business news in context, analysis with attitude

Published on: September 13, 2021

A new - and hard to get - pasta shape offers a delicious lesson in how to tantalize shoppers.  KC serves it up here, as well as providing a couple of other product suggestions from his own larder.

Published on: September 13, 2021

From the Wall Street Journal, a story about how, "more than a century ago, Frederick Winslow Taylor and Henry Ford pioneered systems for speeding up work that we take for granted today."  But today, the natural - or perhaps unnatural - successor to all that is "Amazon’s 21st-century, algorithm-driven successor to Taylorism and Fordism. It’s a mix of surveillance, measurement, psychological tricks, targets, incentives, sloganeering, Jeff Bezos ’ trademark hard-charging attitude toward work, and an ever-growing array of clever and often proprietary technologies. Taken as a whole, this system is novel enough in the history of work that it deserves its own name: Bezosism.

"At this very moment, Bezosism is diffusing through the world of work, rewriting the source code of the global industrial machine. If it proves as popular and durable as the systems of organization on which it builds—from Fordism to the Toyota Production System—it could be, along with the e-commerce and space companies he built, Mr. Bezos’ most important legacy.

"Depending on how the company practicing Bezosism wields its power, this system of technologically supercharged management can be benevolent, or sinister, or both."

The Journal goes on:

"In Amazon’s fulfillment centers, human productivity is measured by an overall pick or stow rate calculated for each worker at a robot-fed pick-and-stow station.

"Imagine the delight of Taylor, who conceived 'scientific management' in the early 20th century, or Ford, if they could know, to the millisecond, how long it took every worker to complete a task, every day, in every facility they owned. Imagine what early time-and-motion experts Frank and Lillian Gilbreth could have accomplished had they been able to discard their film cameras and replace them with millions of hours of video captured from the digital cameras that watch every station at Amazon’s fulfillment centers."

You can read the entire story here.

Published on: September 13, 2021

In Minnesota, the Star Tribune reports that Target-owned delivery service Shipt "announced its largest expansion in three years, adding nearly 1,000 more store locations that its contract workers will service, and enlarged its coverage area to include more customers.

"As a result, the Target-owned company has the potential to reach 2 million additional households across the United States, with Atlanta, Los Angeles, Seattle and Charlotte, N.C., markets among the markets seeing the most noticeable impact."

The story notes that "Shipt worked with retail partners such as CVS and Bed, Bath & Beyond to identify their locations that could benefit from the delivery service.  For example, Shipt's service is now available at more than 200 additional CVS locations.

"Shipt has grown in leaps and bounds since the onset of the pandemic and is now available in more than 5,000 metros in the country."

Published on: September 13, 2021

The New York Times has an interview with Kohl's CEO Michelle Gass, who since joining the company in 2018 "has been working to carve out a distinct identity for the company … Among her moves — besides keeping the stores open during the pandemic — has been striking a series of partnerships with other companies.

"The most unconventional was a deal with Amazon in 2019 that allows customers to return Amazon products to Kohl’s stores. While there, Ms. Gass hopes, they might do some shopping.  Another new partner is Sephora, the beauty retailer, which is setting up mini-stores inside Kohl’s locations. It’s a bit like, well, a department store."

Some excerpts from the interview:

•  "Kohl’s had a successful model for a long time, sort of this hybrid department store brand, but with mass mall convenience. But over time that got blurred. So the challenge and opportunity is, 'OK, what is the space we can occupy that will be differentiated?' Part of it was becoming a relevant omni-channel retailer. And I really feel like we’ve checked that box. But from a product and brand standpoint, how are we going to be more relevant? How are we going to have a brand stand for something?"

•  "We are very far apart from what a traditional department store is. We are small, we’re super convenient and that allows us to do things like buy online, pick up in store and curbside. But more importantly, we see ourselves as a specialty concept, that Kohl’s is the curator and the editor to bring you all the products and brands you need to lead a more active and casual lifestyle."

