business news in context, analysis with attitude

Published on: October 27, 2020

This weekly series of Retail Tomorrow podcasts features Sterling Hawkins, co-CEO and co-founder of CART-The Center for Advancing Retail & Technology, and MNB "Content Guy" Kevin Coupe teaming up to speculate, prognosticate, and formulate visions of what tomorrow's retail landscape will look like post-coronavirus.

Gary Saarenvirta, the founder and CEO of Daisy Intelligence and an authority on artificial intelligence, joins co-hosts Sterling and Kevin to strip A.I, down to its most basic parts - he describes it as "brute force computing" that simply allows business to learn faster "than the pace of time."  Forget about how science fiction portrays A.I., he says, but focus on the the opportunities that it can offer retailers at a highly attractive ROI.  A.I., he says, shortly will become "table stakes" for any retailer that wants to be competitive.

You can listen to the podcast here…

…or on The Retail Tomorrow website, iTunes or Google Play.

Gary Saarenvirta, founder-CEO, Daisy Intelligence

Published on: October 27, 2020

Kroger announced yesterday what it is calling a Framework for Action: Diversity, Equity & Inclusion plan, which it says features "both immediate and longer-term steps developed in collaboration with associates and leaders to accelerate and promote greater change in the workplace and in the communities the organization serves … Kroger's plan features five focus areas: Create More Inclusive Culture, Develop Diverse Talent, Advance Diverse Partnerships, Advance Equitable Communities, and Deeply Listen and Report Progress."

Rodney McMullen , Kroger's chairman and CEO, said in a prepared statement, ""Over the last several months, we've listened closely to our half a million associates and countless communities across the nation. It's never been clearer that our collective energy is necessary to achieve true and lasting equality.

"We have taken a very thoughtful and purposeful approach to develop what we believe are the right actions to substantially and positively impact our culture and our country, creating real change now and into the future. We are approaching this effort with humility, knowing we can't do it alone and don't and won't have all the answers."

There are 10 elements to the Framework.  Here's a summary:

•  "Create a DE&I Advisory Council to advance our long-term DE&I commitments, reporting to senior leadership … featuring associates from across its family of companies and headed by Monica Garnes , retail division president. The Council aligns with the organization's transformation and innovation focus, and it will partner with senior leaders and longstanding associate resource and advocacy groups, representing Black, Latinx, Asian, LGBTQ, and physically and intellectually disabled associates as well as veterans, women, parents, and millennials to drive organizational change."

•  "Provide Unconscious Bias training to every leader in 2020 and DE&I training for every associate by May 2021 … Kroger is committed to continuing to provide foundational and advanced DE&I training to every leader, using custom curriculum developed by DE&I experts."

•  "Improve diverse talent recruiting by partnering with Historically Black Colleges & Universities, Hispanic Association Colleges & Universities, and community colleges … including Clark Atlanta University , Florida A&M University , Howard University , Kentucky State University , Morehouse College , North Carolina A&T State University , Spelman College and Tennessee State University , as well as Hispanic Association of Colleges & Universities (HACU), including Dalton State College and the University of Texas A&M System. Through the program, Kroger is focusing on campus immersion activities and providing resources to help students transition from collegiate life to the workplace. Kroger is also uplifting HBCU students by supporting on-campus food pantries at several schools across the country."

•  "Establish two-way mentorship and advocacy program between high-potential diverse talent and senior leaders … it is redesigning its mentorship program to create additional opportunities and channels for more associates to have access to leaders across the organization, supporting the professional development of diverse talent and increasing collaboration, visibility and advancement."

•  "Increase spend with diverse suppliers from $3.4 billion to $10 billion by 2030.

Kroger has a longstanding supplier inclusion program, reflecting partnerships with Black Indigenous People of Color (BIPOC) entrepreneurs, women- and veteran-owned brands and services, and businesses operated by the LGBTQ community as well as business operators with disabilities."

•  Ensure our media partners align with Our Values and that we reach diverse customers through our marketing spend, partners and strategy … Kroger is redefining how it approaches advertising creative and campaigns as well as partners, including media and influencers, to better reflect its associates and customers."

•  "Deploy funds to support impactful approaches to advance racial equity with community partners … In the aftermath of George Floyd's murder and continued racial unrest across the country, Kroger established The Kroger Co. Foundation's Racial Equity Fund with a mission to lift up communities of color by building sustainable partnerships that create more equitable, inclusive and stronger communities through an investment of $5 million."

