business news in context, analysis with attitude

Published on: October 23, 2020

It is Friday, and so KC wants to recount two conversations from this week that struck him as funny … and reflective of some essential truths.

Published on: October 23, 2020

by Kevin Coupe

Reuters this morning reports that Apple is launching a new bricks-and-mortar format - an Apple Express store that "has a wall built in front of the main store with sales counters protected by plexiglass and a few shelves of accessories such as phone cases and AirPods. Customers make an appointment to pick up orders placed online or interact with Apple’s technicians for customer service."

There currently are 20 operating, with 50 expected to be up and running by the holidays.

The stores will not have the built-for-browsing ambience that have made Apple Stores so distinctive and profitable since their inception almost two decades ago.

The story suggests that the format is designed to help Apple answer the potential challenges created by a spike in Covid-19 infections that has the potential of closing many of the malls where it has stores.  In addition, Apple is launching the new iPhone 12, and it understands that the current state of physical retail has the potential of depressing sales to some degree.

It makes sense to find new ways to connect to customers in these difficult times.  As notable a success as the Apple Store format has been, theres no question that the combination of public health issues and a broader move away from mall shopping by consumers made coming up with a new format almost a requirement.

That's a lesson that more retailers ought to consider - testing new formats that both new and existing customers may find more relevant to current circumstances.

I will say this though.  While I'm glad to have the Apple Express option, when I wanted to order the iPhone 12, I did so using my iPhone 11.

Actually, to be honest, I handed my iPhone 11 to my 26-year-old daughter, told her what model and color I wanted, and she did it for me in about three minutes.

That was an Eye-Opener.

Published on: October 23, 2020

The Washington Post reports that Target, hoping to reduce the risk of contracting Covid-19 in its stores during a crowded holiday season, will use a new reservation system for customers.

According to the story, "During the holidays, shoppers can visit Target.com/line to see if there is a line outside their local store and reserve a spot. They’ll be notified when it’s their turn to shop."

The Post writes that "retailers have adopted a range of protocols to minimize crowds, long lines and repeat shopping trips during the pandemic. Most large retailers offer curbside pickup and contactless checkout to accommodate social distancing, and many have scrapped such Black Friday traditions as Thanksgiving Day openings and 'doorbuster' deals to fill their stores. But shopping by appointment is uncommon among retailers."

CEO Brian Cornell said yesterday that he anticipated that the reservation system will likely only be used during the holidays, but that other pandemic-induced measures, such as "contact-free shopping, are here to stay."

Published on: October 23, 2020

From the Wall Street Journal this morning:

"Walmart Inc. sued the federal government in an attempt to strike a pre-emptive blow against what it said is an impending opioid-related civil lawsuit from the Justice Department.

"The retail giant said in a lawsuit filed Thursday that the Justice Department and Drug Enforcement Administration are seeking to scapegoat the company for the federal government’s own regulatory and enforcement shortcomings in combating the opioid crisis. Walmart said the government is seeking steep financial penalties against the retailer for allegedly contributing to the opioid crisis by filling questionable prescriptions.

"The suit names the department and Attorney General William Barr as defendants, as well as the DEA and its acting administrator, Timothy Shea. It is seeking a declaration from a federal judge that the government has no lawful basis for seeking civil damages from the company based on claims pharmacists filled valid prescriptions that they should have known raised red flags.

"Walmart, which operates more than 5,000 in-store pharmacies in the U.S., said the government’s 'threatened action would be unprecedented.'  It said the government hasn’t alleged that the company was filling altered prescriptions, or that its pharmacists had inappropriate relationships with patients or doctors."

Published on: October 23, 2020

The New York Times reports that "workers at Amazon are calling on groups around the country to help shut down Amazon warehouses temporarily on Halloween if the company does not give all its employees a paid day off to vote.

"The move is an escalation of the internal pressure being put on executives at the company, the country’s second-largest private employer.