Regarding the Amazon deal, Gass says, "When you take a step back and think about what it’s like to return goods, it can be very inconvenient in the traditional way, especially with online returns. Looking for the box, looking for the tape, attaching the receipt, all of that. We’re addressing that pain point. Amazon gets a deal that can address the friction point, and we’re able to leverage our appetite and welcome in traffic. It was certainly unconventional at the time when we announced it, but I think it worked out really well."

Published on: September 13, 2021

Interesting piece in the Washington Post about how, now that cities continue facing problems created by closed offices and residents' exodus because of the pandemic, "luxury retailers are rushing to open new and increasingly lavish stores in suburbs and the vacation hot spots where the wealthy have retreated during the pandemic. Gucci is heading to Oak Brook, Ill. Moncler recently set up shop in Vail, Colo. Dior has a new storefront in Scottsdale, Ariz., and Louis Vuitton in Plano, Tex. And Hermès, the maker of the $500,000 Birkin bag, is settling into suburban Detroit."

The story notes that "with travel and dining out largely off the table, many are splurging in other ways. Sales of luxury homes — with a median price of $1.03 million — surged 88 percent in the most recent quarter, far outpacing their lower-priced counterparts, according to data from national real estate brokerage Redfin. Demand for second homes, which more than doubled early in the pandemic, remained elevated through May. High-end automakers Audi and BMW saw revenue spike 90 percent in the most recent quarter, while Porsche sold a record 36,300 vehicles in the first half of the year.

That shift in spending has padded the fortunes of high-end brands. Sales at fashion house Hermès rose 127 percent in the most recent quarter, while profits at luxury giant LVMH Moët Hennessy Louis Vuitton are up fourfold from a year ago. Demand for Hermès bags, often considered investment pieces because of their high resale value, remained brisk during the pandemic, with one selling for as much as $450,000 at auction last year.

"The post-covid luxury spending boom has begun," the Post writes.  "It’s already reshaping the economy."

Published on: September 13, 2021

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…

•  Here are the US Covid-19 coronavirus numbers - 41,853,362 total cases … 677,988 deaths … and 31,871,868 reported recoveries.

The global numbers:  225,548,868 total cases … 4,645,613 fatalities … and 202,157,167 reported recoveries.  (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 73.8 percent of the US population age 12 and older has received at least one dose of vaccine, with 63 percent being fully vaccinated.

•  From Axios:

"Unvaccinated people are 11 times more likely to die of COVID than those who've gotten the shot, the CDC found … Of 37,948 hospitalizations in 13 jurisdictions studied between April and July, 2,976 patients— or about 8% — were vaccinated … Of 6,748 deaths, 616 — or about 9% — were people who were fully vaccinated.

"The three vaccines "showed continued robust protection for all adults — greater than 82 percent — for hospitalization, emergency room and urgent care trips."

•  Business Insider writes that "Business Roundtable, a lobbyist group whose members include chief executives from companies like Amazon, Walmart, Apple, Google, and Home Depot, said in a statement Thursday that it supports Biden's plan requiring companies with over 100 workers to mandate vaccines or weekly tests … The group represents over 200 chief executives from the nation's most powerful companies that 'represent every sector of the economy.'  According to the Business Roundtable website, members advocate 'for policy solutions that foster U.S. economic growth and competitiveness'."

The statement read, in part:  "“Business Roundtable welcomes the Biden Administration’s continued vigilance in the fight against COVID. America’s business leaders know how critical vaccination and testing are in defeating the pandemic, which is why so many have invested resources in encouraging and incentivizing their customers and employees to get vaccinated, including providing paid time off. Over the past several weeks many companies have decided to implement a vaccine mandate for some or all of their employees, a decision we applaud."

Indeed, the New York Times writes that "companies were already moving toward mandates before Biden’s announcement. In a recent Willis Towers Watson survey, 52% of respondents said they planned to require vaccines by the end of the year, and 21% said they already did."

