about how Levi Strauss compensated for a double-digit drop in third quarter revenue by growing its e-commerce business - online sales were up 52 percent, accounted for eight percent of total revenue, and allowed the company to turn a profit.
CEO Chip Bergh told CNBC that "the pandemic has compressed what might have taken 5 or 10 years and it’s compressed it into a very, very short window, and I have to say the acceleration of our e-commerce business has been one of the beneficiaries of that."
One of Levi Strauss's main goals has been to grow both instore and online sales, but the core of this strategy has been direct to consumer, as opposed to selling through other venues.
It is a good lesson for both retailers and suppliers because it points to how important it is to develop direct relationships with shoppers, using proprietary products and services to deepen and strengthen those connections.
Published on: October 8, 2020
With brief, occasional, italicized and sometimes gratuitous commentary…
• From the Wall Street Journal:
"Six current and former chicken-industry executives were indicted on price-fixing charges, expanding the U.S. government’s antitrust prosecutions in the $65 billion poultry industry.
"The charges, made public Wednesday, target executives from several different chicken companies, including Pilgrim’s Pride Corp. , and provide new details about the alleged conspiracy. Prosecutors said the price-fixing took place from 2012 into early 2019, a longer period than the Justice Department previously had alleged.
"Among the people charged is Bill Lovette, the former chief executive of Pilgrim’s Pride, who retired in March 2019."
The Journal goes on: "The new charges deepen the department’s efforts to address alleged price-fixing and bid-rigging in an industry that supplies billions of pounds of chicken nuggets, breast filets and wings to U.S. restaurant chains and grocery stores annually. Prosecutors made public in June indictments of four senior industry executives on similar charges."
• The Partnership for a Healthier America (PHA) and Ahold Delhaize USA announced what they are calling "a major commitment to increase healthier food sales and publicly disclose the percentage of food sales from healthier options. The announcement marks the largest pledge to increase healthier food sales and transparency from a grocery retailer in the United States.
The announcement continues: "Beginning in 2020 and on an annual basis, Ahold Delhaize USA will publicly disclose the percentage of total store food sales generated from all products, both private and national brand, that achieve one, two, or three stars through the Guiding Stars program, creating greater transparency around healthier food sales … By June 2025, at least 54% of private brand food sales (private brand products and unbranded bulk items) across all Ahold Delhaize USA brands will achieve one, two, or three stars through the Guiding Stars program."
• Restaurant chain Ruby Tuesday filed for Chapter 11 bankruptcy protection yesterday, saying it plans to close 185 locations as it looks to put its finances in order and eliminate debt. The move will leave it with 236 owned-and-operated restaurants, as well as some franchisee-owned units.
USA Today writes that "Ruby Tuesday had been struggling for years with increased competition from fast-food and fast-casual companies, as well as reduced traffic to its mall-based locations and the rise of new food delivery options."
In other words, another case of acceleration of existing issues, as opposed to problems created by the pandemic.
• Gelson's announced that it will close all of its 27 Southern California stores on Black Friday this year, giving employees off on the day after Thanksgiving "as a gesture of appreciation to all their employees and associates for their outstanding commitment during the Covid-19 pandemic. Stores will also close early on Thanksgiving Day, Thursday November 26th."
Employees working on Thanksgiving get paid triple time; Friday will be an unpaid day off, though employees "do have 6 other days that week to get their shifts in so they are able to get all their normal hours," the company said.
Published on: October 8, 2020
• UK-based Tesco said yesterday that it has hired Imran Nawaz, most recently CFO of Tate & Lyle and a former Mondelez executive, to be its new CFO.
Published on: October 8, 2020
…will return.
Published on: October 8, 2020
• In the National League Divisional Series, the Atlanta Braves beat the Miami Marlins 2-0 to take a 2-0 lead in their best-of-five series.
Los Angeles Dodgers defeated the San Diego Padres 6-5, taking a 2-0 game lead in their best of five series.
• In the American League Divisional Series, the Oakland Athletics defeated the Houston Astros 9-7, staying alive as the Astros maintained a 2-1 game lead in their best-of-five series.
And the Tampa Bay Rays beat the New York Yankees 8-4, taking a 2-1 game lead in their best-of-five series.