•  "Encourage associates to vote and provide voter registration and ballot applications in stores … Kroger is creating a culture of civic engagement by inspiring the nearly 500,000 associates across its organization to vote in the upcoming elections and providing non-partisan resources and agreed-to flexible work schedules so that every associate can prioritize voting. Kroger also engaged Secretary of State offices and election officials where it operates stores to offer its partnership in serving as a destination for vote-by-mail ballot applications."

•  "Engage external stakeholders to seek perspective and co-create more just and equitable communities … Over the last several months, Kroger leaders have engaged in one-to-one conversations with both local and national community influencers and game-changers as well as organizers, policymakers, trade associations, small business owners and chambers of commerce."

•  "Provide associates with platforms to continue sharing their stories and feedback with our leaders … Since June, Kroger has hosted 30 virtual listening sessions, presenting a new interactive platform for associates and leaders to express both their personal and professional perspectives on current – and past – events and how the Kroger family of companies as an employer can create a more inclusive and equitable workplace."

Published on: October 27, 2020

In Canada, the Financial Post has a story about how Loblaw Cos. is informing its suppliers that it plans to charge new fees that it will use to find $6 billion in investments in lower prices, store upgrades and e-commerce functionality.

Loblaw said that the fees would be different for manufacturers of various sizes, and that small suppliers would not be charged extra fees.

One of the letters, the Financial Post says, reads, "We're asking for your help."

The story notes that the fees appear "to mimic a controversial new fee program from Walmart Canada that riled manufacturers this summer.  Walmart argued that its fees - "1.25 per cent on the cost of goods sold to the retailers, plus an extra five per cent on e-commerce" — would be used to fund "a $3.5-billion investment to modernize its stores and distribution network.  Walmart said the fees were a fair trade-off for suppliers, since the investment would lead to sales growth."

A Canadian trade association, the Food, Health & Consumer Products of Canada (FHCP), is not happy about the imposition of new fees.

“It’s just absolutely ridiculous,” FHCP CEO Michael Graydon tells the Post. “You’ve got a lot of multinationals just throwing their hands up and saying, ‘Look, you know, I’m not sure Canada is worth the effort from a manufacturing perspective.'”

Published on: October 27, 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 8,962,783 confirmed cases of the Covid-19 coronavirus, with 231,045 resultant deaths and 5,833,824 reported recoveries.

Globally, there have been 43,847,616 confirmed coronavirus cases, with 1,165,469 fatalities and 32,215,733 reported recoveries.  (Source.)

•  From the Washington Post:

"Over the past week, the nation has suffered a 20 percent increase in cases, a 13 percent rise in hospitalizations and an 11 percent rise in daily deaths, according to Johns Hopkins University, with the seven-day average of new cases reaching its highest level ever. The increase has been driven by spread in rural communities and northern states, including Wisconsin, Iowa, Minnesota and parts of Michigan…"

•  The Wall Street Journal reports that "a large English study showed the number of people with Covid-19 antibodies declined significantly over the summer, suggesting that getting the virus might not confer long-lasting immunity from future infection.

"The survey of 365,000 adults in England who tested themselves at home using a finger-prick test showed the proportion of people testing positive for Covid-19 antibodies declined by 26.5% between June 20—12 weeks after the peak of infections in the country—and Sept. 28.

"The results also suggested that people who didn’t display symptoms were likely to lose detectable antibodies before those who had showed symptoms. The study, conducted by Imperial College London and the Ipsos Mori polling organization, was funded by the British government, which announced the results and published the study on Monday night. The results haven’t yet been reviewed by other experts."

•  The Washington Post reports that "hospitals in many regions of the country — the Upper Midwest, the Mountain West, the Southwest and the heart of Appalachia — are seeing record levels of patients suffering from covid-19, the disease caused by the novel coronavirus.

"More than 42,000 people were hospitalized nationally with the virus Monday, a figure that is steadily climbing toward the midsummer peak caused by massive outbreaks in the Sun Belt. In the places hit the hardest, this is nudging hospitals toward the nightmare scenario of rationing care.

"The country is not there yet, but the recent rise in confirmed coronavirus infections — which set a single-day record Saturday of more than 83,000 — is an ominous leading indicator of an imminent surge of patients into hospitals. The pattern of this pandemic has been clear: Infections go up, hospitalization rates follow in a few weeks, and then deaths spike."

•  The Wall Street Journal reports that yesterday "the U.S. reported more than 66,000 new coronavirus cases, lower than the peaks reached over the weekend, but elevated compared with daily levels in recent weeks.

"The number of new cases reported tends to be lower at the beginning of the week because fewer people get tested over the weekend. Even so, Monday’s total was more than 8,000 higher than the figure reported a week earlier and more than 25,000 higher than the total on Oct. 12, according to data compiled by Johns Hopkins University."