However, as the Times notes, a considerable number of questions remain about procedures and requirements, including who will pay for weekly testing of employees.

•  The Financial Times reports that "the failure by the US to bring Covid-19 cases under control is scrambling business expectations of a rapid economic revival, forcing companies to reset plans and revise forecasts as they also grapple with a new federal vaccine mandate.

"Revenues have fallen at a quarter of US small businesses in each of the past three weeks while just 8 per cent saw revenue growth, according to an Economic Innovation Group study. A growing minority now expects a full economic recovery to take more than six months."

•  The Wall Street Journal writes that "restaurants’ plans to return diners to indoor tables are unraveling.

"Chains such as McDonald’s Corp. and Chick-fil-A Inc. are slowing their dining rooms’ reopenings, given the Delta-driven surge in Covid-19 infections. Other restaurants are again losing customers, and trying to squeeze more diners into outdoor patios while weather still allows … Covid-19’s resurgence is creating whiplash for restaurants, which have slogged through a year and a half of pandemic-related disruptions. Sales that had steadily grown earlier in the summer have fallen in the past five weeks, data from restaurant analytics firm Black Box Intelligence showed."

•  The Wall Street Journal reports that "Covid-19 may become a routine illness like a common cold or the flu one day, virologists and epidemiologists say. But it will take a lot to get there, and the ferocious spread of the Delta variant that is filling hospitals again shows how treacherous that path could be.

"More than 20 months after the pandemic began, people around the world are having to change the way they think about a disease that public-health authorities once believed they could conquer. A terrifying emergency has become a long, grinding haul."

According to the story, "Scientists are trying to figure out whether SARS-CoV-2 will form deadlier or more contagious new variants, and how the pandemic might end. Their best-case scenario isn’t anything as hopeful as eradication. Instead, many expect Covid-19 will become a routine disease like a common cold or the flu, rather than a cause of mass hospitalizations and deaths.

"That would make it just another disease for doctors to treat, one of many possible causes of a cough, fever or congestion. It also would become one more disease that people might have to get regularly immunized against."

Published on: September 13, 2021

•  BoiseDev reports on how Albertsons "is quietly working on a new technology it calls Scan & Pay.  The project uses a mobile app that allows customers to grab goods in the store, scan barcodes on a special mobile app, pay using the app — and leave. On the way out the door, customers show their phone receipt to an Albertsons employee."

The company says that the technology will first be tested at two stores in the Boise area.

The story notes that "the Scan & Pay technology harkens back to an earlier test by Albertsons, known as Shop ‘n’ Scan. Fifteen years ago, Albertsons piloted a test in Boise that allowed customers to use a custom handheld scanner as they roamed the aisles of the store. Similar to the new product, shoppers would scan the barcodes on items with the scanner. They would then visit the self-checkout area where an employee would do an audit of the scanning process and customers would pay at a kiosk.

"Shop ‘n’ Scan later rolled out widely in the Dallas Fort-Worth area in 2004. The company later mothballed the project.  Now, with 15 years of additional technological advancement – and a combo scanner/payment device in every pocket, the company appears poised to try again."

•  Marketplace reports that Amazon "could soon be the home of NFL’s Sunday Ticket package.

"The e-commerce giant is being labeled as the 'front-runner' to acquire the NFL’s Sunday Ticket broadcast rights when the current deal expires in 2022."

The story notes that "Sunday NFL Ticket allows fans to watch any NFL game, regardless of their location. Only certain NFL games are available to watch on linear television, and fans who want to see every game must pay extra through DirectTV," which currently holds the rights.  "DirecTV has paid about $1.5 billion per year for 'Sunday Ticket' for the past seven seasons … and the NFL is expected to ask for over $2 billion a year for the package starting next year."