"In the past week, more than 6,500 Amazon corporate and tech workers have supported a proposal for all workers to get a paid day off to vote … The organizing is led by Amazon Employees for Climate Justice, which has also mobilized thousands of corporate employees over the past year and a half to push the company to address its climate impact."

Published on: October 23, 2020

Saying that it for too long has been reliant on "low-productivity, high-rent stores" that largely are in malls, Gap Inc. said yesterday that it will close 350 of its Gap and Banana Republic stores in North America, or about 30 percent of its fleet.  It will leave the company with 870 stores here.

The closures, largely in malls, will be complete by the end of 2024.

The New York Times reports that once the closures take place, Gap believes that 80 percent of its revenue will come "from e-commerce and off-mall locations like outlet stores and strip mall spaces."

A decade ago, the Times notes, "there were more than 1,700 Gap and Banana Republic stores combined in North America."

Published on: October 23, 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, we now have had 8,664,365 confirmed cases of the Covid-19 coronavirus, with 228,423 deaths and 5,656,150 reported recoveries.

Globally, there have been 42,058,362 confirmed coronavirus cases, resulting in 1,143,781 fatalities and 31,213,334 reported recoveries.  (Source.)

NBC News reports that the number of new cases reported yesterday was a new record, topping the previous record set last July.

The story quotes Dr. Jay Butler, deputy director for infectious diseases at the Centers for Disease Control and Prevention, as saying that "the agency has noted a 'distressing trend' in which coronavirus case numbers are 'increasing in nearly 75 percent of the country.'

"Much of the increase is centered in the Midwest. States like Illinois, Indiana, Michigan, Minnesota, Nebraska and Wisconsin have recorded rises in case numbers in the last two weeks. Public health officials attribute the spikes, in part, to cooler weather that is forcing people indoors."

•  The New York Times reports that the US Food and Drug Administration (FDA) has "formally approved remdesivir as the first drug to treat Covid-19, a move that indicated the government’s confidence in its safe and effective use for hospitalized patients.

"The F.D.A. said the antiviral drug had been approved for adults and pediatric patients 12 years of age and older and weighing at least 40 kilograms (about 88 pounds) who require hospitalization for Covid-19, the disease caused by the coronavirus, which has killed more than 220,000 people in the United States."

The move follows the emergency use authorization granted to remdesivir back in May.

However, the Times emphasizes, the approval does not mean that remdesivir can prevent death in Covid-19 patients.

•  From the New York Times:

"A hospital in Idaho is 99 percent full, and warning that it may have to transfer coronavirus patients to hospitals as far away as Seattle and Portland, Ore. Medical centers in Kansas City, Mo., have turned away ambulances recently because they had no room for more patients. And just outside Milwaukee, a new emergency field hospital set up on the Wisconsin State Fairgrounds admitted its first virus patient this week."

The story goes on:  "At least 14 states have had more people hospitalized for the virus on a day in the past week than at any other time since the pandemic began, according to the Covid Tracking Project, and seven more states are nearing their peaks … As a whole, the nation has had more people hospitalized at earlier points in the pandemic, during surges of cases in New York City in April and in the Sunbelt in July. But the sharply rising numbers now are deeply worrisome, not least because they are testing the limits of more limited hospital systems in smaller places.

"Patients are now spread more broadly across the country, with troubling hot spots from North Dakota to Kentucky. And more people than ever are falling critically ill in rural areas, particularly in the Midwest and Mountain West, where they often must rely on hospitals with only a handful of beds."

•  Also from the New York Times:

"In something of a reversal of a dynamic that defined the summer, California’s new coronavirus case rates have fallen and stayed relatively low, even as the virus has surged in other states.

"As of Wednesday, the nation’s most populous state was averaging 3,294 new cases each day over the past week, down from a peak of more than 10,000 in late July, when Gov. Gavin Newsom ordered most indoor businesses to close once again in order to stem the tide … Today, California’s per capita rate of new cases over the past week is lower than that of all but six states."