•  From the New York Times:

"Among health care workers, nurses in particular have been at significant risk of contracting Covid-19, according to a new analysis of hospitalized patients by the Centers for Disease Control and Prevention.

"The findings were released Monday as a surge of new hospitalizations swept the country, with several states hitting record levels of cases.

"About 6 percent of adults hospitalized from March through May were health care workers, according to the researchers, with more than a third either nurses or nursing assistants. Roughly a quarter, or 27 percent, of those hospitalized workers were admitted to the intensive care unit, and 4 percent died during their hospital stay.

"The study looked at 6,760 hospitalizations across 13 states, including California, New York, Ohio and Tennessee."

•  From the Milwaukee Journal Sentinel:

"The City of Milwaukee on Monday issued a new health order aimed at curbing the spread of the coronavirus, including by reducing the number of people who can gather inside and outside.

"The new order, which goes into effect Thursday, is a step back as the key indicators the city is using to gauge progress on combating the virus have regressed.

"The city has seen a total of 27,614 positive COVID-19 cases and 300 deaths, according to its online dashboard.  Meanwhile, the state has seen a rise in confirmed cases per day and in patients hospitalized with COVID-19, becoming one of the nation's hot spots."

•  The Wall Street Journal reports that "a growing number of countries are trimming the length of time people potentially exposed to the coronavirus need to self-quarantine to reduce the risk of spreading Covid-19. Their reasoning: Shorter spells might help manage the pandemic by encouraging greater compliance.

"Some disease and public health experts offer cautious support to the idea, saying that although data is patchy, such a trade-off might make sense, especially where citizens’ weariness or inability to comply with more burdensome restrictions are complicating efforts to beat back a resurgent pandemic. Cases in Europe are accelerating fast following a summer lull, and in the U.S. recently topped a new daily record of more than 80,000.

"Others, though, including the World Health Organization, say it is a gamble that could backfire and will likely result in some additional cases slipping through. And gaps in knowledge about how exactly the virus behaves make it difficult to determine the best abbreviated cutoff date or strategy."

Published on: October 27, 2020

Fascinating piece this morning in the Washington Post that starts this way:

"The coronavirus recession tipped dozens of troubled companies into bankruptcy, setting off a rush of store closures, furloughs and layoffs. But several major brands, including Hertz Global, J.C. Penney and Neiman Marcus, doled out millions in executive bonuses just before filing for Chapter 11 protection, according to a Washington Post analysis of regulatory filings and court documents.

"Since the pandemic took hold in March, at least 18 large companies have rewarded executives with six- and seven-figure payouts before asking bankruptcy courts to shield them from landlords, suppliers and other creditors while they restructured, the Post review found. They collectively meted out more than $135 million, documents show, while listing $79 billion in debts.

"Labor experts and bankruptcy attorneys say the payouts are particularly egregious — and unjustifiable — during an economic crisis, and were timed to bypass a 2005 law passed specifically to prevent executives from prospering while their companies flailed."

You can read the story here.

Published on: October 27, 2020

Los Angeles Magazine has a story about a new Target store that opened this week in Hollywood, California.

What's the big deal?  It took more than a decade to get it open.

Los Angeles chronicles the long process of getting the store open.  It started "back in 2008; the City Council approved plans for a run-down strip mall to be demolished and rebuilt as a gleaming, nearly-80-foot-tall big-box retailer in June of 2010. Problems began almost immediately.

"While the project was supported by then-Councilman Eric Garcetti and a number of community members who turned out at planning meetings, some residents weren’t impressed with the plans. Just weeks after the council’s approval, two lawsuits were filed. While independent, both complaints made similar accusations: that the city had violated rules in granting Target several variances, that the structure was too tall, and that the proposal failed to comply with the California Environmental Quality Act."

That was just the beginning of a marathon of legal, environmental and zoning issues that confronted the store - and the irony is that pandemic actually helped to bring the project home:

"Slated to finally open during the summer of 2020, the pandemic presented one final challenge to the project–until the city found a way to make a little bit of lemonade out of the COVID-19 lemons. Essential construction projects were cleared to continue, but safer-at-home orders meant few cars were on the roads. The city took the opportunity to institute temporary lane closures on usually busy Sunset Boulevard and Western Avenue that allowed work at the Target to be expedited."

Published on: October 27, 2020

•  Yahoo Finance has an interview with Walmart CEO Doug McMillon in which he talks about chief learnings from the pandemic.