Published on: September 13, 2021

•  The New York Times reports that the iconic British department store Selfridges, on London’s Oxford Street, is "trying to avoid the fate of other longtime retailers that have failed to survive the rise of online shopping and last year’s pandemic lockdowns. A few blocks away, among smaller shuttered storefronts, is the former flagship of Debenhams, a more midmarket department store chain dating to the 18th century that collapsed this year."

And so, Selfridges is now performing weddings on its fourth floor, in a nook "nestled behind the children’s clothes section, in what used to be a lounge where international shoppers could claim back the tax on their purchases."

The story notes that Selfridges "has a reputation for embracing retail theater and 'experiences' — things like outdoor SoulCycle classes, a virtual reality playground and a movie theater — among the offerings at its monumental flagship store in central London. It was opened by Harry Gordon Selfridge in 1909, a transplanted American who was a pioneer in using art exhibitions, in-store restaurants and rooftop mini-golf to attract shoppers … Selfridges already has manicurists, hairdressers, makeup artists, barbers, stylists, clothes to rent and buy, jewelry, restaurants and bars. Now, it has turned these services into wedding packages, where couples can invite up to 20 guests. Prices for the ceremonies start at 2,250 pounds (about $3,100) and then increase according to 'bespoke experiences tailored to each couple,' the company said."

Published on: September 13, 2021

•  Associated Wholesale Grocers announced that Emile Breaux has been named Senior Vice President of Sales and Member Support, taking on the responsibilities of Jeff Pedersen, Executive Vice President and Chief Sales and Support Officer, who is retiring after 45 years in the grocery business.

•  Ahold Delhaize USA announced that Dave Bass has been named Managing Director of the company's FreshDirect e-commerce business,

Bass is a longtime Ahold Delhaize executive, having spent time at Hannaford, Food Lion and the company's Retail Business Services division;  most recently, he was Senior Vice President, Omnichannel Merchandising Support at the company's Peapod Digital Labs.

Published on: September 13, 2021

Not surprisingly, I got some push-back on my Friday comments that I am in favor of the private industry vaccine mandates that will be put into place by the federal government, and no doubt will face enormous legal challenges before being implemented.

MNB reader Joe Gilman wrote:

Regardless of any position on the vaccine, the truly troubling dynamic of this whole escapade is that a President thinks he has the power to compel people to get a vaccine.

This is so far removed from any legitimate use of his power that it should make you shudder, because today it is vaccines, tomorrow it is whatever and that is scary to me.

From another reader:

Except, of course, those "around them" who have chosen to get vaccinated. And not even Xi and Putin would have had the gall to do what Biden just did.

I think the second point you make is just plain silly.  As for the first point, we do know that people who have been vaccinated can get sick, though in most cases it is not as serious as it is for the unvaccinated.  But more importantly, they're also able to transmit the virus to people who are unvaccinated, which includes people under 12 and those who are immunocompromised.  So it makes sense to get as many people vaccinated as possible.

In the words of West Virginia Gov. Jim Justice (a Republican), "If you’re not vaccinated, you’re part of the problem rather than part of the solution.”

“A bunch of people will die,” he also said. “We could have stopped this.”

Another MNB reader wrote:

I don’t agree with you. The government doesn’t have the right to tell me what I will put into my body.

My wife has a brain tumor and her Dr. at the Mayo Clinic said she shouldn’t get the vaccine. A friend that is a Dr. and has known my wife for over 20 years said don’t get the vaccine. My wife’s person Dr. said don’t get the vaccine.

But you think a person that doesn’t even know anything about me or my wife has the right to tell me what is right.

I may be wrong about this, but I don't think your wife would be required to get the vaccine, for all the reasons you just laid out.

I would think that you would want to be vaccinated, though, since the last thing you would want to do is get her sick.

From another reader:

My wife is an emergency room PA and sees Covid 19 patients daily.  There is a current surge.  She regularly tells me how the majority of positive Covid 19 cases she sees are not vaccinated.   My wife is fully vaccinated as am I.  I think vaccines work.   That said I VEHEMENTLY object to vaccine mandates.   This country was founded on LIBERTY.  I will join those who fight vaccine mandates.  It is a gross over reach of power. 