•  NBC News reports that "Southwest Airlines announced Thursday that it will start fully booking popular routes, unblocking middle seats that it has kept vacant for months to make travelers feel safer during the pandemic.

"The Dallas-based carrier cited several studies that the airline said shows the risk of getting coronavirus on an airplane is extremely rare when everyone wears a mask. In one case, the International Air Transport Association found 44 cases of Covid-19 transmission associated with plane travel, with most recorded before airlines adopted enhanced cleaning procedures and mask requirements, according to a news release."

NBC News also cites a study "from Airbus, Boeing and Embraer found that an airplane's airflow systems, filters and seatback barriers, along with wearing a mask, make flying safer than being in another type of indoor environment."

•  The Associated Press reports that Santa Claus won't be seeing children at Macy's flagship store in New York City's Herald Square this year - for the first time in almost 160 years.

"More than a quarter of a million people come to see Santa at Macy’s in New York each year, the company said, making it hard to create a safe environment during a pandemic," the AP writes.  "Before taking a picture with the jolly old man, crowds walk in tight quarters through a maze-like Santaland that’s filled with Christmas trees, running toy trains and elves in green costumes.

"Santa also won’t be showing up at its Chicago and San Francisco stores, which have similar Santalands. But he will still appear at the end of the televised Macy’s Thanksgiving Day parade, the company said."

Published on: October 23, 2020

•  The Orange County Business Journal reports that Amazon has opened its second Amazon Fresh grocery store there, in the city of Irvine.

The first of the breed is operating in the Woodland Hills, with more scheduled for the Chicago, Illinois area.

The story says that "there’s plenty of tech used throughout the store. Amazon Dash Cart, which uses sensors and computer vision, to track what customers are pulling off shelves allows shoppers to bypass the usual checkout line. Shopping within the store is also enabled with Alexa, which lets customers build their shopping lists by adding products to their cart or from their purchase history."

•  Charged reports that Amazon has launched a new "Amazon Shopper Panel," offering members $10  a month if they will share 10 receipts during that time for purchases made at retailers other than those that it owns and operates.

According to the story, "Amazon will also encourage users to complete short surveys about the brands and products they are interested in for a chance to earn extra rewards every month.  The programme is currently opt-in and invite only, but interested users can download the app and join a waiting list."

Published on: October 23, 2020

•  Forbes reports that Asda Group in the UK - which for the moment is still owned by Walmart, though it is in the process of being sold for $8.8 billion (US) - "has partnered with popular household brands including PG Tips, Vimto, Kellogg’s, Radox and Persil to create its first sustainability test store, with a promise to shoppers that they will not pay more for greener options."

According to the story, the store has "a new plastics reduction strategy in place as well as a series of other initiatives designed to help shoppers cut back on their usage, to reuse items, and recycle. According to Asda, these initiatives together could save one million pieces of plastic per year."

Part of the approach is a “Greener at Asda Price” campaign, which is described as "a national price promise that loose and unwrapped products will not cost more than wrapped equivalents."

Published on: October 23, 2020

•  USA Today reports that fast feeder Chick-fil-A will make its Chick-fil-A and Polynesian Sauces "available to buy at retailers including Walmart, Publix and Kroger starting in mid-November.

"The sauces, available in 16-ounce bottles for $3.49 each, will initially appear in stores in Alabama, Florida, Georgia, Louisiana and Mississippi, ahead of a national rollout early next year.

"Chick-fil-A says 100% of the royalties received from third-party retail sales will go toward scholarships for restaurant employees."

•  Reuters reports that "Burger King will begin testing reusable containers next year to reduce waste from sandwich and soda packaging, the burger brand said on Thursday."

The company is hoping that "customers will ask for their food to come in the reusable packages, pay a deposit, and get the money back after they scan used soda cups and burger boxes through an app before returning them.

"Burger King worked with waste management firm TerraCycle Inc’s Loop unit on a so-called closed-loop system that creates no waste because special packages are repeatedly cleaned and re-used. Materials used to make the packaging have not been finalized."