"I bet it [the pandemic] has changed everybody in some way. When I think about what I have learned, the two words that come to the top of the list for me are courage and speed. What I have seen from associates and our leadership team related to those two things has been super impressive," said McMillon, who added, "I think I have learned even more to let people move quickly, think big and not let bureaucracy slow us down. Don’t sweat the small stuff. Get on with the things that are most important. I think we have moved faster as a result, and that has changed me as a leader."

Published on: October 27, 2020

•  Wakefern Food Corp. said yesterday that its most recent fiscal year ended with total sales of $18.3 billion, up 9.75 percent from the pervious year.

The company's press release quoted Wakefern President and COO Joe Sheridan as saying that "2020 created a new customer with new expectations that include cooking more at home and shopping more online. To accommodate this new customer, Wakefern added capacity to its popular online shopping offerings, including ShopRite from Home. Sheridan said the company continues to innovate, improve and expand the digital shopping experience.  'Our customers turned to us for reassurance and for the things they wanted and needed for their families during this challenging time, and we were there for our customers, our neighbors, our friends and our families,' said Sheridan. 'There have been a lot of changes to how we operate and how people shop, but our goal is always to provide the best and safest possible shopping experience for our customers. And that’s exactly what we are doing'."

•  Massachusetts-based Big Y announced that it will close all its stores this year both on Thanksgiving, November 26, as well as on Black Friday, November 27, saying that the move is designed to thank employees for their hard and essential work during the pandemic.

“We are humbled by the extraordinary work of our front line employees throughout this past year," said Richard D. Bossie, Big Y's senior vice president of operations and customer experience. "Being able to close to the public for an extra day or two, helps them to relax and spend time with loved ones. It also gives us an opportunity to clean and restock. The resilience of our teams has been remarkable, and we are thrilled to be able to thank them with a well-deserved break."

•  USA Today reports that "a listeria outbreak linked to deli meats has sickened 10 people in three states with one reported death, according to federal health officials.

"In an investigation notice, the Centers for Disease Control and Prevention said officials were investigating a multistate outbreak of listeria monocytogenes infections linked to deli meats, also known as lunch meat or cold cuts.  The CDC says a 'specific type of deli meat and common supplier have not yet been identified' but, in interviews, nine of the ill people reported 'eating Italian-style meats, such as salami, mortadella, and prosciutto' purchased prepackaged or sliced at deli counters."

•  Fox News reports that "Chobani is boosting its starting hourly wage to $15 per hour.

"Starting next year during the first quarter, around 70 percent of all company employees in hourly roles will be guaranteed a floor starting wage at more than double the federal minimum wage of $7.25 per hour. This will also include any new hires at Chobani."

“When this is all over, companies will be judged on how they behaved and how much profit is too much profit,” Chobani President-CEO Peter McGuinness  tells Fox News. “We hope other businesses, particularly food manufacturers, look at their starting wages and increase them – not just because they can, but because they should. And it’s not an expense, it’s an investment that will make businesses stronger.”

•  USA Today reports that JM Smucker "will sell its Crisco brand to the owner of Green Giant and other well-known food-related brands for $550 million in a cash deal, it announced Monday. The buyer is New Jersey-based B&G Foods Inc., which owns more than 50 brands including Ortega, SnackWells, Weber, B&M, Emeril's, Polaner and Cream of Wheat.

"The divestiture of Crisco and related oils and shortening products is in line with Smucker's previously announced goal of exiting the U.S. baking category to focus on pet food, coffee and snacks, the company said."

•  The New York Times reports that "Ant Group, the Chinese financial technology titan, is set to raise around $34 billion when its shares begin trading in Hong Kong and Shanghai in the coming weeks, which would make its initial public offering the largest on record.

"The company, the parent of the Alipay mobile payment service, priced its shares around $10.30 apiece, according to documents released on Monday by stock exchanges in the two cities. At that price, the company would be worth around $310 billion, a market value comparable to that of JPMorgan Chase and more than that of many other global banks."

Published on: October 27, 2020

•  Call it yet another victim of the e-conomy.

The Salt Lake City Tribune has announced that it is ending its 150-year run as a daily newspaper, and will become a weekly print newspaper next year.  Ownership said it was a response to how readers consumer their news these days - online.

The Tribune has been through a lot of owners over the past 150 years, and for almost seven decades has had a joint operating agreement (JOA) with the Deseret News that allowed the two papers to share expenses and profits.  That JOA also is ending at the end of the year.

Published on: October 27, 2020

Responding to yesterday's story about malls being converted to senior citizen housing - I argued that they would be more successful by converting them to multiple uses, such as also including health care facilities and community colleges - MNB reader John Rand wrote:

Totally agree. I have an adverse reaction to the stereotypical notion of a slice of demography (in this case, based on age) being turned into a community that excludes variety.

