business news in context, analysis with attitude

Published on: January 6, 2022

KC offers some reasons, originally curated by Politico, to feel optimistic about 2022.  Some hints:  electric vehicles and renewable energy, diversity numbers, and optimism itself.  Plus, Mel Brooks and Monty Python.

Published on: January 6, 2022

CNBC reports that "Walmart is cutting pandemic-related paid leave in half — from two weeks to one week — after the Centers for Disease Control and Prevention cut isolation requirements last week for asymptomatic people with Covid and shortened the time that close contacts need to quarantine … Walmart said that through March 31 it will provide paid time off for employees who are mandated to quarantine by a health-care provider, government or Walmart or if they fail a health screening or test positive for Covid. It said employees who qualify will be paid for one week."

The CNBC story points out that "Walmart is one of the first companies to announce changes in the wake of the CDC’s revised guidance — and its move could prompt others to revise paid leave policies, too. Last week, U.S. health officials said they would reduce the length of required isolation and quarantine to align with growing evidence that people are most infectious in the two days before and three days after symptoms develop. The federal agency’s announcement came as many industries, including hospitals and airlines, struggled to keep operations going amid a surge in Covid cases among staff."

Walmart reportedly has asked its office employees to continue to work remotely/from home until the end of this month, though its offices are open.

Published on: January 6, 2022

Amazon said yesterday that is has struck a deal with Stellantis - the world's sixth largest automaker, which resulted from a 2021 merger between Fiat and France's PSA Group - to use its Amazon Web Services (AWS) cloud connectivity unit to create new digital products that will be installed in millions of new vehicles.

Among the brands to be impacted by the deal are Jeep, Chrysler, Dodge, Ra, Alfa-Romeo and, of course, Fiat.

According to the announcement, "Stellantis will accelerate its shift to becoming a sustainable mobility tech company through this relationship, which involves Amazon Devices, Amazon Web Services (AWS), and Amazon Last Mile. Stellantis and Amazon will collaborate to deploy Amazon’s technology and software expertise across Stellantis’ organization, including vehicle development, building connected in-vehicle experiences, and training the next generation of automotive software engineers. Together, the two companies will create a suite of software-based products and services that seamlessly integrate with customers’ digital lives and add value over time through regular over-the-air (OTA) software updates."

The companies said that "Amazon and Stellantis will collaborate to deliver software for STLA SmartCockpit, which will run in millions of Stellantis vehicles globally starting in 2024. The software-defined platform will seamlessly integrate with customers’ digital lives to create personalized, intuitive in-vehicle experiences through AI-enhanced applications for entertainment, Alexa-enabled voice assistance, navigation, vehicle maintenance, ecommerce marketplaces, and payment services."

Reuters comments that "the agreements expand Amazon's efforts to get a bigger foothold in the transportation industry, and could help Stellantis close the gap with Tesla Inc. in developing vehicles with sophisticated, software-powered infotainment features that are connected to the data processing cloud."

CNBC notes that "the collaboration between the two companies comes two months after Amazon-backed electric vehicle Rivian debuted on the Nasdaq. Shares of Rivian, which named Amazon its preferred cloud provider in December and has a contract to make 100,000 vehicles for Amazon by 2030, fell 11% in Wednesday’s trading session."  Amazon, however, says that its relationship with Rivian is unaffected by the new deal.

Published on: January 6, 2022

National Retail Federation (NRF) Chief Economist Jack Kleinhenz said yesterday that he believes that the Covid-19 omicron variant "will bring uncertainty to the economy in 2022 and could contribute to inflation, but is unlikely to cause widespread shutdowns or slowdowns."

Here's what he said:

"Even with the experience of the past two years, there is no model that can predict how the economy responds to a pandemic.  What we have learned is that each successive variant has slowed down the economy but that the degree of slowdown has been less.

"While omicron is highly transmissible, its effects can be relatively mild for those who are fully vaccinated and broad-based lockdowns are not expected.  Little is certain about omicron’s impact on consumer demand, but people who stay at home because of the variant are more likely to spend their money on retail goods rather than services like dining out or in-person entertainment. That would put further pressure on inflation since supply chains are already overloaded across the globe."

Published on: January 6, 2022

Really good piece in Fast Company that goes behind one manufacturer's made-in-the-USA claims, exploring the nature of accuracy, trackability and transparency.  An excerpt:

"When you buy a product with the words 'Made in USA' splashed on it, how do you know the brand is telling the truth about where it was really manufactured?

"That’s the crux of a new class action lawsuit against New Balance. The case, filed by five consumers, argues that the sneaker brand misleads customers by marketing many of its shoes as locally manufactured when, in fact, as much as 30% of the content of these shoes are actually produced overseas using foreign labor. Beyond misleading customers, this goes against the regulations established by the Federal Trade Commission (FTC) that companies can only label their products as 'Made in USA' if they contain 'no - or negligible - foreign content'."