The program is likely to launch during the second half of next year.

Published on: October 23, 2020

Yesterday, MNB took note of a Seattle Times report that "insurance actuaries at the Washington Department of Labor & Industries" have identified what they say is a disturbing trend - that there is "greater risk of injury to workers inside Amazon’s high-speed e-commerce warehouses" than at "mechanized logging operations, law enforcement agencies, meatpacking plants and more than 260 other Washington industries."  Now, the state will consider a proposal that would charge the "e-commerce giant a higher workers’ compensation premium for its fulfillment centers," commensurate with the injury level.

Got an email in response from Jan Gee, President & CEO of the Washington Food Industry Association (WFIA):

Our association manages the workers’ comp safety and claims management for our independent grocery industry, including many food and beverage warehouses. This issue of Amazon’s warehouses came front and center two-years ago when their claims skyrocketed. Since they were in the same risk class as some of our warehouses, we investigated what was happening, that would cause rates to accelerate at such a rapid pace.

Our information was that their approach to workers’ claims management had changed, and rather than manage a claim with modified work or return to work strategies; Amazon said just to put the worker into the state system for benefits. This is significant as it shifted costs onto other warehouses which are doing all the right things, starting with proactive safety training and taking every step possible to keeping an injured worker active in the business with modified work strategies.

We were at least one of the groups who requested that WA State Labor & Industries (LNI) Workers’ Comp Division take action to isolate fulfillment centers from general grocery warehousing. It is the right, and fair thing to do as the internal functions and worker activities are very different. We are pleased with the action of LNI.

What was interesting about this was that I also got an email from MNB reader Terry Layton that seemed more cynical about the proposal:

An obvious step in the state’s push for unionization and government control.

To be honest, I didn't get that … but I didn't feel qualified to respond.  So I sent the email to Jan Gee and asked for a reaction.  Which I got:

I don't see it this way. Yes, our state is a state control system, but they have built a program where private sector associations like ours can earn our members a refund of their workers' comp premium for reduced claims cost. We, on average, earn 27 – 30% refunds for our members annually! Labor & Industries recognized that higher rates penalized some of the safest warehouses in the state because Amazon wasn't doing the right thing. The government doesn't always have a punitive motive. In this case, they sided with responsible employers and worker safety.

To be honest, I think it is a mistake to be reflexively anti-government.  But maybe that's just me.

On another subject, one MNB reader wrote:

How are customers supposed to deal with cashiers and customer service people touching their masks while taking care of your order? There have been so many times I've asked people to use hand sanitizer and I actually walked out of Bed, Bath & Beyond because both cashiers were fidgeting with their masks while at the register. This is also an issue for restaurants where people behind the takeout counter have masks below their noses or put it on when they see you come in the door. 

Are there no good fitting masks almost a year into the pandemic? 

Good question.  Though I think it may have to do with people being uncomfortable with masks as opposed to the fit.

Published on: October 23, 2020

In Thursday Night Football, the Philadelphia Eagles beat the New York Giants 22-21.

Published on: October 23, 2020

I've said here before that the world can be divided up into two groups.  People who are glad the Sixties happened, and those who are not.  (There's probably a third group, come to think of it - people so young they wonder what happened during the Sixties.)

I'm in the first group.  Not that everything that happened in the Sixties was a good thing, but by and large, I think that the revolutionary passions that inflamed the nation also trained a light on injustices too long hidden or accepted.

It is with that bias and affection for times gone by that I watched and thoroughly enjoyed The Trial of the Chicago 7, the new movie written and directed by Aaron Sorkin ("The West Wing," A Few Good Men), which debuted on Netflix last weekend.