Just a quick point here about the country's founding.  George Washington mandated that his troops be vaccinated for smallpox during the Revolutionary War, because he knew that the disease could devastate the ranks and lead to their defeat.

From another reader:

Slippery slope here, while I vigorously support and push for vaccination, we are a nation of precedent and this is clearly a precedent.  I think I will pay close attention also on how it is enforced, surely not a hand written date on a paper card…..and we thought getting certified to vote was easy?  Surely there won’t be gold stars, microchips or tattooed QR code’s or will there be?  By the time they figure it out we will be looking at the Covid 19-Zebra variant.  Sad part is expectations….why did anyone assume the vaccination rate for Covid would be greater than for the flu?  We aren’t always the smartest Oreo in the pack and politicians aren’t the best at planning and developing strategy. 

And from another:

Follow the science Kevin.  Those unvaccinated are no threat to others.  Vaccinated spread the virus just as much as unvaccinated – I had to quarantine due to a fully vaccinated person who developed COVID ignoring her sniffles since she thought she was bullet proof … Nothing is safe and effective for all.  It is a decision you should make responsibly with your physician.   I am not at all an anti-vaxxer.  I believe in vaccines.

Those unvaccinated are no threat to others … unless, of course, you count the people who cannot get access to emergency rooms and hospital care because there are so many unvaccinated people jamming them up.  (Something like 99 percent of people in hospitals for Covid-19 are unvaccinated.

While vaccinated people can, indeed, catch Covid and spread it, as I understand it those folks tend to have less severe cases and are far less likely to be hospitalized.

Another MNB reader wrote:

With all due respect for you and your views as an American I will say I strongly disagree with you. This is either republic or a democracy depending on your definition, but one thing it is it is not is a dictatorship. 

Yes I can opt out and (do the) weekly COVID test, but at over $109 per test on Amazon, that equates to over close to $500,000 annually for my company. Even if I were to mandate it I am already understaffed by 25%, and an additional 15% -30% estimate will quit because they do not want their rights stomped on…This would be completely be devastating to my company, my employees, my customers, and my family…I for one will fight it with all my worth…

There is another side here, and the longer this goes on, the more Biden tries to pit this country against one another the more vocal I and millions more Americans will become…I am tired of being shunned, shamed, bullied, penalized and taxed to death for exercising my American rights and freedoms granted to us all by our constitution…nothing personal, just my right to comment back…

There's a point here that I do think has to be taken seriously - the economic point.  A business with 101 people will need to comply with the mandate for the public good, but could face economic challenges by doing so, whether because it will have to pay for testing or will lose people who don't want to comply.  (Vaccines are easy to find and free to get, so that is not an issue.). At a time when employees already are hard to find, that certainly is worth considering.  The question is whether that concern outranks the public health issue.

I should say also something else here, just so I am clear.

I am not entirely sanguine about the idea of a federal vaccine mandate.  I have no idea how the courts will feel about it in terms of constitutionality, but I guess we're going to find out.  Probably a good thing, too.  I do know how the preponderance of public health officials seem to feel, and they're just trying to save lives.

(Vaccines actually are not being mandated, by the way.  Businesses and employees can opt for weekly testing.  What is not allowable is simply ignoring the problem.)

As I said on Friday, we would be better off if mandates did not seem necessary.  But I am persuaded that we have little chance of returning to whatever will pass for normal if we don't get a lot more people in this country vaccinated.  That covers the gamut from the economy to the culture, and everything in between.

Also … for kids to go to public school, vaccines are mandated.  For you to own/drive a car, a license and insurance are mandated.  For you to travel outside the country, a passport is mandated.  For you to get on a plane, ID is mandated.  On public roads, obeying traffic laws is mandated.  At a certain point in our history, conscription was mandated (for 18 year old males, at least).