The story notes that New Balance traditionally "has argued that it’s not misleading consumers because it includes tags that make it clear that it considers a product to be made in the USA if 70% of the product is made locally. It also points out that it has four factories in New England where it hires around a thousand American workers to make its shoes. (We reached out to the company for comment on this story but did not receive a response by the time of publication.) The fact remains, however, that New Balance’s internal definition of what it means to be American-made goes against the legal definition established by the FTC."

You can read the story here.

Published on: January 6, 2022

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 58,805,186 cases of the Covid-19 coronavirus, resulting in 853,612 deaths and 41,999,896 reported recoveries.

Globally, there have been 298,477,857 cases, with 5,484,453 resultant fatalities and 256,961,286 reported recoveries.   (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 78.5 percent of the US population age five and older has received at least one dose of vaccine, with 66.2 percent of that cohort being fully vaccinated.  The CDC says that 73.9 percent of the total US population has received at least one dose of vaccine, with 62.3 percent of the total population being fully vaccinated.

And, the CDC says, 34.9 percent of the total US population has received a vaccine booster dose.

•  The CDC also announced yesterday that it has approved an advisory committee's recommendation that booster shots of Pfizer-BioNTech's COVID-19 vaccine should be given to 12- to 17-year-olds, ideally five months after they've received their original vaccinations.

Axios writes that "the move comes days after the Food and Drug Administration expanded its authorization of Pfizer boosters to allow 12- to 15-year-olds to receive the third shots.

"The CDC on Tuesday also updated its COVID-19 vaccine guidance, recommending that individuals who received the Pfizer shot get a booster five months after getting their second shot, instead of six.

"The CDC also encouraged children who are immunocompromised between the ages of 5 and 11 to receive a third primary COVID-19 shot 28 days after their second shot."

•  Los Angeles Magazine reports on a new study from the UCLA Labor Center saying that "fast food employees in Los Angeles County are at a higher risk of contracting COVID in addition to facing difficult work conditions during the pandemic … The report reveals that fast food workers don’t receive workplace protections to which they are legally entitled despite their frontline roles during the pandemic. Nearly a quarter of fast food employees contracted COVID in the last 18 months and less than half were notified by their employers after they had been exposed to the virus."

The story cites the study's conclusions that "violations of labor standards within fast food restaurants have increased during the pandemic. Nearly two-thirds of employees have experienced wage theft, and more than half of them have faced health and safety hazards on the job, resulting in injuries for 43 of workers."

•  From the Washington Post this morning:

"The omicron coronavirus variant is slowing the economic recovery, making worker shortages for already-shorthanded employers more severe and leading consumers to pull back from spending on restaurants, hotels and airlines that have been battered by two years of pandemic upheaval.

"In the United States, major airlines this week canceled thousands of flights, while public transit systems in New York and Washington curtailed service because of staffing shortages. Professional sports schedules were upended and corporations such as American Express, Goldman Sachs and The Washington Post have shelved their January return-to-office plans."

•  Tennis star Novak Djokovic traveled to Australia yesterday to defend his Australian Open title, but was denied entry to the country as authorities ruled that his medical exemption from vaccination mandates was illegitimate.

The Wall Street Journal reports that "a spokeswoman for Australia’s Health Minister Greg Hunt confirmed that Djokovic would not be allowed to enter the country. Djokovic and his team had been held at Melbourne Airport for more than six hours by the Australian border force when he was informed that he needed to leave immediately."

According to the story, "Djokovic had not secured the necessary medical exemption to rules requiring arrivals to have received two doses of Covid-19 vaccine … the government told Australian Open organizers in late November that a diagnosis of, and recovery from, Covid within six months of entry would not exempt players from Australia’s vaccination requirements.

"The saga of Djokovic’s possible trip to Australia had been brewing for months. The men’s world No. 1 had made it known that he didn’t want to be vaccinated while Australian Open organizers and the local government insisted that no unvaccinated players would be admitted, in accordance with national law requiring travelers to be jabbed."

Djokovic certainly has the freedom not to be vaccinated, if that is his choice.  But choices often come with consequences, and this is one of those times.

•  The Associated Press reports that "the Grammy Awards were postponed Wednesday weeks before the planned Los Angeles ceremony over what organizers called 'too many risks' from the omicron variant, signaling what could be the start of another year of pandemic upheaval for awards season.

"The attempt at a back-to-normal show had been scheduled for Jan. 31st at the newly renamed Crypto.com Arena with a live audience and performances, but no new date is on the books. The Recording Academy said it made the decision to postpone the ceremony 'after careful consideration and analysis with city and state officials, health and safety experts, the artist community and our many partners'."

The AP also reports that "the Sundance Film Festival is canceling its in-person festival and reverting to an entirely virtual edition due to the current coronavirus surge.

Festival organizers announced Wednesday that the festival will start as scheduled on Jan. 20 but will shift online. The festival had been planned as a hybrid, with screenings both in Park City and online. Last year’s Sundance was also held virtually because of the pandemic."