I am fully qualified to enroll in the “get off my lawn” age group should I want to. At the same time I cannot imagine living in a place where there was no younger people to listen to or talk to, to exchange perspectives. I cannot imagine needing permission or “passes” for children (or grandchildren, actually) to be there.

Many years ago when I was a grade schooler, I sat on a bench in a tiny park with a veteran of the Spanish American War. He was impossibly old, to me, and he had been a child, literally an under-age drummer boy or something, but he served in the freaking Spanish American War which made him a contemporary of sorts to Teddy Roosevelt, and I was round-eyed talking to this guy, an actual living human fossil, preserved by apparent magic for my personal amusement! (I was maybe 10 years old, so don’t @ me. )

Age-defined housing feels sterile to me compared to that, in both directions – the residents lose touch, and the non-residents lose even more.  No thanks.

I'm with you.  Totally.  For me, over-55 housing sounds like a special corner of hell.

When I was writing about this story yesterday, I also suggested the following:

It wouldn't even be a bad thing to provide some young person housing, for people just out of college with loan debt that they need to pay off … maybe they could figure out a rent formula based on income and monthly loan payment size.

This is an opportunity to find unique ways to create community as well as communities.  And that means being heterogeneous, not homogeneous.

Which prompted one MNB reader to write: 

Low rent housing inside a mall?  Great!  Let’s bring the projects to the suburbs!  Brrrrilliant!

I sense sarcasm.  And I am mystified.

First of all, low-rent housing isn't necessarily the same as "the projects," which has a really negative connotation.  But providing low-rent housing to people who have jobs but don't make a lot of money isn't the worst idea in the world.

But, for the record, I was talking about young people just out of college but loaded down with loan debt and who need a place where they can live at low cost while paying off those loans.  Paying off those loans allows them to more quickly transition to the place where they can buy cars and homes and become people who contribute to the tax base.

When did it become fashionable or acceptable to denigrate such people?

Regarding another story, which apparently struck a nerve, MNB reader Jon Berg wrote:

Thanks for covering the Jerry Jeff Walker passing.  He has always been a favorite of mine.  As a guitar player and “want to be” songwriter, I always looked to Jerry Jeff for inspiration and emotion in songwriting.  After hearing the news this weekend, I listened to “Live from Greune Hall” and “Navajo Rug” just because the files were handy on the play list.  But if you listen to “I Feel Like Hank Williams Tonight”, I think you’ll know everything you need to know about JJW.  Having seen him in concert numerous times, he was definitely true to his craft.

I’m a big Jimmy Buffett fan too, so its interesting to know about the history those two had together.  "Railroad Lady" was their biggest co-writing effort I believe.

Just wanted to say thanks for including that.  I was really happy to see that coverage and acknowledgement.

MNB reader Mike Gantt chimed in:

And.... a popular request at every concert was “Redneck Mother” but my personal favorite was “Desperado.” His iconic voice will be missed.

MNB reader Chad Petty offered some harmony:

Thank you for recognizing Jerry Jeff in your newsletter today.  Although not as famous as Willie and Waylon, he was my favorite of the Texas Country music scene. 

I grew up in Texas, and like most in the CPG industry, my life was uprooted as I’ve bounced around the country working for different companies on different retailer facing accounts.  I hadn’t put on a Jerry Jeff song in a while but with news of his passing I’m now running a loop of his songs. Music has the power to take you to different places and different times in your life.  His music plants me back in the middle of Texas with my Dad and brother hanging out on a hot Texas summer day.

Thanks again for bringing Jerry Jeff to a broader audience and me back to my roots.  RIP JJW

I noted yesterday that my favorite Jerry Jeff Walker song was "LA Freeway," which was written by Guy Clark, prompting one MNB reader to write:

Thanks for your shout out to Guy Clark. He and his wife Susanna never get the recognition they deserve as major influencers in the careers of so many of our finest songwriters, including Townes, Kris, and Emmylou.

His lyrics to Delores Keane’s “Emigrant Eyes” are really special to anyone whose grandparents came through Ellis Island.

I didn't know that song.  Just played it.  Wonderful.

My grandfather's days are numbered

But I won't let his memory die

He gave me the gift of this country

And the look in his emigrant eyes

Sometimes when I look in my grandfather's emigrant eyes

I see that day reflected and I can't hold my feelings inside

I see starting with nothing and working hard all of his life

So don't take it for granted, say grandfather's emigrant eyes

Published on: October 27, 2020

In Monday Night Football, the Los Angeles Rams defeated the Chicago Bears 24-10.