In my mind, this is the kind of thing that should not need to be mandated, because we would all pull together.  But in the interest of public safety - as in the case of all the other mandates I mentioned - apparently it needs to be.

I did get a few emails that agreed with me.

MNB reader Steven Ritchey wrote:

Color me old, but I remember when it was I believe the polio vaccine was mandated way, way back in the early 1960's.  I remember as a small child, my family going to a local civic center and having to drink the vaccine.  I don't know why I remember this part, but I remember it, the vaccine,  being chilled.

So, there is a precedent for mandating we take a vaccine for the public good.

I remember also as a child being told by my mother we were going to the Dr.'s office for a vaccine, all it meant to me was a needle being stuck into some body part which I hated then.  It amazes me now, all these decades later it doesn't bother me at all, but then it was feared.

Honestly, I wish the mandate wasn't needed, but, I'm not surprised, and me being fully vaccinated, it doesn't bother me at all.

Just my two cents worth, and in todays economy with todays prices, tells you just how much it is really worth.

From another reader:

I just wish the mandates were not needed.  The sense of overreach bothers me.  However, knowing people that refuse to get the vaccine due to “personal” reasons and knowing people that have gotten covid, it just screams just how dumb people can be for not getting vaccinated.

One final point, if I may.

There's only one reason I've been covering this on MNB since the beginning of the pandemic.  These decisions and debates affect the conduct of commerce and the future of the companies and people it has been my pleasure to writer about for decades.

I don't want to see the economy take a hit from this.  I don't want to see the people who work in the industry (many of whom are more than readers, but friends) get sick or worse.  In the latter case, I think most folks feel the same way about me (though based on some of the emails I've gotten, but have not posted, not everybody).

Published on: September 13, 2021

It is Week One in the National Football League…

Seattle Seahawks 28, Indianapolis Colts 16

Jacksonville Jaguars 21, Houston Texans 37

Philadelphia Eagles 32, Atlanta Falcons 6

Los Angeles Chargers 20, Washington 16

Pittsburgh Steelers 23, Buffalo Bills 16

San Francisco 49ers 41, Detroit Lions 33

Minnesota Vikings 24, Cincinnati Bengals 27

NY Jets 14, Carolina Panthers 19

Arizona Cardinals 38, Tennessee Titans 13

Cleveland Browns 29, Kansas City Chiefs 33

Miami Dolphins 17, New England Patriots 16

Denver Broncos 27, NY Giants 13

Green Bay Packers 3, New Orleans Saints 38

Chicago Bears 14, Los Angeles Rams 34

In the US Open tennis tournament, Daniil Medvedev defeated Novak Djokovic in the men's singles championship match 6-4, 6-4, 6-4, ending Djokovic's hopes for a Grand Slam (winning all four major tournaments in a single year).

And, in the women's singles championships, 18-year old Emma Raducanu of Great Britain defeated 19-year-old Leylah Fernandez of Canada 6-4, 6-3, making her the first qualifier to reach the finals as well as the woman with the least number of major appearances to win the title.

Fernandez, in her remarks after her loss on Saturday, September 11, won the love of the crowd when she said, “I know on this day, it’s especially hard for New York and everyone around the United States.  I just want to say that I hope I can be as strong and resilient as New York has been the last 20 years. Thank you for always having my back. Thank you for cheering for me. I love you, New York.”

The media noted that Raducanu and Fernandez were two unseeded teenagers, ranked 150th and 73rd, respectively, playing for $2.5 million and a first Grand Slam title. 

Variety reports that Amazon, which held the rights to show Saturday’s U.S. Open women’s singles final in the UK, sold the broadcast rights to public service broadcaster Channel 4 there so that Brits could watch the match for free.

The story says that Amazon then said it would "reinvest all fees from the Channel 4 agreement into British women’s tennis to support the next generation of talent."