Published on: January 6, 2022

•  PCC Community Markets, the largest food co-op in the country, said yesterday that it will finally open its new downtown Seattle store on January 19.  The store originally was scheduled to open last summer, but was delayed because of concerns about staffing and safety related both to the pandemic and the civil disobedience that has plagued the city.

The 20,000 square foot store is about a half-dozen blocks from the waterfront, in Rainier Square, as being positioned as being appropriate for a full grocery shop as well as convenience food purchases.

•  CNN reports that "six employees at a Buffalo Starbucks that recently voted to join a union walked out just before 9 am Wednesday citing health concerns, prompting the temporary closing of the store.

"Starbucks said it had closed that location and others in the city to in-store customer traffic Monday, restricting them to take-out only service due to a rising number of Covid cases in the area.

"Limiting stores to take out service also allows the locations to operate with fewer employees — referred to as "partners" at Starbucks — which is helpful given that many workers are unavailable due to the surge in Covid cases. Starbucks decided to close the Buffalo store rather than keep it open with staff from other locations once the workers walked out Wednesday, Starbucks spokesperson Reggie Borges said."

This is happening all over the country.  Several Starbucks within miles of my house have been closed this week because of staffing issues created by the omicron variant.  Still, it is an unfortunate coincidence that the unionized store in Buffalo is one of those being affected.

•  USA Today reports that "Bed Bath & Beyond is permanently closing more stores.

Another 37 stores located in 19 states will shutter, most by the end of February … The locations are currently going through store closing liquidation sales."

The story notes that Bed Bath & Beyond "announced in July 2020 that the company would close 200 of its namesake stores over two years, accounting for 21% of its Bed Bath & Beyond stores."

Published on: January 6, 2022

•  Albertsons announced that Sheryl Salazar, the company's Director of Fresh for both Albertsons and Vons in Southern California, has been promoted to be senior vice president of marketing and merchandising for the division.

Published on: January 6, 2022

I spoke here yesterday about my daughter suggesting that during the interminable traffic jam in Northern Virginia earlier this week, Amazon could've used drones to supply people stuck in their cars with food, water, blankets and even medicine.

One MNB reader responded:

I think your daughter’s concept of drones was a great idea but I feel we could have gone one step further. I understand there was approximately a foot of snow along I-95 which caused the accidents and 27 hours plus traffic jam. But why only drones? Along that heavily populated corridor there are so many retail outlets that I would think some people would have volunteered to bring some supplies to those stranded. I know this would not be easy but snowmobiles or 4-wheel drive vehicles could have gotten close enough to bring blankets, water and sandwiches. Along that corridor you have every major supermarket and other retailers who could have formulated a rescue plan.  Drones – sure but what about just plain old-fashioned help from communities along that route.  Hard to believe we couldn’t have found a better way to coordinate some type of assistance.

Regarding another story we had this week, an MNB reader wrote:

The surprise bag is interesting for the To Good To Go idea.  I just don’t feel it has staying power.  I pay for a surprise bag and get beets.  I hate beets, so I might begin to be less inclined to use this again.  3 slices of pizza?  Cheese, Pepp, or Supreme??  I got Supreme and prefer Cheese.  Again, paid for something I don’t care for.  See my point?  Are they going to put dented cans in this bag as well?  How about, close coded bread?   Nice concept, but maybe a published list qualifying items would be more to the consumers liking.  Not just a “SURPRIZE”.  Just an observation.

I think customers who buy into the concept are willing to deal with the fact that sometimes they're gonna get stuff they don't like - like if I got Brussels sprouts.  It'd be worth the risk … though I suppose that they ought to make sure that food allergies are factored into the system, so something like peanut butter doesn't end up killing someone.

On the subject of federal help for small meat suppliers, one MNB reader wrote:

I agree with the MNB reader about the government subsidizing the smaller players in the meat industry.  As they have done in other circumstances , the White House wants to blame others for their self inflicted problems.  Fuel costs have doubled, supply costs including packaging have increased dramatically, expanded unemployment benefits and mandates have created a labor shortage and unemployment insurance costs are rising significantly for employers.  Companies can only absorb only so much without passing on the costs.  Every company along the food chain is seeing much higher expenses much of it caused by government actions.  The complainers need to look in the mirror.

And from another:

Just a comment on the 1 billion dollars the government wants to give out to smaller meat producers.  The government approved these mergers/acquisitions.   Now they are not happy with the results?  Give me a break!

And, finally, regarding the possibility that Instacart will work with Tortoise to employ floating robotic dark stores that will make it faster to serve people from neighborhood distribution facilities, one MNB reader wrote:

Floating Dark Stores -  and just like that, Instacart is a competitor vs a service provider.

This was the argument against partnering with them all along - they have all the data they need to understand what items are selected most often.

What they accomplished that (especially small independent) retailers didn't: a high adoption rate for their platform.

It remains to be seen, I think, whether Instacart would use these independent of its retailer clients, or with them.  But creating an independent service provider certainly is possible and, I would suggest, inevitable at some point.