Written with Sorkin's trademark love of discourse and directed in the same energetic style that he used in Molly's Game, the movie looks at the 1969 trial of high profile protestors who were arrested after the 1968 Democratic Convention in Chicago and charged with conspiring to incite a riot.  The group featured the likes of Abbie Hoffman (Sacha Baron Cohen), Jerry Rubin (Jeremy Strong) and Tom Hayden (Eddie Redmayne) - who had often disparate priorities and strategies - and was represented by famed litigator William Kunstler (Mary Rylance).  Presiding over the trial was Judge Julius Hoffman (Frank Langella), who was completely and transparently biased against the defendants, to the point that he had one of them, Bobby Seale (Yahya Abdul-Mateen II) - the sole Black defendant - bound and gagged in the courtroom, which may be even more shocking today than it was when it actually happened.

There's a great business lesson in the behavior of Judge Hoffman, by the way, in that he is completely out of touch with what is going on around him, unwilling to accept reality.  His behavior is the epitome of epistemic closure, which is when you are so hemmed in by your own belief system that you are unable or unwilling to accept anything other than what you believe as being possible or factual.

Much has been made of how so much of what we see in Trial resonates today because so many of the issues that emerged then are still at the top of the public consciousness.  That's a fair reading of the material, though I think this would be a terrific movie if we weren't seeing social justice debates play out in front of our eyes on America's streets.  The performances are sharply etched, Sorkin is in fine form, and the movie's structure underlines the nuances of the issues being discussed.  In the end, we are reminded that something is as true in 2020 as it was in 1968:

The whole world is watching.

See The Trial of the Chicago 7.

Just by chance, after having watched The Trial of the Chicago 7, I happened upon a documentary on the Peacock streaming site entitled The Sit-In:  Harry Belafonte Hosts The Tonight Show, which is about something I'd never heard of before.  In February 1968, Johnny Carson - then six years into his long reign as host of "The Tonight Show," went on vacation for a week and turned it over to a single guest host - Harry Belafonte.

That may not seem like such a big deal now, but the whole idea that a Black man would host five 90-minute programs on network television  in 1968 was a radical notion.  The show suggests that Carson, leery about being seen as overtly political in his own act, nevertheless understood that "The Tonight Show" could serve a useful cultural place on which to talk about important issues.  Belafonte, a passionate civil rights activist as well as a wildly popular singer and movie star, took the gig on one condition:  he got to choose the guest list.

What a list it was.  Dr. Martin Luther King, Jr.  Robert F. Kennedy.  Aretha Franklin.   Lena Horne.  Paul Newman.  Sidney Poitier.  Petula Clark.  Nipsey Russell.  Bill Cosby.  Buffy Sainte-Marie.  The Smothers Brothers.  Diahann Carroll.  Wilt Chamberlin.  Robert Goulet.  Thomas Hoving.  Zero Mostel.  And that's just a partial list.

And what a show it was, interspersing entertainment with serious discussion of social issues.  (The ratings were excellent, but there were some critics who degraded it as "a veritable minstrel show" and worse.)   It is also a priceless snapshot because it would be just months before both King and Kennedy were felled by assassins' bullets.

The Sit-In is a terrific piece of documentary filmmaking, placing Belafonte's gig on "The Tonight Show" into the context both of his career and the broader social landscape of the late sixties, when the chaotic world so vividly portrayed in The Trial of the Chicago 7 seemed to be on fire.  And it benefits enormously from the recollections of Belafonte, now 93, for whom the issues of civil and human rights are not the stuff of memory, but current events.

We're two episodes into the third season of "Star Trek: Discovery," available on CBS All Access, and I am encouraged that the show will be well-served by the fact that the plot has sent the ship more than nine centuries into the future.  As much as I liked the first two seasons - to be fair, I am a total Trekker, so it would be hard to disenfranchise me - one of the challenges was that they needed to exist within the considerable Star Trek canon that has been established since the original series premiered in 1966.  The second season actually made canon work for it, but now, in a future that we've never seen before, "Discovery" has the opportunity to really go where no one has gone before.

Smart decision by the producers, and I am all in.  Live long and prosper, Discovery.

That's it for this week.  I'll see you Monday.

Have a great weekend … stay safe … be healthy.

Sláinte!